UNITED STATES



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 20-F



| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
        THE SECURITIES
        EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------------------------



OR



|þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------
|  |                                                                                     
|  | For the fiscal year ended June 30, 2014______________________________               



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------
|  |                                                                                            
|  | for the transition period from __________ to ___________                                   



Commission file number 001-36488



MOKO Social Media Limited








(Exact name of the Registrant as specified
in its charter)



Australia






(Jurisdiction of incorporation or organization)



320 King Street

Alexandria, VA 22314






(Address of principal executive offices)



Securities registered or to be registered
pursuant to Section 12(b) of the Act:



Title of Each Class



American Depositary Shares

Ordinary Shares*



Name of each exchange on which registered



The NASDAQ Stock Market LLC

The NASDAQ Stock Market
LLC*



* Not for trading, but only in connection
with the listing of the American Depositary Shares on The NASDAQ Stock Market LLC



Securities registered or to be registered
pursuant to Section 12(g) of the Act:



None



Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act: None



On June 30, 2014, the registrant had 552,853,091 ordinary shares
outstanding. As of October 30, 2014, the number of outstanding ordinary shares was 600,557,003.



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.



| |  ̈Yes | xNo
| | ---- | ---



If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.



| |  ̈Yes | xNo
| | ---- | ---



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.



| | xYes |  ̈No
| | ---- | ---



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer.



| ̈Large Accelerated filer |  ̈Accelerated filer | xNon-accelerated filer
|------------------------ | ------------------ | ----------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



| ̈US GAAP | xInternational Financial ReportingStandards as issued by the InternationalAccounting Standards Board | oOther
|-------- | ---------------------------------------------------------------------------------------------------- | ------



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow.



| |  ̈Item 17 |  ̈Item 18
| | -------- | --------



If this is an annual report, indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



| |  ̈Yes | xNo
| | ---- | ---



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of the securities under a plan confirmed by a court.



| |  ̈Yes |  ̈No
| | ---- | ---
















TABLE OF CONTENTS



|         |  |                                                         |  | Page
|-------- |  | ------------------------------------------------------- |  | ----
|         |  | PART I                                                  |  |     
|Item 1.  |  | Identity Of Directors, Senior Management And Advisers   |  | 1   
|         |  |                                                         |  |     
|Item 2.  |  | Offer Statistics and Expected Timetable                 |  | 1   
|         |  |                                                         |  |     
|Item 3.  |  | Key Information                                         |  | 1   
|A.       |  | Selected financial data                                 |  | 1   
|B.       |  | Capitalization and indebtedness                         |  | 3   
|C.       |  | Reasons for the offer and use of proceeds               |  | 3   
|D.       |  | Risk factors                                            |  | 3   
|         |  |                                                         |  |     
|Item 4.  |  | Information On The Company                              |  | 15  
|A.       |  | History and Development of The Company                  |  | 15  
|B.       |  | Business overview                                       |  | 16  
|C.       |  | Organizational structure                                |  | 26  
|D.       |  | Property, plants and equipment                          |  | 26  
|         |  |                                                         |  |     
|Item 4A. |  | Unresolved Staff Comments                               |  | 27  
|         |  |                                                         |  |     
|Item 5.  |  | Operating and Financial Review and Prospects            |  | 27  
|         |  |                                                         |  |     
|Item 6.  |  | Directors, Senior Management And Employees              |  | 44  
|A.       |  | Directors and senior management                         |  | 44  
|B.       |  | Compensation                                            |  | 45  
|C.       |  | Board practices                                         |  | 47  
|D.       |  | Employees                                               |  | 49  
|E.       |  | Share ownership                                         |  | 49  
|         |  |                                                         |  |     
|Item 7.  |  | Major Shareholders and Related Transactions             |  | 50  
|A.       |  | Major shareholders                                      |  | 50  
|B.       |  | Related party transactions                              |  | 50  
|C.       |  | Interests of experts and counsel                        |  | 51  
|         |  |                                                         |  |     
|Item 8.  |  | Financial Information                                   |  | 52  
|A.       |  | Consolidated Statements and Other Financial Information |  | 52  
|B.       |  | Significant Changes                                     |  | 52  
|         |  |                                                         |  |     
|Item 9.  |  | The Offer and Listing                                   |  | 52  
|A.       |  | Offer and listing details                               |  | 52  
|B.       |  | Plan of distribution                                    |  | 52  
|C.       |  | Markets                                                 |  | 52  
|D.       |  | Selling shareholders                                    |  | 53  
|E.       |  | Dilution                                                |  | 54  
|F.       |  | Expenses of the issue                                   |  | 54  











|Item 10. |  | Additional Information                                                       |  | 54
|-------- |  | ---------------------------------------------------------------------------- |  | --
|A.       |  | Share capital                                                                |  | 54
|B.       |  | Memorandum and articles of association                                       |  | 54
|C.       |  | Material contracts                                                           |  | 54
|D.       |  | Exchange controls                                                            |  | 54
|E.       |  | Taxation                                                                     |  | 54
|F.       |  | Dividends and paying agents                                                  |  | 62
|G.       |  | Statement by experts                                                         |  | 63
|H.       |  | Documents on display                                                         |  | 63
|I.       |  | Subsidiary Information                                                       |  | 63
|         |  |                                                                              |  |   
|Item 11. |  | Quantitative and Qualitative Disclosure About Market Risk                    |  | 64
|         |  |                                                                              |  |   
|Item 12. |  | Description of Securities Other Than Equity Securities                       |  | 64
|         |  |                                                                              |  |   
|         |  | PART II                                                                      |  |   
|         |  |                                                                              |  |   
|Item 13. |  | Defaults, Dividend Arrearages And Delinquencies                              |  | 65
|         |  |                                                                              |  |   
|Item 14. |  | Material Modifications To The Rights Of Security Holders And Use Of Proceeds |  | 65
|         |  |                                                                              |  |   
|Item 15. |  | Controls and Procedures                                                      |  | 65
|         |  |                                                                              |  |   
|Item 16  |  | [Reserved]                                                                   |  | 66
|         |  |                                                                              |  |   
|Item 16A |  | — Audit Committee Financial Expert                                           |  | 66
|         |  |                                                                              |  |   
|Item 16B |  | — Code of Ethics                                                             |  | 66
|         |  |                                                                              |  |   
|Item 16C |  | — Principal Accountant Fees and Services                                     |  | 66
|         |  |                                                                              |  |   
|Item 16D |  | — Exemption from the Listing Standards for Audit Committees                  |  | 66
|         |  |                                                                              |  |   
|Item 16E |  | —  Purchases of Equity Securities by the Issuer and Affiliated Purchasers    |  | 66
|         |  |                                                                              |  |   
|Item 16F |  | — Change in Registrant’s Certifying Accountant                               |  | 67
|         |  |                                                                              |  |   
|Item 16G |  | —  Corporate Governance                                                      |  | 67
|         |  |                                                                              |  |   
|Item 16H |  | —  Mine Safety Disclosure                                                    |  | 67
|         |  |                                                                              |  |   











|           |  | PART III             |  |   
|---------- |  | -------------------- |  | --
|           |  |                      |  |   
|Item 17    |  | Financial Statements |  | 68
|Item 18.   |  | Financial Statements |  | 68
|Item 19    |  | Exhibits             |  | 68
|           |  |                      |  |   
|Signatures |  | 69                  






Table of Contents


CERTAIN INFORMATION



As used in this Annual
Report on Form 20-F (the “Annual Report”), references to:



| | · | “we,” “MOKO,” “us,” “our,” “the Company,”
or “our company” are to MOKO Social Media Ltd, including its subsidiaries;
| | - | --------------------------------------------------------------------------------------------------------------------



| | · | “ordinary shares” are to our ordinary shares, no par value;
| | - | -----------------------------------------------------------



| | · | “ADSs” or “American Depositary Shares” are to our American Depositary Shares
each representing forty ordinary shares;
| | - | ---------------------------------------------------------------------------------------------------------------------



| | · | “ASX” are to the Australian Stock Exchange or ASX; and
| | - | ------------------------------------------------------



| | · | “NASDAQ” are to the Nasdaq Global Market.
| | - | -----------------------------------------



In this Annual Report on Form 20-F, references
to “Australia” are to the Commonwealth of Australia. References to “$,” “USD,” “dollars,”
“USD$” or “U.S. dollars” are to the legal currency of the United States and references to “A$,”
or “Australian Dollars” are to the legal currency of Australia.



Solely for the convenience of the reader,
this Annual Report on Form 20-F contains translations of certain Australian dollar amounts into U.S. dollars at specified rates.
Except as otherwise stated in this Annual Report on Form 20-F, all translations from Australian dollars to U.S. dollars are based
on the noon buying rate of A$1.00 per $0.9427 in the City of New York for cable transfers of Australian dollars, as certified for
customs purposes by the Federal Reserve Bank of New York on June 30, 2014. No representation is made that Australian dollar amounts
referred to in this Annual Report on Form 20-F could have been or could be converted into U.S. dollars at such rates or any other
rates. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding.



The audited consolidated financial statements
and notes thereto as of and for fiscal 2014 and 2013 included elsewhere in this Annual Report on Form 20-F have been prepared in
accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards
Board (“IASB”). References to a particular “fiscal year” are to our fiscal year ended June 30 of that year.
Our fiscal quarters end on September 30, December 31 and March 31. References to a year other than a “fiscal” year
are to the calendar year ended December 31.



We also refer in various places within this
Annual Report on Form 20-F to “EBITDA,” which is a non-IFRS measure and is more fully explained in the section titled
“Non-IFRS Financial Measure” in “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.” The presentation of this non-IFRS information is not meant to be considered in isolation or as a substitute
for our consolidated financial results prepared in accordance with IFRS as issued by the IASB.



FORWARD-LOOKING STATEMENTS



This Annual Report
contains many statements that are “forward-looking” and uses forward-looking terminology such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “future,” “intend,”
“may,” “ought to,” “plan,” “possible,” “potentially,” “predicts,”
“project,” “should,” “will,” “would,” negatives of such terms or other similar
statements. You should not place undue reliance on any forward-looking statement due to its inherent risk and uncertainties, both
general and specific. Although we believe the assumptions on which the forward-looking statements are based are reasonable and
within the bounds of our knowledge of our business and operations as of the date of this Annual Report, any or all of those assumptions
could prove to be inaccurate. As a result, the forward-looking statements based on those assumptions could also be incorrect. The
forward-looking statements in this Annual Report include, without limitation, statements relating to:



| | · | our goals and strategies;
| | - | -------------------------



| | · | our future business development, results of operations and financial condition;
| | - | -------------------------------------------------------------------------------



| | · | our ability to protect our intellectual property rights;
| | - | --------------------------------------------------------



| | · | projected revenues, profits, earnings and other estimated financial information;
| | - | --------------------------------------------------------------------------------



| | · | our ability to maintain strong relationships with our customers and suppliers;
| | - | ------------------------------------------------------------------------------



i


Table of Contents




| | · | our planned use of proceeds; and
| | - | --------------------------------



| | · | governmental policies regarding our industry.
| | - | ---------------------------------------------



The forward-looking
statements included in this Annual Report are subject to known and unknown risks, uncertainties and assumptions about our businesses
and business environments. These statements reflect our current views with respect to future events and are not a guarantee of
future performance. Actual results of our operations may differ materially from information contained in the forward-looking statements
as a result of risk factors, some of which are described under the headings ‘‘Risk Factors’’, ‘‘Operating
and Financial Review and Prospects,’’ ‘‘Information on our Company” and elsewhere in this Annual
Report, including, among other things:



| | · | failure of our new products to attract a sufficient number of social groups to our mobile platforms;
| | - | ----------------------------------------------------------------------------------------------------



| | · | failure of advertisers to use us to reach their target audience even if our mobile social platforms
are widely adopted by user groups;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | · | risks relating to generating almost all of our revenue from advertising;
| | - | ------------------------------------------------------------------------



| | · | our incurrence of net losses since our inception and our anticipation that we will continue to
incur net losses in the future;
| | - | ------------------------------------------------------------------------------------------------------------------------------



| | · | our ability to continue as a going concern;
| | - | -------------------------------------------



| | · | failure to maintain the resources and expertise necessary to keep up with the latest technologies
in the industries in which we operate;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | · | dependence on the continued and unimpeded access to our products and services on the Internet by
our partner’s users and advertisers;
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | · | failure to identify suitable targets, acquire them on acceptable terms or successfully integrate
them in accordance with our business strategy of making acquisitions;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reliance on computer software and hardware systems to manage our operations;
| | - | ----------------------------------------------------------------------------



| | · | our business being subject to complex and evolving laws, regulations and self-regulatory principles
and frameworks internationally;
| | - | -----------------------------------------------------------------------------------------------------------------------------------



| | · | privacy concerns relating to our products and services which could damage our reputation and deter
current and potential users and advertisers from using our products; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | our need for additional capital and whether we may be able to obtain it on acceptable terms, or
at all.
| | - | -------------------------------------------------------------------------------------------------------



These risks and uncertainties
are not exhaustive. Other sections of this Annual Report include additional factors which could adversely impact our business and
financial performance. The forward-looking statements contained in this Annual Report speak only as of the date of this Annual
Report or, if obtained from third-party studies or reports, the date of the corresponding study or report, and are expressly qualified
in their entirety by the cautionary statements in this Annual Report. Since we operate in an emerging and evolving environment
and new risk factors and uncertainties emerge from time to time, you should not rely upon forward-looking statements as predictions
of future events. Except as otherwise required by the securities laws of the United States and Australia, we undertake no obligation
to update or revise any forward-looking statements to reflect events or circumstances after the date of this Annual Report or to
reflect the occurrence of unanticipated events.



ii


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PART I



ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS



| | A. | Directors and Senior Management
| | -- | -------------------------------



Not required.



| | B. | Advisers
| | -- | --------



Not required.



| | C. | Auditors
| | -- | --------



Not required.



ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE



Not required.



ITEM 3. KEY INFORMATION



A.  Selected financial data



The following selected
financial data should be read in conjunction with Item 5 - the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and the Financial Statements and Notes thereto included elsewhere in this Annual Report.



Certain factors that
affect the comparability of the information set forth in the following table are described in the “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” and the Financial Statements and related notes thereto included
elsewhere in this Annual Report.



|                                                                                                       |  | Fiscal
    Year Ended June 30 |            
|------------------------------------------------------------------------------------------------------ |  | ----------------------------- | -----------
|                                                                                                       |  | 2014                          |            
|                                                                                                       |  | A$                            |            
|Statement of Profit or Loss Data                                                                       |  |                               |            
|Revenue from continuing operations                                                                     |  |                               | 8,228,151  
|Other income and revenue                                                                               |  |                               | 386,998    
|Fair value gain on deferred consideration                                                              |  |                               | 383,933    
|Expenses                                                                                               |  |                               | (23,649,446
|Loss before income tax expense from continuing operations                                              |  |                               | (14,650,364
|Income tax benefit                                                                                     |  |                               | 1,053,905  
|Loss after income tax benefit from continuing operations                                               |  |                               | (13,596,459
|(Loss)/profit after income tax benefit from discontinued operations                                    |  |                               | -          
|Loss after income tax for the year                                                                     |  |                               | (13,596,459
|Other comprehensive income:                                                                            |  |                               |            
|Exchange differences on translation of foreign operations                                              |  |                               | (244,676   
|Total comprehensive loss for the year                                                                  |  |                               | (13,841,135
|Total comprehensive loss for the year is attributable to:                                              |  |                               |            
|Continuing operations                                                                                  |  |                               | (13,841,135
|Discontinued operations                                                                                |  |                               | -          
|Owners of MOKO Social Media Limited                                                                    |  |                               | (13,472,361
|Loss attributable to:                                                                                  |  |                               |            
|Owners of the Company                                                                                  |  |                               | (13,472,361
|Non-controlling interests                                                                              |  |                               | (124,098   
|Total comprehensive loss attributable to:                                                              |  |                               |            
|Owners of the Company                                                                                  |  |                               | (13,717,037
|Non-controlling interests                                                                              |  |                               | (124,098   
|                                                                                                       |  |                               |            
|Earnings per share from continuing operations attributable to the owners of MOKO Social Media Limited: |  |                               |            
|Basic / Diluted EPS                                                                                    |  |                               | (2.85      



1


Table of Contents




|                                     |  | As
    of June 30 |            
|------------------------------------ |  | ----------------- | -----------
|                                     |  | 2014              |            
|                                     |  | A$                |            
|Statement of Financial Position Data |  |                   |            
|Current assets:                      |  |                   |            
|Cash and cash equivalents            |  |                   | 9,878,011  
|Trade and other receivables          |  |                   | 784,872    
|Other current assets                 |  |                   | 441,696    
|Total current assets                 |  |                   | 11,104,579 
|Non-current assets                   |  |                   |            
|Property, plant and equipment        |  |                   | 87,726     
|Intangibles                          |  |                   | 3,613,433  
|Deferred tax assets                  |  |                   | 427,719    
|Total non-current assets             |  |                   | 4,128,878  
|Total assets                         |  |                   | 15,233,457 
|                                     |  |                   |            
|Current liabilities                  |  |                   |            
|Deferred consideration               |  |                   | -          
|Trade and other payables             |  |                   | 2,563,611  
|Borrowings                           |  |                   | -          
|Employee benefits                    |  |                   | 276,920    
|Provisions                           |  |                   | -          
|Income tax provision                 |  |                   | 740,880    
|Total current liabilities            |  |                   | 3,581,411  
|Non-current liabilities              |  |                   |            
|Employee benefits                    |  |                   | 35,348     
|Deferred tax liability               |  |                   | -          
|Total non-current liabilities        |  |                   | 35,348     
|Total liabilities                    |  |                   | 3,616,759  
|Net assets                           |  |                   | 11,616,698 
|Equity                               |  |                   |            
|Issued capital                       |  |                   | 41,679,662 
|Reserves                             |  |                   | 8,990,804  
|Accumulated losses                   |  |                   | (38,929,670
|Non-controlling interest             |  |                   | (124,098   
|Total equity                         |  |                   | 11,616,698 





The total outstanding ordinary shares at
June 30, 2014, is 552,853,091 (2013: 374,873,050).

The total Performance Shares outstanding
at June 30, 2014, is 20,000,000 (2013: nil).





2


Table of Contents




The following table sets forth information concerning exchange
rates between the Australian dollar and the U.S. dollar for the periods indicated based on the noon buying rate in the City of
New York for cable transfers of Australian dollars, as certified for customs purposes by the Federal Reserve Bank of New York.
As of September 30, 2014, the noon buying rate was A$0.8737 per $1.00.



|               |  | A$
    Per USD$ |       
|-------------- |  | --------------- | ------
|Year Ended     |  | High            |       
|June 30, 2010  |  |                 | 0.9359
|June 30, 2011  |  |                 | 1.0803
|June 30, 2012  |  |                 | 1.1026
|June 30, 2013  |  |                 | 1.0573
|June 30, 2014  |  |                 | 0.9705
|Month Ended    |  |                 |       
|April 2014     |  |                 | 0.9424
|May 2014       |  |                 | 0.9382
|June 2014      |  |                 | 0.9430
|July 2014      |  |                 | 0.9488
|August 2014    |  |                 | 0.9352
|September 2014 |  |                 | 0.9376



| | B. | Capitalization and Indebtedness
| | -- | -------------------------------



Not required.



| | C. | Reasons for the Offer and Use of Proceeds
| | -- | -----------------------------------------



Not required.



| | D. | Risk factors
| | -- | ------------



Risks Related to Our Business



Our limited operating history may not
serve as an adequate basis to predict our future prospects and results of operations.



Our current level of operations did not develop
until early 2013. As a result, our operating history is limited and, accordingly, the revenue and income potential of our business
and markets are unproven. Our historical operating results do not provide a meaningful basis for evaluating our business, financial
performance and prospects, particularly in view of the fact that the last two years of operations were of businesses that have
since ceased operations or been sold to other companies.



We also face numerous risks, uncertainties,
expenses and difficulties frequently encountered by companies at an early stage of development. Some of these risks and uncertainties
relate to our ability to:



| | · | develop new customers or new business from existing customers;
| | - | --------------------------------------------------------------



| | · | expand the technical sophistication of the products and services we offer;
| | - | --------------------------------------------------------------------------



| | · | respond effectively to competitive pressures; and
| | - | -------------------------------------------------



| | · | attract and retain qualified management and employees.
| | - | ------------------------------------------------------



3


Table of Contents




We may not meet internal or external expectations
regarding our future performance. If we are not successful in addressing these risks and uncertainties, our business, operating
results and financial condition may be materially adversely affected.



Our new products could fail to attract
a sufficient number of social groups to our mobile platforms and we may not be able to retain organizations that are attracted
to our platforms.



In order to create a meaningful level of
activity in our target social groups, we need to attract and retain large user groups interested in our mobile social applications.
Our ability to convince these social groups to adopt our mobile platform will depend in part on our ability to create successful
new products and services. We may also introduce significant changes to our existing products and services or develop and introduce
new and unproven products and services, including technologies with which we have little or no prior development or operating experience,
which could affect users continued use of the products we develop. For example, in 2013, we began to develop REC*IT, a mobile application
that includes a variety of social features and tools including the ability to register for team activities, check schedules, player
standings, scores and individual performances and post photos and other content related to collegiate intramural sports. There
can be no assurance that we will continue to identify and partner with social groups of the size and demographics that may be attractive
to potential advertising customers. Even if we are able to attract groups and organizations to our platform, there can be no assurance
that they will continue to use our platform, which would materially and adversely affect our financial condition, results of operations
and prospects.



Even if our mobile social platforms
are widely adopted by user groups, advertisers may determine not to use us to reach their target audience, which would adversely
affect our financial condition, results of operations and prospects.



Our ability to achieve profitability is dependent
upon the aggregation of significant numbers of users of our mobile social platforms and the attractiveness of the market they represent
to advertisers. Our business model involves our development of mobile social platforms for user groups that we provide to the groups
at no cost in exchange for the right to include advertisements in the content hosted on our platform. If our new or enhanced products
or services fail to engage the targeted social groups, or we fail to attract or retain sufficient mobile communities to generate
sufficient interest with potential advertising customers, we may not generate the revenue or operating profit to justify our investments,
and our business, operating results and prospects could be materially adversely affected. In the future, we may invest in new products,
services and initiatives to generate revenue or profit, but there is no guarantee these approaches will be successful.



We expect to generate almost all of
our revenue from advertising. The inability to attract advertisers, or a general reduction in spending by advertisers, would harm
our business and prospects.



We expect to generate almost all of our revenue
from third parties advertising on our platforms. As is typical in our industry, we do not expect that we will have long-term commitments
from advertisers, and our advertisers will spend only a relatively small portion of their advertising budget with us. If our platforms
do not deliver ads in an effective manner, advertisers will not do business with us or will not be willing to pay the rates we
anticipate, which would harm our business and prospects. Our ability to generate advertising revenue also could be adversely affected
by numerous other factors, including:

| | · | our inability to attract communities who desire to partner with us;
| | - | -------------------------------------------------------------------



| | · | lower than expected engagement by members of the communities with whom we partner;
| | - | ----------------------------------------------------------------------------------



| | · | our ability to effectively manage advertising inventory for platforms we develop;
| | - | ---------------------------------------------------------------------------------



| | · | the emergence of new competitors in our industry or our inability to effectively compete with existing competitors;
| | - | -------------------------------------------------------------------------------------------------------------------



| | · | adverse legal developments relating to mobile advertising, including legislative and regulatory developments and developments
in litigation;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | · | adverse media reports or other negative publicity involving us, our partners, or other companies in our industry;
| | - | -----------------------------------------------------------------------------------------------------------------



| | · | changes in the way online advertising is priced;
| | - | ------------------------------------------------



4


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| | · | the impact of new technologies that could block or obscure the display of ads we place; and
| | - | -------------------------------------------------------------------------------------------



| | · | the impact of macroeconomic conditions and conditions in the advertising industry generally.
| | - | --------------------------------------------------------------------------------------------



Our legacy operations incurred net
losses since their respective inceptions and we anticipate that we will continue to incur net losses in the future.



Substantially all of our revenue to date
has been derived from the provision of mobile content product and services from businesses we no longer operate and which historically
incurred net losses. We incurred losses from continuing operations of A$13.6 million ($12.8 million), and A$4.7 million
for the fiscal years ended June 30, 2014 and June 30, 2013, respectively. From our inception in 2004 through June 30, 2014, we
have aggregate accumulated losses of A$38.9 million ($36.7 million). We expect our losses to continue as a result of ongoing project
development, increased selling, marketing and corporate support costs. These losses have decreased our working capital, total assets
and shareholders’ equity. Because of the risks and uncertainties associated with our recent strategic focus on customized
mobile social advertising development and the related commercialization efforts, we are unable to predict whether or not we will
become profitable, and if so, when.



User growth and engagement depend upon
effective interoperation with operating systems, networks, devices, web browsers and standards that we do not control.



We plan to make our products available across
a variety of operating systems and through websites. We will be dependent on the interoperability of our products with popular
devices, mobile operating systems and web browsers that we do not control, such as Mac OS, Windows, Android, iOS, Chrome and Firefox.
Any changes in such systems, devices or web browsers that degrade the functionality of our products and services or give preferential
treatment to competitive products could adversely affect usage of our products. Further, if the number of platforms for which we
develop our product expands, it is likely to result in an increase in our operating expenses. In order to deliver high quality
products, it is important that our products work well with a range of operating systems, networks, devices, web browsers and standards
that we do not control. In addition, because our users access our products and services through mobile devices, we are particularly
dependent on the interoperability of our products and services with mobile devices and operating systems. We may not be successful
in developing relationships with key participants in the mobile industry or in developing products that operate effectively with
these operating systems, networks, devices, web browsers and standards. In the event that it is difficult for our users to access
and use our products and services on their mobile devices, our user growth and engagement could be harmed, and our business and
operating results could be materially adversely affected.



Our failure to maintain the resources
and expertise necessary to keep up with the latest technologies in the industries in which we operate could have a material adverse
effect on our business and results of operations.



The social media industry is characterized
by continuing rapid technological advancement, changes in customer requirements, and evolving product standards. Accordingly, we
devote a substantial amount of resources to product development. To compete successfully, we must develop and market new products
that provide increasingly higher levels of performance and reliability. Product development is highly uncertain and we cannot guarantee
that we will successfully develop new products. Our inability to develop and market these products or to achieve customer acceptance
of these products could limit our ability to compete in the market or to grow revenues at satisfactory rates of growth.



If the design, manufacturing or marketing
of a product offering is not successful and we must allocate more resources to ensure the product’s success, it could lower
the profitability of the product or affect customer perception as to the quality of the products we offer.



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Our business depends on continued and
unimpeded access to our products and services on the Internet by our partner’s users and advertisers. If we or partners or
the users experience disruptions in Internet service or if Internet service providers are able to block, degrade or charge for
access to our products and services, we could incur additional expenses and the possible loss of users and advertisers.



We depend on the ability of our users and
advertisers to access the Internet. Currently, this access is provided by companies that have significant market power in the Internet
access marketplace, including incumbent mobile communications companies, device manufacturers and operating system providers, any
of whom could take actions that degrade, disrupt or increase the cost of user access to our products or services, which would,
in turn, negatively impact our business. The adoption of any laws or regulations that adversely affect the growth, popularity or
use of the Internet, including laws or practices limiting Internet neutrality, could decrease the demand for, or the usage of,
our products and services, increase our cost of doing business and materially adversely affect our operating results. We also rely
on other companies to maintain reliable network systems that provide adequate speed, data capacity and security to us and our users.
As the Internet continues to experience growth in the number of users, frequency of use and amount of data transmitted, the Internet
infrastructure that we and our users rely on may be unable to support the demands placed upon it. The failure of the Internet infrastructure
that we or our users rely on, even for a short period of time, could undermine our operations and harm our operating results.



Our business strategy contemplates
additional acquisitions and continued integration, and we may fail to identify suitable targets, acquire them on acceptable terms
or successfully integrate them.



We intend to enhance the profitability of
our business by applying our integration strategy to a larger asset base and, towards that end, we need to identify suitable targets
that would fit into our operations, acquire them on acceptable terms and successfully integrate them.



The acquisition and integration of new companies
pose significant risks to our existing operations, including:



| | · | additional demands placed on our senior management, who are also responsible for managing our existing operations;
| | - | ------------------------------------------------------------------------------------------------------------------



| | · | increased overall operating complexity of our business, requiring greater personnel and other resources;
| | - | --------------------------------------------------------------------------------------------------------



| | · | significant, initial cash expenditures to integrate new acquisitions; and
| | - | -------------------------------------------------------------------------



| | · | incurrence of debt to finance acquisitions and higher debt service costs related thereto.
| | - | -----------------------------------------------------------------------------------------



Moreover, despite our conducting the appropriate
pre-acquisition inquiries and due diligence reviews, the successful integration of new businesses may also be difficult for a variety
of reasons, including differing culture or management styles, poor records or internal controls and inability to establish control
over cash flows. Furthermore, even if we are successful in integrating new businesses, expected synergies and cost savings may
not materialize, resulting in lower than expected profit margins. Acquisitions also could include significant goodwill and intangible
assets, which may result in future impairment charges that would reduce our stated earnings.



We rely on computer software and hardware
systems to manage our operations, the failure of which could adversely affect our business, financial condition and results of
operations.



We are dependent upon sophisticated computer
software and hardware systems to support our network and manage and monitor programs on the network and currently rely in large
part on commercial providers for both system capacity and network maintenance. In addition, we rely on this computer hardware for
the storage, delivery and transmission of the data on our network. Any loss of such services or system failure which interrupts
the input, retrieval and transmission of data or increases the service time could disrupt our normal operation. Any failure in
this computer software or the related hardware systems could decrease our revenues and harm our relationships with suppliers and
customers, which in turn could have a material adverse effect on our business, financial condition and results of operations.



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Our business is subject to complex
and evolving laws, regulations and self-regulatory principles and frameworks internationally. These laws, regulations and self-regulatory
principles and frameworks are subject to change and uncertain interpretation, and could result in claims, changes to our business
practices, monetary penalties, increased cost of operations or declines in user growth, user engagement or ad engagement, or otherwise
harm our business.



We are subject to a variety of laws, regulations
and self-regulatory principles and frameworks in Australia, the United States and other jurisdictions in which we currently or
will operate that involve matters central to our business, including privacy, data security, advertising, rights of publicity,
data protection, content regulation, intellectual property, competition, protection of minors, consumer protection and taxation.



Many of these laws and regulations are still
evolving and being tested in courts and could be interpreted or applied in ways that could harm our business, particularly in the
new and rapidly evolving industry in which we operate. The introduction of new products, services or features may subject us to
additional laws and regulations as well as self-regulatory frameworks, principles and industry guidelines. In addition, foreign
data protection, privacy, consumer protection, content regulation and other laws and regulations of various applicable jurisdictions
are often more restrictive than those in Australia and the United States. In particular, the European Union and its member states
traditionally have taken broader views as to types of data that are subject to privacy and data protection, and have imposed greater
legal obligations on companies in this regard. A number of proposals are pending before federal, state and foreign legislative
and regulatory bodies that could significantly and adversely affect our business. For example, a regulation relating to the 1995
European Union Data Protection Directive is currently being considered by European legislative bodies that may affect companies
who are not based in Europe but provides services to European citizens, and could include more stringent operational requirements
for entities processing personal information of EU citizens and significant penalties for non-compliance. Similarly, there have
been a number of recent legislative proposals in the United States, at both the federal and state level, that would impose new
obligations in areas such as privacy, online and mobile tracking and geolocation, mobile applications, services provided to children
and liability for copyright infringement by third parties. In particular, the U.S. government, including the Federal Trade Commission,
and the Department of Commerce, has announced that it is reviewing the need for greater regulation for the collection of information
concerning user behavior on the Internet, including regulation aimed at restricting certain online tracking and targeted advertising
practices. Additionally, recent amendments to U.S. patent laws may affect the ability of companies, including us, to protect their
innovations and defend against claims of patent infringement. We currently allow use of our platform without the collection of
extensive personal information. We may expand our collection of personal information, which may subject us to additional regulation
and increase our exposure to security incidents. Further, it is difficult to predict how existing laws and regulations will be
applied to our business and the new laws and regulations to which we may become subject, and it is possible that they may be interpreted
and applied in a manner that is inconsistent with and adverse to our current practices. These existing and proposed laws and regulations
can be costly to comply with and can delay or impede the development of new products and services, result in negative publicity,
significantly increase our operating costs, require significant time and attention of management and technical personnel and subject
us to inquiries or investigations, claims or other remedies, including fines or demands that we modify or cease existing business
practices.



User trust regarding privacy is important
to the growth of users and the increase in user engagement on our partners’ platforms, and privacy concerns relating to our
products and services could damage our reputation and deter current and potential users and advertisers from using our products.



From time to time, concerns have been expressed
by governments, regulators and others about whether products, services or practices similar to ours compromise the privacy of users
and others. Concerns about governmental or regulatory actions involving our practices or practices in our industry generally with
regard to the collection, use, disclosure or security of personal information or other privacy-related matters, even if unfounded,
could damage our reputation, cause us to lose partners, users and advertisers and materially and adversely affect our operating
results. Any failure or perceived failure by us to comply with data protection laws and regulations or privacy policies may result
in inquiries and other proceedings or actions being threatened or taken against us by governments, regulators or others, as well
as negative publicity and damage to our reputation and brand, each of which could cause us to lose partners, users and advertisers,
which could have a materially adverse effect on our business.



Any systems failure or compromise of
our security that results in the unauthorized access to or release of our users’ or advertisers’ data could significantly
limit the adoption of our products and services, as well as harm our reputation and brand and, therefore, our business. We expect
to continue to expend significant resources to protect against security breaches. The risk that these types of events could seriously
harm our business is likely to increase as we expand the number of products and services we offer, increase the size of our user
base and operate in more countries.



Governments and regulators around the world
are considering a number of legislative and regulatory proposals concerning data protection. In addition, the interpretation and
application of consumer and data protection laws or regulations in Australia, the United States, Europe and elsewhere are often
uncertain and in flux, and in some cases, laws or regulations in one country are inconsistent with, or contrary to, those of another
country. It is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our
practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our practices
in the applicable jurisdiction, which could have a material adverse effect on our business and operating results. Complying with
new laws and regulations could cause us to incur substantial costs or require us to change or even terminate our business practices,
at least in the applicable jurisdiction, in a manner materially adverse to our business.



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We are likely to need additional capital
and we may not be able to obtain it at acceptable terms, or at all, which could adversely affect our liquidity and financial position.



We are likely to need additional cash resources
due to changed business conditions or other future developments. If we need these resources to satisfy our cash requirements, we
may seek to sell additional equity or debt securities or obtain a credit facility. The incurrence of indebtedness would result
in increased debt service obligations and could result in operating and financing covenants that would restrict our operations
and liquidity.



Our ability to obtain additional capital
on acceptable terms is subject to a variety of uncertainties, including:



| | · | investors’ perception of, and demand for, securities of our company and other companies which operate in our industries;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | · | conditions of the U.S. capital and debt markets and other capital and debt markets in which we may seek to raise funds;
| | - | -----------------------------------------------------------------------------------------------------------------------



| | · | our future results of operations, financial condition, cash flow and actual or forecasted profitability.
| | - | --------------------------------------------------------------------------------------------------------



Future issuances of ordinary shares
may cause a dilution in your shareholding or place restrictions on our operations.



If we successfully raise additional capital,
your shareholding may be diluted or we may have significant restrictions placed on our operations. Any capital raised through issuance
of new equity or equity-linked securities may cause a dilution in the percentage ownership of our then existing shareholders and
holders of our ADSs. Our organizational documents do not place any limit on the number of equity securities we may issue. Alternatively,
capital raised by way of additional debt financing may result in restrictions placed on us through such debt financing arrangements
which may:



| | · | limit our ability to pay dividends or require us to seek consents for the payment of dividends;
| | - | -----------------------------------------------------------------------------------------------



| | · | increase our vulnerability to general adverse economic and industry conditions;
| | - | -------------------------------------------------------------------------------



| | · | limit our ability to pursue our business strategies;
| | - | ----------------------------------------------------



| | · | require us to dedicate a substantial portion of our cash flow from operations to service our debt, thereby reducing the availability
of our cash flow to fund capital expenditure, working capital requirements and other general corporate purposes; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | limit our flexibility in planning for, or reacting to, changes in our business and our industry.
| | - | ------------------------------------------------------------------------------------------------



In addition, we may issue additional ordinary
shares for future acquisitions. If we pay for our future acquisitions in whole or in part with additionally issued ordinary shares,
your ownership interests in our company would be diluted and this in turn could have a material adverse effect on the price of
the ordinary shares or our ADSs.



We may become subject to intellectual
property rights claims that are expensive and time consuming to defend, and, if resolved adversely, could have a materially adverse
impact on our business, financial condition or operating results.



Companies operating in the Internet, technology
and media industries typically own large numbers of patents, copyrights, trademarks and trade secrets, and frequently enter into
litigation based on allegations of infringement, misappropriation or other violations of those patents and other intellectual property
rights. Many companies in these industries, including many of our competitors, have substantially larger patent and intellectual
property portfolios than we do, which could make us a target for litigation as we may not be able to assert counterclaims against
parties that sue us for patent, or other intellectual property infringement. We do not currently have any registered patents or
trademarks and rely on a combination of license agreements, copyright, trade secrecy laws and confidentiality agreements to protect
our intellectual property. In addition, various “non-practicing entities” that own patents and other intellectual property
rights often attempt to aggressively assert claims in order to extract value from technology companies. Further, from time to time
we may introduce new products and services, including in areas where we currently do not have an offering, which could increase
our exposure to patent and other intellectual property claims from competitors and non-practicing entities.



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In addition, although our standard terms
and conditions for our products do not provide advertisers and platform partners with indemnification for intellectual property
claims against them, some of our agreements with advertisers, platform partners and data partners require us to indemnify them
for certain intellectual property claims against them, which could require us to incur considerable costs in defending such claims,
and may require us to pay significant damages in the event of an adverse ruling. Such advertisers, platform partners and data partners
may also discontinue use of our products, services and technologies as a result of injunctions or otherwise, which could result
in loss of revenue and materially adversely impact our business.



While we are not currently the subject of
any threatened or actual patent and other intellectual property claims, as we face increasing competition and increase our profile,
the number of such claims against us may grow. There may be intellectual property or other rights held by others, including issued
or pending patents, that cover significant aspects of our products and services, and we cannot be sure that we are not infringing
or violating, and have not infringed or violated, any third-party intellectual property rights or that we will not be held to have
done so or be accused of doing so in the future. Any claim or litigation alleging that we have infringed or otherwise violated
intellectual property or other rights of third parties, with or without merit, and whether or not settled out of court or determined
in our favor, could be time-consuming and costly to address and resolve, and could divert the time and attention of our management
and technical personnel. Some of our competitors have substantially greater resources than we do and are able to sustain the costs
of complex intellectual property litigation to a greater degree and for longer periods of time than we could. The outcome of any
litigation is inherently uncertain, and there can be no assurances that favorable final outcomes will be obtained in all cases.
In addition, plaintiffs may seek, and we may become subject to, preliminary or provisional rulings in the course of any such litigation,
including potential preliminary injunctions requiring us to cease some or all of our operations. We may decide to settle such lawsuits
and disputes on terms that are unfavorable to us. Similarly, if any litigation to which we are a party is resolved adversely, we
may be subject to an unfavorable judgment that may not be reversed upon appeal. The terms of such a settlement or judgment may
require us to cease some or all of our operations or pay substantial amounts to the other party or both. In addition, we may have
to seek a license to continue practices found to be in violation of a third party’s rights. If we are required, or choose
to enter into royalty or licensing arrangements, such arrangements may not be available on reasonable terms, or at all, and may
significantly increase our operating costs and expenses. As a result, we may also be required to develop or procure alternative
non-infringing technology or discontinue use of the applicable technology. The development or procurement of alternative non-infringing
technology could require significant effort and expense or may not be feasible. An unfavorable resolution of the disputes and litigation
referred to above could adversely affect our business, financial condition, and operating results.



Our products contain, and we expect
our future products will contain, open source software, and we license some of our software through open source projects, which
may pose particular risks to our proprietary software, products, and services in a manner that could have a material adverse effect
on our business.



We use open source software in our products
and will use open source software in the future. In addition, we regularly release internal software projects under open source
licenses and we anticipate continuing to do so. In the future we may also contribute software source code to open source projects
under open source licenses. The terms of many open source licenses to which we are subject have not, as far as we are aware, been
interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that
imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. Additionally,
we may from time to time face claims from third parties claiming ownership of, or demanding release of, the open source software
or derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking
to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make
our software source code freely available, purchase a costly license or cease offering the implicated products or services unless
and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research
and development resources, and we may not be able to complete it successfully. In addition to risks related to license requirements,
use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors
generally do not provide warranties or controls on the origin of software. Additionally, because any software source code we contribute
to open source projects is publicly available, our ability to protect our intellectual property rights with respect to such software
source code may be limited or lost entirely, and we are unable to prevent our competitors or others from using such contributed
software source code. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative
effect on our business, financial condition and operating results.



The loss of key management personnel could negatively
affect our business.



Our future success is dependent in large
part on our ability to retain highly qualified managerial and other key personnel. In particular we depend on our Chief Executive
Officer, Ian Rodwell. The loss of Mr. Rodwell or any other key personnel we might hire could have an adverse effect on our business,
results of operations and financial condition.



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Risks Related to the Company



For as long as we are an “emerging
growth company,” we will not be required to comply with certain reporting requirements that apply to other public companies.



We are an “emerging growth company,”
as defined in the JOBS Act, enacted on April 5, 2012. For as long as we continue to be an emerging growth company, we may choose
to take advantage of certain exemptions from reporting requirements applicable to other public companies that are not emerging
growth companies. These include: (1) not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), (2) not being required to comply with any new requirements adopted
by the Public Company Accounting Oversight Board (the “PCAOB”), requiring mandatory audit firm rotation or a supplement
to the auditor’s report in which the auditor would be required to provide additional information about the audit and the
financial statements of the issuer, (3) not being required to comply with any new audit rules adopted by the PCAOB after April
5, 2012 unless the SEC determines otherwise, and (4) not being required to provide certain disclosure regarding executive compensation
required of larger public companies. We could be an emerging growth company until June 30, 2019, although if the market value of
our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of any completed second fiscal
quarter, we issue $1 billion in non-convertible debt securities or our revenues exceed $1 billion at any time before the end of
that five-year period, we would cease to be an emerging growth company as of the following June 30. We cannot predict if investors
will find our ordinary shares or ADSs less attractive if we choose to rely on these exemptions. If some investors find our ordinary
shares or ADSs less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market
for our ordinary shares or ADSs and the market price may be more volatile. Further, as a result of these scaled regulatory requirements,
our disclosure may be more limited than that of other public companies and you may not have the same protections afforded to shareholders
of such companies.



We are a foreign private issuer and,
as a result, we are not subject to U.S. proxy rules and will be subject to the Exchange Act reporting obligations that, to some
extent, are more lenient and less frequent than those applicable to a U.S. issuer.



We report under the Exchange Act as a foreign
private issuer. Because we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions
of the Exchange Act that are applicable to U.S. public companies, including (i) the sections of the Exchange Act regulating the
solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (ii) the sections
of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for
insiders who profit from trades made in a short period of time, and (iii) the rules under the Exchange Act requiring the filing
with the Commission of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current
reports on Form 8-K, upon the occurrence of specified significant events. We intend to furnish quarterly reports to the Commission
on Form 6-K for so long as we are subject to the reporting requirements of Section 13(g) or 15(d) of the Exchange Act, although
the information we furnish may not be the same as the information that is required in quarterly reports on Form 10-Q for U.S. domestic
issuers. In addition, while U.S. domestic issuers that are not large accelerated filers or accelerated filers are required to file
their annual reports on Form 10-K within 90 days after the end of each fiscal year, foreign private issuers are not required to
file their annual report on Form 20-F until 120 days after the end of each fiscal year. Foreign private issuers are also exempt
from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. Although
we intend to make interim reports available to our shareholders in a timely manner, you may not have the same protections afforded
to shareholders of companies that are not foreign private issuers.



As a foreign private issuer, we are
permitted to, and we will, follow certain home country corporate governance practices in lieu of certain NASDAQ Global Market requirements
applicable to U.S. issuers. This may afford less protection to holders of our ordinary shares.



As a foreign private issuer whose ordinary
shares are listed on the NASDAQ Global Market, we are permitted to follow certain home country corporate governance practices in
lieu of certain NASDAQ Global Market requirements. A foreign private issuer must disclose in its annual reports filed with the
Commission, each NASDAQ Global Market requirement with which it does not comply followed by a description of its applicable home
country practice. As a company incorporated in Australia and listed on the ASX, we expect to follow ASX Listing Rules and Australian
corporations law and practice with respect to executive sessions of the independent members of our board of directors. Unlike the
requirements of the NASDAQ Global Market, the corporate governance practice and requirements in Australia do not require us to
hold regular executive sessions where only independent directors shall be present. We also seek exemption from NASDAQ’s quorum
requirements applicable to meetings of shareholders and from the rules obligating issuers to obtain shareholder approval prior
to the issuance of securities in connection with certain acquisitions, private placements of securities the establishment or amendment of certain
stock option, purchase or other compensation plans, as we intend to follow applicable Australian law and the ASX Listing Rules
in these matters. Such Australian home country practices may afford less protection to holders of our ordinary shares.



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We may be subject to arbitrage risks.



Investors may seek to profit by exploiting
the difference, if any, between the price of our ordinary shares on the ASX and the price of our ADSs on the NASDAQ Global Market.
Such arbitrage activities could cause our share price in the market with the higher value to decrease to the price set by the market
with the lower value and could also in certain circumstances affect the volatility in the price of our ordinary shares and our
ADSs.



There is a risk that we may be classified
as a passive foreign investment company (“PFIC”), which could result in adverse U.S. federal income tax consequences
to U.S. investors.



In general, we will be treated as a PFIC
for any taxable year in which either (1) at least 75% of our gross income (including our pro rata share of the gross income of
our 25% or more-owned corporate subsidiaries) is passive income or (2) at least 50% of the average value of our assets (including
our pro rata share of the assets of our 25% or more-owned corporate subsidiaries) is attributable to assets that produce, or are
held for the production of, passive income. Passive income generally includes dividends, interest, rents, royalties, and gains
from the disposition of passive assets. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included
in the holding period of a U.S. Holder (as defined in the section titled “Taxation — U.S. Federal Income Taxation —
General”) of our ADSs or ordinary shares, the U.S. Holder may be subject to increased U.S. federal income tax liability upon
a sale or other disposition of our ADSs or ordinary shares or the receipt of certain excess distributions from us and may be subject
to additional reporting requirements. Based on the expected composition (and estimated values) of the assets and the nature of
the income of us and our subsidiaries for 2014, we do not believe that we will be treated as a PFIC for the 2014 taxable year,
ending on December 31, 2014. However, because we have not performed a definitive analysis as to our PFIC status for our 2013 or
2014 taxable year, there can be no assurance with respect to our status as a PFIC for either such taxable year or any subsequent
taxable year. U.S. Holders are urged to consult their own tax advisors regarding the possible application of the PFIC rules. For
more information, see “Taxation — U.S. Federal Income Taxation — U.S. Holders — Passive Foreign Investment
Company Rules.”



If we are unable to establish appropriate
internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the
restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors
to lose confidence in our reported financial information and have a negative effect on the market price of our ADSs.



Effective internal controls are necessary
for us to provide reliable financial reports and effectively prevent fraud. We maintain a system of internal control over financial
reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal
financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.



As a public company in the U.S., we will
have significant additional requirements for enhanced financial reporting and internal controls. We will be required to document
and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002,
which requires annual management assessments of the effectiveness of our internal controls over financial reporting starting with
our annual report on Form 20-F for the year ending June 30, 2015. In addition, an independent registered public accounting firm
will be required to attest to the effectiveness of our internal control over financial reporting beginning with our annual report
on Form 20-F following the date on which we cease to qualify as an emerging growth company if we become an accelerated filer or
large accelerated filer. The process of designing and implementing effective internal
controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory
environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting
obligations as a public company.



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We cannot assure you that we will not, in
the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the
measures we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate
controls over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate
internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the
restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors
to lose confidence in our reported financial information and have a material adverse effect on the market price of the ordinary
shares and ADSs.



Lack of experience as officers of U.S.
publicly-traded companies of our management team may hinder our ability to comply with the Sarbanes-Oxley Act.



It may be time-consuming, difficult and costly
for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need
to hire additional financial reporting, internal controls and other finance staff or consultants in order to develop and implement
appropriate internal controls and reporting procedures. If we are unable to comply with the Sarbanes-Oxley Act’s internal
controls requirements, we may not be able to obtain the independent auditor certifications that the Sarbanes-Oxley Act requires
publicly-traded companies to obtain to the extent applicable to us.



Risks Related to our Securities



The market price of our ordinary shares and our ADSs could
be subject to volatility.



The market price of our ordinary shares and
our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors such as:



| | · | variations in our actual and perceived operating results;
| | - | ---------------------------------------------------------



| | · | announcements of new products or services by us or our competitors;
| | - | -------------------------------------------------------------------



| | · | technological breakthroughs by us or our competitors;
| | - | -----------------------------------------------------



| | · | news regarding gains or losses of customers or partners by us or our competitors;
| | - | ---------------------------------------------------------------------------------



| | · | news regarding gains or losses of key personnel by us or our competitors;
| | - | -------------------------------------------------------------------------



| | · | announcements of competitive developments, acquisitions or strategic alliances in our industry by us or our competitors;
| | - | ------------------------------------------------------------------------------------------------------------------------



| | · | changes in earnings estimates or buy/sell recommendations by financial analysts;
| | - | --------------------------------------------------------------------------------



| | · | potential litigation;
| | - | ---------------------



| | · | general market conditions or other developments affecting us or our industry; and
| | - | ---------------------------------------------------------------------------------



| | · | the operating and stock price performance of other companies, other industries and other events or factors beyond our control.
| | - | ------------------------------------------------------------------------------------------------------------------------------



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In addition, the securities markets have
from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular
companies. These market fluctuations may also materially and adversely affect the market price of the ordinary shares and our ADSs.



We may not be able to pay any dividends on our ordinary
shares and, correspondingly, our ADSs.



Under Australian law, we may only pay dividends
subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the
dividend. Our ability to pay dividends will therefore depend on our ability to generate sufficient profits.



We can give no assurance that we will declare
dividends of any amounts, at any rate or at all in the future. Our historical dividend payments are not indicative of the amount
or timing of the payment of dividends that may be payable in the future and should not be used as a reference or basis to determine
the amount of such dividends. The declaration of future dividends, if any, will be at the discretion of our board of directors
and will depend upon our future operations and earnings, capital requirements, general financial conditions, legal and contractual
restrictions and other factors that our board of directors may deem relevant.



Future sales of substantial amounts
of the ordinary shares or ADSs by existing shareholders could adversely affect the price of our ADSs.



If our existing shareholders sell substantial
amounts of the ordinary shares or ADSs, the market price of our ADSs could fall. Such sales by our existing shareholders might
make it more difficult for us to issue new equity or equity-related securities in the future at a time and place we deem appropriate.
All 600,557,003 ordinary shares, which includes 12,106,520 which trade in the form of ADSs, may be sold in the public market
in the future, subject to the restrictions contained in Rule 144 under the Securities Act for those securities held by our “affiliates”
as that term is defined under the U.S. federal securities laws. If any existing shareholders sell a substantial amount of ordinary
shares, the prevailing market price for our shares could be adversely affected.



Risks Relating to Takeovers



Australian takeovers laws may discourage
takeover offers being made for us or may discourage the acquisition of large numbers of our ordinary shares.



We are incorporated in Australia and are
subject to the takeovers laws of Australia. Among other things, we are subject to the Australian Corporations Act 2001 (the “Corporations
Act”). Subject to a range of exceptions, the Corporations Act prohibits the acquisition of a direct or indirect interest
in our issued voting shares if the acquisition of that interest will lead to a person’s aggregate voting power in us increasing
from 20% or below to more than 20%, or increasing from a starting point that is above 20% and below 90%. Australian takeovers laws
may discourage takeover offers being made for us or may discourage the acquisition of large numbers of our ordinary shares. This
may have the ancillary effect of entrenching our board of directors and may deprive or limit our shareholders’ strategic
opportunities to sell their ordinary shares and may restrict the ability of our shareholders to obtain a premium from such transactions.
See Item 10.B. and “Description of Shares and Governing Documents” incorporated by reference therein.



Our Constitution and other Australian
laws and regulations applicable to us may adversely affect our ability to take actions that could be beneficial to our shareholders.



As an Australian incorporated company we
are subject to different corporate requirements than a corporation organized under the laws of the United States. Our Constitution,
as well as the Corporations Act, set forth various rights and obligations that are particular to us as an Australian company. These
requirements operate differently than from the equivalent legislation that is applicable to many U.S. incorporated companies and
may limit or otherwise adversely affect our ability to take actions that could be beneficial to our shareholders. You should carefully
review the summary of these matters set forth under the Item 10.B. and ‘Description of Shares and Governing Documents’
incorporated by reference therein, as well as our Constitution, which is included as an exhibit to this Annual Report, prior to
investing in our ordinary shares.



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You will have limited ability to bring
an action against us or against our directors and officers, or to enforce a judgment against us or them, because we are incorporated
in Australia, and the majority of our directors and officers reside outside the
United States.



We are incorporated in Australia, and conduct
business in Australia through our subsidiaries established in Australia. Most of our directors and officers reside outside
the United States and substantially all of the assets of those persons are located outside the United States. As a result, it
may be impracticable or at least more expensive for you to bring an action against us or against these individuals in Australia
in the event that you believe that your rights have been infringed under the applicable securities laws or otherwise. For more
information regarding the relevant laws of Australia, see “Enforceability of Civil Liabilities.”



You may not have the same voting rights
as the holders of our ordinary shares and must act through the depositary to exercise your rights.



Except as described in the deposit agreement
related to our ADSs (the “Deposit Agreement”), holders of our ADSs will not be able to exercise voting rights attaching
to the shares represented by our ADSs on an individual basis. Holders of our ADSs are entitled to instruct the depositary how to
exercise the voting rights attaching to the ordinary shares represented by our ADSs. You may not receive voting materials in time
to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other
third parties, will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to
you a shareholder meeting notice which contains, among other things, a statement as to the manner in which your voting instructions
may be given, including an express indication that such instructions may be given or deemed given to the depositary to give a discretionary
proxy to a person designated by us if no instructions are received by the depositary from you on or before the response date established
by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given with respect
to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists,
or (iii) such matter materially and adversely affects the rights of shareholders. We will make all reasonable efforts to cause
the depositary to extend voting rights to you in a timely manner, but you may not receive the voting materials in time to ensure
that you can instruct the depositary to vote. Furthermore, the depositary and its agents will not be responsible for any failure
to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result,
you may not be able to exercise your right to vote and you may lack recourse if the ordinary shares are not voted as you requested.
In addition, in your capacity as an ADS holder, you will not be able to call, attend or speak at a shareholders’ meeting.



You may not be able to participate
in rights offerings and may experience dilution of your holdings as a result.



We may from time to time distribute rights
to our shareholders, including rights to acquire our securities. However, we may not, and under the Deposit Agreement for our ADSs,
the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed
to ADS holders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration
under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with
respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective.
In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute such rights and
securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in
their holdings as a result.



You may be subject to limitations
on transfer of our ADSs.



Our ADSs are transferable on the books of
the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in
connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers
of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable
to do so because of any requirement of law or of any government or governmental body, or under any provision of the Deposit Agreement,
or for any other reason.



Your ability to protect your rights
as shareholders through the U.S. federal courts may be limited because we are incorporated under Australian law.



Australian companies may not have standing
to initiate a derivative action in a federal court of the United States. As a result, your ability to protect your interests if
you are harmed in a manner that would otherwise enable you to sue in a United States federal court may be limited.



Anti-takeover provisions in our Constitution
and our right to issue preference shares could make a third-party acquisition of us difficult.



Some provisions of our Constitution may discourage,
delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions
that divide our board of directors into three classes and authorize our board of directors to issue an unlimited number of shares
of capital stock and preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions
of such preference shares by amending the Constitution.



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We cannot assure you that our ADSs
will not be delisted from the NASDAQ Global Market, which could negatively impact the price of our ADSs and our ability to access
the capital markets.



Our ADSs are listed on the NASDAQ Global
Market. We cannot give you any assurance that a broader or more active public trading market for our ADSs will develop on the NASDAQ
Global Market or be sustained, or that current trading levels in ADSs will be sustained. In addition, if we fail to meet the criteria
set forth in SEC regulations, by law, various requirements would be imposed on broker-dealers who sell our securities to persons
other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending
or selling our ADSs, which may further affect the liquidity of our ADSs.



The listing standards of the NASDAQ Global
Market provide that a company, in order to qualify for continued listing, must maintain a minimum share price of $1.00 and satisfy
standards relative to minimum shareholders’ equity, minimum market value of publicly held shares and various additional requirements.
If we fail to comply with all listing standards applicable to issuers listed on the NASDAQ Global Market, our ADSs may be delisted.
If our ADSs are delisted, it could reduce the price of our ADSs and the levels of liquidity available to our shareholders. In addition,
the delisting of our ADSs could materially and adversely affect our access to the capital markets and any limitation on liquidity
or reduction in the price of our ADSs could materially and adversely affect our ability to raise capital. Delisting from the NASDAQ
Global Market could also result in other negative consequences, including the potential loss of confidence by suppliers, customers
and employees, the loss of institutional investor interest and fewer business development opportunities.



ITEM 4. INFORMATION ON THE COMPANY



A.  History and Development of the Company.



Corporate History
and Operating Segment Evolution



MOKO has been a publicly
traded company on the ASX since 2007 and began as a company engaged in the development of proprietary mobile social community platforms
and mobile content sales in Australia in 2004. From 2011 through 2013, we expanded the reach of our platform to support intended
global growth across four main business lines and revenue streams:



| | · | Social,
| | - | -------



| | · | Advertising,
| | - | ------------



| | · | Content, and
| | - | ------------



| | · | Commerce
| | - | --------



Social — MOKO’s
proprietary mobile social networks and community and chat products within Australia, the U.K. and U.S. MOKO’s revenues are
generated through monthly user subscriptions that are typically billed directly to a user’s mobile phone account which enables
them to access and participate in mobile chat and share communities.



The flag-ship social
product that MOKO has offered in this operating segment is ‘MOKO Chat and Share’, which is a proprietary community
offering developed by the Company and launched in 2007. This product has accounted for the majority of revenue in the mobile social
segment in all reported periods.



The Social business
represents legacy activities of MOKO’s initial platform monetization efforts and is of less significance and priority than
it has been historically.



The results from Mobile
Social are reported as continued operations and include insignificant results for mBuzzy, a U.S. mobile community offering acquired
in mid-2011 and sold for US$100,000 in August 2013. The ‘MOKO Chat and Share’ business is the single business
included in the mobile social segment as part of continuing operations.



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Advertising—
MOKO’s proprietary performance based, U.S. mobile ad network (“OfferMobi”) provides advertisers reach into over
500 active publishers across the globe covering various demographics of end user traffic, which more recently has been transitioning
its business strategy to work directly with advertisers and targeting specific industry sectors (or verticals) including Mobile
Games, Mobile Apps, Financial Services and Digital Publishing to allow it to provide advertisers with direct opportunities to place
ads in MOKO properties such as REC*IT, Speakiesy, Blue Nation Review and Voycit, RunHaven and others. This segment represents MOKO’s
core operating segment and contains the mobile community development business to be monetized via customized mobile social advertising.



Currently, the Company
has over 70 offers from advertisers in verticals such as Mobile Applications, Mobile Games, Mobile Utilities, Consumer Goods, Retail
and Entertainment. OfferMobi has contracts with advertisers that are direct and in some cases exclusive to OfferMobi. Terms of
payment range from net 7 days to net 30 days and in some cases, the Company has negotiated prepayments with advertisers for high
volume performance. This type of arrangement allows us a competitive advantage in the market to pay publisher partners quickly
on their delivery of high quality traffic.



The mobile advertising
operating segment is significant to MOKO’s business, financial results and intentions. The results from Advertising form
a part of continuing operations.



Content — MOKO’s
U.K. division of the Paper Tree Group including Antiphony Management Holdings Limited (AMH) and its operating subsidiaries
(the AMH Group) and All Night Media Limited (ANM), who bundled and sold entertainment products direct to mobile on a pay as you
go basis. This segment was founded in the 2012 fiscal year and for 2012 and 2013 fiscal years the business was significant to MOKO’s
financial results, when the vast majority of financial results came from the AMH Group. The Content segment ceased in fiscal 2013
following declining revenue and profitability that culminated in the disposal of the AMH Group in April 2013. For fiscal 2014,
Content was insignificant to the financial results. However for fiscal 2013, the results of its operations were significant and
are reported as discontinued operations in the consolidated financial statements.



Commerce — MOKO’s Australian
based online, flash sales and aspiring e-commerce product sales business, Deals-I-Love (Australia) Pty Ltd (“DIL”),
of which MOKO has a controlling economic interest of 51%, which sells merchant product to customers across the internet via pc’s
and mobile interfaces through its website, www.dealsilove.com.au. This business was acquired in July 2013 and was significant
to MOKO’s financial results for year ended June 30, 2014. Before the DIL acquisition, there was no activity in
this segment. The results from Mobile Commerce form a part of continuing operations.



From the second half
of fiscal 2013 and throughout 2014, MOKO has focused predominantly on its Mobile Advertising operations in the U.S and to a lesser
extent, its Mobile Commerce operations in Australia.



On September 29, 2014 and subsequent to
the 2014 fiscal year reporting period, MOKO entered a Share Purchase Agreement to acquire 80% of the ordinary shares as a controlling
interest in Tagroom Pty Ltd. Tagroom is a news and entertainment service that harnesses social, mobile and visual technologies
used by contemporary consumers, (www.tagroom.com). Tagroom will be allocated to the Mobile Advertising segment in Australia. The
acquisition has an effective transaction date of October 1, 2014.



This segmentation reflects
the underlying revenue and cash generating units within MOKO and reflects the internal reports that are reviewed and used by the
chief operating decision makers with MOKO, in assessing performance and in determining the allocation or resources.



Corporate Offices



Our principal executive
offices are located at 320 King Street, Alexandria, VA 22314 and our telephone number is (571) 982-3000. Our registered
office is Suite 4, Level 9, 341 George Street, Sydney, New South Wales, 2000 Australia.



B.  Business Overview



Overview



We began as a company engaged in the development
of proprietary mobile social community platforms and mobile content sales in Australia in 2004. During the following eight years,
we expanded beyond Australia to the United Kingdom, United States and parts of South-East Asia, leveraging our platform’s
proprietary network architecture with a range of capabilities, including Customer Relationship Management (CRM), Data Mining, Moderation
(censorship), Billing, Advertising Placement, Performance Monitoring, and Content Management. We believe that our current platform,
which was built both through in-house development and by means of acquisition and integration of complementary intellectual property,
represents technology that is potentially applicable to numerous social communities while being scalable within those communities.



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In 2012, we made a strategic shift away
from accessing a user base via third parties (involving revenue sharing agreements and other factors that rendered our business
model unprofitable) to providing customized mobile social community platforms to large organized groups that need to share content
and to interact efficiently with their members on a regular basis. These customized mobile platform
solutions are developed entirely by us and then distributed at no charge to these groups and their members, in return for certain
exclusive access and for advertising rights. We plan to commercialize these products with premium targeted mobile advertising.



We believe that we are different from traditional
online social media because our technology platform has been designed to enable a high degree of flexibility, permitting us to
design and build customized solutions that generic social networks generally do not. We build highly tailored digital assets which
comprise websites, mobile sites, and mobile apps designed to offer unequalled user engagement amongst likeminded individuals.



Our contractual relationships and social
community digital asset portfolio is initially represented by three products: “REC*IT”- for U.S. university intramural
sports participants and which recently moved from testing to commercialization stage, “RunHaven” and “Blue Nation
Review”, both of which are at mid stages of development and are aimed at U.S running and progressive politics participant
communities, respectively.



REC*IT.   REC*IT is
a mobile application we designed as a student tool for U.S. colleges and universities. We officially launched it in September
2014, in time for the 2014/2015 academic year. REC*IT represents our most mature application with respect to its development.



In March 2013, we entered an exclusive
agreement with American Intramural Sports Group LLC (“AISG”) with an initial three-year term (with the possibility
of extension and earlier terminable should we fail to meet certain minimum net revenue requirements following June 1, 2014
or in certain other circumstances). AISG has expertise in providing opportunities for colleges, students and sponsors
to benefit mutually through sports, recreation and fitness-related promotional activities on more than 200 colleges across
the U.S. The agreement with AISG is for us to work jointly to develop our REC*IT product. In the event AISG sought to terminate
our exclusive agreement prior to the completion of the initial three year term, we would seek to replace its portfolio of
colleges and universities with other REC*IT participants or to launch REC*IT at such colleges and universities in a manner
that would not violate the non-solicitation provisions that apply to us for 18 months following such termination. In October 2013,
we entered an exclusive three-year agreement (with the possibility of extension) with IM Leagues (“IML”)
who operates the imleagues.com sports website used by recreational and intramural sports departments in more than 800 colleges
and universities across the U.S. Pursuant to this agreement, we have secured the exclusive mobile rights to IML’s data,
including student and team schedules, fixtures, standings, statistics and news feeds for the purposes of populating the
REC*IT App. The significance of the exclusive mobile rights to IML’s information about intramural activities on the
campuses covered by IML is that REC*IT will be the only mobile App that will provide students with this information.



The REC*IT mobile application was developed
for students interested in intramural sports, fitness, and other leisure activities on campus, and includes a variety of social
features and tools, such as the ability to check team activities, schedules, player standings, scores, individual performances,
and to post photos and other content related to campus sports, recreational and leisure activities. REC*IT will also enable students
to share information and content via social network applications such as Facebook and Twitter.



MOKO has introduced the REC*IT platform
to more than 800 U.S. colleges and universities with a combined enrolled population of approximately 10 million students
in time for the 2014/2015 academic year although to date we have not derived any meaningful revenues from REC*IT and do not
expect any until the first quarter of 2015 at the earliest.



While actual revenue
from REC*IT will be subject to many factors, including but not limited to the level of adoption by the students, continuing usage,
advertising demand and rates, we are encouraged to note that REC*IT has already ranked in the top 10 of the Apple App Store’s
Sports category in September, 2014.



Advertising is live within the REC*IT App
with advertisers including Nike, Under Armour, Irish Spring and Jelly Belly Sports Beans.



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RunHaven.   In
December 2013, we announced plans to develop RunHaven, a proposed mobile digital community for running enthusiasts
in the United States. According to the Sport & Fitness Industry Association, 51,450,000 individuals were designated
as running participants in 2012, and in 2013, a total of 26,370 running events were scheduled to occur. It is proposed
that RunHaven will be a “go to” destination that will enable runners to find, research, register for, and
book travel to races around the country. It is intended that the platform will also be designed to offer industry news,
including training tips, nutritional guidance, injury treatment and prevention, and product reviews and suggestions.
Our RunHaven partners include Bill Reifsnyder, a former professional road racer and former Head of U.S. Sports
Marketing at adidas, and Virtual Roster, a registration and database management company that provides services to U.S.
road races. We intend that Virtual Roster will serve as a launching point for the RunHaven brand. At June 2014, the
development of the RunHaven App is still in the design phase, although as an intermediary step we have created and
implemented a RunHaven web site (www.runhaven.com) to provide proprietary content and to build and serve the target audience
both now and after launch of the RunHaven mobile app. We do not expect to be generating any meaningful revenue from
RunHaven until after launch of the mobile app, likely not until 2015.



“Blue Nation Review.”   We
have entered into an exclusive agreement with Mr. Jimmy Williams, a noted political commentator, to co-develop a third App
to be known as Blue Nation Review (“BNR”), which will be a mobile digital community for progressive political
commentators, observers, grass-root activists, and watchers of the political scene in the U.S. According to the U.S. Census
Bureau, 153 million people registered to vote in 2012, and 57% voted in the last presidential election. Moreover, expenditures
outside of traditional political party channels are substantial; in the 2012 election cycle,1,310 SuperPACs spent more than $609
million, according to opensecrets.org. This mobile political portal is intended to provide a hub for political news and conversation,
and may enable the creation of sub-committees and groups around specific issues or political campaigns.



In May 2014, we created and launched bluenationreview.com,
a website, as well as a related BNR Facebook page (and its sister page “Progressive America”), to serve as an
initial outlet for Blue Nation Review and to consolidate the target community prior to launch of the Blue Nation Review mobile
app. In September, we launched the first native iOS BNR App which was followed by an Android version that was released
in October 2014.



Since launching in May, BNR has grown to
attract over 3.2 million unique visitors a month, making it one of the top political news and commentary sites in the US. The
BNR Facebook page (and its sister page “Progressive America”) now has over 700,000 fans combined and our content
reaches more than 16 million people every week, with 62% of our fans being women.



Although BNR is witnessing a rapidly growing
and engaged audience created from the emergence of BlueNationReview.com and although growing, revenue generation to date has been
minor and we do not expect to be generating any meaningful revenue from BNR until after the mobile app is launched and towards
the end of calendar 2014.



More recently and through leveraging these
contracts, we have recently defined three core markets to focus on and our product development and acquisition efforts will seek
to expand products and activities within these core areas, as:



| | - | College & university students and student athletes
| | - | --------------------------------------------------



| | - | Politics; and
| | - | -------------



| | - | Running, health and fitness
| | - | ---------------------------



To address these target markets and sectors,
by the end of the first quarter in 2015 (and including the recent Tagroom acquisition), MOKO expects its portfolio will include
an additional four standalone platforms and apps dedicated to these targeted audiences:



“Speakiesy.”
MOKO is currently finalizing the development and planned launch of its Speakiesy social app, specifically
focused on the college market. The design and rationale for the app comes as a result of student focus group data received during
the initial development and pilot phase of REC*IT. Speakiesy draws comparisons to the original launch of Facebook, which then was
school specific. The only way a student will be able to join their specific college’s community is with an official university
email account (.edu), thus preventing outsiders from access to the app’s content.



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The deliberate design of a “closed
circuit” app means that users can only engage within their own college community without interference from unwanted non-student
body interactions. The app will also feature the ability to follow and post content anonymously, as well as from established profiles.
The app will be closely monitored with all visual content being screened via the MOKO moderation system as a failsafe to protect
students and schools from undesirable content.



“Voycit.”
The positive growth of BNR has led to the development of VOYCIT, the non-partisan political group
and community app. The creation of the app is underway and on track for launch mid fourth quarter 2014; timed for the heightened
2015 political US cycle featuring the Presidential election buildup to the primary races. VOYCIT is designed to be a non-partisan,
user-generated content app that empowers users to create and/or choose to follow “Groups” devoted to specific issues,
candidates or causes. VOYCIT is designed to enable both active office holders and aspiring candidates to create customized content
channels within the VOYCIT platform. This will enable them to engage and interact with other members/users. In addition to message propagation, the app can
dramatically impact local and national fundraising, petition awareness, the establishment of localized activist groups and/or the
organizing of local protests and rallies.



“RaceAdvizor.”
This development is intended to be a sister app to RunHaven RaceAdvizor targets becoming one of the
U.S.’s largest online event databases, ideally covering over 30,000 race events. Through RaceAdvizor, runners would be able
to search and choose their next race, whether it is across town or across the country. RaceAdvisor is also being designed to allow
runners to be able to read and write race reviews and view or share race photos. MOKO is exploring opportunities with Pacers Running
Stores with the goal of creating a dedicated RunHaven online Store (Shop). This would enable our community to purchase all of their
running products without leaving the site.



“Tagroom.”Acquired by MOKO effective October 1, 2014 , Tagroom
is a news and entertainment service that harnesses social, mobile and visual technologies used by contemporary consumers (www.tagroom.com).
Tagroom publishes popular leisure content from across the internet such as viral and trending news, product discoveries and engaging
videos. The beta launch has generated upwards of 5 million monthly page views. According to Alexa.com (an Amazon company that
measures global internet traffic and user engagement), Tagroom.com is also experiencing strong user engagement, with average daily
users spending more than 11 minutes on the site.



The addition of Tagroom.com to MOKO’s portfolio is synergistic
with the company’s overall audience profile and provides marketers and brands with direct access to coveted hard to reach
audiences. Brands and agencies seeking to engage with young adults will find Tagroom complete with a host of native advertising
offerings.



MOKO is in the process of developing a dedicated native mobile
app for Tagroom with the intention of cross-promoting it across its other properties. The acquisition of Tagroom also brings with
it three new senior team members experienced in the creation of viral media and shareable entertainment content for the important
18-30 year-old demographic.



Industry Background and Market Opportunity



Mobile digital advertising is a large and
growing industry. The industry is predicated on a very simple value proposition: mobile advertising pays for the development and
implementation of tools and games that mobile device users desire, while providing advertisers access to potential customers.



Because different tools and games (applications
or “apps”) may be used by populations with distinct demographic characteristics, advertisers or their agents can broadly
direct their message to the people they hope to reach, essentially in the same manner that, for example, a manufacturer of cutlery
may choose to advertise in a cooking magazine. Some digital companies like Facebook and Google have a sophisticated understanding
of the characteristics of their end-users and therefore can direct advertising with great precision. The unprecedented level of
direct consumer access now available through mobile devices is transitioning traditional advertising dollars, including print,
radio, and TV, to the mobile channel. According to Magna Global, total mobile advertising spend in the U.S. alone is expected to
reach $13.4 billion in 2017 from $3.4 billion in 2012, representing a compounded annual growth rate of 31.8% per year. Several
factors are expected to contribute to this growth, including the following:



| | · | There has been a dramatic increase in the number and functionality of mobile devices.   Increased functionality,
efficiency, and economic feasibility continue to drive user adoption of connected mobile devices. Smartphones and tablets,
in particular, offer users perpetual Internet access and greatly influence the way users consume media. In conjunction with
the expansion of 4G networks, smartphones are expected to represent 58% of total cell phone subscribers nationally by the
end of 2013. Similarly, tablets, while only three years from their formal introduction to the market, are expected to ship
263 million units worldwide in 2014 according to statistics published by Gartner, nearly surpassing expected worldwide 2014
PC shipments of 282 million.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | · | Users spend an increasing portion of their time on mobile platforms at the expense of time spent on traditional personal
computer, print, radio, and TV-based channels, which will likely lead to an increase in the mobile advertising spend.   Digital
content is becoming increasingly accessible via mobile devices. Entertainment, e-commerce, and personal finance, among other
activities, are all available at a click of a button. According to eMarketer, in 2012, users spent 12% of their time consuming
media via their mobile device, up from 10% in 2011. Mobile represented 3% of total advertising spend in these categories in
2012, up from 1% in 2011. We believe that continued adoption of smart devices, coupled with increasing accessibility of mobile
data and time spent on mobile devices, will lead to overall growth and more evenly distributed advertising expenditures.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | There has been a general increase both in the number of applications for mobile devices and in the number of developers
of such applications.   The popularity and accessibility of social media, gaming, and e-commerce on mobile
devices has driven an increase in both mobile applications and mobile application developers. Ranging from entrepreneurs to
corporations, the market recognizes the opportunity in mobile, and its ability to target its users and customers precisely. According
to Mobilewalla, at the end of 2011, there were nearly one million applications available across the four major smartphone
platforms (iOS, Android, BlackBerry, and Windows), with the number increasing at a rate of 2,000 applications per day. In
mid-2013, Apple and Google both announced surpassing the one million available application mark on their iOS and Android platforms,
respectively.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Some electronic platforms such as Facebook
have positioned themselves as tools for social communities, in most cases by providing a service that organizes and defines a previously
diverse and unorganized array of community relationships. However, many social communities exist that are already tightly defined
and have needs that are not adequately met by current mobile platforms. Such predefined social communities represent the target
audience for us and our custom applications.



These existing social communities have certain
recognizable characteristics, which include the following:



| | · | The community possesses essential information that all members of the group need, which often, but not always, is disseminated
from a central node;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Typically, the group currently uses web-based systems that are not designed to be portable and thus are inconvenient to
use on mobile devices;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| | · | Group members are united by an interest in a particular activity or pursuit, for example, by political inclination or
a sporting activity, and thus naturally represent a definable demographic audience for advertisers; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Group members likely would value enhanced social features, such as chatting, peer-to-peer and member-to-group postings,
which are not provided by current web-based systems and could be included in a mobile app.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Strategy



Our strategy is to be identified
as a community builder through providing mobile community platforms to large, like- minded, organized groups of people that need
to socialize, communicate and interact efficiently around their common interests. We then plan to commercialize these platforms
with premium targeted mobile advertising.



We target large groups that satisfy several
key criteria:



| | · | Target partners must possess a large membership or user-base that has coalesced around a specific suite of information
or content;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| | · | Information or content is needed by members of the group for participation in the group, which motivates them to access
this information or content frequently;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Ideally the information or content is not available elsewhere;
| | - | --------------------------------------------------------------



| | · | Members of the group want or need to share this information or to interact with other members of the peer group; and
| | - | --------------------------------------------------------------------------------------------------------------------



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| | · | There is a parent body or central administrator that we can engage to define the organization’s needs and to enter
into contractual relationships giving us exclusivity with respect to mobile applications within the community.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Once these factors have been reviewed and
deemed to satisfy the core criteria, we must also be in a position to secure exclusivity to access the content and the right to
advertise to the membership via our mobile app. We refer to our activities centered on the identification, engagement, and partnering
of a social organization as business development, and we have a dedicated team focused on such activities. The business development
team, in concert with representative of the social group, will assess the specific needs of the organization and will outline the
minimal specifications of the bespoke app required. The following points summarize the structure of the app that we would then
develop:



| | · | A high degree of customization to suit the needs of the partner and its audience/membership;
| | - | --------------------------------------------------------------------------------------------



| | · | Integration of social features and tools;
| | - | -----------------------------------------



| | · | Potential to be repurposed in whole or part to other sub-groups; and
| | - | --------------------------------------------------------------------



| | · | Capability to be wrapped in custom “skin” when the partner’s social group represents a constellation
of component subgroups, such as different universities within a multi-university consortium.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



After the specifications of an app are defined,
our technical and product development team creates the app using our proprietary network architecture to facilitate development.
After launch, our sales team can then monetize the new customized mobile app via a blend of mobile advertising models, including:



| | · | The sale of advertising on a sponsorship basis within sections or across whole application; and
| | - | -----------------------------------------------------------------------------------------------



| | · | The sale of advertising across a hybrid of the existing marketplace ad types, including:
| | - | ----------------------------------------------------------------------------------------



CPM
— cost per thousand page views (most common for basic banner ads); and



CPA — performance-based ad placement such
as “cost-per-click” or “cost-per-acquisition/action.”



Our sales team sells or intends to sell
the advertising either directly to the advertising client or through agencies, brokers or network operators such as USA Today,
Taboola, Google Ad-Exchange (ADX) or Open X. We anticipate advertising will represent our principal source of revenue in
future periods, and we expect in some circumstances we will share revenue with the contracted social organization in exchange
for exclusivity. However, in all current contractual arrangements (and other than USA Today which is generally a 50/50 share),
we maintain all or a great majority of advertising revenue, and we intend to do so in future contracts.



We believe that these highly segmented and
profiled audiences that are using the customized mobile apps will command premium pricing because of the transparent composition
of the audience and its relevancy to a particular advertiser. Moreover, due to the nature of the content and the app itself functioning
as a tool rather than as a toy, we believe the users will be considered a premium audience, compared to random users that might
be viewing ads within a game or news app.



Business Development Structure and Pipeline



We have a dedicated business development
team operating under the direction of our Chief Executive Officer.



Our pursuit of new partnerships or projects
is governed by four main criteria:



| | · | Large incumbent user group or membership base (minimum expectation of 500,000 members);
| | - | ---------------------------------------------------------------------------------------



| | · | Unique content or information that these members need to access;
| | - | ----------------------------------------------------------------



| | · | Frequency of activity and access to that information/content; and
| | - | -----------------------------------------------------------------



| | · | Information/content that is not readily supplied or available from alternate sources easily.
| | - | --------------------------------------------------------------------------------------------



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Once the above initial criteria have been
met, there must also be the opportunity to secure the partnership on an exclusive basis so that we can benefit from the advertising
revenues to be generated in connection with developing a customized mobile app for the community.



Given the specific criteria that we have
set for our target business development partnerships, we expect that the potential targets would number only a few hundred relevant
candidates. Within that relatively small group, our business development team initially intends to focus on the 50 targets we deem
most attractive based on the criteria described above.



In 2013 and 2014, we closed four development
agreements (with American Intramural Sports Group LLC, with IM Leagues LLC, with Mr. Jimmy Williams, and with certain running industry
veterans as discussed below under “Sales, Marketing and Key Customers”) that meet
our business development criteria. Additionally, we have an existing pipeline of target partners. We have advanced to commercial
negotiations with some of these target partners, and we are at early stages of inquiry or discussion with others.



Our Technology Platform



The MOKO Social Media platform is
a base set of proprietary source code, services, infrastructure and administrative tools that allows us to build customized applications
for each project. The platform has been built with extensibility and customization in mind to reduce maintenance requirements
and to shorten development timelines for new projects.



As our product suite grows, the platform
will allow us to efficiently roll out new features and services to other applications or to the entire suite of products.



Currently all services are hosted at Rackspace
datacenters using a hybrid of cloud and dedicated servers. Rackspace also provides support for all of our server infrastructure
(both cloud and dedicated).



The cloud segment allows rapid deployment
to permit on demand capacity and a more cost effective solution (as compared to dedicated hardware). Most of our services are hosted
in the cloud and we expect to scale our operations in the cloud as we require increased capacity.



The dedicated segment contains networking,
database and storage facilities. This arrangement gives us full control over networking and security aspects of the environment.
Both segments are able to communicate based on security policies set by us. Database and storage facilities are shared between
our products to maximize cost effectiveness.



We are party to Rackspace’s standard
Hosting Services Agreement regarding these facilities, on an open ended, month-to-month basis, pursuant to which Rackspace is obligated
to provide the hosting services in accordance with an agreed service description, service level guarantees and other technological
specifications. Under the standard terms, we are required to use reasonable security precautions in connection with our use of
Rackspace’s services and to cooperate with Rackspace’s reasonable investigation of service outages, security problems
and any suspected breach of the Hosting Services Agreement, including any violation of Rackspace’s Acceptable Use Policy,
which mandates Rackspace’s networks or services not be used to engage in, foster, or promote illegal, abusive or irresponsible
behavior. Rackspace may terminate the standard Hosting Services Agreement for breach if we fail to make timely payments or if we
violate the Acceptable Use Policy more than once (even if we cure each violation).



Competition



We are focused on specific and exclusive
agreements to develop our apps and mobile community platforms, and we do not know of any direct competitor with a similar objective.
We are, however, aware that there are other companies looking to enter the college intramural mobile App space, although these
other companies typically seek to sell schools an “enterprise solution” for a fee, rather than MOKO’s model of
providing the App and platform for free with compensation in the form of mobile advertising. For those colleges and universities
covered by the IM Leagues agreement, we also enjoy an exclusive grant of rights during the duration of that agreement with respect
to the data feeds that would be necessary to make any similar intermural sports App functional.



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We also could face competition from companies
that develop software for mobile devices and may seek to develop mobile apps for communities other than college and university
intramural sports that we will target, although we expect they would do so for an upfront payment for their services rather than
exclusive advertising rights. In addition, we face indirect competition from social networking platforms generally, such as Facebook,
Twitter or LinkedIn.



We also will have general competition in
the market place potentially from companies that focus on tailored digital communities that are seeking to monetize that audience
with mobile advertising or mobile commerce. Examples of such companies are Sugar Publishing, Meredith Media, and Glam Media. Each
of these companies targets interest groups and provides websites that also may be made available via mobile devices. With respect
to advertising sales, our indirect competitors and others may solicit the same or similar advertisers that we might also seek,
and therefore they will be in competition with us for the advertiser’s marketing spend. Many of these competitors are better
capitalized than we are, which could give them a competitive advantage.



Corporate Organization and History



We have been a publicly traded company
on the ASX since 2007. As of September 30, 2014 MOKO has three operating subsidiaries: MOKO.mobi, Inc. (“MOKO US”),
Deals-I-Love (Australia) Pty Ltd. (“DIL”) and Tagroom Pty Ltd (“Tagroom”) which has an effective date
of October 1st, 2014.



MOKO US is 100% owned by us and its current
business is the business strategy and marketing operations of the Customized Mobile Social Advertising (CMSA) projects within the
Mobile Advertising operating segment. It is our single U.S. corporate vehicle and as such employs and administers all U.S. staff
including the sales and technical staff working on OfferMobi’s activity within the Mobile Advertising operating segment,
which includes CMSA business.



DIL was acquired in July 2013 and is 51%
owned and is controlled by our company. DIL is a Sydney, Australia based online, flash sales and aspiring e-commerce product sales
business. DIL sells merchant product to customers that is sourced internationally and domestically through its website, www.dealsilove.com.au
in Australia. We purchased DIL to expand its market share within Australia and to investigate the possibility of international
expansion.



On September 29, 2014, MOKO acquired 80%
of the ordinary shares in Tagroom, a news and entertainment service that harnesses social, mobile and visual technologies used
by contemporary consumers (www.tagroom.com). We acquired Tagroom to complement our overall audience profile, to further develop
the brand offering with the intention of cross-promoting it on our other properties and to access the management team who are experienced
in the creation of viral media and shareable entertainment content for the important 18-30 year-old demographic. Tagroom will be
allocated to the Mobile Advertising segment in Australia. The acquisition has an effective transaction date of October 1, 2014.



Sales, Marketing and Key Customers



Our sales, marketing and business development
teams are principally based in Alexandria, VA and New York, NY and are headed by our Chief Revenue Officer (“CRO”).
Our CEO, who is based in Alexandria, VA, provides strategic direction, guidance and support to the sales and marketing effort and
is supported by the Senior Vice President of Business Development out of Perth, Western Australia. Recently, we have added an additional
three full time sales and marketing staff as a result of the Tagroom acquisition, who report to our CEO.



Additionally in Australia, there is a sales
and marketing team of six full-time equivalent staff in relation to the Deals I Love business, within the mobile commerce segment.



Our performance based advertising business,
“OfferMobi”, is based in New York and is integrated as part of our customized mobile social advertising business development
strategy. Our key existing brands include REC*IT, RunHaven, and BlueNationReview.com, and our primary operational team has offices
in Alexandria, Virginia. Our key customers for the REC*IT app are IML and AISG, which operates American Collegiate Intramural Sports
(“ACIS”). Our partners for RunHaven include Bill Reifsnyder, Virtual Roster, and ProVentures, and our partner for Blue
Nation Review is Mr. Jimmy Williams.



IML



On October 10, 2013, we entered into an
exclusive agreement with IML. IML operates the imleagues.com sports website used by recreational and intramural sports departments
in more than 800 colleges and universities across the U.S. The IML website offers a suite of tools from online signup to comprehensive
scheduling required to manage college intramural leagues. Pursuant to the agreement, we have secured the exclusive mobile rights
to IML’s data, including student and team schedules, fixtures, standings, statistics and news feeds in exchange for fees
that vary generally based on the number of participants in the IML portfolio that implement REC*IT. The agreement includes an initial
three-year term of exclusivity, which may be extended at the option of IML for an additional term of a duration to be mutually
agreed upon, and obligates us to maintain, to develop, and with the assistance of IML, to promote REC*IT free of charge to all
the colleges and universities in the IML portfolio. We are also responsible for the development, pricing and inclusion of mobile
digital advertising, which we plan to manage through our U.S. mobile advertising division. IML is entitled to a minority share
of the revenue generated from the IML portfolio colleges.



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The main REC*IT mobile application development,
testing and pilot phases are complete and we officially launched REC*IT in September 2014, in time for the 2014/2015 academic year.
We plan to continue to actively roll it out it more than 850 colleges and universities.



AISG



On March 6, 2013, we entered into an
exclusive development agreement with AISG. The term of the agreement is for an initial three years — earlier terminable in
certain circumstances — and will automatically be extended by one year, after the third and each successive anniversary
of the expiry of the three-year term, unless either party seeks to terminate.



AISG is an organization that provides opportunities
for colleges, students, and sponsors to benefit mutually through sports, recreation and fitness-related promotional activities
on more than 200 college campuses across the U.S. It is expected that the Mobile Intramural Sports Network service and platform
(MISN) will be jointly developed by us and AISG and is intended to include a variety of social features and tools including the
ability to register for team activities, check schedules, player standings and scores, individual performances and post photos
and content related to collegiate intramural sports. The plan is that the MISN will also enable students to share the information
and content with their other social network applications, such as Facebook, Twitter, Instagram and Pinterest.



AISG has developed an expertise in the area
of collegiate recreational sports and fitness programs. This expertise includes a network of institutions with which AISG has contractual
business relationships, in which they develop and implement sponsored promotional activities. AISG will consult and assist our
development team exclusively in the development of MISN and provide the integration and assist in building direct relationships
with AISG member schools.



AISG is obligated to provide us with specific
elements that will promote the MISN service and in general support MISN wherever possible with the member schools, and the other
advertising assets that are owned or managed by AISG. The platform is expected to be commercialized by providing the mobile service
free to the colleges, universities and students, and then selling advertising opportunities to those sponsors, businesses and organizations
wishing to reach the U.S. college or university student demographic and their families.



AISG and we expect to work together on certain
national advertising programs that involve the bundling of benefits, which include sponsorship elements from the AISG existing
business. We are obligated to assist AISG in the development, pricing and inclusion of mobile digital advertising in these programs.



Under the agreement, we are responsible
for funding the establishment of the MISN and will retain ownership of all intellectual property and assets relating to the design,
development and on-going operation of the MISN. AISG will receive a minority revenue share from the advertising revenues. Our U.S.
mobile advertising division is responsible for managing the advertising inventory and selling and brokering the advertising with
media buyers and mobile affiliate marketing partners. The agreement also requires us to meet certain short-term development benchmarks
and annual minimum net revenue requirements for each of the two years following completion of testing and the pilot program, which
has been deemed complete as of June 1, 2014 by us and AISG, failing which AISG could seek to terminate the agreement. In the
event AISG sought to terminate our exclusive agreement prior to the completion of the initial three year term, we would seek to
replace its portfolio of colleges and universities with other REC*IT participants or to launch REC*IT at such colleges and universities
in a manner that would not violate the non-solicitation provisions that apply to us for 18 months following such termination.



In addition, we have issued or have agreed
to issue to AISG:



| | · | 25,000 options
                                         of American Depositary Shares (ADS) (where each ADS represents forty fully paid ordinary
                                         shares of MOKO), priced at US$4.00; - issued on June 30, 2014;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the right to buy up to $250,000 worth of our ordinary shares each year for the term of the agreement, at a 20% discount
to then-prevailing market price of our ordinary shares; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | · | the right to buy up to $500,000 worth of our ordinary shares concurrently with the closing of this offering on the same
terms and conditions as investors purchasing our ADSs as adjusted for the exchange rate of ADSs to ordinary shares.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Advertising and other revenue generated
from the exploitation of MISN technology will be shared between us and AISG in varying percentages, based on the extent to which
AISG is responsible for procuring and generating such revenue. Upon termination of the agreement we are subject to a prohibition
on solicitation of or communication with colleges and universities in the AISG network for a period of time.



RunHaven



On December 23, 2013 we announced an exclusive
agreement to develop RunHaven, a mobile digital community for running enthusiasts in the United States. Signatories to the agreement
include Mr. William (Bill) Reifsnyder and Ms. Gail Hughes. Under the agreement, we are responsible for providing online and mobile
tools to advance communication and efficiencies within the running community. The tools are intended to enable runners to find,
research, register for, and book travel to races around the country. The platform will also offer industry news, including training
tips, nutritional guidance, injury treatment and prevention, and product reviews and suggestions. Our partners have transferred
to MOKO the rights to the RunHaven App and are obligated to develop it for the benefit of MOKO. Bill Reifsynder is entitled to
a minority share in the revenue generated from the RunHaven platform as well as a portion of the proceeds in the event MOKO sells
the RunHaven App.



Bill Reifsnyder is a full-time employee
of MOKO and will lead the RunHaven team. He has been engaged in many facets of running for the last three decades. As a professional
road racer, Reifsnyder was ranked as high as #2 in the world by Runner’s World magazine (1991) and was twice the U.S. National
Marathon champion (1989 and 1991). After retiring from professional racing, he oversaw the running category for adidas, having
responsibility for managing more than 60 sponsored runners and track and field athletes and implementing more than 100 running
events, including the sponsorship of the Boston Marathon. In 2008 Reifsnyder founded VO2 Marketing, a marketing consultancy in
Philadelphia specializing in endurance sports, and was also the Executive Director of the National Marathon and Half Marathon in
Washington, DC.



In the December 23 agreement with Gail Hughes,
MOKO secured through acquisition the existing customer base of Virtual Roster, a registration and database management company based
in Flagstaff, Arizona. Virtual Roster’s existing base of events will serve as the launching point for RunHaven, and Ms. Hughes,
the founder and President of Virtual Roster, will oversee all aspects of data management for the RunHaven property.



Additionally, ProVentures, a sports and
entertainment agency based in Alexandria, Virginia, agreed to be the exclusive marketing agency. The company will assist RunHaven
with the overall strategic direction of the property, including branding, marketing, and promotions.



Blue Nation Review



On January 1, 2014 we entered an exclusive
agreement with Mr. Jimmy Williams, a noted political commentator, to co-develop (through his affiliated consulting entity) a mobile
digital community for progressive political commentators, observers, grass-root activists, and watchers of the political scene
in the U.S. This project is called Blue Nation Review. Under the agreement, which as an initial term of three years, MOKO will
design and implement a mobile political portal that will provide a hub for political news and conversation, and will enable the
creation of sub-committees and groups around specific issues or political campaigns. Mr. Williams is obligated to publish a certain
number of commentary articles each week and join the social interaction (including through tweets) on issues including minority
rights, immigration, marriage equality, women’s interests, social and economic equality, and libertarian and privacy issues.
Additionally, Mr. Williams is obliged to recruit specialist contributors to create and to feed content for Blue Nation Review.



Mr. Williams is associated with Politico
and MSNBC, and writes daily for USnews.com, hypervocal.com, and jimmyspolitics.com. He spent nearly seven years as a senior staffer
in the United States Senate, including nearly five years with Senate Majority Whip Dick Durbin. As a lobbyist, Jimmy represented
multiple interests before the U.S. Congress and Executive branch, including the real estate, banking, wine and spirits, and speed-racing
industries.



We will own the application and all intellectual
property surrounding the mobile property developed. Mr. Williams receives a monthly retainer, options and a minority share of the net revenues of Blue Nation Review.



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Research and Development



Our Technical and Product Development teams
perform our research and development. These teams comprise fifteen full time employees located in Perth, Western Australia. They
are led by our Technical Leader and Chief Executive Officer. Since 2007, we have expanded our research and development effort to
focus on designing, building and commercializing our core mobile internet platform. Historically and principally, this activity
has consisted of internal labor efforts and technological expenditures. Our accounting policy has always been to expense such expenditures.
The research and development activity has historically been supported by Australian federal government grants which, since listing
on the ASX in 2007, total A$0.25 million ($0.22 million), and by concessional income taxation treatment under the Income Tax Act, 1936 (Cth) in Australia (the Act),
which has provided cash rebates to us through its annual income taxation filings of A$3.74 million ($3.34 million), up to and including
the 2014 taxation year.



We expect our future research and development
activities to relate to leveraging our core mobile platform through development of specific community platforms for common interest
groups in the U.S. and commercializing and monetizing these developments via customized mobile social advertising.



The ongoing availability of Australian government
financial support for research and development activities is subject to various tests and legislative change and there can be no
assurance that such financial support will be available to support our expected future research and development activities.



Legal Proceedings



We are not a party to any material legal
proceedings.



C.  Organizational Structure



We have been a publicly traded company on
the ASX since 2007. The organizational structure of our operating entities, including the Tagroom acquisition made after the June
30, 2014 balance date, is set forth below:







D.  Property, plant and equipment



We currently lease the following properties:



|Location                            |  | Use of Property   |  | Area    
|----------------------------------- |  | ----------------- |  | --------
|New York, New York                  |  | HQ                |  | 100 sq m
|                                    |  |                   |  |         
|Perth, Western Australia, Australia |  | R&D               |  | 100 sq m
|                                    |  |                   |  |         
|Alexandria, Virginia                |  | Operations office |  | 550 sq m
|                                    |  |                   |  |         
|Sydney City, Sydney, Australia      |  | Registered office |  | 40 sq m 



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On December 1, 2013, we entered into a one-year
lease in New York City for a property to serve as our corporate headquarters. Our advertising sales team and affiliate marketing
business “OfferMobi” are based in New York City. They are integrated as part of the custom mobile social advertising
business development strategy.



The Alexandria, Virginia office was leased
effective August 15, 2014 for a term of three years and replaces the prior contractual arrangement with ProVentures where
office rental was included in a combined monthly consulting fee. The Virginia office now serves as our operational headquarters
and houses our business development function as well as project operations, including the operational teams for REC*IT, RunHaven,
and Blue Nation Review.



The Perth office is on a monthly agreement
with the landlord as a long-standing arrangement. The Perth facility houses personnel focused on research and technology development.



The month-to-month Sydney office agreement
is with an entity related to our Chairman, Greg McCann, at A$1,600 per month, which we consider to be market rate.



Our key existing brands include REC*IT,
RunHaven, and Blue Nation Review. The operational teams for these brands are located in Alexandria, Virginia.



As of April 2014, our CEO Ian Rodwell
has been based permanently in the U.S. and he is now based permanently in the Alexandria, Virginia office.



ITEM 4A. UNRESOLVED STAFF COMMENTS



None.



ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS



You should read the following discussion
and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and
related notes included in this Annual Report beginning on page F-1. The following discussion and analysis contain forward-looking
statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from
those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk
Factors” and elsewhere in this Annual Report.



Overview



We began as a company engaged in the development
of proprietary mobile social community platforms and mobile content sales, delivering proprietary mobile social services and content
to users within Australia, the United Kingdom, the Philippines, and Malaysia. Monetization historically occurred via user subscription
models connecting MOKO’s billing platform with the billing capabilities of our telephony or billing aggregator partners.
This monetization and revenue stream is what MOKO identifies as the Mobile Social operating segment. The Mobile Social operating
segment forms part of continuing operations in the historical financial statements although its significance has diminished measurably
in the reported periods such that its continuing business operations are insignificant to MOKO’s forward intentions.



Our current business model is to develop,
manage, and commercialize online mobile social communities for large organized groups that need to share content and interact efficiently
with their members. We plan to monetize these platforms with premium and targeted mobile advertising. Our perception is that our
highly tailored mobile community applications differentiate MOKO from other generic social networks that do not offer such customized
products. We have agreements relating to three such communities, and we are in the process of pursuing other customized mobile
community application opportunities with large common interest groups such as sporting events, clubs and associations, as well
as other membership groups that congregate around a core content or information source such as political groups or motoring enthusiasts.



We expect to invest between A$3.0 and A$3.5
million ($2.8 to $3.3 million) to complete the development of our current seven Apps between now and when they are launched and
to fund this out of current working capital reserves.



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Mobile Advertising



In the second half of the 2013 calendar
year, the Company replaced the management of its Mobile Advertising operations. We have repositioned the focus and strategy of
OfferMobi into building direct relationships with advertisers and enabling the monetization of Mobile Applications (Mobile Application
Traffic). OfferMobi’s sales efforts are targeted to Mobile Application Advertisers (Mobile Games, Utilities and other Apps)
and have allowed the Company to gain expertise in Mobile Application marketing and monetization. We have commenced leveraging our
sales expertise in monetizing our proprietary digital assets, and are increasingly focused on selling exclusive advertising inventory
opportunities (ad placement space) within our proprietary digital assets, such as REC*IT, BNR and RunHaven to advertisers.



Mobile Advertising Revenues for the second
half of 2014 fiscal year outperformed those from the first half to December 31, 2013 as revenues from third party advertising through
recent efforts to build direct relationships with advertisers to enable the monetization of Mobile Applications have resulted in
increased revenues.



Moving forward, the Mobile Advertising
operations and resources, both advertising sales people and technology platforms, will continue to be repurposed to focus on selling
advertising campaigns in our own applications and traffic in Customized Mobile Social Advertising (CMSA) projects such as REC*IT,
RunHaven and Blue Nation Review. The Company’s sales efforts will leverage some of the pre-existing relationships with advertisers.
As such, third party advertising revenues are expected to comprise a less significant part of the mobile advertising operating
segment.



During the first half of the 2015 fiscal
year, we have begun to launch our CMSA projects such as REC*IT and Blue Nation Review in a methodical manner to targeted user bases
across United States. We expect as the user base grows, the ability to build advertising revenues will grow with the usage of the
applications. We further expect during the second half of fiscal 2015, that the volume of users will allow the Company to optimize
its advertising revenue (Application Monetization) from the applications.



Accordingly, Mobile Advertising revenues
are expected to increase and losses are expected to reduce, particularly during the 2015 calendar year, although we have not determined
at which point our Mobile Advertising operations may become profitable.



Mobile Social

Mobile Social operations were sun-set by
us in 2013 and several underperforming properties and telecommunications carriers were abandoned. The resources and infrastructure
that historically developed, maintained and supported Mobile Social as our major operating segment were re-deployed into Mobile
Advertising in the second quarter of 2013.



In August 2013, we disposed of ‘mBuzzy’
after two years of mixed performance and currently, Mobile Social comprises trailing revenues from ‘MOKO Chat and Share’
in Australia, a proprietary developed product that was most successful during 2008.



As a result, fiscal 2014 revenues and results
from Mobile Social were down and are expected to reduce through the 2015 fiscal years and are insignificant to our intentions.



Mobile Content



This operating segment is discontinued
and trailing business activity has ceased.



Mobile Commerce



This operating segment first formed part
of MOKO’s operations for the six months ended December 31, 2013 and subsequent to the DIL acquisition on July 1,
2013. Prior to this, there was neither activity nor revenue generated in the Mobile Commerce segment.



For the twelve months ended June 30,
2014, the Mobile Commerce operating segment comprises only the results of DIL from July 1, 2013 on. We have not determined
when or if our Mobile Commerce operations will become profitable.



For the fiscal years ended June 30,
2013 and June 30, 2014, MOKO was unprofitable and a net user of cash and cash equivalents in the absence of ongoing sources of
financing. MOKO has needed to rely on its ability to successfully raise cash proceeds from issuing new equity or debt financing
to sustain its operations and ensure the business remains a going concern. Historically, the capital has been sourced primarily
from within Australia and to a lesser extent internationally including more recently debt and equity funding from within the U.S.
The Company, however, has since retired or cancelled such non-equity funding facilities and as of the date of this Annual Report
has no outstanding indebtedness, other than trade creditors and as otherwise disclosed in the financial statements and related
notes included in this Annual Report beginning on page F-1.



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On March 6, 2013, MOKO secured an
agreement with American Intramural Sports Group LLC and on October 10, 2013, MOKO secured an agreement with IMLeagues LLC.
Under these agreements, MOKO has the exclusive mobile rights for intermural sport, fitness and recreational activity data for more
than 850 colleges and universities across the U.S. with a combined enrolled population of approximately
10 million students. MOKO intends to commercialize this platform with premium and targeted mobile advertising.



This customized mobile social advertising
project is branded REC*IT. The REC*IT brand and the REC*IT mobile community platform and its respective device applications (“Apps”)
are owned by MOKO. Subsequent to June 30, 2013, MOKO entered into an agreement for its technology platform to underlay RunHaven,
a mobile digital community for running enthusiasts in the United States, and an exclusive agreement with Mr. Jimmy Williams,
a noted political commentator, to co-develop Blue Nation Review.



To date, MOKO has not generated any meaningful
revenue from REC*IT and is not expecting to until the first quarter of 2015 at the earliest. The development of the RunHaven and
Blue Nation Review platforms remain in mid to late stages and no meaningful revenues have been generated to date, nor are any anticipated
until the fourth quarter of 2014 calendar year, for Blue Nation Review and thereafter for RunHaven.



The more recent digital asset developments
of Speakiesy, Voycit and RaceAdvizor have not generated revenue and are not anticipated to generate meaningful revenue
until at least the first quarter of 2015.



It should be noted that the strategic focus
on Customised Mobile Social Advertising projects such as REC*IT, RunHaven, and Blue Nation Review and the discontinuation of Mobile
Content operations in fiscal 2013 has currently reduced the revenues being generated within MOKO and necessitates development expenditure
in advance of commercialization and the realization of new revenue and cash inflows. It is expected that in future periods, the
historical revenue streams within Mobile Advertising and Mobile Commerce will continue at approximately equivalent rates to those
reported for the most recent six months to June 30, 2014 and that Mobile Social will continue to generate revenue in a reduced
and insignificant capacity in the future. The Mobile Content segment has been ceased and will not generate revenue in future periods.
As such, to pursue a Community Builder business strategy with a focus on monetizing Customized Mobile Social Advertising projects,
MOKO requires funding sources in advance of accepting additional projects. Additionally, management believes that the costs associated
with being a publicly listed company in the U.S. will increase MOKO’s cash expenses both as a one-time event and on an ongoing
basis.



And whilst the existing cash and cash equivalents
are expected to provide sufficient working capital and time for MOKO to establish its Customised Mobile Social Advertising strategy,
in the event of delays or the eventuality of other business risks that adversely affect the results from future operations, MOKO
may need to raise new equity or debt funding similar to the ways in which it has previously done so.



Factors Affecting Comparability of Our
Historical Results



Our historical results of operations for
the periods presented may not be comparable with prior periods or to our results of operations in the future for the reasons discussed
above and below.



From the fourth quarter of fiscal 2013,
MOKO has been actively de-emphasizing and divesting non-core businesses and assets that do not fit within the revised strategy
of monetizing its mobile communities within the U.S. To this end, MOKO divested itself of the Paper Tree Limited Group (including
Antiphany Management Holding Limited and its operating subordiaries) on April 29, 2013 and the net assets and financial performance
results of which are reported as discontinued operations for fiscal 2013. MOKO has ceased operation of All Night Media Limited,
its second and smaller mobile content business in the United Kingdom. In addition in August 2013, the mobile social assets of mBuzzy
were also divested.



In addition, on July 1, 2013 MOKO acquired
a 51% controlling interest in Deals-I-Love (Australia) Pty Ltd (“DIL”), a Sydney, Australia based online, flash sales
and aspiring e-commerce product sales business. DIL sells merchant product to customers that is sourced internationally and domestically
across the internet via pc’s and mobile interfaces through its website, www.dealsilove.com.au in Australia. MOKO purchased
DIL to expand its market share within Australia and to investigate the possible application to the REC*IT user base.



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Accordingly, the businesses that operated
to produce revenue during fiscal 2014 that have continuing operations are the OfferMobi business within the Mobile Advertising
segment, DIL within the Mobile Commerce segment and to a lesser extent, MOKO Chat and Share within the Mobile Social operating
segment.



In fiscal 2015, we expect that the Mobile
Advertising segment revenue will be increased via the commercialization of Customized Mobile Social Advertising (“CMSA”)
projects such as REC*IT, BNR, RunHaven and others, in addition to the recent acquisition of Tagroom effective October 1, 2014
which is allocated to the Mobile Advertising segment in Australia.



Non-IFRS Financial Measure



In evaluating our business, we consider
and use EBITDA, a non-IFRS measure as a supplemental measure to review and assess our operating performance. The presentation of
this non-IFRS financial measure is not intended to be considered in isolation or as a substitute for the financial information
prepared and presented in accordance with IFRS. We define EBITDA as Earnings (being Net Profit or Loss from continuing operations),
Before Interest, Tax, Depreciation and Amortization. We use EBITDA as a measure of operating performance to assist in comparing
performance from period to period on a consistent basis, as measures for planning and forecasting overall expectations and for
evaluating actual results against such expectations and as performance evaluation metrics, including as part of assessing and administering
our executive and employee incentive compensation programs.



We believe that the use of this non-IFRS
measure facilitates investors’ assessment of our operating performance from period to period and from company to company
by backing out potential differences caused by variations in items such as capital structures (affecting relative finance or interest
expenses), the book amortization of intangibles (affecting relative amortization expenses), the age and book value of property
and equipment (affecting relative depreciation expenses) and other non-cash expenses (affecting one-time transition charges). We
also present this non-IFRS measure because we believe this non-IFRS measure is frequently used by securities analysts, investors
and other interested parties as measures of the financial performance of companies in our industry.



This non-IFRS financial measure is not
defined under IFRS and is not presented in accordance with IFRS. This non-IFRS financial measure has limitations as an analytical
tool, and when assessing our operating performance, investors should not consider it in isolation, or as a substitute for profit
(loss) or other consolidated statements of operation data prepared in accordance with IFRS. Some of these limitations include,
but are not limited to:



| | · | it does not reflect our cash expenditures or future requirements for capital expenditures or contractual
commitments;
| | - | ---------------------------------------------------------------------------------------------------------------------



| | · | it does not reflect changes in, or cash requirements for, our working capital needs;
| | - | ------------------------------------------------------------------------------------



| | · | it does not reflect the finance or interest expenses, or the cash requirements necessary to service interest
or principal payments, on our debt;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| | · | it does not reflect income taxes or the cash requirements for any tax payments;
| | - | -------------------------------------------------------------------------------



| | · | although
                                         depreciation and amortization are non-cash charges, the assets being depreciated and amortized
                                         often will have to be replaced in the future, and EBITDA do not reflect any cash requirements
                                         for such replacements; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | other companies may calculate EBITDA differently than we do, limiting the usefulness of this non-IFRS
measure as a comparative measure.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



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We compensate for these limitations by
relying primarily on our IFRS results and using EBITDA only as a supplemental measure. The following is a reconciliation of profit
for the year to EBITDA:



|                                                         |  | Fiscal
    Year Ended June 30 |            
|-------------------------------------------------------- |  | ----------------------------- | -----------
|                                                         |  | 2014                          |            
|                                                         |  | A$                            |            
|Statement of Profit or Loss Data                         |  |                               |            
|Loss after income tax benefit from continuing operations |  |                               | (13,596,459
|Interest expense /(income)                               |  |                               | (101,012   
|Tax expense/(benefit)                                    |  |                               | (1,053,905 
|Depreciation and Amortization expense                    |  |                               | 1,224,238  
|EBITDA                                                   |  |                               | (13,527,138



Results of Operations



Comparison of Twelve Months Ended June 30, 2014 to Twelve
Months Ended June 30, 2013 for continuing operations



MOKO earned total revenue for the year
ended June 30, 2014 of A$8,228,151 ($7,756,678) versus A$15,149,480 in the prior year ended June 30, 2013 and the comparative year
included A$9,128,887 from discontinued operations which related to the Mobile Content business segment. The fiscal 2014 revenues
from continuing operations increased by 37% to A$8,228,151 ($7,756,678) (fiscal 2013: A$6,020,593). The loss for the fiscal 2014
year was A$13,596,459 ($12,817,382) compared with a fiscal 2013 loss of A$6,278,079 and the comparative year included a loss of
A$1,566,785 from discontinued operations. The fiscal 2014 loss from continuing operations increased by 189% to A$13,596,459 ($12,817,382)
(fiscal 2013: A$4,711,294).



MOKO’s net asset position at June 30,
2014 was A$11,616,698, ($10,951,061) an increase of 304.3% over the prior year, at A$2,873,372 and largely reflecting the increased
cash and equivalent assets, due to proceeds from sales of our stock, of A$9,878,011 up from A$2,519,186.



Revenue



|Twelve Months 
Ended June 30, 2014 |           |  | Twelve Months Ended 
June 30, 2013 |    |           | Increase (Decrease) |  |    | % Change  | 
|---------------------------------- | --------- |  | ---------------------------------- | -- | --------- | ------------------- |  | -- | --------- | 
|A$                                 | 8,228,151 |  |                                    | A$ | 6,020,593 |                     |  | A$ | 2,207,558 | 



For fiscal 2014, revenue from continuing
operations was represented by Mobile Social of A$882,393 ($831,832), Mobile Content of (A$30,945) ($(29,172), Mobile Advertising
of A$3,102,132 ($2,924,380) and Mobile Commerce of A$4,274,571 ($4,029,638).



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Mobile Social decreased its revenue to
A$882,393 ($831,832) (fiscal 2013: A$1,251,864) given its decreasing focus within our activities and the continuation of divesting
of products and services within this operating segment during the year, including the sale of mBuzzy, which was sold in August
2013. Ongoing revenues are earned within this segment from our MOKO-CHAT product in Australia.



The Mobile Content segment did not operate
during the period, although a minor negative revenue adjustment of (A$30,945) ($(29,172) was recognised after the sale and cessation
of MOKO’s U.K. operations in the fourth quarter of fiscal 2013 (fiscal 2013: A$368,118). There are presently no active plans
to re-activate this operating segment.



Mobile Commerce became active on July 1,
2013 when MOKO completed a business combination by acquiring a controlling 51% share interest in a Sydney based e-commerce business,
Deals I Love (Australia) Pty Ltd (“DIL”) for the purpose of expanding into the growing mobile commerce sector. This
acquisition represents the Mobile Commerce segment. During the fiscal year, DIL contributed consolidated revenue of A$4,274,571
($4,029,638) (fiscal 2013: nil). The second half of fiscal 2014 underperformed the first half due to seasonality fluctuations and
challenging competitive conditions.



Mobile Advertising revenue for the fiscal
2014 was A$3,102,132 ($2,924,380) (fiscal 2013: A$4,400,611). The decrease reflected dampening market conditions for the historical
business activities of OfferMobi (OM) and a re-positioning by the Board to focus OM as a service provider to customized mobile
social advertising projects such as REC*IT, Run-Haven and Blue Nation Review, which are on the cusp of being monetised. Pleasingly,
the second half of the fiscal year outperformed the first half as a result of new management and a renewed business model.



We expect consolidated revenues to increase
upon commercialization of the customized mobile social advertising projects such as REC*IT, RunHaven and Blue Nation Review towards
the end of calendar 2014 and into early 2015, but because these projects are not yet commercialized there remains a material uncertainty
over this expectation.



Other income and revenue



|Twelve Months 
Ended June 30, 2014 |         |  | Twelve Months Ended June 30, 2013 |    |       | Increase (Decrease) |  |    | % Change | 
|---------------------------------- | ------- |  | --------------------------------- | -- | ----- | ------------------- |  | -- | -------- | 
|A$                                 | 386,998 |  |                                   | A$ | 8,813 |                     |  | A$ | 378,185  | 



For fiscal 2014, Other income and revenue
comprises $172,655 ($162,762) of government grant revenue for Mobile Social (fiscal 2013: nil), $109,493 ($103,219) proceeds and
gain from the sale of a Mobile Social business, mBuzzy in August 2013 (fiscal 2013: nil), and interest income of $104,850 ($98,842)
(fiscal 2013: $8,813) which reflects higher average cash and cash equivalent balances held during the year.



Fair value gained on deferred contingent consideration



|Twelve Months 
Ended June 30, 2014 |         |  | Twelve Months Ended June 30, 2013 |    |           | Increase (Decrease) |  |    | % Change    | 
|---------------------------------- | ------- |  | --------------------------------- | -- | --------- | ------------------- |  | -- | ----------- | 
|A$                                 | 383,933 |  |                                   | A$ | 1,829,653 |                     |  | A$ | (1,445,720) | 



For fiscal 2014, the fair value gain on
deferred contingent consideration of A$383,933 ($361,934) is the reversal, due to early settlement in October 2013 of previously
recognised deferred contingent consideration payable to Howmark Mobile, LLC (‘Howmark’) shareholders in relation to
the August 2012 acquisition of the Mobile Advertising business, OfferMobi. For 2013, this comprised the reversal of previously
recognised deferred contingent acquisition consideration payable as a result of being unearned. For OfferMobi, A$1,123,843 was
unearned consideration which resulted from certain financial performance results in fiscal 2013 being less than required maximum
hurdle rates; and for All Night Media Limited (Mobile Content), A$631,572 deferred contingent consideration was cancelled and A$74,238
initial consideration was reimbursed as a result of a post-acquisition agreement with the seller.



Expenses



|Twelve Months 
Ended June 30, 2014 |            |  | Twelve Months Ended June 30, 2013 |    |            | Increase (Decrease) |  |    | % Change   | 
|---------------------------------- | ---------- |  | --------------------------------- | -- | ---------- | ------------------- |  | -- | ---------- | 
|A$                                 | 23,649,446 |  |                                   | A$ | 13,560,947 |                     |  | A$ | 10,088,499 | 



Expenses are classified, discussed and
analysed below in four sections as (i) costs of providing goods and services,

(ii) selling, general and administrative
expenses, (iii) depreciation and amortisation, and (iv) impairment of goodwill.



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Costs of providing goods and services



|Twelve Months 
    Ended June 30, 2014 |           |  | Twelve Months Ended June 30, 2013 |    |           | Increase (Decrease) |  |    | % Change  | 
|-------------------------------------- | --------- |  | --------------------------------- | -- | --------- | ------------------- |  | -- | --------- | 
|A$                                     | 6,536,820 |  |                                   | A$ | 4,330,167 |                     |  | A$ | 2,206,653 | 



For fiscal 2014, costs of providing goods
and services related to the operating segments of Mobile Social of A$403,260 ($380,153) (2013:A$578,571), Mobile Content of (A$24,974)
($(23,543)) (2013:A$321,046), Mobile Commerce of A$3,092,258 ($2,915,072) (fiscal 2013: nil) and Mobile Advertising of A$3,066,276
($2,890,578) (fiscal 2013:A$3,430,550). The movement in costs was commensurate with the movement in revenues for Mobile Social
and Mobile Advertising. Mobile Commerce had no prior comparative costs as it was acquired on July 1, 2013 and Mobile Content was
inactive.



Selling, general and administrative expense



|Twelve Months 
    Ended June 30, 2014 |            |  | Twelve Months Ended June 30, 2013 |    |           | Increase (Decrease) |  |    | % Change  | 
|-------------------------------------- | ---------- |  | --------------------------------- | -- | --------- | ------------------- |  | -- | --------- | 
|A$                                     | 15,888,388 |  |                                   | A$ | 6,676,120 |                     |  | A$ | 9,212,268 | 



For fiscal 2014, MOKO’s selling,
general and administrative expenses increased as a result of a general expansion in MOKO’s business operations within the
Mobile Advertising segment and in the US particularly and the Mobile Commerce segment in Australia as a result of an acquisition.
The corporate expenses of the recent NASDAQ listing and share based payments expense, also contributed.



Particularly large increases in expenses
for fiscal 2014 versus fiscal 2013 were as follows:



—Legal and professional fees: an
increase of A$1,583,476 ($1,492,743) or 96.5% from $1,640,327 in fiscal 2013 to A$3,223,803 ($3,039,079) in fiscal 2014 due primarily
to one-off legal and advisory fees in relation to the NASDAQ offering as well as increased accounting, audit and company secretarial
fees, share registry fees and a general increase in communications, financial and investment community engagement fees (particularly
from within the United States of America).



—Share based payments: an increase
of A$4,710,225 ($4,440,329) or 1,083.5% from A$434,743 in fiscal 2013 to A$5,144,968 ($4,850,161) in fiscal 2014 due principally
to director and American employee and contractor option issuances as a substitute for cash based remuneration.



—Marketing expenses: an increase
of A$988,478 ($931,838) or 308.4% from A$320,481 in fiscal 2013 to A$1,308,959 ($1,233,956) in fiscal 2014 due mostly to the acquisition
of DIL which operated as MOKO’s subsidiary for the whole of fiscal 2014 (fiscal 2013: nil) as well as an increase in Mobile
Advertising User acquisition costs for the customised mobile social advertising business of A$471,691 ($444,663) (fiscal 2013:
nil).



—Administration expenses: an increase
of A$695,010 ($655,186) from A$332,800 in fiscal 2013 to A$1,027,810 ($968,916) in fiscal 2014 mostly due to one-off listing and
printing fees in relation to the NASDAQ offering and a general increase in insurance costs for US coverage.



The largest cash component of selling,
general and administrative expense (employee benefits expenses) increased by A$1,286,074 ($1,212,382) or 51.2% from A$2,510,446
to A$3,796,520 ($3,578,979) in fiscal 2014 due to a large increase in average headcount as a result of the expansion in the Mobile
Advertising segment (and particularly in the US) and the Mobile Commerce business segment, via the DIL acquisition. The employee
benefits expenses incurred in Mobile Social operating segment declined in fiscal 2014 versus fiscal 2013 as there was a higher
segment cost base for part of fiscal 2013 that was subsequently reduced via terminations and re-allocation of remaining costs into
Mobile Advertising.



Depreciation and amortisation



|Twelve Months 
    Ended June 30, 2014 |           |  | Twelve Months Ended June 30, 2013 |    |           | Increase (Decrease) |  |    | % Change | 
|-------------------------------------- | --------- |  | --------------------------------- | -- | --------- | ------------------- |  | -- | -------- | 
|A$                                     | 1,224,238 |  |                                   | A$ | 1,067,523 |                     |  | A$ | 156,715  | 



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Depreciation decreased by A$185,063 ($174,459)
in fiscal 2014 to A$42,475 ($40,024) due to decreased levels of computer equipment depreciation associated particularly with the
mBuzzy disposition. Amortization increased by A$341,778 ($322,194) above the prior year to A$1,181,763 ($1,114,048) due to greater
values of finite life intangible assets being held and periodically amortized as a result of the DIL and OfferMobi acquisitions.



Impairment of goodwill



|Twelve Months  Ended June 30, 2014 |   |  | Twelve Months Ended June 30, 2013 |    |           | Increase (Decrease) |  |    | % Change    | 
|---------------------------------- | - |  | --------------------------------- | -- | --------- | ------------------- |  | -- | ----------- | 
|A$                                 | - |  |                                   | A$ | 1,487,137 |                     |  | A$ | (1,487,137) | 



Impairment of goodwill for fiscal 2014
was nil and for fiscal 2013 was A$1,487,137 which related to the write-down of the previously unrecoverable carrying value of assets
for mBuzzy of A$772,675 (which has been subsequently disposed) and All Night Media Limited of A$714,462 after the business reflected
post-acquisition underperformance and was legally claimed on by MOKO’s against the seller before being closed down.



Income tax benefit



|Twelve Months  Ended June 30, 2014 |           |  | Twelve Months Ended June 30, 2013 |    |         | Increase (Decrease) |  |    | % Change | 
|---------------------------------- | --------- |  | --------------------------------- | -- | ------- | ------------------- |  | -- | -------- | 
|A$                                 | 1,053,905 |  |                                   | A$ | 990,594 |                     |  | A$ | 63,311   | 



For fiscal 2014, the income tax benefit
from continued operations increased by A$63,311 ($59,683) above fiscal 2013 to A$1,053,905 ($993,516) as a result of the increase
in MOKO’s Research and Development tax offset (cash rebate) received from the Australian Taxation Office from A$1,082,953
($1,020,890) in fiscal 2014 versus A$1,008,231 in fiscal 2013 and a small offsetting current tax expense of A$29,048 ($27,384)
in fiscal 2014, versus A$17,637 in fiscal 2013 for other US taxes. MOKO has not and does not recognize the carry forward of unused
tax losses and unused tax credits and given it has historically traded unprofitably, it is currently less than probable that future
taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. Subject to continuing
to satisfy AusIndustry and Australian Taxation Office regulations and laws, we currently expect to receive concessional income
tax treatment in the current financial year similar to that which we have had historically.



Comparison of Twelve Months Ended June 30,
2013 to Twelve Months Ended June 30, 2012 for continuing operations



Revenue



|Twelve Months Ended 
June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |           | Increase (Decrease) |  |    | % Change  | 
|---------------------------------- | --------- |  | -------------------------------------- | -- | --------- | ------------------- |  | -- | --------- | 
|A$                                 | 6,020,593 |  |                                        | A$ | 1,722,484 |                     |  | A$ | 4,298,109 | 



For fiscal 2013, revenue from continuing
operations was represented by Mobile Social of A$1,251,864 plus the two additional operating segments of Mobile Advertising and
Mobile Content at A$4,400,611 and A$368,118, respectively.



Mobile Social revenue was derived from
multiple products, brands or services during the 2013 fiscal year across Australia, the U.K. and the United States. This result
represented a 27.3% decline versus the 2012 fiscal year of A$1,722,484. In late 2012, MOKO Social business was sun-set and deprioritized
within the company and several unprofitable products, brands or services were closed.



Given that MOKO stopped several unprofitable
properties late in the 2013 fiscal year and no longer invests in a growth marketing budget, and the human resources and infrastructure
have been re-deployed into Mobile Advertising, the future revenues of Mobile Social will be materially less than those reported
for the 2013 fiscal year and are insignificant to MOKO’s future intentions.



Subsequent to June 30, 2013 reporting
date, mBuzzy, which contributed A$79,757 revenue for the 2013 fiscal year was disposed of and its future revenue will be A$0, representing
a decline of A$79,757 to the 2013 fiscal year. The revenue for the 2012 fiscal year was A$291,264.



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The Mobile Advertising revenue came from
the OfferMobi acquisition made in August 2012 and the Mobile Content revenue from the ANM acquisition done in September 2012.



OfferMobi is a mobile adnetwork working
with performance based advertisers seeking specific audiences for their offers. OfferMobi additionally works with publishers in
identifying the right advertisements/offers for the audience they have. At acquisition, OfferMobi focused pre-dominantly on direct
buying relationships and blind, web based advertising in a host of verticals. Revenues were variable and somewhat high risk.



In MOKO’s first post-acquisition
year of operations with OfferMobi, for the approximately 11 months of operations in 2013 fiscal year, the revenue results were
mixed. During the first half year ended December 31, 2012 and for the approximately five months of trading, the OfferMobi
business reported revenues of A$2,889,815, which exceeded expectations largely due to one, short-lived, extraordinary advertising
account.



During the second half of the 2013 fiscal
year, the mobile advertising market shifted rapidly away from direct buying relationships and into programatic buying (automated
inventory fill by algorithm based platforms) and the businesses underperformed. For the six months ended June 30, 2013, OfferMobi
reported revenues of A$1,510,796.



The ANM business is now ceased and as such,
its future revenue contribution will be A$0 representing a decline to the 2013 fiscal year of A$368,118 .



In the third quarter of 2013, MOKO replaced
the incumbent management with more appropriately skilled personnel to transition the focus and strategy of OfferMobi into:



| | · | monetizing mobile applications and mobile application traffic across a refined vertical set; and
| | - | ------------------------------------------------------------------------------------------------



| | · | positioning the business as a service organization to Customised Mobile Social Advertising projects,
and initially REC*IT.
| | - | --------------------------------------------------------------------------------------------------------------------------



It is expected that the Mobile Advertising
revenue will increase in the second six months ending June 30, 2014 and into the 2015 fiscal year provided REC*IT commercialization
continues as planned, although we cannot determine if or when our Mobile Advertising business will become profitable.



Other income and revenue



|Twelve Months Ended 
    June 30, 2013 |       |  | Twelve Months Ended 
    June 30, 2012 |    |        | Increase (Decrease) |  |    | % Change |  
|-------------------------------------- | ----- |  | -------------------------------------- | -- | ------ | ------------------- |  | -- | -------- | -
|A$                                     | 8,813 |  |                                        | A$ | 62,627 |                     |  | A$ | (53,814  | )



For fiscal 2013, other income and revenue
from continuing operations was composed of interest earned on cash and cash equivalents whereas in fiscal 2012 interest revenue
was higher at A$35,680, reflecting higher average cash and cash equivalent balances during that year, plus A$26,947 in government
grant funding which was not received in fiscal 2013.



Fair value gain on deferred consideration



|Twelve Months Ended
    June 30, 2013 |           |  | Twelve Months Ended
    June 30, 2012 |    |   | Increase (Decrease) |  |    | % Change  | 
|------------------------------------- | --------- |  | ------------------------------------- | -- | - | ------------------- |  | -- | --------- | 
|A$                                    | 1,829,653 |  |                                       | A$ | — |                     |  | A$ | 1,829,653 | 



For fiscal 2013, fair value gain on deferred
consideration was represented by the reversal of previously recognised deferred contingent acquisition consideration payable as
a result of being unearned. For OfferMobi, A$1,123,843 was unearned consideration which resulted from certain financial performance
results in fiscal 2013 being less than required maximum hurdle rates; and for All Night Media Limited, A$631,572 deferred consideration
was cancelled and A$74,238 initial consideration was reimbursed as a result of a post-acquisition agreement with the seller.



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Expenses



|Twelve Months Ended 
    June 30, 2013 |            |  | Twelve Months Ended 
    June 30, 2012 |    |           | Increase (Decrease) |  |    | % Change  | 
|-------------------------------------- | ---------- |  | -------------------------------------- | -- | --------- | ------------------- |  | -- | --------- | 
|A$                                     | 13,560,947 |  |                                        | A$ | 6,234,297 |                     |  | A$ | 7,326,650 | 



Expenses are classified, discussed and
analysed below in four sections as (i) costs of providing services, (ii) selling, general and administrative expenses, (iii) depreciation
and amortisation, and (iv) impairment of goodwill.



Costs of providing services



|Twelve Months Ended 
    June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |         | Increase (Decrease) |  |    | % Change  | 
|-------------------------------------- | --------- |  | -------------------------------------- | -- | ------- | ------------------- |  | -- | --------- | 
|A$                                     | 4,330,167 |  |                                        | A$ | 839,032 |                     |  | A$ | 3,491,135 | 



For fiscal 2013, costs of providing services
related to the operating segments of Mobile Social of A$578,571 plus Mobile Advertising and Mobile Content as a result of acquisitions,
at A$3,430,550 and A$321,046, respectively. In fiscal 2012, costs of providing services related solely to Mobile Social and were
A$839,032.



The decline in Mobile Social costs of providing
services in fiscal 2013 largely reflected the commensurate decline in revenue as noted above, although in fiscal 2013 there was
a minor decrease as a percentage of revenue. The fiscal 2013 costs of providing services in Mobile Advertising and Mobile Content
were A$3,430,550and A$321,046, respectively.



Selling, general and administrative
expense



|Twelve Months Ended 
    June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |           | Increase (Decrease) |  |    | % Change  | 
|-------------------------------------- | --------- |  | -------------------------------------- | -- | --------- | ------------------- |  | -- | --------- | 
|A$                                     | 6,676,120 |  |                                        | A$ | 5,215,832 |                     |  | A$ | 1,460,288 | 



For fiscal 2013, MOKO’s selling,
general and administrative expenses increased as a result of a general expansion in its business operations and commensurate cost
base. Particularly large increases versus the 2012 fiscal year on expense items were as follows:



— Legal and professional
fees:   an increase of A$1,075,413 or 190.4% from A$564,914 in fiscal 2012 to A$1,640,327 in fiscal 2013
due primarily to high levels of legal and corporate advice and fees in relation to business acquisitions, dispositions or terminations,
the establishment and termination of various debt or convertible debt financing transactions such as with Bergen Asset Management
and TCA Funds Management (all facilities subsequently re-paid), increased accounting, audit and company secretarial fees, a large
increase in communications, financial and investment community engagement fees (particularly from within the United States of America),
early stage consultancy fees on establishing REC*IT, as well as preliminary advice relating to corporate considerations and advice
for listing on NASDAQ.



— Share based payments:   an
increase of A$145,330 or 50.2% from A$289,413 in 2012 to A$434,743 in fiscal 2013 due to an increased use of share based remuneration
to directors, employees and suppliers as a substitute for settling the provision of goods or services in cash.



— Exchange loss:   an
increase of A$194,037 or 434.3% from A$44,680 in fiscal 2012 to A$238,717 in fiscal 2013 due to net exchange rate movements
in underlying foreign currency assets and liabilities to the Australian dollar as a result of increased foreign business operations
within MOKO.



— Finance costs:   an
increase of A$210,333 from A$239 in fiscal 2012 to A$210,572 in fiscal 2013 due to the utilization of third party convertible
and revolving note debt facilities from within the Unites States of America (since repaid and extinguished).



The largest component of selling, general
and administrative expense (employee benefits expenses) increased by A$285,545 or 12.8% from A$2,224,901 to A$2,510,446 in 2013
due to an increased average headcount as a result of the



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new business segments, Mobile Advertising
and Mobile Commerce. The employee benefits expenses incurred in Mobile Social operating segment declined in fiscal 2013 due to
project terminations and layoffs.



Depreciation and amortization



|Twelve Months Ended 
    June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |         | Increase (Decrease) |  |    | % Change | 
|-------------------------------------- | --------- |  | -------------------------------------- | -- | ------- | ------------------- |  | -- | -------- | 
|A$                                     | 1,067,523 |  |                                        | A$ | 179,433 |                     |  | A$ | 888,090  | 



Depreciation increased by A$156,104 or
218.5% from A$71,434 in fiscal 2012 to A$227,538 due to increased levels of computer equipment depreciation associated particularly
with mBuzzy acquisition (now disposed). Amortization increased by A$731,986 or 677.8% from A$107,999 in fiscal 2012 to A$839,985
due to greater values of finite life intangible assets being held (and periodically amortized) by MOKO as a result of acquisitions,
particularly that of OfferMobi.



Impairment of goodwill



|Twelve Months Ended 
    June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |   | Increase (Decrease) |  |    | % Change  | 
|-------------------------------------- | --------- |  | -------------------------------------- | -- | - | ------------------- |  | -- | --------- | 
|A$                                     | 1,487,137 |  |                                        | A$ | — |                     |  | A$ | 1,487,137 | 



Impairment of goodwill for fiscal 2013
was A$1,487,137 and for fiscal 2012 was A$0. This expense related to the write-down of the previously unrecoverable carrying value
of assets for mBuzzy of A$772,675 (which has been subsequently disposed) and All Night Media Limited of A$714,462, after the businesses
reflected post-acquisition underperformance, which formed the basis of MOKO’s subsequent claims against the seller and successful
cancellation of all acquisition consideration.



Income tax benefit



|Twelve Months Ended 
    June 30, 2013 |         |  | Twelve Months Ended 
    June 30, 2012 |    |         | Increase (Decrease) |  |    | % Change | 
|-------------------------------------- | ------- |  | -------------------------------------- | -- | ------- | ------------------- |  | -- | -------- | 
|A$                                     | 990,594 |  |                                        | A$ | 565,849 |                     |  | A$ | 424,745  | 



For fiscal 2013, the income tax benefit
from continued operations increased by A$424,745 or 75.1% from A$565,849 in fiscal 2012 to A$990,594 as a result of the increase
in MOKO’s Research and Development tax offset (cash rebate) received from the Australian Taxation Office. The increase primarily
reflected a broadening of the Australian taxation legislation to allow, amongst other items, foreign expenditure claims. MOKO has
not and does not recognize the carry forward of unused tax losses and unused tax credits and given it has historically traded unprofitably,
it is less than probable that future taxable profit will be available against which the unused tax losses and unused tax credits
can be utilized. Subject to continuing to satisfy AusIndustry and Australian Taxation Office regulations and laws, we currently
expect to receive concessional income tax treatment in the current financial year similar to that which we had historically.



Discontinued Operations



MOKO’s Mobile Content segment was
founded in fiscal 2012 within the United Kingdom (UK) and for fiscal 2012 and 2013 the business was significant to MOKO’s
financial results, when the vast majority of financial results came from the AMH Group. Over the second half of fiscal 2013, this
segment experienced an increasingly challenging market environment and was becoming cash flow intensive due to the high up-front
market costs and lower margins with significant competitor activity, which made sustained growth and profitability unlikely. As
a result, the Board resolved to exit the UK and on April 29, 2013 MOKO completed a sale of Antiphony Management Holdings Limited
(AMH) and its operating subsidiaries (the AMH Group).



For the 2013 and 2012 fiscal years, a summary
of the financial performance of the AMH Group which is classified as discontinued operations is as follows:



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Revenue



|Twelve Months Ended 
    June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |            | Increase (Decrease) |  |    | % Change   |  
|-------------------------------------- | --------- |  | -------------------------------------- | -- | ---------- | ------------------- |  | -- | ---------- | -
|A$                                     | 9,128,887 |  |                                        | A$ | 10,909,809 |                     |  | A$ | (1,780,922 | )



(Loss)/profit after income tax expense



|Twelve Months Ended 
    June 30, 2013 |           |  | Twelve Months Ended 
    June 30, 2012 |    |           | Increase (Decrease) |  |    | % Change   |  
|-------------------------------------- | --------- |  | -------------------------------------- | -- | --------- | ------------------- |  | -- | ---------- | -
|A$                                     | (805,765) |  |                                        | A$ | 1,451,091 |                     |  | A$ | (2,256,856 | )



Loss on disposal after income tax expense



|Twelve Months Ended 
    June 30, 2013 |         |  | Twelve Months Ended 
    June 30, 2012 |    |   | Increase (Decrease) |  |    | % Change | 
|-------------------------------------- | ------- |  | -------------------------------------- | -- | - | ------------------- |  | -- | -------- | 
|A$                                     | 761,020 |  |                                        | A$ | - |                     |  | A$ | 761,020  | 



Additional information on the discontinuation and disposal of
the AMH Group is disclosed at note 33 to our consolidated financial statements beginning on page F-1.



Liquidity and Financial Position



At June 30, 2014, MOKO’s
cash and cash equivalents (“cash”) was A$9,878,011 ($9,312,001) (June 30, 2013: A$2,519,186) and the net assets were
A$11,616,698 ($10,951,061) (June 30, 2013: A$2,873,372). Working capital (defined as current assets less current liabilities) increased
to A$7,523,168 ($7,092,090) (June 30, 2013: (A$1,563,634)) and pertained largely to the increase in balance date cash and to a
lesser extent, lower current liabilities.



The operating cash outflow for the year
increased by 300% to A$7,067,727 ($6,662,746) (fiscal 2013: A$1,768,876) reflecting the increased losses. Investing cash outflows
decreased by 61% to A$699,506 ($659,424) (fiscal 2013: A$1,785,110) due primarily to reduced payments for the acquisition of the
OfferMobi business in this year, compared to fiscal 2013. The financing cash inflows increased by 237% to A$15,151,403 ($14,283,228)
(fiscal 2013: A$4,496,858) courtesy of net share issue proceeds of A$16,269,600 ($15,337,352) (fiscal 2013: A$3,227,293) and net
debt repayment of A$1,118,197 ($1,054,124) (fiscal 2013: net debt proceeds of A$1,269,565).



In addition, as part of its U.S. Initial
Public Offering (“U.S. IPO”), on June 27, 2014, MOKO listed 1,100,000 American Depositary Shares on NASDAQ. The public
offering price was $7.50 per ADS, representing a total amount raised of $8,250,000 before underwriting commissions and transaction
costs. The cash proceeds from the U.S. IPO was received subsequent to year end and does not form part of the cash, net asset or
working capital figures noted above.



Our cash and cash equivalents at June 30,
2014 were held for working capital purposes. We do not enter investments for trading or speculative purposes. Accordingly, our
cash and cash equivalents are primarily invested in demand deposit accounts with high-grade financial institutions and currently
provide only minimal returns.



Outlook



The results of the revised strategy implementation
for Mobile Advertising are not yet reflected in MOKO’s operating results or cash flows and these are expected to formulate
during the latter part of calendar 2014 year and more fully into 2015.



Sources of Liquidity



To date, we have funded our operations
principally through:



| | · | an initial public offering in Australia on the ASX;
| | - | ---------------------------------------------------



| | · | private placements or rights issues of our fully paid ordinary shares;
| | - | ----------------------------------------------------------------------



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| | · | issuing equity-linked securities such as convertible notes;
| | - | -----------------------------------------------------------



| | · | taking unsecured loans including from related parties;
| | - | ------------------------------------------------------



| | · | having a revolving credit facility for our U.S. operations; and
| | - | ---------------------------------------------------------------



| | · | an initial public offering in United States of America on NASDAQ.
| | - | -----------------------------------------------------------------



We have also benefited to a limited extent
from the exercise of share options although we expect to do more in the future, as such securities are exercised by holders.



Since our inception and to June 30, 2014
we have raised a total of A$41.7 million ($39.3 million), net of costs and expenses, from the issuance of fully paid ordinary shares
through an initial public offering in Australia and numerous subsequent private placements or rights issues.



As of June 30, 2014 our consolidated cash
and cash equivalents were A$9,878,011 ($9,312,001).



Additionally, subsequent to June 30, 2014,
we received gross financing proceeds of $8,250,000 (before underwriting expenses and transaction costs) on July 1, 2014 from the
initial public offering in United States of America on NASDAQ.



We currently hold no outstanding debt having
repaid a previously outstanding $850,000 revolving credit facility in July 2013. At June 30, 2014 MOKO’s significant
non-cancellable forward commitments relate only to operating lease payments, and total $570,079 which are payable as $228,513 within
one year and $341,566 within one year and five years.



Our existing cash and cash equivalents
combined with the post balance date inflow from the financial settlement of the initial public offering in United States of America
on NASDAQ, are expected to provide sufficient working capital for MOKO for the next twelve months, which we expect will enable
MOKO to execute its Customised Mobile Social Advertising strategy and move to profitable and positive cash flow generating operations.
However, in the event of delays or the eventuality of other business risks that adversely affect the results from future operations,
we are confident that MOKO would be able to raise new equity or debt funding, similar to the ways in which it has previously done
so.



Operating and capital expenditure requirements



Our future working capital requirements
will depend on many factors, including the rate at which new projects are activated, and the commercialization and monetization
success of existing projects within the Customized Mobile Social Advertising strategy. The corresponding amount and timing of our
investments in personnel, operating infrastructure and capital equipment as well as the timing and extent of our introduction of
new products and product enhancements will further vary our working capital requirements. If our cash and cash equivalents balances
and cash flows from operating activities are insufficient to satisfy our liquidity requirements, we may need to raise additional
funds through equity, equity-linked or debt financings to support our operations, and such financings may not be available to us
on acceptable terms, or at all. We may also need to raise additional funds in the event we determine in the future to effect one
or more acquisitions of businesses, technologies, assets or products. If we are unable to raise additional funds when needed, our
operations and ability to execute our business strategy could be adversely affected. If we raise additional funds through the incurrence
of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants
that restrict our operations. Any additional equity financing will be dilutive to our shareholders.



Historical cash flows



The following table sets forth our cash
flows for fiscal 2014, 2013 and 2012:



|                                                  |  | Year
    ended June 30 |           
|------------------------------------------------- |  | ---------------------- | ----------
|                                                  |  | 2014                   |           
|Cash flows used in operating activities           |  | A$                     | (7,067,727
|Cash (used in) / provided by investing activities |  | A$                     | (699,506  
|Cash provided by financing activities             |  | A$                     | 15,151,403



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Cash Flows from Operating Activities



Cash flows used in operating activities
is primarily influenced by the number of customers or users engaging with our products or services and by the amount of cash we
invest in pursuit of growth, personnel and infrastructure to support the anticipated growth of our business. Cash used in operating
activities has typically resulted from net losses and from changes in our operating assets and liabilities, particularly in the
areas of accounts receivable and accounts payable and accrued expenses, adjusted for non-cash and non-operating expense items such
as depreciation and amortization, goodwill impairment, gains or losses on acquisitions and disposals and share-based compensation.



In fiscal 2014, net cash used in operating
activities was A$(7,067,727) ($(6,662,746)) and consisted of a net loss of A$(13,596,459) ($(12,817,382)), A$5,926,031 ($5,586,469)
in adjustments for non-cash and non-operating items, a disposal gain of A$109,493 ($103,219) on the sale of the mBuzzy business
and A$712,194 ($671,385) provided by working capital. Adjustments for non-cash and non-operating items consisted of depreciation
and amortization expense of A$1,224,238 ($1,154,089), share-based payments and related costs expense of A$5,144,969 ($4,850,162),
a partial offset for non-cash revenue items of A$475,460 ($448,216), which were predominantly fair value gains on deferred acquisition
consideration where a liability value that was previously recognized was no longer required, and foreign exchange differences of
A$32,284 ($30,434). The working capital cash provided was primarily the result of an increase in payables and provisions of A$1,395,046
($1,315,110), and an increase in receivables and other assets of A$682,852 ($643,725).



In the twelve months ended June 30, 2013,
net cash used in operating activities was A$1,768,876 and consisted of a net loss of A$6,278,079 , A$4,624,572 in adjustments for
non-cash and non-operating expense items, which was partially offset by adjustment for a non-cash revenue item of A$1,829,653 and
A$1,714,284 of cash provided by working capital. Adjustments for non-cash and non-operating items primarily consisted of depreciation
and amortization expense of A$1,161,869 , goodwill impairment of A$1,487,137 , share-based payments and related costs expense of
A$434,743, a loss on disposal of discontinued operations of A$761,020 and foreign exchange differences of A$586,125. The non-cash
revenue item represented a fair value gain on deferred acquisition consideration where a liability value no longer required has
been previously recognized. The working capital cash provided was largely the result of a decrease in trade and other receivables
of A$2,119,368 which was partially offset by a decrease in payables of A$590,960.



The trend for MOKO to have a net use of
cash as a result of its operating activities is expected to remain and may increase while the Company pursues the goals of its
Customised Mobile Social Advertising business plan. In the short term, it is expected to be necessary to increase project expenditures
on technical development resources and sales and marketing resources particularly, which will result in larger operating cash outflows.
In addition, customer receipts may trail the expenditure outflows for the development and implementation of the mobile community
project applications (which MOKO typically expects to provide for free to its community partners) by periods of between six to
twelve months, and this may result in future operating cash flow usage being larger than historical results.



Furthermore, given the realization of customer
receipts will reflect MOKO’s successes across multiple business risks in the new business stream of Customised Mobile Social
Advertising, the historical results may not reflect future outcomes. Receipts from customers may differ adversely to the historical
results and anticipated outcomes, which may further increase the size of operating cash flow usage.



Cash Flows from Investing Activities



In the twelve months ended June 30,
2014, net cash used in investing activities was A$699,506 ($659,424) and consisted of payments for the deferred consideration for
the acquisition of the OfferMobi business of A$406,997 ($383,676), payments for disposal of the AMH Group of A$339,996 ($320,514),
payments for property, plant and equipment of A$62,006 ($58,453) and a partial offset from proceeds received via the sale of mBuzzy,
of A$109,493 ($103,219).



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In the twelve months ended June 30, 2013,
net cash used in investing activities was A$1,785,110 and consisted of payments for the acquisition of OfferMobi of A$1,444,760
which net of cash acquired for the acquisition of OfferMobi and All Night Media Limited was A$1,352,620 , and the disposal of the
operating entities of the Paper Tree Limited group of A$342,636 . Purchases of property, plant and equipment was A$89,854 and historically
has not formed a major component of investing cash outflows.



Historically, given the high rate of internal
asset generation, investing expenditures on assets has been relatively low, other than by acquisition. This trend may discontinue
as MOKO’s customized mobile social advertising business plan gains traction as increased headcount and volumes of data under
management are expected to mandate larger capital investment expenditures, particularly on information technology infrastructure.



Conversely, where historically investing
activity expenditures for acquisition consideration has been relatively high, this trend may discontinue if no new acquisition
activity is undertaken by MOKO as a result of focusing the available cash and cash equivalent resources on the intended execution
of the customized mobile social advertising business plan.



Cash Flows from Financing Activities



Our financing activities have consisted
primarily of the issuance of fully paid ordinary shares and for the fiscal year ended June 30, 2014 included repayment of
a revolving note debt facility.



In fiscal 2014, net cash provided by financing
activities was A$15,151,403 ($14,283,228) represented by net proceeds from the issue of ordinary shares of A$16,269,600 ($15,337,352)
and net debt repayments of A$1,118,197 ($1,054,124).



For clarity, the cash proceeds from our
U.S. Initial Public Offering (“U.S. IPO”), on June 27, 2014 when we listed 1,100,000 American Depositary Shares on
NASDAQ, at a public offering price of $7.50 per ADS for a total amount raised of $8,250,000 before underwriting commissions and
transaction costs, were received subsequent to the fiscal year ended June 30, 2014.



In fiscal 2013, net cash provided by financing
activities was A$4,496,858 represented by net proceeds from the issue of ordinary shares of A$3,227,293 and proceeds from borrowings
of A$1,269,565 (which has been fully repaid subsequent to the statement of financial position date).



Contractual Obligations



As of June 30, 2014, our contractual
obligations and other commitments were as follows:



|                |  | Payments due by period |        
|--------------- |  | ---------------------- | -------
|                |  | Total                  |        
|Premises leases |  | A$                     | 603,941



Effects of Inflation



Inflation generally affects us by increasing
costs of raw materials, labor and equipment. We do not believe that inflation had any material effect on our results of operations
in the periods presented in our financial statements.



Critical Accounting Estimates and Judgments



Our consolidated financial statements are
prepared in accordance with IFRS. The preparation of our consolidated financial statements requires us to make estimates, assumptions
and judgments that affect the reported amounts of revenue, assets, liabilities, costs and expenses. We base our estimates and assumptions
on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates
and assumptions on an ongoing basis. Our actual results may differ from these estimates.
Our most critical accounting policies are summarized below. See note 1 to our consolidated financial statements beginning on page
F-1 for a description of our other significant accounting policies.



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Share-based payment transactions



We measure the cost of equity-settled transactions
with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on
the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.



Provision for impairment of receivables



The provision for impairment of receivables
assessment requires a degree of estimation and judgment. The level of provision is assessed by taking into account the recent sales
experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtor’s financial
position.



Fair value and hierarchy of financial
instruments



We are required to classify financial instruments,
measured at fair value, using a three level hierarchy, being:



Level 1:   Quoted prices
(unadjusted) in active markets for identical assets or liabilities;



Level 2:   Inputs other
than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices); and



Level 3:   Inputs for the
asset or liability that are not based on observable market data (unobservable inputs).



An instrument is required to be classified
in its entirety on the basis of the lowest level of valuation inputs that is significant to fair value. Considerable judgment is
required to determine what is significant to fair value and therefore which category the financial instrument is placed in can
be subjective.



The fair value of financial instruments
classified as level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the use of observable
inputs that require significant adjustments based on unobservable inputs.



Estimation of useful lives of assets



We determine the estimated useful lives
and related depreciation and amortization charges for our property, plant and equipment and finite life intangible assets. The
useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortization
charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic
assets that have been abandoned or sold will be written off or written down.



Goodwill and other indefinite life intangible
assets



We test annually, or more frequently if
events or changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible assets have suffered
any impairment, in accordance with the accounting policy stated in note 1 to our consolidated financial statements beginning on
page F-1. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations
require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the
estimated future cash flows. All cash generating units have been deemed recoverable and not at risk.



Long service leave provision



As discussed in note 1 to our consolidated
financial statements beginning on page F-1, the liability for long service leave is recognized and measured at the present value
of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the
present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken
into account.



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Business combinations



As discussed in note 1 to our consolidated
financial statements beginning on page F-1, business combinations are initially accounted for on a provisional basis. The fair
value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the consolidated entity taking
into consideration all available information at the reporting date. Fair value adjustments on the finalization of the business
combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the
assets and liabilities, depreciation and amortization reported.



Recent Accounting Pronouncements



As discussed in Note 1 to our consolidated
financial statements beginning on page F-1, the financial statements included in this prospectus have been prepared in accordance
with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”)
and the Corporations Act 2001, as appropriate for-profit oriented entities. These financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”).



The following accounting standards and
interpretations are applicable for the first time for the fiscal year ended June 30, 2014 and are not expected to have any
significant impact on changes to existing accounting policies.



|AustralianAccountingStandardNumber |  | Title                                                                                                                                                                                                                                   |  | Issue Date |  | Operative Date(AnnualReportingPeriods beginningon or after)
|---------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- |  | -----------------------------------------------------------
|10                                 |  | Consolidated Financial Statements                                                                                                                                                                                                       |  | Aug 2011   |  | 1 July 2013                                                
|12                                 |  | Disclosure of Interests in Other Entities                                                                                                                                                                                               |  | Aug 2011   |  | 1 July 2013                                                
|13                                 |  | Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13                                                                                                                               |  | Sep 2011   |  | 1 July 2013                                                
|119                                |  | Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011)                                                                                                |  | Sep 2011   |  | 1 July 2013                                                
|127                                |  | Separate Financial Statements (Revised), AASB 128 Investments in Associates and Joint Ventures (Reissued) and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards |  | Aug 2011   |  | 1 July 2013                                                
|2011-4                             |  | Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirement                                                                                                                      |  | Jul 2011   |  | 1 July 2013                                                
|2011-9                             |  | Amendments to Australian Accounting Standards —  Presentation of Items of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049]                                                                     |  | Sep 2011   |  | 1 July 2013                                                
|2012-2                             |  | Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets and Financial Liabilities                                                                                                                     |  | Jun 2012   |  | 1 July 2013                                                
|2012-5                             |  | Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle [AASB 1, AASB 101, AASB 2010-7, AASB 2011-7, AASB 2011-8]                                                                                |  | Jun 2012   |  | 1 July 2013                                                
|2012-10                            |  | Amendments to Australian Accounting Standards - Transition Guidance and Other Amendments                                                                                                                                                |  | Dec 2012   |  | 1 July 2013                                                



The following accounting standards and
interpretations have been issued but are not yet effective and are not expected to have any significant impact on changes to existing
accounting policies.



43


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|AustralianAccountingStandard
Number |  | Title                                                                                                        |  | Issue 
Date |  | Operative Date(AnnualReportingPeriods beginningon or after)
|----------------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----------- |  | -----------------------------------------------------------
|9                                   |  | Financial Instruments                                                                                        |  | Dec 2010    |  | 1 Jan 2017                                                 
|2012-3                              |  | Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities        |  | Jun 2012    |  | 1 Jan 2014                                                 
|2013-3                              |  | Amendments to AASB 136 — recoverable Amount Disclosures for Non-Financial Assets                             |  | Jun 2013    |  | 1 Jan 2014                                                 
|2013-4                              |  | Amendments to Australian Accounting Standards - Novation of Derivatives and Continuation of Hedge Accounting |  | Jul 2013    |  | 1 Jan 2014                                                 
|2013-5                              |  | Amendments to Australian Accounting Standards - Investment Entities                                          |  | Aug 2013    |  | 1 Jan 2014                                                 



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A.  Directors and senior management



The following discussion sets forth information
regarding our directors and executive officers as of October 15, 2014. Our board of directors is comprised of only one class. All
of the directors will serve until the next annual meeting of shareholders at which they are required to submit for re-election
in accordance with the terms of our Constitution and the applicable provisions of the Corporations Act, or until their earlier
death, retirement, resignation or removal. Provided below is a brief description of our directors’ and executive officers’
business experience during the past five years.



|Name             |  | Age |  | Position                                         
|---------------- |  | --- |  | -------------------------------------------------
|Greg McCann      |  | 61  |  | Non-Executive Chairman                           
|                 |  |     |  |                                                  
|Ian Rodwell      |  | 52  |  | Chief Executive Officer and Managing Director    
|                 |  |     |  |                                                  
|Johannes De Back |  | 45  |  | Non-Executive Director                           
|                 |  |     |  |                                                  
|Peter Yates      |  | 54  |  | Non-Executive Director                           
|                 |  |     |  |                                                  
|Mark Hauser      |  | 56  |  | Non-Executive Director (joined 1st February 2014)
|                 |  |     |  |                                                  
|Andrew Bursill   |  | 43  |  | Company Secretary                                



Mr McCann is currently the Managing Director
and principal of the Excentor Group of companies, an independent software and consulting services supplier to the Asia Pacific
region. Greg was previously a partner with Deloitte for 24 years and has held a number of senior leadership roles, including Managing
Director for Deloitte Consulting/ICS in Australia, a systems integrator specialising in the implementation of enterprise applications.
Mr McCann is also Chairman of Tel.Pacific Limited, former Chairman of NBN Tasmania Limited, and on the Board of the law firm, Lander
and Rogers. He is a fellow of the Institute of Chartered Accountants in Australia and a Fellow of the Australian Institute of Company
Directors.



Mr Rodwell is the founder of MOKO Social
Media. He has over 23 years of experience in corporate and consumer design and multimedia and has owned and operated several businesses
specialising in this field. He has worked in Australia, Singapore, UK and the US, managing projects for many international companies
including McKinsey, BMW, UniLever, and MTV. In the consumer area, Mr Rodwell led projects for several of the world’s biggest
names in sport including Manchester United FC; The All Blacks; Adidas; and several top tennis stars such as Anna Kournikova and
Lleyton Hewitt. His role includes the oversight of all MOKO’s strategic planning and product development.



Mr De Back was formerly the CEO of Cliq
Digital and co-founder and CEO of Triscreen Media Group, managing a number of companies providing interactive media solutions.
Mr De Back previously worked as a lawyer for several international firms, specialising in mergers and acquisitions with a focus
on telecom, media and entertainment. In 1999 he co-founded Telitas Benelux, one of the
first and most successful mobile content providers in Europe. In 2002 Telitas was sold to Index for €50 million, and Johannes
went on to form the Triscreen Media Group, which has built six offices worldwide with activity in over 35 countries. In 2010, Triscreen
Media merged with Blinck International B.V. to form Cliq Digital.



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Peter is Deputy Chairman of The Myer Family
Investments Pty Ltd, a Director of AIA Australia Limited and MOKO.mobi. He is Chairman of the Royal Institution of Australia,
the Australian Science Media Centre, the Faculty of Business and Economics at Melbourne University, the Royal Children’s
Hospital Foundation and the Shared Value Project and Deputy Chairman of Asialink. Peter is a Director of the Royal Children’s
Hospital, the Centre of Excellence for Quantum Computation and Communication Technology and the Centre for Independent Studies.
From 2004-2007 Peter was Managing Director of Oceania Capital Partners and held the position of Chief Executive Officer of Publishing
and Broadcasting Limited from 2001-2004. Until 2001 he worked in the Investment Banking industry including 15 years with Macquarie
Bank. He holds a Doctorate of the University from Murdoch University, a Masters degree from Stanford University Graduate School
of Business and a Commerce degree from Melbourne. He speaks Japanese, having studied at Keio University in Tokyo. Peter has been
a director of Publishing and Broadcasting, Crown Ltd, Foxtel Ltd, The Nine Network, Ninemsn, ticketek, Veda Ltd, Oceania Capital
Partners Ltd, the National Portrait Gallery, The Melbourne International Arts Festival, the Australian Chamber Orchestra and the
Australia-Japan Foundation. In the June 2011 Queen’s Birthday Honours, Peter was awarded a Member of the Order of Australia
for service to education, to the financial services industry and to a range of arts, science and charitable organisations. Peter
has notified  the Company of his retirement by rotation at the Company’s next annual general meeting
of shareholders to be held on November 17, 2014.



Mr. Hauser is a Senior Managing Director
of OFS Management, the manager of OFS Capital Corp., a publicly listed business development company. Mr. Hauser founded and leads
the firm’s small business investment fund which makes loans and structured equity investments to private family businesses.
Mr. Hauser is also the founder and Managing Director of Tamarix Capital Corporation. Tamarix invests in private, family-owned businesses
assisting them in their growth strategies, both in the United States and internationally. Previously, he was a Senior Managing
Director at Sandell Asset Management, a multi-strategy fund where he headed the global private equity business. Prior to Sandell,
Mr. Hauser was a Managing Director at FdG Associates, a private equity fund focused on investing in family-owned businesses. He
has served as an officer and on the boards of directors of numerous public and private companies and he has been a guest speaker
and participated on panels involving global middle-market private equity investing and issues facing family businesses. Mr. Hauser
began his career as a corporate attorney, practicing with Rogers & Wells in New York, Simons & Baffsky in Sydney, and Simmons
& Simmons in London. He holds a Bachelor of Economics Degree and a Bachelor of Law Degree from Sydney University and a Master
of Law Degree from the London School of Economics & Political Science. He has served on the boards of various philanthropic
organizations and is a member of various clubs and societies including Young Presidents Organization/World Presidents Organization
and The Economic Club of New York.



Andrew Bursill has been the Company
Secretary since 2007. Mr. Bursill holds a Bachelor of Agricultural Economics from the University of Sydney and is a Chartered
Accountant, qualifying with PriceWaterhouse (now part of PricewaterhouseCoopers). Since commencing his business of providing outsourced
Chief Financial Officer and Company Secretary services in 1998, Mr. Bursill has acted as CFO, Company Secretary and/or Director
for numerous ASX listed, unlisted public and private companies, in a range of industries covering mineral exploration, oil
and gas exploration, biotechnology, technology, medical devices, retail, venture capital and wine manufacture and distribution.
In addition to his position of Company Secretary at MOKO Social Media Limited, Mr. Bursill is a Director, and Company Secretary
of Argonaut Resources Limited and Tamboran Resources Limited, and is Company Secretary of Aguia Resources Limited, Austral
Gold Limited, Eagle Nickel Limited, Elk Petroleum Limited, and Gladiator Resources Limited, in addition to a number of other
unlisted public and private companies.



B.  Compensation



Employment Agreements



The compensation we paid to all current directors and executive
officers (including the Company Secretary) for the year ended June 30, 2014 was A$3,804,717 ($3,586,707) and on an individual
basis in A$ is set forth in the tables below.



|             |  | SHORT-TERM    |         |  | POST-EMPLOYMENT   |  |        | SHARE-BASED | 
|------------ |  | ------------- | ------- |  | ----------------- |  | ------ | ----------- | 
|Fiscal 2014  |  | Salary & Fees |         |  | Consultancy  Fees |  |        | Bonus       | 
|(A$’s)       |  |               |         |  |                   |  |        |             | 
|G McCann1    |  |               | 91,533  |  |                   |  | —      |             | 
|P Yates      |  |               | 30,000  |  |                   |  | —      |             | 
|J De Back 2  |  |               | 22,500  |  |                   |  | 39,000 |             | 
|M Hauser3    |  |               | 18,094  |  |                   |  | —      |             | 
|I Rodwell 4  |  |               | 300,387 |  |                   |  | —      |             | 
|A W Bursill5 |  |               | —       |  |                   |  | —      |             | 
|TOTAL        |  |               | 462,514 |  |                   |  | 39,000 |             | 



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| | 1. | G McCann’s remuneration was paid in his capacity as a Non-Executive Director and did not change during his temporary
occupation as Executive Chairman in 2014 for the purposes and completion of the NASDAQ listing.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | J De Back, director, is a director of Dutchman Capital who provided
                                         consulting services to MOKO until September 30, 2013. The contract between MOKO
                                         and Dutchman Capital was based on normal commercial terms.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Mark Hauser was appointed as a Non-Executive Director on February 1, 2014 and prior to which, he provided consulting services
to MOKO for two years until January 31, 2014. The consulting contract between MOKO and Mark Hauser was based on normal commercial
terms and this remuneration is not included.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | I Rodwell was paid STI of A$22,883 excluding superannuation in June 2014 upon Rec*IT launch and A$22,884 excluding superannuation
in June 2014 upon NASDAQ listing. In 2013 year, I Rodwell was paid A$49,196 to reduce leave entitlements.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | A W Bursill, company secretary, is an associate of Franks & Associates Pty Ltd who provides Company secretarial services
to MOKO. The contract between MOKO and Franks & Associates is based on normal commercial terms. A total of A$97,793 (2013:
A$49,892) was received by Franks & Associates in relation to this contract for the year.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Share Based Compensation



We use two practices for granting share based compensation to
executive directors, senior executives and employees. Share options (listed and unlisted) to purchase our ordinary shares are issued
periodically at the board’s discretion and Performance Shares may also be issued under a Performance Share Plan.



Option Compensation



As of June 30, 2104, our unissued ordinary shares subject to
options totaled 209,731,886 as follows.



|Class                                            |  | Expiry Date           |  | Exercise Price 
    in A$ |       |  | Number of Options | 
|------------------------------------------------ |  | --------------------- |  | ------------------------- | ----- |  | ----------------- | 
|Unlisted Options                                 |  | 30-Jun-15             |  | $                         | 0.04  |  |                   | 
|Unlisted Options                                 |  | 30-Nov-15             |  | $                         | 0.10  |  |                   | 
|Unlisted Director Options                        |  | 30-Jul-16             |  | $                         | 0.042 |  |                   | 
|Unlisted Employee Options                        |  | 31-Jul-16             |  | $                         | 0.06  |  |                   | 
|Unlisted Employee Options                        |  | 31-Jul-16             |  | $                         | 0.17  |  |                   | 
|Unlisted Options                                 |  | 24-Oct-15             |  | $                         | 0.155 |  |                   | 
|Unlisted Director Options                        |  | 28-Nov-15             |  | $                         | 0.40  |  |                   | 
|Unlisted Director Options                        |  | 28-Nov-15             |  | $                         | 0.10  |  |                   | 
|Unlisted Options                                 |  | 30-Jun-15             |  | $                         | 0.03  |  |                   | 
|Unlisted Options                                 |  | 30-Jun-15             |  | $                         | 0.04  |  |                   | 
|Unlisted Options                                 |  | 30-Jun-15             |  | $                         | 0.02  |  |                   | 
|Unlisted Options                                 |  | 30-Jun-15             |  | $                         | 0.11  |  |                   | 
|Unlisted Options                                 |  | 31-Jan-16             |  | $                         | 0.20  |  |                   | 
|Listed Options (MKBOA)                           |  | 13-Jun-15             |  | $                         | 0.05  |  |                   | 
|Unlisted Options Over American Depositary Shares |  | Refer to table below* |  |                           |       |  |                   | 
|Total                                            |  |                       |  |                           |       |  |                   | 



* Options granted American Depositary Shares (where one ADS
= 40 Ordinary shares)



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|Class                     |  | Expiry Date |  | Exercise Price 
    (per ADS in  US$) |      |  | Number of Options |  |         | Number of Options | 
|------------------------- |  | ----------- |  | ------------------------------------- | ---- |  | ----------------- |  | ------- | ----------------- | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 2.00 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 3.00 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 2.00 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 4.00 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 31-Dec-15   |  | $                                     | 6.00 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 7.50 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 3.70 |  |                   |  | 5,000   |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 1.85 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 31-Dec-15   |  | $                                     | 4.07 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 31-Dec-16   |  | $                                     | 6.28 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 7.50 |  |                   |  | 41,750  |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 6.29 |  |                   |  | 25,000  |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 6.66 |  |                   |  | 2,500   |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 7.50 |  |                   |  | 11,250  |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 6.80 |  |                   |  | 6,250   |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 5.55 |  |                   |  | 7,500   |                   | 
|Unlisted Employee Options |  | 31-Dec-14   |  | $                                     | 5.55 |  |                   |  | 7,500   |                   | 
|Unlisted Employee Options |  | 31-Dec-15   |  | $                                     | 5.55 |  |                   |  | 7,500   |                   | 
|Unlisted Employee Options |  | 30-Jun-16   |  | $                                     | 4.00 |  |                   |  | 25,000  |                   | 
|Total                     |  |             |  |                                       |      |  |                   |  | 364,250 |                   | 



C.  Board Practices



Board Committees and Practices



Our Board has an audit committee and compensation
committee, a copy of the relevant charters of which are available on MOKO’s website.Peter
Yates and Mark Hauser each satisfy the “independence” requirements of the NASDAQ Marketplace Rules and, accordingly
we are currently in compliance with applicable SEC rules as well as the NASDAQ Marketplace Rules in this regard in light of applicable
transition rules applicable to issuers such as MOKO.



Audit Committee



The audit committee
oversees and monitors the company’s accounting and financial reporting processes and the audit and integrity of the Company’s
financial statements.



The audit committee
has had the following three members: Mark Hauser who is the chairman and an independent Non-Executive Director, Peter Yates (non-independent
Non-Executive Director) and Ian Rodwell (CEO and Managing Director). Yates and Hauser satisfies the “independence”
requirements of the NASDAQ Marketplace Rules. The audit committee is responsible for, among other things:



| | · | Selecting the independent auditors and pre-approving all auditing and non-auditing services permitted
to be performed by the independent auditors;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Reviewing and approving all proposed related-party transactions;
| | - | ----------------------------------------------------------------

| | · | Discussing the annual audited financial statements with management and the independent auditors;
| | - | ------------------------------------------------------------------------------------------------

| | · | Reviewing the adequacy and effectiveness of the Company’s internal control policies and procedures;
| | - | ---------------------------------------------------------------------------------------------------

| | · | Reviewing and discuss guidelines and policies with respect to risk assessment and risk management;
| | - | --------------------------------------------------------------------------------------------------

| | · | Annually reviewing and reassessing the adequacy of our audit committee charter;
| | - | -------------------------------------------------------------------------------

| | · | Meeting separately and periodically with management and the independent auditors;
| | - | ---------------------------------------------------------------------------------

| | · | Reviewing such other matters that are specifically delegated to our audit committee by our Board
of Directors from time to time; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | · | Reporting regularly to the full Board of Directors.
| | - | ---------------------------------------------------



Compensation Committee



The compensation (remuneration)
committee assists the Board in reviewing and approving the compensation forms and structure of MOKO’s Directors and officers.



The compensation committee
has had the following three members: chairman Peter Yates (non-independent Non-Executive Director), Greg McCann (non-independent
Non-Executive Director) and Mark Hauser (independent Non-Executive Director). Yates and Hauser satisfies the “independence”
requirements of the NASDAQ Marketplace Rules. Our compensation committee assists our board in reviewing and approving the compensation
structure of our directors and officers, including all forms of compensation to be provided to our directors and officers.



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The compensation committee is responsible
for, among other things:



| | · | Reviewing and determining the compensation package for our senior executives;
| | - | -----------------------------------------------------------------------------

| | · | Reviewing and making recommendations to our board with respect to the compensation of our directors;
| | - | ----------------------------------------------------------------------------------------------------

| | · | Reviewing and approving officer and director indemnification and insurance matters;
| | - | -----------------------------------------------------------------------------------

| | · | Reviewing and approving any employee loan in an amount equal to or greater than $20,000;
| | - | ----------------------------------------------------------------------------------------

| | · | Reviewing periodically and approving any long term incentive compensation or equity plans, and
| | - | ----------------------------------------------------------------------------------------------

| | · | Programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.
| | - | ---------------------------------------------------------------------------------------------



Code of Ethics



We adopted a Code of Business
Conduct and Ethics in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K that constitutes
our code of ethics for our principal executive officer, our principal financial and accounting officer and our other senior financial
officers. The Code of Business Conduct and Ethics is intended to promote honest and ethical conduct, full and accurate reporting,
and compliance with laws as well as other matters. A printed copy of the Code of Business Conduct and Ethics may be obtained free
of charge by writing to Mr. Andrew Bursill, Company Secretary MOKO Social Media Limited, Suite 4, Level 9, 341 George Street, Sydney,
New South Wales, 2000 Australia, and is available on our website.



Duties of Directors



Under Australian law, our
directors have a duty to act honestly, in good faith and in the best interests of all shareholders. Our directors also have a duty
to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling
their fiduciary duty to the shareholders of MOKO, our directors must ensure compliance with our Constitution. MOKO shareholders
may have the right to seek damages from either MOKO, the directors personally, or both, if a duty owed by our directors is breached.



The functions and powers of
our board of directors include, among others:

| | · | appointing officers and determining the term of office of the officers;
| | - | -----------------------------------------------------------------------

| | · | exercising the borrowing powers of the company and mortgaging the property of the company;
| | - | ------------------------------------------------------------------------------------------

| | · | executing checks, promissory notes and other negotiable instruments on behalf of the company;
| | - | ---------------------------------------------------------------------------------------------

| | · | maintaining or registering a register of mortgages, charges or other encumbrances of the company;
and
| | - | -----------------------------------------------------------------------------------------------------

| | · | authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or
associations as deemed advisable.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



Interested Transactions



Provided that a director has
fully disclosed his or her material personal interest to all of our other directors and received the necessary approval or authorization
of the majority of disinterested directors, such director may vote, attend a board meeting or sign a document in respect of any
contract or transaction in which he or she is interested.



Remuneration and Borrowing



The directors may receive
such remuneration as our board of directors may determine from time to time up to the aggregate limit that is approved by shareholders
from time to time. That limit currently is A$250,000, but excludes any remuneration payable to a director who is employed by the
Company in an executive role, such as Mr. Rodwell. In addition, each director is entitled to be repaid or prepaid for all traveling,
hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or
committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties
as a director.



Our board of directors may
exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof,
to issue debentures, debenture shares and other securities whenever money is borrowed or as security for any debt, liability or
obligation of the company or of any third party.



Qualification



A director is not required
to hold shares as a qualification to office.



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Limitation on Liability and Other Indemnification Matters



Under our Constitution, we
may indemnify our directors, officers and liquidators against all expenses, including legal fees, and against all judgments, fines
and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigative proceedings
to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator.
To be entitled to indemnification, these persons must have acted honestly and in good faith with a view to the best interest of
the company and, in the case of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful.



Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.



Following completion of this
offering, we plan to continue to pay our directors annual fees consistent with our existing practise whereby fixed aggregate non-employee
fees are fixed at no more than A$250,000 per annum. We may also from time to time issue options to purchase ordinary shares (or
ADSs as applicable), in amounts and on terms to be determined by our board of directors or a committee thereof.



Other than non-employee directors,
we do not compensate directors for serving on our board of directors or any of its committees. We do, however, intend to reimburse
each member of our board of directors for out-of-pocket expenses incurred by each director in connection with attending meetings
of the board of directors and its committees.



The following table sets forth
the cash compensation for future services expected to be paid to our non-employee directors.



|                                |  | Compensation       
|------------------------------- |  | -------------------
|Annual Stipend                  |  |                    
|Director – (U.S. residents)     |  | $40,000 per annum  
|Director – (non U.S. residents) |  | A$30,000 per annum 
|Chairman                        |  | A$100,000 per annum



D.  Employees



As of the end of June 30, 2014, we had 45
full time equivalent employees, including independent contractors. Our employees are all contracted to us through individual employment
agreements. Management considers labor relations to be good. At each date shown, we had the following employees, broken out by
department and geography:



|                                      |  | At June 30, 
2014 |   
|------------------------------------- |  | ----------------- | --
|Function:                             |  |                   |   
|Technical and product development     |  |                   | 11
|Sales, Marketing and operations       |  |                   | 27
|Corporate, Finance and administration |  |                   | 7 
|Total:                                |  |                   | 45
|Geography:                            |  |                   |   
|Australia                             |  |                   | 19
|United States of America              |  |                   |   
|United Kingdom                        |  |                   | 26
|Total:                                |  |                   | 45



E.  Share Ownership



See Item 6.A and 6.B above.



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ITEM 7. MAJOR SHAREHOLDERS AND RELATED
PARTY TRANSACTIONS



A.  Major shareholders



The following table sets forth information
with respect to the beneficial ownership of the Ordinary Shares as of September 30, 2014 by each person who beneficially owns more
than 5% of Ordinary Shares and each officer, each director and all officers and directors as a group.



Ordinary Shares which an individual or group
has a right to acquire within 60 days pursuant to the exercise or conversion of options, warrants or other similar convertible
or derivative securities are deemed to be outstanding for the purpose of computing the percentage ownership of such individual
or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown
in the table.



The address of each director and executive
officer shown in the table below is Suite 4, Level 9, 341 George Street, Sydney, New South Wales, 2000, Australia.



|Name of Beneficial Owner                                    |  | BeneficialOwnershipof our Ordinary Shares(1) |             |     | Percentage ofClass(1) | 
|----------------------------------------------------------- |  | -------------------------------------------- | ----------- | --- | --------------------- | 
|Greg McCann                                                 |  |                                              | 25,944,444  | (2) |                       | 
|                                                            |  |                                              |             |     |                       | 
|Ian Rodwell                                                 |  |                                              | 16,032,917  | (3) |                       | 
|                                                            |  |                                              |             |     |                       | 
|Johannes De Back                                            |  |                                              | 56,697,710  | (4) |                       | 
|                                                            |  |                                              |             |     |                       | 
|Peter Yates                                                 |  |                                              | 55,327,957  | (5) |                       | 
|                                                            |  |                                              |             |     |                       | 
|Mark Hauser                                                 |  |                                              | 8,000,000   | (6) |                       | 
|                                                            |  |                                              |             |     |                       | 
|Andrew Bursill                                              |  |                                              | 386         |     |                       | 
|                                                            |  |                                              |             |     |                       | 
|All directors and executive officers as a group (6 persons) |  |                                              | 162,003,414 |     |                       | 








|* |  | less than
                                         1%
|- |  | -----------------------------------------------------

|(1) |  | On September 30, 2014, MOKO’s ordinary shares on issue total 600,557,003 and
ordinary shares issuable upon the exercise of outstanding options are 208,027,974.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes 12,500,000 ordinary shares issuable upon the exercise of outstanding options.
Does not include 20,000,000 performance shares issued to Mr. McCann on November 28, 2013 following approval by MOKO’s shareholders
at the annual general meeting held on November 26, 2013 as the performance event has not been met.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes 10,325,000 ordinary shares issuable upon the exercise of outstanding options.
|--- |  | --------------------------------------------------------------------------------------

|(4) |  | Includes 16,400,000 ordinary shares issuable upon the exercise of outstanding options.
|--- |  | --------------------------------------------------------------------------------------

|(5) |  | Includes 7,164,555 ordinary shares issuable upon the exercise of outstanding options.
|--- |  | -------------------------------------------------------------------------------------

|(6) |  | Represents 8,000,000 ordinary shares issuable upon the exercise of outstanding options.
|--- |  | ---------------------------------------------------------------------------------------



B.  Related Party Transactions



We have not during
the most recently completed financial year entered into transactions or loans with any (a) enterprises that are directly or indirectly
controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting right which
give them significant influence over us or close members of their respective families, (d) our directors, senior management or
close members of their respective families or (e) enterprises in which a substantial interest in the voting power is held or significantly
influenced by any of the foregoing individuals (a “Related Party”), except as indicated below:



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Andrew Bursill, Company
secretary, is also an associate of Franks & Associates Pty Ltd, who provides accounting and secretarial services to MOKO. The
contract between MOKO and Franks & Associates is based on standard commercial terms. The Company’s paid an aggregate
of A$97,793 to Franks & Associates for the fiscal 2014.



On August 16,
2012, the Company entered into an agreement with Mr. McCann for up to A$80,000 in funding by issuance of convertible notes. The
convertible notes were to be repayable in full at maturity, being six months from date of issuance. At the discretion of MOKO,
at any time during the term, the convertible notes could be repaid in ordinary shares at an issue price of A$0.04 per share, subject
to shareholder approval. On December 14, 2012, following shareholder approval at MOKO’s annual general meeting, convertible
notes of A$80,000 were repaid by way of issuance of 2,000,000 fully paid ordinary shares.



On December 7,
2012, Messrs. De Back and Yates each subscribed for a twelve month, 10% convertible note in principal amount of A$100,000 which
is convertible at MOKO’s discretion at A$0.04 per share and with 10% additional penalty interest at conversion, subject to
shareholder approval. Mr. Yates was repaid in the form of 2,500,000 fully paid ordinary shares as part of MOKO’s rights issue,
which closed on June 4, 2013. Mr. De Back was paid in the form of 2,500,000 fully paid ordinary shares as part of MOKO’s
rights issue, which closed on September 11, 2013.



On March 5, 2012, Mr.
Hauser was contracted as a strategic and financing corporate consultant to MOKO for a 24 month period from January 1, 2012 through
2014. Under the contract, Mr. Hauser was remunerated with a total of 8,000,000 unlisted options over ordinary MOKO shares, for
services provided and in lieu of retainer fees, priced at the then prevailing share price at the beginning of each quarter. The
estimated fair value of the options received by Mr. Hauser in the 2014 fiscal year was A$99,519.



On May 2, 2013,
Messrs. McCann, De Back and Yates agreed to advance a total of A$265,000 as an interest free unsecured loan to MOKO, with an option
to the loan against future rights issues undertaken by MOKO. On June 4, 2013, following the closing of MOKO’s rights
issue, convertible notes totaling A$165,000 were repaid by way of the issuance of 4,125,000 fully paid ordinary shares and 4,125,000
options exercisable at A$0.05 each on or before June 13, 2015. Mr. De Back’s convertible notes totaling A$100,000 were
repaid by way of the issuance of 2,500,000 fully paid ordinary shares and 2,500,000 options exercisable at A$0.05 each on or before
June 13, 2015.



On July 1, 2013, MOKO
completed the acquisition of a controlling 51% share interest in a Sydney based e-commerce business, Deals I Love (Australia) Pty
Limited (“DIL”). The business combination was made for the purpose of MOKO expanding into the growing mobile commerce
sector. The share acquisition included a purchase of shares from a MOKO non-executive director, Mr. Johannes De Back, who after
the acquisition has no further equity interest in DIL. Acquisition date fair value of total consideration transferred was A$40,000.
The fair value consideration was settled by way of issue of 400,000 options exercisable at $0.10 each on or before November 28,
2015.



Under the terms of
the acquisition, MOKO was also granted an option to acquire the remaining 49% of DIL and as a separate transaction agreed to loan
funds to DIL for marketing purposes, which loan bears interest of 10% per annum and is repayable on arms-length terms. On November
7, 2013, Mr. Johannes De Back executed a personal letter of support to indemnify DIL in respect of its debts to a total liability
value of A$500,000 and which may only be revoked with DIL’s prior written agreement.



During the year ended
June 30, 2014, Mr. De Back provided consulting services to MOKO through Dutchman Capital, of which he is a director, on normal
commercial terms, for which Dutchman Capital was paid $39,000 in fees (2013: $156,045).



| | C. | Interests of Experts and Counsel
| | -- | --------------------------------



Not Applicable.



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ITEM 8. FINANCIAL INFORMATION



A.  Consolidated Statements and Other Financial
Information.



The Company’s
consolidated financial statements are stated in Australian dollars and are prepared in accordance with IFRS.



Audited Financial Statements



Our consolidated financial
statements for the 2014, 2013 and 2012 fiscal years ended June 30th as required under Item 17 are included immediately following
the text of this Annual Report. The audit reports of the Company are included herein immediately preceding the financial statements.



Legal/Arbitration Proceedings



The Directors and the
management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved
as a plaintiff in any material proceeding or pending litigation.



Policy on Dividend Distributions



The Company has not
paid any dividends on its outstanding ordinary shares since its incorporation and does not anticipate that it will do so in the
foreseeable future. The payment of dividends in the future, if any, is within the discretion of the Board of Directors of Dynasty
and will depend upon our earnings, our capital requirements and financial condition and other relevant factors. We do not anticipate
declaring or paying any dividends in the foreseeable future.



|B. | Significant Changes
|-- | -------------------



None.



ITEM 9. THE OFFER AND LISTING



A.  Offer and Listing
Details



Not Applicable.



B.  Plan of Distribution



Not Applicable.



C.  Markets



Our American Depositary Shares are listed
on NASDAQ under the symbol MOKO. The closing price for the ADSs on September 30, 2014 on NASDAQ was $5.85 per ADS.



|                                  |  | High          |      |  | Low |  
|--------------------------------- |  | ------------- | ---- |  | --- | -
|Quarter Ended                     |  | (US$ per ADS) |     
|September 30, 2014                |  | $             | 7.56 |  |     | $
|Month
    Ended                   |  |               |      |  |     |  
|July 2014                         |  | $             | 7.56 |  |     | $
|August 2014                       |  | $             | 7.00 |  |     | $
|September 2014                    |  | $             | 6.25 |  |     | $
|October 2014 (through October 30) |  | $             | 5.85 |  |     | $
|                                  |  |               |      |  |     |  





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The principal trading market for our ordinary
shares is the ASX in Australia, where the ordinary shares have been listed since June 2007. Prior to July 2014, ADSs representing
the ordinary shares traded on the OTCBB in the U.S., although the trading was inactive and illiquid.  The following table
sets forth, for the periods indicated, the reported high and low closing prices on the ASX for our
ordinary shares in Australian dollars. See “Exchange Rate Information” for the exchange rates applicable to the periods
set forth below.



|                   |  | High               |      |  | Low | 
|------------------ |  | ------------------ | ---- |  | --- | 
|Year Ended         |  | (A$
    per share) |     
|June 30, 2010      |  |                    | 0.12 |  |     | 
|June 30, 2011      |  |                    | 0.09 |  |     | 
|June 30, 2012      |  |                    | 0.05 |  |     | 
|June 30, 2013      |  |                    | 0.05 |  |     | 
|Quarter
    Ended  |  |                    |      |  |     | 
|September 30, 2012 |  |                    | 0.04 |  |     | 
|December 31, 2012  |  |                    | 0.03 |  |     | 
|March 31, 2013     |  |                    | 0.05 |  |     | 
|June 30, 2013      |  |                    | 0.04 |  |     | 
|September 30, 2013 |  |                    | 0.13 |  |     | 
|December 31, 2013  |  |                    | 0.31 |  |     | 
|March 31, 2014     |  |                    | 0.33 |  |     | 
|June 30, 2014      |  |                    | 0.25 |  |     | 
|Month
    Ended    |  |                    |      |  |     | 
|January 2014       |  |                    | 0.33 |  |     | 
|February 2014      |  |                    | 0.25 |  |     | 
|March 2014         |  |                    | 0.25 |  |     | 
|April 2014         |  |                    | 0.23 |  |     | 
|May 2014           |  |                    | 0.19 |  |     | 
|June 2014          |  |                    | 0.26 |  |     | 



Status of Outstanding
Ordinary Shares.As of September 30, 2014, we had a total of 600,557,003 Ordinary Shares issued and outstanding.



Options and Warrants.See Item 6.B above.



Holders.Based upon information available
from the ASX, as of September 30, 2014, we had 4,188 holders of record of the ordinary shares, of which 6 had registered addresses
in the U.S. and held a total of 6,458,165 ordinary shares. The principal Melbourne office of National Australia Bank, as custodian,
is the registered holder for the holders of ADSs representing ordinary shares. According to the principal Melbourne office of National
Australia Bank’s registry, there was one registered holder of ADSs representing
12,106,520 ordinary shares as of September 30, 2014. Holders of record of having registered
addresses in the U.S., together with the registered holders of ADSs representing ordinary shares in the principal Melbourne office
of National Australia Bank’s registry, held an aggregate of approximately 3.1%
of the total number of ordinary shares outstanding on such date. The above numbers may not be representative of the actual number
of U.S. beneficial holders or the number of ordinary shares beneficially held by U.S. persons.



D.  Selling Shareholders



Not Applicable.



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E.  Dilution



Not Applicable.



F.  Expenses of the Issue



Not Applicable.



ITEM 10. ADDITIONAL INFORMATION



|A. | Share Capital
|-- | -------------



Not applicable.



B.  Memorandum and Articles of association



The description of certain terms and provisions
of our Constitution is incorporated by reference to our Registration Statement filed on Form F-1 (File No. 333-196073) filed with
the SEC and as declared effective on June 26, 2014.



C.  Material Contracts



During
the fiscal years ended June 30, 2014 and 2013, the Company entered into the material contracts listed below, the material provisions
of which are described under Item 4.B. above:



Letter
of Agreement between American Intramural Sports Group LLC and the Registrant dated March 4, 2013



License
and Services Agreement between IMLeagues LLC and the Registrant dated October 10, 2013



Asset Purchase
Agreement dated August 10, 2012 between Howmark Mobile LLC and the Registrant



Memorandum
dated April 9, 2013, as revised on April 15, 2013



Memorandum
of Confirmation dated October 2013



Second
Memorandum of Confirmation dated November 2013



Clarification
Agreement dated as of April 30, 2014



D.  Exchange controls



Not applicable.



E. Taxation



Australian Tax Consequences



In this section we discuss the material Australian tax considerations
that apply to non-Australian tax residents with respect to the acquisition, ownership and disposal of the absolute beneficial ownership
of ADSs, which are evidenced by ADRs. This discussion is based upon existing Australian tax law as is currently in effect, which
is subject to change, possibly retrospectively. This discussion does not address all aspects of Australian income tax law which
may be important to particular investors in light of their individual investment circumstances, such as ADSs or ordinary shares
held by investors subject to special tax rules (for example, financial institutions, insurance companies or tax exempt organizations).
In addition, this summary does not discuss any foreign or state tax considerations, other than stamp duty. Prospective investors
are urged to consult their tax advisors regarding the Australian and foreign income and other tax considerations of the purchase,
ownership and disposition of our ADSs or ordinary shares.



54


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References to “MOKO” in this section headed “Australian
Tax Consequences” refer to MOKO Social Media Limited.



Nature of ADSs for Australian Taxation Purposes



Holders of our ADSs are treated as the owners of the underlying
ordinary shares for Australian income tax and capital gains tax purposes. Therefore, dividends paid on the underlying ordinary
shares will be treated for Australian tax purposes as if they were paid directly to the owners of ADSs, and the disposal of ADSs
will be treated for Australian tax purposes as the disposal of the underlying ordinary shares. In the following analysis we discuss
the application of the Australian income tax and capital gains tax rules to non-Australian resident holders of ADSs.



Taxation of Dividends



Australia operates a dividend imputation system under which
dividends may be declared to be ‘franked’ to the extent of tax already paid on company profits. Fully franked dividends
are not subject to dividend withholding tax. Dividends that are not franked or are partly franked and are paid to non-Australian
resident shareholders may (subject to the relevant tax treaties — see below) be subject to dividend withholding tax, but
only to the extent the dividends are not franked. Unfranked dividends paid to a non-Australian shareholder are subject to withholding
tax at 30%, unless the shareholder is a resident of a country with which Australia has a double taxation agreement. In accordance
with the provisions of the Double Taxation Convention between Australia and the United States, the maximum rate of Australian
tax on unfranked dividends to which a resident of the United States is beneficially entitled, is 15%, where the U.S. resident
is not a company or holds less than 10% of the voting rights in the applicable company, or 5% where the U.S. resident is a company
and holds 10% or more of the voting rights in the applicable company. The Double Taxation Convention between Australia and the
United States does not apply to limit the tax rate on dividends where our ADSs are effectively connected to a permanent establishment
or a fixed base carried on by the holder of our ADSs in Australia and through which that holder carries on business.



Tax on Sales or other Dispositions of Shares — Capital
Gains Tax (CGT)



Australian capital gains derived by non-Australian residents
in respect of the disposal of capital assets that are not taxable Australian property will be disregarded. Non-Australian resident
shareholders will not be subject to Australian capital gains tax on the capital gain made on a disposal of our ADSs or ordinary
shares, unless they, together with associates, hold 10% or more of MOKO’s issued capital, tested either at the time of disposal
or over any continuous 12 month period in the 24 months prior to disposal, and the value of those ADSs or shares at the time of
disposal are wholly or principally attributable to Australian real property assets.



Australian capital gains tax applies to net capital gains at
a taxpayer’s marginal tax rate. Previously, certain shareholders, such as individuals were entitled to a discount of 50%
for capital gains on shares held for greater than 12 months. However, as part of the 2012 – 2013 Federal Budget
measures, the Australian Government announced changes to the application of the CGT discount for foreign resident individuals
on taxable Australian assets, including shares. These changes became effective on June 29, 2013.



The effect of these changes is to:



| | · | Retain access to the full CGT discount for discount capital gains of foreign resident individuals in respect of the increase
in the value of a CGT asset that occurred before May 9, 2013; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Remove the CGT discount for discount capital gains for foreign resident individuals that arise after May 8, 2013.
| | - | -----------------------------------------------------------------------------------------------------------------



Foreign resident individuals will still have access to a discount
on discount capital gains accrued prior to May 8, 2012 provided they choose to obtain a market valuation for their assets
as at that date.

Net capital gains are calculated after reduction for capital
losses, which may only be offset against capital gains.



Tax on Sales or other Dispositions of Shares — Shareholders
Holding Shares on Revenue Account



Some non-Australian resident shareholders may hold shares or
ADSs on revenue rather than on capital account, for example, share traders. These shareholders may have the capital gains made
on the sale or other disposal of the shares or ADSs included in their assessable income under the ordinary income provisions of
the income tax law, if the gains are sourced in Australia.



55


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Non-Australian resident shareholders assessable under these
ordinary income provisions in respect of gains made on shares or ADSs held on revenue account would be assessed for such gains
at the Australian tax rates for non-Australian residents, which start at a marginal rate of 32.5% for non-Australian resident individuals.
Some relief from the Australian income tax may be available to such non-Australian resident shareholders under the Double Taxation
Convention between the United States and Australia, for example, because the shareholder does not have a permanent establishment
in Australia.



To the extent an amount would be included in a non-Australian
resident shareholder’s assessable income under both the capital gains tax provisions and the ordinary income provisions,
the capital gain amount would generally be reduced, so that the shareholder would not be subject to double tax on any part of the
income gain or capital gain.



Dual Residency



If a shareholder was a resident of both Australia and the United
States under those countries’ domestic taxation laws, that shareholder may be subject to tax as an Australian resident. If,
however, the shareholder is determined to be a U.S. resident for the purposes of the Double Taxation Convention between the United
States and Australia, the Australian tax applicable would be limited by the Double Taxation Convention. Shareholders should obtain
specialist taxation advice in these circumstances.



Conduit Foreign Income (CFI)



CFI is that part of MOKO’s earnings which are derived
from operations located outside Australia. Australian withholding tax is not payable on unfranked dividends to non-Australian resident
shareholders, to the extent that those dividends represent CFI. To the extent that MOKO’s revenues are earned from operations
located outside Australia, no franking credits will be available.



Stamp Duty



A transfer of shares or ADSs of a company listed on the ASX
— as is MOKO — is not subject to Australian stamp duty except in some circumstances where one person, or associated
persons, acquires 90% or more of the shares.



Australian Death Duty



Australia does not have estate or death duties. No capital gains
tax liability is realized upon the inheritance of a deceased person’s shares or ADSs. The disposal of inherited shares or
ADSs by beneficiaries may, however, give rise to a capital gains tax liability.



Goods and Services Tax



The issue or transfer of shares or ADSs will not incur Australian
goods and services tax and does not require a shareholder to register for Australian goods and services tax purposes.



U.S. Federal Income Taxation



General



The following is a summary of the material U.S. federal income
tax consequences of the acquisition, ownership and disposition of our ADSs or ordinary shares. As used
in this discussion, references to “we,” “us” or “our” refer to MOKO Social Media Limited.



The discussion below of the U.S. federal income tax consequences
to “U.S. Holders” will apply to a beneficial owner of our ADSs or ordinary shares that is for U.S. federal income tax
purposes:



| | · | an individual citizen or resident of the United States;
| | - | -------------------------------------------------------



| | · | a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized)
in or under the laws of the United States, any state thereof or the District of Columbia;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or
| | - | ----------------------------------------------------------------------------------------------------------------------



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| | · | a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.
persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a U.S. person.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A beneficial owner of our ADSs or ordinary shares that is described
above is referred to herein as a “U.S. Holder.” If a beneficial owner of our ADSs or ordinary shares is not described
as a U.S. Holder and is not an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes,
such owner will be considered a “Non-U.S. Holder.” The material U.S. federal income tax consequences applicable specifically
to Non-U.S. Holders are described below under the heading “Non-U.S. Holders.”



This discussion is based on the Internal
Revenue Code of 1986, as amended (the “Code”), its legislative history, Treasury regulations promulgated thereunder,
published rulings and court decisions, all as currently in effect. These authorities are subject to change or differing interpretations,
possibly on a retroactive basis.



This discussion does not address all aspects
of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances.
In particular, this discussion considers only holders that own and hold our ADSs or ordinary shares as capital assets within the
meaning of Section 1221 of the Code, and does not address the potential application of the alternative minimum tax or the U.S.
federal income tax consequences to holders that are subject to special rules, including:



| | · | financial institutions or financial services entities;
| | - | ------------------------------------------------------



| | · | broker-dealers;
| | - | ---------------



| | · | persons that are subject to the mark-to-market accounting rules under Section 475 of the Code;
| | - | ----------------------------------------------------------------------------------------------



| | · | tax-exempt entities;
| | - | --------------------



| | · | governments or agencies or instrumentalities thereof;
| | - | -----------------------------------------------------



| | · | insurance companies;
| | - | --------------------



| | · | regulated investment companies;
| | - | -------------------------------



| | · | real estate investment trusts;
| | - | ------------------------------



| | · | certain expatriates or former long-term residents of the United States;
| | - | -----------------------------------------------------------------------



| | · | persons that actually or constructively own 5% or more of our voting shares (including as a result of ownership of our
ADSs);
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | · | persons that acquired our ADSs or ordinary shares pursuant to an exercise of employee options, in connection with employee
incentive plans or otherwise as compensation;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | persons that hold our ADSs or ordinary shares as part of a straddle, constructive sale, hedging, conversion or other integrated
transaction;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | · | persons whose functional currency is not the U.S. dollar;
| | - | ---------------------------------------------------------



| | · | passive foreign investment companies; or
| | - | ----------------------------------------



| | · | controlled foreign corporations.
| | - | --------------------------------



The discussion below assumes that the representations
contained in the Deposit Agreement are true and that the obligations in the Deposit Agreement and any related agreement will be
complied with in accordance with their terms. This discussion also assumes that our ADSs will represent only ordinary shares in
us and will not represent cash or any other type of property. For U.S. federal income tax purposes, a holder of our ADSs will be
treated as the beneficial owner of the underlying ordinary shares represented by such ADSs. Accordingly, deposits or withdrawals
of ordinary shares for ADSs will not be subject to U.S. federal income tax.



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The U.S. Treasury has expressed concerns
that parties to whom ADSs are pre-released may be taking actions that are inconsistent with the claiming, by U.S. Holders of ADSs,
of foreign tax credits for U.S. federal income tax purposes. Such actions also would be inconsistent with the claiming of the reduced
rate of tax applicable to dividends received by certain non-corporate U.S. Holders, as described below. Accordingly, the availability
of foreign tax credits or the reduced tax rate for dividends received by certain non-corporate U.S. Holders could be affected by
actions that may be taken by parties to whom ADSs are pre-released, or by future actions of the U.S. Treasury Department.



This discussion does not address any aspect
of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S. tax laws or, except as discussed
herein, any tax reporting obligations applicable to a holder of our ADSs or ordinary shares. This discussion also does not address
the tax treatment of any taxes, fees or expenses that may be payable by an ADS holder pursuant to the Deposit Agreement. Additionally,
this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our ADSs
or ordinary shares through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income
tax purposes) is the beneficial owner of ADSs or ordinary shares, the U.S. federal income tax treatment of a partner in the partnership
generally will depend on the status of the partner and the activities of the partnership. This discussion also assumes that any
distribution made (or deemed made) to a holder in respect of our ADSs or ordinary shares and any consideration received (or deemed
received) by a holder in connection with the sale or other disposition of our ADSs or ordinary shares will be in U.S. dollars.



We have not sought, and will not seek, a
ruling from the Internal Revenue Service (the “IRS”) or an opinion of counsel as to any U.S. federal income tax consequence
described herein. The IRS may disagree with the description herein, and its determination may be upheld by a court. Moreover, there
can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the
accuracy of the statements in this discussion.



THIS DISCUSSION IS ONLY A SUMMARY OF THE
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR ADSs OR ORDINARY SHARES. EACH
HOLDER OF OUR ADSs OR ORDINARY SHARES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO
SUCH HOLDER OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR ADSs OR ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT
OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.



U.S. Holders



Taxation of Cash Distributions Paid on
ADSs or Ordinary Shares



Subject to the passive foreign investment
company (“PFIC”) rules discussed below, a U.S. Holder generally will be required to include in gross income as ordinary
income the amount of any cash dividend paid in respect of our ADSs or ordinary shares. A cash distribution on our ADSs or ordinary
shares generally will be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out
of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Such dividend generally
will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received
from other U.S. corporations. The portion of such cash distribution, if any, in excess of such earnings and profits will be applied
against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our ADSs or ordinary shares. Any remaining
excess generally will be treated as gain from the sale or other taxable disposition of such ADSs or ordinary shares.



With respect to non-corporate U.S. Holders,
any such cash dividends may be subject to U.S. federal income tax at the lower applicable regular long-term capital gains tax rate
(see “— Taxation on the Disposition of ADSs or Ordinary Shares” below) provided that (a) our ADSs or ordinary
shares are readily tradable on an established securities market in the United States or we are eligible for the benefits of the
Double Taxation Convention between Australia and the United States (the “U.S.-Australia Tax Treaty”), (b) we are
not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c)
certain holding period requirements are met. Therefore, if our ADSs and ordinary shares are not readily tradable on an established
securities market, and we are not eligible for the benefits of the U.S.-Australia Tax Treaty, then cash dividends paid by us to
non-corporate U.S. Holders will not be subject to U.S. federal income tax at the lower regular long term capital gains tax rate.
Under published IRS authority, shares (including ADSs) are considered for purposes of clause (a) above to be readily tradable on
an established securities market in the United States only if they are listed on certain exchanges, which presently include the
NASDAQ Global Market. Although our ADSs are currently listed on the NASDAQ Global Market, we cannot guarantee
that our ADSs will continue to be listed and traded on the NASDAQ Global Market. U.S. Holders should consult their own
tax advisors regarding the availability of the lower rate for any cash dividends paid with respect to our ADSs or ordinary shares.



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If an Australian withholding tax applies
to cash dividends paid to a U.S. Holder on our ADSs or ordinary shares, as discussed in “Australian Tax Consequences”
above, such tax may be treated as a foreign tax eligible for a deduction from such holder’s U.S. federal taxable income
or a foreign tax credit against such holder’s U.S. federal income tax liability (subject to applicable conditions and limitations).
In addition, if such Australian tax applies to any such dividends, a U.S. Holder may be entitled to certain benefits under the
U.S.-Australia Tax Treaty, if such holder is considered a resident of the United States for purposes of, and otherwise meets the
requirements of, the U.S.-Australia Tax Treaty. U.S. Holders should consult their own tax advisors regarding the deduction or credit
for any such Australian tax and their eligibility for the benefits of the U.S.-Australia Tax Treaty.



Taxation on the Disposition of ADSs or
Ordinary Shares



Upon a sale or other taxable disposition
of our ADSs or ordinary shares, and subject to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain
or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in our
ADSs or ordinary shares.



The regular U.S. federal income tax rate
on capital gains recognized by U.S. Holders generally is the same as the regular U.S. federal income tax rate on ordinary income,
except that long term capital gains recognized by non-corporate U.S. Holders generally are subject to U.S. federal income tax at
a maximum regular rate of 20%. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder’s holding
period for our ADSs or ordinary shares exceeds one year. The deductibility of capital losses is subject to various limitations.



If an Australian capital gains or income
tax applies to any gain from the disposition of our ADSs or ordinary shares by a U.S. Holder, as discussed in “Australian
Tax Consequences” above, such tax may be treated as a foreign tax eligible for a deduction from such holder’s
U.S. federal taxable income or a foreign tax credit against such holder’s U.S. federal income tax liability (subject to applicable
conditions and limitations). In addition, if such Australian tax applies to any such gain, a U.S. Holder may be entitled to certain
benefits under the U.S.-Australia Tax Treaty, if such holder is considered a resident of the United States for purposes of, and
otherwise meets the requirements of, the U.S.-Australia Tax Treaty. U.S. Holders should consult their own tax advisors regarding
the deduction or credit for any such Australian tax and their eligibility for the benefits of the U.S.-Australia Tax Treaty.



Additional Taxes



U.S. Holders that are individuals, estates
or trusts and whose income exceeds certain thresholds generally will be subject to a 3.8% Medicare contribution tax on unearned
income, including, without limitation, dividends on, and gains from the sale or other taxable disposition of, our ADSs or ordinary
shares, subject to certain limitations and exceptions. Under recently issued Treasury Regulations, in the absence of a special
election, such unearned income generally would not include income inclusions under the qualified electing fund (“QEF”)
rules discussed below under “— Passive Foreign Investment Company Rules,” but would include distributions of
earnings and profits from a QEF. U.S. Holders should consult their own tax advisors regarding the effect, if any, of such tax on
their ownership and disposition of our ADSs or ordinary shares.



Passive Foreign Investment Company Rules



A foreign (i.e., non-U.S.) corporation will
be a PFIC if either (a) at least 75% of its gross income in a taxable year of the foreign corporation, including its pro rata share
of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income,
or (b) at least 50% of its assets in a taxable year of the foreign corporation, ordinarily determined based on fair market value
and averaged quarterly over the year, including its pro rata share of the assets of any corporation in which it is considered to
own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes
dividends, interest, rents and royalties (other than certain rents or royalties derived from the active conduct of a trade or business),
and gains from the disposition of passive assets.



Based on the expected composition (and estimated
values) of the assets and the nature of the income of us and our subsidiaries, we do not expect to be treated as a PFIC for our
2013 taxable year (fiscal 2014). However, because we have not performed a definitive analysis as to our PFIC status for our 2013
taxable year, there can be no assurance with respect to our status as a PFIC for such taxable year, our current taxable year (fiscal
2015) or any subsequent taxable year.



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If we are determined to be a PFIC for any
taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ADSs or ordinary shares, and the
U.S. Holder did not make either a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder held (or was
deemed to hold) our ADSs or ordinary shares, a QEF election along with a purging election, or a mark-to-market
election, each as described below, such holder generally will be subject to special rules for regular U.S. federal income tax purposes
with respect to:



| | · | any gain recognized by the U.S. Holder on the sale or other disposition of its ADSs or ordinary shares; and
| | - | -----------------------------------------------------------------------------------------------------------



| | · | any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during
a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder
in respect of our ADSs or ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such
U.S. Holder’s holding period for our ADSs or ordinary shares).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Under these rules,



| | · | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period
for our ADSs or ordinary shares;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| | · | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received
the excess distribution or to the period in the U.S. Holder’s holding period before the first day of our first taxable
year in which we qualified as a PFIC will be taxed as ordinary income;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period
will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to
each such other taxable year of the U.S. Holder.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In general, if we are determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above with respect
to our ADSs or ordinary shares by making a timely QEF election (or a QEF election along with a purging election). Pursuant to the
QEF election, a U.S. Holder will be required to include in income its pro rata share of our net capital gains (as long-term capital
gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the
taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder may make a separate election to defer
the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to
an interest charge.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The QEF election is made on a shareholder-by-shareholder
basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching
a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund),
including the information provided in a PFIC annual information statement, to a timely filed U.S. federal income tax return for
the taxable year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement
with such return and if certain other conditions are met or with the consent of the IRS.



In order to comply with the requirements
of a QEF election, a U.S. Holder must receive certain information from us. Upon request from a U.S. Holder, we will endeavor to
provide to the U.S. Holder no later than 90 days after the request such information as the IRS may require, including a PFIC annual
information statement, in order to enable the U.S. Holder to make and maintain a QEF election. However, there is no assurance that
we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.



If a U.S. Holder has made a QEF election
with respect to our ADSs or ordinary shares, and the special tax and interest charge rules do not apply to such ADSs or ordinary
shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold)
such ADSs or ordinary shares or a QEF election, along with a purge of the PFIC taint pursuant to a purging election, as described
below), any gain recognized on the sale or other taxable disposition of such ADSs or ordinary shares generally will be taxable
as capital gain and no interest charge will be imposed. As discussed above, for regular U.S. federal income tax purposes, U.S.
Holders of a QEF are currently taxed on their pro rata shares of the QEF’s earnings and profits, whether or not distributed.
In such case, a subsequent distribution of such earnings and profits that were previously included in income generally should not
be taxable as a dividend to such U.S. Holders. The adjusted tax basis of a U.S. Holder’s ADSs or ordinary shares in a QEF
will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under
the above rules. Similar basis adjustments apply to property if by reason of holding such property the U.S. Holder is treated under
the applicable attribution rules as owning ADSs or ordinary shares in a QEF.



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Although a determination as to our PFIC status
will be made annually, an initial determination that we are a PFIC generally will apply for subsequent years to a U.S. Holder who
held our ADSs or ordinary shares while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years.
A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder holds (or
is deemed to hold) our ADSs or ordinary shares, however, will not be subject to the PFIC tax and interest charge rules discussed
above with respect to such ADSs or ordinary shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime
with respect to such ADSs or ordinary shares for any of our taxable years that end within or with a taxable year of the U.S. Holder
and in which we are not a PFIC. On the other hand, if the QEF election is not effective for each of our taxable years in which
we are a PFIC and during which the U.S. Holder holds (or is deemed to hold) our ADSs or ordinary shares, the PFIC rules discussed
above will continue to apply to such ADSs or ordinary shares unless the holder files on a timely filed U.S. income tax return (including
extensions) a QEF election and a “purging election” to recognize under the rules of Section 1291 of the Code any gain
that it would otherwise recognize if the U.S. Holder sold our ADSs or ordinary shares for their fair market value on the “qualification”
date. The qualification date is the first day of our tax year in which we qualify as a QEF with respect to such U.S. Holder. The
purging election can only be made if such U.S. Holder held our ADSs or ordinary shares on the qualification date. A purging election
generally creates a deemed sale of such ADSs or ordinary shares at their fair market value. The gain recognized by the purging
election generally will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as
described above. As a result of the purging election, the U.S. Holder generally will increase the adjusted tax basis in its ADSs
or ordinary shares by the amount of gain recognized and will also have a new holding period in its ADSs or ordinary shares for
purposes of the PFIC rules.



Alternatively, if a U.S. Holder, at the close
of its taxable year, owns ADSs or ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark-to-market
election with respect to such ADSs or ordinary shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election
for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) our ADSs or ordinary shares
and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above with
respect to its ADSs or ordinary shares. Instead, in general, the U.S. Holder will include as ordinary income for each year that
we are treated as a PFIC the excess, if any, of the fair market value of its ADSs or ordinary shares at the end of its taxable
year over the adjusted tax basis in its ADSs or ordinary shares. The U.S. Holder also will be allowed to take an ordinary loss
in respect of the excess, if any, of the adjusted tax basis of its ADSs or ordinary shares over the fair market value of its ADSs
or ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a
result of the mark-to-market election). The U.S. Holder’s adjusted tax basis in its ADSs or ordinary shares will be adjusted
to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of our ADSs
or ordinary shares will be treated as ordinary income.



The mark-to-market election is available
only for stock that is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission,
including the NASDAQ Global Market, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that
the market price represents a legitimate and sound fair market value. Although our ADSs are currently listed on
the NASDAQ Global Market, we cannot guarantee that our ADSs will continue to be listed and traded on the NASDAQ Global
Market. U.S. Holders should consult their own tax advisors regarding the availability and tax consequences of a mark-to-market
election with respect to our ADSs or ordinary shares under their particular circumstances.



If we are a PFIC and, at any time, have a
foreign subsidiary that is classified as a PFIC, a U.S. Holder of our ADSs or ordinary shares generally should be deemed to own
a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described
above if we receive a distribution from, or dispose of all or part of our interest in, or the U.S. Holder were otherwise deemed
to have disposed of an interest in, the lower-tier PFIC. Upon request, we will endeavor to cause any lower-tier PFIC to provide
to a U.S. Holder no later than 90 days after the request the information that may be required to make or maintain a QEF election
with respect to the lower-tier PFIC. However, there is no assurance that we will have timely knowledge of the status of any such
lower-tier PFIC or that we will be able to cause the lower-tier PFIC to provide the required information. A mark-to-market election
generally would not be available with respect to such a lower-tier PFIC. U.S. Holders are urged to consult their own tax advisors
regarding the tax issues raised by lower-tier PFICs.



A U.S. Holder that owns (or is deemed to
own) ADSs or ordinary shares in a PFIC during any taxable year of the U.S. Holder may have to file an IRS Form 8621 (whether or
not a QEF election or mark-to-market election is or has been made) with such U.S. Holder’s U.S. federal income tax return
and provide such other information as may be required by the U.S. Treasury Department.



The rules dealing with PFICs and with the
QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly,
U.S. Holders of our ADSs or ordinary shares should consult their own tax advisors concerning the application of
the PFIC rules to our ADSs or ordinary shares under their particular circumstances.



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Non-U.S. Holders



Cash dividends paid or deemed paid to a Non-U.S.
Holder with respect to our ADSs or ordinary shares generally will not be subject to U.S. federal income tax unless such dividends
are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required
by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains or maintained
in the United States).

In addition, a Non-U.S. Holder generally
will not be subject to U.S. federal income tax on any gain attributable to a sale or other taxable disposition of our ADSs or ordinary
shares unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required
by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains or maintained
in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable
year of such sale or other disposition and certain other conditions are met (in which case, such gain from U.S. sources generally
is subject to U.S. federal income tax at a 30% rate or a lower applicable tax treaty rate).



Cash dividends and gains that are effectively
connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable
income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains or maintained in the
United States) generally will be subject to regular U.S. federal income tax at the same regular U.S. federal income tax rates as
applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax
purposes, may also be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.



Backup Withholding and Information Reporting



In general, information reporting for U.S.
federal income tax purposes should apply to cash distributions made on our ADSs or ordinary shares within the United States to
a U.S. Holder (other than an exempt recipient) and to the proceeds from sales and other dispositions of our ADSs or ordinary shares
by a U.S. Holder (other than an exempt recipient) to or through a U.S. office of a broker. Payments made (and sales and other dispositions
effected at an office) outside the United States will be subject to information reporting in limited circumstances. In addition,
certain information concerning a U.S. Holder’s adjusted tax basis in its ADSs or ordinary shares and adjustments to that
tax basis and whether any gain or loss with respect to such ADSs or ordinary shares is long-term or short-term also may be required
to be reported to the IRS, and certain holders may be required to file an IRS Form 8938 (Statement of Specified Foreign Financial
Assets) to report their interest in our ADSs or ordinary shares.



Moreover, backup withholding of U.S. federal
income tax at a rate of 28% generally will apply to cash dividends paid on our ADSs or ordinary shares to a U.S. Holder (other
than an exempt recipient) and the proceeds from sales and other dispositions of our ADSs or ordinary shares by a U.S. Holder (other
than an exempt recipient), in each case who:



| | · | fails to provide an accurate taxpayer identification number;
| | - | ------------------------------------------------------------



| | · | is notified by the IRS that backup withholding is required; or
| | - | --------------------------------------------------------------



| | · | in certain circumstances, fails to comply with applicable certification requirements.
| | - | -------------------------------------------------------------------------------------



A Non-U.S. Holder generally may eliminate
the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties
of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.



Backup withholding is not an additional tax.
Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a Non-U.S. Holder’s
U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely
furnished to the IRS. Holders are urged to consult their own tax advisors regarding the application of backup withholding and the
availability of and procedures for obtaining an exemption from backup withholding in their particular circumstances.



F. Dividends and paying agents



Not applicable.

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G. Statement by experts



Not applicable.



H.  Documents on display



Documents concerning
us that are referred to in this document may be inspected at our registered office at Suite 4, Level 9, 341 George Street, Sydney,
New South Wales, 2000 Australia.



In addition, we will
file annual reports and other information with the Securities and Exchange Commission. We will file annual reports on Form 20-F
and submit other information under cover of Form 6-K. As a foreign private issuer, we are exempt from the proxy requirements
of Section 14 of the Exchange Act and our officers, directors and principal shareholders will be exempt from the insider short-swing
disclosure and profit recovery rules of Section 16 of the Exchange Act. Annual reports and other information we
file with the Commission may be inspected at the public reference facilities maintained by the Commission at Room 1024, 100
F. Street, N.E., Washington, D.C. 20549, and at its regional offices located at 233 Broadway, New York, New York 10279 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of all or any part thereof may be obtained from such
offices upon payment of the prescribed fees. You may call the Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms and you can request copies of the documents upon payment of a duplicating fee, by writing
to the Commission. In addition, the Commission maintains a web site that contains reports and other information regarding
registrants (including us) that file electronically with the Commission which can be assessed at http://www.sec.gov.





ENFORCEABILITY OF CIVIL LIABILITIES



We are incorporated under the laws of Australia
with limited liability. We are incorporated in Australia because of certain benefits associated with being an Australian company,
such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange
control or currency restrictions and the availability of professional and support services. However, Australia has a less developed
body of securities laws as compared to the United States and provides protections for investors to a lesser extent. In addition,
Australian companies may not have standing to sue before the federal courts of the United States.



Our constituent documents do not contain
provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers,
directors and shareholders be arbitrated.



We conduct a significant portion of our
current operations in Australia and a substantial portion of our assets are located in Australia. We have appointed MOKO.Mobi,
Inc. as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.
A majority of our directors and officers are nationals or residents of jurisdictions outside the United States and a substantial
portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service
of process within the United States upon these persons or to enforce against us or them judgments obtained in United States courts,
including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in
the United States.



Any final and conclusive monetary judgment
obtained against us in United States courts, for a definite sum, may be treated by the courts of Australia as a cause of action
in itself so that no retrial of the issues would be necessary prior to the enforcement of that judgment, provided that an Australian
court was satisfied that:



| | · | the United States court issuing the judgment had jurisdiction in the matter and we either submitted to such jurisdiction
or was resident or carrying on business within such jurisdiction and was duly served with process;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the judgment given by the United States court was not in respect of penalties, taxes, fines or similar fiscal or revenue
obligations of us;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | · | in obtaining judgment there was no fraud on the part of the person in whose favour judgment was given or on the part of
the court;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



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| | · | recognition or enforcement of the judgment in Australia would not be contrary to public policy; and
| | - | ---------------------------------------------------------------------------------------------------



| | · | the proceedings pursuant to which judgment was obtained were not contrary to natural justice.
| | - | ---------------------------------------------------------------------------------------------



I.  Subsidiary Information



Not required.



ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK



We do not use derivative
financial instruments.



ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN
EQUITY SECURITIES



Fees and Expenses Payable Under the Deposit Agreement For
Our ADSs



|Persons depositing
        or withdrawing shares or ADS
        holders must pay:                                                                                                          |  | For:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)                                                                                                                                      |  | •   
|                                                                                                                                                                                           |  | •   
|$0.05 (or less) per ADS                                                                                                                                                                    |  | •   
|A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs                                  |  | •   
|$0.05 (or less) per ADSs per calendar year                                                                                                                                                 |  | •   
|Registration or transfer fees                                                                                                                                                              |  | •   
|Expenses of the depositary                                                                                                                                                                 |  | •   
|                                                                                                                                                                                           |  | •   
|Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, share transfer taxes, stamp duty or withholding taxes |  | •   
|Any charges incurred by the depositary or its agents for servicing the deposited securities                                                                                                |  | •   



The depositary collects its fees for delivery
and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries
acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed
or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services
by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants
acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that
are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those
services are paid.



From time to time, the depositary may make
payments to us to reimburse and / or share revenue from the fees collected from ADS holders, or waive fees and expenses for services
provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing
its duties under the deposit agreement, the depositary may use brokers, dealers or other services providers that are affiliates
of the depositary and that may earn or share fees or commissions.



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PART II



ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES



Not applicable



ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS
OF SECURITY HOLDERS AND USE OF PROCEEDS



A.-D. Material
Modifications to the Rights of Security Holders.



None.



E. Use of Proceeds.



The following “Use
of Proceeds” information relates to our initial U.S. public offering of 44,000,000 ordinary shares in the form of 1,100,000
ADSs at a public offering price of $7.50 per ADS, thereby raising gross proceeds of approximately US$8.25 million.  The
registration statement on Form F-1 (File No. 333-170471) for our initial public offering was declared effective by the SEC on June
26, 2014.  On July 1, 2014, we completed our public offering after 1,100,000 ADSs were sold.   Chardan Capital
Markets, LLC and Northland Capital Markets were the underwriters for our initial public offering.  We received net proceeds
(after deducting underwriting discounts and commissions and other expenses related to the offering) of approximately $6,272,500.  None
of the above expenses included direct or indirect payments to directors or officers of our company or their associates, persons
owning 10% or more of our equity securities or our affiliates. The underwriters did not exercise their overallotment option.



From July 1, 2014
to September 30, 2014, we have not yet used any of the net proceeds and as of September 30, 2014, we had approximately $6,272,500 left from the net proceeds of the offering.



ITEM 15.     CONTROLS AND PROCEDURES



(a) Evaluation of Disclosure Controls and Procedures



An evaluation was performed
under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,
regarding the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the June 30,
2014. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded
that our disclosure controls and procedures as of June 30, 2014 were effective and that information required to be disclosed by
us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms.



(b) Management’s annual report
on internal control over financial reporting



This annual report does not include a report of management’s
assessment regarding internal control over financial reporting or an attestation report of the company’s registered public
accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.



(c) Attestation report of the registered public accounting
firm



Not applicable.



(d) Changes in Internal Controls over Financial Reporting



There were no changes
in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the year
ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial
reporting. It should be noted that while our management believes that our disclosure controls and procedures provide a reasonable
level of assurance; our management does not expect that our disclosure controls and procedures or internal financial controls will
prevent all errors or fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met.



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ITEM 16.     [RESERVED]



ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT.



Our Board of Directors
has determined that Mr. Mark Hauser, is an independent financial expert serving on our audit committee.



ITEM 16B.  CODE OF ETHICS.



The Company has adopted
a Code of Conduct that applies to its Chief Executive Officer and all of its directors, officers and employees, or persons performing
similar functions. A copy of our Code of Conduct is available at its website. Any future changes to the Code of Conduct will be
posted on the Company’s website or filed as an exhibit to a report filed with the SEC within five business days of the change
being effective.



ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.



The following table represents aggregate
fees billed to the Company for fiscal years ended June 30, 2014 and 2013 by BDO East Coast Partnership and other BOD international
offices, the Company’s principal accounting firm.



|Accountant Fees and Services   |  | 2014 |         |  | 2013 |   
|------------------------------ |  | ---- | ------- |  | ---- | --
|Audit Fees                     |  | A$   | 318,537 |  |      | A$
|Audit Related Fees (F1 review) |  | A$   | 200,019 |  |      | A$
|Tax Fees                       |  | A$   | 10,790  |  |      | A$
|All Other Fees                 |  |      | -       |  |      |   
|                               |  | A$   | 529,346 |  |      | A$



Audit Fees



The audit fees for
the years ended June 30, 2014 and 2013, respectively, were paid for professional services rendered for the audits of our consolidated
financial statements, quarterly reviews, consents, and assistance with review of documents filed with the SEC.



Tax Fees



Tax fees for the years
ended June 30, 2014 and 2013, respectively, were paid for services related to tax compliance, including the preparation of tax
returns and tax planning and tax advice.



Other Fees



Not applicable.



ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES.



Not applicable.



ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY
THE ISSUER AND AFFILIATED PURCHASERS.



Not applicable.



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ITEM 16F.  CHANGE IN REGISTRANT’S CERTIFYING
ACCOUNTANT.



Not applicable.



ITEM 16G.  CORPORATE GOVERNANCE.



Subject to certain exceptions, NASDAQ permits
foreign private issuers to follow home country governance practices in lieu of the practices mandated by NASDAQ rules, provided
that the foreign private issuer furnishes NASDAQ with a letter from home country counsel confirming that the practices that will
be followed are not prohibited by home country law. Set forth below is a brief description of certain NASDAQ requirements and the
Australian corporate practice or the Australian Securities Exchange requirement that we follow in lieu of the NASDAQ rule.



| | · | We seek exemption from the NASDAQ requirement that independent directors have regularly scheduled meetings at which only
independent directors are present. Neither Australian law nor the ASX Listing Rules require executive sessions of the independent
directors. Accordingly, we seek to claim this exemption.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We seek exemption from NASDAQ’s quorum requirements applicable to meetings of shareholders. Consistent with Australian
law, our Constitution provides that three shareholders present shall constitute a quorum for a general meeting. NASDAQ requires
that an issuer provide for a quorum as specified in its by-laws for any meeting of the holders of common stock, which quorum
may not be less than 33 1/3% of the outstanding shares of an issuer’s voting common stock. Accordingly, because applicable
Australian law and rules governing quorums at shareholder meetings differ to NASDAQ’s quorum requirements, we seek to
claim this exemption.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We seek exemption from the NASDAQ requirement that issuers obtain shareholder approval prior to the issuance of securities
in connection with certain acquisitions, private placements of securities the establishment or amendment of certain stock
option, purchase or other compensation plans. Applicable Australian law and the ASX Listing Rules differ to the NASDAQ requirements,
with the former requiring prior shareholder approval in numerous circumstances, including (i) issuance of equity securities
exceeding 15% of our issued share capital in any 12 month period (but in determining the 15% limit, securities issued under
an exception to the rule or with shareholder approval are not counted), (ii) issuance of equity securities to related parties
(as defined in the ASX Listing Rules), (iii) issuance to directors or their associates acquiring securities under any
circumstances, other than in their sole capacity as an existing security holder, (iv) issues that are likely to alter the
nature or scale of the issuer and (v) issues that are or will result in one shareholder acquiring voting power (as that term
is defined in Australian law) in more than 20%by number of the shares in the issuer’s capital. Applicable Australian law,
ASIC Regulatory Guidelines and ASX Listing Rules also provide for executive and employee equity incentive plans involving
the issue of shares or other securities to directors and employees being capped at, in aggregate, 5% of the total number of
shares on issue (on a fully diluted basis). Otherwise, the company may be required to issue a prospectus in regard to any
such issue.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 16H.  MINE SAFETY DISCLOSURE.



Not applicable.



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PART III



ITEM 17. FINANCIAL STATEMENTS



Our audited Financial Statements are included as the “F”
pages attached to this report.



All financial statements in this Annual Report, unless otherwise
stated, are presented in accordance with IFRS.



ITEM 18. FINANCIAL STATEMENTS



The Company has elected to provide financial statements pursuant
to ITEM 17.



ITEM 19. EXHIBITS



|Exhibit No. |  | Description
|----------- |  | -----------



|1.1*  |  | Constitution of the Registrant, as currently in effect                                                                                                                   
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.2*  |  | Certificate of Registration on Change of Name dated February 28, 2007                                                                                                    
|1.3*  |  | Certificate of Registration on Change of Name dated December 18, 2008                                                                                                    
|2.1*  |  | Registrant’s Specimen American Depositary Receipt (included in Exhibit 4.2)                                                                                              
|2.2*  |  | Form of Amended and Restated Deposit Agreement among the Registrant, the depositary and holder of the American Depositary Receipts                                       
|2.3*  |  | Form of Warrant issued to Northland Capital Markets                                                                                                                      
|4.1*  |  | 2014 U.S. Omnibus Securities and Incentive Plan                                                                                                                          
|4.2+* |  | Letter of Agreement between American Intramural Sports Group LLC and the Registrant dated March 4, 2013                                                                  
|4.3+* |  | License and Services Agreement between IMLeagues LLC and the Registrant dated October 10, 2013                                                                           
|4.4*  |  | Asset Purchase Agreement dated August 10, 2012 between Howmark Mobile LLC and the Registrant                                                                             
|4.5*  |  | Memorandum dated April 9, 2013, as revised on April 15, 2013                                                                                                             
|4.6*  |  | Memorandum of Confirmation dated October 2013                                                                                                                            
|4.7*  |  | Second Memorandum of Confirmation dated November 2013                                                                                                                    
|4.8*  |  | Clarification Agreement dated as of April 30, 2014                                                                                                                       
|8.1*  |  | List of Subsidiaries of the Registrant                                                                                                                                   
|11.1* |  | Code of Business Conduct and Ethics of the Registrant                                                                                                                    
|12.1  |  | Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended                         
|12.2  |  | Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended                         
|13.1  |  | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



*   Incorporated by reference to the registration
statement on Form F-1 of the Registrant (File No. 333-161602).



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SIGNATURES



The Registrant hereby certifies that it
meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual
report on its behalf.



MOKO SOCIAL MEDIA LIMITED



|By:                                                 | /s/ Ian Rodwell |                                                     |  | By: | /s/ Greg McCann | 
|--------------------------------------------------- | --------------- | --------------------------------------------------- |  | --- | --------------- | 
|Name: Ian Rodwell                                   |                 | Name: Greg McCann                                  
|Title: Chief Executive Officer (Principal Executive |                 | Title: Chairman (Principal Financial and Accounting
|Officer)                                            |                 | Officer)                                           
|Date: October 31, 2014                              |                 | Date: October 31, 2014                             



69


Table of Contents








INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                         | Page     
|------------------------------------------------------------------------ | ---------
|                                                                         |          
|Report of Independent Registered Public Accounting Firm                  | F-2      
|Consolidated Statements of profit or loss and other comprehensive income | F-3      
|Consolidated Statements of financial position                            | F-5      
|Consolidated Statements of changes in equity                             | F-6      
|Consolidated Statements of cash flows                                    | F-7      
|Notes to Consolidated Financial Statements                               | F-8 –F-57



F-1


Table of Contents




Independent Auditor’s Report



To the Board of Directors and stockholders of Moko Social Media
Limited



We have audited the accompanying consolidated
financial statements of Moko Social Media Limited and its subsidiaries, which comprise the consolidated balance sheets as of June
30, 2013 and 2014, and the related consolidated statements of profit or loss and comprehensive income, changes in equity and cash
flows for the three years ended June 30, 2014, and the related notes to the consolidated financial statements.



Management’s Responsibility for the Financial Statements



Management is responsible for the preparation
and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards
as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.



Auditor’s Responsibility



Our responsibility is to express an opinion
on these consolidated financial statements based on our audits. We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material misstatement.



An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend
on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statement.



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



Opinion



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Moko Social Media Limited and
its subsidiaries as of June 30, 2013 and 2014, and the results of their operations and their cash flows for three years ended
June 30, 2014, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board.





/s/ BDO

BDO EAST COAST PARTNERSHIP

Sydney, Australia

31 October
2014



F-2


Table of Contents




CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME



|                                                                    |  |      |    |  |      | Consolidated |            
|------------------------------------------------------------------- |  | ---- | -- |  | ---- | ------------ | -----------
|                                                                    |  | Note |    |  | 2014 |              |            
|                                                                    |  |      |    |  | $    |              |            
|                                                                    |  |      |    |  |      |              |            
|Revenue from continuing operations                                  |  |      | 5  |  |      |              | 8,228,151  
|Interest income                                                     |  |      | 5  |  |      |              | 104,850    
|Other Income and revenue                                            |  |      |    |  |      |              | 282,148    
|Fair value gain on deferred consideration                           |  |      |    |  |      |              | 383,933    
|Expenses                                                            |  |      |    |  |      |              |            
|Cost of providing goods and services                                |  |      |    |  |      |              | (6,536,820 
|Computer expenses                                                   |  |      |    |  |      |              | (566,858   
|Marketing expenses                                                  |  |      |    |  |      |              | (1,308,959 
|Travel and entertainment expenses                                   |  |      |    |  |      |              | (566,259   
|Occupancy expenses                                                  |  |      |    |  |      |              | (198,236   
|Administration expenses                                             |  |      |    |  |      |              | (1,027,810 
|Exchange loss                                                       |  |      |    |  |      |              | (142,664   
|Finance costs                                                       |  |      |    |  |      |              | (3,838     
|Legal and professional fees                                         |  |      | 6  |  |      |              | (3,223,803 
|Employee benefits expenses                                          |  |      | 6  |  |      |              | (3,796,520 
|Share based payments                                                |  |      | 6  |  |      |              | (5,144,968 
|Depreciation and amortisation                                       |  |      |    |  |      |              | (1,224,238 
|Other expenses                                                      |  |      | 6  |  |      |              | 91,527     
|Impairment of goodwill                                              |  |      |    |  |      |              | -          
|                                                                    |  |      |    |  |      |              |            
|Loss before income tax expense from continuing operations           |  |      | 7  |  |      |              | (14,650,364
|Income tax benefit                                                  |  |      |    |  |      |              | 1,053,905  
|                                                                    |  |      |    |  |      |              |            
|Loss after income tax expense from continuing operations            |  |      |    |  |      |              | (13,596,459
|Profit/(Loss) after income tax expense from discontinued operations |  |      | 33 |  |      |              | -          
|                                                                    |  |      |    |  |      |              |            
|Loss after income tax expenses for the year                         |  |      |    |  |      |              | (13,596,459
|                                                                    |  |      |    |  |      |              |            
|Other comprehensive income                                          |  |      |    |  |      |              |            
|Exchange differences on translation of foreign operations           |  |      |    |  |      |              | (244,676   
|Total comprehensive loss for the year                               |  |      |    |  |      |              | (13,841,135
|                                                                    |  |      |    |  |      |              |            
|Total comprehensive loss for the year is attributable to:           |  |      |    |  |      |              |            
|Continuing operations                                               |  |      |    |  |      |              | (13,841,135
|Discontinued operations                                             |  |      |    |  |      |              | -          
|Total comprehensive loss for the year                               |  |      |    |  |      |              | (13,841,135
|                                                                    |  |      |    |  |      |              |            
|Loss attributable to:                                               |  |      |    |  |      |              |            
|Owners of the Company                                               |  |      |    |  |      |              | (13,472,361
|Non-controlling interests                                           |  |      |    |  |      |              | (124,098   
|                                                                    |  |      |    |  |      |              | (13,596,459
|Total comprehensive income attributable to:                         |  |      |    |  |      |              |            
|Owners of the Company                                               |  |      |    |  |      |              | (13,717,037
|Non-controlling interests                                           |  |      |    |  |      |              | (124,098   
|                                                                    |  |      |    |  |      |              | (13,841,135



F-3


Table of Contents




CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME



|                                                                                                       |  |      |        |  |      |  | Consolidated |     
|------------------------------------------------------------------------------------------------------ |  | ---- | ------ |  | ---- |  | ------------ | ----
|                                                                                                       |  | Note |        |  | 2014 |  |              | 2013
|                                                                                                       |  |      |        |  | $    |  |              | $   
|                                                                                                       |  |      |        |  |      |  |              |     
|Earnings per share from continuing operations attributable to the owner of MOKO Social Media Limited   |  |      |        |  |      |  |              |     
|Basic / Diluted EPS (Cents per share)                                                                  |  |      | 28 (b) |  |      |  | (2.85        | )   
|                                                                                                       |  |      |        |  |      |  |              |     
|Earnings per share from discontinued operations attributable to the owner of MOKO Social Media Limited |  |      |        |  |      |  |              |     
|Basic / Diluted EPS (Cents per share)                                                                  |  |      | 28 (c) |  |      |  | -            |     
|                                                                                                       |  |      |        |  |      |  |              |     
|Earnings per share for loss attributable to the owner of MOKO Social Media Limited                     |  |      |        |  |      |  |              |     
|Basic / Diluted EPS (Cents per share)                                                                  |  |      | 28 (d) |  |      |  | (2.85        | )   



THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH
THE ACCOMPANYING NOTES



F-4


Table of Contents




CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



|                                  |  |      |    |  |      | Consolidated |            
|--------------------------------- |  | ---- | -- |  | ---- | ------------ | -----------
|                                  |  | Note |    |  | 2014 |              |            
|                                  |  |      |    |  | $    |              |            
|Current assets                    |  |      |    |  |      |              |            
|Cash and cash equivalents         |  |      | 8  |  |      |              | 9,878,011  
|Trade and other receivables       |  |      | 9  |  |      |              | 784,872    
|Other current assets              |  |      | 10 |  |      |              | 441,696    
|Total current assets              |  |      |    |  |      |              | 11,104,579 
|                                  |  |      |    |  |      |              |            
|Non-current assets                |  |      |    |  |      |              |            
|Property, plant and equipment     |  |      | 11 |  |      |              | 87,726     
|Intangible assets                 |  |      | 12 |  |      |              | 3,613,433  
|Deferred tax asset                |  |      | 7  |  |      |              | 427,719    
|Total non-current assets          |  |      |    |  |      |              | 4,128,878  
|Total assets                      |  |      |    |  |      |              | 15,233,457 
|                                  |  |      |    |  |      |              |            
|Current liabilities               |  |      |    |  |      |              |            
|Deferred contingent consideration |  |      | 14 |  |      |              | -          
|Trade and other payables          |  |      | 15 |  |      |              | 2,563,611  
|Borrowings                        |  |      | 16 |  |      |              | -          
|Employee benefits                 |  |      | 17 |  |      |              | 276,920    
|Provisions                        |  |      | 18 |  |      |              | -          
|Income tax provision              |  |      |    |  |      |              | 740,880    
|Total current liabilities         |  |      |    |  |      |              | 3,581,411  
|                                  |  |      |    |  |      |              |            
|Non-current liabilities           |  |      |    |  |      |              |            
|Employee benefits                 |  |      | 17 |  |      |              | 35,348     
|Total non-current liabilities     |  |      |    |  |      |              | 35,348     
|Total liabilities                 |  |      |    |  |      |              | 3,616,759  
|                                  |  |      |    |  |      |              |            
|Net assets                        |  |      |    |  |      |              | 11,616,698 
|                                  |  |      |    |  |      |              |            
|Equity                            |  |      |    |  |      |              |            
|Issued capital                    |  |      | 19 |  |      |              | 41,679,662 
|Reserves                          |  |      | 20 |  |      |              | 8,990,804  
|Accumulated losses                |  |      | 21 |  |      |              | (38,929,670
|Non-controlling interest          |  |      |    |  |      |              | (124,098   
|Total equity                      |  |      |    |  |      |              | 11,616,698 



THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH
THE ACCOMPANYING NOTES



F-5


Table of Contents




CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY





|Consolidated                                         |  | Issued 
capital |            |   | Foreign 
currency translation
    
reserve |  |          | Option 
reserves |  |  | Accumulated losses |   |  | Non-
controlling interest |             |   | Total | 
|---------------------------------------------------- |  | --------------- | ---------- | - | ------------------------------------------ |  | -------- | ---------------- |  |  | ------------------ | - |  | ------------------------- | ----------- | - | ----- | 
|                                                     |  | $               |            |   | $                                          |  |          | $                |  |  | $                  |   |  | $                         |             |   | $     | 
|Balance at 30 June 2011                              |  |                 | 15,603,025 |   |                                            |  | -        |                  |  |  | 1,989,462          |   |  |                           | (16,746,984 | ) |       | 
|Loss after income tax expense for the year           |  |                 | -          |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | (2,432,246  | ) |       | 
|Other comprehensive income                           |  |                 | -          |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Total comprehensive loss for the year                |  |                 | -          |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | (2,432,246  | ) |       | 
|Transactions with owners in their capacity as owners |  |                 |            |   |                                            |  |          |                  |  |  |                    |   |  |                           |             |   |       | 
|Issue of shares                                      |  |                 | 5,313,465  |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Capital raising costs                                |  |                 | (268,683   | ) |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Convertible notes                                    |  |                 | 37,750     |   |                                            |  |          |                  |  |  | (37,750            | ) |  |                           |             |   |       | 
|Share based payments                                 |  |                 | -          |   |                                            |  | -        |                  |  |  | 472,905            |   |  |                           | -           |   |       | 
|Foreign exchange                                     |  |                 | -          |   |                                            |  | (38,815  | )                |  |  | -                  |   |  |                           | -           |   |       | 
|Balance at 30 June 2012                              |  |                 | 20,685,557 |   |                                            |  | (38,815  | )                |  |  | 2,424,617          |   |  |                           | (19,179,230 | ) |       | 
|Loss after income tax expense for the year           |  |                 | -          |   |                                            |  |          |                  |  |  | -                  |   |  |                           | (6,278,079  | ) |       | 
|Other comprehensive income for the year, net of tax  |  |                 | -          |   |                                            |  | 853,663  |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Total comprehensive loss for the year, net of tax    |  |                 | -          |   |                                            |  | 853,663  |                  |  |  | -                  |   |  |                           | (6,278,079  | ) |       | 
|Transactions with owners in their capacity as owners |  |                 |            |   |                                            |  |          |                  |  |  |                    |   |  |                           |             |   |       | 
|Issue of shares                                      |  |                 | 4,228,250  |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Capital raising costs                                |  |                 | (257,334   | ) |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Share based payments                                 |  |                 | -          |   |                                            |  | -        |                  |  |  | 434,743            |   |  |                           | -           |   |       | 
|Balance at 30 June 2013                              |  |                 | 24,656,473 |   |                                            |  | 814,848  |                  |  |  | 2,859,360          |   |  |                           | (25,457,309 | ) |       | 
|Loss after income tax expense for the period         |  |                 | -          |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | (13,472,361 | ) |       | 
|Other comprehensive income for the year, net of tax  |  |                 | -          |   |                                            |  | (244,676 | )                |  |  | -                  |   |  |                           | -           |   |       | 
|Total comprehensive loss for the year, net of tax    |  |                 | -          |   |                                            |  | (244,676 | )                |  |  | -                  |   |  |                           | (13,472,361 | ) |       | 
|Transactions with owners in their capacity as owners |  |                 |            |   |                                            |  |          |                  |  |  |                    |   |  |                           |             |   |       | 
|Issue of shares                                      |  |                 | 18,546,936 |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Share based payments – Shares                        |  |                 | 160,000    |   |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Capital raising costs                                |  |                 | (1,683,747 | ) |                                            |  | -        |                  |  |  | -                  |   |  |                           | -           |   |       | 
|Share based payments – Options                       |  |                 | -          |   |                                            |  | -        |                  |  |  | 5,561,272          |   |  |                           | -           |   |       | 
|Balance at 30 June 2014                              |  |                 | 41,679,662 |   |                                            |  | 570,172  |                  |  |  | 8,420,632          |   |  |                           | (38,929,670 | ) |       | 





THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH
THE ACCOMPANYING NOTES



F-6


Table of Contents




CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                          |  |      |    |  | Consolidated | 
|--------------------------------------------------------- |  | ---- | -- |  | ------------ | 
|                                                          |  | Note |    |  | 2014         | 
|                                                          |  |      |    |  | $            | 
|                                                          |  |      |    |  |              | 
|Cash flows from operating activities                      |  |      |    |  |              | 
|                                                          |  |      |    |  |              | 
|Net receipts from customers                               |  |      |    |  |              | 
|R&D tax offset received                                   |  |      |    |  |              | 
|Export market development grant received                  |  |      |    |  |              | 
|Payments to suppliers and employees                       |  |      |    |  |              | 
|Interest received                                         |  |      |    |  |              | 
|Interest and other finance costs paid                     |  |      |    |  |              | 
|Income taxes paid                                         |  |      |    |  |              | 
|Net cash used in operating activities                     |  |      | 23 |  |              | 
|                                                          |  |      |    |  |              | 
|Cash flows from investing activities                      |  |      |    |  |              | 
|Proceeds from sale of business                            |  |      |    |  |              | 
|Payment for acquisition of business, net of cash acquired |  |      |    |  |              | 
|Payment for property, plant and equipment                 |  |      |    |  |              | 
|Payments for disposal of subsidiary                       |  |      | 33 |  |              | 
|Net cash used in investing activities                     |  |      |    |  |              | 
|                                                          |  |      |    |  |              | 
|Cash flows from financing activities                      |  |      |    |  |              | 
|                                                          |  |      |    |  |              | 
|Proceeds from issues of shares                            |  |      |    |  |              | 
|Share issue transaction cost                              |  |      |    |  |              | 
|Proceeds from borrowings                                  |  |      |    |  |              | 
|Repayment of borrowings                                   |  |      |    |  |              | 
|Net cash provided by financing activities                 |  |      |    |  |              | 
|                                                          |  |      |    |  |              | 
|Net increase in cash held                                 |  |      |    |  |              | 
|                                                          |  |      |    |  |              | 
|Cash and cash equivalents at beginning of the year        |  |      |    |  |              | 
|                                                          |  |      |    |  |              | 
|Effects of exchange rate changes on cash                  |  |      |    |  |              | 
|Cash and cash equivalents at end of the year              |  |      | 8  |  |              | 



THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH
THE ACCOMPANYING NOTES



F-7


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies



The principal accounting policies adopted
in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.



Reporting entity



MOKO Social Media Limited (the Company)
is a company domiciled in Australia. The consolidated financial statements of the Company as at and for the year ended 30 June
2014 (‘fiscal 2014’ or ‘2014’) comprises the Company and its subsidiaries (together referred to as the
Consolidated Entity). The Consolidated Entity is involved in tailored digital publishing of mobile applications for common
interest groups, within the youth and young adult demographic, in the United States of America.



The consolidated financial statements were
authorised for issue by the Board of Directors on 30 September 2014.



Basis of preparation



Statement of compliance



These general purpose financial statements
have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board ('AASB') and the Corporations Act 2001, as appropriate for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').



Historical cost convention



The financial statements have been prepared
under the historical cost convention, except for, where applicable, the revaluation of available-for-sale financial assets, financial
assets and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment
and derivative financial instruments.



Critical accounting estimates



The preparation of the financial statements
requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Consolidated Entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements are disclosed in note 3.



New accounting standards and interpretations



The Consolidated Entity has adopted all
of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB')
that are mandatory for the current reporting period.



Any new, revised or amending Accounting
Standards or Interpretations that are not yet mandatory have generally not been early adopted, unless stated otherwise.



Any significant impact on the accounting
policies of the Consolidated Entity from the adoption of these Accounting Standards and Interpretations are disclosed below. The
adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Consolidated Entity.



The following Accounting Standards and
Interpretations are most relevant to the Consolidated Entity:



AASB 2011-9 Amendments to Australian
Accounting Standards - Presentation of Items of Other Comprehensive Income



F-8


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



The Consolidated Entity has applied AASB
2011-9 amendments from 1 July 2013. The amendments requires grouping together of items within other comprehensive income on the
basis of whether they will eventually be 'recycled' to the profit or loss (reclassification adjustments). The change provides clarity
about the nature of items presented as other comprehensive income and the related tax presentation. The amendments also introduced
the term 'Statement of profit or loss and other comprehensive income' clarifying that there are two discrete sections, the profit
or loss section (or separate statement of profit or loss) and other comprehensive income section.



AASB 10 Consolidated Financial Statements



The Consolidated Entity has applied AASB
10 from 1 July 2013, which has a new definition of 'control'. Control exists when the reporting entity is exposed, or has the rights,
to variable returns from its involvement with another entity and has the ability to affect those returns through its 'power' over
that other entity. A reporting entity has power when it has rights that give it the current ability to direct the activities that
significantly affect the investee's returns. The Consolidated Entity not only has to consider its holdings and rights but also
the holdings and rights of other shareholders in order to determine whether it has the necessary power for consolidation purposes.



AASB 12 Disclosure of Interests in Other
Entities



The Consolidated Entity has applied AASB
12 from 1 July 2013. The standard contains the entire disclosure requirement associated with other entities, being subsidiaries,
associates, joint arrangements (joint operations and joint ventures) and unconsolidated structured entities. The disclosure requirements
have been significantly enhanced when compared to the disclosures previously located in AASB 127 'Consolidated and Separate Financial
Statements', AASB 128 'Investments in Associates', AASB 131 'Interests in Joint Ventures' and Interpretation 112 'Consolidation
- Special Purpose Entities'.



AASB 13 Fair Value Measurement and AASB
2011-8 Amendments to Australian Accounting Standards arising from AASB 13



The Consolidated Entity has applied AASB
13 and its consequential amendments from 1 July 2013. The standard provides a single robust measurement framework, with clear measurement
objectives, for measuring fair value using the 'exit price' and provides guidance on measuring fair value when a market becomes
less active. The 'highest and best use' approach is used to measure non-financial assets whereas liabilities are based on transfer
value. The standard requires increased disclosures where fair value is used.



AASB 119 Employee Benefits (September
2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011)



The Consolidated Entity has applied AASB
119 and its consequential amendments from 1 July 2013. The standard eliminates the corridor approach for the deferral of gains
and losses; streamlines the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring
re-measurements to be presented in other comprehensive income; and enhances the disclosure requirements for defined benefit plans.

The standard also changed the definition
of short-term employee benefits, from 'due to' to 'expected to' be settled within 12 months. Annual leave that is not expected
to be wholly settled within 12 months is now discounted allowing for expected salary levels in the future period when the leave
is expected to be taken.



AASB 127 Separate Financial Statements
(Revised), AASB 128 Investments in Associates and Joint Ventures (Reissued) and AASB 2011-7 Amendments to Australian Accounting
Standards arising from the Consolidation and Joint Arrangements Standards



The Consolidated Entity has applied AASB
127, AASB 128 and AASB 2011-7 from 1 July 2013. AASB 127 and AASB 128 have been modified to remove specific guidance that is now
contained in AASB 10, AASB 11 and AASB 12 and AASB 2011-7 makes numerous consequential changes to a range of Australian Accounting
Standards and Interpretations. AASB 128 has also been amended to include the application of the equity method to investments in
joint ventures.



AASB 2012-2 Amendments to Australian
Accounting Standards - Disclosures - Offsetting Financial Assets and Financial Liabilities



The Consolidated Entity has applied AASB
2012-2 from 1 July 2013. The amendments enhance AASB 7 'Financial Instruments: Disclosures' and requires disclosure of information
about rights of set-off and related arrangements, such as collateral agreements. The amendments apply to recognised financial instruments
that are subject to an enforceable master netting arrangement or similar agreement.



F-9


Table of Contents


NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies
(continued)



New accounting standards and interpretations (continued)



AASB 2012-5 Amendments to Australian
Accounting Standards arising from Annual Improvements 2009-2011 Cycle



The Consolidated Entity has applied AASB
2012-5 from 1 July 2013. The amendments affect five Australian Accounting Standards as follows: Confirmation that repeat application
of AASB 1 'First-time Adoption of Australian Accounting Standards' is permitted; Clarification of borrowing cost exemption in AASB
1; Clarification of the comparative information requirements when an entity provides an optional third column or is required to
present a third statement of financial position in accordance with AASB 101 'Presentation of Financial Statements'; Clarification
that servicing of equipment is covered by AASB 116 'Property, Plant and Equipment', if such equipment is used for more than one
period; clarification that the tax effect of distributions to holders of equity instruments and equity transaction costs in AASB
132 'Financial Instruments: Presentation' should be accounted for in accordance with AASB 112 'Income Taxes'; and clarification
of the financial reporting requirements in AASB 134 'Interim Financial Reporting' and the disclosure requirements of segment assets
and liabilities.



AASB 2012-10 Amendments to Australian
Accounting Standards - Transition Guidance and Other Amendments



The Consolidated Entity has applied AASB
2012-10 amendments from 1 July 2013, which amends AASB 10 and related standards for the transition guidance relevant to the initial
application of those standards. The amendments clarify the circumstances in which adjustments to an entity's previous accounting
for its involvement with other entities are required and the timing of such adjustments.



AASB 2011-4 Amendments to Australian
Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirement



The Consolidated entity has applied 2011-4
from 1 July 2013, which amends AASB 124 'Related Party Disclosures' by removing the disclosure requirements for individual key
management personnel ('KMP'). Corporations and Related Legislation Amendment Regulations 2013 and Corporations and Australian Securities
and Investments Commission Amendment Regulation 2013 (No.1) now specify the KMP disclosure requirements to be included within the
directors' report.



Parent entity information



In accordance with the Corporations Act
2001, these financial statements present the results of the Consolidated Entity only. Supplementary information about the parent
entity is disclosed in Note 26.



Principles of consolidation



The consolidated financial statements incorporate
the assets and liabilities of all subsidiaries of MOKO Social Media Limited as at 30 June 2014 and the results of all subsidiaries
for the year then ended. MOKO Social Media Limited and its subsidiaries together are referred to in these financial statements
as the 'Consolidated Entity' or ‘MOKO’.



Subsidiaries are all those entities over
which the Consolidated Entity has the power to govern the financial and operating policies, generally accompanying a shareholding
of more than one-half of the voting rights. The effects of potential exercisable voting rights are considered when assessing whether
control exists. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity. They
are de-consolidated from the date that control ceases.



Intercompany transactions, balances and
unrealised gains on transactions between entities in the Consolidated Entity are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity.



The acquisition of subsidiaries is accounted
for using the acquisition method of accounting. Refer to the 'business combinations' accounting policy for further details. A change
in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.



Non-controlling interest in the results
and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income and statement
of financial position of the Consolidated Entity. Losses incurred by the Consolidated Entity are attributed to the non-controlling
interest in full, even if that results in a deficit balance.



Where the Consolidated Entity loses control
over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together
with any cumulative translation differences recognised in equity. The Consolidated Entity recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.

F-10


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



Segment reporting



Operating segments are reported in a manner
consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision makers, who
are responsible for allocating resources and assessing performance of the operating segments, is the Board of Directors.



Foreign currency translation



Functional and presentation currency



These consolidated financial statements
are presented in Australian dollars, which is MOKO Social Media Limited’s functional and presentation currency.



The functional currencies of the overseas
subsidiaries are as follows:



|Entity              |  | Functional
    currency    
|------------------- |  | ---------------------------
|MOKO.mobi Inc       |  | United States Dollars (USD)
|All Night Media Ltd |  | Great British Pounds (GBP) 



The functional currencies of the overseas
subsidiaries are translated to the presentation currency.



Foreign currency transactions



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. Non-monetary items measured at fair value are reported at the exchange rate at the date when
fair values were determined.



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



Exchange differences 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 statement of profit or loss and other comprehensive income.



Exchange differences arising on translation
of foreign operations are transferred directly to the Company’s foreign currency translation reserve in the statement of
financial position. These differences are recognised in the statement of profit or loss and other comprehensive income in the period
in which the operation is disposed.



Revenue and other income



Revenue is recognised when it is probable
that the economic benefit will flow to the Consolidated Entity and the revenue can be reliably measured. Revenue is measured at
the fair value of the consideration received or receivable.



Revenue is recognised gross with
amounts payable to carriers and aggregators as a cost of sale. This accurately represents the Consolidated Entity’s
relationship with its carriers as being the “principal” rather than “agent” as noted in AASB 118
— “Revenue”.



MOKO generates revenue from its customers
who are the individually contracted mobile users engaging in MOKO’s mobile social networks or using its community and chat
products, typically via pre-paid, monthly, subscriptions which are billed directly to user’s mobile phone accounts, enabling
them to access and participate in our mobile chat and share communities. Given the short subscription period and the inability
to cancel mid-month, revenue is recognised when paid by the carriers to MOKO each month.



‘Carriers’ are individual telecommunication service
providers, who typically have their own network and are consumer facing in the marketplace, who provide MOKO’s customers.



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



Rendering of services



Revenue from the rendering of a service
is recognised upon the delivery of the service to the customers.

F-11


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



Sale of goods



Sale of goods revenue is recognised at
the point of sale, which is where the customer has taken delivery of the goods, the risks and rewards are transferred to the customer
and there is a valid sales contract. Amounts disclosed as revenue are net of sales returns and trade discounts.



Interest



Interest revenue is recognised on a proportional
basis to the interest rates applicable to the financial assets.



Other income



Other income is recognised when it is received or when the right
to receive payment is established.



Government grants



Grants from the government are recognised
at their fair value where there is a reasonable assurance that the grant will be received and the Consolidated Entity will comply
with all attached conditions. Government grants relating to costs are deferred and recognised in the statement of profit or loss
and other comprehensive income over the period necessary to match them with the costs that they are intended to compensate.



Income tax



The income tax expense or revenue for the
period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets
and liabilities and their carrying amounts in the financial statements, and to unused tax losses.



Deferred tax assets and liabilities are
recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled,
based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to
the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception
is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset
or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination,
that at the time of the transaction did not affect either accounting profit or taxable profit or loss.



Deferred tax assets are recognised for
deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the liability simultaneously.



Current and deferred tax balances attributable
to amounts recognised directly in equity are also recognised directly in equity.



Discontinued operations



A discontinued operation is a component
of the Consolidated Entity that has been disposed of or is classified as held for sale and that represents a separate major line
of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or
area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented
separately on the face of the statement of profit or loss and other comprehensive income.



Cash and cash equivalents



For cash flow statement presentation purposes,
cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the statement of financial position.



F-12


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



Trade and other receivables



Trade receivables are recognised initially
at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are generally due
for settlement within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off. A provision for impairment of trade receivables is raised when there is objective evidence that
the Consolidated Entity will not be able to collect all amounts due according to the original terms of receivables. The amount
of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future
cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted
if the effect of discounting is immaterial. The amount of the impairment is recognised in the statement of profit or loss and other
comprehensive income.



Other receivables are recognised at amortised
cost, less any provision for impairment.



Property, plant and equipment



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



Plant and equipment are measured on the
cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets.



Depreciation



The depreciable amount of all fixed assets
is depreciated on a straight-line basis over their useful lives to the Company commencing from the time the asset is held ready
for use.



The depreciation rates used for each class of depreciable assets
are:



|Class of fixed
    asset |  | Depreciation
    rate
|------------------------ |  | ---------------------
|Furniture and fittings   |  | 111⁄2% - 30%           
|Computer equipment       |  | 371⁄2% - 60%           



The assets’ residual values and useful
lives are reviewed, and adjusted if appropriate, at each statement of financial position date.



An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses
on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement
of profit or loss and other comprehensive income.



Leases



The determination of whether an arrangement
is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.



A distinction is made between finance leases,
which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased
assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.



Finance leases are capitalised. A lease
asset and liability are established at the fair value of the leased assets, or if lower, the present value of minimum lease payments.
Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant
rate of interest on the remaining balance of the liability.



Leased assets acquired under a finance
lease are depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term
if there is no reasonable certainty that the Consolidated Entity will obtain ownership at the end of the lease term.



Operating lease payments, net of
any incentives received from the lessor, are charged to profit or loss on a straight line basis over the term of the lease.



F-13


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



Intangible assets



Intangible assets acquired as part of a
business combination, other than goodwill, are initially measured at their fair value at the date of acquisition. Intangible assets
acquired separately are initially recognised at cost. Intangible assets are subsequently measured at cost less amortisation and
any impairment. The gains or losses recognised in profit or loss arising from de-recognition of intangible assets are measured
as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of
finite life intangibles are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.



Goodwill



Goodwill arises on the acquisition of a
business combination. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more frequently if events
or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Impairment
losses on goodwill are taken to profit or loss and are not subsequently reversed.



The amortisation rates used for each class
of amortisable assets are:



|Class of fixed
    asset        |  | Amortisation
    rate (1)
|------------------------------- |  | -------------------------
|Intellectual Property           |  | 20% - 50% per annum      
|Customer Database               |  | 100% per annum           
|Capitalised product development |  | 50% per annum            
|Customer contracts              |  | 50% per annum            
|Software                        |  | 50% per annum            



| | (1) | Straight line amortisation is used as this reflects the periods over which the Consolidated Entity
expects to realise the benefits from the underlying assets
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



Research and development



Research costs are expensed in the period
in which they are incurred. Development costs are capitalised when it is probable that the project will be a success considering
its commercial and technical feasibility; the Consolidated Entity is able to use or sell the asset; the Consolidated Entity has
sufficient resources; and intent to complete the development and its costs can be measured reliably. Capitalised development costs
are amortised on a straight line basis over the period of their expected benefit.



Customer contracts



Customer contracts acquired in a business
combination are amortised on a straight line basis over the period of their expected benefit



Software



Software costs associated with software
are deferred and amortised on a straight line basis over the period of their expected benefit.



Customer database



Customer database acquired in a business
combination are amortised on a straight line basis over the period of their expected benefit.



Impairment of non-financial assets



Goodwill and other intangible assets that
have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events
or changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable amount.



Recoverable amount is the higher of an
asset's fair value less costs to sell and value-in-use. The value-in-use is the present value of the estimated future cash flows
relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets
that do not have independent cash flows are grouped together to form a cash-generating unit.



F-14


Table of Contents


NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



Trade and other payables



These amounts represent liabilities for
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition.



Compound financial instruments



Compound financial instruments issued by
the Consolidated Entity comprise convertible notes that can be converted to share capital at the option of the Consolidated Entity,
and the number of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial
instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The
equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole
and the fair value of the liability component.



Subsequent to initial recognition, the
liability component of a compound financial instrument is measured at amortised cost using the effective interest method until
extinguished on conversion or upon the instruments reaching maturity. The equity component of a compound financial instrument is
not measured subsequent to initial recognition. Distributions to the convertible note holders are recognised against equity.



Employee benefits



Provision is made for the Consolidated
Entity’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that
are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled,
plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future
cash outflows to be made for those benefits using the government bond discount rates with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.



Share based payments



When goods or services received are acquired
in a share-based payment transaction, they are recognised as expenses or assets, as determined by the nature of the goods or services
received, over the vesting period attached to the equity instrument acquired in the transaction. A corresponding increase is recognised
in equity.



The goods or services are measured by reference
to the fair value of goods or services received, or where this is not possible, indirectly, by reference to the fair value of the
equity instrument acquired at grant date.



The fair value of securities provided to
directors and employees is determined by reference to the fair value of the equity instrument granted.



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.



Business combinations



The acquisition method of accounting is
used to account for business combinations regardless of whether equity instruments or other assets are acquired.



The consideration transferred is the sum
of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer
to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination,
the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree’s
identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.



F-15


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



On the acquisition of a business, the Consolidated
Entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance
with the contractual terms, economic conditions, the Consolidated Entity’s operating or accounting policies and other pertinent
conditions in existence at the acquisition date. The difference between the acquisition date fair value of assets acquired, liabilities
assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value
of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing
fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference
is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date,
but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in
the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.



Business combinations are initially accounted
for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional
assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed
at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or
(ii) when the acquirer receives all the information possible to determine fair value and at which time the business combination
accounting is final.



Earnings per share



Basic earnings per share



Basic earnings per share is calculated
by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary
shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year.



Diluted earnings per share



Diluted earnings per share adjusts the
figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and
other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary shares.



Goods and Services Tax (GST)



Revenues, expenses and assets are recognised
net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is
recognised as part of the cost of acquisition of the asset or as part of the expense.



Receivables and payables are stated inclusive
of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included
with other receivables or payables in the statement of financial position.



Cash flows are presented on a gross basis.
The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation
authority, are presented as operating cash flow.



New accounting standards and interpretations that are
not yet mandatory



Australian Accounting Standards and Interpretations
that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Consolidated Entity for
the annual reporting period ended 30 June 2014, unless noted below. The Consolidated Entity's assessment of the impact of these
new or amended Accounting Standards and Interpretations, most relevant to the Consolidated Entity, are set out below.



AASB 9 Financial Instruments and its consequential amendments



This standard and its consequential amendments
are applicable to annual reporting periods beginning on or after 1 January 2017 and completes phases I and III of the IASB's project
to replace IAS 39 (AASB 139) 'Financial Instruments: Recognition and Measurement'. This standard introduces new classification
and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised
cost or fair value. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139,
with one exception, being that the portion of a change of fair value relating to the entity's own credit risk is to be presented
in other comprehensive income unless it would create an accounting mismatch. Chapter 6 'Hedge Accounting' supersedes the general
hedge accounting requirements in AASB 139 and provides a new simpler approach to hedge accounting that is intended to more closely
align with risk management activities undertaken by entities when hedging financial and non-financial risks. The Consolidated
Entity will adopt this standard and the amendments from 1 July 2017 but the impact of its adoption is yet to be assessed by the
Consolidated Entity.





F-16


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 1: Significant accounting policies (continued)



AASB 2012-3 Amendments to Australian Accounting Standards
- Offsetting Financial Assets and Financial Liabilities



The amendments are applicable to annual
reporting periods beginning on or after 1 January 2014.The amendments add application guidance to address inconsistencies in the
application of the offsetting criteria in AASB 132 'Financial Instruments: Presentation', by clarifying the meaning of 'currently
has a legally enforceable right of set-off'; and clarifies that some gross settlement systems may be considered to be equivalent
to net settlement. The adoption of the amendments from 1 July 2014 will not have a material impact on the Consolidated Entity.



AASB 2013-3 Amendments to AASB 136 - Recoverable Amount
Disclosures for Non-Financial Assets



These amendments are applicable to annual
reporting periods beginning on or after 1 January 2014, however Moko has elected to early adopt, from 1 January 2014. The disclosure
requirements of AASB 136 'Impairment of Assets' have been enhanced to require additional information about the fair value measurement
when the recoverable amount of impaired assets is based on fair value less costs of disposals. The adoption of these amendments
from 1 January 2014 has resulted in additional disclosure of the discount rate is used in measuring recoverable amounts where a
present value technique was used.



AASB 2013-4 Amendments to Australian Accounting Standards
- Novation of Derivatives and Continuation of Hedge Accounting



These amendments are applicable to annual
reporting periods beginning on or after 1 January 2014 and amends AASB 139 'Financial Instruments: Recognition and Measurement'
to permit continuation of hedge accounting in circumstances where a derivative (designated as hedging instrument) is novated from
one counter party to a central counterparty as a consequence of laws or regulations. The adoption of these amendments from 1 July
2014 will not have a material impact on the Consolidated Entity.



AASB 2013-5 Amendments to Australian Accounting Standards
- Investment Entities



These amendments are applicable to annual
reporting periods beginning on or after 1 January 2014 and allow entities that meet the definition of an 'investment entity' to
account for their investments at fair value through profit or loss. An investment entity is not required to consolidate investments
in entities it controls, or apply AASB 3 'Business Combinations' when it obtains control of another entity, nor is it required
to equity account or proportionately consolidate associates and joint ventures if it meets the criteria for exemption in the standard.
The adoption of these amendments from 1 July 2014 will have no impact on the Consolidated Entity.



Annual Improvements to IFRSs 2010-2012 Cycle



These amendments are applicable to annual
reporting periods beginning on or after 1 July 2014 and affects several Accounting Standards as follows: Amends the definition
of 'vesting conditions' and 'market condition' and adds definitions for 'performance condition' and 'service condition' in AASB
2 'Share-based Payment'; Amends AASB 3 'Business Combinations' to clarify that contingent consideration that is classified as an
asset or liability shall be measured at fair value at each reporting date; Amends AASB 8 'Operating Segments' to require entities
to disclose the judgements made by management in applying the aggregation criteria; Clarifies that AASB 8 only requires a reconciliation
of the total reportable segments assets to the entity's assets, if the segment assets are reported regularly; Clarifies that the
issuance of AASB 13 'Fair Value Measurement' and the amending of AASB 139 'Financial Instruments: Recognition and Measurement'
and AASB 9 'Financial Instruments' did not remove the ability to measure short-term receivables and payables with no stated interest
rate at their invoice amount, if the effect of discounting is immaterial; Clarifies that in AASB 116 'Property, Plant and Equipment'
and AASB 138 'Intangible Assets', when an asset is revalued the gross carrying amount is adjusted in a manner that is consistent
with the revaluation of the carrying amount (i.e. proportional restatement of accumulated amortisation); and Amends AASB 124 'Related
Party Disclosures' to clarify that an entity providing key management personnel services to the reporting entity or to the parent
of the reporting entity is a 'related party' of the reporting entity. The adoption of these amendments from 1 July 2014 will not
have a material impact on the Consolidated Entity.



Annual Improvements to IFRSs 2011-2013 Cycle



These amendments are applicable to annual
reporting periods beginning on or after 1 July 2014 and affects four Accounting Standards as follows: Clarifies the 'meaning of
effective IFRSs' in AASB 1 'First-time Adoption of Australian Accounting Standards'; Clarifies that AASB 3 'Business Combination'
excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement
itself; Clarifies that the scope of the portfolio exemption in AASB 13 'Fair Value Measurement' includes all contracts accounted
for within the scope of AASB 139 'Financial Instruments: Recognition and Measurement' or AASB 9 'Financial Instruments', regardless
of whether they meet the definitions of financial assets or financial
liabilities as defined in AASB 132 'Financial Instruments: Presentation'; and Clarifies that determining whether a specific transaction
meets the definition of both a business combination as defined in AASB 3 'Business Combinations' and investment property as defined
in AASB 140 'Investment Property' requires the separate application of both standards independently of each other. The adoption
of these amendments from 1 July 2014 will not have a material impact on the Consolidated Entity.



F-17


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 2: Financial risk management



Financial risk management objectives



The Consolidated Entity's activities expose
it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity
risk. The overall risk management strategy focuses on the unpredictability of the finance markets and seeks to minimise the potential
adverse effects on the financial performance. The Consolidated Entity's uses derivative financial instruments such as forward foreign
exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading
or other speculative instruments. The Consolidated Entity's uses different methods to measure different types of risk to which
it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks,
ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk. Risk management
is carried out under the direction of the Board.



Market risk



Foreign currency risk



The Consolidated Entity undertakes certain
transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations.



Foreign exchange risk arises from future
commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's
functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.



In order to protect against exchange rate
movements, the Consolidated Entity has entered into forward foreign exchange contracts. These contracts are hedging highly probable
forecasted cash flows for the ensuing financial year.



The maturity, settlement amounts and the
average contractual exchange rates of the Consolidated Entity's outstanding forward foreign exchange contracts at the reporting
date was as follows:





|               |  | Sell
    Australian dollars |   |  | Average
    exchange rates | 
|-------------- |  | --------------------------- | - |  | -------------------------- | 
|               |  | 2014                        |   |  | 2013                       | 
|               |  | $                           |   |  | $                          | 
|Buy US dollars |  |                             |   |  |                            | 
|Maturity:      |  |                             |   |  |                            | 
|0 - 3 months   |  |                             | - |  |                            | 





The carrying amounts of the Consolidated
Entity's foreign currency denominated financial assets and financial liabilities at the reporting date, expressed in Australian
dollars, were as follows:



|                      |  | Assets |           |  | Liabilities | 
|--------------------- |  | ------ | --------- |  | ----------- | 
|                      |  | 2014   |           |  | 2013        | 
|                      |  |        | $         |  |             | 
|Consolidated          |  |        |           |  |             | 
|United States dollars |  |        | 5,109,454 |  |             | 
|Great British pounds  |  |        | 14,655    |  |             | 
|                      |  |        | 5,124,109 |  |             | 



Sensitivity analysis



The Consolidated Entity had net assets
denominated in foreign currencies of $2,696,318 (assets $5,124,109 less liabilities $2,427,791) as at 30 June 2014 (2013 net assets:
of $811,118 (assets $2,301,236 less liabilities $1,490,117)). Based on this exposure, had the Australian dollar weakened by 10%/strengthened
by 5% (2013: weakened by 10%/strengthened by 5%) against these foreign currencies with all other variables held constant, the Consolidated
Entity's loss before tax for the year would have been $269,632 higher/$134,816 lower (2013: $81,112 higher/$40,556 lower). The
percentage change is the expected overall volatility of the significant
currencies, which is based on management's assessment of reasonable possible fluctuations taking into consideration movements over
the last 6 months each year and the spot rate at each reporting date. The actual foreign exchange loss for the year ended 30 June
2014 was $142,664 (2013: loss of $462,918).



F-18


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 2: Financial risk management (continued)



Price risk



The Consolidated Entity is not exposed
to any significant price risk.



Interest rate risk



The Consolidated Entity’s income
and operating cash flows are not materially exposed to changes in market interest rates.



At the reporting date the interest rate profile of the Consolidated
Entity’s interest bearing financial instruments was:



|                          |  | 30-Jun-14                      |      |   | 30-Jun-13 | 
|------------------------- |  | ------------------------------ | ---- | - | --------- | 
|                          |  | Weighted average interest rate |      |   | Balance   | 
|                          |  | %                              |      |   | $         | 
|Variable rate instruments |  |                                |      |   |           | 
|Cash at bank              |  |                                | 2.03 | % |           | 
|                          |  |                                |      |   |           | 
|Fixed rate instruments    |  |                                |      |   |           | 
|Term deposits             |  |                                | 3.60 | % |           | 
|Term deposits             |  |                                | 3.45 | % |           | 
|Term deposits             |  |                                | 3.80 | % |           | 
|                          |  |                                |      |   |           | 



Cash flow sensitivity analysis for variable rate instruments



A change of 75 basis points in interest
rates would increase or decrease the Consolidated Entity’s loss by $74,085 (2013: $18,894), based on the cash at bank at
reporting date and calculated on an annual basis. The Board assessed a 75 basis point movement as being reasonably possible based
on short term historical movements. This analysis assumes that all other variables remain constant.



Credit risk



Credit risk refers to the risk that a counterparty
will default on its contractual obligations resulting in financial loss to the Consolidated Entity. For the Company, it arises
from receivables due from subsidiaries.



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



The Consolidated Entity trades only with
recognised, creditworthy third parties, and as such collateral is not requested nor is it the Consolidated Entity’s policy
to securitise its trade and other receivables.



Trade and other receivables



It is the Consolidated Entity's policy
that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their
credit rating, financial position, past experience and industry reputation, noting that the majority of counter parties are large
telecommunication organisations.



In addition, receivable balances are monitored
on an ongoing basis and as a result that the Consolidated Entity’s experience of bad debts has not been significant.



The Consolidated Entity does not have any
material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the
Consolidated Entity.



Liquidity risk



Vigilant liquidity risk management
requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and cash equivalents) to be able to pay
debts as and when they become due and payable.



F-19


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 2: Financial risk management (continued)



The Consolidated Entity manages liquidity
risk by maintaining adequate at call cash reserves and available borrowing facilities by continuously monitoring actual and forecast
cash flows and matching the maturity profiles of financial assets and liabilities.



Remaining contractual maturities



The following tables detail the Consolidated
Entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted
cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. All
liabilities were non-derivative and non-interest bearing.



|Consolidated - 2014   |  | Weighted average interest rate % |   |  | 1 year or less |  |           | Between 1 and 2 years |  |  | Between 2 and 5 years |  |  | Over 5 years |   |  | Remaining contractual maturities | 
|--------------------- |  | -------------------------------- | - |  | -------------- |  | --------- | --------------------- |  |  | --------------------- |  |  | ------------ | - |  | -------------------------------- | 
|                      |  |                                  |   |  |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Non-derivatives       |  |                                  |   |  |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Non-interest bearing  |  |                                  |   |  |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Trade payables        |  |                                  | - |  |                |  | 1,594,143 |                       |  |  | -                     |  |  |              | - |  |                                  | 
|Other payables        |  |                                  | - |  |                |  | 969,468   |                       |  |  | -                     |  |  |              | - |  |                                  | 
|Total non-derivatives |  |                                  |   |  |                |  | 2,563,611 |                       |  |  | -                     |  |  |              | - |  |                                  | 



|Consolidated - 2013           |  | Weighted average interest rate % |    |   | 1 year or less |  |           | Between 1 and 2 years |  |  | Between 2 and 5 years |  |  | Over 5 years |   |  | Remaining contractual maturities | 
|----------------------------- |  | -------------------------------- | -- | - | -------------- |  | --------- | --------------------- |  |  | --------------------- |  |  | ------------ | - |  | -------------------------------- | 
|                              |  |                                  |    |   |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Non-derivatives               |  |                                  |    |   |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Non-interest bearing          |  |                                  |    |   |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Trade payables                |  |                                  | -  |   |                |  | 743,285   |                       |  |  | -                     |  |  |              | - |  |                                  | 
|Other payables                |  |                                  | -  |   |                |  | 1,071,259 |                       |  |  | -                     |  |  |              | - |  |                                  | 
|                              |  |                                  |    |   |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Interest bearing – fixed rate |  |                                  |    |   |                |  |           |                       |  |  |                       |  |  |              |   |  |                                  | 
|Convertible notes             |  |                                  | 10 | % |                |  | 205,699   |                       |  |  | -                     |  |  |              | - |  |                                  | 
|Revolving line of credit      |  |                                  | 12 | % |                |  | 930,691   |                       |  |  | -                     |  |  |              | - |  |                                  | 
|Total non-derivatives         |  |                                  |    |   |                |  | 2,950,934 |                       |  |  | -                     |  |  |              | - |  |                                  | 



The cash flows in the maturity analysis
above are not expected to occur significantly earlier than contractually disclosed above.



Fair value of financial instruments



The fair values of financial assets and
liabilities are determined in accordance with generally accepted pricing models based on estimated future cash flows. The Directors
consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements approximate
their fair values.



AASB 7 Financial Instruments: Disclosures
requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:



| | (a) | quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
| | --- | ------------------------------------------------------------------------------------------

| | (b) | inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (level 2), and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
| | --- | ---------------------------------------------------------------------------------------------------------------



Deferred contingent consideration liability is measured and
recognised at fair value at 30 June 13 and is classified as level 3.



F-20


Table of Contents


NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 3: Critical accounting estimates and judgements



The preparation of the financial statements
requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements.
Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed
below.



Share-based payment transactions



The Consolidated Entity measures the cost
of equity-settled transactions with directors, employees and limited suppliers, by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by using either a Binomial, Black-Scholes or other estimation
model such as a trinomial barrier option model after taking into account the terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying
amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.



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 knowledge of the individual debtors financial
position.



Fair value and hierarchy of financial
instruments



The Consolidated Entity is required to
classify financial instruments, measured at fair value, using a three level hierarchy, being: Level 1: Quoted prices (unadjusted)
in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: Inputs for
the asset or liability that are not based on observable market data (unobservable inputs). An instrument is required to be classified
in its entirety on the basis of the lowest level of valuation inputs that is significant to fair value. Considerable judgement
is required to determine what is significant to fair value and therefore which category the financial instrument is placed in can
be subjective.

The fair value of financial instruments
classified as level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the use of observable
inputs that require significant adjustments based on unobservable inputs.



Estimation of useful lives of assets



The Consolidated Entity determines the
estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life
intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation
and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete
or non-strategic assets that have been abandoned or sold will be written off or written down.



Goodwill and other indefinite life intangible
assets



The Consolidated Entity tests annually,
or more frequently if events or changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible
assets have suffered any impairment, in accordance with the accounting policy stated in note 1. The recoverable amounts of cash-generating
units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated
discount rates based on the current cost of capital and growth rates of the estimated future cash flows.



Long service leave provision



Per note 1, the liability for long service
leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees
at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through
promotion and inflation have been taken into account.



Business combinations



As discussed in note 1, business combinations
are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent liabilities assumed
are initially estimated by the Consolidated Entity taking into consideration all available information at the reporting date. Fair
value adjustments on the finalisation of the business combination accounting is retrospective, where applicable, to the period
the combination occurred and may have an impact on the assets and liabilities, depreciation and amortisation reported, when the
accounting is finalised.

F-21


Table of Contents


NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 4: Segment information



MOKO Social Media Limited is organized
into four operating segments: Mobile Social, Mobile Advertising, Mobile Content and Mobile Commerce. These operating segments are
based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision
Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating
segments.

The CODM reviews EBITDA (earnings before
interest, tax, depreciation and amortization). The accounting policies adopted for internal reporting to the CODM are consistent
with those adopted in the financial statements.



The information reported to the CODM is
on at least a monthly basis.



Types of products and services

The principal products and services of
each of these operating segments are as follows:



|Mobile Social      | MOKO’s proprietary mobile social networks and community/chat products                                                                      
|------------------ | -------------------------------------------------------------------------------------------------------------------------------------------
|                   |                                                                                                                                            
|Mobile Advertising | MOKO’s own proprietary mobile performance ad network and customised mobile publishing division                                             
|                   |                                                                                                                                            
|Mobile Content     | MOKO’s UK division that bundles and sells mobile content and entertainment products direct to mobile consumers (discontinued and inactive) 
|                   |                                                                                                                                            
|Mobile Commerce    | MOKO’s subsidiary e-commerce platform. Sales volumes and average revenue per user grew via diversified marketing channels and product range



Intersegment receivables, payables and
loans

Intersegment loans are initially recognised
at the consideration received. Intersegment loans receivable and loans payable that earn or incur non-market interest are not adjusted
to fair value based on market interest rates. Intersegment receivables, payables and loans are eliminated on consolidation.



Basis of segmentation

The basis of segmentation for the 2014
financial year changed where general administrative and corporate expenses are now allocated to Mobile Advertising rather than
to Mobile Social where they were previously. The 2013 and 2012 prior periods have been restated. This change is effective 1 July
2013 and reflects the Board’s view that Mobile Advertising now consumes the general administrative and corporate resources
of the Group consistent with MOKO’s narrowed strategic focus.



F-22


Table of Contents








NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2014



Note 4: Segment information (continued)



Operating segment information



|Continuing operations         
|------------------------------
|Consolidated  -30 June 2014   
|                              
|Total segment revenue         
|                              
|EBITDA                        
|                              
|Depreciation and amortisation 
|Interest income               
|Finance costs                 
|Loss before income tax expense
|Income tax benefit            
|Loss after income tax expense 
|                              
|Assets                        
|Liabilities                   



|Continuing operations         
|------------------------------
|Consolidated  -30 June 2013   
|                              
|                              
|Total segment revenue         
|                              
|EBITDA                        
|                              
|Depreciation and amortisation 
|Other income                  
|Finance costs                 
|Loss before income tax expense
|Income tax benefit            
|Loss after income tax expense 
|                              
|Assets                        
|Liabilities                   



F-23


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 4: Segment information (continued)



|Continuing operations         
|------------------------------
|Consolidated  -30 June 2012   
|                              
|                              
|Total segment revenue         
|                              
|EBITDA                        
|                              
|Depreciation and amortisation 
|Other income                  
|Finance costs                 
|Loss before income tax expense
|Income tax benefit            
|Loss after income tax expense 
|                              
|Assets                        
|Liabilities                   



Geographical information





|Continuing operations                                     | 
|--------------------------------------------------------- | 
|Consolidated - 30 June 2014                               | 
|                                                          | 
|                                                          | 
|Sales to external customers                               | 
|Add: Interest income                                      | 
|Add: Other income and revenue                             | 
|Add: Fair value gain on deferred contingent consideration | 
|Less: Cost of providing goods and services                | 
|Less: Expenses *                                          | 
|Loss after income tax expense                             | 
|                                                          | 
|Assets                                                    | 
|Liabilities                                               | 







* Overhead expenses are not associated to any one particular segment.



F-24


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 4: Segment information (continued)



|Continuing operations                                     | 
|--------------------------------------------------------- | 
|Consolidated - 30 June 2013                               | 
|                                                          | 
|                                                          | 
|Sales to external customers                               | 
|Add: Other Income and revenue                             | 
|Add: Fair value gain on deferred contingent consideration | 
|Less: Cost of providing goods and services                | 
|Less Expenses *                                           | 
|Loss after income tax expense                             | 
|                                                          | 
|Assets                                                    | 
|Liabilities                                               | 
|                                                          | 
|Consolidated - 30 June 2012                               | 
|                                                          | 
|Sales to external customers                               | 
|Add: Other Income and revenue                             | 
|Less: Cost of providing goods and services                | 
|Less Expenses *                                           | 
|Loss after income tax expense                             | 
|                                                          | 
|Assets                                                    | 
|Liabilities                                               | 



* Overhead expenses are not associated to any one particular
segment.



Note 5: Revenue and income



|                                          |  | Consolidated |          
|----------------------------------------- |  | ------------ | ---------
|                                          |  | 2014         |          
|                                          |  | $            |          
|Revenue from continuing operations        |  |              |          
|Rendering of services                     |  |              | 3,953,580
|Sale goods                                |  |              | 4,274,571
|                                          |  |              | 8,228,151
|                                          |  |              |          
|Interest received                         |  |              | 104,850  
|                                          |  |              |          
|Other income and revenue                  |  |              |          
|Grants received                           |  |              | 172,655  
|Income from Sales of Business             |  |              | 109,493  
|                                          |  |              | 282,148  
|                                          |  |              |          
|Fair value gain on deferred consideration |  |              | 383,933  



F-25


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 6: Expenses



Loss before income tax from continuing operations includes the
following specific expenses:









|                                    |  | Consolidated |          
|----------------------------------- |  | ------------ | ---------
|                                    |  | 2014         |          
|                                    |  | $            |          
|Depreciation                        |  |              |          
|Computer equipment                  |  |              | 41,576   
|Furniture and fittings              |  |              | 899      
|Total depreciation                  |  |              | 42,475   
|                                    |  |              |          
|Amortisation                        |  |              |          
|Computer software                   |  |              | 3,065    
|Customer contracts                  |  |              | -        
|Capitalised product development     |  |              | 19,648   
|Intellectual Property               |  |              | 834,050  
|Customer database                   |  |              | 325,000  
|Total amortisation                  |  |              | 1,181,763
|                                    |  |              |          
|Total depreciation and amortisation |  |              | 1,224,238
|                                    |  |              |          
|Impairment expense                  |  |              |          
|Goodwill                            |  |              | -        
|                                    |  |              |          
|Employee benefits expense           |  |              |          
|Salaries and wages                  |  |              | 3,512,198
|Superannuation & Work Compensation  |  |              | 284,322  
|Total employee benefits expense     |  |              | 3,796,520
|                                    |  |              |          
|Share based payments                |  |              | 5,144,968







F-26


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 7: Income tax benefit



|                                                                                          |  | Consolidated |            
|----------------------------------------------------------------------------------------- |  | ------------ | -----------
|                                                                                          |  | 2014         |            
|                                                                                          |  | $            |            
|Income tax expense                                                                        |  |              |            
|Current tax                                                                               |  |              | 469,277    
|Current tax - Research and Development tax offset                                         |  |              | (1,082,953 
|Deferred tax                                                                              |  |              | (440,229   
|Aggregate income tax benefit                                                              |  |              | (1,053,905 
|                                                                                          |  |              |            
|Income tax benefit is attributable to:                                                    |  |              |            
|Loss/(profit) from continuing operations                                                  |  |              | (1,053,905 
|Profit from discontinued operations                                                       |  |              | -          
|Aggregate income tax benefit                                                              |  |              | (1,053,905 
|Prima facie tax on loss before income tax is reconciled to income tax expense as follows: |  |              |            
|Loss from continuing operations before income tax benefit                                 |  |              | (14,650,364
|Loss from discontinued operations before income tax benefit                               |  |              | -          
|                                                                                          |  |              | (14,650,364
|                                                                                          |  |              |            
|Prima facie tax refund on loss before income tax at 30%                                   |  |              | (4,395,109 
|Adjustment for jurisdictional differences in tax rates                                    |  |              | 1,429      
|Add tax effect of:                                                                        |  |              |            
|Non-allowable items                                                                       |  |              | 1,666,685  
|Non-assessable items                                                                      |  |              | (142,638   
|Tax losses and timing differences not brought to account (continuing operations)          |  |              | 2,898,681  
|Tax losses and timing differences not brought to account (discontinued operations)        |  |              | -          
|                                                                                          |  |              |            
|Research and Development tax offset                                                       |  |              | (1,082,953 
|Tax expense                                                                               |  |              | 29,048     
|Adjustment recognised for prior periods                                                   |  |              | -          
|Income tax benefit                                                                        |  |              | (1,053,905 



MOKO has historically made claims in accordance
with the Commonwealth Government's Research and Development Tax Incentive Regime which has operated since 1 July 2011 and wherein
a 45% refundable tax offset is available on eligible and uncapped R&D expenditure, to companies that have grouped aggregated
turnover of less than $20 million.



F-27


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 7: Income tax benefit (continued)



The following research and development
tax offsets were received as cash rebates in the past three years:



|Fiscal year |  | Tax
    offset value |           |  | Date received
|----------- |  | -------------------- | --------- |  | -------------
|            |  | $                    |           |  |              
|2014        |  |                      | 1,082,953 |  |              
|2013        |  |                      | 1,008,231 |  |              
|2012        |  |                      | 566,742   |  |              





|                                          |  | Consolidated |        
|----------------------------------------- |  | ------------ | -------
|                                          |  | 2014         |        
|                                          |  | $            |        
|Recognised deferred tax assets:           |  |              |        
|Share based payments – non qualified plan |  |              | 427,719





Tax losses not recognised:



|Tax losses carried forward                                      |  |  | 18,027,944 |  |  |  | 9,737,091  |  |  |  | 8,710,890 | 
|--------------------------------------------------------------- |  |  | ---------- |  |  |  | ---------- |  |  |  | --------- | 
|Other Temporary differences not recognised                      |  |  | 3,854,686  |  |  |  | 1,209,025  |  |  |  | 751,305   | 
|Unused tax losses for which no deferred tax has been recognised |  |  | 21,882,630 |  |  |  | 10,946,116 |  |  |  | 9,462,195 | 
|Potential tax benefit at notional rate of tax (30%)             |  |  | 6,564,789  |  |  |  | 3,283,835  |  |  |  | 2,838,659 | 



No amounts have been recognised for deferred
tax on unutilised tax losses as it is not yet probable that future taxable amounts will be available against which the Company
will utilise these assets in future years.



Note 8: Cash and cash equivalents



|             |  | Consolidated |          
|------------ |  | ------------ | ---------
|             |  | 2014         |          
|             |  | $            |          
|             |  |              |          
|Cash on hand |  |              | 500      
|Cash at bank |  |              | 9,877,511
|             |  |              | 9,878,011



Note 9: Trade and other receivables



|Trade receivables                             |  |  | 840,676 |   |  |  | 845,145 |  
|--------------------------------------------- |  |  | ------- | - |  |  | ------- | -
|Less: Provision for impairment of receivables |  |  | (55,804 | ) |  |  | (21,247 | )
|                                              |  |  | 784,872 |   |  |  | 823,898 |  



Impairment of receivables



The Consolidated Entity has recognised
a loss of $50,596 (2013: $21,247) in the statement of profit or loss and other comprehensive income in respect of impairment of
receivables for the year ended 30 June 2014.



The ageing of the impaired receivables provided for above are
as follows:



|1-30 days  |  |  | -      |  |  |  | -      | 
|---------- |  |  | ------ |  |  |  | ------ | 
|31-60 days |  |  | -      |  |  |  | -      | 
|61-90 days |  |  | -      |  |  |  | -      | 
|90+ days   |  |  | 55,804 |  |  |  | 21,247 | 
|           |  |  | 55,804 |  |  |  | 21,247 | 



F-28


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 9: Trade and other receivables (continued)



Movements in the provision for impairment of receivables are
as follows:



|                                       |  | Consolidated |        
|-------------------------------------- |  | ------------ | -------
|                                       |  | 2014         |        
|                                       |  | $            |        
|Opening Balance                        |  |              | 21,247 
|Additional provisions recognised       |  |              | 50,596 
|Reversal of impairment during the year |  |              | (16,039
|Closing Balance                        |  |              | 55,804 



Past due but not impaired



Customers with balances past due but without
provision for impairment of receivables amount to $232,125 as at 30 June 2014 ($189,898 as at 30 June 2013).



The Consolidated Entity did not consider
a credit risk on the aggregate balances after reviewing credit terms of customers based on recent collection practices.



The ageing of the past due but not impaired
receivables are as follows:



|31-60 days |  |  | 104,235 |  |  |  | 24,550  | 
|---------- |  |  | ------- |  |  |  | ------- | 
|61-90 days |  |  | 52,185  |  |  |  | 23,862  | 
|90+ days   |  |  | 75,705  |  |  |  | 141,486 | 
|           |  |  | 232,125 |  |  |  | 189,898 | 



Note 10: Other current assets



|              |  | Consolidated |        
|------------- |  | ------------ | -------
|              |  | 2014         |        
|              |  | $            |        
|Other debtors |  |              | 142,980
|Deposit       |  |              | 70,000 
|Prepayments   |  |              | 228,716
|              |  |              | 441,696



F-29


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 11: Property, plant and equipment



|Consolidated 2013                              |  | Computer
    equipment |          |   | Furniture and
    fittings |  |          | Total | 
|---------------------------------------------- |  | ---------------------- | -------- | - | -------------------------- |  | -------- | ----- | 
|                                               |  |                        |          |   |                            |  |          |       | 
|Cost                                           |  |                        | 599,527  |   |                            |  | 185,156  |       | 
|Accumulated depreciation                       |  |                        | (526,865 | ) |                            |  | (185,156 | )     | 
|Balance at 30 June 2013                        |  |                        | 72,662   |   |                            |  | -        |       | 
|                                               |  |                        |          |   |                            |  |          |       | 
|Reconciliation                                 |  |                        |          |   |                            |  |          |       | 
|Balance at 1 July 2012                         |  |                        | 335,934  |   |                            |  | 457,405  |       | 
|Additions                                      |  |                        | 3,013    |   |                            |  | 74,397   |       | 
|Disposals                                      |  |                        | -        |   |                            |  | (74,405  | )     | 
|Derecognised on disposal of subsidiary         |  |                        | (34,755  | ) |                            |  | (337,267 | )     | 
|Depreciation expense                           |  |                        | (231,242 | ) |                            |  | (90,642  | )     | 
|Effects of movements on foreign exchange rates |  |                        | (288     | ) |                            |  | (29,488  | )     | 
|Balance at 30 June 2013                        |  |                        | 72,662   |   |                            |  | -        |       | 
|                                               |  |                        |          |   |                            |  |          |       | 
|Consolidated 2014                              |  |                        |          |   |                            |  |          |       | 
|                                               |  |                        |          |   |                            |  |          |       | 
|Cost                                           |  |                        | 634,982  |   |                            |  | 40,777   |       | 
|Accumulated depreciation                       |  |                        | (559,919 | ) |                            |  | (28,114  | )     | 
|Balance at 30 June 2014                        |  |                        | 75,063   |   |                            |  | 12,663   |       | 
|                                               |  |                        |          |   |                            |  |          |       | 
|Reconciliation                                 |  |                        |          |   |                            |  |          |       | 
|Balance at 1 July 2013                         |  |                        | 72,662   |   |                            |  | -        |       | 
|Acquisitions through business combinations     |  |                        | 2,239    |   |                            |  | 245      |       | 
|Additions                                      |  |                        | 42,336   |   |                            |  | 13,322   |       | 
|Depreciation expense                           |  |                        | (41,576  | ) |                            |  | (899     | )     | 
|Effects of movements in exchange rates         |  |                        | (597     | ) |                            |  | (6       | )     | 
|Balance at 30 June 2014                        |  |                        | 75,064   |   |                            |  | 12,662   |       | 



F-30


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014





Note 12: Intangibles



|Consolidated 2013                              |  | Computer
    software |         |   | Customer
    Contracts |  |          | Capitalised 
    product  development  costs |  |  | Intellectual
    Property |   |  | Customer
    Database |            |   | Goodwill |  |          | TOTAL | 
|---------------------------------------------- |  | --------------------- | ------- | - | ---------------------- |  | -------- | -------------------------------------------- |  |  | ------------------------- | - |  | --------------------- | ---------- | - | -------- |  | -------- | ----- | 
|                                               |  |                       | $       |   |                        |  | $        |                                              |  |  | $                         |   |  |                       | $          |   |          |  | $        |       | 
|                                               |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Cost                                           |  |                       | 69,491  |   |                        |  | 207,411  |                                              |  |  | 71,506                    |   |  |                       | 4,066,408  |   |          |  | -        |       | 
|Accumulated amortisation/impairment            |  |                       | (69,491 | ) |                        |  | (207,411 | )                                            |  |  | (71,506                   | ) |  |                       | (625,776   | ) |          |  | -        |       | 
|Balance at 30 June 2013                        |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | 3,440,632  |   |          |  | -        |       | 
|                                               |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Reconciliation                                 |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Balance at 1 July 2012                         |  |                       | 22,775  |   |                        |  | 149,437  |                                              |  |  | 29,794                    |   |  |                       | -          |   |          |  | -        |       | 
|Acquisitions through business combinations     |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | 3,510,918  |   |          |  | -        |       | 
|Additions                                      |  |                       | 12,444  |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | -          |   |          |  | -        |       | 
|Amortisation expense                           |  |                       | (34,978 | ) |                        |  | (149,437 | )                                            |  |  | (29,794                   | ) |  |                       | (625,776   | ) |          |  | -        |       | 
|Impairment expense                             |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | -          |   |          |  | -        |       | 
|Effects of movements on foreign exchange rates |  |                       | (241    | ) |                        |  | -        |                                              |  |  | -                         |   |  |                       | 555,490    |   |          |  | -        |       | 
|Balance at 30 June 2013                        |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | 3,440,632  |   |          |  | -        |       | 
|                                               |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Consolidated
    2014                          |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Cost                                           |  |                       | 75,839  |   |                        |  | 207,411  |                                              |  |  | 110,803                   |   |  |                       | 3,932,447  |   |          |  | -        |       | 
|Accumulated amortisation                       |  |                       | (72,556 | ) |                        |  | (207,411 | )                                            |  |  | (91,154                   | ) |  |                       | (1,459,826 | ) |          |  | -        |       | 
|Balance at 30 June 2014                        |  |                       | 3,283   |   |                        |  | -        |                                              |  |  | 19,649                    |   |  |                       | 2,472,621  |   |          |  | -        |       | 
|                                               |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Reconciliation                                 |  |                       |         |   |                        |  |          |                                              |  |  |                           |   |  |                       |            |   |          |  |          |       | 
|Balance at 1 July 2013                         |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | 3,440,632  |   |          |  | -        |       | 
|Acquisitions through business combinations     |  |                       | -       |   |                        |  | -        |                                              |  |  | 39,297                    |   |  |                       | 49,470     |   |          |  | 325,000  |       | 
|Additions                                      |  |                       | 6,348   |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | -          |   |          |  | -        |       | 
|Disposals                                      |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | -          |   |          |  | -        |       | 
|Amortisation expense                           |  |                       | (3,065  | ) |                        |  | -        |                                              |  |  | (19,648                   | ) |  |                       | (834,050   | ) |          |  | (325,000 | )     | 
|Effects of movements in exchange rates         |  |                       | -       |   |                        |  | -        |                                              |  |  | -                         |   |  |                       | (183,431   | ) |          |  | -        |       | 
|Balance at 30 June 2014                        |  |                       | 3,283   |   |                        |  | -        |                                              |  |  | 19,649                    |   |  |                       | 2,472,621  |   |          |  | -        |       | 



F-31


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 12: Intangibles (continued)



Goodwill acquired through business combinations has been allocated
to the following cash-generating units:



|                                               |  | Mobile
    
Advertising (1) |         |   | Mobile
    
Commerce (2) |  |         | Total | 
|---------------------------------------------- |  | --------------------------- | ------- | - | ------------------------ |  | ------- | ----- | 
|                                               |  | $                           |         |   | $                        |  |         | $     | 
|                                               |  |                             |         |   |                          |  |         |       | 
|Balance at 1 July 2013                         |  |                             | 969,616 |   |                          |  | -       |       | 
|Acquisitions through business combinations     |  |                             | -       |   |                          |  | 179,727 |       | 
|Effects of movements on foreign exchange rates |  |                             | (31,463 | ) |                          |  | -       |       | 
|Balance at 30 June 2014                        |  |                             | 938,153 |   |                          |  | 179,727 |       | 



The recoverable amount of the Group's goodwill allocated to
Mobile Advertising has been determined by a value-in-use calculation at the cash generating unit level using a discounted cash
flow model, based on a 2 year projection period approved by management and extrapolated for a further 3 years using a steady growth
rate and a terminal value based on a long term average growth rate. The pre-tax discount rate of 40% p.a. was used to reflect management’s
estimate of the time value of money and the risk adjusted costs of capital specific to the Mobile Advertising cash generating unit.



The Directors do not consider goodwill allocated to Mobile Commerce
as significant to the total carrying value of Goodwill.



| | (1) | OfferMobi (‘OM’)
| | --- | ----------------



The goodwill acquired on acquisition is
deemed recoverable and no impairment expense has been recognized in the statement of profit or loss and other comprehensive income
during the period.



| | (2) | Deals I Love (Australia) Pty Ltd (‘DIL’)
| | --- | ----------------------------------------



The goodwill acquired on acquisition is
deemed recoverable and no impairment expense has been recognised in the statement of profit or loss and other comprehensive income
during the period.



Impairment expense



No goodwill was impaired and charged to
the statement of profit or loss and other comprehensive income during the period (2013: $1,487,137).



F-32


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 13: Business combinations



Acquisition of Deals I Love (Australia)
Pty Ltd



On 1 July 2013, MOKO Social Media Ltd completed
the acquisition of a controlling 51% share interest in a Sydney based e-commerce business, Deals I Love (Australia) Pty Ltd (DIL).
The acquisition represents a business combination and was made for the purpose of MOKO expanding into the growing mobile commerce
sector.



DIL sells merchant product that is sourced
internationally and domestically across the internet via pc’s and mobile interfaces through its website, www.dealsilove.com.au
to large quantities of individual customers.



The share acquisition included a purchase
of shares from a MOKO non-executive Director, Mr Johannes De Back, who after the acquisition has no further equity interest in
DIL.



Under the terms of the acquisition MOKO
was granted an option to acquire the remaining 49% of DIL and as a separate transaction agreed to loan funds to DIL for marketing
purposes, which bears interest of 10% per annum and is repayable on arms-length terms.



During the financial year, DIL contributed
revenues of $4,274,571 and made a net loss after tax of $207,980 for the period of 1 July 2013 to 30 June 2014.



The business combination accounting is
final and DIL is allocated to the Mobile Commerce segment in Australia.



|                              |  | Carrying value |          |   | Fair value | 
|----------------------------- |  | -------------- | -------- | - | ---------- | 
|                              |  |                |          |   |            | 
|Intangible assets             |  |                | -        |   |            | 
|Property, plant and equipment |  |                | 2,485    |   |            | 
|Cash and cash equivalents     |  |                | 36,958   |   |            | 
|Term deposit                  |  |                | 70,000   |   |            | 
|Trade receivables             |  |                | 7,125    |   |            | 
|Inventory                     |  |                | 1,264    |   |            | 
|Deferred Tax asset            |  |                | 381,091  |   |            | 
|Trade payables                |  |                | (590,414 | ) |            | 
|Loans-shareholders            |  |                | (60,000  | ) |            | 
|Loans-MOKO                    |  |                | (87,168  | ) |            | 
|                              |  |                |          |   |            | 
|Net assets acquired           |  |                | (238,659 | ) |            | 



|Goodwill                                                       |  |  | 179,727 | 
|-------------------------------------------------------------- |  |  | ------- | 
|                                                               |  |  |         | 
|Acquisition date fair value of total consideration transferred |  |  | 40,000  | 
|                                                               |  |  |         | 
|Satisfied By                                                   |  |  |         | 
|                                                               |  |  |         | 
|Consideration: options issued on 15 May 2014                   |  |  | 40,000  | 
|                                                               |  |  |         | 
|Total                                                          |  |  | 40,000  | 



Acquisition expenses of $16,047 for legal
fees and have not impacted this business combination accounting.



Goodwill of $179,727 represents expected
growth opportunities for DIL from new marketing channels such as ‘direct to consumer’ and additional monetization opportunities
from its user base, such as from mobile advertising.



Non-controlling interest at acquisition
was immaterial with a deemed fair value of nil and determined on the basis that future economic benefits were unlikely to be realised
but for the acquisition.



Fair value consideration was settled via
400,000 options exercisable at $0.10 each on or before 28 November 2015.

F-33


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 14: Deferred contingent consideration



|                                  |  | Consolidated |  
|--------------------------------- |  | ------------ | -
|                                  |  | 2014         |  
|                                  |  | $            |  
|Deferred contingent consideration |  |              | -



Reconciliation



|                                                |  | OfferMobi |  
|----------------------------------------------- |  | --------- | -
|Balance at 1 July 2013                          |  | 1,430,252 |  
|Less: payments made – cash                      |  | (443,955  | )
|Less: payments made – Shares                    |  | (602,364  | )
|Less: Fair value gain on deferred consideration |  | (383,933  | )
|Balance at 30 June 2014                         |  | -         |  



The fair value gain on deferred consideration
of $383,933 is the reversal, due to early settlement, of previously recognised deferred contingent consideration payable to Howmark
Mobile, LLC. (“Howmark”) shareholders in relation to the August 2012 acquisition of the Mobile Advertising business,
OfferMobi. MOKO’s settlement with Howmark occurred in October 2013.



Note 15: Trade and other payables



|Trade payables              |  |  | 1,594,143 |  |  |  | 743,285   | 
|--------------------------- |  |  | --------- |  |  |  | --------- | 
|Other payables and accruals |  |  | 969,468   |  |  |  | 1,071,259 | 
|                            |  |  | 2,563,611 |  |  |  | 1,814,544 | 



Note 16: Borrowings



|Convertible notes (1)       |  |  | - |  |  |  | 205,699   | 
|--------------------------- |  |  | - |  |  |  | --------- | 
|Revolving line of credit(2) |  |  | - |  |  |  | 930,691   | 
|                            |  |  | - |  |  |  | 1,136,390 | 



| | (1) | Director Johannes De Back’s loans were fully repaid by ordinary shares as part of the entitlement
issued on 11 September 2013 (2,500,000 shares) and 15 May 2014 (2,500,000 shares).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The TCA secured Loan Facility of USD$850,000 was repaid in July 2013 and the debt facility was
subsequently closed.
| | --- | -------------------------------------------------------------------------------------------------------------------





F-34


Table of Contents


NOTES TO THE FINANCIAL STATEMENTS



For the year ended
30 June 2014



Note 17: Employee benefits



|                  |  | Consolidated |        
|----------------- |  | ------------ | -------
|                  |  | 2014         |        
|Current           |  |              |        
|                  |  |              |        
|Employee benefits |  |              | 276,920
|                  |  |              |        
|Non-Current       |  |              |        
|                  |  |              |        
|Employee benefits |  |              | 35,348 



A provision has been recognised for employee
benefits relating to annual leave and long service leave. The measurement and recognition criteria relating to employee benefits
have been included in note 1 of this report.



Amounts not expected to be settled within
the next 12 months



The current provision for long service
leave includes all unconditional entitlements where employees have completed the required period of service and also those where
employees are entitled to pro-rata payments in certain circumstances. The employee benefits are presented as current or non-current
based on when the Consolidated Entity expects to settle the long service leave entitlements. However, based on past experience,
the Consolidated Entity does not expect all employees to take the full amount of accrued long service leave or require payment
within the next 12 months.



Note 18: Provisions



|                |  | 2014 |   |  | 2013 | 
|--------------- |  | ---- | - |  | ---- | 
|                |  | $    |   |  | $    | 
|Current         |  |      |   |  |      | 
|Claim provision |  |      | - |  |      | 



The 2013 provision was settled as $173,385
in November 2013 and the remaining $91,527 was reversed to Other Income and Revenue in the statement of profit or loss in the 2014
year.



Note 19: Issued capital



|                                                                  |  | Consolidated |           
|----------------------------------------------------------------- |  | ------------ | ----------
|                                                                  |  | 2014         |           
|                                                                  |  | $            |           
|                                                                  |  |              |           
|Fully paid ordinary shares 552,853,091 (2013: 374,873,050 shares) |  |              | 41,679,662



(a) Ordinary shares



The followings movements in ordinary share
capital occurred during the year:



|Date          |  | Details                            |  | Number of 
    shares |             |  | Issue Price 
    $ |  |      | Amount 
    $ | 
|------------- |  | ---------------------------------- |  | --------------------- | ----------- |  | ------------------ |  | ---- | ------------- | 
|1 July 2013   |  | Opening Balance                    |  |                       | 374,873,050 |  |                    |  |      |               | 
|9 July 2013   |  | Share issue by placement           |  |                       | 24,725,000  |  |                    |  | 0.04 |               | 
|12 July 2013  |  | Share issue by placement           |  |                       | 11,525,000  |  |                    |  | 0.04 |               | 
|18 July 2013  |  | Share issue pursuant to Offer Mobi |  |                       | 1,297,300   |  |                    |  | 0.05 |               | 
|25 July 2013  |  | Share issue by exercise of options |  |                       | 1,440       |  |                    |  | 0.1  |               | 
|5 August 2013 |  | Share issue by exercise of options |  |                       | 3,100       |  |                    |  | 0.05 |               | 

F-35


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 19: Issued capital (continued)



|Date              |  | Details                            |  | Number of 
    shares |            |  | Issue Price 
    $ |  |        | Amount 
    $ | 
|----------------- |  | ---------------------------------- |  | --------------------- | ---------- |  | ------------------ |  | ------ | ------------- | 
|11 September 2013 |  | Share issue by placement           |  |                       | 11,250,000 |  |                    |  | 0.04   |               | 
|11 September 2013 |  | Share issue by placement           |  |                       | 1,500,000  |  |                    |  | 0.04   |               | 
|11 September 2013 |  | Share issue on conversion of loan  |  |                       | 2,500,000  |  |                    |  | 0.04   |               | 
|12 September 2013 |  | Share issue by placement           |  |                       | 1,500,000  |  |                    |  | 0.04   |               | 
|15 October 2013   |  | Share issue by exercise of options |  |                       | 1,515,152  |  |                    |  | 0.0477 |               | 
|15 October 2013   |  | Share issue by exercise of options |  |                       | 23,660     |  |                    |  | 0.05   |               | 
|21 October 2013   |  | Share issue pursuant to Offer Mobi |  |                       | 1,250,000  |  |                    |  | 0.17   |               | 
|23 October 2013   |  | Share issue by placement           |  |                       | 37,462,816 |  |                    |  | 0.11   |               | 
|31 October 2013   |  | Share issue in lieu of services    |  |                       | 1,250,000  |  |                    |  | 0.04   |               | 
|31 October 2013   |  | Share issue by placement           |  |                       | 181,818    |  |                    |  | 0.11   |               | 
|6 November 2013   |  | Share issue pursuant to Offer Mobi |  |                       | 508,130    |  |                    |  | 0.123  |               | 
|8 November 2013   |  | Share issue by exercise of options |  |                       | 500,000    |  |                    |  | 0.05   |               | 
|15 November 2013  |  | Share issue by exercise of options |  |                       | 5,000,000  |  |                    |  | 0.042  |               | 
|19 November 2013  |  | Share issue by exercise of options |  |                       | 550,313    |  |                    |  | 0.05   |               | 
|19 November 2013  |  | Share issue by exercise of options |  |                       | 100,000    |  |                    |  | 0.12   |               | 
|29 November 2013  |  | Share issue by exercise of options |  |                       | 600,000    |  |                    |  | 0.12   |               | 
|29 November 2013  |  | Share issue by exercise of options |  |                       | 350,000    |  |                    |  | 0.05   |               | 
|4 December 2013   |  | Share issue pursuant to Offer Mobi |  |                       | 937,500    |  |                    |  | 0.28   |               | 
|4 December 2013   |  | Share issue by exercise of options |  |                       | 880,000    |  |                    |  | 0.05   |               | 
|4 December 2013   |  | Share issue by exercise of options |  |                       | 2,593,750  |  |                    |  | 0.05   |               | 
|19 December 2013  |  | Share issue by exercise of options |  |                       | 12,075     |  |                    |  | 0.05   |               | 
|19 December 2013  |  | Share issue by exercise of options |  |                       | 200,000    |  |                    |  | 0.1    |               | 
|9 January 2014    |  | Share issue by exercise of options |  |                       | 750,000    |  |                    |  | 0.05   |               | 
|14 January 2014   |  | Share issue by exercise of options |  |                       | 100,000    |  |                    |  | 0.17   |               | 
|14 January 2014   |  | Share issue by exercise of options |  |                       | 50,000     |  |                    |  | 0.12   |               | 
|22 January 2014   |  | Share issue by exercise of options |  |                       | 1,200      |  |                    |  | 0.05   |               | 
|22 January 2014   |  | Share issue by exercise of options |  |                       | 15         |  |                    |  | 0.05   |               | 
|22 January 2014   |  | Share issue by exercise of options |  |                       | 300,000    |  |                    |  | 0.05   |               | 
|22 January 2014   |  | Share issue by exercise of options |  |                       | 385,000    |  |                    |  | 0.05   |               | 
|28 January 2014   |  | Share issue by exercise of options |  |                       | 200,000    |  |                    |  | 0.05   |               | 
|28 January 2014   |  | Share issue by exercise of options |  |                       | 200,000    |  |                    |  | 0.12   |               | 
|30 January 2014   |  | Share issue by exercise of options |  |                       | 2,000,000  |  |                    |  | 0.03   |               | 
|17 February 2014  |  | Share issue by exercise of options |  |                       | 2,581      |  |                    |  | 0.05   |               | 
|19 March 2014     |  | Share issue by exercise of options |  |                       | 52,817     |  |                    |  | 0.05   |               | 
|19 March 2014     |  | Share issue by exercise of options |  |                       | 22,183     |  |                    |  | 0.05   |               | 
|28 March 2014     |  | Share issue by exercise of options |  |                       | 79,661     |  |                    |  | 0.12   |               | 
|28 March 2014     |  | Share issue by exercise of options |  |                       | 2,667      |  |                    |  | 0.05   |               | 
|28 March 2014     |  | Share issue by exercise of options |  |                       | 4,857      |  |                    |  | 0.05   |               | 
|28 March 2014     |  | Share issue by exercise of options |  |                       | 25,000     |  |                    |  | 0.05   |               | 
|28 March 2014     |  | Share issue by exercise of options |  |                       | 166,667    |  |                    |  | 0.05   |               | 
|28 March 2014     |  | Share issue by exercise of options |  |                       | 500,000    |  |                    |  | 0.06   |               | 
|4 April 2014      |  | Share issue by placement           |  |                       | 36,909,524 |  |                    |  | 0.21   |               | 
|4 April 2014      |  | Share issue by placement           |  |                       | 1,190,476  |  |                    |  | 0.21   |               | 
|11 April 2014     |  | Share issue by exercise of options |  |                       | 250,000    |  |                    |  | 0.05   |               | 



F-36


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 19: Issued capital (continued)



|Date          |  | Details                            |  | Number of 
    shares |             |  | Issue Price 
    $ |  |       | Amount 
    $ | 
|------------- |  | ---------------------------------- |  | --------------------- | ----------- |  | ------------------ |  | ----- | ------------- | 
|23 April 2014 |  | Share issue by exercise of options |  |                       | 600,000     |  |                    |  | 0.05  |               | 
|9 May 2014    |  | Share issue by exercise of options |  |                       | 350,000     |  |                    |  | 0.05  |               | 
|15 May 2014   |  | Share issue by exercise of options |  |                       | 2,500,000   |  |                    |  | 0.04  |               | 
|19 May 2014   |  | Share issue by exercise of options |  |                       | 83,333      |  |                    |  | 0.12  |               | 
|30 May 2014   |  | Share issue by exercise of options |  |                       | 350,000     |  |                    |  | 0.12  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 550,000     |  |                    |  | 0.155 |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.12  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 50,000      |  |                    |  | 0.12  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.12  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.12  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.17  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 250,000     |  |                    |  | 0.12  |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 1,000,000   |  |                    |  | 0.042 |               | 
|13 June 2014  |  | Share issue by exercise of options |  |                       | 4,000,000   |  |                    |  | 0.12  |               | 
|18 June 2014  |  | Share issue by exercise of options |  |                       | 2,250,000   |  |                    |  | 0.12  |               | 
|18 June 2014  |  | Share issue by exercise of options |  |                       | 2,000,000   |  |                    |  | 0.12  |               | 
|18 June 2014  |  | Share issue by exercise of options |  |                       | 1,000,000   |  |                    |  | 0.12  |               | 
|23 June 2014  |  | Share issue by exercise of options |  |                       | 3,000,000   |  |                    |  | 0.12  |               | 
|25 June 2014  |  | Share issue by exercise of options |  |                       | 5,000,000   |  |                    |  | 0.12  |               | 
|27 June 2014  |  | Share issue in lieu of services    |  |                       | 500,000     |  |                    |  | 0.22  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.17  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 250,000     |  |                    |  | 0.05  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 200,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 100,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 125,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 150,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 125,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 1,100,000   |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 300,000     |  |                    |  | 0.12  |               | 
|30 June 2014  |  | Share issue by exercise of options |  |                       | 137,006     |  |                    |  | 0.12  |               | 
|              |  | Capital raising costs              |  |                       | -           |  |                    |  |       |               | 
|30 June 2014  |  | Closing Balance                    |  |                       | 552,853,091 |  |                    |  |       |               | 



| | (a) | Performance shares
| | --- | ------------------



|Date             |  | Details                                                  |  | Number
    of  Shares |            |  | Issue
     Price |   |         | Amount
     $ |  |  | Variation
     Price | 
|---------------- |  | -------------------------------------------------------- |  | --------------------- | ---------- |  | ---------------- | - | ------- | ------------- |  |  | -------------------- | 
|                 |  |                                                          |  |                       |            |  |                  |   |         |               |  |  |                      | 
|28 November 2013 |  | Share issue to Director pursuant to shareholder approval |  |                       | 20,000,000 |  |                  | $ | 0.00001 |               |  |  | 200                  | 



A
Performance Share Plan was approved by shareholders at MOKO’s 2013 Annual General Meeting and involves the issuance of a
new class of ordinary shares (“Performance Shares”) to eligible participants for their market value assessed by an
independent expert and based on the rights and conditions attached to the Performance Shares (the “Issue Price”) by
means of a payment to the Company of the Issue Price.



F-37


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014





Note 19: Issued capital (continued)



Performance
Shares remain outstanding for a period equal to earlier of 3 years from the date of original purchase or the occurrence of the
relevant Performance Event (such earlier date, the “End Date”). If the Performance Shares have not been ‘varied’
by the End Date, which can include events such as termination, the VWAP share price hurdle having been met, a takeover offer among
others (any such event, a “Variation Event”) then the Performance Shares will be redeemed by the Company for their
Issue Price. If a Variation Event does occur prior to the End Date, the holder has twelve months from the date of the Variation
Event to provide notice and payment (a “Variation Payment”) to the Company.



Upon
payment of the Variation Payment to the Company, the relevant Performance Shares will rank pari passu all with existing ordinary
shares of the Company and trade together in the public market. On the other hand, at no time prior to a Variation Event will the
holder be permitted to transfer any Performance Shares, and no dividend or voting rights will attach to any Performance Shares
unless and until varied. In the event that the Variation Event does not occur prior or upon to the End Date, the Company will pay
the Issue Price that it received from the holder for the applicable Performance Shares and then redeem and cancel those Performance
Shares.



The
total number of Performance Shares issued under the Performance Share Plan, taken together with Performance Shares and options
issued during the previous five years pursuant to an employee share plan extended to directors, employees or eligible contractors
of the Company, may not exceed five percent of the total number of outstanding ordinary shares.



Mr.
McCann was issued 20.0 million Performance Shares at an Issue Price of $0.00001 per ordinary share with End Date of the third anniversary
of issuance, Variation Payment of $0.10 per ordinary share and the Variation Event being the 90 day VWAP of our ordinary shares
exceeding $0.40 per share.



(c) Options



Options granted



During the year, the Company granted the following options over
unissued ordinary shares:



Table A – Options granted over
unissued ordinary shares



|Class                                 |  | Expiry
    Date |  | Exercise
    Price |       |  | Number
    of Options | 
|------------------------------------- |  | --------------- |  | ------------------ | ----- |  | --------------------- | 
|(MKBAO) Employee Unlisted Options     |  | 31-Jul-16       |  | $                  | 0.17  |  |                       | 
|(MKBAO) Unlisted Options              |  | 24-Oct-15       |  | $                  | 0.155 |  |                       | 
|Unlisted Options                      |  | 31-Dec-14       |  | $                  | 0.10  |  |                       | 
|Unlisted Options                      |  | 28-Nov-15       |  | $                  | 0.40  |  |                       | 
|Unlisted Options                      |  | 28-Nov-15       |  | $                  | 0.10  |  |                       | 
|Unlisted Options                      |  | 30-Jun-15       |  | $                  | 0.03  |  |                       | 
|Unlisted Options                      |  | 30-Jun-15       |  | $                  | 0.04  |  |                       | 
|Unlisted Options                      |  | 30-Jun-15       |  | $                  | 0.02  |  |                       | 
|Unlisted Options                      |  | 30-Jun-15       |  | $                  | 0.11  |  |                       | 
|(MKBAW) Director and Employer Options |  | 30-Jun-14       |  | $                  | 0.12  |  |                       | 
|(MKBAO) Employee Unlisted Options     |  | 31-Jul-16       |  | $                  | 0.17  |  |                       | 
|Unlisted Option                       |  | 28-Nov-15       |  | $                  | 0.10  |  |                       | 
|Unlisted Option                       |  | 31-Jan-16       |  | $                  | 0.20  |  |                       | 
|(MKBOA) Listed Options                |  | 13-Jun-15       |  | $                  | 0.05  |  |                       | 
|Total                                 |  |                 |  |                    |       |  |                       | 



F-38


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 19: Issued capital (continued)



Table B - Options granted American Depositary
Shares (where one ADS = 40 Ordinary shares)



|Class                     |  | Expiry Date |  | Exercise 
    Price (per  ADS in US$) |      |  | Number 
    granted  (in ADSs) |  |         | Number granted 
    (in ordinary  shares) | 
|------------------------- |  | ----------- |  | ------------------------------------- | ---- |  | ------------------------------ |  | ------- | ----------------------------------------- | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 2.00 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 3.00 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 2.00 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 4.00 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 31-Dec-15   |  | $                                     | 6.00 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 7.50 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 3.70 |  |                                |  | 5,000   |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 1.85 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 31-Dec-15   |  | $                                     | 4.07 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 31-Dec-16   |  | $                                     | 6.29 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 7.50 |  |                                |  | 41,750  |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 6.29 |  |                                |  | 25,000  |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 6.66 |  |                                |  | 2,500   |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 7.50 |  |                                |  | 11,250  |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 6.80 |  |                                |  | 6,250   |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 5.55 |  |                                |  | 7,500   |                                           | 
|Employee Unlisted Options |  | 31-Dec-14   |  | $                                     | 5.55 |  |                                |  | 7,500   |                                           | 
|Employee Unlisted Options |  | 31-Dec-15   |  | $                                     | 5.55 |  |                                |  | 7,500   |                                           | 
|Employee Unlisted Options |  | 30-Jun-16   |  | $                                     | 4.00 |  |                                |  | 25,000  |                                           | 
|Total                     |  |             |  |                                       |      |  |                                |  | 364,250 |                                           | 



Unissued shares under option



At the date of this report, unissued ordinary shares of the
Company under option are:



Table C – Unissued ordinary shares
under option



|Class                     |  | Expiry
    Date |  | Exercise
    Price |       |  | Number
    of Options | 
|------------------------- |  | --------------- |  | ------------------ | ----- |  | --------------------- | 
|Unlisted Options          |  | 30-Jun-15       |  | $                  | 0.04  |  |                       | 
|Unlisted Options          |  | 30-Nov-15       |  | $                  | 0.10  |  |                       | 
|Unlisted Director Options |  | 30-Jul-16       |  | $                  | 0.042 |  |                       | 
|Unlisted Employee Options |  | 31-Jul-16       |  | $                  | 0.06  |  |                       | 
|Unlisted Employee Options |  | 31-Jul-16       |  | $                  | 0.17  |  |                       | 
|Unlisted options          |  | 24-Oct-15       |  | $                  | 0.155 |  |                       | 
|Unlisted Director Options |  | 28-Nov-15       |  | $                  | 0.40  |  |                       | 
|Unlisted Director Options |  | 28-Nov-15       |  | $                  | 0.10  |  |                       | 
|Unlisted options          |  | 30-Jun-15       |  | $                  | 0.03  |  |                       | 



F-39


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 19: Issued capital (continued)



|Class                                            |  | Expiry
    Date  |  | Exercise
    Price |      |  | Number
    of Options | 
|------------------------------------------------ |  | ---------------- |  | ------------------ | ---- |  | --------------------- | 
|Unlisted options                                 |  | 30-Jun-15        |  | $                  | 0.04 |  |                       | 
|Unlisted options                                 |  | 30-Jun-15        |  | $                  | 0.02 |  |                       | 
|Unlisted options                                 |  | 30-Jun-15        |  | $                  | 0.11 |  |                       | 
|Unlisted options                                 |  | 31-Jan-16        |  | $                  | 0.20 |  |                       | 
|Listed Options (MKBOA)                           |  | 13-Jun-15        |  | $                  | 0.05 |  |                       | 
|Unlisted Options over American Depositary Shares |  | Refer to table B |  |                    |      |  |                       | 
|Total                                            |  |                  |  |                    |      |  |                       | 



These options do not
entitle the holder to participate in any share issue of the Company or any other entity.



Lapse of options



During or since the end of the financial year, the following
options were lapsed:



Table D – lapsed options



|Class                 |  | Expiry
    Date |  | Exercise
    Price |      |  | Number
    of Options | 
|--------------------- |  | --------------- |  | ------------------ | ---- |  | --------------------- | 
|Employee Options      |  | 25-Jul-13       |  | $                  | 0.10 |  |                       | 
|Director Options      |  | 25-Jul-13       |  | $                  | 0.10 |  |                       | 
|Employee Options      |  | 25-Jul-13       |  | $                  | 0.12 |  |                       | 
|Director Options      |  | 25-Jul-13       |  | $                  | 0.12 |  |                       | 
|Unlisted Options      |  | 25-Jul-13       |  | $                  | 0.20 |  |                       | 
|Listed Options (MKBO) |  | 25-Jul-13       |  | $                  | 0.10 |  |                       | 
|Total                 |  |                 |  |                    |      |  |                       | 



Cancellation of options



During the year, the following options
cancelled:



Table E – cancelled options



|Class                     |  | Expiry Date |  | Exercise Price |      |  | Number of Options | 
|------------------------- |  | ----------- |  | -------------- | ---- |  | ----------------- | 
|Unlisted Employee Options |  | 30-Jun-14   |  | $              | 0.12 |  |                   | 
|Unlisted Employee Options |  | 31-Jul-16   |  | $              | 0.06 |  |                   | 
|Total                     |  |             |  |                |      |  |                   | 



F-40


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 19: Issued capital (continued)



Shares issued on the exercise of options



Table F –
Shares issued on exercise of options



|Class                     |  | Expiry
    Date |  | Exercise
    Price |        |  | Number
    of Options | 
|------------------------- |  | --------------- |  | ------------------ | ------ |  | --------------------- | 
|Unlisted Employee Options |  | 30-Jun-14       |  | $                  | 0.12   |  |                       | 
|Unlisted Options          |  | 30-Jun-14       |  | $                  | 0.03   |  |                       | 
|Unlisted Options          |  | 31-Dec-14       |  | $                  | 0.10   |  |                       | 
|Unlisted Options          |  | 30-Jun-15       |  | $                  | 0.05   |  |                       | 
|Unlisted Options          |  | 24-Oct-15       |  | $                  | 0.155  |  |                       | 
|Unlisted Options          |  | 6-Nov-15        |  | $                  | 0.0477 |  |                       | 
|Unlisted Director Options |  | 30-Jul-16       |  | $                  | 0.042  |  |                       | 
|Unlisted Employee Options |  | 31-Jul-16       |  | $                  | 0.06   |  |                       | 
|Unlisted Employee Options |  | 31-Jul-16       |  | $                  | 0.17   |  |                       | 
|Listed Options            |  | 25-Jul-14       |  | $                  | 0.10   |  |                       | 
|Listed Options (MKBOA)    |  | 13-Jun-15       |  | $                  | 0.05   |  |                       | 
|Total                     |  |                 |  |                    |        |  |                       | 



(d) Capital Management



When managing capital, the Board’s
objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits
for other stakeholders. The Board also aims to maintain a capital structure that ensures the lowest cost of capital available to
the entity.



The Board are constantly adjusting the
capital structure to take advantage of favourable costs of capital or high return on assets. As the market is constantly changing,
management may issue new shares, sell assets to reduce debt or consider payment of dividends to shareholders.



The Board has no current plans to issue
further shares on the market.



The Board seeks to maintain a balance between
the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound
capital position although there is no formal policy regarding gearing levels. The Consolidated Entity had nil borrowings at 30
June 2014 (2013: 1,136,390l).



The Consolidated Entity is not subject
to any externally imposed capital requirements.



There were no changes in the Consolidated
Entity’s approach to capital management during the year.



Note 20: Reserves



Foreign currency translation reserve



This reserve comprises all foreign currency
differences arising from the translation of the financial statements of foreign operations to Australian dollars.



Share-based payments reserve



This reserve was used to recognise the value
of share based payments.



F-41


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014





Note 21: Accumulated losses



|                                           |  | Consolidated |            
|------------------------------------------ |  | ------------ | -----------
|                                           |  | 2014         |            
|                                           |  | $            |            
|Accumulated losses brought forward         |  |              | (25,457,309
|Loss after income tax expense for the year |  |              | (13,472,361
|                                           |  |              | (38,929,670



Note 22: Share Based payments



Below are summaries of the movements of options
during the year to key management personnel and employees:







|2014                            |  |                 |  |                  |   |                     |       |  | Balance
    at         |  |            |         |  |  |            |  |  | Expired/                  |             |   | Balance
    at           |     
|------------------------------- |  | --------------- |  | ---------------- | - | ------------------- | ----- |  | ---------------------- |  | ---------- | ------- |  |  | ---------- |  |  | ------------------------- | ----------- | - | ------------------------ | ----
|Class                           |  | Grant
     Date |  | Expiry
     Date |   | Exercise
     Price |       |  | start
    of  the year |  |            | Granted |  |  | Exercised  |  |  | forfeited/
    
    other |             |   | end
    of the 
    year |     
|Director Options                |  | 17-Dec-08       |  | 25-Jul-13        |   | $                   | 0.10  |  |                        |  | 3,000,000  |         |  |  | -          |  |  |                           | -           |   |                          |     
|Employee Options                |  | 15-Oct-09       |  | 25-Jul-13        |   | $                   | 0.10  |  |                        |  | 1,800,000  |         |  |  |            |  |  |                           | -           |   |                          |     
|Director Options                |  | 19-Oct-09       |  | 25-Jul-13        |   | $                   | 0.12  |  |                        |  | 2,500,000  |         |  |  | -          |  |  |                           | -           |   |                          |     
|Employee Options                |  | 16-Dec-09       |  | 25-Jul-13        |   | $                   | 0.12  |  |                        |  | 1,950,000  |         |  |  | -          |  |  |                           | -           |   |                          |     
|Employee Options                |  | 26-Aug-11       |  | 30-Jun-14        |   | $                   | 0.12  |  |                        |  | 6,050,000  |         |  |  | -          |  |  |                           | (3,000,000  | ) |                          |     
|Director Options                |  | 27-Oct-11       |  | 30-Jun-14        |   | $                   | 0.12  |  |                        |  | 18,250,000 |         |  |  | -          |  |  |                           | (18,250,000 | ) |                          |     
|Director Options                |  | 14-Dec-12       |  | 30-Jul-16        |   | $                   | 0.042 |  |                        |  | 16,000,000 |         |  |  | -          |  |  |                           | (6,000,000  | ) |                          |     
|Employee Options                |  | 21-Dec-12       |  | 30-Nov-15        |   | $                   | 0.10  |  |                        |  | 500,000    |         |  |  | -          |  |  |                           | -           |   |                          |     
|Employee Options                |  | 21-Feb-13       |  | 31-Jul-16        |   | $                   | 0.06  |  |                        |  | 1,750,000  |         |  |  | -          |  |  |                           | (500,000    | ) |                          |     
|Employee Options                |  | 13-Sep-13       |  | 31-Jul-16        |   | $                   | 0.17  |  |                        |  | -          |         |  |  | 3,850,000  |  |  |                           | (200,000    | ) |                          |     
|Director Options                |  | 28-Nov-13       |  | 28-Nov-15        |   | $                   | 0.40  |  |                        |  | -          |         |  |  | 16,000,000 |  |  |                           | -           |   |                          |     
|Director Options                |  | 28-Nov-13       |  | 28-Nov-15        |   | $                   | 0.10  |  |                        |  | -          |         |  |  | 6,000,000  |  |  |                           | -           |   |                          |     
|Employee Options                |  | 25-Feb-14       |  | 30-Jun-14        |   | $                   | 0.12  |  |                        |  | -          |         |  |  | 400,000    |  |  |                           | (400,000    | ) |                          |     
|Employee Options                |  | 19-Mar-14       |  | 31-Jul-16        |   | $                   | 0.17  |  |                        |  | -          |         |  |  | 700,000    |  |  |                           | (100,000    | ) |                          |     
|Director Options                |  | 5-May-14        |  | 28-Nov-15        |   | $                   | 0.10  |  |                        |  | -          |         |  |  | 400,000    |  |  |                           | -           |   |                          |     
|Director Options                |  | 5-May-14        |  | 31-Jan-16        |   | $                   | 0.20  |  |                        |  | -          |         |  |  | 2,000,000  |  |  |                           | -           |   |                          |     
|Employee Options                |  |                 |  |                  |   |                     |       |  |                        |  | -          |         |  |  |            |  |  |                           | -           |   |                          |     
|                                |  |                 |  |                  |   |                     |       |  |                        |  | 51,800,000 |         |  |  | 33,350,000 |  |  |                           | (28,450,000 | ) |                          |     
|Weighted average exercise price |  |                 |  |                  | $ | 0.09                |       |  |                        |  |            |         |  |  |            |  |  |                           |             |   | $                        | 0.22





F-42


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



|Note 22: Share Based payments (continued)
|-----------------------------------------





|2013                            |  |                |  |                 |   |                    |      |  | Balance at            |  |            |         |  |  |            |  |  | Expired/             |   |  | Balance at           |     
|------------------------------- |  | -------------- |  | --------------- | - | ------------------ | ---- |  | --------------------- |  | ---------- | ------- |  |  | ---------- |  |  | -------------------- | - |  | -------------------- | ----
|Class                           |  | Grant
    Date |  | Expiry
    Date |   | Exercise
    Price |      |  | start
    of the year |  |            | Granted |  |  | Exercised  |  |  | forfeited/
    other |   |  | end
    of the  year |     
|Employee Options                |  | 17-Dec-08      |  | 15-Dec-12       |   | $                  | 0.20 |  |                       |  | 2,165,000  |         |  |  | -          |  |  |                      | - |  |                      |     
|Director Options                |  | 17-Dec-08      |  | 25-Jul-13       |   | $                  | 0.10 |  |                       |  | 3,000,000  |         |  |  | -          |  |  |                      | - |  |                      |     
|Employee Options                |  | 15-Oct-09      |  | 25-Jul-13       |   | $                  | 0.10 |  |                       |  | 1,800,000  |         |  |  | -          |  |  |                      | - |  |                      |     
|Director Options                |  | 19-Oct-09      |  | 25-Jul-13       |   | $                  | 0.12 |  |                       |  | 2,500,000  |         |  |  | -          |  |  |                      | - |  |                      |     
|Employee Options                |  | 16-Dec-09      |  | 25-Jul-13       |   | $                  | 0.12 |  |                       |  | 1,950,000  |         |  |  | -          |  |  |                      | - |  |                      |     
|Employee Options                |  | 26-Aug-11      |  | 30-Jun-14       |   | $                  | 0.12 |  |                       |  | 6,050,000  |         |  |  | -          |  |  |                      | - |  |                      |     
|Director Options                |  | 27-Oct-11      |  | 30-Jun-14       |   | $                  | 0.12 |  |                       |  | 18,250,000 |         |  |  | -          |  |  |                      | - |  |                      |     
|Director Options                |  | 14-Dec-12      |  | 30-Jul-16       |   | $                  | 0.04 |  |                       |  | -          |         |  |  | 16,000,000 |  |  |                      | - |  |                      |     
|Employee Options                |  | 21-Dec-12      |  | 30-Nov-15       |   | $                  | 0.10 |  |                       |  | -          |         |  |  | 500,000    |  |  |                      | - |  |                      |     
|Employee Options                |  | 21-Feb-13      |  | 31-Jul-16       |   | $                  | 0.06 |  |                       |  | -          |         |  |  | 1,750,000  |  |  |                      | - |  |                      |     
|                                |  |                |  |                 |   |                    |      |  |                       |  | 35,715,000 |         |  |  | 18,250,000 |  |  |                      | - |  |                      |     
|Weighted average exercise price |  |                |  |                 | $ | 0.12               |      |  |                       |  |            |         |  |  |            |  |  |                      |   |  | $                    | 0.09





The weighted average share price during the
financial year was $0.21 (2013: $0.04).



The weighted average remaining contractual
life of options outstanding at the end of the financial year was 20.11 months (2013: 15.02 months).



Options granted over American Depositary Shares
(where one ADS = 40 Ordinary shares)



|2014                      |  |            |  |             |  |                               |      |  |                        |  |        |                                              | 
|------------------------- |  | ---------- |  | ----------- |  | ----------------------------- | ---- |  | ---------------------- |  | ------ | -------------------------------------------- | 
|Class                     |  | Grant Date |  | Expiry Date |  | ExercisePrice (perADS in US$) |      |  | Numbergranted(in ADSs) |  |        | Number
    granted (in
     ordinary shares) | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                             | 2.00 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                             | 3.00 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-14   |  | $                             | 2.00 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-14   |  | $                             | 4.00 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-15   |  | $                             | 6.00 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                             | 7.50 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-14   |  | $                             | 3.70 |  |                        |  | 5,000  |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-14   |  | $                             | 1.85 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-15   |  | $                             | 4.07 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-16   |  | $                             | 6.29 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                             | 7.50 |  |                        |  | 41,750 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 31-Dec-14   |  | $                             | 6.29 |  |                        |  | 25,000 |                                              | 
|Employee Unlisted Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                             | 6.66 |  |                        |  | 2,500  |                                              | 



F-43


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 22: Share Based payments (continued)



|2014                            |  |            |  |             |  |                                              |      |  |                               |      |         |                                               | 
|------------------------------- |  | ---------- |  | ----------- |  | -------------------------------------------- | ---- |  | ----------------------------- | ---- | ------- | --------------------------------------------- | 
|Class                           |  | Grant Date |  | Expiry Date |  | Exercise
    Price (per
    ADS in 
    US$) |      |  | Number
    granted  (in ADSs) |      |         | Number 
    granted (in 
    ordinary shares) | 
|Employee Unlisted Options       |  | 30-Jun-14  |  | 30-Jun-16   |  | $                                            | 7.50 |  |                               |      | 11,250  |                                               | 
|Employee Unlisted Options       |  | 30-Jun-14  |  | 30-Jun-16   |  | $                                            | 6.80 |  |                               |      | 6,250   |                                               | 
|Employee Unlisted Options       |  | 30-Jun-14  |  | 31-Dec-14   |  | $                                            | 5.55 |  |                               |      | 7,500   |                                               | 
|Employee Unlisted Options       |  | 30-Jun-14  |  | 31-Dec-14   |  | $                                            | 5.55 |  |                               |      | 7,500   |                                               | 
|Employee Unlisted Options       |  | 30-Jun-14  |  | 31-Dec-15   |  | $                                            | 5.55 |  |                               |      | 7,500   |                                               | 
|Total                           |  |            |  |             |  |                                              |      |  |                               |      | 339,250 |                                               | 
|                                |  |            |  |             |  |                                              |      |  |                               |      |         |                                               | 
|Weighted average exercise price |  |            |  |             |  |                                              |      |  |                               | USD$ | 4.94    |                                               | 



There were no options issued over granted over
American Depositary Shares in 2013.



The weighted average share price (ADS) was
USD$7.61 based on the effective NASDAQ listing date of 27 June 2014 ((2013: Nil).



The weighted average remaining contractual
life of options outstanding at the end of the financial year was 17.06 months (2013: Nil).



For the options granted to the key management
personnel and employees during the current financial year, the fair value was measured at grant date using a Black-Scholes model
that took account of the terms and conditions upon which the instruments were granted. Expected volatility reflects the historical
volatility of the Company’s share price over the historical period commensurate with the expected term.



The valuation model inputs used to determine
the fair value are as follows:



Options over fully paid ordinary MOKO shares
for the key management personnel and employees



|Grant date |  | Expiry date |  | Maximum life |      |  | Exercise price |   |      | Share price at grant date |  |   | Expected volatility |  |  | Risk free interest rate |       |   | Tradeable discount | 
|---------- |  | ----------- |  | ------------ | ---- |  | -------------- | - | ---- | ------------------------- |  | - | ------------------- |  |  | ----------------------- | ----- | - | ------------------ | 
|13-Sep-13  |  | 31-Jul-16   |  |              | 2.88 |  |                | $ | 0.17 |                           |  | $ | 0.13                |  |  |                         | 88.06 | % |                    | 
|28-Nov-13  |  | 28-Nov-15   |  |              | 2.00 |  |                | $ | 0.40 |                           |  | $ | 0.29                |  |  |                         | 88.06 | % |                    | 
|28-Nov-13  |  | 28-Nov-15   |  |              | 2.00 |  |                | $ | 0.10 |                           |  | $ | 0.29                |  |  |                         | 88.06 | % |                    | 
|25-Feb-14  |  | 30-Jun-14   |  |              | 0.34 |  |                | $ | 0.12 |                           |  | $ | 0.22                |  |  |                         | 85.01 | % |                    | 
|19-Mar-14  |  | 31-Jul-16   |  |              | 2.37 |  |                | $ | 0.17 |                           |  | $ | 0.22                |  |  |                         | 85.01 | % |                    | 
|05-May-14  |  | 28-Nov-15   |  |              | 1.57 |  |                | $ | 0.10 |                           |  | $ | 0.17                |  |  |                         | 84.13 | % |                    | 
|05-May-14  |  | 31-Jan-16   |  |              | 1.74 |  |                | $ | 0.20 |                           |  | $ | 0.17                |  |  |                         | 84.13 | % |                    | 



Options granted over American Depositary Shares (where one ADS
= 40 Ordinary shares)



|Grant Date |  | Expiry Date |  | Maximum life |      |  | Exercise Price (per ADS in 
US$) |   |      | Share price at grant date
(US$) |  |   | Expected volatility |  |  | Risk free interest rate |       |   | Tradeable discount | 
|---------- |  | ----------- |  | ------------ | ---- |  | -------------------------------- | - | ---- | ------------------------------- |  | - | ------------------- |  |  | ----------------------- | ----- | - | ------------------ | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 2.00 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 3.00 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 2.00 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 4.00 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 31-Dec-15   |  |              | 1.50 |  |                                  | $ | 6.00 |                                 |  | $ | 7.50                |  |  |                         | 87.59 | % |                    | 



F-44


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 22: Share Based payments (continued)



|Grant Date |  | Expiry Date |  | Maximum life |      |  | Exercise Price (per ADS in
 US$) |   |      | Share price at grant date (US$) |  |   | Expected volatility |  |  | Risk free interest rate |       |   | Tradeable discount | 
|---------- |  | ----------- |  | ------------ | ---- |  | -------------------------------- | - | ---- | ------------------------------- |  | - | ------------------- |  |  | ----------------------- | ----- | - | ------------------ | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 7.50 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 3.70 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 1.85 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 31-Dec-15   |  |              | 1.50 |  |                                  | $ | 4.07 |                                 |  | $ | 7.50                |  |  |                         | 87.59 | % |                    | 
|30-Jun-14  |  | 31-Dec-16   |  |              | 2.51 |  |                                  | $ | 6.29 |                                 |  | $ | 7.50                |  |  |                         | 83.10 | % |                    | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 7.50 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 6.29 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 6.66 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 7.50 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 30-Jun-16   |  |              | 2.00 |  |                                  | $ | 6.80 |                                 |  | $ | 7.50                |  |  |                         | 82.55 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 5.55 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 31-Dec-14   |  |              | 0.50 |  |                                  | $ | 5.55 |                                 |  | $ | 7.50                |  |  |                         | 51.12 | % |                    | 
|30-Jun-14  |  | 31-Dec-15   |  |              | 1.50 |  |                                  | $ | 5.55 |                                 |  | $ | 7.50                |  |  |                         | 87.59 | % |                    | 



All options were granted for no consideration
and vested immediately



Those options granted to key management personnel
have been identified in key management personnel disclosures (note 24) and the Remuneration Report in the Directors' Report. Shareholder
approval was obtained for the grants of options to directors on 28 November 2013 and 5 May 2014.



Shares issued as compensation



Performance Shares



The terms and conditions of each grant of Performance Shares affecting
remuneration of directors and other key management personnel in this financial year or future reporting years are as follows:



|Number of 
    Performance  Shares |            |  | Grant Date |           | Vesting
    date |           | Expiry
    (End) date |           | Issue
    Price |   |         | Exercise
    (Variation) Price |  |   | Expected
    volatility |  |  | Risk Free
    interest  rate |       |   | Tradable
    discount | 
|---------------------------------- | ---------- |  | ---------- | --------- | ---------------- | --------- | --------------------- | --------- | --------------- | - | ------- | ------------------------------ |  | - | ----------------------- |  |  | ---------------------------- | ----- | - | --------------------- | 
|                                   | 20,000,000 |  |            | 28-Nov-13 |                  | 28-Nov-15 |                       | 28-Nov-16 |                 | $ | 0.00001 |                                |  | $ | 0.10                    |  |  |                              | 25.00 | % |                       | 



Performance Shares granted carry
no dividend or voting rights.



The fair value was measured at grant date using
an American style, up and in, trinomial barrier option model that took account of the terms and conditions upon which the instruments
were granted. The expected volatility reflects an assessment of the company’s 90 day Volume Weighted Average Price (VWAP)
across the three year period preceding grant date (commensurate with the term), to adjust for the VWAP condition of the instrument.
The tradability discount was determined after consideration of specific lack of marketability terms and conditions such as being
unlisted instruments, vesting conditions such as ongoing employment, restricted transferability and escrow provisions.



No Performance Shares were issued in 2013.



Fully paid ordinary shares



No shares were issued to key management personnel
or employees as compensation during the year (2013: nil).



For details of shares and options issued in lieu of services rendered,
refer to issued capital disclosures (note 19) and non-cash investing and financing activities disclosures (note 23(b)).



F-45


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 23: Cash flow information



|                                                                           |  | Consolidated |            
|-------------------------------------------------------------------------- |  | ------------ | -----------
|                                                                           |  | 2014         |            
|                                                                           |  | $            |            
|                                                                           |  |              |            
|(a) Reconciliation of cash flow from operations with loss after income tax |  |              |            
|                                                                           |  |              |            
|Loss after income tax expense for the year                                 |  |              | (13,596,459
|                                                                           |  |              |            
|Adjustments for:                                                           |  |              |            
|                                                                           |  |              |            
|Depreciation and amortisation                                              |  |              | 1,224,238  
|Foreign exchange differences                                               |  |              | 32,284     
|Fixed asset write offs                                                     |  |              | -          
|Goodwill impairment expense                                                |  |              | -          
|Share based payments and related costs                                     |  |              | 5,144,969  
|Gain on acquisition of Paper Tree Limited                                  |  |              | -          
|Fair value gain on deferred consideration                                  |  |              | (383,933   
|Unwinding of the discount on deferred consideration                        |  |              | -          
|Loss on disposal of AMH Group                                              |  |              | -          
|Loss on disposal of non-current assets                                     |  |              | -          
|Gain on reversal of Peekable payable                                       |  |              | (91,527    
|Income from Sale of Business                                               |  |              | (109,493   
|Changes in operating assets and liabilities:                               |  |              |            
|(Increase)/Decrease in receivables                                         |  |              | 39,026     
|(Increase)/decrease in other assets                                        |  |              | (294,159   
|Increase / (Decrease) in payables                                          |  |              | 1,198,886  
|Increase / (Decrease) in provisions                                        |  |              | (264,912   
|Increase in current tax                                                    |  |              | 461,072    
|(Increase)/decrease in deferred tax assets                                 |  |              | (427,719   
|(Decrease)/ increase in deferred
    tax liability                         |  |              | -          
|Net cash used in operating activities                                      |  |              | (7,067,727 



(b)
Non-cash investing and financing activities



On 10 August 2012, the Company acquired OfferMobi
assets from Howmark Mobile, LLC. The fair value consideration was $4,547,173 comprising cash and equity. During the year, MOKO
issued equity consideration of $602,365 through the issue of 3,992,930 fully paid ordinary shares to Howmark Mobile, LLC. (2013:
$723,118 of 14,222,364 fully paid ordinary shares).



On 1 July 2013, MOKO Social Media Ltd completed
the acquisition of a controlling 51% share interest in a Sydney based e-commerce business, Deals I Love (Australia) Pty Ltd (DIL).The
fair value consideration was $40,000 comprising cash and equity. The fair value consideration was settled by way of issue of 400,000
options exercisable at $0.10 each on or before 28 November 2015.



Refer note 13 for further details of business
combinations.



F-46


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014





Note 23: Cash flow information (continued)



During the year, the Company issued the following
fully paid ordinary shares in satisfaction of convertible loan payable to director Johannes De Back:



|Date              |  | Details                           |  | Number of  shares |           |  | Issue Price  $ |  |      | Amount  $ | 
|----------------- |  | --------------------------------- |  | ----------------- | --------- |  | -------------- |  | ---- | --------- | 
|11 September 2013 |  | Share issue on conversion of loan |  |                   | 2,500,000 |  |                |  | 0.04 |           | 
|15 May 2014       |  | Share issue on conversion of loan |  |                   | 2,500,000 |  |                |  | 0.04 |           | 



Refer note 16 for further details of convertible
note funding.



During the year, the Company issued the following
fully paid ordinary shares in satisfaction of professional fees payable to consultants of the Company:



|Date            |  | Details                         |  | Number of  shares |           |  | Issue Price  $ |  |      | Amount  $ | 
|--------------- |  | ------------------------------- |  | ----------------- | --------- |  | -------------- |  | ---- | --------- | 
|31 October 2013 |  | Share issue in lieu of services |  |                   | 1,250,000 |  |                |  | 0.04 |           | 
|27 June 2014    |  | Share issue in lieu of services |  |                   | 500,000   |  |                |  | 0.22 |           | 



These transactions ae not reflected in the
statement of cash flows.



Note 24: Key management personnel disclosures



| | (a) | Directors
| | --- | ---------



The following persons were directors of MOKO Social Media Limited
during the financial year:



|Greg McCann      | - Non Executive Chairman                            
|---------------- | ----------------------------------------------------
|Ian Rodwell      | - Managing Director and Chief Executive Officer     
|Johannes De Back | - Non Executive Director                            
|Peter Yates      | - Non Executive Director                            
|Mark Hauser      | - Non-Executive Director (joined 1st February, 2014)



| | (b) | Key management personnel compensation
| | --- | -------------------------------------



The aggregate compensation made to directors
and other members of key management personnel of the Consolidated Entity is set out below:



|                                          |  | Consolidated |          
|----------------------------------------- |  | ------------ | ---------
|                                          |  | 2014         |          
|                                          |  | $            |          
|                                          |  |              |          
|Short-term employee benefits              |  |              | 551,700  
|Post-employment benefits                  |  |              | 36,775   
|Share based payments - Performance shares |  |              | 493,205  
|Share based payments - Options            |  |              | 2,723,037
|                                          |  |              | 3,804,717



F-47


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 24: Key management personnel disclosures (continued)



|Ordinary shares |  | Balance at start of  the year |            |  | Received during the year |  |   | Other changes during the year |  |  | Balance at end 
of the year | 
|--------------- |  | ----------------------------- | ---------- |  | ------------------------ |  | - | ----------------------------- |  |  | --------------------------- | 
|2014            |  |                               |            |  |                          |  |   |                               |  |  |                             | 
|G McCann        |  |                               | 7,944,444  |  |                          |  | - |                               |  |  | 5,500,000                   | 
|I Rodwell       |  |                               | 3,707,917  |  |                          |  | - |                               |  |  | 2,000,000                   | 
|J De Back       |  |                               | 30,932,539 |  |                          |  | - |                               |  |  | 9,365,171                   | 
|P Yates         |  |                               | 40,472,926 |  |                          |  | - |                               |  |  | 7,690,476                   | 
|M Hauser        |  |                               | -          |  |                          |  | - |                               |  |  | -                           | 
|                |  |                               | 83,057,826 |  |                          |  | - |                               |  |  | 24,555,647                  | 
|2013            |  |                               |            |  |                          |  |   |                               |  |  |                             | 
|G McCann        |  |                               | 5,444,444  |  |                          |  | - |                               |  |  | 2,500,000                   | 
|I Rodwell       |  |                               | 3,382,917  |  |                          |  | - |                               |  |  | 325,000                     | 
|J De Back       |  |                               | 30,932,539 |  |                          |  | - |                               |  |  | -                           | 
|P Yates         |  |                               | 34,308,371 |  |                          |  | - |                               |  |  | 6,164,555                   | 
|                |  |                               | 74,068,271 |  |                          |  | - |                               |  |  | 8,989,555                   | 



The numbers of options over ordinary shares
in the Company held during the financial year by each director of the Company and other key management personnel of the Company,
including their personally related parties, are set out below.



For the year ended 30 June
2014



|Options over  ordinary shares |  | Balance at the start of the year |            |  | Granted during the year as compensation |  |            | Exercised during the year |  |  | Lapsed  during the  year |   |  | Forfeited/ Other changes during the year |             |   | Balance at the end of the year | 
|----------------------------- |  | -------------------------------- | ---------- |  | --------------------------------------- |  | ---------- | ------------------------- |  |  | ------------------------ | - |  | ---------------------------------------- | ----------- | - | ------------------------------ | 
|2014                          |  |                                  |            |  |                                         |  |            |                           |  |  |                          |   |  |                                          |             |   |                                | 
|G McCann                      |  |                                  | 12,000,000 |  |                                         |  | 6,500,000  |                           |  |  | (5,000,000               | ) |  |                                          | (1,000,000  | ) |                                | 
|I Rodwell                     |  |                                  | 17,330,000 |  |                                         |  | 10,000,000 |                           |  |  | (7,000,000               | ) |  |                                          | (3,005,000  | ) |                                | 
|J De Back                     |  |                                  | 25,107,143 |  |                                         |  | 11,400,000 |                           |  |  | (2,250,000               | ) |  |                                          | (17,857,143 | ) |                                | 
|P Yates                       |  |                                  | 19,360,955 |  |                                         |  | 1,000,000  |                           |  |  | (5,000,000               | ) |  |                                          | (10,196,400 | ) |                                | 
|M Hauser (1)                  |  |                                  | 6,000,000  |  |                                         |  | 2,000,000  |                           |  |  | -                        |   |  |                                          |             |   |                                | 
|                              |  |                                  | 79,798,098 |  |                                         |  | 30,900,000 |                           |  |  | (19,250,000              | ) |  |                                          | (32,058,543 | ) |                                | 
|2013                          |  |                                  |            |  |                                         |  |            |                           |  |  |                          |   |  |                                          |             |   |                                | 
|G McCann                      |  |                                  | 6,000,000  |  |                                         |  | 5,000,000  |                           |  |  | -                        |   |  |                                          | -           |   |                                | 
|I Rodwell                     |  |                                  | 12,005,000 |  |                                         |  | 5,000,000  |                           |  |  | -                        |   |  |                                          | -           |   |                                | 
|J De Back                     |  |                                  | 20,107,143 |  |                                         |  | 5,000,000  |                           |  |  | -                        |   |  |                                          | -           |   |                                | 
|P Yates                       |  |                                  | 12,196,400 |  |                                         |  | 1,000,000  |                           |  |  | -                        |   |  |                                          | -           |   |                                | 
|                              |  |                                  | 50,308,543 |  |                                         |  | 16,000,000 |                           |  |  | -                        |   |  |                                          | -           |   |                                | 



|(1) | Options held on appointment (1 February 2014) (2,000,000 unlisted $0.04, expiry 30/06/2015, 1,000,000 unlisted $0.03, expiry
30/06/2015, 1,000,000 unlisted $0.04, expiry 30/06/2015, 1,000,000 unlisted $0.02, expiry 30/06/2015, 1,000,000 unlisted $0.11,
expiry 30/06/2015)
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-48


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



Note 25: Related party transactions



(a) Parent entity



MOKO Social Media Limited is the parent entity.



(b) Subsidiaries



Interests in subsidiaries are set out in note
26.



(c) Key management personnel



Disclosures relating to key management personnel
are set out in note 24 and the remuneration report in the Directors’ Report.



(d) Transactions with related parties



The following transactions occurred with related
parties:



On July 1, 2013, MOKO completed the acquisition
of a controlling 51% share interest in a Sydney based e-commerce business, Deals I Love (Australia) Pty Ltd (“DIL”).
The business combination was made for the purpose of MOKO expanding into the growing mobile commerce sector. The share acquisition
included a purchase of shares from a MOKO non-executive director, Mr. Johannes De Back, who after the acquisition has no further
equity interest in DIL. Acquisition date fair value of total consideration transferred was $40,000. The fair value consideration
was settled by way of issue of 400,000 options exercisable at $0.10 each on or before 28 November 2015.



Under the terms of the acquisition, MOKO was
also granted an option to acquire the remaining 49% of DIL and as a separate transaction agreed to loan funds to DIL for marketing
purposes, which loan bears interest of 10% per annum and is repayable on arms-length terms. On November 7, 2013, Mr. Johannes De
Back executed a personal letter of support to indemnify DIL in respect of its debts to a total liability value of $500,000 and
which may only be revoked with DIL’s prior written agreement.



During the year ended June 30, 2014, Mr. De
Back provided consulting services to MOKO through Dutchman Capital, of which he is a director, on normal commercial terms, for
which Dutchman Capital was paid $39,000 in fees (2013: $156,045).



During the year ended June 30, 2014, the Company
issued fully paid ordinary shares in satisfaction of convertible loans payable to director Johannes De Back (refer note 16 for
further details of convertible note funding):



|Date              |  | Details                           |  | Number of  shares |           |  | Issue Price  $ |  |      | Amount  $ | 
|----------------- |  | --------------------------------- |  | ----------------- | --------- |  | -------------- |  | ---- | --------- | 
|11 September 2013 |  | Share issue on conversion of loan |  |                   | 2,500,000 |  |                |  | 0.04 |           | 
|15 May 2014       |  | Share issue on conversion of loan |  |                   | 2,500,000 |  |                |  | 0.04 |           | 



|                                       |  | Consolidated |       
|-------------------------------------- |  | ------------ | ------
|                                       |  | 2014         |       
|                                       |  | $            |       
|Amounts recognised as an expense       |  |              |       
|Company secretarial and accounting (1) |  |              | 97,793
|Total                                  |  |              | 97,793



|(1) |  | Andrew Bursill, Company secretary, is also an associate of Franks & Associates
Pty Ltd who provides accounting and Company secretarial services to MOKO Social Media Limited. The contract between MOKO Social
Media Limited and Franks & Associates is based on normal commercial terms.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-49


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 25: Related party transactions (continued)



| | (d) | Loans to/from related parties
| | --- | -----------------------------



Loans are made to/by the Parent Entity, MOKO
Social Media Limited, to its wholly owned subsidiaries for capital purchases and working capital purposes. The loans outstanding
between the Parent Entity and its subsidiaries have no fixed date of repayment and are non-interest bearing. Details of the Parent
Entity’s interest in its subsidiaries are set out in note 27. The loans outstanding between the Moko and Deals I Love (Australia)
Pty Ltd have no fixed date of repayment but with 10% interest bearing per loan agreement.



|                                 |  | Company |         
|-------------------------------- |  | ------- | --------
|                                 |  | 2014    |         
|                                 |  | $       |         
|Non-Current                      |  |         |         
|Loans to subsidiaries:           |  |         |         
|MOKO.mobi Inc                    |  |         | (572,875
|Deals I Love (Australia) Pty Ltd |  |         | 535,280 
|All Night Media Limited          |  |         | (120,014
|Total                            |  |         | (157,609



No dividends were received from the subsidiaries in the 2014 or
2013 financial year.



Terms and conditions



All transactions were made on normal commercial
terms and conditions and at market rates.



Note 26: Parent entity information



Set out below is the supplementary information
about the parent entity.



|                                                           |  | Parent |            
|---------------------------------------------------------- |  | ------ | -----------
|                                                           |  | 2014   |            
|Statement of profit or loss and other comprehensive income |  | $      |            
|Loss after income tax                                      |  |        | (12,914,498
|                                                           |  |        |            
|Total comprehensive income                                 |  |        | (12,914,498
|                                                           |  |        |            
|Statement of financial position                            |  |        |            
|Total current assets                                       |  |        | 9,704,387  
|                                                           |  |        |            
|Total assets                                               |  |        | 13,051,229 
|                                                           |  |        |            
|Total current liabilities                                  |  |        | 1,627,957  
|                                                           |  |        |            
|Total liabilities                                          |  |        | 1,663,004  
|                                                           |  |        |            
|Equity                                                     |  |        |            
|Issued capital                                             |  |        | 41,679,662 
|Reserves                                                   |  |        | 8,420,633  
|Accumulated losses                                         |  |        | (38,712,070
|                                                           |  |        |            
|Total equity                                               |  |        | 11,388,225 



F-50


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 26: Parent entity information (continued)



Contingent liabilities



The parent entity had no contingent liabilities
as at 30 June 2014 and 30 June 2013.



Capital commitments - Property, plant and
equipment



The parent entity had no capital commitments
for property, plant and equipment as at 30 June 2014 and 30 June 2013.



Significant accounting policies



The accounting policies of the parent entity
are consistent with those of the Consolidated Entity, as disclosed in note 1, except for the following:



| | · | Investments
in subsidiaries are accounted for at fair value, less any impairment, in the parent entity.
| | - | -------------------------------------------------------------------------------------------------------



Note 27: Subsidiaries



The consolidated financial statements incorporate the assets, liabilities
and results of the following wholly-owned subsidiaries in accordance with the accounting policy described in note 1:



The entities and interests acquired are set
out below:



|                        |  |                          |  | Entity interest |    
|----------------------- |  | ------------------------ |  | --------------- | ---
|                        |  | Country of incorporation |  | 2014            |    
|Moko Mobi Inc           |  | United States of America |  |                 | 100
|All Night Media Limited |  | England                  |  |                 | 100
|Paper Tree Limited      |  | British Virgin Islands   |  |                 | 100



The consolidated financial statements incorporate the assets, liabilities
and results of the following subsidiary with non-controlling interests in accordance with the accounting policy described in note
1:



For the year ended 30 June
2014



|Name                             |  | Country of 
incorporation |  | Parent  Ownership interest |    |   | Non-controlling   Ownership interest | 
|-------------------------------- |  | ------------------------- |  | -------------------------- | -- | - | ------------------------------------ | 
|Deals I Love (Australia) Pty Ltd |  | Australia                 |  |                            | 51 | % |                                      | 



* The Non-controlling interest hold 49% of
the voting rights of Deals I Love (Australia) Pty Ltd.



Summarised financial information



Summarised financial information of the subsidiary
with non-controlling interests that are material to the Consolidated Entity are set out below:



|                                           |  | Deals I Love (Australia)  Pty Ltd |        
|------------------------------------------ |  | --------------------------------- | -------
|                                           |  | 2014                              |        
|                                           |  | $                                 |        
|Summarised statement of financial position |  |                                   |        
|Current assets                             |  |                                   | 136,447
|Non-current assets                         |  |                                   | 2,485  
|Total assets                               |  |                                   | 138,932

F-51


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



Note 27: Subsidiaries (continued)



|                                                                      |  | Deals I Love (Australia)  Pty Ltd |           
|--------------------------------------------------------------------- |  | --------------------------------- | ----------
|                                                                      |  | 2014                              |           
|                                                                      |  | $                                 |           
|Current liabilities                                                   |  |                                   | 961,942   
|Non-current liabilities                                               |  |                                   | -         
|Total liabilities                                                     |  |                                   | 961,942   
|Net assets                                                            |  |                                   | (823,010  
|                                                                      |  |                                   |           
|Summarised statement of profit or loss and other comprehensive income |  |                                   |           
|Revenue                                                               |  |                                   | 4,274,571 
|Expenses                                                              |  |                                   | (4,527,831
|                                                                      |  |                                   |           
|Profit before income tax expense                                      |  |                                   | (253,260  
|Income tax expense                                                    |  |                                   | -         
|                                                                      |  |                                   |           
|Profit after income tax expense                                       |  |                                   | (253,260  
|                                                                      |  |                                   |           
|Other comprehensive income                                            |  |                                   | -         
|                                                                      |  |                                   |           
|Total comprehensive income                                            |  |                                   | (253,260  
|                                                                      |  |                                   |           
|Statement of cash flows                                               |  |                                   |           
|Net cash from operating activities                                    |  |                                   | (416,697  
|Net cash used in investing activities                                 |  |                                   | -         
|Net cash used in financing activities                                 |  |                                   | 402,832   
|                                                                      |  |                                   |           
|Net increase/(decrease) in cash and cash equivalents                  |  |                                   | (13,865   
|                                                                      |  |                                   |           
|Other financial information                                           |  |                                   |           
|Loss attributable to non-controlling interests                        |  |                                   | (124,098  
|Accumulated non-controlling interests at the end of reporting period  |  |                                   | (124,098  



MOKO completed the acquisition of a
controlling 51% share interest in Deals I Love (Australia) Pty Ltd on 1 July 2013.



F-52


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 28: Earnings per share



|                                                                                                              |  | 2014 |             |   | 2013 |  |             | 2012 | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- | 
|                                                                                                              |  | $    |             |   | $    |  |             | $    | 
|(a) Earnings per share from continuing operations                                                             |  |      |             |   |      |  |             |      | 
|Loss after income tax attributable to owners of MOKO Social Media Limited                                     |  |      | (13,472,361 | ) |      |  | (4,711,294  | )    | 
|Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share |  |      | 472,906,543 |   |      |  | 306,882,356 |      | 



|                         |  | 2014  |       |   | 2013  |  |       | 2012  | 
|------------------------ |  | ----- | ----- | - | ----- |  | ----- | ----- | 
|                         |  | cents |       |   | cents |  |       | cents | 
|Basic earnings per share |  |       | (2.85 | ) |       |  | (1.54 | )     | 



|                                                                                                              |  | 2014 |             |  | 2013 |  |             | 2012 | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- |  | ---- |  | ----------- | ---- | 
|                                                                                                              |  | $    |             |  | $    |  |             | $    | 
|(b) Earnings per share from discontinued operations                                                           |  |      |             |  |      |  |             |      | 
|Loss after income tax attributable to owners of MOKO Social Media Limited                                     |  |      | -           |  |      |  | (1,566,785  | )    | 
|Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share |  |      | 472,906,543 |  |      |  | 306,882,356 |      | 



|                         |  | 2014  |   |  | 2013  |  |       | 2012  | 
|------------------------ |  | ----- | - |  | ----- |  | ----- | ----- | 
|                         |  | cents |   |  | cents |  |       | cents | 
|Basic earnings per share |  |       | - |  |       |  | (0.51 | )     | 



|                                                                                                              |  | 2014 |             |   | 2013 |  |             | 2012 | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- | 
|                                                                                                              |  | $    |             |   | $    |  |             | $    | 
|(c) Earnings per share from loss                                                                              |  |      |             |   |      |  |             |      | 
|Loss after income tax attributable to owners of MOKO Social Media Limited                                     |  |      | (13,472,361 | ) |      |  | (6,278,079  | )    | 
|Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share |  |      | 472,906,543 |   |      |  | 306,882,356 |      | 



|                         |  | 2014  |       |   | 2013  |  |       | 2012  | 
|------------------------ |  | ----- | ----- | - | ----- |  | ----- | ----- | 
|                         |  | cents |       |   | cents |  |       | cents | 
|Basic earnings per share |  |       | (2.85 | ) |       |  | (2.05 | )     | 





(d)
Diluted earnings per share



Options issued to shareholders and related
parties are considered to be potential ordinary shares and have been considered in the determination of diluted earnings per share.
The calculation of dilutive earnings per share does not assume conversion, exercise, or other issue of potential ordinary shares
that would have an antidilutive effect on earnings per share. Diluted earnings per share are therefore not different from basic
earnings per share



Note 29: Contingencies



There were no contingent liabilities at 30 June 2014 (2013: $nil).



F-53


Table of Contents


NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 30: Commitments



Lease commitments - operating



Committed at the reporting date but not recognised as liabilities,
payable:



|Equipment Lease      |  | Consolidated |  
|-------------------- |  | ------------ | -
|                     |  | 2014         |  
|                     |  | $            |  
|Within one year      |  |              | -
|One and five years   |  |              | -
|More than five years |  |              | -
|                     |  |              | -



Operating lease commitments include contracted
amounts for computer equipment under non-cancellable operating leases expiring within one year, with an option to extend. On renewal,
the terms of the leases are renegotiated.



During the year an amount of $40,983 (2013:
$224,385) was recognised as an expense in profit or loss in respect of operating leases.



|Rental Lease         |  | Consolidated |        
|-------------------- |  | ------------ | -------
|                     |  | 2014         |        
|$                    |  | $            |        
|Within one year      |  |              | 242,086
|One and five years   |  |              | 361,855
|More than five years |  |              | -      
|                     |  |              | 603,941



The Consolidated Entity leases its offices
in United States of America and Australia. The US lease includes a lease for a New York office until December 2014 after which
it becomes month by month and a three year lease commitment for an office in Alexandria, VA.



During the year an amount of $198,236 (2013:
$216,111) was recognised as an expense in profit or loss in respect of operating rental leases.



Note 31: Events occurring after the statement of financial position
date



Share Issues



Since 30 June 2014, the following fully paid
ordinary shares were issued as follows:



| | · | On 1 July, 2014 (1 July, 2014 New York
time), MOKO closed its U.S. Initial Public Offering and 1,100,000 ADS (representing 44,000,000 fully paid ordinary shares) were
issued, and proceeds of USD$8,250,000 (before underwriting commissions and transaction costs) was received in cash;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the issue of 1,000,000 shares at $0.10
each through the exercise of options, raising $100,000 in cash;
| | - | ------------------------------------------------------------------------------------------------------

| | · | the issue of 1,000,000 shares at $0.20
each through the exercise of options, raising $200,000 in cash;
| | - | ------------------------------------------------------------------------------------------------------

| | · | the issue of 50,000 shares at $0.05 each
through the exercise of listed options, raising $2,500 in cash;
| | - | --------------------------------------------------------------------------------------------------------

| | · | the issue of 400,000 shares at $0.05 each
through the exercise of listed options, raising $20,000 in cash;
| | - | ----------------------------------------------------------------------------------------------------------

| | · | the issue of 3,912 shares at $0.05 each
through the exercise of listed options, raising $195.6 in cash;
| | - | -------------------------------------------------------------------------------------------------------

| | · | the issue of 50,000 shares at $0.05 each
through the exercise of listed options, raising $2,500 in cash;
| | - | --------------------------------------------------------------------------------------------------------

| | · | the issue of 200,000 shares at $0.05 each
through the exercise of listed options, raising $10,000 in cash; and
| | - | --------------------------------------------------------------------------------------------------------------

| | · | the issue of 1,000,000 shares at $0.05
each through the exercise of listed options, raising $50,000 in cash
| | - | -----------------------------------------------------------------------------------------------------------



Tagroom



On 29 September 2014, MOKO entered a Share Purchase Agreement to
acquire 80% of the ordinary shares as a controlling interest in Tagroom Pty Ltd. Tagroom is a news and entertainment service that
harnesses social, mobile and visual technologies used by contemporary consumers (www.tagroom.com). The acquisition brings
with it three new senior team members experienced in the creation of viral media and shareable entertainment content for the important
18-30 year-old demographic. The acquisition has an effective transaction date of October 1, 2014.

F-54


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 31: Events occurring after the statement of financial position
date (continued)



Being so close to the date of this report,
the Directors consider it impracticable to estimate the preliminary business combination accounting.



No other matter or circumstance has arisen
since 30 June 2014 that has or may significantly affect:



(a) MOKO Social Media Limited
operations in future financial years, or

(b) The results of those
operations in future financial years, or

(c) MOKO Social Media Limited’s
state of affairs in future financial years.



Note 32: Auditor’s remuneration



During the year the following
fees were paid or payable for services provided by the auditor:



|                                                |  | Consolidated |        
|----------------------------------------------- |  | ------------ | -------
|                                                |  | 2014         |        
|                                                |  | $            |        
|Audit services                                  |  |              |        
|Audit and review of financial reports – BDO     |  |              | 318,537
|F1 review of financial reports – BDO            |  |              | 200,019
|Tax advice - BDO                                |  |              | 10,790 
|Audit and review of Paper Tree Limited – PKF UK |  |              | -      
|                                                |  |              |        
|                                                |  |              | 529,346



Note 33: Discontinued operations



This note relates to the 2013 financial year.



| | (a) | Details of operations disposed
| | --- | ------------------------------



On 27 April 2013, the board of directors entered
into a sales agreement to dispose of Antiphony Management Holdings Limited (AMH) and its operating subsidiaries (the AMH Group),
which were incorporated in and operated mobile content businesses from, the United Kingdom. The sale was completed on 29 April
2013, on which date control of the business passed to the acquirer.



The business had been operating in a challenging
market environment and was becoming cash flow intensive due to the high up-front marketing costs and lower margins with significant
competitor activity, making it difficult for management to actively seek growth and maintain acceptable profitability.



The entities disposed of include:



| | - | Antiphony Management Holdings Limited
| | - | -------------------------------------

| | - | Cell Media International Limited
| | - | --------------------------------

| | - | Blue Stream Mobile Limited
| | - | --------------------------

| | - | Mobgains Limited
| | - | ----------------

| | - | Antiphony Limited
| | - | -----------------

| | - | Southern Breeze Trading 3 (PTY) Ltd
| | - | -----------------------------------

| | - | American Mobile Ventures Limited
| | - | --------------------------------



The gross sales consideration received was
GBP1.00 ($2.00). Additional potential consideration of up to GBP2,125,000 ($3,204,644) has not been brought to account as it is
contingent on business performance and unlikely to being received.



F-55


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 33: Discontinued operations (continued)



| | (b) | Financial performance of operations disposed of during the year(2014: Nil)
| | --- | --------------------------------------------------------------------------



|                                                                    |  | 2013 |            |   | 2012 | 
|------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | 
|                                                                    |  | $    |            |   | $    | 
|Revenue                                                             |  |      | 9,128,887  |   |      | 
|Gain on acquisition of subsidiaries                                 |  |      | -          |   |      | 
|Interest received                                                   |  |      | -          |   |      | 
|Content expenses                                                    |  |      | (7,545,664 | ) |      | 
|Expenses                                                            |  |      | (2,089,545 | ) |      | 
|Depreciation and amortisation                                       |  |      | (94,346    | ) |      | 
|Loss before tax from discontinued operations                        |  |      | (600,668   | ) |      | 
|                                                                    |  |      |            |   |      | 
|Income tax expense                                                  |  |      | (205,097   | ) |      | 
|                                                                    |  |      |            |   |      | 
|Loss after income tax                                               |  |      | (805,765   | ) |      | 
|                                                                    |  |      |            |   |      | 
|Loss on disposal before income tax                                  |  |      | (761,020   | ) |      | 
|                                                                    |  |      |            |   |      | 
|Income tax expense                                                  |  |      | -          |   |      | 
|                                                                    |  |      |            |   |      | 
|(Loss)/profit after income tax expense from discontinued operations |  |      | (1,566,785 | ) |      | 



The loss from discontinued operations of $1,566,785
(2012 profit: $1,451,091) is attributable entirely to the owners of the company.



| | (c) | Assets and liabilities an cash flow information of disposed group
| | --- | -----------------------------------------------------------------



The major classes of assets and liabilities
of AMH Group at 29 April 2013 were as follows:



|                              |  | 2013 |           |  | 2012 | 
|----------------------------- |  | ---- | --------- |  | ---- | 
|                              |  | $    |           |  | $    | 
|Cash and cash equivalents     |  |      | 86,549    |  |      | 
|Trade and other receivables   |  |      | 958,576   |  |      | 
|Other current assets          |  |      | 155,654   |  |      | 
|Property, plant and equipment |  |      | 372,022   |  |      | 
|Total assets                  |  |      | 1,572,801 |  |      | 



F-56


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2014



Note 33: Discontinued operations (continued)



|                          |  | 2013 |           |  | 2012 | 
|------------------------- |  | ---- | --------- |  | ---- | 
|                          |  | $    |           |  | $    | 
|Trade and other payables  |  |      | 1,499,391 |  |      | 
|Total liabilities         |  |      | 1,499,391 |  |      | 
|                          |  |      |           |  |      | 
|Net assets/ (liabilities) |  |      | 73,410    |  |      | 



(d) Cash flow information of disposed group



|                                                   |  | 2013 |            |   | 2012 | 
|-------------------------------------------------- |  | ---- | ---------- | - | ---- | 
|                                                   |  | $    |            |   | $    | 
|Operating activities                               |  |      | (316,504   | ) |      | 
|Investing activities – including payments for sale |  |      | (330,335   | ) |      | 
|Financing activities                               |  |      | (458,647   | ) |      | 
|Net cash (outflow) / inflow                        |  |      | (1,105,486 | ) |      | 



(e) Consideration Paid



|                                    |  | 2013 |         
|----------------------------------- |  | ---- | --------
|                                    |  | $    |         
|Gross Sales Consideration           |  |      | 2       
|Less: Amounts payable on disposal   |  |      | (422,700
|Less: Liabilities assumed           |  |      | (264,912
|Net disposal consideration          |  |      | (687,610
|                                    |  |      |         
|Net Assets disposed of in AMH Group |  |      | (73,410 
|                                    |  |      |         
|Loss on disposal before income tax  |  |      | (761,020



(f) Net cash outflow on disposal



|                                                       |  | 2013 |         
|------------------------------------------------------ |  | ---- | --------
|                                                       |  | $    |         
|Cash                                                   |  |      | (256,087
|Less: Cash and cash equivalents disposed of            |  |      | (86,549 
|Reflected in the consolidated statements of cash flows |  |      | (342,636





F-57