WESTSTAR INDUSTRIAL LIMITED — Interim / Quarterly Report 2020

Feb 26, 2020

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ASX ANNOUNCEMENT

27 February 2020

WestStar Delivers Strong 1H FY20 Result

Highlights

• 1H FY20 Performance Highlights:

o Revenue: ~$33 million (1H FY19: ~$10 million) o Underlying EBITDA[1] : ~$2 million (1H FY19: ~$0.7 million) o Cash Balance[2] : ~$8 million (1H FY19: ~$3 million)

• 2H FY20 Outlook:

• Strategic acquisition of Alltype Engineering completed in January 2020

• Current combined group orderbook of $25 million

• Overhead synergies and operational cost savings to deliver $1.2 million per annum benefit to the bottom line

• Record pipeline of over $400 million in qualified tender opportunities

• Diversified customer base and pipeline across the mining & minerals, oil & gas, power, water and infrastructure sectors

• Strategic focus on revenue growth in sustaining capital projects and geographical expansion

Industrial services company WestStar Industrial Limited ( Company or WestStar ) (ASX: WSI), is pleased to present its financial results for the first half of the 2020 financial year.

1H FY20 Performance Highlights

The Company achieved record revenue of $33.3 million for the six months ended 31 December 2019, a 222% increase on the prior corresponding period and up 82% on the second half of the 2019 financial period. Net profit after tax was $0.5 million and underlying EBITDA was $2.0 million.

Six months ended 31 December	1H FY20	1H FY19
Revenue $M	33	10	222%
Underlying EBITDA $M	2.0	0.7	185%
Cash Balance $M	8	3	202%

2H FY20 Outlook

SIMPEC’s strong performance in 1H FY20 and the recent integration of Alltype Engineering has strengthened and diversified WestStar’s order book, which is currently $25 million, the majority of which will be delivered during 2H FY20.

The integration of Alltype Engineering further extends and diversifies the company order book for the second half of FY20.

The relocation of the Company’s existing precast division to Alltype Engineering represents a cost saving of $1.2 million over the next 12 months with further synergies to be gained from consolidation of back office functions.

1 Result after adding back Interest, depreciation and extraordinary items including share-based payments and acquisition costs 2 Cash and bank guarantees

WestStar Industrial Limited | Suite 1, 437 Roberts Road, Subiaco, WA 6008 | ABN 38 119 047 693 | weststarindustrial.com.au Page 1

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The Company incurred one-off legal and due diligence costs in the half year in relation to the Alltype Engineering acquisition. Payments to suppliers and employees during the half year were also proportionately higher due to timing differences which are expected to unwind over the next half. Receipts will be bolstered by the release of retention balances and the material increase in activity from Alltype Engineering.

WestStar’s growing tender pipeline has increased substantially and now exceeds $400 million in qualified opportunities, with favourable market conditions in WestStar’s key markets expected to provide a continuing pipeline of new opportunities during 2H FY20.

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2H FY20 Order Book 2H FY20 Tender Book
by End Customer by End Customer
Oil & Gas and Oil & Gas and
Petrochemicals, 12% Petrochemicals, 38%
Mining & Minerals, 54% Mining & Minerals, 53%
Water / Infrastructure, Water / Infrastructure,
34% 9%
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WestStar CEO, Robert Spadanuda, commented:

“WestStar’s first half results reinforce its ability to safely deliver sustainable profit growth in line with our strategic objectives.

The Company’s operational focus for the second half of FY20 is to secure additional opportunities across all areas aligned with the companies enhanced capability. Through effective risk management we remain committed to a strong safety culture along with the profitable and sustainable delivery of earnings growth.

The introduction of Alltype Engineering in January 2020 allows us to harness our new asset base in order to deliver larger projects with a focus on sustaining capital and geographical expansion that fit within our risk appetite.

The current orderbook and pipeline of tender opportunities provide WestStar with increased confidence in achieving further revenue growth in 2H FY20 based on our ability to convert a qualified tender book pipeline of $400 million.”

-Ends-

For further information please contact:

Philip Re	Robert Spadanuda
Chairman	CEO
+61 8 6380 2555	+61 8 6380 2555
pre@weststarindustrial.com.au	robert@weststarindustrial.com.au

WestStar Industrial Limited | Suite 1, 437 Roberts Road, Subiaco, WA 6008 | ABN 38 119 047 693 | weststarindustrial.com.au Page 2

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About WestStar

WestStar Industrial Limited (ASX: WSI) is an industrial, steel fabrication, installation and maintenance services company focussed on the resources, oil and gas, water and infrastructure sectors.

About SIMPEC

SIMPEC delivers high quality construction and engineering services with specialisation in structural mechanical and piping (SMP), electrical and instrumentation (E&I), concrete products and civil Services. For more information: www.simpec.com.au

About Alltype Engineering

Alltype Engineering leverages off its fabrication capability and provides complete project solutions including SMP and E&I site installation, construction and maintenance services, across almost every industry in Australia. Alltype’s products and services have been delivered and installed state-wide, nationally and internationally through our workshops and sites and can be found on land, offshore on islands, FPSO’s and platforms, below ground and even subsea. Supported by its team of experienced multi-disciplinary project personnel, Alltype delivers consistent quality products and services that underpin its commitment to its vision “to be recognised as the preferred partner in delivering integrated fabrication, site and maintenance services with reliable, innovative and cost-effective solutions”. For more information: www.alltypeengineering.com.au

ASX release authorised by the Board of Directors of WestStar Industrial Limited.

WestStar Industrial Limited | Suite 1, 437 Roberts Road, Subiaco, WA 6008 | ABN 38 119 047 693 | weststarindustrial.com.au Page 3

WestStar Industrial Limited Appendix 4D Half-year report

1. Company details

Name of entity: WestStar Industrial Limited ABN: 38 119 047 693 Reporting period: For the half-year ended 31 December 2019 Previous period: For the half-year ended 31 December 2018

2. Results for announcement to the market

	HY 31 Dec	HY 31 Dec	Up/Down	Change	Change
	2019	2018
	$	$		$	%
Revenues from ordinary activities	33,260,051	10,333,281	Up	22,926,770	222%
Profit/ (Loss) from ordinary activities after
tax attributable to the owners of WestStar
Industrial Limited	495,616	(410,584)	Up	906,200	221%
Profit/ (Loss) for the half-year attributable
to the owners of WestStar Industrial
Limited	495,616	(410,584)	Up	906,200	221%

Dividends

WestStar Industrial Limited did not declare a dividend during the current reporting or corresponding previous reporting period.

Comments

The profit after tax for the half-year ended 31 December 2019 was $495,616 (31 December 2018 loss: $410,584).

Revenue for the Group was $33,260,051 for the six months ending 31 December 2019, representing the Group’s highest ever recorded half-year revenue result and an increase of more than 222% over the prior corresponding period (31 December 2018: revenue of $10,333,281).

The Group incurred an after-tax profit attributed to members of $495,616 for the half year ending 31 December 2019 (31 December 2018: loss of $410,584). The Group again delivered a strong operational result with ~$30M of contracts awarded to it during the half year. SIMPEC delivered the bulk of this result, continuing to prove a valuable partner to its clients on site.

Subsequent to the end of the reporting period, the Group completed the acquisition of Alltype Engineering Pty Ltd. Alltype is a compelling acquisition for WestStar, providing scale and diversification with a substantial increase in revenues and earnings.

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 0.52	Previous period Cents (0.08)

Page | 1

WestStar Industrial Limited Appendix 4D Half-year report

4. Control gained over entities

Not applicable.

5. Loss of control over entities

Not applicable.

6. Details of associates and joint venture entities

	Reporting entity's	Reporting entity's		Contribution	to profit/(loss)
	percentage holding			(where	material)
	Reporting	Previous		Reporting	Previous
	period	period		period	period
Name of associate / joint venture	%	%		$'000	$'000
None		-	-	-	-

7. Audit qualification or review

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

The 2019 Half-Year report is based upon accounts that were reviewed by the Company’s auditor and are not subject to a modified opinion.

8. Attachments

Details of attachments (if any):

The Interim Report of WestStar Industrial Limited for the half-year ended 31 December 2019 is attached.

9. Signed

______ Date: 27 February 2020

Philip Re Director

Page | 2

ABN 38 119 047 693

Financial Report for the Half-year Ended 31 December 2019

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Contents Directors’ Report Auditor’s Independence Declaration Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Condensed Consolidated Statement of Financial Position Condensed Consolidated Statement of Cash Flows Condensed Consolidated Statement of Changes in Equity Notes to the Condensed Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Review Report

Page 3 6 7 8 9 10 11 17 18

CORPORATE DIRECTORY

Directors

Mr Philip Re (Non-Executive Chairman) Mr Bert Mondello (Non-Executive Director) Mr Lay Ann Ong (Non-Executive Director)

Company Secretary

Mr Derek Hall

Share Registry

Automic Registry Services Pty Ltd Level 1 7 Ventnor Ave, West Perth WA 6005 Telephone: + 618 9324 2099 Facsimile: + 618 9321 2337

Registered Office

Suite 1, 437 Roberts Road Subiaco WA 6008 Telephone: +61 8 6380 2555 Facsimile: +61 8 9381 1122

Website

Auditors

Criterion Audit Pty Ltd PO Box 2138 Subiaco WA 6008

Stock Exchange

Australian Securities Exchange (Home Exchange: Perth, Western Australia)

www.weststarindustrial.com.au

ASX Code

WSI

2

WestStar Industrial Limited

DIRECTORS’ REPORT

The Directors of WestStar Industrial Limited submit the financial report of WestStar Industrial Limited (“the Company”) and its controlled entities (“the Group” or “Consolidated Entity”) for the half-year ended 31 December 2019. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

DIRECTORS

The names of directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mr Philip Re Non-Executive Chairman Mr Bert Mondello Non-Executive Director Mr Lay Ann Ong Non-Executive Director

RESULTS OF OPERATIONS

Revenue for the Group was $33,260,051 for the half year ending 31 December 2019, representing the Group’s highest ever recorded half year revenue result and an increase of more than 225% over the prior corresponding period (31 December 2018: revenue of $10,333,281). This result builds on the Company’s record revenue and maiden net profit in the FY2019 year, establishing a track record of growing turnover and profitability.

The Group posted an after-tax profit attributed to members of $495,616 for the half year ending 31 December 2019 (31 December 2018: loss of $410,584). Several non-cash expenses are recorded in the Company’s accounts. Adding these items back further demonstrates the Company’s focussed and responsible growth trajectory.

	Half-year ended
	31 December 2019
	$
Profit after income tax expense	495,616
Add back:
Share based payment expense	1,167,690
Interest costs	154,773
Depreciation	56,522
Debtor and impairment provisions	50,437
Due diligence and acquisition costs	102,351
Underlying EBITDA*	2,027,389

*Underlying EBITDA is an unaudited, non-AIFRS financial measure which is not prescribed by Australian Accounting Standards (‘AAS’)

REVIEW OF OPERATIONS

Operations

The Group again delivered a strong operational result with ~$30M of contracts awarded to it during the half year. SIMPEC delivered the bulk of this result, continuing to prove a valuable partner to its clients on site.

SIMPEC operations

During the half year, SIMPEC was two significant new contracts:

• a $5M contract at Fortescue’s (FMG) Eliwana Mine and Rail Project with Energy Power Systems Australia;

• a $5M contract direct with Tianqi Lithium Kwinana (“TLK”) at the Tianqi Lithium LHPP1 process plant in Kwinana, Western Australia.

The contract award at FMG’s Eliwana Mine deepens SIMPEC’s exposure to WA’s significant iron ore projects. With this award SIMPEC has contracts across each of BHP (South Flank), Rio Tinto (West Angelas Mine and Cape Lambert Port Facility) and now FMG.

The FMG contract also represents SIMPEC’s first full vertical installation package – comprising of Civil, Structural, Mechanical, Piping, Electrical and Instrumentation works - (SIMPEC as the true acronym). Under the contract, SIMPEC will supply (partially), install, test and commission the 25 Mega Watt Diesel Power Generation facilities for the Fortescue Eliwana Mine and Rail Project. The contract commenced and was a significant focus during the half year with completion scheduled in July 2020.

3

WestStar Industrial Limited

SIMPEC’s contract award directly with TLK at the Tianqi Lithium LHPP1 process plant is another first for SIMPEC with previous contracts at this project completed as a subcontractor. Under the contract, SIMPEC will supply SMP and E&I completions and commissioning support services for the stage 1 processing plant assisting TLK with the handover of the plant to operations.

In addition to these new contracts, SIMPEC was awarded scope extensions to its current contracts in excess of $18M. These extensions represent a strong endorsement of SIMPEC as a capable engineering contractor.

Along with its existing work scope at the Tianqi Lithium LHPP1 process plant, during the half year SIMPEC was mobilised at Rio Tinto’s West Angelas Mine and FMG’s Eliwana camp with ATCO Structures and Logistics and with Rio Tinto at the Cape Lambert Port Facility.

SIMPEC also continued its strong tendering activities with further contract decisions expected and announcements to be made in this regard in due course.

Corporate

During the half year, the Company announced that it has executed a Share Sale Agreement (“Share Sale Agreement”) to acquire 100% of Alltype Engineering Pty Ltd (“Alltype”) in a fully funded and all-scrip transaction.

Established in 1985 and with a current workforce of around 120 personnel, Alltype is a leading provider of workshop fabrication, site installation, construction and maintenance services to the Oil & Gas, Water, Power Generation, Infrastructure, Mining, Resources, Utility, Petrochemical and Defence industries, in both the private and public sectors across Australia.

Alltype’s head office and state-of-the-art manufacturing facilities are located in Naval Base, Western Australia, providing excellent proximity to rail, road and port transport infrastructure and ready access to supply chain support and services. Alltype has a long track record of sustainable earnings and in FY19 delivered revenue of $29.8M and FY19 EBITDA of ~$2.0M.

Alltype is a compelling acquisition for WestStar, providing scale and diversification with a substantial increase in revenues and earnings. The all-scrip consideration proposed consisted of ~$5.9M upfront consideration and deferred consideration of Shares in the Company, subject to Alltype achieving FY20 EBITDA targets, with both tranches escrowed 12 months from issue

On 24 December 2019, Shareholders approved the transaction and the issue of up to 329,294,000 upfront consideration shares and up to 243,387,647 deferred consideration shares.

Subsequent to the half-year end, the Company completed the acquisition of Alltype with all conditions precedent met or waived through the issue of 237,091,680 upfront consideration shares in the Company to the vendors of Alltype based on a VWAP calculation.

Due to these corporate activities, the Company incurred one off expenses for due diligence, legal and corporate advisory costs. The Company also incurred costs in finalising an exit of its leased operational facility in Kwinana with a view to consolidating those operations into one at Alltype’s state-of-the-art facility, located in Naval Base, Western Australia. Synergies and cost savings from these efforts are expected to be realised over the coming months.

Ultimately, Alltype is highly complementary to WestStar’s existing operations, providing meaningful opportunities for vertical integration and cross selling across an enlarged customer base. The newly combined Group will target continued diversification across complimentary market segments and expansion into key geographical areas.

4

WestStar Industrial Limited

DIRECTORS’ REPORT

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

On 28 January 2020, the Group announced the completion of the acquisition of Alltype Engineering Pty Ltd (“Alltype”) with all conditions precedent met or waived through the issue of 237,091,680 fully paid ordinary shares in the Company to the vendors of Alltype.

Other than the above, there are no other significant events subsequent to balance date.

AUDITOR INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Criterion Audit Pty Ltd, to provide the directors of the company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 6 and forms part of this directors’ report for the half-year ended 31 December 2019.

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

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Philip Re Director

Perth, Western Australia 27 February 2020

5

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Criterion Audit Pty Ltd

ABN 85 165 181 822

PO Box 2138 SUBIACO WA 6904 Suite 1 GF, 437 Roberts Road SUBIACO WA 6008

Phone: 6380 2555 Fax: 9381 1122

To The Board of Directors

Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

As lead audit director for the review of the financial statements of WestStar Industrial Limited and its controlled entities for the half year ended 31 December 2019, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• any applicable code of professional conduct in relation to the review.

Yours faithfully

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CHRIS WATTS CA Director

CRITERION AUDIT PTY LTD

DATED at PERTH this 27[th ] day of February 2020

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‘Liability limited by a scheme approved under Professional Standards Legislation’

WestStar Industrial Limited

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for the half-year ended 31 December 2019

Note Revenue 3 Cost of goods sold Other income 3 Distribution expenses Occupancy expenses Depreciation Employment expenses Administration expenses Insurance Impairment of intangibles Finance costs Doubtful debts expense Share based payments expense 9,10 Expenses Profit/ (Loss) before income tax Income tax expense Profit/ (Loss) after income tax Other Comprehensive Income Items that may be reclassified to profit or loss Other comprehensive loss, net of tax Total comprehensive income / (loss) Earnings / (loss) per share Basic and diluted (loss)/earnings per share (cents)	31 December 2019 $	31 December 2018 $*
	33,187,523 (28,934,176)	10,283,478 (8,338,489)
	4,253,347 72,528 (74,806) (321,526) (56,522) (1,486,372) (317,494) (200,639) - (154,773) (50,437) (1,167,690)	1,944,989 49,803 (73,987) (290,945) (71,052) (1,048,787) (727,604) (134,602) 950,829 (92,081) (279,648) (637,499)
	(4,149,278)	(2,405,376)
	495,616 -	(410,584) -
	495,616	(410,584)
	-	-
	-	-
	495,616	(410,584)
	0.08	(0.09)

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

*Period ended 31 December 2018 re-presented to include the reversal of goodwill impairment occur during the period (Note 2(d)).

7

WestStar Industrial Limited

Condensed Consolidated Statement of Financial Position

As at 31 December 2019

Note ASSETS Current Assets Cash and cash equivalents Trade and other receivables 4 Stock on hand Other assets 5 Total Current Assets Non-Current Assets Trade and other receivables 4 Bank guarantees Property, plant & equipment Loans receivable Intangible Assets 2(d) Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables 7 Provisions Borrowings 8 Other liabilities 6 Total Current Liabilities Total Liabilities Net Assets / (Liabilities) EQUITY Issued capital 9 Reserves 10 Accumulated losses Total Equity / (Deficiency)	31 December 2019 $ 7,645,624 6,199,931 7,131 4,430,354 18,283,040 727,021 168,933 307,312 818,995 992,198 3,014,459 21,297,499 10,564,525 314,102 882,050 5,142,169 16,902,848 16,902,846 4,394,653 13,884,376 772,495 (10,262,218) 4,394,653	30 June 2019 $
		10,068,300 6,081,759 15,933 5,835,136
		22,001,129
		- 395,313 353,914 780,524 992,198
		2,521,949
		24,523,078
		10,985,353 273,716 882,011 9,650,651
		21,791,731
		21,791,731
		2,731,347
		13,004,376 484,805 (10,757,834)
		2,731,347

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

8

WestStar Industrial Limited

Condensed Consolidated Statement of Cash Flows

for the half-year ended 31 December 2019

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest paid Net cash flows used in operating activities Cash flows from investing activities Receipt (Payment) for investment in term deposit / bank guarantee Purchase of property, plant & equipment Net cash flows provided by/(used in) investing activities Cash flows from financing activities Proceeds from borrowings Loans to related parties Repayment of borrowings Net cash provided by/(used in) financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at the end of the period	31 December 2019 $ 29,145,517 (31,600,833) 9,384 (154,773) (2,600,705) 226,380 (9,919)	31 December 2018 $
		8,404,430 (7,982,481) 2,915 (92,081)
		332,783
		30,362 (33,230)
	216,461	(2,868)
	- (38,471) 39 (38,432) (2,422,676) 10,068,300 7,645,624	650,000 (6,750) (220,019)
		423,231
		753,146 1,711,826
		2,464,972

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

9

WestStar Industrial Limited

Condensed Consolidated Statement of Changes in Equity

for the half-year ended 31 December 2019

At 1 July 2019 Profit/(loss) for the half-year Other comprehensive income Total comprehensive loss for the half-year Transactions with owners in their capacity as owners Issue of shares for SIMPEC earn-out Issue of shares to related party for services rendered Recognition of share-based payments Transactions with owners in their capacity as owners Balance at 31 December 2019	Issued capital $ Accumulated losses $ Share based payment reserve $ Total $
	13,004,376 (10,757,834) 484,805 2,731,347
	- 495,616 - 495,616 - - - -
	- 495,616 - 495,616 550,000 - - 550,000 330,000 - - 330,000 - - 287,690 287,690
	880,000 - 287,690 1,167,690
	13,884,376 (10,262,218) 772,495 4,394,653

At 1 July 2018 Change in accounting policies Restated balance At 1 July 2018 Profit/(loss) for the half-year Other comprehensive income Total comprehensive loss for the half-year Transactions with owners in their capacity as owners Rights conversion as issued for the acquisition of Simpec Pty Limited Transactions with owners in their capacity as owners Balance at 31 December 2018	Issued capital $ Accumulated losses $ Share based payment reserve $ Total $
	10,162,478 (11,439,911) 821,045 (456,388)
	- (496,479) - (496,479)
	10,162,478 (11,936,390) 821,045 (952,867)
	- (410,584) - (410,584) - - - -
	(410,584) - (410,584) 637,499 - - 637,499
	637,499 - - 637,499
	10,799,977 (12,346,974) 821,045 (725,952)

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

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WestStar Industrial Limited

Notes to the Condensed Consolidated Financial Statements

for the half-year ended 31 December 2019

1. Corporate

The consolidated half-year financial report of WestStar Industrial Limited (“the Company”) and its controlled entities (“the Group” or “Consolidated Entity”) for the half-year ended 31 December 2019 was authorised for issue on 27 February 2020 in accordance with a resolution of the directors on 27 February 2020.

WestStar Industrial Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Group are described in the Directors’ Report.

2. Basis of Preparation and Accounting Policies

(a) Basis of preparation

These general purpose condensed financial statements for the half-year ended 31 December 2019 have been prepared in accordance with Australian Accounting Standard 134 Interim Financial Reporting and the Corporations Act 2001. Compliance with AASB 134 ensures compliance with IAS 34 Interim Financial Reporting.

These half-year financial statements do not include all the notes of the type normally included in annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Group as the full financial statements. Accordingly, these half-year financial statements are to be read in conjunction with the annual financial statements for the year ended 30 June 2019 and any public announcements made by WestStar Industrial Limited during the half-year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The half-year report has been prepared on an accruals basis and is based on a historical cost basis, except for the revaluation of certain financial instruments to fair value.

For the purpose of preparing the half-year financial report, the half year has to be treated as a discrete reporting period. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

(b) Going Concern

This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

The Group posted a net profit after tax for the half-year ended 31 December 2019 of $495,616 (31 December 2018: net loss of $410,584). The Group had net cash outflows of $2,600,705, had Cash of $7,645,624 and a working capital surplus of $1,380,192 at 31 December 2019.

The financial report does not contain any adjustments relating to the recoverability and classification of recorded assets or to the amounts or classification of recorded assets or liabilities that might be necessary should the Group not be able to continue as a going concern. The directors have reviewed the Group’s financial position and are of the opinion that the use of the going concern basis of accounting is appropriate.

(c) Significant Accounting Policies

AASB 16 Leases

AASB 16 Leases replaces AASB 17 Leases along with three interpretations (IFRIC 4 Determining whether and Arrangement contains a Lease, SIC 15 Operating Leases-Incentives and SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease).

The adoption of this new Standard results in the recognition of a right-of-use asset and related lease liability in connection with all former operating leases except for those identified as low-value or having a remaining lease term of less than 12 months from the date of initial application.

Management has reviewed the application of AASB 16 and determined that it is not expected to have a material impact on the Group’s financial statements.

Other than the above, there is no material impact of the new and revised Standards and Interpretations on the Company and therefore no material change is necessary to Company accounting policies.

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WestStar Industrial Limited

Notes to the Condensed Consolidated Financial Statements

for the half-year ended 31 December 2019

2. Basis of Preparation and Accounting Policies (continued)

(c) Significant Accounting Policies (continued)

Revenue Recognition

Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(d) Prior Period Adjustments

On 29 December 2017, WestStar Industrial Limited acquired 100% of the ordinary share capital and voting rights in SIMPEC Pty Ltd.

If the initial accounting for a business acquisition is incomplete by the end of the reporting period in which the combination occurs, the consolidated entity reports provisional amounts for the items for which accounting is incomplete. The provisional amounts are adjusted during the measurement period on a retrospective basis by restating the comparative information presented in the financial statements. In December 2018, the Company reassessed the intangible asset value of SIMPEC as significantly above its carrying value and accordingly an impairment reversal to the value of $992,198 was recognised.

Consolidated statement of Financial Position

The total impact on the Group’s statement of Financial Position as at 31 December 2018:

	31 December 2018		Prior Period	31 December 2018
As at	Reported		Adjustment	Restated
Non-Current Assets
IntangibleAssets		-	992,198	992,198
Total assets		-	992,198	992,198
Equity
Accumulatedlosses		-	(992,198)	(992,198)
Total Equity		-	(992,198)	(992,198)

Consolidated statement of Profit or Loss and Other Comprehensive Income

The total impact on the Group’s statement of Profit or Loss and Other Comprehensive Income for the reporting period:

	31 December 2018		Prior Period	31 December 2018
As at	Reported		Adjustment	Restated
Expenses
Recognitionof intangibles		-	992,198	992,198
Total Expenses		-	992,198	992,198
**Profit / (Loss) before tax **		-	992,198	992,198

The prior period adjustment did not have any impact on the Group’s Statement of Cash Flows.

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WestStar Industrial Limited

Notes to the Condensed Consolidated Financial Statements

for the half-year ended 31 December 2019

2. Basis of Preparation and Accounting Policies (continued)

(c) Significant Accounting Policies (continued)

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Contract assets

Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes.

Contract liabilities

Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the Group has transferred the goods or services to the customer.

(d) Segment Reporting

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

3. Revenue and Other Income Revenue Revenue Sale of goods and services Other income Interest income Other income 4. Trade and Other Receivables Current Trade receivables Less Provision for doubtful debts Retentions Other receivables Prepayments Non-current Retentions 5. Other Assets Contract assets	31 December 2019 $ 31 December 2018 $ 33,187,523 10,283,478 9,384 45,809 63,143 3,994 72,528 49,803 33,260,051 10,333,281 31 December 2019 $ 30 June 2019 $ 5,572,149 5,898,577 (685,184) (636,605) 4,886,965 5,261,972 1,089,783 625,461 - 2,100 223,183 192,226 6,199,931 6,081,759 727,021 - 31 December 2019 $ 30 June 2019 $ 4,430,354 5,835,136 4,430,354 5,835,136

13

WestStar Industrial Limited

Notes to the Condensed Consolidated Financial Statements

for the half-year ended 31 December 2019

6. Other Liabilities Contract liabilities 7. Trade and Other Payables Trade payables Sundry creditors and accruals 8. Borrowings Loan from related parties (i) Financing facility (ii)	31 December 2019 $ 30 June 2019 $ 5,142,169 9,650,651 5,142,169 9,650,651 31 December 2019 $ 30 June 2019 $ 8,152,881 7,617,598 2,411,644 3,367,755 10,564,525 10,985,353 31 December 2019 $ 30 June 2019 $ 232,050 232,011 650,000 650,000 882,050 882,011

(i) Loan from WestStar Precast Pte Ltd, an entity associated with a Non-Executive Director, Lay Ann Ong. The loan is unsecured with no interest payable.

(ii) On 12 December 2018, the Company advised that it had received commitments for an unsecured working capital facility of up to $1 million. As at period end, the facility had been drawn down to $650,000. The facility bears interest at 10% p.a. As the facility term was for one year, the Company renegotiated with the lenders to roll the facility over for an additional year.

9. Issued Capital

(a) Issued and paid up capital

Ordinary shares fully paid (b) Movements in shares on issue Movements in ordinary shares on issue Opening balance Details of the Company shares issued during the period: Rights conversion for acquisition of SIMPEC Placement to sophisticated investors Shares issued for SIMPEC earn-out (i) Shaers issued to related party for services rendered (ii) Closing balance	31 December 2019 $ 30 June 2019 $ 13,884,376 13,004,376 6 months to 31 December 2019 Year to 30 June 2019 No. $ No. $ 615,754,616 13,004,376 458,254,616 10,162,478 - - 37,500,000 637,499 - - 120,000,000 2,204,399 25,000,000 550,000 - - 15,000,000 330,000 - - 40,000,000 880,000 157,500,000 2,841,898 655,754,616 13,884,376 615,754,616 13,004,376	31 December 2019 $ 30 June 2019 $ 13,884,376 13,004,376

(i) During the period, 25,000,000 shares at $0.022 have been issued to SIMPEC upon achievement of EBITDA based KPIs

(ii) On 29 November 2019, the Company issued 15,000,000 shares at $0.022 to a related party for services rendered.

14

WestStar Industrial Limited

Notes to the Condensed Consolidated Financial Statements

for the half-year ended 31 December 2019

9. Issued Capital (continued)

(c) Share options

During the period, the Company issued 30,000,000 options to advisor for services rendered, with an exercise price of $0.04 and an expiry of three years from issue date.

The fair value at grant date of the options issued has been determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The total share based payment expense for the period ended 31 December 2019 was $287,690 (2018: $nil).

10. Reserves

The share based payment reserve is used to record the value of share based payments provided to directors and employees, including Key Management Personnel and suppliers which are not recorded directly in equity.

Share based payment reserve Movements in share based payment reserve Opening balance Recognition of share-based payments (9(c)) Transfer of expired options value Closing balance	31 December 2019 $ 30 June 2019 $ 772,495 484,805
	484,805 821,045 287,690 - - (336,240) 772,495 484,805

11. Contingent Liabilities & Commitments.

Operating lease commitments

Non-cancellable operating lease contracted for but not capitalised in the financial statements and are payable:

Within One Year After one year but not more than five years 12. Segment Information	31 December 2019 $ 30 June 2019 $ - 185,795 - -
	- 185,795

Management has determined the operating segments based on reports reviewed by the Board of Directors for making strategic decisions. The current Board of Directors monitors the business based on operational and geographic factors and have determined that there is three relevant businesses segment being:

Precast Australia, which provides prefabricated concrete construction services to the construction and resources sectors in Australia.

SIMPEC, which is a construction contractor with specialist experience in both Structural Mechanical and Piping, Electrical and Instrumentation works.

Distinct Development, which addresses small to mid-size mixed-use property projects, a niche in the local market.

15

WestStar Industrial Limited

Notes to the Condensed Consolidated Financial Statements

for the half-year ended 31 December 2019

12. Segment Information (continued)
Segment reporting	Precast	SIMPEC	Distinct	Group
	$	$	$	$
Half-year ended 31 December 2019
Segment revenue	2,696,202	30,491,321	-	33,187,523
Segment expense	(3,423,593)	(27,835,683)	(2,281)	(31,261,557)
Segment operating loss	(727,390)	2,655,638	(2,281)	1,925,966
Other Income				72,528
Corporate & administration				(1,502,878)
Net operating Profit (Loss) after Tax				495,616
Half-year 31 December 2018
Segment revenue	2,753,162	7,530,315	41,369	10,324,846
Segment expense	(1,395,671)	(6,782,895)	(43,067)	(8,221,633)
Segment operating loss	1,357,491	747,420	(1,698)	2,103,213
Other Income				8,436
Corporate & administration				(2,522,233)
Net operating Profit (Loss) after Tax				(410,584)
Segment reporting	Precast	SIMPEC	Distinct	Group
	$	$	$	$
Half-year ended 31 December 2019
Segment assets	1,602,200	17,036,965	750,791	19,389,956
Segment liabilities	(2,503,629)	(13,243,780)	-	(15,747,409)
Segment asset & liabilities	(901,429)	3,793,185	750,791	3,642,547
Cash and corporate assets				1,907,543
Corporate liabilities				(1,155,438)
Total asset & liabilities				4,394,652
Year ended 30 June 2019
Segment assets	2,588,418	15,659,884	752,872	19,001,174
Segment liabilities	(2,812,594)	(17,633,049)	-	(20,445,643)
Segment asset & liabilities	(224,176)	(1,973,165)	752,872	(1,444,469)
Cash and corporate assets				5,521,904
Corporate liabilities				(1,346,088)
Total asset & liabilities				2,731,347

The Group is domiciled in Australia. All revenue from external customers is generated from Australia only. Segment revenues are allocated based on the country in which the customer is located.

13. Financial Instruments

At 31 December 2019, the carrying value of all financial assets and liabilities is considered to approximate their fair values. The held for trading assets are recognised at fair value and have been classified as level 1 financial assets based on quoted prices in active markets. There were no transfers between levels during the half-year.

14. Events after Reporting Date

On 28 January 2020, the Group has completed the acquisition of Alltype Engineering Pty Ltd (“Alltype”) with all conditions precedent met or waived through the issue of 237,091,680 shares.

Other than the above, there are no other significant events subsequent to balance date.

16

WestStar Industrial Limited

Director’s Declaration

for the half-year ended 31 December 2019

In the opinion of the directors of WestStar Industrial Limited (‘the company’):

1. The financial statements and notes thereto, are in accordance with the Corporations Act 2001 including:

2. a. complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

3. b. giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its performance for the half-year then ended.

4. There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable subject to the matters set out in Note 2(b).

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of the Corporations Act 2001.

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Philip Re Director

Perth, Western Australia 27 February 2020

17

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Criterion Audit Pty Ltd ABN 85 165 181 822 PO Box 2138 SUBIACO WA 6904 Suite 1 GF, 437 Roberts Road SUBIACO WA 6008

Independent Auditor’s Review Report

Phone: 6380 2555 Fax: 9381 1122

To the Members of WestStar Industrial Limited

We have reviewed the accompanying half-year financial report of WestStar Industrial Limited (“the Company”) and Controlled Entities (“the Consolidated Entity”) which comprises the consolidated statement of financial position as at 31 December 2019, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration of the Consolidated Entity, comprising the Company and the entities it controlled during the half-year.

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 control as the directors determine is 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 2019 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 Weststar Industrial Limited, 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.

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‘Liability limited by a scheme approved under Professional Standards Legislation’

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the halfyear financial report of WestStar Industrial Limited and Controlled Entities 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 2019 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.

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CRITERION AUDIT PTY LTD

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CHRIS WATTS CA Director

DATED at PERTH this 27[th] day of February 2020