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1 Appendix 4D Half-year report 1. Company details Name of entity: ABN: Reporting period: For the half-year ended Previous period: For the half-year ended 30 June Results for announcement to the market Revenues from ordinary activities up 6.0% to 4,664 Loss from ordinary activities after tax attributable to the owners of down 865.1% to (329) Loss for the half-year attributable to the owners of down 865.1% to (329) Earnings Before Interest, Tax, Depreciation and Amortisation down 88.4% to 47 Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The earnings before interest, tax, depreciation and amortisation ('EBITDA'), was a profit of $47,000 (2015: $406,000). EBITDA is a financial measure which is not prescribed by Australian Accounting Standards ( AAS ) and represents the profit under AAS adjusted for non-specific non-cash and significant items. The directors consider EBITDA to reflect the core earnings of the consolidated entity. $'000 Consolidated 30 Jun Jun 2015 $'000 $'000 Sales revenue 4,656 4,396 Profit/(loss) after tax for the year (329) 43 Add: depreciation and amortisation Less: interest revenue (8) (4) Add: finance costs 23 6 Less: tax benefit (125) (118) Adjusted EBITDA Refer to Chairman's letter and 'Review of operations' within the Directors' report of the Interim Report for further commentary on the results. 3. Net tangible assets Reporting period Cents Previous period Cents Net tangible assets per ordinary security (0.24) (0.19)

2 Appendix 4D Half-year report 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial period. Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Dividend reinvestment plans Not applicable. 8. Details of associates and joint venture entities Not applicable. 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit qualification or review Details of audit/review dispute or qualification (if any): The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report. 11. Attachments Details of attachments (if any): The Interim Report of for the half-year ended is attached. 12. Signed Signed Date: 19 August 2016 Niall Cairns Non-Executive Chairman Sydney

3 ABN Interim Report -

4 Contents Chairman's letter 2 Directors' report 4 Auditor's independence declaration 7 Statement of profit or loss and other comprehensive income 8 Statement of financial position 10 Statement of changes in equity 11 Statement of cash flows 12 Notes to the financial statements 13 Directors' declaration 18 Independent auditor's review report to the members of 19 1

5 Chairman's letter Chairman s letter Dear fellow shareholders, It is a pleasure that a more focused and cohesive (ComOps) delivers positive EBITDA of $47,000 and continuing revenue growth for the first half of 2016 (1H16). Driven by increasing recurring revenues, upgrading of customer contracts, good cost control and capitalisation of the Ports development expenditure the highlights are: - Revenue increasing by 6% on 1H15 and 23% on 2H15, to $4.7 million; - Significant new customer contracts won; - Recurring revenue increasing by 18% on 1H15 and 12% on 2H15 to $3 million; - Recurring revenue increasing to >66% of revenue; - Capitalisation of Ports development expenditure; - EBITDA now positive ($47,000) and above budget; - Operating cash flow on budget and positive in Q2; and - Cash balances of $1.5 million at 30 June. The increasing strength of the business is shown by the solid increase in recurring revenue, which increased by 12% over last half and from 60% to >66% of revenue. This is expected to continue growing in 2H due to natural growth, new customers going live and the contribution of the Rostima acquisition. Operationally the business has continued to make significant progress, for example in support, where open tickets are at a record low. Another major step forward has been the newly developed clarity of the ComOps technology roadmap, which covers the full spectrum of ComOps customers and solutions. Now with a clear technology roadmap, ComOps has managed the expansion of the development program, the building of the team and has significantly increased productivity. In addition, this greater clarity has enabled management to better manage timelines and identify project specific R&D that should be capitalised in this case, the upgrading and enhancement of the ComOps Ports WFM solution. In another step towards streamlining the business and gaining modest benefits of scale as the group grows globally it is consolidating its brands into ComOps WFM Retail, Hospitality, Health, Ports etc. At this point it is worthwhile looking back to where ComOps has come from over the last few years. The group has grown significantly financially, in market reach and in customer metrics as the following table shows: # 30 June June June 2016 Change 2014 to 2016 Customers 47 >150 >165 >250% Sites 62 >5,700 >5,760 >9,100% Users 162,000 >275,000 >285,000 >75% Staff 242,000 >370,000 >385,000 >56% Following the etivity acquisition in 2014, which grew ComOps locally in Australia, it was the Rostima acquisition (Sept15) that catapulted ComOps into being a true global, albeit still small, business. Rostima brought to the group two divisions (Aviation and Ports) and offices in UK and Malaysia servicing blue chip customers in North America, UK, Africa, Europe and the Middle East. The Aviation business has good growth potential and new sales and implementation resources are being hired. The Ports technology and business base neatly dovetails with the ComOps Ports business and together provides the base from which we are developing the enhanced ComOps Ports solution to build a global leadership position and a significantly larger global business. In summary, ComOps has delivered solid growth in 1H 2016 with recurring revenues growing 18% to >66% of revenues (which also grew 6%) and a small positive EBITDA. This is whilst CEO, Gerry Williams and his team continued to build the foundations for the next stage of growth. Looking forward, we have a positive outlook and expect revenue growth, especially recurring revenues, to continue as new customers go live and the benefits of Rostima s contribution in 2H are earned. In addition, there is confidence that the initial returns on the Ports strategy will start flowing. 2

6 Chairman's letter Finally, I would like to thank Gerry Williams, Chris Brooke, the expanded ComOps team and my fellow non-executive directors, Phillip Carter, Neil Docherty and the newly appointed Matthew Michalewicz for their efforts in delivering the growth and building the new, clearer, more focused and cohesive business that we have today. Niall Cairns Non-Executive Chairman 19 August 2016 Sydney 3

7 follows:for personal use only Directors' report The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended. Directors The following persons were directors of during the whole of the financial half-year and up to the date of this report, unless otherwise stated: Mr Niall Cairns Non-Executive Chairman Dr Phillip Carter Non-Executive Director Mr Neil Docherty Non-Executive Director Mr Matthew Michalewicz Non-Executive Director (appointed on 21 March 2016) Mr Andrew Roberts Non-Executive Director (resigned on 17 May 2016) Principal activities During the financial half-year the principal activities of the consolidated entity consisted of the provision of workforce management software and services for Australian and international customers. Offices in Australia, Malaysia and the United Kingdom support over 180 customers and over 5,800 locations globally in Asia Pacific ('APAC'), Europe, Middle East and Africa ('EMEA') and North America. The consolidated entity, under the brand names etivity, Microster, Rostima and Salvus, provides effective Workforce Management Solutions including rostering and scheduling, award interpretation, labour cost management, fatigue risk management, leave management, time and attendance, employee self service portals, risk management and safety compliance and workforce analytics. The consolidated entity delivers substantial financial and operational advantage by aligning people, productivity and performance, making workforces more productive, reducing fixed and variable overheads, and increasing profitability. The consolidated entity has clients in global ports, aviation, security, transportation, health, childcare, government, retail and hospitality. Dividends There were no dividends paid, recommended or declared during the current or previous financial half-year. Review of operations During the half-year ended the consolidated entity has continued to grow top line revenue, despite not benefiting from recently signed new logo customers. Top line revenues are expected to benefit in the second half of 2016 as new customer revenues are recognised in accordance with Australian Accounting Standards and the company s revenue recognition policy. The earnings before interest, tax, depreciation and amortisation ('EBITDA'), was a profit of $47,000 (2015: $406,000). EBITDA is a financial measure which is not prescribed by Australian Accounting Standards ( AAS ) and represents the profit under AAS adjusted for non-specific non-cash and significant items. The directors consider EBITDA to reflect the core earnings of the consolidated entity. Highlights of the consolidated entity's financial statements covering the financial half-year ended are as 4

8 Directors' report Consolidated 30 Jun Jun 2015 $'000 $'000 Sales revenue 4,656 4,396 Profit/(loss) after tax for the year (329) 43 Add: depreciation and amortisation Less: interest revenue (8) (4) Add: finance costs 23 6 Less: tax benefit (125) (118) Adjusted EBITDA First half highlights include: Revenues from ordinary activities up 6% to $4,664,000 Cash balances continue to remain at solid levels - $1,484,000 at Continued fast tracked investment in operating capability and development of the consolidated entity s new WFM product Capitalisation of $493,000 in development costs associated with the new WFM product The consolidated entity commenced the development of ComOps WFM Ports in February 2016, which is being developed as a fully web enabled workforce management product that is designed to be delivered as SaaS or an on-site implementation. The focus on optimising staff scheduling as well as asset utilisation provides customers with a new level of productivity beyond that traditionally delivered by WFM systems. The Company is initially targeting Container Port Operators across the globe. The planned market release of ComOps WFM - Ports is in the 2nd half of the 2016 calendar year, and the board of directors now consider it appropriate to capitalise the development costs associated with the new ComOps WFM Ports product. The consolidated entity maintains its position of being well placed to deliver the ongoing benefits of a stable, operationally positive and growing business for is customers and staff, which in turn provides the base to deliver positive returns to all stakeholders and shareholders. The consolidated entity is well positioned to continue to grow its Workforce Management Solutions business globally, with a focus on ports, aviation, transport, security and services retail and hospitality Significant changes in the state of affairs There were no significant changes in the state of affairs of the consolidated entity during the financial half-year. Rounding of amounts The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. 5

9 Directors' report This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act On behalf of the directors Niall Cairns Non-Executive Chairman Phillip Carter Non-Executive Director 19 August 2016 Sydney 6

10 Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 Auditor s Independence Declaration To The Directors of T F E info.nsw@au.gt.com W In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of for the half-year ended, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and no contraventions of any applicable code of professional conduct in relation to the review. GRANT THORNTON AUDIT PTY LTD Chartered Accountants M R Leivesley Partner - Audit & Assurance Sydney, 19 August 2016 Grant Thornton Audit Pty Ltd ACN a subsidiary or related entity of Grant Thornton Australia Ltd ABN Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another s acts or omissions. In the Australian context only, the use of the term Grant Thornton may refer to Grant Thornton Australia Limited ABN and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 7

11 Statement of profit or loss and other comprehensive income For the half-year ended Consolidated Note 30 Jun Jun 2015 $'000 $'000 Revenue 4 4,664 4,400 Research and development rebate Expenses Materials - clocks (43) (25) Employee benefits expense (3,207) (2,867) Consultancy and legal fees (351) (704) Directors' fees (150) (84) Depreciation and amortisation expense (486) (479) Accounting and professional fees (264) (156) Occupancy expenses (156) (200) IT hosting expenses (358) (255) Travel expenses (119) (91) Other expenses (187) (133) Finance costs (23) (6) Loss before income tax benefit from continuing operations (454) (72) Income tax benefit Profit/(loss) after income tax benefit from continuing operations (329) 46 Loss after income tax expense from discontinued operations - (3) Profit/(loss) after income tax benefit for the half-year attributable to the owners of (329) 43 Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation 85 - Other comprehensive income for the half-year, net of tax 85 - Total comprehensive income for the half-year attributable to the owners of (244) 43 Total comprehensive income for the half-year is attributable to: Continuing operations (244) 46 Discontinued operations - (3) (244) 43 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 8

12 Statement of profit or loss and other comprehensive income For the half-year ended Consolidated Note 30 Jun Jun 2015 $'000 $'000 Cents Cents Earnings per share for profit/(loss) from continuing operations attributable to the owners of Basic earnings per share 9 (0.0459) Diluted earnings per share 9 (0.0459) Earnings per share for loss from discontinued operations attributable to the owners of Basic earnings per share 9 - (0.0005) Diluted earnings per share 9 - (0.0005) Earnings per share for profit/(loss) attributable to the owners of ComOps Limited Basic earnings per share 9 (0.0459) Diluted earnings per share 9 (0.0459) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 9

13 Statement of financial position As at Consolidated Note 30 Jun Dec 2015 $'000 $'000 Assets Current assets Cash and cash equivalents 1,484 2,436 Trade and other receivables 1,192 1,222 Income tax refund due Work in progress Prepayments Total current assets 3,623 4,150 Non-current assets Property, plant and equipment Intangibles 5 7,228 7,139 Security deposits Total non-current assets 7,628 7,581 Total assets 11,251 11,731 Liabilities Current liabilities Trade and other payables 1,549 1,616 Provisions Contingent consideration Deferred maintenance revenue 1,763 1,631 Total current liabilities 4,198 4,296 Non-current liabilities Payables Deferred tax 1,300 1,440 Provisions Total non-current liabilities 1,512 1,650 Total liabilities 5,710 5,946 Net assets 5,541 5,785 Equity Issued capital 36,553 36,553 Reserves Accumulated losses (31,469) (31,140) Total equity 5,541 5,785 The above statement of financial position should be read in conjunction with the accompanying notes 10

14 Statement of changes in equity For the half-year ended Issued Accumulated capital Reserves losses Total equity Consolidated $'000 $'000 $'000 $'000 Balance at 1 January , (27,352) 7,496 Profit after income tax benefit for the half-year Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year Balance at 30 June , (27,309) 7,539 Issued Accumulated capital Reserves losses Total equity Consolidated $'000 $'000 $'000 $'000 Balance at 1 January , (31,140) 5,785 Loss after income tax benefit for the half-year - - (329) (329) Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year - 85 (329) (244) Balance at 36, (31,469) 5,541 The above statement of changes in equity should be read in conjunction with the accompanying notes 11

15 Statement of cash flows For the half-year ended Consolidated Note 30 Jun Jun 2015 $'000 $'000 Cash flows from operating activities Receipts from customers (inclusive of GST) 5,300 4,954 Payments to suppliers (inclusive of GST) (5,704) (5,245) Interest received 8 1 Interest and other finance costs paid (23) (2) Research and development grants Net cash from/(used in) operating activities (419) 192 Cash flows from investing activities Payments for property, plant and equipment (21) (65) Payments for intangibles 5 (503) - Payments for security deposits (9) - Other - etivity Solutions Net cash from/(used in) investing activities (533) 385 Cash flows from financing activities Net cash from financing activities - - Net increase/(decrease) in cash and cash equivalents (952) 577 Cash and cash equivalents at the beginning of the financial half-year 2, Cash and cash equivalents at the end of the financial half-year 1, The above statement of cash flows should be read in conjunction with the accompanying notes 12

16 Notes to the financial statements Note 1. General information The financial statements cover ('company' or 'parent entity') as a consolidated entity consisting of and the entities it controlled at the end of, or during, the financial half-year ('consolidated entity). The financial statements are presented in Australian dollars, which is 's functional and presentation currency. is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level Arthur Street North Sydney NSW 2060 A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 19 August Note 2. Significant accounting policies These general purpose financial statements for the interim half-year reporting period ended have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 31 December 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 The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. New, revised or amending Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity during the financial half-year ended and are not expected to have any significant impact for the full financial year ending 31 December Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Going concern As at the consolidated entity had a working capital deficiency of $575,000 (31 December 2015: $146,000) and reported a net loss after tax for the half-year of $329,000 (half-year ended 30 June 2015: profit of $43,000) and operating cash outflows of $419,000 (half-year ended 30 June 2015: operating cash inflows of $192,000) for the half-year. Notwithstanding the current net asset deficiency of $575,000 as at, the directors have prepared the financial statements on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. Included in current liabilities at is deferred maintenance revenue and lease incentives amounting to $1,964,000, which are not expected to result in any additional future cash outflows over and above existing budgeted outflows. On this basis, the directors are confident of the consolidated entity's ability to continue as a going concern. Comparatives The comparatives in profit or loss has been reclassified where necessary to align with the current period presentation. There has been no effect on the loss of the period. 13

17 Notes to the financial statements Note 3. Operating segments Identification of reportable operating segments The consolidated entity is organised into one operating segment being workforce management. This operating segment is based on the internal reports that are reviewed and used by the Chief Executive Officer and Chief Financial Officer (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments. The workforce management business focuses on providing effective workforce management solutions including rostering and scheduling, award interpretation, labour cost management, fatigue risk management, leave management, time and attendance, employee self-service portals, risk management and safety compliance and workforce analytics. The software central to this business is Microster (workforce management solutions), etivity (workforce management solutions), Rostima (workforce management solutions) and Salvus (safety, risk and claims solutions). The operating segment information is the same information as provided throughout the financial statements and therefore not duplicated. Note 4. Revenue Consolidated 30 Jun Jun 2015 $'000 $'000 Sales revenue Sale of software Rendering of services 4,172 3,833 Sale of goods ,656 4,396 Other revenue Interest 8 4 Revenue 4,664 4,400 Note 5. Non-current assets - intangibles Consolidated 30 Jun Dec 2015 $'000 $'000 Goodwill - at cost 16,584 16,584 Less: Impairment (14,242) (14,242) 2,342 2,342 Capitalised development software - at cost Software - at cost 5,131 5,121 Less: Accumulated amortisation (1,538) (1,200) 3,593 3,921 Customer relationships - at cost 1,071 1,071 Less: Accumulated amortisation (271) (195) ,228 7,139 14

18 Notes to the financial statements Note 5. Non-current assets - intangibles (continued) Reconciliations Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below: Capitalised development Customer Goodwill software Software relationships Total Consolidated $'000 $'000 $'000 $'000 $'000 Balance at 1 January ,342-3, ,139 Additions Amortisation expense - - (338) (76) (414) Balance at 2, , ,228 Note 6. Equity - dividends There were no dividends paid, recommended or declared during the current or previous financial half-year. Note 7. Fair value measurement Fair value hierarchy The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3: Unobservable inputs for the asset or liability Level 1 Level 2 Level 3 Total Consolidated - 30 Jun 2016 $'000 $'000 $'000 $'000 Liabilities Contingent consideration * Total liabilities Level 1 Level 2 Level 3 Total Consolidated - 31 Dec 2015 $'000 $'000 $'000 $'000 Liabilities Contingent consideration * Total liabilities * Contingent consideration relates to the acquisition of the business assets of Rostima Ltd and is included as a liability in the statement of financial position. There were no transfers between levels during the financial half-year. 15

19 Notes to the financial statements Note 7. Fair value measurement (continued) Level 3 assets and liabilities Movements in level 3 assets and liabilities during the current financial half-year are set out below: Contingent consideration Total Consolidated $'000 $'000 Balance at 1 January Foreign exchange impact (22) (22) Balance at Note 8. Contingent liabilities The consolidated entity has a bank guarantee in place with St. George Bank which amounts to $124,000 (31 December 2015: $124,000) Note 9. Earnings per share Consolidated 30 Jun Jun 2015 $'000 $'000 Earnings per share for profit/(loss) from continuing operations Profit/(loss) after income tax attributable to the owners of (329) 46 Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 716,753, ,230,377 Weighted average number of ordinary shares used in calculating diluted earnings per share 716,753, ,230,377 Cents Cents Basic earnings per share (0.0459) Diluted earnings per share (0.0459) Consolidated 30 Jun Jun 2015 $'000 $'000 Earnings per share for loss from discontinued operations Loss after income tax attributable to the owners of - (3) Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 716,753, ,230,377 Weighted average number of ordinary shares used in calculating diluted earnings per share 716,753, ,230,377 Cents Cents Basic earnings per share - (0.0005) Diluted earnings per share - (0.0005) 16

20 Notes to the financial statements Note 9. Earnings per share (continued) Consolidated 30 Jun Jun 2015 $'000 $'000 Earnings per share for profit/(loss) Profit/(loss) after income tax attributable to the owners of (329) 43 Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 716,753, ,230,377 Weighted average number of ordinary shares used in calculating diluted earnings per share 716,753, ,230,377 Cents Cents Basic earnings per share (0.0459) Diluted earnings per share (0.0459) ,565,380 (2015: 37,000,000) options on issue have been excluded from the weighted average number of ordinary shares used in calculating diluted earnings per share as they are considered anti-dilutive. Note 10. Events after the reporting period No matter or circumstance has arisen since that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. 17

21 Directors' declaration In the directors' opinion: the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at and of its performance for the financial half-year ended on that date; and 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 directors made pursuant to section 303(5)(a) of the Corporations Act On behalf of the directors Niall Cairns Non-Executive Chairman Phillip Carter Non-Executive Director 19 August 2016 Sydney 18

22 Level 17, 383 Kent Street Sydney NSW 2000 Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230 Independent Auditor s Review Report To the Members of T F E info.nsw@au.gt.com W We have reviewed the accompanying half-year financial report of ( the Company ), which comprises the consolidated financial statements being the statement of financial position as at, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year s end or from time to time during the half-year. Directors responsibility for the half-year financial report The directors of are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls 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 consolidated half-year financial report based on our review. We conducted our review in accordance with the 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 half-year 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 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, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. Grant Thornton Audit Pty Ltd ACN a subsidiary or related entity of Grant Thornton Australia Ltd ABN Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another s acts or omissions. In the Australian context only, the use of the term Grant Thornton may refer to Grant Thornton Australia Limited ABN and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. 19

23 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 complied with the independence requirements of the Corporations Act 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 b giving a true and fair view of the consolidated entity s financial position as at 30 June 2016 and of its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations Material uncertainty regarding going concern Without qualification to the conclusion expressed above, we draw attention to Note 2 in the financial report which indicates that the consolidated entity incurred a loss after tax of $329,000 and operating cash outflows of $419,000 from continuing operations during the period ended and, as of that date, the consolidated entity s current liabilities exceeded its current assets by $575,000. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. GRANT THORNTON AUDIT PTY LTD Chartered Accountants M R Leivesley Partner - Audit & Assurance Sydney, 19 August