SKS TECHNOLOGIES GROUP LIMITED — Annual Report 2007

Aug 29, 2007

Stokes (Australasia) Limited

Results For Announcement To The Market For the Financial Year Ended 30 June 2007

Preliminary Final Report of Stokes (Australasia) Limited (ABN 24 004 554 929) for the Financial Year Ended 30 June 2007

This Preliminary Final Report is provided to the Australian Stock Exchange (ASX) under ASX Listing Rule 4.3A.

Current Reporting Period: Previous Corresponding Period:

Financial Year ended 30 June 2007 Financial Year ended 30 June 2006

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Stokes (Australasia) Limited

Results For Announcement To The Market For the Financial Year Ended 30 June 2007

Revenue and Net Profit

Revenue and Net Profit
Revenue from ordinary activities down Loss from ordinary activities after tax Attributable to members down Profit attributable to members down Dividends (Distributions) Final dividend (cents) Interim dividend(cents) Record date for determining entitlements to the dividend:		Percentage Change % Amount $
		5.6 To 19,929,502 156.4 To (239,860) 156.4 To (239,860) Amount per security Franked Amount per security
		0 0 0 0 N/A

• final dividend

• interim dividend

Brief Explanation of Revenue, Net Profit/(Loss) and Dividends (Distributions)

The group made a loss of $239,860 for the year compared to a profit of $425,530 last year. Sales for the year were $19.9 million compared with last years sales of $21.1 million

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Stokes (Australasia) Limited

Income Statement For the Financial Year Ended 30 June 2007

Note Sales revenue (sale of goods) Cost of sales 2 Gross Profit Other revenue from ordinary activities Distribution expenses Selling expenses Occupancy expenses Administration expenses Borrowing costs Other expenses from ordinary activities Profit Before Income Tax Expense Income tax expense relating to ordinary activities 2 Profit After Income Tax Expense Net profit attributable to outside equity interests Net Profit Attributable to Members of the Parent Entity Source Reference: ASX Appdx 4E.3 Basic earnings cents per share Diluted earnings cents per share	2007 $ 2006 $
	19,929,502 21,122,919 (14,158,365) (14,648,418) 5,771,137 104,855 6,474,501 71,422 (1,382,660) (1,735,027) (394,141) (2,170,061) (224,397) (1,309,886) (1,804,412) (375,015) (2,190,115) (281,598) 265 -
	(30,029) 584,897 (126,369) (99,491)
	(156,398) 485,406 (83,462) 59,876
	(239,860) 425,530
	(4.2) 7.5 (4.2) 7.5

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Stokes (Australasia) Limited

Balance Sheet For the Financial Year Ended 30 June 2007

Note Current Assets Cash and cash equivalents Trade and other receivables Inventories Other 6(a) Total Current Assets Non-Current Assets Property, plant and equipment Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Interest-bearing loans and borrowings Income tax payable Provisions Other financial liabilities Total Current Liabilities Non-Current Liabilities Interest-bearing loans and borrowings Provisions Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed equity Reserves Accumulated losses 5 Parent Entity Interest Outside Equity Interest Total Equity	2007 $ 2006 $
	266,389 3,226,088 4,016,500 59,203 195,074 3,394,012 4,598,926 61,170
	7,568,180 8,249,182
	796,477 932,874
	796,477 932,874
	8,364,657 9,182,056
	2,088,217 42,640 2,994 936,847 - 1,983,270 19,963 2,694 926,939 130,000
	3,070,698 3,062,866
	1,659,475 62,373 2,247,337 83,732
	1,721,848 2,331,069
	4,792,546 5,393,935
	3,572,111 3,788,121
	5,895,000 5,895,000 16,366 (65,999) (2,488,740) (2,248,880)
	3,422,626 149,485 3,580,121 208,000
	3,572,111 3,788,121

Source Reference: ASX Appdx 4E.4

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Stokes (Australasia) Limited

Cash Flow Statement For the Financial Year Ended 30 June 2007

Note Cash Flows From Operating Activities Receipts from customers Payments to suppliers and employees Interest received Interest and other costs of finance paid Income tax paid Net cash provided by/(used in) operating activities 6(c) Cash Flows From Investing Activities Payment for plant and equipment Proceeds from sale of property, plant and equipment Net cash provided by/(used in) operating activities Cash Flows From Financing Activities Dividend Paid Proceeds from borrowings Repayment borrowings to related parties Share buyback Repayment of borrowings Net cash provided by/(used in) financing activities Net Increase In Cash Held Cash At The Beginning Of The Financial Year Cash At The End Of The Financial Year 6(a)	2007 $ 2006 $
	20,240,257 21,446,127 (18,861,181) (20,183,382) 17,740 20,937 (224,397) (126,069) (281,598) (222,518)
	1,046,350 779,566
	(130,482) (140,216) 9,439 -
	(121,043) (140,216)
	(77,289) - 92,267 56,251 (130,000) (81,518) (657,452) (20,000) (90,000) (522,464)
	(853,992) (576,213)
	71,315 195,074 63,137 131,937
	266,389 195,074

Source Reference: ASX Appdx 4E.5

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Stokes (Australasia) Limited

Statement of Changes in Equity For the Financial Year Ended 30 June 2007

At 1 July 2005 Foreign currency adjustment	Notes Attributable to equity holders of the parent Minority Interest Total equity
	Issued Capital Accumulated losses Other reserves Total 5,895,000 (2,674,410) 5,062 3,225,652 216,348 3,442,000 - - (43,061) (43,061) (7,000) (50,061)
Profit / (Loss) for the year Total income & expense recognised for the year Share buy back by subsidiary	- 425,530 - 425,530 60,652 486,182 5,895,000 (2,674,410) (37,999) 3,182,591 209,348 3,391,939 - - (28,000) (28,000) (62,000) (90,000)
At 30 June 2006	5,895,000 (2,248,800) (65,999) 3,580,121 208,000 3,788,121

YEAR ENDED 30 JUNE 2007

At 1 July 2006 Profit /(loss) for the year Foreign currency adjustment	Notes Attributable to equity holders of the parent Minority Interest Total equity
	Issued capital Accumulated losses Other reserves Total 5,895,000 (2,248,880) (65,999) 3,580,121 208,000 3,788,121 - (239,860) - (239,860) 83,462 (156,398) - - 102,506 102,506 (3,311) 99,195
Total recognised income/(expense ) for the year Share buy back by subsidiary Dividend paid by New Zealand	- (239,860) 102,506 (144,275) 80,151 (57,203) - - (20,141) (20,141) (61,377) (81,518) - - - - (77,289) (77,289)
At 30 June 2007	5,895,000 (2,488,740) 16,366 3,422,626 149,485 3,572,111

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Note Contents

• 1 Basis of Preparation

• 2 Profit/(Loss) from Ordinary Activities 3 Commentary on Results 4 Sales of Assets 5 Accumulated Losses 6 Notes to the Statement of Cash Flows

• 7 Details relating to Dividends (Distributions) 8 Earnings Per Share 9 Net Tangible Assets per Share 10 Contingent Liabilities and Contingent Assets 11 Segment Information 12 Subsequent Events 13 Information on Audit or Review

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference 1. Basis of Preparation This preliminary final report has been prepared in accordance with ASX Listing Rule 4.3A and the disclosure requirements of ASX Appendix 4E.

The accounting policies adopted in the preparation of the preliminary final report are consistent with those adopted and disclosed in the 2006 annual financial report.

Details of changes in accounting policies:

There have been no material changes in accounting policies.

2. Profit/(Loss) From Ordinary Activities ASX Appdx 4E.3 Profit/(Loss) from ordinary activities before income tax includes the following items of revenue and expense: (a) Revenue Net increments arising from the revaluation of non-current assets: Investments Property, plant and equipment Intangibles (b) Expenses Cost of sales Net bad and doubtful debts (recovered)/expense Non-current assets write down to recoverable amount Property, plant and equipment Depreciation of non-current assets Amortisation of non-current assets

2007 $ 2006 $

- - - - - - 14,158,365 (69,330) 237,891 14,869 14,648,418 (36,052) 298,433 7,000

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

2. Profit/(Loss) From Ordinary Activities

(c) Revision of Accounting Policies

Details of the nature and amount of revisions of accounting estimates:

Nil

3. Commentary on Results

ASX Appdx Net Profit/(Loss)

4E.14 The group made a loss of $239,860 for the year compared to a profit of $425,530 last year. Sales for the year were $19.9 million compared with last years sales of $21.1 million. Trading results for Australia were near break even prior to a one off additional write down of $259,000 for obsolete and slow moving stock. Stokes (New Zealand) Limited made a profit of $283,831 compared to a profit of $210,477 the previous year. The result was helped by a stronger value of the New Zealand dollar as most of their raw materials and merchandised lines are imported.

The company’s net operating cash flow for the year was $1,046,350 compared to $779,566 in the previous year. In last years report it was not expected that there would be further significant reductions in working capital, nevertheless management was able to achieve this pleasing result which enabled borrowing to be reduced from $2.4 million to $1.7 million.

No dividend has been paid or is payable by Stokes (Australasia) Limited in respect of the year ended 30 June 2007.

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference 4. Sale of Assets Sales of assets in the ordinary course of business have given rise to the following profits and losses: ASX Appdx 4E.3 Net Loss Property, plant and equipment 5. Accumulated Losses Balance at beginning of financial year ASX Appdx 4E.8 Net Loss Balance at end of financial year 6. Notes to the Statement of Cash Flows ASX Appdx 4E.5 (a) Reconciliation of Cash For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: Cash on hand	2007 $ 2006 $ 9,439 - (4,681) - (2,248,880) (2,674,410) (239,860) 425,530
	(2,488,740) (2,248,880)
	266,389 195,074

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

6. Notes to the Statement of Cash Flows (continued)

6.	Notes to the Statement of Cash Flows (continued)	Notes to the Statement of Cash Flows (continued)	Notes to the Statement of Cash Flows (continued)
ASX Appdx 4E.5	(b) Financing Facilities
	Secured bank facility, subject to:- Amount used Amount unused	1,562,374 2,437,626	2,193,595 3,806,405
	4,000,000 6,000,000
	Secured overdraft facility, subject to:- Amount used Amount unused	- 270,000	- 270,000
	270,000 270,000

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source
Reference
			2007	2006
			$	$
6.	Notes to the Statement of Cash Flows (continued)
ASX Appdx 4E.5	(c)	Reconciliation of (Loss) from Ordinary Activities after Related Income Tax to Net
		Cash Flows from Operating Activities
		Profit / (Loss) from ordinary activities after
		related income tax	(156,398)	485,406
		(Profit)/Loss on disposal of non-current	4,681	-
		assets
		Depreciation and amortisation of non-current	252,760	305,433
		assets
		Amounts written off
		Plant and equipment
		Increase / (decrease) in tax balances	300	(122,106)
		Changes in net assets and liabilities, net of
		effects from acquisition and disposal of
		businesses:
		(Increase)/decrease in assets:
		Current receivables	200,902	332,988
		Current inventories	925,027	329,074
		Other current assets	1,967	219,830
		Increase/(decrease) in liabilities:
		Current trade payables and accruals	125,562	(752,730)
		Current tax liability
		Provisions-employee benefits	(11,451)	(18,329)
		Net cash from operating activities	1,046,350	779,566

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

7. ASX Appdx 4E.6, ASX Appdx 4E.14.2 ASX Appdx 4E.6 ASX Appdx 4E.14.2 ASX Appdx 4E.6 ASX Appdx 4E.14.2 ASX Appdx 4E.6, ASX Appdx 4E.14.2

Details Relating to Dividends (Distributions) Date dividend payable Amount per Share ¢ Amount per security of foreign sourced Dividend ¢ Final dividend Interim dividend Total 2007 2006 2005 2006 2005 2006 2005 N/A N/A N/A N/A N/A N/A N/A - - - - - - - - - - - - - - Total dividend (distribution) per security (interim plus final) 2007 ¢ 2006 ¢ Ordinary securities (each class separately) Preference securities (each class separately) Other equity instruments (each class separately) - - - - - - Interim and final dividend (distribution) on all securities 2007 2006 Ordinary securities (each class separately) Preference securities (each class separately) Other equity instruments (each class separately) - N/A N/A - N/A N/A Total - - Any other disclosures in relation to dividends (distributions).

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

1. Details Relating to Dividends (Distributions) (continued)

Details Relating to Dividends (Distributions	)(continued)
Stokes Australasia Limited Minority shareholders	- -	- -
Total	-	-

1. Earnings Per Share 2007 2006 ¢ per share ¢ per share Basic EPS (4.2) 7.5 Diluted earnings per share (4.2) 7.5 Earnings used in the calculation of the basic and ( 239,860) 425,530 diluted earnings per share. The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: 5,651,520 5,651,520 2007 2006 Earnings used in the calculation of basic EPS (239,860) 425,530 2007 2006 Weighted average number of ordinary shares 5,651,520 5,651,520

2. 14 -

Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference 9. Net Tangible Assets Per Share 2007 2006 ASX Appdx 4E.9 Net tangible assets per Share 0.63 0.67 10. Contingent Liabilities and Contingent Assets Contingent Liabilities None noted Contingent assets None noted

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

11. SEGMENT INFORMATION

SEGMENT REVENUES

For management purposes, the consolidated entity is organised into two geographical segments. These segments are the basis on which the consolidated entity reports its Australia and New Zealand results.

Australia - Goods manufactured and bought in for resale in Australia.

New Zealand - Goods manufactured and bought in for resale in New Zealand.

Australia New Zealand Eliminations Consolidated sales revenue	External Sales	External Sales
	2007 $	2006 $
	17,633,810 2,493,778	18,863,505 2,460,414
	20,127,588 (198,086)	21,323,919 (201,000)
	19,929,502	21,122,919

SEGMENT RESULTS

Australia New Zealand Total of all segments Eliminations Profit/(loss) before income tax expense Income tax expense Net Loss	2007 $	2006 $
	(445,600) 415,571	300,829 309,000
	(30,029) -	609,829 (25,000)
	(30,029) (126,369)	584,829 (99,941)
		484,888
	(156,398)

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Stokes (Australasia) Limited Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

11. SEGMENT INFORMATION (continued)

SEGMENT ASSETS AND LIABILITIES

Australia New Zealand Eliminations	Assets	Assets	Liabilities	Liabilities
	2007 $	2006 $	2007 $	2006 $
	9,757,400 1,068,469	10,607,655 965,000	(6,753,948) (307,805)	(7,362,552) (229,884)
	10,825,869 (2,461,212)	11,572,655 (2,390,599)	(7,061,753) 2,269,207	(7,592,436) 2,198,501
				(5,393,935)
Consolidated	8,364,657	9,182,056	(4,792,546)

OTHER SEGMENT INFORMATION

	Acquisition of segment assets Depreciation and amortisation of segment assets	Australia	Australia	New Zealand	New Zealand
		2007 $	2006 $	2007 $	2006 $
		123,996 (228,625)	102,000 (261,000)	6,486 (23,935)	37,000 (43,000)

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

12. Subsequent Events

Share Buyback: Stokes (New Zealand) Limited

On the 1st October 2006, Stokes (New Zealand) Limited bought back 40,000 shares at $2.04 (NZD2.33) per share, of the parcel of 200,000 shares originally purchased by W. & U.G. Haller. W. Haller is a director of Stokes (New Zealand) Limited. This transaction reduced the Haller holding to 120,000 shares and the total number of shares issued from 965,000 to 925,000. A further share buyback of 40,000 shares from W. & U.G. Haller is planned October 2007 for October 2008 and 40,000 for October 2009.

There has not been any other matter or circumstance not referred to in the financial statements, notes thereto, or elsewhere in this report, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

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Stokes (Australasia) Limited

Notes to the Financial Statements For the Financial Year Ended 30 June 2007

Source Reference

13. Information on Audit or Review

ASX Appdx 4E.15 This preliminary final report is based on accounts to which one of the following applies: 1 The accounts have been audited. 1 The accounts have been subject to review. √ 1 The accounts are in the process of The accounts have not yet been being audited or subject to review. audited or reviewed.

ASX Appdx Description of likely dispute or qualification if the accounts have not yet been 4E.16 audited or subject to review or are in the process of being audited or subjected to review.

ASX Appdx Description of dispute or qualification if the accounts have been audited or 4E.17 subjected to review.

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