SenSen Networks Ltd
Annual Report
for the year ended 30 June 2023
SenSen Networks Limited and
Controlled Entities
ABN 67 121 257 412
CORPORATE INFORMATION
SenSen Networks Limited
ACN 121257412
Directors
Dr Subhash Challa, Executive Chairman
Mr Zenon Pasieczny, Non-Executive Director
Mr David Smith, 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
Automic Pty Limited
Level 5, 126 Phillip Street
Sydney NSW 2000
Australia:
Overseas callers:
Internet:
1300 288 664
+61 2 8072 1400
www.automicgroup.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
SenSen Annual Report FY2023
sensen.ai
2
LETTER FROM THE CHAIR & CEO
Dear Fellow Shareholders,
A heartfelt welcome to both our new and existing shareholders as
you delve into our Annual Report for the financial year 2023. Our
primary emphasis this year was on cost reduction coupled with
revenue growth. I extend my congratulations to our dedicated
team for accomplishing another year of remarkable revenue
growth, surpassing the $10 million revenue milestone for the first
time in our journey.
As detailed in multiple quarterly reports leading up to the conclusion of FY23, we have undertaken a series of
initiatives throughout the year to revamp the company's structure and streamline operations, encompassing HR,
IT, travel, and project delivery, all while preserving our growth trajectory. In alignment with this directive, we
expanded our portfolio of government and enterprise clients from approximately 60 in FY22 to over 75 in FY23,
simultaneously achieving a reduction of 40% in year-over-year losses. Through a range of strategic endeavors,
we have generated robust momentum to sustain our acquisition of new customer logos, with the goal of
surpassing 100 customers and optimizing revenue growth without incurring additional costs, ultimately targeting
profitability in FY2024.
Here are the key highlights for FY23:
• The company achieved a key milestone with record-breaking revenues of $10.8 million, marking an
impressive 18% year-over-year growth. Additionally, annual customer cash receipts exceeded $11.1
million, reflecting an outstanding 25% year-over-year growth.
• A substantial portion of these revenues consists of annual recurring income derived from our
government and enterprise customers, boasting minimal churn. This ensures robust cash flow stability
for the company in FY24.
• We expanded our government and enterprise customer base from 60 to 75, delivering a remarkable
25% growth in the acquisition of new customer logos.
• Our customer net retention rate for FY23 approached 100%, indicating minimal churn and emphasizing
the value we provide to our customers, as well as their positive experiences with our offerings.
•
•
Long-term cost optimization initiatives have positioned the company for sustainable growth with
profitability.
Significant investments were made in R&D to enhance the ease of product delivery, commissioning, and
scalability, with a strong focus on reducing project execution times and enhancing predictability in
delivery timelines.
• Numerous stakeholders have stepped up to offer input aimed at enhancing the company's performance,
and among the recurring suggestions we've received is the need to enhance shareholder communication
and marketing efforts. In response, we've initiated several steps to tackle this issue.
• One of the key initiatives related to shareholder communications and marketing, is the collaboration
with Edison Research. Our executive has worked close with the Edison research group to clearly identify
and articulate the unique aspects of our platform and clarify our position within the AI landscape. This
resulted in several key outcomes
o
Identification and articulation that we are a leader in a special class of AI – Live Awareness AI.
o Providing customers with Live (real-time) Awareness of all that is happening within the physical
world in real-time is an essential function of the drive towards making AI more capable,
ultimately allowing for greater decision-making powers and autonomy.
o While we created Live Awareness on a product-by-product basis, we strategically used the work
being produced to develop the only platform which can fuse multiple real time data sources of
any type into a single stream of Live Awareness for AIs, allowing our team to build better, more
performant services on top.
SenSen Annual Report FY2023
sensen.ai
3
LETTER FROM THE CHAIR & CEO
o This platform is already commercialized through a range of live awareness solutions and in
intensive daily use by cities, casinos, airports and fuel retail stores globally.
•
In FY23, the Live Awareness AI platform is adopted to several new use cases generating new upfront and
recurring revenue streams including:
o Sea Port Operations to improve safety around containers and on roads. Singapore Port
Authority has adopted these high-end solutions to improve safety around port operations.
o School zone safety at drop off and pick up times. Sunshine coast city council in Queensland
Australia has pioneered the use of this new use case to deliver safety around schools and no-
stopping zones around the city.
o On-street Asset mapping to help cities cost effectively capture asset inventory and use it to
manage curbside assets and improve the management of the curb. Toronto Parking Authority,
University of British Columbia and several cities in Australia became the latest cities to use this
technology to create asset maps and manage their curbside.
o Heavy vehicle enforcement in city streets to improve safety on roads. Hills shire council, Ipswich
city council and others have adopted our solar powered, rapidly deployable AI systems to
enforce heavy vehicle movement restrictions in their suburbs.
o Our flag ship product – SenFORCE Mobile Enforcement – set new benchmarks in performance
with the introduction of AI Co-Pilot to assist parking enforcement officers with complete end-
to-end automation of enforcement operations including voice controls to initiate and complete
the mobile parking enforcement operations.
• Through the course of FY23, SenSen has been served with Federal Court of Australia proceedings by the
solicitors for Angel Group Co., Ltd and Angel Australasia Pty Ltd (Angel) and similar proceedings were
served in Philippines whereby it is alleged that SenSen has infringed some of Angel’s patent claims.
SenSen is vigorously defending these proceedings and working with its lawyers to bring crossclaims
against Angel to claim relief for unjustified threats of patent infringement and invalidity of the Angel
patents in suit. The gaming business is a small part of SenSen’s overall business, currently contributing
less than 10% of revenue. The costs for our legal defense are covered under SenSen’s IP insurance.
I extend my gratitude to SenSen’s shareholders for their ongoing support and faith in our Company. I also express
my appreciation to my fellow Board members for their valuable contributions throughout the year, and to our
dedicated staff and management for their diligent efforts in achieving another remarkable financial performance
for FY 2023. What sets this achievement apart is the evident success in fostering growth while managing costs
effectively, thereby establishing a solid foundation for profitability in FY24 and beyond.
I am eager to continue leading our company and to keep our shareholders informed of our progress as we
advance towards realizing our strategy of growth with profitability.
Sincerely,
Dr Subhash Challa, Executive Chairman and CEO
SenSen Annual Report FY2023
sensen.ai
4
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.
SenSen Annual Report FY2023
sensen.ai
5
FINANCIAL SUMMARY
Financial Result
SenSen Networks Limited achieved record revenues in FY23 of $10.8M with 18% growth year-on-
year proforma basis, along with profitability improving by 39% with losses reducing from $12.1M to
$7.4M as the company transitioned its operating model to a lower cost, efficient and scalable
model.
SenSen’s ongoing near-zero churn rate and a customer net retention rate (NRR) of 95% reflect the
value achieved through ongoing customer relationships with a continually growing portfolio of global smart cities,
fuel retailers, infrastructure providers and gaming venues.
The operating loss represents a 39% improvement on the prior year loss underscoring the
company’s aggressive cost management combined with strong revenue growth. Staff costs
reduced by $0.9M or 10% despite most headcount reductions taking place mid-year with further
reductions post year end, thus setting the company up for further advances towards profitability
going forward.
Gross margin improved by 7% from 62% to 69% showing the benefits of continued growth in
recurring revenue.
The Company recorded a net operating cash outflow for the year of $4.8M down from $7.9M driven
by record customer receipts of $11.2M (FY22: $8.9M) and a reduction in payments to suppliers and
employees to $17.8M down from $18.6M.
As shown in the chart below, actions taken in Q2 FY23 to restructure the business to improve
internal efficiencies have re-set the trajectory of operating cost outflows. This lower ongoing cost
base - combined with a leaner, more efficient organisation and continued strong revenue growth -
puts the Company’s objective of achieving cash flow positivity in FY24 within sight.
SenSen Annual Report FY2023
sensen.ai
6
FINANCIAL SUMMARY
Smart Cities Update
The City Councils market segment continues to be the Company’s primary revenue source and growth
driver. To further consolidate SenSen’s position in the market and accelerate revenues, SenSen has
invested significantly to create solutions that not only capture emerging market opportunities for short
term revenue generation but also become our economic moat: the business's ability to maintain
competitive advantages over competitors to protect long-term profits and market share.
In April 2023, SenSen won a Transport for NSW Road Condition Monitoring contract to perform cost-
effective road condition monitoring using low-cost sensors. The new technology is undergoing trials over
200km of road with varying conditions in NSW. This highly disruptive innovation is expected to lead to
strong revenue growth in AI-powered asset audits using low-cost sensing.
SenSen has been actively developing a related product SenMAP, an AI-based asset audit solution, to
detect, classify and determine the GPS location of street signs, parking signs, fire hydrants, meters,
furniture and more, that has now been adopted by several cities globally. SenMAP
(https://youtu.be/eeXV0_RwHzY) is currently used by Brisbane, Sunshine Coast, Gold Coast, Vancouver,
Chicago, Toronto and now TfNSW.
In FY23, SenSen saw continued growth with existing and new customers in all global areas of business
focus:
Australia - In FY23 SenSen implemented various parking enforcement and citizen safety AI solutions in
new Council customers including Adelaide, Cockburn, Mackay, and Toowoomba. Existing Council
customers such as Brisbane, Sunshine Coast and Logan City all expanded their contracts in FY23 with
additional systems delivering significant additional revenue to SenSen.
In FY23, the Company continued adding to the national roll-out across the domestic retail fuel market with
~430 locations now using SenSen’s anti-fuel theft solution.
Canada – the “cluster effect” seen in South East Queensland whereby neighboring councils adopt the
same SenSen technology, has been replicated in Canada. The Company announced the signing of the City
of Vancouver, as well as neighboring city Abbotsford to long-term contacts bringing the total number of
Canadian cities using SenSen’s Smart Cities solutions to nine cities, to also include Calgary, Edmonton,
Toronto, Ottawa, Whitby, Banff and Kitchener.
USA – The City of Las Vegas extended the SenSen contract for an additional three years and ordered two
new systems to deliver advanced automation through AI for their mobile enforcement operations.
Additionally, roll-out of SenSen technology is currently underway at the Las Vegas Airport, the Company’s
first US Airport customer. Our multi-camera person of interest tracking solution is being implemented on
a 4000-camera network.
Chicago Parking Meters extended their contract in FY23 with additional systems delivering significant
additional revenue to SenSen.
SenSen received several new orders from leading hospital chains and school districts in the USA to assist
security operations and improve safety of patients and children including deployments in California,
Pennsylvania, and Oklahoma. These contracts are a combination of direct sales to customers and via
distribution partners/resellers.
SenSen Annual Report FY2023
sensen.ai
7
FINANCIAL SUMMARY
SenSen participated in North America’s leading parking and mobility conference in Dallas, Texas, June 11–
14 2023. Multiple customer and partner opportunities emerged out of this participation and we expect
strong growth in new customer acquisitions in FY24.
Asia – In the Philippines, off the back of the Q4 FY22 expansion of Solaire Casino’s use of SenSen’s gaming
tables solution, the Company continued to expand the number of tables within the Solaire group in FY23,
adding both upfront and recurring monthly revenues.
In Singapore, two projects that SenSen won for deploying sensor AI solutions for safety of people and
traffic within the Port of Singapore were well underway in FY23. Successful completion of these high-
profile projects is expected to lead to further projects within the seaports market.
Fuel Retail Market Update
Throughout the year our customer base has expanded with notable additions including Liberty Oil, Atlas
Fuel, and various independent fuel retail chains. The partnership with Chevron continues, where SenSen
supports their smart surveillance network upgrades and the deployment of our Scancam system in over
110 Caltex-branded Chevron sites proving instrumental in their loss prevention strategy. The results speak
for themselves, with the Scancam system preventing potential theft worth millions of dollars and aiding in
the recovery of unpaid fuel debts.
A new solution, Fuel Theft Recovery (FTR), was introduced to the fuel retail market in the June Quarter.
This is a significant development as it provides a quick and frictionless entry point for SenSen’s solutions to
be accessed by fuel retailers. This new SaaS offering not only provides a new revenue stream for the
company, it also establishes the foundation to upgrade the solution to Scancam, our market leading fuel
theft prevention solution using cameras and proprietary AI software.
The Company worked with QuickFuel, a leading Point-of-Sale (POS) provider to the fuel retail industry to
successfully launch our POS integration. QuickFuel's widely adopted POS platform, used by thousands of
fuel retailers nationwide, seamlessly integrates our system at the front counter, enabling retailers to
effortlessly report fuel theft incidents to our platform with a simple push of a button. Through our
dedicated Fuel Recovery Services, retailers can benefit from streamlined debt recovery solutions,
effectively reducing losses associated with fuel theft.
A new patent was also granted for this solution:
Country
Australia
Patent No.
2021200700
Granted Date
8 June 2023
Priority Date
9 March 2015
Title
Vehicle fuel theft mitigation system
and method
Security and Surveillance Systems Market Update
SenSen has a growing number of clients for our security and surveillance solutions within the US and
Singapore markets. Post our acquisition of SNAP Network Surveillance through the COVID period, we
focused on completing all partially completed deployments. One of these notable clients is Harry Reid
International Airport, Las Vegas with over 4000 cameras running the SenTRACK solution. We also
completed implementation of our solution in multiple schools, hospitals and universities. SenSen has been
able to re-establish momentum and presence within the partner and end user community and establish a
rapidly growing pipeline of opportunities for this solution. We anticipate strong growth for this solution in
the US market in the coming months on the back of this foundational effort.
SenSen Annual Report FY2023
sensen.ai
8
FINANCIAL SUMMARY
With end customers like Singapore Police, Immigration Check Point Authority, Changi International
airport, Land Traffic Authority and more recently the Ports Singapore Authority, SenSen has solutions in all
major government organisations within Singapore. We have recently developed and introduced Sea Port
AI solutions for automating safety operations in relation to traffic safety and lashing/unlashing of
containers. We expect further orders in this regard and growth in adoption of our solutions in the broader
Singapore market in the coming months and years.
Casino Gaming Update
SenSen won new contracts worth over USD$1M (~A$1.53M) in FY23 that included a new three-year
US$969k contract (~A$1.44M) contract with a new Asian casino and a contract for a paid trial of US$60k
(~A$89k) with an independent casino in Asia. SenSen has further strengthened its gaming patent portfolio
with the granting of the following five patents in the last six months and the portfolio now comprises
three granted patent families in multiple countries. Protection in further countries for these patent
families is ongoing.
Country
Australia
Patent No.
2018344762
Granted Date
5 January 2023
South Korea
2501264
14 February 2023
USA
Chile
11,580,746
14 February 2023
66561
7 March 2023
Japan
7246382
16 March 2023
Title
System and Method for Machine Learning-Driven
Object Detection
System and Method for Machine Learning-Driven
Object Detection
System and Method for Automated Table Game
Activity Recognition
System and Method for Machine Learning-Driven
Object Detection
System and Method for Machine Learning-Driven
Object Detection
Focus on Product and IP consolidation
For many years, SenSen was heavily focused on developing new technologies, and feature sets to deliver
suites of allied services to our customers. There has been a significant focus on R&D including creating
defensible IP and highly differentiating products and solutions.
In FY23, the Company shifted focus to consolidation of products, simplifying deployment and support
solutions at scale and the SenSen software platform, SenDISA, has been updated to support new lower
cost hardware and new AI/ML architectures.
Our customers are now able to use our solution in various configurations to solve their unique problems in
a highly flexible and cost-effective manner including:
AI on wheels, AI on solar, AI on poles, AI on drones, AI in the cloud & on the Edge.
After ongoing development for several years, the Company launched several new products/solutions in
FY23 which are expected to diversify and grow the revenue base going forward. These include innovations
in both software and modelling (AI, large language models) and hardware (solar power, mobile devices)
which add significant depth to the Company’s intellectual property position including:
SenSen Annual Report FY2023
sensen.ai
9
FINANCIAL SUMMARY
• AI Co-Pilot for Mobile Enforcement – This new feature automates manual operations undertaken by
rangers when driving the vehicle mounted enforcement solutions improving their safety and efficiency.
This is now operational in Chicago and it will be progressively introduced to other customers over the next
few months generating additional SaaS revenues from existing customers for AI Co-Pilot software license.
• AI and Solar powered school zones enforcement – School zones quickly turn into war zones during
children drop-off and pick-up times at schools, routinely exposing children and parents to road rage and
harm. To address this menacing problem, SenSen launched a School Zone Enforcement solution using its
patented pole insertable, solar powered wifi/4G cameras and our privacy first, live awareness AI solution.
This was launched in collaboration with Sunshine Coast City Council at a school delivering unprecedented
capabilities to make children and parents safer around school zones.
•
Fuel Theft Recovery for All Service/Gas Stations – Until now fuel theft recovery has been a privileged
service only available to service station owners who have bought SenSen’s Fuel theft prevention solution,
Scancam. However, with some incredible engineering, we have now made fuel theft recovery available to
all fuel retailers and station owners irrespective of whether they have the Scancam solution or not.
Furthermore, to make it seamless and scale fast, we have integrated this solution into one of the most
widely used point of sale (POS) systems within the Fuel Industry: QuickFuel. Within a month of its launch,
the solution has been adopted by 10 service stations. With this innovative addition, SenSen now offers a
complete solution to the fuel theft problem – we can offer theft prevention on its own, fuel theft recovery
on its own or in combination – meeting every customer need within this industry. This spectrum of
offerings is expected to drive rapid growth in customer adoption and revenues to SenSen in coming
months and years.
• Code the Curb with a Smart Phone – Building upon our ground-breaking Gemineye smart phone solution,
SenSen developed a new capability to cost effectively digitize the Curb (known by the industry as “Coding
the Curb” or “Digital Twin”). This solution was launched in collaboration with the City of Toronto in
Canada to digitize its curb, generating upfront and ongoing revenues to SenSen. New customers such as
University of British Columbia, also in Canada, as well as cities in the USA and Australia are now adopting
the solution.
SenSen Annual Report FY2023
sensen.ai
10
FINANCIAL SUMMARY
• AI Curb Enforcement for North America – In collaboration with the City of Vancouver, we have released
our world’s first AI powered fully automated curb ordinance enforcement to support real-time
enforcement operations within North America. While we are world leaders in this space for end-to-end
automation, real- time enforcement within the context of US and Canadian customers needed
customisation. This much needed adaptation, completed and delivered to the City of Vancouver, is
expected to accelerate the solution adoption in North America in the coming months and years.
•
Sea Ports AI – Sea Port operations are one of the most dangerous and mission critical activities in the
global economy. While SenSen won the contract from Ports Singapore Authority via our distributor D-Ron
in FY 2022, project delays on the customer end led to the final solution only being delivered to the
customer in Q4 2023. The trial contract worth over $500K, was for 60 cameras to deliver real time safety
alerts for operations linked to lashing/unlashing of containers and road safety within the port. The port of
Singapore has 1000’s of cameras and the account has significant growth potential. More importantly, this
solution has relevance to ports around the world and SenSen expects to generate more revenue from this
solution in coming years.
These products are not only providing new and high margin revenue streams to the company in the
immediate term, but they are also giving SenSen a significant competitive advantage over competitors in
the segments we conduct business.
SenSen Annual Report FY2023
sensen.ai
11
2023 FINANCIAL STATEMENTS
Financial Report for the year ended 30 June 2023
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
13
30
31
32
33
34
35
71
72
SenSen Annual Report FY2023
sensen.ai
12
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 2023.
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 (resignation effective 31 December 2022)
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
88,523,186 Ordinary shares and nil options over ordinary shares
SenSen Annual Report FY2023
sensen.ai
13
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
16,228,700 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:
Chair 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 FY2023
sensen.ai
14
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.
Ms Scheibenstock resigned from the Board of SenSen effective 31 December 2022.
Special
responsibilities:
Chair of the Audit and Risk Committee up to 31 December 2022
Following is a summary of the SenSen Directors’ Skill Matrix.
Industry knowledge and Expertise
The directors on the board all have experience in the markets SenSen
operates.
Executive Leadership
The board has valuable capability at executive level across a broad
sector
Strategy development and Implementation
Experience in Strategy development and execution at large and small
scales
Investor/Public Relations
Experience in capital markets, IPO, investment, mergers and
acquisitions
Mergers and Acquisitions
Experience in completing DD on mergers and/or acquisitions
Financial Reporting and Management
Senior experience in financial management, reporting and audit
Corporate Governance
Commitment to high standards of corporate governance and legal
compliance
Risk Management
Experience in managing financial and non-financial risk
Human Resource
management experience in employee management, succession planning
and recruitment
Global business experience
Significant international exposure across the globe, particularly North
America, Asia, Europe and Africa
Digital experience / Information technology
Senior experience in technology, especially in software innovation and
digital technology and oversight of implementation of major technology
projects
SenSen Annual Report FY2023
sensen.ai
15
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 the following 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 2023 financial year (2022: no dividend declared).
Operating and financial review
Information on the operations of the Group, its business strategies and prospects is set out in the Chairman’s
Letter on page 3. The focus of the last year has been to consolidate the business on a common platform in
order to gain efficiencies across SenSen’s product suite. This has included aligning the staffing structure with
the common platform while at the same time focusing on providing customers with standardised solutions
that can be scaled. With this streamlined operating model, the Company feels it has a platform which is both
scalable and agile enough to meet the needs of the Company’s ever growing and loyal customer base.
Operating Results
The Group’s net loss after tax was $7,409,184 (2022: Loss of $12,075,161). The loss for the year includes a
non-cash share-based payment expense of $207,749 (2022: $3,173,353). This result has been achieved
through a combination of revenue growth, growing margins through higher recurring revenue, and revision of
the Company’s operating structure and consequentially cost base to provide a more efficient operating
structure.
Share based payments were significantly lower in the current year largely due to FY22 share based payments
including a portion of both FY21 and FY23 incentives due to the three-year nature of the Company’s long
term incentive plan.
Financial position
The Group’s net asset position was $5,877,628 (2022: $12,317,121). Depreciation and Amortisation
contributed $1,474,651 to the reduction, of which $959,548 related to amortisation of intangible assets.
The other significant change in net assets was through cash used in operations, with closing cash of
$1,897,681 (2022: $6,213,860). As the company transitions to cash flow positivity the company had a net
operating cash outflow of $4,784,213 (2022: $7,887,262). The company, through its actions in streamlining
its operating model and building a strong pipeline of prospects, remains focused on achieving cash flow
positivity in FY24.
Shares
The following shares were issued during the year:
No. of Shares
Balance as of 1 July 2022
- Shares issued in deferred consideration for the acquisition of Scancam
Industries Pty Ltd on 7 November 2022
- Shares issued to ESOP LTI on 9 December 2022
- Shares issued for May 2023 payroll on 1 June 2023
Balance as of 30 June 2023
651,142,760
8,878,490
18,641,485
569,614
679,232,349
SenSen Annual Report FY2023
sensen.ai
16
DIRECTORS’ REPORT
Shares under option
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 in prior years 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.
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
During the year the company has simplified its structure and consolidated its business in line with a single
platform strategy, which now provides a scalable platform from which to grow the business without
significant cost increases.
Events after the Reporting Period
In July 2023 all remaining staff who joined SenSen as part of the Scancam acquisition in July 2021 were
made redundant. This was done as part of an effort to fully integrate the Scancam business into SenSen
and gain cost efficiencies through centralised management. As a result of all Western Australian based
staff leaving the business, the Perth office was also closed.
Following the release of audited financial statements the company is due to settle the second and final
deferred consideration amount payable to former shareholders of Scancam which was acquired in July
2021. Consideration for this settlement is expected to be via a share issue of 17,036,806 fully paid ordinary
shares.
Likely developments and review of operations
Comments on likely developments and review of operations of the Group are included in the Chairman’s
letter.
SenSen management is constantly looking a ways to improve efficiency and enhance the products and
customer experience achieved through customer interactions with SenSen. During the year the Company
developed a number of new products which expand the scope and scenarios under which SenSen products
can operate. Further the company was able to align its internal structure with a common platform strategy
allowing all products to be supported more efficiently and to deliver a consistent customer experience.
Subsequent to year end the company has moved to incorporate the management of Scancam, a third party
acquisition in July 2021, more closely into the SenSen structure and achieved cost savings and increase
efficiency in doing so.
Management continue to look for opportunities to help achieve efficient and sustainable growth.
SenSen Annual Report FY2023
sensen.ai
17
DIRECTORS’ REPORT
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
Sustainability
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.
The impact a business makes on the environment
in which it operates is a key focus for all
businesses. The impact of a company’s actions
can impact many facets of its operations.
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.
The Company is constantly looking for ways
to reduce its impact on the environment. This
is done by focussing on the minimum
resources required to run the company, be it
floor space, IT equipment, server usage or
other resources consumed.
Public perception
impacts on customers
The general public is becoming increasingly vocal
about privacy and the impacts of technology on
day to day lives. The impact of a public relations
issue may influence SenSen customers use of our
products.
The Company continuously monitors news
and industry information for any exposure to
potential perception issues and is quick to
address any performance issue that may
provide the catalyst to a perception issue.
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.
Directors’ Meetings
The Company held nine Directors’ meetings during the year and three Audit and Risk Committee meetings.
The attendances of the directors in office during the year at meetings of the Board and Committees were:
SenSen Annual Report FY2023
sensen.ai
18
DIRECTORS’ REPORT
Director
Board of Directors
Audit and Risk Committee
Subhash Challa
David Smith
Zenon Pasieczny
Heather Scheibenstock
Number
Eligible to
attend
9
9
9
5
Number Attended
Number Eligible to
attend
Number Attended
8
9
8
5
3
3
3
2
3
3
3
2
Remuneration Report (Audited)
The Directors are pleased to present the Company’s 2023 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 2023
Mr Subhash Challa, Executive Chairman
Mr Zenon Pasieczny, Non-Executive Director
Mr David Smith, Executive Director
Mr Christian Stevens, Chief Financial Officer (appointed 12 September 2022)
Mrs Heather Scheibenstock, Executive Director (resignation effective 31 December 2022)
Mr Jonathan Cook, Chief Financial Officer (resignation effective 12 September 2022)
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”).
SenSen Annual Report FY2023
sensen.ai
19
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
The payment of LTIs is conditional on the achievement of set performance criteria as outlined in detail
later in the Remuneration Report.
(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 $400,000 and was approved
by shareholders at the 2017 annual general meeting held on 30 November 2017.
(g) Voting and comments made at the company’s 2022 Annual General Meeting
SenSen Networks Limited received more than 99.32% of ‘yes’ votes on its remuneration report for the
2022 financial year. The company did not receive any specific feedback at the AGM or throughout the
year on its remuneration policies.
(h) Group’s performance and link to remuneration
In considering the consequences of the Company’s performance on shareholder wealth the Board is
focused on total shareholder returns. The Company’s Long-Term Incentive Plan is heavily performance
based and the vesting of Key Management Personnel and staff options is dependent on the company
meeting specific revenue targets.
The factors that are considered to affect shareholder return in the past 5 years are summarised below:
Measures
Share price at end of financial year
Market capitalisation at end of financial year ($M)
2023
$
2022
$
2021
$
2020
$
0.050
$34.0
0.073
$47.5
0.150
$74.5
0.070
$31.3
2019
$
0.087
$36.4
Net Profit/(loss) for the financial year
(7,409,184)
(12,075,161)
(3,021,747)
(3,705,235)
(5,277,798)
Director and Key Management Personnel
remuneration
1,243,308
2,562,297
1,167,619
1,182,298
1,544,576
SenSen Annual Report FY2023
sensen.ai
20
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(i) Details of Remuneration
2023
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
Salary
sacrifice
shares
$
$
$
$
$
$
$
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock1
Other key
management
personnel
C Stevens (CFO) 2
J Cook
(former CFO) 3
351,515
292,417
57,600
123,380
143,339
64,771
1,033,022
-
-
-
-
-
-
-
38,182
28,875
6,048
11,550
15,667
4,463
4,206
-
-
-
-
-
34,071
28,343
13,807
11,486
-
-
-
-
441,781
361,121
63,648
134,930
7,040
6,550
172,596
-
-
69,234
104,785
4,206
69,454
31,843
1,243,310
7.7%
7.8%
-
-
4.1%
-
5.6%
1 H Scheibenstock resigned on 31 December 2022. The remuneration shown here is for the period from 1 July 2022 to the date of
resignation.
2 C Stevens was appointed on 12 September 2022. The remuneration shown here is for the period from appointment to 30 June 2023.
3 J Cook resigned on 12 September 2022. The remuneration shown here is for the period from 1 July 2022 to the date of resignation.
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
Salary
sacrifice
shares
$
$
$
$
$
$
$
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock
Other key
management
personnel
353,030
293,750
56,000
218,333
J Cook (CFO)
220,000
1,141,113
-
-
-
-
-
-
35,303
27,083
5,560
21,833
22,000
29,137
485,111
-
-
-
-
394,785
-
238,727
161,645
1,280,26
8
111,779
29,137
-
-
-
-
-
-
902,581
715,618
61,560
478,893
53.7%
55.2%
-
49.8%
403,645
40.05%
2,562,297
50.0%
SenSen Annual Report FY2023
sensen.ai
21
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 2023. No options over ordinary shares were issued as part of compensation
to key management personnel during the years ended 30 June 2022 or 30 June 2023.
Salary Sacrifice Share Scheme
In May 2023 the company launched an employee salary sacrifice share scheme whereby management were invited
to sacrifice 20% of their salary in exchange for SenSen shares. In addition to the 20%, employees entering into the
plan also received an additional 2% of their monthly salary as shares. 569,614 shares were issued under this plan
in June.
The plan commenced on 1 May 2023 and has an end date of 30 June 2024, however the company retains the
option to terminate the plan at any time, and employees retain the right to opt out of the plan throughout its duration.
As at 30 June 2023, $31,843 has been recognised as a share based payment to key management personnel under
this scheme.
Share Rights
A 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
Grant dates 1
Service Revenue Target
Target measures
2020/2021
2021/2022
2022/2023
29/07/21 – 25/08/21
29/07/21 – 25/08/21
29/07/21 – 29/08/22
50%
50%
50%
40%
40%
40%
1 For the different relative executives
Revenue
Stretch
20%
20%
20%
EBITDA
10%
10%
10%
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:
SenSen Annual Report FY2023
sensen.ai
22
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
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 based on the relevant percentage of the executive’s salary.
Share‑based compensation
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
30
June
2023
excl
Super)
S Challa
D Smith
C Stevens
(CFO)
25/08/2021
25/08/2021
29/08/2022
$363,636 50%
$302,500 50%
$176,000 40%
$218,182
$181,500
$84,480
1 Excludes any further discretionary grants that may be awarded each year.
SenSen Annual Report FY2023
sensen.ai
23
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
2021 Tranche Summary
Name
Potential
value of LTI
Shares each
year
S Challa
D Smith
H
Scheibenstock
J Cook (CFO)
$218,182
$181,500
$118,800
$105,600
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). The shares for the 2021 tranche were issued during the 2023 financial year.
2 Discretionary grant related to an additional grant of equity instruments as decided by the board.
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)
2022 Tranche Summary
Target $
Actual Result
Target met?
$5,532,537
($2,280,897)
($2,280,897)
Yes
Yes
No
Name
Potential
value of
LTI
Shares
each
year
S Challa
D Smith
H
Scheibenstock
J Cook (CFO)
$218,182
$181,500
$118,800
$105,600
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
-
2,375,124
1,975,806
1,293,255
$9,405
$84,645
1,128,299
1 Final number of shares to be issued was determined based on a five-day VWAP of the Company’s share price prior to the lodgment
of the 30 June 2022 Annual Report. The shares for the 2022 tranche were issued during the 2023 financial year
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 were met and the EBITDA target was not 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 FY2023
sensen.ai
24
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
2023 Tranche Summary
Name
Potential
value of
LTI
Shares
each year
Service
Revenue EBITDA
Tranche 3 - 2023
Revenue
– Stretch
Discretionary
Grant
Total 2
Shares
issued
1
50%
40%
10%
20%
N/A
S Challa
D Smith
H
Scheibenstock
C Stevens
(CFO)
J Cook (CFO)
$218,182
$181,500
$118,800
$105,600
$218,182
$90,909
$75,625
-
-
-
-
-
-
-
-
$18,182
$15,125
-
$7,040
-
-
-
-
-
-
-
-
-
-
109,091
$90,750
-
$7,040
-
-
-
-
-
-
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. These shares will be issued in the 2024 financial year.
2 This amount represents the proportionate expense related to the 2023 year.
In respect of the service element above for 2023 S Challa and D Smith will have served greater than 3 years and were
entitled to the full ‘Service Target’ grant. C Stevens was appointed CFO on 12 September 2022, and as such will not
achieve the minimum one year “Service Target” grant.
For 2023 the EBITDA target was met, however the Revenue and Revenue Stretch targets were not achieved as shown
below:
Target Measure
Revenue
EBITDA
Revenue Stretch
$11,431,779
($7,875,558)
$12,346,321
Target $
Actual Result
Target met?
10,796,523
(5,509,652)
10,796,523
No
Yes
No
Summary of Total LTI Remuneration
Name
S Challa
D Smith
C Stevens
(CFO)
Grant
Date
25/08/2021
25/08/2021
29/08/2022
Total 30 June
2023 LTI
Remuneration1
$109,091
$90,750
$7,040
LTI Expense
recognised in
this period
$34,071
$28,343
$7,040
1 Includes portion of expense recognised on a pro-rata basis in the prior period.
(k) Key Management Personnel Shareholdings
(i) Option holdings of key management personnel in SenSen Networks Limited
2023
Balance at 1
July 2022
Granted as
remuneration
S Challa
D Smith
-
-
-
-
Options
forfeited
or lapsed
-
-
Balance
as at 30
June 2023
-
-
Total
Vested
-
-
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
-
-
Total
Non-
vested
-
-
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.
SenSen Annual Report FY2023
sensen.ai
25
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(ii) Shareholdings of key management personnel in SenSen Networks Limited
2023
Balance at 1
July 2022
Shares issued as
remuneration 1
Shares issued
on exercise of
options
Other changes
during
the year
Balance held at
30 June 2023
Directors
S Challa
D Smith
Z Pasieczny
H Scheibenstock
Other KMP
C Stevens (CFO)
J Cook (CFO)
Total
86,148,062
13,852,894
47,126,259
1,188,485
-
2,341,667
150,657,367
2,375,124
1,975,806
-
1,293,255
69,3912
1,128,299
6,841,875
-
-
-
-
-
-
-
-
400,0004
-
(2,481,740)3
(3,469,966)3
88,523,186
16,228,700
47,126,259
-
69,391
-
(1,951,702)
151,947,536
1 Includes shares issued in the 2023 financial year related to a grant that was expensed in 2022.
2 69,391 shares provided as remuneration to C Stevens under the Company’s salary sacrifice share plan.
3 Shareholding at date of ceasing to be KMP.
4400,000 shares acquired by D Smith via on market purchases.
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
1,205,574
6,663,907
86,148,062
13,852,894
47,126,259
1,188,485
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.
None of the shares above are held nominally by the directors or any of the other key management
personnel.
(l) Loans from key management personnel
Details of loans made with key management personnel during the year ended 30 June 2023 are as follows:
(2022: nil).
At year end the company had a drawn loan facility of $500,000 with Subhash Challa. During the year the
loan was drawn down by $200,000 and repaid with $1,129 interest in January 2023. The company then
drew down a further $500,000 on this same loan facility in March 2023 which remains in place as at 30
June 2023 with accrued interest of $8,380. The loan incurs an interest rate of 0.5% per annum below the
company’s better business loan floating rate with CBA. The loan has no fixed maturity date.
SenSen Annual Report FY2023
sensen.ai
26
DIRECTORS’ REPORT
Remuneration Report (Audited) (cont’d)
(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 2023 or 30 June 2022.
(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
2023 financial year are set out below:
Director / KMP
Terms of
Agreement
S Challa
D Smith
Z Pasieczny
C Stevens
H Scheibenstock
J Cook
Ongoing
Ongoing
Ongoing
Ongoing
Resigned
31/12/22
Resigned 12/9/22
Base salary
including
superannuation
$401,818
$334,263
$63,648
$194,480
$243,100
Termination
benefit
6 Months
6 Months
Not Applicable
1 Month
1 Month
Notice period
6 Months
6 Months
Not Applicable
1 Month
1 Month
$243,100
1 Month
1 Month
End of Remuneration Report (Audited)
SenSen Annual Report FY2023
sensen.ai
27
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 FY23, 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 2023 Corporate Governance Statement is available at sensen.ai/CorporateGovernance.
SenSen’s 2023 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 30.
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
Other compliance services
$
69,774
58,000
127,774
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.
SenSen Annual Report FY2023
sensen.ai
28
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: 29 Sep 2023
SenSen Annual Report FY2023
sensen.ai
29
AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek Street
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 2023, 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, 29 September 2023
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.
SenSen Annual Report FY2023
sensen.ai
30
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 2023
Note
3
3
3
4
4
4
4
4
29
5
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
Other expenses
Finance cost
Occupancy cost
Staff costs
Technology costs
Depreciation & Amortisation
Share based payments
Fair value gain or loss
Loss before income tax
Income tax (expense)/benefit
Loss for the period
Loss attributable to members of the parent
entity
Other comprehensive income
Items that may be reclassified to profit or
loss
Exchange differences on translation of
foreign operations
Other comprehensive income
Consolidated
2023
$
2022
$
10,796,523
(3,313,999)
7,482,524
2,528,661
7,455
(1,302,399)
(501,113)
(3,420,530)
(470,333)
(256,417)
(7,993,865)
(1,627,243)
(1,474,651)
(207,749)
(147,859)
(7,383,519)
(25,665)
(7,409,184)
9,145,423
(3,512,830)
5,632,593
2,977,606
8,632
(970,256)
(816,010)
(3,639,972)
(262,408)
(410,221)
(8,868,494)
(1,511,697)
(1,113,063)
(3,173,353)
(153,565)
(12,300,208)
225,047
(12,075,161)
(7,409,184)
(12,075,161)
(7,409,184)
(12,075,161)
138,672
138,672
(26,101)
(26,101)
Total comprehensive income for the
(7,270,512)
(12,101,262)
year
Loss per share:
Basic and diluted loss per share (cents)
6
(1.11)
(1.99)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
SenSen Annual Report FY2023
sensen.ai
31
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Consolidated Statement of Financial Position As at 30 June 2023
Note
2023
$
2022
$
Consolidated
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
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
20
19
18
16
21
18
16
22
23
1,897,681
1,467,415
424,229
485,731
3,011,208
7,286,264
1,689,804
5,632,016
1,295,479
38,720
396,071
9,052,090
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
16,338,354
20,517,605
3,217,654
1,103,746
887,154
665,601
286,880
3,101,458
9,262,493
107,446
1,090,787
1,198,233
2,687,732
1,156,667
1,362,565
652,314
185,428
1,954,375
7,999,081
18,577
182,826
201,403
10,460,726
8,200,484
5,877,628
12,317,121
59,906,517
4,397,166
(58,426,055)
5,877,628
57,856,852
5,477,140
(51,016,871)
12,317,121
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
SenSen Annual Report FY2023
sensen.ai
32
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Consolidated
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 (see note 22)
Transfer from reserves (note 22)
Total transactions with owners for the
period
Balance at 30 June 2022
Balance at 1 July 2022
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 23 and 30)
Transfer from reserves (note 22 and 23)
Total transactions with owners for the
period
Balance at 30 June 2023
Issued
Capital
$
Accumulated
Losses
Reserves
$
$
Total
Equity
$
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
57,856,852
(51,016871)
5,477,140
12,317,121
-
-
-
(7,409,184)
-
(7,409,184)
-
138,672
138,672
(7,409,184)
138,672
(7,270,512)
623,270
-
1,426,395
2,049,665
-
-
-
-
-
207,749
(1,426,395)
(1,218,646)
623,270
207,749
-
831,019
59,906,517
(58,426,055)
4,397,166
5,877,628
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
SenSen Annual Report FY2023
sensen.ai
33
CONSOLIDATED STATEMENT OF CASH
FLOWS
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
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
2023
$
2022
$
11,198,917
8,923,889
(17,835,452)
(18,644,466)
7,455
(342,617)
2,187,484
-
8,632
(125,957)
1,950,640
-
Net cash used in operating activities
9(a)
(4,784,213)
(7,887,262)
Cash flows from investing activities
Payment for acquisition of subsidiary, net of cash acquired
Purchase of plant and equipment
Deposits
Net cash used in investing activities
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
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
14
22
22
9(b)
9(b)
9(b)
-
(1,080,000)
(151,016)
(40,824)
(253,996)
(107,219)
(191,840)
(1,441,215)
-
-
(249,011)
2,722,119
9,996,492
(352,076)
(398,542)
2,300,000
(1,813,234)
(1,180,000)
659,874
10,365,874
(4,316,179)
6,213,860
1,037,397
5,176,463
Cash and cash equivalents at end of financial year
8
1,897,681
6,213,860
The above Consolidated Statement of Cashflows should be read in conjunction with the accompanying notes.
SenSen Annual Report FY2023
sensen.ai
34
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 JUNE 2023
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 29 September 2023 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
2023 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 2023 of $4,784,213 (30 June 2022: $7,887,262) and as at 30 June 2023 has a net asset position of
$5,877,628 (30 June 2022: $12,317,121) and net current asset deficiency of $1,976,229. The Group also generated a
loss after tax for the year ended 30 June 2023 of $7,409,184 (30 June 2022: $12,075,161).
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;
The ability to continue to benefit from the Australian government Research and Development grant in the near
term; and
The ability of the Group to raise sufficient capital as and when necessary. Refer to Note 22 for capital raises
completed.
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; and
The Group has demonstrated the ability to raise capital when required.
SenSen Annual Report FY2023
sensen.ai
35
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
(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 installation). 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.
SenSen Annual Report FY2023
sensen.ai
36
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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 2023.
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.
SenSen Annual Report FY2023
sensen.ai
37
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 2023
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.
(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 Annual Report FY2023
sensen.ai
38
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
(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.
SenSen Annual Report FY2023
sensen.ai
39
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
Computer equipment
Furniture and equipment
Depreciation rate per annum
33 – 50%
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
SenSen Annual Report FY2023
sensen.ai
40
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.
SenSen Annual Report FY2023
sensen.ai
41
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.
SenSen Annual Report FY2023
sensen.ai
42
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.
SenSen Annual Report FY2023
sensen.ai
43
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:
(i) 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.
SenSen Annual Report FY2023
sensen.ai
44
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Significant estimates and judgements
(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) 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.
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).
The Retail segment is made up of the Scancam business for which the costs associated with this business are easily
identifiable and separately tracked. This business accesses the retail fuel sales market.
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.
SenSen Annual Report FY2023
sensen.ai
45
p
e
r
i
o
d
f
o
r
t
h
e
N
e
t
l
o
s
s
b
e
f
o
r
e
t
a
x
&
I
n
t
e
r
e
s
t
O
v
e
r
h
e
a
d
s
O
t
h
e
r
I
n
c
o
m
e
S
e
g
m
e
n
t
C
o
n
t
r
i
b
u
t
i
o
n
1
,
3
5
1
,
5
6
6
5
6
8
,
1
0
0
(
6
3
7
,
8
8
3
)
(
4
,
5
6
4
,
2
7
4
)
(
4
,
0
5
7
,
9
3
9
)
(
7
,
3
8
3
,
5
1
9
)
(
1
4
3
,
9
9
2
)
(
4
5
8
,
2
1
2
)
(
9
8
7
,
3
4
3
)
(
4
,
,
8
2
1
1
4
7
)
(
5
,
8
8
9
,
5
1
4
)
(
1
2
,
3
0
0
,
2
0
8
)
(
2
,
2
6
3
,
1
9
3
)
(
1
,
0
5
5
)
(
1
,
4
0
6
,
3
4
4
)
(
4
7
6
,
6
8
5
)
(
5
,
2
6
1
,
0
1
7
)
(
9
,
4
0
8
,
2
9
4
)
(
1
,
7
8
6
,
1
0
7
)
(
2
6
7
,
8
7
5
)
(
1
,
,
2
7
2
3
4
8
)
(
2
0
8
,
7
6
8
)
(
7
,
4
4
6
,
0
7
7
)
(
1
0
,
9
8
1
,
1
7
5
)
2
,
5
3
6
,
1
1
6
2
,
5
3
6
,
1
1
6
2
,
9
8
6
,
2
3
7
2
,
9
8
6
2
3
7
,
3
,
6
1
4
,
7
5
9
5
6
9
,
1
5
5
7
6
8
,
4
6
1
(
4
,
0
8
7
,
5
8
9
)
(
1
,
3
7
6
,
1
2
7
)
(
5
1
1
,
3
4
1
)
1
,
6
4
2
,
1
1
5
(
1
9
0
,
3
3
7
)
2
8
5
,
0
0
5
(
4
,
,
6
1
2
3
7
8
)
(
1
,
4
2
9
,
6
7
5
)
(
4
,
3
0
5
,
2
7
1
)
S
t
a
f
f
C
o
s
t
s
(
1
,
6
5
9
,
6
7
1
)
(
2
4
7
,
4
4
8
)
(
6
2
3
,
0
3
0
)
(
4
,
0
8
7
,
5
8
9
)
(
1
,
3
7
6
,
1
2
7
)
(
7
,
9
9
3
,
8
6
5
)
(
2
,
1
5
4
,
1
3
1
)
(
7
6
3
,
8
8
4
)
(
9
7
7
,
7
9
5
)
(
4
,
,
6
1
2
3
7
8
)
(
1
,
4
2
9
,
6
7
5
)
(
9
,
9
3
7
,
8
6
3
)
O
v
e
r
T
m
e
i
4
,
7
8
3
,
7
3
6
8
5
4
,
7
7
1
1
,
4
3
7
,
1
2
7
P
o
n
t
i
i
n
T
m
e
i
2
,
2
9
6
,
6
6
8
6
,
6
9
8
1
,
4
1
7
,
5
2
3
G
r
o
s
s
P
r
o
f
i
t
5
,
2
7
4
,
4
3
0
8
1
6
,
6
0
3
1
,
3
9
1
,
4
9
1
C
o
s
t
o
f
S
a
e
s
l
(
1
,
8
0
5
,
9
7
4
)
(
4
4
,
8
6
6
)
(
1
,
4
6
3
,
1
5
9
)
T
o
t
a
l
r
e
v
e
n
u
e
7
,
0
8
0
,
4
0
4
8
6
1
,
4
6
9
2
,
8
5
4
,
6
5
0
P
r
o
f
i
t
%
G
r
o
s
s
7
4
.
5
%
9
4
.
8
%
4
8
.
7
%
-
-
-
-
-
r
e
v
e
n
u
e
S
e
g
m
e
n
t
p
e
r
f
o
r
m
a
n
c
e
T
h
e
f
o
l
l
o
w
n
g
i
i
s
a
n
$
C
i
t
i
e
s
S
m
a
r
t
$
$
G
a
m
n
g
i
R
e
t
a
i
l
2
0
2
3
$
O
p
s
P
r
o
d
u
c
t
&
l
a
n
a
y
s
s
o
f
i
t
h
e
G
r
o
u
p
s
’
r
e
v
e
n
u
e
a
n
d
r
e
s
u
l
t
s
b
y
r
e
p
o
r
t
a
b
e
l
s
e
g
m
e
n
t
:
-
-
-
-
-
$
S
e
g
m
e
n
t
R
e
v
e
n
u
e
s
a
n
d
R
e
s
u
l
t
s
2
.
S
E
G
M
E
N
T
R
E
P
O
R
T
N
G
I
(
C
O
N
T
N
U
E
D
I
)
I
N
O
T
E
S
T
O
T
H
E
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
I
C
o
r
p
o
r
a
t
e
C
o
n
s
o
l
i
d
a
t
e
d
$
$
C
i
t
i
e
s
S
m
a
r
t
$
$
G
a
m
n
g
i
R
e
t
a
i
l
2
0
2
2
$
O
p
s
P
r
o
d
u
c
t
&
$
$
C
o
r
p
o
r
a
t
e
C
o
n
s
o
l
i
d
a
t
e
d
(
3
,
3
1
3
,
9
9
9
)
(
2
,
0
8
1
,
3
4
9
)
(
2
5
3
,
6
9
4
)
(
1
,
,
1
7
7
7
8
7
)
7
,
4
8
2
,
5
2
4
3
,
7
9
6
,
2
4
7
5
7
3
,
5
4
7
1
,
2
6
2
8
0
0
,
1
0
,
7
9
6
,
5
2
3
5
,
8
7
7
,
5
9
6
8
2
7
,
2
4
1
2
,
4
4
0
5
8
7
,
7
,
0
7
5
,
6
3
4
4
,
2
3
1
,
7
3
2
3
,
7
2
0
,
8
8
9
1
,
6
4
5
,
8
6
4
2
7
6
,
7
8
9
5
5
0
,
4
5
2
1
,
1
3
4
3
5
7
,
1
,
3
0
6
2
3
0
,
-
-
-
-
-
-
-
-
(
3
,
5
1
2
,
8
3
0
)
5
,
6
3
2
5
9
3
,
9
,
1
4
5
4
2
3
,
5
,
6
4
2
8
7
7
,
3
,
5
0
2
5
4
6
,
6
9
.
3
%
6
4
.
6
%
6
9
.
3
%
5
1
.
7
%
-
-
6
1
.
6
%
N
e
t
A
s
s
e
t
s
(
7
4
1
,
4
2
0
)
4
2
,
5
6
6
2
8
,
0
3
0
5
0
6
,
1
4
9
6
,
0
4
2
,
3
0
3
5
,
8
7
7
,
6
2
8
1
,
4
7
5
,
6
6
3
6
1
,
3
6
2
i
L
a
b
i
l
i
t
i
e
s
(
2
,
1
9
7
,
6
3
8
)
(
2
4
9
,
7
5
4
)
(
6
5
6
,
9
5
8
)
(
2
0
8
,
1
2
8
)
(
7
,
1
4
8
,
2
4
8
)
(
1
0
,
4
6
0
,
7
2
6
)
(
1
,
8
0
0
,
0
1
5
)
(
1
8
,
8
7
2
)
S
e
g
m
e
n
t
a
s
s
e
t
s
&
l
i
a
b
i
l
i
t
i
e
s
A
s
s
e
t
s
1
,
4
5
6
,
2
1
8
2
9
2
,
3
2
0
6
8
4
,
9
8
8
7
1
4
,
2
7
7
1
3
,
1
9
0
,
5
5
1
1
6
,
3
3
8
,
3
5
4
3
,
2
7
5
,
6
7
8
8
0
,
2
3
4
(
2
1
0
,
2
4
2
)
1
,
1
5
3
,
5
2
5
9
4
3
,
2
8
3
(
2
6
6
,
6
9
9
)
(
5
,
,
9
0
4
6
5
6
)
4
0
3
,
8
7
4
9
,
4
3
2
9
3
9
,
6
7
0
,
5
7
3
1
5
,
3
3
7
,
5
9
5
1
2
,
3
1
7
,
1
2
1
(
8
,
2
0
0
,
4
8
4
)
2
0
,
5
1
7
,
6
0
5
$
C
i
t
i
e
s
S
m
a
r
t
$
$
G
a
m
n
g
i
R
e
t
a
i
l
&
O
p
s
P
r
o
d
u
c
t
3
0
-
J
u
n
-
2
3
C
o
r
p
o
r
a
t
e
C
o
n
s
o
l
i
d
a
t
e
d
$
$
C
i
t
i
e
s
S
m
a
r
t
$
$
G
a
m
n
g
i
R
e
t
a
i
l
&
O
p
s
P
r
o
d
u
c
t
3
0
-
J
u
n
-
2
2
C
o
r
p
o
r
a
t
e
C
o
n
s
o
l
i
d
a
t
e
d
$
r
e
p
o
r
t
i
n
g
.
T
h
e
G
r
o
u
p
d
o
e
s
n
o
t
r
e
p
o
r
t
t
h
e
n
e
t
p
r
o
f
i
t
/
(
l
o
s
s
)
o
r
n
e
t
a
s
s
e
t
s
b
y
g
e
o
g
r
a
p
h
c
i
s
t
r
e
a
m
t
o
t
h
e
C
h
e
f
i
O
p
e
r
a
t
i
n
g
D
e
c
s
o
n
M
a
k
e
r
,
i
i
a
n
d
a
s
s
u
c
h
,
t
h
e
s
e
l
b
a
a
n
c
e
s
a
r
e
n
o
t
i
c
o
n
s
d
e
r
e
d
r
e
e
v
a
n
t
l
f
o
r
s
e
g
m
e
n
t
T
o
t
a
l
R
e
v
e
n
u
e
7
,
0
8
0
,
4
0
4
8
6
1
,
4
6
9
2
,
8
5
4
,
6
5
0
-
N
o
r
t
h
A
m
e
r
i
c
a
2
,
3
4
1
,
9
8
8
A
N
Z
A
s
a
i
3
,
9
3
7
,
8
2
2
8
0
0
,
5
9
4
8
6
1
,
4
6
9
-
-
2
,
8
5
4
,
6
5
0
-
-
-
-
-
-
-
-
-
1
0
,
7
9
6
,
5
2
3
5
,
8
7
7
,
5
9
6
8
2
7
,
2
4
1
2
,
4
4
0
,
5
8
6
-
2
,
3
4
1
,
9
8
8
2
,
4
7
2
,
6
6
0
-
-
6
,
7
9
2
,
4
7
2
3
,
1
6
4
,
1
3
1
3
8
9
,
7
1
8
2
,
4
4
0
,
5
8
6
1
,
6
6
2
,
0
6
3
2
4
0
,
8
0
5
4
3
7
,
5
2
3
-
-
-
-
-
-
-
-
9
,
1
4
5
,
4
2
3
2
,
4
7
2
,
6
6
0
5
,
9
9
4
,
4
3
5
6
7
8
,
3
2
8
T
h
e
f
o
l
l
o
w
n
g
i
i
s
a
n
l
a
n
a
y
s
s
i
o
f
t
h
e
G
r
o
u
p
s
’
r
e
v
e
n
u
e
b
y
l
r
e
p
o
r
t
a
b
e
g
e
o
g
r
a
p
h
c
i
s
e
g
m
e
n
t
.
S
E
G
M
E
N
T
R
E
P
O
R
T
N
G
I
(
C
O
N
T
N
U
E
D
I
)
I
N
O
T
E
S
T
O
T
H
E
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
I
G
e
o
g
r
a
p
h
i
e
s
S
e
g
m
e
n
t
p
e
r
f
o
r
m
a
n
c
e
R
e
v
e
n
u
e
$
C
i
t
i
e
s
S
m
a
r
t
$
G
a
m
n
g
i
R
e
t
a
i
l
2
0
2
3
$
&
O
p
s
P
r
o
d
u
c
t
$
$
C
o
r
p
o
r
a
t
e
C
o
n
s
o
l
i
d
a
t
e
d
$
C
i
t
i
e
s
S
m
a
r
t
$
$
G
a
m
n
g
i
R
e
t
a
i
l
2
0
2
2
$
&
O
p
s
P
r
o
d
u
c
t
$
$
C
o
r
p
o
r
a
t
e
C
o
n
s
o
l
i
d
a
t
e
d
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
Research and Development Grant
Total Other Income
Consolidated
30-Jun-23
$
30-Jun-22
$
3,720,889
7,075,634
3,502,546
5,642,877
10,796,523
9,145,423
7,455
2,528,661
8,632
2,977,606
2,536,116
2,986,238
Total revenue and other income
13,332,639
12,131,661
4. EXPENSES
Interest and fees paid on finance facilities
Total Finance costs
Administration expense
Insurance
Travel
Other administration expenses
Total Administration expense
Staff Costs
Note
Consolidated
2023
$
470,333
470,333
407,741
570,626
324,032
1,302,399
2022
$
262,408
262,408
380,669
373,350
216,237
970,256
Contributions to defined contribution superannuation funds
(a)
481,280
491,282
Wages & other staff expenses
Total Staff Costs
(a) Contributions to defined contribution plans are expensed when incurred.
Other expenses
Legal Fees
Patents and trademarks
Audit, bookkeeping and tax advice
Contractors
University partnership
Registry, investor relations & other listing costs
Transaction costs
Restructuring costs
other
Total other expenses
7,512,585
8,377,212
7,993,865
8,868,494
588,416
537,264
530,288
451,145
335,917
562,207
922,173
1,397,423
100,000
323,575
-
344,487
74,327
60,000
269,755
512,598
-
50,927
3,420,530
3,639,972
SenSen Annual Report FY2023
sensen.ai
48
NOTES TO THE FINANCIAL STATEMENTS
Depreciation and Amortisation
Depreciation
Amortisation of intangibles
Depreciation – Right of use asset
Total Depreciation and Amortisation
5.
INCOME TAX
Consolidated
2023
$
2022
$
189,611
959,548
325,492
215,150
536,315
361,598
1,474,651
1,113,063
14
15
16
(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% (2022: 25.0%)
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
2023
$
2022
$
25,665
78,513
-
25,665
(303,560)
(225,047)
Consolidated
2023
$
2022
$
(7,383,520)
(1,845,880)
(12,300,208)
(3,075,052)
212,446
21,749
1,461,934
(632,165)
21,333
786,247
25,665
899,143
336,746
1,262,993
(660,504)
(5,075)
1,016,702
(225,047)
Consolidated
2023
$
2022
$
29,069
343,482
11,374
192,309
-
63,561
56,785
112,638
140,289
3,275,938
(3,716,749)
305,013
-
86,540
76,059
60,860
187,472
2,608,596
(2,918,197)
305,013
(305,013)
-
(305,013)
-
SenSen Annual Report FY2023
sensen.ai
49
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
Year ended June 2023
1 July 2022
Profit or Loss
Directly to
equity
Acquisition of
subsidiary
30 June 2023
Charged/credited to
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
11,375
192,309
-
86,540
76,059
60,859
187,472
2,608,596
17,695
151,173
-
-
(19,274)
51,779
(47,184)
667,342
-
-
-
(22,979)
-
-
-
-
(2,918,197)
(821,530)
22,979
(305,013)
-
(1)
-
Charged/credited to
Year ended June 2022
1 July 2021
Profit or Loss
Directly to
equity
Sundry creditors and accruals
Provisions
Borrowing expenses
Share issue costs
Section 40-880 Deduction
Depreciation
Other
Tax Losses Carried Forward
7,572
162,061
-
36,500
40,889
2,182
117,366
1,631,836
2,348
30,248
-
-
35,170
58,678
70,106
976,760
-
-
-
-
-
-
-
-
-
-
-
29,070
343,482
-
63,561
56,785
112,638
140,288
3,275,938
(3,716,749)
(305,013)
-
Acquisition of
subsidiary
1,455
-
-
-
-
-
-
-
-
30 June 2022
11,375
192,309
-
86,540
76,059
60,859
187,472
2,608,596
(2,918,197)
(1,454)
(305,013)
-
-
-
-
-
50,040
-
-
-
-
Deferred tax asset not recognised
Offset against deferred tax liability
(1,998,406)
(869,751)
- (303,560)
(50,040)
-
- - -
-
-
(e)
Movements in deferred tax liabilities
Charged/credited to
Year ended June 2023
1 July 2022
Profit or Loss
Directly to
equity
Acquisition of
subsidiary
30 June 2023
Intangibles
Offset against deferred tax asset
305,013
(305,013)
-
-
-
-
-
-
-
-
-
-
305,013
(305,013)
-
(e)
Franking credits
The Group does not hold franking credits as at 30 June 2023 or 30 June 2022.
SenSen Annual Report FY2023
sensen.ai
50
NOTES TO THE FINANCIAL STATEMENTS
6. EARNINGS/(LOSS) PER SHARE
Consolidated
2023
Cents per Share
2022
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
(1.11)
(1.11)
(1.99)
(1.99)
(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
(7,409,184)
(12,075,161)
(c) Weighted average number of shares
Weighted average number of ordinary shares outstanding during the year used in
calculating basic and diluted EPS
Consolidated
2023
No
2022
No
667,316,346
607,647,409
As at 30 June 2023, there are no (2022: nil) 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
Other 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
2023
$
2022
$
298,143
69,774
58,000
425,917
249,500
187,213
-
436,713
1,897,681
6,213,860
1,897,681
6,213,860
-
-
1,897,681
6,213,860
SenSen Annual Report FY2023
sensen.ai
51
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
2023
$
2022
$
(7,409,184)
(12,075,161)
1,149,159
325,492
207,749
147,859
(23,304)
137,442
(253,941)
(397,733)
727,555
604,693
751,465
361,598
3,173,353
153,565
(634,194)
(213,502)
9,604
(978,015)
1,462,843
101,180
Net cash used in operating activities
(4,784,213)
(7,887,262)
(b) Reconciliation of cash and non-cash movements in borrowings from financing activities
Year ended 30 June 2023
Borrowings and Lease liabilities (i)
Year ended 30 June 2022
Borrowings and Lease liabilities (i)
Opening
Balance
2,322,628
2,322,628
Opening
Balance
1,305,068
1,305,068
Cash flows
659,874
659,874
Cash flows
721,458
721,458
Non-cash
Changes
1,496,623
1,496,623
Non-cash
Changes
296,102
296,102
Closing
Balance
4,479,125
4,479,125
Closing
Balance
2,322,628
2,322,628
Non-cash changes above include additions of leases and interest on borrowings.
Financing activities above includes:
(i)
Includes cash payments of lease liabilities of $249,011 (FY22: $398,542) and net borrowings of $908,885
(FY22: $1,120,000).
Non-cash investing and financing activities disclosed in other notes are:
•
Scancam deferred consideration payment via share issue – note 22
SenSen Annual Report FY2023
sensen.ai
52
NOTES TO THE FINANCIAL STATEMENTS
10. TRADE AND OTHER RECEIVABLES
CURRENT
Trade Receivables
Allowance for expected credit losses
11. CONTRACT ASSETS
Contract Assets
Customer Contracts – In Progress
Allowance for expected credit loss
12. OTHER ASSETS
Other Assets
R&D Incentive Receivable
Prepayments
Other assets
Consolidated
2023
$
1,723,810
(256,395)
1,467,415
2022
$
2,041,683
(98,345)
1,943,338
Consolidated
2023
$
2022
$
424,229
561,671
-
-
424,229
561,671
Consolidated
2023
$
2022
$
2,538,784
2,197,607
327,725
144,699
10,051
232,783
3,011,208
2,440,441
SenSen Annual Report FY2023
sensen.ai
53
NOTES TO THE FINANCIAL STATEMENTS
13. INVENTORY
Inventory
Hardware – at cost
Raw Materials – at cost
Provision for inventory
Consolidated
2023
$
485,731
-
-
2022
$
174,873
56,917
-
485,731
231,790
The amount of inventories recognised as an expense during the year ended 30 June 2023 was $2,801,659 (2022:
$3,512,830).
14. PROPERTY, PLANT AND EQUIPMENT
Motor Vehicles
$
Furniture &
Equipment
$
Computer
Equipment
$
Total
$
30 June 2023
Opening net book value at 1 July 2022
Additions/disposals
Depreciation and amortization
29,575
48,932
(20,842)
8,301
134,923
(61,059)
396,790
(32,839)
434,666
151,016
(107,710)
(189,611)
Balance at 30 June 2023
57,665
82,165
256,241
396,071
At 30 June 2023
Cost
Accumulated depreciation
107,248
(49,583)
160,342
(78,177)
840,660
(584,419)
1,108,250
(712,179)
Net book balance
57,665
82,165
256,241
396,071
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
-
-
-
-
336,327
5,000
253,996
390,820
5,000
253,996
Depreciation and amortization
(14,499)
(2,118)
(198,533)
(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)
1,056,472
(659,682)
1,170,709
(736,043)
Net book balance
29,575
8,301
396,790
434,666
SenSen Annual Report FY2023
sensen.ai
54
NOTES TO THE FINANCIAL STATEMENTS
15. INTANGIBLE ASSETS
30 June 2023
Opening net book value at 1 Jul 2022
Additions – business combinations
Impairment
Depreciation and amortisation
Balance at 30 June 2023
At 30 June 2023
Cost
Accumulated amortisation
Net book balance
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
Useful life assessment
Patents & other
acquired intangible
assets
$
Goodwill
$
Total
$
2,649,352
-
-
(959,548)
1,689,804
3,269,000
(1,579,196)
1,689,804
Patents & other
acquired intangible
assets
$
916,667
2,269,000
-
(536,315)
2,649,352
3,269,000
(619,648)
2,649,352
5,632,016
-
-
-
5,632,016
5,632,016
-
5,632,016
8,281,368
-
-
(959,548)
7,321,820
8,901,016
(1,579,196)
7,321,820
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
During the period the group also re-assessed the useful lives of the following intangible assets as follows:
• Sentrack intellectual property useful life reduced from 7 years to 4 years
• Scancam Brand names reduced from 5 years to 3 years
• Scancam Technology reduced from 5 years to 3 years
These changes are a result of the group working to integrate Scancam and Sentrack on the SenSen platform.
Impairment test for goodwill
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:
2023
2022
Patents & other
acquired
intangible assets
$
Goodwill
$
Patents & other
acquired
intangible assets
$
Goodwill
$
SenTrack
Scancam
453,634
1,236,170
383,399
5,248,617
773,810
1,875,542
383,399
5,248,617
SenSen Annual Report FY2023
sensen.ai
55
1,689,804
5,632,016
2,649,352
5,632,016
NOTES TO THE FINANCIAL STATEMENTS
15. INTANGIBLE ASSETS (CONTINUED)
The Group tests whether the goodwill has suffered any impairment on an annual basis. For the 2023 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.
Significant assumptions used for the purposes of assessing each CGU for impairment include:
SenTrack
Scancam
Average revenue growth
rate FY23-FY27
Fixed cost growth rate
Pre-tax discount rate1
Terminal value growth
23.00%
3.00%
22.67%
2.50%
23.00%
5.00%
22.67%
2.50%
21.00%
3.00%
25.73%
3.10%
17.00%
5.00%
22.67%
2.50%
1 In performing the value‑in‑use calculations for each CGU, the group has applied post‑tax discount rates to discount the forecast future attributable
post‑tax cash flows. The equivalent pre‑tax discount rates are disclosed above.
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 2023 for SenTrack, and 3.1% for Scancam considering this
business is likely to still be growing strongly in five years time. 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 2023, the Group has applied a post-tax discount rate
of 17.00% to SenTrack cash flows, and a more conservative 19.3% to Scancam considering the impact of the new Fuel
Theft Reporting line of business.
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
$220,000.
Based on the above assumptions, the recoverable amount of the Scancam CGU exceeds the carrying amount by
$321,000.
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 reasonably 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
FY24-FY28
Fixed cost growth rate
Post-tax discount rate
Terminal value growth
Decrease by 5%
Decrease by 1%
Increase by 1%
Decrease by 0.5%
$529,300
$nil
$nil
$nil
$1,567,200
$nil
$198,324
$nil
SenSen Annual Report FY2023
sensen.ai
56
NOTES TO THE FINANCIAL STATEMENTS
16. LEASES
Amounts recognised in the consolidated statement of financial position:
Right-of-use assets
Buildings
Vehicles
Lease liabilities
Current
Non-current
Consolidated
2023
$
2022
$
1,295,479
-
1,295,479
286,880
1,090,787
1,377,667
325,101
10,679
335,780
185,428
182,826
368,254
Additions to the right-of-use assets during the 2023 financial year were $1,258,424 (2022: $288,276).
Amounts recognised the consolidated statement of profit or loss and other comprehensive income:
Depreciation charge – right-of-use assets
Interest expense – lease liabilities
The total cash outflow for leases in 2023 was $249,011 (2021: $473,533).
17. TRADE AND OTHER PAYABLES
Current
Trade payables
Accruals and other payables
18. EMPLOYEE BENEFITS
Current
Employee benefits
Non-Current
Employee benefits
325,492
60,162
385,654
361,598
34,732
396,330
Consolidated
2023
$
2022
$
1,714,432
1,503,222
3,217,654
1,238,557
1,449,175
2,687,732
Consolidated
2023
$
665,601
665,601
107,446
107,446
2022
$
652,314
652,314
18,577
18,577
SenSen Annual Report FY2023
sensen.ai
57
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 2023
30 Jun 2022
Note
$
$
887,154
887,154
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 $887,154 has been estimated by calculating the present value of the future
expected cash outflows discounted. Expected cash outflows are based on expectation of meeting certain revenue targets.
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
Valuation processes for level 3 fair values
Consolidated
30 Jun 2023
30 Jun 2022
Note
$
1,362,565
$
-
-
1,209,000
(623,270)
147,859
887,154
-
153,565
1,362,565
Valuations are performed every six months to ensure that they are current for the half-year and annual financial statements.
The fair value of the contingent consideration of $887,154 has been estimated by calculating the present value of the
future expected cash outflows discounted. Expected cash outflows are based on expectation of meeting certain revenue
targets. Fair value adjustments are recorded to reflect the change in expected contingent consideration on the above
basis.
SenSen Annual Report FY2023
sensen.ai
58
NOTES TO THE FINANCIAL STATEMENTS
20. CONTRACT LIABILITIES
Current
Contract liabilities*
Consolidated
2023
$
2022
$
1,103,746
1,103,746
1,156,667
1,156,667
* $1,428,536 has been recognised as revenue in the 2022 financial year (FY22: $987,105) and $1,363,237 were
additions during the 2023 financial year (FY22: $1,621,898).
21. BORROWINGS
(a)
Bank Loans
Other Loans
(b)
Total Current Borrowings
a) Bank loan
Consolidated
2023
$
450,000
2,651,458
3,101,458
2022
$
450,000
1,504,375
1,954,375
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
7.82% is charged. The loan was renewed in December 2022. The loan is secured by a letter of set-off between the
Group and Commonwealth Bank over a Term Deposit.
b) Other loan
The loan balance with Rocking Horse was $1,500,000 and interest of $4,375 at 30 June 2022. In December 2022,
SenSen received a refund from the Australian Tax Office and repaid Rocking Horse the total loan and interest of
$1,612,105. To replace this loan, a short-term loan of $1,100,000 was agreed with Rocking Horse Nominees Pty
Ltd. Fixed rate interest of 15% was charged. The loan was secured over the Research and Development refund. A
general security deed was held by Rocking Horse Nominees Pty Ltd. Interest accrued on this loan is $91,042 as at
30 June 2023.
The company made a second draw down of the $400,000 from Rocking Horse in April 2023 which remains in place
at 30 June 2023 with accrued interest of $13,137.
During the period, the Company also drew down on a loan from Subhash Challa for $200,000 which accrued interest
of $1,129 as at 31 December 2022. This loan was repaid in January 2023. The company then drew down a further
$500,000 on this same loan in March 2023 which remains in place as at 30 June 2023 with accrued interest of
$8,380.
In December 2022 the Company finalised two facilities with TP24, totalling $800,000 which were drawn down on by
a total of $523,731 at 30 June 2023 with accrued interest of $6,438. A facility fee of 2.25% p.a. is payable on the
facility plus and interest rate of 7.8% over the 30 day Bank bill swap rate.
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.
SenSen Annual Report FY2023
sensen.ai
59
NOTES TO THE FINANCIAL STATEMENTS
22. ISSUED CAPITAL
Ordinary shares
(a) Share capital movement during the period
Consolidated
2023
$
2022
$
Note
(a)
59,906,517
57,856,852
Consolidated
2023
No.
$
2022
No.
$
Balance at beginning of the reporting period
Shares issued during the year (i)
651,142,760 57,856,852
623,270
8,878,490
518,158,232 41,649,827
123,389,811 15,203,635
Share Issue Costs (ii)
-
-
-
(264,057)
Shares issued under long term incentive plan
(iii)
Shares issued under salary sacrifice share
scheme (iii)
Balance at end of period
18,641,485
1,398,484
9,594,718
1,267,447
569,614
27,911
679,232,349 59,906,517
651,142,761 57,856,852
(i) The Group completed the following share issue allocations in each respective period:
2023 financial year
(i) SenSen issued the following shares in the 12 months ended 30 June 2023:
•
Scancam deferred consideration payment via share issue
On 7 November 2022 the company issued 8,878,490 shares at a price of $0.0702 as the first of two
deferred consideration payments payable for the acquisition of Scancam in July 2021.
(ii) Employee Long Term Incentive Plan:
• On 9 December 2022 18,641,485 shares were issued in relation to the Group’s long term incentive plan
(iii)
Salary Sacrifice Share Scheme
In May 2023 the company launched an employee salary sacrifice share scheme whereby management
were invited to sacrifice 20% of their salary in exchange for SenSen shares. In addition to the 20%,
employees entering into the plan also received an additional 2% of their monthly salary as shares. 569,614
shares were issued under this plan in June.
2022 financial year
(iv)
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.
SenSen Annual Report FY2023
sensen.ai
60
NOTES TO THE FINANCIAL STATEMENTS
22. ISSUED CAPITAL (CONTINUED)
•
•
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.
(v) Share issue costs include payments to external parties in relation to the total value of share capital raised.
(vi)
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.
(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.
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
2023
$
4,357,019
40,147
4,397,166
(98,525)
138,672
40,147
2022
$
5,575,665
(98,525)
5,477,140
(72,424)
(26,101)
(98,525)
5,575,665
207,749
(1,426,395)
4,357,019
3,669,759
3,173,353
(1,267,447)
5,575,665
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.
SenSen Annual Report FY2023
sensen.ai
61
NOTES TO THE FINANCIAL STATEMENTS
24. CONTINGENT LIABILITIES
On 16 December 2022, the company announced that it had been served with Federal Court of Australia proceedings by
the solicitors for Angel Group Co., Ltd and Angel Australasia Pty Ltd (Angel) whereby it is alleged that SenSen has
infringed two of Angel's Australian patents.
The company subsequently announced on 24 April 2023 that similar proceedings had commenced in Branch 148 of the
Regional Trial Court, Makati City in the Philippines. While SenSen continues to vigorously defend itself against these
proceedings, the costs of SenSen’s legal defence are covered under SenSen’s intellectual property insurance.
At this stage in the proceedings, it is not yet practicable to estimate the financial outflows, if any, that may result from this
claim.
25. RELATED PARTY TRANSACTIONS
(a) Shareholder Loan
During the period Subhash Challa loaned the company $200,000 in November 2022, which was repaid with interest of
$1,128.55 on 2 January 2022. Subhash Challa also loaned the company $500,000 in April 2023 which remains outstanding
as at 30 June 2023. Both loans were made under the existing loan agreement between Subhash Challa and SenSen
Networks Limited.
There were no other related party transactions during the period other than those shares issued via the LTI plan noted in
Note 22, Issued Capital.
26. EVENTS AFTER THE REPORTING PERIOD
In July 2023 all remaining staff who joined SenSen as part of the Scancam acquisition in July 2021 were made
redundant. This was done as part of an effort to fully integrate the Scancam business into SenSen and gain cost
efficiencies through centralised management. As a result of all Western Australian based staff leaving the business, the
Perth office was also closed.
Following the release of audited financial statements the company is due to settle the second and final deferred
consideration amount payable to former shareholders of Scancam which was acquired in July 2021. Consideration for
this settlement is expected to be via a share issue of 17,036,806 fully paid ordinary shares.
SenSen Annual Report FY2023
sensen.ai
62
NOTES TO THE FINANCIAL STATEMENTS
27. INTEREST IN SUBSIDIARIES
The following are subsidiaries of the group, are controlled entities and have been consolidated at 30 June 2023.
(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
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
*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
28. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Key Management Personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2023
$
1,033,022
104,785
4,206
101,297
1,243,310
2022
$
1,141,113
111,779
29,137
1,280,268
2,562,297
Detailed remuneration disclosures are provided in the Remuneration Report on pages 19 to 27.
(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.
SenSen Annual Report FY2023
sensen.ai
63
NOTES TO THE FINANCIAL STATEMENTS
29. SHARE BASED PAYMENTS
Share Based Payments were made under both the Salary Sacrifice Share Scheme and the management Long Term
Incentive programs in the year ended 30 June 2023.
Salary Sacrifice Share Scheme
In May 2023 the company launched an employee salary sacrifice share scheme whereby management were invited
to sacrifice 20% of their salary in exchange for SenSen shares. In addition to the 20%, employees entering into the
plan also received an additional 2% of their monthly salary as shares. 569,614 shares were issued under this plan in
June.
The plan commenced on 1 May 2023 and has an end date of 30 June 2024, however the company retains the option
to terminate the plan at any time, and employees retain the right to opt out of the plan throughout its duration. As at
30 June 2023, $31,844 has been recognised as a share based payment to key management personnel under this
scheme.
The following share rights were issued as part of compensation to key management personnel during the year ended 30
June 2023, 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 2023, 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
Target measures
Grant dates 1
Service Revenue Target
Various
Various
Various
50%
50%
50%
40%
40%
40%
Revenue
Stretch
20%
20%
20%
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:
SenSen Annual Report FY2023
sensen.ai
64
NOTES TO THE FINANCIAL STATEMENTS
29. 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 were 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 EBITDA target was met, however the Revenue and Revenue Stretch target were not 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
$10,796,523
($5,509,652)
$10,796,523
No
Yes
No
1 Represents current expectations for each target.
SenSen Annual Report FY2023
sensen.ai
65
NOTES TO THE FINANCIAL STATEMENTS
29. SHARE BASED PAYMENTS (CONTINUED)
Year
3
Grant
Date
Vest
date
Service
$
Revenue
$
EBITDA
$
Revenue
–
Stretch
$
20%
Discretionary
Grant
$
N/A
-
102,986
50%
497,415
40%
533,637
10%
33,409
654,162
584,087
-
116,817
9,405
530,299
-
139,826
-
-
Total
$
Shares
issued 1
1,267,447 9,594,718
2
1,364,471 6,772,485
2
N/A
670,1254
1,681,876 1,117,724
173,235
116,817
112,391
2,631,918
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 The shares relating to FY22 performance were issued on 9 December 2022. The shares relating to FY21 performance were issued on
24 December 2021.
3 Being the year for which employees criteria for which performance criteria for vesting are assessed.
4For the 2023 rights, $541,435 had been recognised as share-based payment expense in prior year. It had previously been assessed
that it was likely that the revenue target would be met. The pro-rata expense for 2023 is $128,690
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 2023.
LTI Incentive Options and General Options
Share options outstanding at the end of the year follows:
2023
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
None
None
N/A
-
-
-
-
-
-
-
-
-
-
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) Expired during the 2022 financial year
There were no LTI options granted during the year ended 30 June 2023 and 30 June 2022. There were no options that
expired during the year-ended 30 June 2023 (2022: 15,854,256).
SenSen Annual Report FY2023
sensen.ai
66
NOTES TO THE FINANCIAL STATEMENTS
30. 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 2023 and
2022:
(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
2023
$
2022
$
(1,346)
(118)
-
(1,346)
(118)
2,428
-
2,428
-
939,248
939,248
3,774
-
3,774
-
939,248
939,248
(935,474)
(935,474)
40,322,041
40,322,041
(41,258,861)
(41,257,515)
(936,820)
(935,474)
(b) Guarantees entered into by the parent entity
The parent entity has not entered into any guarantees at the 30 June 2023 and 30 June 2022.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2023 and 30 June 2022.
(d) Contractual commitments for the acquisition of property, plant or equipment
As at the 30 June 2023, 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.
SenSen Annual Report FY2023
sensen.ai
67
NOTES TO THE FINANCIAL STATEMENTS
31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Financial liabilities
Trade payables
Borrowings
Consolidated
2023
$
2022
$
1,897,681
1,467,415
424,229
3,789,325
6,213,860
1,943,338
561,671
8,718,869
1,697,690
3,101,458
1,238,557
1,954,375
4,799,148
3,192,932
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 7.82% on the business loan.
The company maintains a working capital facility with Rockinghorse Group of $1,604,180 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 2023 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 $15,507. (2022: $9,771)
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.
SenSen Annual Report FY2023
sensen.ai
68
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 2023 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.
For the year ended 30 June 2023, the Group has considered whether the expected loss rates are required to be
increased due to the uncertain economic environment.
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.
SenSen Annual Report FY2023
sensen.ai
69
NOTES TO THE FINANCIAL STATEMENTS
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(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 2023. 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 2023.
2023
Financial assets
Cash and cash deposits
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Contingent consideration
Total
$
< 6 Mths
$
6-12 Mths
$
1-5 Yrs
$
1,897,681
1,467,415
424,229
3,789,325
1,697,690
3,101,458
1,377,667
887,154
7,063,969
1,897,681
1,467,415
424,229
3,789,325
1,697,690
2,069,347
143,440
887,154
4,797,631
-
-
-
-
-
-
-
-
-
1,032,111
143,440
-
-
1,090,787
1,175,551
1,090,787
Net maturity
-3,274,644
-1,008,306
-1,175,551
-1,090,787
2022
Financial assets
Cash and cash deposits
Trade and other receivables
Contract assets
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Contingent consideration
Net maturity
Total
$
< 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
368,254
1,362,565
4,473,751
4,245,118
6,213,860
1,943,338
561,671
8,718,869
1,238,557
1,504,375
128,141
623,270
3,494,343
5,224,526
-
-
-
-
-
-
-
-
-
-
57,287
-
-
182,826
739,295
57,287
-57,287
922,121
-922,121
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, noting however that
cash inflows from new sales are expected to cover the net maturity deficit in the near term.
SenSen Annual Report FY2023
sensen.ai
70
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 31-70:
(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 2023 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: 29 Sep 2023
SenSen Annual Report FY2023
sensen.ai
71
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 2023, 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 2023 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.
7(cid:21)
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
2023, 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.
7(cid:22)
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 the 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.
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.
7(cid:23)
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 2023, 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.
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.
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.
7(cid:24)
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages (cid:20)9(cid:3)(cid:87)o 2(cid:26) of the directors’ report for the(cid:3)
year ended 30 June 2023.
In our opinion, the Remuneration Report of SenSen Networks Limited, for the year ended 30 June 2023,
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, 29 September 2023
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.
7(cid:25)
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 26 September 2023.
(a) Distribution of equity securities
There are 681,224,181 fully paid ordinary shares held by 2,159 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
Holders
151
505
288
712
498
2,154
Total Units
61,914
1,510,530
2,311,674
28,136,643
649,203,420
681,224,181
Holding less than a marketable parcel
857
3,014,118
%
0.01
0.22
0.34
4.13
95.30
100
0.44
Option
Name
(b) aid Substantial shareholders
EQUITY PLAN SERVICES PTY LTD
MIZIKOVSKY GROUP
MR SUBHASH CHALLA
ZENON PASIECZNY/SAPHET CAPITAL MANAGEMENT PTY LTD
Number
Percentage
153,979,262
93,441,413
88,523,186
47,126,259
22.6%
13.7%
13.0%
6.9%
SenSen Annual Report FY2023
sensen.ai
77
ASX Additional Information (Unaudited)
(c) Twenty largest holders of quoted equity securities
Ordinary shareholders
1.
2.
3.
EQUITY PLAN SERVICES PTY LTD
RAINROSE PTY LTD
ADAPTALIFT INVESTMENTS PTY LTD
4. MR SUBHASH CHALLA
5.
6.
7.
ANKLA PTY LTD
CITICORP NOMINEES PTY LIMITED
SAPHET CAPITAL MANAGEMENT PTY LTD
8. MR WILLIAM MORAN
9.
SUNSTAR AUSTRALIA PTY LTD
10. BNP PARIBAS NOMINEES PTY LTD
11. MR SATISH GUPTA
12. SANDHURST TRUSTEES LTD
13. MR SHARATHCHANDRA REDDY GUNUPATI
14. GASMERE PTY LTD
15. MR DAVID EDWARD SMITH
16. MR VENKATESWARA PRASAD GUNUPATI
17. AA&J SCHMIDT HOLDINGS PTY LTD
18. MRS LAXMI CHALLA
19. K R KHATRI (DENTAL) PTY LTD
20. MR SUBHASH CHALLA & MS LALITHA VADLAPALLI
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
UNQUOTED SECURITIES
There are no unquoted securities at 30 June 2023.
Fully Paid
Number
Percentage
153,979,262
22.60
60,288,316
32,332,599
28,778,002
28,379,721
26,180,158
22,262,395
9,232,976
9,024,959
8,587,589
6,874,701
5,774,849
5,632,915
5,566,000
5,050,654
4,822,335
4,266,500
4,033,409
4,000,000
2,733,333
8.85
4.75
4.22
4.17
3.84
3.27
1.36
1.32
1.26
1.01
0.85
0.83
0.82
0.74
0.71
0.63
0.59
0.59
0.40
427,800,673
253,423,508
62.80
37.20
SenSen Annual Report FY2023
sensen.ai
78