For the year ended
30 June 2022
SenSen Networks Limited and Controlled En��es
ABN 67 121 257 412
ANNUAL REPORT CORPORATE INFORMATION
SenSen Networks Limited
ACN 121257412
Directors
Dr Subhash Challa, Executive Chairman
Mr Zenon Pasieczny, Non-Executive Director
Mr David Smith, Executive Director
Ms Heather Scheibenstock, Executive Director
Company Secretary
Mr David Smith
Chief Financial Officer
Mr Christian Stevens
Registered Office and Principal Place of Business
2/570 City Road,
South Melbourne, VIC 3205
Telephone: +61 3 9417 5368
Share Register
Computershare Investor Services Pty Limited
Level 4, 60 Carrington Street
Sydney NSW 2000
Australia:
Overseas callers:
Facsimile:
Internet:
1300 850 505
+61 3 9415 4000
+61 3 9473 2500
www.computershare.com.au
Stock Exchange Listing
SenSen Networks Limited shares are listed on the Australian Securities Exchange (ASX Code: SNS).
Solicitors
Thomson Geer Lawyers
Level 16, Waterfront Place
1 Eagle Street
Brisbane Qld 4000
Auditors
BDO Audit Pty Ltd
Level 10, 12 Creek St
Brisbane City, QLD 4000
Bankers
Commonwealth Bank of Australia
727 Collins Street
Melbourne VIC 3000
Website
www.sensen.ai
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LETTER FROM THE CHAIR & CEO
Dear Fellow Shareholders,
I warmly welcome all new and existing shareholders to
SenSen’s Annual Report for the financial year ended
30 June 2022 – another year of unprecedented success
since listing on the ASX in 2017.
In our increasingly complex world, it has never been
more vital for cities and enterprises to run
efficiently and productively for the benefit of all stakeholders.
To optimise the management of the complex
interactions that lie at the heart of modern cities and enterprises – the movement of people,
vehicles and objects – we’ve built the world’s leading Live Fusion AI platform, SenDISA, that powers all
SenSen applications.
It’s a platform that has generated record revenues for our company YoY while improving the lives of
millions of people who enjoy safer roads, more pleasant commuting journeys, more efficient parking,
reduced crime and leisure opportunities because of it. Best of all, we’re only just getting started. It’s a
horizontal AI technology platform capable of gathering, analyzing and fusing data from every sensing device in
common use today – cameras, radar, Lidar, GPS, passive infrared sensors – to solve problems across all
industries that were often considered impossible to solve through traditional means.
We’ve made our mark in four business verticals – Smart Cities, Casinos, Retail, Smart Surveillance – and have
a pipeline of emerging technology applications in many attractive new sectors. All our solutions are built on
SenSen’s intellectual property that is protected by a significant and growing patent vault. We currently have 10
patent families. Of these, 8 families have granted patents and 2 are pending. In FY 2022 we lodged one new
provisional application, three PCT applications, three divisional applications, three Australian innovation patents,
and two convention applications based on an existing provisional application. In addition, there are five draft
applications being prepared for filing.
Against the backdrop of extreme world events, like the war in Ukraine, uncontrolled inflation globally and
COVID-19 induced supply chain and labour shortages, SenSen continued to grow strongly. The following are the
key highlights for FY22:
• The company delivered record revenues of $9.1M (65% growth YoY) and record annual customer cash
receipts of over $8.9M for FY22.
• ARR has grown from a run rate of $4.0M at the end of June 2021 to $6.0M by end of June 2022 and is on
track to grow to $8.0M by the end of H1 2023.
• Our customer net retention rate for FY22 is 103% (2022: 120%+), which reflects the value we bring to
•
•
improving the business operations and customer service experiences of our customers.
In alignment with our active growth strategy, SenSen acquired Scancam Industries, a world leader in AI-
powered fuel theft reduction. This strategic acquisition enabled SenSen to accelerate growth into smart
surveillance with a focus on fuel retail.
Successful integration of Scancam into SenSen’s technology stack enabled us to grow the customer base
from 250 to 330 in FY22 and we are on track to grow the market further in FY23 and beyond.
• This followed the successful capital raise of $10M in November 2021 indicating strong market demand
from institutional and sophisticated investors as well as existing shareholders who participated through
an SPP into our investment thesis. The funds are being invested to accelerate revenue and enhance our
delivery capabilities to global customers, especially in the USA.
• We developed three new products – Scancam Edge, SenFORCE EMT, SenPIC – and lodged one new patent
application while continuing to progress earlier patent applications.
• Our company won the Best Product Innovation from Parking Australia for SenFORCE EMT.
• We applied our patented skeletal tracking technology to sports analytics applications and progressed
multiple trials with various sports governing bodies and organisations.
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LETTER FROM THE CHAIR & CEO
• Unveiled recent breakthroughs we have achieved with solar and drones; these were built to handle AI
processing in tough Australian conditions but are proving in demand from many international locations.
• Worked with blue-chip Smart City customers Chicago and Las Vegas who are using our Australian
ingenuity to deal with a post-COVID surge in tourists and the resumption of commercial activities.
We have committed to continued investment in SenSen’s technology capability to deliver on our future
roadmap. We rebranded and changed our web presence to www.sensen.ai to better reflect our vision and
capabilities to deliver sophisticated AI-driven, data-fusion solutions. We are on track with our plans to scale
rapidly across all business verticals and are looking to build growth momentum by:
•
Investing – developing marketing and sales channels to support accelerated growth into the Smart Cities,
Retail, Smart Surveillance and Casino markets and enabling our product team to create robust, scalable
products.
• Expanding – establishing a foothold in all current and adjacent market verticals, including:
o Growing the use of SenSen’s Smart Surveillance analytics software from 10,000+ cameras to 100,000+
cameras in 2-3 years
o Growing SenSen’s Casino Gaming solutions from three Casinos to 30+ Casinos in 2-3 years
o Grow SenSen’s Fuel Theft solutions offering from 330+ to 1000+ in 2-3 years. Our long-term focus is to
implement this solution in the broader retail market and grow to 1000+ stores in 2-3 years
o Growing SenSen’s Smart Cities solutions, including road safety, traffic analytics, curbside and parking
management solutions, from 35+ Cities to 100+ Cities in 2-3 years.
As we look to the future with a mid to long-term lens, SenSen’s growth ambitions lie in the reputation we
have built for developing disruptive new innovations to transform industries. The creativity of our R&D
engineers is the foundation of SenSen’s vision, which is a lifelong commitment to solve real problems with
better-built solutions benefitting from data fusion insights.
Today our emerging technology team is working in partnership with blue-chip business partners across a variety
of sectors in the economy. These industries range from sports analytics and autonomous vehicles to the
application of robotics in the aged care sector. Our partners and customers see the value of adopting our world-
leading sensor AI technology to solve their problems and create efficiencies in the delivery of products and
services to the markets in which they serve.
I sincerely thank SenSen’s team of engineering professionals and industry experts in Data Fusion, AI, Machine
Learning, Deep Learning and Computer Vision. Thanks to their passion and rigor to positively transform
people’s lives with Sensor AI, SenSen is on a steep trajectory for growth as we move forward breaking new
ground and creating new markets for Sensor AI technology.
I would like to thank SenSen’s shareholders who continue to support and believe in our Company. I also
thank my fellow Board members for their contributions during the year, and our staff and management for the
efforts they delivered in two consecutive record-breaking financial years of 2021 & 2022.
I look forward to leading our company and sharing further progress with shareholders as we move forward in
delivering on our strategy and plans to build an outstanding global business as we look to the long-term goal of
listing on the NASDAQ.
Sincerely,
Dr Subhash Challa, Executive Chairman and CEO
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CORPORATE VALUES
Corporate Values
Integrity – Always doing the right thing, and bring this value into all customer and employee relationships
Ingenuity – Solve problems considered impossible by our customers through innovation.
Excellence – Deliver solutions and service that exceed our customer expectations.
Corporate Identity
We are world leaders in Sensor AI.
We achieve this by solving customer problems that were once considered impossible and by positively
transforming people’s lives in innovative ways.
Corporate Behavior
We are relentless in our pursuit of excellence and turning what seem like impossible problems into working
solutions.
We do this by listening to the issues faced by customers, working intensely with them to resolve their pain
points, and building inventions that work based on our deep understanding of AI, Machine Learning, Deep
Learning and Data Fusion.
Corporate Design
In an increasingly urban world, it's easy to lose sight that cities are meant to serve citizens and make their
lives easier.
By teaming with Dutch illustrator Timo Kuilder – whose deceptively playful work is known to business
audiences via NY Times, The Economist and Bloomberg – SenSen is part of the growing movement to bring
joy and comfort back to people's lives.
We disguise the complexity of our technology prowess through human-friendly design and stylish product
delivery.
Corporate Culture
Our culture of constant reinvention is made possible by the ability and eagerness of our people to pivot and
progress while strengthening relationships and commercial outputs.
The conventional does not serve us, neither our customers nor staff.
Unafraid of taking risks and learning from mistakes, we are 'ingenious by design' – a state of constant
evolution as demonstrated by our many world-firsts.
We are anti-fragile, our every setback made us come back stronger.
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SENSOR AI & LIVE FUSION PLATFORM SENDISA
SenSen aspires to be the Global leader in Sensor AI delivering Live Fusion Solutions. Live Fusion is a
category of AI solutions that is concerned with automating Live (real-time) operations by fusion of Live
streaming cameras and sensors to solve problems faced by enterprises in their everyday operations.
Live Fusion
•
•
Live refers to real-time operational scenarios in physical environments.
Fusion refers to integration of data from multiple sources to extract accurate insights that are
otherwise impossible to obtain from a single source.
• Data sources of particular interest in Live physical environments are cameras, GPS and sensors
like Lidar, Radar and other contextual sources like GIS, transactional data like payments/permits,
textual data, and other data.
Over the last decade, SenSen has been developing a highly reconfigurable Live Fusion platform –
SenDISA – which injects data from cameras and sensors in physical environments like cities, airports,
casinos, retail stores and others to:
•
•
Track objects with location, time, and other attributes such as people, vehicles, and assets in
motion and in real-time
In complex scenarios such as parking in Smart Cities, table games in casinos, surveillance in
airports & seaports
Our technology and products are proven in multiple business verticals with blue chip and government
clients and in multiple geographies. Intellectual property has been built over 15 years working in close
collaboration with customers having Live Fusion problems and protected by multiple patents.
Three critical components work together – data fusion, AI algorithms, software – to produce results that
improve the productivity and safety of our customers’ operations and deliver business insights that are
otherwise impossible to obtain from traditional data sources.
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SENSOR AI & LIVE FUSION PLATFORM SENDISA
Problems We Solve
SenSen’s Live Fusion is used to solve problems for a wide range of customer use cases. The following are the
defining characteristics of Live Fusion problems, and they exist in every kind of enterprise. The problems are
related to the:
•
•
•
core business of the client, e.g. generating revenue, managing costs or delivering an exceptional
customer experience that directly ties to the value proposition
activities happening in a complex physical environment captured by cameras and sensors; and
fusion of data from multiple sources which delivers richer insights than any single source of data.
SenSen’s competitors differ from one market segment to another; they typically do things manually or use
point products with limited functionality that do not meet all the requirements of the problem. Many
competitor solutions cannot handle the exponential complexity of complete requirements to solve customer
problem. In contrast, thanks to SenDISA, SenSen can use a platform approach to address exponentially
complex live fusion problems. This approach is superior because:
•
•
single point products are limited in scope and often do not meet the full spectrum of customer
requirements
single point products frequently spiral into highly competitive environments with continuously
lowering margins, ie the commodity trap.
Platform-based solutions, meanwhile, can meet the full spectrum of customer requirements because they are
easily customizable and configurable. Once the first customer’s pain points are resolved, the product can be
rolled out to new customers quickly and easily.
Plus, once a customer knows SenSen is adding value, they are open to up-selling and cross-selling new
modules and add-ons that are essentially configurations of the same platform.
The best-known live fusion platforms in the world are driver-less cars and advanced robots where cameras and
sensors operate in real-time to achieve high-level objectives like navigating from one place to another or
performing complex tasks autonomously. However, until now few such platforms have been available to solve
enterprise problems linked to operational scenarios happening live (in real-time). That’s because they need to
use similarly sophisticated analysis and fusion used in autonomous vehicle but for enterprise objectives such
as increasing revenue, cutting costs, improving productively and safety, or improving the customer experience.
SenSen is leading the way in developing such a platform. We have invested over 15 years of intense research
to develop SenDISA that is today solving Live Fusion problems in multiple industries, use cases and multiple
geographies delivering unprecedented value to customers. Some examples of Live Fusion problems that
SenSen is able to solve using the Live Fusion platform approach are outlined here.
Civic Compliance Problems for Cities
•
•
•
•
Problem: Parking is a necessary revenue generator for cities while also maintaining fairness for
business owners, commuters and shoppers.
Live: Operational scenario is to check if motorists are parked legally and paying for the spaces used.
Fusion: Location of vehicle, signage, occupancy, disability permits and at-risk plates.
Environment: Cities are a complex grid of vehicles, parking configurations, day/night rules and on/off
street rules.
Exponential Complexity: Complex business rules related to parking need integration of cameras, GPS,
GIS, payments/permits, signage and civic regulations.
• Market Opportunity: City Council Parking Operations
•
•
Competition: Manual enforcement operations and Mobile LPR solutions
SenSen Solution: SenFORCE
•
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SENSOR AI & LIVE FUSION PLATFORM SENDISA
Live Table Games Operations Management in Casinos
• Problem: Table games are a significant revenue generator for casinos
•
Live: Operational scenario is to accurately rate players in real-time, allocating reward points and
improving customer loyalty. In addition, dynamic pricing can be used to maximize yield.
Fusion: Casinos are a complex hive of people, activities, attributes, scenarios, events and motion. A
solution has to be built around table games, game analytics, bet evaluation, governance, harm
minimisation (KYC) and player recognition/rewards.
•
• Physical Environment: Casino table games, floor movements and staff requirements.
• Exponential Complexity: Variety of table games, game rules, business operational rules, dealers,
players, table configurations and lighting
• Market Opportunity: 50000+ Tables spread across 9000+ Casinos
• Competition: Current solutions are manual, not real-time, and are often not accurate; The alternative
solutions include RFID, combination and several other camera-based solutions
SenSen Solution: SenGAME
•
Smart Surveillance preventing Fuel Theft
• Problem: Fuel theft is rampant, especially with the cost-of-living pressures on the rise, and petrol
stations want to prevent crimes before they happen to reduce retail losses, increase profitability and
deal with the complexity of crime reporting
Live: Operational scenario is to Intercept fuel theft and other crimes in real-time
Fusion: Vehicle license plate, location and time, history of crime, link to vehicles-of-interest databases
•
•
• Physical Environment: Fuel stations, mini-marts and retail stores
• Exponential Complexity: Tracking vehicles between fuel stations, matching with multiple databases
including police, alerting in real-time, crime reporting
• Market Opportunity: 6000+ Fuel Stations in Australia Alone, Thousands more globally
• Competition: Competitor solutions are manual, not real-time, and often fuel retailers are too busy so
they resort to a do-nothing approach which no longer works as the market value of theft rises
SenSen Solution: Scancam
•
Smart Surveillance Tracking People Over a Network of Cameras
• Problem: Track persons of interest over large-scale camera networks in real time or forensically
•
Live: Operational scenario is to direct operators where a person of interest has been and the
direction, he/she is heading so they can do their jobs most effectively and intercept crime in real-time
Fusion: Person of Interest, location and time, camera relationships, Video Management Systems
•
• Physical Environment: Airports, universities, hospitals, schools, other large-scale facilities
• Exponential Complexity: Tracking people over many networked cameras
• Market Opportunity: Large Scale Surveillance Deployments Worldwide
• Competition: Competitor solutions are manual, not real-time
•
SenSen Solution: SenTRACK
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FINANCIAL SUMMARY
Financial Year 2022 is a record-breaking year as a result of acquisition, organic growth and a focus on emerging
technologies. This continued and sustained growth saw the company deliver on our strategy to expand our
business verticals – Smart Cities, Retail, Casinos and Surveillance – and provide the operational support to
grow.
Our major achievements include record cash receipts from customers since listing, the acquisition of the fuel
theft retail monitoring business Scancam Industries, and expansion into the US through opening of our Las
Vegas headquarters.
We also presented an updated ARR guidance to the market which we look forward to achieving as we expand
our footprint across the globe.
A summary of our outstanding foundational results that will lead to exponential growth in the coming years:
• Record revenues and customer cash receipts since inception
•
•
$9.1M revenue for the financial year 2022
$8.9m cash receipts for the financial year 2022
• A strong cash position, posting $6.2M in cash and cash equivalents with unused finance facilities
available of $1.8M. The cash position at 30 June 2022 includes monies subsequently reconciled after
year end that were consolidated by the Company.
• All verticals grew substantially over the last 12 months
•
•
Smart Cities grew from $4.8M to $5.9M
Casinos grew from $0.7M to $0.8M
• Retail Surveillance grew following the acquisition of Scancam in July 2021 to $2.4M for FY22
•
Established strong YoY ARR (unaudited) growth profile
•
•
•
Forward-looking ARR of $6.7M representing 100% YoY ARR growth for FY22
Forward NRR or Net Retention of 103%+ in FY22
Zero Churn of significant customers
• MRR has grown over the last 12 months from $400K per month to $500K per month and
this trend of strong MRR growth is expected to continue.
• November and December 2021 – Capital raise: SenSen successfully raised $10.0M to fund our
international revenue growth acceleration strategy.
The Company undertook a significant review of research and development activities carried out during FY22.
It was determined not to capitalise development costs due to:
• Minimal benefit to the profit and loss and balance sheet
•
Internal systems and support necessary to meet the ‘reliable measure’ requirement under AASB 138
• Onerous cost of compliance (cost versus benefit).
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FINANCIAL SUMMARY
Smart Cities APAC
2022 has been an exciting year for SenSen and our Smart City customers. We have increased our net number
of customers by 50% in the APAC region, adding one federal, two state, several private car parks, and several
council customers, all of which attract annual recurring revenue.
Some of our new smart city customers include:
• Care Park Pty Ltd, Adelaide
• City of Adelaide, South Australia
• National Heavy Vehicle Regulator
• Queensland Revenue Office
•
• Toowoomba Regional Council, through our partner Duncan Solutions
• Victorian Department of Transport
• City of Cockburn, Western Australia
Sunshine Coast Regional Council
These new customers, particularly those in South Australia, represent our first Smart City customers in that
region, setting us up for cluster behavior where new councils adopt the same advanced technologies as other
key customers in the region, a trend we have seen in Queensland over the last couple of years.
To sustain our existing customers and to unlock new revenue streams while onboarding new customers, we
recruited an experienced parking, council, and customer service professional (Kristen Prosser) into the role of
Customer Success Manager. This led to several existing customers extending their commitments and
increasing the range of our products and services, including:
• Brisbane City Council
• City of Gold Coast, through our partner Duncan Solutions
• Hills Shire Council
•
•
• Transport for New South Wales
Ipswich City Council
Singapore Land Transport Authority
Flood events affected variable revenue particularly in early 2022 as our customers relaxed compliance
operations to support community recovery. During this period we were able to assist customers by advising
on techniques to repurpose our digital compliance systems to support recovery efforts, such as recording
footage of curbside waste that needed collecting.
In late 2021 our work with key customer Brisbane City Council was recognized nationally with a joint award for
the Best Technology Innovation at the Parking Industry Awards for our Environment Mapping Technology. As
we move into FY23, we hope to continue building momentum in signing new customers and unlocking new
revenue streams from existing customers.
Smart Surveillance
There are three components to the Smart Surveillance business vertical with three distinct product lines
generating revenues from three geographies: Australia, Singapore and the USA. Smart surveillance revenues in
Australia are driven by Scancam – a fuel theft reduction solution. In Singapore, revenue is driven by advanced
video analytics software (SenVAS) for the Land Transport Authority, seaport and airport applications. Finally in
the USA, revenue is driven by multi-camera, computer-aided person tracking: SenTRACK.
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FINANCIAL SUMMARY
Scancam
After the successful acquisition of Scancam Industries Pty Ltd mid-July 2021, it has been an exciting year on all
fronts.
Earlier in the year, the key focus was to integrate the business operations and team into SenSen. The other
major initiative was to bring SenSen IP into the Scancam product to make it more cost-effective for end users
to adopt and implement the technology into their stores. The key outcome of this objective was to
significantly reduce the upfront costs of the Scancam system, making the product inherently more scalable
and expanding the addressable market and accelerating growth.
Post-acquisition and successful integration, we have managed to deliver an incredible solution to our
customers:
• Over 40,000 fuel theft incidents detected
• 100% increase in the debt recovered to a staggering $2.14 million
• Detected over 200,000 known offenders in our locations
• Provided $12.1M in preventative alerts to customers on the network
With global fuel prices reaching record highs and soaring inflation, the economic landscape has fuelled an
increased need for loss prevention and instore optimisation technologies. SenSen is ideally positioned to
capitalise on this given the current and foreseeable macro-economic conditions.
The second half of this financial year was particularly strong with several ground-breaking wins, notably
signing of corporate fuel retailer Euro Garages, a UK company that purchased Woolworths Fuel in 2019 and
Vibe Petroleum in WA, and the addition of two new full-time sales business development managers covering
both the west and east coast of Australia.
H2 of this year saw the team double project revenue compared to the first half, indicative of the increased
adoption rate on the SenDISA platform model. In FY22,
• We increased our site location numbers by 31%
• Our SAS revenue run rate has increased by 45%
• Completed a successful POC with Northern Territory Police
• Agreed pilot of new technology with AMPOL Australia (existing customer)
All of this is a testament to the benefits delivered to the business through the strategic acquisition and
successful integration of IP, team and Scancam technologies.
A unique selling point of the Scancam anti fuel theft platform is the debt recovery solution: Fuel Recovery
Services Australia. Post-acquisition, we have added depth to our team and seen revenues from this operation
double during the past 12 months. With the number of sites increasing, the system is improving core
performance metrics for the benefit of customers.
With a rapidly filling pipeline, we expect good growth to continue and follow recent trends. Our team is
focused on execution and operational strategy for the coming year to deliver another period of strong sales
performance.
SenVAS
SenSen has been active in Singapore in the Smart Surveillance space for several years with Changi Airport as a
key client. Furthermore we have added PSA Singapore (formerly Port of Singapore Authority) and Singapore
Ministry of Home Affairs as clients via in-country partner PCS. In addition, we have been providing solutions to
Land Transport Authority (LTA) that is reported as part of our Smart City solutions.
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FINANCIAL SUMMARY
It is pleasing to note that our solutions are now used by key government organisations linked by Land, Air and
Sea. We have expanded our partnerships with integration companies STE and PCS, and we have been working
closely with distributor D-RON to extend our reach and scope of products.
Via D-RON we have initiated significant marketing initiatives in the region using Singapore as the base.
USA – SenTRACK
Many hospitals, schools, universities and airports are using the SenTRACK product line in the USA. The
trajectory of sales was negatively impacted due to COVID-19 related lockdowns between 2019-21 but
momentum has increased strongly since the beginning of 2022. We have delivered presentations at multiple
security conferences in the USA to re-introduce SenTRACK to key market segments and a strong pipeline of
opportunities has been created.
We have some iconic clients in the USA including Snap Chat Inc and Las Vegas Airport in addition to several
school districts and hospitals. A system for Las Vegas Airport, won in 2018 but progressively delayed by COVID-
19 lockdowns, is expected to be rolled out in FY 2023.
Riding on the success of satisfied customers in the USA, we have been working with distributors and key
system integrators in all our geographies to develop SenTRACK sales momentum globally. We expect to see
more revenue from SenTRACK in Singapore and Australia in FY23 and beyond.
Casino Gaming Solutions
COVID significantly hit the gaming business with shutdowns, mask mandates, reduced opening hours and
reduced number of visitors/players allowed in most venues. Impacts on equipment pricing (COGS) and
unavailability of equipment with shortages of key items such as computer chips slowed the business for all
players within the industry. Despite these headwinds impacting the global leisure and hospitality sector,
especially Casinos, we have been able to forge ahead with the following significant achievements within the
casino gaming business vertical:
• Acquired our first leading UK casino customer - Hippodrome
• Expanded the contract with Solaire Casino in the Philippines to grow the number of active tables from
30 to 200 tables
• Established a new contract with Crown Casino to roll out our latest innovations in their Melbourne
•
•
•
•
and Sydney Casinos focused on responsible gaming
Introduced a highly cost-effective distributed computing-based AI solution to help more casinos gain
access to our technology; a new patent application was submitted to protect the invention
Introduced new product enhancements like SenEYE-D to significantly increase the appeal of our
product line to a wider array of customers
Invested in developing data analytics products with customised dashboards and reports to value add
to SenGAME and provide real-time, novel insights from the data generated by SenGAME.
Further investments into product developments are under way to support roulette, card reading, cash
and chip exchanges, tips, alerts for payouts and cashless payments
As a part of a holistic approach to marketing and sales enablement, we attended the following Casino gaming
shows this year leading to many leads, ICE UK gaming show, Table games protection summit, Las Vegas, NIGA
Our sales pipeline is strong and multiple POCs have been completed with prospective clients and more are in
the pipeline.
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2022 FINANCIAL STATEMENTS
Financial Report for the year ended 30 June 2022
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss & Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
14
32
33
34
35
36
37
76
77
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DIRECTORS’ REPORT
The directors present their report with the consolidated financial report of SenSen Networks Limited (“the Company”)
and the entities it controlled (‘the Group”) at the end of, or during, the year ended 30 June 2022.
Directors and Company Secretary
The following persons were directors of SenSen Networks Limited during the whole financial year and up to the date of
this report:
Mr Subhash Challa, Executive Director
Mr Zenon Pasieczny, Non-Executive Director
Mr David Smith, Executive Director and Company Secretary
Ms Heather Scheibenstock, Executive Director
Mr Subhash Challa
Executive Chairman, CEO and Managing Director
Qualifications:
Experience:
Special
responsibilities:
Interest in shares and
options:
B. Tech (Electrical and Electronics Engineering), JNTU College of Engineering,
Hyderabad, India. PhD (Aerospace and Electronic Systems, Signal Processing),
Queensland University of Technology
Subhash founded SenSen Networks in 2007 as a spin-off from the University of
Technology Sydney where he was Professor of Computer Systems. Subhash is a world-
leading authority in data fusion specialising in the analysis and fusion of video and
sensor data and is a regular speaker at international industry and academic
conferences, and is a charter member of entrepreneurship organisation TIE.
Born and raised in Hyderabad, India, Subhash received his PhD from Queensland
University of Technology, Brisbane, Australia in 1999. Part of his PhD studies were
conducted at Harvard University (1997). He started his professional career as a
Research Fellow at the University of Melbourne in 1998 where he led a number of
defense industry projects. Subhash received the Tan- Chin Tau Fellowship in
Engineering from Nanyang Technological University in Singapore (2003) where he
worked with NTU researchers on traditional and underwater robotics. He holds a
Bachelor’s Degree in Electrical Engineering from JNTU, Kukatpally, India.
Subhash was the Professor of Computer Systems Engineering at the University of
Technology Sydney from 2004-2007 where he mentored several doctoral students to
completion in the areas of Bayesian Estimation Theory, Object Tracking, Sensor
Networks, Computer Vision, License Plate Recognition, Facial Recognition and Data
Fusion. He has co-authored more than 150 papers and is co-author of the reference
text, ‘Fundamentals of Object tracking’ Cambridge University Press, 2011) unifying
disparate advances in estimation theory and object tracking into a recursive Bayesian
framework.
Subhash left his successful career in academia to join SenSen full-time as CEO in January
2012. He has led the development of the company’s video-IoT platform SenDISA and
pioneered applications in diverse market segments. As the CEO and CTO of the
company, he led SenSen to win a number of innovation awards including iAwards
Victoria for SenFORCE and SenSIGN products in 2014 and 2017 respectively; Parking
Australia Innovation Award in 2015; and Security Industry Innovation Award in 2014.
Subhash is a member of the Australian Institute of Company Directors (MAICD).
Mr Challa has no other current or previous listed company directorships in the last three
years.
Member of the Audit and Risk Committee
86,148,062 Ordinary shares and nil options over ordinary shares
SenSen Annual Report FY2022
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14
DIRECTORS’ REPORT
Mr David Smith
Qualifications:
Experience:
Special
responsibilities:
Interest in shares
and options:
Executive Director, COO and Company Secretary
B Econ, The University of Sydney
Dip Mgmt – Exec MBA, Australian Graduate School of Management
David was previously an investment banker with more than 20 years experience,
working in both the capital markets and M & A globally. He was regularly ranked as one
of the Top 10 Australian Investment Bankers in annual surveys, and raised more than
$4 billion for corporate clients. With an extensive background in advising companies
across all sectors, including technology, industrials and resources, David has been
integrally involved in the evolution of numerous emerging companies into multi-billion
dollar enterprises.
David is also a Non-Executive Director of RAW Capital Partners Holdings Limited, a UK
based, international asset management business.
David completed his B Econ from the University of Sydney and a Dip Mgmt -
Exec MBA from Australian Graduate School of Management, Sydney.
David is a member of the Australian Institute of Company Directors (MAICD).
Mr Smith has no other current or previous listed company directorships in the last
three years.
Chief Operating Officer & Company Secretary, Member of the Audit & Risk Committee
13,852,894 Ordinary shares and nil options over ordinary shares
Mr Zenon Pasieczny
MBA, Maastricht School of Management, The Netherlands
Non-Executive Director
Qualifications:
Experience:
Zenon is an experienced venture capital investor screening 300+ deals annually and
investing in only a handful. He backed SenSen for its outstanding potential as an
Australian technology company with innovative and IP-driven solutions, helping it grow
from an R&D focused start-up to a globally respected industry leader.
Zenon is closely involved in SenSen’s strategic marketing and delivery of global
communication messages to clients, partners and the media.
Zenon is a member of the Australian Institute of Company Directors (MAICD).
He is Director of venture capital firm Saphet Capital Management and Managing
Director of The House Family Office providing strategic and commercial advice to a
select global client list.
Mr Pasieczny has no other current or previous listed company directorships in the last
three years.
Special responsibilities:
Member of the Audit and Risk Committee
Interest in shares and
options:
47,126,259 Ordinary shares and nil options over ordinary shares
SenSen Annual Report FY2022
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15
DIRECTORS’ REPORT
Ms Heather Scheibenstock GAICD, FGIA, FCG
Executive Director
Qualifications:
Grad Dip Applied Corporate Governance
Experience:
Heather has over 30 years’ experience within the gaming and hospitality industries
specialising in strategic planning, business development, stakeholder engagement and
offshore growth.
She has held senior executive roles at numerous gaming companies including Bloomberry
Resorts Corporation and Echo Entertainment Group (ASX: SGR).
Heather is a graduate of the Australian Institute of Company Directors (GAICD) and a Fellow
of the Governance Institute of Australia (FGIA), and a Fellow of the Chartered Governance
Institute (FCGI).
Ms Scheibenstock was previously a Non-Executive Director of ASX-listed global gaming
company, Ainsworth Game Technology (ASX:AGI). She resigned in November 2019.
Chair of the Audit and Risk Committee
1,188,485 Ordinary shares and nil options over ordinary shares.
Special
responsibilities:
Interest in share
SenSen Annual Report FY2022
sensen.ai
16
DIRECTORS’ REPORT
Following is a summary of the SenSen Directors’ Skill Matrix.
SenSen Annual Report FY2022
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17
DIRECTORS’ REPORT
Principal Activities
The principal activities of the group during the year were to develop and sell SenDISA platform-based
products and services into 2 major market segments:
• Smart Cities: civic compliance, traffic data and law enforcement solutions to city councils, national
parks, road authorities and transit agencies across the globe.
• Casinos: delivering accurate actionable insights about casino table game occupancy, hands per
hour, bet type and value for every bet placed on the gaming floor.
• Retail: Provide anti-theft and debt recovery services to fuel retailers.
Dividends – SenSen Networks Limited
No dividends have been declared in the 2022 financial year (2021: no dividend declared).
Review of Operations
Information on the operations of the Group, its business strategies and prospects is set out in the Chairman’s
Letter on page 3.
Operating Results
The Group’s net loss after tax was $12,075,161 (2021: Loss of $3,021,747). The loss for the year includes a
non-cash share-based payment expense of $3,173,353 (2021: $72,288).
Shares
The following shares were issued during the year:
No. of Shares
Balance as of 1 July 2021
- Shares issued on acquisition of Scancam
- Placement of shares on 9 Nov 2021
- Placement of 27,172,000 shares, 20 Dec 2021
- Placement (Directors) - 21 Dec 2021
- Placement of $3m - 23 Dec 2021
- ESOP - 24 Dec 2021
- SNS shares issued to external Advisor of Gaming business
Balance as of 30 June 2022
Shares under option
518,158,232
39,285,715
30,000,000
23,304,096
5,000,000
25,000,000
9,594,718
800,000
651,142,761
Unissued ordinary shares of SenSen Networks Limited under option at the date of this report are Nil.
Details of all options granted to key management personnel are disclosed in the Remuneration report.
No option holder has any right under the options to participate in any other share issue of the company or
any other entity.
15,854,256 options expired on 2 October 2021.
No shares were issued on exercise of options during the year and since the end of the financial year
Significant changes in the state of affairs
On the 20 July 2021 the Group announced a successful quotation of 39,285,715 shares in SenSen, utilised
as part of the acquisition agreement to the shareholders of Scancam Industries Pty Ltd. The acquisition
was successfully completed on 20 July 2021, and details of this business combination have been disclosed
in note 21 in the annual report
SenSen Annual Report FY2022
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18
DIRECTORS’ REPORT
Update and impacts of COVID-19
The impacts of COVID-19 the Group have been detailed in the Chairman’s Letter.
Events after the Reporting Period
There were no significant events subsequent to the reporting period.
Likely developments and review of operations
Comments on likely developments and review of operations of the Group are included in the Chairman’s
letter.
Further information on likely developments in the operations of the Group and the expected result of
operations have not been included in the annual financial report because the Directors believe it would be
likely to result in unreasonable prejudice to the Group.
Material Business Risks
SenSen Networks Limited is subject to risks, a number of which may have a material adverse effect on
operating and financial performance. SenSen’s Risk Management Policy can be found within the Audit and
Risk Committee Charter on its website. It is not possible to identify every risk that could affect the business
or shareholders and the actions taken to mitigate these risks cannot provide absolute assurance that a risk
will not materialise or have a material adverse effect on business strategies, assets or future performance of
SenSen. A non-exhaustive list (in no particular order) of material risks and relevant mitigation strategies
implemented by the Company are set out below.
Risk
Cost of materials
Description and potential impact
SenSen is not immune to rising cost of materials
and equipment, in particular semi-conductors and
computer chips which are important inputs into its
product offering.
Regulatory
Funding
People
Product innovation
and competitive
advantage
The Company operates within a constantly
changing regulatory environment and is required
to respond to any changes to privacy regulations
or regulations around the use of artificial
intelligence.
The Company is striving to become cash flow
positive in the near term, however the ability to
raise funds to continue operating on a going
concern basis remains a risk.
The Company may lose key executives.
The Company operates in a competitive
environment in relation to attracting software
development and technical personnel.
The loss of key staff or the inability to attract
personnel may adversely affect the Company’s
operations.
Competitors may bring comparable products or
technology to the market which may challenge
SenSen’s perceived advantage. Products and
technologies developed by competitors may
render the Company’s product and platform
obsolete or non-competitive.
Strategies used to mitigate the risk
The Company’s is managing this risk by
moving from a just-in-time delivery model to
holding some inventory at known prices.
Further the company is embedding clauses
in sales contracts that allow any significant
change in the cost of equipment to be
passed on to the customer.
The company monitors changes in the
regulatory environment and has the ability to
make changes to its software as is necessary
to remain compliant.
The Company actively manages its capital
requirements and maintains close
relationships with its existing investor base.
The company maintains adequate cash and
debt facilities to ensure it is able to pay its
debts as they fall due.
Identification of key people and the
implementation of appropriate staff training
as well as succession plans.
The Company offers incentives and career
development opportunities for key executives
and senior management.
The Company continuously monitors market
developments and new products.
SenSen continues to invest in its platform
development to improve its intellectual
property and services and regularly registers
new patents for developments it makes in its
software.
Environmental regulations
The Group is subject to environmental regulations in Australia and in foreign countries where it operates. To
the best of the Directors’ knowledge, all activities have been undertaken in compliance with these
environmental regulations.
SenSen Annual Report FY2022
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19
DIRECTORS’ REPORT
Directors’ Meetings
The Company held five Directors’ meetings during the year and two Audit and Risk Committee meetings.
The attendances of the directors in office during the year at meetings of the Board and Committees were:
Director
Board of Directors
Audit and Risk Committee
Subhash Challa
David Smith
Zenon Pasieczny
Heather Scheibenstock
Number
Eligible to
attend
4
4
4
4
Number Attended
Number Eligible to
attend
Number Attended
4
4
3
4
3
3
3
3
3
3
3
3
SenSen Annual Report FY2022
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20
DIRECTORS’ REPORT
Remuneration Report (Audited)
The Directors are pleased to present the Company’s 2022 remuneration report which sets out remuneration
information for the Company’s executive directors, non-executive directors and other key management
personnel.
(a) Details of Directors and Key Management Personnel during the year ended 30 June 2022
Mr Subhash Challa, Executive Chairman
Mr Zenon Pasieczny, Non-Executive Director
Mr David Smith, Executive Director
Mrs Heather Scheibenstock, Executive Director
Mr Jonathan Cook, Chief Financial Officer
The above Key Management Personnel (KMP) are the KMP of the Company, there are no other KMP in the
Group.
(b) Remuneration governance
The Company does not have a remuneration committee, with remuneration decisions made by the Board
on:
• The over-arching executive remuneration framework
• Operation of the incentive plans which apply to the executive team including key performance
indicators and performance hurdles
• Remuneration levels of executive directors and the key management personnel, and
• Non-executive director fees
The objective is to ensure that remuneration policies and structures are fair and competitive and aligned
with the long-term interests of the Company.
(c) Executive remuneration policy and framework
Remuneration levels are competitively set to attract the most qualified and experienced directors and
executives.
The remuneration structures outlined below are designed to attract suitably qualified candidates, reward
the achievement of strategic objectives, and achieve the broader outcome of creating shareholder value.
The Board ensures that executive reward satisfies the following criteria for good reward corporate
governance practices:
competitiveness and reasonableness;
•
• acceptability to shareholders;
• performance linkage/alignment of executive compensation;
•
•
transparency; and
capital management.
The executive remuneration framework has two components
• base pay and benefits, including superannuation; and
•
long-term incentives (LTIs) through participation in the SenSen Long Term Incentive Plan (“the
Plan”).
The payment of LTIs is conditional on the achievement of set performance criteria as outlined in detail
later in the Remuneration Report.
SenSen Annual Report FY2022
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21
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(d) Long-term incentives (LTIs)
SenSen’s Long-Term Incentive Plan (“The Plan”) was approved by shareholders at the 2021 General
Meeting (GM) on 15 July 2021. The Plan is designed to provide long-term incentives for employees
including directors, to deliver long-term shareholder returns. Under the Plan, participants are granted LTI
shares and options which only vest if certain performance standards are met. Participation in the Plan is
at the Board’s discretion and no individual has a contractual right to participate in the Plan or to receive
any guaranteed benefits.
(e) Non-executive Director remuneration
Non-executive Directors receive director’s fees plus superannuation contributions to a complying fund.
Fees are reviewed annually by the Board taking into account comparable roles and market data. These
fees are subject to the annual limit outlined below.
(f) Shareholder approved Non-executive Directors’ fees pool
The maximum annual aggregate non-executive directors’ fee pool limit is $400,000 and was approved
by shareholders at the 2017 annual general meeting held on 30 November 2017.
(g) Voting and comments made at the company’s 2021 Annual General Meeting
SenSen Networks Limited received more than 99.53% of ‘yes’ votes on its remuneration report for the
2021 financial year. The company did not receive any specific feedback at the AGM or throughout the
year on its remuneration policies.
(h) Group’s performance and link to remuneration
In considering the consequences of the Company’s performance on shareholder wealth the Board is
focused on total shareholder returns. The Company’s Long-Term Incentive Plan is heavily performance
based and the vesting of Key Management Personnel and staff options is dependent on the company
meeting specific revenue targets.
The factors that are considered to affect shareholder return in the past 5 years are summarised below:
Measures
Share price at end of financial year
Market capitalisation at end of financial year ($M)
2022
$
2021
$
2020
$
2019
$
0.073
$47.5
0.150
$74.5
0.070
$31.3
0.087
$36.4
2018
$
0.160
$65.8
Net Profit/(loss) for the financial year
(12,075,161)
(3,021,747)
(3,705,235)
(5,277,798)
(9,220,416)
Director and Key Management Personnel
remuneration
2,562,297
1,167,619
1,182,298
1,544,576
2,048,914
SenSen Annual Report FY2022
sensen.ai
22
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(i) Details of Remuneration
2022
Short-term Employee
Benefits
Post-
Employment
Benefit
Long-
term
Share-based
payments
Total
Performanc
e related %
Name
Salary
and Fees
Bonus
Super
Long
Service
Leave
Share
Rights
Optio
ns
$
$
$
$
$
$
$
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock
Other key
management
personnel
J Cook (CFO)
353,030
293,750
56,000
218,333
220,000
1,141,113
-
-
-
-
-
-
35,303
27,083
5,560
21,833
29,137
-
-
-
485,111
394,785
-
238,727
22,000
-
161,645
111,779
29,137
1,280,268
-
-
-
-
-
-
902,581
715,618
61,560
478,893
53.7%
55.2%
-
49.8%
403,645
2,562,297
40.05%
50.0%
2021
Short-term Employee
Benefits
Post-
Employment
Benefit
Long-
term
Share-based
payments
Total
Performanc
e related %
Name
Salary and
Fees
Bonus
Super
Long
Service
Leave
Share
Rights
Options
$
$
$
$
$
$
$
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock
Other key
management
personnel
J Cook (CFO)
315,000
262,500
50,400
173,973
219,333
1,021,206
-
-
-
-
-
-
29,925
24,937
4,788
16,527
6,967
83,144
13,269
-
-
-
-
13,269
-
-
-
-
-
-
-
-
358,194
287,437
55,188
190,500
-
-
-
-
50,000
50,000
-
276,300
- 1,167,619
18.1%
4.3%
SenSen Annual Report FY2022
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23
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(j) Details of share-based payments
The share rights in the above table were issued as part of compensation to key management personnel during the
year ended 30 June 2022 and 30 June 2021. No options over ordinary shares were issued as part of compensation
to key management personnel during the years ended 30 June 2021 or 30 June 2022.
Share Rights
A new LTI scheme was approved by the Board of SenSen on 10 May 2021 and grants rights to shares to key
employees of the Company over a three-year period, if certain targets are achieved. Shareholders voted at a
general meeting of the Company on 15 July 2021 to approve 25,000,000 shares to be issued over three years for
this scheme.
The number of shares to be issued will be calculated as follows:
• An agreed percentage of eligible employee’s annual salary;
• Number of shares to be issued based on the 5 day Volume Weighted Average Price (VWAP) prior to the
Company’s Financial Year results announcement.
• A combination of an eligible employee’s length of service and the Company meeting internal measure
targets in the most recent Financial Year. Internal measure targets include:
o Continual service period;
o Revenue hurdles; and
o EBITDA hurdles.
These hurdles are considered non-market vesting conditions and the probability of being met is taken into account
when determining the expense to be recognised in each period.
The rights to shares were granted after 15 July 2021 (therefore with no impact in the 30 June 2021 financial year),
and vest annually if the following three targets are achieved by SenSen executives:
Grants
Financial Year
2020/2021
2021/2022
2022/2023
Grant dates 1
29/07/21 – 25/08/21
29/07/21 – 25/08/21
29/07/21 – 25/08/21
Target measures
Service Revenue Target
50%
50%
50%
40%
40%
40%
EBITDA
10%
10%
10%
1 For the different relative executives
The actual number of shares to be issued to each employee is based on the above fixed percentages of their salary
at grant date. A summary of the value expensed, and the number of shares issued is detailed below.
Share rights to these three grants vest annually once the Company issues its Annual Report on or around 30
September. This report will provide revenue and EBITDA results that will be used to determine whether individual
tranches vest. The following tables outline the individual annual hurdles/targets required in order for annual share
rights to be awarded and vest:
Annual Hurdles/Targets
Service Target
Service
Percentage of Rights
Vesting
Less than 12 months
Threshold: 1 year – 3 years
Target: 3 years +
Nil
75%
100%
The service target is assessed each year at 30 June.
SenSen Annual Report FY2022
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24
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
Revenue Target
•
First vesting date Revenue 40% greater than FY2020 Revenue recorded in the 30 June 2021 Annual Report
• Second vesting date Revenue 25% greater than hurdle - revenue established at first vesting date (i.e. audited
•
full year revenue for FY2022)
Third vesting date Revenue 25% greater than hurdle Revenue established at second vesting date (i.e. audited
full year revenue for FY2023)
• Continued service to vesting date
EBITDA Target
•
First vesting date EBITDA 25% greater than FY2020 EBITDA recorded in the 30 June 2021 Annual Report
• Second vesting date EBITDA 25% greater than hurdle EBITDA established at first vesting date (i.e. audited full
•
year EBITDA for FY2022)
Third vesting date EBITDA 25% greater than hurdle EBITDA established at second vesting date (i.e. audited
full year EBITDA for FY2023)
• Continued service to vesting date
These share rights are issued for nil consideration based on a five-day VWAP of the Company’s share price prior to the
lodgment of the Annual Report based on the relevant percentage of the executive’s salary.
based compensation
Share
The terms and conditions of each grant of share rights affecting remuneration in the current or a future reporting period
are as follows:
‑
Name
Grant
Date
Percentage
eligible to
be earnt
each year
Potential
value of LTI
Shares each
year 1
Salary
(as at 1
August
2021
exc
Super)
S Challa
D Smith
H
Scheibenstock
J Cook (CFO)
25/08/2021 $363,636 50%
25/08/2021 $302,500 50%
29/07/2021 $220,000 45%
$181,818
$151,250
$99,000
30/07/2021 $220,000 40%
$88,000
1 Excludes any further discretionary grants that may be awarded each year.
2021 Tranche Summary
Name
Potential
value of LTI
Shares each
year
S Challa
D Smith
H
Scheibenstock
J Cook (CFO)
$181,818
$151,250
$99,000
$88,000
Service Revenue EBITDA EBITDA
–
Stretch
Discretionary
Grant 2
Total
Number of
Shares
issued 1
Tranche 1 - 2021
40%
10%
20%
N/A
50%
$90,909
$75,000
$72,727
$60,000
$18,182
$15,000
$49,500
$33,000
$39,600
$35,200
$9,900
$8,800
-
-
-
-
$50,091 $231,909
$34,153 $184,153
-
-
$99,000
$77,000
1,763,568
1,400,403
752,852
585,551
1 Share issued based on the 5 day VWAP of the Company’s share price prior to the lodgment of the 2021 Annual Report of $0.132
(rounded)
2 Discretionary grant related to an additional grant of equity instruments as decided by the board. The board provided this discretionary
grant to cover additional costs incurred by individuals associated with the company’s previous option plan.
In respect of the service element above for 2021 S Challa, D Smith and H Scheibenstock have served greater than 3
years and were entitled to the full ‘Service Target’ grant. J Cook had served between 1 – 3 years and was entitled to
75% of the ‘Service Target’.
For 2021 the Revenue and EBITDA targets were met and the EBITDA - Stretch target was not met as shown below:
Target Measure
Revenue
EBITDA
EBITDA Stretch
$5,268,936
($2,322,738)
($2,013,040)
SenSen Annual Report FY2022
Target $
Actual Result
Target met?
$5,532,537
($2,280,897)
($2,280,897)
sensen.ai
Yes
Yes
No
25
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
2022 Tranche Summary
Name
Potential
value of
LTI
Shares
each
year
S Challa
D Smith
H
Scheibenstock
J Cook (CFO)
$181,818
$151,250
$99,000
$88,000
Service Revenue EBITDA Revenue
–
Stretch
Discretionary
Grant
Total
Shares
issued 1
Tranche 2 - 2022
40%
10%
20%
N/A
50%
$90,909
$75,625
$72,727
$60,500
$49,500
$33,000
$39,600
$35,200
-
-
-
-
$14,545
$12,100
$7,920
$7,040
- $178,181
- $148,225
$97,020
-
$9,405
$84,645
-
-
-
-
1 Final number of shares to be issued will be determined based on a five-day VWAP of the Company’s share price prior to the
lodgment of the 30 June 2022 Annual Report.
In respect of the service element above for 2022 S Challa, D Smith and H Scheibenstock have served greater than 3
years and were entitled to the full ‘Service Target’ grant. J Cook had served between 1 – 3 years and was entitled to
75% of the ‘Service Target’.
For 2022 the Revenue and Revenue Stretch targets are expected to be met and the EBITDA target is not expected to
be met as shown below:
Target Measure
Revenue
EBITDA
Revenue Stretch
$6,915,671
($1,710,673)
$7,468,925
Target $
Actual Result
Target met?
$9,145,423
($10,500,744)
$9,145,423
Yes
No
Yes
SenSen Annual Report FY2022
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26
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
2023 Tranche Summary
Name
S Challa
D Smith
H
Scheibenstoc
k
J Cook
(CFO)
Potentia
l value
of LTI
Shares
each
year
$181,818
$151,250
$99,000
$88,000
Service 3
Revenue
EBITDA
Tranche 3 - 2023
Revenue
– Stretch
Discretionar
y Grant
Total 2
Share
s
issue
d 1
50%
40%
10%
20%
N/A
$33,342
$27,737
$33,342
$27,737
$8,336
$6,933
$18,981
$18,981
$4,745
-
-
-
-
-
-
-
-
-
-
$75,020
$62,407
$42,707
-
-
-
-
-
1 Final number of shares to be issued will be determined based on a five-day VWAP of the Company’s share price prior to the
lodgment of the 30 June 2023 Annual Report.
2 This amount represents the proportionate expense related to the 2022 year. The remaining amounts will be expensed in 2023
dependent on the targets being met.
3 Represents an 80% probability of the relevant executive meeting the service requirement.
In respect of the service element above for 2023 S Challa, D Smith and H Scheibenstock will have served greater than
3 years and were entitled to the full ‘Service Target’ grant. J Cook’s notification of resignation resulted in no charge
being incurred for the third year as the service condition will not be met.
For 2023 the Revenue and EBITDA targets are expected to be met and the Revenue Stretch target is not expected to
be met as shown below:
Target Measure
Revenue
EBITDA
Revenue Stretch
$11,431,779
($7,875,558)
$12,346,321
Target $
Actual Result
Target met? 4
N/A
N/A
N/A
Yes
Yes
No
4 Represents current expectations for each target. These will be trued up to reflect the actual results when known.
Summary of Total LTI Remuneration
Name
Grant
Date
Total 30 June
2022 LTI
Remuneration
S Challa
D Smith
H
Scheibenstock
J Cook (CFO)
25/08/2021
25/08/2021
29/07/2021
30/07/2021
$485,111
$394,785
$238,727
$161,645
SenSen Annual Report FY2022
sensen.ai
27
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(k) Key Management Personnel Shareholdings
(i) Option holdings of key management personnel in SenSen Networks Limited
2022
Balance at 1
July 2021
Granted as
remuneration
S Challa
D Smith
6,340,620
4,323,150
-
-
Options
forfeited
or lapsed
6,340,620
4,323,150
Balance
as at 30
June 2022
-
-
Total
Vested
-
-
Total
Non-
vested
-
-
2021
Balance at 1
July 2020
Granted as
remuneration
S Challa
D Smith
12,940,620
8,823,150
-
-
Options
forfeited
or lapsed
6,600,000
4,500,000
Balance
as at 30
June 2021
6,340,620
4,323,150
Total
Vested
-
-
Total
Non-
vested
6,340,620
4,323,150
During the year, no options were exercised by directors or other key management personnel.
LTI Incentive Options fully expired during the year ended 30 June 2022.
(ii) Shareholdings of key management personnel in SenSen Networks Limited
2022
Balance at 1
July 2021
LTI Shares
issued as
remuneration
Shares issued
on exercise of
options
Other changes
during
the year 2
Balance held at
30 June 2022
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock
Other KMP
J Cook (CFO)
Total
80,217,828
11,619,157
46,876,259
227,300
205,714
139,146,258
1,763,568
1,400,403
-
752,852
930,379 1
4,847,202
-
-
-
-
-
-
4,166,666
833,334
250,000
208,333
86,148,062
13,852,894
47,126,259
1,188,485
1,205,574
6,663,907
2,341,667
150,657,367
1 Includes 344,828 shares issued in the 2022 financial year related to a grant that was expensed in 2021.
2 Other changes in management shareholdings of 6,663,907 shares during the year relate to shares acquired under the Company’s
share purchase plan, or via on market purchases in the period.
2021
Balance at 1
July 2020
LTI Shares
issued as
remuneration
Shares issued
on exercise of
options
Other changes
during
the year
Balance held at
30 June 2021
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock
Other KMP
J Cook (CFO)
Total
80,217,828
11,619,157
46,876,259
227,300
205,714
139,146,258
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
80,217,828
11,619,157
46,876,259
227,300
205,714
139,146,258
None of the shares above are held nominally by the directors or any of the other key management
personnel.
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28
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(l) Loans from key management personnel
There were no loans made with key management personnel during 30 June 2022 (2021: nil).
The company has an undrawn loan facility of $500,000 with Subhash Challa. The loan incurs an interest
rate of 4.95% per annum. The loan has no fixed maturity date.
(m) Other transactions with key management personnel
There were no other transactions with key management personnel of the group, including their close family
members and entities related to them, during the financial year ended 30 June 2022 or 30 June 2021.
(n) Service Agreements with key management personnel
The Company’s policy is to enter into service contracts with executive directors and senior executives on
appointment that are unlimited in term but capable of termination on specified notice periods; and that the
Company has the right to terminate the contract immediately by making payment equal to the specified
notice period as pay in lieu of notice other than for misconduct when termination is immediate. The
executive directors and senior executives are also entitled to receive on termination of employment their
statutory entitlements of accrued annual leave and long service leave.
The service contract outlines the components of remuneration paid to the executive directors and key
management personnel but does not prescribe how remuneration levels are modified year to year.
Details of contracts with the current Directors and KMP of the Group that received remuneration during the
2022 financial year are set out below:
Director / KMP
Terms of
Agreement
S Challa
D Smith
Z Pasieczny
H Scheibenstock
J Cook
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Base salary
including
superannuation
$388,333
$320,833
$61,560
$240,167
$242,000
Termination
benefit
6 Months
6 Months
Not Applicable
1 Month
1 Month
Notice period
6 Months
6 Months
Not Applicable
1 Month
1 Month
End of Remuneration Report (Audited)
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29
DIRECTORS’ REPORT
SenSen Corporate Governance Summary
SenSen is committed to ensuring that its corporate governance framework, policies and practices are of a
high standard. Delivering on this commitment involves SenSen having a solid understanding of current
governance requirements and practices, as well as being familiar with emerging governance trends and
ever-changing stakeholder expectations.
Throughout FY22, SenSen Network’s corporate governance procedures were consistent with the Corporate
Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance
Council (ASX Principles), and detailed explanations where it didn’t meet the recommendations.
SenSen’s 2022 Corporate Governance Statement is available at sensen.ai/CorporateGovernance.
SenSen’s 2022 Corporate Governance Statement outlines SenSen’s arrangements in relation to its Board,
Board Committees, Executive Team, risk management framework and financial reporting, diversity, corporate
governance policies and shareholder engagement.
Auditor’s Independence Declaration
The directors received the Independence Declaration from the lead auditor of SenSen Networks Limited
which is appended to this report on page 33.
Non-Audit Services
During the year the following fees were paid or payable for non-audit services provided by the auditor of the
parent entity, BDO Audit Pty Ltd, and its related practices:
Other non-assurance services
Tax compliance services
$
187,213
187,213
Details of the amounts paid or payable to the Company’s auditor and related practices of the auditor for
non-audit services provided during the year are set out above. The Board has considered the position and
in accordance with advice received from the Audit & Risk Committee, is satisfied that the provision of the
non-audit services is compatible with the general standard of independence of auditors imposed by the
Corporations Act.
Indemnifying and Insurance of Directors and Officers
During or since the end of the previous financial year, the Company has given an indemnity or entered into
an agreement to indemnity, or paid or agreed to pay insurance premiums as follows:
The Company has paid premiums to insure all of the Directors and key management personnel of the
Company as named above, the Company Secretary, and all executive officers of the Company against any
liability incurred as such by Directors, the Secretary or Executive Officers to the extent permitted by the
Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
No indemnification has been obtained for the auditors of the Company or the Group.
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DIRECTORS’ REPORT
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
This report has been signed in accordance with a resolution of the directors.
Subhash Challa, Chairman
Date: 30 Sep 2022
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AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF SENSEN NETWORKS LIMITED
As lead auditor of SenSen Networks Limited for the year ended 30 June 2022, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of SenSen Networks Limited and the entities it controlled during the
period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 30 September 2022
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
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CONSOLIDATED STATEMENT OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE
INCOME
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2022
Revenue from contracts from customers
Revenue from contracts with customers
Cost of sales and providing services
Gross Profit
Other income
Interest income
Expenses
Administration expense
Advertising & marketing
Consulting expense
Finance cost
Occupancy cost
Staff costs
Technology costs
Share based payments
Fair value gain or loss
Loss before income tax
Income tax (expense)/benefit
Loss for the period
Note
3
3
3
4
4
4
30
5
Consolidated
2022
$
2021
$
9,145,423
(3,512,830)
5,632,593
2,977,606
8,632
(2,083,319)
(816,010)
(3,639,972)
(262,408)
(410,221)
(8,868,494)
(1,511,697)
(3,173,353)
(153,565)
(12,300,208)
225,047
(12,075,161)
5,532,537
(2,029,646)
3,502,891
2,806,681
5,698
(884,455)
(212,905)
(3,049,132)
(181,484)
(179,793)
(4,031,940)
(719,478)
(72,288)
-
(3,016,205)
(5,542)
(3,021,747)
Loss attributable to members of the parent entit
(12,075,161)
(3,021,747)
Other comprehensive income
Items that may be reclassified to profit or los
Exchange differences on translation of foreign
operations
Other comprehensive income
(12,075,161)
(3,021,747)
(26,101)
(26,101)
43,327
43,327
Total comprehensive income for the year
(12,101,262)
(2,978,420)
Loss per share:
Basic and diluted loss per share (cents)
6
(1.99)
(0.62)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
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33
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Consolidated Statement of Financial Position As at 30 June 2022
Note
Consolidated
2022
$
2021
$
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventory
Other assets
Total Current Assets
Non-Current Assets
Intangibles
Goodwill
Right of use asset
Other assets
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Contract liabilities
Contingent consideration liability
Other liabilities
Employee benefits
Lease liabilities
Borrowings
Total Current Liabilities
Non-Current Liabilities
Employee benefits
Lease liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
8
10
11
13
12
15
15
16
14
17
18
19
17
20
16
21
17
16
22
23
6,213,860
1,943,338
561,671
231,790
2,440,441
11,391,100
2,649,352
5,632,016
335,780
74,691
434,666
9,126,505
5,176,464
978,742
348,170
241,394
1,277,078
8,021,848
916,667
383,399
409,102
67,642
390,820
2,167,630
20,517,605
10,189,478
1,238,557
1,156,667
1,362,565
1,449,175
652,314
185,428
1,954,375
7,999,081
18,577
182,826
201,403
750,357
521,874
-
937,057
263,687
305,659
861,280
3,639,914
105,983
138,129
244,112
8,200,484
3,884,026
12,317,121
6,305,452
57,856,852
5,477,140
(51,016,871)
12,317,121
41,649,827
3,597,335
(38,941,710)
6,305,452
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
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34
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Consolidated
Balance at 1 July 2020
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the
period
Transactions with owners in their
capacity as owners
Shares issued during the year (see note 22)
Capital raising costs (see note 22)
Share Based Payments
Total transactions with owners for the
period
Balance at 30 June 2021
Balance at 1 July 2021
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the
period
Transactions with owners in their
capacity as owners
Shares issued during the year (see note 22)
Share Based Payments (note 30)
Transfer from reserves (note 22)
Total transactions with owners for the
period
Balance at 30 June 2022
Issued
Capital
$
Accumulated
Losses
Reserves
$
$
Total
Equity
$
33,159,693
(35,919,963)
3,481,720
721,450
-
-
-
(3,021,747)
-
(3,021,747)
-
43,327
43,327
(3,021,747)
43,327
(2,978,420)
8,597,634
(107,500)
-
8,490,134
-
-
-
-
-
-
72,288
72,288
8,597,634
(107,500)
72,288
8,562,422
41,649,827
(38,941,710)
3,597,335
6,305,452
41,649,827
(38,941,710)
3,597,335
6,305,452
-
-
-
(12,075,161)
-
(12,075,161)
-
(26,101)
(26,101)
(12,075,161)
(26,101)
(12,101,262)
14,939,578
-
1,267,447
16,207,025
-
-
-
-
-
14,939,578
3,173,353
3,173,353
(1,267,447)
-
1,905,906
18,112,931
57,856,852
(51,016871)
5,477,140
12,317,121
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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35
CONSOLIDATED STATEMENT OF CASH
FLOWS
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Government grants received
Income tax paid
Note
Consolidated
2022
$
2021
$
8,923,889
4,676,093
(18,644,466)
(9,545,506)
8,632
(125,957)
1,950,640
-
3,683
(131,037)
1,618,995
(31,204)
Net cash used in operating activities
9(a)
(7,887,262)
(3,408,976)
Cash flows from investing activities
Payment for acquisition of subsidiary, net of cash acquired
Purchase of plant and equipment
Deposits
25
14
(1,080,000)
(253,996)
(107,219)
-
(252,554)
Net cash used in investing activities
(1,441,215)
(252,554)
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs related to issue of shares
Repayment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
22
22
9(b)
9(b)
9(b)
9,996,492
(352,076)
(398,542)
2,300,000
7,150,000
(107,500)
(252,848)
880,000
(1,180,000)
(1,294,301)
Net cash provided by financing activities
10,365,874
6,375,351
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
1,037,397
5,176,463
2,713,821
2,462,642
Cash and cash equivalents at end of financial year
8
6,213,860
5,176,463
The above Consolidated Statement of Cashflows should be read in conjunction with the accompanying notes.
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NOTES TO THE FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report includes the financial statements and notes of SenSen Networks Limited, a listed public company
incorporated and domiciled in Australia.
The separate financial statements of the parent entity, SenSen Networks Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 30 September 2022 by the directors of the company.
(a) Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. The
consolidated entity is a for-profit entity for the purpose of preparing the financial statements. For the year ended 30 June
2022 amounts contained in this report and in the financial report have been rounded to the nearest dollar.
The consolidated financial statements of the Group also comply with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB).
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in note 31.
The financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
Changes to presentation – classification of expenses
SenSen Networks Limited decided in the current financial period to change the classification of its expenses in the
consolidated statement of profit or loss and other comprehensive income, as it is believed this will provide more relevant
information to our stakeholders, and is more in line with common practice in the industry SenSen Networks Limited is
operating in. The comparative information has been reclassified accordingly.
Significant Accounting Policies
(b) Going concern basis
The consolidated financial statements have been prepared on the going concern basis of accounting, which assumes the
continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of
business. As disclosed in the consolidated financial statements, the group has net operating cash outflows during the
year ended 30 June 2022 of $7,887,262 (30 June 2021: $3,408,976) and as at 30 June 2022 has a net asset position of
$12,317,121 (30 June 2021: $6,305,452 ). The Group also generated a loss after tax for the year ended 30 June 2022 of
$12,075,161 (30 June 2021: $3,021,747 ).
The ability of the Group to continue as a going concern is principally dependent upon the following conditions:
•
•
•
The ability to meet its internal cash flow forecasts, in particular the Group’s revenue growth targets and
reductions in operating cost expectations;
The ability of the Group to draw down on its unused loan facilities; and
The ability of the Group to raise sufficient capital as and when necessary.
These conditions give rise to material uncertainty, which may cast significant doubt over the Groups ability to continue as
a going concern.
The directors believe that the going concern basis of preparation is appropriate due to the following reasons:
•
•
•
•
the Group has prepared a cash flow forecast based on reasonable assumptions that the directors believe are
achievable;
The directors believe that the Group has the ability to scale back expenditure as and when required to preserve
cash if needed;
The directors do not expect any further significant impact on the Group from COVID-19; and
The Group has demonstrated the ability to raise capital when required.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its
liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial report.
This financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the
Group be unable to continue as a going concern.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Revenue Recognition
AASB 15 applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other
standards. The standard establishes a five-step model to account for revenue arising from contracts with customers. Under
AASB 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 of the relevant facts and circumstances when applying each step of the model to contracts with their
customers.
The Group is in business of developing and selling SenDISA platform-based products and services into three major
customer markets:
• Smart Cities: civic compliance, traffic data and law enforcement solutions to city councils, national parks, road
authorities and transit agencies across the globe.
• Gaming: delivering accurate actionable insights to casinos about table occupancy, hands per hour, bet type and
value for every bet placed on the gaming floor.
• Retail: Provide anti-theft and debt recovery services to fuel retailers.
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by
transferring the promised goods or services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and
reports these amounts in the statement of financial position. Similarly, if the Group satisfies a performance obligation before
it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial
position, depending on whether something other than the passage of time is required before the consideration is due.
AASB 15 Revenue from Contracts with Customers
Sale of Hardware, Software Licence and Customised Installation
In relation to the sale of Hardware and Software Licences, the Group concludes that these sales are highly interrelated and
interdependent with the installation therefore not capable of being distinct. The performance obligation in relation to sales is
satisfied when the installation is complete. The licences granted to customers provide a right for them to access the
software.
Further, the Group sells the software licences in some cases bundled with a maintenance period. After the initial period of
maintenance, the customer has the option to sign-up for additional periods of maintenance.
The maintenance is distinct on its own. The software remains functional after installation without updates, support and
software maintenance and therefore is not integrated with the other goods or services. Further, the customer can continue to
utilise the software without the maintenance (the customer can still retain continued functionality of the software for a
reasonable period of time after instillation). Thus, the Group concludes that the customer can benefit from the maintenance
on its own and the criterion in paragraph 27(a) of AASB 15 is met. In addition, the maintenance is distinct within the context
of the contract and the criterion in paragraph 27(b) of AASB 15 is met. Maintenance is recognised over the period the
services are provided. Revenue is measured on a straight-line basis, which best depicts the Group’s performance.
Service contracts
Identifying performance obligations
Service contracts generally include a number of key deliverables. The Group observed that these key deliverables are
considered tasks and not distinct on their own. That is, the customer cannot benefit from the good or service either on its
own or together with other resources that are readily available to the customer. Therefore, the criterion in paragraph 27(a) of
AASB 15 is not met. Further, the tasks are considered inputs to produce the combined output (i.e. software development of
customer’s new/existing software) specified in the contract (paragraph 29(a) of AASB 15). Therefore, the criterion in
paragraph 27(b) of AASB 15 (on the basis of the factors in paragraph 29 of AASB 15) is not met.
The Group concludes that there is one performance obligation which is the service contracts. Revenue on service contracts
is measured on a straight-line basis, which best depicts the Group’s performance.
Customer contracts with multiple performance obligations
Where a customer enters into a contract for multiple performance obligations, these are accounted for based on the relative
stand-alone selling price for the individual obligation. Contracts for software licences that feature integrated business
solution applications, may include additional charges for professional services. Revenues of this nature are considered
distinct and are individually accounted for as separate performance obligation. Fees are based on standard hourly rates and
have been allocated according to their respective stand-alone selling price.
Customer contracts for transaction services are also treated as a separate performance obligation as business transactions
are processed on behalf of the customer for a determined fee.
In all cases, the total transaction price for a customer contract is allocated amongst the various performance obligations
based on their relative stand-alone selling prices.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cost of obtaining a customer contract
AASB 15 requires that incremental costs associated with acquiring a customer contract, such as sales commissions, are
recognised as an asset and amortised over a period that corresponds with the period of benefit.
Unsatisfied performance obligations
The Group continues to recognise its ‘contract liabilities’ under AASB 15 in respect of any unsatisfied performance
obligations. These liabilities are disclosed as in the consolidated statement of financial position.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust
any of the transaction prices for the time value of money.
Standard payment terms
Standard payment terms on customer invoices is disclosed in note 1 (i) below.
(d) Changes in Accounting Policies
New accounting standards
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2022.
The Consolidated Entity's assessment of the impact of these new or amended Accounting Standards and Interpretations,
being the most relevant to the Consolidated Entity, are set out below.
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current
These changes are applicable from annual periods beginning on or after 1 January 2023. There are four main changes
to classification requirements.
(1) The requirement for an unconditional right has been deleted because covenants in banking agreements would rarely
result in unconditional rights.
(2) The right to defer settlement must exist at the end of the reporting period. If the right to defer settlement is dependent
upon the entity complying with specified conditions (covenants), the right to defer only exists at reporting date if the entity
complies with those conditions at reporting date.
(3) Classification is based on the right to defer settlement, and not the intention.
(4) If a liability could be settled by an entity transferring its own equity instruments prior to maturity (e.g. a convertible
bond), classification is determined without considering the possibility of earlier settlement by conversion to equity, but
only if the conversion feature is classified as equity.
As these amendments only apply for the first time to the 30 June 2024 balances (and 30 June 2023 comparative
balances), the Consolidated Entity is not yet able to make an assessment of the impacts regarding the right to defer
settlement, compliance with bank covenants, and intention to settle.
AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of Accounting Policies and Definition of
Accounting Estimates
These amendments introduce a definition of ‘accounting estimate’, i.e. monetary amounts in financial statements that are
subject to estimation uncertainty, such as estimating expected credit losses for receivables. Accounting estimates are
developed using measurement techniques and inputs. The amendments clarify that a change in an estimate occurs
when there is either a change in a measurement technique or a change in an input. The amendments also indicate that
only material accounting policy information must be disclosed in the financial statements.
There will be no impact on the financial statements when these amendments are first adopted because they apply
prospectively to changes in accounting estimates that occur on or after the beginning of the first annual reporting period
to which these amendments apply, which is annual periods beginning on or after 1 July 2023.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022
reporting periods. The Consolidated Group has decided against early adoption of these standards. The Consolidated
Group has assessed the impact of these new standards and interpretations and does not expect that there would be a
material impact on the Consolidated Group in the current or future reporting periods and on foreseeable future
transactions.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Business combinations and asset acquisitions
The acquisition method of accounting is used to account for all business combinations regardless of whether equity
instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued, or liabilities
incurred or assumed at the date of exchange. Where equity instruments are issued in a business combination, the fair value
of the instruments is their published market price as at the date of exchange. Transaction costs arising on the issue of equity
instruments are recognised directly in equity.
All identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The excess of the cost of the business combination over the net fair value
of the Group’s share of the identifiable net assets acquired is recognised as goodwill. If the cost of acquisition is less than
the Group’s share of the net fair value of the identifiable net assets of the subsidiary, the difference is recognised as a gain
in the statement of profit or loss and other comprehensive income, but only after a reassessment of the identification and
measurement of the net assets acquired.
Acquisitions of entities that do not meet the definition of a business contained in AASB 3 Business Combinations (IFRS 3)
are not accounted for as business combinations. In such cases the Group identifies and recognises the individual identifiable
assets acquired (including those assets that meet the definition of, and recognition criteria for, intangible assets in AASB 138
Intangible Assets (IAS 38) and liabilities assumed. The cost of the group of net assets is then allocated to the individual
identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event
does not give rise to goodwill.
Except for business combinations, no deferred income tax is recognized from the initial recognition of an asset or liability,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised, or the liability is settled, and their measurement also reflects the manner in which management expects to
recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items of property,
plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred
tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely
through sale.
(f)
Income tax
The income tax for expense (income) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets)
are measured at the amounts expected to be paid to (recovered from) the relevant taxation authorities.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a 'legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset
and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
SenSen Networks Limited and its fully owned Australian subsidiary SenSen Networks Group Pty Limited have
implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the
deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Fair value of assets and liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
(i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement
date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one
or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the
receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best
use.
(h) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are reported
within borrowings in current liabilities on the statement of financial position. For the purpose of the Consolidated
Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
(i) Trade and other receivables
Trade receivables and other receivables, both of which generally have 30-day terms, are non-interest bearing and are
recognised and carried at amortised cost using the effective interest rate method, less allowance for credit losses. These
receivables are classified as current assets unless not recoverable within 12 months after reporting period
(j) Trade and other payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the
end of the reporting period. The amounts are unsecured and are usually paid within 30 days from date of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months after reporting
period. They are recognised initially at their fair value and subsequently measured at amortised cost using effective
interest method.
(k) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except where the amount of GST incurred is
not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from or payable to the ATO is included with other receivables or payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts
from customers or payments to suppliers.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Property, plant and equipment
Property, plant and equipment are measured on the cost basis and therefore carried at cost less accumulated
depreciation and any accumulated impairment. In the event the carrying amount of property, plant and equipment is
greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated
recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the
impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment
indicators are present (refer to Note 1(n) for details of impairment).
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are recognised as expenses in profit or loss during the
financial period in which they are incurred.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are recognised in profit or loss in the period in which they arise. When revalued assets are sold, amounts included in the
revaluation surplus relating to that asset are transferred to retained earnings.
Depreciation
The depreciable amount of all fixed assets is depreciated on either a diminishing value or a straight-line basis over the
asset’s useful life from the time the asset is ready for use. The depreciation rates used for each class of depreciable
asset are:
Class of fixed asset Depreciation rate per annum
Computer equipment 33 – 50%
Furniture and equipment 20 – 33%
The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.
An assets recoverable amount is written down to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
(m) Intangible assets
Goodwill
Goodwill is measured as per the Business Combination policy in note 1 (e). Goodwill on acquisition of subsidiaries is
included in intangible assets. Goodwill is not amortised but it is tested for impairment annually, or more frequently if
events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in
which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for
internal management purposes, being the operating segments.
Intellectual Property
Separately acquired intellectual property is shown at historical cost. Intellectual property acquired in a business
combination is recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried
at cost less accumulated amortisation and impairment losses.
The useful live applied to the recognised intellectual property is 7 years.
Acquired Intangible Assets
Acquired intangible assets, including brand names, technology and customer contracts are recorded at fair value at date
of acquisition. These assets have a finite useful life and are subsequently carried at fair value less accumulated
amortisation and impairment losses.
The useful lives applied to these assets are as follows:
Brand names – 5 years
Technology – 5 years
Customer contracts – 6 years
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Sofware developed or acquire for sales and licensing
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the
design and testing of new areas of products) are recognised as intangible assets when it is probable that the project will,
after considering its commercial and technical feasibility, be completed and generate future economic benefits and its
costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of
materials, services, direct labour and an appropriate proportion of overheads. 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. Capitalised development costs and acquired software
are recorded as intangible assets and amortised from the point at which the asset is ready for use on a straight-line basis
over its useful life, which varies from three to five years.
(n) Impairment of non-financial assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information including dividends
received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an
indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being
the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount.
Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
(o) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is
no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment
for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the consolidated statement of financial position when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has
been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish
all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the
difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
(p) Employee benefits – short term obligations
Liabilities for wages and salaries, including non-monetary benefits and personal leave 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 the end of the reporting period and are measured at the amounts expected to be
paid when the liabilities are settled.
All other short-term employee benefit obligations are presented as payables.
Employee benefits – long term obligations
The Group also has liabilities for long service leave that is not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service. These obligations are therefore measured as the
present value of expected future payments to be made in respect of services provided by employees up to the end of the
reporting period. Expected future payments are discounted using market yields at the end of the reporting period of high-
quality corporate bonds with terms that match the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right
to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected
to occur.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) Equity-settled compensation
The Group provides benefits to employees (including senior executives) and consultants of the Group in the form of
share-based payments, whereby employees and consultants render services in exchange for shares or rights over
shares (equity-settled transactions).
The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the
date at which they are granted. The fair value of rights over shares is determined using a binomial, or Black-Scholes
model, further details of which are given in Note 30. The fair value of shares is determined by the market value of the
Group’s shares at grant date.
In valuing equity-settled transactions, any performance conditions are taken into account if relevant and assumptions
around the likelihood of meeting these performance conditions are factored into the valuation model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i) the extent to which the vesting period has expired; and
(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional
upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-
based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings
per share.
(r) Leases
The group leases office space and motor vehicles. Rental contracts are typically made for fixed periods of 3 to 8 years
but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different
terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as
security for borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance cost is
charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and
the lease term on a straight-line basis, and range between one and three years. These assets are also subject to
impairment, as per Note 1(n).
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate
amounts expected to be payable by the lessee under residual value guarantees
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received; and
any initial direct costs.
The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change
in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties.
When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if
the carrying amount of the right-of-use asset is fully written down. The Group has elected not to recognise a right-of-use
asset and corresponding lease liability for short-term leases with terms of 12 months of less (with no extension options)
and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s) Inventory
The Group’s inventory consists of hardware and other finished goods, which are stated at the lower of cost and net
realisable value. Cost comprises direct purchase price and is determined after deducting rebates and discounts. 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.
Financial instruments
The Group measures financial instruments under the requirements of AASB 9. AASB 9 contains three principal
classification categories for financial assets: measured at amortised cost, fair value through other comprehensive income
(FVOCI) and fair value through profit or loss (FVPL). The classification of financial assets under AASB 9 is generally
based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Financial assets
Financial assets (trade and other receivables) and financial liabilities are classified at amortised cost, as they are held to
collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal
amount outstanding.
Impairment of financial assets
In determining the impairment of financial assets under AASB 9, an expected credit loss model is applied. To reflect
changes in credit risk, this expected credit loss (ECL) model requires the group to account for expected credit loss since
initial recognition. The Group applies the AASB 9 simplified approach to measuring expected credit losses which used
lifetime expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, the
trade receivables have been grouped based on shared credit risk characteristics and the number of days past due. The
contract assets relate to unbilled work in progress and unbilled software and hardware sales and have substantially the
same characteristics as the trade receivables for the same types of contracts. While cash and cash equivalents are also
subject to the impairment requirements of AASB 9, there was no material impairment loss identified.
(t) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are
measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(u) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are
measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(v) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars,
which is the parent entity's functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred
in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the
exchange difference is recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group's
presentation currency, are translated as follows:
•
•
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and accumulated losses are
translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars
are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement
of financial position. The cumulative amount of these differences is reclassified into profit or loss in the period in which
the operation is disposed of.
(w) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will
be received, and the group will comply with all attached conditions.
Research and development tax incentive
The company is eligible for the Commonwealth Government research and development tax incentive. To be eligible the
company must meet stringent guidelines on what represents both core and supporting activities of research and
development. Government grants are not recognised until there is reasonable assurance that the company will comply
with the conditions attaching to them and the grants will be received.
(x) Principles of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity where the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of 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. The acquisition method of
accounting is used to account for business combinations by the Group (refer to note 1 (e)).
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
(y) Segment reporting
Refer to note 2 for the accounting policy and disclosures relating to the Group’s operating segments.
(z) Contributed equity
Ordinary shares are classified as equity. Incremental costs attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
The profit/(loss) attributable to owners of the company, excluding any costs of servicing equity other than ordinary
shares;
• By the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share is calculated by dividing:
•
The after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares;
and
The weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
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NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(aa) In applying the Company’s accounting policies, management continually evaluates judgements, estimates and
assumptions based on historical experience and other factors, including expectations of future events that may have
an impact on the Company. All judgments, estimates and assumptions made are believed to be reasonable based
on the most current set of circumstances available to management. Actual results may differ from the judgments,
estimates and assumptions. The more significant judgments, estimates and assumptions made by management in
the preparation of these financial statements are outlined below:
(i) Share-based payments (note 30)
The estimation of the likelihood of meeting performance conditions on Long Term Incentive Performance Options
has been based on historical experience and management judgement. In addition, this estimate is assessed
annually and considered in the context of actual Group performance.
(ii) Recognition of revenue (note 1 (c))
The Group recognises revenue from either individual or multiple element arrangements such as hosting and
installation, an assessment is made as to whether these give rise to separate performance obligations which are
accounted for using the methods outlined in Note 1 (c) for each individual element contained within the contract.
(iii) Impairment of goodwill and intangible assets (note 1 (n))
The Group is required to perform an annual impairment assessment of goodwill and indefinite life intangible assets,
comparing the recoverable amount (i.e. the value-in-use) of the cash-generating unit to the carrying value of the
cash-generating unit. Assumptions are applied in this assessment, including the forecast period growth of the cash-
generating unit, the long term growth rate and the discount rate of the cash-generating unit.
(iv) Government Grants (note 1 (v))
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received, and the group will comply with all attached conditions.
(v) Research and development tax incentive
The company is eligible for the Commonwealth Government research and development tax incentive. To be eligible
the company must meet stringent guidelines on what represents both core and supporting activities of research and
development. Government grants are not recognised until there is reasonable assurance that the company will
comply with the conditions attaching to them and the grants will be received.
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NOTES TO THE FINANCIAL STATEMENTS
2. SEGMENT REPORTING
Operating segments are identified on the basis of internal reports that are regularly reviewed by the executive team in
order to allocate resources to the segment and assess its performance.
AASB 8 Operating Segments states that similar operating segments can be aggregated to form one reportable segment.
The principal areas of operation of the group are as follows:
- Smart Cities;
- Casinos;
- Retail;
- Product and Operations; and
- Corporate (not considered a separate segment).
Following the acquisition of Scancam in July 2021, the company added the retail segment to its areas of operation. The
Scancam business was acquired as a stand-alone business and as such the costs associated with this business are
easily identifiable at present. This business accesses the retail fuel sales market which is not a market where SenSen
previously participated.
As SenSen has grown, a product and operations resource pool has been developed which provides software
development, support and expertise for all of the company's products and its customers. Reported as the Product and
Operations segment, this pool is responsible for developing SenSen's technology and product offering, as well as
providing annotation to support artificial intelligence learning and customer support services. These costs can not be
meaningfully allocated to a particular customer facing segment and as a result are categorised separately.
Further to the inclusion of the Retail and Product and Operations segments, the company has decided to show a
Corporate segment for costs which are not easily split across the market segments in which it operates. These costs
include general management, facilities and other corporate services consistent with running an ASX listed company
operating internationally.
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NOTES TO THE FINANCIAL STATEMENTS
Segment Revenues and Results
The following is an analysis of the Group’s revenue and results by reportable segment:
Smart
Cities
$
Gaming
Retail
$
$
Product &
Ops
$
2022
Corporate Consolidated
$
$
Smart
Cities
$
Gaming
Retail
$
2021
$
Product &
Ops
$
Corporate
Consolidated
$
$
Segment performance revenue
Point in Time
Over Time
Total revenue
Other Income
Cost of Sales
1,645,864
550,452
1,306,230
4,231,732
276,789
1,134,357
5,877,596
827,241
2,440,587
-
(2,081,349)
-
(253,694)
-
(1,177,787)
Gross Profit
3,796,247
573,547
1,262,801
-
-
-
-
-
-
-
-
-
3,502,545
2,292,252
566,464
5,642,877
2,513,372
160,449
9,145,423
4,805,624
726,913
2,986,237
-
2,986,237
(3,512,830)
(1,623,260)
(406,386)
-
5,632,595
3,182,364
320,527
Staff & Consulting Staff Costs
(Direct)
(2,154,131)
(763,884)
(977,795)
(4,612,378)
(1,429,675)
(9,937,863)
(1,029,859)
(566,901)
Segment Contribution
1,642,115
(190,337)
285,006
(4,612,378)
(1,429,675)
(4,305,269)
2,152,504
(246,373)
Indirect Expenses
Administration expense
Advertising & Marketing
Consulting expense
Finance Cost
Occupancy Cost
Technology Costs
Share Based Payments
Fair value gain or loss
(142,857)
(316,290)
-
(76,602)
-
(952,761)
(297,597)
-
(2,202)
(15,304)
-
(1,391)
-
-
(248,978)
-
(470,220)
(74,614)
(212,150)
(189)
(83,496)
(168,049)
(110,065)
(153,565)
-
-
-
-
(208,768)
-
-
-
(1,468,039)
(409,802)
(2,358,452)
(184,226)
(117,956)
(390,888)
(2,516,713)
-
(2,083,319)
(816,010)
(2,570,602)
(262,408)
(410,221)
(1,511,697)
(3,173,353)
(153,565)
-
(43,718)
-
(21,743)
-
(71,107)
-
-
-
(14,036)
-
(323)
-
-
-
-
Total Indirect Expenses
(1,786,107)
(267,875)
(1,272,348)
(208,768)
(7,446,077)
(10,981,175)
(136,568)
(14,360)
Net loss for the period
(143,992)
(458,212)
(987,342)
(4,821,147)
(5,889,514)
(12,300,207)
2,015,936
(260,733)
Depreciation and amortisation
Share-based payment expense
(142,857)
(297,597)
-
(248,978)
(393,458)
(110,065)
(576,748)
(2,516,713)
(1,113,063)
(3,173,353)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,812,380
-
2,858,716
2,673,821
5,532,537
2,812,380
(2,029,646)
-
3,502,891
(873,634)
(1,165,685)
(3,636,079)
(873,634)
(1,165,685)
(133,188)
(140,311)
(2,063,360)
(155,151)
(2,266,088)
(159,418)
(39,482)
(648,371)
(72,288)
-
(2,063,360)
(212,905)
(2,266,088)
(181,484)
(179,793)
(719,478)
(72,288)
-
(140,311)
(5,404,157)
(5,695,396)
(1,013,945)
(3,757,462)
(3,016,204)
(544,738)
(72,288)
(544,738)
(72,288)
NOTES TO THE FINANCIAL STATEMENTS
2. SEGMENT REPORTING
The following is an analysis of the Group’s revenue by reportable geographic segment.
Smart Cities Gaming
Retail
Consolidated Smart Cities Gaming Retail Consolidated
$
$
$
$
$
$
2022
2021
Segment performance Revenue
Geographies
Asia
ANZ
North Americas
240,805
3,164,131
2,472,660
437,523
-
389,718 2,440,587
-
-
678,328
5,994,436
2,472,660
399,599
2,412,511
1,993,514
523,139
203,774
-
Total Revenue
5,877,596
827,241 2,440,587
9,145,423
4,805,624
726,913
-
-
-
-
922,738
2,616,285
1,993,514
5,532,537
The Group does not report the net profit/(loss) or net assets by geographic stream to the Chief Operating Decision
Maker, and as such, these balances are not considered relevant for segment reporting.
SenSen Annual Report FY2022
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NOTES TO THE FINANCIAL STATEMENTS
3. REVENUE AND OTHER INCOME
Revenue from contracts with customers
Revenue recognised at a point in time
Revenue recognised over time
Total Revenue
Other Income
Interest received
Gain on loan conversion to equity
Government subsidy/grant
Research and Development Grant
Total Other Income
Consolidated
30-Jun-22
$
30-Jun-21
$
3,502,546
5,642,877
2,858,716
2,673,821
9,145,423
5,532,537
8,632
-
-
2,977,606
5,698
-
47,891
2,758,790
2,986,238
2,812,379
Total revenue and other income
12,131,661
8,344,916
4. EXPENSES
Finance costs – interest paid to other persons
Depreciation
Amortisation of intangibles
Depreciation – Right of use asset
Administration expenses includes the following material balances
Total Depreciation and amortisation
Other general administration expenses
Total administration expenses
Staff Costs
Note
14
15
16
Consolidated
2022
$
262,408
2021
$
181,484
215,150
536,315
361,598
290,051
263,773
1,113,063
553,824
1,113,063
970,256
553,824
330,631
2,083,319
884,455
Contributions to defined contribution superannuation funds
(a)
491,282
237,491
Wages & other staff expenses
Total Staff Costs
Occupancy costs
Technology Costs
8,377,212
3,794,449
8,868,494
4,031,940
410,221
1,511,697
179,793
719,478
(a) Contributions to defined contribution plans are expensed when incurred.
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NOTES TO THE FINANCIAL STATEMENTS
5.
INCOME TAX
(a) Major components of income tax benefit (expense)
Current tax expense
Current tax expense
Deferred tax expense
Relating to origination and reversal of temporary differences
Total income tax expense/(benefit)
(b)
Numerical reconciliation of income tax expense to prima facie tax
payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 25.0% (2021: 26.0%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Non-deductible items
(Over)/Under provision for tax in the previous year
Accounting expenditure subject to R&D tax incentive
Other income not included in assessable income
Other
Deferred tax asset not recognised on temporary differences
Total Income tax expense/(benefit)
(c)
Deferred Income Tax
Deferred income tax at 30 June relates to the following:
Deferred Tax Assets
Sundry creditors and accruals
Provisions
Borrowing expenses
Share issue costs
Section 40-880 Deduction
Depreciation
Other
Tax losses carried forward
Deferred tax asset not recognised
Acquired intangibles
Net DTA
Consolidated
2022
$
2021
$
78,512
7,052
(303,560)
(225,047)
(1,510)
5,542
Consolidated
2022
$
2021
$
(12,300,208)
(3,075,052)
(3,016,204)
(784,213)
899,143
336,746
1,262,993
(660,504)
(5,075)
1,016,702
(225,047)
51,966
97,555
928,853
(1,021,652)
199,841
533,192
5,542
Consolidated
2022
$
2021
$
11,374
192,309
7,572
162,061
-
86,540
76,059
60,860
187,472
2,608,596
(2,918,197)
305,013
(305,013)
-
-
36,500
40,889
2,182
117,366
1,631,836
(1,998,406)
-
-
-
SenSen Annual Report FY2022
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NOTES TO THE FINANCIAL STATEMENTS
5.
INCOME TAX (CONTINUED)
The benefit of the deferred tax asset will only be obtained if:
(i)
future assessable income of a nature and of an amount sufficient to enable the benefit to be realised is
generated;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
(ii)
(iii) no changes in tax legislation adversely affect the Group in realising the benefit.
(d) Movements in deferred tax assets
Charged/credited to
Year ended June 2022
1 July 2021
Profit or Loss
Sundry creditors and accruals
Provisions
Borrowing expenses
Share issue costs
Section 40-880 Deduction
Depreciation
Other
Tax Losses Carried Forward
Deferred tax asset not recognised
Offset against deferred tax liability
7,572
162,061
-
36,500
40,889
2,182
117,366
1,631,836
(1,998,406)
-
-
2,348
30,248
35,170
58,678
70,106
976,760
(869,751)
-
303,559
Directly to
equity
Acquisition of
subsidiary
1,454
50,040
(50,040)
30 June 2022
11,374
192,309
-
86,540
76,059
60,859
187,472
2,608,596
(2,918,197)
Year ended June 2021
1 July 2020
Profit or Loss
Directly to
equity
Charged/credited to
Sundry creditors and accruals
Provisions
Borrowing expenses
Share issue costs
Section 40-880 Deduction
Depreciation
Other
Tax Losses Carried Forward
19,566
54,793
102
33,000
94,165
13,343
266,610
983,634
(11,994)
107,268
(102)
(24,450)
(53,276)
(11,161)
(149,244)
648,202
Deferred tax asset not recognised
(1,465,213)
(505,243)
(27,950)
(e) Movements in deferred tax liabilities
-
-
Year ended June 2022
1 July 2021
Profit or Loss
Directly to
equity
Charged/credited to
Intangibles
Offset against deferred tax asset
-
-
-
-
-
-
-
-
-
-
(e) Franking credits
The Group does not hold franking credits as at 30 June 2022 or 30 June 2021.
-
-
-
-
-
27,950
-
-
-
-
-
(305,013)
1,454
305,013
Acquisition of
subsidiary
30 June 2021
-
-
-
-
-
-
-
-
-
-
7,572
162,061
-
36,500
40,889
2,182
117,366
1,631,836
(1,998,406)
-
Acquisition of
subsidiary
305,013
30 June 2022
305,013
(305,013)
(305,013)
-
-
SenSen Annual Report FY2022
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53
NOTES TO THE FINANCIAL STATEMENTS
6. EARNINGS/(LOSS) PER SHARE
Consolidated
2022
Cents per Share
2021
Cents per Share
(a) Basic and diluted loss per share
From continuing operations attributable to the ordinary equity holders of the company
Total basic loss per share attributable to the ordinary equity holders of the
company
(1.99)
(1.99)
(0.62)
(0.62)
(b) Reconciliation of earnings used in calculating loss per share
Loss attributable to the ordinary equity holders of the company used in calculating
basic and diluted loss per share
(12,075,161)
(3,021,747)
(c) Weighted average number of shares
Weighted average number of ordinary shares outstanding during the year used in
calculating basic and diluted EPS
Consolidated
2022
No
2021
No
607,647,409
484,148,628
As at 30 June 2022, there are no (2021: 15,854,256) options outstanding. 15,854,256 options expired on 2 October
2021.
7. AUDITOR’S REMUNERATION
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Audit and review of the financial reports
Taxation compliance services
Total remuneration of BDO
8. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Reconciliation of cash
Cash at the end of the financial year as shown in the consolidated statement of cash flows
is reconciled to cash at the end of the financial year as follows:
Cash at bank and on hand
Bank overdrafts
Consolidated
2022
$
2021
$
249,500
187,213
436,713
223,643
68,540
292,183
6,213,860
5,176,463
6,213,860
5,176,463
-
-
6,213,860
5,176,463
SenSen Annual Report FY2022
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54
NOTES TO THE FINANCIAL STATEMENTS
9. CASH FLOW INFORMATION
(a) Reconciliation of profit/(loss) after income tax to net cash used in
operating activities
Net loss for the year
Non-cash flows in profit/(loss):
Expenses
Depreciation and amortisation expense
Right of use asset depreciation
Share based payment expense
Other non-cash
Changes in assets and liabilities net of the effects of acquisitions of
subsidiaries
(Increase)/decrease in trade and other receivables
(Increase)/decrease in contract assets
(Increase)/decrease in inventory
(Increase)/decrease other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Consolidated
2022
$
2021
$
(12,075,161)
(3,021,747)
751,465
361,598
3,173,353
153,565
290,051
263,750
72,288
78,611
(634,194)
(213,502)
9,604
(256,786)
209,999
561,514
(978,015)
(1,156,167)
1,462,843
101,180
(419,611)
(30,878)
Net cash used in operating activities
(7,887,262)
(3,408,976)
(b) Reconciliation of cash and non-cash movements in borrowings from financing activities
Year ended 30 June 2022
Borrowings and Lease liabilities (i)
Year ended 30 June 2021
Borrowings and Lease liabilities
Opening
Balance
1,305,068
1,305,068
Opening
Balance
1,744,883
1,744,883
Cash flows
721,458
559,540
Cash flows
(667,149)
(667,149)
Non-cash
Changes
296,102
458,020
Non-cash
Changes
227,384
227,384
Closing
Balance
2,322,628
2,322,628
Closing
Balance
1,305,068
1,305,068
Financing activities above includes:
(i)
Includes cash payments of lease liabilities of $398,542 and net borrowings of $1,120,000.
SenSen Annual Report FY2022
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55
NOTES TO THE FINANCIAL STATEMENTS
10. TRADE AND OTHER RECEIVABLES
CURRENT
Trade Receivables
Allowance for expected credit losses
Note
Consolidated
2022
$
2021
$
2,041,683
(98,345)
1,943,338
1,000,489
(21,747)
978,742
The Group wrote off the fully-provided for gross balance of Other receivables of $7,206,918 at 30 June 2021 as the
balance is no longer expected to be recovered. There was no impact to the profit and loss to 30 June 2022 or 30 June
2022.
(a) Deferred payment owing on sale of subsidiaries - PT Alam Duta Kalimantan (ADK)
and PT Citra Bara Prima (CBP); and a sale of tenements B34 and Papua
2022
$
2021
$
Consolidated
Opening balance
Foreign exchange (loss) gain
Total
Write-off
Closing balance
11. CONTRACT ASSETS
Contract Assets
Customer Contracts – In Progress
Allowance for expected credit loss
12. OTHER ASSETS
Other Assets
R&D Incentive Receivable
GST Receivable
Short Term Deposits
-
-
-
-
-
7,982,767
(775,849)
7,206,918
(7,206,918)
-
Consolidated
2022
$
2021
$
561,671
348,170
-
-
561,671
348,170
Consolidated
2022
$
2021
$
2,197,607
1,170,641
135,533
107,301
106,437
2,440,441
1,277,078
SenSen Annual Report FY2022
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56
NOTES TO THE FINANCIAL STATEMENTS
13. INVENTORY
Inventory
Hardware – at cost
Raw Materials – at cost
Provision for inventory
Consolidated
2022
$
2021
$
174,873
56,917
160,584
337,642
-
(256,832)
231,790
241,394
The amount of inventories recognised as an expense during the year ended 30 June 2022 was $3,512,830 (2021:
$304,682).
14. PROPERTY, PLANT AND EQUIPMENT
Motor Vehicles
$
Furniture &
Equipment
$
Computer
Equipment
$
Total
$
30 June 2022
Opening net book value at 1 July 2021
44,074
10,419
Additions – business combinations
Additions
-
-
-
-
Depreciation and amortization
(14,499)
(2,118)
336,327
5,000
253,996
(198,533)
390,820
5,000
253,996
(215,150)
Balance at 30 June 2022
29,575
8,301
396,790
434,666
At 30 June 2022
Cost
Accumulated depreciation
67,547
(37,972)
46,690
(38,389)
1,095,255
(698,465)
1,170,709
(736,043)
Net book balance
29,575
8,301
396,790
434,666
Motor Vehicles
$
Furniture &
Equipment
$
Computer
Equipment
$
Total
$
30 June 2021
Opening net book value at 1 Jul 2020
Additions/disposals
Other movements
Depreciation and amortisation
Balance at 30 June 2021
At 30 June 2021
Cost
Accumulated depreciation
Net book balance
18,498
29,668
9,772
(13,864)
44,074
67,547
(23,473)
44,074
11,368
982
-
(1,931)
10,419
323,045
221,904
(17,699)
(190,923)
336,327
352,911
252,554
(7,927)
(206,718)
390,820
46,690
(36,271)
10,419
830,550
(494,223)
336,327
944,787
(553,967)
390,820
SenSen Annual Report FY2022
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57
NOTES TO THE FINANCIAL STATEMENTS
15. INTANGIBLE ASSETS
30 June 2022
Opening net book value at 1 Jul 2021
Additions – business combinations
Impairment
Depreciation and amortisation
Balance at 30 June 2022
At 30 June 2022
Cost
Accumulated amortisation
Net book balance
30 June 2021
Opening net book value at 1 Jul 2020
Additions – business combination
Impairment
Depreciation and amortisation
Balance at 30 June 2021
At 30 June 2021
Cost
Accumulated amortisation
Net book balance
Impairment test for goodwill
Patents & other
acquired intangible
assets
$
916,667
2,269,000
-
(536,315)
2,649,352
3,269,000
(619,648)
2,649,352
Patents & other
acquired intangible
assets
$
-
1,000,000
-
(83,333)
916,667
1,000,000
(83,333)
916,667
Goodwill
$
Total
$
383,399
5,248,617
-
-
5,632,016
5,632,016
-
5,632,016
1,300,066
7,517,617
-
(536,315)
8,281,368
8,901,016
(619,648)
8,281,368
Goodwill
$
Total
$
-
383,399
-
-
383,399
383,399
-
383,399
-
1,383,399
-
(83,333)
1,300,066
1,383,399
(83,333)
1,300,066
Goodwill is monitored by management at the lowest cash-generating unit level, being that of Snap Network Surveillance
Pty Ltd (i.e. SenTrack), and the Scancam group acquisition (Scancam). The goodwill and other intangibles are therefore
entirely allocated to these cash-generating units as shown below:
2022
2021
Patents & other
acquired
intangible assets
$
Goodwill
$
Patents & other
acquired
intangible assets
$
773,810
1,875,542
383,399
5,248,617
2,649,352
5,632,016
916,667
-
916,667
Goodwill
$
383,399
-
383,399
SenTrack
Scancam
The Group tests whether the goodwill has suffered any impairment on an annual basis. For the 2022 reporting period,
the recoverable amount of the cash-generating units (CGU) was determined based on value-in-use calculations which
require the use of assumptions. The calculations use cash flow projections based on financial budgets and projections
approved by management covering a five-year period.
SenSen Annual Report FY2022
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58
NOTES TO THE FINANCIAL STATEMENTS
15. INTANGIBLE ASSETS (CONTINUED)
Significant assumptions used for the purposes of assessing each CGU for impairment include:
Average revenue growth rate FY23-FY27
Fixed cost growth rate
Post-tax discount rate
Terminal value growth
SenTrack
Scancam
23.00%
5.00%
17.00%
2.50%
17.00%
5.00%
17.00%
2.50%
Cash flows beyond the five-year period are extrapolated using the estimated long term growth rate attached to consumer
price indexation (CPI), estimated at 2.5% as at 30 June 2022. These growth rates are consistent with forecasts included
in industry reports specific to the industry in which each CGU operates. The value-in-use calculations are discounted to
their net present value using a post-tax discount rate, reflecting specific risks relating to the relevant CGU’s and the
countries in which the cash-generating unit operates. As at 30 June 2022, the Group has applied a post-tax discount rate
of 17.00%.
Revenue forecasts are based on historical amounts, adjusted for known and anticipated factors such as new contracts
won and those reasonably assured of converting. Costs based on the CGU’s incurrence of these items, factoring in forecast
increases and estimated inflation rates over the forecast period. Capital expenditure is estimated based on current costs
adjusted for anticipated future expectations.
Based on the above assumptions, the recoverable amount of the SenTrack CGU exceeds the carrying amount by $39,530.
Based on the above assumptions, the recoverable amount of the Scancam CGU exceeds the carrying amount by
$184,978.
As disclosed in note 1 (aa), the Directors have made judgements and estimates in respect to impairment testing. Should
these judgements and estimates not occur the resulting CGU carrying amount may decrease.
Impact of possible changes in key assumptions
Based on the assumptions above the value-in-use calculations for both the SenTrack and Scancam CGU’s show
headroom in excess of the carrying value of the CGU.
The table below summarises movements in the key assumptions and the impact on the impairment assessment::
Movement in
assumption
SenTrack – Impairment
impact
Scancam – Impairment
impact
Average revenue growth rate
FY23-FY27
Fixed cost growth rate
Post-tax discount rate
Terminal value growth
Decrease by 5%
Decrease by 1%
Increase by 1%
Decrease by 0.5%
$560,785
$nil
$303,625
$nil
$391,509
$nil
$62,698
$nil
SenSen Annual Report FY2022
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59
NOTES TO THE FINANCIAL STATEMENTS
16. LEASES
Amounts recognised in the consolidated statement of financial position:
Consolidated
2022
$
2021
$
Right-of-use assets
Buildings
Vehicles
Lease liabilities
Current
Non-current
325,101
10,679
335,780
185,428
182,826
368,254
Additions to the right-of-use assets during the 2022 financial year were $288,276 (2021: $284,736).
Amounts recognised the consolidated statement of profit or loss and other comprehensive income:
361,598
Depreciation charge – right-of-use assets
Interest expense – lease liabilities
34,732
396,330
The total cash outflow for leases in 2022 was $473,533 (2021: $252,848).
382,405
26,697
409,102
305,659
138,129
443,788
263,773
26,650
290,423
17. TRADE AND OTHER PAYABLES
Current
Trade payables
Accruals and other payables
18. EMPLOYEE BENEFITS
Current
Employee benefits
Non-Current
Employee benefits
Consolidated
2022
$
2021
$
1,238,557
1,449,175
2,687,732
750,357
937,057
1,687,414
Consolidated
2022
$
652,314
652,314
18,577
18,577
2021
$
263,687
263,687
105,983
105,983
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NOTES TO THE FINANCIAL STATEMENTS
19. CONTINGENT CONSIDERATION
Fair value
The methods for estimating fair value are outlined in the relevant notes to the financial statements, and unless
specifically stated, carrying value approximates fair value for all financial instruments.
Recognised fair value measurements
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level in the fair value measurement
hierarchy as follows:
•
•
•
Level 1: the instrument has quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: a valuation technique is used using inputs other than quoted prices within level 1 that are observable
for the financial instrument, either directly (i.e. as prices), or indirectly (i.e. derived from prices);
Level 3: a valuation technique is used using inputs that are not observable based on observable market data
(unobservable inputs).
The following financial instruments are subject to recurring fair value measurements:
Contingent consideration – level 3
Consolidated
30 Jun 2022
30 Jun 2021
Note
$
1,362,565
1,362,565
$
-
-
Contingent consideration has been recognised on the acquisition of Scancam Industries Pty Ltd as disclosed in note 15.
The fair value of the contingent consideration of $1,362,565 has been estimated by calculating the present value of the
future expected cash outflows discounted. If Scancam Industries Pty Ltd exceeds it forecasted annual recurring revenue
targets, this would result in a material change to the contingent consideration, up to a value of $4,163,380.
Reconciliation of level 3 movements
The following table sets out the movements in level 3 fair values for contingent consideration payable:
Opening balance 1 July
Recognised on business combination
Payments of contingent consideration
Fair value adjustments
Consolidated
30 Jun 2022
30 Jun 2021
Note
$
-
1,209,000
-
153,565
1,362,565
$
-
-
-
-
-
Valuation processes for level 3 fair values
Valuations are performed every six months to ensure that they are current for the half-year and annual financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
20. CONTRACT LIABILITIES
Current
Contract liabilities*
Consolidated
2022
$
1,156,667
1,156,667
2021
$
521,874
521,874
* $987,105 has been recognised as revenue in the 2022 financial year and $1,621,898 were in additions during the 2022
financial year.
21. BORROWINGS
(a)
(b)
Bank Loans
Other Loans
Total Current Borrowings
a) Bank loan
Consolidated
2022
$
450,000
1,504,375
1,954,375
2021
$
450,000
411,280
861,280
Includes a bank debt with Commonwealth Bank for $450,000 secured by an account set-off arrangement with a
matching term deposit and a first ranking charge over present and after acquired property. Variable rate interest of
4.57% is charged. The loan was renewed in December 2020. The loan is secured by a letter of set-off between the
Group and Commonwealth Bank over a Term Deposit.
b) Other loan
A short-term working capital loan of $380,000 was agreed with Rocking Horse Nominees Pty Ltd (‘Rocking Horse’) in
December 2020. This loan, together with accrued interest of $31,280 was owing at 30 June 2021.
The Company took a further loan from Rocking Horse of $800,000 in August 2021, increasing the principal to
$1,180,000. Interest of $55,647 accrued on this second loan.
Both of the above loans and interest totalling $1,266,927 were repaid in full on 22 November 2021 through a Research
and Development grant via the Company’s tax return for 30 June 2021.
A new loan of $1,500,000 was taken with Rocking Horse on 24 June 2022 in advance of the Company receiving a
refund through a Research and Development grant via the Company’s tax return for 30 June 2022. Fixed rate
interest of 15% is charged, interest of $4,375 has accrued on this loan to 30 June 2022. The loan is secured over
the Company’s net assets.
c) Undrawn facilities
The company has an undrawn loan facility of $1,000,000 with Adapt Capital Pty Ltd. This loan incurs a variable interest
rate based on the NAB overdraft fee plus 0.5% per annum. The loan has a maturity date of 30 days after the last
drawdown date.
The company has an undrawn loan facility of $500,000 with Subhash Challa. The loan incurs an interest rate of 4.95%
per annum. The loan has no fixed maturity date.
SenSen Annual Report FY2022
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NOTES TO THE FINANCIAL STATEMENTS
22. ISSUED CAPITAL
Ordinary shares
(a) Share capital movement during the period
Consolidated
2022
$
2021
$
Note
(a)
57,856,852
41,649,827
Consolidated
Balance at beginning of the reporting period
Shares issued during the year (i)
Share Issue Costs (ii)
Shares issued under long term incentive plan
(iii)
Balance at end of period
2022
No.
$
518,158,232 41,649,827
123,389,811 15,203,635
-
(264,057)
9,594,718
1,267,447
2021
No.
$
447,236,086 33,159,693
8,597,634
70,922,146
-
(107,500)
651,142,761 57,856,852
518,158,232 41,649,827
(i) The Group completed the following share issue allocations in each respective period:
2022 financial year
(i) SenSen issued the following shares in the 12 months ended 30 June 2022:
• Scancam acquisition share issue
On 20 July 2021, SenSen Networks Limited successfully completed the acquisition of Scancam Industries
Pty Ltd. 39,285,715 shares were issued on this date as part of the consideration paid based on the
published share price on 20 July 2021 of $0.13 per share.
• Share placements
o On 9 November 2021, the Group completed a placement of 30,000,000 shares at $0.12 per share
to institutional and sophisticated investors. The share price on the date of issue was $0.12.
o On 21 December 2021, the Group completed a placement of 5,000,000 shares to Subhash Challa
(Chairman and CEO) and David Smith (Executive Director and COO) at $0.12 per share. The
share price on the date of issue was $0.12 per share.
o On 23 December 2021, the Group completed a placement of 25,000,000 shares at $0.12 per
share. The share price on the date of issue was $0.12 per share.
• Share purchase plan
On 20 December 2021, the Group raised $2,796,500 via a share purchase plan in which 23,304,096
shares were issued at $0.12 per share. The share price on the date of issue was $0.12 per share.
• Contractor / Employee
800,000 shares on 25 May 2022 for services provided by a third-party consultant. The equity movement
has been accounted for at the fair value of the services received, in accordance with AASB 2 Share-
based Payment.
(ii) Share issue costs include payments to external parties in relation to the total value of share capital raised.
(iii)
Employee Long Term Incentive Plan
On 24 December 2021, 9,594,718 shares were issued in relation to the Group’s long term incentive plan.
Refer Note 30 for further details.
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NOTES TO THE FINANCIAL STATEMENTS
22. ISSUED CAPITAL (CONTINUED)
2021 financial year
SenSen issued the following shares in the financial year ended 30 June 2021:
• Employee Incentive Plan
o
3,371,052 shares on 23 July 2020. The expense in relation to this share issue was expensed as part of
the share based payments in the 2020 financial year.
• Snap Surveillance
o
9,881,423 shares on 1 December 2020 as part of the consideration, based on the published share
price on 1 December 2020 of $0.14 per share. There are 4,940,712 shares still under escrow at 30
June 2021.
• External Advisors
o
o
263,158 shares on 1 December 2020 at $0.095 per share. The share price on transaction date was
$0.14 per share. The difference between the value of the equity granted and the share price is
accounted for as expense in the consolidated statement of profit or loss and other comprehensive
income.
101,250 shares on 21 December 2020 at $0.095 per share. The share price on transaction date was
$0.125 per share. The difference between the value of the equity granted and the share price is
accounted for as expense in the consolidated statement of profit or loss and other comprehensive
income.
• Contractor / Employee
o
105,263 shares on 1 December 2020 at $0.095 per share. The share price on transaction date was
$0.14. The difference between the value of the equity granted and the share price is accounted for as
expense in the consolidated statement of profit or loss and other comprehensive income.
• Private Placement:
o
57,200,000 shares in January 2021, as part of an $7,150,000 placement to private and institutional
investors, equal to approximately 11% of the total post-placement issued shares of SenSen. The
placement was conducted at $0.125 cents per share, a discount of 9.29% to the 30-day Volume
Weighted Average Price (VWAP) of SenSen shares.
(d) Capital Management
Management controls the capital of the group in order to provide capital growth to shareholders and ensure the group
can fund its operations and continue as a going concern. The Group’s capital includes ordinary share capital. There are
no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the
Group’s financial risks and adjusting its capital structure in response to changes in these risks and the market.
There have been no changes in the strategy adopted by management to control the capital of the Consolidated Entity
since the prior year.
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NOTES TO THE FINANCIAL STATEMENTS
23. RESERVES
(a) Other Reserves
Share-based payment reserve
Foreign currency translation reserve
(b) Movements
Foreign exchange translation reserve
Balance at beginning of financial year
Currency translation differences arising during the year
Balance at end of financial year
Share-based payment reserve
Balance at beginning of financial year
Share-based payment expense
Transfer from reserves
Balance at end of financial year
(c) Nature and purpose of reserves
(i) Share-based payment reserve
Consolidated
2022
$
2021
$
5,575,665
(98,525)
5,477,140
3,669,759
(72,424)
3,597,335
(72,424)
(26,101)
(98,525)
(115,751)
43,327
(72,424)
3,669,759
3,173,353
(1,267,447)
5,575,665
3,597,471
72,288
-
3,669,759
The share-based payment reserve is used to record the value of share-based payments provided to
employees, including key management personnel, as part of their remuneration.
(ii) Foreign exchange translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign operations where their functional currency is different to the
presentation currency of the reporting entity.
24. CONTINGENT LIABILITIES
There are no contingent liabilities or contingent assets at 30 June 2022 (30 June 2021: Nil).
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NOTES TO THE FINANCIAL STATEMENTS
25. BUSINESS COMBINATIONS
On 26 May 2021, SenSen Networks Limited announced the acquisition of Scancam Industries Pty Ltd, acquiring 100% of
the issued share capital. On 15 July 2021, SenSen Networks Limited held its General Meeting, approving the quotation
of 39,285,715 shares to be issued as part of this business combination transaction. Following this, on 20 July 2021
SenSen Networks Limited successfully completed the acquisition of Scancam Industries Pty Ltd, acquiring 100% of the
share capital of Scancam Industries Pty Ltd, a software company. The acquisition has significantly increased the group’s
market share in this industry and complements the group’s existing software division.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration, consisting of:
Initial cash payment
Net working capital adjustment
Non-cash consideration shares
Contingent consideration
Total purchase consideration
$
1,000,000
197,000
5,107,143
1,209,000
7,513,143
The fair value of the 39,285,715 shares issued as part of the consideration paid for Scancam Industries Pty Ltd was
based on the published share price on 20 July 2021 of $0.13 per share.
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Trade debtors
Property, plant and equipment
Other assets
Tax receivable
Trade creditors
Other liabilities
Net identifiable assets acquired
Add: acquired intangible assets
Brand name
Technology
Customer contracts and relationships
Goodwill
Deferred tax liability
Net assets acquired
117,000
407,000
5,000
56,000
167,000
(386,000)
(32,000)
334,000
223,000
920,000
1,126,000
5,248,699
(338,556)
7,513,143
The main factor represented in the Goodwill is the synergies from combining operations of SenSen Networks Limited and
Scancam Industries Pty Ltd. This Goodwill balance is not expected to be deductible for tax purposes.
Acquisition costs expensed in the consolidated statement of profit or loss and other comprehensive income as part of the
business combination amount to $91,424. At acquisition date the Group estimates all balances of trade debtors acquired to be
collected.
Outflow of cash to acquire subsidiary, net of cash acquired was $1,080,000, being $1,000,000 cash consideration,
$197,000 for working capital less $117,000 of cash acquired.
Deferred and contingent consideration
Payable in either cash or ordinary shares in SenSen (in the absolute discretion of the SenSen Board), up to a maximum of AUD
$4,163,380 over two payments, should the audited Business Annual Recurring Revenue (ARR) of the Scancam business reach
AUD $3,000,000. The potential undiscounted amount of all future payments that the Group could be required to make under
this arrangement is between $0 and $4,163,380.
Post-acquisition results
Following Scancam’s acquisition by SenSen Networks Limited, the business has contributed $2,440,587 in revenue to the
SenSen Group and a gross profit contribution of $1,262,801 to the SenSen Group.
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NOTES TO THE FINANCIAL STATEMENTS
26. RELATED PARTY TRANSACTIONS
(a) Shareholder Loan
There were no related party transactions during the period other than those shares issued via the LTI plan noted in Note
22, Issued Capital.
27. EVENTS AFTER THE REPORTING PERIOD
There were no significant subsequent events from 1 July 2022 to the date of signing this document.
28. INTEREST IN SUBSIDIARIES
The following are subsidiaries of the group, are controlled entities and have been consolidated at 30 June 2022.
(a) Controlled entities consolidated
Name of subsidiary
SenSen Networks Group Pty Ltd
SenSen Networks Operations Pty Ltd
SenSen Networks Gaming Pty Ltd
SenSen Networks (Hong Kong) Limited
PT Orpheus Energy
SenSen Networks Singapore Pte Limited
SenSen Video Business Intelligence PVT Ltd
SenSen Networks, Inc.
SenSen Networks Canada Ltd*
Scancam Industries Pty Ltd**
Scancam Leasing Pty Ltd***
Scancam Operations Pty Ltd****
Fuel Recovery Services Australia Pty Ltd*****
Equity interest*
Country of
incorporation
Australia
Australia
Australia
Hong Kong
Indonesia
Singapore
India
United States
Canada
Australia
Australia
Australia
Australia
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
* SenSen Networks Canada Ltd was incorporated by SenSen Networks on 15 March 2021
**Scancam Industries Pty Ltd was acquired by SenSen Networks on 20 July 2021
***Scancam Leasing Pty Ltd was acquired by SenSen Networks on 20 July 2021
****Scancam Operations Pty Ltd was acquired by SenSen Networks on 20 July 2021
*****Fuel Recovery Services Australia Pty Ltd was acquired by SenSen Networks on 20 July 2021
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NOTES TO THE FINANCIAL STATEMENTS
29. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Key Management Personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2022
$
1,141,113
140,916
1,280,268
2,562,297
2021
$
1,021,206
96,413
50,000
1,167,619
Detailed remuneration disclosures are provided in the Remuneration Report on pages 22 to 30.
(b) Equity instrument disclosures relating to Key Management Personnel compensation
Details of Key Management Personnel option and share holdings are disclosed in the Remuneration Report.
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NOTES TO THE FINANCIAL STATEMENTS
30. SHARE BASED PAYMENTS
The following share rights were issued as part of compensation to key management personnel during the year ended 30
June 2022 and 30 June 2021. No options over ordinary shares were issued as part of compensation to employees during
the year ended 30 June 2022 or 30 June 2021.
Share Rights
A new LTI scheme was approved by the Board of SenSen on 10 May 2021 and grants rights to shares to key
employees of the Company over a three-year period, if certain targets are achieved. Shareholders voted at a general
meeting of the Company on 15 July 2021 to approve 25,000,000 shares to be issued over three years for this
scheme.
The number of shares to be issued will be calculated as follows:
• An agreed percentage of eligible employee’s annual salary;
• Number of shares to be issued based on the 5 day Volume Weighted Average Price (VWAP) prior to the
Company’s Financial Year results announcement.
• A combination of an eligible employee’s length of service and the Company meeting internal measure
targets in the most recent Financial Year. Internal measure targets include:
o Continual service period;
o Revenue hurdles; and
o EBITDA hurdles.
These hurdles are considered non-market vesting conditions and the probability of being met is taken into account
when determining the expense to be recognised in each period.
The rights to shares were granted after 15 July 2021 (therefore with no impact in the 30 June 2021 financial year),
and vest annually if the following three targets are achieved by SenSen employees:
Grants
Financial Year
2020/2021
2021/2022
2022/2023
Grant dates 1
Various
Various
Various
Target measures
Service Revenue Target
50%
50%
50%
40%
40%
40%
EBITDA
10%
10%
10%
1 For the different relevant employees
The actual number of shares to be issued to each employee is based on the above fixed percentages of their salary
at grant date. A summary of the value expensed, and the number of shares issued is detailed below.
Share rights to these three grants vest annually once the Company issues its Annual Report on or around 30
September. This report will provide revenue and EBITDA results that will be used to determine whether individual
tranches vest. The following tables outline the individual annual hurdles/targets required in order for annual share
rights to be awarded and vest:
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NOTES TO THE FINANCIAL STATEMENTS
30. SHARE BASED PAYMENTS (CONTINUED)
Annual Hurdles/Targets
Service Target
Service
Percentage of Rights
Vesting
Less than 12 months
Threshold: 1 year – 3 years
Target: 3 years +
Nil
75%
100%
The service target is assessed each year at 30 June.
Revenue Target
•
First vesting date Revenue 40% greater than FY2020 Revenue recorded in the 30 June 2021 Annual Report
• Second vesting date Revenue 25% greater than hurdle - revenue established at first vesting date (i.e. audited
•
full year revenue for FY2022)
Third vesting date Revenue 25% greater than hurdle Revenue established at second vesting date (i.e. audited
full year revenue for FY2023)
• Continued service to vesting date
EBITDA Target
•
First vesting date EBITDA 25% greater than FY2020 EBITDA recorded in the 30 June 2021 Annual Report
• Second vesting date EBITDA 25% greater than hurdle EBITDA established at first vesting date (i.e. audited full
•
year EBITDA for FY2022)
Third vesting date EBITDA 25% greater than hurdle EBITDA established at second vesting date (i.e. audited full
year EBITDA for FY2023)
• Continued service to vesting date
These share rights are issued for nil consideration based on a five-day VWAP of the Company’s share price prior to
the lodgment of the Annual Report is lodged based on the relevant percentage of the employee salary.
For 2021 the Revenue and EBITDA targets were met and the EBITDA Stretch target was not met as shown below:
Target Measure
Revenue
EBITDA
EBITDA Stretch
$5,268,936
($2,322,738)
($2,013,040)
Target $
Actual Result
Target met?
$5,532,537
($2,280,897)
($2,280,897)
Yes
Yes
No
For 2022 the Revenue and Revenue Stretch targets are expected to be met and the EBITDA target is not expected to be
met as shown below:
Target Measure
Revenue
EBITDA
Revenue Stretch
$6,915,671
($1,710,673)
$7,468,925
Target $
Actual Result
Target met?
$9,145,423
($10,500,744)
$9,145,423
Yes
No
Yes
For 2023 the Revenue and EBITDA targets are expected to be met and the Revenue Stretch target is not expected to be
met as shown below:
Target Measure
Revenue
EBITDA
Revenue Stretch
$11,431,779
($7,875,558)
$12,346,321
Target $
Actual Result
Target met? 1
N/A
N/A
N/A
Yes
Yes
No
1 Represents current expectations for each target.
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NOTES TO THE FINANCIAL STATEMENTS
30. SHARE BASED PAYMENTS (CONTINUED)
Year 3
Grant
Date
Vest
date
Service
$
Revenue
$
EBITDA
$
50%
497,415
40%
533,637
10%
33,409
Revenue
–
Stretch
$
20%
Discretionary
Grant
$
N/A
Total
$
Shares
issued 1
-
102,986
1,267,447 9,594,718
654,162
584,087
-
116,817
9,405
1,364,471
220,382
254,996
66,057
-
-
41,435
N/A
N/A
1,371,959
1,372,720
199,466
116,817
112,391
3,173,353
2021
Various
Various
Various
2022
2023 2
Total
On grant
date
30 June
2022
30 June
2023
1 Final number of shares to be issued will be determined based on a five-day VWAP of the Company’s share price prior to the lodgment
of the Annual Report.
2 This amount represents the proportionate expense related to the 2022 year. The remaining amounts will be expensed in 2023
dependent on the targets being met.
3 Being the year for which employees criteria for which performance criteria for vesting are assessed.
a) Long Term Incentive (“LTI”) Options
The company issued both LTI Incentive Options, General Options and LTI Performance Options during the year ended
30 June 2018. There were no further issues during the year ended 30 June 2022 or 30 June 2021.
LTI Incentive Options and General Options
On 30 November 2017, the Company granted 11,100,000 LTI Incentive Options to Subhash Challa (Executive Chairman
and CEO) and David Smith (COO) and 4,500,000 General Options to its broker, BW Equities. These options vested
immediately and have an exercise period of 3 years. These options were granted in 3 equal lots with exercise prices of
25 cents, 35 cents and 45 cents.
Share options outstanding at the end of the year follows:
2021
Grant date
Expiry date
30/11/2017
30/11/2017
30/11/2017
20/03/2018
04/12/2020
04/12/2020
04/12/2020
30/09/2021
Exercise
Price
$0.25
$0.35
$0.45
$0.155 (i)
Balance at
the start of
the year
5,200,000
5,200,000
5,200,000
15,854,256
31,454,256
Granted
Exercised
-
-
-
-
-
-
-
-
-
-
Expired/
forfeited/
Other (ii)
Balance at
the end of
the year
(5,200,000)
(5,200,000)
(5,200,000)
-
-
-
-
15,854,256
(15,600,000)
15,854,256
2022
Grant date
Expiry date
Exercise
Price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
Other (ii)
Balance at
the end of
the year
20/03/2018
30/09/2021
$0.155 (i)
15,854,256
15,854,256
-
-
-
-
(15,854,256)
-
(15,854,256)
-
(i) Exercise price is based on estimated 5-day VWAP of the Company’s shares, following the ASX release of the
Company’s Annual Report, for the financial year ended 30 June 2018.
(ii) Option expired during the financial year.
There were no LTI options granted during the year ended 30 June 2022 and 30 June 2021. There were 15,854,256
options that expired during the year-ended 30 June 2022 (2021: 15,600,000).
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NOTES TO THE FINANCIAL STATEMENTS
31. PARENT ENTITY INFORMATION
Parent entity information required to be disclosed in accordance with the Corporations Act 2001. The legal parent entity
of the group is SenSen Networks Limited, and the results shown below are for the 12 months ended 30 June 2022 and
2021:
(a) Summary financial information
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Statement of financial position of the parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Total equity
Parent entity
2022
$
(118)
-
(118)
3,774
-
3,774
-
2021
$
(180)
(180)
3,892
-
3,892
-
939,248
939,248
939,248
939,248
(935,474)
(935,356)
40,322,041
40,322,041
(41,257,515)
(41,257,397)
(935,474)
(935,356)
(b) Guarantees entered into by the parent entity
The parent entity has not entered into any guarantees at the 30 June 2022 and 30 June 2021.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2022 and 30 June 2021.
(d) Contractual commitments for the acquisition of property, plant or equipment
As at the 30 June 2022, the parent entity has made no contractual commitments for the acquisition of plant or
equipment.
(e) Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements, except for the investments in subsidiaries which are accounted for at cost in the financial statements
of SenSen Networks Limited.
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NOTES TO THE FINANCIAL STATEMENTS
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Financial liabilities
Trade payables
Short term loans
Consolidated
2022
$
2021
$
6,213,860
1,943,338
561,671
8,718,869
5,176,463
978,742
348,170
6,503,375
1,238,557
1,954,375
750,357
861,280
3,192,932
1,611,637
The Company monitors its exposure to key financial risks, principally market risk (including currency risk), interest risk,
credit risk and liquidity risk, with the objective of achieving the company’s financial targets whilst protecting future
financial security.
The main risks arising from the company's financial instruments are liquidity risk, interest rate risk and credit risk. The
Company uses different methods to measure and manage different types of risks to which it is exposed. These include
monitoring levels of exposure to interest rates and assessments of market forecasts for interest rates. Liquidity risk is
monitored through the development of future rolling cash flow forecasts and regular internal reporting. Credit risks are
managed by credit limits and retention of the title over the investments sold.
The Board reviews and agrees policies for managing each of these risks as summarised below. Primary responsibility for
identification and control of financial risks rests with the Board. It reviews and agrees policies for managing each of the
risks, including the use of derivatives, hedging cover of interest rate exposure, credit allowances, and future cash flow
forecast projections.
(a) Market Risk
Foreign exchange risk
Exchange Risk arises whereby currency exchange rates may affect the assets and liabilities and the consolidation of
companies within the group.
The company reports in Australian Dollars; the operating currency for Indian subsidiary is the Indian Rupee, the
operating currency for the US subsidiary is US Dollars, the operating currency for the Singapore subsidiary is Singapore
Dollars, and the operating currency for the Canadian subsidiary is Canadian Dollars.
(b) Interest Risk
The company has a business loan facility of $450,000 and an undrawn overdraft facility of $225,000 with the
Commonwealth Bank of Australia. Interest is charged at a variable rate of 4.57% on the business loan.
The company maintains a working capital facility with Rockinghorse Group of $1,504,375 which in repaid annually upon
receipt of the company’s R&D grant. This loan incurs interest at a rate of 15.0% p.a.
Group sensitivity
At 30 June 2022 if interest rates had increased/decreased by 50 basis points from the year end rates with all other
variables held constant, the result would not be material at $9,771. (2021: $4,306)
Based on movements in interest rates the company regularly reviews the deployment of funds and the exposure to
interest rate risk in conjunction with currency and exchange rate risk in order to manage these risks in line with corporate
objectives.
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NOTES TO THE FINANCIAL STATEMENTS
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(c) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from other third parties, investments, banks
and financial institutions.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to
recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in
the statement of financial position and notes to the financial statements. A general security deed is held by Rocking
Horse Nominees Pty Ltd at 30 June 2022 and Credit risk is reviewed regularly by the Board.
The Group does not have any other material credit risk exposure to any single counterparty, except for its holdings of
cash which is held with the Commonwealth Bank, National Australia Bank and Bank of America.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables and contract assets.
Approach to determining expected credit losses
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared
credit risk characteristics and the days past due. The contract assets relate to the Group’s right to consideration for
performance complete to date before payment is due and have substantially the same risk characteristics as the trade
receivables for the same types of contracts. The Group has therefore concluded that the expected loss rates for trade
receivables are a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the historical payment profiles. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the
receivables including consideration of the uncertain economic environment arising from the COVID-19 pandemic.
For the year ended 30 June 2022, the Group has considered whether the expected loss rates are required to be
increased due to the uncertain economic environment arising from the COVID-19 pandemic.
The Group has identified the GDP, country specific unemployment rates and the outlook for customer industries as the
most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment
plan with the Group, and a failure to make contractual payments for a period of greater than 120 days past due. The
Group has assessed that there is no material credit loss exposure on trade receivables and contract assets.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating
profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
Trade and other receivables
The Group limits its exposure to credit risk by only limiting transactions with high credit quality financial institutions
principally government bodies and large listed corporate firms.
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NOTES TO THE FINANCIAL STATEMENTS
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(d) Liquidity Risk
The table below reflects all contractually fixed payoffs and receivables for settlement from recognised financial assets
and liabilities, as of 30 June 2022. The amounts disclosed are undiscounted cash flows anticipated to eventuate in the
next fiscal year.
Cash flows for financial assets and liabilities without fixed amount or timing are based on the conditions existing at 30
June 2022.
2021
Financial assets
Cash and cash deposits
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Short term loans
Lease liabilities
Net maturity
2022
Financial assets
Cash and cash deposits
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Short term loans
Lease liabilities
Net maturity
Total
$
5,176,463
978,742
348,170
6,503,375
750,357
861,280
443,788
2,055,425
4,447,950
Total
$
6,213,860
1,943,338
561,671
8,718,869
1,238,557
1,504,375
368,254
3,111,186
5,607,685
< 6 Mths
$
5,176,463
978,742
348,170
6,503,375
750,357
861,280
160,576
1,772,213
4,731,162
6-12 Mths
$
1-5 Yrs
$
-
-
-
-
-
-
-
-
-
-
-
-
148,970
148,970
134,242
134,242
(148,970)
(134,242)
< 6 Mths
$
6-12 Mths
$
1-5 Yrs
$
6,213,860
1,943,338
561,671
8,718,869
1,238,557
1,504,375
128,141
2,871,073
5,847,796
-
-
-
-
-
-
-
-
-
-
57,287
57,287
-
-
182,826
182,826
(57,287)
(182,826)
The contractual maturities of the company’s financial assets and liabilities set out in the table are equivalent to the
maturity analysis of financial assets and liability based on management's expectation.
The risk implied from the values in the table reflects a balanced view of cash inflows and outflows.
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DIRECTORS’ DECLARATION
Directors’ Declaration
In accordance with a resolution of the Directors of SenSen Networks Limited, the Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 33 to 75.
(a) comply with Australian Accounting Standards and interpretations, and Corporations Act 2001 and Corporations
Regulations 2001, which confirms compliance with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board; and
(b) give a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the financial
year ended on that date;
2.
in the Directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable; and
3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief
Executive Officer and Chief Financial Officer.
Subhash Challa
Chairman
Dated: 30 Sep 2022
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Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of SenSen Networks Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of SenSen Networks Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Revenue Recognition
Key audit matter
How the matter was addressed in our audit
The Group’s revenue recognition disclosures
are included in Note 1 (c), detailing the
accounting policies applied under AASB 15
Revenue from Contracts with Customers.
The assessment of revenue recognition was
significant to our audit due to revenue being
a material balance in the financial
statements for the year ended 30 June
2022, and there being a level of complexity
to the contracts regarding performance
obligations, and revenue being recognised
either over time or at a point in time.
The recognition of revenue largely depends
on the terms of the underlying contracts
with customers. Contracts can be complex
and bespoke. In particular, significant
judgement and estimation are required by
the Group in determining the amount of
revenue recognised for licences and other
multiple obligation customer contracts, and
the timing of when this revenue is
recognised.
The assessment of revenue recognition and
measurement required significant auditor
effort.
Our procedures included, amongst others:
•
•
•
•
•
Assessing the Group’s revenue recognition
policy for compliance with Australian
Accounting Standards
Developing an understanding of the various
revenue streams and the Group’s revenue
recognition policies for each stream through
discussions with management
Reviewing a sample of key customer contracts
for each revenue stream with multiple
obligations to determine whether revenue
was recognised in accordance with the
Group’s accounting policies and the
requirements of the Australian Accounting
Standards
Testing a sample of revenue transactions and
reviewing the terms and conditions of the
executed contracts and other supporting
evidence to ensure that the accounting
treatment had been correctly applied,
including evaluating whether performance
obligations had been met and revenue had
been recognised in the correct period
Performing a detailed analysis of revenue and
the timing of its recognition based on
expectations derived from our knowledge of
the Group’s products and the markets it
operates in.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
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Business combination accounting including determination of goodwill
Key audit matter
How the matter was addressed in our audit
During the year, the group acquired the
Scancam Industries Pty Ltd (‘Scancam’).
As disclosed in Note 25, as part of these
business combination transactions, the
Group recognised the following additional
intangible assets:
•
•
•
Brand name
Technology
Customer contracts and relationships
• Goodwill
Business combinations is a key audit matter
due to the significant audit effort to test
the group’s acquisitions during the year and
the level of judgement applied in evaluating
management’s assessment of goodwill
allocated in the purchase.
Our procedures included, amongst others:
•
•
•
•
•
•
•
Obtaining an understanding of the transaction
including an assessment of the accounting acquirer
and whether the transaction constituted a business
or asset acquisitions
Reviewing purchase documentation including
contracts and business sale agreements and
obtaining a detailed understanding of the acquired
business
Assessing the appropriateness of the valuation
methodology of the assets acquired
Reviewing management’s assessment of the fair
value of the consideration paid and the recognition
of contingent consideration upon the acquisition
date
Evaluating management’s assessment of the
identifiable assets and liabilities acquired including
reviewing independent intangible asset valuation
for the acquisition obtained by management
Engaging with internal experts on the
appropriateness of the calculation of identifiable
intangible assets
Assessing the adequacy of the Group's disclosures
of the acquisitions.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
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79
Impairment assessment of Goodwill and Other Intangible Assets and determination of Cash
Generating Units (“CGU’s”)
Key audit matter
How the matter was addressed in our audit
The Group’s disclosures in respect to
intangible assets, including the impairment
assessments of goodwill and other intangible
assets are included in Note 15.
The carrying value of intangible assets
represent a significant asset of the Group.
The Group is required to annually test the
amount of goodwill and indefinite useful life
intangible assets for impairment and assess
other intangible assets for impairment
indicators.
This annual impairment test was significant
to our audit because the goodwill and
intangible assets balance is material to the
financial statements and because
management’s assessment process,
including the determination of CGU’s, is
complex, highly judgmental and includes
estimates and assumptions relating to
expected future market or economic
conditions.
Our procedures included, amongst others:
•
•
•
•
•
•
Evaluating management’s determination of the
Group’s Cash Generating Units ("CGU's") to ensure
they are appropriate, including being at a level no
higher than the operating segments of the entity
Evaluating management’s process regarding the
valuation of the Group’s goodwill and other
intangible assets
Assessing the Group’s assumptions and estimates
relating to forecast revenue, costs, capital
expenditure and discount rates used to determine
the recoverable amount of its assets
Assessing the historical accuracy of forecasting of
the Group by comparing the current year actual
results with FY22 figures included in prior year
forecasts to consider whether any forecasts
included assumptions, that with hindsight, had
been optimistic
Involving our internal specialists to assess the
discount rates and terminal growth rates against
comparable market information
Challenging key assumptions by performing
sensitivity analysis on the growth rates and
discount rate assumptions used.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2022, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
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80
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 29 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of SenSen Networks Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 30 September 2022
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
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ASX Additional Information (Unaudited)
Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows. The information
is current as at 27 September 2022.
(a) Distribution of equity securities
There are 651,142,760 fully paid ordinary shares held by 2,310 individual shareholders.
All issued ordinary shares carry one vote per share and carry the rights to dividends.
The numbers of shareholders, by size of holding, in each class are:
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 over
Totals
Holding less than a marketable parcel
Option
(b) aid Substantial shareholders
Name
EQUITY PLAN SERVICES PTY LTD
MR SUBHASH CHALLA
ZENON PASIECZNY/SAPHET CAPITAL MANAGEMENT PTY LTD
MIZIKOVSKY GROUP
VGI PARTNERS ASIAN INVESTMENTS LIMITED (VG8)
Holders
151
548
310
804
497
2,310
805
Total Units
64,137
1,661,508
2,479,518
32,189,731
614,747,866
651,142,760
2,369,682
%
0.01
0.26
0.38
4.94
94.41
100
Number
141,861,833
86,148,062
47,126,259
42,742,093
4,519,175
Percentage
21.8%
13.2%
7.2%
6.6%
5.3%
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ASX Additional Information (Unaudited)
(c) Twenty largest holders of quoted equity securities
Ordinary shareholders
1. EQUITY PLAN SERVICES PTY LTD
2. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
3. ADAPTALIFT INVESTMENTS PTY LTD
4. RAINROSE PTY LTD
5. MR SUBHASH CHALLA
6. SAPHET CAPITAL MANAGEMENT PTY LTD
7. CITICORP NOMINEES PTY LIMITED
8. AA & J SCHMIDT HOLDINGS PTY LTD
9. ME BYRNE INVESTMENTS PTY LTD
10. MR WILLIAM MORAN
11. BNP PARIBAS NOMINEES PTY LTD
12. MR SATISH GUPTA
13. SUNSTAR AUSTRALIA PTY LTD
14. MR SHARATHCHANDRA REDDY GUNUPATI
15. GASMERE PTY LTD
16. MR DAVID EDWARD SMITH
17. SANDHURST TRUSTEES LTD
18. MR VENKATESWARA PRASAD GUNUPATI
19. SKYLEVI PTY LTD
20. MRS LAXMI CHALLA
Fully Paid
Number
Percentage
141,861,833
21.79
34,519,175
32,332,599
30,644,643
28,778,002
22,262,395
21,516,976
10,650,987
9,396,755
9,232,976
9,113,021
6,874,701
5,899,959
5,632,915
5,566,000
5,050,654
4,860,449
4,822,335
4,688,470
4,033,409
5.30
4.97
4.71
4.42
3.42
3.30
1.64
1.44
1.42
1.40
1.06
0.91
0.87
0.85
0.78
0.75
0.74
0.72
0.62
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
397,738,254
253,404,506
61.08
38.92
UNQUOTED SECURITIES
There are no unquoted securities at 30 June 2022.
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