01 Communique Laboratory
Annual Report 2016

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ANNUAL REPORT 2016 We see a better way. Table of Contents Directors and Other Information 1 Chairman’s Letter 7 CEO Report 9 Remuneration Report 13 Directors’ Report 22 Statement of Directors’ Responsibilities 24 Auditor’s Report 25 Financial Report 27 Notes 34 Additional ASX Info 60 Appendix: Risks (Unaudited) 63 Page 1 Directors and Other Information 1. Board of Directors Oneview has an experienced and balanced Board with diverse skills drawn from industry leaders who bring in-depth industry and business knowledge, financial management and corporate governance expertise. The Board comprises an independent Chairman, three executive directors, one non-executive director and five independent directors. Directors James Osborne (Chairman) Mark McCloskey James Fitter John Kelly Dr. Lyle Berkowitz Christina Boyce Mark Cullen Patrick Masterson Daniel Petre Joseph Rooney Michael Stanley James William Vicars Nationality Irish Irish Australian Irish USA Australian Australian Irish Australian Irish Irish Australian (Appointed 9 September 2016) (Appointed 19 April 2016) (Resigned 7 February 2016) (Appointed 7 February 2016) (Resigned 7 February 2016) James Osborne Independent Chairman James joined Oneview in 2013. James is currently ser ving as a director of Ryanair Holdings PLC, the Irish Heritage Trust, James Hardie Industries PLC and a number of private companies. James Osborne was Managing Par tner of one of Ireland’s leading legal firms, A&L Goodbody for 12 years. Since his retirement from the practice of law in 19 94, James has ser ved on a number of boards of publicly quoted Irish companies including Bank of Ireland PLC, Golden Vale PLC, Adare PLC, Carrolls Holdings PLC and Independent News and Media, where he was chairman. James is a member of the Law Society of Ireland. Mark McCloskey President & Executive Director Mark is the founder of Oneview and has over 20 years’ experience in senior roles within the communications and technology sector within Ireland. Prior to founding Oneview, Mark worked for Esat Telecom as General Manager of the Data and Carrier Ser vice Divisions until its sale to BT in Januar y 20 0 0. In 20 01, he then co -founded Easycash, the first independent ATM operator and was responsible for expanding the Company’s ATM network across Ireland until its sale to Royal Bank of Scotland in 20 04, when he accepted the position of Head of ATMs at Royal Bank of Scotland. Af ter subsequently holding other Senior E xecutive positions with Royal Bank of Scotland, he lef t in 20 07 to set up Oneview. Page 2 James Fitter CEO & Executive Director James joined Oneview as CEO in 2013 following a six month period acting as an advisor. He has over 25 years’ experience in the global financial markets during which time he has lived and worked in Sydney, New York, London, Monaco and Dubai. James worked at Deutsche Bank for 12 years, a career that culminated in his role as Global Head of Emerging Market Equities in 20 01 and 20 02. In this role, he was involved in the bank ’s operations in Asia, Latin America, Eastern Europe and South Africa between 19 97 and 20 02. Following his time at Deutsche Bank, James joined Sovereign Asset Management, a large family of fice, where he was appointed Chief E xecutive Of ficer in June 20 03. James subsequently founded and managed an independent asset management company in Dubai and spent over ten years as a professional investor and an independent advisor prior to joining Oneview. James holds a Bachelor of Commerce from the University of New South Wales, Sydney, Australia. John Kelly CFO & Executive Director John joined Oneview in 2013 as Chief Financial Of ficer and has over 20 years’ experience in senior management positions. Previously, John held senior international finance management roles with a number of public and private companies, including Fy f fes PLC, Logica PLC and Alltracel PLC. John is a char tered accountant and trained and qualified with Coopers & Lybrand (now P wC). He is a Fellow of Char tered Accountants Ireland (FCA) and has a business degree from Trinity College Dublin (BSc Mgmt). Dr. Lyle Berkowitz Independent Director Dr. Berkowit z is a director of innovation at Chicago -based Nor thwestern Memorial HealthCare. He also ser ves as an associate professor of clinical medicine at Nor thwestern University’s Feinberg School of Medicine in Chicago. He co -authored “Innovation with Information Technologies in Healthcare”, the first book exploring the intersection between health IT and innovation. In addition, Dr. Berkowit z is the founder and chairman of healthfinch.com, a sof tware company focused on clinical work flow. Lyle also ser ves on the governance board of the Innovation Learning Network (ILN), the Editorial Board of Clinical Innovation and Technology, and the Advisor y Boards for the Association of Medical Directors of Information Systems (AMDIS), and the Institute for Health Technology Transformation (IHT2). Lyle is a biomedical engineer with Informatics training at the University of Illinois College of Medicine and Har vard Medical School. Christina Boyce Independent Director Christina (Christy) brings over 20 years management and consulting experience to Oneview Healthcare. She is currently a director of Por t Jackson Par tners, a boutique strategy firm which focuses on strategic direction setting in the context of industr y economics and competition and regulator y policy. She is also a non- executive Director of ASX-listed companies Greencross Limited and Monash IVF. Christy previously held the role of senior executive at the government business enterprise, NBN Co during its establishment where she led initial discussions with the ACCC and acted as the company’s representative on the Federal Government’s Implementation Study. Prior to this, Christy spent 14 years with McKinsey & Co, where she was elected Par tner at 32 years of age. During her time there Christy co -led McKinsey’s Asia Pacific telecommunications and retail practices. Christy holds a Master of Management (with distinction) from the Kellogg Graduate School of Management at Nor thwestern University and a Bachelor of Economics from the University of Sydney. Page 3 Mark Cullen Independent Director Mark joined Oneview in 2015. He has enjoyed a distinguished career at Deutsche Bank for over 25 years and is currently the Global Head of Group Audit for Deutsche Bank AG. Mark has held a range of senior management positions at Deutsche Bank including Global Head of Emerging Market Equities, Global Chief Operating Of ficer Global Equities and Deutsche Asset Management, and most recently was responsible for the Chief Information Security Of fice (CISO) and Corporate Security and Business Continuity (C SBC). Daniel Petre Independent Director Daniel joined Oneview in 2015. He has been a leading par ticipant in Australia’s technology industr y for more than 25 years and has held leadership positions in technology-based businesses including Microsof t Corporation as Vice President of Workgroup Applications, Director of Advanced Technology. He has also been a successful Venture Capitalist founding three Venture organisations over the last 18 years (ecorp, netus and AirTree Ventures). Daniel hols a BSc with majors in Computer Science and Statistics from UNSW, an MBA from the University of Sydney and an Hon DBus from UNSW. Joseph Rooney Independent Director Joseph joined Oneview in 2016. He is also senior adviser to Precision Macro, a global macro research firm, based in Greenwich, Connecticut. Until the end of 2012, Joseph was a par tner and global strategist at Autonomy Capital Research LLP, a global macro hedge fund. Prior to this, he held a number of senior positions at Lehman Brothers Inc, including Managing Director, Head of European Strategy and trustee of their UK pension fund. James (Will) Vicars Non-Executive Director Will joined Oneview in 2013. He currently ser ves as Chief Investment Of ficer at Caledonia and sits on the boards of Caledonia (Private) Investments P ty Limited, DFO Investments P ty Limited and The Caledonia Foundation. Prior to joining Caledonia in 19 98, Will worked as a Senior Por tfolio Manager at NRMA Investments and a Por tfolio Manager at Bankers Trust in Sydney. Will’s other board positions include vice - chairman and non- executive director of the St Luke’s Hospital Foundation, non- executive director of Oroton Group and non- executive director of Grays eCommerce Group. Will graduated with a Bachelor of Ar ts, majoring in Economics, from the University of Sydney in 1986. Page 4 2. Meetings of directors The numbers of meetings of the Company’s Board of Directors and of each Board committee held during the year ended 31 December 2016, and the number of meetings attended by each director were: James Osborne – Chairman Mark McCloskey James Fitter John Kelly Lyle Berkowitz Christina Boyce Mark Cullen Patrick Masterson Daniel Petre Joseph Rooney Michael Stanley James William Vicars Full Board Audit and Risk Remuneration & Nomination Eligible to attend Attended Eligible to attend Attended Eligible to attend Attended 9 9 9 9 1 5 9 1 9 8 1 9 9 9 9 9 1 5 8 1 8 8 - 8 - - - - - 1 1 - - 2 - - - - - - - 1 1 - - 2 - - 3 - - - - - 3 - - - - 3 3 - - - - - 3 - - - - 3 3. Deeds of access, indemnity and insurance for directors 4. Corporate governance statement The Company has prepared a statement which sets out the corporate governance practices that were in operation throughout the financial year for the Company, identifies any recommendations that have not been followed and provides reasons, if any, for not following such recommendations. review on In accordance with ASX listing 4.10.3 and 4.7.4, the Corporate Governance Statement will be available (www. for oneviewhealthcareinvestors.com/), and will be lodged together with an Appendix 4G at the same time that this report is lodged with ASX. the Company’s website into agreements The Company has entered to indemnify all Directors of the Company that are named above and former directors of the Company and its controlled entities against all liabilities which arise out of the performance of their normal duties as directors or executive officers, unless the liability relates to conduct involving lack of good faith. The Company has agreed to indemnify the directors and executive officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity along with any resulting payments, subject to policy limits. The directors’ and officers’ liability insurance provides cover against costs and expenses, subject to terms and conditions of the policy, involved in defending legal actions and any resulting payments arising from a liability to persons (other than the Company or related entity) incurred in their position as a director or executive officer unless the conduct involves a wilful breach of duty or an improper use of inside information or position to gain advantage. 5. Corporate directory Registered office & business address Block 1 Blackrock Business Park Carysfort Avenue Blackrock Co. Dublin Ireland Solicitors A&L Goodbody 25-28 North Wall Quay Dublin 1 Ireland Clayton Utz Level 15 1 Bligh Street Sydney NSW 2000 Australia Page 5 Independent Auditor KPMG Chartered Accountants 1 Stokes Place St. Stephen’s Green Dublin 2 Ireland Bankers HSBC Bank Ltd Guildford and Weybridge Commercial Centre Edgeborough Road Guildford Surrey GU12BJ United Kingdom Registrations Company No: 513842 ABRN: 610 611 768 Registry Computershare Investor Services Pty Ltd ASX Code ASX: ONE Level 4 60 Carrington Street Sydney NSW 2001 Australia Company Secretary Patrick Masterson Company Website oneviewhealthcare.com Page 6 Page 7 Chairman’s Letter Dear Shareholders, On behalf of your Board of Directors, it is my pleasure to present to our shareholders our inaugural Oneview Healthcare Annual Report for the financial year ended 31 December 2016. leading is enabling healthcare Oneview’s objective to make use of consumer organisations efficiencies, cost to drive technologies in clinical outcomes and improvements enhanced patient satisfaction, to overall excellence in healthcare economics and quality of care through the use of the Oneview Solution – an innovative, feature-rich patient engagement solutions platform for hospitals and other healthcare providers. Today, the Oneview Solution is live and installed across 20 healthcare facilities in the United States, Australia, the United Arab Emirates and Ireland. The Company is also in the process of implementing and integrating the Oneview Solution in a further 15 healthcare facilities in the United States and Australia. The Oneview Solution allows for active collaboration between patients and clinical staff. Enriching the overall patient experience, the Oneview Solution enables patients to view tailored educational content, exchange messages with their care team, monitor their own progress against assigned goals, stay connected with friends and family via video communication and access premium entertainment. Critically, the Oneview Solution can help clinical staff save time, avoid waste, improve staff efficiency and improve quality of care by providing staff with real-time patient information, digitised nurse rounding processes, electronic meal ordering, room readiness notifications, data and Page 8 analytics which enable staff to identify areas for improvement. The overall intention is to help achieve better patient outcomes while delivering measurable return on investment for healthcare providers. We believe that current trends in the global healthcare sector point to an increasing adoption of patient engagement solutions, to from which Oneview benefit. Key drivers for growth in the patient engagement solutions market include: is positioned • • • • • industry support the size and growth of healthcare expenditure in developed countries; the recognition of waste and inefficiency in the healthcare sector; for regulatory and healthcare reform leading to an increased prevalence of technology in healthcare facilities and a focus on providing higher quality care at a lower cost; the large body of evidence that patient engagement improves efficiency and patient outcomes; consumer and practitioner expectations for technology driven solutions in the healthcare sector. Since the IPO on 17 March last year, we report strong revenue growth across the business with total revenue of over €9.0m up 288% and recurring revenue of €1.3m up 72% on the corresponding period. Recurring revenues continue to grow as the Company deploys incrementally across its increasing customer base. The Group reports a strong balance sheet that is under-pinned by €35.1m in cash reserves as at 31 December 2016 leaving the business in a strong position to capitalise on its growth objectives in the coming years. In moving from private to public ownership we assembled an enlarged board including additional independent directors, whose profiles are listed earlier in this report. They are an excellent group of senior leaders, drawing their experience from businesses all over the world. I would like to thank them for their enthusiasm and commitment to the Company. I would also like to thank our management team, led by CEO James Fitter. They have produced excellent results since the IPO and are committed to continuing our trend of successful system rollouts across the highest profile hospitals in all of the markets in which the Group currently operates. Lastly, I would like to thank our hospital and healthcare clients who rank amongst the most respected healthcare providers across the globe. Our valued healthcare clients are the backbone of our growing recurring revenue business and they provide us with the vital industry feedback we need so that we can continue to deliver best in class technology solutions, in keeping with our position as a world class leader in the patient engagement space. James Osborne Chairman “The Oneview Solution allows for active collaboration between patients and clinical staff. Enriching the overall patient experience, the Oneview Solution enables patients to view tailored educational content, exchange messages with their care team, monitor their own progress against assigned goals, stay connected with friends and family via video communication and access premium entertainment.” CEO Report Page 9 “Our holistic vision to connect patients, providers and their families regardless of where they are in the care continuum sets us apart from the competition and our company values reinforce that for our employees. ” for Oneview transformational year 2016 was a Healthcare as we transitioned from a private to a public company by way of our Initial Public Offering (“IPO”) on St Patrick’s Day, 17 March 2016. More importantly we have continued to make significant progress in our mission to prove that a more engaged patient leads to a better clinical outcome. Our holistic vision to connect patients, providers and their families regardless of where they are in the care continuum sets us apart from the competition and our company values reinforce that for our employees. We are enormously proud of the success we have had winning long-term sustainable contracts with some of the most discerning healthcare providers in the world. The Interactive Patient Care (“IPC”) market is still an adolescent market; however, we are seeing an increased interest in IPC in all our major markets. Healthcare consumers are becoming more discerning and demanding the sorts of real-time access to information on consumer technologies that are considered standard across most other industries. 2016 was a year of considerable investment as we articulated in the prospectus and we look forward to 2017 with much excitement as we release two major new product offerings which we have been investing in for the last two years. The two new products are our mobile platform, Connect, and our Senior Living product. Whilst early in their evolution, we have had very positive feedback on both these product offerings and expect to see significant client adoption and further sales of both products in the second half of 2017. As Oneview continues to scale and execute our business plan, we are receiving continued affirmation that we are on the right path, with new high-profile contracts in the United States such as University of Iowa Children’s, NYU Langone Medical Center, BJC HealthCare and most recently Lancaster General Hospital. Australia remains our most mature market for the moment with 11 hospitals now live, up and down the east coast. In 2016 we continued to expand our footprint with the highly innovative team at Epworth HealthCare in Melbourne, Australia where the Oneview Solution is now live in over 1,150 beds across 8 hospitals in the Epworth group. We are also deployed at the Sydney Children’s Hospital Network (“SCHN”) at Westmead in Sydney, The Chris O’Brien Lifehouse at RPA and the Cairns Hospital in Queensland. Next month we go-live with Oneview Connect at SCHN which will help to support the decentralised, community-based healthcare model that distributes the delivery of care within the hospital, GP, community clinics and home. SCHN has an incredibly powerful vision for their patients to use Oneview Connect as their digital passport managing chronic conditions for life. We listen to understand our clients and their needs. On 19 August, we announced the signing of a contract for the design and installation of Oneview’s Senior living solution at Thomas Holt’s new assisted living facility in New South Wales, Australia. Thomas Holt’s leadership have an incredibly innovative vision making them the ideal first customer for this product. Page 10 More recently, on 30 January 2017 we announced our entry into the UK market by signing a very promising new opportunity with Oxford University, the Oxford NHS Trust and a leading data analytics technology company to pilot patient pathway products – initially for prostate cancer. We expect this initiative could prove to be a catalyst for a significant commercial opportunity in the UK in 2018 and beyond. Experience matters. As a software company our most important asset is our people. Under the leadership of our Chief People Officer, Connie Eisenbraun, we have been able to attract and retain exceptionally high quality staff who are uniformly motivated by our mission. It is such a cliché in today’s technology industry to claim you’re making a difference in the world, but in the case of Oneview this is a reality and is readily apparent by the joy on patients’ faces and immediate feedback as the Oneview solution goes live in patient rooms. We genuinely do see a better way. We are especially proud to have attracted internationally recognised clinical specialists to our leadership team to assist us in capitalising on our strategic objectives. Over the last 12 months we have announced the appointments of Dr. Louise Messara, Dr. Seth Bokser, Dr. Lyle Berkowitz and Dr. Oran Rigby in various capacities across the Company. The clinical authenticity they bring to our work is enormously important as we continue to innovate with clinically led R&D and frame our future product roadmap. The patient is at the heart of what we do. 2016 has been a year of firsts for Oneview… gold standard for patient engagement solutions. In addition to this, Oneview received the Blackbook Research Award for “Highest Client Satisfaction for Patient Engagement in 2016”. time-to-market Intel, patient Oneview recently announced a technology development focused on collaboration agreement with experience accelerating solutions and services. The agreement provides for both parties to develop a long-term roadmap of joint solutions that utilises the respective technologies to deliver best-in-class patient engagement solutions and customer experiences across acute, elderly care and community care environments. In September we opened our new North American headquarters on Michigan Avenue in Chicago, Illinois, enhancing our ability to attract top talent and foster innovation across our client base. Not only is Chicago central for travel across America, it has allowed us to become an active participant in the vibrant burgeoning MedTech scene. Chicago also acts as headquarters to both the American Medical Association and American Hospital Association, and many other key players in the healthcare IT landscape. In October, Oneview was awarded the Frost & Sullivan 2016 Global Software Innovation Award for outstanding technology attributes and future business value. The accolade is a testament to Oneview’s position as the “We are especially proud to have attracted internationally recognised clinical specialists to New Leadership our leadership team to assist us in capitalising on our strategic objectives.” The appointment of internationally recognised healthcare IT and innovation specialists Dr. Louise Messara, Dr. Seth Bokser, Dr. Lyle Berkowitz, and Dr. Oran Rigby to Oneview’s Global Leadership Team. Page 11 2016 Operational & Financial Review During the year, the Company achieved 288% revenue growth to €9.03m, inclusive of a 72% increase in recurring revenues. This pattern of growth is expected to continue into 2017 and beyond. The Company ended the year with a much-strengthened balance sheet with net assets of €35.9m underpinned by €35.1m of cash on hand. As of 31 December 2016, we have achieved a 57% increase in contracted beds since the IPO with 2,666 beds live across 20 hospital implementation pipeline is growing representing a 26% increase in beds contracted not yet installed, amounting to 2,515 beds across 15 hospitals, whilst the total number of beds in locations. The contract negotiation and RFP process has increased 65% to 12,214 since the IPO in March 2016. Headcount has increased by 136% to 151 from 64 as of December 2015. Increases have predominantly been in the areas of R&D technology, implementation, sales and leadership throughout Ireland, US and Australia. Oneview has made a conscious decision to heavily invest in people and culture as part of an ongoing focus in our organization. This will ensure that we attract and retain key and influential staff over the coming years. We believe our people and their continuous innovation will help differentiate Oneview in the market. There is no box. Contracted Bed & Pipeline Developments 12,214 7,704 7,404 5,508 IPO Dec 2016 2,666 1,294 2,515 1,998 5,181 3,292 4,510 1,896 Beds Live Contracted Not Yet Installed Total Contracted Preferred Tendered/ In Contract Submitted an RFP Total Under RFP Process +288% Increase revenue 288% increase in revenue to €9.03m from €2.38m. €35.1 M Cash €35.1m in cash as of 31 December 2016. 2017 and beyond In 2017 we will continue to invest in the people, culture and systems that support our Company. Planned investment hires for the remainder of the year are predominantly in technology and operations to enable us to continuously innovate and to ensure we implement within our hospitals seamlessly and efficiently. Significant time is being spent on the consolidation of knowledge and training within the Company and continued enhancement of “OneMethod” implementation framework. From a sales perspective, we continue to actively target the most innovative hospitals with the majority of our success expected to continue coming from the North American and Australian territories augmented by the medical tourism opportunities of the Middle East and South East Asia. In addition to the full launch of both the Oneview Connect and Senior Living platforms, the existing inpatient solution will also be made available on both Android and iOS client devices in 2017 which will help increase market penetration, product stickiness and lower hardware costs for our customers. These three new developments will underpin the existing growth strategy of Oneview in the medium-term. Page 12 way for patients and caregivers alike. Likewise, your senior leadership team have devoted incredible energy and focus to ensure we continue to meet our clients’, our shareholders’ and our own high expectations. Respecting our clients, our people and our patients is core to our mission. Oneview is in a very strong position to benefit from the material investment in product development that has occurred over the past 5 years and well positioned to capitalise on future growth. Our company values reinforce our commitment to impacting the patient experience and reflect the culture we foster. They are: There is no box (innovation) #GQSD (get quality stuff done) • • • We listen to understand Experience matters • R.E.S.P.E.C.T. (for patients, for clients and for each • other) The patient is at the heart of what we do • I wish to thank our customers, employees and shareholders for their continued support at this exciting time. None of this impressive growth in the business would have been possible without the vision of our Founder and President, Mark McCloskey who continues to drive innovation across the Company and challenge our people to push the boundaries and find a better James Fitter CEO +57% Contracted beds 57% increase in contracted beds since IPO. 2,666 Beds live & installed across 20 facilities. Page 13 Remuneration Report The Remuneration and Nomination Committee set out its report1 as follows: 1. Principals used to determine the nature and amount of remuneration i. Objectives & framework The objectives of the Group’s executive reward framework are to ensure that reward for performance is competitive and appropriate for the results delivered. The framework aligns reward with achievement of strategic objectives and the creation of value for shareholders, and conforms to market practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices: The framework provides a mix of fixed pay and long term incentives comprising an employee share option scheme and a long term incentive plan. The Company currently does not operate a variable pay arrangement. ii. Remuneration & Nomination Committee The Board has established a Remuneration and Nomination Committee comprising James Osborne (Chairman), Mark Cullen and James (Will) Vicars. The purpose of the Committee is to assist the Board by providing advice on remuneration and incentive policies, practices and specific recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors. Specifically: • Competitiveness and awareness • Acceptability to shareholders • Performance compensation Transparency • • Capital management linkage / alignment of executive The Group has structured an executive remuneration framework that is market competitive and complimentary to the reward strategy of the organisation. The Board is satisfied remuneration recommendations are made free from undue influence by the members of the key management personnel. Alignment to shareholders’ interests • Has economic profitability as a core component of • the plan Focuses on sustained growth in shareholder wealth comprising growth in share price and dividends (when available) • Delivering constant return on assets as well as focusing the executive on key non-financial drivers of value • Attracts and retains high calibre executives Alignment to program participants’ interests Rewards capability and experience • Reflects competitive reward for contribution to • growth in shareholder wealth Provides a clear structure for earning rewards Provides recognition for contribution • • • • • • • • • • • • • • recruitment, the Company’s remuneration policy, including as it applies to directors and the process by which any pool of directors’ fees approved by shareholders is allocated to directors; Board succession issues and planning; the appointment and re-election of people as members of the Board and its committees; induction of people as directors and continuing professional development programs for directors; remuneration packages of senior executives, non executive directors and executive directors, equity based incentive plans and other employee benefit programs; the Company’s superannuation arrangements; the Company’s termination policies; succession plans of the CEO, senior executives and executive directors; the process for the evaluation of the performance of the Board, its Board Committees and individual directors; the review of the performance of senior executives and members of the Board, which should take place at least annually; those aspects of the Company’s remuneration policies and packages, including equity based incentives, which should be subject to shareholder approval; and the size and composition of the Board and strategies to address Board diversity and the Company’s performance in respect of the Company’s Diversity Policy, including whether there is any gender retention and 1 There is no regulatory requirement, other than the Companies Act 2014 disclosure requirements, for the Company to disclose information on the remuneration arrangements in place for Directors and Executives of Oneview Healthcare PLC. However, the Remuneration and Nomination Committee is committed to good corporate standards and has disclosed information considered relevant to shareholders. Page 14 or other inappropriate bias in remuneration for directors, senior executives or other employees. iii. Non-executive directors Fees and payments to non-executive directors reflect the demands, which are made on, and the responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed annually by the Board. The Chairman’s fees are determined independently to the fees of non-executive directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-executive directors have also received share options under the Oneview Share Option Plan. a. Non-executive directors’ fees The current base remuneration was reviewed immediately prior to the Company listing on the Australian Stock Exchange. The Chairman’s remuneration is inclusive of committee fees while other non-executive directors who chair a committee may receive additional annual fees. Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at A$750,000 total pool per annum, as set out in the Company’s prospectus issued on 19 February 2016. The following fees have been applied: Base fees Chairman Other non-executive directors Additional Remuneration Chairman Other non-executive directors Post employment benefits Chairman Other non-executive directors iv. Executive directors The executive pay and reward framework currently has 4 components: • Base pay and benefits • Annual discretionary bonus • Long-term incentives through participation in the Group’s Employee Share Option Plan (ESOP) Long-term incentives through participation in the Oneview Restricted Share Plan (RSP) • The combination of these comprises the executive’s total remuneration. a. Base pay and benefits Executives are offered a competitive base pay that comprises the fixed component of pay and rewards, plus benefits. Base pay for executives is reviewed annually to ensure the executive’s pay is competitive with the market. An executive’s pay is also reviewed on From 1 January 2016 to 31 December 2016 From 1 January 2015 to 31 December 2015 € 70,269 246,748 - 18,200 - 12,879 348,096 € 20,000 - - - - - 20,000 promotion. There is no guaranteed base pay increases included in any executives’ contracts. Executives may receive benefits including health insurance, or other expense reimbursements. b. Annual discretionary bonus The executive directors are entitled to receive an annual discretionary bonus of up to 100% of base salary. Except as noted below, no annual bonuses were paid out during the year: • Mark McCloskey received a transaction bonus of €100,000 on completion of the IPO on 17 March 2016 James Fitter received a transaction bonus of €100,000 on completion of the IPO on 17 March 2016 John Kelly received a transaction bonus of €50,000 on completion of the IPO on 17 March 2016 • • c. Employee Share Option Plan (ESOP) The Board adopted an Employee Share Option Plan (ESOP) effective from 1 October 2013. Under the ESOP, options over securities may be offered to executive directors, non-executive directors, employees and to consultants of companies within the Oneview group. Any offers are made entirely at the discretion of the Remuneration and Nomination Committee. d. Restricted Share Plan (RSP) The Company operates a Restricted Share Plan which was established on 16 March 2016. Executive directors and employees are eligible to participate in the RSP at the discretion of the Remuneration and Nomination Committee. The RSP is an employee share scheme as defined in section 64 of the Companies Act 2014 and is established in accordance with Section 128D of the Taxes Consolidation Act 1997 (as amended). Awards under the RSP will be in the form of an award of “Restricted Shares” (RSU’s) which are subject to restrictions and forfeiture. Shares awarded are held by an independent trustee based in Ireland, Goodbody Trustees Limited. No payment will be required by the Participant for the grant of an award of RSUs. Awards to executive directors in the year under the RSP are subject to performance conditions over a performance period as set out in the Remuneration report, and as per their contract of award. Performance conditions include: • continuing employment throughout the vesting period; continuing compliance throughout the vesting period in all material respects of the Company’s accounting and reporting requirements under the Australian Corporations Act (where relevant), the ASX Listing Rules and Irish company law; compound annual growth rate in Total Shareholder Return (TSR) whereby the Company achieves a target compound percentage growth rate in the • • Page 15 stock price of the Company as quoted on the ASX, plus dividend as measured by reference to a five day VWAP for the five trading days commencing on the day of release of the audited financial statements for each of FY2018, FY2019, FY2020, FY2021 and FY2022 (‘test dates’), against the Offer Price; compound annual growth in TSR whereby the Company achieves a target compound percentage growth rate in the stock price of the Company as quoted on the ASX, plus dividends as measured by reference to the share price on the last trading days of the FY2017, FY2018, and FY2020 (‘test dates’), against the Offer Price; recurring revenue growth test measured by the compound annual percentage growth rate in recurring revenue per the audited financial statements for FY2017, FY2018, and FY2020 (‘test dates’), against the audited financial statements for FY2015; total hospital beds contracted by reference to a target number of contracted hospital beds to be met by 31 December 2017, 2018 and 2019 respectively (‘test dates’); total assisted living / senior living beds contracted by reference to a target number of contracted living / senior living beds to be met by 31 December 2017, 2018 and 2019 respectively (‘test dates’). • • • • Tests for Recurring Revenue Growth (RRG), hospital beds and assisted living / senior living beds contracted have been set by the Remuneration and Nominations Committee for year 1 only (i.e y/e 2017). Tests for future years shall be set by the Remuneration Committee at a future date to be determined, but by no later than 31 December of each prior year. At the end of each test period, the Remuneration and Nomination Committee will determine the extent to which the performance conditions have been met. Page 16 2. Details of remuneration i. Remuneration of key management personnel Short-term benefits Bonus Salary & fees Non cash benefits Sub Total Post employment benefits € 70,269 16,242 33,889 53,418 48,784 45,631 - 48,784 317,017 € € - - - - - - - - - - - - - - - - - - 300,000 100,000 300,000 100,000 200,000 50,000 15,000 - 5,606 4,552 4,182 379 € 70,269 16,242 33,889 53,418 48,784 45,631 - 48,784 317,017 405,606 404,552 254,182 15,379 € - - 4 ,1 3 1 - 4 ,374 - - 4 ,374 12,879 35,000 35,000 - - 2016 Total € 70,269 16,242 38,020 53,418 53,158 45,631 - 53,158 2015 Total € 20,000 - - - - - - - 329,896 20,000 440,606 233,051 439,552 229,411 254,182 166,552 15,379 1 5 9,4 1 1 815,000 250,000 14,719 1,079,719 70,000 1,149,719 788,425 1,132,017 250,000 14,719 1,396,7362 82,879 1,479,6152 808,425 James Osborne Lyle Berkowitz Christina Boyce Mark Cullen Daniel Petre Joseph Rooney Michael Stanley1 James (Will) Vicars Sub-total – non- executive directors Mark McCloskey James Fitter John Kelly Patrick Masterson1 Total Executive Directors Total 1. 2. Both Michael Stanley and Patrick Masterson resigned as directors on 7 February 2016 Excludes employer based taxes of €39,730 (2015: €37,958) i. Options & RSUs In addition, key management personnel have been awarded share options under the ESOP and restricted stock units under the RSP, as highlighted earlier in this report. The non-cash cost associated with these awards are as follows: Page 17 James Osborne Lyle Berkowitz Christina Boyce Mark Cullen Daniel Petre Joseph Rooney Michael Stanley James (Will) Vicars Sub-total – non-executive directors Mark McCloskey James Fitter John Kelly Patrick Masterson Total Executive Directors Total 2016 2015 € 24,985 - 30,207 24,986 29,160 22,521 - 24,986 156,845 610,617 603,069 236,068 - 1,449,754 € 20,604 - - - - - - - 20,604 231,962 287,853 79,285 58,829 657,929 1,606,599 678,533 iii. Performance related remuneration metrics The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: James Osborne Lyle Berkowitz Christina Boyce Mark Cullen Daniel Petre Joseph Rooney Michael Stanley James (Will) Vicars Mark McCloskey James Fitter John Kelly Patrick Masterson Average Fixed Remuneration At Risk 2016 % 74% 100% 56% 68% 65% 67% - 68% 32% 33% 42% 100% 40% 2015 % 49% - - - - - - - 50% 44% 68% 73% 54% 2016 % 2015 % 26% - 44% 32% 35% 33% - 32% 68% 67% 58% - 60% 51% - - - - - - - 50% 56% 32% 27% 46% 3. Service agreements On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, their roles and responsibilities and Oneview’s expectations of them as non-executive directors of the Company. The terms of employment and remuneration for the executive directors are also formalised in service agreements. Each of these agreements provide for the provision of a fixed salary, participation in the Groups’ Restricted Share Plan, the Employee Share Option Plan and other benefits including health insurance. i. Mark McCloskey, President and Executive Director Mark McCloskey is employed as President under an employment contract with a Oneview goup company. Mark’s remuneration package is comprised of a base salary of €300,000 per annum, an annual discretionary bonus of up to 100% of base salary and participation in the Groups’ Restricted Share Plan (RSP) and the Groups’ Employee Share Option Plan (ESOP). The terms and conditions of Mark’s bonus and any further awards, including as to targets, vesting and/or exercise (as the case may be), are determined annually by the Remuneration Committee. Following a two year period commencing on the date of Completion of the IPO on 17 March 2016 (during which, other than for cause as described below, Oneview cannot terminate Mark’s employment without being required to pay Mark an amount equal to his gross annual salary and gross annual bonus (averaged over the previous two years) for the period equivalent to the remainder of the period from the date of Completion to the expiration of the two year period), Mark’s employment contract may be terminated by Oneview providing at least 6 months’ notice in writing is given. Further, Oneview may terminate the employment of Mark immediately in certain circumstances for any offence stipulated under Article 120 of the U.A.E. Labour Law including for any act of dishonesty, fraud, wilful disobedience, serious misconduct or serious breach of duty. Mark may terminate his employment contract by providing at least 6 months’ notice in writing before the proposed date of termination, however if he terminates his contract during the three year period commencing on the date of Completion, Mark would be deemed a ‘bad leaver’ and forfeit any Restricted Share awards under the RSP. Mark’s employment contract also includes restrictive covenants that operate for a period of 6 months following expiry of the notice period. Enforceability of such restrictions would be subject to all usual legal requirements. Page 18 ii. James Fitter, CEO and Executive Director James Fitter is employed as CEO under an employment contract with a Oneview group company. James’ remuneration package is comprised of a base salary of €300,000 per annum, an annual discretionary bonus of up to 100% of base salary and participation in the Groups’ Restricted Share Plan (RSP) and the Groups’ Employee Share Option Plan (ESOP). The terms and conditions of James’ bonus and any further awards, including as to targets, vesting and/or exercise (as the case may be), are determined annually by the Remuneration committee. Following a two year period commencing on the date of Completion of the IPO on 17 March 2016 (during which, other than for cause as described below, Oneview cannot terminate James’ employment without being required to pay James an amount equal to his gross annual salary and gross annual bonus (averaged over the previous two years) for the period equivalent to the remainder of the period from the date of Completion to the expiration of the two year period), James’ employment contract may be terminated by Oneview providing at least 6 months’ notice in writing is given. Further, Oneview may terminate the employment of James immediately in certain circumstances for any offence stipulated under Article 120 of the U.A.E. Labour Law including for any act of dishonesty, fraud, wilful disobedience, serious misconduct or serious breach of duty. James may terminate his employment contract by providing at least 6 months’ notice in writing before the proposed date of termination, however if he terminates his contract during the three year period commencing on the date of Completion, James would be deemed a ‘bad leaver’ and forfeit any Restricted Share awards under the RSP. James’ employment contract also includes restrictive covenants that operate for a period of 6 months following expiry of the notice period. Enforceability of such restrictions would be subject to all usual legal requirements. iii. John Kelly, CFO and Executive Director is employed as Chief Financial Officer John Kelly under an employment contract with a Oneview group company. John’s remuneration package is comprised of a base salary of €200,000 per annum, an annual discretionary bonus of up to 100% of base salary and participation in the Groups’ Restricted Share Plan (RSP) and the Groups’ Employee Share Option Plan (ESOP). The terms and conditions of John’s bonus and any further awards, including as to targets, vesting and/or exercise (as the case may be), are determined annually by the Remuneration Committee. Following a two year period commencing on the date of Page 19 Completion of the IPO on 17 March 2016 (during which, other than for cause as described below, Oneview cannot terminate John’s employment without being required to pay John an amount equal to his gross annual salary and gross annual bonus (averaged over the previous two years) for the period equivalent to the remainder of the period from the date of Completion to the expiration of the two year period), John’s employment contract may be terminated by Oneview providing at least 6 months’ notice in writing is given. Further, Oneview may terminate the employment of John immediately in certain circumstances including for any act of dishonesty, fraud, wilful disobedience, serious misconduct or serious breach of duty. John may terminate his employment contract by providing at least 6 months’ notice in writing before the proposed date of termination, however if he terminates his contract during the three year period commencing on the date of Completion, John would be deemed a ‘bad leaver’ and forfeit any Restricted Share awards under the RSP. John’s employment contract also includes restrictive covenants that operate for a period of 6 months following expiry of the notice period. Enforceability of such restrictions would be subject to all usual legal requirements. 4. Share Based Compensation i. Employee Share Option Plan The Board adopted an Employee Share Option Plan (ESOP) effective from 1 October 2013. Under the ESOP, options over shares may be offered to executive directors, non-executive directors, employees and to consultants of companies within the Oneview Group. Any offers are made entirely at the discretion of the Remuneration and Nomination Committee. The following options were outstanding as at 31 December 2016 in respect of the directors. Page 20 Date Number of Options Strike Price Vesting Date Name James Osborne James Osborne Mark McCloskey Mark McCloskey Mark McCloskey Mark McCloskey Grant Grant Grant Grant Grant Grant 31 December 2014 31 December 2015 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 9 October 2013 9 October 2013 9 October 2013 31 December 2014 Mark McCloskey Exercise 31 December 2015 Mark McCloskey Grant 31 December 2015 Mark McCloskey Replaced for RSU’s 31 December 2015 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 James Fitter James Fitter James Fitter James Fitter James Fitter James Fitter Grant Grant Grant Grant Exercise Grant 9 October 2013 9 October 2013 9 October 2013 31 December 2014 31 December 2015 31 December 2015 James Fitter Replaced for RSU’s 31 December 2015 John Kelly John Kelly John Kelly John Kelly John Kelly John Kelly Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 Grant Grant Grant Grant Grant 9 October 2013 9 October 2013 9 October 2013 31 December 2014 31 December 2015 Replaced for RSU’s 31 December 2015 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 James (Will) Vicars Grant 31 December 2015 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 Daniel Petre Daniel Petre Grant Grant 31 December 2014 31 December 2015 Mark Cullen Grant 31 December 2015 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 Joseph Rooney Grant 7 February 2016 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 Christina Boyce Grant 19 April 2016 Outstanding as at 31 December 2016 Exercisable as at 31 December 2016 €0.001 €0.001 31 December 2017 31 December 2018 €0.001 €0.001 €0.001 €0.001 €0.001 €0.750 €0.750 8 October 2014 8 October 2015 8 October 2016 31 December 2017 31 December 2018 31 December 2018 €0.001 8 October 2014 €0.001 €0.001 €0.001 €0.001 €0.750 €0.750 €0.001 €0.001 €0.001 €0.001 €0.750 €0.750 8 October 2015 8 October 2016 31 December 2017 31 December 2018 31 December 2018 8 October 2014 8 October 2015 8 October 2016 31 December 2017 31 December 2018 31 December 2018 €0.001 31 December 2018 €1.233 €0.001 31 December 2017 31 December 2018 €0.001 31 December 2018 €0.001 6 February 2019 €0.001 18 April 2019 50,000 50,000 100,000 - 133,340 133,330 133,330 450,000 (266,670) 200,000 (200,000) 583,330 133,330 233,340 233,330 233,330 500,000 (466,670) 200,000 (200,000) 733,330 233,330 50,000 50,000 50,000 150,000 100,000 (100,000) 300,000 150,000 50,000 50,000 - 40,000 50,000 90,000 - 50,000 50,000 - 50,000 50,000 - 50,000 50,000 - ii. Restricted Stock Share Plan Page 21 On 16 March 2016 the Company adopted the Restricted Share Unit Plan pursuant to which the Remuneration Committee of the Company’s board of directors may make an award under the plan to certain executive directors. On 16 March 2016 an aggregate of 2,585,560 new shares of €0.001 each were issued to Goodbody Trustees Ltd as restricted stock units on behalf of certain directors, with a range of performance conditions attaching to their vesting. The RSU’s shall vest over a 3 to 5 year period, dependent on achievement of performance conditions, with initial vesting based on the audited results for the year ended 31 December 2017. The shares were awarded at a price of €0.001 and vest over a service period as follows: Recipient Award Date RSUs Vesting Term Performance Conditions Mark McCloskey Mark McCloskey Mark McCloskey Mark McCloskey Mark McCloskey James Fitter James Fitter James Fitter James Fitter 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 James Fitter 16 March 2016 John Kelly John Kelly 16 March 2016 16 March 2016 Total outstanding RSU’s 200,000 205,910 274,560 102,960 205,910 989,340 200,000 525,510 205,910 274,560 102,960 1,308,940 100,000 187,280 287,280 2,585,560 *Compound Annual Growth Rate in Total Shareholder Return Tests for recurring revenue growth, hospital beds contracted and assisted living / senior living beds contracted have been set by the Remuneration and Nominations Committee for year 1 only (y/e 2017). Tests for future years shall be set by the Remuneration Committee at a future date to be determined, but by no later than 31 December of each prior year. The tests for hospital beds contracted and assisted living / senior living beds contracted along with recurring revenue growth for 2017 and future years shall be based at a level approximating to 75% achievability. This is based on a review of quotas set for sales personnel across the Company’s US, Australia and MENA regions and reflecting the likely timing of expected commencement dates for planned future sales headcount and other factors. 3 Years 3 Years 3 Years 3 Years 3 Years 3 Years 5 Years 3 Years 3 Years Continued employment CAGR in TSR* Recurring revenue growth targets Hospital beds targets Assisted living beds targets Continued employment CAGR in TSR* CAGR in TSR* Recurring revenue growth targets 3 Years Hospital beds targets 3 Years 3 Years Continued employment Compliance performance E. Additional Information vi. Loans to directors During 2016 the Company advanced an unsecured loan to a director, John Kelly, on an interest free basis for €252,469 in order to settle upfront tax charges associated with the issue of restricted shares under the Restricted Share Plan. The loan is repayable on demand in the event of disposal of restricted shares under the RSP upon lifting of the relevant restrictions attached to shares. To calculate the notional interest on this loan the directors believe an interest rate of 5% and a term of 2.25 years (being the term from grant of loan to vesting of shares) is appropriate. This equates to notional interest of €28,403 over the term, which is considered directors’ remuneration, and is in addition to the amounts disclosed in section 2 above. The loan value represents 0.4% of net assets of Oneview Healthcare PLC (the Company). On behalf of the board James Osborne Chairman 27 February 2017 Directors’ Report The directors present their report and the audited consolidated financial statements of Oneview Healthcare PLC (formerly known as Oneview Holdings Limited) and Subsidiaries (the “Group”) for the year ended 31 December 2016. Page 2 2 1. Principal activities The principal activity of the Group is the development and sale of software for the healthcare sector and the provision of related consultancy services. 2. Business review and future developments The directors consider that the development in the Group’s business during the year and its financial position as at 31 December 2016 is in line with expectations. Revenue for the year amounted to €9,028,422 (2015: €2,328,686), an increase of 288%. Recurring revenue for the year amounted to €1,279,054 (2015: €741,758), an increase of 72% and continues to grow as the Company deploys incrementally across its increasing customer base. During the year, the Company continued implementation across the following hospitals or hospital systems: • • • Epworth HealthCare comprising 8 hospitals Melbourne, Australia The Sydney Children’s Hospital Network at Westmead in Sydney The University of Iowa Children’s Hospital in Iowa City in As at 31 December 2016, the Oneview system was live in 2,666 beds with a further 2,515 beds contracted but not yet installed. There were a further 4,510 beds in contract negotiation and 7,704 in tender process. During the year, Oneview announced a number of contract successes with new hospitals including NYU Langone in New York along with a number of US based proof of concept implementation projects which the directors expect to convert to full scale hospital implementations during 2017. Specifically, the Company announced on 13 February 2017 the expansion of one of these proof of concept projects into a full scale deployment of up to 2,000 Oneview devices over a three-year period within the BJC HealthCare hospital system in the US, commencing with two of its hospitals in Missouri. The Company also announced contract success for its senior living business with Thomas Holt’s new assisted in New South Wales, Australia. The living facility Company continues to grow its pipeline of new business opportunities across the four territories in which the Group currently operates. Following the Company’s IPO, the business has continued to invest in attracting world-class employees across each of its primary office locations and has increased the headcount to 151 personnel as at 31 December 2016 from 64 at 31 December 2015. The growth in headcount has primarily been in the areas of sales, implementation and research & development. To support the significant planned further US expansion, the Company opened during September 2016, a new US headquarters based in Chicago. 3. Financial activities On 17 March 2016, the Company listed on the Australian Stock Exchange and issued 17,430,340 new shares of €0.001 each at an IPO price per share of A$3.58. The Company incurred costs of €3,126,000 associated with raising these funds of which €2,382,681 has been offset against retained earnings and €617,319 against the profit and loss for the year ended 31 December 2016 (year to 31 December 2015 €126,000). The directors intend to utilise the proceeds in the next couple of years in the expansion of the business in the principal territories in which the Group operates. 4. Principal risks and uncertainties Details of the principal risks and uncertainties facing the Group are set out in the Appendix to this annual report. The risks as set out in the Appendix include: • Oneview operates in a competitive industry • Risk that the Oneview Solution is disrupted, fails or ceases to function efficiently Failure to protect intellectual property Public healthcare funding and other regulatory changes • • 5. Financial risk management Our financial risk management objectives and policies to manage risk are set out in Note 19 Financial Instruments to the consolidated financial statements. The Group did not enter into any derivative transactions during 2016 or 2015. 6. Results and dividends The loss for the year amounted to €16,029,822 (2015: loss of €9,797,869). The directors do not recommend payment of a dividend. 7. Directors The current directors are as set out on page 1. The director’s interests held at 31 December 2016 are disclosed in note 20. 8. Post balance sheet events There are no post balance sheet events that would require disclosure or adjustment to the financial statements. 9. Political contributions The Group and Company did not make any disclosable political donations during the year. 10. Research and development The Group is involved in research and development activities and during the year incurred €381,536 in development costs that were capitalised and a further €208,051 of research costs that were expensed. 11. Acquisition of the Company’s own shares In accordance with a shareholders’ resolution of 16 March 2016, the Company acquired, for purposes of the Long Term Incentive Plan (LTIP), 2,585,560 of its own shares with a nominal value of €2,586, and representing 5% of the Company’s called-up share capital, for a total consideration of €2,586. These shares are currently held by Goodbody Trustees Limited in trust pending vesting conditions being met. 12. Audit committee The Group has established an Audit Committee with responsibility for assisting the board of the Company in fulfilling its corporate governance and oversight responsibilities in relation to the Company’s financial reports and financial reporting process and internal control structure, risk management systems (financial and non financial) and the external statutory audit process. The Committee meets on a regular basis to: • review and approve internal audit and external statutory audit plans; review and approve financial reports; and the effectiveness of review compliance and risk management functions. the Company’s • • Page 23 13. Directors’ compliance statement The directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are responsible for securing the Company’s compliance with certain obligations specified in that section arising from the Companies Act 2014, and Tax laws (‘relevant obligations’). The directors confirm that: • a compliance policy statement has been drawn up setting out the Company’s policies with regard to such compliance; appropriate arrangements and structures that, in their opinion, are designed to secure material compliance with relevant the Company’s obligations, have been put in place; and a review has been conducted, during the financial year, of the arrangements and structures that have been put in place to secure the Company’s compliance with its relevant obligations. • • 14. Relevant audit information The directors believe that they have taken all steps necessary to make themselves aware of any relevant audit information and have established that the Group’s statutory auditors are aware of that information. In so far as they are aware, there is no relevant audit information of which the Group’s statutory auditors are unaware. 15. Accounting records To ensure that adequate accounting records are kept in accordance with Sections 281 to 285 of the Companies Act 2014, the directors have employed appropriately qualified accounting personnel and have maintained appropriate computerised accounting systems. The accounting records are located at the Company’s office at Block 1, Blackrock Business Park, Blackrock, County Dublin. 16. Auditor In accordance with Section 383(2) of the Companies Act 2014 the auditors, KPMG, Registered Auditors, will continue in office. On behalf of the board James Fitter Director John Kelly Director 27 February 2017 Page 24 Statement of Directors’ Responsibilities The directors are responsible for preparing the directors’ report and the Group and Company financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and Company financial statements for each financial year. Under that law they have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and applicable law. Under company law the directors must not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the Group profit or loss for that year. In preparing each of the Group and Company financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable • • and prudent; they have been prepared state whether accordance with IFRS as adopted by the EU; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business. in The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the Company and which enable them to ensure that the financial statements of the Group are prepared in accordance with applicable IFRS, as adopted by the EU and comply with the provisions of the Companies Act 2014. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Under applicable law, the directors are also responsible for preparing a Directors’ Report that complies with the Companies Act 2014. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. On behalf of the board James Fitter John Kelly 27 February 2017 Director Director Page 25 Auditor’s Report Independent auditor’s report to the members of Oneview Healthcare PLC and Subsidiaries (formerly known as Oneview Holdings Ltd) We have audited the Group and Company financial (“financial statements”) of Oneview statements Healthcare plc (formerly known as Oneview Holdings Limited) and Subsidiaries for the year ended 31 December 2016 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the Company statement of financial position, the consolidated and Company statement of changes in equity, the consolidated statement of cash flows, the Company statement of cash flows and the related notes. The financial reporting framework that has been applied in their preparation is Irish law and International Financial Reporting Standards (IFRS) as adopted by the European Union, and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2014.Our audit was conducted in accordance with International Standards on Auditing (ISAs) (UK & Ireland). 2. Our conclusions on other matters on which we are required to report by the Companies Act 2014 are set out below In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the financial statements are in agreement with the accounting records. We have obtained all the information and explanations which we consider necessary for the purposes of our audit. prepared in accordance with the requirements of the Companies Act 2014. In our opinion the information given in the directors’ report is consistent with the financial statements. Opinions and conclusions arising from our audit 3. We have nothing to report in respect of matters on which we are required to report by exception 1. Our opinion on the financial statements is unmodified In our opinion: • the Group financial statements give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2016 and of its loss for the year then ended; the Company statement of financial position gives a true and fair view of the assets, liabilities and financial position of the Company as at 31 December 2016; the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; the Company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2014; and the Group financial statements and Company statement of financial position have been properly • • • • ISAs (UK & Ireland) require that we report to you if, based on the knowledge we acquired during our audit, we have identified information in the annual report1 that contains a material inconsistency with either that knowledge or the financial statements, a material misstatement of fact, or that is otherwise misleading. In addition, the Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions required by sections 305 to 312 of the Act are not made. 1 Reference to the annual report is a reference to the statutory Directors’ Report on pages 22 and 23, as well as the statutory financial statements on pages 27 to 59, inclusive. Page 26 Basis of our report, responsibilities and restrictions on use As explained more fully in the statement of directors’ responsibilities set out on page 24, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s Ethical Standards for Auditors. An audit undertaken in accordance with ISAs (UK & Ireland) involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Directors’ Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies, we consider the implications for our report. Whilst an audit conducted in accordance with ISAs (UK & Ireland) is designed to provide reasonable assurance of identifying material misstatements or omissions it is not guaranteed to do so. Rather the auditor plans the audit to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements does not exceed materiality for the financial statements as a whole. This testing requires us to conduct significant audit work on a broad range of assets, liabilities, income and expense as well as devoting significant time of the most experienced members of the audit team, in particular the engagement partner responsible for the audit, to subjective areas of the accounting and reporting. Our report is made solely to the Company’s members, as a body, in accordance with section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. 27 February 2017 Sean O’Keefe for and on behalf of KPMG Chartered Accountants, Statutory Audit Firm 1 Stokes Place St. Stephen’s Green Dublin 2 Financial Report Consolidated statement of comprehensive income for the year ended 31 December 2016 Revenue - continuing operations Cost of sales Gross profit Sales and marketing expenses Product development and delivery expenses General and administrative expenses Operating loss Finance charges Finance income Loss before tax Income tax Loss for the year Attributable to ordinary shareholders Earnings / (loss) per share Basic Diluted Other comprehensive loss Items that will or may be reclassified to profit or loss Foreign currency translation differences on foreign operations (no tax impact) Other comprehensive gain, net of tax Page 27 2016 2015 Note € € 2 9,028,422 2,328,686 (6,096,267) (1,539,163) 2,932,155 789,523 (7,747,090) (3,806,455) (9,766,955) (5,144,268) (4,047,973) (1,470,393) 3,4 (18,629,863) (9,631,593) 5 5 6 7 7 (25,908) (154,032) 2,651,930 20 (16,003,841) (9,785,605) (25,981) (12,264) (16,029,822) (9,797,869) (16,029,822) (9,797,869) (0.33) (0.33) (0.37) (0.37) 60,595 9,998 60,595 9,998 Total comprehensive loss for the year (15,969,227) (9,787,871) The total comprehensive expense for the year is entirely attributable to equity holders of the Group. Consolidated statement of financial position as at 31 December 2016 Non-current assets Intangible assets Property, plant and equipment Directors’ loans Current assets Trade and other receivables Cash and cash equivalents Total current assets Total assets Equity Issued share capital Share premium Treasury reserve Other undenominated capital Reorganisation reserve Share based payments reserve Translation reserve Retained earnings Total equity Non-current liabilities Deferred income Total non-current liabilities Current liabilities Trade and other payables Total current liabilities Total liabilities Total equity and liabilities On behalf of the board James Fitter Director John Kelly Director 27 February 2017 Page 28 2016 2015 Note € € 8 9 20 815,742 591,529 252,469 754,602 202,641 - 1,659,740 957,243 11 4,449,210 2,051,662 35,087,776 12,771,127 15 15 15 15 1 14 39,536,986 14,822,789 41,196,726 15,780,032 54,297 34,281 66,633,057 25,806,841 (2,586) 4,200 - 4,200 (1,351,842) (1,351,842) 3,846,915 1,492,452 (13,676) (74,271) (33,316,104) (14,733,713) 35,854,261 11,177,948 13 525,885 540,598 525,885 540,598 12 4,816,580 4,061,486 4,816,580 4,061,486 5,342,465 4,602,084 41,196,726 15,780,032 Page 29 2016 2015 Note € € 10 11 20 3,652,507 1,516,377 7,657,036 252,469 - - 11,562,012 1,516,377 11 27,514,518 15,054,244 29,625,547 10,571,932 57,140,065 25,626,176 68,702,077 27,142,553 15 15 15 15 14 54,297 34,281 66,633,057 25,806,841 (2,586) 4,200 - 4,200 3,846,915 1,492,452 (1,990,571) (444,205) 68,545,312 26,893,569 12 156,765 248,984 156,765 248,984 68,702,077 27,142,553 Company statement of financial position as at 31 December 2016 Non-current assets Financial assets Loan to Group company Directors’ loans Current assets Trade and other receivables Cash and cash equivalents Total current assets Total assets Equity Share capital Share premium Treasury reserve Other undenominated capital Share based payment reserve Retained earnings Total equity Current liabilities Trade and other payables Total liabilities Total equity and liabilities On behalf of the board James Fitter Director John Kelly Director 27 February 2017 Consolidated statement of changes in equity for the year ended 31 December 2016 Page 30 Share capital Share premium Treasury reserve Other undenominated capital Reorganisation reserve Share based payment reserve Translation reserve Retained loss Total equity € € € € € € € € € Balance at 1 January 2015 29,747 13,984,729 Loss for the year Foreign currency translation Total comprehensive loss Transactions with shareholders Share based compensation Issue of ordinary shares Redemption of B ordinary shares Exercise of options As at 31 December 2015 Loss for the year Foreign currency translation Total comprehensive loss Transactions with shareholders Share based compensation Transfer to retained earnings Issue of ordinary shares Treasury shares acquired As at 31 December 2016 - - - - - - - - 8,000 11,822,112 (4,200) 734 - - 34,281 25,806,841 - - - - - - - - - 169,888 20,016 40,656,328 - - - - - - - - - - - - - - - - - - - - - 4,200 - (1,351,842) 559,742 (84,269) (4,931,644) 8,206,463 - - - - - - - - - - - (9,797,869) (9,797,869) 9,998 9,998 - 9,998 (9,797,869) (9,787,871) 932,710 - - - - - - - - - (4,200) - 932,710 11,830,112 (4,200) 734 4,200 (1,351,842) 1,492,452 (74,271) (14,733,713) 11,177,948 - - - - - - - - - - - - - - - - - - (16,029,822) (16,029,822) 60,595 - 60,595 60,595 (16,029,822) (15,969,227) 2,354,463 - - - - - - - - 2,354,463 (169,888) - (2,382,681) 38,293,663 - (2,586) - - (2,586) 54,297 66,633,057 (2,586) 4,200 (1,351,842) 3,846,915 (13,676) (33,316,104) 35,854,261 Company statement of changes in equity for the year ended 31 December 2016 Page 31 Share capital Share premium Treasury reserve Other undenominated capital Share based payment reserve Retained loss Total equity Balance at 1 January 2015 Loss for the year Transactions with shareholders Share based compensation Issue of ordinary shares Redemption of B ordinary shares Exercise of options Balance at 31 December 2015 Profit for the year Transactions with shareholders Share based compensation Issue of ordinary shares Transfer to retained earnings Treasury shares acquired € € 29,747 13,984,729 - - 8,000 (4,200) 734 - - 11,822,112 - - 34,281 25,806,841 - - - - - 20,016 40,656,328 € - - - - - - - - - - - - 169,888 - (2,586) € - - - 4,200 - € € € 559,742 (285,678) 14,288,540 - (154,327) (154,327) 932,710 - - - - - (4,200) - 932,710 11,830,112 (4,200) 734 4,200 1,492,452 (444,205) 26,893,569 - - - - - - 1,006,203 1,006,203 2,354,463 - 2,354,463 - - - (2,382,681) 38,293,663 (169,888) - - (2,586) Balance at 31 December 2016 54,297 66,633,057 (2,586) 4,200 3,846,915 (1,990,571) 68,545,312 Consolidated statement of cash flows for the year ended 31 December 2016 Cash flows from operating activities Receipts from customers Payments to suppliers Payments to employees Finance charges paid Interest received Income tax (paid) / refund Page 32 Note 2016 2015 € € 6,601,222 1,996,793 (11,793,613) (2,256,233) (11,996,501) (5,211,721) (25,908) (19,088) 871 (14,237) 20 58,628 Net cash used in operating activities 18 (17,228,166) (5,431,601) Cash flows from investing activities Loans to director Purchase of property, plant and equipment Acquisition of intangible assets Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Transaction costs Proceeds from unpaid share capital issued in 2015 Repayment of borrowings (252,469) - (527,732) (154,989) (428,614) (289,293) (1,208,815) (444,282) 40,676,344 11,826,646 (2,382,681) 28,335 - - - (108,297) Net cash provided by financing activities 38,321,998 11,718,349 Net increase in cash held Foreign exchange impact on cash and cash equivalents Cash and cash equivalents at beginning of financial year 19,885,017 5,842,466 2,431,632 (23,168) 12,771,127 6,951,829 Cash and cash equivalents at end of financial year 35,087,776 12,771,127 Company statement of cash flows for the year ended 31 December 2016 Cash flows from operating activities Payments to suppliers Payments to group companies Page 33 Note 2016 2015 € € (1,438,709) (290,241) (19,883,295) (7,086,753) Net cash used in operating activities 18 (21,322,004) (7,376,994) Loans to director Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Transaction costs (252,469) (252,469) - - 40,676,344 11,826,645 (2,382,681) - Net cash provided by financing activities 38,293,663 11,826,645 Net increase in cash held Foreign exchange impact on cash and cash equivalents Cash and cash equivalents at beginning of financial year 16,719,190 4,449,651 2,334,425 10,571,932 (5,536) 6,127,817 Cash and cash equivalents at end of financial year 29,625,547 10,571,932 Notes 1. Accounting policies – Group and Company Page 34 Reporting entity Oneview Healthcare PLC (“OHP”) is domiciled in Ireland with its registered office at Block 1, Blackrock Business Park, Blackrock, County Dublin (company registration number 513842). The consolidated financial information of OHP as set out for the year ended 31 December 2016 comprises OHP and its subsidiary undertakings (together the “Group”). During 2012, OHP was incorporated for the purpose of implementing a holding company structure. This resulted in a group re-organisation with OHP becoming the new parent company of Oneview Limited (“OL”) by way of share for share swap with the existing shareholders of OL. This has been accounted for as a continuation of the original OL business via the new OHP entity resulting in the creation of a reorganisation reserve in the consolidated financial statements in the amount of €1,347,642, (increased by €4,200, to €1,351,842 in 2013 due to the issue of B shares). No reorganisation reserve was created at OHP company level as the fair value was equal to the carrying value on the date of the reorganisation. Statement of compliance The Group financial statements and the Company financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (EU) that are effective at 31 December 2016. The directors have elected to prepare the Company financial statements in accordance with IFRS as adopted by the EU and as applied in accordance with the Companies Act 2014. The Companies Act 2014 permits a company that presents its individual financial statements together with its consolidated financial statements with an exemption from publishing the Parent income statement and statement of comprehensive income which forms part of the Parent financial statements prepared and approved in accordance with the Act. Going concern The Group meets its day-to-day working capital requirements through its cash reserves, which stood at €35.1 million at 31 December 2016. The Group’s forecasts and projections, taking account of reasonable possible in trading performance and the Group’s changes management of its principal risks and uncertainties, show that the Group should be able to operate within the level of its current resources. On 17 March 2016 Oneview Healthcare PLC listed on the ASX. The directors intend to continue to utilise the proceeds from the IPO in the expansion of the business in the principal territories in which the Group operates. After making enquiries, and including the proceeds from an IPO, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its consolidated financial statements. Standards and interpretations in issue but not effective and not applied The IASB and the International Financial Reporting Interpretations Committee (IFRIC) have issued the following standards, amendments to existing standards and interpretations that are not yet effective for the Group: Page 35 Standards and interpretations in issue but not effective and not applied (continued) New/Revised International Financial Reporting Standards Amendments to IAS 7: Disclosure Initiative Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses IFRS 15: Revenue from Contracts with Customers IFRS 9: Financial Instruments Amendments to IFRS 2: Classification and measurement of share-based payment transactions Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts Clarifications to IFRS 15: Revenue from Contracts with Customers IFRS 16 Leases Annual improvements to IFRS Standards 2014 – 2016 Cycle IFRIC Interpretation 22 Foreign Currency transactions and advance consideration Amendments to IAS 40 Transfer of Investment Property Effective date ¹ 1 January 2017* 1 January 2017* 1 January 2018 1 January 2018 1 January 2018* 1 January 2018* 1 January 2018* 1 January 2019* 1 January 2018 1 January 2018 1 January 2018 ¹ The effective dates are those applying to EU endorsed IFRS if later than the IASB effective dates and relate to periods beginning on or after those dates detailed above. * These are the IASB effective dates not yet endorsed under EU IFRS. The Group is currently considering the impact of the above interpretations and amendments on future Annual Reports. Use of estimates and judgements The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are included in the following notes: Revenue (f) Intangible assets and amortisation (h) a. Basis of consolidation The Group the financial statements of Oneview Healthcare PLC and its subsidiaries. financial statements consolidate Financial statements of subsidiaries are prepared for the same reporting year as the Company and where necessary, adjustments are made to the results of subsidiaries to bring their accounting policies into line with those used by the Group. All inter-company balances and transactions, including unrealised profits arising from inter-group transactions, have been eliminated in full. Unrealised losses are eliminated in the same manner as unrealised gains except to the extent that there is evidence of impairment. Investments in subsidiaries b. In the Company’s financial statements, investments in subsidiaries are carried at cost less any provision made for impairment. c. Transactions eliminated on consolidation Intra-Group balances, and any unrealised income and expenses arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements. d. Translation of foreign currencies The presentation currency of the Group and Company is euro (€). The functional currency of the Company is euro. Results of non-euro denominated subsidiaries are translated into euro at the actual exchange rates at the transaction dates or average exchange rates for the year where this is a reasonable approximation. The related statements of financial position are translated at the rates of exchange ruling at the reporting date. Adjustments arising on translation of the results of non-euro subsidiaries at average rates, and on the restatement of the opening net assets at closing rates, are dealt with in a separate translation reserve within equity. Transactions in currencies different to the functional currencies of operations are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency at the rate of exchange at the reporting date. All translation differences are taken to the income statement through the finance expense line. Income tax e. Income tax expense in the income statement represents the sum of income tax currently payable and deferred income tax. Income tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and further excludes items that are not taxable or deductible. The Group’s liability for income tax is calculated using rates that have been enacted or substantively enacted at the reporting date. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity. Deferred income tax is provided, using the liability method, on all differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes except those arising from non-deductible goodwill or on initial recognition of an asset or liability which affects neither accounting nor taxable profit. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is expected to be realised or the liability to be settled. Deferred tax assets are recognised for all deductible differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and derecognised to the extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of the deferred income tax asset to be utilised. f. Revenue The Group’s revenue consists primarily of revenues from its customer contracts with healthcare providers for the provision and support of the Oneview Solution. Revenue comprises the fair value of the consideration received or receivable for the sale of products and services in the ordinary course of the Group’s activities. Revenue is Page 36 shown net of value-added-tax (VAT) and discounts. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. Software usage and content revenue i. Software usage and content revenue is earned from the use of the Group’s solution by our customers. Revenue is earned by charging a fee based on the number of beds for which the Oneview Solution is installed, and is charged on a daily basis. The daily charge may vary depending on the level of functionality and content provided. Contracts for the use of the Oneview Solution are typically five years in duration with fees typically billable annually in advance. Software usage and content revenue are recognised on a daily basis. Revenue recognition commences following completion of user acceptance testing (UAT) by the customer. Support services ii. Support services or maintenance for software relates to email and phone support, bug fixes and unspecified software updates and upgrades released during the maintenance term. Support services for hardware relates to phone and / or onsite support. The level of support varies depending on the contracted level of support. The Company receives an annual fee, payable in advance, for hardware and software support services and is recognised on a daily basis over the term. The fee is based on the number of devices on which the Oneview Solution is installed. License fee iii. License fees represent an upfront access license fee, payable in advance. The fee is based on the number of devices for which the Oneview Solution is installed. The license fee is recognised over the life of the original contract term, typically five years, as the upfront delivery of the license does not have stand-alone value to the customer. Hardware iv. Hardware revenue is earned from fees charged to customers for the hardware supplied to operate the Oneview Solution. Where the Company acts as the principal in the supply of hardware, hardware revenue is recognised gross upon delivery of the hardware to the customer. Where the Company acts as an agent in the supply of hardware, the fee paid to the Company is recognised when earned per the terms of the contract. Revenue from hardware in the years presented in the Page 37 financial statements are earned because the Company has acted as the principal. Given the methods and timing of delivery of the hardware the Company did not hold inventory at any year end presented in the financial statements. Intangible assets h. Computer software Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of three to five years. Services income v. Installation and integration services revenue is earned from fees charged to deploy the Oneview Solution and install hardware at customer sites. If the service is on a contracted time and material basis, then the revenue is recognised as and when the services are performed. If it is a fixed fee, then the professional services revenue is recognised by reference to the stage of completion accounting method. The Group measures percentage of completion based on labour hours incurred to date as a proportion of total hours allocated to the contract, or for installation of hardware based on units installed as a proportion of the total units to install. If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues or costs and are reflected in the period in which the circumstances that give rise to the revision become known by management. Other income vi. Other income includes incidental recharge of costs of employees to customers. Revenue is recognised when there is persuasive evidence of an arrangement, the product or service is delivered, the fee is considered fixed or determinable and collection of the related receivable is considered probable. g. Property, plant and equipment Property, plant and equipment are stated at cost or at valuation, less accumulated depreciation and impairment loss. Depreciation is calculated on a straight line basis over the estimated useful life of the asset and any profit or loss is recognised in the statement of total comprehensive income for each part of an item of property, plant and equipment. Depreciation methods and useful lives are reassessed at each reporting date. The estimated useful lives for additions during the current period are as follows: Fixtures, fittings and equipment 10% - 33% straight line Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net in the consolidated statement of total comprehensive income. Internally generated intangible assets – research and development Expenditure on research activities undertaken with the prospect of gaining new technical knowledge and understanding is recognised in the income statement as an expense as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for new or substantially improved products or processes is capitalised if the product or process is (i) technically and commercially feasible; (ii) future economic benefits are probable; and (iii) the Company intends to and has sufficient resources to complete the development. Capitalised expenditure includes direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses. Amortisation is recognised in the income statement on a straight-line basis over the estimated useful lives of intangible assets and amortisation commences in the year of capitalisation, as this best reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows: Capitalised development costs 5 years straight line Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. In 2015, as a result of a review carried out on the useful life of its software development, the Company reassessed the useful life from 10 years to 5 years from the date of capitalisation. This had the effect of increasing the amortisation charge in 2015 by €820,385 from €316,305 to €1,136,690. For 2016, the charge has normalised based on a 5 year term. i. Government grant The Group recognises a government grant related to capitalised development costs in the form of R&D tax credits. Government grants are initially recognised as deferred income at fair value, if there is reasonable assurance that they will be received, they are then recognised in profit or loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the periods in which the expenses are recorded. j. Exceptional item The Group has used the term ‘exceptional’ to describe certain items which, in managements view, warrant separate disclosure by virtue of their size or incidence, or due to the fact that certain gains or losses are determined to be non-recurring in nature. k. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where ordinary shares are repurchased by the Company they are cancelled and the nominal value of the shares is transferred to an undenominated capital reserve fund within equity. l. Trade and other payables Trade and other payables are stated at the discounted present value of the estimated outflows of funds. Where the maturity is less than one year they are not discounted and are shown at cost. m. Cash and cash equivalents Cash and cash equivalents comprise cash balances and cash deposits with an original maturity of three months or less. n. Employee Benefis Defined contribution plans and other long term employee benefits A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees. Share based payments The grant date fair value of share-based payments awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’). The fair value of the awards granted is measured based on an observable market price using an option valuation model, taking into account the terms and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions or market conditions, Page 38 the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Long term incentive plan (‘LTIP’) In 2016, the Company established a LTIP Scheme under which certain employees were granted the opportunity to participate in a LTIP Scheme that contains both performance and service conditions. The fair value of the employee services received in exchange for the grant of the ownership interest is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the awards granted after adjusting for market based conditions and non-vesting conditions. Service and non-market vesting conditions including recurring revenue growth and number of beds are included in assumptions about the number of awards that are expected to become full ownership interests. At each reporting date, the estimate of the number of awards that are expected to vest is revised. The impact of the revision of original estimates, if any, is recognised in the income statement, with a corresponding adjustment to equity. The total expense is recognised over the vesting period which is the period over which all the specified vesting conditions are satisfied. Modifications of the performance conditions are accounted for as a modification under IFRS 2. In particular, where a modification increases the fair value of the equity instruments granted, the Group has included the incremental fair value granted in the measurement of the amount recognised for the services received over the remainder of the vesting period. o. Lease payments Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. p. Finance income and finance costs The Group’s finance income and finance costs include: • • • • Interest income Interest expense Foreign currency translation expense Bank charges Interest income or expense is recognised using the effective interest method. q. Financial assets and liabilities Trade and other receivables Trade and other receivables are initially recognised at fair value, which is usually the original invoiced amount and subsequently carried at amortised cost using the effective interest method less provision made for impairment. Specific provisions are made where there is objective evidence of impairment, for example where there is an inability to pay. Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents include cash in hand, deposits repayable on demand and other short-term highly liquid investments with original maturities of three months or less, less bank overdrafts payable on demand. Trade and other payables Page 39 Trade and other payables are initially recorded at fair value, which is usually the original invoiced amount, and subsequently carried at amortised cost using the effective interest rate method. Loans to and receivables from Group Companies Loans to and receivables from Group Companies are included in current assets on the balance sheet, except for those with maturities greater than twelve months after the balance sheet date, which are included in non-current assets. Loans and receivables are initially recorded at fair value and thereafter at amortised cost. Financial assets or liabilities at fair value through profit or loss Financial instruments classified as assets or liabilities at fair value through the income statement are financial instruments either held for trading or designated at fair value through profit or loss at inception. On initial recognition, these assets are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses on these financial assets are recognised in profit or loss as they arise. Page 40 2. Segment Information We are managed as a single business unit engaged in the provision of interactive patient care, accordingly, we operate in one reportable segment which provides a patient engagement solution for the healthcare sector. Our operating segment in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). Our CODM is reported has been identified as our executive management team. The executive management team comprises of the Company President, CEO, CFO and CCO. The CODM assess the performance of the business, and allocates resources, based on the consolidated results of the Company. Revenue by type and geographical region is as follows: Contracted subscription revenue: Software usage and content Support income Licence, hardware services and other income: Licence fee Hardware Services income Other income Revenue attributable to geographic region: Ireland United States Australia Middle East and North Africa Non-current assets by geographic region: Ireland United States Australia Middle East and North Africa 2016 € 702,178 576,876 1,279,054 252,024 5,938,232 1,517,886 41,226 7,749,368 9,028,422 2016 € 6,033 1,829,047 7,059,021 134,321 9,028,422 2016 € 1,309,752 185,835 154,572 9,581 1,659,740 2015 2015 € 339,786 401,972 741,758 176,539 976,991 425,907 7,491 1,586,928 2,328,686 2015 € 7,492 926,698 1,301,278 93,218 2,328,686 € 892,410 17,439 34,897 12,497 957,243 Major customer Revenues from customer A and B represented 54% (2015: 34%), and 20% (2015: 0%) respectively of the Group’s total revenues in the year. Page 41 3. Statutory and other information Loss for the year has been arrived at after charging / (crediting): 2016 2015 Amortisation of software Amortisation of software development costs Depreciation of property, plant and equipment Foreign exchange (gain) / loss Operating lease rentals € 7,811 359,663 138,884 (2,651,059) 449,499 € 318 1,136,690 60,416 134,944 196,023 4. Employee numbers and benefits expense The average number of permanent full-time persons (including executive directors) employed by the Group during the year was 109 (2015: 52). Administrative Product development and delivery Sales and marketing 2016 2015 Number Number 16 76 17 109 12 34 6 52 The staff costs (inclusive of directors’ salaries) comprise: 2016 2015 Wages and salaries Social welfare costs Less capitalised development costs Share based payments (note 14) Defined contribution pension Directors’ remuneration Short-term employee benefits Post-employment benefits Share based payment Total compensation € € 11,116,890 4,533,858 916,723 (353,369) 2,354,463 49,661 406,687 (174,169) 932,710 24,409 14,084,368 5,723,495 2016 2015 € € 1,436,468 846,383 70,000 - 1,606,599 608,563 3,113,067 1,454,946 In addition to the table above deemed interest on the director’s loan as described in Note 20 is considered director’s remuneration. Page 42 5. Finance (charges) / income 2016 2015 Bank charges Foreign exchange loss Finance charges Foreign exchange gain Interest income Finance income € (25,908) - (25,908) 2,651,059 871 2,651,930 6. Income tax The components of the current tax charge for the years ended 31 December 2016 and 2015 were as follows: 2016 2015 Current tax expense Corporation tax for the year Foreign tax for the year Total tax charge in income statement Reconciliation of effective tax rate € (3,645) (22,336) (25,981) € (19,088) (134,944) (154,032) - 20 20 € (5,533) (6,731) (12,264) A reconciliation of the expected tax credit, computed by applying the standard Irish tax rate to loss before tax to the actual tax credit, is as follows: 2016 2015 Loss before tax Irish standard tax rate Tax at Irish standard tax rate Permanent items Prior year adjustment Current year unrecognised deferred tax Effect of foreign tax Income taxed at higher rate Tax relief at source Non-taxable income Total tax charge € (16,003,841) 12.5% (2,000,480) (140,006) - 1,973,842 183,379 7,596 3,645 (1,995) 25,981 € (9,785,605) 12.5% (1,223,201) 167,176 (9,218) 1,063,778 11,012 2,717 - - 12,264 Page 4 3 No tax charge has been credited or charged directly to equity. The Company has an unrecognised deferred tax asset carried forward of €3,921,995 (31 December 2015: €2,023,072). As the Company has a history of losses a deferred tax asset will not be recognised until the Company can predict future taxable profits with sufficient certainty. Certain prior year amounts have been reclassified for consistency with current year presentation. The reclassifications had no effect on the reported results of the Group. The reclassification related to the research and development tax credit which was offset against the relevant expenses, including capitalised development costs. The unrecognised deferred tax asset at 31 December 2016 and 2015 was as follows: Deferred tax asset Net operating losses carried forward PPE and intangible assets temporary differences Excess management expenses Provisions Total deferred taxation asset 7. Earnings per share Basic earnings per share Loss attributable to ordinary shareholders Weighted average number of ordinary shares outstanding (i) Basic loss per share (i) Weighted-average number of ordinary shares (basic) Issued ordinary shares at 1 January (adjusted for bonus issue) Effect of shares issued Weighted average number of ordinary shares at 31 December 2016 2015 € € 3,695,144 1,935,145 8,030 83,171 135,650 3,921,995 5,742 - 82,185 2,023,072 2016 2015 € € (16,029,822) 48,129,563 (0.33) (9,797,869) 26,827,460 (0.37) 2016 2015 No. No. 34,280,800 13,848,763 48,129,563 25,547,460 1,280,000 26,827,460 Basic loss per share is calculated by dividing the loss for the year after taxation attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share Loss attributable to ordinary shareholders Weighted average number of ordinary shares outstanding (i) Weighted average number of ordinary shares Diluted loss per share (i) Weighted-average number of ordinary shares (diluted) Issued ordinary shares at 1 January Effect of shares issued Adjustment for share options Weighted average number of ordinary shares at 31 December Page 4 4 2016 2015 € € (16,029,822) 48,129,563 48,129,563 (9,797,869) 26,827,460 26,827,460 (0.33) (0.37) 2016 No. 2015 No. 34,280,800 25,547,460 13,848,763 1,280,000 - - 48,129,563 26,827,460 The calculation of diluted earnings per share has been based on the profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding after adjustments for the effects of all dilutive ordinary shares. Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease EPS or increase the loss per share from continuing operations. As the Company is loss making there is no difference between the basic and diluted earnings per share. 8. Intangible assets Cost At 1 January 2015 Additions At 31 December 2015 At 1 January 2016 Additions At 31 December 2016 Accumulated amortisation and impairment losses At 1 January 2015 Amortisation At 31 December 2015 At 1 January 2016 Amortisation At 31 December 2016 Carrying amount At 1 January 2015 At 31 December 2015 At 31 December 2016 Amortisation Software Development costs Total € - 5,727 5,727 5,727 47,078 € € 2,879,487 283,566 2,879,487 289,293 3,163,053 3,168,780 3,163,053 3,168,780 381,536 428,614 52,805 3,544,589 3,597,394 - 318 318 318 7,811 8,129 1,277,170 1,136,690 1,277,710 1,137,008 2,413,860 2,414,718 2,413,860 359,663 2,414,178 367,474 2,773,523 2,781,652 - 5,409 44,676 1,602,317 749,193 771,066 1,602,317 754,602 815,742 Amortisation expense of €367,474 (2015: €1,137,008) has been charged in product development and delivery expenses in the income statement. 9. Property, plant and equipment Cost At 1 January 2015 Additions during the year At 31 December 2015 At 1 January 2016 Additions during the year At 31 December 2016 Depreciation At 1 January 2015 Charge for the year At 31 December 2015 At 1 January 2016 Charge for the year At 31 December 2016 Net book value At 1 January 2015 At 31 December 2015 At 31 December 2016 Page 4 5 Fixtures, fittings and equipment Total € € 150,043 154,989 150,043 154,989 305,032 305,032 305,032 527,732 832,764 305,032 527,732 832,764 41,975 60,416 41,975 60,416 102,391 102,391 102,391 138,844 241,235 108,068 202,641 591,529 102,391 138,844 241,235 108,068 202,641 591,529 Property, plant and equipment is carried at original cost less depreciation and any provision for impairment losses. 10. Investment in subsidiary companies Shares in Group companies – unlisted, at cost: At start of year Additions Share based payments relating to subsidiary entity employees At end of year 2016 2015 € € 1,516,377 584,402 67 2,136,063 3,652,507 - 931,975 1,516,377 Share based payments relating to subsidiary entity employees represent capital contributions made to certain subsidiary undertakings to reflect the amounts expensed by these subsidiary undertakings for share based payment expenses. Oneview Assisted Living PTY was incorporated in June 2016. Page 46 As at 31 December 2016 the Company had the following subsidiary undertakings: Name Registered office Nature of business Proportion held by Group Oneview Limited Oneview KSA Limited Oneview Healthcare Inc Oneview Assisted Living Inc Oneview Middle East DMCC Oneview Healthcare PTY Limited Oneview Assisted Living PTY Limited Block 1 Blackrock Business Park Carysfort Avenue Blackrock Dublin Block 1 Blackrock Business Park Carysfort Avenue Blackrock Dublin 444 North Michigan Ave Suite 2450 Chicago IL 60611 USA 444 North Michigan Ave Suite 2450 Chicago IL 60611 USA Unit 1409 Armada-2, Plot P-2 Jemeriah Lake Towers Dubai, UAE Level 5 75 Miller Street North Sydney NSW, 2060 Level 5 75 Miller Street North Sydney NSW, 2060 2016 100% 2015 100% Software development, distribution and implementation Dormant 100% 100% Software distribution and implementation 100% 100% Dormant 100% 100% Software distribution and implementation Software distribution and implementation 100% 100% 100% 100% Dormant 100% 100% Shares in Group companies – unlisted, at cost: At start of year Additions At end of year Share based payments relating to subsidiary entity employees 2016 2015 € 67 1,516,377 584,402 2,136,063 3,652,507 931,975 1,516,377 € - Share based payments relating to subsidiary entity employees represent capital contributions made to certain subsidiary undertakings to reflect the amounts expensed by these subsidiary undertakings for share based payment expenses. Oneview Assisted Living PTY was incorporated in June 2016. Page 47 11. Trade receivables and other receivables Group Company 2016 2015 2016 2015 Amounts falling due within one year: Trade receivables Prepaid expenses and other current assets Issued and unpaid share capital Research and development tax credit Amounts due from Group companies Amount due from Oneview Limited** Sales tax recoverable Amounts falling due after more than one year: Research and development tax credit Amounts due from Group Companies* € € 3,363,149 872,810 - 92,356 - - - 939,377 961,400 28,335 38,629 - - € - 43,568 - - € - 62,128 28,335 - 26,785,969 14,450,267 500,399 15,664 184,582 500,399 13,115 4,328,315 1,983,405 27,514,518 15,054,244 120,895 68,257 - - - 7,657,036 4,449,210 2,051,662 7,657,036 - - - * Amounts due from Group Companies bear interest at the US risk free rate plus a margin. Loans are repayable in April and December 2018. ** Enterprise Ireland acquired convertible shares in Oneview Ltd in 2009 and 2011. These shares had a right to an interest coupon and other conversion features. On 19 December 2013 Oneview Healthcare PLC, the Company’s parent Company, acquired these shares from Enterprise Ireland. On the same date Oneview Healthcare PLC waived all rights to interest and convertible features. These shares are redeemable. This loan is payable on demand and is not incurring any interest. The fair value of trade receivables approximates to the values shown above. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold collateral as security. The aging analysis of past due trade receivables is set out below: Aging analysis of past due Current Less than 30 days Between 31-60 days Between 61-90 Days More than 90 days Impaired Total As at December 2016 1,589,055 473,812 136,250 355,308 808,724 € € € € € As at December 2015 224,867 651,869 25,826 - 36,815 € - - € 3,363,149 939,377 The Group’s customers are primarily state controlled public hospitals in their relevant jurisdictions. As at 31 December 2016, a significant portion of the trade receivables related to a limited number of customers as follows: Customer A 45% (2015: 57%), Customer B 28% (2015: -) and Customer C 13% (2015: 35%). Page 48 The carrying amounts of the Group’s trade receivables is denominated in the following currencies: US Dollar Australian Dollar AED Euro 12. Trade and other payables (current) Trade payables Payroll related taxes Superannuation / pension Other payables and accruals Deferred income Amounts due to Group companies R&D tax credit – deferred grant income Sales tax payable 2016 2015 € 813,741 2,536,904 6,378 6,126 3,363,149 € 351,402 553,322 30,972 3,681 939,377 Group Company 2016 2015 2016 2015 € € € € 1,039,554 701,565 77,459 1,236,341 636,775 387,606 19,253 717,434 32,002 15,290 - 19,980 - - 109,118 228,716 1,661,907 2,300,418 - 74,000 25,754 - - - - 355 - - - 288 - - 4,816,580 4,061,486 156,765 248,984 13. Deferred income (non-current) Deferred income Group Company 2016 2015 2016 2015 € € 525,885 525,885 540,598 540,598 € - - € - - Page 49 14. Share-based payments At 31 December 2016, the Group had the following share based payment arrangements: a. Employee Share Option Scheme In July 2013, the Group established a share option program that entitles certain employees to purchase shares in the Company. Options vest over a service period and are settled in shares. The key terms and conditions related to grants under this programme are as follows: Grant date/employee entitled Options granted to senior management 2016 2015 2014 2013 Total Granted Exercised Forfeited Closing Options granted to general employees Granted Exercised Forfeited Closing Total 660,000 1,200,000 1,590,000 1,575,000 5,025,000 - - - - (733,340) (733,340) (600,000) (50,000) - (650,000) 660,000 600,000 1,540,000 841,660 3,641,660 683,000 550,000 150,000 160,000 1,543,000 - - (15,000) (120,000) - - - - (93,330) (228,330) 668,000 430,000 150,000 66,670 1,314,670 1,328,000 1,030,000 1,690,000 908,330 4,956,330 The options in 2013-2015 have vesting conditions of 3 years from grant date. The options granted in 2016, have a mix of 3 and 4 year vesting terms. The number and weighted-average exercise price of share options outstanding and exercisable at 31 December 2016 is as follows: Outstanding at 1 January Forfeited during the year Replaced during the year Exercised during the year Granted during the year Outstanding at 31 December Exercisable at 31 December Number of options 2016 Weighted average exercise price 2016 Number of options 2015 Weighted average exercise price 2015 4,348,330 (235,000) (500,000) - 1,343,000 4,956,330 1,212,022 €0.246 €0.690 €0.690 3,381,670 (50,000) - - (733,340) €3.144 1,750,000 €0.965 4,348,330 €0.233 971,660 €0.016 €0.001 - €0.001 €0.581 €0.246 €0.018 The options outstanding at 31 December 2016 had an exercise price in the range of €0.01 to €4.42 (2015: €0.01 to €12.33, following share split €0.001 to €1.233). On 17 February 2016, the Company’s shareholders approved a bonus issue of ordinary shares to ordinary shareholders as of that date. The bonus issue provided for each shareholder to receive 9 bonus ordinary shares for each ordinary share held at that date, affecting the equivalent of a 10- for-1 stock split. Correspondingly, the nominal value of each outstanding share following the bonus issue has been adjusted to 1/10th of its value immediately preceding the share split. This is reflected in the 2015 comparatives provided. The fair value of the share options has been measured using the Black-Scholes formula. There are two different classes of grant with one vesting in equal instalments each year for 3 years on the grant anniversary and the other vesting in full on the third anniversary of the grant date. The weighted average of the inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment plan was as Page 50 follows: Grant Date Number of options Fair Value at grant date* Share price at grant date* Exercise price* Expected volatility* Risk-free interest rate* Expected option life * - weighted average 2016 Range 2015 Range 1,328,000 €1.596 €4.033 €3.131 33.4% 2.3% 3 - 4 years €0.821 to €4.310 €1.50 to €4.42 €0.001 to €4.429 33% to 36% 2% to 5% 1,030,000 €1.039 €1.500 €0.557 36.3% 5.0% 3 years €0.879 to €1.499 €0.001 to €0.750 Operating profit for the year ended 31 December 2016, is stated after charging €1,408,873 in respect of the Employee Share Option Program (2015: €932,710) in respect of non-cash stock compensation expense. b. Restricted Stock Share Plan On 16 March 2016 the Company adopted the Restricted Share Unit Plan pursuant to which the Remuneration Committee of the Company’s board of directors may make an award under the plan to certain executive directors. On 16 March 2016 an aggregate of 2,585,560 new shares of €0.001 each were issued to Goodbody Trustees Ltd as restricted stock units on behalf of certain directors, with a range of performance conditions attaching to their vesting. The shares were awarded at a price of €0.001 and vest over a service period as follows: Award Date 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 16 March 2016 Number of instruments Vesting Term Vesting condition 500,000 187,280 525,510 411,820 549,120 205,920 205,910 3 Years 3 Years 5 Years 3 Years 3 Years 3 Years 3 Years Continued employment Compliance with listing rules CAGR in TSR* CAGR in TSR* Recurring revenue growth targets Hospital beds targets Assisted living beds targets Total outstanding RSU’s 2,585,560 * Compound Annual Growth Rate in Total Shareholder Return The fair value of the CAGR in TSR awards is based on the Monte Carlo model using the following key assumptions: The expected life is 3 and 5 years. No dividends will be paid over the expected life of the restricted stock units. • • While testing threshold levels have only been set to date for the first testing period to 31 December 2017, it is assumed that these threshold testing levels shall remain constant for all future testing dates during the vesting period when threshold testing levels are set the value of grants will be revised. Threshold testing levels will be set by the Remuneration Committee on or before 31 December each year for the following year. A historic volatility approach has been assumed using comparable companies, 26.09%. The risk free rate has been sourced from the AUD swap rate curve, 3 years, 2.30% and for 5 years, 2.44%. The model has run 10,000 simulations. • • • The fair value of non-market performance conditions is based on the share price at the date of grant. This value is adjusted at each reporting period to reflect management’s estimate of the achievement of the relevant targets. Operating profit for the year ended 31 December 2016, is stated after charging €945,590 in respect of the Long term incentive plan (2015: €Nil) for non-cash stock compensation expense. Page 51 15. Share capital and other reserves – Group and Company Description Authorised Ordinary shares “B” Ordinary share capital Equity shares Issued share capital Balance at 1 January 2015 Share issue – November 2015 Redemption of B ordinary shares Exercise of options No of Shares Par value of units 2016 2015 € 100,000,000 €0.001 each 100,000 420,000 €0.01 each 4,200 104,200 € 100,000 4,200 104,200 No of shares Par value of units Share capital Share Premium Total € € € 29,747,460 €0.001 each 29,747 13,984,729 14,014,476 8,000,000 €0.001 each (4,200,000) €0.001 each 733,340 €0.001 each 8,000 (4,200) 734 11,822,112 11,830,112 - - (4,200) 734 Balance at 31 December 2015 34,280,800 €0.001 each 34,281 25,806,841 25,841,122 Share issue – 16 Mar 2016 Share issue – 17 Mar 2016 Transfer to retained earnings Balance at 31 December 2016 2,585,560 €0.001 each 2,586 - 2,586 17,430,340 €0.001 each 17,430 40,656,328 40,673,758 - - - 169,888 169,888 54,296,700 €0.001 each 54,297 66,633,057 66,687,354 All of the share information reflects the bonus share issue as a result of the 10 to 1 split which was approved on 17 February 2016. On 4 November 2015, the Company issued 800,000 new shares of €0.01 each at a price per share of €15.00. The Company incurred costs of €169,888 associated with the raising of these funds, which has been recorded against retained earnings. On 18 December 2015, the Company redeemed 420,000 "B" Ordinary shares of €0.01 each. These shares were redeemed at par value. An ‘Other undenominated capital’ account was created upon redemption. On 31 December 2015, 73,334 ordinary shares were issued in respect of 73,334 outstanding share options that were exercised as at that date at a strike price of €0.01 per share. On 17 February 2016, the Company’s shareholders approved a bonus issue of ordinary shares to ordinary shareholders as of that date. The bonus issue provided for each shareholder to receive 9 bonus ordinary shares for each ordinary share held as at that date, affecting the equivalent of a 10-for-1 stock split. Correspondingly, the nominal value of each outstanding share following the bonus issue has been adjusted to 1/10 of its value immediately preceding the share split. On 16 March 2016, the Company issued 2,585,560 new shares of €0.001 each at a price per share of €0.001. These shares are held by Goodbody Trustees Ltd as restricted stock units on behalf of certain directors, with performance conditions attaching to their vesting. These are treated as treasury shares. On 17 March 2016, the Company listed on the Australian Stock Exchange and issued 17,430,340 new shares of €0.001 each at an IPO price per share of A$3.58. The Company incurred costs of €3,126,000 associated with raising these funds of which €2,382,681 has been offset against retained earnings and €617,319 against the profit and loss for the period (year to 31 December 2015 €126,000). Page 52 Ordinary shares The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. On winding up the holders of ordinary shares shall be entitled to receive the nominal value in respect of each ordinary share held together with any residual value of the entity. The holders of B ordinary shares are not entitled to receive dividends as declared and are not entitled to vote at meetings of the Company; however, they are entitled to attend all meetings. On winding up the holders of B ordinary shares shall be entitled to receive the nominal value in respect of each B ordinary share held. Treasury reserve The reserve for the Company’s shares comprises the cost of the Company’s shares held by the Group. At 31 December 2016, the Group held 2,585,560 of the Company’s shares (2015: nil). Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations. 16. Capital and other commitments – Group and Company There are no capital commitments at the current or prior year end. 17. Leasing commitments At 31 December, the future minimum lease payments under non-cancellable leases were as follows: Less than one year Between two and five years Closing balance Group Company 2016 2015 2016 2015 € € 439,857 1,458,924 1,898,781 245,415 711,310 956,725 € - - - € - - - The Group leases a number of office facilities under operating leases. 18. Cash flow reconciliation for the year ended 31 December 2016 Page 53 Consolidated Reconciliation of net cash used in operating activities with loss for the year after income tax Non-cash items Depreciation Amortisation of software and development costs R&D credit recognised Net finance costs Share based payment expense Foreign exchange (gain)/loss Changes in assets and liabilities Increase in trade and other receivables Increase in trade and other payables Net cash used in operating activities Company Reconciliation of net cash used in operating activities with gain/(loss) for the year after income tax Non-cash items Share based payment expense Foreign exchange (gain)/loss Changes in assets and liabilities Increase in trade and other receivables Increase in non-current loan to Group company (Decrease)/increase in trade and other payables Net cash used in operating activities 2016 2015 € € (16,029,822) (9,797,869) 138,884 367,474 18,400 25,908 2,354,463 (2,651,059) 60,416 1,137,008 - 19,088 932,710 134,944 (2,400,269) 947,855 (17,228,166) (331,893) 2,413,995 (5,431,601) 2016 2015 € € 1,006,203 (154,327) 218,785 (3,120,574) 342 - (11,677,163) (7,657,036) (92,219) (7,436,040) - 213,031 (21,322,004) (7,376,994) Page 54 19. Financial instruments In terms, of financial risks, the Group has exposure to credit risk, liquidity risk and foreign currency risk. This note presents information about the Group’s exposure to each of the above risks together with the Group’s objectives, policies and processes for measuring and managing those risks. The board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to the limits. Risk management systems and policies will be reviewed regularly as the Group expands its activities and resource base to take account of changing conditions. Credit risk The Group’s exposure to significant credit risk relates to cash on deposit and trade receivables (note 11). The Group maintained its cash balances with its principal financial institution throughout the periods covered by this financial information. The Group held cash and cash equivalents of €35.1 million at 31 December 2016 (2015: €12.7 million). The cash and cash equivalents are held with bank and financial institution counterparties, which are AA- based on Moody’s rating agency ratings. Liquidity risk The principal operating cash requirements of the Group include payment of salaries, suppliers, office rents and travel expenditures. The Group primarily finances its operations and growth through the issuance of ordinary shares. The Group’s primary objectives in managing its liquid and capital resources are as follows: • • • to maintain adequate resources to fund its continued operations, to ensure availability of sufficient resources to sustain future development and growth of the business, to maintain sufficient resources to mitigate risks and unforeseen events which may arise. The Group manages risks associated with liquid and capital resources through ongoing monitoring of actual and forecast cash balances and by reviewing the existing and future cash requirements of the business. The following table sets out details of the maturity of the Group’s financial liabilities into the relevant maturity groupings based on the remaining period from the financial year end date to contractual maturity date: Group Year ended 31 December 2016 Carrying amount Contractual cashflows 6 months or less 6-12 months 1-2 years 2-5 years More than 5 years Trade and other payables (3,080,673) (3,080,673) (3,080,673) € € € € - Year ended 31 December 2015 Carrying amount Contractual cashflows 6 months or less 6-12 months 1-2 years € € € € Trade and other payables (1,761,068) (1,761,068) (1,761,068) € - € - € - € - 2-5 years More than 5 years € - € - Page 55 Company Year ended 31 December 2016 Carrying amount Contractual cashflows 6 months or less 6-12 months 1-2 years 2-5 years More than 5 years Trade and other payables (156,765) (156,765) (156,765) € € € € - € - € - € - Year ended 31 December 2015 Carrying amount Contractual cashflows 6 months or less 6-12 months 1-2 years 2-5 years More than 5 years Trade and other payables (248,696) (248,696) (248,696) € € € € - € - € - € - Currency risk Group Exposure to currency risk The table below shows the Group’s currency exposure. The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated and the respective functional currencies of Group companies. The functional currencies of Group companies are primarily euro, US dollars and Australian dollars. The following table sets out the Group’s transaction risk in relation to financial assets and liabilities at 31 December 2016: Cash and cash equivalents Trade and other payables Total transaction risk U.S. Dollar 2016 € 14,092,100 (33,425) 14,058,675 Australian Dollar 2016 AED 2016 € 668,547 (4,462) 664,085 € - - - Foreign exchange gains and losses recognised on the above balances are recorded in “finance income”. The total foreign exchange gain reported during the year ending 31 December 2016 amounted to €2,651,059 (2015: loss of €134,944). The following table sets out the Group’s transaction risk in relation to financial assets and liabilities at 31 December 2015: Cash and cash equivalents Trade and other payables Total transaction risk U.S. Dollar 2015 € 936,869 (244,099) Australian Dollar 2015 € 1,204,319 (167,638) 692,770 1,036,681 AED 2015 € 6,560 (15,218) (8,658) Page 56 AED 2016 € - - - - AED 2015 € - - The following table sets out the Company’s transaction risk in relation to financial assets and liabilities at 31 December 2016: Cash and cash equivalents Loan to Group company Trade and other payables Total transaction risk U.S. Australian Dollar Dollar 2016 2016 € € 13,395,630 7,657,036 - 21,052,666 586,010 - (4,462) 581,548 The following table sets out the Company’s transaction risk in relation to financial assets and liabilities at 31 December 2015: U.S. Australian Dollar Dollar 2015 2015 € 170,022 170,022 € 1,850 1,850 Average Rate Closing Rate 2016 1.1062 1.4876 4.0622 2015 1.1032 1.4795 4.0511 2016 1.0536 1.4579 3.8688 2015 1.0925 1.4989 4.0117 Cash and cash equivalents Total transaction risk The following significant exchange rates applied during the year: euro 1: $ euro 1: AS $ euro 1: AED Foreign currency sensitivity analysis A 10% weakening of the euro against the above currencies at year end would decrease the Group’s reported loss for the year and increase the Group’s reported equity by approximately €1,635,882 (2015: reduce loss by €191,199). A 10% appreciation of the euro against the above currencies at year end would increase the Group’s reported loss for the year and reduce the Group’s reported equity by approximately €1,338,449 (2015: increase loss by €156,436). Page 57 Group The fair values of financial assets and liabilities by class and category, together with their carrying amounts shown in the statement of financial position, are as follows: Financial assets Cash and cash equivalents Trade and other receivables Loan to director Financial liabilities Trade and other payables 31 December 2016 31 December 2015 Carrying amount Fair value Carrying amount Fair value € € € € 35,087,776 4,449,210 252,469 39,789,455 35,087,776 4,449,210 252,469 39,789,455 12,771,128 2,051,662 - 12,771,128 2,051,662 - 14,822,790 14,822,790 (3,080,673) (3,080,673) (1,761,068) (1,761,068) For cash and cash equivalents, the nominal amount is deemed to reflect fair value. For receivables and payables, the carrying value is deemed to reflect fair value, where appropriate. Company Financial assets Cash and cash equivalents Amounts due from subsidiaries Amounts due from Oneview Limited Trade and other receivables Loans to Director Loan to Group company Financial liabilities Amounts due to subsidiaries Trade and other payables 31 December 2016 31 December 2015 Carrying amount Fair value Carrying amount Fair value € € € € 29,625,547 26,786,036 500,399 228,150 252,469 7,657,036 65,049,637 29,625,547 26,786,036 500,399 228,150 252,469 7,657,036 65,049,637 10,571,932 10,571,932 14,450,267 14,450,267 500,399 103,578 - - 500,399 103,578 - - 25,626,176 25,626,176 31 December 2016 31 December 2015 Carrying amount Fair value Carrying amount Fair value € € € € (355) (156,410) (156,765) (355) (156,410) (156,765) (288) (248,696) (248,984) (288) (248,696) (248,984) For cash, cash equivalents and payables, the carrying value is deemed to reflect fair value, where appropriate. For amounts due from / due to subsidiaries the carrying value is deemed to be fair value as the amounts are repayable on demand. For amounts due from Oneview Limited the carrying value is deemed to be fair value as the loans are available for repayment at year end, or shortly thereafter. The loan to Group company has a maturity of April 2018, however, as the loan was issued in December 2016 the fair value has been deemed to be the same as the carrying amount. Page 58 20. Related party transactions The Company considers directors and Group undertakings as set out in note 10 as being related parties. Transactions with directors are disclosed in the table below. The current directors are as set out on page 1. The directors held the following interests at: Name Name of company Interest at 31 December 2016 Interest at 31 December 2015 * James Osborne Oneview Healthcare PLC Ordinary shares €0.001 375,590 100,000 375,590 100,000 Number of shares Options Number of shares Options Mark McCloskey Oneview Healthcare PLC Ordinary shares €0.001 Restricted Stock Units 6,003,478 583,330 5,997,890 783,330 989,340 - - - James Fitter Oneview Healthcare PLC Ordinary shares €0.001 Restricted Stock Units John Kelly Oneview Healthcare PLC Ordinary shares €0.001 Restricted Stock Units Patrick Masterson Oneview Healthcare PLC 969,530 1,308,940 49,480 287,280 733,330 969,530 933,330 - - - 300,000 49,480 400,000 - - - James William Vicars Oneview Healthcare PLC Ordinary shares €0.001 36,700 350,000 36,700 350,000 Ordinary shares €0.001 8,231,251 50,000 6,981,100 50,000 OV No.1 Pty Ltd (Note 1) Oneview Healthcare PLC Ordinary shares €0.001 1,521,660 - 1,521,660 - Daniel Petre Oneview Healthcare PLC Ordinary shares €0.001 446,635 90,000 390,770 90,000 Mark Cullen Oneview Healthcare PLC Ordinary shares €0.001 1,145,770 50,000 1,145,770 50,000 Joseph Rooney Oneview Healthcare PLC Ordinary shares €0.001 381,920 50,000 381,920 Christina Boyce Oneview Healthcare PLC Ordinary shares €0.001 27,933 50,000 Lyle Berkowitz Oneview Healthcare PLC Ordinary shares €0.001 - - - - - - - *Or date of appointment if later and after reflecting the bonus issue. Note 1: James William Vicars and Mark McCloskey (and their families) are the beneficiaries of the OVNo.1 Pty Ltd (ATF the OV Trust). James William Vicars and Mark McCloskey are the directors of the trustee of discretionary trust and James William Vicars is the sole shareholder of the trustee. At 31 December 2015, these interests were reported as split evenly between both beneficiaries. The interests of directors include the interests held by the parents or children of directors in accordance with the requirements of the Australian Corporations Act (“ASX”). The table below reconciles those interests back to the Irish Companies Act requirement disclosure: James Osborne James Fitter John Kelly 31 December 2016 31 December 2015 Irish ASX Irish ASX 342,250 2,248,470 326,760 375,590 2,278,470 336,760 342,250 939,530 39,480 375,590 969,530 49,480 Page 59 In accordance with the Articles of Association at least one third of the directors are required to retire annually by rotation. No other members of management are considered key. Unless otherwise stated all transactions between related parties are carried out on an arm’s length basis. On 17 February 2016, the Company’s shareholders approved a bonus issue of ordinary shares to ordinary shareholders as at that date. The bonus issue provided for each shareholder to receive 9 bonus ordinary shares for each ordinary share held as at that date, affecting the equivalent of a 10-for-1 stock split. Correspondingly, the nominal value of each outstanding share following the bonus issue has been adjusted to 1/10 of its value immediately preceding the share split. The share split has likewise been applied to all outstanding share options in issue with the corresponding period being restated accordingly. Directors interest at 31 December 2015 have been restated for illustration purposes to reflect the 10-for-1 stock split had it happened prior to that date. During 2016 “OHP” advanced an unsecured loan to a director, John Kelly, on an interest free basis for €252,469 in order to settle upfront tax charges associated with the issue of restricted shares under the long term incentive plan “LTIP”. The loan is repayable on demand in the event of disposal of restricted shares under the LTIP upon lifting of the relevant restrictions attached to shares. To calculate the notional interest on this loan the director believes an interest rate of 5% and a term of 2.25 years (being the term from grant of loan to vesting of shares) is appropriate. This equates to notional interest of €28,403 over the term which is considered directors’ remuneration, and is in addition to the amounts disclosed in note 4. The loan value represents 0.4% of net assets of Oneview Healthcare PLC (the Company). The Group has availed of the exemption available in IAS 24 Related Party Disclosures from the requirement to disclose details of transactions with related party undertakings where those parties are 100 per cent members of the Group. 21. Auditors Remuneration Auditors Remuneration Audit fees Other assurance fees Tax fees Other non – audit assurance services* * - Fees include IPO related activity Year ended 31 December 2016 Year ended 31 December 2015 Group Auditor Affiliated Firms Total Group Auditor Affiliated Firms Total € 110,000 € - € € 110,000 50,000 6,000 23,544 29,544 152,000 43,824 195,824 106,500 106,500 213,000 4,000 8,800 - € - 23,544 - - € 50,000 27,544 8,800 - 374,500 173,868 548,368 62,800 23,544 86,344 Audit fees for the Company for the year is included in the amount above, and is set at €10,000 (2015: €7,000). 22. Subsequent events There were no post balance sheet events that would require disclosure or adjustment to the financial statements. 23. Approval of financial statements The financial statements were approved by the board on 27 Februrary 2017. Page 60 Additional ASX Info Shareholder Information As of 17 March 2017, the issued share capital of Oneview Healthcare PLC consists of 54,296,700 ordinary shares of €0.001 each held by 501 security holders. These shares are held by CHESS Depositary Nominees Pty Ltd (CDN), quoted on the ASX in the form of CHESS Depositary Interests (CDIs) and held by 501 CDI holders. The top 20 security holders held 42,139,007 CDIs comprising 77.6% of the issued capital. The Company’s ASX issuer code is ONE. At a general meeting of the Company, every holder of CDIs is entitled to vote in person or by proxy or attorney, or in the case of a body corporate, its duly authorised representative, and on a show of hands every person present who is a member has one vote, and on a poll every person present in person or by proxy or attorney or duly authorise representative has one vote for each CDI held by that person, except that in the case of partly paid CDIs the voting rights of a CDI holder are pro rata to the proportion of the total issued price paid up (not credited) on the CDIs. Distribution of CDI holdings Range 1 - 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total No of holders No of CDI’s % of issued capital 142 158 53 100 48 501 67,444 380,714 385,745 3,022,500 50,440,297 54,296,700 0.1% 0.7% 0.7% 5.6% 92.9% 100% There were 11 shareholders, with a total of 185 shares, holding less than a marketable parcel under the ASX listing rules. The ASX listing rules define a marketable parcel of shares as “a parcel of not less than A$500”. Twenty largest holders of CDI securities Rank Holder No of CDI’s % of issued capital Page 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Mark McCloskey HSBC Custody Nominees (Australia) Ltd Manderrah Pty Ltd RBC Investor Services Australia Nominees Pty Ltd Goodbody Trustees Ltd HSBC Custody Nominees (Australia) Ltd - A/C 2 BNP Paribas Nominees Pty Ltd UBS Nominees Pty Ltd Citicorp Nominees Pty Ltd Cicerone Pty Ltd OV No.1 Pty Ltd J P Morgan Nominees Australia Ltd Golden Growth Ltd Freshwater Superannuation Pty Ltd CJH Holdings Pty Ltd CJH Holdings Pty James Fitter Mr Peter Langley Faulkner Patrick O'Sullivan 20 SCF Investment Holdings Ltd Top 20 holders of CDIs Total remaining holders Total CDIs on issue Substantial shareholders 5,997,890 5,957,677 3,831,480 2,915,800 2,585,560 2,576,403 2,395,026 2,138,694 1,660,192 1,574,120 1,521,660 1,507,413 1,145,770 1,130,320 1,052,900 966,410 931,030 794,932 728,480 727,250 42,139,007 12,157,693 54,296,700 11.1% 11.0% 7.1 % 5.4% 4.8% 4.8% 4.4% 3.9% 3.1% 2.9% 2.8% 2.8% 2.1% 2.1% 1.9% 1.8% 1.7% 1.5% 1.3% 1.3% 77.6% 22.4% 100% As of 17 March 2017, there were 4 shareholders who held a substantial shareholding within the meaning of the Australian Corporations Act. A person has a substantial holding if the total votes they or their associates have relevant interests in is 5% or more of the total number of votes. Range James William Vicars Mark McCloskey OV No.1 Pty Ltd (ATF the OV Trust) (Note 1) Wilson Asset Management Group Total No of CDI’s % of issued capital 8,381,251 6,992,818 1,521,660 3,054,596 19,950,325 15.4% 12.9% 2.8% 5.6% 36.7% Note 1: James William Vicars and Mark McCloskey (and their families) are the beneficiaries of the OVNo.1 Pty Ltd (ATF the OV Trust). James William Vicars and Mark McCloskey are the directors of the trustee of discretionary trust and James William Vicars is the sole shareholder of the trustee. Securities subject to voluntary escrow The following securities are subject to voluntary escrow following the Company’s listing on 17 March 2016: Page 62 Description Fully paid ordinary €0.001 securities – escrowed to 16 March 2018 Options – strike price €0.001 – vested 8/10/14 – escrowed to 16 March 2018 Options – strike price €0.001 – vested 8/10/15 – escrowed to 16 March 2018 Options – strike price €0.001 – vested 8/10/16 – escrowed to 16 March 2018 Options – strike price €0.001 – vesting 31/12/17 – escrowed to 16 March 2018 Options – strike price €1.233 – vesting 31/12/17 – escrowed to 16 March 2018 Options – strike price €0.001 – vesting 31/12/18 – escrowed to 16 March 2018 Options – strike price €0.75 – vesting 31/12/18 – escrowed to 16 March 2018 Options – strike price €0.001 – vesting 10/2/19 – escrowed to 16 March 2018 On market buyback The Company is not currently conducting an on market buyback. Securities purchase on-market Number on issue 1,220,848 1,220,848 100,000 100,000 466,660 1,250,000 40,000 250,000 100,000 50,000 2,356,660 No securities were purchased on-market in the period from listing on 17 March 2016 under or for the purpose of an employee incentive scheme or to satisfy the entitlements of holders of options or other rights to acquire securities granted under an employee incentive scheme. Shareholder information The name of the Company Secretary is Patrick Masterson. The address of the registered office is in Ireland at Block 1, Blackrock Business Park, Blackrock, Co Dublin, Ireland. Our principal business address in Australia is Level 5, 75 Miller Street, North Sydney, NSW 2060. The Company is listed on the Australian Securities Exchange. Registers of securities are held by Computershare Investor Services Pty Ltd, Level 4, 60 Carrington Street, Sydney, NSW 2001, Australia. Their local call number is 1300 850 505 with international call being +61 3 9415 4000. Appendix: Risks (Unaudited) Page 63 A. Specific risks Oneview operates in a competitive industry Oneview's operating performance influenced by a number of competitive factors including the success and awareness of its brand, its sophisticated technology and its commitment to ongoing product innovation. is The industry in which Oneview operates, both within Australia, the U.S. and the U.A.E., and globally, is subject to increasing domestic and global competition and any change in the foregoing competitive factors, or others, may impact Oneview's ability to execute its growth strategy. As such, there is a risk that: • • • increase • Oneview may fail to anticipate and adapt to technology changes or client expectations at the same rate as its competitors; existing competitors could their competitive position through aggressive marketing, product innovation or price discounting; existing or new competitors could offer software with less functionality but at a more competitive price, which may affect Oneview’s ability to sustain or increase prices; customers who currently utilise current Patient Engagement Solutions systems offered by existing competitors (including local operators in specific markets or those with a greater market share in certain markets), which have often been in place for a considerable period of time or have onerous termination clauses, may determine that it is prohibitively costly and/or time consuming to adopt the Oneview Solution; new competitors, including large global Electronic Health Records “EHR” corporations or large software vendors operating in adjacent industries, enter the market - these corporations may have well recognised brands, longer operating histories or pre-existing contract relationships, or greater financial and other resources to apply to R&D and sales marketing, which may make them able to expand in the Patient Engagement Solutions industry more aggressively than Oneview and/or better withstand any downturns in the market. • Failure to protect intellectual property Oneview relies on its intellectual property rights and there is a risk that Oneview may fail to protect its rights for a number of reasons. Oneview has historically used a mixture of legal (e.g. confidentiality agreements and code of conduct agreements) and technical (e.g. data encryption) methods to protect its intellectual property. As Oneview grows and spreads out geographically, there is a risk that these actions may not be adequate and may not prevent the misappropriation of its intellectual property or deter independent development of similar products by others. If Oneview fails to protect its intellectual property rights adequately, competitors may gain access to its technology which would in turn harm its business, financial performance and operations. Risk that the Oneview Solution is disrupted, fails or ceases to function efficiently Oneview depends on the performance and reliability of its technology platform. There is a risk that the Oneview Solution contains defects or errors, which become evident when the software is implemented for new customers or new versions or enhancements are rolled out to existing customers, which could harm Oneview’s reputation and its ability to generate new business. Further, Oneview typically warrants its software for the life of the customer contract so defects in existing or future developed products and services may lead to warranty claims by customers which could have a material adverse effect on Oneview's financial performance. Failure to retain existing customers and attract new business Oneview's business is dependent on its ability to retain its existing customers and attract new customers. There is a risk that existing Oneview customers terminate their contracts without cause on short notice and without financial penalty or do not renew their contracts when the initial contract term comes to an end (generally 3 to 5 years after commencement). There is also a risk of delay or cancellation of projects that Oneview successfully for and/or termination of customer contracts that Oneview has entered into but not yet commenced implementing. If this was to occur in relation to a number of different new customer relationships, it would have a negative impact on Oneview's successful implementation of its business strategy, having an adverse impact on its business, financial performance and operations. tendered Page 64 target markets implement healthcare policy changes that have an effect on Oneview's business and, whilst such changes can create opportunities for Oneview, there is also potential for these changes to favour competitor offerings or to require Oneview to re- engineer its products. There is also a risk that government policy changes result in a reduction in healthcare funding, including specific funding for Healthcare Information Technologies “HCIT” initiatives. If funding is reduced or discontinued, this could influence the extent to which customers purchase the Oneview Solution, which would have an unfavourable impact on Oneview's future financial performance. For example, there is a risk that macroeconomic factors, such as the current low price of oil in the Middle East, could have an effect on public spending policies in the U.A.E which could, in turn, impact public spending on Patient Engagement Solutions, impeding Oneview's ability to execute its growth strategy and expand its presence in the U.A.E. Issues associated with implementation, installation and hardware procurement services Customers have frequently required Oneview to contract with third party suppliers to source and install the appropriate hardware to operate the Oneview Solution. There is a risk that Oneview is required to fund the hardware procurement costs where it is unable to negotiate preferential payment terms with its customers or alternatively encourage its customers to enter into direct contracts with third party hardware providers. A requirement to fund hardware procurement costs has an initial negative cash-flow impact and any interruptions in the timing for hardware installation can result in further delayed realisation of cash flows. Oneview's reliance on third parties to deliver and support its products also exposes it to risks where those third party suppliers do not satisfy their obligations in accordance with their contract with Oneview. For example, where the product delivered and installed by a third party hardware provider does not match contracted requirements, this can lead to disruptions in the implementation process, operational or business delays, damage to Oneview’s reputation, claims against Oneview by its customers and potential customer disputes and/or the eventual termination of customer contracts. Oneview’s third party technology supplier contracts may also not entitle the Company to recover all of the losses it may suffer. Reliance on attracting and retaining skilled personnel Oneview is reliant on the talent, effort, expertise, industry experience and contacts, and leadership of its Management. Whilst Oneview has entered into employment contracts with all Management personnel, their retention cannot be guaranteed, and the loss of any senior members of management and the inability to recruit suitable replacements represents a material risk to Oneview, which may have a material impact on its business, financial performance and operations. There is also a risk that, as Oneview grows, it cannot attract and retain personnel with the necessary industry experience, expertise and ability to execute its strategy, such that its future growth may be restricted and the quality of its services and revenues reduced, with a corresponding adverse impact on its business, financial performance and operations. Failure to successfully implement its business strategy Oneview is an early stage company with limited trading history. There is a risk that Oneview's business strategy or any of its growth initiatives will not be successfully implemented, deliver the expected returns or ultimately be profitable. if implementation Implementing the Oneview Solution for a large number of new customers will test the business' execution capabilities. If Oneview is unable to successfully implement the Oneview Solution for new customers, is unexpectedly delayed or or implementation costs overrun, Oneview may not generate the financial returns it intends. There is also a risk that Oneview is unable to scale fast enough to secure and implement all the opportunities that may present themselves in the future. Growth into new markets may be inhibited by unforeseen issues particular to a territory or sector, including the need to invest significant resources and management attention to the expansion, and the possibility that the desired level of return on its business will not be achieved. Public healthcare funding and other regulatory changes Oneview’s business plan and strategy has been formulated based on prevailing healthcare policy in its current target markets (i.e. the U.S, Australia and the U.A.E). It is possible that governments in Oneview's Page 65 U.A.E operations are denominated in Australian dollars, U.S. dollars and U.A.E. dirham, respectively. Oneview is therefore exposed to the risk of fluctuations in the euro against those currencies, and adverse fluctuations in exchange rates may negatively impact the translation of account balances and profitability from these offshore operations. B. General risks Economic and government risks The future viability of the Company is also dependent on a number of other factors affecting performance of all industries and not just the technology industry, including, but not limited to, the following: • general economic conditions in jurisdictions in which the Company operates; changes in government policies, taxation and other laws in jurisdictions in which the Company operates; the strength of the equity and share markets in Australia and throughout the world, and in particular investor sentiment towards the technology sector; • • • movement in, or outlook on, interest rates and inflation rates in jurisdictions in which the Company operates; and natural disasters, social upheaval or war jurisdictions in which the Company operates. in • Ability to access debt and equity markets on attractive terms In the future, Oneview could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and a failure to raise capital when needed could harm Oneview's business. If Oneview cannot raise funds on acceptable terms, it may not be able to grow its business or respond to competitive pressures. Reliance on its core product and failure to develop new products Oneview derives all of its revenue from the sale and associated installation of the Oneview Solution and relies on its ability to develop new products, features and enhancements to the Oneview Solution. There is a risk that upgrading the Oneview Solution or introducing new products, such as the Digital Care Management Platform may result in unforeseen costs, may fail to achieve anticipated revenue or may not achieve the intended outcomes. A failure by Oneview to develop successful new products, features and enhancements to the Oneview Solution would have an adverse impact on its ability to develop customer relationships and maintain current relationships. Loss or theft of data and failure of data security systems There is a risk that the Oneview Solution is the subject of a cyber-attack which could compromise or even breach the technology rendering the Oneview Solution unavailable for a period until the software is restored and / or resulting in the loss, theft or corruption of sensitive data (including patient's data). The effect of such a cyber-attack could extend to claims by patients, reputational damage. Such circumstances could negatively impact upon Oneview’s business, financial performance and operations. Market adoption of Patient Engagement Solutions If the Company’s Patient Engagement Solutions platform is not widely accepted for use by healthcare providers, including as a result of the Company's failure to prove return on investment, or if the market for Patient Engagement Solutions in the healthcare industry fails to grow at the expected rate, demand for the Oneview Solution could be negatively impacted and the Company’s ability to sustain and grow its business may be adversely affected. Exchange rate risk for international operations Oneview's financial reports are prepared in euros. However, revenue, expenditure and cashflows, and assets and liabilities from Oneview’s Australian, U.S. and United States Chicago +1 312 763 6800 Ireland Dublin +353 1 524 1677 Middle East Dubai +971 4 399 8399 Australia Sydney +61 2 9922 2720 oneviewhealthcare.com We see a better way.

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