Reckon : Update on de-merger and dividend in specie

ASX Announcement

Reckon Limited (ACN 003 348 730) 30 June 2017

• DIVIDEND IN SPECIE

  • DEMERGER

• AIM IPO OF THE DOCUMENT MANAGEMENT BUSINESS

  • POSSIBLE PRO RATA RIGHTS ISSUE

On 17 March 2017, Reckon Limited (Reckon) announced its intention to demerge Reckon's Document Management segment (DMS business) under an independent company, GetBusy Plc (GetBusy), with shares admitted to trading on AIM, a market operated and regulated by the London Stock Exchange (AIM).

The demerger will be implemented through an In-Specie Distribution of GetBusy shares to Reckon shareholders.

The board is pleased to announce that it has today determined to proceed with an intended conditional dividend of an estimated AU$26 million from retained earnings, based on the expected net asset value of the DMS business at the time of the de-merger.

The In-Specie Distribution is conditional upon, and will take effect from, the admission of GetBusy to AIM, which is expected to occur on or around early August 2017.

If unconditional, Reckon will satisfy the dividend by distributing shares in GetBusy to Reckon shareholders on a one for three basis.

Reckon shareholders recorded in the share register on the record date will be entitled to participate in the In-Specie Distribution. The record date is expected to be formally announced to the ASX in the next 5 to 10 business days.

Reckon shareholders do not need to do anything or to pay anything for the GetBusy shares that

they will receive.

Ineligible foreign shareholders (that is shareholders whose addresses are shown in the share register at the record date as being in a jurisdiction outside Australia, New Zealand and the United Kingdom) will have their shares sold by GetBusy's UK broker for the best available price and the ineligible foreign shareholders will receive cash in lieu of the GetBusy shares they would have otherwise been entitled to.

Reckon proposes to charge the entire amount of the in-specie distribution to its retained earnings account and is in the process of seeking confirmation from the Australian Taxation Office (ATO) of the tax consequences for Australian resident shareholders. This will also be the subject of a formal Class Ruling by the Commissioner of Taxation which will provide those shareholders with relevant certainty.

At this point, Reckon expects that the Commissioner of Taxation will make a determination that there should be no capital gains tax (CGT) event for shareholders and that:

• 2% of the value of the In-Specie Distribution will be treated as an assessable de-merger dividend;

• 98% of the value will be treated as a non-assessable de-merger dividend.

In addition, shareholders will need to apportion the tax cost base of their existing Reckon shares across their existing Reckon shares and their new GetBusy shares based upon their relative market values

The final tax treatment will be confirmed as part of a Class Ruling.

Reckon will implement the re-organisation of its DMS business via a series of asset and share sales such that the DMS business will be held by GetBusy. Daniel Rabie, presently COO of Reckon Limited, will be appointed CEO of GetBusy.

GetBusy will require additional working capital of £3 million (AU$5.1 million) that will amongst other things support product development, particularly of a proposed new product referred to as SCIM (Secure Communication and Information Management).

The boards of Reckon and GetBusy are currently considering raising these funds by way of a pro rata non-renounceable rights issue of GetBusy shares to Reckon Shareholders, which would be fully underwritten by Reckon directors, Clive Rabie, and Greg Wilkinson, and Reckon COO, Daniel Rabie. It is expected that a final decision on the capital raising will be made prior to the formal announcement of the record date for the overall proposal, and the details released to ASX at that time.

If the admission of GetBusy to AIM does not proceed, the In Specie Distribution and capital

raising will not take place.

Reckon shareholders will receive an explanatory statement (which may take the form of an Australian prospectus if the rights issue proceeds) together with an AIM Admission document setting out the detailed information relating to GetBusy's proposed admission of its shares to trading on AIM.

This documentation will be released to ASX at the time of formal announcement of the record date, and then sent to shareholders on or around 5 business days after that announcement.

Attached to this announcement is a set of slides intended for presentation to institutional investors in the UK in the week commencing 3 July 2017.

For further information, please contact:

Mr Clive Rabie Group CEO Reckon Limited [phone]

Mr Chris Hagglund

CFO

Reckon Limited [phone]

Presentation

June 2017

Document Management and Productivity Software