ACUSENSUS LIMITED. — Annual Report 2021

Jan 9, 2023

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Acusensus Limited

ACN 625 231 941

Financial Statements - 30 June 2021

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Acusensus Limited Directors' report 30 June 2021

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The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Acusensus Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2021.

Directors

The following persons were directors of Acusensus Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Alexander Jannink Ravin Mirchandani Thomas Patterson

Principal activities

During the financial year the principal activities of the consolidated entity consisted of the provision of world-leading technology to detect and capture prosecutable evidence of illegal drivers mobile phone use, seatbelt use, and speed detection.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $3,648,994 (30 June 2020: $1,255,095).

The net loss for the year included one-off costs in relation to share based payment expenses. (FY21: $955,036; FY20 $269,118)

• Allocation of 250,000 share options to Bell Potter as part of the pre-IPO raise

• Issue of 292,208 bonus shares to employees

• Earlier than expected exercise of performance based options by Sam Almaliki on achievement of set contract revenue targets following award of the NSW Mobile Speed Contract and Queensland Mobile and Speed Safety Contract

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the consolidated entity during the financial year.

Information on directors Name: Alexander Jannink Title: Executive Director Experience and expertise: Alexander is a founder of Acusensus and has pioneered the design, development and deployment of radar and camera enforcement technologies in multiple applications, markets and geographies across the globe. Name: Ravin Mirchandani Title: Non-Executive Chairman Experience and expertise: Ravin is executive chairman of Ador Powertron Limited, a company incorporated in India that is a major shareholder of Acusensus, and has extensive commercial experience across a range of sectors including defence, energy, gas, manufacturing, power electronics and traffic enforcement. Name: Thomas Patterson Title: Non-Executive Director Experience and expertise: Tom has worked with investors, private and small cap ASX-listed companies on a range of matters, providing practical and innovative financial, taxation and commercial solutions during his time as a manager at Big 4 accounting and advisory firm Deloitte and as a Client Director at Pitcher Partners.

Matters subsequent to the end of the financial year

Since 30 June 2021 the Company has successfully mobilised a multi-year NSW Mobile Speed Contract and Queensland Mobile Phone and Seatbelt Safety contract that will significantly increase the scale of the consolidated entity's operations in future financial years.

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Acusensus Limited Directors' report 30 June 2021

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No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Likely developments and expected results of operations

Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental regulation

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.

Shares under option

There were 907,459 unissued ordinary shares under option at the date of this report. Refer to note 32 for further information on share-based payments.

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate.

Shares issued on the exercise of options

There were 1,188,208 ordinary shares of Acusensus Limited issued on the exercise of options during the year ended 30 June 2021. Refer to note 18 for further information on share issued.

Meetings of directors

The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2021, and the number of meetings attended by each director were:

	Attended	Held
Alexander Jannink	12		12
Ravin Mirchandani	12		12
Thomas Patterson	12		12

Held: represents the number of meetings held during the time the director held office.

The size of the Board is considered to be commensurate with the early stage of the company's development. Accordingly, there are no Committees and all matters are attended to by the full Board.

Indemnity and insurance of officers

The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Indemnity and insurance of auditor

The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor.

During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

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Acusensus Limited Directors' report 30 June 2021

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Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the directors

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_________ Alexander Jannink Director

20 January 2022 Melbourne, Australia

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Tel: +61 3 9603 1700 Collins Square, Tower Four Fax: +61 3 9602 3870 Level 18, 727 Collins Street www.bdo.com.au Melbourne VIC 3008 GPO Box 5099 Melbourne VIC 3001 Australia

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DECLARATION OF INDEPENDENCE BY SALIM BISKRI TO THE DIRECTORS OF ACUSENSUS LIMITED

As lead auditor of Acusensus Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the audit; and

2. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Acusensus Limited and the entities it controlled during the period.

Salim Biskri Director

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BDO Audit Pty Ltd

Melbourne, 20 January 2022

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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Acusensus Limited Contents 30 June 2021

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Consolidated statement of profit or loss and other comprehensive income	6
Consolidated statement of financial position	7
Consolidated statement of changes in equity	8
Consolidated statement of cash flows	9
Notes to the consolidated financial statements	10
Directors' declaration	36
Independent auditor's report to the members of Acusensus Limited	37

General information

The financial statements cover Acusensus Limited as a consolidated entity consisting of Acusensus Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Acusensus Limited's functional and presentation currency.

Acusensus Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Level 4, 333 Exhibition Street Melbourne, VIC 3000

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 20 January 2022. The directors have the power to amend and reissue the financial statements.

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Acusensus Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2021

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Note Revenue 3 Other income 4 Expenses Cost of sales Salaries and wages 5 Contracting Depreciation and amortisation 5 Marketing Administration 5 Finance costs 5 Loss before income tax expense 5 Income tax expense 6 Loss after income tax expense for the year attributable to the owners of Acusensus Limited Other comprehensive loss for the year, net of tax Total comprehensive loss for the year attributable to the owners of Acusensus Limited Basic loss per share 21 Diluted loss per share 21	Consolidated 2021 2020 $ $ 6,269,239 2,270,383 477,093 125,966 (2,843,932) (1,165,953) (3,431,175) (1,435,813) (560,205) (197,032) (608,566) (141,684) (27,485) (127,344) (2,851,355) (583,618) (72,608) -	Consolidated 2021 2020 $ $ 6,269,239 2,270,383 477,093 125,966 (2,843,932) (1,165,953) (3,431,175) (1,435,813) (560,205) (197,032) (608,566) (141,684) (27,485) (127,344) (2,851,355) (583,618) (72,608) -
	(3,648,994) -	(1,255,095) -
	(3,648,994) -	(1,255,095) -
	(3,648,994)	(1,255,095)
	Cents (27.32) (27.32)	Cents (10.36) (10.36)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

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Acusensus Limited Consolidated statement of financial position As at 30 June 2021

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Note Assets Current assets Cash and cash equivalents 7 Cash and cash equivalents - restricted 7 Trade and other receivables 8 Inventories 9 Total current assets Non-current assets Property, plant and equipment 12 Right-of-use assets 10 Intangibles 13 Other assets 11 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 14 Borrowings 15 Contract Liability Lease liabilities 16 Provisions 17 Income tax payable 6 Total current liabilities Non-current liabilities Lease liabilities 16 Provisions 17 Total non-current liabilities Total liabilities Net assets Equity Issued capital 18 Reserves 19 Accumulated losses Total equity	Consolidated 2021 2020 $ $ 11,327,137 1,011,349 1,000,000 100,000 2,028,023 1,050,713 1,147,465 352,562 15,502,625 2,514,624 3,165,224 792,501 487,861 - 334,397 108,242 81,750 - 4,069,232 900,743 19,571,857 3,415,367	Consolidated 2021 2020 $ $ 11,327,137 1,011,349 1,000,000 100,000 2,028,023 1,050,713 1,147,465 352,562 15,502,625 2,514,624 3,165,224 792,501 487,861 - 334,397 108,242 81,750 - 4,069,232 900,743 19,571,857 3,415,367
	15,502,625	2,514,624
	3,165,224 487,861 334,397 81,750	792,501 - 108,242 -
	4,069,232	900,743
	19,571,857	3,415,367
	3,085,745 287,952 334,482 196,639 218,964 -	479,409 - - - 63,969 170,649
	4,123,782	714,027
	296,387 81,478	- 49,707
	377,865	49,707
	4,501,647	763,734
	15,070,210	2,651,633
	18,831,559 1,267,280 (5,028,629)	3,700,490 330,778 (1,379,635)
	15,070,210	2,651,633

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

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Acusensus Limited Consolidated statement of changes in equity For the year ended 30 June 2021

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Consolidated Balance at 1 July 2019 Loss after income tax expense for the year Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 18) Share-based payments (note 32) Balance at 30 June 2020 Consolidated Balance at 1 July 2020 Loss after income tax expense for the year Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 18) Share-based payments (note 32) Balance at 30 June 2021	Issued capital $ 1,447,165 - -	Reserves $ 61,871 - -	Accumulated losses $ (124,540) (1,255,095) -	Total equity $ 1,384,496 (1,255,095) - (1,255,095) 2,253,325 268,907 2,651,633 Total equity $ 2,651,633 (3,648,994) - (3,648,994) 15,131,069 936,502 15,070,210
	- 2,253,325 -	- - 268,907	(1,255,095) - -
	3,700,490	330,778	(1,379,635)
	Issued capital $ 3,700,490 - -	Reserves $ 330,778 - -	Accumulated losses $ (1,379,635) (3,648,994) -
	- 15,131,069 -	- - 936,502	(3,648,994) - -
	18,831,559	1,267,280	(5,028,629)

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

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Acusensus Limited Consolidated statement of cash flows For the year ended 30 June 2021

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Note Cash flows from operating activities Receipts from customers Government grants and stimulus received Payments to suppliers and employees Interest received Interest paid Government grant repayment Net cash used in operating activities 31 Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents (inclusive of restricted balances) at the end of the financial year 7	Consolidated 2021 2020 $ $ 5,786,265 1,811,034 125,966 25,966 (6,671,747) (3,289,680) 1,819 15,663 (72,608) - (170,649) - (1,000,954) (1,437,017)	Consolidated 2021 2020 $ $ 5,786,265 1,811,034 125,966 25,966 (6,671,747) (3,289,680) 1,819 15,663 (72,608) - (170,649) - (1,000,954) (1,437,017)
	(1,000,954)	(1,437,017)
	(2,846,369) (319,985)	(719,287) (119,569)
	(3,166,354)	(838,856)
	15,131,069 1,132,389 (844,437) (35,925)	2,253,325 - - -
	15,383,096	2,253,325
	11,215,788 1,111,349	(22,548) 1,133,897
	12,327,137	1,111,349

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

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Acusensus Limited Notes to the consolidated financial statements 30 June 2021

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Note 1. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The consolidated entity financial statements have been prepared on the going concern basis of accounting, which assumes the continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The consolidated entity incurred an operating loss of $3,648,994 (30 June 2020: $1,255,095) and had cash outflows from operating activities of $1,900,954 (30 June 2020: $1,537,017). In addition, the consolidated entity had a net current asset position of $11,378,843 at 30 June 2021 (30 June 2020: net current asset of $1,800,597) and net asset position of $15,070,210 at 30 June 2021 (30 June 2020: net asset position of $2,651,633).

The consolidated entity has been prepared on a going concern basis for the following reasons:

• As at 14 January 2022, the entity had a strong cash position of $ 5,347,250.

• The Company has recent history of successful fund raising, with total proceeds of $15,131,069 raised through the issuance of convertible notes (subsequently fully converted into share capital) and two separate share placements during the financial period.

• Since 30 June 2021, the Company has successfully mobilised a multi-year NSW Mobile Speed Contract and Queensland Mobile Phone and Seatbelt Safety contract that will significantly increase the scale the consolidated entity's operations in future financial years.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 28.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Acusensus Limited ('company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Acusensus Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2021

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Note 1. Significant accounting policies (continued)

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Foreign currency translation

The financial statements are presented in Australian dollars, which is Acusensus Limited's functional and presentation currency.

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign operations

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.

The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2021

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Note 1. Significant accounting policies (continued)

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.

Financial assets at amortised cost

A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.

Impairment of financial assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.

Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2021

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Note 1. Significant accounting policies (continued)

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

Note 2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Coronavirus (COVID-19) pandemic

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.

Provision for impairment of inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.

Estimation of useful lives of assets

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2021

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Note 2. Critical accounting judgements, estimates and assumptions (continued)

Income tax

The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Employee benefits provision

As discussed in note 17, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

Note 3. Revenue

Revenue from contracts with customers Rendering of services Sale of goods Other revenue Interest revenue Revenue	Consolidated 2021 2020 $ $ 5,923,064 2,230,728 344,356 23,992 6,267,420 2,254,720 1,819 15,663 6,269,239 2,270,383	Consolidated 2021 2020 $ $ 5,923,064 2,230,728 344,356 23,992 6,267,420 2,254,720 1,819 15,663 6,269,239 2,270,383
	6,267,420	2,254,720
	1,819	15,663
	6,269,239	2,270,383

Accounting policy for revenue recognition

The consolidated entity recognises revenue as follows:

Revenue from contracts with customers

Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.

Sale of goods

Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery.

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Note 3. Revenue (continued)

Rendering of services

Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed price or an hourly rate.

Government grants

Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Note 4. Other income

Government grants Subsidies and grants Other income	Consolidated 2021 2020 $ $ 477,093 25,966 - 100,000 477,093 125,966	Consolidated 2021 2020 $ $ 477,093 25,966 - 100,000 477,093 125,966
	477,093	125,966

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Note 5. Expenses

Loss before income tax includes the following specific expenses: Depreciation Motor vehicles Computer equipment Office equipment Camera equipment Demonstration equipment Land and buildings right-of-use assets Total depreciation Amortisation Capitalised development costs Total depreciation and amortisation Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs expensed Net foreign exchange loss IPO costs Defined contribution superannuation expense Share-based payments expense Employee benefits expense excluding superannuation	Consolidated 2021 2020 $ $ 42,493 14,674 35,079 18,207 6,074 2,242 319,962 95,234 70,037 - 41,090 - 514,735 130,357 93,831 11,327 608,566 141,684 68,949 - 3,659 - 72,608 - 40,867 33,705 520,103 - 359,165 160,521 955,036 268,906 3,072,011 1,275,292	Consolidated 2021 2020 $ $ 42,493 14,674 35,079 18,207 6,074 2,242 319,962 95,234 70,037 - 41,090 - 514,735 130,357 93,831 11,327 608,566 141,684 68,949 - 3,659 - 72,608 - 40,867 33,705 520,103 - 359,165 160,521 955,036 268,906 3,072,011 1,275,292
	514,735	130,357
	93,831	11,327
	608,566	141,684
	68,949 3,659	- -
	72,608	-
	40,867	33,705
	520,103	-
	359,165	160,521
	955,036	268,906
	3,072,011	1,275,292

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Defined contribution superannuation expense

Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.

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Note 6. Income tax

Income tax expense Current tax Deferred tax Deferred tax assets not recognised Aggregate income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 26% (2020: 30%) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based payments Non-deductible expenditure R&D tax incentive benefit Non-assessable income Tax rate differential Current year temporary differences not recognised Income tax expense Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 26%	Consolidated 2021 2020 $ $ (263,037) (401,148) (610,794) (46,244) 873,831 447,392 - - (3,648,994) (1,255,095) (948,738) (376,529) 248,309 80,672 1,950 3,528 (124,044) (125,063) - (30,000) (51,308) - (873,831) (447,392) 873,831 447,392 - -	Consolidated 2021 2020 $ $ (263,037) (401,148) (610,794) (46,244) 873,831 447,392 - - (3,648,994) (1,255,095) (948,738) (376,529) 248,309 80,672 1,950 3,528 (124,044) (125,063) - (30,000) (51,308) - (873,831) (447,392) 873,831 447,392 - -
	-	-
	(3,648,994)	(1,255,095)
	(948,738) 248,309 1,950 (124,044) - (51,308)	(376,529) 80,672 3,528 (125,063) (30,000) -
	(873,831) 873,831	(447,392) 447,392
	-	-
	Consolidated 2021 2020 $ $ 2,718,687 1,479,407 706,859 384,646
	706,859	384,646

The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.

Deferred tax assets not recognised Deferred tax assets not recognised comprises of: Tax losses Blackhole expenditure and other deductions Employee benefits Accrued expenses Other liabilities Total deferred tax assets not recognised	Consolidated 2021 2020 $ $ 706,859 443,822 131,057 6,441 115,672 34,103 329,400 32,621 125,758 17,928 1,408,746 534,915	Consolidated 2021 2020 $ $ 706,859 443,822 131,057 6,441 115,672 34,103 329,400 32,621 125,758 17,928 1,408,746 534,915
	1,408,746	534,915

The above potential tax benefit has not been recognised in the statement of financial position as the recovery of this benefit is uncertain.

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Note 6. Income tax (continued)

Provision for income tax	Consolidated 2021 2020 $ $ - 170,649

The prior income tax balance related to an amount owing to the Australian Tax Authority for repayment of tax refunds received during the financial year based on their voluntary amendment to the company's 2019 Income Tax Return.

Accounting policy for income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or

• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Acusensus Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.

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Note 7. Cash and cash equivalents

Current assets Unrestricted Cash on hand Cash at bank Term deposits Restricted Cash at Bank	Consolidated 2021 2020 $ $ 490 490 11,326,647 599,341 - 411,518 11,327,137 1,011,349 1,000,000 100,000 12,327,137 1,111,349	Consolidated 2021 2020 $ $ 490 490 11,326,647 599,341 - 411,518 11,327,137 1,011,349 1,000,000 100,000 12,327,137 1,111,349
	12,327,137	1,111,349

Accounting policy for cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Restricted cash balance represents cash held by the entity as required under its bank guarantee arrangements. The cash held is not available for the purposes of the group’s operations.

Note 8. Trade and other receivables

Current assets Trade receivables Other receivables Accrued income	Consolidated 2021 2020 $ $ 365,271 360,282 883,172 387,017 779,580 303,414 2,028,023 1,050,713	Consolidated 2021 2020 $ $ 365,271 360,282 883,172 387,017 779,580 303,414 2,028,023 1,050,713
	2,028,023	1,050,713

Allowance for expected credit losses

The ageing of the trade receivables and allowance for expected credit losses provided for above are as follows:

Expected credit loss rate 2021 2020 Consolidated % % Current - - > 30 days - - > 60 days - - > 90 days - - > 120 days - -	Carrying amount 2021 2020 $ $ 184,482 360,281 165,000 - 15,789 - - - - -	Carrying amount 2021 2020 $ $ 184,482 360,281 165,000 - 15,789 - - - - -	Allowance for expected credit losses 2021 2020 $ $ - - - - - - - - - -	Allowance for expected credit losses 2021 2020 $ $ - - - - - - - - - -
	365,271	360,281	-	-

Accounting policy for trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.

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Note 8. Trade and other receivables (continued)

The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

Note 9. Inventories

Current assets Components	Consolidated 2021 2020 $ $ 1,147,465 352,562

Accounting policy for inventories

Inventories are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.

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.

Note 10. Right-of-use assets

Non-current assets Land and buildings - right-of-use Less: Accumulated depreciation	Consolidated 2021 2020 $ $ 528,951 - (41,090) - 487,861 -	Consolidated 2021 2020 $ $ 528,951 - (41,090) - 487,861 -
	487,861	-

Accounting policy for right-of-use assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.

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Note 11. Other assets

Non-current assets Bonds on leased premises	Consolidated 2021 2020 $ $ 81,750 - 81,750 -	Consolidated 2021 2020 $ $ 81,750 - 81,750 -
	81,750	-

Note 12. Property, plant and equipment

Non-current assets Motor vehicles - at cost Less: Accumulated depreciation Computer equipment - at cost Less: Accumulated depreciation Office equipment - at cost Less: Accumulated depreciation Camera equipment - at cost Less: Accumulated depreciation Demonstration Equipment - at cost Less: Accumulated depreciation	Consolidated 2021 2020 $ $ 321,715 89,700 (68,105) (15,872) 253,610 73,828 157,838 72,089 (57,573) (22,494) 100,265 49,595 36,964 10,909 (8,641) (2,566) 28,323 8,343 3,026,899 773,212 (432,439) (112,477) 2,594,460 660,735 249,596 - (61,030) - 188,566 - 3,165,224 792,501	Consolidated 2021 2020 $ $ 321,715 89,700 (68,105) (15,872) 253,610 73,828 157,838 72,089 (57,573) (22,494) 100,265 49,595 36,964 10,909 (8,641) (2,566) 28,323 8,343 3,026,899 773,212 (432,439) (112,477) 2,594,460 660,735 249,596 - (61,030) - 188,566 - 3,165,224 792,501
	253,610	73,828
	157,838 (57,573)	72,089 (22,494)
	100,265	49,595
	36,964 (8,641)	10,909 (2,566)
	28,323	8,343
	3,026,899 (432,439)	773,212 (112,477)
	2,594,460	660,735
	249,596 (61,030)	- -
	188,566	-
	3,165,224	792,501

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2019 Additions Depreciation expense Balance at 30 June 2020 Additions Foreign Exchange Movement Depreciation expense Balance at 30 June 2021	Motor vehicles $ 21,046 67,456 (14,674)	Computer equipment $ 14,849 52,953 (18,207)	Office equipment $ 3,328 7,257 (2,242)	Camera equipment $ 164,348 591,621 (95,234)	Total $ 203,571 719,287 (130,357)
	73,828 232,030 - (42,493)	49,595 85,749 - (35,080)	8,343 26,055 - (6,075)	660,735 2,508,862 (6,327) (389,998)	792,501 2,852,696 (6,327) (473,646)
	263,365	100,264	28,323	2,773,272	3,165,224

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Note 12. Property, plant and equipment (continued)

Accounting policy for property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment over their expected useful lives as follows:

Motor vehicles 3 years Computer equipment 3 years Office equipment 3 years Camera equipment 3 years Demonstration equipment 3 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Note 13. Intangibles

Non-current assets Capitalised development costs - at cost Less: Accumulated amortisation	Consolidated 2021 2020 $ $ 439,554 119,569 (105,157) (11,327) 334,397 108,242	Consolidated 2021 2020 $ $ 439,554 119,569 (105,157) (11,327) 334,397 108,242
	334,397	108,242

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial year are set out below:

Consolidated Balance at 1 July 2020 Additions Amortisation expense Balance at 30 June 2021	Capitalised development costs $ 108,242 319,985 (93,830)
	334,397

Accounting policy for intangible assets

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

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Note 13. Intangibles (continued)

Research and development

Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the consolidated entity is able to use or sell the asset; the consolidated entity has sufficient resources and intent to complete the development; and its costs can be measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 3 years.

Note 14. Trade and other payables

Current liabilities Trade payables Other payables	Consolidated 2021 2020 $ $ 490,147 125,622 2,595,598 353,787 3,085,745 479,409	Consolidated 2021 2020 $ $ 490,147 125,622 2,595,598 353,787 3,085,745 479,409
	3,085,745	479,409

Accounting policy for trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Other payables includes oversubscribed equity and subsequently repaid to shareholder post year end.

Note 15. Borrowings

Current liabilities Loan - payables	Consolidated 2021 2020 $ $ 287,952 -

Refer to note 22 for further information on financial instruments.

Accounting policy for borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

The finance loan was an arm’s length transaction traded on commercial terms, with an interest rate of 8% per annum and a maturity date of 1 July 2021.

Note 16. Lease liabilities

Current liabilities Lease liability Non-current liabilities Lease liability	Consolidated 2021 2020 $ $ 196,639 - 296,387 - 493,026 -	Consolidated 2021 2020 $ $ 196,639 - 296,387 - 493,026 -
	296,387	-
	493,026	-

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Note 16. Lease liabilities (continued)

Refer to note 22 for further information on financial instruments.

Accounting policy for lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

Note 17. Provisions

Current liabilities Annual leave Non-current liabilities Long service leave	Consolidated 2021 2020 $ $ 218,964 63,969 81,478 49,707 300,442 113,676	Consolidated 2021 2020 $ $ 218,964 63,969 81,478 49,707 300,442 113,676
	81,478	49,707
	300,442	113,676

Accounting policy for provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.

Accounting policy for employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

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Note 18. Issued capital

2021 Shares Ordinary shares - fully paid 20,014,994 Movements in ordinary share capital Details Date Balance 1 July 2019 Issue of shares 30 September 2019 Balance 30 June 2020 Proceeds from $2 million placement 23 June 2021 Employee option conversion 8 December 2020 Employee bonus issue 8 April 2021 $10m Primary Offer 23 June 2021 Conversion of convertible notes 23 June 2021 Balance 30 June 2021	2021 Shares 20,014,994		Consolidated 2020 2021 Shares $ 12,650,263 18,831,559	Consolidated 2020 2021 Shares $ 12,650,263 18,831,559	2020 $ 3,700,490
			Shares 10,492,331 2,157,932	Issue price $0.95 $2.00 $0.00* $0.00 $2.75 $2.00	$ 1,645,490 2,055,000
			12,650,263 1,000,000 896,000 292,208 3,644,196 1,532,327		3,700,490 2,000,000 44,876 - 10,021,539 3,064,654
			20,014,994		18,831,559

* Employee options were converted at multiple exercise prices. Refer to Note 33 for details on options exercise prices.

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity is not subject to certain financing arrangements covenants.

The capital risk management policy remains unchanged from the 30 June 2020 financial report.

Accounting policy for issued capital

Ordinary shares are classified as equity.

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Note 19. Reserves

Foreign currency reserve Employee equity benefits reserve	Consolidated 2021 2020 $ $ (18,533) - 1,285,813 330,778 1,267,280 330,778	Consolidated 2021 2020 $ $ (18,533) - 1,285,813 330,778 1,267,280 330,778
	1,267,280	330,778

Employee equity benefits reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services.

The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of rights over shares is determined using a binomial model. The fair value of shares is determined by the market value of the consolidated entity’s shares at grant date.

In valuing equity-settled transactions, any performance conditions are taken into account if relevant and assumptions around the likelihood of meeting these performance conditions are factored into the valuation model. The cost of equitysettled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

• the extent to which the vesting period has expired; and

• the consolidated entity’s best estimate of the number of equity instruments that will ultimately vest.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

Note 20. Operating segments

Identification of reportable operating segments

These operating segments are identified based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. Similar operating segments can be aggregated to form one reportable segment. Accordingly, the consolidated entity only operates as one segment.

Accounting policy for operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Note 21. Earnings per share

Loss after income tax attributable to the owners of Acusensus Limited Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share	Consolidated 2021 2020 $ $ (3,648,994) (1,255,095)	Consolidated 2021 2020 $ $ (3,648,994) (1,255,095)
	Number 13,356,120	Number 12,112,258
	13,356,120	12,112,258

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Note 21. Earnings per share (continued)

	Cents	Cents
Basic loss per share	(27.32)	(10.36)
Diluted loss per share	(27.32)	(10.36)
Accounting policy for earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Acusensus Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Note 22. Financial instruments

Financial risk management objectives

The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.

Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance reports to the Board on a monthly basis.

Market risk

Foreign currency risk

The consolidated entity is not exposed to any significant foreign currency risk.

Price risk

The consolidated entity is not exposed to any significant price risk.

Interest rate risk

The consolidated entity is not exposed to any significant interest rate risk.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not hold any collateral.

The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available.

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Note 22. Financial instruments (continued)

Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year.

Liquidity risk

Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.

The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.

Remaining contractual maturities

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

Weighted average interest rate Consolidated - 2021 % Non-derivatives Non-interest bearing Trade payables - Contract Liability - Other payables - Interest-bearing - variable Borrowings 8.00% Lease liability 5.00% Total non-derivatives Weighted average interest rate Consolidated - 2020 % Non-derivatives Non-interest bearing Trade payables - Other payables - Total non-derivatives	1 year or less $ 490,147 334,482 2,595,598 287,952 196,639	Between 1 and 2 years $ - - - - 296,387	Between 2 and 5 years $ - - - - -	Over 5 years $ - - - - -	Remaining contractual maturities $ 490,147 334,482 2,595,598 287,952 493,026
	3,904,818	296,387	-	-	4,201,205
	1 year or less $ 125,622 353,787	Between 1 and 2 years $ - -	Between 2 and 5 years $ - -	Over 5 years $ - -	Remaining contractual maturities $ 125,622 353,787
	479,409	-	-	-	479,409

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

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Note 23. Key management personnel disclosures

Directors

The following persons were directors of Acusensus Limited during the financial year:

Ravin Mirchandani Non-executive Director Thomas Patterson Non-executive Director Alexander Jannink Executive Director

Other key management personnel

The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, during the financial year:

Alexander Jannink	Chief Executive Officer
Mark Lawrence	CFO & Company Secretary
Christopher Kells	Chief Technology Officer
Andrew Matthews	Head of Operations
Sam Almaliki	Head of Commercial
Ron Johnson	Head of Strategy
Shaun Miller	Head of Partnerships

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments	Consolidated 2021 2020 $ $ 2,152,781 383,465 125,721 32,894 49,640 8,688 341,866 105,591 2,670,008 530,638	Consolidated 2021 2020 $ $ 2,152,781 383,465 125,721 32,894 49,640 8,688 341,866 105,591 2,670,008 530,638
	2,670,008	530,638

Note 24. Related party transactions

Subsidiaries

Interests in subsidiaries are set out in note 29.

Key management personnel

Disclosures relating to key management personnel are set out in note 23.

Transactions with related parties

The following transactions occurred with related parties:

	Consolidated	Consolidated
	2021	2020
	$	$
Sale of goods and services:
Sale of goods to Ador Powertron Limited (a director related entity)	344,356	25,238
Other transactions:
Transfer of assets to a subsidiary	-	75,660

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Note 24. Related party transactions (continued)

Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to transactions with related parties:

	Consolidated	Consolidated
	2021	2020
	$	$
Current receivables:
Trade receivables from related party		-	550

Loans to/from related parties

The following balances are outstanding at the reporting date in relation to loans with related parties:

	Consolidated	Consolidated
	2021	2020
	$	$
Loan from parent to subsidiary - Acusensus Inc.	1,137,270	75,660
Loan from parent to subsidiary - Acusensus Australia Pty Ltd	134,137	-
Loan from parent to subsidiary - Acusensus IP Pty Ltd	31,289	-

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates, where applicable.

Note 25. Contingent liabilities

The consolidated entity has provided bank guarantees as at 30 June 2021 of $1,000,000 (30 June 2020: $100,000) to customers as security for contractual performance obligations.

The consolidated entity also has a contingent liability of $211,633 for FY2022/2023 related the NSW & QLD contract awards.

Note 26. Commitments

Capital commitments Committed at the reporting date but not recognised as liabilities, payable: Property, plant and equipment	Consolidated 2021 2020 $ $ 286,122 369,982

As at 1 July 2020, the company's lease commitments have been captured within the lease liability amount on the statement of financial position following the adoption of AASB 16 Leases.

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Note 27. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by the auditor of the company:

Audit services Audit of the financial statements Other services Preparation of financial statements Note 28. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Loss after income tax Total comprehensive loss Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Employee equity benefits reserve Accumulated losses Total equity	Consolidated 2021 2020 $ $ 27,500 24,500 5,500 4,500 33,000 29,000	Consolidated 2021 2020 $ $ 27,500 24,500 5,500 4,500 33,000 29,000
	5,500	4,500
	33,000	29,000
	Parent 2021 2020 $ $ (3,948,253) (1,255,095) (3,948,253) (1,255,095)
	(3,948,253)	(1,255,095)
	Parent 2021 2020 $ $ 14,964,599 2,514,624 17,911,579 3,415,367 3,040,617 714,027 3,122,095 763,734 18,831,559 3,700,490 1,285,813 330,778 (5,327,888) (1,379,635) 14,789,484 2,651,633
	17,911,579	3,415,367
	3,040,617	714,027
	3,122,095	763,734
	18,831,559 1,285,813 (5,327,888)	3,700,490 330,778 (1,379,635)
	14,789,484	2,651,633

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 (30 June 2020: $nil).

Contingent liabilities

The parent entity had contingent liabilities as at 30 June 2021 (30 June 2020: $nil). Refer to Note 25.

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Note 28. Parent entity information (continued)

Capital commitments - Property, plant and equipment

The parent entity had capital commitments for property, plant and equipment as at 30 June 2021 (30 June 2020: $nil). Refer to Note 26.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following:

• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

• Investments in associates are accounted for at cost, less any impairment, in the parent entity.

• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

Note 29. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1:

		Ownership	interest
	Principal place of business /	2021	2020
Name	Country of incorporation	%	%
Acusensus Australia Pty Ltd	Australia	100.00%	100.00%
Acusensus IP Pty Ltd	Australia	100.00%	100.00%
Acusensus Inc.	United States of America	100.00%	100.00%

Note 30. Events after the reporting period

Since 30 June 2021 the Company has successfully mobilised a multi-year NSW of Mobile Speed Contract and Queensland Mobile Phone and Seatbelt Safety contract that will significantly increase the scale the consolidated entity's operations in future financial years.

No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Note 31. Reconciliation of loss after income tax to net cash used in operating activities

Loss after income tax expense for the year Adjustments for: Depreciation and amortisation Share-based payments Foreign exchange differences Change in operating assets and liabilities: Increase in trade and other receivables Increase in inventories Increase in trade and other payables Increase in employee benefits (Decrease)/increase in provision for income tax Net cash used in operating activities	Consolidated 2021 2020 $ $ (3,648,994) (1,255,095) 608,566 141,684 955,035 268,907 (18,532) - (1,059,060) (829,223) (692,761) (269,381) 2,838,675 262,291 186,766 73,151 (170,649) 170,649 (1,000,954) (1,437,017)	Consolidated 2021 2020 $ $ (3,648,994) (1,255,095) 608,566 141,684 955,035 268,907 (18,532) - (1,059,060) (829,223) (692,761) (269,381) 2,838,675 262,291 186,766 73,151 (170,649) 170,649 (1,000,954) (1,437,017)
	(1,000,954)	(1,437,017)

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Note 32. Share-based payments

A share option plan has been established by the consolidated entity and approved by shareholders at a general meeting, whereby the consolidated entity may, at the discretion of the Nomination and Remuneration Committee, grant options over ordinary shares in the company to certain key management personnel of the consolidated entity. The options are issued for nil consideration and are granted in accordance with performance guidelines established by the Nomination and Remuneration Committee.

All share options listed hereinafter contain no expiry date.

2021 Grant date Exercise price 20/12/2018 $0.02 06/02/2019 $0.04 19/08/2019 $0.15 10/02/2020 $0.79 10/02/2020 $1.58 10/02/2020 $2.37 15/03/2020 $0.35 30/08/2020 $2.00 05/08/2020 $2.30 09/09/2020 $2.30 27/09/2021 $2.76 Weighted average exercise price 2020 Grant date Exercise price 20/12/2018 $0.02 06/02/2019 $0.04 19/08/2019 $0.15 10/02/2020 $0.79 10/02/2020 $1.58 10/02/2020 $2.37 15/03/2020 $0.35 30/08/2020 $2.00 Weighted average exercise price	Balance at the start of the year 800,000 100,000 186,000 100,000 100,000 100,000 10,000 306,325 - - -	Granted - - - - - - - - 250,000 50,000 107,459	Exercised (600,000) (100,000) (186,000) - - - (10,000) (292,208) - - -	Expired/ forfeited/ other - - - - - - - (14,117) - - -	Balance at the end of the year 200,000 - - 100,000 100,000 100,000 - - 250,000 50,000 107,459
	1,702,325	407,459	(1,188,208)	(14,117)	907,459
	$0.91 Balance at the start of the year 800,000 100,000 - - - - - -	$2.45 Granted - - 186,000 100,000 100,000 100,000 10,000 306,325	$0.51 Exercised - - - - - - - -	$2.00 Expired/ forfeited/ other - - - - - - - -	$2.09 Balance at the end of the year 800,000 100,000 186,000 100,000 100,000 100,000 10,000 306,325
	900,000	802,325	-	-	1,702,325
	$0.03	$1.21	$0.00	$0.00	$0.91

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Note 32. Share-based payments (continued)

Set out below are the options exercisable at the end of the financial year:

Exercisable date 15/03/2020 05/08/2020 09/09/2020 10/02/2021	2021 Number - 250,000 50,000 100,000	2020 Number 10,000 - - -
	400,000	10,000

The weighted average share price during the financial year was $2.09 (2020: $0.95).

The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.4 years (2020: 2.7 years).

For the options granted during the current and prior financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows:

	Share price	Exercise	Expected	Dividend	Risk-free	Fair value at
Grant date	at grant date	price	volatility	yield	interest rate	grant date
20/12/2018	$0.20	$0.02	70.00%	-	2.35%	$0.186
06/02/2019	$0.20	$0.04	70.00%	-	2.18%	$0.174
19/08/2019	$0.95	$0.15	70.00%	-	0.92%	$0.836
10/02/2020	$0.95	$0.79	70.00%	-	1.01%	$0.639
10/02/2020	$0.95	$1.58	70.00%	-	1.01%	$0.618
10/02/2020	$0.95	$2.37	70.00%	-	1.01%	$0.610
15/03/2020	$0.95	$0.35	70.00%	-	1.01%	$0.650
30/08/2020	$2.00	$2.00	70.00%	-	1.06%	$1.427
5/8/2020	$2.00	$2.30	70.00%	-	0.85%	$0.000
9/9/2020	$2.00	$2.30	70.00%	-	0.29%	$0.000
27/9/2021	$2.75	$2.76	70.00%	-	1.43%	$0.000

Accounting policy for share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

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Note 32. Share-based payments (continued)

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

• during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.

• from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

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Acusensus Limited Directors' declaration 30 June 2021

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In the directors' opinion:

• the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;

• the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements;

• the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and

• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the directors

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_________ Alexander Jannink Director

20 January 2022 Melbourne, Australia

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Tel: +61 3 9603 1700 Fax: +61 3 9602 3870 www.bdo.com.au

Collins Square, Tower Four Level 18, 727 Collins Street Melbourne VIC 3008 GPO Box 5099 Melbourne VIC 3001 Australia

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INDEPENDENT AUDITOR'S REPORT

To the members of Acusensus Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Acusensus Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration.

In our opinion the accompanying financial report of Acusensus Limited, is in accordance with the Corporations Act 2001 , including:

• (i) Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and

• (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The directors are responsible for the other information. The other information obtained at the date of this auditor’s report is information included in the directors’ report, but does not include the financial report and our auditor’s report thereon.

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf

This description forms part of our auditor’s report.

BDO Audit Pty Ltd

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Salim Biskri Director Melbourne, 20 January 2022

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Acusensus Limited

ACN 625 231 941

Financial Statements - 30 June 2022

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Acusensus Limited Directors' report 30 June 2022

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The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Acusensus Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2022.

Directors

The following persons were directors of Acusensus Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Alexander Jannink Ravin Mirchandani Thomas Patterson

Information on directors
Name:	Alexander Jannink
Title:	Executive Director
Experience and expertise:	Alexander is a founder of Acusensus and has pioneered the design, development and
	deployment of radar and camera enforcement technologies in multiple applications,
	markets and geographies across the globe.
Name:	Ravin Mirchandani
Title:	Non-Executive Chairman
Experience and expertise:	Ravin is executive chairman of Ador Powertron Limited, a company incorporated in
	India that is a major shareholder of Acusensus, and has extensive commercial
	experience across a range of sectors including defence, energy, gas, manufacturing,
	power electronics and traffic enforcement.
Name:	Thomas Patterson
Title:	Non-Executive Director
Experience and expertise:	Tom has worked with investors, private and small cap ASX-listed companies on a range
	of matters, providing practical and innovative financial, taxation and commercial
	solutions during his time as a manager at Big 4 accounting and advisory firm Deloitte
	and as a Client Director at Pitcher Partners.

Meetings of directors

The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2022, and the number of meetings attended by each director were:

	Attended	Held
Alexander Jannink	10		10
Ravin Mirchandani	10		10
Thomas Patterson	10		10

Held: represents the number of meetings held during the time the director held office.

The size of the Board is considered to be commensurate with the early stage of the company's development. Accordingly, there are no Committees and all matters are attended to by the full Board.

Principal activities

During the financial year the principal activities of the consolidated entity consisted of the provision of world-leading technology to detect and capture prosecutable evidence of drivers’ illegal mobile phone use, seatbelt use, and speed detection.

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Acusensus Limited Directors' report 30 June 2022

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Review of operations

The consolidated entity incurred an operating profit after income tax expense of $1,425,331 (30 June 2021: operating loss of $3,648,994).

The net income for the year is a result of successfully mobilising a multi-year NSW Mobile Speed contract and Queensland Mobile Phone and Seatbelt Safety contract.

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the consolidated entity during the financial year.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Matters subsequent to the end of the financial year

392,835 unissued ordinary shares under the employee share option plan were granted on 1 July 2022 at an exercise price of $2.76. The fair value of these unissued ordinary shares under the employee share option plan is $475,330.

No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Likely developments and expected results of operations

Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental regulation

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.

Shares under option

There were 1,513,807 (30 June 2021: 907,459) unissued ordinary shares under option at the date of this report.

Shares issued on the exercise of options

There were nil ordinary shares of Acusensus Limited issued on the exercise of options during the year ended 30 June 2022 (30 June 2021: 1,188,208). Refer to note 18 for further information on share issued.

Indemnity and insurance of officers

The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

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Acusensus Limited Directors' report 30 June 2022

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Indemnity and insurance of auditor

The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor.

During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report and forms part of the directors’ report.

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the directors

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_________Alexander Jannink Director

30 August 2022 Melbourne, Australia

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Collins Square, Tower Four Level 18, 727 Collins Street Melbourne VIC 3008 GPO Box 5099 Melbourne VIC 3001 Australia

Tel: +61 3 9603 1700 Fax: +61 3 9602 3870 www.bdo.com.au

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DECLARATION OF INDEPENDENCE BY SALIM BISKRI TO THE DIRECTORS OF ACUSENSUS LIMITED

As lead auditor of Acusensus Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

2. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Acusensus Limited and the entities it controlled during the period.

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Salim Biskri Director

BDO Audit Pty Ltd

Melbourne, 30 August 2022

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BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

Acusensus Limited Contents 30 June 2022

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Consolidated statement of profit or loss and other comprehensive income	6
Consolidated statement of financial position	7
Consolidated statement of changes in equity	8
Consolidated statement of cash flows	9
Notes to the consolidated financial statements	10
Directors' declaration	37
Independent auditor's report to the members of Acusensus Limited	38

General information

The financial statements cover Acusensus Limited as a consolidated entity consisting of Acusensus Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Acusensus Limited's functional and presentation currency.

Acusensus Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Level 6, 31 Queen Street Melbourne, VIC 3000

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 August 2022. The directors have the power to amend and reissue the financial statements.

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Acusensus Limited

Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2022

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Note Revenue 3 Other income 4 Expenses Cost of sales Salaries and wages 5 Contracting Depreciation and amortisation 5 Marketing Administration 5 Finance costs 5 Profit/(loss) before income tax Income tax benefit 6 Profit/(loss) after income tax for the year attributable to the owners of Acusensus Limited Other comprehensive income/(loss) for the year, net of tax: Items that may be reclassified subsequently to profit or loss Foreign currency translation Total comprehensive income/(loss) for the year attributable to the owners of Acusensus Limited Basic earnings/(loss) per share 21 Diluted earnings/(loss) per share 21	Consolidated 2022 2021 $ $ 28,651,335 6,267,420 78,207 478,912 (16,168,851) (2,843,932) (4,946,859) (4,417,021) (1,144,144) (560,205) (3,182,904) (608,566) (225,425) (27,485) (1,861,737) (1,865,509) (38,071) (72,608)	Consolidated 2022 2021 $ $ 28,651,335 6,267,420 78,207 478,912 (16,168,851) (2,843,932) (4,946,859) (4,417,021) (1,144,144) (560,205) (3,182,904) (608,566) (225,425) (27,485) (1,861,737) (1,865,509) (38,071) (72,608)
	1,161,551 263,780	(3,648,994) -
	1,425,331 19,429	(3,648,994) -
	1,444,760	(3,648,994)
	Cents 0.07 0.07	Cents (27.32) (27.32)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

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Acusensus Limited Consolidated statement of financial position As at 30 June 2022

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Note Assets Current assets Cash and cash equivalents 7 Cash and cash equivalents - restricted 7 Trade and other receivables 8 Contract assets Inventories 9 Total current assets Non-current assets Property, plant and equipment 12 Right-of-use assets 10 Intangibles 13 Deferred tax asset 6 Other assets 11 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 14 Borrowings 15 Contract liabilities Lease liabilities 16 Provisions 17 Total current liabilities Non-current liabilities Lease liabilities 16 Provisions 17 Total non-current liabilities Total liabilities Net assets Equity Issued capital 18 Reserves 19 Accumulated losses Total equity	Consolidated 2022 2021 $ $ 7,354,203 11,327,137 1,252,325 1,000,000 3,637,636 1,248,443 606,644 779,580 1,902,553 1,147,465	Consolidated 2022 2021 $ $ 7,354,203 11,327,137 1,252,325 1,000,000 3,637,636 1,248,443 606,644 779,580 1,902,553 1,147,465
	14,753,361	15,502,625
	8,171,378 2,298,258 572,773 263,780 104,211	3,165,224 487,861 334,397 - 81,750
	11,410,400	4,069,232
	26,163,761	19,571,857
	5,939,349 - 248,545 1,189,583 683,645	3,085,745 287,952 334,482 196,639 218,964
	8,061,122	4,123,782
	1,139,909 199,090	296,387 81,478
	1,338,999	377,865
	9,400,121	4,501,647
	16,763,640	15,070,210
	18,831,559 1,535,379 (3,603,298)	18,831,559 1,267,280 (5,028,629)
	16,763,640	15,070,210

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

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Acusensus Limited Consolidated statement of changes in equity For the year ended 30 June 2022

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Consolidated Balance at 1 July 2020 Loss after income tax for the year Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 18) Share-based payments (note 32) Foreign currency translation Balance at 30 June 2021 Consolidated Balance at 1 July 2021 Profit after income tax for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 18) Share-based payments (note 32) Balance at 30 June 2022	Issued capital $ 3,700,490 - -	Reserves $ 330,778 - -	Accumulated losses $ (1,379,635) (3,648,994) -	Total equity $ 2,651,633 (3,648,994) -
	- 15,131,069 - -	- - 955,035 (18,533)	(3,648,994) - - -	(3,648,994) 15,131,069 955,035 (18,533)
	18,831,559	1,267,280	(5,028,629)	15,070,210
	Issued capital $ 18,831,559 - -	Reserves $ 1,267,280 - 19,429	Accumulated losses $ (5,028,629) 1,425,331 -	Total equity $ 15,070,210 1,425,331 19,429
	- - -	19,429 - 248,670	1,425,331 - -	1,444,760 - 248,670
	18,831,559	1,535,379	(3,603,298)	16,763,640

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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Acusensus Limited Consolidated statement of cash flows For the year ended 30 June 2022

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Note Cash flows from operating activities Receipts from customers Government grants and stimulus received Payments to suppliers and employees Interest received Interest paid Government grant repayment Net cash from/(used in) operating activities 31 Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents (inclusive of restricted balances) at the end of the financial year 7	Consolidated 2022 2021 $ $ 26,435,078 5,786,265 75,341 125,966 (21,506,506) (6,671,747) 2,866 1,819 (38,071) (72,608) - (170,649)	Consolidated 2022 2021 $ $ 26,435,078 5,786,265 75,341 125,966 (21,506,506) (6,671,747) 2,866 1,819 (38,071) (72,608) - (170,649)
	4,968,708	(1,000,954)
	(6,818,849) (425,607)	(2,846,369) (319,985)
	(7,244,456)	(3,166,354)
	- - (287,952) (1,156,909)	15,131,069 1,132,389 (844,437) (35,925)
	(1,444,861)	15,383,096
	(3,720,609) 12,327,137	11,215,788 1,111,349
	8,606,528	12,327,137

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2022

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Note 1. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The consolidated entity financial statements have been prepared on the going concern basis of accounting, which assumes the continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The consolidated entity incurred an operating profit after income tax expense of $1,425,331 (30 June 2021: operating loss of $3,648,994) and had cash inflows from operating activities of $4,968,708 (30 June 2021: cash outflows from operating activities of $1,000,954). In addition, the consolidated entity had a net current asset position of $6,692,239 at 30 June 2022 (30 June 2021: net current asset of $11,378,843) and net asset position of $16,763,640 at 30 June 2022 (30 June 2021: net asset position of $15,070,210).

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities.

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 28.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Acusensus Limited ('company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year then ended. Acusensus Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2022

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Note 1. Significant accounting policies (continued)

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Foreign currency translation

The financial statements are presented in Australian dollars, which is Acusensus Limited's functional and presentation currency.

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign operations

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.

The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.

Financial assets at amortised cost

A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2022

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Note 1. Significant accounting policies (continued)

Impairment of financial assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.

Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

Note 2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2022

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Note 2. Critical accounting judgements, estimates and assumptions (continued)

Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or BlackScholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.

Provision for impairment of inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.

Estimation of useful lives of assets

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

Income tax

The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Employee benefits provision

As discussed in note 17, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2022

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Note 3. Revenue

Revenue from contracts with customers Rendering of services Sale of goods Revenue	Consolidated 2022 2021 $ $ 28,369,438 5,923,064 281,897 344,356	Consolidated 2022 2021 $ $ 28,369,438 5,923,064 281,897 344,356
	28,651,335	6,267,420

Accounting policy for revenue recognition

The consolidated entity recognises revenue as follows:

Revenue from contracts with customers

Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.

Sale of goods

Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery.

Rendering of services

Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed price or an hourly rate.

Government grants

Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

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Acusensus Limited Notes to the consolidated financial statements 30 June 2022

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Note 3. Revenue (continued)

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Contract assets

Contract assets are recognised when the company has transferred goods or services to the customer but where the company is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes.

Contract liabilities

Contract liabilities represent the company's obligation to transfer goods or services to a customer and are recognised when a customer pays consideration, or when the company recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the company has transferred the goods or services to the customer.

Note 4. Other income

Government grants Interest revenue Other income	Consolidated 2022 2021 $ $ 75,341 477,093 2,866 1,819	Consolidated 2022 2021 $ $ 75,341 477,093 2,866 1,819
	78,207	478,912

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Note 5. Expenses

Profit/(loss) before income tax includes the following specific expenses: Salaries and wages Salaries and wages Share based payments expense Defined contribution superannuation expense Other Salaries and wages Depreciation and amortisation Depreciation - property, plant and equipment Depreciation - right-of-use assets Amortisation Depreciation and amortisation Administration Professional fees Software and subscription expense Travel expense Insurance expense Utilities expense Motor vehicle expense IPO costs Net foreign exchange loss Other expenses Administration Finance costs Interest and finance charges paid/payable on borrowings Interest and finance charges paid/payable on lease liabilities Finance costs	Consolidated 2022 2021 $ $ 3,338,085 2,936,762 248,670 955,036 719,064 359,165 641,040 166,058	Consolidated 2022 2021 $ $ 3,338,085 2,936,762 248,670 955,036 719,064 359,165 641,040 166,058
	4,946,859	4,417,021
	1,812,695 1,182,978 187,231	473,645 41,090 93,831
	3,182,904	608,566
	396,343 313,947 304,830 148,156 131,384 125,610 64,162 11,408 365,897	453,915 61,054 169,806 108,760 34,717 65,771 520,103 40,867 410,516
	1,861,737	1,865,509
	908 37,163	68,949 3,659
	38,071	72,608

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Defined contribution superannuation expense

Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.

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Note 6. Income tax

Income tax (benefit)/expense Current tax Deferred tax expense/(benefit) Deferred tax assets (recognised)/not recognised Deferred tax assets not previously recognised Aggregate income tax benefit Numerical reconciliation of income tax (benefit)/expense and tax at the statutory rate Profit/(loss) before income tax expense Tax at the statutory tax rate of 25% (30 June 2021: 26%) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based payments Non-deductible expenditure R&D tax incentive benefit Tax rate differential R&D offset Deferred tax assets not previously recognized Current year temporary differences not recognised Income tax benefit Deferred tax assets and liabilities Blackhole expenditure and other deductions Employee benefits Accrued expenses Other liabilities R&D carry forward tax offsets Property, plant and equipment Right of use asset Deferred tax assets/(liabilities) Deferred tax assets not recognized	Consolidated 2022 2021 $ $ - (263,037) 366,744 (610,794) - 873,831 (630,524) -	Consolidated 2022 2021 $ $ - (263,037) 366,744 (610,794) - 873,831 (630,524) -
	(263,780)	-
	1,161,551	(3,648,994)
	290,388 62,168 443,994 (734) (53,711) (428,893) (911,566)	(948,738) 248,309 1,950 (124,044) (51,308) - -
	(598,354) 334,574	(873,831) 873,831
	(263,780)	-
	Consolidated 2022 2021 $ $ 156,047 - 220,684 - 644,418 - 91,209 - 774,444 - (1,537,958) - (85,064) - 263,780 - Consolidated 2022 2021 $ $ 496,325 1,408,746

The above potential tax benefit pertaining to Acusensus Inc. tax losses has not been recognised in the statement of financial position as the recovery of this benefit is uncertain.

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Note 6. Income tax (continued)

Accounting policy for income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or

• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Acusensus Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.

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Note 7. Cash and cash equivalents

Current assets Unrestricted Cash on hand Cash at bank Restricted Cash at bank	Consolidated 2022 2021 $ $ 490 490 7,353,713 11,326,647	Consolidated 2022 2021 $ $ 490 490 7,353,713 11,326,647
	7,354,203 1,252,325	11,327,137 1,000,000
	8,606,528	12,327,137

Accounting policy for cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Restricted cash balance represents cash held by the entity as required under its bank guarantee arrangements. The cash held is not available for the purposes of the group’s operations.

Note 8. Trade and other receivables

Current assets Trade receivables Other receivables	Consolidated 2022 2021 $ $ 2,858,111 365,271 779,525 883,172	Consolidated 2022 2021 $ $ 2,858,111 365,271 779,525 883,172
	3,637,636	1,248,443

Allowance for expected credit losses

The ageing of the trade receivables and allowance for expected credit losses provided for above are as follows:

Consolidated Current > 30 days > 60 days	Expected credit loss rate 2022 2021 % % - - - - - -	Carrying amount 2022 2021 $ $ 2,858,111 184,482 - 165,000 - 15,789	Carrying amount 2022 2021 $ $ 2,858,111 184,482 - 165,000 - 15,789	Allowance for expected credit losses 2022 2021 $ $ - - - - - -	Allowance for expected credit losses 2022 2021 $ $ - - - - - -
				-
				-
				-
		2,858,111	365,271		-
				-

Accounting policy for trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 to 45 days.

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Note 8. Trade and other receivables (continued)

The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

Note 9. Inventories

Current assets Components	Consolidated 2022 2021 $ $ 1,902,553 1,147,465

Accounting policy for inventories

Inventories are stated at the lower of cost and net realisable value on an average cost basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.

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.

Note 10. Right-of-use assets

Non-current assets Building right-of-use assets Less: Accumulated depreciation Vehicle right-of-use assets Less: Accumulated depreciation Right-of-use assets	Consolidated 2022 2021 $ $ 600,302 528,951 (260,046) (41,090) 340,256 487,861 2,922,024 - (964,022) -	Consolidated 2022 2021 $ $ 600,302 528,951 (260,046) (41,090) 340,256 487,861 2,922,024 - (964,022) -
	1,958,002 2,298,258	- 487,861

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Note 10. Right-of-use assets (continued)

Consolidated Balance at 30 June 2020 Additions Depreciation expense Balance at 30 June 2021 Additions Depreciation expense Balance at 30 June 2022	Building $ - 528,951 (41,090)	Motor vehicles $ - - - - 2,922,024 (964,022) 1,958,002	Total $ - 528,951 (41,090)
	487,861 71,351 (218,956)		487,861 2,993,375 (1,182,978)
	340,256		2,298,258

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.

Note 11. Other assets

Non-current assets Bonds on leased premises	Consolidated 2022 2021 $ $ 104,211 81,750 104,211 81,750

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Note 12. Property, plant and equipment

Non-current assets Motor vehicles - at cost Less: Accumulated depreciation Computer equipment - at cost Less: Accumulated depreciation Office equipment - at cost Less: Accumulated depreciation Camera equipment - at cost Less: Accumulated depreciation	Consolidated 2022 2021 $ $ 838,953 321,715 (292,724) (68,105)	Consolidated 2022 2021 $ $ 838,953 321,715 (292,724) (68,105)
	546,229	253,610
	340,050 (149,756)	157,838 (57,573)
	190,294	100,265
	122,933 (44,890)	36,964 (8,641)
	78,043	28,323
	9,314,335 (1,957,523)	3,276,495 (493,469)
	7,356,812	2,783,026
	8,171,378	3,165,224

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 30 June 2020 Additions Foreign Exchange Movement Depreciation expense Balance at 30 June 2021 Additions Depreciation expense Balance at 30 June 2022	Motor vehicles $ 73,828 232,030 - (42,493)	Computer equipment $ 49,595 85,749 - (35,080)	Office equipment $ 8,343 26,055 - (6,075)	Camera equipment $ 660,735 2,508,862 (6,327) (389,998)	Total $ 792,501 2,852,696 (6,327) (473,646)
	263,365 504,257 (221,393)	100,264 182,212 (92,182)	28,323 85,969 (36,249)	2,773,272 6,046,411 (1,462,871)	3,165,224 6,818,849 (1,812,695)
	546,229	190,294	78,043	7,356,812	8,171,378

Accounting policy for property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment over their expected useful lives as follows:

Motor vehicles	3 years
Computer equipment	3 years
Office equipment	3 years
Camera equipment:
Transportable equipment	5 years
Fixed site systems	3 years

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Note 12. Property, plant and equipment (continued)

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Note 13. Intangibles

Non-current assets Capitalised development costs - at cost Less: Accumulated amortisation	Consolidated 2022 2021 $ $ 865,162 439,554 (292,389) (105,157)	Consolidated 2022 2021 $ $ 865,162 439,554 (292,389) (105,157)
	572,773	334,397

Reconciliations

Reconciliations of the written down values at the beginning and end of the current financial year are set out below:

Consolidated Balance at 30 June 2020 Additions Amortisation expense Balance at 30 June 2021 Additions Amortisation expense Balance at 30 June 2022	Capitalised development costs $ 108,242 319,985 (93,830)
	334,397 425,607 (187,231)
	572,773

Accounting policy for intangible assets

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

Research and development

Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the consolidated entity is able to use or sell the asset; the consolidated entity has sufficient resources and intent to complete the development; and its costs can be measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 3 years.

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Note 14. Trade and other payables

Current liabilities Trade payables Other payables	Consolidated 2022 2021 $ $ 1,808,504 490,147 4,130,845 2,595,598	Consolidated 2022 2021 $ $ 1,808,504 490,147 4,130,845 2,595,598
	5,939,349	3,085,745

Accounting policy for trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 to 45 days of recognition.

Other payables as at 30 June 2021 includes oversubscribed equity and subsequently repaid to shareholder post year end.

Note 15. Borrowings

Current liabilities Loan - payables Refer to note 22 for further information on financial instruments.	Consolidated 2022 2021 $ $ - 287,952	Consolidated 2022 2021 $ $ - 287,952

Accounting policy for borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

The finance loan was an arm’s length transaction traded on commercial terms, with an interest rate of 8% per annum and a maturity date of 1 July 2021.

Note 16. Lease liabilities

Current liabilities Lease liability Non-current liabilities Lease liability	Consolidated 2022 2021 $ $ 1,189,583 196,639	Consolidated 2022 2021 $ $ 1,189,583 196,639
	1,139,909	296,387
	2,329,492	493,026

Refer to note 22 for further information on financial instruments.

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Note 16. Lease liabilities (continued)

Accounting policy for lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

Note 17. Provisions

Current liabilities Annual leave Non-current liabilities Long service leave	Consolidated 2022 2021 $ $ 683,645 218,964	Consolidated 2022 2021 $ $ 683,645 218,964
	199,090	81,478
	882,735	300,442

Accounting policy for provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.

Accounting policy for employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

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Note 18. Issued capital

2022 Shares Ordinary shares - fully paid 20,014,995 Movements in ordinary share capital Details Date Balance 1 July 2019 Issue of shares 30 September 2019 Balance 30 June 2020 Proceeds from $2 million placement 23 June 2021 Employee option conversion 8 December 2020 Employee bonus issue 8 April 2021 $10m Primary Offer 23 June 2021 Conversion of convertible notes 23 June 2021 Balance 30 June 2021 Balance 30 June 2022	2022 Shares 20,014,995		Consolidated 2021 2022 Shares $ 20,014,995 18,831,559	Consolidated 2021 2022 Shares $ 20,014,995 18,831,559	2021 $ 18,831,559
			Shares 10,492,332 2,157,932	Issue price $0.95 $2.00 $0.00* $0.00 $2.75 $2.00	$ 1,645,490 2,055,000 3,700,490 2,000,000 44,876 - 10,021,539 3,064,654 18,831,559 18,831,559
			12,650,264 1,000,000 896,000 292,208 3,644,196 1,532,327
			20,014,995
			20,014,995

Employee options were converted at multiple exercise prices. Refer to Note 32 for details on options exercise prices.

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity is not subject to certain financing arrangements covenants.

The capital risk management policy remains unchanged from the 30 June 2021 financial report.

Accounting policy for issued capital

Ordinary shares are classified as equity.

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Note 19. Reserves

Foreign currency reserve Employee equity benefits reserve	Consolidated 2022 2021 $ $ 896 (18,533) 1,534,483 1,285,813	Consolidated 2022 2021 $ $ 896 (18,533) 1,534,483 1,285,813
	1,535,379	1,267,280

Employee equity benefits reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services.

The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of rights over shares is determined using a binomial model. The fair value of shares is determined by the market value of the consolidated entity’s shares at grant date.

In valuing equity-settled transactions, any performance conditions are taken into account if relevant and assumptions around the likelihood of meeting these performance conditions are factored into the valuation model. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

• The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

• the extent to which the vesting period has expired; and

• the consolidated entity’s best estimate of the number of equity instruments that will ultimately vest.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

Note 20. Operating segments

Identification of reportable operating segments

These operating segments are identified based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and in determining the allocation of resources. Similar operating segments can be aggregated to form one reportable segment. Accordingly, the consolidated entity only operates as one segment.

Accounting policy for operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Board of Directors. The Directors is responsible for the allocation of resources to operating segments and assessing their performance.

Note 21. Earnings per share

Profit/(loss) after income tax attributable to the owners of Acusensus Limited Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share	Consolidated 2022 2021 $ $ 1,425,331 (3,648,994)	Consolidated 2022 2021 $ $ 1,425,331 (3,648,994)
	Number 20,014,995	Number 13,356,120
	21,248,878	13,356,120

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Note 21. Earnings per share (continued)

	Cents	Cents
Basic earnings/(loss) per share	0.07	(27.32)
Diluted earnings/(loss) per share	0.07	(27.32)
Accounting policy for earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Acusensus Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Note 22. Financial instruments

Financial risk management objectives

The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.

Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance reports to the Board on a monthly basis.

Market risk

Foreign currency risk

The consolidated entity is not exposed to any significant foreign currency risk.

Price risk

The consolidated entity is not exposed to any significant price risk.

Interest rate risk

The consolidated entity is not exposed to any significant interest rate risk.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not hold any collateral.

The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available.

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Note 22. Financial instruments (continued)

Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year.

Liquidity risk

Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.

The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.

Remaining contractual maturities

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

Weighted average interest rate 2022 Consolidated % Non-derivatives Non-interest bearing Trade payables - Contract Liability - Other payables - Interest-bearing - variable Borrowings - Lease liability 2.17% Total non-derivatives	2022 Weighted average interest rate 2021 $ % 1,808,504 - 248,545 - 4,130,845 - - 8.00% 2,329,492 5.00% 8,517,386	2021 $ 490,147 334,482 2,595,598 287,952 493,026 4,201,205

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

Note 23. Key management personnel disclosures

Directors

The following persons were directors of Acusensus Limited during the financial year:

Ravin Mirchandani Non-executive Director Thomas Patterson Non-executive Director Alexander Jannink Executive Director and Chief Executive Officer

Other key management personnel

The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, during the financial year:

Mark Lawrence Chief Financial Officer & Company Secretary Christopher Kells Chief Technology Officer Ron Johnson Head of Strategy/Former Chief Financial Officer (Resigned 15 December 2021)

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Note 23. Key management personnel disclosures (continued)

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments	Consolidated 2022 2021 $ $ 1,043,401 806,807 89,272 71,260 17,749 14,421 97,621 266,192	Consolidated 2022 2021 $ $ 1,043,401 806,807 89,272 71,260 17,749 14,421 97,621 266,192
	1,248,043	1,158,680

The determination of the roles which meet the definition of key management personnel has changed since the year ended 30 June 2021 due to judgment and, as a result, the comparatives stated above differ from the 30 June 2021 financial report by $1,511,328.

Note 24. Related party transactions

Subsidiaries

Interests in subsidiaries are set out in note 29.

Key management personnel

Disclosures relating to key management personnel are set out in note 23.

Transactions with related parties

The following transactions occurred with related parties:

Sale of goods and services: Sale of goods to Ador Powertron Limited (a director related entity)	Consolidated 2022 2021 $ $ 281,897 344,356

Loans to/from related parties

The following balances are outstanding at the reporting date in relation to loans with related parties:

	Consolidated	Consolidated
	2022	2021
	$	$
Loan from parent to subsidiary - Acusensus Inc.	2,681,113	1,137,270
Loan from parent to subsidiary - Acusensus Australia Pty Ltd	8,744,640	134,137
Loan from parent to subsidiary - Acusensus IP Pty Ltd	31,289	31,289

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates, where applicable.

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Note 25. Contingent liabilities

The consolidated entity has provided bank guarantees as at 30 June 2022 of $1,252,325 (30 June 2021: $1,000,000) to customers as security for contractual performance obligations.

Note 26. Commitments

Capital commitments Committed at the reporting date but not recognised as liabilities, payable: Property, plant and equipment	Consolidated 2022 2021 $ $ 389,406 286,122

As at 1 July 2020, the company's lease commitments have been captured within the lease liability amount on the statement of financial position following the adoption of AASB 16 Leases.

Note 27. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by the auditor of the company:

Audit services Audit of the financial statements Other services Preparation of financial statements	Consolidated 2022 2021 $ $ 55,375 27,500	Consolidated 2022 2021 $ $ 55,375 27,500
	-	5,500
	55,375	33,000

Note 28. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Profit/(loss) after income tax Total comprehensive income/(loss)	Parent 2022 2021 $ $ 932,034 (3,948,253)	Parent 2022 2021 $ $ 932,034 (3,948,253)
	932,034	(3,948,253)

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Note 28. Parent entity information (continued)

Statement of financial position

Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Employee equity benefits reserve Accumulated losses Total equity	Parent 2022 2021 $ $ 3,949,928 14,964,599	Parent 2022 2021 $ $ 3,949,928 14,964,599
	18,250,385	17,911,579
	1,380,101	3,040,617
	1,579,191	3,122,095
	18,831,559 1,285,813 (3,446,178)	18,831,559 1,285,813 (5,327,888)
	16,671,194	14,789,484

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 (30 June 2021: $nil).

Contingent liabilities

The parent entity had contingent liabilities as at 30 June 2022 is $1,002,325 (30 June 2021: $1,000,000) Refer to Note 25.

Capital commitments - Property, plant and equipment

The parent entity had capital commitments for property, plant and equipment as at 30 June 2022 (30 June 2021: $nil). Refer to Note 26.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following:

• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

• Investments in associates are accounted for at cost, less any impairment, in the parent entity.

• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

Note 29. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1:

		Ownership	interest
	Principal place of business /	2022	2021
Name	Country of incorporation	%	%
Acusensus Australia Pty Ltd	Australia	100.00%	100.00%
Acusensus IP Pty Ltd	Australia	100.00%	100.00%
Acusensus Inc.	United States of America	100.00%	100.00%

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Note 30. Events after the reporting period

392,835 unissued ordinary shares under the employee share option plan were granted on 1 July 2022 at an exercise price of $2.76. The fair value of these unissued ordinary shares under the employee share option plan is $475,330.

No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Note 31. Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities

Income/(loss) after income tax expense for the year Adjustments for: Depreciation and amortisation Share-based payments Foreign exchange differences Change in operating assets and liabilities: Increase in trade and other receivables Decrease in contract assets Increase in inventories Increase in deferred tax asset Increase in other assets Increase in trade and other payables Decrease in contract liabilities Increase in employee benefits (Decrease)/increase in provision for income tax Net cash from/(used in) operating activities	Consolidated 2022 2021 $ $ 1,425,331 (3,648,994) 3,182,904 608,566 248,670 955,035 19,429 (18,532) (2,389,193) (1,059,060) 172,936 - (755,088) (692,761) (263,780) - (22,461) - 2,853,604 2,838,675 (85,937) - 582,293 186,766 - (170,649)	Consolidated 2022 2021 $ $ 1,425,331 (3,648,994) 3,182,904 608,566 248,670 955,035 19,429 (18,532) (2,389,193) (1,059,060) 172,936 - (755,088) (692,761) (263,780) - (22,461) - 2,853,604 2,838,675 (85,937) - 582,293 186,766 - (170,649)
	4,968,708	(1,000,954)

Note 32. Share-based payments

A share option plan has been established by the consolidated entity and approved by shareholders at a general meeting, whereby the consolidated entity may, at the discretion of the Board of Directors, grant options over ordinary shares in the company to certain personnel of the consolidated entity. The options are issued for nil consideration and are granted in accordance with performance guidelines established by the Board of Directors.

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Note 32. Share-based payments (continued)

2022

Grant date Expiry date Exercise price 20/12/2018 20/12/2023 $0.02 10/02/2020 No expiry $0.79 10/02/2020 No expiry $1.58 10/02/2020 No expiry $2.37 09/09/2020 17/12/2023 $2.30 30/09/2020 30/09/2023 $2.30 27/09/2021 27/09/2031 $2.76 21/04/2022 21/04/2027 $2.76 Weighted average exercise price 2021 Grant date Expiry date Exercise price 20/12/2018 20/12/2023 $0.02 06/02/2019 $0.04 19/08/2019 $0.15 10/02/2020 No expiry $0.79 10/02/2020 No expiry $1.58 10/02/2020 No expiry $2.37 15/03/2020 $0.35 30/08/2020 $2.00 09/09/2020 17/12/2023 $2.30 30/09/2020 30/09/2023 $2.30 27/09/2021 27/09/2031 $2.76 Weighted average exercise price	Balance at the start of the year 200,000 100,000 100,000 100,000 50,000 250,000 107,459 -	Granted - - - - - - - 326,424	Exercised - - - - - - - -	Expired/ forfeited/ other - - - - - - - -	Balance at the end of the year 200,000 100,000 100,000 100,000 50,000 250,000 107,459 326,424
	907,459	326,424	-	-	1,233,883
	$1.61 Balance at the start of the year 800,000 100,000 186,000 100,000 100,000 100,000 10,000 306,325 - - -	$2.76 Granted - - - - - - - - 50,000 250,000 107,459	- Exercised (600,000) (100,000) (186,000) - - - (10,000) (292,208) - - -	- Expired/ forfeited/ other - - - - - - - (14,117) - - -	$1.92 Balance at the end of the year 200,000 - - 100,000 100,000 100,000 - - 50,000 250,000 107,459
	1,702,325	407,459	(1,188,209)	(14,117)	907,459
	$0.67	$2.42	$0.53	$2.00	$1.61

The weighted average share price during the financial year was $1.92 (30 June 2021: $1.61).

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Note 32. Share-based payments (continued)

The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.6 years (30 June 2021: 2.5 years).

Set out below is the share based expense incurred during the year:

Grant date 20/12/2018* 06/02/2019 19/08/2019 10/02/2020 10/02/2020 10/02/2020 30/08/2020 09/09/2020 30/09/2020 27/09/2021 21/04/2022	2022 $ 13,988 - - - 18,951 20,319 - - - 63,759 131,653	2021 $ 91,876 11,321 51,855 39,207 30,881 20,319 291,317 37,000 317,500 63,759 -
	248,670	955,035

*$13,988 (30 June 2021: $57,266) pertains to performance-based share options. Performance is based on Australian revenue targets.

For the options granted during the current and prior financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows:

	Share price	Exercise	Expected	Dividend	Risk-free	Fair value at
Grant date	at grant date	price	volatility	yield	interest rate	grant date
20/12/2018	$0.20	$0.02	70.00%	-	2.35%	$0.187
06/02/2019	$0.20	$0.04	70.00%	-	0.92%	$0.174
19/08/2019	$0.95	$0.15	70.00%	-	1.01%	$0.836
10/02/2020	$0.95	$0.79	70.00%	-	1.01%	$0.639
10/02/2020	$0.95	$1.58	70.00%	-	1.01%	$0.618
10/02/2020	$0.95	$2.37	70.00%	-	1.01%	$0.610
15/03/2020	$0.95	$0.35	70.00%	-	1.01%	$0.650
30/08/2020	$2.00	$2.00	70.00%	-	1.06%	$1.495
09/09/2020	$2.00	$2.30	70.00%	-	1.06%	$0.740
30/09/2020	$2.00	$2.30	70.00%	-	1.06%	$1.270
27/09/2021	$2.75	$2.76	50.00%	-	1.06%	$1.780
21/04/2022	$2.75	$2.76	50.00%	-	1.06%	$1.210

Accounting policy for share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

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Note 32. Share-based payments (continued)

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

• during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.

• from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

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Acusensus Limited Directors' declaration 30 June 2022

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In the directors' opinion:

• the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;

• the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2022 and of its performance for the financial year ended on that date; and

• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the directors

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_________ Alexander Jannink Director

30 August 2022 Melbourne, Australia

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Collins Square, Tower Four Level 18, 727 Collins Street Melbourne VIC 3008 GPO Box 5099 Melbourne VIC 3001 Australia

Tel: +61 3 9603 1700 Fax: +61 3 9602 3870 www.bdo.com.au

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INDEPENDENT AUDITOR'S REPORT

To the members of Acusensus Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Acusensus Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration.

In our opinion the accompanying financial report of Acusensus Limited, is in accordance with the Corporations Act 2001 , including:

• (i) Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year ended on that date; and

• (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The directors are responsible for the other information. The other information obtained at the date of this auditor’s report is information included in the Directors’ Report, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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Responsibilities of the directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf

This description forms part of our auditor’s report.

BDO Audit Pty Ltd

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Salim Biskri Director

Melbourne, 30 August 2022

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Audit trail

TITLE FY22 Audited Financial Statements FILE NAME Acusensus Limited...22 (unsigned).pdf DOCUMENT ID 6b5fba43572b978911d5b17189f45b67cefecb57 AUDIT TRAIL DATE FORMAT MM / DD / YYYY STATUS Signed

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08 / 30 / 2022 Sent for signature to Alexander Jannink (alex@acusensus.com) 08:08:41 UTC from mark.lawrence@acusensus.com IP: 1.136.108.229 08 / 30 / 2022 Viewed by Alexander Jannink (alex@acusensus.com) 08:21:36 UTC IP: 1.136.108.229 08 / 30 / 2022 Signed by Alexander Jannink (alex@acusensus.com) 08:22:11 UTC IP: 1.136.108.229 08 / 30 / 2022 The document has been completed. 08:22:11 UTC