ACN: 063 074 635
FINANCIAL REPORT
30 JUNE 2022
AB N 39 063 074 635
L evel 8, 99 St Geo rg es Tce P ert h WA 6000
P h: 13VO NEX
Em a il: invest or @vonex.com
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
Directors
Company Secretary
Chen Chik (Nicholas) Ong (Non-Exec. Chairman)
Daniel Smith
Matthew Fahey (Managing Director)
David Vilensky (Non-Exec. Director)
Share Registry
Winnie Lai Hadad (Non-Exec. Director)
Computershare Investor Services Pty Limited
Jason Gomersall (Non-Exec. Director)
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
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
Tel: 1800 828 668
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
Website
www.vonex.com.au
https://investors.vonex.com.au/corporate-governance/
1
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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 2022.
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 and CEO
• 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 17 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 fellow 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: Nil
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.
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.
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.
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.
Other directorships of Australian listed companies held by Mr Vilensky in the last three years are:
Current: Latin Resources Limited and Oakdale Resources Limited.
Previous: Nil
2
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
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.
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.
Other directorships of Australian listed companies held by Ms Lai Hadad in the last three years are:
Current: Avenira Limited.
Previous: Nil
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 15 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.
Mr Smith is currently a director and/or company secretary of numerous companies listed on ASX, AIM and NSX.
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:
Directors
Nicholas Ong
Matthew Fahey
David Vilensky
Winnie Lai Hadad
Jason Gomersall
Ordinary
Shares
4,416,462
7,311,018
3,090,000
269,367
12,104,579
Performance
Rights
Nil
Nil
Nil
Nil
Nil
Options
2,552,000
3,000,000
1,500,000
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
3
3
3
3
3
Eligible to
Attend
3
3
3
3
3
3
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
Principal Activities
Vonex is a full service, award-winning telecommunications service provider focused on delivering state of the art
cloud based solutions predominately to the small to medium enterprise ("SME") customer under the Vonex brand.
The Company also provides a full range of traditional telecommunications products such as mobile and internet.
Through 2SG the groups wholesale division customers, such as internet service providers, can access the core
Vonex PBX, call termination services, hardware, mobile and internet at wholesale rates via a white label model.
Vonex also delivers custom built software solutions to wholesale customers to facilitate projects of scale.
Financial Position & Operating Results
The financial results of the consolidated entity for the financial year ended 30 June 2022 are:
Cash and cash equivalents ($)
Net assets / (liabilities) ($)
Revenue ($)
Net profit/(loss) after tax ($)
Earnings/(Loss) per share (cents)
30-Jun-22
3,195,181
19,284,541
34,329,061
330,522
0.11
30-Jun-21
3,658,416
5,575,939
19,215,521
(3,984,788)
(2.10)
% Change
(13%)
246%
79%
108%
105%
Dividends Paid or Recommended
There were no dividends declared or paid by the Company during the year and no dividend is recommended
(2021: Nil).
Review of Operations
2SG Wholesale
All Vonex wholesale services were combined and branded as 2SG Wholesale as of 1st January 2021. The 2SG
Wholesale division continued to experience strong growth during the reporting period.
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 the second half of FY22, with NBN and Mobile voice sales up 22% and 37% respectively over
the previous calendar year. Wholesale voice and PBX product lines also delivered robust growth with revenues
increasing by 37% YoY. This strong growth reflects Vonex beginning to capture the cross-selling opportunities
the Company identified prior to acquiring 2SG Wholesale.
In addition to the business grade mobile broadband offered by 2SG Wholesale, the Company has successfully
attracted much larger wholesale customers, such as Discovery Technologies (a subsidiary of ASX:300 Data 3),
and has also inked a wholesale relationship with Orange Business Services, a network native digital services
company and the global enterprise division of the Orange Group (EPA:ORA) who currently service 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.
As part of the business units’ strategy to continue to reduce costs, the 2SG Wholesale business recently
commenced the re-architecture of its fixed-line network which sees the business leveraging its direct relationship
with NBN and connecting directly to all 121 NBN points of interconnect (POIs). This project will deliver tier 1
capability, an enhanced product range and the best possible commercial structure to enable the delivery of best-
in-class fibre services to both wholesale and retail customers.
4
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
Vonex Retail
Following the successful completion of Vonex's transformational acquisition of the Direct Business operations
from MNF Group in August 2021 and Voiteck in January 2022, the Company has continued to deliver growth in
both SME customer numbers as well as contracted revenue. Following record levels of revenue in Q3 FY22,
Vonex added total contract value (TCV) for new customer sales of $2.37 million in the June quarter. This
represents YoY growth of 47% and marks three successive quarters in which Vonex has added more than $2
million of TCV.
MNF Group’s Direct Business Transaction
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 (minus a $1
million wholesale credit) in monthly instalments over 12 months. On 4 August 2022, the Company announced
that it had paid the final monthly cash payment to Symbio Holdings Ltd forming part of the deferred consideration
for the Company's acquisition of the Direct Business.
The Direct Business also sold cloud based phone solutions, internet and mobile services to small-to-medium
enterprise and residential customers in Australia.. The Acquisition materially expanded Vonex's footprint of SME
and residential customers across Australia and included the migration of approximately 5,250 new business
customers to the Company’s platform.
The Direct Business delivered an unaudited FY21 EBITDA of $5.5 million from revenue of $15.0 million.
Voiteck Acquisition
On 14 December 2021, the Company announced that it had agreed to acuire 100% of the share capital of Voiteck
Pty Ltd ("Voiteck") through a mixture of upfront and performance based consideration. The Company completed
its acquisition of Voiteck in January 2022. Voiteck is an established provider of voice and internet services to SME
customers in South Australia.
Founded in 2009 by telecommunications industry veteran Declan O’Callaghan, Voiteck has grown to now service
more than 10,000 hosted PBX phone system users through approximately 1,000 customers, spanning a range
of end-markets including Aged Care and Community Clubs.
Voiteck's established presence across several niche verticals and its strong standing in the South Australian
market have launched Vonex into a new geographic region which presents exciting growth opportunities. The
acquisition also provided Vonex for the first time with a much-needed branded physical presence in South
Australia, through a customer showroom located on King William Street in the Adelaide CBD. This showroom will
allow Vonex to manage its South Australian channel partners more closely and accelerate growth in this market.
5
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
More Telecom
On 10 June 2022, Vonex announced that it had partnered with telecommunications service providers More
Telecom Pty Ltd and Tangerine Telecom Pty Ltd ("More") to become More’s exclusive provider of hosted PBX
services. This partnership will see Vonex deliver a new hosted PBX and IP telephony enablement platform for
More's new and existing SME customers.
With annualised revenue over $100 million and more than 125k active customers, More is a Melbourne-based
provider of a full suite of innovative NBN, business phone and mobile products, services and plans to consumers
and SME business customers. More is part-owned by Commonwealth Bank, having announced a strategic
partnership in July 2021 that unlocks special benefits for CBA customers.
Under the agreement, Vonex will charge More a one-off fee for the initial development of the customised software
platform, which is estimated to be $70,000 based on a daily development rate. However, the significant revenues
are expected from providing ongoing managed services to More across four key areas:
• Monthly extension license fees. More has agreed to pay a license fee for each Hosted PBX Extension
activated via the Vonex Platform. As part of the relationship, More has also committed to migrate its 8,800
existing extensions to the Vonex platform.
• The exclusive sale of hardware to More. More has agreed for all IP Phone related hardware needed for each
new Business phone service to be purchased via the Vonex platform.
• Local and international call carriage. More have also committed to exclusively use Vonex carriage for national
and international minutes.
• Software licensing and Management fees. Softphone licenses will also be charged on a per license basis.
The agreement also includes an ongoing monthly management fee for the platform.
Corporate
Capital Raising
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.
Net proceeds from the Placement and SPP were 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 30 August 2021, all resolutions were passed by way of a poll.
At the Company’s AGM held 29 November 2021, 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 $0.48 million for FY22 (FY21:
$0.54 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.
6
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
Cash Position
The Company ended the financial year with a strong cash balance of $3.195 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 -through selling opportunities,
product range expansion and network cost efficiencies. The Company’s focus continues to be on the recruitment
of new Partners across Australia to support the anticipated growth in Hosted 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.
The Vonex group now has approximately 100,000 registered active users on its PBX cloud-based phone service,
up 117% year on year, a key indicator of the Company’s business development progress.
The Company achieved ARR of ~$36.2 million as at 30 June 2022, up 97% year-on-year.
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.
Events after the reporting period
Subsequent to the reporting period, on 24 August 2022 the Company announced that it had paid the final monthly
cash payment to Symbio Holdings Ltd (ASX: SYM) forming part of the deferred consideration for the Company's
acquisition of part of the MyNetFone Direct Business.
Furthermore, on 30 August 2022 the Company cancelled 13,240,000 Performance Rights as a result of the
milestones being unable to be achieved in the permitted time period. The cancelled Performance Rights include:
a) 4,740,000 convertible upon the Company achieving audited net profit after tax of $1 million in a financial year;
b) 1,000,000 convertible into ordinary shares upon completion of the beta version of the Oper8tor App and
commencement of the official Oper8tor launch in Europe;
c) 2,500,000 convertible into ordinary shares upon the Oper8tor App achieving 10 million active users; and
d) 5,000,000 convertible into ordinary shares upon the Oper8tor App achieving 50 million active users.
Apart from the disclosures made within this report, no other matter or circumstance has arisen since 30 June
2022 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.
7
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
REMUNERATION REPORT (Audited)
The remuneration report is set out under the following main headings:
A Remuneration Governance
B Remuneration Structure
C Details of Remuneration
D Share-based compensation
E Equity instruments issued on exercise of remuneration options
F Value of options to Directors
G Equity instruments disclosures relating to key management personnel
H 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 and CEO
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 2021 Annual General Meeting
The Company received 88% of “yes” proxy votes on its remuneration report for the 2021 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
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.
8
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
B Remuneration Structure
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 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 33.
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
Salary &
fees
$
Cash
bonus
$
318,477
71,000
60,000
60,000
60,000
569,477
-
-
-
-
-
-
Long
Service
Leave
$
15,483
-
-
-
-
15,483
Superannuation
$
31,694
7,100
6,000
6,000
6,000
56,794
Performance
rights/options
(I)
$
(15,971)
(193,247)
(193,247)
-
-
Total
$
349,683
(115,147)
(127,247)
66,000
66,000
(402,465)
239,289
Percentage
remuneration
consisting of
performance
rights/option
s for the year
-
-
-
-
-
The valuation of tranche 3 performance rights were reversed previously recognized expense during the year, refer to Note 32
30/06/2022
Directors
Mr Fahey
Mr Ong
Mr Vilensky
Ms Hadad
Mr Gomersall
Total
(I)
Short-term benefits
Post-employment
benefits
Share-based
payment
Salary &
fees
$
Cash
bonus
$
30/06/2021
Directors
Mr Fahey
Mr Ong
Mr Vilensky
Ms Hadad
Mr Gomersall
Total
286,000
60,000
60,000
60,000
60,000
526,000
-
-
-
-
-
-
Long
Service
Leave
$
5,722
-
-
-
-
5,722
Superannuation
$
Performance
rights/options
$
Total
$
683,417
383,128
262,028
247,350
247,350
364,525
317,428
196,328
181,650
181,650
1,241,581
1,823,273
27,170
5,700
5,700
5,700
5,700
49,970
Percentage
remuneration
consisting of
performance
rights/option
s for the year
53%
83%
75%
73%
73%
68%
9
DIRECTORS’ REPORT
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Director
Mr Fahey
Mr Ong
Mr Vilensky
Ms Hadad
Mr Gomersall
Fixed Remuneration*
At risk – LTI **
2022
2021
2022
2021
100%
100%
100%
100%
100%
47%
17%
25%
27%
27%
-
-
-
-
-
53%
83%
75%
73%
73%
*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, exerciseable from 1 Dec 2020 to 1 Dec 2023, at a exercise price of $0.37.
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 Non-Executive Chairman receives a fixed fee for his services of
$72,000 per annum (plus GST).
The Group has provided variable remuneration incentive schemes to certain Non-Executive Directors as detailed
in Note 33. 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 $284,000 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.
10
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
D Share-based Compensation
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. All tranches
have now either vested or been forfeited.
No options were issued to directors during the year. In the prior financial year, all directors were issued options
for their work and ongoing commitment and contribution to the Company. Refer to Note 33 for further details in
respect to the options granted.
E 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 (2021: Nil).
F Value of options to Directors
Options – Directors
No options were issued to directors during the year.
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.
2022
Directors
Mr Matthew Fahey
Mr Nicholas Ong
Mr David Vilensky
Ms Winnie Lai Hadid
Mr Jason Gomersall
Opening
Balance
Received as
Remuneration
Received During
Year on Exercise of
Options
Net Change
Other
Closing
Balance
6,508,291
2,644,645
2,550,000
58,823
285,000
12,046,759
-
-
-
-
-
-
-
-
-
-
-
-
802,727
7,311,018
1,771,817
4,416,462
540,000
3,090,000
210,544
269,367
11,819,579
12,104,579
15,144,667
27,191,426
11
DIRECTORS’ REPORT
Deferred performance shares holdings
The table shows how many deferred KMP performance shares have been granted, vested and forfeited.
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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
-
-
-
$(20,000)
$58,500
$242,000
$242,000
$58,500
$242,000
-
-
-
$(242,000)
$58,500
$242,000
$242,000
$58,500
$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 expired on 28 July 2022.
The table shows how many deferred KMP performance shares have been granted, vested and forfeited during
the period:
2022
Opening
Balance
Vested during the
period
Net Change
Other
Closing Balance
Directors
Mr Matthew
Fahey
Mr Nicholas Ong
Mr David
Vilensky
8,830,000*
2,550,000
2,550,000
13,930,000
-
-
-
-
(230,000)
8,600,000*
(1,340,000)
1,210,000**
(1,340,000)
1,210,000**
(2,910,000)
11,020,000
*8,500,000 Performance rights relate to Oper8tor rights issued on 28 July 2017. These rights have nil value and expired on 28 July 2022.
** Forfeited as at 30 June 2022, and subsequently cancelled on 30 August 2022.
12
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
Option holdings
The table shows how many KMP options have been granted, vested and forfeited during the period.
2022
Opening
Balance
Granted during
the period
Exercised
during the
period
Closing Balance
Directors
Mr Matthew Fahey 3,000,000
Mr Nicholas Ong
2,552,000
1,500,000
Mr David Vilensky
Ms Winnie Lai Hadid 1,500,000
Mr Jason Gomersall 1,500,000
10,052,000
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
2,552,000
1,500,000
1,500,000
1,500,000
10,052,000
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)
Payments for legal fees from Bowen Buchbinder Vilensky (director-related entity
of David Vilensky)
2022
$
2021
$
54,000
56,788
172,124
26,033
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)
2022
$
2021
$
14,850
9,900
13
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
DIRECTORS’ REPORT
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:
Profit/(loss)
for the year
Closing Share
Price
KMP
Incentives
Total KMP
Remuneration
2022
2021
2020
2019
2018
$330,522
$(3,984,788)
$(705,964)*
$(2,791,622)
$(14,713,402)
6.6 cents
12.5 cents
11.0 cents
11.0 cents
14.0 cents
$(402,465)
$1,241,581
$400,030
$342,538
$1,105,537
$239,289
$1,823,273
$921,203
$1,138,252
$1,734,754
* Restated loss for the year.
End of Audited Remuneration Report
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.
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.
14
DIRECTORS’ REPORT
Performance Rights
As at the date of this report the Company has no performance rights on issue.
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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.
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 – Due Diligence Report
Total remuneration for corporate services
2022
$
2021
$
152,500
152,500
95,000
95,000
95,000
95,000
-
-
15
DIRECTORS’ REPORT
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
AUDITOR
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.
AUDITOR’S INDEPENDENCE DECLARATION
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 2022
16
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
As lead auditor for the audit of the financial report of Vonex Limited for the year ended 30 June 2022, I declare that,
to the best of my knowledge and belief, there have been no contraventions of:
(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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2022
TUTU PHONG
Partner
17
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
VONEX LIMITED
AS AT 30 JUNE 2022
Sales revenue
Cost of sales
Gross profit
Other revenues
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 profit/(loss) for the year
Note
2022
$
2021
$
3
5
4
5
5
5
14
33
33,616,139
18,259,243
(17,062,382)
(12,737,896)
16,553,757
5,521,347
712,922
956,278
(2,227,022)
(1,453,311)
(182,346)
(155,718)
(2,431,161)
(983,161)
(421,395)
(315,700)
(6,799,870)
(1,592,831)
(208,383)
(550,000)
(158,131)
(7,482)
(150,870)
(7,019)
809,030
(390,724)
(100,001)
(59,416)
389,938
330,522
(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)
Other comprehensive income for the year
-
-
Total comprehensive profit/(loss) for the year
330,522
(3,984,788)
Basic and diluted earnings/(loss) per share of profit/(loss)
attributable to the owners of Vonex Limited (cents per share)
9
0.11
(2.10)
The accompanying notes form part of these financial statements
18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
VONEX LIMITED
AS AT 30 JUNE 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Contract assets
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Intangibles
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
Borrowings
Lease liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Borrowings
Lease liability
Deferred tax liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2022
$
Restated*
2021
$
10
11
12
13
14
17
12
18
13
20
19
21
22
19
21
22
23
24
25
29
3,195,181
2,943,008
73,639
695,331
3,658,416
1,684,355
60,676
463,858
6,907,159
5,867,305
39,039,501
435,564
3,802
1,175,559
503,908
41,158,334
48,065,493
4,577,062
335,630
7,918
908,037
109,244
5,937,891
11,805,196
9,098,160
1,064,101
1,779,750
497,450
3,888,885
521,842
-
346,815
12,439,461
4,757,542
126,610
12,222,996
1,162,181
2,829,704
16,341,491
28,780,952
19,284,541
121,031
-
648,513
702,171
1,471,715
6,229,257
5,575,939
65,912,270
3,085,718
(49,713,447)
50,442,160
5,177,748
(50,043,969)
19,284,541
5,575,939
*Refer to Note 34 for detailed information on restatement of comparatives.
The accompanying notes form part of these financial statements.
19
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Issued
Capital
$
Accumulated
Losses
$
Reserves
$
Total
$
At 1 July 2020
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
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
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
options,
-
-
(3,984,788)
(3,984,788)
-
-
(3,984,788)
(3,984,788)
1,478,210
20,000
-
-
1,301,785
-
-
-
-
-
-
(20,000)
3,904
1,478,210
-
3,904
1,269,776
1,269,776
(1,301,785)
-
5,084
(5,084)
-
50,442,160
-
(50,043,969)
-
5,177,748
-
5,575,939
-
-
At 1 July 2021
50,442,160
(50,043,969)
5,177,748
5,575,939
Comprehensive income:
Profit for the year
Total comprehensive income / (loss) for
the year
-
-
330,522
330,522
in
of
trade
issued
issued
settlement
in settlement of
Transactions with owners, in their
capacity as owners
Shares issued during the year
Shares
payables – extinguishment of liabilities
Shares
advertising/marketing activities
Shares issued in acquisition settlement of
Voiteck Pty Ltd
Shares issued in settlement of employee
benefits – extinguishment of liabilities
Conversion of performance
rights
ordinary shares
Forfeited performance rights
Capital raising costs
At 30 June 2022
to
13,999,986
268,240
21,317
548,157
22,500
1,260,500
-
(650,590)
65,912,270
-
-
-
-
-
-
330,522
330,522
13,999,986
268,240
21,317
548,157
22,500
(1,260,500)
-
-
-
-
-
-
-
-
(49,713,447)
(831,530)
-
3,085,718
(831,530)
(650,590)
19,284,541
The accompanying notes form part of these financial statements.
20
CONSOLIDATED STATEMENT OF CASH FLOWS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CASH FLOWS FROM OPERATING ACTIVITES
Receipts from customers
Payments to suppliers and employees
Research and development tax offset
Government grants
Interest received
Interest paid
Net cash provided by/(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 aquisiton
Payment to acquire business
Transction costs for business combinations
Proceeds from disposal of property, plant and equipment
Proceeds from/(Repayment of) loans
Net movement in bonds
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from application funds held in trust, net of costs
Proceeds from borrowings
Payments for capital raising costs
Payment of transaction and finance costs
Net repayment of borrowings
Leasing payments
Net cash cash provided by/(used in) financing activities
Note
2022
$
2021
$
28
34
33,229,199
(28,319,239)
485,715
11,125
309
(77,990)
5,329,119
17,223,379
(18,221,230)
541,661
163,570
1,090
(50,864)
(342,394)
-
(153,422)
(283,843)
(30,356,017)
(569,950)
423
-
-
(31,362,809)
13,999,986
16,000,000
(644,330)
(2,015,081)
(1,500,000)
(270,310)
25,570,265
70,000
(161,021)
(136,869)
(334,367)
-
1,137
329
(75,680)
(636,471)
-
-
(173,644)
(173,644)
Net 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
(463,425)
3,658,416
190
3,195,181
(1,152,509)
4,811,798
(873)
3,658,416
10
The accompanying notes form part of these financial statements.
21
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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 2022.
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.
22
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Principles of Consolidation
(a)
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 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.
23
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Income Tax
(c)
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 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.
24
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
(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.
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.
25
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
(d) Plant and Equipment (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Impairment of Assets
ii.
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.
(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
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.
Other long-term employee benefits
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.
26
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
(g) Investments and other financial assets
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part
of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification is
determined based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.
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
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.
Impairment of financial assets
3.
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.
(h) Cash and Cash Equivalents
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.
27
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
(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.
Rendering of telecommunications services
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.
Sale of goods
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 they assets are substantially ready for their intended use of sale.
28
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
(k) Borrowing Costs (continued)
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.
(l) Goods and Services Tax (“GST”)
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.
(m) Trade and other payables
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) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing
rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price
of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in
which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
(p) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
29
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1: Statement of Significant Accounting Policies (continued)
(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.
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.
30
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 1:
Statement of Significant Accounting Policies (continued)
(s) Intangibles (continued)
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.
Customer & Supply contracts (Nextel)
The customer and supply contract is being amortised on a straight-line basis on contract terms 5 years. The
residual values and useful lives are reviewed annually at each balance date and adjusted, if appropriate.
Customer contracts & Channel Partners (MNF)
The customer and supply contract is being amortised on a straight-line basis over two period dependent on
contract terms 5 years and customer attrition related to Channel Partners of 12 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.
31
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
(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) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the
statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for
an equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis
until extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised
as a finance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and
included in shareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the
conversion option is not remeasured in the subsequent years. The corresponding interest on convertible notes is
expensed to profit or loss.
(x) 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
2022. There is no material impact of these new or amended Accounting Standards and Interpretations.
(y) Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business. As at
30 June 2022, the Group had net current liabilities of $5,532,302.
Whilst the above condition indicates a material uncertainty which may cast significant doubt over the Group’s
ability to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in
the normal course of business and at the amounts stated in the financial report, the Directors believe that there
are reasonable grounds to believe that the Group will be able to continue as a going concern, after consideration
of the following factors:
• The Directors expect the Group’s Retail and Wholesale segments will continue to trade profitably;
• Cashflows from operating activities generated $5,329,119 cashflow for the year ended 30 June 2022 and is
expected to increase;
• The Group completed its final deferred payment relating to the MNF acquisition in August 2022 and as a result
the Group's net cash flow will now improve by $833k per month; and
• The Group has the ability to raise capital through the issue of equity
On this basis, the Directors are of the opinion that the financial statements should be prepared on a going concern
basis and that the Group will be able to pay its debts as and when they fall due and payable.
Should the Group be unable to continue as a going concern it may be required to realise its assets and discharge
its liabilities other than in the normal course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating to the recoverability and classification
of asset carrying amounts or the amount of liabilities that might result should the Group be unable to continue as
a going concern and meet its debts as and when they fall due.
32
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 2:
Critical Estimates
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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 33 for further details).
Impairment
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.
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.
Refer to note 25 for further information.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the
particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset
is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a
number of key estimates and assumptions.
Business combinations
As discussed in note 1, business combinations are initially accounted for on a provisional basis. The fair value of
assets acquired, liabilities and contingent liabilities assumed are initially estimated by the consolidated entity taking
into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the
business combination accounting is retrospective, where applicable, to the period the combination occurred and
may have an impact on the assets and liabilities, depreciation and amortisation reported.
33
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 3: Revenue
Revenue from customers
Sales revenue
Disaggregation of revenue
The disaggregation of revenue from customers is as follows:
2022
$
2021
$
33,616,139
18,259,243
Consolidated - 30 June 2022
Major service lines
Telephony
Internet
Hardware
Infrasructure/Projects/Support
Hosted PBX
Geographical regions
Australia
United States of America
Consolidated - 30 June 2021
Major service lines
Telephony
Internet
Hardware
Infrastructure/Projects/Support
Hosted PBX
Geographical regions
Australia
United States of America
Note 4: 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
Retail
$
Wholesale
Corporate
$
$
Total
$
17,208,024
4,934,101
470,504
536,119
-
4,684,860
4,017,866
70,683
-
1,693,982
23,148,748
10,467,391
23,148,748
-
10,453,221
14,170
23,148,748
10,467,391
-
-
-
-
-
-
-
-
-
21,892,884
8,951,967
541,187
536,119
1,693,982
33,616,139
33,601,969
14,170
33,616,139
Retail
$
Wholesale
Corporate
$
$
Total
$
6,049,139
2,567,436
707,482
106,103
-
2,309,863
4,895,422
73,050
-
1,550,748
9,430,160
8,829,083
9,430,160
-
8,788,318
40,765
9,430,160
8,829,083
-
-
-
-
-
-
-
-
8,359,002
7,462,858
780,532
106,103
1,550,748
18,259,243
18,218,478
40,765
18,259,243
2022
$
2021
$
351
485,715
32,232
-
64,005
173
130,446
712,922
1,091
541,661
42,788
150,000
21,864
78,683
120,191
956,278
34
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 5: Profit/(Loss) for the year
Profit/(Loss) before income tax includes the following specific expenses
2022
$
2021
$
Expenses
Cost of sales
Cost of sales
Depreciation
Leasehold improvements
Plant and equipment
Office and computer equipment
Motor vehicles
Licenses and development
Land and buildings right-of-use assets
Plant and equipment right-of-use assets
Total depreciation
Amortisation
Patents and trademarks
Customer list
Customer and supplier contracts
Total amortisation
Finance costs
Interest and finance charges payable/paid on lease liabilities
Interest charges on insurance premium funding and credit cards
Interest charges on Longreach debt facility
Total finance costs
Superannuation expenses
Employee superannuation expense
Directors superannuation expense
(17,062,382)
(12,737,896)
(12,226)
(7,696)
(81,119)
(14,432)
(379)
(255,398)
(50,145)
(8,848)
(7,747)
(45,989)
(6,289)
-
(232,010)
(20,442)
(421,395)
(321,325)
(886)
(72,082)
(1,380,343)
(9,949)
(72,082)
(454,773)
(1,453,311)
(536,804)
(58,451)
(16,791)
(1,517,589)
(49,808)
(9,149)
-
(1,592,831)
(58,957)
(573,475)
(28,700)
(296,003)
(26,220)
Total superannuation expensea
(602,175)
(322,223)
35
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 6:
Income Tax Expense
Income Tax Expense
(a)
Current tax expense
Deferred tax expense/(benefit)
Income tax expense/(benefit)
Reconciliation
(b)
The prima facie tax on the loss is reconciled to income tax expense as follows:
Loss for the year
Prima facie tax expense at 25% (2021:25%)
Non-deductible expenses
Non-assessable income
Deferred tax asset not brought to account
Income tax benefit
2022
$
2021
$
-
(389,938)
(389,938)
-
(125,595)
(125,595)
(59,416)
(4,110,383)
(14,854)
(1,027,596)
127,185
(323,686)
(178,583)
(389,938)
531,720
(37,500)
407,781
(125,595)
(c) Deferred Tax Asset
Deferred tax asset not brought to account comprises the future benefits at applicable tax rates:
Tax losses – revenue (resident)
Accruals and provisions
Business related costs
Other
(d) Deferred Tax Liabilities
Deferred tax liability of $2,829,704 (2021: $702,171)*.
2022
$
5,027,947
493,452
180,760
(296,614)
5,405,545
2021
$
5,364,624
210,967
-
(86,805)
5,488,785
Resident tax losses calculated at the Australian income tax rate of 25% (2021:25%).
The deferred tax 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 34 for detailed information on restatement of comparatives.
36
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 7: 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
Note 8: Auditors’ Remuneration
Remuneration of the auditor:
- auditing or reviewing the financial report
- other services
Note 9: Earnings per Share
Profit/(Loss) for the year
2022
$
2021
$
584,960
56,794
(402,465)
239,289
531,722
49,970
1,241,581
1,823,273
2022
$
2021
$
152,500
95,000
247,500
95,000
-
95,000
2022
$
330,522
2021
$
(3,984,788)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic loss per share
No. Shares
309,315,492
No. Shares
189,358,459
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 10: Cash and Cash Equivalents
Cash on hand
Cash at bank
2022
$
2021
$
1,554
3,193,627
3,195,181
1,352
3,657,064
3,658,416
37
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 11: Trade and Other Receivables
CURRENT
Trade debtors
Less: Allowance for expected credit losses
Other debtors
2022
$
2021
$
2,014,588
(431,548)
1,583,040
1,112,865
(66,106)
1,046,759
1,359,968
2,943,008
637,596
1,684,355
Allowance for expected credit losses
The consolidated entity has recognised a loss of $155,718 ($38,089 bad debts, and $117,629 doubtful debts) in
profit or loss in respect of the expected credit losses for the year ended 30 June 2022.
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 2022
%
Carrying
amount
Allowance
for expected
credit losses
2022
2022
$
$
0%
11%
100%
1,411,553
192,682
410,353
2,014,588
-
21,195
410,353
431,548
Movements in the allowance for expected credit losses (2022: provision for impairment of receivables) are as
follows:
Reconciliation:
Opening balance
Additions
MNF acquisition
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2022
$
2021
$
66,106
159,123
244,408
(38,089)
431,548
43,635
25,775
-
(3,304)
66,106
38
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 12: 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 13: Other Assets
CURRENT
Bonds/deposits paid/receivables
Works in progress
Loans
Inventory
Prepayments
Leasing receivables
NON-CURRENT
Bonds/deposits paid/receivables
Leasing receivables
2022
$
2021
$
73,639
60,676
3,802
7,918
68,594
94,745
(85,898)
77,441
88,015
115,536
(134,957)
68,594
2022
$
2021
$
-
-
9,415
269,183
349,431
67,302
695,331
148,932
354,976
503,908
38,500
43,942
-
94,926
286,490
-
463,858
109,244
-
109,244
39
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 14: Intangible assets
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Intangible assets – provisionnaly acquired (Voiteck)
Less: Accumulated amortisation
Customer contracts (Nextel)
Less: Accumulated amortisation
Goodwill (2SG & Nextel & MNF)
Less: Impairment
IPVD customer list
Less: Accumulated amortisation
Acquisition of IP (Oper8tor)
Less: Impairment
Customer & Supply contracts (2SG)
Less: Accumulated amortisation
Customer and Channel partnership contracts (MNF)
Less: Accumulated amortisation
Patents and trademarks - at cost
Less: Accumulated amortisation
Domain name acquisition
*Refer to Note 34 for detailed information on restatement of comparatives.
Restated*
2022
2021
3,959,471
-
3,959,471
-
-
-
278,648
(78,284)
200,364
278,648
-
278,648
25,649,436
(550,000)
25,099,436
1,857,480
-
1,857,480
720,081
(660,479)
59,602
-
-
-
720,081
(588,397)
131,684
600,000
(600,000)
-
2,908,977
(1,061,137)
1,847,840
2,908,977
(606,364)
2,302,613
8,714,324
(847,286)
7,867,038
-
-
-
222,130
(218,451)
3,679
222,130
(217,564)
4,566
2,071
2,071
2,071
2,071
39,039,501
4,577,062
40
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 14: Intangible assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
Customer list
Goodwill
Balance at 30 June 2020
203,766
524,140
Additions/(Disposal)
Amortisation expense
Impairment expense (i)
Balance at 30 June 2021
Re-allocation of provisionally acquired
intangible assets
-
(72,082)
-
-
131,684
524,140
-
1,333,340
Restated as at 30 June 2021
131,684
1,857,480
Additions/(Disposal)
Amortisation expense
Impairment expense (ii)
-
23,791,956
8,714,324
3,959,471
(72,082)
-
(847,286)
-
(550,000)
-
-
-
Balance at 30 June 2022
59,602
25,099,436
7,867,038
3,959,471
Customer and
Channel
Partnership
Contract -
MNF
Intangible Assets -
Provisionally
acquired (Voiteck,
Nextel Re-allocated)
Oper8tor
Patents and
trademarks
Domain
name
Customer
and Supply
contracts
(2SG)
Customer
Contracts -
Nextel
Total
4,233,417
-
1,582,106
(536,804)
(771,319)
4,507,400
-
-
-
-
-
-
-
600,000
146,054
2,071
2,757,386
-
(600,000)
39,780
(9,949)
(171,319)
-
-
-
-
(454,773)
-
4,566
2,071
2,302,613
-
-
-
-
-
-
1,542,326
-
1,542,326
(1,542,326)
-
-
-
-
-
-
-
-
-
-
278,648
69,662*
4,566
2,071
2,302,613
278,648
4,577,062
-
(887)
-
-
-
-
-
36,465,751
(454,773)
(78,284)
(1,453,312)
-
-
(550,000)
3,679
2,071
1,847,840
200,364
39,039,501
i.
ii.
During the prior 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.
During the financial year the impacts of COVID19 cotinued across Australia with many States and Territories under Government lockdown protocols. These lockdowns continued for an entended period of time,
especially on the East Coast of Australia, being a prominent area of operation that our business unit Nextel operated within and subsequently incurred a downturn in operating revenues during the reporting
period and will take sometime to recover. As a result, the Company has taken the decision to write down carrying values of the Nextel business unit.
*Refer to Note 34 for detailed information on restatement of comparatives.
41
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 14: Intangible assets (continued)
(a) Business combination – 2SG Wholesale Pty Ltd
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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.
(b) Business combination – Voiteck – Direct Business
On 4 January 2022 Vonex Ltd, acquired Voiteck Pty Ltd (‘Voiteck’). On 4 January 2022, Voiteck is an Adelaide, SA
based business providing voice and internet services to small to medium enterprise (SME) customers. The
intangible assets of $3,959,471 launches Vonex into a new geographic region providing a branded physical
presence from which the combined group can pursue growth in the SA market. The fair values of Voiteck’s
intangible assets have been measured provisionally.
(c) Business combination – MNF Limited – Direct Business
On 9 August 2021 Vonex Ltd, acquired part of the Direct Business from MNF Group Ltd (‘MNF’). The Direct
Business sells cloud phone, internet and mobile services to SME and residential customers in Australia. The
Acquisition will materially expand Vonex's footprint of SME and residential customers and will see the Company
migrate approximately 5,250 new business customers to its platform along with providing a strong platform for
organic growth in the Australian telecommunications market through cross-selling internet and mobility products to
Direct Business customers.
The intangible assets of $32,506,280, exclusive of a provisional deferred tax liability of $2,517,471, represents
Vonex’s expansion and brand exposure within all regions of the telecommunications market within Australia. The
purchase price allocation includes Customer Contracts and Channel Partnerships being amortised on a straight-line
basis.
(d) Business combination – Nextel Pty Ltd – Direct Business
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 $1,611,988 represents a strategic 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 purchase price was recalculated during the reporting period and the comparative balances
restated. The recalculation of the acquisition gave rise to a deferred tax liability of $69,662 in respect of this
acquisition and $1,333,340 of goodwill. The customer contracts of $278,648 is being amortised on a straight-line
basis over a 5 year period.
42
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 14: Intangible assets (continued)
Key Assumptions Used for Value-in-Use Calculations
The recognition of Goodwill acquired through business combinations of 2SG, Nextel and Direct Business of MNF
have been allocated to the following cash-generating unit (CGU):
➢ 2SG
➢ Direct Business of MNF
➢ Nextel
The recoverable amount of the consolidated entity’s goodwill has been determined on the basis of value-in-use
(VIU) calculation using discounted cashflow models, based on 3 year projections approved by management and
extrapolated for a further 2 years using a a steady rate.
The following describes the assumptions on which management has based its cash flow projections when
determining value in use for 2SG:
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 6%.
Discount rate
For the 2SG CGU, the pre-tax discount rate applied to cash flow projections is 17.1%.
Cash flows
Value-in-use calculations use cash flow projections from approved budgets based on past performance and
expectationse on future earnings.
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 2, 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 2.55% or lower before goodwill would need to be imparied,
with all other assumptions remaining constant or
➢ The pre-tax discount rate would be required to significantly increase before goodwill would need to be
impaired, with all other assumptions remaining constant.
➢
The following describes the assumptions on which management has based its cash flow projections when
determining value in use for Nextel:
Revenue growth rate
The growth rate represents an indexation rate which does not exceed management's expectations of the long
term average growth rate for the business in which each CGU operates. Flat growth in the CGU for year one,
giving the CGU an opportunity to build after the affects of COVID19 during FY22 and the rate applied in the cash
flow projection is 6.2% for years two and three.
43
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Discount rate
For the Nextel CGU, the pre-tax discount rate applied to cash flow projections is 16.0%.
Note 14: Intangible assets (continued)
Cash flows
Value-in-use calculations use cash flow projections from approved budgets based on past performance and
expectations on future earnings.
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 a recovery from the impact of COVID19 on
the CGU and rebuilding infrasture and project related revenue pipelines to the levels achieved pre COVID19.
There were not other key assumptions for the Nextel CGU.
Based on the above, an impairment charge of $550,000 has been applied as the carrying amount of goodwill
exceeded its recoverable amount.
If there are any negative changes in key assumptions on which the recoverable amount of goodwill is based, this
would result in a futher impairment charge to the CGU.
The following describes the assumptions on which management has based its cash flow projections when
determining value in use for Direct Business of MNF:
Revenue growth rate
The growth rate represents an indexation rate which does not exceed management's expectations of the long
term average growth rate for the business in which each CGU operates. An average rate applied in the cash flow
projection is 10.3%.
Discount rate
For the Direct Business of MNF CGU, the pre-tax discount rate applied to cash flow projections is 19.5%.
Cash flows
Value-in-use calculations use cash flow projections from approved budgets based on past performance and
expectations on future earnings.
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 retail customer base to sustain growth.
Sensitivities
As disclosed in Note 2, 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 would need to decline at a rate of 4.2% year on year or greater before goodwill would need to be
imparied, with all other assumptions remaining constant or;
The pre-tax discount rate would be required to significantly increase before goodwill would need to be
impaired, with all other assumptions remaining constant.
44
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 15: 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)
Voiteck Pty Ltd (ABN 45 139 880 952)
Country of
incorporation
AUS
AUS
AUS
AUS
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ownership Interest
2021
2022
100%
100%
100%
100%
100%
100%
-
100%
Subsidaries of Voiteck Pty Ltd
Voiteck Mobile Pty Ltd (ABN 73 616 534 466)
Subsidiaries of IP Voice and Data Pty Ltd
Itrinity Australia Pty Ltd (ACN 131 196 886)
AUS
Ordinary
100%
-
AUS
Ordinary
100%
100%
Note 16: 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
2022
2021
$
$
3,052,879
39,819,887
42,872,766
3,392,528
4,536,435
7,928,963
4,945,848
25,105,353
30,053,965
12,818,801
775,796
2,301,389
3,077,185
4,851,778
134,904,504
3,069,655
(125,155,358)
119,434,394
5,161,685
(119,744,301)
12,818,801
4,851,778
(5,413,335)
-
(5,413,335)
(3,912,144)
-
(3,912,144)
45
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 16: Parent Entity Disclosures (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Guarantees
Vonex Ltd entered into a parental guarantee in the previous financial year for one of its subsidiaries in connection
with Wholesale Broadband services being acquired from NBN Co. The Guarantee remains in place.
Commitments for expenditure
Vonex Ltd has no commitments to acquire property, plant and equipment, and has no contingent liabilities (2021:
nil).
Note 17:
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
2022
$
2021
$
107,097
(28,497)
78,600
89,257
(16,271)
72,986
123,650
(83,682)
39,968
115,021
(75,986)
39,035
774,464
(538,455)
236,009
520,612
(367,214)
153,398
268,360
(258,527)
9,833
249,587
(249,587)
-
117,580
(46,426)
71,154
76,500
(6,289)
70,211
Total plant and equipment
435,564
335,630
46
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 17:
Plant and Equipment (continued)
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
Licences &
Development
Motor
Vehicles
Balance at 1 July 2020
Additions
Disposal / Write off
Depreciation
Carrying amount at 30
June 2021
24,600
57,333
(99)
(8,848)
43,109
6,724
(3,051)
(7,747)
133,492
66,156
(261)
(45,989)
72,986
39,035
153,398
-
-
-
-
-
-
76,500
-
(6,289)
70,211
335,630
Leasehold
Improvements
Plant &
Equipment
Office &
Computer
Licences &
Development
Motor
Vehicles
Balance at 1 July 2021
Additions
Disposal / Write off
Additions via
acquistion
Depreciation
Carrying amount at 30
June 2022
72,986
12,100
-
5,740
(12,226)
39,035
8,629
-
-
(7,696)
153,398
151,312
(8,275)
20,693
(81,119)
-
-
-
70,211
-
-
10,212
(379)
15,375
(14,432)
52,020
(115,852)
78,600
39,968
236,009
9,833
71,154
435,564
Total
201,201
206,713
(3,411)
(68,873)
Total
335,630
172,041
(8,275)
Note 18:
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
2022
$
2021
$
1,462,747
(454,803)
1,007,944
1,323,695
(458,680)
865,015
251,659
(84,044)
167,615
79,333
(36,311)
43,022
1,175,559
908,037
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 $736,555.
The consolidated entity leases equipment under agreements of less 4 years or less.
47
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 19:
Provisions
CURRENT
Annual leave
Long service leave
NON-CURRENT
Long service leave
Make good
2022
2021
$
$
581,078
483,023
1,064,101
94,786
31,824
126,610
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
2022
$
2021
$
642,873
844,801
(296,963)
531,407
358,238
(246,772)
Carrying amount at the end of the year
1,190,711
642,873
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.
Note 20: Trade and Other Payables
Trade payables
PAYG withholding
GST
Superannuation guarantee
Contingent consideration - Voiteck
Deferred consideration - Voiteck
Deferred consideration - MNF
Other payables and accruals
Trade creditors are expected to be paid within agreed terms.
2022
$
2021
$
4,376,572
157,074
338,504
203,557
760,000
666,000
833,333
1,763,120
9,098,160
3,128,712
87,943
66,726
87,619
-
-
-
517,885
3,888,885
48
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 21: Borrowings
CURRENT
Loan – Secured
Accrued interest expense
Capitalised borrowing costs
NON-CURRENT
Loan – Secured
Capitalised borrowing costs
2022
$
2021
$
2,000,000
56,110
(276,360)
1,779,750
12,500,000
(277,004)
12,222,996
-
-
-
-
-
-
-
Assets pledged as security
The loan is secured via a first ranking general security interest over the business.
The key terms of the secured loan are as follows:
Maturity:
3 years
Principal repayments:
$500,000 per quarter commencing 15 December 2021
Security:
First ranking General Security Interest
Key covenants:
Interest costs:
Net leverage cover, interest cover, debt service cover and minimum
cash at bank
The interest rate payable depends on the prevailing net debt / pro forma
Last Twelve Months (“LTM”) EBITDA.
Assets pledged as security
The loan is secured via a first ranking general security interest over the business.
Note 22: Lease Liability
CURRENT
Chattel mortgage leases
Lease liability
NON-CURRENT
Chattel mortgage leases
Lease liability
Refer to Note 32 for further information on financial instruments.
.
2022
2021
42,444
455,006
497,450
-
1,162,181
1,162,181
42,926
303,889
346,815
42,444
606,069
648,513
49
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 23: Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Amounst recognised in profit or loss:
Intangible assets
Deferred tax liability
Movements:
Opening balance
Charged/(credited) to profit or loss
Additions through business combinations (Note 34)
Closing balance
2022
$
2021
$
2,829,704
702,171
2,829,704
702,171
702,171
(389,938)
2,517,471
758,104
(125,595)
69,662*
2,829,704
702,171
*Refer to Note 34 for detailed information on restatement of comparatives.
Note 24: Issued Capital
2022
2021
$
No.
$
No.
Fully paid ordinary shares
65,912,270
333,521,134
50,442,160
193,133,473
Movement in ordinary shares
Balance at 30 June 2020
$
No.
47,642,165
170,922,309
Issue price
$
Issue of shares on placement
Issue of shares on conversion of Vodia
performance rights
Issue of shares to settle service provider and
for employee entitlements
Issue of shares to settle acquisition of Nextel
01/07/2020
1,400,000
14,736,843
01/07/2020
20,000
100,000
21/09/2020
220,513
1,750,000
03/02/2021
1,238,129
5,502,795
Issue of shares to settle service provider
14/05/2021
Capital raising costs
Balance at 30 June 2021
19,569
(98,216)
121,526
50,442,160
193,133,473
Shares issued – placement
30/07/2021
2,475,226
22,502,051
Shares issued – share purchase plan
18/08/2021
1,999,985
18,181,485
Shares issued – placement
03/09/2021
9,524,775
86,588,857
Conversion of performance rights
Shares issued in settlement of employee
benefits and to settle trade creditors
Issue of shares to settle acquisition of Voiteck
Issue of shares to settle service provider
Capital raising costs
Balance at 30 June 2022
09/09/2021
1,260,500
5,490,000
19/10/2021
290,740
2,456,657
05/01/2022
13/01/2022
548,157
21,317
(650,590)
4,983,246
185,365
65,912,270
333,521,134
0.095
0.20
0.126
0.225
0.161
0.11
0.11
0.11
0.229
0.12
0.11
0.115
50
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 24: Issued Capital (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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 consolidated entity monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided
by total capital. Net debt is calculated as total borrowings (including ‘trade and other payables’ and ‘borrowings’
as shown in the statement of financial position) less ‘cash and cash equivalents’ as shown in the statement of
financial position. Total capital is calculated as ‘total equity’ as shown in the statement of financial position plus
net debt.
The gearing ratios at 30 June 2022 and 30 June 2021 are as follows:
Total borrowings (including trade and other payables)
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Note 25: 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.
2022
$
2021
$
23,100,905
(3,195,181)
19,905,724
19,284,541
39,190,265
3,888,885
(3,658,416)
230,469
5,575,939
5,806,408
2022
$
2021
$
18,506
3,067,212
-
-
3,085,718
18,506
3,067,212
2,092,030
-
5,177,748
2022
$
2021
$
18,506
-
-
18,506
14,602
3,904
-
18,506
51
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 25: Reserves (continued)
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
Balance at the beginning of the year
Expense related to performance rights issued 28 July 2017
Conversion of performance rights to ordinary shares
Write-back related to performance rights issued 28 July 2017 (see note 33)
Conversion of Vodia Performance Shares to ordinary shares
Balance at the end of the year
2022
$
2021
$
3,067,212
-
-
3,067,212
1,861,296
1,211,000
(5,084)
3,067,212
2022
$
2021
$
2,092,030
-
(1,260,500)
(831,530)
-
-
2,053,254
58,776
-
(20,000)
2,092,030
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
Transfer to ordinary share capital
Balance at the end of the year
2022
$
2021
$
-
-
-
1,301,785
(1,301,785)
-
The reserve records fund received in advance for the issue of share capital (net of associated costs).
Note 26: Contingent Liabilities and Contingent Assets
Contingent Liabilities
Contingent consideration payable for the acquisition of Voiteck Pty Ltd. Refer to Note 34 for further details.
There are no other known contingent liabilities at reporting date (2021: nil).
Contingent Assets
There are contingent assets at reporting date of $750,000 (2021: $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
52
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 27: Operating Segments
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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.
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.
53
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 27: Operating Segments (continued)
SEGMENT INFORMATION
The segment information provided to the Board of Directors for the reportable segments for the year ended 30
June 2022 and 30 June 2021 are as follows:
Segment performance
External customer sales
Other revenues
Interest received
Total segment revenues
30 June 2022
Wholesale
$
14,418,577
71,460
-
Retail
$
23,281,840
124,943
63
Corporate
$
-
516,168
288
Intercompany
transactions
$
(4,084,278)
-
-
TOTAL
$
33,616,139
712,571
351
14,490,037
23,406,846
516,456
(4,084,278)
34,329,061
EBITDA
822,822
5,434,875
(2,299,576)
-
3,958,121
Depreciation and amortisation
Impairment charges
Finance costs
(148,368)
-
(25,468)
(234,865)
-
(29,938)
(1,491,473)
(550,000)
(1,537,425)
Segmented loss before income tax
expense
Income tax benefit
Segmented profit after income tax
expense
648,986
5,170,072
(5,878,474)
-
-
389,938
648,986
5,170,072
(5,488,536)
(1,874,706)
(550,000)
(1,592,831)
(59,416)
389,938
330,522
Segment assets
Total assets
Segment liabilities
Total Liabilities
4,119,016
5,482,657
39,480,685
(1,016,865)
48,065,493
3,238,157
13,970,598
12,589,062
(1,016,865)
28,780,952
48,065,493
28,780,952
54
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 27: Operating Segments (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Segment performance
External customer sales
Other revenues
Interest received
Total segment revenues
Restated*
30 June 2021
Wholesale
$
10,416,583
164,703
404
Retail
$
9,510,901
138,398
446
Corporate
$
-
652,086
241
Intercompany
transactions
$
(1,668,241)
-
-
TOTAL
$
18,259,243
955,187
1,091
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
Impairment charges
Interest revenue
Finance costs
(109,431)
-
404
(22,589)
(235,020)
-
446
(21,386)
(513,678)
(771,319)
241
(14,982)
Segmented loss before income tax
expense
Income tax benefit
Segmented loss after income tax
expense
17,345
255,589
(4,383,317)
17,345
255,589
125,595
(4,257,722)
-
-
-
-
-
(2,423,069)
(858,129)
(771,319)
1,091
(58,957)
(4,110,383)
125,595
(3,984,788)
Segment assets
Total assets
Segment liabilities
Total Liabilities
3,253,349
3,795,398
5,190,608
(503,820)
11,735,534
2,385,018
1,179,008
3,099,389
(503,820)
6,159,595
11,735,534
6,159,595
*Refer to Note 34 for detailed information on restatement of comparatives.
55
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 28: Cash Flow Information
(a) Reconciliation of cash flows from operations with loss after Income Tax
Profit/(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 generated by/(used in) operating activities
2022
$
2021
$
330,522
(3,984,788)
1,874,706
(809,030)
7,482
155,718
58,451
-
550,000
(1,264,443)
(558,834)
547,838
4,826,647
(389,938)
5,329,119
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)
Note 29:
Accumulated losses
Accumulated losses at beginning of financial year
Net profit/(loss) attributable to members of the company at end of financial
year
Retained earnings adjustment – reversal of options valuation expired 3
August 2020
Accumulated losses at end of financial year
2022
$
(50,043,969)
2021
$
(46,064,265)
330,522
(3,984,788)
-
(49,713,447)
5,084
(50,043,969)
Note 30: Events after the Reporting Period
Subsequent to the reporting period, on 4 August 2022 the Company announced that it had paid the final monthly
cash payment to Symbio Holdings Ltd (ASX: SYM) forming part of the deferred consideration for the Company's
acquisition of part of the MyNetFone Direct Business.
Furthermore, on 30 August 2022 the Company cancelled 13,240,000 Performance Rights as a result of the
milestones being unable to be achieved in the permitted time period. The cancelled Performance Rights include:
e) 4,740,000 convertible upon the Company achieving audited net profit after tax of $1 million in a financial year;
f) 1,000,000 convertible into ordinary shares upon completion of the beta version of the Oper8tor App and
commencement of the official Oper8tor launch in Europe;
g) 2,500,000 convertible into ordinary shares upon the Oper8tor App achieving 10 million active users; and
h) 5,000,000 convertible into ordinary shares upon the Oper8tor App achieving 50 million active users.
Apart from the disclosures made within this report, no other matter or circumstance has arisen since 30 June 2022
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.
56
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 31: Related Party Transactions
Parent entity
The parent entity within the Group is Vonex Ltd.
Subsidiaries
Interests in subsidiaries are set out in note 15.
Key management personnel
Disclosures relating to key management personnel are set out in note 7.
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)
2022
$
2021
$
54,000
56,788
172,124
26,033
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)
2022
$
2021
$
14,850
9,900
Note 32: 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.
(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.
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.
57
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 32: Financial Instruments (continued)
The consolidated entity's bank loans outstanding, totalling $14,002,745 (2021: $nil), are principal and interest
payment loans. Quarterly cash outlays of approximately $500,000 (2021: $nil) per month are required to service
the principal and interest payments. An official increase/decrease in interest rates of 100 (2021: n/a) basis points
would have an adverse/favourable effect on profit before tax of $140,027 (2021: n/a) per annum. The percentage
change is based on the expected volatility of interest rates using market data and analysts forecasts. In addition,
minimum principal repayments of $2,000,000 (2021: $nil) are due during the year ending 30 June 2023.
Weighted
Average
Interest Rate
%
Floating
Interest Rate
$
Fixed
Interest Rate
Within 1 Year
$
Fixed
Interest Rate
Within 1-5
Years
$
Non-
Interest
Bearing
$
Total
$
0.03
-
3,193,627
-
3,193,627
-
0.10
-
-
-
3,193,627
-
-
-
-
-
-
-
-
-
-
1,554
2,943,008
2,944,562
3,195,181
2,943,008
6,138,189
-
14,002,745
14,002,745
(14,002,745)
9,098,160
-
9,098,160
(6,153,598)
9,098,160
14,002,745
23,100,905
(16,962,716)
Weighted
Average
Interest Rate
%
Floating
Interest Rate
$
Fixed
Interest Rate
Within 1 Year
$
Fixed
Interest Rate
Within 1-5
Years
$
Non-
Interest
Bearing
$
Total
$
0.03
-
3,657,064
-
3,657,064
-
-
-
3,657,064
-
-
-
-
-
-
-
-
-
-
-
-
1,352
1,684,355
1,685,707
3,658,416
1,684,355
5,342,771
3,888,885
3,888,885
(2,203,178)
3,888,885
3,888,885
1,453,886
2022
Financial Assets:
Cash
Receivables
Total financial assets
Financial Liabilities:
Payables
Borrowings
Total financial liabilities
Net financial assets
2021
Financial Assets:
Cash
Receivables
Total financial assets
Financial Liabilities:
Payables
Total financial liabilities
Net financial assets
Sensitivity Analysis
The effect on profit and equity as a result of changes in interest rates on net financial assets is immaterial.
58
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 32: Financial Instruments (continued)
(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
2022
$
2021
$
10
3,195,181
3,658,416
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 2022.
(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.
59
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 32: Financial Instruments (continued)
The financial asset and financial liability maturity analysis are as follows:
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Within 1 Year
1 to 5 Years
Over 5
Years
Total
2022
$
2021
$
2022
$
2021
$
2022
$
2021
$
2022
$
2021
$
Financial liabilities
Payables
Borrowings
Lease Liability
9,098,160
3,888,885
-
1,779,750
- 12,222,996
-
-
497,450
346,815
1,162,181
648,513
Total expected outflows
11,375,360
4,235,700 13,385,177
648,513
Financial assets
Cash and cash equivalents
Receivables
Total anticipated inflows
Net inflow / (outflow) on
financial instruments
3,195,181
2,943,008
3,658,416
1,684,355
6,138,189
5,342,771
-
-
-
-
-
-
(5,237,171)
1,107,071 (13,385,177)
(648,513)
-
-
-
-
-
-
-
-
-
9,098,160
3,888,885
- 14,002,746
-
-
1,659,631
995,328
- 24,760,537
4,884,213
-
-
-
3,195,181
2,943,008
3,658,416
1,684,355
6,138,189
5,342,771
- (18,622,348)
458,558
Note 33: 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 $(809,030) (2020: $1,296,776)
Share Based Payment Expense
Forfeiture of Performance Rights Valuation – 28 July 2017
Shares issued to employee
Forfeiture of Performance Rights Key Management Personnel – 28 July 2017
Performance Rights – Key Management Personnel – 28 July 2017
Performance Rights – Other Personnel – 28 July 2017
Options – Key Management Personnel
Total Share Based Payment Expense
2022
$
(756,590)
22,500
(74,940)
-
-
-
(809,030)
2021
$
-
-
-
30,582
28,194
1,211,000
1,269,776
Movement in share rights and performance shares during the period
Balance at beginning of period
Vested during the period
Balance at end of period
Performance rights granted during the period:
Total performance rights granted during the period was $nil (2021: $nil).
Number of
performance
rights
27,560,000
(14,320,000)
13,240,000
60
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 33: Share Based Payments (continued)
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:
Tranche
Number
Start Date Expected Date of
7,260,000
28/07/17
Milestone
Achievements
Vested
4,840,000
28/07/17
Vested
4,840,000
28/07/17
Expired
1
2
3
Underlying
Share Price
Total Fair
Value
$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:
a) 1,000,000 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. The performance rights expired on 28 July 2022;
b) 2,500,000 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. The performance rights expired on 28
July 2022; and
c) 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 50 million Active Users. The performance rights expired on
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.
61
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Note 33: Share Based Payments (continued)
Options granted during the period
No options were granted during the period.
The total options on issue at 30 June 2022 are as follows:
Grant date
07/06/18 (i)
30/11/17 (iI)
05/06/2019
05/06/2019
27/11/2020
Expiry
date
07/06/23
30/11/22
30/11/22
30/11/22
01/12/23
Exercise
Price
$0.30
$0.20
$0.20
$0.20
$0.37
Balance at the start
of the year
Granted Exercised
Expired/
forfeited
Balance at the
end of year
14,500,000
14,719,731
3,215,060
1,800,000
10,000,000
44,234,791
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,500,000
14,719,731
3,215,060
1,800,000
10,000,000
44,234,791
Weighted average exercise price: $0.2712
The weighted average remaining contractual life of options outstanding was 0.82 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.
62
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 34: Business Combinations
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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 $278,648 and goodwill of $1,333,340 represents new
opportunities for expanding 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 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 $69,662 in respect of this acquisition. The contracts are being
amortised on a straight-line basis over 5 years.
The values identified in relation to the acquisition of Nextel Pty Ltd are final as at 30 June 2022.
Details of the acquisition are as follows:
Other Assets
Employee benefits
Net assets acquired
Customer contracts – intangible assets
Deferred tax liability
Goodwill – intangible assets
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
Add: other assets
Less: employee benefits
Net cash used
Fair value
$
43,775
(13,604)
30,170
278,648
(69,662)
1,333,340
1,572,496
334,367
1,238,129
1,572,496
315,000
32,971
(13,604)
334,367
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
Nextel on 2 February 2021 which included provisionally recognised as intangible assets as at 30 June 2021. This
balance is related to future revenue in the customer contracts acquired. This restatement within the statement of
financial position as at 30 June 2021 has a resulted in an increase in intangible assets, an increase in deferred tax
liability.
63
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 34: Business Combinations (continued)
Extracts (being only those line items affected) are disclosed below.
Statement of financial position
Extract
Non-current Assets
Intangible assets
Total non-current assets
Total assets
Non-current liabilities
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Accumulated losses
Total Equity
2021
$
Reported
Adjustment
2021
$
Restated
4,507,400
5,868,229
69,662
69,662
4,577,062
5,937,891
11,735,534
69,662
11,805,196
632,509
1,402,053
69,662
69,662
702,171
1,471,715
6,159,595
69,662
6,229,257
5,575,939
(50,043,969)
5,575,939
-
-
-
5,575,939
(50,043,969)
5,575,939
64
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 34: Business Combinations (continued)
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Direct Business from MNF Group Ltd
On 9 August 2021, Vonex Ltd acquired part of the Direct Business from the MNF Group Ltd (“MNF”). The Direct
Business sells cloud phone, internet and mobile services to small-to-medium enterprise (SME) and residential
customers in Australia. The acquisition will materially expand Vonex's footprint of SME and residential
customers The intangible assets of $32,506,280 represents a substantial enhancement of Vonex's presence
and will see the Company migrate approximately 5,250 new business customers to its platform. The acquisition
is seen as highly complementary, as Vonex has strong existing capabilities across most of the products and
services offered by the Direct Business. The businesses also operate under the same revenue model,
predominantly charging on a fully inclusive monthly subscription basis. The Direct Business contributed
revenues of $11,580,677 and profit after tax of $5,125,412 to the consolidated entity for the period from 9
August 2021 to 30 June 2022. If the acquisition occurred on 1 July 2021, the full year contributions would have
been revenues of $13,046,133 and profit after tax of $5,773,998.
The values identified in relation to the acquisition of Direct Business are final as at 30 June 2022.
Details of the acquisition are as follows:
Receivables
Accounts in Credit
Inventory
Other assets
Office equipment
Other payables
Employee benefits
Net assets acquired
Customer contracts – intangible assets
Channel partnerships – intangible assets
Deferred tax liability
Goodwill – intangible assets
Fair value
$
452,160
(375,702)
111,508
3,000
22,694
(43,472)
(158,997)
11,191
8,134,449
579,875
(2,517,471)
23,791,956
Acquisition-date fair value of the total consideration transferred
30,000,000
Representing:
Cash paid or payable to vendor
Upfront consideration
Deferred consideration
Less: Wholesale Pricing Credit
Acquisition costs capitalised
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Deferred payments paid to 30 June 2022
Less: cash acquired
Net cash used
20,000,000
11,000,000
(1,000,000)
30,000,000
20,000,000
8,333,333
(6,248)
28,327,085
65
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 34: Business Combinations (continued)
Voiteck Pty Ltd
On 4 January 2022, Vonex Ltd acquired the business of Voiteck Pty Ltd (‘Voiteck’). Voiteck is an Adelaide, SA
based business providing voice and internet services to small to medium enterprise (SME) customers. The
intangible assets of $3,959,470 launches Vonex into a new geographic region providing a branded physical
presence from which the combined group can pursue growth in the SA market. The acquired business
contributed revenues of $1,563,546 to the consolidated entity for the period from 4 January 2022 to 30 June
2022. If the acquisition occurred on 1 July 2021, the full year contributions would have been revenues of
$3,399,309 and profit after tax of $385,178.
Details of the acquisition are as follows:
Cash
Receivables
Other assets
Inventory
Property, plant and equipment
Other payables
Employee benefits
Net assets acquired
Intangible assets
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid to vendor
Shares issued to vendor
Contingent consideration
Deferred consideration
Acquisition costs capitalised
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash acquired
Net cash used
Fair value
$
147,288
442,154
653
51,375
33,741
(510,483)
(122,358)
42,370
3,959,470
4,001,840
2,028,932
548,154
758,754
666,000
4,001,840
2,028,932
(147,288)
1,881,644
A component of the contingent and deferred consideration is due to be settled through issuance of Ordinary Shares
in Vonex Lmited totaling 20% of the total consideration. The remaining 80% of the consideration is due to be settled
in cash.
The fair values of Voiteck 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.
66
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
Note 35: Non-cash investing and financing activities
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
Additions to the right-of-use assets
Leasehold improvements – lease make good
Shares issued is part of employee benefits
2022
$
736,555
(20,810)
22,500
738,245
2021
$
277,290
24,183
20,513
321,986
Note 36: Changes in liabilities arising from financing activities
Balance at 1 July 2020
Net cash used in financing activities
Acquisition of leases
Other
Balance at 30 June 2021
Net cash used in financing activities
Acquisition of leases
Cessation of leases
Other
Balance at 30 June 2022
Loans
$
-
-
-
-
-
14,002,746
-
-
-
14,002,746
Convertible
notes Lease liability
$
950,500
33,895
198,050
(187,117)
$
-
-
-
-
Total
$
950,500
33,895
198,050
(187,117)
-
-
-
-
-
995,328
995,328
(312,334)
1,148,364
(171,728)
-
13,690,412
1,148,364
(171,728)
-
1,659,630
15,662,376
Note 37: Commitments
The Group has no commitments other than those disclosed in the accounts (2021: nil).
Note 38: Company Details
The registered office is:
- Level 8, 99 St Georges Terrace, Perth, WA, 6000
The principal place of business is:
-
Level 6, 303 Coronation Drvie, Milton, QLD, 4064
67
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
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 2022 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 2022
68
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
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney, Melbourne,
Adelaide and Canberra
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
ADDITIONAL INFORMATION
SHAREHOLDER INFORMATION (as at 19 August 2022)
(i) Number of shareholders: 2,961
(ii) Ordinary shares issued: 333,521,134
(iii) Distribution schedule of holdings of ordinary shares is set out below
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
Holders
198
596
574
1,233
360
2,961
Total Units
53,426
2,097,711
4,533,237
44,295,242
282,541,518
333,521,134
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.
TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES AT 19 August 2022
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
BNP PARIBAS NOMS PTY LTD
2SG INVESTMENTS PTY LTD
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
FINANCE WEST PTY LTD
JAG CAPITAL INVEST PTY LTD
MR MATTHEW BRIAN MICHAEL FAHEY
GUAVA CAPITAL PTY LTD
JET CLUB PTY LTD
JPOB INVESTMENTS PTY LTD
MS TOW LOY SUN
PLSM HOLDINGS PTY LTD
PULA HOLDINGS PTY LTD
SKUA INVESTMENTS PTY LTD
SUPER JG PTY LTD
26,872,621
26,760,756
24,909,149
11,627,320
10,532,430
8,150,000
5,633,698
5,236,808
4,466,274
3,954,579
3,715,454
3,650,000
3,072,727
3,000,261
2,954,546
8.06
8.02
7.47
3.49
3.16
2.44
1.69
1.57
1.34
1.19
1.11
1.09
0.92
0.90
0.89
ADDITIONAL INFORMATION
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
16
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LATERAL CONSULTING (WA) PTY LTD
EARGLOW PTY LIMITED
MR GREGORY ROSS KING & MS SUZANNE DAWN
KING
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
(Total)
Total Remaining Holders Balance
Total Shares on Issue
2,916,792
2,653,528
2,239,381
2,100,000
2,073,599
0.87
0.80
0.67
0.63
0.62
156,519,923
46.93%
177,001,211
53.07%
333,521,134
100%
SUBSTANTIAL SHAREHOLDERS
As at 19 August 2022, shareholders with a relevant interest in 5% or more of the Company’s
securities are set out below:
No. of Shares
%
Interest
Holder
26,872,621
26,760,756
24,909,149
8.06 BNP PARIBAS NOMS PTY LTD
8.02 2SG INVESTMENTS PTY LTD
7.47 CS THIRD NOMINEES PTY LIMITED
UNQUOTED SECURITIES
Set out below are the classes of unquoted securities currently on issue:
Number
14,500,000
19,734,791
10,000,000
13,240,000
Class
options exercisable at 30¢ expiring 7/6/2023
options exercisable at 20¢ expiring 30/11/2022
options exercisable at 37c expiring 30/11/2023
performance rights with various vesting milestones
Unquoted Equity Security Holders with Greater than 20% of an Individual Class
As at 19 August 2022 the following classes of unquoted securities had holders with greater than
20% of that class on issue is set out below.
Options exercisable at 30¢ expiring 30/11/2023
% Interest
MR MATTHEW BRIAN MICHAEL FAHEY
QUPIT PTY LTD
Options exercisable at 30¢ expiring 7/6/2023
CODE NOMINEES PTY LTD
STATE ONE EQUITIES PTY LTD
Performance Rights
MR MATTHEW FAHEY
30.00
25.00
% Interest
64.83%
28.74%
% Interest
64.19%
ON-MARKET BUYBACK
Currently there is no on-market buy-back of the Company’s securities.
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022
ADDITIONAL INFORMATION
SECURITIES SUBJECT TO ESCROW
Set out below are securities currently subject to escrow
Number
4,983,246
Class
Ordinary fully paid shares escrowed between 04/01/2023 and 04/01/2024
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://investors.vonex.com.au/corporate-governance/
ADDITIONAL INFORMATION
VONEX LIMITED
FOR THE YEAR ENDED 30 JUNE 2022