VECTION TECHNOLOGIES LTD — Interim / Quarterly Report 2018

Feb 28, 2018

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Appendix 4D

28 February 2018

Half year reporting period ending 31 December 2017

The following information is provided to ASX under listing rule 4.2A.3.

1. Reporting period

• a. Current Period: 6 months ended 31 December 2017

• b. Prior Period: 6 months ended 31 December 2016

2. Results for announcement to the market

	Item	31 December 2017 $	31 December 2016 $	Change %
Revenue from ordinary activities	2.1	$6,050,954	$4,368,921	38%
Profit/(Loss) after tax attributable to members	2.2	($3,889,688)	($2,524,860)	(54%)
Net Profit/(Loss) attributable to members	2.3	($3,889,688)	($2,524,860)	(54%)
Dividend	2.4	ServTech Global Holdings Limited did not declare a dividend during the current reportingor corresponding previous reporting period.
The record date for determining entitlements to the dividend	2.5	Not applicable
Explanatory information 2.6 Overview For the Half Year Ended 31 December 2017, ServTech Global Holdings Limited (“ServTech” or the ‘Company”) was focused on: - Reviewing operational activities to minimise costs and maximise revenue opportunities; - Formalising a strategic partnership with The Agency Group Australia Limited (‘The Agency’) to take on the real estate businesses of ServTech; - Returning to delivering on core service offerings: Outsourced Solutions, Custom Software Development and Software as a Service. During the half year, ServTech announced that it had entered into a binding convertible loan facility agreement with Servnote Holding Pty Ltd (‘Servnote’), a private consortium, to invest up to $1 Million in cash into the Company. A constituent of this private consortium was The Agency who, as a result of participating in the convertible note, made an indirect investment in ServTech. Subsequent to period end on 21 February 2018, the Company announced the successful completion of the transaction with The Agency for them to acquire ServTech subsidiaries Sell Lease Property Pty Ltd (real estate agency); Complete Settlements Pty Ltd (conveyancing) and Value Finance Pty Ltd (mortgage broking) for $950,000 in cash. To date, the Company has received $250,000 of the Consideration.

Efficient Services Effective Technology

www.servtechglobal.com.au

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These divestments will help the Company to concentrate on generating revenue from its two significant divisions – an onshore/offshore IT development division and an outsourced back office support division.

Revenue

Overall revenue from ordinary activities ($6,050,954) was up on the prior period (2016: $4,368,921) mainly as a result of the Company’s early focus on recruiting and building up a sizable real estate agency. As more agents were involved in this period, substantially more agency fees were received. These revenues are largely paid out in costs – i.e. they would flow through the entity and back to the agents.

Explanation of loss

During the period, the Company:

• Recognised a write down on property, plant and equipment for $330,305. These assets no longer generate revenue;

• Recognised an onerous lease provision to the value of $446,000;

• Made several group personnel redundant.

The Company is re-positioning from the obligations of maintaining full real estate businesses employing real estate consultants and agents directly, to concentrating on its core offering which is back office support for those same consultants and agents. This re-positioning has resulted in some one-off costs but in the long term will allow ServTech the opportunity to build a sustainable business.

Outlook

ServTech has two significant divisions – an onshore/offshore IT development division and an outsourced back office support division. The IT development division, led by an Australian based team and supported by an Indian based team, designs and develops technology solutions for any business, in any transaction focused industry.

The experienced outsourced back office services division facilitates cost effective and efficient business operations. Consisting of a centre based in the Philippines and managed from Australia, this division has the capacity to sit and charge out up to 200 employees for back office support.

As well as pursuing the agreements ServTech currently has on foot, the Board will be looking to execute more conventional service type agreements for call centre and IT development services for various companies to utilise ServTech’s substantial outsourced teams.

3. Net tangible assets per security

	31 December 2017	31 December 2016
Net tangible asset per share (cents per share)	0.02 cents	0.05 cents

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Efficient Services Effective Technology

www.servtechglobal.com.au

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

There were no entities over which control has been gained or lost during the period. Note the transaction with The Agency was completed post period end.

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

Not applicable.

6. Details of any dividend or distribution reinvestment plans in operation and the last date for the receipt of an election notice for participation in any dividend or distribution reinvestment plan

Not applicable.

7. Details of associates and joint venture entities including the name of the associate or joint venture entity and details of the reporting entity’s percentage holding in each of these entities

Not applicable.

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

The Company is not a foreign entity.

9. For all entities, if the accounts contain an independent audit report or review that is subject to a modified opinion, emphasis of matter or other matter paragraph, a description of the modified opinion, emphasis of matter or other matter paragraph.

The 2017 Half-Year report is based upon accounts that were reviewed by the Company’s auditor are not subject to a modified opinion. The report does include an emphasis of matter regarding the going concern basis of preparation of the interim financial accounts.

Yours faithfully

ServTech Global Holdings Limited

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Bert Mondello

Chairman Tel: +618 6380 2555

Efficient Services Effective Technology

www.servtechglobal.com.au

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SERVTECH GLOBAL HOLDINGS LIMITED

ABN 93 614 814 041

INTERIM FINANCIAL REPORT

For the six months ended 31 December 2017

This half-year financial report is to be read in conjunction with the financial report for the year ended 30 June 2017 and any announcements to the market during the half-year ended 31 December 2017.

C O N TE NT S
	Page
Directors' Report	2
Auditor’s Independence Declaration	5
Interim Financial Report
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 Interim Financial Report	10
Directors' Declaration	22
Independent Auditor’s Review Report	23

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D I RE C T O R S ’ R E P O R T

The Directors of ServTech Global Holdings Limited (the Company, Group or SVT ) present the Interim Financial Report for the period ended 31 December 2017 and the auditor’s review report.

DIRECTORS

The Directors of the Company at any time during or since the end of the interim period and until the date of this report are noted below:

Mr Bert Mondello

Non-Executive Chairman – Appointed: 22 November 2017

Mr Gianmarco Orgnoni

Non-Executive Director – Appointed: 22 November 2017

Mr Derek Hall

Non-Executive Director – Appointed: 7 February 2018

Mr Brett Quinn

CEO/Managing Director – Appointed: 14 September 2016, resigned 7 February 2018

Mr Nicholas Cernotta

Non-Executive Chairman – Appointed: 17 October 2016, resigned 22 November 2017

Mr Brynmor Hardcastle

Independent Non-Executive Director – Appointed: 14 September 2016, resigned 22 November 2017

Mr David Newman

Independent Non-Executive Director – Appointed: 10 November 2016, resigned 22 November 2017

PRINCIPAL ACTIVITIES

During the period, the principal continuing activity of the Group consisted of providing software services and administrative support for real estate and finance related operations.

REVIEW OF OPERATIONS

The Company was initially focussed on building and expanding its technology based real estate business model in tandem with implementing an industry diversification strategy to put its technology into other industries and markets. This strategy has yielded some positive results, including deals with DVG Automotive Group, REIWA and the petrol station and convenience store joint venture.

Later in the period, the impact of changing market conditions resulted in slower than expected revenue growth which resulted in an unacceptably high and unsustainable rate of cash burn.

To address this issue, the Company sought to sell its rent roll business. The changing market conditions in tandem with the funds from the sale of the rent roll business falling short of expectations, prompted the Company implement rapid cost cutting and consolidation initiatives.

Strategic Review, New Funding and Board Changes

On 22 November 2017, the Company announced that it had entered into a binding convertible loan facility agreement with Servnote Holding Pty Ltd (‘Servnote’), a private consortium, to invest up to $1 Million in cash into the Company. A constituent of this private consortium was integrated real estate and financial services company The Agency Group Australia Limited (‘The Agency’) (ASX: AU1) who, as a result of participating in the convertible note, made an indirect investment in ServTech.

On 14 December 2017 the Company announced that it had entered into a binding term sheet agreement (‘The Agency Agreement’) with The Agency. Per the terms of The Agency Agreement, The Agency would acquire ServTech subsidiaries Sell Lease Property Pty Ltd (real estate agency); Complete Settlements Pty Ltd (conveyancing business) and Value Finance Pty Ltd (mortgage broking business) for maximum consideration of $950,000 in cash. As well as monetising these operations, moving their substantial payroll, real estate licensing and other compliance obligations to The Agency; a company specialising in that sector, makes sense for both parties.

Subsequent to period end on 21 February 2018, the Company announced the successful completion of the transaction with The Agency. With the successful completion of this transaction, ServTech will receive $950,000 (“Consideration”) for the purchase of its real estate businesses. To date, the Company has received $250,000 of the Consideration.

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D I RE C T O R S ’ R E P O R T (CONTINUED)

Outlook

The Company has two significant divisions – an onshore/offshore IT development division and an outsourced back office support division. The IT development division, led by an Australian based team and supported by an Indian based team, designs and develops technology solutions for any business, in any transaction focused industry. The experienced outsourced back office services division facilitates cost effective and efficient business operations. Consisting of a centre based in the Philippines and managed from Australia, this division has the capacity to sit and charge out up to 200 employees for back office support.

As well as pursuing the agreements ServTech currently has on foot, the new Board members will be looking to execute more conventional service type agreements for call centre and IT development services for various companies to utilise ServTech’s substantial outsourced teams.

RESULTS

The Company incurred a loss of $3,889,688 after income tax for the year (2016: loss $2,524,860). A substantial proportion of this loss is attributable to the obligations of running the real estate related businesses which was a non-core activity. With the sale of the real estate businesses, revenue will fall but staff, advertising and administrative costs are anticipated to fall proportionately further and the business will be able to focus its resources and management towards its core offerings of Outsourced Solutions, Custom Software Development and Software as a Service.

With the Servnote convertible note facility and the entry into a back office support agreement with The Agency, ServTech has the opportunity to build a profitable business.

EVENTS OCCURING AFTER THE REPORTING PERIOD

On 8 February 2018, the Company announced that it and CEO/Managing Director Mr Brett Quinn had entered into an agreement to terminate Mr Quinn’s consultancy agreement. Mr Quinn also stepped down from the Company as a Director. Subsequent to period end, in full and final settlement of all obligations under Mr Quinn’s consultancy agreement, the Company made a payment of $61,500.

On 21 February 2018, the Company announced the successful completion of the transaction with The Agency. With the successful completion of this transaction, ServTech will receive $950,000 (“Consideration”) for the purchase of its real estate businesses. To date, the Company has received $250,000 of the Consideration.

Other than the above, there were no other subsequent events.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Group during the period were as follows:

• On 22 November 2017, the Company announced that it had entered into the convertible note agreement with ServNote and that Mr Bert Mondello and Mr Gianmarco Orgnoni had been appointed to the Board replacing Mr Nicholas Cernotta, Mr Brynmor Hardcastle and Mr David Newman.

• On 15 September 2017, the Company announced the sale of its property management rent roll business, conducted through the subsidiary Capitol Asset Management Pty Ltd. Under the terms of the sale, ServTech was entitled to receive 80% of the relevant purchase price on or before 1 October 2017 (Settlement Date) with 20% of the purchase price to be held over to account for non-retained properties during the sale transition process. The final adjustment date will occur six months after the Settlement Date. To date, the Company has banked total proceeds of ~$650,000 with the retention amount of ~$130,000 due to be received in March 2018.

• On 21 February 2018, the Company announced the successful completion of the transaction with The Agency to sell the assets and operations of its real estate businesses Sell Lease Property, Value Finance and Complete Settlements. With the successful completion of this transaction, ServTech will receive $950,000 for the purchase of its real estate businesses. To date, the Company has received $250,000 of the Consideration.

• Going forward the Company will be focused on its core offerings of Outsourced Solutions, Custom Software Development and Software as a Service.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Other than information disclosed elsewhere in this interim report, information on likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this Directors' Report because the Directors believe, on reasonable grounds, that to include such information would be likely to result in unreasonable prejudice to the Group.

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AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd, to provide the Directors of the Company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 5 and forms part of this Directors’ Report for the half-year ended 31 December 2017.

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

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Mr Bert Mondello

Chairman Dated at Perth, Western Australia this 28[th] day of February 2018.

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Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

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DECLARATION OF INDEPENDENCE BY WAYNE BASFORD TO THE DIRECTORS OF SERVTECH GLOBAL HOLDINGS LIMITED

As lead auditor for the review of Servtech Global Holdings Limited for the half-year ended 31 December 2017, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Servtech Global Holdings Limited and the entities it controlled during the period.

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Wayne Basford

Director

BDO Audit (WA) Pty Ltd

Perth, 28 February 2018

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BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

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SERVTECH GLOBAL HOLDINGS LIMITED

HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Notes	Consolidated	Consolidated
	Period Ended 31 Dec 2017	Period Ended 31 Dec 16
	$ 6,050,954 7,165,840 79,572 748,594 246,786 203,655 344,818 69,205 108,972 28,233 24,540 814,375 106,052 - - 9,940,642 (3,889,688) - (3,889,688) 4,378 (3,885,310) (3,885,310) (0.0377) (0.0377)	$
Revenue Revenue 2(iii) Expenses Employee benefits expense 2(i) Advertising expense Rent expense Trail commission expense Information technology expense Consulting and professional fees Finance costs 2(ii) Depreciation and amortisation Accounting fees Insurance expense Other expenses Travel Acquisition costs – common controlled transaction Share based payment Total Expenditure Loss before income tax expense Income tax expense Loss after income tax attributable to equity holders of ServTech Global Holdings Limited 13 Items that may be reclassified to profit or loss Total other comprehensive income Total comprehensive loss for the year Total comprehensive loss attributable to equity holders of ServTech Global Holdings Limited Loss per share for the year attributable to the members of ServTech Global Holdings Ltd Basic loss per share 14 Diluted loss per share 14		4,368,921 4,018,196 105,889 162,239 128,327 195,448 514,842 718,516 25,166 27,757 31,501 124,645 63,874 115,301 662,080
		6,893,781
		(2,524,860)
		-
		(2,524,860)
		(2,524,860)
		(2,524,860)
		(0.0630) (0.0630)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT AS AT 31 DECEMBER 2017 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes	Consolidated	Consolidated
	As at 31 Dec	As at 30 June
	2017	2017
	$ 846,862 311,222 170,206 1,328,290 322,312 209,236 - 531,548 1,859,838 974,519 498,998 815,127 2,288,644 320,721 186,678 507,399 2,796,043 (936,205) 10,040,552 604,046 (11,580,803) (936,205)	$
Current Assets Cash and cash equivalents 3 Receivables 4 Non-current Assets Held for Sale 7 Total Current Assets Non-Current Assets Receivables 5 Property, plant & equipment 6 Intangible assets 7 Total Non-Current Assets Total Assets Current Liabilities Trade and other payables 8 Other provisions 9 Interest bearing liabilities 10 Total Current Liabilities Non-Current Liabilities Trade and other payables 8 Other provisions 9 Total Non-Current Liabilities Total Liabilities Net Assets/(Liabilities) Equity Issued capital 11 Reserves 12 Accumulated losses 13 Total Equity/(Deficiency in Equity)		3,300,575 642,785
		3,943,360
		561,275 454,909 430,989
		1,447,173
		5,390,533
		1,231,918 143,504 438,231
		1,813,653
		555,078 72,697
		627,775
		2,441,428
		2,949,105
		10,040,552 599,668 (7,691,115)
		2,949,105

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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SERVTECH GLOBAL HOLDINGS LIMITED

HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Consolidated
	Period Ended 31 December 2017
	Issued Capital Accumulated Losses Share Based Payments Reserve Foreign Currency Translation Reserve Total
	$ $ $ $
Balance at 1 July 2017	10,040,552 (7,691,115) 601,380 (1,712) 2,949,105
Loss for the period	- (3,889,688) - - (3,889,688)
Other comprehensive(loss)/income	- - - 4,378 4,378
Total comprehensive loss for theperiod	- (3,889,688) - 4,378 (3,885,310)
Share based payments	- - - - -
Transactions with owners in their capacity as owners	- - - - -
Issue of share capital	- - - - -
Balance at 31 December 2017	10,040,552 (11,580,803) 601,380 2,666 (936,205)
Balance at 1 July 2016 Loss for the period Other comprehensive income Total comprehensive loss for the year Transactions with owners in their capacity as owners Issue of share capital Share based payments Share issue costs Balance at 31 December 2016	1,000 (1,717,607) - (1,716,607) - (2,524,860) - (2,524,860) - - - -
	- (2,524,860) - (2,524,860)
	194,240 - - 194,240 333,200 - 328,880 662,080 - - - -
	528,440 (4,242,467) 328,880 (3,385,147)

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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SERVTECH GLOBAL HOLDINGS LIMITED

HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 CONSOLIDATED STATEMENT OF CASH FLOWS

	Consolidated Period Ended 31 Dec 2017 Period Ended 31 Dec 2016 Notes $ $ 6,989,507 4,249,081 (9,865,400) (5,083,839) (15,167) (33,517) 57,196 (19,605) 4,464 - (2,829,400) (887,880) (197,520) (29,138) 260,783 (414,086) (156,104) - (92,841) (443,224) 500,000 - - 109,504 - 1,618,816 - 46,646 500,000 1,774,966 3,300,575 364,666 (2,422,241) 443,862 (31,472) - 846,862 808,528	Consolidated Period Ended 31 Dec 2017 Period Ended 31 Dec 2016 Notes $ $ 6,989,507 4,249,081 (9,865,400) (5,083,839) (15,167) (33,517) 57,196 (19,605) 4,464 - (2,829,400) (887,880) (197,520) (29,138) 260,783 (414,086) (156,104) - (92,841) (443,224) 500,000 - - 109,504 - 1,618,816 - 46,646 500,000 1,774,966 3,300,575 364,666 (2,422,241) 443,862 (31,472) - 846,862 808,528
		Period Ended 31 Dec 2016
		$
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest paid (Repayment)/Advancement of funds to employees Interest received Net cash outflow from operating activities Cash flows from investing activities Payments for plant & equipment Proceeds (Payments) for intangible assets – rent roll Proceeds from sale of other non-current assets Net cash outflow from investing activities Cash flow from financing activities Proceeds from issue of convertible notes Net cash acquired in common controlled acquisition Proceeds from borrowings Proceeds from shareholder loans Net cash inflow from financing activities Cash and cash equivalents at the beginning of the financial year Net increase/(decrease) in cash and cash equivalents Effect of movement in exchange rates on cash held Cash and cash equivalents at the end of the financial year		4,249,081 (5,083,839) (33,517) (19,605) -
		(887,880)
		(29,138) (414,086) -
		(443,224)
		- 109,504 1,618,816 46,646
		1,774,966
		364,666 443,862 -
		808,528

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-yearly report of ServTech Global Holdings Limited (the Company, Group or ServTech ) for the period ended December 2017 was authorised for issue in accordance with a resolution of directors on 28 February 2018.

The Company is a public company limited by shares incorporated on 14 September 2016 and domiciled in Australia.

The nature of the operations and principal activities of the Company are described in the Directors’ report.

(a) Basis of preparation

The principle accounting policies adopted for the preparation of the interim financial report are set out below. These accounting policies have been applied consistently to all periods presented unless otherwise stated.

(i) Statement of compliance

This interim financial report for the half-year reporting period ended 31 December 2017 have been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting (AASB 134) and the Corporations Act 2001 . Compliance with AASB 134 ensures compliance with the International Financial Reporting Standard IAS34 ‘Interim Financial Reporting’.

The interim financial report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as fill an understanding of the financial performance and cash flows of the Company as in the full financial report.

It is recommended that this interim financial report be read in conjunction with the Company’s 2017 annual financial report.

(ii) Basis of preparation

The interim financial report has been prepared on the basis of historical cost, except for certain financial instruments that are measured at fair values at the end of each reporting period, as disclosed in the accounting policies below. Historical cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company’s 2017 annual financial report for the financial year ended 30 June 2017. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

In the half-year ended 31 December 2017, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2017.

(iii) Going Concern

The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. For the period ended 31 December 2017 the Group recorded a loss of $3,889,688 (2016: $2,524,860), negative cash flows from operating activities of $2,829,400 (2016: $887,880) a net current liability position of $960,354 (2016: net current asset position of $2,129,707) and a net asset deficiency of $936,205 as at 31 December 2017.

Subsequent to the period end, the Group disposed of the SLP, CS and VF businesses which were the Group’s main source of both revenues and expenses. These businesses were sold for a consideration of $950,000 of which $250,000 has been received. The balance of the consideration of $700,000 is to be received in monthly instalments of $50,000.

These conditions indicate a material uncertainty that may cast a significant doubt about the Group’s ability to continue as a going concern, and therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

The Group is continually assessing its ongoing cash requirements. As part of this process the Group maintains a strict internal cash flow management process which is based on numerous revenue and other assumptions. Should these assumptions not be achieved the directors believe the Group will reduce the cost base in line with revenue as required and attempt to raise additional capital or enter other funding arrangements as required. The Group has entered into a convertible note facility giving it access to up to $1 Million of funding, $500,000 of which was drawn by the Company on 1 December 2017.

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SERVTECH GLOBAL HOLDINGS LIMITED

HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(iii) Going Concern (continued)

The financial statements have been prepared on the basis that the Group is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business for the reasons outlined above.

Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements and that the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern.

(b) Segment Information

Operating Segments – AASB 8 requires a management approach under which segment information is presented on the same basis as that used for internal reporting purposes. This is consistent to the approach used for the comparative period. Operating segments are reported in a uniform manner to which is internally provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors.

An operating segment is a component of the Group that engages in business activity from which it may earn revenues or incur expenditure, including those that relate to transactions with other Group components. Each operating segment’s results are reviewed regularly by the Board to make decisions about resources to be allocated to the segments and assess its performance, and for which discrete financial information is available.

The Board monitors the operations of the Company based on 4 segments; Sell Lease Property Pty Ltd (SLP), Value Finance Pty Ltd (VF), Complete Settlements Pty Ltd (CS) and Capitol Asset Management Pty Ltd. Subsequent to period end, the assets of SLP, VF and CS including the brands and operating businesses were sold to The Agency Group Australia Limited for consideration of $950,000. This will have an impact on the segments by which the Company monitors operations going forward into the next period.

The financial results of each segments are reported to the board to assess the performance of the Group. The Board has determined that strategic decision making is facilitated by evaluation of the operations of the legal parent and subsidiaries which represent the operational performance of the Group’s revenues and the research and development activities as well as the finance, treasury, compliance and funding elements of the Group.

(c) Estimates and judgements

The preparation of the annual financial report requires the use of accounting estimates and judgements which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involve a degree of judgement or complexity in the preparing the annual financial report. Facts and circumstances may come to light after the event which may have significantly varied the assessment used which result in a materially different value being recorded at the time of preparing this annual financial report.

Deferred tax assets - The Group has not recognised deferred tax assets relating to carried forward tax losses or timing differences. These amounts have not been recognised given the recognition requirements of AASB 112 Income Taxes .

Intangible assets - Rent rolls are classified as intangible assets and recorded at cost less accumulated amortisation. The rent rolls are amortised over 7 years which is their estimated useful life based on comparable market evidence.

Upfront commission - The Group is entitled to receive upfront commissions from lenders on loans that have been originated by the Group and settled by the ultimate financier. There is a potential clawback period (which varies depending upon the lender) from when the loan settles (notwithstanding the Group has an ability to contractually obtain any clawback amount from the referring party), accordingly the Group has considered and assessed the provision for potential payment at 30 June 2017 as $nil (2016: $nil).

Trail commission - The Group is entitled to receive trail commissions from lenders on loans that have been originated by the Group and settled by the ultimate financier. The trailing commissions are received over the life of the loan based on the individual loan balance outstanding. The Group is also required to make trailing commission payments to brokers or other referrers.

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Group recognises the trail commissions as revenue on a gross basis at the present value of the consideration, determined by discounting the instalments receivable at the imputed rate of interest of 10%. An appropriate corresponding expense and provision is also recognised for the amount to be on-paid to the referring party.

The determination of the trailing commission revenue and receivable and expense and payable requires the use of considerable assumptions, including but not limited to the life of the underlying loan, which is consistent with general market practice.

Rental management referrals - The Group has entered into referral agreements with various parties in relation to property management rights (“rent roll”). Under the referral agreement the referrers are due deferred contingent commissions, which is the value of the rent roll generated by the Group once the following conditions are met:

• Serviced by the Group for 24 months

• A further 12-month agreement is entered into after the initial 24-month period

As the payment is contingent upon a future event (as outlined above) no provision is recognised until the above conditions are satisfied, however the potential amounts payable are detailed in Note 17. Any eventual referral fees paid will be capitalised as an intangible asset, being a cost directly relating to the acquisition of the rent roll.

(d) Principles of consolidation

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(e) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the financial period.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(d) New accounting standards and interpretations that are not yet mandatory

In the half-year ended 31 December 2017, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2017.

It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies as a result of the adoption of new and revised accounting standards. The Directors have reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2017. The Directors have decided against early adoption of any new Standards and Interpretations. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies as a result of accounting standards issued not yet effective.

12

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Period Ended 31 Dec 2017 Period Ended 31 Dec 2016 $ $ 2 LOSS FOR THE PERIOD Loss for the year included the following items: (i) Employee benefits expense Real estate consultant commissions 3,649,415 2,754,752 Corporate and administrative salaries 1,332,319 477,982 Other employee benefits expenses 2,184,106 785,462 7,165,840 4,018,196 A significant portion of the Company’s expenses is the payout of the Company’s property consultants for commissions related to completion of real estate transactions. These expenses pass through the Company after the Company banks the commissions from the transactions and then on pays to the commissions to the relevant property consultant. (ii) Finance costs Convertible notes (a) 41,333 600,000 Other 27,872 118,516 69,205 718,516	Consolidated	Consolidated
	Period Ended 31 Dec 2017	Period Ended 31 Dec 2016
		$
		2,754,752 477,982 785,462
		4,018,196
		718,516

(a) Convertible Notes – On 22 November 2017, the Company announced that it had entered into a binding convertible loan facility agreement with Servnote Holding Pty Ltd (Servnote), a private consortium, to invest up to $1 Million in cash into the Company. To date, $500,000 has been received from Servnote and financing costs of $41,333 have been recognised. Conversion of the Servnote convertible loan facility to ordinary shares in the Company is subject to shareholder approval.

In the prior period, the Group issued $1,200,000 of convertible notes as an initial capital raising (“Initial Capital Raising Notes”). The loan amount was repaid by the Group on the repayment date through the issue of shares in the Company. Following the conversion of the Initial Capital Raising Notes on the listing on the Australian Securities Exchange (“ASX”), the 50% conversion or $1,200,000 was recognised as a finance cost in the financial year ended 30 June 2017, with $2,400,000 recognised in issued capital.

(iii) Revenue Agency selling fees Upfront commissions Trail commissions Management fees Settlement fees Other revenue	4,651,536 301,515 245,693 207,922 207,118 437,170 6,050,954	3,653,437 202,728 130,491 123,903 115,326 143,036
		4,368,921

13

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ERVTECH GLOBAL HOLDINGS LIMITED ALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3 CASH Cash at bank Balance per statement of cash flows	Consolidated
	As at 31 Dec 2017	As at 30 June 2017
	$ 846,862 846,862	$
		3,300,575
		3,300,575

4 RECEIVABLES - CURRENT Trade and other receivables Provision for doubtful debts Amounts receivable from employees Provision for doubtful employee receivables Amounts receivable from shareholders Prepayments	Consolidated	Consolidated
	As at 31 Dec 2017	As at 30 June 2017
	$ 256,490 (95,347) 241,351 (200,000) 202,494 1,160 107,568 311,222	$
		429,961 (216,661) 287,706 -
		501,006 2,095 139,684
		642,785

• (a) Classification of trade and other receivables (current and non current)

All receivables are non-interest bearing. There are no receivables where the fair value would be materially different from the current carrying value. The Group reviews all receivables for impairment. Any receivables which are doubtful have been provided for. Based on past experience all receivables where no impairment has been recognised are not considered to be impaired. No other class of financial asset is past due.

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5 RECEIVABLES – NON CURRENT

Trail commission receivables		322,312 322,312	561,275
			561,275

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6 PROPERTY, PLANT & EQUIPMENT OFFICE & COMPUTER EQUIPMENT Office & computer equipment at cost Less accumulated depreciation Less provision for impairment LEASEHOLD IMPROVEMENTS Leasehold improvements at cost Less accumulated depreciation Less provision for impairment SOFTWARE DEVELOPMENT Software development at cost Less accumulated depreciation Less provision for impairment TOTAL PLANT & EQUIPMENT	Consolidated	Consolidated
	As at 31 Dec 2017	As at 30 June 2017
	$ 598,746 (281,393) (250,959) 66,394 239,777 (31,166) (65,769) 142,842 18,963 (5,386) (13,577)	$
		509,089 (205,477) -
		303,612
		138,530 (1,555) -
		136,975
		18,963 (4,641) -
	-	14,322
	209,236	454,909

A provision of $330,305 has been recognised for the assets held by the businesses sold post period end. These assets are no longer used to generate income and on this basis, are impaired and should be written down.

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7 INTANGIBLE ASSETS

Intangible assets – rent roll Less accumulated amortisation Opening balance Acquisition/(Sale) of rent roll Less amortisation Transfer to non-current asset held for sale (i)		- - - 430,989 (260,783) - (170,206) -	460,567 (29,578)
			430,989
			- 460,567 (29,578) -
			430,989

• (i) On 15 September 2017, the Company announced the sale of its property management rent roll business, conducted through the subsidiary Capitol Asset Management Pty Ltd. As a result, at half-year end, the Company reflects the Intangible assets – rent roll as a non-current asset held for sale.

Under the terms of the sale, ServTech was entitled to receive 80% of the relevant purchase price on or before 1 October 2017 (Settlement Date) with 20% of the purchase price to be held over to account for non-retained properties during the sale transition process. The final adjustment date will occur six months after the Settlement Date. To date, the Company has banked total proceeds of ~$650,000 with the retention amount of ~$130,000 due to be received in March 2018.

15

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

PAYABLES CURRENT Trade and other payables NON-CURRENT Trail commission payables PROVISIONS CURRENT Provision for redundancy Provision for annual leave Provision for onerous lease commitments NON-CURRENT Provision for long service leave Provision for onerous lease commitments INTEREST BEARING LIABILITIES - CURRENT Convertible Notes – unsecured Finance Facility - secured	Consolidated	Consolidated	Consolidated
	As at 31 Dec 2017 $ 974,519 974,519 320,721 320,721 85,263 81,561 332,174 498,998 72,697 113,981 186,678 533,000 282,127 815,127		As at 30 June 2017
			$
			1,231,918
			1,231,918 555,078
			555,078
			- 143,504 - 143,504 72,697 -
			72,697
			- 438,321
			438,321

8 PAYABLES CURRENT Trade and other payables

9 PROVISIONS

10 INTEREST BEARING LIABILITIES - CURRENT

Terms of the borrowings

Convertible Note Agreement – During the period the Group entered into a binding convertible note agreement with Servnote Holding Pty Ltd (Servnote), a private consortium, to initially invest $500,000 cash into the Company. Servnote has the right (but not obligation) to increase the investment by an additional $500,000 for a total amount of $1 million.

To date $500,000 has been received by the Group. An additional amount of $33,000 has been recognised to account for the costs of the facility based on its terms. The key terms of the Convertible Note Agreement are:

• Conversion price the lower of $0.02 and 80% of the volume weighted average market price for shares in 5 days prior to conversion

• 6 month maturity date

• Conversion of the convertible note into shares is subject to shareholder approval

• 10% p.a. interest on value of funds advanced (which may be converted into shares at the noteholders election)

• Funds to be used for general working capital

• Secured by a fixed charged over the Company’s assets

The Company intends to seek shareholder approval for conversion of the Note Agreement proceeds into shares.

16

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Finance facility – The Group entered into a finance facility to fund the acquisition of the intangible asset – rent roll. The external finance facility was due to expire on the 29 Nov 2019 with a floating facility rate which is approximately 5.98% at period end. With the sale of the intangible asset, this facility was repaid in full on 17 January 2018.

The facility was secured against the management rights to which it related. While the facility extended to the 29 November 2019 the financier had the right to revoke the facility at its discretion. Accordingly the Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period and the facility is classified as current.

11 ISSUED CAPITAL

(i) Share Capital Ordinary Shares	As at 31 Dec 2017 As at 30 Jun 2017 As at 31 Dec 2017 As at 30 Jun 2017
	Shares No. Shares No. $ $
	103,273,131 103,273,131 10,040,552 10,040,552

12 RESERVES Share based payment reserve Foreign currency translation reserve	Consolidated	Consolidated
	As at 31 Dec 2017 $ 601,380 2,666 604,046	As at 30 June 2017
		$
		601,380 (1,712)
		599,668

13 ACCUMULATED LOSSES Opening balance Loss for the period Closing balance	Consolidated	Consolidated
	As at 31 Dec 2017 $ (7,691,115) (3,889,688) (11,580,803)	As at 31 Dec 2016
		$
		(1,717,607) (5,973,508)
		(7,691,115)

14 EARNINGS PER SHARE Loss attributable to ordinary shareholders Weighted average number of ordinary shares Basic loss per share calculation (6mths loss / weighted avg shares)	Year Ended 31 Dec 2017 $ (3,889,688) 103,273,131 ($0.0377)	Year Ended
		31 Dec 2016
		$
		(2,524,860) 40,053,047
		($0.0630)

17

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15	SEGMENT REPORTING		SLP1		VF2		CS3		CAM4		Other		Corporate		Total
			$		$		$		$		$		$		$
	Half-Year ended 31 December 2017
	Segment Revenue		4,774,673		603,583		265,886		244,236		37,903		124,673		6,050,954
	Significant items
	Finance costs		10,319		609		2,523		9,528		1,675		44,551
	Consultants fees		18,755		1,963		3,024		34,090		8,847		278,139
	Segment net operating loss after tax		(318,917)		(137,258)		(7,352)		(107,505)		(494,702)		(2,823,954)		(3,889,688)
	Half-Year ended 31 December 2016 Segment Revenue Segment net operating loss after tax Segment assets
			3,787,771		333,220		116,157		118,467		13,306		-		4,368,921
			(991,124)		(21,007)		(6,899)		(52,624)		(131,056)		(1,322,150)		(2,524,860)
	At 31 December 2017
	At 30 June 2017 Segment liabilities		911,283		736,398		128,171		524,081		360,511		2,730,089		5,390,533
	At 31 December 2017
	At 30 June 2017		883,164		673,222		15,780		479,134		84,883		305,245		2,441,428

1 SLP: Sell Lease Property Pty Ltd 2 VF: Value Finance Pty Ltd

3 CS: Complete Settlements Pty Ltd

4 CAM: Capitol Asset Management Pty Ltd

18

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16 RELATED PARTY TRANSACTIONS

(i) Transactions with directors and key management personnel

The Group may enter into agreements for services rendered with individuals (or an entity that is associated with the individuals) during the ordinary course of business.

A number of entities associated with the directors and key management personnel have consulting agreement in place which has resulted in transactions between the Group and those entities during the period. The terms and conditions of those transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm’s length basis.

Director Transaction Mr Nick Cernotta Office rent (a) Mr Brynmor Hardcastle Legal Services (b) Mr Brett Quinn Consultancy Services (c) Mr Faldi Ismail Corporate Advisory (d) Mr Gianmarco Orgnoni Convertible note (e)	Transaction Value Outstanding Balance
	Period Ended Period Ended Period Ended Period Ended
	31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016
	$ $ $ $
	15,144 - - - 52,708 141,904 13,809 86,024 - 106,573 - - - 72,000 - 12,000 533,000 - 500,000 -

(a) An office owned by an entity of which former director Mr Cernotta is a related party was rented to the Company. This agreement ended in December 2017.

(b) A legal practice of which former director Mr Hardcastle is a director, Bellanhouse Legal, provided consulting services in connection with the operations of the Group.

(c) A company of which Mr Quinn is a director received consulting fees for services provided by Mr Quinn to the Group. On 8 February 2018, the Company announced that it Mr Quinn entered into an agreement to terminate Mr Quinn’s consultancy agreement. Subsequent to period end, in full and final settlement of all obligations under Mr Quinn’s consultancy agreement, the Company made a payment of $61,500.

(d) A corporate advisory practice of which former director Mr Ismail is a director, Otsana Capital, provided corporate advisory services in connection with the operations of the Group and received capital raising fees and a success fee in relation to the initial public offering.

(e) On 22 November 2017, the Company announced that it had entered into a binding convertible loan facility agreement with Servnote Holding Pty Ltd (Servnote), a private consortium, to invest up to $1 Million in cash into the Company. Mr Orgnoni is the sole director of Servnote. He is not a party to the private consortium investor group which Servnote was established to hold.

In addition, each of the directors received director’s fees in accordance with the terms of their respective contracts.

(ii) Loans to Directors

The following directors loans were outstanding at year end. This loan was extinguished as part of the agreement with Mr Quinn to terminate his consultancy agreement.

Mr Brett Quinn	Consolidated
	As at 31 Dec 2017	As at 30 June 2017
	$ 1,160	$
		2,095

19

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17 CONTINGENT LIABILITIES

(i) Referral Agreements

The Group has entered into referral agreements with various parties in relation to property management rights. Under the referral agreement the referrers are due deferred contingent commissions, which is the value of the rent roll generated by the Group once the following conditions are met:

• Serviced by the Group for 24 months

• A further 12 month agreement is entered into after the initial 24 month period

Any eventual referral fees paid will be capitalised as an intangible asset, being a cost directly relating to the acquisition. As the payment is contingent upon a future event (including the referrer putting the rent roll back to the Group) no provision is recognised, however the potential amounts payable are (these amounts are recorded below at face value and not discounted or adjusted for the likelihood that the requirements will be met) are as follows:

As at reporting date Within 1 year Within 1 year to 2 years	Consolidated	Consolidated
	As at 31 Dec 2017 $ 225,920 175,231 - 401,151	As at 30 June 2017
		$
		- 225,920 175,231
		401,151

(ii) Commercial Leases

The Group has entered into the following commercial leases for office accommodation:

Perth office: The property lease is a non‐cancellable lease with a 3 year term, with rent payable monthly in advance. Options exist to renew the lease at the end of the 3 year term for an additional 2 years and then for a further 2 years at the end of the first option term. On 12 February 2018, the Company entered into a sublease agreement for the Perth Office and subsequently onerous lease provision has been provided (refer to note 9).

Queensland office: The property lease is a non‐cancellable lease with a 2 year term until 19 March 2019, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by the greater of CPI or 4% per annum. An option exists to renew the lease at the end of the 2 year term for an additional 3 years. Due to the Company is scaling back operation this office has become idle and as a result onerous lease provision has been provided (refer to note 9).

Philippines office: The property lease is a non‐cancellable lease with a two term to 31 March 2019, with rent payable monthly in advance. Contingent rental provisions within the lease agreement require the minimum lease payments shall be increased by 3% per annum. The lease can be renewed subject to mutual agreement by the lessor and lessee.

Indian office: The property lease is a non‐cancellable lease with a term of 11 months and 29 days to 29 March 2018, with rent payable monthly in advance. The lease can be renewed for a further term of 11 months and 29 days subject to mutual agreement by the lessor and lessee.

Within 1 year After one year but not more than five years	Consolidated	Consolidated
	As at 31 Dec 2017 70,105 52,578 122,684	As at 30 June 2017
		365,420 434,784
		800,204

In addition, a provision for an onerous lease has been recognised to reflect the present value of future lease costs which are required to be made. The benefits expected to be generated by the lease contract are outweighed by the future costs.

20

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SERVTECH GLOBAL HOLDINGS LIMITED HALF-YEARLY REPORT FOR THE PERIOD TO 31 DECEMBER 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18 SUBSEQUENT EVENTS

On 8 February 2018, the Company announced that it and CEO/Managing Director Mr Brett Quinn had entered into an agreement to terminate Mr Quinn’s consultancy agreement. Mr Quinn also stepped down from the Company as a Director. Subsequent to period end, in full and final settlement of all obligations under Mr Quinn’s consultancy agreement, the Company made a payment of $61,500.

On 21 February 2018, the Company announced the successful completion of the transaction with The Agency. With the successful completion of this transaction, ServTech will receive $950,000 (“Consideration”) for the purchase of its real estate businesses. To date, the Company has received $250,000 of the Consideration.

Other than the above, there were no other subsequent events.

21

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D I RE C T O R S ’ D E C L A RA TI O N

In the opinion of the directors of ServTech Global Holdings Limited:

• (a) the financial statements and notes 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 2017 and of its performance for the Half-Year ended on that date; and

• (ii) complying with Australian Accounting Standards, AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• (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.

Signed in accordance with a resolution of the directors.

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Mr Bert Mondello

Chairman

Dated at Perth, Western Australia this 28[th] day of February 2018.

22

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT ASSURANCE PRACTITIONER’S REVIEW REPORT

To the members of Servtech Global Holdings Ltd

Report on the Financial Statements

We have reviewed the accompanying financial statements of Servtech Global Holdings Ltd, which comprise the consolidated statement of financial position as at 31 December 2017, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Australian Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Assurance Practitioner’s Responsibility

Our responsibility is to express a conclusion on the accompanying financial statements. We conducted our review in accordance with Standard on Review Engagements ASRE 2400, Review of a Financial Report Performed by an Assurance Practitioner Who is not the Auditor of the Entity . ASRE 2400 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This Standard also requires us to comply with relevant ethical requirements.

A review of financial statements in accordance with ASRE 2400 is a limited assurance engagement. The assurance practitioner performs procedures, primarily consisting of making enquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with Australian Auditing Standards. Accordingly, we do not express an audit opinion on these financial statements.

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 Servtech Global Holdings Limited 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 2017 and of its performance for the half-year ended on that date; and

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

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

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Emphasis of matter - Material uncertainty related to going concern

We draw attention to Note 1(iii) in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. Our conclusion is not modified in respect of this matter.

BDO Audit (WA) Pty Ltd

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Wayne Basford Director

Perth, 28 February 2018