Company Registration No. 02649163 (England and Wales)
Vix AFC Limited
Annual report and Financial Statements
For the Year Ended 30 June 2023
Vix AFC Limited
Contents
For the Year Ended 30 June 2023
Page
Strategic Report
1
Directors' Report
3
Independent Auditor's Report
7
Consolidated Statement of Profit or Loss and Other Comprehensive Income
10
Consolidated Statement of Financial Position
11
Consolidated Statement of Changes in Equity
13
Consolidated Statement of Cash Flows
14
Notes to the Financial Statements
16
Parent company accounts
58
Vix AFC Limited
Strategic Report
30 June 2023
Company Information
Registered number
02649163
Registered office
P.O. Box 208, The Cottage Ridgecourt, The Ridge,
Epsom, Surrey, KT18 7EP
Introduction
Vix AFC Limited ("Vix") and its subsidiaries (the “Group”) is a global leader in automatic fare collection, transit information and transit analytics solutions. Uniting our passion and imagination with cutting-edge technology, we are creating an exceptional journey experience for passengers all over the world. Building on long-term partnerships with transit agencies and operators, our products, people, processes, and pedigree enable us to solve problems and deliver solutions that are changing the world of public transit. Our team of experts are proud to be helping to shape the way people move, now and in the future.
Within the mobility sector, our ground-breaking Automated Fare Collection solutions deliver outstanding choice and convenience to passengers across the world. They enable equitable access to transport by connecting travellers with the best value fares. And they help agencies and operators secure the ridership, loyalty and increased revenue from better service provision. Today, we continue to build on more than 35 years of pioneering technological innovation with powerful and engaging tools designed to ensure a streamlined journey.
Our aim is to create products that enable operators to deliver a seamless journey for their passengers and communities, to ultimately making mobility seamless. For further information visit www.vixtechnology.com.
FY23 Overview
The year ending 30 June 2023 was another year of transformation for Vix Group following the new operating model adopted in the prior year. The Group further refined the operating model to focus on cost optimisation and a stronger go-to-market strategy, especially for the ITS products and expanding these outside the UK market. As part of the review of operational model and product alignment, the Italy business of the Group was transferred to a related group (Kuba Group) to enable the Italian entity to focus on the region.
Operationally, the business delivered the first batch of next-generation devices during the year to the first customer. To minimise the risk of delays due to supply chain issues, the Group strategically embarked upon manufacturing the subassemblies for Assure Devices. Coupled with expanding our manufacturing footprint, this will enable the Group to meet future orders with reduced lead times.
On the AFC front, the Group has successfully completed the initial phases of go-live stages for the Brussels, Edmonton and Phoenix projects, and the below a quick overview of the key milestones;
Phoenix Phase 1: Mobile Ticketing went live, in time for the Super Bowl.
Edmonton Phase 1: Launched to the public.
Brussels: Mobile QR delivered and piloted.
Additionally, the development and integration of Pulse and Whisper for Known-Fare with Ticketer devices for Manchester were completed, going live in FY24. The Brussels project concluded in FY24, and Edmonton's eMV phase is set for FY25. Phoenix is on track to move to full operations in FY25.
During the financial year, the UK business started the development of the next generation of the Intelligent Transportation System (Vix Beacon ITS), which was launched in the new year. The Group acquired the myBus business in FY24, based in Germany and Spain. Vix Beacon ITS represents a significant leap forward in the industry, merging the best features of Vix's fleet management system Busnet Horizon and the recently acquired myBus CAD/AVL platform to create an unparalleled, modern ITS platform.
1
Vix AFC Limited
Strategic Report
30 June 2023
FY23 Overview
While delayed project completions have previously affected profitability, these projects are now transitioning to operational phases, initiating long-term recurring revenues and profitability improvements. The Group reported an EBITDA from continued operations of $971k, a decrease from $6.6m in FY22. However, excluding one-off impacts like the Covid Incentive ($1.06m in the US), Unrealised FX impacts (loss of $554k in FY23 vs. gain of $4.7m in FY22), and increased loss contributed from associate (loss $590k in F23 vs loss of 77k in FY22), underlying operational performance showed improvement. Revenue remained stable year-on-year despite major projects concluding.
Forecast, Opportunities and Risks
Aaron Ross was appointed CEO of the Group during FY24. This strategic move aims to enhance operational synergies and improve the go-to-market strategy.
As the Group delivers major projects and transitions existing contracts to operations, the Group will see a shift from project revenues to operating revenues. Underlying profitability is expected to improve in the coming years as the business focuses on operating efficiencies, engineering optimisation, and securing profitable new business.
With strong orders coming through in the UK, this is seen as a key growth area, and opportunities are anticipated through the Group's Intelligent Transportation System (ITS) solutions, currently a market leader in the UK. With the successful launch of rail gates and investments in Vix Beacon (next generation of ITS solution), the Group is now looking to further grow the UK market. The Group is also looking to expand the ITS and gates solutions globally.
The governments in advanced economies in Europe, the US, the UK and the APAC region are expected to make more funding available for transport agencies, which should translate to more opportunities for the Group. We are already witnessing an increase in major projects and tender activities for public transport in those regions. With our global footprint and a set of mature AFC & ITS solutions and continuous investments in product development, the Group is poised to benefit from the additional growth in the sector.
The Group develops and executes strategic actions to achieve business objectives. Assumptions are made for these actions and other factors when forecasting future performance. As part of the forecast, the Group considers known and unknown risk factors, which can negatively affect the Group's ability to achieve goals. Positive factors are also considered, giving rise to opportunities.
Positioning for the Future
With the ever-increasing demand for contactless payments and a seamless travel experience for the end consumer, the future pipeline of opportunities is strong. The business will transition from project delivery to operations for a couple of major projects.
On behalf of the Directors,
Steven Bruce Gallagher
Chairman
Date: 8 August 2024
2
Vix AFC Limited
Directors' Report
30 June 2023
The Directors present their report, together with the financial statements of the Group, being the Company and its controlled entities, for the financial year ended 30 June 2023.
1.    General information
Directors
The names of each person who has been a director during the whole of the financial year and up to the date of this report, unless otherwise stated are:
Steven Bruce Gallagher (Chairman)
(Appointed Director on 21 April 2021)
Duncan Paul Saville
(Appointed Director on 21 April 2021)
Harjinder Singh
(Appointed Company Secretary on 31 July 2023)
(Chief Executive Officer on 29th January 2024 & Appointed Director 7th February 2024)
Aaron Ross
Stephanie Carmelita Saville
(Appointed Director on 22nd March 2024)
Paul Jonathan Bethel, as a director, and Martyn James Jenkins, as Company Secretary, resigned on 31 July 2023. David Russell Maitland resigned as Chief Executive Officer on 29 January 2024 and as a director on 14 March 2024.
Principal activities
The principal activities of the Group during the financial year were:
marketing, installation, service and operation of automated fare collection equipment and systems;
smart card systems and services; and
intelligent transport systems and real-time passenger information systems.
2.    Operating results and review of operations for the year
Operating results
The consolidated loss before tax from the continuing operations is $8.4m (2022: $2.5m loss before tax from the continuing operations).
Dividends paid or recommended
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made (2022: $nil).
Events after the reporting date
There have been no other events after the balance sheet that have a material impact on the financial performance, financial position and cashflows.
2.    Operating results and review of operations for the year
Future developments and results
The Directors see a strong future for Vix as its new operating structure allows the Group to focus on its new technology and to enter into a period of sustainable growth, new business and long-term profitability.
3
Vix AFC Limited
Directors' Report
30 June 2023
Director's responsibilities statement
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and adopted by the United Kingdom, to the extent that they are in conformity with the requirements of Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.  In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Indemnification and insurance of officers and auditors
The Company's constitution provides an indemnity of Directors, Executive Officers and Company Secretaries where liability is incurred in connection with the performance of their duties in those roles other than as a result of negligence, default or breach of duty in relation to the consolidated entity. The indemnification will also meet the full amount of such liabilities, including legal fees where that person is acquitted or where proceedings are withdrawn before judgement. The Company has not otherwise, during or since the year end of the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such by an officer or auditor. The Group has paid insurance premiums in respect of Directors' and Officers' liability, legal expenses and insurance contracts for current.
Directors and Officers, including Executive Officers and Company Secretaries of the Group, and Directors, Executive Officers and Company Secretaries of its controlled entities. In accordance with commercial practices, the insurance policy prohibits disclosure of the terms of the policy including the nature of the liability insured against and the amount of premiums paid.
Section 172 Statement – Directors' duty to promote the success of the Company and Group
This section sets out the Company's Section 172 Statement and should be read in conjunction with the other elements of the Strategic Report. The Directors have a duty to promote the success of the Company for the benefit of its members as a whole and in doing so to have regard to a number of matters including:
the likely consequences of any decision in the long term;
the interests of the Company's employees;
the need to foster business relationships with suppliers, customers and others;
4
Vix AFC Limited
Directors' Report
30 June 2023
2.    Operating results and review of operations for the year
Section 172 Statement – Directors' duty to promote the success of the Company and Group
the impact of the company's operations on the community and the environment;
the desirability of the Company maintaining a reputation for high standards of business conduct; and
the need to act fairly between members of the Company.
The Directors have acted accordingly with their duties codified in law, which include their duty to act in the way in which they consider, in good faith, would be most likely to promote the success of the Company and Group for the benefit of its members, having regard to the stakeholders and matters set out in section 172(1) of the Companies Act 2006.
The Directors deliberations are set in decision making at Board level and throughout the Group. Stakeholders, factors, and issues which the Directors have considered when discharging their duty.
Other stakeholders include, customers, suppliers, debt holders, industry associations, government and regulatory agencies, media, local communities, and shareholders. The Board, both individually and together, consider that they had good intentions in the way they consider would be most likely to promote the success of the Company and Group as a whole. The Directors believe that any relationship between supplier/customer must be mutually beneficial, and the Group is known for its commitment to its customers and debt holders.
Our vision, purpose, sustainability pillars and values are set out in the Strategic report. Additionally, the Board looks outside the organization at macro factors affecting the business. The Directors consider all known facts when developing strategic decisions and long-term plans, taking into account their likely consequences for the Company and Group.
The Group is committed to the highest levels of integrity and transparency possible with employees and other stakeholders. Consistent training, strong benefit packages and open dialogue between all employees are just a few of the ways the Group ensures its employees improve skill sets and work hand-in-hand with management to improve all aspects of the Group's performance.
The Board recognises its responsibilities under section 172 as outlined above and has acted at all times in a way consistent with promoting the success of the Group with regard to all stakeholders.
Energy and Carbon Reporting
As the Group has consumed more than 40,000 kWh of energy in the United Kingdom in this reporting period, it must report on its emissions, energy consumption or energy efficiency activities. This is the first reporting year under these regulations so there is no emissions data for the prior years. The Group has followed the 2019 HM Government Environment Reporting Guidelines.
30 June 2023
30 June 2022
Energy consumption used to calculate emissions (kWh)
150,076
                 139,561
Energy consumption breakdown (kWh):
Electricity
58,001
                 46,822
Company fleet
92,739
                92,739
Scope 1 emissions in metric tonnes CO2e:
Company fleet
32
                          32
Scope 2 emissions in metric tonnes CO2e:
Purchased electricity
31
                          25
Total gross emissions in metric tonnes CO2e
63
                         57
Intensity ratio per total $m sales revenue
0.75
                       0.62
2.    Operating results and review of operations for the year
Energy and Carbon Reporting
The Group continues striving for energy and carbon reduction from their activities. As the Covid related restrictions are largely lifted during the year, the group noticed an increase in trave (both domestically and international) and stff gradually returning to the office, which had increased the energy consumption. The Group has implemented improved processes during the financial year to capture the global carbon emissions and report these as part of the monthly management reports to spread awareness.
5
Vix AFC Limited
Directors' Report
30 June 2023
Auditor's reappointment
The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to the auditors
So far as the Directors are aware:
a) there is no relevant audit information of which the Group's auditors are unaware; and
b) all the Directors have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
On behalf of the Directors
Steven Bruce Gallagher
Chairman
Date: 8 August 2024
6
Independent auditors' report to the members of Vix AFC Limited
30 June 2023
Opinion
We have audited the financial statements of Vix AFC Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2023 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, and notes to the financial statements including significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group's financial statements is applicable law and International Financial Reporting Standards (IFRSs), as adopted by the United Kingdom. The financial reporting framework that has been applied in the preparation of the Parent Company's financial statements is FRS 101 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (“FRS 101” or “UK GAAP”) and in accordance with the provisions of the Companies Act 2006.
In our opinion:
give a true and fair view of the state of the Group's and the Parent Company's affairs as at 30 June 2023 and of the Group's profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the Parent Company financial statements have been properly prepared in accordance with FRS 101 and as applied in accordance with the provisions of the Companies Act 2006; and
the Group financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the Group financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statement is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern for a period of at least twelve months from when the Group financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the financial statement. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
7
Independent auditors' report to the members of Vix AFC Limited
30 June 2023
Independent auditors' report (continued)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken during our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained during the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Group and Parent Company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the Group and Parent Company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to inflated revenue and profit.
8
Independent auditors' report to the members of Vix AFC Limited
30 June 2023
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of correspondence with legal advisors, and enquiries of management in so far as they related to the financial statements and testing of journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
Independent auditors' report (continued)
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Matthew Anderson (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
8 August 2024
9
Vix AFC Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2021
2023
2022
$'000s
$'000s
Note
Sales revenue
83,598
5
83,397
Other income
1,118
5
19
Cost of sales
(30,402)
(28,570)
Gross profit
54,846
54,314
Finance income
24
109
Loss from associates
(77)
(590)
Employees and third-party costs
(43,018)
(39,384)
IT and Hosting costs
(6,528)
(7,020)
Administrative (expenses)/income
  1,859
  (6,990)
971
EBITDA
6,574
Amortisation & Depreciation
(8,909)
(8,667)
EBIT
(7,938)
(2,093)
Finance costs
(431)
(377)
Loss before income tax from continuing operations
(8,369)
(2,470)
Income tax (expense)/benefit
6
33
  (301)
Loss after income tax from continuing operations
(8,670)
(2,437)
Profit from discontinued operations
217
386
Loss after income tax for the year
       (8,453)
(2,051)
Other comprehensive income, net of income tax
Items that will be reclassified to profit or loss when specific conditions are met
Exchange differences on translating foreign controlled entities
      (7,550)
      (220)
Foreign currency reserve derecognised due to the disposal of entity
-
162
Business combination common control reserve
-
7
584
Other comprehensive income/(loss) for the year, net of tax
(7,550)
     526
Total comprehensive loss for the year
       (7,927)
     (9,601)
10
Vix AFC Limited
Consolidated Statement of Financial position
As at 30 June 2023
2023
2022
$'000s
$'000s
ASSETS
Note
CURRENT ASSETS
Cash and cash equivalents
8
8,093
3,924
Trade and other receivables
9
38,559
32,760
Inventories
10
5,654
9,515
Current tax asset
120
350
TOTAL CURRENT ASSETS
46,319
52,656
NON-CURRENT ASSETS
Trade and other receivables
9
3,025
8,000
Investment in equity-accounted associates
1,727
1,108
Property, plant and equipment
11
1,670
1,500
Right of use assets
17
1,215
2,833
Intangible assets
12
24,924
20,453
Deferred tax assets
23
378
-
TOTAL NON-CURRENT ASSETS
33,894
32,939
TOTAL ASSETS
80,213
85,595
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
13
37,618
33,555
Short-term provisions
15
4,186
3,636
Lease liabilities
18
876
609
TOTAL CURRENT LIABILITIES
37,800
42,680
NON-CURRENT LIABILITIES
Trade and other payables
13
1,775
1,867
Borrowings
14
-
14
Lease liabilities
18
469
2,235
TOTAL NON-CURRENT LIABILITIES
4,116
2,244
TOTAL LIABILITIES
41,916
44,924
NET ASSETS
38,297
40,671
11
Vix AFC Limited
Consolidated Statement of Financial position
As at 30 June 2023
2023
2022
$'000s
$'000s
Note
EQUITY
19
10,008
10,009
Issued capital
20
64,097
69,649
Share premium
(11,323)
(10,797)
Reserves
(22,111)
(30,564)
Retained earnings
Total Equity
40,671
38,297
The financial statements were approved and authorised for issue on 8 August 2024 by the Board of Directors and were signed on its behalf by;
___________________
Steven Bruce Gallagher
Chairman
12
Vix Technology Limited
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Business Combination Common Control Reserve
2023
Foreign Currency Translation Reserve
Capital Redemption Reserves
Preference Shares
Share Premium
Ordinary Shares
Retained Earnings
Total
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
Balance at 1 July 2022
10,008
-
64,097
(22,111)
(13,022)
(7,532)
9,231
40,671
Issued
1
-
5,552
-
-
-
-
5,553
Loss attributable to members of the parent entity
-
-
-
(8,453)
-
-
-
(8,453)
Total other comprehensive income for the year
-
-
-
-
526
-
-
526
Balance at 30 June 2023
10,009
-
69,649
(30,564)
(12,496)
(7,532)
9,231
38,297
Business Combination Common Control Reserve
Foreign Currency Translation Reserve
2022
Capital Redemption Reserves
Preference Shares
Share Premium
Ordinary Shares
Retained Earnings
Total
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
Balance at 1 July 2021
10,004
4
60,071
(20,060)
(5,472)
(7,532)
9,231
46,246
Issued
-
-
4,026
-
-
-
-
4,026
Conversion of preference shares
4
(4)
-
-
-
-
-
-
Loss attributable to members of the parent entity
-
-
-
(2,051)
-
-
-
(2,051)
Total other comprehensive loss for the year
-
-
-
-
(7,550)
-
-
(7,550)
Balance at 30 June 2022
10,008
-
64,097
(22,111)
(13,022)
(7,532)
9,231
40,671
The accompanying notes form part of these financial statements.
13
Vix AFC Limited
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
2023
2022
$'000s
$'000s
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss after taxation
(8,453)
(2,051)
Adjustments to reconcile net profit to net cash from operating activities;
Depreciation
695
518
Lease depreciation
1,090
770
Amortisation
7,211
7,621
Increase in expected credit losses
(288)
(60)
Debtors' retention write off
229
-
Foreign exchange loss/(gain)
(4,781)
849
Finance income
(24)
(109)
Finance costs
237
231
Lease interest expense
200
170
Loss from Equity Accounted Associates
590
77
PPP Loan forgiveness
-
(1,066)
Cash generated from operations
2,157
1,499
Changes in operating assets and liabilities;
Loss on sale of property, plant and equipment
(5)
-
Income tax expense
(129)
(301)
Decrease in deferred tax assets
-
378
Decrease/(increase) in current tax assets/liabilities
231
(408)
Decrease in trade and other receivables
226
1,129
Increase in inventories
(247)
(3,861)
(Decrease)/increase in trade and other payables
10,209
(3,972)
Decrease in provisions
(550)
(738)
Interest paid
(243)
(56)
Income tax refunds/(paid)
(488)
635
Net cash (used in)/generated from operating activities
(4,210)
9,676
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received
10
29
Purchase of property, plant and equipment
(90)
(593)
Development expenditure
(4,027)
(7,354)
Net cash used in investing activities
(4,107)
(7,918)
The accompanying notes form part of these financial statements.
14
Vix AFC Limited
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
2023
2022
$'000s
$'000s
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from other long-term borrowings
1,555
95
Repayment of borrowings
(2,442)
-
Lease repayments
(1,218)
(1,533)
Proceeds from issue of shares
4,026
5,553
Net cash generated from financing activities
4,115
1,921
CASH FLOWS FROM OTHER ACTIVITIES:
Effect of exchange rate on cash holdings in foreign currencies
33
(27)
Net cash (decrease)/increase in cash and cash equivalents
(4,169)
3,652
Cash and cash equivalents at beginning of financial year
8,093
4,441
Cash and cash equivalents at the end of financial year
8
3,924
8,093
The accompanying notes form part of these financial statements.
15
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
The financial report covers Vix AFC Limited and its controlled entities ('the Group'). Vix AFC Limited is a private Company limited by shares, incorporated in England and Wales. The registered office is P.O. Box 208, The Cottage Ridgecourt, The Ridge, Epsom, Surrey, KT18 7EP.
Each of the entities within the Group prepares its financial statements based on the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in US dollars which is the parent entity's functional and presentation currency. The amounts in the Consolidated financial statements have been rounded off to the nearest thousand dollars, unless otherwise stated.
Comparatives are consistent with prior years unless otherwise stated.
1
Basis of Preparation
These consolidated financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and adopted by the European Union, to the extent that they are in conformity with the requirements of Companies Act 2006. They were authorised for issue by the Company's board of Directors on 8 August 2024.
Details of the Group's accounting policies, including changes during the year, are included in notes 2 and 3.
In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effect are disclosed in note 4.
The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at the fair value of selected non-current assets, financial assets, and financial liabilities.
Significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated.
2
New and amended standards adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations issued by the International Financial Reporting Standards (IFRS) that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2022.
The adoption of these amendments has not resulted in any significant changes to the Group's accounting policies nor any significant effect on the measurement or disclosure of the amounts reported for the current or prior periods.
New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include:
IAS 1 Disclosures of accounting policies
IAS 8 Definition of accounting estimates
TAS 12 Deferred tax related to assets and liabilities arising from a single transaction
IAS 12 International Tax Reform-Pillar Two Model Rules
IFRS 17 Insurance contracts
IFRS 17 First-time adoption of IFRS 17 and IFRS 9 - comparative information
16
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3    Summary of Significant Accounting Policies
(a)  Basis for consolidation
The consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost.
Intragroup assets, liabilities, equity, income, expenses, and cash flows relating to transactions between entities in the consolidated entity have been eliminated in full for the purpose of these financial statements.
Appropriate adjustments have been made to a controlled entity's financial position, performance, and cash flow where the accounting policies used by that entity were different from those adopted by the consolidated entity. All controlled entities have a June financial year-end.
A list of controlled entities is contained in Note 26 to the financial statements.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the parent has control. Control is established when the parent is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.
Joint Arrangements
IFRS 11 Joint Arrangements defines a joint arrangement as an arrangement of which two or more parties have joint control and classifies these arrangements as either joint ventures or joint operations. Vix AFC Limited has determined that it has only joint ventures.
Joint Ventures
Joint ventures are those joint arrangements which provide the venturer with the right to the net assets of the arrangements. Interests in joint ventures are accounted for using the equity method in accordance with IAS 8.
Associates
Interests in associates, where the investor has significant influence over the investee, are accounted for using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures. Under this method, the investment is initially recognised as cost and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss and other comprehensive income of the investee after the date of acquisition.
(b)  Business combinations
Business combinations are accounted for by applying the acquisition method, which requires an acquiring entity to be identified in all cases. The acquisition date under this method is the date that the acquiring entity obtains control over the acquired entity.
The fair value of identifiable assets and liabilities acquired are recognised in the consolidated financial statements at the acquisition date.
17
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
Goodwill or a gain on bargain purchase may arise on the acquisition date, this is calculated by comparing the consideration transferred and the amount of non-controlling interest in the acquiree with the fair value of the net identifiable assets acquired. Where consideration is greater than the net assets acquired, the excess is recorded as goodwill. Where the net assets acquired are greater than the consideration, the measurement basis of the net assets are reassessed and then a gain from bargain purchase recognised in profit or loss.
All acquisition-related costs are recognised as expenses in the periods in which the costs are incurred except for costs to issue debt or equity securities.
Any contingent consideration which forms part of the combination is recognised at fair value at the acquisition date.   If the contingent consideration is classified as equity, then it is not remeasured, and the settlement is accounted for within equity. Otherwise, subsequent changes in the value of the contingent consideration liability are measured through profit or loss.
3    Summary of Significant Accounting Policies
(c)  Income Tax
The tax expense recognised in the statement of profit or loss and other comprehensive income comprises current income tax expense plus deferred tax expense.
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.
Deferred tax is not provided for the following:
The initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Taxable temporary differences arising on the initial recognition of goodwill.
Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
Deferred tax assets and liabilities are measured 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 (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilised.
Current and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive income or equity respectively.
18
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
(d)  Leases
The Group leases office and equipment. Rental contracts are typically made for fixed periods of 3 to 6 years but may have extension options.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.
19
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3    Summary of Significant Accounting Policies
(d)  Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
Amounts expected to be payable by the Group under residual value guarantees
The exercise price of a purchase option if the Group is reasonably certain to exercise that option, and
Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
Where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since party financing was received;
Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which does not have recent third-party financing; and
Makes adjustments specific to the lease, e.g. term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
(e)  Revenue and other income
Revenue from contracts with customers
Overall revenue recognition policy
The Group recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services, using a five-step model for each revenue stream.
20
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(e)
Revenue and other income
Step 1: Identify the contract with the customer - identify and account for each contract, or group of contracts, including customary business practices, with a customer that establishes enforceable rights and obligations. A subsequent change in the price or scope of a contract that is approved by the parties to the contract is a contract modification. Depending on the price of the modification and on nature of the goods or services promised, the modification may be accounted for as either a separate contract, the termination of the existing contract and the creation of a new contract, or a modification of the existing contract.
Step 2: Identify the performance obligations - at contract inception, the Group identifies the performance obligations in the contract (i.e. a promise to transfer a distinct good or service to the customer). The number of performance obligations that a contract has will depend on the type of contract and activity.
Step 3: Determine the transaction price - the amount of the consideration to which the Group expects to be entitled.   Where a contract contains variable consideration (due to bonuses, claims, rebates etc.), the Group estimates the amount of variable consideration using either a 'most likely' method or an 'expected value' method.
The estimated amount of variable consideration will be included in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is subsequently resolved ('constraint on variable consideration").
Revenue from contracts with customers
Overall revenue recognition policy
The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component (unless the relevant time period is less than 12 months), any consideration payable to the customer and any non-cash consideration.
At the end of each reporting period, the Group updates the estimated transaction price, including updating its assessment of whether an estimate of variable consideration is constrained.
Step 4: Allocate the transaction price to the performance obligations - this allocation is based on the relative stand-alone selling prices of each distinct good or service.
Where available, the standalone selling price is an observable price of the good or service when it is sold separately by the Group in similar circumstances to similar customers. If a standalone selling price is not directly observable, it is estimated.
In specific circumstances, an amount of variable consideration may be allocated to one or more performance obligations in the contract. Subsequent changes in the transaction price are allocated on the same basis as at contract inception.
Step 5: Recognise revenue as or when control of the performance obligations has been transferred to the customer - Revenue is recognised when or as each performance obligation is satisfied, at the amount of the transaction price allocated to that performance obligation in Step 4. A performance obligation is satisfied over time, when either:
the customer simultaneously receives and consumes the benefits provided by the Group's performance, the performance creates or enhances an asset that the customer controls as the asset is created or enhanced or;
its performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.
Where a performance obligation is satisfied over time, an appropriate method is selected for measuring progress towards complete satisfaction of the performance obligation. Performance is measured using an input method or an output method as deemed appropriate by management.
A performance obligation is satisfied at a point in time if the criteria for a good or service to be transferred over time are not met.
21
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(e)
Revenue and other income
Contract modifications
Contract modifications are defined as changes in the scope of work, other than changes envisaged in the original contract that may result in a change in the revenue associated with that contract. Modifications to the initial contract require the customer's technical and financial approval before billings can be issued and the amounts relating to the additional work can be collected.
The Group does not recognise the revenue from such additional work until the customer's approval has been obtained. In cases where the additional work has been approved, but the corresponding change in price has not been determined, the requirement described above for variable consideration is applied, namely, to recognise revenue for an amount with respect to which it is highly probable that a significant revenue reversal will not occur. The costs associated with these additional units or services performed are recognised when incurred, irrespective of whether or not the modification has been approved.
Revenue from contracts with customers
Claims
A claim is a request for payment or compensation from the customer (for example, for compensation, reimbursement of costs) that is made directly to the customer The method followed by the Group concerning claims is to apply the technique described above for modifications when the claims are not covered by the contract, or the method used for variable consideration when the claims are covered by the contract but need to be quantified.
Disputes
A dispute is the result of rejection following a claim made to the customer under a contract, the resolution of which is dependent on a procedure conducted directly with the customer or a court or arbitration proceeding. Per the criteria followed by the Group, revenue relating to disputes in which the enforceability of the amount claimed is questioned is not recognised and previously recognised revenue is derecognised since the dispute demonstrates the absence of the customer's approval of the work completed. If the customer only questions the price, revenue recognition is based on the criteria applied in cases of variable consideration.
Only in those cases in which there is a legal report confirming that the rights under dispute are clearly due and enforceable and that, therefore, at least the costs directly associated with the related service will be recovered, may revenue be recognised up to the limit of the amount of the expenses incurred.
Specific revenue streams
The revenue recognition policies for the principal revenue streams of the Group are:
Provision of integrated transit payment systems
The Group constructs and sells integrated transit payment systems under long-term contracts with customers. Such contracts are entered into before development of the systems begins. The nature of these systems is such that the Group's performance does not create with an alternative use to the Group and the Group has an enforceable right to payment for work done. Revenue from the development of these systems is recognised over time based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs. Management has determined that this is an appropriate measure of the progress towards complete satisfaction of its performance obligations under IFRS 15.
The Group becomes entitled to invoice customers for development work completed based on achieving a series of performance-related milestones. When a particular milestone is reached, the customer is sent a statement of work and an invoice for the related milestone payment. Prior to issuing an invoice, the Group recognises any work performed as a contract asset. At the date an invoice is issued, any amount recognised as a contract asset is reclassified to trade receivables. If the milestone payment exceeds the revenue recognised to date, the Group recognises a contract liability for the difference. There is no significant financing component in the Group's contracts as the period between the recognition of revenue, and the milestone payment is less than one year.
22
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3
    Summary of Significant Accounting Policies
(e)
Revenue and other income
Rendering of services
The Group sells integrated transit payment systems to customers under long term contracts. These contracts typically include a service fee for work to be carried out on the system after development is completed. This fee is not billed upfront but during the service period. The services provided are substantially the same and are transferred to the customer in a substantially uniform pattern of consumption.
Revenue relating to the services described above are recognised over the relevant service period.
Specific revenue streams
Sale of goods
The Group also makes additional sales of equipment to customers. Revenue for these sales is recognised when customers take control of these goods.
Statement of financial position balances relating to revenue recognition
Contract assets and liabilities
Where the amounts billed to customers are based on the achievement of various milestones established in the contract, the amounts recognised as revenue in a given period do not necessarily coincide with the amounts billed to or certified by the customer.
When a performance obligation is satisfied by transferring a promised good or service to the customer before the customer pays consideration or the before payment is due, the Group presents the contract as a contract asset, unless the Group's rights to that amount of consideration are unconditional, in which case the Group recognises a receivable.
When an amount of consideration is received from a customer before the entity transferring a good or service to the customer, the Group presents the contract as a contract liability.
Contract cost assets
The Group recognises assets relating to the costs of obtaining a contract and the costs incurred to fulfil a contract or set up / mobilisation costs that are directly related to the contract provided they will be recovered through the performance of the contract.
Costs to obtain a contract
Costs to obtain a contract are only capitalised when they are directly related to a contract, and it is probable that they will be recovered in the future. Costs incurred that would have been incurred regardless of whether the contract was won are expensed unless those costs are explicitly chargeable to the customer in any case (whether or not the contract is won).
The capitalised costs are amortised on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates.
Set-up / mobilisation costs
Costs required to set up the contract, including mobilisation costs, are capitalised provided that it is probable that they will be recovered in the future and that they do not include expenses that would normally have been incurred by the Group if the contract had not been obtained. They are recognised as an expense on the basis of the proportion of actual output to estimated output under each contract. If the above conditions are not met, these costs are taken directly to profit or loss as incurred.
23
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(e)  Revenue and other income
Contract cost assets
Costs to fulfil a contract
Where costs are incurred to fulfil a contract, they are accounted for under the relevant accounting standard (if appropriate), otherwise if the costs relate directly to a contract, the costs generate or enhance resources of the Group that will be used to satisfy performance obligations in the future and the costs are expected to be recovered then they are capitalised as contract costs assets and released to the profit or loss on a systematic basis consistent with the transfer to the customer of the goods or services to which the asset relates.
Provisions relating to contracts with customers
Provisions for Warranty
These provisions cover the expenses that will foreseeably arise on completion of a contract, such as those unforeseen contingencies or events, as well as the estimated repairs to be carried out within the warranty period. These provisions relate to a present obligation stipulated in the contract that is based on the fact that in order to settle the obligation there will probably be an outflow of resources from the Group the amount of which can be estimated reliably.
Provisions are recognised on the basis of the best possible estimates of the total expenditure required to settle the obligations. They can be determined as a percentage of the total expected revenue from the contract if historical information on similar contracts is available.
The warranty obligations included in this type of provisions are not considered to be a separate performance obligation unless the customer has the option of arranging the warranty separately, and, accordingly, they are recognised in accordance with IAS 37.
Statement of financial position balances relating to revenue recognition
Provisions for budgeted losses
A provision for budgeted losses is when it becomes evident that the total costs expected to be incurred in a contract exceed the total expected revenue from that contract.
For the purpose of determining the amount of the related provision, the Group considers the estimated outflow of resource in accordance with IAS 37.
The estimate of the total budget for the contract includes the expected revenue that is considered to be probable. This criterion is different from that established in IFRS 15 in relation to variable consideration where such revenue is only recognised to the extent that it is deemed to be highly probable.
If the total expected profit on a contract is less than that recognised under the aforementioned revenue recognition rules, the difference is recognised as a provision for losses.
Other income
Other income is recognised on an accruals basis when the Group is entitled to it.
(f)  Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
24
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(g)  Value added tax (VAT)
Revenue, expenses, and assets are recognised net of the amount of goods and services tax or equivalent sales tax, except where the amount of VAT incurred is not recoverable from the relevant taxation authority.
Receivables and payable are stated inclusive of VAT.
Cash flows in the statement of cash flows are included on a gross basis and the VAT component of cash flows arising from investing and financing activities which are recoverable from, or payable to, the taxation authority is classified as operating cash flows.
(h)  Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the weighted average costs basis and is net of any rebates and discounts received.  Net realisable value is estimated using the most reliable evidence available at the reporting date, and inventory is written down through an obsolescence provision if necessary.
(i)  Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment.
Land and buildings
Land and buildings are measured using the cost model.
Plant and equipment
Plant and equipment are measured using the cost model.
Depreciation
Property, plant and equipment, excluding freehold land, is depreciated on a straight-line basis over the assets' useful life to the Group, commencing when the asset is ready for use.
Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.
The estimated useful lives used for each class of depreciable asset are shown below:
Fixed asset class
Useful life
Plant and Equipment
3 - 8 years
Leasehold improvements
3 - 8 years
At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset are reviewed. Any revisions are accounted for prospectively as a change in estimate.
(j)  Property, plant and equipment
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.
25
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(k)  Right-of-use assets
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 Company 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 an impairment or adjusted for any remeasurement of lease liabilities.
The Company 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.
(l)  Financial instruments
Financial instruments are recognised initially on the date that the Group becomes a party to the contractual provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).
Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification
On initial recognition, the Group classifies its financial assets into the following categories, those measured at:
amortised cost
fair value through profit or loss – FVTPL
fair value through other comprehensive income - equity instrument (FVOCI - equity)
fair value through other comprehensive income - debt investments (FVOCI - debt)
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets.
Amortised cost
Assets measured at amortised cost are financial assets where:
the business model is to hold assets to collect contractual cash flows; and
the contractual terms give rise on specified dates to cash flows are solely payments of principal and interest on the principal amount outstanding.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the statement of financial position.
Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less provision for impairment.
Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on derecognition is recognised in profit or loss.
26
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(l)  Financial instruments
Financial assets
Fair value through other comprehensive income
All financial assets not classified as measured at amortised cost or fair value through other comprehensive income, as described above, are measured at FVTPL.
Net gains or losses, including any interest or dividend income, are recognised in profit or loss (refer to hedging accounting policy for derivatives designated as hedging instruments.)
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:
financial assets measured at amortised cost
debt investments measured at FVOCI
When determining whether the credit risk of financial assets has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort.   This includes both quantitative and qualitative information and analysis based on the Group's historical experience and informed credit assessment and including forward-looking information.
The Group uses the presumption that an asset which is more than 30 days past due has seen a significant increase in credit risk.
The Group uses the presumption that a financial asset is in default when:
the other party is unlikely to pay its credit obligations to the Group in full, without recourse to the Group to actions such as realising security (if any is held); or
the financial assets is more than 90 days past due.
Credit losses are measured as the present value of the difference between the cash flows due to the Group in accordance with the contract, and the cash flows expected to be received. This is applied using a probability-weighted approach.
Trade receivables and contract assets
Impairment of trade receivables and contract assets have been determined using the simplified approach in AASB 9, which uses an estimation of lifetime expected credit losses. The Group has determined the probability of non-payment of the receivable and contract asset and multiplied this by the amount of the expected loss arising from default.
The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance expense.   Once the receivable is determined to be uncollectable, then the gross carrying amount is written off against the associated allowance.
Where the Group renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate, and any resulting difference to the carrying value is recognised in profit or loss.
Other financial assets measured at amortised cost
Impairment of other financial assets measured at amortised cost is determined using the expected credit loss model in IFRS 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised. Where the asset has experienced a significant increase in credit risk, then the lifetime losses are estimated and recognised.
27
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(l)  Financial instruments
Financial liabilities
The Group measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective interest rate method.
The financial liabilities of the Group comprise trade payables, bank and other loans and finance lease liabilities.
(m)  Impairment of non-financial assets
At the end of each reporting period, the Group determines whether there is evidence of an impairment indicator for non-financial assets.
Where an indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.
Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.
(n)  Intangibles
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
the consideration transferred;
any non-controlling interest;
the acquisition date fair value of any previously held equity interest; and
over the acquisition date fair value of net identifiable assets acquired in a business combination.
The value of goodwill recognised on the acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted in measuring the aforementioned non-controlling interest. The Group can elect to measure the non-controlling interest in the acquiree either at fair value ('full goodwill method') or at the non-controlling interest's proportionate share of the subsidiary's identifiable net assets ('proportionate interest method'). The Group determines which method to adopt for each acquisition.
Under the 'full goodwill method', the fair values of the non-controlling interests are determined using valuation techniques which make the maximum use of market information where available.
Goodwill is not amortised but is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating units, which represent the lowest level at which goodwill is monitored but where such level is not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold.
28
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(n)  Intangibles
Research and development
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits, and these benefits can be measured reliably.
The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development costs are measured at cost less accumulated amortisation and accumulated impairment losses.
Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project, which is 5 years.
Customer contracts
Customer contracts acquired in business acquisitions have finite lives and are carried at cost less any accumulated amortisation and impairment losses. They have an estimated useful life of 5 years.
Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(o)  Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(p)  Employee benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.
Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cash flows are discounted using market yields on high-quality corporate bond rates incorporating bonds rated AAA or AA by credit agencies, with terms to maturity that match the expected timing of cash flows. Changes in the measurement of the liability are recognised in profit or loss.
29
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(p)  Employee benefits
Defined benefit superannuation schemes
Defined contribution schemes
Obligations for contributions to defined contribution superannuation plans are recognised as an employee benefit expense in profit or loss in the periods in which services are provided by employees.
(q)  Provisions
Provisions are recognised when the Group 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.
Provisions are measured at the present value of management's best estimate of the outflow required to settle the obligation at the end of the reporting period. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the unwinding of the discount is taken to finance costs in the statement of profit or loss and other comprehensive income.
(r)  Foreign currency transactions and balances
Transaction and balances
Foreign currency transactions are recorded at the spot rate on the date of the transaction. At the end of the reporting period:
Foreign currency monetary items are translated using the closing rate;
Non-monetary items that are measured at historical cost are translated using the exchange rate at the date of the transaction; and
Non-monetary items that are measured at fair value are translated using the rate at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition or in prior reporting periods are recognised through profit or loss, except where they relate to an item of other comprehensive income or whether they are deferred in equity as qualifying hedges.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group's presentation currency are translated as follows:
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period where the average rate approximates the rate at the date of the transaction; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.  Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign currency translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss and other comprehensive income in the period in which the operation is disposed.
30
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(r)  Foreign currency transactions and balances
Foreign operations
The translation of foreign operations with different functional currency from US dollars is performed as follows:
Assets and liabilities (including goodwill and fair value adjustments on acquisition) for each statement of financial position presented are translated at the closing rate at the date of the statement;
Income and expenses for each statement of profit or loss and other comprehensive income are translated at the rate at the date of the transaction (or an average rate if that rate approximates the rate at the date of transaction;
All resulting exchange differences are recognised in other comprehensive income.
On disposal of a foreign operation, the cumulative amount of the exchange difference related to that foreign operation recognised in other comprehensive income is reclassified from equity to profit or loss.
(s)  Going concern
The FY23 reported EBITDA of $971k was a decrease from $6.6m in FY22. However, the underlying operational performance, excluding the one-off impacts of the Covid Incentive ($1.06m in the US), Unrealised FX impacts (FY23 was a loss of $554k, but FY22 was a gain of $4.7m) and loss attributed to the associate, showed an improvement over the prior year. In addition, revenue stayed consistent year-on-year despite some major projects coming to an end.
These trading improvements YOY, combined with the appointment of the new CEO in FY24 and a clear focus on cost optimisation and a much stronger go-to-market strategy, give the directors confidence of the viability of the business longer term.
Operationally, the Group has successfully completed the initial phases of go-live stages for the Brussels and Edmonton projects, and the systems moved into operations, with staged go-lives also in progress for the remaining stages. The Brussels project was successfully completed during FY24, and the eMV phase of Edmonton is expected to go live during FY25. The first phase of the PHNX project also went live during the year, with further milestones met in FY24, and the project is expected to move to full operations during FY25.
The UK business started work to develop the next generation of the Intelligent Transportation System (Vix Beacon ITS), which was launched in the new year. The company also purchased the myBus business in FY24, based in Germany and Spain. Vix Beacon ITS represents a significant leap forward in the industry, merging the best features of Vix's fleet management system Busnet Horizon and the recently acquired myBus CAD/AVL platform to create an unparalleled, modern ITS platform.
The outlook of the business, even assuming very moderate new business, will see an improvement in operating revenues and underlying profitability as the business continues to focus on its cost to deliver and implement a more streamlined engineering function, leveraging lower-cost outsourced resources. The governments in advanced economies in Europe, the US, the UK and the APAC region are expected to make more funding available for transport agencies, which should translate to more opportunities for the Group. We are already witnessing an increase in major projects and tender activities for public transport in those regions. With our global footprint and a set of mature AFC & ITS solutions and continuous investments in product development, the Group is poised to benefit from the additional growth in the sector.
The forecasted growth in Revenues and profitability is manageable and is driven mainly by improved efficiency and the completion of long-running projects. The business is projected to self-fund and generate free cash flow from FY25 onwards.
The directors, therefore, believe there are adequate controls, together with the ongoing support of its shareholders, to continue to invest and grow the business as it enters a new phase of profitability and growth. Therefore, the Directors believe that adopting the going concern basis is appropriate, and the Group will be able to continue trading for twelve months from the financial report date.
31
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
3     Summary of Significant Accounting Policies
(t)  Government grants
The Group recognises an unconditional government grant in the statement of profit or loss as other income when the grant becomes receivables. Other government grants are initially recognised as deferred income at fair value if there is a reasonable assurance that they will be received, and the Group will comply with the conditions associated with the grant; they are then recognised in the statement of profit or loss as other income.
Grants that compensate the Group for expenses incurred are recognised in the statement of profit or loss on a systemic basis in the periods in which expenses are recognised.
During the financial year ended 30 June 2023, the Group received forgiveness for a loan received under Paycheck Protection Program and this was recognised in the statement of profit or loss. There are no unfulfilled conditions and other contingencies attached to government incentives recognised in the financial statements.
(u)  Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Company with the right to access the cloud provider's application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider's application software, are recognised as operating expenses when the services are received.
Some of these costs incurred are for the development of software code that enhances or modifies, or creates additional capability to, existing on-premise systems and meets the definition of and recognition criteria for an intangible asset. These costs are recognised as intangible software assets and amortised over the useful life of the software on a straight-line basis. The useful lives of these assets are reviewed at least at the end of each financial year, and any change accounted for prospectively as a change in accounting estimate.
(v)  Adoption of new and revised accounting standards
The Group has adopted all standards which became effective for the first time at 1 July 2022, the adoption of these standards has not caused any material adjustments to the reported financial position, performance or cash flow of the Group except for that noted in Note 2.
(w)  New Accounting Standards and Interpretations
The IFRS has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Group has decided not to early adopt these Standards for the annual reporting period 30 June 2022.
4        Critical Accounting Estimates and Judgments
The Directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances.
These estimates and judgements are based on the best information available at the time of preparing the financial statements; however, as additional information is known, then the actual results may differ from the estimates.
The significant estimates and judgements made have been described below.
Key estimates - useful life of property, plant and equipment
Management estimates the useful lives of plant and equipment to be within 3 to 8 years. These are common life expectancies applied in the relevant industry. Changes in the level of usage and technological development could impact the useful economic life and the residual lives of these assets. Hence, future depreciation charges could be revised.
32
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
4        Critical Accounting Estimates and Judgments
Key estimates - useful life of intangible assets
Management estimates the useful lives of intangible assets to be 5 years. This has been determined based on the typical life of projects to which these intangibles relate. Changes in the level of usage and technological development could impact the useful economic life and the residual lives of these assets. Hence, future amortisation charges could be revised.
Key estimates - revenue recognition
When determining the nature, timing and amount of revenue to be recognised, the following critical estimates and judgements were applied and are considered to be those that have the most significant effect on revenue recognition.
The Group recognises certain contract revenues over time using the 'percentage of completion' input method. For these contracts, the revenue recognised in any single period is determined based on the quantum of costs expended as a proportion of total expected contract costs. This total is an estimate made based on the past experience of the Group in previous similar projects.
Allocation of contract costs
The Group incurs significant expenses for the development of systems which can be applied to numerous existing and future projects. The proportional allocation of these expenses between existing and future projects involves significant judgement on behalf of management.
Key estimates - provisions
As described in the accounting policies, provisions are measured at management's best estimate of the expenditure required to settle the obligation at the end of the reporting period. These estimates are made, taking into account a range of possible outcomes and will vary as further information is obtained.
Key estimates - receivables
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected credit losses, as disclosed in note 9, is calculated based on the information available at the time of preparation. The actual credit losses in future years may be higher or lower.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the Company based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the Company operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Company unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Key estimates - impairment of goodwill and other intangible assets
The recoverable amounts of the cash-generating units to which goodwill and other intangible assets have been allocated are determined based on the value in use calculations. The value in use calculations are based on discounted cash flow models. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model, as well as the expected future cash inflows and the growth rate used for extrapolation purposes. The carrying amounts of the goodwill and key assumptions applied in the determination of the value in use are disclosed and explained in note 12 to the financial statement.
33
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
5           Revenue and Other Income
Revenue from continuing operations
2023
2022
$'000s
$'000s
Revenue from contracts with customers
83,397
83,598
Other trading revenue
1,118
19
Total Revenue
83,416
84,716
Disaggregation of revenue from contracts with customers
2023
2022
     $'000s
$'000s
Geographical region
Asia-Pacific
11,373
9,817
North America
23,811
19,087
Europe
51,087
52,927
Africa
-
29
83,416
84,716
Revenue from contracts with customers
Provision of integrated transit payment systems
18,151
15,341
Rendering of services
46,307
28,081
Sale of goods
18,134
24,015
Other
2,124
15,979
83,416
84,716
Revenue from contracts with customers
Transferred over time
29,628
28,928
Transferred at a point in time
54,488
55,088
83,416
84,716
34
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
5        Revenue and Other Income
Unsatisfied performance obligations
The following table shows the aggregate amount of the transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations resulting from contracts with customers.
2023
2022
$'000s
$'000s
38,114
32,846
Integrated transit payment systems
164,725
127,241
Rendering of services
202,839
160,087
These amounts will be recognised as revenue on a systemic basis as performance obligations are delivered to customers.
Contract balances
The following tables provides information about receivables, contract assets and contract liabilities with customers.
2023
2022
$'000s
$'000s
15,282
9,492
Receivables, which are included in 'Trade and other receivables'
15,690
15,216
Contract assets
20,501
17,208
Contract liabilities
The contract assets primarily relate to the Group's rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. The contract liabilities primarily relate to the advance consideration received from customers for customers for which revenue is recognised over time in line with the stage of project completion.
Significant changes to the contract assets and contract liabilities balances during the period are as follows:
Contract assets
Contract liabilities
$'000s
$'000s
Revenue recognised that was included in the contract liability balance at the beginning of the period
91,034
-
Increases due to cash received, excluding amounts recognised as revenue during the period
87,648
-
Transfers from contract assets recognised at the beginning of the period to receivables
-
24,861
35
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
6
          Income Tax Expense
2022
2023
$'000s
$'000s
(a)
The major components of tax expense (income) comprise:
Current tax expense
460
(81)
Current tax year expense
(159)
-
Prior year tax benefit
Deferred tax expense/(benefit)
-
48
Deferred tax expense/(benefit)
-
-
Discontinued operations
Total income tax expense
301
(33)
The applicable tax rate used for reconciling income tax expense on continuing operations is the Australian enacted corporate tax rate of 30%.  This rate was selected due to the significant management presence and intellectual property located in Australia.  The actual rate of tax applicable in particular jurisdictions may be higher or lower than 30%.
The enacted corporate tax rates across all jurisdictions are as follows:
Australia
30.00 %
Belgium
25.00 %
Canada
25.00 %
France
25.00 %
Hong Kong
17.00 %
India
41.60 %
Italy
24.00 %
Malaysia
24.00 %
New Zealand
28.00 %
Norway
22.00 %
Singapore
17.00 %
Sweden
21.40 %
Thailand
20.00 %
United Kingdom
25.00 %
USA
21.00 %
36
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
6           Income Tax Expense
(a)
Reconciliation of income tax to accounting profit/(loss):
2023
2022
$'000's
$'000's
(2,470)
(8,369)
Loss before income tax from continuing operations
Prima facie tax credit at the nominal rate of 30% (2022: 30%)
(740)
(2,511)
Add:
Tax effect of:
(556)
-
- Impact of lower (higher) tax rate in overseas jurisdictions
-
(131)
- Research and development credit and other incentives
(2,393)
310
- Non-deductible (non-assessable) for taxation purposes
(48)
(201)
- Effects of FX translation of tax on overseas income
2,655
2,569
- Current year tax losses and credit not brought to account
265
1,047
- Current year temporary differences not brought to account
1
- Recoupment of prior year tax losses and credits not previously brought to account
2
-
Income tax expense
301
33
7           Discontinued operations
On 30 June 2023, the Group transferred Vix Technology Italia Srl, an ultimate subsidiary of Vix AFC Limited, for consideration of $3.2m, resulting in a profit on disposal before income tax of $584k to a related party (Kuba Group). The subsidiary was transferred to Kuba to allow the entity to focus on the local market through Kuba-developed products and to service Kuba's recently delivered project. As Vix Group and Kuba Group are 100% owned by ICM Mobility Group Ltd, the profit on the disposal of the entity was booked as a common control reserve.
2023
2022
$'000s
$'000s
Sales revenue
9,187
5,516
Other income
3
284
Cost of sales
(2,445)
(448)
Gross profit
5,352
6,745
(23)
Finance costs
(30)
Employee and third-party costs
(2,338)
(2,278)
IT and Hosting costs
(76)
(96)
Administrative expenses
(3,753)
(2,564)
Total expenses
(6,197)
(4,961)
Profit before income tax from discontinued operations
391
548
(174)
Income tax expense
(162)
Profit after income tax expense from discontinued operations
386
217
(162)
Exchange differences on translating foreign controlled entity
(248)
55
Total comprehensive Profit for the year
138
37
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
7           Discontinued operations
Cash flow information
2023
2022
$'000
$'000
Net cash generated from operating activities
152
270
Net cash used in investing activities
(40)
(80)
Net increase in cash and cash equivalents from discontinued operations
112
190
Carrying amounts of assets and liabilities disposed
2023
2022
$'000's
$'000's
Cash and cash equivalents
2,704
376
Trade and other receivables
2,061
3,688
Inventories
269
210
Other current assets
(37)
91
Property, Plant and Equipment
107
90
Other non-current assets
312
226
Total assets
4,681
5,416
Trade and other payables
1,836
1,747
Other current liabilities
131
160
Other non-current liabilities
(39)
252
Total liabilities
2,159
1,928
Net assets
2,522
3,488
Details of disposal
Total sale consideration
3,268
Carrying amount of net assets disposed
(2,522)
Derecognition of foreign currency reserve
(162)
Common Control reserve
(584)
Profit on disposal before income tax
-
38
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
8           Cash and cash Equivalents
2023
2022
$'000
$'000
Cash on hand
1
2
Bank balances
3,923
8,091
3,924
8,093
Reconciliation of cash
Cash and Cash equivalents reported in the statement of cash flows are reconciled to the equivalent items in the statement of financial position as follows:
2023
2022
$'000
$'000s
Cash and cash equivalents
8,093
3,924
Balance as per statement of cash flows
3,924
8,093
9           Trade and other receivables
2023
2022
$'000's
$'000's
CURRENT
Trade receivables
15,282
9,492
Provision for expected credit loss - specific provision
(a)
(403)
(576)
Provision for expected credit loss - general provision
(181)
(70)
(a)
8,846
14,698
Prepayments
5,444
5,358
Contract assets
15,690
15,291
Contract assets - expected credit loss
(18)
(22)
Other receivables
2,745
3,287
Total current trade and other receivables
38,559
32,760
2022
2023
$'000
$'000
NON-CURRENT
Trade debtors' retention
156
153
Performance bonds
1,373
299
Performance bonds - expected credit loss
(15)
(10)
Related party receivables
1,511
7,558
Total non-current trade and other receivables
8,000
3,025
39
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
9           Trade and other receivables
The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements.
(a)      Impairment of receivables
The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables, lease receivables and contract assets.   To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.  The loss allowance provision as at 30 June 2023 is determined as follows, the expected credit losses incorporate forward looking information.
> 90
> 90
> 30 days overdue
> 60 days overdue
> 90 days overdue
days overdue (low risk)
days overdue (high risk)
30 June 2023
Current
Total
Expected loss rate (%)
0.02%
0.07%
3.77%
6.45%
-
84.46%
Gross carrying amount ($'000)
6,177
1,413
398
822
-
682
9,492
Specific provision ($'000)
-
-
-
-
-
576
576
ECL provision ($'000)
1
1
15
53
-
-
70
> 90
> 90
> 30 days overdue
> 60 days overdue
> 90 days overdue
days overdue (low risk)
days overdue (high risk)
30 June 2022
Current
Total
Expected loss rate (%)
0.2%
2.6%
2.1%
43.7%
-
65.7%
Gross carrying amount ($'000)
10,828
2,202
1,482
156
-
614
15,282
Specific provision ($'000)
-
-
-
-
-
403
403
ECL provision ($'000)
23
58
31
69
-
-
181
Reconciliation of changes in the provision for impairment of receivables is as follows:
2023
2022
$'000
$'000
Opening impairment allowance calculated under IFRS9
617
905
Impairment loss recognised/(derecognised)
29
(288)
Balance at end of the year
646
617
40
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
9           Trade and other receivables
The Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (ECL).   The ECL on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the debtor has been placed under liquidation or has entered into bankruptcy proceedings.
(b)      Collateral held as security
The Group does not hold any collateral over any receivable balances.
10           Inventories
2023
2022
$'000
$'000
At cost:
Raw materials and consumables
221
1,610
Finished goods
4,044
9,294
9,515
5,654
Write downs of inventories to net realisable value during the year were $136k (2022: $159k).
41
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
11         Property, plant and equipment
2022
2023
$'000
$'000
Plant and equipment
12,371
11,854
At cost
(10,869)
(10,433)
Accumulated depreciation
1,502
1,421
Total plant and equipment
Leasehold improvements
857
772
At cost
(689)
(693)
Accumulated depreciation
168
79
Total leasehold improvements
1,670
1,500
Total property, plant and equipment
(a)
Movements in carrying amounts of property, plant and equipment
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:
Plant and Equipment
Leasehold Improvements
Total
$'000
$'000
$'000
Year ended 30 June 2023
Balance at the beginning of the year
1,502
168
1,670
Additions
459
48
507
Discontinued Operations
(57)
(50)
(107)
Depreciation expense
(461)
(99)
(560)
Depreciation eliminated on disposal
18
16
34
Foreign exchange movements
(40)
(4)
(44)
Balance at 30 June 2023
1,421
79
1,500
Plant and Equipment
Leasehold Improvements
Total
$'000
$'000
$'000
Year ended 30 June 2021
Balance at the beginning of the year
1,368
302
1,670
Additions
833
-
833
Disposals
(116)
-
(116)
Depreciation expense
(528)
(113)
(641)
Foreign exchange movements
(55)
(21)
(76)
Balance at 30 June 2022
1,502
168
1,670
42
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
12         Intangible Assets
2023
2022
$'000
$'000
Development costs
Cost
46,661
44,346
Accumulated amortisation and impairment
(26,208)
(19,422)
Net carrying value
20,453
24,924
Development costs 2023
Development costs 2022
Year ended 30 June 2023
$'000
$'000
Balance at beginning of year
24,924
27,067
Additions
4,171
7,354
Disposals
-
(20)
Amortisation
(7,621)
(7,546)
Foreign exchange movements
(1,021)
(1,931)
Closing value at 30 June 2023
20,453
24,924
13         Trade and Other Payables
2023
2022
$'000
$'000
CURRENT
Trade payables
9,347
6,860
Sundry payables and accrued expenses
5,200
8,098
Contract liabilities
17,284
20,501
Other payables
1,724
2,159
33,555
37,618
Trade and other payables are unsecured, non-interest bearing and are normally settled within 60 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.
2023
2022
$'000
$'000
NON-CURRENT
Other payables
1,693
1,470
Related party payables
174
305
1,867
1,775
43
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
14         Borrowings
2023
2022
$'000
$'000
NON-CURRENT
Premium Funding
14
-
Total non-current borrowings
14
-
Total borrowings
14
-
Summary of borrowings
The carrying value of borrowings classified as financial liabilities measured at amortised cost approximates fair value. The bank loans are secured by a charge over the Group's shares, a guarantee from a corporate related party and a personal guarantee from the Group's beneficial owner.
Lease liabilities are secured by the related leased assets.
Defaults and breaches
During the current and prior year, there were no defaults or breaches on any of the loans.
Short-term provisions
15
2023
2022
$'000
$'000
CURRENT
249
245
Warranties
3,387
3,941
Employee benefits
3,636
4,186
44
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
15        Short-term provisions
Employee benefits
Warranties
Total
$'000
$'000
$'000
3,941
245
4,186
Opening balance at 1 July 2022
1,041
135
1,176
Additional provisions
(1,307)
(172)
(1,479)
Provisions used
(47)
-
(47)
Discontinued operations
(241)
41
(200)
Foreign exchange movements
3,387
249
3,636
Balance at 30 June 2023
Employee benefits
Warranties
Total
$'000
$'000
$'000
4,535
389
4,924
Opening balance at 1 July 2021
1,615
(4)
1,611
Additional provisions
(1,440)
104
(1,336)
Provisions used
(769)
(244)
(1,013)
Foreign exchange movements
3,941
245
4,186
Balance at 30 June 2022
16        Long-term provisions
Provision for employee benefits
Provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service and those where employees are entitled to pro-rata payments in certain circumstances.
Provision for leased premises exit costs
Provision for leased premises exit costs represents the present value of the estimated costs to makegood leased properties at the end of the contractually committed leases.
Provision for warranties
Provision for service warranties represents the best estimate of the future sacrifice of economic benefits that will be required under the Group's warranty program. The estimate has been made on the basis of historical warranty trends.
Provision for onerous contracts
Provision for onerous contracts represents the least net loss on contracts in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Make good provision
Provision for onerous contracts represents the least net loss on contracts in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it
45
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
17         Non-current assets - right-of-use assets
2023
2022
$'000
$'000
Land and buildings; right-of-use
3,756
3,941
Less: accumulated depreciation
(1,031)
(2,819)
2,725
1,122
Plant and equipment; right-of-use
268
237
Less: accumulated depreciation
(160)
(144)
108
93
2,833
1,215
Land and buildings
Plant and equipment
Total
$'000
Right of Use Assets
$'000
At 1 July 2022
1,122
93
1,215
Addition
2,729
112
2,841
Disposal in the year
(2,490)
(86)
(2,576)
Depreciation in the year
(410)
(78)
(488)
Depreciated eliminated on disposal in the year
1,770
65
1,835
Foreign Exchange movements
4
2
6
Balance at 30 June 2023
2,725
108
2,833
The Company leases land and buildings for its offices, warehouses under agreements of between 1 to 10 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated. The Company also leases plant and equipment under agreements of between 3 to 5 years.
18        Lease liabilities
2023
2022
$'000
$'000
Current lease liability
609
876
Non-current lease liability
2,235
469
2,844
1,345
2023
2022
Maturity analysis
$'000
$'000
Within one year
609
876
In two to five years
1,500
469
In over five years
735
-
Total undiscounted liabilities
2,844
1,345
18        Lease liabilities
FY23
FY22
Lease Liabilities
$'000
$'000
At 1 July 2022
1,345
2,614
Discontinued operations
(251)
-
Additions
2,787
157
Interest Expense
250
170
Lease Payments
(1,063)
(1,335)
Disposal
(9)
(54)
(215)
(207)
Foreign Exchange movements
Balance at 30 June 2023
2,844
1,345
46
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
19         Issued Capital
2023
2022
Nominal
Nominal
Total Number
Total
$'000
Value (£) Per Share
$'000
Value (£) Per Share
Number
Ordinary shares
8,124,200
1
10,009
8,123,100
1
10,008
-
1
-
1
-
Preference shares
-
10,008
10,009
a)       Ordinary shares
2023
2022
$'000
$'000
At the beginning of the reporting period
10,008
10,004
Conversion of preference shares issued in the year
-
4
Shares issued
1
-
At the end of the reporting period
10,009
10,008
There were two lots of ordinary shares issued during the year. The first lot of 1,000 ordinary shares was issued on 31 December 2022 at a nominal value of £1 each (total USD 1,204). A second lot of 100 ordinary shares was issued on 30 June 2023 at a nominal value of £0.01 each (total USD 1). An amount of $5,552,232 subscribed for share capital in excess of the nominal value was recognized as a share premium (refer to note 20).
b)       Preference shares
2023
2022
$'000
$'000
At the beginning of the reporting period
-
4
Conversion to ordinary shares in the year
-
(4)
At the end of the reporting period
-
-
Both the ordinary and redeemable preference shares are owned by a single shareholder who has full rights to any profits made by the Company and the assets of the Company available for distribution following liquidation or otherwise.
20         Share premium
2023
2022
$'000
$'000
Share premium
69,649
64,097
Amount subscribed for share capital in excess of nominal value of the ordinary shares.
21         Reserves
(a)      Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income - foreign currency translation reserve. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
(b)      Business Combination Common Control Reserves
47
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
The Group's accounting policy for common control business combination is to apply a pooling-of-interests type method. The Group also adopts a "controlling party perspective" in applying this method. The assets and liabilities of acquired subsidiaries are, therefore, consolidated in the acquirer's financial statement using the book values as stated in the consolidated financial statements of the acquiree. The difference between the acquirer's investment cost and acquired subsidiaries is presented separately as Business Combination Common Control Reserves.
(c)      Capital Redemption Reserves
A statutory, non-distributable reserve into which amounts are transferred following the redemption or purchase of a company's own shares out of distributable profits. The reserve can be utilised in accordance with the company's articles.
22         Financial Risk Management
The Group is exposed to a variety of financial risks through its use of financial instruments.
The Group‘s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets.
The most significant financial risks to which the Group is exposed to are:
Liquidity risk
Credit risk
Market risk - currency risk and interest rate risk
Financial instruments used
The principal categories of financial instruments used by the Group are:
Trade and other receivables
Cash at bank
Bank overdraft
Trade and other payables
Floating rate bank loans
Related party loans
22         Financial Risk Management
Objectives, policies and processes
The Group's corporate treasury function provides services to the business, co-ordinates access to domestic and international markets, monitors and manages the financial risks relating to the operations of the Group.
The Group's overall risk management strategy seeks to minimise potential adverse effects of these risk on the financial performance of the Group. The Group does not actively use derivative financial instruments to hedge against these risks and does not trade derivative financial instruments for speculative purposes.
Liquidity risk
Liquidity risk refers to the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages liquidity risk by maintaining adequate cash reserves and continuous monitoring of actual and forecast cash positions.
Cashflow forecasts, detailing forecast expectation for a rolling 12-week period, are received weekly from the Group operating businesses. These forecasts are consolidated and reviewed by corporate treasury with a summary report being submitted to senior management.
48
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management's expectations that banking facilities will be rolled forward. The amounts disclosed in the table are the undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the statement of financial position due to the effect of discounting.
49
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
22         Financial Risk Management
Liquidity risk
The table below reflects the undiscounted contractual maturity analysis for financial liabilities.
Financial liability maturity analysis - Non-derivative
Weighted average interest rate
Within 1 year
1 to 5 Years
Over 5 Years
Total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
%
%
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Financial liabilities due for payment
Insurance premium funding
2.95
-
14
-
-
-
-
-
14
-
Total contractual outflows
2.95
-
14
-
-
-
-
-
14
-
The timing of expected outflows is not expected to be materially different from contracted cashflows.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
At the end of the reporting period, the Group's exposure to credit risk relates primarily to amounts due from customers. The maximum exposure to credit risk is represented by the carrying amount of each financial asset recognised in the statement of financial position. Cash is placed with a bank which is regulated.
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with a good payment record with the Group.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables.
50
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
22         Financial Risk Management
Credit risk
Credit risk is the potential risk of financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

At the end of the reporting period, the Group's exposure to credit risk relates primarily to amounts due from customers. The maximum exposure to credit risk is represented by the carrying amount of each financial asset recognised in the statement of financial position. Cash is placed with a bank which is regulated.

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with a good payment record with the Group.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables.
The following table details the Group's trade receivables exposure to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as 'past due' when the debt has not been settled, within the terms and conditions agreed between the Group and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there is objective evidence indicating that the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.
Past due but not impaired
(days overdue)
Gross amount
Past due and impaired
Within initial trade terms
< 30
31 - 90
91 - 180
$'000
$'000
$'000
$'000
$'000
$'000
2023
Trade receivables
9,492
-
1,413
398
1,504
6,177
2022
Trade receivables
15,282
-
2,202
1,482
770
10,828
The Group does not hold any financial assets with terms that have been renegotiated, but which would otherwise be past due or impaired.
The other classes of receivables do not contain impaired assets.
51
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
22         Financial Risk Management
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
(i) Foreign exchange risk
The Group is exposed to foreign currency exchange rate risk via transaction risk and translation risk.
Translation risk relates to the translation of the Group's foreign subsidiaries financial results to the functional currency, with movements recognised on consolidation in the foreign currency translation reserve. Transactional risk relates to individual transactions undertaken between entities within the Group in a currency other than the entity's underlying currency. Movements in foreign currency exchange rates that occur between the underlying currency and the nominated transaction currency are recognised in the consolidated statement of comprehensive income as realised foreign exchange gains or losses.
The Group does not enter into derivative financial instruments to manage its exposure to foreign currency risk, nor does it enter into or trade in derivatives for speculative purposes.
The table below summarises the Group's exposure to foreign exchange risk at the reporting date (all amounts stated in
USD):
2023
2022
$'000
$'000
Net assets (liabilities)
1521
206
AUD
530
362
EUR
-
3
GBP
3
1,693
CAD
-
30
NOK
571
684
NZD
-
3
SEK
(2,616)
(4,111)
THB
Total
9
(1,130)
The following table illustrates the sensitivity of the net result for the year and equity in regards to the Group‘s foreign currency exposure and the US dollar. There have been no changes in the assumptions calculating this sensitivity from prior years.
It assumes a +/- 10% change of the US Dollar exchange rate for the year ended 30 June 2023 (30 June 2022: 10%). This percentage have been determined based on the average market volatility in exchange rates in the previous 12 months.
If the US Dollar had strengthened and weakened against foreign currencies by 10% ((30 June 2022: 10%) and (10)% (30 June 2022: (10)%) respectively then this would have had the following impact:
52
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
22         Financial Risk Management
2023
2022
$'000
$'000
+10%
-(10)%
+10%
-(10%)
AUD
Net results
152
(152)
21
(21)
Equity
3,077
(3,077)
2,373
(2,373)
EUR
Net results
53
(53)
36
(36)
Equity
113
(113)
184
(184)
GBP
Net results
-
-
-
-
Equity
357
(357)
(2)
2
CAD
Net results
-
-
169
(169)
Equity
(104)
104
-
-
MYR
Net results
-
-
-
-
Equity
(53)
53
(29)
29
NOK
Net results
-
-
-
-
Equity
5
(5)
3
(3)
NZD
Net results
57
(57)
68
(68)
Equity
42
(42)
36
(36)
SEK
Net results
-
-
-
-
Equity
566
(566)
439
(439)
SGD
Net results
-
-
-
-
Equity
(1)
1
(2)
2
THB
Net results
(268)
262
(411)
411
Equity
24
(24)
22
(22)
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group's exposure to foreign currency risk.
53
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
22   Financial Risk Management
(ii) Interest rate risk
The Group is exposed to interest rate risk as funds are borrowed at floating and fixed rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
The Group's policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At the reporting date, the Group is exposed to changes in market interest rates through its bank borrowings, which are subject to variable interest rates.
2023
2022
$'000
$'000
Floating rate instruments
Borrowings
14
-
Net exposure
14
-
The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +0.50% and -0.50% (2022: +0.50%/-0.50%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions and economist reports.
The calculations are based on the financial instruments held at each reporting date. All other variables are held constant.
2023
2022
+0.50%
-0.50%
+0.50%
-0.50%
$
$
$
$
Net results
-
-
-
-
Equity
-
-
-
-
54
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
23
Tax assets and liabilities
Opening
Disposal
Charged to
Closing Balance
Income
Balance
000's
000's
000's
000's
$
$
$
Deferred tax liabilities
    Other
(426)
-
-
(426)
    Provision
-
-
48
48
Balance at 30 June 2022
(426)
-
48
(378)
    Other
-
426
(48)
378
Balance at 30 June 2023
(426)
426
-
-
(a)      Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following:
2023
2022
$'000
$'000
104,619
Unused tax losses - revenue
104,680
Unused tax losses - capital
1,502
1,446
14,397
Unused tax credit benefits
14,151
120,524
120,272
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therein.
24         Key Management Personnel Remuneration
Key management personnel remuneration included within employee expenses for the year is shown below:
2023
2022
$'000
$'000
2,099
Short-term employee benefits
1,372
-
Post-employment benefits
85
1,372
2,184
55
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
25         Employees
The average number of permanent employees during the period was 545 as detailed below:
Average No. of permanent employees:
2023
2022
Sales & Marketing
8
9
Technology & Operations
240
306
General & Administration
110
131
Management
14
15
372
461
Average No. of employees included in staff costs by region:
2023
2022
Australia
154
204
UK
129
128
Europe
42
71
North America
39
49
Southeast Asia
8
9
372
461
Staff costs consist of:
2023
2022
$'000
$'000
Wages and salaries
33,924
41,232
Social security costs
2,300
3,448
Benefits and other staff costs
1,391
2,109
Commission & Bonus
393
873
38,008
47,662
56
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
26         Interests in Subsidiaries
(a)
Composition of the Group
Principal place of business / Country of incorporation
Percentage Owned (%)* 2023
Percentage Owned (%)* 2022
Subsidiaries:
Vix Technology (Scandinavia) AB
100
100
Sweden
100
100
Vix Technology (Norway) AS
Norway
100
100
Vix Technology (Belgium) NV
Belgium
100
100
Vix Tech (France) SA
France
-
100
Vix Technology Italia Srl
Italy
Vix Technology UK Ltd
100
100
United Kingdom
Vix AFC (Sing) Pte Ltd
100
100
Singapore
Vix Mobility Pty Ltd
100
100
Australia
Vix Transportation Systems Pty Ltd
100
100
Australia
Vix Technology (Aust) Pty Ltd
100
100
Australia
Vix Holdings Pty Ltd
100
100
Australia
Vix Engineering Pty Ltd
100
100
Australia
Vix IP Pty Ltd
100
100
Australia
Vix Technology (USA) Ltd
100
100
United States
Vix Technology (East Asia) Ltd
100
100
Hong Kong SAR
Vix Technology (Bangkok) Co., Ltd
100
100
Thailand
Bangkok Payment Solutions Company Limited
30
30
Thailand
Vix Technology (Malaysia) Sdn Bhd
100
100
Malaysia
*The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.
27         Contingencies
Contingent Liabilities
The Group had the following contingent liabilities at the end of the reporting period:
2023
2022
$'000
$'000
5,455
Bank guarantees and performance bonds
2,032
57
Vix AFC Limited
Notes to the Financial Statements
For the Year Ended 30 June 2023
28         Related Parties
(a)      The Group's main related parties are as follows:
The parent entity, which exercises control over the Group, is ICM Mobility Group Ltd which is incorporated in England and Wales and owns 100% of Vix AFC Limited.
Key management personnel remuneration - refer to Note 24.
Subsidiaries - refer to Note 26.
Other related parties include close family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel or their close family members.
(b)      Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Balance outstanding
Owed to Vix
Owed by Vix
Purchases
Sales
000's
000's
000's
000's
$
$
$
$
ICM Corporate Services
15
-
-
-
KUBA (France) SA
-
286
427
-
KUBA (South Africa)
-
30
-
-
KUBA Italia
-
4,332
-
-
Kuba Pay Pte Ltd
-
31
-
-
Kuba Pay Ltd
-
91
-
-
Snapper Services Ltd
85
7
-
-
Littlepay Pty Ltd
-
2
1,780
-
Unwire
74
-
572
-
Total
174
4,779
2,779
-
29         Events Occurring After the Reporting Date
The financial report was authorised for issue on 8 August 2024 by the board of Directors.
There have been no other events subsequent to the reporting date requiring disclosure in this report.
30         Statutory Information
The registered office of the Company is:
Vix AFC Limited
P.O. Box 208, The Cottage Ridgecourt,
The Ridge, Epsom, Surrey, KT18 7EP
58
Vix AFC Limited
Parent Company accounts (under FRS 101)
Statement of Financial Position
For the Year Ended 30 June 2023
2023
2022
$'000s
$'000s
ASSETS
Note
CURRENT ASSETS
Cash and cash equivalents
43
7
Trade and other receivables
iii)
30,187
36,080
TOTAL CURRENT ASSETS
36,087
30,230
NON-CURRENT ASSETS
iv)
Investment in subsidiaries
48,435
48,435
TOTAL NON-CURRENT ASSETS
48,435
48,435
TOTAL ASSETS
84,522
78,665
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
v)
16,061
14,790
TOTAL CURRENT LIABILITIES
14,790
16,061
TOTAL LIABILITIES
14,790
16,061
NET ASSETS
69,732
62,604
EQUITY
vi)
10,008
10,009
Issued capital
vi)
64,097
69,649
Share premium
vi)
248
1,010
Foreign exchange reserve
vi)
9,231
9,231
Other reserves
vi)
(20,980)
(20,167)
Retained earnings
vi)
62,604
Total Equity
69,732
The financial statements were approved and authorised for issue on
8 August 2024
2024-08-08
by the Board of Directors and were signed on its behalf by;
___________________
Steven Bruce Gallagher
Chairman
59
Vix AFC Limited
Parent Company accounts (under FRS 101)
Statement of Financial Position
For the Year Ended 30 June 2023
Basis of accounting
The financial statements for the Company have been prepared under FRS 101 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (FRS 101") and the requirements of the Companies Act 2006. The Group financial statements have been prepared under IFRS and are shown separately. The Company financial statements have been prepared under the historical cost convention in accordance with applicable UK accounting standards and on the going concern basis.
Going concern
The Board of Directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. More details on the going concern are discussed in the going concern note in the Summary of Significant Accounting Policies for the Consolidated Financial Statements. Thus, the Board continues to adopt the going concern basis of accounting in preparing the financial statements.
Investments in subsidiaries
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.  The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Reserves
The Company's reserves are as follows:
Called up share capital represents the nominal value of the shares issued.
Share premium represents amounts paid in excess of the nominal value of shares.
Other reserves represent capital reserve recognised in equity, and;
Retained earnings represents cumulative profits or losses, net of dividends paid and other adjustments.
i)        Profit attributable to members of the holding company
As permitted by section 408 of the Companies Act 2006, a separate profit and loss account has not been presented for the holding company. During the year, the Company recorded a profit of $812k (2022: loss $2.9m). The Company booked an FX revaluation gain of $762k (2022: loss $2.3m) related to intercompany balances and the auditor's remuneration of $98k (2022: $96k).
ii)       Employee costs and numbers
The Company has no employees. All Group employees and Directors' remuneration are disclosed within the Group's consolidated financial statements.
iii)      Trade and other receivables
2022
2023
$'000
$'000
CURRENT
Prepayments
-
11
Amounts receivable from related parties
30,187
36,069
30,187
36,080
60
Vix AFC Limited
Parent Company accounts (under FRS 101)
Statement of Financial Position
For the Year Ended 30 June 2023
iv)    Investments in subsidiary undertakings
2023
2022
$'000
$'000
Vix Technology UK Ltd
8,703
8,703
Vix Mobility Pty Ltd
7,127
7,127
Vix AFC (Sing) Pte Ltd
-
-
Vix Technology (Scandinavia) AB
31,531
31,531
Vix Technology (East Asia) Ltd
1,074
1,074
Vix Technology (Malaysia) Sdn Bhd
-
-
48,435
48,435
v)    Trade and other payables
2022
2023
$'000
$'000
Amounts owed to related parties
15,967
14,736
Other payables
94
54
16,061
14,790
vi)    Borrowings
2022
2023
$'000
$'000
Amounts owed to Shareholder
-
-
           The nominal interest rate for the shareholder loan is nil (FY22: $nil)
vi)    Share capital and reserves
Foreign Currency Translation Reserve
2023
Capital redemption reserves
Share Premium
Ordinary Shares
Retained Earnings
Total
$'000s
$'000s
$'000s
$'000s
$'000s
$'000s
Balance at 1 July 2022
10,008
64,097
(20,980)
248
9,231
62,604
Issued during the year
1
5,552
-
-
-
5,553
Profit for the year
-
-
813
-
-
813
Other comprehensive gain
-
-
-
762
-
762
Balance at 30 June 2023
10,009
69,649
(20,167)
1,010
9,231
69,732
Details of share issues including the share premiums during the year are given in Note 19 and Note 20 of the consolidated financial statement.
61
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