SHINE JUSTICE LTD — Interim / Quarterly Report 2017

Feb 27, 2017

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SHINE CORPORATE LTD AND CONTROLLED ENTITIES

ABN: 93 162 817 905

Financial report for the half-year ended 31 December 2016

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SHINE CORPORATE LTD AND CONTROLLED ENTITIES

ABN: 93 162 817 905 Financial Report for the half-year ended 31 December 2016

CONTENTS	Page
Directors' Report	1
Auditor's Independence Declaration	3
Interim Consolidated Statement of Comprehensive Income	4
Interim Consolidated Statement of Financial Position	5
Interim Consolidated Statement of Changes in Equity	6
Interim Consolidated Statement of Cash Flows	7
Notes to the Financial Statements	8
Directors' Declaration	21
Independent Auditor's Review Report	22
Additional Information for Listed Public Companies	24

SHINE CORPORATE LTD DIRECTORS' REPORT

Your Directors present their report, together with the consolidated interim financial report of the Group, being Shine Corporate Ltd ("the Company") and its controlled entities (collectively known as "the Group") for the half year ended 31 December 2016.

DIRECTORS

The names of the Company's Directors in office during the half year end and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.

Tony Bellas (Non-Executive Director) Carolyn Barker AM (Non-Executive Director) Gregory Moynihan (Non-Executive Director)

Simon Morrison (Executive Director to 29 December 2016, appointed Managing Director 30 December 2016) Courtney Petersen (Executive Director to 23 August 2016, appointed Managing Director 24 August 2016, resigned 29 December 2016)

REVIEW AND RESULTS OF OPERATIONS

Revenue

Consolidated revenue and other income for the half year was $73,955,000 (31 December 2015: $64,038,000), representing an increase of 15.5%. However, the 31 December 2015 result included a combination of above average write-offs in the period and the recognition of additional provisions against work in progress (“WIP”) of $14,432,000. On a like-for-like basis, revenue has declined from $78,470,000 to $73,955,000. The net decline in revenue is due to the lower than anticipated results in parts of the business including the Energy and Resources practice as outlined in the ASX market update dated 19 December 2016. See note 6 to the financial statements for full details.

Expenses

Total expenses increased by $6,296,000 (9.8%) from $64,464,000 to $70,760,000. Included in the increase is impairment of goodwill of $5,000,000 within the Energy and Resources practice as described in the ASX market update dated 19 December 2016.

Employee benefits expense increased by $3,210,000 (8.6%), from $37,446,000 to $40,656,000, reflecting the inclusion of acquired subsidiaries for the full period compared to the previous period, increased management and supervision in Shine Lawyers in the current period compared to the prior comparative period and redundancy costs incurred as a result of rebalancing resources to better match capacity with available work.

Results - Net Profit after Income Tax

The consolidated net profit after income tax from continuing operations for the half year was $3,917,000 (31 December 2015: $1,331,000).

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Results - Earnings Before Interest, Tax, Depreciation, Amortisation and Impairment (EBITDAI)

The reconciliation of Net Profit after Income Tax to EBITDAI is as follows:

EBITDAI normalised Subtract: Interest revenue Depreciation and amortisation Net profit after income tax Add back: Financing costs EBITDAI ** Add back: Goodwill impairment Additional WIP and disbursements provisions Income Tax benefit	$000s 3,917 1,324 768 5,000 7,092 (722) (95) (817) 10,192 - - 10,192 31-Dec-16	$000s 1,331 1,496 1,136 - 2,632 (1,757) (122) (1,879) 31-Dec-15	$000s 1,331 1,496 1,136 - 2,632 (1,757) (122) (1,879) 31-Dec-15
	-	16,559	2,084
			16,559
			18,643

* Statutory EBITDAI is a non-IFRS measure that is not a calculation which appears in the Financial Statements and, accordingly, has not been audited.

Dividends

The Board of Directors declared an interim unfranked ordinary dividend of 0.6 cents per share on 27 February 2017 (2015: nil).

AUDITOR'S INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act in relation to the review of the half year report is provided with this report.

Signed in accordance with a resolution of the Directors.

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Simon Morrison

Managing Director

Dated: 28 February 2017

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Ernst & Young Tel: +61 7 3011 3333 111 Eagle Street Fax: +61 7 3011 3100 Brisbane QLD 4000 Australia ey.com/au

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GPO Box 7878 Brisbane QLD 4001

Auditor’s Independence Declaration to the Directors of Shine Corporate Ltd

As lead auditor for the review of Shine Corporate Ltd for the half-year ended 31 December 2016, 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 ; and

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

This declaration is in respect of Shine Corporate Ltd and the entities it controlled during the financial period.

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Ernst & Young

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Ric Roach Partner 28 February 2017

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SHINE CORPORATE LTD INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended Note Continuing operations Revenue 6 Less Expenses: Employee benefits expense Depreciation and amortisation expense Finance costs Other expenses 7 Impairment of Goodwill 13 Share of net profit/(loss) of associates and joint venture entities 4 Profit/(loss) before income tax from continuing operations Income tax benefit 8 Net profit for the period from continuing operations Other comprehensive income Other comprehensive income to be reclassified to profit or loss in subsequent periods (net of tax): Exchange differences on translation of foreign operations Total comprehensive income for the period Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the Group: Basic earnings per share in cents 10 Diluted earnings per share in cents 10	31 December 2016 31 December 2015 $000s $000s 73,955 64,038 (40,656) (37,446) (768) (1,136) (1,324) (1,496) (24,821) (23,942) (5,000) - 1,809 (444) Consolidated Group
	3,195 (426) 722 1,757
	3,917 1,331
	12 4
	3,929 1,335
	₵ ₵ 2.26 0.77 2.26 0.77

The accompanying notes form part of these financial statements.

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SHINE CORPORATE LIMITED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note ASSETS CURRENT ASSETS Cash and cash equivalents 11 Trade and other receivables Income tax receivable Work in progress 12 Unbilled disbursements 12 Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Work in progress 12 Unbilled disbursements 12 Property, plant and equipment Intangible assets 13 TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Unbilled disbursements creditors Short term borrowings 14 Other current financial liabilities Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long term borrowings 14 Other non-current financial liabilities Deferred tax liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 15 Retained earnings Reserves TOTAL EQUITY	31 December 2016 30 June 2016 $000s $000s 11,919 12,120 12,778 17,117 221 366 104,745 101,287 30,232 28,713 869 645 Consolidated Group
	160,764 160,248
	354 3,767 107,794 101,700 26,690 24,219 5,552 5,396 46,385 45,720
	186,775 180,802
	347,539 341,050
	12,132 13,321 19,669 21,004 6,097 2,134 5,685 10,605 6,270 6,297
	49,853 53,361
	46,107 30,730 - 4,474 59,499 59,990 2,714 2,729
	108,320 97,923
	158,173 151,284
	189,366 189,766
	53,150 53,150 136,204 136,616 12 -
	189,366 189,766

The accompanying notes form part of these financial statements.

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SHINE CORPORATE LTD INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Note 9 9 For the six months ended 31 December Consolidated Group Balance at 1 July 2015 Total transactions with owners and other transfers Total comprehensive income for the period Transactions with owners, in their capacity as owners, and other transfers Dividends recognised for the period Comprehensive income Profit for the period Shares issued during the period Transaction costs Other comprehensive income Balance at 31 December 2015 Balance at 1 July 2016 Profit for the period Total comprehensive income for the period Comprehensive income Other comprehensive income Transactions with owners, in their capacity as owners, and other transfers Balance at 31 December 2016 Total transactions with owners and other transfers Dividends recognised for the period	Issued capital Retained Earnings Reserves Total $000s $000s $000s $000s 51,835 124,805 - 176,640 - 1,331 - 1,331 - - 4 4
	- 1,331 4 1,335
	1,774 - - 1,774 (9) - - (9) - (3,011) - (3,011)
	1,765 (3,011) - (1,246)
	53,600 123,125 4 176,729
	53,150 136,616 - 189,766 - 3,917 - 3,917 - - 12 12
	- 3,917 12 3,929
	- (4,329) - (4,329)
	- (4,329) - (4,329)
	53,150 136,204 12 189,366

The accompanying notes form part of these financial statements.

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SHINE CORPORATE LTD INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Finance costs Income tax received Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Payments for acquisition of businesses and purchase of files, including earnouts and deferred consideration 4 Costs associated with acquisition of businesses Loans to related parties - repayments Purchase of other intangible assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Costs of raising equity Net proceeds from borrowings Dividends paid 9 Financed asset lease drawdowns net of repayments Net cash provided by financing activities Net decrease in cash held Cash and cash equivalents at beginning of financial year Effect of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at end of financial year 11	31 December 2016 31 December 2015 $000s $000s 84,293 70,087 (79,081) (66,495) 183 122 (1,211) (1,130) 123 579 Consolidated Group
	4,307 3,163
	(798) (372) (14,788) (17,975) (126) (361) 46 22 (2,229) (1,415)
	(17,895) (20,101)
	- (9) 16,778 18,727 (4,329) (3,011) 943 431
	13,392 16,138
	(196) (800) 12,115 9,393 - 1
	11,919 8,594

The accompanying notes form part of these financial statements.

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 1 CORPORATE INFORMATION

Shine Corporate Ltd (the Company or the parent) is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange.

The consolidated financial statements of Shine Corporate Ltd and its subsidiaries (collectively, the Group) for the six months ended 31 December 2016 were authorised for issue on 28 February 2017 in accordance with a resolution of the Directors of the company.

NOTE 2 BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES

Basis of Preparation

The interim consolidated financial statements for the six months ended 31 December 2016 have been prepared in accordance with AASB134 Interim Financial Reporting .

The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 30 June 2016.

Rounding

The amounts contained in this report and in the financial report have been rounded to the nearest thousand dollars (unless otherwise stated) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. The Company is an entity to which the legislative instrument applies.

Changes in Accounting policies, Accounting standards and interpretations

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 June 2016. The Group has not early adopted any new standards or interpretations.

NOTE 3 SEASONALITY OF OPERATIONS

The Group does not incur any high seasonality as considered by AASB 134 Interim Financial Reporting , meaning reported results are not seasonally impacted. However, the Group has historically recorded a significantly higher rate of settlements and consequently cashflows, in the second half of each financial year.

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 4 BUSINESS COMBINATIONS AND ASSET ACQUISITIONS

BUSINESS COMBINATION: Acquisition of Risk Worldwide New Zealand Limited

Effective from 1 September 2016, the Group acquired 100% of the voting shares of Risk Worldwide New Zealand Limited ("RWWNZ"). Prior to this date, the Group owned 33.3% of the business. The results from 1 September 2016 to 31 December 2016 and the balance sheet at 31 December 2016 of the acquired entity have been included in full in these consolidated financial statements.

The Group has acquired RWWNZ to widen its service offering within its Emerging Practices Area. The business purchase has been accounted for using the acquisition method as described in AASB3 Business Combinations . Provisional accounting has been adopted as at 31 December 2016.

The consolidated fair values of the identifiable assets and liabilities of RWWNZ as at the date of acquisition were:

Consideration Share consideration (i) Plant & equipment Trade receivables Other receivables Trade payables Provision for employee liabilities Loan to Risk Worldwide LLC Loan to Keys Claims LLC Existing ownership interest including intercompany loan Deferred tax liability Total identifiable net assets at fair value Goodwill arising on acquisition Analysis of cash flows on acquisition Net cash acquired with the subsidiary Net cash inflow Total liabilities acquired Unbilled disbursements Cash at bank Work in progress (WIP) Assets Total assets acquired Liabilities	NZD AUD $000s $000s - -
	Fair value recognised on acquisition NZD AUD $000s $000s 1,466 1,414 5,202 5,017 3,209 3,095 70 68 333 321 105 101
	10,385 10,016
	(1,858) (1,792) (7) (7) (700) (675) (1,100) (1,061) (6,712) (6,473) (267) (257)
	(10,644) (10,265)
	(259) (249)
	259 249
	1,466 1,414
	1,466 1,414

(i) Two shares for $2 which round down to nil.

The goodwill recognised is primarily attributed to the control premium paid upon acquisition of the remainder of the business. The goodwill is non deductible for income tax purposes.

Following acquisition of this subsidiary, the provision of $1,809,000 against the intercompany loan was reversed. The reversal of this provision has been recognised in the share of net profit/(loss) of associates and joint venture entities in the Statement of Comprehensive Income.

The fair value of trade receivables is deemed to be their gross value less the provision for doubtful debts. The fair value of work in progress (WIP) was estimated based on a detailed review of open case files at the acquisition date.

Nil transaction costs have been expensed in relation to this acquisition.

From the date of acquisition, RWWNZ has contributed $214,000 of revenue and a loss of $491,000 before tax to the continuing operations of the Group. If the acquisition had taken place from 1 July 2016, the revenue would have been $1,014,000, with consolidated Group revenue increasing from $73,955,000 to $74,755,000 and the profit from continuing operations before tax would have been $72,000, with consolidated Group profit before tax increasing from $3,195,000 to $3,758,000.

RWWNZ has agreed to pay a consultancy fee to Keys Claims LLC amounting to 7.5% of pre-tax profits to 30 June 2021 and 5% of all pre-tax profits to 30 June 2026. No liability has been attributed to the above fees as they are not expected to be probable and no reasonable movement in the future is expected to have any material impact (based on Level 3 Fair Value hierarchy inputs).

ASSET ACQUISITION: Acquisition of Claims Consolidated Pty Ltd

Effective 1 December 2016, the Group acquired 100% of the voting shares of Claims Consolidated Pty Ltd for $6,438,000. This has been treated as an asset acquisition under AASB116 "Property, Plant & Equipment", as the entity was acquired for the case file matters.

An intangible Non-contractual Client Relationship asset of $3,262,000 was recognised in line with the Group's existing policy on "Intangibles other than Goodwill". The asset is representative of the premium paid to access profits expected to be obtained. This intangible asset is being amortised over the life of the individual matters with an expected maximum amortisation period of three years.

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 5 OPERATING SEGMENTS

General Information

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Managing Director (chief operating decision maker) in assessing performance and in determining the allocation of resources.

The Group operates in two reporting segments being Personal Injury and Emerging Practice Areas.

The Group does not have any customers which represent greater than 10% of total revenue.

Types of products and services by segment:

(i) Personal Injury Personal injury remains the core business in damages based plaintiff litigation. Services offered include medical negligence, public liability, catastrophic injuries, workers' compensation, and motor vehicle accidents. Subsidiaries within this segment include Shine Lawyers, SB Law, Sciacca's Lawyers and Bradley Bayly. In addition, the files acquired within Claims Consolidated Pty Ltd are part of the personal injury business.

(ii) Emerging Practice Areas The Group has diversified to include emerging practice areas such as disability insurance and superannuation claims, professional negligence, social justice, class actions, first party insurance recovery claims, landowners' rights, family law, aviation, product liability and asbestos compensation. Subsidiaries within this area include Emanate Legal Services, Best Wilson Buckley Family Law, Shine NZ Services and Risk Worldwide New Zealand.

Basis of accounting for purposes of reporting by operating segments

(a) Accounting policies adopted Unless stated otherwise, all amounts reported to the Managing Director, being the chief operating decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

(b) Unallocated items

Any revenues, costs, assets and liabilities that are managed on an overall group basis are not allocated to an individual segment.

(c) Adjustments and eliminations Finance income and costs are not allocated to individual segments as the underlying assets are managed on a group basis.

Current and deferred taxes are not allocated to individual segments as they are also managed on a group basis.

(d) Geographic information All operations are conducted within Australia with the exception of Shine NZ Services Pty Ltd and Risk Worldwide New Zealand Limited which are located in New Zealand.

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SHINE CORPORATE LTD

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

(i) (ii) (iii)	Segment performance 31 December 2016	Personal Injury Emerging Practice Areas Unallocated items Total $000s $000s $000s $000s	Personal Injury Emerging Practice Areas Unallocated items Total $000s $000s $000s $000s
	REVENUE External sales Other revenue Total segment revenue RESULTS Segment profit/(loss) before tax 31 December 2015	54,492 18,896 - 73,388 - - 567 567
		54,492 18,896 567 73,955
		6,267 (288) (2,784) 3,195
		Personal Injury Emerging Practice Areas Unallocated items Total $000s $000s $000s $000s
	REVENUE External sales 44,813 18,922 165 63,900 Other revenue - - 138 138 Total segment revenue 44,813 18,922 303 64,038 RESULTS Segment profit/(loss) before tax (1,110) 3,145 (2,461) (426) Segment assets Personal Injury Emerging Practice Areas Unallocated items Total $000s $000s $000s $000s 31 December 2016 235,273 105,117 7,149 347,539 30 June 2016 241,619 97,334 2,097 341,050 Segment liabilities 31 December 2016 80,634 26,732 50,807 158,173 30 June 2016 87,722 26,252 37,310 151,284 Geographic information 31 December 2016 31 December 2015 $000s $000s Revenue from external customers Australia 72,776 63,709 New Zealand 612 191 Total 73,388 63,900 The revenue above is based on the locations of the customers Non-current operating assets Australia 182,921 180,770 New Zealand 3,854 32 Total 186,775 180,802	44,813 18,922 165 63,900 - - 138 138
		44,813 18,922 303 64,038
		(1,110) 3,145 (2,461) (426)
		Personal Injury Emerging Practice Areas Unallocated items Total $000s $000s $000s $000s
			7,149 347,539 2,097 341,050 50,807 158,173 37,310 151,284 31 December 2016 31 December 2015 $000s $000s 72,776 63,709 612 191
			73,388 63,900
			182,921 180,770 3,854 32
			186,775 180,802

Non-current operating assets consist primarily of property, plant and equipment, work in progress and intangible assets.

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 6 REVENUE AND OTHER INCOME

Note — — — — — Total revenue Sundry disbursements recovered Sales revenue Provision of services/professional fees Less: additional provision Other revenue Interest revenue Other revenue	31 December 2016 31 December 2015 $000s $000s 71,979 76,182 - (14,432) Consolidated Group
	71,979 61,750
	1,409 2,150
	73,388 63,900
	95 122 472 16
	567 138
	73,955 64,038
NOTE 7 OTHER EXPENSES
Note Other expenses Printing, postage and stationery Premises expenses Sundry expenses Motor vehicle and travel expenses Bad & doubtful debts expenses Unrecovered matter related expenses Professional fees HR expenses IT and computer expenses Marketing expenses	31 December 2016 31 December 2015 $000s $000s 5,107 5,165 4,894 3,345 2,328 1,839 3,005 2,824 1,380 1,119 2,556 1,725 3,448 4,655 1,069 957 376 977 658 1,336 Consolidated Group
	24,821 23,942

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SHINE CORPORATE LTD

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 8 INCOME TAX EXPENSE	NOTE 8 INCOME TAX EXPENSE
The	Group calculates the period income tax expense using the tax rate that would be applicable to expected total annual earnings.
		Consolidated Group
		31 December 2016	31 December 2015
		$000s	$000s
(a)	The components of tax expense/(income) comprise:
	Current tax	(10,078)	(5,556)
	Deferred tax	9,356	3,525
	Under provision in respect of prior years	-	274
	Income tax benefit	(722)	(1,757)
(b)	The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled to
	the income tax benefit as follows:
	Prima facie tax payable on profit/(loss) from ordinary activities before income tax at 30% (2015:
	30%)
	Consolidated group	959	(127)
	Tax effect of:
	— non-allowable items	21	19
	— Allocable Cost Amount assessable income	-	171
	— Acquired WIP and disbursements	-	(2,094)
	— Impairment charge	1,500	-
	— recognised temporary differences - tax losses	(3,107)	274
	— Earnout adjustments	(95)	-
	Income tax benefit attributable to entity	(722)	(1,757)
	The applicable weighted average effective tax rates are as follows:	(22.6%)	412.4%

Following a tax ruling by the ATO in June 2015, the Group had tax deductions arising from the process of its restructure prior to the Group's 2013 public listing together with the subsequent formation of a tax consolidated group and operating losses. The total taxable losses available are $48,498,000 (30 June 2016: $25,000,000) resulting in potential deferred tax asset of $14,549,000 (30 June 2016: $7,500,000). This has been recognised in full and is offset against deferred tax liabilities (30 June 2016: $4,471,000).

NOTE 9 DIVIDENDS PAID AND PROPOSED

(a) Distributions paid

Final unfranked ordinary dividend of 2.50 cents (2015: 1.75 cents) per share

		Consolidated Group	Consolidated Group
	31	December 2016	31 December 2015
		$000s	$000s
		4,329	3,011
		4,329	3,011

(b) Distributions proposed and not recognised as a liability

The Board of Directors has declared an interim unfranked ordinary dividend of 0.6 cents per share on 27 February 2017 (2015: nil).

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 10 EARNINGS PER SHARE

The following information reflects the income and share data used in the basic and diluted (loss)/earnings per share computations.

(a) (b) Weighted average number of ordinary shares during the period used in calculating basic EPS Earnings used to calculate basic EPS Net profit attributable to ordinary equity holders of the parent	31 December 2016 31 December 2015 $000s $000s 3,917 1,331 Consolidated Group
	3,917 1,331
	No. No. 173,161,812 172,438,951

(c) Diluted EPS amounts are calculated by dividing the profit attributable to ordinary equity holders of the Parent by the sum of the weighted average number of ordinary shares outstanding during the half year and the weighted average number of shares that would be issued in part consideration for the acquisition of a business combination.

NOTE 11 CASH AND CASH EQUIVALENTS

Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Bank overdrafts Cash at bank and on hand	31 December 2016 30 June 2016 $000s $000s 11,919 12,120 Consolidated Group
	11,919 12,120 - (5)
	11,919 12,115

A floating charge over cash and cash equivalents has been provided for certain debt.

NOTE 12 WORK IN PROGRESS

Work in progress Work in progress provision Unbilled disbursements provision At net realisable value: Work in progress NON-CURRENT At net realisable value: Unbilled disbursements Unbilled disbursements provision Work in progress provision Unbilled disbursements CURRENT	31 December 2016 30 June 2016 $000s $000s 141,255 133,009 (36,510) (31,722) Consolidated Group
	104,745 101,287
	33,754 31,823 (3,522) (3,110)
	30,232 28,713
	134,977 130,000
	128,121 122,410 (20,327) (20,710)
	107,794 101,700
	29,052 25,979 (2,362) (1,760)
	26,690 24,219
	134,484 125,919

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SHINE CORPORATE LTD

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 13 INTANGIBLE ASSETS

Non-contractual Client Relationships Cost Accumulated amortisation Net carrying amount Trademarks, patents and intellectual property Cost Net carrying amount Total intangibles Goodwill Cost Accumulated impairment losses Net carrying amount Net carrying amount Computer software Cost Accumulated amortisation and impairment losses Transformation project costs Accumulated amortisation and impairment losses Net carrying amount Cost Accumulated amortisation and impairment losses Net carrying amount Accumulated amortisation and impairment losses Net carrying amount Cost Cost Website development Erin Brockovich agreement Accumulated amortisation and impairment losses	31 December 2016 30 June 2016 $000s $000s 42,662 42,412 (5,000) - Consolidated Group
	37,662 42,412
	3,262 - - -
	3,262 -
	522 522 (494) (474)
	28 48
	6,949 4,719 (2,095) (2,095)
	4,854 2,624
	669 669 (283) (226)
	386 443
	18 18 (5) (5)
	13 13
	180 180 - -
	180 180
	46,385 45,720

Goodwill Impairment

During the period, the Group assessed all Cash Generating Units (CGUs), particularly the carrying value of its Energy and Resources practice (also known as the Land Access CGU, which forms part of the Group's Emerging Practice Areas) in light of previously advised challenging conditions. The Energy and Resources practice has significantly under performed in the financial year to date. Specifically, there has been a delay in the funding of a number of resources-led infrastructure projects and in the future, the Group expects the Energy & Resources practice area's contribution to fall below the Group's previous expectations.

The Group used the cash-generating unit's value-in-use to determine the recoverable amount. The projected cash flows were updated to reflect the reduced Energy and Resources activity and a post-tax discount rate of 10.6% (30 Jun 2016: 10.6%) was applied. Cash flows beyond the next fiveyear period have been extrapolated using a 3.0% growth rate (30 Jun 2016: 3.0%). This cash generating unit's recoverable amount would deteriorate by $2,190,000 if the discounted rate was increased by 1% or by $1,530,000 if the terminal rate was decreased by 1%.

As a result, an impairment of goodwill of $5,000,000 was recognised in the period against goodwill previously carried at $17,920,000. The impairment charge is recorded as a line item "Impairment of Goodwill" in the Consolidated Statement of Comprehensive Income.

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SHINE CORPORATE LTD

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

Sensitivity to changes in assumptions

With regard to the assessment of value in use of the family law cash generating unit, management believes that no reasonably possible change in the key assumptions would cause the carrying value to materially exceed their recoverable amount.

With regard to the assessment of value in use of the cash generating units that form the personal injury practice area and the Shine EPA practice area, a reasonably possible change in a number of the key assumptions would cause the carrying value of the units to exceed their recoverable amount. The analysis is set out below:

Pre-tax Discount rate used Headroom ie. value-in-use exceeding carrying value Reduction in revenue growth rate Reduction in terminal value growth rate Increase in pre-tax discount rate (Weighted Average Cost of Capital) Each of the following changes independently would result in headroom decreasing to nil:	Shine Personal Injury Shine EPA
	12.3% 12.9% $16,160,000 $4,110,000
	0.4% 0.3% 0.8% 0.7% 0.6% 0.5%

Key revenue and cost assumptions are consistent with those for the year ended 30 June 2016.

Transformation Project Costs

This intangible asset comprises the development of an enterprise resource platform, of which $2,095,000 has previously been amortised due to a change in design. No further amortisation will be undertaken until the asset is placed into use.

Non-contractual Client Relationships

Refer Note 4 for further details of this intangible asset.

NOTE 14 BORROWINIGS

(a) Hire purchase liability Secured liabilities CURRENT Lease liability Hire purchase liability Total current borrowings NON-CURRENT Secured liabilities Bank loans Total current and non-current secured liabilities: Bank loan Lease liability Bank loans Lease liability Hire purchase liability Total non-current borrowings Total borrowings	31 December 2016 30 June 2016 $000s $000s 5,259 1,213 145 90 693 831 Consolidated Group
	6,097 2,134
	42,105 27,756 3,367 2,058 635 916
	46,107 30,730
	52,204 32,864
	31 December 2016 30 June 2016 $000s $000s 47,364 28,969 3,512 2,148 1,328 1,747 Consolidated Group
	52,204 32,864

(b) Debt covenants The bank loans are secured by a fixed and floating charge over the assets of the Group. Covenants imposed by the bank require total bank debt not to exceed 60% of work in progress (net of provisions), and for the ratio of borrowings to EBITDA not to exceed 2.25. As at 31 December 2016 the Group is in compliance with all of its bank covenants.

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 15 ISSUED CAPITAL

(a) - 17 August 2015 for business acquisitions - 21 October 2015 for business acquisitions 173.2 million (30 June 2016: 173.2 million) fully paid ordinary shares Ordinary Shares Shares issued during the period At the end of the reporting period At the beginning of the reporting period	31 December 2016 30 June 2016 $000s $000s 53,150 53,150 Consolidated Group
	53,150 53,150
	31 December 2016 30 June 2016 No. No. 173,161,812 172,400,081 - 401,606 - 360,125 Consolidated Group
	173,161,812 173,161,812

During the half year ended 31 December 2016, no share capital was issued (31 December 2015: share capital was increased by $1.76m, with the issue of 0.76m ordinary shares for part consideration in business acquisitions).

Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of shares held. At the shareholders' meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

NOTE 16 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Estimates of the potential financial effect of contingent liabilities that may become payable:

Contingent consideration - business acquisitions

As part of the purchase agreements with the acquired companies of SB Law, Emanate Legal Services, Sciacca's Lawyers, Sciacca's Family Lawyers and Best Wilson Buckley Family Law, a portion of the consideration was determined to be contingent, based on the performance of the acquired entity. Performance is determined by both cash earnings and number of file openings over an agreed period. The Group has estimated a liability of $1,685,000 (30 June 2016: $6,135,000) subject to targets being met. The net present value of this amount at 31 December 2016 is $1,656,000 (30 June 2016: $5,753,000). The fair value of these liabilities are included within Other current financial liabilities and Other non-current financial liabilities in the Statement of Financial Position. Refer Note 19 for related fair value measurement disclosures.

Bank guarantees

Bank guarantees are contracts that are measured in accordance with AASB 137: Provisions, Contingent Liabilities and Contingent Assets. The bank guarantee facility limit as at 31 December 2016 was $4,000,000 (30 June 2016: $4,000,000) of which $595,000 (30 June 2016: $721,000) was unused at the end of the reporting period.

Contingent liabilities

The Group has entered into an agreement with Wingate to provide disbursement loans to its clients. In the event the client's case is not successful, the Group has provided an indemnity to Wingate Asset Finance for the loan. The total value of all disbursement loans at 31 December 2016 is $4,482,000 (30 June 2016: $9,338,000), which represents the Group's maximum potential exposure. These loans are recorded within disbursement creditors in the Statement of Financial Position and an equal and offsetting amount is recorded within unbilled disbursements.

The Group had entered into an agreement with Essic Pty Ltd during FY2016 to sell $1,084,000 of its deferred debtors within the Best Wilson Buckley Family Law subsidiary. The debtors were sold at an 8.0% discount to their book value and the buyer was provided with an indemnity against any future credit losses as a result of the failure of a client to pay their debt. The Group's maximum exposure under this indemnity is the discounted value of the uncollected debts of $770,000 (30 June 2016: $987,000).

The Group has received a small number of individual notifications submitted by former clients against the Group. When each notification is received, the Group makes an assessment of the likelihood that the potential notice will proceed to a legal claim. The Group’s estimate of the notifications that may progress to a claim and the excess that may need to be paid to its insurers to cover such potential claims at 31 December 2016 is $680,000 (30 June 2016: $410,000).

NOTE 17 EVENTS AFTER THE REPORTING PERIOD

The Directors are not aware of any significant events since the end of the reporting period except as noted in Note 9.

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 18 RELATED PARTY TRANSACTIONS

Related Parties

(a) The Group's main related parties are as follows:

• i. Key Management Personnel:

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel.

ii. Entities subject to significant influence by the Group:

An entity that has the power to participate in the financial and operating policy decisions of an entity, but does not have control or joint control over those policies, is an entity which holds significant influence. Significant influence may be gained by share ownership, statute or agreement.

(b) Transactions with related parties:

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties:

i. ii. Sales of goods, rents and services to related parties Interest received from related parties End of the period Beginning of the period Loan repayment Other related parties (entities controlled by KMP's Morrison and Roche) Loans advanced Loans to other related parties (entities controlled by the KMP's Morrison and Roche) Purchase of goods, rents and services from related parties	31 December 2016 31 December 2015 $000s $000s 454 462 399 165 52 26 31 December 2016 30 June 2016 $000s $000s 1,282 655 61 627 (107) - Consolidated Group Consolidated Group
	1,236 1,282

This loan provides funding to the Shine NZ affiliated entity. It is unsecured and bears interest at the rate equivalent to Shine Corporate Ltd.'s Australian working capital bank facility loan rate plus 2%.

iii. During the half year period $175,000 was paid in consultancy fees to Stephen Roche (31 December 2015: $110,000).

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 19

FAIR VALUE MEASUREMENTS

The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition of:

— obligations for contingent consideration arising from business combinations.

The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.

(a) Fair value hierarchy

AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows:

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

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.

(b) Valuation techniques

The fair value of the contingent consideration in the business combinations is determined by performance forecasts which are used to estimate future cash flows. These cash flows are discounted back to a present fair value amount using the applicable discount rate.

The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy.

Recurring fair value measurements Liabilities Total liabilities recognised at fair value Recurring fair value measurements Liabilities Total liabilities recognised at fair value Contingent consideration Contingent consideration	Level 1 Level 2 Level 3 Total $000s $000s $000s $000s - - 1,656 1,656 31 December 2016
	- - 1,656 1,656
	Level 1 Level 2 Level 3 Total $000s $000s $000s $000s - - 5,753 5,753 30 June 2016
	- - 5,753 5,753

(c) Reconciliation of recurring Level 3 fair value measurements

Reconciliation of recurring Level 3 fair value measurements
Balance at the beginning of the period Additions Gains recognised in profit or loss (other revenue) Settlements of earnouts Balance at the end of the period Interest - discount unwind	31 December 2016 30 June 2016 $000s $000s 5,753 9,202 - 371 29 356 (200) (990) (3,926) (3,186) Consolidated Group
	1,656 5,753

(d) Sensitivity analysis for recurring level 3 fair value movements

The Group has conducted a sensitivity analysis of the unobservable inputs and determined that a reasonable movement in these inputs could materially impact the fair value of the contingent consideration as at the reporting date. The key unobservable input is the expected EBITDA for each subsidiary subject to a contingent consideration payment. The potential decrease in the fair value of the contingent consideration payable from a reasonable change in forecast EBITDA is $1,985,000, i.e. could give rise to a potential receivable of $329,000, (30 June 2016: $1,500,000) whilst the potential increase in the fair value of contingent consideration payable from a reasonable change in forecast EBITDA is $765,000 (30 June 2016: $1,300,000).

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SHINE CORPORATE LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2016

NOTE 20 COMPANY DETAILS

The registered office of the Group is: Shine Corporate Ltd Level 13, 160 Ann Street Brisbane QLD 4000

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SHINE CORPORATE LTD DIRECTORS’ DECLARATION

In accordance with a resolution of the Directors of Shine Corporate Ltd, I state that:

In the opinion of the Directors:

• (a) the financial statements and notes of Shine Corporate Ltd for the half year ended 31 December 2016 are in accordance with the Corporations Act 2001 including:

• (i) giving a true and fair view of the consolidated entity's financial position as at 31 December 2016 and of its performance for the half year ended on that date; and

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

• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

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Simon Morrison

Managing Director

Dated this 28th day of February 2017

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Ernst & Young Tel: +61 7 3011 3333 111 Eagle Street Fax: +61 7 3011 3100 Brisbane QLD 4000 Australia ey.com/au GPO Box 7878 Brisbane QLD 4001

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Independent review report to the members of Shine Corporate Ltd

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Shine Corporate Ltd, which comprises the interim consolidated statement of financial position as at 31 December 2016, the interim consolidated statement of comprehensive income, interim consolidated statement of changes in equity and interim consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the halfyear end.

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 controls as the directors determine are necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the 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 2016 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Shine Corporate Ltd and the entities it controlled during the period, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and 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.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Shine Corporate Ltd 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 2016 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 .

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Ernst & Young

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Ric Roach Partner Brisbane 28 February 2017

SHINE CORPORATE LTD ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

The following information is current as at 28 February 2017:

1. Directors Tony Bellas, Chairman and Non-Executive Director Carolyn Barker AM, Non-Executive Director Gregory Moynihan, Non-Executive Director Simon Morrison, Managing Director

2. Company secretaries Vicki Clarkson Annette O'Hara

3. Principal registered office Level 13, 160 Ann Street, Brisbane QLD 4000 Phone: 1800 752 429

Fax: +61 7 3229 1999

1. Stock Exchange Listing Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Limited.

Code: SHJ

1. Auditors Ernst & Young 111 Eagle Street, Brisbane QLD 4000 Phone: +61 7 3011 3333 Fax: +61 7 3011 3100

2. Solicitors McCullough Robertson Central Plaza 2, Level 11, 66 Eagle Street, Brisbane QLD 4000

3. Company website www.shinecorporate.com.au

4. Company numbers ACN: 162 817 905 ABN: 93 162 817 905

5. Bankers Commonwealth Bank of Australia

Ground Floor, 143-145 Margaret Street, Toowoomba QLD 4350

1. Investor relations website www.linkmarketservices.com.au

2. Share registry The Registrar

Link Marketing Services Level 12, 680 George Street, Sydney NSW 2000 Phone: 1300 554 474 (toll free) + 61 8280 7111

Fax: +61 2 9897 0303 Fax: +61 2 9897 0309 (for proxy voting) Postal Address Locked Bag A14, Sydney South NSW 1235

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