MAGONTEC LIMITED — Interim / Quarterly Report 2015

Jan 28, 2016

Suite 1.03, Level 1 46 Macleay St Potts Point NSW 2011 Australia Ph+61280054109 FAX: +61 2 9252 8960

29 January 2016

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

Dear Sirs,

Appendix 4C – Quarter Ended 31 December 2015

In this letter are –

• Attachment 1 – Unaudited Cash Flow Statement for the 12 months to 31 December 2015

• Attachment 2 – Appendix 4C cash flow report for the quarter ended 31 December 2015

Attachment 1 is presented in the format that appears in the Company’s half year and annual reports and prepared on a basis consistent with the requirements of accounting standards.

Attachment 2 is presented in the format required by Paragraph 4.7B of Chapter 4 of the ASX listing rules.

Rounding Errors

The tables in this report may indicate apparent errors to the extent of one unit (being $1,000) in -

• the addition of items comprising total and sub totals; and

• the comparative balances of items from the financial accounts.

• Such differences arise from the process of -

• converting foreign currency amounts to two decimal places in AUD; and

• subsequent rounding of the AUD amounts to one thousand dollars.

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Given that the Company’s annual report for the year ended 31 December 2015 will be released to the market on or prior to 29 February 2016, no supplementary accounting data and Executive Chairman’s report are included in this report. It is reiterated that all data presented in this report, including the starting net profit before tax in the cash flow statement in Attachment 1, is subject to change resulting from completion of the audit of the annual result to 31 December 2015.

Yours Sincerely

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John Talbot Company Secretary

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Attachment 1 – Statement of Cash Flows

Attachment 1– Statement of Cash Flows	Attachment 1– Statement of Cash Flows
	Quarter Ended 12 Months to 9 Months to 31-Dec-15 31-Dec-15 30 Sep 2015 $A’000 $A’000 $A’000 ($1,299) $310 $1,609 $0 $174 $174 $382 $1,775 $1,392 $458 ($957) ($1,415) $200 $1,354 $1,154
CASH FLOW FROM OPERATING ACTIVITIES
Underlying operational cash flow
Profit before taxation Adjustments for: - Non-cash Equity expense - Depreciation & amortisation - Foreign currency effects(2) - Other Non-cash items(1) Cash generated from/(utilised in) underlying operating activities
	($258) $2,657 $2,914
	$2,402 $937 ($1,464) ($2,042) $5,922 $7,964 $145 ($4,448) ($4,592) ($496) ($88) $408
Net working capital assets
- Trade and Other Receivables - Inventory - Trade and Other Payables - Other Cash generated from/(utilised in) net working capital asset
	$8 $2,323 $2,315
	($234) ($1,223) ($989) ($40) ($50) ($10)
Other operating activities
- Net Interest paid - Income tax paid Cash generated from/(utilised in) other operating activities Net Cashgenerated from/(utilised in) all operating activities
	($274) ($1,273) ($999)
	($524) $3,707 $4,231
CASH FLOW FROM INVESTING ACTIVITIES	($1,632) ($3,818) ($2,186) ($81) ($117) ($36) ($73) $894 $967 $140 $140 $0 ($42) ($0) $42
Net cash out on purchase/disposal of property, plant & equipment Group Information Technology Security Deposit Other Financial Assets Other Non-current assets Net cashprovided by / (used in) investing activities
	($1,689) ($2,902) ($1,213)
CASH FLOW FROM FINANCING ACTIVITIES	$1,170 $677 ($493) ($0) ($4) ($4) $66 $0 ($66)
Bank Debt Net capital raised from issue of securities Other Net cash provided by / (used in) financing activities
	$1,236 $673 ($562)

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Attachment 1 – Cash Flows (Continued)

	Quarter Ended	12 Months to	9 Months to
	31-Dec-15	31-Dec-15	30 Sep 2015
	$A’000	$A’000	$A’000
Net increase / (decrease) in cash and cash equivalents	($978)	$1,478	$2,456
Foreign exchange effects on total cash flow movement	($336)	$488	$823
Cash and cash equivalents at the beginning of the reporting
period	$9,714	$6,435	$6,435
Cash and cash equivalents at the end of the reporting period	$8,401	$8,401	$9,714

Note 1 Other Non-cash items –transaction inquarter ended 31 December 2015
Item Comment Add Back of Non-Cash Expenses Penalties and interest imposed by the Romanian fiscal authorities An objection to this impost has been lodged. In the event of failure of the objection it is likely that Magontec will have a professional indemnity claim against a major accounting firm. Impairment of assets at the Suzhou recycling plant (MAS) The MAS cash generating unit was assessed for impairment following the decrease in volumes over 2015. Trade debtor dispute No legal liability exists to make this payment. Nevertheless an amount has been provided for a possible commercial settlement. Deduction of Non-Cash Income Non-cash income as a result of reduction in pension liability Non-cash income as a result of reduction in other liabilities Other Net Non-cash income Add back net non-cash expenses	Amount $123,537 $362,158 $71,263 ($232,168) ($24,939) ($99,380)
	$200,471

Note 2 Decrease in unrealised foreign exchange gains in the quarter ended 31December 2015 of $458,000.

Appendix 4C Magontec Limited 31 December 2015 Quarterly Report Rule4.7B

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Attachment 2 – Appendix 4C

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Limited

QUARTERLY UNAUDITED CASHFLOW - APPENDIX 4C

for the Period Ended 31 December 2015

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Appendix 4C Magontec Limited 31 December 2015 Quarterly Report Rule4.7B

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Magontec Limited

ABN: 51 010 441 666 Registered & Principal Office: Suite 1.03, Level 1 46 Macleay St, Potts Point, NSW 2011 Australia

Tel: +61 2 8005 4109 Fax: +61 2 92528960 Website: www.magontec.com Email: Corporate@magontec.com

Non-Executive Directors (as at 31 December 2015)

Zhongjun Li Kangmin Xie Andre Labuschagne

Independent Directors (as at 31 December 2015)

Issued Capital (as at 31 December 2015)

Ordinary Shares (ASX Code MGL) 1,127,311,901 fully paid Ordinary shares on issue

Options: Nil

Substantial Shareholders		Percent
	No. of hr
	saes
Qinghai Salt Lake Magnesium IndustryLimited	330,535,784	29.32
Straits Mine Management Pty Limited	148,874,507	13.21
J P Morgan Nominees Australia Limited	101,234,887	8.98
CiticorpNomineesPtyLimited	89,481,422	7.94

Share Registry Services

Boardroom Pty Limited Level 7, 207 Kent St Sydney NSW 2000

Postal:

Robert Shaw Robert Kaye

Management Team

Nicholas Andrews Executive Chairman

John Talbot Chief Financial Officer& Company Secretary

GPO Box 3993 Sydney NSW 2001

Tel: 1300 737 760 or International: +61 2 9290 9600 Fax: 1300 653 459 Website: http://www.boardroomlimited.com.au

The current share price can be obtained from the ASX Website

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Appendix 4C Magontec Limited 31 December 2015 Quarterly Report Rule4.7B

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Appendix 4C

Quarterly Report

Introduced 31/3/2000. Amended 30/9/2001.

Name of entity

Ma ontec Limited g

ABN 51 010 441 666	Quarter ended (“current quarter”)
51 010 441 666	31 December 2015

Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for - (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Quarter Ended 31 Dec 15 $A’000	12 Months to 31 Dec15 $A’000
	35,413 (1,748) (19) 26 (33,923) 10 (245) (40)	139,990 (6,589) (45) (301) (128,075) 67 (1,290) (50)
	(524)	3,707

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Appendix 4C Magontec Limited 31 December 2015 Quarterly Report Rule4.7B

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1.8 Net operatingcash flows(carried forward)	Quarter Ended 31 Dec 15 $A’000 (524)	12 Months to 31 Dec 15 $A’000 3,707
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.1 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material)(1) Net investing cash flows 1.14 Total operating and investing cash flows	(81) (1,632) 140 (115)	(117) (3,818) 140 894
	(1,689)	(2,902)
	(2,213)	805
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.2 Other (provide details if material) Net financing cash flows	1,170 66	(4) 677 0
	1,236	673
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23Cash at end ofquarter	(978) 9,714 (336)	1,478 6,435 488
	8,401	8,401

1. Includes refund of security deposit of $893,842 for the 12 Months to 31 December 2015

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Appendix 4C Magontec Limited 31 December 2015 Quarterly Report Rule4.7B

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Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

related	entities
1.6 (a) (b)	Aggregate amount of payments to the relevant parties (aggregate fees paid to directors)	Quarter Ended 31 December 2015 $A
		$8,750
1.7	Aggregate amount of loans to the relevantparties	Nil
1.8	Explanation necessary for an understanding of the transactions
	Refer Notes at the foot of Attachment 1 in the covering letter.

Compliance statement

1

This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act 2001 (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

2

This statement does give a true and fair view of the matters disclosed.

Sign here:

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Date: 28 January 2016 Executive Chairman Magontec Limited

Print

name: Mr Nicholas Andrews

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Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The definitions in, and provisions of, AASB 107: Cash Flow Statements apply to this report except for the paragraphs of the Standard set out below.

• Aus20.1 - reconciliation of cash flows arising from operating activities to operating profit or loss

• 39 - 42 - itemised disclosure relating to acquisitions and disposals

• 48 - 52 - disclosure of restrictions on use of cash

3 Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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