RAIDEN RESOURCES LIMITED — Annual Report 2013

Aug 29, 2013

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SubZero Group Limited ASX Preliminary final report – 30 June 2013

Lodged with the ASX under Listing Rule 4.3A

Contents

Results for Announcement to the Market 2

Preliminary consolidated comprehensive income statement 3

Preliminary consolidated statement of financial position 4

Preliminary consolidated statement of cash flows 5

Preliminary consolidated statement of changes in equity 6

Notes to the preliminary consolidated financial statements 7

Other Appendix 4E Information 11

SubZero Group Limited ABN 68 009 161 522 PO Box 561 Muswellbrook NSW 2333 | P: 02 6540 9400 | F: 02 6540 9444 www.subzeroservices.com.au

SubZero Group Limited Year ended 30 June 2013 (Previous corresponding period: 9 months ending 30 June 2012)

Results for Announcement to the Market

				$’000
Revenue from ordinary activities		N/A	to	84,903
Profit/(loss) from ordinary activities after tax attributable to members		N/A	to	(2,596)
Net profit/(loss) for the period attributable to members		N/A	to	(2,596)
Net Tangible Assets per Security As at 30 June 2013 As at 30 June 2012				0.04c (1.73c)
Basic Earnings per share For the year ending 30 June 2013				(1.71c)

Commentary on the Results

The SubZero Group was formed by the acquisition of the group’s entities by SVC Group Limited on the 10 April 2013 and its subsequent reinstatement on the ASX on the 22 April 2013. For accounting purposes the entities were consolidated from September 2011, thus providing comparative numbers for FY12 for 9 months from October 2011 to June 2012 in the statutory results. Therefore comparisons to the statutory FY12 results are not meaningful.

SubZero Group Limited’s (SZG) statutory net loss after tax for the year ended 30 June 2013 was $2.596 million, underlying net loss after tax was $0.134 million as per the attached reconciliation.

Underlying EBITDA of $6.215 million was within the range of guidance provided on 2 July 2013 of $6 million to $7 million.

The underlying sales and profit results in FY13 were negatively impacted by the general downturn in the sector and in particular by;

• a) Unrecovered personnel costs incurred in maintaining a labour pool in anticipation or normally scheduled labour hire requirements

• b) Delays in occupying the new workshop at Muswellbrook due to sewerage and water mains issues which impacted SZG’s ability to carry out mining equipment refurbishment and maintenance works

• c) Deferral of start dates of planned contract works by customers which has led to underutilisation of SZG people and plant

• d) Delays in corporate restructuring, refinancing and ASX listing process

Gross debt at 30 June 2013 was $16.585 million, a reduction of $7.1 million from 30 June 2012. The debt is represented by finance leases of $12.475 million for equipment purchases, $3.277 million from the factoring of invoices and $0.833 million from loans. This represents 2.7 times the underlying EBITDA. The Company is currently pursuing refinancing initiatives to provide facilities to better fund the Company’s working capital and growth.

2

SubZero Group Limited Preliminary consolidated statement of comprehensive income For the year ended 30 June 2013

N ot es Revenue from continuing operations 5 Cost of sales Gross profit Other income 5 Administration and costs Vehicle & Equipment costs Finance costs 5 Employment costs Occupancy costs Profit before income tax Income tax expense 6 Profit for the year Profit is attributable to: Owners of SubZero Group Limited Non-controlling interests Other comprehensive income for the year net of tax Total comprehensive income for the year Total comprehensive income for the year is attributable to: Owners of SubZero Group Limited Non-controlling interests	12 months to June 2013 $'000		9 months to June 2012 $'000
	84,903 (55,463)		64,325 (38,941)
	29,440		25,384
	593 (3,721) (9,364) (2,253) (14,879) (1,959)		430 (2,189) (7,554) (1,940) (9,424) (1,202)
	(2,143)		3,505
	(453)		199
	(2,596)		3,704
	(2,596) -		3,552 152
	(2,596)		3,704
	-		-
	(2,596)		3,704
	(2,596) -		3,552 152
	(2,596)		3,704

The above consolidated income statement should be read in conjunction with the accompanying notes.

3

SubZero Group Limited Preliminary consolidated statement of financial position As at 30 June 2013

Notes Current assets Cash and cash equivalents 7 Receivables 8 Inventories 10 Total current assets Non-current assets Property, plant and equipment 12 Deferred tax assets 13 Intangible assets 14 Total non-current assets Total assets Current liabilities Payables 17 Borrowings 19 Current tax liabilities Total Current Liabilities Non-current liabilities Borrowings 19 Deferred tax liabilities 21 Provisions 18 Total non-current liabilities Total liabilities Net assets Equity Share & Unit Capital 22 Reserves 23(a) Retained earnings 23(b) Capital and reserves attributable to owners of SubZero Group Limited Non-controlling interests Total equity	2013 $'000 125 14,961 2,601 17,687 17,431 730 1,391 19,552 37,239 18,011 8,917 421 27,349 7,591 563 272 8,426 35,775 1,464 6,811 (643) (4,704) 1,464 - 1,464	2012 $'000
		320 16,496 1,308
		18,124
		18,529 643 833
		20,005
		38,129
		15,351 11,635 192
		27,178
		12,095 253 156
		12,504
		39,682
		(1,553)
		556 - (2,261)
		(1,705) 152
		(1,553)

The above consolidated financial position should be read in conjunction with the accompanying notes.

4

SubZero Group Limited Preliminary consolidated statement of cash flows For the year ended 30 June 2013

Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees (inclusive of goods and services tax) Other revenue Interest paid Income taxes paid Net cash (outflow) inflow from operating activities Cash flows from investing activities Payment for non-controlling interest Payment for capitalised R&D costs Payment for property, plant and equipment Payment for purchase of subsidiary, net of cash acquired Proceeds from sale of property, plant and equipment Net cash (outflow) inflow from investing activities Cash flows from financing activities Distributions to unit holders Proceeds from capital raising Repayment of borrowings Proceeds from borrowings Net cash (outflow) inflow from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	2013 $'000 94,906 (87,581) 531 (2,416) (1) 5,439 (659) (558) (3,076) - 62 (4,231) - 6,262 (7,665) - (1,403) (195) 320 125	2012 $'000
		65,463 (59,582) 332 (2,237) -
		3,976
		- - (3,102) (850) 95
		(3,857)
		(1,759) - - 1,058
		(701)
		(582) 902
		320

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

5

SubZero Group Limited Preliminary consolidated statement of changes in equity For the year ended 30 June 2013

Attributable to owners of SubZero Contributed Equity Reserves Retained earnings $'000 $'000 $'000 Total equity at the beginning of the financial year 1 October 2011 556 - (2,307) Profit for the year - - 3,551 Other comprehensive income - - - Total comprehensive income for the year as reported in the 2012 financial statements - - 3,551 Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs - - - Dividends provided for or paid - - (3,506) Transactions with non- controlling interests - - Balance at 30 June 2012 556 - (2,261) Profit for the year - - (2,596) Other comprehensive income - - - Total comprehensive income for the year - - (2,596) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs and tax 6,255 (643) - Distributions Paid - - 153 Changes in equity 6,255 (643) 153 Balance at 30 June 2013 6,811 (643) (4,704)	Attributable to owners of SubZero	Attributable to owners of SubZero	Group Limited Total Non- controlling interest $'000 $'000 (1,761) - 3,551 152 - - 3,551 152 - - (3,506) - - - (1,705) 152 (2,596) - - - (2,596) - 5,612 - 153 (152) 5,765 (152) 1,464 0	Total equity $'000 (1,751) 3,703 - 3,703 - (3,505) - (1,552) (2,596) - (2,596) 5,612 1 5,613 1,464
		Retained earnings $'000 (2,307) 3,551 - 3,551 - (3,506) - (2,261) (2,596) - (2,596) - 153 153 (4,704)	Total $'000 (1,761) 3,551 - 3,551 - (3,506) - (1,705) (2,596) - (2,596) 5,612 153 5,765 1,464

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

6

SubZero Group Limited Notes to the preliminary consolidated financial statements For the year ended 30 June 2013

Note 1 Segment information

The SubZero Group operates in a single segment, Mining Services, in Australia. The various products and services all relate to the same economic characteristics and are sold to a common set of customers. Based on the operation of a single segment and geography separate segment numbers have not been provided as the financial statements represent the one segment.

Note 2 Profit from ordinary activities

Revenue From continuing operations Sales revenue Other revenue Other Expenses Profit before income tax includes the following specific expenses: Depreciation Motor Vehicles Plant & equipment Leasehold improvements Office furniture & equipment Other Total depreciation Amortisation Borrowing costs Other Total amortisation	12 months to 2013 $'000		9 months to June 2012 $'000
	84,903		64,325
	(84,903)		(64,325)
	(593)		(430)
	(593)		(430)
	1,322 2,662 8 159 54		957 2,223 5 102 -
	4,205		3,287
	17 1		- -
	18		-

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Note 3 Reconciliation of income tax expense

(a) Income tax expense Current tax Deferred tax Prior year adjustment Deferred income tax (revenue) expense included in income tax expense comprises: Decrease (increase) in deferred tax assets (Decrease) increase in deferred tax liabilities (b) Numerical reconciliation of income tax expense to prima facie tax payable Profit from continuing operations before income tax expense Tax at tax rate of 30% (2012‑30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Entertainment Fines Research & development rebate Legal fees Distribution Trust Distribution taxed outside of group Under (over) provision in prior years Recognition of deferred tax balances previously not recognised Current year revenue losses not recognised as DTA Income tax expense (c) Amounts recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or credited to equity Net deferred tax - debited (credited) directly to equity	June 2013 $ 229 224 - 453 (86) 310 224 (2,143) (643) 16 2 (54) - - (679) - - 1,132 453 -	June 2012 $ 191 (390) -
		(199)
		(643) 253
		(390)
		1,734
		520 15 1 - 13 56 (634)
		(29) - (170) -
		(199)
		-

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Note 4 Reconciliation of profit from ordinary activities after income tax to net cash flow from operating activities

Profit for the year Share of profits of associates Depreciation and amortisation Bad Debts Expense Net (gain) loss on sale of non-current assets (Increase) / decrease in trade debtors (Increase) / decrease in inventories (Increase) / decrease in deferred tax assets Increase / (decrease) in trade creditors Increase / (decrease) in provision for income taxes payable Increase / (decrease) in provision for deferred income tax Increase / (decrease) in other provisions Net cash inflow from operating activities	2013 $'000 (2,142) - 4,105 21 7 1,513 (1,293) (87) 2,660 229 310 116 5,439	2012 $'000
		3,505 - 3,301 85 19 (5,295) 406 - 1,801 - - 155
		3,976

Note 5 Business Combinations

(i) Acquisition of SubZero Holdings Pty Limited by SVC Group Limited

On 10 April 2013, SubZero Holdings Pty Limited and its control entities were acquired by SVC Group Limited and subsequently changed its name to SubZero Group Limited. SVC Group Limited entered a Share Purchase Agreement with the shareholders of SubZero Holdings Pty Limited to acquire all of the issued capital in SubZero Holdings Pty Limited for consideration of $30m to be satisfied by the issue of 120million shares in SVC Group Limited at a price of $0.25 each in accordance with a prospectus dated 7 February 2013. The acquisition of SubZero Holdings Pty Limited has been treated as a reverse acquisition in accordance with AASB 3 Business Combinations . Consequently the consolidated financial statements reflect a continuation of the existing business and the financial statements of SubZero Holdings Pty Limited (the legal subsidiary of SubZero Group Limited) for the whole of the financial year and comparative period since incorporation on 1 October 2011.

Note 6 Transactions with non-controlling interests

On 30 June 2013, SubZero Holdings Pty Limited acquired the remaining 26% of the issued shares of Harness Master Wiring Systems (NSW) Pty Limited and DMST Pty Ltd that it did not already own for a purchase consideration of $809,000. The carrying amount of the non-controlling interests in Harness Master Wiring Systems (NSW) Pty Limited and DMST Pty Ltd on the date of acquisition was $166,258. The group recognised a decrease in non-controlling interests of $166,258 and a decrease in equity attributable to owners of the parent of $642,272.

9

SubZero Group Limited Notes to the preliminary consolidated financial statements For the year ended 30 June 2013

Note 7 Contributed equity

a) Share capital

Ordinary shares Fully paid Total Contributed equity	Parent entity 2013 2012 Shares Shares 165,900,455 137,639,069	Parent entity 2013 2012 $’000 $’000 84,944 46,737 84,944 46,737

b) Movements in ordinary share capital

Date	Details		Number of shares		Parent entity
					$’000
1 July 2012	Opening Balance		137,639,069		46,737
28 November 2012			2,272,728		50
	Share Issue
7 December 2012			7,142,858		150
	Share Issue
10 April 2013	Consolidation of shares (147,054,655 at 10.6:1)		(133,181,400)		-
10April 2013	Share Issue		151,427,200		37,857
30 June 2013	Issue of shares as part of the purchase consideration of DMST & Harness Master Pty Limited		600,000		150
30 June 2013	Balance				84,944
			165,900,455

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on 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.

10

SubZero Group Limited Supplementary Appendix 4E information

Audit

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

The Audit will be made available with the Company's financial report as part of the Company's Annual Report which is still be completed and will be released before the end of September 2013.

Other significant information

Reconciliation of Underlying Profit to Statutory Profit

	Net Profit/(loss)
	EBITDA After tax
Statutory financial Statements	4,315 (2,596)
Consulting costs- restructure & listing	333 233
Legal costs - restructure & listing	804 563
Other costs - restructure	405 283
One off costs (includes redundancies)	358 251
Tax losses unable to be utilised	- 1,132
	6,215 (134)

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