HARRIS TECHNOLOGY GROUP LIMITED — Interim / Quarterly Report 2017

Jan 30, 2017

Harris Technology Group Limited ASX:HT8

31 January 2017

ASX and Media Release

Results and Appendix 4C for October - December 2016 Quarter

Harris Technology Group Limited (ASX: HT8 ) ( Harris Technology or the Company ) is pleased to report its results for the second quarter of the 2017 financial year ( Q2 or Quarter ), and attaches its cash flow report for the Quarter.

The Group results for the Quarter are in line with the expectations of Directors and management.

As announced in November 2016, the Company acquired Audion Innovision Pty Ltd ( Audion ) during the Quarter. The operations of the Audion business have been fully integrated with the Group’s operations, and the Q2 results include the trading results of the Audion business. Audion sales and margins for the Quarter have met the Company’s expectations. Audion’s turnover for the 45 days of the Quarter following the Audion acquisition was $1.04M, with positive EBITA.

Excluding the Audion trading results, the Group’s gross turnover achieved for Q2 was $12.75M, and Group EBITA for the Quarter was $43,590. The Group’s cash balance as at 31 December 2016 (including Audion) was $2.267M.

The Group has expended considerable energy on stabilising and re-engineering the diverse product base from its contributing divisions, further reducing expenses in rent and other variable costs, and reviewing new opportunities.

-ENDS

For further information, contact: Andrew Plympton Chairman M: +61 418 310 713 E: andrew@windwardmark.com

Garrison Huang Managing Director M: +61 412 164 286 E: garrisonh@anyware.com.au

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity

Harris Technology Group Ltd

ABN

Quarter ended (“current quarter”)

93 085 545 973 31 DECEMBER 2016

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) - GST Paid 1.9 Net cash from / (used in) operating activities	15,098 - (11,091) (73) - (1,376) (218) 0 1 - - - - (508)	30,284 - (23,991) (119) - (2,813) (589) 0 5 - (84) - 43 (870)
	1,832	1,868
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10) (c) investments	- (1,321) -	(3) (1,321) -

• See chapter 19 for defined terms

1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
(d) intellectual property (e) other non-current assets 2.2 Proceeds from disposal of: (a) property, plant and equipment (b) businesses (see item 10) (c) investments (d) intellectual property (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - - - - -	- - - - - - - - - -
	(1,321)	(1,323)
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	500 - - - 300 (1,443) - - -	500 - - - 1,200 (2,479) - - -
	(643)	(779)
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	2,399 1,832 (1,321) (643)	2,502 1,868 (1,323) (779)

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter	-	-
	2,267	2,267
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	2,267	2,399
	2,267	2,399
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 (978) 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		(978)
		-
Director fees ($17,600), inventory payments made to entities related to B.Xu ($82,225) & H.Chen ($320,822), rental payments made to G.Huang ($50,445) and an entity related to G.Huang (143,943), loan repayment to B.Xu ($304,754).

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) 4,000 3,471 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		4,000	3,471
Trade finance facility held with Westpac, secured, variable base rate + 0.90% margin rate

Trade finance facility held with Westpac, secured, variable base rate + 0.90% margin rate

9. Estimated cash outflows for next quarter	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (provide details if material) 9.8 Total estimated cash outflows	- (14,439) (148) - (1,356) (152) -
	(16,979)

10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions	Disposals
10.1 Name of entity	Audion Innovision Pty Ltd
10.2 Place of incorporation or registration	Australia
10.3 Consideration for acquisition or disposal	1,421
10.4 Total net assets	1,336
10.5 Nature of business	Technology distribution

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here:

............................................................ (Director/ ~~Company secretary~~ )

Date: 31 January 2017

Print name: Andrew Plympton

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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