PLENTEX LIMITED A.C.N FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

Transcription

1 PLENTEX LIMITED A.C.N FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2010

2 PLENTEX LIMITED Contents Directors Report... 2 Independence Declaration... 8 Statement of Comprehensive Income For the Half Year Ended 31 December Statement of Financial Position as at 31 December Statement of Changes in Equity 11 Statement of Cash Flows For the Half Year Ended 31 December Notes to and Forming Part of the Financial Statements For the Half Year Ended 31 December Directors' Declaration Independent Review Report... 21

3 PLENTEX LIMITED Directors Report The Directors of Plentex Limited ( the Company ) present their report together with the financial report of the Company and its controlled entities ( the consolidated entity ) for the 6 months ended 31 December 2010 and the auditors review report thereon, which should be read in conjunction with the continuous disclosure obligations arising under the Corporations Act DIRECTORS The Directors of the Company in office at any time during or since the end of the half-year are: PETER C STREADER Executive Chairman Mr. Streader is 71 years of age. Mr. Streader has had a legal and executive management career spanning some 50 years practising as a solicitor, barrister and in house corporate counsel and company executive. He spent approximately 10 years, ultimately holding the position of General Counsel and Company Secretary of the Australian subsidiary of one of the world s leading engineering and construction contractors, USA based Fluor Corporation and played a significant role in the negotiation and execution of a number of major resource development projects in Australia including the initial Dampier to Perth Natural Gasline. Mr. Streader has been involved in the formation, development and management of a number of public and private companies operating in the mining and petroleum exploration sectors, both domestically and internationally. He was responsible for the relisting on the ASX of Planet Resource Group NL and later Australian Gold Development NL. He was a founding Director of Drillsearch NL (now Drillsearch Energy Limited) and Executive Director of Diamin Resources NL (now known as Senetas Corporation Limited) and served as a Non Executive Director of Senetas until February Mr. Streader was appointed to the Board of Plenty River Corporation Limited (now Plentex Limited) in January 1998 holding initially the position of Executive Director and later Executive Chairman. Mr. Streader has had extensive experience in major project development and played a leading role in Plenty River Corporation Limited s attempts in conjunction with a number of major international companies to establish a world scale ammonia/urea plant on the Burrup Peninsula of Western Australia. He holds a Bachelor of Law (Melbourne University) and has been a Fellow of the Australian Institute of Company Directors for the past 15 years. DANNY GOLDMAN Managing Director Mr. Goldman is 47 years of age. Mr. Goldman brings a wealth of corporate experience, with extensive operational and financial expertise. He is an executive of Blue Sundial Pty. Ltd., a private Victorian company under acquisition by Plentex. Prior to entering the renewable energy industry, Mr. Goldman was the General Manager of Electrical, Furniture & General Merchandise at Myer Stores Ltd., then a division of Coles Myer Limited. Previously Mr. Goldman was the Chief Financial Officer and Company Secretary of Country Road Limited, an ASX listed apparel retailer and wholesaler. He has also held various operational, financial and accounting roles in South Africa within Woolworths Holdings Limited and Ernst & Young Chartered Accountants. 2

4 PLENTEX LIMITED Directors Report Mr. Goldman is a qualified Chartered Accountant, with a Bachelor of Commerce Honours degree in Accounting Science from the University of South Africa and a Bachelor of Commerce from the University of Cape Town. He was appointed to the Board of Plentex in January DAVID VINSON Executive Director Operations Mr. Vinson is 53 years of age. Mr. Vinson is a seasoned executive in the Australian renewable energy industry, most recently with Blue Sundial Pty. Ltd. Mr. Vinson has been instrumental in launching and operating numerous companies in the biofuel, chemical, marketing services and recycling industries, including managing the construction and operations of one of Australia s first biodiesel plants which operates as a division of The Victor Smorgon Group. Mr. Vinson graduated from Purdue University, USA, with a degree in Chemical Engineering and has wide experience in the design, construction and operations of chemical and polymer facilities. He was appointed to the Board of Plentex in January CHRISTOPHER L ROBERTS Non-Executive Director Mr. Roberts is 62 years of age. Mr. Roberts is a geologist with over 35 years experience in mineral exploration throughout Australia initially with BHP but subsequently in senior positions with a number of other companies. He was a Non-Executive Director of Perseverance Corporation Limited until he resigned in February 2008 following the acquisition of Perseverance by Canadian based Northgate Minerals Corporation in February Prior to becoming a Non-Executive Director of Perseverance, Mr. Roberts served as Chief Geologist and later Exploration and Development Director of the company and is credited with the early significant exploration successes at the company s Fosterville Mine in Victoria. Mr. Roberts was also a Non-Executive Director of Sedimentary Holdings Ltd., during the period of the initial exploration success of the Cracow Gold Project in Central Queensland. He resigned in August 2007 as Exploration Director of Republic Gold Limited of which he was a co-founder but remained as the company s Chief Geologist until his resignation on 1 September He is a Corporate Member of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Geoscientists. In late 2005 he was appointed to JORC (the Joint Ore Reserves Committee) and remains an active member of that Committee. He was appointed to the Board of Plentex in August DARWIN (RIC) CAMPI Non-Executive Director Mr. Campi is 81 years of age. Mr. Campi is a Fellow of the Australasian Institute of Mining and Metallurgy with over 50 years experience in mineral exploration, development and production in Australia and overseas. He assisted in the formation of Metals Exploration Limited (initially as Metals Exploration NL) in 1958 which subsequently became one of Australia s most successful exploration and mining companies. 3

5 PLENTEX LIMITED Directors Report (Cont d) From 1960 to 1973 he was a senior partner in R. Hare and Associates, mining and geological consultants, which provided management, mining and geological services to Metals Exploration Limited. Mr. Campi was appointed General Manager of Metals Exploration Limited in 1962 and later was an Executive Director until his retirement in 1986 from that Company following its takeover by Bond Corporation Limited. During his association with Metals Exploration Limited he was directly involved with the development and mining of ore deposits throughout Australia, Philippines, Malaysia and Thailand. He was Co-founder and Managing Director of Great Fingall Mining Company NL from 1986 to 1989 and then Managing Director of Triarc Corporation Ltd. from 1989 until his retirement in He has been associated with the discovery and mining of a wide range of minerals in Australia and Asia. Mr. Campi has been a Director of Plentex Limited since November He is a Fellow of the Australasian Institute of Mining and Metallurgy. INFORMATION ON COMPANY SECRETARY DAVID J STREADER Mr. Streader graduated as a Bachelor of Science in 1992 and subsequently completed a Graduate Diploma in Applied Finance & Investment at the Securities Institute of Australia and later a Diploma of Financial Planning. From 1993 to November 2002 he held various roles including that of Company Secretary and Director of a Melbourne based Licensed Securities Dealer which provided financial planning and investment banking services to a range of corporate and high net worth investors. Mr. Streader is a Certified Financial Planner and currently is a partner in a Mornington Peninsula based accounting and financial planning business. He has a deep interest in the resource sector and has a well developed understanding of ASX compliance requirements and proceedings. Mr. Streader is a Fellow of the Financial Services Institute of Australasia and a CFP Member of the Financial Planning Association. RESULTS OF OPERATIONS The operating loss of the consolidated entity after income tax amounted to (312,964), (2009: loss of 349,461). 4

6 PLENTEX LIMITED Directors Report (Cont d) REVIEW OF OPERATIONS During the period under review, the Company s operations were focussed on the following activities: Algae Oil Project Acquisition of Blue Sundial Pty Ltd Continued discussions with Blue Sundial Pty. Ltd. ( Blue Sundial ) resulted in a new agreement dated 17 June 2010 being executed with the shareholders of Blue Sundial, pursuant to which the Company agreed to purchase all the issued shares of Blue Sundial, other than the shares in Blue Sundial which it then held as a result of the transaction announced to the ASX on 16 October 2009 and previously disclosed in its financial report for the year ended 30 June Blue Sundial has developed a proposal for establishing an algae based project for the production of algae oil and biomass. Through this transaction and subject to the successful implementation of the project, Plentex aims to become a supplier to the biodiesel and other potential renewable fuel industries as well as supplying algae biomass for the production of renewable power and animal feed. Blue Sundial has developed its algae project proposal based on securing access to proprietary algae extraction technology, in conjunction with an initial strategic site location in Victoria which provides access to water and nutrients required for algae growth. Completion of the new Sale of Shares Agreement ( SSA ) is subject to a number of conditions precedent including mutual due diligence, securing access to technology and facilities on terms acceptable to the Company, raising capital to fund the project and obtaining shareholder and regulatory approvals enabling the Company s securities to be reinstated to official quotation. Under the terms of the new SSA, subject to the conditions precent being met, Plentex has agreed as consideration for the purchase of the shares in Blue Sundial which it does not own, to issue 8,500,000 fully paid ordinary shares (on a post consolidation basis) and 32,500,000 performance shares, again on a post consolidation basis, to the Blue Sundial Vendors. The performance shares are to be divided into three classes (A, B and C) with separate sequential milestones which, if met, will trigger their conversion (on a 1 for 1 basis) to fully paid ordinary shares. Prior to their conversion, the performance shares do not carry voting rights. In the event that a milestone is not met by the due date the relevant performance shares will lapse. The milestones relate to the successful construction and operation of a Demonstration Plant for the production of algae oil and biomass and at a later date a Commercial Scale Plant. In conjunction with the SSA, the Company agreed to subscribe for two tranches of convertible notes in Blue Sundial, each of 100,000, to provide working capital to Blue Sundial so that it could more rapidly advance establishing its algae project pending completion of the SSA at which time Blue Sundial will become a wholly owned subsidiary of Plentex. The initial tranche was subscribed for prior to 30 June 2010 with subscription of the second tranche being conditional upon Plentex raising not less than 250,000 by way of a pro rata offer to the Company s shareholders planned for later in the year. The Company lodged a Prospectus with the Australian Securities and Investments Commission on 23 August 2010 in respect of a non-renounceable pro rata rights issue of one (1) share for every five (5) shares held at an issue price of three and a half cents (0.035), together with one (1) free attaching option for every one (1) new share successfully subscribed for ( the Rights Issue ). Each new option being exercisable at three and a half cents (0.35) between 1 December 2010 and 31 March The Rights Issue closed undersubscribed on 17 September 2010 raising 136,831 before costs of the offer. Funds raised by the issue will be used to carry out due diligence, obtain an independent expert s report and do other things necessary to complete the acquisition of shares in Blue Sundial. Under the terms of the Prospectus, the Directors of the Company had a period of three (3) months from 17 September 2010 in which to place the shortfall of the issue (7,614,811 shares and 7,614,811 free attaching options). 5

7 PLENTEX LIMITED Directors Report (Cont d) Due to the undersubscription of the Company s Non Renounceable Entitlements Issue, Plentex was not required to subscribe for the second tranche of convertible notes in Blue Sundial, and effective 31 December 2010, converted the first tranche of convertible notes, together with certain other amounts outstanding to Plentex, into 75 additional fully paid ordinary shares in Blue Sundial. Towards the end of the reporting period the Directors of the Company were successful in placing the shortfall of the Rights Issue resulting in the Company issuing in the period 17 September 2010 to 31 December 2010 a total of 11,524,308 fully paid ordinary shares and 11,524,308 attaching options, thereby raising 403,350 before capital raising costs. The Company initially planned to seek shareholder approval for the issue of shares and performance shares to the Blue Sundial Vendors and other related matters including a 1 for 5 share consolidation at its 2010 Annual General Meeting which was expected to be held in November However, in October 2010 the Company identified the opportunity of becoming the industry investor in the Algal Fuels Consortium (AFC) in Adelaide. The AFC had been established as a formal collaboration between three of Australia s leading scientific institutions incorporating the South Australian Research Development Institute (SARDI), Flinders University, and the Commonwealth Scientific & Industrial Research Organisation (CSIRO) to take advantage of the Australian Government s support for the development of second-generation biofuels (i.e. bio-derived fuels that can be produced without adverse environmental, economic or social impacts) through the Department of Resources, Energy and Tourism s Gen-2 biofuels grant. The Consortium has been granted land on Torrens Island in the Port River estuary to build a demonstration biorefinery plant on a portion of a 17 ha. site. Initially AFC plans that this facility will produce 4,000 to 10,000 litres of algal oil per annum as a feedstock for fuel. However, ample space exists for this to be expanded by the construction of additional raceway ponds to produce 40,000 to 100,000 litres of algal oil per annum. The Directors of Plentex considered that participation in the AFC project, in conjunction with its Blue Sundial project involvement, would provide the Company with an immense advantage in pursuing its vision of becoming the leading Australian producer of sustainable, algae-based raw materials for both Australian and international markets. Negotiations with Flinders Partners Pty. Ltd. ( Flinders Partners ) (acting as the commercial representatives and agents of AFC) commenced in November 2010, culminating in the execution of a Terms Sheet with Flinders Partners on 25 February Details of the Terms Sheet are set out in Note 7 Subsequent Events. FERTILISER PROJECT ACTIVITY Monitoring of potential opportunities for the establishment of an ammonia/urea plant continued during the period. Further details of these matters are set out in the Company's Quarterly Reports for the quarters ended 30 September 2010 and 31 December 2010 respectively. STATE OF AFFAIRS The major activity of the Company during the period under review revolved around endeavours to recapitalise the Company in the face of a progressively deteriorating and volatile international and domestic economic background and the continuing investment in Blue Sundial Pty Ltd. 6

8 PLENTEX LIMITED Directors Report (Cont d) In the opinion of the Directors, there were no other significant changes in the state of affairs of the consolidated entity that occurred during the 6 months under review or thereafter not otherwise disclosed in this report or the financial report. AUDITOR S INDEPENDENCE DECLARATION The lead auditor s independence declaration as required under Section 307C of the Corporations Act 2001 is attached to this report on page 8. Signed in accordance with a resolution of the Board of Directors: On behalf of the Directors Peter C. Streader - Director Dated: 15 March

9 AUDITOR'S INDEPENDENCE DECLARATION As lead auditor for the review of Plentex Limited for the half-year ended 31 December 2010, I declare that to the best of my knowledge and belief, there have been: (a) (b) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Plentex Limited and the entities it controlled during the half-year. David Garvey Partner PKF 15 March 2011 Melbourne Tel: Fax: PKF ABN Level 14, 140 William Street Melbourne Victoria 3000 Australia GPO Box 5099 Melbourne Victoria 3001 The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. 8

10 Statement of Comprehensive Income For the Half Year Ended 31 December 2010 Note 31 December December 2009 Revenue from continuing operations: 2 4,131 4,660 Expenses from continuing activities: - Occupancy costs - Regulatory and compliance costs - Employee costs - Administration costs - Impairment of Investment 6 (37,936) (67,713) (17,075) (194,371) - (29,568) (30,015) (30,000) (164,538) (100,000) (Loss) before income tax (312,964) (349,461) Income tax expense - - (Loss) attributable to members of parent entity (312,964) (349,461) Other comprehensive income for the period net of tax - - Total comprehensive income for the period (312,964) (349,461) Total comprehensive income attributable to members of the parent entity (312,964) (349,461) Basic (Loss) Per Share (cents per share) 4 (0.49) (0.65) Diluted (Loss) Per Share (cents per share) 4 (0.49) (0.65) The consolidated statement of comprehensive income is to be read in conjunction with the notes to and forming part of the half-year financial statements set out on pages 13 to 19. 9

11 Statement of Financial Position as at 31 December 2010 Note 31 December June 2010 Current Assets Cash and Cash Equivalents 411, ,123 Trade and Other Receivables 3, ,872 Total Current Assets 414, ,995 Non Current Assets Plant and Equipment Other Financial Assets 6 11, ,305 14, ,000 Total Non Current Assets 218, ,839 Total Assets 632, ,834 Current Liabilities Trade and Other Payables 78,666 88,480 Total Current Liabilities 78,666 88,480 Total Liabilities 78,666 88,480 Net Assets 554, ,354 Equity Issued Capital 3 5,617,396 5,225,596 (Accumulated Losses) (5,063,206) (4,750,242) Total Equity 554, ,354 The consolidated statement of financial position is to be read in conjunction with the notes to and forming part of the half-year financial statements set out on pages 13 to

12 Statement of Changes in Equity for the half year ended 31 December 2010 Note Issued Capital (Accumulated Losses) Total Balance at 1 July ,044,196 (4,310,255) 733,941 Shares issued during period 187, ,500 Capital raising costs (6,100) - (6,100) Total comprehensive income for the period - (349,461) (349,461) Balance at 31 December ,225,596 (4,659,716) 565,880 Balance at 1 July ,225,596 (4,750,242) 475,354 Shares issued during period 3 403, ,350 Capital raising costs (11,550) - (11,550) Total comprehensive income for the period - (312,964) (312,964) Balance at 31 December ,617,396 (5,063,206) 554,190 The statement of changes in equity is to be read in conjunction with the notes to and forming part of the half-year financial statements set out on pages 13 to

13 Statement of Cash Flows For the Half Year Ended 31 December December December 2009 Cash Flows from Operating Activities Payments to suppliers and employees (330,529) (219,382) Interest received 4,131 4,660 Net Cash (Used in) Operating Activities (326,398) (214,722) Cash Flows from Investing Activities Payments for financial assets - (100,000) Net Cash (Used in) Investing Activities - (100,000) Cash Flows from Financing Activities Shares issued 403, ,500 Capital raising costs (11,550) (6,100) Net Cash Provided by Financing Activities 391, ,400 Net Increase (decrease) in Cash and Cash Equivalents 65,402 (133,322) Cash and cash equivalents at the beginning of the half year 346, ,284 Cash and Cash Equivalents at the end of the Half Year 411, ,962 The consolidated statement of cash flows is to be read in conjunction with the notes to and forming part of the half-year financial statements set out on pages 13 to

14 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December 2010 INTRODUCTION The financial report of Plentex Limited ( Plentex ) for the half year ended 31 December 2010 was authorised for issue in accordance with a resolution of directors on 10 March Plentex is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Stock Exchange. The financial report is presented in Australian dollars. The principal activities are set out in Note 5 of the financial statements. 1. SIGNIFICANT ACCOUNTING POLICIES These general purpose financial statements for the interim half-year reporting period ended 31 December 2010 have been prepared in accordance with Australian Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations Act These general purpose financial statements do not include all the notes of the type normally included in accrual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2010 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. New, revised or amending Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ("AASB") that are mandatory for the current reporting period. There are no impacts on the financial statements. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. (a) Basis of accounting An accruals basis of accounting has been adopted. The report is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been adopted. (b) Going concern For the half year ended 31 December 2010 the consolidated entity incurred a total comprehensive loss after tax of 312,964 (2010: 349,461), had regular cash flows from operating activities of negative 320,398 (2009: negative 214,722), had net current assets at 31 December 2010 of 336,046 (2009: 360,515). Furthermore, the consolidated entity does not have any regular source of income and is reliant on existing cash assets, and beyond those cash assets, equity capital and/or loans from third parties to fund its operating activities. For the period covering 12 months from the date of signature of the financial report, the consolidated entity expects this trend to continue. These conditions indicate a material uncertainty that may cast significant doubt about the consolidated entity s ability to continue as a going concern. 13

15 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December SIGNIFICANT ACCOUNTING POLICIES (Cont) The ability of the consolidated entity to continue as a going concern is dependent upon a number of factors, one being the continuation and availability of funds. The consolidated entity is expecting to fund ongoing obligations beyond the net current asset position as at 31 December 2010 as follows: The Company has entered into an agreement to acquire the shares of Blue Sundial Pty Ltd that it currently does not own. The acquisition is subject to a number of conditions precedent including mutual due diligence, securing access to technology and facilities on terms acceptable to the Company, raising capital to fund the project and obtaining shareholder and regulatory approvals enabling the Company s securities to be reinstated to official quotation. Consequently, the Company is expecting to raise additional capital of 8 million during the period 12 months from the date of signature of this report (refer Note 7 for further details) to fund ongoing operations beyond the net current asset position as at 31 December Cash flow forecasts prepared by management demonstrate that the Company and consolidated entity has sufficient cash flows to meet its commitments over the next twelve months based on the above factors, and for that reason the financial statements have been prepared on the basis the consolidated entity is a going concern, which contemplates the continuity of normal business activity, realisation of assets and the settlement of liabilities in the normal course of business. Should the consolidated entity be unable to continue as a going concern, it may be required to realise assets and extinguish liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern. 31 December December REVENUE Operating profit/(loss) has been determined after: Crediting as Income: Interest received or due and receivable 4,131 4,660 4,131 4,660 14

16 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December 2010 Entity 31 December 2010 Entity 30 June ISSUED CAPITAL Issued capital 69,145,846 shares 5,617,396 5,225,596 During the period, 11,524,308 fully paid ordinary shares with free attaching option were issued for a consideration of 3.5 cents per share (for working capital purposes) which raised 403,350 before capital raising costs of 11,550. SHARE MOVEMENTS Number Entity Balance 1 July ,621,539 5,225,596 Movement 1 July to 31 December ,524, ,350 Transaction costs in relation to share issued (11,550) Balance 31 December ,145,847 5,617,396 OPTION (UNLISTED) MOVEMENTS Number Entity Balance 1 July Movement 1 July to 31 December ,524,308 - Balance 31 December ,524, EARNINGS (LOSS) PER SHARE In calculating basic and diluted earnings (loss) per share, the weighted average number of ordinary shares for the period has been calculated to be 63,383,693 shares (31 December 2009: 53,871,539). The net loss after income tax is 312,964 (31 December 2009: (349,961)). 5. SEGMENT REPORTING The consolidated entity was involved in evaluating potential algae developments in Australia during the period. 15

17 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December SEGMENT REPORTING (Cont) Business and Geographical Segments The Group has adopted AASB 8 Operating Segments from 1 July 2009 whereby segment information is presented using a management approach, i.e. segment information is provided on the same basis as information used for internal reporting purposes by the board of directors. At regular intervals, the board is provided management information at a group level including a group cash forecast for the next twelve months of operation. On this basis, no segment information is included in these financial statements. 6. OTHER FINANCIAL ASSETS In conjunction with executing the new Sale of Shares Agreement (SSA) with the Blue Sundial Vendors on 17 June 2010, the Company also entered into a Convertible Note Deed with Blue Sundial pursuant to which the Company agreed to subscribe for two tranches of convertible notes each of 100,000. The purpose of this funding was to provide working capital to Blue Sundial so that it could more rapidly progress its algae project pending completion of the SSA, at which time Blue Sundial would become a wholly owned subsidiary of the Company. The initial tranche of 100,000 was subscribed for prior to 1 July 2010, with subscription of the second tranche being conditional upon the Company raising not less than 250,000 by way of a pro rata offer to the Company s shareholders planned for later in the year. Due to undersubscription of this Non Renounceable Rights Issue and delay in placing the shortfall from the issue, the Company was not required to subscribe for the second tranche by the conversion date. Effective 31 December 2010 the Company elected to convert the first tranche of convertible notes and certain other amounts due and payable by Blue Sundial to shares, resulting in Blue Sundial issuing 75 additional fully paid ordinary shares to Plentex. At the end of the reporting period the Company held a total of 138 fully paid ordinary shares in Blue Sundial (out of a total issued capital of 1,289) representing approximately 10.7% of Blue Sundial s issued capital. Investment in Blue Sundial Pty Ltd is an unquoted equity instrument and is classified as being Available for Sale and is stated at cost. The available for sale financial asset in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivates that are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost. Investments with no active market are recognised at cost less any provision for impairment in value. 16

18 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December SUBSEQUENT EVENTS On 25 February 2011 the Company entered into a legally binding Terms Sheet with Flinders Partners Pty. Ltd. Flinders Partners is the Manager of an algae production demonstration project based in South Australia with services contracted through South Australian Research & Development Institute ( SARDI ), Flinders University, and the Commonwealth Scientific and Industrial Research Organisation (CSIRO). Together these organisations represent many of Australia s leading experts across a broad spectrum of technologies relevant to algae production and processing. Flinders Partners is a wholly owned subsidiary of Flinders University and provides services relating to research partnering and the commercial application of research expertise, capabilities and facilities at Adelaide s Flinders University. The Terms Sheet outlines the basis for Plentex s participation in the project as the sole industry partner. Plentex, Flinders Partners, SARDI, Flinders University and CSIRO will collaborate on a demonstration scale algae oil production facility to be constructed on Torrens Island, South Australia. Plentex and Flinders Partners have entered an exclusive negotiating period to complete due diligence and finalize project documentation. The project was created to develop a sustainable algal oil feedstock for renewable fuel, as well as to investigate a biorefinery concept to reduce the net cost of the algal oil produced at the demonstration facility. Plentex believes its participation in this project will accelerate its objective of becoming Australia s leading commercial producer of sustainable, algae-based raw materials for both domestic and international markets. In addition to proving the commercial viability of algae oil production for biodiesel, the project will produce high value by-products including Omega-3 fatty acids, bioactive peptides and carotenoids used by the nutraceutical industry. In conjunction with its plan to acquire the outstanding balance of the shares in Blue Sundial, Plentex believes its agreement with Flinders Partners will bring together a unique combination of technical, commercial and government resources necessary to build a successful Australian algae business. Subject to the satisfaction of conditions precedent described below, Plentex will issue fully paid ordinary shares and performance shares to Flinders Partners as set out below and provide funding of up to 3.74 million for the furtherance of the Torrens Island Project in conjunction with funds expected to be received under grants to the project, as well as inkind contributions from the research institutions participating in the project. In consideration for this funding and the issue of the shares and performance shares, Plentex will acquire exclusive rights to the intellectual property now held and subsequently developed during the project, together with relevant hardware. The proposed acquisition is subject to conditions precedent which include due diligence, formal documentation, regulatory and shareholder approvals and Plentex undertaking a capital raising which enables it to satisfy the requirements of ASX for reinstatement of its securities to quotation and to fund the Torrens Island and Blue Sundial Projects. 17

19 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December SUBSEQUENT EVENTS (Cont) The Company proposes seeking to raise up to 8,000,000 by the issue of 32 million new shares at an issue price of 0.25 (25 cents) each, together with one free attaching 25 cent option for every two shares subscribed for. These shares and options would be issued on a post-consolidation basis following the Company s previously announced proposed 1 for 5 consolidation of existing issued shares. A prospectus detailing Plentex s participation in the Torrens Island Project, the Blue Sundial acquisition and the respective technologies will be issued. The capital raising, and the issue of securities to acquire Blue Sundial shares and in respect of participation in the Torrens Island Project are subject to shareholder and regulatory approvals. Plentex will also issue free bonus options to shareholders as previously announced. A notice of general meeting together with a detailed explanatory statement will be issued to shareholders when the meeting is called. It is anticipated that the meeting will be held in April 2011, subject to progress in fulfilment of other conditions precedent. The vendors ( Blue Sundial Vendors ) of the outstanding Blue Sundial shares not already held by Plentex have agreed to vary the terms upon which those shares will be acquired, to coordinate the combined acquisition of Blue Sundial and Plentex s participation in the Torrens Island Project. As a consequence, Plentex will make the following payments and issue the following securities: BLUE SUNDIAL VENDORS Acquisition of Balance of Blue Sundial shares (90%) Cash consideration: Nil Cash to be committed to development of Blue Sundial project: 1,800,000 (next 2 years) Ordinary Shares: 8,000,000 (at a deemed issue price of 0.25 each)* Performance shares* A Class: 7,000,000 B Class: 3,500,000 C Class: 12,000,000 * Post consolidation see above. FLINDERS PARTNERS Participation in Algal Fuels Project Cash consideration: Nil Cash to be committed to Algal Fuels Project up to: 3,740,000 (next 2 years) Ordinary Shares: 8,000,000 (at a deemed issue price of 0.25 each)* Performance shares* A Class: 7,000,000 B Class: 3,500,000 C Class: 12,000,000 The terms of the Performance shares provide for the following milestones to be achieved before conversion to ordinary shares: CLASS MILESTONE EXPIRY DATE A B C Completion of construction, commissioning and successful operation of a demonstration facility in Australia, including obtaining all required regulatory approvals. Completion of a positive definitive feasibility study for a commercial processing facility in Australia. Completion of construction, commissioning and successful operation of a commercial processing facility in Australia, including obtaining all required regulatory approvals. 15 months from issue 24 months from issue 36 months from issue 18

20 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December SUBSEQUENT EVENTS (Cont) These milestones have been adopted in relation to the acquisition of Blue Sundial and the participation in the Torrens Island Project to promote the achievement of the Company s objectives on a coordinated basis. It is anticipated the ordinary shares and performance shares will be issued at completion of the acquisition of Blue Sundial and the ordinary shares and Torrens Island Project rights, after the proposed general meeting. Each class of performance shares will be redeemed and cancelled for a total nominal sum of 1.00 in aggregate if the applicable milestone is not achieved. To assist with interim funding whilst the above initiatives are advanced, the Directors (pursuant to the authority conferred by shareholders at the Company s 2010 Annual General Meeting) placed 3,559,575 fully paid ordinary shares at an issue price of 0.04 (4 cents) per share together with 3,559,575 free attaching options, exercisable at 0.05 (5 cents) at any time post 1 July 2011 and prior to 30 June These shares and options will be subject to the planned share consolidation referred to above. 19

21 Notes To and Forming Part of the Financial Statements For the Half Year Ended 31 December 2010 Directors Declaration In the Directors opinion: the attached financial statements and notes thereto comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial position as at 31 December 2010 and of its performance for the financial half-year ended on that date; and there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of directors made pursuant to section 303(5) of the Corporations Act On behalf of the Directors Peter C. Streader - Director Dated: 15 March 2011 Melbourne 20

22 INDEPENDENT AUDITOR S REVIEW REPORT TO THE MEMBERS OF PLENTEX LIMITED Report on the Half-Year Financial Report We have reviewed the accompanying consolidated half-year financial report of Plentex Limited which comprises the statements of financial position as at 31 December 2010, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors declaration of the consolidated entity. The consolidated entity comprises Plentex Limited (the company) and the entities it controlled at 31 December 2010 or from time to time during the half-year ended on that date. Directors Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. 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 Corporations 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 As the auditor of Plentex Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for 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. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act Basis for Qualified Auditor s Conclusion The recoverability of the investment in Blue Sundial Pty Ltd, recorded as other financial assets in the consolidated entity at 31 December 2010 at 206,305 (30 June 2010: 100,000), is dependent on the company s ability to realise the amount either through sale of its investment or through Blue Sundial Pty Ltd s ability to generate cash flows in subsequent financial periods. The directors have provided representations that the carrying value of the investment is recoverable, however, contrary to the requirements of Australian Accounting Standard 136 Impairment of Assets, sufficient reliable evidence has not been provided to support the directors assertion. Therefore we are unable to conclude on the carrying value indicated above as at 31 December 2010 or 30 June Tel: Fax: PKF ABN Level 14, 140 William Street Melbourne Victoria 3000 Australia GPO Box 5099 Melbourne Victoria 3001 The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. 21

23 INDEPENDENT AUDITOR S REVIEW REPORT TO THE MEMBERS OF PLENTEX LIMITED (CONT'D) Qualified Conclusion Based on our review, which is not an audit, except for the effects of such adjustments, if any, as might be determined to be necessary in relation to the matter referred to in the preceding paragraph, we have not become aware of any matter that makes us believe that the half-year financial report of Plentex Limited is not in accordance with the Corporations Act 2001 including: (a) (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; and complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations Emphasis of Matter - Material Uncertainty Regarding Continuation As A Going Concern Without further qualifying our conclusion we draw attention to Note 1(b) in the financial report which indicates that at 31 December 2010 the consolidated entity incurred a loss for the period of 312,964 and had negative cash flows from operating activities of 326,398. At 31 December 2010 the consolidated entity has net current assets of 336,046. These conditions, along with other matters set forth in Note 1(b) Going Concern, give rise to a material uncertainty which may cast significant doubt about the ability of the consolidated entity to continue as a going concern, and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. PKF 15 March 2011 Melbourne D J Garvey Partner 22