SPRINTEX LIMITED — Annual Report 2009

Aug 27, 2009

Appendix 4E

PRELIMINARY FINAL REPORT 12 MONTHS ENDED 30 JUNE 2009

Details of the reporting period and the previous corresponding period

Name of entity AUTOMOTIVE TECHNOLOGY GROUP LIMITED

ACN	Reporting Period	Previous Corresponding Period
106 337 599	Year ended 30/06/2009	Year ended 30/06/2008

Results for announcement to the market

		Change		Amount
Revenuefrom ordinary activities	Down	20%	to	$463,717
Lossfor ordinary activities after tax attributable to members	Up	6%	to	$5,793,738
Basic loss per sharecents per share	Down	33%	to	6 cents

Dividends	Amount per Security	Franked amount per Security
Interim Dividend	Nil	Nil
Final Dividend	Nil	Nil

Record Date for determining dividend – N/A

Commentary on results and other significant information

Please refer to the attached 2009 unaudited financial statements for further information on a review of the Group’s financial position and performance of the Group for the year ended 30 June 2009.

Dividend reinvestment plans

The Company does not operate dividend reinvestment plans.

Net Tangible Asset Backing

Net Tangible Asset Backing
	2009	2008
	(cents)	(cents)
Net Tangible Asset per ordinary share	1 cent	6 cents

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AUTOMOTIVE TECHNOLOGY GROUP LIMITED ACN 106 337 599 APPENDIX 4E - PRELIMINARY FINAL REPORT

Details of controlled entities acquired or disposed of

The Company has not acquired or disposed of any controlled entities during the year.

Details of associates and joint venture entities

The Company does not hold any interests in associated entities or joint venture entities.

Audit

This report is based on financial statements which are in the process of being audited.

JAY STEPHENSON

COMPANY SECRETARY

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AUTOMOTIVE TECHNOLOGY GROUP LIMITED ACN 106 337 599 APPENDIX 4E - PRELIMINARY FINAL REPORT

Review of Operations

During the first six months of the financial year ended 30 June 2009, as stated in the 2009 Half Year Report, ATG expanded its distribution network into China and United Arab Emirates (UAE) regions. In December 2008, ATG appointed Huachuang Zhenxin Automotive Technology Development Co Ltd as the exclusive distributor of ATG’s Sprintex® Superchargers products in Greater China Region. It also signed a prototype evaluation agreement with Al Futtaim Motors with a view to securing exclusive distribution agreements for Sprintex® Supercharger Systems in the UAE.

ATG entered into initial feasibility studies with a party in China in respect of setting up volume production facilities and also entered into its first significant agreement with a Chinese Original Equipment Manufacturer (OEM).

ATG has built and commissioned a Society of Australian Engineers (SAE) compliant testing facility for automotive and industrial compressor applications.

ATG has received certification to ISO 9001/2008 and also achieved TUV certification (“Technischer Überwachungsverein” German safety and standards institution).

The Company continues to receive high levels of enquiry for its patented green Sprintex® Supercharging technology.

In the second half of the financial year ended 30 June 2009, ATG continued to expand its international distribution network. In February 2009, ATG signed a distribution agreement with a German Automotive Group, IAP Project Management GmbH for the distribution of ATG’s Sprintex® supercharger products in Europe.

ATG has completed the development of the Sprintex® Series 5 superchargers and has filed an application for the patent on the compressor system.

Financial Review

The financial results for the 2009 financial year reflect tremendous research and development activities in the commercialisation and product testing of the new range of patented Sprintex® Superchargers as well as the negative impacts from the global financial crisis on automotive industry as a whole.

Operating results

The loss for the financial year was $5,793,738 when compared to a loss of $5,457,159 in the 2008 financial year, Sales for the year 2009 were $463,717 (2008, $580,863), representing a decrease of 20%. This was largely a result of continuous significant market testing and development of new product range during the second half of 2008 which continued to impact on sales revenues. It is evidenced by the dramatic increase in research and development cost by 100% in 2009. This trend is expected to be reversed as new products are released or scheduled to release to the markets in first half of the 2010 financial year.

Gross profit for the year ended 30 June 2009 was $42,075, compared to $279,221 in 2008. The reduction in gross profit was contributed by a vigorous discount sales program on Vee Two aftermarket and performance motorcycle accessories during the second half of the financial year as a result of strategic decision to focus on the development and manufacture of Sprintex® products in the coming year.

Results for 2009 year were also affected by:

• As a result of the strategic decision to have future focus on the development and manufacturing of Sprintex® products, provision for inventory was increased substantially in the amount of $653,442 (2008: $135,335)

• Foreign exchange loss of $1,950 during the year when compared to foreign exchange gain of $132,352 in 2008

• Research and development expenses increased by $1,259,278 during the year

• Recognition of share based payment of $57,500

• Increased marketing costs incurred by marketing consultants in Europe, quality control costs relating to ISO 9001/2008 compliance and audit costs and product quality assurance costs incurred in Europe

• Increased costs in trade mark and patent management

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AUTOMOTIVE TECHNOLOGY GROUP LIMITED ACN 106 337 599 APPENDIX 4E - PRELIMINARY FINAL REPORT

Outlook

The severity of the present economic global crisis and its effect on the automotive industry in turn affected the Company’s future performance to an extent. However, management has plans to respond to the difficult operating environment by making future improvements in efficiency and implement cost reductions. These measures include:

• Implement restructuring programme to reduce operating cost base

• Cost reduction in all areas, particularly in areas that do not contribute to sales revenue

• Renegotiation of supply contracts or source alternative supply resources

• Outsourcing of manufacturing at lower costs; and

• Expanding manufacturing facilities in countries with lower cost base

28 August 2009

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INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2009

Revenue 4 Cost of goods sold Gross profit Other revenue and gains/(losses) 4 Distribution & marketing expenses Occupancy expenses Corporate expenses Research & development expenses 4 Administration expenses Other expenses 4 Impairment loss 4 Finance costs 4 Loss before income tax expense Income tax benefit Net loss for the year Loss per share attributable to the ordinary equity holders of the Company Basic loss per share 5 Diluted loss per share 5	CONSOLIDATED ENTITY PARENT ENTITY 2009 $ 2008 $ 2009 $ 2008 $ 463,717 580,863 463,717 580,863 (421,642) (301,642) (421,642) (301,642)
	42,075 279,221 42,075 279,221
	52,644 396,156 53,180 396,130
	(358,237) (533,758) (358,237) (533,758) (26,141) (134,219) (26,141) (134,219) (1,364,323) (720,337) (1,364,323) (720,337) (2,497,188) (1,237,910) (2,497,188) (1,237,910) (1,081,858) (2,856,169) (1,076,994) (2,846,370) (760,722) (801,028) (760,722) (264,643) - - (86,837) (74,586) (180,080) (175,565) (180,080) (175,565)
	(6,173,830) (5,783,609) (6,255,267) (5,848,422) 380,092 326,450 380,092 326,450
	(5,793,738) (5,457,159) (5,875,175) (5,521,972)
	(0.06) (0.09) (0.06) (0.09)

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

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A U T O M O T I V E T E C H N O L O G Y G R O U P L I M I T E D A N D C O N T R O L L E D E N T I T I E S

BALANCE SHEET

AS AT 30 JUNE 2009

NOTES CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories 6 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Investments in controlled entities Receivables Property, plant and equipment Goodwill & intellectual property TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Interest bearing liabilities Provisions Other liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest bearing liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves 7 Accumulated losses TOTAL EQUITY	CONSOLIDATED ENTITY PARENT ENTITY 2009 $ 2008 $ 2009 $ 2008 $ 193,324 159,104 1,662,862 3,211,415 325,108 1,941,550 192,605 159,104 1,662,862 3,210,924 325,108 1,941,550
	2,015,290 5,478,073 2,014,571 5,477,582 - 32,543 3,080,721 509,417 - 15,000 3,025,491 509,417 536,699 32,543 3,054,158 - 623,536 15,000 2,993,300 -
	3,622,681 3,549,908 3,623,400 3,631,836
	5,637,971 9,027,981 5,637,971 9,109,418
	1,115,671 2,054,209 103,457 509,085 873,956 1,021,216 105,154 17,972 1,115,671 2,054,209 103,457 509,085 873,956 1,021,216 105,154 17,972
	3,782,422 2,018,298 3,782,422 2,018,298 338,069 372,534 338,069 372,534
	4,120,491 2,390,832 4,120,491 **2,390,832 **
	1,517,480 6,637,149 1,517,480 6,718,586
	21,221,006 1,301,524 20,615,323 1,233,138 21,221,006 1,301,524 20,615,323 1,233,138 (21,005,050) (15,211,312) (21,005,050) (15,129,875)
	1,517,480 6,637,149 1,517,480 6,718,586

The above balance sheet should be read in conjunction with the accompanying notes.

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A U T O M O T I V E T E C H N O L O G Y G R O U P L I M I T E D A N D C O N T R O L L E D E N T I T I E S

STATEMENT OF CHANGES IN EQUITY

AS AT 30 JUNE 2009

CONSOLIDATED ENTITY Balance at 1 July 2007 Net income recognised directly in equity - Revaluation increase of land and buildings, net of deferred tax Loss for the year Total recognised income and expenses for the year Issue of shares Group reorganisation Share issue expenses Conversion of convertible note Recognition of share-based payments Balance at 30 June 2008 Loss for the year Total recognised income and expenses for the year Issue of shares (note 7) Share issue expenses (note 7) Issuance of Convertible note Recognition of share-based payments Balance at 30 June 2009	Contributed equity Reserves Ordinary shares Convertible note equity Asset revaluation reserve Share option reserve Accumulated losses Total $ $ $ $ $ $ 4,594,988 305,475 689,248 - (9,754,153) (4,164,442) - - 142,840 - - 142,840 - - - - (5,457,159) (5,457,159)
	- - 142,840 - (5,457,159) (5,314,319) 15,425,643 - - - - 15,425,643 4,399 4,399 (609,707) - - - - (609,707) 1,200,000 (305,475) - - - 894,525 - - - 401,050 - 401,050
	20,615,323 - 832,088 401,050 (15,211,312) 6,637,149 - - - - (5,793,738) (5,793,738)
	- - - (5,793,738) (5,793,738) 621,090 - - - - 621,090 (15,407) - - - - (15,407) 10,886 10,886 - - 57,500 57,500
	21,221,006 10,886 832,088 458,550 (21,005,050) 1,517,480

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

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A U T O M O T I V E T E C H N O L O G Y G R O U P L I M I T E D A N D C O N T R O L L E D E N T I T I E S

STATEMENT OF CHANGES IN EQUITY

AS AT 30 JUNE 2009

PARENT ENTITY Balance at 30 June 2007 Net income recognised directly in equity - Revaluation increase of land and buildings, net of deferred tax Loss for the year Total recognised income and expenses for the year Issue of shares Group reorganisation Share issue expenses Conversion of Convertible note Recognition of share-based payments Balance at 30 June 2008 Loss for the year Total recognised income and expenses for the year Issue of shares (note 7) Share issue expenses (note 7) Issuance of Convertible Note Recognition of share-based payments Balance at 30 June 2009	Contributed equity Reserves Ordinary shares Convertible note equity Asset revaluation reserve Share option reserve Accumulated losses Total $ $ $ $ $ $ 4,594,988 305,475 689,248 - (9,607,903) (4,018,192) - - 142,840 - - 142,840 - - - - (5,521,972) (5,521,972)
	- - 142,840 - (5,521,972) (5,379,132) 15,425,643 - - - - 15,425,643 4,399 - - - - 4,399 (609,707) - - - - (609,707) 1,200,000 (305,475) - - - 894,525 - - - 401,050 - 401,050
	20,615,323 - 832,088 401,050 (15,129,875) 6,718,586 - - - (5,875,175) (5,875,175)
	- - - (5,875,175) (5,875,175) 621,090 - - - - 621,090 (15,407) - - - - (15,407) 10,886 - 10,886 - - 57,500 - 57,500
	21,221,006 10,886 832,088 458,550 (21,005,050) 1,517,480

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

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A U T O M O T I V E T E C H N O L O G Y G R O U P L I M I T E D A N D C O N T R O L L E D E N T I T I E S

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

NOTES CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest and finance lease charges paid Interest received Grants received Net cash flows used in operating activities 8 CASH FLOWS FROM INVESTING ACTIVITIES Advances to related parties Advances to non-related parties Placement of secured deposit Proceeds from sale of property, plant and equipment Payments for property, plant and equipment Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings – related parties Foreign exchange variance Proceeds from borrowings – insurance premium funding Proceeds from borrowings – others Repayment of borrowings – related parties Repayment of borrowings - hire purchase contracts Repayment of borrowings – insurance premium funding Proceeds from convertible note Proceeds from share capital raising Capital raising costs capitalised Net cash flows generated from financing activities Net decrease)/increase in cash held Net foreign exchange differences Cash at the beginning of the financial period Cash at the end of the financial period 6	CONSOLIDATED ENTITY PARENT ENTITY 2009 $ 2008 $ 2009 $ 2008 $ 487,402 (5,421,989) (180,080) 58,813 380,092 437,309 (6,386,695) (175,565) 48,465 326,450 487,402 (5,421,989) (180,080) 58,813 380,092 427,283 (6,314,392) (175,565) 48,463 326,450
	(4,675,762) (5,750,036) (4,675,762) (5,687,761)
	- - - (74,586) (17,543) (15,000) (17,543) (15,000) (60,000) (140,000) (60,000) (140,000) 10,944 76,856 10,944 76,531 (343,524) (345,688) (343,524) (324,661)
	(410,123) (423,832) (410,123) (477,716)
	1,333,083 1,278,452 1,333,083 1,278,452 - 132,352 - 132,328 82,208 133,552 82,208 133,552 88,518 - 88,518 - (225,000) - (225,000) (202,377) (183,937) (202,377) (183,936) (105,476) (207,315) (105,476) (207,315) 150,000 - 150,000 - 605,683 8,048,400 605,683 8,048,400 - (609,707) - (609,707)
	1,726,639 8,591,797 1,726,639 8,591,774
	(3,359,245) 2,417,929 (3,359,245) 2,426,297 (3,022) - (3,250) - 2,348,073 (69,856) 2,347,582 (78,715)
	(1,014,194) 2,348,073 (1,014,913) 2,347,582

The above cash flow statement should be read in conjunction with the accompanying notes.

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A U T O M O T I V E T E C H N O L O G Y G R O U P L I M I T E D A N D C O N T R O L L E D E N T I T I E S

NOTES TO AND FORMING PART OF THE FINANCIAL REPORT (Continued) 30 JUNE 2009

1. Summary of significant accounting policies

The financial report for the year ended 30 June 2009 have been prepared in accordance with Australian equivalents to the International Financial Reporting Standards (AIRFSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issuers Group Interpretations and the Corporations Act 2001 .

This financial report does not include notes of the type normally included in an annual financial report.

It is recommended that the preliminary final report be read in conjunction with the annual report for the year ended 30 June 2008 and considered together with any public announcements made by the Company during the year in accordance with the continuous disclosure obligations of the ASX listing rules.

The accounting policies adopted are consistent with those of the previous financial year. Certain comparatives for the year ended 30 June 2008 have been reclassified where necessary for consistency with current year disclosures.

2. Basis of preparation of financial statements

The financial report has been prepared on the historical cost basis except for land and buildings which have been measured at fair value.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.

Going concern

The consolidated entity has net assets of $1,517,480 as at 30 June 2009 (2008: $6,637,149) and incurred an operating loss of $5,793,738 (2008: $5,457,159) for the year ended 30 June 2009. The consolidated entity's ability to continue as a going concern and meet its debts and future commitments as and when they fall due is dependent on a number of factors, including:

• the completion of the issuance of Placement Shares and Entitlement Issue as further disclosed in note 9 to the financial report;

• the ability to raise sufficient working capital to ensure the continued implementation of the Company’s long term business plan; and

• delivery of existing and new products through the Group’s distribution network to generate sales revenues and positive cash flows.

The financial report has been prepared on a going concern basis. In arriving at this position the directors have had regard to the fact that the Company has, or in the directors’ opinion will have access to, sufficient cash to fund administrative and other committed expenditure for a period of not less than 12 months from the date of this report. Please refer to note 9 to the financial report for disclosure of funds raised subsequent to the balance sheet date.

Should the Group not achieve the matters set out above, there is significant uncertainty whether it will be able to continue as a going concern and therefore whether it will be able to pay its debts as and when they fall due and realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements.

3. Segment Information

The Group is operating in one segment, being the manufacture and distribution of the patented range of Sprintex® superchargers and Vee Two aftermarket and performance motorcycle accessories.

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NOTES TO AND FORMING PART OF THE ACCOUNTS (Continued)

30 JUNE 2009

4. Revenue and expenses Revenue Sales of goods and services Other revenue and gains/(losses) Interest income Convertible note interest forgiven (Loss)/Gain on disposal of property, plant and equipment Net exchange (loss)/gain Employee payments including benefits Salaries and wages Superannuation expense Annual leave expense Long service leave expense Other employment expense Less: Research & development staff costs Total employee payments Research & development expenses Research and development staff costs Legal costs Consultant costs Materials / services costs Travel expenses Total research & development expenses Depreciation and amortisation expenses Depreciation of property, plant and equipment Amortisation for leasehold improvements Total depreciation and amortisation Impairment loss Intercompany receivable Investment in controlled entities Total impairment loss Other expenses Capital raising expenses Share based payments Provision for inventory Total other expenses Finance costs Interest and finance charges paid Convertible note interest Total finance costs	CONSOLIDATED ENTITY 2009 $ 2008 $ 463,717 580,863	PARENT ENTITY 2009 $ 2008 $ 463,717 580,863
	58,813 - (4,219) (1,950) 48,465 194,924 20,415 132,352	58,813 - (3,455) (2,178) 48,463 194,924 20,415 132,328
	52,644 396,156	53,180 396,130
	2,042,098 2,195,596 180,540 178,145 3,588 (18,915) (1,021) (4,872) 199,098 28,886	2,042,098 2,195,596 180,540 178,145 3,588 (18,915) (1,021) (4,872) 199,098 28,886
	2,424,303 2,378,840 (609,671) (644,888)	2,424,303 2,378,840 (609,671) (644,888)
	1,814,632 1,733,952	1,814,632 1,733,952
	609,671 644,888 - 38,462 201,830 158,629 1,659,384 231,987 26,303 163,944	609,671 644,888 - 38,462 201,830 158,629 1,659,384 231,987 26,303 163,944
	2,497,188 1,237,910	2,497,188 1,237,910
	322,503 243,174 43,129 48,068	317,639 237,309 43,129 48,069
	365,632 291,242	360,768 285,378
	- - - -	- 74,586 86,837 -
	- -	86,837 74,586
	49,780 264,643 57,500 401,050 653,442 135,335	49,780 264,643 57,500 401,050 653,442 135,335
	760,722 801,028	760,722 801,028
	172,101 7,979 175,565 -	172,101 7,979 175,565 -
	180,080 175,565	180,080 175,565

5. Loss per share

The calculation of basic loss per share is based on the net loss from ordinary activities attributable to equity holders of the Company for the year of $5,793,738 (2008: $5,457,159) and the weighted average of 104,390,494 (2008: 62,173,045) ordinary shares in issue during the year.

Diluted loss per share amount for the year was the same as the basic loss per share as the share options outstanding as at 30 June 2009 had an anti-dilutive effect on the basic loss per share.

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NOTES TO AND FORMING PART OF THE ACCOUNTS (Continued)

30 JUNE 2009

6. Cash and cash equivalents Cash at bank Cash held on security deposit Cash on hand Reconciliation to Cash Flow Statement For the purpose of the Cash Flow Statement, cash and cash equivalents comprise the following at 30 June: Cash assets Cash held on security deposit Bank overdrafts	CONSOLIDATED ENTITY PARENT ENTITY 2009 $ 2008 $ 2009 $ 2008 $ (6,721) 200,000 45 3,070,415 140,000 1,000 (7,440) 200,000 45 3,069,924 140,000 1,000
	193,324 3,211,415 192,605 3,210,924
	193,324 3,211,415 192,605 3,210,924 (200,000) (140,000) (200,000) (140,000) (1,007,518) (723,342) (1,007,518) (723,342)
	(1,014,194) 2,348,073 (1,014,913) 2,347,582

Cash held on security deposit represents fixed deposits for a term of 6 months maturing on 22 December 2009. The deposits bear interest at a weighted average rate of 2.7% per annum. The deposits are pledged against the bank facilities granted to the Company.

7.

Contributed equity Paid up capital – ordinary shares Capital raising costs capitalised Ordinary shares Movements in ordinary share capital Balance at 1 July 2008 Issue of Placement Shares at $0.12 each (note i) Issuance of shares at $0.12 each (note ii) Less capital raising costs capitalised Contributions to equity net of transaction costs during the year Balance as at 30 June 2009	21,846,120 (625,114)	21,225,030 (609,707)	21,846,120 21,225,030 (625,114) (609,707)
	21,221,006	20,615,323	21,221,006 20,615,323
	Date Feb to Jun 2009 23 Mar 2009	Number of shares 102,944,000 5,150,750 25,000	$ 20,615,323 618,090 3,000 (15,407) 605,683 21,221,006
		108,119,750

Holders of ordinary shares are entitled to receive dividends from time to time and are entitled to one vote per share at shareholders meetings. In the event of a winding up of the Company, ordinary shareholders rank after all other shareholders and creditors, and are fully entitled to any surplus proceeds of liquidation.

(i)

Placement of 8,500,000 ordinary shares at an offer price of $0.12 per share

On 11 February 2009, the Company announced its intention to issue up to 8,500,000 shares at an offer price of $0.12 per share to related parties and other sophisticated investors for working capital. The structure of the placement was a subscription of one ordinary shares of the Company for $0.12 per share (“Placement Shares”) and purchase of one ordinary share from CMIH Enterprises Pty Limited, a controlled entity of Mr Anthony Hamilton for $0.05 per share. As of the date of this report, 5,150,750 Placement Shares has been allotted. A further of 3,349,250 shares shall be allotted to shareholders upon the approval from shareholders. Related subscription monies in total of $401,910 were recorded as unsecured loans to the Company

(ii) Shares at $0.12 per share

Pursuant to a board resolution dated 20 February 2009, 25,000 ordinary shares at $0.12 per share were issued on 23 March 2009 to a shareholder of the Company in consideration of the shareholder granting an unsecured loan of $100,000 to the Company on 30 December 2008. The loan was fully repaid on 20 January 2009.

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NOTES TO AND FORMING PART OF THE ACCOUNTS (Continued)

30 JUNE 2009

8. Cash flow statement reconciliation (a) Reconciliation of cash flows from operating activities to operating loss after income tax Operating loss after income tax Add non-cash items: Share based payments Convertible note imputed interest over coupon interest Depreciation and amortisation Impairment loss Net loss/(gain) on disposal of property, plant and equipment Exchange difference Changes in assets and liabilities Decrease/(increase) in trade and other receivables Decrease/(increase) in inventories Increase/(decrease) in trade and other payables Decrease in provision for warranty Increase/(decrease) in provision for employee entitlements Net cash flows used in operating activities

CONSOLIDATED ENTITY PARENT ENTITY 2009 $ 2008 $ 2009 $ 2008 $ (5,793,738) (5,457,159) (5,875,175) (5,521,970) 57,500 401,050 57,500 401,050 2,894 (194,924) 2,894 (194,924) 365,632 291,242 360,768 285,378 - - 86,837 74,586 4,219 (20,415) 3,455 (20,415) 3,022 (132,352) 3,250 (132,328) 166,003 (132,770) 166,003 (141,659) 278,688 (237,881) 278,688 (237,881) 243,516 (213,252) 243,516 (184,890) (6,161) (26,021) (6,161) (10,390) 2,663 (27,554) 2,663 (4,318)

(4,675,762) (5,750,036) (4,675,762) (5,687,761)

(b) Non-cash financing and investing activities

During the year ended 30 June 2009, the Group and the Company acquired $92,500 of equipment under finance leases. This acquisition will be reflected in the cash flow statement over the term of the finance lease via lease repayments.

9. Events occurring after the balance sheet date

(a) As disclosed in the Company’s announcement dated 13 August 2009, the Company has received and accepted the resignation of Mr Anthony Hamilton as Executive Director- Operations effective 31 August 2009. The Board has agreed terms with Mr Hamilton who will remain as a non-executive director until no later than 31 October 2009.

(b) As disclosed in more detail in the Company’s announcement dated 26 August 2009, the Company entered into a Placement and Underwriting Agreement with an existing shareholder to raise up to $6,255,988. The Underwriting relates to an Entitlement Offer of a one for one non-renounceable rights issue of fully paid ordinary shares in the Company at an issue price of $0.05 per share (“Entitlement Issue”) to raise up to approximately $5,830,988. The existing shareholder will subscribe 8,500,000 placement shares at $0.05 per share and will underwrite up to 20 million fully paid ordinary shares at $0.05 per share of the shortfall of the Entitlement Issue.

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