LASERBOND LIMITED — Interim / Quarterly Report 2012

Aug 30, 2012

Appendix 4E / Preliminary Financial Report

LaserBond Limited ABN 24 057 636 692

For year ended 30[th] June 2012 All comparisons to year ending 30[th] June 2011

Contents	Page
Appendix 4E	2
Preliminary Statement of Comprehensive Income	5
Preliminary Statement of Financial Position	6
Preliminary Statement of Cash Flows	7
Preliminary Statement of Changes in Equity	8
Notes to the Preliminary Financial Statements	9

LaserBond Ltd 2012 Preliminary Financial Report

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Results	Year To 30th June		Year To 30th June
	2012		2011
Revenues from continuing operations	$14,386,311	Up 8%from	$13,276,604
Net Profit from Ordinary Operating Activities
after Tax Attributable to Members	$1,119,439	Down 16%from	$1,338,114
Net Profit Attributable to Members	$1,119,439	Down 16%from	$1,338,114
Earnings per Share	1.50	Down 20%from	1.88c

Dividend Information

Dividends Amount Per Share (cents)	Total Franked Amount	Record Date	Payment Date
Interim 0.3 Final 0.2	$222,140 100% $169,452 100% $391,592	23 March 12 28 September 12	5 April 12 12 October 12

Since year end the Board has considered the company’s needs for cash to fund growth and resolved to continue the same level of total dividends as last year with the payment of a final dividend of 0.2 cents per share, fully franked based on tax paid at 30%. As the Board resolution regarding dividends was made after 30 June 2012, the dividend will be paid from retained earnings but is not recognised as a liability in the financial statements at year end.

Dividend Reinvestment Plans

During the period LaserBond Limited had a Dividend Reinvestment Plan (DRP) in operation. Under the DRP shareholders may elect to have dividends on some or all of their ordinary shares automatically reinvested in additional LaserBond shares, at a discount to the market price. Full details of the operation of the DRP are contained in the Terms and Conditions available on the LaserBond website: www.laserbond.com.au.

The Board has resolved to offer the DRP for the 2012 Final Dividend. The discount applied to determine the Market Price in accordance with the DRP Terms and Conditions will be 5%.

In order to participate in the DRP for this dividend, shareholders that have not already done so must return a completed DRP Application Form to arrive at the share registry (Boardroom Pty Ltd) by 28 September 2012. The form will be mailed shortly to all shareholders that have not already submitted a completed form. The form is also available on our website: www.laserbond.com.au. Shareholders that have already returned the form need not complete another, unless a change in the level of participation is being requested.

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LaserBond Ltd 2012 Preliminary Financial Report

Brief Explanation of Results:

In the 2011 Annual report the company stated that 2012 would be a year of cash flow funded investment and continued organic growth. The company has invested in a number of growth initiatives, including the opportunistic purchase of the assets of C&B Engineering, new equipment, lease of additional premises and the recent strengthening of the sales teams in each state (see below).

Continued organic growth has been demonstrated by the increase in revenue in the face of difficult market conditions.

Whilst the investments have increased the fixed costs of the business, they position the company well for continuing growth into 2013 and beyond. On 9 May 2012, LaserBond provided guidance that EBIT would be between $1.5 and $1.7m. At $1.67m, the actual EBIT was towards the upper end of this range.

The growth of the company over the last 2 years combined with the goal of continuing high rates of growth has required a company restructuring of the sales team. The restructure essentially doubles the consolidated sales team and incorporates the following staff:

• National Sales Manager

• Sales Engineers x 3

• Estimators x 3

The company continues to develop and market applications for its technologies and recent investment in equipment, facilities and human resources provides the expanding capacity to allow ongoing organic growth.

Our clients and the industry sectors we deal with continue to be focused on services that will provide them increased efficiencies through increased production, reduced down-time and lower costs. With the doubling of the consolidated sales team, LaserBond has the ability to present the value of our technologies and techniques to more clients and industry sectors.

From discussions with most of our customers over the past few months, revenue growth is expected to continue to be strong.

Further, with the recent installation of thermal spraying capabilities in Queensland, focus will continue on growing the advanced surface engineering capabilities throughout Central Queensland. As these applications are adopted by Queensland customers, gross margins will continue to improve to be more in line with the NSW division margins.

2. Preliminary Statement of Comprehensive Income

Refer to page 5 and accompanying notes from page 9 of this report.

3. Preliminary Statement of Financial Position

Refer to page 6 and accompanying notes from page 9 of this report.

4. Preliminary Statement of Cash Flows

Refer to page 7 and accompanying notes from page 9 of this report.

5. Preliminary Statement of Retained Earnings

Refer to page 8 and accompanying notes from page 9 of this report.

6. Net Tangible Assets per Ordinary Share (NTA Backing)

As at June 2012 As at June 2011 $0.122 $0.047

Note: As at 30[th ] June 2012 total number of shares issued were 84,059,543 compared to 72,099,638 as at 30[th] June, 2011.

7. Details of Subsidiaries

During the period from 1[st] July 2011 to 30[th] June 2012, LaserBond Limited has not gained or lost control over any entities

8. Details of Associates and Joint Venture Entities

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LaserBond Ltd 2012 Preliminary Financial Report

During the period from 1[st] July 2011 to 30[th] June 2012, LaserBond Limited has no interest in any Associates or Joint Venture Activities

9. Accounting Standards

Australian Accounting Standards, including Australian equivalents to International Financial Reporting Standards (AIFRS) have been used in compiling the information contained in this Appendix 4E.

10. Audit Disputes or Qualifications

This report is based on accounts which have not yet been audited. Please refer to Note 1 of the Financial Report on Page 9 for details.

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LaserBond Ltd 2012 Preliminary Financial Report

Preliminary Statement of Comprehensive Income for the Year Ended 30[th] June 2012

					2012	2011
			Note
					$	$
	Revenue		2		14,386,311	13,276,604
	Cost of Sales				(7,856,176)	(7,098,985)
	Gross Profit				6,530,135	6,177,619
					264,797
	Other Income		3			207,851
	Advertising & Promotional Expenses				(28,548)	(63,447)
	Depreciation & Amortisation				(363,183)	(158,995)
	Employment Expenses				(1,751,145)	(1,595,069)
	Property Rental & Rates Expenses				(857,042)	(640,225)
	Administration Expenses				(1,346,194)	(1,160,624)
	R&D Expenditure				(424)	(15,310)
	Repairs & Maintenance Expenses				(199,153)	(93,499)
	Finance Lease Expenses				(417,770)	(471,931)
	Borrowing Costs				(136,537)	(97,182)
	Other Expenses				(102,910)	(46,656)
	Profit before income tax expense		4		1,592,026	2,042,532
	Income tax expense		5		(472,587)	(704,418)
	Profit after tax from continuing				1,119,439	1,338,114
	operations
	Total comprehensive income attributable to				1,119,439	516,730
	members of LaserBond Limited
	Earnings per share (cents)		6		1.50 1.32	1.88
	Diluted earnings per share (cents)		6			1.86

These Preliminary Financial Statements should be read in conjunction with the accompanying notes.

LaserBond Ltd 2012 Preliminary Financial Report

Preliminary Statement of Financial Position As at 30[th] June 2012

							2012				2011
			Note
							$				$
	CURRENT ASSETS
	Cash and cash equivalents		7				2,782,949				982,639
	Trade and other receivables		8, 21				3,614,430				3,282,835
	Inventories		9				1,770,561				1,546,127
	Total current assets						8,167,940				5,811,601
	NON-CURRENT ASSETS
	Property, plant and equipment		10				1,804,590				651,574
	Deferred tax assets		13				237,174				250,787
	Investment in subsidiary		12				-				-
	Intangible assets		11, 12				3,611,014				3,610,973
	Other non-current assets						500				14,900
	Total non-current assets						5,653,278				4,528,234
	TOTAL ASSETS						13,821,218				10,339,835
	CURRENT LIABILITIES
	Trade and other payables		14				1,407,579				1,507,124
	Provisions		16				506,842				815,066
	Interest-bearing liabilities		15, 19				424,651				87,469
	Current tax liabilities		18				158,885				409,473
	Total current liabilities						2,497,957				2,819,132
	NON-CURRENT LIABILITIES
	Interest-bearing liabilities		15, 19				987,470				451,527
	Provisions		16				98,265				75,331
	Other non-current liabilities		17				12,500				12,500
	Total non-current liabilities						1,098,235				539,358
	TOTAL LIABILITIES						3,596,192				3,358,490
	NET ASSETS						10,225,026				6,981,345
	EQUITY
	Issued capital		19				5,410,011				3,062,907
	Retained earnings						4,815,015				3,918,438
	TOTAL EQUITY						10,225,026				6,981,345

These Preliminary Financial Statements should be read in conjunction with the accompanying notes.

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LaserBond Ltd 2012 Preliminary Financial Report

Statement of Cash Flows	Statement of Cash Flows
for the Year Ended 30th June 2012
		2012
			2011
Note
		$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		14,359,172	12,568,156
Payments to suppliers and employees		(13,147,119)	(10,904,203)
Interest paid		(136,537)	(97,182)
Interest received		56,198	17,256
Income taxespaid		(458,974)	(686,120)
Net cash inflow from operating activities	25	672,740	897,907
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment		(1,517,064)	(119,531)
Proceeds from sale of plant and equipment		10,489	-
Tranche 2 Payment for acquisition of subsidiary		-	(150,000)
Net cash inflow/(outflow) from investing activities		(1,506,575)	(269,531)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of Shares		1,909,690	-
Payments to lessors		1,013,124	(67,243)
Loans to Subsidiaries		-	-
Dividendspaid		(288,669)	-
Net cash inflow/(outflow) from financing activities		2,634,145	(67,243)
NET INCREASE/(DECREASE) IN CASH HELD		1,800,310	561,133
Net cash at beginning of period		982,639	421,506
NET CASH AT END OF PERIOD 7		2,782,949	982,639

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These Preliminary Financial Statements should be read in conjunction with the accompanying notes.

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LaserBond Ltd 2012 Preliminary Financial Report

Statement of Changes in Equity For the Year Ended 30[th] June 2012

					Retained		Total equity
			Issued capital		earnings
			$		$		$
	Opening Balance at 30th June 2010		3,001,655		2,940,822		5,942,477
	Profit for the Period				1,338,114		1,338,114
	Issue of Share Capital		103,400				103,400
	Deferred Tax Adjustment – Capitalisation of costs incurred						(42,148)
			(42,148)
	for IPO
							(360,498)
					(360,498)
	Dividends paid during period
	Closing Balance at 30th June 2011		3,062,907		3,918,438		6,981,345
					1,119,439 (222,862)		1,119,439 2,347,104 (222,862)
	Profit for the Period
			2,347,104
	Issue of Share Capital
	Dividends Paid during period
	Closing Balance at 30th June 2012		5,410,011		4,815,015		10,225,026

These Preliminary Financial Statements should be read in conjunction with the accompanying notes.

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LaserBond Ltd 2012 Preliminary Financial Report

NOTES TO THE PRELIMINARY CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

NOTE 1: PRELIMINARY FINANCIAL REPORT SUBJECT TO AUDIT COMPLETION

This preliminary financial report for LaserBond Ltd for the year ended 30 June 2012 is provided subject to audit completion. The audit will require finalisation of the impairment test for the goodwill on the company’s statement of financial position. The auditors have requested supporting information prior to finalising the audit for year ended June 2012.

The final financial report will be issued prior to the 30 September 2012.

. NOTE 2: REVENUE From continuing operations Sales Revenue Sales of Goods NOTE 3: OTHER INCOME Interest Revenue Other	2012 2011 $ $ 14,386,311 13,276,604
	56,198 17,256 208,599 190,595
	264,797 207,851

Consolidated Other Income includes $151,750 Rental Income for the sub-letting of premises at George Mamalis Place, Gladstone. The lease for the subletting expires August 2012.

NOTE 4: EXPENSES

Profit before Income Tax includes the following specific expenses

Borrowing Costs: Interest Paid Depreciation & Amortisation - Plant & Equipment - Fixtures & Fittings - Office Equipment - R&D Equipment - Motor Vehicles - Leasehold Improvements - Intangible Assets Rental Expenses relating to Operating Leases - Minimum Lease Payments Auditors Remuneration a) Robert Nielson Partners - Audit Services – audit and review of Financial Reports - Non-Audit Services – Due Diligence and Non-Audit advice Auditors Remuneration a) Non-Robert Nielson Partners Audit Firms - Audit Services – independent review of Financial Reports - Non-Audit Services – Due Diligence and Non-Audit advice	136,537 97,182
	308,491 101,519 502 767 11,146 14,680 751 1,224 30,018 23,617 8,930 13,896 3,343 3,292
	363,183 158,995 417,770 471,931
	41,085 75,617 - -
	41,085 75,617 2,800 - 2,050 7,342
	4,850 7,342

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LaserBond Ltd 2012 Preliminary Financial Report

NOTE 5: INCOME TAX

Reconciliation of Income Tax Expense Profit before Income Tax expense Prima Facie Tax at the Australian tax rate of 30% (2011: 30%) Less Deferred Tax Asset adjustments for Employee Entitlements and Expense Provisions Less Adjustment to Prior Year Income Tax Provisions Total Income Tax Expense: NOTE 6: EARNINGS PER SHARE Basic earnings per share (cents) Diluted earnings per share (cents)	2012 2011 $ $ 1,592,026 2,042,532
	477,608 612,760 (5,804) (10,867) 783 102,525
	472,587 704,418 2012 2011 1.50 1.88 1.32 1.86

Performance options issued to directors pursuant to the Prospectus expired 30[th] August 2012. There are no current options to affect diluted earnings per share.

(a) Weighted Average Shares on Issue Opening Balance as at 1stJuly 2011 Shares issued as at 29thSeptember 2011 Shares issued as at 21stOctober 2011 Shares issued as at 13thDecember 2011 Shares issued as at 24thJanuary 2012 Shares issued as at 9thFebruary 2012 Shares issued as at 29thFebruary 2012 Shares issued as at 22ndMay 2012 Shares issued as at 5thApril 2012 Shares issued as at 28thJune 2012 Closing Balance as at 30thJune 2011 NOTE 7: CASH AND CASH EQUIVALENTS Cash on Hand Cash at Bank NOTE 8: TRADE AND OTHER RECEIVABLES Trade Receivables Loans – Key Management Personnel Loans – Employees Loans - Subsidiaries Other Receivables	No. of Shares Weighted No. 72,099,638 72,099,638 144,443 108,827 1,164,446 807,137 104,764 57,405 200,000 86,575 333,333 129,680 266,667 89,133 9,100,000 972,329 512,919 120,852 133,333 731 84,059,543 74,472,306
	2012 2011 $ $ 1,200 1,200 2,781,748 981,439
	2,782,949 982,639
	3,235,743 3,010,375 50,174 60,500 5,899 6,801 - - 322,614 205,159
	3,614,430 3,282,835

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LaserBond Ltd 2012 Preliminary Financial Report

The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties.

The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.

Gross Amount Past due and impaired $000 $000 2012 Trade and term receivables 3,236 - Other receivables 378 - 3,614 - 2011 Trade and term receivables 3,026 16 Other receivables 272 - 3,298 16 NOTE 9: INVENTORIES Stock on Hand – Raw Materials Stock on Hand – Finished Goods Work in Progress NOTE 10: PROPERTY, PLANT & EQUIPMENT Plant & Equipment, Office Equipment, etc At Cost Less Accumulated Depreciation Motor Vehicles At Cost Less Accumulated Depreciation Research & Development Equipment At Cost Less Accumulated Depreciation TOTAL PLANT & EQUIPMENT	Gross Amount Past due and impaired $000 $000 3,236 - 378 -	Past due but not impaired (days overdue) <30 31-60 61-90 >90 Within initial trade terms $000 $000 $000 $00 0 $000 1,477 1,233 508 18 2,710 378 - - - 378
	3,614 -	1,855 1,233 508 18 3,088
	3,026 16 272 -	859 359 12 6 1,218 270 - - 2 270
	3,298 16	1,129 359 12 8 1,488
		2012 2011 $ $ 635,757 527,124 638,786 521,302 496,018 497,701
		1,770,561 1,546,127
		2,829,140 1,459,263 (1,175,608) (853,203)
		1,653,532 606,060
		281,118 147,804 (131,356) (104,337)
		149,762 43,467
		24,027 24,027 (22,731) (21,980)
		1,296 2,047
		1,804,590 651,574

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LaserBond Ltd 2012 Preliminary Financial Report

(a) Movements in Carrying Amounts Plant & Equipment, Office Equipment, etc Motor Vehicles Research & Development Equipment Total 2012 Financial Year $ $ $ $ Balance at the beginning of the year 606,060 43,467 2,047 651,574 Additions 1,380,366 136,314 - 1,516,680 Sales of Asset (10,489) - - (10,489) Depreciation Expense (322,406) (30,018) (751) (353,175) Carrying Amount at the end of the year 1,653,531 149,763 1,296 1,804,590 2011 Financial Year $ $ $ $ Balance at the beginning of the year 829,434 60,211 3,271 892,916 Additions 113,057 6,873 - 119,930 Re-classification of asset (205,570) - - (205,570) Depreciation Expense (130,861) (23,617) (1,224) 155,702 Carrying Amount at the end of the year 606,060 43,467 2,047 651,574 NOTE 11: INTANGIBLES Goodwill Patents and Trademarks Other Intangible Assets Total $ $ $ $ 2012 Financial Year Balance at the beginning of the year 3,598,927 9,507 2,539 3,610,973 Additions - - 3,383 3,383 Disposals - - - - Amortisation Expense - (713) (2,629) (3,342) Net Book Amount at 30thJune 2012 3,598,927 8,794 3,293 3,611,014 2011 Financial Year $ $ $ $ Balance at the beginning of the year 3,448,927 10,278 5,061 3,464,266 Additions 150,000 - - 150,000 Disposals - - - - Amortisation Expense - (771) (2,522) (3,293) Net Book Amount at 30thJune 2011 3,598,927 9,507 2,539 3,610,973 NOTE 12: GOODWILL IN CONSIDERATION For the purchase of Peachey’s Engineering Pty Ltd, made up of the following: 2012 2011 Initial Purchase Costs made up of the following: $ $ Cash Payment 2,500,000 2,500,000 Scrip Payment – 3,333,334 shares 366,667 366,667 Broker Commission 55,000 55,000 Due Diligence and Audit / Review Costs 75,035 75,035 Miscellaneous Purchase Costs 4,812 4,812 3,001,514 3,001,514 Tranche Two 08-09 Earn Out costs made up of the following: Cash Payment 448,275 448,275 Scrip Payment – 1,610,010 shares 149,138 149,138 447,413 447,413 3,598,927 3,598,927		Plant & Equipment, Office Equipment, etc Motor Vehicles Research & Development Equipment Total $ $ $ $ 606,060 43,467 2,047 651,574 1,380,366 136,314 - 1,516,680 (10,489) - - (10,489) (322,406) (30,018) (751) (353,175)	Plant & Equipment, Office Equipment, etc Motor Vehicles Research & Development Equipment Total $ $ $ $ 606,060 43,467 2,047 651,574 1,380,366 136,314 - 1,516,680 (10,489) - - (10,489) (322,406) (30,018) (751) (353,175)
		1,653,531 149,763 1,296 1,804,590
		$ $ $ $ 829,434 60,211 3,271 892,916 113,057 6,873 - 119,930 (205,570) - - (205,570) (130,861) (23,617) (1,224) 155,702
		606,060 43,467 2,047 651,574
		Goodwill Patents and Trademarks Other Intangible Assets Total $ $ $ $ 3,598,927 9,507 2,539 3,610,973 - - 3,383 3,383 - - - - - (713) (2,629) (3,342)
		3,598,927 8,794 3,293 3,611,014
		$ $ $ $ 3,448,927 10,278 5,061 3,464,266 150,000 - - 150,000 - - - - - (771) (2,522) (3,293)
		3,598,927 9,507 2,539 3,610,973
			3,001,514 3,001,514 448,275 448,275 149,138 149,138
			447,413 447,413
			3,598,927 3,598,927

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LaserBond Ltd 2012 Preliminary Financial Report

a) As detailed in Note 1 to these financials on page 9, justification to the impairment test to 30 June 2012 is pending with the auditor.

NOTE 13: DEFERRED TAX ASSETS Deferred tax assets comprise temporary differences attributable to: Employee Benefits Expense Accruals Capitalised IPO Costs NOTE 14: TRADE AND OTHER PAYABLES Trade Payables Deferred Revenue – Re-tooling for Climate Change Grant BAS Statement (GST & PAYG Withheld) Payroll Tax Fringe Benefits Tax Superannuation Other Payables NOTE 15: BORROWINGS CURRENT Hire Purchase Liabilities Convertible Notes NON-CURRENT Hire Purchase Liabilities Convertible Notes	2012 2011 $ $ 181,431 161,924 55,743 46,715 - 42,148
	237,174 250,787
	841,073 841,626 - 156,769 471,360 308,644 8,131 15,044 1,750 360 119,402 85,813 85,265 98,868
	1,407,579 1,507,124
	324,651 87,469 100,000 -
	424,651 87,469 987,470 211,527 - 240,000
	987,470 451,527

In April 2010 unsecured convertible notes were issued with a face value of $350,000 to provide additional working capital for the group. The repayment date of the notes was 30 June 2012 convertible into ordinary fully paid shares at an issue price determined as the lesser of either 15 cents per share or the price that is 85% of the average market price of the company’s ordinary fully paid shares over the last 5 days on which sales were recorded before the date of conversion and issue.

As at 30[th] June 2012 all remaining Convertible Note holders, holding notes with a face value of $100,000, had provided the company with Conversion Notices to convert these notes to shares. Accordingly, 666,667 shares were issued on 6[th] July 2012, completing the conversion of all outstanding notes.

NOTE 16 : PROVISIONS CURRENT Employee Benefits Provision – Dividends Payable NON-CURRENT Employee Benefits	2012 2011 $ $ 499,222 454,568 7,620 360,498
	506,842 815,066
	98,265 75,331
	98,265 75,331

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LaserBond Ltd 2012 Preliminary Financial Report

The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave it covers all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. This entire amount is presented as current, since the group does not have an unconditional right to defer settlement for any of these obligations. However, based on past experiences, the group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months:

Leave obligations expected to be settled after 12 months NOTE 17: OTHER NON-CURRENT LIABILITIES Rental Bond	2012 2011 $ $ 112,845 161,294
	12,500 12,500

This rental bond is in relation to the sub-letting of premises at George Mamalis Place, Gladstone. This lease 2012 at which time it is expected for this bond to become payable. NOTE 18: STATUTORY LIABILITIES CURRENT Income Tax 158,885 NOTE 19: CONTRIBUTED EQUITY Issued and Paid Up Capital 5,410,011 Reconciliation of Issued and Paid Up Capital 72,099,638 Existing Shares 3,062,907 11,959,905 Issued Shares 2,389,252 Deferred Tax Asset from Capitalised IPO Costs (42,148) 5,410,011 (a) Ordinary Shares 2012 Reconciliation of Movement in Shares No. Issued Shares at beginning of Year 72,099,638 Shares Issued during Year 11,959,905 Issued Shares at end of year 84,059,543	This rental bond is in relation to the sub-letting of premises at George Mamalis Place, Gladstone. This lease 2012 at which time it is expected for this bond to become payable. NOTE 18: STATUTORY LIABILITIES CURRENT Income Tax 158,885 NOTE 19: CONTRIBUTED EQUITY Issued and Paid Up Capital 5,410,011 Reconciliation of Issued and Paid Up Capital 72,099,638 Existing Shares 3,062,907 11,959,905 Issued Shares 2,389,252 Deferred Tax Asset from Capitalised IPO Costs (42,148) 5,410,011 (a) Ordinary Shares 2012 Reconciliation of Movement in Shares No. Issued Shares at beginning of Year 72,099,638 Shares Issued during Year 11,959,905 Issued Shares at end of year 84,059,543	This rental bond is in relation to the sub-letting of premises at George Mamalis Place, Gladstone. This lease 2012 at which time it is expected for this bond to become payable. NOTE 18: STATUTORY LIABILITIES CURRENT Income Tax 158,885 NOTE 19: CONTRIBUTED EQUITY Issued and Paid Up Capital 5,410,011 Reconciliation of Issued and Paid Up Capital 72,099,638 Existing Shares 3,062,907 11,959,905 Issued Shares 2,389,252 Deferred Tax Asset from Capitalised IPO Costs (42,148) 5,410,011 (a) Ordinary Shares 2012 Reconciliation of Movement in Shares No. Issued Shares at beginning of Year 72,099,638 Shares Issued during Year 11,959,905 Issued Shares at end of year 84,059,543	expires August 409,473
		5,410,011	3,062,907
		3,062,907 2,389,252 (42,148)	3,001,655 103,400 (42,148)
		5,410,011	3,062,907
		2012 No. 72,099,638 11,959,905 84,059,543	2011 No. 71,043,734 1,055,904
			72,099,638

Ordinary shares entitle the holder to participate in dividends and the proceeds of winding up of the company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote and upon a poll each share is entitled to one vote.

(b) Capital Management

Management effectively manages the company’s capital by assessing the company’s financial risks and adjusting its financial structure in response to those risks. These responses include the management of debt levels and distributions to shareholders. The company has no borrowings and no externally imposed capital requirements.

NOTE 20 : CAPITAL AND LEASING COMMITMENTS

(a) Hire Purchase / Finance Lease Commitments Payable: Within one (1) year Later than one (1) year but not later than five (5) years Minimum Hire Purchase / Finance Lease payments:	2012 2011 $ $ 324,651 87,469 1,336,246 280,532
	1,660,897 368,001

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LaserBond Ltd 2012 Preliminary Financial Report

Less future finance charges Total Hire Purchase / Finance Lease Liability	2012 2011 $ $ (348,776) (69,005)
	1,312,121 298,996

The company’s Hire Purchase and Finance Lease commitments are in relation to Plant & Equipment and Motor Vehicles essential to the operations of the business. These are under agreements expiring within 1 to 5 years. Under the Terms of Agreements, the Company has the option to acquire the financed assets by payment of the final instalment. This option lapses in the event of a default to the agreed Terms and Conditions to the agreements.

(b) Operating Lease Commitments

Payable: Within one (1) year Later than one (1) year but not later than five (5) years (c) Property Lease The company has the following property leases: 28 York Road Ingleburn NSW 2565 10 Pembury Road, Minto NSW 2566 10 Blain Drive, Gladstone QLD 4680 5 George Mamalis Place, Gladstone QLD 4680 Payable: Within one (1) year Later than one (1) year but not later than five (5) years	608,004 864,922 860,145 1,034,164
	1,468,149 1,899,086
	Expiry Oct 2011 Jun 2012 Nov 2013 Feb 2014 375,417 508,333

The 28 York Road, Ingleburn premises Property Lease as noted expired October 2011. The current landlord has approved to remain on a month by month lease until October 2012.

The 10 Pembury Road, Minto premises Property Lease as noted expired December 2011. The current landlord has approved a month by month lease until LaserBond moves to it’s new premises.

NOTE 21: CONTINGENT LIABILITIES

The directors are not aware of any contingent liabilities that would have an effect on these financial statements.

NOTE 22: RELATED PARTY TRANSACTIONS

Transactions with related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Property Lease Rent Paid	2012 2011 $ $ - 121,187

Rental of Ingleburn head office premises was to Hooper Unit Trust, a director related entity and one month in advance. These premises have been sold by the Hooper Unit Trust to another non-related party. Therefore from 13 July 2011 there is no longer a Related Party Transaction related to Rent Paid.

Sale of Assets Plant & Equipment

10,489 -

The overhead cranes of 28 York Road, Ingleburn premises were sold to Hooper Unit Trust. The cranes were considered to be part of the building and of little value to LaserBond when it relocates to new premises. The value of the sale was the asset written down value at the time of the sale.

Labour Hire Direct Labour – Casual Shop Floor Staff 337,207 -

Basin Enterprises, a director related entity, provided casual shop floor staff. When staff performed and passed any probation periods, employment was transferred to LaserBond directly.

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Loans – Related Parties Director Loan Employee Loans Employee Personal Expenses	LaserBond Ltd 2012 Preliminary Financial Report 2012 2011 $ $ 50,174 60,500 5,899 6,801 7,760 2,433
	63,833 69,734

All Loans to Related Parties are classified current, unsecured and interest free.

The Director Loan is receivable from Mr Greg Hooper, a director of the company.

The Employee Loans are receivable from four (4) employees.

The Employee Personal Expenses are receivable from employee’s who have used, at the approval of director’s, a company’s supplier expense account for purchases of a personal use. These loans are repaid as an after tax deduction from the employees salary or wage.

NOTE 23: KEY MANAGEMENT PERSONNEL

Key management personnel are those persons who have authority and responsibility for planning, directing and controlling the activities of the company.

(a) Key Management Personnel

The key management personnel of the company for management of its affairs are Wayne Hooper and Greg Hooper, all current Executive Directors.

(b) Remuneration

Remuneration received or due and receivable by key management personnel of the company for management of its affairs is as follows:

2012 Financial Year Wayne Hooper Greg Hooper 2011 Financial Year Wayne Hooper Greg Hooper	Salaries and fees Superannuation Consulting Fees $ $ 100,086 44,487 - 251,186 - - -
	351,272 44,487 -
	105,761 27,267 - 199,127 2,700 - -
	304,888 29,967 -

(c) Options Held

The following performance options were issued to directors pursuant to the prospectus. These options expire 31[st] August 2012.

Wayne Hooper Greg Hooper Timothy McCauley (d) Shares Held Interest Wayne HooperDirect Wayne HooperIn-Direct Greg HooperDirect Greg HooperIn-Direct	Opening Balance as at 30th June 2011 Exercised Expired Closing Balance as at 30th June 2012 2,000,000 - - 2,000,000 2,000,000 - - 2,000,000 2,000,000 - - 2,000,000
	6,000,000 - - 6,000,000
	Shares Held as at 30th June 2011 Issued Purchased / (Sold) Shares Held as at 30th June 2012 7,728,395 381,196 - 8,109,591 763,028 38,108 60,000 861,136 4,611,175 227,442 - 4,838,617 3,388,889 167,154 - 3,556,043
	16,491,487 813,900 60,000 17,363,387

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LaserBond Ltd 2012 Preliminary Financial Report

NOTE 24: DIVIDENDS		2012	2011
		$	$
Declared fully franked interim ordinary dividend of 0.3 (2011: Nil) cents per share franked at the tax rate of 30% (2011: 30%)		222,862	-
Declared fully franked final ordinary dividend of Nil (2011: 0.5) cents per share franked at the tax rate of 30% (2011: 30%)		-	360,498
Balance of franking credits available for subsequent financial years based (2011: 30%)	on a tax rate of 30%	1,949,477	1,549,409
Total dividends per share for the period		0.3 cents	0.5 cents
a) Dividends not recognised during the reporting period
In addition to the above dividends, since year end the directors have recommended the payment
of a final dividend of 0.2 cents per fully-paid ordinary share (2011: 0.5), fully franked based on
tax paid at 30%. The aggregate amount of the proposed dividend expected	to be paid on 12
October 2012 out of retained earnings at 30 June 2012, but not recognised	as a liability at year
end is:		169,452	-
	2012	2011
NOTE 25: CASH FLOW INFORMATION	$		$
Reconciliation of profit after income tax to net cash flows from operating activities
Profit after Income Tax for the year	1,119,439		1,338,114
Non-cash flows in operating surplus
Depreciation & Amortisation	353,493		157,381
Changes in assets and liabilities
(Increase) / Decrease in trade debtors	(225,369)		(911,543)
(Increase) / Decrease in other debtors	(106,226)		(74,938)
(Increase) / Decrease in inventories	(224,435)		60,495
(Increase) / Decrease in deferred tax assets	13,613		18,298
(Increase) / Decrease in no-current provisions	14,400		(14,900)
Increase / (Decrease) in trade creditors and accruals / current provisions	(217,006)		256,930
Increase / (Decrease) in statutory liabilities	(59,806)		88,461
Increase / (Decrease) in non-current provisions	4,637		(15,914)
Net cash provided by operating activities	672,740		902,384

NOTE 26: FINANCIAL INSTRUMENTS

Financial Risk Management Policies

The Board of Directors monitors and manages financial risk exposures of the Group. The Board reviews the effectiveness of internal controls relating to counterparty credit risk, currency risk, financing risk and interest rate risk.

The overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while minimising potential adverse effects on financial performance, including the review of credit risk policies and future cash flow requirements.

Activities undertaken by the company may expose the company to price risk, credit risk, liquidity risk and cash flow interest rate risk. The company’s risk management policies and objectives are therefore reviewed to minimise the potential impacts of these risks on the results of the company.

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LaserBond Ltd 2012 Preliminary Financial Report

a) Interest rate risk

Weighted Average Effective Interest Rate % 30th June 2012 Financial Assets: Cash on Hand Cash at Bank 3.5 Trade and other receivables Total financial assets Financial Liabilities Trade and other payables Hire Purchase / Finance Lease 9.0 Total financial liabilities Weighted Average Effective Interest Rate % 30th June 2011 Financial Assets: Cash on Hand Cash at Bank 4.8 Trade and other receivables Total financial assets Financial Liabilities Trade and other payables Hire Purchase / Finance Lease 9.0 Total financial liabilities	Floating Interest Rate Fixed Interest Rate Non- Interest Bearing Total Within 1 Year 1 to 5 Years $ $ $ $ $ - - - 1,200 1,200 2,519,890 - - 261,859 2,781,749 - - - 3,614,430 3,614,430
	2,519,890 - - 3,877,489 6,397,379
	- - - 1,407,579 1,407,579 - 324,651 987,470 - 1,312,121
	- 324,651 987,470 1,407,579 2,719,700
	Floating Interest Rate Fixed Interest Rate Total Within 1 Year 1 to 5 Years $ $ $ $ $ - - - 1,200 1,200 717,008 - - 264,431 981,439 - - - 3,282,835 3,282,835
	717,008 - - 3,548,466 4,265,474
	- - - 1,507,124 1,507,124 - 87,469 211,527 - 298,996
	- 87,469 211,527 1,507,124 1,806,120

b) Credit Risk Exposure

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognize financial assets is the carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheet and notes to the financial statements.

c) Liquidity Risk

Liquidity risk is the risk that the company may encounter difficulties raising funds to meet commitments. The company manages this risk by monetary forecast cash flows.

d) Net fair value of financial assets and liabilities

The carrying amount of cash, cash equivalents and non-interest bearing monetary financial assets and liabilities (e.g. accounts receivable and payable) are at approximate net fair value.

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LaserBond Ltd 2012 Preliminary Financial Report

e) Price Risk

The company is not exposed to any material price risk.

f) Sensitivity Analysis

The company has performed a sensitivity analysis relating to its exposure to interest rate risk and foreign currency risk. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

Interest Rate Sensitivity Analysis

The company as 30[th] June 2012 held a quantity of cash on hand in an Interest Bearing bank account. The effect on profit and equity as a result of changes in the interest rate on Cash on Hand, with all other variables remaining constant would be as follows:

follows:
	2012	2011
	$	$
Change in profit
- Increase in interest rate by 1.4%	1,235	1,207
- Decrease in interest rate by 1.4%	(1,235)	(1,207)
Change in equity
- Increase in interest rate by 1.4%	1,235	1,207
- Decrease in interest rate by 1.4%	(1,235)	(1,207)

Foreign Currency Risk Sensitivity Analysis

The company purchases certain raw material from overseas due to non-availability in Australia or savings due to bulk buying power overseas. At 30[th] June 2012, the effect on profit and equity as a result of changes in the Australian Dollar to other International currencies, with all other variables remaining constant would be as follows:

	2012	2011
	$	$
Change in profit
- Improvement in AUD to International currencies by 15%	227	108,889
- Decline in AUD to International currencies by 15%	(227)	(108,889)
Change in equity
- Improvement in AUD to International currencies by 15%	227	108,889
- Decline in AUD to International currencies by 15%	(227)	(108,889)

NOTE 27: PARENT ENTITY FINANCIAL INFORMATION

a) Summary Financial Information

The individual financial statements for the parent entity shows the following aggregate amounts:

Balance Sheet Assets: Current Assets Total Assets Liabilities: Current Liabilities Total Liabilities Shareholders’ Equity Issued Capital Retained Earnings Profit before income tax expense Profit after tax from continuing operations Total comprehensive income attributable to members	2012 2011 $ $ 8,343,462 5,466,298 13,652,857 9,621,010 1,665,489 1,703,607 2,735,671 2,220,397 5,410,011 3,062,907 5,507,175 4,337,706
	10,917,186 7,400,613
	1,990,165 1,994,764
	1,392,332 1,395,817
	1,392,332 1,395,817

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LaserBond Ltd 2012 Preliminary Financial Report

b) Finance Facilities of the Parent Entity

The parent entity has given unsecured guarantees in respect of finance leases and hire purchase agreements:

(i) for the parent entity with a balance outstanding of $438,180 (2011: $1,224,144) (ii) for subsidiaries with a balance outstanding of $72,775. (2011: $187,585)

A liability has been recognized in relations to these liabilities as per Note 15 of this financial report.

The parent entity has given unsecured guarantees in respect of operating lease agreements:

(i) for the parent entity with a balance outstanding of $399,417 (2011: $180,486)

(ii) for subsidiaries with a balance outstanding of $307,209 (2011: $674,942)

The parent entity has given unsecured guarantees in respect of Rental Bonds for subsidiaries totalling $78,925

The parent entity has unsecured and unused finance facilities in place in respect of:

(i) Trade finance facility with unused limit of $470,000 (2011: $470,000). (ii) Bank Guarantee Line unused with limit of $200,000 (2011: $200,000).

NOTE 28: CONTROLLED ENTITIES

Subsidiaries of LaserBond Limited

	Country of	Percentage	Owned
	Incorporation
		2012	2011
Peachey’s Engineering Pty Ltd	Aust	100%	100%
Canedice Investments Pty Ltd	Aust	100%	100%
LaserBond (Qld) Pty Ltd	Aust	100%	100%

Note that Canedice Investments Pty Ltd and LaserBond (Qld) Pty Ltd are both non trading entities.

NOTE 29: MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

• c) Conversion of Convertible Notes

In April 2010 unsecured convertible notes were issued with a face value of $350,000 to provide additional working capital for the group. The repayment date of the notes was 30 June 2012 convertible into ordinary fully paid shares at an issue price determined as the lesser of either 15 cents per share or the price that is 85% of the average market price of the company’s ordinary fully paid shares over the last 5 days on which sales were recorded before the date of conversion and issue.

As at 30[th] June 2012 all remaining Convertible Note holders, holding notes with a face value of $100,000, had provided the company with Conversion Notices to convert these notes to shares. Accordingly, 666,667 shares were issued on 6[th] July 2012, completing the conversion of all outstanding notes.

NOTE 30: SEGMENT REPORTING

The company operates entirely within Australia.

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 geographic locations.

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LaserBond Ltd 2012 Preliminary Financial Report

	LaserBond Limited (Sydney, NSW)	LaserBond Limited (Sydney, NSW)		Peachey’s Engineering Pty Ltd (Gladstone, Qld)	Peachey’s Engineering Pty Ltd (Gladstone, Qld)		Consolidated	Consolidated
	2012	2011		2012	2011		2012	2011
Revenue	9,792,742	8,159,668		4,593,569	5,116,936		14,386,311	13,276,604
Profit Before Income Tax	1,990,165	1,994,764		(398,139)	47,768		1,592,026	2,042,532
Profit after IncomeTax	1,392,332	1,395,817		(272,893)	(60,703)		1,119,439	1,338,114
Assets	13,652,857	9,626,810		1,892,758	2,359,046		13,821,218	10,355,310
Liabilities	2,735,671	2,226,197		2,584,918	2,778,313		3,596,192	3,373,965

NOTE 31: COMPANY DETAILS

Registered Office and Principal Place of Business:

LaserBond Ltd

28 York Road INGLEBURN NSW 2565 Phone: 02 9829 3815 Fax: 02 9829 2417 www.laserbond.com.au

Subsidiaries:

Peachey’s Engineering Pty Ltd

Machine Shop

10 Blain Drive GLADSTONE QLD 4680 Phone: 07 4972 5422 Fax: 07 4972 5411

Fabrication Shop

5 George Mamalis Place GLADSTONE QLD 4680 Phone / Fax: 07 4972 7608

Share Registry:

Boardroom Pty Ltd

Level 7, 207 Kent Street SYDNEY NSW 2000 Phone: 1300 737 760 www.boardroomlimited.com.au

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