ORCODA LIMITED — Annual Report 2017

Aug 30, 2017

Appendix 4E

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Preliminary Final Report

HIGHLIGHTS

• Revenue for FY17 was lower at $3.19m as the company transitioned from high-volume, low margin revenues in payments to higher-margin sales in e-Commerce and software services

• Gross Margin on products sold increased to 48% (from 19% in FY16) as SMA focussed on higher gross-margin products and services

• Company successfully grew its China eCommerce business with monthly sales in line with expectations and with a CAGR of greater than 40%.

• The result reflects:

• revenue earned from sales, licence fees and services for the period of $3,191,749;

• an impairment charge of $2,025,378 raised against amounts owed to the company by China Mobile

• an impairment charge of $184,313 raised against other entities in China;

• an impairment charge of $488,000 representing the reduced carrying value of the Lanstead funding arrangement.

• SmartTrans has taken the prudent position with respect to recognising impairments on amounts owed to the company in China, but does consider the nature of collection of payments in China as different to Australia and remains focussed on the collection of all outstanding receivables.

• Over 300 Australian products made available via SmartTrans’ RooLife platforms.

• WeChat shopping platform launched with Shanghai Stock Exchange-listed Shanghai Information Technology Co. Ltd (Dodoca).

• Online e-Commerce sales launch implemented with established online shopping provider Wjike.

OPERATIONS

During the year, SmartTrans developed its e-Commerce platforms in China expanding its associated mobile and internet-based payment systems whilst continuing the rollout of its Supply Chain Optimisation software in the logistics and services sectors in Australia.

SmartTrans’ China-based operations markets and sells merchandise from Australian producers (food, wine, personal care items and tourism) to Chinese consumers, meeting the high demand for Australian merchandise in China. SmartTrans provides a complete end-to-end service to nonChina based merchants bundling marketing, customer acquisition, logistics and payment collection from consumers on WeChat and Alipay in RMB and settlement with Australian suppliers in AUD.

Sydney Suite 37 401 Pacific Highway ARTARMON NSW 2064 Ph: (02) 9660 4564

Beijing Qingdao Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

Melbourne Level 7 10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Appendix 4E

During FY17, the company officially launched its WeChat shopping platform, Dodoca RooLife, in partnership with Shanghai Stock Exchange-listed Shanghai Information Technology Co. Ltd (Dodoca), a platform that markets and sells Australian products to Chinese consumers. Dodoca RooLife has initially focussed on building market presence in Guangdong, a province with a population of more than 107 million people.

SmartTrans is also achieving good sales revenue and growth providing its products as the key Australian marketplace on established online retailer Wjike’s shopping platforms.

SmartTrans’ online marketplaces in China are growing at a pleasing rate, currently delivering greater than 40% compound annual revenue growth as quality-conscious consumers in China purchase Australian products and services from the Company’s trusted e-commerce platforms.

SmartTrans generates revenue through the provision of marketing services, the acquisition of customers, commission on sale of products and transaction fees.

Whilst still at a very early stage, monthly sales have consistently grown since launch of the company’s RooLife platforms in January 2017 with sales showing growth continuing into FY18. The company’s structures and operations are being optimised for growth and profitability. With additional working capital, the company expects to significantly grow its e-Commerce revenue.

While the delay in receipt of outstanding payments due to the company from the Chinese SOE, China Mobile, has had an dampening effect on growth of the company’s e-Commerce business, CAGR in FY17 still exceeded 40%.

The company has taken the prudent position of impairing the amount payable from China Mobile to SmartTrans ($2,025,378), due to the time period the payments have been outstanding. The two companies are in discussion with respect to settling the payment. SmartTrans is proceeding with the expectation that the amount due will be collected in full.

SmartTrans aims to establish RooLife as the most visible and trusted e-commerce platform for Chinese consumers to buy premium Australian products, and to access services such as travel and tourism.

With SmartTrans’ ability to accept and process payments from Chinese consumers in RMB and settle payment to Australian companies in AUD, the e-Commerce service has wide appeal to companies seeking to access the large online shopping market in China.

In Australia, SmartTrans’ internet and smartphone-based platform allows transportation managers to efficiently manage vehicle fleets. SmartTrans’ platform allows managers to quickly plan and execute optimal fleet movements that markedly improve delivery time frames and reduce costs. Both managers and customers receive real-time updates of the status of deliveries.

A growing pipeline of prospects for the company’s logistics software solution is being fostered in Australia through business development initiatives which have led to a number of new contracts being secured during and immediately following the end of the financial year. The pipeline of customer prospects and active negotiations has expanded considerably.

A key attribute of the logistics solution business is its customer retention. Customers generally renew their service contracts with an average engagement of over seven years.

Sydney Suite 37

Beijing

Qingdao

Melbourne Sydney Level 7 Suite 37 10 Queens Road 401 Pacific Highway MELBOURNE ARTARMON VIC 3004 NSW 2064 Ph: (03) 9866 7333 Ph: (02) 9660 4564

Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

Appendix 4E

RESULTS ANNOUNCEMENT TO THE MARKET 2017 Full Year Financial Results

(Based on accounts currently being audited)

1 Details of the reporting period and the previous corresponding period

Reporting Period Financial Year Ending Previous Corresponding Period Financial Year Ending 2. Results for announcement to the market 2.1 The amount and percentage change up or down from the previous corresponding period of revenue from ordinary activities Total revenue in the reporting period Previous corresponding period – Total Revenue Percentage change up or down from the previous corresponding period of Revenue from ordinary activities 2.2 The amount and percentage change up or down from the previous corresponding period of profit (loss) from ordinary activities after tax attributable to members Total Profit (Loss) in Reporting Period Previous corresponding period Percentage change up or down from the previous corresponding period of profit (loss) from ordinary activities after tax attributable to members 2.3 The amount and percentage change up or down from the previous corresponding period of net profit (loss) for the period attributable to members Total Net Profit (Loss) in Reporting Period Previous corresponding period Percentage change up or down from the previous corresponding period of net profit (loss) for the period attributable to members 2.4 The amount per security and franked amount per security of final and interim dividend or a statement that it is not proposed to pay dividends No dividends proposed relating to the reporting period 2.5 The record date for determining entitlements to the dividends (if any) Not applicable	30 June 2017
	30 June 2016
	3,191,749
	11,648,458
	(73)%
	(6,278,161)
	(2,811,131)
	(123) %
	(6,278,161)
	(2,811,131)
	(123) %

Sydney Suite 37

Beijing

Qingdao

Melbourne Level 7 10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

401 Pacific Highway

ARTARMON NSW 2064 Ph: (02) 9660 4564

Appendix 4E

3. A statement of Comprehensive Income together with notes to the statements, prepared in compliance with AASB 10s

Statement of Profit & Loss and other Comprehensive Income For the year ended 30 June 2017

Revenue - Operations Online mobile promotion & third party cost Employee salaries and benefits expense Material and installation costs Depreciation expense Consultancy cost ASIC, Audit & Tax Investor Relations Share based payment Rental & occupancy costs Travelling and accommodation costs Amortisation of Intangible Assets Legal & associated costs Other expenses Foreign currency gain/(loss) Impairment Loss Loss before income tax Income tax benefit Loss for the year Other comprehensive income for the year Foreign currency translation reserve Total comprehensive loss for the year	Notes Consolidated 2017 2016 $ $ 3,191,749 11,648,458 (1,656,169) (9,470,545) (2,526,796) (1,800,055) (397,850) (432,786) (21,223) (31,544) (813,999) (995,271) (301,550) (330,152) (86,031) (207,089) - (246,800) (255,632) (248,791) (218,363) (287,430) (41,657) (10,061) (105,881) (65,530) (332,039) (312,916) (14,972) 20,619 (2,697,749) -
	(6,278,161) (2,811,131) - -
	(6,278,161) (2,811,131) (77,439) (108,256)
	(6,355,600) (2,919,387)

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

Beijing Qingdao Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

Sydney Suite 37 401 Pacific Highway ARTARMON NSW 2064 Ph: (02) 9660 4564

Melbourne Level 7 10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Appendix 4E

A Statement of Financial Position together with notes to the statement. The Statement of Financial Position may be condensed but must report as line items each significant class of asset, liability, and equity element with appropriate sub-totals.

Statement of Financial Position As at 30 June 2017

Notes Current Assets Cash and Cash Equivalents 3 Trade and Other Receivables 4 Inventory 5 Other Financial Asset Other Total Current Assets Non Current Assets Property Plant & Equipment 5 Intangible Assets 5 Other Financial Asset Total Non Current Assets TOTAL ASSETS Current Liabilities Trade and Other Payables 6 Provisions 7 Other Borrowings 8 Total Current Liabilities Non Current Liabilities Provisions Other Total Non Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed Equity Reserves Accumulated Losses TOTAL EQUITY	Consolidated 2017 2016 $ $ 621,684 2,130,093 663,940 4,955,729 40,389 - 1,700,426 - 50,873 -	Consolidated 2017 2016 $ $ 621,684 2,130,093 663,940 4,955,729 40,389 - 1,700,426 - 50,873 -
	3,077,312	7,085,822
	49,957 173,022 371,968	27,037 221,462 -
	594,947	248,499
	3,672,258	7,334,321
	1,770,259 183,436 -	3,639,504 159,579 -
	1,953,696	3,799,083
	- -	- -
	-	-
	1,953,696	3,799,083
	1,718,563	3,535,238
	76,919,120 1,205,534 (76,406,091)	73,035,195 695,149 (70,195,106)
	1,718,563	3,535,238

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

Beijing Qingdao Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

Sydney Suite 37 401 Pacific Highway ARTARMON NSW 2064 Ph: (02) 9660 4564

Melbourne Level 7 10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Appendix 4E

5a. A statement of changes in equity together with notes to the statement. The statement of changes in equity may be condensed but must comply with the disclosure requirements of AASB 101

Statement of Changes in Equity For the year ended 30 June 2017

2016 Balance at 1 July 2015 Shares issued during the period Cost of shares issued Share based payments Cumulative Translation Adjustment Profit/(Loss) for the financial year Balance at 30 June 2016 2017 Balance at 1 July 2016 Shares issued during the period Cost of shares issued Options Issued During Period Options Expired During Period Profit/(Loss) for the financial year Foreign Currency Translation Balance at 30 June 2017	Contributed Equity $ 72,684,668 258,691 (4,964) 96,800 -	Reserves Accumulated Losses $ $ 653,405 (67,383,975) - - - 150,000 (108,256) - (2,811,131)	Total $ 5,954,098 258,691 (4,964) 246,800 (108,256) (2,811,131)
	73,035,195	695,149 (70,195,106)	3,535,238
	73,035,195 4,554,565 (670,640) - - - -	695,149 (70,195,106) - - - - 655,000 - (67,176) 67,176 - (6,278,161) (77,439) -	3,535,238 4,554,565 (670,640) 655,000 - (6,278,161) (77,439)
	76,919,120	1,205,533 (76,406,091)	1,718,563

Sydney Beijing Qingdao Suite 37 Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 401 Pacific Highway 8 Guanghua Road 19 Zhang zhou er Road ARTARMON Chaoyang District Shinan District NSW 2064 BEIJING CBD, 100026 QINGDAO 266073 Ph: (02) 9660 4564 Ph: +86 (10) 6500 0910

Melbourne Level 7

10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Appendix 4E

5b. A Statement of Cash Flow together with notes to the statement. The Statement of Cash Flow may be condensed but must report as line items each significant form of cash flow and comply with the disclosure requirements of AASB 107 Cash Flow Statements, or for foreign entities, the equivalent foreign accounting standard.

Statement of Cash Flows For the year ended 30 June 2017 Notes Cash from operating activities: Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Receipt from R&D Grant Net cash inflow/(outflow) from operating activities 8 Cash flows from investing activities: Payments for property plant and equipment Payment for intangible asset Payments for termination of joint venture Net cash (outflow) from investing activities Cash flows from financing activities: Proceeds from capital raisings Payments for capital raising costs Proceeds from issue of shares Net cash provided by (used in) financing activities Net increase (decreases) in cash held Cash at beginning of financial year Effect of foreign exchange Cash at end of financial year 3	Consolidated 2017 2016 $ $ 6,709,127 8,696,208 (10,374,161) (12,816,195) 2,999 50,841 301,217 371,458
	(3,360,818) (3,697,688)
	(40,577) (25,080) - (220,849) - (77,060)
	(40,577) (322,989)
	1,926,221 - (15,640) (199,044) - 254,718
	1,910,581 55,674
	(1,490,814) (3,965,003) 2,130,093 6,058,169
	(17,595) 36,927
	621,684 2,130,093

The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes

Sydney Suite 37

Beijing

Qingdao

Melbourne Level 7 10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

401 Pacific Highway ARTARMON NSW 2064 Ph: (02) 9660 4564

Appendix 4E

Notes to Sections 3, 4 & 5

1. Revenue

Revenue

Services Research & Development tax incentive Total

Consolidated 2017 2016 $ $ 2,890,532 11,312,593 301,217 335,865	Consolidated 2017 2016 $ $ 2,890,532 11,312,593 301,217 335,865
3,191,749	11,648,458

2. Operating profit (loss)

2. Operating profit (loss)
Net profit (loss) and expenses Profit (loss) before income tax includes the following specific expenses: Depreciation Plant and equipment Amortisation Software Total amortisation 3. Current assets - Cash and cash equivalents Cash at bank and on hand 4. Current assets - Trade and other receivables Trade debtors Less Provision for impairment of trade debtors 5. Non-current assets - Property, plant and equipment Intangible Assets At cost Less: Accumulated amortisation Total Intangible Assets Plant and equipment At cost Less: Accumulated depreciation Total plant & equipment 6. Current liabilities - Trade and other payables Trade payables Other payables	Consolidated 2017 2016 $ $ (21,222) (31,544)
	(21,222) (41,658)	(31,544) -
	(41,658)	-
	Consolidated 2017 2016 $ $ 621,684 2,130,093
	2,689,318 (2,025,378)	4,955,730 -
	663,940	4,955,730
	Consolidated 2017 2016 $ $ 231,523 231,523 (58,501) (10,061)
	173,022 221,462
	93,030 56,141 (43,074) (29,104)
	49,957 27,037
	Consolidated 2017 2016 $ $ 1,770,259 3,639,504 - -
	1,770,259	3,639,504

Melbourne Level 7

10 Queens Road MELBOURNE VIC 3004 Ph: (03) 9866 7333

Sydney Suite 37

Beijing

Qingdao

Suite 37 Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 401 Pacific Highway 8 Guanghua Road 19 Zhang zhou er Road ARTARMON Chaoyang District Shinan District NSW 2064 BEIJING CBD, 100026 QINGDAO 266073 Ph: (02) 9660 4564 Ph: +86 (10) 6500 0910

Appendix 4E

7. Current liabilities - Provisions

Employee benefits – annual leave Employee benefits – long service leave	Consolidated 2017 2016 $ $ 105,842 95,189 77,594 64,389
	183,436 159,579

8. Reconciliation of operating profit (loss) after income tax to net cash inflow from operating activities

Operating profit (loss) after income tax Depreciation and amortisation Impairment loss Equity based payment Foreign exchange differences Fair value changes on financial asset Doubtful debt allowance Change in operating assets and liabilities (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories (Decrease)/increase in trade creditors and accruals (Increase)/decrease in prepayment (Decrease)/increase in Other Liabilities (Decrease)/increase in Provisions Net cash inflow (outflow) from operating activities

Consolidated 2017 2016 $ $ (6,278,161) (2,811,131) 62,880 41,605 2,697,749 - - 246,800 (90,901) - 67,890 - 34,273 2,025,553 (3,365,520) (40,389) - (1,869,244) 2,027,576 5,675 - - 864 **23,857 **

(3,360,818) (3,859,805)

6. The results of segments that are significant to an understanding of the business as a whole.

Segment information provided to the Board of Directors

The segment information provided to the Board of Directors for the reportable segments for the year ended 30 June 2017 are as follows:

	Geographical Segment	Summary
	Australia	China	Total
	$	$	$
Total Segment Revenue	1,083,949	2,107,800	3,191,749
Segment (Loss)/Profit	(3,241,211)	(3,036,951)	(6,278,161)
Segment Assets as at 30 June 2017	2,703,655	968,603	3,672,258
Segment Liabilities as at 30 June 2017	(788,756)	(1,164,940)	(1,953,696)

7. Details of individual and total dividends or distributions and dividend or distribution payments. The details must include the date on which each dividend or distribution is payable and (if known) the amount per security of foreign sourced dividend or distribution.

No payments made

8. Details of any dividend or distribution reinvestment plans in operation and the last date for the receipt of an election notice for participation in any dividend or distribution reinvestment plan.

No plans approved

9. A statement of retained earnings showing movement

See Consolidated Statement of Changes in Equity

Melbourne Sydney Beijing Qingdao Level 7 Suite 37 Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 10 Queens Road 401 Pacific Highway 8 Guanghua Road 19 Zhang zhou er Road MELBOURNE ARTARMON Chaoyang District Shinan District VIC 3004 NSW 2064 BEIJING CBD, 100026 QINGDAO 266073 Ph: (03) 9866 7333 Ph: (02) 9660 4564 Ph: +86 (10) 6500 0910

Appendix 4E

10.	Net tangible assets per security with the comparative figure for the
	previous corresponding period.
	Reporting Period	Cents	0.06
	Previous Corresponding Period	Cents	0.15
11.	Details of entities over which control has been gained or lost during the
	period.
	Not applicable
12.	Any other significant information needed by an investor to make an
	informed assessment of the entity’s financial performance and financial
	position.
	Refer to explanatory notes above
13.	For foreign entities, which set of accounting standards is used in
	compiling the report (e.g. International Accounting Standards).
	Not applicable
14	A commentary on the results for the period. The commentary must be sufficient for the user to be able
	to compare the information presented with equivalent information for previous periods. The
	commentary must include any significant information needed by an investor to make an informed
	assessment of the entity’s activities and results, which would include but not be limited to discussion
	of the following.
	See commentary at the beginning of the document
14.1	The earnings per security and the nature of any dilution aspects
		Consolidated
		2017	2016
		cents	cents
	Basic earnings per share	(0.26)	(0.13)
	Diluted earnings per share	(i)	(i)
	Weighted average number of shares used as the denominator
	Weighted average number of shares used as the denominator in	2,461,476,548	2,211,641,015
	calculating the basic earnings per share
	Diluted Earnings per share
	Weighted average number of shares used as the denominator in
	calculating the diluted earnings per share	(i)	(i)
	(i) Not materially different to basic earnings per share
14.2	Returns to shareholders including distributions and buy backs.
	None made
15	Any other factors which have affected the results in the period or which are likely to affect results in the
	future, including those where the effect could not be quantified.
	Not applicable
16.	A statement as to whether the report is based on accounts which have been audited or subject to review,
	are in the process of being audited or reviewed, or have not yet been audited or reviewed
	This report is based on accounts that are in the process of being audited and subject to review

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_______ Brendan Mason Managing Director

Date: 31 August 2017, Melbourne

Melbourne Sydney Beijing Qingdao Level 7 Suite 37 Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 10 Queens Road 401 Pacific Highway 8 Guanghua Road 19 Zhang zhou er Road MELBOURNE ARTARMON Chaoyang District Shinan District VIC 3004 NSW 2064 BEIJING CBD, 100026 QINGDAO 266073 Ph: (03) 9866 7333 Ph: (02) 9660 4564 Ph: +86 (10) 6500 0910

Appendix 4E

For further information, please contact:

Brendan Mason Managing Director CN Cell 手机 +86 139 11320378

Media inquiries to: Ben Jarvis, Six Degrees Investor Relations: +61 413 150 448

Sydney Suite 37

Melbourne

Beijing

About SmartTrans

SmartTrans Holdings Limited (ASX:SMA) is a leading Australian software and technology provider that offers cutting-edge solutions for the online retail and logistics markets.

In partnership with leading Chinese e-commerce firms, SmartTrans has built online marketplaces from which quality-conscious consumers in China’s rapidly growing middle class are able to purchase Australian premium products.

In addition, SmartTrans has long-term contracts with some of Australia’s leading bluechip organisations for its proprietary, cloud-based supply chain solutions telematics software as a service (SaaS).

Qingdao

Room 501, Grand Pacific Bld A Room 2307, Central International Plaza 8 Guanghua Road 19 Zhang zhou er Road Chaoyang District Shinan District BEIJING CBD, 100026 QINGDAO 266073 Ph: +86 (10) 6500 0910

Level 7 Suite 37 10 Queens Road 401 Pacific Highway MELBOURNE ARTARMON VIC 3004 NSW 2064 Ph: (03) 9866 7333 Ph: (02) 9660 4564