Analytica Limited
Annual Report
For the Year Ended 30 June 2011
Analytica Limited
For the Year Ended 30 June 2011
CONTENTS
Chairman’s Letter
Consolidated Financial Statements
Directors' Report
Corporate Governance Statement
Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
Consolidated Statement of Comprehensive Income
Consolidated Income Statement
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor’s Report
Additional Information for Listed Public Companies
Page
1
3
13
19
20
21
22
23
24
25
61
62
64
Analytica Limited
For the Year Ended 30 June 2011
Chairman’s Letter
Dear Shareholder,
I am pleased to present you with Analytica Limited’s Annual Report for the year ended 30 June 2011.
The 12 months through to 30 June 2011 have presented your company with a number of challenges and have
seen a number of significant milestones being met.
Because of the size of our company and the intention to keep overheads to a bare minimum, Analytica's board
of directors plays an active role in the day to day operations of your company, and I can assure shareholders
that their funds are being applied wisely.
As you will read elsewhere in this report, the main focus of activities during the year has been on the
commercialisation of our Burette products as follows:
• we have brought to the Australian market a product which represents the first major advance in burette
technology for several decades;
• we are working with government bureaucracies;
• we are competing against major suppliers with established relationships in both the public and private
healthcare sector.
While we believe that our product is head and shoulders above anything that our competing suppliers have to
offer, the task we are undertaking is by no means an easy one. In spite of this, Analytica Limited and Medical
Australia Limited (MLA) announced in May 2011 that the first order has been completed for NSW Ambulance
Service. The NSW Ambulance Service, the third largest ambulance service in the world, with 800 ambulances,
300 support vehicles, four fixed wing aircraft and task nine helicopters, has placed an ongoing order for the
AutoStart® Burette. Our AutoStart Burettes (instead of the standard burette) are now carried by all
ambulances across the state of New South Wales.
Analytica Limited and Medical Australia Limited also announced in July 2011, that Concord Repatriation
Hospital has placed an order for the AutoStart® Burette, with forecast sales revenue upward of $500,000 per
annum.
Concord Repatriation Hospital is a teaching hospital of Sydney Medical School at the University of Sydney and
is a major hospital in Sydney offering a comprehensive range of specialty and sub-specialty services, many
recognized nationally and internationally as centres of excellence. Their order for the AutoStart® Burette was
made following an extensive 6 month clinical evaluation of the safety and time saving features of the
AutoStart® Burette and has resulted in their most substantial change in intravenous practices in 16 years. The
hospital-wide usage of our AutoStart® Burette in Concord Repatriation Hospital is expect to flow through to
other major hospitals in New South Wales once supply issues have been addressed by MLA. The ramp up of
the manufacturing is now occurring in China, overseen by MLA engineers with the help and guidance of our
engineers headed by Mr Geoff Daly.
Another significant milestone will be the imminent release of Medical Australia Limited’s range of burettes with
our Autoflush feature. This Autoflush feature will be standard on the entire Tuta range of burettes sold in
Australia and New Zealand.
As previously announced to the Australian Securities Exchange, our AutoFlush Burettes are currently being
evaluated by major multinationals. Your board is hopeful that these evaluations will lead to the entry of our
burette products into the North American and European markets in the near future.
1
Analytica Limited
For the Year Ended 30 June 2011
Chairman’s Letter
Although the AutoStart® and Autoflush Burette are our lead products, we do not anticipate further major
development in this field. Analytica has expertise as a medical device developer, and the directors
determined that, to consolidate the future of the company, further products need to be developed. Our
engineering resources are now focused on a perineometer system to improve women's motivation to perform
the pelvic floor exercises proven to reduce the effects of stress urinary incontinence.
The aim of Pelvic Floor or "Kegel" exercises is to improve muscle tone by strengthening the pubococcygeus
muscles. Kegel is a popular prescribed exercise for pregnant women to prepare the pelvic floor for physiological
stresses of the later stages of pregnancy and vaginal childbirth. Kegel exercises are also a treatment for vaginal
prolapse and preventing uterine prolapse in women.
Analytica's perineometer is a device which provides real-time feedback and encouragement for the patient during
their pelvic floor exercise routines, and provides documentary feedback for their clinicians. Development has
progressed with a working concept prototype, and completion of production-representative samples for clinical
trials and validation is imminent.
Extensive work has been carried out on the device design and electronics, as well as the smartphone software
used to manage the training. Early feedback from key professionals in the industry has already demonstrated
that the patent pending features of this new device will offer a never before seen advantage in diagnosing
and treating patients, and there is great anticipation for further development of the project.
Market research has confirmed there is a substantial market which is currently unsatisfied. In fact 1 in 3 women
is likely to experience the disease. The budget of $3 million over the next 6 quarters includes the development
of the device, manufacturing facility commissioning, quality system setup and approvals, trials and regulatory
approvals, server database management, and detailed marketing preparations. It is anticipated the system will
be launched in the 1st quarter of 2013.
Your company is currently also looking at licensing further new products which will complement Analytica’s
existing skill set. This strategy is about providing a long-term future for Analytica and one that will see value
returned to shareholders.
With the partnership of Medical Australia Limited, the imminent release of their range of burettes with our flush
feature, the penetration of our AutoStart®Burette into the NSW Health market, and the ramp up of the
production of the AutoStart® Burette with the possible entry of our burettes into overseas markets, we are
optimistic for the coming year.
Thank you once again to you, the valued shareholders, for your ongoing support of the Company. I look forward
to bringing you positive news throughout the 2011/12 year.
Yours sincerely
Dr Michael Monsour
Chairman
2
Analytica Limited
Directors' Report
30 June 2011
Your Directors present their report, together with the statement of the consolidated group, being the
Company and its controlled entities, for the financial year ended 30 June 2011.
1. General information
Directors
The names of the Directors in office at any time during, or since the end of, the year are:
Position
Names
Chairman
Dr Michael Monsour
Non-Executive Director
Mr. David Gooch
Executive Director
Mr. Ross Mangelsdorf
Non-Executive Director
Mr. Warren Brooks
Appointed/Resigned
Resigned 25 July 2011
Appointed 25 July 2011
Directors have been in office since the start of the financial year to the date of this report unless otherwise
stated.
Principal Activities
The principal activities of the consolidated group during the financial year were:
• The development of intellectual property in the medical device field in relation to patents in the burette
field;
• The development of strategies for commercial sales of burette product;
• The development of intellectual property of medical device in relation to patents and systems in the
pelvic floor exercise field;
• Development of intellectual property for manufacture and delivery of Naltrexone implants.
No significant change in the nature of these activities occurred during the year.
2. Operating Results and Review of Operations for the Year
Operating Results
The consolidated loss of the consolidated group for the financial year after providing for income tax and
eliminating minority equity interests amounted to $(203,176). This represented an 84% decrease on the
results reported for the year ended 30 June 2010 ($1,287,837).
Dividends Paid or Recommended
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
Review of Operations
Analytica Limited appointed Medical Australia Limited to manufacture, distribute and market the AutoStart®
and AutoFlush Burette in April 2010, after signing a heads of agreement in November 2009. Our
engineering team have been working with Medical Australia Limited to facilitate the manufacturing of the
Burette.
3
Analytica Limited
Directors' Report
30 June 2011
2. Operating Results and Review of Operations for the Year continued
Analytica Limited and Medical Australia Limited announced in May 2011 that the first order has been
completed for NSW Ambulance Service. The NSW Ambulance Service, the third largest ambulance service
in the world, with 800 ambulances, 300 support vehicles, four fixed wing aircraft and task nine helicopters,
has placed an ongoing order for the AutoStart® Burette. These devices will be carried by ambulances
across the state.
Analytica Limited and Medical Australia Limited announced in July 2011, that Concord Repatriation
Hospital, a major hospital in Sydney, offering a comprehensive range of specialty and sub-specialty
services, many recognized nationally and internationally as centres of excellence, has placed an order with
forecast sales revenue upward of $500,000 per annum. Concord is a teaching hospital of Sydney Medical
School at the University of Sydney. This order, a result of an extensive 6 month clinical evaluation of the
safety and time saving features of the AutoStart® Burette, has resulted in their most substantial change in
IV practices in 16 years.
The Analytica AutoStart® Burette is a sterile, single use infusion device that provides automatic flow control
functionality not found in any other burette. The patented AutoStart® system automatically restarts the flow
from the infusion reservoir once a bolus dose of medication is delivered, allowing the clinician to attend to
other issues. The method of operation of the device reduces time, increasing safety, as well as permitting
features of newer infusion pumps to be able to be utilised.
It is estimated that the AutoStart® Burette frees 20 minutes of nurse time per patient per 24 hour period,
which means the device effectively pays for itself in nurse timesavings. In today’s under staffed hospitals,
time savings are critical to nurses, patients, and administrators alike.
Medical Australia is also incorporating Analytica's AutoFlush feature into their range of TUTA® burettes,
and this feature is gaining attention from global medical device suppliers. The flushing system allows the
needle-less injection port and the medication delivery syringe to be flushed with saline from the IV bag,
without the need for additional flushing syringes or ampoules, delivering substantial cost savings and
safety.
The final royalty of $27,000 and loan instalment of $30,000 were received from Vital Diagnostics Pty Ltd in
December 2010. This finalises the agreement negotiated in November 2004.
In April 2009, the Company made a strategic investment in CBio Ltd by purchasing a convertible note. In
February 2010 CBio Ltd listed and the note was required to be converted together with accrued interest
resulting in an issue of 1,044,712 shares. The note also carries options for 3,000,000 shares exercisable
before December 2012 for $1.00. The shares closed at 63 cents on the 30th June 2011 which resulted in a
fair value increase of $381,320 (after a fair value reduction in 2010 of $245,507). In July 2011 CBio Ltd
announced it has completed phase IIa of the clinical trial of its lead drug candidate XToll® in Rheumatoid
Arthritis (RA).
Our engineering team are making substantial progress with the development of the product to address
female incontinence. Development has progressed with a working prototype and the recent completion of
representative samples for clinical trials. Extensive work has been carried out on the mechanics of the
device and the design of the graphical user interface. Early feedback from professionals in the industry has
already demonstrated that this new device will offer a never before seen advantage in diagnosing and
treating patients, and there is great anticipation for further development of the project. Market research has
confirmed there is a substantial market which is currently unsatisfied.
Activity with the Naltrexone project has been restricted due to funding constraints and as a consequence
progress on the project has been limited to discussions with potential partners in development.
4
3. Other items
Significant Changes in State of Affairs
All significant changes in the state of affairs of the parent entity that occurred during the financial year are
discussed in the Review of Operations section of this report.
After balance date events
No matters or circumstances have arisen since the end of the financial year which significantly affected or
could significantly affect the operations of the consolidated group, the results of those operations or the
state of affairs of the consolidated group in future financial years.
Auditors Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2011 has been received and can
be found on page 17 of the financial report.
Future Developments
The Directors and management are focused on building the current business through the development and
commercialisation of similar businesses and technologies in the medical technology area that can take
advantage of our expertise and resources to optimise returns to shareholders.
The likely developments in the operations of the consolidated group and the expected results of those
operations in future financial years are as follows:
•
Introduction to the market by Medical Australia of their range of Burettes fitted with our Autoflush device;
• Appointment of specialist medical device distributors to distribute Analytica’s range of products in the
USA;
• Development of pelvic floor exercise device, interface and reporting and monitoring systems.
• Development of marketing and sales support systems for the pelvic floor exercise system.
• Development and implementation of the business plan supporting Naltrexone implants and delivery;
• Successful manufacture of Naltrexone implants suitable for clinical trials;
• Clinical trials using Naltrexone implants to treat alcohol and drug addicted patients;
• Application for North American (FDA) and European (CE Mark) regulatory approval;
• Continued development of ‘next generation’ products.
Environmental Issues
The Company's operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory.
5
Analytica Limited
Directors' Report
30 June 2011
Directors' Qualifications and Experience
Dr Michael Monsour
Chairman (appointed 28 June 2004)
Qualifications
MBBS-HONS, FACRRM, FAICD
Dr Michael Monsour is a member of the Audit and Risk Management
Committee.
Dr Michael Monsour is a Medical Practitioner with extensive interests in
Queensland medical and dental centres. Michael Monsour graduated from
the University of Queensland in 1977 in medicine with honours. He operates
a medical management Company, which provides management support to
medical and dental practitioners. He is the principal of Godbar Software
(established 1988) which is one of the leading software developers of
Occupational Health, Safety and Medical Accounting software packages in
Australia.
Dr Monsour is currently the chairman of InJet Digital Aerosols Limited and a
non-executive Director of CBio Limited (appointed 31 January 2007). He is
also a non-executive Director of Australian Technology Innovation Fund
Limited and Australia Bio fund Investment Limited (Hong Kong). Dr Monsour
was formerly a Director of the listed entity BresaGen Limited (July 2005 to
November 2006). Dr Monsour was appointed to the Audit and Risk
Management Committee subsequent to the balance date.
Directors’ interest in ordinary shares: 13,647,828
Directors’ interest in share options: 10,000,000
Mr. David Gooch
Non-Executive Director (resigned 25 July 2011)
Qualifications
FAICD
Experience
Mr Gooch is a well known Sydney businessman who has developed and
been instrumental in the steering to success of several small and medium
sized businesses’. Mr Gooch is now a corporate advisor and financial
management specialist who has had experience in industries including
construction, hospitality, retail and finance.
Interest in shares and
options
Director's interest in ordinary shares: Nil
Director's interest in share options: 10,000,000
6
Analytica Limited
Directors' Report
30 June 2011
Mr. Ross Mangelsdorf
Executive Director (appointed 7 October 2008)
Qualifications
Experience
B. Bus, FCA, FTIA, MAICD
Mr Mangelsdorf performs the function of Chief Financial Officer of the
Company and is a member of the Audit and Risk Committee.
Mr Mangelsdorf is also a Director of a Queensland based land development
Company and has been a Director/partner of a chartered accounting firm for
30 years. He works with SME production, manufacturing and retail firms
assisting with business, taxation and management services.
Interest in shares and
options
Director's interest in ordinary shares: 4,608,367
Director's interest in share options: 3,000,000
Mr. Warren Brooks
Non Executive Director (appointed 25 July 2011)
Qualifications
Securities Institute Certificate, Diploma in financial Planning
Experience
Mr Brooks was the Managing Director and Founder of boutique Financial
Advisory firm Clime AFM Pty Ltd which was a wholly owned subsidiary of
listed Company.
Clime
Investment Management Ltd, an ASX
Mr Brooks also founded Australian Financial Management (Investment) Pty
Ltd in 1998 and sold the business to Clime Investment Management Ltd in
2006. Warren previously had 28 years experience working in Investment
Banking and Stockbroking.
Interest in shares and
options
Director's interest in ordinary shares: 22,223,484
Director’s interest in options: Nil
Company Secretary
The following person held the position of Company secretary at the end of the financial year:
Ms. Jennie Yuen, B.Comm, LLB, Grad Dip Corp Gov
Ms Yuen is a solicitor with over eleven years of experience in a variety of roles as a commercial/corporate
lawyer and company secretary.
Ms Yuen holds a Bachelor of Commerce, a Bachelor of Laws and a Graduate Diploma in Corporate
Governance.
Ms Yuen is employed by Company Matters Pty Limited which is a specialist company secretarial and
governance service provider engaged by Analytica Limited.
Ms Yuen is also the Company Secretary of Viralytics Limited, Bremer Park Limited and National Gaming
and Leisure Limited.
7
Analytica Limited
Directors' Report
30 June 2011
Indemnity
In accordance with the constitution of Analytica Limited:
Every Director, Secretary, executive officer or other person employed in the business of the Company shall
be indemnified by the Company against, and it shall be the duty of the Directors out of the funds of the
Company to pay, all costs, losses and expenses for which any such Director, Secretary, executive officer or
employee may become liable by reason of any contract entered into or act or deed done by him as such
Director, Secretary, executive officer or employee in any way in the proper discharge of his duties, unless
such costs, losses and expenses shall be caused or contributed to by his own negligence, default, breach
of duty or breach of trust.
Meetings of Directors
During the financial year, seven meetings of Directors were held. Two meetings of the Audit Committee
were held during the year.
Attendances at Board meetings by each Director during the year were as follows:
Directors' Meetings
Audit Committee
Meetings
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Dr Michael Monsour
Mr. David Gooch
Mr. Ross Mangelsdorf
Mr. Warren Brooks
7
7
7
-
6
7
7
-
2
2
2
2
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit Services
The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of
non-audit services during the year is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did
not compromise the external auditor's independence for the following reasons:
•
•
all non-audit services are reviewed and approved by the Board prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
8
Analytica Limited
Directors' Report
30 June 2011
Non-audit Services continued
The following fees were paid or payable to the external auditors for non-audit services provided during the
year ended 30 June 2011:
Tax compliance services
Audit of royalty paid to Company
2011
$
7,000
2,100
9,100
2010
$
10,461
2,200
12,661
REMUNERATION REPORT
Remuneration Details for the Year Ended 30 June 2011
The remuneration policy of Analytica Limited has been designed to align key management personnel
objectives with shareholder and business objectives by providing a fixed remuneration component and
offering specific long-term incentives based on key performance areas affecting the consolidated group's
financial results. The Board of Analytica Limited believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best key management personnel to run and manage the
consolidated group, as well as create goal congruence between Directors, executives and shareholders.
The remuneration policy is approved by the Board after professional advice is sought from independent
external consultants.
The Board's policy for determining the nature and amount of remuneration for key management personnel
of the consolidated group is as follows:
•
•
•
•
All key management personnel receive a base salary (which is based on factors such as length of
service and experience), superannuation, fringe benefits, options and performance incentives.
Performance incentives are generally only paid once predetermined key performance indicators have
been met.
Incentives paid in the form of options or rights are intended to align the interests of the Directors and
Company with those of the shareholders. In this regard, key management personnel are prohibited
from limiting risk attached to those instruments by use of derivatives or other means.
The Board reviews key management personnel packages annually by reference to the consolidated
group’s performance, executive performance and comparable information from industry sectors.
The performance of key management personnel is measured against criteria agreed bi-annually with each
executive and is based predominantly on the forecast growth of the consolidated group’s profits and
shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The
Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and
can recommend changes to the committee’s recommendations. Any changes must be justified by reference
to measurable performance criteria. The policy is designed to attract the highest calibre of executives and
reward them for performance that results in long-term growth in shareholder wealth.
9
Analytica Limited
Directors' Report
30 June 2011
Remuneration Report continued
Key management personnel receive a superannuation guarantee contribution required by the government,
which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, have
chosen to sacrifice part of their salary to increase payments towards superannuation.
Upon retirement, key management personnel are paid employee benefit entitlements accrued to the date of
retirement. Key management personnel are paid a percentage of between 5-10% of their salary in the event
of redundancy. Any options not exercised before or on the date of termination will lapse.
All remuneration paid to key management personnel is valued at the cost to the Company and expensed.
Non-Executive Director Remuneration
The Board's policy is to remunerate non-executive Directors at a level that provides the Company with the
ability to attract and retain Directors with the experience and qualification appropriate to the development
strategy of the Company's Intellectual Property.
The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval
by shareholders at the Annual General Meeting. This was set at $300,000 P/A by shareholders on 30th
November 2004. Subsequent to this meeting the Board set individual Director’s fees as follows: Chairman’s
Fee $75,000 P/A plus statutory superannuation, non-executive Directors’ fees are $50,000 P/A plus
statutory superannuation. Based on the current Board Structure, total fees paid on a yearly basis will be
$175,000 plus statutory superannuation. Directors’ fees are reviewed annually. Non-executive Directors’
fees are not linked to the performance of the Company. However, to align Directors’ interests with
shareholder interests, the Directors are encouraged to hold shares in the Company
Executive Directors’ Remuneration
The Board’s policy is to remunerate executive Directors at a level which provides the Company with the
ability to attract and retain executives with the experience and qualifications appropriate to the development
strategy of the Company’s Intellectual Property.
Entities associated with Mr Ross Mangelsdorf were paid consulting, accounting and taxation services fees
during the year totalling $49,000 (2010: nil).
Key Management Personnel Remuneration
There was one additional key management person employed by the Company during the year in addition to
the Company’s Directors. Mr Geoff Daly is the Company’s Operations Manager and was appointed on 7
November 2005. Mr Daly has extensive experience in the design of medical devices, prototyping and
manufacturing.
Mr Daly is employed by the Company under the terms and conditions set out in an employment contract.
Due to the size of the Company and the nature of its operations, the contract is open-ended and not for a
specified time frame. Mr Daly’s contract may be terminated by either party giving notice commensurate with
his period of employment, which varies from 1 to 4 weeks. There is no provision in the employment contract
for the payment of any termination payments other than accrued statutory entitlements.
Company executive fees are not linked to the performance of the Company. However, to align executives’
interests with shareholder interests, the executives are encouraged to hold shares in the Company.
10
Analytica Limited
Directors' Report
30 June 2011
Key Management Personnel Remuneration
The following table of benefits and payment details, in respect to the financial year, sets out the
components of remuneration for each member of the key management personnel of the consolidated
group:
Table of Benefits and Payments for the Year Ended 30 June 2011
Salary,
fees and leave
Superannuation
$
$
Directors
Dr Michael Monsour
Mr David Gooch
Mr Ross Mangelsdorf
Mr Jim Heckathorn (Deceased
July 2009)
Total Directors
Other Key Personnel
Mr Geoff Daly
Total Other Executives
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
$75,000
75,000
50,000
50,000
50,000
50,000
0
4,167
175,000
179,167
160,000
160,000
160,000
$160,000
$6,750
6,750
4,500
4,500
4,500
4,500
0
375
15,750
16,125
14,400
14,400
14,400
$14,400
Total
$
$81,750
81,750
54,500
54,500
54,500
54,500
0
4,542
190,750
195,292
174,400
174,400
174,400
$174,400
During the 2011 and 2010 year, there were no bonuses, non-monetary benefits, share or cash settled share
based payments made to key management personnel.
Entities associated with Mr Ross Mangelsdorf charged consulting, accounting and taxation services fees
during the year totalling $49,500 (2010: nil).
Options
Options Granted as Remuneration
Options may be issued to Directors and executives as part of their remuneration. The options are not
issued based on performance criteria, but may be issued to increase goal congruence between executives,
Directors and shareholders, and as a means to attract and retain appropriately qualified Directors and
executives. There are no performance milestones or other hurdles which must be met in order for Options
to vest. Options issued to Directors vested immediately on issue. Any unexercised Option granted pursuant
to the Employee Share Option Plan shall lapse at the end of a period of not less than 30 days upon
cessation of employment, except in the case of options issued to Directors, which lapse on expiry
regardless of the position held (if any) with the Company at that time. There are no changes to the terms
and conditions of any options granted as remuneration since grant date or any options granted in previous
years as remuneration which have been exercised during the year.
11
Analytica Limited
Directors' Report
30 June 2011
Options Granted as Remuneration continued
At the date of this report, the unissued ordinary shares of Analytica Limited under option are 33,000,000.
Refer to Note 20 - Share Based Payments for further details.
No options were granted during the year 30 June 2011.
Key Management Personnel Equity Interests
Details of key management personnel equity interest can be found in Note 5 - Interests of Key Management
Personnel.
This directors’ report, incorporating the remuneration report is signed in accordance with a resolution of the
Board of Directors.
Director: ............................................................. Dated: 22 September 2011
Dr Michael Monsour
12
Analytica Limited
Corporate Governance Statement
The Company adopted a Corporate Governance Charter on 14 August 2008 with a view to complying with the
ASX Corporate Governance Council’s (the Council) ‘Corporate Governance Principles and Recommendations
2nd Edition’. The Board has taken the view that due to the nature and size of Analytica’s operations, it is not
appropriate at this stage to comply with all of the Council’s recommendations. Deviations from the Council’s
recommendations are noted below.
This statement outlines the Company’s principal corporate governance practices in place during the year.
Lay Solid Foundations for Management and Oversight
The Board has an overriding responsibility to act in the best interest of the Company as a whole and to build
sustainable value for the Company's shareholders.
The Board's functions and responsibilities are set out in the Board Charter which is included in the Company's
Corporate Governance Charter (available on the Company's website: www.analyticamedical.com, under "About
Us" then "Governance")
The Board’s functions include:
• charting strategy and set financial targets for the Group;
• monitoring the implementation and execution of strategy, performance against targets, and ensuring the
availability of appropriate resources;
• to appoint and oversee the performance of executive management;
• reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct
and legal compliance; and
• approving and monitoring the progress of major capital expenditure, capital management and
acquisitions and sales.
All significant matters are dealt with by the Board. Unless disclosed below, all the best practice
recommendations of the ASX Corporate Governance Council have been applied for the entire financial year
ended 30 June 2011.
The Board is primarily responsible for Company strategy and had the authority to establish and delegate powers
to committees (for example, to assist the Board on audit matters, finance and business risks, remuneration and
nominations) and to establish a framework for the effective and efficient management of the Company and its
controlled entities.
Due to the size and operations of the Company, all significant matters are dealt with by the Board as a whole,
while the day to day management of the Company is delegated to the Operations Manager.
The performance of Executives is reviewed and assessed on an ongoing basis throughout the year by the
Chairman, with input from the other Directors. The Chairman determines the evaluation criteria and process,
which is to be the same in each case. The Executives' performance was reviewed by this process during the
financial year.
Board Composition
The skills, experience and expertise relevant to the position of each Director who is in office at the date of the
annual report and their term of office are detailed in the Directors’ report.
The names of the current Directors of the Company are:
Dr Michael Monsour
Mr Warren Brooks
Mr Ross Mangelsdorf
13
Analytica Limited
Corporate Governance Statement
Director Independence
The criteria that the Board uses to determine director independence is included in the Board Charter (part of the
Corporate Governance Charter) which is available on the Company's website. The Board has adopted the
following definition of an Independent Director:
“An Independent Director is a Director who is not a member of management i.e. a non-executive Director and
who:
(a)
is not a substantial Shareholder of the Company, or an officer of a substantial Shareholder, and is not
otherwise associated, directly or indirectly, with a substantial Shareholder of the Company;
(b) has not, within the last three years:
(i) been employed in an executive capacity by the Company or another Group member; or
(ii) been a Director after ceasing employment in an executive capacity for the Company or another Group
member;
(c)
has not, within the last three years, been a principal of a professional advisor to the Company or another
Group member or an employee materially associated with the service provided, except where the advisor
might be considered to be independent due to the fact that fees payable by the Company to the advisor’s
firm represent an insignificant component of the advisor’s firm overall revenue;
(d)
is not:
(i) a material supplier or customer of the Company or another Group member; or
(ii) an officer of or associated, directly or indirectly, with a material supplier or customer;
(e) has no material contractual relationship with the Company or another Group member other than as a
Director;
(f)
is free from any interest and any business or other relationship, which could, or could reasonably be
perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and
(g) has not served on the Board for a period which could, or could reasonably be perceived to, materially
interfere with the Director’s ability to act in the best interests of the Company.”
Only the Chairman of the Board, Dr Michael Monsour, is considered to be an independent director.
Mr Warren Brooks is not considered to be an independent director as he is a substantial shareholder of the
Company.
Mr Ross Mangelsdorf is not considered to be an independent director as he performs the function of Chief
Financial Officer of the Company and entities associated with him were paid consulting, accounting and taxation
services fees during the year.
The Board notes that although the majority of Directors are not independent as recommended by the ASX
Corporate Governance Principles and Recommendations, the current Board composition is appropriate for the
Company at this stage of its development. The Board notes that all incumbent Directors bring an independent
judgement to bear in Board deliberations.
The Board regularly assesses whether each Director is an independent Director in the light of interests
disclosed by them, and each Director must provide the Board with all relevant information for this purpose.
Independent Directors have the right to seek independent professional advice in the furtherance of their duties
as Directors at the Company's expense. Written approval must be obtained from the Chairman prior to incurring
any expense on behalf of the Company.
14
Analytica Limited
Corporate Governance Statement
Nomination Committee
The Board has not established a nomination committee. Due to the small size of the Analytica Board, the full
Board is considered a more effective and appropriate mechanism to deliberate the selection, appointment and
performance matters that would otherwise be dealt with by a Nomination Committee. Whilst it does not currently
have a Nomination Committee in place, the Board has adopted a Nomination Committee Charter as part of its
Corporate Governance Charter which will govern the operation of the Nomination Committee once formed.
Performance Evaluations
The performance of all other Directors is reviewed and assessed each year by the Chairman, and the
performance of the Chairman is reviewed and assessed each year by the other Directors. The Chairman
determines the evaluation criteria and process, which is to be the same in each case.
The Board has not conducted a formal annual performance review this financial year. The Board is aware that
the success of the Company depends on the performance of the Board and as such the Chairman has regular
contact with Directors on an individual and group basis to discuss and revise the goals and objectives of the
Company.
Ethical Standards
The Board acknowledges and emphasises the importance of all Directors maintaining the highest standards of
corporate governance practice and ethical conduct.
The Company has a Code of Conduct which specifies mandatory directions for Directors to follow when
performing their duties, to enable them to achieve the highest possible standards in meeting their obligations,
and give them a clear understanding of practice in corporate governance. The Code of Conduct requires
Directors to:
•
•
•
•
•
•
•
•
•
act in good faith in the best interests of the Company and for a proper purpose;
act in the interests of all shareholders and avoid any potential conflict of interest;
exercise a reasonable degree of care and diligence in fulfilling the functions of office;
be independent in his or her judgement and actions, and must take all reasonable steps to be
satisfied as to the soundness of all decisions taken by the Board;
keep confidential any Board matters and all confidential information received by the Directors in the
course of the exercise of their duties;
not make improper use of information acquired as a Director to gain, directly or indirectly, any
personal advantage or any advantage for any other person detrimental to the Company or the
Group;
not take improper advantage of their position as a Director;
avoid conflicts and make full disclosure of any possible conflict of interest; and
comply with the law.
The Company also has a Code of Conduct for Transactions in Securities which governs the purchase or sale of
securities in the Company by Directors, executives and other employees of the Company who may be in
possession of price sensitive information.
15
Analytica Limited
Corporate Governance Statement
Ethical Standards continued
The Board has resolved to limit any dealings in the Company's shares to a four week period commencing on the
next trading day following the release of the Company’s half-yearly and annual results, and the four period
commencing on the next trading day after the conclusion of the Annual General Meeting.
Trading during these trading windows is only permitted if the trader is not in possession of price-sensitive
information and the trade is not for short term or speculative gain.
Trading outside these trading windows is prohibited unless written authority is first obtained in accordance with
the Code of Conduct for Transactions in Securities.
The Directors' Code of Conduct and the Code of Conduct for Transactions in Securities are both included in the
Corporate Governance Charter with is available on the Company's website: www.analyticamedical.com, under
"About Us" then "Governance".
Directors are obliged to be independent in judgemental and ensure all reasonable steps are taken to ensure due
care is taken by the Board in making sound decisions.
The Board has noted that ASX Council's recommendation to disclose the proportion of women in the Company
and to publish a diversity policy with measurable objectives for achieving gender diversity will only apply for the
Company's financial year commencing after 1 January 2011. The Company currently has the equivalent of 2.3
full-time employees, of which the equivalent of 1.3 full-time employees is female. There are currently no women
in senior executive positions and no female board members. The company secretary is female.
Given the size and operations of the Company, the Board does not propose to implement a diversity policy at
this stage.
Trading Policy
The Company's policy regarding Directors and employees trading in its securities is set by the finance
committee. The policy restricts Directors and employees from acting on material information until it has been
released to the market and adequate time has been given for this reflected in the security's prices.
Audit and Risk Management Committee
The names and qualifications of those appointed to the audit and risk management committee and their
attendance at meetings of the committee are included in the Directors' report.
Performance Evaluation
The performance of Executives is reviewed and assessed on an ongoing basis throughout the year by the
Chairman, with input from the other Directors. The Chairman determines the evaluation criteria and process,
which is to be the same in each case.
Board Roles and Responsibilities
The Board is first and foremost accountable to provide value to its shareholders through delivery of timely and
balanced disclosures.
In accordance with ASX Listing Rules, Analytica Limited will immediately publicly disclose any information that a
reasonable person would expect to have a material effect on the value of its shares.
16
Analytica Limited
Corporate Governance Statement
Board Roles and Responsibilities continued
Due to the size of its Board and operations, the Company has not established written policies and procedures
governing continuous disclosure and shareholder communication. The Board as a whole has the responsibility
for approving the form and substance of any disclosure to be made by the Company to the ASX in fulfilment of
its continuous disclosure obligations. Furthermore, all information communicated to the ASX is to be posted on
the Company website.
Shareholder Rights
The Board strives to inform shareholders of all major developments affecting the group’s activities and its state
of affairs through the distribution of the Annual Report and through regular ASX announcements. The external
auditor of the Company is asked to attend the annual general meeting to answer shareholder questions
concerning the conduct, preparation and content of the audit report.
Risk Management
The Board is responsible for Company strategy, including the identification of material risks. This responsibility
is fulfilled by the Audit Committee, which reviews the material risks affecting each business segment, develops
strategies to mitigate these risks and reports to the Board following each meeting.
The Board has not established policies for the oversight and management of material business risks. The risk of
the Company’s and the Group’s businesses are reviewed by the Board following each report by the Audit
Committee. The report is a specific agenda item at each regular meeting of the Board. Once a risk is identified,
an action plan is proposed and submitted to the Audit Committee and, through it; the Board is informed of the
action plan.
The Audit Committee must approve the action plan. Corrective action must be taken as soon as practicable.
Material business risks arise from such matters as actions by competitors, changes in government policy and
use of information systems.
The Chairman of the Audit Committee (who also performs the function of Chief Financial Officer) must ensure
the Company’s risk management and internal compliance and control systems are operating efficiently and
effectively in all material respects, and provide a detailed statement to the Board about this at least annually.
The Board has received assurance from the Chairman of the Board (who is the acting Chief Executive Officer)
and from the Chairman of the Audit Committee (who also performs the function of Chief Financial Officer) with a
declaration in accordance with s295(A) of the Corporations Act 2001 (Cth) that is founded on a sound system of
risk management and internal control which is operating effectively in all material respects in relation to financial
reporting risks.
Remuneration Policies
All executives receive a base salary, superannuation, fringe benefits, performance incentives and retirement
benefits. The Board reviews executive packages annually by reference to Company performance, executive
performance, comparable information from industry sectors and other listed companies and independent advice.
The performance of executives is measured against criteria agreed half yearly which is based on the forecast
growth of the Company's profits and shareholders’ value. The policy is designed to attract the highest calibre
executives and reward them for performance which results in long-term growth in shareholder value.
Executives are also entitled to participate in the employee share and option arrangements.
The amount of remuneration for all key management personnel for the Company, including all monetary and
non-monetary components, are detailed in the Directors report under the heading key management personnel
compensation. All remuneration paid to executives is valued at the cost to the Company and expensed. Shares
given to executives are valued as the difference between the market price of those shares and the amount paid
by the executive. Options are valued using the Black-Scholes methodology.
17
Analytica Limited
Corporate Governance Statement
Remuneration Policies continued
The Board expects that the remuneration structure implemented will result in the Company being able to attract
and retain the best executives to run the Analytica Limited. It will also provide executives with the necessary
incentives to work to grow long-term shareholder value.
The payment of bonuses, options and other incentive payments are reviewed by the Board annually as part of
the review of executive remuneration and a recommendation is put to the Board for approval. All bonuses,
options and incentives must be linked to predetermined performance criteria. The Board can exercise its
discretion in relation to approving incentives, bonuses and options and can recommend changes to the
committee's recommendations. Any changes must be justified by reference to measurable performance criteria.
Remuneration Committee
The Board has not established a Remuneration Committee. The Board has taken the view that given its size,
the Board as a whole is the most appropriate mechanism to consider remuneration and other matters usually
considered by a Remuneration Committee.
Matters relating to the remuneration of Company executives are usually considered by the Board on an annual
basis, with particular regard for ensuring the Company has remuneration practices in place which will allow it to
both attract and retain the best possible executives and employees. The Company, with shareholder approval,
has granted options over ordinary shares in the Company to Directors and executives to ensure that Directors,
executives and shareholder interests are aligned.
The remuneration paid to Directors during the financial year is outlined in the Remuneration Report contained in
the Directors’ Report.
There are no schemes for retirement benefits other than statutory superannuation for non-executive Directors.
Although it does not have a Remuneration Committee in place, the Company has adopted a Remuneration
Committee Charter as part of its Corporate Governance Charter which will govern the operation of the
Remuneration Committee should one be formed in future.
Other Information
Further information relating to the Company's corporate governance practices and policies are set out in the
the Company's web site,
Company's Corporate Governance Charter with
www.analyticamedical.com (under "About Us" then "Governance").
is available on
18
Analytica Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2011
Loss for the year
Total comprehensive income for the year
Total comprehensive income attributable to:
Members of the parent entity
Consolidated
2011
$
2010
$
(203,176)
(1,287,837)
(203,176)
(1,287,837)
(203,176)
(1,287,837)
(203,176)
(1,287,837)
The accompanying notes form part of these financial statements.
20
Analytica Limited
Consolidated Income Statement
For the Year Ended 30 June 2011
Revenue and other income
Less Expenses:
Marketing expense
Occupancy expense
Administrative expense
Research and development
Finance costs
Fair Value Adjustment
Depreciation
Other expenses
Loss before income tax
Basic/Diluted Loss per share (cents per share)
Note
Consolidated
2011
$
272,878
2010
$
290,548
2
(26,047)
(600)
(423,882)
(374,583)
(5,333)
381,320
(12,844)
(14,085)
(169,966)
(10,168)
(445,662)
(601,227)
(20,642)
(245,507)
(13,247)
(71,966)
(203,176)
(1,287,837)
3(a)
(203,176)
(1,287,837)
7
(0.05 cents)
(0.3 cents)
The accompanying notes form part of these financial statements.
21
Analytica Limited
Consolidated Statement of Financial Position
30 June 2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Joint ventures
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other financial assets
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings - Loan from a director related entity
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated Losses
Parent interest
Non-controlling interest
TOTAL EQUITY
Note
Consolidated
2011
$
2010
$
8
9
10
11
13
15
22
16
16
1,342
293,428
16,238
-
419,383
86,002
21,544
-
311,008
526,929
658,169
20,169
276,849
30,741
678,338
307,590
989,346
834,519
113,306
268,700
59,143
25,369
-
60,147
441,149
85,516
8,185
8,185
5,779
5,779
449,334
91,295
540,012
743,224
17
25
80,959,107 80,959,107
2,630,508
(83,049,603) (82,846,396)
2,630,508
540,012
-
743,219
5
540,012
743,224
The accompanying notes form part of these financial statements.
22
Analytica Limited
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2011
2011
Consolidated
Note
Ordinary
Shares
Accumulated
Losses
Option
Reserve
$
$
$
Balance at 1 July 2010
80,959,107 (82,846,396)
2,630,508
Elimination of outside equity interests
12
following deregistration of
subsidiaries
Loss for year
Sub-total
-
-
-
(31)
(203,176)
(203,207)
-
-
-
Balance at 30 June 2011
80,959,107
(83,049,603) 2,630,508
2010
Consolidated
Ordinary
Shares
Accumulated
Losses
Option
Reserve
$
$
$
Balance at 1 July 2009
79,609,178 (81,558,559)
2,630,508
Shares issued during the year
Loss for year
Conversion of unlisted Options
Sub-total
1,212,429
-
-
137,500
(1,287,837)
-
1,349,929
(1,287,837)
-
-
-
-
Balance at 30 June 2010
80,959,107 (82,846,396)
2,630,508
Non-
controlling
Interests
$
5
(5)
-
-
-
Non-
controlling
Interests
$
5
-
-
-
-
5
Total
$
743,224
(36)
(203,176)
(203,212)
540,012
Total
$
681,132
1,212,429
(1,287,837)
137,500
62,092
743,224
The accompanying notes form part of these financial statements.
23
Analytica Limited
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Net cash provided by (used in) operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from disposal of subsidiary
Purchase of property, plant and equipment
Borrowing – Loan from a director related
entity
Net cash provided by (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payment of transaction costs
Net cash provided by (used in) financing activities
OTHER ACTIVITIES
Net increase (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
Note
Consolidated
2011
$
2010
$
33,284
(717,090)
5,330
(5,993)
227,758
(1,275,403)
22,347
(20,642)
19(a)
(684,469)
(1,045,940)
13
22
-
(2,272)
-
(29,875)
268,700
-
266,428
(29,875)
-
-
-
1,016,745
(66,816)
949,929
(418,041)
419,383
(125,886)
545,269
8
1,342
419,383
These consolidated financial statements and notes represent those of Analytica Limited and controlled entities
(the “consolidated group”).
The separate financial statements of the parent entity, Analytica Limited, have not been presented within the
financial report as permitted by the Corporations Act 2001.
The accompanying notes form part of these financial statements.
24
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies
(a) Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations and the Corporations Act
2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with International Financial Reporting Standards. Material accounting policies
adopted in the preparation of this financial report are presented below and have been consistently
applied unless otherwise stated.
The financial report has been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities.
(b) Going Concern
The financial report has been prepared on a going concern basis.
However, at 30 June 2011 the Company had a consolidated deficiency in net current assets of
$130,141. In addition, the Company's forward cash flow projections currently indicate that the
Company will be required to raise additional funds to meet forecast cash needs. The Directors have
considered this position and have assessed available funding options and believe should funding be
required that sufficient funds could be sourced to satisfy creditors as and when they fall due. In
recent months the Board has taken steps to raise more capital and is expecting to generate $2.8
million by way of a rights issue to existing shareholders in October 2011.
The Company also expects to generate royalty income during the 2012 financial year from sales of
its AutoStart® Burette and/or AutoFlush enabled Burette. Whilst not expected to become cash flow
positive prior to 30 June 2012, royalty revenues generated will assist the Company in meeting its
ongoing working capital requirements.
However if adequate capital raising is not achieved the Company may be unable to continue as a
going concern. No adjustments have been made relating to the recoverability and classification of
recorded asset amounts and classification of liabilities that might be necessary should the Company
not continue as a going concern.
25
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1
Summary of Significant Accounting Policies continued
(c) Principles of Consolidation
The consolidated group comprises the financial report of Analytica Limited and of its controlled
entities.
A controlled entity is any entity controlled by Analytica Limited. Control exists where Analytica
Limited has the capacity to dominate the decision-making in relation to the financial and operating
policies of another entity so that the other entity operates with Analytica to achieve the objectives of
Analytica Limited. Details of the controlled entities are in Note 12.
All inter-company balances and transactions between entities in the consolidated group, including
any unrealised profits or losses, have been eliminated on consolidation. Where a controlled entity
has entered or left the consolidated group during the year, its operating results have been
included/excluded from the date control was obtained or until the date control ceased.
(d) Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses and
results in the consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The acquisition method requires
that for each business combination, one of the combining entities must be identified as the acquirer
(i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is
the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall
recognise, in the consolidated accounts and subject to certain limited exceptions, the fair value of the
identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree
will be recognised where a present obligation has been incurred and its fair value can be reliably
measured.
The acquisition may result in the recognition of goodwill (refer Note 1(h)) or a gain from a bargain
purchase. The method adopted for the measurement of goodwill will impact on the measurement of
any non-controlling interest to be recognised in the acquiree where less than 100% ownership
interest is held in the acquiree.
The consideration transferred for a business combination shall form the cost of the investment in the
separate financial statements. Such consideration is measured at fair value at acquisition date and
consists of the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the
former owners of the acquiree and the equity interests issued by the acquirer.
Included in the measurement of consideration transferred is any asset or liability resulting from a
contingent consideration arrangement. Any obligation incurred relating to contingent consideration is
classified as either a financial liability or equity instrument, depending upon the nature of the
arrangement. Rights to refunds of consideration previously paid are recognised as a receivable.
Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and
its subsequent settlement is accounted for within equity. Contingent consideration classified as an
asset or a liability is remeasured each reporting period to fair value through the consolidated
statement of comprehensive income, unless the change in value can be identified as existing at
acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the
consolidated income statement.
26
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1
Summary of Significant Accounting Policies continued
(e)
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured
products includes direct materials, direct labour and an appropriate portion of variable and fixed
overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned
on the basis of weighted average costs.
(f)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated, less, where
applicable, any accumulated depreciation and impairment losses.
Property
Freehold land and buildings are shown at their fair value (being the amount for which an asset could
be exchanged between knowledgeable willing parties in an arm's length transaction), based on
periodic, but at least triennial, valuations by external independent valuers, less subsequent
depreciation for buildings.
In the periods when the freehold land and buildings are not subject to an independent valuation, the
Directors conduct Directors valuations to ensure the land and buildings carrying amount is not
materially different to the fair value.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a
revaluation surplus in shareholders' equity. Decreases that offset previous increases of the same
asset are charged against fair value reserves directly in equity; all other decreases are charged to the
consolidated income statement. Each year the difference between depreciation based on the
revalued carrying amount of the asset charged to the consolidated income statement and
depreciation based on the asset's original cost is transferred from the revaluation surplus to retained
earnings.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset.
Plant and equipment
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the asset's employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
The cost of fixed assets constructed within the consolidated group includes the cost of materials,
direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the consolidated group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the consolidated income statement during the financial period in which
they are incurred.
27
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(f)
Property, Plant and Equipment continued
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but
excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the
consolidated group commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and Equipment
Office Equipment
Computer Equipment
20%
33.3% to 40%
33.3%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains and losses are included in the consolidated income statement. When revalued assets
are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained
earnings.
(g)
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is the equivalent to the date that the
consolidated group commits itself to either the purchase or sale of the asset (i.e. trade date
accounting is adopted).
Financial instruments are initially measured at fair value plus transactions costs, except where the
instrument is classified 'at fair value through profit or loss', in which case transaction costs are
expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at either of fair value, amortised cost using the
effective interest rate method, or cost. Fair value represents the amount for which an asset could be
exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted
prices in an active market are used to determine fair value. In other circumstances, valuation
techniques are adopted.
28
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(g)
Financial Instruments continued
Amortised cost is calculated as:
(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially
recognised and the maturity amount calculated using the effective interest method; and
(d) less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts
(including fees, transaction costs and other premiums or discounts) through the expected life (or
when this cannot be reliably predicted, the contractual term) of the financial instrument to the net
carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows
will necessitate an adjustment to the carrying value with a consequential recognition of an income or
expense in profit or loss.
The Consolidated Group does not designate any interests in subsidiaries, associates or joint venture
entities as being subject to the requirements of accounting standards specifically applicable to
financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for
trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when
they are designated as such to avoid an accounting mismatch or to enable performance evaluation
where a group of financial assets is managed by key management personnel on a fair value basis in
accordance with a documented risk management or investment strategy. Such assets are
subsequently measured at fair value with changes in carrying value being included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to
mature within 12 months after the end of the reporting period. (All other loans and receivables are
classified as non-current assets.)
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed
or determinable payments, and it is the consolidated group's intention to hold these investments to
maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those which are expected
to mature within 12 months are the end of the reporting period. (All other investments are classified
as current assets.)
If during the period the consolidated group sold or reclassified more than an insignificant amount of
the held-to-maturity investments before maturity, the entire held-to-maturity investments category
would be tainted and reclassified as available-for-sale.
29
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(g)
Financial Instruments continued
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such
by management. They comprise investments in the equity of other entities where there is neither a
fixed maturity nor fixed or determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those which are
expected to mature within 12 months after the end of the reporting period. (All other financial assets
are classified as current assets)
(v) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
(vi) Net assets attributable to unitholders
Units are redeemable at the option of the unitholder and are therefore classified as financial liabilities.
Redemption of units obligates the Company to deliver cash to the unitholder based on the fair value
of the units at the date of redemption. The liability at balance date is measured at fair value with
changes recognised through profit or loss.
Financial guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due,
are recognised as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the
amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB
118: Revenue. Where the Company gives guarantees in exchange for a fee, revenue is recognised
under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability weighted
discounted cash flow approach. The probability has been based on:
•
•
•
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting; and
the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the
asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised
where the related obligations are either discharged, cancelled or expired. The difference between the
carrying value of the financial liability extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in
profit or loss.
30
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(h)
Impairment of Assets
At each reporting date, the consolidated group assesses whether there is any indication that an asset
may be impaired. The assessment will include considering external sources of information including,
dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of
pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by
comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs
to sell and value in use to the asset's carrying value. Any excess of the asset's carrying value over
its recoverable amount is expensed to the consolidated income statement.
Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated
group estimates the recoverable amount of the cash generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(i)
Intangibles
Goodwill
Goodwill is calculated as the excess of the sum of:
i)
the consideration transferred;
ii) any non-controlling interest; and
iii)
the acquisition date fair value of any previously held equity interest, over the acquisition date fair
value of net identifiable assets acquired.
The value of goodwill recognised on acquisition of each subsidiary in which the consolidated group
holds less than a 100% interest will depend on the method adopted in measuring the aforementioned
non-controlling interest. The Consolidated Group can elect to measure the non-controlling interest in
the acquiree either at fair value ('full goodwill method') or at the non-controlling interest's
proportionate share of the subsidiary's identifiable net assets ('proportionate interest method'). The
Consolidated Group determines which method to adopt for each acquisition.
Under the 'full goodwill method', the fair values of the non-controlling interests are determined using
valuation techniques which make the maximum use of market information where available. Under this
method, goodwill attributable to the non-controlling interests is recognised in the consolidated
financial statements.
Fair value uplifts in the value of pre-existing equity holdings are taken to the consolidated income
statement. Where the investment has been equity accounted, any credit reserve balances are
recycled to the consolidated income statement.
In determining the net identifiable assets acquired, contingent liabilities of the acquiree are included
to the extent to which they represent a present obligation and can be measured reliably.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of
associates is included in investments in associates.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.
Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the
entity sold.
31
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(i)
Intangibles
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do
not affect the carrying values of goodwill.
Research and development
Expenditure during the research phase of a project is recognised as an expense when incurred.
Development costs are capitalised only when technical feasibility studies identify that the project will
deliver future economic benefits and these benefits can be measured reliably.
Development costs have a finite life and are amortised on a systematic basis matched to the future
economic benefits over the useful life of the project.
(j)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current liabilities in the consolidated statement
of financial position.
(k) Employee Benefits
Provision is made for the Company's liability for employee benefits arising from services rendered by
employees to the end of the reporting period. Employee benefits that are expected to be settled
within one year have been measured at the amounts expected to be paid when the liability is settled,
plus related on-costs. Employee benefits payable later than one year have been measured at
present value of the estimated future cash outflows to be made for those benefits. In determining the
liability, consideration is given to employee wage increases and the probability that the employee
may satisfy vesting requirements. Those cash flows are discounted using market yields on national
government bonds with terms to maturity that match the expected timing of cash flows.
Equity-based compensation
The company operates a number of share-based compensation plans. These include both a share
option arrangement and an employee share scheme. The bonus element over the exercise price of
the employee services rendered in exchange for the grant of shares and options is recognised as an
expense in the Consolidated Income Statement. The total amount to be expensed over the vesting
period is determined by reference to the fair value of the shares on the option granted. Information
on equity based compensation is disclosed in Note 20.
(l)
Provisions
Provisions are recognised when the consolidated group has a legal or constructive obligation, as a
result of past events, for which it is probable that an outflow of economic benefits will result and that
outflow can be reliably measured.
Provisions recognised represent the best estimate of the amounts required to settle the obligation at
the end of the reporting period.
32
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(m) Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for
goods and services received by the consolidated group during the reporting period which remain
unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days
of recognition of the liability.
(n)
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income).
(n)
Income Tax continued
Current income tax expense charged to the profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the
reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to
be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well as unused tax losses.
Current and deferred tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred
tax assets also result where amounts have been fully expensed but future tax deductions are
available. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates enacted or substantively
enacted at the end of the reporting period. Their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of
set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
33
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(o) Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into
account any trade discounts and volume rebates allowed. Any consideration deferred is treated as
the provision of finance and is discounted at a rate of interest that is generally accepted in the market
for similar arrangements. The difference between the amount initially recognised and the amount
ultimately received is interest revenue.
Interest revenue is recognised using the effective interest rate method, which, for floating rate
financial assets, is the rate inherent in the instrument.
All revenue is stated net of the amount of goods and services tax (GST).
(p) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(q) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount
of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the consolidated statement of financial position are shown inclusive of
GST.
Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for
the GST component of investing and financing activities, which are disclosed as operating cash
flows.
(r)
Foreign Currency Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
year-end exchange rate.
The gains and losses arising from conversion of short-term assets and liabilities, whether realised or
unrealised, are recognised in the consolidated income statement.
(s) Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the consolidated group.
There were no key estimates and judgements in the current financial year.
34
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(t) Government Grants
Government grants are recognised at fair value where there is a reasonable assurance that the grant
will be received and all grant conditions will be met. Grants relating to expense items are recognised
as income over the periods necessary to match the grant to the costs they are compensating. Grants
relating to assets are credited to deferred income at fair value and are credited to income over the
expected useful life of the asset on a straight line basis.
(u) New Accounting Standards for Application in Future Periods
The AASB has issued new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting periods and which the Group has decided not to early
adopt. A discussion of those future requirements and their impact on the Group is as follows:
– AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods
commencing on or after 1 January 2013).
This Standard is applicable retrospectively and includes revised requirements for the classification
and measurement of financial instruments, as well as recognition and derecognition requirements for
financial instruments. The Group has not yet determined any potential impact on the financial
statements.
The key changes made to accounting requirements include:
- simplifying the classifications of financial assets into those carried at amortised cost and those
carried at fair value;
- simplifying the requirements for embedded derivatives;
- removing the tainting rules associated with held-to-maturity assets;
- removing the requirements to separate and fair value embedded derivatives for financial assets
carried at amortised cost;
- allowing an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income. Dividends in
respect of these investments that are a return on investment can be recognised in profit or loss
and there is no impairment or recycling on disposal of the instrument;
- requiring financial assets to be reclassified where there is a change in an entity’s business model
as they are initially classified based on: (a) the objective of the entity’s business model for
managing the financial assets; and (b) the characteristics of the contractual cash flows; and
- requiring an entity that chooses to measure a financial liability at fair value to present the portion of
the change in its fair value due to changes in the entity’s own credit risk in other comprehensive
income, except when that would create an accounting mismatch. If such a mismatch would be
created or enlarged, the entity is required to present all changes in fair value (including the effects
of changes in the credit risk of the liability) in profit or loss.
– AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or
after 1 January 2011).
This Standard removes the requirement for government-related entities to disclose details of all
transactions with the government and other government-related entities and clarifies the definition of
a “related party” to remove inconsistencies and simplify the structure of the Standard. No changes
are expected to materially affect the Group.
35
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1
Summary of Significant Accounting Policies continued
(u)
New Accounting Standards for Application in Future Periods continued
– AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2:
Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements
[AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128,
131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 &
1052] (applicable for annual reporting periods commencing on or after 1 July 2013).
AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of
financial reporting requirements for those entities preparing general purpose financial statements:
- Tier 1: Australian Accounting Standards; and
- Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.
Tier 2 of the framework comprises the recognition, measurement and presentation requirements of
Tier 1, but contains significantly fewer disclosure requirements.
The following entities are required to apply Tier 1 reporting requirements (ie full IFRS):
- for-profit private sector entities that have public accountability; and
- the Australian Government and state, territory and local governments.
Since the Group is a for-profit private sector entity that has public accountability, it does not qualify
for the reduced disclosure requirements for Tier 2 entities.
AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give
effect to the reduced disclosure requirements for Tier 2 entities. It achieves this by specifying the
disclosure paragraphs that a Tier 2 entity need not comply with as well as adding specific “RDR”
disclosures.
– AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119,
133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual
reporting periods commencing on or after 1 January 2011).
This Standard makes a number of editorial amendments to a range of Australian Accounting
Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs
by the IASB. The Standard also amends AASB 8 to require entities to exercise judgment in
assessing whether a government and entities known to be under the control of that government are
considered a single customer for the purposes of certain operating segment disclosures. The
amendments are not expected to impact the Group.
– AASB 2009–14: Amendments to Australian Interpretation – Prepayments of a Minimum Funding
Requirement [AASB Interpretation 14] (applicable for annual reporting periods commencing on or
after 1 January 2011).
This Standard amends Interpretation 14 to address unintended consequences that can arise from
the previous accounting requirements when an entity prepays future contributions into a defined
benefit pension plan.
This Standard is not expected to impact the Group.
– AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual
Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable
for annual reporting periods commencing on or after 1 January 2011).
36
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1
Summary of Significant Accounting Policies continued
(u)
New Accounting Standards for Application in Future Periods continued
This Standard details numerous non-urgent but necessary changes to Accounting Standards arising
from the IASB’s annual improvements project. Key changes include:
- clarifying the application of AASB 108 prior to an entity’s first Australian-Accounting-Standards
financial statements;
- adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context
of the quantitative disclosures to better enable users to evaluate an entity’s exposure to risks
arising from financial instruments;
- amending AASB 101 to the effect that disaggregation of changes in each component of equity
arising from transactions recognised in other comprehensive income is required to be presented,
but is permitted to be presented in the statement of changes in equity or in the notes;
- adding a number of examples to the list of events or transactions that require disclosure under
AASB 134; and
- making sundry editorial amendments to various Standards and Interpretations.
This Standard is not expected to impact the Group.
– AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112,
118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 &
1042] (applicable for annual reporting periods beginning on or after 1 January 2011).
This Standard makes numerous editorial amendments to a range of Australian Accounting Standards
and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.
However, these editorial amendments have no major impact on the requirements of the respective
amended pronouncements.
– AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of
Financial Assets [AASB 1 & AASB 7] (applicable for annual reporting periods beginning on or after 1
July 2011).
This Standard adds and amends disclosure requirements about transfers of financial assets,
especially those in respect of the nature of the financial assets involved and the risks associated with
them. Accordingly, this Standard makes amendments to AASB 1: First-time Adoption of Australian
Accounting Standards, and AASB 7: Financial Instruments: Disclosures, establishing additional
disclosure requirements in relation to transfers of financial assets.
This Standard is not expected to impact the Group.
– AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December
2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139,
1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applies to periods beginning on or after 1
January 2013).
This Standard makes amendments to a range of Australian Accounting Standards and
Interpretations as a consequence of the issuance of AASB 9: Financial Instruments in December
2010. Accordingly, these amendments will only apply when the entity adopts AASB 9.
As noted above, the Group has not yet determined any potential impact on the financial statements
from adopting AASB 9.
37
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1
Summary of Significant Accounting Policies continued
(u)
New Accounting Standards for Application in Future Periods continued
– AASB 2010–8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery of
Underlying Assets [AASB 112] (applies to periods beginning on or after 1 January 2012).
This Standard makes amendments to AASB 112: Income Taxes.
The amendments brought in by this Standard introduce a more practical approach for measuring
deferred tax liabilities and deferred tax assets when investment property is measured using the fair
value model under AASB 140: Investment Property.
Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets
depends on whether an entity expects to recover an asset by using it or by selling it. The
amendments introduce a presumption that an investment property is recovered entirely through sale.
This presumption is rebutted if the investment property is held within a business model whose
objective is to consume substantially all of the economic benefits embodied in the investment
property over time, rather than through sale.
The amendments brought in by this Standard also incorporate Interpretation 121 into AASB 112.
The amendments are not expected to impact the Group.
– AASB 2010–9: Amendments to Australian Accounting Standards – Severe Hyperinflation and
Removal of Fixed Dates for First-time Adopters [AASB 1] (applies to periods beginning on or after 1
July 2011).
This Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting
Standards.
The amendments brought in by this Standard provide relief for first-time adopters of Australian
Accounting Standards from having to reconstruct transactions that occurred before their date of
transition to Australian Accounting Standards.
Furthermore, the amendments brought in by this Standard also provide guidance for entities
emerging from severe hyperinflation either to resume presenting Australian-Accounting-Standards
financial statements or to present Australian-Accounting-Standards financial statements for the first
time.
This Standard is not expected to impact the Group.
– AASB 2010–10: Further Amendments to Australian Accounting Standards – Removal of Fixed Dates
for First-time Adopters [AASB 2009–11 & AASB 2010–7] (applies to periods beginning on or after 1
January 2013).
This Standard makes amendments to AASB 2009–11: Amendments to Australian Accounting
Standards arising from AASB 9, and AASB 2010–7: Amendments to Australian Accounting
Standards arising from AASB 9 (December 2010).
The amendments brought in by this Standard ultimately affect AASB 1: First-time Adoption of
Australian Accounting Standards and provide relief for first-time adopters from having to reconstruct
transactions that occurred before their transition date.
[The amendments to AASB 2009–11 will only affect early adopters of AASB 2009–11 (and AASB 9:
Financial Instruments that was issued in December 2009) as it has been superseded by AASB
2010–7.]
This Standard is not expected to impact the Group.
The Consolidated Group does not anticipate early adoption of any of the above accounting
standards.
38
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
1 Summary of Significant Accounting Policies continued
(v) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
When the consolidated group has retrospectively applied an accounting policy or makes a
retrospective restatement or reclassifies items in its financial statements, an additional consolidated
statement of financial position as at the beginning of the earliest comparative period will be disclosed.
Where the consolidated group has retrospectively applied an accounting policy, made a retrospective
restatement or reclassifies items in its financial statements, an additional consolidated statement of
financial position as at the beginning of the earliest comparative period will be disclosed.
39
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
2 Revenue and Other Income
Revenue from Continuing Operations
- Sales
Other revenue
- R and D Tax Concession
- Royalties
- Interest from third parties
Total Revenue
3 Loss for the Year
(a) Expenses
Cost of sales
Other Expenses:
Legal fees
Travel
Other
Total other expenses
Depreciation and Amortisation
Depreciation - Plant and equipment
at cost
Total Depreciation and Amortisation
Audit Remuneration
auditing or reviewing the financial
report
other services
Total Audit Remuneration
Consolidated
2011
$
2010
$
6,100
1,800
261,448
-
5,330
225,958
27,184
35,606
266,778
288,748
272,878
290,548
5,306
-
5,050
8,727
308
14,085
19,961
39,545
12,460
71,966
12,844
13,247
12,844
13,247
35,004
9,100
39,900
12,661
44,104
52,561
40
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
4
Income Tax Expense
(a) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as
follows:
Prima facie tax payable on profit from
ordinary activities before income tax
at 30% (2010: 30%)
- parent entity
Add:
Tax effect of:
- other non-allowable items
- future benefits not recognised
Less:
Tax effect of:
- movement in provisions
- other non-assessable items
- other deductible items
Income tax attributable to parent
entity
Income tax attributable to entity
Consolidated
2011
$
2010
$
(60,953)
(386,351)
(60,953)
(386,351)
51,206
172,226
150,194
363,230
162,479
127,073
3,363
78,435
80,681
(5,437)
57,418
75,092
162,479
127,073
-
-
-
-
The weighted average effective consolidated tax rate for 2011 is zero which is consistent with 2010.
41
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
5
Interests of Key Management Personnel
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or
payable to each member of the consolidated group's key management personnel for the year ended 30 June
2011.
The totals of remuneration paid to key management personnel of the Company and the consolidated group
during the year are as follows:
Short-term employee benefits
Post-employment benefits
Consolidated
2011
$
335,000
30,150
365,150
2010
$
339,167
30,525
369,692
Other Key Management Personnel Transactions
There have been no other transactions involving equity instruments other than those described in the tables
above. For details of other transactions with key management personnel, refer to Note 22: Related Party
Transactions.
KMP Shareholdings
2011
Dr Michael Monsour
Mr R Mangelsdorf
Total
2010
Dr Michael Monsour
Mr David Gooch
Mr R Mangelsdorf
Mr J Heckathorn*
Total
Balance
1 July
13,647,828
4,608,367
18,256,195
(Disposed)
Acquired/
Issued
Balance
30 June
-
-
-
-
-
-
13,647,828
4,608,367
18,256,195
Balance
1 July
13,420,555
1,175,000
4,608,367
1,600,000
20,803,922
(Disposed)
-
(1,175,000)
-
(1,600,000)
(2,775,000)
Acquired/
Issued
Balance
30 June
227,273
-
-
-
227,273
13,647,828
-
4,608,367
-
18,256,195
* ceased as a Director and KMP in July 2009, shares treated as disposed in 2010.
KMP Option Holdings
2011
Dr Michael Monsour
Mr David Gooch
Mr R Mangelsdorf
Total
Balance
1 July
10,000,000
10,000,000
3,000,000
23,000,000
(Exercised)
(ii)
-
-
-
-
Issued as
Compensation
-
-
-
-
Balance
30 June
10,000,000
10,000,000
3,000,000
23,000,000
42
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
KMP Option Holdings continued
2010
Dr Michael Monsour
Mr David Gooch
Mr J Heckathorn
Mr R Mangelsdorf
Mr G Daly
Total
Balance
1 July
10,000,000
10,000,000
10,000,000
3,000,000
4,500,000
37,500,000
(Exercised)
-
-
-
-
(4,500,000)
(4,500,000)
Issued as
Compensation
-
-
-
-
-
-
Balance
30 June
10,000,000
10,000,000
10,000,000
3,000,000
-
33,000,000
Number of Options held by Key Management Personnel
2011
Dr Michael Monsour
Mr David Gooch
Mr R Mangelsdorf
Total
Balance
30 June
Total Vested
30 June
10,000,000
10,000,000
3,000,000
23,000,000
10,000,000
10,000,000
3,000,000
23,000,000
Total Vested
and
Exercisable
30 June
10,000,000
10,000,000
3,000,000
23,000,000
Total Vested
and
Exercisable 30
June 2010
10,000,000
10,000,000
3,000,000
23,000,000
6 Auditors' Remuneration
Remuneration of the auditor of the parent entity for:
- An audit or review of the financial report of the entity and
any entity in the consolidated group
- Tax compliance
- Audit of royalty paid to Company
Consolidated
2011
$
2010
$
35,004
7,000
2,100
44,104
39,900
10,461
2,200
52,561
43
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
7 Earnings (Loss) per Share
Basic/Diluted loss per share (cents per share)
Income and share data used in the calculations of basic and diluted
earnings per share:
Net Loss
Weighted average number of ordinary shares on issue in the calculation of
basic earnings per share
Earnings used to calculate basic EPS
Earnings used in calculation of dilutive EPS
Consolidated
2011
$
(0.05 cents)
2010
$
(0.3 cents)
(203,176)
(1,287,837)
411,104,182 384,432,184
(203,176)
(1,287,837)
(203,176)
(1,287,837)
Weighted average number of ordinary shares on issue in the calculation of
basic EPS
411,104,182 384,432,184
Adjusted weighted average number of ordinary shares and potential
ordinary shares used in calculating dilutive EPS
411,104,182 384,432,184
Share Options on Issue
Consolidated
2011
No.
2010
No.
33,000,000 33,000,000
33,000,000 33,000,000
(i) As at the balance date, there are 33,000,000 share options on issue, giving a total potential shares which
may be issued of 33,000,000. These potential ordinary shares have not been taken into account when
calculating the diluted loss per share due to their anti-dilutive nature.
44
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
8 Cash and Cash Equivalents
Cash at bank
Consolidated
2011
$
1,342
2010
$
419,383
1,342
419,383
Financing Facilities: At 30 June 2011 the consolidated entity had no credit standby arrangements or unused
loan facilities except for $131,300 which was undrawn from the director related loan facitlity (refer note 22).
Reconciliation of cash
Cash at the end of the financial year as
shown in the statement of cash flows is
reconciled to items in the statement of
financial position as follows:
Cash and cash equivalents
9 Trade and Other Receivables
CURRENT
Prepayments
GST receivable
Other receivables
Loan receivable
Total current trade and other receivables
10
Inventories
CURRENT
At Cost
Finished goods
1,342
419,383
1,342
419,383
22,733
9,246
261,449
-
24,271
4,154
27,577
30,000
293,428
86,002
16,238
21,544
16,238
21,544
45
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
11 Other Financial Assets
Investment in CBio Limited
Held for trading financial assets
Listed shares at cost
Fair value adjustment
Total Other Financial Assets
Consolidated
2011
$
2010
$
522,356
135,812
522,356
(245,507)
658,168
276,849
Financial assets at fair value through profit or loss
(i) During the 2009 financial year, the Company acquired five $100,000 Convertible Notes in the unlisted
entity CBio Limited. The Notes pay interest of 8% per annum and may be converted into two ordinary shares
for each $1 of Note converted prior to 31 December 2010. For each share acquired upon conversion of the
Notes, one free option will be issued with an exercise price of $1 and an expiry date of 31 December 2012.
(ii) During the 2010 financial year CBio Limited listed on the Australian Securities Exchange and Analytica
converted the notes together with interest accrued into 1,044,712 shares in CBio Limited. These shares have
been revalued at market price at 30 June each year.
12
Investments
(a) Controlled Entities Consolidated
Name
Subsidiaries of parent entity:
Graesser Pty Ltd***
YL Brands Pty Ltd**
Brewer Retractable Technologies Pty Ltd**
Recovery Clinic Pty Ltd**
* Percentage of voting power is in proportion to ownership
**Voluntarily deregistered as at 30 June 2010
*** Voluntarily deregistered as at 30 June 2011
Percentage
Owned (%)*
2011
Percentage
Owned (%)*
2010
100
Nil
Nil
Nil
100
95
100
100
46
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
12
Investments continued
(b) Investments Accounted for Using the Equity Method
The Company has a 45% interest in Golden Top Trading Limited, a joint venture in Hong Kong with
Zhejiang Lingyang Medical Apparatus Company of Linhai, China and J&J Stamina company in Taiwan.
Lingyang was to manufacture Analytica’s AutoStart® Burette and Automatic Retractable Syringe, while the
joint venture company was to distribute Analytica’s AutoStart® Burette and retractable needle and syringe
technologies as well as Lingyang’s existing range of medical devices throughout Australia and the South
Pacific.
The company accounts for its share in the assets, liabilities, profit and losses of the joint venture company
using the equity method of accounting. As at 30 June 2011, Golden Top Trading Limited had not
commenced trading and had a total assets of nil (2010: $462) and total liabilities of nil (2010: $462).
The joint venture was voluntarily deregistered as at 30 June 2011.
13 Property, Plant and Equipment
PLANT AND EQUIPMENT
At cost
Less Accumulated Depreciation
Total property, plant and equipment
Movements in Carrying Amounts
Consolidated
2011
$
2010
$
78,583
(58,414)
76,311
(45,570)
20,169
30,741
Movement in the carrying amount for each class of property, plant and equipment between the
beginning and the end of the current financial year:
Consolidated
Balance at 30 June 2011
Balance at the beginning of year
Additions
Depreciation expense
Carrying amount at the end of 30 June
2011
Balance at 30 June 2010
Balance at the beginning of year
Additions
Depreciation expense
Carrying amount at the end of 30 June
2010
Plant and
Equipment
Computer
Equipment
Computer
Software
$
$
$
Total
$
24,568
-
(6,299)
5,534
1,065
(5,951)
639
1,207
(594)
30,741
2,272
(12,844)
18,269
648
1,252
20,169
1,945
28,921
(6,298)
11,539
-
(6,005)
629
954
(944)
14,113
29,875
(13,247)
24,568
5,534
639
30,741
47
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
14
Intangible Assets
Intangible assets
Intellectual Property: at cost
Accumulated Amortisation
15 Trade and Other Payables
CURRENT
Trade and other payables
Trade payables
Other payables - PAYG withholding
Other payables - superannuation payable
Accrued expenses
Other payables
16 Provisions
Consolidated
Opening balance at 1 July 2010
Additional provisions
Consolidated
2011
$
2010
$
145,000
2,052,708
(145,000) (2,052,708)
-
-
Consolidated
2011
$
2010
$
91,837
13,046
-
7,752
671
10,782
14,498
89
-
-
113,306
25,369
Employee
entitlements
Audit fees
Tax return
costs
$
39,825
3,459
$
23,651
(597)
$
2,450
(1,460)
Total
$
65,926
1,402
Balance at 30 June 2011
43,284
23,054
990
67,328
Analysis of Total Provisions
Current
Non-current
Consolidated
2011
$
59,143
8,185
2010
$
60,147
5,779
67,328
65,926
48
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
17
Issued Capital
Ordinary Shares
Unlisted Options
Total
2011
No.
2010
No.
Consolidated
2011
$
2010
$
411,104,182 411,104,182
33,000,000
33,000,000
80,959,107
80,959,107
-
-
80,959,107
80,959,107
The Company has authorised share capital amounting to 411,104,182 ordinary shares of no par value.
(a) Ordinary Shares
At the beginning of the reporting
period
Shares issued during the year
Share purchase plan
Exercise of options employee
incentive scheme
Issued Joint Venture Partner for costs
incurred
Conversion of convertible notes
Consolidated
2011
No.
2010
No.
411,104,182 341,558,792
-
-
-
-
39,965,790
5,500,000
746,269
23,333,331
At reporting date
411,104,182 411,104,182
(b) Ordinary Shares
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held.
At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called; otherwise
each shareholder has one vote on a show of hands.
49
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
17
Issued Capital continued
(c) Capital Management
The Board controls the capital of the consolidated group in order to maintain a good debt to equity ratio,
provide the shareholders with adequate returns and ensure that the group can fund its operations and
continue as a going concern.
The Company’s debt and capital includes ordinary share capital and convertible notes and financial liabilities,
supported by financial assets.
The Board effectively manages the Company’s capital by assessing the Company’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels and share issues.
There are no externally imposed capital requirements.
The Board effectively manages the consolidated group's capital by assessing the Company's financial risks
and adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Company
since the prior year, due to the level of cash held by the Company at year end.
The gearing ratios for the year ended 30 June 2011 and 30 June 2010 are as follows:
Trade and other payables
Loan from a director
Short-term provisions
Less Cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Consolidated
2011
$
113,306
268,700
59,143
(1,342)
2010
$
25,369
-
60,147
(419,383)
439,807
540,012
(333,867)
743,224
979,819
45.00%
409,357
(82.00)%
50
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
18 Operating Segments
Segment Information
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are reviewed and used
by the Board of Directors (chief operating decision makers) in assessing performance and determining the
allocation of resources.
The Company is managed primarily on the basis of product category and service offerings as the
diversification of the Company’s operations inherently have notably different risk profiles and performance
assessment criteria. Operating segments are therefore determined on the same basis.
Basis of accounting for purposes of reporting by operating segments
(i) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with
respect to operating segments, are determined in accordance with accounting policies that are consistent to
those adopted in the annual financial statements of the consolidated group.
(ii) Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the
majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable
on the basis of their nature and physical location.
51
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
18 Operating Segments Continued
(iii) Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the
consolidated group as a whole and are not allocated. Segment liabilities include trade and other payables
and certain direct borrowings.
(a) Segment performance
Medical Devices
Pharmaceuticals
Corporate
Total
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
6,100
-
1,800
-
6,100
1,800
-
-
-
-
-
-
-
266,778
-
6,100
288,748
266,778
1,800
288,748
266,778
288,748
272,878
290,548
REVENUE
Sales
Other revenue
Total segment
revenue
Reconciliation of
segment
revenue to group
revenue
Segment results
(367,084)
(525,037)
(7,500)
(76,190)
Assets
Liabilities
Other
Assets
acquired
Depreciation
Impairment loss
Research and
development
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
171,408
989,346
441,148
(686,610)
(203,176)
(1,287,837)
834,519
91,295
989,346
441,148
834,519
91,295
2,272
12,844
29,875
13,247
2,272
12,844
-
29,875
13,247
-
367,084
525,037
7,500
76,190
-
-
374,584
601,227
(b) Secondary segments
Geographic segments
The secondary segment details are listed below by geographical location:
Location
Australia
Sales
Segment Assets
Assets Acquired
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
6,100
1,800
989,346
834,519
2,272
29,875
52
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
19 Cash Flow Information
(a) Reconciliation of Cash Flow from Operations with Loss after Income Tax
Loss for the year
Non-cash flows in profit
- Depreciation
- Fair value adjustment CBio
- Costs settled by way of
share-based payment
- CBio interest converted to shares
Changes in assets and liabilities,
net of the effects of purchase
and disposal of subsidiaries
- (Increase)/decrease in trade
and term receivables
- (Increase)/decrease in
prepayments
- (Increase)/decrease in
inventories
- (Increase)/decrease in other
assets
- Increase/(decrease) in trade
payables and accruals
- Increase/(decrease) in
provisions
Consolidated
2011
$
2010
$
(203,176) (1,287,837)
12,844
(381,320)
13,247
245,507
-
-
50,000
(22,356)
(208,999)
52,366
1,538
-
5,306
(21,544)
-
-
87,936
(77,985)
1,402
2,663
(684,469) (1,045,939)
20 Share-based Payments
Remuneration Options
The following share-based payment remuneration arrangements existed at 30 June 2011:
On 26 November 2008, 33,000,000 options were granted under the Analytica Limited Employee Share
Option Plan to take up ordinary shares at an exercise price of $0.05 each. The options vest immediately
and must be exercised before 30 June 2012.
All options granted under the Analytica Limited Employee Share Option Plan are for ordinary shares in
Analytica Limited, which confer a right of one ordinary share for every option held. The options hold no
voting or dividends rights and are not transferable. All options exercised are required to be settled for cash.
The total expense relating to share based payment transactions was $nil (2010: nil).
For details of options issued to key management personnel, refer to Note 5 - Key Management Personnel.
53
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
20 Share-based Payments continued
A summary of the movements of all Company options issued is as follows:
Options outstanding as at 30 June 2009
Exercised
Expired
Options outstanding as at 30 June 2010
Options exercisable as at 30 June 2010:
Exercised
Expired
Options outstanding as at 30 June 2011
Weighted
Average
Exercised
Price
0.07
Number
48,525,000 $
(5,500,000) $
(0.03)
(10,025,000) $
(0.02)
33,000,000 $
33,000,000 $
0.05
0.05
-
-
-
-
33,000,000 $
0.05
If all unlisted options are exercised in accordance with their terms of issue, 33,000,000 shares would be
issued (2010: 33,000,000) and Contributed Equity would increase by $1.65m (2010:$1.65m).
There were no options exercised during the year ended 30 June 2011(2010:5,500,000). (2010: The options
had and exercise prices of $0.03 each.)
The options outstanding at 30 June 2011 have an exercise price of $0.05 and a remaining contractual life of 1
year.
21 Events After the End of the Reporting Period
The financial report was authorised for issue by the board of Directors on the dated that the Directors
Declaration was signed.
There have not been any matters or circumstances that have arisen since the end of the year that have
significantly affected, or may significantly affect the operations of the Company, the results of those
operations, or the state of affairs of the Company in financial years after the 2011 financial year other than
the significant decline (over 50%) in the market share price of the Company’s investment in CBio Limited.
54
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
22 Related Party Transactions and Balances
a) Transaction with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
Directors receive a fixed Director's fee. These payments are detailed in the Remuneration Report which
forms part of the Director's Report. If any Director performs additional services for the consolidated group
they are paid a fee based on normal commercial terms.
b) Balances with related parties:
Borrowings - Loan from a director related
entity
Consolidated
2011
$
2010
$
268,700
268,700
-
-
Director loan from Dr Michael Monsour represents an unsecured loan from MPAMM Pty Ltd, a related entity
associated with Dr Monsour. The loan is repayable on demand and bears interest at 11.04% per annum
(annual variable rate per Westpac Banking Corporation for business loans, plus 2%). The interest charged
for the year ended 30 June 2011 amounted to $5,333 (2010: nil). The maximum amount available under the
loan agreement is $400,000 so $131,300 of the facility was undrawn at 30 June 2011.
c) Transactions with Directors:
During the year accounting services were provided to the Company by Avance Chartered Accountants, a firm
which director Mr Ross Mangelsdorf is a partner. Fees of $49,500 (2010 $nil) were charged for these
services and were unpaid as at 30 June 2011.
23 Financial Risk Management
The group's financial instruments consist mainly of cash deposits with banks, accounts receivable and
investments in convertible notes. Financial liabilities consist of accounts payable and convertible notes
issued by the group. The main purpose of financial instruments is to raise finance and manage capital
requirements for group operations. The Board of Directors meets on a regular basis to analyse financial risk
exposure and to evaluate financial management strategies in the context of the most recent economic
conditions and forecasts. The board's overall risk strategy seeks to assist the Company in meeting its
financial targets, whilst minimising potential adverse effects on financial performance.
The main risks the Company is exposed to through its financial instruments are interest rate risk, liquidity risk
and credit risk. An outline of these risks and related risk management policies are summarised below.
55
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
23 Financial Risk Management continued
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in
the accounting policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Financial assets at fair value through profit
or loss
- Investment in CBio
Trade and other receivables
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
Trade payables
Loan from a director related entity
Other payables
Total Financial Liabilities
(a) Credit risk
Consolidated
2011
$
2010
$
1,342
419,383
658,169
270,695
276,849
61,731
930,206
757,963
91,837
268,700
8,423
10,782
-
-
368,960
10,782
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets, is the carrying amount, net of any provisions for doubtful debts, as
disclosed in the Statement of Financial Position and notes to the financial report. There are no trading
terms in relation to sundry receivables. No collateral is held as security over any financial assets.
There are no past due financial assets at 30 June 2011.
(b) Liquidity risk
Liquidity risk arises from the possibility that the consolidated group might encounter difficulty in settling
its debts or otherwise meeting its obligations related to financial liabilities. The consolidated group
manages risk through the following mechanisms:
•
•
•
•
preparing forward looking cash flow analysis in relation to its operational, investing and financial
activities;
using derivatives that are only traded in highly liquid markets;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
56
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
23 Financial Risk Management continued
(b) Liquidity risk continued
•
•
•
•
maintaining a reputable credit risk profile;
managing credit risk related to financial assets;
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Bank
overdrafts have been deducted in the analysis as management does not consider that there is any
material risk that the bank will terminate such facilities. The bank does however maintain the right to
terminate the facilities without notice and therefore the balances of overdrafts outstanding at year end
could become repayable within 12 months. Financial guarantee liabilities are treated as payable on
demand since the consolidated group has no control over the timing of any potential settlement of the
liabilities.
Cash flows realised from financial assets reflect management's expectation as to the timing of
realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented
in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not
reflect management's expectations that banking facilities will be rolled forward.
Financial asset and liability maturity analysis
Within 1 Year
1 to 5 Years
Over 5
Total Contractual
Years
Cash Flow
Consolidated
2011
2010
2011
2010
2011 2010
2011
2010
$
$
$
$
$
$
$
$
Financial liabilities due for payment
Loan from Director
related entity
Trade and other
payables (excluding
estimated annual
leave)
268,700
-
91,837
10,782
Total expected
360,537
10,782
outflows
Financial assets – cash flows realisable
Cash and cash
equivalents
Trade and other
receivables
1,342
419,383
270,695
61,731
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
268,700
-
91,837
10,782
360,537
10,782
1,342
419,383
270,695
61,731
57
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
Held for trading
658,169
276,849
Total anticipated
930,206
757,963
inflows
Net (outflow) inflow
on financial
instruments
569,669
747,181
-
-
-
-
-
-
-
-
-
-
-
658,169
276,849
930,206
757,963
-
569,669
747,181
23
Financial Risk Management continued
(c) Net Fair Values
The net fair values of financial assets and financial liabilities approximate their carrying value. Except for
the company’s investment in CBio shares, no financial assets and financial liabilities of the group are
readily traded on organised markets.
Embedded derivatives relating to convertible notes are valued using discounted cash flow models based
on interest rates existing at reporting date for similar types of convertible instruments. Loans and
receivables due and receivable beyond twelve months are carried at their present value which
approximates net fair value. The aggregate net fair values and carrying amounts of financial assets and
financial liabilities are disclosed in the Statement of Financial Position and in the notes to and forming
part of the financial report.
(d) Interest Rate Risk - managed
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting
date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate
financial instruments. The Company is predominantly exposed to cash flow interest rate risk as no
financial assets or liabilities are measured at fair value subsequent to initial recognition. Cash flow
interest rate risk in respect of financial liabilities is managed by the use of variable rate debt.
At 30 June 2011 the provision line of credit provided by M.P.A.M.M. Pty Ltd (as per the agreement dated
1 July 2010) for an advance up to a maximum sum of $400,000 is subject to the annual variable rate per
Westpac Banking Corporation for business loans, plus 2%. As at the 30 June 2011 this line of credit was
drawn to $268,700. The balance of the group’s debt as at 30 June 2011 was variable rate debt.
Cash and cash equivalents are held in floating rate, at call deposits.
Sensitivity Analysis
The following table illustrates sensitivities to the consolidated group's exposures to changes in interest
rates. The table indicates the impact on how profit and equity values reported at balance date would
have been affected by changes in the relevant risk variable that management considers to be
reasonable possible. These sensitivities assume that the movement in a particular variable is
independent of other variables.
58
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
Change in profit
-Increase in interest rate by 2%
-Decrease in interest rate by 2%
Change in equity
-Increase in interest rate by 2%
-Decrease in interest rate by 2%
Consolidated
2010
2011
$
$
(5,347)
5,347
8,378
(8,378)
(5,347)
5,347
8,378
(8,378)
24 Parent information
The following information has been extracted from the books and
records of the parent and has been prepared in accordance with
Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
STATEMENT OF COMPREHENSIVE INCOME
Loss for the year
Total comprehensive income
Parent
2011
$
2010
$
311,008
526,893
989,346
834,483
441,149
85,516
449,334
91,295
80,959,107
80,959,107
2,630,508
2,630,508
(83,049,603) (82,846,427)
540,012
743,188
(203,176)
(1,287,829)
(203,176)
(1,287,829)
59
Analytica Limited
Notes to the Financial Statements
For the Year Ended 30 June 2011
Guarantees
Analytica Limited has not entered into any guarantees in the current or the previous financial year in respect of
debts of its subsidiaries.
Contingent Liabilities
At balance date the estimate of the potential financial effect of contingent liabilities that may become payable is
nil.
Contractual Commitments
As at the balance date, the Company has unfinalised contracts for the manufacture of Naltrexone implant pellets
used in planned clinical trials. The estimated remaining contracted costs to complete the manufacture of the
Naltrexone implants is approximately $144,000.
The ability of the company to finalise these contracts will depend largely on the availability of government
assistance. Subsequent to the balance date, the Company has submitted an application for funding with the
National Health and Medical Research Council. The grant application has been made in conjunction with the
University of Sydney. Should the required funding be in place, it is expected these contracts will be finalised by
30 June 2012.
25 Reserves
(a) Option Reserve
The option reserve records items recognised as expenses on payment of employee share-based
consideration.
Option reserve
Opening balance
Movement
Closing balance
Consolidated
2011
$
2010
$
2,630,508
-
2,630,508
-
2,630,508
2,630,508
60
Analytica Limited
Directors' Declaration
The Directors of the Company declare that:
1. The financial statements and notes, as set out on pages 18 to 58, and the remuneration disclosures that
are contained in the Remuneration Report are in accordance with the Corporations Act 2001, and:
a) comply with Accounting Standards and Corporations Regulations 2001; and
b) give a true and fair view of the financial position as at 30 June 2011 and of the performance for the
year then ended on that date of the company and consolidated group;
2. The financial report also complies with International Financial Reporting Standards as disclosed in Note 1;
3. The Chairman has declared that;
a)
b)
c)
the financial records of the company for the financial year have been properly maintained in accordance
with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with accounting standards; and
the financial statements and notes for the financial year give a true and fair view.
4. Subject to the reference to Going Concern in Note 1(b), in the directors’ opinion there are reasonable
grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Director ..................................................................
Dr Michael Monsour
Dated this 22nd day of September 2011
61
Analytica Limited
Independent Audit Report to the members of Analytica Limited
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ANALYTICA LIMITED
We have audited the accompanying financial report of Analytica Limited (the company) and Analytica
Limited and Controlled Entities (the consolidated entity), which comprises the statement of financial
position as at 30 June 2011 and the statement of comprehensive income, the income statement, statement
of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from time to
time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also
state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that
compliance with the Australian equivalents to International Financial Reporting Standards (IFRS) ensures
that the financial report, comprising the financial statements and notes complies with IFRS.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation of the financial
report that gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001. We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of Analytica Limited on 19 September 2011, would be in the same terms if
given to the directors as at the time of this auditor’s report.
62
Analytica Limited
Additional Information for Listed Public Companies
The following information is provided in accordance with ASX Listing Rule 4.10.
1.
a.
Shareholding Information (current as at 21 September 2011)
Substantial Shareholders
The current substantial shareholders of the Company and the number of securities to which they have a
relevant interest are detailed below:
Name
Warren Stephen Brooks and Brooks Investments Pty Ltd
Number of
Ordinary Shares
% of Issued
Capital
22,223,484
5.04%
b.
Distribution of Shareholders
Category (size of holding)
Ordinary Shares
Unlisted Options
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Number of
Holders
810
249
150
783
575
2,567
Units Held
395,661
677,532
1,318,770
36,147,183
372,565,036
411,104,182
Number of
Holders
Units Held
-
-
-
4
4
-
-
-
-
33,000,000
33,000,000
c.
Less than marketable parcels
The number of shareholders holding less than a marketable parcel of 22,728 ordinary shares (based on
the share price of $0.022 on 21/09/11) is 1,431 and they hold 6,143,703 ordinary shares.
d.
Voting Rights
Each ordinary share is entitled to one vote per share without restriction.
e.
20 Largest Shareholders - Ordinary Shares
Name
IGNATIUS LIP PTY LTD
W BROOKS INVESTMENTS PTY LTD
ANNE MONSOUR
M P MONSOUR MEDICAL PRACTICE PTY LTD
BASILDENE PTY LTD
MR WARREN STEPHEN BROOKS
MPAMM PTY LTD
MRS SALLY DIANA YEATES
JAYEM PTY LTD
MRS MARGUERITE MARY GALLAGHER
SABINA LIP
BH HAAGSMA
MR VICTOR PEREIRA
RG & MA BAKER
Number of
Ordinary Shares
Held
17,613,690
16,706,819
11,669,277
% of Issued
Capital
4.28
4.06
2.84
7,691,790
5,725,000
5,516,665
5,400,972
4,360,849
4,181,819
4,000,000
3,853,658
3,825,596
3,681,823
3,551,430
1.87
1.39
1.34
1.31
1.06
1.02
0.97
0.94
0.93
0.9
0.86
64
Analytica Limited
Additional Information for Listed Public Companies
Name
SIRIUS PROPERTY GROUP PTY LTD
PELLA COMINO
MR BRIAN ANTHONY GALLAGHER + MRS MARGUERITE MARY
GALLAGHER
TAMBIEN PTY LTD
MR ROBERT ANTHONY HOOK + MRS FRANCES LEISA
HUTCHINSON
NEATFORD PTY LTD
Total
Number of
Ordinary Shares
Held
3,462,335
3,011,937
% of Issued
Capital
0.84
0.73
3,000,037
2,975,117
2,919,819
2,808,946
115,957,579
0.73
0.72
0.71
0.68
28.21
f.
Voluntary Escrow
There are no Analytica securities under voluntary escrow.
g.
Share Buy-Backs
There is no current or planned buy-back of the Company’s shares.
2.
The name of the Company Secretary is Ms Jennie Yuen.
3.
The address of the Company’s registered office in Australia is:
C/- Company Matters Pty Limited
Level 12, 680 George Street
Sydney NSW 2000
The Company’s principal place of business is:
Level 1, 85 Brandl Street
Brisbane Technology Park
Eight Mile Plains QLD 4113
Telephone (07) 3278 1950
4.
The Company’s registers of securities are held at the following address:
(Share Registry)
Link Market Services Limited
324 Queen Street, Brisbane QLD 4000.
5.
Stock Exchange Listing
All the ordinary shares of the Company are quoted on the Australian Securities Exchange (ASX) under
the share code “ALT”.
65