43’0” Pole Tip
34’6” XARM 8’
Annual Report
For the period ending 31 March 2023
ikeGPS Group Limited
Table of Contents
CEO and Chair Commentary
Brand, Product, and Technology
Overview
Management Team
Corporate Governance
Disclosures
Consolidated
Financial Statements
4
14
26
29
38
46
CEO and Chair Commentary
FY23 - Year in Review
Dear Shareholders,
The 2023 financial year (FY23) marked another significant period for IKE, a year
in which we deepened our foothold in the North American market, and made
meaningful strides in financial and operational performance.
We are pleased to report a robust financial performance for FY23, with revenue
growth of 93% reaching $30.8 million, and with 89% of this revenue coming from
recurring subscriptions and reoccurring transaction sources. Gross margin was
$16.4m and EBITDA loss narrowed to $2.1m. Our balance sheet remains very
strong, with a cash & receivables position of $23.2m. This financial performance
significantly surpassed our targets.
The uplift can largely be attributed to the continued demand for our productivity
solutions in the North American electric utility and communication markets, along
with our strategic investment in technology development.
Our market is predominantly composed of approximately 3,000 electric utilities, 200
communications companies, and over 2,000 engineering service providers across
the U.S. Today, IKE serves approximately 380 enterprise accounts, representing
less than 6% of this potential customer base. This underscores the vast, untapped
market and long-term growth opportunity ahead of us.
In FY23, a significant part of our investments went towards advancing the next
generation of our product suite, including the next-gen PoleForeman and our
AI-driven solution, IKE Insight. These advanced products, launching in FY24, are
designed to dramatically improve the way our customers operate. By harnessing
the power of artificial intelligence and advanced engineering, we anticipate IKE
Insight will enable faster, safer, and more precise network engineering outcomes.
The upgraded capabilities of our next-gen PoleForeman solution, will also allow us to
further meet the unique structural analysis needs of our customers while enhancing
our software's value proposition and pricing power.
A key part of our sales strategy is to embed and expand the use of our software
within these large enterprise and infrastructure accounts. Our software directly
supports network engineering activities, a necessity in the face of several macro-
market tailwinds. This includes the anticipated investment of over $350b into fiber
and 5G infrastructure, an additional $60b into rural broadband network development,
the urgency to increase electric network capacity to meet carbon-zero targets, and
the pressure on electric utilities to harden and maintain their distribution networks.
In the words of CEO, Glenn Milnes, "The FY23 period saw another year of strong
momentum across IKE. We achieved very significant revenue and gross margin
growth and closed the period materially ahead of all internal stretch targets.
Operating leverage is evident via the scalability of our software products and our
disciplined approach to managing operating expenses. Our pipeline is strong.
Macro-market tailwinds across North America remain supportive, with IKE’s product
suite driving productivity outcomes for these large-scale network engineering and
capacity activities."
Looking forward, we expect to see continued growth in FY24, noting the potential
for Q1 FY24 transaction revenue to be softer on a run rate level due to the traditional
engineering practices of one or two utilities where a larger IKE customer is building
a fiber network. However, our products are poised to drive productivity in support of
these network engineering activities, ensuring our place in the market.
We extend our thanks to you, our shareholders, for your support and belief in our
vision. As we continue to innovate and grow, we do so with the confidence that we
are building something meaningful and valuable together.
Yours sincerely,
Alex Knowles
Chair and Non-Executive Director
Glenn Milnes
CEO & Managing Director
4
2022 ikeGPS Annual Report
2023 ikeGPS Annual Report
5
Financial performance highlights
We were pleased to hit all key growth targets through the period. Highlights include:
~
$30.8M
FY23 Revenue
~
$16.4M
93%~
FY23 Gross Margin, 66%
Growth vs PCP
FY23 Revenue Growth
vs PCP
53%~
89%~
~
$23.2M
FY23 Gross Margin %.
Opportunity for Growth via
Automation Tech
FY23 Recurring &
Reoccurring Revenue
Cash & Receivables on
the Balance Sheet
~
380
Enterprise Customers, ~6% of
North American market winning
~1 new customer per week
~
($2.1)M
EBITDA
Revenue FY23 of ~$30.8m (+93% PCP)
~89% of revenue is from recurring subscriptions and reoccurring transaction sources
Total Revenue and Mix
Takeaways
+ Revenue outturn FY23 of ~$30.8m
(+93% vs PCP)
+ Recurring Subscription and reoccurring
Transaction revenue (shown by the blue
and green bars) was ~$27.5m, representing
~89% of revenue mix
+ This revenue element continues to grow
positively because of the investment
into extending software products. This
underpins more predictable growth and
higher-quality revenue
IKE Revenue, Gross Margin,
and EBITDA
Takeaways
+ Gross margin FY23 of ~$16.4m (+66% vs PCP)
representing an FY23 gross margin percentage
of ~53%
+ EBITDA loss of ~$2.1m, continuing the YoY
improvement trend
Strong growth across all key metrics
Total Revenue
Platform Transactions
# of Billable Transactions
Platform Transaction Revenue
Gross Margin
Gross Margin %
Platform Subscriptions
# of Enterprise Customers
Platform Subscription Revenue
Gross Margin
Gross Margin %
Hardware & Other
Hardware & Services Revenue
Gross Margin
Gross Margin %
FY23
$30.8M
491K
$18.7M
$7.2M
39%
379
$8.8M
$7.7M
88%
$3.3M
$1.5M
45%
PCP (FY22)
% Change
$16.0M
+93%
349K
$6.4M
$2.9M
45%
319
$5.6M
$5.0M
89%
$4.0M
$1.9M
50%
+41%
+192%
+148%
+19%
+57%
+54%
-18%
-21%
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7
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Addressing a large market opportunity
across the U.S. communications segment
+
+
>$300B expected investment into fiber network development in the U.S over next 5+ years
>$50B expected investment into 5G network development in the U.S. over the next 5+ years
+ An additional >$60B expected investment into rural broadband development as part of the Biden
administrations new Infrastructure bill
+
+
>200 Communications companies competing to build a networks and win underlying customers
>1,000 engineering service providers supporting network development
IKE dramatically speeds up the network deployment process.
Addressing a large market opportunity
across the U.S. electric utilities segment
Over 3,200 electric utilities across the U.S. are facing common challenges
+ Outages
+ Environmental clean-up costs
+ Aging infrastructure
+ Significant legal liability
+ Potential catastrophic consequences
+ Regulatory and Engineering code compliance
+
Increased O&M costs
There are over 2,000 Engineering Service Providers who can work with IKE to improve the
engineering design and maintenance process of poles.
Fiber and 5G investment super-cycle in North America still in its early stages
Large additional market tailwinds emerging quickly in the U.S.
4 5 % G r o w t h i n Av g . C a p e x p . a .
$43B
$72B
$39B
2010
2018
2025
Projected Investments into 5G & Fiber Optic Infrastructure ($NZD)
Source: Bell Potter Initiation of Coverage Report, GSMA, American Tower. Note: Labeled Capex Figures reflect
Houlihan Lokey Estimates
Requirement for harder and higher
capacity distribution power networks
across all of North America
7+ year macro-market tailwind of fiber
deployment, much of it engineered on
distribution power poles
Small Cell Deployments across North
America, much of it engineered on
distribution power poles
Infrastructure development via
Engineering Service Providers
Massive engineering requirements for
an evolving distribution network
supporting an increase in global
consumption of electricity
>3,200
Electric Utilities in North America with long-term, recurring
distribution network hardening, joint use, and capacity needs for
electrical distribution
>$350B
Investment forecast in fiber in the US by 2025, representing >30M
attachments; communications infrastructure providers seeking
partners to manage new fiber attachments for every pole
800,000+
Small cell site expansions are expected by 2025 as communications
infrastructure providers look to speed up 5G rollout while reducing
cost and time of deployment
>1,000
Engineering Service Providers in the US subcontracted by
telecom and utilities providers to assist in infrastructure
development and deployment
50%+
Of US energy consumption will be comprised of electricity on the
distribution grid by 2050 to attain carbon net zero targets, and
power the new EV market, compared to current levels of just 20% =
engineering requirements to build capacity on the network
Source: Bell Potter Initiation of Coverage Report, GSMA, American Tower, Accenture, Grandview Research, Global Newswire, Ryse
Energy, World Economic Forum
8
9
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Growing network investment across Electric Utilities; support needed
for productivity solutions such as IKE over the coming decades
U.S. and Canadian Electric Distribution Capital Expenditures ($NZD in B)
ACTUAL
C A G R : + 5 . 3 %
$59.4
$60.9
$63.8
$66.7
44.9
46.4
49.3
52.2
$79.7
$73.9
59.4
65.2
3.6
3.6
7.2
2014
3.6
3.6
7.2
2015
3.6
3.6
7.2
2016
3.6
3.6
7.2
2017
3.6
3.6
7.2
2018
3.6
3.6
7.2
2019
$85.5
71.0
3.6
3.6
7.2
2020
FORCASTED
C A G R : + 3 . 5 %
$101.4
$104.3
$110.1
$92.8
$97.1
78.3
82.6
87.0
89.9
95.7
3.6
3.6
7.2
2021
3.6
3.6
7.2
3.6
3.6
7.2
3.6
3.6
7.2
3.6
3.6
7.2
2022
2023
2024
2025
A sticky tier-1 customer base in place
5 of the 10 largest Investor-Owned
Utilities (“IOUs”) in North America
>375 customers in North America,
with 60 logos added in FY23
Opportunities to:
+ Grow, upsell, and cross-sell IKE products into the existing customer base
+ Win new logos in the North American market, with >6,000 entities participating in this space
+ Expand into international markets
Communications
Canadian
Muni
Co-ops
US IOU
Electric Utilities
A full stack of pole and OSP products & solutions
PoleForeman
IKE Office Pro
IKE Insight
Engineering & Project Management
Pole loading analysis through
PoleForeman and Sagline
Standardized digitization and field
data collection methods, with
dashboard reporting
Bulk data and image processing
using low-code artificial intelligence
for distribution utility assets
IKE Analyze
Technology & automation driven service providing
pre-packaged data to accelerate engineering
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11
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Meet some of the team who have risen with us
Liz Etzel
Chris Chan
Support Engineer
IKE Product Manager
Electronic Technician
Operations Manager
Joined IKE in 2017 as a Support Engineer; Liz served on
the IKE Customer Brigade, sharing valuable insights into
the customer experience (CX) at a post-sale level with
her team members. Her appreciation for CX empathy is a
cornerstone of her role as the IKE Product Manager.
Joined IKE in 2008 as an electronic technician; Chris
leads as the operations manager for IKE. He tackles
challenges from untangling supply chain knots to ensuring
technology continuity for the team and customers of IKE.
Chris is an ultra-smart and undeniably kind human.
Jessica Walker
Sara Deere
IKE Analyst
IKE Analyze Manager
IKE Analyst
Systems Engineer
Joined IKE in 2017 as an Analyst; Jessica leads as the
IKE Analyze manager. She demonstrated her brilliance
in running the department while ranked among the
earth's most likable people. All while delivering customer
projects in scope and on time.
Joined IKE in 2018 as an Analyst; Today, Sara is a systems
engineer working to activate the IKE experience for
customers moving into the IKE ecosystem. During her
tenure at IKE, Sara has been recognized for running field
teams with the least recollects.
Blake Collins
Spencer Hankin
Support & Training Specialist
Solutions Eng. Mgr.
Account Manager
Senior GIS Manager
Joined the IKE support and training team in 2016; Blake
leads as the solutions engineering manager. He has a
wealth of knowledge from the field to IKE Office, including
the details in between. Blake plays a lynchpin role from
customer onboarding to the ongoing customer lifecycle.
Joined IKE in 2019 as an account manager; Spencer has
an uncanny ability to grok and rock GIS data in the age
of cloud-based workflows. As a senior GIS manager, he
generates hyperrealistic GEO-HUD displays to impress
with visually rich macro and micro pole analytics.
Talent on the rise
Our people come for the job and the reputation of working at IKE.
They stay for the accelerated development of their careers.
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13
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Brand, Product, and
Technology Overview
Growth of our brand
We're IKE, the PoleOS™ Company
"We're IKE, The PoleOS™ Company" is our tagline
which symbolizes our goal to be the underlying
platform standard in the North American market
to enable telecommunications, electric utilities,
and engineering service companies as it relates to
their pole & outside plant infrastructure projects.
See our brand in action
Watch the IKE Suite Video >
15
2023 ikeGPS Annual Report IKE Office Pro
Product & Technology
The IKE Office Pro solution continues to grow in software features and benefits for field-to-office
collaboration. This cloud platform enables customers to measure and manage pole projects and
data quickly and efficiently while allowing them to export IKE Records to their native systems.
Today, more than 400+ enterprise customers across North America trust the IKE Office Pro
solution. The payment model is via an annual subscription plus transaction fees.
16
17
2023 ikeGPS Annual Report2023 ikeGPS Annual Report 43’0” Pole Tip
12M Guy Wire
15 kV Insulator
34’6” XARM 8’
IKE Structural - PoleForeman and SagLine
Product & Technology
IKE's PoleForeman and Sagline product is one of the most trusted software tools used by engineering
designers at electric utilities, telecom groups, and engineering service providers who want accurate
and consistent analysis that enforces company-specific standards and compliance with minimum NESC
requirements. Today, five of the ten largest electric utilities in North America rely on PoleForeman and
SagLine for their distribution network design. The business model is an annual subscription.
18
19
2023 ikeGPS Annual Report2023 ikeGPS Annual Report 150614
Owner - BC Utility
Pole Height
40.00 ft
No Violations
50kV Transformer
CATV Amplifier - FiberCOM
IKE Insight
Product & Technology
With the IKE Insight solution, customers gain actionable insights from bulk data and images
using Artificial Intelligence and predictive analytics. Applications include National Electric
Safety Code violation assessment, Joint Use assessment, As-built assessments for future
network change detection, Right-Of-Way safety and compliance assessment, and others.
The business model is a subscription plus transaction fees.
20
21
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Heights of Attachment (HOA)
Pole Load Analysis (PLA)
PoleForeman
Pole Data
Pole Length/Class
55/2 Wood
Wood SYP ANSI 05.1
Pole Setting Depth
Soil Classification
None
Elevation
NESC Loading District
Heavy
Medium
Light
Ice
Wind
NESC Construction Grade
Grade B
Grade C (Crossing)
Grade C (Elsewhere)
Pole Top Extension
8
0
8
8
Make Ready Recommendations (MRR)
IKE Office
Blanding St. Collection
42’8” - 1395
Pole 1395
Pole 1396
Pole 1397
Pole 1398
Pole 1399
Pole 1400
Pole 1401
36’4” - 1/0 ACSR
ID
1395
Tag Photos
2
Type
Wood > 3 > 45˚
Location
Longitude 33.4124433
Latitude
-84.8189015
Altitude
239.60
IKE Photo
2
Power
Primary Circut #1
1/0 ACSR
Phase A Height
36’4”
Secondar Circut #1
1/0 ACSR
Phase A Height
Measure
Communications
Communications #1 1.00” CATV
Height of Attach.
Measure
IKE Analyze
Product & Technology
This year, IKE Analyze processed more than 400,000 poles resulting in engineering records in the
form of IKE records for 1. Heights of Attachment (HOA), 2. Pole Load Analysis (PLA), and 3. Make
Ready Recommendations (MRR). IKE Analyze customers typically enjoy more than a 50% reduction
in project costs for pole audits, make-ready engineering, and permit application processes. The
business model is via transaction fees.
22
23
2023 ikeGPS Annual Report2023 ikeGPS Annual ReportBlanding St. CollectionIKE OfficePole 1395Pole 1396Pole 1397Pole 1398Pole 1399Pole 1400Pole 14011395ID2Tag PhotosWood > 3 > 45˚TypeLongitude33.4124433-84.8189015Latitude239.60AltitudeLocation2IKE PhotoPowerCommunicationsPrimary Circut #11/0 ACSRPhase A Height 36’4”Secondar Circut #11/0 ACSRPhase A Height MeasureCommunications #11.00” CATVHeight of Attach.Measure IKE University
Product & Technology
IKE University has become a universal training asset for IKE Customers. Customers
consume content via video and instructor-led channels. More than 3,000 engineers
across the industry in North America have become certified IKE experts through the
IKE University curriculum. The business model is via per-course fees.
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25
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Management Team
Glenn Milnes
Chief Executive Officer & Managing Director
Lydia Siloka
Head of People
Lydia joined IKE in the second half of 2020 to lead our
people function and drive employee engagement. Lydia
joins IKE having been in People leadership positions across
a range of international and growth businesses including as
Senior People Manager at Amazon, Country People Director
at Thales Digital and Security, HR Manager, South Africa for
Teleperformance, and a HR leader at Victoria University.
Glenn Milnes is the CEO and managing director at ikeGPS,
where he is accountable for the company’s overall strategy,
performance, and growth. Glenn joined ikeGPS following
more than a decade of leadership roles at organizations
including International Communications group, Cable &
Wireless International, London, where he oversaw a group
of more than 30 fixed and wireless businesses, and No.
8 Ventures.
Before entering the business world, Glenn played
professional cricket in New Zealand, England, and The
Netherlands, representing New Zealand at various levels.
Glenn holds an MBA with Distinction from Imperial College
London, a Bachelor of Science with First-Class Honors
from Oxford Brookes University and a Bachelor of Physical
Education from the University of Otago.
Malcolm Young
Senior VP Structural Analysis and Head of PoleForeman
Jareth Rossking
Head of Engineering
As VP of Structural Analysis Malcolm is responsible for
the development and delivery of IKE’s structural analysis
products and for the quality control function for IKE
Analyze. Prior to joining IKE, Malcolm was founder and
president of PowerLine Technology – the developer of
IKE’s PoleForeman product – where he built the company
to the position of having some of the largest investor-
owned utilities in North America as embedded customers.
Before that Malcolm held senior engineering management
positions at Alabama Power. Malcolm is a qualified
structural engineer and is considered to be one of the
preeminent thought leaders in the U.S.A. market related to
power poles and a structural analysis.
Jareth leads our engineering teams across the IKE
Office Pro, IKE Structural (PoleForeman), and IKE Insight
solutions. He has 10+ years of experience in the information
technology industry specializing in the utility sector. Jareth
started his career as a software developer and grew into
the Head of Engineering role at AgilityCIS, where his team
consisted of 75 developers working across a number of
countries and timezones.
27
2023 ikeGPS Annual Report Chris Ronan
Chief Marketing and Brand Officer
Chris is IKE’s Chief Marketing Officer where he is
accountable for IKE’s marketing, communications,
brand, and customer experience. Prior to joining IKE, as
the founder & president of two leading North American
digital marketing agencies, Chris led marketing and brand
initiatives for some of the world’s leading companies
including Ford Motor Company, Dell, Air New Zealand,
Emirates Team New Zealand, and SouthWest Airlines among
others, helping these businesses shape their identities and
tell their stories. Before entering the world of commerce
Chris was a semi-professional road cyclist.
Chris DeJohn
Senior Vice President of Sales and Business Development
Chris brings a wealth of experience in the enterprise and
telecommunications market, having participated in the
emergence and transformation of some of the largest
data, cellular, and voice network infrastructure in the world
throughout his career. He has seen how modernization and
economics fundamentally changed with the application
of new technologies. With the nation’s utility industries
on the verge of a similar radical shift, Chris helps lead
IKE’s application of our cutting edge technology to guide
customers in navigating this evolution.
Corporate Governance
Leon Toorenburg
Chief Technology Officer
Brian Musfeldt
Chief Finance Officer
Leon Toorenburg is the Chief Technology Officer at ikeGPS,
where he leads the research department to investigate
how to leverage new technologies to simplify and speed up
ikeGPS customers’ workflow.
Leon is the founder of ikeGPS and has been instrumental
in the development of all ikeGPS’ products. He holds
numerous U.S. and international patents on measurement
technologies. Leon holds a Bachelor of Science from
Victoria University and Bachelor of Engineering with honors
from Canterbury University.
Brian is the CFO at ikeGPS, joining the company in June
2023. Brian brings over 25 years of experience relevant
to IKE’s industry and growth trajectory. Most recently he
was CFO of Also Energy Inc. Prior to this, Brian has held
CFO roles with companies including Zayo Bandwidth Inc,
MST Global Inc, and Intermap Technologies Inc. Brian has
an MBA from Colorado State University and began his
career as a Certified Public Accountant with six years at
KPMG / Arthur Anderson as an audit manager focused on
the high-tech & manufacturing sectors. In his new role,
Brian will be responsible for managing the organization's
financial activities, providing strategic insights, ensuring
compliance, and optimizing resources to support the
company's overall goals.
28
2023 ikeGPS Annual Report Board of Directors
Alex Knowles
Chair & Director
Glenn Milnes (MBA (Dist.), BSc (Hons), B PhD)
CEO & Managing Director
Appointed as a director in 2011 and Chair 2021
Appointed as a CE0 and Managing Director in 2013
Alex has investing and operating experience with
international companies in the information technology
and transportation industries. Based in Los Angeles,
he was formerly Chief Operating Officer of the largest
international freight forwarder and small parcel
consolidator in the U.S.
Glenn Milnes is the CEO and Managing Director at
ikeGPS, where he is accountable for the company's
overall strategy, performance, and growth. Prior to
leading ikeGPS, Glenn previously held senior executive,
strategy and corporate development positions in
the Communications industry with Cable & Wireless
International, and No 8 Ventures.
Rick Christie (MSc (Hons) Chemistry)
Independent Director
Appointed as a director and Chair in 2014
(Chair from 2014 - 2021)
Rick Christie is the former Chair of Ebos Group, where
he was Chair through much of its growth to become a
$7B+ business today. He has experience on a number
of other major boards, including TVNZ. Rick was
previously CEO of investment company Rangatira Ltd
and had 20 years of executive management experience
in the international oil and gas industry.
Mark Ratcliffe
Independent Director
Appointed as a director in 2020
Mark was the founding CEO of Chorus New Zealand
from 2007 to 2017 where he led the deployment of New
Zealand’s national fiber network. Prior to Chorus Mark
was CIO and COO of Spark (formerly Telecom NZ). Prior
governance roles include Director of 2 Degrees from
2017 to 2020. The majority of his current portfolio is in
the Infrastructure Sector and he is currently the Chair
of First Gas, Tuatahi Fast Fibre, and a number of other
private and public sector boards.
Fred Lax (MSEE AND BSEE)
Independent Director
Appointed as a director in 2014
Fred Lax is an executive leader with extensive global
experience in the telecommunications industry and
related technologies. Based in California, he is a former
director of NASDAQ listed Ikanos Communications Inc.
(acquired by Qualcomm Atheros), and former Chief
Executive Officer and President of NASDAQ listed
Tekelec, Inc.
ikeGPS Group Limited (“the Group”) is a New Zealand company. Its shares are quoted on the New Zealand Stock
Exchange (NZX) and Australian Securities Exchanges (ASX). The Group became a foreign exempt listed issuer on
the ASX in September 2016.
On our website: https://ikegps.com/investors/ you will find the following corporate governance documents
referred to in this section:
+ Constitution
+ Securities Trading Policy
+ Corporate Governance Code
+ Continuous Disclosure Policy
+ Code of Ethics
+ Diversity Policy
+ Nominations and Remuneration Committee Charter
+ Audit and Risk Management Committee Charter
Corporate governance statement
Under NZX Rule 3.7.1 and 3.8.1, NZX has a set of principles and recommendations, the NZX Corporate Governance
Code, that listed companies must report against. The overarching purpose of the NZX Code is to promote
good corporate governance. The Board considers that, as at 31 March 2023, the Company complies with the
recommendations set by the NZX Corporate Governance Code, except where it deems alternative measures are
more appropriate as disclosed.
Board composition and performance
The structure of the Group’s Board and its governance arrangements are set out in the Company’s Constitution
and in the Board’s written Charter setting out the Board’s roles and responsibilities. The management and control
of the business of the Group are vested in the Board. The Charter sets out the matters reserved for our decision-
making, including (amongst other key matters) the establishment of the Company’s overall strategic direction
and strategic plans.
Management is responsible for implementing the strategic objectives, operating within the risk appetite the
Board has set, and for all other aspects of the day-to-day running of the Company.
The Board delegates the day-to-day leadership and management of the Company to the CEO. The delegations
are set out in the Board Charter and in a Delegated Authority framework, which also sets out authority levels for
types of commitments that the Company’s management can make.
The nominations and remuneration committee identifies and recommends to the Board individuals for
nomination as members of the Board and its Committees taking into account such factors as it deems
appropriate, including experience, qualifications, judgment, and the ability to work with other Directors.
Board meetings
Between 1 April 2022 and 31 March 2023, 8 Board meetings were held. All meetings were attended by all Directors
(or committee members) apart from one meeting in October where Rick Christie was absent.
Board composition
The Board considers its composition in accordance with the institute of directors’ framework. The Directors
believe the respective skills and experience of individual Directors to be complementary, appropriate for the
Group, balanced, and reasonably diverse. The Group’s Directors have expertise and experience in strategy
development, executive leadership, acquisitions and divestment, technology, data, corporate responsibility,
governance, legal and regulatory matters, public policy, and finance (including the assessment of financial
controls). In accordance with the applicable listing rules, all directors are re-elected within three years or on the
third annual general meeting following their appointment.
30
31
2023 ikeGPS Annual Report2023 ikeGPS Annual Report
Director independence
The Board Charter requires that at least two Directors be independent and sets out circumstances
in which a Director will not be regarded as independent.
The Board assesses Director independence against the criteria in the Charter. The Board consider
the following Directors to be independent at present, Rick Christie, Mark Ratcliffe, and Fred Lax.
Diversity policy
The Group fosters an inclusive working environment that promotes employment equity and
workforce diversity at all levels, including within the executive team and Board. The Diversity
policy is available on the investor relations website.
A gender breakdown of Directors and officers of the Group and its subsidiaries as at 31 March
2022 and 31 March 2023 is detailed below. For the purposes of accurate disclosure, Glenn Milnes is
shown both as a Director and an officer.
2023
2022
5
1
2
-
5
1
2
-
Directors
Male
Female
Officers
Male
Female
Director training
Each Director undertakes appropriate education to remain current in how to best perform their
duties as Directors. Individual Directors maintain membership of relevant bodies such as the
Institute of Directors and receive information independently and from management in relation to
specific issues relevant to the Group, the markets in which it operates, or to NZX and ASX listed
companies generally.
Board performance
On a regular basis the Board reviews how it is performing. The review process comprises a group
self-evaluation relating to Board and committee composition and performance. The Board
believes this process is effective and believes it helps to refine the Group’s strategy-setting
processes and the information provided in Board papers. Broadly, the Board is satisfied that
the Board and its committees are operating well and that the performance process used is both
effective and suited to the company.
Remuneration
Remuneration of directors
Directors’ fees are currently set at a maximum of $550,000 for the non-
executive Directors. The actual amount of fees paid in the year to 31 March 2023
was $364,501.
Directors' fees and other remuneration and benefits (including share option
expense) from the Company recognized in profit or loss during the accounting
period ended 31 March 2023 are as follows:
Director
Salary & Board Fees
Share Option Expense and other Benefits
Richard Christie
Eileen Healy (resigned
May 2023)
Alex Knowles
Frederick Lax
Mark Ratcliffe
Glenn Milnes*
Total
$52,501
$67,600
$93,600
$78,000
$72,800
$1,019,551
$1,384,052
$43,066
$38,526
$43,066
$43,066
$12,920
$310,517
$491,162
*Glenn Milnes received salary, STI, and entitlements in US$ as employee of ikeGPS Inc. The
remuneration shown above has been converted to NZ$ at the average rate for the month each
transaction took place. Glenn received no remuneration in his capacity as a Director of the Group.
Each Director is separately entitled to be reimbursed for reasonable traveling,
accommodation, and other expenses incurred in performing their role
as a Director.
No Director of either of the Group’s subsidiaries receives any remuneration in
that capacity.
Options granted to Directors are stated below in Directors’ relevant interests.
The total Directors remuneration pool for FY23 is set at $320,000. The last
increase in Directors’ fees was made with effect from from October 2022.
32
33
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Chief Executive Officer (CEO)
Remuneration of employees
Glenn Milnes’s employment agreement for his role
as CEO commenced in July 2010. His agreement
reflects appropriate standard conditions for a CEO of
a listed company.
Glenn’s remuneration is a combination of fixed salary
and incentive arrangements. The incentives are a
Short Term Incentive (STI) component set at up to
50% of base salary, linked to specific financial and
non-financial targets set annually by the Board, and a
Long Term Incentive (LTI) component set at up to 50%
of base salary, in employee stock options.
Glenn’s base salary for the year to 31 March 2023 was
US$414,000, and he received a bonus (STI) in calendar
2022 of US$175,000.
Glenn had 1,964,000 employee stock options as of 31
March 2023 of which 725,000 [with an exercise price
of $0.78] was granted on 1 August 2022.
The remaining employee stock options have vesting
dates from 2020 to 2026. Vesting at each date is
dependent on him remaining an employee at the
applicable vesting date.
The Group aims to have a remuneration framework
and policies to attract and retain talented and
motivated people.
The Company wants to:
+ Be recognized as a great place to work, and attract,
retain and motivate high-performing individuals
+ Align employee incentives with the achievement of
good business performance and shareholder return
+ Recognize and reward individual success while
encouraging teamwork and a high-performance
culture
+ Be competitive in the labour market
+ Be fair, consistent, and easy to understand
Employee remuneration principles
The Group uses market data to determine
competitive salary and total remuneration levels
for all staff. The Group makes allowance for
individual performance, scarcity of skills, internal
relativities, and specific business needs. The Group
is operating in a growth industry and has a skilled and
mobile workforce.
All employees have fixed remuneration. Selected
employees have the potential to earn a Short Term
Incentive (STI) and Long Term incentive (LTI).
Ethical Behaviour
Code of conduct
The Group has a Code of Ethics, setting out the
ethical and behavioural standards expected of
Directors and staff. Directors and staff are also
expected to uphold the Group's values.
Whistleblowing
The Group Code of Ethics includes specific direction
on action to be taken by a person who suspects a
breach of the Code.
Avoiding conflicts of interest
The Board is updated at each meeting on changes
in Directors’ interests and any potential conflicts.
The register records relevant transactions and
our disclosures of interests. A current listing of
Directors’ interests is found on page 40.
Trading in securities
The Groups Directors are restricted from trading in
the Group's shares under New Zealand law and by the
Group's Security Trading Policy. This policy applies
to both Directors and employees. The policy details
“blackout periods” where trading is forbidden, as well
as a process for authorization at other times.
Our Director's current shareholdings are set
out on page 41.
Committees
The Board committees review and consider in
detail the policies and strategies developed by
management. They examine proposals and make
recommendations to the Board. They don’t take
action or make decisions on behalf of the Board
unless specifically mandated to do so.
During the FY23 year, the Group’s standing Board
committees were the:
+ Audit & risk management committee
+ Nominations and Remuneration committee
34
35
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Audit & Risk Management (ARC) committee:
Fred Lax (chair), Mark Ratcliffe, Glenn Milnes
sufficiently independent and can manage a takeover
process and any additional issues effectively as a
whole Board, should it arise.
disclosure requirements.
Information for investors
The committee members are independent Directors
with the exception of Glenn Milnes (executive
director). Due to the diversity of the business
operations, it is deemed appropriate that Glenn
Milnes is a member of the ARC. In accordance
with the NZX Code, the Audit & Risk Management
Committee is chaired by an Independent Director,
Fred Lax, who is not the Chair of the Board. Fred has
extensive governance experience and has been ARC
Chair with other public companies.
The committee’s Charter is set out on the investor
relations website. The committee met four times in
the year to 31 March 2023.
Management attends meetings only at the
committee's invitation, and at least annually, the
committee meets with the external auditors with
management excluded.
Nominations and Remuneration committee:
Chair to be appointed (Previously Eileen Healy), Mark
Ratcliffe, and Fred Lax.
The committee members are independent Directors.
The committee met on four occasions in the year
to 31 March 2023. This committee has oversight of
matters of recruitment, retention, and remuneration.
Other committee matters
The Board will occasionally appoint a committee of
Directors to consider or approve a specific proposal
or action if the timing of meetings or availability of
Directors means the matter cannot be considered by
the full Board. Their deliberations and decisions are
reported back to the Board not later than the next
meeting following.
Takeover protocol
The Board has decided not to establish a takeover
committee or protocols documenting the procedure
to be followed in the event it receives a takeover
offer. The Board has determined that due to
the current size and make-up of the Board, it is
Reporting and disclosure
Financial reporting
The Board is responsible for ensuring the integrity
of the Group’s reporting to shareholders, including
for financial statements that comply with generally
accepted accounting practices. The Board’s ARC
oversees the quality, reliability, and accuracy of the
financial statements and related documents (the
ARC role is described fully in its Charter). In doing so,
the committee makes inquiries of management and
external auditors (including requiring management
representations) so that the committee can be
satisfied as to the validity and accuracy of all aspects
of the Group’s financial reporting.
The CEO and CFO certify to the Board that the
integrity of the financial statements is founded on
a sound system of risk management and internal
compliance and control.
Non-financial reporting
The Group has not adopted a formal environmental,
social, and governance (ESG) reporting framework
at this time. The Group has engaged with external
experts to develop the structures and processes
to enable this reporting in future periods. The
Group’s assessment of exposure to non-financial
risks, including economic, environmental, and
social sustainability risks, is incorporated into the
Comprehensive and Key Risk assessments that
we refer to under risk management. The Group is
predominantly an office-based software company
with minimal impact on non-financial risks.
Disclosure to the market
The Group has a written disclosure policy – the
Continuous Disclosure Policy, found on the investor
relations site. It sets out requirements for full and
timely disclosure to the market of material issues so
all stakeholders have equal access to information.
The Board reviews and approves material
announcements. The Board specifically consider
with management at each Board meeting whether
there are any issues which might require disclosure
to the market under the NZX and ASX continuous
The Group’s annual meeting will be held virtually
on Friday, 29 September 2023 (NZT). A notice of
the meeting and proxy form will be circulated
to shareholders closer to the time. The external
auditors, Grant Thornton, will respond to any
questions submitted prior to the meeting.
Risk management
The Group has an enterprise risk management
framework in place to identify, quantify and monitor
risks. That framework categorizes the enterprise
risks and sets out specific actions to effectively
manage each risk. Management reviews the
enterprise risk register. The Group doesn’t have an
internal audit function.
Health and Safety Risk
The Group values our people's health, safety, and
wellness, and we believe that everyone should be
able to work in an environment where risks are
managed and controlled. Management has adopted
health, safety, and wellness measures to address and
mitigate identified risks.
The Group is a relatively low-risk office-based
business. However, we do have employees
performing training and, in some instances, fieldwork
for customers. The Board is conscious of these risks
to employees and have viewed the actions currently
in place to mitigate these. The frequency of incidents
has been very low, so the Board has not required
LTIFR reporting to date.
Auditors
The Group has an external Auditor Policy that
requires the external auditor to be independent and
to be seen as independent. The Board is satisfied that
there is no relationship between the auditor and the
Group or any related person at this time that could
compromise the auditor’s independence. The Board
also obtained confirmation of independence formally
from the auditor. To ensure full and frank dialogue
amongst the ARC and the auditors, the auditor’s
senior representatives meet separately with the ARC
(without management present) at least once a year.
Non-audit work
The Audit Independence Policy sets out restrictions
on non-audit work that the auditor can perform.
Shareholder rights and relations
The Group’s financial reports and corporate
governance documentation is available on the
group’s website https://ikegps.com/investors/.
The Group keeps shareholders informed through
periodic reporting to NZX and ASX and through its
continuous disclosure. The Group provides briefings
and presentations to media and analysts (which are
made immediately available on the investor relations
website) and communicates with shareholders
through periodic reports, annual shareholder
meetings, as well as through a range of releases
to media on matters which the company believes
will interest shareholders and members. The Group
encourages shareholders to refer to the investor
relations website and to receive annual and half
year reports electronically. Still, hard copies of
the reports can readily be obtained from the share
registrar, Link Market Services Limited. The Group
takes care to write all shareholder communications
in a clear and straightforward way and to limit the
use of jargon.
36
37
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Disclosures
Audit Fees
The amounts payable to Grant Thornton as
auditor of the Group are as set out in Note 6 to the
financial statements.
Subsidiary company Directors
The following people held office as Directors of
subsidiary companies of the Group on 31 March 2023:
1.
ikeGPS Inc: Glenn Milnes
2.
ikeGPS Limited: Rick Christie
Dividends
As part of the Group's growth plans, dividends are
not currently paid, and the Board did not declare a
dividend in respect of the period ending 31 March 2023,
nor does it expect to declare any dividends during the
period ending 31 March 2024.
Net Tangible Assets
The Net Tangible Assets per security on 31 March 2023
was $0.13 (31 March 2022: $0.16).
NZX Waivers
There were no waivers obtained or relied on during the
period to 31 March 2023.
Officers
The Group’s officers as at 31 March 2023, and their
respective roles, were as follows:
Glenn Milnes, Chief Executive Officer
Stephen Fairbrother, Chief Financial Officer
Annual Meeting
The Group will hold an Annual Meeting of shareholders
on Friday, 29 September 2023 (NZT). A notice
of Meeting and Proxy Form will be circulated to
shareholders closer to the time.
39
2023 ikeGPS Annual Report Entries recorded in interests register
Statement of Directors’ relevant interests
The following are particulars of entries made in the Company’s interests register pursuant to section 140 of the
Companies Act 1993 for the period 1 April 2022 to 31 March 2023 (including in respect of those Directors who are
Directors of the Company’s subsidiaries).
Directors (including Directors of subsidiary companies) held the following relevant interests in equity securities
of the Company as at 31 March 2023.
Director
Interest
Declaration
Rick Christie - Non Executive Independent Director
No conflicting interests
Solnet Group Limited (Private)
National e-Science Infrastructure (NeSI)
Royal Society of NZ Endowment Trust
Glenn Milnes - CEO & Managing Director
The Wild Group Limited
Alex Knowles - Non Executive Director
Alphian Investments Ltd
A Way To Move Inc
Xenon FS LLC
AWA Shipping / Intelligent SCM LLC
Epe Frame Metal Spa
Framemax Systems Inc
Climate Coatings Ltd
Road to Success In
No conflicting interests
No conflicting interests
Director
Chair
Chair
Director
Director
Director
Board Member
Board Member
Director
Director
Director
Board Member
Mark Ratcliffe - Non Executive Independent Director
No conflicting interests
Mark Ratcliffe Consulting Limited
Ratcliffe Barker Family Trust
Director
Trustee and
Beneficiary
First Gas Limited and related companies; Gas Services Limited, Gas
Services NZ, Midco Limited, Gas Services SPV1 Limited and Rock Gas
Limited
Chair
Waka Kotahi – NZ Upgrade Programme Governance Group
Independent Chair
Kaibosh Charitable Trust
First Sunrise Limited and related companies
The Guildford Timber Company Limited
Trustee
Chair
Chair
WilliamsWarn NZ Limited and WilliamsWarn Holdings Limited
Director
Ultra Fast Fibre Limited and related companies; UFF Holdings Limited,
Tuatahi First Fire Limited, First Fibre Midco Limited, First Fibre BidCo
Limited
Te Aranga Alliance
Acting Chair
Chair
With beneficial
interest
As trustee or
associated person of
registered holder
Total number of
ordinary shares 31
March 2023
Unlisted options to
acquire ordinary share
301,307
-
816,920
494,828
-
-
1,613,055
-
120,300
163,964
-
284,264
301,307
-
937,220
494,828
163,964
20,000
299,999
300,000
1,964,000
300,000
350,000
250,000
1,917,319
3,463,999
Quoted Shares
Richard Christie
Alex Knowles
Glenn Milnes
Frederick Lax
Mark Ratcliffe
Eileen Healy
Total
Director share dealing
Date
Director
Registered holder /
Associated entity
Class of financial
product
Acquired /
(Disposed of)
Consideration
$
Notes
18/10/2022
27/02/2023
15/02/2023
Eileen
Healy
Glenn
Milnes
Glenn
Milnes
Eileen Healy
Ordinary shares
20,000
14,658
Glenn Milnes
Ordinary shares
(250,000)
212,500
Glenn Milnes
Ordinary shares
(5,000)
4,750
On Market Share
Purchase
Off Market Share
Sale
Off Market Share
Sale
Spread of security holders
Security holders as at 31 March 23
Size of shareholding
Number of holders
% of holders
Total shares held
% of shares
1-1,000
1,001-5,000
5,001-10,000
10,001-50,000
50,001-100,000
397
885
362
458
78
Greater than 100,000
105
Total
2,285
17%
39%
16%
20%
3%
5%
100%
264,333
2,613,556
2,787,625
10,837,023
5,630,444
137,598,764
159,731,745
0.17%
1.64%
1.75%
6.78%
3.52%
86.14%
100%
40
41
2023 ikeGPS Annual Report2023 ikeGPS Annual Report
Twenty largest registered shareholders
Analysis of shareholding on a disaggregated basis as at 31 March 2023
Rank
Shareholder
Holding
% total shares on issue
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Nicola Jane Wilson & David Jonathan Wilson
Forsyth Barr Custodians Limited
HSBC Custody Nominees (Australia) Limited
Naomi Jayne Knowles Lane
Douglas Irrevocable Descendants Trust, Douglas Family Trust
& K&M Douglas Trust
Accident Compensation Corporation
FNZ Custodians Limited
National Nominees Limited
Leveraged Equities Finance Limited
New Zealand Permanent Trustees Limited
Malcolm Young
J P Morgan Nominees Australia PTY Limited
Nzvif Investments Limited
Maarten Arnold Janssen
Naomi Jayne Knowless Lane
New Zealand Depository Nominee
Custodial Services
BNP Paribas Noms(Nz) Ltd
Hector Rex Nicholls & Kerry Leigh Prendergast
20
Citicorp Nominees Pty Limited
Total
Substantial product holders
26,791,553
18,566,084
14,634,943
10,066,939
9,766,922
6,791,807
4,365,390
3,597,776
3,507,057
2,000,000
1,904,359
1,709,083
1,685,029
1,505,059
1,455,564
1,447,884
1,363,158
1,214,836
1,012,474
960,424
16.8%
11.6%
9.2%
6.3%
6.1%
4.3%
2.7%
2.3%
2.2%
1.3%
1.2%
1.1%
1.1%
0.9%
0.9%
0.9%
0.9%
0.8%
0.6%
0.9%
114,346,341
71.9%
According to notices given under the Securities Markets Act 1988 and the Financial Markets Conduct Act 2013 as
at 31 March 2023, the following were substantial product holders in respect of the 159,731,745 ordinary shares of
the Company on issue as at 31 March 2023 (being the Company’s only class of quoted voting securities):
Name
Shareholding
%
Nature of relevant interest
David Jonathan Wilson and Nicola Jane Wilson
26,791,553
16.77%
Naomi Knowles Lane
11,528,217
7.22%
Scobie Ward
12,738,673
7.98%
Registered holder and beneficial owner of
financial products
Registered holder and beneficial owner of
financial products
Registered holder and beneficial owner of
financial products
Douglas Irrevocable Descendants trust,
Douglas Family trust, K&M Douglas Trust
9,766,922
6.11%
Registered holder and beneficial owner of
financial products
Employee Remuneration
The following table shows the number of current or former employees (excluding employees holding office
as Directors) who received remuneration and other benefits (excluding non-cash share based payments and
payments made under an asset purchase agreement entered into as part of a business combination) in excess of
$100,000 from the subsidiary companies of the Group during the year ended 31 March 2023:
Band
Number of employees
Band
Number of employees
$100,000 to $109,999
$110,000 to $119,999
$120,000 to $129,999
$130,000 to $139,999
$140,000 to $149,999
$150,000 to $159,999
$160,000 to $169,999
$170,000 to $179,999
$180,000 to $189,999
$190,000 to $199,999
$200,000 to $209,999
$210,000 to $219,999
$220,000 to $229,999
$230,000 to $239,999
$240,000 to $249,999
$250,000 to $259,999
$260,000 to $269,999
$270,000 to $279,999
$280,000 to $289,999
$290,000 to $299,999
$300,000 to $309,999
$310,000 to $319,999
$320,000 to $329,999
$330,000 to $339,999
$340,000 to $349,999
$350,000 to $ 359,999
$360,000 to $ 369,999
$370,000 to $ 379,999
$380,000 to $ 389,999
$390,000 to $ 399,999
$400,000 to $ 409,999
$410,000 to $ 419,999
7
8
8
9
2
2
3
5
2
1
3
1
3
5
1
2
-
-
-
-
1
-
-
1
1
-
1
-
1
-
-
-
$420,000 to $429,999
$430,000 to $439,999
$440,000 to $449,999
$450,000 to $459,999
$460,000 to $469,999
$470,000 to $479,999
$480,000 to $489,999
$490,000 to $499,999
$500,000 to $509,999
$510,000 to $519,999
$520,000 to $529,999
$530,000 to $539,999
$540,000 to $549,999
$550,000 to $559,999
$560,000 to $569,999
$570,000 to $579,999
$580,000 to $589,999
$590,000 to $599,999
$600,000 to $609,999
$610,000 to $619,999
$620,000 to $629,999
$630,000 to $639,999
$640,000 to $649,999
$650,000 to $659,999
$660,000 to $669,999
$670,000 to $679,999
$680,000 to $689,999
$690,000 to $699,999
$700,000 to $709,999
$710000 to $719999
$720,000 to $729,999
$730,000 to $739,999
1
1
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42
43
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Band
Number of employees
Band
Number of employees
$740,000 to $749,999
$750,000 to $759,999
$760,000 to $769,999
$770,000 to $779,999
$780,000 to $789,999
$790,000 to $799,999
$800,000 to $809,999
$810,000 to $819,999
$820,000 to $829,999
$830,000 to $839,999
$840,000 to $849,999
-
-
-
-
-
-
-
-
-
-
-
$850,000 to $859,999
$860,000 to $869,999
$870,000 to $879,999
$880,000 to $889,999
$890,000 to $899,999
$900,000 to $909,999
$910,000 to $919,999
$920,000 to $929,999
$930,000 to $939,999
$940,000 to $949,999
$950,000 to $959,999
Total
-
-
-
-
-
-
-
-
-
-
1
72
The remuneration shown above has been converted to NZ$ at the average rate for the month each
transaction took place.
Donations
No member of the Group made any significant donations during the financial year. The Group undertakes
regular promotional sponsorship activity through a variety of channels.
44
45
2023 ikeGPS Annual Report2023 ikeGPS Annual Report Consolidated
Financial Statements
Year End // 31 March 2023
Independent auditor’s report
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of changes in equity
Consolidated statement of financial position
Consolidated statement of cash flows
47
50
51
52
53
Notes to the consolidated financial statements
54-83
Independent auditor’s report
To the shareholders of ikeGPS Group Limited
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of ikeGPS Group Limited (the Company), including
its subsidiaries (the Group) on pages 4 to 37 which comprise the consolidated statement of financial
position as at 31 March 2023, and the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of the Group as at 31 March 2023 and of its financial performance and cash flows for
the year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) issued by the New Zealand Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) issued by the New Zealand Auditing and Assurance Standards Board (NZAASB). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with Professional and Ethical Standard 1 International Code of Ethics for Assurance
Practitioners (including International Independence Standards) (New Zealand) issued by the NZAASB and
the International Code of Ethics for Professional Accountants (including International Independence
Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other than in our capacity as auditor we have no relationship with, or interests in, the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current year. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
47
Description of the key audit matter
How our audit addressed the key audit matter
We performed procedures to evaluate and challenge the
Group’s determination of CGUs. This included reviewing
internal management reporting to assess the level at which
the Group monitors performance, comparing CGUs to our
knowledge of the Group’s operations and reporting systems,
and reconciling assets allocated to CGUs to accounting
records.
We obtained management’s impairment assessments and
tested the mathematical accuracy of the VIU calculations.
We considered and challenged key assumptions and used
our internal valuation experts to assess the valuation
methodology’s compliance with NZ IAS 36, and the
appropriateness of the pre-tax discount rates and terminal
growth rates, based on their experience and external
evidence.
We compared the forecast cash flows used for the year
ending 31 March 2024 to the Board approved business plan.
We audited the disclosures in the consolidated financial
statements to ensure they are compliant with the
requirements of the relevant accounting standards.
Impairment assessment and the carrying value of
assets
As disclosed in Note 3, Significant accounting policies, the
Group has undertaken an assessment of the carrying value
of its assets including intangible assets on an annual basis
in accordance with NZ IAS 36 Impairment of Assets.
Cash generating units (CGUs) that are yet to be profit
generating may indicate there is an impairment. In addition,
certain CGU’s hold intangible assets in development that
are not yet ready for use. Accordingly, these assets are
required to be tested for impairment.
Impairment assessments are a key audit matter due to the
materiality of the assets, the risk of impairment, and the
significant level of judgement applied in estimating future
cash flows and other key assumptions in determining the
recoverable amount of a CGU.
To determine whether the carrying value of assets including
intangibles is reasonable, management performed an
impairment assessment on a value-in-use (VIU) basis.
Management determined there were four CGUs:
•
Ike core platform, development assets, property, plant
and equipment, capital work-in-progress, leased assets
and working capital (CGU1).
• Spike: development assets and working capital (CGU2).
•
•
Ike Structural/Pole Forman: intangible assets, capital
work in progress and working capital (CGU3); and
Ike Insight/Visual Globe: goodwill, intangible assets, and
capital work in progress (CGU4).
Impairment tests prepared by management were based on
discounted cashflow models using the Board approved
budget for the year ending 31 March 2024 and combined
with forecasted cash flows for subsequent years. The Board
approved budgets have been adjusted to meet the
requirements of NZ IAS 36 Impairment of Assets.
The key assumptions in assessing CGU carrying value,
were as follows:
•
•
•
Average forecast annual revenue growth rates;
The terminal value growth rate; and
The pre-tax discount rate.
Refer to notes 3 and 12 in the consolidated financial
statements for disclosures on the key assumptions and
impairment assessments of the carrying value of assets.
48
Information Other than the Financial Statements and Auditor’s Report thereon
The Directors are responsible for the other information. The other information comprises the information included in the Annual
Report but does not include the consolidated financial statements and our auditor’s report thereon. The Annual Report is
expected to be made available to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements, or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
Directors’ responsibilities for the Consolidated Financial Statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated financial
statements in accordance with New Zealand equivalents to International Financial Reporting Standards issued by the New
Zealand Accounting Standards Board, and for such internal control as the Directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs
(NZ) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the External
Reporting Board’s website at: https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-report-1/
Restriction on use of our report
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so that we might
state to the Company’s shareholders, as a body those matters which we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinion we have
formed.
Grant Thornton New Zealand Audit Limited
B R Smith
Partner
Wellington
30 May 2023
49
Consolidated statement of profit or loss and other
comprehensive income
Continuing operations
Operating revenue
Cost of revenue
Gross profit
Other income
Foreign exchange gains
Movement of fair value assets and liabilities
Total other income, gains, and losses
Support costs
Sales and marketing expenses
Research and engineering expenses
Corporate costs
Expenses
Operating loss
Net finance income/(expense)
Net loss before income tax
Income tax (expense)/credit
Loss attributable to owners of ikeGPS Group Limited
Other comprehensive loss
Exchange differences on translation of foreign operations
Comprehensive loss
Year ended 31 March
Group
Note
2023
2022
5
5
5
6
7
NZ$'000
30,789
(14,444)
16,345
287
1,017
2,574
3,878
(1,100)
(8,112)
(11,390)
(7,384)
(27,986)
(7,763)
(116)
(7,879)
(8)
(7,887)
NZ$'000
15,965
(6,077)
9,888
65
446
1,269
1,780
(452)
(6,467)
(5,825)
(6,712)
(19,456)
(7,788)
(69)
(7,857)
-
(7,857)
1,250
(6,637)
(49)
(7,906)
Basic and diluted loss per share
19
$ (0.05) $ (0.05)
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
50
Consolidated statement of changes in equity
Balance at 1 April 2021
Net loss for the year after tax
Currency translation differences
Total comprehensive loss for the year
Transactions with owners:
Issue of ordinary shares from share placement
and share purchase plan
Recognition of vesting of share-based options
Issue of shares from exercise of share options
Share-based options forfeited during the year
Equity movements arising from business
combinations
Total transactions with owners
Balance at 31 March 2022
Balance at 1 April 2022
Net loss for the year after tax
Currency translation differences
Total comprehensive loss for the year
Transactions with owners:
Recognition of vesting of share-based options
Issue of shares from exercise of share options
Share-based options forfeited during the year
Equity movements arising from business
combinations
Total transactions with owners
Balance at 31 March 2023
Share capital
NZ$'000
80,932
-
-
-
Accumulated
losses
NZ$'000
(59,817)
(7,857)
-
(7,857)
Share-based
payment
reserve
Foreign
currency
translation
reserve
Total
NZ$'000 NZ$'000 NZ$'000
21,702
(7,857)
(49)
(7,906)
1,178
-
-
-
(591)
-
(49)
(49)
23,130
-
204
485
-
-
-
-
-
23,819
104,751
-
(67,674)
-
1,595
(204)
(55)
254
1,590
2,768
-
-
-
-
-
23,130
1,595
-
(55)
739
-
(640)
25,409
39,205
Share capital
NZ$'000
Accumulated
losses
NZ$'000
104,751 (67,674) 2,768
Share-based
payment
reserve
Foreign
currency
translation
reserve
Total
NZ$'000 NZ$'000 NZ$'000
39,205
(7,887)
1,250
(6,637)
(640)
-
1,250
1,250
-
-
-
1,232
(27)
(127)
(147)
931
3,699
-
-
-
-
1,232
-
(58)
193
-
610
1,367
33,935
-
-
-
-
27
-
340
(7,887)
-
(7,887)
-
-
69
-
367
105,118
69
(75,492)
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
51
Consolidated statement of financial position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Contract costs
Financial instruments
Lease assets
Inventory
Total current assets
Non-current assets
Property, plant, and equipment
Intangible assets
Lease assets
Inventory
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee entitlements
Current Tax Liability
Provision
Other liabilities
Lease liabilities
Deferred income
Total current liabilities
Non-current liabilities
Deferred income
Total non-current liabilities
Total liabilities
Total net assets
EQUITY
Share capital
Share-based payment reserve
Accumulated losses
Foreign currency translation reserve
Total equity
As at 31 March
Group
Note
2023
2022
NZ$'000
NZ$'000
8
9
13
10
11
12
13
10
14
7
24
15
13
5
5
18
21
18,048
5,212
902
295
193
12
2,472
27,134
2,798
13,104
-
238
16,140
43,274
2,284
1,326
8
262
534
14
4,728
9,156
183
183
9,339
24,354
4,959
1,284
191
33
-
1,003
31,824
1,803
14,135
210
269
16,417
48,241
1,756
676
-
40
2,651
232
3,575
8,930
106
106
9,036
33,935
39,205
105,118
3,699
(75,492)
610
33,935
104,751
2,768
(67,674)
(640)
39,205
Director
Date: 30 May 2023
Director
Date: 30 May 2023
NZ (New Zealand Time)
NZ (New Zealand Time)
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
52
Consolidated statement of cash flows
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Payment of low value and short term leases
Tax refund received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Purchases of property, plant, and equipment
Additions to intangible assets
Settlement/(purchase) of financial instruments
Interest received
Net cash used in investing activities
Cash flows from financing activities
Payment of principal portion of lease liabilities
Proceeds from issuance of shares
Net cash (used in)/from financing activities
Net (reduction)/increase in cash and cash equivalents
Cash and cash equivalents at 1 April
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents
Year ended 31 March
Group
Note
2023
2022
NZ$'000
NZ$'000
13
8
13
31,985
(34,323)
(200)
86
(20)
(2,472)
(2,133)
(2,998)
133
171
(4,827)
(227)
-
(227)
(7,526)
24,354
1,220
18,048
14,784
(21,289)
(28)
-
(69)
(6,602)
(1,761)
(1,821)
(106)
-
(3,688)
(308)
23,130
22,822
12,532
11,342
480
24,354
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
53
Notes to the consolidated financial statements for the year
ended 31 March 2023
1. Reporting Entity
ikeGPS Group Limited is a limited liability company domiciled and incorporated in New Zealand, registered under
the Companies Act 1993 and listed on the New Zealand Stock Exchange (‘NZX’) and Australian Securities
Exchange (‘ASX’). It is an FMC reporting entity for the purposes of the Financial Markets Conduct Act 2013. The
consolidated financial statements for the year ended 31 March 2023 comprise ikeGPS Group Limited and its
subsidiaries (together referred to as the ‘Group’), which comprises of ikeGPS Limited (‘ikeGPS Ltd’) and ikeGPS
Incorporated (‘ikeGPS Inc’).
The principal activity of the Group is that of design, sale, and delivery of a solution for the collection, analysis,
and management of distribution assets for electric utilities and communications companies.
The consolidated financial statements were authorised for issue by the Directors on 30 May 2023.
2. Basis of preparation
The consolidated financial statements for the year ended 31 March 2023 have been prepared in accordance
with the requirements of the Companies Act 1993 and Financial Reporting Act 2013.
The consolidated financial statements of the Group have been prepared in accordance with New Zealand
Generally Accepted Accounting Practice (‘NZ GAAP’). The Group is a for-profit entity for the purposes of
complying with NZ GAAP. The consolidated financial statements comply with New Zealand equivalents to
International Financial Reporting Standards (‘NZ IFRS’), other New Zealand accounting standards and
authoritative notices that are applicable to entities that apply NZ IFRS. The consolidated financial statements
comply with International Financial Reporting Standards (‘IFRS’).
The consolidated financial statements have been prepared on the historical cost basis, except for certain
financial assets and liabilities that have been measured in accordance with the specific relevant accounting
policy.
All amounts are shown exclusive of Goods and Services Tax (‘GST’) and other indirect taxes, except for trade
receivables and trade payables that are stated inclusive of GST and Sales Taxes.
Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
can affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases.
New and amended standard and interpretations
There are no new standards or interpretations material to the Group to be applied during the year. The Group
does not anticipate adopting any standards prior to their effective date. There are no standards or amendments
that have been issued but not yet effective that are expected to have a material impact on the Group.
3. Significant accounting policies
Significant accounting policies, accounting estimates, and judgments that summarise the measurement basis
used and are relevant to the understanding of the financial statements are provided throughout the
accompanying notes.
54
Notes to the consolidated financial statements for the year
ended 31 March 2023
3. Significant accounting policies (continued)
The material judgments and estimates used in preparation of the consolidated financial statements are outlined
below.
Going concern
The considered view of the Board Directors is that the going concern assumption is valid. This view has been
reached after making due enquiry and having regard to the circumstances that the Directors consider will occur
and those that are reasonably likely to affect the Group during the period of one year from the date these
consolidated financial statements are approved.
The Group recorded a net loss of NZ$7.9M for the year ended 31 March 2023 (2022: NZ$7.9M) and is expected
to make further losses in the following financial year.
Notwithstanding the above, the Group has prepared cash flow forecasts and sensitivity analyses that indicate
cash-on-hand at year-end of $18M, combined with the net cash flows from operations, will enable the Group to
continue operating as a going concern for at least twelve months from the date of authorising these
consolidated financial statements.
Impairment
The carrying amounts of the Group’s assets were reviewed to determine whether there is any indication of
impairment and if so tested, or tested regardless in the case of indefinite life intangible assets. The Directors
identified the following cash generating units (CGUs):
+ CGU1 – IKE Core platform: intangible assets, property plant and equipment, capital work in
progress, lease assets and working capital.
+ CGU2 – Spike: intangible assets and working capital.
+ CGU3 – IKE Structural: intangible assets, capital work in progress and working capital.
+ CGU4 – IKE Insight: intangible assets and capital work in progress.
The Directors concluded that even though CGU1 achieved considerable growth over the year, the overall
operating losses associated with CGU1 are an indicator of impairment, requiring an estimate of the CGU1
recoverable amount.
CGU1 was determined to have a carrying value of $6.4M. Future cash flows are forecasted based on a five-year
business model for CGU1, which included a conservative average revenue growth rate of 18% and operating
expenses reflecting the FY23 business plan.
The Group remains confident that of the back of two strong growth years for IKE that the revenues for CGU1
will continue to grow. This is based on the opportunity to both increase market share and become more
entrenched with our current customer base. The Group remains optimistic that the infrastructure market will
continue to grow due to the significant multiyear investment programmes IKE’s customers have in place. A pre-
tax discount rate of 18.2% was used to establish the recoverable amount on a value in use basis. To determine
terminal value, the Group applied a 2% growth rate.
Sensitivity analysis was performed on key assumptions for CGU1. An impairment would need to be considered
if the average growth rate was 40% lower than forecasted.
55
Notes to the consolidated financial statements for the year
ended 31 March 2023
3. Significant accounting policies (continued)
An indicator of impairment also existed in CGU2 due to the negative operating cashflows of the CGU during the
year. CGU2 was determined to have a carrying value of $0.4M. The Directors have determined an impairment of
the remaining intangible asset balance of $61,000 is required. This leaves the remaining carrying value of the
CGU as stock on hand which is expected to be fully realised over the coming years.
CGU3 had no indicator of impairment. However, the CGU includes intangible assets in relation to the next
generation PoleForman product which is in development and not yet available to use. As required by the
standard, the CGU assets not yet available for use have been tested for impairment.
Additionally, an indicator of impairment also existed in CGU4 due to the lower-than-expected revenue, requiring
an estimate of the CGU4 recoverable amount.
CGU4 was determined to have a carrying value of $10.7M including goodwill. CGU4 is a very early-stage
business segment and technology asset that IKE acquired January 2021. Future cash flows are forecasted
based on a five-year business model for CGU4, with the year one and two revenue forecasted to be $0.3m and
$2.5m with an average revenue growth rate of 75% in years three to five with an average annual growth rate
overall of 225% and operating expenses reflecting the FY23 business plan. A pre-tax discount rate of 33.7% was
used to establish the recoverable amount on a value in use basis. In determining the terminal value, the Group
applied a 2% growth rate.
The Directors believe that given the large opportunity for automation in the industry and use of artificial
intelligence to complete pole analysis the CGU could outperform these estimates.
However, given the prior year’s lower than expected revenue the Directors have taken a prudent approach to
forecasting future revenues.
Based on this approach, the Directors have determined that an impairment of CGU4’s intangible assets of
$2.97m is required as the carrying amount exceeded the value in use calculation.
The forecasted financial information for all CGUs is based on both historical experience and future expectations
of operating performance and requires judgements to be made as to revenue growth, operating cost
projections, and the market environment. It is sensitive to changes in each of the assumptions outlined above
and actual results may be substantially different.
Foreign currencies
Items included in the consolidated financial statements of each of the Group’s subsidiaries are measured using
the currency of the primary economic environment that the entity operates ("the functional currency").
The functional currency of ikeGPS Ltd is New Zealand dollars. The functional currency of ikeGPS Inc is United
States dollars. These consolidated financial statements are presented in New Zealand dollars, which is the
Group's presentational currency.
The financial performance and position of ikeGPS Inc are translated into the presentation currency as follows:
+
+
assets and liabilities are translated at the closing rate at reporting date;
income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
+
all resulting exchange differences are recognised in other comprehensive income.
56
Notes to the consolidated financial statements for the year
ended 31 March 2023
3. Significant accounting policies (continued)
Foreign currency transactions and balances
Foreign currency transactions are initially translated to functional currencies at the exchange rate prevailing at
the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the revaluation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in other
comprehensive income as described in the foreign currency translation accounting policy and accumulated in a
separate reserve within equity. If the net investment is to be disposed of, the cumulative amount would be
reclassified to the consolidated statement of profit or loss.
4. Operating segments
The CEO is assessed to be the Chief Operating Decision Maker (CODM) who regularly reviews financial
information by product and gross margin. Reporting of overheads and the financial position is not undertaken
at a level lower than the Group as a whole. Geographically, revenue is substantially generated in the United States
of America (‘USA’).
The CODM now views financial information by product with similar revenue drivers, so to reflect this the segment
note has been reformatted. The comparative information has been presented on a consistent basis to the
revised format. The key change being consolidation of the customer segments, due to the immateriality of 'Other
Business'.
The Group derives its revenue from:
Platform Transactions:
+
+
IKE Analyze revenue by providing an end-to-end technical solution for customers; IKE captures and
analyses pole loading and make-ready engineering assessments, or customers capture pole data
and transact on the platform,
transactional revenue by analysing pole data through an artificial intelligence and machine learning
platform.
Platform Subscriptions:
+
the IKE Platform solution where customers use the functionality of IKE Office and if applicable the IKE
Device,
+
pole loading software licences and ongoing subscriptions for maintenance and support.
Hardware and other services:
+
IKE Device and Spike device sales,
+ Other services including training and deployment.
57
Notes to the consolidated financial statements for the year
ended 31 March 2023
4. Operating segments (continued)
The segment information provided to the CEO and Board of Directors for the year ended 31 March 2023 was as
follows:
Platform Transactions
IKE Analyze revenue
Cost of sales
Gross profit
Platform Subscriptions
Platform as a Service revenue
Pole Loading software licenses and subscription revenue
Subscription revenue
Cost of sales
Gross profit
Hardware and other services
Hardware and accessories revenue
Other service revenue
Cost of sales
Gross profit
Total Operating Revenue
Total Cost of Sales
Total Gross profit
Sales & marketing costs
Other corporate income and expenses
Net loss before tax
Previous presentation for the comparative period:
2023
2022
NZ$'000
NZ$'000
18,664
(11,492)
7,172
3,464
1,846
3,519
(1,103)
7,726
2,850
446
(1,849)
1,447
6,087
(3,450)
2,637
1,680
1,103
2,852
(675)
4,960
3,863
380
(1,952)
2,291
30,789
15,965
(14,444)
16,345
(8,112)
(16,112)
(7,879)
(6,077)
9,888
(6,467)
(11,278)
(7,857)
58
Notes to the consolidated financial statements for the year
ended 31 March 2023
4. Operating segments (continued)
Utility and
Other
Communication Business
Other
Group Communication Business
Utility and
2023
2022
Group
NZ$'000 NZ$'000 NZ$'000
NZ$'000 NZ$'000
NZ$'000
Sales of products
Sale of products and services
Subscription revenue
Contribution
IKE Platform solution
IKE Analyze revenue
Subscription and lease revenue
IKE Insight revenue
Contribution
IKE Structural
Software license, service, and
subscription revenue
Contribution
Spike
Sale of products
Subscription revenue
Contribution
Gross profit
Sales and marketing costs
Impairment of Other Business
Other corporate income and expenses
Net loss before tax
5. Revenue
2,978
3,480
4,741
18,664
3,464
-
9,536
1,846
1,846
-
-
-
-
-
-
-
-
-
-
-
-
318
39
222
(2,969)
(61)
2,978
3,480
4,741
18,664
3,464
-
9,536
1,846
1,846
318
39
222
16,345
(8,112)
(3,030)
(13,082)
(7,879)
3,643
2,780
4,645
6,087
1,690
285
3,937
1,125
1,125
-
-
-
-
-
-
-
-
-
-
-
-
321
34
181
(100)
3,643
2,780
4,645
6,087
1,690
285
3,937
1,125
1,125
321
34
181
9,888
(6,467)
(100)
(11,178)
(7,857)
The Group derives its revenue from the sale of products and related services, subscription revenue, software
licenses, providing access to hardware and the software platform, and technical pole data analysis. Revenue is
recognised when performance obligations have been satisfied, which is when control of the good or service
associated with the performance obligation has been transferred to the customer.
Revenue is recognised using a five-step model to account for revenue arising from contracts with customers.
Under NZ IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects
to be entitled in exchange for transferring goods or services to a customer.
The standard requires entities to exercise judgement, taking into consideration all the relevant facts and
circumstances when applying each step of the model to contracts with their customers. The five-step model
for recognising revenue from contracts with customers requires consideration of the following steps:
+
+
Identifying the contract
Identifying the individual performance obligations within the contract
+ Determining the transaction price
59
Notes to the consolidated financial statements for the year
ended 31 March 2023
5. Revenue (continued)
+
Allocating the transaction price to distinct performance obligations
+ Recognising revenue
The table below provides the key judgements made on the application of NZ IFRS 15 across each revenue type
with standardised terms and conditions. The Group has applied a practical expedient permitted by the standard;
therefore, no significant financing component exists on deferred income.
Description
Key Judgements
Outcome
Revenue
Type
IKE device
solution
This is marketed to the
utility and communications
market as an all-in-one
streamlined solution from
data capture on the IKE
device, preconfigured with
the IKE Field Android
mobile application,
through to measurement
and analysis on IKE Office
- a cloud-based software
platform.
Management has
determined the
individual performance
obligations of the
contract. The total
contractual price is
allocated to each
performance obligation
using the stand-alone
selling price.
Determining when the
performance obligation
is fulfilled.
Subscription Customers are required to
renew software
subscriptions to allow
continued access to the
IKE Office online cloud
functionality and the ability
to customise and add new
forms onto the IKE device.
Services
Service revenue is made
up of training, deployment,
and replacement device
revenue.
Determining when the
performance obligation
is delivered.
The subscription is in
two parts; 1. The lease
of the IKE device under
NZ IFRS 16 (there is no
right of substitution
therefore not considered
an operating lease), 2.
The subscription to IKE
Office. This requires
management to allocate
the contract price to
each performance
obligation and determine
when each performance
obligation is fulfilled
Determining when each
performance obligation
is fulfilled.
IKE Platform
as a Service
/
subscription
revenue
Customers subscribe to
the Platform to access
both an IKE device and
the functionality of IKE
Office. This subscription
enables customers to go
out in the field and collect
data via our online
platform, where IKE or the
customer can then
perform analysis.
IKE Analyze
Providing either an end-to-
end technical solution for
customers; IKE captures
and analyses pole loading
and make-ready
engineering assessments,
or customers capture pole
data and transact on our
platform.
Timing of revenue
recognition
Point in time
The IKE device is recognised
at the point in time when the
device is sent to the
customer.
Over time
IKE Office is recognised over
the term of the subscription
contract.
Over time
Subscription software
recognised over time.
Point in time
Service revenue is recognised
when the service is delivered.
Point in time
The lease of the IKE device is
recognised at a point in time
in accordance with NZ IFRS
16.
Over time
IKE Office is recognised over
the term of the contract.
Management has determined
that the IKE Device and
subscription to IKE Office are
distinct performance
obligations of the IKE
Solution. IKE has used the
stand-alone selling price to
allocate the contractual price.
Customers use IKE Office to
store and analyse data,
customise, and add new
forms. Along with integration
capability these performance
obligations can be described
as ‘stand ready’ services
which can be recognised
over time.
Revenue is recognised when
the service is performed for
the customer. For example,
when the training is
performed.
Management has determined
the contract price allocated to
the lease and subscription
portion of the platform
subscription is on the same
basis as the IKE solution
discussed above.
The performance obligations
for the subscription portion of
the IKE Platform are
consistent with the above
subscription treatment.
Either the customer uploads
or analyses the data in IKE
Office, or IKE performs the
analysis and completes
requested reports per the
scoping document. Once the
activity is complete the Group
will recognise the revenue.
Point in time
Each transaction (completed
record) is recognised when
the performance obligation
has been completed.
60
Notes to the consolidated financial statements for the year
ended 31 March 2023
5. Revenue (continued)
Revenue
Type
IKE
Structural
pole loading
software
license
IKE
Structural
pole loading
maintenance
and support
subscription
IKE Insight
revenue
Description
Key Judgements
Outcome
Timing of revenue
recognition
IKE sells a license of its
pole loading software to
customers.
Ongoing software support,
maintenance, and
software updates through
an annual subscription.
Management has
determined the
individual performance
obligations of the
contract. The total
contractual price is
allocated to each
performance obligation
using the stand-alone
selling price.
Determining when each
performance obligation
is fulfilled.
IKE Insight revenue is
derived from our IKE
Insight artificial intelligence
and machine learning
platform processing pole
data and delivering an
agreed output to the
customer.
Determining when each
performance obligation
is fulfilled.
Once customer data is
collected it is uploaded
onto the IKE Insight
platform where analysis
is completed based on
the statement of work
agreed.
Management has determined
that the perpetual license and
first year of maintenance and
support are separate
performance obligations. IKE
has used the stand-alone
selling price to allocate the
contractual price.
Point in time
The software license is
recognised at the point in time
when it is transferred.
Over time
The subscription is
recognised over the first year.
Customers use the
maintenance and support to
have the latest pole loading
software and calculations
available. These
performance obligations
occur at any time during the
subscription period.
The business is required to
perform certain analysis as
per the scoping document for
each customer. Once the
activity is complete, the
Group will recognise the
revenue.
Over time
Pole loading software
maintenance and support
subscriptions are recognised
over time.
Point in time
Each transaction (completed
record) is recognised when
the performance obligation
has been completed.
Spike device
ikeGPS sells Spike
devices through direct
orders and online
software.
No major judgement
required.
N/A
Point in time
Recognised when the device
is received by the customer.
Consideration received prior to the service being provided is recognised as deferred income (and commission
paid prior to the related contract performance is similarly deferred) on the consolidated statement of financial
position.
Other operating revenue includes consulting, device repairs, and training revenue. Revenue is recognised when
the services are performed.
61
Notes to the consolidated financial statements for the year
ended 31 March 2023
5. Revenue (continued)
Revenue
Sale of products (Point in time)
Platform-as-a-Service (Over time and Point in time)
IKE Analyze (Point in time)
IKE Insight (Point in time)
IKE Subscription (Over time)
IKE Structural licences (Over time and Point in time)
Services (Point in time)
Total operating revenue
Government grants
Other income
Total other income
Fair value movement on other liabilities
Fair value movement on financial instruments
Total movement of fair value assets and liabilities
2023
NZ$'000
2,850
3,464
18,664
-
3,519
1,846
446
30,789
192
95
287
2,261
313
2,574
2022
NZ$'000
3,539
1,690
6,087
285
2,814
1,125
425
15,965
61
4
65
1,342
(73)
1,269
In the current year, cash was received as government grants under New Zealand Trade and Enterprise
International Growth Fund, and the research and development tax credit incentive scheme, relating to FY21
research and development costs.
In the current year, one customer contributed 32% of revenue (2022: no customers over 10%).
Reconciliation of deferred income balances
Opening deferred income balance
Subscription revenue recognised
Platform-as-a-Service recognised
IKE Structural maintenance and support
Unsatisfied performance obligations for the current year
Closing deferred income balance
Current Deferred Revenue
Non-Current Deferred Revenue
Total Deferred Revenue
2023
NZ$'000
3,681
(1,860)
(1,178)
(524)
4,792
4,911
4,728
183
4,911
2022
NZ$'000
2,477
(1,380)
(590)
(479)
3,653
3,681
3,575
106
3,681
62
Notes to the consolidated financial statements for the year
ended 31 March 2023
6. Expenses
Operating expenses consist of operating, sales, marketing, engineering, research, and corporate costs.
Audit of consolidated financial statements
Total fees paid to auditor
Amortisation of development asset
Depreciation
Total amortisation and depreciation 1.
Employee benefit expense
Share-based payment
External contractors and consultants
Employee benefit expense capitalised 2.
Operating lease expenses3.
Direct selling and marketing 4.
Sales tax (expense reversal)
Impairment of assets
Credit loss provision movement and write-off expense
Other operating expenses 5.
Total operating expenses
12
24
2023
NZ$'000
189
189
2,235
920
3,155
15,808
1,174
2,041
(2,998)
215
2,615
(8)
3,030
(17)
2,782
27,986
2022
NZ$'000
170
170
1,459
464
1,923
11,982
1,930
1,176
(1,821)
250
1,551
(438)
100
67
2,566
19,456
1. Total depreciation for the year is $1,358k (2022: $995k), comprised of depreciation on fixed assets of
$1,143k (2022: $741k) as per note 12 and depreciation on leased assets of $215k (2022: $254k) as per
note 14. Engineering and research expenses included all the $1,716k of amortisation (2022: $1,459k)
and $7k of depreciation on fixed assets (2022: $210k). Corporate costs included all the $215k of
depreciation on leased assets under NZ IFRS 16 (2022: $254k). The balance of depreciation totalling to
$959k (2022: $531k) is included in cost of sales.
63
Notes to the consolidated financial statements for the year
ended 31 March 2023
6. Expenses (continued)
2. Relates to employee benefit expense, external contractors and consultants’ expenses that are directly
attributable to the development of intangible assets and have been capitalised.
3. Relates to short-term and low-value leases and common area maintenance costs.
4. Selling and marketing expenses included promotional activities, travel, commissions, and other direct
marketing costs.
5. Other operating expenses include corporate advisory, travel, engineering, facilities, and IT costs.
Employee benefits
Liabilities for wages, salaries, and short-term incentives (both settled and accrued), including non-monetary
benefits that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service, are recognised in respect of employees’ services up to reporting date.
They are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the consolidated statement of financial position.
For defined contribution plans, the group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual, or voluntary basis. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognised as an employee benefit expense when
they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in
the future payments is available.
Share-based payment
The Group operates an employee option scheme (equity-settled) under which employees receive the option to
acquire shares at a predetermined exercise price. The options are measured at fair value at grant date using the
Black Scholes model, with the fair value recognised as an employee benefit expense in the consolidated
statement of profit or loss with a corresponding increase in equity. The total expense is recognised over the
vesting period, being the period over which all the specified vesting conditions are to be satisfied. At the end of
each period, the Group revises its estimate of the number of options that are expected to vest based on the
service conditions. It recognises the impact of the revision to original estimates, if any, in the share-based
payment reserve with a corresponding change to the share-based compensation reserve in equity.
In addition, the Group provides share-based payments to employees related to business combinations. The
employees are required to perform service conditions and an expense is recognised over the service period. The
rewards are considered equity-settled and recognised as an employee benefit expense and an increase to either
share capital or the share-based compensation reserve.
Finance income and expenses
Interest income is recognised as it accrues, using the effective interest method. Finance expenses comprise
interest expense on lease liabilities, recognised using the effective interest method.
64
Notes to the consolidated financial statements for the year
ended 31 March 2023
7. Current and deferred tax
The current income tax charge is calculated based on the tax laws enacted, or substantively enacted, at the
reporting date in the countries where the Group operates and generates taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate based on amounts expected to be paid
to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined
using tax rates and laws that have been enacted, or substantively enacted, by the reporting date and are
expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is
settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
Prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax
expense in the consolidated financial statements as follows:
Net loss before income tax
Prima facie income tax credit at 28%
Effect of different foreign income tax rates
Non-deductible expenses
Deferred tax on temporary differences
Unrecorded tax losses
Income tax expense
Deferred tax opening balance
Temporary differences
Employee entitlements and provisions
Deferred research and development
Leases
Accruals
Property, plant, and equipment
Intangible assets
Other
Tax losses
Deferred tax closing balance
2023
NZ$'000
(7,879)
(2,207)
100
2,694
170
(749)
8
2023
NZ$'000
-
1
-
-
-
(5)
11
(7)
-
-
2022
NZ$'000
(7,857)
(2,200)
334
319
220
1,327
-
2022
NZ$'000
-
41
58
2
34
(309)
24
9
141
-
Deferred tax assets on deductible temporary differences have been recognised to the extent taxable temporary
differences exist in the same tax jurisdiction. No deferred tax asset is recognised in excess of the available
taxable temporary differences, due to the uncertainty of when the unused tax losses can be utilised.
Unrecognised deferred tax assets related to deductible temporary differences total $3,684,964 (2022: $473,190).
65
Notes to the consolidated financial statements for the year
ended 31 March 2023
7. Current and deferred tax (continued)
ikeGPS Group Limited has unrecognised tax losses of $17,884,787 (2022: $20,472,041) available for use against
future taxable profits, subject to the New Zealand Tax Legislation requirements being met. ikeGPS Inc has
unrecognised tax losses of $42,490,094 (2022: $37,223,844), of which $7,917,482 is available indefinitely for use
against future taxable profits and $37,300,269 available to be carried forward up to 20 years from the date the
tax loss was created.
8. Cash and cash equivalents
Cash and cash equivalents comprise cash balances.
Cash at bank
Total
2023
NZ$'000
18,048
18,048
2022
NZ$'000
24,354
24,354
An overdraft facility of NZ$250,000 is in place with the BNZ, which has security interest over all property of
ikeGPS Limited. On the BNZ facility, there is an outstanding guarantee to another party of $75,000.
Reconciliation of operating cash flows:
Loss for the year
Less Investment interest received
Add non-cash items included in net loss
Depreciation
Amortisation of intangible assets
Asset impairment
Raw materials and finished goods write-off
Trade receivables write-off
Tax Expense
Share-based payment expense
Write-off of obsolete materials and assets
Movement of fair value assets and liabilities
Foreign exchange losses on translation movement
Add/(less) movement in working capital items
(Increase) in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
(Increase)/decrease in contract costs
Increase/(decrease) in trade and other payables
(Decrease)/increase in provision
Increase in other liabilities
Increase/(Decrease) in deferred income
Increase/(Decrease) in employee entitlements
Net cash used in operating activities
2023
NZ$'000
(7,886)
(171)
2022
NZ$'000
(7,857)
-
1,358
2,235
3,030
242
-
8
1,232
54
(2,544)
(1,250)
4,365
(253)
(1,696)
487
(105)
528
222
157
1,230
650
1,220
(2,472)
995
1,459
100
126
67
-
1,930
249
(1,269)
(538)
3,119
(2,396)
(248)
(1,030)
(191)
796
(671)
299
1,204
373
(1,864)
(6,602)
66
Notes to the consolidated financial statements for the year
ended 31 March 2023
9. Trade and other receivables
Trade and other receivables arise when the Group provides cash, goods, and services directly to a debtor with
no intention of selling the receivable. They are included in current assets, except for those with maturities greater
than 12 months after reporting date that are classified as non-current assets.
The Group assesses impairment on a forward-looking basis, the expected credit loss associated with its
financial assets is carried at amortised cost. The Group will assess if there has been a significant increase in
credit risk by assessing market conditions, forward looking estimates, and previous financial history of
counterparts.
The Group applies the simplified approach permitted by NZ IFRS 9 for trade receivables, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
The expected credit losses on these financial assets are assessed using a provision matrix, adjusted for factors
that are specific to the receivables including customers’ historical credit loss experience, individual customer
characteristics, customer market segment, and the economic environment.
The Group writes off a financial asset when there is information indicating default or delinquency in payments,
the probability that they will enter bankruptcy, liquidation or other financial reorganisation, and there is no real
prospect of recovery.
Trade receivables
Impairment provision
GST receivable
Other receivables
Total trade and other receivables
10. Inventory
2023
NZ$'000
4,975
(88)
143
182
5,212
2022
NZ$'000
4,955
(128)
129
3
4,959
Inventory is measured at the lower of cost and net realisable value. The cost of inventory is based on a weighted
average cost, and includes expenditure incurred in acquiring the inventory and bringing it to its existing location
and condition. Cost comprises direct materials, direct labour, and production overhead. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. Inventory is treated as non-current if it is not expected to be sold
within twelve months of reporting date.
Finished goods
Components
Total inventory
Current
Non-current
2023
NZ$'000
764
1,946
2,710
2,472
238
2022
NZ$'000
493
779
1,272
1,003
269
67
Notes to the consolidated financial statements for the year
ended 31 March 2023
10. Inventory (continued)
During the year, IKE materials have been written down by $nil and Spike finished goods by $53,824 (2022: IKE
materials $24,710 and Spike finished goods $100,829).
11. Property, plant, and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Depreciation is
calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Office furniture and equipment
Plant and equipment
IKE rental devices
20% - 33%
20% - 50%
30%
Depreciation methods, useful lives, and residual values are reviewed and adjusted, if appropriate, at each
reporting date. Gain and losses on disposals are determined by comparing proceeds with the carrying amount
and are included in the consolidated statement of profit or loss.
IKE rental devices increased in FY23, in line with the increase in ‘Platform as a Service’ revenue (see note 5).
Cost
Balance at 1 April 2021
Additions
Disposals
Exchange differences
Balance at 31 March 2022
Balance at 1 April 2022
Additions
Disposals
Exchange differences
Balance at 31 March 2023
Depreciation
Balance at 1 April 2021
Depreciation for the year
Disposals
Exchange differences
Balance at 31 March 2022
Balance at 1 April 2022
Depreciation for the year
Disposals
Exchange differences
Balance at 31 March 2023
Carrying amounts
At 31 March 2022
At 31 March 2023
Plant and
equipment
NZ$'000
IKE rental
devices
NZ$'000
Office
furniture and
equipment
NZ$'000
Total
NZ$'000
1,311
-
(6)
-
1,305
1,305
57
-
-
1,362
1,192
46
-
-
1,238
1,238
22
-
-
1,260
986
1,453
(393)
2
2,048
2,048
1,754
(282)
240
3,760
306
485
(135)
(3)
653
653
879
(99)
77
1,510
650
308
(37)
2
923
923
322
(9)
108
1,344
396
210
(25)
1
582
582
242
(2)
76
898
2,947
1,761
(436)
4
4,276
4,276
2,133
(291)
348
6,466
1,894
741
(160)
(2)
2,473
2,473
1,143
(101)
153
3,668
67
102
1,395
2,250
341
446
1,803
2,798
68
Notes to the consolidated financial statements for the year
ended 31 March 2023
12. Intangible assets
Capitalised development costs
The Group capitalises employee and consultants’ costs directly related to development of an intangible asset.
The carrying values of capitalised development costs are annually evaluated for indicators of impairment.
Management has reviewed the expected remaining useful life of these assets and concluded that they are
appropriately amortised over periods of 4 to 10 years.
Following a review of the useful life of the development assets of the IKE Structural CGU directors have
determined that the useful life of the current in-service assets have reduced, giving a remaining useful life of 2
years. The assets in development and not yet available for use are unaffected by this change.
Development costs that are directly attributable to the design and testing of identifiable and unique software
controlled by the Group are recognised as intangible assets when the following criteria are met:
+
it is technically feasible to complete the software product so that it will be available for use,
+ management intends to complete the software product and use or sell it,
+
+
+
+
there is an ability to use or sell the software product,
it can be demonstrated how the software product will generate probable future economic benefits,
adequate technical, financial, and other resources to complete the development and to use or sell the
software product are available, and
the expenditure attributable to the software product during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
All research costs are recognised as an expense when they are incurred.
Other intangible assets
Separately purchased intangible assets (i.e. software) were recognised at cost, plus any initial directly
attributable costs. They are subsequently measured at cost less accumulated amortisation and impairment.
Purchased software has a useful life ranging from 4 to 10 years.
Software, customer contracts, relationships, trademarks, and training material acquired through business
combinations were initially recognised at fair value. They are subsequently measured at initial recognition value
less accumulated amortisation and impairment and have a useful life ranging from 4 to 10 years.
Goodwill
Goodwill is carried at cost less accumulated impairment losses and is annually tested for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired.
Goodwill is allocated to CGU4 for the purpose of impairment testing (see note 3 Impairment), as this CGU is
expected to benefit from the business combination in which the goodwill arose.
Impairment of non-financial assets
Intangible assets under development are not subject to amortisation and are annually tested for impairment
within CGU1, CGU3 and CGU4, or more frequently if events or changes in circumstances indicate that they might
be impaired. The carrying amount of the Group’s other non- financial assets are reviewed at each reporting date
69
Notes to the consolidated financial statements for the year
ended 31 March 2023
12. Intangible assets (continued)
to determine whether there is any indication of impairment or objective evidence of impairment. If any such
indication exists, the assets recoverable amount is estimated.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments for the time value of money and the risks specific to the asset for which estimates
of future cash flows have not been adjusted. If the recoverable amount of an asset or CGU is estimated to be
less than the carrying amount, the carrying amount is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately. Where an impairment loss subsequently reverses,
the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but only
to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised in prior years. A reversal of an impairment loss is
recognised in the consolidated statement of profit or loss immediately.
70
Notes to the consolidated financial statements for the year
ended 31 March 2023
12. Intangible assets (continued)
Development
assets
Work in
Progress
Patents Goodwill
NZ$'000 NZ$'000 NZ$'000 NZ$'000
Customer
contracts,
relationships,
Training
trademarks materials
Total
NZ$'000 NZ$'000 NZ$'000
Cost
Balance at 1 April 2021
Additions
Transfers
Exchange differences
Balance at 31 March 2022
Balance at 1 April 2022
Additions
Transfers
Expensed
Exchange differences
Balance at 31 March 2023
16,768
-
1,473
-
18,241
18,241
-
1,787
-
1,036
21,064
1,339
1,821
(1,473)
(13)
1,674
1,674
2,998
(1,787)
(68)
118
2,935
Amortisation and impairment losses
Balance at 1 April 2021
Amortisation for the year
Impairment
Exchange differences
Balance at 31 March 2022
8,260
1,330
100
(13)
9,677
Balance at 1 April 2022
Amortisation for the year
Impairment
Exchange differences
Balance at 31 March 2023
9,677
2,086
61
299
12,123
-
-
-
-
-
-
-
-
-
-
174
-
-
-
174
174
-
-
-
-
174
174
-
-
-
174
174
-
-
-
174
3,284
-
-
25
3,309
3,309
-
-
-
380
3,689
-
-
-
-
-
-
-
2,969
-
2,969
Carrying amounts
At 31 March 2022
At 31 March 2023
13. Leases
8,564
8,941
1,674
2,935
-
-
3,309
720
667
-
-
-
667
667
-
-
-
79
746
112
110
-
(3)
219
219
128
-
26
373
448
373
188
-
-
-
188
188
-
-
-
22
210
29
19
-
-
48
48
21
-
6
75
22,420
1,821
-
12
24,253
24,253
2,998
-
(68)
1,635
28,818
8,575
1,459
100
(16)
10,118
10,118
2,235
3,030
331
15,714
140
135
14,135
13,104
Lease assets are contracts that convey the right to use office space in both Colorado and Wellington. They were
initially recognised at the present value of the lease payments unpaid at inception. Subsequently, they are
recorded at cost less accumulated depreciation and impairment, adjusted for remeasurement of the lease
liability to reflect modifications.
71
Notes to the consolidated financial statements for the year
ended 31 March 2023
13. Leases (continued)
The corresponding lease liability to the lessor is included on the consolidated statement of financial position as
a lease liability. Lease payments are apportioned between finance charges and a reduction in the lease liability.
The finance charges and depreciation of the lease asset are charged to the consolidated statement of profit or
loss. Lease liabilities are measured at the present value of the remaining lease payments. The Group’s
‘incremental borrowing rate’ used in the discounting for all lease liabilities was 5.50%.
The leases typically ran for a period ranging from 1 to 3 years with an option to renew. The renewal periods for
leases were not taken into account, as management is reasonably certain that these will not be renewed. In
March 2023, a lease for new office space in Colorado was signed, the resulting lease will be accounted for on
commencement in April 2023.
The Group applied the exemption for low-value assets on the lease of the photocopier and the exemption for
short-term leases on the office space rented in Alabama, and Wellington. Therefore, the lease payments were
recognised as an expense on a straight-line basis over the lease term.
Lease liabilties
Balance at 1 April
Additions during the year
Payments made
Interest charges
Derecognition of lease liability
Exchange differences
Balance at 31 March
The maturity of the lease liabilities is as follows:
Less than one year
Lease liabilities recognised as at 31 March
Lease assets
Balance at 1 April
Additions during the year
Depreciation charges
Derecognition of lease assets
Exchange differences
Balance at 31 March
2023
NZ$'000
232
-
(227)
7
-
2
14
2023
NZ$'000
14
14
2023
NZ$'000
210
-
(215)
-
17
12
2022
NZ$'000
513
84
(325)
17
(61)
4
232
2022
NZ$'000
232
232
2022
NZ$'000
434
84
(254)
(56)
2
210
72
Notes to the consolidated financial statements for the year
ended 31 March 2023
13. Leases (continued)
The following leases are exempt from the application of NZ IFRS 16 and have been recognised as an expense
in the consolidated statement of profit and loss:
Photocopier
Office space
14. Trade and other payables
2023
NZ$'000
4
196
200
2022
NZ$'000
3
25
28
Trade and other payables are obligations to pay for goods and services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within
one year or less. Otherwise, they are presented as non-current liabilities. They are initially recognised at their fair
value and subsequently measured at amortised cost using the effective interest method.
Trade payables
Other payables
Accrued expenses
Total trade and other payables
15. Other liabilities
2023
NZ$'000
2,098
-
186
2,284
2022
NZ$'000
1,124
86
546
1,756
Other liabilities are obligations from prior year business combinations and were initially recorded at fair value.
Those that are deferred consideration are subsequently measured at amortised cost, and those liabilities that
are the result of contingent consideration are subsequently measured at fair value through profit or loss.
Less than one year
Accrued liabilities for services
Earn-out consideration on business combination
Accrued liabilities for services
2023
NZ$'000
2022
NZ$'000
534
-
534
728
1,923
2,651
The Group has employment agreements that result in cash payments being made to certain staff at the end of
a service period. The expense is accrued as services are delivered and payment is made at the end of the service
period. The liability was initially measured at fair value and subsequently measured at amortised cost.
73
Notes to the consolidated financial statements for the year
ended 31 March 2023
15. Other liabilities (continued)
Earn-out consideration on business combination (cash and shares)
The Group acquired Visual Globe assets in the 2021 year, and a contingent consideration was recognised
relating to achieving revenue milestones. The consideration consisted of both cash payments and share
issuances. The contingent consideration liability was initially and subsequently measured at fair value, with gains
or losses recognised in the consolidated statement of profit or loss.
The fair value of the contingent consideration was estimated by calculating the present value of the future
expected earn-out payment, using a 27.5% discount rate. The timing and likelihood of payment was determined
based on the forecasted revenue in the earnout period to end-March 2024. The Group now assumes no revenue
targets will be met within the earnout period, and therefore no consideration has been allocated to these targets.
A fair value gain of $2.3m has been recognised in the period from the movement of this instrument (2022: $1.3m
gain). The estimates of the probability and timing of the revenue targets being met are based on forecasted
cashflows and subject to both timing and achievement uncertainty, due to the early-stage nature of the business.
The inputs to determine the fair value were level 3, unobservable inputs.
16. Financial instruments and financial risk management
Financial instruments
Financial assets and liabilities are recognised on the Group’s consolidated statement of financial position when
the Group becomes a party to the contractual provisions of the instrument.
They are trade and other receivables, trade and other payables, cash and cash equivalents, foreign exchange
options, contract assets, employee entitlements, lease liabilities, and other liabilities. They are included in current
assets and current liabilities, except for lease liabilities with payment terms greater than 12 months, which are
included in non-current liabilities.
The Group classifies its financial assets and liabilities as ‘measured at amortised cost’ or ‘fair value through
profit or loss’ at initial recognition.
The following table shows the Group’s financial assets and liabilities and their classification:
Financial instrument
Cash and cash equivalents
Trade and other receivables and payables
Employee entitlements
Foreign exchange options
Contract Assets
Lease liabilities
Other liabilities – contingent consideration
Classification
Measured at amortised cost
Measured at amortised cost
Measured at amortised cost
Fair value through profit or loss
Measured at amortised cost
Measured at amortised cost
Fair value through profit or loss
74
Notes to the consolidated financial statements for the year
ended 31 March 2023
16. Financial instruments and financial risk management (continued)
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments
of principal and interest, are measured at amortised cost. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.
Interest income from these financial assets is included in finance income using the effective interest rate
method.
Financial liabilities carried at amortised cost are initially recognised at their fair value and subsequently
measured at amortised cost using the effective interest method. Interest expenses from these financial liabilities
are included in finance expenses.
The fair value of financial instruments carried at amortised cost is not materially different from their stated
carrying values.
Any gain or loss arising on derecognition of financial assets and liabilities is recognised directly in profit or loss
and presented in other gains and losses. Impairment losses on financial assets are presented as separate line
item in the consolidated statement of profit or loss.
Financial assets and liabilities recognised at fair value through profit or loss are originally and subsequently
remeasured to fair value, with gains and losses being recognised in the consolidated statement of profit or loss.
The following table shows the designation of the Group’s financial instruments:
2023
Financial assets
and liabilities at
amortised cost
Financial assets
and liabilities at
fair value
Total
carrying
value
Financial assets
and liabilities at
amortised cost
Financial assets
and liabilities at
fair value
2022
Total
carrying
value
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
Financial assets
Cash and cash equivalents
Trade and other receivables
Foreign exchange options
Total financial assets
Financial liabilities
Employee entitlements
Trade payables
Other payables
Accrued expenses
Lease liabilities
Other liabilities
Total financial liabilities
Financial risk factors
18,048
5,069
-
23,117
1,326
2,098
-
186
14
534
4,158
-
-
193
193
18,048
5,069
193
23,310
-
-
-
-
-
-
-
1,326
2,098
-
186
14
534
4,158
24,354
4,830
-
29,184
676
1,124
86
546
232
728
3,392
-
-
33
33
24,354
4,830
33
29,217
-
-
-
-
-
1,923
1,923
676
1,124
86
546
232
2,651
5,315
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk, foreign currency risk
and interest rate risks, which arise in the normal course of the Group’s business. The Group uses different
methods to measure and manage different types of risks to which it is exposed. Liquidity risk is monitored
through the development of future rolling cash flow forecasts.
75
Notes to the consolidated financial statements for the year
ended 31 March 2023
16. Financial instruments and financial risk management (continued)
Credit risk
The Group’s exposure to credit risk arises from potential default of a counterparty, with a maximum exposure
equal to the carrying amount of these instruments. Financial instruments that potentially subject the Group to
credit risk principally consist of cash and cash equivalents, trade and other receivables, and the foreign exchange
options. All cash and cash equivalents are held with high credit quality counterparties, being trading banks with
at least an ‘AA-‘ credit rating in New Zealand, and a Moody’s ‘A3’ rating in the USA. Following the collapse of
Silicon Valley Bank (SVB) and its subsequent purchase by First Citizen’s the group determines that there is no
risk to its cash holdings held by Silicon Valley Bridge Bank, N.A., a division of First Citizens Bank. This is due to
the liquidity position of First Citizen’s and the FDIC insurance coverage. The Group does not require collateral or
security from its trade receivables, it performs credit checks, ageing analyses, and monitors specific credit
allowances. The Group does not anticipate any material non-performance by customers. The total impaired
trade receivables as at reporting date is $87,691 (2022: $127,540).
At reporting date, 75% (2022: 94%) of the Group’s cash and cash equivalents were with one bank.
Maximum exposure to credit risk at reporting date:
Cash at bank
Trade and other receivables
Foreign exchange options
Total
Liquidity risk
2023
NZ$'000
18,048
5,069
193
23,310
2022
NZ$'000
24,354
4,830
33
29,217
Liquidity risk is the risk that the Group cannot pay contractual liabilities as they fall due. Management monitors
rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs,
taking into consideration the Group’s forward financing plans. Management believes that the Group has
sufficient liquidity to meet its obligations as they fall due for the next 12 months.
The following table sets out the undiscounted cash flows for all financial liabilities of the Group:
Employee entitlements
Trade payables
Accrued expenses
Lease liabilities
Other liabilities
Total financial liabilities
Contractual
cash flows
NZ$'000
1,326
2,098
186
14
534
4,158
6 months
or less
NZ$'000
-
2,098
186
14
534
2,832
6 months
1 to 2
years
to 1 year
NZ$'000 NZ$'000
-
-
-
-
-
-
-
-
-
-
-
-
2023
No stated
maturity
NZ$'000
1,326
-
-
-
-
1,326
76
Notes to the consolidated financial statements for the year
ended 31 March 2023
16. Financial instruments and financial risk management (continued)
Employee entitlements
Trade payables
Other payables
Accrued expenses
Lease liabilities
Other liabilities
Total financial liabilities
Contractua
l cash
NZ$'000
676
1,124
86
546
252
2,690
5,374
6 months
or less
NZ$'000
-
1,124
86
546
133
779
2,668
1 to 2
6 months
years
to 1 year
NZ$'000 NZ$'000
-
-
-
-
-
-
-
-
-
-
-
119
-
119
2022
No stated
maturity
NZ$'000
676
-
-
-
-
1,911
2,587
Foreign currency risk management
The Group is exposed to foreign currency risk on its revenue and a significant portion of its expenses that are
denominated in USD, which is different to the Group’s presentational and parent’s functional currency NZD.
Additionally, the institutional placement and share purchase plan completed during the year was predominantly
in AUD, creating additional foreign currency risk exposure. Therefore, the Group has purchased AUD/USD foreign
exchange options to mitigate the risk on its AUD cash holdings.
If the NZD strengthened / weakened against the USD or AUD by 10% at 31 March 2023, the pre-tax loss would
have been (higher) / lower as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Sensitivity analysis
2023
2022
2023
2022
Carrying
amount in
USD
US$'000
5,321
3,147
(882)
2023
Carrying
amount in
AUD
AU$'000
5,615
-
(9)
Carrying
amount
US$'000
7,586
8,963
Carrying
amount in
USD
US$'000
6,420
3,367
(824)
2022
Carrying
amount in
AUD
AU$'000
13,144
-
(8)
Change in
USD rate
%
10%
-10%
10%
-10%
Effect on loss
before tax
NZ$'000
(989)
1,208
(1,168)
1,428
Carrying
amount
AU$'000
5,606
13,137
Change in
AUD rate
%
10%
-10%
10%
-10%
Effect on loss
before tax
NZ$'000
(549)
671
(1,286)
1,572
77
Notes to the consolidated financial statements for the year
ended 31 March 2023
16. Financial instruments and financial risk management (continued)
Interest rate risk management
The Group’s interest rate risk arises from its cash balances. The Group currently has no significant exposure to
interest rate risk other than in relation to the amount held at the bank. A reasonably expected movement in the
prevailing interest rate would not materially affect the Group’s consolidated financial statements.
17. Fair value estimation
The Group measures certain assets and liabilities at fair value either at initial recognition and/or continually. To
determine these fair values, valuation techniques are utilised.
To provide an indication about the reliability of the inputs used in determining fair value, the Group has identified
what level of input is utilised in the valuation in the note for each asset or liability. An explanation of each level is
below.
Level 1: The fair value of assets/liabilities traded in active markets (such as publicly traded derivatives, and equity
securities) is based on quoted market prices at the end of the reporting period.
Level 2: The fair value of assets/liabilities that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and
rely as little as possible on entity-specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the asset/liability is
included in level 3.
18. Contributed equity
Share capital
On issue at the beginning of the year
Issued under share placement
Issued under share purchase plan
Less listing costs offset against issue proceeds
Exercise of share options
Issued as part of business combinations
Total share capital
Shares on issue
Fully paid total shares at the beginning of the year
New ordinary shares offered
Ordinary shares issued on settlement of options
Ordinary shares issued as part of business combinations
Fully paid ordinary shares
2023
NZ$'000
104,751
-
-
-
27
340
105,118
2022
NZ$'000
80,932
19,293
5,476
(1,639)
204
485
104,751
2023
2022
159,296,738
-
9,811
425,196
159,731,745
133,140,763
24,801,112
564,092
790,771
159,296,738
The share capital of the Group consists of fully paid ordinary shares with no-par value attached. Authorised
shares that have not been issued have been authorised for the Group’s employee share options and other
contractual share-based payments (see Note 21)
78
Notes to the consolidated financial statements for the year
ended 31 March 2023
19. Basic and diluted earnings per share
The Group presents earnings per share (‘EPS’) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the year.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of shares that would be issued on conversion of all the dilutive potential ordinary shares into
ordinary shares.
Total loss for the year attributable to the owners of the parent (NZ$'000)
Ordinary shares issued
Weighted average number of shares issued
Basic loss per share
2023
(7,886)
159,731,745
159,559,589
(0.05)
$
2022
(7,857)
159,296,738
148,854,956
(0.05)
$
The potential shares and options are anti-dilutive in nature due to the Group being in a loss position. The diluted
loss per share is therefore the same as the undiluted EPS at ($0.05) for the respective periods.
20. Capital management
The capital structure of the Group consists of equity raised by the issuance of ordinary shares. The Group
manages its capital to ensure it can continue as a going concern and is not subject to any externally imposed
capital requirements.
The Group’s aim is to have a sufficient capital base to maintain investor and creditor confidence and to sustain
future development of the business. Capital requirements are regularly reviewed by the Board of Directors.
There have been no material changes in the Group’s management of capital from the previous year.
21. Share-based payments reserve
The share-based payments reserve is used to recognise both the fair value of options issued to employees but
not exercised and contractual share payments to be made to employees based on the period of employment.
Share-based payment reserve
Share options
Contractual share-based payments
Total
2023
NZ$'000
2022
NZ$'000
3,344
355
3,699
2,267
501
2,768
The contractual share-based payments are in relation to employees who have service conditions, which when
completed grant the right to shares. These arrangements arose from prior business combinations.
The Group has no legal or constructive obligation to settle the shares in cash and has no history of choosing to
settle these payments in cash. As such, these awards are treated as equity settled share-based payments.
79
Notes to the consolidated financial statements for the year
ended 31 March 2023
21. Share-based payments reserve (continued)
The Group determined the value of shares issued under contractual share-based payments based on the agreed
share price at the time of grant. This price is fixed.
A total of 425,196 shares at a value of $339,875 were issued during the period for services rendered (2022:
209,322 shares at $136,266 value).
Share options were granted to directors and selected employees to retain, reward, and motivate such individuals
to contribute to the growth and profitability of the Group.
Options outstanding at 31 March 2023 have a contractual life from grant date of between 4 and 6 years. Options
can be exercised at any time after vesting and unexercised options expire at the end of the contract or if the
employee leaves the Group. The Group has no legal or constructive obligation to repurchase or settle the options
in cash. Any share to be issued on the exercise of the option will be issued on the same terms and will rank
equally in all respects with the ordinary shares in the company on issue.
Movements in the number of share options outstanding and their related average exercise prices are as follows:
At 1 April
Granted
Exercised
Forfeited
Lapsed
Expired
2023
Number of
options
’000's
5,834
2,487
(80)
(127)
(228)
nil
7,886
Average
exercise price
$0.64
$1.01
$0.59
$0.70
-
nil
$0.80
2022
Number of
options
’000's
3,505
3,329
(799)
(201)
-
nil
5,834
Average
exercise price
$0.80
$0.78
$0.59
$0.84
$0.94
nil
$0.79
Out of the 7,886,000 outstanding options 5,087,593 (2022: 3,028,106) had vested and were exercisable at
31 March 2023.
Options outstanding
Share options outstanding at the end of the year have the following expiry date and exercise price:
Year Granted
2020
2021
2021
2022
2022
2022
2023
Expiry date
31-Mar-25
31-Dec-24
30-Jun-25
30-Jun-25
30-Jun-26
30-Sep-26
31-Jul-27
Exercise price
$0.51
$0.90
$0.75
$0.75
$1.06
$1.06
$0.78
2023
Term
remaining
(years)
2
1.76
2.25
2.25
3.25
3.5
4.34
Number of
options
1,190,000
300,000
1,000,000
365,000
2,494,000
150,000
2,387,000
Number of
options
1,235,000
300,000
1,000,000
455,000
2,694,000
150,000
2022
Term
remaining
(years)
3
2.75
3.25
3.25
4.25
4.5
80
Notes to the consolidated financial statements for the year
ended 31 March 2023
21. Share-based payments reserve (continued)
Measurement of fair value
The Company determined the fair value of options issued using the Black Scholes valuation model. The
significant inputs to the model were level 3 inputs and were:
Fair value of options issued in the year
Weighted average share price
Exercise price
Volatility
Dividend yield
Risk free interest rate
See note 17 for details of the fair value hierarchy.
22. Related Parties
2023
$0.41
$0.83
$0.78
50%
Nil
3.27%
2022
$0.52, $0.60, $0.47, $0.48
$1.14
$0.75 & $1.06
55%
nil
0.85% - 2.38%
ikeGPS Limited and ikeGPS Incorporated are 100% owned by ikeGPS Group Limited (2022: 100%). All
subsidiaries have 31 March reporting dates.
Name of entity
ikeGPS Limited
ikeGPS Incorporated
Country of
incorporation Principal activity
New Zealand
USA
Product development and business operations
Product development and business operations
2023
2022
NZ$
1,000
1,000
2,000
NZ$
1,000
1,000
2,000
Key management are identified as the Chief Executive Officer, Chief Financial Officer, and Board Directors.
Short term benefits to Board Directors and senior management
Share-based payment expense Board Directors and senior management
2023
NZ$'000
1,947
459
2022
NZ$'000
1,619
854
The Group issued 864,000 of unlisted share options at NZD$0.78 to Key Management during the period in
accordance with the ikeGPS Group Limited Employee Share Scheme (2022: 1,799,000 at NZD$0.75 and
NZD$1.06).
In addition to the unlisted options issued, nil options were exercised by key management or Board Directors
(2022: 779,164 options resulting in 317,261 ordinary shares).
81
Notes to the consolidated financial statements for the year
ended 31 March 2023
23. Commitments and contingencies
Non-cancellable short-term and low-value leases or lease related costs
Less than one year
Between one and five years
Total
2023
NZ$'000
2022
NZ$'000
11
5
16
108
-
108
Operating leases are in relation to rented premises (short-term under one year) and photocopiers (low-value
assets). These exclude leases accounted for under IFRS 16.
24. Provisions
2023
Opening balance
Provision Added
Provision used
Provision estimate reversed
Foreign exchange movement
Closing balance
2022
Opening balance
Provision Added
Provision used
Provision estimate reversed
Foreign exchange movement
Closing balance
Sales Tax
Corporate Tax
NZ$'000
-
262
-
-
-
262
Corporate Tax
NZ$'000
-
-
-
-
-
-
Sales Tax Total Provisions
NZ$'000
NZ$'000
40
40
262
-
(8)
(8)
(32)
(32)
-
-
262
-
Sales Tax Total Provisions
NZ$'000
NZ$'000
711
711
-
-
(245)
(245)
(438)
(438)
12
12
40
40
The primary market for sales of the Group’s products or services is the USA and sales tax obligations can arise
where IKE is deemed to have sales tax nexus.
Previously, the Group identified that customer sales tax was payable in multiple States and a best estimate of
the liability was provided for in the FY21 consolidated financial statements. The Group completed the process
of voluntary disclosure and remitted the sales tax owed to the respective States.
Corporate Tax
The Group has identified a potential tax obligation linked to a series of intercompany transactions.
As the transactions have occurred the Group considers it to be more likely than not the obligation exists.
82
Notes to the consolidated financial statements for the year
ended 31 March 2023
25. Subsequent events
The Group has entered into a lease on a new office in Broomfield, Colorado which commences on 1st April 2023.
On 2nd May 2023 Eileen Healy resigned as a director of ikeGPS
83
ikeGPS Group Limited
Level 7, 186 Willis Street
Te Aro
Wellington, 6011
Telephone: +64 4 382 8064
Directors of ikeGPS Group Limited
Alex Knowles
Frederick Lax
Richard Gordon Maxwell Christie
Mark Ratcliffe
Glenn Milnes
Legal Advisers
Chapman Tripp
10 Customhouse Quay
PO Box 993
Wellington, 6140
Telephone: +64 4 499 5999
Auditor
Grant Thornton
Level 15, Grant Thornton House
215 Lambton Quay
PO Box 10712
Wellington 6143
Share Registrar
Link Market Services Limited
PO Box 91976, Auckland 1142
Level 30 PWC Tower
15 Customs Street West, Auckland 1010
Telephone: +64 9 375 5998
Bankers
Bank of New Zealand
20-54 Mount Wellington Highway
Mount Wellington, Auckland 1060
Private Bag 39806,
Wellington Mail Centre,
Lower Hutt 5045
www.ikegps.com
84
www.ikegps.com