MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
INDEX
Page Number
Corporate Directory
Directors’ Report
Statement of Corporate Governance
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Auditor independence declaration
Independent Auditor’s Report
ASX Additional Information
3
4
18
19
21
22
24
25
56
57
58
60
Page 2 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CORPORATE DIRECTORY
Board of Directors
Mr David Shein
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Don Francis Nanayakkara
Company Secretary
Brad Cohen
Non Executive Chairman
Executive Director and Chief Executive Officer
Executive Director and Chief Operating Officer
Executive Director
Non Executive Director
Non Executive Director
Non Executive Director
Executive Director (appointed 20 May 2016)
Auditors
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
Solicitors
Thomson Geer
Level 25, 1 O’Connell Street
Sydney NSW 2000
Bankers
Westpac Banking Corporation
94 Church Street
Middle Brighton VIC 3186
St George Bank
Locked Bag 1
Kogarah NSW 1485
Registered Office
5a, 2 New McLean Street
Edgecliff NSW 2027
Share Registry
Link Market Services Limited
Level 4 Central Park 152 St Georges Terrace
PERTH WA 6000
Investor Enquiries:
Facsimile:
1300 554 474
+61 2 9287 0303
Stock Exchange Listing
Securities of MOQ Limited are listed on the Australian Securities Exchange (ASX).
ASX Code: MOQ
Website
www.MOQ.com.au
Page 3 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT
Your directors present their report on the consolidated entity (referred to herein as the “Group”) consisting of MOQ Limited
(formerly Montech Holdings Limited) (“Company”) and its controlled entities for the financial year ended 30 June 2016.
The information in the proceeding operating and financial review forms part of this directors’ report for the financial year
ended 30 June 2016 and is to be read in conjunction with the following information.
General Information
Officers and Directors
The names and particulars of the Directors during or since the end of the financial year are:
Name
Mr David Shein
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Don Francis Nanayakkara(1)
Particulars
Non Executive Chairman
Executive Director and Chief Executive Officer
Executive Director and Chief Operating Officer
Executive Director
Non Executive Director
Non Executive Director
Non Executive Director
Executive Director
(1) Don Nanayakkara was appointed to the Board on 20 May 2016.
The above named Directors held office during and since the financial year, except as otherwise indicated.
Particulars of each director’s experience and qualifications are set out later in this report.
Meetings of Directors
During the financial year, 15 meetings of directors (including committees of directors) were held:
Director
Mr David Shein
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Don Francis Nanayakkara
Board Member Since
17 February 2014
29 May 2015
29 May 2015
29 May 2015
17 February 2014
17 February 2014
17 February 2014
20 May 2016
Eligible
12
12
15
12
12
15
15
1
Attended
12
11
13
12
9
15
14
1
Information Relating to Directors and Company Secretaries
David Shein
David established Com Tech Communications with $10,000 capital, and built it up to annual revenues of $700m,
profits of $40m and 1,400 employees in 2001 when it was acquired by Dimension Data. During his tenure, Com Tech
was voted the second best company to work for in Australia and the bulk of the management team recruited by David
remains in place at the company. Over the past 15 years, David has been involved in investing in and managing a
number of start-up and early stage technology companies, many of which have been successfully exited including
Macromatix, a provider of specialist cloud based retail software solutions with offices in Australia and US. Macromatix
was sold to US based TPG Ventures in 2012. David actively mentors management teams including his role as
Non-Executive Chairman of Centric Wealth which was owned by CHAMP Private Equity and recently successfully
sold to Findex.
Page 4 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Some of the other companies that David mentors and where he has an investment include Pocketbook (sold to Zip-
Money), CalReply, Clipp (sold to Mobile Embrace), Assetic, OneBigSwitch, ZipMoney (listed on ASX), RangeMe,
Admyt, Latam Auto (listed on ASX), Simpology and OurCrowd. David is involved in building companies that are
genuinely committed to customer and staff satisfaction.
Interests in shares and options:
Other current directorships:
Former Directorships in last three years:
Special responsibilities:
4,083,335 fully paid ordinary shares
None
None
None
Michael Pollak (Non-Executive Director)
Michael holds a bachelor of Commerce is a chartered accountant and has an MBA in strategy from the Australian
Graduate School of Management. Michael commenced his career at PricewaterhouseCoopers over 15 years ago. Mi-
chael has gained valuable experience in both Sydney and London in general management, audit, insolvency, corporate
advisory and strategy across a wide range of industries, including financial services, professional services, retail,
mining and manufacturing. Michael is currently a director of ASX-listed HJB Corporation Limited (ASX:HJB) and
UCW Limited (ASX:UCW), and was previously a director of Rhipe Limited (ASX:RHP), Disruptive Investment
Group Limited (ASX:DVI), Prospect Resources Limited (ASX:PSC) and Metalicity Limited (ASX:MCT), being
companies he recapitalised. In addition to these, Michael has been involved in the restructuring, recapitalisation and
relisting of a number of other ASX listed entities.
Interests in shares and options:
Other current directorships:
1,980,000 fully paid ordinary shares; and
900,000 unlisted options exercisable at $0.10 per option on or before 30 June
2017.
HJB Corporation Limited (Non-Executive Director)
UCW Limited (Non-Executive Director)
Former Directorships in last three years: Disruptive Investment Group Limited (Non-executive director)
Special responsibilities:
rhipe Limited (Non-Executive Director)
Metalicity Limited (Non-Executive Director)
Prospect Resources Limited (Non-executive director)
Chair of Audit and Risk Committee
Joseph Fridman (Non-Executive Director)
Joseph is the co-founder and Chief Executive Officer of Monash Private Capital Pty Limited, a Sydney based inde-
pendent principal investment and advisory firm. Prior to establishing Monash Private Capital, Joey was Chief Financial
Officer of Investec Bank Australia and Chairman of the bank’s Investment Committee. With a career spanning audit,
investment banking and executive financial management, Joey brings a comprehensive mix of financial, strategic,
operational, risk management and commercial skills and experience. Joey is a Chartered Accountant and has an
M.B.A. from the Australian Graduate School of Management.
18,328,334 fully paid ordinary shares
Interests in shares and options:
Other current directorships:
None
Former Directorships in last three years: None
None
Special responsibilities:
Jonathan Pager (Non-Executive Director)
Jonathan has over 20 years’ experience as an adviser across a wide range of industries in Australia and overseas and is
currently Managing Director of Pager Partners Business Consultants and Pager Partners Corporate Advisory. He has a
Masters of Economics and qualified as a chartered accountant with Deloitte, where he commenced his career. Jonathan
has recapitalised and built several ASX-listed companies across both the resources and industrial sectors.
Page 5 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
He is currently a director of UCW Limited (ASX:UCW) and Noble Mineral Resources Limited (ASX:NMG), and was
more recently a director of AHAlife Holdings Limited (ASX:AHL), Rhipe Limited (ASX:RHP), Metalicity Limited
(ASX:MCT) and Prospect Resources Limited (ASX:PSC).
Interests in shares and options:
Other current directorships:
745,000 fully paid ordinary shares; and
250,000 unlisted options exercisable at $0.10 per option on or before 30 June
2017
Noble Mineral Resources Limited (Finance director)
UCW Limited (Non-executive director)
Former Directorships in last three years: Ahalife Holdings Limited (Finance director)
Special responsibilities:
Nicola (Nicki) Page
rhipe Limited (Non-executive director)
Metalicity Limited (Non-executive director)
Prospect Resources Limited (Non-executive director)
Member of Audit and Risk Committee
Nicki has over 20 years in the IT industry in both the UK and Australia originally as a Computer Scientist. She was appointed
as a Director and Chief Executive Officer of Breeze in 2012, having joined Breeze in 2009 to pivot and transform the business
with a thriving people culture before successfully exiting to join MOQ. With a background in Technical and Sales with
companies such as KAZ Computing and Microsoft, Nicki spearheads efforts to drive innovation, develop new sales and
marketing strategies and bringing teams of people together to exceed their best. Nicki was recognised in the industry as the
2014 ARN Women in ICT Entrepreneur of the year.
Interests in shares and options:
14,166,670 fully paid ordinary shares(1)
None
Other current directorships:
Former Directorships in last three years: None
Special responsibilities:
(1) Interest in shares include shares jointly held with spouse (Mick Badran).
Chief Executive Officer
Joe D’Addio
Joe was a co-founder and Director of Tech Effect. Joe has over 35 years’ experience in the IT industry, with a particular
focus on areas of professional services, system and network engineering and technology consulting. Over the last 20
years, he has held a number of key management and director positions, building and leading businesses in the IT in-
dustry, specifically with Com Tech Communications and Dimension Data.
17,655,978 fully paid ordinary shares
Interests in shares and options:
Other current directorships:
None
Former Directorships in last three years: None
Special responsibilities:
Chief Operating Officer, Member of Audit and Risk Committee
Scott McPherson
Scott was a co-founder and Director of Tech Effect. Since forming the company in 2005, Tech Effect grew from
providing Infrastructure related Integration Services, to offering Consulting and Managed Services to assist their clients
to overcome both business and technical ICT related challenges.
Scott’s position draws upon more than two decades of industry experience where he has worked for iconic market
leaders Com Tech Communications and Dimension Data. During this time, Scott has honed his engineering, man-
agement and people skills to create a customer-centric organisation that develops solutions that solve real business
problems. These traits contributed to building Tech Effect into the successful, highly respected organisation.
Page 6 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
As the business grow, Scott’s responsibilities evolved to focus on managing the Integration Services Practice, along
with setting the vision and go to market strategy for the ‘Cloud World’. Scott’s technology career started at Queensland
University of Technology where he studied for his Bachelor of Business degree in Information Management.
17,655,978 fully paid ordinary shares
Interests in shares and options:
Other current directorships:
None
Former Directorships in last three years: None
Special responsibilities:
Executive Director
Don Francis Nanayakkara
Appointed 20 May 2016
Mr Don Francis Nanayakkara is a co-founder, Director and Chief Executive Officer of TETRAN. Don has over 20
years’ experience in the IT industry, with a particular focus on managed services. Don brings a mix of operational
innovation and strategic insight and has held a number of management positions, building and leading businesses. Don
played a key role in developing TETRAN into a customer-centric organisation and expanding TETRAN overseas,
including setting up the Sri Lanka Centre of Excellence. Don holds three Bachelor degrees from The University of New
South Wales in Aerospace Engineering, Computer Science and Mathematics.
5,696,262 fully paid ordinary shares
Interests in shares and options:
Other current directorships:
None
Former Directorships in last three years: None
Special responsibilities:
Executive Director
Brad Cohen (Company Secretary)
Appointed 7 August 2015
Brad also acts as the Corporate Development Manager for MOQ Limited.
Prior to joining MOQ Limited, Brad worked at OurCrowd LLC where he was an investment professional focusing on
Venture Capital investments. Previously, Brad worked in commercial transaction roles and began his career as a
management consultant at KPMG.
Brad is a qualified Chartered Accountant and holds a Bachelor of Commerce-Accounting and a Bachelor of Laws from
Macquarie University, Sydney.
Page 7 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Principal Activities
The Group principal activities were the provision of group ownership, strategy and oversight over a number of software
and service enterprises.
Operating and Financial Review
In accordance with MOQ’s stated commitment to invest strategically on building out its business model, and capitalise
on the emerging market for services and solutions in the Cloud centric ICT market over the next 3 to 5 years, FY16 has
been a year where medium and long term investments have been a priority for the MOQ Board and Executive team.
These investments have included:
1.
2.
3.
4.
region and also the emerging Business Intelligence and Data Analytics market.
The merger and integration of Technology Effect and Breeze, rebranded and launched as MOQdigital.
The acquisition of TETRAN to bolster Managed Services capability and recurring revenue moving forward.
The acquisition of Skoolbag to grow the commercialised IP base of the business.
Strategic hires to build out capability and capacity in Sales, Delivery and M&A, particularly in the NSW
In real terms, operating performance for the year was impacted by circa $1,359,000 of non-recurring costs in MOQ.
This consisted of $400,000 of due diligence and acquisition costs, $164,000 of integration costs, $280,000 in one-off
project write-downs, $306,000 in restructuring costs, and a $209,000 non-cash adjustment to long service leave pro-
visions through adoption of a more conservative accounting methodology.
During the June quarter MOQ completed the acquisitions of TETRAN and Skoolbag and successfully completed a
capital raising of $9 million, in order to fund these acquisitions. The results presented incorporate Skoolbag and
TETRAN results since 12th April 2016 and 23rd May 2016 respectively.
The positive impact of early FY16 investments commenced translating into earnings momentum in Q4FY16. Im-
portantly, pipeline leading into Q1FY17 is very strong and positive cashflow is forecast for Q1 of FY17. Leverage from
the mergers, in the form of potential new business, sourced from the enhanced offering MOQ is able to take to its
clients, is clearly evident in the FY17 pipeline.
Our Business Model and Objectives
The Company’s strategy is to develop, build and acquire complementary Cloud focussed technology businesses. The
Directors of the Company have extensive experience and a proven track record in acquiring and building businesses,
and providing strategic direction, in order to generate long term sustainable returns for shareholders. The Company is
actively pursuing suitable growth opportunities by either organic investment or through synergistic acquisitions in the
technology sector.
The MOQdigital strategy and objectives include:
•
Investment in the organic growth of MOQdigital and a build out of capability in the New South Wales and
Queensland markets;
Continued and increased focus on the growth of Managed Services and a range of recurring revenue streams;
•
• Market differentiation through continued investment and development of in-house products, tools and applica-
tions; and
• Growth via strategic acquisitions.
Page 8 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Significant Changes in State of Affairs
There are no other significant changes in the state of affairs of the group, other than the acquisitions of TETRAN and
Skoolbag as detailed in note 32.
Dividends Paid or Recommended
In respect of the current year, no dividends have been declared or paid and none are recommended (2015: $nil).
Significant Events after the Reporting Period
On 1 September 2016, an Employee Option Plan was introduced, which provided certain key management and employees
with 3,690,901 unlisted and unvested options. These options have been issued in two separate tranches. Tranche 1 consists of
1,845,456 options, exercisable at $0.275 each, and vests after 24 months’ continuous service from date of issue. Tranche 2
consists of 1,845,445 options, exercisable at $0.275 each, and vests after 36 months’ continuous service from date of issue.
Both tranches expire on 1 September 2020.
Likely developments and expected results
Disclosure of information regarding likely developments in the operations of the group in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information
has not been disclosed in this report.
Environmental Issues
There are no applicable environmental regulations that would have an effect on the Company.
Indemnifying Officers or Auditor
During the year, the Company paid a premium to insure officers of the Group. The officers of the Group covered by the
insurance policy include all directors. The liabilities insured are legal costs that may be incurred in defending civil or criminal
proceedings that may be brought against the officers in their capacity as officers of the Group, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information
to gain advantage for themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of the insurance policies is not disclosed as such disclosure is prohibited
under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified
or agreed to indemnify any current or former officer or auditor of the Group against a liability incurred as such by an officer
or auditor.
Proceeding on Behalf of Company
No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any proceedings to
which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those
proceedings.
The company was not a party to any such proceedings during the year.
Page 9 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Auditor
Stantons International Audit and Consulting Pty Limited are the appointed auditors of the Company. The auditor has not been
indemnified under any circumstance.
Non-audit Services
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the nature of the
services provided does not compromise the general principles relating to auditor independence in accordance with APES 110:
Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to a company associated with Stantons International for non-audit services provided
to the Company during the year ended 30 June 2016:
Completion Accounts Audit
Investigating Accountants Report
Total
2016
$
10,000
-
10,000
2015
$
-
12,485
12,485
The board of directors considers that there was no independence issue in the provision of these services.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2016 can be found on page 57 of the financial report.
Options
At the date of this report, the unissued ordinary shares of MOQ Limited under option are as follows:
Grant Date
16/07/2014
21/11/2012
21/11/2012
21/11/2012
01/09/2016(1)
TOTAL
Balance at the
date of this report
2,500,000
-
16,667
16,667
3,690,901
6,224,235
Exercise price
Expiry
$0.10
$7.00
$7.00
$7.00
$0.275
30/06/2017
12/02/2016
12/02/2017
12/02/2018
01/09/2020
Option holders do not have any rights to participate in any issues of shares or other interests of the company or any other
entity. For details of options issued to directors and executives as remuneration, refer to the remuneration report.
During the year ended 30 June 2016, the following ordinary shares of MOQ Limited were issued on the exercise of options
granted. No amounts are unpaid on any of the shares.
3 July 2015: 833,333 options with exercise price $0.01
16 September 2015: 2,499,999 options with exercise price of $0.01
Page 10 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
In addition, on 1 September 2016, an Employee Option Plan was introduced, which provided certain key management and
employees with 3,690,901 unlisted and unvested options. These options have an exercise price of $0.275 each, vest upon
employee period of service milestones and expire on 1 September 2020.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any
other body corporate.
Page 11 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED)
Remuneration Policy
The remuneration policy of MOQ Limited has been designed to align key management personnel (KMP) objectives with
shareholder and business objectives by providing a fixed remuneration component and offering performance incentives based
on key performance areas affecting the consolidated group’s financial results. The Board of MOQ Limited believes the
remuneration policy to be appropriate and effective in its ability to attract and retain high-quality KMP to run and manage the
consolidated group, as well as create goal congruence between directors, executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for KMP of the consolidated group is to have the
remuneration policy developed by the Board after professional advice is sought where appropriate from independent external
consultants. No external advice was sought for the current financial year.
• All KMP receive a base salary (which is based on factors such as length of service and experience), superan-
•
•
•
nuation, fringe benefits and performance incentives.
Performance incentives are generally only paid once predetermined key performance indicators (KPIs) have
been met.
The Board reviews KMP packages annually by reference to the consolidated group’s performance, executive
performance and comparable information from industry sectors.
Incentives paid in the form of options or rights are intended to align the interests of the KMP and the Group with
those of the shareholders. In this regard, KMP are prohibited from limiting risk attached to those instruments by
use of derivatives or other means. An incentive option plan for KMP was outlined on 24 April 2016.
The performance of KMP is measured against criteria agreed biannually with each executive and is based predominantly on
the forecast growth of the consolidated group’s profits and shareholders’ value. All bonuses and incentives must be linked to
predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives,
bonuses and options.
KMP receive at a minimum, a superannuation guarantee contribution required by the government, which for the year ending
30 June 2016 was 9.50% (2015 : 9.5%) of the individual's average weekly ordinary time earnings. KMP do not receive any
retirement benefits. All remuneration paid to KMP is valued at the cost to the company and expensed.
The Board's policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The
Board determines payments to the non-executive directors and reviews their remuneration annually, based on market prac-
tice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees
that can be paid to non-executive directors is subject to approval by shareholders. Currently, the maximum aggregate re-
muneration of non-executive directors is $500,000.
Performance-based Remuneration:
The KPIs are set annually, in consultation with KMP. The KPIs target areas the Board believes hold greater potential for
group expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each
KPI is based on budgeted figures for the Group and respective industry standards.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed
difficulty of the KPIs achieved. Following the assessment, the KPIs are reviewed by the remuneration committee in light of
the desired and actual outcomes, and their efficiency is assessed in relation to the Group’s goals and shareholder wealth,
before the KPIs are set for the following year. In determining whether or not a KPI has been achieved, the Board bases the
assessment on the Company’s performance using audited figures.
Page 12 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED) (CONT.)
Remuneration Expense Details:
The following table of benefits and payments represents the components of the current year and comparative year
remuneration expenses for each member of KMP of the consolidated group:
Short-term
benefits
Salary &
fees
Cash
Bonus
Other
pay-
ments
Post-employm
ent benefits
Superannua-
tion
Share
based
pay-
ments
Personnel
Executive Directors
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr Don Nanayakkarra(1)
Non-executive Directors
Mr David Shein
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Key Management
Mr Matthew Goggin
(Director Sales)
Mr Mick Badran
(CTO)
Mr Chad Lurie (GM Ser-
vices) (1)
Mr (Danny) Wan Yee Loh
(GM Finance) (2)
2016 Total
2015 Total
Year
2016
2015
2016
2015
2016
2015
2016
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
200,000
16,667
200,000
16,667
200,000
16,667
9,518
54,795
27,397
60,000
32,500
60,000
32,500
54,795
27,397
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,508
-
-
25,000
-
-
38,571
-
38,571
-
22,831 37,508
200,000
-
16,667
9,000
200,000
-
16,667
9,589
-
-
-
-
2016
109,154
1,357,851
-
-
-
-
-
-
-
19,000
1,565
19,000
1,565
19,000
1,565
904
5,205
6,166
-
-
-
-
5,205
8,335
19,000
1,565
19,000
1,565
911
10,370
117,595
Total
219,000
18,232
219,000
18,232
219,000
18,232
10,422
60,000
71,071
60,000
71,071
60,000
96,071
60,000
96,071
-
-
-
-
-
-
-
-
-
-
-
-
-
-
219,000
-
27,232
-
219,000
-
-
-
18,232
10,500
119,524
- 1,475,446
Perfor-
mance
based per-
centage of
remunera-
tion
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33%
-
-
-
-
-
-
203,129
56,831 152,158
22,326
-
434,444
(1) Employment at MOQ Ltd commenced from the date of appointment 20 May 2016 as TETRAN acquired by MOQ Ltd on 20 May 2016.
(2) Employment at MOQ Ltd commenced from the date of appointment 16 November 2015.
Page 13 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED) (CONT.)
Service agreements (audited):
The directors serve until they resign, are removed, cease to be a director or are prohibited from being a director under the
provisions of the Corporations Act 2001, or are not re-elected to office.
The directors entered into service agreements on the following terms:
• Mr Shein, Mr Fridman, Mr Pager and Mr Pollak - Base salary (including director’s fees) of $60,000 per annum
(including superannuation or similar contributions).
• Ms Page, Mr D’Addio and Mr McPherson - Base salary (including director’s fees) of $200,000 per annum (plus
superannuation or similar contributions).
o
o Annual incentive payment of up to $81,217 each based on pre-determined key metrics.
o The Company may also, in its absolute discretion, provide a bonus, the value of which, the conditions
attached to and the frequency of such a bonus, remain matters over which the Company exercises sole
discretion.
If the Company terminates the agreement with reason (such as gross misconduct, conviction of a
major criminal offence or misuse of price sensitive information), the Company will provide the Di-
rector with no notice and will be summarily dismissed. If the Company terminates the agreement
without reason (notwithstanding any other provision of the agreement), the Company will provide the
Director with 3 months’ written notice or make a payment of 3 months’ salary in lieu of the notice
period.
o The Director may terminate the agreement at his or her sole discretion and at any time, and in doing so
is entitled to payment of a fee equivalent to 3 months of their base fees.
o After the termination of their employment with the Company and MOQdigital, the Director will be
subject to a contractual restraint which may apply for up to 3 years after 29 May 2015 or 6 months
after the termination (whichever is greater), and cover up to all of Australia.
• Mr Nanayakkara – Base salary (including director’s fees) of 167,352 per annum, increasing to $200,000 per
annum (plus superannuation or similar contributions) on 1 July 2016.
o
o Annual incentive payment of up to $81,217 based on pre-determined key metrics.
o The Company may also, in its absolute discretion, provide a bonus, the value of which, the conditions
attached to and the frequency of such a bonus, remain matters over which the Company exercises sole
discretion.
If the Company terminates the agreement with reason (such as gross misconduct, conviction of a
major criminal offence or misuse of price sensitive information), the Company will provide the Di-
rector with no notice and will be summarily dismissed. If the Company terminates the agreement
without reason (notwithstanding any other provision of the agreement) within 12 months of com-
mencement, the Company will provide the Director with 6 months’ written notice, and thereafter with
2 months’ written notice.
Key Management Personnel entered into service agreements on the following terms:
• Mr Badran and Mr Goggin - Base salary of $200,000 per annum (plus superannuation or similar contributions).
• Mr Loh -Base salary of $180,000 per annum (plus superannuation or similar contributions).
o
o The Company may also, in its absolute discretion, provide a bonus, the value of which, the conditions
attached to and the frequency of such a bonus, remain matters over which the Company exercises sole
discretion.
If the Company terminates the agreement with reason (such as gross misconduct, conviction of a
major criminal offence or misuse of price sensitive information), the Company will provide the KMP
with no notice and will be summarily dismissed. If the Company terminates the agreement without
reason (notwithstanding any other provision of the agreement), the Company will provide the KMP
with 3 months’ written notice or make a payment of 3 months’ salary in lieu of the notice period.
o The KMP may terminate the agreement at his or her sole discretion and at any time, and in doing so is
entitled to payment of a fee equivalent to 3 months of their base fees.
Page 14 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
o After the termination of their employment with the Company and MOQdigital, the KMP will be
subject to a contractual restraint which may apply for up to 3 years after 29 May 2015 or 6 months
after the termination (whichever is greater), and cover up to all of Australia.
•
Mr Lurie – Base salary of $136,986 per annum, increasing to $200,000 per annum (plus superannuation or
similar contributions) on 1 July 2016.
o
o The Company may also, in its absolute discretion, provide a bonus, the value of which, the conditions
attached to and the frequency of such a bonus, remain matters over which the Company exercises sole
discretion.
If the Company terminates the agreement with reason (such as gross misconduct, conviction of a
major criminal offence or misuse of price sensitive information), the Company will provide the Di-
rector with no notice and will be summarily dismissed. If the Company terminates the agreement
without reason (notwithstanding any other provision of the agreement) within 12 months of com-
mencement, the Company will provide the Director with 6 months’ written notice, and thereafter with
2 months’ written notice.
Shareholding and option holding of directors and other key management personnel (audited)
Options held by Directors and Key Management Personnel
The number of options in the Company during the 2016 reporting period held by each of the Group’s Directors and Key
Management Personnel, including their related parties, is set out below:
Personnel
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr Don Francis Nanayakkara
Mr David Shein
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Matthew Goggin
Mr Mick Badran
Mr Chad Lurie
Mr Danny Loh
Balance at
the start of
the year
-
-
-
-
-
-
2,500,000
9,000,000
-
-
-
-
Year ended 30 June 2016
Options
acquired
Received as part of
remuneration
Options exercised /
disposed(1)
Held at the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,250,000)
(8,100,000)
-
-
-
-
-
-
-
-
-
-
250,000
900,000
-
-
-
-
(1)A 10:1 Consolidation of shares occurred on the 31 May 2016.
Personnel
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Matthew Goggin
Mr Mick Badran
Year ended 30 June 2015
Options
acquired
Received as part
of remuneration
Options exercised /
disposed
Held at the end of
the year
Balance at
the start of
the year
-
-
-
-
-
-
-
-
-
-
-
-
8,333,334
38,333,334
2,500,000
9,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,333,334)
(38,333,334)
-
-
-
-
-
-
-
-
-
2,500,000
9,000,000
-
-
Page 15 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED) (CONT.)
Shares held by Directors and Key Management Personnel
The number of ordinary shares in the Company during the 2016 reporting period held by each of the Group’s Key Man-
agement Personnel, including their related parties, is set out below:
Personnel
Balance at the
start of the
year
Received
as part of
remuner-
ation
Year ended 30 June 2016
Acquired
Other
changes(1)
Disposal Held at the end
of reporting
period
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Don Francis Nanayakkara(2)
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Matthew Goggin
Mr Mick Badran
Mr Chad Lurie
Mr Danny Loh
70,833,334
176,559,780
176,559,780
40,833,334
-
182,283,334
7,450,000
19,800,000
88,279,890
70,833,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56,962,210
-
-
-
-
-
4,084,485
-
(63,749,999)
(158,903,802)
(158,903,802)
(36,750,000)
(51,265,948)
(163,955,000)
(6,705,000)
(17,820,000)
(79,451,901)
(63,749,999)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,083,335
17,655,978
17,655,978
4,083,334
5,696,262
18,328,334
745,000
1,980,000
8,827,989
7,083,335
4,084,485
-
(1)A 10:1 Consolidation of shares occurred on the 31 May 2016.
(2) Shares issued as consideration as part of the acquisition of TETRAN group.
Personnel
Ms Nicola Page
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Joseph Fridman
Mr Jonathan Pager
Mr Michael Pollak
Mr Matthew Goggin
Mr Mick Badran
Balance at
the start of
the year
-
-
-
-
-
-
-
-
-
Received as
part of re-
muneration
-
-
-
-
-
-
-
-
-
Year ended 30 June 2015
Acquired
Other
changes(1)
70,833,333
176,559,780
176,559,780
-
-
-
-
88,279,890
70,833,334
-
-
-
40,833,334(2)
182,283,334(3)
7,450,000
19,800,000
-
-
Disposal Held at the end
of reporting
period
70,833,334
176,559,780
176,559,780
40,833,334
182,283,334
7,450,000
19,800,000
88,279,890
70,833,334
-
-
-
-
-
-
-
-
-
(1) Shares issued as consideration as part of the acquisitions of Technology Effect Pty Ltd and Breeze Training Pty Ltd, per the prospectus dated 17 April
2015.
(2) Includes 8,333,334 Shares issued for options exercised.
(3) Includes 38,333,334 Shares issued for options exercised.
Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments other than those described in the tables above relating to
options, rights and shareholdings.
Loans to KMP
No loans have been made to KMP during, or since, the year ended 30 June 2016 (2015:$Nil).
Page 16 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED) (CONT.)
Other transactions with KMP or their related parties
Related party transactions included:
Amount payable in settlement of the transaction of TETRAN group of companies (entities related to Director Don Na-
nayakkara and KMP Chad Lurie) as at 30 June 2016 which is yet to be finalised.
Advisory fee of $Nil (2015: $100,0000) to MPC Strategic Solutions Pty Ltd (an entity related to Monash Private Capital
Pty Ltd and Director, Joseph Fridman);
Receipt of $ Nil (2015: $90,000) in settlement of the transaction of Breeze Training Pty Ltd (an entity related to Director
Nicki Page) to the Group; and
Repayment of a $ Nil (2015: $500,000) syndicate loan (the Syndicate was headed by Pager Partners, an entity related to
Jonathan Pager). The loan was settled with $111,929 in cash and $388,071 in equity.
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Di-
rectors.
David Shein
Non-Executive Chairman
30 September 2016
Page 17 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
STATEMENT OF CORPORATE GOVERNANCE
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, MOQ
Limited and its Group have adopted the third edition of the Corporate Governance Principles and Recommendations which
was released by the ASX Corporate Governance Council on 27 March 2014 and became effective for financial years be-
ginning on or after 1 July 2014.
The Group’s current Corporate Governance Statement for this reporting period is available on MOQ Limited ’s website at
www.moq.com.au/corporate-governance/
Page 18 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Notes
2016
$
2015
$
Revenue
Revenue
Other income
Total Revenue
Cost of sales
Gross Profit
Expenses
Depreciation expenses
Employee costs
Legal costs
ASX and registry related expenses
Marketing expense
Occupancy expenses
Professional fees
Telecommunication carrier expenses
Other expenses
Total expenses
(Loss) before impairment
Impairment of Goodwill
Impairment of Intellectual Property
Impairment of Property, Plant and Equipment
(Loss) before income tax expense
Income tax credit
(Loss) after income tax
6
6
7
7
7
7
7
8
8
8
9
33,934,350
222,646
34,156,996
3,116,635
373,746
3,490,381
(27,971,377)
(2,444,678)
6,185,619
1,045,703
(110,009)
(4,414,010)
(33,978)
(80,219)
(308,205)
(520,778)
(337,317)
(141,439)
(902,417)
(9,048)
(823,290)
(233,843)
(142,875)
(68,492)
(16,690)
(466,379)
(22,182)
(264,180)
(6,848,372)
(2,046,979)
(662,753)
(1,001,276)
-
-
-
(16,348,780)
(63,636)
(4,587)
(662,753)
(17,418,279)
128,149
(534,604)
88,154
(17,330,125)
Other comprehensive (loss) for the year
Exchange differences on translating foreign subsidiaries
Total comprehensive (loss) for the year
(6,198)
(540,802)
-
(17,330,125)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Page 19 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
(Loss) is attributable to
MOQ Limited
Total comprehensive (loss) is attributable to
MOQ Limited
Notes
2016
$
2015
$
(540,802)
(540,802)
(17,330,125)
(17,330,125)
(540,802)
(540,802)
(17,330,125)
(17,330,125)
Earnings / (loss) per share attributable to equity holders of
the parent entity
Basic (loss) / earnings per share (cents per share)
Diluted (loss) / earnings per share (cents per share)
29
29
(0.05)
(0.05)
(4.80)
(4.80)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Page 20 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Current Assets
Cash and cash equivalents
Trade and other receivables
Work In Progress
Other assets
Non Current Assets
Other Assets
Deferred tax assets
Property plant and equipment
Intangibles
Total assets
Current Liabilities
Trade and other payables
Deferred revenue
Provisions
Non - Current Liabilities
Deferred revenue
Provisions
Total Liabilities
Net Assets
Equity
Issued capital
Shares to be issued
Reserves
Accumulated losses
Total Equity
Notes
10
11
12
13
13
14
15
16
17
18
19
18
19
20
21
22
2016
$
3,078,326
6,298,691
220,676
273,602
9,871,295
187,540
723,847
452,350
14,455,829
15,819,566
2015
$
2,722,299
3,026,309
146,845
177,757
6,073,210
-
267,165
94,451
-
361,616
25,690,861
6,434,826
5,018,996
2,029,235
1,352,621
8,400,852
-
48,049
3,692,872
294,569
722,574
4,710,015
14,325
-
8,448,901
4,724,340
17,241,960
1,710,486
49,365,752
-
2,467
(32,126,259)
17,241,960
33,285,143
8,333
8,665
(31,591,655)
1,710,486
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 21 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Issued Capital
$
Shares to be
Issued
$
Balance as at 1 July 2015
33,285,143
8,333
Net loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
Issue of share capital
Shares to be issued
Option Premium Reserve
Capital raising costs
-
-
-
-
14,013,133
2,500,000
-
(432,524)
-
-
-
-
-
(8,333)
-
-
Reserves
Accumulated Losses
Total Equity
$
8,665
-
(6,198)
(6,198)
-
-
-
-
-
$
(31,591,655)
(534,604)
-
(534,604)
-
-
-
-
-
$
1,710,486
(534,604)
(6,198)
(540,802)
-
14,013,133
2,491,667
-
(432,524)
Balance as at 30 June 2016
49,365,752
-
2,467
(32,126,259)
17,241,960
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 22 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Issued Capital
$
Shares to be
Issued
$
Reserves
$
Accumulated
Losses
$
Total Equity
$
Balance as at 1 July 2014
13,636,115
Net loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners
Issue of share capital
Shares to be issued
Option Premium Reserve
Capital raising costs
Balance as at 30 June 2015
-
-
-
19,782,456
-
-
(133,428)
33,285,143
-
-
-
-
8,333
-
-
8,333
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
6,790
(14,261,530)
(618,625)
-
-
-
-
1,875
-
8,665
(17,330,125)
-
(17,330,125)
-
(17,330,125)
(17,330,125)
-
-
-
19,782,456
8,333
1,875
(133,428)
(31,591,655)
1,710,486
Page 23 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income taxes received
Net cash (used in) by operating activities
Cash flow from investing activities
Payment for property plant and equipment
Payment for deposits
Cash on acquisition of controlled entities
Acquisition of subsidiaries
Net cash generated by / (used in) investing activities
Cash flow from financing activities
Proceeds from issue of shares
Share issued costs
Loans to related parties
Proceeds from related parties
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
31
32
2016
$
36,601,890
(38,186,980)
7,055
(52,676)
(1,630,711)
(345,261)
(176,093)
925,816
(6,990,000)
(6,585,538)
8,575,000
(2,724)
-
-
8,572,276
356,027
2,722,299
3,078,326
2015
$
2,763,591
(4,207,981)
27,543
346,203
(1,070,644)
(19,134)
-
-
(2,342,874)
(2,362,008)
5,411,925
(93,040)
(111,929)
90,000
5,296,956
1,864,304
857,995
2,722,299
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page 24 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements cover MOQ Limited (“Company or “parent entity”) and its controlled entity as a
consolidated entity (also referred to as “the Group”). MOQ Limited is a company limited by shares, incorporated and
domiciled in Australia. The Group is a for-profit entity and is primarily involved in the information technology industry
being the field of software and services.
The separate financial statements of the parent entity, MOQ Limited, have not been presented within this financial report as
permitted by the Corporations Act 2001.
The consolidated financial statements were authorised for issue by the Board of Directors on 29 September 2016.
The following is a summary of the material accounting policies adopted by the consolidated entity in the preparation and
presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a)
Basis of preparation of the financial report
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with the
Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law where
possible.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards en-
sures that the financial statements and notes of the Company comply with International Financial Reporting Standards
(‘IFRS’). It is recommended that this financial report be read in conjunction with the public announcements made by MOQ
Limited during the year in accordance with the continuous disclosure requirements arising under the Corporations Act
2001.
The financial report has been prepared on the historical cost basis.
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for
the current year. When the Company applies an accounting policy retrospectively, makes a retrospective restatement or
reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative
period will be disclosed.
(b)
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or
businesses under common control. The business combination will be accounted for from the date that control is attained,
whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is rec-
ognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is
not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or
liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial
instrument, are recognised as expenses in profit or loss when incurred.
Page 25 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
(c)
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
•
•
•
the consideration transferred;
any non-controlling interest (determined under either the full goodwill or proportionate interest method); and
the acquisition date fair value of any previously held equity interest over the acquisition date fair value of net
identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value
of any previously held equity interest shall form the cost of the investment in the separate financial statements.
Fair value re-measurements in any pre-existing equity holdings are recognised in profit or loss in the period in which they
arise. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income,
such amounts are recycled to profit or loss.
Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill is tested for impairment annually and is allocated to the Group’s cash-generating units or groups of cash-generating
units, representing the lowest level at which goodwill is monitored being not larger than an operating segment. Determining
whether goodwill is impaired requires an estimation of the value in use of the cash –generating units to which goodwill has
been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are
less than expected, a material impairment loss may arise.
(d)
Critical accounting estimates
The preparation of the financial statements in conformity with IFRS requires the use of accounting estimates. It also requires
management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial state-
ments are disclosed in Note 2.
(e)
Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (MOQ Limited) and all
of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it 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 over
the entity. A list of the subsidiaries is provided in Note 34.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the
date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control
ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities are fully
eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary
to ensure uniformity of the accounting policies adopted by the Group.
(f)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on
the requirements of the applicable Accounting Standard. Fair value is the price the Group would receive to sell an asset or
Page 26 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and
willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from
the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and
transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its
highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs re-
quired to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are
not based on observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
•
•
if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa;
if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy (i.e.
transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred.
(g)
Income tax
The income tax expense/(income) for the year comprises current income tax expense/(income) and deferred tax ex-
pense/(income).
Current income tax expense or revenue for the year is the tax payable on the current period’s taxable income based on the
notional income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to
unused tax losses.
Deferred income tax is provided using the liability method on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using
tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary dif-
ferences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority. Current tax asset and tax liabilities are offset where the
Page 27 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
entity has a legally enforceable right to offset and intends to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
(h)
Tax Consolidation Legislation
The Company and its Australian wholly owned subsidiaries have formed an income tax consolidated group under the tax
consolidation legislation for the whole of the financial year. Each entity in the Group recognises its own current and deferred
tax liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits, which are immediately
assumed by the parent entity. The Group notified the Australian tax Office it had formed an income tax consolidated group to
apply from 1 June 2015. The tax consolidated group has entered a tax sharing agreement whereby each company in the Group
contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated
group.
(i)
Plant and equipment
Each class of plant and equipment is carried at cost less any applicable accumulated depreciation and any accumulated im-
pairment losses. Plant and equipment is measured on the cost basis. The carrying amount of plant and equipment is reviewed
annually by directors to ensure it is not in excess of the recoverable amount from those assets.
The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets em-
ployment and subsequent disposal. The expected net cash flows have been discounted to present values in determining re-
coverable amounts.
The depreciated amount of all fixed assets including capitalised leased assets is depreciated on a straight line basis over their
useful lives commencing from the time the asset is held ready for use.
The expected useful life of plant and equipment ranges from 3 to 15 years.
The assets’ residual values and useful life are reviewed at the balances date. The asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying amount is greater that its estimated recoverable amount.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful
lives of the improvements.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included net in
profit or loss.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is
depreciated on a straight-line basis over the asset’s useful life to the consolidated group commencing from the time the asset
is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or
the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Leasehold improvements
Plant and Equipment
Depreciation Rate
Term of lease
13.33 – 66.67%
Page 28 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
recognised in profit or loss in the period in which they arise. When revalued assets are sold, amounts included in the reval-
uation surplus relating to that asset are transferred to accumulated losses.
(j)
Leases
At inception of an arrangement, the Group determines whether such an arrangement is, or contains, a lease. A specific asset is
the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys
the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset. At
inception, or upon reassessment of the arrangement, the Group separates payments and other consideration required by such
an arrangement into those for the lease and those for other elements on the basis of their relative fair values.
Leases reclassified at their inception as either operating or finance leases based on the economic substance of the arrangement
so as to reflect the risks and benefits incidental to ownership.
Lease of fixed assets where substantially all the risks and rewards incidental to the ownership of the asset, but not the legal
ownership, are transferred to the entity are classified as finance leases. Finance lease are capitalised by recording an asset and
a liability equal to the fair value of the leased property or the present value of the minimum lease payments including any
guaranteed residual values. The interest expense is calculated using the interest rate implicit in the lease and is included in
finance costs in the Statement of Profit or Loss and Other Comprehensive Income. Lease assets are depreciated on a straight
line basis over their estimated useful lives where it is likely that the entity will obtain ownership of the asset or over the term
of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the
year.
Lease payments for operating leases where substantially all the risks and benefits remain with the lessor are recognised as an
expense in the year in which they are incurred. Lease incentives received under operating leases are recognised as a liability
and amortised on a straight line basis over the life of the lease term.
(k)
Financial instruments
The Group initially recognises financial assets on the trade date at which the Group becomes a party to a contractual provision
of the instrument.
Financial assets are initially measured at cost. If the financial asset is not subsequently measured at fair value through profit or
less, the initial measurement includes transaction costs that are directly attributed to the asset’s acquisition. The Group
subsequently measures financial assets at either amortised costs or fair value.
A financial asset is subsequently measured at amortised cost using the effective interest method and net of any impairment
loss, if:
•
•
The asset is held with an objective to collect cash flows; and
The contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets other than those classified as financial assets measured at amortised costs are subsequently measured at fair
value with all changes in fair value recognised in profit or loss.
Page 29 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
All financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual pro-
visions of the instrument. Non derivative financial liabilities are recognised at amortised cost, comprising original debt less
principal payment and amortisation.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Financial
assets and financial liabilities are offset when the Group has a legal right to offset the amounts and intends either to settle on
a net basis or to realise the assets and settle the liability simultaneously.
(l)
Impairment of financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is
any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that
one or more events have occurred after the initial recognition of the asset and that the loss event has a negative effect on the
estimated future cash flows of that assets which can be estimated reliably.
The Group considers evidence of impairment for receivables at both a specific and collective level. All individually signif-
icant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been in-
curred but not yet identified.
(m)
Impairment of non-financial assets
Intangible assets are tested annually for impairment or more frequently if changes in circumstances indicate that they might
be impaired.
At each reporting date the Group assesses whether there is any indication that individual assets are impaired. Where im-
pairment indicators exist, recoverable amount is determined and impairment losses are recognised in profit or loss where the
asset’s carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use.
For the purpose of assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current marked assessment of the time value of money and the risks specific to the asset.
(n)
Intangible assets
Customer contracts acquired as part of a business combination are recognised separately from goodwill. The customer con-
tracts are carried at fair value at the date of acquisition less accumulated amortisation and impairment losses. Fair value is
assessed based on the income streams generated from customer contracts after allowing for cost specific to the generation of
those income streams. In the assessment of the carrying value of the intangible assets costs not related to the generation of the
contract related income streams were excluded. These intangibles are separate from the business to which they relate and
have been assessed on this basis. Amortisation is calculated based on the timing of projected cash flows of the contracts over
their estimated useful lives, which at present are 1.5 years.
Software acquired as part of a business combination is recognised separately from goodwill. The software is carried at fair
value at the date of acquisition less accumulated amortisation and impairment losses. Amortisation is calculated based on the
timing of projected cash flows of the contracts over their estimated useful lives, which at present are 4 years.
(o)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax.
If the entity reacquires its own equity instruments, those instruments are deducted from equity and the associated shares are
cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable costs
net of any taxes is recognised directly in equity.
Page 30 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(p)
Foreign currency transactions and balances
The functional currency of each entity in the consolidated entity is measured using the currency of the primary economic
environment in which that consolidated entity operates. The consolidated financial statements are presented in Australian
dollars which is the consolidated entity’s functional and presentation currency.
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated using the spot rate at the end of the financial year. Non monetary
items measured at historical cost continue to be carried at the date of the transaction. Non monetary items measured at fair
value are reported at the exchange rate at the date when the fair values were determined. Material exchange differences
arising on the translation of monetary items are recognised in profit or loss except where deferred in equity as a qualifying
cash flow or net investment hedge. Material exchange differences arising on the translation of non monetary items are rec-
ognised inequity to the extent that the gain or loss is directly recognised in equity otherwise the exchange is recognised in
profit or loss.
(q)
Employee benefits
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, and annual leave, including non monetary benefits, expected to be settled within 12 months
of the reporting date are recognised in other payables, in respect of employees’ services up to the reporting date and are
measured at the amounts expected to be paid when the liabilities are settled, on an undiscounted basis.
Liabilities for non accumulating sick leave are recognised when the leave is taken and measure at the rates paid or payable.
Long service leave
The liability for long service leave and annual leave which is not expected to be settled within 12 months of the reporting date
are recognised in the provision for employee benefits and measured as the present value of expected future payments to be
made for services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on national government bonds with terms
to maturity and currency that match as closely as possible the estimated future cash outflows.
Termination benefits
Termination benefits are payable when employments are terminated before the normal retirement date, or when the employee
accepts voluntary redundancy in exchange for these benefits.
The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of
current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as
a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after reporting date
are discounted to present value.
Page 31 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(r)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the Statement of Financial Position date. The discount rate used to determine the present value reflects current
market assessments of the time value of money and the risks specific to the liability.
(s)
Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, deposits held on call with banks, other short term highly liquid
investments with an original maturity date of three months or less held and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities in Statement of Financial Position.
(t)
Revenue
Revenue is measured at the fair value of the consideration received or receivable.
Revenue for recurring services is recognised in equal amounts over the period for which service or support is to be provided
to a customer, either quarterly or annually.
Revenue from technology sales in recognised upon delivery of the product to the customer.
Revenue from professional services is recognised in the accounting period in which the services are rendered. For time and
materials contracts, revenue is recognised as the service is rendered.
Interest revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the
effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the
financial asset.
Revenue from other services is recognised upon the delivery of the service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
(u)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial
period of time to prepare for their intended use or sale are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in
which they are incurred.
Page 32 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(v)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the
weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares
issued during the year.
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.
Potential ordinary shares are anti-dilutive when their conversion to ordinary shares would increase earnings per share or
decrease loss per share from continuing operations.
(w)
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective in-
terest method, less provision for impairment.
Collectability of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by
reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when
there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the
receivables. Refer to Note 1(l) for further discussion on determination of impairment losses.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for which an
impairment allowance had been recognised becomes uncollectable in a subsequent period, it is written off against the al-
lowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or
loss.
(x)
Work in progress
Work in progress is stated as the aggregate of costs incurred to date plus recognised profits less recognised losses and pro-
gress billings. Cost includes all costs directly related to specific contracts, and an allocation of overhead costs attributable to
contract activity in general.
Project profits are recognised on the stage of completion basis and measured using the proportion of costs incurred to date as
compared to expected total costs. Where losses are anticipated they are provided for in full.
Project revenue has been recognised on the basis of the terms of the contract adjusted for any variations or claims allowable
under the contract. Any credit balance in work in progress is reclassified as income in advance.
When the outcome of the project cannot be estimated reliably, revenue is only recognised to the extent that the costs incurred
are recoverable.
(y)
Trade and other payables
Trade and other payables represent the principal amounts outstanding at balance date, plus, where applicable, any accrued
interest. These amounts are unsecured and are usually settled within 30 days of recognition.
Page 33 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(z)
Operating segments
The Company has identified its operating segments based on internal reports that are reviewed and used by the Board of
Directors (chief operating decision makers) to make financial and operational decisions and to allocate resources. We at-
tribute sales to an operating segment based on the type of product or service provided to the customer.
We have identified three reportable segments, as follows:
•
•
•
Technology Sales – provision of vendor hardware, software and associated licenses and maintenance contracts,
Professional Services – provision of a range of specialist services including consulting, project management,
systems and software engineering services to assist clients with strategy, architecture, design, development and
implementation of ICT solutions.
Recurring Services – a combination of managed services including operations, support and ICT management,
as well as a range of in-house developed commercialised IP and Cloud (SAAS) based solutions.
The consolidated entity primarily services clients in one geographical segment being Australia, with support from Australia,
Sri Lanka, Singapore and New Zealand. However, there are no material revenues generated outside of Australia, and as a
result no additional geographical segment information has been provided.
(aa)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recov-
erable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers
or payments to suppliers.
(bb)
New Accounting Standards for Application in Future Periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group, together
with an assessment of the potential impact of such pronouncements on the Group when adopted in future periods, are dis-
cussed below:
AASB 9: Financial Instruments and associated Amending Standards
Applicable to annual reporting periods beginning on or after 1 January 2018.
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and includes
revised requirements for the classification and measurement of financial instruments, revised recognition and de-recognition
requirements for financial instruments and simplified requirements for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the classification of fi-
nancial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss, and the
irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other
comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the
ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge
policies in line with the new hedge accounting requirements of the Standard, the application of such accounting would be
largely prospective.
Page 34 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial instruments,
including hedging activity, it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 15: Revenue from Contracts with Customers
Applicable to annual reporting periods commencing on or after 1 January 2017. When effective, this Standard will replace the
current accounting requirements applicable to revenue with a single, principles-based model. Except for a limited number of
exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as
non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods
or services. To achieve this objective, AASB 15 provides the following five-step process:
(i)
(ii)
(iii)
(iv)
(v)
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's financial statements, it is
impracticable at this stage to provide a reasonable estimate of such impact.
NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best
available current information. Estimates assumed a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Company.
Key Estimates
Impairment of Non-Current Assets
The Company assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to an
impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use
calculations performed in assessing recoverable amounts incorporate a number of key estimates.
Debtors (Bad Debt Provision)
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision
is assessed by taking into account the recent sales experience, historical collection rates and specific knowledge of the indi-
vidual debtors’ financial position.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which
goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to
arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash
flows are less than expected, a material impairment loss may arise.
Page 35 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT.)
Taxation
The Group’s accounting policy for taxation requires management’s judgment in assessing whether deferred tax assets and
deferred tax liabilities are recognized in the Statement of Financial Position. Deferred tax assets, including those arising from
un-recouped tax losses and temporary differences are recognized only where it is considered more likely than not that they
will be recovered, which is dependent upon the generation of sufficient future taxable profits.
Assumptions about the generation of future profits depend upon management’s estimates of future profitability and cash
flows. These depend upon estimates of future income, operating costs, capital expenditure, dividends and other capital
management transactions. Judgments and assumptions are also required in relation to the application of income tax legisla-
tion. These judgments and assumptions are subject to risk and uncertainty. Therefore there is a possibility that changes in
circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recog-
nized in the Statement of Financial Position and the amount of tax losses and temporary differences not yet recognized. In
such circumstances, some or all of the carrying amounts of recognized deferred tax assets and liabilities may require ad-
justment, resulting in a correction to the Statement of Comprehensive Income.
Recoverability of Work in Progress
The Company assesses work in progress on a monthly basis to determine whether the amounts accrued are recoverable to the
Group when billed to customers. At the reporting date, the directors believe that the carrying value of work in progress is
recoverable in full.
Valuation of Provisions
The Company has assessed the value of provisions at the reporting date in line with the accounting policy at Note 1(r).
NOTE 3: FINANCIAL RISK MANAGEMENT
Risk management is the role and responsibility of the board. The Group’s current activities expose it to minimal risk.
However, as activities increase there may be exposure to credit, liquidity, foreign currency and interest rate risks.
(a)
Credit Risk
The Group has no significant concentrations of credit risk and as such, no sensitivity analysis is prepared by the Group. The
ageing of the Group’s trade and other receivables net of bad debt provisions at the reporting date is:
2016
2015
Current
30 - 60 days
60 - 90 days
More than 90 days
$
5,044,156
580,481
324,828
208,304
6,157,769
$
2,426,994
225,451
7,574
36,865
2,696,884
The directors believe that the above stated balances are fully recoverable.
(b) Liquidity
Prudent liquidity risk management implies maintaining sufficient cash to meet commitments as and when they fall due. The
Group manages liquidity risk by preparing forecasts and monitoring actual cash flows and requirements for future capital
raisings. The Group does not have committed credit lines available, which is appropriate given the nature of its operations.
Surplus funds are invested in a cash management account with Westpac Banking Corporation, St George and HSBC which is
available as required.
The material liquidity risk for the Group is the ability to raise equity or access debt finance as required in the future.
Page 36 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 3: FINANCIAL RISK MANAGEMENT (CONT.)
(c) Interest rate risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in market rates and the effective weighted average interest rates on classes of financial assets and financial liabilities,
is:
1 year or less
Floating Inter-
est Rate
$
Fixed
Interest
Rate
$
Non
Interest
Bearing
$
Over 1 to
5 years
Non
Interest
Bearing
$
1,102,024
-
-
1,102,024
0.75%
-
-
-
Nil
-
-
-
-
-
-
-
1,976,302
6,298,691
273,602
8,548,595
(5,018,996)
-
(5,018,996)
-
-
-
-
-
-
-
Total
$
3,078,326
6,298,691
273,602
9,650,619
(5,018,996)
-
(5,018,996)
30 June 2016
Financial assets
Cash and deposits
Current receivables
Other assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Borrowings
Weighted average interest rate
Net financial assets / (liabilities)
1,102,024
-
3,529,599
-
4,631,623
The directors do not consider the results of the Group to be subject to significant sensitivity arising from interest rate risks.
1 year or less
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non
Interest
Bearing
$
Over 1 to 5
years
Non
Interest
Bearing
$
Total
$
2,632,960
-
2,632,960
0.1%
-
-
Nil
89,339
-
89,339
-
2,810,250
2,810,250
-
-
-
2,722,299
2,810,250
5,532,549
-
-
(3,692,872)
(3,692,872)
-
-
(3,692,872)
(3,692,872)
30 June 2015
Financial assets
Cash and deposits
Current receivables
Weighted average interest rate
Financial liabilities
Trade and other payables
Weighted average interest rate
Net financial assets / (liabilities)
2,632,960
89,339
(882,622)
-
1,839,677
Page 37 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 3: FINANCIAL RISK MANAGEMENT (CONT.)
(d) Foreign currency risk
The Group has subsidiaries in Sri Lanka, Singapore and New Zealand, which serves primarily as service and support centres.
As all intercompany loans are repayable in AUD$, the group is not materially exposed to foreign currency risk.
(e) Fair value hierarchy
The Group has not disclosed the fair values for financial instruments such as short-term trade receivables and payables be-
cause their carrying amounts are a reasonable approximation of their fair values.
Page 38 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 4: SEGMENT INFORMATION
The segment information provided to the Board of directors, for the reportable segments is as follows:
30 June 2016
Revenue from exter-
nal customers
Other income
Total Reportable
Segment results
Total segment assets
Total segment liabilities
30 June 2015
Recurring
Services
$
Professional
Services
$
Technology
Sales
$
4,827,672
10,741,641
18,365,037
Unallocated
$
-
Total
$
33,934,350
-
-
-
222,646
222,646
1,778,251
963,751
3,220,971
(6,625,726)
(662,753)
-
-
-
-
-
-
25,690,861
8,448,901
25,690,861
8,448,901
Recurring
Services
$
Professional
Services
$
Technology
Sales
$
Unallocated
$
10,465
373,746
Total
$
3,116,635
373,746
-
-
221,407
1,298,215
429,143
363,816
(18,079,771)
(17,418,279)
1,176,428
2,317,519
3,681,166
1,951,228
6,434,826
4,724,340
Page 39 of 61
Revenue from external customers
236,777
940,877
1,928,516
Other income
Total Reportable Segment results
Total segment assets
Total segment liabilities
-
76,269
279,017
26,450
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 5: PARENT ENTITY DETAILS
Summarised presentation of the parent entity, MOQ Limited:
(a) Summarised statement of financial position
Assets
Current assets
Non current assets
Total assets
Liabilities
Current liabilities
Non current liabilities
Total liabilities
Net assets
Equity
Share Capital
Reserves
Accumulated losses
Total equity
(b) Summarised statement of comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
(c) Guarantees entered into by the parent
The parent has not entered into any guarantees.
(d) Contingent liabilities of the parent
The parent does not have any contingent liabilities.
(e) Commitments of the parent
The parent does not have any commitments.
NOTE 6: REVENUE AND OTHER INCOME
(a) Revenue from operations
(b) Other income
Interest received
Other income
2016
$
3,408,248
15,007,478
18,415,726
2015
$
1,099,285
930,197
2,029,482
(1,113,951)
(550,695)
-
(1,113,951)
17,301,775
-
(550,695)
1,478,787
49,365,752
8,665
(32,072,642)
17,301,775
33,293,476
8,665
(31,823,354)
1,478,787
(249,288)
(17,561,825)
-
-
(249,288)
(17,561,825)
2016
$
33,934,350
2015
$
3,116,635
7,055
215,591
222,646
27,543
346,203
373,746
Total revenue and other income
34,156,996
3,490,381
Page 40 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 7: OPERATING LOSS
Loss before income tax includes the following expenses:
(a) Cost of sales
Technology
Recurring services
Professional services
(b) Depreciation – office equipment and software
(c) Employee benefits, other labour and related expenses
Wages and salaries
Superannuation
Other employee benefits expenses
(d) Legal costs^
(e) Professional fees
Consultants fees*
Compliance fees*
Other fees*
2016
$
15,144,066
3,049,421
9,777,890
27,971,377
110,009
2,869,523
283,170
1,261,317
4,414,010
33,978
107,033
230,284
-
337,317
2015
$
1,564,700
160,508
719,470
2,444,678
9,048
707,937
36,611
78,742
823,290
233,843
157,787
183,105
125,487
466,379
*Largely relates to the acquisition of TETRAN and Skoolbag in the current year and Tech Effect and Breeze in the prior year.
^ Expenses in FY15 largely relating to the acquisition of Tech Effect and Breeze.
NOTE 8: IMPAIRMENT
Impairment of Goodwill
Impairment of Intellectual Property
Impairment of Property, Plant and Equipment
Total Impairment*
2016
$
2015
$
16,348,780
63,636
4,587
16,417,003
-
-
-
-
* The acquisition of Tech Effect and Breeze were funded by a combination of cash payment and shares issued in the Company.
Goodwill was recognised on acquisition, being the excess of the cost of acquisition over the net assets acquired. The Board
took a conservative view and decided to impair goodwill in full at the financial year ended 30 June 2015. As such the 30 June
2015 consolidated financial year loss included impairment of goodwill, intellectual property and plant and equipment totalling
$16,417,003.
NOTE 9: INCOME TAX
(a) The components of tax income / (expense) comprise:
Current tax
Deferred tax
2016
$
(216,562)
344,711
128,149
2015
$
(179,011)
267,165
88,154
Page 41 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 9: INCOME TAX (CONT.)
(b) Numerical Reconciliation of Income Tax Expense to Prima Facie Tax Payable
Loss before income tax expense
Income tax calculated at 30% (2015: 30%)
Tax effect of amounts which are not taxable income
Tax loss not recognised
Income tax benefit
The applicable weighted average effective tax rates are as follows:
(c) Tax effects relating to other comprehensive income
There is no tax effect relating to components of other comprehensive income.
2016
$
(662,753)
198,826
(70,677)
-
128,149
(19.3%)
2015
$
(17,418,279)
(17,418,279)
5,235,466
78,172
88,154
(0.5%)
(d) Tax losses
Approximate unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at 30% (2015: 30%)
-
-
260,573
78,172
Tax losses related to the entity prior to the reconstruction that were not used have been lost in accordance with the continuity of
business rules under the Australian Taxation legislation.
NOTE 10: CASH AND CASH EQUIVALENTS
Cash at bank
Term deposit
$
NOTE 11: TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for doubtful debts
Other receivables
Current tax receivable
Accrued revenue
2016
$
3,078,326
-
3,078,326
2015
$
2,632,960
89,339
2,722,299
2016
$
5,701,823
(206,112)
662,058
6,157,769
-
140,922
140,922
2015
$
2,606,815
(3,200)
93,269
2,696,884
113,366
216,059
329,425
6,298,691
3,026,309
Management believes that any debts that have not provided for and are past due by more than 30 days are still collectible in full
based on historic payment behaviour.
Page 42 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 12: WORK IN PROGRESS
Work In Progress
$
NOTE 13: OTHER ASSETS
(a) OTHER ASSETS - CURRENT
Deposits
Inventory
Prepayments
Other
(b) OTHER ASSETS – NON-CURRENT
Deposits
NOTE 14: DEFERRED TAX ASSETS
Deferred Tax Assets (refer Note 9)
$
NOTE 15: PROPERTY, PLANT AND EQUIPMENT
At 30 June 2016
Cost
Accumulated depreciation
Accumulated impairment
At 30 June 2015
Cost
Accumulated depreciation
Accumulated impairment
2016
$
220,676
220,676
2015
$
146,845
146,845
2016
$
2,289
19,420
251,452
441
273,602
187,540
187,540
2016
$
723,847
723,847
2015
$
13,736
-
164,021
-
177,757
-
-
2015
$
267,165
267,165
Leasehold
Improvements
$
299,619
(54,893)
-
244,726
Leasehold
Improvements
$
-
-
-
-
Office
Equipment &
Software
$
734,769
(527,145)
-
207,624
Office
Equipment &
Software
$
184,825
(85,787)
(4,587)
94,451
Total
$
1,034,388
(582,038)
-
452,350
Total
$
184,825
(85,787)
(4,587)
94,451
Page 43 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 15: PROPERTY, PLANT AND EQUIPMENT (CONT.)
Reconciliation of carrying amounts at the beginning and end of the year:
At 1 July 2015
Additions (1)
Disposals
Depreciation
Impairment due to Administration
At 30 June 2016
(1) Acquired as part of the acquisition of TETRAN group.
At 1 July 2014
Additions (1)
Disposals
Depreciation
Impairment due to Administration
At 30 June 2015
(1) Acquired as part of the acquisition of Tech Effect and Breeze.
NOTE 16: INTANGIBLE ASSETS
Maintenance Contracts and software at cost
Accumulated impairment
Goodwill on acquisition of TETRAN Group (refer Note 32)
Goodwill on acquisition of Skoolbag (refer Note 32)
Intangible Property Acquired TETRAN Group (refer Note 32)
Intangible Property Acquired Skoolbag (refer Note 32)
Impairment Testing:
Leasehold
Improvements
$
Plant and
Equipment
$
-
299,619
-
(54,893)
-
244,726
94,451
168,289
-
(55,116)
-
207,624
Leasehold
Improvements
$
Plant and
Equipment
$
-
-
-
-
-
-
4,587
143,333
(39,834)
(9,048)
(4,587)
94,451
Total
$
94,451
467,908
-
(110,009)
-
452,350
Total
$
4,587
143,333
(39,834)
(9,048)
(4,587)
94,451
2016
$
-
-
9,339,308
4,650,428
223,821
242,272
14,455,829
2015
$
(63,636)
(63,636)
-
-
-
-
-
Goodwill arising from a business combination is allocated to CGUs (cash generating units) or groups that are expected to
benefit from the synergies of the combination. Accordingly, TETRAN’s CGU includes certain MOQdigital income. For the
purposes of impairment testing, goodwill has been allocated to MOQ’s CGUs as follows:
TETRAN
Skoolbag
2016
$
9,339,308
4,650,428
The recoverable amounts were based on fair values estimated using discounted cash flows.
Page 44 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 16: INTANGIBLE ASSETS (CONT.)
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key as-
sumptions represents management’s assessment of future trends in the ICT industry and have been based on data from both
external and internal sources.
TETRAN
Discount rate
Terminal Value Growth Rate
Skoolbag
Discount rate
Terminal Value Growth Rate
2016
15%
1%
2016
15%
1%
The discount rate was a post-tax measure estimated based on a conservative mix of historical weighted average cost of capital
and debt.
The cashflow projections included specific estimates for 1 year for TETRAN and 2 years for Skoolbag. The basis of estimation
of the one and two-year cash flows uses the following key operating assumptions:
One and two year budgeted EBITDA is based on management’s forecasts of revenue from its operating segments. Revenue
forecasts take into account historical revenue and consider external factors such as market sector.
Costs are calculated taking into account historical margins, known increases and estimated inflation rates over the period.
The estimated recoverable amount of the CGUs exceeded their carrying amounts by $9.99 million for TETRAN and $1.77
million for Skoolbag. Management recognises that actual results (EBITDA) may vary to what has been estimated. Management
has identified that a possible change in either of two key assumptions could cause the carrying amount to exceed the recoverable
amount. The following table shows the amount by which these two assumptions would need to change individually for the
estimated recoverable amount to be equal to the carrying amount.
Discount Rate
Budgeted EBITDA growth rate
NOTE 17: TRADE AND OTHER PAYABLES
Trade creditors
Other payables and accrued expenses*
TETRAN
2016
19%
77%
Skoolbag
2016
8%
57%
2016
$
2,716,459
2,302,537
5,018,996
2015
$
2,494,566
1,198,306
3,692,872
There are no trade and other payables that are considered past due.
*There is an amount owing in relation to TETRAN working capital estimated to be $920,000 which is yet to be finalised.
Page 45 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 18: DEFERRED REVENUE
CURRENT
Unearned income – subscription, consulting and licenses
NON-CURRENT
Unearned income – consulting and licenses
NOTE 19: PROVISIONS
CURRENT
Employee entitlements
-
-
Provision for Annual Leave
Provision for Long Service Leave
NON-CURRENT
Employee entitlements
-
Provision for Long Service Leave
2016
$
2,029,235
2,029,235
-
-
2015
$
294,569
294,569
14,325
14,325
2016
$
2015
$
814,573
538,048
1,352,621
48,049
48,049
497,602
224,972
722,574
-
-
The Company changed its method of providing for long service leave in 2016 resulting in an increase in the provision.
Employee provisions includes the total amount accrued for annual leave entitlements and the amounts accrued for long service
leave entitlements that have vested due to employees having completed the required period of service. Based on past experi-
ence, the company does not expect the full amount of annual leave or long service leave balances classified as current liabilities
to be settled within the next 12 months. However, these amounts must be classified as current liabilities since the company does
not have an unconditional right to defer the settlement of these amounts in the event employees wish to use their leave enti-
tlement.
Page 46 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 20: SHARE CAPITAL
(a)
Details of share issues
For the 2016 financial year:
Date
Details
Jul-15
Sep-15
Apr-16
May-16
May-16
Balance at the beginning of the year
Securities issued for exercise of options
Securities issued for exercise of options
Capital raising pursuant to the offer under the prospectus dated
24 March 2016
Capital raising pursuant to the offer under the prospectus dated
24 March 2016
Consideration shares for TETRAN group of companies
May-16
Consolidation of shares on a 10:1 basis
Jun-16
Jun-16
Performance shares accrued Skoolbag*
Performance shares accrued TETRAN*
Capital raising costs
Total share capital
Share
Price $
No. of
Shares
Issue Value
$
1,073,671,213
833,333
33,285,143
8,333
2,499,999
25,000
0.01
0.01
0.0275
161,454,545
4,440,000
0.0275
165,818,182
4,560,000
0.035
142,857,144
5,000,000
-
(1,392,420,858)
-
0.04
0.035
-
-
1,500,000
1,000,000
(452,724)
154,713,558
49,365,752
Holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share
at shareholder meetings, otherwise each member present at a meeting or by proxy has one vote on a show of hands. In the event
of the winding up of the Company, ordinary shareholders rank after creditors and share in any proceeds on winding up in
proportion to the number of shares held.
*Please refer to Notes 32 and 33 for additional information on the Performance shares for TETRAN and Skoolbag.
Comparative information for share issues occurring in the 2015 financial year:
Date
Details
Jul-14
Jul-14
May-15
May-15
May-15
Balance at the beginning of the year
Securities offered pursuant to the First Placement
Securities offered pursuant to the Second Placement
Capital raising pursuant to the offer under the prospectus dated
17 April 2015
Capital raising pursuant to the offer under the prospectus dated
17 April 2015
Conversion offered to Savvy By Nature Pty Ltd
Share
Price $
No. of
Shares
Issue Value
$
0.0025
15,409,857
150,000,000
13,636,115
375,000
0.0100
150,000,000
1,500,000
0.0350
114,285,714
4,000,000
0.0250
12,000,000
300,000
0.0280
2,242,857
62,800
May-15
Consideration shares for Technology Effect Pty Ltd
0.0200
441,399,450
8,827,989
May-15
Consideration shares for Breeze Training Pty Ltd
0.0300
141,666,667
4,250,000
Jun-15
Exercise of options
Capital raising costs
Total share capital
0.0100
46,666,668
466,667
(133,428)
1,073,671,213
33,285,143
Page 47 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 20: SHARE CAPITAL (CONT.)
(b)
Options
ASX Code
MOQOPT8
MOQOPT6
MOQOPT7
Balance at
30/06/2015
28,333,3331*
166,667*
166,667*
Balance at
30/06/2016
2,500,000
16,667
16,667
Exercise price
$0.10
$7.00
$7.00
Expiry
30/06/2017
12/02/2017
12/02/2018
A summary of the movements of all company options issues is as follows:
Options outstanding at 30 June 2015
Granted
Forfeited
Exercised
Consolidation of options on 10:1 basis
Expired
Options outstanding at 30 June 2016
Options exercisable as at 30 June 2016
Options outstanding at 30 June 2014
Granted
Forfeited
Exercised
Expired
Options outstanding at 30 June 2015
Options exercisable as at 30 June 2015
(d)
Capital management
No. of
Options
Weighted Average
Exercise Price
28,833,333
-
-
(3,333,332)
(22,800,000)
(166,667)
2,533,334
2,533,334
$0.01
-
-
$0.01
$0.70
$0.01
$0.19
No. of
Options
Weighted Average
Exercise Price
500,001
75,000,000
-
(46,666,668)
-
28,833,333
28,833,333
$0.70
$0.01
-
$0.01
-
$0.01
$0.01
Management controls the capital of the Group in order to generate long-term shareholder value and ensure that the Group can
fund its operations and continue as a going concern.
The Group’s capital includes ordinary share capital supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
* Number of options prior to consolidation of shares on a 10:1 basis that occurred on 30th May 2016
Page 48 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 20: SHARE CAPITAL (CONT.)
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure
in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to
shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
NOTE 21: RESERVES
Reserves at the beginning of financial year
Option Premium Reserve
Foreign Exchange Translation Reserve
Reserves at end of financial year
NOTE 22: ACCUMULATED LOSSES
Accumulated losses at beginning of financial year
Net (loss) for the year after income tax
Accumulated losses at end of financial year
NOTE 23: FRANKING CREDITS
Franking credits available for subsequent financial years
based on a tax rate of 30%
NOTE 24: KEY MANAGEMENT PERSONNEL DISCLOSURE
Compensation received by key management personnel of the consolidated
entity:
Short term employee benefits
Bonus payments
Other short term employee benefits
Post employment benefits
Termination benefits
2016
$
8,665
-
(6,198)
2,467
2015
$
6,790
1,875
-
8,665
2016
$
(31,591,655)
(534,604)
(32,126,259)
2015
$
(14,261,530)
(17,330,125)
(31,591,655)
2016
$
2015
$
699,679
232,509
2016
$
1,357,851
-
-
117,595
-
1,475,446
2015
$
203,129
56,831
152,158
22,326
-
434,444
Short-term employee benefits
These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as all salary, paid
leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the current-year’s estimated cost of providing for the Group’s superannuation contributions made during the
year.
Page 49 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
24: KEY MANAGEMENT PERSONNEL DISCLOSURE (CONT.)
Other long-term benefits
These amounts represent long service leave benefits accruing during the year, long-term disability benefits and deferred bonus
payments.
Further information in relation to KMP remuneration can be found in the directors’ report.
NOTE 25: RELATED PARTY TRANSACTIONS
(a)
The Group’s main related parties are as follows:
(i)
Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the
entity, directly or indirectly, including any director (whether executive or otherwise) of that entity, are con-
sidered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 24.
(ii)
Other related parties:
Other related parties include entities over which key management personnel have joint control.
(b)
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Advisory fee to MPC Strategic Solutions Pty Ltd (an entity related to
Monash Private Capital Pty Ltd and Director, Joseph Fridman)
Receipt of $90,000 in settlement of the transaction of Breeze Training
Pty Ltd (an entity related to Director Nicki Page) to the Group
Repayment of a $500,000 syndicate loan (the Syndicate was headed by
Pager Partners, an entity related to Jonathan Pager). The loan was set-
tled with $111,929 in cash and $388,071 in equity
2016
$
-
-
-
2015
$
(100,000)
90,000
(500,000)
(c)
Loans to/from related parties:
There are no amounts outstanding or payable to related parties as at 30 June 2016 (2015: $Nil).
Page 50 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 26: AUDITOR’S REMUNERATION
Amounts paid / payable to Stantons International for audit and review work under-
taken under the Corporation Act 2001
Auditing or reviewing the financial report
Investigating Accountants report
Completion accounts audit
2016
$
2015
$
64,064
-
10,000
74,064
60,896
12,485
-
73,381
NOTE 27: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The company notes that there may be a contingent liability in respect of working capital adjustment in relation to the TETRAN
acquisition, as adjustment is subject to finalisation with vendors and may vary.
The company also notes that there may be a contingent liability in respect of the issue of shares related to performance hurdles
in Skoolbag, subject to performance exceeding expectations.
NOTE 28: CAPITAL AND LEASING COMMITMENTS
Operating lease commitments
Payable - minimum lease payments
- not later than 1 year
- later than 1 year and not later than 5 years
- later than 5 years
NOTE 29: LOSS PER SHARE
(a) Basic (loss) per share (cents per share)
From continuing operations
(b) Diluted (loss) per share (cents per share)
From continuing operations
(c) Reconciliation of (loss) in calculating earnings per share
Basic and diluted (loss) / profit per share
Loss from continuing operations attributable to ordinary equity holders
(d) Total shares
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings / (loss) per share
2016
$
436,374
959,010
-
1,395,384
2015
$
317,900
978,775
20,825
1,317,500
2016
$
2015
$
(0.05)
(4.8)
(0.05)
(4.8)
(540,802)
(17,330,125)
1,030,297,149
363,207,397
Weighted average number of ordinary shares outstanding during the year
used in the calculation of diluted earnings / (loss) per share
1,030,297,149
363,207,397
Page 51 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 30: DISCONTINUED OPERATIONS
There were no discontinued operations in 2016 or 2015.
NOTE 31: CASH FLOW INFORMATION
Reconciliation of net cash provided by operating activities
to net (loss) / profit after tax
(Loss) / profit for the period after tax
Add back: Income tax credit
(Loss) / profit for the period before tax
Non cashflows and non-operating cashflows in profit / (loss):
Depreciation
Impairment losses – Goodwill
Impairment losses – Property Plant Equipment
Impairment losses – Intellectual Property
(Gains) / Losses on disposal of fixed assets
Assets acquired
Other items
Change in assets and liabilities:
Decrease / (Increase) in trade debtors
Decrease / (Increase) in work in progress
Decrease / (Increase) in current tax receivable
Decrease / (Increase) in other current assets
Decrease / (Increase) in deferred tax assets
Increase / (Decrease) in payables
Increase / (Decrease) in loans
Increase / (Decrease) in other liabilities
Increase / (Decrease) in unearned revenue
Increase / (Decrease) Short term borrowings
Increase / (Decrease) in provision for employee entitlements
2016
$
(534,604)
(128,149)
(662,753)
110,009
-
-
-
-
(345,261)
-
(779,977)
(73,831)
113,366
304,314
(344,711)
(461,561)
-
-
26,872
-
482,822
2015
$
(17,330,125)
(88,154)
(17,418,279)
9,048
16,348,780
4,587
63,636
58,689
(143,333)
198,761
(196,884)
(146,845)
(69,154)
(177,757)
(24,116)
(609,245)
-
-
308,894
-
722,574
Cash flow from operations
(1,630,711)
(1,070,644)
Page 52 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 32: ACQUISITION OF TETRAN GROUP AND SKOOLBAG
On 3 March 2016, the Company announced that it had signed separate binding heads of agreement were signed to acquire
100% of the issued capital of two businesses, Skoolbag (“iimage Technical Services Pty Ltd”) and TETRAN group of
companies.
On 12 April 2016 and 23 May 2016, the Board of the Company advised that it had acquired 100% of the shares of Skoolbag
and TETRAN following completion of the capital raising and satisfaction/waiver of all condition precedents.
Details of the business combination are as follows:
Fair value of consideration for businesses acquired
Amount settled in cash and shares
Recognised amounts of identifiable net assets
Cash and cash equivalents
Trade and other receivables
Deferred tax assets
Total current assets
Property, plant and equipment
Intangible Assets
Total non-current assets
Trade and other payables
Total current liabilities
Identifiable net assets
Goodwill on acquisition
Consideration transferred settled in cash
Cash and cash equivalents acquired
Stamp duty on acquisition
Net cash paid relating to the acquisition
TETRAN
$
10,900,000
913,322
1,690,989
78,633
2,682,944
122,334
223,821
346,155
(1,468,407)
(1,468,407)
1,560,692
9,339,308
(3,990,000)
913,322
(50,881)
(3,127,559)
Skoolbag
$
3,987,869
12,494
206,141
33,337
251,972
-
242,272
242,272
(1,156,803)
(1,156,803)
(662,559)
4,650,428
(3,000,000)
12,494
(18,241)
(3,005,747)
Acquisition costs are not included as part of consideration transferred and have been recognised as an expense in the consol-
idated statement of profit or loss and other comprehensive income, as part of other expenses.
In relation to the acquisition of TETRAN, there is a maximum of 2,857,143 shares valued at $1,000,000 (based on a deemed
issue price of $0.35 per share) to be issued conditional upon TETRAN achieving certain EBITDA targets in FY16.
In relation to the acquisition of Skoolbag, there is a maximum of 7,500,000 shares valued at $3,000,000 (based on a deemed
issue price of $0.40 per share) available for issue conditional upon Skoolbag achieving certain performance targets in FY16 and
FY17. Based on information presently available, MOQ management’s current best estimate is that performance targets in
relation to 3,750,000 shares valued at $1,500,000 (based on a deemed issue price of $0.40 per share) will be achieved.
Set out below is the contribution for each subsidiary to the reporting entity’s profit from ordinary activities during the period
and the profit or loss of such entities during the whole of the previous corresponding period.
Financial period
Summarised Financial Performance
Revenue
(Loss)/Profit before tax
(Loss)/profit after tax
Other comprehensive income after tax
Total comprehensive (loss)/income
Profit/(loss) attributable to non-controlling interests
TETRAN
$
23/05/2016 to
30/6/2016
Skoolbag
$
12/04/2016 to
30/6/2016
991,617
129,177
117,400
-
117,400
-
371,708
(87,059)
(54,134)
-
(54,134)
-
Page 53 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 33: SHARE BASED PAYMENTS
On 23 May 2016, the Company issued 142,857,143 shares at $0.0035 per share totalling $5,000,000 as part consideration to
acquire TETRAN group of companies (refer note 34).
In relation to the acquisition of TETRAN, there is a maximum of 2,857,143 shares valued at $1,000,000 (based on a deemed
issue price of $0.35 per share) to be issued conditional upon TETRAN achieving certain EBITDA targets in FY16.
In relation to the acquisition of Skoolbag, there is a maximum of 7,500,000 shares valued at $3,000,000 (based on a deemed
issue price of $0.40 per share) available for issue conditional upon Skoolbag achieving certain performance targets in FY16 and
FY17. Based on information presently available, MOQ management’s current best estimate is that performance targets in
relation to 3,750,000 shares valued at $1,500,000 (based on a deemed issue price of $0.40 per share) will be achieved.
NOTE 34: CONTROLLED ENTITIES
Name of entity
iimage Technical Services Pty Ltd
TETRAN Pty Ltd
TETRAN NZ Limited
TETRAN (Singapore) Pte Limited
T.I.M. Asia Pacific (PVT) Limited
MOQdigital Pty Ltd
Breeze Training Pty Ltd
Pinnacle Software (Australia) Pty Ltd
OneBet IP Pty Ltd
OneBet Trading Pty Ltd
Equity holding
Country of
Incorporation
Australia
Australia
New Zealand
Singapore
Sri Lanka
Australia
Australia
Australia
Australia
Australia
Class of Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2016
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2015
-
-
-
-
-
100%
100%
100%
100%
100%
NOTE 35: EVENTS SUBSEQUENT TO REPORTING DATE
On 1 September 2016, an Employee Option Plan was introduced, which provided certain key management and employees with
3,690,901 unlisted and unvested options. These options have been issued in two separate tranches. Tranche 1 consists of
1,845,456 options, exercisable at $0.275 each, and vests after 24 months’ continuous service from date of issue. Tranche 2
consists of 1,845,445 options, exercisable at $0.275 each, and vests after 36 months’ continuous service from date of issue.
Both tranches expire on 1 September 2020.
Page 54 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
END OF AUDITED STATEMENTS
Page 55 of 61
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED) AND ITS CONTROLLED
ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
ABN: 94 050 240 330
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of MOQ Limited (the “Company”), the directors of the company declare
that:
1.
In the opinion of the directors of the Company, the financial statements and notes, as set out on pages 19 to 54 are
in accordance with the Corporations Act 2001 and
i.
ii.
comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the
financial statements, constitutes compliance with International Financial Reporting Standards
(IFRS); and
give a true and fair view of the financial position as at 30 June 2016 and of the performance for the
year ended on that date of the consolidated group;
2.
3.
4.
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as
and when they become due and payable;
the audited remuneration disclosures set out on pages 12 to 17 of the directors’ report comply with accounting
standard AASB 124 Related Party Disclosures and the Corporation Regulations 2001; and
the directors have been given the declarations required by s 295A of the Corporations Act 2001 from the Chief
Executive Officer.
On behalf of the Directors
David Shein
Non Executive Chairman
30 September 2016
Page 56 of 61
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
30 September 2016
Board of Directors
MOQ Limited
5a, 2 New McLean Street
Edgecliff, NSW 2027
Dear Sirs
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
RE: MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of MOQ Limited (formerly Montech Holdings
Limited).
As Audit Director for the audit of the financial statements of MOQ Limited (formerly Montech
Holdings Limited) for the year ended 30 June 2016, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours faithfully,
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LIMITED
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
MOQ LIMITED (FORMERLY MONTECH HOLDINGS LIMITED)
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Report on the Financial Report
We have audited the accompanying financial report of MOQ Limited (formerly Montech Holdings
Limited), which comprises the consolidated statement of financial position as at 30 June 2016, the
consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then
ended, notes comprising a summary of significant accounting policies and other explanatory
information and the directors’ declaration of the consolidated entity comprising the company and
the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ responsibility for the Financial Report
The directors of the Company are responsible for the preparation and fair presentation of the
financial report in accordance with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
the financial report that is free from material misstatement, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances. In note 1(a), the directors also state, in accordance with
Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial
report, comprising the financial statements and notes, complies with International Financial
Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. These Auditing Standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform
the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Liability limited by a scheme approved
under Professional Standards Legislation
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of MOQ Limited (formerly Montech Holdings Limited) is in accordance
with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
(b)
the consolidated financial report also complies with International Financial Reporting
Standards as disclosed in note 1(a).
Report on the Remuneration Report
We have audited the remuneration report included in pages 12 to 17 of the directors’ report for the
year ended 30 June 2016. The directors of the Company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards
Auditor’s opinion
In our opinion the remuneration report of MOQ Limited (formerly Montech Holdings Limited) for the
year ended 30 June 2016 complies with section 300A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
30 September 2016
MONTECH HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
ABN: 94 050 240 330
The following information is current as at 21 September 2016.
ORDINARY SHARES
154,713,558 fully paid ordinary shares held by 744 individual shareholders. All ordinary shares carry one vote per share.
UNQUOTED OPTIONS
The Company has on issue:
33,334 options exercisable at 70 cents expiring at various dates from 12 February 2017 across 1 holder.
2,500,000 options exercisable at 10 cents expiring on 30 June 2017 across 5 holders.
Options do not carry any votes
DISTRIBUTION OF HOLDERS FULLY PAID ORDINARY SHARES
Category
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Number of
holders
Number held
% of issued
shares
87
273
57
63
264
744
143,079,349
10,956,383
469,372
177,069
31,385
154,713,558
92.48
7.08
0.30
0.12
0.02
100.00
The number of holders who held less than a marketable parcel of shares was nil.
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders who have notified the Company in accordance with Section 671B of the Cor-
porations Act are:
Holder
MONASH PRIVATE CAPITAL PTY LTD
KATHY LOUISE EDWARDS
MR SCOTT MCPHERSON
NICOLA JANINE PAGE, MICHAEL ALEXANDER BADRAN & ASSO-
CIATED ENTITY (OSKA INDIA PTY LTD)
MATTHEW CHARLES GOGGIN & ROMILY JANE GOGGIN
No. of
ordinary shares
%
ordinary
shares
18,228,334
17,655,978
17,655,978
14,166,670
8,827,989
11.78
11.41
11.41
9.16
5.71
Page 60 of 61
MONTECH HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
ABN: 94 050 240 330
TOP 20 HOLDERS OF EQUITY SECURITIES
Holder
Shares
%
KATHY LOUISE EDWARDS
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
ANACACIA PTY LIMITED
DON FRANCIS NANAYAKKARA
NICOLA JANINE PAGE
1 MONASH PRIVATE CAPITAL PTY LTD
2
2 MR SCOTT MCPHERSON
3
4 MATTHEW CHARLES GOGGIN & ROMILY JANE GOGGIN
5
6
7
8 MICHAEL ALEXANDER BADRAN
9
10 KOMATIE PTY LTD
11 OSKA INDIA PTY LTD
12 DAVCOL NOMINEES PTY LTD
INFLECTION INVESTMENTS PTY LTD
13
13 UNITED EQUITY PARTNERS PTY LTD
14 HOLLOWAY COVE PTY LTD
JARREN INVESTMENTS PTY LTD
15
16 MR MARLON LUKE DE CRUZ DE CRUZ
17 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
18 MR KAI MYSLIWIECZ
19 MYALDALI PTY LTD
20 MERUMA PTY LTD
Top 20
All shareholders
18,228,334
17,655,978
17,655,978
15,862,452
8,827,989
7,272,728
5,696,262
5,520,835
5,520,835
4,610,331
3,539,028
3,125,000
2,500,001
2,074,320
1,980,000
1,800,000
1,583,334
1,197,679
1,062,912
609,625
601,194
570,000
127,494,815
154,713,558
11.78
11.41
11.41
10.25
5.71
4.70
3.68
3.57
3.57
2.98
2.29
2.02
1.62
1.34
1.28
1.16
1.02
0.77
0.69
0.39
0.39
0.37
82.41
100.00
Page 61 of 61