ACUMENTIS GROUP LIMITED — Interim / Quarterly Report 2021

Feb 11, 2021

Appendix 4D

Half Year Report

Given in accordance with ASX Listing Rule 4.2A

Acumentis Group Limited (ASX: ACU)

ACN 102 320 329

Results for announcement to the market

The information provided in the Half-Yearly Report should be read in conjunction with the Company’s 2020 Annual Financial Report

		Change	Change
		$’000	%			$’000
Revenue from continuing operations	Up	6,166	37%	to	22,998
Profit before tax from continuing operations	Up	5,896	133%	to		1,465
Profit after tax from continuing operations	Up	4,487	130%	to		1,033
Profit after tax attributable to members	Up	4,487	130%	to		1,033
Dividends		Amount per	Franked amount per
		security	security at 26% tax
Interim dividend – Ordinary	Cents	0.00			0.00
Previous corresponding period
Interim dividend – Ordinary	Cents	0.00			0.00
Record date for determining entitlements to	dividends				n/a
Payment date for dividends					n/a
		31 Dec	30 Jun		31 Dec
		2020	2020			2019
Net tangible asset backing per share	Cents	1.27	0.64			0.14
Details of Associates		31 Dec	30 Jun		31 Dec
Acumentis (WA) Holdings Pty Ltd		2020	2020			2019
Shareholding	%	42.2%	42.2%			42.2%
		31 Dec	30 Jun		31 Dec
		2020	2020			2019
		6 months	12 months		6	months
Share of net profit / (loss) of associates	$’000	174	(86)			(207)

Acumentis Group Limited

ACN 102 320 329

Half Year Financial Report

For the 6 months ended 31 December 2020

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Half Year Report Period ended 31 December 2020

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Contents

Directors’ Report ...................................................................................................................... 2	Directors’ Report ...................................................................................................................... 2
Auditor’s Independence Declaration ......................................................................................... 5
Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................ 6
Consolidated Statement of Financial Position ............................................................................ 7
Consolidated Statement of Changes in Equity ............................................................................ 8
Consolidated Statement of Cashflows ....................................................................................... 9
Notes	to the Consolidated Financial Statements ....................................................................... 10
1.	Significant accounting policies ...................................................................................................................... 10
2.	Revenue from operations .............................................................................................................................. 10
3.	Significant revenue and expense items......................................................................................................... 11
4.	Segment reporting ......................................................................................................................................... 11
5.	Income tax ..................................................................................................................................................... 11
6.	Earnings per share ......................................................................................................................................... 12
7.	Trade and other receivables .......................................................................................................................... 12
8.	Other current assets ...................................................................................................................................... 13
9.	Deferred tax balances ................................................................................................................................... 13
10.	Plant & equipment ......................................................................................................................................... 14
11.	Right of Use Assets ........................................................................................................................................ 15
12.	Intangible assets ........................................................................................................................................... 16
13.	Investments in associated companies using the equity method .................................................................. 17
14.	Trade and other payables .............................................................................................................................. 17
15.	Borrowings ..................................................................................................................................................... 17
16.	Lease Liabilities ............................................................................................................................................. 18
17.	Employee Benefits ......................................................................................................................................... 19
18.	Provisions ...................................................................................................................................................... 19
19.	Issued Capital ................................................................................................................................................ 20
20.	Other Reserves .............................................................................................................................................. 21
21.	Going Concern ............................................................................................................................................... 22
Directors’ Declaration ............................................................................................................. 23

Independent Auditors Review Report to the members of Acumentis Group Limited .................... 24

Acumentis Group Limited ACN 102 320 329

Page 1

Half Year Report Period ended 31 December 2020

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Directors’ Report

The directors submit the financial report of the Consolidated Entity (comprising Acumentis Group Limited and its controlled entities) for the half year ended 31 December 2020.

Directors

The Directors of the company in office at any time during or since the end of the half year are:

	Appointed	Resigned
Bradley Piltz	26 September 2002
Non-Executive Director
Stephen Maitland OAM RFD	1 February 2018	28 October 2020
Non-Executive, Independent Director
Keith Perrett	1 February 2018
Non-Executive, Independent Director & Chair
Andrea Staines OAM	26 September 2019
Non-Executive, Independent Director
Patrice Sherrie	1 November 2020
Non-Executive, Independent Director
Timothy Rabbitt	10 December 2020
Executive Director & CEO

Principal Activities

The principal activities of the Consolidated Entity during the period were property valuation & advisory services. There were no significant changes in the nature of the activities of the Consolidated Entity during the period.

Review of Operations Financial results

Revenues, profits and cashflows continued to improve following the recovery of the business from the impacts of the cyber-attacks in early 2019.

Whilst the COVID-19 pandemic had some adverse impacts on trading, particularly in State border regions where travel restrictions affected our ability to deliver services on occasions, the business has largely returned to normal operations albeit with increased flexibility in staff working remotely.

Overall revenues from delivery of services were 31% up on the comparative period whilst nonemployee expenses were reduced by approximately 7%. Together with the support of the first tranche of JobKeeper, this has enabled the business to return to profitability for the half year.

Acumentis Group Limited ACN 102 320 329

Page 2

Half Year Report Period ended 31 December 2020

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Business overview

The business operates across the following key sectors:

• Metropolitan residential mortgage and non-mortgage valuations

• Metropolitan commercial mortgage and non-mortgage valuations

• Regional & rural mortgage and non-mortgage valuations

• Government valuations

• Property advisory

The business continues to expand its services in related property professional sectors and geographies throughout Australia.

Interim dividend

The directors do not recommend payment of an interim dividend (31 December 2019: 0.00 cents).

The directors do not anticipate payment of a full year dividend, however, will evaluate this when the full year results are known.

Outlook

With the continued investment in IT and information security evidenced by ISO27001 (the international standard for information security management systems) and IRAP (Information Security Registered Assessor Program administered by the Australian Cyber Security Centre) certifications, reinstatement on client panels, growth of the wholly owned commercial valuation business in Sydney and nationally, ongoing support from our Government clients and expansion of the regional and rural capabilities, the business is in a strong position to continue its new growth trajectory through FY2021 and beyond.

Events subsequent to the end of the reporting period

There are no significant subsequent events.

Auditor’s Independence Declaration under section 307C of the Corporations Act 2001

The Lead Auditor’s Independence Declaration is set out on page 5 and forms part of the Directors’ report for the half year ended 31 December 2020.

Rounding of amounts to the nearest thousand dollars

The Consolidated Entity has applied the relief available under ASIC Instrument 2016/191 and accordingly, amounts in the financial statements and directors’ report have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Going Concern

The directors are satisfied that the going concern basis of preparation is appropriate and therefore the financial information does not include any adjustments relating to the recoverability or classification of recorded asset amounts or to the amounts or classification of liabilities that might be necessary should the company not be able to continue as a going concern.

Acumentis Group Limited ACN 102 320 329

Page 3

Half Year Report Period ended 31 December 2020

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An explanation of the rationale for the directors’ assertion is included in Note 21 to the Financial Report.

Comparative Numbers

The Half Year Report includes comparative numbers for both the corresponding half year as well as for the previous full year. Values are presented as follows:

• Profit & Loss disclosures – for the 6 months to December 2020, the 6 months to December 2019 and the 12 months to June 2020.

• Balance Sheet disclosures – as at 31 December 2020, 30 June 2020 and 31 December 2019.

Signed in accordance with a resolution of the Board of Directors.

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Keith Perrett Chair

11 February 2021

Acumentis Group Limited ACN 102 320 329

Page 4

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Acumentis Group Limited

Auditor’s independence declaration under section 307c of the Corporations Act 2001

I declare that, to the best of my knowledge and belief, during the half year ended 31 December 2020 there have been:

• No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• No contraventions of any applicable code of professional conduct in relation to the review.

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William Buck

Accountants & Advisors

ABN: 16 021 300 521

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L E. Tutt Partner

Sydney, 11 February 2021

ACCOUNTANTS & ADVISORS

Sydney Office Level 29, 66 Goulburn Street Sydney NSW 2000

Parramatta Office Level 7, 3 Horwood Place Parramatta NSW 2150

Telephone: +61 2 8263 4000 williambuck.com

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William Buck is an association of firms, each trading under the name of William Buck across Australia and New Zealand with affiliated offices worldwide. Liability limited by a scheme approved under Professional Standards Legislation. (WB013_2007)

Half Year Report Period ended 31 December 2020

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Consolidated Statement of Profit or Loss and Other Comprehensive Income

Notes Revenue from operations 2 Expenses from operations Employment expenses Software, printing and report delivery Marketing Communications Insurance Administration Occupancy Depreciation, amortisation & impairment Impairment of right of use assets 11 Other operating expenses Results from operating activities Financial income Financial expenses Net financing (expense) / income Share of net profit / (loss) of associates accounted for using the equity method Profit/ (Loss) before income tax Income tax (Expense) / Benefit 5 Profit / (Loss) for the period attributable to members of the parent entity Total other comprehensive income (net of tax) Total comprehensive income / (loss) for the period attributable to members of the parent entity Earnings per share 6 Basic earnings per share Diluted earnings per share	31 Dec 20 6 months $’000 31 Dec 19 6 months $’000 30 Jun 20 12 months $’000 22,998 16,832 39,285
	15,361 14,151 29,122 1,307 1,353 2,694 254 202 374 415 364 710 1,215 1,179 2,271 523 830 1,418 261 424 771 1,074 1,007 2,078 131 182 497 980 1,104 1,817
	21,521 20,796 41,752
	1,477 (3,964) (2,467)
	2 - 18 (188) (260) (494)
	(186) (260) (476)
	174 (207) (86)
	1,465 (4,431) (3,029) (432) 977 474
	1,033 (3,454) (2,555) - - -
	1,033 (3,454) (2,555)
	0.66 cents (2.56 cents) (1.76 cents)
	0.65 cents (2.56 cents) (1.76 cents)

The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the notes to and forming part of the financial statements

Acumentis Group Limited ACN 102 320 329

Page 6

Half Year Report Period ended 31 December 2020

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Consolidated Statement of Financial Position

Notes Current assets Cash and cash equivalents Term deposits Trade and other receivables 7 Income tax receivable Other current assets 8 Total current assets Non-current assets Deferred tax assets 9 Term deposits Plant & equipment 10 Right of use assets 11 Intangible assets 12 Investments in associated companies using the equity method 13 Total non-current assets Total assets Current liabilities Trade & other payables 14 Borrowings 15 Lease liabilities 16 Employee benefits 17 Total current liabilities Non-current liabilities Borrowings 15 Lease liabilities 16 Deferred tax liabilities 9 Employee benefits 17 Provisions 18 Total non-current liabilities Total liabilities Net assets Equity Issued capital 19 Accumulated deficit Other reserves 20 Total equity	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 3,193 1,830 1,262 - 25 36 4,058 4,673 3,039 - - 54 2,107 895 2,059
	9,358 7,423 6,450
	2,386 2,818 3,324 794 794 797 743 800 683 2,948 2,580 3,425 25,640 25,562 25,569 1,202 1,114 993
	33,713 33,668 34,791
	43,071 41,091 41,241
	3,456 2,196 2,308 1,300 1,300 2,578 1,362 1,158 1,224 4,121 4,255 3,330
	10,239 8,909 9,440
	1,950 2,600 2,600 2,586 2,364 2,784 - - 4 507 471 503 182 182 128
	5,225 5,617 6,019
	15,464 14,526 15,459
	27,607 26,565 25,782
	44,477 44,477 44,477 (16,879) (17,912) (18,695) 9 - -
	27,607 26,565 25,782

The Consolidated Statement of Financial Position is to be read in conjunction with the notes to and forming part of the financial statements

Acumentis Group Limited ACN 102 320 329

Page 7

Half Year Report Period ended 31 December 2020

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Consolidated Statement of Changes in Equity

Notes Balance as at 1 July 2019 Adjustment for change in accounting policy Loss for the six months to 31 December 2019 Shares issued Share issue costs (net of tax) Profit for the six months to 30 June 2020 Balance as at 30 June 2020	Share capital $’000 Accumulated deficit $’000 Other reserves $’000 Total $’000 39,293 (15,006) - 24,287 - (351) - (351) - (3,454) - (3,454) 5,644 - - 5,644 (460) - - (460) - 899 - 899
	44,477 (17,912) - 26,565
Balance as at 1 July 2020	44,477 (17,912) - 26,565
Profit for the period	- 1,033 - 1,033
Share basedpayments expense	- - 9 9
Balance as at 31 December 2020	44,477 (16,879) 9 27,607

The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to and forming part of the financial statements

Acumentis Group Limited ACN 102 320 329

Page 8

Half Year Report Period ended 31 December 2020

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Consolidated Statement of Cashflows

Notes Cash flows from operating activities Cash receipts from customers Government grants received Cash paid to suppliers and employees Interest received Interest paid Dividends received Decrease in security deposits Income taxes refunded Net cash provided by / (used in) operating activities Cash flows from investing activities Payments for property, plant & equipment 10 Payments for intangible assets 12 Payments for investments: Acquisition of associated entities 13 Net cash used in investing activities Cash flows from financing activities Shares issued 19 Borrowings received Repayment of borrowings Repayment of lease liabilities Dividends paid Net cash (used in) / provided by financing activities Net increase / (decrease) in cash and cash equivalents held Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	31 Dec 20 6 months $’000 31 Dec 19 6 months $’000 30 Jun 20 12 months $’000 23,274 20,307 41,483 2,320 - 629 (22,348) (24,218) (42,826) 2 - 18 (178) (158) (495) 86 - - 25 85 98 - 445 498
	3,181 (3,539) (595)
	(147) (13) (324) (323) (644) (870) - (629) (628)
	(470) (1,286) (1,822)
	- 5,010 5,010 - 2,120 2,120 (650) (2,190) (3,469) (698) (669) (1,230) - - -
	(1,348) 4,271 2,431
	1,363 (554) 14 1,830 1,816 1,816
	3,193 1,262 1,830

The Consolidated Statement of Cashflows is to be read in conjunction with the notes to and forming part of the financial statements

Acumentis Group Limited ACN 102 320 329

Page 9

Half Year Report Period ended 31 December 2020

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Notes to the Consolidated Financial Statements

1. Significant accounting policies

Reporting entity

Acumentis Group Limited (the “Company” or “Acumentis”) is a company domiciled in Australia.

The consolidated interim financial statements of the Company as at and for the six months ended 31 December 2020 comprises the Company and its subsidiaries (together referred to as the “Consolidated Entity”).

Comparative Numbers

The Half Year Report has been formatted to include comparative numbers for both the corresponding half year as well as for the previous full year. Values are presented as follows:

• Profit & Loss disclosures – for the 6 months to December 2020, the 6 months to December 2019 and the 12 months to June 2020.

• Balance Sheet disclosures – as at 31 December 2020, 30 June 2020 and 31 December 2019.

Accounting Policies

The accounting policies applied by the Consolidated Entity in these consolidated financial statements are the same as those applied by the Consolidated Entity in its consolidated financial statements as at and for the year ended 30 June 2020.

Statement of compliance

The consolidated interim financial statements are general purpose financial statements which have been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001. They should be read in conjunction with the annual report for the year ended 30 June 2020.

The consolidated financial statements were authorised for issue by the directors on 11 February 2021.

2. Revenue from operations

Revenue from rendering of services Other income	31 Dec 20 6 months $’000 31 Dec 19 6 months $’000 30 Jun 20 12 months $’000 20,675 15,718 36,666 2,323 1,114 2,619
	22,998 16,832 39,285

Acumentis Group Limited ACN 102 320 329

Page 10

Half Year Report Period ended 31 December 2020

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3. Significant revenue and expense items

The Consolidated Entity has identified several items which are material due to the significance of their nature and/or amount. These are listed separately here to provide a better understanding of the financial performance of the Consolidated Entity.

Revenue Government grants received Insurance proceeds received Licence termination fee Expenses Consultants costs associated with cyber-attack response Redundancy and termination costs Impairment of right of use assets (note 11)	31 Dec 20 6 months $’000 31 Dec 19 6 months $’000 30 Jun 20 12 months $’000 2,320 - 1,315 - 1,095 1,095 - - 150
	- 716 791 137 234 271 131 182 497

4. Segment reporting

The Consolidated Entity’s operations and clients are located entirely in Australia and comprise only one segment being the provision of property valuations & advice.

5. Income tax

. Income tax
Reconciliation of income tax expense / (benefit) to prima facie tax payable Profit / (Loss) from continuing operations before tax Prima facie income tax expense / (benefit) calculated at 26% (Dec 19 & Jun 20: 27.5%) on profit / (loss) Non-assessable income - Federal Government Cashflow Boost Increase/(decrease) in income tax expense due to: Non-deductible expenses - Entertainment - Other expenses Non-assessable share of (profit) / loss of associate Adjustments for prior years Restatement of future tax benefit1 Income tax expense / (benefit)	31 Dec 20 6 months $’000 31 Dec 19 6 months $’000 30 Jun 20 12 months $’000 1,465 (4,431) (3,029)
	381 (1,219) (833) (13) - (14) 2 5 6 11 4 1 (45) 57 24
	336 (1,153) (816) (13) (4) 179 109 180 163
	432 (977) (474)

Note 1: Impact of reduction in tax rates from 30% to 27.5% effective 1 July 2017 (taken up on 1 July 2019), from 27.5% to 26% effective 1 July 2020 (taken up on 30 June 2020) and from 26% to 25% effective 1 July 2021 (taken up on 31 December 2020) on deferred tax balances (Note 9).

Acumentis Group Limited ACN 102 320 329

Page 11

Half Year Report Period ended 31 December 2020

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6. Earnings per share

The calculation of earnings per share for the period was calculated using the following factors:

Basic earnings per share Profit / (loss) attributable to ordinary shareholders of the company for the period Issued ordinary shares at the start of the period Shares issued during the period Issued number of ordinary shares at end of the period Weighted average number of ordinary shares during the period Diluted earnings per share Profit / (loss) attributable to ordinary shareholders of the company for the period Weighted average number of ordinary shares during the period Options on issue at end of period Antidilutive potential ordinary shares1 Performance rights on issue at end of period Weighted average number of issued plus potential ordinary shares during the period	31 Dec 20 6 months 31 Dec 19 6 months 30 Jun 20 12 months $’000 $’000 $’000 1,033 (3,454) (2,555)
	Number Number Number 155,679,930 85,134,111 85,134,111 - 70,545,819 70,545,819
	155,679,930 155,679,930 155,679,930
	155,679,930 134,976,266 145,271,530
	$’000 $’000 $’000 1,033 (3,454) (2,555)
	Number Number Number 155,679,930 134,976,266 145,271,530 2,500,000 2,500,000 2,500,000 - (2,500,000) (2,500,000) 1,000,000 - -
	159,179,930 134,976,266 145,271,530

Note 1: For the 6 months ended 31 December 2019 and the 12 months ended 30 June 2020, the potential ordinary shares relating to options on issue were antidilutive (decreasing the loss per share disclosed) and accordingly the diluted earnings per share for these periods do not assume conversion of the options on issue.

In the published financial reports for December 2019 and June 2020, the antidilutive potential shares were erroneously included in the diluted earnings per share calculation therefore understating the diluted loss per share.

7. Trade and other receivables

Trade receivables Provision for expected credit losses Other receivables	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 4,160 4,568 3,120 (160) (82) (214) 58 187 133
	4,058 4,673 3,039

Acumentis Group Limited ACN 102 320 329

Page 12

Half Year Report Period ended 31 December 2020

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8. Other current assets

Prepaid expenses	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 2,107 895 2,509

9. Deferred tax balances

Deferred tax assets Employee provisions Provision for expected credit losses Accruals Make good provisions “Black hole” expenditure1 Right of use assets (lease liability minus NBV) Other Tax losses Deferred tax liabilities NBV of make good asset	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 1,055 1,000 911 40 22 59 24 35 60 45 47 35 111 131 196 250 245 153 - 1 2
	1,525 1,481 1,416 861 1,337 1,908
	2,386 2,818 3,324
	- - 4

Note 1 : This relates to share issue costs that, in accordance with s40-880 of the Income Tax Assessment Act 1936, are deductible for income tax over a five-year period.

Acumentis Group Limited ACN 102 320 329

Page 13

Half Year Report Period ended 31 December 2020

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10. Plant & equipment

10. Plant & equipment
Cost Balance at 1 Jul 2019 Additions – cash Balance at 31 Dec 2019 Balance at 1 Jan 2020 Additions – cash Additions – non-cash Disposals Balance at 30 Jun 2020	Office equipment $’000 Furniture & fittings $’000 Leasehold improvements $’000 Total $’000 1,983 615 433 3,031 13 - - 13
	1,996 615 433 3,044
	1,996 615 433 3,044 143 9 159 311 - - 54 54 - (3) (84) (87)
	2,139 621 562 3,322
Balance at 1 Jul 2020	2,139 621 562 3,322
Acquisitions	106 29 12 147
Disposals	- - - -
Balance at 31 Dec 2020	2,245 650 574 3,469
Accumulated depreciation Balance at 1 Jul 2019 Depreciation charge for the period Balance at 31 Dec 2019 Balance at 1 Jan 2020 Depreciation charge for the period Disposals Balance at 30 Jun 2020	1,539 387 225 2,151 137 47 26 210
	1,676 434 251 2,361
	1,676 434 251 2,361 130 36 82 248 - (3) (84) (87)
	1,806 467 249 2,522
Balance at 1 Jul 2020	1,806 467 249 2,522
Depreciation charge for the period	127 34 43 204
Disposals	- - - -
Balance at 31 Dec 2020	1,933 501 292 2,726
Carrying amounts 31 Dec 2019 30 Jun 2020	320 181 182 683
	333 154 313 800
31 Dec 2020	312 149 282 743

Acumentis Group Limited ACN 102 320 329

Page 14

Half Year Report Period ended 31 December 2020

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11. Right of Use Assets

Cost Balance at 1 Jul 2019 Change of accounting policy Balance at 31 Dec 2019 Balance at 1 Jan 2020 Acquisitions Disposals Balance at 30 Jun 2020	Buildings $’000 Office equipment $’000 Total $’000 - - - 6,794 142 6,936
	6,794 142 6,936
	6,794 142 6,936 62 - 62 (402) - (402)
	6,454 142 6,596
Balance at 1 Jul 2020	6,454 142 6,596
Acquisitions – non-cash	1,150 - 1,150
Disposals	(232) - (232)
Balance at 31 Dec 2020	7,432 142 7,514
Accumulated depreciation Balance at 1 Jul 2019 Change of accounting policy Depreciation charge for the period Impairment charge for the period1 Disposals Balance at 31 Dec 2019 Balance at 1 Jan 2020 Depreciation charge for the period Impairment charge for the period1 Disposals Balance at 30 Jun 2020	- - - 2,719 61 2,780 525 24 549 182 - 182 - - -
	3,426 85 3,511
	3,426 85 3,511 566 24 590 315 - 315 (400) - (400)
	3,907 109 4,016
Balance at 1 Jul 2020	3,907 109 4,016
Depreciation charge for the period	599 25 625
Impairment charge for the period 1	131 - 131
Disposals	(205) - (204)
Balance at 31 Dec 2020	4,432 134 4,566
Carrying amounts 31 Dec 2019 30 Jun 2020	3,368 57 3,425
	2,547 33 2,580
31 Dec 2020	2,940 8 2,948

Note 1 : The impairment charges relate to the right of use assets comprising office leases that are no longer used by the business and have been vacated by the business. There are two such leases which have now both been sub-let.

The impairment charges represents the difference between the net book value of the assets and the net present value of future expected sub-lease income.

Acumentis Group Limited ACN 102 320 329

Page 15

Half Year Report Period ended 31 December 2020

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12. Intangible assets

12. Intangible assets
Balance at 1 Jul 2019 Acquisitions Amortisation Impairment charge Balance at 31 Dec 2019 Balance at 1 Jan 2020 Acquisitions Amortisation Balance at 30 Jun 2020	Goodwill $’000 Customer relationships $’000 Computer software $’000 Brands & Trademarks $’000 Total $’000 13,884 10,000 1,247 42 25,173 - - 402 242 644 - - (206) - (206) - - - (42) (42)
	13,884 10,000 1,443 242 25,569
	13,884 10,000 1,443 242 25,569 - - 215 - 215 - - (222) - (222)
	13,884 10,000 1,436 242 25,562
Balance at 1 Jul 2020	13,884 10,000 1,436 242 25,562
Acquisitions	- - 323 - 323
Amortisation	- - (245) - (245)
Balance at 31 Dec 2020	13,884 10,000 1,514 242 25,640

Intangible asset carrying values are reviewed annually or whenever there are indications that they may be impaired. An impairment review was conducted effective 31 December 2020.

The estimated recoverable amount of intangibles is determined by way of estimating the net present values of cashflows expected to be generated by the cash generating units associated with the intangible assets.

The key assumptions and the approach to determine the value in use when estimating the recoverable amount of a cash generating unit are:

Assumption How determined

Cash flows The forecast 5-year cash flows are based on forecast results for the year ended 30 June 2021.

The 2021 forecast forms the basis of cash flows in subsequent financial years based on the following assumptions:

• retention of major client contracts and ongoing growth in revenues of 3-4% per annum

• no increase in overhead expenses in the first year and 3% increase in the years thereafter

• increase in employee expenses calculated as 50-60% of the increase in revenue since the prior year

• terminal value at the end of year 5 based on year 5 cashflows

Discount rate The discount rate adopted was a pre-tax rate of 11.8% and was based on the current risk-free interest rate and business specific risk factors, market borrowing rates and investor expected returns.

Acumentis Group Limited ACN 102 320 329

Page 16

Half Year Report Period ended 31 December 2020

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13. Investments in associated companies using the equity method

Acumentis (WA) Holdings Pty Ltd Carrying value Carrying value at start of period Additional investment1 Share of comprehensive profit / (loss) for period Dividends received Impairment of investment Carrying value at end of period Reconciliation to carrying value Net assets of Acumentis (WA) Holdings Pty Ltd Consolidated entities share of closing net assets Consolidated entities share of closing net assets Unrecognised discount on acquisition Impairment of investment Carrying value of interest in associate	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 1,202 1,114 993
	1,114 571 571 - 628 628 174 (85) (206) (86) - - - - -
	1,202 1,114 993
	5,122 4,913 4,659 42.2% 42.2% 42.2%
	2,161 2,073 1,966 (206) (206) (220) (753) (753) (753)
	1,202 1,114 993

Note 1: Effective 26 August 2019, the Consolidated Entity acquired an additional 8.4% of the existing share capital of Acumentis (WA) Holdings Pty Ltd for consideration of $221,076. Effective 13 September 2019, Acumentis (WA) Holdings Pty Ltd issued new shares to the Consolidated Entity taking its ownerships from 33.4% to 42.2% for consideration of $407,254.

14. Trade and other payables

Trade payables Other payables and accrued expenses	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 1,412 994 1,227 2,044 1,202 1,081
	3,456 2,196 2,308

15. Borrowings

5. Borrowings
Current Short term loan Commercial bank bills Non-current Commercial bank bills Total	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 - - 1,278 1,300 1,300 1,300
	1,300 1,300 2,578
	1,950 2,600 2,600
	3,250 3,900 5,178

Acumentis Group Limited ACN 102 320 329

Page 17

Half Year Report Period ended 31 December 2020

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The short-term loan related to insurance premium financing and is secured against the underlying insurance policy only. The loan carried a fixed interest rate of 5.1% and was fully repaid prior to 30 June 2020. The insurance premium was not financed in the current financial year.

The commercial bank bills are secured by fixed and floating charges over the assets of the Consolidated Entity. The bank bills carry floating interest rate of BBSY + 2.6% and have a 5-year term ending 12 April 2023 with six monthly repayments amortising the balance over the term.

Balance as at 1 July 2019 Additions Repayments Balance as at 31 December 2019 Balance as at 1 January 2020 Repayments Balance as at 30 June 2020	Short-term loan $’000 Bank bills $’000 Total $’000 249 5,000 5,249 2,120 - 2,120 (1,091) (1,100) (2,191)
	1,278 3,900 5,178
	1,278 3,900 5,178 (1,278) - (1,278)
	- 3,900 3,900
Balance as at 1 July 2020	- 3,900 3,900
Additions	- - -
Repayments	- (650) (650)
Balance as at 31 December 2020	- 3,250 3,250

16. Lease Liabilities

6. Lease Liabilities
Current Right of use assets Other leases Non-current Right of use assets Total	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 1,362 1,158 1,198 - - 26
	1,362 1,158 1,224
	2,586 2,364 2,784
	3,948 3,522 4,008

Acumentis Group Limited ACN 102 320 329

Page 18

Half Year Report Period ended 31 December 2020

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17. Employee Benefits

Current Annual leave Long services leave Performance pay Non-current Long service leave 18. Provisions Non-current Make good Movement in provisions Balance as at 1 July 2019 Change in accounting policy Balance as at 31 December 2019 Balance as at 1 January 2020 Utilised during period Increase during period Balance as at 30 June 2020	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 1,880 1,747 1,292 1,600 1,628 1,516 641 880 522
	4,121 4,255 3,330
	507 471 503
	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 182 182 128
	Operating lease $’000 Make good $’000 Total $’000 64 128 192 (64) - (64)
	- 128 128
	- 128 128 - (8) (8) - 62 62
	- 182 182
Balance as at 1 July 2020	- 182 182
Utilised during period	- - -
Increase during period	- - -
Balance as at 31 December 2020	- 182 182

Acumentis Group Limited ACN 102 320 329

Page 19

Half Year Report Period ended 31 December 2020

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19. Issued Capital

Share capital

The company recorded the following amounts within shareholders’ equity as a result of the issue of ordinary shares:

The company recorded the following amounts within shareholders’ ordinary shares:	equity as a result of	the issue of
Balance as at 1 July 2019 Issued during the period1 Balance as at 31 December 2019 Issued duringtheperiod	Number of shares 85,134,111 70,545,819 155,679,930 -	$’000 39,293 5,184
		44,477 -
Balance as at 30 June 2020	155,679,930	44,477
Issued during period	-	-
Balance as at 31 December 2020	155,679,930	44,477

• Note 1: On 23 August 2019, the company undertook a partially underwritten, 4 for 5 entitlements issue at 8 cents a share which was fully subscribed and resulted in the issue of 68,045,819 ordinary shares and proceeds (net of offer and placement costs) of $5,009,667 plus a future tax benefit of $174,350 resulting in an increase in share capital of $5,184,016.

A further 2,500,000 ordinary shares were issued to the underwriter and lead manager of the share offer in part consideration of the services provided.

Options

On 23 August 2019, 2,500,000 options were issued to the underwriter and lead manager of the share offer in part consideration of the services provided.

These options have an exercise price of $0.12 and an expiry date of 23 August 2023.

Performance Rights

On 15 October 2020, the Company issued 1,000,000 performance rights to the CEO as a long term incentive under the Acumentis Employee Share Plan.

The performance rights have the following vesting conditions:

• Service Condition – the CEO must remain employed for 3 years (to finalisation of FY23 audit of the financial statements). If the service condition is not met, none of the performance rights will vest.

• Market Condition – 50% or 500,000 performance rights will vest if the total shareholder return (“TSR”) for Acumentis is at least equal to the TSR for the ASX300 for the period 1 July 2020 to 30 June 2023.

• Performance Condition – the remaining 500,000 performance rights will vest pro-rata based on the earnings per share of Acumentis Group Limited being between 2.4 cents and 3.2 cents for the year ended 30 June 2023.

Acumentis Group Limited ACN 102 320 329

Page 20

Half Year Report Period ended 31 December 2020

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The Board has the discretion to adjust the number of rights that ultimately vest and/or the service condition period if it forms the view that the unadjusted outcome is not appropriate to the circumstances that prevailed over the measurement period.

The Board has discretion to determine that some or all unvested rights held lapse on a specified date if allowing the rights to vest would, in the opinion of the Board, result in an inappropriate benefit to the rights holder. Such circumstances would include joining a competitor or actions that harm the Company’s stakeholders.

In the case of fraud or misconduct, all unvested rights will be forfeited.

The performance rights have been valued using a Monte Carlo simulation at $118,250 and this will be provided for over the vesting period of the rights to 30 June 2023 with adjustments made where appropriate for the likelihood of non-vesting of those rights subject to a performance condition.

Dividends

No dividends were paid by the company during the period.

20. Other Reserves

Share based payments reserve Movement in other reserves	31 Dec 20 $’000 30 Jun 20 $’000 31 Dec 19 $’000 9 - -
	$’000 - 9 9
Balance as at 1 July 2020
Share basedpayment expense
Balance as at 31 December 2020

Acumentis Group Limited ACN 102 320 329

Page 21

Half Year Report Period ended 31 December 2020

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21. Going Concern

The Company was the subject of two cyber-attacks in the first half of calendar 2019 which resulted in a number of clients suspending utilisation of Company’s services with a resulting reduction in revenues, profits and cashflows.

During the second half of calendar 2019 and through calendar 2020, the Company has invested heavily in improving its information security stance resulting in ISO27001 and IRAP certification and has been successful in being reinstated by the majority of its clients. The Company also undertook a successful capital raise of $5.64M in August 2019.

The COVID-19 pandemic resulted in relatively small adverse impacts on revenues as a result of border restrictions and uncertainty in the economic future and hence asset values. The business had returned to largely normal trading by the third quarter of calendar 2020. The Company qualified for the first tranche of JobKeeper and this assisted in supporting the business through the period April to September 2020.

The business is now trading profitably again and has prepared detailed forecasts for the future confirming the longer term improvements to its trading performance.

Based on the improved trading, period end cash balances held and the strength of the current balance sheet, the directors are satisfied that the going concern basis of preparation is appropriate and therefore the financial information does not include any adjustments relating to the recoverability or classification of recorded asset amounts or to the amounts or classification of liabilities that might be necessary should the company not be able to continue as a going concern.

Acumentis Group Limited ACN 102 320 329

Page 22

Half Year Report Period ended 31 December 2020

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Directors’ Declaration

In the opinion of the Directors of Acumentis Group Limited (the “company”):

• 1) The financial statements and notes set out on pages 6 to 22, are 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 2020 and its performance for the half-year ended on that date; and

• b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting; and the Corporations Act 2001

• 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.

Dated at Sydney this 11[th] day of February 2021.

Signed in accordance with a resolution of the directors:

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Keith Perrett Chair

Acumentis Group Limited ACN 102 320 329

Page 23

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Acumentis Group Limited

Independent auditor’s review report

Report on the Review of the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Acumentis Group Limited (the Company) and the entities it controlled at the half-year’s end or from time to time during the half year (the consolidated group), which comprises the consolidated statement of financial position as at 31 December 2020, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

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 Acumentis Group Limited 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 2020 and of its performance for the half year ended on that date; and

• b) complying with Australian Accounting Standard 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s review report.

ACCOUNTANTS & ADVISORS

Sydney Office Level 29, 66 Goulburn Street Sydney NSW 2000

Responsibility of Directors 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 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 gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Parramatta Office Level 7, 3 Horwood Place Parramatta NSW 2150

Telephone: +61 2 8263 4000 williambuck.com

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William Buck is an association of firms, each trading under the name of William Buck across Australia and New Zealand with affiliated offices worldwide. Liability limited by a scheme approved under Professional Standards Legislation. (WB013_2007)

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Auditor’s Responsibilities for the Review of the Half-Year Financial Report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether 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 Company’s financial position as at 31 December 2020 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 2001 .

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.

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William Buck

Accountants & Advisors

ABN: 16 021 300 521

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L.E. Tutt Partner

Sydney, 11 February 2021