EVZ LIMITED — Annual Report 2013

Aug 26, 2013

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27 August 2013, Melbourne : EVZ Limited (ASX: EVZ) has delivered its Preliminary Final Results for the year ending 30 June 2013. In summary the Group’s results were:

RESULTS FOR ANNOUNCEMENT TO THE MARKET

RESULTS SUMMARY FY2013 FY2012 Change $ $ $ Revenue from continuing activities 57,202,336 62,561,655 (5,359,319) Profit (loss) from continuing activities before tax & impairment 741,675 (1,227,331) 1,969,006 Profit (loss) from continuing activities before tax 741,675 (9,127,331) 9,869,006 Net profit (loss) for the period 889,768 (14,149,900) 15,039,668 Other key data $ $ % EBITDA 3,162,195 851,207 271% EBIT 2,415,412 56,407 4182% Earnings per share 0.43c (6.8c) -

No dividend has been declared or paid in the year ending 30 June 2013.

The FY2013 results show a significant improvement in performance derived from stronger operational management of each subsidiary business in conjunction with the introduction of our clean energy strategy. Lower revenues resulted from rationalisation in non-strategic sectors resulting in improved earnings.

Specific highlights of the results are:

• EBITDA increase of 271% on FY2102 to $3,162,195

• EBIT increase of 4182% on FY2012 to $2,415,412

• Growth in total work in hand of 42% on FY2012 to $52.1M.

Introduction of our clean energy strategy during the period has led to new project opportunities for the Group in the manufacturing and building sectors. Our clean energy generation offering allows large electricity consumers to gain substantial operating, financial and environmental benefits. Increasing demand for clean, cost effective, reliable and environmentally sensitive power generation options is evident confirming our strategic investment and future growth prospects in the sector.

Improved operational management and focused strategic business development has provided gains in a competitive marketplace that are expected to continue in future years.

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SEGMENT PERFORMANCE	Revenue	EBITDA	EBIT	Margin
	$’000	$’000	$’000	%
Engineering	26,633	2,345	1,918	7.2%
Water	17,194	1,718	1,530	8.9%
Energy	13,375	(99)	(224)	(1.7%)
Corporate	-	(802)	(809)	-
Consolidated	57,202	3,162	2,415	4.2%

Syfon Systems has continued to build strength in the water sector, rapidly gaining market share in the domestic market whilst building a stronger and more geographically diverse business in Asia. Our strategic focus on the higher margin mega-projects sector in Asia is delivering strong results that are expected to increase further as our geographic expansion plan is executed.

The engineering sector, primarily through Brockman Engineering, met competitive local market conditions during the year. Our ongoing performance continues to be underpinned by long term operations and maintenance contracts accounting for more than one third of our annual revenue. Recently commenced new management is providing strategic leadership in the business that will specifically focus on expanding our geographic project reach and capability that will derive profitable growth.

TSF Engineering has commenced delivery of the Melbourne Airport Tri-generation Plant that will provide clean energy to Melbourne’s international gateway from 2015. The project is a component in the transformation to the clean energy generation sector that is expected to grow as the environmental and financial benefits of co-generation and tri-generation to the Australian manufacturing and large scale building sector become more widely recognised.

Despite an improvement in earnings, EVZ has been unable to satisfy two of our three bank covenants at year’s end. The Commonwealth Bank has accepted our performance against these covenant positions and have not changed our facility arrangements in consideration of forecast future earnings.

EVZ is now in a stable trading pattern after some periods of rationalisation, providing the cornerstones to further value added growth in each of the market segments. Commenting on the full year results, CEO Scott Farthing stated: “ I am pleased with the outcomes for the full year; we have made significant progress in delivering this result. Our management is advancing the clean energy strategy delivering an improved operational performance setting a strong base for growth in coming years.”

Additional financial information is provided in the enclosed Appendix 4E: Preliminary Final Report.

About EVZ Limited: EVZ Limited (ASX: EVZ) is an industrial group with a portfolio of specialist businesses operating in the energy services and engineering services sectors. The company’s operations currently encompass the following businesses: TSF Engineering - Clean Energy Power Generation, Brockman Engineering - Industrial Tanks & Piping, Syfon Systems - Environmental Water Drainage Systems. These businesses have strong positions in their respective markets with developing growth opportunities.

For further information contact Scott Farthing, CEO +613 9545 5288

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2013

Revenue Cost of sales Gross profit Other income Administration costs Business development costs Corporate costs Impairment of intangibles Results from operating activities Net finance costs Profit /(Loss) before income tax from continuing operations Income tax (expense)/benefit Profit/(Loss) from continuing operations Loss from discontinued operations after tax Net Profit/(Loss) for year Net Profit/(Loss) attributable to: Members of the parent entity Non-controlling interest Earnings per Share: Overall operations Basic earnings per share Diluted earnings per share Continuing operations Basic earnings per share Diluted earnings per share Discontinued operations Basic earnings per share Diluted earnings per share	Economic Entity 2013 $ 2012 $ 57,202,336 62,561,655 (45,067,324) (50,443,540)
	12,135,012 12,118,115 90,981 77,197 (7,561,673) (9,393,577) (1,459,145) (1,208,270) (1,233,751) - (1,789,224) (7,900,000)
	1,971,424 (8,095,759) (1,229,749) (1,031,572)
	741,675 (9,127,331) 148,093 318,215
	889,768 - (8,809,116) (5,340,784)
	889,768 (14,149,900)
	889,768 (14,077,481) - (72,419)
	889,768 (14,149,900)
	Cents per share Cents per share 0.43 (6.8) 0.43 (6.8) 0.43 (4.24) 0.43 (4.24) - (2.57) - (2.57)

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013

Profit/(Loss) for the year Other comprehensive income: Exchange differences arising on translation of foreign operations Non-controlling interest Total comprehensive income/(loss) for the year attributable to owners of the company Total comprehensive income/(loss) attributable to: Members of the parent entity Non-controlling interest	Economic Entity 2013 $ 889,768 2012 $ (14,149,900) 135,026 (4,421) 72,419 -
	1,097,213 (14,154,321)
	1,097,213 (14,081,902) - (72,419)
	1,097,213 (14,154,321)

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Financial assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Plant and equipment Deferred tax assets Intangible assets Financial assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Tax liabilities Short-term borrowings TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term borrowings Deferred tax liabilities Other payables TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses PARENT INTEREST Non-controlling interest TOTAL EQUITY	Economic Entity 2013 $ 2012 $ 2,607,853 4,303,530 15,424,497 11,551,418 1,703,463 1,892,032 82,851 -
	19,818,664 17,746,980
	387,796 430,220 5,586,374 6,273,610 3,404,715 3,187,157 19,989,290 19,989,290 27,604 114,554
	29,395,779 29,994,831
	49,214,443 47,741,811
	12,268,452 8,743,638 29,391 - 10,258,306 4,439,843
	22,556,149 13,183,481
	1,676,188 9,608,139 49,588 19,838 55,934 1,182,982
	1,781,710 10,810,959
	24,337,859 23,994,440
	24,876,584 23,747,371
	46,055,159 46,023,159 (40,933) 22,741 (21,137,642) (22,226,110)
	24,876,584 23,819,790 - (72,419)
	24,876,584 23,747,371

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013

30 June 2013 Balance at 1 July 2012 Total comprehensive income for year Profit for year Transfer from capital reserve Non-controlling interest Foreign currency translation reserve Total comprehensive income for year Transactions with owners, recorded directly in equity Shares Issued Dividends Balance at 30 June 2013 30 June 2012 Balance at 1 July 2011 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 2012	Issued Capital $ Accumulated Losses $ Capital Reserves $ Foreign Currency Translation Reserve $ Sub-Total $ Non- Controlling Interests $ Total $ 46,023,159 (22,226,110) 198,700 (175,959) 23,819,790 (72,419) 23,747,371
	- 889,768 - - 889,768 - 889,768 - 198,700 (198,700) - - - - - - - - - 72,419 72,419 - - - 135,026 135,026 - 135,026
	- 1,088,468 (198,700) 135,026 1,024,794 72,419 1,097,213
	32,000 - - - 32,000 - 32,000 - - - - - - -
	46,055,159 (21,137,642) - (40,933) 24,876,584 - 24,876,584
	46,023,159 (8,148,629) 198,700 (171,538) 37,901,692 - 37,901,692
	- (14,077,481) - - (14,077,481) (72,419) (14,149,900) - - - (4,421) (4,421) - (4,421)
	- (14,077,481) - (4,421) (14,081,902) (72,419) (14,154,321)
	- - - - - - - - - - - - - -
	46,023,159 (22,226,110) 198,700 (175,959) 23,819,790 (72,419) 23,747,371

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013

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/(USED) BY OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of plant and equipment Purchase of plant and equipment Proceeds from disposal of controlled entity NET CASH FLOWS (USED) BY INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from bank loans Repayment of bank loans Proceeds from lease financing Payments for lease financing Proceeds from other loans NET CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES NET DECREASE IN CASH HELD Cash at beginning of financial year CASH AT END OF FINANCIAL YEAR	Economic Entity 2013 $ 2012 $ 58,409,897 85,649,506 (56,906,095) (85,593,828) (33,813) (52,359) 68,726 108,256 (1,298,475) (1,261,740)
	240,240 (1,150,165)
	24,800 37,923 (749,994) (2,185,066) 196,075 -
	(529,119) (2,147,143)
	- 2,500,000 (1,000,000) (1,812,500) 148,637 508,080 (146,195) (195,944) - 325,000
	(997,558) 1,324,636
	(1,286,437) (1,972,672) 1,479,195 3,451,867
	192,758 1,479,195

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

BASIS OF PREPARATION OF PRELIMINARY FINANCIAL STATEMENTS

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

The accounting policies applied in this preliminary report are consistent with applicable accounting standards.

PROFIT/(LOSS) FROM CONTINUING ACTIVITIES

(a) OTHER INCOME Sundry income (b) EXPENSES Movement in employee benefits Bad debts Impairment – receivables Total employee costs Foreign exchange losses Losses on sale of plant and equipment Operating lease payments Depreciation of plant and equipment (c) NET FINANCE COSTS Finance costs Interest income		Economic Entity 2013 $ 2012 $ 90,981 77,197 90,981 77,197
		138,083 (102,040) 14,516 74,414 (190,704) 123,067 28,637,645 30,467,828 27,725 18,441 28,653 6,818 849,031 1,050,817 746,783 794,800
		1,298,475 1,137,540 (68,726) (105,968)
		1,229,749 1,031,572

DISCONTINUED OPERATIONS

In the prior year, the company divested itself of the National Engineering business located in Young, NSW.

The financial performance of the discontinued operation for the prior period, which is included in the loss from discontinued operations per the Statement of Comprehensive Income, is as follows:

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

DISCONTINUED OPERATIONS (Continued)

Revenue Other income Expenses Net finance costs Net loss from discontinued operations before tax Income tax benefit Loss from discontinued operations INCOME TAX	Economic Entity 2013 $ 2012 $ - 10,507,278 - 51,625 - (16,543,042)
	- - (5,984,139) (121,912)
	- (6,106,051) - 765,267
	- (5,340,784)

(a) The prima facie tax on profit from continuing activities before income tax is reconciled to income tax as follows: Profit/(Loss) before income tax Income tax calculated at 30% (2012: 30%) Tax effect of permanent differences Under provision/(over provision) in prior years Taxation expense - offshore subsidiary Income tax expense/(benefit) 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	741,675 (9,127,331)
	222,503 (2,738,199) (445,338) 2,369,881 5,277 26,064 69,465 24,039
	(148,093) (318,215)
	(20%) (3.5%)
	(148,977) (221,040) (4,393) (123,239) 5,277 26,064
	(148,093) (318,215)

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

ISSUED CAPITAL Issued and paid up 208,439,414 ordinary shares (2012: 207,939,414 ordinary shares) (a) Issued and fully paid up ordinary shares Opening balance Shares issued Conversion of employee shares Closing balance – 30 June 2013 Opening balance Shares issued Conversion of employee shares Closing balance – 30 June 2013 (b) Fully paid employee shares Opening balance Conversion of employee shares Closing balance – 30 June 2013 Opening balance Conversion of employee shares Closing balance – 30 June 2013	Economic Entity 2013 $ 2012 $ 46,055,159 46,023,159
	46,055,159 46,023,159
	46,023,159 45,757,195 32,000 - - 265,964
	46,055,159 46,023,159
	2013 No. 2012 No. 207,939,414 207,420,868 500,000 - - 518,546
	208,439,414 207,939,414
	2013 $ 2012 $ - 265,964 - (265,964)
	- -
	2013 No. 2012 No. - 518,546 - (518,546)
	- -

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

EARNINGS PER SHARE Weighted average number of ordinary shares outstanding during the year used in calculation of Basic and Diluted Earnings per Share INTANGIBLE ASSETS Goodwill on consolidation Less impairment Goodwill on acquisition Less written off Less impairment	2013 No. 2012 No. 208,125,715 207,939,414
	2013 $ 2012 $ 3,282,532 3,282,532 - -
	3,282,532 3,282,532
	24,606,758 27,513,731 - (2,906,973)
	24,606,758 (7,900,000) 24,606,758 (7,900,000)
	16,706,758 16,706,758
	19,989,290 19,989,290

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

		Economic	Entity
		2013	2012
		$	$
STATEMENT OF CASH FLOWS
(i)	Cash balances comprise:
	Cash on hand	2,607,853	4,303,530
	Bank overdraft	(2,415,095)	(2,824,335)
	Closing cash balance	192,758	1,479,195
(ii)	Reconciliation of the operating profit/(loss) after tax to net cash
	flows from operations:
	Operating profit/(loss) after tax	889,768	(14,149,900)
	(Gain)/loss on sale of plant and equipment	28,653	882,102
	Gain on disposal of controlled entity	(72,419)	-
	Depreciation - plant & equipment	746,783	1,020,403
	Foreign currency translation	98,061	(3,985)
	Impairment - receivables	(190,704)	265,026
	Impairment - inventories	-	(70,000)
	Impairment - goodwill	-	9,353,486
	Employee share issue	32,000	-
	Changes in assets and liabilities adjusted for effects of
	acquisition/disposal of operations during financial year
	Increase/(Decrease) in provisions for employee entitlements	138,083	(555,176)
	(Increase)/Decrease in inventories	188,569	33,768
	(Increase)/Decrease in trade and other receivables	(4,073,443)	5,624,647
	(Increase)/Decrease in deferred tax assets	(217,558)	(1,109,955)
	Increase/(Decrease) in trade and other payables	2,613,306	(2,442,351)
	Increase/(Decrease) in tax liabilities	59,141	1,770
	Net cash provided/(used) by operating activities	240,240	(1,150,165)
(iii)	Discontinued Operations
	In the prior year, the net cash flows of the discontinued operation, which have been		incorporated
	into the statement of cash flows, are as follows:
	Net cash inflow/(outflow) from operating activities	-	(849,235)
	Net cash inflow/(outflow) from investing activities	-	(9,285)
	Net cash inflow/(outflow) from financing activities	-	1,613,067
	Net cash increase/(decrease) in cash generated by the discontinued operation	-	754,547

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

SEGMENT REPORTING CONTINUING OPERATIONS:

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.

Operating segments are managed primarily on the basis of product category and service offerings.

Executive management monitors segment performance based on EBIT.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted:

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

Inter-segment transactions:

All such transactions are eliminated on consolidation for the Group’s financial statements.

– Segment Reporting Continuing Operations

Engineering Energy Water Corporate 30 June 2013 $ $ $ $ REVENUE External sales 26,633,305 13,375,459 17,193,572 - Inter-segment sales - - - - Total segment revenue 26,633,305 13,375,459 17,193,572 - Reconciliation of segment revenue to group revenue Inter-segment elimination Total group revenue Segment net profit/(loss) before interest and tax 1,918,559 (224,231) 1,472,506 (1,195,410) Reconciliation of segment result to group net profit before tax Unallocated items Net finance costs Net profit/(loss) before tax from continuing operations	Engineering Energy Water Corporate $ $ $ $ 26,633,305 13,375,459 17,193,572 - - - - -	Total $ 57,202,336 -
	26,633,305 13,375,459 17,193,572 -	57,202,336 -
		57,202,336
		1,971,424 1,229,749
		741,675

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013
Engineering Energy Water Corporate 30 June 2012 $ $ $ $ REVENUE External sales 36,533,424 10,726,797 15,301,434 - Inter-segment sales - - - - Total segment revenue 36,533,424 10,726,797 15,301,434 - Reconciliation of segment revenue to group revenue Inter-segment elimination Total group revenue Segment net profit/(loss) before interest and tax 1,511,026 (9,013,905) 1,193,082 (1,785,962) Reconciliation of segment result to group net profit before tax Unallocated items Net finance costs Net profit/(loss) before tax from continuing operations The segment net profit/(loss) before tax for the Energy segment includes a provision for of goodwill of $7,900,000. Secondary Reporting– including Discontinued Operations 30 June 2013 ASSETS Segment assets 21,268,725 13,497,438 11,752,186 31,289,712 Reconciliation of segment assets to group assets Inter-segment eliminations Total group assets Segment asset increases for the period Capital expenditure 119,516 256,505 351,125 22,848 119,516 256,505 351,125 22,848 30 June 2013 LIABILITIES Segment liabilities 24,992,766 18,864,376 3,836,241 9,408,959	Engineering Energy Water Corporate $ $ $ $ 36,533,424 10,726,797 15,301,434 - - - - -	Total $ 62,561,655 -
	36,533,424 10,726,797 15,301,434 -	62,561,655 -
		62,561,655
		(8,095,759) (1,031,572)
		(9,127,331)
		the impairment 77,808,061 (28,593,618)
30 June 2013 ASSETS Segment assets Reconciliation of segment assets to group assets Inter-segment eliminations Total group assets Segment asset increases for the period Capital expenditure 30 June 2013 LIABILITIES Segment liabilities
	119,516 256,505 351,125 22,848
		49,214,443
		749,994
	119,516 256,505 351,125 22,848	749,994
	24,992,766 18,864,376 3,836,241 9,408,959	57,102,342

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

Reconciliation of segment liabilities to group liabilities Inter-segment eliminations Total group liabilities 30 June 2012 ASSETS Segment assets Reconciliation of segment assets to group assets Inter-segment eliminations Total group assets Segment asset increases for the period Capital expenditure 30 June 2012 LIABILITIES Segment liabilities Reconciliation of segment liabilities to group liabilities Inter-segment eliminations Total group liabilities	Engineering Energy Water Corporate $ $ $ $ 21,410,896 13,125,686 10,785,407 40,421,708	Total $ (32,764,483)
		24,337,859
		85,743,697 (38,001,886)
	322,538 1,427,350 435,178 -
		47,741,811
		2,185,066
	322,538 1,427,350 435,178 -	2,185,066
	26,368,868 18,780,395 3,414,901 11,185,403	59,749,567 (35,755,127)
		23,994,440

REVENUE BY GEOGRAPHICAL REGION

Revenue, including revenue from discontinued operations, attributable to external customers is disclosed below, based on the location of the external customer:

Australia Asia Total revenue	Economic Entity 2013 $ 2012 $ 52,846,013 70,686,075 4,356,323 2,382,858
	57,202,336 73,068,933

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EVZ Limited Appendix 4E Preliminary final report Year ended 30 June 2013

ASSETS BY GEOGRAPHICAL REGION

The location of segment assets by geographical location of the assets is disclosed below:

Australia Asia Total assets	2013 $ 2012 $ 45,409,095 44,745,917 3,805,348 2,995,894
	49,214,443 47,741,811

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 the financial year.

ADDITIONAL INFORMATION

Reporting period

The applicable reporting period is 1 July 2012 to 30 June 2013. The previous corresponding reporting period was 1 July 2011 to 30 June 2012.

	2013	2012
Net tangible assets
Net tangible assets per ordinary share	2.3 cents	1.8 cents
Details of entities over which control has been gained or lost
during the period
Name of entity	EVZ Energy Pty	Ltd
Control gained/lost	31 October 2012
Contribution of entity to reporting entity’s from ordinary activities during
the period	$72,419
Loss of entity during the whole of the previous corresponding year	($72,419)
Dividends and Distributions
Date on which each dividend or distribution is payable
Amount per security of foreign sourced dividend or distribution	Not applicable
Details of dividend or distribution reinvestment plans	Not applicable
Material interests in entities which are not controlled entities	Not applicable
Compliance Statement – the accounts are in the process of being	audited

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