EVZ LIMITED — Annual Report 2011

Sep 22, 2011

EVZ LIMITED

A.B.N.87 010 550 357

AND CONTROLLED ENTITIES

ANNUAL REPORT

2011

EVZ LIMITED

ANNUAL REPORT 2011

CONTENTS

CORPORATE DIRECTORY ....................................................................................................................3 DIRECTORS’ REPORT ...........................................................................................................................4 CORPORATE GOVERNANCE STATEMENT .......................................................................................11 AUDITOR’S INDEPENDENCE DECLARATION....................................................................................18 INCOME STATEMENT..........................................................................................................................19 STATEMENT OF COMPREHENSIVE INCOME ....................................................................................20 STATEMENT OF FINANCIAL POSITION .............................................................................................21 STATEMENT OF CHANGES IN EQUITY..............................................................................................22 STATEMENT OF CASH FLOWS...........................................................................................................23 NOTES TO AND FORMING PART OF THE ACCOUNTS.....................................................................24 DIRECTORS’ DECLARATION ..............................................................................................................59 INDEPENDENT AUDIT REPORT TO THE MEMBERS.........................................................................60 ADDITIONAL SHAREHOLDER INFORMATION...................................................................................62

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EVZ LIMITED

CORPORATE DIRECTORY

DIRECTORS M Findlay (Non-Executive Chairman) P Jones (Non-Executive Director) G Burns (Non-Executive Director) R Edgley (Non-Executive Director) CHIEF EXECUTIVE OFFICER A Powis CHIEF FINANCIAL OFFICER & COMPANY SECRETARY I Wallace REGISTERED & PRINCIPAL OFFICE 15 Clifford Street HUNTINGDALE VIC 3166 Telephone: (03) 9545 5288 Facsimile: (03) 9558 9944 Email: corporate@evz.com.au SHARE REGISTRY Computershare Investor Services Pty Ltd 452 Johnston Street ABBOTSFORD Vic 3067 Telephone: 1300 137 328 Facsimile: 1300 137 341 AUDITORS Bentleys Melbourne Partnership Level 7 114 William Street MELBOURNE Vic 3000 BANKERS Commonwealth Bank of Australia STOCK EXCHANGE LISTING Australian Securities Exchange Limited (Home Exchange – Melbourne) ASX Code: EVZ

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EVZ LIMITED

DIRECTORS’ REPORT

The Directors present their report on the financial statements of the Company and economic entity for the year ended 30 June 2011. In order to comply with the provisions of the Corporations Act, the Directors report as follows:

DIRECTORS

The following persons were Directors of the Company during the financial year and up to the date of this report:

Maxwell FINDLAY Peter JONES Graham BURNS Robert EDGLEY (appointed 26/8/11) Keith FAGG (retired 31/5/11)

INFORMATION ON DIRECTORS

Details of the Directors of the Company in office at the date of this report are:

• Maxwell Findlay Appointed 14 May 2008 – Non-Executive Chairman.

• Mr Findlay, age 65, was the Managing Director of Programmed Maintenance Services Limited from 1988 to 2008 and accumulated significant and relevant experience in the strategy, planning, management and marketing of a growing industrial organization.

Mr Findlay has a Bachelor of Economics and is a Fellow of the Australian Institute of Company Directors.

• Mr Findlay is a member of the Audit Committee, Nomination Committee and Remuneration Committee.

• Interest in Shares: 1,345,000 ordinary shares

• Peter Jones Appointed 29 March 2004 – Non-Executive Director.

• Mr Jones, age 59, is a Chartered Accountant and has extensive skills in business development, financing and property development.

• Mr Jones is Chairman of the Audit Committee and a member of the Nomination Committee and Remuneration Committee.

• Interest in Shares: 8,000,000 ordinary shares

• Graham Burns

• Appointed 1 February 2008 – Non-Executive Director.

• Mr Burns, age 56, has extensive managerial skills and experience in the property, retail and manufacturing sectors. He is currently the Chief Executive of Hunter Land which is a significant industrial developer in regional New South Wales.

• Mr Burns is Chairman of the Remuneration Committee and a member of the Nomination Committee.

• Interest in Shares: 7,000,000 ordinary shares

• Robert Edgley Appointed 26 August 2011 – Non-Executive Director

• Mr Edgley, age 46, holds a Bachelor’s degree in Economics from Monash University together with a second degree in Japanese language. Mr Edgley’s career has been predominantly focused in International Finance and Investment Banking in Australia, the UK and throughout Asia.

• Mr Edgley has significant experience and skills in Strategic Planning, Performance Management and Marketing and has proven abilities in building businesses.

• Mr Edgley has been appointed to the Audit Committee and is a member of the Nomination Committee.

Interest in Shares: 975,000 ordinary shares.

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EVZ LIMITED

DIRECTORS’ REPORT

DIRECTORS’ MEETINGS

The following table sets out the number of Directors’ meetings (including meetings of any committee of Directors) held during the financial year and the number of meetings attended by each Director (whilst they were a Director or Committee member):

DIRECTORS’ MEETINGS
Total number of meetings held:		8
	No. Attended	No. Held
		Whilst a Director
M Findlay – Chairman	7	8
P Jones	7	8
G Burns	8	8
R Edgley (appointed 26/8/11)	-	-
K Fagg (retired 31/5/11)	7	8
REMUNERATION COMMITTEE MEETINGS
Total number of meetings held:		1
	No. Attended	No. Held
		Whilst a Member
G Burns – Chairman	1	1
M Findlay	1	1
P Jones	1	1
AUDIT COMMITTEE MEETINGS
Total number of meetings held:		2
	No. Attended	No. Held
		Whilst a Member
P Jones – Chairman	2	2
M Findlay	2	2
K Fagg (retired 31/5/11)	2	2
R Edgley (appointed 26/8/11)	-	-

There were no meetings of the Nomination Committee held during the year.

COMPANY SECRETARY

The Company Secretary is Ian Wallace. Mr Wallace is a Chartered Accountant with accounting and company secretarial experience in listed and unlisted companies.

PRINCIPAL ACTIVITIES

The economic entity operates in the engineering services sector and its principal activities are:

• Design and installation of syfonic roof drainage systems to major buildings including airports, shopping centres and sporting venues throughout Australia and South East Asia.

• Design, manufacture, service and maintenance of large steel tanks for use in the water, petrochemical and chemical industries.

• Design, construction, on-site installation, maintenance and shutdown engineering services to the mining, wood chip, petrochemical, aluminium, glass, cement, defence and agriculture industries.

• Design, installation and maintenance of base and back-up power generation equipment, communications equipment and marine installations.

• Fabrication and erection of structural steelwork, for large commercial, industrial and retail projects.

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EVZ LIMITED

DIRECTORS’ REPORT

OPERATING RESULTS

The net profit for the economic entity for the year after income tax expense was $207,400 compared to a net profit after income tax expense in 2010 of $259,498.

DIVIDENDS

• No dividends were declared or paid during the year.

REVIEW OF ACTIVITIES

During the year under review the Company:

• Faced significantly difficult trading conditions resulting from the prevailing economic conditions.

• Increased its relative revenue base despite significant price pressures which impacted on profit margins.

• Continued to expand its customer, product and geographic base from an increased investment in business development.

• Completed several projects utilising the joint capabilities of a number of the Group businesses.

CHANGES IN STATE OF AFFAIRS

There was no change in the state of affairs.

SUBSEQUENT EVENTS

There have not been any matters or circumstances, other than those referred to in the financial statements or notes thereto, that have arisen since the end of the financial year, that have significantly affected, or may significantly affect, the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years after this financial year.

FUTURE DEVELOPMENTS

The Directors believe, on reasonable grounds, that to include in this report particular information regarding likely developments in the operations of the economic entity and the expected results of those operations in financial years after the financial year would be likely to result in unreasonable prejudice to the economic entity. Accordingly, this information has not been included in this report.

PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237 of the Corporations Act 2001.

SHARE OPTIONS

There are no share options.

ENVIRONMENTAL REGULATION

The economic entity is not subject to any significant environmental regulations under a Commonwealth, State or Territory Law.

INSURANCE OF OFFICERS

During the financial year the Company insured the Directors and Officers of the Company against legal costs that may be brought against the Directors and officers in their capacity as officers of the Company. The policy provides for confidentiality with respect to its premium.

NON-AUDIT SERVICES

During the current and prior year there were no non-audit services provided by the Company’s Auditors.

AUDITORS’ INDEPENDENCE DECLARATION

As required under Section 307C of the Corporations Act 2001, EVZ Limited has obtained an Independence Declaration from its Auditors, Bentley’s Melbourne Partnership. This is included on page 18 of this financial report.

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EVZ LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT

This report details the nature and amount of remuneration for each Director of EVZ Limited and for key management personnel.

Remuneration Policy

The remuneration policy of EVZ Limited has been designed to align Director and Executive remuneration with Shareholder and business objectives by providing a fixed remuneration component and where appropriate offering specific short and long-term incentives based on key performance areas affecting the economic entity’s financial results. The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best Directors and Executives to govern and manage the economic entity, as well as create goal congruence between Directors, Executives and Shareholders.

Executive Remuneration

The Board’s policy for determining the nature and amount of remuneration for key senior Executives for the economic entity is as follows:

• The remuneration policy, setting the terms and conditions for Executive Officers, was developed by the Remuneration Committee and approved by the Board after seeking professional advice where appropriate from independent external consultants.

• All Executives receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits and where appropriate performance incentives.

The Remuneration Committee reviews Executive remuneration packages annually with reference to the economic entity’s performance, each Executive’s performance and comparable information from industry sectors and listed companies in similar industries.

The performance of each Executive is measured against criteria agreed with each Executive and is based predominantly on forecast growth of the economic entity’s profits and shareholders’ value. Bonuses and incentives will be linked to predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the Remuneration Committee’s recommendations. Any changes must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of Executives and reward them for performance that results in long-term growth in shareholder wealth.

During the year to 30 June 2011 no incentives were paid to Executives of the economic entity (2010: $Nil).

Executives receive a superannuation guarantee contribution required by the Government, which is currently 9%, and do not receive any other retirement benefits. Individuals may choose to sacrifice part of their salary to increase payments towards superannuation. All remuneration paid to Executives is valued at the cost to the Company and expensed.

Director Remuneration

The Board’s policy is to remunerate Non-Executive Directors at appropriate market rates. The Remuneration Committee recommends the fee structure for Non-Executive Directors which will be determined by reference to market practice, duties performed, time, commitment and accountability. Director fees are reviewed annually by the Remuneration Committee.

The Remuneration Committee may seek independent advice in determining appropriate fee structures for Directors.

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EVZ LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT (Continued)

The maximum aggregate amount of fees payable to Non-Executive Directors is subject to approval by Shareholders at the Annual General Meeting. Fees for Non-Executive Directors are not linked to the performance of the economic entity. However, to align Directors’ interests with Shareholder interests, the Directors are encouraged to hold shares in the Company and may be able to participate in any employee share/option plan introduced.

All remuneration paid to Directors is valued at the cost to the Company and expensed.

Shares and Options Issued as part of Remuneration

The Company has established the EVZ Limited Division 13A Tax Exempt Share Plan which was approved at a General Meeting of Shareholders held on 27 March 2007. Participating employees are prohibited from selling or disposing of the shares granted to them until the third anniversary of the date on which the shares were granted or the date on which the employee has ceased employment.

During the year ended 30 June 2011 no shares were granted under the Tax Exempt Share Plan.

No other forms of shares or options were issued as part of remuneration during the year to 30 June 2011 (2010: $Nil).

Performance Based Remuneration

During the year to 30 June 2011, there was no performance based remuneration paid.

EVZ has a performance based remuneration scheme which will incentivise Executives to achieve significant growth in the performance of the economic entity. Potential incentives may be granted for Executives achieving specific key performance indicators specifically aligned to grow the ongoing performance of the economic entity and therefore shareholder wealth.

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

The remuneration policy has been tailored to increase goal congruence between Shareholders and Directors and Executives.

Details of Remuneration for the Year ended 30 June 2011

The remuneration for each Director and each of key management personnel of the economic entity during the year was as follows:

Directors 2011 M Findlay P Jones G Burns K Fagg (retired 31/5/11) 2010 M Findlay P Jones K Fagg G Burns G McKern (retired 26/2/10)	Short term Employee Benefits Post Employment Benefits Salary Fees Superannuation Contributions Total $ $ $ $ - 120,000 - 120,000 - 45,000 - 45,000 - 45,000 - 45,000 - - 41,250 41,250
	- 210,000 41,250 251,250
	- 120,000 - 120,000 - 45,000 - 45,000 - 45,000 - 45,000 - 45,000 - 45,000 - 20,000 20,000 40,000
	- 275,000 20,000 295,000

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EVZ LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT (Continued)

Key Management Personnel of the Economic Entity

				Post
	Short	Term Employee Benefits		Employment
				Benefits
		Share based	Non Cash	Superannuation
2011	Salary	Remuneration	Benefits	Contributions	Total
	$	$	$	$	$
A Powis
(Chief Executive Officer)	288,276	-	4,608	15,199	308,083
I Wallace
(Chief Financial Officer and
Company Secretary)	179,213	-	16,830	50,000	246,043
A Bellgrove
(General Manager, Syfon
Systems Group)	257,405	-	831	15,199	273,435
M Goddard
(General Manager,
Brockman Engineering Pty
Ltd and Danum Engineering
Pty Ltd)	234,416	-	5,605	34,979	275,000
J Gonzalez
(General Manager, National
Engineering Pty Ltd –
commenced 28/3/11)	38,055	-	-	6,695	44,750
A Green
(General Manager, TSF
Engineering Group)	236,084	-	460	21,039	257,583
	1,233,449	-	**28,334 **	143,111	1,404,894
2010
	$	$	$	$	$
A Powis
(Chief Executive Officer)	255,755	-	6,060	49,915	311,730
I Wallace
(Chief Financial Officer and
Company Secretary)	185,878	-	15,307	50,000	251,185
A Bellgrove
(General Manager Syfon
Systems Group)	249,946	-	3,994	14,453	268,393
M Goddard
(General Manager
Brockman Engineering Pty
Ltd and Danum Engineering
Pty Ltd)	213,573	-	12,600	26,779	252,952
N Chapman
(General Manager National
Engineering Pty Ltd)	230,088	-	9,204	20,708	260,000
A Green
(General Manager TSF
Engineering Group)	232,348	-	-	20,642	252,990
V Juchima
(Danum Engineering Pty Ltd
- retired 30/4/10)	283,655	-	3,553	22,910	310,118
	1,651,243	-	50,718	**205,407 **	1,907,368

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EVZ LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT (Continued)

Key Management Personnel of the Economic Entity (Continued)

Remuneration and other terms of employment for key Executives are formalized in employment service agreements. Each of these agreements may provide for the provision of other benefits including car allowances. These agreements have no fixed term.

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

==> picture [81 x 80] intentionally omitted <==

…………………………… Director – M Findlay

Signed at Melbourne this 23[rd] day of September 2011.

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011

Introduction

The board of EVZ Limited is committed to protecting shareholders’ interests and ensuring investors are fully informed about the performance of the company’s business. The directors have undertaken to perform their duties with honesty, integrity, care and diligence, according to the law and in a manner that reflects the highest standards of corporate governance.

The directors have established the processes to protect the interests and assets of shareholders and to ensure the highest standard of integrity and corporate governance of the company.

The Australian Securities Exchange Corporate Governance Council sets out best practice recommendations including corporate governance practices and suggested disclosures. ASX Listing Rule 4.10.3 requires companies to disclose the extent to which they have complied with the ASX recommendations and to give reasons for not following them.

Unless otherwise indicated, the best practice recommendations of the ASX Corporate Governance Council, including corporate governance practices and suggested disclosures, have been adopted by the company for the year ended 30 June 2011 as relevant to the size and complexity of the company and its operations. The board has adopted a formal board charter, audit committee charter, remuneration committee charter, nomination committee charter, external communications policy, continuous disclosure policy, securities trading policy and code of conduct for directors and officers.

PRINCIPLE 1: LAY A SOLID FOUNDATION FOR MANAGEMENT AND OVERSIGHT

Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions

The EVZ Limited board charter sets out the function and responsibilities of the board. The directors of the company are accountable to shareholders for the proper management of business and affairs of the company.

The key responsibilities of the board are to:

• establish, monitor and modify the corporate strategies of the company;

• ensure proper corporate governance;

• monitor and evaluate the performance of management of the company;

• ensure that appropriate risk management systems, internal control and reporting systems and compliance frameworks are in place and are operating effectively;

• assess the necessary and desirable competencies of board members, review board succession plans, evaluate its own performance and consider the appointment and removal of directors;

• consider executive remuneration and incentive policies, the company’s recruitment, retention and termination policies and procedures for senior management and the remuneration framework for non-executive directors;

• monitor financial performance;

• approve decisions concerning the capital, including capital restructures, and dividend policy of the company; and

• comply with the reporting and other requirements of the law.

The board delegates responsibility for day-to-day management of the company to the chief executive officer (CEO), subject to certain financial limits. The CEO must consult the board on matters that are sensitive, extraordinary, of a strategic nature or matters outside the permitted financial limits.

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 (Continued)

Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior executives

The company has a duly appointed remuneration committee. The committee operates pursuant to the remuneration committee charter.

The primary responsibilities of the remuneration committee are:

• Establish appropriate remuneration policies for directors, the CEO and other senior executives which are effective in attracting and/or retaining the best directors and executives to monitor and manage EVZ Limited, whilst ensuring goal congruence between shareholders, directors and executives.

• Ensuring appropriate disclosure of remuneration in line with the Corporations Act, ASX Listing Rules and Corporate Governance guidelines.

All senior executives were reviewed during the financial year in accordance with the general process of review. In addition, pursuant to the board charter, the board conducted an annual review of itself during the financial year, taking into account developments, trends and standards set in the external market place.

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

Recommendation 2.1: A majority of the Board should be independent directors

The board presently comprises four directors, all of whom, including the chairman, are non-executive and independent directors. Profiles of the directors are set out in this annual report. All directors are subject to retirement by rotation but may stand for re-election by the shareholders every three years.

The composition of the board is determined by the board and, where appropriate, external advice is sought. The board has adopted the following principles and guidelines in determining the composition of the board:

• To be independent, a director ought to be non-executive and:

• not a current executive of the company;

• ideally not held an executive position in the company in the previous three years;

• not a nominee or associate of a shareholder holding more than 10% of the company’s shares;

• not significantly involved in the value chain of the organisation, either upstream or downstream; and

• not a current advisor to the company receiving fees or some other benefit, except for approved director’s fees.

Recommendation 2.2: The chair should be an independent director

The chairman, Max Findlay, is an independent director. He is responsible for the leadership of the board and he has no other positions that hinder the effective performance of this role.

Recommendation 2.3: The roles of chair and CEO should not be exercised by the same individual

The role of chairman is held by Max Findlay whilst the role of CEO is held by Andrew Powis.

Recommendation 2.4: The board should establish a nomination committee

The company has a duly appointed nomination committee. The committee operates pursuant to a nomination committee charter. The charter sets out the responsibilities of the committee including reviewing board succession plans to ensure an appropriate balance of skills and expertise, developing

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 (Continued)

policies and procedures for the appointments of directors and identifying directors with appropriate qualifications to fill board committee vacancies. The term of non-executive directorships is set out in the company’s constitution.

Given the size of the board, the board has determined it appropriate for the nomination committee to consist of the full board of directors.

Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors

The board and its committees undertook self-assessment in accordance with their relevant charters during the financial year. Max Findlay conducts annual one-on-one personal performance discussions with each of the individual directors.

The board was provided with all company information it needed in order to effectively discharge its responsibilities and were entitled to, and did, request additional information when considered necessary or desirable.

PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING

Recommendation 3.1: Companies should establish a code of conduct and disclose the code or a summary of the code to guide the directors, CEO, the chief financial officer (CFO) and other key executives in responsible decision-making

The company has developed codes of conduct to guide all of the company’s employees, particularly directors, the CEO, the CFO and other senior executives, in respect of ethical behaviour. These codes are designed to maintain confidence in the company’s integrity and the responsibility and accountability of all individuals within the company for reporting unlawful and unethical practices. These codes of conduct embrace such areas as:

• conflicts of interest

• corporate opportunities

• confidentiality

• fair dealing and trade practices

• protection of assets

• compliance with laws, regulations and industry codes

• ‘whistle-blowing’

• security trading

• commitment to and recognition of the legitimate interests of stakeholders

Recommendation 3.2: Companies should establish a policy concerning trading in company securities by directors, senior executives and employees and disclose the policy

Directors and other shareholders are encouraged to be long-term holders of the company’s shares. For directors and officers, the company has adopted a formal securities trading policy. Directors and officers may not deal in any of the company’s securities at any time if they have inside information. A director or officer may not trade in securities during black-out periods as determined by the board of directors. These periods generally relate to periods prior to the release to the ASX of the half-yearly and annual results or where the directors are aware of any price sensitive information. A director or officer may trade in securities at other times only if they are personally satisfied that they are not in possession of inside information.

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 (Continued)

Directors and officers must immediately advise the company secretary in writing of the details of completed transactions. Such notification is necessary whether or not prior authority has been required. The secretary must maintain a register of securities transactions. The company must comply with its obligations to notify the ASX in writing of any changes in the holdings of securities or interest in securities by directors.

PRINCIPLE 4: SAFEGUARD THE INTEGRITY IN FINANCIAL REPORTING

Recommendation 4.1: The board should establish an audit committee

The board-appointed audit committee operates in accordance with the audit committee charter. The details of the committee meetings held during the year and attendance at those meetings are detailed in the directors’ meeting schedule in the directors’ report.

Recommendation 4.2: The audit committee should be structured so that it consists only of nonexecutive directors, consists of a majority of independent directors, is chaired by an independent chair, who is not chair of the board, and has at least three members

The composition of the company’s audit committee was consistent in all aspects relating to recommendation 4.1. The audit committee consists of:

• Peter Jones (Chairman)

• Max Findlay

• Robert Edgley

Each of the members of the committee is an independent, non-executive director and the chairman of the committee is not the chairman of the board. The CEO and the CFO/Company Secretary may attend the meetings at the invitation of the committee.

All members of the committee are financially literate (i.e. they are able to read and understand financial statements) and have an understanding of the industry in which the company operates.

The audit committee provides an independent review of:

• financial information produced by the company;

• the accounting policies adopted by the company;

• the effectiveness of the accounting and internal control systems and management reporting which are designed to safeguard company assets;

• the quality of the external audit functions;

• external auditor’s performance and independence as well as considering such matters as replacing the external auditor where and when necessary; and

• identifying risk areas.

Recommendation 4.3: The audit committee should have a formal charter

A formal audit committee charter has been adopted by the board. This charter sets out the roles, responsibilities, composition, structure and membership requirements of the audit committee.

PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE

Recommendation 5.1: Companies should establish written policies and procedures designed to ensure compliance with ASX Listing Rules disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 (Continued)

The board recognises that the company, as an entity listed on the ASX, has an obligation to make timely and balanced disclosure in accordance with the requirements of the Australian Securities Exchange Listing Rules and the Corporations Act 2001. The board also is of the view that an appropriately informed shareholder base and market is essential to an efficient market for the company’s securities. The board is committed to ensuring that shareholders and the market have timely and balanced disclosure of matters concerning the company. In demonstration of this commitment, the company has adopted a formal external communications policy including a continuous disclosure policy.

In order to ensure the company meets its obligations of timely disclosure of such information, the company has adopted the following policies:

• immediate notification to the ASX of information concerning the company that a reasonable person would expect to have a material effect on the price or value of the company’s securities as prescribed under listing rule 3.1, except where such information is not required to be disclosed in accordance with the exception provisions of the listing rules;

• the company has a website where all relevant information disclosed to the ASX will be promptly placed on the website following receipt of confirmation from the ASX and, where it is deemed desirable, released to the wider media; and

• the company will not respond to market rumours or speculation, except where required to do so under the listing rules.

Based on information provided to the company secretary by directors, officers and employees, the company secretary is responsible for determining which information is to be disclosed and for the overall administration of this policy.

PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS

Recommendation 6.1: Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose that policy

The board recognises that shareholders are the beneficial owners of the company and respects their rights and is continually seeking ways to assist shareholders in the exercise of those rights. The board also recognises that as owners of the company the shareholders may best contribute to the company’s growth, value and prosperity if they are appropriately informed. To this end the board seeks to empower shareholders by:

• communicating effectively with shareholders;

• enabling shareholders to have access to balanced and understandable information about the company and its operations; and

• promoting shareholder participation in general meetings.

All shareholders are entitled to receive a copy of the company’s annual report. In addition, the company’s website will provide opportunities to shareholders to access company announcements, media releases and financial reports.

The board is committed to assisting shareholders’ participation in meetings and has adopted the following measures:

• adoption of the ASX Corporate Governance Council’s recommendation and guidelines as published in the Council’s Principles of Good Governance and Best Practice Recommendations in respect of notices of meetings; and

• ensuring that a representative of the company’s external auditor, subject to availability, is present at all annual general meetings and that shareholders have adequate opportunity to ask questions of the auditor at that meeting concerning the audit and preparation and content of the auditor’s report.

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 (Continued)

PRINCIPLE 7: RECOGNISE AND MANAGE RISK

Recommendation 7.1: Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies

The board has overall responsibility to all stakeholders for the identification, assessment, management and monitoring of the risks faced by the company. The company currently has informal policies and procedures for risk management but the audit committee seeks to ensure compliance with regulatory requirements. The operational risks are managed at the senior management level and escalated to the board for direction where the issue is exceptional, non-recurring or may impose a material financial or operational burden on the company. The relatively small size of the company means that communication and decision-making is predominantly centralised allowing early identification of risks by senior management. It also allows senior management to respond to each risk as appropriate without the need for a written risk management policy.

Recommendation 7.2: The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it 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

Given the relatively small and centralised management team, the nature of the business of the company and that a majority of independent directors sits on the audit committee, the board is continuously kept informed of the effectiveness of the company’s internal control systems.

The board continues to formalise risk management policies. In addition, the CEO and CFO have informed the board that the integrity of the financial statements is founded on a system of risk management and internal control which supports the policies adopted by the board and that the company’s risk management and internal control system is operating effectively in all material respects to manage the company’s material business risks.

PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY

Recommendation 8.1: The board should establish a remuneration committee

The company has a duly appointed remuneration committee. The committee operates pursuant to the remuneration committee charter.

The remuneration committee consists of:

• Graham Burns (Chairman)

• Peter Jones

• Max Findlay

The primary responsibilities of the remuneration committee are:

• Establish appropriate remuneration policies for directors, the CEO and other senior executives which are effective in attracting and/or retaining the best directors and executives to monitor and manage EVZ Limited, whilst ensuring goal congruence between shareholders, directors and executives.

• Ensuring appropriate disclosure of remuneration in line with the Corporations Act, ASX Listing Rules and Corporate Governance guidelines.

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EVZ LIMITED

CORPORATE GOVERNANCE STATEMENT FOR THE YEAR ENDED 30 JUNE 2011 (Continued)

Recommendation 8.2: Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives

Non-executive directors are remunerated by way of fees. They may receive options (subject to shareholder approval) but there is no scheme for retirement benefits, other than statutory superannuation. Executives are paid a salary and may be provided with shares and/or options and bonuses as part of their remuneration and incentive package (subject to shareholder approval).

There are no executive directors.

Page 17

Bentleys Melbourne

Partnership Audit & Assurance Services

Level 7, 114 William Street Melbourne Vic 3000 Australia

GPO Box 2266 Melbourne Vic 3001 Australia

ABN 47 075 804 075

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF EVZ LIMITED

T +61 3 9274 0600 F +61 3 9274 0736 audit@melb.bentleys.com.au bentleys.com.au

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2011 there have been:

• a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

• b) no contraventions of any applicable code of professional conduct in relation to the audit.

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BENTLEYS MELBOURNE PARTNERSHIP GORDON ROBERTSON CHARTERED ACCOUNTANTS PARTNER

Dated in Melbourne on this 23[rd] day of September 2011

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A member of Bentleys, an association of independent accounting firms in Australia. The member firms of the Bentleys association are affiliated only and not in partnership. Liability limited by a scheme approved under Professional Standards Legislation

Page 18

EVZ LIMITED

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2011

Notes Continuing Operations Revenue Cost of sales Gross profit Other income 2(a) Administration costs Business development costs Corporate costs Results from operating activities Net finance costs 2(c) Profit before income tax Income tax expense 3 Profit for the year from continuing operations 2 Profit for the year attributable to owners of the company Overall operations Basic earnings per share 17 Diluted earnings per share 17 Continuing operations Basic earnings per share 17 Diluted earnings per share 17	Economic Entity 2011 $ 2010 $ 79,664,960 77,045,804 (66,021,219) (63,737,531)
	13,643,741 13,308,273 155,227 69,021 (9,664,043) (9,099,482) (1,423,611) (1,482,233) (1,462,311) (1,463,147)
	1,249,003 1,332,432 (884,711) (961,019)
	364,292 371,413 (156,892) (111,915)
	207,400 259,498
	207,400 259,498
	Cents per share Cents per share 0.10 0.12 0.10 0.12 0.10 0.12 0.10 0.12

The above income statement should be read in conjunction with the accompanying notes.

Page 19

EVZ LIMITED

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

Notes Profit for the year Other comprehensive income: Exchange differences arising on translation of foreign operations 16(b) Total comprehensive income for the year attributable to owners of the company	Economic Entity 2011 $ 207,400 2010 $ 259,498 (190,710) 3,874
	16,690 263,372

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

Page 20

EVZ LIMITED

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

Notes CURRENT ASSETS Cash and cash equivalents 22 Trade and other receivables 4 Inventories 5 Financial assets 6 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables 4 Financial assets 6 Plant and equipment 7 Deferred tax assets 8 Intangible assets 9 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 10 Short-term borrowings 11 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term borrowings 12 Deferred tax liabilities 8 Other long term provisions 13 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 14 Reserves 16 Accumulated losses 16 TOTAL EQUITY	Economic Entity 2011 $ 2010 $ 4,210,546 4,442,384 17,502,083 18,048,029 1,855,800 2,083,117 - 11,795
	23,568,429 24,585,325
	372,550 383,691 111,232 - 6,029,408 6,038,887 2,077,202 2,094,247 29,342,776 29,342,776
	37,933,168 37,859,601
	61,501,597 62,444,926
	12,746,828 11,909,523 6,947,950 12,246,718
	19,694,778 24,156,241
	3,709,740 222,987 18,068 16,859 177,319 163,837
	3,905,127 403,683
	23,599,905 24,559,924
	37,901,692 37,885,002
	46,023,159 46,023,159 27,162 217,872 (8,148,629) (8,356,029)
	37,901,692 37,885,002

The above statement of financial position should be read in conjunction with the accompanying notes.

Page 21

EVZ LIMITED

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

ECONOMIC ENTITY

Balance at 1 July 2010 Total comprehensive income for year Profit for year Foreign currency translation reserve Total comprehensive income for year Transactions with owners, recorded directly in equity Shares issued Dividends Balance at 30 June 2011 Balance at 1 July 2009 Total comprehensive income for year Profit for year Foreign currency translation reserve Total comprehensive income for year Transactions with owners, recorded directly in equity Shares issued Dividends Balance at 30 June 2010	Issued Capital $ Accumulated Losses $ Capital Reserves $ Foreign Currency Translation Reserve $ Total $ 46,023,159 (8,356,029) 198,700 19,172 37,885,002
	- 207,400 - - 207,400 - - - (190,710) (190,710)
	- 207,400 - (190,710) 16,690
	- - - - - - - - - -
	46,023,159 (8,148,629) 198,700 (171,538) 37,901,692
	46,023,159 (8,095,678) 198,700 15,298 38,141,479
	- 259,498 - - 259,498 - - - 3,874 3,874
	- 259,498 - 3,874 263,372
	- - - - - - (519,849) - - (519,849)
	46,023,159 (8,356,029) 198,700 19,172 37,885,002

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Page 22

EVZ LIMITED

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Income tax paid Interest received Finance costs NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES 22(ii) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of plant and equipment Purchase of plant and equipment NET CASH FLOWS USED BY INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid by parent entity Repayment of loans Proceeds from lease financing Payments for lease financing NET CASH FLOWS USED BY FINANCING ACTIVITIES NET DECREASE IN CASH HELD Cash at beginning of financial year CASH AT END OF FINANCIAL YEAR 22(i)	Economic Entity 2011 $ 2010 $ 88,126,217 85,890,867 (84,394,100) (82,455,497) (182,840) (908,244) 183,229 182,545 (1,067,940) (1,143,564)
	2,664,566 1,566,107
	61,607 102,070 (1,145,996) (907,856)
	(1,084,389) (805,786)
	- (1,039,698) (1,937,500) (1,750,000) 123,230 177,625 (123,542) (113,329)
	(1,937,812) (2,725,402)
	(357,635) (1,965,081) 3,809,502 5,774,583
	3,451,867 3,809,502

The above statement of cash flows should be read in conjunction with the accompanying notes.

Page 23

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This financial report includes the consolidated financial statements and notes of EVZ Limited and controlled entities (‘Economic Entity’ or ‘Group’).

Basis of Preparation

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

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Accounting Policies

(a) Principles of Consolidation

A controlled entity is any entity EVZ Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities. A list of controlled entities is contained in Note 29 to the financial statements. All controlled entities have a June financial year-end. All intercompany balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the economic entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Business Combinations

Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (ie parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.

The acquisition may result in the recognition of goodwill (refer to Note 1(i)) or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.

Page 24

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(a) Principles of Consolidation (continued)

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.

Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. 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 a liability is remeasured each reporting period to fair value through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

(b) Income Tax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant tax authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period where the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probably that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Page 25

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b)

Income Tax (Continued)

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

EVZ Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax losses and credits which are immediately assumed by EVZ Limited. The current tax liability of each group entity is then subsequently assumed by EVZ Limited. The group notified the Australian Taxation Office that it had formed an income tax consolidated group to apply from 7 June 2004. The tax consolidated group has entered a tax sharing arrangement whereby each company in the group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

(c) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

(d) Construction Contracts and Work in Progress

Construction work in progress is valued at cost, plus profit recognised to date less any provision for anticipated future losses. Cost includes both variable and fixed costs relating to specific contracts, and those costs that are attributable to the contract activity in general and that can be allocated on a reasonable basis.

Construction profits are recognised on the stage of completion basis and measured using the proportion of costs incurred to date as compared to expected actual costs. Where losses are anticipated they are provided for in full. Construction revenue has been recognised on the basis of the terms of the contract adjusted for any variations or claims allowable under the contract.

(e) Plant and Equipment

Each class of plant and equipment is carried at cost less where applicable, any accumulated depreciation and impairment losses.

Plant and equipment is measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Page 26

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(e) Plant and Equipment (Continued)

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probably that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets and capitalised lease assets, is depreciated on a straight-line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate • Leasehold improvements 5 to 30% • Plant and equipment 5 to 30%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement.

(f) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to entities in the economic entity are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over their estimated useful lives.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged on a straight line basis over the period of the lease.

Lease incentives under operating leases are recognised as a liability and amortised on a straightline basis over the life of the lease term.

(g) Financial instruments

Recognition and Initial Measurement

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Page 27

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(g)

Financial Instruments (Continued)

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Financial Assets

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Financial Liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Impairment

At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the income statement.

(h) Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(i) Intangibles Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on the acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Page 28

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j) Foreign Currency Transactions and Balances Functional and Presentation Currency

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 which is the parent entity’s functional and presentation currency.

Transaction and Balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, 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 equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in the income statement.

Group Companies

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

• assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

• income and expenses are translated at average exchange rates for the period; and

• retained profits are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the statement of financial position. These differences are recognised in the income statement in the period in which the operation is disposed.

(k) Employee Benefits

Provision is made for the economic entity’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.

The group operates an equity-settled share-based payment employee share scheme. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense with a corresponding increase to an equity account. The shares issued under the employee share scheme vest immediately.

(l) Provisions

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

(m) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of two months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

Page 29

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(n)

Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Contract revenue is recognised in accordance with Note 1(d).

(o) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended used or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in the income statement in the period in which they are incurred.

(p) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(q) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(r) Critical Accounting Estimates and Judgments

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

Key Estimates – Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Refer Note 9 for key estimates used in the assessment of Goodwill.

There was no impairment with respect to the carrying value of Goodwill of the economic entity.

No impairment has been recognised in respect of plant and equipment for the year ended 30 June 2011.

(s) Adoption of New and Revised Accounting Standards

During the current year the Group adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory.

The financial report was authorised for issue on 23[rd] of September 2011 by the Board of Directors.

Page 30

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

2. PROFIT (a) OTHER INCOME Sundry income (b) EXPENSES Movement in employee benefits Bad debts – trade receivables Provision for impairment – receivables Provision for impairment - inventories Total employee costs Foreign exchange (gains)/losses Losses/(profits) on sale of plant and equipment Operating lease payments Depreciation of plant and equipment (c) NET FINANCE COSTS Finance costs – other persons Interest income – other persons 3. INCOME TAX (a) The prima facie tax on profit before income tax is reconciled to income tax as follows: Profit before Income Tax Income tax calculated at 30% (2010: 30%) Tax effect of permanent differences Under provision/(over provision) in prior years Taxation expense - offshore subsidiary Income tax expense The applicable weighted average effective tax rates are as follows: (b) The components of tax expense comprise: Current tax Deferred tax Under provision/(over provision) in prior years	Economic Entity 2011 $ 2010 $ 155,227 69,021
	155,227 69,021
	50,550 35,770 26,811 314,199 8,522 (8,900) (61,506) (81,404) 32,681,264 29,263,954 83,712 (69,526) (4,743) 4,265 1,280,297 1,251,114 1,074,209 1,036,776
	1,067,940 1,143,564 (183,229) (182,545)
	884,711 961,019
	364,292 371,413
	109,288 111,424 61,333 35,663 (34,890) (77,656) 21,161 42,484
	156,892 111,915
	43% 30%
	209,171 67,869 (17,389) 121,702 (34,890) (77,656)
	156,892 111,915

Page 31

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

4. TRADE AND OTHER RECEIVABLES Current Trade receivables Provision for impairment Amounts due from customers for construction contracts (refer Note 31) Retention receivables Other debtors and prepayments Non-Current Retention receivables Other debtors	Economic Entity 2011 $ 2010 $ 13,338,195 13,874,167 (9,982) (1,460)
	13,328,213 13,872,707 3,543,819 2,463,275 149,870 207,772
	17,021,902 16,543,754 480,181 1,504,275
	17,502,083 18,048,029
	340,553 383,691 31,997 -
	372,550 383,691

All trade and other receivables are classified as financial assets (refer Note 27).

Market practices provide for the retention of monies from progress and final billings on certain construction contracts. The monies are received after a contracted period of time has elapsed following completion of the construction.

Current trade receivables are non-interest bearing and generally on 30 days terms. Non-current trade receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is objective evidence that an individual trade or term receivable is impaired.

There are no other balances other than those impaired within trade and other receivables that contain assets that are impaired. It is expected these balances will be received when due. Impaired assets are provided for in full.

Credit Risk – Trade and Other Receivables

The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group.

On a geographical basis, the Group has credit risk exposures in Australia and Asia given the substantial operations in those regions. The Group’s exposure to credit risk for receivables at reporting date in those regions is as follows:

Australia Asia	16,809,797 16,930,324 1,064,836 1,501,396
	17,874,633 18,431,720

The following table details the Group’s trade and other receivables exposed to credit risk with ageing analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the debt has not been settled within the terms and conditions agreed between the Group and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.

Page 32

EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

4. TRADE AND OTHER RECEIVABLES (Continued) Credit Risk - Trade and Other Receivables (Continued)

Economic Entity 2011 Trade & term receivables Other receivables 2010 Trade & term receivables Other receivables	Gross Amount Past Due not Impaired (Days Overdue) Past Due & Impaired <30 Days 31-60 Days >61 Days $ $ $ $ $ 17,372,437 9,982 4,832,227 881,367 1,155,942 512,178 - - - -	Within Trading Terms $ 10,492,919 512,178
	17,884,615 9,982 4,832,227 881,367 1,155,942	11,005,097
	16,928,905 1,460 4,328,402 783,740 1,091,682 1,504,275 - - - -	10,723,621 1,504,275
	18,433,180 1,460 4,328,402 783,740 1,091,682	12,227,896

The economic entity holds no financial assets with terms that have been negotiated, but which would otherwise be past due or impaired.

Trade and other receivables pertaining to the Australian entities in the group, as disclosed in Note 32(iii), are provided as security against the group’s bank facilities. Also refer Notes 11 and 12.

5. INVENTORIES Current Raw materials and stores – at cost Less provision for impairment Work in progress – at cost	Economic Entity 2011 $ 2010 $ 1,925,800 2,042,980 (70,000) (131,506) - 171,643
	1,855,800 2,083,117

Inventories pertaining to the Australian entities in the group, as disclosed in Note 32(iii), are provided as security against the group’s bank facilities. Also refer Notes 11 and 12.

6. FINANCIAL ASSETS Current assets Funds on deposit Non-current assets Funds on deposit	- 11,795
	- 11,795
	111,232 -
	111,232 -

Funds on deposit represent a security deposit covering a guarantee for property lease obligations and security deposits against contract performance bonds.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

7. PLANT AND EQUIPMENT Plant and equipment At cost Accumulated depreciation Movement in carrying amounts Carrying amount – opening balance Additions Disposals Depreciation Exchange rate adjustment Carrying amount – closing balance	Economic Entity 2011 $ 2010 $ 10,241,933 9,316,924 (4,212,525) (3,278,037)
	6,029,408 6,038,887
	6,038,887 6,270,209 1,145,996 907,856 (56,864) (106,335) (1,074,209) (1,036,776) (24,402) 3,933
	6,029,408 6,038,887

Plant and equipment pertaining to the Australian entities in the group, as disclosed in Note 32(iii), are provided as security against the group’s bank facilities. Also refer Notes 11 and 12.

8. TAX ASSETS NON-CURRENT Deferred tax assets Deferred tax assets comprise: Provisions Other Un-recouped tax losses	2,077,202 2,094,247
	1,061,674 1,101,946 92,556 34,894 922,972 957,407
	2,077,202 2,094,247

The movement in deferred tax assets for each temporary difference during the year is as follows:

Provisions Opening balance Credited/(expensed) to income account Other Opening balance Credited/(expensed) to income account Unrecouped tax losses Opening balance Tax losses recouped Prior year adjustment Closing balance	1,101,946 1,203,885 (40,272) (101,939)
	1,061,674 1,101,946
	34,894 54,657 57,662 (19,763)
	92,556 34,894
	957,407 952,889 (26,714) (3,607) (7,721) 8,125
	922,972 957,407
	2,077,202 2,094,247

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

8. 9.	TAX ASSETS (Continued) TAX LIABILITIES CURRENT Income tax NON-CURRENT Provision for deferred tax Opening balance Additional provisions raised during year Exchange rate movement Closing balance INTANGIBLE ASSETS Goodwill on consolidation – at cost Less accumulated impairment Goodwill on acquisition – at cost Less accumulated impairment Movements in carrying amounts Goodwill on consolidation Opening balance Movement in the year Closing balance Goodwill on acquisition Opening balance Impairment Closing balance	Economic Entity 2011 $ 2010 $ - -
		18,068 16,859
		16,859 9,048 3,772 7,533 (2,563) 278
		18,068 16,859
		3,282,532 3,282,532 - -
		3,282,532 3,282,532
		27,513,731 27,513,731 (1,453,487) (1,453,487)
		26,060,244 26,060,244
		29,342,776 29,342,776
		3,282,532 3,282,532 - -
		3,282,532 3,282,532
		26,060,244 26,060,244 - -
		26,060,244 26,060,244

It has been determined that the balances of the goodwill have an indefinite life. The excess of the fair value of net assets over the purchase price of the businesses acquired has been allocated to goodwill rather than be allocated to other intangible assets. The acquisition of the businesses that generate the goodwill was determined on the abilities of the entities, as a whole, to generate future profits and hence other intangibles have not been recognised.

Goodwill is allocated to cash-generating units which are based on the group’s individual companies. All businesses operate in the engineering services industry sector.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

9. INTANGIBLE ASSETS (Continued)

Syfon Systems Brockman Engineering (incorporating Danum Engineering) Danum Engineering TSF Engineering National Engineering Impairment	Economic Entity 2011 $ 2010 $ 3,282,532 3,282,532 8,789,478 674,229 - 8,115,249 15,817,280 15,817,280 2,906,973 2,906,973 (1,453,487) (1,453,487)
	29,342,776 29,342,776

From 1 July 2011, the operations of Danum Engineering have been transferred into Brockman Engineering. Therefore these two entities have been assessed as one cash generating unit at 30 June 2011.

Impairment Disclosures

The recoverable amount of each cash generating unit above is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow projects over a maximum five year period. The cash flows are discounted using the yield of five year government bonds adjusted for appropriate risk factors at the beginning of the budget period.

The following assumptions were used in the value-in-use calculations:

	2011	2011	2010	2010
	Growth	Discount	Growth	Discount
	Rates	Rates	Rates	Rates
Syfon Systems	7.5%	6.4%	7.5%	6.4%
Brockman Engineering / Danum Engineering	0 to 7.5%	6.4%	7.5 to 10%	6.4 to 9%
TSF Engineering	10 to 25%	9.0%	10 to 25%	9.0%
National Engineering	0%	20.0%	0.0%	15.0%

Management has based the value-in-use calculations on budgets for each relevant business. These budgets use estimated weighted average growth rates to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the periods which are consistent with inflation rates applicable to the locations in which the businesses operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular business.

Sensitivity Analysis

In performing impairment testing on the carrying values of goodwill, certain discount rates and growth rates have been assumed as part of the value-in-use calculations.

The following table illustrates sensitivities to changes in those discount rates and growth rates. The analysis assumes that the movement in a particular variable is independent of the other variable.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

9. INTANGIBLE ASSETS (Continued)

9.	INTANGIBLE ASSETS (Continued)
10.	Year ended 30 June 2011 Discount Rates Syfon Systems Brockman Engineering TSF Engineering National Engineering Growth Rates Syfon Systems Brockman Engineering TSF Engineering National Engineering Year ended 30 June 2010 Discount Rates Syfon Systems Brockman Engineering Danum Engineering TSF Engineering National Engineering Growth Rates Syfon Systems Brockman Engineering Danum Engineering TSF Engineering National Engineering TRADE AND OTHER PAYABLES Current – unsecured Trade payables Sundry payables and accrued expense Employee benefits		Impairment to Carrying Value of Goodwill Increase in Discount Rates 1% Increase $ 2% Increase $ - - - - - (185,051) - -
		Impairment to Carrying Value of Goodwill Reduction in Growth Rates 1% Decrease $ 2% Decrease $ - - - - (27,789) (542,322) - -
			Impairment to Carrying Value of Goodwill Increase in Discount Rates 1% Increase $ 2% Increase $ - - - - - (77,175) (201,457) (537,201) - -
		Impairment to Carrying Value of Goodwill Reduction in Growth Rates 1% Decrease $ 2% Decrease $ - - - - (13,501) (309,073) (364,430) (867,257) - -
				Economic Entity 2011 $ 2010 $ 8,593,083 7,117,511 1,695,641 2,370,976 2,458,104 2,421,036
				12,746,828 11,909,523

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

10. TRADE AND OTHER PAYABLES (Continued) Financial liabilities classified as trade and other payables Trade and other payables - current Less: Employee leave entitlements Financial liabilities as trade and other payables 11. BORROWINGS – SHORT TERM Bank loans – secured Bank overdraft - secured Lease liabilities (Note 24) – secured		Economic Entity 2011 $ 2010 $ 12,746,828 11,909,523 (2,458,104) (2,421,036)
		10,288,724 9,488,487
		6,062,500 11,500,000 758,679 632,882 126,771 113,836
		6,947,950 12,246,718

Bank loans are in the form of Commercial Bank Bill facilities. The interest rates on outstanding Commercial Bank Bills have been fixed as follows:

Commercial Bank Bills	Commercial Bank Bills	Interest	Rates
2011	2010	2011	2010
$	$
4,250,000	4,250,000	6.82%	6.82%
4,375,000	5,250,000	5.67%	5.67%
937,500	2,000,000	5.63%	5.63%
9,562,500	11,500,000

The maturity schedule for the Commercial Bank Bill facilities is as follows:

Current 1 to 2 years 2 to 3 years Total Commercial Bank Bills	Economic Entity 2011 $ 2010 $ 6,062,500 1,937,500 3,500,000 6,062,500 - 3,500,000
	9,562,500 11,500,000

Bank loans are secured by a registered equitable mortgage over the assets and undertakings of EVZ Limited and an unlimited guarantee from EVZ Limited’s Australian controlled entities: Syfon Systems Pty Ltd, Brockman Engineering Pty Ltd, NuSource Water Pty Ltd, Danum Engineering Pty Ltd, National Engineering Pty Ltd, TSF Engineering Pty Ltd and TSF Maintenance Services Pty Ltd. Also refer to Note 32 for quantification of assets secured by Australian entities.

At 30 June 2011 the economic entity has $Nil in undrawn commercial bill facilities (2010: $Nil).

The economic entity has an interest coverage ratio covenant with its financier, the Commonwealth Bank of Australia, which is calculated based on net profit before tax, interest and depreciation. At 30 June 2011, the economic entity is in breach of this covenant but the Commonwealth Bank of Australia advised before year end that it will not exercise its rights relating to this breach and will require the economic entity to continue to maintain the existing interest coverage ratio covenant of not less than three at each future reporting period.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

12. BORROWINGS -LONG-TERM Bank loans – secured Lease liabilities (Note 24) – secured Refer Note 11 for further information on bank loans. 13. OTHER LONG TERM PROVISIONS Non-current Employee benefits Movement: Opening balance Provisions created/utilised during year Closing balance		Economic Entity 2011 $ 2010 $ 3,500,000 - 209,740 222,987
		3,709,740 222,987
		177,319 163,837
		163,837 60,756 13,482 103,081
		177,319 163,837

A provision has been recognised for employee entitlements relating to long service leave. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measure and recognition criteria relating to employee benefits are disclosed in Note 1(k).

14. ISSUED CAPITAL Issued and paid up 207,420,868 ordinary shares (2010: 207,368,245 ordinary shares) – refer Note 14(a) 518,546 fully paid employee shares (2010: 571,169 ordinary shares) – refer Note 14(b) (a) Issued and fully paid up ordinary shares Opening balance Conversion of employee shares Closing balance – 30 June 2011 Opening balance Conversion of employee shares Closing balance – 30 June 2011	45,757,195 45,730,205 265,964 292,954
	46,023,159 46,023,159
	45,730,205 45,720,208 26,990 9,997
	45,757,195 45,730,205
	Economic Entity 2011 2010 No. No. 207,368,245 207,348,755 52,623 19,490
	207,420,868 207,368,245

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. The ordinary shares have no par value.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

14. ISSUED CAPITAL (Continued)

(b) Fully paid employee shares

Shares issued under the EVZ Limited Division 13A Tax Exempt Share Plan rank equally with all other ordinary issued shares in all respects including voting rights and entitlement to participate in dividends, future rights and bonus issues. The participating employee must not sell or dispose of the employee shares until the earlier of the third anniversary of the date on which the shares were granted and the date on which the employee has ceased employment.

Opening balance Conversion of employee shares Closing balance – 30 June 2011 Opening balance Conversion of employee shares Closing balance – 30 June 2011	Economic Entity 2011 2010 $ $ 292,954 302,951 (26,990) (9,997)
	265,964 **292,954 **
	Economic Entity 2011 2010 No. No. 571,169 590,659 (52,623) (19,490)
	518,546 571,169

(c) Share options

• There are no share options on issue at 30 June 2011 (2010: Nil).

(d) Capital management:

Management controls the capital of the economic entity in order to maintain a good debt to equity ratio, provide shareholders with adequate returns and ensure the economic entity can fund its operations and continue as a going concern. The economic entity’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements. Management effectively manages the economic entity’s capital by assessing the economic entity’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

The economic entity’s gearing ratio is represented as net debt as a percentage of total capital and is determined as follows:

• Net debt is total bank borrowings less cash and cash equivalents.

• Total capital is total equity and net debt.

As at 30 June 2011 the economic entity’s gearing ratio was 14.54% (2010: 17.48%).

15. DIVIDENDS

Interim fully franked ordinary dividend Final fully franked ordinary dividend Balance of franking account	- 519,849 - -
	- 519,849
	1,896,514 2,553,518

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

16. RESERVES AND ACCUMULATED LOSSES (a) Accumulated Losses Accumulated losses at the beginning of the financial year Net profit Dividends paid/declared Accumulated losses at the end of the financial year (b) Reserves Capital Reserve Reserve at beginning of year Foreign Currency Translation Reserve Reserve at beginning of year Movement for year Reserve at end of year	Economic Entity 2011 $ 2010 $ (8,356,029) (8,095,678) 207,400 259,498
	(8,148,629) (7,836,180) - (519,849)
	(8,148,629) (8,356,029)
	198,700 198,700
	198,700 198,700
	19,172 15,298 (190,710) 3,874
	(171,538) 19,172
	27,162 217,872

Capital reserves represent capital profits, which will be used to fund the ongoing business of the economic entity.

No. No. 17. EARNINGS PER SHARE (a) Weighted average number of ordinary shares outstanding during the year used in calculation of Basic Earnings per Share 207,939,414 207,939,414 (b) Weighted average number of ordinary shares outstanding during the year used in calculation of Diluted Earnings per Share 207,939,414 207,939,414

18. KEY MANAGEMENT PERSONNEL Names and positions of Directors and key management personnel in office at any time during the financial year are:

Mr M Findlay Mr P Jones

Mr G Burns Mr K Fagg (retired 31/5/11) Mr A Powis Mr I Wallace Mr A Bellgrove Mr M Goddard

Mr A Green Mr J Gonzales (appointed 28/3/11) Mr N Chapman (resigned 9/3/11)

Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Chief Executive Officer

Chief Financial Officer and Company Secretary General Manager of Syfon Systems Group General Manager of Brockman Engineering and Danum Engineering General Manager of TSF Engineering Group General Manager of National Engineering General Manager of National Engineering

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

18. KEY MANAGEMENT PERSONNEL (Continued)

KEY MANAGEMENT PERSONNEL (Continued)
Remuneration of key management personnel is: - Short term employee benefits - Post employment benefits	Economic Entity 2011 $ 2010 $ 1,471,783 1,976,961 184,361 225,407
	1,656,144 2,202,368

Also refer to disclosures in Note 20 for other transactions with directors and key management personnel.

The number of ordinary shares held by each key management personnel of the Group during the financial year is as follows:

30 June 2011 M Findlay P Jones G Burns K Fagg (retired 31/5/11) A Powis I Wallace M Goddard A Bellgrove A Green J Gonzalez (appointed 28/3/11) N Chapman (retired9/3/11) 30 June 2010 M Findlay P Jones K Fagg G Burns A Powis I Wallace M Goddard N Chapman A Bellgrove A Green G McKern (retired 26/2/10) V Juchima (retired 30/4/10)	Balance at beginning of year Granted as remuneration Other changes Balance at end of year 1,345,000 - - 1,345,000 7,713,748 - 286,252 8,000,000 4,700,000 - 1,300,000 6,000,000 1,886,312 - (1,886,312) - 8,571,949 - - 8,571,949 75,008 - - 75,008 421,949 - - 421,949 4,401,949 - - 4,401,949 54,000 - - 54,000 - - - - - - - -
	29,169,915 - (300,060) 28,869,855
	Balance at beginning of year Granted as remuneration Other changes Balance at end of year 1,345,000 - - 1,345,000 7,713,748 - - 7,713,748 1,694,169 - 192,143 1,886,312 3,946,606 - 753,394 4,700,000 8,571,949 - - 8,571,949 72,208 - 2,800 75,008 421,949 - - 421,949 - - - - 4,401,949 - - 4,401,949 32,000 - 22,000 54,000 8,193,993 - (8,193,993) - 3,287,603 - (3,287,603) -
	39,681,174 - (10,511,259) 29,169,915

There are no share options issued at 30 June 2011 (2010: Nil).

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

19. AUDITORS’ REMUNERATION

AUDITORS’ REMUNERATION
Remuneration paid/payable to auditors for: - audit or review of financial report - taxation services	Economic Entity 2011 $ 2010 $ 144,077 156,405 - -
	144,077 156,405

20. RELATED PARTY DISCLOSURES

(a) The Directors of EVZ Limited during the financial year were:

Mr M Findlay Mr P Jones Mr G Burns

Mr K Fagg (retired 31/5/11)

Mr R Edgley was appointed as a Director on 26/8/11

(b)

Transactions with Director related entities

• Consulting fees of $110,000 (2010: $145,000) were paid and $20,000 (2010: $10,000) is payable to M Findlay.

• Consulting fees of $45,000 (2010: $45,000) were paid and $11,250 (2010: $11,250) is payable to Mr P Jones.

• Consulting fees of $45,000 (2010: $45,000) were paid and $11,250 (2010: $11,250) is payable to G Burns.

• Consulting fees of $43,750 (2010: $22,500) were paid and $42,500 (2010: $45,000) is payable to K Fagg.

21. SEGMENT REPORTING Segment Information

Identification of reportable segments

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

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

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

• the products sold and/or services provided by the segment;

• the manufacturing process;

• the type or class of customer for the products or services;

• the distribution method; and

• any external regulatory requirements

Types of products and services by segment

i. Engineering

The engineering segment designs, manufactures and installs large steel tanks, silos, cooling towers, pipe spooling, pressure vessels and fabricates structural steel. All products produced

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

21. SEGMENT REPORTING (Continued)

are aggregated as one reportable segment as the products are similar in nature, manufactured and distributed to similar types of customers and subject to a similar regulatory environment.

The engineering segment is also involved in the installation process and provides ongoing support and maintenance for its products. Support is provided to existing customers for maintenance required for products under warranty.

��� Power

The power segment designs and installs constant load power stations, back-up power generation equipment and sustainable energy solutions. In addition, the segment services, maintains and hires all types of generators and associated equipment.

iii. Water

The water segment designs syfonic roof drainage systems for large and/or complex roof structures, supplies and installs fibreglass panel tanks and prefabricated hydraulic systems.

Basis of accounting for purposes of reporting by operating segments

i. Accounting policies adopted

• Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

• ii. Inter-segment transactions

• Inter-segment sales are based on values that would be realised in the event the sale was made to an external party at arm’s length. All such transactions are eliminated on consolidation of the Group’s financial statements.

Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial statements.

• iii. Segment assets

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

• iv. Segment liabilities

• Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

v. Unallocated items

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

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

21. SEGMENT REPORTING (Continued)

• Derivatives

• Net gains on disposal of available-for-sale investments

• Impairment of assets and other non-recurring items of revenue or expense

• Income tax expense

• Current tax liabilities

• Other financial liabilities

• Discontinuing operations

vi. Comparative information

This is the first year in which the group has segmented its operations and therefore there is no comparative information.

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

Segment Reporting

30 June 2011 REVENUE External sales Inter-segment sales Total segment revenue Reconciliation of segment revenue to group revenue Inter-segment elimination Total group revenue Segment net profit before tax Reconciliation of segment result to group net profit/loss before tax Unallocated items •Finance costs Net profit before tax from continuing operations	Engineering Power Water Corporate $ $ $ $ 50,037,810 16,977,480 12,649,670 - 5,300 - - -	Total $ 79,664,960 5,300
	50,043,110 16,977,480 12,649,670 -	79,670,260
	445,108 1,576,341 689,865 (1,462,311)	(5,300)
		79,664,960
		1,249,003
		(884,711)
		364,292

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011	NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011
21. SEGMENT REPORTING (Continued) ASSETS Engineering Power Water Corporate 30 June 2011 $ $ $ $ Segment assets 30,215,552 20,798,782 8,778,541 40,154,762 Reconciliation of segment assets to group assets Inter-segment eliminations Total group assets Segment asset increases for the period Capital expenditure 355,283 607,223 170,658 12,832 355,283 607,223 170,658 12,832 LIABILITIES 30 June 2011 Segment liabilities 30,620,500 17,316,657 1,947,789 9,910,823 Reconciliation of segment liabilities to group liabilities Inter-segment eliminations Total group liabilities REVENUE BY GEOGRAPHICAL REGION Revenue attributable to external customers is disclosed below, based on the location of the external customer:		Total $ 99,947,637
	355,283 607,223 170,658 12,832	(38,446,040)
		61,501,597
		1,145,996
	355,283 607,223 170,658 12,832	1,145,996
	30,620,500 17,316,657 1,947,789 9,910,823	59,795,769
		(36,195,864)
		23,599,905

Australia Asia Total revenue ASSETS BY GEOGRAPHICAL REGION The location of segment assets by geographical location of the assets is disclosed below: Australia Asia Total assets	Economic Entity 2011 2010 $ $ 77,936,517 74,644,593 1,728,443 2,652,777
	79,664,960 77,297,370
	59,489,955 58,851,086 2,011,642 3,593,840
	61,501,597 62,444,926

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

22. STATEMENT OF CASH FLOWS

(i) Cash balances comprise: Cash on hand Bank overdraft Closing cash balance (ii) Reconciliation of the operating profit after tax to net cash flows from operations: Operating profit after tax Gain/loss on sale of plant and equipment Depreciation - plant & equipment Foreign currency translation Impairment - receivables Impairment - inventories Changes in assets and liabilities adjusted for effects of acquisition/disposal of operations during financial year Increase/(Decrease) in provisions for employee entitlements (Increase)/Decrease in inventories (Increase)/Decrease in trade and other receivables (Increase)/Decrease in deferred tax assets Increase/(Decrease) in payables Increase/(Decrease) in current tax payable Increase/(Decrease) in deferred tax liabilities Net cash provided/(used) by operating activities	Economic Entity 2011 $ 2010 $ 4,210,546 4,442,384 (758,679) (632,882)
	3,451,867 3,809,502
	207,400 259,498 (4,743) 4,265 1,074,209 1,036,776 (166,308) (59) 8,522 (8,900) (61,506) (81,404) 50,550 35,770 288,823 1,002,786 449,128 1,404,945 17,045 117,184 800,237 (1,356,441) - (856,124) 1,209 7,811
	2,664,566 1,566,107

23. STANDBY ARRANGEMENTS AND UNUSED CREDIT FACILITIES

Controlled entities in the economic entity have Contingent Liability Bank Guarantee facilities totalling $8,050,000 available to them as at 30 June 2011 (2010: $8,050,000). Of this total facility, $2,546,106 (2010: $1,543,238) remains unused and available for the controlled entities use as at 30 June 2011. The facilities are secured by a registered equitable mortgage over the assets and undertakings of all Australian companies in the economic entity.

Controlled entities in the economic entity have Bank Overdraft facilities totaling $2,000,000 available to them as at 30 June 2011 (2010: $2,000,000). Of the total available facilities, $1,241,321 (2010: $1,367,118) remains unused and available for use. The facilities are secured by registered equitable mortgages over the assets and undertakings of all Australian companies in the economic entity.

24. LEASE COMMITMENTS

Leases are payable as follows: Not later than 12 months Later than 12 months but not later than 2 years Later than 2 years but not later than 5 years	149,041 135,790 98,185 113,141 131,527 133,702
	378,753 382,633

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

24. LEASE COMMITMENTS (Continued)

Future lease finance charges Lease liabilities recognised in the statement of financial position: Current Non-current Total lease liability	Economic Entity 2011 $ 2010 $ (42,242) (45,810)
	336,511 336,823
	126,771 113,836 209,740 222,987
	336,511 336,823

The weighted average interest rate implicit in these leases is 6.7% pa (2010: 6.8% pa). Leases pertain to various plant, equipment and motor vehicles and are secured against the asset to which they relate.

25. OPERATING LEASE COMMITMENTS

Property Not later than 12 months Between 12 months but not later than 5 years Plant and equipment Not later than 12 months Between 12 months but not later than 5 years Total commitments not recognised in the financial statements	Economic Entity 2011 $ 2010 $ 1,109,526 1,037,187 1,379,983 1,052,603
	2,489,509 2,089,790
	88,059 112,877 89,198 95,709
	177,257 208,586
	2,666,766 2,298,376

Property leases and plant and equipment leases are non-cancellable with a maximum five year term, with rent payable in advance. Property leases have contingent rental provisions within the lease agreement which require the minimum lease payments to be increased by at least the CPI per annum. Options exist to renew certain leases at the end of their lease term. With the approval of the lessors the property leases may be extended for further terms.

26. CONTINGENT LIABILITIES

There were no contingent liabilities as at 30 June 2011 (2010: Nil).

27. FINANCIAL INSTRUMENTS

The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from subsidiaries, bank bills and leases.

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

(i) Treasury Risk Management

The Board of Directors is responsible for monitoring treasury risk. Currency and interest rate exposures are reviewed regularly to ensure any risk associated with these exposures is minimized.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

27. FINANCIAL INSTRUMENTS (Continued)

(ii) Financial Risks

• The main risks the economic entity is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk.

• Interest rate risk The majority of the economic entity’s borrowings take the form of bank accepted bills of exchange. Fixed interest bank loans account for 100% (2010: 100%) of the total bank loans currently outstanding.

• Foreign currency risk

• The economic entity is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the economic entity’s measurement currency. The economic entity monitors its foreign exchange exposure on a regular basis.

• • Liquidity risk

• The economic entity manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash reserves are maintained.

• Credit risk

• The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The economic entity does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the economic entity.

(a) Interest Rate Risk Exposures

The economic entity’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below. Exposures arise predominantly from assets and liabilities bearing variable interest rates as the economic entity intends to hold fixed rate, assets and liabilities to maturity.

2011 Financial Assets Cash and cash equivalents Trade and other receivables Financial assets Weighted average interest rate Financial Liabilities Trade and other payables Borrowings Lease liabilities Weighted average interestrate	Floating interest rate 1 year or less 4,210,546 - - - 23,449 -	Fixed Interest 1-5 years More than 5 years Non- interest bearing Total - - - 4,210,546 - - 17,874,633 17,874,633 - - 87,783 111,232
	4,233,995 -	- - 17,962,41622,196,411
	4.75% - - 758,679 6,062,500 - 126,771	- - 10,288,724 10,288,724 3,500,000 - - 10,321,179 209,740 - - 336,511
	758,679 6,189,271	3,709,740 - 10,288,724 20,946,414
	11.24% 8.39% 8.33%
Net financial assets (liabilities)	3,475,316 (6,189,271) (3,709,740) - 7,673,692 1,249,997

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

27. FINANCIAL INSTRUMENTS (Continued) (a) Interest Rate Risk Exposures (Continued)

2010 Financial Assets Cash and cash equivalents Trade and other receivables Financial assets Weighted average interest rate Financial Liabilities Trade and other payables Borrowings Lease liabilities Weighted average interestrate	Floating interest rate 1 year or less 4,442,384 - - - 11,795 -	Fixed Interest 1-5 years More than 5 years Non- interest bearing Total - - - 4,442,384 - - 18,431,720 18,431,720 - - - 11,795	Fixed Interest 1-5 years More than 5 years Non- interest bearing Total - - - 4,442,384 - - 18,431,720 18,431,720 - - - 11,795
	4,454,179 - 4.5% - - 632,882 11,500,000 - 113,836	- - - 222,987	- 18,431,720 22,885,899 - 9,488,487 9,488,487 - - 12,132,882 - - 336,823
	632,882 11,613,836	222,987	- 9,488,487 21,958,192
	10.4% 8.3% 6.8%		- - -
Net financial assets (liabilities)	3,821,297 (11,613,836) (222,987)		- 8,943,233 927,707
Reconciliation of Net Financials Assets/(Liabilities) to Net Assets Net Financial Assets/(Liabilities) Add/(subtract) Non-financial assets and liabilities: Inventories Plant and equipment Intangible assets Deferred tax assets Provisions Net Assets			Economic Entity 2011 $ 2010 $ 1,249,997 927,707 1,855,800 2,083,117 6,029,408 6,038,887 29,342,776 29,342,776 2,077,202 2,094,247 (2,653,491) (2,601,732)
			37,901,692 37,885,002

(b) Net Fair Value of Financial Assets and Liabilities

The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities of the economic entity approximate their carrying value.

(c) Liquidity Risk

Refer to Note 27(a) for a maturity analysis of financial assets and liabilities. All floating interest rate balances and all non-interest bearing balances are current and due within 12 months.

(d) Sensitivity Analysis

The interest rates on outstanding Commercial Bank Bills have been fixed. The Group believes it has minimal exposure to interest rate risk.

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

27. FINANCIAL INSTRUMENTS (Continued)

(e) Foreign Currency Risk

Refer Note 21 for a breakdown of revenue and assets by geographic location. Whilst the economic entity monitors its foreign exchange risk, it does not believe there is any material risk associated with its foreign exchange exposure.

(f) Price Risk

The economic entity believes it has minimal exposure to price risk as costs of major materials and components are set at the time of project tender.

28. SHARE BASED PAYMENTS

There were no share based payments in the year to 30 June 2011 (2010: Nil).

29. INVESTMENT IN CONTROLLED ENTITIES

29. INVESTMENT IN CONTROLLED ENTITIES
Name of Entity Country of Incorporation Class of Shares Equity Holdings 2011 2010 Syfon Systems Pty Ltd Australia Ordinary 100% 100% Syfon Systems Sdn Bhd Malaysia Ordinary 100% 100% Brockman Engineering Pty Ltd Australia Ordinary 100% 100% NuSource Water Pty Ltd Australia Ordinary 100% 100% Danum Engineering Pty Ltd Australia Ordinary 100% 100% National Engineering Pty Ltd Australia Ordinary 100% 100% TSF Engineering Pty Ltd Australia Ordinary 100% 100% TSF Maintenance Services Pty Ltd Australia Ordinary 100% 100% Syfon Systems Pte Ltd Singapore Ordinary 100% 100% EVZ Engineering Pty Ltd Australia Ordinary 100% 100% Cellular Beams Pty Ltd Australia Ordinary 100% 100% EVZ Energy Pty Ltd Australia Ordinary 70% -	Cost of Parent Entity’s Investment 2011 $ 2010 $ 3,700,650 3,700,650 34,504 34,504 - - - - - - - - - - - - - - - - - - - -
	3,735,154 3,735,154

EVZ Engineering Pty Ltd, NuSource Water Pty Ltd and Cellular Beams Pty Ltd did not trade during the year. EVZ Energy Pty Ltd commenced operations from 23 May 2011. There was limited trading from that date to 30 June 2011.

30. SUBSEQUENT EVENTS

There have not been any matters or circumstances, other than that referred to in the financial statements or notes thereto, that have arisen since the end of the financial year, that have significantly affected, or may significantly affect, the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in future financial years after this financial year.

31. CONSTRUCTION CONTRACTS

CONSTRUCTION CONTRACTS
	Economic	Entity
	2011	2010
	$	$
Aggregate amount of contract revenue recognised during the financial
year	63,517,052	52,495,517
Aggregate of contract costs incurred and profits recognised (including
losses recognised) to date on contracts in progress	71,873,250	50,590,237

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011
31. CONSTRUCTION CONTRACTS (Continued) Progress billings Amounts due from customers for contract work in progress Total receivable from customers for contract work in progress as included in Note 4 Retention receivables as included in Note 4	Economic Entity 2011 $ 2010 $ 68,329,431 (48,126,962)
	3,543,819 2,463,275
	10,263,036 9,860,960
	490,423 591,463

32 DEED OF CROSS GUARANTEE

During the financial year, a deed of cross guarantee between EVZ Ltd (Parent Entity) and TSF Engineering Pty Ltd, TSF Maintenance Services Pty Ltd, Brockman Engineering Pty Ltd, Danum Engineering Pty Ltd, National Engineering Pty Ltd, Syfon Systems Pty Ltd, NuSource Water Pty Ltd, Cellular Beams Pty Ltd and EVZ Engineering Pty Ltd (Group Entities) was enacted and relief was obtained from preparing financial statements for those Group Entities under ASIC Class Order 98/1418. Under the deed, EVZ Ltd and the Group Entities jointly guarantee to support the liabilities and obligations of the Group Entities. EVZ Ltd and the Group Entities are the only parties to the Deeds of Cross Guarantee and form the Closed Group. The following are the aggregate totals, for each category, relieved under the deed:

Financial information in relation to: (i) Statement of Comprehensive Income Profit before income tax Income tax expense Profit after income tax Profit attributable to members of the parent entity (ii) Retained Earnings Retained profits at the beginning of the year Profit after income tax Dividends provided for or paid Retained earnings at the end of the year (iii) Statement of Financial Position CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Financial assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Deferred tax asset Other receivables Financial assets Intangible assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS	Closed Group & Parties to Deed of Cross Guarantee 2011 $ 2010 $ 480,904 39,195 (153,231) (98,644)
	327,673 (59,449)
	327,673 (59,449)
	(9,368,944) (8,789,646) 327,673 (59,449) - (519,849)
	(9,041,271) (9,368,944)
	4,161,539 4,174,383 16,729,877 17,378,599 1,694,085 1,774,880 - 11,795
	22,585,501 23,339,657
	5,925,254 5,878,406 2,077,202 2,094,247 353,379 1,304,464 97,952 74,503 29,513,061 29,513,061
	37,966,848 38,864,681
	60,552,349 62,204,338

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011
32. DEED OF CROSS GUARANTEE (Continued) CURRENT LIABILITIES Trade and other payables Short-term borrowings TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term borrowings Long-term provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained earnings	Closed Group & Parties to Deed of Cross Guarantee 2011 $ 2010 $ 12,543,818 12,730,170 6,944,416 12,242,620
	19,488,234 24,972,790
	3,706,208 214,796 177,319 163,837
	3,883,527 378,633
	23,371,761 25,351,423
	37,180,588 36,852,915
	46,023,159 46,023,159 198,700 198,700 (9,041,271) (9,368,944)
	37,180,588 36,852,915

33. CHANGES IN ACCOUNTING POLICY

The AASB has issued new, revised and amended standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:

• AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or after 1 January 2013).

This Standard is applicable retrospectively and includes revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments. The Group has not yet determined any potential impact on the financial statements.

The key changes made to accounting requirements include:

• simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;

• simplifying the requirements for embedded derivatives;

• removing the tainting rules associated with held-to-maturity assets;

• removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;

• allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument;

• requiring financial assets to be reclassified where there is a change in an entity’s business model as they are initially classified based on: (a) the objective of the entity’s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows; and

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

33. CHANGES IN ACCOUNTING POLICY (Continued)

• requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss.

• AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011).

This Standard removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities and clarifies the definition of a “related party” to remove inconsistencies and simplify the structure of the Standard. No changes are expected to materially affect the Group.

• AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (applicable for annual reporting periods commencing on or after 1 July 2013).

AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of financial reporting requirements for those entities preparing general purpose financial statements:

• Tier 1: Australian Accounting Standards; and

• Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.

Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier 1, but contains significantly fewer disclosure requirements.

The following entities are required to apply Tier 1 reporting requirements (ie full IFRS):

• for-profit private sector entities that have public accountability; and

• the Australian Government and state, territory and local governments.

Since the Group is a for-profit private sector entity that has public accountability, it does not qualify for the reduced disclosure requirements for Tier 2 entities.

AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give effect to the reduced disclosure requirements for Tier 2 entities. It achieves this by specifying the disclosure paragraphs that a Tier 2 entity need not comply with as well as adding specific “RDR” disclosures.

• AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011).

This Standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. The Standard also amends AASB 8 to require entities to exercise judgment in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. The amendments are not expected to impact the Group.

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NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

33. CHANGES IN ACCOUNTING POLICY (Continued)

• AASB 2009–14: Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement [AASB Interpretation 14] (applicable for annual reporting periods commencing on or after 1 January 2011).

This Standard amends Interpretation 14 to address unintended consequences that can arise from the previous accounting requirements when an entity prepays future contributions into a defined benefit pension plan.

This Standard is not expected to impact the Group.

• AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable for annual reporting periods commencing on or after 1 January 2011).

This Standard details numerous non-urgent but necessary changes to Accounting Standards arising from the IASB’s annual improvements project. Key changes include:

• clarifying the application of AASB 108 prior to an entity’s first Australian-AccountingStandards financial statements;

• adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of the quantitative disclosures to better enable users to evaluate an entity’s exposure to risks arising from financial instruments;

• amending AASB 101 to the effect that disaggregation of changes in each component of equity arising from transactions recognised in other comprehensive income is required to be presented, but is permitted to be presented in the statement of changes in equity or in the notes;

• adding a number of examples to the list of events or transactions that require disclosure under AASB 134; and

• making sundry editorial amendments to various Standards and Interpretations.

This Standard is not expected to impact the Group.

• AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual reporting periods beginning on or after 1 January 2011).

This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. However, these editorial amendments have no major impact on the requirements of the respective amended pronouncements.

• AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] (applicable for annual reporting periods beginning on or after 1 July 2011).

This Standard adds and amends disclosure requirements about transfers of financial assets, especially those in respect of the nature of the financial assets involved and the risks associated with them. Accordingly, this Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting Standards, and AASB 7: Financial Instruments: Disclosures, establishing additional disclosure requirements in relation to transfers of financial assets.

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

33. CHANGES IN ACCOUNTING POLICY (Continued)

This Standard is not expected to impact the Group.

• AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applies to periods beginning on or after 1 January 2013).

This Standard makes amendments to a range of Australian Accounting Standards and Interpretations as a consequence of the issuance of AASB 9: Financial Instruments in December 2010. Accordingly, these amendments will only apply when the entity adopts AASB 9.

As noted above, the Group has not yet determined any potential impact on the financial statements from adopting AASB 9.

• AASB 2010–8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112] (applies to periods beginning on or after 1 January 2012).

This Standard makes amendments to AASB 112: Income Taxes.

The amendments brought in by this Standard introduce a more practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model under AASB 140: Investment Property.

Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects to recover an asset by using it or by selling it. The amendments introduce a presumption that an investment property is recovered entirely through sale. This presumption is rebutted if the investment property is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale.

The amendments brought in by this Standard also incorporate Interpretation 121 into AASB 112.

The amendments are not expected to impact the Group.

• AASB 2010–9: Amendments to Australian Accounting Standards – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters [AASB 1] (applies to periods beginning on or after 1 July 2011).

This Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting Standards.

The amendments brought in by this Standard provide relief for first-time adopters of Australian Accounting Standards from having to reconstruct transactions that occurred before their date of transition to Australian Accounting Standards.

Furthermore, the amendments brought in by this Standard also provide guidance for entities emerging from severe hyperinflation either to resume presenting Australian-AccountingStandards financial statements or to present Australian-Accounting-Standards financial statements for the first time.

This Standard is not expected to impact the Group.

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

33. CHANGES IN ACCOUNTING POLICY (Continued)

• AASB 2010–10: Further Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters [AASB 2009–11 & AASB 2010–7] (applies to periods beginning on or after 1 January 2013).

This Standard makes amendments to AASB 2009–11: Amendments to Australian Accounting Standards arising from AASB 9, and AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).

The amendments brought in by this Standard ultimately affect AASB 1: First-time Adoption of Australian Accounting Standards and provide relief for first-time adopters from having to reconstruct transactions that occurred before their transition date.

[The amendments to AASB 2009–11 will only affect early adopters of AASB 2009–11 (and AASB 9: Financial Instruments that was issued in December 2009) as it has been superseded by AASB 2010–7.]

This Standard is not expected to impact the Group.

The Group does not anticipate the early adoption of any of the above Australian Accounting Standards.

34. PARENT ENTITY DISCLOSURES

Information relating to the Parent Entity, EVZ Limited, is as follows:

(i) Financial Position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Issued capital Accumulated losses Reserves Total equity (ii) Financial Performance Comprehensive income Profit for the year Other comprehensive income Total comprehensive income	Parent Entity 2011 $ 2010 $ 945,962 1,680,542 39,208,800 40,326,911
	40,154,762 42,007,453
	6,410,823 11,826,891 3,500,000 762
	9,910,823 11,827,653
	46,023,159 46,023,159 (15,977,920) (16,042,059) 198,700 198,700
	30,243,939 30,179,800
	64,139 1,601,116 - -
	64,139 1,601,116

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EVZ LIMITED

NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2011

34. PARENT COMPANY DISCLOSURES (Continued)

(iii) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

A deed of cross guarantee between EVZ Ltd (Parent Entity) and TSF Engineering Pty Ltd, TSF Maintenance Services Pty Ltd, Brockman Engineering Pty Ltd, Danum Engineering Pty Ltd, National Engineering Pty Ltd, Syfon Systems Pty Ltd, NuSource Water Pty Ltd, Cellular Beams Pty Ltd and EVZ Engineering Pty Ltd (Group Entities) is enacted and relief was obtained from preparing financial statements for those Group Entities under ASIC Class Order 98/1418. Under the deed, EVZ Ltd and the Group Entities jointly guarantee to support the liabilities and obligations of the Group Entities. EVZ Ltd and the Group Entities are the only parties to the Deeds of Cross Guarantee and form the Closed Group.

There are no contingent liabilities of the Parent Entity or commitments for the acquisition of property, plant and equipment by the Parent Entity.

35. COMPANY DETAILS

The registered office and principal place of business of EVZ Limited is

15 Clifford Street, Huntingdale, 3166

The principal place of business of Syfon Systems Pty Ltd is 22 Hargreaves St, Huntingdale, 3166

The principal place of business of TSF Engineering Pty Ltd is 1 Prosperity Pde, Warriewood, 2102

The principal place of business of Brockman Engineering Pty Ltd/ Danum Engineering Pty Ltd is 340 Forest Rd, Corio, 3214

The principal place of business of TSF Maintenance Services Pty Ltd is 1 Prosperity Pde, Warriewood, 2102

The principal place of business of National Engineering Pty Ltd is 288 Boorowa St, Young, 2594

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EVZ LIMITED

DIRECTORS’ DECLARATION

The Directors of EVZ Limited declare that:

• (a) 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;

• (b) the financial statements are in compliance with International Financial Reporting Standards, as stated in Note 1 to the financial statements;

• (c) in the Directors’ opinion, the financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; and

• (d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee.

In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order applies, as detailed in Note 32 to the financial statements will, as a group, be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.

SIGNED in accordance with a resolution of the Board of Directors made pursuant to s.295(5) of the Corporations Act 2001.

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………………………… Director – M Findlay

Signed at Melbourne this 23[rd] day of September 2011.

Page 59

Partnership Audit & Assurance Services

Level 7, 114 William Street Melbourne Vic 3000 Australia GPO Box 2266 Melbourne Vic 3001 Australia

ABN 47 075 804 075

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EVZ LIMITED

T +61 3 9274 0600 F +61 3 9274 0736 audit@melb.bentleys.com.au bentleys.com.au

Report on the Financial Report

We have audited the accompanying financial report of EVZ Limited and its controlled entities, which comprises the consolidated statement of financial position as at 30 June 2011 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards . Auditor’s Responsibility .

Auditor’s Responsibility

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

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

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

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A member of Bentleys, an association of independent accounting firms in Australia. The member firms of the Bentleys association are affiliated only and not in partnership. Liability limited by a scheme approved under Professional Standards Legislation

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EVZ LIMITED (Continued)

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of EVZ Limited on 23 September 2011, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

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

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and

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

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 7 to 10 of the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of EVZ Limited for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001.

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BENTLEYS MELBOURNE PARTNERSHIP GORDON ROBERTSON CHARTERED ACCOUNTANTS PARTNER

Dated in Melbourne on this 23[rd] day of September 2011

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EVZ LIMITED

ADDITIONAL SHAREHOLDER INFORMATION AS AT 31 AUGUST 2011

1. Substantial Shareholders UBS Nominees Pty Ltd

15,603,089 Ordinary Shares

2. Distribution of Shareholding Range of Holding

No. of Shareholders Ordinary Shares

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

302 592 331 814 211 2,250

Number of shareholders with less than a marketable parcel of $500 at $0.05 unit

1,121

Names of the 20 largest shareholders 1. UBS Nominees Pty Ltd 2. Cameron Richard Pty Ltd (Superannuation Fund A/c) 3. Smithley Super Pty Ltd (Smith Super Fund A/c) 4. Airlie Beach Holdings Pty Limited (Burns Family A/c) 5. BA & LE Amarant Pty Ltd (BA & LE Amarant P/L S/F A/c) 6. McKern Superannuation Fund Pty Ltd (McKern S/F A/c) 7. Powis Enterprises Pty Ltd (Powis Super Fund A/c) 8. Bell Potter Nominees Ltd (BB NomineesA/c) 9. Linwierik Super Pty Ltd (Linton Super Fund A/c) 10. CJ Arms Superannuation Fund Pty Ltd (CJ Arms Super Fund A/c) 11. Mr Adam Bernard Bellgrove (Ingodwi Family A/c) 12. Powis Enterprises Pty Ltd (Powis Family A/c) 13. Lost Ark Nominees Pty Ltd (MYA Super A/c) 14. BT Portfolio Services Limited (Juchima Super Fund A/c) 15. HSBC Custody Nominees (Australia) Limited 16. Lost Ark Nominees Pty Ltd (ONMBPSF A/c) 17. Pegmont Mines Limited 18. DIP Holdings Pty Ltd 19. NLA Investments Pty Ltd (N & L Allen Family A/c) 20. Mr James John Ischia & Mrs Kathlyn Dawn Ischia (Ischia Family Super Fund A/c)

Shares held % Holding 15,603,089 7.52 6,863,412 3.31 5,200,000 2.51 5,000,000 2.41 5,000,000 2.41 4,963,993 2.39 4,942,365 2.38 4,900,000 2.36 4,582,247 2.21 4,570,178 2.20 4,400,000 2.12 3,627,635 1.75 3,500,000 1.69 3,285,654 1.58 2,722,317 1.31 2,712,581 1.31 2,618,000 1.26 2,600,000 1.25 2,576,853 1.24 2,260,000 1.09

91,928,324 44.32

3. Names of the 20 largest shareholders

4. Voting Rights

A registered holder of shares in the Company may attend general meetings of the Company in person or by proxy and on a poll may exercise one vote for each share held. There are no voting rights attached to options for ordinary shares until the options have been exercised.

5. Unlisted Options

There are no unlisted options on issue.

6. General

The name of the Company Secretary is Ian Wallace.

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EVZ LIMITED

ADDITIONAL SHAREHOLDER INFORMATION AS AT 31 AUGUST 2011 (Continued)

6. General (Continued)

The address of the principal registered office is: 15 Clifford Street, Huntingdale, Victoria, 3166 Telephone Number: (03) 9545 5288 Facsimile Number: (03) 9558 9944 Email: corporate@evz.com.au

A register of securities is kept at: Computershare Investor Services Pty Ltd 452 Johnston Street Abbotsford, Victoria, 3067. Telephone Number: 1300 137 328

7. Stock Exchange Listing

The Company’s ordinary securities are listed on the Australian Securities Exchange Limited.

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