Annual
Financial Report
For the year ended 30 June 2021
ACN: 063 074 635
Website
www.vonex.com.au
https://vonex.com.au/investors/
corporate-governance
Company Secretary
Daniel Smith
Share Registry
Computershare Investor Services Pty
Limited
Level 11, 172 St Georges Terrace
Perth WA 6000
Tel +61 8 9323 2000
Fax +61 8 9323 2033
Auditor
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
ASX Code
VN8
Directors
Chen Chik (Nicholas) Ong
Non-Exec. Chairman
Matthew Fahey
Managing Director
David Vilensky
Non-Exec. Director
Winnie Lai Hadad
Non-Exec. Director
Jason Gomersall
Non-Exec. Director
Registered Office
Level 8, 99 St Georges Terrace
Perth WA 6000
Tel +61 8 6388 8888
Fax +61 8 6388 8898
Head Office
Level 6, 303 Coronation Drive
Milton QLD 4064
1800 828 668
Tel
Fax 1300 997 999
Solicitors
Bowen Buchbinder Vilensky
Level 14, 251 Adelaide Terrace
Perth WA 6000
Bankers
Commonwealth Bank of Australia
ANZ Bank
Westpac Bank
Vonex Limited / Financial Report for the year ended 30 June 2021 1
Directors’ Report
The Directors present their report together with the consolidated financial
report for Vonex Limited (“Vonex” or “the Company”) and its controlled
entities (collectively the “consolidated entity” or “Group”), for the year
ended 30 June 2021.
Directors
The names and qualifications of persons
who have held the position of Director
of Vonex Limited at any time during the
financial year and up to the date of this
report are:
Mr Nicholas Ong
Non-Executive Chairman
Mr Matthew Fahey
Managing Director
Mr David Vilensky
Non-Executive Director
Ms Winnie Lai Hadad
Non-Executive Director
Mr Jason Gomersall
Non-Executive Director
Information on Directors
& Company Secretary
Nicholas Ong / Non-Executive
Chairman
Mr Ong was a Principal Adviser at the
Australian Securities Exchange (ASX) and
brings 15 years’ experience in IPO, listing rules
compliance and corporate governance. Mr
Ong has developed a wide network of clients
in Asia-Pacific region and provides corporate
and transactional advisory services through boutique firm Minerva
Corporate Pty Ltd. He is a member of the Governance Institute
of Australia and holds a Bachelor of Commerce and a Master of
Business Administration from the University of Western Australia.
Other directorships of Australian listed companies held by Mr Ong in
the last three years are:
Current: Helios Energy Limited, White Cliff Minerals Limited, CFoam
Limited, Mie Pay Limited and Beroni Group Limited.
Previous: CoAssets Limited, Arrow Energy Limited, Tianmei Beverage
Group Corporation Limited, Bojun Agriculture Holdings Limited and
Jiajiafu Modern Agriculture Limited.
Matthew Fahey / Managing
Director & CEO
Mr Fahey is Vonex Telecom’s Chief Executive
Officer and joined the Board as Managing
Director. Mr Fahey joined Vonex Ltd in 2013,
through the Vonex Group’s acquisition
of iTrinity (IP Voice & Data) where he had
served as Sales Director. Mr Fahey brings
with him 20 years’ of extensive experience in building and managing
Telecommunications companies with a well-regarded reputation in
the industry for channel partner programs as well as excellence in
VoIP and Telco. 2014 saw amazing growth for Vonex, winning the CRN
fast 50 award for the fastest growing IT company in Australia.
Mr Fahey is focused on accelerating growth both organically and
by further acquisition and the continued development of diverse
products in order to expand Vonex’s market share.
Mr Fahey has not held any other directorships of Australian listed
companies in the last three years.
Vonex Limited / Financial Report for the year ended 30 June 2021
Jason Gomersall / Non-
Executive Director
Mr Gomersall is a former
Director of 2SG Wholesale
and is the Founder, CEO and
Managing Director of iseek
Communications. Mr Gomersall
has long been at the forefront of
the telecommunications industry and the mobile phone
market since being one of the foundation franchisees of
the Optus World chain of retail stores in the 1990s.
Mr Gomersall has not held any other directorships of
Australian listed companies in the last three years
Daniel Smith / Company
Secretary
Mr Smith is a member of the
Australian Institute of Company
Directors, a Fellow of the
Governance Institute of Australia
and has over 14 years’ primary
and secondary capital markets
expertise. As a director of Minerva Corporate, he has
advised on, and been involved in, a significant number
of IPOs, RTOs and capital raisings on both the ASX and
NSX. His key focus is on corporate governance and
compliance, commercial due diligence and transaction
structuring, as well as ongoing investor and stakeholder
engagement.
Mr Smith is currently a director and/or company secretary
of numerous companies listed on ASX, AIM and NSX.
2
Directors’ Report
David Vilensky / Non-
Executive Director
Mr Vilensky is a practicing
corporate lawyer and the
managing director of Perth
law firm Bowen Buchbinder
Vilensky. He has more than 30
years’ experience in the areas
of corporate and business law and in commercial
and corporate management. Mr Vilensky practices
mainly in the areas of corporate and commercial law,
mergers and acquisitions, mining and resources, trade
practices and competition law and complex dispute
resolution. Mr Vilensky acts for a number of listed and
private companies and advises on directors’ duties,
due diligence, capital raisings, compliance with ASX
Listing Rules, corporate governance and corporate
transactions generally.
Other directorships of Australian listed companies held
by Mr Vilensky in the last three years are:
Current: Latin Resources Limited and Oakdale
Resources Limited.
Mr Vilensky has a Bachelor of Arts, a Bachelor of Laws
from the University of Cape Town and is a member of the
Law Society of Western Australia.
Winnie Lai Hadad /
Non-Executive Director
Ms Lai Hadad has expertise
in change management,
corporate governance, business
process improvement and has
been involved in listings on the
Australian Securities Exchange.
Ms Lai Hadad has been involved with both investments
into China and out-bound investment from China. Her
past roles include implementing Coca-Cola bottling
strategies into Greater China and administering the
first Chinese direct investment in an iron ore mine in the
Pilbara Region of Western Australia.
Other directorships of Australian listed companies held
by Ms Lai Hadad in the last three years are:
Current: Avenira Limited.
Ms Lai Hadad is a lawyer admitted to practice in
Western Australia, a qualified CPA, holds a BA, BCom
and MSc, and is a graduate of both the Australian
Institute of Company Directors and Governance
Institute of Australia.
Vonex Limited / Financial Report for the year ended 30 June 2021 3
Directors’ Report
Interests in the securities of the Company
As at the date of this report, the interests of the directors in securities
of the Company were:
Nicholas Ong
Matthew Fahey
David Vilensky
Winnie Lai Hadad
Jason Gomersall
Ordinary Shares
Performance Rights
Options
2,826,462
2,550,000
2,552,000
6,781,018
8,830,000
3,000,000
2,550,000
2,550,000
1,500,000
149,367
557,727
Nil
Nil
1,500,000
1,500,000
Meetings of Directors
The attendance of directors at meeting of the company’s Board of
Directors held during the year is as follows:
Directors
Nicholas Ong
Matthew Fahey
David Vilensky
Winnie Lai Hadad
Jason Gomersall
Number of Meetings
Attended
Eligible to Attend
4
4
4
4
4
4
4
4
4
4
Principal Activities
The principal activities withing the consolidated entity include the
year on year growth within our Retail Telco division and expansion
of our Wholesale Telco division during the financial year. Other
activities have focused on the continuation of R&D projects
within technologies in communications, including the Company’s
proprietary cloud hosted PBX system.
Vonex Limited / Financial Report for the year ended 30 June 2021 4
Directors’ Report
Financial Position & Operating Results
The financial results of the consolidated entity for the financial year
ended 30 June 2021 are:
Cash and cash equivalents ($)
Net assets / (liabilities) ($)
Revenue ($)
Net loss after tax ($)
Loss per share (cents)
30 / Jun / 21
30 / Jun / 20
% Change
3,658,416
5,575,939
19,215,521
4,811,798
6,808,837
15,406,034
(3,984,788)
(705,964)
(2.10)
(0.45)
(23%)
(18%)
25%
(464)%
(366)%
Dividends Paid or
Recommended
There were no dividends declared or paid by
the Company during the year and no dividend is
recommended.
Review of Operations
MNF Group transaction
Subsequent to year-end, on 23 July 2021, the Company
announced the that it had agreed to acquire part of
MNF Group’s Direct Business which services SME and
Consumer customers (the “Direct Business”) for $31 million,
comprising $20 million of cash consideration payable on
completion and $11 million of deferred cash consideration
payable in monthly installments over 12 months.
The Direct Business sells cloud phone, internet and
mobile services to small-to-medium enterprise and
residential customers in Australia, as well as dedicated
audio and video conferencing services. The Acquisition
will materially expand Vonex’s footprint of SME and
residential customers across Australia and will see
the Company migrate approximately 5,250 new SME
customers to its platform. The Acquisition delivers Vonex
a strong platform for organic growth in the Australian
telecommunications market through cross-selling internet
and mobility products to Direct Business customers.
The Direct Business delivered an unaudited FY21 EBITDA
of $5.5 million from revenue of $15.0 million.
Completion of the acquisition of the Direct Business took
place on 9 August 2021.
Nextel acquisition
On 18 December 2020, Vonex announced that it had
entered into a binding term sheet with Nextel Pty Ltd
(“Nextel”) to acquire Nextel’s business and operations as
a going concern.
Nextel, a provider of telecommunications services to
business customers, is recognised as an industry leader
in the design, installation and maintenance of voice,
data and communications networks. It is an established
single-source provider to small-to-medium enterprise
(SME) businesses with expertise in rolling out wireless,
fibre and RFID networks, as well as delivering structured
cabling, telephony systems and electrical fit outs to
large-scale projects.
In FY20, Nextel achieved EBITDA of approximately
$450,000 on revenue of approximately $2 million, with
infrastructure and specialised projects a key driver. Nextel
also brings a highly capable and experienced team
headquartered in Sydney that is well positioned to drive
further growth from immediate cross sell opportunities.
Nextel brings long-term relationships with tier-1 carriers,
network partners and customers spanning a range of
industries, including LJ Hooker, Endemol Shine Australia,
4 Pines Brewing Co, Lifeline and the Sydney Harbour
Federation Trust.
Vonex Limited / Financial Report for the year ended 30 June 2021 5
Directors’ Report
Completion of the acquisition of Nextel’s business
and operations took place on 3 February 2021, The
integration of the operations of Nextel was completed
in the June quarter, six months on from when the
acquisition was announced. The Company is now
engaged in promoting Nextel with proactive marketing
campaigns which has have already yielded a $140k
infrastructure contract.
The Company will continue to explore further synergies
between the Nextel business and the Company’s existing
operations to identify new opportunities to add value for
Vonex’s business customers.
Wholesale Operations
All Vonex wholesale services became combined and
branded as 2SG Wholesale as of 1st January 2021.
2SG Wholesale is a telecommunications and data
wholesaling business which provides Australian Managed
Service Providers, ISPs and System Integrators with
access to the latest in hardware and connectivity
solutions from leading brands. Its provision of fast, secure,
business-grade wireless broadband has met strong
customer demand amid the rise of working from home
across Australia during the COVID-19 pandemic – a
trend that is set to continue.
Vonex’s Wholesale division showed
continued growth in the half year
following the successful integration
of 2SG Wholesale.
During the period, Vonex also delivered digital upgrades
that increased product features and reduced costs.
The Company deployed newly integrated billing and
provisioning platforms across 2SG Wholesale as well as
Nextel. 2SG Wholesale has also deployed its new B2B
NBN ordering platform for wholesale customers, enabling
touchless provisioning and service management—an
essential feature as social distancing measures remain
part of life in areas of Australia.
Successfully integrating 2SG Wholesale has allowed
the Company to expand its offering to SME customers
by developing and delivering new products. 2SG’s
sales growth was strong across its new and existing
Wholesale product suite in Q2 FY21, including an 88%
increase in Mobile Broadband orders year-on-year
for the quarter, Mobile Voice up 321% and NBN with
4G backup increasing by 107% over the same period.
This strong growth continued across Q3 and Q4 FY21,
reflecting Vonex beginning to capture the cross-selling
opportunities the Company identified prior to acquiring
2SG Wholesale.
In addition, the business grade mobile broadband
offered by 2SG Wholesale is attracting potentially much
larger wholesale customers. Discovery Technologies,
a subsidiary of ASX 300 member Data#3 Ltd (ASX:
DTL), signed up as a new customer during FY21. In
addition, Orange Business Services also signed up, a
network native digital services company and the global
enterprise division of the Orange Group (EPA: ORA) which
currently services 3,000 multi-national clients.
The Company is currently rolling out 5G services to
its customers, providing another significant value
proposition to support sales. After having been selected
by Optus as a key 5G partner, 2SG has now commenced
the launch, which includes a brand new Service
Qualification and an automated ordering system for
partners and customers. The Company expects this new
product to contribute to revenue growth.
Retail Growth and Strong Customer
Satisfaction
In FY21, Vonex grew the number of SME retail customers
by 25% year-on-year while Total Contract Value of
new customer sales remained strong with Q4 of FY21
representing a near record quarter and June 2021 the
most productive month of the financial year.
Vonex’s cloud-based PBX phone
service surpassed 45,000 active
subscribers during the financial
period, with growth over the year to
June 30 providing a 26% increase
over FY20.
NBN Assure
The Company has rolled out its NBN Assure service to
partners following the launch in Q3 FY21. NBN Assure is
Vonex’s “always on” business grade broadband service. It
is a first-to-market SME specific broadband offering that
provides businesses with critical service continuity in the
event of a localised or general NBN outage through a
wireless 4G failover backup tool.
The product is highly valued by customers whose
operations conducted online are impacted through
network faults. NBN Assure provides business continuity
assurance for all critical systems and applications with
static identity, enabling users to work as normal when
on back up and be able to log into secure cloud systems
and still gain access from remote locations such as
home. NBN Assure also features cyberattack protection
which is gaining a positive response from customers in
both the wholesale and retail markets.
Oper8tor
Oper8tor is a disruptive aggregated communications
platform which targets the inclusion of Conference,
Voice, Message and Video functionality, facilitating user
communication across a broad swathe of channels. The
Vonex Limited / Financial Report for the year ended 30 June 2021 6
Directors’ Report
mobile app aims to seamlessly link all voice calls as well
as messaging across multiple platforms and devices.
In December 2020, Company announced that it was
transitioning Oper8tor from one of active research
and development, to one which focuses on identifying
and engaging the right technical and financial
partners to guide Oper8tor’s further development and
commercialisation. Vonex will maintain in good standing
all intellectual property, websites and internationally
granted patents relating to Oper8tor, however it does
not anticipate committing further development capital
to the project at this time.
COVID-19
In light of the COVID-19 pandemic, Vonex implemented
a range of initiatives in March 2020 to minimise impact of
the virus on its operations. These included:
• The Company’s call centre in Cebu in the Philippines
remained open as normal with a remote working
strategy in place if Cebu staff are placed in lock
down and cannot attend work.
• Handset stock sourced from China was stockpiled
and Vonex had several months of inventory to
continue to fulfil new and existing orders without new
stock arriving.
• Adapting nimbly to the current climate, the Company
rapidly rolled out ‘work from home’ marketing
campaigns to existing and potential SME customers
which highlight how Vonex’s Hosted PBX technology
enables a seamless transition for staff to work from
home.
• Ongoing lockdown’s are expected to have some
impact on the organic growth of the business and
will continue to impact divisions where site visits are
required to complete work, such as Nextel.
Corporate
Capital Raising
Subsequent to the end of the period, on 23 July
2021, Vonex announced that it had received firm
commitments from new and existing sophisticated and
institutional investors to subscribe for a two-tranche
placement of 109,090,909 fully paid ordinary shares
(“Shares”) at $0.11 each to raise $12 million before costs
(“Placement”). Vonex also announced a Share Purchase
Plan (“SPP”) to eligible, existing shareholders to raise
up to an additional $2 million at the Placement price.
Tranche 1 of the Placement, consisting of 22,502,051
shares to raise $2.475m completed on 30 July 2021,
with shareholders approving the issue of shares under
Tranche 2 of the Placement at the general meeting held
on 30 August 2021.
The Company received the support of a strong mix of
institutional investors across Australia and New Zealand
who were introduced by PAC Partners Securities Pty
Ltd, which acted as Lead Manager to the Placement.
Net proceeds from the Placement and SPP will be used
to part fund the remaining balance of the $20 million
consideration payable by Vonex on completion of the
acquisition of MNF Group’s Direct business, as well as
the $11 million of deferred cash consideration payable in
monthly installments over 12 months.
Shareholder Meetings
At a general meeting held 4 September 2020, all
resolutions were passed by way of a poll.
At the Company’s AGM held 27 November 2020, all
resolutions were passed by way of a poll.
R&D Tax Rebate
The Company has received a Research and
Development Tax Incentive rebate of $0.54 million for
FY20 FY201 (FY19FY20: $0.63 million) from the Australian
Government’s Research and Development Tax Incentive
Program for eligible R&D activities conducted by the
Company. The refund was in respect of eligible R&D
activities across Vonex’s portfolio.
Cash Position
The Company ended the financial
year with a strong cash balance of
$3.658 million.
Outlook
Following its acquisition of MNF Group’s Direct Business,
Vonex is well-placed to execute its clear three-pillar
growth strategy.
The highly complementary acquisition has transformed
Vonex by delivering financial scale and market
relevance. Through this deal, Vonex is welcoming a highly
experienced new team of 30 staff, more than 5,000 new
SME customers and more than 180 new channel partners
to its platform, and expects to almost double the
Company’s annualised recurring revenue on a full year
basis. Vonex has identified and is pursuing opportunities
to increase the value of the acquired and combined
business by targeting growth in lead generation, brand
awareness and average revenue per user.
In 2SG Wholesale, Vonex plans to deliver organic growth
which is accelerated by the recent acquisition by way of
cross-selling opportunities, product range expansion and
network cost efficiencies. The Company’s focus continues
to be on the recruitment of new Channel Partners across
Australia to support the anticipated growth in Hosted
Vonex Limited / Financial Report for the year ended 30 June 2021 7
Directors’ Report
PBX and Unified Communications in the region. National
marketing programs in Australia’s capital cities remain
underway to gain traction with SME customers and
facilitate strong growth in registered PBX users.
Events After the
Reporting Period
Vonex is pursuing an established M&A-led growth
strategy for FY22 and FY23, targeting profitable IT
and telco businesses that offer potential for growth in
revenue and profit through further product expansion
and cross-selling.
With the latest Communications Report from the
Australian Communications and Media Authority (ACMA)
forecasting the Australian telecommunications industry
revenue to grow from $44 billion in 2018 to $47 billion by
2022, Vonex continues to see a positive outlook for growth
in sales as the Company’s customer base expands.
Significant Changes in
the State of Affairs
There have been no other significant changes in the
state of affairs of the consolidated entity during the
financial year.
Subsequent to the reporting period on 30 July 2021
Vonex raised $2,475,000 in a share placement via the
issue of 22,502,051 ordinary fully-paid shares at $0.11 per
share, as part of the two-tranche placement announced
23 July 2021. On 30 August 2021, shareholders approved
the issue of an additional 86,588,858 shares at $0.11
per shares pursuant to tranche 2, which will raise an
additional $9.525m.
Subsequent to the reporting period on 9 August 2021
Vonex has drawn down a $16m debt facility from
Longreach Credit Investors to part fund the initial $20
million consideration payable by Vonex on completion of
the acquisition of MNF Group’s Direct business.
Subsequent to the reporting period on 18 August 2021
Vonex announced that its SPP received strong support
and was heavily over-subscribed with in excess of $3.7
million of demand from eligible Vonex shareholders. On
19 August 2021, Vonex issued 18,181,485 shares to the SPP
subscribers.
Apart from the disclosures made within this report, no
other matter or circumstance has arisen since 30 June
2021 that has significantly affected, or may significantly
affect the consolidated entity’s operations, the results
of those operations, or the consolidated entity’s state of
affairs in future financial years.
Vonex Limited / Financial Report for the year ended 30 June 2021 8
Directors’ Report
Remuneration Report
(Audited)
The remuneration report is set out under the following main headings:
A
B
C
D
E
F
G
H
Remuneration Governance
Remuneration Structure
Details of Remuneration
Share-Based Compensation
Equity Instruments Issued on Exercise of
Remuneration Options
Value of Options to Directors
Equity Instruments Disclosures Relating to Key
Management Personnel
Other Transactions with Key Management
Personnel
I
Additional Statutory Information
The information provided in this
remuneration report has been audited
as required by section 308(3C) of the
Corporations Act 2001. The remuneration
arrangements detailed in this report are for
the key management personnel (“KMP”) of
the Group as follows:
Mr Nicholas Ong
Non-Executive Chairman
Mr Matthew Fahey
Managing Director
Mr David Vilensky
Non-Executive Director
Ms Winnie Lai Hadad
Non-Executive Director
Mr Jason Gomersall
Non-Executive Director
Use of remuneration consultants
The Company did not employ services of consultants to review its existing remuneration policies.
Voting and comments made at the Company’s 2020 Annual General Meeting
The Company received 83.4% of “yes” proxy votes on its remuneration report for the 2020 financial year, inclusive of
discretionary proxy votes, with the resolution passing by way of a poll. The Company did not receive any specific
feedback at the AGM or throughout the year on its remuneration practices.
A Remuneration Governance
B Remuneration Structure
Key management personnel have authority and
responsibility for planning, directing and controlling the
activities of the Group. Key management personnel
comprise the Directors of the Group and Executives of
the Group. The performance of the Group depends
upon the quality of its key management personnel. To
prosper the Group must attract, motivate and retain
appropriately skilled directors and executives.
The Group’s broad remuneration policy is to ensure the
remuneration package properly reflects the person’s
duties and responsibilities and that remuneration is
competitive in attracting, retaining and motivating
people of the highest quality. The Group does not
engage the services of any remuneration consultants.
Non-Executive remuneration
arrangements
The remuneration of Non-Executive Directors (NED)
consists of Directors’ fees, payable in arrears. They serve
on a month to month basis and there are no termination
benefits payable. Non-Executive Directors are able to
participate in share option-based incentive programmes
in accordance with Group policy.
When required to spend time on Group Business outside
of NED duties, Directors are paid consulting fees on
time spent and details of which are contained in the
Remuneration Table disclosed in Section C of this Report.
Remuneration of Non-Executive Directors are based on
Vonex Limited / Financial Report for the year ended 30 June 2021 9
Directors’ Report
fees approved by the Board of Directors and is set at
levels to reflect market conditions and encourage the
continued services of the Directors.
The Group has provided variable remuneration incentive
schemes to certain Non-Executive Directors as detailed
in Note 31.
Non-Executive Directors’ fees are determined within
an aggregate directors’ fee pool limit, which will be
periodically recommended for approval by shareholders.
The maximum currently stands at $500,000 per annum
as per Section 13.8 of the Company’s constitution and
may be varied by ordinary resolution of the shareholders
in general meeting.
C Details of Remuneration
The key management personnel (“KMP”) of the Group are the
Directors and management of Vonex Limited detailed in the table
below. Details of the remuneration of the Directors of the Group are
set out below:
Short-term benefits
Post-
employment
benefits
Share-based
payment
30/06/2021
Salary & fees
($)
Cash bonus
($)
Long service
leave
($)
Super-
annuation
($)
Performance
rights/options
(I) ($)
Total
($)
Percentage
remuneration
consisting of
performance
rights/options
for the year
Directors
Mr Fahey
286,000
Mr Ong
Mr Vilensky
Ms Hadad
60,000
60,000
60,000
Mr Gomersall
60,000
Total
526,000
-
-
-
-
-
-
5,722
-
-
-
-
27,170
5,700
5,700
5,700
5,700
364,525
683,417
317,428
383,128
196,328
262,028
181,650
247,350
181,650
247,350
5,722
49,970
1,241,581
1,823,273
53%
83%
75%
73%
73%
68%
(I) Total includes issued options valued at $1,211,000 approved at
Annual General Meeting on 27 November 2020.
Vonex Limited / Financial Report for the year ended 30 June 2021 10
Directors’ Report
Short-term benefits
Post-
employment
benefits
Share-based
payment
30/06/2020
Salary & fees
($)
Cash bonus
($)
Long service
leave
($)
Super-
annuation
($)
Performance
rights/options
(iv) ($)
Total
($)
Percentage
remuneration
consisting of
performance
rights for the
year
Directors
Mr Fahey (ii)
283,000
Mr Ong (ii)
57,000
Mr Vilensky (ii)
57,000
Ms Hadad (ii)
57,000
Mr Gomersall
(i) (ii)
Total
17,000
471,000
-
-
-
-
-
-
5,428
26,885
19,734
335,047
-
-
-
-
5,415
5,415
5,415
1,615
190,148
252,563
190,148
252,563
-
-
62,415
18,615
5,428
44,745
400,030
921,203
6%
75%
75%
0%
0%
43%
(i) Mr Gomersall (Non-Executive Director) (appointed on 28
February 2020)
(ii) Executive and Non-Executive directors volunteered to reduce
their fees by 22% for the period 1 April 2020 to 30 June 2020
The relative proportions of remuneration that are linked to
performance and those that are fixed are as follows:
Director
Mr Fahey
Mr Ong
Mr Vilensky
Ms Hadad
Mr Gomersall
Fixed Remuneration*
At risk-LTI**
2021
47%
17%
25%
27%
27%
2020
94%
25%
25%
100%
100%
2021
53%
83%
75%
73%
73%
2020
6%
75%
75%
0%
0%
*Fixed Remuneration includes short term benefits and post-employment benefits
Performance rights are at risk - **Long term incentives are provided by way of the performance rights issued
with long term performance milestones (Tranche 1,2 and 3). The percentages disclosed reflect the fair value of
remuneration based on the value of the performance rights at grant date subject to future vesting conditions.
Options are at risk - **Long term incentives are provided by way of options issued, exercisable from 1 Dec 2020 to 1
Dec 2023, at a exercise price of $0.37.
Vonex Limited / Financial Report for the year ended 30 June 2021 11
Directors’ Report
Remuneration Policy
Non-Executive Directors
Total remuneration for all Non-Executive Directors, is
not to exceed $500,000 per annum as approved by
shareholders. This does not include Consulting Fees.
Non-Executive Directors received a fixed fee for
their services of $60,000 per annum (excl. GST) plus
superannuation for services performed.
The Group has provided variable remuneration
incentive schemes to certain Non-Executive Directors
as detailed in Note 31. There are no termination or
retirement benefits for non-executive directors (other
than statutory superannuation).
Executive Director
Mr Matthew Fahey / Chief Executive Officer
Outlined below is a summary of the material provisions
of the Executive Services Agreement between
the Company and Mr Matthew Fahey. Mr Fahey
receives an annual salary of $250,000 plus statutory
superannuation. Mr Fahey is also entitled to director fee
of $36,000 per annum. Either party may terminate the
Executive Services Agreement by giving six (6) months
written notice.
A bonus based on key performance indicators (“KPIs”) will
be paid as follows:
The Company may at any time during the Term or any
extension thereof pay a performance-based bonus
over and above the salary. In determining the extent of
any performance based bonus, the Company shall take
into consideration the key performance indicators of the
Executive and the Company, as the Company may set
from time to time, and any other matter that it deems
appropriate and may issue shares in the Company to the
Executive in lieu of cash if the Executive consents.
Equity Instruments Issued
on Exercise of Remuneration
Options
No equity instruments were issued during the year to
Directors or key management personnel as a result of
exercising remuneration options (2020: Nil).
D Share-Based Compensation
E
Short term and long term incentives
In prior financial years Mr Fahey, Mr Ong and Mr
Vilensky were issued performance rights incentives for
their work and ongoing commitment and contribution
to the Company.
The performance rights were issued in three tranches,
each with different performance milestones. Refer to
Note 31 for further details in respect to the performance
rights granted.
In the current financial year, all directors were issued
options for their work and ongoing commitment and
contribution to the Company.
Refer to Note 31 for further details in respect to the
options granted.
Vonex Limited / Financial Report for the year ended 30 June 2021 12
Directors’ Report
F Value of Options to Directors
Options – Directors
During the year Vonex Ltd issued 10,000,000 options in one tranche
to directors as part of their remuneration.
Type of
options
Grant
date
Expiry
date
Exercise
price
Value per
option at
grant date
Date
exercisable
%
vested
during
the year
%
forfeited
during
the year
Financial
year
options
vest
Range of
possible
values
relating
to future
payments
Directors
27 Nov
2020
1 Dec
2023
$0.370
$0.1211
Between 1
Dec 2020 to
1 Dec 2023
100%
-
2021
-
When exercisable, each option is convertible into one ordinary share
of Vonex Ltd. Further information on the options is set out in Note 31
to the Financial Statements.
Total value of options issued is $1,211,000, breakdown as follows:
Director
Option Holding
Mr Matthew Fahey
Mr Nicholas Ong
Mr David Vilensky
Ms Winnie Lai Hadid
Mr Jason Gomersall
3,000,000
2,500,000
1,500,000
1,500,000
1,500,000
$ Value
363,300
302,750
181,650
181,650
181,650
Vonex Limited / Financial Report for the year ended 30 June 2021 13
Directors’ Report
G
Equity Instruments Disclosures Relating
to Key Management Personnel
Share Holdings
The numbers of shares in the Company held during the financial year
by each Director and other key management personnel of the Group
are set out below.
2021
Opening Balance
Received as
Remuneration
Received During
Year on Exercise of
Options
Net Change Other
Closing Balance
Directors
Mr Matthew Fahey
6,408,291
Mr Nicholas Ong
2,644,645
Mr David Vilensky
2,550,000
Ms Winnie Lai Hadid
Mr Jason Gomersall
-
-
11,602,936
-
-
-
-
-
-
-
-
-
-
-
-
100,000
6,508,291
-
-
58,823
285,000
443,823
2,644,645
2,550,000
58,823
285,000
12,046,759
Vonex Limited / Financial Report for the year ended 30 June 2021 14
Directors’ Report
Deferred Performance Shares Holdings
The table shows how many deferred KMP performance shares have
been granted, vested and forfeited during the period.
Year Granted
No Granted
Grant Date
Value per
share
Grant Date
value
Vested value
Forfeited value
Maximum
value yet to
vest
Mr Fahey
Tranche 3
Tranche 2
Tranche 3
Mr Ong
Tranche 3
Tranche 2
Tranche 3
Mr Vilensky
Tranche 3
Tranche 2
Tranche 3
FY17
FY18
FY18
FY17
FY18
FY18
FY17
FY18
FY18
130,000
100,000
100,000
330,000
130,000
1,210,000
1,210,000
2,550,000
130,000
1,210,000
1,210,000
2,550,000
$0.45
$0.20
$0.20
$0.45
$0.20
$0.20
$0.45
$0.20
$0.20
$58,500
$20,000
$20,000
$58,500
$20,000
-
$58,500
$58,500
$242,000
$242,000
$242,000
-
$58,500
$58,500
$242,000
$242,000
$242,000
-
-
-
-
-
-
-
-
-
-
-
-
$20,000
-
-
$242,000
-
-
$242,000
The above tables excludes 8,500,000 Performance rights issued
to Mr Matthew Fahey on 28 July 2017 in relation to Oper8tor rights.
These rights have nil value and expire on 28 July 2022.
Vonex Limited / Financial Report for the year ended 30 June 2021 15
Directors’ Report
2021
Opening Balance
Vested during the
period
Net Change Other
Closing Balance
Directors
Mr Matthew Fahey
8,830,000*
Mr Nicholas Ong
2,550,000
Mr David Vilensky
2,550,000
13,930,000
-
-
-
-
-
-
-
-
8,830,000
2,550,000
2,550,000
13,930,000
*8,500,000 Performance rights relate to Oper8tor rights issued on 28
July 2017. These rights have nil value and expire on 28 July 2022.
Option Holdings
The table shows how many deferred KMP options have been
granted, vested and forfeited during the period.
2021
Opening Balance
Granted during the
period
Exercised during the
period
Closing Balance
Directors
Mr Matthew Fahey
-
3,000,000
Mr Nicholas Ong
52,000
2,500,000
Mr David Vilensky
Ms Winnie Lai Hadid
Mr Jason Gomersall
-
-
-
1,500,000
1,500,000
1,500,000
52,000
10,000,000
-
-
-
-
-
-
3,000,000
2,552,000
1,500,000
1,500,000
1,500,000
10,052,000
Vonex Limited / Financial Report for the year ended 30 June 2021 16
Directors’ Report
H
Other Transactions with Key
Management Personnel
Transactions with Related Parties
The following transactions occurred with related parties:
Services Provided
Company secretarial, corporate compliance, bookkeeping and accounting
fees from Minerva Corporate (director-related entity of Nicholas Ong)
2021
$
56,788
2020
$
74,161
Payments for legal fees from Bowen Buchbinder Vilensky (director-related
entity of David Vilensky)
26,033
37,378
Receivable from and Payable to Related Parties
The following balances are outstanding at the reporting date in
relation to transactions with related parties:
Current Payables
2021
$
Trade payables to Minerva Corporate (director-related entity of Nicholas Ong)
9,900
2020
$
4,950
I
Additional Statutory Information
Relationship between remuneration and the
Group’s performance
The following table shows key performance indicators for the
Group over the last five years:
*
No closing share price as the company
was unlisted
**
Restated loss for the year. Refer to Note
32 for Restatement.
2021
2020
2019
2018
2017
Loss for the year
$3,984,788
$705,964**
$2,791,622
$14,713,402
$9,737,819
Closing Share Price
12.5 cents
11.0 cents
11.0 cents
14.0 cents
N/A*
KMP Incentives
$1,241,581
$400,030
$342,538
$1,105,537
$702,000
Total KMP Remuneration
$1,823,273
$921,203
$1,138,252
$1,734,754
$1,503,715
End of Audited Remuneration Report
Vonex Limited / Financial Report for the year ended 30 June 2021 17
Directors’ Report
Indemnity and insurance
of auditor
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.
Options
At the date of this report the Company has the
following options on issue:
a) 14,500,000 options exercisable at $0.30 on or before
7 June 2023;
b) 14,719,731 options exercisable at $0.20 on or before
30 November 2022;
c) 3,215,060 options exercisable at $0.20 on or before
30 November 2022;
d) 1,800,000 options exercisable at $0.20 on or before
30 November 2022; and
e) 10,000,000 options exercisable at $0.37 on or before
1 December 2023.
Environmental
Regulation
The Group’s operations are not regulated by any
significant environmental regulations under a law of the
Commonwealth or of a state or territory.
Officer’s Indemnities and
Insurance
The Company has paid a premium for a contract
insuring all Directors and executive officers of the
Company and certain related bodies corporate against
all liabilities and expenses arising as a result of work
performed in their respective capacities, to the extent
permitted by law. The Directors have not included in
this report details of the nature of the liabilities covered
or the amount of the premium paid in respect of the
Directors and executive officers insurance liability
contract as disclosure is prohibited under the terms of
the contract.
The Company has agreed to indemnify each person
who is, or has been a director, officer or agent of
the Company and/or of certain of its related bodies
corporate against all liabilities to another person (other
than the Company or a related body corporate) that
may arise from their position as director, officer or
agent, except where the liability arises out of conduct
involving a lack of good faith. The Company is required
to meet the full amount of any such liabilities, including
costs and expenses for a period of seven years.
No liability has arisen since the end of the previous
financial year which the Company would, by operation
of the above indemnities, be required to meet.
Vonex Limited / Financial Report for the year ended 30 June 2021 18
Directors’ Report
Performance Rights
As at the date of this report the Company has
27,460,000 performance rights held with the following
performance conditions:
a) 780,000 convertible upon the Company reaching
$10 million annualised revenue per annum in any
quarter. These performance rights have vested but
not yet converted to ordinary shares (i);
b) 4,840,000 convertible upon the Company achieving
audited gross revenue of $15 million in a financial
year. These performance rights have vested but not
yet converted to ordinary shares (ii);
c) 4,840,000 convertible upon the Company achieving
audited net profit after tax of $1 million in a financial
year (ii);
d) 2,000,000 convertible into ordinary shares upon
completion of the beta version of the Oper8tor App
and commencement of the official Oper8tor launch
in Europe;
e) 5,000,000 convertible into ordinary shares upon the
Oper8tor App achieving 10 million active users; and
f)
10,000,000 convertible into ordinary shares upon the
Oper8tor App achieving 50 million active users;.
(i)
Notwithstanding the performance conditions above, all the performance rights will vest automatically if there
is a trade sale of all or any part of the business or assets of the Company or if the Company merges with
another company or is the subject of a successful takeover or if the multi-platform phone call and messaging
communication app called “Oper8tor” is spun out into a separate Company.
(ii) Notwithstanding the performance conditions above, all the performance rights will vest automatically if there is
a trade sale of all or any part of the business or assets of the Company or if the Company merges with another
company or is the subject of a takeover of 50.1% or more, or if the multi-platform phone call and messaging
communication app called “Oper8tor” is spun out into a separate Company.
Subject to achievement of the performance conditions, one share will be issued for each performance right that
has vested on the same terms and conditions as the Company’s issued shares and will rank equally with all other
issued shares from the issue date.
Proceedings on Behalf
of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in on
behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
Vonex Limited / Financial Report for the year ended 30 June 2021 19
Directors’ Report
Non-Audit Services
The Company may decide to employ the Auditor on
assignments additional to their statutory audit duties.
Details of the amounts paid or payable to the Auditor
for audit and non-audit services provided during the
year are set out below.
The Board has considered the position and, in
accordance with the advice received from the Audit
Compliance and Risk Management Committee, is
satisfied that the provision of the non-audit services is
compatible with the general standard of independence
for auditors imposed by the Corporations Act. The
Directors are satisfied that the provision of non-audit
services by the Auditor, as set out below, did not
compromise the auditor independence requirements of
the Corporations Act for the following reasons:
• all non-audit services are reviewed by the Audit
Compliance and Risk Management Committee to
ensure they do not impact the impartiality; and
• objectivity of the Auditor, none of the services
undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics
for Professional Accountants, including reviewing
or auditing the Auditor’s own work, acting in a
management or a decision-making capacity for the
Company, acting as advocate for the Company or
jointly sharing economic risk and rewards.
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms.
Assurance Services
Audit Services
RSM Australia Partners
Total remuneration for audit and assurance services
Corporate Services
RSM Australia Pty Ltd
Total remuneration for corporate services
2021
$
95,000
95,000
-
-
2020
$
79,000
79,000
31,025
31,025
Auditor
Auditor’s Independence Declaration
RSM Australia Partners was appointed
as the Group’s auditor at the 2011 Annual
General Meeting and continues in office
in accordance with section 327 of the
Corporations Act 2001.
A copy of the Auditor’s Independence Declaration as required
under section 307C of the Corporations Act 2001 is included within
this financial report.
This Directors’ Report is signed in accordance with a resolution of
the Board of Directors.
Nicholas Ong
Chairman
31 August 2021
Vonex Limited / Financial Report for the year ended 30 June 2021 20
Auditor’s Independence Declaration
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
RSM Australia Partners
As lead auditor for the audit of the financial report of Vonex Limited for the year ended 30 June 2021, I declare
Level 32, Exchange Tower
that, to the best of my knowledge and belief, there have been no contraventions of:
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
As lead auditor for the audit of the financial report of Vonex Limited for the year ended 30 June 2021, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
AUDITOR’S INDEPENDENCE DECLARATION
RSM AUSTRALIA PARTNERS
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(i)
Perth, WA
(ii)
Dated: 31 August 2021
any applicable code of professional conduct in relation to the audit.
TUTU PHONG
Partner
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2021
TUTU PHONG
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Vonex Limited / Financial Report for the year ended 30 June 2021 21
Consolidated Statement of Profit or Loss &
Other Comprehensive Income
Sales Revenue
Cost of sales
Gross Profit
Other Revenues
Disposal of mining royalties
Administration Expenses
Amortisation
Account and audit fees
Bad & doubtful debt expenses
Contractor expenses
Dealer commissions
Depreciation expenses
Directors’ fees
Employee expenses
Finance costs
Insurance expense
Impairment expense
Legal fees
Loss on disposal of non-current assets
Occupancy expenses
Repairs and maintenance
Share based payment expense
Stamp duty
Travel expenses
Loss before income tax
Income tax benefit
Net loss for the year
Other comprehensive income for the year
Note
2
4
3
4
4
4
16
31
2021
$
18,259,243
2020
$
Restated
12,770,304
(12,737,896)
(8,096,081)
5,521,347
4,674,223
956,278
-
(1,416,444)
(536,804)
(109,118)
(82,016)
(1,081,592)
(769,090)
(321,325)
(302,220)
(3,579,201)
(58,957)
(129,426)
(771,319)
(104,958)
(3,411)
(22,190)
(7,579)
(1,269,776)
(322)
(22,260)
(4,110,383)
125,595
(3,984,788)
-
885,730
1,750,000
(1,109,404)
(238,181)
(123,906)
(11,623)
(556,492)
(635,440)
(330,075)
(241,995)
(3,592,062)
(57,184)
(94,596)
-
(46,954)
(2,541)
(511)
(1,446)
(770,573)
(136,868)
(107,931)
(747,829)
41,865
(705,964)
-
Total comprehensive loss for the year
(3,984,788)
(705,964)
Basic and diluted earnings per share of loss attributable to
the owners of Vonex Limited (cents per share)
(2.10)
(0.45)
The accompanying notes form part of these financial statements | Refer to note 32 for detailed information on Restatement of comparatives
Vonex Limited / Financial Report for the year ended 30 June 2021 22
Consolidated Statement of Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Other current assets
Total Current Assets
Non-Current Assets
Intangible assets
Plant and equipment
Contract assets
Right of Use Assets
Other non-current assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Lease liability
Total Current Liabilities
Non-Current Liabilities
Provisions
Lease liability
Deferred tax liability
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Note
9
10
11
12
13
16
11
17
12
19
18
20
18
20
5
21
22
27
2021
$
3,658,416
1,684,355
60,676
463,858
5,867,305
4,507,400
335,630
7,918
908,037
109,244
5,868,229
11,735,534
3,888,885
521,842
346,815
4,757,542
121,031
648,513
632,509
1,402,053
6,159,595
5,575,939
2020
$
Restated
4,811,798
1,480,524
55,155
441,608
6,789,085
4,233,417
201,201
32,860
883,200
90,800
5,441,478
12,230,563
3,181,665
456,271
267,300
3,905,236
75,136
683,250
758,104
1,516,490
5,421,726
6,808,837
50,442,160
5,177,748
47,642,165
5,230,937
(50,043,969)
(46,064,265)
5,575,939
6,808,837
The accompanying notes form part of these financial statements | Refer to note 32 for detailed information on Restatement of comparatives
Vonex Limited / Financial Report for the year ended 30 June 2021 23
Consolidated Statement of Changes in Equity
At 1 July 2019
45,484,270
(45,308,426)
3,158,579
3,334,423
Issued Capital
Accumulated Losses
Reserves
$
$
$
Total
$
At 1 July 2020
47,642,165
(46,064,265)
5,230,937
6,808,837
47,642,165
(46,064,265)
5,230,937
6,808,837
Comprehensive income
Loss for the year
Total comprehensive income / (loss) for the year
-
-
(705,964)
(705,964)
Transactions with owners, in their capacity as owners
Shares issued during the year
2,157,895
Vesting of performance shares and rights
Share-based payment – options, performance
shares and rights
Capital-raising proceeds received in advance
(net of costs)
Retained earnings adjustment - adoption of AASB 16
Capital raising costs
At 30 June 2020
-
-
-
-
-
-
-
-
-
(49,875)
-
Comprehensive income
Loss for the year
Total comprehensive income / (loss) for the year
-
-
(3,984,788)
(3,984,788)
Transactions with owners, in their capacity as owners
Shares issued during the year
Vesting of performance shares and rights
Increase in asset reserve
Share-based payment – options, performance
shares and rights
Capital-raising reserve transferred to share capital
(net of costs)
Retained earnings adjustment – reversal of options
valuation expired 3 August 2020
Capital raising costs
At 30 June 2021
1,478,210
20,000
-
-
1,301,785
-
-
-
-
-
-
-
5,084
-
-
-
-
-
(705,964)
(705,964)
2,157,895
-
770,573
770,573
1,301,785
-
-
1,301,785
(49,875)
-
-
-
-
(20,000)
3,904
1,269,776
(1,301,785)
(5,084)
-
(3,984,788)
(3,984,788)
1,478,210
-
3,904
1,269,776
-
-
-
50,442,160
(50,043,969)
5,177,748
5,575,939
The accompanying notes form part of these financial statements
Vonex Limited / Financial Report for the year ended 30 June 2021 24
Consolidated Statement of Cash Flows
Note
26
32
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers and employees
Research and development tax offset
Government grants
Interest received
Interest paid
Net cash used in operating activities
Cash Flows From Investing Activities
Receipt of capital grant
Payments for physical non-current assets
Payments of stamp duty for business acquisition
Payment to acquire business
Proceeds from disposal of property, plant and equipment
Proceeds from/(Repayment of) loans
Proceeds from disposal of mining royalty
Net movement in bonds
Net cash provided by/(used) in investing activities
Cash Flows From Financing Activities
Proceeds from application funds held in trust, net of costs
Net repayment of borrowings
Leasing payments
Net cash provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning
of the financial year
Exchange rate adjustments
Cash and cash equivalents at end of the financial year
9
The accompanying notes form part of these financial statements
2021
$
17,223,379
(18,221,230)
541,661
163,570
1,090
(50,864)
(342,394)
70,000
(161,021)
(136,869)
(334,367)
1,137
329
-
(75,680)
(636,471)
-
-
(173,644)
(173,644)
(1,152,509)
4,811,798
(873)
3,658,416
2020
$
12,129,637
(13,589,900)
629,569
101,500
6,458
(6,506)
(729,242)
-
(73,164)
-
(444,180)
218
818
1,750,000
-
1,233,692
1,320,500
(362)
(185,334)
1,134,804
1,639,254
3,173,355
(811)
4,811,798
Vonex Limited / Financial Report for the year ended 30 June 2021 25
Consolidated Notes
to the Financial Statements
The consolidated financial statements and notes represent those
of Vonex Limited and the entities it controlled during the year
(“the consolidated entity”). Vonex Limited is a public company,
incorporated and domiciled in Australia. The address of the
Company’s registered office and principal place of business is Level
8, 99 St Georges Terrace, Perth, WA, 6000.
The separate financial statements of the
parent entity, Vonex Limited, have not been
presented within this financial report as
permitted by the Corporations Act 2001.
The financial statements were authorised for
issue by the Board on 31 August 2021.
Note 1
Statement of Significant
Accounting Policies
The principal accounting policies adopted in the
preparation of the financial statements are set out
below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
New, revised or amending
Accounting Standards and
Interpretations adopted
The consolidated entity has adopted all of the new,
revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the
current reporting period.
Any new or amended Accounting Standards or
Interpretations that are not yet mandatory have not
been early adopted.
The following Accounting Standards and Interpretations
are most relevant to the consolidated entity:
Conceptual Framework for Financial
Reporting (Conceptual Framework)
The consolidated entity has adopted the revised
Conceptual Framework from 1 July 2020. The
Conceptual Framework contains new definition
and recognition criteria as well as new guidance
on measurement that affects several Accounting
Standards, but it has not had a material impact on the
consolidated entity's financial statements.
(a) Principles of Consolidation
The consolidated financial statements incorporate
the assets, liabilities and result of entities controlled
by Vonex Limited at the end of the reporting period. A
controlled entity is an entity over which Vonex Limited
has the ability or right to govern the financial and
operating policies so as to obtain benefits from the
entity’s activities. In preparing the consolidated financial
statements, all inter-group balances and transactions
between entities in the consolidated entity have been
eliminated in full on consolidation. Where controlled
entities have entered or left the consolidated entity
during the year, the financial performance of those
entities is included only for the period of the year that
they were controlled.
(b) Business Combinations
Business combinations occur where an acquirer obtains
control over one or more businesses and results in the
consolidation of its assets and liabilities. A business
combination is accounted for by applying the acquisition
method, unless it is a combination involving entities
or businesses under common control. The acquisition
method requires that for each business combination
one of the combining entities must be identified as the
acquirer (i.e. parent entity). The business combination
will be accounted for as at the acquisition date, which
is the date that control over the acquiree is obtained
by the parent entity. At this date, the parent shall
recognise, in the consolidated financial statements, and
subject to certain limited exceptions, the fair value of
the identifiable assets acquired and liabilities assumed.
In addition, contingent liabilities of the acquiree will be
recognised where a present obligation has been incurred
and its fair value can be reliably measured.
The acquisition may result in the recognition of goodwill
or a gain from a bargain purchase. The method
adopted for the measurement of goodwill will impact
on the measurement of any non-controlling interest
to be recognised in the acquiree where less than 100%
ownership interest is held in the acquiree.
The acquisition date fair value of the consideration
transferred for a business combination plus the
acquisition date fair value of any previously held
Vonex Limited / Financial Report for the year ended 30 June 2021
26
Consolidated Notes to the Financial Statements
equity interest shall form the cost of the investment
in the separate financial statements. Consideration
may comprise the sum of the assets transferred by the
acquirer, liabilities incurred by the acquirer to the former
owners of the acquiree and the equity interests issued by
the acquirer. Fair value uplifts in the value of pre-existing
equity holdings are taken to the statement of profit and
loss and other comprehensive income. Where changes
in the value of such equity holdings had previously
been recognised in other comprehensive income, such
amounts are recycled to profit or loss.
Included in the measurement of consideration transferred
is any asset or liability resulting from a contingent
consideration arrangement. Any obligation incurred
relating to contingent consideration is classified as
either a financial liability or equity instrument, depending
upon the nature of the arrangement. Rights to refunds
of consideration previously paid are recognised as a
receivable. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset
or a liability is remeasured each reporting period to fair
value through the statement of profit and loss and other
comprehensive income unless the change in value can
be identified as existing at acquisition date.
All transaction costs incurred in relation to the business
combination are expensed to the statement of profit or
loss and other comprehensive income.
(c) Income Tax
The income tax expense (revenue) for the year
comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss
is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially
enacted, as at the end of the reporting period. Current
tax liabilities (assets) are therefore measured at the
amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred income tax expense (revenue) is
charged or credited outside profit or loss when the tax
related to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are ascertained based
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax
deductions are available. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at
the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled,
based on tax rates enacted or substantively enacted
at the end of the reporting period. Their measurement
also reflects the manner in which management expects
to recover or settle the carrying amount of the related
asset or liability.
Deferred tax assets relating to temporary differences
and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be
available against which the benefits of the deferred tax
asset can be utilised.
Where temporary differences exist in relation to
investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities
are not recognised where the timing of the reversal of
the temporary difference can be controlled and it is
not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a
legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability
will occur. Deferred tax assets and liabilities are offset
where a legally enforceable right of set-off exists, the
deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities
where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
(d) Plant and Equipment
Each class of plant and equipment is carried at cost
or fair value, less, where applicable, any accumulated
depreciation and impairment losses. The carrying
amount of plant and equipment is reviewed annually by
directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is
assessed on the basis of the expected net cash flows
that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have
been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed included the cost
of materials, direct labour, borrowing costs and an
appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as
appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the company and the cost of the item can be measured
reliably. All other repairs and maintenance are charged
to profit or loss.
Vonex Limited / Financial Report for the year ended 30 June 2021
27
Consolidated Notes to the Financial Statements
Depreciation
The depreciable amount of plant and equipment is depreciated on the straight line method over their useful lives
commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter
of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Furniture and Fixtures
Plant and Equipment
Leasehold Improvements
Motor Vehicles
Computer Equipment
Depreciation Rate
15% - 25%
15% - 33.3%
12%
20%
50%
The asset’s residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting
period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the statement of profit or loss and other comprehensive income.
(i) Plant and Equipment
The asset’s residual values and useful lives are reviewed
and adjusted, if appropriate, at the end of each
reporting period. An asset’s carrying amount is written
down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
gains and losses are included in the statement of profit
or loss and other comprehensive income.
(ii) Impairment of Assets
At each reporting date, the consolidated entity reviews
the carrying values of its tangible and intangible assets
to determine whether there is any indication that those
assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher
of the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount
is expensed to the statement of profit or loss and other
comprehensive income.
If the recoverable amount of an asset is estimated to
be less than its carrying amount, the carrying amount
of the asset is reduced to its recoverable amount. An
impairment loss is recognised in the statement of profit
and loss and other comprehensive income immediately,
unless the relevant asset is carried at fair value, in which
case the impairment loss is treated as a revaluation
decrease. Where an impairment loss subsequently
reverses, the carrying amount of the asset is increased
to the revised estimate of its recoverable amount, but
only to the extent that the increased carrying amount
does not exceed the carrying amount that would
have been determined had no impairment loss been
recognised for the asset in prior years. A reversal of an
impairment loss is recognised in the statement of profit
and loss and other comprehensive income immediately,
unless the relevant asset is carried at fair value, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
Impairment testing is performed annually for intangible
assets with indefinite useful lives.
Vonex Limited / Financial Report for the year ended 30 June 2021
28
Consolidated Notes to the Financial Statements
(e) Employee Entitlements
Provision is made for the consolidated entity’s obligation
for short-term employee benefits. Short-term employee
benefits are benefits that are expected to be settled
wholly before 12 months after the end of the annual
reporting period in which the employees render the
related service, including wages, salaries and sick leave.
Short-term employee benefits are measured at the
(undiscounted) amounts expected to be paid when the
obligation is settled.
The consolidated entity’s obligations for short-term
employee benefits such as wages and salaries are
recognised as a part of current trade and other
payables in the statement of financial position. The
consolidated entity’s obligations for employees’ annual
leave entitlements are recognised as provisions in the
statement of financial position.
Short-term employee benefits
Financial assets are derecognised when the rights to
receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially
all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a
financial asset, it’s carrying value is written off.
1. Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or
at fair value through other comprehensive income are
classified as financial assets at fair value through profit
or loss. Typically, such financial assets will be either: (i)
held for trading, where they are acquired for the purpose
of selling in the short-term with an intention of making
a profit, or a derivative; or (ii) designated as such upon
initial recognition where permitted. Fair value movements
are recognised in profit or loss.
2. Financial assets at fair value through other
comprehensive income
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the
reporting date are measured at the amounts expected
to be paid when the liabilities are settled.
Financial assets at fair value through other
comprehensive income include equity investments
which the consolidated entity intends to hold for the
foreseeable future and has irrevocably elected to classify
them as such upon initial recognition.
Other long-term employee benefits
3. Impairment of financial assets
The liability for annual leave and long service leave not
expected to be settled within 12 months of the reporting
date are measured as the present value of expected
future payments to be made in respect of services
provided by employees up to the reporting date using
the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of
employee departures and periods of service. Expected
future payments are discounted using market yields at
the reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible,
the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution
superannuation plans are expensed in the period
in which they are incurred.
(f) Provisions
Provisions are recognised when the consolidated entity
has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of
economic benefits will result and that outflow can be
reliably measured.
(g) Investments and other financial assets
Investments and other financial assets are initially
measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial
assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair
value depending on their classification. Classification
is determined based on both the business model within
which such assets are held and the contractual cash
flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
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 mandatorily measured at fair
value through other comprehensive income, the loss
allowance is recognised in other comprehensive income
with a corresponding expense through profit or loss. In
all other cases, the loss allowance reduces the asset’s
carrying value with a corresponding expense through
profit or loss.
Vonex Limited / Financial Report for the year ended 30 June 2021
29
Consolidated Notes to the Financial Statements
(h) Cash and Cash Equivalents
Sale of goods
Cash and equivalents include cash on hand, deposits
held at call with banks and other short term highly
liquid investments. For the purpose of the statement
of cash flows, cash includes deposits at call, which are
readily convertible to cash on hand and subject to an
insignificant risk of changes in value.
(i) Revenue and Other Income
Revenue from contracts with customers
Revenue is recognised at an amount that reflects
the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring
goods or services to a customer. For each contract with a
customer, the consolidated entity: identifies the contract
with a customer; identifies the performance obligations
in the contract; determines the transaction price which
takes into account estimates of variable consideration
and the time value of money; allocates the transaction
price to the separate performance obligations on the
basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the
customer of the goods or services promised. Variable
consideration within the transaction price, if any,
reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses
receivable from the customer and any other contingent
events. Such estimates are determined using either the
‘expected value’ or ‘most likely amount’ method.
The measurement of variable consideration is subject
to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint
continues until the uncertainty associated with the
variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle
are initially recognised as deferred revenue in the form of
a separate refund liability.
Revenue from the sale of goods represents sales of
customer equipment to consumer and corporate
customers. Revenue from the sale of goods is recognised
at the point in time when the customer obtains control of
the goods or service.
Revenue arrangements with multiple deliverables
Where two or more revenue-generating activities or
deliverables are sold under a single arrangement,
each deliverable is considered to be a separate unit of
accounting and is accounted for separately.
Interest
Revenue is recognised as the interest accrues using the
effective interest rate method, which for floating rate
financial assets is the rate inherent in the instrument.
Other revenue
Other revenue is recognised when it is received or when
the right to receive payment is established.
(j) Contract assets
Contract assets are recognised when the consolidated
entity has satisfied the performance obligations in the
contract and either has not recognised a receivable
to reflect its unconditional right to consideration or the
consideration is not due. Contract assets are treated as
financial assets for impairment purposes.
(k) Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of assets that necessarily take
a substantial period of time to prepare for their intended
use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their
intended use of sale.
All other borrowing costs are recognised as an expense
in the period in which they are incurred. Borrowing costs
predominately consist of interest and other costs that the
company incurs in connection with the borrowing of funds.
Rendering of telecommunications services
(l) Goods and Services Tax (“GST”)
Revenue from the rendering of retail telecommunications
services includes the provision of data, internet, voice
and other services. Revenue from the rendering of data
and internet services to consumers and corporate
customers is recognised on a straight-line basis over
the period the service is provided. Revenue for voice
services is recognised at completion of the call. Revenue
from wholesale hosted PBX service customers is charged
based on the number of PBX registrations recorded on a
daily basis and invoiced monthly in arrears.
Where revenue for services is invoiced to customers and/
or received in advance, the amount that is unearned
at a reporting date is recognised in the statement of
financial position as deferred income, and its recognition
in the profit or loss is deferred until the period to which
the invoiced amount relates.
The company is registered for GST. Revenues, expenses
and assets and liabilities are recognised net of the
amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation
Office (“ATO”). In these circumstances the GST is
recognised as part of the cost of acquisition of the
asset or as part of the item of the expense. The net
amount of GST recoverable from, or payable to, the
ATO is included with other receivables or payables in
the statement of financial position. Receivables and
payables in the statement of financial position are
shown inclusive of GST.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities, which are recoverable from or payable
to the ATO, are presented as operating cash flows.
Vonex Limited / Financial Report for the year ended 30 June 2021
30
Consolidated Notes to the Financial Statements
(m) Trade and other payables
Impairment
These amounts represent liabilities for goods, services and other
commitments provided to the consolidated entity at the end of
the reporting period that remain unpaid.
Trade payables are recognised at their transaction price.
Trade payables are obligations on the basis of normal credit
terms. Trade payables are predominately unsecured.
(n) Trade and other receivables
All trade receivables are recognised initially at the transaction
price (i.e. cost) less any provision for impairment and allowance
for any uncollectable amounts. Receivable terms for the
consolidated entity are due for settlement within 4-30 days
from the date of the invoice. Collect ability of trade debtors is
reviewed on an ongoing basis.
Receivables expected to be collected within 12 months of the
end of the reporting period are classified as current assets. All
other receivables are classified as non-current assets.
At the end of each reporting period, the carrying amount of
trade and other receivables are reviewed to determine whether
there is any objective evidence that the amounts are not
recoverable. If so, an impairment loss is recognised immediately
in the statement of profit or loss and other comprehensive
income. When identified, debts which are known to be
uncollectible are written off.
(o) Comparative Figures
When required by Accounting Standards, comparative figures
have been adjusted to conform to changes in presentation for
the current financial year.
(p) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated
into the financial statements based on historical knowledge
and best available current information. Estimates assume a
reasonable expectation of future events and are based on
current trends and economic data, obtained both externally
and within the consolidated entity.
There have been no judgements, apart from those involving
estimation, in applying accounting policies that have a
significant effect on the amounts recognised in these financial
statements. Following is a summary of the key assumptions
concerning the future and other key sources of estimation at
reporting date that have not been disclosed elsewhere in these
financial statements.
Share based payment transactions
The consolidated entity measures the cost of equity-settled
transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair
value is determined by management using an appropriate
valuation model that use estimates and assumptions.
Management exercises judgement in preparing the valuations
and these may affect the value of any share-based payments
recorded in the financial statements (refer to notes 30 for further
details).
The consolidated entity assesses impairment at the end of each
reporting period by evaluation conditions and events specific
to the consolidated entity that may be indicative of impairment
triggers. Validity for future operations are all elements that
are considered. Recoverable amounts of relevant assets are
reassessed using value-in-use calculations which incorporate
various key assumptions.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently
if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have
suffered any impairment, in accordance with the accounting
policy stated in note 1. The recoverable amounts of cash-
generating units have been determined based on value-in-use
calculations. These calculations require the use of assumptions,
including estimated discount rates based on the current cost of
capital and growth rates of the estimated future cash flows.
(q) Right-Of-Use Assets
A right-of-use asset is recognised at the commencement date
of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted
for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred
for dismantling and removing the underlying asset, and restoring
the site or asset.
Right-of-use assets are depreciated on a straight-line basis
over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the
consolidated entity expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is
over its estimated useful life. Right-of use assets are subject
to impairment or adjusted for any remeasurement of lease
liabilities.
The consolidated entity has elected not to recognise a right-of-
use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets.
Lease payments on these assets are expensed to profit or loss
as incurred.
(r) Segment Reporting
Identification of reportable operating segments
The consolidated entity is organised into three operating
segments based on differences in products and
services provided: retail telecommunications, wholesale
telecommuncations and corporate. These operating segments
are based on the internal reports that are reviewed and used
by the Board of Directors (who are identified as the Chief
Operating Decision Makers (‘CODM’)) in assessing performance
and in determining the allocation of resources. There is no
aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax,
depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent
with those adopted in the financial statements. The
information reported to the CODM is on a monthly basis.
Vonex Limited / Financial Report for the year ended 30 June 2021
31
Consolidated Notes to the Financial Statements
Types of products and services
The principal products and services of each of these
operating segments are as follows:
Retail Telecommunications: engaged in the sale of
hardware and the full suite of telecommunication
services including the provision of data, internet, voice
(including IP voice) and billing services within Australia.
Wholesale Telecommunications: provides wholesale
customers access to the core Vonex PBX, call termination
services, NBN and 4G mobile broadband at wholesale
rates via a “white label” model.
Corporate: engaged in managing the corporate affairs
of the Group, including capital-raising its headquarters
central functions as well as its risk management
and self-insurance activities along with special
development projects.
(s) Intangibles
Goodwill
Goodwill arises on the acquisition of a business.
Goodwill is not amortised. Instead, goodwill is tested
annually for impairment, or more frequently if events
or changes in circumstances indicate that it might
be impaired, and is carried at cost less accumulated
impairment losses. Impairment losses on goodwill
are taken to profit or loss and are not subsequently
reversed.
Customer List
Customer List is amortised on a straight line basis over
the life of the contracts. The residual values and useful
lives are reviewed annually at each balance date and
adjusted, if appropriate.
Trademarks
Trademark is amortised on a straight line basis over the
period of 10 years from April 2013. The residual values
and useful lives are reviewed annually at each balance
date and adjusted, if appropriate.
Patents
Patent is amortised on a straight line basis over the
period of 10 years from April 2013. The residual values
and useful lives are reviewed annually at each balance
date and adjusted, if appropriate.
Customer & Supply contracts (2SG)
The customer and supply contract is being amortised
on a straight-line basis over two periods dependent
on contract terms (5 years and 10 years). The residual
values and useful lives are reviewed annually at each
balance date and adjusted, if appropriate.
(t) Current and non-current classification
Assets and liabilities are presented in the statement of
financial position based on current and non-current
classification.
An asset is classified as current when: it is either
expected to be realised or intended to be sold or
consumed in the consolidated entity’s normal operating
cycle; it is held primarily for the purpose of trading; it
is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
A liability is classified as current when: it is either
expected to be settled in the consolidated entity’s
normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no
unconditional right to defer the settlement of the
liability for at least 12 months after the reporting period.
All other liabilities are classified as non-current.
(u) Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(v) Earnings Per Share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the
profit attributable to equity holders of the company,
excluding any costs of servicing equity other than
ordinary shares, by weighted average number of
ordinary shares outstanding during the financial year,
adjusted for the bonus elements in ordinary shares
issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account the after income tax effect of interest
and other financing costs associated with dilutive
potential ordinary shares and the weighted average
number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary
shares.
(w) New, revised or amending Accounting Standards
and Interpretations adopted
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet mandatory, have not been early adopted by
the consolidated entity for the annual reporting period
ended 30 June 2021. The consolidated entity has not
yet assessed the impact of these new or amended
Accounting Standards and Interpretations.
Vonex Limited / Financial Report for the year ended 30 June 2021
32
Consolidated Notes to the Financial Statements
Note 2
Revenue
Revenue from Customers
Sales revenue
Disaggregation of Revenue
The disaggregation of revenue from customers is as follows:
2021
$
2020
$
18,259,243
12,770,304
Retail
Wholesale
Corporate
Total
Consolidated - 30 June 2021
$
$
Major service lines
Telephony
Internet
Hardware
Cabling/Infrastructure/Security
Hosted PBX
Geographic regions
Australia
6,049,139
2,309,863
2,567,436
4,895,422
707,482
106,103
73,050
-
-
1,550,748
9,430,160
8,829,083
9,430,160
8,788,318
United States of America
-
40,765
9,430,160
8,829,083
Consolidated - 30 June 2020
Major service lines
Telephony
Internet
Hardware
Hosted PBX
Geographic regions
Australia
6,141,624
301,662
1,780,553
2,146,175
845,336
63,135
-
1,491,819
8,767,513
4,002,791
8,767,513
3,956,401
United States of America
-
46,390
8,767,513
4,002,791
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
8,359,002
7,462,858
780,532
106,103
1,550,748
18,259,243
18,218,478
40,765
18,259,243
6,443,286
3,926,728
908,471
1,491,819
12,770,304
12,723,914
46,390
12,770,304
Vonex Limited / Financial Report for the year ended 30 June 2021 33
Consolidated Notes to the Financial Statements
Note 3
Other Income
Other Income
Interest received
Research & development tax offset
Disposal of operating lease
Government Incentive Rebate
Debt forgiveness
Gain on disposal of plant and equipment
Other income
Total other income
2021
$
1,091
541,661
42,788
150,000
21,864
78,683
120,191
2020
$
6,816
629,569
-
167,500
20,080
-
61,765
956,278
885,730
Vonex Limited / Financial Report for the year ended 30 June 2021 34
Consolidated Notes to the Financial Statements
Note 4
Loss for the Year
Loss before income tax includes the following specific expenses:
Expenses
Cost of sales
Cost of sales
Depreciation
Leasehold improvements
Plant and equipment
Office and computer equipment
Motor vehicles
Licences
Land and buildings right-of-use assets
Plant and equipment right-of-use assets
Total depreciation
Amortisaiton
Patents and trademarks
Customer list
Customer and supplier contracts (2SG)
Total amortisation
Finance costs
2021
$
Restated
2020
$
(12,737,896)
(8,096,081)
(8,848)
(7,747)
(45,989)
(6,289)
-
(232,010)
(20,442)
(9,185)
(12,537)
(64,097)
-
(1,718)
(226,670)
(15,868)
(321,325)
(330,075)
(9,949)
(72,082)
(454,773)
(14,508)
(72,082)
(151,591)
(536,804)
(238,181)
Interest and finance charges payable/paid on lease liabilities
Interest charges on insurance premium funding and credit cards
Total finance costs
(49,808)
(9,149)
(58,957)
(52,393)
(4,791)
(57,184)
Vonex Limited / Financial Report for the year ended 30 June 2021 35
Consolidated Notes to the Financial Statements
Note 5
Income Tax Expense
(a) Income Tax Expense
Current tax expense
Deferred tax expense
Income tax expense
(b) Reconciliation
2021
$
-
(125,595)
(125,595)
Restated
2020
$
-
(41,865)
(41,865)
The prima facie tax on the loss is reconciled to income tax expense as follows:
Loss for the year
(4,110,383)
(747,829)
Prima facie tax expense at 25% (2020:26%)
(1,027,596)
(194,436)
Non-deductible expenses
Non-assessable income
Deferred tax asset not brought to account
Income tax benefit
(c) Deferred Tax Asset
531,720
(37,500)
407,781
(125,595)
Deferred tax asset not brought to account comprises the future benefits at applicable tax rates:
2021
$
203,701
(210,311)
159,181
(41,865)
2020
$
Tax losses – revenue (resident)
5,364,624
5,435,793
Accruals and provisions
Business related costs
Other
210,967
-
(86,805)
160,152
100,702
(12,223)
5,488,785
5,684,424
Vonex Limited / Financial Report for the year ended 30 June 2021 36
Consolidated Notes to the Financial Statements
(d) Deferred Tax Liabilities
Deferred tax liability of $632,509 (2020: $758,104).
Resident tax losses calculated at the Australian income tax rate of
25% (2020:26%).
This asset has not been recognised as an asset in the statement of
financial position as its realisation is not considered probable. The
asset will only be obtained if:
(a) the company derives future assessable income of a nature and
of an amount sufficient to enable the asset from the deductions
for the loss to be realised;
(b) the company continues to comply with the conditions for
deductibility imposed by the law; and
(c) no changes in tax legislation adversely affect the consolidated
entity in realising the asset from deductions for the losses.
Refer to note 32 for detailed information on Restatement of comparatives.
Note 6
Key Management Personnel
Disclosures
The aggregate compensation made to directors and other
members of key management personnel of the consolidated entity
is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
2021
$
531,722
49,970
1,241,581
1,823,273
2020
$
476,428
44,745
400,030
921,203
Vonex Limited / Financial Report for the year ended 30 June 2021 37
Consolidated Notes to the Financial Statements
Note 7
Auditor’s Remuneration
Remuneration of the auditor
Auditing or reviewing the financial report
Other services
Note 8
Earnings per Share
2021
$
95,000
-
95,000
2021
$
2020
$
79,000
31,025
110,025
Restated
2020
$
Loss for the year
(3,984,788)
(705,964)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic loss per share
No. of Shares
No. of Shares
189,358,459
156,437,810
There is no dilution of shares due to options as the potential ordinary shares are not dilutive and are therefore not
included in the calculation of diluted loss per share.
Note 9
Cash and Cash Equivalents
Cash on hand
Cash at bank
2021
$
1,352
2020
$
1,352
3,657,064
4,810,446
3,658,416
4,811,798
Vonex Limited / Financial Report for the year ended 30 June 2021 38
Consolidated Notes to the Financial Statements
Note 10
Trade and Other Receivables
Current
Trade debtors
Less: Allowance for expected credit losses
Other debtors
2021
$
1,112,865
(66,106)
1,046,759
637,596
1,684,355
2020
$
696,784
(43,635)
653,149
827,375
1,480,524
Allowance for expected credit losses
The consolidated entity has recognised a loss of $25,775 in profit or loss in respect of the expected credit losses for
the year ended 30 June 2021.
The ageing of the receivables and allowance for expected credit losses provided for the above are as follows:
Consolidated
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Expected credit loss
rate 2021
Carrying amount 2021
Allowance for
expected credit losses
2021
%
0%
11%
100%
$
929,039
132,959
50,867
1,112,865
$
-
15,239
50,867
66,106
Movements in the allowance for expected credit losses (2021: provision for impairment of receivables) are as follows:
Reconciliation:
Opening balance
Additions
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2021
$
43,635
25,775
(3,304)
66,106
2020
$
39,400
11,623
(7,388)
43,635
Vonex Limited / Financial Report for the year ended 30 June 2021 39
Consolidated Notes to the Financial Statements
Note 11
Current Assets - Contract Assets
Current
Contract assets
Non Current
Contract assets
Reconciliation
Reconciliation of the written down values at the beginning and end
of the current and previous financial year are set out below:
Balance at the beginning of the year
Additional provision
Transfer to sales adjustments
Balance at the end of the year
Note 12
Other Assets
Current
Bonds/deposits paid
Works in progress
Inventory
Prepayments
Non Current
Bonds/deposits paid (i)
2021
$
60,676
2020
$
55,155
7,918
32,860
88,015
115,536
(134,957)
68,594
2021
$
38,500
43,942
94,926
286,490
463,858
109,244
109,244
56,162
96,033
(64,180)
88,015
2020
$
14,314
-
56,869
370,425
441,608
90,800
90,800
(I) Covers bank guarantee facilities that are in place securing leased premises for staff and operations based in
Brisbane, QLD, Sydney, NSW and bond paid on office premises in Perth, WA. Funds held in a bank term deposit are
securing the bank guarantee facility. The bank guarantee facilities will be in place for the term of the property lease.
Vonex Limited / Financial Report for the year ended 30 June 2021 40
Consolidated Notes to the Financial Statements
Note 13
Intangible Assets
Goodwill
Less: Accumulated amortisation
Intangible assets – provisionnaly acquired (Nextel)
Less: Accumulated amortisation
Customer list
Less: Accumulated amortisation
Acquisition of IP (Oper8tor)
Less: Accumulated amortisation
Customer & Supply contracts (2SG)
Less: Accumulated amortisation
Patents and trademarks - at cost
Less: Accumulated amortisation
Domain name acquisition
2021
$
524,140
-
524,140
1,542,326
-
1,542,326
720,081
(588,397)
131,684
600,000
(600,000)
-
2,908,977
(606,364)
2,302,613
222,130
(217,564)
4,566
2,071
2,071
Restated
2020
$
524,140
-
524,140
-
-
-
720,081
(516,315)
203,766
600,000
-
600,000
2,908,977
(151,591)
2,757,386
182,350
(36,296)
146,054
2,071
2,071
4,507,400
4,233,417
Vonex Limited / Financial Report for the year ended 30 June 2021 41
Consolidated Notes to the Financial Statements
Reconciliations
Reconciliations of the written down values at the beginning and end
of the current and previous financial year are set out below:
Customer List
Goodwill (a)
Intangible Assets
– Provisionally
Acquired (Nextel)
(b)
Oper8tor
Patents and
trademarks
Domain name
Contract assets
from 2SG (a)
Total
Consolidated
Balance at 30 June 2019
275,848
-
Additions/(Disposal)
-
524,140
Amortisation expense
(72,082)
-
Balance at 30 June 2020
203,766
524,140
-
-
-
-
600,000
103,221
2,071
-
981,140
-
-
57,341
(14,508)
-
-
2,908,977
3,490,458
(151,591)
(238,181)
600,000
146,054
2,071
2,757,386
4,233,417
Additions/(Disposal)
-
Amortisation expense
(72,082)
Impairment expense (i)
-
-
-
-
1,542,326
-
-
-
-
39,780
(9,949)
(600,000)
(171,319)
-
-
-
-
1,582,106
(454,773)
(536,804)
-
(771,319)
Balance at 30 June 2021
131,684
524,140
1,542,326
-
4,566
2,071
2,302,613
4,507,400
(i)
During the financial year the Company advised that it was working with Ragnar Capital Partners LLP (Ragnar)
regarding various funding options for the continuation of the Oper8tor development along with advising on 29
January 2021 that it does not anticipate committing further development capital to the project. The ability to
identify and engage with the right technical and financial partners to guide Oper8tor’s further development
has been unsuccessful to date. As a result, the Company has taken the decision to write down carrying values
pertaining to the Oper8tor development including any values attributed to the national and international patents.
(a) Business combination – 2SG Wholesale Pty Ltd
On 28 February 2020, Vonex Ltd acquired the business
of 2SG Wholesale Pty Ltd (‘2SG’). 2SG Wholesale is
a telecommunications and data wholesaler based
in Brisbane, Queensland which provides Australian
Managed Service Providers, ISPs and System Integrators
with access to the latest in hardware and connectivity
solutions from leading brands. 2SG ’s mobile broadband
capability provides Australian ISPs the opportunity to sell
a wireless broadband solution via the Optus 4G Network.
Integration with Australia’s premier carriers facilitates
the delivery of the latest fixed line, mobile connectivity
and hardware solutions country-wide. The intangible
assets of $2,908,977 represents the expansion of Vonex’s
diversified wholesale service offerings commencement
as it expands its brand and exposure within the Australia
telecommunications market along with extensive cross-
sell opportunities within 2SG’s customer base acquired
as part of the total consideration. The purchase price
was recalculated during the year and the comparative
balances restated, please refer to note 32. The
recalculation of the acquisition gave rise to a deferred
tax liability of $799,969 in respect of this acquisition and
$524,140 of goodwill. The customer and supply contract
of $2,908,977 is being amortised on a straight-line basis
over two periods dependent on the contract term (5
years and 10 years).
(b) Business combination – Nextel Pty Ltd
On 3 February 2021, Vonex Ltd acquired the business
of Nextel Pty Ltd (‘Nextel’). Nextel is a Sydney, NSW
based business providing telecommunications services
to business customers and is recognised as an industry
leader in the design, installation and maintenance
of voice, data and communications networks. It is an
established single-source provider to small-to-medium
enterprise (SME) businesses with expertise in rolling out
wireless, fibre and RFID networks, as well as delivering
structured cabling, telephony systems and electrical
fit outs to large-scale projects. The intangible assets
of $1,542,326 represents a substantial enhancement of
Vonex’s presence in the Sydney and NSW markets for
telco services to small-to-medium enterprises (SMEs),
adding market-leading products and services will create
opportunities for cross-selling and product expansion
through a growing national SME customer.
Vonex Limited / Financial Report for the year ended 30 June 2021
Revenue
The value-in-use model is based on the budget
approved by the Board. The forecast budget process
was developed based on revenue expectations for the
year built around existing customer contracts along with
ongoing cross-selling opportunities withing the existing
wholesale customer base to sustain growth.
Sensitivities
As disclosed in note 1p, the Board has made judgements
and estimates in respect of impairment testing of
goodwill. Should these judgements and estimates
not occur the resulting goodwill carrying amount may
decrease. The sensitivities are as follows:
• Revenue growth rate would need to decrease to 2.3%
or lower before goodwill would need to be impaired,
with all other assumptions remaining constant; or
• The pre-tax discount rate would be required to increase
to 14.2% or more before goodwill would need to be
impaired, with all other assumptions remaining constant.
42
Consolidated Notes to the Financial Statements
Key Assumptions Used for Value-in-Use
Calculations
The recoverable amount of the CGU within the business
segment is determined on the basis of value-in-use (VIU).
In the Wholesale CGU, our experience and continued
expansion in the wholesale telecommunications sector
and opportunities in sustaining wholesale underpins the
forecast growth.
The following describes the assumptions on which
management has based its cash flow projections when
determining value in use:
Revenue growth rate
The growth rate represents a steady indexation rate
which does not exceed management’s expectations of
the long term average growth rate for the business in
which each CGU operates. The rate applied in the cash
flow projection is 4%.
Discount rate
For the Wholesale CGU, the pre-tax discount rate
applied to cash flow projections is 11.3%.
Cash flows
Value-in-use calculations use cash flow projections from
approved budgets based on past performance and
expectations for the future covering a four year period.
Note 14
Subsidiaries
(a) Parent Entity
The parent entity within the Group is Vonex Ltd.
(b) Subsidiaries
Subsidiaries
IP Voice and Data Pty Ltd (ABN 45 147 537 871)
Oper8tor Pty Ltd (ABN 14 601 220 633)
Vonex Wholesale Pty Ltd (ABN 98 138 093 482)
Subsidiaries of IP Voice and Data Pty Ltd
Ownership Interest
Country of
incorporation
Class of shares
2021
AUS
AUS
AUS
Ordinary
Ordinary
Ordinary
100%
100%
100%
2020
100%
100%
100%
Itrinity Australia Pty Ltd (ACN 131 196 886)
AUS
Ordinary
100%
100%
Vonex Limited / Financial Report for the year ended 30 June 2021 43
Consolidated Notes to the Financial Statements
Note 15
Parent Entity Disclosures
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
2021
$
3,392,528
4,536,435
7,928,963
775,796
2,301,389
3,077,185
4,851,778
Restated
2020
$
5,013,545
4,342,741
9,356,286
715,014
2,628,314
3,343,328
6,012,958
116,101,056
113,301,061
5,161,685
5,216,335
(116,410,963)
(112,504,438)
4,851,778
6,012,958
(3,912,144)
-
(3,912,144)
3,902
-
3,902
Guarantees
Commitments for expenditure
Vonex Ltd has entered into a parental guarantee for one of its
subsidiaries in connection with Wholesale Broadband services
being acquired from NBN Co. (2020: nil).
Vonex Ltd has no commitments to acquire property, plant and
equipment, and has no contingent liabilities (2020: nil).
Vonex Limited / Financial Report for the year ended 30 June 2021 44
Consolidated Notes to the Financial Statements
Note 16
Plant and Equipment
Leasehold improvements
At cost
Accumulated depreciation
Plant and Equipment
At cost
Accumulated depreciation
Office & Computer equipment
At cost
Accumulated depreciation
Licenses & Development (inc. software)
At cost
Accumulated depreciation
Motor Vehicles
At cost
Accumulated depreciation
2021
$
89,257
(16,271)
72,986
115,021
(75,986)
39,035
520,612
(367,214)
153,398
249,587
(249,587)
-
76,500
(6,289)
70,211
2020
$
39,128
(14,528)
24,600
115,024
(71,915)
43,109
423,050
(289,558)
133,492
249,587
(249,587)
-
-
-
-
Total plant and equipment
335,630
201,201
Vonex Limited / Financial Report for the year ended 30 June 2021 45
Consolidated Notes to the Financial Statements
Movements in Carrying Amounts
Movement in the carrying amounts for each class of plant and equipment between the
beginning and the end of the current financial year:
Leasehold
Improvements
Plant &
Equipment
Office &
Computer
Licenses &
Development
Motor
Vehicles
Balance at 1 July 2019
28,940
56,626
127,195
1,718
Additions
4,845
1,561
70,394
Disposal / Write off
-
(2,541)
-
-
-
Depreciation
(9,185)
(12,537)
(64,097)
(1,718)
Carrying amount at 30
June 2020
24,600
43,109
133,492
Balance at 1 July 2020
24,600
43,109
133,492
Additions
57,333
6,724
66,156
Disposal / Write off
(99)
(3,051)
(261)
Depreciation
(8,848)
(7,747)
(45,989)
Carrying amount at 30
June 2021
72,986
39,035
153,398
-
-
-
-
-
-
Total
214,479
76,800
(2,541)
(87,537)
201,201
201,201
-
-
-
-
-
-
76,500
206,713
-
(3,411)
(6,289)
(68,873)
70,211
335,630
Vonex Limited / Financial Report for the year ended 30 June 2021 46
Consolidated Notes to the Financial Statements
Note 17
Right of Use Assets
Leasehold improvements
Land and buildings – right of use
Accumulated depreciation
Plant and Equipment
Plant and equipment – right of use
Accumulated depreciation
2021
$
1,323,695
(458,680)
865,015
79,333
(36,311)
43,022
2020
$
1,046,405
(226,670)
819,735
79,333
(15,868)
63,465
908,037
883,200
The consolidated entity leases land and buildings for its offices under agreements of between one to four years with,
in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are
renegotiated. The addition to right-of-use assets during the year were $277,290.
The consolidated entity leases office equipment under agreements of less than two years.
Vonex Limited / Financial Report for the year ended 30 June 2021 47
Consolidated Notes to the Financial Statements
Note 18
Provisions
Current
Annual leave
Long service leave
Non Current
Long service leave
Make good
2021
$
353,275
168,567
521,842
68,397
52,634
121,031
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
Movements in Carrying Amounts
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
2021
$
531,407
358,238
(246,772)
2020
$
326,242
130,029
456,271
46,685
28,451
75,136
2020
$
504,654
367,636
(340,883)
Carrying amount at the end of the year
642,873
531,407
The current portion for this provision includes the total amount
accrued for annual leave entitlements and the amounts
accrued for long service leave entitlements that have vested
due to employees having completed the required period of
service. Based on past experience, the consolidated entity does
not expect the full amount of annual leave or long service leave
balances classified as current liabilities to be settled within the
next 12 months. However, these amounts must be classified as
current liabilities since the consolidated entity does not have an
unconditional right to defer the settlement of these amounts in
the event employees wish to use their leave entitlement.
The non-current portion for this provision pertains to amounts
accrued for long service leave entitlements that have not
yet vested in relation to those employees who have not yet
completed the required period of service.
Vonex Limited / Financial Report for the year ended 30 June 2021 48
Consolidated Notes to the Financial Statements
Note 19
Trade and Other Payables
Trade payables
PAYG withholding
GST
Superannuation guarantee
Other payables and accruals
Trade creditors are expected to be paid within agreed terms.
Note 20
Lease Liability
Current
Chattel mortgage leases (i)
Lease liability
Non Current
Chattel mortgage leases (i)
Lease liability
2021
$
3,128,712
87,943
66,726
87,619
517,885
2020
$
1,755,852
154,346
79,534
73,062
1,118,871
3,888,885
3,181,665
2021
$
42,926
303,889
346,815
42,444
606,069
648,513
2020
$
-
267,300
267,300
-
683,250
683,250
Refer to note 32 for detailed information on Restatement of comparatives.
(i)
On 2 June 2021 a new Chattel Mortgage facililty was entered into to payout the existing finance lease obligations
relating to 4 motor vehicles and specialised equipment acquired with the Nextel business acquisition.
Vonex Limited / Financial Report for the year ended 30 June 2021 49
Consolidated Notes to the Financial Statements
Note 21
Issued Capital
Fully paid ordinary shares
50,442,160
193,133,473
47,642,165
170,922,309
2021
2020
$
No.
$
No.
Movements in Ordinary Shares
$
No.
Issue Price
$
Balance at 30 June 2019
45,484,270
149,343,362
Issue of shares to settle acquisition of 2SG
02/03/2020
2,157,895
21,578,947
0.10
Balance at 30 June 2020
47,642,165
170,922,309
Issue of shares on placement
01/07/2020
1,400,000
14,736,843
0.095
Issue of shares on conversion of Vodia
performance rights
Issue of shares to settle service provider and for
employee entitlements
01/07/2020
20,000
100,000
0.20
21/09/2020
220,513
1,750,000
0.126
Issue of shares to settle acquisition of Nextel
03/02/2021
1,238,129
5,502,795
Issue of shares to settle service provider
14/05/2021
19,569
121,526
0.225
0.161
Capital raising costs
(98,216)
Balance at 30 June 2021
50,442,160
193,133,473
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
At the shareholders meetings each ordinary share is entitled to one vote. The company does not have authorised share
capital and there is no par value for shares.
Capital Risk Management
The Company is not subject to any externally imposed
capital requirements.
Management’s objectives when managing capital is
to ensure the company continues as a going concern,
so that they may continue to provide returns for
shareholders and benefits for other stakeholders.
The company’s strategy is to ensure appropriate
liquidity is maintained to meet anticipated operating
requirements, with a view to initiating appropriate capital
raisings as required.
Vonex Limited / Financial Report for the year ended 30 June 2021 50
Consolidated Notes to the Financial Statements
The working capital position of the company at 30 June 2021 and 30 June 2020 are as follows:
Total borrowings (including trade and other payables)
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Note 22
Reserves
Asset revaluation reserve
Options premium reserve
Share based payments reserve
Capital raising reserve
Balance at the end of the year
Asset Revaluation Reserve
Balance at the beginning of the year
Increase in reserve
Reduction in reserve – disposal of assets
Balance at the end of the year
The reserve records revaluations of non-current assets.
2021
$
3,888,885
(3,658,416)
230,469
5,575,939
5,806,408
2021
$
18,506
3,067,212
2,092,030
-
5,177,748
2021
$
14,602
3,904
-
18,506
2020
$
3,181,665
(4,811,798)
(1,630,133)
6,808,837
5,178,704
2020
$
14,602
1,861,296
2,053,254
1,301,785
5,230,937
2020
$
14,602
-
-
14,602
Vonex Limited / Financial Report for the year ended 30 June 2021 51
Consolidated Notes to the Financial Statements
Options Premium Reserve
Balance at the beginning of the year
Expense relating to options issued
Options expired
Balance at the end of the year
Share-Based Payments Reserve
2021
$
1,861,296
1,211,000
(5,084)
3,067,212
2020
$
1,861,296
-
-
1,861,296
2021
$
2020
$
Balance at the beginning of the year
2,053,254
1,282,681
Expense related to performance rights issued 20 September 2016
Expense related to Vodia performance shares issued 14 July 2018
Expense related to performance rights issued 28 July 2017
Conversion of Vodia Performance Shares to ordinary shares
-
-
58,776
(20,000)
26,285
1,887
742,401
-
Balance at the end of the year
2,092,030
2,053,254
The reserve records the valuation of performance shares and performance rights issued to vendors (shares) and key
management personnel (rights).
Capital Raising Reserve
Balance at the beginning of the year
Share capital received in advance
Capital raising costs paid in advance
Transfer to ordinary share capital
Balance at the end of the year
2021
$
1,301,785
-
-
(1,301,785)
-
2020
$
-
1,400,000
(98,215)
-
1,301,785
The reserve records fund received in advance for the issue of share capital (net of associated costs).
Vonex Limited / Financial Report for the year ended 30 June 2021 52
Consolidated Notes to the Financial Statements
Note 23
Contingent Liabilities and Contingent Assets
Contingent Liabilities
There were no known contingent liabilities at reporting date (2020: nil).
Contingent Assets
There are contingent assets at reporting date of $750,000 (2020: $750,000).
Vonex Ltd may receive up to $750,000 in future years in relation to the disposal of its iron ore production royalties
derived from the Koolyanobbing Iron Ore Project. The company may receive this in two tranches subject to the
following milestones:
• $250,000 cash payable upon three million dry metric tonnes of iron ore being produced and accounted for in
royalty invoices from M77/1258
• $500,000 cash payable upon five million dry metric tonnes of iron ore being produced and accounted for in
royalty invoices from M77/1258
Basis of accounting for purposes of report
by operating segments
Unless stated otherwise, all amounts reported within the
operating segments are by determined in accordance
with accounting standards adopted within the annual
financial statements.
Segment assets and liabilities
Segment assets and liabilities have been identified
based on where the direct relationship that exists in
the provision of services within the two main operating
segments.
Unallocated items
Items of revenue, expense, assets and liabilities that
are not allocated to operating segments if they are
considered part of the core operations of any segment.
Note 25
Operating Segments
Identification of reportable segments
The Consolidated entity has identified its operating
segments based its service offerings, which
represents retail and wholesale services within the
telecommunications industry. The three main operating
segments are:
Retail: engaged in the sale of hardware and the full
suite of telecommunication services including the
provision of data, internet, voice (including IP voice) and
other services within Australia.
Wholesale: provides wholesale customers access to
the core Vonex PBX, call termination services, NBN and
4G mobile broadband at wholesale rates via a “white
label” model.
Corporate: engaged in managing the corporate affairs
of the Group, including capital-raising its headquarters
central functions as well as its risk management
and self-insurance activities along with special
development projects such as the Oper8tor App.
Intercompany transactions: sales are made and
receivables/payables recognised within the group
which are removed via adjustment.
Vonex Limited / Financial Report for the year ended 30 June 2021 53
Consolidated Notes to the Financial Statements
Segment Information
The segment information provided to the Board of Directors for the
reportable segments for the year ended 30 June 2021 and 30 June
2020 are as follows:
30 June 2021
Wholesale
Retail
Corporate
Segment Performance
$
$
External customer sales
10,416,583
9,510,901
$
-
Other revenues
Interest received
164,703
138,398
652,086
404
446
241
Intercompany
transactions
$
Total
$
(1,668,241)
18,259,243
-
-
955,187
1,091
Total segment revenues
10,581,690
9,649,745
652,327
(1,668,241)
19,215,521
EBITDA
148,961
511,549
(3,083,579)
Depreciation and amortisation
(109,431)
(235,020)
(513,678)
Impairment charges
Interest revenue
Finance costs
-
404
-
446
(771,319)
241
(22,589)
(21,386)
(14,982)
Segment loss before income tax expense
17,345
255,589
(4,383,317)
Income tax benefit
125,595
Segment loss after income tax expense
17,345
255,589
(4,257,722)
-
-
-
-
-
(2,423,069)
(858,129)
(771,319)
1,091
(58,957)
(4,110,383)
125,595
(3,984,788)
Segment assets
3,253,349
3,795,398
5,190,608
(503,820)
11,735,534
Total assets
11,735,534
Segment liabilities
2,385,018
1,179,008
3,099,389
(503,820)
6,159,595
Total liabilities
6,159,595
Vonex Limited / Financial Report for the year ended 30 June 2021 54
Consolidated Notes to the Financial Statements
30 June 2020
Wholesale
Retail
Corporate
Total
Segment Performance
$
$
External customer sales
4,002,791
8,767,513
$
-
$
12,770,304
Other revenues
Interest received
118,095
63,470
2,447,349
2,628,914
171
-
6,645
6,816
Total segment revenues
4,121,057
8,830,983
2,453,994
15,406,034
EBITDA
336,014
433,500
(898,719)
(129,205)
Depreciation and amortisation
(56,586)
(122,993)
(388,677)
(568,256)
Interest revenue
Finance costs
171
-
6,645
(11,452)
(21,986)
(23,746)
6,816
(57,184)
Segment loss before income tax expense
268,147
288,521
(1,304,497)
(747,829)
Income tax benefit
41,865
41,865
Segment loss after income tax expense
268,147
288,521
(1,262,632)
(705,964)
Segment assets
1,823,995
3,305,307
7,101,261
12,230,563
Total assets
12,230,563
Segment liabilities
1,244,692
1,016,563
3,160,471
5,421,726
Total liabilities
5,421,726
Vonex Limited / Financial Report for the year ended 30 June 2021 55
Consolidated Notes to the Financial Statements
Note 26
Cash Flow Information
(a) Reconciliation of cash flows from operations with loss after Income Tax
Loss after income tax
Non-cash items
Depreciation and amortisation expense
Share based payments
Loss on disposal of assets/investments
Bad debts
Interest adjustments
Debt forgiven
Impairment expense
Changes in assets and liabilities
Trade and other receivables (current)
Other assets
Provisions
Trade and other payables
Deferred tax liability
Cash flow used in operating activities
Note 27
Accumulated Losses
2021
$
Restated
2020
$
(3,984,788)
(705,964)
858,129
1,269,776
3,411
82,016
49,327
(13,975)
771,319
(203,831)
40,693
111,466
799,658
(125,595)
(342,394)
568,256
770,573
2,541
11,623
52,393
(11,821)
-
(891,863)
(110,621)
26,754
(399,248)
(41,865)
(729,242)
2021
$
2020
$
Accumulated losses at beginning of financial year
(46,064,265)
(45,308,426)
Net loss attributable to members of the company at end of financial year
(3,984,788)
Retained earnings adjustment – adoption of AASB 16
Retained earnings adjustment – reversal of options valuation expired
3 August 2020
-
5,084
(705,964)
(49,875)
-
Accumulated losses at end of financial year
(50,043,969)
(46,064,265)
Vonex Limited / Financial Report for the year ended 30 June 2021 56
Consolidated Notes to the Financial Statements
Note 28
Events After the
Reporting Period
Subsequent to the reporting period on 30 July 2021
Vonex raised $2,475,000 in a share placement via
the issue of 22,502,051 ordinary fully-paid shares
at $0.11 per share, as part of the two-tranche
placement announced 23 July 2021. On 30 August
2021, shareholders approved the issue of an additional
86,588,858 shares at $0.11 per shares pursuant to
tranche 2, which will raise an additional $9.525m.
Subsequent to the reporting period on 9 August 2021
Vonex has drawn down a $16m debt facility from
Longreach Credit Investors to part fund the initial $20
million consideration payable by Vonex on completion
of the acquisition of MNF Group’s Direct business.
Subsequent to the reporting period on 18 August 2021
Vonex announced that its SPP received strong support
and was heavily over-subscribed with in excess of $3.7
million of demand from eligible Vonex shareholders. On
19 August 2021, Vonex issued 18,181,485 shares to the
SPP subscribers.
COVID-19
On 31 January 2020, the World Health Organisation
(‘WHO’) announced a global health emergency
because of a new strain of coronavirus originating in
Wuhan, China (COVID-19 outbreak) and the risks to the
international community as the virus spreads globally
beyond its point of origin. Because of the rapid increase
in exposure globally, on 11 March 2020, the WHO
classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues
to evolve at the date of this report. The company
is therefore uncertain as to the full impact that the
pandemic will have on its financial condition, liquidity,
and future results of operation during future years.
Management is actively monitoring the global situation
and its impact on the Company’s financial condition,
liquidity, operations, supplier, industry, and workforce.
Given the daily evolution of the COVID-19 outbreak and
the global responses to curb the spread, the Company
is not able to estimate the effects of the COVID-19
outbreak on its results of operations, financial condition,
or liquidity in future years.
Although the Company cannot estimate the length or
gravity of the impact of the COVID-19 outbreak at this
time, if the pandemic continues, it may have a material
adverse effect on the Company’s results of future
operations, financial position, and liquidity in future years.
Apart from the disclosures made within this report, no
other matter or circumstance has arisen since 30 June
2021 that has significantly affected, or may significantly
affect the consolidated entity’s operations, the results
of those operations, or the consolidated entity’s state of
affairs in future financial years.
Note 29
Related Party
Transactions
Parent Entity
The parent entity within the Group is Vonex Ltd.
Subsidiaries
Interests in subsidiaries are set out in note 14.
Key Management Personnel
Disclosures relating to key management personnel are
set out in note 6.
Vonex Limited / Financial Report for the year ended 30 June 2021 57
Consolidated Notes to the Financial Statements
Transactions with Related Parties
The following transactions occurred with related parties:
Services provided
Company secretarial, corporate compliance, bookkeeping and accounting
fees from Minerva Corporate (director-related entity of Nicholas Ong)
Payments for legal fees from Bowen Buchbinder Vilensky (director-related
entity of David Vilensky)
Receivable from and Payable to Related Parties
The following balances are outstanding at the reporting date in
relation to transactions with related parties:
Current payables
Trade payables to Minerva Corporate (director-related entity of Nicholas Ong)
2021
$
56,788
26,033
2021
$
9,900
2020
$
74,161
37,378
2020
$
4,950
Note 30
Financial Instruments
The consolidated entity’s financial instruments consist
mainly of deposits with banks, short term investments
and accounts receivable and payable, loans to and from
related parties and commercial loans. The main risks the
consolidated entity is exposed to through its financial
instruments are interest rate risk, credit risk, liquidity risk,
price risk and foreign exchange risk.
There are inter-company loans in place within the
consolidated entity and these facilities currently attract
no exposure to interest rate risk.
The consolidated entity continues to manage its interest
rate risk through a constant monitoring of interest rates,
budgets and cash flows.
(a) Interest Rate Risk
The consolidated entity’s exposure to interest rate risk,
which is the risk that a financial instrument will fluctuate
as a result of changes in market interest rates and
effective average interest rates on those financial assets
and liabilities.
The majority of cash at bank held by the consolidated
entity is in deposit accounts with one of the four large
Australian Banks. Considering the amount of surplus
working capital cash held by the consolidated entity
during the last 12 months in these deposit accounts, the
Board believes this was the most appropriate to ensure
an adequate return being received on funds held.
Vonex Limited / Financial Report for the year ended 30 June 2021 58
Consolidated Notes to the Financial Statements
Weighted
Average
Interest Rate
Floating
Interest Rate
Fixed Interest
Rate Within 1
Year
Fixed Interest
Rate Within
1-5 Years
Non-Interest
Bearing
Total
2021
%
$
Financial Assets
Cash
0.03
3,657,064
Receivables
Total financial assets
Financial Liabilities
Payables
Total financial liabilities
-
-
-
3,657,064
-
-
Net financial assets
3,657,064
2020
Financial Assets
Cash
0.05
4,810,446
Receivables
Total financial assets
Financial Liabilities
Payables
Total financial liabilities
-
-
-
4,810,446
-
-
Net financial assets
4,810,446
$
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
$
$
1,352
3,658,416
1,684,355
1,684,355
1,685,707
5,342,771
3,888,885
3,888,885
3,888,885
3,888,885
(2,203,178)
1,453,886
1,352
4,811,798
1,480,524
1,480,524
1,481,876
6,292,322
3,181,665
3,181,665
3,181,665
3,181,665
(1,699,789)
3,110,657
Sensitivity Analysis
The effect on profit and equity as a result of changes in interest rates on net financial assets is immaterial.
Vonex Limited / Financial Report for the year ended 30 June 2021 59
Consolidated Notes to the Financial Statements
(b) Credit Risk
Credit risk related to balances with banks and other financial institutions is managed by the board of directors in
accordance with approved Board policy. Such policy requires that surplus funds are only invested with counterparties
with a Standard & Poor’s rating of at least AA-. The following table provides information regarding the credit risk
relating to cash and money market securities based on Standard & Poor’s counterparty credit ratings.
Cash and cash equivalents
AA Rated
Note
2021
$
2020
$
9
3,658,416
4,811,798
The maximum exposure to credit risk is the carrying
amount as disclosed in the consolidated statement of
financial position and notes to the financial statements.
The consolidated entity’s assets have been pledged
to secure borrowings and guarantees are in place
for certain borrowings and supplier agreements. All
repayment obligations are up to date and within terms
of the individual agreements in place at balance date.
Trade and other receivables are within normal terms and
appropriate provisions for doubtful debts have been
made. Carrying value approximates fair value at 30
June 2021.
(c) Net Fair Values
The net fair value of financial assets and liabilities of the
consolidated entity approximated their carrying amount.
The consolidated entity has no financial assets and
liabilities where the carrying amount exceeds the net fair
value at reporting date. The aggregate net fair values
and carrying amounts of financial assets and financial
liabilities are disclosed in the statement of financial
position and notes to the financial statements.
(d) Liquidity Risk
Liquidity risk arises from the possibility that the
consolidated entity might encounter difficulty in settling
its debts or otherwise meeting its obligations related to
financial liabilities. The consolidated entity manages this
risk through the following mechanisms:
• preparing forward looking cash flow analysis in relation
to its operational, investing and financing activities
• obtaining funding from a variety of sources
• maintaining a reputable credit profile
• managing credit risk related to financial assets
• investing only in surplus cash with major financial
institutions
• comparing the maturity profile of financial liabilities
with the realisation profile of financial assets
The consolidated entity does not have a significant
exposure in terms of financial liabilities or illiquid financial
assets and is able to settle its debts or otherwise meet its
obligations related to financial liabilities.
Vonex Limited / Financial Report for the year ended 30 June 2021 60
Consolidated Notes to the Financial Statements
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
Financial Liabilities
Payables
Borrowings
3,888,885
3,181,665
-
-
-
-
-
-
Lease Liability
346,815
267,300
648,513
683,250
Total expected outflows
4,235,700
3,448,965
648,513
683,250
Financial assets
Cash and cash equivalents
3,658,416
4,811,798
Receivables
1,684,355
1,480,524
Total anticipated inflows
5,342,771
6,292,322
-
-
-
-
-
-
Net inflow / (outflow) on
financial instruments
1,107,071
2,843,357
(648,513)
(683,250)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,888,885
3,181,665
-
-
995,328
950,550
4,884,213
4,132,215
3,658,416
4,811,798
1,684,355
1,480,524
5,342,771
6,292,322
458,558
2,160,107
(e) Foreign Exchange Risk
The consolidated entity does have a minor exposure to fluctuations in foreign currencies between the US and
Australian dollar. Some wholesale customers are based in the United States of America and monthly invoices are
rendered in US dollars. When invoices are paid the proceeds are converted into Australian dollars. Depending on
exchange rate fluctuations from the time the invoice is rendered and subsequently paid, the consolidated entity
may have an associated exchange rate gain or loss. Management will continue to conduct monitoring reviews on an
ongoing basis of its USA based customers.
Vonex Limited / Financial Report for the year ended 30 June 2021 61
Consolidated Notes to the Financial Statements
Note 31
Share Based Payments
The total expense arising from share based payment transactions
recognised during the year in relation to the performance rights,
performance shares and options issued was $1,269,776 (2020: $770,573).
Share Based Payment Expense
Performance Rights – Key Management Personnel – 20 September 2016
Performance Rights – Other Personnel – 20 September 2016
Performance Rights – Vodia Networks Inc - 14 July 2018
Performance Rights – Key Management Personnel – 28 July 2017
Performance Rights – Other Personnel – 28 July 2017
Options – Key Management Personnel
Total Share Based Payment Expense
2021
$
-
-
-
30,582
28,194
1,211,000
1,269,776
2020
$
13,143
13,143
1,886
386,887
355,514
-
770,573
Movement in share rights and performance shares during the period
Balance at beginning of period
Vested during the period
Balance at end of period
Number of
performance rights
27,560,000
(100,000)
27,460,000
Performance rights granted during the period
Total performance rights granted during the period was $nil (2020: $nil).
Performance Rights – Vodia Networks Inc - 14 July 2018
Vonex Ltd issued 328,000 performance rights to Vodia Networks Inc in four tranches. Each performance right will
convert into 1 ordinary share of Vonex Ltd upon achievement of the performance milestone. These performance rights
were valued at their issue dates at $65,600.
Performance Milestones:
• Tranche 1 has vested and converted on 30 April 2019.
• Tranche 2 has vested and converted on 1 July 2018.
• Tranche 3 has vested and converted on 1 July 2020.
• Tranche 4 has vested and converted on 1 July 2020.
Vonex Limited / Financial Report for the year ended 30 June 2021 62
Consolidated Notes to the Financial Statements
Performance Rights – Key Management Personnel – 28 July 2017
On 28 July 2017, Vonex Ltd issued 16,940,000 performance rights to management. These performance rights were
issued in three tranches, each with different performance milestones. Each performance right will convert into 1
ordinary share of Vonex Ltd upon achievement of the performance milestone.
The company has assessed tranche 1,2 and 3 as being probable of being achieved and have therefore recognized an
expense over the expected vesting period.
The details of each class are tabled below:
Trache
Number
Start Date
Expected Date of
Milestone Achievements
Underlying Share Price
Total Fair Value
1
2
3
7,260,000
28/07/17
Vested
4,840,000
28/07/17
Vested
4,840,000
28/07/17
28/07/2022
$0.20
$0.20
$0.20
$1,452,000
$968,000
$968,000
These performance rights were valued at their issue dates at $3,388,000.
Performance Milestones:
• On 29 January 2018, the performance rights relating to Tranche 1 were amended such that the 7,260,000 vest upon
a successful listing on the Australia Securities Exchange.
• Tranche 2 have vested on 31 August 2020 – Convertible upon company achieving audited gross revenue of $15
million in a financial year. The milestone has been achieved but performance rights have not been converted to
ordinary shares.
• Tranche 3 performance rights are outstanding – Convertible upon company achieving audited net profit after tax
of $1 million in a financial year.
Oper8tor Rights – 28 July 2017
Performance Milestones:
• 2,000,000 Performance Rights which shall vest and convert into ordinary fully paid shares in the issued share
capital of the Assignee upon completion of the beta version of the Oper8tor App and commencement of the
official Oper8tor launch in Europe, expiring 28 July 2022;
• 5,000,000 Performance Rights which shall vest and convert into ordinary fully paid shares in the issued share
capital of the Assignee when Oper8tor reaches 10 million Active Users, expiring 28 July 2022; and
• 10,000,000 Performance Rights which shall vest and convert into ordinary fully paid shares in the issued share
capital of the Assignee when Oper8tor reaches 50 million Active Users, expiring 28 July 2022.
No value has been allocated to the performance rights due to significant uncertainty of the meeting the performance
milestone which are based on future events.
Vonex Limited / Financial Report for the year ended 30 June 2021 63
Consolidated Notes to the Financial Statements
Performance Rights – Key Management Personnel – 20 September 2016
Vonex Ltd issued 2,340,000 performance rights to Executive Directors, management personnel, the Chairman and
a non-executive director. These performance rights were issued in three tranches, each with different performance
milestones. Each performance right will convert into 1 ordinary share of Vonex Ltd upon achievement of the
performance milestone. These performance rights were valued at their issue dates at $1,053,000.
Performance Milestones:
• Tranche 1 performance rights were forfeited and amounts previously recorded was reversed during the 2018
financial year as the vesting conditions were not satisfied.
• Tranche 2 has vested and coverted to ordinary shares on 14 June 2018.
• Tranche 3 has vested - Convertible upon company reaching $10 million annualised revenue per annum in any
quarter. The milestone has been achieved but performance rights have not been converted to ordinary shares.
Options granted during the period
On 27 November 2020, the Company issued 10,000,000 options to directors, each exercisable at $0.37 with a three-
year expiry period. These options were valued using a Hoadley ESO2 valuation model and the expense recognised
in full at their issue date is $1,211,000. For the options issued during the period, a Hoadley ESO2 valuation model was
used with the valuation model inputs used to determine the fair value at the grant date as follows:
Grant date
Expiry date
Share prince at
grant date
Exercise price
Expected
volatility
Risk free rate
Dividend yield
Number of
options
Value per
option
Total value
$
Vesting terms
27/11/2020
01/12/23
$0.26
$0.37
100%
0.11%
0%
10,000,000
$0.1211
1,211,000
Immediately
The total options on issue at 30 June 2021 are as follows:
Grant date
Expiry date
Exercise price
Balance at the
start of the year
Granted
Exercised
Expired/
forfeited
Balance at the
end of the year
03/08/17 (i)
03/08/20
$0.90
133,750
07/06/18 (i)
07/06/23
$0.30
14,500,000
30/11/17 (ii)
30/11/22
05/06/2019
30/11/22
05/06/2019
30/11/22
27/11/2020
01/12/23
$0.20
$0.20
$0.20
$0.37
14,719,731
3,215,060
1,800,000
-
-
-
-
-
-
10,000,000
34,368,541
10,000,000
-
-
-
-
-
-
-
(133,750)
-
-
-
-
-
-
14,500,000
14,719,731
3,215,060
1,800,000
10,000,000
(133,750)
44,234,791
Weighted average exercise price: $0.2712
The weighted average remaining contractual life of options outstanding was 1.82 years
(i) Options granted on 3 August 2017 and 7 June 2018 were free attaching options, the value of these options are
not required to be valued separately, as they are part of the share issue, and all the shares issued have been
valued in the issued capital account.
(ii) Where applicable, amounts in the tables above, have been adjusted for the 5:1 and 2:1 share consolidation
completed on 28 July 2017 and 29 January 2018 respectively.
Vonex Limited / Financial Report for the year ended 30 June 2021 64
Consolidated Notes to the Financial Statements
Note 32
Business Combinations
2SG Wholesale Pty Ltd
On 28 February 2020 Vonex Ltd, acquired the business
of 2SG Wholesale Pty Ltd (‘2SG’). 2SG Wholesale is
a telecommunications and data wholesaler based
in Brisbane, Queensland which provides Australian
Managed Service Providers, ISPs and System Integrators
with access to the latest in hardware and connectivity
solutions from leading brands. 2SG ’s mobile broadband
capability provides Australian ISPs the opportunity to sell
a wireless broadband solution via the Optus 4G Network.
Integration with Australia’s premier carriers facilitates
the delivery of the latest fixed line, mobile connectivity
and hardware solutions country-wide. The intangible
assets of $2,908,977 and goodwill of $524,140 represents
the expansion of Vonex’s diversified wholesale service
offerings commencement as it expands its brand and
exposure within the Australia telecommunications market
along with extensive cross-sell opportunities within 2SG’s
customer base acquired as part of the total consideration.
The purchase price allocation was recalculated during the
year and the comparative balances restated (see below).
The recalculation of the acquisition gave rise to a deferred
tax liability of $799,969 in respect of this acquisition. The
contract is being amortised on a straight-line basis over
two periods dependent on contract terms (5 years and 10
years).
Details of the acquisition are as follows:
Other Assets
Employee benefits
Net liabilities acquired
Customer and supplier contracts
Deferred tax liability
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Shares issued
Acquisition costs capitalised
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: employee benefits
Net cash used
Fair Value
$
24,747
(55,820)
(31,073)
2,908,977
(799,969)
524,140
2,602,075
444,180
2,157,895
2,602,075
500,000
(55,820)
444,180
Vonex Limited / Financial Report for the year ended 30 June 2021 65
Consolidated Notes to the Financial Statements
Nextel Pty Ltd
On 2 February 2021, Vonex Ltd acquired the business
of Nextel Pty Ltd (‘Nextel’). Nextel is a Sydney, NSW
based business providing telecommunications services
to business customers and is recognised as an industry
leader in the design, installation and maintenance
of voice, data and communications networks. It is an
established single-source provider to small-to-medium
enterprise (SME) businesses with expertise in rolling out
wireless, fibre and RFID networks, as well as delivering
structured cabling, telephony systems and electrical
fit outs to large-scale projects. The intangible assets
of $1,542,326 represents a substantial enhancement of
Vonex’s presence in the Sydney and NSW markets for
telco services to small-to-medium enterprises (SMEs),
adding market-leading products and services will create
opportunities for cross-selling and product expansion
through a growing national SME customer. The acquired
business contributed revenues of $577,600 to the
consolidated entity for the period from 2 February 2021 to
30 June 2021. If the acquisition occurred on 1 July 2020,
the revenue would be approximately $1,525,000. The
values identified in relation to the acquisition of Nextel are
provisional as at 30 June 2021.
Details of the acquisition are as follows:
Other Assets
Employee benefits
Net assets acquired
Intangible assets
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Shares issued (refer to Note 21)
Acquisition costs capitalised
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Add: other assets
Less: employee benefits
Net cash used
Fair Value
$
43,775
(13,604)
30,170
1,542,326
1,572,496
334,367
1,238,129
1,572,496
315,000
32,971
(13,604)
334,367
The fair values of Nextel business assets and liabilities have been measured provisionally. If new information is obtained
within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition
identifies adjustments to the amounts above, the accounting for the acquisition will be revised.
Vonex Limited / Financial Report for the year ended 30 June 2021 66
Consolidated Notes to the Financial Statements
Measurement period adjustment and comparative information restatement
The company was able to finalise its assessment of the assets and liabilities obtained upon the acquisition of 2SG
Wholesale Pty Ltd (‘2SG’) on 28 February 2020 which included provisionally recognised as intangible assets as at 30
June 2020. This balance is related to future revenue in various telecommunications and data contracts provided to
various wholesaler customers of varying contract periods and key supply contract acquired. This restatement within the
statement of financial position as at 30 June 2020 has resulted in an increase in Intangibles and Goodwill, an increase in
deferred tax liability, amortisation of intangible assets during the period and an increase in income tax benefit. Extracts
(being only those line items affected) are disclosed below.
Extract
Expenses
Amortisation
Loss before income tax
Income tax expense
Net loss for the year
2020
$
2020
$
Reported
Adjustment
Restated
(86,590)
(151,591)
(238,181)
(596,238)
(151,591)
(747,829)
-
41,865
41,865
(596,238)
(109,726)
(705,964)
Other comprehensive income for the year
-
-
-
Total comprehensive loss for the year
(596,238)
(109,726)
(705,964)
Basic and diluted earnings per share of loss attributable to the owners of
Vonex Limited (cents per share)
(0.38)
(0.07)
(0.45)
Statement of financial position
Non-current Assets
Intangible assets
Total non-current assets
Total assets
Non-current liabilities
Deferred tax liability
3,585,039
648,378
4,233,417
4,793,100
648,378
5,441,478
11,582,185
648,378
12,230,563
-
758,104
758,104
Total non-current liabilities
758,386
758,104
1,516,490
Total liabilities
Net assets
Equity
Accumulated losses
Total Equity
4,663,622
758,104
5,421,726
6,918,563
(109,726)
6,808,837
(45,954,539)
(109,726)
(46,064,265)
6,918,563
(109,726)
6,808,837
Vonex Limited / Financial Report for the year ended 30 June 2021 67
Consolidated Notes to the Financial Statements
Note 33
Company Details
Registered Office
Level 8, 99 St Georges Terrace, Perth, WA, 6000
Principal Place of Business
Level 6, 303 Coronation Drvie, Milton, QLD, 4064
Vonex Limited / Financial Report for the year ended 30 June 2021 68
Directors’
Declaration
In the directors’ opinion:
• the attached financial statements and notes comply with
the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional
reporting requirements;
• the attached financial statements and notes comply with
International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1
to the financial statements;
• the attached financial statements and notes give a true and fair
view of the consolidated entity’s financial position as at 30 June
2021 and of its performance for the financial year ended on that
date; and
• there are reasonable grounds to believe that the company will
be able to pay its debts as and when they become due and
payable.
The directors have been given the declarations required by section
295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant
to section 295(5)(a) of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the
Board of Directors.
Nicholas Ong
Chairman
31 August 2021
Vonex Limited / Financial Report for the year ended 30 June 2021 RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF VONEX LIMITED
Opinion
We have audited the financial report of Vonex Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Intangible Assets
Refer to Note 13 in the financial statements
The Group has goodwill of $524,140 and other
intangible assets of $3,983,260 at the reporting date.
For the year ended 30 June 2021, the Group
recognised an impairment expense of $771,319 in
relation to its intangible assets.
How our audit addressed this matter
Our audit procedures in relation to Goodwill included:
Assessing management’s determination of
the
CGU;
Assessing the valuation methodology of the value-
in-use model;
Management is required to perform an annual
impairment test on the recoverability of the Group’s
goodwill by using a value-in-use model. In addition,
management
to assess whether
indicators of impairment are present in relation to the
Group’s other intangible assets.
required
is
We determined this to be a key audit matter due to
the size of the balance and because management
judgement is involved in:
-
-
-
preparing a value-in-use model of the cash
generating unit (CGU) which requires estimates
of the future underlying cash flows of the CGU
and the discount rate applied;
assessing whether indicators of impairment are
present
the Group’s other
to
relation
in
intangible assets; and
determining the impairment expense to be
recognised, if required.
Checking the mathematical accuracy of the model;
Challenging
key
reasonableness
the
assumptions used in the model;
of
Reviewing sensitivity analysis over
assumptions used in the model; and
the key
Reviewing the adequacy and accuracy of the
relevant disclosures in the financial statements.
Our audit procedures in relation to the other intangible
assets included:
Critically evaluating management’s assessment of
whether impairment indicators were present at 30
June 2021;
Assessing management’s determination of
the
useful life of the intangible assets;
Checking
the mathematical accuracy of
the
amortisation expense of the intangible assets; and
Assessing the appropriateness of the impairment
expense against the intangible assets in relation to
Oper8tor, patents and trademarks.
Business Combination - Acquisition of Nextel Pty Ltd
Refer to Note 32 in the financial statements
The Group acquired the business of Nextel Pty Ltd
on 2 February 2021.
Our audit procedures included:
transaction was
treated as a business
The
combination in accordance with AASB 3 Business
Combinations. The provisional purchase price
allocation has resulted in intangible assets of
$1,542,326 being recognised.
Obtaining
the purchase agreement and other
associated documents to obtain an understanding
of the transaction and the related accounting
considerations;
Determination that the acquisition met the definition
of a business in accordance with Accounting
Standards;
This was considered a key audit matter because the
accounting for the transaction is complex and
involves significant judgments. These include the
recognition and valuation of consideration paid and
the determination of the fair value of the assets
acquired and liabilities assumed.
Assessing management’s determination of
the
acquisition date, fair value of consideration paid,
assets acquired and liabilities assumed; and
the disclosures
Reviewing
financial
the
in
statements.
Key Audit Matter
Share Based Payments – Options
Refer to Note 31 in the financial statements
During the year, the Company issued 10,000,000
options. The fair value of options granted during the
year was $1,211,000.
Management has performed the valuation of the
options granted using a valuation model.
We considered the valuation of these options to be a
involved management’s
it
key audit matter as
judgement in determining various inputs used in the
valuation model.
How our audit addressed this matter
Our audit procedures included:
Reviewing the key terms and conditions of the
options issued;
Obtaining
the valuation model prepared by
management and assessing whether the model
was appropriate for valuing the options issued
during the year;
Challenging
the
key
assumptions used by management in the model
to calculate the fair value of the options;
reasonableness
of
Recalculating
the value of
the share-based
payment expense to be recognised in profit or
loss; and
Reviewing the adequacy of the disclosures in the
financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the directors’ report but
does not include the financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the remuneration report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Vonex Limited, for the year ended 30 June 2021, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2021
TUTU PHONG
Partner
73
Additional Information
Shareholder Information (as at 25 August 2021)
(i) Number of shareholders: 2,991
(ii) Ordinary shares issued: 233,817,009
(iii) Distribution schedule of holdings of ordinary shares is set out below
Category (size of holding)
Holders
197
684
574
1,241
295
2,991
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Voting Rights
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called,
otherwise each member present at a meeting or by proxy has one
vote on a show of hands.
Options & Performance Rights
There are no voting rights attached to any class of options,
performance shares or performance rights that are on issue.
Total Units
55,633
2,393,946
4,475,136
42,990,935
183,901,359
233,817,009
Vonex Limited / Financial Report for the year ended 30 June 2021 74
Additional Information
Top 20 Holders of Ordinary Fully Paid Shares at 25 August 2021
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Rank
Name
2SG INVESTMENTS PTY LTD
BNP PARIBAS NOMS PTY LTD
Units
%Units
21,578,947
16,790,253
9.23
7.18
FINANCE WEST PTY LTD
10,532,430
4.50
JORSAVA PTY LTD
MR MATTHEW BRIAN MICHAEL FAHEY
JET CLUB PTY LTD
GUAVA CAPITAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
CARMINE LION GROUP PTY LTD
CONFADENT LIMITED
5,901,309
5,533,698
5,502,795
5,236,808
4,117,426
3,681,818
3,500,000
CS THIRD NOMINEES PTY LIMITED
3,492,939
STATE ONE STOCKBROKING LTD
COILENS CORPORATION PTY LTD
MS TOW LOY SUN
LATERAL CONSULTING (WA) PTY LTD
PULA HOLDINGS PTY LTD
MR BRETT HOLTERMAN
S3 CONSORTIUM PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
20
DR ROBERT POPOVIC
3,300,341
2,420,000
2,375,454
2,239,381
2,172,727
1,610,839
1,600,000
1,356,680
1,307,159
2.52
2.37
2.35
2.24
1.76
1.57
1.50
1.49
1.41
1.03
1.02
0.96
0.93
0.69
0.68
0.58
0.56
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
104,251,004
44.59%
Total Remaining Holders Balance
Total Shares on Issue
129,566,005
55.41%
233,817,009
100%
Vonex Limited / Financial Report for the year ended 30 June 2021 75
Additional Information
Substantial Shareholder
As at 30 August 2021, shareholders with a relevant interest in 5% or
more of the Company’s securities are set out below:
No. of Shares
% Interest
Holder
21,578,947
16,790,253
9.23
7.18
2SG INVESTMENTS PTY LTD
BNP PARIBAS NOMS PTY LTD
Unquoted Securities
Set out below are the classes of unquoted securities currently on issue:
Number
Class
14,500,000
options exercisable at 30c expiring 7/6/2023
19,734,791
options exercisable at 20c expiring 30/11/2022
10,000,000
options exercisable at 37c expiring 30/11/2023
27,460,000
performance rights with various vesting milestones
Unquoted Equity Security Holders with
Greater than 20% of an Individual Class
As at 30 August 2021 the following classes of unquoted securities had
holders with greater than 20% of that class on issue is set out below.
Options exercisable at 30c expiring 7/6/2023
CODE NOMINEES PTY LTD
STATE ONE EQUITIES PTY LTD
Performance Rights
MR MATTHEW FAHEY
Mr Angus Parker
On-Market Buyback
Currently there is no on-market buy-back of the Company’s securities.
% Interest
64.83
28.74
% Interest
31.57
31.20
Vonex Limited / Financial Report for the year ended 30 June 2021 76
Additional Information
Securities Subject to Escrow
Set out below are securities currently subject to escrow:
Number
5,502,795
Class
Ordinary fully paid shares (Jet Club Pty Ltd) escrowed until 02/02/2022
Corporate Governance
Pursuant to the ASX Listing Rules, the Company’s Corporate
Governance Statement will be released in conjunction with this
report. The Company’s Corporate Governance Statement is
available on the Company’s website at:
https://vonex.com.au/investors/corporate-governance
Vonex Limited / Financial Report for the year ended 30 June 2021 ABN: 39 063 074 635
Level 8, 99 Georges Tce
Perth WA 6000
13 VONEX
investor@vonex.com
vonex.com.au