Yojee Limited
Annual Report 2023

Plain-text annual report

ABN: 52 143 416 531 ANNUAL REPORT ABN: 52 143 416 531 FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2023 CORPORATE DIRECTORY BOARD OF DIRECTORS David Morton Chairman Ed Clarke Managing Director Ray Lee Non-Executive Director LAWYERS Edward Mac Scovell Level 1, 8 St Georges Terrace PERTH WA 6000 AUDITOR Grant Thornton Audit Pty Ltd Collins Square, Tower 5 727 Collins Street MELBOURNE VIC 3008 Gary Flowers (resigned on 18 May 2023) Non-Executive Director Saskia Groen-Int-Woud (resigned on 1 Aug 2023) Non-Executive Director SHARE REGISTRY Computershare Investor Services Pty Limited Level 17, 221 St Georges Terrace PERTH WA 6000 STOCK EXCHANGE LISTING Australian Securities Exchange (ASX) ASX Code: YOJ COMPANY SECRETARY Sonu Cheema REGISTERED OFFICE Suite 9 330 Churchill Ave SUBIACO WA 6008 Telephone: (+61) 08 6489 1600 Facsimile: (+61) 08 6489 1601 www.yojee.com CONTENTS Corporate Directory Directors’ Report Auditor’s Independence Declaration Directors’ Declaration Independent Audit Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Additional Shareholder Information 1 2 16 18 19 23 24 25 26 27 58 YOJEE LIMITED - ANNUAL REPORT 2023 1 DIRECTORS’ REPORT The Directors of Yojee Limited (the “Company”) and its subsidiaries (collectively, the “Group” or “Yojee”) submit herewith their report and the consolidated financial statements of the Group for the financial year ended 30 June 2023. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: DIRECTORS The names and details of the Company’s Directors at any time during or since the end of the financial year are outlined below. Unless otherwise disclosed, all Directors held their office from 1 July 2022 until the date of this report. Mr David Morton – Chairman (Appointed 3 March 2020) Mr Morton is an experienced Corporate Banker with a successful career spanning 40 years at Westpac and HSBC with a focus in the APAC region. He recently returned to Australia after 12 years working in Asia (Vietnam, Malaysia, Hong Kong) in a number of Pan-Asian roles including Managing Director, Head of Corporate, Financials and Multinationals Banking, Asia-Pacific. Mr Morton is a Graduate of the Australian Institute of Company Directors (GAICD), and holds a Business Studies degree (Accounting) from Victoria University. He also attended the Advanced Management program at Insead in Fontainebleu, France. An experienced senior banking executive, Mr Morton brings strong, authentic leadership skills across a wide range of businesses, cultures and geographies. He has a very strong track record in both building and restructuring businesses to cope with high growth environments. Mr Morton is an independent Director. Mr Edward Clarke – Managing Director (Appointed 26 May 2016) Mr Clarke is an experienced technology entrepreneur with a background in taking innovative technology platforms to market in areas such as real-time communication, big data marketing and e-commerce. As Vice President of Sales for Temasys Communications Pte Ltd, Mr Clarke was part of a team that IBM recognised as a "Top 5 global start-up to watch in 2014". More recently, Mr Clarke has been working as Vice President of Sales and Marketing with Silicon Valley and Asia venture capitalist backed marketing technology platform Ematic which now has over 200 of South East Asia’s leading e-commerce retailers as clients. Mr Clarke is a non-independent Director. Mr Ray Lee – Non-Executive Director (Appointed 3 March 2020) Mr Lee is a well-respected port development, port management and operations executive, with over forty years international industry experience. He established Portside Solutions in 2007 and has successfully consulted on significant projects for global companies including and currently, APM Terminals and DP World Australia. Portside Solutions has been engaged in examining pit to port solutions for multiple mining companies throughout Africa, South America and Australia. With offices in Dubai, Canada and Australia, Portside Solutions delivers a broad portfolio of services globally. Mr Lee is an independent Director. Mr Gary Flowers – Non-Executive Director (Appointed 1 May 2019; Resigned on 18 May 2023) Mr Flowers has extensive listed company experience and is widely recognised for transforming organisations where culture is valued as a sustainable advantage; engaging staff, stakeholders and the public. Mr Flowers has been integral in establishing brands on a global stage across Australia, New Zealand, Asia, Europe, Middle East and the USA, primarily across three distinctive industry sectors, Professional Services, Sports & Media, and Property. Mr Flowers currently serves in the capacity of Chairman for Mainbrace Constructions Pty Ltd, NSW Institute of Sport and EMM Consulting. Mr Flowers was an independent Director. YOJEE LIMITED - ANNUAL REPORT 2023 2 Ms Saskia Groen-Int-Woud – Non-Executive Director (Appointed 1 September 2022; Resigned on 1 August 2023) Ms Groen-Int-Woud has served in senior executive roles including with the world’s number two logistics shipping operator, Maersk. At Maersk she held various roles in the Netherlands and Asia, culminating as the global CEO of Damco, one of the world’s largest freight forwarders, including its successful migration into the consolidated Maersk Integrated Logistics strategy. She has also previously held numerous international roles with world leading building materials Holcim Group where she managed complex logistics operations amongst other operational and Supply Chain responsibilities. Additionally, Saskia currently holds a Directorship with one of Europe’s leading private equity firm’s investment in ToiToi Dixi, a German-based global company that has experienced significant growth in the past three years. Saskia is a graduate of Central Queensland University and has completed a number of postgraduate qualifications and executive leadership certifications including at USQ, IMD, Harvard and Stanford. Saskia also won Telstra’s Asia Business Woman of the Year in 2017. Ms Saskia Groen-Int-Woud was an independent Director. Mr Sonu Cheema – Company Secretary (Appointed 26 May 2016) Mr Cheema holds the position of Accountant and Company Secretary for Cicero Group Pty Ltd with experience working with public and private companies in Australia and abroad. Roles and responsibilities conducted by Mr Cheema include completion and preparation of management & ASX financial reports, investor relations, Initial Public Offer (IPO), mergers & acquisitions, management of capital raising activities and auditor liaison. Mr Cheema has completed a Bachelor of Commerce majoring in Accounting at Curtin University and is a CPA member. PRINCIPAL ACTIVITIES Yojee is a cloud-based software as a service (SaaS) logistics platform that facilitates the flow of freight movements into a single ecosystem, making the complex process of managing land transport simple and accessible to all players and providing the tools to create more cost-effective and efficient freight arrangements - facilitating a reduction in carbon emissions. EVENTS SUBSEQUENT TO REPORTING DATE Ms Groen-Int-Woud resigned from the Board with effect from 1 August 2023. Ms Groen-Int-Woud’s increased executive commitments have resulted in time constraints on her ability to continue her role on the Board. She will continue to work with Yojee and join Yojee’s Advisory Board. The resignation of Ms Groen-Int-Woud does not have any material impact on the Company's financial position, results of operations, or business performance as of the date of authorisation. On 12th September 2023, the Company announced that, as part of ongoing review of the business performance, it is discontinuing the SendSingapore logistics business in Singapore. Refer to the ASX announcement for further information. Aside from the above, no adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation. DIVIDENDS No dividend has been declared or paid since the incorporation of the Group on 30 April 2010 and the Directors do not recommend the payment of any dividend in respect of the financial year ended 30 June 2023. YOJEE LIMITED - ANNUAL REPORT 2023 3 SHARE OPTIONS Options over ordinary shares of Yojee Limited at the date of this report are as follows: 1 1,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.15 on or before 1 April 2024). 2 9,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.08 on or before 27 November 2023). 3 5,000,000 unquoted options vesting on a 12-month service condition (exercisable at $0.07 on or before 27 November 2023). 4 2,500,000 unquoted options vesting on a 12-month service condition (exercisable at $0.10 on or before 5 August 2024). 5 2,500,000 unquoted options vesting on a 24-month service condition (exercisable at $0.15 on or before 5 August 2025). 6 2,000,000 unquoted options vesting on a 12-month service condition (exercisable at $0.10 on or before 8 December 2025). 7 2,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.20 on or before 8 December 2025). YOJEE LIMITED - ANNUAL REPORT 2023 4 REMUNERATION REPORT (AUDITED) The Directors of Yojee Limited present the Remuneration Report prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001. The remuneration report is set out under the following main headings: a. b. c. d. e. Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share-based remuneration Other information a. Principles used to determine the nature and amount of remuneration The remuneration of the Group has been designed to align Director and Executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering long-term incentives based on key performance areas. The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best Executives and Directors to run and manage the Group, as well as create goal congruence between Directors, Executives and shareholders. Executive Director Remuneration In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to reflect the market salary for a position and individual of comparable responsibility and experience. During the year ended 30 June 2023, the Group's ongoing Remuneration Committee persisted in its established role. Remuneration is regularly compared with the external market by participation in industry salary surveys and during recruitment activities generally. If required, the Board may engage an external consultant to provide independent advice in the form of a written report detailing market levels of remuneration for comparable executive roles. No external remuneration consultant was used during the year. All remuneration paid to Directors and Executives is valued at the cost to the Group and expensed. Options are valued using the American Binomial, Black-Scholes or Hoadley’s ESO1 methodology. Non-Executive Director Remuneration Non-Executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders. The limit of Non-Executive Director fees was set at a maximum of $250,000 at a Board meeting held on 12 May 2010. Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act 2001 at the time of the Director’s retirement or termination. Non-Executive Directors’ remuneration may include an incentive portion consisting of bonuses and/or options, as considered appropriate by the Board, which may be subject to shareholder approval in accordance with the ASX Listing Rules. Performance-Based Remuneration Remuneration packages do not include performance-based components. An individual member of staff’s performance assessment is done by reference to their contribution to the Group’s overall operational achievements. YOJEE LIMITED - ANNUAL REPORT 2023 5 Relationship between the remuneration policy and company performance The table below sets out summary information about the Group’s earnings and movements in shareholder wealth. 30 June 2023 $ 30 June 2022 $ 30 June 2021 $ 30 June 2020 $ 30 June 2019 $ 30 June 2018 $ Net loss after tax Dividends (cents per share) Share price Basic EPS (cents) Diluted EPS (cents) (6,368,944) (8,464,857) (11,305,732) (6,163,844) - $0.016 - $0.056 - $0.185 - $0.088 $0.135 (0.56) (0.75) (1.06) (0.68) (0.44) (0.88) (0.56) (0.75) (1.06) (0.68) (0.44) (0.88) $0.085 (3,716,377) - (5,691,864) - The remuneration of the Directors is not linked to the performance, share price or earnings of the Group. Voting and comments made at the Company’s last Annual General Meeting Yojee Limited received overwhelming votes in favour of its Remuneration Report for the financial year ended 30 June 2022. The Company received no specific feedback on its Remuneration Report at the Annual General Meeting held on 9 November 2022. b. Details of remuneration Details of the nature and amount of each element of the remuneration of each key management personnel of Yojee Limited are as follows: 30 June 2023 Short-term benefits Post-employment Equity based compensation Options / Performance Rights Directors Executive Directors Mr E Clarke1 Non-Executive Mr D Morton Mr R Lee Mr G Flowers 3 Ms S Groen-Int-Woud 4 Salary and Fees Superannuation Shares Total $ $ $ $ $ 367,959 - - 118,190 2 486,149 80,000 8,400 60,000 6,300 42,435 4,456 40,000 4,200 23,356 590,394 - - - - - - - 32,452 - 150,642 88,400 66,300 46,891 76,652 764,392 30 June 2022 Short-term benefits Post-employment Equity based compensation Directors Executive Directors Mr E Clarke1 Salary and Fees Superannuation Shares Options / Performance Rights Total $ $ $ $ $ 307,024 - - 209,309 2 516,333 Non-Executive Mr D Morton Mr R Lee Mr G Flowers 80,000 8,000 88,000 60,000 6,000 66,000 48,000 4,800 52,800 723,133 18,800 495,024 1 Mr E Clarke is engaged in a managing director capacity for Yojee Ops Pte Ltd, a wholly-owned subsidiary company of Yojee Limited that is based in Singapore. Fees are paid in Singapore dollars (“SGD”) and are converted at the average rate for the financial year then ended. Salary and Fees for Mr E Clarke includes expense credit of ($3,391) (2022: $11,341 expense) relating to movement in provision for leave entitlements. 2 No actual financial gain for Mr E Clarke or dilution to shareholders occurred across the performance rights as they were out of the money during the period. Despite market vesting conditions not being met in the period and the performance rights being out of the money at grant date due to broader market conditions, an expense for share-based payments was recognised in the period in line with accounting standards. 3 Mr G Flowers resigned on on 18 May 2023. 4 Ms S Groen-Int-Woud resigned on 1 Aug 2023. - - - - - - - 209,309 YOJEE LIMITED - ANNUAL REPORT 2023 6 c. Service agreements On 25 May 2016, the Company engaged Cicero Corporate Services Pty Ltd for administrative and company secretarial services. Cicero Corporate Services Pty Ltd is paid $8,800 per month for these services. d. Share-based remuneration Options/ Performance Rights Granted as Part of Remuneration for the financial year ended 30 June 2023 During the year, 4,000,000 options were granted to Ms S Groen-Int-Woud. Details on the options granted are disclosed in section e. Other information of the Directors’ report. Shares Issued as Part of Remuneration for the financial year ended 30 June 2023 No shares were issued during the year as part of the compensation. e. Other information The following table provides details of shares, options and performance rights held by Key Management Personnel. Share and Option holdings of Directors and Key Management Personnel or their nominees The relevant interest of each director in the shares and options over such shares issued by the companies within the Group and other related bodies corporate, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, as at 30 June 2023 is as follows: The movement during the reporting year in the number of options over ordinary shares in Yojee Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows. Shareholdings by Directors and Key Management Personnel or their nominees YOJEE LIMITED - ANNUAL REPORT 2023 7 Option holdings by Directors and Key Management Personnel or their nominees 1 5,000,000 unquoted options vested on a 12-month service condition (exercisable at $0.07 on or before 27 November 2023). 2 8,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.08 on or before 27 November 2023). 3 1,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.08 on or before 27 November 2023);, 4 2,000,000 unquoted options vesting on a 12-month service condition (exercisable at $0.10 on or before 8 December 2025); and 2,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.20 on or before 8 December 2025). Performance rights holdings by Directors and Key Management Personnel or their nominees 2023 Opening Balance Granted as Compensation Exercised Other Vested and (Cancelled or exercisable 30 June 2023 Expired) Unvested at 30 June 2023 Mr E Clarke 1 Total 1 5,000,000 performance rights, valued at $0.0341 per security, vesting on a market condition being 15-trading day volume weighted average price of shares not less than $0.50 by 30 June 2023. The rights expired unvested on 1 July 2023. (5,000,000) (5,000,000) 5,000,000 5,000,000 - - - - - - - - Loans/Payables to Key Management Personnel As at 30 June 2023, there were no loans or payables to the Group Key Management Personnel. Other transactions with Key Management Personnel There are no other transactions with Key Management Personnel during the financial year ended 30 June 2023 other than those detailed above. DIRECTORS’ MEETINGS The following table sets out the number of Directors’ meetings held during the financial year ended 30 June 2023 and the number of meetings attended by each Director. During the period, 9 Board meetings were held. No remuneration committee or audit and risk committee resolutions were proposed or passed during the year. Name Mr D Morton Mr E Clarke Mr R Lee Mr G Flowers M S Groen-Int-Woud Held 10 10 10 10 10 Board Meetings Eligible to 10 10 10 9 8 Attended 10 10 10 9 8 YOJEE LIMITED - ANNUAL REPORT 2023 8 INDEMNIFICATION OF OFFICERS AND AUDITORS During the financial year, the Group renewed a premium in respect of a contract insuring the Directors of the Group (as named above), the company secretary and all executive officers of the Group and of any related body corporate against a liability incurred as such as a director, secretary or executive officer 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. The Group has not otherwise, during or since the end of the period, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Group or of any related body corporate against a liability incurred as such an officer or auditor. NON-AUDIT SERVICES The Directors are satisfied that the provision of the non-audit services, during the year by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standards of independence for auditors imposed by the Corporations Act 2001. No officers of the Group are former partners of Grant Thornton. 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 part of those proceedings. OPERATING AND FINANCIAL REVIEW 1. Key financial results The Company achieved 7% revenue growth in FY2023 compared to FY2022 at $2.2m. This result was achieved in a challenging global business environment and while repositioning the Company on its new Enterprise Program, which resulted in shedding revenue from unprofitable customers and moving out of the SME segment. Along with an unwavering focus on operational efficiency resulting in a substantial reduction in operating cost, Yojee significantly lowered its net operating cash cost base throughout FY2023 thereby extending its cash runway and providing valuable time for Yojee’s new Enterprise Program to yield results. The lowering cost base trend is expected to continue as a number of cost reduction initiatives are yet to be visible. YOJEE LIMITED - ANNUAL REPORT 2023 9 2. Review of operations In terms of capital spending, the Company has also seen a material reduction in cash used in investing activities in the second half of FY2023. This is in line with the new Enterprise Strategy and steps taken to maximise historic investment made in its platform pointed at Enterprise customers (movements away from Small and Medium Enterprise). The Board is closely monitoring capital expenditures in the context of managing the Company’s cash runway. 3. Market backdrop Supply and demand challenges: The year saw significant challenges for our end customers, with revenue and freight volumes dropping throughout the period. Logistics operators were typically capacity stretched to oversized levels to support the chaos of Covid impacted supply chains in ensuing high volumes of inventory shipped through the global marketplace. This meant they needed to recoil and restructure as the cargo volumes normalised. This has stifled enterprise transformation strategies for a material period for many of our target customers nevertheless productivity, customer experience and agile asset light networks are a focus which is a sweet spot of our offering. Operations challenges: Our meetings across the industry have made it quite clear that there is a strong requirement to manage contracted freight on a single platform. This demand is coming from operations teams and end customers of our clients including in competitive tender processes. Decision makers see our platform as a way to enable agility and scalability which is both seamless and enables much greater freight volumes handled per person for reliable transport. Target market: The Asia Pacific (APAC) market is still running many years, and even decades behind the North American markets in terms of technology penetration and adoption. In APAC, a rough estimate is that only 5 out of every 100 transporters have a system that can integrate into an enterprise business, and as few enterprise companies have systems in place to manage asset light, multi carrier transport networks. This is where Yojee’s platform’s all in one approach is unique in the market, by not just handling visibility but also the allocation, assignment and optimisation of jobs across drivers and vehicles with real-time dataflow. Without such information, or when operating in the email and whatsapp environment typically seen in the market, the cost to handle a single transport order is between 20-30 minutes. Multiplied by the thousands of jobs handled per month this is multiple full-time employees. For example, 5,000 transport orders equates to 13 full time employees, with scaling linear. With Yojee based on the top end of 6 minutes per order, customers can handle this with 2-4 full time employees in a much more reliable manner that will also help win customers. With the manual process approach, it is very difficult to gain economies of scale which is a much bigger focus in landside logistics in the current market. Industry developments - challenges and opportunities: Whilst reviewing our value and unique proposition in the market, the Company has focused on operating where our customers are, and excelling with interoperability and integration with the platforms they use, which has been a big part of the 2023 research and development build. This includes: • Multi-Trucking company transport: Managing the first middle and last mile across many carriers • with dashboards to understand performance in real time along with historical reports to align with highest performing subcontracted trucking companies. Interoperability and Integration - Yojee is built so that full data can flow to and from the platform in realtime to systems like Wisetech’s Cargowise, SAP ERP and other systems who are seeking best in class information from landside transport and next generation visibility (real-time like uber, not milestones like many Post tracking sites) • Our “biggest competitor” is usually Excel and manual process: These destroy profit and customer experience and therefore we have focused on messaging to support transformation. • Change management: Focusing heavily on migrating from ‘as is’ to optimal state with a hands- • on approach including hypercare to instil confidence in resistant users. The Driver: Transport drivers are critical to the future of the visibility ecosystem. The company has done ride alongs and workshops to iterate on the mobile application to work towards ‘less clicks’ and a workflow that drivers love to use as it makes their day easier. YOJEE LIMITED - ANNUAL REPORT 2023 10 4. Business strategy During the year our business underwent a purposeful refocusing. Refining our ideal customer segment has yielded tangible benefits, including a discernible reduction in operating costs, particularly in key areas such as platform development and sales and marketing. We have made prudent decisions aligned with this refined direction, demonstrating our commitment to a more efficient and effective business model. The problems we solve for our enterprise customers are: • Yojee uniquely enables global companies to move from ‘regional black hole of visibility’ to operate in Asia at the same level of seamless data and visibility or better than their other worldwide operations where technology is more adopted. • Allowing regional, country and supply chain managers and logistics service providers to aggressively grow in a profitable manner, something that was not possible in the past. Often enterprises would hold back growth due to being nervous about managing execution. Plan, visualize and execute pickup and deliveries via contracted transport partners and own assets in a single platform for top reliability. Save time and money and improve customer satisfaction. • • Despite the strategic decision to part ways with customers not aligned with our path forward, we have achieved a 7% increase in revenue for the financial year. This underscores our resolve to adapt to evolve with dynamics in the market while ensuring that our revenue is sustainable and reflective of the value we provide. The business has organized itself around newly identified unit economics showing the ability to operate at a transactional cost with high gross profit at scale. Our focus is on growing our transactional revenue under the new enterprise go-to-market strategy to reach the breakeven point, now not too far away from our current position. 5. Customers Yojees key customers remain top 10 global companies such as Maersk, Ceva, Geodis, FLS, Cargo Compass and other enterprise forwarders and key transporters. • • • • Yojee continues to focus on Enterprise forwarders, shipping lines and some manufacturers with contracted freight networks (asset light). Yojee’s target customers will typically be doing containerised, palletised, bulk and carton deliveries in a port to warehouse or container yard, business to warehouse, business to retail or manufacturing to port type environment. The multiple subcontractor nature of these asset light environment means time to invoice is slow and therefore time from order to cash payment receipt hurts growth (working capital). Because only 5 in every 100 trucking companies have sophisticated planning technology, Yojee becomes the unique solution to provide the subcontractor with the software and tools they need for free to bring the freight network on par with end customer expectations and global standards. 6. Yojee platform - product impact • Monitor and Improve: Allows for Intra Day and Trend Reports on Private Freight Networks. A regional manager, country manager and transport manager will view this for an intraday and trend information to understand the performance of the business and subcontractors, along with issues needing to be attended to. By providing software across the network, it is usually the first time these companies have had full visibility of their operations and performance. The information gathered aids growth, procurement and performance discussions. • Connect: Yojee is best in class for connectivity, interoperability and integration allowing to essentially interact with other software and technology based on most use cases. Yojee has already created connectivity into 1000+ trucking companies in the region, this removes the equivalent of 3-6 months per trucking company per enterprise customer (2-3 IT team members working together) in the legacy solution environment. This is a significant asset to the company and takes years of hard work on the ground to produce. • Optimise: Yojee has built simple workflows to efficiently accept order, plan, allocate, execute and manage real time transport operations allowed for consolidation and lowest cost, shortest distance and lowest emissions transport. YOJEE LIMITED - ANNUAL REPORT 2023 11 • Execute: In 2023, Yojee delivered next generation visibility capabilities to its enterprise customers, for the first time allowing real-time visibility of jobs that are being completed on our customers behalf by other companies. This adds to the suite of milestones and audit trail information which connects all parties including the end customers to the delivery process with accurate ‘delivery time to the minute’ information. • Collaborate: Yojees has built functionality to allow for rapid and contextual multi-party actions and communication. This interoperability is key to bringing customers to the platform. 7. Platform pricing Yojee has continued to refine its pricing to capture the full value of the offering via steady increases in enterprise pricing, along with removing the inertia in purchasing wherever possible to provide: 8. Platform developments and adoption Over the past 12 months the product team has had a strong focus on delivering features and value that directly support our product pillars and our ICP of Enterprise SaaS. 9. Product Enhancements • Artificial Intelligence Solver Improvements: With a number of trucking companies implementing • • • • • • • our product we have had the opportunity to work with industry leaders in advancing our rules based automated solver. This has resulted in more efficient load and trip optimisation for our customers fleets. SSO (Single Sign On): In line with what most global enterprise businesses require we now offer Single Sign On as an option for logging into our Dispatcher product. Periodic Invoicing: The ability to calculate all charges for all orders for a user definable period allows our customers to complete their entire months billing with a few clicks. This has proven to significantly increase the productivity of our customers’ accounts team and resulted in the reduction of incorrect invoices and revenue leakage. Job Costing: We have released the ability to specify both Buy and Sell rate cards that automatically calculate job profitability when passing transport orders to your downstream partners. This results in immediate payment and zero payment disputes. Standardise UI/UX: This past financial year has seen significant investment in modernising our user interface and user experience, standardising on global industry terminology making it easier for our customers to onboard and adopt our software. This shortens the total time to value. Paperless Phase 2: Having already implemented paperless features into our product we have extended the solution allowing our customers, based on specific privacy settings, to share and upload their own documents that can be viewed up and down the complete supply chain network. Trends Dashboards: A new dashboard for understanding trends with regards to transport order volumes for specific timeframes. Our customers can now more easily see how their orders trend over time, across customers, service types and more. Empty Leg Management: An important aspect of managing fleets that move sea freight containers is the ability to distinguish between the movement of the container when it is full (Laden Leg) and when it is empty (Empty Leg). Significant work has been done to facilitate the management of these empty legs in both the main Dispatcher product and Driver Mobility App. • Multi Language for Entire Platform: For many years our driver mobile app has been translated into multiple local languages enabling our drivers to use the APP in their own local language. We have recently released the ability for our users to change the language of the main Dispatcher app to be viewed in their own local language which helps with adoption especially in those countries where English is not widely spoken. • CargoWise One Integration: We now fully integrate with CargoWise One out of the box in a two directional integration. Yojee can automatically receive transport bookings from any of the CargoWise One modules (Forwarding, Customs, Warehouse, Shipping, Freight Station) and send back Estimated Time of Arrival calculations, Actual time-in and time-out states and time, milestone updates and the POD. This dramatically improves value to both CargoWise One and Yojee users. Enhancements to Partner Flows and Visibility: Recognising the flow of information between upstream shippers, forwarders, warehouses, transporters and their downstream contracted • YOJEE LIMITED - ANNUAL REPORT 2023 12 transport partners is what makes us different, significant time and effort has been spent improving these flows, user experience, dashboards and rating between up and down stream partners. • Vessel Schedules: We now manage vessel schedules within Yojee. This gives our customers better visibility when vessel schedules change. Quite often when a vessel is going to be early or late into port can result in a complete replan of your fleet. Being notified and having the ability to filter and report on these schedules minimises the overall impact to our customers fleets. • GEO Fencing for Mobility: We can now define GEO fences by address which assists with the • • automation of timestamping when drivers arrive and leave a specific location. This greatly increases the quality of data which impacts Delivered In Full and On Time (DIFOT) statistics and charges. Personalised and Advance Filtering: We recognise that all our customers' businesses are different and the type of freight they plan and track through their networks varies greatly. We have provided the ability for fleet allocators to personalise their planning experience to meet the requirements of their own fleets. This has resulted in greater productivity, less clicks and less mistakes. Product Feature Tracking: We now track and report on the usage of every screen, button and workflow of every product feature allowing our product team to better understand how our product is being used and by who it is being used by. It plays a significant role in the feedback loop of our product development and interaction. 10. Customer Success With travel back available, Yojee has been providing on-premises onboarding and go live support including hypercare periods. This has allowed for much stronger adoption and faster time to projected transaction volumes. In fact, in a recent deployment, in under 7 days Yojee took a customer from training to go live to full penetration of projected volumes. This is a model the company will continue to pursue. The rapid time to value is a strong selling proposition for decision makers who are nervous about investing in long term deployments and is reflective of the hard work the company has put into the simplicity of operation. 11. Partnerships • Yojee has partnerships aiming to meet our target customer base ‘where they already are’ which include: Industry bodies where our target customers typically congregate to learn best practice, network and grow their businesses. Systems Integrators where our target customers are typically receiving onboarding and training support for systems such as SAP and Wisetech. • • National Businesses who are heavily engaged in supply chains and bring influence to a sales process. Yojee has a simple and commercially competitive partnership model that provides commissions on deals for 1 to 3 years and has fostered numerous collaborative relationships. This program has opened avenues for mutually beneficial partnerships, enhancing the reach and impact of our solutions through strategic alliances, co-marketing endeavours, and innovative integrations. The ‘go to where your customers are’ approach means our partners are selected based on their business strategy and customer base, ensuring our target customers are in that same pool. We are very happy with this approach yielding two new customers to date. 12. Cost base Our unwavering focus on operational efficiency has translated into a substantial reduction in operating costs. This prudent approach has allowed us to extend our runway as we grow topline revenue and positions us well to navigate challenges and seize opportunities on the horizon. The Company has reduced its net operating cash burn by circa 30% over each of the prior 3 quarters or 65% in total; $2.0m in Q1 FY2023 down to $710k in Q4 FY2023. YOJEE LIMITED - ANNUAL REPORT 2023 13 13. Sustainability In the realm of sustainability and responsible business practices, we have made meaningful strides in our Environmental, Social, and Governance (ESG) efforts. Our commitment to these principles remains steadfast, and we are actively exploring avenues to contribute positively to society and the environment through supporting more efficient and sustainable transport networks along with considering financial (through speeding up the receipt of goods payment cycle) and quality of life benefits for participants in these large supply chains we support. In Yojee’s Sustainability feature set and roadmap the current capabilities exist and are blueprinted. Current: • Go Paperless Initiative. • Consolidation of orders to reduce number of vehicles. • Optimisation of vehicles to reduce distance travelled by vehicles. Future: • Vehicle types to include fuel type to capture electric and bio-diesel vehicles in the network. • Carbon calculator for accurate Scope 3 emission report per job. • Carbon Dashboards for planning and procuring transport based on trending down emissions used. Scoreboards on carbon efficiency. Procurement support based on cheapest or greenest transport option. • • 14. Accreditation and Security We have strengthened the business through certifications such as ISO27001 that help us provide comfort to cyberaware enterprise customers that Yojee is a safe choice. ISO/IEC 27001 is an international standard focused on information security by International Organization for Standardization (ISO), in partnership with the International Electrotechnical Commission (IEC). This means Yojee follows best practice processes both throughout the organization along with best practice in cybersecurity. 15. Outlook The Company has been aggressively focused on the further commercialisation of the platform with a go- to-market strategy which includes: Strong direct sales pipeline to commercialise in FY2024. • • Maturing Partner Program with webinars and events schedules and leads beginning to flow and convert. • Country specific engagements. Our business outlook remains promising as we continue to pursue these strategies. Our expansion efforts, including those targeting partners operating in the European market, are grounded in a pragmatic approach to growth and market penetration. As we navigate through an industry that has recently witnessed substantial drops in revenue and freight volumes, higher interest rates and cyber security threats, we feel we have set ourselves correctly with our operating costs adjusted to allow time for these key challenges to correct. Key factors contributing to our confidence include our collaboration with leading system integrators has enhanced our capabilities in SAP and Cargowise integrations, positioning us as a trusted partner to address the challenges the industry faces in integrating various dimensions of land, air and ocean freight networks into a single cohesive system. These partnerships have bolstered our market presence and enabled us to expand our sales pipeline. Ongoing research and development continue to drive innovation, and we are refining our go-to-market strategies to capitalize on these emerging opportunities. We continue to very closely monitor our cash burn which has been significantly reduced over recent quarters. Following further initiatives, we expect cash burn to again reduce further. YOJEE LIMITED - ANNUAL REPORT 2023 14 16. Associated Risks As part of implementing its strategy there are a number of risks. These risks may affect the future strategy, operating and financial performance of Yojee Limited and the value of Yojee Limited shares. 16.1 Key personnel Yojee Limited relies on a number of key personnel to conduct the business including certain personnel who are named as Key Management Personnel in Note 10. If such key personnel were to leave the business or for other reasons could not perform their duties, and there was an inability to recruit suitable replacements, this could result in an inability to continue to promote or operate the business plan. 16.2 Going concern The ability of the Company to continue to meet its cash requirements to maintain its operations and meet its financial obligations as they fall due depends on continuing to grow the business, increasing revenue, controlling costs and raising additional funds. Failure to raise additional funds may result in the Company not being able to meet its financial obligations as they fall due. 16.3 Customer acquisition Yojee Limited is dependent on growing its existing and new customers usage volumes to generate income over and above its operating expenses. Failure to do so will negatively impact the Company’s financial position. 16.4 Competition There is a risk that incumbents or new entrants to the market duplicate Yojee Limited’s technology and business model. The industry in which Yojee operates is competitive and includes companies with significantly greater financial, technical, human, research and development and marketing resources than currently available to Yojee. Consequently, Yojee's current and future technologies and products may become obsolete or uncompetitive resulting in adverse effects on revenue, margins and profitability. YOJEE LIMITED - ANNUAL REPORT 2023 15 AUDITOR’S INDEPENDENCE DECLARATION Grant Thornton Audit Pty Ltd continues in office in accordance with s.327 of the Corporations Act 2001. Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Directors Edward Clarke Managing Director 27 September 2023 YOJEE LIMITED - ANNUAL REPORT 2023 16 A c o p y o f t h e a u d i t o r (cid:213) s i n d e p e n d e n c e d e c l a r a t i o n u n d e r s . 3 0 7 C o f t h e C o r p o r a t i o n A c t 2 0 0 1 i n r e l a t i o n t o t h e a u d i t o f t h e f u l l y e a r i s i n c l u d e d i n p a g e 1 7 . Grant Thornton Audit Pty Ltd Level 22 Tower 5 Collins Square 727 Collins Street Melbourne VIC 3008 GPO Box 4736 Melbourne VIC 3001 T +61 3 8320 2222 Auditor’s Independence Declaration To the Directors of Yojee Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Yojee Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants D G Ng Partner – Audit & Assurance Melbourne, 27 September 2023 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. #10101406v1w 17 DIRECTORS’ DECLARATION In the Director’s opinion: a. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; b. the attached financial statements and notes thereto are in compliance with International Financial Reporting Standards, as stated in Note 3 to the financial statements; and c. the attached financial statements and notes thereto, are in accordance with the Corporations Act 2001, including compliance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and give a true and fair view of the financial position and performance of the Group. The Directors have been given the declarations required by s.295A of the Corporations Act 2001. Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001. On behalf of the Directors YOJEE LIMITED - ANNUAL REPORT 2023 18 E d w a r d C l a r k e M a n a g i n g D i r e c t o r 2 7 S e p t e m b e r 2 0 2 3 Grant Thornton Audit Pty Ltd Level 22 Tower 5 Collins Square 727 Collins Street Melbourne VIC 3008 GPO Box 4736 Melbourne VIC 3001 T +61 3 8320 2222 Independent Auditor’s Report To the Members of Yojee Limited Report on the audit of the financial report Opinion We have audited the financial report of Yojee 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, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a b giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the year ended on that date; and 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 auditor independence requirements of 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. w 19 Material uncertainty related to going concern We draw attention to Note 3.4 in the financial statements, which indicates that the Group incurred a net loss before income tax expense of $6,356,884 during the year ended 30 June 2023, and a net operating cash outflow of $5,191,214. As stated in Note 3.4, these events or conditions, along with other matters as set forth in Note 3.4, indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 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. Key audit matter How our audit addressed the key audit matter Revenue – Revenue recognition (Note 5) During the year ending 30 June 2023, the Group has two Our procedures included, amongst others: main revenue streams: software revenue ($1,012,612) and network revenue ($1,197,324). • Obtaining an understanding of the nature of revenue transactions and evaluating management’s revenue A customer contract can be made up of both streams and recognition and accounting policies for compliance; may include numerous performance obligations achieved at a point in time and over time. Management judgement is required to allocate a contract’s transaction price across the various performance obligations • Considering the appropriateness of management's assessment of revenue streams in accordance with accounting standard AASB 15 Revenue from contracts with customers; and the period over which performance obligations are • Selecting a sample of revenue transactions and tracing to satisfied. This area is a key audit matter due to the judgement required by management to ensure revenues are recognised in accordance with AASB 15 Revenues from Contracts with Customers. supporting documentation to assess whether revenue is being recognised at the appropriate amount and in accordance with revenue recognition policies; • Verifying revenues not earned during the year are appropriately recognised as a contract liability at year end; • Completing an analytical review of revenues recognised during the year compared to the prior year; • Selecting a sample of revenue transactions before year end and after year end to verify revenues were recognised in the appropriate period; and • Assessing the adequacy of disclosures for compliance with the revenue recognition requirements of Australian Accounting Standards (AASBs). Grant Thornton Audit Pty Ltd 20 Intangible assets – Impairment of intangible assets (Note 8) Software development is core to the Group’s operations and Our procedures included, amongst others: requires judgement as to what an appropriate amortisation period is under AASB 138 Intangible Assets and to be assessed for possible impairment under AASB 136 Impairment of assets. • Understanding and documenting management’s process of determining the carrying value of the intangible assets; • Assessing the appropriateness of the amortisation period for the capitalised software development costs and the As at 30 June 2023, the carrying value of the intangible assets timing of amortisation; relating to internally generated software is $3,487,237. This is a key audit matter due to the high level of management judgement and estimation required to determine; • Reviewing and challenging managements assessment of impairment indicators under AASB 136; • Obtaining managements impairment model and assessing − the useful life of the asset and the timing of for compliance with AASB 136; amortisation; and • Verifying the mathematical accuracy of the discounted − whether there are impairment indicators and to cash flow model and evaluating the methodology used for determine the expected future economic benefit to be appropriateness; derived from the intangible asset. • Assessing the appropriateness of key judgements and assumptions and performing sensitivity analysis on the inputs in the value in use model; • Utilising an auditor's expert to assess the reasonableness of key inputs and assumptions used in the discounted cash flow model; • Evaluating whether the recoverable value of the assets exceed or are equal to their carrying value; and • Evaluating the disclosures in the financial statements for appropriateness and consistency with accounting standards. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our 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 Group 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 Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Grant Thornton Audit Pty Ltd 21 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: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This description forms part of our auditor’s report. Report on the remuneration report Opinion on the remuneration report We have audited the Remuneration Report included in pages 5 to 8 of the Directors’ report for the year ended 30 June 2023. In our opinion, the Remuneration Report of Yojee Limited, for the year ended 30 June 2023 complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Group 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. Grant Thornton Audit Pty Ltd Chartered Accountants D G Ng Partner – Audit & Assurance Melbourne, 27 September 2023 Grant Thornton Audit Pty Ltd 22 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023 Revenue and other income Revenue from contract with customers Other income Currency related gains Interest income Expenses Technology and related costs Network delivery and related costs Employee benefits expense Depreciation and amortisation expense Amortisation of intangible assets Consulting fees Auditor remuneration Professional fees Employee benefits – Share-based payments expense Other expenses Loss before income tax expense Income tax expense Note 30 June 2023 $ 30 June 2022 $ 5 6 2,209,936 125,424 2,132,787 98,493 2,068,100 176,332 1,322,909 93,984 (510,737) (1,111,998) (3,582,429) (300,292) (2,897,533) (598,585) (86,250) (362,074) (400,854) (1,072,772) (6,356,884) (12,060) (544,736) (1,068,238) (3,978,414) (278,734) (2,997,635) (563,637) (71,324) (316,857) (1,221,870) (1,074,631) (8,454,751) (10,106) 7 8 11 19 9 Loss attributable to members of the parent entity (6,368,944) (8,464,857) Other comprehensive income: Items that may be reclassified subsequently to profit or loss: – Exchange differences on translation of foreign operations Total comprehensive loss (2,121,142) (8,490,086) (1,342,760) (9,807,617) Earnings/(loss) per share Basic earnings/(loss) per share Diluted earnings/(loss) per share 25 Cents per Share (0.56) (0.56) Cents per Share (0.75) (0.75) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. YOJEE LIMITED - ANNUAL REPORT 2023 23 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023 Current Assets Cash and cash equivalents Trade and other receivables, net Contract assets Other current assets Total Current Assets Non-Current Assets Property Plant and Equipment Intangible assets Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Contract liabilities Provision for employee entitlements Lease liabilities Total Current Liabilities Non-Current Liabilities Contract liabilities Lease liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Share capital Share-based payment reserve Foreign currency reserve Accumulated losses Total Equity Note As at 30 June 2023 $ As at 30 June 2022 $ 12 13 5 14 7 8 15 5 16 17 5 17 18 3,580,970 314,764 114,655 115,575 4,125,964 11,441,938 321,923 139,791 153,686 12,057,338 185,563 3,487,237 3,672,800 7,798,764 175,733 3,929,743 4,105,476 16,162,814 532,040 36,306 125,719 140,653 834,718 800,512 134,787 174,375 53,759 1,163,433 57,660 24,430 82,090 916,808 28,243 - 28,243 1,191,676 6,881,956 14,971,138 54,451,456 5,588,863 (3,238,133) (49,920,230) 6,881,956 54,391,956 5,247,459 (1,116,992) (43,551,285) 14,971,138 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. YOJEE LIMITED - ANNUAL REPORT 2023 24 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023 Share capital Foreign currency reserve Share-based payment reserve Accumulated losses Total $ $ $ $ $ Balance at 1 July 2022 54,391,956 (1,116,992) 5,247,459 (43,551,285) 14,971,138 Loss after tax for the period - - - (6,368,944) (6,368,944) Exchange differences arising on translation - (2,121,142) - - (2,121,142) of foreign operations Total comprehensive loss - (2,121,142) - (6,368,944) (8,490,086) Employee share ownership expense - - 400,854 - 400,854 Share-based payments options and rights 59,500 - (59,450) - 50 Balance at 30 June 2023 54,451,456 (3,238,134) 5,588,863 (49,920,229) 6,881,956 Balance at 1 July 2021 52,463,659 225,768 5,203,787 (35,086,428) 22,806,786 Loss after tax for the period - - - (8,464,857) (8,464,857) Exchange differences arising on translation - (1,342,760) - - (1,342,760) of foreign operations Total comprehensive loss - (1,342,760) - (8,464,857) (9,807,617) Employee share ownership expense - - 1,221,870 - 1,221,870 Share-based payments options and rights 1,928,297 - (1,178,198) - 750,099 Balance at 30 June 2022 54,391,956 (1,116,992) 5,247,459 (43,551,285) 14,971,138 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. YOJEE LIMITED - ANNUAL REPORT 2023 25 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023 Cash Flows From Operating Activities Receipts from customers Interest received Other Income Income Taxes Paid Payments to suppliers and employees Net cash used in operating activities Cash Flows From Investing Activities Payments for property, plant and equipment Payments for intangible assets Proceeds from disposal of property, plant and equipment Note 30 June 2023 $ 30 June 2022 $ 23 2,208,779 73,761 115,161 (61,018) (7,527,897) (5,191,214) (31,694) (2,462,358) 19,533 1,643,452 93,982 134,854 (7,307) (7,218,683) (5,353,702) (117,011) (2,012,337) 296 Net cash used in investing activities (2,474,519) (2,129,052) Cash Flows From Financing Activities Proceeds from issue of equity securities Repayment of lease liabilities Interest paid on leases Net cash flows (used in) / from financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of period Exchange differences on cash and cash equivalents Cash and cash equivalents at the end of period 12 50 (210,792) (9,634) (220,376) (7,886,109) 11,441,938 25,141 3,580,970 750,100 (214,172) (5,981) 529,947 (6,952,807) 18,402,652 (7,907) 11,441,938 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes YOJEE LIMITED - ANNUAL REPORT 2023 26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023 1. GENERAL INFORMATION Yojee Limited (the “Company”) is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange (“ASX”). Yojee Limited is a for-profit entity for the purpose of preparing the financial statements. The addresses of its registered office and principal place of business are disclosed in the introduction to the financial report. The principal activities of the Company and its subsidiaries (collectively, the “Group”) are described in the Directors’ Report. 2. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS New Accounting Standards and Interpretations Adopted During the Year The amended accounting standards and interpretations issued by the Australian Accounting Standards Board (“AASB”) during the year that were mandatory were adopted. None of these amendments or interpretations materially affected any of the amounts recognised or disclosures in the current or prior year. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. YOJEE LIMITED - ANNUAL REPORT 2023 27 3. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. 3.1 Statement of compliance These consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and comply with other requirements of the law. Australian Accounting Standards incorporate International Financial Reporting Standards (IFRS’s) as issued by the International Accounting Standards Board. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with IFRS’s. 3.2 Basis of preparation The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars. 3.3 Principles of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries as listed in Note 28 (collectively the “Group”). Control is achieved where the Company is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns. All inter-company balances and transactions between entities, including any unrealised profits or losses, where applicable, have been eliminated on consolidation. Accounting policies of subsidiaries are consistent with those policies applied by the parent entity. 3.4 Going concern The financial report has been prepared on the going concern basis which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. The going concern of the Group is dependent upon it generating increased cash receipts from sales growth, managing its costs and raising additional funds through future capital raisings. For the year ended 30 June 2023 the Group recorded a loss before income tax expense of $6,356,884 (2022: $8,454,751), a net operating cash outflow of $5,191,214 (2022: $5,353,702), cash and cash equivalents of $3,580,970 (2022: $11,441,938), a net assets position of $6,881,956 (2022: $14,971,138) and a market capitalisation of approximately $18 million. The Directors have noted that, while the Group continues to operate at a loss, there has been marginal year on year growth in revenue with a significant reduction in the quarterly operating expenditure run-rate and there is a reasonable expectation of the revenue growth increasing. The Directors continue to monitor the ongoing funding requirements of the Group on a monthly basis including the monitoring of costs. During FY23, the Group conducted multiple exercises to review its cash outflows with the aim of extending its funding runway. This resulted in the Group reducing its net operating cash outflows by approximately 30% over each of the prior 3 quarters or approximately 65% in total; $2.0m in Q1 FY2023 down to $0.7m in Q4 FY2023, providing a stable foundation for future expansion. YOJEE LIMITED - ANNUAL REPORT 2023 28 T h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s w e r e a u t h o r i s e d f o r i s s u e b y t h e d i r e c t o r s o n 2 7 S e p t e m b e r 2 0 2 3 . The Directors believe that the Group can meet its financial obligations when they fall due enabling it to continue as a going concern and as such are of the opinion that the financial report has been appropriately prepared on a going concern basis. The Group continues to be heavily engaged with its investors and capital markets advisors and has a high level of confidence in the Group’s ability to raise funds in the near future subject to prevailing market conditions. Should the Group be unable to obtain the funding, there is a material uncertainty as to whether the Group will be able to continue as a going concern, and therefore, whether it will be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report. The financial report does not include any adjustment relating to recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern. The following significant accounting policies have been adopted in the preparation and presentation of the financial report: 3.5 Revenue recognition 3.5.1 Software revenue Revenue arises mainly from the provision of software subscription and related services including, but not limited to, Yojee SaaS software setup services, software customisation and usage charges. To determine whether to recognise revenue, the Group follows a 5-step process: 1. 2. 3. 4. 5. Identifying the contract with a customer Identifying the performance obligations Determining the transaction price Allocating the transaction price to the performance obligations Recognising revenue when/as performance obligation(s) are satisfied The Group typically enters into transactions involving a range of the Group’s products and services. In all cases, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties. Revenue is recognised over time, 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 as contract liabilities 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. Revenue from software subscription, set up service and customisation services is recognised over time as the benefit is consumed by the customer. Customisation services primarily relate to features or functionalities that are developed for specific customers without which the software is still fully functional and usable. The Group allocates the transaction price between the software subscription and other performance obligations identified in a contract on a relative stand-alone selling price basis. Typically, customers are billed in advance for these services. The relevant payment due dates are specified in each contact and in all invoices. Consideration received prior to the actual delivery and customer usage of the customised software is deferred until such event. However, consideration received under contract with customisation service that is terminated prior to delivery and actual usage by the customer is recognised as revenue to the extent that it is non-refundable. YOJEE LIMITED - ANNUAL REPORT 2023 29 Revenue from software usage charges is recognised over time as the performance obligation is satisfied. Customers are billed in arrears for such charges and would typically result in a contract asset in the statement of financial position. The Group receives a fixed and variable fee for its software contracts. 3.5.2 Network revenue Network revenue relates to revenue arising from delivery services in Singapore. Deliveries are split into various categories such as express, same day and next day deliveries. Revenue is recognised upon successful delivery, thus performance obligation is satisfied at a point in time. The Group recognises contract liabilities for consideration received or billed in respect of unsatisfied performance obligations and reports these amounts as contract liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives or bills the consideration, the Group recognises either a contract asset in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due. Satisfied performance obligations that are received or billed are recognised as receivables. Impairment assessment for contract assets are described in Note 3.16. 3.5.3 Interest income Interest income is recognised on an accrual basis using the effective interest method. 3.5.4 Government grants Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant on the balance sheet and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual instalments. 3.6 Share-based payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is determined by application of a methodology which is appropriate for that. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the option reserve. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is re-measured, with any changes in fair value recognised in profit or loss for the year. YOJEE LIMITED - ANNUAL REPORT 2023 30 3.7 Taxation The income tax expense (revenue) comprises current income tax expense (income) and deferred tax expense (income). 3.7.1 Current tax Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. 3.7.2 Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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, based on tax rates (and tax laws) that have been enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related assets or liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. 3.7.3 Current and deferred tax for the period Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is included in the accounting for the business combination. YOJEE LIMITED - ANNUAL REPORT 2023 31 3.8 Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except: a. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or for receivables and payables which are recognised inclusive of GST. b. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable, the tax authority. 3.9 Leases The Group as a lessee The Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: • • • the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use. Measurement and recognition of leases as a lessee At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. Right-of-use asset balance is included in property, plant and equipment balance. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. YOJEE LIMITED - ANNUAL REPORT 2023 32 Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in current and non-current lease liabilities. 3.10 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 3.11 Foreign currencies Foreign currency translation The consolidated financial statements are presented in Australian dollars, which is the parent entity’s functional and presentation currency. Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. 3.12 Operating segments Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. 3.13 Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. YOJEE LIMITED - ANNUAL REPORT 2023 33 3.14 Impairment of non-financial assets For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If events or changes in circumstances indicate a possible impairment, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are largely independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset excluding goodwill (cash- generating unit) is increased to the revised estimate of it recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase. 3.15 Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares issued during the financial period. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after-income tax effect of interest and other financing costs associated with the 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. 3.16 Financial instruments Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. YOJEE LIMITED - ANNUAL REPORT 2023 34 Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expired. Classification and subsequent measurement of financial assets Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition: • amortised cost • fair value through profit or loss (FVPL) Classifications are determined by both: • • the Group’s business model for managing the financial asset the contractual cash flow characteristics of the financial assets All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables, which is presented within other expenses. Subsequent measurement financial assets (a) Financial assets at amortised cost Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL): • • they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade receivables fall into this category of financial instruments. (b) Financial assets at fair value through profit or loss (FVPL) Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVPL. There are no financial instruments that fall into this category for the financial year ended. Impairment of financial assets AASB 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit losses (“ECL”) model’. Instruments within the scope of the requirement include trade receivables and contract assets recognised and measured under AASB 15 that are not measured at fair value through profit or loss. The Group considers a broad range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. YOJEE LIMITED - ANNUAL REPORT 2023 35 The Group makes use of a simplified approach in accounting for trade receivables as well as contract assets and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. The Group assess impairment of trade receivables on a collective basis as they possess credit risk characteristics based on the geographical location where the receivables originates. The Group also considers the inherent higher credit risk for amounts as the number of days overdue increases for those amounts. Classification and measurement of financial liabilities Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss. All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. The Group’s financial liabilities include trade and other payables. The Group does not have derivative instruments. 3.17 Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement. Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense. 3.18 Employee leave entitlements Liabilities accruing to employees in respect of annual leave, long service leave, sick leave and any other statutory requirements are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts based on the employee’s compensation and outstanding leave balances. 3.19 Property, plant and equipment Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. YOJEE LIMITED - ANNUAL REPORT 2023 36 Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation on plant & equipment assets is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows: Category Computer Equipment Useful Life 2 years The assets’ residual values, if any, and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An assets’ carrying amount is written down immediately to its recoverable amount if the assets’ carrying amount is greater than its estimated recoverable amount. Such assessments are performed at the end of the financial reporting period and whenever there is an indication of impairment. Gains and losses on disposals are determined by comparing proceeds with the carrying amount and recognised in profit or loss. There were no disposals during the financial year. Right-of-use asset balance is included in property, plant and equipment balance. Depreciation on right-of- use asset is described in Note 3.9. 3.20 Intangibles Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when the technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably. Subsequent measurement Amortisation commences when the asset is ready for commercial use. All finite-lived intangible assets, including capitalised internally developed software, are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives. Residual values and useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing as described in Note 3.14. Change in the estimated useful life of internally developed software During the year, there was a change in the estimate for the useful life of the internally developed software which impacts the consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position. The estimated useful life of the software has been extended by and additional 2 years beyond the previously estimated useful life of 3 years. The internally developed software continues to be used by existing software customers and the company expects further economic benefits to continue to be realised in the future from these customers and new customers. As such, the estimated useful life has been extended by 2 years. Furthermore, the Company continues to improve the internally developed software and will continue to capitalise relevant expenditure using the same methodology as before but will be amortised over the new remaining useful life from 1-Jan- 2023. YOJEE LIMITED - ANNUAL REPORT 2023 37 To provide transparency regarding the financial impact of this change, a table is included below illustrating a comparison between the financial statements based on the previous estimated useful life and the revised extended estimated useful life. This table outlines the effects on the financial statements, enabling stakeholders to clearly understand the implications of this change on our financial reporting. The change in estimate has been prospectively applied from 1 January 2023. Consolidated Statement Of Profit Or Loss And Other Comprehensive Income Amortisation of intangible assets (2,897,533) (6,384,860) 3,487,327 Revised Useful Life Initial Useful Life $ $ Impact $ Consolidated Statement Of Financial Position Intangible assets The following useful lives are applied: 3,487,237 - 3,487,237 Intangible Asset Internally-developed Software Initial Useful Life 3 years Intangible Asset Internally-developed Software Revised Useful Life 5 years Any capitalised internally developed software that is not yet complete is not amortised but is subject to impairment testing at each reporting date or more frequently if events or changes in circumstances indicate a possible impairment as described in Note 3.14. Amortisation has been included within depreciation, amortisation and impairment of non-financial assets. When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses. YOJEE LIMITED - ANNUAL REPORT 2023 38 4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, which are described in Note 3, the directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgments and estimates in applying accounting policies Share-based payment transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the American Binomial, Black-Scholes or Hoadley’s ESO1 methodology taking into account the terms and conditions upon which the instruments were granted. The valuation methodologies used require management judgement on inputs used around volatility as well as other market vesting conditions. The accounting estimates and assumptions relating to the equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Impairment of internally-developed software Subsequent to capitalisation, management monitors whether the recognition requirements continue to be met and makes judgements in respect to whether there are any indicators that capitalised costs may be impaired. Indicators of impairment may arise from internal or external events or circumstances. Amongst the factors considered during the year were market demand, industry use for the software, as well as possible obsolescence of capitalised costs due to strategic changes in product design and build. Where indicators of possible impairment are identified, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an discount rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable interest rate. The Group has concluded that there were possible indicators of impairment as of 30 June 2023 and has therefore calculated the recoverable value of the asset using a Discounted Cashflow Forecast (DCF). The Group has prepared a 5-year forecast and used the Gordon Growth Model to estimate the terminal value. The cashflows were discounted to present value using a discount rate of 10% and the perpetual growth rate was estimated at 2%. The calculated recoverable value of the asset is greater than the carrying value of the asset and as such there is no observable impairment. The business continues to see demand for the software from market players and that there was no major refactoring or rebuild done to the product during the year. YOJEE LIMITED - ANNUAL REPORT 2023 39 Useful lives of depreciable assets The Group reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain software and IT equipment. As disclosed in Note 3.20, the useful life of the internally-developed software has been reassessed during the year and adjusted where appropriate. Provision for expected credit losses of trade receivables and contract assets The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on the geographical location where the receivables originate. The Group also considers the inherent higher credit risk for amounts as the number of days overdue increases for those amounts. The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust historical credit loss experience with forward-looking information. At every reporting date, historical default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. Lease term The Group reviews its estimate of the expected term of use of leases based on all facts and circumstances present at the time of assessment. Uncertainties in these estimates relate to changing business needs. YOJEE LIMITED - ANNUAL REPORT 2023 40 5. REVENUE FROM CONTRACT WITH CUSTOMERS Software revenue arises mainly from the provision of software subscriptions. Network revenue relates to revenue arising from delivery services in Singapore. Detailed description of the Group’s revenue is disclosed in notes 3.5.1 and 3.5.2. The Group’s revenue disaggregated by pattern of revenue recognition is as follows: Transferred at a point in time Transferred over time Total For the financial year ended 30 June 2023 Software Network $ - 1,012,612 1,012,612 $ 1,197,324 - 1,197,324 For the financial year ended 30 June 2022 Software Network Transferred at a point in time Transferred over time Total Reclassification of software revenue $ - 951,544 951,544 $ 1,116,556 - 1,116,556 Total $ 1,197,324 1,012,612 2,209,936 Total $ 1,207,783 860,317 2,068,100 During the period, software revenue that was previously categorised as being recognised at a point in time has now been reclassed as being recognised over time. The financial impact of this change in the current financial year is $124,967 (2022: $91,227). The following aggregated amounts of transaction prices relate to the performance obligations from existing contracts that are unsatisfied or partially unsatisfied. Performance obligations are expected to be satisfied over the remaining duration of the related subscription period. Unsatisfied performance obligations as at 30 June 2023 are expected to be satisfied by the financial year ending 30 June 2026. Transaction price of (partially) unsatisfied performance obligations 388,971 897,940 30 June 2023 $ 30 June 2022 $ YOJEE LIMITED - ANNUAL REPORT 2023 41 The Group’s contract assets and contract liabilities balances for the financial year ended are as follows: 6. OTHER INCOME During the financial year, government grants mainly relate to the Job Growth Incentive (“JGI”) and Job Support Scheme (“JSS”) from the Singapore Government. JSS is calculated on a monthly based on the employer’s mandatory CPF contribution. It aims to provide support to employers to expand local hiring in Singapore. Government grants are included in other income during the year as described in Note 3.5.4. YOJEE LIMITED - ANNUAL REPORT 2023 42 7. PROPERTY PLANT AND EQUIPMENT YOJEE LIMITED - ANNUAL REPORT 2023 43 8. INTANGIBLE ASSETS YOJEE LIMITED - ANNUAL REPORT 2023 44 9. INCOME TAX EXPENSE (a) The components of income tax expense comprise: Current income tax charge Deferred income tax relating to origination and reversal of temporary differences Total tax expense attributable to continuing operations, 30 June 2023 30 June 2022 $ $ 12,060 - 10,106 - representing total tax for the year 12,060 10,106 (b) Numerical reconciliation of income tax expense to prima facie tax payable: Loss from operations before income tax 30 June 2023 $ 30 June 2022 $ (6,356,884) (8,454,751) Prima facie tax benefit* (1,907,065) (2,536,425) Expected tax expense Adjustment for tax-rate differences in foreign jurisdictions Adjustment for non-deductible expenses: - Other non-deductible expenses (Less)/Add Temporary Differences - Temporary differences not recognised - Tax losses not recognised Income tax expense (c) The following deferred tax assets and (liabilities) have not been brought to account as: Tax losses - revenue Tax losses - capital Temporary differences 12,060 10,106 2,196,124 2,469,183 (708,523) 419,464 (514,097) 581,339 12,060 10,106 3,927,563 469,308 (691,214) 3,705,657 3,508,099 469,308 17,311 3,994,718 *The tax rate used in the above reconciliation is the corporate tax rate of 30% (2022: 30%) payable by Australian corporate entities on taxable profits under Australian tax law. The taxation benefits of losses and temporary differences not brought to account will only be obtained if: The Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised: i) ii) The Group continues to comply with the conditions for deductibility imposed by law; and No change in tax legislation adversely affects the Group in realising the benefits from deducting the losses. YOJEE LIMITED - ANNUAL REPORT 2023 45 10. KEY MANAGEMENT PERSONNEL a. The names of key management personnel of the entity at any time during the financial year ended 30 June 2023 are: Mr David Morton – Chairman (Appointed 3 March 2020) Mr Edward Clarke – Managing Director (Appointed 26 May 2016) Mr Ray Lee – Non-Executive Director (Appointed 3 March 2020) Mr Gary Flowers – Non-Executive Director (Appointed 1 May 2019; Resigned on 18 May 2023) Ms Saskia Groen-Int-Woud – Non-Executive Director (Appointed 1 September 2022; Resigned on 1 August 2023) b. Compensation practices Details of the remuneration of key management personnel of the consolidated entity are set out in the below table. The remuneration table listed below comprises 12 months of remuneration of the Group. c. Aggregate Key Management Personnel Compensation Information regarding individual directors and executive’s compensation and some equity instruments disclosures as permitted by Corporations Regulations 2M.3.03 and 2M.6.04 are provided in the Remuneration Report section of the Directors Report. 11. AUDITOR REMUNERATION * Grant Thornton Audit Pty Ltd # RSM Vietnam Auditing and Consulting Company Limited – Yojee Ops Vietnam Company Limited (Vietnam); and YH Tan & Associates PLT – Yojee Sdn. Bhd. (Malaysia) YOJEE LIMITED - ANNUAL REPORT 2023 46 12. CASH AND CASH EQUIVALENTS Cash at Bank – AUD Accounts Cash at Bank – SGD Accounts Cash at Bank – USD Accounts Cash at Bank – VND Account Cash at Bank – MYR Accounts 13. TRADE AND OTHER RECEIVABLES 30 June 2023 30 June 2022 $ 2,458,135 502,047 499,299 98,183 23,306 3,580,970 $ 10,357,804 400,989 569,320 113,086 739 11,441,938 All the receivables are short term and the carrying values of the items are considered to be a reasonable approximation of fair value. All of the Group’s trade receivables have been reviewed for expected credit loss (ECL). An allowance for expected credit losses of $24,218 (2022: $8,811), including currency gain/loss, has been recorded accordingly within other expenses. In estimating ECL, the Group considers reasonable and supportable information that is relevant and available. This includes qualitative and quantitative information and analysis, based on the Group’s historical experience and informed credit risk. YOJEE LIMITED - ANNUAL REPORT 2023 47 14. OTHER CURRENT ASSETS 15. TRADE AND OTHER PAYABLES All the payables are short term and the carrying values of the items are considered to be a reasonable approximation of fair value. 16. PROVISION FOR EMPLOYEE ENTITLEMENTS Provision for employee entitlements represents vested annual leave entitlements accrued. 17. LEASES Lease liabilities are presented in the consolidated statement of financial position as follows: YOJEE LIMITED - ANNUAL REPORT 2023 48 The Group has leases for office premises and workspaces. The future minimum lease payments were as follows: Lease payments not recognised as a liability The group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The expense relating to payments not included in the measurement of a lease liability was $64,180 (2022: $32,045). This amount relates to short-term leases. 18. SHARE CAPITAL Share capital consists only of fully paid ordinary shares. YOJEE LIMITED - ANNUAL REPORT 2023 49 19. SHARE-BASED PAYMENTS Share Options The option reserve records items recognised as expenses on valuation of share options. 2023 Grant date Expiry Date of Options Exercise Price of Options Balance at start of year Expired during the year Exercised during the year Granted during the year Balance at end of the year Exercisable at end of year 22 Nov 2019 1 Apr 2023 $0.100 1,000,000 (1,000,000) 22 Nov 2019 1 Apr 2024 $0.150 1,000,000 - 22 Nov 2019 20 Dec 2022 $0.100 1,500,000 (1,500,000) 22 Nov 2019 20 Dec 2022 $0.150 1,500,000 (1,500,000) 18 Feb 2020 18 Feb 2023 $0.075 2,500,000 (2,500,000) 27 Nov 2020 27 Nov 2023 $0.080 9,000,000 27 Nov 2020 27 Nov 2023 $0.070 5,000,000 27 Nov 2020 5 Aug 2024 $0.100 2,500,000 27 Nov 2020 5 Aug 2025 $0.150 2,500,000 9 Nov 2022 8 Dec 2025 $0.100 9 Nov 2022 8 Dec 2025 $0.200 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,000,000 1 1,000,000 - - - - - - 9,000,000 2 9,000,000 5,000,000 3 5,000,000 2,500,000 4 2,500,000 2,500,000 5 2,500,000 2,000,000 2,000,000 6 2,000,000 2,000,000 7 - - 26,500,000 (6,500,000) - 4,000,000 24,000,000 20,000,000 1 1,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.15 on or before 1 April 2024). 2 9,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.08 on or before 27 November 2023). 3 5,000,000 unquoted options vesting on a 12-month service condition (exercisable at $0.07 on or before 27 November 2023). 4 2,500,000 unquoted options vesting on a 12-month service condition (exercisable at $0.10 on or before 5 August 2024). 5 2,500,000 unquoted options vesting on a 24-month service condition (exercisable at $0.15 on or before 5 August 2025). 6 2,000,000 unquoted options vesting on a 12-month service condition (exercisable at $0.10 on or before 8 December 2025). 7 2,000,000 unquoted options vesting on a 24-month service condition (exercisable at $0.20 on or before 8 December 2025). For the options granted during the current and prior financial years, American Binomial, Black-Scholes or Hoadley’s ESO1valuation model inputs used to determine the fair value at the grant date are as follows: Grant date Expiry Date Share price at grant date Exercise Price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date 22 Nov 2019 22 Nov 2019 1 Apr 2023 1 Apr 2024 22 Nov 2019 20 Dec 2022 22 Nov 2019 20 Dec 2022 27 Nov 2020 27 Nov 2023 27 Nov 2020 27 Nov 2023 5 Aug 2024 27 Nov 2020 5 Aug 2025 27 Nov 2020 8 Dec 2025 9 Nov 2022 8 Dec 2025 9 Nov 2022 $0.06 $0.06 $0.06 $0.06 $0.21 $0.21 $0.21 $0.21 $0.05 $0.05 $0.10 $0.15 $0.10 $0.15 $0.08 $0.07 $0.10 $0.15 $0.10 $0.20 69% 69% 69% 69% 95% 95% 95% 95% 75% 75% - - - - - - - - - - 2.02% 2.02% 2.02% 2.02% 0.11% 0.11% 0.19% 0.29% 3.35% 3.35% $0.02 $0.02 $0.02 $0.02 $0.17 $0.17 $0.16 $0.16 $0.02 $0.01 Option Valuation In accordance with AASB 2 Share-based Payment, the value of options granted has been independently assessed. YOJEE LIMITED - ANNUAL REPORT 2023 50 Performance Rights The performance rights reserve records items recognised as expenses on valuation of performance rights. 2023 Grant date 8 Oct 2020 8 Oct 2020 3 Nov 2020 10 Mar 2021 3 Nov 2021 3 Nov 2021 21 Jan 2022 28 Nov 2022 28 Nov 2022 28 Nov 2022 30 Nov 2022 30 Nov 2022 Balance at start of year Issued during the year Forfeited during the year Vested during the year Balance at end of the year 500,000 500,000 1,848,404 36,942 920,587 920,587 - - - - - - (500,000) - - - (1,848,404) - (36,942) - - (920,587) (368,264) - 5,000,000 - (5,000,000) - - - - - - 784,944 - (784,944) 747,712 (57,886) - 747,712 (150,288) - 500,000 - (500,000) 1,500,000 - - 9,726,520 4,280,368 (5,576,438) (4,590,877) 1 2 3 4 5 6 7 8 - 500,000 - - - 552,323 - - 689,826 597,424 - 1,500,000 3,839,573 1 500,000 performance rights vesting on a 24-month service condition on 8 October 2022. 2 500,000 performance rights vesting on a 36-month service condition on 8 October 2023. 3 920,587 performance rights vesting on a 19.6-month service condition on 1 July 2023. 4 5,000,000 performance rights vesting on a market condition being 15-trading day volume weighted average price of shares not less than $0.50 by 30 June 2023. The fair value of these performance rights at grant date was $0.0341 per right calculated using the Parisian Barrier1 Model using the following inputs: Share price at grant date of $0.17, exercise price of NIL, expected volatility of 67%, dividend yield of NIL, expiry date of 30 June 2023 and risk-free interest rate of 0.238%. 5 747,712 performance rights vesting on a 7.1-month service condition on 1 July 2023. 6 747,712 performance rights vesting on a 19.1-month service condition on 1 July 2024. 7 500,000 performance rights vesting on a service condition on 31 December 2022. 8 1,500,000 performance rights vesting on a service condition on 31 December 2024. Expenses arising from share-based payment transactions In total, an amount of $400,854 (2022: $1,221,870) has been recognised as an employee share-based payment expense (all of which related to equity-settled share-based payment transactions) in the profit or loss for the financial year ended 30 June 2023 and credited to share-based payment reserve. 20. DIVIDENDS There have been no dividends paid or proposed in respect of the year ended 30 June 2023. 21. RELATED PARTY DISCLOSURES Key Management Personnel Compensation Details of key management personnel compensation are disclosed in the Remuneration Report and Note 10. Transactions with Key Management Personnel Transactions between related parties are on terms and conditions no more favourable than those available to other parties unless otherwise stated. YOJEE LIMITED - ANNUAL REPORT 2023 51 Transactions with Director Related Entities There were no transactions with director related entities during the year other than those disclosed in the Remuneration Report and Note 10. Transactions with Controlled Entities There were no transactions with controlled entities during the year. 22. PARENT ENTITY INFORMATION Set out below is supplementary information about the parent entity. For the purpose of this note, the amounts disclosed relate to the legal parent entity, Yojee Limited, and thus include comparative information with the statement of profit and loss and other comprehensive income representing the results for the full 12-month financial year ended to 30 June 2023. Statement of Profit or Loss and Other Comprehensive Loss after income tax, which represents total comprehensive loss Statement of Financial Position Total Current Assets Total Assets Total Current Liabilities Total Liabilities Equity Contributed Equity Share-based payment reserve Accumulated losses Total Equity Parent 30 June 2023 Parent 30 June 2022 $ $ (36,271,276) (594,522) 6,789,485 7,019,486 137,530 137,530 54,451,456 5,588,863 (53,158,363) 6,881,956 10,263,251 42,886,473 134,144 134,144 54,391,956 5,247,459 (16,887,086) 42,752,329 During the year ended 30 June 2023, the Company has recognised an impairment provision of $37,269,210 (2022: NIL) on the related party receivables at the parent entity level. This impairment provision has no financial impact on the consolidated Group results. Contingent liabilities The parent entity did not have any contingent liabilities as at 30 June 2023. Significant accounting policies The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 3, except that investments in subsidiaries are accounted for at cost, less any impairment. YOJEE LIMITED - ANNUAL REPORT 2023 52 23. NOTES TO THE STATEMENT OF CASH FLOWS (a) Reconciliation of Cash and Cash Equivalents For the purpose of the statement of cash flows, cash includes Cash and cash equivalents (b) Financing Facilities The Group had the following credit card facilities Amounts utilised (c) Reconciliation of Net Loss from ordinary activities after related income tax to net cash flows from operating activities Loss after related income tax Non-cash activities: Share-based payments expense Foreign exchange differences Depreciation and amortisation expense Amortisation of intangible Interest expense on lease liabilities Loss on right-of-use asset disposal Gain on disposal of property, plant and equipment Changes in assets and liabilities, net of effects from Increase in assets: Assets, excluding cash and cash equivalents Increase in liabilities: Liabilities, excluding lease liabilities Net cash used in operating activities 30 June 2023 30 June 2022 $ $ 3,580,970 11,441,938 - 3,580,970 - 11,441,938 (6,368,944) (8,464,857) 400,854 (2,120,801) 300,292 2,897,533 9,634 - 6,004 1,221,870 (1,337,603) 278,734 2,997,635 5,981 - (111) 70,406 (373,199) (386,192) (5,191,214) 317,848 (5,353,702) 24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group’s principal financial instrument is cash and cash equivalents. The main purpose of this financial instrument is to finance the Group’s operations. The Group has other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main risk arising from the Group’s financial instruments is the cash flow interest rate risk. 24.1 Cash flow interest rate risk The Group’s exposure to the risks of changes in market interest rates relates primarily to the short-term deposits with a floating interest rate. These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Group does not engage in any hedging or derivative transactions to manage interest rate risk. Instead consideration is given to a mixture of fixed and variable interest rates. YOJEE LIMITED - ANNUAL REPORT 2023 53 The cash amounts and interest rates effective as at 30 June 2023 are: 5 month term deposit 6 month term deposit Variable Variable Total Cash Amount Effective Rate Maturity $ 692,000 968,500 4,260 1,916,211 3,580,970 % 4.00% 4.15% 2.00% - Date 17 Jul 2023 17 Aug 2023 On-Call On-Call The cash amounts and interest rates effective as at 30 June 2022 were: Variable Total Cash 24.2 Liquidity risk Amount Effective Rate Maturity $ 11,441,938 11,441,938 % - Date On-Call Prudent liquidity risk management implies maintaining sufficient cash to ensure the ability to meet debt requirements. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group aims at maintaining flexibility in funding by having in place operational plans to source further capital as required. As at 30 June 2023, the Group’s liabilities are summarised below: As at 30 June 2022, the Group’s liabilities are summarised below: Current Non-Current Within 6 months $ 800,512 53,759 854,271 6 to 12 months $ 1 - 5 years $ 5+ years $ - - - - - - - - - Trade and other payables Lease liabilities 24.3 Credit Risk Credit risk arises from cash and cash equivalents and outstanding receivables. The cash balances are held in financial institutions with high ratings and the receivables comprise trade and goods and services tax receivables. The Group has assessed that there is minimal risk that the cash and receivables balances are impaired. The Group's maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below: YOJEE LIMITED - ANNUAL REPORT 2023 54 24.4 Capital Risk Management When managing capital, management’s objectives are to ensure the Group continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also maintains a capital structure that ensures the lowest cost of capital available to the Group. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or enter into joint ventures. The Group does not have a defined share buy-back plan. No dividends are expected to be paid in 2023. There is no current intention to incur debt funding on behalf of the Group as on-going development expenditure will be funded via equity or joint ventures with other companies. The Group is not subject to any externally imposed capital requirements. Management reviews management accounts on a monthly basis and reviews actual expenditure against budget on a monthly basis. 24.5 Foreign Exchange Risk Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. Most of the groups transactions are carried out in AUD, SGD and USD. Exposures to currency exchange rates arise from the Group’s overseas sales and purchases. Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts shown are those reported to key management at a consolidated Group level translated into $AUD at the closing rate and excluding intercompany balances: United States Dollar Singapore Dollar Malaysia Ringgit Vietnam Dong Assets 2023 $ 648,065 677,683 28,895 98,712 1,453,355 Liabilities 2023 $ 187 542,493 11,495 46,491 600,666 Assets 2022 $ 685,031 628,738 8,699 120,547 1,443,015 Liabilities 2022 $ 73,962 607,625 9,853 90,729 782,169 Over the past year the Australian Dollar has varied up and down against all currencies. A 10% variance is considered reasonable for sensitivity analysis on this basis. If the $AUD had strengthened against the various currencies by 10% the impact on equity and profit before tax would have been $85,269, if the $AUD had weakened against the various currencies by 10% the impact would have been ($85,269) on equity and loss before tax. YOJEE LIMITED - ANNUAL REPORT 2023 55 25. EARNINGS PER SHARE The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share are as follows: *Earnings are the same as the loss after tax in the statement of profit or loss and other comprehensive income The weighted average number of ordinary shares outstanding during the year ended 30 June 2023 has been calculated as the actual number of ordinary shares of Yojee Limited outstanding during the period after acquisition. Diluted Earnings per Share The rights to options held by existing and new option holders through the cancellation of options will not be included in the weighted average number of ordinary shares for the purpose of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133 Earnings per Share. 26. CONTINGENT LIABILITIES The Group does not have any contingent liabilities as at 30 June 2023. 27. AFTER REPORTING DATE EVENTS Ms Groen-Int-Woud resigned from the Board with effect from 1 August 2023. Ms Groen-Int-Woud’s increased executive commitments have resulted in time constraints on her ability to continue her role on the Board. She will continue to work with Yojee and join Yojee’s Advisory Board. The resignation of Ms Groen-Int-Woud does not have any material impact on the Company's financial position, results of operations, or business performance as of the date of authorisation. On 12th September 2023, the Company announced that, as part of ongoing review of the business performance, it is discontinuing the SendSingapore logistics business in Singapore. Refer to the ASX announcement for further information. Aside from the above, no adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation. YOJEE LIMITED - ANNUAL REPORT 2023 56 28. CONTROLLED ENTITIES The ultimate Australian parent entity and the ultimate parent of the Consolidated Entity is Yojee Limited. For the purposes of this note the parent entity has been deemed as the legal entity being Yojee Limited. Name of Entity Country of Registration Class of Shares SC Resources Pty Ltd (controlled entity) Send Yojee Pty Ltd (controlled entity) Yojee Pte Ltd (controlled entity) Yojee Ops Pte Ltd (controlled entity) Sendyojee Pte Ltd (controlled entity) Yojee Solutions Pte Ltd (controlled entity) Yojee Ops Vietnam Co. Ltd (controlled entity) Yojee SDN.BHD (controlled entity) Yojee (Cambodia) Co., Ltd (controlled entity) Cambodia Australia Australia Singapore Singapore Singapore Singapore Vietnam Malaysia Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary 1 Wholly owned subsidiary of Send Yojee Pty Ltd. 2 Wholly owned subsidiary of Yojee Ops Pte Ltd. Equity Holding 2023 2022 100% 100% 100%1 100%1 100%2 100%2 100%2 100%2 100%2 100% 100% 100%1 100%1 100%2 100%2 100%2 100%2 100%2 29. OPERATING SEGMENTS All revenues and costs are handled centrally and management reviews financial information on a consolidated basis. The group is currently developing a sharing-economy based logistics technology platform primarily targeting the Asia-Pacific region. On this basis it is considered that there is only one operating segment, the details of which are disclosed within this financial report. Yojees key customers remain top 10 global companies such as Maersk, Ceva, Geodis, FLS, Cargo Compass and other enterprise forwarders and key transporters. A large proportion of the Groups revenues are derived from these customers. YOJEE LIMITED - ANNUAL REPORT 2023 57 ADDITIONAL SHAREHOLDER INFORMATION Additional information required by Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The shareholder information set out below was applicable as at 25 September 2023. 1. DISTRIBUTION OF SHAREHOLDERS Analysis of number of shareholders by size of holding: Category of Holding Number of Holders Number of Shares % of Capital 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total 112 13,838 1,282 4,236,862 785 6,337,424 1,910 75,439,679 806 1,049,176,760 4,895 1,135,204,563 0 0.37 0.56 6.65 92.42 100 2. TWENTY LARGEST SHAREHOLDERS The names of the twenty largest holders by account holding of ordinary shares are listed below: Rank Name Units % Units 1 2 3 4 5 6 7 8 9 UBS NOMINEES PTY LTD BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD CITICORP NOMINEES PTY LIMITED REEF INVESTMENTS PTY LTD RAVENHILL INVESTMENTS PTY LTD ICE COLD INVESTMENTS PTY LTD WATEROX PTY LTD AUSTRALIAN EXECUTOR TRUSTEES LIMITED MR BRADLEY JOHN HARRIS 10 GREATSIDE HOLDINGS PTY LTD 11 MR GRANT RUSSELL POVEY 12 ICE COLD INVESTMENTS PTY LTD 13 MR STEPHEN ERNEST ANASTOS + MRS GLENISE KAYE HENDERSON 14 BERGER INVESTMENT FUND PTY LTD 15 MS SUSANN POVEY 16 MRS MICHELLE DENNY 17 BASKERVILLE INVESTMENTS PTY LTD 18 MR RICHARD NEIL WILSON 19 20 STATION NOMINEES PTY LTD JEM INVESTMENT FUND HOLDINGS PTY LTD Total Twenty Largest Shareholders Total Remaining Shareholders Balance 3. RESTRICTED SECURITIES No restricted securities. 82,851,951 60,131,333 47,045,740 36,694,756 35,300,000 31,372,700 25,250,000 25,000,000 18,684,278 18,192,983 17,365,589 14,375,151 13,450,000 12,900,000 11,577,059 10,850,000 10,572,777 10,290,245 10,000,000 9,750,000 7.30 5.30 4.14 3.23 3.11 2.76 2.22 2.20 1.65 1.60 1.53 1.27 1.18 1.14 1.02 0.96 0.93 0.91 0.88 0.86 501,654,562 633,550,001 44.19 55.81 YOJEE LIMITED - ANNUAL REPORT 2023 58 4. UNRESTRICTED SECURITIES All securities are unrestricted. 5. SUBSTANTIAL SHAREHOLDERS As at 25 September 2023 the substantial shareholders was as follows: Name UBS NOMINEES PTY LTD Shares BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD Shares % of Shares 82,851,951 60,131,333 7.30 5.30 6. VOTING RIGHTS At a general meeting of shareholders: (a) On a show of hands, each person who is a member or sole proxy has one vote. (b) On a poll, each shareholder is entitled to one vote for each fully paid share. YOJEE LIMITED - ANNUAL REPORT 2023 59 

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