I would say we have just seen the last set of JV accounts....

I would say we have just seen the last set of JV accounts.

Confusing as it is to some the accounts bring clarity to what VMT paid $6.5m for. It turns out the intent of the agreement was clearly stated in the announcement.

We now know now they wrote off Super Soco's loan account because it was agreed after balance date that it would not be repaid.

The other side of the account wasn't a loss just a reduction in contributed equity.

Vmt didn't write their carrying value down and continue to carry it at cost which they are entitled to do.

They will allocate some of the $6.5m they paid, to own all the super Soco assets that they acquired from the court, to SOCO's 50% of the manufacturing company and will increase their carrying value of the manufacturing by that cost.

All done in the balance sheets with no entries required in the P&L account.

Now VMT own 100% of the manufacturing company its' future accounts will be consolidated. The owned European distributors accounts will also be consolidated.

For the second half the cost of sales will drop to the manufacturing companies cost of parts, the revenue from sales will be what the various VMT entities sell the products for. A mixture of Dealer buying prices where we own the local distributor, and third party local distributor buying price where VMT don't own local distribution.

Gross Profit margins will increase closely followed by net profit margins rising when sales pass the break even number which it seems is < 20k units /annum.