MAGONTEC LIMITED — Interim / Quarterly Report 2016

May 24, 2016

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Suite 1.03, Level 1 46 Macleay St Potts Point NSW 2011 Australia Ph: +61 2 8005 4109 Fax: +61 2 9252 8960

25 May 2016 Company Announcements Office Australian Stock Exchange Limited 20 Bridge Street Sydney, NSW, 2000

Dear Sirs,

Magontec Limited Amendment to Financial Accounts – Quarter Ended 31 March 2016

In the course of reviewing the group financial accounts for the 4 months to 30 April 2016 we have found it necessary to make an adjustment to the Company’s financial results for the quarter ended 31 March 2016 as reported to the ASX on 29 April 2016.

Pre Adjustment Adjustment Post Adjustment Net Profit After Tax $’000 $571 ($487) $83

The adjustment is wholly due to a decrease in unrealised foreign exchange gains. Net assets at 31 March 2016 were overstated by the same amount.

• Attachment 1 is a re-presentation of the Comprehensive Income Statement for the quarter ended 31 March 2016.

• Attachment 2 is a re-presentation of the Balance Sheet at 31 March 2016.

Because the reduction in NPAT arises from a reduction in unrealised foreign exchange gains, there is no change to the Company’s cash flow statements for the quarter. Similarly, there is no diminution in the Company’s underlying operating performance (ie profit/(loss) after tax excluding unrealised Foreign Exchange Effects).

The review of the accounts for the 4 months to 30 April 2016 has also revealed a write back to profit of a provision of $151,073 being an excess of a prior impairment of the fixed assets at the Suzhou plant. This reflects in “Other Income” for the 4 months to 30 April 2016.

The effect of this item is reflected in the unaudited management accounts for the 4 months to 30 April 2016 shown in Appendices 1 and 2.

Yours Sincerely

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John Talbot Company Secretary

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Appendix 1

Unaudited Consolidated Income Statement of Profit & Loss	Unaudited Consolidated Income Statement of Profit & Loss	Unaudited Consolidated Income Statement of Profit & Loss	Previously Reported	Previously Reported
Source: Magontec Limited Management Accounts			29 April 2016			Restated
			3	months to		3 months to	4 months to
$000				31-Mar-16	Adjustment	31-Mar-16	30-Apr-16
Sale of goods				31,375	-	31,375	40,507
Cost of sales				(27,611)	-	(27,611)	(35,559)
Gross profit				3,764	-	3,764	4,948
Other income				127	-	127	377
Interest expense				(298)	-	(298)	(420)
Impairment of inventory, receivables & other financial assets				-	-	-	-
Travel accommodation and meals				(171)	-	(171)	(241)
Research, development, licensing and patent costs				(85)	-	(85)	(113)
Promotional activity				(12)	-	(12)	(30)
Information technology				(89)	-	(89)	(112)
Personnel				(1,610)	-	(1,610)	(2,125)
Depreciation & Amortisation				(125)	-	(125)	(165)
Office expenses				(62)	-	(62)	(156)
Corporate				(815)	-	(815)	(1,031)
Foreign exchange gain/(loss)		(1)		281	(487)	(206)	(363)
Other Operating Expenses				(256)	-	(256)	(218)
Profit/(Loss) before tax				649	(487)	162	351
Income tax (expense)/benefit				(78)	-	(78)	(85)
Profit/(Loss) after tax				571	(487)	83	266
Profit/(Loss) after tax excluding unrealised Foreign Exchange Effects				264	-	264	686
Note 1
Foreign exchange gain/(loss)				281		(206)	(363)
	Realised			(26)		(26)	58
	Unrealised			307		(181)	(421)

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Appendix 2

Unaudited Consolidated Balance Sheet	Previously Reported
Source: Magontec Limited Management Accounts	29 April 2016		Restated
	3 months to		As at	As at
$000	31-Mar-16	Adjustment	31-Mar-16	30-Apr-16
Cash & cash equivalents	5,494	-	5,494	8,774
Trade & other receivables	23,781	(598)	23,183	20,487
Inventory	26,630	-	26,630	27,426
Other	552	-	552	456
Total Current Assets	56,456	(598)	55,858	57,143
Property, plant & equipment	19,679	-	19,679	19,828
Intangible assets	2,987	-	2,987	2,974
Deferred tax assets	1,569	-	1,569	1,581
Other	1,063	-	1,063	1,073
Total Non Current Assets	25,297	-	25,297	25,456
Total Assets	81,753	(598)	81,155	82,599
Trade & other payables	14,835	(111)	14,724	14,971
Bank borrowings	21,209	-	21,209	21,989
Provisions	730	-	730	565
Total Current Liabilities	36,775	(111)	36,664	37,525
Other payables	151	-	151	153
Bank borrowings	-	-	-	-
Provisions	9,925	-	9,925	10,086
Total Non Current Liabilities	10,075	-	10,075	10,238
Total Liabilities	46,850	(111)	46,739	47,763
Net Assets	34,904	(487)	34,416	34,835
Equity attributable to members of MGL
Share capital	58,433	-	58,433	58,433
Reserves	4,790	-	4,790	5,027
Accumulated (losses)/profits	(28,782)	(487)	(29,270)	(29,088)
Share capital	463	-	463	463
Reserves	-	-	-	-
Accumulated (losses)/profits	-	-	-	-
Total equity	34,904	(487)	34,416	34,835