PACIFIC CURRENT GROUP LIMITED - Interim / Quarterly Report 2021

Tacoma // Denver // Sydney // Melbourne

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26 February 2021

Company Announcements For Immediate Release ASX Code: PAC

APPENDIX 4D AND CONDENSED FINANCIAL REPORT FOR PACIFIC CURRENT GROUP LIMITED

In accordance with the Listing Rules of the Australian Securities Exchange (“ASX”), Pacific Current Group Limited encloses for immediate release the following information:

Appendix 4D, the Half Year Report for the half year ended 31 December 2020; and
The Condensed Financial Report for the half year ended 31 December 2020.

Authorised for lodgement by the Pacific Current Group Limited Board.

ENDS.

CONTACT:

For Investor and Media enquiries:

Paul Greenwood – [email protected] – (+1) 253 617 7815

ABOUT PACIFIC CURRENT GROUP

Pacific Current Group Limited is a multi‐boutique asset management firm dedicated to providing exceptional value to shareholders, investors and partners. We apply our strategic resources, including capital, institutional distribution capabilities and operational expertise to help our partners excel. Upon closing the investment in Astarte Capital Management LLP, Pacific Current Group will have investments in 15 boutique asset managers globally.

Pacific Current Group Limited (ABN 39 006 708 792) Level 29, 259 George Street, Sydney NSW 2000 Australia www.paccurrent.com

Tel: +61 2 8243 0400 // Fax: +61 2 8243 0410

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) ASX LISTING RULES – APPENDIX 4D HALF YEAR REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2020

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The following information is presented in accordance with ASX Listing Rule 4.2.A.3.

1. Details of the reporting period and the previous corresponding period

Current reporting period ‐ the half year ended 31 December 2020 Previous corresponding periods ‐ the half year ended 31 December 2019 ‐ the financial year ended 30 June 2020

2. Results for announcement to the market

Six‐month period ended 31 December

		2020	2019	Increase	/(Decrease)
		$’000	$’000	$’000	%
2.1	Revenue from ordinary
	activities	23,645	29,900	(6,255)	(20.92)
	Net profit/(loss) before tax	15,165	(13,342)	28,507	213.66
	Underlying net profit before tax	13,665	15,922	(2,257)	(14.18)
	Underlying net profit after tax	11,495	13,606	(2,111)	(15.51)
2.2	Net profit/(loss) from ordinary
	activities after tax attributable
	to members	11,625	(8,868)	20,493	231.09
	Underlying net profit (loss)
	from ordinary activities after
	tax attributable to members	11,578	13,365	(1,787)	(13.37)
2.3	Net profit/(loss) for the period
	attributable to members	11,625	(8,868)	20,493	231.09
	Underlying net profit (loss) for
	the period attributable to
	members	11,578	13,365	(1,787)	(13.37)
	Underlying results are unaudited Non‐IFRS measures. Refer to the attached Condensed Financial
	Report for the half year ended 31 December 2020		for details of these calculations.
2.4	Dividends (distributions)		Amount per	Franking %	Conduit foreign
			security		income per
			(cents)		security
	2021 Interim		10.0	100.0	Nil

2.5 Record date for determining entitlements to the dividend 5 March 2021

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) ASX LISTING RULES – APPENDIX 4D HALF YEAR REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2020

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2.6 Commentary on “Results for Announcement to the Market”

A brief explanation of any figures in 2.1 to 2.4 above, necessary to enable the figures to be understood, is contained in the attached Condensed Financial Report for the half year ended 31 December 2020.

3.	Net tangible assets per security	31	December	30 June
			2020	2020
	Net tangible assets per security		$6.56	$6.84

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

During the period, control was gained over the following entities:

During the period, control was gained over the following entities:
Name of entity	Date control gained
‐	‐
During the period, control was lost over the following entities:
Name of entity	Date control lost
Seizert Capital Partners, LLC	30 November 2020

5. Details of individual and total dividends or distributions and dividend or distribution payments.

				Franked amount	Conduit foreign
			Amount per	per security	income per
	Type	Payment date	Security (cents)	(%)	security
2020	Final	23 October 2020	25.0	100.0	Nil

6. Details of any dividend or distribution reinvestment plans

On 27 August 2020, the Board approved a Dividend Reinvestment Plan (“DRP”) for the Company. The Company’s DRP will apply to the interim dividend. The last election date for the DRP will be 8 March 2021.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) ASX LISTING RULES – APPENDIX 4D HALF YEAR REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2020

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7. Details of associates and joint venture entities

Details of associates and joint venture entities
	Ownership %
	31 December	30	June
	2020	2020
Aether General Partners	25.00		25.00
Blackcrane Capital, LLC	25.00		25.00
Capital & Asset Management Group, LLP1	35.00		32.50
Independent Financial Planners Group, LLC	24.90		24.90
Northern Lights Alternative Advisors LLP	23.00		23.00
Roc Group	30.00		30.00
Victory Park Capital Advisors, LLC	24.90		24.90
Victory Park Capital GP Holdco, L.P.	24.90		24.90
Copper Funding, LLC	50.00		50.00
Pennybacker Capital Management, LLC	16.50		16.50
	31 December	31 December
	2020	2019
	$’000	$’000
PAC share of profits/(loss) of associates/joint venture	1,916	3,488

Notes:

1 ‐ Capital & Asset Management Group, LLP made capital drawdowns during the period resulting to an increased interest from 32.5% to 35%.

8. For foreign entities, which set of accounting standards is used in compiling the report

Not applicable

9. Audit / Review of Accounts upon which this report is based and qualification of audit / review

This Half Year Report is based on the attached Condensed Financial Report for the half year ended 31 December 2020, which includes the Independent Auditor’s Review Report. The Condensed Financial Report for the half year ended 31 December 2020 is not subject to a modified opinion, emphasis of matter or other matter paragraph.

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Pacific Current Group Limited (ABN 39 006 708 792)

Condensed Financial Report For the half-year ended 31 December 2020

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) TABLE OF CONTENTS

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Table of Contents Directors’ Report ................................................................................................................................................... 1 Auditor’s Independence Declaration .................................................................................................................... 13 Consolidated Statement of Profit or Loss for the half-year ended 31 December 2020 .......................................... 14 Consolidated Statement of Comprehensive Income for the half-year ended 31 December 2020 .......................... 15 Consolidated Statement of Financial Position as at 31 December 2020 ................................................................ 16 Consolidated Statement of Changes in Equity for the half-year ended 31 December 2020 ................................... 17 Consolidated Statement of Cash Flows for the half-year ended 31 December 2020 ............................................. 18 Notes to the Condensed Financial Statements for the half-year ended 31 December 2020 .................................. 19 Directors’ Declaration .......................................................................................................................................... 64 Independent Auditor’s Review Report ................................................................................................................. 65 Corporate Directory ............................................................................................................................................. 67

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Your Directors submit their Report for the half-year ended 31 December 2020.

DIRECTORS AND OFFICERS

The Directors and officers of Pacific Current Group Limited (the “Company” or “PAC”) at the date of this report or at any time during the half-year ended 31 December 2020 were:

Name	Role	Date
Mr. Antony Robinson	Non-Executive Chairman	Appointed - 28 August 2015
Mr. Paul Greenwood	Executive Managing Director	Appointed - 10 December 2014
Mr. Peter Kennedy	Non-Executive Director	Appointed - 4 June 2003
Ms. Melda Donnelly	Non-Executive Director	Appointed - 28 March 2012
Mr. Gilles Guérin	Non-Executive Director	Appointed - 10 December 2014
Mr. Jeremiah Chafkin	Non-Executive Director	Appointed - 10 April 2019
Ms. Clare Craven	Company Secretary	Appointed - 26 December 2019

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The Company is a company limited by shares and is incorporated and domiciled in Australia. Its shares are listed for trading on the Australian Securities Exchange (“ASX”) with the ticker code PAC. The Company and its controlled entities (the “Group”) invest in global asset managers, private advisory, placement and private equity firms. The Group also provides, on an as agreed basis, distribution and management services and, in certain circumstances, financing to these firms.

The primary criteria the Company looks for in these potential investments are high quality people, a robust investment process, competitive performance and strong growth potential. The strategy of the Company is to build shareholder value through identifying, investing, and managing investments in investment management firms that exhibit moderate to high sustainable growth while delivering exceptional results to their clients.

The Company is agnostic in respect to geography so long as the investments meet the Group’s investment criteria. The Group invests across the life cycle continuum, from start-up opportunities to established but growing businesses. The portfolio is targeted to have a mix of businesses from those with solid earnings to those with dramatic earnings acceleration, albeit from a smaller investment base.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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OPERATING AND FINANCIAL REVIEW

REVIEW OF OPERATIONS

Investment activities during the period

Restructuring of investments

On 31 December 2020, the Group and Northern Lights Alternative Advisors LLP (“NLAA”) restructured the Group’s investment from a share in profits structure to a revenue share effective as at 31 March 2020. The Group is entitled to USD200,000 annually and an additional amount equal to 10% of all distributable cash flow in excess of USD3,000,000 for each accounting period ended 31 March. The restructure did not change the existing accounting treatment of the investment as an associate since the Group still maintain significant influence over NLAA.

NLAA is a strategic partner and placement agent, based in London, England, focused on private equity and hedge funds. For the period ended 31 December 2020, the share from NLAA amounted to $484,000.

Additional contributions to existing asset managers

The Group made an additional total contribution of GBP500,000 ($903,000) to Capital & Asset Management Group, LLP (“CAMG”) through capital drawdowns of GBP250,000 each made on 30 September 2020 and 16 December 2020. The Group was issued an additional interest of 2.5% for all the total drawdown resulting to an increased interest from 32.5% to 35%.

CAMG is a private infrastructure investment firm based in London, England and Washington, DC, USA. The existing accounting treatment of the investment as an associate did not change. For the period ended 31 December 2020, the share in net losses from CAMG amounted to $261,000.

On 30 December 2020, the Group and IFP Group, LLC (“IFP”) agreed to terminate the credit facility and convert any outstanding balances to an Additional Operating Capital Contribution. The Group is entitled to a 13% annualised return to be collected upon IFP making an initial distribution. As at 30 December 2020, the total drawdowns amounted to USD558,000 ($723,000) and the related interest amounted to USD43,000 ($55,000).

IFP is a multi-custodial registered investment adviser focused on delivering personalised, concierge-level service to advisors in the USA specialising in wealth management and retirement plan consulting.

Disposal of investments

On 30 November 2020, the Group completed the sale of all its economic interest in Seizert Capital Partners, LLC (“Seizert”) to the current Seizert management team. On 30 November 2020, the assets and liabilities of Seizert including the other identifiable intangibles held in Seizert were derecognised and the proceeds amounting to USD5,000,000 ($6,800,000) before tax was received. The results of operations of Seizert from 1 July 2020 to 30 November 2020 were included in the consolidated financial statements. The sale of the Group’s investment in Seizert resulted to a loss of $2,250,000.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Acquisition of a new investment subject to regulatory approval

On 24 December 2020, the Group entered into an agreement to purchase a minority interest In Astarte Capital Management, LLP (“Astarte”). Completion of the investment is subject to a regulatory approval in the United Kingdom which is expected to be subsequently received. If the acquisition is approved, the Group is committed to invest up to GBP4,400,000 ($7,799,000) to buy-out non-management shareholders and to provide operating capital to Astarte. Approximately 35% of the consideration may be deferred until July 2021. In exchange for this investment, the Group will be entitled to 40% of Astarte’s net income.

Astarte, founded in 2015, is an investment manager, based in London, England, focused on private markets real asset strategies. Astarte’s business model is distinctive in that it provides anchor/seed capital, working capital, and fundraising support to operating experts and emerging investment managers to support their growth.

Financing activities during the period

On 27 August 2020, the Board approved a Dividend Reinvestment Plan (“DRP”) for the Company.

On 31 August 2020, the Company declared a fully franked final dividend of 25 cents per share in respect of the 2020 financial year. The total amount of the dividend was $12,427,000. The final dividend for the 2020 financial year was eligible for the DRP. Shares issued under the DRP were subject to a 5% discount to the average daily Volume Weighted Average Price (“VWAP”) calculated over a 10-day period commencing on the third trading day following the record date, being 18 September 2020.

On 22 September 2020, the Company entered into an underwriting agreement to underwrite up to 50% of the offer of ordinary shares (“Shares”) in the Company made to its Shareholders under the DRP for the final dividend declared in respect to the 2020 financial year

On 23 October 2020, the Company issued 745,889 new fully paid ordinary shares at an issue price of $5.60 each to shareholders who reinvested their dividend entitlement in accordance with the DRP. In addition, the Company issued 363,595 new fully paid ordinary shares at an issue price of $5.60 per share under the partially underwritten DRP. Total dividends reinvested and proceeds from the new share issue amounted to $6,213,000 before issue costs.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Funds under management (“FUM”)

As at 31 December 2020, the FUM of the Group’s boutiques was $112,809,810,000 (30 June 2020: $93,320,896,000).

The net increase in FUM was due to positive net inflows and market performance from the asset managers particularly GQG Partners, LLC (“GQG”), Roc Group and Victory Park Capital Advisors, LLC (“VPC”) reduced by the disposal of Seizert.

Boutique Tier 1 Tier 2 Total Boutiques Open-end3 Closed-end3 Total	Total FUM as at 30 June 2020 Net Flows Other1 Foreign Exchange Movement2 Total FUM as at 31 December 2020 $’000 $’000 $’000 $’000 $’000 79,457,730 17,737,080 13,933,975 (10,411,570) 100,717,215 13,863,166 351,933 (1,479,275) (643,229) 12,092,595
	93,320,896 18,089,013 12,454,700 (11,054,799) 112,809,810
	72,280,876 17,137,591 11,929,954 (9,464,279) 91,884,142 21,040,020 951,422 524,746 (1,590,520) 20,925,668
	93,320,896 18,089,013 12,454,700 (11,054,799) 112,809,810

Notes:

1 Other includes investment performance, market movement, distributions and sale of the Group’s holdings in Seizert.

2 The Australian dollar (“AUD”) improved against the USA dollar (“USD”) during the period. The AUD/USD was 0.7708 as at 31 December 2020 compared to 0.6890 as at 30 June 2020. The Net Flows and Other items are calculated using the average rates.

3 Certain adjustments have been made to previously reported figures for presentation purposes.

The relationship between the boutiques’ FUM and the economic benefits received by the Group can vary dramatically based on factors such as:

the fee structures of each boutique;
the Group’s ownership interest in the boutique; and
the specific economic features of each relationship between the Group and the boutique.

Accordingly, the Company cautions against simple extrapolation based on FUM trends.

Tier 1 Boutique is a term used to describe an asset manager that the Group expects to produce at least $4,000,000 of annual earnings for the Group while a Tier 2 Boutique is one that the Group expects will contribute less than this. Although there is no guarantee that any boutique will meet this threshold, this categorisation is intended to provide insight into which boutiques are expected to be the most economically impactful to the Group.

Open-end is a term used by the Group to indicate FUM that are not committed for an agreed period and therefore can be redeemed by an investor on relatively short notice. Closed-end is a term used by the Group to denote FUM where the investor has committed capital for a fixed period and redemption of these funds can only eventuate after an agreed time and in some cases at the end of the life of the fund.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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FINANCIAL REVIEW

Operating results for the year

Underlying net profit after tax (“NPAT”) attributable to members of the Company

The Group generated a net profit before tax (“NPBT”) of $15,165,000 for the half-year ended 31 December 2020 (31 December 2019: net loss before tax (“NLBT”) of $13,342,000); an increase of 214%. This result, however, has been significantly impacted by non-cash, non-recurring and/or infrequent items. Normalising this result for the impact of these non-cash, non-recurring and/or infrequent items results in underlying NPAT to members of the Company of $11,578,000 (31 December 2019: $13,365,000), a decrease of 13%.

Reported NPBT/(NLBT) *Non-cash items* - Amortisation of identifiable intangible assets1 - Fair value adjustments of financial assets at FVTPL - Fair value adjustments of financial liabilities at FVTPL - Impairment of investments2 - Share-based payment expenses *Non-recurring/unusual items* - Loss on sale of a subsidiary - Legal, consulting expenses, deal costs and break fee costs3 - Provision for estimated liability for Nereus - Net foreign exchange (gain)/loss Underlying NPBT Income tax expense4 Underlying NPAT Less: share of non-controlling interests Underlying NPAT attributable to members of the Company	31 December 2020 31 December 2019 $’000 $’000 15,165 (13,342)
	3,008 2,865 (7,717) (12,395) 126 667 – 31,835 300 476
	(4,283) 23,448
	2,250 – 590 2,307 – 2,317 (57) 1,192
	2,783 5,816
	13,665 15,922 (2,170) (2,316)
	11,495 13,606
	83 (241)
	11,578 13,365

Notes:

1 The amortisation of identifiable intangible assets included the amortisation of intangible assets of the associates amounting to $1,646,000 (31 December 2019: $1,075,000). The amortisation is recorded as an offset to the share in net profit of the associates.
2 There were no impairment charges during the period (31 December 2019: Impairments were related to impairment of investment in associates and goodwill from subsidiaries excluding the impairment of capital contributions to Nereus amounting to $256,000).
3 These were costs incurred in relation to the derivative action against several of the Group’s current and former directors, deal costs on the acquisitions of investments and in prior year included expenses incurred for unsuccessful divestments.

4 The net income tax expense is the reported income tax expense adjusted for the tax effect of the normalisation adjustments.

The criteria for calculating the underlying NPAT attributable to members of the Company are based on the following:

Non-cash items relate to income and expenses that are accounting entries rather than movements in cash; and
- Non-recurring items relate to income and expenses from events that are infrequent in nature including their related costs and foreign exchange impact.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Cash flows

Set out below is a summary of the cash flows for the half-year ended 31 December 2020.

Cash provided by operating activities Cash provided/(used in) by investing activities Cash (used in) financing activities Net increase/(decrease) in cash and cash equivalents	31 December 2020 31 December 2019 $’000 $’000 12,896 9,371 2,038 (62,888) (7,410) (13,724)
	7,524 (67,241)

Operating activities

Cash flows from operations have increased from a net inflow of $9,371,000 for the half-year ended 31 December 2019 to net inflow of $12,896,000 for the half-year ended 31 December 2020. This was mainly attributable to the increase in dividends and distributions received from $12,483,000 in the prior period to $15,761,000 for this period and a reduction of income tax paid from $2,858,000 in the prior period to $1,017,000 for this period.

Investing activities

Cash flows from investing activities have increased from a net outflow of $62,888,000 in the half-year ended 31 December 2019 to net inflow of $2,038,000 in the half-year ended 31 December 2020. This was primarily attributable to the proceeds from the disposal of Seizert ($6,800,000) and offset by the cash held by Seizert at disposal ($4,529,000). In the prior period, this was primarily attributable to the acquisitions of Proterra Investment Partners, LP (“Proterra”) ($30,283,000); Pennybacker Capital Management, LLC (“Pennybacker”) ($29,002,000); additional contributions to associates (CAMG and Roc Group) for ($7,744,000) and net of collections of other financial assets ($5,527,000).

Financing activities

Cash flows used in financing activities decreased from $13,724,000 for the half-year ended 31 December 2019 to $7,410,000 for the half-year ended 31 December 2020. This was primarily due to payment of dividends of $8,250,000 excluding the dividends reinvested totalling to $4,177,000 under the DRP (31 December 2019: $7,146,000). In addition, the Group has no financial liabilities paid during the period compared to the prior period repayment of the earn-out liability of $9,800,000 and full repayment of Seizert notes payable of $7,335,000.

This was offset by the net proceeds from the issue of the Company’s ordinary shares which amounted to $1,974,000 after issue costs (31 December 2019: $11,993,000). For the half-year ended 31 December 2020, the issuance of the ordinary shares was completed on 23 October 2020 under the underwriting deed relating to the DRP with 363,595 new fully paid ordinary shares at $5.60 per share. The new shares rank equally with existing shares and are entitled to the interim dividend for 2021. For the half-year ended 31 December 2019, the issuance of the ordinary shares was completed on 9 December 2019 by a fully underwritten institutional placement with 2,066,116 new fully paid ordinary shares being issued at an issue price of $6.05 per share.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Normalised Cash Flow from Operations

Unaudited underlying NPBT *Non-cash/cash items* - Dividends and distributions income - Share of profits of associates - Dividends and distributions received - Net interest income - Net interest received/(paid) - Depreciation and amortisation - Increase/decrease in assets and liabilities Unaudited underlying pre-tax cash from operations *Non-recurring/infrequent items* - Legal, consulting expenses, deal costs and break fee costs - Net foreign exchange loss Pre-tax cash from operations Income tax paid Cash provided by operating activities	31 December 2020 31 December 2019 $’000 $’000 13,665 15,922
	(11,093) (10,253) (3,562) (4,564) 15,761 12,483 (90) (42) 51 (145) 475 528 566 1,052
	2,108 (941)
	15,773 14,981
	(590) (2,307) (1,270) (445)
	(1,860) (2,752)
	13,913 12,229 (1,017) (2,858)
	12,896 9,371

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Earnings/(loss) per share

Set out below is a summary of the earnings/(loss) per share for the half-year to 31 December 2020.

	31	31
	December	December
	2020	2019
Reported NPAT/net loss after tax (“NLAT”) attributable to the members of the	11,625	(8,868)
Company ($’000)
Unaudited underlying NPAT attributable to the members of the Company ($’000)	11,578	13,365
Weighted average number of ordinary shares on issue (Number)	50,124,540	47,766,900
Basic earnings/(loss) per share (cents)	23.19	(18.57)
Unaudited underlying earnings per share (cents)	23.10	27.97

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Dividends

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

	Cents	Total	Franked at	Date of Payment
	per	Amount	30%
	Share	$’000
Declared and paid during the period:
- Final for 2020 on ordinary shares	25.00	12,427	100%	23 October 2020
Declared after the end of the period:
- Interim for 2021 on ordinary shares	10.00	5,082	100%	15 April 2021

On 31 August 2020, the Directors of the Company declared a final fully franked dividend of 25 cents per share. The final dividend for 2020 financial year was subjected to the DRP established on 27 August 2020. The total dividends included reinvested amount of $4,177,000 with equivalent number of shares of 745,889.

On 26 February 2021, the Directors of the Company declared an interim fully franked dividend of 10 cents per share (28 February 2020: 10 cents per share). The interim dividend for 2021 financial year will be subject to the DRP. Any shares issued under the DRP will not be subject to any discount. The dividend has not been provided for in the 31 December 2020 half-year consolidated financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Financial position

Set out below is a summary of the financial position as at 31 December 2020.

Cash and cash equivalents Other current assets Non-current assets Current liabilities Non-current liabilities Non-controlling interest Net Assets	31 December 2020 30 June 2020 $’000 $’000 26,082 20,154 20,444 21,705 387,294 397,938 (16,093) (19,313) (31,742) (17,925) (348) (543)
	385,637 402,016

The remainder of the cash and cash equivalents as at 31 December 2020 provided the Group liquidity and flexibility to fund future acquisition of new businesses.

IMPACT OF COVID-19 TO THE GROUP FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

The COVID-19 pandemic continues to have an impact on global economies and financial markets. The Group’s financial results for the first half of FY21 have been impacted by COVID-19, but this has been mitigated due to the Group’s strategy to enhance the resilience of the Group’s earnings by diversifying into investments that are less susceptible to capital markets volatility and have a low correlation to other assets in the Group’s portfolio.

The Group’s assessment of the ongoing impact of COVID-19 continues to evolve and has been incorporated into the determination of its results of operations and measurement of its assets and liabilities. Valuations included in the financial report such as fair value assets, goodwill, other identifiable intangibles, investments in associates and joint venture and financial liabilities are based on the information available and relevant as at the date of this report. As market conditions are changing daily, changes to the estimates and outcomes that have been applied in the measurement of these assets and liabilities may arise in the future.

The Group continues to monitor developments in the COVID-19 pandemic and the measures being implemented to control it. Given the dynamic nature of these circumstances and the significant uncertainty, the related impact on the Group's future operating results, cash flows and financial condition cannot currently be reasonably estimated.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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OTHER MATTERS

On 17 September 2019, the Company received an originating application in the Federal Court of Australia in Melbourne by certain shareholders seeking leave of the court to commence a derivative action on behalf of the Company against several of its current and former Directors for damages arising out of the 2014 merger between the Company and the Northern Lights Capital Group, LLC. On 23 September 2019, the Company received a draft statement claim in relation to the derivative action.

On 20 February 2020, the certain shareholders received leave of the Federal Court of Australia under section 237 of the Corporations Act 2001 (Cth) to bring proceedings and file the statement of claim on behalf of the Company, against individuals who, in 2014, were Directors of the Company (previously known as Treasury Group Limited) prior to its business combination with Northern Lights Capital Partners, LLC (“Defendants”). The effect is that the Company is the named plaintiff in proceedings brought in the Federal Court of Australia against the Defendants. IMF Bentham (Fund 5) (the “Litigation Funder”) has given an undertaking to cover the Company’s costs and any liabilities or adverse cost orders made against the Company in favour of the Defendants. As a result, the claims are not expected to have a material adverse financial effect on the Company. If the proceedings are successful or are settled on terms that the Defendants pay an agreed amount, the Company will be entitled to the net proceeds after deducting specified legal costs and the Litigation Funder’s share. The Company has made claims against its relevant insurance policies in relation to these matters on behalf of its current Directors.

AUDITOR INDEPENDENCE

The Directors received an independence declaration from the auditors of the Group. A copy of the declaration is set out on page 13.

ROUNDING OF AMOUNTS

The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ report. Amounts in this report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

LIKELY DEVELOPMENTS

The Group will continue to operate in accordance with its investment objectives and strategy as defined in the Nature of Operations and Principal Activities.

SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE

On 26 February 2021, the Directors of the Company declared an interim dividend on ordinary shares in respect of the 2021 financial year. The total amount of the dividend is $5,082,000 which represents a fully franked dividend of 10 cents per share. The interim dividend for 2021 financial year will be subject to the DRP. Any shares issued under the DRP will not be subject to any discount. The dividend has not been provided for in the 31 December 2020 half-year consolidated financial statements.

Other than the matters detailed above, there has been no matter or circumstance, which has arisen since 31 December 2020 that has significantly affected or may significantly affect either the operations or the state of affairs of the Group.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ REPORT

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Signed in accordance with a resolution of the Directors made pursuant to s.306(3) of the Corporations Act 2001 .

On behalf on the Directors

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Antony Robinson Chairman

26 February 2021

Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney, NSW, 2000 Australia

Phone: +61 2 9322 7000 www.deloitte.com.au

The Board of Directors Pacific Current Group Limited Level 29, 259 George St SYDNEY NSW 2000

26 February 2021

Dear Board Members

Auditor’s Independence Declaration to Pacific Current Group Limited

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of independence to the directors of Pacific Current Group Limited.

As lead audit partner for the review of the half year financial report of Pacific Current Group Limited for the half-year ended 31 December 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.

Yours faithfully

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DELOITTE TOUCHE TOHMATSU

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Jonathon Corbett Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte Organisation.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Note Revenue 1 Other income, net gains/(losses) on financial instruments Distributions and dividend income 2 Sundry income 2 Loss on sale of investments 2 Net change in fair values of financial assets and liabilities 2 Expenses Salaries and employee benefits 3 Impairment expense 3 Administration and general expenses 3 Depreciation and amortisation expense 3 Interest expense 3 Share of net profits of associates and joint venture accounted for using the equity method 19 Profit/(loss) before income tax (expense)/benefit Income tax (expense)/benefit 4 Profit/(loss) for the period Attributable to: The members of the Company Non-controlling interests Earnings/(loss) per share attributable to members of the Company (cents per share): - Basic 6 - Diluted 6 Franked dividends paid per share (cents per share) for the period 14	31 December 2020 31 December 2019 $’000 $’000 12,398 18,483
	11,093 10,253 154 1,164 (2,250) – 7,591 11,728
	16,588 23,145
	(8,767) (11,298) – (32,091) (5,070) (12,415) (1,837) (2,318) (63) (336)
	(15,737) (58,458)
	1,916 3,488
	15,165 (13,342)
	(3,623) 4,715
	11,542 (8,627)
	11,625 (8,868) (83) 241
	11,542 (8,627)
	23.19 (18.57) 23.19 (18.57) 25.00 15.00

The accompanying notes form part of these condensed consolidated financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Note Profit/(loss) for the period Other comprehensive income/(loss): *Items that will not be reclassified subsequently to profit or loss* Change in fair value of financial assets, net of income tax 13 Reversal of the net fair value gain on financial assets at FVTOCI derecognised during the period 13 Foreign currency movement of investment revaluation reserve 13 *Items that may be reclassified subsequently to profit or loss* Exchange differences on translating foreign operations 13 Other comprehensive (loss)/income for the period Total comprehensive loss Attributable to: The members of the Company Non-controlling interests	31 December 2020 31 December 2019 $’000 $’000 11,542 (8,627)
	21,103 3,304 – (789) (8,519) (133)
	12,584 2,382
	(34,006) 1,032
	(21,422) 3,414
	(9,880) (5,213)
	(9,793) (5,536) (87) 323
	(9,880) (5,213)

The accompanying notes form part of these condensed consolidated financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

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Note Current assets Cash and cash equivalents Trade and other receivables, net of expected credit losses 8 Other financial assets 9 Current tax assets 4 Other assets Total current assets Non-current assets Trade and other receivables 8 Other financial assets, net of expected credit losses 9 Plant and equipment Right-of-use assets Intangible assets 18 Investments in associates and a joint venture 19 Other assets Total non-current assets Total assets Current liabilities Trade and other payables Provisions 10 Lease liabilities Current tax liabilities 4 Total current liabilities Non-current liabilities Provisions 10 Financial liabilities 11 Lease liabilities Deferred tax liabilities 4 Total non-current liabilities Total liabilities Net assets Equity Share capital 12 Reserves 13 Retained earnings Total equity attributable to members of the Company Non-controlling interests Total equity	31 December 2020 30 June 2020 $’000 $’000 26,082 20,154 7,473 14,837 2,040 2,248 10,162 2,792 769 1,828
	46,526 41,859
	552 283 209,950 197,986 643 932 757 2,096 52,530 62,732 122,580 133,606 282 303
	387,294 397,938
	433,820 439,797
	4,166 5,785 10,731 12,028 558 888 638 612
	16,093 19,313
	186 181 8,584 9,443 476 1,658 22,496 6,643
	31,742 17,925
	47,835 37,238
	385,985 402,559
	184,594 178,424 104,873 126,620 96,170 96,972
	385,637 402,016 348 543
	385,985 402,559

The accompanying notes form part of these condensed consolidated financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2020

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				Non-
			Retained	controlling	Total
Share capital		Reserves	earnings	interests	equity
	$’000	$’000	$’000	$’000	$’000
Balance as at 1 July 2020	178,424	126,620	96,972	543	402,559
Profit/(loss) for the period	–	–	11,625	(83)	11,542
Other comprehensive income:
(i) Net movement in investment
revaluation reserve (net of income tax)	–	12,584	–	–	12,584
(ii) Net movement in foreign currency
translation reserve	–	(34,002)	–	(4)	(34,006)
Total comprehensive (loss)/income for the
period	–	(21,418)	11,625	(87)	(9,880)
Transactions with members in their
capacity as members:
(i) Issuance of shares, net of share issue
cost and income tax (Note 12)	6,170	–	–	–	6,170
(ii) Dividends paid (Note 14)	–	–	(12,427)	(108)	(12,535)
(iii) Share-based payments	–	300	–	–	300
(iv) Shares bought on market to settle
performance rights vested	–	(629)	–	–	(629)
Total transactions with members in their
capacity as members	6,170	(329)	(12,427)	(108)	(6,694)
Balance as at 31 December 2020	184,594	104,873	96,170	348	385,985
Balance as at 1 July 2019	166,279	90,934	125,781	537	383,531
(Loss)/profit for the period	–	–	(8,868)	241	(8,627)
Other comprehensive income:
(i) Net movement in investment
revaluation reserve (net of income tax)	–	2,382	789	–	3,171
(ii) Net movement in foreign currency
translation reserve	–	950	–	82	1,032
Total comprehensive (loss)/income for the
period	–	3,332	(8,079)	323	(4,424)
Transactions with members in their
capacity as members:
(i) Issuance of shares, net of share issue
cost (Note 12)	12,145	–	–	–	12,145
(ii) Dividends paid (Note 14)	–	–	(7,146)	(415)	(7,561)
(iii) Share-based payments	–	476	–	–	476
(iv) Shares bought on market to settle
performance rights vested	–	(890)	–	–	(890)
Total transactions with members in their
capacity as members	12,145	(414)	(7,146)	(415)	4,170
Balance as at 31 December 2019	178,424	93,852	110,556	445	383,277

The accompanying notes form part of these condensed consolidated financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Note Cash flow from operating activities Receipts from customers Payments to suppliers and employees Dividends and distributions received Interest received Interest paid Income tax paid Net cash provided by operating activities 7 Cash flow from investing activities Collections from financial assets at amortised cost Collections of financial assets at fair value through profit or loss (“FVTPL”) Loans provided to associates Capital contributions to Nereus Holdings, LP Payments for the purchase of financial assets at FVTPL Additional contributions to financial assets at fair value through other comprehensive income (“FVTOCI”) Proceeds from sale of a subsidiary Cash held by deconsolidated subsidiary Proceeds from sale of associates Additional contributions to associates Payments for the purchase of a joint venture Payment for the purchase of plant and equipment Net cash provided by/(used in) investing activities Cash flow from financing activities Proceeds from issuance of shares, net of transaction costs Repayments of financial liabilities Repayments of principal portion of lease liabilities Dividends paid Dividends paid to non-controlling interest in a subsidiary Payments for the purchase of shares to settle shared-based payments Net cash (used in) financing activities Net increase/(decrease) in cash and cash equivalents held Cash at beginning of the period Unrealised foreign exchange difference in cash Cash at end of the period Non-cash investing and financing activities Investing activities 7 Financing activities 7	31 December 2020 31 December 2019 $’000 $’000 13,415 18,588 (15,320) (18,697) 15,761 12,483 118 522 (61) (667) (1,017) (2,858)
	12,896 9,371
	416 5,527 591 673 (298) (1,300) – (256) – (30,283) – (854) 6,800 – (4,529) – – 459 (935) (7,819) – (29,017) (7) (18)
	2,038 (62,888)
	1,974 11,993 – (17,135) (398) (387) (8,250) (7,146) (108) (415) (628) (634)
	(7,410) (13,724)
	7,524 (67,241) 20,154 80,232 (1,596) –
	26,082 12,991
	– (2,849) – 2,844

The accompanying notes form part of these condensed consolidated financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Index to the Notes to the Condensed Financial Statements

A.	BASIS OF	PREPARATION ...............................................................................................................20
B.	GROUP RESULTS FOR THE PERIOD ................................................................................................23
	1.	Revenue ............................................................................................................................ 23
	2.	Other income, gains on sale of investments and changes in fair values
		of financial assets and liabilities ....................................................................................... 24
	3.	Expenses ........................................................................................................................... 25
	4.	Income tax ........................................................................................................................ 27
	5.	Segment information ........................................................................................................ 29
	6.	Earnings/(loss) per share .................................................................................................. 33
	7.	Notes to consolidated statement of cash flows ............................................................... 34
C.	OPERATING ASSETS AND LIABILITIES ............................................................................................35
	8.	Trade and other receivables ............................................................................................. 35
	9.	Other financial assets ....................................................................................................... 36
	10.	Provisions .......................................................................................................................... 39
D.	CAPITAL,	FINANCING AND FINANCIAL RISK MANAGEMENT ..........................................................40
	11.	Financial liabilities ............................................................................................................. 40
	12.	Share capital ..................................................................................................................... 41
	13.	Reserves ............................................................................................................................ 43
	14.	Dividends paid and proposed ........................................................................................... 44
	15.	Fair value of financial instruments ................................................................................... 45
	16.	Capital commitments and contingencies ......................................................................... 49
E.	GROUP STRUCTURE ......................................................................................................................51
	17.	Interests in subsidiaries .................................................................................................... 51
	18.	Intangible assets ............................................................................................................... 53
	19.	Investment in associates and joint venture ...................................................................... 55
F.	OTHER INFORMATION ..................................................................................................................61
	20.	Share-based payments ..................................................................................................... 61
	21.	Significant events subsequent to reporting date .............................................................. 62
	22.	Adoption of new and revised Standards ........................................................................... 63

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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A. BASIS OF PREPARATION

This condensed financial report for the Company and the consolidated entities (the “Group”) for the half-year ended 31 December 2020, was authorised for issue in accordance with a resolution of the Directors on 26 February 2021.

It has been prepared in accordance with AASB 134 ‘ Interim Financial Reporting ’ (“AASB 134”) and the Corporations Act 2001 . Compliance with AASB 134 ensures that the financial statements and notes of the Group comply with International Financial Reporting Standard (“IFRS”) IAS 34 ‘ Interim Financial Reporting ’ as issued by the International Accounting Standards Board (“IASB”). Consequently, this financial report has been prepared in accordance with and complies with IFRS as issued by the IASB.

The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the annual report for the year ended 30 June 2020. It should also be considered together with any public announcements made by the Company in accordance with the continuous disclosure obligations of the ASX Listing Rules.

All amounts are presented in Australian dollars, unless otherwise stated.

The Company is a company limited by shares incorporated and domiciled in Australia. Its shares are listed for trading on the ASX with a ticker code PAC. It is a for-profit entity for financial reporting purposes under the Australian Accounting Standards.

The nature of operations and principal activities and operating and financial review of the Company are disclosed in the Directors’ Report.

a. Historical cost convention

The condensed financial statements have been prepared on the basis of historical cost, except for certain financial instruments that are measured at fair value at the end of each reporting period, as explained in the relevant accounting policies in most recent annual financial report.

Historical cost is generally based on the fair values of the consideration given in exchange for goods and services.

b. Foreign currency translations and balances

Functional and presentation currency

The individual financial statements of each Group entity are prepared in the currency of the primary economic environment in which that entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of the Group are expressed in Australian dollars, which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

Transactions and balances

In preparing the condensed consolidated financial statements, transactions in currencies other than the Group’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:

exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

Translation of foreign operations

For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into Australian dollar using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

For the purpose of presenting the transactions disclosed in the condensed notes to the financial statements, these transactions are translated into Australian dollar using the exchange rates prevailing at the date of transaction. For other amounts disclosed at the end of the reporting period, these amounts are translated into Australian dollar using the exchange rates prevailing at the end of the reporting period.

c. Going concern

This condensed financial report has been prepared on a going concern basis, which assumes that the Group will be able to meet its debts as and when they become due and payable. The Group also assessed the impact of COVID-19 in its ability to continue as a going concern. The Group prepared cash flow forecast analysis using base-case and a worsecase scenario. Under these scenarios, the Group can continue as a going concern and will still be able to meet its debts as and when they become due and payable.

d. Comparatives

The accounting policies adopted by the Group in the preparation and presentation of the condensed financial statements are consistent with the annual financial report for the year ended 30 June 2020. Where necessary, comparative information has been reclassified, repositioned and restated for consistency with current period disclosures.

e. Critical accounting estimates, judgments, and assumptions

The preparation of the condensed financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts in the condensed financial statements. Management continually evaluates its estimates and judgments in relation to assets, liabilities, contingent liabilities, revenue, and expenses. Management bases its estimates and judgments on historical information and other factors, including expectations of future events that may have an impact on the Group. All estimates, judgments and assumptions made are believed to be reasonably based on the most current set of circumstances available to management. Actual results may differ from the estimates, judgments, and assumptions.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Significant estimates, judgments, and assumptions made by management in the preparation of these condensed financial statements are outlined below:

Revenue recognition of performance fees (carried interest) - refer to Note 1b;
Income tax, tax basis for USA investments and recovery of deferred tax assets - refer to Note 4b;
Impairment of trade and other receivables – refer to Note 8b;
Valuation of financial assets at fair value and impairment of financial assets at amortised cost - refer to Note 9b and Note 15;
Provision for estimated liability to Hareon – refer to Note 10b;
Valuation of financial liabilities at fair value - refer to Note 11b;
Impairment of goodwill and other identifiable intangible assets - refer to Note 18b;
Impairment of investments in associates - refer to Note 19c; and
Share-based payment transactions - refer to Note 20b.

f. Coronavirus disease (“COVID-19”) impact

Considerations applied:

Consistent with the approach and processes applied in the preparation of the annual report for the year ended 30 June 2020, management had considered the following:

Re-assessed the impact of COVID-19 on the long term forecasts of the Group’s portfolio companies and updating its economic outlook primarily on inputs into the impairment and fair value analysis of the Group’s assets and liabilities including disclosures such as fair value disclosures of financial assets and liabilities;
Re-assessed the impact of COVID-19 on the long-term forecasts that may impact the recoverability of the Group’s deferred tax assets;
Reviewed whether there were any additional areas of estimation, judgement, or assumptions in addition to what have been disclosed in section A(e) above;
Re-evaluated trade and other receivables and financial assets at amortised cost for collectability and expected credit losses;
Reconsidered the impact of COVID-19 to the Company as a going concern (refer to Section A(c)) above; and
Reconsidered the impact of COVID-19 on the Group’s financial statements disclosures.

g. Rounding of amounts

The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the condensed financial statements. Amounts in the consolidated financial statements have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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B. GROUP RESULTS FOR THE PERIOD

This section provides information regarding the results and performance of the Group during the period, including note disclosures on revenue, other income, (loss)/gain on sale of investments and changes in fair values of financial assets and liabilities, expenses, income tax, segment information, earnings per share and reconciliation of cashflows.

1. Revenue

a. Analysis of balance

The Group derives its revenue from transfer of services over time and at a point in time as below:

Timing of revenue recognition Over time - Fund management fees - Performance fees - Commission revenue - Retainer revenue - Service fees At a point in time - Sundry revenue Total revenue	31 December 2020 31 December 2019 $’000 $’000 10,931 15,981 – 318 1,377 1,974 69 160 – 15
	12,377 18,448
	21 35
	12,398 18,483

b. Key estimates, judgments, and assumptions

Revenue recognition of performance fees

Performance fees are only recognised every end of the financial year of the controlled entity when the performance fees are realised and no significant reversal will occur.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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2. Other income, gains on sale of investments and changes in fair values of financial assets and liabilities

Analysis of balances

Distributions and dividend income: - Financial assets at FVTPL - Financial assets at FVTOCI Sundry income: Interest income: - Other persons/corporations - Related party Other sundry income Total sundry income Loss on sale of investments: Loss on sale of a subsidiary Total (loss) on sale of investments Changes in fair values of financial assets and liabilities: Financial assets through profit or loss Financial liabilities through profit or loss Total changes in fair values of financial assets and liabilities through profit or loss	31 December 2020 31 December 2019 $’000 $’000 6,235 6,688 4,858 3,565
	11,093 10,253
	101 349 53 29
	154 378
	– 786
	154 1,164
	(2,250) –
	(2,250) –
	7,717 12,395 (126) (667)
	7,591 11,728

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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3. Expenses

Analysis of balances

Salaries and employee benefits: - Salaries and employee benefits - Share-based payment expense Total salaries and employee benefits Impairment expenses: - Impairment of capital contributions: - Nereus Holdings, L.P. - Impairment of investment in associates (Note 19): - Freehold Investment Management Limited (“FIM”) - Victory Park Capital Advisors, LLC (“VPC”) - Impairment of intangible assets in a subsidiary (Note 18): - Seizert Capital Partners, LLC (“Seizert”) Total impairment expenses Administration and general expenses: - Accounting and audit fees - Commission and marketing expenses - Computer and software maintenance expenses - Deal costs - Directors’ fees - Insurance expenses - Lease expenses - Legal, compliance and professional fees - Net foreign exchange loss - Provision for estimated liability to Hareon Solar Singapore Pte Ltd (Note 10) - Share registry and regulatory fees - Taxes and license fees - Travel and accommodation costs - Other general expenses Total administration and general expenses	31 December 2020 31 December 2019 $’000 $’000 8,467 10,822 300 476
	8,767 11,298
	– 256
	– 115 – 14,007
	– 14,122
	– 17,713
	– 17,713
	– 32,091
	1,075 1,017 192 999 465 474 590 764 323 322 632 716 112 130 663 2,311 216 1,192 – 2,317 118 130 313 494 (7) 607 378 942
	5,070 12,415

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Depreciation and amortisation expenses: - Depreciation of plant and equipment - Amortisation of management rights - Amortisation of right of-use-assets Total depreciation and amortisation expenses Interest expense: - Lease liabilities - Notes payable - Seizert Total interest expenses Total expenses	31 December 2020 31 December 2019 $’000 $’000 160 181 1,362 1,790 315 347
	1,837 2,318
	63 92 – 244
	63 336
	15,737 58,458

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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4. Income tax a. Analysis of balances Income tax expense/(benefit) Total income tax expense/(benefit) recognised in profit or loss Current tax assets Income tax receivable1 Current tax liabilities Provision for income tax2 Non-current liabilities – net deferred tax liabilities *Components of net deferred tax liabilities:* - Liabilities - Assets Net deferred tax liabilities	31 December 2020 31 December 2019 $’000 $’000 3,623 (4,715)
	31 December 2020 30 June 2020 $’000 $’000 10,162 2,792
	638 612
	27,164 10,841 (4,668) (4,198)
	22,496 6,643

Notes:

1 This is the estimated income receivable of $797,000 in Australia and $9,365,000 in the USA (30 June 2020: USA).

2 This is the estimated income tax liability in the UK (30 June 2020: UK).

b. Key estimates, judgments, and assumptions

(i) Income tax

The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are a number of transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination may differ from the taxation authorities’ view. The Group recognises the impact of the anticipated tax liabilities based on the Group's current understanding of the tax laws. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

(ii) Tax basis for USA investments

The Group determines its tax obligation in the event of liquidation and/or disposal of its USA investments. This is calculated by determining the tax basis and tax basis adjustments as permitted under the USA Internal Revenue Code. The tax basis adjustments involved an estimation of the additional tax basis specific to the USA investments.

The tax calculated at the Group level is also dependent on the notification of allocated taxable income by the USA investments that are deemed as partnerships in the USA. The amount of taxable income allocated from such partnerships to the Group may be subject to judgement and hence be amended in future periods.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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(iii) Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable amounts will be available to utilise those temporary differences.

(iv) Tax losses not recognised

A deferred tax asset in relation to tax losses is regarded as recoverable and therefore recognised only when, on the basis of available evidence, it can be regarded as probable that there will be suitable taxable profits against which to recover the losses and from which the future reversal of underlying timing differences can be deducted. Deferred tax assets in relation to tax losses in Australia and the UK have not been recognised on the basis that there remains uncertainty regarding the timing and quantum of the generation of taxable profits.

c. Uncertainty over income tax treatments

The tax calculated at the Group level is dependent on the notification of allocated taxable income by investments in the USA deemed as pass-through vehicles for tax purposes. The amount of taxable income allocated from such partnerships to the Group may be subject to judgement and hence be amended in future periods.

Other than the above, the Group’s income taxes provision does not currently include any tax treatments for which there is uncertainty over whether the relevant taxation authority will accept the tax treatment under law.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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5. Segment information

a. Reportable segments

Information reported to the Company’s Board of Directors (the “Board”) as the chief operating decision maker (“CODM”) for the purposes of resource allocation and assessment of performance is focused on the profit/(loss) for the period earned by each segment.

The Group’s segment reporting is categorised on the following criteria:

Tier 1 boutiques – investments where the Group expects at least $4,000,000 of annual earnings; and
Tier 2 boutiques – investments where the Group expects less than $4,000,000 of annual earnings.

For subsequent segment reporting purposes, transfer from/to Tier 1 boutiques to/from Tier 2 boutiques will be based on either of the following:

their annual earnings contribution for two consecutive reporting periods. For example, an investment with an earnings contribution of $4,000,000 in the first reporting period and $3,000,000 in the second reporting period will still be classified as a Tier 1 boutique since one of its two reporting periods has an earnings contribution of $4,000,000; or
assessment of the Board that the category of a particular investment be amended because of a substantial loss of FUM and significant decline in the contribution to the Group.

The Group’s categorisation of its reportable segments under AASB 8: Operating Segments are as follows:

	31	30
	December	June
	2020	2020
	Segment	Segment
	Category	Category
Aether Investment Partners, LLC (“Aether”) and Aether General Partners	Tier 1	Tier 1
Blackcrane Capital, LLC (“Blackcrane”)	Tier 2	Tier 2
Capital & Asset Management Group, LLP	Tier 2	Tier 2
Carlisle Management Company S.C.A. (“Carlisle”)	Tier 1	Tier 1
EAM Global Investors, LLC (“EAM Global”)	Tier 2	Tier 2
GQG Partners, LP	Tier 1	Tier 1
IFP Group, LLC	Tier 2	Tier 2
Nereus Capital Investments (Singapore) Pte Ltd	Tier 2	Tier 2
Nereus Holdings, L.P.	Tier 2	Tier 2
Northern Lights Alternative Advisors, LLP	Tier 2	Tier 2
Pennybacker Capital Management, LLC	Tier 2	Tier 2
Proterra Investment Partners, LP	Tier 1	Tier 1
Roc Group	Tier 2	Tier 2
Strategic Capital Investors, LLP	Tier 2	Tier 2
Victory Park Capital Advisors, LLC	Tier 1	Tier 1
Victory Park Capital GP Holdco, L.P. (“VPC-Holdco”)	Tier 1	Tier 1

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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	31	30
	December	June
	2020	2020
	Segment	Segment
	Category	Category
Disposed during the period/prior period
AlphaShares, LLC	–	Tier 2
Freehold Investment Management Limited	–	Tier 2
Seizert Capital Partners, LLC	Tier 2	Tier 2

b. Analysis of balances

(i) Segment revenues and results

The following is an analysis of the Group’s revenues and results by reportable segments. The results reflect the elimination of intragroup transactions including those between the Group and its boutiques.

Tier 1 boutiques Tier 2 boutiques Central administration Total per consolidated statement of profit or loss	Segment revenue Share of net profits of associates Segment profit/(loss) for the period 31 December 2020 31 December 2019 31 December 2020 31 December 2019 31 December 2020 31 December 2019 $’000 $’000 $’000 $’000 $’000 $’000 8,169 10,231 1,742 3,407 23,655 13,229 4,221 8,243 174 81 1,250 (18,513)
	12,390 18,474 1,916 3,488 24,905 (5,284) 8 9 – – (13,363) (3,343)
	12,398 18,483 1,916 3,488 11,542 (8,627)

Tier 1 boutiques
Tier 2 boutiques
Central administration
Total per consolidated
statement of profit or loss

Segment revenue
Share of net profits of
associates
Segment profit/(loss) for
the period
31
December
2020
31
December
2019
31
December
2020
31
December
2019
31
December
2020
31
December
2019
$’000
$’000
$’000
$’000
$’000
$’000
8,169
10,231
1,742
3,407
23,655
13,229
4,221
8,243
174
81
1,250
(18,513)

12,390
18,474
1,916
3,488
24,905
(5,284)
8
9
–
–
(13,363)
(3,343)

12,398
18,483
1,916
3,488
11,542
(8,627)

The following details segment revenue:

31 December 2020 *Over time* - Fund management fees - Performance fees - Commission revenue - Retainer revenue - Service fees *At a point in time* _-_Sundry revenue	Tier 1 boutiques Tier 2 boutiques Central administra- tion Total $’000 $’000 $’000 $’000 6,965 3,965 – 10,930 – – – – 1,204 166 8 1,378 – 69 – 69 – – – –
	8,169 4,200 8 12,377
	– 21 – 21
	8,169 4,221 8 12,398

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792)

NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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31 December 2019 *Over time* - Fund management fees - Performance fees - Commission revenue - Retainer revenue - Service fees *At a point in time* _-_Sundry revenue	Tier 1 boutiques Tier 2 boutiques Central administra- tion Total $’000 $’000 $’000 $’000 8,589 7,392 – 15,981 – 318 – 318 1,555 410 9 1,974 87 73 – 160 – 15 – 15
	10,231 8,208 9 18,448
	– 35 – 35
	10,231 8,243 9 18,483

The following details segment (loss) after tax for the period for central administration:

Revenue Other income Loss on sale of investments1 Changes in fair values of financial assets and liabilities Salaries and employee benefits Administration and general expenses Depreciation and amortisation expenses Interest expense Income tax (expense)/benefit Central administration net loss	31 December 2020 31 December 2019 $’000 $’000 8 9 101 389 (2,250) – 81 (66)
	(2,060) 332
	(3,994) (2,377) (3,344) (5,639) (317) (336) (25) (38)
	(7,680) (8,390)
	(3,623) 4,715
	(13,363) (3,343)

Notes:

1 The loss on sale of investments and the related income tax expense are classified under central administration.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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(ii) Segment assets and liabilities

Tier 1 boutiques Tier 2 boutiques Central administration1 Total per consolidated statement of financial position	Segment assets Segment liabilities Segment net assets 31 December 2020 30 June 2020 31 December 2020 30 June 2020 31 December 2020 30 June 2020 $’000 $’000 $’000 $’000 $’000 $’000 335,979 344,469 28,852 27,111 307,127 317,358 63,076 77,161 19,376 11,011 43,700 66,150
	399,055 421,630 48,228 38,122 350,827 383,508 34,765 18,167 (393) (884) 35,158 19,051
	433,820 439,797 47,835 37,238 385,985 402,559

Notes:

1 The total assets and liabilities under central administration consisted of the following:

Cash and cash equivalents Trade and other receivables Income tax receivable Other financial assets Plant and equipment Right-of-use assets Other assets Total	Segment assets 31 December 2020 30 June 2020 $’000 $’000 18,698 7,431 Trade and other payables (5) 54 Provisions 10,162 2,792 Financial liabilities 4,154 5,446 Lease liabilities 561 756 Provision for income tax 420 637 Net deferred tax (assets) 775 1,051 34,765 18,167 Total	Segment liabilities 31 December 2020 30 June 2020 $’000 $’000 2,498 2,730 516 557 – – 635 979 638 612 (4,680) (5,762)
		(393) (884)

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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6. Earnings/(loss) per share

The following reflects the income and share data used in the calculations of basic and diluted earnings per share.

Basic earnings/(loss) per share: Net profit/(loss) attributable to the members of the Company ($’000) Weighted average number of ordinary shares for basic earnings per share Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share: Net profit/(loss) attributable to the members of the Company ($’000) Weighted average number of ordinary shares for diluted earnings per share Diluted earnings/(loss) per share (cents) Reconciliation of earnings/(loss) used in calculating earnings/(loss) per share: Net profit/(loss) attributable to the members of the Company used in the calculation of basic earnings/(loss) per share ($’000) Net profit/(loss) attributable to the members of the Company used in the calculation of diluted earnings/(loss) per share ($’000) Reconciliation of weighted average number of ordinary shares in calculating earnings/(loss) per share: Weighted average number of ordinary shares for basic and diluted earnings per share	31 December 2020 31 December 2019 11,625 (8,868) 50,124,540 47,766,900
	23.19 (18.57)
	11,625 (8,868) 50,124,540 47,766,900
	23.19 (18.57)
	11,625 (8,868)
	11,625 (8,868)
	50,124,540 47,766,900

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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7. Notes to consolidated statement of cash flows

Analysis of balances

a. Reconciliation of profit/(loss) to net cash inflow from operating activities

Profit/(loss) from ordinary activities after income tax *Adjustments and non-cash items:* - Loss on sale of a subsidiary - Depreciation and amortisation expense - Dividends received/receivable from associates and joint venture - Share based payments - Impairment of assets - Changes in fair values of financial assets and liabilities - Share of net profit from associates and joint venture - Non-operating foreign exchange transactions - Non-operating interest income - Non-operating interest expense - Other *Changes in operating assets and liabilities:* - Decrease/(increase) in trade and other receivables - Decrease in other assets - (Decrease) in trade and other payables - (Decrease) in current tax liabilities - Increase/(decrease) in net deferred taxes - (Decrease)/Increase in provisions Cash flows provided by operating activities b. Non-cash investing and financing activities *Investing activities:* - Recognition of right-of-use assets - Impact of AASB 16_‘Leases’_(“AASB 16”) on sublease receivables *Financing activities:* - Recognition of lease liabilities - Impact of AASB 16 on provisions	31 December 2020 31 December 2019 $’000 $’000 11,542 (8,627) 2,250 – 1,837 2,318 880 1,694 300 476 – 32,091 (7,591) (11,728) (1,916) (3,488) (193) 2,853 (51) 170 2 (331) – (81) 4,793 (90) 402 535 (790) (773) (7,344) (1,567) 8,817 (5,964) (42) 1,883
	12,896 9,371
	– (2,787) – (62)
	– (2,849)
	– 2,777 – 67
	– 2,844

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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C. OPERATING ASSETS AND LIABILITIES

This section provides information regarding the operating assets and liabilities of the Group as at end of the period, including note disclosures on trade and other receivables, other financial assets and provisions.

8. Trade and other receivables

a. Analysis of balances

Current Trade receivables Contract assets Dividend receivable Sundry receivables Loss allowance for expected credit losses Non-current Trade receivables	31 December 2020 30 June 2020 $’000 $’000 1,317 4,386 – 479 6,154 9,942 7 73
	7,478 14,880 (5) (43)
	7,473 14,837
	552 283

Impairment

As at 31 December 2020, an assessment on the expected credit losses was made on trade receivables and contract assets and indicated a total allowance of $1,000 (30 June 2020: $38,000).

Applying the expected credit loss model for dividend receivable and sundry receivables resulted to an additional amount of $3,000 as at 31 December 2020 (30 June 2020: $5,000).

As the balance of the expected credit losses for trade and other receivables were considered immaterial, no additional impairment provision was recognised (30 June 2020: $43,000 was recognised).

b. Key estimates, judgments, and assumptions

Impairment of trade and other receivables

The Group applied the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade and other receivables. The loss allowance was determined on the days past due and the credit risk characteristics of the balances.

As a response to COVID-19, the Group undertook a review of its trade, dividend and other receivables and the expected credit losses for each. The expected loss rates are then based on the payment profiles over a period of 36 months before 31 December 2020 and the corresponding historical credit losses experienced within this period. The historical loss rates are then adjusted to reflect current and forward-looking information on various factors affecting the ability of the counterparties to settle the receivables including the review of their financial statements.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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9. Other financial assets

a. Analysis of balances

Type of Instrument Current *Financial assets at amortised cost:* - Receivable from EAM Investors, LLC (“EAM Investors”)1 Debt - Loans receivable from IFP (Refer to Note 19 a(iii)) Debt - Sublease receivable Debt *Financial assets at FVTPL:* - Receivable from Raven Capital Management, LLC (“Raven”)2 Debt Non-current *Financial assets at amortised cost:* - Receivable from EAM Investors1 Debt - Loans receivable from IFP (Refer to Note 19 a(iii)) Debt - Sublease receivable Debt Loss allowance for expected credit losses *Financial assets at FVTPL:* - Investment in Carlisle3 Debt and Equity - Investment in Proterra4 Equity - Investment in IFP - preferential distribution (Refer to Note 19 a(iii)) Equity - Receivable from Raven2 Debt *Financial assets at FVTOCI:* - Investment in GQG5 Equity - Investment in EAM Global6 Equity		31 December 2020 30 June 2020 $’000 $’000 648 731 162 – 248 290
		1,058 1,021
		982 1,227
		2,040 2,248
		973 1,361 – 679 – 153 973 2,193 (6) (6) 967 2,187 60,148 60,670 27,504 29,464 1,936 1,214 1,146 1,690 90,734 93,038 109,126 95,214 9,123 7,547 118,249 102,761 209,950 197,986

Notes:

1 The receivable from EAM Investors pertains to the financing of USD2,250,000 provided by the Group on 21 February 2018. The loan has a term of six-years with interest of 10% per annum to assist EAM Investors in financing the repurchase of its equity from an outside shareholder. Repayments are received on a quarterly basis and the loan is expected to be fully settled by EAM Investors in June 2024.
2 The receivable from Raven pertains to the earn out component of the consideration on the sale of the investment on 14 October 2016. The Group is paid 33.33% of the management fees earned by Raven on new FUM. Payments are calculated quarterly until the USD3,500,000 earn out cap is met. During the period, the amount of USD427,000 (30 June 2020: USD855,000) was received and the balance of the earn-out was fair valued using a discounted cash flow method at 6.45% (30 June 2020: 6.84%) with the related changes in fair value taken to profit or loss.
3 The investment in Carlisle pertains to the purchase of 12,500 Preferred Shares of Carlisle and 5,000,000 units of Contingent Convertible Bonds issued by Carlisle. The Group is entitled to 16% of the revenues and 40% of the liquidation proceeds in the event of a sale.

Carlisle, founded in 2009, is a fully regulated alternative investment fund manager which manages alternative investment funds exclusively investing in US life settlements. Carlisle is organised under the laws of Luxembourg as a partnership limited by shares.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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4 The investment in Proterra pertains to the Group’s 16% equity interest in Proterra acquired on 21 September 2019. The Group is entitled to 8% of the gross management revenues and 16% of the liquidation proceeds in the event of a sale. The fair value of the investment as at 31 December 2020 was net of the fair value of the earn-out obligation of $1,056,000 that is due in February 2021 and $4,116,000 that is due in February 2022.

Proterra is an alternative investment manager based in Minneapolis, Minnesota, USA offering private equity investment strategies focused in global natural resources.

5 The Group owns 5% equity interest in GQG Partners, LP.

GQG Partners LLC (“GQG”) is an investment advisor and provides investment advisory and asset management services to a number of investment funds and managed accounts for USA and Non-USA investors. GQG manages global international and emerging markets public equity strategies. GQG was formed in April 2016, organised as a Delaware Limited Liability Company and is registered with the USA Securities and Exchange Commission.

6 This pertains to the Group’s 18.75% equity interest in EAM Global.

EAM Global was founded in March 2014, organised as a Delaware Limited Liability Company and is registered with the USA Securities and Exchange Commission. EAM manages emerging markets small cap, international small cap and international micro-cap public equities strategies. EAM Global generates the majority of its revenues by providing advisory services to domestic customers. Fees for such services are asset based and as a result, its revenues are variable and subject to market volatility.

Impairment of other financial assets at amortised cost

Applying the expected credit loss model for other financial assets at amortised cost resulted in estimated loss of $1,000 at 31 December 2020 (30 June 2020: $6,000).

For the half-year ended 31 December 2020, the balance of the expected credit losses for other financial assets at amortised cost was considered adequate and therefore no impairment provision was recognised. For the year ended 30 June 2020, the expected credit losses of $6,000 were recognised.

b. Key estimates, judgments, and assumptions

(i) Valuation of financial assets at fair value

The Group exercises significant judgement in areas that are highly subjective. The valuation of financial assets and the assessment of carrying values require that a detailed assessment be undertaken which reflects assumptions on markets, manager performance and expected growth to project future cash flows that are discounted at a rate that imputes relative risk and cost of capital considerations. Refer to Note 15 for the fair value disclosures.

(ii) Impairment of financial assets at amortised cost

The loss allowances for financial assets at amortised cost are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on the Group’s history, existing market conditions and forward-looking estimates at the end of each reporting period.

The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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In assessing whether credit risk has increased significantly since initial recognition, the Group considers the following information:

Significant deterioration in external market indicators of credit risk to which the fair value of the financial asset is substantially lower than its amortised cost;
Existing or expected changes in business, financial or economic conditions that will cause a significant decrease in the debtor’s ability to meet it debt obligations;
Actual or expected significant deterioration in the operating results of the debtor; and
Actual or expected adverse impact due to regulatory changes and issues that will result in a significant decrease in the debtor’s ability to meet it debt obligations.

Impact of COVID-19

While the specific areas of judgement noted above did not change, the Group applied further judgement to consider the impact of COVID-19 within those identified areas. Refer to Section A(f) for details.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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10. Provisions

10. Provisions
a. Analysis of balances Current Provision for estimated liability for Hareon1 Provision for annual leave Non-current Provision for long service leave Other	31 December 2020 30 June 2020 $’000 $’000 10,402 11,638 329 390
	10,731 12,028
	117 112 69 69
	186 181

Notes:

1 Pursuant to and in connection with the Aurora Share Subscription and Assignment Deed (“Aurora Subscription Deed”), dated 28 July 2015, between Aurora Investment Management Pty Ltd (as the Trustee of Aurora Trust), the Aurora Trust, Hareon Solar Singapore Private Limited (“Hareon”), Nereus Capital Investments (Singapore) Pte. Ltd (“NCI”) and Nereus Holdings Inc (“Nereus”), Aurora agreed to make a contingent additional contribution (“Additional Contribution”) to NCI of up to five over seven (5/7) of Hareon’s Capital Contribution less any amounts funded under the Guarantee as discussed in Note 16. This Additional Contribution can be drawn by NCI only to fund the exercise of the Put Option, which is held by Hareon, when and if it is exercised. In the Shareholders’ Deed (“Shareholder’s Deed”), dated 28 July 2015, Hareon may put its Class H Shares back to NCI at the “Put Option Price” any time within 60 days following the sixth anniversary of the commissioning of the first solar project sponsored by NCI, which occurred in June 2016. Thus, the Option can be exercised beginning July 2022. The Put Option Price is equivalent to a return of Hareon’s invested capital plus a specified return on their invested capital. The Class H shares have priority to other shareholders.

Management’s assessment of the Additional Contribution that may be required in the event that Hareon were to put its Class H Shares back to NCI is estimated to be $10,402,000 (USD8,018,000) (30 June 2020: $11,638,000 (USD8,018,000)). As at 31 December 2020, the Group’s potential obligation did not change except for the impact of the foreign exchange at period end. Management have estimated the value of this Additional Contribution based on the difference between the fair value of the solar plants operated by NCI and the redemption value of the Class H shares.

b. Key estimates, judgments, and assumptions

Provision for estimated liability to Hareon

Management determined the provision for estimated liability to Hareon based on a two-step process by calculating the fair value of the Solar Projects and the Group’s potential cash liability obligation. Step one was to determine the fair value of the Solar Projects by considering the assessed value determined by an independent expert and the indicative offer from a third party. Step two was to determine the value of the Group’s potential cash liability obligation based on the ranges of settlement amounts reduced by the fair value of the Solar Projects determined in step one.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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D. CAPITAL, FINANCING AND FINANCIAL RISK MANAGEMENT

This section provides information regarding the capital, financing and financial risk management of the Group during the period, including note disclosures on financial liabilities, share capital, reserves, dividends paid and proposed, fair values and capital commitments and contingencies.

11. Financial liabilities

a. Analysis of balances

Non-current *Financial liabilities at FVTPL:* - Earn out liability - Aether1 - Earn-out liability - Pennybacker2 - Deferred payment – former owners of EAM Global3 *Embedded Derivatives:* - CAMG put option4	31 December 2020 30 June 2020 $’000 $’000 3,541 4,244 4,543 4,737 234 193
	8,318 9,174
	266 269
	8,584 9,443

Notes:

1 The earn-out liability represents the amount owed by the Group to the former owners of Aether, for marketing and offering interests in the Aether Real Assets V, L.P. (“ARA Fund V”). This is due at the earlier of the final close of ARA Fund VII or three years after the close of ARA Fund VI. ARA Fund VI or ARA Fund VII are yet to be launched.
2 The earn-out liability represents the potential obligation to the vendors of Pennybacker with a maximum additional consideration for $9,730,000 (USD7,500,000), which would be paid between the closing of the transaction and 31 December 2024 if certain revenue thresholds for Pennybacker’s emerging growth and income platforms are met. At the date of acquisition, the Group recorded its share of the fair value of the potential earn-out obligation in the amount of $4,552,000 (USD3,139,000). As at 31 December 2020, the fair value of the earn-out obligation was estimated to be $4,543,000 (30 June 2020: $4,737,000). This increase in fair value was due to an increase in forecast cash flows.
3 The deferred payment pertains to the acquisition of the additional 375 preferred units in EAM Global from its former owners representing an additional 3.75% equity ownership in EAM Global. The deferred payment is equivalent to 2% and 1% of EAM’s gross revenues for the years ending 31 March 2021 and 31 March 2022, respectively.
4 By means of a Limited Liability Partnership Deed (“Deed”) (amended as at 12 August 2019) with CAMG, the Group has committed to make capital contributions of up to GBP4,000,000 over three years, for interests in CAMG up to a maximum of 40% in total. In exchange for drawing the remaining committed amount (each occurrence a “Subsequent Drawdown”), CAMG will issue and allot to the Group additional ordinary interests with the quantity dependent on conditions at each Subsequent Drawdown.

The Deed creates a series of put options whereby CAMG has a right (but not an obligation) to sell ordinary interests in CAMG to the Group at the Subsequent Drawdown amounts within a period of three years. Thus, the Group has a liability in the form of the put options granted to CAMG. The put option will expire in April 2021.

b. Key estimates, judgements, and assumptions

Valuation of financial liabilities at fair value

The Group exercises significant judgement in areas that are highly subjective (refer to Note 15a(i)). The valuation of liabilities and the assessment of carrying values require that a detailed assessment be undertaken which reflects assumptions on markets, manager performance and expected growth to project future cash outflows that are discounted at a rate that imputes relative risk and cost of capital considerations.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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12. Share capital

a. Analysis of balances

Issued and fully paid ordinary shares Movements in ordinary shares on issue Opening balance Shares issued - 23 October 2020 under the Dividend Reinvestment Plan established on 27 August 2020 (“DRP”) - 23 October 2020, under the underwriting deed relating to the DRP, net of share issue costs and income tax - 9 December 2019, net of share issue costs and income tax Closing balance	31 December 2020 30 June 2020 $’000 $’000 184,594 178,424 31 December 2020 30 June 2020 No. of shares $’000 No. of shares $’000 49,708,483 178,424 47,642,367 166,279 745,889 4,177 – – 363,595 1,993 – – – – 2,066,116 12,145	31 December 2020 30 June 2020 $’000 $’000 184,594 178,424
	50,817,967 184,594 49,708,483 178,424

The Company offers shareholders the opportunity to increase their holdings by participation in the DRP. The Company’s DRP offers shareholders the option to reinvest all or part of their dividend in new ordinary shares.

On 23 October 2020, the Company issued 745,889 new fully paid ordinary shares at an issue price of $5.60 per share (being the 5.0% discount to the average of the 10 daily market Volume Weighted Average Price) under the Company’s DRP. Total dividends reinvested amounted to $4,177,000.

On 23 October 2020, pursuant to a DRP underwriting agreement the Company issued 363,595 new fully paid ordinary shares at an issue price of $5.60 per share; totalling $2,036,000 before issue costs.

On 9 December 2019, the Company completed a fully underwritten institutional placement of 2,066,116 new fully paid ordinary shares at an issue price of $6.05 per share totalling $12,500,000 before issue costs. The proceeds of the placement were used to settle deferred consideration from existing investments and to replenish the Company’s operating capital.

The new shares rank equally with existing shares. Fully paid ordinary shares carry one vote per share and carry the right to dividends.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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b. Capital management

The Company’s capital management policies focus on ordinary share capital. When managing capital, the Board’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits to other stakeholders.

During the half-year ended 31 December 2020, the Company paid cash dividends of $8,250,000 whilst the remaining balance of $4,177,000 was through DRP (31 December 2019: $7,146,000). The Board anticipates that the median payout ratio to be in the range of 60% to 80% of the underlying net profit after tax of the Group. The Board continues to monitor the appropriate dividend payout ratio over the medium term.

The Board is constantly reviewing the capital structure to take advantage of favourable cost of capital or high returns on assets. As the market is constantly changing, the Board may change the amount of dividends to be paid, issued under the DRP or conduct share buybacks.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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13. Reserves

Analysis of balances

Investment revaluation reserve Foreign currency translation reserve Equity-settled employee benefits reserve	31 December 2020 30 June 2020 $’000 $’000 76,189 63,605 22,276 56,278 6,408 6,737
	104,873 126,620

(i) Investment revaluation reserve

This reserve records the Group’s gain on its financial assets at FVTOCI.

Movements in reserve:

Opening balance Movement in other comprehensive income: - Net fair value gain on financial assets at FVTOCI, net of income tax - Foreign currency movement Transfers between reserve: - Reversal of the net fair value gain, net of income tax, on financial assets at FVTOCI derecognised during the period Closing balance (ii) Foreign currency translation reserve This reserve records the Group’s foreign currency translation of foreign operations. Movements in reserve: Opening balance Movement in other comprehensive income: - Exchange differences on translating foreign operations of the Group Share of non-controlling interests Closing balance	63,605 36,616 21,103 28,091 (8,519) 15
	12,584 28,106
	– (817)
	76,189 63,605
	56,278 47,844 (34,006) 8,482 4 (48)
	22,276 56,278

(iii) Equity settled employee benefits reserve

This reserve is used to record the value of equity benefits provided to Directors and employees as part of their remuneration. Refer to Note 20 for further details of these plans.

Movements in reserve:

Opening balance Share-based payments (refer to Note 20(ii)) Value of shares bought on market to settle performance rights vested (refer to Note 20(iii)) Closing balance	6,737 6,774 300 961 (629) (998)
	6,408 6,737

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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14. Dividends paid and proposed

Analysis of balances

*Previous financial year final dividend paid during the half-year:* Fully franked dividend at 25 cents per share (31 December 2019: 15 cents per share) _Declared after the reporting period and not recognised_1: Fully franked dividend at 10 cents per share (31 December 2019: 10 cents per share)	31 December 2020 31 December 2019 $’000 $’000 12,427 7,146
	5,082 4,971

The fully franked dividend paid during the current half-year included dividends reinvested totalling to $4,177,000 with equivalent number of shares of 745,889 issued under the Company’s DRP.

Notes:

1 Calculation was based on the ordinary shares on issue as at 31 January 2021 (31 December 2019: 31 January 2020).

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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15. Fair value of financial instruments

a. Fair value estimation

(i) Fair value hierarchy

Some of the Group’s financial assets and financial liabilities are measured on a recurring basis at fair value at the end of each reporting period.

The Group classifies fair value measurements using the fair value hierarchy categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.

The following table gives information about how the fair values of those financial assets / liabilities categorised as Level 3 items are determined (in particular, the valuation techniques and inputs used):

Financial instruments	31 December 2020 $’000	30 June 2020 $’000	Valuation techniques and unobservable inputs	Range of inputs	Relationship of unobservable input to fair value
Financial assets at FVTPL
Investment in Carlisle	60,148	60,670	Discounted Cash Flow - Revenue growth derived from FUM growth - Discount rate - Terminal growth rate	6.4% to 12.8% (30 June 2020: 6.4% to 27.9%) 10% to 18% (30 June 2020: 20%) 3% (30 June 2020: 3%)	1% (30 June 2020: 1%) lower or higher terminal growth rate while all the other variables were held constant, the fair value would decrease by $2,230,000 and increase by $2,573,000 (30 June 2020: decrease by $1,742,000 and increase by $1,887,000).
Investment in Proterra	27,504	29,464	Discounted Cash Flow - Revenue growth derived from FUM growth - Discount rate - Terminal growth rate	(0.9%) to 37.2% (30 June 2020: 3% to 37%) 9.5% to 14.4% (30 June 2020: 8.5% to 14.5%) 2.5% (30 June 2020: 2.5%)	1% (30 June 2020: 1%) lower or higher terminal growth rate while all the other variables were held constant, the fair value would decrease by $1,477,000 and increase by $1,748,000 (30 June 2020: decrease by $236,000 and increase by $249,000).

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Financial instruments	31 December 2020 $’000	30 June 2020 $’000	Valuation techniques and unobservable inputs	Range of inputs	Relationship of unobservable input to fair value
Investment in IFP - preferential distribution	1,936	1,214	Discounted Cash Flow - Discount rate	10% and 13% (30 June 2020: 10%)	1% (30 June 2020: 1%) lower or higher discount rate while all the other variables were held constant, the fair value would decrease by $9,000 and increase by $9,000 (30 June 2020: decrease by $5,000 and increase by $5,000).
Receivable from Raven	2,128	2,917	Discounted Cash Flow - Projected revenue from the new FUM of the business - Discount rate	33.33% (30 June 2020: 33.33%) 6.45% (30 June 2020: 6.84%)	1% (30 June 2020: 1%) lower or higher discount rate while all the other variables were held constant, the fair value would increase by $27,000 and decrease by $23,000 (30 June 2020: increase by $40,000 and decrease by $39,000).
Financial assets at FVTOCI
Investment in GQG	109,126	95,214	Discounted Cash Flow - Revenue growth derived from FUM growth - Discount rate - Terminal growth rate - Probability factor on: - discounted cash flow - control transaction value - call option value	7.6% to 15.3% (30 June 2020: 7.6% to 45%) 14.5% (30 June 2020: 15%) 3% (30 June 2020: 3%) 65% (30 June 2020: 65%) 10% (30 June 2020: 10%) 25% (30 June 2020: 25%)	1% (30 June 2020: 1%) lower or higher terminal growth rate while all the other variables were held constant, the fair value would decrease by $4,379,000 and increase by $5,213,000 (30 June 2020: decrease by $2,772,000 and increase by $3,353,000).
Investment in EAM Global	9,123	7,547	Discounted Cash Flow - Revenue growth derived from FUM growth - Discount rate - Terminal growth rate	10.1% (30 June 2020: (2%) to 10.1%) 18.5% (30 June 2020: 19%) 3% (30 June 2020: 3%)	1% (30 June 2020: 1%) lower or higher terminal growth rate while all the other variables were held constant, the fair value would decrease by $320,000 and increase by $364,000 (30 June 2020: decrease by $145,000 and increase by $290,000).

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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Financial instruments	31 December 2020 $’000	30 June 2020 $’000	Valuation techniques and unobservable inputs	Range of inputs	Relationship of unobservable input to fair value
Financial liabilities at FVTPL
Earn out liability - Aether	3,541	4,244	Discounted Cash Flow - Discount rate	7% (30 June 2020: 7%)	1% (30 June 2020: 1%) lower or higher discount rate while all the other variables were held constant, the fair value would increase by $76,000 and decrease by $73,000 (30 June 2020: increase by $101,000 and decrease by $98,000).
Earn out liability – Pennybacker	4,543	4,737	Discounted Cash Flow - Revenue growth derived from FUM growth - Earn-out factor to earn- out multiplier - Discount rate	$9,086,000 (30 June 2020: $7,703,000) 50% (30 June 2020: 60%) 15% (30 June 2020: 15%)	1% (30 June 2020: 1%) lower or higher discount rate while all the other variables were held constant, the fair value would increase by $127,000 and decrease by $122,000 (30 June 2020: increase by $154,000 and decrease by $147,000).
Deferred payment – former owners of EAM Global	234	193	Discounted Cash Flow - Projected gross revenues for the years ending 31 March 2022 and 2023 - Discount rate	2% and 1% (30 June 2020: 2% and 1%) 18.5% (30 June 2020: 19%)	1% (30 June 2020: 1%) lower or higher discount rate while all the other variables were held constant, the fair value would increase by $3,000 and decrease by $3,000 (30 June 2020: increase by $3,000 and decrease by $3,000)
Embedded derivatives
CAMG put option	266	269	- Commitment amount - Probability factor that the put option will be exercised	$2,659,000 (30 June 2020: $3,590,000) 10% (30 June 2020: 7.5%)	1% (30 June 2020: 1%) lower or higher probability factor while all the other variables were held constant, the fair value would decrease by $27,000 and increase by $27,000 (30 June 2020: decrease by $36,000 and increase by $36,000)

(ii) Transfers between levels and changes in valuation techniques

There were no transfers between the levels of fair value hierarchy during the period. There were also no changes made to any of the valuation techniques applied as at 31 December 2020.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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(iii) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

Except as detailed in the table below, the carrying amounts of financial assets (cash and cash equivalents, trade and other receivables and security deposits) and financial liabilities (trade and other payables) recognised in the condensed financial statements approximate their fair values.

	31 December	2020	30 June	2020
	Carrying	Fair	Carrying	Fair
	amount	value	amount	value
	$’000	$’000	$’000	$’000
Financial assets at amortised cost
- Receivable from EAM Investors	1,621	1,702	2,092	2,206
- Loans receivable from IFP	162	162	679	691

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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16. Capital commitments and contingencies

a. Capital commitments The Group has outstanding capital commitments as follows: - CAMG further drawdowns until April 2021 (GBP1,000,000) (30 June 2020: GBP1,500,000) - Additional Contribution to NCI (USD12,095,000) (30 June 2020: USD12,095,000)1 - Astarte Capital Management, LLP (“Astarte”) (GBP4,400,000)2 Total capital commitments	31 December 2020 30 June 2020 $’000 $’000 1,773 2,693 15,692 17,555 7,799 –
	25,264 20,248

Notes:

1 Under the Aurora Subscription Deed and Shareholder’s Deed referred in Note 10, Aurora agreed to make an Additional Contribution to NCI in the amount of USD13,500,000; reduced by the amount of Guarantee paid of USD1,405,000 (30 June 2020: USD1,405,000).
2 On 29 December 2020, the Group entered into an agreement to purchase minority interest In Astarte. Completion of the investment is subject to regulatory approval in the United Kingdom which is expected to be subsequently received. If the acquisition is approved, the Group is committed to invest up to GBP4,400,000 to buy-out non-management shareholders and to provide operating capital to Astarte. In exchange for the Group’s investment, the Group will be entitled to 40% of Astarte’s net income.

Earn-out payments for the future funds of Aether

This represents the potential commitment by the Group to the two founders of Aether, for marketing and offering interests for the set-up and successful launching of future Aether funds (ARA Fund VI and interim funds related to ARA Fund V and ARA Fund VI).

b. Contingent liabilities

The Group has outstanding contingent liabilities as follows:

- Guarantee to NCI (USD5,000,000)1 Total contingent liabilities	6,487 7,257
	6,487 7,257

Notes:

1 The Group agreed to provide a guarantee (“Guarantee”) to NCI of up to USD5,000,000 a year for each of the six years following the date of commission of the first solar project sponsored by NCI. This Guarantee is to cover any shortfall payments, which are basically the amounts that are drawn upon by NCI if and when certain prescribed thresholds in respect to annual revenues of NCI are not met.

The Shareholder’s Deed requires that an escrow account (“Escrow Account”) be funded to be used to satisfy the Guarantee. These shortfall payments are drawn from the Escrow Account. The Group shall contribute additional amounts to the Escrow Account equal to any amounts drawn down by Nereus so that the balance of the of the Escrow Account will be kept at USD5,000,000. To date, the Group does not maintain the Escrow Account. Nevertheless, the Group had been honouring any shortfall payments by funding USD1,405,000 (30 June 2020: USD1,405,000).

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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c. Contingent assets

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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E. GROUP STRUCTURE

This section provides information regarding the group structure of the Group, including further details on interests in subsidiaries, intangible assets and investment in associates and joint venture.

17. Interests in subsidiaries

The following are the Company's subsidiaries:

	Country of	Ownership interest	Ownership interest
Name of subsidiaries	incorporation	held by the Company
		31	30
		December	June
		2020	2020
		%	%
Aurora Investment Management Pty Ltd	Australia	100	100
The Aurora Trust	Australia	100	100
Treasury Group Investment Services Pty Ltd	Australia	100	100
Treasury ROC Pty Ltd1	Australia	100	100
Northern Lights MidCo, LLC (“Midco”)	USA	100	100
Northern Lights Capital Group, LLC	USA	100	100
Carlisle Acquisition Vehicle, LLC (“CAV”)2	USA	100	100
NLCG Distributors, LLC	USA	100	100
Northern Lights Capital Partners (UK) Ltd (“NLCPUK”)	UK	100	100
Strategic Capital Investors, LLP	UK	60	60
Northern Lights MidCo II, LLC	USA	100	100
Aether Investment Partners, LLC	USA	100	100
Seizert Capital Partners, LLC3	USA	-	25

Notes:

1 This subsidiary is an intermediate holding company and non-operating.

2 CAV is a limited liability company that holds the Group’s investment in Carlisle. Midco owns 1% and NLCPUK owns 99% of CAV.

3 Prior to the disposal of the Group’s interest in Seizert during the period (Refer to Note 17a below for details), the Group had control over Seizert based on its 54.55% voting rights, majority Board representation and preference in the distribution waterfall. Therefore, Seizert was consolidated as part of the Group.

a. Disposal of a subsidiary

On 30 November 2020, the Group completed the sale of all its economic interest in Seizert to the current Seizert management team. The assets and liabilities of Seizert including the other identifiable intangibles held in Seizert were derecognised as at 30 November 2020 and the proceeds amounting to $6,800,000 (USD5,000,000) before tax was received. The results of operations of Seizert from 1 July 2020 to 30 November 2020 were included in the consolidated financial statements. The sale of the Group’s investment in Seizert resulted to a loss of $2,250,000.

Details of the sale are as follows:

Consideration received or receivable Carrying amount of the investment sold Loss on sale before income tax	$’000 6,800 (9,050)
	(2,250)

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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The carrying amounts of assets and liabilities as at the date of the completion of the sale were:

Cash and cash equivalents Trade and other receivables Other current assets Plant and equipment Right-of-use assets Other assets Total assets Trade and other payables Provisions Lease liabilities Total liabilities Net assets Add: Intangible assets - brands and trademarks Total carrying value	30 November 2020 $’000 4,529 2,304 674 57 884 3
	8,451
	831 13 933
	1,777
	6,674 2,376
	9,050

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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18. Intangible assets

a. Analysis of balances

Goodwill, net of impairment Other identifiable intangible assets, at carrying amount - Brand and trademark - Management rights Total intangible assets Movement of intangible assets *31 December 2020* Opening balance Impairment Amortisation Disposal Effect of foreign currency differences Closing balance *30 June 2020* Opening balance Impairment Amortisation Effect of foreign currency differences Closing balance Cash generating units Goodwill and other identifiable intangible assets: *31 December 2020* - Aether - Seizert1 Closing balance *30 June 2020* - Aether - Seizert Closing balance	Goodwill Brand and trademark $’000 $’000 37,295 10,373 – – – – – (2,376) (3,959) (991)	31 December 2020 30 June 2020 $’000 $’000 33,336 37,295
		7,006 10,373 12,188 15,064
		19,194 25,437
		52,530 62,732
		Management rights Total $’000 $’000 15,064 62,732 – – (1,362) (1,362) – (2,376) (1,514) (6,464)
	33,336 7,006	12,188 52,530
	58,133 18,055 (22,585) (8,259) – – 1,747 577	17,906 94,094 – (30,844) (3,279) (3,279) 437 2,761
	37,295 10,373	15,064 62,732
	33,336 7,006 – –	12,188 52,530 – –
	33,336 7,006	12,188 52,530
	37,295 7,838 – 2,535	15,064 60,197 – 2,535
	37,295 10,373	15,064 62,732

Notes:

1 On 30 November 2020, the Group disposed its interest in Seizert. Refer to Note 17a for details.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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b. Key estimates, judgments, and assumptions

Impairment of goodwill and other identifiable intangible assets

At the end of each reporting period, management assesses the level of goodwill and other identifiable intangible assets of each of the underlying cash-generating units of the Group. Should a cash-generating unit underperform or not meet expected growth targets from prior expectations, a resulting impairment of the goodwill and other identifiable intangible assets is recognised if that deterioration in performance is deemed not to be derived from short term factors such as market volatility. Factors that are considered in assessing possible impairment in addition to financial performance include changes to key investment staff, significant investment underperformance and litigation. Impairments of goodwill in relation to subsidiaries cannot be reversed if a business recovers or exceeds previous levels of financial performance.

Aether

The recoverable amount of Aether, a cash-generating unit, is determined based on a value in use calculation which uses cash flow projections. These cash flow projections include expected revenues from existing funds, which are largely certain, as well as anticipated new fund raising every two years. A five-year discrete period was applied as it is believed that it is sufficient time for the business to be in a steady state in terms of launching new funds based on the existing plan for the business. At 31 December 2020, management assessed goodwill and other identifiable intangible assets for impairment triggers and determined that no impairment is to be recognised (31 December 2019: Management assessed goodwill, other identifiable intangibles and other assets for impairment triggers and determined that no impairment was to be recognised).

Impact of COVID-19

Seizert

Seizert was disposed on 30 November 2020.

For the half-year ended 31 December 2019, the recoverable amount of Seizert a cash-generating unit was determined based on a value in use calculation which used cash flow projections. These cash flow projections included expected revenues from existing funds under management, as well as expected FUM movement in future years. A five-year discrete period was applied as it was believed that it was sufficient time for the business to be in a steady state. During the period, the goodwill, other identifiable intangibles and other assets were assessed for triggers of impairment. Management recognised an impairment of the goodwill of $14,078,000 and brand and trademark of $3,635,000. A weighted average discount rate of 18% was applied in the cash flow projections during the discrete period, tax rate of 21% and a terminal growth rate of 3%.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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19. Investment in associates and joint venture

a. Analysis of balances

Investment in associates Opening balance Additional contribution to associates Subsequent reclassification from investment at FVTOCI Conversion of loans receivable to associate Share of net profits of associates Dividends and distributions received/receivable Sale of investment in associates Impairment Transferred to profit or loss Foreign currency movement Closing balance Investment in joint venture Opening balance Acquisition of a joint venture Deferred consideration of an associate of the joint venture (refer to Note 11 footnote 2) Share of net (loss)/profit of a joint venture Dividends and distributions received/receivable Foreign currency movement Closing balance Total	31 December 2020 30 June 2020 $’000 $’000 100,447 110,143 935 8,867 – 3,786 – 480 2,110 1,663 (430) (4,929) – (459) – (21,794) – 180 (9,518) 2,510
	93,544 100,447
	33,159 – – 29,017 – 4,552 (194) 88 (450) (542) (3,479) 44
	29,036 33,159
	122,580 133,606

(i) Details of associates and joint venture

	Principal activity	Ownership	interest	Place of
		31	30	incorporation
		December	June	and operation
		2020	2020
Associates		%	%
Aether General Partners1	Funds Management	25.00	25.00	USA
Blackcrane Capital, LLC2	Funds Management	25.00	25.00	USA
Capital & Asset Management Group, LLP3	Funds Management	35.00	32.50	USA/UK
IFP Group, LLC4	Investment Adviser	24.90	24.90	USA
Northern Lights Alternative Advisors LLP5	Placement Agent	23.00	23.00	UK
Roc Group6	Funds Management	30.00	30.00	Australia
Victory Park Capital Advisors, LLC7	Funds Management	24.90	24.90	USA
Victory Park Capital GP Holdco, L.P.8	Funds Management	24.90	24.90	USA

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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	Principal activity	Ownership	interest	Place of
		31	30	incorporation
		December	June	and operation
		2020	2020
Joint venture		%	%
Copper Funding, LLC9	Investment Entity	50.00	50.00	USA
Associate of the joint venture
Pennybacker Capital Management, LLC10	Funds Management	16.50	16.50	USA

Notes:

1 Aether Real Assets GP I, LLC, Aether Real Assets GP II, LLC, Aether Real Assets GP III, LLC and Aether Real Assets III Surplus GP, LLC (collectively the “Aether General Partners”) are the General Partners of Aether Real Assets I, L.P., Aether Real Assets II, L.P., Aether Real Assets III, L.P. and Aether Real Assets III Surplus, L.P. (collectively the “Funds”). The General Partners are responsible for the operation of the Funds and the conduct and management of its business.
2 Blackcrane is a boutique asset management firm focusing on global and international equities.
3 CAMG is a private infrastructure investment firm based in London, England and Washington DC, USA.
4 IFP is a privately held, family-owned firm. IFP is a multi-custodial registered investment adviser focused on delivering personalised, concierge-level service to advisors in the USA specialising in wealth management and retirement plan consulting.
5 NLAA is a strategic partner and placement agent based in London, England that focused on private equity and hedge funds.
6 Roc Group is a specialised investment firm offering both pooled and customised Asia Pacific private equity solutions. Roc Group includes Roc Partners Pty Ltd and Roc Partners (Cayman) Limited. The Group holds stapled securities in Roc Group.
7 VPC is a focused on private debt strategies-direct lending to financial service companies (Specialty Finance) with some investments in private equity.
8 VPC-Holdco holds direct and indirect interest in VPC funds and their general partner entities.
9 CFL is a limited liability company established as a joint venture of the Group with Kudu Investments Management, LLC (“Kudu”) to hold the investment in Pennybacker.
10 Pennybacker is an alternative investment manager based in Austin, Texas, USA offering private equity investment strategies focused on both commercial, retail, office, and industrial assets, as well as affordable multifamily residential real estate in certain markets in the USA.

(ii) Additional contributions to associates

On 30 September 2020 and 16 December 2020, drawdowns were made to CAMG for $903,000 (GBP500,000) (30 June 2020: $1,881,000 (GBP1,000,000) including $918,000 (GBP500,000) drawdowns as at 31 December 2019). These resulted to the increase in the Group’s equity interest in CAMG to 35% (30 June 2020 32.5%).

In the prior period, the Group acquired an additional 12.41% equity interests in Roc Group for $6,826,000 increasing the Group’s equity interest to 30% which included other identifiable intangible assets and goodwill of $6,742,000.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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(iii) Transactions with IFP

Transactions from 1 July 2020 to 31 December 2020

During the period, IFP made additional drawdowns totaling $125,000 (USD90,000) from the credit facility of $895,000 (USD600,000). This was classified as financial asset at amortised cost.

Subsequently, on 30 December 2020, the Group and IFP terminated the credit facility and convert any outstanding balances to an Additional Operating Capital Contribution $778,000 (USD601,000, consisted of USD558,000 as drawdowns and USD43,000 as related interest). The Group is entitled to a 13% annualised return to be collected upon IFP making an initial distribution. The Additional Operating Capital Contribution was classified as classified as financial asset at FVTPL.

On 31 December 2020, the Group agreed to provide IFP with a short-term loan of $162,000 (USD125,000) plus origination fee of $6,000 (USD5,000). Both the loan and the origination fee were repaid to the Group on 8 January 2021.

Transactions from 1 July 2019 to 30 June 2020

In the prior comparative period, the Group provided a credit facility to IFP. The initial amount of the credit facility is $2,200,000 (USD1,500,000) and the credit facility bears interest of 13% per annum and will have to be fully repaid no later than 31 December 2022. IFP made a drawdown of $1,327,000 (USD889,000) from the credit facility provided by the Group. This was classified as a financial asset at amortised cost. This credit facility was terminated on 30 December 2020, as above.

In addition, the Group made an additional contribution of $854,000 (USD600,000) to IFP increasing the Group ownership to 16%. The accounting treatment of this investment in IFP was changed from financial asset at FVTOCI to an associate following the increase in equity ownership from 10% to 16%. The fair value of the investment that was reclassified from financial asset at FVTOCI to an investment in associate amounted to $3,609,000. As a result, the net fair value gain on financial asset at FVTOCI recognised in other comprehensive income amounting to $789,000 was transferred directly to retained earnings.

On 11 March 2020, the Group also provided $1,194,000 (USD800,000) as operating capital contribution. This contribution did not give a right to an increased equity ownership nor a return equivalent to the existing equity in IFP. The Group is entitled to a 10% annualised return to be collected upon IFP making an initial distribution. This was classified as financial asset at FVTPL.

On 11 March 2020, the $1,327,000 (USD889,000) loan under the credit facility plus interest of $16,000 (USD11,000) was recharacterised into additional capital contributions resulting in a further increased equity from 16% at 31 December 2019 to 24.9%.

The additional contribution and conversion of loan in IFP increased the Group’s equity interest to 24.9% which included other identifiable intangible assets and goodwill of $5,831,000.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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(iv) Restructuring of associates

On 31 December 2020, the Group and NLAA restructured the Group’s investment from a share in profits structure to revenue share effective as at 31 March 2020. The Group is entitled to USD200,000 annually or USD50,000 every quarter and an additional amount equal to 10% of in excess of USD3,000,000 cash revenue for each accounting period ended 31 March. The restructure did not change the Group’s 23% ownership in NLAA and the existing accounting treatment of the investment as an associate since the Group still maintains significant influence over NLAA.

As at 31 December 2020, the Group recognised $484,000 (USD350,000) share in NLAA which consisted of $277,000 (USD200,000) for the financial year ended 31 March 2020 and $207,000 (USD150,000) for the three quarters ended 30 June 2020, 30 September 2020 and 31 December 2020.

(v) Sale of investment in associates

In the prior period, the Group sold its 30.89% equity interest in FIM for $459,000.

(vi) Contributions to a joint venture

In the prior period, the Group contributed $29,017,000 (USD20,010,000) for a 50% equity interest in CFL, alongside an equal co-investor Kudu. The Group and Kudu made combined contributions of $58,057,000 (USD40,000,000) to acquire a 33% equity interest in Pennybacker and the potential earn-out obligation with a maximum value of $21,772,000 (USD15,000,000).

The Group recognised its proportionate share of the earn-out obligation that CFL may have to pay to Pennybacker. The share of the potential earn-out obligation has been added to the acquisition cost of Pennybacker. It will be ultimately paid by CFL to Pennybacker (refer to Note 11 footnote 2 for details).

CFL’s investment in Pennybacker was accounted as investment in an associate. The acquisition of the interest in Pennybacker included other identifiable intangible assets and goodwill of $34,487,000.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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b. Summarised financial information for material associates and joint venture

Comprehensive income Revenue for the period Profit after tax for the period Other comprehensive income for the period Total comprehensive income for the period Dividends/distributions received during the period Financial position Current assets Non-current assets Current liabilities Non-current liabilities Net assets/(liabilities) Reconciliation of the summarised financial position to the carrying amount recognised by the Group: - Net assets/(liabilities) before determination of fair values - Ownership interest in % - Proportion of the Group’s ownership interest - Acquired goodwill and intangibles - Impairment - Undistributed profits - Foreign currency movement Closing balance	31 December 2020 31 December 2019 Pennybacker $’000 VPC $’000 VPC-Holdco $’000 Pennybacker1 $’000 VPC $’000 VPC-Holdco $’000 12,195 20,633 548 1,226 30,6612 9,2133
	1,982 10,038 437 493 8,230 9,126 – – – – – –
	1,982 10,038 437 493 8,230 9,126
	450 – 134 – 91 989
	31 December 2020 30 June 2020 Pennybacker $’000 VPC $’000 VPC-Holdco $’000 Pennybacker $’000 VPC $’000 VPC-Holdco $’000 8,281 32,745 – 3,204 25,329 – – 19,790 21,109 4,199 16,802 14,837 (6,438) (45,185) (583) (5,390) (42,769) (536) – (9,601) – – (11,180) –
	1,843 (2,251) 20,526 2,013 (11,818) 14,301
	1,843 (2,251) 20,526 2,013 (11,818) 14,301 16.50%4 24.90% 24.90% 16.50%4 24.90% 24.90% 304 (560) 5,111 332 (2,943) 3,561 28,573 50,255 16,233 32,595 73,362 23,876 – – – – (14,307) (3,631) 168 3,584 – 238 1,170 – (9) (224) – (7) 361 100 29,036 53,055 21,344 33,158 57,643 23,906

Notes:

1 Pennybacker was acquired on 14 December 2019, therefore the prior half-year profit or loss information only covers the period from acquisition to 31 December 2019.

2 The revenue for the period ended 31 December 2019 of VPC included incentive fees revenue amounted to $8,579,000 recognised in accordance with AASB 15: Revenue.

3 The revenue for the period ended 31 December 2019 of VPC-Holdco included carried interest amounted to $9,074,000 recognised in accordance with AASB 15: Revenue.

4 The effective ownership interest of the Group of 16.5% was used in calculating the proportion of the Group’s ownership at Pennybacker through the joint venture in CFL.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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c. Key estimates, judgments, and assumptions

Impairment of investments in associates and joint venture

At the end of each reporting period, management is required to assess the carrying values of each of the underlying investments in associates and joint venture of the Group. Should an investment underperform or not meet expected growth targets from prior expectations, a resulting impairment of the investments is recognised if that deterioration in performance is deemed not to be derived from short term factors such as market volatility. Factors that are considered in assessing possible impairment in addition to financial performance include changes to key investment staff, significant investment underperformance and litigation. A significant or prolonged decline in the fair value of an associate or joint venture below its cost is also evidence of impairment. During the period, the investments in associates and joint venture were tested for impairment triggers and determined that no impairment is to be recognised (31 December 2019: $115,000 for FIM and $14,007,000 for VPC).

Impact of COVID-19

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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F. OTHER INFORMATION

This section provides other information of the Group, including further details share-based payments, significant events subsequent to reporting date and adoption of new and revised Standards.

20. Share-based payments

Share based payments of Key Management Personnel and other officers of the Group are disclosed in the annual financial report.

a. The Group Long-Term Incentive (“LTI”) Plan

(i) Performance rights of Mr. Greenwood

On 21 August 2020, the Directors of the Company approved the issue of 102,500 ordinary shares for Mr. Greenwood, as a result of the vesting of his performance rights issued on 5 October 2017. This was completed on 16 September 2020.

(ii) Performance rights recognised in the profit or loss

The amount of performance rights amortisation expense for the period was $300,000 (31 December 2019: $476,000).

(iii) Shares bought on market to settle share-based payments

The shares bought on market to settle performance rights vested during the period amounted to $629,000 (31 December 2019: $890,000).

b. Key estimates, judgments, and assumptions

Share-based payment transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using hybrid Monte-Carlo/binomial option pricing model with the assumptions.

The assumptions used in arriving at the valuations are as follows:

		Expected	Risk free rates
	Volatility of the underlying share	dividend yield	per annum
	price	per annum
Under the MD & CEO LTI Plan	30%	3.84%	2.07% and 2.15%
Under the Employee Share
Ownership Plan 2018
employees
- 25 June 2019	30%	4.48%	0.89% and 0.90%
- 1 August 2019	30%	3.60%	0.87% and 0.83%

The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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21. Significant events subsequent to reporting date

Other than the matters detailed above, there has been no matter or circumstance, which has arisen since 31 December 2020 that has significantly affected or may significantly affect in the financial years subsequent to 31 December 2020 either the operations or the state of affairs, of the Group.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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22. Adoption of new and revised Standards

a. New and amended AASB standards that are effective from 1 July 2020

All new and revised accounting standards relevant to the Group that are mandatorily effective for the current year have been adopted by the Group. Adoption of these other new and revised accounting standards did not result in a material financial impact to the consolidated financial statements of the Group.

b. Standards and interpretations in issue not yet adopted

The AASB has issued several new and amended accounting standards and Interpretations that have mandatory application dates for future reporting periods have not been early adopt by the Group.

These standards are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) DIRECTORS’ DECLARATION

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The Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
(b) in the Directors’ opinion, the attached condensed consolidated financial statements and notes thereto are in accordance with the Corporations Act 2001 , including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group.

Signed in accordance with a resolution of the Directors made pursuant to s.305(5) of the Corporations Act 2001 .

On behalf of the Directors

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Antony Robinson Chairman

26 February 2021

Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney, NSW, 2000 Australia

Phone: +61 2 9322 7000 www.deloitte.com.au

Independent Auditor’s Review Report to the members of Pacific Current Group Limited

Conclusion

We have reviewed the half-year financial report of Pacific Current Group Limited (the “Company”) which comprises the consolidated statement of financial position as at 31 December 2020, and the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration as set out on pages 14 to 64.

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 the Company is not in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Basis for Conclusion

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

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

Directors’ Responsibilities for the Half-year Financial Report

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

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

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020 and its performance for the half-year ended on

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte Organisation

that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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DELOITTE TOUCHE TOHMATSU

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Jonathon Corbett Partner Chartered Accountants Sydney, 26 February 2021

PACIFIC CURRENT GROUP LIMITED (ABN 39 006 708 792) CORPORATE DIRECTORY

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Directors

Mr. Antony Robinson, Chairman
Mr. Paul Greenwood, Executive Managing Director
Mr. Peter Kennedy, Non-Executive Director
Ms. Melda Donnelly, Non-Executive Director
Mr. Gilles Guérin, Non-Executive Director
Mr. Jeremiah Chafkin, Non-Executive Director

Executive Management

Mr. Paul Greenwood, Chief Executive Officer and Chief Investment Officer Mr. Ashley Killick, Chief Financial Officer

Company Secretary

Ms. Clare Craven

Registered Office / Principal Place of Business

Level 29, 259 George Street, Sydney, NSW, 2000 Phone +61 2 8243 0400 Facsimile +61 2 8243 0410 www.paccurrent.com

Share Register

Computershare Investor Services Pty Ltd 452 Johnston Street, Abbotsford, VIC, 3067 Phone +61 3 9415 5000

Bankers

Westpac Banking Corporation

Auditor

Deloitte Touche Tohmatsu 225 George Street, Sydney, NSW, 2000 +61 2 9322 7000

Stock Exchange Listing

Pacific Current Group Limited shares are listed on the Australian Securities Exchange, code: PAC.

AI assistant

PACIFIC CURRENT GROUP LIMITED — Interim / Quarterly Report 2021

65526_rns_2021-02-25_1f527ca3-c744-43ae-acf5-132ae5d0ae4a.pdf

APPENDIX 4D AND CONDENSED FINANCIAL REPORT FOR PACIFIC CURRENT GROUP LIMITED

Authorised for lodgement by the Pacific Current Group Limited Board.

CONTACT:

For Investor and Media enquiries:

ABOUT PACIFIC CURRENT GROUP

1. Details of the reporting period and the previous corresponding period

2. Results for announcement to the market

Six‐month period ended 31 December

2.6 Commentary on “Results for Announcement to the Market”

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

5. Details of individual and total dividends or distributions and dividend or distribution payments.

6. Details of any dividend or distribution reinvestment plans

7. Details of associates and joint venture entities

Not applicable

9. Audit / Review of Accounts upon which this report is based and qualification of audit / review

DIRECTORS AND OFFICERS

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

OPERATING AND FINANCIAL REVIEW

REVIEW OF OPERATIONS

Investment activities during the period

Restructuring of investments

Additional contributions to existing asset managers

Disposal of investments

Acquisition of a new investment subject to regulatory approval

Financing activities during the period

Funds under management (“FUM”)

FINANCIAL REVIEW

Operating results for the year

Cash flows

Operating activities

Investing activities

Financing activities

Earnings/(loss) per share

Dividends

Financial position

OTHER MATTERS

AUDITOR INDEPENDENCE

ROUNDING OF AMOUNTS

LIKELY DEVELOPMENTS

SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE

Auditor’s Independence Declaration to Pacific Current Group Limited

DELOITTE TOUCHE TOHMATSU

Index to the Notes to the Condensed Financial Statements

A. BASIS OF PREPARATION

a. Historical cost convention

b. Foreign currency translations and balances

Transactions and balances

Translation of foreign operations

c. Going concern

d. Comparatives

e. Critical accounting estimates, judgments, and assumptions

f. Coronavirus disease (“COVID-19”) impact

Considerations applied:

g. Rounding of amounts

B. GROUP RESULTS FOR THE PERIOD

1. Revenue

a. Analysis of balance

b. Key estimates, judgments, and assumptions

Revenue recognition of performance fees

Analysis of balances

3. Expenses

Analysis of balances

b. Key estimates, judgments, and assumptions

(i) Income tax

(ii) Tax basis for USA investments

(iii) Recovery of deferred tax assets

(iv) Tax losses not recognised

c. Uncertainty over income tax treatments

5. Segment information

a. Reportable segments

b. Analysis of balances

(i) Segment revenues and results

NOTES TO THE CONDENSED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

(ii) Segment assets and liabilities

6. Earnings/(loss) per share

7. Notes to consolidated statement of cash flows

Analysis of balances

PACIFIC CURRENT GROUP LIMITED Interim / Quarterly Report 2021