AVA RISK GROUP LIMITED — Annual Report 2017

Aug 24, 2017

==> picture [224 x 99] intentionally omitted <==

Future Fibre Technologies Limited ACN 064 089 318 and controlled entities

Appendix 4E Preliminary Final Report For the year ended 30 June 2017 Lodged with the ASX under Listing Rule 4.3A

FUTURE FIBRE TECHNOLOGIES LIMITED REGISTERED OFFICE 10 Hartnett Close, Mulgrave, VIC 3170 Australia TEL: + 613 9590-3100 Fax: + 613 9560-8000 www.fftsecurity.com

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Contents
Results for announcement to the market	2
Dividends and distributions	2
Net tangible assets per security	3
Control gained or lost over entities during the period	3
Details of associates and joint venture entities	3
Other significant information	3
Commentary on significant features of operating performance	3
Commentary on results	4
Consolidated Statement of Comprehensive Income	7
Consolidated Statement of Financial Position	8
Consolidated Statement of Changes in Equity	9
Consolidated Statement of Cash Flows	10
Notes to the Consolidated Financial Statements	11
Compliance Statement	17

Page 1

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Name of Entity: Future Fibre Technologies Limited (“Company”, “FFT”)

Details of the reporting period

Current Period: 1 July 2016 – 30 June 2017

Previous Corresponding Period: 1 July 2015 – 30 June 2016

Results for announcement to the market

			Amount of	2017	2016
	Up / down	% movement	change $A’000	30 June $A’000	30 June $A’000
Revenues from ordinary activities	down	10%	(1,465)	12,896	14,361
Profit/(loss) from ordinary activities after tax	down	35%	(2,015)	(7,820)	(5,805)
attributable to members
Net profit/(loss) for the period attributable to	down	35%	(2,015)	(7,820)	(5,805)
members
EBITDA* for the period attributable to members	down	35%	(1,951)	(7,505)	(5,554)

*** Earnings before interest, tax, depreciation and amortisation**

Dividends and distributions

Current Period:

No final or interim dividend has been declared or paid.

Previous Corresponding Period:

No final or interim dividend was declared or paid.

Details of dividends/distributions

No dividends have been paid during the period and the directors do not recommend that a dividend be declared for the period.

Details of dividends/distribution reinvestment plan

The Company does not have a dividend reinvestment plan.

Page 2

==> picture [113 x 50] intentionally omitted <==

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

Net tangible assets per security

		Previous
	Current	Corresponding
	Period	Period
Net asset backing per share	13.6 cents	19.8 cents
Net tangible asset backing per share*	11.4 cents	18.5 cents
*Excludes intangibles.

Control gained or lost over entities during the period

There were no changes in control over entities during the period. (2016: None).

Details of associates and joint venture entities

The Company did not have any associated entities or joint ventures during the year (2016: None).

Other significant information

Refer to Commentary on Results below for details on other significant matters and information regarding the Consolidated Entity.

Commentary on significant features of operating performance

The net result for the Consolidated Entity attributable to shareholders for the year ended 30 June 2017 is a loss of $7,820,000 (2016: loss of $5,805,000).

Revenue

Total revenue for the year was $13,669,000 (2016: $15,486,000). Refer to Commentary on results for further explanation of the primary causes of the decrease.

Depreciation and amortisation expense

Depreciation and amortisation costs were $826,000 (2016: $607,000). The increase was primarily due to amortisation of product development costs associated with the new Aura Ai product.

Page 3

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Commentary on Results

Review and Results of Operations

Highlights:

• Revenue from ordinary activities of $12,896,000 for the twelve months to 30 June 2017 (FY2017):

• 10% decrease on FY2016 ($14,361,000) primarily due to lower project sales in the US.

• Gross margin of 53% (FY2016: 60%) as a result of lower margin pricing on a few large-scale projects compared with the previous year.

• Non-operating income of $773,000 (FY2016: $1,125,000) comprising:

• Tax refund for eligible research and development expenditure of $228,000

• Interest Income of $526,000

• Other Income of $19,000

• Operating expenses excluding depreciation and amortisation of $14,601,000 (FY2016 $14,970,000) due to:

• Targeted sales headcount changes to address market presence

• Continued research & development spending on new product development

• Foreign exchange impact of a stronger USD on revenues certain foreign based expenditure

• Reduced Compliance, Legal and Administrative costs, and

• Impairment of the carrying value of trade receivables, primarily due to cancellation of prior year sales agreements.

• Net loss from ordinary activities of $7,820,000 - a 35% increase on FY2016 loss of $5,805,000.

• EBITDA loss of $7,505,000 - a 35% increase on FY2016.

• Net assets of $16,866,000 (FY2016 $24,224,000) due to working capital requirements and operating losses.

In FY2017, FFT further expanded its range of high performance fibre optic based intrusion detection solutions with the launch of the latest generation Aura Ai controller in the second half of the financial year. Aura Ai combines the highest levels of nuisance alarm mitigation available in a two-channel controller with market leading detection distance capabilities – delivering FFT customers genuine cut resilience from a single controller.

The Company continued to pursue growth opportunities in its core markets of perimeter, pipeline and network security intrusion detection, supported by a restructured global sales team aligned with FFT’s customers and key industry verticals by region. With new sales resources appointed in Eastern Europe and MENA, FFT has been actively targeting security opportunities within the Transport sector resulting in new seaport and airport contracts signed during FY2017 in these regions.

Page 4

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

FFT also secured a number of new orders in the utility sector, including the first order for a nuclear power plant. In FY2018, FFT will continue to focus on the large number of small perimeter utility sites requiring heightened security, supported by FFT products specifically designed for the Company’s expanding distribution channels.

With investment in the Oil & Gas and Utilities sectors improving, FFT is well placed to respond to market demand for infrastructure investment in security for pumping stations, refineries, pipelines, solar plants and substations. This was demonstrated in FY2017 with Oil & Gas and Utility sector orders received from all regions.

Increasing global security threats has led to growing market interest in the Company’s range of optical fibre solutions for Border Security with a number of trials and ‘proof of concepts’ expected to result in orders during FY2018. FFT recently received the first order for a covert buried detection solution on a country border in Asia and has engaged in additional tunnelling detection trials for the same customer.

To build on previous military interest in FFT’s network security solutions and expand into the commercial and utility markets, the Company appointed a dedicated global network security solutions sales leader. As a result, FFT secured a joint perimeter and network security contract for a large nuclear power plant project. The Company’s intrusion detection solution also remains specified for a major international military network program.

FFT also received a number of security upgrade orders in FY2017, with long term FFT customers in the Transport, Oil & Gas and Military markets looking to benefit from the Company’s latest generation software and hardware.

As mentioned previously, FFT’s product development focus in FY2017 was Aura Ai. This new product release required significant investment in developing completely new laser optics, electronics and software platform to delivers significant future benefits.

• Aura Ai was designed with two concurrent real time sensing channels, enabling cut resilience (the ability to detect cut location and to continue to detect intrusions when a sensor cable is cut), as well as the option for a lower cost single channel model variant

• Enhanced sensitivity to greatly increase sensing range, from 18km in the first generation Aura to two channels of 30km each with Aura Ai for fence mounted intrusion detection (and even greater range for buried sensing applications)

• New software combining artificial intelligence algorithms with software elements and know-how from more than ten years of in-market experience in a flexible architecture that supports faster lower development cost expansion for new applications

Next phase development requires reduced rate R&D expenditure, building on the platform created in FY2017 to customise and extend Aura Ai for specific market applications.

In parallel, FFT supported software integrations with a further 12 regional security management systems, providing increased geographic reach into Turkey, the Middle East, Eastern and Northern Europe, and India. FFT products now integrate with 64 different security, video and access control systems, and industry standard interfaces.

Page 5

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Outlook

FFT is on track for profitable growth, building on the capabilities developed over the preceding financial year which includes:

• Widespread interest in Aura Ai for both intrusion detection and adjacent markets,

• The widest range of fibre optic intrusion solutions available,

• ‘Proof of concepts’ and trials successfully completed or underway,

• All major geographical regions supported by a well-focussed FFT sales team,

• A growing and maturing Distribution Program,

• Potential revenues from adjacent markets, and

• Lower operational costs with the primary Aura Ai investment complete.

The Company will continue to consider technology and business acquisitions that support and drive future growth.

Date 24 August 2017

==> picture [95 x 44] intentionally omitted <==

Robert Broomfield Chief Executive Officer

Page 6

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Consolidated Statement of Comprehensive Income

FUTURE FIBRE TECHNOLOGIES LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017

Note Revenue and other income Revenues from sales and services 2 Other income 2 Less: Expenses Cost of raw materials, consumables used, and labour Employee benefits expense 3 Research and development 3 Advertising and marketing Travel and entertainment Facilities and office Compliance, legal, and administration 3 Provision for impairment of receivables Patents impairment loss Depreciation and amortisation expenses Finance costs Foreign exchange losses Other expenses Loss for the year before income tax Income tax benefit / (expense) Loss for the year Other comprehensive income Items that may be reclassified subsequently to profit and loss Exchange differences on translation of foreign operations, net of tax Total comprehensive income for the year Profit attributable to non-controlling interests Total comprehensive income attributable to members of Future Fibre Technologies Limited Basic loss per share (cents per share) Diluted loss per share (cents per share)	2017 $’000 2016 $’000 12,896 14,361 773 1,125
	13,669 15,486
	(6,030) (5,710) (7,483) (6,910) (1,278) (1,037) (380) (428) (690) (946) (782) (863) (849) (1,196) (1,364) (2,514) - (103) (826) (607) (15) (5) (811) (220) (981) (752)
	(7,820) (5,805) - -
	(7,820) (5,805) 82 66
	(7,738) (5,739) - -
	(7,738) (5,739)
	(6.34) cents (4.76) cents (6.34) cents (4.76) cents

This Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

• Basic loss per share amounts are calculated by dividing loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year of 123,436,659 (2016: 121,931,622). The weighted average number of ordinary shares outstanding adjusted for the effect of dilution is 123,436,659 (2016: 121,931,622).

Page 7

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Consolidated Statement of Financial Position

FUTURE FIBRE TECHNOLOGIES LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

Note CURRENT ASSETS Cash and cash equivalents Receivables 4 Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Receivables 4 Plant and equipment Intangible assets 5 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Payables 6 Borrowings Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings Non-current provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 7 Reserves Retained earnings/(losses) TOTAL EQUITY	2017 $’000 2016 $’000 6,945 12,119 4,985 5,443 4,206 3,990 320 341
	16,456 21,893
	- 3,291 1,012 1,300 2,758 1,608
	3,770 6,199
	20,226 28,092
	2,220 2,798 15 8 1,089 1,032
	3,324 3,838
	- 15 36 15
	36 30
	3,360 3,868
	16,866 24,224
	44,183 43,883 625 463 (27,942) (20,122)
	16,866 24,224

This Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Page 8

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Consolidated Statement of Changes in Equity

FUTURE FIBRE TECHNOLOGIES LIMITED AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR TO 30 JUNE 2017

CONSOLIDATED ENTITY Balance as at 1 July 2016 Loss for the period Exchange differences on translation of foreign operations, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners Shares issued Share issue costs Share based payments Total transactions with owners in their capacity as owners Balance as at 30 June 2017 Balance as at 1 July 2015 Loss for the period Exchange differences on translation of foreign operations, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners Shares issued Share issue costs Total transactions with owners in their capacity as owners Balance as at 30 June 2016	$’000 $’000 $’000 $’000 $’000 Share Capital Share Option Reserve Foreign Exchange Translation Reserve Retained Earnings / (Losses) Total Equity 43,883 397 66 (20,122) 24,224 - - - (7,820) (7,820) - - 82 - 82
	- - 82 (7,820) (7,738)
	300 - - - 300 - - - - - - 80 - - 80
	300 80 - - 380
	44,183 477 148 (27,942) 16,866
	43,714 397 - (14,317) 29,794 - - - (5,805) (5,805) - - 66 - 66
	- - 66 (5,805) (5,739)
	250 - - - 250 (81) - - - (81)
	169 - - - 169
	43,883 397 66 (20,122) 24,224

The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Page 9

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Consolidated Statement of Cash Flows

FUTURE FIBRE TECHNOLOGIES LIMITED AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017

CASH FLOW FROM OPERATING ACTIVITIES Receipts from customers Receipts from R&D tax incentives Payments to suppliers and employees Interest received Finance costs NET CASH USED IN OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Payment for security bonds and guarantees Payment for intangible assets Proceeds from sale of plant and equipment Purchase of plant and equipment NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of ordinary shares Share issue expenses Repayment of borrowings NET CASH PROVIDED BY FINANCING ACTIVITIES NET DECREASE IN CASH HELD Cash and cash equivalents at beginning of year Foreign exchange differences on cash holdings CASH AND CASH EQUIVALENTS AT END OF YEAR	2017 $’000 2016 $’000 12,281 15,376 1,462 - (16,650) (20,460) 173 360 (15) (5)
	(2,749) (4,729)
	(86) - (2,493) (689) 4 - (193) (691)
	(2,768) (1,380)
	300 250 - (81) (8) (9)
	292 160
	(5,225) (5,949) 12,119 17,591 51 477
	6,945 12,119

This Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Page 10

==> picture [113 x 50] intentionally omitted <==

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

Notes to the consolidated financial statements

Note 1 – Summary of Significant Accounting Policies

The preliminary final report covers Future Fibre Technologies Limited and its controlled entities as a consolidated entity. It has been prepared in accordance with ASX Listing Rule 4.3A and has been derived from the unaudited financial report. Future Fibre Technologies Limited is a company limited by shares, incorporated and domiciled in Australia.

The preliminary final report does not include all the notes of the type normally included in an annual report.

This report is based on the financial report which is in the process of being audited.

The financial reports are presented in Australian dollars, unless otherwise stated, with the current reporting period being the year ended 30 June 2017, and the previous corresponding period is the year ended 30 June 2016.

Historical Cost Convention

The financial report has been prepared under the historical cost convention as modified by revaluations to fair value for certain classes of assets as described by the accounting policies.

Going Concern

The financial report has been prepared on a going concern basis.

Changes in Accounting Policy

There have been no changes in accounting policies during the year ended 30 June 2017.

Rounding of Amounts

The parent entity and the consolidated entity have applied the relief available under ASIC Corporations (Rounding in Financial /Directors’ Reports) Instrument 2016/191 and accordingly, amounts in the consolidated financial statements have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar (where indicated).

Page 11

==> picture [113 x 50] intentionally omitted <==

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

Note 2 - Revenue

Revenue and other income from continuing operations Revenue from sales of goods Revenue from provision of services Total revenues from operating activities Other income Interest R&D Tax incentive Gains on foreign exchange – realised Other Income Total other income Total revenues	2017 $’000 2016 $’000 11,309 12,889 1,587 1,472
	12,896 14,361
	526 360 228 475 - 290 19 -
	773 1,125
	13,669 15,486

Note 3 – Profit from continuing operations

Profit/(Loss) from continuing operations before income tax has been determined after the following specific expenses:

Employee benefits expenses totalling $7,483,000 (2016: $6,910,000), including $80,000 share based payment expense (2016: $Nil) and $552,000 superannuation contributions (2016; $602,000).

In FY2016, the Company settled an on-going commercial dispute totalling $363,000 which is disclosed within Compliance, legal and administration.

Research and development costs that are not eligible to be capitalised have been expensed in the year totalling $1,278,000 (2016: $1,037,000).

Page 12

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Note 4 – Trade and other receivables

Trade receivables - current Trade receivables – non-current Provision for impairment loss (a) Security deposits and bonds Other receivables (c) Carrying amount of trade and other receivables Receivables – current Receivables – non-current Movements in the allowance for impairment loss were as follows: At 1 July Charge for the year Amounts written off At 30 June	2017 $’000 2016 $’000 3,690 4,924 - 3,291
	(157) (1,240)
	3,533 6,975
	95 12 1,357 1,747
	4,985 8,734
	4,985 5,443 - 3,291
	4,985 8,734
	1,240 639 1,364 771 (2,447) (170)
	157 1,240

(a) Provision for impairment

Trade receivables are non-interest bearing and are generally on terms of ranging from 30 - 90 days. A provision for impairment loss is recognised when there is objective evidence that an individual trade receivable is impaired.

During 2016 payment terms on some of the amounts totalling $3,415,000 and contained in past due more than 91 days were re-negotiated. In particular, two of the Company’s customers who were undertaking large scale roll-outs and had experienced project delays. Trade receivables for these customers were treated as non-current and were on payment schedules of between 3 and 4 years (accelerated with immediate payment of the balance in full at an earlier date when the project achieves commissioning).

During June 2017 these two customer arrangements were terminated by the Company. Inventories that had not been paid for in full by the customer at the time of termination were recovered by the Company and the value of these inventories off-set against the outstanding debts owed. The Company impaired the remaining trade receivable amount of $1,278,000.

In addition, the Company has impaired a further $86,000 of receivables.

Page 13

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Note 4 – Trade and other receivables (continued)

(b) Past due but not impaired

As at 30 June 2017, trade receivables past due but not considered impaired are: $1,948,000 (2016: $5,129,000).

For receivables that are past due credit has been stopped until full payment is made. Direct contact with the relevant debtor has been made and the Company is satisfied that payment will be received in full.

Other balances within trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due.

Trade receivables ageing analysis at 30 June is:

Not past due Past due 1 – 30 days Past due 31-60 days Past due 61-90 days Past due more than 91 days	Gross 2017 Impairment 2017 Gross 2016 Re-measurement 2016 Impairment 2016 $’000 $’000 $’000 $’000 $’000 1,585 - 1,846 - - 1,309 - 264 - - 219 - 5 - - 13 - 27 - - 564 (157) 7,640 (1,567) (1,240)
	3,690 (157) 9,782 (1,567) (1,240)

(c) Other receivables

These amounts relate primarily to accrued income from product and services delivered to customers but not yet billed totalling $193,000 (2016: $33,000), accrued income from the R&D Tax incentive totalling $1,122,000 (2016: $1,463,000), and other indirect tax refunds due from various international tax jurisdictions.

Page 14

==> picture [113 x 50] intentionally omitted <==

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

Note 5 – Intangible assets

	Trademarks $’000 Development Costs $’000 Patents $’000 Right to Use $’000 Total $’000
Year ended 30 June 2017 Carrying amount at beginning of year Additions Disposals Amortisation Impairment charges Carrying amount at end of year At 30 June 2017 Cost (gross carrying amount) Accumulated amortisation Accumulated Impairment Charges Net carrying amount Year ended 30 June 2016* Carrying amount at beginning of year Additions Amortisation Impairment charges Carrying amount at end of year At 30 June 2016 Cost (gross carrying amount) Accumulated amortisation Accumulated Impairment Charges Net carrying amount	13 870 668 57 1,608 - 1,526 40 - 1,566 - - - (57) (57) - (187) (172) - (359) - - - - -
	13 2,209 536 - 2,758
	13 2,673 2,164 - 4,850 - (464) (1,481) - (1,945) - - (147) - (147)
	13 2,209 536 - 2,758
	13 380 868 - 1,261 - 550 73 66 689 - (60) (170) (9) (239) - - (103) - (103)
	13 870 668 57 1,608
	13 1,147 2,119 66 3,345 - (277) (1,304) (9) (1,590) - - (147) - (147)
	13 870 668 57 1,608

• Net of $1,151,000 research and development tax credits (2016: $448,000).

Patents

Patents have been acquired through intellectual property derived from the Company’s research and development and are carried at cost less accumulated amortisation and accumulated impairment losses. The amortisation is recognised in the statement of comprehensive income in the line item “Depreciation and amortisation expenses”. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount. Patents are amortised over a 10 year period, the average remaining amortisation period is 6.6 years.

Page 15

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Development costs

During the year ended 30 June 2017, the Company incurred additional development costs of $1,526,000 net of offset from research and development grant (2016: $550,000). The remaining amortisation period for development costs capitalised in previous years is 9.4 years. It is expected the new capitalised development will have a useful life of 10 years. Amortisation commenced from January 2017 when the asset became available for use.

Note 6 – Trade and other payables

Current Trade payables Deferred revenue Accruals and other payables Total trade and other payables – current	2017 $’000 2016 $’000 955 1,853 394 411 871 534
	2,220 2,798

Note 7 – Issued capital

Note 7 – Issued capital
				2017	2016
				$’000	$’000
(a) Issued and paid up capital
Ordinary share capital, issued and fully	paid			44,183	43,883
				44,183	43,883
(b) Movements in shares on issue		2017		2016
	No of shares		$’000	No of shares	$’000
Beginning of the financial year	122,228,440		43,883	121,404,450	43,714
Issue of shares	1,800,000		300	823,990	250
Transaction costs relating to shares issued	-		-	-	(81)
End of the financial year	124,028,440		44,183	122,228,440	43,883

Page 16

Future Fibre Technologies Limited (ACN 064 089 318) Appendix 4E Preliminary Final Report 2017

==> picture [113 x 50] intentionally omitted <==

Note 8 – Subsequent Events

On 24 August 2017 the Company acquired 65,000,000 shares in ASX listed company MaxSec Group Limited (MSP) at an offer price of $0.03 per share. This makes the Company a substantial shareholder of MaxSec Group Limited, holding 13.67% of that company’s issued share capital.

On 25 August 2017 FFT announced its intention to make a takeover offer for MaxSec Group Limited, by way of an off-market bid. The indicative all scrip offer is one (1) FFT share for every four (4) MSP shares and is subject to a number of conditions including FFT obtaining 90% acceptances of the offer.

No other matters or circumstances have arisen since the end of the financial year which significantly affect the operations of the consolidated group, the results of those operations or the state of affairs of the consolidated group going forward.

Compliance Statement

Audit/review of accounts upon which this report is based

This report is based on accounts to which one of the following applies (tick one):

			The accounts have been audited (refer attached financial statements).				The accounts have been subject to review (refer to attached financial statements)
			The accounts are in the process of being audited or subject to review.				The accounts have not been audited or reviewed.

The financial report is not likely to contain an independent audit report that is subject to a modified opinion, emphasis of matter or other matter paragraph.

Signature

==> picture [143 x 48] intentionally omitted <==

Date 24 August 2017 Name Leigh Davis Position Company Secretary

Page 17