LARK DISTILLING CO. LTD — Annual Report 2012

Aug 30, 2012

MONTEC INTERNATIONAL LIMITED ABN 62 104 600 544 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2012

1. Details of the reporting period

Reporting period	Previous corresponding period
30 June2012	30 June2011

2. Results for announcement to the market

	Key Information	Current period $	Previous corresponding period $	Change %	Amount change $
2.1	Revenuesfromordinary activities	124,008	138,191	(10)	(14,183)
2.2	Loss from ordinary activities after taxattributable tomember	(123,555)	(329,476)	(62)	(205,921)
2.3	The total comprehensive loss for the period attributable tomember	(144,139)	(312,334)	(54)	(168,195)

2.4 Dividends/Distributions

No dividends declared in current or prior year.

• 2.5 Record date for determining entitlements to dividends N/A.

• 2.6 Refer point 14 below for explanation of figures in 2.1 to 2.3 above

3. Statement of Comprehensive Income

Refer attached summary financial statements.

4. Statement of Financial Position

Refer attached summary financial statements.

5. Statement of Cash Flows

Refer attached summary financial statements.

6. Details of dividends or distributions

N/A

7. Details of dividend reinvestment plan

N/A

8. Statement of Retained Earnings

Refer attached summary financial statements.

9. Net tangible assets per security

Net tangible assets per ordinary share

2012 2011 $(0.00025) $(0.00013)

MONTEC INTERNATIONAL LIMITED ABN 62 104 600 544 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2012

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

N/A

11. Details of associates and joint venture entities

N/A

12. Other significant information

Refer point 14 below .

13. Accounting standards used by foreign entities

N/A

14. Commentary on results and explanatory information

The loss of the Group for the financial year after providing for income tax amounted to $123,555 (2011: $329,476).

On 29 July 2011 the Company entered into a Convertible Note Agreement with Malachite Resources Limited (ASX: MAR) which would have provided the Company and shareholders a commercial return and the opportunity for the Company to investigate potential opportunities that may exist to acquire one or more projects currently owned by MAR. Subsequently, the Convertible Note Agreement was terminated on the basis that the Company was unable to obtain the required regulatory approvals to proceed with the subscription of convertible notes in MAR.

Review of Operations

i. China business

During the year the Group maintained Chinese operations to the level of minimum presence, and the management continues to investigate other product opportunities, both within and outside the dairy category.

ii. Australian royalties

Royalties from licenses held in Australia have fallen $33,855 (28%) to $86,348 in 2012 (2011: $120,203).

Financial Position

The net assets of the Group have decreased by $144,139 from 30 June 2011 to net liabilities of $90,919 in 2012. This decrease is largely due to the following factors:

 Operating expenses incurred during the year;

• Reduced Dairy Farmer license fees; partially offset by

MONTEC INTERNATIONAL LIMITED ABN 62 104 600 544 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2012

 Proceeds from convertible notes arrangement of $200,000. The Group’s working capital, being current assets less current liabilities, has decreased from net current liabilities of $46,924 in 2011 to net current liabilities of $90,919 in 2012.

15. Audit

The report is based on accounts which are in the process of being audited.

Montec International Limited ABN 104 600 544

MONTEC INTERNATIONAL LIMITED

ACN 104 600 544

CONSOLIDATED ENTITY

SUMMARY FINANCIAL STATEMENT

FOR THE YEAR ENDED 30 JUNE 2012

Montec International Limited ABN 104 600 544

TABLE OF CONTENTS

Statement of Comprehensive Income	1
Statement of Financial Position	2
Statements of Changes in Equity	3
Statement of Cash Flow	3
Notes to the Summary Financial Statements	4

Montec International Limited ABN 104 600 544

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2012

Note Revenue Raw materials sold/used Compliance and professional fees Advertising and marketing expenses Employee benefits expenses Administrative expenses Travel expenses Insurance expenses Depreciation and amortisation expense Impairment of PPE Reversal of prior year impairment Finance costs Reversal of prior year accruals Loss before income tax Income tax expense Loss for the year Other comprehensive income Exchange differences on translating foreign operations Other comprehensive income for the period, net of tax Total comprehensive income for the period Loss for the period attributable to members of the parent entity Total comprehensive income for the period attributable to members of the parent entity Basic and diluted earnings per share (cents per share) 1	Consolidated Group 2012 2011 $ $ 124,008 138,191 - (9,213) (131,928) (145,660) - (818) - (267,902) (19,217) (49,678) (3,631) (9,755) (23,291) (25,120) (100,144) (67,452) - (7,069) - 115,000 (48,962) - 79,610 -
	(123,555) (329,476) - -
	(123,555) (329,476)
	(20,584) 17,142
	(20,584) 17,142
	(144,139) (312,334)
	(123,555) (329,476)
	(144,139) (312,334)
	(0.0004) (0.001)

The Summary Financial Statements should be read in conjunction with the accompanying notes.

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Montec International Limited ABN 104 600 544

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Financial assets Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Financial assets Intangible assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short-term provisions Financial liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Financial liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET (LIABILITIES)/ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	Consolidated Group 2012 2011 $ $ 203,627 130,529 49,675 31,137 350,000 - 3,915 4,639
	607,217 166,305
	- 350,000 - 100,144
	- 450,144
	607,217 616,449
	131,943 163,163 16,193 50,066 550,000 -
	698,136 213,229
	- 350,000
	- 350,000
	698,136 563,229
	(90,919) 53,220
	20,200,910 20,200,910 63,847 155,622 (20,355,676) (20,303,312)
	(90,919) 53,220

The Summary Financial Statements should be read in conjunction with the accompanying notes.

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Montec International Limited ABN 104 600 544

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2012

Consolidated Group Balance at 1 July 2010 Total comprehensive income for the period Shares issued during the year Employee options lapsed Balance at 30 June 2011 Total comprehensive income for the period FX arising from translating Balance at 30 June 2012	Reserves Issued Capital $ Accumulated Losses $ Share Options $ Foreign Exchange $ Total $ 20,131,221 (20,515,002) 541,166 138,480 295,865 - (329,476) - 17,142 (312,334) 69,689 - - - 69,689 - 541,166 (541,166) - -
	20,200,910 (20,303,312) - 155,622 53,220 - (123,555) - (20,584) (144,139) - 71,191 - (71,191) -
	20,200,910 (20,355,676) - 63,847 (90,919)

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2012

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Loan to other entities Net cash provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from borrowings Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at start of year Cash and cash equivalents at end of year	Consolidated Group 2012 2011 $ $ 102,599 136,588 (233,416) (487,144) 3,915 6,458
	(126,902) (344,098)
	- -
	- -
	- 69,689 200,000 -
	200,000 69,689
	73,098 (274,409) 130,529 404,938
	203,627 130,529

The Summary Financial Statements should be read in conjunction with the accompanying notes.

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Montec International Limited ABN 104 600 544

NOTES TO THE SUMMARY FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: EARNINGS PER SHARE

a. Reconciliation of earnings to net loss Net loss Earnings used in the calculation of basic and diluted EPS b. Applying AASB 133: Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS Weighted average number of options outstanding not treated as dilutive Weighted average number of ordinary shares outstanding during the year used in calculation of dilutive EPS	(123,555) (329,476)
	(123,555) (329,476)
	356,188,438 326,276,247 - - 356,188,438 326,276,247

(i) As options exercise prices are in excess of the average market price for ordinary shares and the Company has made a loss during the year, they are considered anti-dilutive.

NOTE 2: SEGMENT REPORTING

Identification of reportable segments

Montec International Limited 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 has only one line of business, that being the sale and marketing of monounsaturated dairy technology and products in Australia and China. Operating segments are therefore determined on the same basis.

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 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.

Inter segment transactions

Segment revenues, expenses and results include transfers between segments. The prices charged on inter-segment transactions are the same as those charged for similar goods to parties outside of the consolidated group at an arm’s length. These transfers are eliminated on consolidation.

Segment assets

Assets include all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and property, plant and equipment, net of allowances and accumulated depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis.

Segment liabilities

Liabilities consist principally of accounts payable, employee entitlements, accrued expenses, provisions and borrowings.

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Montec International Limited ABN 104 600 544

NOTES TO THE SUMMARY FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2012

NOTE 2: SEGMENT REPORTING (CONTINUED)

2012 REVENUE External sales Total sales revenue Total revenue SEGMENT RESULT Expenses Loss before income tax expense Income tax expense Loss after income tax expense ASSETS Segment assets Total assets LIABILITIES Segment liabilities Total liabilities OTHER Depreciation and amortisation of segment assets OTHER NON-CASH SEGMENT INCOME Reversal of accruals OTHER NON-CASH SEGMENT EXPENSES Impairment of loan in subsidiary	Australia China Eliminations Consolidated Group $ $ $ $ 124,008 79,610 - 203,618	Australia China Eliminations Consolidated Group $ $ $ $ 124,008 79,610 - 203,618
	124,008 79,610 -	203,618
	(315,681) (11,492) -	203,618 (327,173)
	604,746 2,471 -	(123,555) -
		(123,555)
		607,217
	604,746 2,471 -	607,217
	655,108 395,731 (352,703) 698,136
	655,108 395,731 (352,703) 698,136
	100,144 - - 100,144 - 79,610 - 79,610 10,209 - (10,209) -

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Montec International Limited ABN 104 600 544

NOTES TO THE SUMMARY FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2012

NOTE 2: SEGMENT REPORTING (CONTINUED)

2011 REVENUE External sales Total sales revenue Total revenue SEGMENT RESULT Expenses Loss before income tax expense Income tax expense Loss after income tax expense ASSETS Segment assets Total assets LIABILITIES Segment liabilities Total liabilities OTHER Depreciation and amortisation of segment assets OTHER NON-CASH SEGMENT INCOME Reversal of impairment of patents and acquired rights OTHER NON-CASH SEGMENT EXPENSES Impairment of loan in subsidiary	Australia China Eliminations Consolidated Group $ $ $ $ 132,162 6,029 - 138,191	Australia China Eliminations Consolidated Group $ $ $ $ 132,162 6,029 - 138,191
	132,162 6,029 -	138,191
	(233,163) (234,504) -	138,191 (467,667)
	(329,476) - (329,476) 565,266 297,057 (245,874) 616,449	(329,476) -
		(329,476)
	565,266 297,057 (245,874) 616,449
	461,448 347,655 (245,874) 563,229
	461,448 347,655 (245,874) 563,229
	49,730 17,722 - 67,452 (115,000) - - (115,000) 10,083 - (10,083) -

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Montec International Limited ABN 104 600 544

NOTES TO THE SUMMARY FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2012

NOTE 3: EVENTS SUBSEQUENT TO REPORTING DATE

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

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