MAGONTEC LIMITED — Interim / Quarterly Report 2018

Jul 30, 2018

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

31 July 2018

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

Dear Sirs,

Appendix 4C – Quarter Ended 30 June 2018 – UPDATE TO HEADING

Further to the release of the Appendix 4C on 31 July 2018, the company notes that the table headings “Year to Date (3 months)” on pages 3, 4 and 5 have been updated to “Year to Date (6 months) ”. All other data remains as originally presented.

It is reiterated that all data presented in this report is unaudited.

Yours sincerely

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John Talbot Company Secretary

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

APPENDIX 4C

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Limited

QUARTERLY UNAUDITED CASH FLOW APPENDIX 4C

for the Period Ended 30 June 2018

• See chapter 19 for defined terms Quarterly report for 30 June 2018

Page 1

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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 9252 8960

Website: www.magontec.com Email: Corporate@magontec.com

Non-Executive Directors As at 30 June 2018

Zhongjun Li Kangmin Xie Andre Labuschagne

Independent Directors As at 30 June 2018

Robert Shaw Robert Kaye

Issued Capital (as at 30 June 2018)

Ordinary Shares (ASX Code MGL)

1,140,073,483 fully paid Ordinary shares on issue

Options: Nil

Performance Rights[(1)] :

Performance Period Granted 1 Jan 2016 to 31 Dec 2018 19 May 2017 1 Jan 2017 to 31 Dec 2019 19 May 2017 1 Jan 2018 to 31 Dec 2020 10 May 2018 Total	Number 25,749,882 15,621,146 17,181,612
	58,552,640

Note:

(1) For terms of issue refer to the heading “Vesting of Performance Rights as Magontec Ordinary Shares” in paragraphs o to t of Resolution 5 of the 2017 AGM.

Substantial Shareholders

Shareholder	No. of shares(2)	Percent (3)
Qinghai Salt Lake Magnesium Industry Limited	330,535,784	28.99
Allan Gray Australia Pty Limited	176,858,972	15.51
Straits Mine Management Pty Limited	148,874,507	13.06

Notes:

(2) As per last “Notice of change of interests of substantial holder” lodged with ASX by shareholder.

Management Team

Nicholas Andrews Executive Chairman

John Talbot Company Secretary

Derryn Chin Chief Financial Officer

(3) “No. of Shares” divided by fully paid Ordinary shares on issue as at the date of this report.

Share Registry Services

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

Postal Address: 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 – www.asx.com.au

• See chapter 19 for defined terms Quarterly report for 30 June 2018

Page 2

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Name of entity

Magontec Limited

ABN

51 010 441 666

Quarter ended (“current quarter”)

30 June 2018

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8	Cash flows from operating activities Receipts from customers Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs Dividends received (see note 3) Interest received Interest and other costs of finance paid Income taxes paid Government grants and tax incentives Other (provide details if material)	38,311 (84) (26,577) (32) - (1,758) (1,674) - 13 (192) (1,040) -	76,647 (156) (57,772) (64) - (3,611) (3,478) - 28 (327) (1,119) -
1.9	Net cash from / (used in) operating activities	6,966	10,148

• See chapter 19 for defined terms Quarterly report for 30 June 2018

Page 3

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment1	(287)	(661)
(b) businesses (see item 10)
(c) investments
(d) intellectual property	(121)	(245)
(e) other non-current assets
2.2 Proceeds from disposal of:
(a) property, plant and equipment
(b) businesses (see item 10)
(c) investments
(d) intellectual property
(e) other non-current assets
2.3 Cash flows from loans to other entities
2.4 Dividends received (see note 3)
2.5 Other (provide details if material)	148	122
2.6 Net cash from / (used in) investing activities	(259)	(785)
3. Cash flows from financing activities
3.1 Proceeds from issues of shares
3.2 Proceeds from issue of convertible notes
3.3 Proceeds from exercise of share options
3.4 Transaction costs related to issues of shares, convertible notes or options
3.5 Proceeds from borrowings	1,678	5,725
3.6 Repayment of borrowings	(2,777)	(8,420)
3.7 Transaction costs related to loans and borrowings
3.8 Dividends paid
3.9 Other (provide details if material)
3.10 Net cash from / (used in) financing activities	(1,100)	(2,696)

• See chapter 19 for defined terms Quarterly report for 30 June 2018

Page 4

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of quarter/year to date	3,506	2,309
4.2 Net cash from / (used in) operating activities (item 1.9 above)	6,966	10,148
4.3 Net cash from / (used in) investing activities (item 2.6 above)	(259)	(785)
4.4 Net cash from / (used in) financing activities (item 3.10 above)	(1,100)	(2,696)
4.5 Effect of movement in exchange rates on cash held	41	177
4.6 Cash and cash equivalents at end of quarter	9,155	9,155
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	9,155	3,506
	9,155	3,506
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 60 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		60
		-
Not applicable

• See chapter 19 for defined terms Quarterly report for 30 June 2018

Page 5

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2	-
7.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3	-
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

Not applicable

8. Financing facilities available Add notes as necessary for an understanding of the position

8.	Financing facilities availa Add notes as necessary for an understanding of the position
8.1	Loan facilities
8.2	Credit standby arrangements
8.3	Other (please specify)

Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
22,683	19,457

• 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

Borrowings facilities as at 30 June 2018

Borrowings facilities as at 30 June 2018	Borrowings facilities as at 30 June 2018	Borrowings facilities as at 30 June 2018	Borrowings facilities as at 30 June 2018
	Interest Limit Drawn		Security
	Lender Maturity % $A 000 $A 000		status
	Commerzbank Germany 30-Sep-20 1.55% 13,166 11,343		Secured
	Commerzbank Germany 31-Dec-18 2.50% 160 160		Secured
	ING Romania Open 3.15% 3,273 2,699		Secured
	Bank of Communications China 01-Apr-19 5.22% 4,081 4,081		Secured
	Total borrowings on balance sheet 20,679 18,283
	Postbank(factoring) 30-Nov-18 1.34% 2,003 1,174
	Total facilities 22,683 19,457

No additional facilities entered into or proposed to be entered into after quarter end.

• See chapter 19 for defined terms Quarterly report for 30 June 2018

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

9. Estimated cash outflows for next quarter	9. Estimated cash outflows for next quarter	$A’000	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (provide details if material) 9.8 Total estimated cash outflows		(103) (29,898) (42) - (2,225) (2,061) -
		(34,329)
10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions		Disposals
10.1 Name of entity	Not applicable		Not applicable
10.2 Place of incorporation or registration	Not applicable		Not applicable
10.3 Consideration for acquisition or disposal	Not applicable		Not applicable
10.4 Total net assets	Not applicable		Not applicable
10.5 Nature of business	Not applicable		Not applicable

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: Date: 31 July 2018 (Executive Chairman)

Print name: Mr Nicholas Andrews

• See chapter 19 for defined terms Quarterly report for 30 June 2018

Page 7

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms Quarterly report for 30 June 2018

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