Structural Monitoring Systems : 29.01.16 — Appendix 4C Quarterly & Brief Company Update

ASX Listing Rules Appendix 4C - Quarterly Report for Entities Admitted on the Basis of Commitments

ASX Release 29th January 2016

APPENDIX 4C - QUARTERLY REPORT AND BRIEF COMPANY UPDATE

Structural Monitoring Systems plc ("SMS" or "the Company") (ASX: SMN) continued to make meaningful progress through the quarter.

During The Quarter:

• Boeing approved CVMTM as an alternate maintenance program to conventional inspections, and pending FAA approval has also been confirmed.

  
  

• CVMTM is now the only commercially-approved technology for "on-aircraft" applications involving cracking, and related structural fatigue, in the world.

  
  

• The Annual General Meeting was held on Friday 27th November in Perth. Toby Chandler, Mike Reveley and Dave Veitch dialled in via video conference facility, while Andy Chilcott and Sam Wright were in attendance. All resolutions that were put were unanimously passed on a show of hands.

  
  

• An inaugural and highly successful Australian broker/investor roadshow was completed during December 2015.

  
  

• During the quarter, the Company recorded new sales to Nederlands Lucht- en Ruimtevaartcentrum ("NLR"), Airbus and to Embraer S.A. - the third-largest OEM civilian aircraft manufacturer in the world. NLR is the National Aerospace Laboratory of the Netherlands, and is one of its major technological institutes. These sales amounted to approximately $A150,000 in revenue - roughly equal to the Company's full, ongoing average quarterly operational cash-burn.

  
  

• The Company continues to meet all necessary expenditure needs and is, per usual, operating with demonstrable financial constraint and responsibility. The Company's key operational and strategic objectives remain well-defined and visible.

  
  

• The Company's cash balance as at 31 December 2015 was approximately $A500,000, and sees SMS fully funded relative to its foreseeable total cash flow requirements for 2016. Additional equipment sales are expected in the coming weeks, and these will further bolster the Company's cash balance.

  
  

  Next Steps:

• The Company will be providing:

  
  

  • updates regarding important progress and developments stemming from the completion of the Delta/Boeing/FAA in-flight commercial test programme will be forthcoming;

  • updates in relation to the Company's programmes with other key OEMs;

  • updates in relation to the developing, and highly important, rotor-craft programmes which are being conducted to pave the way for widespread adoption of CVMTM in the global civilian and military rotor-craft sectors.

    
    

• The Company will hold a further investor conference call in Q1-2016, while the Company's Directors are also aiming to conduct further broker/investor meetings in Australia during the first quarter.

United Kingdom

4 Elwick Road,

Ashford, Kent TN23 1PF, United Kingdom

Tel: [phone]

Fax: + 44 (0) 1233 646840

Australia

Suite 39, 1 Freshwater Parade Claremont WA 6010 Australia

Tel: [phone]

Fax: [phone]

United States

1999 Avenue of the Stars Suite 1100

Century City, CA 90067 United States

Tel: [phone]

Appendix 4C Quarterly report for entities

admitted on the basis of commitments

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001, 24/10/2005.

Rule 4.7B

Name of entity

Structural Monitoring Systems plc

ARBN	Quarter ended ("current quarter")
106 307 322	December 2015

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter $A'000	Year to date (6 months) $A'000
1.1	Receipts from customers	92	116
1.2	Payments for (a) staff costs (b)advertising and marketing (c)research and development leased assets other working capital	(94) (210)	(191) (323)
1.3	Dividends received	4	(1)
1.4	Interest and other items of a similar nature received
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (GST)
Net operating cash flows		(208)	(400)

Appendix 4C

Quarterly report for entities

admitted on the basis of commitments

Current quarter $A'000	Year to date (6 months) $A'000
1.8	Net operating cash flows (carried forward)	(208)	(400)
Cash flows related to investing activities
1.9	Payment for acquisition of: businesses (item 5) equity investments intellectual property physical non-current assets other non-current assets
1.10	Proceeds from disposal of: businesses (item 5) equity investments intellectual property physical non-current assets other non-current assets
1.11	Loans to other entities
1.12	Loans repaid by other entities
1.13	Other (provide details if material)
Net investing cash flows
1.14	Total operating and investing cash flows	(208)	(400)
Cash flows related to financing activities		280
1.15	Proceeds from issues of shares, options, etc.
1.16	Proceeds from sale of forfeited shares
1.17	Proceeds from borrowings
1.18	Repayment of borrowings
1.19	Dividends paid
1.20	Other
Net financing cash flows		280
Net increase (decrease) in cash held		(208)	(120)
1.21	Cash at beginning of quarter/year to date	700	587
1.22	Exchange rate adjustments to item 1.20	(10)	15
1.23	Cash at end of quarter	482	482

Appendix 4C Quarterly report for entities

admitted on the basis of commitments

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

Current quarter $A'000
1.24	Aggregate amount of payments to the parties included in item 1.2	84
1.25	Aggregate amount of loans to the parties included in item 1.11

1.26 Explanation necessary for an understanding of the transactions

Director's Wages & Salaries

Non-cash financing and investing activities

2.1	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2	Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

Amount available $A'000	Amount used $A'000
3.1	Loan facilities
3.2	Credit standby arrangements