DATAWORKS GROUP LIMITED — Annual Report 2017

Nov 13, 2017

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FINANCIAL REPORT for the year ended 30 June 2015

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CONTENTS

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Directors' Report	1
Statement of Profit or Loss and Other Comprehensive Income	2
Statement of Financial Position	3
Statement of Changes in Equity	4
Statement of Cash Flows	5
Notes to the Financial Statements	6
Directors' Declaration	14
Independent Auditor's Report	15

DIRECTORS' REPORT

The Trustee presents this report on the Trust for the year ended 30 June 2015.

Information on Directors

The names of each person who has been a director of the Trustee during the reporting period and to the date of this report are:

Dean Cameron Joscelyne

Directors have been in office since the start of the reporting period to the date of this report unless otherwise stated.

Operating Results

The surplus of the Trust attributable to the beneficiaries for the reporting period amounted to \$1,012,757 (2014: deficit of \$968,032). The Trust is not subject to income tax.

Significant Changes in the State of Affairs

There have been no significant changes in the state of affairs of the Trust during the reporting period.

Principal Activities

The principal activities of the Trust during the reporting period were development and sale of software.

No significant changes in the nature of the Trust's activity occurred during the reporting period.

Events After the Reporting Date

In September 2015, the assets of Joscelyne Investments Unit Trust were acquired by IXUP Pty Ltd and Joscelyne Investments Unit Trust assigned all trademarks to IXUP IP Pty Ltd, an entity controlled by IXUP Pty Ltd, as part of a restructure of the IXUP corporate group.

Environmental Issues

The Trust's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory of Australia.

Distributions paid or recommended

A distribution of \$18,588 was declared during the reporting period.

Signed in accordance with a resolution of the directors:

Director:

Dean Cameron Joscelyne $11 - 64 - 19$

Page 1

Dated:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

for the year ended 30 June 2015

		2015	2014
	Note		\$
Revenue	3	240,000	545,879
Cost of sales	4		(19, 634)
Gross profit		240,000	526,245
Other income	5	1,144,039	5,202
Personnel costs	6	(11, 887)
Occupancy costs		(189, 294)
General and administrative costs	8	(166, 372)	(1,497,935)
Depreciation	9	(3,730)	(1, 544)
SURPLUS/(DEFICIT) FOR THE YEAR		1,012,757	(968, 032)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR		1,012,757	(968, 032)

The accompanying notes are an integral part of the accounts. To be read in conjunction with the Financial Report.

STATEMENT OF FINANCIAL POSITION

as at 30 June 2015

		2015	2014
	Note	\$	\$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	16	2,823	15,961
Trade and other receivables	11	182,399	177,609
Other assets		3,892
TOTAL CURRENT ASSETS		189,114	193,570
NON-CURRENT ASSETS
Intangibles	12	1,650,128
Property, plant and equipment	13	14,609	5,924
TOTAL NON-CURRENT ASSETS		1,664,737	5,924
TOTAL ASSETS		1,853,851	199,494
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	14	1,912,716	1,196,772
TOTAL CURRENT LIABILITIES		1,912,716	1,196,772
TOTAL LIABILITIES		1,912,716	1,196,772
NET LIABILITIES		(58, 865)	(997, 277)
EQUITY
Issued units	17	120	120
Accumulated losses		(58, 985)	(997, 397)
TOTAL EQUITY		(58, 865)	(997, 277)

The accompanying notes are an integral part of the accounts. To be read in conjunction with the Financial Report.

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 June 2015

		Issued units	Accumulated losses	Total equity
	Note	\$	\$	\$
Balance at 1 July 2013	17	120	(29, 365)	(29, 245)
Deficit for the year			(968, 032)	(968, 032)
Other comprehensive income
Total comprehensive loss for the year			(968,032)	(968, 032)
Balance at 30 June 2014		120	(997,397)	(997, 277)
Balance at 1 July 2014		120	(997, 397)	(997, 277)
Surplus for the year			1,012,757	1,012,757
Other comprehensive income
Total comprehensive income for the year			1,012,757	1,012,757
Transactions with beneficiaries in their capacity
as unitholders
Drawings	15		(55, 757)	(55, 757)
Distributions declared	10		(18,588)	(18, 588)
Balance at 30 June 2015		120	(58,985)	(58, 865)

The accompanying notes are an integral part of the accounts. To be read in conjunction with the Financial Report.

STATEMENT OF CASH FLOWS

for the year ended 30 June 2015

		2015	2014
	Note	\$	\$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers		240,748	493,311
Payments to suppliers and employees		(185,714)	(447,031)
Cash Flows from Operating Activities	16	55,035	46,281
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for property, plant and equipment		(12,415)	(7,468)
Payment for intangible assets		-	(67,582)
Cash Flows from Investing Activities		(12,415)	(75,050)
CASH FLOWS FROM FINANCING ACTIVITIES
Drawings by beneficiaries		(55,757)	(5,000)
Cash Flows from Financing Activities		(55,757)	(5,000)
Net decrease in cash and cash equivalents		(13,138)	(33,770)
Cash and cash equivalents at the beginning of the year		15,961	49,731
CASH AND CASH EQUIVALENTS AT THE END OF
THE YEAR	16	2,823	15,961

The accompanying notes are an integral part of the accounts.

To be read in conjunction with the

Financial Report.

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

NOTE 1: GENERAL INFORMATION

The financial report covers Joscelyne Investments Pty Ltd ATF Joscelyne Investments Unit Trust ("JIUT"). JIUT is a for profit entity which is incorporated and domiciled in Australia.

The registered office and principal place of business for JIUT is Level 3, 5-11 Bridge Street. Sydney.

The functional and presentation currency of the group is Australian dollars.

The financial report was authorised for issue by the Directors on 11 April 2017.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The Trust is not a reporting entity because in the opinion of the Trustee there are unlikely to exist users of the financial report who are unable to command the preparation of reports tailored so as to satisfy specifically all of their information needs. Accordingly, these special purpose financial statements have been prepared to satisfy the requirements of the directors of the Trustee company.

The financial statements have been prepared in accordance with the recognition and measurement requirements specified by all Australian Accounting Standards and Interpretations, and the disclosure requirements of Accounting Standards AASB 101 'Presentation of Financial Statements', AASB 107 'Statement of Cash Flows', AASB 108 'Accounting Policies, Changes in Accounting Estimates and Errors', AASB 1031 'Materiality' and AASB 1054 'Australian Additional Disclosures'.

The financial statements have been prepared on an accruals basis and are based on historical cost.

The significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated.

Going Concern

The financial report has been prepared on a going concern basis which assumes the settlement of liabilities and the realisation of assets in the normal course of business.

As at 30 June 2015, the Trust had cash assets of \$2,823 and working capital deficiency of \$1,723,602.

The directors of the Trustee have received a letter from a related entity to continue providing financial support to enable the Trust to operate as a going concern. The letter also confirms that amounts due to related parties as at 30 June 2015 will not be called on for at least 12 months from the date of signing the financial report. The Trust's principal activities have been considerably reduced as from September 2015 when its assets were acquired by IXUP Pty Ltd and its trademarks assigned to IXUP IP Pty Ltd. The Trust's expenses have since been minimal.

Based on these factors, the directors of the Trustee are satisfied that the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business.

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated accumulated depreciation and impairment losses.

Costs include purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and restoring the asset, where applicable.

Plant and equipment

Plant and equipment are measured using the cost model.

Depreciation

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Financial Instruments

Financial instruments are recognised initially using trade date accounting, i.e. on the date that Trust becomes party to the contractual provisions of the instrument.

On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets.

Trade receivables and other receivables, including distributions receivable, are recognised at the nominal transaction value without taking into account the time value of money. If required a provision for doubtful debt has been created.

The Trust's trade and other receivables fall into this category of financial instruments.

Significant receivables are considered for impairment on an individual asset basis when they are past due at the reporting date or when objective evidence is received that a specific counterparty will default.

In some circumstances, the Trust renegotiates repayment terms with customers which may lead to changes in the timing of the payments, the Trust does not necessarily consider the balance to be impaired, however assessment is made on a case-by-case basis.

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

Impairment of Non-Financial Assets

At the end of each reporting period the Trustee determines whether there is an evidence of an impairment indicator for non-financial assets.

Where this indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.

Where assets do not operate independently of other assets, the recoverable amount of the relevant cashgenerating unit (CGU) is estimated.

The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cashgenerating unit.

Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.

Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss.

Cash and Cash Equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Revenue Recognition

Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Trust and specific criteria relating to the type of revenue as noted below, has been satisfied.

All revenue is stated net of the amount of goods and services tax (GST).

Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns. discounts and rebates.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Trust and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Rendering of services

Revenue in relation to rendering of services is recognised depending on whether the outcome of the services can be measured reliably. If this is the case then the stage of completion of the services is used to determine the appropriate level of revenue to be recognised in the period. If the outcome cannot be reliably measured then revenue is recognised to the extent of expenses recognised that are recoverable.

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Comparative Amounts

Comparatives are consistent with prior years, unless otherwise stated.

Trade and Other Pavables

Trade and other payables, are initially measured at fair value, net of transaction costs.

Trade and other payables represent the liabilities for goods and services received by the Trust that remain unpaid at the end of the reporting period. Trade payables are recognised at their transaction price. They are subject to normal credit terms and do not bear interest.

Intangibles

Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internallygenerated intangible can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale:
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset; and
• how the intangible asset will generate probable future economic benefits.

Critical Accounting Judgments and Key Sources of Estimation Uncertainty

In the application of the entity's accounting policies, which are described in note 2, the directors of the Trustee are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

	2015	2014
	\$	\$
NOTE 3: REVENUE
Fees Received	240,000	545,879
	240,000	545,879
NOTE 4: COST OF SALES
Client Disbursements		19,634
	$\qquad \qquad \blacksquare$	19,634
NOTE 5: OTHER INCOME
Capitalisation of prior year expenses (i)	1,138,500
Interest Income	66	366
Other Revenue	3,000	$\overline{\phantom{a}}$
Royalties	2,473	4,836
	1,144,039	5,202

(i) This represents costs incurred in the prior financial periods in regards to development of software. Based on the directors' assessment, the developed software was considered to have future economic benefits expected to flow to the Trust during the reporting period. As such, prior costs incurred were reversed and an intangible asset was recognised in the current financial year. Should the reversal be omitted as an income in the statement of profit or loss and other comprehensive income, the Trust would have incurred a loss of \$125,743 for the year ended 30 June 2015.

NOTE 6: PERSONNEL COSTS Wages and Salaries 10,926 Superannuation 961 11,887 NOTE 7: OCCUPANCY COSTS Rent 163,200 Strata Levies 19,423 Rates 6,670 189,294 NOTE 8: GENERAL AND ADMINSTRATIVE COSTS Consultants 124,000 1,466,000 Computer Expenses 20,260 6,674 Accounting and audit 20,396 4,145 Other 1,715 21,116 166,372 1,497,935

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

	2015	2014
	\$	\$
NOTE 9: DEPRECIATION
Depreciation	3,730	1,544
	3,730	1,544
NOTE 10: TRUST DISTRIBUTIONS Distributions declared
	18,588
	18,588
NOTE 11: TRADE AND OTHER RECEIVABLES
Trade Receivables	10,245	57,769
GST	172,154	119,012
Related party loans		828
	182,399	177,609
NOTE 12: INTANGIBLES
Developed software	1,644,500
Less accumulated amortisation
	1,644,500
Trademarks	5,628
	5,628 1,650,128
NOTE 13: PROPERTY, PLANT AND EQUIPMENT
Motor vehicles	9,455
Less accumulated depreciation	(1, 243)
	8,211
Office equipment at cost	9,202	6,241
Less accumulated depreciation	(2,804)	(317)
	6,398	5,924
	14,609	5,924

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

	2015 \$	2014 \$
NOTE 14: TRADE AND OTHER PAYABLES
Trade Payables (i)	1,886,428	1,196,772
Distributions Payable	18,588	-
Accruals	7,700	-
	1,912,716	1,196,772

(i) \$1,780,243 of this balance is owed to related parties. The Trustee expects that amounts owed to related parties will not be called up in the 12 months period from the date of signing these accounts.

NOTE 15: DRAWINGS

Beneficiary drawings	55,757	-
	55,757	-

NOTE 16: CASH AND CASH EQUIVALENTS

Reconciliation of cash

Cash at the end of financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

Cash at bank	2,703	15,841
Cash on hand	120	120
	2,823	15,961

Reconciliation of surplus/(deficit) from ordinary activities to cash flows from operating activities

Profit/(loss) from ordinary activities	1,012,757	(968,032)
Non-cash items:
Depreciation	3,730	1,544
Capitalised expenses previously written-off	(1,138,500)	-
(Increase)/decrease in assets:
Trade and other receivables	(4,790)	(57,769)
Intangibles	(3,892)	-
Increase/(decrease) in liabilities:
Trade and other payables	185,730	1,070,538
Cash flows from operating activities	55,035	46,281

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2015

2015

Non-cash transactions

During the current year, the Trust has not entered into any non-cash investing and financing activities which are not reflected in the statement of cash flows.

NOTE 17: ISSUED UNITS

. .
Settled Sum	120	120
	120	120

NOTE 18: SUBSEQUENT EVENTS

In September 2015, the assets of Joscelyne Investments Unit Trust were acquired by IXUP Pty Ltd and Joscelyne Investments Unit Trust assigned all trademarks to IXUP IP Pty Ltd, an entity controlled by IXUP Pty Ltd, as part of a restructure of the IXUP corporate group.

NOTE 19: COMMITMENTS FOR EXPENDITURE

Operating lease arrangements

Operating leases relate to the office lease with lease terms of 3 years. Non-cancellable operating lease commitments are as follows

	2015	2014
	\$.	\$
Not later than 1 year	165,648	$\qquad \qquad \blacksquare$
Later than 1 year and not later than 5 years	257,187	$\qquad \qquad \blacksquare$
Later than 5 years	$\overline{\phantom{a}}$	$\qquad \qquad \blacksquare$
	422,835

7.000

NOTE 20: REMUNERATION OF AUDITORS

Auditor of the Trust

Audit of the financial statements

The auditor of Joscelyne Investments Pty Ltd ATF Joscelyne Investments Unit Trust is William Buck Audit (WA) Pty Ltd.

DIRECTORS' DECLARATION

In the opinion of the Directors of the Trustee of Joscelyne Investments Unit Trust:

(a) The Trust is not a reporting entity;

(b) The financial statements and notes thereto, set out on pages 2 to 13, are drawn up in accordance with the basis of accounting described in Note 2, so as to present fairly the financial position of the Trust as at 30 June 2015 and its performance as represented by the results of its operations, for the year ended 30 June 2015; and

(c) There are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors:

On behalf of the Directors

Director:

Dean Cameron Joscelyne

Dated: $11 - \frac{6}{11} - 17$