CODEIFAI LIMITED — Interim / Quarterly Report 2015

Aug 30, 2015

YPB Group Ltd Appendix 4D Half-year report

1. Company details

Name of entity: YPB Group Ltd ACN: 108 649 421 Reporting period: For the half-year ended 30 June 2015 Previous period: For the half-year ended 31 December 2014

2. Results for announcement to the market

2.Results for announcement to the market
			$'000
Revenues from ordinary activities	up	812.9% to	776
Loss from ordinary activities after tax attributable to the owners of YPB
Group Ltd	down	47.7% to	(2,366)
Loss for the half-year attributable to the owners of YPB Group Ltd	down	47.7% to	(2,366)

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The loss for the consolidated entity after providing for income tax amounted to $2,366,000 (31 December 2014: $4,478,000).

3. Net tangible assets

3. Net tangible assets
	Reporting	Previous
	period	period
	Cents	Cents
Net tangible assets per ordinary security	11.20	9.85

4. Control gained over entities

Intellectual Product Protection Inc and Intellectual Product Protection Name of entities (or group of entities) Co., Ltd Date control gained 7 May 2015

$'000 Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax during the period (where material)

Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) for the whole of the previous period (where material)

On 7 May 2015, the Company acquired 100% of the issued capital of Intellectual Product Protection Inc and its controlled entity.

5. Loss of control over entities

Not applicable.

YPB Group Ltd Appendix 4D Half-year report

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 compiiing 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 YPB Group Ltd for the half-year ended 30 June 2015 is attached.

Date: 31 ^'August2015

YPB Group Ltd ACN 108 649 421

Interim Report - 30 June 2015

YPB Group Ltd Directors' report 30 June 2015

The directors present their report,' together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of YPB Group Ltd (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 30 June 2015.

Directors

The following persons were directors of YPB Group Ltd during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

John Houston (Executive Chairman and CEO)

Robert Whitton Geoffrey Raby Su (George) Su Ronald Langley (appointed 27/04/2015)

Principal activities

During the financial half-year the principal continuing activities of the consolidated entity consisted of anti-counterfeiting technology development and provider of anti-counterfeiting services.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $2,366,000 (31 December 2014: $4,478,000).

During the period under review the Group raised approximately $4,763,000 from placements to some significant investors and from its option and share purchase plan, it also recognised its first income from the large scale China contracts previously announced.

On 7 May 2015 the company acquired 100% of the share capital of Intellectual Property Protection Inc. and as a result it's Thai wholly owned subsidiary Intellectual Property Protection Co. Ltd through YPB Group's subsidiary YPB Group USA Inc., a company incorporated in the USA.

This acquisition will assist the Group in broadening the base of its services and clients as well as providing a logical operations base for its pan-Asian business. The Group continues to examine logical acquisitions to add to both the Group's product offering and its geographic footprint.

The Group continued to develop its products during the period under review with the fine tuning and first sales of its T2 scanner, substantial development of its app based digital solution and further iterations of its scanners.

Rounding of amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to 'rounding-off. Amounts in this report have been rounded off in accordance with that Class Order to the nearest thousand dollars.

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' on the following page.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

r \ John Houstop-' 'E)jecutiyej2liairman

Dated: 31 =t August 2015

HALL CHADWICK S" (NSW)

Chartered Accountants and Business Advisers

YPB GROUP LIMITED ACN 108 649 421 AND CONTROLLED ENTITIES

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF YPB GROUP LIMITED AND ITS CONTROLLED ENTITIES

I declare that, to the best of my knowledge and belief, during the half-year ended 30 June 2015 there have been no contraventions of:

SYDNEY

Levei 40 2 Park Street Sydney NSW 2000 Australia

GPO Box 3555 Sydney NSW 2001

Ph: (612) 9263 2600 Fx: (612) 9263 2800

(a) the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• (b) any applicable code of professional conduct in relation to the review.

G 4 , 6 £ A < ^ » ^

HALL CHADWICK Level 40, 2 Park Street SYDNEY NSW 2000

CLMJA^

GRAHAM WEBB Partner Date: 31 August 2015

A member of AGN International Ltd, a woridwide association of separate and Independent accounting and consulting firms

www.hal!chadwick.com.au

SYDNEY • NEWCASTLE • PARRAMATTA • PENRITH • MELBOURNE • PERTH • BRISBANE • GOLD COAST • DARWIN

Liability limited by a scheme approved under Professional Standards Legislation.

-i- ^ - -'-''' <-•'

YPB Group Ltd Contents 30 June 2015

Contents

Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration 16 Independent auditor's report to the members of YPB Group Ltd 17

YPB Group Ltd Statement of profit or loss and other comprehensive income For the half-year ended 30 June 2015

YPB Group Ltd Statement of profit or loss and other comprehensive income For the half-year ended 30 June 2015
		Consolidated
	Note	2015	2014
		$'000	$'000
Revenue		776	85
Expenses
Consulting fees		(405)	(258)
Depreciation and amortisation expense		(427)	(315)
Directors' fees		(101)	(56)
Employee benefits expense		(441)	(293)
Finance costs		(98)	(68)
Impairment of goodwill		-	(2,206)
Rental expenses		(99)	(89)
Research and development		(738)	(506)
Share-based payments		(22)	(113)
Options expense		-	(97)
Other expenses		(811)	(562)
Loss before income tax expense		(2,366)	(4.478)
Income tax expense
Loss after income tax expense for the half-year		(2,366)	(4,478)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation		520	1,060
Other comprehensive income for the half-year, net of tax		520	1,060
Total comprehensive income for the half-year		(1,846)	(3,418)
		Cents	Cents
Basic earnings per share	9	(1.97)	(4.32)
Diluted earnings per share	9	(1.97)	(4.32)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

YPB Group Ltd Statement of financial position As at 30 June 2015

YPB Group Ltd Statement of financial position As at 30 June 2015
		Consolidated
	Note	2015	2014
		$'000	$'000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables		842	174
Inventories		312	136
Total current assets		5,448	2,715
Non-current assets
Plant and equipment		46	26
Intangibles		11,992	11,096
Total non-current assets		12,038	11,122
Total assets		17,486	13,837
Liabilities
Current liabilities
Trade and other payables		593	364
Total current liabilities		593	364
Non-current liabilities
Borrowings		2,918	2,748
Total non-current liabilities		2,918	2,748
Total liabilities		3,511	3,112
Net assets		13,975	10,725
Equity
Issued capital		22,152	17,449
Reserves		2,845	1,932
Accumulated losses		(11,022)	(8,656)
Total equity		13,975	10,725

The above statement of financial position should be read in conjunction with the accompanying notes

6

YPB Group Ltd Statement of changes in equity For the half-year ended 30 June 2015

YPB Group Ltd Statement of changes in equity For the half-year ended 30 June 2015
				Foreign
				currency		Share-based
	Issued	Issued		Translation		payments	Accumulated	Total
	capital	options		reserve		reserve	losses	equity
Consolidated	$'000	$'000		$'000		$'000	$'000	$'000
Balance at1July 2014	10,399		-		775	-	(4,178)	6,996
Loss after income tax expense for the half-year	-		-		-	-	(4,478)	(4,478)
Other comprehensive income for the half-year, net of tax	-		-	1,060		-	_	1,060
Total comprehensive income for the half-year				1,060			(4,478)	(3,418)
Transactions with owners, in their capacity as owners
and other transfers
Shares issued, net of transaction costs	7,050							7,050
Options granted during the period						97		97
Total transactions with owners and other transfers	7,050					97		7,147
Balance at31December 2014	17,449			1,835		97	(8,656)	10,725
Balance at1January 2015	17,449			1,835		97	(8,656)	10,725
Loss after income tax expense for the half-year							(2,366)	(2,366)
Other comprehensive income for the half-year, net of tax					520			520
Total comprehensive income for the half-year					520		(2,366)	(1,846)
Transactions with owners, in their capacity as owners
and other transfers
Shares issued, net of transaction costs	4,692							4,692
Options exercised during the period	11							11
Options issued during the period			393					393
Total transactions with owners and other transfers	4,703		393		-	-	-	5,096
Balance at 30 June 2015	22,152		393	2,355		97	(11,022)	13,975

The above statement of changes in equity should be read in conjunction with the accompanying notes

6

YPB Group Ltd Statement of cash flows For the half-year ended 30 June 2015

YPB Group Ltd Statement of cash flows For the half-year ended 30 June 2015
		Consolidated
	Note	2015	2014
		$'000	$'000
Cash flows from operating activities
Receipts from customers		161	6
Payments to suppliers and employees		(2,736)	(2,081)
		(2,575)	(2,075)
Interest received		21	11
Interest and other finance costs paid		(3)	(1)
Net cash used in operating activities		(2,557)	(2,065)
Cash flows from Investing activities
Payment for acquisition of subsidiary		(126)
Payments for intangibles		-	(163)
Payments for plant and equipment		(27)	(17)
Net cash used in investing activities		(153)	(180)
Cash flows from financing activities
Proceeds from issue of shares, net of transaction costs		4,291	4,900
Proceeds from issue of options		393	-
Proceeds from loan provided by related party		20	-
Repayment of loan from related party		(126)	(394)
Net cash from financing activities		4,578	4,506
Net increase in cash and cash equivalents		1,868	2,261
Cash and cash equivalents at the beginning of the financial half-year		2,405	125
Cash on acquisition		21	19
Cash and cash equivalents at the end of the financial half-year		4,294	2,405

The above statement of cash flows should be read in conjunction with the accompanying notes

7

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 1. General information

The financial statements cover YPB Group Ltd as a consolidated entity consisting of YPB Group Ltd and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is YPB Group Ltd's functional and presentation currency.

YPB Group Ltd is a listed public company limited by shares, incorporated and domiciled in Australia with additional operations in China, Thailand and USA. Its registered office in Australia is:

Level 29, 66 Goulburn Street, Sydney NSW 2000

The financial statements were authorised for issue, in accordance with a resolution of directors, on 31=' August 2015.

Note 2. Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 30 June 2015 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 2014 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated.

Comparatives

Following the change in the Company's year end to December effective as of 31 December 2014, the comparative balances for the purpose of half-year financial report are for the 6 months ended 31 December 2014.

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.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

• e AASB 2013-9 Amendments to Australian Accounting Standards - Conceptual Framework, Materiality and Financial Instruments (Part C)

• AASB 2014-1 Amendments to Australian Accounting Standards (Part E)

Going concern

The Group incurred an operating loss after tax of $2,366,000 and reports a deficiency of operating cash flows of $2,557,000. During the period ended 30 June 2015 the Group successfully raised additional net capital amounting to $4,684,000 via option and share placements and as at the reporting date reports a cash balance of $4,294,000.

The directors have prepared detailed budget forecasts for each of their geographic locations, based on existing sales contracts as well as reflecting the revenue growth expected from current marketing strategies within the Group's Asian operations as well as from the growth opportunities identified within the recent acquisition of IPP.

The directors furthermore maintain a strict policy of utilising outsourced service and product providers in order to maintain a relatively low and stable operational cost basis estimated at approximately $1,780,000 for the next 12 months, while focusing on developing the Group's revenue potential.

On this basis the directors are of the opinion that the financial statements can be prepared on a going concern basis and the group will be able to pay its debts as and when they fall due and payable.

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 3. Operating segments

Identification of reportable operating segments

The consolidated entity is organised into operating segments as outlined below:

• the operating segments are based on the internal reports that are reviewed and used by the Board of Directors (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 CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

The information reported to the CODM is on at least a monthly basis.

Types of products and services

The principal products and services offered in each of these operating segments are as follows:

Covert Forensic Products These are patented hidden, invisible particles fused into a product or packaging during or after the manufacturing process. The Tracers are inexpensive and can be used in all key product manufacturing and packaging industries including plastics, paper, inks, textiles and coatings. They cannot be seen or removed, are non-toxic and meet Food Contact specifications. . YPB owns two patents over its Tracer products and is the only Company currently licensed in China to supply invisible tracers. YPB's proprietary scanner detects YPB's Forensic Tracers. They are low cost and can be used at any point in the supply chain - from manufacture through to point-of-sale. Digital Solutions A patent pending application (the "app") based platform designed for governments, brands and consumers to identify, manage, track and report counterfeit or diverted products within supply chains or at point-of-sale. It provide opportunities for consumer engagement between the brand owner and customer in a simple and easily deployed application suite available on all popular smartphones. Forensic Laboratory A well-equipped laboratory service currently operating out of the Thailand office which is Services made available to brands to forensically examine potential counterfeit products. Consulting Services A security consulting service that provides government corporations and intellectual property owners with solutions for deterrence of counterfeiting, grey markets, production diversions and fraud. Print Solutions The provision of anti-counterfeiting solutions to brands and resellers in packaging and labelling.

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 3. Operating segments

Operating segment information

	Covert				Intersegment
	Forensic	Digital	Print		eliminations/
	Products	Solutions	Solutions	Corporate	unallocated	Total
30 June 2015	$'000	$'000	$'000	$'000	$'000	$'000
Revenue
Sales to external customers	312	-	443		-	755
Interest income			2	19		21
Total revenue	312	-	445	19	-	776
EBITDA	(351)	(404)	83	(1,267)	-	(1,939)
Depreciation and amortisation	(13)	(82)	6	(325)		(427)
Profit/(loss) before income
tax expense	(365)	(486)	76	(1,592)		(2,366)
Income tax expense
Loss after income tax
expense						(2,366)
Assets
Segment assets	190	558	310	16,428		17,486
Total assets						17,486
Liabilities
Segment liabilities	136	1,215	110	2,050	-	3,511
Total liabilities						3,511
31 December 2014
Revenue
Sales to external customers	33	37	-	4	-	74
Interest income				11		11
Total revenue	33	37	-	15	-	85
EBITDA	(666)	(171)	-	(1,120)		(1,957)
Depreciation and amortisation	(8)			(307)	-	(315)
Impairment of assets				(2,206)		(2,206)
Loss before Income tax
expense	(408)	(171)		(3,633)	(268)	(4,478)
Income tax expense
Loss after income tax
expense						(4,478)
Assets
Segment assets	380	623	-	12,834	-	13,837
Total assets						13,837
Liabilities
Segment liabilities	744	794		1,574		3,112
Total liabilities						3,112

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 3. Operating segments

Geographical information

Geographical information
			Geographical non-current
	Sales to external	customers	assets
	2015	2014	2015	2014
	$"000	$'000	$'000	$'000
Australia	19	52	5,409	1,172
Peoples Republic of China and HK	260	33	11,308	12,665
Thailand	54	-	211	-
United States of America	443	-	558	-
	776	85	17,486	13,837

Note 4. Revenue

Note 4. Revenue
			Consolidated
			2015	2014
			$'000	$'000
Sales revenue
- Sale of goods			312	74
- Sale of services			443
Other revenue
Interest			21	11
Revenue			776	85
Note 5. Equity - issued capital
		Consolidated
	2015	2014	2015	2014
	Shares	Shares	$'000	$•000
Ordinary shares - fully paid	124,742,188	108,921,678	22,152	17,449

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 5. Equity - issued capital

Movements in ordinary share capital

		No.	$'000
1 Jan 15	Opening balance	108,921,678	17,449
4 Feb 15	Issued under share-based payments	73,333	22
24 Feb 15	Issued under share placement	10,000,000	3,000
6 Feb 15	Exercise of share options	10,357	2
2 Mar 15	Exercise of share options	29,618	6
15 Apr 15	Exercise of share options	1,607	1
28 Apr 15	Issued under Share Purchase Plan	4,522,182	1,357
7 May 15	Share issued on acquisition of IPP	1,170,913	390
15 Jun 15	Exercise of share options	7,500	2
30 Jun 15	Exercise of share options	5,000	1
	Less:Transaction costs on shares issued, net of tax	-	(78)
30 Jun 15	Closing balance	124,742,188	22,152

Ordinary sliares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Sfiare buy-bacl<

There is no current on-market share buy-back.

Note 6. Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial half-year.

12

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 7. Business combinations

On 7 May 2015, the Company acquired a security consulting business specialising in providing high security programs to governments, major brands and fortune 500 companies which operates under the name "Intellectual Product Protection" or "IPP" for a consideration of $641,000 (US$500,000) of which $252,000 (US$200,000) was paid/payable in cash and the balance by the issue shares in YPB Group Limited as disclosed in Note 5.

Details of the acquisition are as follows:

Details of the acquisition are as follows:
	$•000
Purchase consideration:
- Cashpaid/payable	252
- Issuance of shares	389
Total purchase consideration	641
The assets and liabilities recognised as a result of the acquisition are as follows:
	Fair value
	$•000
Cash and cash equivalents	21
Trade and other receivables	118
Intellectual property	520
Plant and equipment	13
Trade and other payables	(5)
Borrowings	(26)
Net identifiable assets acquired	641
	$'000
Purchase consideration - cash outflow:
Cash consideration	252
Less:unpaid cash	(126)
Outflow of cash - investing activities	126

13

YPB Group Ltd Notes to the financial statements 30 June 2015

Note 8. Events after tiie reporting period

On 6 July 2015, the Company advised the delivery of its first material invoice to Shenzhen Shensaier Limited (Shensaier) for the provision of YPB's invisible tracer products and T2 scanners.

On 14 July 2015, the Company advised the commencement of its tracer technology supply to China's largest salt label printing company with initial focus on provincial table salt manufacturer.

On 31 July 2015, IPP, a wholly owned subsidiary of the Group signed a Memorandum of Corporation (MOC) with Foilmakers Australia Pty Ltd for the production, marketing and sales of three IPP products.

On 3 August 2015, the Company announced it had appointed Mr Jens Michel as Global Chief Operating Officer (COO) who will be based in Thailand and commences on 1 September 2015.

On 19 August 2015, the Company advised its anti-counterfeit technology solution has been chosen to be applied for the Beijing Palace Museum's anti-counterfeit project and has commenced operation protecting entry permits of the museum staff.

On 26 August 2015, the Company announced that it had signed a letter of intent to acquire all the issued shares of proximity marketing technology company nTouch Holdings Pty Ltd.

On 28 August 2015, the Company announced that it had been selected by a Chinese bank to provide anti-counterfeiting solutions to its deposit certificates.

Other than the above, no matter or circumstance has arisen since 30 June 2015 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.

Note 9. Earnings per share

Note 9. Earnings per share
	Consolidated
	2015	2014
	$'000	$'000
Loss after income tax attributable to the owners of YPB Group Ltd	(2,366)	(4,480)
	Number	Number
Weighted average number of ordinary shares used in calculating basic earnings per share	119,970,070	103,739,417
Weighted average number of ordinary shares used in calculating diluted earnings per share	119,970,070	103,739,417
	Cents	Cents
Basic earnings per share	(1.97)	(4.32)
Diluted earnings per share	(1.97)	(4.32)

YPB Group Ltd Directors' declaration 30 June 2015

Note 10. Related party transactions

Included in trade and other receivables are $68,000 of loans advanced to a related party following completion of the acquisition of IPP on 7 May 2015. This loan is unsecured, has no fixed repayment term and is interest free.

Other than the above, there has been no change in related party transactions since the last annual reporting period.

Note 11. Contingent liabilities

There has been no change in contingent liabilities since the last annual reporting period.

YPB Group Ltd Directors' declaration 30 June 2015

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 30 June 2015 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 2001.

On behalf of the directors

Dated: 31=* August 2015

Chartered Accountants and Business Advisers

HALL CHADWICKS' (NSW)

YPB GROUP LIMITED ACN 108 649 421 AND CONTROLLED ENTITIES

SYDNEY

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF YPB GROUP LIMITED

Report on the Half-year Financial Report

We have reviewed the accompanying half-year financial report of YPB Group Limited, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration.

Level 40 2 Park Street Sydney NSW 2000 Australia

GPO Box 3555 Sydney NSW 2001

Ph: (612) 9263 2600 Fx: (612) 9263 2800

Directors' Responsibility for tlie Half-Year Financial Report

The directors of YPB Group Limited are responsible for the preparation of the halfyear financial report that gives a true and fair view in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410: Review of a Financial Report Performed by tfie 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 YPB Group Limited's financial position as at 30 June 2015 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of YPB Group Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequjently 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.

/nc/epenofence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

A member of AGN International Ltd, a worldwide association of separate and independent accounting and consulting firms

www.hallchadwick.com.au

SYDNEY • NEWCASTLE • PARRAMATTA • PENRITH • MELBOURNE • PERTH • BRISBANE • GOLD COAST • DARWIN

Liability limited by a scheme approved under Professional Standards Legislation.

HALL CHADWICKS? (NSW)

YPB GROUP LIMITED ACN 108 649 421 AND CONTROLLED ENTITIES

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF YPB GROUP LIMITED

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 YPB Group Limited is not in accordance with the Corporations Act 2001, including:

• (I) giving a true and fair view of YPB Group Limited's financial position as at 30 June 2015 and of its performance for the half-year ended on that date; and

• (ii) complying with AASB 134: Interim Financial Reporting and the Corporations Regulations 2001.

HALL GHADWIGK Level 40, 2 Park Street SYDNEY NSW 2000

GRAHAM WEBB Partner Date: 31 August 2015