ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000

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ASX Release MGM Wireless Ltd Friday 30 September 2016

2016 Annual Report:

Reclassification of research and development tax incentive refund

Net profit and earnings per share unaffected
Research and development grant monies reclassified from revenue to income tax

School Communication and Attendance Management provider MGM Wireless (ASX: MWR) has lodged its 2016 Annual Report to shareholders with the ASX today.

The company notes that, on the advice of its auditor, the accounting treatment for the Research and Development Tax Incentive refund has changed from that previously adopted and that reported in the Appendix 4E lodged on 30 August 2016.

As a result of the reclassification, which has no earnings significance, grants received under the Research and Development Tax Incentive have been recognised in the income tax account. Under previous practice, these proceeds were disclosed separately and transparently within revenue. Accordingly, the impact of the change has been to reduce revenue and EBITDA and increase income tax benefit by a corresponding amount from that reported on 30 August.

Revised figures for the ‘Key results’ announced on 30 August are as follows:

Key results following R & D reclassification
twelve months ended 30 June
$ million unless otherwise specified	2016	2015	Change in 2016 figure reported
Sales Revenue	2.51	3.14	Unchanged
EBITDA	1.33	1.28	(0.8)
Income tax (expense)/benefit	0.40	0.44	0.8
Net Profit	0.50	1.04	Unchanged
Earnings per share (basic) cents	5.84	12.16	Unchanged

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2016 Annual Report MGM Wireless Ltd.

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ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000

MGM Wireless Ltd. ASX:MWR ABN 93 091 351 530 The Parks, Suite 13 ROSE PARK SA 5067 AUSTRALIA Phone: (08) 8104 9555 Facsimile: (08) 8431 2400 www.mgmwireless.com

2016 ANNUAL REPORT

September 30, 2016

The Company is pleased to release its Annual Report for the 2016 Financial Year.

Justin Nelson Company Secretary

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ABOUT MGM WIRELESS LTD

MGM Wireless Ltd is recognised in Australia and internationally as a pioneer of socially responsible technology-enabled school communications with a proven track record of designing, developing and successfully commercialising innovative world class technology products.

The Company‘s patented SMS School communication solutions empower schools to effectively communicate to parents and caregivers using SMS text messaging to improve student attendance, welfare, safety and parent engagement. Measurable benefits for schools include reduced operating costs, increased productivity and improved parent and community engagement which ultimately improves student learning and social outcomes.

Over 1,250 Schools and Childcare Centres in Australia and New Zealand use MGM Wireless software in their day to day operations.

For further information contact:

MGM Wireless Ltd. - (ASX:MWR) Phone: +61 8 8104 9555 Email: [email protected] Web: www.mgmwireless.com

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ANNUAL REPORT INDEX

ABOUT MGM WIRELESS LTD	3
CHAIRMAN’S REPORT	7
COMPANY BACKGROUND	12
CORPORATE DIRECTORY	14
DIRECTORS’ REPORT	15
DIRECTORS	15
Information On Directors	16
Directors‘ Interests In Shares And Options	20
Remuneration of directors and key management personnel	20
CORPORATE INFORMATION - CORPORATE STRUCTURE	21
Nature of Operations and Principal Activities	21
Operating Results	21
Review of Operations	21
Statement of Financial Position	22
Significant Changes in the State of Affairs	22
Correction of a prior period error	23
Events Subsequent to the End of the Financial Year	23
Likely Developments	23
Dividends	23
Shares Under Option or Issued on Exercise of Options	24
Meetings of Directors	24
Corporate Governance Practices	25
Officers or Auditors‘ Indemnity and Insurance	25
Environmental Regulation	25
Legal Proceedings	25
Auditor	25
Remuneration Report (Audited)	26
Remuneration Committee	27
A. Remuneration Policy	27
B. Remuneration Structure	27
C. Employment contracts of Directors and senior executives	30

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D. Details of remuneration for year	30
Executives	30
E. The relationship between the remuneration policy and Company performance	30
Remuneration	31
End of Remuneration Report (Audited).	35
Directors‘ Declaration	36
Consolidated Statement of Profit or Loss and Other Comprehensive Income	41
Consolidated Statement of Financial Position	41
Consolidated Statement of Changes in Equity	43
Consolidated Statement of Cash Flows	44
Notes to the Financial Statements	45
1. General Information	45
2. New and revised standards that are effective for the current year	45
3. Summary of Significant Accounting Policies	50
4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty	63
5 Revenue and Expenses	67
6 Income Tax	68
7 Earnings Per Share	70
8. Segment Revenues and Results	71
9. Cash and Cash Equivalents	73
10. Trade and Other Receivables	74
11. Other Current Assets	75
12. Interest in Subsidiaries	76
13. Plant, Equipment and Leasehold Improvements	77
14. Intangible Assets	78
15. Trade and Other Payables	79
16. Borrowings	79
17. Provisions	80
18. Issued capital	81
19. Reserves	82
20. Dividends	82
21. Capital risk management	83
22. Financial instruments	83

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23.	Share-based payments	88
24.	Related party transactions	89
25.	Director and executive disclosures	92
26.	Commitments	93
27.	Remuneration of auditors	93
28.	Company details	94
29.	Subsequent Events	94

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CHAIRMAN’S REPORT

Fellow shareholders,

I am pleased to present your company’s 2016 annual report.

In my opening comments, I refer to my closing remarks in the 2015 annual report. Here, I noted the priority for MGM Wireless in 2016 was to consolidate the gains it had made in the preceding 6 years, and make the transitions necessary for the business to stay strong and continue to achieve longer term growth.

Our challenge was to realign our organisational cash cost structure to deliver the new product advancements upon which MGM Wireless would build a new phase of growth. This would require much more than simply developing a product offering customers and users the benefits of smartphone-based apps.

Building on the company’s core expertise in student attendance management and communication, our objective was to build and release a ground-breaking, comprehensive school-wide communication platform with all the sophisticated features, analytical and value-adding capabilities found only in the world’s leading social media and advertising products.

In doing so, we aimed to provide our users with a platform that would offer school communication and engagement capabilities well beyond anything else available in the market and, most importantly, upgrade the value and opportunity of our existing business model.

Twelve months on, I am pleased to report that your company has met the priorities we set for the year.

We have closed the year with an increased customer base; a re-engineered cash cost base aligned with the market’s new revenue structure; and most importantly, having retained technological and market leadership with the development and release in April of MGM SchoolStar.

We regard MGM SchoolStar as the most significant development for MGM Wireless since the company developed the world’s first SMS-based attendance management system in 2002.

For this reason, I have devoted some additional discussion later in this report to more fully address its significance and our expectations of its impact.

Financial Results

Three key features shaped the company’s results for 2016: lower revenue; which was more

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than offset by reductions achieved to cash expenditure; and substantial increases in amortisation charges that have flowed from our increased research and development expenditure.

MGM Wireless recorded a net profit after tax of $503,674, the seventh consecutive year of profit, which is noteworthy for a young technology company. The 2016 result compares with the previous year’s record profit of $1,041,780.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 3% to be $1,326,700 compared with $1,285,052.

Revenue for the year was $2,575,684, down from $3,157,199, primarily as a result of reduced SMS credit sales due to an overhang of unused credits from the previous year.

Cash and balance sheet

The company’s commitment to research and development, and its success in innovating products that win market acceptance, has been a feature of MGM Wireless from its beginning. In 2016 cash expenditure on research and development increased 16% on the year’s previous record level to $1,241,443.

The increase in R & D spending was the major factor in the small total cash outflow over the year. Nonetheless our balance sheet is healthy with a substantial net cash balance.

Cash balances were $1,405,660 at 30 June 2016. Borrowings were reduced 23% to $115,000, compared with $150,000 at 30 June 2015.

Dividend

Your company has a record of profit and cash generation and seeks to share its earnings with its shareholders. An unchanged final dividend of 1.3 cents per share has been announced. The divided is, as previous distributions, unfranked, as franking is not available while tax paid is exceeded by refundable R&D tax offsets.

MGM SchoolStar

MGM SchoolStar is the result of an intensive research and development effort by your company. It is the first school communication product in the world to provide the savings and convenience of IP messaging supported by automatic switchover to SMS; with all the integrity, security and analytical capabilities offered by our SMS products.

Similar to Facebook, SchoolStar also allows posting of school news, articles, event

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reminders, sports details, notices, pictures, videos and much more using MGM’s secure, Australia-domiciled infrastructure. Parents, caregivers and other school community members such as old scholars can securely access school information through a 2-factor registration process which matches the personal detail parents provide at time of registration to the school’s existing database of parents, before access is provided. It is bringing important changes to our clients and to our own business.

For our clients, the benefits extend much deeper than access to a reliable, app-based, universal attendance management platform. SchoolStar’s analytical capabilities, similar to those available through Google Analytics, will enable more informed and proactive management of attendance and engagement than has been hitherto possible.

Early identification enabling effective, early intervention is the critical ingredient for attendance management; SchoolStar’s capabilities in this respect have been enthusiastically recognised by our clients. Schools can also better target and improve their engagement efforts through the measurement and refinement enabled by SchoolStar’s feedback and analytical capabilities.

For MGM Wireless, all our school systems are now enabled with the MGM SchoolStar mobile app platform. It has broadened our value and service offering for schools, parents and caregivers and put new demands on our sales, service and technical capabilities. The training and resourcing of our team for these new requirements was a key focus in 2016 which is continuing into the New Year.

To encourage traction, MGM SchoolStar has been provided free of charge to all existing clients. It is our expectation that the product will encourage greater engagement and communication activity by schools, which will lead to increased message traffic and greater use of MGM Wireless products.

SMS message traffic trends

As noted above, our SMS revenue in 2016 was lower due to an overhang of unused credits in the market. We consider this to be a short term trend and that both mobile school communications systems and SMS message traffic can be expected to grow.

The drivers for this are broad based. Schools are subject to increased scrutiny and performance assessment of their attendance rates. Focus on student safety and welfare has increased, and with this the need for secure, verifiable and reliable communication with all parents. Finally, the use of free in-app messaging is encouraging school use of mobile messaging for school news, event reminders, sport and other non-critical forms of school communication.

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While there is no doubt that free in-app messaging is partially displacing SMS as a delivery platform, it is our expectation that the volume and frequency of SMS based communication will continue to increase.

Wearables

In late 2015 the company made its initial foray into the wearables market, where the development of new devices such as smartwatches offered congruence with MGM Wireless’ existing child safety product, MGM PinPoint. Since then, PinPoint has been reengineered into the AllMyTribe wearables platform, which will enable connectivity to a range of children’s smartwatches, family wearable devices and other Internet of Things (IoT) devices.

AllMyTribe is available through the Apple iTunes app store and represents the company’s first foray outside its traditional school market. This is an area which is embryonic, but progressing encouragingly. Adoption of wearable devices is growing, and the market for children’s wearables in particular is expected to grow with technological advances.

It is clear the AllMyTribe software is strategically a highly valuable and capable IoT platform and it is our expectation that, with the right wearable devices and distribution options, it has good promise. We are keenly examining device and distribution options for the best opportunity to leverage the value of the product.

Business operations and development

2016 was the most competitive period your company has experienced, with challenges being made through technological progress, cost, business processes and market share. As outlined in my opening comments MGM Wireless has met these challenges and completed the year in a strong position. Schools under contract rose from 1,165 to 1,265. Schools and Early Learning Centres under contract at end August 2016 were 1,272, with an increase of 36 schools over the preceding 4 months.

While our business involves contracting directly with individual schools, our business with public sector schools is typically conducted under the aegis of tenders won with relevant state government departments. The company has been successful in retaining all of its existing government contracts.

Concluding comments

In 2002 MGM Wireless foresaw the capabilities of mobile phone technology and was the first in the world to develop, and bring to market, an intelligent SMS-based attendance management system designed specifically for the needs of schools.

In the ensuing years, the company built a profitable, self-funding business which remains

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the undisputed leader in its field, both in the sophistication of our products and in market share.

While technological advance has presented many challenges, MGM Wireless has been able to leverage change into growth through discipline in maintaining an effective R & D effort and in attention to the needs of our customers and users.

The development and release of SchoolStar is the latest example of that and our focus in 2016 will be on completing the transition to this new platform and capitalising on the growth opportunity we believe it offers for customer numbers, product uptake and message traffic.

The priority we place on sustainable growth means that this will be an incremental rather than exponential process. As always, we will take the time to work with customers, their systems and school specific cultural issues and to ensure our business growth and technological advances are appropriately supported by skilled and trained internal resources.

The future of our business lies in our ongoing innovation of products that provide cost, feature and convenience benefits as technology evolves. Our investment in research and development is expected to rise again in 2017 as we continue our efforts in mobile and web server applications for schools and in IoT and wearable devices.

It is my firm belief that the work done in 2016 has prepared your company with the technology, product and balance sheet from which it can target a new phase of growth.

On behalf of my fellow directors I would like to record our appreciation of the efforts made by our small team of employees and their contribution in what has been a demanding but rewarding year. I wish them well for the new financial year.

Mark Fortunatow

Chairman

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COMPANY BACKGROUND

MGM Wireless is constantly improving its product range by extending the capabilities of existing products and regularly launching new products.

Our key products are:

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Our flagship student absence notification product, messageyou combines an established best practice Student Attendance Management approach to SMS with automation to enhance school business processes. messageyou™ integrates directly with all existing Student Management Systems.

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MGM Watchlists™ automates the analysis of Parent reply messages, message traffic and the status of attendance data to detect emerging patterns or trends and automatically alert School Leaders responsibile for follow-up action.

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Outreach™ is a school specific specialised web based SMS social communication solution that allows School Leaders to securely and easily communicate to Parents and the School Community. OutReach™ is well suited to sending:

School Event Reminders
Sport Fixtures
Late Breaking News
Emergency Notifications

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Using the most advanced internet security technology, Smartsync™ automatically extracts parent contact data from most leading student management systems and securely updates MGM’s cloud-based Outreach™ system.

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RollMarker manages student attendance in the easiest, most cost effective way possible by using the latest in software technology – the cloud and smartphones. RollMarker is gaining a repuation as being the most powerful, flexible yet easist to use student attendance management solution in Australia.

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A Smartphone and Apple Watch app, AllMyTribe keeps students safe by alerting parents whenever their child arrives or leaves a place such as school, bus stop, grandparents’ house, sports venue, teenage party, or home.

Many parents would like to give their children the responsibility and autonomy to walk, ride their bikes or catch a bus to school, but are concerned about their safety and not knowing if they’ve arrived. AllMyTribe gives parents peace of mind, knowing their children are safe and where they expect them to be.

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CORPORATE DIRECTORY

Registered Office	Suite 13, The Parks
	154 Fullarton Road
	Rose Park SA 5067
Principal Office	Suite 13, The Parks 154 Fullarton Road
	Rose Park SA 5067
	Telephone: (08) 8104 9555
	Facsimile: (08) 8431 2400
Auditor	Grant Thornton Audit Pty Ltd
	Level 1, 67 Greenhill Road
	Wayville SA 5034
	Telephone: (08) 8372 6666
	Facsimile: (08) 8372 6677
Share Registry	Computershare Investor Services Pty Ltd
	Level 5
	115 Grenfell Street
	Adelaide SA 5000
	Telephone: 1300 556 161
	Overseas Callers: 61 3 9415 4000
	Facsimile: 1300 534 987

Stock Exchange

The securities of MGM Wireless Limited are listed on the Australian Securities Exchange.

ASX Code: MWR ordinary fully paid shares

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DIRECTORS’ REPORT

Your Directors present their report on the Company and its controlled entities for the year ended 30 June 2016.

In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

DIRECTORS

The names of the Directors of the Company in office during the financial year and up to the date of this report are as follows.

Directors were in office for the entire year unless otherwise stated.

MARK FORTUNATOW

MARK EDWIN HURD

TARA RACQUEL LEWIS-CHRISTIE

LEILA HENDERSON

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Information On Directors

MARK FORTUNATOW B.Sc.(Ma.Sc.) B.Ec.

EXECUTIVE CHAIRMAN

Executive Chairman Mark Fortunatow, founder and chief executive of the Company’s subsidiary MGM Wireless Holdings Pty Ltd, brings more than 21 years of senior executive management experience in marketing, engineering, information systems, finance and customer support.

Mr Fortunatow previously founded three successful technology-based enterprises, Linx Computer Systems (developer and marketer of financial software), Timekeeping Australia (a leader in the Australian workforce management market) and Netline Technologies ( a company designing, engineering, selling and distributing voice based mobile wireless solutions), accumulating substantial practical experience in the many disciplines required to successfully launch and sustainably grow a successful technology enterprise.

He holds a degree of Bachelor of Science (Ma.Sc.) and Bachelor of Economics from Adelaide University.

Mr Fortunatow has been a director since 3 October 2003 and has held no other directorships in listed companies in the last 3 years.

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MARK EDWIN HURD B.Sc.(Ma.) (Hons)

EXECUTIVE DIRECTOR

Mr Hurd is co-founder and Chief Technical Officer of MGM Wireless Holdings Pty Ltd.

He has over 20 years of experience in software engineering, and holds an honours degree in Mathematical and Computer Sciences from Adelaide University.

He has received numerous awards for outstanding academic and software engineering achievements. He is the chief architect of MGM‘s technology.

A regular active contributor to Microsoft technical forums, Mr Hurd is sought after internationally by leading software engineers and corporations for his advice and software architecture expertise.

Prior to MGM, Mr Hurd was Chief Technical Officer at Netline Technologies, and before that held positions with Logica and Coopers & Lybrand (now Pricewaterhousecoopers) and carried out numerous academic research projects.

The company achievements included winning the “Most Outstanding Wireless Mobile Product” trophy at Internet World 2000, for E-Fone.

Mr Hurd has been a director since 3 October 2003. He has held no other directorships in listed companies in the last 3 years.

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TARA LEWIS-CHRISTIE

EXECUTIVE DIRECTOR

Ms Lewis-Christie is Chief Operating Officer of MGM Wireless Holdings Pty Ltd.

With formal qualifications in Financial Management, she commenced her career with the Company in 2010 as Assistant to the CFO, progressing to Company Accountant.

She has also held a variety of other key senior management positions at the Company including Client Management, Inside Sales and Product Development.

Prior to MGM Wireless Holdings Pty Ltd, Ms Lewis-Christie held management positions in the tourism, hospitality and food sectors.

Early in her career, she founded and operated a successful bookkeeping business in Broken Hill for local companies, resulting in her winning the prestigious town award for Business Person of the Year, 2009 – People’s Choice Award.

Ms Lewis-Christie has been a director since 26 February 2014. She has held no other directorships.

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LEILA HENDERSON

NON-EXECUTIVE DIRECTOR

A journalist and PR/marketing specialist, Ms Henderson founded media technology business NewsMaker in 2004, building it to a subscription base of over 10,000 marketing professionals. She is also Co-founder and Director of software startup Ofreddi Pty Ltd.

Ms Henderson is the inaugural Fellow of the New Venture Institute at Flinders University; an Ambassador of the Impact Awards – South Australia; and an investor in the SouthStart Accelerate incubator. In 2014 she was awarded the Information Technology Prize from Women in innovation & Technology (SA).

Her journalism career spanned three continents, culminating in a seven-year stint as an IT and business journalist with News Limited. She has worked in editorial management roles for major publishers such as IPC in London, Toronto Star Group in Canada; and Fairfax Magazines, Australian Consolidated Press and Reader’s Digest Group in Australia.

As a Public Relations practitioner with significant international experience, she has worked in Australia, North America and the United Kingdom, including as PR advisor to IBM and the South Australian Government.

Ms Henderson has been a director since 7 July 2014. She has held no other directorships with listed companies.

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COMPANY SECRETARY

JUSTIN NELSON LLB, BA (JUR)

Mr Nelson has extensive experience in the listed company environment through his former role as the ASX’s SA State Manager and Manager Listings (Adelaide); roles he held for 8 years until the Adelaide ASX offices were consolidated nationally in March 2012.

An expert in corporate governance procedures, ASX Listing Rules and company meeting practice, Mr Nelson is also a regular presenter on corporate governance topics for the Governance Institute of Australia, the leading independent authority on best practice in board and organisational governance and risk management.

Directors‘ Interests In Shares And Options

The relevant interest of each Director in the shares and options of the Company at the date of this Report is as follows:

	ORDINARY FULLY- OPTIONS – EXP 30 APRIL 2017	OPTIONS – EXP 27 AUGUST 2018	OPTIONS – EXP 30 APRIL 2018	OPTIONS – EXP 30 APRIL 2020
DIRECTOR	PAID SHARES EXERCISE PRICE $1.60	EXERCISE PRICE $1.10	EXERCISE PRICE $1.25	EXERCISE PRICE $1.40
Mark Fortunatow	1,323,485 200,000	-	170,000	170,000
Mark Hurd	626,528 80,000	-	-	50,000
Tara Lewis-Christie	10,000 -	30,000	50,000	10,000
Leila Henderson	- -	-	10,000	10,000

Remuneration of directors and key management personnel

Information about the remuneration of directors and key management personnel is set out in the remuneration report of this directors‘ report on pages 28 to 37.

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CORPORATE INFORMATION - CORPORATE STRUCTURE

MGM Wireless Limited is a limited liability Company that is incorporated and domiciled in Australia. MGM Wireless Limited has prepared consolidated financial statements incorporating the entities that it controlled during the financial year as follows:

ENTITY	DETAILS
MGM Wireless Limited	parent entity
MGM Wireless Holdings PtyLtd	100% owned controlled entity
Messageyou LLC	100% owned controlled entity
MGM Wireless(NZ)PtyLtd	100% owned controlled entity

Nature of Operations and Principal Activities

The consolidated entity‘s principal continuing activity during the course of the financial year was as a single source provider of mobile messaging solutions for business enterprises.

Operating Results

The amount of the total comprehensive income / (loss) attributable to members of the Company after income tax was $494,570 (2015: $1,036,941).

Review of Operations

During the year ended 30 June 2016, the Company continued its initiatives to underpin accelerated growth in the medium and long term. Specifically, spending on research and development was significant at $1.83 million (2015: $1.69 million) and there was continued high investment in the Company’s sales and marketing capability. Research and development spending was directed at both existing products, to ensure that they are able to sustain their position as market leaders, and new products which will open new avenues for revenue generation.

The Board has performed an assessment of the useful life of its product base (which is comprised of capitalised R&D). In the current year, the Company has capitalised $1.8 million of the total of its $1.84 million of claimable R&D expenditure, and has assessed the useful lives of the associated products to be three years. As such, the Company plans to amortise this amount over a three-year period. Offsetting part of this effect was an amortisation charge of $44K to Distribution Rights, currently being recorded at a value of $308,712. The Company plans to amortise the full amount over its 10-year useful life.

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Revenue for the full year was 18% lower at $2,575,684 (2015: $3,157,199).
Net profit 52% decrease to $503,674 (2015: 1,041,780)
EBITDA profit 3% increase to $1,326,700 (2015: $1,285,032)
Customer base of operational schools grew by 9% to a total of 1,265 schools (2015: 1,165).
For the six months to June 30 2016 an EBITDA profit of $668,579 (2015: $275,120) with a net profit of $318,690 (2015: $401,562).
For the six months to June 30 2016, the Company grew its customer base of operational schools by 33 new schools, as compared to an increase of 22 schools for the six months to June 30, 2015.

Statement of Financial Position

The Company’s shareholder equity strengthened from $4,093,278 as at 30 June 2015 to $4,651,232 as at 30 June 2016.

Total assets were 14% higher than a year earlier at $5,852,176 as at 30 June 2016 primarily due to higher working capital and a large increase in cash.

Total current liabilities were 13% lower than a year earlier with $1,085,944 as at 30 June 2016 which included $96,817 accrued SMS charges and trade payables of $326,971. Borrowings (from Directors) reduced to $115,000.

Significant Changes in the State of Affairs

In the opinion of the Directors, there were no significant changes in the state of affairs of the Company that occurred during the financial year under review, not otherwise disclosed in these financial statements and Directors’ report.

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Correction of a prior period error

During the annual review of the Group’s accounting policies, a prior period error was identified in relation to the accounting for the research and development tax incentive refund. This error has been rectified by restating each of the affected financial statement line items for prior periods. The resulting correction has had no impact on the previously reported final results for the 2015 year or the reported results in the Appendix 4E for the year ended 30 June 2016. Refer to Note 2.2 for further details.

Events Subsequent to the End of the Financial Year

On 31 August 2016, a dividend of $0.013 per share was declared in respect of the 2016 financial year.

Except as disclosed above, there has not been any matter or circumstance that has arisen since 30 June 2016, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years.

Likely Developments

Comments on likely developments and expected results have been covered generally herein and in the Review of Operations.

The Company is actively pursuing various opportunities to grow revenues including new product development and alliances with other companies.

Disclosure of more specific information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity, the results of those operations, and/or the state of affairs of the consolidated entity in future financial years.

Dividends

A dividend of $0.013 per share was declared in respect of the 2016 financial year on 31 August 2016.

A dividend of $0.013 per share was paid in respect of the 2015 financial year on 31 August 2015.

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Shares Under Option or Issued on Exercise of Options

Details of unissued shares or interests under option as at the date of this report are:

ISSUING ENTITY	Number of Shares	Class of	Exercise Price	Expiry Date of
	Under Option	Shares	of Options	Options
MGM Wireless Ltd	310,000	Ordinary	$1.60	30/4/2017
MGM Wireless Ltd	30,000	Ordinary	$1.10	27/8/2018
MGM Wireless Ltd	230,000	Ordinary	$1.25	30/4/2018
MGM Wireless Ltd	240,000	Ordinary	$1.40	30/4/2020
	810,000

The holders of these options do not have the right, by virtue of the option to participate in any share issue or interest issue of the Company or any other body corporate.

No shares or interests under option expired during the year (2015: nil).

80,000 shares were issued during or since the end of the financial year as a result of the exercise of $0.70 options (2015:nil).

ISSUING ENTITY	Number of Shares
	Issued resulting
	from options	Class of	Issue Date	Exercise Price
	exercise	Shares	of Shares	of Options
MGM Wireless Ltd	80,000	Ordinary	30/4/2016	0.70 $

Meetings of Directors

The attendance of Directors at the meetings of the Company’s Board of Directors held during the year is as follows:

	Number of Meetings	Number of meetings
DIRECTOR	Held whilst in office	Attended
M Fortunatow	4	4
M Hurd	4	3
T Lewis-Christie	4	4
Leila Henderson	4	4

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Corporate Governance Practices

The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, MGM Wireless Limited and its Controlled Entities (`the 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 beginning on or after 1 July 2014.

The Group’s Corporate Governance Statement for the financial year ending 30 June 2016 is dated as at 30 June 2016 and was approved by the Board on 26 September 2016. The Corporate Governance Statement is available on MGM Wireless Limited’s website at www.mgmwireless.com/investors-centre/corporate-governance.

Officers or Auditors‘ Indemnity and Insurance

During the financial year, the Company paid a premium in respect of a contract insuring the directors of the company (as named above), the company secretary Mr J Nelson, and all executive officers of the Company and any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Environmental Regulation

The Company’s operations are not regulated by any significant environmental regulation under a Law of the Commonwealth or of a State or Territory.

Legal Proceedings

No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

Auditor

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 27 of the financial statements.

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The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

All non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
The nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decisionmaking capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

No non-audit services have been provided by the Auditor or by another person on the Auditor’s behalf during the year.

Auditor’s Declaration of Independence

The Auditor’s independence declaration for the year ended 30 June 2016 has been received and is included on page 39.

Remuneration Report (Audited)

This remuneration report, which forms part of the Directors’ report, details the nature and amount of remuneration for each Director and other key management personnel of MGM Wireless Limited. The information provided in the remuneration report includes remuneration disclosures that are audited as required by section 308(3C) of the Corporations Act 2001.

For the purposes of this report Key Management Personnel of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes executives in the parent group receiving the highest remuneration.

The remuneration policy, last voted upon by shareholders at the 2015 AGM and passed by 86.7% of votes cast is set out below. No consultants services were used during the year.

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Remuneration Committee

The full Board carries out the role and responsibilities of the Remuneration Committee and is responsible for determining and reviewing the compensation arrangements for the Directors themselves, the Managing Director and any executives.

Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative remuneration and internal and independent external advice.

A. Remuneration Policy

The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The Board determines payments to the 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 Directors’ fees that can be paid is subject to approval by shareholders in general meeting, from time to time. Fees for non-executive Directors are not linked to the performance of the consolidated entity. However, to align Directors’ interests with shareholders‘ interests, the Directors are encouraged to hold shares in the Company.

The executive Directors and full time executives receive a superannuation guarantee contribution required by the government, which is currently 9.50%, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation.

All remuneration paid to Directors and executives is valued at the cost to the Company and expensed.

The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation of this size and maturity.

The Company did not pay any performance-based component of remuneration during the year.

B. Remuneration Structure

In accordance with best practice corporate governance, the structure of nonexecutive Director and executive compensation is separate and distinct.

Non-executive Director Compensation

Objective

The Board seeks to set aggregate compensation at a level that provides the Company

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with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

Structure

The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed.

The amount of aggregate compensation sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. The Board considers advice from external consultants as appropriate as well as the fees paid to nonexecutive Directors of comparable companies when undertaking the annual review process. Non-Executive Directors’ remuneration may include an incentive portion consisting of options, as considered appropriate by the Board, which may be subject to Shareholder approval in accordance with ASX listing rules.

Separate from their duties as Directors, the Non-Executive Directors undertake work for the Company directly related to the evaluation and implementation of various business opportunities, including information / evaluation and new business ventures, for which they receive a daily rate. These payments are made pursuant to individual agreements with the non-executive Directors and are not taken into account when determining their aggregate remuneration levels.

Executive Compensation

Objective

The entity aims to reward executives with a level and mix of compensation commensurate with their position and responsibilities within the entity so as to:

reward executives for Company and individual performance against targets set by appropriate benchmarks;
align the interests of executives with those of shareholders;
link rewards with the strategic goals and performance of the Company; and
ensure total compensation is competitive by market standards.

Structure

In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to reflect the market salary for a position and individual of comparable responsibility and experience. Due to the limited size of the Company and its operations and financial affairs, the use of a separate remuneration committee has not been considered appropriate. Remuneration is regularly compared with the external

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market by particpation in industry salary surveys and during recruitment activities generally. If required, the Board may engage an external consultant to provide independent advice in the form of a written report detailing market levels of remuneration for comparable executive roles.

Remuneration consists of a fixed remuneration and a long term incentive portion as considered appropriate. Compensation may consist of the following key elements:

Fixed Compensation;
Variable Compensation;
Short Term Incentive (STI); and
Long Term Incentive (LTI).

Fixed Remuneration

The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market. Fixed remuneration is reviewed annually by the Board having regard to the Company and individual performance, relevant comparable remuneration in the information technology sector and external advice. The fixed remuneration is a base salary or monthly consulting fee.

Variable Pay — Long Term Incentives

The objective of long term incentives is to reward Directors / executives in a manner which aligns this element of remuneration with the creation of shareholder wealth. The incentive portion is payable based upon attainment of objectives related to the Director’s / executive’s job responsibilities. The objectives vary, but all are targeted to relate directly to the Company’s business and financial performance and thus to shareholder value.

Long term incentives (LTIs) granted to Directors / executives are delivered in the form of options.

LTI grants to Executives are delivered in the form of employee share options. These options are issued at an exercise price determined by the Board at the time of issue. The employee share options generally vest over a selected period.

The objective of the granting of options is to reward Executives in a manner which aligns the element of remuneration with the creation of shareholder wealth. As such LTI’s are made to Executives who are able to influence the generation of shareholder wealth and thus have an impact on the Company’s performance.

The level of LTI granted is, in turn, dependent on the Company’s recent share price performance, the seniority of the Executive, and the responsibilities the Executive assumes

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in the Company.

Typically, the grant of LTIs occurs at the commencement of employment or in the event that the individual receives a promotion and, as such, is not subsequently affected by the individual’s performance over time.

C. Employment contracts of Directors and senior executives

The employment arrangements of the Directors are not formalised in a contract of employment.

D. Details of remuneration for year

Directors

The following persons were Directors of MGM Wireless Limited during the financial year:

Mark Fortunatow Chairman (executive) Mark Hurd Director (executive) Tara Lewis-Christie Director (executive) Leila Henderson Director (non-executive)

Executives

There were no other persons that fulfilled the role of a key management person, other than those disclosed as Directors.

E. The relationship between the remuneration policy and Company performance

	30/06/2016	30/06/2015 *	30/06/2014 *	30/06/2013 *	30/06/2012	30/06/2011
Revenue	2,575,684	3,157,199	2,695,473	2,381,143	2,605,719	2,390,487
Net profit/(loss) before tax	103,773	603,374	397,066	58,827	602,756	256,944
Net profit/(loss) after tax	503,674	1,041,780	717,541	657,835	602,756	256,944
	30/06/2016	30/06/2015 *	30/06/2014	30/06/2013 *	30/06/2012	30/06/2011
Share price at start of year	1.70	1.05	0.85	0.35	0.01	0.01
Share price at end of year	0.65	1.70	1.05	0.85	0.35	0.01
Interim dividend	-	-	-	-	-	-
Final dividend	0.01	0.01	-	0.01	-	-
Basic earnings/(loss) cents per share	5.84	12.16	8.49	8.49	-	0.11
Diluted earnings/(loss) cents per share	5.64	11.96	8.33	8.33	-	0.11

Prior year balances have been adjusted for the restatement of the research and development tax incentive refund.

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Remuneration

Details of the remuneration of each Director and named executive officer of the Company, including their personally-related entities, during the year was as follows:

Director Remuneration 2016	Mark Fortunatow Mark Hurd Tara Lewis-Christie Leila Henderson
Short term - Salary & Fees Post employment - Superannuation Share-based - Options Share-based - Shares Total % of remuneration share-based	375,027 27,040 132,177 18,000 35,275 2,569 11,754 - 62,510 18,385 3,677 3,677 - - - -
	472,812 47,994 147,608 21,677
	13% 38% 2% 17%
2015
Short term - Salary & Fees Post employment - Superannuation Share-based - Options Share-based - Shares Total % of remuneration share-based	393,856 27,040 113,870 18,000 37,132 2,569 9,302 - 68,658 - 20,194 4,039 - - - -
	499,646 29,609 143,366 22,039
	14% 0% 14% 18%

There were no other key management personnel of the Company at any time during the year. There were no performance related payments made during the year.

The Binomial valuation method was used to value the options issued as share-based payments. The following factors and assumptions were used in determining the fair value of options on grant date:

Name	During the financialyear	During the financialyear	During the financialyear	During the financialyear	During the financialyear	During the financialyear
	Grant Date	No. granted	No. vested	% of grant vested	% of grant forfeited	% of compensation for the year consisting of options
Mark Fortunatow	12/7/2015	170,000	170,000	100%	n/a	11%
Mark Hurd	12/7/2015	50,000	50,000	100%	n/a	38%
TaraLewis-Christie	12/7/2015	10,000	50,000	100%	n/a	3%
LeliaHenderson	12/7/2015	10,000	10,000	100%	n/a	17%

The weighted average share price during the year was$1.1390 (2015: $1.2514).

The average remaining contractual life of options outstanding at the end of the financial year was 2.17 years (2015: 2.13).

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For the options granted during the current financial year, the valuation model inputs used to determine the fair value as at grant date were as follows:

Grant Date	Expiry Date	Share price at grant date	Exercise price	Expected volatility	Dividend yield	Risk free interest rate	Fair value at grant date
7/12/2015	30/04/2020	$1.25	$1.40	48.30%	0.00%	2.33%	$0.37

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During the financial year, the following share based payment arrangements were in existence:

Name	Grant Date	Expiry Date	Grant Date Fair Value	Vesting Date
Mark Fortunatow	7/11/2013	30/04/2017	$0.32	Vests atdate ofgrant
Mark Fortunatow	17/12/2014	30/04/2018	$0.40	Vests at date ofgrant
Mark Fortunatow	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant
Mark Hurd	7/11/2013	30/04/2017	$0.32	Vests at date ofgrant
Mark Hurd	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant
TaraLewis-Christie	4/09/2013	27/08/2018	$0.41	Vests atdate ofgrant
Tara Lewis-Christie	17/12/2014	30/04/2018	$0.40	Vests at date ofgrant
TaraLewis-Christie	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant
Lelia Henderson	17/12/2014	30/04/2018	$0.40	Vests at date ofgrant
LeliaHenderson	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant

There is no further service or performance criteria that need to be met in relation to options granted before the beneficial interest vests in the recipient. These options are not linked to the performace of the individual.

All options granted during the year to Directors and executives have vested. No options granted to Directors and executives during the year were forfeited. No options previously granted to Directors and executives lapsed during the year.

No loans were provided to key management personnel during the financial year.

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The following table outlines the fully paid ordinary shares held by key management personnel in MGM Wireless Ltd

Name	Balance at 1 July	Granted as compensation	Received on exercise of options	Net other change	Balance at 30 June
2016	No.	No.	No.	No.	No.
Mark Fortunatow	1,505,267	-	30,000	(212,782)	1,322,485
Mark Hurd	571,418	-	50,000	5,110	626,528
TaraLewis-Christie	10,000	-	-	-	10,000
LeilaHenderson	-	-	-	-	-

Name	Balance at 1 July	Granted as compensation	Received on exercise of options	Net other change	Balance at 30 June
2015	No.	No.	No.	No.	No.
Mark Fortunatow	1,505,267	-	-	-	1,505,267
Mark Hurd	571,418	-	-	-	571,418
TaraLewis-Christie	10,000	-	-	-	10,000
LeilaHenderson	-	-	-	-	-

The following table outlines the share options held by key management personnel in MGM Wireless Ltd

Name	Balance at 1 July	Granted as compensation	Reduction due to exercise of options	Weighted average exercise price	Net other change	Balance at 30 June	Balance not yet vested or exercisable
2016	No.	No.	No.	($)	No.	No.	No.
Mark Fortunatow	400,000	170,000	(30,000)	0.70		540,000	540,000
Mark Hurd	130,000	50,000	(50,000)	0.70	-	130,000	130,000
Tara Lewis-Christie	80,000	10,000	-	-	-	90,000	90,000
Leila Henderson	10,000	10,000	-	-	-	20,000	20,000

Name	Balance at 1 July	Granted as compensation	Reduction due to exercise of options	Weighted average exercise price	Net other change	Balance at 30 June	Balance not yet vested or exercisable
2015	No.	No.	No.	($)	No.	No.	No.
Mark Fortunatow	230,000	170,000	-	-	-	400,000	400,000
Mark Hurd	130,000	-	-	-	-	130,000	130,000
Tara Lewis-Christie	30,000	50,000	-	-	-	80,000	80,000
Leila Henderson	-	10,000	-	-	-	10,000	10,000

In the 2009 financial year, Mr Fortunatow and Mr Hurd each advanced the Group the sum of $150,000. During the 2013 financial year, $100,000 of the loan to Mr Fortunatow was repaid with a further $50,000 being repaid in the 2015 financial year. An amount of $35,000 was repaid to Mr Hurd in the 2016 financial year. Interest paid in relation to the

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loans was $11,442, (2015: $15,174). Total borrowings from Directors at 30 June 2016 was $115,000.

End of Remuneration Report (Audited).

This Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors,

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Mark Fortunatow Executive Chairman Signed at Adelaide on Friday 30 September 2016

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Directors‘ Declaration

The Directors of the Company declare that:

(a) 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;

(b) in the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 3.1 to the financial statements;

(c) in the Directors‘ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; and

(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors,

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Mark Fortunatow Executive Chairman Signed at Adelaide on Friday 30 September 2016

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Level 1, 67 Greenhill Rd Wayville SA 5034 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E [email protected] W www.grantthornton.com.au

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF MGM WIRELESS LTD

Report on the financial report

We have audited the accompanying financial report of MGM Wireless Ltd (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors’ responsibility also includes 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. The

Directors also state, in the notes to the financial report, in accordance with Accounting Standard

AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards.

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Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company’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 Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

a the financial report of MGM Wireless Ltd is in accordance with the Corporations Act 2001, including:
i giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its performance for the year ended on that date; and

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ii complying with Australian Accounting Standards and the Corporations Regulations 2001.
b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the remuneration report included in the directors’ report for the year ended 30 June 2016. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of MGM Wireless Ltd for the year ended

complies with section 300A of the Corporations Act 2001.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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S K Edwards Partner - Audit & Assurance

Adelaide, 30 September 2016

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Level 1, 67 Greenhill Rd Wayville SA 5034

Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E [email protected] W www.grantthornton.com.au

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MGM WIRELESS LTD

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of MGM Wireless Ltd for the year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit.

b

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

S K Edwards

Partner - Audit & Assurance Adelaide, 30 September 2016

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income

Notes	30/06/2016 30/06/2015 $ $ Group Year Ended
Continuing Operations Revenue 5 Cost of sales Doubtful debts Borrowing costs Amortisation & depreciation Option issue costs Consulting fees Corporate and administration Employee costs Profit before tax Income tax benefit/(expense) 6 Profit for the year Other comprehensive income/Items that may be classified subsequently to profit or loss Exchange differences on translating foreign operations Other comprehensive income net of tax Total comprehensive income for the year Profit attributable to: Owners of the Company Earnings per share From continuing and discontinued operations:	2,575,684 3,157,199 (311,456) (261,728) (42,807) (150,000) (11,442) (15,174) (1,211,485) (666,483) (88,250) (93,571) (55,773) (47,655) (414,094) (365,963) (336,604) (953,251)
	103,773 603,374 399,901 438,406
	503,674 1,041,780
	(9,104) (4,839)
	(9,104) (4,839)
	494,570 1,036,941
	494,570 1,036,941

Basic (cents per share) 7	5.84 12.16
Diluted (cents per share) 7	5.64 11.96

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

Consolidated Statement of Financial Position

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Notes	30/06/2016 30/06/2015 $ $ Group As At
ASSETS Current Assets Cash and cash equivalents 9 Trade and other receivables 10 Other 11 Total Current Assets Non-Current Assets Property, plant and equipment 13 Intangibles 14 Deferred tax assets 6 Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Trade and other payables 15 Provisions 17 Current Tax Liabilities Total Current Liabilities	1,405,660 1,526,754 794,282 787,592 846,027 636,264
	3,045,969 2,950,610
	168,461 183,214 2,626,645 2,016,176 11,101 -
	2,806,207 2,199,390
	5,852,176 5,150,000
	423,788 508,773 242,692 221,611 419,464 176,339
	1,085,944 906,723

Non-Current Liabilities
Borrowings 16 Total Liabilities Net Assets EQUITY Issued capital 18 Reserves 19 Accumulated losses Total Equity	115,000 150,000
	115,000 150,000
	1,200,944 1,056,723
	4,651,232 4,093,277
	7,454,029 7,376,993 463,875 396,467 (3,266,672) (3,680,183)
	4,651,232 4,093,277

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

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Consolidated Statement of Changes in Equity

Consolidated	Issued Accumulated Option Foreign Total Capital Losses Issue Currency Equity Reserve Translation Reserve $ $ $ $ $
At 30 June 2014 Profit attributable to members Currency translation differences Total comprehensive income Transactions with owners Contributions and distributions Payment of dividends Options issued to directors Transactions with owners At 30 June 2015 Profit attributable to members Currency translation differences Total comprehensive income Transactions with owners Contributions and distributions Payment of dividends Shares issued to directors Options issued to directors Transactions with owners At 30 June 2016	7,376,993 (4,627,722) 301,762 5,973 3,057,006 - 1,041,780 - - 1,041,780 - - - (4,839) (4,839)
	- 1,041,780 - (4,839) 1,036,941
	- (94,241) - - (94,241) - - 93,571 - 93,571
	- (94,241) 93,571 - (670)
	7,376,993 (3,680,183) 395,333 1,134 4,093,277
	- 503,674 - - 503,674 - - - (20,842) (20,842)
	- 503,674 - (20,842) 482,832
	- (90,163) - - (90,163) 77,036 - - - 77,036 - - 88,250 - 88,250
	77,036 (90,163) 88,250 - 75,123
	7,454,029 (3,266,672) 483,583 (19,708) 4,651,232

The above Consolidated Statement of Changes in Equity should be read in conjunction with the attached notes.

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Consolidated Statement of Cash Flows

Notes	30/06/2016 30/06/2015 $ $ Group Year Ended
Cash flows from operating activities Receipts from customers Payments to suppliers Tax Interest payments Net cash generated from / (used in) operations 9 Cash flows from investing activities Payments for plant and equipment Payment for research and development Net cash provided / (used) by investing activities Cash flows from financing activities Payment of dividends Repayment of borrowing Proceeds from the issue of shares Proceeds from options exercised Net cash provided / (used) by financing activities Net increase / decrease in cash held Cash at the beginning of the year Effect of exchange rate changes Cash at the end of the year 9	2,749,329 2,993,040 (1,080,279) (1,783,437) 156,776 (306,490) (11,442) (15,174)
	1,814,384 887,939
	(1,744) (24,571) (1,843,413) (24,571)
	(1,845,157) (49,142)
	(90,163) (94,241) (35,000) (94,241) - 93,571 55,683 -
	(69,480) (94,911)
	(100,253) 743,886 1,526,754 1,077,840 (20,842) (4,838)
	1,405,659 1,816,888

The above Consolidated Statement of Cash Flows should be read in conjunction with the attached notes.

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Notes to the Financial Statements

1. General Information

MGM Wireless Limited (the Company) is a limited Company incorporated in Australia. The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report. The principal activities of the Company and its subsidiaries (the Group) are described on page 22 of the Annual Report.

2. New and revised standards that are effective for the current year

A number of new and revised standards and an interpretation became effective for the first time to annual periods beginning on or after 1 July 2015. Information on these new standards is presented below. The adoption of this amendment has not had a material impact on the Group.

2.1 Accounting Standards issued but not yet effective and not being adopted early by the Group

The accounting standards that have not been early adopted for the year ended 30 June 2016, but will be applicable to the Group in future reporting periods, are detailed below. Apart from these standards, other accounting standards that will be applicable in future periods have been reviewed, however they have been considered to be insignificant to the Group.

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group. Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the group’s financial statements is provided below.

AASB 139 Financial Instruments: Recognition and Measurement (1 January 2018)

AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities and includes a forward-looking ‘expected loss’ impairment model and a substantially-changed approach to hedge accounting.

These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are:

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a) Financial assets that are debt instruments will be classified based on: (i) the objective of the entity’s business model for managing the financial assets; and (ii) the characteristics of the contractual cash flows.
b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income (instead of in profit or loss). Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.
c) Introduces a ‘fair value through other comprehensive income’ measurement category for particular simple debt instruments.
d) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.
e) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:
the change attributable to changes in credit risk are presented in Other Comprehensive Income (OCI)
the remaining change is presented in profit or loss

If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.

Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into AASB 9:

classification and measurement of financial liabilities; and
derecognition requirements for financial assets and liabilities

AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge accounting that enable entities to better reflect their risk management activities in the financial statements.

Furthermore, AASB 9 introduces a new impairment model based on expected credit losses. This model makes use of more forward-looking information and applies to all financial instruments that are subject to impairment accounting.

The entity is yet to undertake a detailed assessment of the impact of AASB 9.

AASB 1057 Application of Australian Accounting Standards (1 January 2016)

In May 2015, the AASB decided to revise Australian Accounting Standards that incorporate IFRSs to minimise Australian-specific wording even further. The AASB noted that IFRSs do not contain application paragraphs that identify the entities and financial reports to which the Standards (and Interpretations) apply. As a result, the AASB decided

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to move the application paragraphs previously contained in each Australian Accounting Standard (or Interpretation), unchanged, into a new Standard AASB 1057 Application of Australian Accounting Standards.

When this Standard is first adopted for the year ending 30 June 2017, there will be no impact on the financial statements.

AASB 15 Revenue from Contracts with Customers (1 January 2018)

AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 (1 January 2018)

AASB 2015-8 Amendments to Australian Accounting Standards – Effective Date of AASB 15 (1 January 2017)

AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related Interpretations:

establishes a new revenue recognition model
changes the basis for deciding whether revenue is to be recognised over time or at a point in time
provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of return, warranties and licensing)
expands and improves disclosures about revenue

In May 2015, the AASB issued ED 260 Income of Not-for-Profit Entities, proposing to replace the income recognition requirements of AASB 1004 Contributions and provide guidance to assist not-for-profit entities to apply the principles of AASB 15. The ED was open for comment until 14 August 2015 and the AASB is currently in the process of redeliberating its proposals with the aim of releasing the final amendments in late 2016.

AASB 2014-5 incorporates the consequential amendments arising from the issuance of AASB 15.

AASB 2015-8 amends the mandatory application date of AASB 15 Revenue from Contracts with Customers so that AASB 15 is required to be applied for annual reporting periods beginning on or after 1 January 2018 instead of 1 January 2017. It also defers the consequential amendments that were originally set out in AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15.

The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.

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AASB 16 Leases (1 January 2019) AASB 16:

replaces AASB 117 Leases and some lease-related Interpretations
requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low value asset leases
provides new guidance on the application of the definition of lease and on sale and lease back accounting
largely retains the existing lessor accounting requirements in AASB 117
requires new and different disclosures about leases

The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity’s preliminary assessment, the likely impact on the first time adoption of the Standard for the year ending 30 June 2020 includes:

there will be a significant increase in lease assets and financial liabilities recognised on the balance sheet
the reported equity will reduce as the carrying amount of lease assets will reduce more quickly than the carrying amount of lease liabilities
EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit interest in lease payments for former off balance sheet leases will be presented as part of finance costs rather than being included in operating expenses
operating cash outflows will be lower and financing cash flows will be higher in the statement of cash flows as principal repayments on all lease liabilities will now be included in financing activities rather than operating activities. Interest can also be included within financing activities.

AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation (1 January 2016)

The amendments to AASB 116 prohibit the use of a revenue-based depreciation method for property, plant and equipment. Additionally, the amendments provide guidance in the application of the diminishing balance method for property, plant and equipment.

The amendments to AASB 138 present a rebuttable presumption that a revenuebased amortisation method for intangible assets is inappropriate. This rebuttable presumption can be overcome (i.e. a revenue-based amortisation method might be appropriate) only in two (2) limited circumstances:

1) The intangible asset is expressed as a measure of revenue, for example when the predominant limiting factor inherent in an intangible asset is the achievement of a revenue threshold (for instance, the right to operate a toll road could be based on a fixed total amount of revenue to be generated from cumulative tolls charged); or
2) When it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated.

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When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on the transactions and balances recognised in the financial statements.

AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012-2014 Cycle (1 January 2016)

These amendments arise from the issuance of Annual Improvements to IFRSs 20122014 Cycle in September 2014 by the IASB. Among other improvements, the amendments clarify that when an entity reclassifies an asset (or disposal group) directly from being held for sale to being held for distribution (or vice-versa), the accounting guidance in paragraphs 27-29 of AASB 5 Non-current Assets Held for Sale and Discontinued Operations does not apply. The amendments also state that when an entity determines that the asset (or disposal group) is no longer available for immediate distribution or that the distribution is no longer highly probable, it should cease held-for-distribution accounting and apply the guidance in paragraphs 27-29 of AASB 5.

When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on the financial statements.

AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 (1 January 2016)

The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure Initiative project.

The amendments:

clarify the materiality requirements in AASB 101, including an emphasis on the potentially detrimental effect of obscuring useful information with immaterial information
clarify that AASB 101’s specified line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position can be disaggregated
add requirements for how an entity should present subtotals in the statement(s) of profit and loss and other comprehensive income and the statement of financial position
clarify that entities have flexibility as to the order in which they present the notes, but also emphasise that understandability and comparability should be considered by an entity when deciding that order
remove potentially unhelpful guidance in AASB 101 for identifying a significant accounting policy

When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on the financial statements.

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AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 (1 January 2017)

AASB 2016-2 amends AASB 107 Statement of Cash Flows to require entities preparing financial statements in accordance with Tier 1 reporting requirements to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and noncash changes.

When these amendments are first adopted for the year ending 30 June 2018, there will be no material impact on the financial statements.

2.2 Correction of a prior period error

30 June 2015	Previous amount	Adjustment	Restated amount
Consolidated statement of profit or loss and other comprehensive income
Revenue	3,867,822	(710,623)	3,157,199
Profit before tax	1,313,997	(710,623)	603,374
Income tax(expense)/benefit	(212,217)	710,623	438,406
Profit for theyear	1,041,780	-	1,041,780
Total comprehensive income attributable to the parent	1,036,941	-	1,036,941

Basic earningsper share(cents)	12.16	-	12.16
Diluted earningsper share(cents)	11.96	-	11.96

3. Summary of Significant Accounting Policies

3.1 Statement of compliance

The financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.

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The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.

Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the Directors on 30 September 2016.

3.2 Basis of preparation

The consolidated financial statements have been prepared on the basis of historical cost, except for certain non-current assets and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below.

3.3 Basis of consolidation

The consolidated financial statements comprise the financial statements of MGM Wireless Limited (the Company) and entities controlled by MGM Wireless Limited (its subsidiaries). Control is achieved when the Company:

has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

The financial statements of the subsidiaries are prepared for the same period as MGM Wireless Limited using consistent accounting policies.

In preparing the consolidated financial statements, all interCompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business

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combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the consolidated financial statements include the results of subsidiaries for the period from their acquisition.

3.4 Revenue recognition

The basis of revenue recognition remains consistent and is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Specifically, revenue recognition is subject to the following;

Events being met, and
Revenue timings

Events:

Sale of product/services

Control of the goods (at the signing of the legally enforceable contract) has passed to the buyer.

Revenue timings:

Sale of product/services

Revenue from the sale of the Group’s products/services is recognised in two components;

Component 1: the majority of revenue is brought to account at the start of the contract in line with the majority of expenses being incurred at that time and the revenue being non-refundable.

Component 2: the balance of revenue is held as a Deferred revenue liability and recognised over the life of the contract as expenses for delivery of the services are incurred.

Interest

Control of a right to receive consideration for the provision of, or investment in, assets has been attained.

3.5 Foreign currency translation

Functional and presentation currency

The functional currency of each of the entities in the group is measured using the

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currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transaction and balances

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 at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.

Exchange differences arising on the translation of monetary items are recognised in the statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange difference arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the profit or loss.

Translation

The financial results and position of foreign operations whose functional currency is different from the presentation currency are translated as follows:

Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.
Income and expenses are translated at average exchange rates for the period.
Retained profits are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the foreign currency reserve in the statement of financial position. These differences are recognised in the profit or loss in the period in which the operation is disposed.

3.6 Government grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is

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that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

3.7 Taxation

3.7.1 Current Tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

3.7.2 Deferred Tax

Deferred income tax is recognised on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial statements purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a

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transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

3.7.3 Research and development tax incentive refund

Refund amounts received or receivable under the Federal Government’s Research and Development Tax Incentive are recognised on an accruals basis. The refund is recognised in income tax benefit in the profit or loss.

3.7.4 Goods and Services tax

Revenues, expenses and assets are recognised net of the amount of GST except:

when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.

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The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

3.8 Plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated on a reducing-balance basis over the estimated useful life of the assets as follows:

Plant and equipment – over 5 to 10 years
Leasehold improvements – 10 years

The assets‘ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

The gain or loss arising on the disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

3.9 Intangibles

3.9.1 Intangible assets acquired separately

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is charged against profit or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with;

finite lives are amortised over the useful life and assessed for impairment

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whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

3.9.2 Internally generated intangible assets - research and development

Research costs are expensed when incurred. Any costs that cannot be reliably split between research and development are also expensed when incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related project.

The carrying value of an intangible asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use, or more frequently when an indication of impairment arises during the reporting period.

3.10 Impairment of tangible and Intangible assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in

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use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset‘s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of amortisation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at the revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the amortisation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

3.11 Financial Instruments

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

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3.11.1 Financial assets

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-forsale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

No financial assets held are classified as financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments or ‘available-for-sale’ (AFS) financial assets.

3.11.1.1 Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short- term receivables when the recognition of interest would be immaterial.

3.11.1.2 Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

3.11.1.3 Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

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On derecognition of a financial asset in its entirety, the difference between the asset‘s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.

3.11.2 Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

There are no financial liabilities classified as ‘at FVTPL‘

3.11.2.1 Other financial liabilities

Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

3.11.2.2 Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

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3.12 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

3.13 Employee benefits

Wages, salaries and annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave 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. They are measured at the amounts expected to be paid when the liabilities are settled.

Contributions to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

Long service leave

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

3.14 Share-based payments

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

When provided, the cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Binomial option pricing model.

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In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of MGM Wireless Limited (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market conditions being met as the effect of these conditions is included in the determination of fair value at grant date (if applicable). The charge or credit to the profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

3.15 Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

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3.16 Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty

In the application of the Group’s accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated judgments are based on historical experience and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group. 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.

4.1 Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations (see 4.2 below), that the Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.

4.1.1 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will

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flow to the Company and the revenue can be reliably measured.

Specifically, revenue recognition is subject to the following;

Events being met, and
Revenue timings

Events:

Sale of product/services

Control of the goods (at the signing of the legally enforceable contract) has passed to the buyer.

Interest

Control of a right to receive consideration for the provision of, or investment in, assets has been attained.

Revenue timings:

Sale of product/services

Revenue from the sale of the Groups products/services is recognised in two components;

Component 1: the majority of revenue is brought to account at the start of the contract in line with the majority of expenses being incurred at that time and the revenue being non-refundable.

Component 2: the balance of revenue is held as a Deferred revenue liability and recognised over the life of the contract as expenses for delivery of the services are incurred.

Interest

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

Research and development tax incentive refund

4.1.2 Research and development

Any costs that cannot be reliable split between research and development are also expensed when incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate

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future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development.

4.2 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

4.2.1 Recoverability of internally generated intangible asset

During the year, the Directors reconsidered the recoverability of the Group’s internally generated intangible asset arising from its technological development, which is included in the consolidated statement of financial position at 30 June 2016 at $2.63M (30 June 2015: $2.01M).

4.3 Key Estimates – Impairment

The group assess impairment at each reporting date by evaluating conditions specific to the group that may to lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.

No impairment has been recognised in respect of intangible assets, as the value-inuse calculation is greater than the carrying value of the assets. Should the projected turnover figures be materially outside of budgeted figures incorporated in value-in-use calculations, an impairment loss could be recognised up to the maximum carrying value of intangibles at 30 June 2016 amounting to $2,626,645.

Provision for impairment of receivables

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, the ageing of receivables, historical collection rates and specific

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knowledge of the individual debtors financial position.

A provision for doubtful debts of $72,048 (2015: $169,587) has been recognised for the year ended 30 June 2016.

Research and development tax incentive refund

The estimated amount recognised is based on detailed analysis of expenditure incurred. The actual amount to be claimed is finalised after completion of the current year’s financial report and preparation of the Group’s income tax return.

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5 Revenue and Expenses

	30/06/2016 30/06/2015 $ $ Group Year Ended
The following is an analysis of the Group's revenue and expenses for the year Revenue Sales revenue Expenses Rental expense relating to operating leases Defined contribution superannuation expense Share based payments expense Research costs	2,575,683 3,157,199
	99,768 98,564 124,933 121,890 88,250 93,571 415,378 625,423

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6 Income Tax

	30/06/2016 30/06/2015 $ $ Group Year Ended
6.1 Income tax expense The income tax expense for the year can be reconciled to the accounting profit or loss as follows: Profit / loss for the year Prima facie tax benefit at 30% (2015: 30%) Non-deductible items Depreciation and amortisation Other Research and development tax offset Deferred tax assets and liabilities not brought to account Deferred tax assets and liabilities brought to account Adjustments recognised in the current year in relation to the current tax of prior years Total income tax expense/(benefit) 6.2 Income tax expense recognised in the profit or loss Current tax (benefit)/expense Research and development tax offset Adjustments recognised in the current year in relation to the current tax of prior years Deferred tax	103,773 603,374 31,132 181,012 363,446 199,945 20,209 144,746 (826,634) (710,623) - (275,816) (11,101) -
	23,047 22,330
	(399,901) (438,406)
	438,679 294,547 (826,634) (710,623) (23,047) (22,330) 11,101 -
	(399,901) (438,406)

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	30/06/2016 30/06/2015 $ $ Group Year Ended
6.3 Deferred tax assets and liabilities Deferred tax assets Temporary differences Provision for doubtful debts Property, plant and equipment Prepayments Trade payables/accrued expenses Provisions for employee entitlements Deferred tax liabilities Temporary differences Property, plant and equipment Intangible Assets	34,969 - 10,831 - 67,557 - 46,296 - 82,559 -
	242,212 - (4,832) - (226,279) -
	(231,111) - 11,101 -

	30/06/2016 30/06/2015 $ $ Company Year Ended
6.4 Franking account Adjusted franking account balance	- -

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7 Earnings Per Share

7 Earnings Per Share
	30/06/2016 30/06/2015 $ $ Year Ended Group
Basic earnings per share
Total basic earnings per share (cents per share)	5.84 12.16
Diluted earnings per share Total diluted earnings per share (cents per share) 7.1 Basic earnings per share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows. Net profit / (loss) for the year attributable to owners of the Company Earnings used in the calculation of total basic earnings per share Weighted average number of ordinary shares for the
	5.64 11.96
	503,674 1,041,780
	503,674 1,041,780

purposes of basic earnings per share (all measures)	8,625,988 8,567,414

7.2 Diluted earnings per share The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows. Net profit / (loss) for the year attributable to owners of the Company Earnings used in the calculation of total diluted earnings per share Weighted average number of ordinary shares for the	503,674 1,041,780
	503,674 1,041,780

purposes of diluted earnings per share (all measures)	8,924,746 8,794,623

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8. Segment Revenues and Results

8.1 Products and services from which reportable segments derive their revenues

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of services delivered or provided. In the current and previous financial years, the Group has only operated in one business sector and reporting to management has been on a geographical basis.

The Group operates predominately in one business segment being the provision of school messaging services and internet related services. The Group functions with a subsidiary operating in each business segment. Each Company represents a strategic business unit that offers different risks and rates of returns. This is the basis by which management controls and reviews the operations of the Group.

No operations were discontinued during the current financial year.

8.2 Segment revenues and results

The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment:

	30/06/2016 30/06/2015 Segment revenue Year Ended	30/06/2016 30/06/2015 Segment profit Year Ended
MGM Wireless Holdings MGM Wireless USA Message YOU LLC NZ MGM Wireless (NZ) Pty Ltd Total for Continuing Operation	2,557,052 3,106,532 - - - - 18,632 50,667	550,676 1,026,414 - - - (5,836) (47,002) 21,202
	2,575,684 3,157,199
Profit after tax (continuing operations)
		503,674 1,041,780

Segment revenue reported above represents revenue generated from external customers by each subsidiary. There were no inter-segment sales in the current year (2015: nil).

The accounting policies of the reportable segments are the same as the Group‘s accounting policies described in note 3. The segment result for NZ and the USA represents the profit earned by each segment without allocation of central administration costs and Directors‘ salaries, investment revenue, finance costs and income tax expense. These costs are routinely considered to be part of the Australian operations. This is the basis on which

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segment results are routinely reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

8.3 Segment assets and liabilities

	30/06/2016 30/06/2015 Assets Year Ended	30/06/2016 30/06/2015 Liabilities Year Ended
MGM Wireless Holdings MGM Wireless USA Message YOU LLC NZ MGM Wireless (NZ) Pty Ltd Consolidated Assets	5,768,670 5,028,404 - - - - 83,506 121,595	987,165 853,499 - - 84,162 81,639 129,617 121,584
	5,852,176 5,149,999
Consolidated Liabilities
		1,200,944 1,056,722

Each segment‘s assets and liabilities are accounted for within their own entity. Other assets and liabilities are retained within the Australian entity. General intellectual property is retained by the parent Company.

8.4 Other segment information

	30/06/2016 30/06/2015 Depreciation and amortisation Year Ended	30/06/2016 30/06/2015 Additions to non-current assets Year Ended
MGM Wireless Holdings MGM Wireless USA Message YOU LLC NZ MGM Wireless (NZ) Pty Ltd Depreciation and Amortisation	1,211,485 666,483 - - - - - -	1,810,388 1,093,932 - - - - -
	1,211,485 666,483
Additions to Non-Current Assets
		1,810,388 1,093,932

8.5 Geographical Information

All revenues in New Zealand result from the Group‘s preferred supplier status (1 of 3 companies) to New Zealand Government‘s Early Notification initiative whereby the Government funded the first year‘s license fees for all eligible schools.

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8.6 Information about major customers

No single customer contributed 10% or more to the Group’s revenue for both 2016 and 2015.

9. Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows:

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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Group
Year Ended
30/06/2016 30/06/2015
$ $
9.1 Cash & cash equivalents
Cash and bank balances 1,405,660 1,526,754
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	30/06/2016 30/06/2015 $ $ Group Year Ended
9.2 Reconciliation of profit for the year to net cash flows from operating activities Profit for the year Adjustments for: Depreciation and amortisation Doubtful debts expense Options issue costs Movements in working capital Decrease/(increase) in trade and other receivables Decrease/(increase) in prepayments Decrease/(increase) in deferred tax assets (Decrease)/increase in trade payables (Decrease)/increase in provisions (Decrease)/increase in tax liability Cash flows from operating activities	503,674 1,041,780 1,211,485 666,483 - 150,000 88,250 93,571 (6,690) (251,831) (209,762) (62,328) (11,101) - 470,155 (36,152) (21,081) 31,311 (243,125) (34,272)
	1,781,805 1,598,562

30/06/2016
30/06/2015
$
$
Group
Year Ended

9.2 Reconciliation of profit for the year to net cash flows from operating
activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Doubtful debts expense
Options issue costs
Movements in working capital
Decrease/(increase) in trade and other receivables
Decrease/(increase) in prepayments
Decrease/(increase) in deferred tax assets
(Decrease)/increase in trade payables
(Decrease)/increase in provisions
(Decrease)/increase in tax liability
Cash flows from operating activities

503,674
1,041,780
1,211,485
666,483
-
150,000
88,250
93,571
(6,690)
(251,831)
(209,762)
(62,328)
(11,101)
-
470,155
(36,152)
(21,081)
31,311
(243,125)
(34,272)

1,781,805
1,598,562

10. Trade and Other Receivables

10. Trade and Other Receivables
	30/06/2016 30/06/2015 $ $ Group Year Ended
10.1 Trade and other receivables Trade receivables Provision for doubtful debts	866,330 957,179 (72,048) (169,587)
	794,282 787,592

Trade and other receivables have been reviewed and a provision for doubtful debts of $72,048 (2015: $169,587) established. No further impairment loss is considered necessary.

Terms and conditions relating to the above financial instruments:

Trade receivables are non-interest bearing and generally repayable in the range within 30-180 days.
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

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	30/06/2016 30/06/2015 Group Year Ended
	$ $
10.2 Past due but not impaired trade receivables Past due 0-30 days Past due 31-60 days Past due 61 - 90 days Past due over 91 days	24,919 18,428 37,886 39,519 59,110 36,936 611,343 553,215
	733,258 648,098

As at 30 June 2016, trade receivables of $733,259 (2015: $648,098) were past due but not impaired. These relate to accounts where there is no recent history of default.

Movement in the provision for doubtful debts	30/06/2016 30/06/2015 $ $ Group Year Ended
Balance at the beginning of the year Amounts recovered during the year (Increase)/Decrease in provision attributable to new sales Balance at the end of the year	(169,587) (19,587) - - 97,539 (150,000)
	(72,048) (169,587)

11. Other Current Assets

	30/06/2016 30/06/2015 $ $ Year Ended Group
R&D tax incentive Prepayments	826,633 623,301 19,394 12,963
	846,027 636,264

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12. Interest in Subsidiaries

Date of Country of Class of Unlisted Controlled Entity Acquisition Incorporation Shares	Cost of Cost of Parent Parent Entity's Entity's Investment Investment 30/06/2016 30/06/2015 $ $
MGM Wireless Holdings Pty Ltd 8/10/2003 Australia Ordinary Message You LLC 11/09/2006 USA Ordinary MGM Wireless (NZ) Pty Ltd 18/05/2010 Australia Ordinary	767,000 767,000 124,440 124,440 80 80
	891,520 891,520

The equity holding in all companies is 100%. These investments have been elimintated on consolidation.

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13. Plant, Equipment and Leasehold Improvements

	Plant and Leasehold Equipment Improvements Total $ $ $
Cost Balance at 30 June 2014 Additions Transfer to Intangible Assets Balance at 30 June 2015 Additions Balance at 30 June 2016 Accumulated depreciation and impairment Balance at 30 June 2014 Transfer to Intangible Assets Amortisation/Depreciation expense Balance at 30 June 2015 Transfer to Intangible Assets Depreciation expense Balance at 30 June 2016 Written Down Value	437,006 182,607 619,613 24,571 - 24,571 (151,543) - (151,543)
	310,034 182,607 492,641
	11,076 - 11,076
	321,110 182,607 503,717
	(346,904) (71,224) (418,128) 136,828 - 136,828 (16,988) (11,138) (28,127)
	(227,064) (82,362) (309,427)
	- - - (15,780) (10,049) (25,829)
	(242,844) (92,411) (335,256)
	78,266 90,196 168,461

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14. Intangible Assets

	30/06/2016 30/06/2015 $ $ Group Year Ended
At cost Accumulated amortisation and impairment	6,225,309 4,425,997 (3,598,664) (2,409,821)

Carrying Value	2,626,645 2,016,176

Cost	Capitalised Distribution Development Rights Costs Total $ $ $
Balance at 30 June 2014 441,017 2,764,076 3,205,093 Additions from internal developments - 1,069,361 1,069,361 Transfer from Plant & Equipment - 151,543 151,543 Disposals - - - Balance at 30 June 2015 441,017 3,984,980 4,425,997 Additions from internal developments - 1,799,312 1,799,312 Disposals - - - Balance at 30 June 2016 441,017 5,784,292 6,225,309 Accumulated amortisation and impairment Balance at 30 June 2014 (44,102) (1,590,535) (1,634,637) Amortisation (44,102) (594,254) (638,356) Transfer from Plant & Equipment - (136,828) (136,828) Balance at 30 June 2015 (88,204) (2,321,617) (2,409,821) Amortisation (44,101) (1,144,742) (1,188,843) Balance at 30 June 2016 (132,305) (3,466,359) (3,598,664)	441,017 2,764,076 3,205,093 - 1,069,361 1,069,361 - 151,543 151,543 - - -
	441,017 3,984,980 4,425,997
	- 1,799,312 1,799,312 - - -
	441,017 5,784,292 6,225,309
	(88,204) (2,321,617) (2,409,821)
	(44,101) (1,144,742) (1,188,843)
	(132,305) (3,466,359) (3,598,664)

Carrying Value	308,712 2,317,933 2,626,645

The remaining useful life of ‘Distribution Rights‘ has been considered to be 10 years. Due to the nature of the projects developed in the current period, Capitalised Research and Development has been amortised over a useful life of 3 years.

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Distribution rights have arisen from the acquisition of territory rights from former distributors. These assets have provided the Company the right to operate in the respective territories. The income from those territories; Western Australia, South Australia, Queensland, Victoria and Tasmania is the major part of MGM Wireless‘s income.

15. Trade and Other Payables

	30/06/2016 30/06/2015 $ $ Group Year Ended
Trade payables Indirect tax liability Accrued SMS charges Rent Incentive	220,685 233,884 106,286 182,710 96,817 78,713 - 13,466
	423,788 508,773

Terms and conditions relating to the above financial instruments:

Trade creditors and accrued charges are non-interest bearing and normally settled on terms between 30-180 days.
Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.

16. Borrowings

	30/06/2016 30/06/2015 $ $ Group Year Ended
Non - Current Non secured loans from related parties	115,000 150,000

Terms and conditions of the loans from related parties are detailed in Note 24. Secured loans other - equipment under chattel mortgage.

The Directors have agreed not to invoke the security clause attached to their loans until revised loan agreements have been subject to shareholder approval.

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17. Provisions

	30/06/2016 30/06/2015 Group Year Ended
	$ $
Current Employee benefits	242,692 221,611

The provision for employee benefits represents annual leave and long service leave entitlements accrued.

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18. Issued capital

	30/06/2016 30/06/2015 $ $ Year Ended Group
18.1 Issued and paid up capital Ordinary shares, fully paid	7,454,029 7,376,993
(30 June 2016: 8,664,960, 30 June 2015: 8,567,414)
18.2 Fully paid ordinary shares	Number of Share shares capital $ Group
Balance as at 30 June 2014 Shares issued to Directors Balance as at 30 June 2015 Shares issued to Directors Balance as at 30 June 2016	8,567,414 7,376,993 - -
	8,567,414 7,376,993 97,546 77,036
	8,664,960 7,454,029

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holders to one vote, either in person or by proxy, at a meeting of the Group.

18.3 Share options

18.3 Share options
Expiry Date Exercise Price 30/04/2017 $1.60 each 23/08/2018 $1.10 each 30/04/2018 $1.25 each 30/04/2020 $1.40 each	Number Expired New Closing 310,000 - - 310,000 30,000 - - 30,000 230,000 - - 230,000 - - 240,000 240,000
	570,000 - 240,000 810,000

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19. Reserves

	30/06/2016 30/06/2015 $ $ Group Year Ended
Option issue reserve Foreign currency translation reserve	483,583 395,333 (19,708) 1,134
	463,875 396,467

	Option Issue Foreign Currency Reserve Translation Reserve
Balance as at 30 June 2014 Options issued Options exercised Currency translation differences Balance as at 30 June 2015 Options issued Options exercised Currency translation differences Balance as at 30 June 2016	301,762 5,973 93,571 - - - - (4,839)
	395,333 1,134 88,250 - - - - (20,842)
	483,583 (19,708)

Nature and purpose of reserve

The option issue reserve is used to accumulate amounts received on the issue of options and records items recognised as expenses on valuation of incentive based share options.

The foreign currency translation reserve is used to record exchange rate differences arising from the translation of the financial statements of foreign subsidiaries and are recognised directly in the total comprehensive Income for the year.

20. Dividends

On 31 August 2016, a dividend of $0.013 per share was declared in respect of the 2016 financial year.

Due to the R&D tax incentives taken up by the group, dividends paid during the 2014 to 2016 financial years were unfranked. It is anticipated that as long as the Group is entitled to the R&D tax incentive future dividends will also be unfranked.

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21. Capital risk management

21.1 Capital risk management

Management controls the capital of the Group in order to maximise the return to shareholders and ensure that the group can fund its operations and continue as a going concern.

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 expenditure and debt levels and share and option issues.

There have been no changes in the strategy adopted by management to control capital of the group since the prior year

21.2 Gearing ratio

The gearing ratio at end of the period was as follows.	30/06/2016 30/06/2015 $ $ Group Year Ended
Net Debt Equity Net debt to equity ratio	115,000 150,000
	115,000 150,000
	4,651,232 4,093,277
	2.5% 3.7%

Total debt of $115,000 (2015: $150,000) relates to non-secured loans from Directors that are repayable in accordance with the terms and conditions as set out in note 24.5.

22. Financial instruments

22.1 Financial risk management

The Company’s principal financial instruments comprise receivables, payables, borrowings, cash and short-term deposits. The Company manages its exposure to key financial risks in accordance with the Company’s financial risk management policy. The objective of the policy is to support the delivery of the Company’s financial targets while protecting future financial security.

The main risks arising from the Company’s financial instruments are interest rate risk,

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credit risk, liquidity risk and foreign currency risk. The Group does not speculate in the trading of derivative instruments. The Company uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rates and assessments of market forecasts for interest rates. Ageing analysis of and monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts.

The Board reviews and agrees policies for managing each of these risks as summarised below.

Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below, including for interest rate risk, credit allowances and cash flow forecast projections.

Interest rate risk

The Company’s exposure to risks of changes in market interest rates relates primarily to the Company’s cash balances. The Company constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing positions and the mix of fixed and variable interest rates.

Its exposure to interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits. The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date.

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At balance date, the Group had the following financial assets exposed to variable interest rates that are not designated in cash flow hedges:

	30/06/2016 30/06/2015 $ $ Group Year Ended
Cash and cash equivalents (interest-bearing accounts) Net exposure	1,405,660 1,526,754
	1,405,660 1,526,754

The sensitivity analysis has been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the table below illustrates the effect on post tax profit and equity of the change in cost relevant to the financial assets of the Group:

		Group	Group
		Year Ended
		30/06/2016	30/06/2015
Post tax profit - higher/ (lower)		$	$
	0.50%	575	750
	-0.50%	-575	-750
Equity – higher / (lower)
	0.50%	575	750
	-0.50%	-575	-750

Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Group’s short- medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by;

 monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained,

 continuously monitoring forecast and actual cash flows, and

 matching the maturity profiles of financial assets and liabilities based on

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management’s expectations.

The risk implied from the values shown in the table below reflects a balanced view of cash inflows and outflows within the 2016 financial period.

Financial assets	30/06/2016 30/06/2015 $ $ Year Ended Group
Cash & cash equivalents Trade and other receivables Financial liabilities Trade & other payables Borrowings Direct Tax liability Net Maturity	1,405,660 1,526,754 794,282 787,592
	2,199,942 2,314,347
	220,686 233,884 115,000 150,000 106,286 182,710
	441,972 566,594
	1,757,970 1,747,753

The maturity date for all financial assets and financuial liabilities is less than 12 months in duration.

Credit risk

Credit risk arises from the financial assets of the Company, which comprise deposits with banks and trade and other receivables. The Company’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of these instruments. The carrying amount of financial assets included in the Statement of Financial Position represents the Company’s maximum exposure to credit risk in relation to those assets.

The Company does not hold any credit derivatives to offset its credit exposure.

The Company trades only with recognised, credit worthy third parties and as such collateral is not requested nor is it the Company’s policy to securitise it trade and other receivables.

Receivable balances are monitored on an ongoing basis with the result that the Company does not have a significant exposure to bad debts. Trade and other receivables are expected to have a maturity of less than 12 months, for both year-ends.

There are no significant concentrations of credit risk within the Company.

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Foreign currency risk

As a result of operations in the USA, being denominated in USD, and operations in New Zealand being denominated in NZD the Group’s balance sheet can be affected by movements in the respective AUD exchange rates. The Company does not hedge this exposure.

In the reporting period the Groups volume of transactions in both USD and NZ currency was low and immaterial for the year ended 30 June 2016.

The Group manages its foreign exchange risk by constantly reviewing its exposure to commitments payable in foreign currency and ensuring appropriate cash balances are maintained in USD and NZD, to meet current operational commitments.

Management believes the balance date risk exposures are representative of the risk exposure inherent in financial instruments.

Fair value

The methods of estimating fair value are outlined in the relevant notes to the financial statements. All financial assets and liabilities recognised in the Statement of financial position, whether they are carried at cost or fair value, are recognised at amounts that represent a reasonable approximation of fair values unless otherwise stated in the applicable notes.

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23. Share-based payments

23.1 Employee share option plan

The Group has an ownership-based compensation plan for executives and senior employees. In accordance with the terms of the plan executives and senior employees may be granted options to purchase ordinary shares. Each share option converts into one ordinary share of MGM Wireless Ltd on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of their vesting to the date of their expiry.

The weighted average share price during the year was $1.1390 (2015: $1.2514)

The average remaining contractual life of options outstanding at the end of the financial year was 2.17 years (2015: 2.13).

For the options granted during the current financial year, the valuation model inputs used to determine the fair value as at grant date were as follows:

Grant Date	Expiry Date	Share price at grant date	Exercise price	Expected volatility	Dividend yield	Risk free interest rate	Fair value at grant date
7/12/2015	30/04/2020	$1.25	$1.40	48.30%	0.00%	2.33%	$0.37

During the financial year, the following share based payament arrangements were in existence:

Name	Grant Date	Expiry Date	Grant Date Fair Value	Vesting Date
Mark Fortunatow	7/11/2013	30/04/2017	$0.32	Vests atdate ofgrant
Mark Fortunatow	17/12/2014	30/04/2018	$0.40	Vests at date ofgrant
Mark Fortunatow	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant
Mark Hurd	7/11/2013	30/04/2017	$0.32	Vests at date ofgrant
Mark Hurd	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant
TaraLewis-Christie	4/09/2013	27/08/2018	$0.41	Vests atdate ofgrant
Tara Lewis-Christie	17/12/2014	30/04/2018	$0.40	Vests at date ofgrant
TaraLewis-Christie	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant
Lelia Henderson	17/12/2014	30/04/2018	$0.40	Vests at date ofgrant
LeliaHenderson	7/12/2015	30/04/2020	$0.37	Vests atdate ofgrant

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The following table outlines the share options on issue during the reporting periods presented:

Name	Balance at 1 July	Granted as compensation	Reduction due to exercise of options	Weighted average exercise price	Net other change	Balance at 30 June	Balance not yet vested or exercisable
2016	No.	No.	No.	($)	No.	No.	No.
Mark Fortunatow	400,000	170,000	(30,000)	0.70		540,000	540,000
Mark Hurd	130,000	50,000	(50,000)	0.70	-	130,000	130,000
Tara Lewis-Christie	80,000	10,000	-	-	-	90,000	90,000
Leila Henderson	10,000	10,000	-	-	-	20,000	20,000

Name	Balance at 1 July	Granted as compensation	Reduction due to exercise of options	Weighted average exercise price	Net other change	Balance at 30 June	Balance not yet vested or exercisable
2015	No.	No.	No.	($)	No.	No.	No.
Mark Fortunatow	230,000	170,000	-	-	-	400,000	400,000
Mark Hurd	130,000	-	-	-	-	130,000	130,000
Tara Lewis-Christie	30,000	50,000	-	-	-	80,000	80,000
Leila Henderson	-	10,000	-	-	-	10,000	10,000

23.2 Fair Value of share options granted during year

240,000 share options were granted during the year (2015: 230,000). In total, $88,250 (2015: $93,571) of employee remuneration expense (all of which related to equitysettled share-based payment transactions) has been included in profit or loss and credited to share option reserve.

24. Related party transactions

24.1 Subsidiaries

The consolidated financial statements include the financial statements of MGM Wireless Ltd and the subsidiaries that are listed in the table in Note 12.

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 12.

24.2 Parent entity disclosure

MGM Wireless Ltd is the ultimate Australian parent entity and the ultimate parent of the Group.

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The following is financial information about the parent entity required by Regulation 2M.3.01 of the Corporations Act 2001.

Financial position	30/06/2016 30/06/2015 $ $
Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Retained earnings Total equity	- - 4,260,476 4,093,277
	4,260,476 4,093,277
	- - - -
	- -
	4,260,476 4,093,277
	7,454,029 7,376,993 (3,193,553) (3,283,716)
	4,260,476 4,093,277

Financial performance	Year Ended 30/06/2016 Year Ended 30/06/2015 $ $
Profit for the year Other comprehensive income Total comprehensive income	- - - - - -

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries. There are no guaruntees entered into in relation to debt for any subsidiaries.

24.3 Key management personnel

Disclosures relating to key management personnel are set out in Note 25.

24.4 Other equity interests

There are no equity interests in associates, joint ventures or other related parties.

24.5 Transactions with related parties

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loans was $11,442, (2015: $15,174). Total borrowings from Directors at 30 June 2016 was $115,000.

The interest rate is equivalent to:

the daily rate of interest applied by the National Australia Bank Limited on overdrafts of at least $150,000; and, if there is no such interest rate, then,
the daily rate of interest applied by the National Australia Bank Limited on secured commercial loans of at least $150,000 where a variable rate of interest applies to the said loan and, if there is more than one such rate, then the highest of those rates shall apply.

All of the property offered by the borrower and accepted by the lender as security for the advance is comprised of the assets of the borrower by way of registered charge granted to the lenders.

There are no other related party loans.

During the 2016 financial year an amount of $10,551 was paid to Newsgallery for PR advisory services (2015: $Nil). Newsgallery is a related entity of Leila Henderson.

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25. Director and executive disclosures

25.1 Compensation of key management personnel

The aggregate compensation made to Directors and other members of key management personnel of the Company and the Group is set out below:

	30/06/2016 30/06/2015 $ $ Group Year Ended
Short-term Post Employment Other Long-Term Termination Benefits Share-based payment	649,872 552,766 59,369 49,003 - - - - 88,250 92,890
	797,491 694,659

25.2 Loans with key management personnel

There were no loans to key management personnel or their related entities during the current or previous financial year.

See Note 24.5

The terms and conditions of the transactions with Directors and Director-related entities were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm’s length basis.

The Directors have agreed not to invoke the security clause attached to their loans until revised loan agreements have been subject to shareholder approval.

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26. Commitments

Lease commitments

Operating leases relate to the office premises in Rose Park with lease terms of 2 years for both tenancies. All operating lease contracts contain annual market rental reviews. The Group does not have an option to purchase the leased offices at the end of the lease.

	30/06/2016 30/06/2015 $ $ Group Year Ended
Payments recognised as an expense Payments due under operating leases:	99,768 95,564

Not later than one year Later than one year and not later than 5 years	89,742 83,951 53,254 132,923
	142,996 216,874

27. Remuneration of auditors

Audit and review of financial statements of Group by:	30/06/2016 30/06/2015 $ $ Group Year Ended
- Grant Thornton	23,750 25,000
	23,750 25,000

No other services have been provided by the auditor in the 2016 financial year.

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28. Company details

The registered office and principal place of business of the Company is:

Suite 13 The Parks 154 Fullarton Road Rose Park SA 5067

29. Subsequent Events

On 31 August 2016, a dividend of $0.013 per share was declared in respect of the 2016 financial year.

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Additional Stock Exchange Information as at 26 August 2016

Ordinary share capital

Additional Stock Exchange Information as at 26 August 2016 Ordinary share capital
Number of holders Distribution of listed shareholders / option holders 1-1000 1001-5000 5001-10000 10001-100000 100001 and over Total number of holders Total on issue Holding less than a marketable parcel	Ordinary Shares 315 308 109 114 16
	862
	8,664,960 256

All issued ordinary shares carry one vote per share. Each member present in person, or by proxy, representative or attorney, has one vote on a show of hands and one vote per share on a poll for each share held. Each member is entitled to notice of, and to attend and vote at, general meetings. Options do not carry a right to vote.

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Additional Stock Exchange Information as at 26 August 2016

Substantial shareholders	Number	% of units
MRS PAULA FORTUNATOW	605,113	6.98
Twenty largest shareholders
MRS PAULA FORTUNATOW	605,113	6.98
MARK EDWIN HURD	420,098	4.85
YAVERN CREEK HOLDINGS PTY LTD	236,229	2.73
MRS PAULA FORTUNATOW	235,001	2.71
M/S PAULA FORTUNATOW	234,762	2.71
HEGM NOMINEES PTY LTD	223,154	2.58
MR MARK HURD	206,430	2.38
MR MARK FORTUNATOW + MRS PAULA FORTUNATOW FAMILY S/F A/C>	178,660	2.06
RYANU SERVICES PTY LTD	168,095	1.94
BRINDLE HOLDINGS PTY LTD	167,589	1.93
FGDG SUPER PTY LTD	160,000	1.85
DR PRIYA AMARA SELVA-NAYAGAM + DR CRAIG LLOYD JAMES	145,584	1.68
KINGSTON PROPERTIES PTY LIMITED ACCOUNT>	140,000	1.62
LOCOPE PTY LTD	115,000	1.33
CUSTODIAL SERVICES LIMITED	100,932	1.16
MR PETER PAIGE	100,470	1.16
MR JINKIN SOO	100,000	1.15
EVCORP AUSTRALIA PTY LTD	85,000	0.98
MR STEVEN RODNEY JAMES SHEARMAN	78,263	0.90
HV ROSS PTY LTD	75,000	0.87
	3,775,380	43.57
	4,889,580	56.43

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Unlisted options

Additional Stock Exchange Information as at 26 August 2016

Unlisted options
Expiry date	30/04/2017	30/04/2018	30/04/2020	28/08/2018
Exercise price	$1.60	$1.25	$1.40	$1.10
Total Options Issued	310,000	230,000	240,000	30,000
Number of holders	3	3	4	1
Holders with more than 20%
- Mark Fortunatow	200,000	170,000	170,000	-
- Tara Lewis-Christie	-	50,000	50,000	30,000
- Mark Hurd	80,000	-	-	-
- Leila Henderson	-	-	-	-

Restricted securities

There are no restricted securities.

On-market buy-back

Currently there is no on-market buyback of the Company‘s securities.

Company Secretary

Mr Justin Nelson

Registered Office and Principal Administration Office

Suite 13 The Parks 154 Fullarton Avenue Rose Park SA 5067 Telephone (08) 8104 9555

Share Registry

Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street Adelaide SA 5000 Ph 1300 556 161 (08) 9415 4000 F 1300 534 087

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MGM Wireless Ltd.

AI assistant

SPACETALK LTD — Annual Report 2016

65842_rns_2016-09-29_79c454de-fb65-4101-bcb5-722707188f83.pdf

ASX Release MGM Wireless Ltd Friday 30 September 2016

2016 Annual Report:

Reclassification of research and development tax incentive refund

2016 Annual Report MGM Wireless Ltd.

2016 ANNUAL REPORT

ABOUT MGM WIRELESS LTD

Over 1,250 Schools and Childcare Centres in Australia and New Zealand use MGM Wireless software in their day to day operations.

ANNUAL REPORT INDEX

CHAIRMAN’S REPORT

Financial Results

Cash and balance sheet

Dividend

MGM SchoolStar

SMS message traffic trends

Wearables

Business operations and development

Concluding comments

COMPANY BACKGROUND

CORPORATE DIRECTORY

Stock Exchange

ASX Code: MWR ordinary fully paid shares

DIRECTORS’ REPORT

DIRECTORS

MARK FORTUNATOW

MARK EDWIN HURD

TARA RACQUEL LEWIS-CHRISTIE

LEILA HENDERSON

Information On Directors

EXECUTIVE CHAIRMAN

EXECUTIVE DIRECTOR

LEILA HENDERSON

COMPANY SECRETARY

Directors‘ Interests In Shares And Options

Remuneration of directors and key management personnel

CORPORATE INFORMATION - CORPORATE STRUCTURE

Nature of Operations and Principal Activities

Operating Results

Review of Operations

Statement of Financial Position

Significant Changes in the State of Affairs

Correction of a prior period error

Events Subsequent to the End of the Financial Year

Likely Developments

Dividends

Shares Under Option or Issued on Exercise of Options

Meetings of Directors

Corporate Governance Practices

Officers or Auditors‘ Indemnity and Insurance

Environmental Regulation

Legal Proceedings

Auditor

Auditor’s Declaration of Independence

Remuneration Report (Audited)

Remuneration Committee

A. Remuneration Policy

B. Remuneration Structure

Non-executive Director Compensation

Objective

Structure

Executive Compensation

Objective

Structure

Fixed Remuneration

Variable Pay — Long Term Incentives

C. Employment contracts of Directors and senior executives

D. Details of remuneration for year

Directors

Executives

E. The relationship between the remuneration policy and Company performance

Remuneration

End of Remuneration Report (Audited).

Directors‘ Declaration

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF MGM WIRELESS LTD

Report on the financial report

Directors’ responsibility for the financial report

Auditor’s responsibility

SPACETALK LTD Annual Report 2016