SCIDEV LTD — Interim / Quarterly Report 2022

Feb 20, 2022

SciDev Limited Appendix 4D Half-year report

1. Company details

Name of entity:	SciDev Limited
ABN:	25 001 150 849
Reporting period:	For the half-year ended 31 December 2021
Previous period:	For the half-year ended 31 December 2020

2. Results for announcement to the market

			$'000
Revenues from ordinary activities	up	32% to	24,138
Loss from ordinary activities after tax attributable to the owners of SciDevLimited	down	638% to	(2,298)
Loss for the half-year attributable to the owners of SciDev Limited	down	638% to	(2,298)

Dividends

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

Comments

The loss for the consolidated entity after providing for income tax amounted to $2.298 million (31 December 2020: profit of $0.427 million).

Reference is made to the Review of Operations in the Directors' Report contained in the attached Interim Financial Report for SciDev Limited for the half-year ended 31 December 2021.

3. Net tangible assets

	ReportingperiodCents	PreviousperiodCents
Net tangible assets per ordinary security	12.46	4.76

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

6. Dividends

Current period

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

Previous period

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

7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

Not applicable.

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report.

11. Attachments

Details of attachments (if any):

The Interim Report of SciDev Limited for the half-year ended 31 December 2021 is attached.

12. Signed

Signed ___________________________ Date: 21 February 2022

Lewis Utting Managing Director Sydney

SciDev Limited

ABN 25 001 150 849

Interim Report - 31 December 2021

SciDev Limited Corporate directory 31 December 2021

Directors	Vaughan Busby - Non-executive ChairmanLewis E Utting - Managing Director & Chief Executive OfficerSimone Watt - Non-executive DirectorJon Gourlay - Non-executive DirectorDan O'Toole - Non-executive Director
Company secretary	Heath L Roberts
Registered office	C/-Boardroom Pty LimitedLevel 12, Grosvenor Place225 George Street, SydneyNSW 2000Phone: 1300 737 760
Principal place of business	Unit 18 Turbo RoadKings ParkNSW 2148Phone: (02) 9622 5185
Share register	Boardroom Pty LimitedLevel 12225 George Street, SydneyNSW 2000Phone: 1300 737 760
Auditor	Ernst & Young200 George StreetSydneyNSW 2000
Stock exchange listing	SciDev Limited shares are listed on the Australian Securities Exchange (ASX code:SDV)
Website	www.scidev.com.au
Corporate governance statement	www.scidev.com.au/about/corporate-governance

SciDev Limited Directors' report 31 December 2021

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of SciDev Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2021.

Directors

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

Vaughan Busby (appointed a Director and Non-executive Chairman on 9 August 2021) Lewis E Utting Simone Watt Jon Gourlay Dan O'Toole (appointed a Director on 3 February 2021 and Acting Chairman from 30 June 2021 to 9 August 2021)

Principal activities

The principal activity of the consolidated entity is delivery of process control, professional services, equipment design and construction (including build, own operate services) and chemistry in the Mining and Mineral Processing, Infrastructure and Construction, Water Treatment and Oil & Gas markets.

Dividends

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

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $2,298,000 (31 December 2020: profit of $427,000).

H1 FY22 revenue at $24.1M was up $5.8M or 32% year on year on H1 FY21 sales of $18.3M. Strong sales performance occurred in the USA Oil & Gas market year on year which offset lower activity in the Australian construction sector while Water Services revenue had a solid performance.

Pre tax loss in H1 of $2.3M was down $2.88M pcp as higher profits from Oil & Gas and Water year on year were offset by lower outcomes at Mining & Construction and higher Corporate costs.

Cash flow from operations in the first half was negative $1.33M vs $4.23M in H1 FY21. H1 FY22 operational cash flows were impacted by a planned inventory build to take advantage of market prices in the second quarter and insulate the business against any supply chain risks in Q3.

The company undertook a equity issue for a $18M capital raise in the first half and closing at Bank 31/12/21 was $16.4M.

Significant changes in the state of affairs

On 15 September 2021, SciDev Limited issued 513,000 new ordinary shares at $0.60 to the vendors of ProSol Australia Pty Ltd (refer note 15). The shares issued represented the fair value of the contingent consideration to be settled by the issue of SciDev Limited shares.

On 9 November 2021, SciDev Limited announced the placement of 27,692,308 new ordinary shares with institutional investors at an issue price of $0.65 per share (refer note 15).

On 29 November 2021, SciDev Limited issued 527,671 new ordinary shares at $0.65 per share pursuant to a Share Purchase Plan (SPP) (refer note 15).

During the half-year, the consolidated entity paid contingent consideration of $2,922,039 (refer note 14) and deferred consideration of $879,685 to the vendors of Haldon Industries. The consolidated entity also paid contingent consideration of $313,000 to the vendor of ProSol Australia Pty Ltd (refer note 14).

There were no other significant changes in the state of affairs of the consolidated entity during the financial half-year.

Matters subsequent to the end of the financial half-year

No matter or circumstance has arisen since 31 December 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

SciDev Limited Directors' report 31 December 2021

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

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

On behalf of the directors

___________________________

Lewis Utting Managing Director

21 February 2022 Sydney

Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

Auditor's Independence Declaration to the Directors of SciDev Limited

As lead auditor for the review of SciDev Limited for the half year ended 31 December 2021, I declare to the best of my knowledge and belief, there have been:

• a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review;
• b. No contraventions of any applicable code of professional conduct in relation to the review; and
• c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the review.

This declaration is in respect of SciDev Limited and the entities it controlled during the financial period.

Ernst & Young

Siobhan Hughes Partner 21 February 2022

SciDev Limited Contents 31 December 2021

Consolidated statement of profit or loss and other comprehensive income	6
Consolidated statement of financial position	7
Consolidated statement of changes in equity	8
Consolidated statement of cash flows	9
Notes to the consolidated financial statements	10
Directors' declaration	21
Independent auditor's review report to the members of SciDev Limited	22

General information

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

SciDev Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are:

C/- Boardroom Pty Limited Unit 1 Level 12 8 Turbo Road 225 George Street Kings Park Sydney NSW 2148 NSW 2000

Registered office Principal place of business

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 21 February 2022.

SciDev Limited Consolidated statement of profit or loss and other comprehensive income For the half-year ended 31 December 2021

	Note	31 Dec 2021$'000	31 Dec 2020$'000
Revenue	3	24,138	18,333
Other income	4	673	545
ExpensesChanges in inventories, and raw materials and consumables usedContractors and consultantsDepreciation and amortisation expenseEmployee benefits expenseInsuranceProfessional feesTravel, accommodation and conferenceOther expensesFinance costs		(17,651)(1,056)(1,537)(4,613)(163)(266)(192)(1,293)(338)	(13,364)(611)(269)(2,466)(114)(210)(129)(1,046)(89)
Profit/(loss) before income tax expense		(2,298)	580
Income tax expense		-	(153)
Profit/(loss) after income tax expense for the half-year attributable to theowners of SciDev Limited		(2,298)	427
Other comprehensive income
Items that will not be reclassified subsequently to profit or lossLoss on the revaluation of equity instruments at fair value through othercomprehensive income		(515)	-
Items that may be reclassified subsequently to profit or lossForeign currency translation		219	5
Other comprehensive income for the half-year, net of tax		(296)	5
Total comprehensive income for the half-year attributable to the owners ofSciDev Limited		(2,594)	432
		Cents	Cents
Basic earnings/(losses) per shareDiluted earnings/(losses) per share	2121	(1.37)(1.37)	0.280.28

SciDev Limited Consolidated statement of financial position As at 31 December 2021

	Note	31 Dec 2021$'000	30 June 2021$'000
Assets
Current assets
Cash and cash equivalents	5	16,409	7,010
Trade and other receivables	6	9,793	7,686
Contract assets		-	442
Inventories	7	5,336	3,793
Other		526	337
Total current assets		32,064	19,268
Non-current assets
Financial assets at fair value through other comprehensive income	8	2,206	2,721
Property, plant and equipment	9	6,539	6,384
IntangiblesDeferred tax	10	24,4083,604	24,1293,604
Other		93	45
Total non-current assets		36,850	36,883
Total assets		68,914	56,151
Liabilities
Current liabilities
Trade and other payables	11	11,842	9,529
Contract liabilities		-	263
Lease liabilities	13	2,488	2,465
Employee benefits		452	400
Provisions	14	2,690	3,539
Total current liabilities		17,472	16,196
Non-current liabilities
Borrowings	12	-	280
Lease liabilities	13	1,549	2,385
Provisions	14	3,231	5,675
Total non-current liabilities		4,780	8,340
Total liabilities		22,252	24,536
Net assets		46,662	31,615
Equity
Issued capitalOther equity	1516	118,919-	100,997308
Reserves	17	(244)	25
Accumulated losses		(72,013)	(69,715)
Total equity		46,662	31,615

SciDev Limited Consolidated statement of changes in equity For the half-year ended 31 December 2021

	Issuedcapital$'000	Otherequity$'000	Reserves$'000	Accumulatedlosses$'000	Total equity$'000
Balance at 1 July 2020	89,875	570	133	(73,168)	17,410
Profit after income tax expense for the halfyear	-	-	-	427	427
Other comprehensive income for the half-year,net of tax	-	-	5	-	5
Total comprehensive income for the half-year	-	-	5	427	432
Transactions with owners in their capacity asowners:
Contributions of equity, net of transaction costsShare-based payments	7,180-	(262)-	-2	--	6,9182
Balance at 31 December 2020	97,055	308	140	(72,741)	24,762
	Issuedcapital$'000	Otherequity$'000	Reserves$'000	Accumulatedlosses$'000	Total equity$'000
Balance at 1 July 2021	100,997	308	25	(69,715)	31,615
Loss after income tax expense for the half-yearOther comprehensive income for the half-year,net of tax	--	--	-(296)	(2,298)-	(2,298)(296)
Total comprehensive income for the half-year	-	-	(296)	(2,298)	(2,594)
Transactions with owners in their capacity asowners:
Contributions of equity (note 15)Transaction costs (note 15)Options exercised (note 15)Contingent consideration (note 16)Share-based payments	18,524(955)45308-	---(308)-	----27	-----	18,524(955)45-27
Balance at 31 December 2021	118,919	-	(244)	(72,013)	46,662

SciDev Limited Consolidated statement of cash flows For the half-year ended 31 December 2021

	Note	31 Dec 2021$'000	31 Dec 2020$'000
Cash flows from operating activitiesReceipts from customers (inclusive of GST)		22,244	15,865
Payments to suppliers and employees (inclusive of GST)		(24,613)	(20,521)
Government grants and subsidies		(2,369)119	(4,656)106
Interest receivedR&D tax incentive received		-1,043	1380
Interest and other finance costs paidIncome taxes refunded		(130)-	(90)30
Net cash used in operating activities		(1,337)	(4,229)
Cash flows from investing activitiesPayments for deferred consideration		(880)	-
Payments for contingent consideration		(3,235)	(267)
Payments for property, plant and equipment		(1,290)	(270)
Payments for intangibles		(59)	(119)
Payments for security deposits		(48)	-
Proceeds from disposal of property, plant and equipmentProceeds from release of security deposits		--	5323
Net cash used in investing activities		(5,512)	(580)
Cash flows from financing activities
Proceeds from issue of shares		18,387	7,000
Proceeds from borrowings		-	817
Repayment of borrowings and lease liabilities		(1,193)	(290)
Proceeds from exercise of share options		-	110
Share issue transaction costs		(954)	(192)
Net cash from financing activities		16,240	7,445
Net increase in cash and cash equivalents		9,391	2,636
Cash and cash equivalents at the beginning of the financial half-year		7,010	4,482
Effects of exchange rate changes on cash and cash equivalents		8	(10)
Cash and cash equivalents at the end of the financial half-year	5	16,409	7,108

Note 1. Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 31 December 2021 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

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

Note 2. Operating segments

Identification of reportable operating segments

The consolidated entity operates in primarily two geographical segments: Australia and the United States. The primary business segment is the treatment of industrial waste.

Operating and business segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Board of Directors.

Intersegment transactions

Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation.

Operating segment information for the six months ended:

31 Dec 2021	Australia$'000	United States$'000	Eliminationsandadjustments$'000	Total$'000
Revenue
Sales to external customers	12,117	12,021	-	24,138
Intersegment sales	13	10	(23)	-
Total revenue	12,130	12,031	(23)	24,138
EBITDA	(975)	461	91	(423)
Depreciation and amortisation				(1,537)
Finance costs				(338)
Loss before income tax expense				(2,298)
Income tax expense				-
Loss after income tax expense				(2,298)

Note 2. Operating segments (continued)

			Eliminationsand
31 Dec 2020	Australia$'000	United States$'000	adjustments$'000	Total$'000
RevenueSales to external customersIntersegment sales	11,350-	6,98373	-(73)	18,333-
Total revenue	11,350	7,056	(73)	18,333
EBITDADepreciation and amortisationFinance costs	1,368	(430)	-	938(269)(89)
Profit before income tax expenseIncome tax expenseProfit after income tax expense				580(153)427
Note 3. Revenue
			31 Dec 2021$'000	31 Dec 2020$'000
Treatment fees and product sales			24,138	18,333
Disaggregation of revenueThe disaggregation of revenue from contracts with customers is as follows:
			31 Dec 2021$'000	31 Dec 2020$'000
Geographical regionsAustraliaNorth AmericaAsiaOther			11,20210,1042,602230	9,0457,9071,381-
			24,138	18,333
Note 4. Other income
			31 Dec 2021$'000	31 Dec 2020$'000
Net gain on disposal of property, plant and equipmentSubsidies and grantsSundry			-404269	1551317
Other income			673	545

Note 5. Cash and cash equivalents

	31 Dec 2021$'000	30 June 2021$'000
Current assets
Cash at bank	16,359	6,960
Cash on deposit	50	50
	16,409	7,010
Note 6. Trade and other receivables
	31 Dec 2021$'000	30 June 2021$'000
Current assets
Trade receivablesOther receivables	9,675118	6,5221,164
	9,793	7,686
Note 7. Inventories
	31 Dec 2021$'000	30 June 2021$'000
Current assets
Stock in transit - at costStock on hand - at cost	5414,795	2273,566
	5,336	3,793
Note 8. Financial assets at fair value through other comprehensive income
	31 Dec 2021$'000	30 June 2021$'000
Non-current assets
Unlisted equity securitiesListed equity securities	1672,039	2,721-
	2,206	2,721
ReconciliationReconciliation of the fair values at the beginning and end of the current and previousfinancial half-year are set out below:
Opening fair value	2,721	1,503
Revaluation incrementsRevaluation decrements	164(679)	1,218-
Closing fair value	2,206	2,721

Investment in listed equity securities

Included in the total value of unlisted securities at 30 June 2021 is an investment of $2,717,987 in Tartana Resources Ltd (Tartana).

Note 8. Financial assets at fair value through other comprehensive income (continued)

On 4 February 2021, R3D Resources Limited (ASX:R3D) announced an off-market all scrip takeover bid for 100% of the fully paid ordinary shares and 100% of the options in Tartana. The offer closed on 31 July 2021 and at that date R3D had a relevant interest in 99.89% of Tartana shares. SciDev received 13,589,935 R3D shares and 2,727,987 attaching options for the shares it held in Tartana. As a consequence of the takeover, the investment was reclassified from unlisted to listed. The options were valued at $164,000 and are disclosed as unlisted equity securities.

Refer to note 18 for further information on fair value measurement.

Note 9. Property, plant and equipment

568
(297)
271
7,077
(1,534)
5,543
668
(117)
551
39
(20)
19
6,384

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

	Officebuildings andwarehouses$'000	Plant andequipment$'000	Motorvehicles$'000	Officeequipment$'000	Total$'000
Balance at 1 July 2021	271	5,543	551	19	6,384
Additions	-	1,150	77	-	1,227
Additions to right-of-use assets	-	383	50	-	433
Transfer	11	-	(11)	-	-
Exchange differences	7	10	3	-	20
Write off of assets	-	-	-	(7)	(7)
Depreciation expense	(83)	(1,347)	(83)	(5)	(1,518)
Balance at 31 December 2021	206	5,739	587	7	6,539

Note 9. Property, plant and equipment (continued)

Included in the above line items are right-of-use assets over the following:

	Officebuildings andwarehouses$'000	Plant andequipment$'000	Motorvehicles$'000	Total$'000
Balance at 1 July 2021	271	4,360	161	4,792
Additions	-	383	50	433
Transfer	11	-	(11)	-
Exchange differences	7	-	3	10
Depreciation expense	(83)	(1,108)	(27)	(1,218)
Balance at 31 December 2021	206	3,635	176	4,017

Note 10. Intangibles

	31 Dec 2021$'000	30 June 2021$'000
Non-current assets
Goodwill - at cost	23,841	23,606
Trade marks and intellectual property - at cost	862	798
Less: Accumulated amortisation	(295)	(275)
	567	523
	24,408	24,129

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

	Goodwill$'000	Trade marksandintellectualproperty$'000	Total$'000
Balance at 1 July 2021	23,606	523	24,129
AdditionsExchange differences	-235	594	59239
Amortisation expense	-	(19)	(19)
Balance at 31 December 2021	23,841	567	24,408
Note 11. Trade and other payables

31 Dec 2021 30 June 2021 $'000 $'000 Current liabilities Trade payables 10,589 7,618 Other payables 1,253 1,911 11,842 9,529

Note 12. Borrowings

31 Dec 2021 30 June 2021 $'000 $'000

5,921 9,214

Non-current liabilities Loan - Paycheck Protection Program (USA) - 280

On 26 August 2021, the company received confirmation that the loan owing by its subsidiary Highland Fluid Technology Inc, in terms of the Paycheck Protection Program (USA), had been forgiven. The balance outstanding on the loan at 30 June 2021 was US$209,809 (A$279,883).

Note 13. Lease liabilities

	31 Dec 2021$'000	30 June 2021$'000
Current liabilities
Lease liability - land and buildings	139	277
Lease liability - motor vehicles	63	73
Lease liability - equipment	2,286	2,115
	2,488	2,465
Non-current liabilities
Lease liability - land and buildings	78	17
Lease liability - motor vehicles	135	123
Lease liability - equipment	1,336	2,245
	1,549	2,385
	4,037	4,850
Note 14. Provisions
	31 Dec 2021$'000	30 June 2021$'000
Current liabilities
Contingent consideration	2,690	3,539

Non-current liabilities Contingent consideration 3,231 5,675

The contingent consideration relates to the acquisition of Haldon Industries and ProSol Pty Ltd and represents the cash component of the contingent consideration. It is measured at the present value of the estimated liability.

Movements in contingent consideration

Movements in the contingent consideration during the current financial half-year are set out below:

Note 14. Provisions (continued)

	Contingentconsideration- Haldon$'000	Contingentconsideration- ProSol$'000	Total$'000
Carrying amount at the start of the half-year	8,901	313	9,214
Payments	(2,922)	(313)	(3,235)
Unused amounts reversed	(266)	-	(266)
Unwinding of discount	208	-	208
Carrying amount at the end of the half-year	5,921	-	5,921

Note 15. Issued capital

	31 Dec 2021Shares	30 June 2021Shares	31 Dec 2021$'000	30 June 2021$'000
Ordinary shares - fully paid	187,806,678	158,370,242	118,919	100,997
Movements in ordinary share capital

Details	Date	Shares	Issue price	$'000
Balance	1 July 2021	158,370,242		100,997
Options exercised	5 July 2021	125,000	$0.12	15
Options exercised	19 July 2021	25,000	$0.12	3
Options exercised	18 August 2021	100,000	$0.12	12
Shares issued to the vendor of ProSol Australia Pty
Ltd (a)	15 September 2021	513,000	$0.60	308
Options exercised	25 October 2021	125,000	$0.12	15
Share placement (b)	9 November 2021	27,692,308	$0.65	18,000
Share purchase plan (b)	29 November 2021	527,671	$0.65	343
Shares issued to settle outstanding employee
incentive entitlements (c)	23 December 2021	328,457	$0.55	181
Share issue costs net of deferred tax				(955)
Balance	31 December 2021	187,806,678		118,919

(a) Shares issued to the vendor of ProSol Australia Pty Ltd

On 15 September 2021, SciDev Limited issued 513,000 new ordinary shares at $0.60 to the vendors of ProSol Australia Pty Ltd. The shares issued represented the fair value of the contingent consideration to be settled by the issue of SciDev Limited shares (refer note 16).

(b) Share placement and share purchase plan

On 9 November 2021, SciDev Limited announced the placement of 27,692,308 new ordinary shares with institutional investors at an issue price of $0.65 per share.

On 29 November 2021, SciDev Limited issued 527,671 new ordinary shares at $0.65 per share pursuant to a Share Purchase Plan (SPP).

(c) Shares issued to settle outstanding employee incentive entitlements

On 23 December 2021, SciDev Limited issued 328,457 fully paid ordinary shares to the Managing Director (Lewis Utting). The shares were issued in settlement of the balance of his Short Term Incentive payment for the 30 June 2021 financial year and the payment of his Long Term Incentive for the 30 June 2021 financial year. The issue of the shares was approved by the company's shareholders at the annual general meeting held on 25 November 2021.

Note 16. Other equity

	31 Dec 2021$'000	30 June 2021$'000
Contingent consideration	-	308

The contingent consideration was related to the acquisition of ProSol Pty Ltd and represented the fair value of the consideration that was settled by the issue of SciDev Ltd shares.

	31 Dec 2021$'000	30 June 2021$'000
Opening balanceIssue of shares (note 15)	308(308)	570(262)
Closing balance	-	308
Note 17. Reserves

	31 Dec 2021$'000	30 June 2021$'000
Revaluation reserve	295	810
Foreign currency reserve	(898)	(1,117)
Share-based payments reserve	359	332
	(244)	25

Movements in reserves

Movements in each class of reserve during the current financial half-year are set out below:

	Revaluationreserve$'000	Foreigncurrencyreserve$'000	Share-basedpaymentsreserve$'000	Total$'000
Balance at 1 July 2021	810	(1,117)	332	25
Revaluation - gross (note 8)	(515)	-	-	(515)
Foreign currency translation	-	219	-	219
Share-based payments	-	-	27	27
Balance at 31 December 2021	295	(898)	359	(244)

Note 18. Fair value measurement

Fair value hierarchy

The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

31 Dec 2021	Level 1$'000	Level 2$'000	Level 3$'000	Total$'000
Assets
Equity securities - listedEquity securities - unlisted	2,039-	-167	--	2,039167
Total assets	2,039	167	-	2,206
Liabilities
Contingent consideration	-	-	(5,921)	(5,921)
Total liabilities	-	-	(5,921)	(5,921)
	Level 1	Level 2	Level 3	Total
30 June 2021	$'000	$'000	$'000	$'000
Assets
Equity securities - listed	-	2,718	-	2,718
Equity securities - unlisted	-	3	-	3
Total assets	-	2,721	-	2,721
Liabilities
Contingent consideration	-	-	(9,214)	(9,214)
Total liabilities	-	-	(9,214)	(9,214)

Transfers between levels 1 and 2

During the half-year, the company's investment in Tartana Resources Limited (Tartana) was acquired by an ASX listed entity, R3D Resources Limited, in a scrip for scrip takeover. SciDev Limited received 13,589,935 R3D shares and 2,727,987 attaching options for the shares it held in Tartana. Consequently, the investment in Tartana was transferred from level 2 to level 1 following the takeover.

Valuation techniques for fair value measurements categorised within level 2 and level 3

Level 2: Equity securities

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: Contingent consideration

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The valuation model for the contingent consideration upon acquisition, considered the present value of expected future payments. The contingent consideration liability is discounted using a risk adjusted discount rate. The significant input to the consideration calculation is the entity's EBITDA. The probability of achieving the maximum payout under the contract has been estimated at 88%. If the target EBITDA is achieved at 100% the payout would increase by $740,081.

Note 18. Fair value measurement (continued)

Level 3 assets and liabilities

Movements in level 3 assets and liabilities during the current financial half-year are set out below:

	Contingentconsideration$'000
Balance at 1 July 2021Gains recognised in profit or lossPaymentsUnwinding of discount recognised through net finance costs	(9,214)2663,235(208)
Balance at 31 December 2021	(5,921)
Total gains for the previous half-year included in profit or loss that relate to level 3 assets held at the end ofthe previous half-year	-
Total gains for the current half-year included in profit or loss that relate to level 3 assets held at the end ofthe current half-year	266

There were no gains or losses relating to level 3 liabilities held at 31 December 2020.

Note 19. Events after the reporting period

No matter or circumstance has arisen since 31 December 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Note 20. Cash flow information

Non-cash investing and financing activities

	31 Dec 2021$'000	31 Dec 2020$'000
Shares issued to acquire ProSol Australia Pty Ltd	308	262
Additions to right-of-use assets	369	381
Paycheck Protection Program (USA) loan converted into a subsidy	280	-
Shares issued to settle outstanding employee incentive entitlements	181	-

Note 21. Earnings/(losses) per share

	31 Dec 2021$'000	31 Dec 2020$'000
Profit/(loss) after income tax attributable to the owners of SciDev Limited	(2,298)	427
	Number	Number
Weighted average number of ordinary shares used in calculating basic earnings per share	167,810,421	152,740,092
Weighted average number of ordinary shares used in calculating diluted earnings per share	167,810,421	152,740,092
	Cents	Cents
Basic earnings/(losses) per shareDiluted earnings/(losses) per share	(1.37)(1.37)	0.280.28

SciDev Limited Directors' declaration 31 December 2021

In the directors' opinion:

• the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2021 and of its performance for the financial half-year ended on that date; and
• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the directors

___________________________

Lewis Utting Managing Director

21 February 2022 Sydney

Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

Independent Auditor's Review Report to the Members of SciDev Limited

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of SciDev Limited (the Company) and its subsidiaries (collectively the Group), which comprises the statement of financial position as at 31 December 2021, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.

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 Group does not comply with the Corporations Act 2001, including:

• a) Giving a true and fair view of the consolidated financial position of the Group as at 31 December 2021 and of its consolidated financial 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 (ASRE 2410). 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 Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Directors' Responsibility 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 Responsibility

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 Group's financial position as at 31 December 2021 and its performance for the half year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

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.

Ernst & Young

Siobhan Hughes Partner Sydney 21 February 2022