ikeGPS Group FY 2019 Results announcement

Full Year Results29 May 2019IKEMaterials

Find Out More At:
www.ikegps.com
350 Interlocken Blvd, Suite 390, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com

For Immediate Release 30 May 2019
IKE FY19 results
Growth in the U.S. Communications market. New customers & partners.
ikeGPS (IKE) advises the following, with results in line with its prior announcement 25 March 2019;
FY19 performance to 31 March 2019 (all figures NZD)
- Revenue growth in the core Communications & Electric Utility segment:
o Total recognised revenue of $8.0m (PCP of $7.7m).
o Revenue in IKE’s core Communications and Electric Utility segment grew 27% against PCP, to
approximately $7.3m.
- Gross margin growth:
o Gross margin in the period of $5.4m, 34% higher than PCP of $4.0m.
o Gross Margin percentage improved to 67%, an increase against PCP of 51%.
- Lower operating expenses:
o Operating expenses were $10.6m (PCP of $10.8m), reflecting continued investment into Sales &
Marketing and Research & Engineering, and a lower Corporate expense profile.
- Reduced net loss:
o Net loss after tax was $5.1m, a 24% improvement against PCP of $6.7m.
- Improved revenue mix:
o Record sales were made into the U.S. Communications and Electric Utility market, with approximately
$7.3m revenue.
 $1.9m revenue was generated from annual software subscriptions, with subscription
renewal rates of approximately 91%.
 $1.4m revenue was generated from the new ‘IKE Analyze’ solution.
- Cash and receivables:
o IKE ended the period with cash of $3.5m and receivables of $1.4m.

Commentary
IKE CEO, Glenn Milnes, commented:

“We are pleased that our focus on the North American Communications & Electric Utility market produced growth in
revenue and gross margin. Importantly for shareholders the FY19 period saw the transition to the IKE Analyze offering,
which extends our solution offering and revenue model for FY20. Today, seven of the 15 largest Communications &
Cable companies in the U.S. market are either in IKE Analyze deployments or engaged in pilots. The ultimate revenue
opportunity is significant, with an IKE Analyze customer representing the potential for hundreds of thousands, and
eventually, millions of dollars of revenue per annum.”

“Recent customer additions have included Charter Communications Inc, the largest cable company in the U.S., and
Crown Castle Inc, the largest provider of shared communications infrastructure in the U.S, among others. This followed
AT&T Inc, the largest communications company in North America, standardizing on IKE for its aerial make-ready
engineering. Approximately 80% of FY20 revenue from this segment is now expected to come from IKE Analyze
transactions or from recurring software subscriptions.”

Find Out More At:
www.ikegps.com
350 Interlocken Blvd, Suite 390, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com

“From a team perspective, Chairman Rick Christie and fellow IKE directors were pleased to welcome Bill Morrow onto
IKE’s Board at the beginning of Q4 FY19. Bill brings leadership experience from positions across our targeted industries
and geographical markets. He has consequently ‘hit the ground running’ with respect to contributions to the business.
Bill’s past roles include as CEO of Pacific Gas & Electric Co, CEO of Vodafone Europe, President of Vodafone KK Japan,
CEO of Clearwire Corporation Inc., and most recently CEO of Australia’s national fiber network, nbn co. His
considerable governance experience includes as non-executive director at Broadcom Inc, one of the world’s largest
semi-conductor companies, and as a non-executive director at Openwave Inc, a pioneer of the Mobile Internet.”

“Our mobile product, Spike, is not expected to materially contribute to overall revenue in FY20 given the very large
opportunity and subsequent focus on the North American Communications and Electric Utility market, however we
consider that it has some notable upside potential. FY19 Spike sales were approximately $0.7m. The strategy for Spike
has continued to focus on partnerships so to tie directly into leading enterprise software platforms and established
enterprise workflows, with some successes. This has included with ESRI Inc, the largest global GIS software business
(see solution integration detail at
https://www.esri.com/en-us/about/esri-partner-network/our-partners/hardware-
partners/ikegps-esri) and also announcing with HP Inc, via integration with their HP WorkExpert for Field Services
product (see solution integration detail at https://www8.hp.com/us/en/solutions/fieldservices.html). These types of
partnerships provide an opportunity for Spike to access a larger volume, enterprise-type, user base. Some positive
sales signs have emerged via ESRI in particular - with Spike also recently being awarded ESRI’s Global Partner of Year for
Field Efficiency at their worldwide partner conference.”

“Looking to FY20 our focus remains squarely on the North American Communications & Electric Utility sector. From a
market timing perspective, the pace of investment into fiber networks continues to increase. The U.S. fiber market is
estimated to be at year-two of a seven-year investment super-cycle exceeding $300B, and with more than 200 entities
competing to deploy networks. An additional market tailwind emerging relates to 5G, the next generation mobile
technology. IKE has recently been involved in aerial make-ready engineering projects specific to 5G network
deployments where IKE Analyze materially improves site assessment workflow productivity. We are pleased to be in
front of this market which is also global in nature.”

“As noted, IKE is in the early phases of serving numerous national infrastructure groups and investor-owned utilities.
Our focus on these very large businesses will continue to bring some timing uncertainty but we are optimistic about the
potential to deliver a strong FY20 performance, including new tier-1 customer wins. We feel IKE is as well positioned as
it has been, and the first quarter of FY20 has begun positively.”

ENDS

IKE seeks to be the standard for collecting, managing and analysing pole and overhead asset information for electric
utilities, communications companies and their engineering service providers.

Contact: Glenn Milnes, CEO, +1 720-418-1936, glenn.milnes@ikegps.com

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IKE FY19 Results.
FY20 Outlook.
Growth in the U.S.
Communications & Electric
Utility market

2
Important Notice
➕is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in
ikeGPS Limited;
➕should be read in conjunction with, and is subject to, ike’s FY19 financial statements, market releases, and information published on ike’s
website (www.ikegps.com);
➕includes forward-looking statements about ike and the environment in which ike operates, which are subject to uncertainties and
contingencies outside of ike’s control – ike’s actual results or performance may differ materially from these statements;
➕includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and
➕may contain information from third parties believed to be reliable – however, no representations or warranties are made as to the accuracy
or completeness of such information.
➕All information in this presentation is current at the date of this presentation, unless otherwise stated.
➕All currency amounts are in NZ dollars unless stated otherwise.
Information in this Presentation:
Receipt of this Document and/or attendance at this presentation constitutes acceptance of the terms set out above in this Important Notice.

Notice

3
FY19 Results
FY19 Results

FY19 Results Highlights
＋Revenue growth in the core Communications & Electric Utility segment:
＋Total recognised revenue of $8.0m, 4% higher than PCP of $7.7m.
＋Revenue in IKE’s core Communications and Electric Utilities segment grew 27% against PCP, to approximately $7.4m.
＋Gross margin growth:
＋Gross margin in the period of $5.4m, 34% higher than PCP of $4.0m.
＋Gross Margin percentage improved to 67%, an increase against PCP of 51%.
＋Lower operating expenses:
＋Operating expenses were $10.6m (PCP of $10.8m), reflecting continued investment into Sales & Marketing and Research & Engineering,
and a lower Corporate expense profile.
＋Reduced Net Loss
＋Net loss after tax was $5.1m, a 24% improvement against PCP of $6.7m.
＋Record sales into the U.S. Communications and Electric Utility market, with approximately $7.4m revenue including;
＋$1.9m revenue generated from annual software subscriptions, with subscription renewal rates of approximately 91%.
＋$1.4m revenue generated from the new ‘IKE Analyze’ solution.
＋Cash and receivables:
＋IKE ended the period with cash of $3.5m and receivables of $1.4m.
FY19 Results

FY19 Results Highlights cont.
＋Transition to the IKE Analyze business model was completed in FY19
＋As a result IKE expects that approximately 80% of FY20 revenue will be derived from either recurring subscription or transaction sources.
＋Ultimate revenue opportunity per IKE Analyze customer is significant, representing the potential for hundreds of thousands, and eventually,
millions of dollars of revenue per annum.
＋Progress with Target Accounts included:
＋AT&T Inc., the largest communications company operating across North America, has written the ‘IKE Standard’ into its Articles for aerial
make-ready-engineering.
＋Seven of the largest 15 Communications & Cable companies operating in the U.S. market are engaged in deployments or pilots of IKE
Analyze. Entities include:
﹢Charter Communications Inc. - the largest cable company in the U.S.
﹢Crown Castle Inc. - the largest provider of shared communications infrastructure in the U.S.
﹢Cox Communications Inc.- the 6th largest cable company in the U.S.
＋The platform to deliver a strong FY20 performance.
＋Considered that IKE is as well positioned as it has been with respect to customer engagement and market offering.
FY19 Results

FY19 Results

Positive Overall Momentum
Positive Trending of Revenue, Gross
Profit, and EBITDA
Particularly within the Core Communications
and Utility Segment
IKE
Comms & Utilities
Business Unit
Trended Revenue, Gross
Profit and EBITDA ($000)
Trended Revenue & Gross
Profit ($000)
6

Profit & Loss
FY19 Results

Continuing operations $'000's$'000's
Operating revenue7,996 7,732
Cost of sales (2,646)(3,754)
Gross profit 5,350 3,978
Other income102 125
Operations cost(643)(477)
Sales and marketing expenses(3,226)(3,231)
Research and engineering expenses(3,210)(3,019)
Corporate costs(3,443)(4,011)
Foreign exchange (losses)/gains (39)(71)
Expenses (10,561)(10,809)
Operating loss (5,109)(6,706)

20192018
7

Commentary & Outlook;
Field Data CollectionAnalysis
Management
Commentary & Outlook

8
The importance of the FY19 transition to IKE Analyze

9
Field Data CollectionAnalysis
Management
IKE seeks to be...
The industry standard for scaling utility pole
applications faster, safer, and with
uncompromising accuracy.
Vision

There has been exponential growth in usage of the the IKE platform over the past four years;
IKE Analyze drivers

10
>450 organizations have processed >9M aerial asset records on the platform.....

Achieving dramatic productivity and quality improvements....
IKE Analyze drivers

And with the IKE Standard being applied across the North American market.....
IKE Analyze drivers

These metrics signaled a significant opportunity; driving the FY19 IKE Analyze strategy.....
2019 | This document is marked ikeGPS Confidential and should not be published for digital or physical distribution.
Executed through FY19, IKE has expanded its market offering and business model from the sale of field data collection devices and
subscription pole software, to establishing IKE Analyze as the extended platform for scaling communications and utility pole
applications....
Communications
Electric Utilities
Increasing Value

Communication
Infrastructure
Providers (CIPs)
Pain point IKE solves;
＋Need to bring networks and services online faster
while standardizing costs and data quality across
multiple geographic markets.

Applications;
＋Fiber network deployments
＋5G network deployments

Market opportunity for IKE;
＋Bottom up;
->$225m revenue opportunity over 5 years from the
largest 15 players in the U.S.
->200 CIPs in the North American market.
＋Top down;
->$300B forecast investment into fiber networks in
the U.S over next 5+ years.
-5G network investment forecast to grow to >$50B
per annum by 2025.
Engineering Service
Providers
Electric
Utilities
Pain point IKE solves;
＋Need to maximize efficiency and profits.
Typically doing >50% of the network
development work required by the CIPs and
Electric Utilities.

Applications;
＋Fiber network deployments
＋5G network deployments

Market opportunity for IKE;
＋>1,000 groups in the U.S.
＋An IKE Analyze force multiplier; using IKE tools
for field engineering, driving asset data back to
the IKE Analyze platform.

Pain point IKE solves;
＋Need to meet the demands of sharply increasing pole
attachment permit requests.
＋Need a faster and standardized way to assess and ensure
poles are not compromised.

Applications;
＋Joint-use requests from CIPs
＋Network hardening requirements to protect against storm
and fire risk.
＋In some cases, building their own fiber network.

Market opportunity for IKE;
＋The largest potential market for IKE in the longer term;
->3,200 electric utilities in North America
->$750M per annum Total Addressable Market
＋IKE expects that this segment will develop more slowly than
the CIP and Engineering Service Provider market
IKE Analyze was developed in response to customer demand, and market timing factors.....
DeliverablesIKE
IKE Analyze people | processes | technology
Meeting Customer Demand

IKE Analyze increases the value of IKE’s offering to customers;
and substantially extends IKE’s revenue model.....
2019 | This document is marked ikeGPS Confidential and should not be published for digital or physical distribution.
Annual Subscription
＋IKE Device
＋IKE Field s/w
＋IKE Integration (Any module)
＋Software updates & maintenance
＋Technical Support
＋Hot Swap*
＋Training*
＋Joint Use Coordinator Support
* = Customer Paid Shipping
IKE
Historical offering

IKE Analyze increases the value of IKE’s offering to customers;
and substantially extends IKE’s revenue model.....
Basic pole
assessment
Make Ready
Adjustments
Annual Subscription
＋IKE Device
＋IKE Field s/w
＋IKE Integration (Any module)
＋Software updates & maintenance
＋Technical Support
＋Hot Swap*
＋Training*
＋Joint Use Coordinator Support
* = Customer Paid Shipping
Per Pole Transaction Pricing
＋Analyze Level
＋Volume
＋Time
＋Timing
＋Turnaround
＋Deliverables
Pole Load Analysis
(Digital Twin)
DeliverablesIKE
Analyze Levels
IKE Analyze adds further Analysis
& Reporting layers.

Translating to >10-20x more
revenue per system deployed than a
historical sale of device &
subscription software.

＋IKE Device
＋IKE Report (pdf)
＋Excel File
＋KML
＋PLA Report
＋MRA Improvements
＋Pass/Fail Maps
＋IKE Office Cloud Database
＋IKE Photo Records
＋Permitting
IKE Analyze Deliverables
IKE Analyze offering FY20

Analysis Levels
HOAPLAMRA
Increasing Value

HOA
Height of Attachment
Route Surveys
Pole locates
Joint Use
Billing compliance
Network confirmation

Increasing Value

PLA
Pole Loading
Pole integrity
Clearance Analysis
NESC compliance

Increasing Value

MRA
Make-Ready Adjustments
Fiber deployments
Design Suggestions
Network hardening

Increasing Value

The depth of the IKE Analyze offering matters, underpinning higher value customer engagements.
Focused on People, Process and Technology.....
Solution Depth

Planning; to ensure successful
implementation at every step,
minimizing ramp-up times and
eliminating process gaps.
Implementation plan

Training; IKE has the people, process
and technology to train across all
aspects of the solution.
23

Workflow management; Starting
with a customer deliverable and
finding the most efficient way to
define workflows.
Workflow Management

Schedule & route planning to ensure ‘One-Trip to the Field’ efficiency. Data management to ensure quality.
Site Acquisition

Photo-Verifiable Accuracy; evidence of assets as they exist in the field.
Photo Measurement

Visual Representation of a network; to ID where assets are at risk.
Risk Management

Adaptability; to customize CAD outputs specific to the application.
28

Automated Permit Applications; eliminating manual input errors & dramatically speeding up permitting.
Automated Permits & Reporting

＋IKE now delivers more value to every customer;
-speeding multiple aspects of the network assessment & make-ready-engineering process.
-an IKE Analyze customer represents the potential for hundreds of thousands, and eventually, millions of
dollars of revenue per annum.
＋IKE Analyze demands deeper, longer term customer (& revenue) relationships;
-with the IKE platform becoming embedded in customer workflows.
＋IKE Analyze realizes lower upfront revenue but is expected to facilitate 10-20x greater revenue from
every IKE solution in use vs. IKE’s historical business model;
＋IKE’s revenue mix evolves favorably;
-becoming substantially weighted towards ongoing transaction & subscription revenue.
＋Market timing is optimal;
-with the potential to play a role in speeding up network deployment processes in markets experiencing
investment super-cycles;
-Fiber network deployment;
->$300B expected investment in the U.S. over the next 5+ years.
-Utilities network hardening initiatives.
->$10B per annum expected investment in coming years.
-5G mobile network deployment;
-Expected to grow to a market investment size >$50B per annum by 2025.
The transition to IKE Analyze is important for customers, and shareholders ....
Creating Value

IKE goes to market directly; selling & delivering into the largest infrastructure companies in North America
Mike McGill
Senior VP, Utility & Communication Business Unit

Liz Etzel
Support Engineer

Matthew Worster
VP, IKE Analyze

Blake Collins
Solutions Engineering Manager

Glenn Milnes
Chief Executive Officer & Managing Director

Leon Toorenburg
Chief Technology Officer

Chris Birkett
Chief Financial & Operating Officer

Dan McGrady
Director of Customer Success

Pole People

Proof Points

Working with the Biggest Names in the Business

Fiber Deployment Application; CableOne Inc.
Success Stories

33
Annual Revenue:$1.1B
Subscribers:1M
States:21
MetricsBeforeAfter (IKE Analyze)

Make Ready Engineering Completion

30 Days

5 Days

Approval times to attach

30 Days

10 Days

Fiber Deployment Application; AT&T Inc.
Success Stories

34
Annual Revenue:$133B
Subscribers:143M (mobility)
States:22
MetricsBeforeAfter (IKE Analyze)

5G (field visits)

Fiber deployment completion times

30 Days

10 Days

Electric Utility Application; San Diego Gas & Electric Joint-Use

The IKE Analyze Fast Lane for Joint-Use Permitting

MetricBefore
After, with
IKE Analyze
Approval Time
Rejection Time
+ 45 Days
> 40%
30 Days
< 5%
Success Stories

5G Application; National shared-communications infrastructure group.
IKE Analyze Process // Reduced Time & Cost + Accuracy & Quality
36
Success Stories

37
Investor Calendar

Investor Calendar

Who are focused on:

-Faster network deployments.
-Improving network and data quality.
-Keeping crews out of harm’s way.
-Meeting the demands of regulators.

Thanks...

Dedicated to Serving
Communications Companies &
Electric Utilities.
IKE is...

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C
ontents
Independent auditor’s report............................................................................................................3
Consolidated statement of profit or loss and other comprehensive income..............9
Consolidated statement of changes in equity.................................................................10
Consolidated balance sheet .....................................................................................................11
Consolidated statement of cash flows...............................................................................12
Notes to the consolidated financial statements .......................................................13-47

PricewaterhouseCoopers, PwC Centre, 10 Waterloo Quay, Wellington 6011
T: +64 4 462 7000, F: +64 4 462 7001, pwc.co.nz
Independent auditor’s report
To the shareholders of ikeGPS Group Limited
We have audited the financial statements which comprise:
the consolidated balance sheet as at 31 March 2019;
the consolidated statement of profit or loss and other comprehensive income for the year then
ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include significant accounting policies.
Our opinion
In our opinion, the accompanying financial statements of ikeGPS Group Limited (the Company),
including its subsidiaries (the Group), present fairly, in all material respects, the financial position of
the Group as at 31 March 2019, its financial performance and its cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of assurance services relating to the
Company’s research and development grant and tax compliance services in respect to annual income
tax returns. The provision of these other services has not impaired our independence as auditor of the
Group.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that the Group incurred an
operating cash outflow of $4.0 million for the year ended 31 March 2019, and a further investing
outflow of $1.1 million relating to capitalised internal development and the purchase of property, plant
and equipment. The Group also incurred a net loss of $5.1 million for the year. The cash balance at 31
March 2019 was $3.5 million. If the Group fails to achieve its FY20 business plan (particularly forecast
sales growth), manage costs or obtain alternative sources of financing it may not be able to meet its
obligations as they fall due. As stated in note 2, these conditions, along with other matters as set forth
in note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.

PwC

Our audit approach
Overview

An audit is designed to obtain reasonable assurance
whether the financial statements are free from material
misstatement.
Overall Group materiality: $363,000, which represents
5% of the 3-year average loss before tax.
We chose 3-year average loss before tax as the benchmark
because, in our view, the level of ongoing losses is the
benchmark against which performance of the Group is
most commonly measured by users and utilisation of a 3-
year average addresses the historical volatility of the
benchmark.

Our key audit matter is the valuation of development
assets.
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
The financial statements are a consolidation of the Company and two subsidiaries, one based in New
Zealand and one in the United States of America. The Company and both subsidiaries share one
centralised group finance function.
We scoped our audit on a Group financial statement line item basis and completed audit work on
Group balances at the materiality level for the Group. All audit procedures were conducted by the
Group audit team.

PwC

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current year. In addition to the matter described in the
Material uncertainty related to going concern section, we have determined the matter described
below to be the key audit matter to be communicated in our report. This matter was addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.

PwC

Key audit matter
How our audit addressed the key audit
matter
Valuation of development assets
As disclosed in note 15, Intangible assets, the
Group has $3.6 million of development assets
related to the internal development of
hardware and software products.
Development assets are initially carried at
cost. To determine whether the carrying
value of the developed assets are reasonable,
the Directors assessed whether any
impairment indicators existed for each
development asset Cash Generating Unit
(CGUs) by considering, among other factors,
sales achieved to date for the asset’s relevant
product line(s) and the overall operating and
cash performance of the entity. The Directors
concluded the Group’s overall operating
losses and difficulty in meeting budgeted
sales levels for the Spike Business were
indicators of impairment.
Management performed an impairment
assessment of the overall business on a value
in use basis and the Spike development assets
on a value in use and fair value less costs of
disposal basis. These assessments require
significant judgement when identifying
appropriate assumptions upon which to base
the model, particularly forecasting future
sales volumes . The impairment assessments
were a key audit matter due to the significant
judgement involved in assessing whether
forecast future sales volumes would be
achieved to support the conclusion on
whether it is probable that future economic
benefit will be generated and whether the
carrying value was impaired.
Based on management’s assessments, no
impairment was recognised. Refer to notes 2
and 15 in the financial statements for
disclosures on development assets.

We obtained an understanding and evaluated the
Group’s processes and controls relating to the
assessment of impairment indicators of
development assets, the preparation and approval
process of forecasts, and the execution of the
impairment assessment. We completed the
following audit procedures to assess the
reasonableness of the impairment assessment:
 We performed procedures to evaluate and
challenge the Group’s determination of CGUs.
This included reviewing internal management
reporting to assess the level at which the Group
monitors performance, comparing CGU’s to our
knowledge of the Group’s operations and
reporting systems, and reconciling assets
allocated to CGU’s to those totals within the
general ledger.
 We obtained management’s assessment of
impairment indicators and assessed whether
the indicators identified were consistent with
our understanding of the operations and
environment of the business.
 We obtained management’s impairment
assessments and tested the mathematical
accuracy of the impairment models, and used
our internal valuation expert to challenge and
assess the appropriateness of the assumptions
underlying the impairment models.
 We assessed the reasonableness of the forecast
sales volumes within the Board-approved
budget for the years ending 31 March 2020 to
March 2023. Our assessment included
completing look back procedures to evaluate
the forecasting accuracy of previous forecasts
against actual results to assess the reliability of
historical forecasting. We also considered
factors influencing forecast revenue growth,
such as sales pipelines, previous growth
achievements, and the Group’s strategic
objectives and we performed a sensitivity
analysis based on our independent
determination of forecast sales volumes
assumptions.

PwC

Key audit matter
How our audit addressed the key audit
matter
Valuation of development assets

 We assessed management’s valuation basis for
determining the fair value less costs of disposal
of the Spike Business, and used our internal
valuation expert to challenge and assess the
appropriateness of the assumptions underlying
the fair value calculation, including
independently determining a valuation range
for the Spike Business.

Whilst recognising that the impairment assessment
is inherently judgemental and there is a level of
subjectivity involved in valuing CGUs, there is a
range of values which can be considered reasonable
when evaluating the carrying value of a CGU. Based
on the above procedures there were no matters to
report.

Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the consolidated financial
statements does not cover the other information included in the annual report and we do not, and will
not, express any form of assurance conclusion on other information. The directors have advised that
no other information will be included in the annual report.
In connection with our audit of the consolidated financial statements, if other information is included
in the annual report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the
work we have performed on the other information that we obtained prior to the date of our auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (NZ) and ISAs will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.

PwC
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Christopher
Ussher.
For and on behalf of:
Chartered Accountants
30 May 2019
Wellington

p. 9

Consolidated statement of profit or loss and
other comprehensive income

Year ended 31 March
Group

2019 2018
Continuing operations $'000's $'000's
Operating revenue
6
7,996 7,732
Cost of sales

(2,646) (3,754)
Gross profit
5,350 3,978
Other income
6
102 125
Operations cost
6
(643) (477)
Sales and marketing expenses
6
(3,226) (3,231)
Research and engineering expenses
6
(3,210) (3,019)
Corporate costs
6
(3,443) (4,011)
Foreign exchange (losses)/gains

(39) (71)
Expenses
(10,561) (10,809)
Operating loss (5,109) (6,706)
Net finance income

17 (20)
Net loss before income tax (5,092) (6,726)
Income tax (expense)/credit
12
4 (6)
Loss attributable to owners of ikeGPS Group

(5,088) (6,732)
Other comprehensive loss

Items that may subsequently be recognised through profit or loss

Exchange differences on translation of foreign operations

168 (31)
Comprehensive loss

(4,920) (6,763)

Basic and diluted loss per share
21
$ (0.06) $ (0.09)

The accompanying notes form part of, and should be read in conjunction with, these financial statements.

p. 10

Consolidated statement of changes in equity

Share
capital

Accumulated
losses
Share based
payment
reserve
Foreign
currency
translation
reserve

Total
$'000's $'000's $'000's $'000's $'000's
Opening balance at 1 April 2017
45,252 (34,763) 399 (252) 10,636
Loss for the year - (6,732) - - (6,732)
Currency translation differences - - - (31) (31)
Total comprehensive income/(loss) - (6,732) - (31) (6,763)
Issue of ordinary shares 4,011 - - - 4,011
Recognition of vesting of share-based
options
- - 68 - 68
Share based payment reserve movement - 407 (407) - -
Total transactions with owners 4,011 407 (339) - 4,079
Balance at 31 March 2018 49,263 (41,088) 60 (283) 7,952

Share
capital
Accumulated
losses
Share based
payment
reserve
Foreign
currency
translation
reserve

Total

$'000's $'000's $'000's $'000's $'000's
Opening balance at 1 April 2018
49,263 (41,088) 60 (283) 7,952
Change in accounting policy - 274 - - 274
Restated balance at 1 April 2018 49,263 (40,814) 60 (283) 8,226
Loss for the year - (5,088) - - (5,088)
Currency translation differences - - - 168 168
Total comprehensive income/(loss) - (5,088) - 168 (4,920)
Issue of ordinary shares 5,869 - - - 5,869
Recognition of vesting of share-based
options
- - 188 - 188
Share based payment reserve movement - 56 (56) - -
Total transactions with owners 5,869 56 132 - 6,057
Balance at 31 March 2019 55,132 (45,846) 192 (115) 9,363

The accompanying notes form part of, and should be read in conjunction with, these financial statements.

p. 11

Consolidated balance sheet

Year ended 31 March
Group

2019 2018
ASSETS $'000's $'000's
Current assets

Cash and cash equivalents
7
3,475 2,586
Trade and other receivables
9
1,370 1,358
Prepayments

294 273
Inventory
8
1,691 1,220
Total current assets

6,830 5,437
Non-current assets

Property, plant and equipment
14
944 842
Intangible assets
15
3,604 3,928
Deferred tax asset
12
17 13
Total non-current assets

4,565 4,783
Total assets

11,395 10,220
LIABILITIES

Current liabilities

Trade and other payables
10
505 699
Employee entitlements

226 364
Contract liabilities
6
1,246 1,205
Total current liabilities

1,977 2,268
Non-current liabilities

Non-current contract liabilities
6
55 -
Total non-current liabilities

55 -
Total liabilities

2,032 2,268
Total net assets

9,363 7,952
EQUITY

Share capital
13
55,132 49,263
Share based payment reserve

192 60
Accumulated losses

(45,846) (41,088)
Foreign currency translation reserve

(115) (283)
Total equity

9,363 7,952

Director Date: 30 May 2019 Director Date: 30 May 2019
NZ (New Zealand Time) NZ (New Zealand Time)

The accompanying notes form part of, and should be read in conjunction with, these financial statements.

p. 12

Consolidated statement of cash flows

Year ended 31 March
Group

2019 2018

$'000's $'000's
Cash flows from operating activities

Cash receipts from customers

8,401 8,458
Cash paid to suppliers and employees

(12,422) (11,241)
Interest paid

(14) (26)
Net cash used in operating activities
20
(4,035) (2,809)

Cash flows from investing activities

Purchases of property, plant and equipment

(477) (26)
Additions to intangible assets

(603) (1,224)
Interest received

31 6
Net cash used in investing activities (1,048) (1,244)

Cash flows from financing activities

Proceeds from issuance of shares on listing

5,869 4,011
Net cash from financing activities 5,869 4,011
Net (decrease)/increase in cash and cash equivalents 785 (42)
Cash and cash equivalents at 1 April

2,586 2,730
Effect of exchange rate fluctuations on cash held

104 (102)
Cash and cash equivalents 3,475 2,586

The accompanying notes form part of, and should be read in conjunction with, these financial statements.

p. 13

Notes to the consolidated financial statements
1. Reporting Entity
ikeGPS Group Limited (the “Company”) is a limited liability company domiciled and incorporated
in New Zealand, registered under the Companies Act 1993 and listed on the New Zealand Stock
Exchange (“NZX”) and Australian Securities Exchange (“ASX”). The Company is an FMC reporting
entity for the purposes of the Financial Markets Conduct Act 2013. The financial statements for
the year ended 31 March 2019 comprise the Company and its subsidiaries (together referred to
as the “Group”) which include ikeGPS Limited and ikeGPS Inc.
The principal activity of the Group is that of design, marketing and sale of integrated GPS data
capture devices, related software and consulting solutions.
The financial statements were authorised for issue by the Directors on 30 May 2019.
2. Basis of preparation
The principal accounting policies applied in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
Statement of compliance
The consolidated financial statements have been prepared in accordance with the requirements
of the Companies Act 1993 and Financial Reporting Act 2013.
The consolidated financial statements of the Group have been prepared in accordance with New
Zealand Generally Accepted Accounting Practice (“NZ GAAP”). The Group is a for-profit entity
for the purposes of complying with NZ GAAP. The consolidated financial statements comply
with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”), other
New Zealand accounting standards and authoritative notices that are applicable to entities that
apply NZ IFRS. The consolidated financial statements comply with International Financial
Reporting Standards (IFRS).
Basis of measurement
The financial statements have been prepared on the historical cost basis with the exception of
certain financial instruments which are measured in accordance with the specific relevant
accounting policy.
Critical estimates and judgments
The preparation of financial statements requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any
future periods affected.

p. 14

Notes to the consolidated financial statements
2. Basis of preparation (continued)
Going concern
These financial statements have been prepared based on the Group being a going concern,
which assumes the Group has the ability and intention to continue operations for a period of at
least 12 months from the date of the financial statements. During the Group’s current growth
phase, investment continues into increasing revenue by developing and expanding the Group’s
product and service offerings. The Group has continued to incur net cash outflows from
operating and investing activities during this phase. During fiscal year 2019 (FY19), the Group
had cash outflows of $4,035,000 (2018: $2,809,000) relating to operations, and $1,048,000
(2018: $1,224,000) relating to capitalised internal development intangible assets and purchase
of property plant and equipment for the 12 months ended 31 March 2019. The cash balance at
31 March 2019 was $3,475,000 (2018: $2,586,000). If the current level of cash outflows
continued the Group would not be able to fund its operations without the need to raise additional
capital or alternative funding.
The approved base business plan for fiscal year 2020 (FY20) includes the prudent management
of costs while focusing effort on realising the significant sales opportunities for the entity’s
products and services.
The plan takes into consideration:
• forecast sales increases of IKE Solution, focused on sales into the utilities and
telecommunications companies within the United States that are deploying fiber
• continued subscription revenue associated with the IKE cloud platform
• transaction revenue from the new IKE Analyze solution
• continued prudent operational cost management
• continued focus on optimising working capital
• the ability of the Group to manage its growth activities and associated costs.
If one or more components of the plan are not realised further cost-cutting measures are
available to the Group. To assess the degree of sensitivity, stress testing has been performed on
the FY20 plan, reducing forecast receipts from customers by 17%. The impact being that the
Group remains a going concern, albeit with reduced available cash funds. In FY19 the Group
completed a Private Placement and Share Purchase Plan raising $5,869,000. The dual listing on
the NZX and ASX provides the Company with the potential option to pursue capital raise
opportunities from a wider market in order to among other things; expand existing business,
access additional working capital, and acquire or establish new businesses. The Directors
believe that additional capital could be raised should circumstances necessitate.

p. 15

Notes to the consolidated financial statements
2. Basis of preparation (continued)
In FY19 sales by the core Utility & Communications business unit grew. The Directors
acknowledge the difficulty of predicting certainty of sales due to long sales cycles associated
with Enterprise level customers, however the Directors believe that the Group now has a closer
understanding of the process requirements of Enterprise level sales cycles and the timing of
forecasted revenue. On this basis, the Directors believe that the Group has sufficient funding
tocontinue operations for at least the next 12 months from the date of authorising the financial
statements, and hence consider the use of the going concern basis appropriate.
The Group’s ability to improve its financial capacity and cash flow generated from its operations
cannot be assured. Should the Group fail to achieve its FY20 business plan (particularly forecast
sales growth), manage costs or obtain alternative sources of financing, then this represents a
material uncertainty that may cast significant doubt on the validity of the going concern
assumption. The existence of this material uncertainty may result in the Group’s inability to
realise its assets and settle its liabilities in the normal course of operations. These consolidated
financial statements do not reflect adjustments in the carrying values of the assets and liabilities,
the reported revenues and expenses, and the balance sheet classifications used, that would be
necessary if the Group were unable to continue as a going concern.
Impairment
The carrying amounts of the Group’s assets were reviewed to determine whether there is any
indication of impairment. The Directors concluded the Group’s operating losses as an indicator
of impairment for the overall business, requiring an estimate of the Cash Generating Unit’s
(CGU1) recoverable amount. Additionally, it determined that due to the low relative revenue from
the Spike Business, an indicator of impairment existed requiring an estimate of the Cash
Generating Unit’s (CGU2) recoverable amount of the intangible assets directly associated with
the Spike Business.
CGU1 was determined to be the Group’s total intangible assets plus total property, plant &
equipment. The useful life of the CGU was determined to be 6 years. A pre-tax discount rate of
12% was used to establish the net present value.
Sensitivity analysis was performed on key assumptions; Spike revenue is assumed at FY18
levels, Utilities & Communications average revenue growth rate is conservatively assumed to be
20%. Operating expenses reflect the FY20 business plan. The value in use assessment is
sensitive to changes in each of these assumptions. This ‘downside scenario’ would result in the
recoverable amount being in excess of the carrying value. A likely material impairment would
need to be considered if any key assumption did not meet, substantially meet, or exceed that
calculated.
The Directors have determined that no impairment is required as CGU1 continues to have a
useful life and that the current carrying value of the CGU1 does not exceed its value in use.

p. 16

Notes to the consolidated financial statements
2. Basis of preparation (continued)
The CGU2 was determined to be the intangible assets associated with the Spike Business
totalling $1,381,000. The basis upon which CGU2 was determined has changed from that used
in FY18. The assets relating to the software development kit were added to CGU2 on the basis
that these assets now relate predominantly to the Spike Business.
Sensitivity analysis was performed on key assumptions; Spike revenue is assumed at FY18 levels
as the Group more fully develops partner opportunities focused on the Geospatial and Enterprise
application markets. An estimate of the cashflows required to market and sell the Group’s
products was based on the business plan for FY20. A pre-tax discount rate of 12% was used to
establish the net present value. This value in use assessment is sensitive to changes in each of
these assumptions. A fair value approach, using revenue multiples to value CGU2, was also used
to corroborate the output of the value in use assessment. A likely material impairment would
need to be considered if any key assumption in the value in use or fair value assessments did
not meet, substantially meet, or exceed that calculated.
The Directors have determined that no impairment is required as CGU2 continues to have a
useful life and that the current carrying value of the CGU2 does not exceed its value in use.
Intangible Assets
Information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amount recognised in the
financial statements are the measurement and impairment of intangible assets.

Annually the Directors are required to assess the appropriateness of the asset’s amortisation
period.

Amortisation is calculated to write off the cost of intangible assets less their estimated residual
values using the straight-line method over their estimated useful lives and is recognised in the
profit and loss.

For the current year the Directors have assessed the useful economic lives and determined that
no change is required.
The current estimated useful lives:
• ikeGPS platform – 6 years
• IKE application and features – 6 years
• Spike application and features - 6 years

p. 17

Notes to the consolidated financial statements
2. Basis of preparation (continued)
In addition to the above, the Group makes judgments about the amount of costs to capitalise as
part of the development asset. The Group’s intangible asset capitalisation policy is used to assist
in making these judgements. The Group capitalises direct labour costs into its development
asset. The costs applied are based on judgment as to the nature of work employees performed,
and the amount of time spent on the task. This is assessed jointly by the engineering and finance
functions. Information about significant areas of estimation uncertainty and critical judgments
in applying accounting policies that have the most significant effect on the amount recognised
in the financial statements are the measurement and impairment of intangible assets.
3. New and amended standards adopted by the Group
NZ IFRS 15 Revenue from Contracts with Customers
NZ IFRS 15 supersedes NZ IAS 11 Construction Contracts, NZ IAS 18 Revenue and Related
Interpretations and it applies to all revenue arising from contracts with customers, unless those
contracts are in the scope of other standards. The new standard establishes a five-step model
to account for revenue arising from contracts with customers. Under NZ IFRS 15, revenue is
recognised at an amount that reflects the consideration to which an entity expects to be entitled
in exchange for transferring goods or services to a customer.
The standard requires entities to exercise judgement, taking into consideration all of the relevant
facts and circumstances when applying each step of the model to contracts with their
customers.
The five-step model for recognising revenue from contracts with customers requires
consideration of the following steps:
• Identifying the contract
• Identifying the individual performance obligations within the contract
• Determining the transaction price
• Allocating the transaction price to distinct performance obligations
• Recognising revenue
NZ IFRS 15 Revenue
We have provided the table below that provides the key judgements made on the application of
NZ IFRS 15 across each revenue type with standardised terms and conditions. The Group has
applied a practical expedient permitted by the standard; therefore, no significant financing
component exists on contract liabilities less than one year.

p. 18

Notes to the consolidated financial statements
3. New and amended standards adopted by the Group (continued)
New Business

Revenue
Type
Description Key Judgements Outcome Timing of revenue
recognition
Hardware Device
ikeGPS sells Spike devices
through direct orders and
online software.
No major judgement required. N/A
Point in time
Recognised when the unit is
received by the customer.
Utility & Communication

Revenue
Type
Description Key Judgements Outcome Timing of
revenue
recognition
IKE4 Solution The IKE4 Solution is marketed
to the utility & communications
market as an all-in-one
package which includes the
IKE4 device, preconfigured
IKE Field Android mobile
application and online access
to IKE Office - a cloud-based
software platform that enables
customers to measure and
analyse assets captured with
the IKE4 device.
The contract for an IKE4 Device,
IKE Field and IKE Office is generally
sold as a packaged solution.
Management has determined the
individual performance obligations
within the contract. The total
contract price is allocated to each
performance obligation. Where
possible management uses external
comparatives to identify standalone
performance obligations and
respective price. Where an external
comparative is not available,
management’s judgement was
applied.

Management has determined
that the IKE4 Device, Software
licence (IKE Field) and
Subscription (IKE Office) are
distinct performance
obligations of the IKE4
Solution. In determining this
management has relied on
market comparables to
establish standalone
performance obligations.
Point in time
Both the IKE4 device and
IKE Field mobile
application are recognised
at the point in time when
the device is sent to the
customer.

Over time
IKE Office is recognised
over the term of the
contract.
Subscription Customers are required to
renew software subscriptions
to allow continued access to
the IKE Office online cloud
functionality and the ability to
customise and add new forms
onto the IKE4 device.
Determining when each
performance obligation is fulfilled.
Customers use the IKE Field
and IKE Office solution to store
and analyse data, customise
and add new forms, for project
management and to access to
additional tools. Along with
integration capability these
performance obligations can
be described as ‘stand ready’
services which can be
recognised over time.
Over time
Subscription software
recognised over time.
IKE Analyze
Solution
Providing an end to end
technical solution for
customers; performing pole
loading analysis and make
ready engineering
assessments.

Determining when each
performance obligation is fulfilled.
Initially the customer performs data
collection, the customer also
receives an annual subscription to
access IKE Field and Office.
Once customer data is collected it is
uploaded into IKE Office where IKE
performs the analysis and completes
requested reports.

The business is required to
perform certain activities as per
the scoping document for each
customer. Once the activity is
complete the Group will
recognise the revenue.
Point in time
Each transaction
(completed record) is
recognised when the
performance obligation has
been completed.

p. 19

Notes to the consolidated financial statements
3. New and amended standards adopted by the Group (continued)
Impact of adoption
The Group has adopted the NZ IFRS 15 Revenue from Contracts with Customers from 1 April
2018 which resulted in changes in accounting policies and adjustments to the amounts
recognised in the financial statements. In accordance with the transition provisions in NZ IFRS
15, the Group has elected to use themodified retrospective method and has recognised the
cumulative effect of applying NZ IFRS 15 as an adjustment to the opening balance of retained
earnings on 1 April 2018.
The impact on the Group’s retained earnings as at 1 April 2018

2018

$'000's
Closing retained earnings 31 March 2018 (41,088)
IKE Field decrease in contract liabilities
(ref. “a.” below) 274
Opening retained earnings 1 April 2018
(40,814)
• On adoption of NZ IFRS 15 the IKE Field portion of IKE4 transactions are recognised at a point
in time. The adjustment made to retained earnings reflects the amount of revenue deferred
at 31 March 2018 related to IKE Field.
NZ IFRS 9 Financial Instruments
The new NZ IFRS 9 replaces the provisions of NZ IAS 39 that relate to the recognition,
classification, measurement and impairment of financial assets. The Group has applied NZ IFRS
9 retrospectively and has chosen not to restate comparatives as there was no material impact.
Classification and measurement
The classification and measurement of the Group’s financial assets and liabilities upon adoption
of NZ IFRS 9 is outlined below:
NZ IAS 39 classification NZ IAS 39
measurement
NZ IFRS 9 classification
and measurement
Financial Assets
Cash and cash equivalents Loans and receivables Amortised cost Amortised cost
Trade and other
receivables
Loans and receivables Amortised cost Amortised cost
Financial Liabilities

Trade and other payables Other financial liabilities at
amortised cost
Amortised cost Amortised cost

p. 20

Notes to the consolidated financial statements
3. New and amended standards adopted by the Group (continued)
Impact of adoption
For trade receivables the Group has recognised expected credit losses by applying the simplified
approach permitted by NZ IFRS 9, which requires expected lifetime losses to be recognised from
initial recognition of the receivables.
The Group has reviewed the ageing analysis of trade receivables, historical credit loss
experience, individual customer characteristics, customer market segment and economic
environment to determine the expected credit loss rate. This rate is applied to outstanding gross
trade receivables as at 31 March 2019 to calculate the allowance for expected credit losses.
New standards not yet adopted
The following standard has been published but is not yet effective and has not been adopted by
the Group.
NZ IFRS 16, ‘Leases’, replaces the current guidance in NZ IAS 17. Under NZ IFRS 16, a contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. Under NZ IAS 17, a lessee was required to
make a distinction between a finance lease (on balance sheet) and an operating lease (off
balance sheet).
NZ IFRS 16 now requires a lessee to recognise a lease liability reflecting future lease payments
and a ‘right-of-use asset’ for virtually all lease contracts. Included is an optional exemption for
certain short-term leases and leases of low-value assets; however, this exemption can only be
applied by lessees.
The Group is in the process of performing a detailed assessment of the financial impact of the
standard. The application of the standard requires the Group to make several judgments. These
include determining the lease term, the discount rate applicable and the underlying foreign
exchange rate. We note that the Groups current lease commitments are included in note 19
Commitments and Contingencies.
The standard is effective for accounting periods beginning on or after 1 January 2019. The Group
intends to adopt NZ IFRS 16 from 1 April 2019.

p. 21

Notes to the consolidated financial statements
4. Significant accounting policies
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are deconsolidated from the date that control ceases.
Transactions eliminated on consolidation
Intra-Group transactions, balances, and any unrealised gains arising from intra-Group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is
no evidence of impairment.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each the Group’s subsidiaries are measured using
the currency of the primary economic environment in which the entity operates ("the functional
currency").
The functional currency of the Company is NZ dollars. The functional currency of the Group's
USA subsidiary is US dollars. These financial statements are presented in NZ dollars, which is
the Group's presentation currency.
Transactions and balances
Foreign currency transactions are initially translated to functional currencies at the rates of
exchange prevailing at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the revaluation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.

p. 22

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Group companies
The results and financial position of the US subsidiary are translated into the presentation
currency as follows:
• assets and liabilities are translated at the closing rate at the date of the balance sheet;
• income and expenses are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions);
and
• all resulting exchange differences are recognised in other comprehensive income.
When a foreign operation is sold, such exchange differences are reclassified to profit or loss in
the consolidated statement of profit or loss and other comprehensive income.
Goods and Services Tax
All amounts are shown exclusive of Goods and Services Tax (GST) and other indirect taxes
except for trade receivables and trade payables that are stated inclusive of GST.
Financial instruments
From 1 April 2018, the group classifies its financial assets as measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and
the contractual terms of the cash flows.
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset.
Amortised cost assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are measured at amortised cost.
Interest income from these financial assets is included in finance income using the effective
interest rate method.
Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in
other gains/(losses) together with foreign exchange gains and losses. Impairment losses are
presented as separate line item in the statement of profit or loss.

p. 23

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
A financial instrument is recognised if the Group becomes a party to the contractual provisions
of the instrument. Regular purchases and sales of financial assets are accounted for at trade
date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial assets
are derecognised if the Group’s contractual rights to the cash flows from the financial assets
expire or if the Group transfers the financial asset to another party without retaining control or
substantially all risks and rewards of the asset. Financial liabilities are derecognised if the
Group’s obligations specified in the contract expire or are discharged or cancelled.
Financial assets are non-derivative financial instruments with fixed or determinable payments
that are not quoted in an active market. They include trade and other receivables, cash and cash
equivalents. They are included in current assets, except for loans and receivables greater than
12 months which are included in non-current assets.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Trade and other receivables
Trade and other receivables arise when the Group provides money, goods and services directly
to a debtor with no intention of selling the receivable. They are included in current assets, except
for those with maturities greater than 12 months after the end of the reporting period which are
classified as non-current assets.
They are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method
Financial liabilities
Financial liabilities measured at amortised cost are non-derivative financial liabilities, including
trade and other payables.
Trade and other payables
Trade and other payables are obligations to pay for goods and services that have been acquired
in the ordinary course of business from suppliers. Accounts payable are classified as current
liabilities if payment is due within one year or less (or in the normal operating cycle of the
business if longer). If not, they are presented as non-current liabilities.
They are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method.

p. 24

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives
of each part of an item of property, plant and equipment.
Depreciation methods, useful lives and residual values are reviewed and adjusted, if appropriate,
at each reporting date.
Office furniture and equipment 20% - 33%
Plant and equipment 20% - 50%
IT equipment 33% - 50%
Gain and losses on disposals are determined by comparing proceeds with the carrying amount.
These are included in profit or loss.
Intangible assets
Research and development
All research costs are recognised as an expense when they are incurred.
Capitalised development costs
The Group capitalises employee and consultants’ costs directly related to development. The
Group regularly reviews (at least annually) the carrying value of capitalised development costs
to ensure they are not impaired. Management has reviewed the expected remaining useful life
of assets and concluded that the development costs for all products are amortised over periods
of 6 years to reflect the expected useful life of the assets.

p. 25

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Development costs that are directly attributable to the design and testing of identifiable and
unique software products controlled by the Group are recognised as intangible assets when the
following criteria are met:
• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic
benefits;
• adequate technical, financial and other resources to complete the development and to use or
sell the software product are available; and
• the expenditure attributable to the software product during its development can be reliably
measured.
Other development expenditures that do not meet these criteria are recognised as an expense
as incurred. Development costs previously recognised as an expense are not recognised as an
asset in a subsequent period.
Impairment of non-financial assets
Intangible assets under development are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might
be impaired. The carrying amount of the Group’s other assets are reviewed at each balance date
to determine whether there is any indication of impairment or objective evidence of impairment.
If any such indication exists, the assets recoverable amount is estimated.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments for the time value of money and the
risks specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or 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. Where an
impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit)
is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (cash generating unit) in prior
years. A reversal of an impairment loss is recognised in profit or loss immediately.

p. 26

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Impairment of financial assets
From 1 April 2018 the Group assesses impairment on a forward-looking basis, the expected
credit loss associated with its financial assets carried at amortised cost. The Group will assess
if there has been a significant increase in credit risk by assessing market conditions, forward
looking estimates and previous financial history of counterparts.
For trade receivables the Group applies the simplified approach permitted by NZ IFRS 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
The expected credit losses on these financial assets are assessed using a provision matrix,
adjusted for factors that are specific to the receivables including customers historical credit loss
experience, individual customer characteristics, customer market segment and economic
environment.
The Group write’s off a financial asset when there is information indicating default or delinquency
in payments, the probability that they will enter bankruptcy, liquidation or other financial
reorganisation and there is no real prospect of recovery.

Leased assets
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
term of the lease.
Inventory
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is
based on a weighted average cost, and includes expenditure incurred in acquiring the inventories
and bringing them to their existing location and condition. Cost comprises direct materials, direct
labour and production overhead. Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated costs necessary
to make the sale.
Government grants
Government grants relate to assistance by Callaghan Innovation who manage the Business
Research and Development (R&D) grants scheme on behalf of the New Zealand Government.
When the grant relates to an expense item, it is recognised as income on a systematic basis over
the periods necessary to match the grant to the costs that it is intended to compensate.
Government grants are recognised at their fair value where there is reasonable assurance that
the grants will be received, and all attaching conditions will be complied with.

p. 27

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave
that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service are recognised in respect of employees’ services up to the
end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the
consolidated balance sheet.
The Group recognises a liability and an expense for bonuses where contractually obliged or
where there is a past practice that has created a constructive obligation.
For defined contribution plans, the group pays contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual or voluntary basis. The group has no
further payment obligations once the contributions have been paid. The contributions are
recognised as employee benefit expense when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the future payments is
available.
Share-based payment
The Group operates an employee option scheme (equity-settled) under which employees receive
the option to acquire shares at a predetermined exercise price. The options are measured at fair
value at grant date using the Black Scholes model with the fair value recognised as an employee
benefit expense in profit or loss with a corresponding increase in equity. The total expense is
recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the Group revises its estimate of the
number of options that are expected to vest based on the service conditions. It recognises the
impact of the revision to original estimates, if any, in share-based payment reserve with a
corresponding change to share based compensation reserve in equity.
Revenue
The Group derives its revenue from the sale of product and related services, subscription revenue
and end to end technical pole data analysis. Revenue is recognised when performance
obligations have been satisfied. A performance obligation has been satisfied when control of the
good or service associated with the performance obligation has been transferred to the
customer’.
Effective from 1 April 2018 the Group adopted NZ IFRS 15 Revenue from contracts with
Customers. The change in accounting policies and key judgements are set out in section 3
above.

p. 28

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
The Group has applied the modified retrospective method of adopting NZ IFRS 15. Therefore,
prior year revenue is measured at fair value of the consideration received or receivable. Sale of
product revenue is recognised when the products are shipped, and significant risks and rewards
of ownership have been transferred or when the services are provided to the customer.
Sale of product
Revenue from the sale of product is derived from the sale of the Group’s laser measurement
devices, associated software, accessories and warranty support. Revenue is recognised when
the products are shipped to the customer being the point at which control is considered to have
transferred to the customer.
IKE4 rental revenue
IKE 4 rental revenue is derived from fees charged to customer on a monthly basis for the use of
an IKE4 unit and for access to IKE Field and Office.
Leases of the IKE 4 unit are considered operating leases as the Group retains the significant
portion of the risks and rewards of ownership Rental payments received (net of any incentives)
are recognised as lease revenue in profit or loss on a straight-line basis over the period of the
lease.
Subscription revenue for access to IKE Field and Office is recognised in accordance with the
policy below on subscription revenue.
Subscription revenue
is recognised as the services are provided to the customers. Consideration received in advance
(of the service being provided), is recognised in the balance sheet as contract liabilities.
IKE Analyze solution revenue
IKE Solution revenue is derived from our end to end pole and wire analysis solution. The complete
solution offering provides mobile field devices to capture data, software to support the collection
of fast standardised data, completion of pole annotation analysis, completion of pole loading
analysis and performing make ready engineering analysis. Revenue is recognised when the data
has been analysed and the customer requirements outlined in the engagement statement of
work have been completed.
Other operating revenue
Other operating revenue includes consulting and training revenue. Revenue is recognised when
the services are performed.
Consideration received prior to the service being provided is recognised in the balance sheet as
deferred revenue.

p. 29

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Finance income and expenses
Interest income is recognised as it accrues, using the effective interest method. Finance
expenses comprise interest expense on borrowings, recognised using the effective interest
method.
Current and deferred income tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries
operate and generate taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements.
Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilised.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
Earnings per share
The Group presents earnings per share (“EPS”) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of shares that would be issued on conversion of all of the
dilutive potential ordinary shares into ordinary shares.

p. 30

Notes to the consolidated financial statements
4. Significant accounting policies (continued)
Other reserves
Share-based payments reserve
The share-based payments reserve is used to recognise the grant date fair value of options
issued to employees but not exercised.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in
other comprehensive income as described in the foreign currency translation accounting policy
and accumulated in a separate reserve within equity. The cumulative amount is reclassified to
profit or loss when the net investment is disposed of.
5. Operating segments
The CEO and senior management team are the Group’s operating decision makers. During FY19
the Group’s selling activities were focused and organised into two customer segments namely
Utility & Communications and New Business. The Utility & Communications segment includes
sales to companies involved in the broadband fiber roll out in the United States. New Business
includes Signage, Architecture Engineering and Construction (AEC) and Geospatial.
Within the Utilities & Communications segment the Group sold the IKE4 device and
corresponding annual subscription revenue. The Group also offered an end to end technical
solution to customers performing make ready engineering (MRE) projects. Revenue related to
this solution has increased during the period and is now reported on separately to management.
The segment reporting format reflects the Group’s management and internal reporting structure.
Contribution is after allocating cost of goods sold. Reporting of overheads and balance sheet
position is not undertaken at a level lower than the Group as a whole. Geographically, revenue is
substantially generated in the United States.

p. 31

Notes to the consolidated financial statements
5. Operating segments (continued)

2019

2018

Utility &
Communication
New
Business Group

Utility &
Communication
New
Business Group

$'000's $'000's $'000's

$'000's $'000's $'000's
Sale of product and
services (Point in Time)
3,587 640 4,227

4,607 1,970 6,577
IKE4 rental
466 - 466 116 - 116
Subscription (Overtime) 1,825 36 1,862 793 - 793
Contribution 4,228 575 4,803 2,894 1,027 3,921
IKE Analyze solution
(Point in Time)
1,441 - 1,441

246 - 246
Contribution
547 - 547

57 - 57
Gross Profit

5,350

3,978
Sales and marketing
costs
(3,226)

(3,231)
Net attributable (other
corporate income and
expenses)
(7,216)

(7,473)
Net loss before tax (5,092) (6,726)

p. 32

Notes to the consolidated financial statements
6. Revenue and expenses
Revenue

2019 2018

$'000's $'000's
Sale of product 4,058 6,504
IKE4 rental 466 116
IKE Solution 1,441 246
Subscription 1,862 715
Services 169 151
Operating revenue
7,996 7,732
Government grants 102 125
Total revenue and other income 8,098 7,857
2019 revenue restated based on the prior year revenue accounting policy

2019

$'000's
Subscription revenue 1,862
Adjustment to retained earnings on adoption of IFRS 15 274
Adjustment for subscription revenue recognised under prior year accounting policy 81
Subscription revenue restated under prior year accounting policy
2,217
Sale of product 4,058
Adjustment for sale of product revenue recognised under prior year accounting
policy
(155)
Sale of product revenue restated under prior year accounting policy 3,903
In the current year, no customer within a particular operating segment represented more than
10% of revenue (FY18: $1,838,000 in total, $1,045,000 in Utility & Communication segment, and
$793,000 in New Business segment).
Government grants are in relation to cost subsidies from Callaghan Innovation for research and
development. Under the conditions of the Callaghan Innovation grant the Group is required to
submit an independent review report on the eligibility of the costs claimed. This report is
outstanding at balance date but does not represent a significant unfulfilled condition.
Reconciliation of contract liability balances

2019 2018

$'000's $'000's
Opening contract liabilities balance 1,205 150
Revenue recognised that was included in contract liabilities at the beginning of
the period

Decrease on adoption of IFRS 15 (274) -
Subscription revenue recognised (861) (150)
Unsatisfied performance obligations for the current year 1,231 1,205
Closing contract liabilities balance
1,301 1,205

p. 33

Notes to the consolidated financial statements
6. Revenue and expenses (continued)
Operating expenses
Operating expenses consist of operations costs, sales and marketing expenses, engineering and
research expenses and corporate expenses.

2019 2018

$'000's $'000's
Audit of financial statements

Audit and review of financial statements

141 146
Other services

Other assurance services
1.

6 8
Tax compliance services
2.

20 28
Total other services

26 36
Total fees paid to auditor
167 182
Amortisation of development asset

975 1,204
Amortisation of patents and software

- 16
Depreciation

117 171
Total amortisation and depreciation
3.

1,092 1,391
Employee benefit expense

6,158 6,503
Share-based payment

188 68
External contractors and consultants

360 243
Employee benefit expense capitalised
4.

(603) (1,224)
Operating lease expenses

370 395
Direct selling and marketing
5.

1,160 906
Impairment of assets
6.

- 166
Bad debt and write off expense

26 91
Other operating expenses
7.

1,604 2,017
Total operating expenses

10,522 10,738

p. 34

Notes to the consolidated financial statements
6. Revenue and expenses (continued)
Notes
1. Other assurance services comprise the review of government grant claims.
2. Tax compliance services relates to assistance to review and file the Group’s tax return.
3. All of amortisation and $117,000 of depreciation are included in engineering and research
expenses. The balance of depreciation totalling to $248,000 is included in cost of sales
(2018: $216,000).
4. Relates to employee benefit expense, external contractors and consultants’ expenses that
are directly attributable to the development of intangible assets and have been capitalised.
5. Selling and marketing expenses includes expenses incurred mainly in relation to
promotional activities which include travel, commissions and other direct marketing
expenses
6. Impairment of assets in 2018 Financial Statements include IKE3 intangible assets of
$83,000, Smart Measure Pro intangible assets of $42,000 and other fixed assets of $41,000.
The remaining asset impairment of $125,000 is included in cost of sales.
7. Other operating expenses include corporate advisory, travel, engineering expenses, facilities
and IT expenses.
7. Cash and cash equivalents

2019 2018

$'000's $'000's
Cash at bank 1,675 2,235
Call / term deposits 1,800 351
Total 3,475 2,586
An overdraft facility of NZ$250,000 with BNZ and a factoring facility of US$300,000 with Bluevine
is in place. BNZ has perfected security interest in all present and after acquired property of
ikeGPS Limited. On the BNZ facility there is an outstanding guarantee to another party of
$75,000.
8. Inventory

2019 2018

$'000's $'000's
Finished goods 777 450
Components 914 770
Total inventory
1,691 1,220
Included in cost of sales is $1,139,000 (2018: $2,956,000) relating to the amount of inventory
recognised as an expense in the year.

p. 35

Notes to the consolidated financial statements
9. Trade and other receivables

2019 2018

$'000's $'000's
Trade receivables 1,268 1,151
GST receivable 45 74
Grants receivable 46 85
Other receivables 11 48
Total trade and other receivables 1,370 1,358

The Group has $791,988 of trade receivables past due but not impaired at balance date.
(2018: $299,580)
30 – 90 days 90 days + Total past due

207,697 584,291 791,988

Trade receivables is net of provision for doubtful debts of $17,559.
10. Trade and other payables

2019 2018

$'000's $'000's
Trade payables 252 302
Accrued expenses 253 397
Total trade and other payables 505 699
11. Subsidiaries

Investment
Name of entity
Country of
incorporation
Principal activity
2019 2018
ikeGPS Limited New Zealand Product development and business operations 1,000 1,000
ikeGPS Inc. USA Business operations 1,000 1,000

2,000 2,000

ikeGPS Limited and ikeGPS Inc. are 100% (2018: 100%) owned by the Company.
All subsidiaries have 31 March balance dates.

p. 36

Notes to the consolidated financial statements
12. Current and deferred tax
The Group’s tax expense/ (benefit) comprises:

2019 2018
$'000's $'000's
Deferred tax (4) 6
Income tax expense /(credit) (4 ) 6
Prima facie income tax expense on pre-tax accounting loss from operations reconciles to the
accounting loss from operations and reconciles to the income tax expense/(credit) in the
financial statements as follows:

2019 2018
$'000's $'000's
Net loss before income tax (5,092) (6,726)
Prima facie income tax credit at 28% (1,425) (1,883)
Non-deductible expenses 198 37
Unrecorded tax losses 1,223 1,852
Income tax expense /(credit)
(4)
6
The Group has unrecognised tax losses of $18,682,000 (2018: $16,046,000), arising from New
Zealand operations available for use against future taxable profits subject to meeting the
requirements of continuous ownership provision stated in the Income Tax Act 2007.
A tax asset in respect of these losses has not been recognised due to the uncertainty of when
the unused tax losses can be utilised.

2019 2018
$'000's $'000's
Deferred tax opening balance 13 19
Recognised through profit or loss 4 (6)
Deferred tax closing balance 17 13
Deferred tax asset relates to employee entitlements.

p. 37

Notes to the consolidated financial statements
13. Contributed equity
Share capital

2019

2018
$'000's $'000's
On issue at beginning of year 49,263 45,252
Issued under share placement 5,000 3,725
Issued under share purchase plan 1,250 387
Less listing costs offset against issue proceeds (381) (101)
Total share capital 55,132 49,263
Share capital on issue

2019 2018
Fully paid total shares at beginning of year 78,450,255 64,270,910
Ordinary shares issued on settlement of options - -
New shares offered 12,019,312 14,179,345
Fully paid ordinary shares 90,469,567 78,450,255

p. 38

Notes to the consolidated financial statements
14. Property, plant and equipment

Plant &
equipment
Leasehold
improvements
Office furniture &
equipment
Development
equipment Total

$'000's $'000's $'000's $'000's $'000's
Cost

Balance at 1 April 2017 1,592 28 700 58 2,378
Additions 10 - 16 - 26
Disposals (383) - (135) (48) (566)
Balance at 31 March 2018
1,219 28 581 10 1,838

Balance at 1 April 2018 1,219 28 581 10 1,838
Additions 183 - 287 10 480
Disposals - - (156) (7) (163)
Balance at 31 March 2019 1,402 28 712 13 2,155

Depreciation

Balance at 1 April 2017 510 28 422 48 1,008
Depreciation for the year 229 - 156 2 387
Impairment 121 - 43 3 167
Disposals (383) - (135) (48) (566)
Balance at 31 March 2018
477 28 486 5 996

Balance at 1 April 2018 477 28 486 5 996
Depreciation for the year 253 - 105 7 365
Disposals - - (143) (7) (150)
Balance at 31 March 2019 730 28 448 5 1,211

Carrying amounts

At 31 March 2018
742 - 95 5 842
At 31 March 2019 672 - 264 8 944

p. 39

Notes to the consolidated financial statements
15. Intangible assets

Development
assets
Patents and
software
Total
$'000's $'000's $'000's
Cost

Balance at 1 April 2017 7,569 174 7,743
Additions 1,224 - 1,224
Disposals (324) - (324)
Balance at 31 March 2018 8,469 174 8,643

Balance at 1 April 2018 8,469 174 8,643
Additions 651 - 651
Disposals - - -
Balance at 31 March 2019 9,120 174 9,294

Amortisation and impairment losses

Balance at 1 April 2017 3,537 158 3,695
Amortisation for the year 1,204 16 1,220
Impairment 124 - 124
Disposals (324) - (324)
Balance at 31 March 2018 4,541 174 4,715

Balance at 1 April 2018 4,541 174 4,715
Amortisation for the year 975
- 975
Impairment - - -
Disposals - - -
Balance at 31 March 2019 5,516 174 5,690

Carrying amounts

At 31 March 2018 3,928 - 3,928
At 31 March 2019 3,604 - 3,604

Intangible assets are all recognised within and owned by ikeGPS Group Limited, incorporated in
New Zealand.
Development assets
Additions to internally generated development assets for the year relates to the continued
development of the platform, features to enhance Spike and IKE products including web and
mobile applications.

p. 40

Notes to the consolidated financial statements
16. Financial instruments and financial risk management
Financial instruments
The Group’s principal financial instruments comprise cash balances, trade and other receivables,
trade and other payables and employee entitlements.
The following table shows the designation of the Group’s financial instruments:

2019 2018

$'000's $'000's

Financial
Assets at
amortised
cost
Financial
liabilities at
amortised
cost
Total carrying
value
Loans and
receivables
Financial
liabilities
at
amortised
cost
Total
carrying
value
Financial assets

Cash and cash equivalents

3,475
- 3,475 2,586 - 2,586
Trade and other receivables 1,370 - 1,370 1,285 - 1,285
Total financial assets 4,845 - 4,845 3,871 - 3,871

Financial liabilities

Employee entitlements - 226 226 - 364 364
Trade payables - 252 252 - 302 302
Accrued expenses - 253 253 - 397 397
Total financial liabilities
- 731 731 - 1,063 1,063
Financial risk factors
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk, foreign
currency risk and interest rate risks which arise in the normal course of the Company and
Group’s business. The Group uses different methods to measure and manage different types of
risks to which it is exposed. Liquidity risk is monitored through the development of future rolling
cash flow forecasts.
Credit risk
The Group’s exposure to credit risk arises from potential default of the counterparty, with a
maximum exposure equal to the carrying amount of these instruments. Financial instruments
which potentially subject the Group to credit risk principally consist of cash and cash equivalents,
and trade and other receivables. All cash and cash equivalents in New Zealand are held with high
credit quality counterparties, being trading banks with "AA-" grade or better credit ratings, and a
Moody’s A1 rating in the USA. The Group does not require collateral or security from its trade
receivables. The Group performs credit checks and ageing analyses and monitoring of specific
credit allowances. The Group does not anticipate any material non-performance of those
customers. The total impaired trade receivables as at balance date is $17,559.

p. 41

Notes to the consolidated financial statements
16. Financial instruments and financial risk management
(continued)
At balance date 65% (2018: 85%) of the Group’s cash and cash equivalents were with one bank.
The Group has no other concentrations of credit risk.
Maximum exposure to credit risk at balance date:

2019 2018

$'000's $'000's
Cash at bank 3,475 2,586
Trade and other receivables 1,370 1,285
Total
4,845 3,871
Liquidity risk
Liquidity risk is the risk that the Group cannot pay contractual liabilities as they fall due. Group
finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient
cash to meet operational needs. Such forecasting takes into consideration the Group’s forward
financing plans and commitments. Based on this the Group believes that it has sufficient liquidity
to meet its obligations as they fall due for the next 12 months. The Group has an overdraft facility
of NZ$250,000 and access to a US$300,000 factoring facility in place to cover potential
shortfalls.
The following table sets out the undiscounted cash flows for all financial liabilities of the Group:

2019 2018
$'000's $'000's

Contractual
cash flows
6 months
or less
No stated
maturity
Contractual
cash flows
6 months or
less
No stated
maturity
Employee entitlements

226
-

226

364
-

364
Trade payables
252 252 -
302

302
-
Accrued expenses
253 253 -
397

397
-
Total financial liabilities
731 505 226
1,063 699 364

Foreign currency risk management
The Group is exposed to foreign currency risk on its sales and a significant portion of its
expenses that are denominated in USD which is different to the Group’s presentation currency.
The Group currently does not hedge its exposures arising from its transactions denominated in
a foreign currency.

p. 42

Notes to the consolidated financial statements
16. Financial instruments and financial risk management
(continued)
At 31 March 2019, had the local currency strengthened / weakened against the USD by 10% the
pre-tax loss would have been (higher)/lower as follows:

Carrying value of
FX impacted
financial instruments
+10% -10%

$'000's $'000's $'000's
Cash and cash equivalents USD 839 (110) 140
Trade and other receivables USD 869 (114) 145
Trade and other payables USD 118 7 (28)
Intercompany balance foreign USD 20,257 2,714 (3,317)
Interest rate risk management
The Group’s interest rate risk arises from its cash balances. The Group currently has no
significant exposure to interest rate risk other than in relation to the amount held at the bank. A
reasonably expected movement in the prevailing interest rate would not materially affect the
Group’s financial statements.
17. Capital management
The capital structure of the Group consists of equity raised by the issue of ordinary shares in the
Company. The Group manages its capital to ensure the entities in the Group are able to continue
as a going concern. The Group is not subject to any externally imposed capital requirements.
In the current financial year, the Group completed a Private Placement and Share Purchase Plan
raising $5,869,000. The Group’s aim is to maintain a sufficient capital base so as to maintain
investor and creditor confidence and to sustain future development of the business. The Group’s
capital requirements are regularly reviewed by the Board of Directors.
There have been no material changes in the Group’s management of capital from the previous
year.
This note should be read in conjunction with note 2; Going Concern which outlines the material
uncertainty around the Group’s going concern assumption and the FY20 plan that Directors
believe will enable the Group to continue operations.

p. 43

Notes to the consolidated financial statements
18. Fair value estimation
The fair value of the Group’s financial assets and liabilities does not materially differ from their
carrying value due to their short maturities.
The Group’s financial instruments are measured at amortised cost.
19. Commitments and contingencies

2019 2018
$'000's $'000's
Non-cancellable operating leases

Less than one year 307 340
Between one and five years 621 95
Total 928
435

Operating leases are in relation to rented premises and photocopiers.
The Group advises there are no contingencies.

p. 44

Notes to the consolidated financial statements
20. Cash used in operations

2019

2018

$'000's $'000's
Loss for the year

(5,088) (6,732)
Less investment interest received

(31) (6)

Non-cash items included in net loss

Depreciation

365 387
Amortisation of intangible assets

975 1,220
Asset impairment

- 291
Materials write off

- 296
Debtor write off

26 91
Deferred tax expense

(4) 6
Share option expense

188 68
Write off of obsolete materials and assets

13 -
Foreign exchange (gains)/losses

26 71
1,558 2,424
Add/(less) movement in working capital items

Decrease/(Increase) in trade and other receivables

(65) (463)
Decrease/(Increase) in inventories

(470) 997
Decrease/(Increase) in prepayments

(22) 325
Increase/(Decrease) in trade and other payables

(182) (551)
Increase/(Decrease) in deferred revenue

369 1,055
Increase/(Decrease) in employee entitlements

(135) 136
(505) 1,499
Net cash used in operating activities
(4,035) (2,809)
21. Basic and diluted earnings per share

2019 2018
$'000's $'000's
Total loss for the year attributable to the owners of the parent (5,088) (6,732)
Ordinary shares issued 90,469,567 72,707,662
Basic loss per share $(0.06) $(0.09)
The potential shares are anti-dilutive in nature. The diluted loss per share is therefore the same
as the undiluted EPS at ($0.06) and ($0.09) for the respective periods.

p. 45

Notes to the consolidated financial statements
22. Share based payments
Share options are granted to directors and selected employees to retain, reward and motivate
such individuals to contribute to the growth and profitability of the Group.
Options outstanding at 31 March 2019 have a contractual life from grant date of between 2.5
and 3 years. Options can be exercised at any time after vesting and unexercised options expire
at the end of the contract or if the employee leaves the Group. The Group has no legal or
constructive obligation to repurchase or settle the options in cash. Any share to be issued on the
exercise of the option will be issued on the same terms and will rank equally in all respects with
the ordinary shares in the company on issue.
Movements in the number of share options outstanding and their related average exercise prices
are as follows:

2019 2018

Average
Exercise Price
Options (’000’s) Average Exercise Price Options (’000’s)
At 1 April 0.50 1,155 $0.97 2,515
Granted 0.55 2,775 $0.36 600
Forfeited 0.59 (50) $0.98 (285)
Expired 0.66 (530) $1.08 (1,675)
$0.52 3,350 $0.50 1,155
Out of the 3,350,000 outstanding options (2017: 1,155,000), 1,950,840 (2018: 574,993) had
vested and were exercisable at 31 March 2019.

p. 46

Notes to the consolidated financial statements
22. Share based payments (continued)
Options outstanding
Share options outstanding at the end of the year have the following expiry date and exercise
price.

2019 2018
Year
Granted Expiry date
Exercise
price
Number of
options
Term remaining
(years)
Number of
options
Term
remaining
(years)

2016 30-Sep-18 $0.72 80,000 0.50
2016 31-Dec-18 $0.70 100,000 0.75
2016 31-Mar-19 $0.63 375,000 1.00
2017 31-Mar-20 $0.40

400,000 1.00 400,000 2.00
2017 30-Jun-20 $0.29 200,000 1.25 200,000 2.25
2018 31-Mar-21 $0.54 1,100,000 2.00
2018 31-Mar-21 $0.54 1,400,000 2.00
2019 31-Dec-21 $0.64 250,000 2.75
Measurement of fair value
The Company determined the fair value of options issued using the Black Scholes valuation
model. The significant inputs to the model were:

2019 2018
Fair value of options issued in the year $0.11, $0.12, $0.13, $0.19 $0.01, $0.05
Weighted average share price $0.55 $0.40
Exercise price $0.54 - $0.64 $0.29 - $0.40
Volatility 30% 30%
Dividend yield Nil Nil
Risk free interest rate 1.79% - 2.15% 2.54%

23. Related parties

2019 2018

$'000's $'000's
Short term benefits to directors and senior management 2,238 2,100
Share option expense directors and senior management 172 24

p. 47

Notes to the consolidated financial statements
23. Related parties (continued)
Key management are identified as the Chief Executive Officer, Chief Technology Officer, Chief
Financial Officer, Chief Operating Officer, SVP Utilities & Communication, and Directors.
24. Subsequent events
There are no subsequent events.

ikeGPS Group Limited
Level One, 42 Adelaide Road
Mount Cook
Wellington 6021
Telephone: +64 4 382 8064

Directors of ikeGPS Group Limited
Richard Gordon Maxwell Christie
Bruce Harker
Alex Knowles
Glenn Milnes
Frederick Lax
William Morrow

Legal Advisers
Chapman Tripp
10 Customhouse Quay
PO Box 993
Wellington 6140
Telephone: +64 4 499 5999

Auditor
PricewaterhouseCoopers
PwC Centre 10 Waterloo Quay Pipitea,
Wellington 6011
Telephone: +64 4 462 7000

Share Registrar
Link Market Services Limited
PO Box 91976, Auckland 1142
Level 7 Zurich House
21 Queen Street, Auckland 1010
Telephone: +64 9 375 5998

Bankers
Bank of New Zealand
Harbour Quays, Ground Floor,
60, Waterloo Quay, Wellington 6011
Private Bag 39806,
Wellington Mail Centre,
Lower Hutt 5045

www.ikegps.com

ikeGPS FY2019 Results Announcement Conference Cal Ongoing Disclosure Notice – Glenn Milnes

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.

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