Flexiroam Annual Report 2023

Plain-text annual report

Flexiroam Limited ABN 47 090 671 819 and its Controlled Entities FLEXIROAM APPENDIX 4E RESULTS FOR ANNOUNCEMENT TO THE MARKET Revenue from ordinary activities Proﬁt/(loss) after tax from ordinary activities attributable to members Net proﬁt/(loss) for the period attributable to members DIVIDEND INFORMATION % INCREASE / (DECREASE) 3 MONTHS ENDED 30 JUN 2023 $ 12 MONTHS ENDED 31 MAR 2023 $ (69.0) 213.6 2,763,534 8,904,626 2,995,460 (2,637,526) 213.6 2,995,460 (2,637,526) AMOUNT PER SHARE FRANKED AMOUNT PER SHARE Dividend – current reporting period Dividend – previous reporting period Nil Nil TANGIBLE ASSET BACKING PER ORDINARY SHARE ISSUED CAPITAL (NUMBER) CENTS Tangible asset backing per ordinary share – previous reporting period Tangible asset backing per ordinary share – current reporting period 629,439,047 651,210,683 Nil Nil (0.79) (0.93) Additional Appendix 4E disclosures can be found in the Notes to the Flexiroam Limited Financial Report for the interim period of 3-month from 1 April 2023 to 30 June 2023 and Results lodged with the ASX on 31st August 2023. TABLE OF CONTENTS MESSAGE FOR SHAREHOLDERS FROM CHAIRMAN MESSAGE FOR SHAREHOLDERS FROM CEO DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT ASX INFORMATION CORPORATE INFORMATION 1 2 3 12 13 14 15 16 17 42 43 48 51 MESSAGE FOR SHAREHOLDERS FROM CHAIRMAN Dear Shareholders, On behalf of the Board of Directors of Flexiroam, I am pleased to present to you the interim report for the period April – June 2023. During the period, Flexiroam changed its ﬁnancial year-end from 31 March to 30 June hence this is a transitional three-month reporting period. We continue to exceed our budget expectations in both sales and earnings growth during the interim period. The Board believes that there is a signiﬁcant addressable market with growth opportunities for our core travel business and in the provisioning of seamless mobile connectivity everywhere for everything. We are increasingly turning our focus to the adjacent solutions markets where we can build on our assets with further product diﬀerentiation to meet the speciﬁc needs of each segment application. To capture these exciting opportunities, we will continue to invest in building innovative products, service oﬀerings and technology infrastructure to scale our business which will enable us to drive signiﬁcant long-term value for shareholders. EXECUTIVE TEAM On 30 March 2023, the Board extended the employment agreement for CEO and Executive Director, Mr. Marc Barnett, providing Flexiroam with executive leadership continuity. The Board considers this renewal agreement to be of material beneﬁt to the Company, enabling the ongoing execution of the Company’s growth strategy. The Board remains committed to ensuring the ongoing alignment between the executive team and that of our shareholders’ long-term interest. As such, the Board proposed an employee share option plan, which was duly approved at our Annual General Meeting in June 2023. Options have been granted to employees and directors in tranches and are subject to the following exercise prices and vesting conditions: EXERCISE PRICE PER OPTION VESTING CONDITION EXPIRY DATE $0.035 $0.075 $0.115 1 year vesting 2 year vesting 3 year vesting 5 years from date of issue 5 years from date of issue 5 years from date of issue STRATEGY AND OUTLOOK We started FY24 as a much stronger business than we have ever been and are forecasting exponential growth over the coming years. We are experiencing strong momentum across our key business economics which is reﬂected in our increased sales pipeline and signiﬁcant data cost reductions which in turn has resulted in improved margins. Our global travel revenue continues to perform well, dominating a signiﬁcant percentage of total sales. The Board notes that the global non-travel revenue is equally important and we will continue to invest to maximise its future growth. I take this opportunity to quote our CEO’s remark made in July 2023: “We have consistently worked on transitioning our business, enhancing our infrastructure, products, and services, thereby enabling us to scale the company to serve billions of devices worldwide. We are well positioned to deliver transformational results in FY24 through the ongoing growth in our travel business and the continued expansion into new and diverse sectors that allow us to showcase the potential of our connectivity solutions.” SUMMARY I would like to express my sincere appreciation to fellow Board members for your support and strategic counsel and to the Leadership Team and staﬀ for your dedication and commitment. Your hard work has been instrumental in navigating us through our challenges and will undoubtedly help us achieve our ambitious goals in FY24 and in the years to come. Finally, on behalf of the Board, I would like to thank our shareholders, business partners and customers for your support and commitment to Flexiroam. With the strong foundations that we have in place, the Board remains conﬁdent in the prospects of the business and will do our best to deliver value. Tat Seng Koh Chairman 1 MESSAGE FOR SHAREHOLDERS FROM CEO Dear Shareholders, It is my pleasure to present Flexiroam’s Interim Report for the 3 months ended 30 June 2023. During the reporting period, in order to align the reporting schedule with the standard Australian reporting cycle, the Group changed its ﬁnancial year-end to 30 June. Accordingly, the results show the 3-month period from 1 April 2023 to 30 June 2023. The previously reported FY23 results are for the 12 month-period from 1 April 2022 to 31 March 2023, the statutory comparative period in this report. FINANCIAL PERFORMANCE For the 3 month period, the Company's revenue reached A$2.76M, a 2% increase from Q4 FY23: A$2.71M and a 72% rise compared to the same period last year (Q1 FY23: A$1.60M). This increase is attributed by the signiﬁcant growth in the travel sector and white labelled reseller sales. The Company experienced a remarkable improvement in gross proﬁt by 192% to A$1.45M, in contrast to the same period last year (Q1 FY23: A$497k). This growth was underwritten by a substantial reduction in data costs. Notably, the data cost per GB exhibited a consistent decline, with a 26% reduction in June 2023 compared to March 2023, and an impressive 51% decline compared to June 2022. In accordance with AASB 136 Impairment of Assets guidelines, Flexiroam conducted an evaluation at the end of each reporting period to determine if there are any indications that previously recognised impairment losses for assets had diminished. In response to these indications, Flexiroam engaged an independent valuer to assess the carrying value of their Intangible Assets. As a result of this assessment, a notable recovery of A$4.0M was recorded in June 2023 as the determined recoverable amount. Cash receipts for the interim period of Apr-June 2023 were A$2.52M, up 9% from the normalised cash receipts for the previous quarter (Q4 FY23: A$2.31M). The normalised cash receipts exclude a one-oﬀ payment of A$748k from Mastercard in Q4 FY23. Cash burn from Operating Activities of A$553k was A$214k lower compared to the same period last year (Q1 FY23: A$767k). Cash outﬂows from Investing Activities for the quarter was A$292k. DELIVERING ON TRANSFORMATIONAL OUTCOMES AND OUTLOOK We believe that the transitional period will be a pivotal period for Flexiroam, providing the company with a valuable opportunity to establish a more robust foundation and align with the standard Australian reporting period. Throughout the transitional ﬁscal period, we have successfully achieved the expected outcomes, setting ourselves up for a strong and promising start to FY24. We have consistently worked on transitioning the business, enhancing our infrastructure, products, and services, thereby enabling us to scale the company to serve millions of devices worldwide. We are well positioned to deliver transformation results in FY24 through the ongoing growth of our travel business and the continued expansion into new and diverse sectors that allow us to showcase the potential of our connectivity solutions. I would like to thank the Board, Leadership Team and all the members of the Flexiroam business for their eﬀorts during the period and for their commitment to our success. On behalf of the Board, I would like to thank our investors for supporting our business. Our company is well positioned for success and we look forward to delivering another year of strong performance in FY24 and beyond. Marc Barnett CEO and Executive Director 2 DIRECTOR’S REPORT The Directors of Flexiroam Limited (‘the Company’) and its controlled entities submit herewith their report together with the ﬁnancial statements of the company (‘the Group’) for the period ended 30 June 2023. 1. DIRECTORS The names and particulars of the directors of the Company during or since the end of the period 30 June 2023 are: TAT SENG KOH Non-Executive Chairman Tat Seng Koh has extensive experience in investment banking and corporate ﬁnance. He has successfully listed many companies on stock exchanges and raised funds in the debt and equity market. He was instrumental in the listing of MayAir Group plc and PureCircle Ltd on the AIM Market, London Stock Exchange in 2015 and 2007 respectively. He held the position of Executive Director/Group Chief Financial Oﬃcer of MayAir Group plc and was the Group Chief Financial Oﬃcer of PureCircle Ltd. Prior to joining PureCircle Ltd, Tat Seng was Head of Corporate Finance at Avenue Securities Sdn Bhd (a member of the ECM Libra Avenue Group) and Associate Director of Corporate Finance of CIMB Investment Bank Berhad, a leading investment bank in Malaysia. He started his career at Coopers & Lybrand (now known as PWC) upon obtaining his bachelor’s degree in accounting from University of Malaya in 1990. He is a member of the Malaysian Institute of Accountants and was a member of the Listing Committee of the Labuan International Financial Exchange, a wholly owned subsidiary of Bursa Malaysia Berhad. Tat Seng has not held directorships in any other Australian listed companies during the past three ﬁnancial years. MARC BARNETT Executive Director and CEO Marc Barnett has extensive experience in sales, commercial operations, ﬁnance and change management, and brings over 12 years’ experience in C-suite roles across the Asia-Paciﬁc region, with multinational corporations and high growth start-ups. Marc Barnett was most recently Chief Executive Oﬃcer of video-on-demand service iﬂix, until its acquisition by Tencent in June 2020, having joined as Chief Operating Oﬃcer in 2016. He accelerated iﬂix’s growth to deliver 50 million app downloads with 25 million monthly active users, rapidly expanding the business to 32 markets spanning Asia, the Middle East and Africa. Marc Barnett held senior leadership roles at Microsoft and nineMSN. As part of the Microsoft Asia-Paciﬁc Executive Leadership Team, he developed the go-to- market strategy for over 100 sales staﬀ across 13 markets in the region. He represented the interests of Nine Entertainment Co and Microsoft in Joint Ventures. Marc Barnett has not held directorships in any other Australian listed companies during the past three ﬁnancial years. JEFREY ONG Non-Executive Director Jefrey Ong is a highly experienced entrepreneur and business leader in the telecommunications and technology sectors. He founded Flexiroam in 2012 and listed the company on ASX in 2015 raising more than A$10m via IPO. Under his leadership, Flexiroam launched various innovative solutions to the travel and IoT market through the use of eSim technology. Prior to the transition to Non-Executive role, Jefrey Ong has led the experienced team to establish key partnerships with some of the most reputable global brands including Apple, Mastercard, Tripadvisor and Korean Air. These partnerships have helped Flexiroam reach a wider audience and provide its services to travellers all around the world. He is currently serving as an advisor to several fast-growing tech startups in e-commerce, cloud and Web3 space. Jefrey Ong graduated from Champlain College, United States, with a Bachelor of Science, Degree in Software Engineering. Jef also completed the Innovation & Entrepreneurship Program in Stanford University, United States. Jefrey Ong has not held directorships in any other Australian listed companies during the past three ﬁnancial years. Mr. Ong is the Chair of the Nomination and Remuneration Committee. 3 DIRECTORS’ REPORT 1. DIRECTORS – CONTINUED STEPHEN FRANK PICTON Non-Executive Director Steve Picton is a highly experienced and seasoned executive, with over 35 years’ of technology and telecommunications leadership experience, spanning sales, marketing and strategy, including 20 years as a Chief Executive Oﬃcer. Steve is currently a Director of management consultancy Richmond Bridge, where he focuses on business development and technology investments. He also sits on the Boards of Echo IQ Limited (ASX:EIQ), Cognian Technologies Pty Ltd and Richmond Bridge Pty Ltd. Steve was the Chief Executive Oﬃcer of Super Fast Broadband business LBNCo, from June 2015 until January 2021, investing in and leading the business during a period of explosive growth and structural change. Prior to this, Steve worked as a Management Consultant at Richmond Bridge and founded the Gotalk business in Australia for 13 years through to an exit. While Chief Executive Oﬃcer of Gotalk, Steve built the largest calling card business in Australia and New Zealand, growing the business to become proﬁtable with solid cash ﬂow. His initial career was with British Telecom in the UK and Asia Paciﬁc where he held senior executive roles within Sales & Marketing and also Corporate Development where he led several substantial M&A activities. Mr Picton is the chair of the Audit and Risk Committee. 2. COMPANY SECRETARY NATALIE TEO Natalie Teo graduated with a Masters degree in Accounting from Curtin University in Western Australia and holds a Graduate Diploma in Applied Corporate Governance with the Governance Institute of Australia. Ms Teo is a Chartered Secretary and an Associate of the Governance Institute of Australia. She is currently the secretary to several ASX-listed entities and is working with a ﬁrm which provides company secretarial and accounting services to both listed and unlisted entities. 3. PRINCIPAL ACTIVITIES The Group is involved in telecommunications and Internet of Things (IoT) connectivity. There have been no signiﬁcant changes in the nature of the activities during the year. 4. REVIEW OF OPERATIONS The information and analysis about the Group’s ﬁnancial performance in the transitional ﬁnancial period to June 2023 are detailed in the Financial Performance section beginning on page 13 of this interim report. To focus on growth, the Corporate Travel and Solutions lines of business are redeﬁned into seven distinct vertical segments. These segments are Corporate Rewards and Sponsorship, Wholesale Partners, Reseller Partners, Aviation Services, Terminal Enablement Solutions, Enterprise Solutions, and Maritime Services. The business maintains an “Incubator” segment focused on capturing further growth opportunities in singular solutions that deliver attractive returns. This shift allows the Company to streamline resources to these speciﬁc segments, accelerating the Company’s value proposition and specialised expertise in each area. This redeﬁnition of the Corporate Travel and Solutions lines of business reﬂects Flexiroam’s commitment to growth and innovation. 4 DIRECTORS’ REPORT 5. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Eﬀective 1st April 2023, the employment agreement of CEO and Executive Director, Marc Barnett was renewed and his annual remuneration increased to A$500,000 per annum. The duration of the employment contract has been amended from 3 years commencing 27 April 2021 to ongoing with no ﬁxed term. On 11th May 2023, the Company decided to align the Company’s reporting timetable with the standard Australian reporting cycle and all fully owned subsidiaries will also change to a 30 June year end. The Company has made the change in accordance with section 323D(2A) of the Corporations Act 2001 (Cth). Flexiroam’s most recent ﬁnancial year ended on 31 March 2023 (FY2023) and the Company will have a three-month transitional ﬁnancial reporting period beginning 1 April 2023 and ending on 30 June 2023. The Company issued a total of 78,490,000 options in June 2023 under its Employee Share Option Plan in three separate tranches. The plan was approved by shareholders on 19 June 2023 and the options form three new classes of unquoted securities with the following exercise and vesting conditions. Eligible participants (being employees and consultants of the Company) have accepted the oﬀer of 26,490,000 options and 52,000,000 options to Directors. NUMBER EXERCISE PRICE PER OPTION VESTING CONDITION EXPIRY DATE 26,163,332 26,163,332 26,163,336 $0.035 $0.075 $0.115 1 year vesting 5 years from date of issue 2 year vesting 5 years from date of issue 3 year vesting 5 years from date of issue In the interim quarter, the Company advises that 21,771,636 fully paid ordinary shares under its Employee Incentive Plan with nil monetary value have been released from a 12-month voluntary escrow. The 21,771,636 shares consist of 10,000,000 CEO's vested performance rights and 2,250,000 Executive performance rights exercised and converted to fully paid ordinary shares at a deemed issue price of $0.027 and $0.035 respectively, no cash was received. The remaining balance of 9,521,636 vested employee incentive shares issued at a deemed issue price of A$0.034 and A$0.035. Flexiroam has decided to reinstate the Intangible Assets that were impaired in FY18, demonstrating our strong belief in their revenue-generating potential. After careful evaluation and rigorous assessment, we have determined that these assets hold signiﬁcant value and can make substantial contributions to our revenue streams. By reinstating them, we increased our asset value which can positively impact ﬁnancial statements, balance sheets and enhance the company’s ﬁnancial position. This move enables the company to deliver a good message of how our IP is able to generate future revenue streams. An independent valuer was appointed to assess our Intangible Assets, resulting in an impairment reversal amount of A$4.0M in June 2023. 6. SIGNIFICANT EVENTS AFTER BALANCE DATE There are no signiﬁcant events after the balance date. 5 DIRECTORS’ REPORT 7. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Company has seen data sold and data usage from Travel users signiﬁcantly increase during FY23 and in the interim quarter and expects the strong growth in usage to continue into FY24. Flexiroam continued to deliver on its growth strategy, which includes white label solutions to increase global presence across key industries and geographies. Ongoing improvements in operational eﬃciency have led to an increase in gross proﬁt, driven by increased revenue and signiﬁcant reductions in data costs. Flexiroam has a pipeline of existing and potential partnerships, and our team will continue to seek out new opportunities to expand market share and increase brand recognition across key verticals. The potential risks associated with the Group’s business are outlined below. Competitive market The industry in which the Company operates in is a highly dynamic and competitive market and is subject to both domestic and global competition, including telecommunication companies and resellers of travel SIMs. Some of the Company’s competitors are telecommunication companies that are large organisations with greater ﬁnancial, technical and human resources. While the Company undertakes all reasonable due diligence in its business decisions and operations, the Company has no inﬂuence or control over the activities or actions of its competitors, whose activities or actions may negatively impact the operating and ﬁnancial performance of the Company. Notwithstanding stiﬀ competition, the Company continues to respond with a customer-focused strategy, constant research and development into technology, high quality products and services, and improvements in operating costs. Cyber security A cyber-security breach on the FlexiroamX App could render the FlexiroamX App unavailable for use by customers or customers’ personal information could be compromised. An attack may happen without warning and would range in severity. The Company has in place necessary cyber security measures to minimise and manage such attacks, however there can be no assurance that such security strategies will be eﬀective. Unavailability of the FlexiroamX App could harm the Company’s reputation and lead to a loss of revenue, while a compromise on customers’ information could hinder the Company’s ability to retain existing customers or attract new customers, which could have a material adverse impact on the Company’s business. Dependence on third party network providers The Company’s business model is reliant upon third party network providers and the performance of those networks. The Company has support measures in place in the event of any network downtime or disruption, aiming to provide customers with the best possible solution and user experience. However, any network downtime or disruption could materially impact connectivity, and this may aﬀect customer conﬁdence and impact sales of the Company. Currency risk The Company derives the majority of its revenue in US dollars and has cost exposure mainly in US dollars, Australian dollars and Malaysian Ringgit. Accordingly, changes in the exchange rate between US dollars, Australian dollars and Malaysian Ringgit will have a direct eﬀect on the performance of the Company. Government policy changes and legal risk The Company’s customers are situated globally and the Company’s network covers over 200 countries. The Company’s operations in the countries in which it operates will be governed by the applicable laws and regulations in those countries. Breaches or non-compliance with these laws and regulations could result in penalties and other liabilities. These may have a material adverse impact on the assets, operations, performance, growth prospects and share price of the Company. Any governmental action or policy changes in relation to aspects such as access to customers, intellectual property protection, trade restrictions and taxation may also adversely aﬀect the Company. In addition, there is a commercial risk that legal action may be taken against the Company in relation to commercial matters. 6 DIRECTORS’ REPORT 8. ENVIRONMENTAL LEGISLATION The entity is not subject to any signiﬁcant environmental legislation. 9. MEETINGS OF DIRECTORS The number of monthly business review meetings of the company’s Board of Directors attended by each Director during the period ended 30 June 2023 was: DIRECTOR Marc Barnett Jefrey Ong Tat Seng Koh Stephen Frank Picton MEETINGS HELD WHILE IN OFFICE MEETINGS ATTENDED 3 3 3 3 3 3 3 3 The number of meetings of the company’s Audit and Risk Committee attended by each committee during the period ended 30 June 2023 was: DIRECTOR Jefrey Ong Tat Seng Koh Stephen Frank Picton MEETINGS HELD WHILE IN OFFICE MEETINGS ATTENDED 1 1 1 1 1 1 In addition, The Board of Directors approved 3 circular resolutions during the period ended 30 June 2023 which were signed by all Directors of the Company. 10. REMUNERATION REPORT (AUDITED) This report outlines the remuneration arrangements in place for Directors and other Key Management Personnel of the Group. 10.1 KEY MANAGEMENT PERSONNEL DISCLOSED IN THIS REPORT i. ii. iii. iv. Marc Barnett (Executive Director and Chief Executive Oﬃcer eﬀective from 27 April 2021); Jefrey Ong (Non-Executive Director, eﬀective from 1 April 2022); Tat Seng Koh (Non-Executive Chairman, eﬀective 1 February 2023); Stephen Frank Picton (Non-Executive Director, eﬀective from 1 June 2022). 10.2 REMUNERATION GOVERNANCE The number of meetings of the company’s Nomination and Remuneration Committee attended by each Committee member during the period ended 30 June 2023 was: DIRECTOR Jefrey Ong Tat Seng Koh Stephen Frank Picton MEETINGS HELD WHILE IN OFFICE MEETINGS ATTENDED 1 1 1 1 1 1 7 DIRECTORS’ REPORT 10. REMUNERATION REPORT (AUDITED) – CONTINUED 10.3 NON-EXECUTIVE DIRECTOR REMUNERATION The Board seeks to set remuneration of Non-Executive Directors at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is appropriate at this stage of the Company’s development. The Board had resolved that Non-Executive Directors’ fees range up to $60,000 per annum for each Non-Executive Director. In addition, Non-Executive Directors are entitled to be paid reasonable travelling, accommodation and other expenses incurred as a consequence of their attendance at meetings of Directors and otherwise in the execution of their duties as Directors. Total remuneration for all non-executive directors, last voted upon by shareholders at a meeting held on 30 November 2011, is not to exceed $250,000 per annum. 10.4 EXECUTIVE REMUNERATION The following table discloses the contractual arrangements with the Group’s Key Management Personnel. a. Key Terms of Remuneration COMPONENT Fixed remuneration Contract duration CEO DESCRIPTION $500,000 per annum Ongoing with no ﬁxed term Notice by the individual/company 6 months Other entitlements Annual and personal leave, Incentive beneﬁt 10.5 EXECUTIVE REMUNERATION a. Summary of amounts paid to key management personnel The table below discloses the compensation of the Key Management Personnel of the Group during the period ended 30 June 2023. SHORT-TERM EMPLOYEE BENEFITS SALARY & FEES 3 MONTHS ENDED 30 JUNE 2023 POST- EMPLOYMENT SUPERANNUATION BONUS SHARE-BASED PAYMENTS TOTAL PERCENTAGE OF TOTAL REMUNERATION FOR THE YEAR LINKED TO PERFORMANCE $ $ $ $ $ % Directors — Flexiroam Limited Jefrey Ong Tat Seng Koh Marc Barnett Stephen Frank Picton 2023 Total 15,000 15,000 126,553 13,575 170,128 - - - - - - - 15,000 15,000 348,750 475,303 - 15,000 348,750 520,303 - - 73.4 - 67.0 - - - 1,425 1,425 8 DIRECTORS’ REPORT 10. REMUNERATION REPORT (AUDITED) – CONTINUED SHORT-TER M EMPLOYEE BENEFITS SALARY & FEES 12 MONTHS ENDED 31 MAR 2023 POST- EMPLOYMENT SUPERANNUATION BONUS SHARE-BASED PAYMENTS TOTAL PERCENTAGE OF TOTAL REMUNERATION FOR THE YEAR LINKED TO PERFORMANCE $ $ $ $ $ % Directors — Flexiroam Limited 60,000 60,000 6,000 355,558 45,269 526,827 Jefrey Ong Tat Seng Koh Thian Choy Ong[1] Marc Barnett Stephen Frank Picton[2] 2023 Total [1] resigned 1 June 2022 [2] appointed 1 June 2022 - - - - - - - - - - 4,731 4,731 30,000 - - 90,000 60,000 6,000 887,500 1,243,058 - 50,000 917,500 1,449,058 33.3 - - 71.4 - 63.3 No member of key management personnel appointed during the year received a payment as part of his or her consideration for agreeing to hold the position (30 June 2023: $nil). Employee share option plan b. The Company has issued 21,771,636 fully paid ordinary shares under its Employee Incentive Plan for nil monetary consideration. The 21,771,636 shares consist of 10,000,000 CEO's vested performance rights and 2,250,000 Executive performance rights exercised and converted to fully paid ordinary shares at $0.027 and $0.035 respectively. The remaining balance of 9,521,636 vested employee incentive shares issued at a deemed issue price of A$0.034 and A$0.035. 10.6 EQUITY HOLDINGS OF KEY MANAGEMENT PERSONNEL a. Fully paid ordinary shares Fully paid ordinary shares held by Flexiroam Limited by Key Management Personnel are as follows: BALANCE AT 1 APR 2023 ALLOTMENT / PURCHASE OF SHARES 30 JUNE 2023 DISPOSAL OF SHARES NET OTHER CHANGES BALANCE AT 30 JUNE 2023 BALANCE HELD NOMINALLY NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER Directors — Flexiroam Limited Jefrey Ong 54,903,539 Tat Seng Koh 47,772,162 - - Marc Barnett 22,573,530 12,250,000 Stephen Frank Picton 11,855,673 - - - - - - - - - 54,903,539 47,772,162 34,823,530 - - - 11,855,673 11,855,673 9 DIRECTORS’ REPORT 10. REMUNERATION REPORT (AUDITED) – CONTINUED Share options held by key management personnel b. The Company issued a total of 52,000,000 options to Directors in June 2023 under its Employee Share Option Plan in three separate tranches. The plan was approved by shareholders on 19 June 2023 and the options form three new classes of unquoted securities with the following exercise and vesting conditions. NUMBER EXERCISE PRICE PER OPTION VESTING CONDITION EXPIRY DATE 17,333,332 17,333,332 17,333,336 $0.035 $0.075 $0.115 1 year vesting 5 years from date of issue 2 year vesting 5 years from date of issue 3 year vesting 5 years from date of issue Performance rights c. On June 2, 2023, a total of 14,500,000 CEO and Executive performance rights were issued. The number of options being exercised is 12,250,000 and 2,250,000 Executive performance rights are currently subject to a 24-month holding lock period. DIRECTORS GRANT DATE EXERCISE PRICE NUMBER Marc Barnett 21 June 2022 Marc Barnett 21 June 2022 $0.027 $0.035 10,000,000 4,500,000 10.7 VOTING AND COMMENTS MADE AT THE COMPANY’S 2022 ANNUAL GENERAL MEETING in favour of the The Company received 99.72% votes, of those shareholders who exercised their right to vote, remuneration reports for the 2023 ﬁnancial period. The Company did not receive any speciﬁc feedback at the AGM or throughout the period on its remuneration practices. 10.8 LOANS TO KEY MANAGEMENT PERSONNEL There were no loans to key management personnel. (This is the end of the Audited Remuneration Report) 10 DIRECTORS’ REPORT 11. INDEMNITY AND INSURANCE OF OFFICERS During the ﬁnancial year, the Company has renewed insurance premiums for the period of one year relating to contracts insuring the directors and oﬃcers against liability which may arise in connection with them acting as Directors to the extent permitted under the Corporations Act. 12. INDEMNITY 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. 13. PROCEEDINGS ON BEHALF OF 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 party for the purpose of taking responsibility on behalf of the Company for all or any part of these proceedings. The Company was not a party to any such proceedings during the year. INTERESTS IN THE SHARES, OPTIONS AND PERFORMANCE RIGHTS OF THE COMPANY AND 14. RELATED BODIES CORPORATE This has been disclosed in page 8 and 9 under Section 10.6 a,b and c. 15. SHARE OPTIONS No share options expired and unexercised. 16. NON-AUDIT SERVICES The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company are important. During the year, no fees have been paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit ﬁrms. 17. DIVIDENDS No dividends were paid during the year and no recommendation is made as to dividends. 18. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included in this Financial Report. Marc Barnett Chief Executive Oﬃcer Signed on this 31st August 2023 11 AUDITOR’S INDEPENDENCE DECLARATION 12 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2023 Revenue Cost of sales Gross proﬁt Reversal of assets impairment loss on intangible Interest income Foreign exchange (losses)/gains Other income Administration and operating expenses Selling and marketing expenses Research and development Staﬀ costs Share based payment Depreciation and amortisation Plant and equipment written oﬀ Finance expenses NOTES 6 3 MONTHS ENDED 30 JUNE 2023 $ 12 MONTHS ENDED 31 MARCH 2023 $ 2,763,534 (1,314,944) 1,448,590 4,014,516 15,349 (6,975) 8,046 (470,844) (977,747) (130,466) (517,775) (101,935) (173,579) - (111,720) 8,904,626 (5,044,664) 3,859,962 - 30,697 121,255 75,028 (1,164,649) (2,702,059) (342,089) (1,205,840) (825,746) (26,685) (7,953) (449,447) Proﬁt/(Loss) before income tax 2,995,460 (2,637,526) Income tax expense 16 - - Proﬁt/(Loss) for the period/year 2,995,460 (2,637,526) Other comprehensive income Items that may be reclassiﬁed to proﬁt or loss: Foreign exchange translation of controlled subsidiaries foreign (21,235) (393,930) Total other comprehensive income, net of tax (21,235) (393,930) comprehensive Total period/year income for the 2,974,225 (3,031,456) Earning/(Loss) per share (basic and diluted) 19 0.47 cents (0.42) cents The above Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 13 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023 NOTES AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ CURRENT ASSETS Cash and cash equivalents Fixed deposits with a licensed bank Trade and other receivables Inventories Other assets Total current assets NON-CURRENT ASSETS Plant and equipment Intangible assets Development costs Total non-current assets Total Assets CURRENT LIABILITIES Trade and other payables Deferred revenue Total current liabilities Total Liabilities Net Assets Deﬁciency EQUITY Issued capital Reserves Accumulated losses Total Equity Deﬁciency 7 7 9 10 11 12 13 14 15 17 18 1,268,675 30,240 213,674 391,391 172,779 1,029,223 1,066,427 210,070 371,104 76,887 2,076,759 2,753,711 63,625 3,980,607 973,172 5,017,404 36,000 102,768 692,784 831,552 7,094,163 3,585,263 4,678,435 3,536,123 8,214,558 4,045,977 3,735,842 7,781,819 8,214,558 7,781,819 (1,120,395) (4,196,556) 48,636,682 (3,039,528) (46,717,549) (1,120,395) 47,959,378 (2,442,925) (49,713,009) (4,196,556) The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2023 BALANCE AT 1 APRIL 2022 46,883,390 1,102,774 (2,901,527) (47,075,483) (1,990,846) ISSUED CAPITAL $ OPTION & PERFORMANCE RIGHTS RESERVE FOREIGN CURRENCY TRANSLATION RESERVE ACCUMULATED LOSS $ $ $ TOTAL $ Loss for the year Other comprehensive income for the year Total comprehensive income for the year Performance rights granted to employees - - - - - - - 825,746 Shares issued during the year 1,066,688 (1,066,688) 9,300 47,959,378 (9,300) 852,532 - (2,637,526) (2,637,526) (393,930) - (393,930) (393,930) (2,637,526) (3,031,456) - - - - - - 825,746 - - (3,295,457) (49,713,009) (4,196,556) Share issue costs BALANCE AT 31 MARCH 2023 BALANCE AT 1 APRIL 2023 Proﬁt for the period Other comprehensive income for the period Total comprehensive income for the period Performance rights granted to employees Shares issued during the period Share right converted BALANCE AT 30 JUNE 2023 47,959,378 852,532 (3,295,457) (49,713,009) (4,196,556) - - - - 328,554 348,750 48,636,682 - - - 101,936 (328,554) (348,750) 277,164 - 2,995,460 2,995,460 (21,235) (21,235) - (21,235) 2,995,460 2,974,225 - - - - - - 101,936 - - (3,316,692) (46,717,549) (1,120,395) The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying note 15 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2023 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Finance charges Interest received NOTES PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MAR 2023 $ 2,503,757 10,157,794 (2,961,619) (11,354,201) (110,453) 15,349 (449,447) 30,697 Net cash ﬂows used in operating activities 8 (552,966) (1,615,157) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant & equipment Purchase of intangible assets Development cost paid Proceeds from disposal of plant & equipment Net cash ﬂows used in investing activities CASH FLOWS FROM FINANCING ACTIVITY Refund on prior period of share issued Net cash ﬂows used in ﬁnancing activity (33,073) - (258,829) - (291,902) (26,875) (55,089) (685,681) 34,666 (732,979) - - (69) (69) Net decrease in cash and cash equivalents (844,868) (2,348,205) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 2,095,650 4,211,347 Eﬀect of foreign exchange translation 48,133 232,508 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 7 1,298,915 2,095,650 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. 16 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. REPORTING ENTITY These ﬁnancial statements and notes of Flexiroam Limited (“the Company”) and its subsidiaries (collectively “the Group” or “the Consolidated Entities”) comprise the consolidated ﬁnancial statements for the Group. For the purpose of preparing the consolidated ﬁnancial statements, the Company is a for-proﬁt entity and is domiciled in Australia. The Group is involved in the telecommunications and internet of things (IoT) connectivity industry. 2. ADOPTION OF NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS 2.1 STANDARDS AND INTERPRETATIONS APPLICABLE TO 30 JUNE 2023 In the period ended 30 June 2023, the Directors reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and eﬀective for the current year reporting period. 2.2 STANDARDS AND INTERPRETATIONS IN ISSUE NOT YET ADOPTED The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet eﬀective for the period ended 30 June 2023. There are no material change is necessary to the Group’s accounting policies. impacts of the new and revised Standards and Interpretations on the Group and therefore no 3. GOING CONCERN These ﬁnancial statements have been prepared on a going concern basis, which considers the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. As disclosed in the ﬁnancial statements, the Group incurred an operating proﬁt of $2,995,460 for the period ended 30 June 2023 (31 March 2023: operating loss of $2,637,526) and a net cash outﬂows from operating activities amounting to $552,966 (year ended 31 March 2023: $1,615,157). The proﬁt in the period includes the one oﬀ impairment reversal of $4,014,516. As at 30 June 2023, the Group has a deﬁciency in net current asset of $6,137,799 (31 March 2023: $5,028,108) and a net asset deﬁciency of $1,120,395 (31 March 2023: $4,196,556). The ability of the Group to continue as a going concern is dependent on the Group achieving positive operating cash ﬂows and/or securing additional funding via capital raising to continue to fund its operational and marketing activities. These conditions indicate the existence of a material uncertainty that may cast signiﬁcant doubt about the Group’s ability to continue as a going concern. The Directors are satisﬁed that the going concern basis of preparation is appropriate and there are reasonable grounds to believe that the Group will continue as a going concern due to the following factors: ● ● The Directors are conﬁdent in the outlook of improved ﬁnancial performance of the business to deliver future proﬁtable operations; and/or The Company is able to raise further capital based on historical success. Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that diﬀer from those stated in the ﬁnancial statements. The ﬁnancial report does not include any adjustments relating to the recoverability and classiﬁcation of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern. 17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. MATERIAL ACCOUNTING POLICY INFORMATION 4.1 BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE These general-purpose ﬁnancial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and comply with other requirements of the law. Australian Accounting Standards are equivalent to International Financial Reporting Standards (“IFRS”). Compliance with Australian Accounting Standards ensures that these ﬁnancial statements comply with International Financial Reporting Standards. Material accounting policy information adopted in the preparation of these ﬁnancial statements are presented below and have been consistently applied unless otherwise stated. Except for the cash ﬂow information, the ﬁnancial statements have been prepared on an accruals basis and are based on historical costs, modiﬁed, where applicable, by the measurement at fair value of selected non-current assets, ﬁnancial assets and ﬁnancial liabilities. 4.2 BASIS OF CONSOLIDATION The consolidated ﬁnancial statements incorporate the ﬁnancial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company: ● ● ● has power over the investee; is exposed, or has rights, to variable returns from its involvement in with the investee; and has the ability through its power to aﬀect its returns. The Company reassess whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements listed above. When the Company has less than a majority of the voting rights of an investee, it has the power over the investee when the voting rights are suﬃcient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights are suﬃcient to give it power, including, ● ● ● the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the Company, other vote holders or other parties, rights arising from other contractual arrangements; and any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholder meetings. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Speciﬁcally, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of proﬁt or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. 4.3 MATERIAL ACCOUNTING POLICY INFORMATION The following accounting policies have been adopted in the preparation and presentation of the ﬁnancial report: Segment reporting a. 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 the Company. 18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Foreign currency translation 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED b. The functional currencies of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the Company and subsidiaries operate; being Australian Dollars, Malaysian Ringgit, and US Dollars respectively. However, as the majority of the Company’s shareholder base is Australian, these ﬁnancial statements are presented in Australian Dollars. Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date. All foreign exchange diﬀerences in the consolidated ﬁnancial report are recognised in the proﬁt loss statement with the exception of diﬀerences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in proﬁt or loss. Tax charges and credits attributable to exchange diﬀerences on those borrowings are also recognised in equity. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation diﬀerences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. As at the balance sheet date the assets and liabilities of the Group are translated into the presentation currency of Flexiroam Limited at the rate of exchange at the balance date and income and expense items are translated at the average exchange rate for the period, unless exchange rates ﬂuctuate signiﬁcantly during that period, in which case the exchange rates at the dates of the transactions are used. The exchange diﬀerences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve. Revenue recognition b. Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. The Group recognises revenue when a customer obtains control of a good and/or services and thus has the ability to utilise and obtain beneﬁts from the goods and/or services. Travel revenue ● ● ● Revenue from the sale of data roaming plans is recognised over time based on the customer usage or upon expiration of the validity period of the data, speciﬁcally for retail; Revenues from the sales of x-licenses are recognised over time based on customer usage or upon expiration of the validity period of the data, speciﬁcally for reseller and/or wholesale partners; Revenue from sale of Flexiroam credits are deferred until the credits are converted to data plans and over time based on the customer usage or upon expiration of the validity period of the data; Corporate Rewards and Sponsorships - Revenue from the conﬁrmed quarterly CIF (Card In Force), speciﬁcally for Mastercard and other clients, Revenue from the sale of data roaming plans recognised over time based on customer usage or upon the expiration of the data validity period. Aviation revenue, Maritime, and Enterprise - Revenue from the sale of data roaming plans is recognised over time based on the customer usage or upon expiration of the validity period of the data; Terminal Enablement Solutions - Revenues from the recurring plans are recognised over time as they are mostly monthly subscriptions. 19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED Interest income Interest income from a ﬁnancial asset is recognised when it is probable that the economic beneﬁts will ﬂow to the Group and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the principal outstanding and at the eﬀective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the ﬁnancial asset to that assets’ net carrying amount on initial recognition. d. Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insigniﬁcant risk of changes in value. Trade and other receivables e. Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the eﬀective interest rate method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within periods ranging from 14 days to 90 days. The consolidated entity has applied the simpliﬁed approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. Inventories f. the lower of cost and net realisable value. Costs of inventories are determined on a Inventories are valued at ﬁrst-in-ﬁrst-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Financial instruments g. Recognition and initial measurement Financial instruments, incorporating ﬁnancial assets and ﬁnancial liabilities, are recognised when the Company becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for ﬁnancial assets that are delivered within timeframes established by marketplace convention. Financial instruments are initially measured at fair value plus transaction costs where the instrument is not classiﬁed as at fair value through proﬁt or loss. Financial instruments are then classiﬁed and measured as set out below. Classiﬁcation and subsequent measurement All ﬁnancial method. instruments of the Group are subsequently measured at amortised cost, using the eﬀective interest rate Amortised cost Amortised cost is calculated as a) the amount at which the ﬁnancial asset or liability is measured at initial recognition; b) less principal repayments; c) plus or minus the cumulative amortisation of the diﬀerence, if any, between the amount initially recognised and the maturity amount calculated using the eﬀective interest method; and d) less any reduction for impairment. Eﬀective interest rate method The eﬀective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life of the ﬁnancial instrument to the net carrying amount of the liability. Revisions to expected future net cash ﬂows will necessitate an adjustment to the ﬁnancial asset or ﬁnancial carrying value with a consequential recognition of an income or expense in proﬁt or loss. 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED Derecognition Financial instruments are derecognised where the contractual rights to receipt of cash ﬂows expires or the asset is transferred to another party whereby the Group no longer has any signiﬁcant continuing involvement in the risks and beneﬁts associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The diﬀerence between the carrying value of the ﬁnancial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in proﬁt or loss. Impairment of ﬁnancial assets The consolidated entity recognises a loss allowance for expected credit losses on ﬁnancial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the ﬁnancial instrument's credit risk has increased signiﬁcantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or eﬀort to obtain. Where there has not been a signiﬁcant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a ﬁnancial asset has become credit impaired or where it is determined that credit risk has increased signiﬁcantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original eﬀective interest rate. For ﬁnancial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in proﬁt or loss. Plant and Equipment h. Equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows: Equipment 3 - 5 years The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each ﬁnancial year end. Impairment The carrying values of plant and equipment are reviewed for indicators of impairment at each balance date, with the recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash ﬂows are discounted to their present value using a pre-tax discount rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the asset. For an asset that does not generate largely independent cash inﬂows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be estimated to approximate fair value. An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. 21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED For plant and equipment, impairment losses are recognised in the consolidated statement of proﬁt or loss and other comprehensive income in the cost of sales line item. Derecognition and disposal An item of plant and equipment is derecognised upon disposal or when no further future economic beneﬁts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the diﬀerence between the net disposal proceeds and the carrying amount of the asset) is included in proﬁt or loss in the year the asset is derecognised. i. Intangible assets Intangible assets with ﬁnite useful lives are stated at cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on a straight-line method over their estimated useful lives, as follows: Trademark and patents Website development costs Intangible assets 10 years 5 years 10 years The reversal of impairment for intangible assets was determined using their carrying value, which is scheduled for complete depreciation by June 2025, 10 years since the initial acquisition date. j. Trade and other payables Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the ﬁnancial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months. k. Research and development expenditure Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as non-current assets to the extent that such expenditure is expected to generate future economic beneﬁts. Development expenditure is capitalised if, and only if, an entity can demonstrate all of the following:- a) b) c) d) e) its ability to measure reliably the expenditure attributable to the asset under development; the product or process is technically and commercially feasible; its future economic beneﬁts are probable; its intention to complete and the ability to use or sell the developed asset; and the availability of adequate technical, ﬁnancial and other resources to complete the asset under development. Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period. The development expenditure is amortised on a straight-line method over a period of 5 years when the products are ready for sale or use. In the event that the expected future economic beneﬁts are no longer probable of being recovered, the development expenditure is written down to its recoverable amount. The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the end of each reporting period. 22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED m. Income tax Current tax Current tax is calculated by reference to the amount of income taxes payable to or recoverable in respect of the taxable proﬁt or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred tax Deferred tax is accounted for using the liability method. Temporary diﬀerences are diﬀerences between the tax base of an asset or liability and its carrying amount in the statement of ﬁnancial position. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. In principle, deferred tax liabilities are recognised for all taxable temporary diﬀerences. Deferred tax assets are recognised to the extent that it is probable that suﬃcient taxable amounts will be available against which deductible temporary diﬀerences or unused tax losses and tax oﬀsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary diﬀerences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which aﬀects neither taxable income nor accounting proﬁt. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary diﬀerences arising from the initial recognition of goodwill. Deferred tax liabilities are recognised for taxable temporary diﬀerences associated with investments in subsidiaries, branches and associates, and interests in joint ventures except where the Group is able to control the reversal of the temporary diﬀerences and it is probable that the temporary diﬀerences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary diﬀerences associated with these investments and interest are only recognised to the extent that it is probable that there will be suﬃcient taxable proﬁts against which to utilise the beneﬁts of the temporary diﬀerences and they are expected to reverse in the foreseeable future. Deferred tax liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reﬂects the tax consequence that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are oﬀset when they relate to income taxes levied by the same taxation authorities and the Group intends to settle its current tax assets and liabilities on a net basis. 23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED Current and deferred tax for the period Current and deferred tax is recognised as an expense or income in the consolidated statement of proﬁt or loss and other comprehensive income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess. Issued capital n. 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. o. Employee Share Option Plan Subject to the Listing Rules, the Board may, from time to time and in its absolute discretion, grant Options to Eligible Participants in accordance with these terms and conditions. Each Option entitles the Option holder to subscribe for one Share at the Exercise Price. On an oﬀer of Options to an Eligible Participant, the Company (or a Group) must provide the Eligible Participant with an invitation to participate. To accept the oﬀer of Options, the Acceptance for Options must be signed by the Eligible Participant and returned to the Company within the speciﬁed period. An Eligible Participant is not bound to accept an oﬀer of Options. Where the Company receives a completed Acceptance for Options, the Company must, subject to the Listing Rules: (a) (b) grant the relevant number of Options to the Option holder; and issue the Option holder with an Option Certiﬁcate in respect of the Options, unless at or after the time the Company oﬀered the Options the recipient of the oﬀer ceases to be an Eligible Participant. Expense of the options is recognised by the end of the ﬁnancial year. Parent entity ﬁnancial information p. The ﬁnancial information for the parent entity, Flexiroam Limited, disclosed in Note 21 has been prepared on the same basis as the consolidated ﬁnancial statements, except as set out below. Investments in subsidiaries Investments in subsidiaries are accounted for at cost in the parent entity’s ﬁnancial statements. Share-based payments The grant by the Company of shares over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution to that subsidiary undertaking. Employee beneﬁts q. Short term beneﬁts Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Company. Deﬁned contribution plans As required by law, companies in Malaysia make contributions to the Employees Provident Fund (EPF), including the Group’s Malaysian subsidiary. Such contributions are recognised as an expense in proﬁt or loss as incurred. 24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Earnings/Loss per share 4. MATERIAL ACCOUNTING POLICY INFORMATION – CONTINUED r. 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. s. Critical accounting judgements and key sources of estimation uncertainty The Directors make several estimates and assumptions in preparing general purpose ﬁnancial statements. The resulting accounting estimates, will, by deﬁnition, seldom equal the related actual results. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods if relevant. Recognition of revenue from breakage Revenue from expected breakage amounts are recognised based on the actual amount of data utilised but not expired during the year. 5. FINANCIAL RISK MANAGEMENT Risk management is carried out under policies set by the Board of Directors. Certain responsibilities are also delegated to the Audit and Risk Committee. A copy of the Group’s risk management policy can be found at Schedule-3-Audit-and-Risk-Committee-Charter.pdf (ﬂexiroam.com) a. Categories of ﬁnancial instruments FINANCIAL ASSETS Cash at bank Fixed deposits with licensed bank Trade and other receivables FINANCIAL LIABILITIES Trade and other payables AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 1,268,675 30,240 213,674 1,029,223 1,066,427 210,070 4,678,435 4,045,977 b. 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. The Group’s overall strategy remains unchanged from FY2023. 25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. FINANCIAL RISK MANAGEMENT – CONTINUED The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. 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. Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the risks associated with each class of capital. Financial risk management objective and policies c. The Group’s overall ﬁnancial risk management objective is to ensure that the Group creates value for its shareholders while minimising potential adverse eﬀects on the performance of the Group. The Group’s ﬁnancial risk management policies were established to ensure the adequacy of ﬁnancial resources for business development and in managing its credit, interest, liquidity, and cash ﬂow risks. d. Market risk Foreign currency risk The Group’s activities expose it primarily to the ﬁnancial risks of changes in foreign currency exchange rates. The the Company and subsidiaries are measured using the currency of the primary economic functional currency of environment in which the Company and subsidiaries operate ; being Australian Dollars, Malaysian Ringgit, and US Dollars respectively. However, as the majority of the Company’s shareholder base is Australian, these ﬁnancial statements are presented in Australian dollars. There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk from the previous period. Foreign currency risk management The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate ﬂuctuations arise. The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the balance date expressed in Australian dollars are as follows: FINANCIAL ASSETS Cash at bank Fixed deposits with licensed bank Trade and other receivables FINANCIAL LIABILITIES Trade and other payables AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 1,257,084 30,240 206,483 1,002,593 1,066,427 207,082 4,480,460 3,927,086 Foreign currency sensitivity analysis The Group is exposed to Malaysian Ringgit (RM) and US Dollars (USD) currency ﬂuctuations. The following table details the Group’s sensitivity to a 0.5% increase and decrease in the Australian Dollar (AUD) against the Malaysian Ringgit (RM) and US Dollars (USD). 0.5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rate. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 0.5% change in foreign currency rates. 26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. FINANCIAL RISK MANAGEMENT – CONTINUED A positive number indicates an increase in proﬁt or loss and other equity where the Australian Dollar strengthens against the respective currency. For a weakening of the Australian Dollar against the respective currency there would be an equal and opposite impact on the proﬁt and other equity and the balances below would be negative. RM & USD DOWN 0.5% AUD UP 0.5% $ RM & USD UP 0.5% AUD DOWN 0.5% $ GAIN / (LOSS) $ GAIN / (LOSS) $ $ 30 JUNE 2023 FINANCIAL ASSETS Cash at bank 1,257,084 1,250,799 (6,285) 1,263,369 Fixed deposits with a licensed bank Trade and other receivables 30,240 206,483 30,089 205,451 (151) (1,032) 30,391 207,515 6,285 151 1,032 FINANCIAL LIABILITIES Trade and other payables 4,480,460 4,502,862 22,402 4,458,058 (22,402) 31 MARCH 2023 FINANCIAL ASSETS Cash and cash equivalents 1,002,593 997,580 Fixed deposits with a licensed bank 1,066,427 1,061,095 Trade and other receivables 207,082 206,047 (5,013) (5,332) (1,035) 1,007,606 1,071,759 208,117 5,013 5,332 1,035 FINANCIAL LIABILITIES Trade and other payables 3,927,086 3,946,721 19,635 3,907,451 (19,635) Credit risk Credit risk is the risk of default by clients and counterparties. Cash deposits and trade receivables may give rise to credit risk which requires the loss to be recognised if a counterparty fails to perform as contracted. It is the Group’s policy to monitor the ﬁnancial standing of these counterparties on an on-going basis to ensure that the Group’s exposure to credit risk is minimal. The Group has no material credit risk exposure as at 30 June 2023. The following table provides information regarding cash and cash equivalents. Cash at bank Fixed deposits with a licensed bank AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 1,268,675 30,240 1,298,915 1,029,223 1,066,427 2,095,650 NOTE 7 7 27 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. FINANCIAL RISK MANAGEMENT – CONTINUED Interest rate risk The ﬁnancial instruments which primarily expose the Group to interest rate risk are cash and cash equivalents. The Group’s exposure to interest rate risk and the eﬀective interest rate for classes of ﬁnancial assets and ﬁnancial liabilities and its contractual cash ﬂows is set out below: EFFECTIV E INTEREST RATE NOTE FIXED INTEREST RATE FLOATING INTEREST RATE 1 YEAR OR LESS 1 TO 5 YEARS NON- INTEREST BEARING TOTAL $ $ $ $ $ 30 JUNE 2023 FINANCIAL ASSETS Cash and cash equivalents Fixed deposits with a licensed bank Trade and other receivables 7 7 - 5.30% - - - 2.77% - 5.30% - - FINANCIAL LIABILITY Trade and other payables 14 31 MARCH 2023 FINANCIAL ASSETS Cash at bank Fixed deposits with a licensed bank Trade and other receivables 7 7 FINANCIAL LIABILITY Trade and other payables 14 - - - - - - - - - - - - - 30,240 - 30,240 - - - 1,066,427 - 1,066,427 - - - - - - - - - - - - - - 1,268,675 1,268,675 - 30,240 213,674 213,674 1,482,349 1,512,589 4,678,435 4,678,435 4,678,435 4,678,435 1,029,223 1,029,223 - 1,066,427 210,070 210,070 1,239,293 2,305,720 4,045,977 4,045,977 4,045,977 4,045,977 - - - - - - - - - - - - 28 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5. FINANCIAL RISK MANAGEMENT – CONTINUED The sensitivity analysis has been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the balance sheet date and the stipulated change taking place at the beginning of the ﬁnancial year and held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the change in interest rates. At the reporting date, the Group’s ﬁnancial assets are carried at amortised cost. Only ﬁxed deposits are subject to interest rate risk since the carrying amounts or the future cash ﬂows will ﬂuctuate because of a change in market interest rate. Liquidity and cash ﬂow risk Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has 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 by continuously monitoring forecast and actual cash ﬂows and matching the maturity proﬁles of ﬁnancial assets and liabilities. Fair values The fair values of ﬁnancial assets and ﬁnancial liabilities are determined as follows: ● ● the fair value of ﬁnancial assets and ﬁnancial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and the fair value of other ﬁnancial assets and ﬁnancial liabilities are determined in accordance with generally accepted pricing models based on discounted cash ﬂow analyses. The Directors consider that the carrying amounts of ﬁnancial assets and ﬁnancial liabilities which are all recorded at amortised cost less accumulated impairment charges in these ﬁnancial statements approximate their fair values. 6. REVENUE Travel Corporate Rewards and Sponsorship Wholesale Partners Reseller Partners Aviation Services Terminal Enablement Solutions Enterprise Solutions Maritime Services Incubator PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MAR 2023 $ 1,895,332 415,796 165,493 89,183 18,726 174,863 - 1,230 2,911 6,113,727 1,095,052 364,707 547,350 61,890 623,691 49,708 11,903 36,598 2,763,534 8,904,626 29 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7. CASH AND CASH EQUIVALENTS Cash at bank Fixed deposits with a licensed bank AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 1,268,675 30,240 1,298,915 1,029,223 1,066,427 2,095,650 Fixed deposits of the Group and of the Company amounting to $30,240 and $ nil (31 March 2023: $1,066,427 and $ nil) respectively are deposited to a licensed bank. The weighted average eﬀective interest rates of the ﬁxed deposits with a licensed bank at the reporting date are 5.30% (31 March 2023: range from 2.77% to 5.30%) per annum. The ﬁxed deposits have maturity periods of 12 (31 March 2023: range from 6 to 12) months. 8. CASH FLOW INFORMATION Reconciliation of loss for the period/year to net cash ﬂows from operating activities PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MAR 2023 $ 2,995,460 173,579 (122,381) (4,014,516) - 101,936 (3,604) (20,287) (95,892) 632,458 (199,719) (2,637,526) 26,685 (671,522) - 7,953 825,746 (143,714) (90,767) (8,797) (778,347) 1,855,132 (552,966) (1,615,157) AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 120,979 92,695 213,674 121,735 88,335 210,070 Proﬁt/(Loss) for the period Depreciation and amortisation Foreign exchange movements Reversal of impairment loss on intangible assets Plant and equipment written oﬀ Share based payments Increase in trade and other receivables Decrease in inventories Decrease in other assets Increase/(Decrease) in trade and other payables (Decrease)/Increase in deferred revenue Net cash used in operating activities 9. TRADE AND OTHER RECEIVABLES Trade and other receivables Trade receivables Other receivables Trade receivables are normally collected within 30 to 90 days. 30 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 10. INVENTORIES Inventories Finished goods, at cost Recognised in proﬁt or loss Inventories recognised as cost of sales Impairment loss on inventories AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 391,391 391,391 106,823 (189) 371,104 371,104 162,963 8,649 31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 11. PLANT AND EQUIPMENT As at 30 June 2023, the Group’s - equipment consists of the following: FURNITURE & FITTINGS $ OFFICE EQUIPMENT $ TOTAL $ AT COST As at 1 April 2022 Additions Disposals/ Write-oﬀ/ Adjustment Foreign exchange eﬀects As at 31 March 2023 Additions Disposals/ Write-oﬀ/ Adjustment Foreign exchange eﬀects As at 30 June 2023 ACCUMULATED DEPRECIATION As at 1 April 2022 Depreciation expense Disposals/ Write-oﬀ/ Adjustment Foreign exchange eﬀects As at 31 March 2023 Depreciation expense Disposals/ Write-oﬀ/ Adjustment Foreign exchange eﬀects As at 30 June 2023 CARRYING AMOUNT As at 31 March 2023 As at 30 June 2023 71,225 26,875 (38,546) 4,490 64,044 32,310 - (2,492) 93,862 42,104 13,754 (30,637) 2,823 28,044 3,463 - (1,270) 30,237 36,000 63,625 72,164 26,875 (39,447) 4,542 64,134 32,310 - (2,496) 93,948 42,422 13,814 (30,943) 2,841 28,134 3,463 - (1,274) 30,323 36,000 63,625 939 - (901) 52 90 - - (4) 86 318 60 (306) 18 90 - - (4) 86 - - 32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12. INTANGIBLE ASSETS As at 30 June 2023, the Group’s Intangible Assets consists of the following: AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ AT COST At beginning of the ﬁnancial period/year 20,438,107 Additions Disposals/Write-oﬀ/Adjustment Foreign exchange eﬀects At end of the ﬁnancial period/year ACCUMULATED AMORTISATION At beginning of the ﬁnancial period/year Amortisation expenses Disposals/Write-oﬀ/Adjustment Foreign exchange eﬀects At end of the ﬁnancial period/year ACCUMULATED IMPAIRMENT LOSSES - - (883,835) 19,554,272 5,607,549 165,667 - (241,337) 5,531,879 19,145,157 55,089 (1,740) 1,239,601 20,438,107 5,254,276 13,582 (493) 340,184 5,607,549 At beginning of the ﬁnancial period/year 14,727,790 13,832,565 Additions Reversal of impairment losses Foreign exchange eﬀects At end of the ﬁnancial period/year - (4,014,516) (671,488) 10,041,786 - - 895,225 14,727,790 CARRYING AMOUNT 3,980,607 102,768 Included in intangible assets are website development and intellectual property such as trademarks and patents. A breakdown of these is as follows: Website development costs Trademark, patents, and software CARRYING AMOUNT 58,490 3,922,117 3,980,607 65,126 37,642 102,768 Flexiroam engaged an independent valuer to assess the carrying value of their Intangible Assets. As a result of this assessment, a notable recovery of A$4.0M was recorded in June 2023 as the determined recoverable amount includes trademarks, patents, and software, net of depreciation. 33 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13. DEVELOPMENT COSTS As at 30 June 2023, the Group’s development costs consist of the following: AT COST At beginning of the ﬁnancial period/year Additions Disposals/Write-oﬀ/Adjustment Foreign exchange eﬀects At end of the ﬁnancial period/year ACCUMULATED AMORTISATION At beginning of the ﬁnancial period/year Amortisation expenses Disposals/Write-oﬀ/Adjustment Foreign exchange eﬀects At end of the ﬁnancial period/year AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 692,784 312,145 - (27,270) 977,659 - 4,574 - (87) 4,487 - 685,681 - 7,103 692,784 - - - - - CARRYING AMOUNT 973,172 692,784 Included in additions during the ﬁnancial period/year are:- Staﬀ cost 312,145 685,681 The development costs are speciﬁcally allocated for the enhancement of portals, apps, and API modiﬁcations in both the Travel and Solutions reportable segments to support incremental growth, increase system reliability and pursue new business opportunities. The amortisation on the certain development costs as the software development is only for the completed and commercialised deliverables. 34 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 14. TRADE AND OTHER PAYABLES Trade payables Other payables Accruals AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 1,308,415 227,884 3,142,136 4,678,435 547,804 274,468 3,223,705 4,045,977 Trade payables are non-interest bearing and are normally settled within 30 to 90 days. 15. DEFERRED REVENUE Corporate sales Consumer sales Solutions Total Reconciliation Opening balance Net additions/(expenses oﬀ) Foreign exchange translation eﬀects Closing balance AS AT 30 JUNE 2023 $ AS AT 31 MAR 2023 $ 386,274 3,120,070 29,779 3,536,123 3,735,842 (243,024) 43,305 3,536,123 773,929 2,947,628 14,285 3,735,842 1,880,708 1,645,437 209,697 3,735,842 Advance billing to customers give rise to provisions for unearned revenue in respect of services which have not been rendered as at the end of the reporting period. 35 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 16. INCOME TAX Current year tax Income tax Deferred tax Current year deferred tax PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MAR 2023 $ - - - - Numerical reconciliation between tax expense and pre-tax net proﬁt Proﬁt/(Loss) before income tax 2,995,460 (2,637,526) Income tax using the domestic corporation tax rate of 30% (31 March 2023: 30%) Overseas tax rates adjustment* Increase/(Decrease) in income tax expense due to: Non-deductible expenses: • Other Add/(Deduct) adjustments due to: • Unused tax losses not recognised as deferred tax assets • Utilisation of tax losses previously not recognised as deferred tax assets Other timing diﬀerences not recognised Income tax expense Unrecognised deferred tax balances ● Tax losses ● Other timing diﬀerences not recognised 898,638 (92,793) (791,258) 380,553 (1,136,095) (75,073) 210,872 783,438 85,509 33,869 - 3,916,881 30,015 3,946,896 (303,646) 5,986 - 3,644,175 37,759 3,681,934 *The Malaysia and Hong Kong applicable tax rates for the current ﬁnancial period/year are 24% and 16.5%, respectively. Tax losses in Malaysia can only be carried forward for 7 years. The Group has gross tax losses arising in Australia of $3,916,881 (31 March 2023: $3,644,175) that are available indeﬁnitely for oﬀset against future taxable proﬁts. The utilisation of the gross tax losses is subject to satisfying continuity of ownership test or business continuity test. 36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17. ISSUED CAPITAL Ordinary shares issued (net of share issue costs) 651,210,683 48,636,682 NUMBER $ Reconciliation BALANCE AT 1 APRIL 2022 Movements for the year BALANCE AT 31 MARCH 2023 BALANCE AT 1 APRIL 2023 Share issue – 2 June 2023 [a] Share issue – 20 June 2023 [b] BALANCE AT 30 JUNE 2023 601,295,275 28,143,772 629,439,047 629,439,047 20,610,922 1,160,714 651,210,683 46,883,390 1,075,988 47,959,378 47,959,378 636,679 40,625 48,636,682 [a] On 2 June 2023, the 20,610,922 fully paid ordinary shares were vested at an issue prices of $0.027, $0.034 and $0.035 to eligible employees pursuant to the Employee Incentive Plan approved by shareholders with shareholding lock periods between 12 and 36 months which we issued in previous year. The issuance of shares is nil in cash consideration. These shares transferred to issued capital upon expiry of the holding lock periods. [b] On 20 June 2023, the Company received an exercise notice in respect of vested Tranche 1 share rights, being 1,160,714 ordinary fully paid shares at an issue price of $0.035 per share had been issued to eligible employees pursuant to the Employee Incentive Plan approved by shareholders. Fully paid ordinary shares carry one vote per share and carry the right to dividends. Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. The tabled ordinary shares issued above do not include unvested shares. Dividends No dividends were paid or proposed during the period ended 30 June 2023 (31 March 2023: $nil). 18. RESERVES Foreign currency translation reserve The foreign currency exchange reserve is used to record exchange diﬀerences arising from the translation of the ﬁnancial statements of foreign subsidiaries. It is also used to record the eﬀect of hedging net investments in foreign operations. Option and performance rights reserve This reserve is used to record the value of equity beneﬁts of options and performance rights provided to employees and directors. 37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 19. LOSS PER SHARE Basic loss per share amounts are calculated by dividing net loss for the period/year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year. The following reﬂects the income and share data used in the basic loss per share computations: Loss attributable to ordinary equity holders 2,995,460 (2,637,526) PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MARCH 2023 $ Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Loss per share (basic and diluted) 20. RELATED PARTY TRANSACTIONS a. Key management personnel Compensation of key management personnel Short-term employee beneﬁts Share based payment Post-employment superannuation NUMBER NUMBER 636,561,244 624,623,119 CENTS 0.47 CENTS (0.42) PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MARCH 2023 $ 170,128 348,750 1,425 520,303 526,827 917,500 4,731 1,449,058 Subsidiaries b. The consolidated ﬁnancial statements include the ﬁnancial statements of Flexiroam Limited and the following subsidiaries: NAME Super Bonus Proﬁt Sdn Bhd Flexiroam Sdn Bhd Flexiroam Asia Limited COUNTRY OF INCORPORATION Malaysia Malaysia Hong Kong Flexiroam Global - FZCO United Arab Emirates % EQUITY INTEREST 30 JUNE 2023 31 MARCH 2023 100% 100% 100% 100% 100% 100% 100% 100% Flexiroam Limited, an Australian-incorporated company, serves as the legal parent of the Flexiroam Group. 38 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 21. LEGAL PARENT ENTITY INFORMATION The following detailed information is related to the parent entity, Flexiroam Limited, as at 30 June 2023. AS AT 30 JUNE 2023 $ AS AT 31 MARCH 2023 $ Current assets Non-current assets Total assets Current liabilities Total liabilities Contributed equity Accumulated losses Reserves Total equity Proﬁt/(Loss) for the period/year Other comprehensive income for the period/year Total comprehensive proﬁt/(loss) for the period/year 67,808 25,284,637 25,352,445 652,070 652,070 29,753,925 (5,330,769) 277,219 24,700,375 276,848 - 276,848 46,829 24,607,333 24,654,162 332,570 332,570 29,076,621 (5,607,617) 852,588 24,321,592 (502,123) - (502,123) The Company has provided a guarantee of continuing ﬁnancial support to its subsidiaries. 22. SIGNIFICANT EVENTS AFTER BALANCE DATE There are no signiﬁcant events after the balance date. 23. COMMITMENTS AND CONTINGENCIES At the date of this report, there does not exist: a. any charge on the assets of the Group which has arisen since the end of the ﬁnancial period which secures the liabilities of any other person; or b. any contingent liability of the Group which has arisen since the end of the ﬁnancial period. No contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the ﬁnancial period which will or may substantially aﬀect the ability of the Group to meet its obligations as and when they fall due. 39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24. AUDIT AND OTHER SERVICES During the ﬁnancial period/year, the following fees were paid or payable for services provided by the auditor of the Group, its related practices and non-related audit ﬁrms: Audit and other assurance services Audit and review of ﬁnancial statements Rothsay Audit & Assurance Pty Ltd Component auditors Total remuneration for audit and other assurance services - audit or review of the ﬁnancial report PERIOD ENDED 30 JUNE 2023 $ YEAR ENDED 31 MARCH 2023 $ 10,000 23,559 33,559 19,726 29,930 49,656 25. PRINCIPAL PLACE OF BUSINESS AND REGISTERED OFFICE Principal place of business is at Lot 4-401 & 4-402, Level 4, The Starling Mall, No. 6, Jalan SS21/37, Damansara Utama, 47400 Petaling Jaya, Selangor, Malaysia and Registered oﬃce at Suite 6, 4 Riseley Street, Applecross Western Australia 6153. 26. SEGMENT REPORTING AASB 8 Operating Segments requires operating segments to be identiﬁed on the basis of internal reports about the components of the group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Group’s operating segments have been determined with reference to the monthly management accounts used by the chief operating decision maker to make decisions regarding the Group’s operations and allocation of working capital. Due to the size and nature of the Group, the Board as a whole has been determined as the chief operating decision maker. The chief operating decision makers have been reviewing operations and making decisions based on the supply and provision of telecommunications and solutions as two operating units. Internal management accounts are consequently prepared on this basis. 40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26. SEGMENT REPORTING – CONTINUED PERIOD ENDED 30 JUNE 2023 YEAR ENDED 31 MARCH 2023 TOTAL TOTAL Segment and group revenue 2,763,534 8,904,626 Travel Corporate Rewards and Sponsorship Wholesale Partners Reseller Partners Aviation Services Terminal Enablement Solutions Enterprise Solutions Maritime Services Incubator 1,895,332 415,796 165,493 89,183 18,726 174,863 - 1,230 2,911 6,113,727 1,095,052 364,707 547,350 61,890 623,691 49,708 11,903 36,598 Segment and group cost of sales (1,314,944) (5,044,664) Travel (1,094,631) (4,400,946) Corporate Rewards and Sponsorship Wholesale Partners Reseller Partners Aviation Services Terminal Enablement Solutions Enterprise Solutions Maritime Services Incubator - (86,363) (97,916) (11,682) (23,648) - (470) (234) (2,011) (158,740) (365,271) (36,585) (75,770) - (3,238) (2,103) Other income and forex gains / (loss) 16,420 226,980 Administration and operating expenses, net of impairment reversal 1,704,029 (6,697,783) Depreciation and amortisation (173,579) (26,685) Group proﬁt / (loss) for the period 2,995,460 (2,637,526) Net cash ﬂows used in operating activities (552,966) (1,615,157) Net cash ﬂows used in investing activities (291,902) (732,979) Net cash ﬂows used in ﬁnancing activities - (69) Net cash outﬂow Assets Liabilities (844,868) (2,348,205) 7,094,163 3,585,263 8,214,558 7,781,819 41 DIRECTORS’ DECLARATION The Directors of the Group declare that: 1. The ﬁnancial statements, comprising the Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated Statements of Changes in Equity, accompanying notes, are in accordance with the Corporations Act 2001 and: a. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b. give a true and fair view of the ﬁnancial position as at 30 June 2023 and of the performance for the period ended on that date of the Group. 2. In the Directors’ opinion, there are reasonable grounds to believe Flexiroam Limited and its controlled entities will be able to pay its debts as and when they become due and payable. 3. Note 4 conﬁrms that the ﬁnancial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. 4. The Directors have been given the declarations as required by Section 295A of the Corporations Act for the period ended 30 June 2023. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by: On behalf of the Board Marc Barnett Chief Executive Director Signed on this 31st August 2023 42 INDEPENDENT AUDITOR’S REPORT 43 INDEPENDENT AUDITOR’S REPORT 44 INDEPENDENT AUDITOR’S REPORT 45 INDEPENDENT AUDITOR’S REPORT 46 INDEPENDENT AUDITOR’S REPORT 47 16.08 11.33 8.25 5.25 3.84 0.00% 0.01% 0.16% 3.36% 96.46% 100% ASX INFORMATION AS AT 30 JUNE 2023 Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below. 1. SUBSTANTIAL SHAREHOLDERS NAME CITICORP NOMINEES PTY LIMITED MR THIAN CHOY ONG MR KENN TAT ONG MR MARC BARNETT MR MICHAEL KING 2. DISTRIBUTION OF SECURITY HOLDERS NUMBER OF ORDINARY SHARES HELD PERCENTAGE OF CAPITAL HELD 106,704,247 75,200,000 54,748,562 34,823,530 25,465,938 RANGE 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – over FULLY PAID ORDINARY SHARES HOLDERS UNITS % 38 31 123 522 293 1,007 10,856 94,605 1,079,405 22,306,984 640,099,854 663,591,704 3. UNMARKETABLE PARCELS Holding less than a marketable parcel of ordinary shares; HOLDERS 248 UNITS 1,857,275 4. RESTRICTED SECURITIES OR SECURITIES SUBJECT TO VOLUNTARY ESCROW As at 30 June 2023, the Company had no restricted securities on issue. As at 30 June 2023, the Company had no securities subject to voluntary escrow. 5. UNQUOTED SECURITIES As at 30 June 2023, the Company had no unquoted securities on issue. 48 ASX INFORMATION AS AT 30 JUNE 2023 6. TWENTY LARGEST SHAREHOLDERS – ORDINARY SHARES NAME CITICORP NOMINEES PTY LIMITED MR THIAN CHOY ONG MR KENN TAT ONG MR MARC BARNETT MR MICHAEL KING MR KAY YIP NG HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED GENERAL TECHNOLOGY SDN BHD BNP PARIBAS NOMINEES PTY LTD 1 2 3 4 5 6 7 8 9 10 MS PEK SAN YIP 11 MR THOMAS RICHARD HOOLE 12 MR TAT SENG KOH 13 MR PAUL JASON WIDDIS 14 TA SECURITIES HOLDINGS BERHAD 15 MR KIAN CHUNG CHIN 16 MR EUGENE LINNIK 17 18 19 BNP PARIBAS NOMINEES PTY LTD UOB SHOOTING FISH PTY LTD STONE COLD INDUSTRIES PTY LTD 20 MR ALEXANDER DOUGLAS TOTAL NUMBER OF ORDINARY SHARES HELD PERCENTAGE OF CAPITAL HELD 106,704,247 75,200,000 54,748,562 34,823,530 25,465,938 25,010,000 22,221,337 22,183,333 13,060,640 10,168,000 9,000,000 8,550,000 6,399,736 6,391,667 6,173,750 6,035,605 6,016,536 5,300,000 5,270,000 5,000,000 453,722,881 16.08 11.33 8.25 5.25 3.84 3.77 3.35 3.34 1.97 1.53 1.36 1.29 0.96 0.96 0.93 0.91 0.91 0.80 0.79 0.75 68.4 49 ASX INFORMATION AS AT 30 JUNE 2023 7. VOTING RIGHTS In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. Options do not carry any voting rights. 8. ON-MARKET BUYBACK There is no current on-market buy-back. 9. STOCK EXCHANGE LISTING Quotation has been granted for the Company’s Ordinary Shares (ASX:FRX) and Listed Options (ASX:FRXO). 10. PRINCIPLES OF GOOD CORPORATE GOVERNANCE AND RECOMMENDATIONS The Board has adopted and approved the Company’s Corporate Governance Statement, which can be found on the Company’s website at https://investor.ﬂexiroam.com/about. 50 CORPORATE INFORMATION DIRECTORS Jefrey Ong Tat Seng Koh Marc Barnett Stephen Frank Picton COMPANY SECRETARY Natalie Teo REGISTERED OFFICE Suite 6, 4 Riseley Street Applecross Western Australia 6153 PRINCIPAL PLACE OF BUSINESS AUDITORS BANKERS SHARE REGISTRY Lot 4-401 & 4-402, Level 4, The Starling Mall, No. 6, Jalan SS21/37, Damansara Utama, 47400 Petaling Jaya, Selangor, Malaysia Rothsay Audit & Assurance Pty Ltd Level 1/6 O’Connell Street, Sydney NSW 2000 National Australia Bank 100 St Georges Terrace, Perth WA 6000 Advanced Share Registry 110 Stirling Highway, Nedlands WA 6009 Ph: 08 9389 8033 Fax: 08 9262 3723 SECURITIES EXCHANGE LISTING Flexiroam Limited shares are listed on the Australian Securities Exchange (ASX code: FRX) WEBSITE www.ﬂexiroam.com CONTACT INFORMATION Ph: +61863892688 Email: investor@ﬂexiroam.com 51

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