FINBAR GROUP LIMITED — Interim / Quarterly Report 2021

Feb 23, 2021

Appendix 4D

For the Six Months Ended 31 December 2020

1. Details of the reporting period

This report details the consolidated results of Finbar Group Limited and its controlled entities for the six months ended 31 December 2020.

Comparatives are for the six months ended 31 December 2019.

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2. Results for announcement to the market 31-Dec-20	31-Dec-19	Change %
2.1 Revenue from ordinary activities 40,964 53,401 -23.29%
2.2 Proft from ordinary activities after tax attributable to members 4,000 6,184 -35.32%
2.3 Net Proft for the period attributable to members 4,023 6,644 -39.45%
2.4 Final 2020 Dividend per share, fully franked 1.0 cent 3.0 cents -66.67%
Declared Interim 2021 Dividend per share, fully franked 2.0 cents 2.0 cents 0.00%
Earnings per Share (Cents per Share) 1.48 2.44 -39.34%
2.5 Record date for dividend 5 March 2021
2.6 Explanation Refer to Company Announcement
3. Net tangible assets per share	31-Dec-20	31-Dec-19
Net tangible assets per share (Cents per Share)	89.39 90.75

4. Details of entities over which control has been gained or lost during the period

Not Applicable.

5. Details of dividends

The Board has declared a dividend of 2.0 cents per share payable on 19 March 2021.

The record date for the dividend is 5 March 2021.

6. Details of subsidiaries	Ownership
1 Mends Street Pty Ltd 100%
2 Homelea Court Springs Pty Ltd 100%
31 Rowe Avenue Pty Ltd 100%
32 Riversdale Road Pty Ltd 100%
36 Chester Avenue Pty Ltd 100%
43 McGregor Road Pty Ltd 100%
5-7 Harper Terrace Pty Ltd 100%
63 Adelaide Terrace Pty Ltd 100%
88 Terrace Road Pty Ltd 100%
96 Mill Point Road Pty Ltd 100%

Interim Financial Report 2020 1

Appendix 4D

For the Six Months Ended 31 December 2020

6. Details of subsidiaries (continued)	Ownership
172 Railway Parade West Leederville Pty Ltd 100%
175 Adelaide Terrace Pty Ltd 100%
239 Great Eastern Highway Pty Ltd 100%
241 Railway Parade Pty Ltd 100%
269 James Street Pty Ltd 100%
Finbar Applecross Pty Ltd 100%
Finbar Finance Pty Ltd 100%
Finbar Fund Pty Ltd 100%
Finbar Karratha Pty Ltd 100%
Finbar Port Hedland Pty Ltd 100%
Finbar Project Management Pty Ltd 100%
Finbar Sub 104 Pty Ltd 100%
Lot 1 to 10 Whatley Crescent Pty Ltd 100%
Finbar To Rent Pty Ltd 100%
Finbar Executive Rentals Pty Ltd 100%
Finbar Commercial Pty Ltd 100%
Finbar Sales Pty Ltd 100%
7. Details of joint venture entities	Ownership
240 Adelaide Terrace Pty Ltd 50%
647 Murray Street Pty Ltd 50%
Axis Linkit Pty Ltd 50%
Finbar Sub 5050 Pty Ltd 50%
Lot 1001 - 1003 Rowe Avenue Pty Ltd 50%
Rowe Avenue Pty Ltd 50%
Finbar Sub 107 Pty Ltd 50%
8. Foreign entities
Not Applicable.
9. Auditor’s review report
No dispute or qualifcation exists in the auditor’s review report.

2 Interim Financial Report 2020

FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES

INTERIM FINANCIAL REPORT

FOR THE FINANCIAL PERIOD ENDED 31[ST] DECEMBER 2020

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ABN 97 009 113 473 • ACN 009 113 473
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FINBAR GROUP LIMITED AND ITS CONTROLLED ENTITIES

INTERIM FINANCIAL REPORT

For the Six Months Ended 31 December 2020

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|---|---|
|CONTENTS|PAGE|
|Directors’ Report|4|
|Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income|8|
|Condensed Consolidated Interim Statement of Changes in Equity|9|
|Condensed Consolidated Interim Statement of Financial Position|10|
|Condensed Consolidated Interim Statement of Cash Flows|11|
|Notes to the Condensed Consolidated Interim Financial Statements|12|
|Directors’ Declaration|19|
|Independent Auditor's Review Report of Condensed Consolidated Interim Financial Report|20|
|Lead Auditors' Independence Declaration|22|

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Interim Financial Report 2020 3

DIRECTORS’ REPORT

For the Six Months Ended 31 December 2020

1. Directors

The Directors present their report together with the consolidated financial report of Finbar Group Limited ('the Company') for the six months ended 31 December 2020 and the auditor's review report thereon.

The Directors of the Company at any time during or since the end of the six months ended 31 December 2020:

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|---|---|
|Executive Director and Chairman|
|John CHAN - BSc, MBA, MAICD|Director since 27 April 1995|
|Chairman since 15 July 2010|
|Managing Director|
|Darren John PATEMAN - EMBA, GradDipACG, ACSA, AGIA, MAICD, AFAIM|Director since 6 November 2008|
|Managing Director since 15 July 2010|
|Executive Director and Chief Operations Officer|
|Ronald CHAN|Director since 24 February 2017|
|Non-executive Directors|
|Kee Kong LOH - B Acc, CPA|Director since 28 April 1993|
|Terence Siong Woon PEH - B.Comm, M.Comm|Director since 24 April 2018|
|Non-executive (Independent) Director|
|Lee VERIOS - LLB, MAICD|Director since 6 December 2011|
|2.|Company Secretary|
|Edward Guy BANK - B Bus, ASCPA|Company Secretary since 2 December 2016|

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3. Principal Activities

The principal activities of the Group during the course of the six months ended 31 December 2020 continued to be property development and investment.

The Group’s focus is the development of medium to high-density residential buildings and commercial developments in Western Australia by way of direct ownership, ownership through fully owned Subsidiaries or by equity accounted investees (through companies registered specifically to conduct the development).

The Group holds rental properties through 175 Adelaide Terrace Pty Ltd, Finbar Karratha Pty Ltd and Finbar Commercial Pty Ltd.

There were no significant changes in the nature of the activities of the Group during the financial half-year.

4. Operating Results

Total comprehensive profit attributable to owners of the group amounted to $4,023,000 (2019: $6,644,000).

5. Review of Operations

Completed Projects

Motive - 172 Railway Parade, West Leederville: 12 units have settled in the reporting period. The 143 unit development is now fully sold.

Concerto - 193 Adelaide Terrace, East Perth: 9 units settled in the reporting period. 1 unit remains for sale in the 227 unit development.

Aurelia - 96 Mill Point Road, South Perth: 7 units remain for sale in the 138 unit development.

4 Interim Financial Report 2020

DIRECTORS’ REPORT

For the Six Months Ended 31 December 2020

5. Review of Operations (continued)

Aire West Perth - 647-659 Murray Street, West Perth: 2 units have settled in the reporting period. The 244 unit development is now fully sold.

Reva - 5 Harper Terrace, South Perth: 1 unit has settled in the reporting period. 13 commercial units remain for sale in the 59 unit development.

Vue Tower - 63 Adelaide Terrace, East Perth: 12 units have settled in the reporting period. 20 units remain for sale in the 250 unit development.

Palmyra East Apartments - 43 McGregor Road, Palmyra: 17 units have settled in the reporting period. 12 units remain for sale in the 128 unit development.

Sabina - 908 Canning Highway, Applecross: 22 units have settled in the reporting period. 48 residential units remain for sale in the development of 164 residential apartments and 3 commercial units.

One Kennedy - 241 Railway Parade, Maylands: 9 units have settled in the reporting period. 53 units remain for sale in the development of 120 residential apartments and 3 commercial units.

Riverena - Lot 1001-1003 Rowe Avenue, Rivervale: 58 units have settled in the reporting period. 44 units remain for sale in the development of 125 residential apartments.

Currently Under Construction

Dianella Apartments - 36 Chester Avenue, Dianella: Construction works continues to progress well. To date 42 sales have been achieved in the development of 128 residential apartments.

Civic Heart - 1 Mends Street, South Perth: Construction commenced in January 2021, with completion expected during financial year ending 30 June 2024. To date 90 sales have been achieved in the development of 309 residential apartments and 26 commercial units.

Future Projects

Aurora Applecross - 3 Kintail Road, Applecross (Stage 2): Marketing of the Aurora project continues to progress, with construction expected to commence in the financial year ending 30 June 2022. The development consists of 118 residential apartments and 3 commercial units.

AT238 - 240 Adelaide Terrace, Perth: Development Approval has been received for 119 residential apartments and 2 commercial units. Marketing campaign to be launched in February 2021 and construction works are expected to commence in the current financial year. To date 12 residential sales have been achieved.

912 Canning Highway, Applecross (Stage 3): Development Approval has been received for 151 residential apartments and 3 commercial units.

Palmyra West Apartments - 43 McGregor Road, Palmyra (Stage 2): Development Approval has been received for 130 residential apartments.

239 Great Eastern Highway, Belmont: Development Approval has been received for a development of 194 residential apartments and 2 commercial units.

The Point - 31 Rowe Avenue, Rivervale: Development Approval has been received for a development of 167 apartments and 9 commercial units.

Springs Commercial - 2 Hawksburn Road, Rivervale: The company has not secured a lease to date which would underpin the viability of the development of a commercial building on this land. The company will continue to seek a leasing pre-commitment.

2 Homelea Court, Rivervale: Finbar through a wholly owned subsidiary holds an additional four abutting parcels of land in the Springs precinct in Rivervale for a combined value of $5.15m. The four vacant sites are located on the corners of Rowe Avenue and Homelea Court and comprise a total of 3,770 square metres of land which Finbar intends to amalgamate to develop a project consisting of approximately 185 apartments within a 10 level building.

Lot 1000 - 32 Riversdale Road, Rivervale: Development options are currently being explored.

187 Adelaide Terrace, East Perth: Development options are currently being explored.

Interim Financial Report 2020 5

DIRECTORS’ REPORT

For the Six Months Ended 31 December 2020

5. Review of Operations (continued)

Investment Property

Fairlanes - 175 Adelaide Terrace, East Perth: The Fairlanes property has been revalued during the reporting period. The valuation resulted in $131,502 increase to the value of the property. The company continues to benefit from the investment income generated from the leased property. The property is currently 91% leased. The company continues to actively market the remaining tenancies for rental.

Pelago Commercial - 23 & 26 Sharpe Avenue, Karratha: The Pelago commercial property has been revalued during the reporting period. The valuation resulted in a $467,800 increase in value of the property. The company continues to benefit from the investment income generated from the leased property. The property is currently 61% leased. The company continues to actively market the remaining tenancies for rental.

Pelago Residential - 23 & 26 Sharpe Avenue, Karratha: The Pelago residential property has been revalued during the reporting period. The valuation resulted in a $1,010,000 increase to the value of the property. The company continues to benefit from the investment income generated from the leased property. The property is currently 99% leased. The company continues to actively market the remaining tenancies for rental.

Vue Tower Commercial - 63 Adelaide Terrace, East Perth: Lot 4 at Vue Tower was acquired in December 2019 under Finbar Commercial Pty Ltd. The purchase price was $200,000. The property is leased to a non-profit organisation at $1 per annum until 13 June 2029.

Aurelia Commercial - 96 Mill Point Road, South Perth: Lots 132-138 at Aurelia were acquired in June 2020 under Finbar Commercial Pty Ltd. The fair value of the properties was recorded at $5,605,000. The company is actively marketing the tenancies for rental.

6. Dividends

Dividends paid or declared by the Company to members since the end of the previous financial year were:

	Dividends Paid During the Year 2020 Cents per Share	Total Amount $’000	Franked / Unfranked	Date of Payment	Date of Payment
	Final 2020 ordinary 1.00 2,721,231 Franked 21 September 2020
	Total Dividends Paid 2,721,231
	Franked dividends declared or paid during the year were franked at the rate of 30%.
	Proposed Dividend
	After the balance date the following dividend has been proposed by the Directors. The dividend has not been provided for and there are no income tax consequences.
	Interim 2021 ordinary 2.00 5,442,463 Franked 19 March 2021
	Total Dividend Proposed 5,442,463
	The fnancial effect of this dividend has not been brought to account in the fnancial statements for the six months ended 31 December 2020 and will be recognised in subsequent fnancial reports.
	Note				$
	Dealt with in the fnancial report as - Dividends 12 2,721,231
	Dividend Reinvestment Plan
	In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP for this interim dividend and until further notice. As such the DRP will not be active for the above mentioned interim dividend.

6 Interim Financial Report 2020

DIRECTORS’ REPORT

For the Six Months Ended 31 December 2020

7. Lead Auditor's Independence Declaration

The Lead Auditor’s Independence Declaration is set out on Page 22 and forms part of the Directors’ Report for the six months ended 31 December 2020.

Dated at Perth this 24th day of February 2021.

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

Darren Pateman Managing Director

Interim Financial Report 2020 7

CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Six Months Ended 31 December 2020

Note	Note	Note	Note	31-Dec-20 $’000	31-Dec-19 $’000
Revenue				40,964 53,401
Cost of sales				(32,520) (43,313)
Gross Proft				8,444 10,088
Other income 8				1,000 93
Administrative expenses				(3,587) (3,644)
Advertising expenses				(517) (2,767)
Revaluation increase of investment property				1,609 6,797
Revaluation increase of property, plant and equipment				110 595
Rental Expenses				(2,834)	(2,303)
Results from Operating Activities Finance income Finance costs				4,225 8,859 519 466 (30) (207)
Net Finance Income Share ofproft /(loss) of EquityAccounted Investees (net of income tax)				489 259 569 (48)
Proft before Income Tax Income tax expense 9				5,283 9,070 (1,283) (2,886)
Proft for the period				4,000 6,184
Other comprehensive income
Items which will not be reclassifed to proft or loss:
Revaluation of property, plant and equipment				33 658
Income tax relatingto components of other comprehensive income				(10) (198)
Other comprehensive income for theperiod, net of income tax				23 460
Total comprehensive income for the period				4,023 6,644
Earnings per Share:
Basic earnings per share (cents per share)				1.48 2.44
Diluted earnings per share (cents per share)				1.48 2.44
Dividends per share (cents per share) 12				1.00 3.00

The condensed notes on pages 12 to 18 are an integral part of these Condensed Consolidated Interim Financial Statements.

8 Interim Financial Report 2020

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the Six Months Ended 31 December 2020

Note	Share Capital $’000	Retained Earnings $’000	Asset Revaluation Reserve $’000	Total Equity $’000
Balance as at 1 July 2019 194,484 53,995 - 248,479
Total comprehensive income for the period
Proft - 6,184 - 6,184
Other comprehensive income - - 460 460
Transactions with owners, recognised directly in equity
Dividends to shareholders 12 - (8,164) - (8,164)
Balance as at 31 December 2019 194,484 52,015 460 246,959
Balance as at 1 July 2020 194,484 47,013 444 241,941
Total comprehensive income for the period
Proft - 4,000 - 4,000
Other comprehensive income - - 23 23
Transactions with owners, recognised directly in equity
Dividends to shareholders 12 - (2,721) - (2,721)
Balance as at 31 December 2020 194,484 48,292 467 243,243

Amounts are stated net of tax.

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The condensed notes on pages 12 to 18 are an integral part of these Condensed Consolidated Interim Financial Statements.

Interim Financial Report 2020 9

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

Note	31-Dec-20 $’000	30-Jun-20 $’000
ASSETS
Current Assets
Cash and cash equivalents 31,502 30,591
Trade and other receivables 7,562 10,341
Inventories 10 78,598 58,803
Investments in Equity Accounted Investees 311 746
Other assets 63 55
Total Current Assets 118,036 100,536
Non Current Assets
Trade and other receivables 27,281 26,911
Inventories 10 63,404 95,798
Investment property 11 98,941 97,331
Prepayments 179 -
Investments in Equity Accounted Investees 1,920 1,368
Property, plant and equipment 9,353 9,396
Deferred Tax Assets 6,135 6,313
Other assets 165 149
Total Non Current Assets 207,378 237,266
Total Assets 325,414 337,802
LIABILITIES
Current Liabilities
Trade and other payables 20,677 24,284
Loans and borrowings 13 45,240 55,504
Current tax payable 879 1,116
Employee benefts 508 490
Total Current Liabilities 67,304 81,394
Non Current Liabilities
Trade and other payables 1,791 1,766
Loans and borrowings 13 8,631 8,478
Deferred tax liabilities 4,401 4,179
Employee benefts 44 44
Total Non Current Liabilities 14,867 14,467
Total Liabilities 82,171 95,861
Net Assets 243,243 241,941
EQUITY
Share capital 194,484 194,484
Retained earnings 48,292 47,013
Reserves 467 444
Total Equity 243,243 241,941

The condensed notes on pages 12 to 18 are an integral part of these Condensed Consolidated Interim Financial Statements.

10 Interim Financial Report 2020

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the Six Months Ended 31 December 2020

	31-Dec-20 $’000	31-Dec-19 $’000
Cash Flows from Operating Activities
Cash receipts from customers 43,927 57,942
Cashpaid to suppliers and employees (30,917) (90,319)
Cash generated/(used in) Operating Activities 13,010 (32,377)
Interest paid (47) (566)
Income taxpaid (1,120) (2,313)
Net Cashgenerated/(used in) Operating Activities 11,843 (35,256)
Cash Flows from Investing Activities
Interest received 218 143
Dividends received from equity accounted investees 451 650
Acquisition of property, plant and equipment (61) (11)
Acquisition of investment property - (216)
Loans to Equity Accounted Investees (5,672) (1,331)
Proceeds from loans to EquityAccounted Investees 7,253 2,105
Net Cashprovided by Investing Activities 2,189 1,340
Cash Flows from Financing Activities
Proceeds from borrowings 13,268 52,524
Repayment of borrowings (23,668) (24,733)
Dividendspaid (net of DRP) (2,721) (8,164)
Net Cash (used in)/provided by Financing Activities (13,121) 19,627
Net increase/(decrease) in cash and cash equivalents 911 (14,289)
Cash and cash equivalents at 1 July 30,591 45,490
Cash and Cash Equivalents at 31 December 31,502 31,201

The condensed notes on pages 12 to 18 are an integral part of these Condensed Consolidated Interim Financial Statements.

Interim Financial Report 2020 11

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

1. Reporting Entity

Finbar Group Limited (the 'Company') is a public company domiciled in Australia. These condensed consolidated interim financial statements of the Group as at and for the six months ended 31 December 2020 comprise the Company and its subsidiaries (together referred to as the 'Group') and the Group's interest in equity accounted investees. The Group is primarily involved in property development and investment.

The consolidated annual financial statements of the Group as at and for the year ended 30 June 2020 are available on request from the Company's registered office at Level 6, 181 Adelaide Terrace, East Perth, WA, 6004 or can be downloaded from the Company's website at www.finbar.com.au.

2. Basis of Preparation

The condensed consolidated interim financial statements have been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001, and with IAS 34 Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 30 June 2020. The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 30 June 2020.

The condensed consolidated interim financial statements were approved by the Board of Directors on the 24th day of February 2021.

3. Significant Accounting Policies

The accounting policies applied by the Group in these condensed interim financial statements are the same as those applied by the Group in its financial statements as at and for the year ended 30 June 2020. A number of new standards are effective from 1 July 2020 but they do not have a material effect on the Group's financial statements.

4. Judgements and Estimates

In preparing these condensed interim financial statements management make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 30 June 2020.

5. Financial Risk Management

The Group's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 30 June 2020.

6. Changes in Accounting Policies

The Group's accounting policies are consistent with those disclosed in the financial statements as at and for the year ended 30 June 2020.

12 Interim Financial Report 2020

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

7. Operating Segments

The Group operates predominantly in the property development sector and has identified four reportable segments, as described below, which are the Group's three strategic business units, as well as the Corporate office. The strategic business units offer different products, and are managed separately because they require different technology, marketing strategies and have different types of customers. For each of the strategic business units, the Chief Operating Decision Maker (CODM) reviews internal management reports on a regular basis. The following describes the operations in each of the Group's reportable segments:

• » Residential apartment development in Western Australia;

• » Commercial office/retail development in Western Australia;

• » Rental of property in Western Australia; and

• » Corporate costs include supervision fees, management fees and net assets attributable to the corporate office.

» Corporate costs include supervision fees, management fees an	d net assets	attributable t	o the corpora	te offce.
Information about Reportable Segments For the Six Months ended 31 December 2020	Residential Apartment Development $’000	Commercial Offce/Retail Development $’000	Rental of Property $’000	Corporate $’000	Total $’000
External Revenues - Company and Subsidiaries	36,012 678 3,802 1,472 41,964
External Revenues - EquityAccounted Investees	9,646 - - - 9,646
External Revenues - Total	45,658 678 3,802 1,472 51,610
Reportable Segment Proft before Income Tax - Company and Subsidiaries	2,666 (184) 925 2,686 6,093
Reportable Segment Proft before Income Tax - Equity Accounted Investees	821 - - (17) 804
Reportable Segment Proft before Income Tax - Total	3,487 (184) 925 2,669 6,897
Information about Reportable Segments as at 31 December 2020
Reportable Segment Assets - Company and Subsidiaries	132,189 18,098 99,230 23,095 272,612
Reportable Segment Assets - Equity Accounted Investees	17,785 2,049 - - 19,834
Reportable Segment Liabilities - Company and Subsidiaries	39,395 945 35,422 1,128 76,890
Reportable Segment Liabilities - Equity Accounted Investees*	13,382 59 - 1 13,442
Capital Expenditure	- - - 36 36
Information about Reportable Segments For the Six Months ended 31 December 2019
External Revenues - Company and Subsidiaries	49,158 871 3,317 148 53,494
External Revenues - EquityAccounted Investees	2,481 - 11 - 2,492
External Revenues - Total	51,639 871 3,328 148 55,986
Reportable Segment Proft before Income Tax - Company and Subsidiaries	1,579 (738) 843 3,426 5,110
Reportable Segment Proft before Income Tax - Equity Accounted Investees	(62) - 8 (14) (68)
Reportable Segment Proft before Income Tax - Total	1,517 (738) 851 3,412 5,042
Information about Reportable Segments as at 31 December 2019
Reportable Segment Assets - Company and Subsidiaries	193,923 28,730 92,578 19,317 334,548
Reportable Segment Assets - Equity Accounted Investees	7,857 2,109 - - 9,966
Reportable Segment Liabilities - Company and Subsidiaries	86,900 2,284 36,956 1,012 127,152
Reportable Segment Liabilities - Equity Accounted Investees*	3,493 51 - 1 3,545
Capital Expenditure	- - - 17 17
* Excludes Liabilities payable to Finbar Group.

The Group's share of revenues from equity accounted investees are reported in this table as they are managed by Finbar and reported to the CODM. Revenues from equity accounted investees are not reported in the statement of profit or loss and other comprehensive income.

Interim Financial Report 2020 13

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

7. Operating Segments (continued)

Reconciliation of Reportable Segment Revenues, Profit or Loss, Assets and Liabilities

Reconciliation of Reportable Segment Revenues, Proft or Loss, Assets and Liabilities
Revenues	31-Dec-20 $’000	31-Dec-19 $’000
Total revenue for development reportable segments	36,690 50,029
Total revenue for rental segments	3,802 3,317
Total revenue for other reportable segments	1,472 148
Consolidated Revenue	41,964 53,494
Total revenue for development reportable segments - Equity Accounted Investees	9,646 2,481
Total revenue for rental segments included in other income - EquityAccounted Investees	- 11
Total Reportable Segments Revenue	51,610 55,986
Proft or Loss
Total proft or loss for reportable segments	6,897 5,042
Finance income - Company and Subsidiaries	519 466
Finance costs - Company and Subsidiaries	(30) (207)
Unallocated amounts:
Administrative expenses	(3,587) (3,644)
Revaluation of investment property	1,609 6,797
Revaluation of property, plant and equipment	110 595 (235) 21
Income tax applicable to share of (loss)/proft of EquityAccounted Investees
Consolidated Proft before Income Tax	5,283 9,070
Assets	31-Dec-20 $’000	30-Jun-20 $’000
Total assets for reportable segments	272,676 285,207 31,502 30,591
Cash and cash equivalents
Investments in Equity Accounted Investees	2,231 2,114
Other assets**	19,005 19,890
Consolidated Total Assets	325,414 337,802
Liabilities
Total liabilities for reportable segments	76,891 90,566
Other liabilities	5,280 5,295
Consolidated Total Liabilities	82,171 95,861

** Includes receivables due to Finbar Group Limited from Equity Accounted Investees.

Geographical Segments

The Group operates predominantly in the one geographical segment of Western Australia.

14 Interim Financial Report 2020

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

8. Other Income	31-Dec-20 $’000	31-Dec-19 $’000
Management Fees	611 61 389 32
Other
Total Other Income	1,000 93

9. Income Tax Expense

The Group's consolidated effective tax rate in respect of continuing operations (excluding equity accounted investees) for the six months ended 31 December 2020 was 27.2% (2019: 31.5%). After adjusting for the write off of previously recognised tax assets, non deductible expenses, non recoverable amounts and amounts over provided in prior years, the underlying tax rate is 24.6% (2019: 30%).

10. Inventories	31-Dec-20 $’000	30-Jun-20 $’000
Current	20,856 - 57,742 58,803
Work in Progress
Completed Stock
Total Current Inventories	78,598 58,803
Non Current	43,409 50,651 19,995 45,147
Work in progress
Completed Stock
Total Non Current Inventories	63,404 95,798

11. Investment Property

In accordance with the company’s policy, independent valuations were undertaken in December 2020 and June 2020 on all existing properties at the time of valuation. The independent valuations have concluded no significant impact on valuation of the properties due to the uncertainty from COVID-19 pandemic.

All investment properties of the Group have been categorised on a Level 3 fair value basis under AASB 13 Fair Value Measurement, as some of the inputs required to value the properties are not based on ''observable market data''. The updated significant unobservable inputs for the discounted cash flow and capitalisation of income valuation techniques as at 31st December 2020 are detailed below. For all other significant assumptions/inputs used please refer to the 30 June 2020 annual financial statements.

Discounted cash flows:

• » Expected market rental growth 0.00%-5.00%, weighted average 2.86%;

• » Void periods (average 7.8 months after the end of each lease);

• » Occupancy Rate 83.66%;

• » Risk-adjusted discounted rates (weighted average 7.75%).

Capitalisation of income valuation:

• » Capitalisation Rate 7.25%-10.00%;

• » Occupancy Rate 60.95%-99.02%;

• » Rent free period 28.5 months.

Interim Financial Report 2020 15

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

12. Capital and Reserves

12. Capital and Reserves	12. Capital and Reserves	12. Capital and Reserves	12. Capital and Reserves	12. Capital and Reserves
Share Capital Company
Ordinary Shares 31-Dec-20 31-Dec-19
			31-Dec-20	31-Dec-19
On issue at 1 July 272,123,142 272,123,142
On Issue at 31 December - FullyPaid 272,123,142 272,123,142
Dividends
The following dividends were declared and paid by the Group:
Cents per Share	Total Amount $’000	Franked / Unfranked	Date of Payment
Dividend Paid During the six months ended 31 December 2020 Final 2020 ordinary 1.00 2,721,231 Franked 21 September 2020
Total Amount 2,721,231
Dividend Paid During the six months ended 31 December 2019 Final 2019 ordinary 3.00 8,163,694 Franked 12 September 2019
Total Amount 8,163,694

13. Loans and Borrowings

Terms and debt repayment schedule

Terms and debt repayment schedule	Terms and debt repayment schedule
Terms and conditions of outstanding loans are as follows:		31-Dec-20 $’000	30-Jun-20 $’000
Nominal Interest Rate	Financial Year of Maturity	Carrying Amount $’000	Carrying Amount $’000
Commercial bills (Secured)* BBSY+2.00% 2021		13,643	14,393
Commercial bills (Secured) * BBSY+2.00% 2021		21,465	21,465
Investor loans to subsidiaries (Unsecured) BBSY+1.50% 2021		3,632	6,996
Investor loans to subsidiaries (Unsecured)** 2021		6,500	12,650
Total Current Loans and Borrowings		45,240	55,504
			- 8,478
Non Current
Investor loans to subsidiaries (Unsecured) 3% 2023		153
Investor loans to subsidiaries (Unsecured)** 2023		8,478
Total Non Current Loans and Borrowings		8,631	8,478
* These commercial bills are secured on the Group's investment properties and are due to expire in April 2021. The Group is in the process of refnancing both commercial bills.
** These are loans from land owners which are non-interest bearing.

16 Interim Financial Report 2020

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

14. Capital and Other Commitments	31-Dec-20 $’000	30-Jun-20 $’000
Commitments and Contingent Liabilities	21,304 -
Property Development
Contracted but not provided for and payable:
Within oneyear
Total PropertyDevelopment Commitments	21,304 -
	- 9,343
Property Development - Equity Accounted Investees
Contracted but not provided for and payable:
Within oneyear
Total PropertyDevelopment Commitments - EquityAccounted Investees	- 9,343
	- 4,672
Group's Share of Property Development - Equity Accounted Investees
Contracted but not provided for and payable:
Within oneyear
Total Share of PropertyDevelopment Commitments - EquityAccounted Investees	- 4,672
	21,304 4,672
Group's Property Development Commitments including Equity Accounted Investees
Contracted but not provided for and payable:
Within oneyear
Total PropertyDevelopment Commitments includingEquityAccounted Investees	21,304 4,672

15. Contingencies

15. Contingencies	15. Contingencies
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifce of economic benefts will be required or the amount is not capable of reliable measurement.
31-Dec-20 $’000	30-Jun-20 $’000
Guarantees
The Companyhasguaranteed the bank facilities of certain Controlled entities 15,827 16,577
16. Related Parties
Arrangements with related parties continue to be in place on the same basis as at 30 June 2020. For full disclosure of transactions refer to 30 June 2020 annual fnancial report.

Interim Financial Report 2020 17

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 31 December 2020

17. Subsequent Events

In October 2020, Finbar Sub 107 Pty Ltd entered into an agreement with the State Government of Western Australia that resulted in a $16 million purchase for the 5,335 square metres of development land located at Lot 101 Hay Street East Perth. The primary concept for this site is for the development of approximately 340 residential apartments to be developed as two towers over two stages. The contracted purchase is expected to conclude in March 2021.

With continuing economic uncertainty from the COVID-19 pandemic, the Company may require to grant further rent abatements and/or rent deferrals. Further mandatory closures and government mandated restrictions will influence the Australian economy and property market which may have a future impact on property valuations.

Other than the above, there has not arisen in the interval between the end of the financial half-year and the date of this report any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

18 Interim Financial Report 2020

Directors’ Declaration

In the opinion of the Directors of Finbar Group Limited ('the Company'):

The Condensed Consolidated Interim Financial Statements and notes that are contained in Pages 8 to 18 are in 1. accordance with the Corporations Act 2001, including:

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|||
|---|---|
|i)|giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its|
|performance for the six month period ended on that date; and|
|ii)|complying with Australian Accounting Standards AASB134 Interim Financial Reporting and the|
|Corporations Regulations 2001; and|
|There are reasonable grounds to believe that the Company and the group entities will be able to pay its debts as and|
|2.|
|when they become due and payable.|
|Dated at Perth this 24th day of February 2021.|
|Signed in accordance with a resolution of the Directors:|
|Darren Pateman|
|Managing Director|

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Interim Financial Report 2020 19

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Independent Auditor’s Review Report

To the shareholders of Finbar Group Limited

Conclusion

We have reviewed the accompanying Interim Financial Report of Finbar Group Limited.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the Interim Financial Report of Finbar Group Limited does not comply with the Corporations Act 2001 , including:

• [giving a true and fair view of the ] [Group’s] financial position as at 31 December 2020 and of its performance for the Half-year ended on that date; and

• [complying with ] [Australian Accounting ] Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

The Interim Financial Report comprises:

• [Condensed consolidated statement of ] financial position as at 31 December 2020

• [Condensed consolidated statement of profit ] or loss and other comprehensive income, Condensed consolidated statement of changes in equity and Condensed consolidated statement of cash flows for the Half-year ended on that date

• [Notes 1 to 17 comprising a summary of ] significant accounting policies and other explanatory information

• [The Directors’ Declaration. ]

The Group comprises Finbar Group Limited (the Company) and the entities it controlled at the Half year’s end or from time to time during the Half-year.

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 Group in accordance with the auditor independence requirements of the Corporations Act 2001 and 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.

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.

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Responsibilities of the Directors for the Interim Financial Report

The Directors of the Company are responsible for:

• the preparation of the Interim Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001

• such internal control as the Directors determine is necessary to enable the preparation of the Interim Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibilities for the Review of the Interim Financial Report

Our responsibility is to express a conclusion on the Interim 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 Interim Financial Report does not comply with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2020 and its performance for the Half-Year ended on that date, and complying with Australian 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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KPMG

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Derek Meates Partner Perth

24 February 2021

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

To the Directors of Finbar Group Limited

I declare that, to the best of my knowledge and belief, in relation to the review of Finbar Group Limited for the half-year ended 31 December 2020 there have been:

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

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

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KPMG

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Derek Meates Partner

Perth

24 February 2021

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.