Final Results

Monday 21 September 2015

Digital Globe Services, Ltd.

(the "Company", the "Group" and, together with its subsidiaries, "DGS")

Final Results for the Year Ended 30 June 2015

Digital Globe Services, Ltd. (AIM: DGS), a leading provider of online customer acquisition solutions for large, consumer-facing organisations, is pleased to report its full year results for the fiscal year ended 30 June 2015. Comparative data is for the year ended June 2014, except where indicated.

Financial Headlines

· Revenue accelerated to all time high in second-half fiscal year

o Full year revenue in line with revised market expectations to US$40.3M (FY14: $38.9M)

· Gross margin recovery in second half to deliver gross margin for the year of 32.7% (FY14: $36.7%) and $13.2M of gross profit (FY14:14.3M; FY13: $9.8M)

· Adjusted EBITDA* margin percentage returned to the double digits in the second half at 11.4%; (H12015: 3.0% giving adjusted EBITDA* margin 7.3% for the year (FY14: 14.0%)

· Adjusted EBITDA* $3.0M (FY14: $5.4M) with strong second-half recovery to $2.5M (H2 2014: 3.28M)

· Basic earnings per share: $0.02 (FY14: $0.141)

· Gross Profit margin 32.7% to US$13.185M (FY 14: 14.3M; FY13: $9.8 million)

· Balance sheet remains strong:

o Cash on hand at 30 June 2015 of US$2.2M (31 December 2014: $0.4M)

o Additional cash availability of US$1.2M from $3.0M short-term working capital revolver

o No long term debt

· Board approves approximate $1.15M dividend, at $0.041 per share to be put to shareholder approval at the Annual General Meeting, beating market expectation by 15% and resulting in trailing dividend yield of approximately 5%.

· Board approves share buyback of up to $500,000 subject to a floor of 50 pence and maximum price of 105% of the five day trailing average in accordance with the shareholder approval granted at the November 2014 Annual General Meeting.

*EBITDA is earnings before interest, taxes, depreciation and amortisation. "Adjusted EBITDA" additionally excludes bank facility and other charges, foreign exchange gains or losses, non-recurring restructuring costs and non-cash Employee Stock Option Plan Charges, warrants, legal costs associated with the EDU acquisition, non-recurring severance and other employee costs and write-back of contingent consideration. A reconciliation is provided below.

Strategic and Operational Momentum

· Operational improvement plan and profitable growth in core business and new revenues led to accelerated EBITDA and revenue growth in the second half of the year

· Customers renewed focus on subscriber acquisition and commercial services growth

o Mergers amongst the Company's three largest customers terminated in April

o Acquisition of fifth largest customer by fourth largest customer completed in May

· Investments in technology in the dgSmart system and dgsAPI platform leading to expense savings and enhanced revenues

· Expansion into online customer acquisition for commercial services in the SME market

· Bolstering of executive team with new CFO, CMO and COO

Outlook

· Confident in continued, profitable growth for the year ahead, consistent with market expectations

· Continued focus on three pillars of growth: expansion within the existing client base, extension into new geographical markets, and entrance into new industry verticals; highlights included:

o DGS selected as one of only three customer acquisition companies to be a master agent to newly formed entity from the merger of one of the largest US telco, wireless and satellite operators.

o Launch of commercial business services

o Launch of services for UK utilities operator expected in Q2 2016

For further information please contact:

Chairman and Chief Executive Review

We are pleased to report that the Group finished fiscal year 2015 stronger than the Group has ever performed. In the second half of 2015, the Group resumed its growth in revenue, gross margin and EBITDA through pursuit of its strategy of organic growth and new verticals. We continue to invest in our technology systems and processes in order to drive cost effective, online customer acquisition for our largest customers Comcast, Charter, TimeWarnerCable, AT&T and DirecTV. As a result, in the second half of FY2015 we saw Revenue growth of 19% over the first half; gross margin growth of 135% over first half, and Adjusted EBITDA growth of 400% over first half. At the half-year we stated that "we expected to maintain year over year revenue and deliver gross margin approaching that of the first half of 2014 with EBITDA margin percentage returning to the double digits." We are pleased to have met those expectations.

This fiscal year was not without its challenges. The merger activity amongst the Group's three largest customers carried on longer than anticipated before finally being terminated in April. As explained in the half-year results statement, this much longer than normal review period by the US regulators produced a stasis in spending and growth amongst our customers. In the first half of the year, we had built call centre and tech operations to support our projected growth trajectory. As the merger approvals continued to drag on, we took the necessary actions at the end of the first half to re-align our operations to lower volumes. In addition, the launch of new services such as Commercial Business Link and the dgsAPI platform with our core customers was significantly delayed due to the merger activity. The result in the first half of the fiscal year was much lower than expected EBITDA due to the higher costs built for a growing revenue base that did not materialise.

Growth within our existing core business and new verticals in the second half contributed to a strong recovery and the best half-year growth results the Company has ever delivered. The fiscal year second half returned to growth rates in the double digits; something that we and our shareholders expect. After adjusting to the headwinds from the merger activity, performance was strong, evidencing that the underlying business is sound and poised for significant future growth. We have taken the steps necessary to drive sustainable, profitable revenue growth creating value for our shareholders and stakeholders. Importantly, we continue to be recognised as a leader by our peers and partners in the rapidly growing global digital media advertising industry. The Company continues to see the Digital Advertising budgets grow within its core clients and as we increase our market share, we expect to remain a leader in providing high quality consumer relationships for our customers.

It is our privilege to work with a diverse set of colleagues across the globe. In the past two years, we have significantly bolstered the executive team, global management and technology groups. Our competitive advantage lies in our ability to quickly deploy new technology and human capital, as needed, to succeed in an ever-changing digital market place. The willingness and professionalism demonstrated by our teams is a credit to them. Our Board has proven itself to provide valuable strategic guidance and focus to growing the intrinsic value of the Group. We are grateful for the contributions of the entire team from each Board member to the first job coder on our tech team. We took some tough decisions on personnel and operations in the first half of the fiscal year, and those decisions led to a far improved second half of the fiscal year. Today, we are a more revenue diversified Group with the technology, product, skill sets, people and capabilities to deliver revenue, gross margin and EBITDA growth in fiscal year 2016 and beyond. We are at an exciting point in our growth path. In 2016, we expect that growth in the core business will continue and growth in new verticals will be an ever larger percentage of revenue.

1"Digital Globe Services, Ltd is referred to as "dgs", "dgsL" and the "Company" variously in this report whereas the "Group" refers to dgs and its subsidiaries."

Strategic Report & OUtlook

The Company has continued to focus on its three pillars of growth: growth within the core business, extension into new geographical markets, and entrance into new industry verticals.

1. Growth within the Core Business. With its existing client base, we believe the Company continues to lead its competitors in organic revenue and market share growth. Relationships with our principal clients remain strong as we continue to focus on procuring those customers with the longest recurring value to our clients. While none of our competitors are public companies, we believe that we have captured increased market share during the fiscal year, as we were able to better withstand market challenges.

During the course of the fiscal year we went from an initial alpha deployment of our Commercial Business Link service ("CBL") with Comcast to more service operators including TimeWarnerCable, Charter Communications and other operators. The CBL service permits an operator to use our platform to submit a lead for an enterprise customer into our CBL platform and another operator who services that geography to purchase that lead. While the roll-out was delayed by the merger activity amongst those three entities, this business services lead platform is embedded into the future growth of business services by the large cable and telco operators.

In late fiscal 2014 we began deploying our SaaS integration platform, dgsAPI, which permits regional and local dealers to sell services on behalf of our Clients. We have incorporated key capabilities of dgSmart into this platform that we believe will have meaningful impact on optimizing orders that come through this platform. These developments mean that we use proprietary technology advantages within our own direct customer acquisition capabilities and also enable indirect customer acquisition. In late May 2015 we agreed the commercial terms of a dealer management agreement with Comcast with the intention of managing Comcast dealers in the mid-Atlantic region of the United States. Following a successful trial of this program, the Company hopes to extend this service nationwide with Comcast and eventually with other operators. The Company believes the pilot will be successful and should the program be expanded across the US, could become a material new source of revenue over time.

It continues to be our belief that the newly formed entities from the AT&T and DIRECTV merger and the newly formed entities from the Charter and TimeWarnerCable entities will be under pressure to grow revenue by adding new subscribers and additional services to justify the consolidation. The merger of Charter and TimeWarnerCable includes the addition of over two million homes that are serviced by BrightHouse Communications but not currently serviced by the Company and thereby significantly expanding our addressable market. The Group intends to be the premier service provider to the evolving industry, recognised for its superior capabilities in driving new subscribers with greater customer lifetime value and an innovation partner in providing software platform solutions.

2. Extension into new Geographical Markets. The Company has continued to explore geographic expansion that is both value and profit accretive. In June 2015, the Company signed an agreement with a UK utilities operator and expects to launch this in the second quarter of fiscal 2016. The Company will continue to explore acquiring entities based in Europe that the Company believes will be accretive to shareholder value.

3. Entrance into New, Relevant Verticals. The Group was able to grow revenues outside of its largest core telecoms and media clients from US$12.2M in fiscal 2014 to US$15.3M in fiscal 2015. During the eighteen month period from the first half of FY '14 through the second half of FY '15 , the Group's revenue has diversified from 77% of total revenue from the core cable and telco clients to 59% of total revenue at this most recent reporting period. As of the end of the second half of fiscal 2015, the group experienced overall revenue growth of 24% since the first half of FY '14, while the Group's revenue mix is now 59% from the largest core cable and telco clients and 41% from clients outside the core. Our strategy is to continue to grow revenue from core clients while at the same time accelerate the growth outside of the core cable and telco customers. We further expect to grow the customer acquisition business into the growing small and medium business sector through organic growth and acquisition. Business services represented the single largest area of growth for our core customers on a quarter-over-quarter basis. For example, each of Comcast, TimeWarnerCable ,Charter and AT&T grew business customers by 20%, 16%, 12% and 14% respectively in the most recent quarterly reporting period ended 30 June 2015. By contrast video subscribers continue to decline with phone subscribers declining or flat and internet growth slowing to below ten percent. We believe that using the processes and technology we have successfully deployed in the residential market to be a leader over the past five years can be successfully deployed in the business services market where we intend to pursue a position as a leading provider of online customer acquisition services. The business model remains pay-for-performance while the compensation paid to us is a percentage of recurring revenues over the typical three year lifetime of the customer. We believe this compensation aligns our interest with our partners' interest in ensuring that longer term, higher value customers are procured. We increase our revenue and profitability through the recurring revenue stream.

Acquisitions

The Company continues to opportunistically explore acquisition opportunities. The Company intends to use a mix of cash (equity and debt) and stock in future acquisitions, ensuring that any sellers have a stake in the future success of the Group.

Business Model

The Group's business model remains principally performance-based, where the Group earns revenue from fee-per-customer, lead and inquiry arrangements. Group clients pay a fixed commission for each customer, service, lead or inquiry that the Group successfully acquires on their behalf. The Group has expanded beyond paid search and search engine optimization ("SEO") and into e-mail, social media advertising and relationships with other companies that perform on-line customer acquisition activities. As Google, the Group's largest vendor, continues to adapt its business model to deliver more revenue through higher Cost-Per-Click, we will continue to ensure our proprietary systems can respond in such a way to ensure the paid search business remains profitable while at the same time continuing to reduce the percentage of the overall cost of goods sold that paid search represents.

Management of Principal Business Risks and Uncertainties:

DGS recognizes that the key business risks associated with the Group relate to the online customer acquisition industry being fluid in terms of the amount of control the Group's customers exercise over our ability to market using their brands and keywords, the timing of campaigns, target customers changing reactions and buying patterns relating to our sales and marketing campaigns, and the impending mergers between some of our largest clients. In the past we have been able to reduce the impact of these business risks and continue to grow year on year by establishing close relationships with our partners and consistently delivering the highest value customers to them. To adapt to the changing patterns of customer buying and shopping behaviour, we invest heavily into our analytics process and work constantly to optimise our algorithms in response to new data and changes to search engine, and other digital media algorithms. For example, in May 2015, Google made material changes to its paid search results algorithm with a result of a twenty to thirty percent increase in costs to maintain the same position in search results. In response, the Company deployed its in-house team of algorithm and Google Adwords certified software technicians to perform deep analytics and testing to ensure the dgSmart platform would produce the best cost and click to call ratios to maximise gross margin and profitability. The result is that from first half 2015 to the second half of 2015, the Company was able to bring costs back in line with earlier cost and click to call ratios. Additionally, we regularly seek out and test new marketing channels, techniques and opportunities to expand our online footprint beyond search engine marketing, ensuring a diversified pool of marketing tactics to drive new customer acquisition.

Business risks relating to our international expansion in Europe will be similar to those in our North American business plus the additional business risks associated with entering any new geographical and national market, including regulatory, compliance, effective scaling and appropriate staffing. We expect to continue to focus our Group culture on being adaptive and nimble in response to any impediments to expanding our business throughout the globe.

We face additional risks this year with TimeWarnerCable being acquired by Charter Communications. As a "Master-Agent" for both TimeWarnerCable and Charter Communications with years of positive performance history, we are confident of our ability to continue to provide services to the combined entity.

A compilation of Risks and Uncertainties related to our industry and our business can be found below.

Financial Review

In the financial year ended 30 June 201, the Group produced revenues of $40.3M (FY14: $38.9M; FY13: $25.5 million) and $3.0M in adjusted EBITDA (FY14: $5.4M; FY13: $4.0 million). The non-cash charge mandated by US GAAP for the Employee Stock Option Plan for the year was $0.76M million. Reported operating profit was $0.72M (FY14: 3.5M; FY13: $3.2 million). The Board approved an approximate $1.15M dividend at $0.041 per share to be recommended for shareholder approval at the Annual General Meeting on 12 November 2015 at 10:00 a.m. at the Company's offices.

The Company expects to invest in the geographical and vertical expansion in the coming year and will keep reserves for that expectation. Additionally, in accordance with the shareholder approval received in each of the past two Annual General Meetings, the Company will keep further reserves to make purchases of its own shares when the Board believes the intrinsic value of the Group is not properly reflected in the market capitalization. Such purchases will be made in accordance with Bermuda law, the rules of the AIM Market of the London Stock Exchange, the Bye-Laws of the Company and the collar and cap requirements of the shareholder approvals.

The Group's first half fiscal 2015 performance of adjusted EBITDA of US$0.5M was eclipsed by the acceleration of adjusted EBITDA in the second half to US$2.5M, with a heavier weighting of EBITDA in the last few months of the fiscal year. We expect this positive momentum to continue and the Group to meet market expectations for the full year 2016.

In the third quarter of fiscal 2015, the Group entered into a $3M Working Capital Facility with Heritage Bank in San Francisco, United States. The amount drawn down on this facility as of 30 June 2015 was $1.2 million. At the first half of fiscal 2015, the Company maintained a cash balance of $0.4M. As of the end of fiscal 2015, the Company maintains a cash balance of $2.2 million. The Group continues to produce cash, permitting it to make planned capital investment in further expansion or for acquisitions to support its three pillars of growth. Accounts receivable increased to $10.5 million as against $8.4 million at the half year (30 June 2014: $10.3 million).

Operating Highlights

We operate a diverse, international business spanning the Americas, Asia and Europe. Our drive to keep management layers thin, our executives both highly accountable to performance objectives and close to our operations helps to further our Group objective of excellence as we strive to become and stay the number one customer acquisition partner to our clients. As of 30 June 2015, the Group employed approximately 725 full and part-time persons and contractors in the Americas, Asia and Europe in addition to contractors and consultants (FY 2014: 630).

Call Centres.

We operate and manage call centres in Pakistan, Philippines and the United States. We use our call centres to qualify and sell prospects products and services from our clients, unless those prospects complete a purchase exclusively on-line including via mobile internet. A significant number of our sales and qualified leads are derived from a prospect calling into a call centre based upon information from websites owned or operated by the Group. During the 2015 financial year, we increased the number of call centre agents in the first half to meet the forecasts of our clients from a base of 450 call center agents at the end of fiscal 2014. Responding to the actuality of the forecast not being met, we scaled down the call centers in the second half of the year. We ended fiscal 2015 with approximately 400 full-time call center agents. Our retention rate in our Pakistani call centres is exceptionally high, with a minimal voluntary employee turnover of approximately 5% per month. Given the continued leading performance of our Pakistani call centres, we intend to continue to expand our call centre footprint in our Lahore and Karachi centres when justified by demand.

Product and Service Development.

During the financial year 2015 we continued to expand resources in our Business Intelligence ("BI"), Analytics and Software Development Teams. Our entire BI team is Google Adwords Certified within one year of being hired. Additionally, we have implemented Facebook ad and SEO certification programmes for existing staff and new hires to further diversify and differentiate the skill set of the team. As a result, our BI team has developed a reputation for highly competent and client focused analysis that is valued by our clients and partners, which we believe will further enable our expansion within existing and into new verticals. Our focus on hiring software developers to build out our new business services lines and custom software for our clients and partners continues to yield results with additional efficiencies in ad spend and revenue increments.

Mobile search has become the predominate manner in which consumers shop. In the fiscal year 2013 mobile search represented approximately 64% of click-throughs to our websites. In fiscal year 2015, mobile search represented approximately 76% of click-throughs to our websites. In this same period, Click to Call to our call centers increased from 49% in fiscal 2013 to 67% in fiscal 2015. The focus of our development is to ensure that consumers have the maximum choice of two-way communication with us on any type of mobile or fixed device in the manner that the consumer chooses. With the growth in mobile, we heavily invested to be at the front of the technology adoption and will continue to do so.

Summary & Outlook

In the coming year we look forward to aggressively pursuing our three pillars of growth: expanding within the existing client base extending our business into new geographies and entering new, relevant verticals. While there will be further changes in the market, the Company has reacted decisively to align the business to service more effectively its core cable and telco clients, we continue to invest in technology innovation and continue to capture additional opportunities in other verticals and geographies. We have already resumed profitable growth in the second half of the recent fiscal year and expect to maintain this momentum in the year ahead.

20 September 2015

Zia Chishti Jeff CoxChairman of the Board Chief Executive Officer

Consolidated Statements of Income

For the Year Ended 30 June 2015

Consolidated Balance Sheets

As at 30 June 2015

Consolidated Statement of Stockholders' Equity

For the Year Ended 30 June 2015

Consolidated Statements of Cash Flow

For the Year Ended 30 June 2015

Notes to the Consolidated Financial Statements

30 June 2015

(1) Nature of business - Group and its operations

Digital Globe Services, Ltd. (DGSL or the "Company") was incorporated in Bermuda on 9 November 2012 and admitted to the Alternative Investment Market (AIM) of the London Stock Exchange on 14 February 2013. The registered office of DGSL is located at 27th floor, 21-24 Millbank Tower, Millbank, London, SWIP 4QP. DGSL serves as a holding company for a global portfolio of companies in the internet based advertising and related technology business. DGSL has subsidiaries in the United States, Cyprus, Netherlands, Ireland and Pakistan. DGSL also owns and maintains the intellectual property (technology, brand name) associated with the business. "The Group" refers to DGSL and its subsidiaries.

The Group is comprised of the Company and following subsidiaries:

* owned indirectly through Digital Globe Services, Inc.

Digital Globe Services, Inc. (DGS, Inc.) - US

Digital Globe Services, LLC was formed on 23 May 2008 as a Delaware (US) based entity and subsequently converted to a corporation (DGS, Inc.) in February, 2011. The company provides a flexible and robust technology platform that enables digital directed marketing support to a variety of clients in the US. The company's major focus has been in the cable industry. The company manages web sales portals for clients in the US and drives consumer visits to these channels through internet based advertising. DGS, Inc. was previously owned by TRG Holdings, LLC (a US based subsidiary of The Resource Group International Limited (TRGIL)). As part of a group reorganisation, TRG Holdings, LLC sold its ownership in DGS, Inc. to TRGIL on 1 December 2012 for a consideration of $127,400. TRGIL transferred the shares in DGS, Inc. to DGSL in exchange for shares of the same value in DGSL. DGSL further transferred those shares to DGS Worldwide Marketing Limited (DGSML) in exchange for shares in DGSML. Assets and liabilities of DGS, Inc. were recognised in the consolidated financial statements at their carrying values (at the date of transfer) as the exchange took place between entities under common control.

Telsat Online, Inc. (Telsat) - US

Telsat Online, LLC was formed by DGS, Inc. in October 2010 as a Delaware (US) based entity. Effective February, 2011, Telsat Online, LLC was converted in to a corporation (Telsat Online, Inc.). Telsat provides the same services as DGS,Inc. to non-cable customers. As part of the Group reorganisation, DGS, Inc. sold its ownership in Telsat to TRGIL on 30 November 2012 for a consideration of $2,600. TRGIL transferred the shares in Telsat to DGSL in exchange for shares of the same value in DGSL. DGSL further transferred those shares to DGSML in exchange for shares in DGSML. Assets and liabilities of Telsat were recognised in the consolidated financial statements at their carrying values (at the date of transfer) as the exchange took place between entities under common control.

DGS Worldwide Marketing Limited (DGSML) - Cyprus

DGSML was incorporated by DGSL in November, 2012. DGSML is engaged in global marketing of DGS, Inc. DGSML also procures back office services for DGS, Inc. under a global services agreement. The operations of DGSML were closed on 26 June 2013 and transferred to DGS BV. Furthermore, the shares in DGS Inc. and Telsat were sold to DGS Worldwide BV (DGSBV) on 1 July 2013 at a value of $1.

DGS (Pvt.) Limited (DGSPL) - Pakistan

DGSPL was incorporated by DGSL in October 2012. DGSPL provides call centre and other back office services to DGSBV under a global services agreement. After the incorporation of DGSPL, all the employees who were in service agreement with TRG (Private) Limited (an associated company at that time) and working on DGS, Inc. business were employed by DGSPL on 1 December 2012.

DGS Worldwide BV (DGSBV) - Netherlands

DGSBV was incorporated by DGSL in June, 2013. DGSBV is engaged in global marketing of DGS, Inc. DGSBV also procures call centre and other back office services for DGS, Inc. under a global services agreement.

DGS Tech, Limited (DGSTL) - Ireland

DGSTL was incorporated by DGSL in June, 2013. DGSTL is engaged in tech services of DGS, Inc. DGSTL also procures other back office services for DGS, Inc. under a global services agreement.

DGS EDU LLC (DGS, EDU) - US

On 31 October 2013, the Group acquired the Education business of Ampush Media. A separate entity was formed (DGS EDU LLC) to acquire the assets and trading business.

DGS Auto LLC (DGS, Auto) - US

DGS Auto was incorporated on 11 March 2015. DGS Auto is engaged in motor vehicle licensing operations.

DGS Lakeball LLC (DGS, Lakeball) - US

DGS Lakeball LLC was incorporated On 12 May 2015. The Lakeball business purpose is all lawful business under Delaware law.

(2) Summary of significant accounting policies

(a) Statement of compliance and basis of presentation

The accompanying consolidated financial statements of the Group have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP). The accompanying policies have been applied consistently to all periods presented in the consolidated financial statements. The financial statements comply with Section 404 of the Companies Act (as modified for The Overseas Companies Regulations 2009/1801). The amounts presented are in United States Dollars ($).

(b) Going Concern

The Group is seeking to establish itself as the leading international provider of outsourced online customer acquisition services, through its focus on having the premier technology platform for pricing and procuring digital advertising on a cost effective basis. The Group's global profile, together with its ability to innovate and diversify, provides it with firm foundations for ongoing success. This was demonstrated in the second half of the fiscal year, where through operational discipline, cost control and execution, we were able to have the most successful six months in the history of the company, despite having the most challenging first six months of the fiscal year.

The Group's net income for the year was $0.3 million (2014: $3.9 million). As at 30 June 2015 the Group had net assets of $11.5 million (2014: $11.7 million) and net current assets of $5.8 million (2014: $6.8 million).

The group cash position has strengthened considerably since the beginning of the year. DGS finished the year with $ 2.2 million in cash, vs a debt of $ 1.7 million and an additional $ 1.3 million of available capacity on the line of credit. The Board has reviewed cash flow forecasts up to and including the period to 31 December 2017. These forecasts take into account revenue, which has already been contracted, and revenue which is expected to occur as a result of ongoing negotiations and business development/ marketing initiatives.

The Directors believe there is sufficient cash to pay our liabilities as they fall due. All financial covenants are forecasted to be satisfied over the period. The Group is well placed to manage business risk effectively and the Board reviews the Group's performance against budgets and forecasts on a regular basis, to ensure action is taken where needed.

Our current banking facility is set to renew on 01 April, 2016. The directors fully expect to continue the relationship into 2017 at existing or more favorable terms. The bank has expressed interest to keep the line in place and would like to continue to expand our relationship. In the process of moving to our existing lender, DGS had engaged multiple financial institutions, all of whom had expressed strong interest in working with DGS, and one of whom had negotiated terms and had successfully conducted due diligence. The DGS group has multiple options in ensuring there is sufficient financial backing to support the going concern.

The Directors therefore are confident that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in the preparation of accounts.

(c) Principles of consolidation

The consolidated financial statements include the financials of DGSL and its subsidiaries. All significant intercompany balances and transactions have been eliminated on consolidation.

(d) Cash and cash equivalents

The Group maintains bank balances, which, at times, may exceed federally insured limits. Balances are monitored and during the year ended 30 June 2015, there were no instances in which this limit was breached. Cash and cash equivalents include cash in hand and cash at bank with original maturities of less than three months or available on demand.

(e) Revolving line of credit

On 31 March 2015, DGS, Inc. entered into an agreement with Heritage Bank whereby DGS, Inc. and DGS EDU are being granted a revolving line of credit loan facility to be used for working capital and general business purposes. The maximum balance outstanding cannot exceed $3 million. The Facility is a receivables finance facility secured by a charge over the assets of DGS Inc and DGS EDU LLC. The Facility is a senior, secured working capital, demand note with an interest rate of the greater of The Wall Street Journal (WSJ) Prime Rate or 5.75%, for a period of one year ending 31 March 2016. The Facility may be renewed by mutual agreement of the parties. The Company is not guaranteeing any payments under the Facility.

As with any facility, there are a number of standard covenants which must be adhered to, including "reporting" and "financial".

The reporting covenants relate to the submission of signed annual financial statements and submission of quarterly financial statements (management accounts) within 60 days of the close of the fiscal quarter. The Company must also submit a borrowing base certificate, accounts receivable and accounts payable every fifteen days and a compliance certificate, along with quarterly financial statements, stating whether any event of default has occurred.

The financial covenants relate to a minimum asset coverage ratio of 1.5 : 1, measured quarterly and a six months rolling adjusted EBITDA within 75% of the projections in the Borrower Financial Plan and Parent Guarantee by the Company. During the year company was fully compliant with all covenants.

(f) Trade accounts receivable

Trade accounts receivable are carried at original invoice amount based upon the installation reports issued by the Group's clients as part of the revenue recognition process. Credit is extended to customers based on an evaluation of a customer's financial condition; collateral has not been required to date. Trade accounts receivable are generally payable within one month of installment by the customer. Trade accounts receivable outstanding longer than the contractual payment terms are considered past due. Management estimates, where applicable, an allowance for doubtful accounts, which adjusts gross trade accounts receivable to its net realisable value. Judgements are made by the Group based on historical trends and future expectations.

The Group writes off trade accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Group does not generally charge interest on past due receivables. Management has determined that no allowance for doubtful accounts is necessary at 30 June 2015.

(g) Property and equipment

Property and equipment are recorded at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight‑line method based on the estimated useful lives of the assets. The estimated useful lives are as follows:

Expenditure for maintenance, repairs and improvements that do not prolong the useful life of an asset are charged to the statement of income as incurred.

Additions and improvements that substantially extend the useful life of the asset are capitalised. Upon sale or other disposition of assets, the cost and related accumulated depreciation and amortisation are removed from the respective accounts, and the resulting gain or loss, if any, is included in the consolidated statement of income.

The Group evaluates the impairment of property and equipment in accordance with ASC 360, "Property, Plant and Equipment". ASC 360 states that an impairment of long-lived assets has occurred whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured based on net, undiscounted expected cash flows. Assets are considered to be impaired if the net, undiscounted expected cash flows are less than the carrying amount of the assets. Impairment charges are recorded based upon the difference between the carrying value and the fair value of the asset. Based on the assessment of impairment indicators for long-lived assets, the Group did not record any impairment on long-lived assets during the year ended 30 June 2015.

(h) Intangible assets

Intangible assets are stated at cost less accumulated amortisation and impairment in value, if any, and amortised on a straight-line basis over their useful lives. Intangible assets relate to the purchase of a BPO Suite Enterprise Call Centre Management System and the licenses and services associated therewith and are being amortised over a period of 3 to 5 years.

As part of the acquisition of the Education business of Ampush Media, customer based intangibles, customer lists, software and intellectual property were acquired and are amortised over their useful economic lives of 6 years (for customer based intangibles) and 4-5 years (for software), respectively. There is also a non-compete covenant, which is being amortised over the period of the non-compete term (i.e. 2 years). During the year ended 30 June 2015, costs incurred on development of inhouse software for internal use have been capitalised and are being amortised over its useful life of 3 years.

(i) Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognised. Goodwill is reviewed for impairment at least annually. In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment, which provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting is greater than its carrying amount, the two-step goodwill impairment test is not required. The Company adopted this guidance in 2012.

If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognised for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed.

Digital Globe Services, Inc.'s goodwill was recorded as a result of a business combination that occurred in prior years. The additional goodwill relates to the acquisition of the Education business of Ampush Media in fiscal year 2014. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Group reviews its recorded goodwill for impairment on an annual basis, or more often if indicators of potential impairment exist, by determining if the carrying value of each reporting unit exceeds its estimated fair value. During the year ended 30 June 2015, the Group performed a qualitative impairment analysis on 10 August 2015, in accordance with ASC 350, 'Intangibles -Goodwill and Other', no impairment indicators were noted in the Group's analysis. Goodwill is considered to be impaired if it is determined that the carrying amount of the net assets of the reporting unit exceeds its fair value.

(j) Use of estimates and judgements

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Although management believes its estimates, assumptions and judgments are reasonable, they are based upon information presently available. Due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. Significant estimates include the chargebacks and cancellation rates used in recording receivables and recognising revenue.

(k) Stock options

The Company accounts for stock based compensation under ASC 718, "Compensation - Stock Compensation" ("ASC 718"). ASC 718 requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options. The Company uses the Black-Scholes Option Pricing Model to determine the fair value of the stock options. The expense for the options is recognised on a straight line basis over the requisite service period (also refer to Note 15).

(l) Income Taxes

The Group recognises deferred tax assets on deductible temporary differences and deferred tax liabilities on taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax bases. As those differences reverse, they enter into the determination of future taxable income included on the tax return. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax asset will not be realised. Deferred tax assets and liabilities are measured using the enacted tax rates that will apply to taxable income in the periods the deferred tax item is expected to be settled or realised.

Taxable temporary difference relates primarily to amortisation of intangibles and depreciation, whereas deductible temporary difference relates to net operating losses.

The Group recognises the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognised in the financial statements is the largest benefit that has a greater than 50 per cent. likelihood of being realised upon ultimate settlement with the relevant tax authority. Increases or decreases to the unrecognised tax benefits could result from management's belief that a position can or cannot be sustained upon examination based on subsequent information or potential lapse of the applicable statute of limitation for certain tax positions.

The Group may, from time to time, be assessed interest or penalties by major tax jurisdictions. In the event the Group receives an assessment of interest and/or penalties, the interest would be classified as interest expense while the penalties would be classified as operating expense.

Management evaluated the Group's tax positions and concluded that the Group had taken no uncertain tax positions that require adjustment to the consolidated financial statements. The Group is no longer subject to income tax examination by the US federal, state of Colorado or local tax authorities for years before 2008.

(m) Earnings per share

Basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of the incremental common shares issuable upon the exercise of common stock options and warrants. Potentially dilutive shares are excluded from the computation if their effect is antidilutive.

(n) Foreign currency transactions and translation

The functional currency of the Group is the United States (US) dollar. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of transaction. Net gains and losses resulting from foreign exchange transactions are included in the Statement of Income. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into US dollars are included as part of the accumulated other comprehensive loss component of Stockholders' Equity.

(o) Long-lived assets

Long-lived assets, other than goodwill, are evaluated for impairment when events or changes in the business circumstances indicate that the carrying amount of the assets may not be fully recoverable through projected undiscounted future operating cash flows or appraised values. The Group concluded that there was no evidence of impairment of long-lived assets for the year ended 30 June 2015.

(p) Fair value measurements

The carrying value of cash, accounts receivable, accounts payable and accrued expenses approximates to their fair value due to the relatively short-term nature of these financial instruments. For Intangibles and Warrants refer to Note 7 and Note 15 respectively.

The Company utilises valuation techniques that maximise the use of observable inputs and minimise the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorised in one of the following levels:

· Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

· Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

· Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis at 30 June 2015 and 2014:

The Company's accounting policy is to recognise transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers into or out of level 1 for the years ended 30 June 2015 and 2014.

(q) Recent accounting pronouncements

In May 2014, the FASB published ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the ASU is to recognise revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The ASU is effective for annual periods and interim periods within those annual periods beginning after 15 December 2015 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognised at the date of initial application and providing certain additional

disclosures as defined per ASU 2014-09.

In August 2014, the FASB published ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The ASU requires that in connection with preparing financial statements for each annual and interim reporting period, an entity's management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). ASU 2014-15 is effective for the annual period ending after 15 December 2016, and for annual periods and interim periods thereafter. Early application is permitted.

In November 2014, the FASB published ASU 2014-17, Business Combinations (Topic 805) Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014.

In January 2015, the FASB published ASU 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2015.

In February 2015, the FASB published ASU 2015-02, Consolidation (Topic 810) Amendments to the Consolidation Analysis. The amendments in the ASU affect the following areas:

1. Limited partnerships and similar legal entities

2. Evaluating fees paid to a decision maker or a service provider as a variable interest

3. The effect of fee arrangements on the primary beneficiary determination

4. The effect of related parties on the primary beneficiary determination

5. The effect of related parties on the primary beneficiary determination

The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after 15 December 2015.

In April 2015, the FASB published ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.

In April 2015, the FASB published ASU 2015-04, Compensation - Retirement Benefits (Topic 715) Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets. For an entity with a fiscal year-end that does not coincide with a month-end, the amendments in this Update provide a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity's fiscal year-end and apply that practical expedient consistently from year to year. The practical expedient should be applied consistently to all plans if an entity has more than one plan. The amendments in this Update are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.

In April 2015, the FASB published ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015.

In May 2015, the FASB published ASU 2015-07, Fair Value Measurement (Topic 820), Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.

In May 2015, the FASB published ASU 2015-08, Business Combinations (Topic 805), Pushdown Accounting (Amendments to SEC Paragraphs Pursuant to Accounting Bulletin No. 115). This Accounting Standards Update amends various SEC paragraphs pursuant to the issuance of Staff Accounting Bulletin No. 115.

In June 2015, the FASB published ASU 2015-10, Technical Corrections and Improvements. The amendments in this Update cover a wide range of Topics in the Codification. The amendments generally fall into one of the types of amendments listed below.

1. Amendments Related to Differences between Original Guidance and the Codification.

2. Guidance Clarification and Reference Corrections.

3. Simplification.

4. Minor Improvements.

The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this Update.

No formal assessment of impact has been made for the adoption of above mentioned standards.

(r) Revenue recognition

In regards to Digital Globe Services, Inc. and Telsat Online, Inc., revenue is recognised based on actual monthly installations and activation of cable services ordered through Digital Globe Services, Inc. at the end-customers' home or business address. Once an order is placed through Digital Globe Services, Inc., the order is transferred to the client for activation and installation. The client then schedules the service to be activated at the end-customers' address, and once successfully activated, the data is entered into the client database, which results in the payable to Digital Globe Services, Inc. On a monthly basis, each client reconciles their internal database for all ordered services and determines which activations are deemed payable for that month and sent to Digital Globe Services, Inc. via a monthly payment file. This may include activations from prior months, but are deemed payable after reconciliation. Revenue is then recorded based on the total number of installations recognised in a given month, multiplied by the commission rate as stated in the agreement with the client.

Total installations are reported to Digital Globe Services, Inc. via monthly payment files detailing total installations and total commission value based on final product mix within the month. The payment files provide detailed payment information on total commissions earned by Digital Globe Services, Inc. net of chargebacks and cancellations. The revenue of Digital Globe Services, Inc. recorded in the financial year ended 30 June 2014 and through the interim period ended 31 December 2014 includes a portion of revenue for the period from 1 Jan 2014 through 30 June 2014. This includes but is not limited to submitted orders which were deemed to have installed after a given period and hence we were not given credit for, in accordance with the terms of the contract with our largest customer. DGS has engaged an independent audit firm to review the data as part of an audit, as allowed under the terms of the same contract which is still in progress. Utilizing data provided by our largest customer, the expected revenue from underpayment has been determined to be $1.3M. The revenue was recorded in the financial statements in the financial year ended 30 June 2014.

In regards to DGS EDU LLC, revenue is accrued for and recognised on a monthly basis based on the leads, clicks and data delivered during the month, net of the historical return/disqualification rate, with any adjustments to confirmed invoicing occurring during the preceding month. Net adjustments are generally less than 1%. The policy is different from that of the core business, since the revenue is both earned and can be reliably estimatable. Revenue from core business is not deemed to be earned until the service has been installed, due to certain factors existing in those contracts.

The only other revenue is in relation to IP royalty income and back office services provided, which is eliminated on consolidation.

(s) Search engine and lead generation expenses

The Group's most significant operating costs are the click through fees associated with bidding on key words or phrases with various internet search engines. The most significant vendor used is Google Inc. These expenses are recognised on an accruals basis based on the number of click-throughs for the period. The fees charged by the Search Engines vary depending on day and time but typically range from $1.00 to $3.00 per click. Although the Group has entered into service agreements with various Internet search engines, these agreements do not require either party to make a long‑term commitment and can be terminated at any time.

The Group utilises sub-affiliates to assist in developing additional profitable leads for additional volume with the Group's main clients. These third party affiliates run their own marketing campaigns and send their leads to the Group's call centres whereby the Group closes the sale and sends the lead to its clients. Compensation for sub-affiliate leads varies by partner, but typically they are paid a bounty per lead, which, when converted, generate a bounty by the company's clients.

(t) Warrant

Warrants are initially measured at fair value at the measurement date which is the date on which the warrant instruments are made. Subsequently these warrants are re-measured at their fair value at the reporting date with any change being recognised in the consolidated statement of income. Latest valuation has been conducted as of June 30, 2015 by a third party valuer. Assumptions used were 4.2% dividend yield and volatility of 83.79%, non-dilutive model

(u) Segment reporting

The information being presented to and reviewed by the chief operating decision maker (i.e. the Group's Chief Executive Officer) is divided into two segments: the Education business (EDU) and the company's usual business (INC). These are hence being identified as reportable segments - EDU being the customer acquisition business for the educational institutions (universities); and INC being the customer acquisition business for other customers. The 'DGS INC' segment comprises of communications industry customers as well as the Group's Telsat business which caters for customer outside the communications industry.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The segment performance is evaluated based upon Net Income as well as EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation).

The following table presents information of our various segments.

Disclosed in the following table is the company's geographical information:

(3) Dividends

During the year ended 30 June 2015, the Group paid dividends of $992,604 (2014: $1,989,129) as follows:

(4) Common Stock

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. The holders have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares.

(5) Cash and cash equivalents

The group has foreign cash and cash equivalent currency balances of $45,179 (2014: $41,030).

Cash in transit represents cash from merchant processors awaiting final resolution of charges for Change of Address credit card transactions.

(6) Property and equipment

Depreciation for the years ended 30 June 2015 and 2014 amounted to approximately $502,311 and $286,269 respectively.

(7) Intangibles

Intangibles consist of the following:

Aggregate amortisation expense for amortising intangible assets was $960,702 and $565,712 for the years ended June 30, 2015 and 2014, respectively. Estimated amortisation expense for the next five years is: $1,029,132 in 2016, $815,726 in 2017, $641,359 in 2018, $573,470 in 2019 and $259,301 in 2020. Entity wise break of intangibles are as follows:.

Entity 2015 2014

dgs inc 1,546,822.00 8,125.00

dgs Bermuda 175,000.00 475,000.00

dgs Pvt 80,246.00 -

Telsat 185,597.00 -

dgs Edu 1,177,860.00 1,568,834.00

dgs Tech 155,069.00 -

3,320,594.00 2,051,959.00

(8) Goodwill

The Company performed its annual goodwill impairment test as of June 30, 2015. The Company performed a qualitative assessment of each reporting unit and determined that it was not more-likely-than-not that the fair value of each reporting unit was less than its carrying amount. As a result, the two-step goodwill impairment test was not required and no impairments of goodwill were recognised in 2015.

The changes in the carrying amount of goodwill for the year ended 2015 and 2014 are as follows:

(9) Income taxes

The tax provision consists of the following:

The U.S. tax provision calculations include DGS, Inc, DGS Edu, LLC, Telsat Online, Inc, DGS Auto, LLC and DGS Lake Ball, LLC. Additionally, included in the provision are DGS Cyprus Limited, DGS Tech (Ireland) and DGS BV (Netherlands). DGS Private Limited (Pakistan) is exempt from corporate income tax under Pakistan's tax laws, being an exporter of IT enabled services. DGSL (Bermuda based holding company) became a UK tax resident on 26 June 2013 and files its tax return in the UK.

The Group recognises deferred tax assets on deductible temporary differences and deferred tax liabilities on taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax bases. As those differences reverse, they enter into the determination of future taxable income included on the tax return. Management has evaluated the Group's tax positions and concluded that the Group had taken no uncertain tax positions that require adjustment to the consolidated financial statements. The Group recognises interest and penalties related to uncertain tax positions in income tax expense. As of 30 June 2015, the Group had no provision for interest or penalties related to uncertain tax positions. The years 2011-2014 are open to examination by the tax authorities.

The following shows the nature and components of Group's deferred tax asset and liabilities:

The valuation allowance at June 30, 2015 was primarily related to net operating losses, in the judgment of management, are not more-likely-than-not to be realized. In assessing the realisability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more-likely-than-not that the Group will realise the benefits of these deductible differences, net of the existing valuation allowances at June 30, 2015. The amount of the deferred tax asset considered realisable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

At 30 June, 2015, the group's U.S. federal and state net operating loss carry forward for income tax purposes is $4.23 million (2014: $0.83 million) which will begin to expire in 2035. The group's UK net operating loss carry forward for income tax purposes is $0.81 million (2014: $1.61 million). Group's Ireland and Cyprus net operating losses carry forward for income tax purpose are $0.66 million (June 30, 2014: $0.03 million) and $0.06 (June 30, 2014: Nil), respectively. These amounts are based on the income tax returns filed for the year ended 30 June, 2014 and estimated amounts for the year ended 30 June 2015.

The income tax provision differs from the amount of income tax determined by applying the statutory tax rate to pretax income, due to the following:

(10) Major customers and credit risk

Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. Financial instruments which potentially expose the Group to concentration of credit risk consist primarily of cash, accounts receivable and accounts payable. The Group's cash is held with US commercial banks.

The following table summarises those non-related party customers with revenue or accounts receivable in excess of 5 per cent of total revenue or total receivables for the twelve months ended 30 June 2015 and 30 June 2014. These concentrations cause risk and may have an impact on the operations of the company.

(11) Related party transactions

The Group has service agreements for call centre and administrative services with subsidiaries of TRG. These agreements are in effect until terminated by either party and specify payments based on services performed. Expenses incurred for the year ended 30 June 2015, under these service agreements totaled $647,906 (2014: $315,174) which is included in call centre costs, communication expense and selling, general and administrative costs in the accompanying consolidated statements of income. The total net amounts due from these subsidiaries totaled $20,184 at 30 June 2015, (2014: $143,216) which is included under assets as related-party receivables, on the accompanying balance sheet.

(12) Remuneration of Directors and other key management personnel

Remuneration of those serving as Directors during the year is analysed below: