Essa Australia Limited - ASX · Essa Australia Limited Head Office Level 1, 63-69 Abernethy Road...

Essa Australia Limited Head Office Level 1, 63-69 Abernethy Road Belmont WA 6104 PO Box 362 Belmont WA 6984 AUSTRALIA Production 8 Yelland Way Bassendean WA 6054 AUSTRALIA t +61 8 9475 3000 f +61 8 9477 3544 e [email protected] w www.essa.com.au ABN 59 007 944 569

ASX Announcements Office 28 February 2011

APPENDIX 4D AND HALF YEAR REPORT ENDED 31 DECEMBER 2010 Please find attached herewith the Appendix 4D and Half Year Report for the six months ended 31 December 2010.

Bert Blekkenhorst Company secretary

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Appendix 4D Half yearly report

+ See chapter 19 for defined terms. Appendix 4D Page 1

Appendix 4D

Half yearly report Name of entity

Essa Australia Limited

ABN or equivalent company reference Half year ended (‘current period’)

59 007 944 569 31 December 2010

For announcement to the market Extracts from this report for announcement to the market. $A'000

Revenues from ordinary activities

up 52% to 15,629

Profit (loss) from ordinary activities after tax attributable to members

up to 1,518

Net profit (loss) for the period attributable to members up to 1,518

Dividends Amount per security Franked amount per security

Interim dividend Nil Nil

Previous corresponding period Nil Nil

+Record date for determining entitlements to the dividend

Not applicable

Brief explanation of any of the figures reported above and short details of any other item(s) of importance not previously released to the market: Overall there has been an increase in sales of 52% from $10.249 million in the December 2009 half year to $15.629 million for the half year ended 31 December 2010, excluding sales from discontinued operations. Revenue from the sampling and sample preparation equipment increased by 58% from $9.006 million to $14.291 million excluding discontinued operations over the same period. Sales revenue for STACE was $1.541 million in the half year compared with $1.243 million for the corresponding period last year. A net profit after income tax expense attributable to members of $1.518 million for the half year ended 31 December 2010 was recorded. This represented earnings per share of 2.87 cents.

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NTA backing

Current period

Previous corresponding period

Net tangible asset backing per +ordinary security $0.38

$0.31

Control gained over entities having material effect

Name of entity (or group of entities)

Not applicable

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the

date in the current period on which control was +acquired

Date from which such profit has been calculated

Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period

Loss of control of entities having material effect

Name of entity (or group of entities)

Not applicable

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the current period to the date of loss of control

Date to which the profit (loss) in item 14.2 has been calculated

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period

Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from sale of interest leading to loss of control

Dividends (in the case of a trust, distributions)

Date the dividend (distribution) is payable Not applicable +Record date to determine entitlements to the dividend (distribution) (ie, on the basis of proper instruments of transfer received by 5.00

pm if +securities are not +CHESS approved, or security holding balances established by 5.00 pm or such later time permitted by SCH

Business Rules if +securities are +CHESS approved)

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Amount per security

Amount per security

Franked amount per security at

% tax

Amount per security of

foreign source dividend

Interim dividend: Current year

Nil Nil Nil

Previous year Nil Nil Nil

Interim dividend (distribution) on all securities

Current period $A'000 Previous corresponding period - $A'000

+Ordinary securities (each class separately)

Nil Nil

Preference +securities (each class separately)

Other equity instruments (each class separately)

Total

Nil Nil

The +dividend or distribution plans shown below are in operation.

Not applicable

The last date(s) for receipt of election notices for the +dividend or distribution plans

Any other disclosures in relation to dividends (distributions). (For half yearly reports, provide details in accordance with paragraph 7.5(d) of AASB 1029 Interim Financial Reporting)

Details of aggregate share of profits (losses) of associates and joint venture entities

Group’s share of associates’ and joint venture entities’:

Current period $A'000 Previous corresponding period - $A'000

Profit (loss) from ordinary activities before tax 73 129

Income tax on ordinary activities - -

Profit (loss) from ordinary activities after tax 73 129

Extraordinary items net of tax

Net profit (loss) 73 129

Share of net profit (loss) of associates and joint venture entities

73 129

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Material interests in entities which are not controlled entities The economic entity has an interest (that is material to it) in the following entities. (If the interest was acquired or disposed of during either the current or previous corresponding period, indicate date of acquisition (“from dd/mm/yy”) or disposal (“to dd/mm/yy”).)

Name of entity Percentage of ownership interest held at end of period or date of disposal

Contribution to net profit (loss)

Equity accounted associates and joint venture entities

Current period

Previous corresponding period

Current period $A’000

Previous corresponding period - $A’000

Labtech Africa (Pty) Ltd 50% 50% 73 129 Total

73

129

Other material interests

Total

73

129

Foreign Entities For foreign entities, which set of accounting standards is used in compiling the report (e.g. International Accounting Standards) International Accounting Standards

Audit Dispute or Qualification For all entities, if the +accounts are subject to audit dispute or qualification, a description of the dispute or qualification should follow: Nil

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ESSA AUSTRALIA LIMITED ACN 007 944 569

AND CONTROLLED ENTITIES

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED

31 DECEMBER 2010

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Essa Australia Limited ABN 59 007 944 569 and Controlled Entities

Page 1

DIRECTORS’ REPORT

Your directors submit the financial report of the economic entity for the half year ended 31 December 2010.

Directors

The names of directors who held office during or since the end of the half year:

Mr Darryl Stevens

Mr Geoffrey Donohue

Mr Graeme Beissel

Mr Gijsbertus Blekkenhorst

Review of Operations Overall there has been an increase in sales of 52% from $10.249 million in the December 2009 half year to $15.629 million for the half year ended 31 December 2010, excluding sales from discontinued operations. Revenue from the sampling and sample preparation equipment increased by 58% from $9.006 million to $14.291 million excluding discontinued operations over the same period. Sales revenue for STACE was $1.541 million in the half year compared with $1.243 million for the corresponding period last year. A net profit after income tax expense attributable to members of $1.518 million for the half year ended 31 December 2010 was recorded. This represented earnings per share of 2.87 cents. Rounding of Amounts

The economic entity has applied the relief available to it in ASIC Class Order 98/100 and accordingly certain amounts in the financial report and the directors’ report have been rounded off to the nearest $1,000.

Auditor’s Declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 2 of the Interim Financial Report for the half year ended 31 December 2010.

This report is signed in accordance with a resolution of the Board of Directors.

______________________

Darryl Stevens

Director

Dated this 28th day of February 2011 For

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Moore Stephens ABN 75 368 525 284 Level 3, 12 St Georges Terrace, Perth, Western Australia, 6000 Telephone: +61 8 9225 5355 Facsimile: +61 8 9225 6181 Email: [email protected] Web: www.moorestephens.com.au A member of Moore Stephens International Limited Group of Independent Firms Liability limited by a scheme approved under Professional Standards Legislation

2

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

TO THE DIRECTORS OF ESSA AUSTRALIA LIMITED

As lead auditor for the review of Essa Australia Limited and its controlled entities for the half year ended 31 December 2010, I declare that, to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review, and

(b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Essa Australia Limited and its controlled entities during the period.

Suan-Lee Tan Moore Stephens Partner Chartered Accountants Dated in Perth, this 28th day of February 2011.

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STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Economic Entity

Note31.12.2010

$000 31.12.2009

$000

Sales revenue 2(a) 15,629 10,249

Cost of sales (9,222) (6,589)

Gross profit 6,407 3,660

Other revenue 2(b) 265 213

Operations and logistics (366) (262)

Engineering and R & D (590) (570)

Marketing (446) (548)

Administration (2,720) (2,070)

Depreciation and amortisation expenses (355) (406)

Borrowing costs expense (8) (12)

Profit before income tax expense 2,187 5

Income tax expense 2(d) (649) (178)

Profit from continuing operations 1,538 (173)

Loss from discontinued operations 3 - (514)

Profit/(Loss) for the period 1,538 (687)

Other comprehensive income

Translation of foreign controlled operations (32) (14)

Total comprehensive (loss) for the period 1,506 (701)

Profit/loss attributable to:

Members of the parent entity 1,518 (662)

Non-controlling interest 20 (25)

1,538 (687)

Total comprehensive income attributable to:

Members of the parent entity 1,486 (676)

Non-controlling interest 20 (25)

1,506 (701)

Overall Operations:

Basic earnings per share - non weighted (cents per share) 2.87 (1.27)

Basic earnings per share – weighted (cents per share) 2.90 (1.27)

Diluted earnings per share (cents per share) 2.87 (1.27)

Diluted earnings per share on continuing operations – weighted (cents per share) 2.87 (0.28)

The accompanying notes form part of these financial statements.

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STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2010

Economic Entity

Note31.12.2010

$000 30.06.2010

$000

ASSETS

CURRENT ASSETS

Cash and cash equivalents 9,931 8,793

Trade and other receivables 7,683 6,939

Inventories 6,180 5,737

TOTAL CURRENT ASSETS 23,794 21,469

NON-CURRENT ASSETS

Investments accounted for using the equity method 231 440

Property, plant and equipment 1,017 1,313

Deferred tax assets 799 695

Intangible assets 5 1,103 1,108

TOTAL NON-CURRENT ASSETS 3,150 3,556

TOTAL ASSETS 26,944 25,025

CURRENT LIABILITIES

Trade and other payables 3,154 2,566

Short-term borrowings 85 108

Current tax liabilities 926 462

Short-term provisions 1,095 1,129

TOTAL CURRENT LIABILITIES 5,260 4,265

NON-CURRENT LIABILITIES

Long-term borrowings 64 130

Provisions 512 423

TOTAL NON-CURRENT LIABILITIES 576 553

TOTAL LIABILITIES 5,836 4818

NET ASSETS 21,108 20,207

EQUITY

Issued capital 6 9,978 9,668

Foreign currency translation reserve (38) (5)

Retained earnings 10,685 10,081

Parent interest 20,625 19,744

Non-controlling interest 483 463

TOTAL EQUITY 21,108 20,207


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2009

$000 $000 $000 $000 $000

Note

Share Capital

Retained Profits

Foreign Exchange

Translation Reserve

Non-controlling

Interest Total Ordinary

Balance at 1.7.2009 9,668 8,452, 9 586 18,715

Shares issued during the period - - -

Profit attributable to members of parent entity (662) (662)

Profit attributable to minority shareholders (25) (25)

Adjustments from translation of foreign controlled entities (14) (14)

Sub-total 9,668 7,790 (5) 561 18,014

Dividends paid or provided for - (38) (38)

Balance at 31.12.2009 9,668 7,790 (5) 523 17,976

Balance at 1.7.2010 9,668 10,081, (5) 463 20,207

Shares issued during the period 310 - 310

Profit attributable to members of parent entity 1,518 1,518

Profit attributable to minority shareholders 20 20

Adjustments from translation of foreign controlled entities (33) (33)

Sub-total 9,978 11,599 (38) 483 22,022

Dividends paid or provided for (914) (914)

Balance at 31.12.2010 9,978 10,685 (38) 483 21,108


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STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Economic Entity

31.12.2010 $000

31.12.2009 $000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 15,247 10,028

Other income 8 10

Payments to suppliers and employees (13,539) (10,110)

Dividends received 282 212

Interest received 184 65

Borrowing costs (8) (12)

Income tax received/(paid) (289) 922

Net cash provided by/(used in) operating activities 1,885 1,115

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of non-current assets - -

Proceeds from sale of investments - -

Purchase of non-current assets (54) (153)

Net cash used in investing activities (54) (153)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares 310 -

Proceeds from borrowings - -

Repayment of borrowings (89) (1,536)

Dividends paid (914) (38)

Net cash provided by/(used in) financing activities (693) (1,574)

Net increase/(decrease) in cash held 1,138 (612)

Cash at beginning of period 8,793 7,209

Cash at end of period 9,931 6,597


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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

NOTE 1: BASIS OF PREPARATION

These general purpose financial statements for the interim half-year reporting period ended 31 December 2010 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Essa Australia Limited and its controlled entities (the Group). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2010, together with any public announcements made during the half-year.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements.

NOTE 2: PROFIT FROM ORDINARY ACTIVITIES Economic Entity

31.12.2010

$000 31.12.2009

$000

The following revenue and expense items are relevant in explaining the financial performance for the interim period:

(a) Operating Revenue

Sales revenue 15,629 10,249

(b) Other Revenue

Share of profit of associate companies 73 129

Sundry income 192 84

265 213

(c) Administration Expenses

Employee remuneration and on-costs 1,098 1,244

Insurance 96 104

Occupancy costs 536 590

(d) Income Tax Expense

Current tax expense 649 177

Under/(over) provision prior periods - 1

649 178

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NOTE 3: DISCONTINUED OPERATIONS Economic Entity

31.12.2010

$000 31.12.2009

$000

Effective 31 December 2009 the Board resolved to discontinue its European operations, Essa Europe GmbH.

Financial information relating to the discontinued operation is set out below:

The financial performance of the discontinued operation which is included in profit/(loss) from discontinued operations per the Statement of Comprehensive Income is as follows:

Revenue - 542

Expenses - (1,056)

(Loss) before income tax - (514)

Income tax expense - -

(Loss) after tax attributable to the discontinued operations - (514)

NOTE 4: DIVIDENDS

Dividends paid to minority equity interest - 38

Declared final fully franked ordinary dividend of 1.75 (2009:0) cents per share franked at the tax rate of 30% (2009:30%) 914 -

31.12.2010

$000 30.6.2010

$000

NOTE 5: INTANGIBLE ASSETS

Goodwill at cost 1,338 1,338

Impairment losses (328) (328)

1,010 1,010

Patents, trademarks and licences at cost 200 200

Accumulated amortisation (107) (102)

93 98

Total Intangibles 1,103 1,108

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NOTE 6: CONTRIBUTED EQUITY

31.12.2010

$000 30.6.2010

$000

Issued & paid up capital

52,954,814 (2009: 52,264,814) fully paid ordinary shares 9,668 9,668

a) Ordinary Shares

At the beginning of the financial period 9,668 9,668

690,000 fully paid ordinary shares issued during the half year 310 -

Transaction costs - -

Balance at end of financial period 9,978 9,668

b) Number of Ordinary Shares No. No.

At the beginning of the financial period 52,264,814 52,264,814

Shares issued pursuant to the exercise of options by Mr. Darryl Stevens and Mr. Geoffrey Donohue. Shares issued on 6 December 2010. 690,000 -

Balance at end of financial period 52,954,814 52,264,814

NOTE 7: OPERATING SEGMENTS

Segment Information

Identification of reportable segments

The group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The Group is managed primarily on the basis of product category and service offerings since the diversification of the Group’s operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

• the products sold and/or services provided by the segment;

• the manufacturing process;

• the type or class of customer for the products or service;

• the distribution method; and

• external regulatory requirements.

Types of products and services by segment

(i) Maritime repair and testng

This segment provides specialist engineering services to the maritime, energy and resources industry.

Specific disciplines include:

System design Sales and supply Fabrication, installation and commissioning Marine and mechanical overhaul Defect rectification and routine maintenance

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NOTE 7: OPERATING SEGMENTS

Hyperbaric systems Diving/breathing, oxygen, air, and mixed gas systems Medium and high pressure air/gas compressors and boosters Fluid transfer pumps and accessories.

(ii) Sampling and sample preparation

This segment is responsible for the design, manufacture and distribution of sampling and sample preparation equipment for the international minerals and mining industries.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

Inter-segment transactions

An internally determined transfer price is set for all inter-entity sales. This price is evaluated annually and is based on what would be realised in the event the sale was made to an external party at arm’s-length. All such transactions are eliminated on consolidation for the Groups financial statements.

Inter-segment loans payable and receivable are initially recognised at the consideration received net of transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial statements.

Segment assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments.

Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

Unallocated items

The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• derivatives;

• net gains on disposal of available-for-sale investments;

• impairment of assets and other non-recurring items of revenue or expense;

• income tax expense;

• deferred tax assets and liabilities; and

• discontinued operations.

Comparative information

This is the first reporting period in which AASB 8: Operating Segments has been adopted. Comparative information has been stated to conform to the requirements of the Standard.

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NOTE 7: OPERATING STATEMETS (CONT)

Maritime repair and testing

Sampling and sample preparation

Total

$ $ $

Six months ended 31.12.2010

Revenue

External sales 1,541 14,291 15,832

Inter-segment sales

Other revenue 8 8

Interest revenue 184 184

Total segment revenue 1,541 14,483 16,024

Reconciliation of segment revenue to group revenue

Inter-segment elimination (63) (67) (130)

Total group revenue 1,478, 14,416 15,894

Segment net profit before tax 49 2,428 2,477

Reconciliation of segment result to group net profit/(loss) before tax

Amounts not included in segment result but reviewed by the Board:

• Depreciation and amortisation (100) (255) (355)

• Equity accounted profits of associates and JVs 73 73

Unallocated items:

• Corporate charges

• Finance costs (8)

• Other

Net profit before tax from continuing operations 2,187

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Total

$ $ $

Six months ended 31.12.2009

Revenue

External sales 1,243 9,006 10,249

Inter-segment sales -

Other revenue 19 19

Interest revenue - 65 65

Total segment revenue 1,243 9,090 10,333

Reconciliation of segment revenue to group revenue

Inter-segment elimination

Total group revenue 1,243 9,090 10,333

Segment net profit before tax (8) 302 294

Reconciliation of segment result to group net profit/(loss) before tax

Amounts not included in segment result but reviewed by the Board:

• Depreciation and amortisation (88) (318) (406)

• Equity accounted profits of associates and JVs 129 129

• Impairment of property plant and equipment

Unallocated items:

• Corporate charges

• Finance costs (12)

• Net gain on disposal of available-for-sale investments

• Other

Net profit before tax from continuing operations 5

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(ii) Segment assets



Total

$ $ $

31.12.2010

Segment assets 2,670 23,573 26,243

Segment asset increases for the period:

• capital expenditure 10 44 54

• acquisitions

10 44 54

Included in segment assets are:

• Equity accounted associates and joint ventures 231 231

Reconciliation of segment assets to group assets

Inter-segment eliminations (98)

Unallocated assets:

• Derivative assets

• Deferred tax assets 799

Total group assets from continuing operations 26,944

30.6.2010

Segment assets 2,444 21,983 24,427

Segment asset increases for the period:

• capital expenditure 169 81 250

• acquisitions

169 81 250

Included in segment assets are:

• Equity accounted associates and joint ventures 440 440

Reconciliation of segment assets to group assets

Inter-segment eliminations (96)

Unallocated assets:

• Deferred tax assets 695

Total group assets from continuing operations 25,025

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(iii) Segment liabilities



Total

$ $ $

31.12.2010

Segment liabilities 739 5,097 5,836

Reconciliation of segment liabilities to group liabilities

Inter-segment eliminations

Unallocated liabilities:

• Deferred tax liabilities

• Other liabilities

Total liabilities from continuing operations 5,836

30.6.2010

Segment liabilities 592 4226 4,818

Reconciliation of segment liabilities to group liabilities

Inter-segment eliminations

Unallocated liabilities:

• Deferred tax liabilities

• Other liabilities

Total liabilities from continuing operations 4,818

(v) Revenue by geographical region

Revenue attributable to external customers is disclosed below, based on the location of the external customer:

For the six months ended

31.12.2010

For the six months ended

31.12.2009

$ $

Australia 14,013 9,863

Brazil 1,881 599

Total revenue 15,894 10,462

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(vi) Assets by geographical region

The location of segment assets is disclosed below by geographical location of the assets:

Balance as at 31.12.2010

Balance as at 30.6.2010

$ $

Australia 25,036 23,405

Brazil 1,908 1,620

Total Assets 26,944 25,025

(vii) Major customers

The Group has a number of customers to which it provides both products and services. The Group supplies a single external customer in the sampling and sample preparation segment who accounts for 12% of external revenue (2009: 9%). The next most significant client accounts for 8% (2009: 7%) of external revenue.

NOTE 8: CONTINGENT LIABILITIES

There are no contingent liabilities at the date of this report.

NOTE 9: EVENTS SUBSEQUENT TO REPORTING DATE

Other than matters relating to the off-market takeover offer by FLSmidth Pty Limited and advised to ASX, including the declaration of a 12 cents per share dividend declared in accordance with the First Supplementary Target’s Statement dated 7 February 2011 (total value of dividend: $6,354,578) there are no material subsequent events at the date of this report.

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DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 3 to 15 are in accordance with the Corporations Act 2001, including:

a. complying with Accounting Standard AASB 134: Interim Financial

Reporting; and

b. giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half year ended on that date.

2. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

_______________________

Darryl Stevens

Director

Dated this 28th day of February 2011.

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF ESSA AUSTRALIA LIMITED Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Essa Australia Limited and controlled entities (the consolidated entity) which comprises the statement of financial position as at 31 December 2010, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the half-year ended on that date, the accounting policies and other selected explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report The directors of Essa Australia Limited are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that it is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410: “Review of a Financial Report Performed by the Independent Auditor of the Entity”, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporation Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134: “Interim Financial Reporting” and the Corporations Regulations 2001. As the auditor of Essa Australia Limited and its controlled entities, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the financial report. A review of the half-year financial report consists of making enquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Matters Relating to the Electronic Presentation of the Audited Financial Report This review report relates to the financial report of the consolidated entity for the half-year ended 31 December 2010 included on the website of Essa Australia Limited. The directors of the company are responsible for the integrity of the website and we have not been engaged to report on its integrity. This review report refers only to the half-year financial report identified above and it does not provide an opinion on any other information which may have been hyperlinked to or from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications, they are advised to refer to the hard copy of the reviewed financial report to confirm the information included in the reviewed financial report presented on the company’s website Independence In conducting our review, we have complied with the applicable independence requirements of the Corporations Act 2001.

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Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Essa Australia Limited and its controlled entities is not in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and

(ii) complying with Accounting Standard AASB 134: “Interim Financial Reporting”

and the Corporations Regulations 2001.

Suan-Lee Tan Moore Stephens Partner Chartered Accountants

Dated in Perth, this 28th day of February 2011.

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Essa Australia Limited - ASX · Essa Australia Limited Head Office Level 1, 63-69 Abernethy Road...

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