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AUSNET FINANCIAL SERVICES LIMITED
(formerly Namibian Copper Limited)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
Contents
Corporate Directory 2
Directors Report 3
Auditor’s Independence Declaration 30
Consolidated Statement of Profit or Loss
and Other Comprehensive Income 31
Consolidated Statement of Financial Position 32
Consolidated Statement of Changes in Equity 33
Consolidated Statement of Cash Flows 34
Notes to the Financial Statements 35
Directors’ Declaration 76
Independent Auditor’s Report 77
Shareholder Information 83
1
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
Directors Philip Re
Chairman (Appointed 19 December 2016)
Paul Niardone
Managing Director (Appointed 19 December 2016)
John Kolenda
Non Executive Director (Appointed 19 December 2016)
Adam Davey
Non Executive Director (Appointed 19 December 2016)
Ross Cotton
Non Executive Director (Appointed 20 January 2016)
Company Secretary Stuart Usher
Managing Director Paul Niardone
Registered Office Suite 1 GF, 437 Roberts Road
Subiaco WA 6008
Principal Place of Business 254 Scarborough Beach Road
Doubleview WA 6018
Solicitors Steinepreis Paganin
Level 4, Next Building
16 Milligan St
Perth WA 6000
Mills Oakley
Level 2, 225 St. Georges Terrace
Perth WA 6000
Share Registry Advanced Share Registry Services
110 Stirling Hwy
Nedlands WA 6009
Auditors Bentleys Audit & Corporate (WA) Pty Ltd
PO Box 7775
Cloisters Square
Perth WA 6850
2
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT
Your Directors present their report on Ausnet Financial Services Pty Ltd (“the Company”) formerly
Namibian Copper Limited, and its controlled entities (“the Consolidated Entity”) for the year ended 30
June 2017.
Directors
The names of Directors in office at any time during or since the end of the year are:
Philip Re (Appointed 19 December 2016)
Paul Niardone (Appointed 19 December 2016)
John Kolenda (Appointed 19 December 2016)
Adam Davey (Appointed 19 December 2016)
Ross Cotton
Neil Warburton (Resigned 19 December 2016)
Gregory Hall (Resigned 19 December 2016)
Michael Curnow (Resigned 19 December 2016)
Directors have been in office since the start of the year unless otherwise stated.
Principal Activities
The principal activity of the Consolidated Entity for the financial year was real estate and related activities.
There were no significant changes in the nature of the Consolidated Entity’s principal activities during the
financial year.
Operating Results and Financial Position
The Consolidated Entity delivered a 30 June 2017 loss after tax of $3,804,242 (2016: $1,839,173 loss).
The loss is different to that reported in the Appendix 4E lodged on 31 August 2018 as a result of
recognition of amortisation of intangibles after tax of $90,702 and provision for non-recovery of
commissions/wages of $144,468. However, included in the results was an acquisition cost of acquiring
Ausnet Financial Services Limited formerly Namibian Copper Limited (Corporate Transaction Accounting
Expense) of $1,439,297 which is a result of the reverse acquisition transaction as detailed in Note 3. If
you exclude this cost, the results of the Consolidated Entity was a loss after tax of $2,129,775.
3
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
In comparison to the prior years results, taking into account non-recurring costs, non-cash costs and costs
associated with the ASX listing and maintenance of an ASX listed entity, the results are as follows:
June June
2017 2016
$ $
Loss after income tax (3,804,242) (1,839,173)
Add back
Corporate Transaction Accounting
Expense 1,439,297 -
(2,364,945) (1,839,173)
Add back
ASX Listing related costs 355,517 -
Legal costs 106,485
Rebranding costs 57,166 -
Interest paid 96,170 -
Amortisation of intangibles 90,702 -
Provision for non recovery of commission/wages 144,468
Write-off non recoverable wages 103,698 -
ASX Head Office costs 570,723 -
(840,016) (1,839,173)
This results in a 54% improvement in operational results from a loss after tax of $1,839,173 in 2016 to a
loss of $840,016 in 2017.
The net assets of the Consolidated Entity have increased from 30 June 2016 by $3,868,794 to $2,438,314
at 30 June 2017 (2016: $(1,430,480) net liabilities).
As at 30 June 2017, the Consolidated Entity's cash and cash equivalents increased from 30 June 2016 by
$2,048,677 to $2,202,655 at 30 June 2017 (2016: $153,978).
Dividends Paid or Recommended
The directors do not recommend the payment of a dividend and no amount has been paid or declared by
way of a dividend to the date of this report.
Review of Operations
Operations Review
On December 14, 2015 Namibian Copper NL announced that it had signed a non-binding heads of
agreement to acquire 100% of Ausnet Real Estate Services Pty Ltd. The Company then proceeded to a
4
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
signed binding heads of agreement on April 19, 2016. Completion of the transaction followed certain
terms being met:
In exchange for 100% of the issued capital in Ausnet, Namibian Copper NL (“NCO”) agreed to issue
AUD$4M worth of fully paid ordinary shares in NCO at the re-quotation price of $0.03 being
133,333,333 NCO Shares. NCO shares to the shareholders of Ausnet, subject to ASX escrow
provisions (Consideration Shares). As per the Prospectus lodged September 30, 2016 the
Consideration Shares had changed to AUS$4M worth of fully paid ordinary shares in NCO at the
re-quotation price of $0.02 being 200,000,000 NCO Shares.
Issue to Ausnet shareholders AUD$4M worth of NCO Consideration Performance Shares at the
re-quotation price of $0.03 being 133,333,333 NCO Performance Shares (Performance Shares), in
the following tranches:
(i) Tranche 1; AUD$2M worth of Performance Shares (66,666,667 Consideration Performance Shares);
and
(ii) Tranche 2; AUD$2M worth of Performance Shares (66,666,667 Consideration Performance Shares).
As per the Notice of Meeting lodged June 20, 2016 for meeting held on July 20, 2016, the Consideration
Performance Shares approved to be issued was 66,666,667 Performance Shares. In addition to this,
46,666,667 Incentive Performance Shares were approved to be issued to proposed and continuing
Directors of NCO.
A Performance Share in the relvant class will convert into one share upon achievement of:
1. The Consideration Performance Shares vest upon achieving a 10% growth in the mortgage and
finance business loan book within 18 months of settlement (first milestone); and
2. The Incentive Performance Shares vest upon:
a. achieving a 10% growth in the mortgage and finance business loan book within 18 months
of settlement; and
b. achieving a 20 day volume VWAP on the ASX which equals or exceeds 3 times the re-
quotation price of $0.02, at any time within 24 months of settlement (second milestone).
Conditions precedent for the completion of the acquisition that were met included NCO obtaining all
regulatory and shareholder approvals as required:
To issue the consideration shares and performance shares;
To approve a change to its’ business from a mineral exploration company to a real estate and
financial services company;
To change the name of Namibian Copper NL to Ausnet Financial Services Limited;
NCO undertaking a 3:2 rights issue at an issue price of $0.001 per NCO share to raise $0.5M;
Each party (NCO and Ausnet) completing financial and legal due diligence on the other, and the
results of the due diligence being to the satisfaction of both parties;
NCO preparing a prospectus for a capital raising sufficient to enable NCO to be reinstated to
quotation on the ASX, lodging the prospectus with the Australian Securities and Investments
5
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Commission (ASIC) and receiving sufficient applications to meet the minimum subscription under
the prospectus; and
NCO receiving a letter from the ASX confirming that it will re-instate NCO to trading on the ASX
following compliance with Chapters 1 and 2 of the ASX Listing Rules, with the terms of the letter
acceptable to NCO and Ausnet.
NCO also agreed to issue the following options in connection with the acquisition:
50M NCO Shares and 50M listed NCO Options exercisable at $0.015 (pre-consolidation price) and
expiring 30 April 2019 in consideration for introduction and consulting services.
A capital raising of $5.8M was conducted, with the result being the maximum amount raised following a
highly oversubscribed public offering.
Subsequent to all conditions precedent being met and the capital raising concluded, the reverse
acquisition transaction (as described in note 1(b)) was concluded on December 16, 2016 and the Company
– now renamed to Ausnet Financial Services Limited – was reinstated to official ASX quotation on
December 28, 2016.
As a result of the transaction the Company changed its nature and scale, becoming a provider of real
estate and financial services including:
Real Estate Services
Mortgage Origination Services
Settlement Agent Services
Financial Planning Services
On January 30, 2017 the Company announced that it had entered into a Licence Agreement and an Option
to acquire Top Level Real Estate Pty Ltd (“Top Level”) (via its wholly owned subsidiary Ausnet Real Estate
Services Pty Ltd) as part of its planned national roll-out of its The Agency platform, a disruptive and fast
growing real estate sales and property management business.
The License Agreement allows the Company to launch The Agency on the east coast of Australia, with Top
Level licenced to operate under “The Agency” brand within NSW, QLD and VIC. Top Level has signed
agreements with an exciting team of senior real estate executives and currently has an initial 17 highly
experienced sales agents.
Pursuant to a binding option agreement (“Option Agreement”), the shareholders and convertible
noteholders of Top Level (“Vendors”) have granted Ausnet Real Estate Services Pty Ltd (“Ausnet Pty Ltd”)
an option to acquire 100% of the issued capital of Top Level on issue at settlement of the acquisition
(“Acquisition”), subject to the satisfaction or waiver of conditions precedent. John Kolenda, one of the
Company’s current directors, has an interest in one of the Vendors.
6
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
The past twelve months have been pivotal to Ausnet and we have achieved a great deal.
Most notably, we listed on the ASX on 28 December 2016 having successfully completed a reverse take-
over transaction with Namibian Copper NL (NCO) and a raise of $5.8m.
This is a truly transformative event. It has not only ensured the company was suitably capitalised to meet
its well thought out expansion objectives, within and outside of the Western Australian market where the
company was formed, but in our view, also validated the disruptive real estate model Ausnet has launched
called “The Agency”.
Within months of listing we expanded into the East Coast launching “The Agency” in Sydney, having signed
a licence agreement with Top Level Pty Ltd to use The Agency brand and IP exclusively in NSW. Top level
was formed by a group of highly respected and experienced industry Executives and Sale Representatives
that are nationally recognised, Ausnet also signed a 12-month option to buy Top Level Pty Ltd which
expires on 30 Jan 2018.
The investment market had set 2 main bench marks for Ausnet to deliver and keep delivering. These were:
1. Demonstrate revenue growth via sales and the attraction of quality sales representatives;
2. Deliver the referral rates set to the ancillary businesses being the mortgage broking business and
the settlement /conveyance business.
These targets were set at:
20% of all sales to be referred to the mortgage business (which is three times the industry
rate); and
40% of all sales to be referred to the settlement business.
These targets were set in a WA real estate market that has contracted 9% in sales turn over and 9% in
value of the average home and deemed by most experts as the worst real estate market in the country.
This decline along with the banks tightening of lending requirements also lead to the number of residential
loan applications for WA declining an average of 12.5% since March 16 quarter.
Despite this Ausnet is pleased to report very strong growth and that targets set have all been met or
exceeded with respect to our WA operations.
“The Agency” continued its stellar growth with the three main indicators of listings, settlements and gross
commissions exceeding 100% growth.
7
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
In terms of the Group the highlights are as follows:
Revenue
Revenue is up 44.7%
June 17 June 16 % change
Revenue $9.59 m $6.631m +44.7%
Commissions $6.335m $3.725m +70%
Fees $3.018m $2.858m + 6%
Total cashflow from operating activities was up 41% reducing the net cash outflow from operations from
($1.4m) in June 16 to ($0.84m) in June 17.
In comparison to the prior years results, taking into account non-recurring costs, non-cash costs and costs
associated with the ASX listing and maintenance of an ASX listed entity, the actual loss due to operations
for the year was $840k down on $1.84m previous year.
8
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
A 54% improvement in operational results despite our expansion into NSW
Net Assets
The Net Assets increased from ($1.43m) to $2.44m.
These numbers do not include the off-balance sheet market value of the loan book which is estimated to
have a market value of $4m.
The company also has no bank finance and has not leveraged on the acquired rent roll from Beaufort,
valued at approximately $2M.
The Agency
“The Agency”, is a high quality disruptive real estate brand wholly owned by Ausnet. In the past 12
months, it has seen significant growth in agent numbers, listings and settlements.
In the month of July 2017, based on independent industry numbers produced by the Real Estate Industry
of Western Australia ("REIWA"), the Agency was recognised as the Top Office by Value of Properties Sold
and Top Office by Number of Properties Sold for Perth metro sales.
1573 properties were sold in Perth during July, with the Agency selling 54 properties, with a combined
value of $ 28,652,500.
For the June quarter, the Agency sold 187 properties from a total of 5497, giving “The Agency” a market
share of 3.4%.
It is important to note that the real estate market both nationally and in WA is highly fragmented with the
leading brand in WA Ray White holding approximately 10% for Perth Metro. (Note: REIWA does not
capture private/online sales and non-members).
The Top Franchise Group, Ray White with 43 Branches/Offices sold 2086 properties for a value of
$841.4m.
9
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Overall “The Agency” Office finished 6th in the REIWA Office ranking for the year, in only its 2nd full year
of operations.
With just on 50 sales representatives The Agency sold 366 properties for $229m.
(Of which 12 sales representatives only joined in the last month and are still to be fully integrated)
As a comparison, the top office which was established 6 years ago, with 141 sales representatives sold
627 properties for $308m.
Meaning that the office that finished on top had three times the number of sales representatives and sold
only 30% more in dollar value.
Since launching “The Agency” brand in Western Australia, the company set and achieved its target of
securing +50 high quality and respected Sales Agents by 30 June 2017.
The Agency has attracted, and it believes will continue to attract, significant interest from sales
representatives wishing to join its business. As a Group, our 50 sales representatives are punching above
their weight, out selling the Real Estate Offices with larger numbers of sales representatives in July.
Securing these sales representatives, who come to the business with a strong sales capability and network
in the location in which they are based, are central to the successful expansion of the Agency model.
10
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Highlights
June 17 June 16 % increase
Listings 639 307 108%
Settlements 359 113 263%
Gross Commissions $4.71m $1.28m 145%
Referral Rates
Mortgage referrals Settlement referrals Notes
Total Settlements 359 359
Referrals 298 440 Due to both the
buyer and seller
being referred
% of settlements 83% 123%
referred
Conversion of 21% 72%
referrals
11
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Deals from our Mortgage business are also converting at a rate of 10% into Financial Planning and General
Insurance leads.
The Agency Year on Year
June 17 June 16
Revenue $5m $2m
GP $884k $341k
Expenses ($1.38m) ($1.1m)
Add backs $371k $220k
Operating deficit ($125k) ($539)
(prior to head office management fee)
In March Ausnet concluded the acquisition of Beaufort Realty. The business had 430 property
managements which has now grown to 450.
Beaufort Reality numbers for 3 months April to June 2017 were;
Sales Revenue: $ 314k
Property Management Revenue: $ 152k
Operating Profit after Tax: $ 92k
These numbers are ahead of expectation and will be incorporated into “The Agency” numbers going
forward.
Top Level
In January 2017 Ausnet entered into a Licence and Option to Acquire agreement, with Sydney based real
estate business Top Level Real Estate Pty Ltd (“Top Level”).
Not only does this agreement provide Ausnet with immediate expansion of “The Agency” on to the east
coast of Australia, but it also sees us working with some of the most highly skilled real estate professionals
in the country.
The agreement, in the view of the Board, will contribute greatly to the growth and expansion of the
business. Under the agreement with Top Level Pty Ltd Ausnet accrues a 3% license fee for the use of the
brand and IP, with an option to purchase the company for a pre-agreed consideration at any time before
31 January 2018.
12
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
As at 30th June Top Level had achieved the following numbers in only 4 months:
Agents recruited - 32
Agents confirmed not started - 45
Agents from Acquisitions - 18
Total Gross Commissions - $4.15m
Total Settlements - 97
Property Managements - 65
As reported in June, Top Level Pty Ltd completed its first acquisition, “Province” in the lower North Shore
of Sydney.
The acquisition added approximately 1,150 property managements and 18 sales representatives to the
Top Level business. This acquisition partially completed the condition precedent to the Option
Agreement, that if exercised would see Ausnet acquire the Top Level business.
It is anticipated that Top Level will sign the second acquisition that is part of the condition precedent over
the coming weeks.
After Balance Date Events
There has not been any matter or circumstances occurring subsequent to the end of the financial year
that has significantly affected, or may significantly affect, the operations of the Consolidated Entity, the
results of the operations, or the state of the affairs of the Consolidated Group in future financial years.
Future Developments, Prospects and Business Strategies
Likely developments, future prospects and business strategies of the operations of the Consolidated Entity
and the expected results of those operations have not been included in this report as the Directors believe
that the inclusion of such information would be likely to result in unreasonable prejudice to the
Consolidated Entity.
13
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Information on Directors
MR PHILIP RE
Chairman and Non- Executive Director – Appointed on 19 December 2016
Mr Philip Re has been a Director for a number of publicly listed and unlisted companies involving
transactions in property development and investment, technology, education, mining exploration and
production, and the renewable energy industry. He has been directly involved in Raising Capital, Merger
& Acquisitions, Initial Public Offers and Reverse Takeovers for various ASX listed companies and unlisted
property syndicates over many years. Mr Re is the Managing director of Regency Corporate Pty Ltd where
he provides corporate advisory services.
Interest in Shares and Options — 4,069,973 ordinary shares
Directorships held in other — Arrowhead Resources Limited, Weststar Industrial Limited and
listed entities during the past iCollege Limited
three years
MR PAUL NIARDONE
Managing Director – Appointed on 19 December 2016
Mr Niardone was the Executive Director and founder of Professional Public Relations (WA), the largest PR
and communications firm in the State until he sold the business to WPP. He has experience in marketing
and strategic planning for clients in both Government and the private sector. With a degree in Politics and
Industrial Relations and a Masters in Business Administration, he started his career in the Department of
Cabinet and Parliamentary Services.
He was appointed inaugural Manager of the Peel Region Business Enterprise Centre, and was then
appointed as the first Marketing Manager for the entire Enterprise Centre Network comprising 36 centres
throughout WA.
Mr Niardone's marketing skills were recognised by Westpac in its decision to appoint him as one of the
first Business Banking Managers in Australia without a banking background.
His career to date has provided him with a unique opportunity to gain experience, insights and contacts
in a wide range of industries at the CEO and Board level.
He has sat on the boards of a number of public and private companies and not for profit organisations.
Interest in Shares and Options — 10,463,292 ordinary shares
Directorships held in other — MinQuest Limited
listed entities during the past
three years
14
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
MR JOHN KOLENDA
Non- Executive Director – Appointed on 19 December 2016
Mr Kolenda is the co-founder and Managing Director of the Finsure Group, one of Australia's fastest
growing retail finance brokerages, writing over $1 billion in new mortgages every month across 850
brokers.
Prior to founding Aura and Finsure Group, Mr Kolenda founded X Ino, which was merged with Ray White
to form Loan Market Group. From 1994 to 2004, John worked as the General Manager of Sales &
Distribution of Aussie Home Loans, where he was responsible for the sales performance of over 700
mortgage advisors.
As Chairman of Aura Group, Mr Kolenda leads corporate strategy for the group and supports the business
through his network of strategic and institutional partners. Mr Kolenda’s leadership has given Aura Group
the ability to execute on its growth plans to date.
Mr Kolenda has significant board experience in both the public and private sector.
Interest in Shares and Options — 42,718,332 ordinary shares
Directorships held in other — Disruptive Investment Group (DVI:AX), Global Reviews and
listed entities during the past iBuyNew.com.au.
three years
MR ADAM DAVEY
Non- Executive Director – Appointed on 19 December 2016
Mr Davey is a Director, Private Clients and Institutional at Patersons Securities.
Mr Davey's expertise spans over 25 years and includes capital raising (both private and public), mergers
and acquisition, ASX listings, asset sales and purchases, transaction due diligence and director duties.
Mr Davey has been involved in significantly growing businesses in both the industrial and mining sector.
This has been achieved through holding various roles within different organisations, including Chairman,
Managing Director, Non-executive director, major shareholder or corporate adviser to the board.
Mr Davey is also the Chairman of Teen Challenge Foundation, the largest Youth Drug and Alcohol
Rehabilitation Centre in Western Australia.
Interest in Shares and Options — 617,144 ordinary shares
Directorships held in other — Ensurance Limited, EPAT Technologies Limited
listed entities during the past
three years
15
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
MR ROSS COTTON
Non- Executive Director – Appointed on 20 January 2016
Mr Cotton has extensive experience in both equity capital markets and corporate finance. As a corporate
adviser, he has been advising both public and private companies on strategy, financing, acquisitions and
corporate restructuring across the technology, industrial and resource sectors for over ten years.
Mr Cotton has raised significant capital (via both equity and debt arrangements) for a wide range of
companies in the small to mid-cap market and has a strong network of contacts in the investment industry
throughout Australia, Asia and the United States of America.
Interest in Shares and Options — 5,400,000 ordinary shares
Directorships held in other — iCollege Limited
listed entities during the past
three years
MR NEIL WARBURTON — Non-Executive Director – Appointed as Non-Executive Chairman
on 20 January 2016, Resigned 19 December 2016
MR GREGORY HALL — Director (Non-Executive) – Appointed 14 June 2013, Resigned 19
December 2016
MR MICHAEL CURNOW Director (Non-Executive) – Appointed on 12 June 2014, Resigned
19 December 2016
Company Secretary
The following person held the position of Company Secretary at the end of the financial year:
Mr Stuart Usher — (Appointed 28 December 2016)
Mr Usher is a CPA and Chartered Company Secretary with 20 year’s extensive experience in the
management and corporate affairs of public listed companies. He holds a Bachelor of Business degree and
an MBA from the University of Western Australia and has extensive experience across many industries
focusing on Corporate & Financial Management, Strategy & Planning, Mergers & Acquisitions, and
Investor Relations & Corporate Governance.
Mr Jay Richard Stephenson — (Resigned 28 December 2016)
16
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Meetings of Directors
During the financial year, the following meetings of Directors were held. Attendances by each Director
during the year were as follows:
Director’s Meetings
Eligible to attend Attended
Philip Re 4 4
Paul Niardone 4 4
John Kolenda 4 4
Adam Davey 4 4
Ross Cotton 6 5
Neil Warburton 2 2
Gregory Hall 2 2
Michael Curnow 2 2
The full board fulfils the role of remuneration, nomination and audit committees.
Indemnifying Officers or Auditor
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every
Officer of the Consolidated Entity shall be indemnified out of the property of the Company against any
liability incurred by him in his capacity as Officer, auditor or agent of the Consolidated Entity or any related
corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any
proceedings, whether civil or criminal.
17
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Options
At the date of this report, the unissued ordinary shares of Ausnet Financial Services Limited under option
are as follows:
Grant Date Date of Expiry Exercise Price Number under Option
2 September 2014 30 April 2019 $0.15 22,147,500
2 September 2014 30 April 2019 $0.15 500,000
5 September 2014 30 April 2019 $0.15 1,428,572
20 July 2016 30 April 2019 $0.15 5,000,000
19 December 2016 19 December 2019 $0.04 51,666,667
Option holders do not have any rights to participate in any issues of shares or other interests in the
company or any other entity.
There have been no options granted over unissued shares or interests of any controlled entity within the
Consolidated Entity during or since the end of the reporting period.
Proceedings on Behalf of the Consolidated Entity
No person has applied for leave of Court to bring proceedings on behalf of the Consolidated Entity or
intervene in any proceedings to which the Consolidated Entity is a party for the purpose of taking
responsibility on behalf of the Consolidated Entity for all or any part of these proceedings.
The Consolidated Entity was not a party to any such proceedings during the year.
Non-audit Services
The board of directors, in accordance with advice from the audit committee, is satisfied that the provision
of non-audit services during the year is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed
below did not compromise the external auditor’s independence for the following reasons:
(i) all non-audit services are reviewed and approved by the audit committee prior to commencement
to ensure they do not adversely affect the integrity and objectivity of the auditor; and
(ii) the nature of the services provided do not compromise the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants.
18
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
There were no non-audit services paid to the current external auditors, Bentleys Audit & Corporate (WA)
Pty Ltd, during the year ended 30 June 2017.
Auditor’s Independence Declaration
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for
the year ended 30 June 2017 has been received and can be found on page 30 of the Financial Report.
Remuneration Report – Audited
This report which forms part of the Directors’ Report, details the nature and amount about the
remuneration of the Consolidated Entity Directors and key management personnel (“KMP”).
Key Management Personnel include:
Directors
Mr Philip Re Chairman and Non-Executive Director (Appointed 19 December 2016)
Mr Paul Niardone Managing Director (Appointed 19 December 2016)
Mr John Kolenda Non-Executive Director (Appointed 19 December 2016)
Mr Adam Davey Non-Executive Director (Appointed 19 December 2016)
Mr Ross Cotton Non-Executive Director (Appointed 20 January 2016)
Mr Neil Warburton Non-Executive Director (Appointed as Non-Executive Chairman on 20
January 2016, Resigned 19 December 2016)
Mr Gregory Hall Non-Executive Director (Resigned 19 December 2016)
Mr Michael Curnow Non-Executive Director (Resigned 19 December 2016)
A. Remuneration Policy
The remuneration policy of Ausnet Financial Services Limited has been designed to align director and
management objectives with shareholder and business objectives by providing a fixed remuneration
component, and offering specific long-term incentives, based on key performance areas affecting the
Consolidated Entity’s financial results. The Board of Ausnet Financial Services Limited believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best
management and directors to run and manage the Consolidated Entity, as well as create goal congruence
between directors, executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members and senior
executives of the Consolidated Entity is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior
executives, was developed by the Board.
19
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
All remuneration paid to Directors and executives is valued at the cost to the Company and expensed.
The Board policy is to remunerate non-executive Directors at the lower end of market rates for
comparable companies for time, commitment, and responsibilities. The maximum aggregate amount of
fees that can be paid to non-executive Directors is subject to approval by shareholders at the Annual
General Meeting (AGM). Fees for non-executive Directors are not linked to the performance of the
Consolidated Entity.
B. Performance Conditions Linked to Remuneration
The Consolidated Entity seeks to establish and maintain a Ausnet Financial Services Limited Performance
Rights Plan (”Plan”) to provide ongoing incentives to any full time or part time employee, consultant or
any person nominated by the Board (including director or company secretary of the Company who holds
salaried employment with the Company on a full or part time basis) (“Eligible Participants”) of the
Company.
The Board adopted the Plan to allow Eligible Participants to be granted Performance Rights to acquire
shares in the Company.
The objective of the Plan is to provide the Company with a remuneration mechanism, through the issue
of securities in the capital of the Company, to motivate and reward the performance of Eligible
Participants in achieving specified performance milestones within a specified performance period. The
Board will ensure that the performance milestones attached to the securities issued pursuant to the Plan
are aligned with the successful growth of the Company’s business activities.
Employment Details of Members of Key Management Personnel
Mr Paul Niardone has entered into an Executive Services Agreements (ESA) with the Company to be
employed as Managing Director upon and subject to the terms and conditions of the ESA. The key terms
of this agreement are disclosed below:
(i) Remuneration
Mr Niardone will receive a salary, exclusive of superannuation, of $300,000 per year, on a total
employment cost basis, which will be reviewed annually by the Company (Salary).
Mr Niardone will not receive any further director’s fees in addition to the Salary from the
Company during such period as Mr Niardone serves as a director of the Company as determined
by the Board.
20
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
In addition, the Company may at any time during the term of the ESA pay Mr Niardone a
performance-based bonus of not less than 50% of the total employment cost over and above the
salary. In determining the extent of any performance based bonus, the Company shall take into
consideration the key performance indicators of Mr Niardone and the Company, as the Company
may set from time to time, and any other matter that it deems appropriate.
The Company shall provide to Mr Niardone, at its own cost, life insurance protection on similar
terms to the life insurance protection currently offered by Ausnet Real Estate Services Pty Ltd.
The Company will make employer superannuation contributions on behalf of Mr Niardone.
The Company will reimburse Mr Niardone for all reasonable travelling intra/interstate or
overseas, accommodation, and general expenses incurred in the performance of all duties in
connection with the business of the Company and its related bodies corporate
Mr Niardone is entitled to all leave in accordance with the National Employment Standard (NES)
and Western Australian long service leave legislation.
(ii) Termination by the Company without reason
The Company may at its sole discretion terminate employment by giving three months' written notice
and, at the end of that notice period, making a payment to Mr Niardone equal to the salary payable
over a five month period. The Company may elect to pay Mr Niardone the equivalent of the eight
months' salary and dispense with the notice period.
(iii) Termination by Mr Niardone
Mr Niardone may at his sole discretion terminate the Employment in the following manner:
if at any time the Company commits any serious or persistent breach of any of the provisions
contained in the ESA and the breach is not remedied within 28 days of receipt of written notice
from Mr Niardone to the Company to do so, by giving notice effective immediately; or
by giving three months' written notice to the Company.
On 16 August 2016, Mr Phillip Re executed a letter of appointment to become non-executive Chairman
of the Company
(i) Term
Mr Re’s service commenced on the date of completion of the acquisition of Ausnet Real Estate
Services Pty Ltd by the Company and will cease when he resigns, retires or is removed from office in
accordance with the Company’s constitution or the Corporations Act.
21
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
(ii) Fee
Mr Re will be paid a fee of $60,000 per annum for his role as a non-executive Chairman of the
Company. Any fees paid to Mr Re will in any event be subject to annual review by the Board of the
Company and approval by Shareholders (if required). The Company will reimburse Mr Re for all
reasonable expenses incurred in performing his duties.
On 16 August 2016, Adam Davey executed a letter of appointment to become a non-executive Director
of the Company.
(i) Term
Mr Davey’s service will commence on the date of completion of the acquisition of Ausnet Real Estate
Services Pty Ltd by the Company and will cease when he resigns, retires or is removed from office in
accordance with the Company’s constitution or the Corporations Act.
(ii) Fee
Mr Davey will be paid a fee of $48,000 per annum for his role as a non-executive Director of the
Company. Any fees paid to Mr Davey will in any event be subject to annual review by the Board of the
Company and approval by Shareholders (if required). The Company will reimburse Mr Davey for all
reasonable expenses incurred in performing his duties.
On 16 August 2016, John Kolenda executed a letter of appointment to become a non-executive Director
of the Company effective from Settlement.
(i) Term
Mr Kolenda’s service will commence on the date of completion of the acquisition of Ausnet Real Estate
Services Pty Ltd by the Company and will cease when he resigns, retires or is removed from office in
accordance with the Company’s constitution or the Corporations Act.
(ii) Fee
Mr Kolenda will be paid a fee of $48,000 per annum for his role as a non-executive Director of the
Company. Any fees paid to Mr Re will in any event be subject to annual review by the Board of the
Company and approval by Shareholders (if required). The Company will reimburse Mr Kolenda for all
reasonable expenses incurred in performing his duties.
22
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
The following table provides employment details of persons who were, during the financial year, members
of KMP of the Consolidated Entity. The table also illustrates the proportion of remuneration that was
performance based and the proportion of remuneration received in the form of options.
Position Held as at Contract Proportions of Elements of Proportions of Elements of Remuneration
30 June 2017 and Commencement/T Remuneration Related to Performance Not Related to Performance
any Change during ermination Date Non-salary Fixed Salary/ Fixed Salary/
the Year Cash-based Shares/ Options/ Fees – cash Fees – share
Incentives Units Rights based based Total
% % % % %
Group KMP
Philip Re Non-Executive Appointed 19 - - - 100 - 100
Chairman December 2016
Paul Niardone Managing Director Appointed 19 - - - 100 - 100
December 2016
John Kolenda Non-Executive Appointed 19 - - - 100 - 100
Director December 2016
Adam Davey Non-Executive Appointed 19 - - - 100 - 100
Director December 2016
Ross Cotton Non-Executive Appointed 20 - - - 100 - 100
Director January 2016
23
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
Performance rights
As per the Notice of Meeting lodged June 20, 2016 for meeting held on July 20, 2016, the Consideration
Performance Shares approved to be issued was 66,666,667 Performance Shares. In addition to this,
46,666,667 Incentive Performance Shares were approved to be issued to proposed and continuing
Directors of NCO.
A Performance Share in the relevant class will convert into one share upon achievement of:
1. The Consideration Performance Shares vest upon achieving a 10% growth in the mortgage and
finance business loan book within 18 months of settlement (first milestone); and
2. The Incentive Performance Shares vest upon:
a. achieving a 10% growth in the mortgage and finance business loan book within 18 months
of settlement; and
b. achieving a 20 day volume VWAP on the ASX which equals or exceeds 3 times the re-
quotation price of $0.02, at any time within 24 months of settlement (second milestone).
The following table shows how many performance shares were granted, vested and forfeited during the year.
Performance Rights Balance at end
Financial Balance at start Granted during of year Maximum value
Year granted of year the year Vested Forfeited (unvested) yet to vest*
Name No. No. No. % No. % No. $
Philip Re 2017 - 11,648,324 - - - - 11,648,324 -
Paul Niardone 2017 - 15,820,432 - - - - 15,820,432 -
John Kolenda 2017 - 22,339,445 - - - - 22,339,445 -
Adam Davey 2017 - 8,000,000 - - - - 8,000,000 -
Ross Cotton 2017 - 8,000,000 - - - - 8,000,000 -
* The maximum value of the performance shares yet to vest was estimated based on the fair value of shares granted which was
valued at nil. The minimum value of the performance shares yet to vest is nil, as the shares will be forfeited if the vesting
conditions are not met.
24
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
C. Remuneration
Details of the nature and amount of each element of the remuneration of each of the KMP of the Company
(the Directors) for the year ended 30 June 2017 are set out in the following tables:
There were no cash bonuses paid during the year and there are no set performance criteria for achieving
cash bonuses.
Remuneration Expense Details
The following table of benefits and payments represents the components of the current year and
comparative year remuneration expenses for each member of KMP of the Consolidated Entity. Such
amounts have been calculated in accordance with Australian Accounting Standards.
For the year ended 30 June 2017
Short-term benefits Post- Equity
employment
benefits
Salary Other Superannuation Share- Other Total Performance-
and fees benefits based payments based
payment
Name $ $ $ $ $ $ %
Directors:
Philip Re 51,000 - - - - 51,000 -
Paul Niardone 266,112 8,750 19,616 - 46,324 340,802 13
John Kolenda 24,000 - - - - 24,000 -
Adam Davey 24,000 - - - - 24,000 -
Ross Cotton 24,000 - - - - 24,000 -
389,112 8,750 19,616 - 46,324 463,802
For the year ended 30 June 2016
Comparative information for 2016 is not included as the accounting acquirer (Ausnet Real Estate Services
Pty Ltd) was not subject to the provisions of section 300A of the Corporations Act 2001 (Cth) during this
period.
25
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
D. Service Agreements
There are no service agreements with Key Management Personal not previously disclosed.
E. Options and Performance Rights Granted as Remuneration
For the year ended 30 June 2017
Balance at
Beg of Year Grant Details Exercised Lapsed Balance at End of Year
Issue Date No. Value No. Value No. Value No. Value
$ $ $ $
Group KMP
Philip Re - - - - - - - - - -
Paul Niardone - - - - - - - - - -
John Kolenda - - - - - - - - - -
Adam Davey - - - - - - - - - -
Ross Cotton - - - - - - - - - -
Neil Warburton* 1,445 28 Nov 2014 1,500,000 1,445 - - (1,500,000) (1,445) - -
Gregory Hall* 1,445 28 Nov 2014 1,500,000 1,445 - - (1,500,000) (1,445) - -
Michael Curnow* 1,445 28 Nov 2014 1,500,000 1,445 - - (1,500,000) (1,445) - -
4,335 4,335 - - (4,500,000) (4,335) - -
*Resigned from the position of non-executive director on 19 December 2016. Accordingly, all performance right options
previously granted were lapsed on this date.
For the year ended 30 June 2016
Comparative information for 2016 is not included as the accounting acquirer (Ausnet Real Estate Services
Pty Ltd) was not subject to the provisions of section 300A of the Corporations Act 2001 (Cth) during this
period.
26
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
F. Share Holdings Disclosures Relating to Key Management Personnel
The number of ordinary shares in the Parent Entity held during the financial year by each Director of
Ausnet Financial Services Limited and any other key management personnel, including their personally
related parties, are set out below:
2017 Balance Granted as Issued on Exercise of Other Balance
1 July 2016 Remuneration Options during the Movements 30 June 2017
during the year year
Philip Re - - - 4,069,973 4,069,973
Paul Niardone - - - 10,463,292 10,463,292
John Kolenda - - - 42,718,332 42,718,332
Adam Davey - - - 617,144 617,144
Ross Cotton 30,000,000 - - (24,600,000) 5,400,000
Neil Warburton 45,854,118 - - (45,854,118)** -
Gregory Hall 35,121,986 - - (35,121,986)** -
Michael Curnow 28,651,738 - - (28,651,738)** -
Total 139,627,842 - - (76,359,101) 63,268,741
*Other movements relate to purchase/sale and issue of shares
**Movement when resigned as Director
G. Option Holdings Disclosures Relating to Key Management Personnel
2017 Balance Granted as Exercise of Options Other Balance
1 July 2016 Remuneration during the year Movements 30 June 2017
during the year
Philip Re - - - - -
Paul Niardone - - - - -
John Kolenda - - - - -
Adam Davey - - - 142,858 142,858
Ross Cotton - - - 2,500,000 2,500,000
Neil Warburton 7,142,857 - - (7,142,857)** -
Gregory Hall 2,850,000 - - (2,850,000)** -
Michael Curnow 2,850,000 - - (2,850,000)** -
Total 12,842,857 - - (10,199,999) 2,642,858
*Other movements relate to issue of options.
**Movement when resigned as Director
27
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
Remuneration Report – Audited (Continued)
H. Other Transactions with Key Management Personnel
Some Directors or former Directors of the Consolidated Entity hold or have held positions in other
companies, where it is considered they control or significantly influence the financial or operating policies
of those entities. During the year, the following entities provided exploration, accounting and corporate
services to the Consolidated Entity. Transactions between related parties are on normal commercial terms
and conditions no more favourable than those available to other parties unless otherwise stated.
Entity Nature of transactions Key Total Transactions Payable Balance
Management
Personnel
2017 2016 2017 2016
$ $ $ $
Regency Partners Professional services Philip Re 3,190 -
Daring Investments Pty Ltd Licence fees John Kolenda 11,906 - - -
I. Loans to Directors and Executives
There are no loans at 30 June 2017 to any Directors.
Voting and Comments Made at the Company’s 2016 Annual General Meeting
At the Annual General Meeting held on 25 November 2016, the company received 12,391,821 (100%)
“Yes” votes and Nil “Against” and Abstain on its remuneration report for the 2016 financial year. The
Consolidated Entity did not employ a remuneration consultant during the year.
- END OF REMUNERATION REPORT
28
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS REPORT (Continued)
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a
resolution of the Board of Directors.
Paul Niardone
Managing Director
Dated this 29th day of September 2017
29
To The Board of Directors
Auditor’s Independence Declaration under Section 307C of the
Corporations Act 2001
As lead audit director for the audit of the financial statements of Ausnet Financial
Services Limited for the financial year ended 30 June 2017, I declare that to the best of
my knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS MARK DELAURENTIS CA
Chartered Accountants Director
Dated at Perth this 29th day of September 2017
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
June June
Note 2017 2016
$ $
Revenue from continuing operations 2 9,590,540 6,631,439
Less Expenses
Salaries & employee benefits expenses (8,439,488) (6,165,639)
Depreciation and Amortisation (125,942) (54,466)
Profit/(loss) on disposal of assets - (98,182)
Consultancy Fees (613,450) (202,045)
Advertising & Promotion expenses (214,032) (236,206)
Legal, Professional & Valuation fees (954,602) (702,653)
Rent & Outgoings (247,440) (214,358)
Other expenses (926,849) (747,062)
Share based payment (118,830) -
Impairment Costs (285,284) (54,605)
Impairment of loan to Joint Venture entity - (33,619)
Corporate transaction accounting expense 3 (1,439,297) -
Loss before income tax (3,774,674) (1,877,396)
Income tax (expense) / benefit 5 (29,568) 38,223
Loss from continuing operations (3,804,242) (1,839,173)
Other comprehensive income - -
Total comprehensive loss for the period attributable to
the members of Ausnet Financial Services Limited (3,804,242) (1,839,173)
Basic and diluted (loss) per share (cents per
share) attributable to the members of Ausnet
Financial Services Limited 4 (0.95) (1.20)
The accompanying notes form part of these financial statements
31
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note June June
2017 2016
$ $
Current Assets
Cash and cash equivalents 6 2,202,655 153,978
Trade and other receivables 7 1,451,188 1,092,550
Current tax asset 8 184,115
Total Current Assets 3,837,958 1,246,528
Non Current Assets
Property, Plant and Equipment 9 78,595 22,613
Intangible Assets 10 3,201,441 -
Deferred Tax Asset 12 - 346,821
Total Non Current Assets 3,280,036 369,434
Total Assets 7,117,994 1,615,962
Current Liabilities
Trade and Other Payables 13 4,058,364 2,060,905
Borrowings 14 6,117 449,473
Provisions 15 276,093 441,693
Total Current Liabilities 4,340,574 2,952,071
Non Current Liabilities
Deferred tax liabilities 211,433 -
Provisions 16 127,673 94,371
Total Non Current Liabilities 339,106 94,371
Total Liabilities 4,679,680 3,046,442
Net Assets/(Liabilities) 2,438,314 (1,430,480)
Equity
Contributed Equity 17 9,706,731 2,509,890
Reserves 18 476,195 -
Accumulated Losses (7,744,612) (3,940,370)
Total Equity/(Net Deficiency) 2,438,314 (1,430,480)
The accompanying notes form part of these financial statements
32
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Contributed Accumulated Reserves
CONSOLIDATED Equity Losses Total
Balance 1 July 2016 2,509,890 (3,940,370) - (1,430,480)
Loss for the year - (3,804,242) - (3,804,242)
Other comprehensive income - - - -
Total comprehensive income for the period - (3,804,242) - (3,804,242)
Transactions with equity holders in their capacity as owners:
Share Subscriptions (net of transaction costs) 7,196,841 - - 7,196,841
Options issued - - 476,195 476,195
Dividends paid to equity holders - - -
Balance 30 June 2017 9,706,731 (7,744,612) 476,195 2,438,314
Balance 1 July 2015 1,599,086 (2,101,197) - (502,111)
Loss for the year - (1,839,173) - (1,839,173)
Other comprehensive income - - - -
Total comprehensive income for the period - (1,839,173) - (1,839,173)
Transactions with equity holders in their capacity as owners:
Share Subscriptions (net of transaction costs) 910,804 - - 910,804
Dividends paid to equity holders - - -
Balance 30 June 2016 2,509,890 (3,940,370) - (1,430,480)
The accompanying notes form part of these financial statements
33
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
CONSOLIDATED STATEMENT OF CASH FLOWS
June June
Note 2017 2016
$ $
Cash flows from operating activities
Receipts from customers 8,921,689 5,958,188
Payments to suppliers and employees (9,643,275) (7,349,535)
Interest received 26,529 231
Interest paid (98,101) (35,250)
Income tax paid (50,692) -
Net cash (outflows) from operating activities 19 (843,850) (1,426,366)
Cash flows from investing activities
Payments for Property Plant and Equipment (26,898) (10,901)
Proceeds from sale of Property Plant and Equipment 10,000 4,800
Payments for intangibles (422,887) -
Net cash inflow on acquisition of Beaufort (cash held at
3(ii) (2,239,714) -
acquisition)
Net cash inflow on reverse acquisition (cash held at acquisition) 3(i) 165,082 -
Net cash (outflows) from investing activities (2,514,417) (6,101)
Cash flows from financing activities
Proceeds from issue of shares 5,800,000 869,804
Share issue costs (384,700) -
Repayments of borrowings (8,356) (11,368)
Net Proceeds from borrowings - 435,000
Net cash inflows from financing activities 5,406,944 1,293,436
Net increase/(decrease) in cash held 2,048,677 (139,031)
Cash at the beginning of financial year 153,978 293,009
Cash at the end of financial year 6 2,202,655 153,978
The accompanying notes form part of these financial statements
34
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards,
including Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. Ausnet Financial Services Limited is a for-profit
entity for the purpose of preparing the financial statements.
The financial report covers Ausnet Financial Services Limited and controlled entities (“the Consolidated Entity”).
Ausnet Financial Services Limited is a Company limited by shares, incorporated and domiciled in Australia. The
financial report is presented in Australian dollars which is the Consolidated Entity’s functional and presentation
currency.
The financial statements are presented in Australian dollars and have been prepared under the historical cost
convention. The financial statements of the Consolidated Entity also comply with the International Financial
Reporting Standards as issued by the International Accounting Standards Board.
b) Reverse Acquisition
Ausnet Financial Services Limited (formerly Namibian Copper Limited) is listed on the Australian Securities
Exchange. The Company completed the legal acquisition of Ausnet Real Estate Services Pty Ltd on 16 December
2016.
Ausnet Real Estate Services Pty Ltd (the legal subsidiary) was deemed to be the acquirer for accounting purposes
as it has obtained control over the operations of the legal acquirer Ausnet Financial Services Limited (accounting
subsidiary). Accordingly, the consolidated financial statements of Ausnet Financial Services Limited have been
prepared as a continuation of the financial statements of Ausnet Real Estate Services Pty Ltd. Ausnet Real Estate
Services Pty Ltd (as the deemed acquirer) has accounted for the acquisition of Ausnet Financial Services Limited
from 16 December 2016. The comparative information presented in the consolidated financial statements is
that of Ausnet Real Estate Services Pty Ltd.
The impact of the reverse acquisition on each of the primary statements is as follows:
(a) The consolidated statement of profit and loss and other comprehensive income:
(i) for the year ended 30 June 2017 comprises 12 months of Ausnet Real Estate Services Pty Ltd and 196
days of Ausnet Financial Services Limited; and
(ii) for the comparative period comprises 1 July 2015 to 30 June 2016 of Ausnet Real Estate Services Pty
Ltd.
(b) The consolidated statement of financial position:
(i) as at 30 June 2017 represents both Ausnet Real Estate Services Pty Ltd and Ausnet Financial Services
Limited as at that date; and
(ii) as at 30 June 2016 represents Ausnet Real Estate Services Pty Ltd as at that date.
35
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(c) The consolidated statement of changes in equity:
(i) for the year ended 30 June 2017 comprises Ausnet Real Estate Services Pty Ltd's balance at 1 July 2016,
its loss for the year and transactions with equity holders for 12 months. It also comprises Ausnet
Financial Services Limited transactions within equity for the 196 days ended 30 June 2017 and the
equity value of Ausnet Real Estate Services Pty Ltd and Ausnet Financial Services Limited at 30 June
2017. The number of shares on issue at the end of the year represent those of Ausnet Financial
Services Limited only.
(ii) for the comparative period comprises 1 July 2015 to 30 June 2016 of Ausnet Real Estate Services Pty
Ltd 's changes in equity.
(d) The consolidated statement of cash flows:
(i) for the year ended 30 June 2017 comprises the cash balance of Ausnet Real Estate Services Pty Ltd, as
at 1 July 2015, the cash transactions for the 12 months (12 months of Ausnet Real Estate Services Pty
Ltd and the period from 17 December 2016 to 30 June 2017 of Ausnet Financial Services Limited) and
the cash balances of Ausnet Real Estate Services Pty Ltd and Ausnet Financial Services Limited as at 30
June 2017.
(ii) for the comparative period comprises 1 July 2015 to 30 June 2016 of Ausnet Real Estate Services Pty
Ltd.
c) Going concern
This report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and liabilities in the normal course of business. The Consolidated Entity has
incurred a loss for the year ended 30 June 2017 of $3,804,242 (2016: loss of $1,839,173). The loss for 30 June
2017 includes one off transaction costs of $1,439,297. In addition the Consolidated Entity experienced net cash
outflows from operating activities of $843,850 (2016: cash outflows of $1,426,366) and there was a working
capital deficit of $502,616 at 30 June 2017 (2016: $1,705,543 deficit).
During the year ended 30 June 2017, the Company successful completed a re-compliance capital raising of
$5,800,000 before costs.
The ability of the Consolidated Entity to continue as a going concern is dependent on the following:
It is successful with any future capital raise plans on the back of its successful reverse takeover of NCO
and raising of $5.8m;
The Company continues to meet its current payment plans in place with the ATO or the successful
renegotiation of payment plans with the ATO;
Raising additional finance through its leverage on its rent roll assets;
Continued support from creditors and suppliers.
The Directors are confident that the Consolidated Entity will receive further funding and consider the
Consolidated Entity is a going concern, but recognise that it is dependent on the matters mentioned above and
in the financial statements.
36
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
On the basis that sufficient funding is expected to be raised to meet the Consolidated Entity’s expenditure
forecasts, the Directors consider that the Consolidated Entity remains a going concern and these financial
statements have been prepared on a going concern basis, which assumes the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. In
considering the above, the directors have reviewed the Consolidated Entity’s financial position and are of the
opinion that the use of the going concern basis of accounting is appropriate.
If the Consolidated Entity does not achieve its budgeted results and is unable to raise additional funding there
exists a material uncertainty which may cast significant doubt whether the Consolidated Entity will continue as
a going concern and therefore the Consolidated Entity may be unable to realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report.
The financial report does not contain any adjustments relating to the recoverability and classification of
recorded assets or to the amounts or classification of recorded assets or liabilities that might be necessary
should the Group not be able to continue as a going concern.
d) Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Ausnet Financial
Services Limited as at 30 June 2017 and the results of all subsidiaries for the year then ended. Ausnet Financial
Services Limited and its subsidiaries together are referred to in this financial report as the Consolidated Entity.
Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. 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.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Consolidated
Entity (refer to note 1(w)). Investments in subsidiaries are accounted for at cost in the individual financial
statements of Ausnet Financial Services Limited.
Intercompany transactions, balances and unrealised gains on transactions between Group companies 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. Non-controlling interests in the results and
37
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
equity of subsidiaries are shown separately in the consolidated Statement of Profit or Loss and Other
Comprehensive Income and Statement of Financial Position respectively.
e) Income Tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date.
Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from)
the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the period as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit
or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax deductions are available. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting
date. Their measurement also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of
the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
38
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will
occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Tax consolidation
Ausnet Real Estate Services Pty Ltd and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group (“the Group”) under the tax consolidation legislation. Each entity in the Group recognises
its own current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax losses
and tax credits, which are immediately assumed by the parent entity. The Group notified the Australian Tax
Office that it had formed an income tax consolidated group to apply from 1 July 2010. The tax consolidated
group has entered a tax sharing agreement whereby each company in the Group contributes to the income tax
payable in proportion to their contribution to the net profit before tax of the tax consolidated group.
As at the date of this report, Ausnet Financial Services Limited and Beaufort Realty Pty Ltd have not been
included in the tax consolidated group.
f) Impairment of assets
Goodwill and 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 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. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash flows from other assets or groups of assets (cash-generating
units). Non-financial assets, other than goodwill, that suffered impairment are reviewed for possible reversal
of the impairment at each reporting date.
g) Cash and cash equivalents
For Statement of Cash Flow presentation purposes, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly liquid instruments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities on the Statement of Financial Position.
39
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
h) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue is
recognised for major business activities as follows:
Settlement Fee Income – on settlement of real estate transaction.
Upfront commissions for Mortgage Origination – on approval of finance to clients and settlement of
real estate transaction.
Trail commissions – on receipt.
Real Estate Commissions – upon settlement and/or sale of property is unconditional
Training Seminars and Functions – on date function is held.
Interest Revenue – on a proportional basis taking into account the interest rates applicable to the
financial assets.
Dividend Revenue – when it is received.
All revenue is stated net of the amounts of goods and services tax (GST).
i) Goods and services tax
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
flows.
j) Property, Plant and Equipment
Plant and equipment are measured on the cost basis.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount of the property, plant and equipment and is recognised net
within other income/other expenses in profit or loss. When revalued assets are sold, any related amount
included in the revaluation reserve is transferred to retained earnings.
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. The recoverable amount is assessed on the basis of the expected
40
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
net cash flows which will be received from the assets’ employment and subsequent disposal. The expected net
cash flows have not been discounted to their present values in determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold
land, is depreciated on either a straight line basis or diminishing balance basis, whichever is considered most
appropriate, over their useful lives to the consolidated entity commencing from the time the asset is held ready
for use. Leasehold improvements are depreciated over the remaining term of the lease.
The depreciation rates used for each class of depreciable assets are:
Class of Asset Depreciation Rate
Leasehold Improvements (over term of lease)
Office furniture and fittings 10%
Office equipment 25%
Motor vehicle 25%
k) Intangible assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Consolidated Entity’s share
of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of
subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in
associates. Goodwill is not amortised but it is tested for impairment annually or more frequently if events or
changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose, identified according to operating segments.
(ii)Trail Book intangible assets
Trail book contracts and licences have a finite useful life and are carried at cost less accumulated amortisation
and impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of trail
book and licences over their estimated useful lives, which vary from 5 to 8 years.
(iii)Property Management intangible assets
The property management rights are expected to have a finite life and are therefore amortised over their useful
lives. The investment is carried at cost less accumulated amortisation and impairment losses.
41
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Amortisation is calculated using the diminishing value method to allocate the cost of the rent roll over its
estimated useful lives which is based on comparable market evidence. The amortisation rate used is 15%.
(iv)Business and domain names
Business and domain names are recognised at cost of acquisition. They have a finite useful life and are
amortised on a systematic basis based on the future economic benefits to be obtained over its useful life.
Amortisation is calculated using the diminishing value method at 10%.
l) Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees
to balance date. Employee benefits expected to be settled within one year together with benefits arising from
wages and salaries, annual leave and sick leave which will be settled after one year, have been measured at the
amounts expected to be paid when the liability is settled. Other employee benefits payable later than one year
have been measured at the amounts expected to be paid when the liability is settled.
Contributions are made by the consolidated entity to employee superannuation funds and are charged as
expenses when incurred.
m) Comparative Figures
Where required by Accounting Standards comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
n) Non Current Investments
Under AASB 139: Financial Instruments: Recognition and Measurement, financial assets are required to be
classified into four categories, which determine the accounting treatment of the item. The categories and
various treatments are:
− held to maturity, measured at amortised cost;
− held for trading, measured at fair value with unrealised gains or losses charged to the profit and
loss;
− loans and receivables, measured at amortised cost; and
− available for sale instruments, measured at fair value with unrealised gains or losses taken to
equity.
o) Critical accounting estimates and critical judgements in applying accounting policies
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the company.
42
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Key Estimate – Impairment
The Company assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Company that may be indicative of impairment triggers. Recoverable amounts of relevant assets
are reassessed using value-in-use calculations which incorporate various key assumptions. No impairment has
been recognised at the end of the reporting period.
Key Estimate – Taxation
Balances disclosed in the financial statements and the notes thereto, that are related to taxation, are based on
the best estimates of directors. These estimates take into account both the financial performance and position
of the company as they pertain to current income taxation legislation, and the directors understanding thereof.
No adjustment has been made for pending or future taxation legislation. The current income tax position
represents that directors’ best estimate, pending an assessment by the Australian Taxation Office.
Critical judgement – Recognition of trailing commission revenue & trailing commission expense
The Consolidated Entity receives trailing commissions from lenders on loans they have settled that were
originated by the Consolidated Entity. The trailing commissions are received over the life of the loans based on
the individual loan balance outstanding. The Consolidated Entity also makes trailing commission payments to
brokers based on the individual loan balance outstanding.
As disclosed in Note 1(h), revenue from trailing commission on receipt. The directors considered the detailed
criteria for the recognition of revenue from the rendering of services set out in AASB 118 ‘Revenue’, in particular
whether the recognition of revenue on the trail satisfied the probability requirements. The directors
determined that at the contract level, the Consolidated Entity cannot reliably determine the likelihood of that
individual remaining with the Consolidated Entity or the period that they will continue for, resulting in revenue
only being recognised upon receipt.
Trailing commission expenditure is recognised on the same basis as trailing commission revenue and is
recognised upon receipt of trailing commission revenue.
p) Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to the profit or loss on a
straight-line basis over the period of the lease.
q) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less
provision for doubtful debts. Trade receivables are due for settlement within no more than 30 days. Marketing
allowances and upfront commissions paid to employees and agents are recovered against future sales
commissions received by the employee or agent.
43
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Collectability of trade and other receivables are reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off. A provision for doubtful debts is established 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 provision 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.
r) Trade payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end
of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
s) Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the Consolidated
Entity has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are
not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the end of the reporting period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
t) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any differences between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest
method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until
the draw down occurs. To the extent that there is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period
of the facility to which it relates.
44
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
u) Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
v) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the
reporting date.
w) Business combinations
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or businesses under common control, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair
values of the assets transferred, the liabilities incurred and the equity interests issued by the Consolidated
Entity. The consideration transferred also includes the fair value of any contingent consideration arrangement
and the fair value of any pre-existing equity interest in the subsidiary. Acquisition–related costs are expensed
as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Consolidated Entity recognises any non-controlling interest in the
acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net
identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Consolidated
Entity’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been
reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier
under comparable terms and conditions.
45
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
x) Financial Risk Management
The Consolidated Entity’s activities expose it to a variety of financial risks: market risk (including interest rate
risk), credit risk and liquidity risk. The Consolidated Entity’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Consolidated Entity.
Risk management is carried out by the full Board of Directors as the Consolidated Entity believes that it is crucial
for all board members to be involved in this process. The Chairman, with the assistance of senior management
as required, has responsibility for identifying, assessing, treating and monitoring risks and reporting to the Board
on risk management.
(a) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Consolidated Entity’s income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return.
Currency risk
The Consolidated Entity does not have any foreign currency exposures.
Interest rate risk
The Consolidated Entity are exposed to movements in market interest rates on cash and cash equivalents.
The Consolidated Entity policy is to monitor the interest rate yield curve out to 120 days to ensure a balance
is maintained between the liquidity of cash assets and the interest rate return.
Other market price risk
The Consolidated Entity does not carry any equity price risk and does not enter into commodity contracts.
(b) Credit risk
Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Consolidated Entity’s
receivables from customers and investment securities.
The maximum exposure to credit risk at balance date is the carrying amount (net of provision for
impairment) of those assets as disclosed in the statement of financial position and notes to the financial
statements. The only significant concentration of credit risk for the Consolidated Entity is the cash and cash
equivalents held with financial institutions. All material deposits are held with the major Australian banks
and any loans made to external parties are secured under contracts and charges over relevant assets, for
which the Board evaluate credit risk to be minimal.
46
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(c) Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they
fall due. The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Consolidated Entity’s reputation.
The Consolidated Entity manages liquidity risk by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities.
The financial liabilities of the Consolidated Entity are confined to trade and other payables as disclosed in the
Statement of Financial Position. All trade and other payables are non-interest bearing and due within 12 months
of the reporting date.
y) Adoption of new and revised standards
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. The adoption of these Accounting Standards and Interpretations did not have any
significant impact on the financial performance or position of the Consolidated Entity during the financial year.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
New Accounting Standards for Application in Future Periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with
an assessment of the potential impact of such pronouncements on the Group when adopted in future periods,
are discussed below:
AASB 9 : Financial Instruments and associated Amending Standards (applicable to annual reporting periods
beginning on or after 1 January 2018).
The Standard will be applicable retrospectively and includes revised requirements for the classification and
measurement of financial instruments, revised recognition and derecognition requirements for financial
instruments and simplified requirements for hedge accounting.
The key changes that may affect the Consolidated Entity on initial application include certain simplifications
to the classification of financial assets, simplifications to the accounting of embedded derivatives, upfront
accounting for expected credit loss, and the irrevocable election to recognise gains and losses on
investments in equity instruments that are not held for trading in other comprehensive income. Based on
preliminary analysis the directors anticipate that the adoption of AASB 9 is unlikely to have a material
impact on the Consolidated Entity’s financial instruments.
47
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
AASB 15 : Revenue from Contracts with Customers (applicable to annual reporting periods beginning on
or after 1 January 2018,).
When effective, this Standard will replace the current accounting requirements applicable to revenue with
a single, principles-based model. Apart from a limited number of exceptions, including leases, the new
revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges
between entities in the same line of business to facilitate sales to customers and potential customers.
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 the goods or services. To achieve this objective, AASB 15 provides the following
five-step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in
each prior period presented per AASB 108 : Accounting Policies, Changes in Accounting Estimates and
Errors (subject to certain practical expedients in AASB 15 ); or recognise the cumulative effect of
retrospective application to incomplete contracts on the date of initial application. There are also enhanced
disclosure requirements regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Consolidated
Entity's financial statements, it is impracticable at this stage to provide a reasonable estimate of such
impact.
AASB 16 : Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB
117 : Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that
eliminates the requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard are as follows:
- recognition of a right-of-use asset and liability for all leases (excluding short-term leases with less
than 12 months of tenure and leases relating to low-value assets);
- depreciation of right-of-use assets in line with AASB 116 : Property, Plant and Equipment in profit
or loss and unwinding of the liability in principal and interest components;
- inclusion of variable lease payments that depend on an index or a rate in the initial measurement
of the lease liability using the index or rate at the commencement date;
- application of a practical expedient to permit a lessee to elect not to separate non-lease
components and instead account for all components as a lease; and
- inclusion of additional disclosure requirements.
48
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to
comparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as an
adjustment to opening equity on the date of initial application.
Although the directors anticipate that the adoption of AASB 16 will impact the Consolidated Entity 's
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
NOTE 2: REVENUE
Consolidated Entity
June June
2017 2016
$ $
Revenue from continuing operations:
Commissions 6,335,430 3,725,292
Fees 3,018,512 2,858,453
Management fees 173,526 36,000
Interest received 24,764 232
Other income 38,308 11,462
Total Revenue 9,590,540 6,631,439
NOTE 3: BUSINESS COMBINATION
(i) REVERSE ACQUISTION
On 16 December 2016, Ausnet Financial Services Limited (formerly Namibian Copper Limited acquired 100% of the
ordinary share capital and voting rights in Ausnet Real Estate Services Pty Ltd as detailed in the prospectus and
supplementary prospectus announced by the Company.
Under AASB 3 Business Combinations (AASB 3) this is treated as a 'reverse acquisition', whereby the accounting
acquirer is deemed to be Ausnet Real Estate Services Pty Ltd and Ausnet Financial Services Limited is deemed to be
the accounting acquiree. Refer to the effect upon the basis of preparation at Note 1(b).
(a) Acquisition Consideration
As consideration for the issued capital of Ausnet Real Estate Services Pty Ltd, Ausnet Financial Services Limited issued
200,000,000 post consolidation shares to the shareholders of Ausnet Real Estate Services Pty Ltd at $0.02 and
66,666,667 performance shares for a total consideration of $4,000,000. No cash was paid as part of the acquisition
consideration.
49
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(b) Fair value of consideration transferred
Under the principles of AASB 3, the transaction between Ausnet Financial Services Limited and Ausnet Real Estate
Services Pty Ltd is treated as a reverse acquisition. As such, the assets and liabilities of the legal subsidiary (the
accounting acquirer), being Ausnet Real Estate Services Pty Ltd, are measured at their pre-combination carrying
amounts. The assets and liabilities of the legal parent (accounting acquiree), being Ausnet Financial Services Limited
are measured at fair value on the date of acquisition.
The consideration in a reverse acquisition is deemed to have been incurred by the legal subsidiary (Ausnet Real
Estate Services Pty Ltd) in the form of equity instruments issued to the shareholders of the legal parent entity (Ausnet
Financial Services Limited). The acquisition-date fair value of the consideration transferred has been determined by
reference to the fair value of the number of shares the legal subsidiary (Ausnet Real Estate Services Pty Ltd) would
have issued to the legal parent entity Ausnet Financial Services Limited to obtain the same ownership interest in the
combined entity. Therefore the deemed fair value of the acquisition of Ausnet Financial Services Limited (Accounting
Subsidiary) was determined to be 87,793,034 shares on issue in Ausnet Financial Services Limited at $0.02 for a total
value of $1,755,861.
(c) Goodwill
Goodwill is calculated as the difference between the fair value of consideration transferred less the fair value of the
identified net assets of the legal parent, being Ausnet Financial Services Limited. Details of the transaction are as
follows:
Fair Value
$
Fair value of consideration transferred 1,755,861
Fair value of assets and liabilities held at acquisition date:
Cash 165,082
Trade and other receivables 185,049
Other current assets 7,660
Trade and other payables (20,407)
Borrowings (20,820)
Fair value of identifiable assets and liabilities assumed 316,564
Goodwill (Corporate transaction accounting expense) 1,439,297
The goodwill calculated above represents goodwill in Ausnet Financial Services Limited; however this has not been
recognised. Instead the deemed fair value of the interest in Ausnet Real Estate Services Pty Ltd issued to existing
Ausnet Financial Services Limited shareholders to effect the combination (the consideration for the acquisition of
the public shell company) was recognised as an expense in the consolidated statement profit or loss and
comprehensive income. This expense has been presented as a "Corporate transaction accounting expense" on the
face of the consolidated statement profit or loss and comprehensive income.
50
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(ii) ACQUISTION OF BEAUFORT REALTY PTY LTD
On 31 March 2017, Ausnet Real Estate Services Pty Ltd acquired 100% of the ordinary share capital and voting rights
in Beaufort Realty Pty Ltd.
(a) Acquisition Consideration
As consideration for the issued capital of Beaufort Realty Pty Ltd, Ausnet Real Estate Services Pty Ltd paid $3,286,576
of which $466,011 was a retention payment due and payable 12 months from acquisition date .
(b) Fair value of consideration transferred
Under the principles of AASB 3, the assets and liabilities of Beaufort Realty Pty Ltd are measured at fair value on the
date of acquisition.
(c) Goodwill
Goodwill is calculated as the difference between the fair value of consideration transferred less the fair value of the
identified net assets of Beaufort Realty Pty Ltd. Details of the transaction are as follows:
Fair Value
$
Consideration
Provisional payment 2,896,829
Completion payment refund (76,264)
2,820,565
Retention payment 466,011
3,286,576
Fair value of assets and liabilities held at acquisition date:
Cash 657,115
Trade and other receivables 248,277
Other current assets 17,893
Current tax asset 133,423
Plant and equipment 42,574
Intangible asset – rent roll 2,109,104
Trade and other payables (123,711)
Deferred tax liability (580,004)
Fair value of identifiable assets and liabilities assumed 2,504,671
Goodwill 781,905
51
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(iii) NET CASHFLOW ON ACQUISITION OF
SUBSIDIARIES
June
2017
$
Beaufort Realty Pty Ltd
Consideration paid in cash 2,896,829
Less: cash and cash equivalent balances acquired (657,115)
Net cash paid 2,239,714
Reverse Acquisition
Consideration paid in cash -
Less: cash and cash equivalent balances acquired (165,082)
Net cash acquired (165,082)
(iv) IMPACT OF ACQUISITION ON THE RESULTS OF THE GROUP
Included in the loss for the year is $92,000 profit attributable to the additional business generated by Beaufort Realty
Pty Ltd. Revenue for the year includes $468,000 in respect to Beaufort Realty Pty Ltd.
NOTE 4: EARNINGS PER SHARE (EPS)
Consolidated Entity
June June
2017 2016
$ $
Loss for the year 3,804,242 1,839,173
Weighted average number of ordinary
shares outstanding during the year
used in the calculation of basic EPS 400,711,191 152,884,694
Basic and diluted EPS (cents per share) (0.95) (1.20)
52
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
At the end of the year ended 30 June 2017, the Consolidated Entity has 80,742,739 unissued shares under options
(2016: Nil). The Consolidated Entity does not report diluted earnings per share on annual losses generated by the
Consolidated Entity. During year ended 30 June 2017 the Consolidated Entity's unissued shares under option were
anti-dilutive.
As noted in Note 1(b), the equity structure in these consolidated financial statements following the reverse
acquisition reflects the equity structure of Ausnet Financial Services Limited, being the legal acquirer (the accounting
acquiree), including the equity interests issued by Ausnet Financial Services Limited to effect the business
combination.
1. In calculating the weighted average number of ordinary shares outstanding (the denominator of the EPS
calculation) for the year ended 30 June 2017 the number of ordinary shares outstanding for the year ended
30 June 2017 shall be the actual number of ordinary shares of Ausnet Financial Services Limited outstanding
during that period.
2. The basic EPS for the year ended 30 June 2016 shall be calculated by dividing:
(a) the profit or loss of Ausnet Real Estate Services Pty Ltd attributable to ordinary shareholders in
each of those periods by Ausnet Real Estate Services Pty Ltd 's historical weighted average number
of ordinary shares outstanding multiplied by the exchange ratio established in the acquisition
agreement.
NOTE 5: INCOME TAX EXPENSE / (BENEFIT)
Consolidated Entity
June June
2017 2016
$ $
(a) Income tax expense / (benefit)
Current tax - -
Under/(over) provision – prior year - (2,892)
Deferred tax 29,568 (35,331)
29,568 (38,223)
(b) The Prima facie tax on operating
profit/ (loss) at 27.5% (2016: 30%) (1,038,035) (563,219)
Tax effect of permanent differences:
Non Deductible Expenses 474,442 17,579
Income tax benefit in respect of current year losses 593,161 510,309
Income tax expense/(benefit) 29,568 (35,331)
Under/(over) provision for income tax in prior year - (2,892)
Income tax expense/(benefit) 29,568 (38,223)
53
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(c) Tax losses
Unused tax losses for which no deferred tax asset
has been recognised 5,131,452 3,333,280
Potential tax benefit @ 27.5% (2016: 30%) 1,411,174 999,984
The benefit for tax losses will only be obtained if:
The Company and Consolidated Entity derive future assessable income of a nature and an amount sufficient
to enable the benefit from the deductions for the losses to be realised;
The Company and the Consolidated Entity continue to comply with the conditions for deductibility imposed
by Law; and
No changes in tax legislation adversely affect the ability of the Company and Consolidated Entity to realise
these benefits.
NOTE 6: CASH AND CASH EQUIVALENTS
Consolidated Entity
June June
2017 2016
$ $
Cash at bank and on hand 2,202,655 153,978
NOTE 7: TRADE AND OTHER RECEIVABLES
Trade debtors 718,847 379,517
Prepaid expenses 57,426 8,138
Commissions receivable 173,630 319,843
Recoverable commissions/wages 513,164 377,439
Deposits paid 49,169 -
Other receivables 83,420 7,613
Provision for non recovery of
(144,468) -
commissions/wages
1,451,188 1,092,550
Ageing of receivables past due not impaired
Trade receivables disclosed above include amounts that are past due at the end of the reporting period for which
the Consolidated Entity has not recognised an allowance for doubtful debts because there has not been a significant
change in credit quality and the amounts are still considered receivable. Refer Note 26(iii).
Ageing of impaired trade receivables
As at 30 June 2017, the age of impaired trade receivables of $144,468 was past due +90 days (2016: Nil)
54
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8: CURRENT TAX ASSETS
Consolidated Entity
June June
2017 2016
$ $
Income tax refundable 184,115 -
184,115 -
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment – at cost 209,064 39,163
Accumulated depreciation (130,469) (16,550)
Net Book Value 78,595 22,613
Total Property Plant & Equipment 78,595 22,613
NOTE 10: INTANGIBLES
Rent Roll 2,030,013 -
Goodwill 781,905 -
Trademarks 152,000 -
Other 237,523 -
3,201,441 -
Movement reconciliation – Rent Roll
Balance at the beginning of the year - -
Acquisition of subsidiary (Note 3(ii)) 2,109,104 -
Amortisation charge (79,091)
Net Book Value at end of year 2,030,013 -
Movement reconciliation - Goodwill
Balance at the beginning of the year - -
Acquisition of subsidiary (Note 3(ii) 781,905 -
Net Book Value at end of year 781,905 -
Movement reconciliation - Trademarks
Balance at the beginning of the year - -
Additions 160,000 -
Amortisation charge (8,000) -
Net Book Value at end of year 152,000 -
55
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Consolidated Entity
June June
2017 2016
$ $
Movement reconciliation – Other intangible assets
Balance at the beginning of the year - 10,000
Additions 262,884 -
Amortisation Charge (25,361) (10,000)
Net Book Value at end of year 237,523 -
Movement reconciliation – Total
Balance at the beginning of the year - 10,000
Additions 422,884 -
Acquisition of subsidiary 2,891,009 -
Amortisation Charge (112,452) (10,000)
Net Book Value at end of year 3,201,441 -
Amortisation charge
Please refer to Note 1 k) Intangible Assets for further details
Impairment charge
Please refer to Note 1 f) Impairment of Assets for further details
NOTE 11: INVESTMENT IN CONTROLLED ENTITIES
Ownership
Name Interest
June June
2017 2016
% %
Jelina Holdings Pty Ltd 100 100
Westvalley Corporation Pty Ltd 100 100
Ausnet Asset Management Pty Ltd 100 100
Ausnet Real Estate Network Pty Ltd 100 100
Ausnet Financial Planning Services Pty Ltd 100 100
Ausnet Financial Pty Ltd 100 100
Vision Capital Management Ltd 100 100
Ausnet Property Investment Fund Pty Ltd 100 100
Ausnet Opportunity Fund 55 55
Move Property Solutions Pty Ltd 100 100
Beaufort Realty Pty Ltd 100 -
Empur Pty Ltd (i) 50 50
Namibian Resources Pty Ltd 100 100
Gazania Investments Thirty Two Pty Ltd(ii) 80 80
56
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
All the above entities are incorporated in Australia and eliminated on consolidation.
(i) The company has a 50% interest in a joint venture entity trading under the name Ausnet Property Investment
Strategies.
(ii) Invested through Namibian Resources Pty Ltd
NOTE 12: DEFERRED TAX ASSET/(LIABILITY)
Consolidated Entity
June June
2016 2015
$ $
Deferred Tax on Temporary Differences (211,433) 346,821
The balance comprises temporary differences
in relation to the following amounts recognised
in the statement of comprehensive income:
Deferred Tax Assets
Employee benefits 144,598 185,767
Accrued expenses 194,290 197,007
Investments 55,000 60,000
Total deferred tax assets 393,888 442,774
Deferred Tax Liabilities
Accrued income (47,067) (95,953)
Rent Roll (558,254) -
Total deferred tax liabilities (605,321) (95,953)
Net deferred tax assets (211,433) 346,821
Movement Reconciliation
Opening balance at 1 July 346,821 311,490
Deferred tax liability recognised in business
combination (558,254) -
Recognition of temporary differences - 35,331
(211,433) 346,821
57
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13: TRADE AND OTHER PAYABLES
Consolidated Entity
June June
2017 2016
$ $
Trade creditors 391,174 215,794
Employees’ remuneration – commissions payable 542,282 467,597
Superannuation – employees 122,045 83,158
Payroll tax 148,772 133,833
Sundry creditors and accrued expenses 265,288 188,954
GST and PAYG payables 2,122,792 971,569
Retention payable 466,011 -
4,058,364 2,060,905
NOTE 14: BORROWINGS
Current
Loans 6,377 15,666
Less: Unexpired interest (260) (1,193)
6,117 14,473
Convertible Notes (i) - 435,000
Total 6,117 449,473
(i) Convertible notes amounting to $285,000 were converted prior to share consolidation. Refer to Note 17. The
remaining $150,000 related to Notes received by Namibian Copper Limited that has now formed part of the
Consolidated Entity and is eliminated on consolidation.
NOTE 15: CURRENT PROVISIONS
Employee entitlements 276,093 441,693
NOTE 16: NON CURRENT PROVISIONS
Employee entitlements 127,673 94,371
58
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 17: CONTRIBUTED EQUITY
Consolidated Entity
June June
2017 2016
$ $
587,793,034 (2016: 109,838,870) fully paid ordinary
shares 9,706,731 2,509,890
Ordinary Shares
At the beginning of the reporting period 2,509,890 1,599,086
Convertible notes converted into shares 285,000 -
Issue of prospectus shares 5,800,000 -
Issue of shares to Ausnet Real Estate Services Pty Ltd
shareholders 1,755,861 -
Issue of shares to corporate advisor 100,000 -
Shares issued during the year for cash - 869,804
Shares issued during the year in lieu of service 100,000 41,000
Transaction costs relating to share issues (844,019) -
At reporting date 9,706,731 2,509,890
Number of Ordinary Shares
At the beginning of the reporting period 109,838,870 64,298,753
Convertible notes converted into shares 14,250,000 -
Balance before reverse acquisition 124,088,870
Elimination of existing legal acquire shares (124,088,870) -
Shares of legal acquirer at acquisition date 87,793,034 -
Issue of prospectus shares 290,000,000 -
Issue of shares to Ausnet Real Estate Services Pty Ltd
shareholders 200,000,000 -
Issue of shares to corporate advisor 5,000,000 -
Shares issued during the year for cash - 43,490,117
Shares issued during the year in lieu of service 5,000,000 2,050,000
At reporting date 587,793,034 109,838,870
As per the Notice of Meeting lodged June 20, 2016 for meeting held on July 20, 2016, the Consideration Performance
Shares approved to be issued was 66,666,667 Performance Shares. In addition to this, 46,666,667 Incentive
Performance Shares were approved to be issued to proposed and continuing Directors of NCO.
59
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
A Performance Share in the relvant class will convert into one share upon achievement of:
1. The Consideration Performance Shares vest upon achieving a 10% growth in the mortgage and finance
business loan book within 18 months of settlement (first milestone); and
2. The Incentive Performance Shares vest upon:
(a) achieving a 10% growth in the mortgage and finance business loan book within 18 months of
settlement; and
(b) achieving a 20 day volume VWAP on the ASX which equals or exceeds 3 times the re-quotation
price of $0.02, at any time within 24 months of settlement (second milestone).
If the relevant milestone is not achieved by the required date, then the total number of Performance Shares on issue
to each holder will not convert into one ordinary share in the Company.
The Directors have assessed at balance date the likelihood of these milestones being met within the vesting
period. The Consideration Performance Shares form part of the reverse acquisition calculations and the
determination of the value of the consideration has been detailed in note 3(i).
In relation to the Incentive Performance Shares, the Directors have estimated that based on current trading results
and the real estate market as a whole, there is a low probability that the second milestone in relation to the 10%
growth in the mortgage and finance business loan book of Ausnet within eighteen (18) months of Settlement will be
met within the vesting period. Therefore no value has been attributed to the Incentive Performance Shares at 30
June 2017.
NOTE 18: RESERVES
Consolidated Entity
June June
2017 2016
$ $
Options Reserve 476,195 -
June June
2017 2017
Number $
Movement
At the beginning of the reporting period 24,076,072 -
Issue of options to joint lead managers 51,666,667 457,365
Issue of options to corporate advisor 5,000,000 18,830
At reporting date 80,742,739 476,195
The options reserve is used to recognise the grant date fair value of options issued but not exercised.
60
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Valuation of Options
The options were valued using the Black & Scholes option model based on the following inputs
Options to Options to
corporate Joint lead
advisor managers
Underlying share price $0.02 $0.02
Option exercise price (post-consolidation) $0.15 $0.04
Effective date 17/12/16 17/12/16
Option expiry date 30/04/2019 16/12/2019
Share price volatility 93% 93%
Risk free rate 1.83% 1.83%
Fair value per option $0.0038 $0.0089
NOTE 19: CASHFLOW INFORMATION
Consolidated Entity
June June
2017 2016
$ $
Reconciliation of Cash Flow from Operations with Loss
after Income Tax
Loss after income tax (3,804,242) (1,839,177)
Income tax expense 29,568 -
Share based payment 118,830 -
Acquisition cost 1,439,297 -
(Profit)/Loss on sale of assets (10,000) 98,182
Depreciation expense 13,490 44,466
Amortisation expense 112,452 -
Trademark written off - 10,000
Doubtful debts expense 144,468 -
Bad debts written off 140,816 54,605
Changes in assets and liabilities:
(Increase)/Decrease in trade and other receivables (477,402) (804,927)
(Increase)/Decrease in current tax asset (184,115) 81,797
(Increase)/Decrease in deferred tax asset - (35,331)
Increase/(Decrease) in trade and other payables 1,765,285 965,754
Increase/(Decrease) in provisions (132,297) (1,735)
Cash Flow from Operations (843,850) (1,426,366)
61
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Non – Cash Financing Activities
i. On 19 May 2017, 5,000,000 fully paid ordinary shares at a price of $0.02 per share were issued in lieu of
consulting fees.
ii. Refer to Note 3 for details of business combinations.
NOTE 20: KEY MANAGEMENT PERSONNEL COMPENSATION
1. Names and positions held of Consolidated Entity key management personnel in office at any time during
the financial year are:
Philip Re (Appointed 19 December 2016) Chairman
Paul Niardone (Appointed 19 December 2016) Managing Director
John Kolenda (Appointed 19 December 2016) Non-Executive Director
Adam Davey (Appointed 19 December 2016) Non-Executive Director
Ross Cotton (Appointed 20 January 2016) Non-Executive Director
Neil Warburton (Resigned 19 December 2016) Non-Executive Director
Gregory Hall (Resigned 19 December 2016) Non-Executive Director
Michael Curnow (Resigned 19 December 2016) Non-Executive Director
Key management personnel remuneration has been included in the Remuneration Report section of the
Directors Report.
2. Key management personnel compensation
June
2017
$
Short-term employee benefits 397,862
Post-employment benefits 19,616
Share-based payments -
Other 46,324
463,802
NOTE 21: RELATED PARTY TRANSACTIONS
(a) Parent Entity
The parent entity within the Consolidated Entity is Ausnet Financial Services Limited.
(b) Subsidiaries.
Interests in subsidiaries are set out in Note 11.
(c) Key management personnel
Transactions relating to key management personnel are set out in Note 20.
62
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(d) Transactions with related parties
Some Directors or former Directors of the Consolidated Entity hold or have held positions in other companies,
where it is considered they control or significantly influence the financial or operating policies of those entities.
During the year, the following entities provided exploration, accounting and corporate services to the
Consolidated Entity. Transactions between related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
Entity Nature of transactions Key Total Transactions Payable Balance
Management
Personnel
2017 2016 2017 2016
$ $ $ $
Regency Partners Professional services Philip Re 3,190 -
Daring Investments Pty Ltd Licence fees John Kolenda 11,906 - - -
Furthermore as detailed in Note 23, the Company announced that it had entered into a Licence Agreement and
an Option to acquire Top Level Real Estate Pty Ltd (“Top Level”) (via its wholly owned subsidiary Ausnet Real
Estate Services Pty Ltd). Mr John Kolenda owns 31.65$ of Top Level on a fully diluted basis.
NOTE 22: AUDITORS REMUNERATION
June June
2017 2016
$ $
Remuneration of the auditor of the entity:
Audit or review of the financial report
– Bentleys Audit & Corporate (WA) Pty Ltd 52,350 38,000
Other - Bentleys Audit & Corporate (WA) Pty Ltd 5,000 5,000
57,350 43,000
NOTE 23: COMMITMENTS AND CONTINGENCIES
On January 30, 2017 the Company announced that it had entered into a Licence Agreement and an Option to acquire
Top Level Real Estate Pty Ltd (“Top Level”) (via its wholly owned subsidiary Ausnet Real Estate Services Pty Ltd) as
part of its planned national roll-out of its The Agency platform, a disruptive and fast growing real estate sales and
property management business.
The License Agreement allows the Company to launch The Agency on the east coast of Australia, with Top Level
licenced to operate under “The Agency” brand within NSW, QLD and VIC.
63
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Top Level has signed agreements with an exciting team of senior real estate executives and currently has an initial
17 highly experienced sales agents.
Pursuant to a binding option agreement (“Option Agreement”), the shareholders and convertible noteholders of
Top Level (“Vendors”) have granted Ausnet Real Estate Services Pty Ltd (“Ausnet Pty Ltd”) an option to acquire 100%
of the issued capital of Top Level on issue at settlement of the acquisition (“Acquisition”), subject to the satisfaction
or waiver of conditions precedent. John Kolenda, one of the Company’s current directors, has an interest in one of
the Vendors.
A summary of the key terms of the Acquisition is set out below. The Option Agreement also contains warranties and
indemnities granted by and to Ausnet Pty Ltd, among other terms.
Consideration Shares and Performance Shares
Subject to satisfaction or waiver of conditions precedent to the Acquisition (summarised in item 3 below), in
consideration for acquiring 100% of issued capital of Top Level on issue at settlement of the Acquisition, Ausnet
Pty Ltd has agreed to procure the issue by Ausnet, upon settlement, the following securities to the Vendors:
(i) 365,999,600 Shares; and
(ii) 599,996,160 Performance Shares in equal amounts of 299,998,080. Each of the Performance Shares
will convert into one Share upon satisfaction of the relevant milestone in the following table. The
Performance Share terms are subject to ASX’s approval, which approval is a condition precedent to
completion of the Acquisition.
Milestone 1 – For the 12 months to and effective at 30 June 2018:
Weighting Milestone
50% Top Level generating earnings before interest and
taxes (EBIT) of at least $7,000,000 in a financial year
(excluding earnings generated by any business or
entity acquired by Top Level subsequent to
settlement of the Acquisition but for the avoidance of
doubt including The Acquisitions (as defined below)
based on Top Level’s audited accounts for the
relevant financial year, such EBIT being calculated in
accordance with Australian accounting standards.
30% Top Level generating Gross Commission Income (GCI)
of at least $70,000,000 in a financial year (excluding
GCI generated by any business or entity acquired by
Top Level subsequent to settlement of the
Acquisition) based on Top Level’s audited accounts for
the relevant financial year.
20% Top Level employing or contracting at least 85 sales
agents on terms consistent with Ausnet’s standard
employment agreement at the execution date of the
Option Agreement.
64
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Milestone 2 - for the 12 months to and effective at 30 June 2019:
Weighting Milestone
50% Top Level generating EBIT of at least $10,000,000 in a
financial year (excluding earnings generated by any
business or entity acquired by Top Level subsequent
to settlement of the Acquisition but for the avoidance
of doubt including The Acquisitions (as defined below)
based on Top Level’s audited accounts for the
relevant financial year, such EBIT being calculated in
accordance with Australian accounting standards.
Weighting Milestone
50% Top Level generating EBIT of at least $10,000,000 in a
financial year (excluding earnings generated by any
business or entity acquired by Top Level subsequent
to settlement of the Acquisition but for the avoidance
of doubt including The Acquisitions (as defined below)
based on Top Level’s audited accounts for the
relevant financial year, such EBIT being calculated in
accordance with Australian accounting standards.
30% Top Level generating GCI of at least $80,000,000 in a
financial year (excluding GCI generated by any
business or entity acquired by Top Level subsequent
to settlement of the Acquisition) based on Top Level’s
audited accounts for the relevant financial year.
20% Top Level employing or contracting at least 100 sales
agents on terms consistent with Ausnet’s standard
employment agreement as at the execution date of
the agreement.
Option Term and Fee
Ausnet Pty Ltd’s option to acquire Top Level pursuant to the Acquisition is currently exercisable and may be
exercised at Ausnet Pty Ltd’s election at any time up until the 12 month anniversary of the execution date of
the Option Agreement (or such other date as is agreed in writing between the parties) (Option Period).
Ausnet Pty Ltd may exercise the option at any time during the Option Period by delivering to Top Level a fee of
$10 and a written notice stating that Ausnet wishes to exercise the option (Option Exercise Notice).
65
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Conditions Precedent
Following the exercise of the option, settlement of the Acquisition is conditional upon the satisfaction (or waiver
by Ausnet) of the following conditions precedent:
Ausnet Due Diligence: completion of due diligence by Ausnet Pty Ltd on Top Level to the absolute
satisfaction of Ausnet Pty Ltd;
Shareholder Approvals: the shareholders of Ausnet approving the transactions contemplated by the Option
Agreement;
Independent Expert’s Report: any independent expert’s concluding that the transaction is either fair and
reasonable or not fair but reasonable;
Completion of acquisitions by Top Level: Top Level completing the acquisition of two real estate businesses
(The Acquisitions);
Top Level Capital Raising: Top Level completing a capital raising of $1.98 million and converting all
convertible securities on issue into fully paid ordinary shares in Top Level; and
Re-compliance conditions: If ASX determines that the Acquisition requires Ausnet to re-comply with
Chapters 1 and 2 of the ASX Listing Rules, satisfaction of all of those items which must be satisfied in order
to comply with this requirement.
If the conditions precedent to completion of the Acquisition are not all fulfilled or waived by that date which is 120
days from the date of the Option Exercise Notice (or such later date as Ausnet and the Shareholders may agree) then
the Option Agreement will be at an end and the parties will be released from their obligations under the Option
Agreement (other than in respect of any breaches that occurred prior to termination).
Rent for WA
June June
2017 2016
$ $
Not longer than 1 year 450,025 -
Longer than 1 year and not longer than 5 years 2,250,126 -
Longer than 5 years - -
2,700,151 -
NOTE 24: SEGMENT REPORTING
Description of reportable segments
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors (chief operating decision makers) in assessing performance and determining the
allocation of resources.
The Consolidated Entity is managed primarily on the basis of service offerings as the diversification of the
Consolidated Entity’s operations inherently have notably different risk profiles and performance assessment criteria.
Operating segments are therefore determined on the same basis.
66
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Types of services by segment
(i) Real Estate and Property Services
This represents revenue received for provision of real estate services including selling of property, settlement
agent services and property management
(ii) Mortgage Origination Services
This represents revenue received for provision of mortgage broking services.
(iii) Other (includes financial planning, head office etc)
This represents non-reportable segments including head office, financial planning, property investments and
other services.
Basis of accounting for purposes of reporting by operating segments
a. Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision
makers with respect to operating segments, are determined in accordance with accounting policies that are
consistent with those adopted in the annual financial statements of the Consolidated Entity.
b. Intersegment transactions
An internally determined transfer price is set for all intersegment sales. This price is reset quarterly and is based
on what would be realised in the event the sale was made to an external party at arm’s length. All such
transactions are eliminated on consolidation of the Consolidated Entity’s financial statements.
Corporate charges are allocated to reporting segments based on the segments’ overall proportion of revenue
generation within the Consolidated Entity. The Board of Directors believes this is representative of likely
consumption of head office expenditure that should be used in assessing segment performance and cost
recoveries.
Intersegment loans payable and receivable are initially recognised at the consideration received/to be received
net of transaction costs. If intersegment loans receivable and payable are not on commercial terms, these are
not adjusted to fair value based on market interest rates. This policy represents a departure from that applied
to the statutory financial statements.
c. Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority
of the economic value from the asset. In most instances, segment assets are clearly identifiable on the basis of
their nature and physical location.
d. Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and
the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the
Consolidated Entity as a whole and are not allocated. Segment liabilities include trade and other payables and
certain direct borrowings.
67
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
e. Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they
are not considered part of the core operations of any segment:
- head office and corporate costs;
- net gains on disposal of available-for-sale investments;
- impairment of assets and other non-recurring items of revenue and expense;
- income tax expense;
- current and deferred tax assets and liabilities;
- other financial assets;
- intangibles assets; and
- discontinued operations.
f. Segment information
The Consolidated Entity’s operations are from Australian sources and therefore no geographical segments are
disclosed.
Assets and liabilities have not been reported on a segmented basis as the Board of Directors is provided with
consolidated information.
2017 Real Estate Mortgage Total
Property Origination Reportable Other Consolidated
Services Services Segments Segments Total
$ $ $ $ $
External revenues 6,149,904 3,203,064 9,352,968 174,500 9,527,468
Inter-segment revenues - - - 1,764,000 1,764,000
Segment revenue 6,149,904 3,203,064 9,352,968 1,938,500 11,291,468
Unallocated revenue 63,072
Eliminations (1,764,000)
Consolidated revenue 9,590,540
Segment loss before
interest, tax, depreciation (1,800,080) 363,171 (1,436,909) (91,126) (1,528,035)
and amortisation
Unallocated corporate costs (2,120,697)
EBITDA (3,648,732)
Depreciation/amortisation (119,242) (4,393) (123,635) - (123,635)
Unallocated corporate (2,307)
depn/amort
Net finance costs -
Loss before income tax (3,774,674)
68
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
2016 Real Estate Mortgage Total
Property Origination Reportable Other Consolidated
Services Services Segments Segments Total
$ $ $ $ $
External revenues 2,722,670 3,540,012 6,262,681 357,064 6,619,746
Inter-segment revenues - - - 1,248,000 1,248,000
Segment revenue 2,722,670 3,540,012 6,262,681 1,605,064 7,867,746
Unallocated revenue 11,693
Eliminations (1,248,000)
Consolidated revenue 6,631,439
Segment loss before interest, tax, (1,516,521) 521,027 (995,494) (137,905) (1,133,399)
depreciation and amortisation
Unallocated corporate costs (689,531)
EBITDA (1,822,930)
Depreciation/amortisation (20,113) (9,108) (29,221) (557) (29,778)
Unallocated corporate depn/amort (24,688)
Net finance costs -
Loss before income tax (1,877,396)
NOTE 25: AFTER BALANCE DATE EVENTS
There has not been any matter or circumstances occurring subsequent to the end of the financial year that has
significantly affected, or may significantly affect, the operations of the Consolidated Entity, the results of the
operations, or the state of the affairs of the Consolidated Group in future financial years.
NOTE 26: FINANCIAL RISK MANAGEMENT
The Consolidated Entity’s has financial instruments comprising of cash and cash equivalents, trade and other
receivables, trade and other payables.
The Consolidated Entity’s activities expose it to a variety of financial risks, including, credit risk, liquidity risk and cash
flow interest rate risk. The Consolidated Entity’s is not exposed to foreign exchange or price risk.
This note presents information about the Consolidated Entity’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. The Board of Directors has
overall responsibility for the establishment and oversight of the risk management framework. Management
monitors and manages the financial risks relating to the operations of the Consolidated Entity through regular
reviews of the risks.
69
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(i) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
(a) Cashflow and interest rate risk
The Consolidated Entity’s only interest rate risk arises from cash and cash equivalents held and the convertible notes
at fixed interest rates. Current accounts held with variable interest rates expose the Consolidated Entity to cash flow
interest rate risk and this risk is managed by regular monitoring of the fluctuations of the interest rates.
The following sets out the Consolidated Entity’s exposure to interest rate risk, including the effective weighted
average interest rate by maturity periods:
Floating Interest Fixed Interest Rate Non Interest Weight Effective
Total
Rate 1 Year or Less 1 to 5 Years Bearing Interest Rate
2017 2017 2017 2017 2017 2017
$ $ $ $ $ %
Financial Assets
Cash 2,202,655 - - - 2,202,655 1.1
Trade and other -
- - - 1,393,762 1,393,762
receivables
Total Financial Assets 2,202,655 - - 1,393,762 3,596,417
Financial Liabilities
Trade and other
- - - 4,058,364 4,058,364 -
payables
Borrowings - 6,117 - - 6,117 7.8
Total Financial Liabilities - 6,117 - 4,058,364 4,064,481
Floating Interest Fixed Interest Rate Non Interest Weight Effective
Total
Rate 1 Year or Less 1 to 5 Years Bearing Interest Rate
2016 2016 2016 2016 2016 2016
$ $ $ $ $ %
Financial Assets
Cash 153,978 - - - 153,978 0.1
Trade and other -
- - - 1,084,412 1,084,412
receivables
Total Financial Assets 153,978 - - 1,084,412 1,238,390
Financial Liabilities
Trade and other
- - - 2,060,905 2,060,905 -
payables
Borrowings - 14,473 435,000 - 449,473 7.8
Total Financial Liabilities - 14,473 435,000 2,060,905 2,510,381
70
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
The Consolidated Entity’s policy is to monitor the interest rate yield curve out to six months to ensure a balance is
maintained between the liquidity of cash assets and the interest rate return. Cash at bank and in hand earns interest
at floating rates based on daily bank deposit rates. The Consolidated Entity does not have any receivables or payables
that may be affected by interest rate risk.
Sensitivity analysis
At 30 June 2017, if interest rates had changed by -/+100 basis points from the weighted average rate for the year
with all other variables held constant, post-tax loss would have been $22,027 (2016: 1,540) lower/higher as a result
of lower/higher interest income from cash and cash equivalents and lower/higher interest expense applicable to
loans. Management have deemed a movement of 100 basis points to be an appropriate measure for this sensitivity
analysis.
(ii) Credit risk
Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from receivables from customers and cash and cash
equivalents. For the Consolidated Entity, it primarily relates to cash and cash equivalents and trade and other
receivables. All cash balances are held with recognised institutions limiting the exposure to credit risk. There are no
formal credit approval processes in place.
Exposure to credit risk
The carrying amount of the Consolidated Entity’s financial assets represents the maximum credit risk exposure. The
Consolidated Entity’s maximum exposure to credit risk at the end of the reporting period was:
The ageing of the Consolidated Entity’s trade and other receivables are as follows:
Consolidated Entity
June June
2017 2016
$ $
Not past due 873,443 579,267
Past due 0-30 days 83,379 81,205
Past due 31-90 days 258,730 145,171
Past due 90+ days 235,638 286,907
Total 1,451,189 1,092,550
Average age (days) 50 65
Financial assets that are neither past due and not impaired are as follows:-
Cash and cash equivalents 2,202,655 153,978
71
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
(iii) Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they fall due.
The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Consolidated Entity’s reputation.
The Consolidated Entity manages liquidity risk by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows.
The Consolidated Entity has no access to credit standby facilities or arrangements for further funding or borrowings
in place. The financial liabilities the Consolidated Entity had at the end of the reporting period were trade and other
payables incurred in the normal course of the business. These were non-interest bearing and were due within the
normal 30-60 days terms of creditor payments.
Maturities of financial liabilities and assets
The table below analyses the Consolidated Entity’s financial liabilities and assets into relevant maturity groupings
based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows.
Carrying
Total
Less than 6 6-12 Over 5 amount
2017 1-2 years 2-5 years contractual
months months years assets/
cash flows
(liabilities)
$ $ $ $ $ $ $
Financial
liabilities
Trade and
other payables (4,058,364) - - - - (4,058,364) (4,058,364)
Borrowings - (6,117) - - - (6,117) (6,117)
Financial assets
Trade and
other
receivables 1,451,188 - - - - 1,451,188 1,504,866
Cash and cash
equivalents 2,202,655 - - - - 2,202,655 2,202,655
Net cash
outflow (404,521) (6,117) - - - (410,638) (356,960)
72
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
Carrying
Total
Less than 6 6-12 Over 5 amount
2016 1-2 years 2-5 years contractual
months months years assets/
cash flows
(liabilities)
$ $ $ $ $ $ $
Financial
liabilities
Trade and other
payables (2,060,905) - - - - (2,060,905) (2,060,905)
Borrowings - (14,473) (435,000) (449,473) (449,473)
Financial assets
Trade and other
receivables 1,084,412 - - - - 1,084,412 1,084,412
Cash and cash
equivalents 153,978 - - - - 153,978 153,978
Net cash
outflow (822,515) (14,473) (435,000) - - (1,271,988) (1,271,988)
(iv) Fair value estimation
All financial assets and liabilities recognised in the Statement of Financial Position are recognised at amounts that
represent a reasonable approximation of fair value.
(v) Risk Management
Capital is defined as the combination of contributed equity, reserves and net debt (borrowings less cash). The Board
is responsible for monitoring and approving the capital management framework within which management
operates. The Consolidated Entity’s objective when managing capital is to safeguard its ability to continue as a going
concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders such as
employees. The Consolidated Entity focuses on interrelated financial parameters, including its gearing ratio, earnings
growth, average cosy of debt, gearing, weighted average debt maturity and borrowing capacity. These are taken
into account when the Consolidated Entity makes decisions on how to invest its capital and evaluate its existing
investments.
The capital structure of the Consolidated Entity can be changed by paying distributions to shareholders, returning
capital to shareholders, issuing new shares or selling assets.
73
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 27: PARENT ENTITY DISCLOSURES
(i) Financial Position
June June
2017 2016
$ $
Assets
Current Assets 3,265,846 604,998
Non-Current Assets - (207)
3,265,846 604,791
Liabilities
Current Liabilities 827,532 149,334
Non-Current Liabilities - -
827,532 149,334
Equity
Contributed Equity 13,359,846 16,385,215
Reserves 480,530 4,335
Accumulated Losses (11,402,062) (15,934,093)
2,438,314 455,457
(ii) Financial Performance
Profit/(loss) for the year (3,347,152) (625,774)
Other Comprehensive income - -
(3,347,152) (625,774)
(iii) Contingent Liabilities of the Parent Entity
There are no such contingencies
(iv) Commitments of the Parent Entity
June June
2017 2016
$ $
Not longer than 1 year - -
Longer than 1 year and not longer than 5 years - -
Longer than 5 years - -
- -
74
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26: CONSOLIDATED ENTITY DETAILS
The registered office of the Consolidated Entity is:
Suite 1, 437 Roberts Road
Subiaco WA 6008
The principal place of business of the Consolidated Entity is:
254 Scarborough Beach Road
Doubleview WA 6018
75
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
DIRECTORS’ DECLARATION
The directors of the company declare that:
1. The consolidated financial statements and notes set out on pages 31 to 75 are in accordance
with the Corporations Act 2001, including:
a. comply with Accounting Standards which as stated in accounting policy Note 1 to the
financial statements constitutes compliance with International Financial Reporting
Standards (IFRS); and
b. give a true and fair view of the Consolidated Entity’s financial position as at 30 June
2017 and of its performance for the year ended on that date.
2. The Chief Executive Officer and the Company Secretary have declared that:
a. the financial records of the Company for the financial year have been properly
maintained in accordance with s295A of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with Accounting
Standards; and
c. the financial statements and notes for the financial year give a true and fair view; and
3. In the directors’ opinion, there are reasonable grounds to believe that the company will be able
to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and
on behalf of the directors by:
Paul Niardone
Managing Director
Dated this 29th day of September 2017
76
Independent Auditor's Report
To the Members of Ausnet Financial Services Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ausnet Financial Services Limited (“the
Company”) and its subsidiaries (“the Group”), which comprises the consolidated
statement of financial position as at 30 June 2017, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion:
a. the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June
2017 and of its financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations
Regulations 2001.
b. the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about
whether the financial report is free from material misstatement. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance
with the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of
the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independent Auditor’s Report
To the Members of Ausnet Financial Services Limited (Continued)
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates that the Consolidated Entity incurred a net
loss after tax of $3,804,242 during the year ended 30 June 2017. As stated in Note 1(c), these events or
conditions, along with other matters as set forth in Note 1(c), indicate that a material uncertainty exists that may
cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key Audit Matter How our audit addressed the key audit matter
Accounting for Reverse Acquisition
As disclosed in note 3(i) of the Consolidated Our procedures amongst others included:
Financial statements, on the 16th of December 2016,
Ausnet Financial Services Limited (formerly Evaluation of management’s assessment of the
Namibian Copper Limited) completed the reverse combining entities to determine who obtained
acquisition of Ausnet Real Estate Services Pty Ltd control as a result of the transaction.
via the issue of shares and performance shares. Review of signed contractual agreements
This resulted in Ausnet Real Estate Services Pty Ltd relating to the acquisition and understanding the
becoming the accounting acquirer in the business key terms and conditions of the transaction;
combination although Ausnet Financial Services Assessment of the calculation of the deemed
Limited is the legal parent. consideration with underlying information inputs
including share price with the terms of the
This is a key audit matter due to the size of the acquisition agreement;
acquisition with a deemed purchase consideration of Review of acquisition date balance sheet to
$1,755,861 and complexities inherent in a reverse acquisition agreement and underlying
acquisition. supporting documentation;
Assessment of the fair value of assets and
Management has completed a process to allocate liabilities acquired to the fair value assessment
the purchase consideration to tangible assets and conducted by management.
goodwill has been recognised as corporate Review of consolidation of the combining
transaction accounting expense. This process entities in line with reverse acquisition
involved estimation and judgement of future accounting requirements.
performance of the business. We assessed the appropriateness of the
disclosures included in Notes 1(w) and 3(i) to
the financial report.
Independent Auditor’s Report
To the Members of Ausnet Financial Services Limited (Continued)
Key Audit Matter How our audit addressed the key audit matter
Accounting for Business Combination
The acquisition of Beaufort Realty as disclosed in Our procedures amongst others included:
note 3(ii) of the consolidated financial statements is
a key audit matter due to the size of the acquisition Reviewing the acquisition agreement to
(purchase consideration of $3.29m) and understand the key terms and conditions, and
complexities inherent in a business acquisition. confirming our understanding of the transaction
with management;
Management has completed a process to allocate Assessed the deemed consideration with the
the purchase consideration to tangible assets, terms of the acquisition agreement;
goodwill and separately identifiable intangible assets Reviewed acquisition date balance sheet to
including a rent roll. This process involved acquisition agreement and underlying
estimation and judgement of future performance of supporting documentation;
the business and discount rates applied to future Assessed the fair value of assets and liabilities
cash flows forecasted. acquired to the fair value assessment conducted
by management, which included an estimation
of the fair value of rent roll intangible assets
recorded at the date of acquisition.
For the rent roll intangible assets we performed
the following:
o Assess reasonableness of the factors that
used in the valuation of rent roll such as the
annualised management fees and rent roll
multiples; and
o Assess whether the rent roll multiples used
in the valuation were reasonable compared
to active market; and
o Recalculate the mathematical accuracy of
the valuation.
We assessed the appropriateness of the
disclosures included in Notes 1(w) and 3(ii) to
the financial report.
Revenue Recognition – Commission Income
A substantial amount of the Group’s revenue is Our procedures amongst others included:
derived from mortgage finance and real estate sale. Assessing the Group accounting policy for
Refer Note 2 of the consolidated financial commission revenue as set out in Note
statements for the breakdown of revenue. 1(h), for compliance with the revenue
recognition requirements of Australian
The recognition of the commission revenue is Accounting Standards (AASBs) ;
considered a key audit matter given the materiality We performed audit procedures over the
of the revenue to the overall financial statements recognition and accuracy of the revenue
and the judgement required in terms of timing of the transactions on a sample basis;
revenue recognition. Evaluating the design and operating
effectiveness of controls over the capture
and measurement of revenue transactions;
Independent Auditor’s Report
To the Members of Ausnet Financial Services Limited (Continued)
Key Audit Matter How our audit addressed the key audit matter
Performing analytical procedures on the
revenue to ensure reasonableness.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Independent Auditor’s Report
To the Members of Ausnet Financial Services Limited (Continued)
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Independent Auditor’s Report
To the Members of Ausnet Financial Services Limited (Continued)
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2017.
The directors of the Company are responsible for the preparation and presentation of the remuneration report
in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion, the Remuneration Report of Ausnet Financial Services Limited, for the year ended 30 June
2017, complies with section 300A of the Corporations Act 2001.
BENTLEYS MARK DELAURENTIS CA
Chartered Accountants Director
Dated at Perth this 29th day of September 2017
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
SHAREHOLDER INFORMATION
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public
companies only.
Shareholdings as at 27 September 2017
(a) Distribution of Shareholders
Spread of Holdings Number of Holders Number of Units % Issued Capital
1 – 1,000 122 103,965 0.02%
1,001 – 5,000 85 228,330 0.04%
5,001 – 10,000 22 197,373 0.03%
10,001 – 100,000 177 9,476,753 1.61%
100,001 – 999,999,999 428 577,786,613 98.30%
TOTAL 834 587,793,034 100%
(b) The number of shareholders held in less than marketable parcels is 279.
(c) Voting Rights
The voting rights attached to each class of equity securities are as follows:
Ordinary Shares
- Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at
the meeting or by proxy has one vote on a show of hands.
(d) 20 Largest Shareholders – Ordinary Shares as at 27 September 2017
Rank Shareholder Total Units % Issued Capital
1 FINSURE HOLDINGS PTY LTD 42,718,332 7.27
2. COAST EQUITY PTY LTD <THE COAST INVESTMENT A/C> 25,275,000 4.3
3. SEMC 2 PTY LTD <THE CHEN ASSET A/C> 21,150,000 3.6
4. RIVECK NOMINEES PTY LTD <RUTH PANETH SUPER FUND A/C> 13,571,429 2.31
5. EARL BG PTY LTD <EARL BG A/C> 12,500,000 2.13
6. TRINDIS PTY LTD 10,461,292 1.78
7. MR JOHN COLIN LOOSEMORE + MRS SUSAN MARJORY LOOSEMORE
10,000,000 1.7
<LOOSEMORE SUPER FUND A/C>
8. QUEBEC HOLDINGS PTY LTD 9,967,778 1.7
9. MURRAY DAVID JOSEPH + SANDRA LYNN JOSEPH 9,779,075 1.66
10. BEN COLLIER INVESTMENTS PTY LTD <BEN COLLIER INVESTMENTS P/L> 8,500,000 1.45
11. MAK PROPERTY GROUP PTY LTD <MAK A/C> 8,500,000 1.45
12. FRESH COMMODITY TRADERS PTY LTD <THE HOLDSWORTH S/FUND A/C> 7,000,000 1.19
13. NUTSVILLE PTY LTD <INDUST ELECTRIC CO S/F A/C> 6,783,580 1.15
14. RAYMOND GROGAN + LOLITA GROGRAN <GROGAN FAMILY SUPER A/C> 6,697,301 1.14
15. MS DEBORAH LEE WEST 6,000,000 1.02
16. MR MURRAY DAVID JOSEPH + MRS SANDRA LYNN JOSEPH <MURRAY JOSEPH
5,502,322 0.94
SMSF A/C>
17. MR JONATHAN MARTIN ADAMS 5,468,833 0.93
18. MR ALLAN GRAHAM JENZEN + MRS ELIZABETH JENZEN <AG & E JENZEN P/L NO2
5,067,811 0.86
SF A/C>
19. FURORE PTY LTD <THE O'BRIEN A/C> 5,000,000 0.85
20. TELDAR REAL ESTATE PTY LTD <MJ LAHOOD FAMILY A/C> 5,000,000 0.85
TOTAL 224,942,753 38.27
83
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
Option holdings as at 27 September 2017
(d) Distribution of Shareholders
Spread of Holdings Number of Holders Number of Units % Issued Capital
1 – 1,000 4 1,808 0.01%
1,001 – 5,000 14 42,000 0.14%
5,001 – 10,000 4 30,910 0.11%
10,001 – 100,000 24 1,254,715 4.32%
100,001 – 999,999,999 43 22,746,656 95.43%
TOTAL 91 24,076,089 100%
(e) 20 Largest Option holders –as at 27 September 2017
Rank Shareholder Total Units % Issued Capital
1 MR ROBERT JESSE HUNT 3,600,000 15.0%
2. MR NATHAN JAMES KEMEYS 2,000,000 8.3%
3. RIVECK NOMINEES PTY LTD <RUTH PANETH SUPER FUND A/C> 1,428,572 5.9%
4. BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAILCLIENT DRP> 1,065,151 4.4%
5. MR ALFREDO VARELA 1,000,000 4.2%
6. MS DEBORAH LEE WEST 1,000,000 4.2%
7. CITICORP NOMINEES PTY LIMITED 813,684 3.4%
8. VYNBEN PTY LTD <MARK HOHNEN SUPER FUND A/C> 811,801 3.4%
9. A CHAMPION INVESTMENTS PTY LTD 800,000 3.3%
10. MICHLANGE PTY LTD <WARBURTON SELF ADMIN S/F A/C> 714,286 3.0%
11. MR JOHN VIEIRA + MRS TRACEY VIEIRA <BAYVIEW RETIREMENT PLAN A/C> 714,286 3.0%
12. RIVECK NOMINEES PTY LTD 600,000 2.5%
13. GREGORACH PTY LTD 563,529 2.3%
14. FERBER HOLDINGS PTY LTD <SCOTT SUPER FUND A/C> 433,025 1.8%
15. RIVECK NOMINEES PTY LTD <RUTH PANETH SUPER A/C> 410,000 1.7%
16. FLUE HOLDINGS PTY LTD 407,993 1.7%
17. CONTINENTAL GLOBAL INVESTMENT LIMITED 390,321 1.6%
18. HAMMERHEAD HOLDINGS PTY LTD <HHH S/F A/C> 357,498 1.5%
19. MR ARTUR GILLER 350,000 1.5%
20. MR DANIEL RICHARD CHITTENDEN + MISS SANDRA KHERRAT 300,000 1.2%
TOTAL 17,760,146 73.8%
Substantial Shareholders
An extract of the Company’s register of substantial shareholders is as follows:
Number of Fully Paid
Name Ordinary Shares
FINSURE HOLDINGS PTY LTD 42,718,332
84
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
Unlisted Options
Number of Exercise Exercise date
Options Price $
5,000,000 $0.15 30-Apr 2019
51,666,667 $0.04 19-Dec-2019
The names of option holders who hold 20% or more of each class of unlisted options are as follows:
Number of Percentage
Name Options
Options expiring 30 April 2019
Exercise Price $0.15
Richmond Food Systems PTY LTD <MONTERY A/C> 2,500,000 50%
Kioraku PTY LTD <KIORAKU A/C> 2,500,000 50%
Options expiring 19 April 2019
Exercise Price $0.04
Nil
Performance Shares
A total of 46,666,667 performance shares are on issue. The holders are as follows:
Number of
Name Performance Shares
Paul Niardone 12,333,334
Philip Re 10,333,333
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
- Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting
or by proxy has one vote on a how of hands.
Performance Shares
- These shares have no voting rights.
85
AUSNET FINANCIAL SERVICES LIMITED
(FORMERLY NAMIBIAN COPPER LIMITED)
ABN 52 118 913 232
And its Controlled Entities
Annual Report
June 2017
Restricted securities
There are 44,563,622 fully paid ordinary shares subject to voluntary escrow on issue.
Use of Cash
During the reporting period, the use of cash has been consistent with the Company’s business objectives.
2. The name of the Company Secretary is Stuart Usher.
i. The address of the principal registered office in Australia is:
Suite 1 GF, 437 Roberts Road
Subiaco WA 6008
Tel: 08 6380 2555
Fax: 08 9381 1122
ii. Registers of securities are held at the following address:
Advanced Share Registry Services
150 Stirling Highway
NEDLANDS WA 6008
iii. Australian Securities Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
Australian Securities Exchange Limited.
86