Connexion Telematics Ltd
Connexion Telematics Ltd
Appendix 4E
Final Report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Connexion Telematics Ltd
68 004 240 313
For the year ended 30 June 2020
For the year ended 30 June 2019
For and on behalf of the Directors
____________________________
Peter Torre
Company Secretary
Dated: 21 August 2020
2. Results for announcement to the market
2.1 Revenues from ordinary activities
Increase of
131%
2.2 Other income
Decrease of
44%
%
2020
$
8,201,207
230,216
to
to
2.3 Profit from ordinary activities after tax
attributable to the members of Connexion
Telematics Ltd
2.4 Profit for the year attributable to the
members of Connexion Telematics Ltd
3. Net tangible assets per ordinary security
Net tangible assets per ordinary security
Increase of
587%
to
3,199,784
Increase of
587%
to
3,199,784
Reporting
Period
(Cents)
0.39
Previous
Period
(Cents)
0.11
4. Details of entities over which control has been gained or lost during the period
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Connexion Telematics Ltd
No changes from previous period.
5. Details of individual and total dividends or distributions and dividend or distribution payments
Nil.
6. Details of dividend or distribution reinvestment plans in operation
Nil.
7. Details of associates and joint venture entities
Nil.
8. Foreign entities
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly
owned foreign entities:
Entity name
Country of incorporation
Connexion Media Inc
1125816 B.C. Ltd
United States of America
Canada
9. Accounting Standards Used
Ownership interest
2020
%
100
100
2019
%
100
100
Connexion Telematics Ltd’s financial statements are prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001, as appropriate for for-profit oriented entities. The financial statements also comply with International
Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board ('IASB').
10. Statement relating to the status of the audit
This report is based on audited Annual Report of Connexion Telematics Ltd for the year ended 30 June 2020.
The Company received an unqualified audit report, as detailed in the Independent Auditors Report to Members
contained within the Annual Report.
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Connexion Telematics Ltd
ABN 68 004 240 313
Annual Report
Year ended 30 June 2020
For personal use only Connexion Telematics Ltd
Contents
Corporate Information ........................................................................................................................................... 2
Directors’ Report .................................................................................................................................................... 3
Remuneration Report ............................................................................................................................................. 9
Auditor’s Independence Declaration .................................................................................................................... 14
Consolidated Statement of Profit or Loss and Other Comprehensive Income..................................................... 15
Consolidated Statement of Financial Position ...................................................................................................... 16
Consolidated Statement of Changes in Equity ..................................................................................................... 17
Consolidated Statement of Cash Flows ................................................................................................................ 18
Notes to the Financial Statements ....................................................................................................................... 19
Directors’ Declaration ........................................................................................................................................... 43
Independent Auditor’s Report to the members of Connexion Telematics Ltd .................................................... 44
Shareholder Information ...................................................................................................................................... 48
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Connexion Telematics Ltd
Corporate Information
Directors
Mark Caruso
Robert Downey
Aaryn Nania
Company secretary
Peter Torre
Registered office
Level 8, 350 Collins Street
Melbourne, VIC 3000
Phone: +61 3 9529 2655
Principal place of business
Level 8, 350 Collins Street
Melbourne, VIC 3000
Phone: +61 3 9529 2655
Share registry
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Phone: +61 2 9290 9600
Auditor
William Buck
Level 20, 181 William Street
Melbourne VIC 3000
Phone: +61 3 9824 8555
Bankers
National Australia Bank
193 Wright Street
Belmont WA 6104
Phone: +61 8 9333 4122
Stock exchange listing
Connexion Telematics Ltd’s shares are listed on the Australian Securities Exchange (ASX code: CXZ)
Website
www.connexionltd.com
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Directors’ Report
Your Directors present their report together with the financial statements of the consolidated entity (referred
to hereafter as the ‘Group’ or the ‘consolidated entity’), consisting of Connexion Telematics Ltd (referred to
hereafter as the ‘Company’ or the ‘Parent entity’) and the entities it controlled at the end of, or during, the year
ended 30 June 2020. In order to comply with the provisions of the Corporations Act 2001, the Directors report
as follows:
Directors
The names of Directors who held office during or since the end of the year and until the date of this report are
as follows. Directors were in office for this entire period unless otherwise stated.
Name:
Title:
Experience and expertise:
Other current directorships¹:
Interests in shares:
Interests in performance rights:
Name:
Title:
Experience and expertise:
Other current directorships¹:
Interests in shares:
Interests in performance rights:
Name:
Title:
Experience and expertise:
Other current directorships¹:
Interests in shares:
Interests in performance rights:
Mark Caruso
Non-Executive Chairman
Mr Caruso is a successful executive and entrepreneur with a strong,
transferrable business acumen. He has substantial corporate experience
driving growth and creating value in small companies. Previously, Mr
Caruso was the Chairman of Allied Gold Mining PLC (‘AGMP’) and was
responsible for the delivery of the Gold Ridge Project in the Solomon
Island and the Simberi Gold Project in Papua New Guinea. Mr Caruso is
currently Executive Chairman and Chief Executive Officer of Mineral
Commodities Ltd.
Executive Chairman of Mineral Commodities Ltd
Perpetual Resources Limited (retired June 2018)
25,319,680 Fully Paid Ordinary Shares
7,000,000
Robert Downey
Non-Executive Director
Mr Downey is a qualified solicitor who has practised mainly in the areas
of international resources law, corporate law and initial public offerings
as well as mergers and acquisitions. He has extensive experience as an
advisor, founder and director of various ASX, TSX and AIM companies.
Mr Downey is currently a partner at Dominion Legal, a boutique law firm
in Perth.
Metalsearch Ltd
RPM Automotive Group Limited
10,000,000
Nil
Aaryn Nania
Non-Executive Director / Acting Chief Executive Officer
Mr Nania co-founded Lucerne Investment Partners and is a Director of
the Lucerne Composite Fund – an active, long-term investor in both
listed and unlisted companies globally. Prior to this, Mr Nania was a
Portfolio Manager at Canadian investment bank Canaccord Genuity
(Australia) where he founded and managed the Absolute Return
Portfolio. Mr Nania holds various other listed and unlisted directorships.
Pureprofile Ltd
166,772,220 Fully Paid Ordinary Shares
10,000,000
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Directors’ Report (continued)
Directors (continued)
Name:
Title:
Experience and expertise:
Other current directorships¹:
Interests in shares:
Interests in performance rights:
Guy Perkins
Managing Director (appointed 5 August 2019, resigned 24 June 2020)
Mr Perkins is an experienced IT executive with proven Senior Executive
roles in ESRI Australia Pty Ltd, Pitney Bowes Inc and NearMap Ltd. Most
recently he was one of the Founders of Spookfish Ltd, which was listed
on the ASX until July 2018, when it was acquired by US-based EagleView
Technologies for $122m.
None
3,033,491 Fully Paid Ordinary Shares
Nil
¹
Other current directorships include directorships held for ASX listed companies only in the 3 years
immediately before the end of the financial year.
Company Secretary
Mr Peter Torre is the principal of Torre Corporate, a specialist corporate advisory firm which provides corporate
secretarial services to a range of listed companies. Prior to establishing Torre Corporate, Peter was a partner
and Chairman of the National Corporate Services Committee of an internationally affiliated firm of Chartered
Accountants working within its corporate services division for over nine years. Mr Torre is also a Director of ASX
Listed Companies Zenith Energy Limited, VEEM Ltd, Mineral Commodities Ltd and Volt Power Group Limited.
Principal activities
The principal activities of the entities within the Group during the year were the development and
commercialisation of its smart car technology for the automotive industry.
Review of operations
Group overview
This year built on the positive momentum achieved in the prior year to deliver a strong set of results against a
backdrop of economic uncertainty that unfolded during the latter part of the financial year, with COVID-19.
COVID-19 presented an unexpected and significant challenge to the economy and the Company’s priority
remains ensuring the safety of our staff, suppliers and supporting General Motors (‘GM’) and its Dealership
network. Despite the economic impact of COVID-19, the Company continued to perform very well with a strong
pipeline of ongoing consulting work and increasing recurring revenues from GM. The Company is uniquely
positioned, which has assisted in largely mitigating the impact of COVID-19 through an increase in recurring
revenues.
The Company continued to provide its Software as a Service (SaaS) solution for the Courtesy Transportation
Program (‘CTP’) and Cadillac Courtesy Transportation Alternative (‘CTA’), OnTRAC.
OnTRAC is the only fleet management software used by GM, which includes Buick, GMC, Chevrolet and Cadillac
dealers. The inclusion of Cadillac under the CTA has increased overall vehicles subscriptions by approximately
10,000 vehicles.
Following the initial launch of the OnTRAC program, the Company has worked closely with GM on various
customisation and feature enhancement work, aimed at optimising the current features. These include
enhanced dealership analytics, reporting and other various user functions required by the large GM dealer
network.
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Directors’ Report (continued)
Review of operations (continued)
Revenue initially commenced with 23k vehicles pre-registered to adopt CTP, which steadily grew since inception
to circa 72k vehicles utilising OnTRAC. As a direct result of COVID-19 and the various lockdown measures
imposed, vehicle subscriptions decreased from 72k vehicles as at 31 March 2020 to 64k vehicles as at 30 June
2020.
During the year, the Company ceased providing usage of its Commercial Link (‘CL’) subscription solution to GM
in the US, Canada and Mexico. The program was phased out during the 3rd quarter with GM’s focus turning to
OnTRAC. In the interim period, the Company continues to explore other opportunities for this product, offsetting
any reduction in future revenue.
Operating result for the year
The consolidated profit for the year ended 30 June 2020, after providing for income tax benefit was $3,199,784
(2019 profit: $466,034).
Total revenues from ordinary activities for the financial year were $8,201,207, a 131% increase in revenue
reported for the year ended 30 June 2019 of $3,555,221. In addition to total revenues, the Group also recognised
gross receipts of $180,212 (2019: $406,948) relating to Research and Development (‘R&D’) tax incentives.
Consolidated total assets have increased from $3,355,291 as at 30 June 2019 to $5,746,264 as at 30 June 2020.
Consolidated net assets also increased by $3,071,078 from the prior year end, to $4,812,972 as at 30 June 2020.
The continued improvement in the positive net asset position was a result of operational performance, strong
cash management and the elimination of all debt.
Corporate
Building on the positive momentum achieved during the previous year, where all external debts were eliminated
and costs rationalised, the Company focussed on delivering its high-level of service to GM, whilst also assessing
other project opportunities and revenue streams.
As announced on 18 May 2020, Guy Perkins resigned as Managing Director and CEO effective 24 June 2020. The
Company is currently sourcing a suitable candidate to lead the Company’s growth strategy.
Outlook
The Company will continue to build on its flagship OnTRAC fleet management software within the GM dealership
network. Ongoing optimisation and customisation work currently in hand will continue to drive net revenue per
subscription.
Growth opportunities are also being actively pursued within the current GM dealership network, as well as
actively looking at external applications with other OEM vehicle dealerships within the US and Australia.
The Company is well advanced in conducting a strategic review of its business operating model to investigate
how best to extract further value of its telematics access and software initiatives.
Significant changes in the state of affairs
Other than disclosed elsewhere in this report, there were no significant changes in the state of affairs of the
consolidated entity during the financial year.
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Directors’ Report (continued)
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Significant events after balance date
Other than matters already disclosed elsewhere in this Report, no matter or circumstance has arisen since 30
June 2020 that has significantly affected, or may significantly affect the consolidated entity's operations, the
results of those operations, or the consolidated entity's state of affairs in future financial years.
Likely developments and expected results of operations
Other than matters already disclosed in the Review of operations, pursuant to sections 299(3) and 299A(3) of
the Corporations Act 2001, this Report omits information relating to likely developments in the Company's
operations in the future because to do so will result, in the opinion of the Directors, in unreasonable prejudice
to the consolidated entity.
Directors’ meetings
The Directors held numerous meetings and discussions on an ongoing and regular basis. The conclusions of such
meetings are recorded via circular resolutions of the Board. There were two formal Board meetings held during
the year which were attended by all eligible directors.
Interests in the shares, options, performance rights and convertible notes of the Company and related bodies
corporate
2020
Mark Caruso
Robert Downey
Aaryn Nania
Guy Perkins ¹
Fully paid ordinary
shares
Number
25,319,680
10,000,000
166,772,220
-
Options
Number
Performance rights
Number
Convertible notes
Number
-
-
-
-
7,000,000
-
10,000,000
-
-
-
-
-
¹ Mr Perkins’ resigned as Managing Director and CEO on 24 June 2020.
2019
Mark Caruso
Robert Downey
Aaryn Nania
David Connolly ²
Guy Perkins
Fully paid ordinary
shares
Number
45,319,680
-
170,033,022
-
1,114,290
² Mr Connolly resigned as a Director on 28 September 2018.
Options
Number
Performance rights
Number
Convertible notes
Number
-
-
-
-
-
7,000,000
10,000,000
10,000,000
-
-
-
-
-
-
-
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Directors’ Report (continued)
Shares issued during or since the end of the year as a result of exercise
As at the date of this report there are no ordinary shares issued by the Company during or since the end of the
financial year as a result of the exercise of an option.
Unissued shares under option
As at the date of this report there are no unissued ordinary shares or interests of the Company under option.
Remuneration report
The Remuneration Report, which forms part of the Directors’ report, outlines the remuneration arrangements
in place for the Key Management Personnel of the consolidated entity for the financial year ended 30 June 2020
and is included on page 9.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian
Commonwealth or State law.
Indemnification and insurance of Directors and Officers
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity
as a Director or Executive, for which they may be held personally liable, except where there is a lack of good
faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and
Executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnification and insurance of Auditors
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
Auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the Auditor of
the Company or any related entity.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor
are outlined in Note 22 to the financial statements. The Directors are satisfied that the provision of non-audit
services is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-
audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the
auditor and none of the services undermine the general principles relating to auditor independence as set out
in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional
& Ethical Standards Board (including Independence Standards).
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Directors’ Report (continued)
Auditor's independence declaration
Section 307C of the Corporations Act 2001 requires our auditors, William Buck, to provide the Directors of the
Company with an Independence Declaration in relation to the audit of the annual report. This Independence
Declaration is set out on page 14 and forms part of this Directors’ report for the year ended 30 June 2020.
Proceedings on behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
Corporate governance statement
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such,
Connexion Telematics Ltd and its controlled entities have adopted the third edition of the Corporate Governance
Principles and Recommendations which was released by the ASX Corporate Governance Council on 27 March
2015 and became effective for financial years beginning on or after 1 July 2015.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2020 is dated as at 19 August
2020 and was approved by the Board on the same day. The Corporate Governance Statement was announced
by the Company on 21 August 2020 and is also available on the Company’s website.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the Directors
Aaryn Nania
Non-Executive Director and Acting Chief Executive Officer
Sydney, 21 August 2020
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Remuneration Report
The Remuneration Report, which
is Audited, details the key management personnel remuneration
arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001
and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all Directors.
The remuneration report is set out under the following main headings:
•
•
•
•
•
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the
achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform
to the market best practice for the delivery of reward. The Board ensures that executive reward satisfies the
following key criteria for good reward governance practices:
•
•
•
•
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its Directors and
executives. The performance of the consolidated entity depends on the quality of its Directors and Executives.
The remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board have
considered that it should seek to enhance shareholders' interests by:
•
•
•
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and
delivering constant or increasing return on assets as well as focusing the executive on key non-financial
drivers of value
attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives' interests by:
•
•
•
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive
director remuneration is separate.
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Remuneration Report (continued)
Non-executive Directors remuneration
Fees and payments to Non-Executive Directors reflect the demands and responsibilities of their role. Non-
executive Directors' fees and payments are reviewed annually by the Board. The chairman's fees are determined
independently to the fees of other Non-Executive Directors based on comparative roles in the external market.
The chairman is not present at any discussions relating to the determination of his own remuneration. Non-
Executive Directors participation in any Company incentive schemes is subject to shareholder approval in
accordance with the Corporation Act 2001 and the ASX Listing Rules.
ASX listing rules require the aggregate Non-Executive Directors remuneration be determined periodically by a
general meeting. The current aggregate remuneration limit is $250,000.
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and
mix of remuneration which has both fixed and variable components.
•
•
•
•
base pay and non-monetary benefits
short-term performance incentives
share-based payments where applicable
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed
annually by the Board, based on individual and business unit performance, the overall performance of the
consolidated entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor
vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional
value to the executive.
The Company did not offer a short or long-term incentive plan to its Directors and Key Management Personnel
during the year. As at the date of this report, plans are being established which will enable short and long-term
incentives to be utilised during the 2020/21 financial year.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion
of cash bonus and incentive payments are dependent on defined earnings per share targets being met. The
remaining portion of the cash bonus and incentive payments are at the discretion of the Board.
The Board is of the opinion that the continued improved results can be attributed in part to the adoption of
performance-based compensation and is satisfied that this improvement will continue to increase shareholder
wealth if maintained over the coming years.
Voting and comments made at the Company's 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 92.89% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2019. The Company did not receive any specific feedback at the AGM regarding its remuneration
practices.
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Remuneration Report (continued)
Details of remuneration
2020
Directors
Non-Executive:
Mark Caruso
Robert Downey
Aaryn Nania
Executive:
Guy Perkins ¹
Total
2019
Directors
Non-Executive:
Mark Caruso
Robert Downey
Aaryn Nania
Executive:
David Connolly ¹
Total
Short-term benefits
Cash salary
and fees
$
Cash bonus
$
Non-
monetary
$
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits
Long
service
leave
$
Share- based
payments
Equity-settled
$
30,000
30,000
30,000
127,843
217,843
-
-
-
-
-
-
-
-
-
-
8,507
2,850
2,850
11,624
25,831
-
-
-
-
-
-
-
-
-
-
Total
$
38,507
32,850
32,850
139,467
243,674
¹ Mr Perkins was appointed as Managing Director and CEO on 5 August 2019 and subsequently resigned,
effective 24 June 2020. As part of Mr Perkins’ remuneration package, he was issued 45m performance rights.
However, as the performance shares had not vested as at the date of his resignation they lapsed, and the
related share-based payment expense was reversed in full.
Short-term benefits
Cash salary
and fees
$
Cash bonus
$
Non-
monetary
$
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits
Long
service
leave
$
Share- based
payments
Equity-settled
$
30,000
30,000
23,370
-
83,370
-
-
-
-
-
-
-
-
-
-
2,850
2,850
2,220
-
7,920
-
-
-
-
-
Total
$
102,850
102,850
95,590
70,000
70,000
70,000
-
-
210,000
301,290
¹ Mr Connolly was Executive Director on 1 July 2018, then transitioned to Non-Executive Director on 3 August
2018. He subsequently resigned as a Director on 28 September 2018.
Service agreements
Mr Perkins was appointed as Managing Director and Chief Executive Officer on 5 August 2019 and subsequently
resigned on 24 June 2020. Details of his remuneration package are provided below:
Annual salary: $150,000 (excluding superannuation)
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Remuneration Report (continued)
Service agreements (continued)
Short Term Incentive:
Mr Perkins will be entitled to an annual bonus during the year ended 30 June 2020 of up to 5,000,000 (five
million) Ordinary Shares, measured against the following criteria:
i.
ii.
Achieving revenue of AU$10,000,000 (ten million) for the financial year ending 30 June 2020 (75%
weighting); and
Achieving EBITDA against Budget taking into account uncontrollable variables, at the discretion of the
Board (25% weighting).
The subsequent years following 30 June 2020 will be determined via KPIs set by the Board at the beginning of
each year of subsequent employment.
Long Term Incentive:
Mr Perkins will be entitled to receive performance rights under the Employer’s Incentive Performance Rights
Plan (“Performance Rights”).
The number of Performance Rights to be granted shall be based on the following table:
Year
Date
Ordinary Shares on Issue
Share Price
1
30 June 2020
15,000,000
3 cents
2
30 June 2021
15,000,000
4 cents
3
30 June 2022
15,000,000
6 cents
The vesting condition for each tranche of Performance Rights shall be the share price at the date specified above.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during
the year ended 30 June 2020.
Options
There were no options issued, held or vested by Directors or Key Management Personnel during the year ended
30 June 2020.
Performance Rights
Details of Performance Rights issued to Directors or Key Management Personnel during the year ended 30 June
2020 and 30 June 2019 are detailed in the below tables.
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Remuneration Report (continued)
Additional disclosures relating to key management personnel
Shareholdings
The number of ordinary shares in the Company, held by each Director and other members of key management
personnel of the consolidated entity, including their related parties, is set out below:
2020
Balance at 1
July 2019
Received as
part of
remuneration
Conversion of
performance
rights
Disposal as a
result of
resignation
Additions
Other
Disposals
Balance as at
30 June 2020
Directors
Mark Caruso
Robert Downey
Aaryn Nania
Guy Perkins
68,280,640
-
182,571,201
-
-
-
-
-
-
10,000,000
-
-
-
-
4,939,198
3,033,491
-
-
-
(3,033,491)
(42,960,960)
-
(20,738,179)
-
25,319,680
10,000,000
166,772,220
-
2019
Balance at 1
July 2018
Received as
part of
remuneration
Conversion of
performance
rights
Disposal as a
result of
resignation
Additions
Other
Disposals
Balance as at
30 June 2019
Directors
Mark Caruso
Robert Downey
Aaryn Nania ¹
David Connolly
67,280,640
-
-
-
-
-
-
-
-
-
-
-
1,000,000
-
182,571,201
-
-
-
-
-
-
-
-
-
68,280,640
-
182,571,201
-
¹ Mr Nania was appointed as a Non-Executive Director on 19 September 2018. As disclosed is Mr Nania’s initial Directors interest Notice
(Appendix 3X), released to the market on the same day, he held the following relevant interests in securities:
Lucerne Australia Pty Ltd
Principis Master Fund SPC – Lucerne Composite Master Fund SPC
2,000,000 fully paid ordinary shares
180,571,201 fully paid ordinary shares
Mr Nania is a director of the Lucerne Composite Fund.
Performance Rights
The number of Performance Rights in the Company, held by each Director and other members of key
management personnel of the consolidated entity, including their related parties, is set out below:
2020
Balance at
1 July 2019
Received as
part of
remuneration
Conversion of
performance
rights
Forfeited as a
result of
resignation
Additions
Other
Disposals
Balance as at
30 June 2020
Directors
Mark Caruso
Robert Downey
Aaryn Nania
Guy Perkins
2019
Directors
Mark Caruso
Robert Downey
Aaryn Nania
David Connolly
7,000,000
10,000,000
10,000,000
-
-
-
-
45,000,000
-
(10,000,000)
-
-
-
-
-
-
-
-
-
(45,000,000)
-
-
-
-
7,000,000
-
10,000,000
-
Balance at
1 July 2018
Received as
part of
remuneration
Conversion of
performance
rights
Forfeited as a
result of
resignation
Additions
Other
Disposals
Balance as at
30 June 2019
-
-
-
-
10,000,000
10,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
-
-
-
7,000,000
10,000,000
10,000,000
-
This concludes the Remuneration Report, which has been audited.
13
For personal use only AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF CONNEXION TELEMATICS LTD
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
A. A. Finnis
Director
Melbourne, 21 August 2020
For personal use only Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Connexion Telematics Ltd
Continuing operations
Revenue
Cost of Sales
Gross Profit
Other income
Expenses
Corporate and administrative expenses
Share based payment expenses
Depreciation and amortisation expenses
Impairment charge
Profit from operating activities
Finance costs
Profit before income tax benefit
Consolidated
2020
$
2019
$
Note
5
8,201,207
3,555,221
(4,519,683)
(1,414,284)
3,681,524
2,140,937
230,216
408,397
(1,361,687)
-
(395,292)
(105,577)
(1,542,621)
(266,000)
(229,933)
-
5
6
12
12
2,049,184
510,780
-
(44,746)
2,049,184
466,034
Income tax benefit
7
1,150,600
-
Profit after income tax benefit for the year attributable to the
owners of Connexion Telematics Ltd
3,199,784
466,034
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of overseas subsidiaries
Total comprehensive income attributable to the owners of
Connexion Telematics Ltd
Basic earnings per share
Diluted earnings per share
(128,706)
(28,196)
3,071,078
437,838
Cents
Cents
9
9
0.37
0.35
0.06
0.06
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
15
For personal use only
Consolidated Statement of Financial Position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Total current assets
Non-current assets
Plant and equipment
Capitalised development costs
Deferred tax asset
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
Note
10
11
12
7
13
2,443,088
1,818,875
3,962
4,265,925
938,612
1,612,964
3,962
2,555,538
12,462
298,129
1,169,748
1,480,339
5,270
794,483
-
799,753
5,746,264
3,355,291
827,192
86,740
913,932
1,562,893
50,504
1,613,397
19,360
19,360
-
-
933,292
1,613,397
4,812,972
1,741,894
14
15
16,531,069
(5,861)
(11,712,236)
4,812,972
16,405,069
248,845
(14,912,020)
1,741,894
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
16
For personal use only
Connexion Telematics Ltd
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Share
based
payment
reserve
$
Consolidated
Foreign
currency
translation
reserve
$
Issued
Capital
$
Accumulated
losses
$
Total
equity
$
Balance as at 1 July 2019
16,405,069
245,000
3,845
(14,912,020)
1,741,894
Profit for the year
Other comprehensive loss for the
year, net of income tax
Total comprehensive income for
the year
-
-
-
-
-
-
-
3,199,784
3,199,784
(128,706)
-
(128,706)
(128,706)
3,199,784
3,071,078
Exercise of performance rights
126,000
(126,000)
-
-
-
Balance as at 30 June 2020
16,531,069
119,000
(124,861)
(11,712,236)
4,812,972
Issued
Capital
$
Share based
payment
reserve
$
Consolidated
Foreign
currency
translation
reserve
$
Accumulated
losses
$
Total
equity
$
Balance as at 1 July 2018
15,748,539
Profit for the year
Other comprehensive loss for the
year, net of income tax
Total comprehensive income for
the year
-
-
-
-
-
-
-
32,041
(15,378,054)
402,526
-
466,034
466,034
(28,196)
-
(28,196)
(28,196)
466,034
437,838
Shares issued
Share issue costs
Share based payments
Exercise of performance rights
656,160
(20,630)
-
21,000
-
-
266,000
(21,000)
-
-
-
-
-
-
-
-
656,160
(20,630)
266,000
-
Balance as at 30 June 2019
16,405,069
245,000
3,845
(14,912,020)
1,741,894
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
17
For personal use only
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Research & Development and other government incentives
Interest received
Interest paid
Income tax paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for plant and equipment
Payments for capitalised development costs
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares, net of costs
Repayment of borrowings, net of costs
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Foreign exchange gains and losses
Cash and cash equivalents at the end of the financial year
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
Note
7,953,661
(6,660,436)
230,212
4
-
(19,148)
1,504,293
2,064,725
(1,623,434)
406,948
1,449
(7,500)
-
842,188
(11,708)
-
(11,708)
(6,590)
(414,279)
(420,869)
-
-
-
635,530
(300,000)
335,530
1,492,585
756,849
938,612
11,891
2,443,088
168,052
13,711
938,612
10
14
10
The above statement of cash flows should be read in conjunction with the accompanying notes
18
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 1: Basis of preparation
(a) Basis of preparation and statement of compliance
These general-purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001, as appropriate for-profit orientated entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board.
(“IASB”).
The financial statements are presented in Australian dollars. The Company is a listed public Company,
incorporated in Australia and operating in Australia, the United States of America, Canada and Mexico. The
entity’s principal activities are detailed in the Directors Report. Its registered office and principal place of
business is:
Level 8, 350 Collins Street
Melbourne
Victoria, 3000
Australia
The financial report was authorised for issue on 21 August 2020.
(b) Adoption of New and Revised Standards
Standards and Interpretations applicable to 30 June 2020
In the year ended 30 June 2020, the Directors have reviewed all the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current annual reporting
period. Those which have a material impact on the Group are set out in Note 3.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 30 June 2020.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if and only if the Group has:
-
-
-
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
-
-
-
The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
19
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 1: Basis of preparation (continued)
(c) Basis of consolidation (continued)
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive income from the date
the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this results in the non- controlling
interests having a deficit balance. When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
- De-recognises the assets (including goodwill) and liabilities of the subsidiary;
- De-recognises the carrying amount of any non-controlling interests;
- De-recognises the cumulative translation differences recorded in equity;
-
-
-
-
Recognises the fair value of the consideration received;
Recognises the fair value of any investment retained;
Recognises any surplus or deficit in profit or loss; and
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
(d) Foreign currency translation
Both the functional and presentation currency of Connexion Telematics Ltd and its Australian subsidiaries is
Australian dollars. Each entity in the Group determines its own functional currency and items included in the
financial statements of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of
differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
These are taken directly to equity until the disposal of the net investment, at which time they are recognised in
profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
20
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 1: Basis of preparation (continued)
(d) Foreign currency translation (continued)
The functional currency of the foreign operations, Connexion Media Inc is USD (U$). As at the balance date the
assets and liabilities of these subsidiaries are translated into the presentation currency of Connexion Telematics
Ltd at the rate of exchange ruling at the balance date and income and expense items are translated at the
average exchange rate for the period, unless exchange rates fluctuated significantly during that period, in which
case the exchange rates at the dates of the transactions are used. The exchange differences arising on the
translation are taken directly to a separate component of equity, being recognised in the foreign currency
translation reserve.
On disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a
disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an
interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest
becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation
attributable to the owners of the Company are reclassified to profit or loss.
In addition, in relation to the partial disposal of a subsidiary that includes a foreign operation that does not result
in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences
are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial
disposals (i.e. partial disposals of associates or jointly arrangements that do not result in the Group losing
significant influence or joint control), the proportionate share of the accumulated exchange differences is
reclassified to profit or loss.
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition
of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of
exchange prevailing at the end of the reporting period. Exchange differences are recognised in other
comprehensive income
21
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 2: Significant accounting policies
(a) Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected
to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the consolidated entity:
-
-
-
-
-
identifies the contract with a customer;
identifies the performance obligations in the contract;
determines the transaction price, which takes into account estimates of variable consideration and the time
value of money;
allocates the transaction price to the separate performance obligations on the basis of the relative stand-
alone selling price of each distinct good or service to be delivered; and
recognises revenue when each performance obligation is satisfied in a manner that depicts the transfer to
the customer of the goods or services promised.
Variable consideration with the transaction price, if any, reflects concessions provided to the customer such as
discounts, any potential add-ons or bonuses from the customer and any other contingent events. Such
estimates are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement
of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur.
The measurement constraint continues until the uncertainty associated with the variable consideration is
subsequently resolved. Amounts received that are subject to the constraining principle are initially recognised
as deferred revenue in the form of a separate liability.
Revenue from a contract to provide services is recognised over time as the services are rendered based on either
a fixed price or hourly rate.
(b) Other income and expenses
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the Group and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that assets’ net
carrying amount on initial recognition.
Government grants
Grants from the government, including Research and Development (R&D) tax incentive income, are recognised
at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply
with all attached conditions.
Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of
the related assets.
22
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 2: Significant accounting policies (continued)
(c)
Income tax expense
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are
recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance date.
23
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 2: Significant accounting policies (continued)
(d)
Income tax expense (continued)
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position. Cash flows are included in the statement of cash flows on a
gross basis and the GST component of cash flows arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(e) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker. The Chief Operating Decision Maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors of Connexion
Telematics Ltd.
(f) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as
net profit attributable to members of the parent, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
(g) 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 period.
24
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 2: Significant accounting policies (continued)
(h) Cash and cash equivalents
Cash comprises cash at bank and in hand.
Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings
in current liabilities in the statement of financial position. For the purposes of the statement of cash flows, cash
and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(i)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowances for expected credit loss (“ECL”). Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a
lifetime credit loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue. As the Group only has one customer and has historically always received payment in
full no ECL has been recorded in this report.
In relation to the financial assets carried at amortised cost, AASB 9 requires an expected credit loss model to be
applied as opposed to an incurred credit loss model under AASB 139. The expected credit loss model requires
the Group to account for expected credit losses and changes in those expected credit losses at each balance
date to reflect changes in credit risk since initial recognition of the financial asset. AASB 9 requires the Group to
measure the loss allowance at an amount equal to lifetime ECL if the credit risk on the instrument has increased
significantly since initial recognition. If the credit risk on the financial instrument has not increased significantly
since initial recognition the Group is required to measure the loss allowance for that financial instrument at an
amount equal to the ECL within the next 12 months.
The amount of the impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income within other expenses.
When a trade receivable, for which an impairment allowance had been recognised, becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against other expenses in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
(j)
Inventories
Inventory consists of sophisticated telemetry devices and is stated at the lower of cost and net realisable value.
Cost comprises of purchase and delivery costs, net of rebates and discounts received or receivable. Net realisable
value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.
(k) Property, plant and equipment
Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a
straight-line basis to write off the net cost of each item of plant and equipment over their expected useful lives
which are in between 3 - 10 years.
25
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 2: Significant accounting policies (continued)
(l) Capitalised development costs
Development costs are capitalised when it is probable that the project will be a success considering its
commercial and technical feasibility; the Company is able to use or sell the assets; the Company has sufficient
resources; and intent to complete the development and its costs can be measured reliably. Capitalised
development costs are amortised on a straight-line basis over the period of their expected benefit, being their
finite life of 3 years. Research costs are expensed in the period in which they are incurred.
Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
The Group conducts an annual internal review as to whether an indicator of impairment exists at each balance
date. External factors, such as changes in expected future processes, technology and economic conditions, are
also monitored to assess for indicators of impairment. If any indication of impairment exists, an estimate of the
asset’s recoverable amount is calculated.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. Recoverable amount is the higher of an asset’s fair value less costs to dispose or its value in use. Non-
financial assets other than goodwill that suffered impairment are tested for possible reversal of the impairment
whenever events or changes in circumstances indicate that the impairment may have reversed.
(m) Trade and other payables
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months.
Employee leave benefits
Wages, salaries, annual leave and sick leave Liabilities accruing to employees in respect of wages and salaries,
annual leave, long service leave and sick leave expected to be settled within 12 months of the balance date are
recognised in other payables in respect of employees’ services up to the balance date. They are measured at the
amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates
paid or payable. Liabilities accruing to employees in respect of wages and salaries, annual leave, long service
leave and sick leave not expected to be settled within 12 months of the balance date are recognised in non-
current other payables in respect of employees’ services up to the balance date. They are measured as the
present value of the estimated future outflows to be made by the Group.
(n) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the balance
date, the loans or borrowings are classified as non-current.
26
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Connexion Telematics Ltd
Notes to the Financial Statements
Note 2: Significant accounting policies (continued)
(o) Finance costs
Finance costs are expensed in the year that they are incurred.
(p) Share-based payments
Equity settled transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions). There is currently one plan in place to provide these benefits, being the Performance Rights Plan
(‘PRP’), which provides benefits to Directors and other Key Management Personnel.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer
using a Black-Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of the Company (market conditions) if applicable. The cost of equity-settled
transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each balance date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number
of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
The statement of profit or loss and other comprehensive income charge or credit for a period represents the
movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value
of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date
of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a modification of the original award, as described in the
previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
(q) Parent entity disclosures
The financial information for the parent entity, Connexion Telematics Ltd, has been prepared on the same basis
as the consolidated financial statements.
27
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Notes to the Financial Statements
Note 2: Significant accounting policies (continued)
(r)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Note 3: New Standard adopted
AASB 16 Leases
The consolidated entity has adopted AASB 16 from 1 July 2019.
The standard replaces AASB 117 'Leases' and for lessees eliminates the classifications of operating leases and
finance leases. Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding
lease liabilities are recognised in the statement of financial position. Straight-line operating lease expense
recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and
an interest expense on the recognised lease liabilities (included in finance costs).
In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation
in profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating
activities and the principal portion of the lease payments are separately disclosed in financing activities. For
lessor accounting, the standard does not substantially change how a lessor accounts for leases.
The Directors have assessed the impact of AASB 16 and note that the entity has no material leases as at 30 June
2020. The standard therefore does not currently impact the consolidated entity.
Accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the annual reporting period ending 30 June 2020 are
outlined in the table below.
Standard
Mandatory date for
annual reporting periods
beginning on or after)
Reporting period
standard adopted by
the company
The revised Conceptual Framework for Financial Reporting
1 January 2020
1 July 2020
AASB 2018-6 Amendments to Australian Accounting
Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting
Standards – Definition of Material
AASB 2020-1 Amendments to Australian Accounting
Standards – Classification of liabilities as Current or Non-
Current
1 January 2020
1 July 2020
1 January 2020
1 July 2020
1 January 2023
1 July 2023
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Notes to the Financial Statements
Note 4: Significant accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying
values of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the
period in which the estimate is revised if it affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Capitalisation of internally developed software
Distinguishing the research and development phases of a new customised software project and determining
whether the recognition requirements for the capitalisation of development costs are met requires judgement.
After capitalisation, management monitors whether the recognition requirements continue to be met and
whether there are any indicators that capitalised costs may be impaired.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer
using a Black-Scholes model, using the assumptions detailed in Note 16.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the
Black-Scholes model taking into account the terms and conditions upon which the instruments were granted.
Note 5: Revenue and other income
Revenue
Revenue from contracts with customers
Other income
Interest income
Governments grants – R&D refund
Government incentives – Covid-19 cashflow boost
Consolidated
2020
$
2019
$
8,201,207
3,555,221
4
180,212
50,000
230,216
1,449
406,948
-
408,397
29
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Notes to the Financial Statements
Note 6: Expenses
Corporate and administrative expenses include the following specific expenses:
Wages and salaries
Consulting fees
Rental expense
Superannuation expense
Note 7: Income tax expense
(a) Income tax benefit
Current tax benefit
(b) Numerical reconciliation of income tax benefit to prima facie
tax benefit
Profit from continuing operations before income tax benefit
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Non-deductible expenses
R&D refundable rebate
Non-assessable income
Recoupment of tax losses not previously recognised
Initial recognition of deferred tax assets on tax losses
Other deferred tax assets and tax liabilities not recognised
Eliminations on consolidation
Differences in tax rates of subsidiaries operating in different
jurisdictions
Adjustments recognised in the current year in relation to the current
tax of prior years
Current tax benefit
(c) Tax losses
Tax losses for which a deferred tax asset has been recognised
Tax benefit at 27.5%
(d) Deferred tax asset
Deferred tax asset
Set-off current tax liability against deferred tax asset
Net deferred tax asset
30
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
389,590
160,876
66,691
84,921
539,909
231,696
80,000
49,353
Consolidated
2020
$
2019
$
(1,150,600)
-
2,049,184
563,526
1,237
(49,558)
(13,750)
(600,362)
(1,173,769)
137,906
(33,749)
466,034
128,159
74,712
(111,911)
-
(206,824)
-
35,461
59,729
(1,229)
20,674
19,148
(1,150,600)
4,268,251
1,173,769
1,173,769
(4,021)
1,169,748
-
-
-
-
-
-
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 8: Segment reporting
Identification of reportable operating segments
During the year ended 30 June 2020 the group operated in one segment, specialising in developing global
information technology solutions for automotive industries in Australia, the United States of America, Canada
and Mexico. For the year ended 30 June 2020 all of its sales revenue was from one customer located in the USA
(2019: one customer). All revenue is recorded over time for rendering of services.
Note 9: Earnings per share
Basic and diluted earnings per share
From continuing operations
• Basic earnings per share (cents per share)
• Diluted earnings per share (cents per share)
Earnings
Earnings used in the calculation of basic and diluted earnings per share is as follows:
Consolidated
2020
0.37
0.35
2019
0.06
0.06
Consolidated
2020
$
2019
$
Earnings from continued operations used in the calculation of basic
earnings per share
3,199,784
466,034
Weighted average number of ordinary shares
The weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share
is as follows:
Consolidated
2020
Number
2019
Number
Weighted average number of ordinary shares for the purpose of
basic earnings per share
858,515,797 821,065,715
Shares deemed to be issued for no consideration in respect of:
• Performance shares
49,512,329
21,715,068
Weighted average number of ordinary shares for the purpose of
diluted earnings per share
908,028,126 842,780,783
31
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Notes to the Financial Statements
Note 10: Cash and cash equivalents
Cash at bank and on hand
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Reconciliation to the Statement of Cash Flows
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
2,443,088
938,612
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank
and investments in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the
statement of financial position.
Reconciliation of profit for the year to net cash flows from operating activities
Profit after income tax expense for the year
Foreign currency translation reserve
Equity settled share-based payment
Depreciation and amortisation
Impairment charge
(Increase) / decrease in assets:
Trade and other receivables
Inventory
Deferred tax asset
Increase / (decrease) in liabilities:
Trade and other payables
Employee benefits
Net cash from operating activities
Consolidated
2020
$
2019
$
3,199,784
466,034
(140,596)
-
395,292
105,577
(16,974)
266,000
229,933
-
(205,911)
-
(1,169,748)
(1,390,845)
17,999
-
(735,701)
55,596
1,227,723
42,318
1,504,293
842,188
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Notes to the Financial Statements
Note 11: Trade and other receivables
Trade receivables
Less: allowance for credit losses
Other receivables
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
1,754,413
-
1,754,413
64,462
1,818,875
1,583,135
(14,196)
1,568,939
44,025
1,612,964
(i)
Trade receivables are non-interest bearing and are generally on terms of 30 days to 90 days. All amounts
are short term. The carrying value of trade receivables is considered a reasonable approximation of fair
value.
(ii) Note 18 includes disclosures relating to the credit risk exposures and analysis relating to the allowance for
expected credit losses.
Aged receivables
The aging of trade receivables as at 30 June 2020 and 30 June 2019 is detailed in the table below:
Current
1 month
2 months
3 months
Older
Note 12: Capitalised development costs
Carrying value
Development asset – cost
Development asset – accumulated amortisation
Development asset – impairment charge ¹
Carrying value
Consolidated
2020
$
2019
$
1,090,602
588,773
-
9,989
65,049
1,754,413
488,972
563,557
480,882
2,708
47,016
1,583,135
Consolidated
2020
$
2019
$
1,172,330
(768,624)
(105,577)
298,129
1,172,330
(377,847)
-
794,483
¹ As noted in the Directors Report, during the year the Company ceased providing usage of its CL subscription
solution to GM in the US, Canada and Mexico. The program was phased out during the 3rd quarter with GM’s
focus turning to OnTRAC. Consequently, the remaining capitalised development costs relating the CL product,
which totalled $105,577 as at 31 March 2020, were fully impaired.
33
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Notes to the Financial Statements
Note 12: Capitalised development costs (continued)
Reconciliation
Cost
Opening balance as at 1 July
Additions
Closing balance as at 30 June
Amortisation
Opening balance as at 1 July
Amortisation charge
Closing balance as at 30 June
Impairment charge
Opening balance as at 1 July
Impairment charge
Closing balance as at 30 June
Carrying value
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
1,172,330
-
1,172,330
758,051
414,279
1,172,330
377,847
390,777
768,624
-
105,577
105,577
151,404
226,443
377,847
-
-
-
298,129
794,483
From 1 July 2017, the Company recognised developed intangible assets in terms of its AusIndustry and Australian
Tax Office Research & Development tax incentive programme. These intangible assets comprised the key
technologies developed for use in the Company’s operations – telematics and wireless communications.
Development costs are capitalised when it is probable that the project will be a success considering its
commercial and technical feasibility; the Company is able to use or sell the assets; the Company has sufficient
resources; and intent to complete the development and its costs can be measured reliably. Capitalised
development costs are amortised on a straight-line basis over the period of their expected benefit, being their
finite life of 3 years. Research costs are expensed in the period in which they are incurred.
The total R&D tax incentive receivable is apportioned between other income and the capitalised development
asset based on the split of expenditure in the claim.
Note 13: Trade and other payables
Trade payables
Other payables
Consolidated
2020
$
2019
$
726,261
100,931
827,192
1,410,614
152,279
1,562,893
(i)
Trade payables are non-interest bearing and are normally settled on a 30 to 90-day term. All amounts are
short term. The net carrying value of trade payables is considered a reasonable approximation of fair
value.
(ii) For terms and conditions relating to related party payables refer to Note 19.
34
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Notes to the Financial Statements
Note 14: Issued capital
Ordinary shares on issue
Connexion Telematics Ltd
Consolidated
2020
$
2019
$
Ordinary shares issued and fully paid
16,531,069
16,405,069
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company
in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to
one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
Movement in ordinary shares on issue
Date
Detail
Number
Issue price
(cents)
$
1 July 2018
Opening balance
732,805,112
15,748,539
11 September 2018
28 March 2019
30 June 2018
Issue of Shares
Conversion of performance rights
Costs of Issuing Equity
109,360,000
3,000,000
-
0.006
0.007
656,160
21,000
(20,630)
30 June 2019
Closing balance
845,165,112
16,405,069
5 July 2019
7 November 2019
Conversion of performance rights
Conversion of performance rights
5,000,000
13,000,000
0.007
0.007
35,000
91,000
30 June 2020
Closing balance
863,165,112
16,531,069
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Connexion Telematics Ltd
Notes to the Financial Statements
Note 14: Issued capital (continued)
Share options
On 6 July 2016, 7,133,617 unlisted options were issued with an exercise price of $0.25 expiring on the second
anniversary of their issue date. The options have been included in the below table for completeness purposes,
as they were issued as free-attaching options to other equity instruments. All 7,133,167 options expired on 6
July 2018, unexercised.
Movement in share options
Date
Detail
1 July 2018
Closing balance
Issue price
(cents)
Number
7,133,617
6 July 2018
Expiration of share options
(7,133,617)
-
30 June 2019
Closing balance
30 June 2020
Closing balance
Performance rights
-
-
$
-
-
-
-
The Company has established a Performance Rights Plan (‘PRP’) under which ordinary shares may be issued to
certain Directors, Key Management and Employees, on conversion of the Performance Rights.
Movement in performance rights
Date
Detail
1 July 2018
Opening balance
Fair value at
grants date
(cents)
Number
-
26 November 2018
28 March 2019
Issue of performance rights
Conversion of performance rights
38,000,000
(3,000,000)
0.007
0.007
30 June 2019
Closing balance
35,000,000
5 July 2019
7 November 2019
Conversion of performance rights
Conversion of performance rights
(5,000,000)
(13,000,000)
0.007
0.007
30 June 2020
Closing balance
17,000,000
$
-
266,000
(21,000)
245,000
(35,000)
(91,000)
119,000
The establishment of the above PRP was approved by shareholders at the Company’s AGM held on 26 November
2018. Each performance right vests on the closing share price reaching $0.008 and remaining at or above this
price for a period of 5 consecutive trading days. The performance rights expire on 26 November 2023.
Mr Perkins was appointed as Managing Director and CEO on 5 August 2019 and subsequently resigned, effective
24 June 2020. As part of Mr Perkins’ remuneration package, he was issued 45m performance rights. However,
as the performance shares had not vested as at the date of his resignation, they lapsed in the same period that
they were issued.
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Connexion Telematics Ltd
Notes to the Financial Statements
Note 15: Reserves
Nature and purpose of reserves
Share-based payments reserve
This reserve is used to record the value of equity benefits provided to employees and Directors as part of their
remuneration.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in
foreign operations.
Note 16: Share-based payment plans
Performance Rights Plan (“PRP”)
The Company established a PRP, which was approved by shareholders at the Company’s AGM, held on 26
November 2018.
Following approval by shareholders, the Company granted the following performance rights under the PRP:
•
•
•
•
10,000,000 performance rights to Mark Caruso (or his nominee/s);
10,000,000 performance rights to Robert Downey (or his nominee/s);
10,000,000 performance rights to Aaryn Nania (or his nominee/s); and
8,000,000 performance rights to other Officers and Employees of the Company.
The above performance rights each convert into one (1) ordinary share for no consideration on exercise by the
holder once vested, prior to the expiry date which is five (5) years from the grant date. The performance rights
will vest upon the closing share price of the Company reaching A$0.008 and remaining at or above A$0.008 for
a period of five (5) consecutive trading days.
As at 30 June 2020 all the performance rights had vested. The fair value of each performance right was 0.7
cents, being the share price on the day of issue. This value was confirmed by an independent valuation.
Note 17: Financial instruments
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains largely unchanged from the previous period.
The capital structure of the Group consists of cash and cash equivalents, borrowings (paid off in full during the
year ended 30 June 2019) and equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings/accumulated losses.
None of the Group’s entities are subject to externally imposed capital requirements.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such
as general administrative outgoings.
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Notes to the Financial Statements
Note 17: Financial instruments (continued)
Financial risk management objectives
The Group is exposed to (i) market risk (which includes foreign currency exchange risk and interest rate risk), (ii)
credit risk, and (iii) liquidity risk.
The consolidated entity's overall risk management program focuses on the management of these risks through
cashflow forecasting capital management.
Risk management is carried out by the Board and Management informally on a frequent periodic basis. The
process includes identification and analysis of the risk exposure of the consolidated entity and appropriate
procedures, controls and risk limits.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates.
The Group does not enter into any derivative financial instruments, including foreign exchange forward
contracts, to manage its exposure to or to hedge against foreign currency exchange rate fluctuations. There has
been no change to the Group’s exposure to market risks or the manner in which it manages and measures the
risk from the previous period.
Interest rate risk
Borrowings issued at fixed rates expose the consolidated entity to fair value interest rate risk. Borrowings that
were held as at 30 June 2018 were at a fixed interest rate, and no interest rate risk applies, however, these
borrowings were paid off during the year ended 30 June 2019.
Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The group is exposed to
credit risk from financial assets including cash and cash equivalents held at banks and trade and other
receivables.
The credit risk in respect of cash balances held with banks and deposits with banks are managed via holding
funds only with major reputable financial institutions.
The Group continuously monitors the credit quality of customers and to deal only with credit worthy
counterparties. The credit terms range between 30 and 90 days. The ongoing credit risk is managed through
regular review of ageing analysis. Trade receivables mainly consist of debts due from its largest customer.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding
and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves,
banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities.
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Connexion Telematics Ltd
Notes to the Financial Statements
Note 17: Financial instruments (continued)
Non-derivative financial liabilities
The following tables detail the Group’s expected contractual maturity for its non-derivative financial liabilities.
These have been drawn up based on undiscounted contractual maturities of the financial liabilities based on the
earliest date the Group can be required to repay. The below tables include both interest and principal cash flows:
2020
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
2019
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
Fair value measurements
Weighted
average
interest
rate
%
Between
0 – 6
months
$
Between
6 – 12
months
$
Between
1 – 2
years
$
Between
2 – 5
years
$
Over
5
years
$
Remaining
contractual
maturities
$
0%
827,192
827,192
-
-
-
-
-
-
-
-
827,192
827,192
Weighted
average
interest
rate
%
Between
0 – 6
months
$
Between
6 – 12
months
$
Between
1 – 2
years
$
Between
2 – 5
years
$
Over
5
years
$
Remaining
contractual
maturities
$
0%
1,562,893
1,562,893
-
-
-
-
-
-
-
-
1,562,893
1,562,893
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes. The following table presents the Group’s assets and liabilities measured and recognised
at fair value at 30 June 2020 and 30 June 2019:
Assets
Cash and cash equivalents
Trade and other receivables
Total assets
Liabilities
Trade and other payables
Total liabilities
Consolidated
2020
$
2019
$
2,443,088
1,818,875
4,261,963
938,612
1,612,964
2,551,576
827,192
827,192
1,562,893
1,562,893
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Connexion Telematics Ltd
Notes to the Financial Statements
Note 18: Contingent liabilities and assets
The Group has no contingent liabilities and assets as at 30 June 2020 (2019: nil).
Note 19: Related party disclosure
Key Management Personnel
The following persons were Directors of Connexion Telematics Ltd during the financial year and are also
identified as Key Management Personnel (“KMP”):
• Mark Caruso
•
•
•
Robert Downey
Aaryn Nania
Guy Perkins (appointed 5 August 2019, resigned 24 June 2020)
Transactions with KMP
The aggregate compensation made to Directors and other KMP of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Other transactions with KMP
Consolidated
2020
$
2019
$
217,843
25,831
-
243,674
83,370
7,920
210,000
301,290
No member of KMP appointed during the period received a payment as part of his or her consideration for
agreeing to hold the position.
The Group used the legal services of Dominion Legal Pty Ltd during the year, a legal firm associated with Robert
Downey. The amounts billed related to this legal service amounted to $17,896 excluding GST (2019: $27,591
excluding GST), based on normal market rates and no amounts remained unpaid at the balance date.
The Group also used CFO consulting and general accounting services of Mine Site Construction Services Pty Ltd
during the year, a company associated with Mark Caruso. The amounts billed related to this service amounted
to $8,000 excluding GST (2019: $56,000 excluding GST), based on normal market rates and no amounts remained
unpaid at the balance date.
The Group used the consulting services of Puggle Media Holdings during the year, a consulting firm associated
with Mark Caruso. The amounts billed related to these consulting services amounted to $19,780 excluding GST
(2019: nil), based on normal market rates and no amounts remained unpaid at the balance date.
There were no loans to/from related parties during the current or previous reporting period.
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Connexion Telematics Ltd
Notes to the Financial Statements
Note 20: Interest in subsidiaries
Connexion Telematics Ltd is the ultimate Australian parent entity and ultimate parent of the Group. The
consolidated financial statements incorporate the assets, liabilities and results of the following wholly owned
subsidiaries in accordance with the accounting policy described in Note 1:
Entity name
Country of incorporation
Flexvs Pty Ltd
miRoamer Pty Ltd
Connexion Media Inc
Connexion LLC
1125816 B.C. Ltd
CXZ Mexico
Australia
Australia
United States of America
United States of America
Canada
Mexico
Note 21: Parent entity disclosures
Statement of profit or loss and other comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Statement of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Equity
Issued capital
Share-based payment reserve
Accumulated losses
Total equity
Ownership interest
2020
%
100
100
100
100
100
100
2019
%
100
100
100
100
100
100
Consolidated
2020
$
2019
$
1,908,908
-
1,908,908
758,403
-
758,403
Consolidated
2020
$
2019
$
2,705,073
2,760,814
(906,419)
(19,360)
4,540,108
1,810,352
2,200,176
(1,379,328)
-
2,631,200
16,531,069
119,000
(12,109,961)
4,540,108
16,405,069
245,000
(14,018,869)
2,631,200
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June
2019.
Contingent liabilities of the parent entity
As at 30 June 2020 Connexion Telematics Ltd has no contingent liabilities (2019: nil).
41
For personal use only
Connexion Telematics Ltd
Notes to the Financial Statements
Note 22: Auditors remuneration
The Auditor of Connexion Telematics Ltd is William Buck.
During the financial year the following fees were paid or payable for services provided by William Buck:
Audit services - William Buck
Audit or review of the financial statements
Other services - William Buck
Other assurance services, including taxation
Preparation of Research & Development tax incentive claim
Note 23: Significant events after balance date
Consolidated
2020
$
2019
$
37,000
38,000
-
-
37,000
21,700
69,732
129,432
Other than disclosed elsewhere in the Annual Report, there has been no additional matter or circumstance that
has arisen after balance date that has significantly affected, or may significantly affect, the operations of the
Group, the results of those operations, or the state of affairs of the Group in future financial periods.
42
For personal use only
Connexion Telematics Ltd
Directors’ Declaration
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial
position as at 30 June 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
Aaryn Nania
Non-Executive Director and Acting Chief Executive Officer
Sydney, 21 August 2020
43
For personal use only Connexion Telematics Ltd
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Connexion Telematics Ltd (the Company and its
subsidiaries (the Group)), which comprises the consolidated statement of financial position
as a 30 June 2020, the consolidated statement of 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 other explanatory information, and the directors’ declaration.
In our opinion, 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 2020 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. 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
(including Independence Standards) (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 confirm that we have complied with the independence requirements of the
Corporations Act 2001.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
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.
For personal use only CAPITALISATION OF DEVELOPMENTS COSTS
Area of focus
Refer also to notes 2 and 12
During the year to 30 June 2020 the Group has
capitalised development costs of $0.3 million
which are held on the Groups statement of
financial position.
How our audit addressed it
Our audit procedures included:
— Reviewing management’s internal
documentation and policy in respect of
development costs;
Determining that the requirements of AASB 138
Intangible Assets could be met was complex
and required significant judgement by the
Directors and Group management, specifically
in determining that the specific criteria, for
capitalisation, stipulated by AASB 138 were
addressed.
As a consequence, we have determined this to
be a key area of focus in the current year.
— Assessing that only development costs are
captured in accordance with Group policies;
— Performing detailed testing over the
development cost balance at 30 June 2020; and
— Assessing that the impairment and amortisation
charge recorded for the year was consistent
with the Group policy.
We also assessed the adequacy of the Group’s
disclosures in respect of the capitalised
development costs in the financial report.
RECOGNITION OF DEFERRED TAX ASSET
Area of focus
Refer also to notes 2 and 7
Prior to the 30 June 2018 financial year, the
Group incurred significant trading losses. In
subsequent financial years, the Group
generated a trading profit before tax in respect
of its continuing operations.
A deferred tax asset (‘DTA’) for tax loses earned
in respect of these trading losses were not
recognised in prior periods, as it was unclear
when the Group would enter into a tax payable
position and be able to utilise these losses.
During the current year the Group has
recognised a DTA in respect of tax losses
carried forward of $1.17 million at 30 June 2020.
As a consequence, we have determined this to
be a key area of focus in the current year.
How our audit addressed it
Our audit procedures included:
— Reviewing management’s internal
documentation to support the recognition and
carrying value of the DTA;
— Reviewing the workpapers of the Independent
tax advisor engaged by the Group to confirm
that the Group meets the requirements to utilise
these losses; and
— Performing detailed testing over the DTA
balance at 30 June 2020, to confirm that the
amount recognised is in accordance with AASB
112 – Income Taxes.
We also assessed the adequacy of the Group’s
disclosures in respect of the DTA in the financial
report.
For personal use only
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 2020 but does not include the financial
report and the 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 preparing the financial report, the directors are responsible for assessing the ability of the Group 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 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.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
www.auasb.gov.au/auditors_responsibilities/ar1.pdf .
This description forms part of our independent auditor’s report.
For personal use only
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Connexion Telematics Ltd, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Melbourne, 21 August 2020
For personal use only Connexion Telematics Ltd
Shareholder Information
The shareholder information set out below was applicable as at 13 August 2020.
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Shares
%
165,549,472
42,994,487
25,435,528
23,911,617
22,000,000
20,000,000
18,588,942
17,500,000
15,670,425
19.18%
4.98%
2.95%
2.77%
2.55%
2.32%
2.15%
2.03%
1.82%
15,604,895
13,504,210
1.81%
1.56%
12,390,813
12,296,296
12,000,000
11,302,347
10,725,939
10,490,218
10,000,000
9,000,000
1.44%
1.42%
1.39%
1.31%
1.24%
1.22%
1.16%
1.04%
7,878,158
0.91%
7,878,158
0.91%
484,721,505
863,165,112
56.16%
No. Holder
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
J F BYRNES SUPER PTY LTD
1
2
3
4 MR CHING KHOON TAN
5
6
7
8
9
10 HAMMOND ROYCE CORPORATION PTY LTD
BARBRIGHT AUSTRALIA PTY LTD
SHYMEA PTY LTD
A/C>
11
COACH DEVELOPMENTS PTY LTD
12 MR MARINUS ADRIAN STRYBOSCH & MRS PENELOPE K STRYBOSCH
KASSETT PTY LTD
S A HILLMAN SMSF PTY LTD
13 MR ROBERT CAMERON GALBRAITH
14
15 MR MICHAEL ANTHONY SMITH
16
17 MS ELIZABETH ANN WHITE
18 MRS STELLA EMILY DOWNEY
19 MR MAURICE FORTE & MRS MARISA FORTE
20 MR LEONARD ROBERT SMITH & MRS LYNETTE NANCY SMITH
KEITH SEABROOK NOMINEES PTY LTD
20
Total Securities of Top 20 Holdings
Total of Securities
48
For personal use only
Shareholder Information (continued)
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Substantial holders
Connexion Telematics Ltd
Number of holders
of ordinary shares
7,696
89,523
229,725
14,336,490
848,501,678
850,165,112
39
There following two shareholders are considered substantial holders in the Company.
Holder
Shares
% IC
Lucerne Australia Pty Ltd and its Associates
165,549,472
19.18%
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Restricted securities
There are no restricted securities.
49
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