LogiCamms Limited ABN

Transcription

1 ABN Interim Financial Report 31 December

2 Contents Page Directors report 3 Lead auditor s independence declaration 5 Condensed consolidated statement of financial position 6 Condensed consolidated statement of comprehensive income 7 Condensed consolidated statement of changes in equity 8 Condensed consolidated statement of cash flows 9 Condensed notes to the consolidated financial statements 10 Directors declaration 15 Independent auditor s report on review of condensed consolidated interim financial report 16 2

3 Directors report For the period ended 31 December 2015 Your directors present their report together with the consolidated interim financial report on ( the Company ) and its controlled entities ( the Group ) for the half-year ended 31 December The directors of the Company during the whole of the half-year and up to the date of this report are: Non-Executive Mr Peter Watson Mr Peter Wall Mr Richard Robinson Mr Giles Everist (resigned on 4 December, 2015) Executive Mr Steve Banning The name of the company secretary in office at any time during or since the end of the interim period is: Mr Paul Bowker Review of operations The financial results for the half-year ended 31 December 2015 compare to the prior corresponding period ( pcp ) as follows: - Revenue decreased to $59.4 million (down from $69.3 million, a decrease of 14%) - Loss before tax of $24.3 million (down from $5.4 million profit, a decrease of 550%) - Loss after tax of $22.9 million (down from $4.4 million profit, a decrease of 620%) - EBITDAI 1 of $3.1 million (down from $6.8 million, a decrease of 54%) - EBITDAI 1 as a percentage of revenue was 5.2% (down from 9.8%). - Basic earnings per share was cents (down from 6.2 cents). The Company reported revenue of $59.4 million and an EBITDAI of $3.1m, a decrease of 14% and 54% respectively over the pcp. Competitive pressures amid challenging global economic conditions, including lower commodity prices impacting the Company s key markets, are reflected in the Group s result with margins below historical levels. In response to the current market environment, the Company has carried out a detailed assessment of its assets and has determined that it is appropriate to recognise a non-cash impairment to goodwill of $22.1m in the period. It is important to note that there has been no single major adverse event in the operations of the Company that has triggered the impairment to goodwill. In particular, the Company continues to operate with negligible write downs on projects or bad debts. The impairment has arisen as a result of continued pressures in LogiCamms core markets, predominately commodity linked oil and gas markets as well as minerals, such as iron ore. Separately, an analysis of the Company s lease positions has determined that the leases in Perth and Brisbane are onerous. In addition to the decline in market property lease rates, the Company s space requirements have reduced as a result of increasing numbers of staff working on client sites, establishment of dedicated Competency Training facilities in Perth and Brisbane, as well as overhead and operational efficiencies through the restructure process. Consequently, an increase of $4.2m to the existing provision has been made against those leases and recognised in the period. 1 The directors believe the presentation of certain non-ifrs financial measures is useful for the users of this document as they reflect the underlying financial performance of the Group. The non-ifrs financial profit measures are used by the Managing Director to review operations of the Group and include but are not limited to: EBITDAI Earnings before interest, tax, depreciation, goodwill impairment and losses on onerous leases. The above non-ifrs financial measure has not been subject to review or audit. This non-ifrs financial measure reconciles to the profit before and after income tax as reported in the Condensed Consolidated Income Statement on page 7 as follows. In millions of AUD 31 Dec Dec Net profit / (loss) before tax (24.3) 5.4 Net finance income - (0.1) Depreciation Onerous lease charge Goodwill impairment charge 22.1 _-_ EBITDAI

4 Directors report For the period ended 31 December 2015 Review of operations (continued) The Group s core business is consulting-based engineering and asset performance services, with other services including project delivery, in-field maintenance activities and training and competency assurance. The Company has repositioned the business over the course of the period around three core service streams of Consult, Deliver and Maintain ( CDM ), each of which operate across all of the Company s geographic locations and market sectors. The investment in the restructuring of the business to move from a geographic location based model to the Consult, Deliver and Maintain structure has been well received by customers and has provided significant diversification across the Company s core and expanded capabilities. The CDM structure underpins continued expansion into specialist consulting based services and an in field maintenance capability operating across the three key markets of hydrocarbons, minerals and metals and infrastructure. The Group continues to work with leading owners and operators of assets in these markets, and continuously works to reduce costs, increase efficiencies, and enhance the value of our customers operations. Minerals and Metals made up an increased share of the Group s revenue (42% compared to 29% for FY15) while Hydrocarbons has reduced from 64% to 48%. Infrastructure-related revenue has grown to represent 10% of total revenue. The Company has maintained a robust balance sheet with a net cash position of $12.5 million as at 31 December 2015 and no outstanding borrowings. Cash outflow from operations was $2.9m (compared to an inflow of $14.5m during the pcp) largely impacted by approximately $5.0 million of advance cash payments carried at 31 December 2014 against project precommitments and the outflow of $3.6m for the acquisitions of Monarc Environmental and Petromod Pty Ltd during the 2015 calendar year. The Group s major contract with Samsung C&T to provide Engineering, Procurement and Construction (EPC) services for the Roy Hill expansion is progressing to plan with completion scheduled for end of FY2016. A follow up project to the Group s major contract with Epic Energy on the Moomba to Adelaide gas pipeline is also progressing to plan with completion scheduled for early in the 2016 calendar year. LogiCamms training business, Competency Training, maintained market share in a contracting market as a result of reduced customer training budgets. Competency Training continues to be a recognised leader in specialised training and assurance services, particularly in electrical, high voltage, and hazardous area training. The Group continued its investment in people, systems, processes and market development activities in line with its strategic plan and in pursuit of its vision to be a market leader delivering outstanding customer solutions. Lead auditor s independence declaration The auditor s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 15 and forms part of the Directors report for the half-year ended 31 December Rounding off The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in this condensed interim financial report and the directors report have been rounded off to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the directors: Peter Watson Chairman Dated at Brisbane, Queensland this 23 rd day of February

5 Auditor s Independence Declaration As lead auditor for the review of for the half-year ended 31 December 2015, I declare that to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and b) no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of and the entities it controlled during the period. Michael Shewan Brisbane Partner 23 February 2015 PricewaterhouseCoopers PricewaterhouseCoopers, ABN Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: , F: , Liability limited by a scheme approved under Professional Standards Legislation.

6 Condensed consolidated statement of financial position As at 31 December 2015 In thousands of AUD Note 31 Dec Jun 2015 Assets Cash and cash equivalents 12,489 21,851 Trade and other receivables 26,406 22,976 Current tax asset 1, Total current assets 39,937 45,204 Investments in equity accounted investees Property, plant and equipment 3,761 4,153 Deferred tax assets 3,303 2,370 Intangible assets 11 39,401 56,305 Other non-current assets Total non-current assets 46,636 63,196 Total assets 86, ,400 Liabilities Trade and other payables 9,391 12,642 Employee benefits 5,203 5,356 Provisions 13 2,451 1,416 Deferred income 1,925 1,494 Total current liabilities 18,970 20,908 Trade and other payables 2, Employee benefits 1,192 1,137 Provisions 13 5,326 2,486 Total non-current liabilities 9,126 4,578 Total liabilities 28,096 25,486 Net assets 58,477 82,914 Equity Share capital 53,155 53,416 Reserves 2,108 1,001 Retained earnings 3,214 28,497 Total equity 58,477 82,914 The condensed notes on pages 10 to 14 are an integral part of these consolidated interim financial statements. 6

7 Condensed consolidated statement of comprehensive income For the six months ended 31 December Dec Dec 2014 In thousands of AUD Note Revenue 7 59,444 69,250 Cost of sales (37,507) (44,002) Gross profit 21,937 25,248 Other income Business development expenses (3,635) (2,122) Other expenses (16,971) (17,955) 1,904 5,698 Onerous lease expense 13 (4,200) (500) Results from operating activities (2,296) 5,198 Finance income Finance expenses (2) (2) Net finance income Share of profit / (loss) of equity accounted investee (2) 69 Impairment charge 11 (22,100) - Profit / (loss) before income tax (24,327) 5,372 Income tax benefit / (expense) 10 1,418 (1,018) Profit / (loss) for the period (22,909) 4,354 Other comprehensive income Items that may be reclassified to profit and loss Exchange rate differences on translation of foreign operation 1, Total comprehensive income for the period attributable to the Owners of the company (21,802) 4,951 Earnings per share: Basic earnings per share (cents per share AUD) (33.4) 6.2 Diluted earnings per share (cents per share AUD) (33.4) 6.1 The condensed notes on pages 10 to 14 are an integral part of these consolidated interim financial statements. 7

8 Condensed consolidated statement of changes in equity For the six months ended 31 December 2015 In thousands of AUD Note Share capital Translation reserve Retained earnings Total Equity Balance at 1 July ,416 1,001 28,497 82,914 Total comprehensive income for the period Profit or loss - - (22,909) (22,909) Other comprehensive income - 1,107-1,107 Total comprehensive income for the period - 1,107 (22,909) (21,802) Transactions with owners, recorded directly in equity Shares bought back Treasury shares (261) - - (261) Dividends to equity holders (2,410) (2,410) Share-based payment transactions Total transactions with owners (261) - (2,374) (2,635) Balance at 31 December ,155 2,108 3,214 58,477 For the six months ended 31 December 2014 In thousands of AUD Share capital Translation reserve Retained earnings Total Equity Balance at 1 July ,901 1,933 24,009 80,843 Total comprehensive income for the period Profit or loss - - 4,354 4,354 Other comprehensive income Total comprehensive income for the period ,354 4,951 Transactions with owners, recorded directly in equity Shares bought back (741) - - (741) Treasury shares Dividends to equity holders (2,465) (2,465) Share-based payment transactions - - (26) (26) Total transactions with owners (741) - (2,491) (3,232) Balance at 31 December ,160 2,530 25,872 82,562 The condensed notes on pages 10 to 14 are an integral part of these consolidated interim financial statements. 8

9 Condensed consolidated statement of cash flows For the period ended 31 December 2015 In thousands of AUD Note 31 Dec Dec 2014 Cash flows from operating activities Cash receipts from customers 59,097 74,891 Cash paid to suppliers and employees (61,985) (60,388) Cash (used by) / generated from operations (2,888) 14,503 Interest paid (2) (2) Income taxes paid (310) (471) Net cash from operating activities (3,200) 14,030 Cash flows from investing activities Interest received Proceeds from sale of property, plant and equipment - 13 Dividends and return of capital from equity accounted investee Acquisition of intangible assets 11 (1,350) (405) Acquisition of a business, net of cash acquired 12 (1,835) - Payment of earn out (500) - Acquisition of property, plant and equipment (74) (126) Net cash used in investing activities (3,486) (111) Cash flows from financing activities Proceeds from borrowings - 52 Investment in joint venture (5) - Acquisition of shares bought back - (741) Acquisition of treasury shares (261) - Repayment of borrowings - (12) Dividends paid 9 (2,410) (2,465) Net cash used in financing activities (2,676) (3,166) Net increase / (decrease) in cash and cash equivalents (9,362) 10,753 Cash and cash equivalents at 1 July 21,851 12,150 Cash and cash equivalents at 31 December 12,489 22,903 The condensed notes on pages 10 to 14 are an integral part of these consolidated interim financial statements. 9

10 Condensed notes to the consolidated financial statements 1. Reporting entity (the Company ) is a company domiciled in Australia. The condensed consolidated interim financial report of the Company as at and for the six months ended 31 December 2015 comprises the Company and its subsidiaries (together referred to as the Group ) and the Group s interest in associates and jointly controlled entities. The consolidated annual financial report of the Group as at and for the year ended 30 June 2015 is available upon request from the Company s registered office at 433 Boundary Street, Spring Hill, Queensland 4000, or at the Company s website: 2. Statement of compliance The consolidated interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act The consolidated interim financial report does not include all of the information required for a full annual financial report, and should be read in conjunction with the consolidated annual financial report of the Group as at and for the year ended 30 June 2015 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act Comparative information has been reclassified where appropriate to enhance comparability. This consolidated interim financial report was approved by the Board of Directors on 22 February The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with the Class Order, amounts in the financial report have been rounded off to the nearest thousand dollars, unless otherwise stated. 3. Estimates The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing this consolidated interim financial report, the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report as at and for the year ended 30 June Significant accounting policies The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except as set out below: (a) Changes in accounting policy The Group has not changed its accounting policies since the end of the previous financial year. 5. Financial risk management The Group s financial risk management objectives and policies are consistent with that disclosed in the consolidated financial report as at and for the year ended 30 June Subsequent events Subsequent to the end of the interim period, the Group has implemented a program of restructure which will result in approximately $6,000,000 of annual recurring overhead and operational costs being removed from the Group. Since the end of the interim period to the date of this report, $1,049,000 has been recognised as an expense in the Group s profit and loss statement in respect of this restructure. This program is due to be completed in March The total cost of the program is expected to be approximately $2,500,000 with estimated savings in the year ended 30 June 2016 of $2,000,

11 Condensed notes to the consolidated financial statements 7. Segment reporting The results and financial position of the Group s single operating segment, being engineering services, are prepared for the Managing Director on bases consistent with Australian Accounting Standards, and thus no additional disclosures in relation to the revenues, profit or loss, assets and liabilities and other material items have been made. The Company is domiciled in Australia, with operations located across Australia and in New Zealand. Revenue and non-current assets are attributed to the above regions based on the revenue earned and non-current assets owned by the subsidiaries domiciled in each region and are as follows: In thousands of AUD 31 Dec Dec 2014 Revenue Australia 52,290 55,268 New Zealand 7,154 13,982 59,444 69,250 In thousands of AUD 31 Dec Dec 2014 Non-current assets excluding deferred tax assets Australia 42,789 58,861 New Zealand ,333 59,694 Revenue from one customer of the Group amounts to greater than 10% of the Group s total revenues for the six months ended 31 December This one customer is in the Minerals and Metals sector and amounts to $13,243,000 (2014: one customer in the Hydrocarbons sector $7,891,000). The Group s single operating segment recognised an impairment charge of $22,100,000 for the half-year ended 31 December 2015 (2014: Nil) (refer note 11). 8. Other Income In thousands of AUD 31 Dec Dec 2014 Reduction in earn out payable Other Dividends The following dividends were declared and paid by the Group during the half-year: In thousands of AUD 31 Dec Dec September 2015: $0.035 per ordinary share 50% franked 2, September 2014: $0.035 per ordinary share fully franked - 2,465 2,410 2,465 11

12 Condensed notes to the consolidated interim financial statements 10. Income tax expense Income tax expense is recognised based on management s best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period. The Group s estimated consolidated effective tax rate for the six months ended 31 December 2015 was a benefit of 6% (six months ended 31 December 2014: 19%). Numerical reconciliation between tax expense and pre-tax accounting profit In thousands of AUD 31 Dec Dec 2014 Profit / (loss) for the period (22,909) 4,354 Total income tax (benefit) / expense (1,418) 1,018 Profit / (loss) before income tax (24,327) 5,372 Income tax/(benefit) using the Company s domestic tax rate of 30% (7,298) 1,612 Tax incentives current financial period (185) (500) Effect of tax rates in foreign jurisdictions 3 (17) Effect of foreign exchange losses in foreign jurisdictions (91) - Previous financial year adjustment (114) 67 Non-deductible expenses impairment 6,630 - Non-deductible expenses - other Non-assessable income (159) (156) Tax offsets (240) (12) Other 18 - Total income tax (benefit) / expense (1,418) 1,018 The difference between the actual income tax expense and the income tax expense using the Company s domestic rate of 30% is mainly attributable to the non-deductibility of an impairment charge, as well as, research and development tax incentives, tax offsets and prior period adjustments. The Company has recognised an accrual for potential research and development tax incentives for the current interim period. This estimate was based on an assessment of costs incurred during the interim period associated with projects that were eligible for the tax concession in the previous financial year and adding a conservative estimate of new projects that are expected to be eligible. 11. Intangible assets In thousands of AUD Carrying amount at 30 June 2015 Goodwill Systems & Software Cost 53,646 4,649 58,295 Accumulated amortisation - (1,990) (1,990) Carrying amount at 1 July ,646 2,659 56,305 Additions 3,581 1,350 4,931 Transfer from property, plant & equipment Effect of exchange rate movements Amortisation - (724) (724) Impairment (22,100) - (22,100) Carrying amount at 31 December ,037 3,364 39,401 Total 12

13 Condensed notes to the consolidated interim financial statements 11. Intangible assets Testing for impairment The carrying amount of the Group s assets, are reviewed at each reporting date to determine whether there is any indication of impairment, if any such indication exists, an impairment test is performed. The Group performs impairment testing of goodwill and intangibles with indefinite useful lives annually. While there has been no single adverse event in the operations of the Group that has triggered a review, there are several internal and external factors that indicated a review of the Group s assets was necessary during the reporting period, including the rapid and sharp decline in key commodity prices which has negatively impacted the specific markets in which key customers operate and the potential impacts this may have on the Company s performance. Inputs to impairment calculations The Value In Use calculation uses cash flow projections based on the Group s corporate plans and business forecasts prepared by management and approved by the Board. The corporate plans are developed annually and on the understanding that actual outcomes may differ from the assumptions used. For these calculations, adjustments are incorporated for the relevant industry metrics. In the circumstances that the Cash Generating Unit ( CGU ) is unable to achieve the forecast growth in earnings, there is a risk that the carrying value of the CGU would exceed its recoverable amount. Cash flow projections over the five year period, which are based on Group estimates, take into consideration historical performance as well as expected long term operating conditions. Growth rates do not materially exceed the consensus forecasts of the long term average growth rate for the market sector in which the CGU operates. The pre-tax discount rates are based on the weighted average cost of capital determined by prevailing or benchmarked market inputs, risk adjusted where necessary, and other assumptions are determined with reference to external sources of information and use consistent, conservative estimates for variables such as terminal cash flow multiples. Increases in discount rates or changes in other key assumptions, such as operating conditions or financial performance, may cause the recoverable amounts to fall below carrying values. EBITDA and projected margins are based on actual performance in prior years adjusted for expected efficiency improvements, including the impact of the business restructure and associated cost reductions. Impairment charge The Group has conducted an assessment of the carrying value of its net assets and has determined that it is appropriate to recognise an impairment to goodwill of $22,100,000, reducing the goodwill balance to $36,037,000 (June 2015 $53,646,000). Impairment calculations Assets are impaired if their carrying value exceeds their recoverable amount. The recoverable amount of an asset or CGU is determined as the higher of its fair value less costs of disposal or Value In Use. The Group operates as one segment and is treated as one CGU. The recoverable amount of the goodwill is based on a Value In Use calculation with respect to the CGU and was determined by applying a five year net present value calculation of projected cash flows and a terminal value at the end of the fifth year. The calculation of Value In Use was determined having regard to the following key assumptions: A pre-tax discount rate applied to cash flows of 19.29% (2015: 17.94%) to reflect the level of risk to the CGU Expected future profits for the first year based on internal financial forecasts and reflect management s expectations of continued growth Cost savings from the restructure (see note 6) Future nominal revenue growth of 3% per year for years two to five (2015: 5.0%) After the fifth year a terminal value was applied using a growth rate of 2.5% (2015: 2.5%) The recoverable value of the CGU is particularly sensitive to the changes in discount rate, the level of EBITDA over the 5 year forecast period, and the forecast long-term EBITDA that drives terminal value. As the goodwill for the LogiCamms CGU is carried at its Value In Use assessment, any variation to the key assumptions used to determine Value In Use, would result in a change to the assessed Value In Use. 13

14 Condensed notes to the consolidated interim financial statements 12. Acquisitions On 8 July 2015, the Group acquired 100% of a business called Petromod Pty Ltd ( Petromod ) for $3,998,000. The consideration paid was comprised of $2,198,000 cash and the accrual of a profit earn out of $1,800,000. Cash acquired was $363,000 leaving a net cash outflow for the acquisition of $1,835,000. The fair value of identifiable net assets acquired totalled $417,000 and acquired goodwill totalled $3,581,000. The earn out is contingent upon achievement of earnings above historical levels to drive out-performance. The contribution of Petromod to the consolidated Group profit for the period was not material. The acquisition is expected to provide the Group with expertise in maintenance services in the Hydrocarbons industry. The accounting for the acquisition of Petromod has been completed on a provisional basis. Further analysis will be completed during the 12 months post acquisition. The Group has subsequently considered reasonable sensitivities in relation to the achievement of the performance targets and, based on those sensitivities, no adjustments were made to deferred consideration payable to Petromod outside of measurement period adjustments. The deferred consideration payable at period end was $1,800,000, which is included in non-current trade and other payables. The deferred consideration is level 3 on the fair value hierarchy. 13. Provisions 31 Dec June 2015 Current $ 000 $ 000 Warranty Onerous lease 1,839 1,104 2,451 1,416 Non-Current Lease make good 1,283 1,190 Onerous lease 4,043 1,296 5,326 2,486 The movement in current and non-current onerous lease provisions for the period is shown below. In thousands of AUD Dec 2015 Carrying amount at 1 July ,400 New provisions raised 4,200 Unwind of provision to the profit and loss statement (718) Carrying amount at 31 December ,882 14

15 Directors declaration In the opinion of the directors of LogiCamms Ltd ( the Company ): 1 the financial statements and notes set out on pages 6 to 14, are in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the Group s financial position as at 31 December 2015 and of its performance for the six month period ended on that date; and (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and 2 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 in accordance with a resolution of the directors: Peter Watson Chairman Dated at Brisbane, Queensland this 23 rd day of February

16 Independent auditor s review report to the members of Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of (the Company), which comprises the condensed consolidated statement of financial position as at 31 December 2015, the condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors' declaration for (the consolidated entity). The consolidated entity comprises the company and the entities it controlled during that halfyear. Directors' responsibility for the half-year financial report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error. 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 Australian Auditing Standard on Review Engagements ASRE 2410 Review of a 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 2015 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 As the auditor of LogiCamms Limited, 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. 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. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act PricewaterhouseCoopers, ABN Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: , F: , Liability limited by a scheme approved under Professional Standards Legislation.

17 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 is not in accordance with the Corporations Act 2001 including: a) giving a true and fair view of the consolidated entity s financial position as at 31 December 2015 and of its performance for the half-year ended on that date; b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations PricewaterhouseCoopers Michael Shewan Brisbane Partner 23 February 2016