Connexion Mobility Ltd
1
Connexion Mobility Ltd
Appendix 4E
Final Report
1. Company details
Name of entity:
Connexion Mobility Ltd
ABN:
68 004 240 313
Reporting period:
For the year ended 30 June 2024
Previous period:
For the year ended 30 June 2023
For and on behalf of the Directors
____________________________
Aaryn Nania
Managing Director
Dated: 15 August 2024
2. Results for announcement to the market
%
2024
US$
2.1 Revenues from ordinary activities
Increase of
47%
to
9,841,340
2.2 Other income
Decrease of
7%
to
512,445
2.3 Profit from ordinary activities after tax
attributable to the members of Connexion
Mobility Ltd
Increase of
7%
to
1,882,127
2.4 Profit for the year attributable to the
members of Connexion Mobility Ltd
Increase of
7%
to
1,882,127
3. Net tangible assets per ordinary security
Reporting
Period
(Cents)
Previous
Period
(Cents)
Net tangible assets per ordinary security
0.64
0.55
Connexion Mobility Ltd
2
4. Details of entities over which control has been gained or lost during the period
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:
Ownership interest
2024
2023
Entity name
Country of incorporation
%
%
Connexion Media Inc
United States of America
100
100
1125816 B.C. Ltd
Canada
100
100
9. Accounting Standards Used
Connexion Mobility 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 Mobility Ltd for the year ended 30
June 2024. The Company received an unqualified audit report, as detailed in the Independent
Auditors Report to Members contained within the Annual Report.
Connexion Mobility Ltd
(Formerly known as Connexion
Telematics Ltd)
ABN 68 004 240 313
Annual Report
Year ended 30 June 2024
Connexion Mobility Ltd
1
Contents
Corporate Information ............................................................................................................................... 2
Directors’ Report ......................................................................................................................................... 3
Auditor’s Independence Declaration ...................................................................................................... 26
Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................ 27
Consolidated Statement of Financial Position ...................................................................................... 28
Consolidated Statement of Changes in Equity ...................................................................................... 29
Consolidated Statement of Cash Flows .................................................................................................. 31
Notes to the Financial Statements .......................................................................................................... 32
Consolidated Entity Disclosure Statement ............................................................................................ 63
Directors’ Declaration ............................................................................................................................... 64
Independent Auditor’s Report to the members of Connexion Mobility Ltd ..................................... 65
Shareholder Information ......................................................................................................................... 70
Connexion Mobility Ltd
2
Corporate Information
Directors
Greg Ross
Aaryn Nania
Robert Downey
Samuel Baker (appointed 1 February 2024)
Nicholas Kephala (appointed 1 February 2024)
Simon Scalzo (resigned 8 January 2024)
Company secretary
Elizabeth Spooner (appointed 22 April 2024)
Registered office
Level 3, 162 Collins Street
Melbourne, VIC 3000
Principal place of business
Level 3, 162 Collins Street
Melbourne, VIC 3000
Share registry
Automic Group
Level 35, 477 Collins Street
Melbourne VIC 3000
Phone: 1300 288 664 (Australia) +61 2 9698 5414 (overseas)
Auditor
William Buck
Level 20, 181 William Street
Melbourne VIC 3000
Phone: +61 3 9824 8555
Bankers
National Australia Bank
Stock exchange listing
Connexion Mobility Ltd’s shares are listed on the Australian Securities Exchange (ASX code: CXZ)
Website
www.connexionmobility.com
Connexion Mobility Ltd
3
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
Mobility Ltd (referred to hereafter as the ‘Company’, the ‘Parent entity’ or ‘Connexion’) and the
entities it controlled at the end of, or during, the year ended 30 June 2024. 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:
Greg Ross
Title:
Non-Executive Chairman
Experience and expertise:
Mr Ross is currently an Investor and Advisor for several
Connected Car businesses. Greg’s experience is founded on a
31-year career with General Motors, where he built and
managed an extensive, multi-million-dollar global portfolio of
strategic alliances for GM’s Connected Car business. Greg was
also instrumental in the growth and scaling of GM’s OnStar
business. Prior to his work in Connected Car, Greg’s General
Motors career included leadership roles in Corporate Strategy,
Product Development, Product Marketing, and Retail Network
Development. Greg holds a Master’s Degree in Business
Administration and a Bachelor’s Degree in Economics from the
University of Michigan.
Current
and
former
directorships in
the last 3 years¹:
Nil
Interests in shares:
4,244,600 Fully Paid Ordinary Shares
Interests
in
performance
rights:
Nil
Interests in Loan Funded
Share Plan:
Nil
Connexion Mobility Ltd
4
Directors’ Report (continued)
Directors (continued)
Name:
Aaryn Nania
Title:
Managing Director & Chief Executive Officer
Experience and expertise:
Prior to joining Connexion as Managing Director, Mr Nania was
co-founder of Lucerne Investment Partners, and remains 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. Aaryn has previously
held directorships across a diverse range of public companies,
both listed and unlisted.
Aaryn holds a Bachelor of Commerce from the University of
Melbourne.
Current
and
former
directorships in
the last 3 years¹:
Nil
Interests in shares:
34,500,000 Fully Paid Ordinary Shares
Interests
in
performance
rights:
Nil
Interests in Loan Funded Share
Plan:
20,612,180
Name:
Robert Downey
Title:
Non-Executive Director
Experience and expertise:
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.
Current
and
former
directorships in
the last 3 years¹:
Zeotech Ltd (appointed 18 October 2016)
Reach Resources Ltd (formerly Cervantes Corporation Ltd)
(appointed 20 December 2021)
Askari Metals Ltd (appointed 20 November 2020)
Mt Malcom Mines NL (appointed 9 December 2020)
Interests in shares:
10,000,000 Fully Paid Ordinary Shares
Interests
in
performance
rights:
Nil
Interests in Loan Funded
Share Plan:
Nil
Connexion Mobility Ltd
5
Directors’ Report (continued)
Directors (continued)
Name:
Samuel Baker (appointed 1 February 2024)
Title:
Non-Executive Director
Experience and expertise:
Mr Baker is the Managing Partner of MobilityFund, a global
venture capital firm investing in early stage technology
companies in the areas of connectivity, autonomy, sharing and
electrification. MobilityFund’s investors include major energy
and automotive companies from the American, Europe and
Asia Pacific. Mr Baker has extensive experience in operations
and business development within high-grow technology
businesses. Prior to joining MobilityFund, Samuel co-founded
Wunder Mobility the leading software provider for vehicle
sharing operators around the world.
Current
and
former
directorships in
the last 3 years¹:
Nil
Interests in shares:
Nil
Interests
in
performance
rights:
Nil
Interests in Loan Funded Share
Plan:
Nil
Name:
Nicholas Kephala (appointed 1 February 2024)
Title:
Non-Executive Director
Experience and expertise:
Mr Kephala is a full-time capital allocator and the executive
director of Graham Newman Pty Ltd, a private investment
company based in Melbourne. He owned and operated a family
business before selling it to an ASX 100 company in 2019.
Nicholas has been a long-term shareholder of Connexion and
brings his significant business and financial skills to the Board,
with a particular focus on superior capital allocation and a
fanatical approach to customer service. As a representative of
Graham Newman Pty Ltd, Nicholas is a non-independent
director.
Current
and
former
directorships in
the last 3 years¹:
Nil
Interests in shares:
75,000,000 Fully Paid Ordinary Shares
Interests
in
performance
rights:
Nil
Interests in Loan Funded Share
Plan:
Nil
Connexion Mobility Ltd
6
Directors’ Report (continued)
Directors (continued)
Name:
Simon Scalzo (resigned 8 January 2024)
Title:
Non-Executive Director
Experience and expertise:
Mr Scalzo has extensive experience both locally and in the USA
market, founding multiple successful software businesses in
the Automotive sector amongst other related industry verticals.
Locally, Mr Scalzo’s experience extends to founding Evoke
Autopay, he then merged this business into Openpay Ltd where
he led the group as CEO. Mr Scalzo was also a director of Credit
Clear Ltd, where he led the group as Managing Director. Mr
Scalzo holds several director roles across many different
technology businesses, including Remitter.com, CarsFast.com,
and advisory chairman of TurboPass.com. Prior to this, Mr
Scalzo was a Partner & Board member at BDO Australia, leading
BDO’s national retail advisory practice, specialising in the retail
and automotive industries.
Current
and
former
directorships in
the last 3 years¹:
Nil
Interests in shares:
Nil
Interests
in
performance
rights:
Nil
Interests in Loan Funded Share
Plan:
Nil
¹
Directorships only include directorships held for ASX listed companies in the 3 years
immediately before the end of the financial year.
Company Secretary
Ms Elizabeth Spooner serves as company secretary of the Company. She was re-appointed as the
Company Secretary on 22 April 2024.
Elizabeth Spooner is a Senior Company Secretary and Corporate Lawyer at Confidant Partners, a
corporate secretarial provider. Ms Spooner holds a Juris Doctor degree from the Australian
National University, a Bachelor of Business Administration with Bachelor of Arts and a Graduate
Diploma of Applied Corporate Governance from the Governance Institute. Elizabeth Spooner is an
experienced governance and compliance professional who works closely with a number of boards
of both listed and unlisted public companies.
Elizabeth Spooner was Company Secretary during the year. She was appointed since 21 October
2022 and resigned effective 8 January 2024 when she was replaced by Shelby Coleman of Automic
Group. Shelby Coleman resigned on 22 April 2024 and was replaced by Elizabeth Spooner.
Connexion Mobility Ltd
7
Directors’ Report (continued)
Principal activities
The principal activities of the entities within the Group during the year were the development and
commercialisation of its fleet management software for the automotive industry.
Review of operations
Group overview
Connexion Mobility continued to provide its Software as a Service (SaaS) solutions, the OnTRAC
and Connexion platforms, for General Motors’ (“GM”) Courtesy Transportation Program and
Cadillac’s Courtesy Transportation Alternative, hereafter referred to collectively as “CTP”.
In addition to the delivery of SaaS to GM and its US dealerships, Connexion invested significantly
in its Team and Product throughout FY24 in accordance with its corporate strategy presented to
Shareholders at the most recent AGM in November 2023. Connexion’s accounting treatment
dictates that virtually all this discretionary investment in intangibles is expensed (“written off”) as
it is incurred.
Strategy
The overarching strategy being executed can be described as “Come for the tool, stay for the
network”.
Connexion’s “tool” is its telemetry-enabled mobility platform that streamlines fleet & rental
management at franchised automotive dealerships.
Connexion’s “network” is framed on one side by its Distribution Network of ~22% of all franchised
light vehicle dealerships in the US. Beyond its value as a B2B consumer of technology, this network
holds a material supply of assets in the form of vehicles (upon which Connexion has direct
visibility), real estate, and knowledgeable personnel, that are available to transact with the demand
side of the equation, in the form of vehicle consumers (rentals and subscriptions and sales), and
other 3rd party hardware, software and service partners.
When playing this long game, the “tool” is like the kindling. It is first the distribution and stickiness
of the tool that is critical, rather than early (or, in some cases, any) optimisation of its profitability.
There is typically room for optimisation later, particularly if the product generates revenue for its
User, as is intended with the Company’s long-term ambition of being a critical “Connexion”
between Dealers and Consumers.
In many industries, it is common for software companies to price their “tool” as a loss-leader or,
in some cases, even distribute it for free to rapidly build a valuable network. Connexion is
fortunate to already be profitable based on its initial “tool”.
Connexion Mobility Ltd
8
Directors’ Report (continued)
Review of operations (continued)
Strategy (continued)
It is in this context that we have previously described Connexion as benefitting from two main
drivers of value:
•
Economic Value (OEM Sales Strategy and Dealership Sales Strategy)
•
Strategic Value (building and commercialising the strategic value of our OEM and
Dealership Networks)
Connexion’s Economic Value grows over time through the successful execution of its “Embed,
Integrate, Generate” operating model, as applied to its core mobility platforms, OnTRAC and
Connexion.
The ongoing delivery of the Connexion platform to franchise dealers underpins Connexion’s sales
strategy, further growing Economic Value.
The FY24 launch of Connexion’s Marketplace, populated by Commercial Partnerships, will be key
to commercialising Connexion’s Strategic Value. Connexion is in the early stages of
commercialising partnerships with complementary automotive software vendors, notably
providers of solutions for DMS, toll management, shuttle management and privacy management.
There is no guarantee that any level of success will be achieved, although the opportunity set
amongst automotive software vendors in general is large.
Operations
The Team performed strongly throughout FY24, achieving much with modest staffing resourcing.
Notable achievements include but are not limited to:
•
Significant team expansion with minimal productivity disruption
•
Significant feature enhancements to both core platforms
•
Launch of the Connexion Marketplace, with initial product sales underway
•
Execution of a Commercial Partnership with a leading, global ridehail supplier
•
Identification, scoping and development of new products
•
Operational execution against the contract expansion with GM’s CTP team,
•
Progress expanding beyond CTP, within the GM ecosystem
•
Onboarding Connexion’s first non-GM dealership customers, albeit below internal targets
•
Further 3rd party software vendor API work
•
Increased direct-to-dealership outreach and engagement
•
Achieving multiple record quarterly gross and net profit results
•
Executing meaningful share buybacks at attractive prices
Whilst the shortest section of this report by word count, Operations is the fundamental driver of
value for the Connexion, and where most of Management’s focus is placed. Naturally, it is also the
part of the Company subject to the most commercial sensitivity. Further detail on the
achievements listed above is found in the various FY24 Quarterly Updates.
Connexion Mobility Ltd
9
Directors’ Report (continued)
Review of operations (continued)
Capital Allocation
Long-term Shareholder value is a function of:
1.
Operational performance
2.
Capital allocation
With a strong balance sheet relative to both its market capitalisation and operational size,
Connexion undertook the following capital allocation initiatives during FY24:
Investment into Team and Product
The Company continued to invest meaningfully in its human capital, including securing numerous
technical hires mandated specifically to improve and expand Connexion’s product capabilities.
Naturally, and as foreshadowed by Management for some time, the Company’s investment in
human capital will continue to impact its profitability in the near term as it pursues what is a
material long-term growth opportunity in the US. Importantly, a favourable return must be earned
on this expenditure, as measured by sustainable changes in Gross Profit, for the discretionary part
of the budget to increase.
Listed Equity Strategy
During the financial year, the Company continued to execute its Listed Equity Strategy, comprising
a Loan Funded Share Plan (“LFSP”) and an On-market Share Buyback (“Buyback”).
The LFSP is designed to attract, retain and align the Team over the long-term which, for any
software company, is a core driver of value. Maintaining employee loyalty is a challenge within the
software industry, and the LFSP is just one within a suite of initiatives employed to combat this.
With that said, LFSP issuance to new employees was paused during FY24 due to several factors,
including Management & Board’s view of the Connexion share price and a normalisation of the
hiring environment in favour of employers. Connexion experienced minimal voluntary staff
turnover during FY24.
The Buybacks are intended to first offset any resulting dilution from the LFSP at a sensible price,
and then further permanently improve the Company’s Earnings Per Share via a material reduction
in the number of shares on issue. The tool is not used as a signal, but with the genuine desire to
purchase in volume at the prevailing price. It is also worth noting that picking what would
otherwise be the absolute “bottom” of a share price very rarely results in meaningful volume being
traded at that price. Often it is better to be roughly right than precisely wrong. The ongoing
implementation of the Buyback initiative will continually consider Connexion’s existing and
anticipated profitability, the strength of its balance sheet, and the pricing of its shares on the ASX.
Importantly, the execution of any Buyback should not jeopardise the Company’s growth strategy.
Whilst the two are certainly not mutually exclusive, the Company commits to prioritising capital
deployment within its operations ahead of any Buyback, as required.
During FY24, the Company repurchased 81,526,864 CXZ shares at an average price of
A$0.0231/share.
Connexion Mobility Ltd
10
Directors’ Report (continued)
Review of operations (continued)
Financial Performance
Connexion’s financial performance in FY24 was driven by the following key trends:
1. Revenue growth from larger vehicle inventories
2. Revenue growth from Connexion subscriptions
3. Revenue growth from feature-enhancement delivery
4. Expenditure growth from reinvestment into our Team and Products
Taking the above into account, Connexion delivered sound profitability throughout the period,
with a Net Profit Before Tax of $2.66m in FY24, versus $2.60m in FY23.
In FY24, total revenues from ordinary activities increased by 48%, to $9.84m, up from $6.63m
reported in FY23. Consolidated net assets grew by 19% to $6.28m, up from $5.26m as at the end
of FY23.
Gross Profit in FY24 increased by 44% to $7.68m, up from $5.35m in FY23. This can primarily be
attributed to the key trends listed above. Supporting this growth in revenue and gross profit was
increased investment into our product and team, represented by increases in our expenditure on
Research & Development, Sales & Marketing, and Corporate & Administration of 100%, 43%, and
56%, respectively.
The Company incurred a positive impact to its Net Profit Before Tax of $0.04m due to a favourable
movement in the AUD/USD currency pair during the year. Specifically, this consists of a revaluation
of assets, being mostly AUD-denominated. Shareholders should note, however, that as a USD
earner with a meaningful AUD cost base, Connexion’s ongoing operating profitability is improved
by a weaker AUD, and vice versa. By contrast, the immediate balance sheet revaluation is an
offsetting “one-off”.
Consistent with the prior period, the Company minimised the extent to which volatility in the
AUD/USD impacted earnings by taking the following steps:
1. Implementing a natural hedge of currency-matching assets and operating expenditure to
the extent of available free cash (i.e. converting excess cash into AUD).
2. Implementing a natural hedge of shifting AUD-denominated supply contracts into USD,
where possible.
3. Maintaining the presentational currency of the Company as USD. From a commercial
perspective, Connexion is a US-facing organisation and should be analysed as such.
Whilst currency movements will always impact the Company so long as it transacts in multiple
currencies, the steps taken above have minimised the Company’s FX sensitivity, and will continue
to do so without the cost, complexity and execution risk of implementing synthetic hedges.
Connexion Mobility Ltd
11
Directors’ Report (continued)
Review of operations (continued)
Business Risk
Connexion relies on one major customer, which represents approximately 99% of the Company's
total revenue for the year ended 30 June 2024. A loss of, or significant reduction from this
customer would have a material adverse effect on the Company's financial condition, results of
operations, and cash flows.
This concentration of business with a single customer exposes the Company to significant risks.
Economic, business, regulatory, or other factors affecting this customer could have a direct impact
on the Company's revenue and profitability. Furthermore, any disagreements or difficulties in our
relationship with this customer, a change in the customer's business focus, financial condition, or
a decision by this customer to reduce or terminate its relationship with the Company, could
significantly reduce our revenue.
There is no material exposure to environmental, social sustainability or governance risks.
Corporate
From a reporting perspective, the Company will continue to voluntarily publish Quarterly Updates
to keep Shareholders regularly informed of its progress. Shareholders are encouraged to carefully
examine these reports and contact Management directly for any further clarification.
In recent years, Connexion has developed a consistent track record of tightly managing, and
delivering satisfactory returns on, invested capital. This ethos will not change. The Company’s
progress remains consistent with the multi-year plan first presented at the 2021 AGM, and
updated thereafter.
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.
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 2024 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.
Connexion Mobility Ltd
12
Directors’ Report (continued)
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. The number of
meetings of Directors held and the number of meetings attended by each Director were as follows:
Director
Board meetings
Eligible
Attended
Greg Ross
11
11
Robert Downey
11
10
Aaryn Nania
11
11
Samuel Baker
5
5
Nicholas Kephala
5
5
Simon Scalzo
5
5
Interests in the shares, options, performance rights and convertible notes of the Company
and related bodies
2024
Fully paid ordinary
shares
Performance rights
Loan Funded Share
Plan
Number
Number
Number
Greg Ross
4,244,600
-
-
Aaryn Nania
34,500,000
-
20,612,180
Robert Downey
10,000,000
-
-
Samuel Baker¹
-
-
-
Nicholas Kephala¹
75,000,000
-
-
Simon Scalzo²
-
-
-
¹ Mr Samuel Baker and Mr Nicholas Kephala appointed as Directors on 1 February 2024.
² Mr Scalzo resigned as a Director on 8 January 2024.
2023
Fully paid ordinary
shares
Performance rights
Loan Funded Share
Plan
Number
Number
Number
Greg Ross
2,704,600
-
-
Aaryn Nania
28,500,000
-
20,612,180
Robert Downey
10,000,000
-
-
Simon Scalzo
2,038,235
-
-
Connexion Mobility Ltd
13
Directors’ Report (continued)
Shares issued during or since the end of the year as a result of exercise of an option
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 2024 and is included on pages 16 to 25.
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.
Connexion Mobility Ltd
14
Directors’ Report (continued)
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 21 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 (including Independence Standards) issued by the Accounting Professional & Ethical
Standards Board.
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 26 and forms part of this Directors’
report for the year ended 30 June 2024.
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.
Performance Rights Plan
The Performance Rights Plan (“PRP”), detailed in note 15 to the financial statements, had three of
four vesting conditions met for year 3 being during the year ended 30 June 2024. The amount of
performance rights eligible to Key Management Personnel and staff for year 3 totalled 11,525,000.
During the year, of the year 3 total, all 11,525,000 performance right shares were exercised. No
performance rights were exercisable as at 30 June 2024. During the year, combining year two and
year three, 16,025,000 performance right shares were exercised.
Employee Share Scheme
The Company continued the Employee Share Scheme (“ESS”), detailed in note 15 to the financial
statements, which was approved by shareholders at the Company’s AGM, held on 17 November
2022. This ESS includes a Loan Funded Share Plan for Australian based participants. The US Equity
Option Plan was voluntarily cancelled for nil consideration by the participant in the USA. During
the period to 30 June 2024 no new loan shares were issued to either Key Management Personnel
or staff pursuant to the Loan Funded Share Plan (LFSP). No shares have vested to date under this
ESS scheme.
Connexion Mobility Ltd
15
Directors’ Report (continued)
Corporate governance statement
The Board is committed to achieving and demonstrating the highest standards of corporate
governance. As such, Connexion Mobility Ltd and its controlled entities have adopted the fourth
edition of the Corporate Governance Principles and Recommendations which 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 2024 is dated
as at 15 August 2024 and was approved by the Board on the same day. The Corporate Governance
Statement was announced by the Company on 15 August 2024 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
Managing Director and Chief Executive Officer
Sydney, 15 August 2024
Connexion Mobility Ltd
16
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
Connexion Mobility Ltd
17
Remuneration Report (continued)
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.
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 A$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 offer a short-term incentive plan via cash and long-term incentive plan via
performance rights to its Key Management Personnel during the 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 key criteria. The
remaining portion of the cash bonus and incentive payments are at the discretion of the Board.
Connexion Mobility Ltd
18
Remuneration Report (continued)
The Board is of the opinion that the continued positive 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.
All amounts are presented in US Dollars unless specified.
The Groups performance and share price over the past five periods are as follows:
Year
30 June 2020
30 June 2021
30 June 2022
30 June 2023
30 June 2024
Revenue US$
5,494,018
4,420,883
3,810,852
6,629,284
9,841,340
Profit
after
tax
US$
2,161,374
510,118
145,156
1,762,912
1,882,127
EPS US$
0.25
0.06
0.02
0.19
0.20
Share Price A$
0.015
0.015
0.010
0.020
0.028
Voting and comments made at the Company's 2022 Annual General Meeting ('AGM')
At the 2023 AGM, 89.68% of the votes received supported the adoption of the remuneration report
for the year ended 30 June 2023. The Company did not receive any specific feedback at the AGM
regarding its remuneration practices.
Details of remuneration
2024
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-
based
payments
Cash
salary and
fees
Cash
bonus
Non-
monetary
Super-
annuation
Long
service
leave
Equity-
settled
Total
US$
US$
US$
US$
US$
US$
US$
Non-Executive
Directors:
Greg Ross¹
36,000
-
-
-
-
-
36,000
Robert Downey
32,261
-
-
3,610
-
-
35,871
Samuel Baker²
15,000
-
-
-
-
-
15,000
Nicholas Kephala²
13,473
-
-
1,482
-
-
14,955
Simon Scalzo¹ ³
21,000
-
-
-
-
-
21,000
Executive Directors
and other KMP:
Aaryn Nania
202,936
93,164
-
21,619
4,601
114,225
436,545
Ben Stanyer
137,148
48,195
-
14,426
2,427
68,205
270,401
Total
457,818
141,359
-
41,137
7,028
182,430
829,772
¹
Mr Ross, Mr Baker and Mr Scalzo are contracted Non-Executive Directors and are not entitled
to Superannuation.
²
Mr Samuel Baker and Mr Nicholas Kephala appointed as Directors on 1 February 2024.
³
Mr Scalzo resigned as a Director on 8 January 2024.
Connexion Mobility Ltd
19
Remuneration Report (continued)
Details of remuneration (continued)
2023
Short-term benefits
Post-
employment
benefits
Long-
term
benefits
Share-
based
payments
Cash
salary and
fees
Cash
bonus
Non-
monetary
Super-
annuation
Long
service
leave
Equity-
settled
Total
US$
US$
US$
US$
US$
US$
US$
Non-Executive
Directors:
Robert Downey
24,472
-
-
2,570
-
-
27,042
Greg Ross¹
28,000
-
-
-
-
-
28,000
Simon Scalzo¹
28,000
-
-
-
-
-
28,000
Executive Directors
and other KMP:
Aaryn Nania
129,124
23,963
-
16,654
1,289
67,268
238,297
Ben Stanyer
122,609
-
-
12,238
1,212
24,012
160,071
Total
332,205
23,963
-
31,462
2,501
91,280
481,410
¹
Mr Ross and Mr Scalzo are contracted Non-Executive Directors and are not entitled to
Superannuation.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
2024
Fixed remuneration
At risk – STI
At risk - LTI
30 June
2024
30 June
2023
30 June
2024
30 June
2023
30 June
2024
30 June
2023
Non-Executive
Directors:
Greg Ross
100%
100%
-
-
-
-
Robert Downey
100%
100%
-
-
-
-
Samuel Baker
100%
-
-
-
-
-
Nicholas Kephala
100%
-
-
-
-
-
Simon Scalzo
100%
100%
-
-
-
-
Executive Directors
and other KMP:
Aaryn Nania
53%
72%
22%
18%
25%
10%
Ben Stanyer
57%
85%
18%
-
25%
15%
Service agreements
Mr Nania was a Non-Executive Director of the Company until 1 February 2021 and was appointed
as Managing Director and Chief Executive Officer on 2 February 2021. Mr Nania’s employment
contract is Full-Time with a three month notice period.
Annual salary: A$320,000 (excluding superannuation)
Connexion Mobility Ltd
20
Remuneration Report (continued)
Service agreements (continued)
Mr Stanyer was the Financial Controller and Company Secretary until 28 February 2022 and was
appointed as Chief Financial Officer on 1 March 2022. Mr Stanyer’s employment contract is Full-
Time with a three month notice period.
Annual salary: A$200,000 (excluding superannuation)
Mr Nania and Mr Stanyer accrued short-term incentives (STIs), in the form of cash bonuses, for
the year ending 30 June 2024. These incentives are expected to be paid in September 2024.
Executive Directors and
other KMP:
Position
Accrued STI
US$
Aaryn Nania
Managing Director and CEO
93,164
Ben Stanyer
Chief Financial Officer
48,195
The STIs for Mr Nania and Mr Stanyer were determined based on the achievement of the following
performance conditions:
Performance Condition:
Weighting
Financial Performance
80% - 90%
Customer Diversification
0% - 20%
Employee Engagement
0% - 10%
All performance conditions had different thresholds based on outcomes, resulting in varying
payment opportunities. The thresholds are:
Threshold:
Weighting
Failed
0%
Part-success
50%
Target
100%
Stretch
125%
The performance outcomes for the year were as follows:
•
Financial Performance conditions hit stretch threshold
•
Employee Engagement conditions hit target threshold
•
Customer Diversification conditions hit failed threshold
The STIs awarded to Mr Nania and Mr Stanyer reflect the company's strong financial performance
and the achievement of specific strategic objectives. These bonuses align with the company's
remuneration policy, which aims to reward superior long-term performance and encourage
retention and alignment with shareholder interests.
For the next financial year, year-ending 30 June 2025, the STI plan will include additional
performance conditions to further align executive incentives with the company's long-term
strategic goals. These conditions will be communicated in the next Annual Report.
Connexion Mobility Ltd
21
Remuneration Report (continued)
The Board believes that the accrued STIs for Mr Nania and Mr Stanyer are fair and reasonable,
reflecting their significant contributions to the company’s performance and strategic
achievements.
Performance Rights
As approved by shareholders at the 2021 AGM, Mr Nania is entitled to receive performance rights
under the Employer’s Incentive Performance Rights Plan (“Performance Rights”). These have
generated a vesting charge for the current year.
The number of Performance Rights to be granted shall be based on the following table:
Year
1
2
3
Date
30 September 2021
30 September 2022
30 September 2023
Ordinary Shares
8,000,000 ¹
8,000,000²
8,000,000²
¹
The Performance Rights Plan had a maximum 8,000,000 ordinary shares on issue. Only two of
the four vesting conditions below were met, resulting in only 4,000,000 ordinary shares
available. All 4,000,000 ordinary shares were exercised in the year ending 30 June 2022.
²
The Performance Rights Plan had a maximum 8,000,000 ordinary shares on issue. Three of the
four vesting conditions below were met, resulting in only 6,000,000 ordinary shares available.
All 6,000,000 ordinary shares for year 2 were exercised in the year ending 30 June 2023. All
6,000,000 ordinary shares for year 3 were exercised in the year ending 30 June 2024.
The vesting condition for each tranche of Performance Rights shall be measured against the
following performance criteria, with a 25% weighting for each of the below:
i.
Renewal and subsequent maintenance of the GM OnTRAC contract of commercial terms
equal to or better than the Original Contract;
ii.
Signed commercial contract with a Non-GM OEM Client;
iii.
The Company achieving NPBT against Budget for the relevant just-concluded financial
year, taking into account uncontrollable items at the discretion of the Board; and
iv.
Upon the CXZ 30-day VWAP trading at or above the Performance Price in the six months
preceding each respective eligible vesting date. Performance Prices are as follows:
a. AUD$0.025 for a vesting date of 30 September 2021;
b. AUD$0.035 for a vesting date of 30 September 2022; and
c. AUD$0.045 for a vesting date of 30 September 2023.
As approved by shareholders at the 2023 AGM, Mr Nania is entitled to receive performance rights
under the Employer’s Incentive Performance Rights Plan (“Performance Rights”). Mr Stanyer is a
participant of the same plan, as approved by the Board. These have generated a vesting charge
for the current year of $134,877.
Connexion Mobility Ltd
22
Remuneration Report (continued)
Performance Rights (continued)
The vesting condition for each tranche of Performance Rights shall be measured against the
following performance criteria, with a 75% weighting for the Company achieving the Diluted
Maintainable Earnings Per Share (DMEPS) target and 25% weighting for the Company achieving
the Return on Growth Spend (RGS) target:
Threshold
DMEPS Outcome
% of
Performance
Rights vested
# of Performance Rights
vested for Mr Nania
# of Performance Rights
vested for Mr Stanyer
Failed
Below 10% on PY
0%
-
-
Part-success
10% - 20% on PY
40%
3,424,751
1,818,431
Target
20% - 30% on PY
80%
6,849,503
3,636,862
Stretch
30%+ on PY
10%
8,561,879
4,546,078
Note: PY means the prior financial year
Threshold
RGS Outcome
% of
Performance
Rights vested
# of Performance Rights
vested for Mr Nania
# of Performance Rights
vested for Mr Stanyer
Failed
Below 25% on PY
0%
-
-
Part-success
25% - 50% on PY
40%
1,141,584
606,138
Target
50% - 75% on PY
80%
2,283,168
1,212,276
Stretch
75%+ on PY
100%
2,853,960
1,515,345
The number of Performance Rights, after achieving stretch thresholds, for Mr Nania is 11,415,839,
and for Mr Stanyer is 6,061,423.
The number of Performance Rights, Ordinary Shares, to be eligible to vest is based on the following
table:
Year
1
2
3
Date
31 August 2024
31 August 2025
31 August 2026
Aaryn Nania
3,805,280
3,805,280
3,805,279
Ben Stanyer
2,020,474
2,020,474
2,020,475
No other Key Management Personnel have been granted Performance Rights.
Employee Share Scheme
At the 2022 Annual General Meeting (AGM), shareholders approved the establishment of an
Employee Share Scheme, specifically a Loan Funded Share Plan. This plan provides employees
with the opportunity to receive shares and a corresponding loan to fund the acquisition of those
shares. These shares are considered to meet the definition of AASB 2 Share Based Payments and
have been measured and recognised during the year to 30 June 2024. There were no new
participants to the plan for the year-ending 30 June 2024.
Mr Nania and Mr Stanyer were among the participants in the Loan Funded Share Plan, with their
participation separately approved by shareholders at the 2022 AGM.
Connexion Mobility Ltd
23
Remuneration Report (continued)
Employee Share Scheme (continued)
Under the Plan, Mr Nania was issued 20,612,180 fully paid ordinary shares (2023: 20,612,180 fully
paid ordinary shares), financed by a loan of A$200,000 (2023: $200,000). Similarly, Mr Stanyer
received 17,801,400 fully paid ordinary shares (2023: 17,801,400 fully paid ordinary shares),
backed by a loan of A$172,727 (2023: A$172,727).
These loans, provided for the express purpose of acquiring shares under the Loan Funded Share
Plan, were subject to several key terms and conditions, as outlined below:
i.
The loans are non-recourse, meaning they are secured solely by the shares issued under
the Plan;
ii.
The loans are interest-free, providing Mr. Nania and Mr. Stanyer with a cost-effective
means of participating in the Plan;
iii.
The loans have a term of five years from the date of issue of the shares, subject to earlier
repayment in line with the terms of the Loan Funded Share Plan.
The Plan illustrates our commitment to aligning the interests of our key management personnel
with those of our shareholders, ensuring that their efforts contribute directly to enhancing
shareholder value. We believe that this structure not only benefits our employees but also our
shareholders, creating a clear link between remuneration and company performance.
The terms and conditions of the loan funded shares affecting remuneration of key management
personnel in this financial year or future reporting years are as follows:
Number of
loan funded
shares issued
Issue
price
AUD$
Issue date
Vesting date
and
exercisable
date
Expiry date
Fair value per
share at issue
date
AUD$
KMP
Aaryn Nania
20,612,180
0.009703
18 November
2022
7 July 2027
7 July 2028
0.008940
Ben Stanyer
17,801,400
0.009703
7 July 2022
7 July 2027
7 July 2028
0.010018
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 2024.
Options
There were no options issued, held or vested by Directors or Key Management Personnel during
the year ended 30 June 2024.
Performance Rights
Details of Performance Rights issued to Directors or Key Management Personnel during the year
ended 30 June 2024 and 30 June 2023 are detailed in the below table and the terms are described
above.
Connexion Mobility Ltd
24
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:
2024
Balance at
1 July 2023
Received as
part of
remuneration
Exercise of
performance
rights
Additions
Disposal
post
resignation
Other
Disposals
Balance as
at 30 June
2024
Directors
Greg Ross
2,704,600
-
-
-
-
-
2,704,600
Aaryn Nania
49,112,180
-
6,000,000
-
-
-
55,112,180
Robert
Downey
10,000,000
-
-
-
-
-
10,000,000
Samuel Baker
-
-
-
-
-
-
-
Nicholas
Kephala
72,000,000
-
-
3,000,000
-
-
75,000,000
Simon Scalzo
2,038,235
-
-
-
(2,038,235)
-
-
Other KMP
Ben Stanyer
20,091,400
-
-
-
-
-
20,091,400
2023
Balance at
1 July 2022
Received as
part of
remuneration
Exercise of
performance
rights
Additions
Disposal
post
resignation
Other
Disposals
Balance as
at 30 June
2023
Directors
Robert
Downey
10,000,000
-
-
-
-
-
10,000,000
Aaryn Nania
10,000,000
20,612,180
10,000,000
8,500,000
-
-
49,112,180
Greg Ross
-
-
-
2,704,600
-
-
2,704,600
Simon Scalzo
1,038,235
-
-
1,000,000
-
-
2,038,235
Other KMP
Ben Stanyer
-
17,801,400
-
2,290,000
-
-
20,091,400
Connexion Mobility Ltd
25
Remuneration Report (continued)
Additional disclosures relating to key management personnel (continued)
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:
2024
Balance at
1 July 2023
Received as
part of
remuneration
Exercise of
performance
rights
Additions
Forfeited as
a result of
resignation
Lapsed due
to vesting
condition
not met
Balance as
at 30 June
2024
Directors
Greg Ross
-
-
-
-
-
-
-
Aaryn Nania
-
-
(6,000,000)
8,000,000
-
(2,000,000)
-
Robert
Downey
-
-
-
-
-
-
-
Samuel Baker
-
-
-
-
-
-
-
Nicholas
Kephala
-
-
-
-
-
-
-
Simon Scalzo
-
-
-
-
-
-
-
Other KMP
Ben Stanyer
-
-
-
-
-
-
-
2023
Balance at
1 July 2022
Received as
part of
remuneration
Exercise of
performance
rights
Additions
Forfeited as
a result of
resignation
Lapsed due
to vesting
condition
not met
Balance as
at 30 June
2023
Directors
Robert
Downey
-
-
-
-
-
-
-
Aaryn Nania
4,000,000
-
(10,000,000)
8,000,000
-
(2,000,000)
-
Greg Ross
-
-
-
-
-
-
-
Simon Scalzo
-
-
-
-
-
-
-
Other KMP
Ben Stanyer
-
-
-
-
-
-
-
This concludes the Remuneration Report, which has been audited.
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
Lead Auditor’s Independence Declaration under Section 307C of
the Corporations Act 2001
To the directors of Connexion Mobility Limited
As lead auditor for the audit of Connexion Mobility Limited for the year ended 30 June 2024, I declare that,
to the best of my knowledge and belief, 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
This declaration is in respect of Connexion Mobility Limited and the entities it controlled during the year.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
R. P. Burt
Director
Melbourne, 15 August 2024
Connexion Mobility Ltd
27
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2024
Consolidated
2024
2023
Note
US$
US$
Revenue
3
9,841,340
6,629,284
Cost of Sales
(2,160,755)
(1,279,644)
Gross Profit
7,680,585
5,349,640
Other income
3
512,445
549,364
Expenses
Research and development expenses
(2,283,341)
(1,143,293)
Sales and marketing expenses
(997,920)
(696,704)
Corporate and administrative expenses
(2,216,840)
(1,425,128)
Depreciation and amortisation expenses
(32,205)
(37,659)
Profit before income tax
2,662,724
2,596,220
Income tax expense
5
(780,597)
(833,308)
Profit after income tax for the year attributable to the
owners of Connexion Mobility Ltd
1,882,127
1,762,912
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
44,276
(190,428)
Total comprehensive income attributable to the owners
of Connexion Mobility Ltd
1,926,403
1,572,484
Cents
Cents
Basic earnings per share
7
0.20
0.19
Diluted earnings per share
7
0.19
0.18
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes
Connexion Mobility Ltd
28
Consolidated Statement of Financial Position
As at 30 June 2024
Consolidated
2024
2023
Note
US$
US$
Assets
Current assets
Cash and cash equivalents
8
361,803
641,843
Trade and other receivables
9
2,916,411
2,634,549
Financial assets at fair value through profit or loss
10
4,633,824
2,811,183
Total current assets
7,912,038
6,087,575
Non-current assets
Plant and equipment
-
1,092
Capitalised development costs
-
31,649
Deferred tax asset
5
137,463
46,015
Total non-current assets
137,463
78,756
Total assets
8,049,501
6,166,331
Liabilities
Current liabilities
Trade and other payables
11
715,392
310,962
Current Tax Liability
5
788,606
433,451
Employee benefits
231,256
143,337
Total current liabilities
1,735,254
887,750
Non-current liabilities
Employee benefits
33,898
14,393
Total non-current liabilities
33,898
14,393
Total liabilities
1,769,152
902,143
Net assets
6,280,349
5,264,188
Equity
Issued capital
12
10,109,333
11,202,610
Reserves
13
73,464
(153,847)
Accumulated losses
(3,902,448)
(5,784,575)
Total equity
6,280,349
5,264,188
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes
Connexion Mobility Ltd
29
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
Consolidated
Issued
Capital
Share
based
payment
reserve
Loan
Funded
Share
Plan
Reserve
Foreign
currency
translation
reserve
Accumulate
d losses
Total
equity
US$
US$
US$
US$
US$
US$
Balance as at 1 July 2023
11,202,610
163,107
158,091
(475,045)
(5,784,575)
5,264,188
Profit for the year
-
-
-
-
1,882,127
1,882,127
Other comprehensive loss
for the year, net of income
tax
-
-
-
44,276
-
44,276
Total comprehensive loss
for the year
-
-
-
44,276
1,882,127
1,926,403
Share based payments
-
201,665
140,470
-
-
342,135
Lapse of performance
rights
-
-
-
-
-
-
Exercise of performance
rights
159,100
(159,100)
-
-
-
-
On-market Share Buyback
(1,252,377)
-
-
-
-
(1,252,377)
Foreign Exchange
translation cost
-
7,987
4,003
(11,990)
-
-
Balance as at 30 June 2024
10,109,333
213,659
302,564
(442,759)
(3,902,448)
6,280,349
Connexion Mobility Ltd
30
Consolidated Statement of Changes in Equity (continued)
For the year ended 30 June 2024
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying
notes
Consolidated
Issued
Capital
Share
based
payment
reserve
Loan
Funded
Share
Plan
Reserve
Foreign
currency
translation
reserve
Accumulate
d losses
Total
equity
US$
US$
US$
US$
US$
US$
Balance as at 1 July 2022
11,526,721
245,338
-
(297,199)
(7,559,594)
3,915,266
Profit for the year
-
-
-
-
1,762,912
1,762,912
Other comprehensive loss
for the year, net of income
tax
-
-
-
(190,428)
-
(190,428)
Total comprehensive loss
for the year
-
-
-
(190,428)
1,762,912
1,572,484
Share based payments
-
82,663
159,079
-
-
241,742
Lapse of performance
rights
-
(12,107)
-
-
12,107
-
Exercise of performance
rights
141,193
(141,193)
-
-
-
-
On-market Share Buyback
(465,304)
-
-
-
-
(465,304)
Foreign Exchange
translation cost
-
(11,594)
(988)
12,582
-
-
Balance as at 30 June 2023
11,202,610
163,107
158,091
(475,045)
(5,784,575)
5,264,188
Connexion Mobility Ltd
31
Consolidated Statement of Cash Flows
For the year ended 30 June 2024
Consolidated
2024
2023
Note
US$
US$
Cash flows from operating activities
Receipts from customers
9,594,329
5,407,622
Payments to suppliers and employees
(7,010,100)
(4,291,000)
Research & Development and other government incentives
370,579
24,489
Interest received
6,283
50
Income tax paid
(516,890)
(2,874)
Net cash inflow from operating activities
8
2,444,201
1,138,287
Cash flows from investing activities
Proceeds from disposal of investment portfolio
828,546
-
Payments for investment portfolio
(2,311,200)
(1,169,039)
Net cash outflow from investing activities
(1,482,654)
(1,169,039)
Cash flows from financing activities
Proceeds from issues of shares, net of costs
-
-
Payments for Share Buyback
(1,243,828)
(467,875)
Net cash outflow from financing activities
(1,243,828)
(467,875)
Net decrease in cash and cash equivalents
(282,281)
(498,627)
Cash and cash equivalents at the beginning of the financial
year
641,843
1,178,098
Effect of exchange rates on cash and cash equivalents
2,241
(37,628)
Cash and cash equivalents at the end of the financial year
8
361,803
641,843
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Connexion Mobility Ltd
32
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 Group has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current
reporting period. The adoption of these Accounting Standards and Interpretations did not have
any significant impact on the financial performance or position of the Group. Any new or amended
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
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 during the year were
the development and commercialisation of its fleet management software for the automotive
industry. Its registered office and principal place of business is:
Level 3, 162 Collins Street
Melbourne
Victoria, 3000
Australia
The accounting policies applied by the Group in these consolidated Finance Statements are
consistent with those applied by the Group in the previous year. The financial statements are
presented in US dollars, except where otherwise indicated.
The financial report was authorised for issue on 15 August 2024.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 30
June 2024.
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.
Connexion Mobility Ltd
33
Notes to the Financial Statements
Note 1: Basis of preparation (continued)
(b) Basis of consolidation (continued)
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.
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.
(c) Foreign currency translation
The functional currency of Connexion Mobility Ltd and its Australian subsidiaries is Australian
dollars. Each entity in the Group determines its own functional currency and is transferred to the
presentational currency of US Dollars.
The Company has progressed in securing its position in the US market with majority of revenue
received in US Dollars. On this basis, the parent entity and all the subsidiaries changed their
presentation currency from Australian Dollars to US Dollars, effective 1 July 2020.
Connexion Mobility Ltd
34
Notes to the Financial Statements
Note 1: Basis of preparation (continued)
(c) Foreign currency translation (continued)
Foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying the
exchange rates ruling at the date of the transaction. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at financial year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit
or loss.
Translation to presentation currency
The assets and liabilities of entities with a functional currency different to presentation currency
are translated into US Dollars using the exchange rates at the reporting date. The revenues and
expenses of these entities are translated into US Dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency
translation reserve in equity.
The foreign currency translation reserve is recognised in profit or loss when the entity or net
investment is disposed of.
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.
Note 2: 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.
Connexion Mobility Ltd
35
Notes to the Financial Statements
Note 2: Significant accounting estimates and judgements (continued)
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.
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 model in accordance with AASB 2 Share Based Payments,
using the assumptions detailed in Note 16.
Note 3: Revenue and other income
Consolidated
2024
2023
US$
US$
Revenue
Revenue from contracts with customers
9,841,340
6,629,284
Other income
Interest income
6,283
50
Governments grants – R&D refund
216,226
357,345
Government incentive – EMDG
20,630
24,489
Realised gain on investment portfolio
68,942
63,709
Income net of taxes and fees on investment portfolio
200,364
103,771
512,445
549,364
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.
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.
Connexion Mobility Ltd
36
Notes to the Financial Statements
Note 3: Revenue and other income (continued)
Interest income
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.
Note 4: Expenses
Expenses include the following specific expenses:
Consolidated
2024
2023
US$
US$
Wages and salaries
1,972,052
1,180,458
Share based payments expense – performance rights
201,665
82,663
Loan Funded Share Plan expense
140,470
159,079
Superannuation expense
210,505
125,200
Note 5: Income tax expense
(a) Income tax expense
Current tax expense – Australia
765,711
827,033
Current tax expense – United States
14,886
6,275
Current tax expense
780,597
833,308
Connexion Mobility Ltd
37
Notes to the Financial Statements
Note 5: Income tax expense (continued)
Consolidated
2024
2023
US$
US$
(b) Numerical reconciliation of income tax to prima
facie tax benefit
Profit from continuing operations before income tax
2,662,724
2,596,220
Tax at the Australian tax rate of 25% (2022: 25%)
665,681
649,055
Non-deductible expenses
85,534
57,409
R&D refundable rebate
(54,057)
(89,336)
Initial recognition of previously unrecognised deferred
tax assets
-
(12,635)
Tax expenditure of subsidiaries operating in different
jurisdictions
14,886
6,275
Adjustments recognised in the current year in relation to
the current tax of prior years
68,553
222,540
Current tax expense
780,597
833,308
(c) Deferred tax asset
Deferred tax asset
137,463
46,015
(d) Current tax liability
Current tax liability
788,606
433,451
The deferred tax asset comprises of taxable timing differences of assets and liabilities.
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.
Connexion Mobility Ltd
38
Notes to the Financial Statements
Note 5: Income tax expense (continued)
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.
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.
Connexion Mobility Ltd
39
Notes to the Financial Statements
Note 5: Income tax expense (continued)
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.
Note 6: Segment reporting
Identification of reportable operating segments
During the year ended 30 June 2024 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 2024, 99% of sales revenue was from
one customer located in the USA (2023: 99% revenue from one customer). All revenue is recorded
over time for rendering of services.
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 Mobility Ltd.
Note 7: Earnings per share
Basic and diluted earnings per share
Consolidated
2024
2023
From continuing operations
•
Basic earnings per share (cents per share)
0.20
0.19
•
Diluted earnings per share (cents per share)
0.19
0.18
Connexion Mobility Ltd
40
Notes to the Financial Statements
Note 7: Earnings per share (continued)
Earnings
Earnings used in the calculation of basic and diluted earnings per share is as follows:
Consolidated
2024
2023
US$
US$
Earnings from continued operations used in the calculation
of basic earnings per share
1,882,127
1,762,912
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
2024
2023
Number
Number
Weighted average number of ordinary shares for the
purpose of basic earnings per share
920,265,722
919,251,768
Shares deemed to be issued for no consideration in
respect of Performance shares (including US options plan)
45,714,659
43,252,862
Weighted average number of ordinary shares for the
purpose of diluted earnings per share
965,980,382
962,504,631
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.
Connexion Mobility Ltd
41
Notes to the Financial Statements
Note 8: Cash and cash equivalents
Consolidated
2024
2023
US$
US$
Cash at bank and on hand
361,803
641,843
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Reconciliation to the Statement of Cash Flows
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.
Reconciliation of profit for the year to net cash flows from operating activities
Consolidated
2024
2023
US$
US$
Profit after income tax expense for the year
1,882,127
1,762,912
Non cash foreign exchange movement
(36,659)
(128,888)
Equity settled share-based payment
342,135
241,742
Depreciation and amortisation
32,205
37,659
Investment portfolio movement
(269,306)
(167,480)
(Increase) / decrease in assets:
Trade and other receivables
(281,862)
(1,670,868)
Deferred tax asset
(91,448)
393,582
Increase / (decrease) in liabilities:
Trade and other payables
404,430
188,251
Employee benefits
107,424
47,926
Tax provisions
355,155
433,451
Net cash from operating activities
2,444,201
1,138,287
Connexion Mobility Ltd
42
Notes to the Financial Statements
Note 9: Trade and other receivables
Consolidated
2024
2023
US$
US$
Trade receivables
2,819,520
2,572,946
Less: allowance for credit losses
-
-
2,819,520
2,572,946
Other receivables
96,891
61,603
2,916,411
2,634,549
(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 16 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 2024 and 30 June 2023 is detailed in the table below:
Consolidated
2024
2023
US$
US$
Current
1,113,254
1,090,805
1 month
864,603
736,138
2 months
841,663
746,003
3 months
-
-
Older
-
-
2,819,520
2,572,946
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.
Connexion Mobility Ltd
43
Notes to the Financial Statements
Note 10: Financial assets at fair value through profit or loss
2024
2023
US$
US$
Current Assets
Investment in financial assets
4,633,824
2,811,183
Reconciliation
Reconciliation of the fair values at the beginning and end of the
current and previous financial periods are set out below:
Opening Fair value
2,811,183
1,493,754
Net additions
2,311,200
1,169,039
Net disposals
(828,546)
-
Revaluation taken to profit or loss
269,306
167,480
Net exchange difference on translation
70,681
(19,090)
Closing fair value
4,633,824
2,811,183
The revaluation taken to profit or loss number above of $269,306 is comprised of $68,942 realised
gain of investments and $200,364 of income net of taxes and fees. Refer to note 17 for further
information on fair value measurement.
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit
or loss. Such assets are subsequently measured at either amortised cost or fair value depending
on their classification. Classification is determined based on both the business model within which
such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset,
it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss. Typically, such financial
assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the
short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon
initial recognition where permitted. Fair value movements are recognised in profit or loss.
Connexion Mobility Ltd
44
Notes to the Financial Statements
Note 11: Trade and other payables
Consolidated
2024
2023
US$
US$
Trade payables
250,143
187,006
Other payables
465,249
123,956
715,392
310,962
(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 18.
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.
Note 12: Issued capital
Ordinary shares on issue
Consolidated
2024
2023
US$
US$
Ordinary shares issued and fully paid
10,109,333
11,202,610
Less: Treasury Shares
-
-
10,109,333
11,202,610
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.
Connexion Mobility Ltd
45
Notes to the Financial Statements
Note 12: Issued capital (continued)
Movement in ordinary shares on issue
Date
Detail
Number
Issue price
(cents)
US$
1 July 2022
Opening balance
881,031,779
11,595,868
26 August 2022
Conversion of performance
rights
3,000,000
0.010
31,068
4 November 2022
Conversion of performance
rights
10,000,000
0.010
96,671
21 November
2022
Cancellation of ordinary
shares
(40,124,817)
0.007
(264,508)
24 November
2022
Tranche A – Loan Shares
80,268,575
-
-
24 November
2022
Tranche B – Loan Shares
20,612,180
-
-
8 December 2022
Conversion of performance
rights
750,000
0.010
7,612
23 December 2022
Cancellation of ordinary
shares
(21,446,912)
0.007
(143,918)
30 December 2022
Tranche C – Loan Shares
9,475,248
-
-
1 March 2023
Conversion of performance
rights
300,000
0.010
3,044
7 March 2023
Cancellation of ordinary
shares
(29,160)
0.007
(192)
13 April 2023
Conversion of performance
rights
275,000
0.010
2,798
15 May 2023
Cancellation of ordinary
shares
(10,422,476)
0.012
(125,833)
16 June 2023
Tranche E – Loan Shares
8,777,451
-
-
30 June 2023
Closing balance
942,466,868
11,202,610
Connexion Mobility Ltd
46
Notes to the Financial Statements
Note 12: Issued capital (continued)
Movement in ordinary shares on issue (continued)
Date
Detail
Number
Issue price
(cents)
US$
10 July 2023
Conversion of performance
rights
4,500,000
0.010
45,220
29 September
2023
Cancellation of ordinary
shares
(4,820,480)
0.014
(68,315)
10 November
2023
Cancellation of ordinary
shares
(8,179,520)
0.014
(114,262)
24 November
2023
Conversion of performance
rights
10,800,000
0.010
106,654
1 December 2023
Cancellation of ordinary
shares
(24,000,000)
0.014
(341,730)
28 December 2023
Cancellation of ordinary
shares
(18,000,000)
0.014
(258,635)
29 December 2023
Conversion of performance
rights
275,000
0.010
2,815
12 February 2024
Conversion of performance
rights
450,000
0.010
4,411
23 February 2024
Cancellation of ordinary
shares
(3,233,773)
0.013
(42,466)
20 June 2024
Cancellation of ordinary
shares
(12,000,000)
0.019
(223,474)
28 June 2024
Cancellation of ordinary
shares
(11,293,091)
0.018
(203,495)
30 June 2024
Closing balance
876,965,004
10,109,333
Connexion Mobility Ltd
47
Notes to the Financial Statements
Note 12: Issued capital (continued)
Movement in treasury shares on issue
Date
Detail
Number
Issue price
(cents)
US$
1 July 2022
Opening balance
(10,000,000)
(69,147)
July 2022
Purchase of shares through
Treasury Reserve
(10,000,000)
0.007
(67,894)
August 2022
Purchase of shares through
Unmarketable Parcel
buyback
(6,213,909)
0.007
(43,697)
October 2022
Purchase of shares through
Treasury Reserve
(20,000,000)
0.006
(127,709)
November 2022
Purchase of shares through
Treasury Reserve
(10,000,000)
0.007
(66,802)
November 2022
Cancellation of ordinary
shares
40,124,817
0.007
264,508
December 2022
Purchase of shares through
Treasury Reserve
(10,000,000)
0.007
(67,178)
December 2022
Cancellation of ordinary
shares
21,446,912
0.007
143,918
March 2022
Cancellation of ordinary
shares
29,160
0.007
192
April 2022
Purchase of shares through
Treasury Reserve
(5,809,456)
0.016
(94,595)
May 2022
Cancellation of ordinary
shares
10,422,476
0.012
125,833
June 2022
Net exchange difference on
translation
-
2,571
30 June 2023
Closing balance
-
-
July 2023
Purchase of shares through
Treasury Reserve
(5,000,000)
0.015
(73,655)
August 2023
Purchase of shares through
Treasury Reserve
(5,000,000)
0.014
(71,149)
September 2023
Cancellation of ordinary
shares
4,820,480
0.014
68,135
October 2023
Purchase of shares through
Treasury Reserve
(3,000,000)
0.014
(41,699)
November 2023
Purchase of shares through
Treasury Reserve
(24,000,000)
0.014
(335,861)
November 2023
Cancellation of ordinary
shares
8,179,520
0.014
114,263
December 2023
Purchase of shares through
Treasury Reserve
(18,000,000)
0.014
(253,956)
Connexion Mobility Ltd
48
Notes to the Financial Statements
Note 12: Issued capital (continued)
Movement in treasury shares on issue (continued)
Date
Detail
Number
Issue price
(cents)
US$
December 2023
Cancellation of ordinary
shares
42,000,000
0.014
600,365
January 2024
Purchase of shares through
Treasury Reserve
(3,000,000)
0.013
(39,485)
February 2024
Purchase of shares through
Treasury Reserve
(233,773)
0.013
(3,033)
February 2024
Cancellation of ordinary
shares
3,233,773
0.013
(42,466)
May 2024
Purchase of shares through
Treasury Reserve
(261,406)
0.019
(4,862)
June 2024
Purchase of shares through
Treasury Reserve
(23,031,685)
0.018
(420,127)
June 2024
Cancellation of ordinary
shares
23,293,091
0.018
426,968
June 2024
Net exchange difference on
translation
(8,370)
30 June 2024
Closing balance
-
-
Ordinary shares
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.
Treasury shares
Treasury shares are used to record the purchase of shares by the Company in the open market.
The shares are bought back on-market value. The account is recognised at purchase price.
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.
Connexion Mobility Ltd
49
Notes to the Financial Statements
Note 13: 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 the exchange differences arising from
the translation of entities with a functional currency other than USD.
Note 14: Share-based payment plans
Movement in performance rights
Date
Detail
Number
Fair value
at grants
date
(cents)
US$
1 July 2022
Opening balance
38,033,334
245,338
26 August 2022
Conversion of performance
rights
(3,000,000)
0.010
(31,068)
4 November 2022
Conversion of performance
rights
(10,000,000)
0.010
(96,671)
21 February 2022
Forfeiture of performance
rights
(3,841,667)
(12,107)
8 December 2022
Conversion of performance
rights
(750,000)
0.010
(7,612)
1 March 2023
Conversion of performance
rights
(300,000)
0.010
(3,044)
13 April 2023
Conversion of performance
rights
(275,000)
0.010
(2,798)
30 June 2023
Vesting charge of
performance rights
-
71,069
30 June 2023
Closing balance
19,866,667
163,107
10 July 2023
Conversion of performance
rights
(4,500,000)
0.010
(45,220)
24 November
2023
Forfeiture of performance
rights
(3,841,666)
-
24 November
2023
Conversion of performance
rights
(4,500,000)
0.010
(44,439)
24 November
2023
Conversion of performance
rights
(300,000)
0.010
(2,963)
Connexion Mobility Ltd
50
Notes to the Financial Statements
Note 14: Share-based payment plans (continued)
Movement in performance rights (continued)
Date
Detail
Number
Fair value
at grants
date
(cents)
US$
24 November
2023
Conversion of performance
rights
(6,000,000)
0.010
(59,252)
15 December
2023
Issue of performance rights
11,415,839
-
15 December
2023
Issue of performance rights
17,376,078
-
29 December
2023
Conversion of performance
rights
(275,000)
0.010
(2,815)
12 February 2024
Conversion of performance
rights
(450,000)
0.010
(4,411)
30 June 2024
Vesting charge of
performance rights
-
201,665
30 June 2024
Foreign exchange translation
costs
-
7,987
30 June 2024
Closing balance
28,791,918
213,659
Performance Rights Plan (“PRP”)
During the period, the Company executed a PRP to senior executives, which was approved by
shareholders at the Company’s Annual General Meeting, held on 16 November 2023.
As approved by shareholders, the Company issued the following under the PRP:
•
11,314,655 performance rights to other Officers and Employees of the Company;
•
11,415,839 performance rights to Aaryn Nania (or his nominee/s); and
•
6,061,423 performance rights to Ben Stanyer (or his nominee/s).
The fair value of the performance rights issued were valued by an external valuer using a
Binominal Option Valuation model. The key inputs to the valuation were the following: Grant date
16 November 2023 and 28 November 2023, expiry date of 31 August 2029, exercise price of A$nil,
volatility of 110.98% and 113.3% and a risk free rate of 4.21% and 4.24%, and a value per right
ranging between A$0.0196 and A$0.0213.
The above performance rights each convert into one (1) ordinary share for no consideration on
exercise by the holder once vested. The total number of Performance Rights to be granted shall
be based on the following table:
Tranche
1
2
3
Vesting Date
31 August 2024
31 August 2025
31 August 2026
Ordinary Shares
9,597,306
9,597,306
9,597,305
Connexion Mobility Ltd
51
Notes to the Financial Statements
Note 14: Share-based payment plans (continued)
The vesting condition for each tranche of Performance Rights shall be measured against the
following performance criteria:
i.
Up to 75% of each tranche of the Performance Rights will vest subject to the Company
achieving the Diluted Maintainable Earnings Per Share (DMEPS) target for Financial Year
2024 (FY24) in accordance with;
Threshold
DMEPS outcome
% of
Performance
Rights vested
# of Performance Rights
vested
Failed
Below 10% on PY
0%
-
Part-Success
10% - 20% on PY
40%
8,637,579
Target
20% - 30% on PY
80%
17,275,158
Stretch
30%+ on PY
100%
21,593,948
Note: PY means prior financial year being for the year ended 30 June 2023.
ii.
Up to 25% of each tranche of the Performance Rights will vest subject to the Company
achieving the Return on Growth Spend (RGS) target for FY24 in accordance with;
Threshold
RGS outcome
% of
Performance
Rights vested
# of Performance Rights
vested
Failed
Below 25%
0%
-
Part-Success
25% - 50% on PY
40%
2,879,188
Target
50% - 75% on PY
80%
5,758,375
Stretch
75%+ on PY
100%
7,197,969
Further, the vesting of any Performance Rights is conditional on the Employees continued employment with
the Company on the relevant Vesting Date (unless the Board determines otherwise).
DMEPS and RGS are financial metrics, designed to measure performance with greater scrutiny.
Both DMEPS and RGS are explained in further detail, as announced to the ASX on 16 October 2023
in our Performance Reporting update. DMEPS outcome was 32%, and RGS outcome was 85%, both
achieving Stretch threshold.
As at 30 June 2024, no service vesting conditions were met for the performance rights, but stretch
thresholds have been achieved as at 30 June 2024 for both DMEPS and RGS. The fair value of each
performance right is A$0.0196 and A$0.0213. This value was confirmed by an independent
valuation. The total expense in the period to 30 June 2024 of the newly issued performance rights
was US$204,162.
As approved by shareholders at the 2021 AGM, the Company had issued the following
performance rights under the PRP:
•
25,000,000 performance rights to other Officers and Employees of the Company; and
•
24,000,000 performance rights to Aaryn Nania (or his nominee/s).
Connexion Mobility Ltd
52
Notes to the Financial Statements
Note 14: Share-based payment plans (continued)
The below PRP has finished as at 30 June 2024 and all performance rights have been converted.
The above performance rights each convert into one (1) ordinary share for no consideration on
exercise by the holder once vested. The total number of Performance Rights to be granted shall
be based on the following table:
Year
1
2
3
Date
30 September 2021
30 September 2022
30 September 2023
16,333,334¹
15,366,6662
15,366,6662
¹
The Performance Rights Plan had a maximum 16,333,334 ordinary shares on issue. Only two
of the four vesting conditions below were met, resulting in only 8,166,667 ordinary shares
available. All 8,166,667 performance rights have been converted to ordinary shares by 30 June
2024.
2 The Performance Rights Plan had a maximum 15,366,666 ordinary shares on issue, a decrease
of 966,667 due to staff resignations. Three of the four vesting conditions below were met,
resulting in only 11,525,000 ordinary shares available. All 11,525,000 performance rights were
converted to ordinary shares. No performance rights were exercisable as at 30 June 2024.
The vesting condition for each tranche of Performance Rights shall be measured against the
following performance criteria, with a 25% weighting for each of the below:
ii.
Renewal and subsequent maintenance of the GM OnTRAC contract of commercial terms
equal to or better than the Original Contract;
iii.
Signed commercial contract with a Non-GM OEM Client;
iv.
The Company achieving NPBT against Budget for the relevant just-concluded financial
year, taking into account uncontrollable items at the discretion of the Board; and
v.
Upon the CXZ 30-day VWAP trading at or above the Performance Price in the six months
preceding each respective eligible vesting date. Performance Prices are as follows:
a. AUD$0.025 for a vesting date of 30 September 2021;
b. AUD$0.035 for a vesting date of 30 September 2022; and
c. AUD$0.045 for a vesting date of 30 September 2023.
As at 30 June 2024, vesting conditions i, ii, and iii. were met for year three and the performance
rights had vested. The performance rights which were converted are detailed above in note 13,
with all performance rights converted. The fair value of each performance right was AUD 1.5 cents,
being the share price on the day of issue. This value was confirmed by an independent valuation.
Connexion Mobility Ltd
53
Notes to the Financial Statements
Note 14: Share-based payment plans (continued)
Employee Share Scheme (“ESS”)
The Company established an ESS, which was approved by shareholders at the Company’s AGM,
held on 17 November 2022. This ESS includes a Loan Funded Share Plan for Australian based
participants (see (a) below) and the US Equity Option Plan for participants based in the USA (see
(b) below).
(a) Movement in Loan Funded Share Plan shares
During the period no new loan shares were issued to staff pursuant to the Loan Funded Share
Plan (LFSP). The only movement related to the US Equity Option Plan, which is captured under this
ESS, as the only participant voluntarily forfeited their options for nil consideration, in light of the
employee’s continuing service. The loan shares have been valued by an independent expert as of
issue date and have vesting criteria based on achieving employment service periods. Details are
as follows:
Date
Detail
Number
Fair value
per share
at issue
date
AUD$
US$
1 July 2022
Opening balance
-
-
7 July 2022
Tranche A – Loan
Shares
80,268,575
0.010018
101,494
18 November
2022
Tranche B – Loan
Shares
20,612,180
0.008940
24,561
18 November
2022
Tranche C – Loan
Shares
9,475,248
0.009028
7,601
18 November
2022
Tranche D – Option
Shares
28,277,657
0.009028
22,684
16 June 2023
Tranche E – Loan
Shares
8,777,451
0.017963
1,751
30 June 2023
Closing balance
147,411,111
158,091
2 May 2024
Forfeiture of Tranche D
– Option Shares
(28,277,657)
(35,548)
30 June 2024
Vesting charge of loan
shares
-
176,018
30 June 2024
Foreign exchange
translation costs
-
4,003
30 June 2024
Closing balance
119,133,454
302,564
Connexion Mobility Ltd
54
Notes to the Financial Statements
Note 14: Share-based payment plans (continued)
Tranche
Number of
loan shares
Service based vesting
conditions
Fair value
per share
at issue
date
AUD$
Total fair
value at
vesting
date
AUD$
Tranche A
80,268,575
Vesting on 7 July 2027
0.010018
804,130
Tranche B
20,612,180
Vesting on 7 July 2027
0.008940
184,273
Tranche C
9,475,248
Vesting on 18 November 2027
0.009028
85,543
Tranche E
8,777,451
Vesting 16 June 2028
0.017963
157,669
Total
119,133,454
1,231,615
(b) Movement in US Equity Option Plan options
During the period 28,277,657 option shares were voluntarily forfeited for nil consideration. This
plan is only offered to USA based staff, as they are ineligible for the LFSP. Any new shares will be
valued by an independent expert as of issue date and have vesting criteria based on achieving
employment service periods.
Expenses arising from share-based payments
Net charges arising from share-based payment transactions recognised during the period were
US$342,135 (2023: US$241,742). The expenses were comprised of US$201,665 for PRP and
US$140,470 for LFSP.
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 are currently three plans in place to provide these
benefits, being the Performance Rights Plan (‘PRP’) and Employee Share Scheme (‘ESS’), which
comprises of a Loan Funded Share Plan and US Equity Option Plan. These plans in place provide
benefits to Employees, 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 Hybrid 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).
Connexion Mobility Ltd
55
Notes to the Financial Statements
Note 14: Share-based payment plans (continued)
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.
Note 15: 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.
Capital risk management
The capital structure of the Group consists of cash and cash equivalents, borrowings (currently
none) 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.
Connexion Mobility Ltd
56
Notes to the Financial Statements
Note 15: Financial instruments (continued)
Exposure to currency risk
Foreign exchange risk arises from future commercial transactions and recognised financial assets
and financial liabilities denominated in a currency that is not the entity's functional currency. The
risk is measured using sensitivity analysis and cash flow forecasting. The consolidated entity is
most exposed to fluctuations in the USD to AUD foreign exchange rate. Should this rate increase
or decrease by 10% it would increase or decrease the profit after tax for the year by $55,036.
The group’s exposure to foreign currency risk at the reporting date was as follows, based on
notional amounts:
2024
AUD
USD
CAD
US$
US$
US$
Total
Cash and cash
equivalents
263,168
70,748
27,887
361,803
Trade and other
receivables
2,911,461
4,950
-
2,916,411
Trade and other payables
(681,144)
(34,248)
-
(715,392)
Balance sheet exposure
2,493,485
41,450
27,887
2,562,822
2023
AUD
USD
CAD
US$
US$
US$
Total
Cash and cash
equivalents
544,841
66,303
30,699
641,843
Trade and other
receivables
2,634,549
-
-
2,634,549
Trade and other payables
(296,310)
(14,652)
-
(310,962)
Balance sheet exposure
2,883,080
51,651
30,699
2,965,430
The following significant exchange rates (US$1.00) applied during the period.
Average rate
Year-end date spot rate
12 months
ended
12 months
ended
30 June
30 June
30 June 2024
30 June 2023
2024
2023
AUD
1.5256
1.4854
1.4941
1.5006
CAD
1.3552
1.3395
1.3694
1.3235
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.
Connexion Mobility Ltd
57
Notes to the Financial Statements
Note 15: Financial instruments (continued)
Financial risk management objectives (continued)
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 through the
instruments above. The Group has reduced its foreign exchange risk through initiatives mentioned
in the Review of operations in the Directors Report.
Interest rate risk
The Group is not exposed to any interest rate risk.
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.
Connexion Mobility Ltd
58
Notes to the Financial Statements
Note 15: 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:
2024
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
%
US$
US$
US$
US$
US$
US$
Non-derivatives
Non-interest bearing
Trade and other
payables
0%
715,392
-
-
-
-
715,392
Total non-derivatives
715,392
-
-
-
-
715,392
2023
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
%
US$
US$
US$
US$
US$
US$
Non-derivatives
Non-interest bearing
Trade and other
payables
0%
310,962
-
-
-
-
310,962
Total non-derivatives
310,962
-
-
-
-
310,962
Fair value measurements
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 2024 and 30 June 2023:
Consolidated
2024
2023
US$
US$
Assets
Cash and cash equivalents
361,803
641,843
Trade and other receivables
2,916,411
2,634,549
Investments
4,633,824
2,811,183
Total assets
7,912,038
6,087,575
Liabilities
Trade and other payables
715,392
310,962
Total liabilities
715,392
310,962
Connexion Mobility Ltd
59
Notes to the Financial Statements
Note 16: Fair value measurement
Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value,
using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair
value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset
of liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset of liability.
Consolidated – 30 June 2024
Level 1
Level 2
Level 3
Total
$
$
$
$
Assets
Listed ordinary shares
4,633,824
-
-
4,633,824
Unlisted ordinary shares
-
-
-
-
Total assets
4,633,824
-
-
4,633,824
Consolidated – 30 June 2023
Level 1
Level 2
Level 3
Total
$
$
$
$
Assets
Listed ordinary shares
2,811,183
-
-
2,811,183
Unlisted ordinary shares
-
-
-
-
Total assets
2,811,183
-
-
2,811,183
There were no transfers between levels during the financial period.
The carrying amounts of trade and other receivables, trade and other payables and other
financial liabilities approximate their fair values due to their short-term nature.
Fair value is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming they act in their economic best interests. For non-financial assets,
the fair value measurement is based on its highest and best use. Valuation techniques that are
appropriate in the circumstances and for which sufficient data are available to measure fair value,
are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Connexion Mobility Ltd
60
Notes to the Financial Statements
Note 17: Contingent liabilities and assets
The Group has no contingent liabilities and assets as at 30 June 2024 (2023: nil).
Note 18: Related party disclosure
Key Management Personnel
The following persons were Directors of Connexion Mobility Ltd during the financial year and are
also identified as Key Management Personnel (“KMP”):
•
Greg Ross
•
Aaryn Nania
•
Robert Downey
•
Samuel Baker
•
Nicholas Kephala
•
Simon Scalzo
•
Ben Stanyer
Transactions with KMP
The aggregate compensation made to Directors and other KMP of the Group is set out below:
Consolidated
2024
2023
US$
US$
Short-term employee benefits
599,177
356,167
Post-employment benefits
41,137
31,462
Long-term benefits
7,028
2,501
Share-based payments
176,665
91,280
824,007
481,410
Other transactions with KMP
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 advisory services of MobilityFund during the year, an advisory firm associated
with Samuel Baker. The amounts billed related to this advisory service amounted to US$105,000
excluding GST (2023: $nil), based on normal market rates and no amounts remained unpaid at the
balance date.
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 US$1,591
excluding GST (2023: US$682 excluding GST), based on normal market rates and no amounts
remained unpaid at the balance date.
There were no loans to/from related parties during the current or previous reporting period.
Connexion Mobility Ltd
61
Notes to the Financial Statements
Note 19: Interest in subsidiaries
Connexion Mobility Ltd is the ultimate Australian parent entity and ultimate parent of the Group.
The consolidated financial statements incorporate the assets, liabilities and results of the following
wholly owned subsidiaries in accordance with the accounting policy described in Note 1:
Ownership interest
2024
2023
Entity name
Country of incorporation
%
%
Connexion Media Inc
United States of America
100
100
Connexion LLC
United States of America
100
100
1125816 B.C. Ltd
Canada
100
100
CXZ Mexico
Mexico
100
100
Note 20: Parent entity disclosures
Statement of profit or loss and other comprehensive income
Consolidated
2024
2023
US$
US$
Profit for the year
550,360
3,185,411
Other comprehensive income
44,276
(190,428)
Total comprehensive income
594,636
2,994,983
Statement of financial position
Consolidated
2024
2023
US$
US$
Current assets
7,808,453
5,990,573
Non-current assets
800,971
1,529,222
Current liabilities
(1,699,572)
(439,647)
Non-current liabilities
(33,898)
(14,393)
Net assets
6,875,954
7,065,755
Equity
Issued capital
10,109,333
11,202,610
Reserves
516,223
163,107
Accumulated losses
(3,749,602)
(4,299,962)
Total equity
6,875,954
7,065,755
The financial information for the parent entity, Connexion Mobility Ltd, has been prepared on the
same basis as the consolidated financial statements.
Connexion Mobility Ltd
62
Notes to the Financial Statements
Note 20: Parent entity disclosures (continued)
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 2024
and 30 June 2023.
Contingent liabilities of the parent entity
As at 30 June 2024 Connexion Mobility Ltd has no contingent liabilities (2023: nil).
Note 21: Auditors remuneration
The Auditor of Connexion Mobility Ltd is William Buck.
During the financial year the following fees were paid or payable for services provided by William
Buck:
Consolidated
2024
2023
US$
US$
Audit services - William Buck
Audit or review of the financial statements
37,866
29,907
Other services - William Buck
Other non-assurance services, including taxation
28,714
23,859
Total auditor’s remuneration
66,580
53,766
Note 22: Significant events after balance date
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.
Connexion Mobility Ltd
63
Consolidated Entity Disclosure Statement
Bodies corporate
Tax residency
Entity name
Entity type
Place
formed or
incorporated
% of share
capital held
Australian or
Foreign
Foreign
Jurisdiction
Connexion Mobility
Ltd
Body Corporate
Australia
n/a
Australian
N/A
Connexion
Media
Inc
Body Corporate
United States
100%
Australian &
Foreign
United States
Connexion LLC
Body Corporate
United States
100%
Australian &
Foreign
United States
1125816 B.C. Ltd
Body Corporate
Canada
100%
Australian &
Foreign
Canada
CXZ Mexico
Body Corporate
Mexico
100%
Australian &
Foreign
Mexico
Basis of preparation
This Consolidated entity disclosure statement (CEDS) has been prepared in accordance with the
Corporations Act 2001 and includes information for each entity that was part of the Group as at
the end of the financial year in accordance with AASB 10 Consolidated Financial Statements.
Determination of tax residency
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in
the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as
there are different interpretations that could be adopted, and which could give rise to a different
conclusion on residency.
In determining tax residency, the Group has applied the following interpretations:
Australian tax residency
The Group has applied current legislation and judicial precedent, including having regard to the
Tax Commissioner's public guidance in Tax Ruling TR 2018/5.
Foreign tax residency
Where necessary, the Group has used independent tax advisers in foreign jurisdictions to assist
in its determination of tax residency to ensure applicable foreign tax legislation has been
complied with (see section 295(3A)(vii) of the Corporations Act 2001).
Partnerships and Trusts
None of the entities noted above were trustees of trusts within the Group, partners in a
partnership within the Group or participants in a joint venture within the Group
Connexion Mobility Ltd
64
Directors’ Declaration
In the Directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the
Australian 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 2024 and of its performance for the financial year
ended on that date;
•
the consolidated entity disclosure statement on page 63 is true and correct; 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
Managing Director and Chief Executive Officer
Sydney, 15 August 2024
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report to the members of Connexion Mobility
Limited
Report on the audit of the financial report
Our opinion on the financial report
In our opinion, the accompanying financial report of Connexion Mobility Limited (the Company) and its
subsidiaries (the Group) is in accordance with the Corporations Act 2001, including:
— giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial
performance for the year then ended; and
— complying with Australian Accounting Standards and the Corporations Regulations 2001.
What was audited?
We have audited the financial report of the Group, which comprises:
— the consolidated statement of financial position as at 30 June 2024,
— the consolidated statement of profit or loss and other comprehensive income for the year then ended,
— the consolidated statement of changes in equity for the year then ended,
— the consolidated statement of cash flows for the year then ended,
— notes to the financial statements, including material accounting policy information,
— the consolidated entity disclosure statement, and
— the directors’ declaration.
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 & 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 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.
1. Recognition
of revenue and
receivables
Area of focus
(refer also to note 3)
The Company has service agreements
with its customers. These service
contracts have invoicing and payment
milestones included within their terms,
which may or may not be directly aligned
with the performance of services under
the contract in accordance with AASB 15
Revenue from Contracts with Customers
(‘AASB 15’).
Revenue has significantly grown in the
current financial year due to the increased
volume of transactions with its key
customer. The Company’s revenue
stream has a tailored revenue recognition
model to account for revenue in
accordance with AASB 15.
This area is a key audit matter as revenue
requires:
— Applying judgement to when the
performance milestone is achieved
in respect of the contracted
performance obligations;
— The significance of revenue to the
Group’s financial results; and
— Level of subjectivity involved in
determining the satisfaction of the
performance obligations over time or
at a point in time.
How our audit addressed the key
audit matter
Our audit procedures included:
— Determining whether revenue
recognised is in-compliance with
the Company’s accounting policies
for all material sources of revenue
and is in accordance with AASB 15;
— Examining and verifying a sample
of contract agreements for the
achievement of performance
milestones relevant to key customer
contracts;
— Examining a sample of customer
contracts to support the existence
and completeness of revenue in the
period recognised by agreeing to
contract, invoices and subsequent
receipts from customers
— Performing detailed cut-off testing
to assess revenue transactions at
the year-end had been recorded in
the correct financial period; and
— Examining a sample of aged trade
debtors for evidence of collectability
and/or for disputes with the services
provided.
We also assessed the
appropriateness of financial
statement disclosures at note 3 with
respect to the requirements of AASB
15.
2. Accounting
for share based
payment
arrangements
Area of focus
(refer also to notes 14)
During the year, the Company issued
performance rights (‘Performance Rights
Plan’) employee options to Key
Management Personnel and employees.
How our audit addressed the key
audit matter
Our audit procedures included:
— Assessing the nature of the
performance rights share awards
with respect to meeting the
requirements of AASB 2;
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 2024, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
The performance rights were assessed by
management to meet the definition of
AASB 2 Share Based Payments and
included market and non-market vesting
criteria, including service (employment)
conditions.
The valuation of performance rights
required significant judgement and
expertise, particularly in determining the
likelihood of achieving the non-market-
based conditions and satisfying all service
vesting conditions.
The Group engaged an independent
specialist to appraise the fair value of the
share-based payment arrangements and
recognised the vesting charge
apportioned over the service condition.
This area was considered a Key Audit
Matter due to the complexity of
arrangements and judgements applied in
valuing the share-based payment
instruments issued.
— Agreeing the material terms and
conditions of the new share-based
payment arrangements to plan
documentation;
— Assessing the appropriateness of
the determination of the grant date
for each share based payment
issued;
— Examining the appropriateness of
the amortisation model for accreting
share-based payment expense to
the profit or loss over the vesting
period;
— Assessing support for likely
outcome of vesting conditions used
to measure share-based payments;
and
— Assessed the competence and
qualification of management’s
independent specialist.
We also assessed the adequacy of
financial statement disclosures in
note 14 in relation to the loan funded
share options in the Remuneration
Report and notes to the financial
report.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
— the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
— the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
— the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
— the consolidated entity disclosure statement that is true and correct and is free of 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 have 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 the financial report is located at the Auditing and
Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Our opinion on the Remuneration Report
In our opinion, the Remuneration Report of Connexion Mobility Limited, for the year ended 30 June 2024,
complies with section 300A of the Corporations Act 2001.
What was audited?
We have audited the Remuneration Report included in pages 16 to 25 of the directors’ report for the year
ended 30 June 2024.
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 Limited
ABN 59 116 151 136
R. P. Burt
Director
Melbourne, 15 August 2024
Connexion Mobility Ltd
70
Shareholder Information
The shareholder information set out below was applicable as at 11 August 2024.
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
No. Holder
Shares
%
1
WESTFERRY OPERATIONS PTY LTD
68,200,000
7.78%
2
SECOND LAGOON PTY LTD
55,112,180
6.28%
3
GRAHAM NEWMAN PTY LTD
50,000,000
5.70%
4
BNP PARIBAS NOMINEES PTY LTD
38,784,832
4.42%
5
EMIRENE PTY LTD
38,209,625
4.36%
6
H&G HIGH CONVICTION LIMITED
34,140,351
3.89%
7
GREENHILL FZCO
28,044,610
3.20%
8
MR NICHOLAS MICHAEL KEPHALA & MRS VIRGINIA LOUISE
WALLACE
25,000,000
2.85%
9
BEN STANYER
20,091,400
2.29%
10
DR DAVID GEORGE M WELSH
20,000,000
2.28%
11
MR GREGORY PETER WILSON
18,000,000
2.05%
12
MR ROBERT CAMERON GALBRAITH
13,455,057
1.53%
13
MR DOUG MCPHEE
12,536,700
1.43%
14
MR JIING KUEH
12,446,215
1.42%
15
MR TAN CHING KHOON
12,198,517
1.39%
16
KASSETT PTY LTD
12,000,000
1.37%
17
PMDD SUPER PTY LTD
11,321,500
1.29%
18
SHIH KANG THEN
11,254,250
1.28%
19
MR DANIEL KING SENG CHAN
11,103,625
1.27%
20
MRS STELLA EMILY DOWNEY
10,000,000
1.14%
Total Securities of Top 20 Holdings
501,898,862
57.23%
Total of Securities
876,963,970
Connexion Mobility Ltd
71
Shareholder Information (continued)
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
Number
of holders
Total units
of ordinary
% Issued of
Share Capital
of
ordinary
shares
shares
1 to 1,000
33
6,848
>0.01%
1,001 to 5,000
13
32,764
>0.01%
5,001 to 10,000
8
58,583
0.01%
10,001 to 100,000
312
19,661,073
2.24%
100,001 and over
543
857,204,702
97.75%
909
876,963,970
100%
Holding less than a marketable parcel
66
Substantial holders
The following three shareholders are considered substantial holders in the Company based on
their holding and interest in other holdings.
Holder
Shares
% IC
GRAHAM NEWMAN PTY LTD
75,000,000
8.55%
WESTFERRY OPERATIONS PTY LTD
68,200,000
7.78%
SECOND LAGOON PTY LTD
55,112,180
6.28%
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.
On-market buy-back
The Company is currently conducting an on-market buy-back.