UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 20-F

(Mark one)



| |  ̈ | 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, 2015



OR



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



For the transition period from __________ to _________



OR



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



Date of event requiring this shell company report
__________



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)



Moko.mobi, Inc.
320 King Street
Alexandria, VA 22314
Attn: Ian Rodwell
Tel: (571) 982-3000
Fax: (917) 591-1890








(Name, Telephone, E-mail and/or
Facsimile number and Address
of Company Contact Person)



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, 2015, the registrant had 755,486,679 ordinary shares
outstanding.



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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



| | xYes |  ̈No
| | ---- | ---



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one):



| ̈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 Reporting       | oOther
|-------- | ---------------------------------------- | ------
|         | Standards as issued by the International |       
|         | Accounting Standards Board               |       



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                                       | 17  
|C.       | Organizational structure                                | 24  
|D.       | Property, plants and equipment                          | 24  
|         |                                                         |     
|Item 4A. | Unresolved Staff Comments                               | 26  
|         |                                                         |     
|Item 5.  | Operating and Financial Review and Prospects            | 26  
|         |                                                         |     
|Item 6.  | Directors, Senior Management And Employees              | 40  
|A.       | Directors and senior management                         | 40  
|B.       | Compensation                                            | 41  
|C.       | Board practices                                         | 43  
|D.       | Employees                                               | 45  
|E.       | Share ownership                                         | 45  
|         |                                                         |     
|Item 7.  | Major Shareholders and Related Party
    Transactions   | 46  
|A.       | Major shareholders                                      | 46  
|B.       | Related party transactions                              | 46  
|C.       | Interests of experts and counsel                        | 47  
|         |                                                         |     
|Item 8.  | Financial Information                                   | 48  
|A.       | Consolidated Statements and Other Financial Information | 48  
|B.       | Significant Changes                                     | 48  
|         |                                                         |     
|Item 9.  | The Offer and Listing                                   | 48  
|A.       | Offer and listing details                               | 48  
|B.       | Plan of distribution                                    | 48  
|C.       | Markets                                                 | 48  
|D.       | Selling shareholders                                    | 49  
|E.       | Dilution                                                | 49  
|F.       | Expenses of the issue                                   | 49  











|Item 10. | Additional Information                                                       | 49
|-------- | ---------------------------------------------------------------------------- | --
|A.       | Share capital                                                                | 49
|B.       | Memorandum and articles of association                                       | 49
|C.       | Material contracts                                                           | 49
|D.       | Exchange controls                                                            | 50
|E.       | Taxation                                                                     | 50
|F.       | Dividends and paying agents                                                  | 56
|G.       | Statement by experts                                                         | 56
|H.       | Documents on display                                                         | 56
|I.       | Subsidiary Information                                                       | 57
|         |                                                                              |   
|Item 11. | Quantitative and Qualitative
    Disclosures About Market Risk               | 57
|         |                                                                              |   
|Item 12. | Description of Securities Other Than Equity Securities                       | 57
|         |                                                                              |   
|PART II 
|         |                                                                              |   
|Item 13. | Defaults, Dividend Arrearages And Delinquencies                              | 58
|         |                                                                              |   
|Item 14. | Material Modifications To The Rights Of Security Holders And Use Of Proceeds | 58
|         |                                                                              |   
|Item 15. | Controls and Procedures                                                      | 58
|         |                                                                              |   
|Item 16  | [Reserved]                                                                   | 59
|         |                                                                              |   
|Item 16A | — Audit Committee Financial Expert                                           | 59
|         |                                                                              |   
|Item 16B | — Code of Ethics                                                             | 59
|         |                                                                              |   
|Item 16C | — Principal Accountant Fees and Services                                     | 59
|         |                                                                              |   
|Item 16D | — Exemption from the Listing Standards for Audit Committees                  | 59
|         |                                                                              |   
|Item 16E | —  Purchases of Equity Securities by the Issuer and Affiliated Purchasers    | 59
|         |                                                                              |   
|Item 16F | — Change in Registrant’s Certifying Accountant                               | 59
|         |                                                                              |   
|Item 16G | —  Corporate Governance                                                      | 59
|         |                                                                              |   
|Item 16H | —  Mine Safety Disclosure                                                    | 60













|PART III  
|----------
|          
|Item 17   
|Item 18.  
|Item 19   
|          
|Signatures






Table of Contents




CERTAIN INFORMATION



As used in this Annual Report on Form 20-F
(the “Annual Report”), unless otherwise indicated or the context otherwise requires, 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 $0.7704 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, 2015. 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 2015, 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 “Operating and Financial Review and Prospects.” 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


Table of Contents




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 “Operating and Financial Review and Prospects” 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 “Operating and Financial Review and Prospects,”
and the Financial Statements and related notes thereto included elsewhere in this Annual Report.



|                                                                                                       |  | Fiscal
    Year Ended June 30 |            
|------------------------------------------------------------------------------------------------------ |  | ----------------------------- | -----------
|                                                                                                       |  | 2015                          |            
|                                                                                                       |  | A$                            |            
|Statement of Profit or Loss Data                                                                       |  |                               |            
|Revenue from continuing operations                                                                     |  |                               | 6,287,133  
|Other income and revenue                                                                               |  |                               | 1,137,615  
|Fair value gain on deferred consideration                                                              |  |                               | -          
|Expenses                                                                                               |  |                               | (27,899,016
|Loss before income tax expense from continuing operations                                              |  |                               | (20,474,268
|Income tax benefit/(expense)                                                                           |  |                               | 180,261    
|Loss after income tax benefit from continuing operations                                               |  |                               | (20,294,007
|(Loss)/profit after income tax benefit from discontinued operations                                    |  |                               | -          
|Loss after income tax for the year                                                                     |  |                               | (20,294,007
|Other comprehensive income:                                                                            |  |                               |            
|Exchange differences on translation of foreign operations                                              |  |                               | 1,397,333  
|Total comprehensive loss for the year                                                                  |  |                               | (18,896,674
|Total comprehensive loss for the year is attributable to:                                              |  |                               |            
|Continuing operations                                                                                  |  |                               | (20,013,288
|Discontinued operations                                                                                |  |                               | -          
|Owners of MOKO Social Media Limited                                                                    |  |                               | (20,013,288
|Loss attributable to:                                                                                  |  |                               |            
|Owners of the Company                                                                                  |  |                               | (20,013,288
|Non-controlling interests                                                                              |  |                               | (280,719   
|Total comprehensive loss attributable to:                                                              |  |                               |            
|Owners of the Company                                                                                  |  |                               | (18,615,955
|Non-controlling interests                                                                              |  |                               | (280,719   
|Earnings per share from continuing operations attributable to the owners of MOKO Social Media Limited: |  |                               |            
|Basic / Diluted EPS                                                                                    |  |                               | (3.28      



1


Table of Contents




|                                     |  | As
    of June 30 |            
|------------------------------------ |  | ----------------- | -----------
|                                     |  | 2015              |            
|                                     |  | A$                |            
|Statement of Financial Position Data |  |                   |            
|Current assets:                      |  |                   |            
|Cash and cash equivalents            |  |                   | 7,219,908  
|Trade and other receivables          |  |                   | 501,472    
|Other current assets                 |  |                   | 1,017,204  
|Total current assets                 |  |                   | 8,738,584  
|Non-current assets                   |  |                   |            
|Property, plant and equipment        |  |                   | 255,961    
|Intangibles                          |  |                   | 3,814,088  
|Available-for-sale financial assets  |  |                   | 1,297,811  
|Deferred tax assets                  |  |                   | -          
|Total non-current assets             |  |                   | 5,367,860  
|Total assets                         |  |                   | 14,106,444 
|                                     |  |                   |            
|Current liabilities                  |  |                   |            
|Deferred consideration               |  |                   | -          
|Trade and other payables             |  |                   | 2,569,262  
|Borrowings                           |  |                   | -          
|Employee benefits                    |  |                   | 411,076    
|Provisions                           |  |                   | -          
|Income tax provision                 |  |                   | -          
|Total current liabilities            |  |                   | 2,980,338  
|Non-current liabilities              |  |                   |            
|Employee benefits                    |  |                   | 45,530     
|Deferred tax liability               |  |                   | -          
|Total non-current liabilities        |  |                   | 45,530     
|Total liabilities                    |  |                   | 3,025,868  
|Net assets                           |  |                   | 11,080,576 
|Equity                               |  |                   |            
|Issued capital                       |  |                   | 58,214,371 
|Reserves                             |  |                   | 12,213,980 
|Accumulated losses                   |  |                   | (58,942,958
|Non-controlling interest             |  |                   | (404,817   
|Total equity                         |  |                   | 11,080,576 



The total outstanding ordinary shares at June 30, 2015, is
755,486,679 (2014: 552,853,091).



The total Performance Shares outstanding at June 30, 2015, is
20,000,000 (2014: 20,000,000).



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, 2015, the noon buying rate was A$0.7020 per $1.00.



|               |  | A$
    Per USD$ |       
|-------------- |  | --------------- | ------
|Year Ended     |  | High            |       
|June 30, 2011  |  |                 | 1.0803
|June 30, 2012  |  |                 | 1.1026
|June 30, 2013  |  |                 | 1.0573
|June 30, 2014  |  |                 | 0.9705
|June 30, 2015  |  |                 | 0.9488
|Month Ended    |  |                 |       
|April 2015     |  |                 | 0.7825
|May 2015       |  |                 | 0.8118
|June 2015      |  |                 | 0.7831
|July 2015      |  |                 | 0.7664
|August 2015    |  |                 | 0.7419
|September 2015 |  |                 | 0.7222



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$20.5 million ($15.8 million) and A$13.6 million,
for the fiscal years ended June 30, 2015 and June 30, 2014, respectively. From our inception in 2004 through June 30, 2015, we
have aggregate accumulated losses of A$58.9 million ($45.4 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.



Our independent registered public
accounting firm has taken an emphasis of matter qualification regarding our ability to continue as a going concern.



Our auditors have issued a “going
concern” emphasis of matter qualification regarding their opinion on our June 30, 2015 financial statements,
indicating the existence of a material uncertainty that may cast substantial doubt that we can continue as an ongoing
business. There can be no assurance
that our current cash reserves and anticipated revenues will be sufficient to enable us to reach a cash-flow positive position
or fully finance our business plan. MOKO is and will, until such time as its profitability is achieved, remain reliant upon current
cash reserves, ongoing funding and may also require additional funding. Such additional funding may not be
available on terms favorable to us, or at all. Our financial statements do not include any adjustments as a result of this uncertainty.
If we cannot continue as a viable entity, our shareholders may lose some or all of their investment in us.



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 composition (and estimated values) of the assets and the
nature of the income of us and our subsidiaries for our taxable year ended June 30, 2015, we do not believe that we
will be treated as a PFIC for such taxable year. However, because we have not performed a definitive
analysis as to our PFIC status for our 2015 fiscal year, there can be no assurance with respect to our status as a PFIC
for such 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 are
subject to significant additional requirements for enhanced financial reporting and internal controls. We are 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
this annual report on Form 20-F. 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.



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 certain
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 require one-third of our board of directors to be elected annually 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



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 Social operating segment. The 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 are in the process of pursuing 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.



During 2012, 2013, 2014 and 2015 we expanded
the reach of our platform to support intended global growth across four main business lines and revenue streams:



• Mobile Social



• Mobile Advertising



• Mobile Content; and



• Mobile Commerce



Mobile Social — MOKO’s
proprietary mobile social networks and community and chat 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.



Mobile Advertising — MOKO’s
proprietary U.S. mobile adnetwork “MOKO Performance Network” (formerly referred to as “OfferMobi”) which
was acquired in August 2012 and historically worked with other adnetworks to obtain advertising offers for performance based advertisers
seeking specific audiences for their offers and with publishers in identifying the right advertisement/offers for the audiences
they had, rather than directly with the advertisers themselves. This is commonly referred to as “rebrokering” and
creates a situation where advertisers are unaware of the locations that their ads are placed, called “blind” advertising.



Mobile Content — MOKO’s
U.K. division that bundles and sells entertainment products direct to mobile on a pay as you go basis. This business line was
significant to the financial results in the reported periods although it ceased in the 2013 fiscal year following a strategic
review and cessation before a re-focus on Customized Mobile Social Advertising in the U.S. market.



Mobile Commerce — MOKO’s
Australian based online, flash sales and aspiring e-commerce product sales business, DIL which sells merchant products to customers
through its website, www.dealsilove.com.au. This business was acquired in July 2013 and was significant to MOKO’s
financial results for the six months ended December 31, 2013. Under the terms of the acquisition, MOKO was granted a call option
to acquire the remaining 49% of DIL of the following key terms:



• Exercisable from 12 months after
acquisition until January 31, 2016;



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• Subject to variation by mutual agreement;



• Subject to termination due to default
by either party or by mutual agreement;



• Purchase price determined by reference
to a formula of 49% x (1 minus an applied discount rate) multiplied by the greater of either 3 multiplied by (Gross Margin x 0.75
plus EBITDA x 0.25) or fair value as agreed by the parties.



The acquisition was made to grow DIL’s
overall market share of the total Australian, online flash sales business and to grow our e-commerce capability while assessing
its possible application to the REC*IT user base.



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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 5, 442-446
Beaufort Street, Highgate, Western Australia, 6003, Australia.



B.  Business Overview



Overview



MOKO 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.



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 we build highly tailored mobile community applications that generic social networks generally do not.
Our technology platform has been designed to enable a high degree of flexibility, permitting us to design and build customized
applications.



We have entered into contractual relationships to serve a number of social communities, including those of U.S. university intramural sports participants, U.S. high school students, U.S.
running enthusiasts, participants in progressive U.S. politics and millennial women (i.e. between the ages of 18-34).



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:



• Student Group —REC*IT, BigTeams powered
by REC*IT and Speakiesy are key products in this group.



• Active Lifestyle Group —RunHaven is the
main product in the Active Lifestyle Group.



• Political Group —BNR and VOYCIT are the
main products in the political group.



We also have two other products called Tagroom
and Deals I Love that are designed to assist in serving our three core markets.



I. Student Group



Our student group consists of three products:



REC*IT.REC*IT is a mobile application
we designed as a student tool for U.S. colleges and universities. REC*IT represents our most mature application, having been launched
in August 2014 in time for the 2014/2015 academic year. In October 2013, we entered an exclusive three-year agreement (with the
possibility of extension) with IM Leagues (“IML”) which operates the imleagues.com sports website used by recreational
and intramural sports departments. Today, more than 950 colleges and universities across the U.S. use the IML sports software.
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 relating to 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.



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.



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In January 2015, we entered into an amended
agreement with IML. This amended agreement automatically renews for an unlimited number of additional one year terms until we elect
to terminate with the effect of providing us with exclusive rights in perpetuity, subject to us meeting the conditions of advance
payments and standard operational responsibilities. The amended agreement also changes the commercial terms from a flat license
fee to a minimum guarantee against a 10% revenue share on the net revenues from REC*IT.



The REC*IT mobile application has
been 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 and
individual performances, and to post photos and other content related to campus sports and, recreational and leisure
activities. REC*IT also enables students to share information and content via social network applications such as
Facebook and Twitter.



As of October 2015, REC*IT reaches more
than 950 US colleges, providing potential access to more than 11 million university students. This confirms REC*IT’s position
as the mobile app leader in college sports and recreational activities. As of June 2015, REC*IT had been downloaded just over 227,000
times.



Moko launched a second generation
version of REC*IT in September 2015. REC*IT 2.0, as it is known, provides a number of improvements:



• Additional features and functionality enabling
the offer of fitness-related and other ad-hoc campus recreational activities.



• Access to in-app discovery of teams, events
and activities, including what’s on at users’ campus gym.



• Registration will now be possible for teams,
clubs and fitness activities.



• Registration issues experienced by certain
colleges will be addressed using the Innosoft Fusion technology to which MOKO acquired access in February 2015.



At present, students are required to register
for intramural activities on IML’s website. REC*IT 2.0 will allow students to log in and register on the spot (hence the
term “in-app registration”), positioning the app as a must-have utility, and also improving convenience for students
wishing to discover what sporting and recreational activities are available at their campus, on their mobile device.



BigTeams powered by REC*IT.In April
2015, we announced an exclusive agreement with U.S. group BigTeams, under which we will expand into the U.S. high school market.
The deal will enable us to launch a version of our REC*IT app to students and their parents in more than 4,000 U.S. high schools.
BigTeams provides these schools with online tools and data for sports team administration, event management and fundraising and
will provide the data for the new REC*IT app.



Under the agreement, we have acquired
an effective 10% interest in BigTeams for $1 million and have the option to increase this to 23% for an additional $1.5
million by February 1, 2016, which if exercised, will make us BigTeams’s second largest shareholder.



Speakiesy.Speakiesy is our new closed
campus community app that allows students to record and share funny, curious or noteworthy things around school. Speakiesy has
been designed in response to student demand for a service that is separate from Facebook and will block outsiders. Speakiesy can
only be joined by using a student’s .edu email address for the campus they attend, making it an exclusive “VIP club”
that can only be joined by the students at a particular university.



During the March 2015 quarter, the Speakiesy
app was successfully beta tested in eight colleges with approximately 4,000 users. This provided useful insights ahead of the proposed
September 2015 launch. The rollout strategy will see Speakiesy being released to 60 campuses accompanied by the appointment of
a Speakiesy Campus Manager at each college. Communities within the college community, such as Greek life members (i.e. fraternities
and/or sororities) and other significant influencers, will also be appointed to promote the app and post content. This strategic
market roll-out will target highly engaged colleges before a full national rollout in the spring semester, January 2016.



II. Active Lifestyle Group



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 our intention 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. The platform has been 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.



At October 2015, the development of the
RunHaven App is in the beta phase.  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. As of June 2015, RunHaven
attracted 2.1 million unique visitors per month.



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III. Political Group



Blue Nation Review. We have entered
into an exclusive agreement with Mr. Jimmy Williams, a noted political commentator, to co-develop an App known as Blue Nation Review,
which is 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 provides
a hub for political news and conversation, and enables 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 2014, 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 2014, BNR has grown
to attract over 4.4 million unique visitors a month as of October 2015, making it one of the top political news and commentary
sites in the US. As of October 2015, the BNR Facebook page (and its sister page “Progressive America”) had over 795,000
fans combined and our content reaches more than 129 million people every week, with 47% of our fans being women.



VOYCIT. The positive growth of BNR
has led to the development of VOYCIT, the non-partisan political group and community app. VOYCIT product features and rollout strategy
have been put on hold as MOKO looks at relevant political trends that will drive the 2016 presidential election cycle as well as
allow us to focus all mobile application resources on the Fall 2015 rollout for the student vertical. We expect to revisit the
VOYCIT launch in Spring 2016. 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.



Other Businesses



Tagroom



In September 2014, we announced that we
had executed a binding term sheet to acquire an 80% controlling interest in Tagroom Pty Ltd. (http://tagroom.com). The consideration
for the deal was a combination of cash and shares in Moko, plus an option based incentive package against agreed performance targets
over 2 years. The consideration paid for the acquisition did not have a material impact on the financial position or issued capital
of MOKO. The transaction was effective as from October 1st.



The key Tagroom personnel have also agreed
to a 2-year employment and management agreement with us. Nirojan Yamunarajan, Tagroom’s chief operating officer has become
a divisional head within our senior management team.



Tagroom is our news and viral infotainment,
mobile responsive, website (tagroom.com) that targets female millennials. This demographic, ie. ages 18 to 34, currently accounts
for 66% of Tagroom users. Tagroom allows us to cross-pollinate content across different community groups, extending user engagement
and driving user metrics higher.



Tagroom monthly unique visitors increased
to 3.6 million in June 2015 from 1.1 million at January 2015, with content reaching 27 million people per month.



In January 2015, we announced, in partnership
with Pinstripe Media, that we will launch Tagroom Success to teach young adults how to make money, how to take care of their money
and how to enjoy their wealth wisely.



This new media destination will soon be
launched for Australia’s Gen Y audience aiming to be the nation’s first and foremost source of informative and inspirational
media covering topics from personal finance, savings and investment, business and entrepreneurship, through to career and lifestyle.



Our partner in Tagroom Success is Pinstripe
Media, a company that was founded by business and finance media commentator David Koch. Pinstripe Media has long been specialising
in business and finance production and publishing across various outlets from broadcast television to print and digital content.



Tagroom Success will initially launch as
a vertical within the existing Tagroom site. Tagroom Success remains in the early planning phase, as we are working on our content
strategy, launch phase and social media influencer marketing strategy.



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Deals I Love



In July 2013, MOKO acquired a 51% controlling
interest in Deals I Love (Australia) Pty Limited (“DIL”), an Australian based online, flash sales and e-commerce product
sales business. DIL sells internationally and domestically sourced merchant products to customers across the internet and mobile
interfaces through its website, www.dealsilove.com.au. The purpose of this acquisition was to build a better understanding of mobile
commerce and its possible application to the REC*IT user base. We plan to evaluate synergies based on the student data that will
be collected in the Fall 2015 semester to see how MOKO can best leverage this asset in the mobile application launches for the
Fall 2016 semester.



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.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | 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 organized groups of people that need to share content and interact
efficiently with their members on a regular basis. We then plan to commercialize these platforms with premium targeted mobile advertising.



We target large groups that satisfy several
key criteria:



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| | · | 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
| | - | --------------------------------------------------------------------------------------------------------------------



| | · | 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 representatives 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 building a critical audience mass, 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 a 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 or brokers such as Millennial Media or MoPub. 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,
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.



Our number one priority for the next twelve
months is to focus on building unique visitor numbers in each of our three core markets, through intensified marketing of existing
products and the development of new products to attract new users within these markets. As of July 31, 2015, we had 10.1 million
monthly unique visitors.



In recognition of our key priority of achieving
growth in the number of unique visitors to our products, MOKO continually assesses the ongoing contribution of each of our operations
towards this objective. Depending on the opportunities and resources available, MOKO may allocate resources away from some activities,
even at the expense of short-term revenue growth, in favor of our longer term strategic goals of developing and enhancing our unique
visitor base.



In September 2015, MOKO made a strategic
decision to focus the Company’s resources on its products aimed at the student market, REC*IT and SPEAKIESY and reduce cash
burn from the Company’s other platforms. This decision has been made on the basis that the U.S. student audience is among the
most valuable to brands and advertisers and provides huge potential for future monetization and the current state of the securities
markets which has posed some challenges to raising additional capital.



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 easily available from alternate sources.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



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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 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 a 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 intramural sports App functional.



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 will also 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 Mode 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, 2015, MOKO has three operating subsidiaries: MOKO.mobi, Inc. (“MOKO US”), Deals-I-Love
(Australia) Pty Ltd. (“DIL”) and Tagroom Pty Ltd (“Tagroom”).



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



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website, www.dealsilove.com.au in Australia. We purchased DIL
to build a better understanding of mobile commerce and its possible application to the REC*IT user base.



Tagroom is a news and entertainment service
that harnesses social, mobile and visual technologies used by contemporary consumers, (www.tagroom.com). Tagroom is 80% owned
and controlled by our company and has been allocated to the Mobile Advertising segment in Australia. The acquisition had an effective
transaction date of October 1, 2014.



Sales, Marketing and Key Customers



Our sales, marketing and business development
teams are principally based in New York, NY and are headed by our Chief Revenue Officer (“CRO”). Additionally,
in Australia, there is a sales and marketing team in relation to mobile commerce.



Our advertising and affiliate marketing
business, MOKO Performance Network, 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 partners for the REC*IT app are IML and BigTeams. Our partners for RunHaven include
Bill Reifsnyder 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.
Over 950 colleges and universities across the U.S. use IML’s website as of October 2015. 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.



In January 2015, we entered into an amended
agreement with IML. This amended agreement automatically renews for an unlimited number of additional one year terms until we elect
to terminate with the effect of providing us with exclusive rights in perpetuity, subject to us meeting the conditions of advance
payments and standard operational responsibilities. The amended agreement also changes the commercial terms from a flat license
fee to a minimum guarantee against a 10% revenue share on the net revenues from REC*IT.



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. 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.



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 commencing May 1, 2014.



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Research and Development



Our Technical and Product Development teams
perform our research and development. These teams comprise seventeen full time employees located in Perth, Western Australia. They
are led by our Chief Technical 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 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. In April 2015, we received $957,615 as a cash rebate for our 2014 fiscal 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.



C. Organizational Structure



We have been a publicly traded company
on the ASX since 2007. The organizational structure of our operating entities is set forth below:







D. Property, plant and equipment



We currently lease the following properties:





|Location                            |  | Use of Property           |  | Area       
|----------------------------------- |  | ------------------------- |  | -----------
|New York, New York                  |  | Sales & Operations        |  | 3,600 sq ft
|                                    |  |                           |  |            
|Perth, Western Australia, Australia |  | R&D and Registered Office |  | 100 sq m   
|                                    |  |                           |  |            
|Alexandria, Virginia                |  | HQ                        |  | 6,166 sq ft
|                                    |  |                           |  |            
|Sydney City, Sydney, Australia      |  | Finance & Admin           |  | 40 sq m    



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On November 7, 2014, we entered into a
three-year lease in New York City for a property to serve as our Sales & Operations center. Our advertising sales team and
affiliate marketing business MOKO Performance Network are based in New York City. They are integrated as part of the custom mobile
social advertising business development strategy.



On August 26, 2014, we entered into a three-year
lease in Alexandria, VA for a property to serve as our corporate headquarters. In addition, the Virginia office 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.



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



Government Regulation



We
are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business.
These laws and regulations may involve privacy, data security, advertising, rights of publicity, data protection, content regulation,
intellectual property, competition, protection of minors, consumer protection, taxation or other subjects. Many of these laws and
regulations are still evolving and being tested in courts and could be interpreted in ways that could harm our business. In addition,
the application and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving
industry in which we operate.



We are also subject to federal, state and
foreign laws regarding privacy and the protection of user data. Foreign data protection, privacy, consumer protection, content
regulation and other laws and regulations are often more restrictive than those in the United States. There are also a number of
legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data
protection, tracking, behavioral advertising and consumer protection that could affect us.



In recent years, other social media companies,
to resolve investigations into various incidents, have entered into settlement agreements and consent decrees with the Federal
Trade Commission that, among other things, require them to establish an information security program designed to protect non-public
consumer information and also require that they obtain periodic independent security assessments. Violation of any regulatory
orders, settlements, or consent decrees that we may be required to enter into could subject us to substantial monetary fines and
other penalties that could negatively affect our financial condition and results of operations.



For additional information, see the section
titled “Risk Factors — 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.”



Intellectual Property Rights



We protect our intellectual property through
a combination of license agreements, copyright, trade secrecy laws, and other methods of restricting disclosure and transferring
title. We developed most of our intellectual property internally by our employees and under work for hire arrangements with third
parties. We enter into confidentiality agreements with our employees, consultants, vendors, and partners. We also enter into license
agreements with third parties and generally seek to control access to and distribution of our technology, documentation, and other
proprietary information. You should be aware that the legal status of intellectual property on the internet is currently subject
to various uncertainties.



We currently have neither patents nor any
pending patent applications in either Australia or the U.S. for our current mobile services. We presently rely on copyright protection
for our various trade names including “REC*IT,” “MOKO.Chat,” and “Griffin.” We are seeking
trademark protection for certain trade names that we believe are important to our business, and we intend to seek trademark protection
in the future for new brands and products as we develop them.



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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 Social operating segment. The 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 are
in the process of pursuing 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.



During 2012, 2013 and 2014 we expanded
the reach of our platform to support intended global growth across four main business lines and revenue streams:



•Mobile Social



•Mobile Advertising



•Mobile Content; and



•Mobile Commerce.



Mobile Social — MOKO’s proprietary
mobile social networks and community and chat 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 Mobile 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 m-Buzzy, 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. As
a result, future revenues and results from Mobile Social are expected to reduce through the 2016 fiscal year and are insignificant
to our intentions.



Mobile Advertising — MOKO’s
proprietary U.S. mobile adnetwork “MOKO Performance Network” (formerly referred to as “OfferMobi”) which
was acquired in August 2012 and historically worked with other adnetworks to obtain advertising offers for performance based advertisers
seeking specific audiences for their offers and with publishers in identifying the right advertisement/offers for the audiences
they had, rather than directly with the advertisers themselves. This is commonly referred to as “rebrokering” and creates
a situation where advertisers are unaware of the locations that their ads are placed, called “blind” advertising.



MOKO Performance Network has recently been
transitioning its business strategy to work directly with advertisers. Whilst re-focusing its strategy on building direct advertiser
relationships, it is targeting specific industry sectors (or verticals) including Mobile Games, Mobile Apps, Financial Services
and Digital Publishing. Building direct relationships with advertisers allows MOKO Performance Network to provide advertisers with
direct opportunities to place ads in MOKO properties of REC*IT, RunHaven, Blue Nation Review, Speakiesy and VOYCIT.



MOKO Performance Network’s advertising
network provides advertisers reach into over 2,000 active publishers across the globe covering various demographics of end user
traffic.



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Currently, the Company has several
offers from advertisers in verticals such as Mobile Applications, Mobile Games, Mobile Utilities, Consumer Goods, Retail and
Entertainment. MOKO Performance Network has contracts with advertisers that are direct and in some cases exclusive to MOKO Performance
Network. 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.



Mobile Advertising also reflects MOKO’s
controlling interest in Tagroom Pty Ltd., a news and entertainment service that harnesses social, mobile and visual technologies
used by contemporary consumers, (www.tagroom.com).



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



Mobile
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 business was significant to the financial results in the reported periods although it ceased
in the 2013 fiscal year following a strategic review and re-focus on Customized Mobile Social Advertizing in the U.S. market. The
vast majority of the segment results are from the AMH Group which is reported as discontinued operations. In the 2013 fiscal year
minor revenues of A$368,118 form part of continuing operations for the insignificant results of ANM which MOKO has ceased operating.
This operating segment is discontinued and trailing business activity has
ceased.



Mobile 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 the six months ended December 31, 2013. Before the DIL acquisition, there was no activity in
this segment. The results from Mobile Commerce form a part of continuing operations. We have not determined when or if our Mobile
Commerce operations will become profitable.



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.



For the 2013 fiscal year, operating segment
revenues were as follows:



|                                 |  | Continuing Operations |           |  | Continued Operations |  |           | Discontinued Operations | 
|-------------------------------- |  | --------------------- | --------- |  | -------------------- |  | --------- | ----------------------- | 
|                                 |  | Mobile Social         |           |  | Mobile Advertising   |  |           | Mobile Content          | 
|Sales to external customers A$   |  |                       | 1,251,864 |  |                      |  | 4,400,611 |                         | 
|Sales to external customers USD$ |  |                       | 964,436   |  |                      |  | 3,390,231 |                         | 



For the 2014 fiscal year, operating segment
revenues were as follows:



|                                 |  | Mobile Social |         |  | Mobile Advertising |  |           | Mobile Content |  |  | Mobile Commerce |   |  | Total |          
|-------------------------------- |  | ------------- | ------- |  | ------------------ |  | --------- | -------------- |  |  | --------------- | - |  | ----- | ---------
|Sales to external customers A$   |  |               | 882,393 |  |                    |  | 3,102,132 |                |  |  | (39,945         | ) |  |       | 4,274,571
|Sales to external customers USD$ |  |               | 680,216 |  |                    |  | 2,389,882 |                |  |  | (30,774         | ) |  |       | 3,293,129



For the 2015 fiscal year, operating segment
revenues were as follows:



|                                 |  | Mobile Social |         |  | Mobile Advertising |  |           | Mobile Content |  |  | Mobile Commerce |  |  | Total |          
|-------------------------------- |  | ------------- | ------- |  | ------------------ |  | --------- | -------------- |  |  | --------------- |  |  | ----- | ---------
|Sales to external customers A$   |  |               | 723,690 |  |                    |  | 3,573,152 |                |  |  | —               |  |  |       | 1,990,291
|Sales to external customers USD$ |  |               | 557,531 |  |                    |  | 2,752,756 |                |  |  | —               |  |  |       | 1,533,320



Strategic Transition



For the fiscal years ended June 30, 2014
and 2015, 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 equity funding from within the U.S. as a result of our NASDAQ listing
in 2014. MOKO, 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 elsewhere in this annual report.



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 gained the exclusive mobile rights for intermural sport, fitness and recreational activity data for more than 700 colleges
and universities across the U.S. with a combined enrolled population of approximately 10 million students. The number of colleges
and universities has since increased to over 950, and the enrolled population of students now exceeds 11 million. 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.



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To date, MOKO has not generated significant
revenue from REC*IT. The development of the RunHaven and Blue Nation Review user base is in relatively early stages and no significant
revenues have been generated to date, nor are any anticipated until the 2016 calendar year.



It should be noted that the strategic focus
on projects such as REC*IT, RunHaven and Blue Nation Review and the recently discontinued operations reduces 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 the immediate future, the historical revenue streams within Mobile Advertising and Mobile
Commerce will continue at approximate rates to those reported for the most recent fiscal year 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 this business strategy MOKO requires funding sources in advance of accepting
additional projects.



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 subsidiaries) 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.



Accordingly, the businesses that operated
to produce revenue during fiscal 2013 that have continuing operations are MOKO Performance Network within the Mobile Advertising
segment and MOKO Chat and Share, within the Mobile Social operating segment.



MOKO also 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, and an 80% controlling interest in Tagroom. 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
while Tagroom is an infotainment channel serving millenials. MOKO purchased DIL and Tagroom to expand its market share within Australia
and to investigate the possible application to the REC*IT user base.



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 |            
|-------------------------------------------------------- |  | ----------------------------- | -----------
|                                                         |  | 2015                          |            
|                                                         |  | A$                            |            
|Statement of Profit or Loss Data                         |  |                               |            
|Loss after income tax benefit from continuing operations |  |                               | (20,294,007
|Interest expense /(income)                               |  |                               | (189,770   
|Tax expense/(benefit)                                    |  |                               | (180,261   
|Depreciation and Amortization expense                    |  |                               | 1,017,657  
|EBITDA                                                   |  |                               | (19,620,723



Results of Operations



Comparison of Twelve Months Ended June 30, 2015 to Twelve
Months Ended June 30, 2014



Revenue

|Twelve
                                         Months Ended June
                                         30, 2015 |           |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |           | Increase /
    (Decrease) |  |    | % Change  
|------------------------------------------------------------------------------------------------------------------- | --------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | --------- | ------------------------- |  | -- | ----------
|A$                                                                                                                  | 6,287,133 |  |                                                                                                                     | A$ | 8,228,151 |                           |  | A$ | (1,941,018



For 2015, revenue was represented by Mobile
Social of A$723,690 ($557,531), Mobile Advertising of A$3,573,152 ($2,752,756) and Mobile Commerce of A$1,990,291 ($1,533,320).



Mobile Social decreased its revenue to
A$723,690 ($557,531) (2014: A$882,393) given its decreasing focus within our activities and the continuation of divesting of products
and services within this operating segment during the year. Ongoing revenues are earned within this segment from our MOKO-CHAT
product in Australia.



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$1,990,291
($1,533,320) (2014: A$4,274,571). The 2015 fiscal year underperformed the 2014 year due to challenging competitive conditions and
business focus on the Mobile Advertising segment.



Mobile Advertising revenue for the 2015
fiscal year was A$3,573,152 ($2,752,756) (2014: A$3,102,132). The increase reflected a re-positioning by the Board to focus Mobile
Performance Network (MPN) as a service provider to customized mobile social advertising projects such as REC*IT, Run-Haven and
Blue Nation Review.



Ongoing revenues in this segment are expected
to be earned from the monetization of MOKO’s student products, including REC*IT and SPEAKIESY, following a strategic decision
to focus the Company’s resources on the student market. As these products are not yet commercialized there remains uncertainty
over this expectation.



The Mobile Content segment did not operate
during the year. A minor revenue adjustment of (A$30,945) ($(30,774)) was recognised in 2014 after the sale and cessation of MOKO’s
U.K. operations in the fourth quarter of 2013. There are presently no active plans to re-activate this operating segment.



Interest income



|Twelve
                                         Months Ended June
                                         30, 2015 |         |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |         | Increase
    / (Decrease) |  |    | % Change
|------------------------------------------------------------------------------------------------------------------- | ------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | ------- | ------------------------- |  | -- | --------
|A$                                                                                                                  | 189,770 |  |                                                                                                                     | A$ | 104,850 |                           |  | A$ | 84,920  



For 2015, Other Income comprises interest income of A$189,770
($146,199) (2014: A$104,850) which reflects higher average cash and cash equivalent balances held during the year.



Other Income



|Twelve
                                         Months Ended June
                                         30, 2015 |         |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |           | Increase
    / (Decrease) |  |    | % Change
|------------------------------------------------------------------------------------------------------------------- | ------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | --------- | ------------------------- |  | -- | --------
|A$                                                                                                                  | 947,845 |  |                                                                                                                     | A$ | 1,365,101 |                           |  | A$ | (417,256



For 2015, MOKO’s received a Research & Development
tax refund of A$937,845 ($722,516) from the Australian Taxation Office (2014: A$1,082,953). The comparative year also included
A$172,655 of government grant revenue for Mobile Social, A$109,493 proceeds and gain from the sale of a Mobile Social business,
mBuzzy in August 2013.



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Fair value gained on deferred contingent consideration



|Twelve
                                         Months Ended June
                                         30, 2015 |   |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |         | Increase / (Decrease) |  |    | % Change
|------------------------------------------------------------------------------------------------------------------- | - |  | ------------------------------------------------------------------------------------------------------------------- | -- | ------- | --------------------- |  | -- | --------
|A$                                                                                                                  | - |  |                                                                                                                     | A$ | 383,933 |                       |  | A$ | (383,933



The comparative year included a fair value gain on deferred
contingent consideration of A$383,933 ($295,782) which was the reversal of previously recognised deferred contingent consideration
in relation to the acquisition of the Mobile Advertising business, OfferMobi (renamed to Mobile Performance Network in 2015, “MPN”).



Expenses



|Twelve
                                         Months Ended June
                                         30, 2015 |            |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |            | Increase / (Decrease) |  |    | % Change 
|------------------------------------------------------------------------------------------------------------------- | ---------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | ---------- | --------------------- |  | -- | ---------
|A$                                                                                                                  | 27,899,016 |  |                                                                                                                     | A$ | 23,649,446 |                       |  | A$ | 4,249,570





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



Costs of providing goods and services



|Twelve
                                         Months Ended June
                                         30, 2015 |           |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |           | Increase / (Decrease) |  |    | % Change
|------------------------------------------------------------------------------------------------------------------- | --------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | --------- | --------------------- |  | -- | --------
|A$                                                                                                                  | 6,117,942 |  |                                                                                                                     | A$ | 6,536,820 |                       |  | A$ | (418,878





For 2015, costs of providing goods and services related to the
operating segments of Mobile Social of A$364,608 ($280,894) (2014: A$403,260), Mobile Content of nil (2014: (A$24,974)), Mobile
Commerce of A$1,486,057 ((2014: A$3,092,258) and Mobile Advertising of A$4,267,277 (2014: A$3,066,276). The movement in costs was
commensurate with the movement in revenues for Mobile Social, Mobile Commerce and Mobile Advertising. Mobile Content was inactive.



Selling, general and administrative expense



|Twelve
                                         Months Ended June
                                         30, 2015 |            |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |            | Increase / (Decrease) |  |    | % Change 
|------------------------------------------------------------------------------------------------------------------- | ---------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | ---------- | --------------------- |  | -- | ---------
|A$                                                                                                                  | 20,763,417 |  |                                                                                                                     | A$ | 15,888,388 |                       |  | A$ | 4,875,029



For 2015, MOKO’s selling, general and administrative expenses
increased primarily as a result of a general expansion in MOKO’s business operations within the Mobile Advertising segment
in the US. The investment in Tagroom as well as expenses related to the NASDAQ listing and share based payments expense, also contributed.



Particularly large movements in expenses for 2015 versus 2014
year were as follows:



—Marketing expenses: an increase of A$2,532,863 ($1,951,318)
or 193.5% from A$1,308,959 in 2014 to A$3,841,822 ($2,959,740) in 2015 due mostly to an increase in Mobile Advertising User acquisition
costs for the customised mobile social advertising business.



—Travel and entertainment expenses: an increase of A$353,074
($272,008) or 62.4% from A$566,259 in 2014 to A$919,333 ($708,254) in 2015 primarily because of the migration of the business to
the U.S.



—Legal and professional fees: a decrease of A$1,039,698
($800,983) or 32.3% from A$3,223,803 in 2014 to A$2,184,105 ($1,682,634) in 2015. The comparative year included various fees related
to the NASDAQ listing and corporate restructuring.



—Employee benefits expense: the largest cash component
of selling, general and administrative expense increased by A$4,881,481 ($3,760,693) or 128.6% from A$3,796,520 in 2014 to A$8,678,001
($6,685,532) in 2015 due to a large increase in average headcount as a result of the expansion in the Mobile Advertising segment
(particularly in the US).



—Share based payments: a decrease of A$3,215,703 ($2,477,378)
or 62.5% from A$5,144,968 in 2014 to A$1,929,265 ($1,486,306) in 2015, mostly due to a decrease in share based remuneration to
directors, U.S. employees and contractors.



—Product costs are A$996,986 ($768,078) in 2015 (2014:
Nil). They relate to the investment by the Consolidated Entity in the continued customization of mobile social advertising products
including REC*IT, Run-Haven and Blue Nation Review. With the move to the US and the rapid growth in products, external contractors
have been engaged to further the process. Previously this work was largely completed internally.



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Depreciation and amortisation



|Twelve
                                         Months Ended June
                                         30, 2015 |           |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |           | Increase / (Decrease) |  |    | % Change
|------------------------------------------------------------------------------------------------------------------- | --------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | --------- | --------------------- |  | -- | --------
|A$                                                                                                                  | 1,017,657 |  |                                                                                                                     | A$ | 1,224,238 |                       |  | A$ | (206,581



Depreciation decreased by A$3,706 ($2,855) from A$42,475 in
2014 to A$38,769 ($29,868) in 2015 due to decreased levels of computer equipment depreciation associated. Amortization decreased
by A$202,875 ($156,295) from prior year A$1,181,763 to A$978,888 ($754,135) due to lesser value of finite life intangible assets
relating to the “Deals I Love” and MPN acquisitions, which were fully amortised in 2014.



Income tax benefit / (expense)



|Twelve
                                         Months Ended June
                                         30, 2015 |         |  | Twelve
                                         Months Ended June
                                         30, 2014 |    |         | Increase / (Decrease)
|------------------------------------------------------------------------------------------------------------------- | ------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | ------- | ---------------------
|A$                                                                                                                  | 180,261 |  |                                                                                                                     | A$ | (29,048 | )                    



The income tax benefit included a release of A$131,074 ($100,979)
tax liability in All Night Media (MOKO’s UK subsidiary which ceased operations in 2013) and reversal previous year US tax
provisions A$49,187 ($37,894) in 2015 versus A$29,048 tax expense for US state taxes in 2014.



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, 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 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 (fiscal 2013: A$6,020,593). The loss for the fiscal 2014 year was A$13,596,459 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 (fiscal 2013: A$4,711,294).



MOKO’s net asset position at June 30, 2014 was A$11,616,698,
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       |           |  | Twelve Months Ended |    |           |                     |  |    |          
|------------------- | --------- |  | ------------------- | -- | --------- | ------------------- |  | -- | ---------
|Ended June 30, 2014 |           |  | 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, Mobile Content of (A$30,945), Mobile Advertising of A$3,102,132 and Mobile Commerce of A$4,274,571.



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Mobile Social decreased its revenue to A$882,393 (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) 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 (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
(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.



lnterest Income



|Twelve Months           |         |  | Twelve Months Ended |    |       |                         |  |    |         
|----------------------- | ------- |  | ------------------- | -- | ----- | ----------------------- |  | -- | --------
|Ended
    June 30, 2014 |         |  | June 30,
    2013   |    |       | Increase
    (Decrease) |  |    | % Change
|A$                      | 104,850 |  |                     | A$ | 8,813 |                         |  | A$ | 96,037  



For fiscal 2014, MOKO has received interest income of $104,850
(fiscal 2013: $8,813) which reflects higher average cash and cash equivalent balances held during the year.



Other income



|Twelve Months       |           |  | Twelve Months Ended |    |           |                     |  |    |         
|------------------- | --------- |  | ------------------- | -- | --------- | ------------------- |  | -- | --------
|Ended June 30, 2014 |           |  | June 30, 2013       |    |           | Increase (Decrease) |  |    | % Change
|A$                  | 1,365,101 |  |                     | A$ | 1,008,231 |                     |  | A$ | 356,870 



For fiscal 2014, Other income comprises $172,655 of
government grant revenue for Mobile Social (fiscal 2013: nil), $109,493 proceeds and gain from the sale of a Mobile
Social business, mBuzzy in August 2013 (fiscal 2013: nil), and a Research & Development tax refund $1,082,953 from the
Australian Taxation Office (2013: $1,008,231).



Fair value gained on deferred contingent consideration



|Twelve Months       |         |  | Twelve Months Ended |    |           |                     |  |    |           
|------------------- | ------- |  | ------------------- | -- | --------- | ------------------- |  | -- | ----------
|Ended June 30, 2014 |         |  | 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 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       |            |  | Twelve Months Ended |    |            |                     |  |    |           
|------------------- | ---------- |  | ------------------- | -- | ---------- | ------------------- |  | -- | ----------
|Ended June 30, 2014 |            |  | 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       |           |  | Twelve Months Ended |    |           |                     |  |    |          
|------------------- | --------- |  | ------------------- | -- | --------- | ------------------- |  | -- | ---------
|Ended June 30, 2014 |           |  | 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 (2013:A$578,571), Mobile Content of (A$24,974) (2013:A$321,046), Mobile
Commerce of A$3,092,258 (fiscal 2013: nil) and Mobile Advertising of A$3,066,276 (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       |            |  | Twelve Months Ended |    |           |                     |  |    |          
|------------------- | ---------- |  | ------------------- | -- | --------- | ------------------- |  | -- | ---------
|Ended June 30, 2014 |            |  | 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 2014 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
or 96.5% from A$1,640,327 in fiscal 2013 to A$3,223,803 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 or 1,083.5%
from A$434,743 in fiscal 2013 to A$5,144,968 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 or 308.4%
from A$320,481 in fiscal 2013 to A$1,308,959 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 (fiscal 2013: nil).



—Administration expenses: an increase of A$695,010 from
A$332,800 in fiscal 2013 to A$1,027,810 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 or 51.2% from A$2,510,446 to A$3,796,520 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           |           |  | Twelve Months Ended |    |           |                         |  |    |         
|----------------------- | --------- |  | ------------------- | -- | --------- | ----------------------- |  | -- | --------
|Ended June
    30, 2014 |           |  | 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 in fiscal 2014 to A$42,475
due to decreased levels of computer equipment depreciation associated particularly with the mBuzzy disposition. Amortization increased
by A$341,778 above the prior year to A$1,181,763 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       |   |  | Twelve Months Ended |    |           |                     |  |    |           
|------------------- | - |  | ------------------- | -- | --------- | ------------------- |  | -- | ----------
|Ended June 30, 2014 |   |  | 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       |         |  | Twelve Months Ended |    |          |                    
|------------------- | ------- |  | ------------------- | -- | -------- | -------------------
|Ended June 30, 2014 |         |  | June 30, 2013       |    |          | Increase (Decrease)
|A$                  | 180,261 |  |                     | A$ | (29,048) |                    



The income tax benefit included a release of $131,074 tax
liabilityin All Night Media (MOKO’s UK subsidiary which ceased operations in 2013) and reversal.previous year US tax provisions
$49,187 in 2015 versus $29,048 tax expense for US state taxes in 2014. 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.



Liquidity and Financial Position



MOKO’s June 30, 2015 reporting date
cash and cash equivalents (‘cash’) was A$7,219,908 ($5,562,217) (2014: $9,878,011) and the net assets were A$11,080,576
($8,536,476) (2014: $11,616,698). Working capital, (defined as current assets less current liabilities) decreased to A$5,758,246
($4,436,153) (2014: $7,523,168) and pertained largely to the decrease in balance date cash.



The operating cash outflow for the year
increased by 159% to $18,272,620 (2014: $7,067,727) reflecting the increased losses. Investing cash outflows increased by 8%
to $755,134 (2014: $699,506) due to the investments in Big Teams LLC and Tagroom Pty Ltd. The financing cash inflows
increased by 7% to $16,219,370 (2014: $15,151,403) as a result of net share issue proceeds of $16,219,370 (2014: $16,269,600)
and net debt repayment of nil (2014: $1,118,197).



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 were received on July 1, 2014 and are part of the cash, net asset or working capital figures in
2015.



On July 14, 2015, the Company filed a Form
F-3 Registration Statement with the United States Securities and Exchange Commission for a maximum aggregate public offering of
up to $40,000,000. The Form F-3 is used by foreign private issuers in the U.S. to register offerings of securities and can be utilised
in stages over three years. This provides MOKO with additional flexibility to approach the U.S. market for capital over the medium
term.



Our cash and cash equivalents at June 30,
2015 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



MOKO has made a strategic decision to focus
the Company’s resources on the student market. The results from the monetization of MOKO’s student focused products, REC*IT and
SPEAKIESY, are not yet reflected in MOKO’s operating results or cashflows. MOKO’s decision to focus on the student market
has been made on the basis that the U.S. student audience is among the most valuable to brands and advertisers and provides huge
potential for future monetization. As these products are not yet commercialized there remains uncertainty over this expectation.





In September 2015, MOKO made a strategic decision to focus the
Company’s resources on its products aimed at the student market, REC*IT and SPEAKIESY and reduce cash burn from the
Company's other platforms. This decision has been made on the basis that the U.S. student audience is among the most
valuable to brands and advertisers and provides huge potential for future monetization and the current state of the securities
markets which has posed some challenges to raising additional capital.





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, 2015
we have raised a total of A$41.7 million ($32.1 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, 2015 our consolidated cash
and cash equivalents were A$7,219,908 ($5,562,217).



We currently hold no outstanding debt.
At June 30, 2015, MOKO’s significant non-cancellable forward commitments relate only to operating lease payments, and total
A$977,711 ($753,229) which are payable as A$414,406 ($319,258) within one year and A$563,305 ($433,970) within one year and five
years.



MOKO is operating on a negative operating
cash flow basis. Net cash used in operations for the year ended June 30, 2015 was A$18,231,444 (2014: A$7,067,727). MOKO made an
operating loss of A$20,294,007 for the year ended June 30, 2015 (2014: A$13,596,459).



In order to continue as a going concern,
MOKO needs to raise additional funds. The directors acknowledge that the requirement to raise additional funding represents a
material uncertainty which may cast significant doubt over the ability of MOKO to continue as a going concern.



To initiate the capital raising process,
on July 14, 2015 MOKO filed a Form F-3 Registration Statement with the Securities and Exchange Commission for a maximum aggregate
public offering of up to US $40,000,000.



The current state of the securities
markets has posed some challenges to this capital raising process. In the light of this, the directors are pursuing a number of
funding possibilities ranging from working with brokers (both institutional and retail investors), strategic stakeholders and
major shareholders. Through one of, or a combination of these, together with a reduction in expenditure, the directors expect
that sufficient funds will be raised to continue trading with a view to reassessing MOKO’s mid-term working capital requirements
in the new calendar year.



The directors are confident that following
successful capital raising MOKO can continue to meet its debts as and when they become due and payable. MOKO’s financial
report has therefore been prepared on a going concern basis.



Should MOKO be unable to continue as
a going concern it may be required to realise its assets and discharge its liabilities other than in the normal course of business
and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should
MOKO be unable to continue as a going concern and meet its debts as and when they fall due.



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 2015,
2014 and 2013:



|                                                  |  | Year
    ended June 30 |            
|------------------------------------------------- |  | ---------------------- | -----------
|                                                  |  | 2015                   |            
|Cash flows used in operating activities           |  | A$                     | (18,231,444
|Cash (used in) / provided by investing activities |  | A$                     | (775,134   
|Cash provided by financing activities             |  | A$                     | 16,219,370 



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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 2015, operating cash outflow
for the year increased by 158% to A$18,231,444 ($14,045,504) (2014: A$7,067,727) reflecting the increased
losses.



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, 2015,
investing cash outflows increased by 5% to A$775,134 ($597,163) (2014: A$699,506) due to the investments in Big Teams LLC
and Tagroom Pty Ltd.



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 2015, the financing cash inflows
increased by 7% to A$16,219,370 ($12,495,403) (2014: A$15,151,403) as a result of net share issue proceeds of A$16,219,370 ($12,495,403)
(2014: A$16,269,600) and net debt repayment of nil (2014: A$1,118,197)



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, 2015, our contractual obligations and other commitments
were as follows:



|                |  | Payments
    due by period |        
|--------------- |  | -------------------------- | -------
|                |  |                            |        
|                |  |                            |        
|                |  | Total                      |        
|Premises leases |  | A$                         | 977,711



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 annual report 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”).



Australian Accounting
Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early
adopted by MOKO for the annual reporting period ended 30 June 2015, unless noted in the notes to our consolidated financial
statements beginning on page F-1. MOKO’s assessment of the impact of these new or amended Accounting Standards and
Interpretations, most relevant to MOKO, are set out below.



AASB 9 Financial Instruments and its consequential amendments



This standard is applicable to annual reporting
periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project
to replace IAS 39 ’Financial Instruments: Recognition and Measurement’. AASB 9 introduces new classification and
measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a
business model whose objective is to old assets in order to collect contractual cash flows, which arise on specified dates
and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value
through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on
equity instruments (that are not held-for-trading) in other comprehensive income (‘OCI’). For financial
liabilities, the standard requires the portion of the change in fair value that relates to the entity’s own credit risk
to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are
intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment
requirements will use an ‘expected credit loss’ (‘ECL’) model to recognise an allowance. Impairment
will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new
disclosures. MOKO will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be
assessed by MOKO.



AASB 15 Revenue from Contracts with Customers



This standard is applicable to annual reporting periods
beginning on or after 1 January 2017. The standard provides a single standard for revenue recognition. The core principle of the
standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard
will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations
within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of
the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct
good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance
obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the
performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation
is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations
satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised
as the performance obligation is satisfied. Contracts with customers will be presented in an entity’s statement of financial
position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity’s
performance and the customer’s payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets
recognised from the costs to obtain or fulfil a contract with a customer. MOKO will adopt this standard from
1 July 2017 but the impact of its adoption is yet to be assessed by MOKO.



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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, 2015. 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 one third of the directors
(or if their number is not divisible by three, then the number nearest to one third), other than the Managing Director, 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. Mr. Rodwell is currently our Managing Director. Provided below
is a brief description of our directors’ and executive officers’ business experience during the past five years.





|Name                |  | Age |  | Position                                     
|------------------- |  | --- |  | ---------------------------------------------
|Greg McCann         |  | 62  |  | Non-Executive Chairman                       
|                    |  |     |  |                                              
|Ian Rodwell         |  | 53  |  | Chief Executive Officer and Managing Director
|                    |  |     |  |                                              
|Jeff White          |  | 60  |  | Non-Executive Director                       
|                    |  |     |  |                                              
|Leo Hindery, Jr.    |  | 67  |  | Non-Executive Director                       
|                    |  |     |  |                                              
|Mark Hauser         |  | 57  |  | Non-Executive Director                       
|                    |  |     |  |                                              
|Emma Waldon         |  | 39  |  | Executive Director and Company Secretary     
|                    |  |     |  |                                              
|Diana Rhoten, Ph.D. |  | 48  |  | Non-Executive Director                       
|                    |  |     |  |                                              
|Shripal Shah        |  | 38  |  | Chief Operating Officer                      



Greg McCann has been our Chairman and a director since
April 2007. Since April 2007, Mr. McCann has also been the Chairman of Tel.Pacific Limited since August 2009 and was Chairman
of NBN Tasmania Limited from August 2009 until April 2014, each of which is a public company in Australia. Mr. McCann also
acts as Chairman for a number of private companies, including Executive Computing Pty Limited (an information technology
sales and services company), Total Resource Solution Pty Ltd (a recruitment company) and Consortio Pty Ltd (a contractor
management company). Mr. McCann is also on the board of the Australian law firm Lander & Rogers. He is a fellow of the
Institute of Chartered Accountants in Australia and a Fellow of the Australian Institute of Company Directors.



Ian Rodwell has been our Chief Executive Officer, Managing Director
and a director since 2008. Mr. Rodwell’s background is in corporate design and multimedia and has owned/operated several
businesses in this field. He has worked in Australia, Singapore, the U.K. and the United States, managing projects for many international
companies including McKinsey, BMW, UniLever and MTV. In the consumer digital media area, Mr. Rodwell led projects for several of
world’s biggest names in sport, including Manchester United FC, All Blacks, adidas and the Australian Football League.



Jeff White has been director of MOKO since February 2015. Mr.
White is a principal of Longreach Pty Ltd, an independent corporate advisory firm based in Sydney, Australia. Mr. White has over
thirty years of experience advising a wide range of public and private companies on mergers, acquisitions, divestments and equity
raisings. He has also advised the Australian and several State governments on major privatisations. Prior to Longreach, Mr. White
held senior positions at several large international investment banks including Baring Brothers and ABN AMRO. Mr. White is a Non-Executive
Director of the Anika Foundation, a charity that raises funds for research into youth suicide and depression. Mr White holds a
Bachelor of Commerce and a Bachelor of Laws from UNSW and is a Graduate of the Australian Institute of Company Directors.



40


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Leo Hindery, Jr. has served as one
of our directors since April 2015. Currently, he is Managing Partner of InterMedia Partners, a series of media industry
private equity funds he founded in 1988 and ran continuously until February 1997, when he was elected President and CEO of
Tele-Communications, Inc. (TCI) and Liberty Media, at the time the world’s largest combined cable television system
operator and programming entity. In March 1999 TCI merged into AT&T, and he became President and CEO of AT&T
Broadband until he resigned in November 1999. In December 1999, Mr. Hindery was elected Chairman and Chief Executive Officer
of GlobalCenter Inc., a major Internet services company, which in January 2001 merged into Exodus Communications, Inc. From
2001 until October 2004, he was Chairman and CEO of The YES Network which he founded to be the regional television home of
the New York Yankees.



In early 2005 he reconstituted InterMedia
Partners. Mr. Hindery has also served as a director on the board of Hemisphere Media Group, Inc. since April 2013. Mr. Hindery,
formerly Chairman of the National Cable Television Association (NCTA) and of C-SPAN, has been recognized as International Cable
Executive of the Year, NCTA’s Distinguished Vanguard Award Recipient for Leadership, Cable Television Operator of the Year, one
of the cable industry’s “25 Most Influential Executives Over the Past 25 Years”, one of the “30 Individuals with
the Most Significant Impact on Cable’s Early History”, and a member of the Cable Hall of Fame. Mr. Hindery is a Director
of the Paley Center for Media and a member of the Board of Visitors of the Columbia School of Journalism. He has an MBA from Stanford
University’s Graduate School of Business and was an undergraduate of Seattle University, and has received an honorary Doctor
of Humane Letters degree from Emerson College.



Mark Hauser has been a director since February 2014. He is a
Senior Managing Director of OFS Management, responsible for OFS’ SBIC fund. Mr. Hauser is also the founder and Managing Director
of Tamarix Capital, an investment firm dedicated to using flexible financing solutions to support management teams in lower-middle-market
companies, and oversees its investment activities. Prior thereto, he was a Senior Managing Director at Sandell Asset Management,
an international multi-strategy alternative asset manager, where he founded and was global head of the firm’s private equity
practice as well as a member of its investment committee. Prior to joining Sandell, he was a Managing Director at FdG Associates,
a New York-based middle-market private equity fund focused on investing in family owned businesses. Previously, he was a Managing
Director at Ocean Capital Corporation, a private international investment banking firm. Mr. Hauser has served as an officer and
on the boards of directors of various private and public portfolio companies, both in the U.S. and abroad. Mr. Hauser began his
career as a corporate attorney, practicing in New York, Sydney and 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.



Emma Waldon has been MOKO’s Company Secretary since 1st
January 2015 and a director since October 1, 2015. Ms. Waldon also holds the role of Company Secretary of Hazer Group Limited.
Ms. Waldon has over 18 years global corporate experience and has diverse financial, corporate advisory and risk management skills
from previous roles at Ernst & Young (Perth) where she qualified as a Chartered Accountant in 2000, Euroz Securities, Lloyds
Banking Group (London) and as a Director within Deloitte’s advisory services division in Perth. Ms. Waldon holds a Bachelor of
Commerce degree from the University of Western Australia majoring in accounting and finance, is a Member of the Australian Institute
of Chartered Accountants, a Fellow of the Financial Services Institute of Australasia and a Certificated Member of the Governance
Institute of Australia.



Diana
Rhoten, Ph.D. has been a director since October 1, 2015 and is an Associate Partner of IDEO’s New York office, an award-winning
global design firm focused on helping organizations innovate and grow. Ms Rhoten actively assists IDEO’s clients through
the design of new businesses, ventures, and partnerships. In addition to her role at IDEO, Ms Rhoten is also a Senior Advisor to
Purpose, experts in creating and scaling social movements powered by technology and enabled by people, and an Advisor to Kam.io,
a social networking platform for creating, mixing, and sharing digital assets. Ms Rhoten’s experience spans business, government
and philanthropy. Her previous roles include Chief Strategy Officer for Amplify Education, Founder and Director of the New Youth
City Learning Network, Founder and Managing Director of Startl, and Founder and Director of the Knowledge Institutions Program,
an initiative of the Social Science Research Council. Ms Rhoten has
been published in numerous academic journals and co-authored several manuscripts. She has a Ph.D. and an M.A. from Stanford University,
as well as a M.Ed. from Harvard University and a B.A. from Brown University. She is both a Fulbright Scholar and a Sigma Xi Distinguished
Lecturer.



Shripal Shah has been the Chief Operating Officer of MOKO
since March 2015. Mr. Shah has more than sixteen years experience in digital strategy, development and execution. He joins
MOKO after seven years as Chief Strategy Officer with the Washington Redskins, one of the top NFL professional football teams
and the third highest grossing team in the NFL behind the Dallas Cowboys and the New England Patriots. Mr. Shah reported to
Mitch Gershman, Chief Marketing Officer of the Redskins where he was tasked with maximizing the team’s strategic and
business prospects and overseeing the organization’s marketing strategy and digital and social media platforms. He
played an instrumental role in bringing various digital and social media platforms to the Redskins, resulting in a
significantly improved brand profile for the team. Prior to the Redskins, Mr. Shah was with Catalyst Public Relations, where
he was the architect of multiple award-winning digital marketing programs. This included one for Dick’s Sporting Goods
Foundation, which earned “Best Cause Related Marketing Campaign of the Year” honors at the 2012 SABRE Awards. He
also developed digital marketing strategies for Kenneth Cole, Seagram’s, Bank of New York and Morgan Stanley, among
others.



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, 2015 was A$2,020,171 ($1,556,340) and on an
individual basis in A$ is set forth in the tables below.





|            |  | SHORT-TERM |         |  | POST-EMPLOYMENT |  |   | SHARE-BASED | 
|----------- |  | ---------- | ------- |  | --------------- |  | - | ----------- | 
|            |  | Salary &   |         |  | Consultancy     |  |   |             | 
|Fiscal 2014 |  | Fees       |         |  | Fees            |  |   | Bonus       | 
|(A$’s)      |  |            |         |  |                 |  |   |             | 
|G McCann1   |  |            | 109,970 |  |                 |  | — |             | 
|P Yates     |  |            | 11,417  |  |                 |  | — |             | 
|J De Back 2 |  |            | 22,500  |  |                 |  | — |             | 
|M Hauser3   |  |            | 62,101  |  |                 |  | — |             | 
|J White     |  |            | 15,221  |  |                 |  | — |             | 
|L Hindery   |  |            | 12,879  |  |                 |  | — |             | 
|I Rodwell 4 |  |            | 388,129 |  |                 |  | — |             | 
|E Waldon    |  |            | 27,397  |  |                 |  | — |             | 
|A W Bursill |  |            | —       |  |                 |  | — |             | 
|TOTAL       |  |            | 649,614 |  |                 |  | — |             | 



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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, former 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. J
                                         De Back resigned on 13th April 2015.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 bonuses of $22,883 excluding superannuation
in June 2014 upon Rec*IT launch and $22,884 excluding superannuation in June 2014 upon NASDAQ listing. Other short term remuneration
in the year ended 30 June 2015 includes rental assistance of US$5,000 per month and payment of health related insurance.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | A W Bursill, Company Secretary until 31st January 2015,
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 $56,670 (2014: $97,793) 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, 2105, our unissued ordinary shares subject to
options totaled 67,420,000 as follows.





|Class                                            |  | Expiry Date          |  | Exercise Price |       |  | Number of
    Options | 
|------------------------------------------------ |  | -------------------- |  | -------------- | ----- |  | --------------------- | 
|Unlisted Director Options                        |  | 30-Jul-16            |  | $              | 0.042 |  |                       | 
|Unlisted 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 Options                                 |  | 28-Nov-15            |  | $              | 0.40  |  |                       | 
|Unlisted Options                                 |  | 28-Nov-15            |  | $              | 0.10  |  |                       | 
|Unlisted Director Options                        |  | 31-Jan-16            |  | $              | 0.20  |  |                       | 
|Unlisted Employee Options                        |  | 31-Dec-15            |  | US$            | 0.15  |  |                       | 
|Unlisted Employee Options                        |  | 30-Jun-16            |  | US$            | 0.17  |  |                       | 
|Unlisted Director Options                        |  | 26-Nov-17            |  | $              | 0.19  |  |                       | 
|Unlisted Director Options                        |  | 26-Nov-16            |  | $              | 0.19  |  |                       | 
|Unlisted Employee Options                        |  | 31-Jan-17            |  | $              | 0.196 |  |                       | 
|Unlisted Employee Options                        |  | 20-Dec-16            |  | $              | 0.20  |  |                       | 
|Unlisted Employee Options                        |  | 31-Dec-16            |  | $              | 0.17  |  |                       | 
|Unlisted Employee Options                        |  | 31-Dec-16            |  | $              | 0.075 |  |                       | 
|Unlisted Employee Options                        |  | 30-Jun-16            |  | US$            | 0.05  |  |                       | 
|Unlisted Employee Options                        |  | 30-Jun-16            |  | US$            | 0.075 |  |                       | 
|Unlisted Options over American Depositary Shares |  | Refer to table below |  |                |       |  |                       | 
|Total                                            |  |                      |  |                |       |  |                       | 



Options granted over American Depositary Shares (where
one ADS = 40 ordinary shares)



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|                     |  |             |  | Exercise Price |      |  |                   |  |         |                  | 
|-------------------- |  | ----------- |  | -------------- | ---- |  | ----------------- |  | ------- | ---------------- | 
|                     |  |             |  | (per ADS in    |      |  |                   |  |         |                  | 
|Class                |  | Expiry Date |  | US$)           |      |  | Number of Options |  |         | Number of Shares | 
|Unlisted ADS Options |  | 31-Dec-15   |  | $              | 4.07 |  |                   |  | 25,000  |                  | 
|Unlisted ADS Options |  | 31-Dec-16   |  | $              | 6.29 |  |                   |  | 25,000  |                  | 
|Unlisted ADS Options |  | 30-Jun-16   |  | $              | 7.50 |  |                   |  | 41,750  |                  | 
|Unlisted ADS Options |  | 30-Jun-16   |  | $              | 6.66 |  |                   |  | 2,500   |                  | 
|Unlisted ADS Options |  | 30-Jun-16   |  | $              | 7.50 |  |                   |  | 11,250  |                  | 
|Unlisted ADS Options |  | 31-Dec-15   |  | $              | 5.55 |  |                   |  | 7,500   |                  | 
|Unlisted ADS Options |  | 30-Jun-16   |  | $              | 4.00 |  |                   |  | 25,000  |                  | 
|Unlisted ADS Options |  | 3-Dec-16    |  | $              | 4.58 |  |                   |  | 7,500   |                  | 
|Unlisted ADS Options |  | 31-Jul-17   |  | $              | 4.00 |  |                   |  | 20,000  |                  | 
|Unlisted ADS Options |  | 22-Sep-17   |  | $              | 3.00 |  |                   |  | 25,000  |                  | 
|Total                |  |             |  |                |      |  |                   |  | 190,500 |                  | 



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. Jeff White, Mark Hauser and Leo Hindery,
Jr. 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.



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, Leo Hindery, Jr. (non-independent Non-Executive
Director) and Jeff White (non-independent Non-Executive Director), each of which 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 Mark Hauser (independent Non-Executive Director), Leo
Hindery, Jr. (non-independent Non-Executive Director) and Gregory McCann (Non-Executive Chairman). Each of Messrs. Hindery 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 Ms. Emma Waldon, Company Secretary MOKO Social Media Limited, Suite 5, 442-446 Beaufort Street, Highgate, Western Australia,
6003, 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, other than Mr. Hauser who we expect will receive an annual stipend
of $60,000.



|                                | Compensation           
|------------------------------- | -----------------------
|Annual Stipend                  |                        
|Director – (U.S. residents)     | $40,000 per annum      
|Director – (non U.S. residents) | A$40,000 per
    annum 
|Chairman                        | A$135,000 per
    annum



D. Employees



As of June 30, 2015, we had
67 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, |   
|------------------------------------- |  | ----------- | --
|                                      |  | 2015        |   
|Function:                             |  |             |   
|Technical and product development     |  |             | 29
|Sales, Marketing and operations       |  |             | 25
|Corporate, Finance and administration |  |             | 13
|Total:                                |  |             | 67
|Geography:                            |  |             |   
|Australia                             |  |             | 29
|United States of America              |  |             | 38
|United Kingdom                        |  |             | 67
|Total:                                |  |             |   



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, 2015 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 5, Level 1, 442-446 Beaufort Street, HIGHGATE West Australia, 6003, Australia.



|                                                                |  | Beneficial                     |             |     | Percentage of | 
|--------------------------------------------------------------- |  | ------------------------------ | ----------- | --- | ------------- | 
|                                                                |  | Ownership                      |             |     | Class         | 
|Name
    of Beneficial Owner                                    |  | of
    our Ordinary Shares (1) |             |     | (1)           | 
|Greg McCann                                                     |  |                                | 25,944,444  | (2) |               | 
|                                                                |  |                                |             |     |               | 
|Ian Rodwell                                                     |  |                                | 16,032,917  | (3) |               | 
|                                                                |  |                                |             |     |               | 
|Jeff White                                                      |  |                                | 580,000     |     |               | 
|                                                                |  |                                |             |     |               | 
|Leo Hindery, Jr.                                                |  |                                | 2,638,500   |     |               | 
|                                                                |  |                                |             |     |               | 
|Mark Hauser                                                     |  |                                | 9,910,000   | (4) |               | 
|                                                                |  |                                |             |     |               | 
|Emma Waldon                                                     |  |                                | 800,000     |     |               | 
|                                                                |  |                                |             |     |               | 
|Diana Rhoten, Ph.D.                                             |  |                                | -           |     |               | 
|                                                                |  |                                |             |     |               | 
|Shripal Shah                                                    |  |                                | -           |     |               | 
|                                                                |  |                                |             |     |               | 
|All directors and executive officers as a group
    (8 persons) |  |                                | 55,905,861  |     |               | 
|                                                                |  |                                |             |     |               | 
|Trevor Douglas Nairn                                            |  |                                | 114,528,662 |     |               | 
|                                                                |  |                                |             |     |               | 
|Peter Yates                                                     |  |                                | 50,163,402  |     |               | 








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

| | (1) | On September 30, 2015, MOKO’s ordinary
                                         shares on issue total 58,214,171 and ordinary shares issuable upon the exercise
                                         of outstanding options are 67,420,000.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes 10,000,000 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 10,000,000 ordinary shares issuable
                                         upon the exercise of outstanding options. Does not include 7,500,000 ordinary shares
                                         issuable upon the exercise of outstanding options as the vesting event has not been met.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes 5,000,000 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, former Company secretary,
is also an associate of Franks & Associates Pty Ltd, who provided accounting and secretarial services to MOKO. The contract
between MOKO and Franks & Associates was based on standard commercial terms. The Company paid an aggregate of A$56,670
to Franks & Associates in fiscal 2015.



Greg McCann, non-executive Chairman,
is an associate of Consortio Pty Limited (“Consortio”) who leases office space in Sydney to MOKO. The lease agreement between
MOKO and Consortio is based on normal commercial terms. A total of A$20,047 ($15,444) (2014: A$13,368) was received by Consortio
in relation to this agreement for the year ended June 30, 2015.



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$0.10 each on or before November
28, 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 A$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. On April 9, 2015, the letter of support was revoked,
a A$50,000 loan from Mr. De Back to DIL was written-off and 2 million options were forfeited with Mr. De Back’s 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 2015, 2014 and 2013 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



We have instituted legal proceedings against
one supplier regarding an account payable over which there is a disagreement. While we do not expect the resolution of this dispute
to have a significant effect on our financial position or profitability, there can be no assurance that we will prevail in these
proceedings, and we may be required to pay damages to such supplier, which would adversely affect our financial
position.



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, 2015 on NASDAQ was $3.10 per ADS.



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           |  |      | High |  |  | Low  | 
|------------------ |  | -------------- | ---- |  | ------------- |  | ---- | ---- |  |  | ---- | 
|Year Ended         |  | (A$ per share) |      |  | (US$ per ADS) | 
|June 30, 2011      |  |                | 0.09 |  |               |  | 0.04 |      |  |  |      | 
|June 30, 2012      |  |                | 0.05 |  |               |  | 0.02 |      |  |  |      | 
|June 30, 2013      |  |                | 0.05 |  |               |  | 0.02 |      |  |  |      | 
|June 30, 2014      |  |                | 0.33 |  |               |  | 0.04 |      |  |  |      | 
|June 30, 2015      |  |                | 0.20 |  |               |  | 0.11 |      |  |  | 7.79 | 
|Quarter Ended      |  |                |      |  |               |  |      |      |  |  |      | 
|September 30, 2013 |  |                | 0.14 |  |               |  | 0.04 |      |  |  |      | 
|December 31, 2013  |  |                | 0.33 |  |               |  | 0.12 |      |  |  |      | 
|March 31, 2014     |  |                | 0.33 |  |               |  | 0.20 |      |  |  |      | 
|June 30, 2014      |  |                | 0.27 |  |               |  | 0.14 |      |  |  | 7.70 | 
|September 30, 2014 |  |                | 0.20 |  |               |  | 0.15 |      |  |  | 7.79 | 
|December 31, 2014  |  |                | 0.17 |  |               |  | 0.13 |      |  |  | 6.05 | 
|March 31, 2015     |  |                | 0.17 |  |               |  | 0.14 |      |  |  | 5.80 | 
|June 30, 2015      |  |                | 0.18 |  |               |  | 0.11 |      |  |  | 5.94 | 
|Month Ended        |  |                |      |  |               |  |      |      |  |  |      | 
|January 2015       |  |                | 0.17 |  |               |  | 0.15 |      |  |  | 5.80 | 
|February 2015      |  |                | 0.17 |  |               |  | 0.14 |      |  |  | 5.30 | 
|March 2015         |  |                | 0.16 |  |               |  | 0.14 |      |  |  | 4.80 | 
|April 2015         |  |                | 0.18 |  |               |  | 0.14 |      |  |  | 5.94 | 
|May 2015           |  |                | 0.17 |  |               |  | 0.14 |      |  |  | 5.40 | 
|June 2015          |  |                | 0.14 |  |               |  | 0.11 |      |  |  | 4.25 | 
|July 2015          |  |                | 0.13 |  |               |  | 0.10 |      |  |  | 3.85 | 
|August 2015        |  |                | 0.13 |  |               |  | 0.12 |      |  |  | 3.70 | 
|September 2015     |  |                | 0.12 |  |               |  | 0.10 |      |  |  | 3.44 | 





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Status of Outstanding Ordinary
Shares.As of September 30, 2015, we had a total of 755,486,679 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, 2015, we had 3,767 holders of record of the ordinary shares, of which 8
had registered addresses in the U.S. and held a total of 13,924,980 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
60,038,846 ordinary shares as of September 30, 2015. 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 9.8% 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.



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,
2015, 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



Amended and Restated License and
Services Agreement between IMLeagues LLC and the Registrant dated January 26, 2015



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



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Clarification Agreement dated as of April 30, 2014



Share Purchase Agreement (Series B-2) dated April 24, 2015 between
Big Teams LLC and the Registrant



License and Services Agreement dated April 24, 2015 between
Big Teams LLC and the Registrant



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.



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 that represent those
underlying ordinary shares, 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 resident 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. A non-Australian
resident shareholder will not be subject to Australian capital gains tax on the capital gain made on a disposal of our ADSs or
ordinary shares, unless it, together with associates, holds 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 non-Australian 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 non-Australian resident individuals
                                         that arise after May 8, 2013.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Non-Australian 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



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shareholders may have the gains or losses made on
the sale or other disposal of the shares or ADSs included in their assessable income  under the ordinary income tax
provisions of the income tax law, if the gains or losses are sourced in Australia.



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 their
associate, 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
| | - | ----------------------------------------------------------------------------------------------------------------------



| | · | 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



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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.



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.



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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 in the United States, 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.



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 applicable 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 composition (and estimated
values) of the assets and the nature of the income of us and our subsidiaries for our taxable year ended June 30, 2015,
we do not expect to be treated as a PFIC for such taxable year. However, because we have not performed a definitive
analysis as to our PFIC status for our 2015 fiscal year, there can be no assurance with respect to our status as a PFIC
for such 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 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 generally
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 if we are treated as a PFIC for that taxable year. 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 generally 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.



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 (or was deemed to hold) 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 the U.S. Holder would otherwise recognize if the
U.S. Holder had 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.



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Alternatively, if a U.S. Holder, at the
close of its taxable year, owns (or is deemed to own) 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 as long as such ADSs or ordinary
shares continue to be treated as marketable stock. 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 in a taxable year in which we are treated as a PFIC will be treated as ordinary income.
Special tax rules may also apply if a U.S. Holder makes a mark-to-market election for a taxable year after the first taxable
year 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.



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.



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;
| | - | ------------------------------------------------------------



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| | · | 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.



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, 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 in Australia, 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



MOKO’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. MOKO 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.
Please see note 2 to our audited consolidated financial statements for further information with respect to certain of these risks.



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)                                                                                                                                      |  | •      Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property                                       
|                                                                                                                                                                                           |  | •      Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates                                               
|$0.05 (or less) per ADS                                                                                                                                                                    |  | •      Any cash distribution to ADS holders                                                                                                            
|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                                  |  | •      Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders                
|                                                                                                                                                                                           |  |                                                                                                                                                        
|$0.05 (or less) per ADSs per calendar year                                                                                                                                                 |  | •      Depositary services                                                                                                                             
|Registration or transfer fees                                                                                                                                                              |  | •      Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
|Expenses of the depositary                                                                                                                                                                 |  | •      Cable, telex and facsimile transmissions (when expressly provided in the Deposit Agreement)                                                     
|                                                                                                                                                                                           |  | •      Converting foreign currency to U.S. dollars                                                                                                     
|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 |  | •      As necessary                                                                                                                                    
|Any charges incurred by the depositary or its agents for servicing the deposited securities                                                                                                |  | •      As necessary                                                                                                                                    



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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.



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, 2015,
we used the net proceeds of $6,272,500. $81,598 for capital expenditures, $67,781 for investment costs, $6,123,121 for working capital, and $332,100
for payments to Directors and Company Secretary.



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 fiscal year ended June
30, 2015. 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, 2015 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



Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with IFRS
and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of a company’s assets; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting
principles, and that a company’s receipts and expenditures are being made only in accordance with authorizations of a company’s
management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of a company’s assets that could have a material effect on the consolidated financial statements.



Because of its inherent limitations, a
system of internal control over financial reporting can provide only reasonable assurance with respect to consolidated financial
statements preparation and presentation and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



As required by Section 404 of the Sarbanes-Oxley
Act of 2002 and related rules as promulgated by the SEC, our management assessed the effectiveness of the our internal control
over the financial reporting as of June 30, 2015, using criteria established in Internal Control - Integrated Framework (1992)
issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment using those criteria,
our management concluded that our internal control over financial reporting was effective as of June 30, 2015.



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(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, 2015 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.



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, 2015 and 2014 by BDO East Coast Partnership and other BOD international
offices, the Company’s principal accounting firm.



|Accountant
    Fees and Services |  | 2015 |         |  | 2014 |   
|-------------------------------- |  | ---- | ------- |  | ---- | --
|Audit Fees                       |  | A$   | 335,715 |  |      | A$
|Audit Related Fees (F1 review)   |  | A$   | 23,614  |  |      | A$
|Tax Fees                         |  | A$   | -       |  |      | A$
|All Other Fees                   |  |      | -       |  |      |   
|                                 |  | A$   | 359,329 |  |      | A$



Audit Fees



The audit fees for
the years ended June 30, 2015 and 2014, respectively, were paid for professional services rendered for the audits of our consolidated
financial statements, half year reviews, consents, and assistance with review of documents filed with the SEC.



Tax Fees



Tax fees for the year ended June 30, 2014 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.



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.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



59


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| | · | 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.



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†            |  | Amended and Restated License and Services Agreement between
    IMLeagues LLC and the Registrant dated January 26, 2015                                                  
|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                                                                                                                       
|4.9             |  | Share Purchase Agreement (Series B-2) dated April 24, 2015 between Big Teams LLC and the Registrant                                                                      
|4.10            |  | Amendment to Share Purchase Agreement (Series B-2) dated August 19, 2015 between Big Teams LLC and the Registrant                                                        
|4.11†           |  | License and Services Agreement dated April 24, 2015 between Big Teams LLC and the Registrant                                                                             
|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 ExchangeAct, 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
|15.1            |  | Consent of BDO East Coast Partnership to incorporation by reference in the registration statement on Form F-3 of the
    Registrant (File No. 333-205656).               



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



†  Confidential treatment has been requested with respect to portions of this exhibit.



60


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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                                              | 
|Name: Ian Rodwell                                            | Name: Greg McCann                                            | 
|Title: Chief Executive Officer (Principal Executive Officer) | Title: Chairman (Principal Financial and Accounting Officer)
|Date: October 30, 2015                                       | Date: October 30, 2015                                       | 
|                                                             |                                                              | 



61


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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-51





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, 2014 and 2015, 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, 2015, 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, 2014 and 2015, and the results of their operations and their cash flows for three years ended
June 30, 2015, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board.



Emphasis of matter



Without modifying our opinion, we draw
attention to Note 1 in the financial report, which indicates that the ability of the consolidated entity to continue as a going
concern is dependent upon the future successful raising of necessary funding through equity. These conditions, along with other
matters as set out in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated
entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets
and discharge its liabilities in the normal course of business.



/s/ BDO

BDO EAST COAST PARTNERSHIP

Sydney, Australia

30 October 2015



F-2


Table of Contents




CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME





|                                                                       |  |      |    |  | Consolidated | 
|---------------------------------------------------------------------- |  | ---- | -- |  | ------------ | 
|                                                                       |  | Note |    |  | 2015         | 
|                                                                       |  |      |    |  | $            | 
|Revenue from continuing operations                                     |  |      | 5  |  |              | 
|Interest income                                                        |  |      | 5  |  |              | 
|Other Income and revenue                                               |  |      | 5  |  |              | 
|Fair value gain on deferred consideration                              |  |      | 5  |  |              | 
|Expenses                                                               |  |      |    |  |              | 
|Cost of providing goods and services                                   |  |      |    |  |              | 
|Computer expenses                                                      |  |      |    |  |              | 
|Marketing expenses                                                     |  |      |    |  |              | 
|Travel and entertainment expenses                                      |  |      |    |  |              | 
|Occupancy expenses                                                     |  |      |    |  |              | 
|Administration expenses                                                |  |      |    |  |              | 
|Exchange loss                                                          |  |      |    |  |              | 
|Finance costs                                                          |  |      |    |  |              | 
|Legal and professional fees                                            |  |      |    |  |              | 
|Employee benefits expenses                                             |  |      | 6  |  |              | 
|Share based payments                                                   |  |      | 6  |  |              | 
|Depreciation and amortisation                                          |  |      | 6  |  |              | 
|Other expenses                                                         |  |      | 6  |  |              | 
|Impairment of goodwill                                                 |  |      |    |  |              | 
|Product costs                                                          |  |      |    |  |              | 
|                                                                       |  |      |    |  |              | 
|Loss before income tax                                                 |  |      |    |  |              | 
|Income tax benefit/(expense)                                           |  |      | 7  |  |              | 
|Profit/(Loss) after income tax from continuing operations              |  |      |    |  |              | 
|Profit/(Loss) after income tax from discontinued operations            |  |      | 32 |  |              | 
|                                                                       |  |      |    |  |              | 
|Loss after income tax for the year                                     |  |      |    |  |              | 
|Other comprehensive income for the year, net of tax                    |  |      |    |  |              | 
|Items that may be reclassified subsequently to profit or loss          |  |      |    |  |              | 
|Exchange differences on translation of foreign operations              |  |      |    |  |              | 
|Total comprehensive loss for the year                                  |  |      |    |  |              | 
|                                                                       |  |      |    |  |              | 
|Total comprehensive loss for the year is attributable to:              |  |      |    |  |              | 
|Continuing operations                                                  |  |      |    |  |              | 
|Discontinued operations                                                |  |      |    |  |              | 
|Total comprehensive loss for the year                                  |  |      |    |  |              | 
|                                                                       |  |      |    |  |              | 
|Loss attributable to:                                                  |  |      |    |  |              | 
|Owners of the Company                                                  |  |      |    |  |              | 
|Non-controlling interests                                              |  |      |    |  |              | 
|                                                                       |  |      |    |  |              | 
|Total comprehensive loss for the
    year, net of tax attributable to: |  |      |    |  |              | 
|Owners of the Company                                                  |  |      |    |  |              | 
|Non-controlling interests                                              |  |      |    |  |              | 
|                                                                       |  |      |    |  |              | 



F-3


Table of Contents




CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME



|                                                                                                           |  |        |  | Consolidated |      
|---------------------------------------------------------------------------------------------------------- |  | ------ |  | ------------ | -----
|                                                                                                           |  | Note   |  | 2015         |      
|                                                                                                           |  |        |  | $            |      
|Earnings per share from continuing operations attributable to the
    owner of MOKO Social Media Limited   |  |        |  |              |      
|Basic
    / Diluted EPS (Cents per share)                                                                  |  | 26 (b) |  |              | (3.28
|                                                                                                           |  |        |  |              |      
|Earnings
    per share from discontinued operations attributable to the owner of MOKO Social Media Limited |  |        |  |              |      
|Basic / Diluted EPS (Cents per share)                                                                      |  | 26 (c) |  |              | -    
|                                                                                                           |  |        |  |              |      
|Earnings per share for loss
    attributable to the owner of MOKO Social Media Limited                     |  |        |  |              |      
|Basic / Diluted EPS (Cents per share)                                                                      |  | 26 (d) |  |              | (3.28



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



F-4


Table of Contents




CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



|                                    |  |      |  | Consolidated |            
|----------------------------------- |  | ---- |  | ------------ | -----------
|                                    |  | Note |  | 2015         |            
|                                    |  |      |  | $            |            
|Current assets                      |  |      |  |              |            
|                                    |  |      |  |              |            
|Cash and cash equivalents           |  | 8    |  |              | 7,219,908  
|Trade and other receivables         |  | 9    |  |              | 501,472    
|Other current assets                |  | 10   |  |              | 1,017,204  
|Total current assets                |  |      |  |              | 8,738,584  
|                                    |  |      |  |              |            
|Non-current assets                  |  |      |  |              |            
|Property, plant and equipment       |  | 11   |  |              | 255,961    
|Intangibles                         |  | 12   |  |              | 3,814,088  
|Available-for-sale financial assets |  | 13   |  |              | 1,297,811  
|Deferred tax asset                  |  | 7    |  |              | -          
|Total non-current assets            |  |      |  |              | 5,367,860  
|Total assets                        |  |      |  |              | 14,106,444 
|                                    |  |      |  |              |            
|Current liabilities                 |  |      |  |              |            
|Trade and other payables            |  | 15   |  |              | 2,569,262  
|Employee benefits                   |  | 16   |  |              | 411,076    
|Income tax provision                |  |      |  |              | -          
|Total current liabilities           |  |      |  |              | 2,980,338  
|                                    |  |      |  |              |            
|Non-current liabilities             |  |      |  |              |            
|Employee benefits                   |  | 16   |  |              | 45,530     
|Total non-current liabilities       |  |      |  |              | 45,530     
|Total liabilities                   |  |      |  |              | 3,025,868  
|                                    |  |      |  |              |            
|Net assets                          |  |      |  |              | 11,080,576 
|                                    |  |      |  |              |            
|Issued capital                      |  | 17   |  |              | 58,214,371 
|Reserves                            |  | 18   |  |              | 12,213,980 
|Accumulated losses                  |  | 19   |  |              | (58,942,958
|Non-controlling interest            |  |      |  |              | (404,817   
|Total equity                        |  |      |  |              | 11,080,576 



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



F-5


Table of Contents




CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



|Consolidated                                                       |  | Issuedcapital |            |   | Foreigncurrencytranslationreserve |  |           | Optionreserves |  |  | Accumulatedlosses |  |  | Non-controllinginterest |             |   | Total | 
|------------------------------------------------------------------ |  | ------------- | ---------- | - | --------------------------------- |  | --------- | -------------- |  |  | ----------------- |  |  | ----------------------- | ----------- | - | ----- | 
|                                                                   |  | $             |            |   | $                                 |  |           | $              |  |  | $                 |  |  | $                       |             |   | $     | 
|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 ordinary shares on exercise of options                    |  |               | 3,582,461  |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares on capital raising                        |  |               | 14,161,910 |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares to consultants                            |  |               | 160,000    |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares as consideration for business combination |  |               | 602,365    |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares in settlement of loans from directors     |  |               | 200,000    |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of performance shares to employees                           |  |               | 200        |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|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 | ) |       | 
|Loss after income tax expense for the period                       |  |               | -          |   |                                   |  | -         |                |  |  | -                 |  |  |                         | (20,013,288 | ) |       | 
|Other comprehensive income for the year, net of tax                |  |               | -          |   |                                   |  | 1,397,333 |                |  |  | -                 |  |  |                         | -           |   |       | 
|Total comprehensive loss for the year, net of tax                  |  |               | -          |   |                                   |  | 1,397,333 |                |  |  | -                 |  |  |                         | (20,013,288 | ) |       | 
|Transactions with owners in their capacity as owners               |  |               |            |   |                                   |  |           |                |  |  |                   |  |  |                         |             |   |       | 
|Issue of ordinary shares on exercise of options                    |  |               | 7,800,973  |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares on capital raising                        |  |               | 8,762,325  |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares to consultants                            |  |               | 300,000    |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares to employees                              |  |               | 115,324    |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Issue of ordinary shares as consideration for business combination |  |               | 200,000    |   |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Capital raising costs                                              |  |               | (643,913   | ) |                                   |  | -         |                |  |  | -                 |  |  |                         | -           |   |       | 
|Share based payments – Options                                     |  |               | -          |   |                                   |  | -         |                |  |  | 1,825,843         |  |  |                         | -           |   |       | 
|Balance at 30 June 2015                                            |  |               | 58,214,371 |   |                                   |  | 1,967,505 |                |  |  | 10,246,475        |  |  |                         | (58,942,958 | ) |       | 



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



F-6


Table of Contents






CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                          |  |      |  | Consolidated |            
|--------------------------------------------------------- |  | ---- |  | ------------ | -----------
|                                                          |  | Note |  | 2015         |            
|                                                          |  |      |  | $            |            
|                                                          |  |      |  |              |            
|Cash flows from operating activities                      |  |      |  |              |            
|Receipts from customers                                   |  |      |  |              | 6,930,339  
|R&D tax offset received                                   |  |      |  |              | 947,845    
|Export market development grant received                  |  |      |  |              | -          
|Payments to suppliers and employees                       |  |      |  |              | (26,241,545
|Interest received                                         |  |      |  |              | 232,058    
|Interest and other finance costs paid                     |  |      |  |              | (26,119    
|Income taxes paid                                         |  |      |  |              | (74,022    
|Net cash used in operating activities                     |  | 21   |  |              | (18,231,444
|                                                          |  |      |  |              |            
|Proceeds from sale of business                            |  |      |  |              | -          
|Payment for acquisition of business, net of cash acquired |  | 14   |  |              | (175,115   
|Payment for investment                                    |  | 13   |  |              | (256,813   
|Payment for property, plant and equipment                 |  |      |  |              | (210,811   
|Payment for intangibles                                   |  |      |  |              | (132,395   
|Payments for disposal of subsidiary                       |  |      |  |              | -          
|Net cash used in investing activities                     |  |      |  |              | (775,134   
|Cash flows from financing activities                      |  |      |  |              |            
|Proceeds from issuance of shares                          |  |      |  |              | 16,860,777 
|Share issue transaction cost                              |  |      |  |              | (641,407   
|Proceeds from borrowings                                  |  |      |  |              | -          
|Repayment of borrowings                                   |  |      |  |              | -          
|Net cash provided by financing activities                 |  |      |  |              | 16,219,370 
|                                                          |  |      |  |              |            
|Net increase in cash held                                 |  |      |  |              | (2,787,208 
|                                                          |  |      |  |              |            
|Cash and cash equivalents at beginning of the year        |  |      |  |              | 9,878,011  
|                                                          |  |      |  |              |            
|Effects of exchange rate changes on cash                  |  |      |  |              | 129,105    
|                                                          |  |      |  |              |            
|Cash and cash equivalents at end of the year              |  | 8    |  |              | 7,219,908  



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 2015



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 2015 (‘fiscal
2015’ or ’2015’) 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 2015.



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.



Going concern



The Consolidated Entity is operating on a negative operating
cash flow basis. Net cash used in operations for the year ended 30 June 2015 was $18,231,444 (2014: $7,067,727). The Consolidated
Entity made an operating loss of $20,294,007 for the year ended 30 June 2015 (2014: $13,596,459).



In order to continue as a going concern, the Consolidated Entity
needs to raise additional funds. The directors acknowledge that the requirement to raise additional funding represents a material
uncertainty which may cast significant doubt over the ability of the Consolidated Entity to continue as a going concern.



To initiate the capital raising process, on 14 July 2015 the
Consolidated Entity filed a Form F-3 Registration Statement with the Securities Exchange Commission for a maximum aggregate public
offering of up to US $40,000,000.



The current state of the securities markets has posed some challenges
to this capital raising process. In the light of this, the directors are pursuing a number of funding possibilities ranging from
working with brokers (both institutional and retail investors), strategic stakeholders and major shareholders. Through one of,
or a combination of these, together with a reduction in expenditure, the directors expect that sufficient funds will be raised
to continue trading with a view to reassessing the consolidated Entity’s mid-term working capital requirements in the new
calendar year.



The Directors are confident that following successful capital
raising the Consolidated Entity can continue to meet its debts as and when they become due and payable. The financial report has
therefore been prepared on a going concern basis.



Should the Consolidated Entity be unable to continue as a going
concern it may be required to realise its assets and discharge its liabilities other than in the normal course of business and
at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Consolidated
Entity be unable to continue as a going concern and meet its debts as and when they fall due.



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, revised or amending Accounting Standards and
Interpretations adopted



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.



F-8


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 1: Significant accounting policies (continued)





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 2014-1 Amendments to Australian Accounting Standards
(Parts A to C)



The Consolidated Entity has applied Parts A to C of AASB 2014-1
from 1 July 2014. These amendments affect the following standards: AASB 2 ‘Share-based Payment’: clarifies the definition
of ‘vesting condition’ by separately defining a ‘performance condition’ and a ’service condition’
and amends the definition of ‘market condition’; AASB 3 ‘Business Combinations’: clarifies that contingent
consideration in a business combination is subsequently measured at fair value with changes in fair value recognised in profit
or loss irrespective of whether the contingent consideration is within the scope of AASB 9; AASB 8 ‘Operating Segments’:
amended to require disclosures of judgements made in applying the aggregation criteria and clarifies that a reconciliation of
the total reportable segment assets to the entity’s assets is required only if segment assets are reported regularly to
the chief operating decision maker; AASB 13 ‘Fair Value Measurement’: clarifies that the portfolio exemption applies
to the valuation of contracts within the scope of AASB 9 and AASB 139; AASB 116 ‘Property, Plant and Equipment’ and
AASB 138 ‘Intangible Assets’: clarifies that on revaluation, restatement of accumulated depreciation will not necessarily
be in the same proportion to the change in the gross carrying value of the asset; AASB 124 ‘Related Party Disclosures’:
extends the definition of ‘related party’ to include a management entity that provides KMP services to the entity
or its parent and requires disclosure of the fees paid to the management entity; AASB 140 ‘Investment Property’: clarifies
that the acquisition of an investment property may constitute a business combination.



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 24.



Principles of consolidation



The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of MOKO Social Media Limited as at 30 June 2015 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-9


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



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)
|MOKO Door Foundation |  | United States Dollars (USD)



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.



Foreign operations



The assets and liabilities of foreign operations are translated
into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated
into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the
period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve
in equity.



The foreign currency reserve is recognised in profit or loss
when the foreign operation or net investment is disposed of.



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.



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.



The Mobile Social segment 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, and provide the MOKO social chat platform.
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”.



F-10


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 1: Significant accounting policies (continued)



The Mobile Advertising segment is MOKO’s proprietary U.S.
mobile performance advertising network, historically has primarily consisted of working with performance based advertisers seeking
specific audiences for offers and with publishers to identify optimal advertisements or offers for their audiences. Where applicable,
the Company records its revenue from this line of business on a gross basis. All other revenue in the Mobile Advertising unit is
recorded net.



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 received 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.



F-11


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



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                 
|------------------------ |  | --------------------------------------
|Computer
equipment       |  | 371⁄2% - 60%                            
|Furniture and fittings   |  | 111⁄2% - 30%                            
|Leasehold improvements   |  | Shorter of lease term or 20% per annum



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-12


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



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 business combinations and 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)
|------------------------------------- |  | -------------------------
|Computer software                     |  | 50% per annum            
|Customer contracts                    |  | 50% per annum            
|Capitalised product development costs |  | 50% per annum            
|Intellectual Property                 |  | 20% - 50% per annum      
|Customer Database                     |  | 100% 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
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



Computer software



Computer software costs associated with software are deferred
and 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.



Capitalised product development cost



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.



Intellectual Property



Intellectual property acquired in a business combination are
amortised on a straight line basis over the period of their expected benefit.



Customer database



Customer databases 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-13


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 1: Significant accounting policies (continued)



Investments and other financial assets



Investments and other financial assets are initially measured
at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through
profit or loss. They are subsequently measured at either amortised cost or fair value depending on their classification. Classification
is determined based on the purpose of the acquisition and subsequent reclassification to other categories is restricted.



Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially
all the risks and rewards of ownership.



Available-for-sale financial assets



Available-for-sale financial assets are non-derivative financial
assets, principally equity securities, that are either designated as available-for-sale or not classified as any other category.
After initial recognition, fair value movements are recognised in other comprehensive income through the available-for-sale reserve
in equity. Cumulative gain or loss previously reported in the available-for-sale reserve is recognised in profit or loss when the
asset is derecognised or impaired.



Impairment of financial assets



The consolidated entity assesses at the end of each reporting
period whether there is any objective evidence that a financial asset or group of financial assets is impaired. Objective evidence
includes significant financial difficulty of the issuer or obligor; a breach of contract such as default or delinquency in payments;
or observable data indicating that there is a measurable decrease in estimated future cash flows.



The amount of the impairment allowance for financial assets
carried at cost is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted
at the current market rate of return for similar financial assets.



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.



Employee benefits



Short-term employee benefits



Liabilities for wages and salaries, including non-monetary benefits,
annual leave and long service leave expected to be settled within 12 months of the reporting date are measured at the amounts expected
to be paid when the liabilities are settled.



Other long-term employee benefits



The liability for annual leave and long service leave not expected
to be settled within 12 months of the reporting date are measured as the present value of expected future payments to be made in
respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.



Defined contribution superannuation expense



Contributions to defined contribution superannuation plans are
expensed in the period in which they are incurred.



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.



F-14


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 1: Significant accounting policies (continued)



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.



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.



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.



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 2015, 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 is applicable to annual reporting periods beginning
on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 ’Financial
Instruments: Recognition and Measurement’. AASB 9 introduces new classification and measurement models for financial assets. A
financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in



F-15


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 1: Significant accounting policies (continued)



order to collect contractual cash flows, which arise on specified
dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value
through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity
instruments (that are not held-for-trading) in other comprehensive income (‘OCI’). For financial liabilities, the standard requires
the portion of the change in fair value that relates to the entity’s own credit risk to be presented in OCI (unless it would create
an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment
with the risk management activities of the entity. New impairment requirements will use an ‘expected credit loss’ (‘ECL’) model
to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument
has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces
additional new disclosures. The Consolidated Entity will adopt this standard from 1 July 2018 but the impact of its adoption is
yet to be assessed by the Consolidated Entity.



AASB 15 Revenue from Contracts with Customers



This standard is applicable to annual reporting periods beginning
on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the
standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard
will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations
within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of
the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct
good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance
obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the
performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation
is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations
satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised
as the performance obligation is satisfied. Contracts with customers will be presented in an entity’s statement of financial
position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity’s
performance and the customer’s payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets
recognised from the costs to obtain or fulfil a contract with a customer. The Consolidated Entity will adopt this standard from
1 July 2018 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 2015



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 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 Foreign exchange movement, the Consolidated
Entity has set up foreign currency bank accounts, by depositing surplus foreign currency in a foreign currency account for later
use.



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 | 
|--------------------- |  | ------ | --------- |  | ----------- | 
|                      |  | 2015   |           |  | 2014        | 
|                      |  | $      |           |  | $           | 
|Consolidated          |  |        |           |  |             | 
|United States dollars |  |        | 6,574,718 |  |             | 
|Great British pounds  |  |        | 6,693     |  |             | 
|                      |  |        | 6,581,411 |  |             | 



Sensitivity analysis



The Consolidated Entity had net assets denominated in foreign
currencies of $4,325,025 as at 30 June 2015 (2014 net assets: of $2,696,318). Based on this exposure, had the Australian dollar
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 $435,203 higher/$217,601 lower (2014: $269,632 higher/$134,816 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 gain for the year ended 30 June 2015 was $49,170 (2014 foreign exchange loss: $142,664).



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:



F-17


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 2: Financial risk management (continued)





|                          |  | 30-Jun-15            |      |   | 30-Jun-14 | 
|------------------------- |  | -------------------- | ---- | - | --------- | 
|                          |  | Weighted
    average |      |   |           | 
|                          |  | interest
    rate    |      |   | Balance   | 
|                          |  | %                    |      |   | $         | 
|Variable rate instruments |  |                      |      |   |           | 
|Cash
    at bank          |  |                      | 1.50 | % |           | 
|                          |  |                      |      |   |           | 
|Fixed rate instruments    |  |                      |      |   |           | 
|Term deposits             |  |                      | -    |   |           | 
|Term
    deposits         |  |                      | 2.30 | % |           | 
|Term deposits             |  |                      | -    |   |           | 
|                          |  |                      |      |   |           | 



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 $48,428 (2014: $74,085), 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.



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.



|                      |  | Weighted |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|--------------------- |  | -------- | - |  | --------- |  | --------- | ----------- |  |  | ----------- |  |  | ------ | - |  | ----------- | 
|                      |  | average  |   |  |           |  |           |             |  |  |             |  |  |        |   |  | Remaining   | 
|                      |  | interest |   |  | 1 year or |  |           | Between 1   |  |  | Between 2   |  |  | Over 5 |   |  | contractual | 
|Consolidated - 2015   |  | rate %   |   |  | less      |  |           | and 2 years |  |  | and 5 years |  |  | years  |   |  | maturities  | 
|                      |  |          |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|Non-derivatives       |  |          |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|Non-interest bearing  |  |          |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|Trade payables        |  |          | - |  |           |  | 1,835,324 |             |  |  | -           |  |  |        | - |  |             | 
|Other payables        |  |          | - |  |           |  | 733,938   |             |  |  | -           |  |  |        | - |  |             | 
|Total non-derivatives |  |          |   |  |           |  | 2,569,262 |             |  |  | -           |  |  |        | - |  |             | 





|                      |  | Weighted |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|--------------------- |  | -------- | - |  | --------- |  | --------- | ----------- |  |  | ----------- |  |  | ------ | - |  | ----------- | 
|                      |  | average  |   |  |           |  |           |             |  |  |             |  |  |        |   |  | Remaining   | 
|                      |  | interest |   |  | 1 year or |  |           | Between 1   |  |  | Between 2   |  |  | Over 5 |   |  | contractual | 
|Consolidated - 2014   |  | rate %   |   |  | less      |  |           | and 2 years |  |  | and 5 years |  |  | years  |   |  | maturities  | 
|                      |  |          |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|Non-derivatives       |  |          |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|Non-interest bearing  |  |          |   |  |           |  |           |             |  |  |             |  |  |        |   |  |             | 
|Trade payables        |  |          | - |  |           |  | 1,594,143 |             |  |  | -           |  |  |        | - |  |             | 
|Other payables        |  |          | - |  |           |  | 969,468   |             |  |  | -           |  |  |        | - |  |             | 
|Total non-derivatives |  |          |   |  |           |  | 2,563,611 |             |  |  | -           |  |  |        | - |  |             | 



F-18


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 2: Financial risk management (continued)



The cash flows
in the maturityanalysis
above are not expected
to occursignificantly
earlierthancontractuallydisclosed above.



Fairvalue
offinancialinstruments



The fair values
offinancial
assets
and liabilitiesaredeterminedinaccordance
with generallyacceptedpricingmodelsbasedon estimatedfuture cash flows.TheDirectorsconsiderthatthecarryingamountsoffinancialassetsandfinancialliabilitiesrecordedinthefinancial statementsapproximate theirfairvalues, because they are short-term in nature.



Note3:Criticalaccountingestimatesandjudgements



Thepreparationofthefinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffectthereportedamountsin thefinancialstatements.Managementcontinuallyevaluatesitsjudgementsandestimatesinrelationtoassets, liabilities,contingent liabilities,
revenue andexpenses.Managementbasesitsjudgements, estimatesandassumptionsonhistoricalexperienceandonothervariousfactors, including expectationsoffutureevents,managementbelievestobereasonableunderthecircumstances. Theresultingaccountingjudgementsandestimates
will seldomequaltherelatedactualresults.Thejudgements,estimatesand assumptions thathave a significantriskofcausingamaterial
adjustment to the carryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.



Share-basedpaymenttransactions



The ConsolidatedEntitymeasuresthe costofequity-settledtransactionswithdirectors,employeesandlimitedsuppliers,byreferencetothefairvalue oftheequityinstrumentsatthedateatwhichtheyaregranted.Thefairvalue isdeterminedbyusingeithera Binomial,
Black-Scholesorother estimationmodelsuchasatrinomialbarrieroptionmodelaftertakingintoaccountthe terms and conditionsupon which the instrumentsweregranted. Theaccountingestimatesandassumptionsrelating toequity-settled share-basedpayments wouldhavenoimpactonthecarryingamountsofassetsand liabilitieswithinthenextannualreportingperiodbutmayimpactprofitorlossandequity.



Provisionforimpairment ofreceivables



Theprovisionforimpairmentofreceivablesassessmentrequiresa degreeofestimation and judgement. Thelevelofprovisionisassessedbytaking intoaccounttherecentsalesexperience,theageingofreceivables,historicalcollectionratesandspecificknowledgeoftheindividual debtors financial
position.



Estimationofusefullivesof assets



TheConsolidatedEntitydeterminestheestimatedusefullivesandrelateddepreciationandamortisationchargesforitsproperty,plantandequipment andfinitelifeintangibleassets.Theusefullivescouldchangesignificantlyasaresult oftechnicalinnovationsorsomeotherevent.Thedepreciation and amortisation
charge will increase
wheretheusefullivesarelessthanpreviouslyestimatedlives, ortechnicallyobsoleteornon-strategicassetsthat havebeenabandonedorsoldwill bewrittenofforwrittendown.



Goodwillandotherindefinitelifeintangibleassets



TheConsolidatedEntitytestsannually,ormorefrequentlyifeventsorchangesincircumstancesindicate impairment,whethergoodwill and other indefinitelifeintangible assetshavesufferedany impairment,
in accordance
with the accountingpolicystatedinnote1.Therecoverableamountsof cash-generatingunitshavebeendetermined basedonvalue-in-usecalculations. These
calculations
requiretheuseofassumptions,includingestimated discountratesbasedonthecurrentcostofcapital andgrowthrates oftheestimatedfuturecashflows.



Longserviceleaveprovision



Pernote1,theliabilityforlongserviceleave isrecognised and measuredatthe present
valueoftheestimatedfuturecashflows to be made
inrespect
ofallemployeesatthereportingdate.In determining
the present value ofthe
liability, estimatesof attrition rates
and payincreasesthroughpromotion andinflationhavebeentakenintoaccount.



Businesscombinations



Asdiscussedinnote1,businesscombinationsareinitiallyaccountedforonaprovisional basis. The
fair value ofassets
acquired, liabilities
and contingent liabilities
assumed are initially
estimated bythe ConsolidatedEntitytakingintoconsiderationall available
informationatthereportingdate. Fairvalueadjustmentsonthefinalisationofthebusinesscombinationaccountingisretrospective,
where applicable,
totheperiod the combination
occurredandmayhave animpact on the assets
and liabilities,depreciationandamortisationreported,whentheaccountingisfinalised.



Note4:Segmentinformation



MOKO Social Media Limited is organized into three operating
segments: Mobile Social, Mobile Advertising and Mobile Commerce (2014 and 2013: four operating segments including Mobile
Content). These operating segments are based on the internal reports that are reviewed and used by the Board of Directors in assessing
performance and in determining the allocation of resources. There is no aggregation of operating segments.



Typesofproductsandservices



Theprincipalproductsandservicesofeachoftheseoperatingsegmentsareasfollows:



F-19


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 4: Segment information (continued)



|MobileSocial       | MOKO’sproprietarymobilesocialnetworksandcommunity/chatproducts                                                                    
|------------------ | ----------------------------------------------------------------------------------------------------------------------------------
|                   |                                                                                                                                   
|Mobile Advertising | MOKO’sown proprietarymobile performanceadnetworkandcustomisedmobilepublishingdivision                                             
|                   |                                                                                                                                   
|MobileContent      | MOKO’sUKdivisionthatbundles
    and sells mobile content andentertainmentproductsdirecttomobileconsumers (discontinuedandinactive)
|                   |                                                                                                                                   
|Mobile Commerce    | MOKO’s subsidiary e-commerceplatform.Salesvolumesandaveragerevenueperusergrew viadiversifiedmarketing channelsand product range   



Intersegment
receivables,payablesandloans



Intersegmentloansare
initially recognisedat the consideration
received. Intersegmentloansreceivableandloanspayablethatearnorincurnon-market interest
are not adjusted to fairvalue
based onmarket interest
rates. Intersegmentreceivables,
payables and loansare
eliminatedonconsolidation.



Operatingsegmentinformation



|Consolidated                 
|-----------------------------
|Consolidated -               
|30June2015                   
|                             
|Total segment revenue        
|                             
|EBITDA                       
|                             
|Depreciation and amortisation
|Interest received            
|Finance costs                
|Loss before income tax       
|Income tax benefit           
|Loss after income tax        
|                             
|Assets                       
|Liabilities                  





|Consolidated                 
|-----------------------------
|Consolidated -               
|30June2014                   
|                             
|Total segment revenue        
|                             
|EBITDA                       
|                             
|Depreciation and amortisation
|Interest received            
|Finance costs                
|Loss before income tax       
|Income tax (expense)         
|Loss after income tax        
|                             
|Assets                       
|Liabilities                  





F-20


Table of Contents




NOTESTOTHEFINANCIALSTATEMENTS



Fortheyearended30June2015



Note4:Segmentinformation(continued)



|Continuing
    Operations    
|-----------------------------
|Consolidated -               
|30June2013                   
|                             
|Total segment revenue        
|                             
|EBITDA                       
|                             
|Depreciation and amortisation
|Interest received            
|Finance costs                
|Loss before income tax       
|Income tax benefit           
|Loss after income tax        
|                             
|Assets                       
|Liabilities                  



Geographicalinformation



|Consolidated                    
|--------------------------------
|Consolidated-30 June 2015       
|                                
|                                
|Sales to external customers     
|Add: Interest received          
|Add: Other income               
|Less: Cost of providing services
|Less: Expenses **               
|Loss before income tax          
|Income tax benefit              
|Loss after income tax           
|                                
|Assets                          
|Liabilities                     



*Overhead
expensesarenotassociatedwith anyparticularregion.





F-21


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 4: Segment information (continued)



|Consolidated                                             
|---------------------------------------------------------
|Consolidated-30June 2014                                 
|                                                         
|                                                         
|Sales to external customers                              
|Add: Interest received                                   
|Add: Other income                                        
|Add: Fair value gain on deferred contingent consideration
|Less: Cost of providing goods and services               
|Less: Expenses **                                        
|Loss before income tax                                   
|Income tax (expense)                                     
|Loss after income tax                                    
|                                                         
|Assets                                                   
|Liabilities                                              



**Overhead
expensesarenotassociatedwith any particular region.



|Continuingoperations                                     
|---------------------------------------------------------
|Consolidated-30June 2013                                 
|                                                         
|Sales to external customers                              
|Add: Interest received                                   
|Add: Other Income                                        
|Add: Fair value gain on deferred contingent consideration
|Less: Cost of providing goods and services               
|Less Expenses *                                          
|Loss before income tax                                   
|Income tax (expense)                                     
|Loss after income tax expense                            
|                                                         
|Assets                                                   
|Liabilities                                              



*Overhead
expensesarenotassociatedwith any particular region.





Major customers



During the year ended 30 June 2015 approximately 11% (2014: 9%) of the Consolidated Entity’s external revenue
was derived from sales to Telstra Corporate Ltd (a major Australian retailer) through the computer retailing and computer distribution
operating segments.





F-22


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note5:Revenueandincome



|                                          |  | Consolidated |          
|----------------------------------------- |  | ------------ | ---------
|                                          |  | 2015         |          
|                                          |  | $            |          
|Revenuefromcontinuingoperations           |  |              |          
|                                          |  |              |          
|Sale of goods                             |  |              | 1,990,291
|Rendering of services                     |  |              | 4,296,842
|                                          |  |              | 6,287,133
|                                          |  |              |          
|Interest received                         |  |              | 189,770  
|                                          |  |              |          
|Other income and revenue                  |  |              |          
|Research & development tax refund         |  |              | 947,845  
|Grants received                           |  |              | -        
|Income from Sales of Business             |  |              | -        
|                                          |  |              | 947,845  
|                                          |  |              |          
|Fair value gain on deferred consideration |  |              | -        



The $947,845 research and development tax refund was
received    on 18 April 2015 (2014: $1,082,953 received on 22 November 2013; $1,008,231 received on 31 January 2013) for a claim
in accordance with the Commonwealth Government’s    Research and Development Tax Incentive Regime which has been
in operation since 1 July 2011, the 45% refundable tax offset    is available to companies that have grouped aggregated
turnover of less than $20 million. There is no cap on Research &    development expenditure.





Note 6: Expenses



Lossbeforeincometaxfromcontinuingoperationsincludesthe followingspecificexpenses:



|                                                                     |  | Consolidated |          
|-------------------------------------------------------------------- |  | ------------ | ---------
|                                                                     |  | 2015         |          
|                                                                     |  | $            |          
|Employee
    benefits expense                                        |  |              |          
|Salaries and wages                                                   |  |              | 7,757,951
|Superannuation, Healthcare & Workers Compensation                    |  |              | 920,050  
|Total employee benefits expense                                      |  |              | 8,678,001
|                                                                     |  |              |          
|Share based payments                                                 |  |              | 1,929,265
|                                                                     |  |              |          
|Depreciation                                                         |  |              |          
|                                                                     |  |              |          
|Computer equipment                                                   |  |              | 28,691   
|Furniture and fittings                                               |  |              | 6,602    
|Leashold improvements                                                |  |              | 3,476    
|Total depreciation                                                   |  |              | 38,769   
|                                                                     |  |              |          
|Amortisation                                                         |  |              |          
|Computer software                                                    |  |              | 36,894   
|Customer contracts                                                   |  |              | -        
|Capitalised product development                                      |  |              | 19,649   
|Intellectual Property                                                |  |              | 922,345  
|Customer database                                                    |  |              | -        
|Total amortisation                                                   |  |              | 978,888  
|                                                                     |  |              |          
|Totaldepreciationandamortisation                                     |  |              | 1,017,657
|                                                                     |  |              |          
|Impairment expense                                                   |  |              |          
|Goodwill                                                             |  |              | -        
|                                                                     |  |              |          
|Rental expense relating to operating leases - Minimum lease payments |  |              | 453,673  



F-23


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note7:Incometaxbenefit



|                                                                                   |  | Consolidated |            
|---------------------------------------------------------------------------------- |  | ------------ | -----------
|                                                                                   |  | 2015         |            
|                                                                                   |  | $            |            
|Income tax (benefit )/expense                                                      |  |              |            
|Current tax (benefit )/expense                                                     |  |              | -          
|Deferred tax                                                                       |  |              | -          
|Adjustment recognised for prior periods                                            |  |              | (180,261   
|Aggregate income tax benefit                                                       |  |              | (180,261   
|                                                                                   |  |              |            
|Income tax benefit is attributable to:                                             |  |              |            
|Loss/(profit) from continuing operations                                           |  |              | (180,261   
|Profit from discontinued operations                                                |  |              | -          
|Aggregate income tax benefit                                                       |  |              | (180,261   
|Primafacietaxonlossbefore income taxis reconciled to income tax expense asfollows: |  |              |            
|Loss from continuing operations before income tax benefit                          |  |              | (20,474,268
|Loss from discontinued operations before income tax benefit                        |  |              | -          
|                                                                                   |  |              | (20,474,268
|                                                                                   |  |              |            
|Prima facie tax on loss before income tax at 30%                                   |  |              | (6,142,281 
|                                                                                   |  |              |            
|Adjustment for jurisdictional differences in tax rates                             |  |              | (488,467   
|Add tax effect of:                                                                 |  |              |            
|Non-allowable items                                                                |  |              | 454,124    
|Non-assessable items                                                               |  |              | (992,157   
|Tax losses and timing differences not brought to account (continuing operations)   |  |              | 7,168,781  
|Tax losses and timing differences not brought to account (discontinued operations) |  |              | -          
|                                                                                   |  |              |            
|Adjustment recognised for prior periods                                            |  |              | (180,261   
|Current tax (benefit)/expense                                                      |  |              | (180,261   



MOKOhas
historicallymade claimsin accordance with the CommonwealthGovernment’sResearchandDevelopmentTaxIncentiveRegime which
hasoperatedsince1July2011andwhereina45%refundabletaxoffsetisavailableoneligibleanduncappedR&Dexpenditure,tocompanies
that havegroupedaggregatedturnoveroflessthan$20million.



Thefollowingresearchanddevelopment
taxoffsets
were receivedas cash rebates
in the past threeyears:



|Fiscal
    year |  | Tax
    offsetvalue |           |  | Date
    received
|--------------- |  | ------------------- | --------- |  | -----------------
|                |  | $                   |           |  |                  
|2015            |  |                     | 937,845   |  |                  
|2014            |  |                     | 1,082,953 |  |                  
|2013            |  |                     | 1,008,231 |  |                  



F-24


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note7:Incometaxbenefit (continued)



|                                          |  | Consolidated |  
|----------------------------------------- |  | ------------ | -
|                                          |  | 2015         |  
|                                          |  | $            |  
|Recognised deferredtaxassets:             |  |              |  
|Share based payments – non qualified plan |  |              | -



|Taxlossesnotrecognised:                                         |  |  |            |  |  |  |            |  | 
|--------------------------------------------------------------- |  |  | ---------- |  |  |  | ---------- |  | 
|                                                                |  |  |            |  |  |  |            |  | 
|Tax losses carried forward                                      |  |  | 41,545,954 |  |  |  | 18,027,944 |  | 
|Other Temporary differences not recognised                      |  |  | 3,508,887  |  |  |  | 3,854,686  |  | 
|Unused tax losses for which no deferred tax has been recognised |  |  | 45,054,841 |  |  |  | 21,882,630 |  | 
|Potential tax benefit at notional rate of tax*                  |  |  | 14,225,789 |  |  |  | 6,564,789  |  | 



No amounts havebeenrecognisedfordeferredtaxonunutilisedtaxlossesasit isnotyetprobablethatfuturetaxableamountswill be available
against which the Companywill utilisethese assetsinfuture years.



* Potential tax benefit at notional rate of tax is 30% for
AU entities and 34% for US entities.



Note8:Cashandcashequivalents



|             |  | Consolidated |          
|------------ |  | ------------ | ---------
|             |  | 2015         |          
|             |  | $            |          
|Cash on hand |  |              | 558      
|Cash at bank |  |              | 7,219,350
|             |  |              | 7,219,908



Note9:Tradeandotherreceivables





|                                              |  | Consolidated |         
|--------------------------------------------- |  | ------------ | --------
|                                              |  | 2015         |         
|Trade receivables                             |  |              | 401,420 
|Less: Provision for impairment of receivables |  |              | (140,127
|                                              |  |              | 261,293 
|Other debtors                                 |  |              | 240,179 
|Total                                         |  |              | 501,472 





Impairmentofreceivables



The Consolidated Entity has recognised a loss of $313,428
(2014: $50,596) in the statement of profit or loss and other comprehensive income in respect of impairment of receivables for the
year ended 30 June 2015.



Theageingoftheimpairedreceivablesprovidedforaboveareasfollows:





|1-30 days  |  |  | -       |  |  |  | -      | 
|---------- |  |  | ------- |  |  |  | ------ | 
|31-60 days |  |  | -       |  |  |  | -      | 
|61-90 days |  |  | -       |  |  |  | -      | 
|90+ days   |  |  | 140,127 |  |  |  | 55,804 | 
|           |  |  | 140,127 |  |  |  | 55,804 | 





Movementsintheprovisionforimpairment ofreceivables
are as follows:



|                                       |  | Consolidated |         
|-------------------------------------- |  | ------------ | --------
|                                       |  | 2015         |         
|                                       |  | $            |         
|Opening Balance                        |  |              | 55,804  
|Additional provisions recognised       |  |              | 313,428 
|Reversal of impairment during the year |  |              | (229,105
|ClosingBalance                         |  |              | 140,127 



Pastduebutnotimpaired



Customers with balances past due but without provision for
impairment of receivables amount to $61,280 as at 30 June 2015 ($232,125 as at 30 June 2014).



TheConsolidatedEntitydidnotconsideracreditriskontheaggregatebalancesafterreviewing credittermsofcustomersbasedonrecentcollection practices.



Theageingofthepastduebutnotimpairedreceivables
are as follows:



F-25


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015





Note 9: Trade and other receivables (continued)





|31-60 days |  |  | 17,556 |  |  |  | 104,235 | 
|---------- |  |  | ------ |  |  |  | ------- | 
|61-90 days |  |  | 440    |  |  |  | 52,185  | 
|90+ days   |  |  | 43,284 |  |  |  | 75,705  | 
|           |  |  | 61,280 |  |  |  | 232,125 | 



Note 10: Othercurrentassets



|            |  | Consolidated |          
|----------- |  | ------------ | ---------
|            |  | 2015         |          
|            |  | $            |          
|Deposit     |  |              | 163,278  
|Prepayments |  |              | 853,926  
|            |  |              | 1,017,204









Note11:Property,plantandequipment



|                                           |  | Computer  |          |   | Furnitureand |  |         |       | 
|------------------------------------------ |  | --------- | -------- | - | ------------ |  | ------- | ----- | 
|Consolidated
    2014                      |  | Equipment |          |   | fittings     |  |         | Total | 
|                                           |  |           |          |   |              |  |         |       | 
|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  |       | 



|                                       |  | Computer  |          |   | Furniture    |  |         | Leasehold    |  |  |        |  
|-------------------------------------- |  | --------- | -------- | - | ------------ |  | ------- | ------------ |  |  | ------ | -
|Consolidated 2015                      |  | equipment |          |   | and fittings |  |         | Improvements |  |  | Total  |  
|Cost                                   |  |           | 772,604  |   |              |  | 80,064  |              |  |  | 33,902 |  
|Accumulated depreciation               |  |           | (590,881 | ) |              |  | (35,542 | )            |  |  | (4,186 | )
|Balance at 30 June 2015                |  |           | 181,723  |   |              |  | 44,522  |              |  |  | 29,716 |  
|                                       |  |           |          |   |              |  |         |              |  |  |        |  
|Reconciliation                         |  |           |          |   |              |  |         |              |  |  |        |  
|Balance at 1 July 2014                 |  |           | 75,063   |   |              |  | 12,663  |              |  |  | -      |  
|Additions                              |  |           | 137,622  |   |              |  | 39,287  |              |  |  | 33,902 |  
|Depreciation expense                   |  |           | (28,691  | ) |              |  | (6,602  | )            |  |  | (3,476 | )
|Effects of movements in exchange rates |  |           | (2,271   | ) |              |  | (826    | )            |  |  | (710   | )
|Balance at 30 June 2015                |  |           | 181,723  |   |              |  | 44,522  |              |  |  | 29,716 |  





F-26


Table of Contents








NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 12: Intangibles



|Consolidated 2014                          |  | Computersoftware |          | CustomerContracts |  | Capitalisedproductdevelopmentcosts |          | IntellectualProperty |  | CustomerDatabase |          | Goodwill |  | TOTAL
|------------------------------------------ |  | ---------------- | -------- | ----------------- |  | ---------------------------------- | -------- | -------------------- |  | ---------------- | -------- | -------- |  | -----
|                                           |  | $                |          | $                 |  | $                                  |          | $                    |  | $                |          | $        |  | $    
|                                           |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Cost                                       |  |                  | 75,839   |                   |  |                                    | 207,411  |                      |  |                  | 110,803  |          |  |      
|Accumulated amortisation                   |  |                  | (72,556  | )                 |  |                                    | (207,411 | )                    |  |                  | (91,154  | )        |  |      
|Balance at 30 June 2014                    |  |                  | 3,283    |                   |  |                                    | -        |                      |  |                  | 19,649   |          |  |      
|                                           |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Reconciliation                             |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Balance at 1 July 2013                     |  |                  | -        |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Acquisitions through business combinations |  |                  | -        |                   |  |                                    | -        |                      |  |                  | 39,297   |          |  |      
|Additions                                  |  |                  | 6,348    |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Disposals                                  |  |                  | -        |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Amortisation expense                       |  |                  | (3,065   | )                 |  |                                    | -        |                      |  |                  | (19,648  | )        |  |      
|Effects of movements in exchange rates     |  |                  | -        |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Balance at 30 June 2014                    |  |                  | 3,283    |                   |  |                                    | -        |                      |  |                  | 19,649   |          |  |      
|                                           |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Consolidated 2015                          |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Cost                                       |  |                  | 220,646  |                   |  |                                    | 207,411  |                      |  |                  | 110,803  |          |  |      
|Accumulated amortisation/impairment        |  |                  | (121,862 | )                 |  |                                    | (207,411 | )                    |  |                  | (110,803 | )        |  |      
|Balance at 30 June 2015                    |  |                  | 98,784   |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|                                           |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Reconciliation                             |  |                  |          |                   |  |                                    |          |                      |  |                  |          |          |  |      
|Balance at 1 July 2014                     |  |                  | 3,283    |                   |  |                                    | -        |                      |  |                  | 19,649   |          |  |      
|Acquisitions through business combinations |  |                  | -        |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Additions                                  |  |                  | 132,395  |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Amortisation expense                       |  |                  | (36,894  | )                 |  |                                    | -        |                      |  |                  | (19,649  | )        |  |      
|Effects of movements in exchange rates     |  |                  | -        |                   |  |                                    | -        |                      |  |                  | -        |          |  |      
|Balance at 30 June 2015                    |  |                  | 98,784   |                   |  |                                    | -        |                      |  |                  | -        |          |  |      



Goodwill acquired through business combinations has been allocated
to the following cash-generating units:



|                                               |  | Mobile              |           | Mobile           |  |      
|---------------------------------------------- |  | ------------------- | --------- | ---------------- |  | -----
|                                               |  | Advertising
    (1) |           | Commerce
    (2) |  | Total
|                                               |  | $                   |           | $                |  | $    
|                                               |  |                     |           |                  |  |      
|Balance at 1 July 2014                         |  |                     | 938,153   |                  |  |      
|Acquisitions through business combinations     |  |                     | 339,570   |                  |  |      
|Effects of movements on foreign exchange rates |  |                     | 215,434   |                  |  |      
|Balance at 30 June 2015                        |  |                     | 1,493,157 |                  |  |      



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 5 year projection period approved by management and a terminal value based on a long term average growth
rate of 2%. 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)   Mobile Performance Network (‘MPN’)
and Tagroom Pty Ltd (‘Tagroom’)



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 (2014: nil).



F-27


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 13: Available-for-sale financial assets



On 24 April 2015, MOKO signed a Share Purchase Agreement with
Big Teams LLC (“BigTeams”), a limited liability company located in the US. MOKO committed to invest One Million U.S.
Dollars (US$1,000,000 or A$1,297,811) to acquire a 10% equity stake in BigTeams.



BigTeams is the largest high school sports software platform
in the US, providing online tools and data for US high schools to assist with sports team administration, event management and
fundraising.



Under the agreement MOKO will launch a tailored version of its
REC*IT app specifically targeted at the students and parents of more than 4,000 US high schools that are currently serviced by
BigTeams, using data generated by BigTeams. This investment will significantly expand its offering for US students and provide
access to the lucrative high school market. The new app is scheduled for launch in September 2015, to coincide with the new school
year.



During the year, MOKO has paid consideration of US$200,000 (A$256,813)
in cash. The remaining consideration of US$800,000 (A$1,042,142) is included in “Trade and other payables”.



F-28


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 14: Business combinations



Acquisition of Tagroom Pty Ltd



On 1 October 2014, MOKO completed a business combination by
acquiring 80% of the ordinary shares in Tagroom Pty Ltd (‘Tagroom’). 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 total fair value consideration for
the acquisition, which represents a business combination, included $200,000 in cash and $200,000 in MOKO ordinary shares, priced
at the volume-weighted average price of shares traded on the ASX over the 5 trading days up to and including the day before completion.



Tagroom contributed revenues of $43,735
and made a net loss after tax of $667,257 for the period of 1 Oct 2014 to 30 June 2015. If the acquisition occurred on 1 July 2014,
the full year contributions would have been revenues of $56,610 and net loss after tax of $702,829.



The business combination accounting is
final and the Tagroom acquisition is allocated to the Mobile Advertising segment.



|                                                               |  | Carrying value |         | Fair value
|-------------------------------------------------------------- |  | -------------- | ------- | ----------
|                                                               |  |                |         |           
|Goodwill                                                       |  |                | -       |           
|Cash and cash equivalents                                      |  |                | 24,885  |           
|Other receivables                                              |  |                | 50,000  |           
|Other payables                                                 |  |                | (40,313 | )         
|                                                               |  |                |         |           
|Net assets acquired                                            |  |                | 34,572  |           
|                                                               |  |                |         |           
|Acquisition date fair value of total consideration transferred |  |                |         |           
|                                                               |  |                |         |           
|Satisfied By                                                   |  |                |         |           
|Consideration: cash                                            |  |                |         |           
|Consideration: Moko ordinary shares                            |  |                |         |           
|                                                               |  |                |         |           
|Total                                                          |  |                |         |           



Acquisition expenses of $29,216 for legal
fees have not impacted this business combination accounting.



Goodwill of $339,570 represents the addition
of Tagroom to MOKO’s portfolio. The acquisition is in synergy with the Company’s overall audience profile as it provides
marketers and brands with direct access to coveted hard to reach audiences.



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
$200,000 in cash and $200,000 in MOKO ordinary shares (1,242,263 shares) priced at the volume-weighted average price of shares
traded on the ASX over the 5 trading days up to and including the day before completion on 12 December 2014.



Note 15: Trade and other payables



|                            |  | Consolidated
|--------------------------- |  | ------------
|                            |  | 2015        
|                            |  |             
|Trade payables              |  |             
|Other payables and accruals |  |             
|                            |  |             



F-29


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 16: Employee benefits



|                  |  | Consolidated
|----------------- |  | ------------
|                  |  | 2015        
|Current           |  |             
|                  |  |             
|Employee benefits |  |             
|                  |  |             
|Non-Current       |  |             
|                  |  |             
|Employee benefits |  |             



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 17: Issued capital



|                                                                             |  | Consolidated
|---------------------------------------------------------------------------- |  | ------------
|                                                                             |  | 2015        
|                                                                             |  | $           
|Fully paid ordinary shares
    755,486,679 (30 Jun 2014: 552,853,091 shares) |  |             
|Fully paid performance shares 20,000,000
    (30 June 2014 20,000,000)       |  |             
|                                                                             |  |             



Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully
paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.



On a show of hands every member present at a meeting in person
or by proxy shall have one vote and upon a poll each share shall have one vote.



F-30


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 17: Issued capital (continued)



(a) Ordinary shares



The followings movements in ordinary share capital occurred
during the year:



|Date              |  | Details                                            |  | Numbers
    of shares |             | Issue
    Price 
$ |  | Amount
    
$
|----------------- |  | -------------------------------------------------- |  | --------------------- | ----------- | ------------------ |  | -------------
|1 July
    2014   |  | Opening
    Balance                                |  |                       | 552,853,091 |                    |  |              
|1 July 2014       |  | NASDAQ
    listing capital - Gross US$8.25m        |  |                       | 44,000,000  |                    |  |              
|8 July 2014       |  | Share
    issue by placement                       |  |                       | 1,000,000   |                    |  |              
|8 July 2014       |  | Share
    issue by placement                       |  |                       | 1,000,000   |                    |  |              
|8 July 2014       |  | Share issue by exercise
    of options             |  |                       | 450,000     |                    |  |              
|15 July 2014      |  | Share issue by exercise
    of options             |  |                       | 53,912      |                    |  |              
|12 August 2014    |  | Share issue by exercise
    of options             |  |                       | 200,000     |                    |  |              
|12 September 2014 |  | Share issue by exercise
    of options             |  |                       | 1,000,000   |                    |  |              
|28 November 2014  |  | Share issue by exercise
    of options             |  |                       | 100,000     |                    |  |              
|19 December 2014  |  | Share
    issue pursuant to Tagroom at acquisition |  |                       | 1,242,263   |                    |  |              
|24 December 2014  |  | Share issue by exercise
    of options             |  |                       | 1,000,000   |                    |  |              
|24 December 2014  |  | Share issue by exercise
    of options             |  |                       | 1,000,000   |                    |  |              
|5 February 2015   |  | Share issue by exercise
    of options             |  |                       | 200,000     |                    |  |              
|13 February 2015  |  | Share issue by exercise
    of options             |  |                       | 100,000     |                    |  |              
|13 February 2015  |  | Issue
    shares in lieu of services               |  |                       | 504,840     |                    |  |              
|16 February 2015  |  | Share issue by exercise
    of options             |  |                       | 500,000     |                    |  |              
|23 February 2015  |  | Share issue by exercise
    of options             |  |                       | 850,000     |                    |  |              
|2 March 2015      |  | Share issue by exercise
    of options             |  |                       | 2,625,000   |                    |  |              
|13 March 2015     |  | Share issue by exercise
    of options             |  |                       | 656,000     |                    |  |              
|23 March 2015     |  | Share issue by exercise
    of options             |  |                       | 300,000     |                    |  |              
|10 April 2015     |  | Share issue by exercise
    of options             |  |                       | 2,990,334   |                    |  |              
|13 April 2015     |  | Share issue by exercise
    of options             |  |                       | 100,000     |                    |  |              
|13 April 2015     |  | Issue
    shares under US Omnibus Plan             |  |                       | 280,000     |                    |  |              
|13 April 2015     |  | Issue
    shares under US Omnibus Plan             |  |                       | 193,040     |                    |  |              
|27 April 2015     |  | Share issue by exercise
    of options             |  |                       | 2,254,000   |                    |  |              
|1 May 2015        |  | Share issue by exercise
    of options             |  |                       | 4,923,105   |                    |  |              
|1 May 2015        |  | Issue
    shares under US Omnibus Plan             |  |                       | 240,000     |                    |  |              
|7 May 2015        |  | Share issue by exercise
    of options             |  |                       | 200,000     |                    |  |              
|7 May 2015        |  | Share issue by exercise
    of options             |  |                       | 500,000     |                    |  |              
|19 June 2015      |  | Share issue by exercise
    of options             |  |                       | 127,921,094 |                    |  |              
|26 June 2015      |  | Share issue by exercise
    of options             |  |                       | 6,000,000   |                    |  |              
|26 June 2015      |  | Share issue by exercise
    of options             |  |                       | 250,000     |                    |  |              
|                  |  | Capital
    raising costs                          |  |                       | -           |                    |  |              
|                  |  | Closing
    Balance                                |  |                       | 755,486,679 |                    |  |              



(b) Performance shares



|Issue 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 |                    



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.



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



F-31


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 17: Issued capital (continued)



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.



No Performance Shares were issued during the year. In the prior
year 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                         |  | Grant Date |  | Expiry Date |  | Exercise
    Price |        | Number
    of Options
|----------------------------- |  | ---------- |  | ----------- |  | ------------------ | ------ | ---------------------
|Unlisted
    Employee Options |  | 3-Nov-14   |  | 31-Dec-14   |  | US$                | 0.05   |                      
|Unlisted
    Employee Options |  | 3-Nov-14   |  | 31-Dec-14   |  | US$                | 0.10   |                      
|Unlisted
    Employee Options |  | 3-Nov-14   |  | 31-Dec-14   |  | US$                | 0.15   |                      
|Unlisted
    Employee Options |  | 3-Nov-14   |  | 30-Jun-16   |  | US$                | 0.1875 |                      
|Unlisted
    Employee Options |  | 3-Nov-14   |  | 31-Dec-14   |  | US$                | 0.17   |                      
|Unlisted
    Director Options |  | 26-Nov-14  |  | 26-Nov-17   |  | $                  | 0.19   |                      
|Unlisted
    Director Options |  | 26-Nov-14  |  | 26-Nov-16   |  | $                  | 0.19   |                      
|Unlisted
    Employee Options |  | 26-Nov-14  |  | 31-Jan-17   |  | $                  | 0.196  |                      
|Unlisted
    Employee Options |  | 19-Dec-14  |  | 20-Dec-16   |  | $                  | 0.20   |                      
|Unlisted
    Employee Options |  | 22-Dec-14  |  | 31-Dec-15   |  | US$                | 0.15   |                      
|Unlisted
    Employee Options |  | 22-Dec-14  |  | 30-Jun-15   |  | US$                | 0.1875 |                      
|Unlisted
    Employee Options |  | 22-Dec-14  |  | 30-Jun-16   |  | US$                | 0.17   |                      
|Unlisted
    Director Options |  | 13-Apr-15  |  | 31-Dec-16   |  | $                  | 0.17   |                      
|Unlisted
    Employee Options |  | 1-May-15   |  | 31-Dec-16   |  | $                  | 0.075  |                      
|Unlisted
    Employee Options |  | 26-Jun-15  |  | 30-Jun-16   |  | US$                | 0.05   |                      
|Unlisted
    Employee Options |  | 26-Jun-15  |  | 30-Jun-16   |  | US$                | 0.075  |                      
|Total                         |  |            |  |             |  |                    |        |                      



The weighted average fair value of options granted during
the financial year was A$0.04.



F-32


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 17: Issued capital (continued)



Table B - Options granted American Depositary Shares
(where one ADS = 40 Ordinary shares)



|Class                    |  | Grant Date |  | Expiry Date |  | Exercise
    Price (per ADS in US$) |      | Number
    granted (in ADSs) |  | Number
    granted (in ordinary shares)
|------------------------ |  | ---------- |  | ----------- |  | ----------------------------------- | ---- | ---------------------------- |  | ---------------------------------------
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 1-Nov-17    |  | $                                   | 5.05 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 1-Nov-18    |  | $                                   | 5.05 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 1-Nov-19    |  | $                                   | 5.05 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 3-Dec-16    |  | $                                   | 4.58 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 3-Nov-17    |  | $                                   | 4.58 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 3-Nov-18    |  | $                                   | 4.58 |                              |  |                                        
|Total                    |  |            |  |             |  |                                     |      |                              |  |                                        



These options do not entitle the holder to participate in any
share issue of the Company or any other entity.



Unissued shares under option



The weighted average fair value of ADS options granted
during the financial year was A$2.85 (U$2.32).



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
    Director Options                                               |  | 30-Jul-16            |  | $                  | 0.042 |  |                       | 
|Unlisted
    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
    Options                                                        |  | 28-Nov-15            |  | $                  | 0.40  |  |                       | 
|Unlisted
    Options                                                        |  | 28-Nov-15            |  | $                  | 0.10  |  |                       | 
|Unlisted
    Director Options                                               |  | 31-Jan-16            |  | $                  | 0.20  |  |                       | 
|Unlisted
    Employee Options                                               |  | 31-Dec-15            |  | US$                | 0.15  |  |                       | 
|Unlisted
    Employee Options                                               |  | 30-Jun-16            |  | US$                | 0.17  |  |                       | 
|Unlisted
    Director Options                                               |  | 26-Nov-17            |  | $                  | 0.19  |  |                       | 
|Unlisted
    Director Options                                               |  | 26-Nov-16            |  | $                  | 0.19  |  |                       | 
|Unlisted
    Employee Options                                               |  | 31-Jan-17            |  | $                  | 0.196 |  |                       | 
|Unlisted
    Employee Options                                               |  | 20-Dec-16            |  | $                  | 0.20  |  |                       | 
|Unlisted
    Employee Options                                               |  | 31-Dec-16            |  | $                  | 0.17  |  |                       | 
|Unlisted
    Employee Options                                               |  | 31-Dec-16            |  | $                  | 0.075 |  |                       | 
|Unlisted
    Employee Options                                               |  | 30-Jun-16            |  | US$                | 0.05  |  |                       | 
|Unlisted
    Employee Options                                               |  | 30-Jun-16            |  | US$                | 0.075 |  |                       | 
|Unlisted
    Options over American Depositary Shares (Unlisted ADS Options) |  | Refer
    to table D |  |                    |       |  |                       | 
|Total                                                                       |  |                      |  |                    |       |  |                       | 



F-33


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 17: Issued capital (continued)



Table D – Unissued Options over American Depositary
Shares (where one ADS = 40 Ordinary shares)



|Class                    |  | Grant Date |  | Expiry Date |  | Exercise
    Price (per ADS in US$) |      | Number
    granted (in ADSs) |  | Number
    granted (in ordinary shares)
|------------------------ |  | ---------- |  | ----------- |  | ----------------------------------- | ---- | ---------------------------- |  | ---------------------------------------
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 31-Dec-15   |  | $                                   | 4.07 |                              |  |                                        
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 31-Dec-16   |  | $                                   | 6.29 |                              |  |                                        
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                                   | 7.50 |                              |  |                                        
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                                   | 6.66 |                              |  |                                        
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                                   | 7.50 |                              |  |                                        
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 31-Dec-15   |  | $                                   | 5.55 |                              |  |                                        
|Unlisted
    ADS Options |  | 30-Jun-14  |  | 30-Jun-16   |  | $                                   | 4.00 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 3-Dec-16    |  | $                                   | 4.58 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 3-Nov-17    |  | $                                   | 4.58 |                              |  |                                        
|Unlisted
    ADS Options |  | 23-Dec-14  |  | 03-Nov-18   |  | $                                   | 4.58 |                              |  |                                        
|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 lapsed:



Table E – lapsed options



|Class                         |  | Expiry Date |  | Exercise
    Price |        | Number
    of Options
|----------------------------- |  | ----------- |  | ------------------ | ------ | ---------------------
|Unlisted
    Employee Options |  | 30-Jun-15   |  | US$                | 0.1875 |                      
|Listed
    Options (MKBOA)    |  | 13-Jun-15   |  | $                  | 0.05   |                      
|Total                         |  |             |  |                    |        |                      



|Class                    |  | Expiry Date |  | Exercise
    Price |      | Number
    of ADS*
|------------------------ |  | ----------- |  | ------------------ | ---- | ------------------
|Unlisted
    ADS Options |  | 31-Dec-14   |  | US$                | 3.70 |                   
|Unlisted
    ADS Options |  | 31-Dec-14   |  | US$                | 1.85 |                   
|Unlisted
    ADS Options |  | 31-Dec-14   |  | US$                | 6.29 |                   
|Unlisted
    ADS Options |  | 31-Dec-14   |  | US$                | 5.55 |                   
|Total                    |  |             |  |                    |      |                   



* One ADS = 40 Ordinary shares



Cancellation of options



During or since the end of the financial year, the following
options were cancelled:



Table F – cancelled options



|Class                         |  | Expiry Date |  | Exercise
    Price |        | Number
    of Options
|----------------------------- |  | ----------- |  | ------------------ | ------ | ---------------------
|Unlisted
    Employee Options |  | 31-Dec-14   |  | US$                | 0.15   |                      
|Unlisted
    Employee Options |  | 30-Jun-16   |  | US$                | 0.1875 |                      
|Unlisted
    Employee Options |  | 31-Dec-14   |  | US$                | 0.17   |                      
|Unlisted
    Director Options |  | 26-Nov-16   |  | $                  | 0.19   |                      
|Total                         |  |             |  |                    |        |                      



F-34


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 17: Issued capital (continued)



|Class                    |  | Expiry Date |  | Exercise
    Price |      | Number
    of ADS*
|------------------------ |  | ----------- |  | ------------------ | ---- | ------------------
|Unlisted
    ADS Options |  | 31-Dec-14   |  | US$                | 2.00 |                   
|Unlisted
    ADS Options |  | 31-Dec-14   |  | US$                | 4.00 |                   
|Unlisted
    ADS Options |  | 31-Dec-15   |  | US$                | 6.00 |                   
|Unlisted
    ADS Options |  | 30-Jun-15   |  | US$                | 7.50 |                   
|Unlisted
    ADS Options |  | 30-Jun-15   |  | US$                | 7.50 |                   
|Unlisted
    ADS Options |  | 30-Jun-16   |  | US$                | 6.80 |                   
|Unlisted
    ADS Options |  | 1-Nov-17    |  | US$                | 5.05 |                   
|Unlisted
    ADS Options |  | 1-Nov-18    |  | US$                | 5.05 |                   
|Unlisted
    ADS Options |  | 1-Nov-19    |  | US$                | 5.05 |                   
|Unlisted
    ADS Options |  | 30-Jun-16   |  | US$                | 2.00 |                   
|Unlisted
    ADS Options |  | 30-Jun-16   |  | US$                | 3.00 |                   
|Total                    |  |             |  |                    |      |                   



* One ADS = 40 Ordinary shares



Shares issued on the exercise of options



During or since the end of the financial year, the Consolidated
Entity issued ordinary shares of the Company as a result of the exercise of options as follows (there are no amounts unpaid on
the shares issued):



Table G – Shares issued on exercise of options



|Class                         |  | Expiry Date |  | Exercise
    Price |      | Number
    of Options
|----------------------------- |  | ----------- |  | ------------------ | ---- | ---------------------
|Unlisted
    Employee Options |  | 31-Dec-14   |  | US$                | 0.05 |                      
|Unlisted
    Employee Options |  | 31-Dec-14   |  | US$                | 0.10 |                      
|Unlisted
    Employee Options |  | 30-Nov-15   |  | $                  | 0.10 |                      
|Unlisted
    Options          |  | 30-Jun-15   |  | $                  | 0.04 |                      
|Unlisted
    Options          |  | 30-Jun-15   |  | $                  | 0.02 |                      
|Unlisted
    Options          |  | 30-Jun-15   |  | $                  | 0.03 |                      
|Unlisted
    Options          |  | 30-Jun-15   |  | $                  | 0.11 |                      
|Unlisted
    Employee Options |  | 30-Jun-15   |  | $                  | 0.06 |                      
|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 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 2015 (2014: nil).



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.



F-35


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 18: 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.





|                                     |  | Consolidated |           
|------------------------------------ |  | ------------ | ----------
|                                     |  | 2015         |           
|                                     |  | $            |           
|                                     |  |              |           
|Foreign currency translation reserve |  |              |           
|Balance at beginning of the year     |  |              | 570,172   
|Currency translation differences     |  |              | 1,397,333 
|Balance at the end of the year       |  |              | 1,967,505 
|                                     |  |              |           
|Share-based payments reserve         |  |              |           
|Balance at beginning of the year     |  |              | 8,420,632 
|Share-based payments                 |  |              | 1,825,843 
|Balance at the end of the year       |  |              | 10,246,475
|TOTAL RESERVES                       |  |              | 12,213,980



Note 19: Accumulated losses



|                                           |  | Consolidated |            
|------------------------------------------ |  | ------------ | -----------
|                                           |  | 2015         |            
|                                           |  | $            |            
|Accumulated losses brought forward         |  |              | (38,929,670
|Loss after income tax expense for the year |  |              | (20,013,288
|                                           |  |              | (58,942,958





F-36


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 20: Share Based payments



Below are summaries of the movements of options during the year
to key management personnel and employees:





|2015  Class                     |  | Grant Date |  | Expiry Date |  | Exercise Price * |        |  | Balance at start of the year |  |            | Granted |  |  | Exercised  |  |  | Expired/ forfeited/ other |            |   | Balance at end of the year ** | 
|------------------------------- |  | ---------- |  | ----------- |  | ---------------- | ------ |  | ---------------------------- |  | ---------- | ------- |  |  | ---------- |  |  | ------------------------- | ---------- | - | ----------------------------- | 
|                                |  |            |  |             |  |                  |        |  |                              |  |            |         |  |  |            |  |  |                           |            |   |                               | 
|Director Options                |  | 14-Dec-12  |  | 30-Jul-16   |  | $                | 0.042  |  |                              |  | 10,000,000 |         |  |  | -          |  |  |                           | -          |   |                               | 
|Employee Options                |  | 21-Dec-12  |  | 30-Nov-15   |  | $                | 0.10   |  |                              |  | 500,000    |         |  |  | -          |  |  |                           | (500,000   | ) |                               | 
|Employee Options                |  | 21-Feb-13  |  | 30-Jun-15   |  | $                | 0.06   |  |                              |  | 750,000    |         |  |  | -          |  |  |                           | (250,000   | ) |                               | 
|Employee Options                |  | 13-Sep-13  |  | 31-Jul-16   |  | $                | 0.17   |  |                              |  | 3,650,000  |         |  |  | -          |  |  |                           | -          |   |                               | 
|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                |  | 19-Mar-14  |  | 31-Jul-16   |  | $                | 0.17   |  |                              |  | 600,000    |         |  |  | -          |  |  |                           | -          |   |                               | 
|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                |  | 3-Nov-14   |  | 31-Dec-14   |  | US$              | 0.05   |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | (1,000,000 | ) |                               | 
|Employee Options                |  | 3-Nov-14   |  | 31-Dec-14   |  | US$              | 0.10   |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | (1,000,000 | ) |                               | 
|Employee Options                |  | 3-Nov-14   |  | 31-Dec-14   |  | US$              | 0.15   |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 3-Nov-14   |  | 30-Jun-16   |  | US$              | 0.1875 |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 3-Nov-14   |  | 31-Dec-14   |  | US$              | 0.17   |  |                              |  | -          |         |  |  | 250,000    |  |  |                           | -          |   |                               | 
|Director Options                |  | 26-Nov-14  |  | 26-Nov-17   |  | $                | 0.19   |  |                              |  | -          |         |  |  | 7,500,000  |  |  |                           | -          |   |                               | 
|Director Options                |  | 26-Nov-14  |  | 26-Nov-16   |  | $                | 0.19   |  |                              |  | -          |         |  |  | 5,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 26-Nov-14  |  | 31-Jan-17   |  | $                | 0.196  |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 19-Dec-14  |  | 20-Dec-16   |  | $                | 0.2    |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 13-Apr-15  |  | 31-Dec-16   |  | $                | 0.17   |  |                              |  | -          |         |  |  | 700,000    |  |  |                           | -          |   |                               | 
|Employee Options                |  | 1-May-15   |  | 31-Dec-16   |  | $                | 0.075  |  |                              |  | -          |         |  |  | 750,000    |  |  |                           | -          |   |                               | 
|Employee Options                |  | 26-Jun-15  |  | 30-Jun-16   |  | US$              | 0.05   |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 26-Jun-15  |  | 30-Jun-16   |  | US$              | 0.075  |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 22-Dec-14  |  | 31-Dec-15   |  | US$              | 0.15   |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 22-Dec-14  |  | 30-Jun-15   |  | US$              | 0.1875 |  |                              |  | -          |         |  |  | 1,000,000  |  |  |                           | -          |   |                               | 
|Employee Options                |  | 22-Dec-14  |  | 30-Jun-16   |  | US$              | 0.17   |  |                              |  | -          |         |  |  | 250,000    |  |  |                           | -          |   |                               | 
|                                |  |            |  |             |  |                  |        |  |                              |  | 39,900,000 |         |  |  | 24,450,000 |  |  |                           | (2,750,000 | ) |                               | 
|Weighted average exercise price |  |            |  |             |  |                  | $0.22  |  |                              |  | $0.18      |         |  |  | $0.09      |  |  |                           | $0.21      |   |                               | 



* Exercise price is in AUD otherwise it is in USD if it is indicated
as US$.



** All above options are exercisable at the end of the financial
year 2015 apart from 7,500,000 director options issued on 26 November 2014, with exercise price $0.19 and expiry date on 26 November
2017.



|2014  Class                     |  | Grant Date |  | Expiry Date |  | Exercise Price |       |  | Balance at start of the year |  |            | Granted |  |  | Exercised  |  |  | Expired/ forfeited/ other |             |   | Balance at 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  |  |  |                           | -           |   |                            | 
|                                |  |            |  |             |  |                |       |  |                              |  | 51,800,000 |         |  |  | 29,350,000 |  |  |                           | (28,450,000 | ) |                            | 
|Weighted average exercise price |  |            |  |             |  |                | $0.09 |  |                              |  | $0.28      |         |  |  | $0.10      |  |  |                           | $0.11       |   |                            | 



F-37


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 20: Share Based payments (continued)



|2013  Class                     |  | Grant Date |  | Expiry Date |  | Exercise Price |       |  | Balance at start of the year |  |            | Granted |  |  | Exercised  |  |  | Expired/ forfeited/ other |       |  | Balance at 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 |  |                              |  | $0.04      |         |  |  |            |  |  |                           | $0.20 |  |                            | 



The weighted average exercise price of options issued to key
management personnel and employees that are outstanding at the end of the financial year was $0.21 (2014: $0.22; 2013: $0.04).



The weighted average remaining contractual life of options outstanding
at the end of the financial year was 12.11 months (2014: 20.11 months; 2013: 15.02 months).



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





|2015  Class                     |  | Grant Date |  | Expiry Date |  | Exercise Price (per ADS in US$) |         |  | Balance at start of the year |  |         | Granted |  |  | Exercised |  |  | Expired/ forfeited/ other |         |  | Balance at end of the year * | 
|------------------------------- |  | ---------- |  | ----------- |  | ------------------------------- | ------- |  | ---------------------------- |  | ------- | ------- |  |  | --------- |  |  | ------------------------- | ------- |  | ---------------------------- | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 2.00    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 3.00    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 2.00    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 4.00    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-15   |  | $                               | 6.00    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 7.50    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 3.70    |  |                              |  | 5,000   |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 1.85    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-15   |  | $                               | 4.07    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-16   |  | $                               | 6.29    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 7.50    |  |                              |  | 41,750  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 6.29    |  |                              |  | 25,000  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 6.66    |  |                              |  | 2,500   |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 7.50    |  |                              |  | 11,250  |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 6.80    |  |                              |  | 6,250   |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 5.55    |  |                              |  | 7,500   |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 5.55    |  |                              |  | 7,500   |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-15   |  | $                               | 5.55    |  |                              |  | 7,500   |         |  |  | -         |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 23-Dec-14  |  | 1-Nov-17    |  | $                               | 5.05    |  |                              |  | -       |         |  |  | 6,666     |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 23-Dec-14  |  | 1-Nov-18    |  | $                               | 5.05    |  |                              |  | -       |         |  |  | 6,667     |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 23-Dec-14  |  | 1-Nov-19    |  | $                               | 5.05    |  |                              |  | -       |         |  |  | 6,667     |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 23-Dec-14  |  | 3-Dec-16    |  | $                               | 4.58    |  |                              |  | -       |         |  |  | 7,500     |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 23-Dec-14  |  | 3-Nov-17    |  | $                               | 4.58    |  |                              |  | -       |         |  |  | 7,500     |  |  |                           | -       |  |                              | 
|ADS Options                     |  | 23-Dec-14  |  | 03-Nov-18   |  | $                               | 4.58    |  |                              |  | -       |         |  |  | 7,500     |  |  |                           | -       |  |                              | 
|                                |  |            |  |             |  |                                 |         |  |                              |  | 339,250 |         |  |  | 42,500    |  |  |                           | -       |  |                              | 
|Weighted average exercise price |  |            |  |             |  |                                 | US$4.94 |  |                              |  | US$4.80 |         |  |  | -         |  |  |                           | US$4.31 |  |                              | 





* All above ADS options are exercisable
at the end of the financial year 2015 apart from 15,000 ADS options issued on 23 December 2014, with exercise price $4.58, expiry
date on 3 November 2017 and 3 November 2018 respectively.





F-38


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 20: Share Based payments (continued)



|2014  Class                     |  | Grant Date |  | Expiry Date |  | Exercise Price (per ADS in US$) |      | Balance at
 start of
 the year |  | Granted |   | Exercised |  | Expired/ forfeited/ other |          | Balance at end of the year
|------------------------------- |  | ---------- |  | ----------- |  | ------------------------------- | ---- | ------------------------------ |  | ------- | - | --------- |  | ------------------------- | -------- | --------------------------
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 2.00 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 3.00 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 2.00 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 4.00 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-15   |  | $                               | 6.00 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 7.50 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 3.70 |                                |  |         | — |           |  |                           | 5,000    |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 1.85 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-15   |  | $                               | 4.07 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-16   |  | $                               | 6.29 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 7.50 |                                |  |         | — |           |  |                           | 41,750   |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 6.29 |                                |  |         | — |           |  |                           | 25,000   |                           
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 6.66 |                                |  |         | — |           |  |                           | 2,500    |                           
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 7.50 |                                |  |         | — |           |  |                           | 11,250   |                           
|ADS Options                     |  | 30-Jun-14  |  | 30-Jun-16   |  | $                               | 6.80 |                                |  |         | — |           |  |                           | 6,250    |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 5.55 |                                |  |         | — |           |  |                           | 7,500    |                           
|ADS Options                     |  | 30-Jun-14  |  | 31-Dec-14   |  | $                               | 5.55 |                                |  |         | — |           |  |                           | 7,500    |                           
|ADS 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 exercise price of
ADS options issued to key management personnel and employees that are outstanding at the end of the financial year was US$6.04
(2014: US$4.94).



The weighted average remaining contractual
life of options outstanding at the end of the financial year was 14.38 months (2014: 17.06).



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 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 | 
|---------- |  | ----------- |  | ------------ | ---- |  | -------------- | - | ----- | ------------------------- |  | - | ------------------- |  |  | ----------------------- | ----- | - | ------------------ | 
|26-Nov-14  |  | 31-Jan-17   |  |              | 2.18 |  |                | $ | 0.196 |                           |  | $ | 0.14                |  |  |                         | 78.53 | % |                    | 
|26-Nov-14  |  | 26-Nov-17   |  |              | 3    |  |                | $ | 0.19  |                           |  | $ | 0.14                |  |  |                         | 79.56 | % |                    | 
|26-Nov-14  |  | 26-Nov-16   |  |              | 2    |  |                | $ | 0.19  |                           |  | $ | 0.14                |  |  |                         | 79.09 | % |                    | 
|26-Nov-14  |  | 26-Nov-16   |  |              | 2    |  |                | $ | 0.19  |                           |  | $ | 0.14                |  |  |                         | 79.09 | % |                    | 
|13-Apr-15  |  | 31-Dec-16   |  |              | 1.72 |  |                | $ | 0.17  |                           |  | $ | 0.17                |  |  |                         | 49.45 | % |                    | 
|1-May-15   |  | 31-Dec-16   |  |              | 1.67 |  |                | $ | 0.075 |                           |  | $ | 0.17                |  |  |                         | 48.02 | % |                    | 



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 22). Shareholder approval was obtained for the grants of options to directors on 17 November 2014.





F-39


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 20: Share Based payments (continued)



Shares issued as compensation



Performance Shares



No Performance Shares were issued in 2015.



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   |            |  |            |           |         |  |           |            |  |           |  |   | Exercise    |  |  |            |      |  | Risk Free |  |       |          | 
|----------- | ---------- |  | ---------- | --------- | ------- |  | --------- | ---------- |  | --------- |  | - | ----------- |  |  | ---------- | ---- |  | --------- |  | ----- | -------- | 
|Performance |            |  |            |           | Vesting |  |           | Expiry     |  | Issue     |  |   | (Variation) |  |  | Expected   |      |  | interest  |  |       | Tradable | 
|Shares      |            |  | Grant Date |           | date    |  |           | (End) date |  | Price     |  |   | Price       |  |  | volatility |      |  | rate      |  |       | 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.



American Depositary Shares



In current fiscal year, the following American
Depositary Shares were issued to eligible participants of the US Omnibus Plan equity incentive scheme approved by shareholders
on 5 May 2014.



1)	11,826 ADSs (equivalent to 473,040
ordinary shares) for nil consideration were issued on 13 April 2015

2)	6,000 ADSs (equivalent to 240,000
ordinary shares) for nil consideration were issued on 1 May 2015



No shares were issued to key management
personnel or employees as compensation during 2014 year.



For details of shares and options issued
in lieu of services rendered, refer to issued capital disclosures (Note 17) and non-cash investing and financing activities disclosures
(Note 21(b)).



Note 21: Cash flow information



|                                                                           |  | Consolidated |            
|-------------------------------------------------------------------------- |  | ------------ | -----------
|                                                                           |  | 2015         |            
|                                                                           |  | $            |            
|                                                                           |  |              |            
|(a) Reconciliation of cash flow from operations with loss after income tax |  |              |            
|                                                                           |  |              |            
|Loss after income tax expense for the year                                 |  |              | (20,294,006
|                                                                           |  |              |            
|Adjustments for:                                                           |  |              |            
|                                                                           |  |              |            
|Depreciation and amortisation                                              |  |              | 1,017,657  
|Foreign exchange differences                                               |  |              | (429,080   
|Goodwill impairment expense                                                |  |              | -          
|Share based payments and related costs                                     |  |              | 1,929,265  
|Fair value gain on deferred contingent consideration                       |  |              | -          
|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                                       |  |              | -          
|Income from Sale of Business                                               |  |              | -          
|Changes in operating assets and liabilities:                               |  |              |            
|(Increase)/Decrease in receivables                                         |  |              | 523,579    
|Increase/(Decrease) in other assets                                        |  |              | (815,687   
|Increase / (Decrease) in payables                                          |  |              | 5,651      
|Increase / (Decrease) in provisions                                        |  |              | 144,338    
|(Decrease)/Increase in current tax                                         |  |              | (740,880   
|(Increase)/Decrease in deferred tax assets                                 |  |              | 427,719    
|(Decrease)/ increase in deferred tax liability                             |  |              | -          
|Net cash used in operating activities                                      |  |              | (18,231,444



(b) Non-cash investing and financing activities



On 1 October 2014, MOKO completed a business combination by
acquiring 80% of the ordinary shares as a controlling interest in Tagroom Pty Ltd (‘Tagroom’). In addition to cash,
the fair value consideration was settled via $200,000 in MOKO ordinary shares (1,242,263 shares) priced at the volume-weighted
average price of shares traded on the ASX over the 5 trading days up to and including the day before completion on 12 December
2014.



Refer Note 14 for further details of these business
combinations.





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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2015



Note 21: Cash flow information (continued)











During the year, the Company issued the
following ADS (American Depositary Shares) for nil consideration, where one ADS = 40 Ordinary shares. They were issued to eligible
participants of the US Omnibus Plan equity incentive scheme approved by shareholders on 5 May 2014.



|Date          |  | Details                            |  | ADS Price
(US$) |      |  | Number of ADS |  |       | Fair Value Amount US$ | 
|------------- |  | ---------------------------------- |  | --------------- | ---- |  | ------------- |  | ----- | --------------------- | 
|13 April 2015 |  | Share issued under US Omnibus Plan |  | $               | 4.88 |  |               |  | 7,000 |                       | 
|13 April 2015 |  | Share issued under US Omnibus Plan |  | $               | 5.18 |  |               |  | 4,826 |                       | 
|1 May 2015    |  | Share issued under US Omnibus Plan |  | $               | 5.35 |  |               |  | 6,000 |                       | 



These transactions ae not reflected in the statement of cash
flows.



Note 22: Key management personnel disclosures



(a) Directors



The following persons were directors of MOKO Social Media Limited
during the financial year:



|Ian Rodwell      | - | Chief Executive Officer and Managing Director        
|---------------- | - | -----------------------------------------------------
|Greg McCann      | - | Non-Executive Chairman                               
|Mark Hauser      | - | Non-Executive Director                               
|Jeff White       | - | Non-Executive Director (appointed 1st February, 2015)
|Leo Hindery Jr   | - | Non-Executive Director (appointed 1st April, 2015)   
|Peter Yates      | - | Non-Executive Director (resigned 17th November, 2014)
|Johannes De Back | - | Non-Executive Director (resigned 13th April, 2015)   



(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 |          
|----------------------------------------- |  | ------------ | ---------
|                                          |  | 2015         |          
|                                          |  | $            |          
|Short-term employee benefits              |  |              | 740,628  
|Post-employment benefits                  |  |              | 14,496   
|Share based payments - Performance shares |  |              | 759,577  
|Share based payments - Options            |  |              | 505,470  
|                                          |  |              | 2,020,171



F-41


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NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2015



Note 22: Key management personnel disclosures (continued)



|Ordinary shares |  | Balance
    at start of the year/on appointment |             |  | Granted
    as Remuneration during
    the year |  |   | Other changes during the year |  |  | Balance at end of the year | 
|--------------- |  | ----------------------------------------------- | ----------- |  | ----------------------------------------------- |  | - | ----------------------------- |  |  | -------------------------- | 
|                |  |                                                 |             |  |                                                 |  |   |                               |  |  |                            | 
|2015            |  |                                                 |             |  |                                                 |  |   |                               |  |  |                            | 
|G McCann        |  |                                                 | 13,444,444  |  |                                                 |  | - |                               |  |  | 2,500,000                  | 
|I Rodwell       |  |                                                 | 5,707,917   |  |                                                 |  | - |                               |  |  | 325,000                    | 
|J De Back(1)    |  |                                                 | 40,297,710  |  |                                                 |  | - |                               |  |  | 1,454,546                  | 
|P Yates(2)      |  |                                                 | 48,163,402  |  |                                                 |  | - |                               |  |  | -                          | 
|M Hauser        |  |                                                 | -           |  |                                                 |  | - |                               |  |  | 4,910,000                  | 
|J White (3)     |  |                                                 | 100,000     |  |                                                 |  | - |                               |  |  | 480,000                    | 
|L Hindery       |  |                                                 | -           |  |                                                 |  | - |                               |  |  | -                          | 
|                |  |                                                 | 107,713,473 |  |                                                 |  |   |                               |  |  | 9,669,546                  | 
|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                  | 



| | (1) | Closing balance represents ordinary shares held on resignation
(13 April 2015)
| | --- | ------------------------------------------------------------------------------

| | (2) | Closing balance represents ordinary shares held on resignation
(17 November 2014)
| | --- | ---------------------------------------------------------------------------------

| | (3) | Opening balance represents ordinary shares held on appointment
(1 February 2015)
| | --- | --------------------------------------------------------------------------------



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.



|                |  |              |            |  |              |  |            |            |  |  |             |   |  | Forfeited/ |             |   |                | 
|--------------- |  | ------------ | ---------- |  | ------------ |  | ---------- | ---------- |  |  | ----------- | - |  | ---------- | ----------- | - | -------------- | 
|                |  |              |            |  | Granted      |  |            |            |  |  |             |   |  | Other      |             |   |                | 
|                |  | Balance at   |            |  | during the   |  |            | Exercised  |  |  | Lapsed      |   |  | changes    |             |   | Balance at     | 
|Options over    |  | the start of |            |  | year as      |  |            | during the |  |  | during the  |   |  | during the |             |   | the end of the | 
|ordinary shares |  | the year     |            |  | compensation |  |            | year       |  |  | year        |   |  | year       |             |   | year           | 
|                |  |              |            |  |              |  |            |            |  |  |             |   |  |            |             |   |                | 
|2015            |  |              |            |  |              |  |            |            |  |  |             |   |  |            |             |   |                | 
|G McCann        |  |              | 12,500,000 |  |              |  | -          |            |  |  | (2,500,000  | ) |  |            | -           |   |                | 
|I Rodwell       |  |              | 10,325,000 |  |              |  | 7,500,000  |            |  |  | (325,000    | ) |  |            | -           |   |                | 
|J De Back(1)    |  |              | 16,400,000 |  |              |  | 2,000,000  |            |  |  | -           |   |  |            | -           |   |                | 
|P Yates(2)      |  |              | 7,164,555  |  |              |  | -          |            |  |  | -           |   |  |            | -           |   |                | 
|M Hauser        |  |              | 8,000,000  |  |              |  | 3,000,000  |            |  |  | (4,910,000  | ) |  |            | -           |   |                | 
|J White (3)     |  |              | 480,000    |  |              |  | -          |            |  |  | (480,000    | ) |  |            | -           |   |                | 
|L Hindery       |  |              | -          |  |              |  | -          |            |  |  | -           |   |  |            | -           |   |                | 
|                |  |              | 54,869,555 |  |              |  | 12,500,000 |            |  |  | (8,215,000  | ) |  |            | -           |   |                | 
|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        |  |              | 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) | Closing balance represents ordinary share options held
on resignation (13 April 2015)
| | --- | -------------------------------------------------------------------------------------

| | (2) | Closing balance represents ordinary share options held
on resignation (17 November 2014)
| | --- | ----------------------------------------------------------------------------------------

| | (3) | Opening balance represents ordinary share options held
on appointment (1 February 2015)
| | --- | ---------------------------------------------------------------------------------------

| | (4) | Opening balance represents ordinary share options held
on appointment (1 February 2014)
| | --- | ---------------------------------------------------------------------------------------





F-42


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015





Note 23: Related party
transactions



(a) Parent entity



MOKO Social Media Limited is the parent entity.



(b) Subsidiaries



Interests in subsidiaries are set out in note 25.



(c) Key management personnel



Disclosures relating to key management personnel are set out
in note 22.



(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:



|                  |  |                                   |  | Number of |           |  | Issue Price |  |      | Amount | 
|----------------- |  | --------------------------------- |  | --------- | --------- |  | ----------- |  | ---- | ------ | 
|Date              |  | Details                           |  | shares    |           |  | $           |  |      | $      | 
|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 |        | 





On 1 October 2014, MOKO completed a business combination
by acquiring 80% of the ordinary shares as a controlling interest in Tagroom Pty Ltd (‘Tagroom’). 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 fair value consideration was settled via $200,000 in cash and $200,000 (1,242,263
shares) in MOKO ordinary shares priced at the volume-weighted average price of shares traded on the ASX over the 5 trading days
up to and including the day before completion on 12 December 2014.



|                                           |  | Consolidated |       
|------------------------------------------ |  | ------------ | ------
|                                           |  | 2015         |       
|                                           |  | $            |       
|Amounts recognised
    as an expense       |  |              |       
|                                           |  |              |       
|Company secretarial and
    accounting (1) |  |              | 56,670
|Office
    rent (2)                        |  |              | 20,047
|Total                                      |  |              | 76,717



| | (1) | Andrew Bursill, the former Company Secretary who resigned on 31 January 2015, is also an associate
of Franks & Associates Pty Ltd which provided accounting and Company secretarial services to MOKO Social Media Limited. The
contract between MOKO Social Media Limited and Franks & Associates was based on normal commercial terms.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Greg McCann, Non-Executive Chairman, is an associate of Consortio Pty Limited (“Consortio”)
who leases office space in Sydney to MOKO. The lease agreement between MOKO and Consortio is based on normal commercial terms.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-43


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2015



Note 23: 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 25. 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 |           
|-------------------------------- |  | ------- | ----------
|                                 |  | 2015    |           
|                                 |  | $       |           
|Non-Current                      |  |         |           
|Loans to subsidiaries:           |  |         |           
|                                 |  |         |           
|MOKO.mobi Inc                    |  |         | 12,197,944
|Deals I Love (Australia) Pty Ltd |  |         | 994,584   
|Tagroom Pty Ltd                  |  |         | 280,686   
|All Night Media
    Limited      |  |         | -         
|Total                            |  |         | 13,473,214



No dividends were received from the subsidiaries in the 2015,
2014 or 2013 financial year.



Terms and conditions



All transactions were made on normal commercial terms and conditions
and at market rates.



Note 24: Parent entity information



Set out below is the supplementary information about the parent
entity.



|                                                           |  | Parent |            
|---------------------------------------------------------- |  | ------ | -----------
|                                                           |  | 2015   |            
|Statement of profit or loss and other comprehensive income |  | $      |            
|Loss after income tax                                      |  |        | (6,004,302 
|                                                           |  |        |            
|Total comprehensive income                                 |  |        | (6,004,302 
|                                                           |  |        |            
|Statement of financial position                            |  |        |            
|Total current assets                                       |  |        | 6,766,544  
|                                                           |  |        |            
|Total assets                                               |  |        | 26,864,720 
|                                                           |  |        |            
|Total current liabilities                                  |  |        | 1,639,624  
|                                                           |  |        |            
|Total liabilities                                          |  |        | 1,685,154  
|                                                           |  |        |            
|Equity                                                     |  |        |            
|Issued capital                                             |  |        | 58,214,371 
|Reserves                                                   |  |        | 10,246,474 
|Accumulated losses                                         |  |        | (43,281,279
|                                                           |  |        |            
|Total equity                                               |  |        | 25,179,566 



F-44


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2015



Note 24: Parent entity information (continued)



Contingent liabilities



The parent entity had no contingent liabilities as at 30 June
2015 and 30 June 2014.



Capital commitments - Property, plant and equipment



The parent entity had no capital commitments for property,
plant and equipment as at 30 June 2015 and 30 June 2014.



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.
| | - | -------------------------------------------------------------------------------------------------------



Guarantees entered into by the parent entity in relation to
the debts of its subsidiaries



The parent entity and some of its subsidiaries are party to
a deed of cross guarantee under which each company guarantees the debts of the others. No deficiencies of assets exist in any of
these subsidiaries.



Note 25: 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 |  | 2015            |    
|Moko Mobi Inc           |  | United States of America     |  |                 | 100
|Moko Door Foundation    |  | 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:



|Name                                 |  | Country
    of 
    incorporation |  | Parent
         Ownership interest |    |   | Non-controlling
     Ownership interest | 
|------------------------------------ |  | --------------------------------- |  | ---------------------------------- | -- | - | --------------------------------------- | 
|Deals I Love (Australia) Pty Ltd (1) |  | Australia                         |  |                                    | 51 | % |                                         | 
|Tagroom Pty Ltd (2)                  |  | Australia                         |  |                                    | 80 | % |                                         | 



| | (1) | The Non-controlling Interest holds 49% of the voting rights of Deals I Love (Australia) Pty Ltd.
| | --- | ------------------------------------------------------------------------------------------------

| | (2) | The Non-controlling Interest holds 20% of the voting rights of Tagroom Pty Ltd.
| | --- | -------------------------------------------------------------------------------



F-45


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 25: Subsidiaries (continued)



Summarised financial information



Summarised financial information of the subsidiaries with non-controlling
interests that are material to the Consolidated Entity are set out below:



|Tagroom Pty Ltd                                                       |  |      |         
|--------------------------------------------------------------------- |  | ---- | --------
|                                                                      |  | 2015 |         
|                                                                      |  | $    |         
|Summarised statement of financial position                            |  |      |         
|Current assets                                                        |  |      | 26,926  
|Non-current assets                                                    |  |      | 7,160   
|Total assets                                                          |  |      | 34,086  
|                                                                      |  |      |         
|Current liabilities                                                   |  |      | 640,914 
|Non-current liabilities                                               |  |      | -       
|Total liabilities                                                     |  |      | 640,914 
|Net assets                                                            |  |      | (606,828
|                                                                      |  |      |         
|Summarised statement of profit or loss and other comprehensive income |  |      |         
|Revenue                                                               |  |      | 43,735  
|Expenses                                                              |  |      | (710,992
|                                                                      |  |      |         
|Profit before income tax                                              |  |      | (667,257
|Income tax expense                                                    |  |      | -       
|                                                                      |  |      |         
|Profit after income tax                                               |  |      | (667,257
|Other comprehensive income                                            |  |      | -       
|                                                                      |  |      |         
|Total comprehensive income                                            |  |      | (667,257
|                                                                      |  |      |         
|Statement of cash flows                                               |  |      |         
|Net cash used in operating activities                                 |  |      | (544,370
|Net cash used in investing activities                                 |  |      | (10,246 
|Net cash provided by financing activities                             |  |      | 552,401 
|                                                                      |  |      |         
|Net (decrease) in cash and cash equivalents                           |  |      | (2,215  
|                                                                      |  |      |         
|Other financial information                                           |  |      |         
|Loss attributable to non-controlling interests                        |  |      | (133,451
|Accumulated non-controlling interests at the end of reporting period  |  |      | (133,451



F-46


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 25: Subsidiaries (continued)



|Deals I Love (Australia) Pty Ltd                                      |  |      |            |   |      | 
|--------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | 
|                                                                      |  | 2015 |            |   | 2014 | 
|                                                                      |  | $    |            |   | $    | 
|Summarised statement of financial position                            |  |      |            |   |      | 
|Current assets                                                        |  |      | 140,551    |   |      | 
|Non-current assets                                                    |  |      | 2,485      |   |      | 
|Total assets                                                          |  |      | 143,036    |   |      | 
|                                                                      |  |      |            |   |      | 
|Current liabilities                                                   |  |      | 1,266,592  |   |      | 
|Non-current liabilities                                               |  |      | -          |   |      | 
|Total liabilities                                                     |  |      | 1,266,592  |   |      | 
|Net assets                                                            |  |      | (1,123,556 | ) |      | 
|                                                                      |  |      |            |   |      | 
|Summarised statement of profit or loss and other comprehensive income |  |      |            |   |      | 
|Revenue                                                               |  |      | 1,990,291  |   |      | 
|Expenses                                                              |  |      | (2,290,837 | ) |      | 
|                                                                      |  |      |            |   |      | 
|Profit before income tax                                              |  |      | (300,546   | ) |      | 
|Income tax expense                                                    |  |      | -          |   |      | 
|                                                                      |  |      |            |   |      | 
|Profit after income tax                                               |  |      | (300,546   | ) |      | 
|                                                                      |  |      |            |   |      | 
|Other comprehensive income                                            |  |      | -          |   |      | 
|                                                                      |  |      |            |   |      | 
|Total comprehensive income                                            |  |      | (300,546   | ) |      | 
|                                                                      |  |      |            |   |      | 
|Statement of cash flows                                               |  |      |            |   |      | 
|Net cash used in operating activities                                 |  |      | (390,975   | ) |      | 
|Net cash provided by financing activities                             |  |      | 385,000    |   |      | 
|                                                                      |  |      |            |   |      | 
|Net (decrease) in cash and cash equivalents                           |  |      | (5,975     | ) |      | 
|                                                                      |  |      |            |   |      | 
|Other financial information                                           |  |      |            |   |      | 
|Loss attributable to non-controlling interests                        |  |      | (147,268   | ) |      | 
|Accumulated non-controlling interests at the end of reporting period  |  |      | (271,366   | ) |      | 



F-47


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2015



Note 26: Earnings per share



|                                                                                                              |  | 2015 |             |   | 2014 |  |             | 2013 | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- | 
|                                                                                                              |  | $    |             |   | $    |  |             | $    | 
|(a) Earnings per share from continuing operations                                                             |  |      |             |   |      |  |             |      | 
|Loss after income tax attributable to owners of MOKO Social Media Limited                                     |  |      | (20,013,288 | ) |      |  | (13,472,361 | )    | 
|Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share |  |      | 609,883,178 |   |      |  | 472,906,543 |      | 



|                         |  | 2015  |       |   | 2014  |  |       | 2013  | 
|------------------------ |  | ----- | ----- | - | ----- |  | ----- | ----- | 
|                         |  | cents |       |   | cents |  |       | cents | 
|Basic earnings per share |  |       | (3.28 | ) |       |  | (2.85 | )     | 



|                                                                                                              |  | 2015 |   |  | 2014 |  |             | 2013 | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | - |  | ---- |  | ----------- | ---- | 
|                                                                                                              |  | $    |   |  | $    |  |             | $    | 
|(b) Earnings per share from discontinued operations                                                           |  |      |   |  |      |  |             |      | 
|Loss after income tax attributable to owners of MOKO Social Media Limited                                     |  |      | - |  |      |  | -           |      | 
|Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share |  |      |   |  |      |  | 472,906,543 |      | 



|                         |  | 2015  |   |  | 2014  |  |   | 2013  | 
|------------------------ |  | ----- | - |  | ----- |  | - | ----- | 
|                         |  | cents |   |  | cents |  |   | cents | 
|Basic earnings per share |  |       | - |  |       |  | - |       | 



|                                                                                                              |  | 2015 |             |   | 2014 |  |             | 2013 | 
|------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ----------- | ---- | 
|                                                                                                              |  | $    |             |   | $    |  |             | $    | 
|(c) Earnings per share from loss                                                                              |  |      |             |   |      |  |             |      | 
|Loss after income tax attributable to owners of MOKO Social Media Limited                                     |  |      | (20,013,288 | ) |      |  | (13,472,361 | )    | 
|Weighted average number of shares used as the denominator in calculating basic and diluted earnings per share |  |      | 609,883,178 |   |      |  | 472,906,543 |      | 



|                         |  | 2015  |       |   | 2014  |  |       | 2013  | 
|------------------------ |  | ----- | ----- | - | ----- |  | ----- | ----- | 
|                         |  | cents |       |   | cents |  |       | cents | 
|Basic earnings per share |  |       | (3.28 | ) |       |  | (2.85 | )     | 



(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 27: Contingencies



There were no contingent liabilities at 30 June 2015 (2014:
$nil).



F-48


Table of Contents




NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June
2015



Note 28: Commitments



|Rental Lease             |  | Consolidated |        
|------------------------ |  | ------------ | -------
|                         |  | 2014         |        
|$                        |  | $            |        
|Within one year          |  |              | 414,406
|One and five years       |  |              | 563,305
|More than five
    years |  |              | -      
|                         |  |              | 977,711



The Consolidated Entity leases its offices in United States
of America and Australia. The US lease includes a three-year lease commitment for a New York office until November 2017 and a three-year
lease commitment for an office in Alexandria, VA until September 2017.



During the year an amount of $453,673 (2014: $198,236) was recognised
as an expense in profit or loss in respect of operating rental leases.



Note 29: Reclassification of Comparatives



The research and development tax credit received from the
Australian government for the years ended 30 June 2014 ($1,082,953) and 2013 ($1,008,231) were previously classified as an income
tax benefit. In the 2015 financial year it has been determined that a more accurate application of the relevant accounting standards
dictates that the amount of the tax credit received from the Australian government be recognised as other income.  Consequently,
the 2014 and 2013 comparative information has been accordingly reclassified.  The effect is that Other Income for 2014 and
2013 has increased by $1,082,953 and $1,008,231  respectively, and income tax benefit has decreased by the equivalent amounts.



Note 30: Events occurring after the statement of financial
position date



Option Issues



Since 30 June 2015, the following options over American Depository
Shares have been issued:

- On 18 September 2015, 20,000 options over ADSs (equivalent
to 800,000 ordinary shares) with an exercise price of US$4.00 and an expiry date of 31 July 2017; and

- On 22 September 2015, 25,000 options over ADSs (equivalent
to 1,000,000 ordinary shares) with an exercise price of US$3.00 and an expiry date of 22 September 2017.



Since 30 June 2015, the following options over American Depository
Shares have been cancelled due to vesting conditions not being met:

- On 18 September 2015, 7,500 options over ADSs (equivalent
to 300,000 ordinary shares) with an exercise price of US$4.58 and an expiry date of 3 November 2017; and

- On 18 September 2015, 7,500 options over ADSs (equivalent
to 300,000 ordinary shares) with an exercise price of US$4.58 and an expiry date of 3 November 2018.



Share Issues



On 14 July 2015, the Company filed a Form F-3 Registration Statement
with the Securities Exchange Commission for a maximum aggregate public offering of up to US $40,000,000. The Form F-3 is used by
foreign private issuers in the U.S. to register offerings of securities and can be utilised in stages over three years. This provides
MOKO with additional flexibility to approach the U.S. market for capital over the medium term. No proceeds have been received to
date.



Option Investment



On 4 September 2015, MOKO executed an amendment to the Share
Purchase Agreement dated April 24, 2015 with Big Teams LLC (“Big Teams”). Subject to the terms and conditions of the
Share Purchase Agreement and MOKO is not in default of the Agreement, the Amendment extends the option for MOKO to invest an additional
One Million Five Hundred Thousand U.S. Dollars (US$1,500,000.00) in Big Teams LLC from 1 October 2015 to 1 December 2015.



F-49


Table of Contents






NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 30: Events occurring after the statement of financial
position date (continued)



Director Appointments



On 23 September 2015, MOKO announced that Emma Waldon would
be appointed as a Non-Executive Director effective from 1 October 2015.



On 24 September 2015, MOKO announced that Diana Rhoten would
be appointed as a Non-Executive Director effective from 1 October 2015.



No other matter or circumstance has arisen since 30 June 2015
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 31: Auditor’s remuneration



|                                            |  | Consolidated |        
|------------------------------------------- |  | ------------ | -------
|                                            |  | 2015         |        
|                                            |  | $            |        
|Audit services                              |  |              |        
|Audit and review of financial reports – BDO |  |              | 335,715
|F1 review of financial reports – BDO        |  |              | 23,614 
|Tax advice - BDO                            |  |              | -      
|                                            |  |              |        
|                                            |  |              | 359,329



Note 32: 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-50









NOTES TO THE FINANCIAL STATEMENTS



For the year ended 30 June 2015



Note 32: Discontinued operations (continued)



(b) Financial performance of operations disposed of during the year (2015
and 2014: Nil)





|                                                                    | 2013       |  
|------------------------------------------------------------------- | ---------- | -
|                                                                    | $          |  
|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 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      | 
|----------------------------- | --------- | 
|                              | $         | 
|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 | 





|                          | 2013      | 
|------------------------- | --------- | 
|                          | $         | 
|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       |  
|-------------------------------------------------- | ---------- | -
|                                                   | $          |  
|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-51