APPENDIX 4E
PRELIMINARY FINAL REPORT
Name of Entity:
MOQ LIMITED
ABN:
94 050 240 330
Reporting period:
Financial year ended 30 June 2018
Previous corresponding period:
Financial year ended 30 June 2017
1
For personal use only
Results for Announcement to the Market
Set out below are the unaudited statutory results for MOQ Ltd (“MOQ” or the “Company”) and its
controlled entities for the year ended 30 June 2018.
FY 2018
FY 2017
Movement %
59,133,415
2,167,434
54,869,005
757,719
8%
186%
1,129,181
100,976
1018%
1,129,181
100,976
1018%
n/a
n/a
0.70
-
0.68
-
2.71
n/a
n/a
0.06
-
0.06
-
2.17
-
-
1067%
-
1033%
-
25%
Revenue from ordinary activities
EBITDA
Net profit / (loss) from ordinary
activities after tax attributable to
members
Net profit / (loss) after tax at-
tributable to members
Interim dividend per share (fully
franked)
Final dividend per share (fully
franked)
Basic Earnings/(Loss) per share
(cents per share)
-Continuing operations
- Discontinuing operations
Diluted Earnings/(Loss) per share
(cents per share)
- Continuing operations
- Discontinuing operations
Net Tangible Asset Backing per
share (cents per share)
Dividend information
Interim dividend
Final dividend
The company does not have a dividend reinvestment plan.
Amount (cents
per share)
n/a
n/a
Record Date
Payment Date
n/a
n/a
n/a
n/a
2
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Commentary on operating results for the year
During FY18, MOQ Limited continued to improve key aspects of its business and financial per-
formance in line with our key objective to develop a high value, market leading publicly listed
technology company geared around servicing the needs of enterprises seeking to drive digital
transformation initiatives.
The trading results for FY18 are indicative of the organic improvement achieved across the
business over the recent past. Key features of FY18 financial performance include:
1. EBITDA Growth of 186% over FY17 to $2,167,434
2. Operating Cashflow improvement of 118% and Cash Balance growth by 21.4% to
$3,963,738
3. Overall revenue from ordinary activities growth of $4.2m, being an 7.8% increase on
FY17.
4. Operational Expenses decreased by 10.9%
5. Professional Services revenue growth of 20.7% over FY17.
6. Recurring Services revenue growth was a moderate 5.5% over FY17, however Q4 FY18
featured key milestones to influence accelerated growth moving forward including:
a. Within MOQdigital, the successful conversion of Managed Services opportunities
with over $11.7 Million of 3 and 5-year value, of Managed Services contracts
signed, and coming on line during H1FY19.
b. For Skoolbag, a price rise for the SAAS product, based on the provision of a new
platform and key features to customers, to date well accepted by the user com-
munity
7. The Business Services Stream, which drives our digital transformation specialisation
produced solid revenue growth of 37% over FY17, having closed out a range of major
projects for new and existing clients.
8. The NSW business has grown to provide 31% of total MOQdigital revenue contribution
As illustrated in the following chart, the trend in the business’ financial performance against the
corresponding periods back to FY16 illustrates the incremental improvement in EBITDA returns, a
focus during a 3 year period featuring a range of acquisitions, consolidation and integration.
3
For personal use only
MOQdigital
The MOQdigital business provides a range of services and solutions to enable digital business
transformation including consulting, integration, and managed services across applications, data
and infrastructure platforms.
For MOQdigital, some highlights for FY18 include:
1. Growth in Services directly related to client’s Digital Transformation initiatives –
there has been a significant market activity as enterprises assess, plan and execute digital
transformation projects. As a result, we have seen pleasing growth of services engage-
ments where MOQdigital has specialist capabilities to address this market – Applications,
Data and Analytics as well as Strategic Consulting and Program Management.
2. Managed Services Opportunity Pipeline Conversion – whilst we have experienced
lengthy sales cycles, a number of deals closed in Q4 FY18 and consequently we expect our
recurring services revenues to grow significantly in FY19, with contracted services to the
value of over $2,000,000 of revenue to come on line in H1FY19.
3. Continuing to build good momentum in the NSW market – as stated in our H1FY18
report, building our NSW business is a critical success factor for MOQdigital, so we are
encouraged at our progress, and look forward to additional growth in this market through
FY19.
4. The single largest deal win in MOQ history for Enzen (see ASX announcement – 19
June 2018) – estimated contract value for MOQdigital over initial term of 5 years is $12m,
and if Enzen does 3 year option extension, is $15m.
For MOQdigital, FY18 has been a period where business stability and positive momentum was
re-established and this groundwork started to reflect in the financial results and a growing market
presence.
SkoolBag
The SkoolBag business operates and develops a market leading Software-as-a-Service (“SaaS”)
communications platform, including mobile apps, primarily for School and Education customers
and also in the sports vertical.
For SkoolBag, some highlights for FY18 include:
1. Successful roll-out of version 3 of the SkoolBag communication platform - this up-
grade included a number of feature and usability enhancements, significant performance
and speed improvements, as well as optimisations to cloud based infrastructure and
scalability.
2. Release of new SkoolBag smartphone application - re-designed and re-built from the
ground up in the latest mobile technology. The new application taps into a range of native
mobile phone (Android and iOS) functionality, delivering an improved user experience
and a foundation upon which we can bring new and enhanced functionality to our cus-
tomers which was not possible from our existing application. Amongst improvements in
performance, design and technical capability, a major driver for the new technology behind
4
For personal use only
the app is that it provides the platform upon which seamless integration for partners and
new features becomes possible. SkoolBag has received considerable interest from partners
to integrate into the SkoolBag ecosystem and we are exploring a number of opportunities
that will bring added value to our customer base. (The new application has been released to
a subset of customers, with a full roll-out expected in late August).
Acquisition activities – MOQ has continued to actively pursue M&A opportunities, with ongoing
assessments of complementary businesses that have the potential to increase MOQ’s footprint and
capabilities, especially in NSW and Victoria.
Additional information
Additional Appendix 4E disclosures can be found in the Notes accompanying the Statement of Profit or
Loss and other comprehensive income and Statement of Financial Position.
This Appendix 4E is based on the 30 June 2018 financial report, which has been audited by Stantons
International Audit and Consulting Pty Ltd (Stantons International).
5
For personal use only
MOQ LIMITED
AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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
19
20
22
23
25
26
56
57
58
63
Page 2 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CORPORATE DIRECTORY
Board of Directors
Mr David Shein
Mr Joe D’Addio
Mr Scott McPherson
Mr Joey Fridman
Mr Michael Pollak
Company Secretary
Brad Cohen
Non Executive Chairman
Executive Director and Chief Executive Officer
Executive Director and Solutions Director
Non Executive Director
Non Executive Director
Auditors
Stantons International Audit and Consulting Pty Ltd
Level 2, 22 Pitt Street
Sydney NSW 2000
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
Suite 1, Ground Floor
3-5 West Street
North Sydney NSW 2060
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 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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
(“Company”) and its controlled entities for the financial year ended 30 June 2018. The information in the proceeding operating and
financial review forms part of this directors’ report for the financial year ended 30 June 2018 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
Mr Joe D’Addio
Mr Scott McPherson
Mr Joey Fridman
Mr Michael Pollak
Mr Don Francis Nanayakkara
Mr Jonathan Pager
Particulars
Non Executive Chairman
Executive Director and Chief Executive Officer
Executive Director and Solutions Director
Non Executive Director
Non Executive Director
Non Executive Director (resigned 5th July 2017)
Non Executive Director (resigned 31st July 2017)
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, 14 meetings of directors (including committees of directors) were held:
Director
Board Member Since
Eligible
Board
Meetings
Attended
Eligible
Audit and
Risk
Meetings
Attended
Eligible Remuneration
Meeting
Attended
Mr David Shein
Mr Joe D'Addio
Mr Scott McPherson
Mr Joey Fridman
Mr Michael Pollak
17 February 2014
29 May 2015
29 May 2015
17 February 2014
17 February 2014
Mr Jonathan Pager (resigned
31st July 2017)
17 February 2014
Mr Don Francis Nanayakkara
(resigned 5th July 2017)
20 May 2016
11
11
11
11
11
1
-
9
10
10
10
10
1
-
2
2
2
-
-
2
2
2
-
-
1
1
1
1
1
-
-
1
1
1
1
1
-
-
Page 4 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
Information Relating to Directors and Company Secretary
David Shein (Non Executive Chairman)
In June 1987, David, having recently migrated from South Africa, founded Com Tech Communications as a specialist supplier of
networking and communications products. 14 years later, Com Tech was sold to Dimension Data at an enterprise value of over
$1billion. At the time of sale, Com Tech employed over 1,400 people, had offices Australia wide and achieved revenues of $700
million with no external debt. David prides himself on the recognition Com Tech achieved being regularly recognised as one of the
leading companies to work for in Australia. Since then, David has been actively involved in mentoring young management teams.
David firmly believes while products and technologies come and go, what remains constant is the requirement for any company to
build a company that is fanatical about providing legendary customer service and creating an environment that enables an organisation
to attract and retain the best team of people. David has been an investor and mentor to a number of start-ups, many of which have been
successfully exited. These include Zipmoney, CalReply, Latam Autos, RangeMe, Pocketbook, Centric Wealth, MacromatiX and
Holly Connects. David is also Co-Founder of Our Innovation Fund, a $50million early stage venture capital fund that invests in ex-
citing Australian start-ups as well as a founding partner in the Israeli venture capital enterprise, OurCrowd, the first Global Equity
Based Crowd Funding Platform.
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
Chair of Remuneration Committee
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 approximately 20 years ago. Michael 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 has been involved in the restructuring, recapitalisation and relisting of a number of ASX listed entities.
Interests in shares and options:
2,130,000 fully paid ordinary shares
Other current directorships:
Former Directorships in last three years: UCW Limited (ASX: UCW) (Non-executive director)
Big Star Energy Limited (ASX: BNL) (Non-executive director)
Special responsibilities:
Janison Education Group Limited (ASX: JAN) (Non-executive director)
Chair of Audit and Risk Committee
Joey Fridman (Non-Executive Director)
Joey is the co-founder and Chief Executive Officer of Monash Private Capital Pty Limited, a Sydney-based independent financial
services firm investing across various asset classes as principal and through its managed funds. Joey is a director of various Monash
related companies, including Maia Financial, Credabl, Wentworth Williamson Funds, Our Innovation Fund and OurCrowd Australia.
Prior to establishing Monash Private Capital, Joey was Chief Financial Officer of Investec Bank (Australia) Limited, and prior to his
role as CFO, Joey was one of the founding members of the Bank’s investment banking division. Joey is a Chartered Accountant a nd
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:
Page 5 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Joe D’Addio (Executive Director and Chief Executive Officer)
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 industry, specifically with Com Te ch
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 Executive Officer, Member of Audit and Risk Committee
Scott McPherson (Executive Director and Solutions Director)
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, management 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.
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.
17,943,478 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 Chief Executive Officer of Skoolbag.
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 Mac-
quarie University, Sydney.
Page 6 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Principal Activities
The Group’s principal activities were the provision of group ownership, strategy and oversight over a number of software and
service enterprises.
Operating and Financial Review
During FY18, MOQ Limited continued to improve key aspects of its business and financial performance in line with our key
objective to develop a high value, market leading publicly listed technology company geared around servicing the needs of en-
terprises seeking to drive digital transformation initiatives.
The trading results for FY18 are indicative of the organic improvement achieved across the business over the recent past. Key
features of FY18 financial performance include:
1. EBITDA Growth of 186% over FY17 to $2,167,434
2. Operating Cashflow improvement of 118% and Cash Balance growth by 21.4% to $3,963,738
3. Overall revenue from ordinary activities growth of $4.2m, being an 7.8% increase on FY17.
4. Operational Expenses decreased by 10.9%
5. Professional Services revenue growth of 20.7% over FY17.
6. Recurring Services revenue growth was a moderate 5.5% over FY17, however Q4 FY18 featured key milestones to in-
fluence accelerated growth moving forward including:
a. Within MOQdigital, the successful conversion of Managed Services opportunities with over $11.7 Million of 3
and 5-year value, of Managed Services contracts signed, and coming on line during H1FY19.
b. For Skoolbag, a price rise for the SAAS product, based on the provision of a new platform and key features to
customers, to date well accepted by the user community
7. The Business Services Stream, which drives our digital transformation specialisation produced solid revenue growth of
37% over FY17, having closed out a range of major projects for new and existing clients.
8. The NSW business has grown to provide 31% of total MOQdigital revenue contribution
As illustrated in the following chart, the trend in the business’ financial performance against the corresponding periods back to
FY16 illustrates the incremental improvement in EBITDA returns, a focus during a 3 year period featuring a range of acquisi-
tions, consolidation and integration.
Page 7 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
MOQdigital
The MOQdigital business provides a range of services and solutions to enable digital business transformation including con-
sulting, integration, and managed services across applications, data and infrastructure platforms.
For MOQdigital, some highlights for FY18 include:
1. Growth in Services directly related to client’s Digital Transformation initiatives – there has been a significant
market activity as enterprises assess, plan and execute digital transformation projects. As a result, we have seen pleasing
growth of services engagements where MOQdigital has specialist capabilities to address this market – Applications, Data
and Analytics as well as Strategic Consulting and Program Management.
2. Managed Services Opportunity Pipeline Conversion – whilst we have experienced lengthy sales cycles, a number of
deals closed in Q4 FY18 and consequently we expect our recurring services revenues to grow significantly in FY19, with
contracted services to the value of over $2,000,000 of revenue to come on line in H1FY19.
3. Continuing to build good momentum in the NSW market – as stated in our H1FY18 report, building our NSW
business is a critical success factor for MOQdigital, so we are encouraged at our progress, and look forward to additional
growth in this market through FY19.
4. The single largest deal win in MOQ history for Enzen (see ASX announcement – 19 June 2018) – estimated con-
tract value for MOQdigital over initial term of 5 years is $12m, and if Enzen does 3 year option extension, is $15m.
For MOQdigital, FY18 has been a period where business stability and positive momentum was re-established and this ground-
work started to reflect in the financial results and a growing market presence.
SkoolBag
The SkoolBag business operates and develops a market leading Software-as-a-Service (“SaaS”) communications platform, in-
cluding mobile apps, primarily for School and Education customers and also in the sports vertical.
For SkoolBag, some highlights for FY18 include:
1. Successful roll-out of version 3 of the SkoolBag communication platform - this upgrade included a number of feature and
usability enhancements, significant performance and speed improvements, as well as optimisations to cloud based infra-
structure and scalability.
2. Release of new SkoolBag smartphone application - re-designed and re-built from the ground up in the latest mobile tech-
nology. The new application taps into a range of native mobile phone (Android and iOS) functionality, delivering an improved
user experience and a foundation upon which we can bring new and enhanced functionality to our customers which was not
possible from our existing application. Amongst improvements in performance, design and technical capability, a major driver
for the new technology behind the app is that it provides the platform upon which seamless integration for partners and new
features becomes possible. SkoolBag has received considerable interest from partners to integrate into the SkoolBag ecosystem
and we are exploring a number of opportunities that will bring added value to our customer base. (The new application has
been released to a subset of customers, with a full roll-out expected in late August).
3. Delivery of new major feature, the SkoolBag eNewsletter - this feature includes an easy to use content management inter-
face for schools – bringing a commonly antiquated, costly and environmentally unfriendly newsletter process for most schools,
into the digital age. Professionally designed newsletters can be created in minutes - with no prior expertise in digital publishing
required. These newsletters can be shared to the school community instantly, in a format that can be easily viewed on any
mobile, tablet, or PC.
Page 8 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
4. Continuing to build momentum on Family Essentials feature – following a successful beta launch of the Family Essentials
offering, SkoolBag continues to invest in this product as a commercially viable channel to bring further value to its large end
user base.
5. Samsung Electronics Australia Partnership - SkoolBag continues to showcase the portability of the SkoolBag App to smart
devices by partnering with Samsung Electronics Australia to bring the SkoolBag App to the Samsung Family Hub(™) Re-
frigerator range.
6. Investment in key roles to broaden capability – SkoolBag continues to recruit key hires into Engineering, Product, Sales and
Customer Relations roles in order to further develop and execute on its strategy. In FY19, SkoolBag will be focusing on:
a. Driving new sales of SkoolBag’s latest platform and new functionality;
b. Delivering further value to existing and prospective customers by enhancing the existing platform and features and
developing new products and services that are complementary to our existing communication product suite; and
c. Building out an eco-system of integration partners.
7. Increasing monthly recurring review (MRR) and average revenue per user (ARPU) - Over the past 6 years, SkoolBag has
kept its price constant. As a result of considerable enhancements and value add features, SkoolBag’s subscription pricing has
been increased to take into account both the new functionality as well as CPI increases. SkoolBag also continue to invest in
further initiatives to increase ARPU, for example, offering add-on features, expanding the Family Essentials offering and
exploring various commercial partnership opportunities.
Acquisition activities – MOQ has continued to actively pursue M&A opportunities, with ongoing assessments of complementary
businesses that have the potential to increase MOQ’s footprint and capabilities, especially in NSW and Victoria.
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.
Significant Changes in State of Affairs
There are no significant changes in the state of affairs of the group.
Dividends Paid or Recommended
In respect of the current year, no dividends have been declared or paid and none are recommended (2017: $nil).
Significant Events after the Reporting Period
On the 5th July 2018, 4,036,358 unlisted share options were issued to key employees of the Company at an exercise price of 25.5 cents
each. These options will expire on 1st July 2022.
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.
Page 9 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
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
Legal proceedings instituted in the prior year against a former client for termination of contract has settled out of court during the year.
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.
Auditor
Stantons International Audit and Consulting Pty Limited are the appointed auditors of the Company. The auditor has not been indem-
nified under any circumstance.
Non-audit Services
There have been no non-audit services provided during the year.
The board of directors considers that there have been no independence issues imposed by the Corporations Act 2001.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2018 can be found on page 56 of the financial report.
Page 10 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
DIRECTORS’ REPORT (CONT.)
Options
At the date of this report, the unissued ordinary shares of MOQ Limited under option are as follows:
Grant Date
01/09/2016
05/07/2018
TOTAL
Balance at the
date of this report
3,690,901
4,036,358
7,727,259
Exercise price
Expiry
$0.275
$0.255
01/09/2020
01/07/2022
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.
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 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 appro-
priate 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 remu-
neration 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), superannuation, 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.
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 per-
formance 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
2018 was 9.50% (2017: 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 practice, 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 remuneration 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 ex-
pansion 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 fol-
lowing 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 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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:
Personnel
Executive Directors
Mr Joe D’Addio
Mr Scott McPherson
Mr Don Nanayakkara
(resigned 5th July 2017)
Ms Nicola Page (resigned 27th
April 2017)
Non-executive Directors
Mr David Shein
Mr Joey Fridman
Mr Jonathan Pager
(resigned 31st July 2017)
Mr Michael Pollak
Key Management
Mr Matthew Goggin
(Director Sales)
Mr Chad Lurie
(GM Services)
Mr (Danny) Wan Yee Loh
(GM Finance)
Mr Mick Badran (CTO) (re-
signed 28th February 2017)
2018 Total
2017 Total
Year
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Short-term
benefits
Salary &
fees
Cash
Bonus
Other
pay-
ments
Post-employme
nt benefits
Superannua-
tion
Share
based
pay-
ments
Total
Perfor-
mance
based per-
centage of
remunera-
tion
200,000
200,000
236,000
233,000
13,699
321,256
-
262,797
54,795
56,530
60,000
60,000
20,000
60,000
54,795
54,795
236,000
233,000
200,000
200,000
192,231
184,000
-
151,010
1,267,520
2,016,388
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000(1)
-
15,000(1)
-
-
-
-
-
-
-
-
-
30,000
19,000
19,000
20,049
19,616
1,301
21,744
-
19,616
5,205
3,470
-
-
-
-
5,205
5,205
20,049
19,616
19,000
19,000
18,262
17,480
-
12,667
108,071
157,414
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,919
6,599
-
-
7,919
6,599
219,000
219,000
256,049
252,616
15,000
343,000
-
282,413
60,000
60,000
60,000
60,000
20,000
75,000
60,000
75,000
256,049
252,616
219,000
219,000
218,412
208,079
-
163,677
1,383,510
2,210,401
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4%
3%
-
-
-
-
(1) Other payments were fees for corporate advisory work undertaken.
Page 13 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED) (CONT.)
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Personnel
Fixed Remuneration
At Risk – Short Term Incen-
tives
At Risk - Options
Executive Directors
Mr Joe D’Addio
Mr Scott McPherson
Other Key Management Personnel
Mr Matthew Goggin
Mr Chad Lurie
Mr (Danny) Wan Yee Loh
100%
86%
86%
100%
96%
Service agreements (audited):
-
14%
14%
-
-
-
-
-
-
4%
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, and Mr Pollak - Base salary (including director’s fees) of $60,000 per annum (including superan-
nuation or similar contributions).
• 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 Director 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 6 months after the termination and cover up to all of Australia.
Key Management Personnel entered into service agreements on the following terms:
• Mr Goggin - Base salary of $200,000 per annum (plus superannuation or similar contributions).
• Mr Loh -Base salary of $196,000 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 up to 3 months’ written notice or make a
payment of up to 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.
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 6 months after the termination and cover up to all of Australia.
•
Mr Lurie – Base salary of $200,000 per annum (plus superannuation or similar contributions).
Page 14 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
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 Director 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 commencement, the Company will provide the Director with 6
months’ written notice, and thereafter with 2 months’ written notice.
Page 15 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
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 2018 reporting period held by each of the Group’s Directors and Key Management
Personnel, including their related parties, is set out below:
Personnel
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Joey Fridman
Mr Michael Pollak
Mr Matthew Goggin
Mr Chad Lurie
Mr Danny Loh
Personnel
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Joey Fridman
Mr Michael Pollak
Mr Matthew Goggin
Mr Danny Loh
Balance at the
start of the
year
-
-
-
-
-
-
-
181,818
Year ended 30 June 2018
Options
acquired
Received as part of
remuneration
Options exercised /
disposed
Held at the end of the
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
181,818
Balance at the
start of the year
Options
acquired
Received as part of
remuneration
Options exercised /
disposed
Held at the end of
the year
Year ended 30 June 2017
-
-
-
-
900,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
181,818
-
-
-
-
(900,000)
-
-
-
-
-
-
-
-
181,818
Page 16 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
REMUNERATION REPORT (AUDITED) (CONT.)
Name
Grant Date
Held at
1 July
2017
Granted as
remuneration
Net
change
other
Wan Yee
(Danny)
Loh
05-September-2016
90,909
05-September-2016
90,909
-
-
-
-
Held at
30
June
2018
90,909
90,909
Vested
during
the year
and as at
30 June
2018
Total
unvested
at 30
June
2018
Vesting Date
Expiry Date
Value per
option at
grant date
Total value of
options at
grant date
Exercise
price
per
option
-
-
90,909 01-September-2018 01-September-2020
$0.1045
$9,500.00
$0.275
90,909 01-September-2019 01-September-2020
$0.1045
$9,500.00
$0.275
*No other Key Management Personnel were granted remuneration options during the year.
Page 17 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 2018 reporting period held by each of the Group’s Key Man-
agement Personnel, including their related parties, is set out below:
Personnel
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Joey Fridman
Mr Michael Pollak
Mr Matthew Goggin
Mr Chad Lurie
Mr Danny Loh
Personnel
Mr Joe D’Addio
Mr Scott McPherson
Mr David Shein
Mr Joey Fridman
Mr Michael Pollak
Mr Matthew Goggin
Mr Chad Lurie
Mr Danny Loh
Balance at
the start of
the year
17,655,978
17,708,478
4,083,335
18,328,334
2,130,000
8,827,989
4,110,457
-
Received as
part of re-
muneration
-
-
-
-
-
-
-
-
Balance at
the start of
the year
17,655,978
17,655,978
4,083,335
18,328,334
1,980,000
8,827,989
3,539,028
-
Received as
part of re-
muneration
-
-
-
-
-
-
-
-
Year ended 30 June 2018
Acquired
Other
changes
-
-
-
-
-
-
-
-
235,000
-
-
-
-
-
-
Year ended 30 June 2017
Acquired(1)
Other
changes(2)
Disposal Held at the end
of reporting
period
17,655,978
17,943,478
4,083,335
18,328,334
2,130,000
8,827,989
4,110,457
-
-
-
-
-
-
-
-
-
Disposal Held at the end
-
-
-
-
-
-
-
-
52,500
900,000
571,429
-
-
-
-
-
(750,000)
-
-
-
of reporting
period
17,655,978
17,708,478
4,083,335
18,328,334
2,130,000
8,827,989
4,110,457
-
Other Equity-related KMP Transactions
There were no equity-related KMP transactions during the year.
Loans to KMP
No loans have been made to KMP during, or since, the year ended 30 June 2018 (2017: $Nil).
Other transactions with KMP or their related parties
No related party transactions included.
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of
Directors.
David Shein
Non-Executive Chairman
30 August 2018
Page 18 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 19 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Notes
2018
$
2017
$
Revenue
Revenue
Other income
Total Revenue
Cost of sales
Gross Profit
Expenses
Share based payments
Depreciation & amortisation expenses
Employee costs
Legal costs
ASX and registry related expenses
Marketing expense
Occupancy expenses
Professional fees
Telecommunication carrier expenses
Other expenses
Total expenses
Profit before impairment
Profit before income tax expense
Income tax (expense)
Profit after income tax
6
6
7
7
7
7
7
8
59,133,415
139,767
59,273,182
54,869,005
149,973
55,018,978
(47,525,863)
(43,344,464)
11,747,319
11,674,514
(160,750)
(611,779)
(5,815,013)
(81,153)
(48,667)
(609,643)
(1,080,323)
(319,494)
(340,293)
(1,111,265)
(111,630)
(519,007)
(7,303,695)
(128,949)
(65,979)
(490,113)
(861,191)
(303,434)
(375,366)
(1,260,754)
(10,178,380)
(11,420,118)
1,568,939
254,396
1,568,939
(439,758)
1,129,181
254,396
(153,420)
100,976
Other comprehensive profit for the year
Exchange differences on translating foreign subsidiaries
Total comprehensive profit/ (loss) for the year
7,779
1,136,960
(140,860)
(39,884)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Page 20 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Notes
2018
$
Profit is attributable to
MOQ Limited
Total comprehensive (loss) is attributable to
MOQ Limited
Earnings / (Loss) per share attributable to equity holders of
the parent entity
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
28
28
1,129,181
1,129,181
1,136,960
1,136,960
0.70
0.68
2017
$
100,976
100,976
(39,884)
(39,884)
0.06
0.06
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Page 21 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
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
Current tax payable
Non - Current Liabilities
Provisions
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Notes
9
10
11
12
12
13
14
15
16
17
18
8
18
19
20
21
2018
$
3,963,738
9,999,166
455,590
1,318,706
15,737,200
422,219
660,367
892,399
14,482,355
16,457,340
2017
$
3,265,859
8,172,252
309,578
648,499
12,396,188
377,460
687,884
525,536
14,142,826
15,733,706
32,194,540
28,129,894
8,325,577
3,021,008
1,705,113
172,893
13,224,591
7,361,808
1,712,654
1,413,944
-
10,488,406
108,533
77,782
13,333,124
10,566,188
18,861,416
17,563,706
49,615,752
141,766
(30,896,102)
18,861,416
49,615,752
(26,763)
(32,025,283)
17,563,706
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 22 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Balance as at 1 July 2017
Net profit for the year
Other comprehensive loss
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners
Issue of share capital
Option Premium Reserve
Capital raising costs
Issued Capital
Reserves
Accumulated Losses
Total Equity
$
$
$
$
49,615,752
(26,763)
(32,025,283)
17,563,706
-
-
-
-
-
-
-
-
7,779
7,779
-
-
160,750
-
1,129,181
-
1,129,181
-
-
-
-
1,129,181
7,779
1,136,960
-
-
160,750
-
Balance as at 30 June 2018
49,615,752
141,766
(30,896,102)
18,861,416
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 23 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Issued Capital
Reserves
$
$
Accumulated
Losses
$
Total Equity
$
Balance as at 1 July 2016
49,365,752
2,467
(32,126,259)
17,241,960
Net loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners
Issue of share capital
Option Premium Reserve
Capital raising costs
-
-
-
250,000
-
-
-
(140,860)
(140,860)
-
111,630
-
100,976
-
100,976
-
-
-
100,976
(140,860)
(39,884)
250,000
111,630
-
Balance as at 30 June 2017
49,615,752
(26,763)
(32,025,283)
17,563,706
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 24 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income taxes received / paid
Net cash provided by operating activities
Cash flow from investing activities
Payment for property plant and equipment
Payments for intellectual property
Payment for deposits
Cash on acquisition of controlled entities
Acquisition of subsidiaries
Net cash (used in) investing activities
Cash flow from financing activities
Proceeds from issue of shares
Share issued costs
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
2018
$
2017
$
64,524,345
(62,509,429)
13,284
(139,447)
1,888,753
57,736,151
(56,682,702)
15,683
(202,909)
866,223
30
(556,299)
(563,178)
(71,397)
-
-
(1,190,874)
-
-
-
697,879
3,265,859
3,963,738
(336,465)
-
(187,631)
-
(404,594)
(928,690)
250,000
-
250,000
187,533
3,078,326
3,265,859
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page 25 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 30th August 2018.
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
applicable.
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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 that 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 32.
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
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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
6.67 – 33.33%
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 to 8 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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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; and
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.
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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, 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 2018. 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, the
quantum, if any, should have no significant impact.
AASB 16: Leases
Applicable to annual reporting periods commencing on or after 1 January 2019. When effective, this Standard will replace the
current accounting requirements applicable to leases in AASB 117: Leases and related interpretations. AASB 16 introduces a
single lessee accounting model that eliminates the requirement for leases to be classified as either operating leases or finance
leases. Lessor accounting remains similar to current practice.
The main changes introduced by the new Standard are as follows:
(i)
(ii)
(iii)
recognition of the right-to-use asset and liability for all leases (excluding short term leases with less than 12
months of tenure and leases relating to low value assets);
depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease lia-
bility using the index or rate at the commencement date;
(iv)
application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead
account for all components as a lease; and
(v)
additional disclosure requirements.
The transitional provisions of AASB 16 allow a lease to either retrospectively apply the Standard to comparatives in line with
AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity at the date of
initial application.
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's financial statements, it is
impracticable at this stage to provide a reasonable estimate of such impact.
Page 36 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
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.
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 Profit or Loss and Comprehensive Income.
NOTE 3: FINANCIAL RISK MANAGEMENT
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).
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.
Page 37 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 3: FINANCIAL RISK MANAGEMENT
Determination of Intangible Property Acquired
The company has assessed the value of intangible property acquired from the acquisition of Skoolbag and Tetran using
management’s judgement in determining the fair values of the property acquired.
(a)
Credit Risk
The Group has no significant concentrations of credit risk other than one large debtor amount of $3.6m (36% of total trade
receivables as at 30/6/2018). As at the date of this report approximately $1.1m has been received, with a further $2m due to be
paid as per contract terms in early September 2018. As there are no other major concentration of debtors, no sensitivity
analysis has been prepared by the Group. The ageing of the Group’s trade and other receivables net of bad debt provisions at
the reporting date is:
Current
30 - 60 days
60 - 90 days
More than 90 days
2018
$
8,399,625
903,390
499,741
196,410
9,999,166
2017
$
7,159,229
487,918
154,535
370,570
8,172,252
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 has a committed credit line 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.
(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:
Page 38 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 3: FINANCIAL RISK MANAGEMENT (CONT.)
1 year or less
Floating Inter-
est Rate
$
Fixed
Interest
Rate
$
Non
Interest
Bearing
$
Over 1 to
5 years
Non
Interest
Bearing
$
Total
$
1,807,947
-
-
1,807,947
0%
-
-
-
Nil
-
-
-
-
-
-
-
2,155,791
9,999,166
1,318,706
13,473,663
-
-
422,219
422,219
3,963,738
9,999,166
1,740,925
15,703,829
(8,325,577)
-
(8,325,577)
-
-
-
(8,325,577)
-
(8,325,577)
30 June 2018
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)
1,807,947
-
5,148,086
422,219
7,378,252
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
Fixed
Interest
Rate
$
Floating In-
terest Rate
$
354
-
-
354
0%
-
-
-
Nil
-
-
-
-
-
-
-
Over 1 to 5
years
Non-Interest
Bearing
$
Non-Interest
Bearing
$
Total
$
3,265,505
8,172,252
648,499
12,086,256
-
-
377,460
377,460
3,265,859
8,172,252
1,025,959
12,464,070
(7,361,808)
-
(7,361,808)
-
-
-
(7,361,808)
-
(7,361,808)
30 June 2017
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)
354
-
4,724,448
377,460
5,102,262
Page 39 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 and as such, no
sensitivity analysis has been made by the Group.
(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 40 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 2018
Recurring
Services
$
Professional
Services
$
Technology
Sales
$
Revenue from external customers
11,358,397
18,124,518
29,650,500
Unallocated
$
-
Total
$
59,133,415
Other income
-
-
-
139,767
139,767
Total Reportable Segment results
2,326,283
3,967,355
5,313,914
(10,038,613)
1,568,939
Total segment assets
Total segment liabilities
-
-
-
-
-
-
32,194,540
13,333,124
32,194,540
13,333,124
30 June 2017
Recurring
Services
$
Professional
Services
$
Technology
Sales
$
Revenue from external customers
10,768,189
15,018,743
29,082,073
Unallocated
$
-
Other income
-
-
-
149,973
Total Reportable Segment results
3,234,011
3,210,306
5,080,224
(11,270,145)
Total segment assets
Total segment liabilities
-
-
-
-
-
-
28,129,894
10,566,188
Total
$
54,869,005
149,973
254,396
28,129,894
10,566,188
Page 41 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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)/ Profit for the year
Other comprehensive income for the year
Total comprehensive (loss)/ income 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 is not aware of 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
2018
$
2017
$
232,518
19,164,855
19,397,373
(224,998)
(1,372,854)
(1,597,852)
17,799,521
488,874
18,947,414
19,436,288
(129,718)
(1,377,674)
(1,507,392)
17,928,896
49,615,752
281,045
(32,097,276)
17,799,521
49,615,752
120,295
(31,807,151)
17,928,896
(290,124)
-
(290,124)
265,491
-
265,491
2018
$
59,133,415
2017
$
54,869,005
13,284
126,483
139,767
15,684
134,289
149,973
Total revenue and other income
59,273,182
55,018,978
Page 42 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 7: OPERATING PROFIT / LOSS
Loss before income tax includes the following expenses:
(a) Cost of sales
Technology
Recurring services
Professional services
(b) Depreciation – office equipment and software
Amortisation – intangible assets
(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
NOTE 8: INCOME TAX
(a) The components of tax (expense) comprise:
Current tax
Deferred tax
2018
$
24,336,586
9,032,114
14,157,163
47,525,863
367,566
244,213
611,779
4,242,663
357,929
1,214,421
5,815,013
2017
$
24,001,849
7,534,178
11,808,437
43,344,464
206,004
313,003
519,007
5,903,807
460,240
939,648
7,303,695
81,153
128,949
124,341
195,153
319,494
2018
$
(357,517)
(82,241)
(439,758)
97,833
205,601
303,434
2017
$
(117,457)
(35,963)
(153,420)
Page 43 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 8: INCOME TAX (CONT.)
(b) Numerical Reconciliation of Income Tax Expense to Prima Facie Tax Payable
Profit before income tax expense
Income tax calculated at 30% (2017: 30%)
Tax effect of amounts which are not taxable income
Tax loss not recognised
Income tax (expense)
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.
2018
$
1,568,939
(470,682)
30,924
-
(439,758)
(28.0%)
2017
$
254,396
(76,319)
(77,101)
-
(153,420)
(60.3%)
(d) Tax losses
Approximate unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at 30% (2017: 30%)
-
-
-
-
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.
(e) Current tax payable
Current tax payable is $172,893
NOTE 9: CASH AND CASH EQUIVALENTS
Cash at bank
$
NOTE 10: TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for doubtful debts
Other receivables
2018
$
3,963,738
2017
$
3,265,859
3,963,738
3,265,859
2018
$
10,061,201
(113,825)
51,790
9,999,166
2017
$
8,277,188
(144,528)
39,592
8,172,252
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.
Please refer to Note 3(a) for a further breakdown of the ageing of receivable amounts.
Page 44 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 11: WORK IN PROGRESS
Work In Progress
NOTE 12: OTHER ASSETS
(a) OTHER ASSETS - CURRENT
Deposits
Prepayments
Other
(b) OTHER ASSETS – NON-CURRENT
Deposits
NOTE 13: DEFERRED TAX ASSETS
Deferred Tax Assets
NOTE 14: PROPERTY, PLANT AND EQUIPMENT
$
$
2018
$
455,590
455,590
2017
$
309,578
309,578
2018
$
27,117
1,291,589
-
1,318,706
2017
$
-
648,499
-
648,499
422,219
422,219
377,460
377,460
2018
$
660,367
660,367
2017
$
687,884
687,884
At 30 June 2018
Cost
Accumulated depreciation
At 30 June 2017
Cost
Accumulated depreciation
Leasehold
Improvements
$
748,831
(266,432)
482,399
Leasehold
Improvements
$
298,817
(115,272)
183,545
Office
Equipment &
Software
$
1,119,186
(709,186)
410,000
Office
Equipment &
Software
$
889,002
(547,011)
341,991
Total
$
1,868,017
(975,618)
892,399
Total
$
1,187,819
(662,283)
525,536
Page 45 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 14: PROPERTY, PLANT AND EQUIPMENT (CONT.)
Reconciliation of carrying amounts at the beginning and end of the year:
At 1 July 2017
Additions
Disposals
Depreciation
At 30 June 2018
At 1 July 2016
Additions
Disposals
Depreciation
At 30 June 2017
NOTE 15: INTANGIBLE ASSETS
Goodwill on acquisition of TETRAN Group
Goodwill on acquisition of Skoolbag(1)
Intangible Property Acquired TETRAN Group
Intangible Property Acquired Skoolbag(1)
Intangible Property – Skoolbag software development
Impairment Testing:
Leasehold
Improvements
$
183,545
450,014
-
(151,160)
482,399
Leasehold
Improvements
$
244,726
-
(802)
(60,379)
183,545
Plant and
Equipment
$
341,991
294,649
(10,234)
(216,406)
410,000
Plant and
Equipment
$
207,624
279,992
-
(145,625)
341,991
Total
$
525,536
744,663
(10,234)
(367,566)
892,399
Total
$
452,350
279,992
(802)
(206,004)
525,536
2018
$
9,339,308
3,942,630
-
637,239
563,178
14,482,355
2017
$
9,339,308
3,942,630
74,607
786,281
-
14,142,826
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 – Managed Services
TETRAN – Professional Services
TETRAN - Technology
Skoolbag
2018
$
4,756,889
2,444,598
2,137,821
3,942,630
13,281,938
2017
$
4,756,889
2,444,598
2,137,821
3,942,630
13,281,938
Page 46 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 15: INTANGIBLE ASSETS (CONT.)
The recoverable amounts were based on fair values estimated using discounted cash flows.
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
2018
13%
2.5%
2018
13%
2.5%
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 3 years for TETRAN and 3 years for Skoolbag. The basis of estimation
of the four and three-year cash flows uses the following key operating assumptions:
- Three year budgeted EBITDA is based on management’s forecasts of revenue from its operating segments. Revenue fore-
casts 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 $12.58m million for TETRAN and
$14.07m for Skoolbag. Management recognises that actual results (EBITDA) may vary to what has been estimated. Man-
agement 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
Average Budgeted EBITDA growth
rate
TETRAN-Managed
Services
2018
14%
35%
TETRAN-Professional
Services
2018
15%
46%
TETRAN-Technology
Skoolbag
2018
29%
48%
2018
25%
34%
NOTE 16: TRADE AND OTHER PAYABLES
Trade creditors
Other payables and accrued expenses
There are no trade and other payables that are considered past due.
2018
$
6,867,231
1,458,346
8,325,577
2017
$
6,222,582
1,139,226
7,361,808
Page 47 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 17: DEFERRED REVENUE
CURRENT
Unearned income – subscription, consulting and licenses
NOTE 18: PROVISIONS
CURRENT
Employee entitlements
-
-
Provision for Annual Leave
Provision for Long Service Leave
NON-CURRENT
Employee entitlements
-
Provision for Long Service Leave
2018
$
2017
$
3,021,008
3,021,008
1,712,654
1,712,654
2018
$
2017
$
860,801
844,312
1,705,113
691,735
722,209
1,413,944
108,533
108,533
77,782
77,782
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 48 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 19: SHARE CAPITAL
(a)
Details of share issues
For the 2018 financial year:
Details
Balance at the beginning of the year
Total share capital
No. of
Shares
Issue Value
$
161,320,702
49,615,752
161,320,702
49,615,752
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.
Comparative information for share issues occurring in the 2017 financial year:
Date
Details
Dec-16
Dec-16
Dec-16
Balance at the beginning of the year
Securities issued for exercise of options
Performance shares issued Tetran
Performance shares issued Skoolbag
May-17
Securities issued for exercise of options
Total share capital
Share
Price $
No. of
Shares
Issue Value
$
0.10
0.10
154,713,558
49,365,752
900,000
2,857,144
1,250,000
1,600,000
90,000
-
-
160,000
161,320,702
49,615,752
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.
Page 49 of 64
For personal use only
MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 19: SHARE CAPITAL (CONT.)
(b)
Options
ASX Code
Unlisted
MOQOPT7
Total
Balance a at
30/06/2017
3,690,901
16,667
3,707,568
Balance at
30/06/2018
3,690,901
-
3,690,901
Exercise price
$0.275
$7.00
Expiry
01/09/2020
12/02/2018
A summary of the movements of all company options issues is as follows:
Options outstanding at 30 June 2017
Granted
Forfeited
Exercised
Expired
Options outstanding at 30 June 2018
Options exercisable as at 30 June 2018
Options outstanding at 30 June 2016
Granted
Forfeited
Exercised
Expired
Options outstanding at 30 June 2017
Options exercisable as at 30 June 2017
(d)
Capital management
No. of
Options
Weighted Average
Exercise Price
3,707,568
$0.305
-
-
-
(16,667)
3,690,901
-
-
-
-
$7.00
$0.275
-
No. of
Options
Weighted Average
Exercise Price
2,533,334
3,690,901
-
(2,500,000)
(16,667)
3,707,568
16,667
$0.19
$0.275
-
$0.10
$7.00
$0.305
$7.00
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.
Page 50 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 19: 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 20: RESERVES
Reserves at the beginning of financial year
Option Premium Reserve
Foreign Exchange Translation Reserve
Reserves at end of financial year
NOTE 21: ACCUMULATED LOSSES
Accumulated losses at beginning of financial year
Net profit for the year after income tax
Accumulated losses at end of financial year
NOTE 22: FRANKING CREDITS
Franking credits available for subsequent financial years
based on a tax rate of 30%
NOTE 23: KEY MANAGEMENT PERSONNEL DISCLOSURE
Compensation received by key management personnel of the consolidated
entity:
Short term employee benefits
Other payments
Other long-term employee benefits
Post employment benefits
2018
$
(26,763)
160,750
7,779
141,766
2017
$
2,467
111,630
(140,860)
(26,763)
2018
$
(32,025,283)
1,129,181
(30,896,102)
2017
$
(32,126,259)
100,976
(32,025,283)
2018
$
2017
$
1,089,071
964,244
2018
$
2017
$
1,267,520
-
7,919
108,071
1,383,510
2,016,388
30,000
6,599
157,414
2,210,401
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 51 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
23: 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 24: 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 23.
(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.
MOQdigital provided professional services sales of $101,818 to the Maia Group (formerly Alleasing Group), a
company that is controlled by Monash Private Capital. Monash Private Capital is an entity associated with Joey
Fridman and David Shein. An amount of $314 related to these services were outstanding as at 30 June 2018.
(c)
Loans to/from related parties:
There are no amounts outstanding or payable to related parties as at 30 June 2018 (2017: $Nil).
NOTE 25: AUDITOR’S REMUNERATION
2018
$
2017
$
Amounts paid / payable to Stantons International for audit and review work under-
taken under the Corporation Act 2001
71,000
81,596
NOTE 26: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent assets or liabilities.
Page 52 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 27: 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 28: EARNINGS / LOSS PER SHARE
(a) Basic earnings per share (cents per share)
From continuing operations
(b) Diluted earnings per share (cents per share)
From continuing operations
(c) Reconciliation of earnings in calculating earnings per share
Basic and diluted profit per share
Loss from continuing operations attributable to ordinary equity holders
2018
$
538,693
837,971
-
1,376,664
2017
$
350,745
1,126,973
-
1,477,718
2018
$
2017
$
0.70
0.68
0.06
0.06
1,129,181
100,976
(d) Total shares
Weighted average number of ordinary shares outstanding during the year used in
the calculation of basic earnings per share
161,320,702
157,578,647
Weighted average number of ordinary shares outstanding during the year used in
the calculation of diluted earnings per share
165,011,603
160,632,488
NOTE 29: DISCONTINUED OPERATIONS
There were no discontinued operations in 2018 or 2017.
Page 53 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 30: CASH FLOW INFORMATION
Reconciliation of net cash provided by operating activities
to net profit after tax
Profit for the period after tax
Add back: Income tax expense
Profit for the period before tax
Non cashflows and non-operating cashflows in profit:
Depreciation / Amortisation
(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
Cash flow from operations
2018
$
1,129,181
439,758
1,568,939
611,779
-
-
-
2017
$
100,976
153,420
254,396
519,007
-
-
-
(1,811,246)
(146,012)
(2,348,561)
(88,902)
(831,699)
27,517
839,201
-
-
1,308,354
-
321,920
1,888,753
(376,688)
35,963
3,096,533
-
-
(316,581)
-
91,056
866,223
Page 54 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
ABN: 94 050 240 330
NOTES TO THE CONSOLIDATED FINANCIAL REPORT
NOTE 31: SHARE BASED PAYMENTS
There were no share-based payments during the year, however in the prior year the following shares and options were issued:
On 22 December 2016, the Company issued 2,857,144 shares at a deemed issue price of $0.35 per share which were condi-
tional upon TETRAN achieving certain EBITDA targets in FY16.
On the 22 December 2016, the Company issued 1,250,000 shares at a deemed issue price of $0.40 per share which were con-
ditional upon Skoolbag achieving certain performance targets in FY16.
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.
NOTE 32: 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
Pinnacle Software (Australia) Pty Ltd
Equity holding
Country of
Incorporation
Australia
Australia
New Zealand
Singapore
Sri Lanka
Australia
Australia
Class of Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2018
100%
100%
100%
100%
100%
100%
100%
2017
100%
100%
100%
100%
100%
100%
100%
NOTE 33: EVENTS SUBSEQUENT TO REPORTING DATE
On the 5th July 2018, 4,036,358 unlisted share options were issued to key employees of the Company at an exercise price of
25.5 cents each. These options will expire on 1st July 2022.
END OF AUDITED STATEMENTS
Page 55 of 64
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MOQ LIMITED AND ITS CONTROLLED ENTITIES
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018
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 20 to 55 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 2018 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 18 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 August 2018
Page 56 of 64
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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
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
30 August 2018
Board of Directors
MOQ Limited
Suite 1,Ground Floor
3-5 West Street
North Sydney,NSW,2060
Dear Sirs
RE: MOQ 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.
As Audit Director for the audit of the financial statements of MOQ Limited for the year ended 30 June 2018, 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 LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
For personal use only
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
MOQ LIMITED
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
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of MOQ Limited, the Company and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, 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, and notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Group's financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the
Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved
under Professional Standards Legislation
For personal use only
Key Audit Matters
We have defined the matters described below to be key audit matters to be communicated in our report.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key Audit Matters
How the matter was addressed in the audit
Revenue recognition
The Group offers many products and services to
its customers
that require different revenue
recognition accounting policies given different
performance obligations profiles, as outlined in
note 1(t) to the financial statements.
Revenue recognition has been assessed as key
audit matter due to the different recognition
polices.
Inter alia, our audit procedures included the following:
i.
Our audit procedures included considering the
appropriateness of the Group’s revenue recognition
accounting policies
ii.
Performing tests for accuracy, completeness
and cut-off of customer invoicing on a sample basis.
Assessing
iii.
related disclosures within the financial report.
the adequacy of
the Group’s
Impairment of Goodwill
The Group carries Goodwill totalling $13,281,938
(refer to Note 15) in terms of the application of
the Group's accounting policy for Intangible
assets, as set out in Note 1(c).
The carrying value of Goodwill is a key audit
matter due to:
• The significance of the total balance (41%
of total assets);
• For the CGU’s which contain goodwill, the
recoverable amount,
determination of
being the higher of fair value less costs to
sell and value-in-use, requires judgement
on
in both
identifying and then valuing the relevant
CGU’s.
the part of management
• The assessment of impairment of the
Group’s goodwill balances incorporated
significant judgement in respect of factors
such as discount rates and growth rates.
A key audit matter for us was whether the
Group’s value in use model for impairment
included appropriate consideration of
these
their significant estimates and
factors on
judgements and the selection of Key external
and internal inputs.
Inter alia, our audit procedures
following:
included
the
i.
We assessed management’s determination of
the Group’s CGUs based on our understanding of the
nature of
the Group’s Business and economic
environment in which the CGUs operate. We also
analysed the internal reporting of the Group to
assess how earnings streams are monitored and
reported;
We
evaluated management’s
process
ii.
regarding valuation of the Group’s goodwill assets to
determine any asset
tested
management’s models, such as the preparation and
review of forecasts.
impairments. We
iii.
We challenged the Group’s assumptions and
estimates used to determine the recoverable value of
its assets,
forecast
including
revenue, cost and discount rates.
those relating
to
iv.
We checked the mathematical accuracy of the
cash flow models and agreed relevant data to the
latest forecasts;
vi.
We performed sensitivity analysis in two main
areas. These included the discount rate and average
budgeted EBITDA growth assumptions on the CGUs
with a higher risk if impairment.
For personal use only
Recoverability of Trade Receivables
As at 30 June 2018, the Group had trade
receivables and other receivables of $9,999,166.
Inter alia, our audit procedures included the following:
Management assess the recoverability of trade
receivables by
reviewing customers’ aging
profile, credit history and status of subsequent
settlement,
an
and
impairment provision is required.
determine whether
i.
Obtained a list of long outstanding receivables
and identified any debtors with financials difficulty
through discussion with management;
ii.
Assessed the recoverability of the balances
by comparing the outstanding amounts as at year
end against subsequent settlements.
For the purpose of impairment assessment,
significant judgement and assumptions, including
the credit risks of customers, the timing and
amount of realisation of these receivables, are
required
impairment
events and the determination of the impairment
charge.
identification of
the
for
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2018, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. 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
For personal use only
auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and
fair view 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.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of 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.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that achieves
fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in Internal control that we identify during our
audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance
in the audit of the consolidated financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor's report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
For personal use only
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 18 of the directors’ report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of MOQ Limited for the year ended 30 June 2018 complies with
section 300A of the Corporations Act 2001.
Responsibilities
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.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
30 August 2018
For personal use only
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 27th August 2018
ORDINARY SHARES
161,320,702 fully paid ordinary shares held by 708 individual shareholders. All ordinary shares carry one vote per share.
UNQUOTED OPTIONS
The Company has on issue:
•
•
3,690,901 options exercisable at 27.5 cents expiring on 1 September 2020 amongst MOQ employees.
3,4036,358 options exercisable at 25.5 cents expiring on 1st July 2022 amongst MOQ employees.
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
105
237
54
52
259
707
Number held
150,151,681
10,556,200
437,970
144,637
30,214
161,320,702
% of issued
shares
93.08
6.54
0.27
0.09
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
A/C designation
JP MORGAN NOMINEES AUSTRALIA LIMITED
MONASH PRIVATE CAPITAL PTY LTD
MR SCOTT MCPHERSON
MS KATHY LOUISE EDWARDS
MATTHEW CHARLES GOGGIN & ROMILY JANE
GOGGIN
No. of
ordinary
shares
19,392,637
18,228,334
%
ordinary
shares
12.02
11.30
SCOTT MCPHERSON FAMILY
A/C
JOKAT INVESTMENT A/C
17,655,978
10.94
17,655,978
10.94
GOGGIN FAMILY
8,827,989
5.47
Page 63 of 64
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MONTECH HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
ABN: 94 050 240 330
TOP 20 HOLDERS OF EQUITY SECURITIES
Rank
Name
1
2
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA LIMITED
MONASH PRIVATE CAPITAL PTY LTD
MR SCOTT MCPHERSON
MS KATHY LOUISE EDWARDS
MATTHEW CHARLES GOGGIN & ROMILY JANE GOGGIN
MR DON AMAL NANAYAKKARA
CITICORP NOMINEES PTY LIMITED
ANACACIA PTY LIMITED
KOMATIE PTY LTD
NATIONAL NOMINEES LIMITED
OSKA INDIA PTY LTD
DAVCOL NOMINEES PTY LTD
UNITED EQUITY PARTNERS PTY LTD
INFLECTION INVESTMENTS PTY LTD
HOLLOWAY COVE PTY LTD
JARREN INVESTMENTS PTY LTD
MR MARLON LUKE DE CRUZ
MR KAI MYSLIWIECZ
POLFAM PTY LTD
MR DAVID ANDREW SLOBOM & MRS LINDA JANE SLOBOM
MR IAN GERARD MALOUF & MRS JOANN GAI MALOUF
Total
Grand total
24 Aug 2018
19,392,637
18,228,334
17,655,978
17,655,978
8,827,989
6,602,834
6,262,298
4,174,883
4,110,457
3,787,433
3,125,000
2,500,001
2,130,000
2,085,446
2,050,000
1,583,334
1,492,679
1,135,625
850,000
822,343
802,500
125,275,749
161,320,702
%IC
12.02
11.30
10.94
10.94
5.47
4.09
3.88
2.59
2.55
2.35
1.94
1.55
1.32
1.29
1.27
0.99
0.98
0.70
0.53
0.51
0.50
77.72
100.00
Page 64 of 64
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