Energy Mad : Appendix One Release

40bff99d-8660-4728-b549-ce33df60dee4.pdf APPENDIX 1 RELEASE

26 May 2016

This document covers Energy Mad Limited's audited financial results for the year ended 31 March 2016.

ENERGY MAD LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET

Reporting period 12 months to 31 March 2016

Previous reporting period 12 months to 31 March 2015

Amount (000s) Percentage Change

Revenue from ordinary activities $NZ 8,404 42.10% Profit / (loss) from continuing activities attributable to security holders $NZ (1,263) (60.19%) Net profit / (loss) attributable to security holders $NZ (1,263) (60.19%)

Net tangible asset per security 31 March 2016 (3 cent) 31 March 2015 (1 cent)

Interim Final Dividend Amount per Security Imputed amount per Security

No dividend is proposed Not Applicable Not Applicable

Record Date Not Applicable

Dividend Payable Date Not Applicable

Audit The financial statements have

been audited

The attached Consolidated Financial Statements are the audited financial statements of the Company and Group for the year ended 31 March 2016 on which an unmodified audit opinion has been expressed.

Commentary

Income Statement

The operating revenue was $8,403,752 for the year ended 31 March 2016 compared to $5,913,843 for the previous year (ignoring other income). The 42% increase was primarily due to an increase of

$2,704,399 of Australian revenue from the previous year as a result of the decision to shift its strategic focus to developing new LED Ecobulbs.

• Gross profit was $2,823,926 (34% of operating revenue) for the year ended 31 March 2016 compared to $1,895,065 (32% of operating revenue) for the previous year. The 49% increase, was due to the increase in revenue of $2,489,909 for the reasons outlined above.

• Administration and general expenses stands at $2,456,113 for the year ended 31 March 2016 compared to $2,917,835 for the previous year. The 15% decrease was primarily due to cost savings achieved under the restructuring in the previous year, assisted by an exchange rate gain of $77,799.

• Selling and distribution expenses stands at $1,150,306 for the year ended 31 March 2016 compared to $1,685,613 for the previous year. The 31% decrease is primarily due to cost savings achieved under the restructuring in the previous year and improved sales models.

• Impairment of patents and designs stands at $141,257 for the year ended 31 March 2016 compared to NIL for the previous year. The Board made a decision to impair the asset as it related to old CFL patents and designs.

• Provision for inventory obsolescence expense was NIL for the year ended 31 March 2016 compared to $228,577 for the previous year.

• Finance expenses stands at $378,648 for the year ended 31 March 2016 compared to the previous year of $281,725. The 34% increase is a result of higher funding costs with Scottish Pacific Business Finance as a result of the increase in facility and a new Term Loan facility.

  Statements of Cashflows and Financial Position

• The net cash outflow for operating activities amounted to $1,748,349 compared to an outflow of

  $2,789,955 for the previous year. The decrease of $1,041,606 was driven by higher revenues in Australia, restructuring savings and higher receipts from customers.

• The net cash outflow from investing activities amounted to $367,911 compared to an outflow of

  $501,000 for the previous year. The decrease was due to lower expenditure and capitalisation of employment costs incurred in the purchase of intangible assets.

• The Group's cash balance of $290,865 compares to the previous year of $1,338,418 and the decrease is as a result of the loss for the year.

Please refer to the accompanying Market Release and Consolidated Financial Statements for additional commentary.

For more information, contact:

Chris Mardon [phone]