From: BRONTE DOUGLASS [brontedouglass@hotmail.com] Sent: Thursday, March 18, 2004 4:23 PM To: Scott Evans Cosmedics Australia Limited half yearly report CONTENTS Page Report of the Directors 2 Independent Review Report to the Members 3 Directors Declaration 5 Statement of Financial Performance 6 Statement of Financial Position 7 Statement of Cash Flows 9 Notes to the Financial Statements 10 DIRECTOR'S REPORT Your Directors submit the financial report of the economic entity for the half-year ended 31 December 2003. Directors The following persons held office as Directors of Cosmedics Australia Limited during the year and at the date of this report. M. Boland (Resigned 18th December, 2003) K. Swe (Accepted 18th December, 2003) B. Douglass V. Forge R. Mitchell Review of Operations Two new locations for the company's cosmetic procedures have been proposed by the Australian Medical Co-operative. These will be in the Co-operative's premises at Parramatta and Fairfield, and are expected to commence operation shortly. New equipment is not required since the Syncron "Aurora" IPL/RF that the company currently operates, is portable and can be taken to each new location. This income growth, without the incurring of additional expenditure should allow the company to generate profits. Your directors therefore believe that for the future expansion of the company, cosmedic procedures show more promise than General Practice and the company will concentrate its efforts in this direction. The future profitability of the General Practice at the Entrance depends upon our ability to recruit doctors to work in that centre, but this recruitment continues to be a problem, and as such the centre has been responsible for losses incurred in the company in the first half. Signed at Sydney this 16th day of March, 2004 in accordance with a resolution of the directors. ......................................... (Director) ......................................... (Director) INDEPENDENT REVIEW REPORT TO THE MEMBERS OF COSMEDICS AUSTRALIA LIMITED Scope The financial report and directors' responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for the economic entity, for the period ended 31 December 2003. The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the consolidated entity, and that complies with Accounting Standard AASB 1029 "Interim Financial Reporting", in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. Review Methodology We conducted an independent review of the financial report in order to make a statement about it to the members of the company, and in order for the company to lodge the financial report with the Newcastle Stock Exchange and the Australian Securities and Investments Commission. Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements, in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with the Corporations Act 2001, Accounting Standard AASB 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements in Australia, so as to present a view which is consistent with our understanding of the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows. A review is limited primarily to inquiries of company personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Independence We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. In addition to our review of the financial report, we were engaged to undertake other non-audit services. The provision of these services has not impaired our independence. Statement Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of Cosmedics Australia Limited is not in accordance with: (a) The Corporations Act 2001, including: (i) Giving a true and fair view of the financial position of the consolidated entity at 31 December 2003 and of its performance for the period ended on that date; and (ii) Complying with Accounting Standard AASB 1029 "Interim Financial Reporting" and the Corporations Regulations 2001; and (b) Other mandatory financial reporting requirements in Australia. Benbow & Pike Gerard J Abrams Sydney Partner 16 March 2004 DIRECTORS DECLARATION In accordance with a resolution of the Directors of Cosmedics Australia Limited we state that in the opinion of the Directors: (a) The half year consolidated financial statements and notes as set out on pages 6 to 10: (i) Give a true and fair view of the financial position as at 31 December 2003 and the performance for the half year ended on that date of the consolidated entity; and (ii) Comply with Accounting Standard AASB1029: Interim Financial Reporting and the Corporations Regulations 2001; and (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. Signed at Sydney this 16th day of March, 2004 in accordance with a resolution of the directors. ......................................... (Director) ......................................... (Director) STATEMENT OF FINANCIAL PERFORMANCE For the half year ended 31 December 2003 Note 31.12.032003$ Revenues from ordinary activities 239,695 Depreciation 3,683 Amortisation of Goodwill 26,203 Other expenses from ordinary activities 291,471 Total Expenses 321,357 Profit (loss) from ordinary activities before income tax expense (81,662) Income tax relating to ordinary activities - Profit (loss) from ordinary activities after income tax expense (81,662) Total revenues, expenses and valuation adjustments attributable to members and recognised directly in equity (81,662) Basic earnings per share (cents) 3 (0.51) Diluted earnings per share (cents) (0.51) STATEMENT OF FINANCIAL POSITION As at 31 December 2003 Note 31.12.032003$ CURRENT ASSETS Cash Assets 3,168 Inventories 7,000 GST Receivable 21,872 Trade Debtors 27,420 TOTAL CURRENT ASSETS 59,460 NON-CURRENT ASSETS Other Financial Assets 4,149 Other Amounts Receivable 30,313 Property, Plant and Equipment 169,934 Intangibles 1,067,560 TOTAL NON-CURRENT ASSETS 1,271,956 TOTAL ASSETS 1,331,416 CURRENT LIABILITIES Trade Creditors 69,975 Other Creditors 434 Payroll Liabilities 16,381 Lease Liability 31,891 TOTAL CURRENT LIABILITIES 118,681 NON CURRENT LIABILITIES Other Amounts Payable 35,932 Lease Liability 89,389 TOTAL NON-CURRENT LIABILITIES 125,321 TOTAL LIABILITIES 244,002 NET ASSETS 1,087,414 STATEMENT OF FINANCIAL POSITION As at 31 December 2003 SHAREHOLDERS' EQUITY Contributed Equity 1,700,002 Retained Profits/(Losses) (530,926) Current Year Earnings/(Losses) (81,662) TOTAL SHAREHOLDERS' EQUITY 1,087,414 STATEMENT OF CASH FLOWS For the half year ended 31 December 2003 Note 31.12.032003$ Cash Flow from Operating Activities Receipts 202,472 Payments to Suppliers and Employees (230,659) Interest Received 67 Net Cash used in Operating Activities 6 (28,120) Cash Flow from Investing Activities Purchase of property, plant and equipment (129,367) Loans advanced to other entities 2,162 Proceeds from Sale of Investments 30,160 Net Cash used in Investing Activities (97,045) Cash Flow from Financing Activities Net proceeds from lease liability 121,278 Net Cash provided by Investing Activities 121,278 Net Increase (Decrease) in Cash Held (3,887) Cash at 30th June 2002 11,770 Cash at 31st December 2003 3,168 NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basic Accounting Principles The half yearly financial statements are a general purpose financial report that has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standard AASB 1029: Interim Financial Reporting, Urgent Issues Group Consensus Views other authoritative pronouncements of the Australian Accounting Standards Board. The financial report covers the economic entity of Cosmedics Australia Limited, a listed public company incorporated and domiciled in Australia. It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2003 and any public announcements made by Cosmedics Australia Limited 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 economic entity and are consistent with those applied in the 30 June 2003 annual report. As the company was unlisted as at 31 December 2002, preparation of half yearly accounts were not required, and as such no comparative half yearly accounts are available for the relevant period. The half-yearly report does not include full disclosures of the type normally included in an annual financial report. 2. OPERATING PROFIT Note 31.12.032003$ a. REVENUE Interest Received 67 Medical Fees Received 229,891 Profit on Sale of Investments 9,737 TOTAL REVENUE 239,695 b. EXPENSES Ordinary Activities Depreciation 3,683 Amortisation of Goodwill 26,203 Rent 41,425 Wages & Salaries 54,800 Superannuation 6,272 Legal Fees 8,865 Equipment Hire 11,859 Doctors Consultations 113,824 Management Fees 14,394 Consultants 8,423 Other Administration Costs 31,609 TOTAL EXPENSES 321,357 NOTES TO THE FINANCIAL STATEMENTS Note 31.12.032003$ 3. EARNINGS PER SHARE Net profit and earnings used in the calculation of dilutive EPS (81,662) Weighted average number of ordinary shares 16,000,010 Weighted average number of options outstanding 14,900,005 4. CONTINGENT LIABILITIES There has been no change in contingent liabilities since the last annual reporting date. 5. SEGMENT REPORTING The company previously operated as an investment company holding shares in listed companies. Since 1 June 2003, the company commenced to operate in the health industry. 6. CASH FLOW INFORMATION (a) Reconciliation of Cash Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: Cash on hand 3,168 (b) Reconciliation of Cash Flow from Operations with Profit from ordinary activities after income tax Profit from ordinary activities after income tax (81,662) Non-cash flows in profit from ordinary activities Depreciation and Amortisation 29,886 (Profit)/loss on disposal of investments (9,737) (Profit)/loss on disposal of plant and equipment - 20,149 Changes in assets and liabilities (Increase)/decrease in receivables (27,420) (Increase)/decrease in deposits (4,149) (Increase)/decrease in other receivables (21,872) Increase/(decrease) in payables 69,975 Increase/(decrease) in payroll liabilities 16,859 33,393 Cash flows from operations (28,120) _________________________________________________________________ Get Extra Storage in 10MB, 25MB, 50MB and 100MB options now! 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