NumberPorting
SIP Trunking
Virtual PBXNumber EnterpriseServices
HostedService
My Net Fone LimitedAnnual Report 2011
ContentsBoard of Directors 2
Chairman Review 3
What does MyNetFone stand for? 4
Our Solutions 5
Our Customers 6
Business Community 8
Directors’ Report 10
Corporate Governance Statement 18
Consolidated Statement of Comprehensive Income 24
Statement of Financial Position 25
Statement of Cash Flows 26
Statement of Changes in Equity 27
Notes to the Financial Statements 28
Directors’ Declaration 52
Auditor’s Independence Declaration 53
Independent Auditor’s Report 54
ASX Additional Information 56
Corporate Information 58
• Deloitte Technology Fast 500 Asia Pacific Awards for the 3rd consecutive year
• Deloitte Technology Fast 50 Australia Awards for the 3rd consecutive year
• City of Sydney Business Awards finalist 2010
Other awards we are proud to have earned...
AwardsThe awards received in 2011 financial year include:
Board of Directors
Mr René Sugo B.Eng. (Hon)Technical Director
Extensive experience in telecommunications. Formerly Technical Director of Lucent Technologies. Director of Symbio Networks Pty Ltd since 2002 andSymbio Wholesale Pty Ltd since 2009.
Director since March 2006
Mr Michael Boorne Electronics Eng. Dip.Non-Executive Director
A successful entrepreneur with extensive track record in combining technical expertise with commercial and corporate experience. Founder of Sprit Modems and Mitron Pty Ltd and previously a non Executive Director of Netcomm Ltd. Also Director of Boorne Management Pty Ltd and Earglow Pty Ltd.
Director since December 2006
Ms Catherine Ly B.Bus., CPAChief Financial Officer
Company Secretary since July 2006
Mr Terry Cuthbertson B. Bus., CAChairman
A Chartered Accountant, previously partner at KPMG with extensive corporate finance expertise and knowledge. Also Director of S2 Net Ltd, Montec International Ltd, Austpac Resources N.L.,Mint Wireless Ltd, Healthzone Ltd and South American Iron & Steel Ltd and OMI Holding Ltd.
Director since March 2006
Mr Andy Fung B.E. MComManaging Director
Extensive experience in telecommunications. Formerly Director of Business Development of Lucent Technologies. Director of Symbio Networks Pty Ltd since 2002 and Symbio Wholesale Pty Ltd since 2009.
Director since March 2006
Mr SugoMr Boorne
Mr Cuthbertson
Mr FungMs Ly
Chairman Review 3
AchievementsDuring the year MyNetFone led the market with its innovation, being the first service provider in Australia (and all of Asia Pacific) to be fully certified by Microsoft for interoperability with its revolutionary Microsoft Lync unified communications platform. This endorsement from one of the world’s largest software companies is a testament to the technical capa-bilities and quality of the team at MyNetFone, and has given us a unique advantage in the Business and Enterprise market.
In addition MyNetFone passed another milestone having deployed its 1000th Virtual PBX customer this year. The Virtual PBX system is a hosted phone system, meaning that customers do not need to purchase PBX equipment, but rather rely on a system hosted by MyNetFone in its data centre – commonly referred to as “the cloud”. This allows small to medium businesses to take advantage of leading edge technology and features without the costs and hassles of purchasing and maintaining their own equipment.
National BroadbandMyNetFone is preparing itself for the upcoming opportunities presented by the Federal Government’s National Broad-band Network (NBN). As this new network rolls out across the country it will provide an opportunity for competitive providers like MyNetFone to reach customers on a level playing field not previously seen in the Australian market. The new National Broadband Network will bring the ability to deliver high quality broadband to customers from all around the country. This will enable MyNetFone to deliver its innovative value added voice and internet services to residential and business customers alike. It will for example, facilitate the delivery of our innovative and market leading Virtual PBX service, and allow us to innovate even further to provide new products to Australian homes and businesses.
The FutureAt MyNetFone we are very excited about the opportunities that the future holds for us. We have the reputation of a solid and reliable service provider, we have the willingness and ability to innovate and create new products and services, and most importantly we have the team in place to carry us forward and allow us to grow at an ever increas-ing pace.
On behalf of the board, I would like to take this opportunity to thank all the staff and the management team in achiev-ing another very successful year. The board will continue to provide its full support to the team to ensure the company maintains its momentum of profitable growth and continues to deliver more amazing achievements and strong performance. I would also like to thank my fellow colleagues on the Board of Directors, and the Management team for their hard work and dedication in making MyNetFone one of Australia’s leading communications service providers.Most importantly I would like to thank our many shareholders for their continued and loyal support. We look forward to a very exciting year ahead which I am sure will be rewarding for all of us.
Terry CuthbertsonChairman
Fellow Shareholders,
With another year of solid growth behind it, MyNetFone has once again set new records for itself. Revenue rose by 12.5% to $13.6M due to consistent customer acquisition and delivery of new products and services. Gross profit rose by 9.8% to $5.7M yielding an EBIDTA of $1.08M and NPAT of $1.01M in what was a very tough economic climate. Now with a total base of over 92,000 services in operation, MyNetFone has established itself as a solid and credible communica-tions provider in the Australian market.
This solid performance has allowed the board to declare an annual dividend of 1.3 cents per share, (an increase of 73% on last year’s performance) rewarding shareholders for their continued loyalty. The increase in dividends reflects the Board’s confidence in the future growth potential of the business.
MyNetFone ticks the right boxes to deliver the right solutions to satisfy our business customers’ communications
needs and is the sound choice for business customers to stay connected.
Sound Choice Breeds SuccessMyNetFone’s tagline, “Your World, Connected” encompasses the company’s culture and focus which is to
understand the customers’ needs and deliver quality communications solutions that connect customers
seamlessly with their clients, suppliers, partners and stakeholders. MyNetFone is the sound choice for customers
to stay connected within their world.
As a growing business itself, MyNetFone truly understands the needs
and aspirations of our business customers, and offers solutions that
successfully combine quality and feature rich benefits with simplicity
and flexibility. The strong uptake of these IP based communications
solutions is a testament to the increasing acceptance by customers
of new generation, innovative services with great value and benefits. MyNetFone is well positioned to serve our
customers in this increasingly Internet (IP) centric world of communications including the upcoming NBN.
What does MyNetFone stand for? 4
Reliable &sound network
Cost savingsthat sound right
Flexibilitysounds great
Customer Support Teambased in Australia
Sound technologyinnovation
MyNetFone provides cloud hosted communications solutions to businesses of all sizes - whether they update to
a new phone system, move/expand to a new office or simply just want to make the most of their existing system
by exploiting new generation IP communications.
Our Solutions
Enterprise customers demand high service quality and reliability. MyNetFone delivers
on both counts with the most comprehensive VoIP infrastructure in Australia with
protected fibre network and built-in redundancy as well as a highy qualified and
experienced service team delivering 24/7 support backed by enterprise grade SLA’s.
Enterprise Solutions
MyNetFone delivers tailored solutions to meet the needs of business customers with“big”
business features without the high price tag. Customers could enjoy savings at up to 60%.
• Virtual PBX offers user friendly call features in the cloud without the need for up-
front investments in expensive PBX equipment.
• SIP Trunking – enables businesses to leverage their existing hardware investments
and eliminate expensive ISDN access and call costs.
MyNetFone is the first service provider in Australia
accredited to fully interwork with Microsoft’s Lync
Server.*
Business Solutions
MyNetFone offers a suite of simple to use, flexible solutions to meet the needs of home
offices and small businesses. The Small Office Solutions provide exceptional value and
help small businesses keep their overheads low and run their operations efficiently.
Small Office Solutions
* Microsoft Unified Communications Open Interoperability Program – Lync Server http://technet.microsoft.com/en-us/lync/gg131938.aspx#tab=4
Number Portability – You can
bring your phone number with
you when you join the MyNetFone.
MyNetFone Enhanced Services
Virtual Fax – You can send and
receive faxes via your email
address – no need for fax
equipment.
Meet-me Conference – You can
set up multiple calls to have a
conference, saving time and
travel.
Special Numbers – With 1300 &
1800 toll free and “gold”
numbers, you can make it easy
for your clients to reach you.
Our Customer Stories
ChallengeAs the owner of Australia’s number one camera, video and digital store, michaels, Peter Michael recognises
that the same progression is happening in communications as in cameras – the move from analog to digital.
michaels needed a flexible system from a reliable provider that met the store’s actual communications
requirements. The business’ existing PABX was sophisticated, but it was difficult to make changes to the system
to keep up with the requirements of a dynamic business. In addition, there was a high probability that once
anything did go wrong, it would be very expensive and difficult to fix.
SolutionMyNetFone provided to michaels a Virtual PBX system with 30 lines with Cisco SPA942 desktop handsets and
supplemented by Siemens C470IP cordless handsets, ideal for the retail environment.
The system, as Peter Michael describes it, is “designed for the ‘layman’ – anybody can set it up”. The switch to
the new system was smooth that “the customers didn’t notice, the staff didn’t notice – it was virtually seamless”,
says Mr. Michael.
BenefitsPeter Michael lists the following among the benefits michaels
has gained from the new Virtual PBX system:
• Future-proof system that will keep up as the business
grows
• Flexibility to add, remove or change lines as required
• Handsets are virtually plug & play
• 50% savings on communications costs since switching
to Virtual PBX
• Improved customer communications with national
toll free 1800 numbers, as well as local numbers in
different states
“MyNetFone has been the sound choice for our business, check it out yourself and you’ll
most likely find it is the sound choice for your business”
– Peter Michael, michaels Camera Video & Digital
michaels Camera Video & Digital
ChallengeAbigroup is one of Australia's leading national contractors with construction projects across multiple sites
nation-wide. When establishing site offices for new projects, Abigroup faces two main challenges: setting up a
phone and fax connection, and short timeframes for establishing the site offices.
At most of Abigroup’s construction sites, there are no existing landlines and installing new lines used to present
the company with a significant cost as well as a potential delay to a project’s delivery schedule.
SolutionMyNetFone’s solution addresses both of Abigroup’s communication challenges: cost and time. MyNetFone
provides Voice services over 3G internet connection to their various sites across Australia. The service is
connected to an existing phone handset and fax machine via a Voice Adaptor, delivering all communications
requirements for a small site office. Some larger sites have multiple adaptors with lines to key telephone systems.
This provides seamless telephone services to the end users. This is a solution that appears the same to the user
that found in any small to medium office at a fraction of the cost.
The solution was recommended to Abigroup by their Site Setup contractor company Sheahan & Associates
International, who investigated a number of alternatives before settling on MyNetFone as the most flexible and
efficient solution.
BenefitsThe communications solution provided by MyNetFone delivers a number of benefits to Abigroup and is the
perfect fit for their requirements.
Fast delivery MyNetFone services can be setup within hours, and the Voice Adaptor
delivered by express courier within days, so a new Site can be up and running
in minimum time. This is compared to several weeks’ worth of lead time
required for ‘traditional’ landline phone services.
Flexibility & portabilityThe portability of the MyNetFone service is a major drawcard for Abigroup – once a project is finished, the
3G Device, Voice Adaptor, phone handset and fax machine can simply be taken to another location where
there is 3G coverage, plugged in, and start working immediately.
ValueThe MyNetFone service is a very cost-efficient solution
for Abigroup’s requirements. Each combination of Voice
plan and Adaptor from MyNetFone, plus wireless modem
and internet tail sourced by Sheahan & Associates
International can be used over and over at various
projects with a low monthly voice plan fee. This is a
saving of at least 60% to 90%, depending on site
requirements, compared to Abigroup’s previous site
communications setups.
Abigroup
8Engaging the Business Community
Award SponsorshipMyNetFone prides itself on being Australia’s most
awarded IP communications provider. Having reaped
the benefits of being recognised for service quality and
financial performance with multiple awards, in FY10/11
MyNetFone has stepped up to sponsor the City of
Sydney Business Awards and help other businesses
achieve the same recognition.
MyNetFone has a solid history with the City of Sydney
Business Awards, having been a finalist twice and
winning the award in previous years, so it was natural
progression for MyNetFone to support the awards in a
sponsor capacity.
MyNetFone's support of the City of Sydney Business
Awards reflects our commitment to helping small
businesses grow. Our services facilitate this by delivering 'big business' features without the high price-tag,
helping small businesses present themselves professionally and communicate with their customers more
efficiently.
Thought LeadershipMyNetFone aims to not only lead innovation, but also
educate business owners about the opportunities
presented by the shift to IP communications.
The ‘Let’s Talk Business’ series of seminars was the
perfect opportunity to fulfill this aim, and MyNetFone
Technical Director, Rene Sugo was invited to be a guest
speaker at the Communications-themed seminar,
which focused on informing business owners about the
developments in communications, and helping them
utilise these to run their business more efficiently.
ExposMyNetFone participated in the inaugural MyBiz Expo.
The expo provided information about the latest
products and services designed to meet the needs of
small and medium enterprises.
Our participation allowed us to reach out to the small
business community, which accounts for 96% of all
Australian businesses*.
* Australian Bureau of Statistics: Counts of Australian Businesses,
most recent - June 2009
2011
Directors’ Report 10
FOR THE YEAR ENDED 30 JUNE 2011
Your Directors present this report, together with the financial statements of the Group, being the company andits controlled entities, for the financial year ended 30 June 2011
Information on DirectorsThe Directors of the Company at any time during or since the end of the financial year are:
Name and qualifications Experience, special responsibilities and other directorship
Mr Terry Cuthbertson
B.Bus., CA
Chairman
Mr Michael BoorneElectronics Eng. Dip.
Non-Executive Director
Mr Andy FungB.E. MCom
Managing Director
Mr René Sugo B.Eng. (Hon)Technical Director
A Chartered Accountant, previously partner at KPMG with extensive
corporate finance expertise and knowledge. Also Director of S2 Net Ltd,
Montec International Ltd, Austpac Resources N.L., Mint Wireless Ltd, South
American Iron & Steel Ltd, Sun Biomedical Ltd and OMI Holdings Ltd.
Director since March 2006
A successful entrepreneur with extensive track record in combining technical
expertise with commercial and corporate experience. Founder of Sprit
Modems and Mitron Pty Ltd and previously a non Executive Director of
Netcomm Ltd. Also Director of Boorne Management Pty Ltd and Earglow Pty
Ltd.
Director since December 2006
Extensive experience in telecommunications. Formerly Director of Business
Development of Lucent Technologies. Director of Symbio Networks Pty Ltd
since 2002 and Symbio Wholesale Pty Ltd since 2009.
Director since March 2006
Extensive experience in telecommunications. Formerly Technical Director of
Lucent Technologies. Director of Symbio Networks Pty Ltd since 2002 and
Symbio Wholesale Pty Ltd since 2009.
Director since March 2006
Company Secretary
Ms Catherine Ly B.Bus., CPA, is Chief Financial Officer for the Company and has been appointed as Company
Secretary since July 2006.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Directors’ Report 11
For the year ended 30 June 2011
Principal Activities and Significant Changes in Nature of ActivitiesThe principal activity of the Group during the course of the year was to provide VoIP telephony, broadband
Internet and other enhanced services to residential and enterprise customers.
In the financial year, the Group primarily derived its revenue from fees and call charges from residential and
enterprise customers as well as from sales of customer premises equipment.
There was no significant change in the nature of the business activities of the Group during the year.
Operating Result The consolidated profit of the Group for the financial year after providing for income tax amounted to
$1,005,197 (2010: $1,973,565).
Review of Operations
A review of the operations of the economic entity during the financial year and the results of those operations
are as follows:
1. Gross Revenue Increase and Profitable EBITDA and NPATThe Group delivered gross revenue of $13,604,905 and EBITDA profit of $1,084,700 for the year ended June 2011.
The results were achieved through organic growth of the customer numbers and service usage of MyNetFone’s
VoIP, broadband Internet and a range of enhanced services by residential and business customers. The gross
profit for the year was $5,720,047 (2010: $5,208,249) which was achieved due to the maintenance of margins.
The Net Profit After Tax (NPAT) was $1,005,197 with earnings per share at 1.91 cents.
The deferred revenue for the year increased 1.7% to $1,021,176 compared with $1,004,588 in the previous year.
The deferred revenue is the call credits deposited by the customers in their accounts for making future phone
calls. This revenue will be recognised once the customers have progressively used up the call credits.
Directors
T. Cuthbertson
A. Fung
R. Sugo
M. Boorne
Committee Meetings Attended
Board Audit
Eligible to Attend Attended Eligible to Attend Attended
11
11
11
11
11
11
11
11
2
2
2
2
2
2
2
2
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Board and Committee Meetings
From 1/7/10 to 30/6/11, the Directors held 11 board meetings and 2 audit committee meetings. Each Director’s
attendance at those meetings is set out in the following table.
Directors’ Report 12
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Full year endedJune 2011
Full year endedJune 2010 % increase
Gross revenue
Gross Profit
EBITDA
NPAT
Earnings per share
$13,604,905
$5,720,047
$1,084,700
$1,005,197
1.91 cents
$12,091,969
$5,208,249
$2,026,149
$1,973,565
3.76 cents
12.5%
9.8%
(46.5%)
(49.1%)
(49.1%)
2. Net Cash Flow The Net Cash Flow generated from operating activities increased by $487,464 for the financial year. The closing
cash balance was $2,452,732 (2010: $1,965,268). The Company remains debt free with no overdraft or loan facili-
ties.
Business Outlook and GuidanceMy Net Fone Group continued to sign up new customers and recorded the highest number of 92,000 services in
operation as of July 2011.
The Group has experienced solid growth in the enterprise segment with the uptake of its Virtual (hosted, cloud
based) PBX service. As the service does not require significant upfront capital investments and delivers flexibility
and enhanced features, it proves to be popular with SME’s (small and medium enterprises) as well as businesses
with multiple locations, especially in some vertical market segments, e.g. retail, accounting firms. There are now
over 1,000 businesses around Australia using MyNetFone’s Virtual PBX service. This number is expected to grow
further with marketing campaigns underway to further promote the service and with the release of more
features in the financial year.
With the SIP Trunking service, the Group offers quality VoIP service to business enterprises that deploy physical
PBX equipment on their premises. Since the Group has undertaken extensive interworking testing with leading
brands of PBX equipment available on the Australian market, it expects the SIP Trunking service to grow strongly
as more businesses install new generation IP based PBX’s.
Customers moving across to take up the MyNetFone VoIP service inevitably want to retain their telephone
numbers as a number change would be detrimental to on-going business operations. The Group has now devel-
oped comprehensive, field proven systems and processes to implement number portability, whereby new
customers to the MyNetFone service are able to keep their existing telephone numbers. The Group’s capability
to offer number portability efficiently and seamlessly is a key market differentiator.
An innovative product which has enjoyed strong growth is MyNetFone’s Virtual Fax, with which customers can
send and receive faxes using their computer, without a fax machine. The Group will continue to develop innova-
tive IP based services that offer flexibility and convenience.
Directors’ Report 13
For the year ended 30 June 2011
Financial PositionThe net assets of the company have marginally increased to $386,523 as at June 2011 from $13,572 of the same
period last year due to business growth.
Significant Changes in the State of AffairsNo other significant changes in the economic entity's state of affairs occurred during the financial year.
After Balance Date EventsThe My Net Fone Board entered into Head of Agreement on 24 August, 2011 to acquire the whole of Symbio
Group. The details of this agreement were released to the market on 30 August 2011.
Except for the above, there were no other significant events after the balance date that would materially alter
the operations or financial performance of the company.
Future DevelopmentsDisclosure of information regarding likely developments in the operations of the consolidated entity in future
financial years and the expected results of those operations is likely to result in unreasonable prejudice to the
consolidated entity. Accordingly, this information has not been disclosed in this report.
Environmental IssuesThe Group’s operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
Dividends Paid or RecommendedDividends paid or declared for payment during the financial year are as follows:
Ordinary dividend paid on 15 October 2010 as recommended in last year’s report $394,166
Interim dividend of 0.5 cents per share paid on 18 March 2011 $262,778
Final ordinary dividend of 0.8 cents per share recommended to be paid 8 September 2011 to
shareholders registered at 25 August 2011 in respect of the financial year ended 30 June 2011 $420,444
The dividends are unfranked.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Directors’ Report 14
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
OptionsAt the date of this report, the unissued ordinary shares of My Net Fone Limited under option as follows:
Grant Date Date of Expiry Exercise price Number under Option
29 July 2010
26 October 2010
26 October 2010
31 August 2013
31 October 2013
31 October 2013
10 cents
14 cents
14 cents
400,000
2,000,000
1,000,000
A total of 3,000,000 options issued to directors were approved by the shareholders in the AGM held on 26
October 2010.
For details of options issued to directors and executives as remuneration, refer to the remuneration report.
Remuneration Report
Remuneration Philosophy
The remuneration philosophy of the Board currently is to recognise that in the early stage of growth the com-
pany needs to contain operating costs and so the salaries established for the Executive Directors are negotiated
at rates below market levels that would normally be available to persons with such experience and qualifica-
tions. At this time the Board has established salary arrangements for the key executives which is commensurate
with their level of experience. As the company matures the Board will review its approach to setting remunera-
tion levels by balancing short and long term benefits and linking remuneration to performance. The Board may
issue options to employees under the Company Employee Option Plan as set out in Note 13 to the financial
statements.
Remuneration Details of Key Management Personnel for the Year Ended 30 June 2011
For all the Key Management Personnel, only basic salaries and fees, bonuses and superannuation were granted
during the year, no other short term benefit, long term benefit, performance related or share based payments
were paid in the year except for the options disclosed above. No bonuses were granted during the year.
Details of the nature and amount of benefits and payments for each Director of the Company and each of the
named company executives who receives the highest remuneration are:
Directors’ Report 15
Group Key Management
Personnel
Bonus$
Non-executive
Mr T. Cuthbertson
Mr M. Boorne
Executive
Mr A. Fung (Managing Director)
Mr R. Sugo (Technical Director)
Total
Management Executives
Mr L. Tai (Director)
Ms C. Ly (Chief Financial Officer)
Total
59,125
37,625
208,555
208,555
513,860
60,000
127,085
187,085
5,321
3,386
18,770
18,770
46,247
5,400
11,438
16,838
7,141
7,141
14,281
14,281
42,844
-
4,067
4,067
71,587
48,152
241,606
241,606
602,951
65,400
142,590
207,990
(Only two specified executives are included in the disclosure as there are only four specified executives in total employed in the Company in 2011, two of whom are Executive Directors disclosed above.)
Directors
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Salary & fees$
Short Term Benefits
Superannuation$
PostEmployment
BenefitsShare Based
Payment Options Total
$
-
-
-
-
-
-
-
-
Options$
Securities Received that are Not Performance RelatedNo members of key management personnel are entitled to receive securities which are not performance based
as part of their remuneration package.
Share Based PaymentsThe terms and conditions relating to options granted as remuneration during the year to key management
personnel and other executives during the year are as follows:
These share based payments are for the options disclosed above. The details and valuation of these options
are set out in Note 13 to the financial statements. The fair value of the option was valued at grant date at 1.43
cents and 2.03 cents for 3 million and 200,000 options respectively.
The 3 million options were approved by shareholders in the AGM held on 26 October 2010; and 400,000 options
were granted under the Company Employee Option Plan by the board on 29 July 2010.
Group KeyPersonnel
Option(’000)
GrantDate
Grant Value$
VestedDuring Year
%
Expiry Date forVesting
Mr T. Cuthbertson
Mr M. Boorne
Mr A. Fung
Mr R. Sugo
Ms C. Ly
500
500
1,000
1,000
200
26/10/10
26/10/10
26/10/10
26/10/10
29/07/10
7,141
7,141
14,281
14,281
4,067
-
-
-
-
-
31/10/2013
31/10/2013
31/10/2013
31/10/2013
31/08/2013
Directors’ Report 16
The Company has entered into Executive Employment Agreements with Andy Fung and Rene Sugo. The
remuneration and terms of employment for other Key Executives are also set out in written agreements. Each
of these employment agreements are unlimited in term but may be terminated by written notice by either
party and by the Company making payment in lieu of notice.
Each of these agreements sets out the arrangements for total fixed remuneration, performance-related cash
bonus opportunities, superannuation, termination rights and obligations and eligibility to participate in the
employee equity-based incentive scheme. Executive salaries are reviewed annually. The Executive
Employment Agreements do not require the Company to increase base salary, incentive bonuses or to
continue the participants’ participation in equity-based incentive programs.
The Company may terminate the employment of the Key Executive without notice and without payment in
lieu of notice in some circumstances. This includes if the executive:
1. commits an act of serious misconduct;
2. commits a material breach of the Executive Employment Agreement;
3. denigrates or engages in any behaviour that may materially damage the reputation of, or otherwise
bring, the Company into disrepute; or is convicted of any criminal offence which would in the
reasonable opinion of the Board of Directors adversely affect the carrying out of the executive’s duties.
The Company may terminate the employment of the Key Executive at any time by giving the executive
notice of termination or payment in lieu of such notice. The amount of notice required from the Company
in these circumstances is set out in the following table:
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Name of key executive Company notice period Employee notice period Termination provision
Andy Fung 1 month 1 month 1 month base salary
René Sugo 1 month 1 month 1 month base salary
Leo Tai 1 month 1 month 1 month base salary
Catherine Ly 1 month 1 month 1 month base salary
Directors’ Interests in Shares and Options of the Company or Related Bodies CorporateAt the date of this Report, the particulars of shares and options held by the Directors of the company in the
company or in related bodies corporate which are required to be declared in the register of Directors' share
holdings are as follows:
Name of Director Share holding Options
Mr Andy Fung 13,488,955
Mr René Sugo 13,488,955
Mr Terry Cuthbertson 1,125,000
Mr Michael Boorne 4,225,533
Total 32,328,443
1,000,000
1,000,000
500,000
500,000
3,000,000
Directors’ Report 17
Directors’ BenefitsNo Director has received or has become entitled to receive, during or since the financial year, a benefit
because of a contract made by the company, controlled entity or related body corporate with a Director, a
firm which a Director is a member of or an entity in which a Director has a substantial financial interest.
Indemnifying Officer or AuditorNo indemnities have been given or agreed to be given or insurance premiums paid or agreed to be paid,
during or since the end of the financial year, to any person who is or has been an officer or auditor of the
company.
Proceedings on Behalf of CompanyNo person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is a party for the purpose of taking responsibility on behalf of the
company for all or any part of those proceedings. The company was not a party to any such proceedings
during the year.
Non-Audit ServicesThere were no amounts paid or payable to the auditors for non-audit services during the year.
Auditor’s Independence DeclarationA copy of the auditor's independence declaration as required under section 307C of the Corporations Act
2001 has been received and can be found on page 56 of the financial report.
This Directors’ Report, incorporating the remuneration report, is signed in accordance with a resolution of the
Board of Directors.
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Terry CuthbertsonChairman
Andy FungManaging Director
Sydney, 31 August 2011
Corporate Governance Statement 18
The Board of Directors of My Net Fone Limited is responsible for the corporate governance practices of the
consolidated entity. The Board guides and monitors the business and affairs of My Net Fone Limited on behalf
of the shareholders by whom they are elected and to whom they are accountable.
This statement outlines the main corporate governance practices adopted by the Company, which comply
with the ASX Corporate Governance Council Principles and Recommendations (2nd Edition, August 2007)
unless otherwise stated.
Principle 1: Lay solid foundations for management and oversight
The Board’s primary role is the protection and enhancement of long term shareholder value. To fulfil this role,
the Board is responsible for the overall corporate governance of the Group including formulating its strategic
direction, approving and monitoring capital expenditure, setting senior Executive and Director remuneration,
establishing and monitoring the achievement of management’s goals and ensuring the integrity of risk
management, internal control, legal compliance and management information systems. It is also responsible
for approving and monitoring financial reporting. The Board has delegated responsibility for the day to day
operation and administration of the Company to the Managing Director.
Principle 2: Structure the board to add value
The skills, experience and expertise relevant to the position of Director held by each Director in office at the
date of the annual report is included in the Directors’ Report. Directors of My Net Fone Limited are considered
to be independent when they are independent of management and free from any business or other
relationship that could materially interfere with, or could reasonably be perceived to materially interfere with,
the exercise of their unfettered and independent judgement.
The membership of the Board during the year ended 30 June 2011, including independent status, and date of
appointment was as follows:
Recommendation 2.1 requires that a majority of the Board should be Independent Directors. The Company
does not comply with this recommendation. The Board is 50% independent. Whilst the Company agrees with
the benefits of a majority Independent Directors, it believes that it can better achieve the results of the
Company with the current Board’s level of expertise without burdening shareholders with the additional costs
associated with adding further Independent Directors.
Recommendation 2.2 requires the Chairman be an Independent Director. The Company complies with this
recommendation. The Company believes that when the Chairman is a significant driver behind the business as
well as being a shareholder, he adds much value to the Company.
Name
Terry Cuthbertson
Michael Boorne
Andy Fung
Rene Sugo
Status
Non-Executive Independent Chairman
Non-Executive Independent Director
Executive Director
Executive Director
Date of Appointment
08 March 2006
19 December 2006
08 March 2006
08 March 2006
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Corporate Governance Statement 19
Recommendation 2.3 requires that the role of the Chairman and Chief Executive Officer of the Company is not
exercised by the same individual. The Company complies with this recommendation as the Chairman and the
Managing Director are two separate individuals.
Independent Directors
An Independent Director is considered independent:
a) who is not a member of management
b) who has not within the last three years been employed in an executive capacity by the
Company or been a principal or a professional adviser or consultant to the Company
c) is not a significant supplier to the Company
d) has no material contractual relationship with the Company other than as a Director, and
e) is free from any interest or business or other relationship, which could materially interfere with
the Director’s ability to act in the best interests of the Company
Based on the above criteria, two Non-Executive Directors including the Chairman were considered
independent during the financial year.
Independent Professional Advice and Access to Company Information
Each Director has the right of access to all relevant Company information and to the Company’s executives
and subject to prior consultation with the Chairman, may seek independent professional advice at the
company’s expense. A copy of advice received by the Director is made available to all other members of the
Board.
Board Processes
The Board has mandates and operating procedures which are reviewed on a regular basis. The Board has also
established a range of policies which govern its operation.
The Board holds a scheduled meeting every month and any other strategic meetings as and when
necessitated by the Company’s operations. The agenda for the meetings is prepared through the input of the
Chairman and the Company Secretary. Standing items include matters of Compliance and Reporting,
Financials, Shareholder Communications and Investment Strategy and Outcomes. Submissions are circulated
in advance.
With the exception of the Managing Director, Directors must retire by rotation and stand for re-election at the
AGM each year.
A performance evaluation for the Board and senior Executives has taken place in the reporting period.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Corporate Governance Statement 20
The Board Committees
Nomination Committee Recommendation 2.4 states that the Board should establish a Nomination Committee. Due to the size of the
Company it has not established a formal Nomination Committee and the functions of the Nomination
Committee are undertaken by a full Board. The composition of the Board is monitored (both in respect of size
and membership) to ensure that the Board has a balance of skill and experience appropriate to the needs of
the Company. When a vacancy arises, the Board will identify candidates with appropriate expertise and
experience and appoint the most suitable person.
Remuneration CommitteeRecommendation 8.1 states that the Board should establish a Remuneration Committee. Due to the size of the
Company it has not established a formal Remuneration Committee and the functions of the Remuneration
Committee are undertaken by a full Board. Non-Executive Directors are remunerated by way of director fee
and superannuation contributions.
The Chairman and the other Non-Executive Director of My Net Fone Limited are also Directors of several listed
and non-listed companies and are further remunerated by those Companies. Further detail is provided in the
Directors’ Report.
Audit CommitteeDue to the size of the Company it has not established a formal Audit Committee and the functions of the Audit
Committee are undertaken by a full Board. The Board is responsible for considering the effectiveness of the
systems and standards of internal control, financial reporting and any other matter at the request of the Board.
The external auditors attend meetings by invitation to report to the Board.
The Audit responsibilities of the Board are to ensure that:
• relevant, reliable and timely information is available to the Board to monitor the performance of
the Company
• external reporting is consistent with committee members’ information and knowledge and is
adequate for shareholder needs
• management process supports external reporting in a format which facilitates ease of understanding
by shareholders and institutions
• the external audit arrangements are adequate to ensure the maintenance of an effective and
efficient external audit involving,
review of the terms of engagement, scope and auditor’s independence;
recommendation as to the appointment, removal and remuneration of an auditor;
review of the provision of non-audit services provided by the external auditor ensuring
they do not adversely impact on audit independence.
• a review of the Company’s risk profile and an assessment of the operation of the Company’s
internal control system is performed.
The external auditor is required to attend the Annual General Meeting and is available to answer
shareholder questions. The Board as a whole monitors the performance of the annual & half-yearly audit
performed by the External Auditor. For details on the number of meetings of the audit committee held during
the year and the attendees at those meetings, refer to the Directors’ Report.
***
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Corporate Governance Statement 21
Principle 3: Promote ethical and responsible decision making
The Board expects all Executive and Non-Executive Directors to act professionally in their conduct and with the
utmost integrity and objectivity. All Executive and Non-Executive Directors must comply with the Company’s
Code of Conduct and Ethics (Recommendation 3.1).
The company encourages Directors to have a significant personal financial interest in My Net Fone Limited by
acquiring and holding shares on a long-term basis. Insider trading laws prohibit Directors and their associates
from dealing in the Company’s shares whilst in possession of price sensitive information that is not generally
available. Once the Directors have traded in shares or otherwise dealt with any securities, they should
immediately disclose this to the Board and Company Secretary to facilitate appropriate disclosure with ASX. A
Director or an entity controlled by Directors is not permitted to purchase or sell shares in the Company at other
times without prior consent of the Board. This policy does not preclude a Director or an entity controlled by a
Director from taking up or renouncing an entitlement to the Company’s shares or participating in the
Company’s Share Purchase Plan or the Dividend Reinvestment Plan (Recommendation 3.2).
Trading PolicyThe company’s policy regarding Directors trading in its securities restricts them from acting on material
information until it has been released to the market and adequate time has been given for it to be reflected in
the security’s prices.
The company has adopted a Securities Trading Policy disallowing Directors and employees from dealing in the
Company’s securities in the period between the end of the Company’s half year/full year and the lodgement
of those profit announcements with the ASX. Directors and employees also require the approval of the Board
prior to trading in the Company’s securities.
A copy of the Securities Trading Policy is available on the Company’s website at www.mynetfone.com.au in
the Corporate Governance section.
Principle 4: Safeguard integrity in financial reporting
The Company’s Board is committed to ensuring the adoption of processes which are aimed at providing
assurance that the financial statements and related notes are in accordance with applicable accounting
standards and provide a true and fair view. Compliance with these procedures and policies is subject to review
by the external Auditor. The Board also evaluates the performance and independence of the external Auditor
on an annual basis.
The Managing Director and the Chief Financial Officer provide the Board with written confirmation that the
Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial
condition and that the operational results are in accordance with relevant accounting standards.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Corporate Governance Statement 22
Principle 6: Respect the rights of shareholders
Shareholders are entitled to vote on significant matters affecting the business which include the election and
remuneration of Directors, changes to the constitution and receipt of annual and interim financial statements.
Shareholders are strongly encouraged to attend and participate in the Annual General Meeting of
My Net Fone Limited to lodge questions to be responded by the Board and/or the Managing Director, and are
able to appoint proxies.
The Board informs shareholders of all major developments affecting the Company’s state of affairs on the
Company’s website at www.mynetfone.com.au.
A hard copy Annual Report will be mailed to shareholders who have requested to receive one at the close of
the financial year. An electronic version of the Annual Report will be available on the Company’s website.
The Company Secretary is responsible for ensuring My Net Fone Limited complies with its continuous disclosure
obligation and in conjunction with the Chairman, will decide whether any price sensitive information they
become aware of should be disclosed to the ASX. Where possible, all continuous disclosure releases to the ASX
are approved by the Board. Where time does not permit approval by the Board, the Chairman must approve
the release. Any information of a material nature affecting the Company is disclosed to the market through
release to the ASX as soon as the Company becomes aware of such information, in accordance with the ASX
Continuous Disclosure requirement.
Principle 7: Recognise and manage risk
The Board acknowledges that it is responsible for the overall system of internal control but recognises that no
cost effective internal control system will preclude all errors and irregularities. The Board has responsibility for
reviewing the risk profile and reporting on the operation of the internal control system. The Board (a) requires
executive management to report annually on the operation of internal controls (b) reviews the external audit
of internal controls and liaises with the external auditor and (c) conducts any other investigations and obtains
any other information it requires in order to assess the effectiveness of the internal control system. In respect of
the current financial year all necessary declarations have been submitted to the Board.
The Board identifies the following business risks as having the potential to significantly or materially affect the
company’s performance (a) administrative risks including operational, compliance and financial reporting (b)
market related risks.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Principle 5: Make timely and balanced disclosure
The Company’s Board is committed to keeping the investment community including shareholders and
regulators fully informed, in a timely and accessible manner, of events and risks that impact the Company. The
Board complies with its continuous disclosure obligations, as defined under the Corporations Act and ASX
Listing Rules, in respect of price sensitive information which is lodged with the ASX as soon as practicable and
before disclosure to external parties.
Corporate Governance Statement 23
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Administrative Risks
The Managing Director is responsible for recognising and managing administrative risks including (a)
operational, (b) compliance and (c) financial reporting. The Managing Director and the Chief Financial Officer
provide a declaration to the Board to certify that the Company’s financial statements and notes present a true
and fair view in all material respects of the Company’s financial condition and operational results and that
they have been prepared and maintained in accordance with relevant Accounting Standards and the
Corporations Act 2001. In respect of the current financial year all necessary declarations have been submitted
to the Board. In addition, the Managing Director and the Chief Financial Officer will confirm in writing to the
Board that the declaration provided above is founded on a sound system of risk management and internal
control and that the system is operating effectively in all material respects in relation to financial reporting risks.
Market Risks
The Board is primarily responsible for recognising and managing market related risks. In respect of the current
financial year, all necessary declarations have been submitted to the Board. The Board performs a risk review
on an annual basis to ensure that adequate controls are in place to mitigate risk associated with market risk,
fraud, transaction reporting errors, material reporting risks and compliance risk.
Principle 8: Remuneration fairly and responsibly
The Company’s remuneration policy and practices are designed to attract, motivate and retain high quality
staff. The Remuneration Report in the Director’s Report provides detail of remuneration of Non-Executive and
Executive Directors.
The Company’s Employee Share Option Scheme was approved by shareholders at the Company’s listing on
the ASX. Under this scheme, share options were issued to some senior staff members in this financial year. It is
expected more high quality staff will be issued share options in future.
Consolidated Statement of Comprehensive Income 24
Note
$ $
Revenue
Rendering of services
Cost of sales
Gross profit
Finance revenue
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Technology and support expenses
Other expenses
Finance costs
Profit/(Loss) before income tax
Income tax (expense)/benefit
Profit/(Loss) from continuing operations
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income for
the year net of tax
Total comprehensive income for the year
13,604,905
(7,884,858)
5,720,047
105,807
70,710
(119,348)
(586,444)
(219,482)
(3,428,443)
(120,000)
(354,791)
(18,506)
1,049,550
(44,353)
1,005,197
1,005,197
-
-
1,005,197
3.(a)
3.(a)
3.(b)
3.(c)
4
2011 2010
12,091,969
(6,883,720)
5,208,249
55,522
70,368
(143,471)
(372,379)
(214,750)
(3,111,345)
(120,000)
(342,744)
(18,649)
1,010,801
962,764
1,973,565
1,973,565
-
-
1,973,565
Earnings per share (cents per share)
- basic for profit for the year 1.91 3.76
- diluted for profit for the year 1.80 3.76
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
CONSOLIDATED GROUP
25
AS AT 30 JUNE 2011
CONSOLIDATED GROUP
$ $
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Current Assets
Non-current Assets
Property, plant and equipment
Deferred income tax assets
Formation cost
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Deferred revenue
Provisions
Total Current Liabilities
Non-current Liabilities
Provisions
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share based payment reserve
Accumulated losses
TOTAL EQUITY
2,452,732
392,150
62,128
2,907,010
49,562
918,411
1,950
969,923
3,876,933
1,728,310
1,021,176
648,742
3,395,228
92,182
92,182
3,490,410
386,523
3,990,515
1,099,309
(4,703,301)
386,523
5.
6.
7.
8.
4.
8.
9.
10.
11.
11.
12.
2011 2010
The above statement of financial position should be read in conjunction with the accompanying notes.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
1,965,268
190,156
62,128
2,217,552
84,712
962,764
1,950
1,049,426
3,266,978
1,606,239
1,004,588
596,996
3,207,823
45,583
45,583
3,253,406
13,572
3,990,515
1,048,333
(5,025,276)
13,572
Statement of Financial Position
Note
Statement of Cash Flows 26
$ $
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Borrowing costs
Net cash provided by/(used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Decrease/ (Increase) in security deposit
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Payment of dividends on ordinary shares
Net Cash provided by/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
14,850,699
(13,793,592)
105,807
(18,506)
1,144,408
-
-
-
(656,944)
(656,944)
487,464
1,965,268
2,452,732
5.
8.
7.
5.
The above statement of cash flows should be read in conjunction with the accompanying notes.
For the year ended 30 June 2011
13,680,551
(12,901,300)
55,522
(18,650)
816,123
-
-
-
-
-
816,123
1,149,145
1,965,268
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
CONSOLIDATED GROUP 2011 2010
Note
27
Issued Capital
$ $ $ $CONSOLIDATED GROUP
As at 1 July 2009
Profit for the year
Other comprehensive income for the year
Total recognised income and expense for the year
Dividends paid and provided
Share based payments
As at 30 June 2010
Profit for the year
Other comprehensive income for the year
Total recognised income and expense for the year
Dividends paid and provided
Share based payments
As at 30 June 2011
3,990,515
-
-
-
-
-
3,990,515
-
-
-
-
-
3,990,515
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Share basedpayment &
other
AccumulatedLosses Total
1,048,333
-
-
-
-
-
1,048,333
-
-
-
-
50,976
1,099,309
(6,604,675)
1,973,565
-
1,973,565
(394,166)
-
(5,025,276)
1,005,197
-
1,005,197
(683,222)
-
(4,703,301)
(1,565,827)
1,973,565
-
1,973,565
(394,166)
-
13,572
1,005,197
-
1,005,197
(683,222)
50,976
386,523
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Statement of Changes in Equity
Notes to the Financial Statements 28
For the year ended 30 June 2011
1. CORPORATE INFORMATION These consolidated statements and notes represent those of My Net Fone Limited and Controlled Entities (The
Consolidated Group).
The separate financial statements of the parent entity, My Net Fone Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 31 August 2011 by the Directors of the company.
The nature of the operations and principal activities of the Group are described in the Directors' Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance
with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards as issued by the IASB. Material
accounting policies adopted in the preparation of these financial statements are presented below and
have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets and
financial liabilities.
(b) Adoption of New and Revised Accounting Standards Certain new accounting standards and interpretations have been published that are not mandatory for
the 30 June 2011 reporting period. The Group's assessment of the impact of these standards (to the extent
relevant to the Group) and interpretations is set out below:
(i) AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising
from AASB 9 and AASB 2010 Amendment to Australian Accounting Standards arising from AASB 9
(December 2010) (effective from 1 January 2013)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial
assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early
adoption. The Group has not yet decided when to adopt AASB 9. However, it is not expected this will have
a significant impact on the Group's financial statements.
(ii) Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting
Standards (effective from 1 January 2011)
In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for account-
ing periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment
clarifies and simplifies the definition of a related party and removes the requirement for government-
related entities to disclose details of all transactions with the government and other government-related
entities. The Group will apply the amended standard from 1 July 2011. The amendments will not have any
effect on the Group's financial statements.
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
29
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (b) Adoption of New and Revised Accounting Standards (continued) (iii) AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial
Assets (effective for annual reporting periods beginning on or after 1 July 2011)
In November 2010, the AASB issued AASB 2010-6 Disclosures on Transfers of Financial Assets which amends
AASB 1 First-time Adoption of Australian Accounting and AASB 7 Financial Instruments: Disclosures to intro-
duce additional disclosures in respect of risk exposures arising from transferred financial assets. The Fund
intends to apply the amendment from 1 July 2011, however, the amendments will not have any impact
on the Group's disclosures.
(iv) Amendments to AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the
Annual Improvements Project (effective for annual reporting periods beginning on or after 1 July 2010 / 1
January 2011)
In June 2010, the AASB made a number of amendments to Australian Accounting Standards as a result of
the IASB's annual improvements project. The Group does not expect that any adjustments will be necess-
ary as the result of applying the revised rules.
(v) AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to
Australian Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013)
On 30 June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under
this framework, a two-tier differential reporting regime applies to all entities that prepare general purpose
financial statements. The Company is listed on the ASX and is not eligible to adopt the new Australian
Accounting Standards – Reduced Disclosure Requirements. The two standards will therefore have no
impact on the financial statements of the entity.
(vi) AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying
Assets (effective from 1 January 2012)
In December 2010, the AASB amended AASB 112 Income Taxes to provide a practical approach for
measuring deferred tax liabilities and deferred tax assets when investment property is measured using the
fair value model. AASB 112 requires the measurement of deferred tax assets or liabilities to reflect the tax
consequences that would follow from the way management expects to recover or settle the carrying
amount of the relevant assets or liabilities, that is through use or through sale. The amendment introduces a
rebuttable presumption that investment property which is measured at fair value is recovered entirely by
sale. The Group will apply the amendment from 1 July 2012. The amendments are not expected to impact
the Group.
(c) Principles of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
My Net Fone Limited at the end of the reporting period. A controlled entity is any entity over which My Net
Fone Limited has the ability and right to govern the financial and operating policies so as to obtain
benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly
through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the
existence and effect of holdings of actual and potential voting rights are also considered.
In preparing the consolidated financial statements, all inter-group balances and transactions between
entities in the consolidated group have been eliminated on consolidation. Accounting policies of sub-
sidiaries have been changed where necessary to ensure consistency with those adopted by the parent
entity.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
30
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Going Concern The Directors believe that the Group will be able to continue as a going concern and, as a consequence,
the financial report has been prepared on a going concern basis. This basis presumes that funds will be
available to finance future operations and the realisation of assets and settlement of liabilities will occur in
the normal course of business.
The Group incurred an operating profit of $1,005,197 (2010: $1,973,565) during the year ended 30 June
2011, and as at that date the Group's total assets exceeded total liabilities by $386,523 (2010: Group's total
assets exceeded liabilities by $13,572).
1/ Included in the current liabilities is $1,021,176 of deferred revenue which will be recognised as 2012
revenue when customers' credits are progressively used up. This deferred revenue does not represent a
gross cash outflow.
2/ Of the total amount of $1,600,388 of trade payables, $160,074 is owed to Symbio Networks Pty Ltd and
$1,342,083 is owed to Symbio Wholesale Pty Ltd; both of which are related parties to My Net Fone. Symbio
Networks and Symbio Wholesale have agreed to an extended payment term of the payable at a
commercial interest rate similar to bank overdraft to My Net Fone.
The Directors believe that the going concern basis of accounting is appropriate due to the expected cash
flows to be generated by the Group over the next twelve months. The Directors will closely monitor cash
flows as the Group grows and if revenues do not increase as expected, the Directors will look to contain
costs and negotiate with the related party supplier Symbio Networks to change and extend payment
terms. The Directors believe that these actions, if required, will be sufficient to ensure that the company will
be able to pay its debts as and when they fall due for the next twelve months at least.
Notwithstanding the above, the Directors acknowledge that there are a number of risk factors that could
materially affect the Group's future profitability and cash flows, which include, but are not limited to:
(i) Competition
There can be no assurance given in respect of the Group's ability to continue to compete profitably in the
competitive markets in which the Group operates. The potential exists for change in the competitive
environment in which the Group operates.
(ii) Management of Growth
The Group achieved a profit for FY10/11, however, there is still a risk the Group will have insufficient working
capital to meet its business requirements and the expansion of the Group will depend upon the ability of
management to implement and successfully manage the Group's growth strategy.
(iii) Reliance on Key Management
The responsibility of overseeing the day-to-day operations and strategic management of the Group is
substantially dependent upon its senior management and its key personnel. There can be no assurance
given that there will be no detrimental impact on the Group if one, or a number of, these employees
cease their employment.
(iv) New Products and Technological Developments
The Group's current core business of broadband telecommunications is highly competitive and is subject
to the introduction of new and improved products and services into the market on a regular basis.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
31
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Going Concern (Continued)
(v) Broadband Access Arrangements
The Group currently has certain access to the Internet backbone network. Terms of the supply of broad-
band are negotiated regularly. There is no guarantee that future access arrangements will be able to be
negotiated on acceptable terms.
(vi) Distribution Channels and Device Suppliers
Currently the Group benefits from its good working relationship with its distribution channels to promote its
products and services and with its device suppliers to provide its VoIP adaptors. There is no guarantee that
these relationships will continue in the future.
(vii) Agreement with Symbio
The Group is dependent upon the supply of services by Symbio pursuant to its contracts with Symbio
Networks Pty Ltd and Symbio Wholesale Pty Ltd, details of which are set out at Note 19. If, notwithstanding
its contractual obligations, Symbio were to fail to supply the group, there is no guarantee that the Group
could either obtain these services from another party or provide them itself in the short term.
(viii) Legislation, Regulation and Policies
Any material adverse changes in government or other regulatory organisation policies or legislation which
impacts on the telecommunications industry, may affect the viability and profitability of the Group.
(ix) Internet Access
The use of VoIP technology is dependent on quality and speed of access to the Internet. The market
growth of VoIP may be limited by the take up rate of broadband and other fast Internet access or by the
quality of such access.
(e) Reverse Acquisition
In accordance with AASB 3 Business Combinations, when My Net Fone Limited (the legal parent) acquired
My Net Fone Australia Pty Limited (the legal subsidiary), the acquisition was deemed to be a reverse
acquisition since the substance of the transaction was that the existing shareholders of My Net Fone
Australia Pty Limited have, through My Net Fone Australia Pty Limited, effectively acquired My Net Fone
Limited. Under reverse acquisition accounting, the consolidated financial statements are prepared as if
My Net Fone Australia Pty Limited had acquired My Net Fone Limited, not vice versa as represented by the
legal position.
(f) Critical Account Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events and are based on current trends and economic data, obtained both externally and within
the Group. Key estimates that have a significant risk of causing adjustments to the carrying amounts of
certain assets and liabilities within the next annual reporting period are:
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
32
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f) Critical Account Estimates and Judgments (Continued)
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by an
independent valuer using a Black-Scholes model. The assumptions are detailed in Note 13.
(g) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into
account any trade discounts and volume rebates allowed. The following specific recognition criteria must
also be met before revenue is recognised:
(i) Rendering of services
Revenue from telecommunication services are recognised when the services are provided to the
customer.
Deferred revenue represents the unused proportion of cash received in advance for call credits
determined on a specific account basis at balance date.
(ii) Interest income / Finance revenue
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial
assets, is the rate inherent in the instrument.
(h) Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor,
are charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis
over the life of the lease term.
(i) Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(j) Trade and Other Receivables
Trade receivables and other receivables, which generally have 30-90 day terms, are recognised and
carried at original invoice amount less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Group will not be able
to collect the debts. Bad debts are written off when identified.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
33
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (k) Foreign Currency Translation (i) Functional and presentation currency
Both the functional and presentation currency of My Net Fone Limited and its subsidiary is Australian dollars
($). Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency.
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the ex-
change rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet date.
All exchange differences in the consolidated financial report are taken to profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was determined.
(l) Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the
tax relates to items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an
asset or liability where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will be available against which the benefits of the
deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foresee-
able future.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
34
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (l) Income Tax (Continued) Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists;
and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in
which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(m) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in
the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cashflows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
(n) Property, Plant and Equipment Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess
of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
expected net cash flows that will be received from the asset’s employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable
amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the statement of comprehensive income during the financial period in which they are incurred.
Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life
to the consolidated group commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Furniture & Fittings – over 6 to 10 years
Office Equipment – over 3 to 5 years
IT Systems - over 2 to 4 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of comprehensive income. When revalued assets are sold,
amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
35
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (o) Financial Instruments Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the company commits
itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument
is classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or
loss immediately.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature
within 12 months after the end of the reporting period. (All other loans and receivables are classified as
non-current assets.)
(ii) Investments in subsidiaries held by the parent
Investments in subsidiaries held by the parent entity are recognised and subsequently measured at cost in
the separate financial statements of the Company, less any impairment.
(p) Impairment of Assets At the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of
pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by
comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(q) Trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods
and services received by the Group during the reporting period which remains unpaid. The balance is
recognised as a current liability with the amount being normally paid within 30 days of recognition of the
liability.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
36
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (r) Provisions Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net
of any reimbursement.
Provisions are measured at the present value of management's best estimate of the expenditure required
to settle the present obligation at the Statement of Financial Position date. If the effect of the time value of
money is material, provisions are discounted using a current pre-tax rate that reflects the time value of
money and the risks specific to the liability. The increase in the provision resulting from the passage of time
is recognised in finance costs.
(s) Employee Leave Benefits Provision is made for the Group’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have
been measured at the amounts expected to be paid when the liability is settled. Employee benefits
payable later than one year 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
wages increases and the probability that the employee may satisfy vesting requirements. Those cash
outflows are discounted using market yields on national government bonds with terms to maturity that
match the expected timing of cash flows.
(t) Contributed Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(u) Earnings per Share Basic earnings per share is determined as net Profit/(Loss) attributable to members of the group, adjusted
to exclude any costs of servicing equity (other than dividends), divided by the weighted average number
of ordinary shares.
Diluted earnings per share includes options outstanding which will have the potential to convert to
ordinary shares and dilute the basic earnings per share.
(v) De-recognition of Financial Assets and Financial Liabilities Financial assets are de-recognised where the contractual rights to receipt of cash flows expires or the
asset is transferred to another party whereby the entity no longer has any significant continuing involve-
ment in the risks and benefits associated with the asset. Financial liabilities are de-recognised where the
related obligations are either discharged, cancelled or expired. The difference between the carrying
value of the financial liability extinguished or transferred to another party and the fair value of considerat-
ion paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
37
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (w) Share-based Payment Transactions The Group provides benefits to its employees and Directors (including key management personnel) in the
form of share-based payments, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions).
The cost of these equity-settled transactions with employees and Directors is measured by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined by
an external valuer using a Black-Scholes model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on
the date on which the relevant employees and Directors become fully entitled to the award (the vesting
date).
At each subsequent reporting date until vesting, the cumulative charge to the Statement of
Comprehensive Income is the product of (i) the grant date fair value of the award; (ii) the current best
estimate of the number of awards that will vest, taking into account such factors as the likelihood of
employee turnover during the vesting period and the likelihood of non-market performance conditions
being met; and (iii) the expired portion of the vesting period.
The charge to the Statement of Comprehensive Income for the period is the cumulative amount as
calculated above less the amounts already charged in previous periods. There is a corresponding credit
to equity.
For the year ended 30 June 2011
Notes to the Financial Statements (continued)
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Notes to the Financial Statements 38
$ $2011 2010
(continued)
2. PARENT INFORMATION
The following information has been extracted from the books and records of the parent and has been prepared in accordance with accounting standards.
(a) Statement of Financial Position
(b) Statement of Comprehensive Income
446,817
152
62,128
509,097
2,206,520
5,000,100
7,206,620
7,715,717
36,200
420,444
456,644
-
456,644
7,259,073
8,805,515
1,099,309
(2,645,751)
7,259,073
(99,823)
(99,823)
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Current Assets
Non Current Assets
Other receivables
Investment in subsidiaries
Total Non Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Share based payment reserve
Accumulated losses
Total Equity
Total Loss
Total comprehensive loss
Guarantees
My Net Fone Limited has not entered into any guarantees, in the current or previous financial year, in relation to the debts of its subsidiaries.
Contingent Liabilities
No contingent liabilities existed at 30 June 2011.
Contractual commitments
At 30 June, My Net Fone Limited has not entered into any contractual commitments for the acquisition of property, plant and equipment.
423,827
444
62,128
486,399
2,930,227
5,000,100
7,930,327
8,416,726
31,417
394,166
425,583
-
425,583
7,991,143
8,805,515
1,048,333
(1,862,705)
7,991,143
(56,871)
(56,871)
Notes to the Financial Statements 39
CONSOLIDATED GROUP
$ $2011 2010
(continued)
3. REVENUES AND EXPENSES
(a) Revenue
Rendering of services
Finance revenue
Breakdown of finance revenue:
Bank interest receivable
(b) Other income
Rent received
Other
(c) Other expenses
Depreciation on property, plant and equipment
Accounting and audit fees
General expenses
Consulting fees
Legal fees
Listing fees
Registry fees
Merchant processing fees
Subscriptions and memberships
(d) Minimum lease payments
Operating lease – premises
(e) Employee benefits expense
Wages and salaries
Superannuation
Share based payments expense
Payroll tax
Workers’ compensation costs
12,091,969
55,522
12,147,491
55,522
55,522
58,004
12,364
70,368
52,584
36,450
71,475
(2,910)
1,890
14,342
17,688
145,512
5,713
342,744
193,347
2,777,535
244,746
-
132,865
10,600
3,165,746
For the year ended 30 June 2011
13,604,905
105,807
13,710,712
105,807
105,807
58,006
12,704
70,710
35,150
35,541
78,513
-
-
14,405
22,231
149,117
19,834
354,791
193,353
2,884,087
328,916
50,976
138,924
9,690
3,412,593
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Notes to the Financial Statements 40
$ $2011 2010
(continued)
4. INCOME TAX
303,240
6,756
(309,996)
(962,764)
(962,764)
303,240
6,756
(309,996)
(962,764)
(962,764)
(962,764)
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Entities in the Group have tax losses arising in Australia of $3,061,369
(2010: 3,151,972) that are available to be offset against future taxable
profits. A deferred tax asset relating to these losses of $918,411 has been
recognised as recoverable in the next two years.
Deferred tax assets to be recovered within 12 months
Deferred tax assets to be recovered after more than 12 months
The total deductible temporary differences in relation to the deferred
tax asset is $437,099 (2010: $409,272)
The Group has yet to decide whether it will form a tax consolidated group for tax purposes.
The components of tax expense comprise:
Current income tax charge
Unrecongnised temporary differences
Recoupment of prior year losses
Over/(under) provision in respect of prior years
Income tax expense/(benefit) reported in
Statement of Comprehensive Income
The prima facie tax on profit from ordinary activities before income tax is
reconciled to the income tax as follows:
The prima facie tax on profit from ordinary
activities before income tax at 30% (2010: 30%)
Unrecognised temporary differences
Recoupment of prior year losses
Over/(under) provision in respect of prior years
Income tax expense/(benefit) reported in
Statement of Comprehensive Income
CONSOLIDATED GROUP
314,865
39,946
(354,811)
44,353
44,353
314,865
39,946
(354,811)
44,353
44,353
44,353
338,899
579,512
388,087
574,677
Notes to the Financial Statements 41
CONSOLIDATED GROUP
$ $2011 2010
(continued)
5. CASH AND CASH EQUIVALENTS
7. OTHER FINANCIAL ASSETS
Current
Term deposits
Short term deposits are made for period of 6 months and earn interest at the respective short term deposit rates. The deposit was made for
the purpose of bank guarantee for office premises.
1,965,268
1,965,268
1,973,565
52,584
-
197,600
(962,764)
(597,920)
111,416
41,642
816,123
229,736
(20,000)
(19,580)
190,156
62,128
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Cash at bank and on hand
Reconciliation to Cash Flow Statement
For the purposes of the Cash Flow Statement, cash and cash equivalents comprise the following at 30 June 2011:
Cash at bank and on hand
Reconciliation of net profit after tax to net cash flow from operations:
Net profit/(loss)
Non-cash flows in profit:
Depreciation of plant and equipment
Share based payments expense
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in tax assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in deferred revenue
(Decrease)/increase in provisions
Net cash flow from operating activities
Current
Trade receivables
Less: Provision for doubtful debts
Other receivables
6. TRADE AND OTHER RECEIVABLES
2,452,732
2,452,732
1,005,197
35,150
50,976
(201,993)
44,353
122,071
16,588
72,066
1,144,408
394,659
(20,000)
17,491
392,150
62,128
Notes to the Financial Statements 42
$ $ $ $
Furniture &Fittings
(continued)
8. PROPERTY, PLANT AND EQUIPMENT
CONSOLIDATED GROUP
Year ended 30 June 2011
At 1 July 2010, net of accumulated depreciation and
impairment
Additions
Disposals
Depreciation charge for the year
At 30 June 2011, net of accumulated depreciation
At 30 June 2011
Cost
Accumulated depreciation and iimpairment
Net carrying amount
Year ended 30 June 2010
At 1 July 2009, net of accumulated depreciation and
impairment
Additions
Disposals
Depreciation charge for the year
At 30 June 2010, net of accumulated depreciation
At 30 June 2010
Cost
Accumulated depreciation and impairment
Net carrying amount
These assets are not impaired as at year end.
FORMATION COST
MNF Leasing Pty Limited
9. TRADE AND OTHER PAYABLES
Trade payables
Other creditors
Security deposit
(i) Trade payable are non-interest bearing and are normally settled on 30-day terms with non-related suppliers. Included in trade payable is
$160,074 and $1,342,083 payable to Symbio Networks and Symbio Wholesale respectively. Refer to Note 1(d) and Note 19.
OfficeEquipment IT Systems Total
For the year ended 30 June 2011
CONSOLIDATED GROUP
$ $2011 2010
80,167
-
-
(31,505)
48,662
211,697
(163,035)
48,662
111,921
-
-
(31,754)
80,167
211,697
(131,530)
80,167
4,545
-
-
(3,645)
900
68,596
(67,696)
900
18,901
-
-
(14,356)
4,545
68,596
(64,051)
4,545
-
-
-
-
-
43,812
(43,812)
-
6,474
-
-
(6,474)
-
43,812
(43,812)
-
84,712
-
-
(35,150)
49,562
324,105
(274,543)
49,562
137,296
-
-
(52,584)
84,712
324,105
(239,393)
84,712
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
1,950
1,461,884
141,855
2,500
1,606,239
1,950
1,600,388
125,422
2,500
1,728,310
$ $ $ $
Notes to the Financial Statements 43
CONSOLIDATED GROUP
$ $2011 2010
(continued)
10. DEFERRED REVENUE
Pre-paid calling credits
Deferred revenue relates to cash received from customers up front with respect to pre-paid calling credits. The balance represents the
unused call credits as at balance date.
11. PROVISIONS
CONSOLIDATED
As at 1 July 2010
Arising during the year
Utilised during the year
As at 30 June 2011
Current
Non-current
A provision has been recognised for employee entitlements relating to long service leave. In calculating the present value of future cash
flows in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and
recognition criteria relating to employee benefits have been included in Note 1.
1,021,176 1,004,588
Annual leave Long serviceleave
Total
394,166
683,222
(656,944)
420,444
420,444
-
420,444
202,830
171,880
(143,412)
228,298
228,298
-
228,298
642,579
901,701
(803,356)
740,924
648,742
92,182
740,924
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Proposeddividend
45,583
46,599
-
92,182
-
92,182
92,182
Notes to the Financial Statements 44
CONSOLIDATED GROUP
$ $2011 2010
12. ISSUED CAPITAL AND RESERVES
A ORDINARY SHARES
Shares issued and fully paid
Movements in ordinary shares on issue
At 1 July
Issued during the year:
At 30 June
3,990,515
(continued)
3,990,515
52,555,555
-
52,555,555
3,990,515
-
3,990,515
52,555,555
-
52,555,555
3,990,515
-
3,990,515
$2011 2010
Number of Shares $Number of Shares
Ordinary shares have the right to receive dividends as declared and in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
Under AIFRS reverse acquisition rules, the number of shares disclosed by the consolidated group are those of My Net Fone Limited whilst the value of shares disclosed by the consolidated group is an aggregation of My Net Fone Australia Pty Limited (Legal Subsidiary) and My Net Fone Limited (Legal Parent).
Movements during the yearThere was no movement during the year.
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
No. WAEP $ No. WAEP $2011 2011 2010 2010
B SHARE OPTIONS
-
3,400,000
-
-
-
-
3,400,000
3,400,000
Movements in ordinary shares on issue
Outstanding at the beginning of the year
Granted during the year
Granted during the year per placement
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Outstanding options as at year end
The outstanding balance as at 30 June 2011 is represented by:
- 400,000 options issued under a share based payment option scheme under which options to subscribe for the company’s shares have
been granted to certain executives and other employees with an exercise price of 10 cents each. The first tranche of 200,000 options is
exercisable from 01 August 2011 and the second tranche is exercisable from 01 August 2012. Both tranches are exercisable until 31 August
2013 (Refer note 13a).
- 2,000,000 options issued to Executive Directors approved by shareholders in the AGM held on 26 October 2010 with an exercise price of
14 cents each, exercisable from 24 November 2010 and until 31 October 2013 (Refer Note 13b).
- 1,000,000 options issued to Non-Executive Directors approved by shareholders in the AGM held on 26 October 2010 with an exercise price
of 14 cents each, exercisable from 24 November 2010 and until 31 October 2013 (Refer Note 13b).
-
0.14
-
-
-
-
0.14
0.14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CONSOLIDATED GROUP
Notes to the Financial Statements 45(continued)
13. SHARE BASED PAYMENT PLANS
No. WAEP $ No. WAEP $2011 2011 2010 2010
b. Share Options granted to the Directors
Movements during the year
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of and movements in share options
issued during the year:
-
3,000,000
-
-
-
3,000,000
3,000,000
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
The outstanding balance as at 30 June 2011 is represented by:
- 2,000,000 options issued to Executive Directors approved by shareholders in the AGM held on 26 October 2010 with an exercise
price of 14 cents each, exercisable from 24 November 2010 and until 31 October 2013.
- 1,000,000 options issued to Non-Executive Directors approved by shareholders in the AGM held on 26 October 2010 with an exercise
price of 14 cents each, exercisable from 24 November 2010 and until 31 October 2013.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2011 is 2.16 years (2010: Not
applicable).
The weighted average exercise price for options outstanding at the end of the year was 14 cents (2010: Not applicable).
-
0.14
-
-
-
0.14
0.14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Outstanding options as at year end
EOP - Refer Note a
Options granted to Directors - Refer Note b
Total
a. Employee Option Plan (EOP) The Board may issue options under the EOP to any employee of the Company and its subsidiaries, including Executive Directors and Non-Executive Directors.
Options will be issued free of charge, unless the Board determines otherwise. Each option is to subscribe for one share and when, issued, the shares will rank equally with other shares.
Unless the terms on which an option was offered specify otherwise, an option may be exercised at any time after one year from the date it is granted, provided the employee is still employed by the Company.
An option may also be exercised in special circumstances, that is, at any time within 6 months after the employee's death, total and permanent disablement, or retrenchment. An option lapses upon the termination of the employee's employment by the Company and, unless the terms of the offer of the option specify otherwise, lapses three years after the date upon which it was granted.
The exercise price per share for an option will be the average closing market price of the Company's share over the five trading days before their issue. The maximum number of options on issue under the EOP must not at any time exceed 5% of the total number of shares on issue at that time.
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
CONSOLIDATED GROUP
$ $2011 2010
400,000.00
3,000,000.00
3,400,000.00
-
-
-
Notes to the Financial Statements 46(continued)
14. COMMITMENTS AND CONTINGENCIES
Operating lease commitments – Company as lessee
The Company has renewed a commercial lease for building rental from Brenmoss Properties Pty Ltd and
Appreciate Group Pty Ltd. The term of the lease is for 3 years commencing on 1st May 2009 and ending on the 30th
April 2012. An additional rent for car parking is also attached with the lease.
The Company is entitled to sublet part of the premises to Symbio Networks Pty Ltd during the term of the lease. The
ratio between My Net Fone Limited and Symbio Networks Pty Limited is 70 to 30.
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
b. Share Options granted to the Directors (Continued)
Share options issued to Directors during the year
During the year options were issued to interests associated with the following Directors:
Mr Terry Cuthbertson (Chairman)
Mr Michael Boorne (Non-executive Director)
Mr Andy Fung
Mr Rene Sugo
Each option was issued free of charge and entitles the holder to subscribe for, and be allotted, one ordinary share in the capital of My Net Fone Limited.
Shares issued on the exercise of options will rank equally with all existing shares on issue, as at the exercise date.
The exercise price of each option to all Executive and Non-Executive Directors is 14 cents, exercisable from 24 November 2010. The expiry date for exercising these options is 31 October 2013. All options not exercised on or before the expiry date will lapse.
The expense recognised in the consolidated statement of comprehensive income in relation to share based payments is disclosed in Note 3. (e).
The weighted average fair value of options granted during the year was 0.14 cents (2010: Not applicable).
The fair value of equity settled share options granted is estimated as at the date of grant using a Black-Scholes model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used for the year ended 30 June 2011:
Number of options granted
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of option (years)
Option exercise price ($)
Share price at grant date ($)
Number
500,000
500,000
1,000,000
1,000,000
3,000,000
2011
3,000,000
7.4
72
4.33
2.16
0.14
0.14
400,000
7.4
72
4.33
2.21
0.10
0.09
Notes to the Financial Statements 47(continued)
16. AUDITORS’ REMUNERATION
Amounts due and receivable by MNSA Pty Ltd Chartered Accountants:
17. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Key Management Personnel
Mr Andy Fung (Managing Director)
Mr René Sugo (Technical Director)
Mr Terry Cuthbertson (Non-executive Chairman)
Mr Michael Boorne (Non-executive Director)
Mr Leo Tai (Director)
Ms Catherine Ly (CFO)
(b) Compensation of Key Management Personnel
The Group has applied the exemption under Corporations Amendments Regulation 2006 No 4 which exempts listed companies from
providing remuneration disclosures in relation to their key management personnel in their annual financial reports by Accounting
Standard AASB 124 Related Party Disclosures. These disclosures are provided on pages 6 to 8 of the Directors' Report designated as
audited.
– Audit and review of the financial report 35,000
CONSOLIDATED GROUP
$ $2011 2010
34,091
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
14. COMMITMENTS AND CONTINGENCIES (Continued)
CONSOLIDATED GROUP
$ $2011 2010
Within one year
After one year but not more than five years
More than five years
161,128
-
-
161,128
193,353
177,240
-
370,593
15. EVENTS AFTER REPORTING DATE
The Board of My Net Fone entered Heads of Agreement on 24 August 2011 to acquire the whole of Symbio Group. The details of this Agreement were released to the market on 30 August 2011.
The dividend as recommended by the Board will be paid subsequent to the balance date.
Since the reporting date, there have been no other significant events, other than those mentioned above, which would impact on the financial position of the Company as disclosed in the Statement of Financial Position as at 30 June 2011, and on the cash flow of the Company for the year ended on that date.
Notes to the Financial Statements 48(continued)
1 July 2009
Balance atbeginning of
period
13,488,955
13,488,955
2,478,440
1,125,000
2,335,104
32,916,453
-
-
-
-
-
-
Trade duringthe year
Optionsexercised
Balance atend ofperiod
30 June 201030 June 2010
Directors
Mr Andy Fung
Mr René Sugo
Mr Leo Tai
Mr Terry Cuthbertson
Mr Michael Boorne
Total
The above shareholdings are held indirectly through controlled entities.
13,488,955
13,488,955
2,478,440
1,125,000
4,225,533
34,806,883
1 July 2010
Balance atbeginning of
period
-
-
-
-
-
-
-
1,000,000
1,000,000
500,000
500,000
-
200,000
3,200,000
-
-
-
-
-
-
-
Optionsexercised/
lapsed
Balance atend ofperiod
30 June 201130 June 2011
- 3,000,000 options to Directors are exercisable from 24 November 2010 to 31 October 2013.
- 100,000 options issued to C Ly from Employee Options Scheme are exercisable from 01 August 2011 to 31 August 2013, and the other
tranche of 100,000 are exercisable from 01 August 2012 to 31 August 2013.
1,000,000
1,000,000
500,000
500,000
-
200,000
3,200,000
For the year ended 30 June 2011
(d) Share options of Key Management Personnel
Granted
-
-
-
-
1,890,429
1,890,429
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
(c) Shareholdings of Key Management Personnel
1 July 2010
Balance atbeginning of
period
13,488,955
13,488,955
2,478,440
1,125,000
4,225,533
34,806,883
-
-
-
-
-
-
-
-
-
-
-
-
Trade duringthe year
Optionsexercised
Balance atend ofperiod
30 June 201130 June 2011
Directors
Mr Andy Fung
Mr René Sugo
Mr Leo Tai
Mr Terry Cuthbertson
Mr Michael Boorne
Total
The above shareholdings are held indirectly through controlled entities. No shares were granted during the year.
13,488,955
13,488,955
2,478,440
1,125,000
4,225,533
34,806,883
Directors
Mr Andy Fung
Mr René Sugo
Mr Terry Cuthbertson
Mr Michael Boorne
Executives
Mr Leo Tai
Ms Catherine Ly (CFO)
Total
Notes to the Financial Statements 49(continued)
19. RELATED PARTY DISCLOSURE
The following table provides the total amount of transactions that were entered into with related parties for the
relevant financial year:
Related Party $ $ $ $
Sales torelated parties
97,061
-
120,000
-
917,107
7,291,485
-
-
Purchasesfrom related
parties
Amounts owedto related
parties
160,074
1,342,083
-
-
Amounts owedby related
parties
Consolidated Group
Symbio Networks Pty Limited (i)
Symbio Wholesale Pty Limited (ii)
Parent Entity
Subsidiary:
My Net Fone Australia Pty Limited (iii)
MNF Leasing Pty Limited (iii)
(i) The Group entered into a technology services Agreement which includes provision of platform resources, technical support, traffic minutes and customer
devices with Symbio Networks Pty Ltd (a director related entity) for a term of 5 years commencing on 1 April 2006. This Agreement was extended for a further
period of 5 years. The Agreement is at both normal market prices and on normal commercial terms with an agreed pricing structure which gives the Group the
ability to benefit from high volume commitments in order to reduce its cost base. Due to administrative changes within Symbio, the bulk of the Agreement has
been novated to Symbio Wholesale Pty Ltd starting on 1 May 2009 while the part of the Agreement relating to customer devices remains with Symbio Networks
Pty Ltd. Both Agreements will expire in April, 2016.
(ii) The Group has re-assigned parts of the Symbio Networks Agreement to Symbio Wholesale Pty Ltd starting from 01 May 2009. The Agreement with Symbio
Wholesale includes platform resource, technical support and traffic minutes .
(iii) Transactions within the Group have been eliminated in full on consolidation.
6,860
-
2,205,520
1,000
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
1 July 2009
Balance atbeginning of
period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
GrantedOptions
excrcised/lapsed
Balance atend ofperiod
30 June 201030 June 2010
Directors
Mr Andy Fung
Mr René Sugo
Mr Terry Cuthbertson
Mr Michael Boorne
Executives
Mr Leo Tai
Ms Catherine Ly (CFO)
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18. INVESTMENT IN SUBSIDIARIES
The consolidated financial statements include the financial statements of My Net Fone Limited and the subsidiaries
listed in the following table:
The investment in the abovementioned subsidiaries was not impaired during the year (2010: $Nil).
Country ofIncorporation
% EquityInterest
Investment$Name
My Net Fone Australia Pty Limited Australia 100 5,000,000
MNF Leasing Pty Limited Australia 100 100
(d) Share options of Key Management Personnel (Continued)
Notes to the Financial Statements 50(continued)
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
22. DIVIDENDS
CONSOLIDATED GROUP
$ $2011 2010
The Directors have recommended the payment of a dividend of 0.8 cent per fully
paid ordinary share, (2010: 0.75 cents) unfranked. The aggregate amount of the
proposed dividend expected to be paid on 8 September 2011 is 1.3 cents per share.
420,444 394,166
Net profit/(loss) attributable to ordinary equity holders of the parent (used in calculating basic EPS)
Net profit/(loss) attributable to ordinary equity holders of the parent (used in calculating diluted EPS)
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution:
Share options
Weighted average number of ordinary shares adjusted for the effect of dilution
There have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of
completion of these financial statements.
2011 2010
Consolidated Group
1,005,197
1,005,197
52,555,555
3,400,000
55,955,555
1,973,565
1,973,565
52,555,555
Nil
52,555,555
21. SEGMENT NOTE
The group operates in one business segment and one geographical segment being the telecommunications
segment in Australia.
20. EARNINGS PER SHARE
The following reflects the income and share data used in the basic earnings per share computations:
Notes to the Financial Statements 51(continued)
For the year ended 30 June 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash at bank and short term deposits.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk. The Board reviews and
agrees policies for managing each of these risks and they are summarised below:
Interest rate risk
The company has no interest bearing liabilities. Funds on deposit and the respective weighted average interest rate
are disclosed below.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and interest revenue through the use
of current accounts and short term deposits.
Credit risk
The company has no significant exposure to credit risk as the majority of its sales are pre-paid as at year end.
However, for credit sales the company only trades with recognised credit worthy third parties. It is the Group’s policy
that all customers who wish to trade on credit terms are subject to credit verification procedures. Moreover, the
company considers it is appropriate to provide a provision for doubtful debts for the year ended 30 June 2011.
Set out below is a comparison by category of carrying amounts and fair values of all of the Group’s financial
instruments recongnised in the financial statements.
Carrying amountConsolidated Group
2,430,971
21,761
392,150
62,128
1,728,310
Financial assets
Cash (weighted average effective interest rate 4.2%)
Cash at call (weighted average effective interest rate 5%)
Trade and other receivables
Other financial assets
Financial liabilities
On statement of financial position
Trade payables
2,430,971
21,761
392,150
62,128
1,728,310
Fair value Carrying amount Fair value
2011 2010
1,943,884
21,384
190,156
62,128
1,606,239
1,943,884
21,384
190,156
62,128
1,606,239
24. COMPANY DETALS The registered office of the company is: My Net Fone Limited Level 2, 10-14 Waterloo Street
Surry Hills NSW 2010
The principal place of business is: My Net Fone Limited Level 2, 10-14 Waterloo Street
Surry Hills NSW 2010
(weighted average effective interest rate 5.8%)
Directors’ Declaration 52
The Directors of the company declare that:
1. the financial statements and notes, as set out on pages 24 to 51, are in accordance with the Corporations Act 2001
and:
a. comply with Accounting Standards, which, as stated in accounting policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
b. give a true and fair view of the financial position as at 30 June 2011 and of the performance for the year
ended on that date of the company and consolidated group;
2. the Chief Executive Officer and Chief Financial Officer have each declared that:
a. the financial records of the company for the financial year have been properly maintained in accordance
with s 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with the Accounting Standards; and
c. the financial statements and notes for the financial year give a true and fair view;
3. After the date of this declaration, in the Directors’ opinion there are reasonable grounds to believe that the
company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Terry Cuthbertson
Chairman
Andy Fung
Managing Director
Sydney
Dated this 31st day of August 2011
My Net Fone Limited ABN 37 118 699 853 and Controlled Entities
53
MY NET FONE LIMITED ABN 37 118 699 853 AND CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION UNDER S 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF MY NET FONE LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2011 there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
MNSA PTY LTD
Mark SchiliroDirector
Dated in Sydney, this 31st day of August 2011
Auditors’ Independence Declaration
Independent Auditor’s Report 54
MY NET FONE LIMITED ABN 37 118 699 853 AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MY NET FONE LIMITED
Report on the Financial Report
We have audited the accompanying financial report of My Net Fone Limited (the Company) and My Net Fone Limited and
Controlled Entities (the consolidated entity), which comprises the statement of financial position as at 30 June 2011, and the
statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on
that date, a summary of significant accounting policies and other explanatory notes and the Directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the
financial year.
Directors’ Responsibility for the Financial Report
The Directors of the company are responsible for the preparation and fair presentation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that is free from material
misstatement, whether due to fraud or error. In Note 1, the Directors also state, in accordance with Accounting Standard
AASB 101: Presentation of Financial Statement, that the financial statements comply with International Financial Reporting
Standards (IFRS).
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements
relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report
is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
Our procedures include reading the other information in the Annual Report to determine whether it contains any material
inconsistencies with the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independent Auditor’s Report 55
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2011.
Auditor’s Opinion
In our opinion
a. the financial report of My Net Fone Limited and My Net Fone Limited and Controlled Entities is in accordance with
the Corporations Act 2001, including:
i. giving a true and fair view of the company’s and consolidated entity’s financial position as at
30 June 2011 and of their performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 16 of the report of the Directors for the year ended 30
June 2011. The Directors of the company are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with the Australian Auditing Standards.
Auditor’s Opinion
In our opinion the remuneration report of My Net Fone Limited for the year ended 30 June 2011, complies with section 300A
of the Corporations Act 2001.
MNSA PTY LTD
Mark SchiliroDirector
Sydney
Dated this 31st day of August 2011
ons Act 2011.
ASX Additional Information 56
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 19 August 2011.
(a) Distribution of equity securities
(i) Ordinary share capital
52,555,555 fully paid ordinary shares are held by 310 individual shareholders.
All issued ordinary shares carry one vote per share and carry the rights to dividends.
(ii) Options
3,400,000 unlisted options are held by 6 individual option holders.
Options do not carry a right to vote.
The number of shareholders, by size of holding, in each class are:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
The number of security investors holding less than a marketable parcel of ordinary shares is 18.
(b) Substantial shareholders
Ordinary shareholders
Avondale Innovations Pty Ltd
The Fung Family Super Fund
Mr W. G. Martin & Mrs. B. M. Martin
Amber (Asia) Pty Ltd
Mr M. J. Boorne
Fully Paid Ordinary Shares
7
40
64
167
32
310
Fully Paid
Number Percentage
13,488,955
10,000,000
3,545,171
3,488,955
3,187,249
25.67
19.03
6.75
6.64
6.06
57
(c) Twenty largest holders of quoted equity securities
Avondale Innovations Pty Ltd
The Fung Family Super Fund
Mr W.G. Martin & Mrs. B.M. Martin
Amber (Asia) Pty Ltd
Mr Michael John Boorne
L&C Pty Ltd
Boorne Gregg Investments Pty Ltd
Lee Superfund Management Pty Ltd
Kore Management Services Pty Ltd
Earglow Pty Ltd
Mr Christopher John Ayres
Mr A. McMillan & Mrs S. McMillan
Mr Michael Korber
Mr. Peter James Connolly
Cowoso Capital Pty Ltd
Mr N.W. Durnford & Mrs C.D. Durnford
Mr J.E. Burdekin & Mrs H.E. Burdekin
Mrs E.A. Moffat
HSBC Custody Nominees (Australia) Ltd
Endan Pty Ltd
(d) On-Market Buy Back
There is currently no on-market buy back.
Fully Paid
Number Percentage
13,488,955
10,000,000
3,545,171
3,488,955
3,187,249
2,478,430
1,610,000
1,125,000
1,125,000
1,025,784
700,000
519,033
506,655
458,867
400,000
370,000
310,000
308,370
300,000
263,794
45,211,263
25.67
19.03
6.75
6.64
6.06
4.72
3.06
2.14
2.14
1.95
1.35
0.99
0.96
0.87
0.76
0.70
0.59
0.59
0.57
0.50
86.04
58CORPORATE INFORMATION
DirectorsTerry Cuthbertson (Chairman)
Michael Boorne
Andy Fung
René Sugo
Company Secretary
Catherine Ly
Registered Office
Level 2,
10-14 Waterloo Street
Surry Hills NSW 2010
Australia
Principal Place of Business
Level 2,
10-14 Waterloo Street
Surry Hills NSW 2010
Austraila
Phone 61 2 8008 8000
Share Register
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
Australia
Phone 61 2 8280 7100
Solicitors
Colin Biggers & Paisley
Level 42
2 Park Street
Sydney NSW 2000
This annual report covers both My Net Fone Limited
as an individual entity and the consolidated group
comprising My Net Fone Limited and its subsidiaries.
The Group’s functional and presentation currency is AUD ($)
The company is listed on the Australian Securities
Exchange under the code MNF
The Annual General Meeting of My Net Fone Limited
will be held at Level 2, 10-14 Waterloo Street, Surry Hills
NSW 2010 at 10:30 am on 30 November 2011.
Bankers
Commonwealth Bank of Australia
Elizabeth & Foveaux Streets
Sydney NSW 2010
Australia
Auditors
MNSA PTY LTD
Chartered Accountants
Level 2, 333 George Street
Sydney NSW 2000
Australia
Annual Report
Copies of the 2011 Annual Report with
the Financial Statements can be downloaded from:
www.mynetfone.com.au/investor/annual-reports
My Net Fone Limited Annual Report 2011