APPENDIX 4D HALF YEAR REPORT TO THE AUSTRALIAN STOCK EXCHANGE Name of Entity Resources & Energy Group Limited (formerly Real Brand Holdings Limited) ABN 12 110 005 822 Half year ended 31 December 2010 Previous corresponding period 31 December 2009 RESULTS FOR ANNOUNCEMENT TO THE MARKET REVENUE FROM ORDINARY ACTIVITIES Net loss for the period attributable to members Up 86.6% To 57,526 Down 20.9% To 310,021 No interim dividend was paid and it is not proposed to pay any dividends. 1
Explanation of Revenue The loss from ordinary activities before income tax expense includes the following revenues whose disclosure is relevant in explaining the financial performance of the entity: Half Year Ended 31 Dec 2010 Half Year Ended 31 Dec 2009 Revenues from ordinary Activities Interest 57,526 30,833 Other - - 57,526 30,833. Explanation of Net Loss During the year, there was a loss of 310,021 (2009: loss 392,381). The expenses mainly relate to reviewing and seeking other new opportunities. The result for the year is in line with management and board expectations. Net Tangible Assets per Security 31 December 2010 31 December 2009 Net tangible assets per ordinary security 0.117 0.070 Other matters There have been no entities over which control has been gained or lost during the period. There are no associates or joint ventures included within the accounts of Resources & Energy Group Limited. 2
RESOURCES & ENERGY GROUP (FORMERLY REAL BRAND HOLDINGS ) ABN 12 110 005 822 HALF YEAR REPORT 31 DECEMBER 2010 This Interim Financial Report should be read in conjunction with the company s annual report for the period ended 30 June 2010. 3
RESOURCES & ENERGY GROUP FINANCIAL REPORT for the half year ended 31 December 2010 ABN 12 110 005 822 CORPORATE DIRECTORY...5 DIRECTORS REPORT...6 AUDITOR S INDEPENDENCE DECLARATION...8 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME...9 CONSOLIDATED STATEMENT OF FINANCIAL POSITION...10 CONSOLIDATED STATEMENT OF CASH FLOWS...11 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY...12 NOTES TO THE FINANCIAL IAL STATEMENTS...13 DIRECTORS DECLARATION...18 INDEPENDENT REVIEW REPORT R...19 4
RESOURCES & ENERGY GROUP CORPORATE DIRECTORY Directors Richard Poole (Chairman) Virginia Bruce Philip Suriano Secretary Sylvie Dimarco Registered Office Level 33 Colonial Centre 52 Martin Place SYDNEY NSW 2000 Telephone +(612) 9227 8900 Facsimile +(612) 9287 8901 Share Registry Registries Limited Level 7, 207 Kent St, SYDNEY NSW 2000 Auditor Prosperity Audit Services Level 2 580 George Street Sydney NSW 2000 Stock Exchange Australian Stock Exchange Limited 20 Bridge Street SYDNEY NSW 2000 ASX Code REZ (formerly RBH) (fully paid ordinary shares) 5
RESOURCES & ENERGY GROUP DIRECTORS IRECTORS REPORT The directors of Resources & Energy Group Limited submit herewith the financial report for the half year ended 31 December 2010. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Directors The names of the directors of the company during or since the end of the half year and up to the date of this report are: Mr RJ Poole Ms V Bruce Mr P Suriano The Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Review ew of Operations The loss from ordinary activities after income tax for the half year ended 31 December 2010 was 310,021 (31 December 2009 loss: 392,381). The loss from ordinary activities after income tax includes the following revenues and expenses whose disclosure is relevant in explaining the financial performance of the entity: Half Year Ended 31 Dec 2010 Half Year Ended 31 Dec 2009 Revenue from operating activities 57,526 30,833 Expenses from operating activities (367,547) (423,214) Loss from operating activities (310,021) (392,381) Profit/(loss) from ordinary activities (310,021) (392,381) The result for the half-year is in line with management and Board expectations. 6
RESOURCES & ENERGY GROUP DIRECTORS REPORT Earnings per Share 2010 2009 Basic earnings per share (0.007) (0.01) Diluted earnings per share (0.007) (0.01) As the average market price of ordinary shares for the half year ended 31 December 2010 did not exceed the weighted average exercise price, the share options are anti dilutive and are ignored in the calculation of the diluted earnings per share. Auditor s Independence Declaration A copy of the auditors independence declaration as required under section 307C of the Corporations Act 2001 is set out on Page 8. Auditor The auditor continues in office in accordance with Section 327 of the Corporations Act 2001. Signed in accordance with a resolution of directors. On behalf of the Directors RJ Poole Chairman Sydney, 25 February 2011 7
AUDITOR S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF RESOURCES & ENERGY GROUP I declare that, to the best of my knowledge and belief during the half-year ended 31 December 2010 there have been: (i) (ii) no contraventions of the auditor independence requirements as set out in 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 Resources & Energy Group Limited and the entities it controlled during the period. PROSPERITY AUDIT SERVICES PAUL HORNE Partner 25 February 2011 Sydney Sydney Level 2 580 George Street Sydney NSW 2000 PO Box 20726 World Square NSW 2002 T 02 9261 2288 F 02 9261 2376 Sydney Newcastle Brisbane 8 Newcastle Hunter Mall Chambers 2 nd Floor, 175 Scott Street Newcastle NSW 2300 PO Box 234 Newcastle NSW 2300 T 02 4907 7222 F 02 4929 6759 Brisbane Suite 1, Level 3 200 Creek Street Brisbane QLD 4000 GPO Box 2246 Brisbane QLD 4001 T 07 3839 1755 F 07 3839 1037 www.prosperityadvisers.com.au mail@prosperityadvisers.com.au Prosperity Chartered Audit Services Accountants ABN 87 879 Liability 283 limited 831 by a Scheme approved under the Professional Standards Legislation. Chartered Accountants Liability limited by a Scheme approved under the Professional Standards Legislation.
RESOURCES & ENERGY GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the half year ended 31 December 2010 Note Consolidated 31 Dec 2010 Consolidated 31 Dec 2009 Continuing operations Other revenue 2 57,526 30,833 Auditing and accounting (39,210) (23,430) Consulting fees (15,000) (208,165) Office expense (14,515) (12,000) Corporate maintenance expense (55,542) (57,708) Legal costs (37,180) (67,146) Director fees (59,650) (54,000) Interest paid (24,680) - Other expenses from operating activities (121,770) (765) Profit / (Loss) ( before income tax expense (310,021) (392,381) Income tax expense - - Profit / (Loss) ( after income tax (310,021) (392,381) Profit / (Loss) for the year (310,021) (392,381) Other Comprehensive Income/(Loss) Other comprehensive income for the period - - Total comprehensive income/(loss) for the period (310,021) (392,381) Profit/(loss) is attributable to: - shareholders of Resource & Energy Group Limited (309,575) (392,381) - Non-controlling interests (446) - (310,021) (392,381) Total comprehensive income/(loss) is attributable to: - shareholders of Resource & Energy Group Limited (309,575) (392,381) - Non-controlling interests (446) - (310,021) (392,381) Earnings Per Share: Basic ( per share) 3 (0.007) (0.01) Diluted ( per share) 3 (0.007) (0.01) The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes 9
RESOURCES & ENERGY GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2010 Note Consolidated 31 Dec 2010 Consolidated 30 June 2010 CURRENT ASSETS Cash and cash equivalents 1,761,570 2,046,831 Trade and other receivables 43,974 103,228 TOTAL CURRENT ASSETS 1,805,544 2,150,059 NON ON-CUR URRENT RENT ASSETS Property, Plant and Equipment 2,040 2,040 Exploration and evaluation assets 8,565,973 8,549,179 TOTAL NON ON-CURRENT ASSETS 8,568,013 8,551,219 TOTAL ASSETS 10,373,557 10,701,278 CURREN URRENT LIABILITIES Trade and other payables 87,472 148,672 TOTAL CURRENT LIABILITIES 87,472 148,672 NON ON-CURRENT LIABILITIES Borrowings 149,875 106,375 Deferred tax liabilities 2,294,441 2,294,441 TOTAL NON ON-CURRENT LIABILITIES 2,444,316 2,400,816 TOTAL LIABILITIES 2,531,788 2,549,488 NET ASSETS 7,841,769 8,151,790 EQUITY Contributed equity 10,948,793 10,948,793 Accumulated losses (6,056,952) (5,747,377) TOTAL EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS S OF RESOURCES & ENERGY GROUP 4,891,841 5,201,416 Non-controlling interests 2,949,928 2,950,374 TOTAL EQUITY 7,841,769 8,151,790 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes 10
RESOURCES & ENERGY GROUP CONSOLIDATED STATEMENT OF CASH FLOWS for the half year ended 31 December 2010 Note Consolidated 31 Dec 2010 Consolidated 31 Dec 2009 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers - - Payments to suppliers and employees (350,549) (371,484) Interest received 38,581 11,696 Taxes (paid) / refunded - 26,928 NET CASH FLOWS FROM OPERATING ACTIVITIES (311,968) (332,860) CASH FLOWS FROM INVESTING ACTIVI CTIVITIES TIES Loans made to other entities 43,500 (450,000) Exploration and evaluation costs capitalised (16,793) - NET CASH FLOWS FROM INVESTING ACTIVITIES 26,707 (450,000) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares - 2,717,115 Payments of transaction costs in respect of issue of shares - (172,973) NET CASH FLOWS FROM FINANCING ACTIVITIES - 2,544,142 NET INCREASE NCREASE/(D /(DECREASE ECREASE) IN CASH ASSETS HELD (285,261) 1,761,282 Cash assets at the beginning of the half year 2,046,831 761,344 CASH ASSETS AT THE END OF THE HALF YEAR 1,761,570 2,522,626 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes 11
RESOURCES & ENERGY GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half year ended 31 December 2010 CONSOLIDATED ORDINARY SHARES RETAINED EARNINGS NON ON- CONTROLLING INTERESTS TOTAL Balance at 1 July 2009 7,640,351 (6,866,942) - 773,409 Total Comprehensive loss for the half year - (392,381) - (392,381) Transactions with owners in their capacity as owners: Shares issued, net of 2,544,142 - - 2,544,142 transaction costs Balance at 31 December 2009 10,184,493 (7,259,323) - 2,925,170 Balance at 1 July 2010 10,948,793 (5,747,377) 2,950,374 8,151,790 Total Comprehensive loss for the half year - (309,575) (446) (310,021) Balance at 31 December 2010 10,948,793 (6,056,952) 2,949,928 7,841,769 The above Consolidated Statement of Changes In Equity should be read in conjunction with the accompanying notes 12
RESOURCES & ENERGY GROUP NOTES TO THE FINANCIAL IAL STATEMENTS for the half year ended 31 December 2010 1. BASIS OF PREPARATION The half year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134: Interim Financial Reporting. The half year financial report does not include all notes of the type normally intended within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2010 and any public announcements made by Resources & Energy Group Limited and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001. The accounting policies have been consistently applied by the entities in the economic entity and are consistent with those applied in the 30 June 2010 annual report. New and revised Standards and amendments thereof and Interpretations effective for the current reporting period that are relevant to the Group include: Amendments to AASB 5, 8, 101, 107, 117, 118, 136 and 139 as a consequence of AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvement Project. AASB 2009-5 Introduces amendments into Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are largely technical, clarifying particular terms or eliminating unintended consequences. Other changes are more substantial, such as the current/non current classification of convertible instruments, the classification of expenditures on unrecognised assets in the statement of cash flows and the classification of leases of land and buildings. The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period. The adoption of these amendments has not resulted in any changes to the Group s accounting policies and have no affect on the amounts reported for the current or prior periods. Certain new accounting standards and interpretations have been published that are not mandatory at 31 December 2010. The management has assessed the new accounting standards and interpretations that have been published but are not mandatory for the half year reporting period and concluded that none of these new standards and interpretations are relevant to the group Going concern The financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business. The Group has sufficient cash reserves to meet its debts as and when they fall due over the next 12 months, including its commitments as outlined in note 7. In financial periods beyond 30 June 2011 the group may require successful raising of funding through debt, equity or the successful exploration and subsequent exploitation of the company s tenements. 2. OTHER REVENUE Consolidated Consol 31 Dec 2010 Consol 31 Dec 2009 Revenue from continuing operations Interest 57,526 30,833 Other - - 57,526 30,833 13
RESOURCES & ENERGY GROUP NOTES TO THE FINANCIAL AL STATEMENTS for the half year ended 31 December 2010 3. ASSET BACKING AND EARNING ARNINGS PER SHARE Consol 31 Dec 2010 Consol 31 Dec 2009 Net tangible asset backing ( per share) 0.117 0.070 Basic earnings per share ( per share) (0.007) (0.01) Earnings used in calculation of earnings per share (310,021) (392,381) Weighted average number of units on issue used in calculation of earnings per unit 41,842,306 32,887,700 As the average market price of ordinary shares for the half-year ended 31 December 2010 did not exceed the weighted average exercise price, the share options are anti dilutive and are ignored in the calculation of the diluted earnings per share The number of ordinary shares in issue prior to the capital consolidation is adjusted in accordance with the proportional change in the number of outstanding ordinary shares after the capital consolidation as if the event had occurred at the beginning of the half year period. Accordingly, the comparative figure for the weighted average number of shares in prior period is restated for the capital consolidation. 4. CONTINGENT LIABILITIES OR CONTINGENT ASSETS There are no contingent liabilities or contingent assets of the company identified as at 31 December 2010. 5. DIVIDENDS No dividends have been declared or paid during the half year ended 31 December 2010 or in the prior period, and the directors do not recommend the payment of a dividend in respect of the half year ended 31 December 2010. 14
RESOURCES & ENERGY GROUP NOTES TO THE FINANCIAL AL STATEMENTS for the half year ended 31 December 2010 6. SEGMENT REPORTING The group has one reportable segment being the exploration of geothermal energy in South Australia. The group has twelve Geothermal Licences in the state of South Australia. Due to the fact that all Geothermal licences are in SA and at a similar exploration stage, they have been aggregated as one reportable operating segment. Management will continue to assess the reporting format in future periods and if reporting changes to a different basis, additional segment information will be included. The company has identified its operating segments based on internal reports that are reviewed and used by the directors in assessing performance. The accounting policies and amounts reported for internal reporting are consistent with the AIFRS financial information reported in this financial report. 2010 Exploration & Unallocated Total Drilling for geothermal energy Revenue Segment Revenue (a) 40,000 57,526 97,526 Depreciation - - - Loss after income tax (b) ( (929) (309,093) (310,022) Segment total assets (c) 8,641,981 3,236,573 11,878,554 Segment total liabilities 2,515,447 16,341 2,531,788 2009 Exploration & Unallocated Total Drilling for geothermal energy Revenue Segment Revenue (a) - 30,833 30,833 Depreciation - - - Loss after income tax (b) ( - (392,381) (392,381) Segment total assets (c) - 3,061,645 3,061,645 Segment total liabilities - 136,475 136,475 Unallocated amounts represent corporate activities such as administration and office costs. 15
RESOURCES & ENERGY GROUP NOTES TO THE FINANCIAL AL STATEMENTS for the half year ended 31 December 2010 6. SEGMENT REPORTING (CONT CONT) (a) Revenue A reconciliation of total loss after tax to the consolidated profit for the year is provided as follows: Economic Economic Entity Entity 2010 2009 Total Revenue 97,526 30,833 Inter-segment elimination (40,000) - Profit / (Loss) for the year 57,526 30,833 (b) Loss after tax A reconciliation of total loss after tax to the consolidated profit for the year is provided as follows: Economic Economic Entity Entity 2010 2009 Total loss after tax (310,022) -392,381 Inter-segment elimination - - Profit / (Loss) for the year (308,012) -392,381 (c) Segment assets Reportable segments assets are reconciled to total assets as follows: Economic Economic Entity Entity 2010 2009 Segment assets 11,878,557 3,061,645 Inter-segment elimination (1,505,000) - Total assets as per the balance sheet 10,373,557 3,061,645 All segment revenue are attributed to Australia and all segment assets are located in Australia. 16
RESOURCES & ENERGY GROUP NOTES TO THE FINANCIAL AL STATEMENTS for the half year ended 31 December 2010 7. TENEMENT LEASE COMMITMENTS MENTS Economic Entity 30 Dec 2010 Economic Entity 30 June 2010 Minimum Expenditure commitment mitment on tenement leases Committed but not provided for and payable: Within one year 200,000 400,000 One year or later and no later than for 3,600,000 3,600,000 five years Later than five years - - 3,800,000 4,000,000 8. COMPANY DETAIL ETAILS The registered office of the company is: Resources & Energy Group Limited Level 33 Colonial Centre 52 Martin Place SYDNEY NSW 2000 The principal places of business are: Level 33 Colonial Centre 52 Martin Place SYDNEY NSW 2000 10. SUBSEQUENT EVENTS No matters or circumstances have arisen since the end of the half year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in subsequent financial years. 17
RESOURCES & ENERGY GROUP DIRECTORS DECLARATION for the half year ended 31 December 2010 In accordance with a resolution of the directors of Resources & Energy Limited, I state that: In the opinion of the directors: a) The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including: i) Giving a true and fair view of the financial position as at 31 December 2010 and the performance for the half-year ended on that date of the consolidated entity. ii) Complying with the Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. b) There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. On behalf of the board RJ Poole Chairman Sydney, 25 th February 2011 18
INDEPENDENT REVIEW REPORT TO THE MEMBERS OF RESOURCES & ENERGY GROUP FOR THE HALF YEAR ENDED 31 DECEMBER 2010 Report on the Half-Year Financial Report We have reviewed the accompanying financial report of Resources & Energy Group Limited (Formerly Real Brand Holdings Limited) for the half-year ended 31 December 2010, which comprises the statement of financial position as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, other selected explanatory notes and the directors declaration for the Resources & Energy Group Limited (the consolidated entity). The consolidated entity comprises both Resources & Energy Group Limited (the company) and the entities it controlled at the end of the half-year or from time to time during the half-year. Directors Responsibility for the Half-Year Financial Report The directors of the company 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 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 an Interim 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 2009 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 the company, 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. It also includes reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. 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. Sydney Level 2 580 George Street Sydney NSW 2000 PO Box 20726 World Square NSW 2002 T 02 9261 2288 F 02 9261 2376 Newcastle Hunter Mall Chambers 2 nd Floor, 175 Scott Street Newcastle NSW 2300 PO Box 234 Newcastle NSW 2300 T 02 4907 7222 F 02 4929 6759 Brisbane Suite 1, Level 3 200 Creek Street Brisbane QLD 4000 GPO Box 2246 Brisbane QLD 4001 T 07 3839 1755 F 07 3839 1037 Sydney Newcastle Brisbane 19 www.prosperityadvisers.com.au mail@prosperityadvisers.com.au Chartered Accountants Prosperity Liability Audit limited Services by a Scheme approved under the Professional ABN 87 879 Standards 283 831 Legislation. Chartered Accountants Liability limited by a Scheme approved under the Professional Standards Legislation.
INDEPENDENT REVIEW REPORT TO THE MEMBERS OF RESOURCES & ENERGY GROUP FOR THE HALF YEAR ENDED 31 DECEMBER 2010 (con t) While we considered the effectiveness of management s internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls. Our review did not involve an analysis of the prudence of business decisions made by directors or management. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the Company a written Auditor s Independence Declaration, a copy of which is included on page 8 of the financial report. 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 Resources & Energy Group Limited 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 Corporations Regulations 2001. PROSPERITY AUDIT SERVICES PAUL HORNE Partner 25 February 2011 Sydney 20