Annual Report
2015
Confidence through control 2
Analytica Limited
ABN: 12 006 464 866
3
Contents
Chairman’s Letter
CEO Report
Consolidated Financial Statements
Directors’ Report
Auditors Independence Declaration under Section 307C of the Corporations Act 2001
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Summary of Significant Accounting Policies
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Additional Information for Listed Public Companies
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Annual report 2015Confidence through control
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CHAIRMANS LETTER
5
Dear Shareholder,
On behalf of the Board and Management, I am
pleased to present Analytica’s 2015 Annual Report.
This year has seen us make real progress towards
our goal of making our lead product, the PeriCoach
System, the leading brand worldwide to treat stress
urinary incontinence.
Stress urinary incontinence is a condition with
significant unmet medical need, representing a
huge market opportunity for Analytica. It affects one
in three women worldwide or up to a billion women
across the globe.
Our goal to commercialise the PeriCoach System
can be summarised in four steps:
1. Build the best-in-class product.
2. Comprehensively prove that it works.
3. Prove market acceptance and channels
4. Look for partnership opportunities with
multinational medical device companies
years of disciplined
research and
Seven
development; extensive market
research; and
clinician input at both advisory board level and in-
field gives us confidence that PeriCoach is the best-
in-class product to treat stress urinary incontinence.
Most importantly, we have achieved key regulatory
milestones in Australia, US and Europe in record
time and also launched an enhanced version of
PeriCoach in Australia, the UK, US and Ireland.
I am pleased to report that initial sales of the product
are indeed encouraging and growing each month.
Our analysis of the data provided by existing
PeriCoach users shows that the product works to
strengthen the pelvic floor muscles. This is further
supported by the compelling evidence from clinician
case studies, papers and patient testimonials. The
most gratifying point is that this data shows that
PeriCoach is making a real difference to the lives of
women that suffer from stress urinary incontinence.
Our post-approval clinical trial, which commenced
in April, should also provide independent verification
for PeriCoach and we expect results from the trial in
the second quarter of 2016.
We believe this should be a value inflection point for
Analytica, further de-risking the product and helping
us to achieve a licensing deal with a potential
partner and increased sales.
Our appointments of Dr Thomas Lönngren and Carl
Stubbings to our Board will help us with our partnering
efforts. Both Thomas’ and Carl’s experience
in
commericialisation and networks in both the US and
European markets will be beneficial to us.
In addition, we have further enhanced our marketing
and commercialisation efforts with the appointment
of Megan Henken as President of Global Marketing.
Our services agreement with SalesForce4Hire, a US-
based commercialisation solutions provider, will also
help us grow sales in the US – our largest market.
We will also continue our research and development
efforts and continue to make further enhancements
to PeriCoach for the treatment of stress urinary
incontinence. At the same time, Analytica is also
looking at other significant pelvis floor conditions
for PeriCoach, such as pelvic organ prolapse and
sexual dysfunction, both very large markets.
On behalf of the board, I would like to thank CEO
Geoff Daly and his team for their tremendous efforts
throughout the year. This would not be possible
without the commitment of all our employees and
shareholders. We thank you for your continued
support and look forward to another successful
year ahead.
Yours sincerely,
Dr. Michael Monsour
Chairman
Annual report 2015Confidence through control 6
CEO REPORT
Dear Shareholders,
I am pleased to report on Analytica’s progress during
the 2015 financial year. We have made significant
advancements with our key system, PeriCoach, and
we have built a successful foundation for further
sales growth and market adoption of the system in
the years ahead.
Building foundations has been and will continue to
be our immediate focus. The time and resources
committed to market and product research, the
involvement of clinicians directly with the company
and with our medical advisory boards and the
extensive controlled market release last year have
produced a best-in-class product. We will continue
to make further enhancements and continue
developing new features for PeriCoach to ensure it
remains a unique and compelling product.
PeriCoach represents a first-of-its-kind solution for
pelvic floor conditions, particularly stress urinary
incontinence. PeriCoach is the only medical device
that is data driven, measures pelvic floor muscle
force and gives both sufferers and clinicians
updates on progress with muscle strength. Google
and Facebook have amply demonstrated that data
is the fastest growing currency. The accumulation
of that data is building the largest database in the
world on the pelvic floor.
I am so proud of the number of critical regulatory and
marketing milestones for PeriCoach that we have
achieved this year. These milestones position us
well for achieving our aim of establishing PeriCoach
as the globally recognised brand for stress urinary
incontinence.
In March, we achieved 510(k) clearance with
the US FDA – the world’s biggest device market.
That incredibly short approval time exemplifies
the disciplined and comprehensive strength of
our research and development team. In addition
to achieving CE marking in Europe in October,
the 510(k) clearance gives us the key regulatory
milestones to sell PeriCoach globally.
With the information from the limited market release,
the Version 2 design of PeriCoach was finalised
and in production for the January release of the
product in the Australia and New Zealand markets.
This release featured both the Apple and Android
operating systems to cover the vast majority of the
mobile device market. PeriCoach was also launched
in the US, UK and Ireland within three months of
achieving FDA approval.
have
fantastic
achievements
been
These
accomplished in a very short time frame and are
testament to the efforts of our development team.
Pleasingly, initial data shows very encouraging
interest and sales in both Australia and the US.
Building the best-in-class product, proving it works
beyond expectations and demonstrating market
demand is the Board’s strategy.
In addition to the build-up of our sales activities,
Analytica is conducting a clinical trial to provide
independent confirmation to help drive market
adoption of PeriCoach and recruitment for the trial
commenced in April. While the trial is not required
for registration or sales clearance, our aim is to
provide Analytica with the foundation for market
differentiation and clinical confidence. The trial will
also provide us with the efficacy information we
require for reimbursement studies.
We have also made important steps in terms
of driving future sales growth and encouraging
adoption across global markets. We have
strengthened our US distribution network by
entering a distribution agreement with Current
Technology Inc in the US. Under this agreement,
Current Technology Inc will purchase PeriCoach
units and engage in marketing and sales activities
through its existing network.
In addition, in September, we announced a partnership
with SalesForce4Hire to grow sales of PeriCoach
in the US market. SalesForce4Hire is a leader in
providing commercialisation solutions for the medical
device, diagnostic and healthcare IT industries and
specialises in product launches in the US market
and will be responsible for sales and marketing of
PeriCoach in the US. Both partnerships will enhance
Analytica’s own US-based distribution efforts.
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To achieve this aim, we are investigating possible
partnerships with
larger marketing and sales
organisations and also looking at potential new
markets such as Continental Europe, Canada, China,
Israel, Turkey and the UAE. We are also looking at
potential new indications for the product, such as
sexual dysfunction and pelvic organ prolapse to
expand PeriCoach’s market reach.
At the same time, we will continue to make
enhancements to PeriCoach to add new features to
the product such as new sensors, new app upgrades
and new analysis features.
To support our marketing efforts in Australia and the
US and our general working capital requirements, we
undertook a rights issue which raised $2.9 million.
Over the next year, we look forward to increasing
PeriCoach’s presence
in existing markets and
expanding our market with the aim of increasing
sales in market to commercially sustainable levels.
I want to thank all of our employees, Board of
Directors and shareholders for your support as
we continue with these efforts. With PeriCoach,
Analytica is making strong headway in changing
the lives of women living with stress urinary
incontinence and I look forward to updating you on
our continued progress.
Geoff Daly
Chief Executive Officer
Annual report 2015Confidence through control
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The PeriCoach System
The PeriCoach system includes a device, a free downloadable app and secure
portal which allows both patient and clinician to track and monitor progress
The Device
The App
Small, discreet and easy to use. The device
has three patent-pending biofeedback
sensors to measure the pelvic floor muscle
forces directly.
Free smartphone apps that manage data
from the sensor and provides real time audio
and visual feedback during exercises. Also
provides reminders to keep motivation high
Web Portal
Charging Case
A secure website where the patients and
clinicians can access exercise history and
news.
A robust, discreet, and highly mobile
recharging and storage case for the device.
We love sharing the stories of women around the globe exercising their way to
improved pelvic health with the PeriCoach.
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“After nine years, three natural births (one forceps) and an estimated $10,000+
worth of clinical pilates, my pelvic floor strength was still 1 out of 5. My women’s
health physiotherapist put me onto PeriCoach which is perfect for me, as I am a
visual learner who needs immediate feedback! I have just had my three month
review and my pelvic floor strength is now rated as a 3 out of 5. I am absolutely
thrilled and can honestly recommend it to anyone, my sister signed up for hers last
week.”
Julia, WA
“Since using the PeriCoach I am back at the gym without the worry of wetting my
pants! I no longer have accidents in pump class, I can jump on the trampoline with
my children, and I don’t have to worry about stocking up on pads!”
Cate A, Sydney
“The best part of the Pericoach is the feedback and the ability to actually visualize
your strength of contractions and how long you can maintain it without the worry
of counting seconds and repetitions. The app is great and is almost akin to other
games available on android…..it appeals to our generation’s competitive nature and
the desire to keep beating our highest score”
Rebecca S, Brisbane
“I think PeriCoach is one of the best things I have ever used. I use it twice a day, and
love the reminder when I’ve missed out for 24 hours. It helps me to stay motivated,
and I think I have done more exercises than I would have done, due to the feedback.
I have quite a weak muscle and after 3 weeks using the PeriCoach, I noticed a
difference. I have a moderate prolapse, and stressurinary incontinence, and both
have improved in 3 weeks.”
Anonymous, Adelaide
“PeriCoach guides my muscle strength, provides the visual to know I’m contracting
appropriately. I love it; I feel wonderful.”
Penny C, Illinois, US
“The Pericoach has helped me to continue an active and healthy lifestyle. Using the
Pericoach for regular and consistent Kegel exercises has helped me avoid surgery
for P.O.P. and eliminated the need to use a pessary.”
Louise, Illinois, US
Outcomes in UI improvement may vary among users depending on clinical
condition and device usage.
Annual report 2015Confidence through control
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The Incontinence
Market
Asthma
2 million
Anxiety
disorders
2.3 million
Arthritis
3.1 million
Incontinence
4.8 million
Urinary Incontinence Affects
1 IN 3 WOMEN
and up to a
billion women
worldwide
50%
don’t report it
CONSOLIDATED
FINANCIAL
STATEMENTS
12
Directors’ Report
For the Year Ended 30 June, 2015
The directors present their report, together with the interim financial statements of the Group, being Analytica
Limited (the Company) and its controlled entities, for the year ended 30 June, 2015.
1.
General information
Information on directors
The names, qualifications, experience and special responsibilities of each person who has been a
director during the year and to the date of this report are:
Dr Michael Monsour
Chairman (appointed 28 June 2004)
Qualifications
MBBS-HONS, FACRRM, FAICD
Experience
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.
Interest in shares and
options
Direct:
Dr MP Monsour Director’s interest in ordinary shares 2,606,337
Indirect (ordinary shares):
MPAMM Pty Ltd 44,687,785
Halonna Pty Ltd 97,164,451
MP Monsour Medical Practice Pty Ltd 19,747,277
Other related parties
Ordinary shares 2,037,481
Unlisted options
13,00,000 @3.24c expire 29/10/2018
Listed Options
ALTO Options 16,666,666 @1.1c Expire 29/02/2016
ALTOA Options 16,666,666 @1.4c Expire 28/02/2018
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Mr Ross
Mangelsdorf
Executive Director (appointed 7 October 2008)
Qualifications
B.Bus, FCA, CTA, MAICD
Experience
Mr Mangelsdorf is a Director of a Queensland based land development
Company and has been a Director/partner of a chartered accounting firm
for 34 years. He works with SME production, manufacturing and retail firms
assisting with business, taxation and management services.
Interest in
shares and
options
Direct:
Ross Mangelsdorf
Director’s interest in ordinary shares: 21,332
Indirect:
RM & JM Mangelsdorf
Ordinary shares 21,332
Tambien Pty Ltd
Ordinary shares 25,539,125
Other related parties:
Ordinary shares 3,420,004
Unlisted options:
10,000,000 @3.24c expire 29/10/2018
Listed Options:
ALTO Options 2,614,995 @1.1c Expire 29/02/2016
ALTOA Options 2,614,995 @ 1.4c Expire 28/02/2018.
Mr Mangelsdorf performs the function of Chief Financial Officer.
Special
responsibilities
Mr Warren Brooks
Qualifications
Securities Institute Certificate, Diploma in Financial Planning
Experience
Warren previously had 30 years experience working in Investment Banking
and Stockbroking.
Interest in
shares and
options
Indirect director’s interest:
W Brooks Investments Pty Ltd
Ordinary shares 48,645,000
Unlisted Options:
8,000,000 @3.24c Expire 29/10/18
Listed Options
ALTO Options 5,405,000 @ 1.1c Expire 29/02/2016
ALTOA Options 5,405,000 @1.4c Expire 28/02/2018
Other
directorships in
listed entities
held in the
previous three
years
Mr Brooks was the Managing Director and Founder of boutique Financial
Advisory firm Clime AFM Pty Ltd which was a wholly owned subsidiary of
Clime Investment Management Ltd, an ASX listed Company.
Warren founded Australian Financial Management (Investment) Pty Ltd in
1998 and sold the business to Clime Investment Management
Annual report 2015Confidence through control
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Mr Carl Stubbings
Non Executive Director (appointed 13 January 2013)
Qualifications
Bachelor or Science degree from the Queensland University of Technology
Experience
Mr Stubbings’ experience in the sector spans over 30 years with
a focus on medical diagnostics as well as biotechnology. He has
in sales with a particular emphasis on marketing
specialised
across North America, Latin America, Asia Pacific and Europe
roles covering manufacturing and administration.
as well as
Previously a board member of the Queensland North America Biotech
Advisory Council.
Interest in shares
and options
Indirect director’s interest:
C&K Stubbings Super Fund
Ordinary shares 2,746,322
Listed Options:
ALTO Options 305,146 @ 1.1c Expire 29/02/2016
ALTOA Options 305,146 @ 1.4c Expire 28/02/2018
Other current
directorships in
listed entities
Currently focused on developing and executing the commercialisation
strategy including licensing and partnership agreements, Mr Stubbings’
position as chief business officer at ASX-listed Benitec Biopharma Limited
also sees him responsible for managing shareholder and investor relations.
Mr Stubbings is also currently a non-executive director of unlisted
public company Sienna Diagnostics, providing strategic direction for the
company’s high performing cancer diagnostic test.
Dr Thomas Lönngren
Appointed Non-Executive Director 10 August 2015
Qualifications
Experience
Degree in Pharmacy, Master of Science Degree in social and regulatory
pharmacy. Honorary Doctorate from University of Bath, UK (2011),
University of Uppsala, Sweden (2008), and Honorary Fellow of the Royal
College of Physicians and Honorary Member of the Royal Pharaceutical
Society of Great Britain.
Dr Lönngren has a profound knowledge and experience in drug and
medical device regulation, and health economics across the world’s
major markets. His extensive network of contacts in multinational
pharmaceutical and medical device companies and capital markets will
be a great asset for our Company as we expand our operations into the
United States and Europe.
Other current
directorships in
listed entities
Dr Lönngren’s current positions include Director and Founder of Pharma
Executive Consulting Ltd in London, Strategic Advisor at NDA Group in
Sweden, Germany, UK and Cambridge, MA, US and Non-Executive Director
of Global Kinetics Corporation in Australia.
Directors have been in office since the start of the year to the date of this report unless otherwise
stated.
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Principal activities and significant changes in nature of activities
The principal activities of the Group during the year were:
•
•
•
•
The development of strategies on commercial sales of PeriCoach;
The development of intellectual property of medical device and mobile health application in
relation to patents and systems in the pelvic floor exercise field (PeriCoach);
Development of intellectual property of medical device to assist neurologists and rehabilitatise
treatment of muscular spasticity. (ELF-2).
The development of intellectual property in the medical device field in relation to patents in the
burette field (AutoStart Infusion System);
•
The development of strategies for commercial sales of burette products;
There were no significant changes in the nature of the Group’s principal activities during the year.
2.
Operating results and review of operations for the year
Operating results
The consolidated loss of the Group amounted to $ (5,315,604), after providing for income tax. This
represented an increase on the loss of $(2,139,596) result reported for the year ended 30 June
2014 of $(3,176,008). Significant expense increases for marketing of $1,896,173 to $2,292,793
(2014:$396,620) with the release of the next phase of the PeriCoach system. Research and
development increased by $639,714 to $2,835,508 (2014:$2,195,794) was largely due the continued
development of the PeriCoach system. Administration costs increased by $498,869 to $1,014,953
(2014:$516,084).
Review of operations
A review of the operations of the Group during the financial year and the results of those operations
show are as follows:
PeriCoach®
Development
The PeriCoach system qualifies for the Research and Development Tax concession. $988,107
was received in October for the 2014 year. A claim has been lodged for the 2015 year due to the
considerable and significant Research and Development for the year. Although the PeriCoach is now
in the market, the board strongly believe development must continue to secure and enhance the
company value.
(a)
Hardware
i) The PeriCoach is a sophisticated medical device designed to collect data not been collected
before outside of a clinical environment. The limited market release identified issues with the
Bluetooth transmission from device to phone. With data from a range of users , makes and
models of phones the existing standard did not meet our reliability expectation. As a result a
recently developed Bluetooth standard was adopted which required rework of the device.
ii) An additional benefit of reworking the device also included features developed since the first
build.
Annual report 2015Confidence through control 16
(b)
Software
i) There is a huge amount of data being collected by the sensors. This data is transmitted to the
cloud for further analysis. As well as transmitting the data, the phone simplifies the data to
provide immediate feedback to the user. This programming is ongoing as more data is collected
opportunities are identified.
ii) With the release for sale and feedback from the limited release the purchase and payment
system was further refined. For both the UK and the US, ordering and payment portals needed
to be created and linked to each country’s logistics.
iii) The web page has and will continue to evolve to stay fresh and interesting to consumers.
(c)
Regulatory
i) Australian registration (TGA) and European (CE) was achieved in 2014 supported by extensive
documentation and testing.
ii) Achieving United States (FDA) approval in March 2015 was a major investment and milestone.
Not only is the United States market huge, the registration carries weight in other jurisdictions.
This registration permits the PeriCoach to be sold by prescription.
(d)
Testing
i) Controlled market release. This stage of testing was carried out from June through to December
2014. The data and feedback from this testing contributed to many small adjustments and
changes to enhance useability and accuracy. Of greater significance was the complete
redevelopment of the Bluetooth platform. This complex redevelopment not only solved some
persistent issues it also addressed multiple operating systems but greatly contributed to future
proofing. Not only will future enhancements and upgrades increase the capability of the system,
there will also be significant cost savings as a result.
ii) Clinical Trial. Although not required by regulatory regimes, Analytica are conducting a full clinical
trial for incontinence treatment and sexual function. This trial is to provide independent verified
proof of the PeriCoach system, for consumers, clinicians and partners.
iii) Clinical advisory boards in both Australia and the United States were formed to provide expert
guidance as well as design the clinical trial. To achieve the statistical significance required
this is a large trial. As a result considerable resources and time have been deployed to recruit
participants.
Marketing
•
•
•
•
•
•
•
•
•
•
The sales team was recruited and have been visiting specialists and representing the company
at clinicians conferences.
Mail and email campaigns targeting GP’s and their support team.
Articles in GP publications. Engagement of clinical advisory board members in events.
Expanded PeriCoach health care network.
Clinical trials commenced.
Completion by jacobstahl, specialist medical device PR agency, New York, PeriCoach marketing
strategy.
Attendance by sales team at mother’s expo’s and publishing brochures, bathroom advertising,
trials of pharmacy health and sales promotions.
Sponsorship of sporting events, developing and releasing YouTube video promotions, training
and testimonials.
Media activity in women’s magazines.
United States: PeriCoach presence at key clinician conferences. Logistics and distribution in
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place and sales release in June 2015. US early adopters program underway. Help desk trained
and operational. Active assistance of key opinion leaders.
European: Logistics, distribution and sales channels in place and sales commenced June 2015.
Data warehousing in operation and early statistics developing, with preliminary statistics
published.
Key social media bloggers activity including their support of local and national events.
Expanded web content, digital media campaign including Google Adwords, remarketing,
Facebook advertising, conversion rate optimisation.
•
•
•
•
Partnership
The US and EU markets are huge markets. Analytica’s modest resources cannot address these
markets effectively so the board are actively engaged in discussions with potential partners. Directors
Carl Stubbings and Dr Thomas Lönngren both have experience and networks in the US and EU.
ELF2
Analytica has deferred development of this medical device for treatment of muscular spasticity,
devoting resources to the PeriCoach. The ELF2 device delivers a low-frequency voltage used by
neurologists to locate nerve endings during Botulinum neurotoxin A injection treatment. Analytica’s
development of this device, licenced from Gorman ProMed Ltd in 2012, is to enhance usability
features of a device currently in use and respected by the market. Analytica has applied for a patent
for simultaneous low-frequency stimulation and electromyography functionality for the ELF2
product.
AutoStart Infusion System
This product, despite overwhelming evidence of cost effectiveness and safety has struggled for a
foothold in the small Australian market. The board commissioned South South Capital Partners
to source partners in other countries to commercialise this outstanding product, resulting in a
distribution agreement signed with Taiwan Allied Dragon Inc (TAD). The regulatory process for
permitting the AutoStart Infusion System to be used in Taiwan has stalled due to a regulatory issue.
Intellectual Property
Analytica continues to develop and protect its Intellectual Property through patents, trademarks
and design registrations. Analytica’s licensed burette patents (1995) are maintained for the North
American, Australian, and European markets and more recent (2006) patent-pending embodiments
are extended in these regions and China until 2026.
Analytica’s Flush feature developed in 2008 is currently in the Patent Cooperation Treaty (PCT)
national phase, and has been granted patents in China, with US, Australia and Germany pending.
A novel 2012 improvement in the AutoStart burette that will dramatically simplify usability has also
progressed to PCT and is currently entering the national phase of the PCT process.
Analytica has lodged (2013) a patent for a simultaneous low frequency electrical stimulation and
electromyography device, and this is currently in PCT.
Analytica also has patents pending in the PCT national phase for the PeriCoach patents lodged
in 2011. These cover Australia, US, Japan, Brazil, China, India, Germany, and France - jurisdictions
where most of the world’s medical device expenditure occurs. Design registrations have also been
granted in these jurisdictions with US and European remaining pending.
Analytica’s R&D team has developed a number of novel ideas for future products and product
enhancement during the PeriCoach product development process. Analytica aims to investigate
these ideas and assess their patentability and commercial viability in the coming year.
Analytica also maintains a number of registered trademarks in the various jurisdictions above, and
owns the top-level (.com) internet domains with these trademarks and other relevant keywords.
Annual report 2015Confidence through control 18
3.
Financial review
Financial position
The net assets of the Group have decreased by $ 1,948,529 from 30 June 2014 to $ 425,993 at 30
June 2015. This decrease is largely due to the following factors:
•
•
Continued Research and Development, and
Sales and Marketing Costs of the PeriCoach.
The directors have secured capital from the August 2015 share issue, to secure the company’s
financial position to continue the development of the PeriCoach, and support sales and marketing of
the PeriCoach in Australia, United States of America and United Kingdom.
4.
Other items
Significant changes in state of affairs
The following significant changes in the state of affairs of the parent entity occurred during the year:
(i) Controlled market release of the PeriCoach finished in December 2014.
(ii) PeriCoach commenced sales in Australia in January 2015.
(iii) FDA 510(k) (premarket submission) approval was secured in United States of America in March
2015.
(iv) The PeriCoach was released for sale in the United States of America in June 2015.
Changes in the controlled entities and divisions:
(i) Analytica Limited purchased 100% ownership in the subsidiary PeriCoach Pty Ltd during the
2015 year.
Events after the reporting date
A capital raising was completed in August 2015 where 358,117,144 shares were issued at A $0.008
119,372,193 options exercisable by the 29th February 2016 at A $0.011 were issued.
119,372,193 options exercisable by the 28th February 2018 at A $0.014 were issued.
Except for the above, no other matters or circumstances have arisen since the end of the year which
significantly affected or could significantly affect the operations of the Group, the results of those
operations or the state of affairs of the Group in future financial years.
Future developments and results
The Group is preparing for international expansions in late 2015, concentrating on marketing, sales
and regulatory affairs, and scaling the manufacturing and IT systems to cope with larger numbers
and different jurisdictions.
Environmental issues
The Group’s operations are not regulated by any significant environmental regulations under a law of
the Commonwealth or of a state or territory of Australia.
19
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 audit committee 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.
The following fees were paid or payable to the external auditors for non-audit services provided
during the year ended 30 June, 2015:
Bentleys Brisbane (Audit) Pty Ltd
Other review
Auditors independence declaration
2015
$
2014
$
1,500
1,500
The lead auditors independence declaration for the year ended 30 June, 2015 has been received and
can be found on page 18 of the financial report.
Company secretary
The following person held the position of Parent secretary at the end of the year:
Bryan Dulhunty (COSA Pty Ltd) has been the company secretary since 15 October 2012. COSA
provides specialised Company Secretarial and CFO services to Life Science Companies.
Byran Dulhunty has extensive experience in the biotech industry having held roles covering Chairman,
Managing Director, Company Secretary, CFO, and Non Executive Director of listed and non listed
biotech companies.
Meetings of directors
During the year, 12 meetings of directors were held. Attendances by each director during the year
were as follows:
Dr Michael Monsour
Mr Ross Mangelsdorf
Mr Warren Brooks
Mr Carl Stubbings
Directors’ Meetings
Number eligible to attend
Number attended
12
12
12
12
12
12
12
12
Annual report 2015Confidence through control 20
Indemnification and insurance of officers and auditors
No indemnities have been given or insurance premiums paid, during or since the end of the year, for
any person who is or has been an officer or auditor of Analytica Limited.
Employees
Analytica recognises the value of diversity in the workplace and is committed to providing equal
opportunity for all its staff. Over 63% of current employees are female. Of its 14 employees there
are numerous religions and cultures and where possible offer flexible work practices and work life
balance as a key retention tool. Analytica is also committed to providing a workplace free from any
form of harassment, bullying and discrimination.
Options
Unissued shares under option
At the date of this report, the unissued ordinary shares of Analytica Limited under option are as
follows:
Grant Date
Date of Expiry
Exercise Price
Number under Option
Unlisted Options
30 June 2013
29 October 2018
12 February 2014
12 February 2019
22 May 2014
22 May 2019
Listed Options
11 August 2015
29 February 2016
11 August 2015
28 February 2018
-$0.0322
-$0.0439
-$0.0733
-$0.011
-$0.014
44,500,000
5,000,000
4,375,000
53,875,000
119,372,193
119,372,193
292,619,386
Option holders do not have any rights to participate in any issues of shares or other interests in the
Parent or any other entity.
For details of options issued to directors and other key management personnel as remuneration,
refer to the remuneration report.
21
Remuneration report
(audited)
Remuneration policy
The remuneration policy of Analytica Limited has been designed to align key management personnel (KMP)
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 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 Group, as well as create goal
congruence between directors, executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for key management personnel of
the Group is as follows:
•
•
•
•
•
The remuneration policy has been developed by the Remuneration Committee and approved by the
Board following professional advice from independent external consultants.
All key management personnel receive a base salary (which is based on factors such as length of service
and experience), superannuation, fringe benefits, and performance incentives.
Performance incentives are based on predetermined key performance indicators.
Incentives paid in the form of options or rights are intended to align the interests of the KMP and the
Group 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 Remuneration Committee reviews key management personnel packages annually by reference to
the 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 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.
Key management personnel receive a superannuation guarantee contribution required by the law, which is
currently 9.5% (2014: 9.25%), 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 Group and expensed.
The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The Remuneration Committee determines payments to the non-executive directors and
reviews their remuneration annually, based on market practice, duties and accountability. Independent external
advice is sought when required. 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, the current maximum is
$ 550,000 which was approved at the 2011 AGM. In November 2004 the Board set individual directors
fees at $50,000 per annum plus statutory superannuation and the chairman’s fee at $75,000 plus statutory
superannuation. Based on the current board structure total fees paid on a yearly basis will be $225,000
(2014:$225,000) plus statutory superannuation.
Annual report 2015Confidence through control 22
Entities associated with Mr Ross Mangelsdorf were paid consulting, accounting and taxation services
fees during the year of $95,200 (2014:$73,600) plus preparation fee for the annual tax return of $11,500
(2014:$8,545).
Key management personnel employed by the Company during the year, in addition to the Company’s Directors,
is the Company’s Operations Manager, Mr Geoff Daly (appointed on the 7 November 2005) and accepted the
position of CEO on the 12 February 2014. 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 specific
time frame. Mr Daly’s contract can be terminated by either party giving notice commensurate with the 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.
Key management personnel are also entitled and encouraged to participate in the employee share and option
arrangements to align their interests with shareholders’ interests.
Options granted under these arrangements do not carry dividend or voting rights. Each option is entitled to be
converted into one ordinary share and is valued using the Black-Scholes methodology.
Key management personnel who are subject to these arrangements are subject to a policy governing the use
of external hedging arrangements. Such personnel are prohibited from entering into hedge arrangements,
i.e. put options, on unvested shares and options which form part of their remuneration package. Terms of
employment signed by such personnel contain details of such restrictions.
Relationship between remuneration policy and company performance
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and
executives. Two methods have been applied to achieve this aim, the first being a performance-based bonus
based on key performance indicators, and the second being the issue of options to directors and executives
to encourage the alignment of personal and shareholder interests. The Company believes this policy has been
effective in increasing shareholder wealth over the past 5 years.
The following table shows the gross revenue, profits and dividends for the last five years for the Company, as
well as the share prices at the end of the respective financial years.
2015
$
2014
$
2013
$
2012
$
2011
$
Revenue
Net Profit
1,119,378
587,483
541,262
194,705
272,878
(5,315,604)
(3,176,008)
(1,135,752)
(2,222,009)
(203,176)
Share Price at Year-end
0.01
0.04
0.02
0.02
0.03
Dividends Paid (cents)
‑
-
-
-
-
Employment details of members of key management personnel continued
The table also illustrates the proportion of remuneration that was performance based, non-performance
based, and the proportion of remuneration received in the form of options.
23
Position Held as
at 30 June 2015
and any Change
during the Year
Contract Details (Duration and
Termination)
Proportions of Elements of
Remuneration Related to Performance
Proportions of Elements of
Remuneration Relatted to
Performance
Non‑salary
Cash‑based
Incentives
%
Shares/
Units
%
Options/
Rights
%
Fixed
Salary/Fees
%
Total
%
Group KMP
Directors
Dr Michael
Monsour
Mr Ross
Mangelsdorf
Mr Warren Brooks
Mr Carl Stubbings
KMP
Chairman
Annual Review
Executive
Director and Chief
Financial Officer
Non-executive
Director
Non-executive
Director
Annual Review
Annual Review
Annual Review
Geoffrey Daly
Chief Executive
Officer
Open-ended contract; Termination
by 3 months notice.
Service Agreements
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
100
100
100
100
100
100
100
100
100
100
On appointment to the Board, all non-executive directors enter into a service agreement with the Company
in the form of a letter of appointment. The letter summarises the Board policies and terms, including
remuneration, relevant to the office of director.
The remuneration and other terms of employment for the Managing Director and senior executives are set
out in formal service agreements as summarised below.
All service agreements are for an unlimited duration. The agreements for executives (other than the
Managing Director, Chief Executive Officer and Chief Finance Officer which require three months notice) may
be terminated by giving six weeks notice (except in cases of termination for cause where termination is
immediate).
In cases of resignation, no separation payment is made to the executive, except for amounts due and payable
up to the date of ceasing employment, including accrued leave entitlements.
Changes in KMP
The group appointed Dr Thomas Lönngren as Non-Executive Director effective 10 August 2015.
There have been no other changes to key management personnel of the Group since 30 June 2015.
Annual report 2015Confidence through control 24
Remuneration details for the year ended 30 June, 2015
The following table of benefits and payment represents components of the current year and comparative year
remuneration for each member of the key management personnel of the Group. Such amounts have been
calculated in accordance with Australian Accounting Standards.
Table of benefits and payments
short term
post employment
long
term
termi‑
nation
share based payments
cash
salary
fees
$
non
mon‑
etary
$
bonus
$
other
$
$
pension and
superannu‑
ation
$
other post
employ‑
ment
$
$
$
options
and
rights
$
shares
and
units
cash‑
settled
$
$
2015
Directors
Dr Michael
Monsour
Mr Ross
Mangelsdorf
75,000
81,500
Mr Warren Brooks
50,000
Mr Carl Stubbings
50,000
KMP
Geoffrey Daly
210,000
466,500
2015
Directors
Dr Michael
Monsour
Mr Ross
Mangelsdorf
75,000
50,000
Mr Warren Brooks
50,000
Mr Carl Stubbings
23,718
KMP
Geoffrey Daly
210,000
408,718
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
75,000
7,125
81,500
7,742
50,000
50,000
4,750
4,750
210,000
466,500
19,950
44,317
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
82,125
89,242
54,750
54,750
229,950
510,817
short term
post employment
long
term
termi‑
nation
share based payments
cash
salary
fees
$
non
mon‑
etary
$
bonus
$
other
$
$
pension and
superannu‑
ation
$
other post
employ‑
ment
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
75,000
6,937
50,000
50,000
23,718
4,625
4,625
2,194
210,000
408,718
19,425
37,806
-
-
-
-
-
-
-
-
-
-
5,477
5,477
-
-
-
-
-
-
options
and
rights
$
118,910
91,469
73,175
-
100,617
384,171
shares
and
units
cash‑
settled
$
$
-
-
-
-
-
-
-
-
-
-
-
-
200,847
146,094
127,800
25,912
335,519
836,172
25
Securities received that are not performance related
No members of key management personnel are entitled to receive securities which are not performance-based
as part of their remuneration package.
Cash performance‑related bonuses
There were no bonuses granted as remuneration to key managmeent personnel and other executies during
the year ended 30 June 2015 (2014: nil).
Description of options/rights granted as remuneration
Details of the options granted as remuneration to those key management personnel and executives during
the year:
2015: Nil
2014:
Directors
Granted as
remuneration
No.
Value of
options at
grant date
$
Vested
during the
year
No.
Lapsed
during the
year
No.
Value of
lapsed
options at
lapse date
$
Dr Michael Monsour
13,000,000
0.0324
13,000,000
Mr Ross Mangelsdorf
10,000,000
0.0324
10,000,000
Mr Warren Brooks
8,000,000
0.0324
8,000,000
KMP
Geoffrey Daly
Geoffrey Daly
6,000,000
0.0324
6,000,000
5,000,000
0.0450
-
-
-
-
-
-
-
-
-
-
-
Options were approved at the 2013 AGM for directors and the directors approved employee (including Mr
Daly) options on the same date. These options are brought to account at valuation perpared by BDO Chartered
Accountants.
All options were issued by Analytica Limited and entitle the holder to ordinary shares in Analytica Limited for
each option exercised.
There have not been any alterations to the terms or conditions of any share based payment arrangements
since grant date.
Annual report 2015Confidence through control
26
Key management personnel options and rights holdings
Unlisted Options
Grant‑
ed as
remu‑
nera‑
tion
Balance at
beginning
of year
Exer‑
cised
Other
chang‑
es
Balance
at the end
of year
Vested
during
the
year
Vested and
exercisable
30 June, 2015
Directors
Unlisted Options @3.24 cents, Expire 29/10/18
Dr Michael Monsour
13,000,000
Mr Ross Mangelsdorf
10,000,000
Mr Warren Brooks
8,000,000
‑
‑
‑
Other KMP
Unlisted Options @3.24 cents, Expire 29/10/08
Geoffrey Daly
6,000,000
Unlisted Options @4.50 cent, Expire 12/02/19
Geoffrey Daly
5,000,000
42,000,000
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
13,000,000
10,000,000
8,000,000
6,000,000
5,000,000
42,000,000
‑
‑
‑
‑
‑
‑
13,000,000
10,000,000
8,000,000
6,000,000
5,000,000
42,000,000
Balance
at
beginning
of year
Granted as
remunera‑
tion
Exer‑
cised
Other
changes
Balance at
the end of
year
Vested
during the
year
Vested and
exercisable
30 June, 2014
Directors
Unlisted Options @3.24 cents, Expire 29/10/18
Dr Michael
Monsour
Mr Ross
Mangelsdorf
Mr Warren
Brooks
Other KMP
-
-
-
13,000,000
10,000,000
8,000,000
Unlisted Options @3.24 cents, Expire 29/10/08
Geoffrey Daly
-
6,000,000
Unlisted Options @4.50 cent, Expire 12/02/19
Geoffrey Daly
-
-
5,000,000
11,000,000
-
-
-
-
-
-
-
-
-
-
-
13,000,000
13,000,000
13,000,000
10,000,000
10,000,000
10,000,000
8,000,000
8,000,000
8,000,000
6,000,000
6,000,000
6,000,000
5,000,000
-
-
31,000,000
42,000,000
37,000,000
37,000,000
27
Key management personnel shareholdings
The number of ordinary shares in Analytica Limited held by each key management person of the Group during
the year is as follows:
30 June, 2015
Directors
Balance at
beginning of
year
On
exercise of
options
Other changes
during the year
Balance at
end of year
Dr Michael Monsour
102,539,666
Mr Ross Mangelsdorf
Mr Warren Brooks
Mr Carl Stubbings
30 June, 2014
Directors
Dr Michael Monsour
Mr Ross Mangelsdorf
Mr Warren Brooks
Mr Carl Stubbings
20,472,402
31,759,341
1,627,450
156,398,859
-
-
-
-
-
28,750,666
131,290,332
1,595,157
22,067,559
670,659
32,430,000
203,432
1,830,882
31,219,914
187,618,773
Balance at
beginning of
year
On
exercise of
options
Other changes
during the year
Balance at
end of year
62,675,643
14,786,992
30,456,989
-
107,919,624
-
-
-
-
-
7,379,905
70,055,548
5,685,410
20,472,402
1,302,352
31,759,341
1,627,450
1,627,450
15,995,117
123,914,741
Annual report 2015Confidence through control
28
Corporate Governance
Analytica adopt a high standard of corporate governance and all corporate governance policy is available on
the company website analyticamedical.com.
This director’s report, incorporating the remuneration report, is signed in accordance with a resolution of the
Board of Directors.
Director
Dr Michael Monsour
Dated this 28th day of September 2015
Director
Mr Ross Mangelsdorf
29
Auditors Independence
Declaration under Section 307C
of the Corporations Act 2001
To the Directors of Analytica
Limited and Controlled Entities
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2015, there have been:
(i)
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
(ii)
no contraventions of any applicable code of professional conduct in relation to the audit.
[Enter place of signing]
Annual report 2015Confidence through control 30
Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
For the Year Ended 30 June, 2015
Sales revenue
Cost of sales
Gross profit
R&D tax incentive revenue
Royalty revenue
Investment revenue
Loss on disposal of assets
Administrative expenses
Depreciation, amortisation and impairments
Fair value adjustment
Finance costs
Marketing expenses
Occupancy costs
Option expenses
Other currency gains (losses)
Patent maintenance
Research and development
Profit before income tax
Income tax expense
Profit for the year
Consolidated
Note
2015
$
2014
$
73,824
(22,784)
51,040
-
-
-
988,107
559,668
6,228
51,219
(194)
5,506
22,309
-
(1,014,953)
(516,084)
(93,365)
(16,908)
(53,280)
(384)
39,699
(3,104)
(2,292,793)
(396,620)
(7,020)
(5,784)
‑
(515,862)
(27,923)
(2,271)
(86,778)
(150,763)
(2,835,508)
(2,195,794)
(5,315,604)
(3,176,008)
‑
-
(5,315,604)
(3,176,008)
2
2
2
2
2
2
3
Other comprehensive income, net of income tax
Total comprehensive income for the year
(5,315,604)
(3,176,008)
Profit attributable to:
Members of the parent entity
Total comprehensive income attributable to:
Members of the parent entity
Earnings per share
Basic/diluted earnings per share (dollars)
Diluted earnings per share (dollars)
(5,315,604)
(3,176,008)
(5,315,604)
(3,176,008)
(0.0059)
(0.0048)
(0.0056)
(0.0048)
31
Consolidated Statement of
Financial Position
As At 30 June, 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON‑CURRENT ASSETS
Other financial assets
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Borrowings
Trade and other payables
Short-term provisions
Employee benefits
TOTAL CURRENT LIABILITIES
NON‑CURRENT LIABILITIES
Employee benefits
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Consolidated
Note
2015
$
2014
$
7
8
9
13
10
11
12
14
15
16
17
17
581,531
1,957,868
19,493
231,692
71,911
36,652
177,170
381,638
904,627
2,553,328
19,850
38,382
117,184
175,416
73,130
21,647
176,816
271,593
1,080,043
2,824,921
2,568
10,342
488,817
279,679
53,650
113,246
658,281
40,713
40,713
42,755
86,841
419,617
30,782
30,782
698,994
450,399
381,049
2,374,522
19
18
92,114,779
88,792,648
534,737
534,737
(92,268,467)
(86,952,863)
381,049
2,374,522
Annual report 2015Confidence through control
32
Consolidated Statement of
Changes in Equity
For the Year Ended 30 June, 2015
2015
Consolidated
Ordinary
Shares
$
Retained
Earnings
$
Option
Reserve
$
Note
Total
$
Balance at 1 July 2014
88,792,648
(86,952,863)
534,737
2,374,522
Profit attributable to members of the
parent entity
Shares issued during the year
Transaction costs
Shares bought back during the year
‑
(5,315,604)
3,715,760
(393,511)
(118)
‑
‑
‑
‑
‑
‑
‑
(5,315,604)
3,715,760
(393,511)
(118)
Balance at 30 June 2015
92,114,779
(92,268,467)
534,737
381,049
2014
Consolidated
Ordinary
Shares
Retained
Earnings
Option
Reserve
Note
$
$
Balance at 1 July 2013
83,943,597
(83,776,853)
Profit attributable to members of the
parent entity
Transaction costs
Issue of shares
-
(3,176,008)
(374,022)
5,223,073
-
-
$
-
-
-
Total
$
166,744
(3,176,008)
(374,022)
534,737
5,757,810
Balance at 30 June 2014
88,792,648
(86,952,863)
534,737
2,374,522
33
Consolidated Statement of
Cash Flows
For the Year Ended 30 June, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Receipt from grants
Receipt from royalty income
Consolidated
Note
2015
$
2014
$
73,564
-
988,107
559,668
6,228
5,506
Payments to suppliers and employees
(5,758,761)
(3,633,248)
Interest received
Finance costs
Interest paid
51,216
(384)
‑
22,309
(3,104)
(5,376)
Net cash provided by (used in) operating activities
22
(4,640,030)
(3,054,245)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for intangible asset
Purchase of property, plant and equipment
Net cash used by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of shares
Repayment of directors’ loan accounts
Proceeds from directors’ loan accounts
Costs of fund raising
Net cash used by financing activities
(11,716)
(8,771)
(38,248)
(187,924)
(49,964)
(196,695)
3,715,642
5,080,101
‑
‑
(213,000)
213,000
(394,211)
(231,051)
3,321,431
4,849,050
Net increase (decrease) in cash and cash equivalents held
(1,368,563)
1,598,110
Cash and cash equivalents at beginning of year
1,947,526
349,416
Cash and cash equivalents at end of financial year
7
578,963
1,947,526
Annual report 2015Confidence through control
34
Summary of Significant
Accounting Policies
For the Year Ended 30 June, 2015
1
Summary of Significant Accounting Policies
This financial report covers the consolidated financial statements and notes of Analytica Limited and
Controlled Entities and its interest in associates and jointly controlled entities (the ‘group’). Analytica
Limited is a for profit Parent domiciled in Australia. The financial statements were authorised for
issue by the Board of Directors on the date the directors report was signed. .
Each of the entities within the Group prepare their financial statements based on the currency of the
primary economic environment in which the entity operates (functional currency). The consolidated
financial statements are presented in Australian dollars which is the parent entity’s functional and
presentation currency.
(a)
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in
accordance with Australian Accounting Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board and the Corporations
Act 2001.
These financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The significant accounting policies used in the preparation and presentation of these financial
statements are provided below and are consistent with prior reporting periods unless otherwise
stated.
The financial statements are based on historical costs, except for the measurement at fair value of
selected non-current assets, financial assets and financial liabilities.
(b)
Principles of Consolidation
The consolidated financial statements include the financial position and performance of controlled
entities from the date on which control is obtained until the date that control is lost.
Intragroup assets, liabilities, equity, income, expenses and cashflows relating to transactions
between entities in the consolidated entity have been eliminated in full for the purpose of these
financial statements.
Appropriate adjustments have been made to a controlled entity’s financial position, performance and
cash flows where the accounting policies used by that entity were different from those adopted by
the consolidated entity. All controlled entities have a June financial year end.
A list of controlled entities is contained in Note to the financial statements.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the parent has control. Control
is established when the parent is exposed to, or has rights to variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the relevant
activities of the entity.
35
(c)
Business combinations
Business combinations are accounted for by applying the acquisition method which requires an
acquiring entity to be identified in all cases. The acquisition date under this method is the date that
the acquiring entity obtains control over the acquired entity.
The fair value of identifiable assets and liabilities acquired are recognised in the consolidated financial
statements at the acquisition date.
Goodwill or a gain on bargain purchase may arise on the acquisition date, this is calculated by
comparing the consideration transferred and the amount of non-controlling interest in the acquiree
with the fair value of the net identifiable assets acquired. Where consideration is greater than the
assets, the excess is recorded as goodwill. Where the net assets acquired are greater than the
consideration, the measurement basis of the net assets are reassessed and then a gain from bargain
purchase recognised in profit or loss.
All acquisition-related costs are recognised as expenses in the periods in which the costs are incurred
except for costs to issue debt or equity securities.
Any contingent consideration which forms part of the combination is recognised at fair value at the
acquisition date. If the contingent consideration is classified as equity then it is not remeasured and
the settlement is accounted for within equity. Otherwise subsequent changes in the value of the
contingent consideration liability are measured through profit or loss.
(d)
Comparative Amounts
Comparatives are consistent with prior years, unless otherwise stated.
Where a change in comparatives has also affected the opening retained earnings previously
presented in a comparative period, an opening consolidated statement of financial position at the
earliest date of the comparative period has been presented.
(e)
Income Tax
(i)
Current income tax expense
The tax expense recognised in the consolidated statement of profit or loss and other comprehensive
income relates to current income tax expense plus deferred tax expense (being the movement in
deferred tax assets and liabilities and unused tax losses during the year).
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax
loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation
authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period.
(ii)
Deferred tax assets and liabilities
Deferred tax is provided on temporary differences which are determined by comparing the carrying
amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial
statements.
Deferred tax is not provided for the following:
•
The initial recognition of an asset or liability in a transaction that is not a business combination
and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
•
Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are not recognised to the extent that it is not probable that taxable profit will
available against which the unused tax losses or unused tax credits can be utilised.
Annual report 2015Confidence through control 36
At the end of each reporting period, the company reassesses unrecognised deferred tax assets. The
company recognises a previously unrecognised deferred tax asset to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
(f)
Revenue and other income
Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that
economic benefits associated with the transaction will flow to the entity and specific criteria relating
to the type of revenue as noted below, has been satisfied.
Revenue is measured at the fair value of the consideration received or receivable and is presented
net of returns, discounts and rebates.
All revenue is stated net of the amount of goods and services tax (GST).
Interest revenue
Interest is recognised using the effective interest method.
Royalty revenue
Royalty revenue is recognised in the consolidated statement of profit or loss and other comprehensive
income when , it is probable that the economic benefits gained from royalty will flow to the entity and
the amount of the royalty can be measured reliably.
Grant revenue
The Company is eligible for Federal Government grants in respect of Research and Development
expenditure. Such grants are accounted for when there is reasonable assurance that the Company
will comply with the conditions attaching to the grant and the grant will be received.
Other grants are recognised at fair value where there is 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.
(g)
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of that asset.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
(h)
Goods and Services Tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST),
except where the amount of GST incurred is not recoverable from the Australian Taxation Office
(ATO).
Receivables and payable are stated inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or
payables in the consolidated statement of financial position.
Cash flows in the consolidated statement of cash flows are included on a gross basis and the GST
component of cash flows arising from investing and financing activities which is recoverable from,
or payable to, the taxation authority is classified as operating cash flows.
37
(i)
Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined
using the first-in-first-out basis and are net of any rebates and discounts received.
(j)
Property, Plant and Equipment
Classes of property, plant and equipment are measured using the cost or revaluation model as
specified below.
Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and
any impairment losses. Costs include purchase price, other directly attributable costs and the initial
estimate of the costs of dismantling and restoring the asset, where applicable.
Assets measured using the revaluation model are carried at fair value at the revaluation date less
any subsequent accumulated depreciation and impairment losses. Revaluations are performed
whenever there is a material movement in the value of an asset under the revaluation model.
Plant and equipment
Plant and equipment are measured using the cost model.
Depreciation
The depreciable amount of all property, plant and equipment, except for freehold land is depreciated
on a straight-line method from the date that management determine that the asset is available for
use.
Assets held under a finance lease and leasehold improvements are depreciated over the shorter of
the term of the lease and the assets useful life.
The depreciation rates used for each class of depreciable asset are shown below:
Fixed asset class
Plant and Equipment
Office Equipment
Computer Equipment
Depreciation rate
13.33% - 20%
33% - 66.67%
33% - 100%
At the end of each annual reporting period, the depreciation method, useful life and residual value of
each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.
(k)
Financial instruments
Financial instruments are recognised initially using trade date accounting, i.e. on the date that
Company becomes party to the contractual provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs
(except for instruments measured at fair value through profit or loss where transaction costs are
expensed as incurred).
Financial Assets
Financial assets are divided into the following categories which are described in detail below:
•
•
•
•
loans and receivables;
financial assets at fair value through profit or loss;
available-for-sale financial assets; and
held-to-maturity investments.
Annual report 2015Confidence through control 38
Financial assets are assigned to the different categories on initial recognition, depending on the
characteristics of the instrument and its purpose. A financial instrument’s category is relevant to the
way it is measured and whether any resulting income and expenses are recognised in profit or loss
or in other comprehensive income.
All income and expenses relating to financial assets are recognised in the consolidated statement
of profit or loss and other comprehensive income in the ‘finance income’ or ‘finance costs’ line item
respectively.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They arise principally through the provision of goods and services
to customers but also incorporate other types of contractual monetary assets.
After initial recognition these are measured at amortised cost using the effective interest method,
less provision for impairment. Any change in their value is recognised in profit or loss.
The Company’s trade and most other receivables fall into this category of financial instruments.
Discounting is omitted where the effect of discounting is considered immaterial.
Significant receivables are considered for impairment on an individual asset basis when they are
past due at the reporting date or when objective evidence is received that a specific counterparty
will default.
The amount of the impairment is the difference between the net carrying amount and the present
value of the future expected cash flows associated with the impaired receivable.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets:
•
•
acquired principally for the purpose of selling in the near future
designated by the entity to be carried at fair value through profit or loss upon initial recognition
or
• which are derivatives not qualifying for hedge accounting.
The Company has some derivatives which are designated as financial assets at fair value through
profit or loss.
Assets included within this category are carried in the consolidated statement of financial position
at fair value with changes in fair value recognised in finance income or expenses in profit or loss.
Any gain or loss arising from derivative financial instruments is based on changes in fair value, which
is determined by direct reference to active market transactions or using a valuation technique where
no active market exists.
Held‑to‑maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity. Investments are classified as held-to-maturity if it is the intention of
the Company’s management to hold them until maturity.
Held-to-maturity investments are subsequently measured at amortised cost using the effective
interest method, with revenue recognised on an effective yield basis. In addition, if there is objective
evidence that the investment has been impaired, the financial asset is measured at the present value
of estimated cash flows. Any changes to the carrying amount of the investment are recognised in
profit or loss.
39
Financial liabilities
Financial liabilities are recognised when the Company becomes a party to the contractual agreements
of the instrument. All interest-related charges and, if applicable, changes in an instrument’s fair value
that are reported in profit or loss are included in the income statement line items “finance costs” or
“finance income”.
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or
other financial liabilities depending on the purpose for which the liability was acquired. Although the
Company uses derivative financial instruments in economic hedges of currency and interest rate
risk, it does not hedge account for these transactions.
The Company‘s financial liabilities include borrowings, trade and other payables (including finance
lease liabilities), which are measured at amortised cost using the effective interest rate method.
Impairment of financial assets
At the end of the reporting period the Company assesses whether there is any objective evidence
that a financial asset or group of financial assets is impaired.
Financial assets at amortised cost
If there is objective evidence that an impairment loss on financial assets carried at amortised cost
has been incurred, the amount of the loss is measured as the difference between the asset’s carrying
amount and the present value of the estimated future cash flows discounted at the financial assets
original effective interest rate.
Impairment on loans and receivables is reduced through the use of an allowance accounts, all other
impairment losses on financial assets at amortised cost are taken directly to the asset.
Available‑for‑sale financial assets
A significant or prolonged decline in value of an available-for-sale asset below its cost is objective
evidence of impairment, in this case, the cumulative loss that has been recognised in other
comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
Any subsequent increase in the value of the asset is taken directly to other comprehensive income.
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
carry 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.
When available-for-sale investments are sold, the accumulated fair value adjustments recognised in
other comprehensive income are reclassified to profit or loss.
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 stated at amortised cost using the effective interest rate
method.
(l)
Impairment of non‑financial assets
At the end of each reporting period, the Group determines whether there is an evidence of an
impairment indicator for non-financial assets.
Where this indicator exists and regardless for goodwill, indefinite life intangible assets and intangible
assets not yet available for use, the recoverable amount of the assets is estimated.
Annual report 2015Confidence through control 40
Where assets do not operate independently of other assets, the recoverable amount of the relevant
cash-generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and
the value in use. Value in use is the present value of the future cash flows expected to be derived
from an asset or cash-generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised
in profit or loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an
impairment loss, except for goodwill.
(m)
Intangible Assets
Patents and trademarks
Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite
life and are carried at cost less any accumulated amortisation and any impairment losses. Patents
and trademarks are amortised over their useful life ranging from 0 - to 3 years.
Amortisation
Amortisation is based on the cost of an asset less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
intangible assets, other than goodwill, from the date that they are available for use.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess
of the sum of:
(i)
(ii)
the consideration transferred;
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 Group holds
less than a 100% interest will depend on the method adopted in measuring the aforementioned
non-controlling interest. The 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 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.
Refer to Note for information on the goodwill policy adopted by the Group for each acquisition.
Fair value uplifts in the value of pre-existing equity holdings are taken to the consolidated statement
of profit or loss and other comprehensive income. Where they investment has been equity accounted,
any credit reserve balances are recycled to the consolidated statement of profit or loss and other
comprehensive income.
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.
41
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of
associates is included in investments in associates.
Goodwill is not amortised but is tested for impairment annually and is allocated to the Group’s
cash generating units or groups of cash generating units, which represent the lowest level at which
goodwill is monitored but where such level is not larger than an operating segment. Gains and losses
on the disposal of an entity include the carrying amount of goodwill related to the entity sold.
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.
The expenditure capitalised includes the cost of materials, direct labour and overhead costs that
are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs.
Other development expenditure is recognised in profit or loss as incurred.
Capitalised development costs are measured at cost less accumulated amortisation and
accumulated impairment losses.
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 which is - years.
Software
Software is recorded at cost. Software has a finite life and is carried at cost less any accumulated
amortisation and impairment losses. It has an estimated useful life of between one and five years.
(n)
Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments
(less than 3 months) which are readily convertible to known amounts of cash and which are subject
to an insignificant risk of change in value.
Bank overdrafts also form part of cash equivalents for the purpose of the consolidated statement
of cash flows and are presented within current liabilities on the consolidated statement of financial
position.
(o)
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.
Employee benefits expected to be settled more than twelve months after the end of the reporting
period have been measured at the 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. Cashflows are discounted using
market yields on national government bonds with terms to maturity that match the expected timing
of cashflows. Changes in the measurement of the liability are recognised in profit or loss.
Employee benefits are presented as current liabilities in the consolidated statement of financial
position if the Company does not have an unconditional right to defer settlement of the liability
for at least 12 months after the reporting date regardless of the classification of the liability for
measurement purposes under AASB 119.
Annual report 2015Confidence through control 42
(p)
Provisions
Provisions are recognised when the 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 are measured at the present value of management’s best estimate of the outflow required
to settle the obligation at the end of the reporting period. The discount rate used is a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the unwinding of the discount is taken to finance costs in the
consolidated statement of profit or loss and other comprehensive income.
(q)
Earnings per share
The Group presents basic and diluted earnings per share information for its ordinary shares.
Basic earnings per share is calculated by dividing the profit attributable to owners of the company by
the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share adjusts the basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares
and the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(r)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares and share options which vest immediately are recognised as a deduction from equity, net of
any tax effects.
(s)
Equity‑settled compensation
The Group operates equity-settled share-based payment employee share and option schemes. The
fair value of the equity to which employees become entitled is measured at grant date and recognised
as an expense over the vesting period, with a corresponding increase to an equity account. The fair
value of shares is ascertained as the market bid price. The fair value of options is ascertained using
a Black-Scholes pricing model which incorporates all market vesting conditions. The amount to be
expensed is determined by reference to the fair value of the options or shares granted, this expense
takes in account any market performance conditions and the impact of any non-vesting conditions
but ignores the effect of any service and non-market performance vesting conditions.
Non-market vesting conditions are taken into account when considering the number of options
expected to vest. At the end of each reporting period, the Group revises its estimate of the number
of options which are expected to vest based on the non-market vesting conditions. Revisions to the
prior period estimate are recognised in profit or loss and equity.
(t)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are
presented in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are recorded at the spot rate on the date of the transaction.
At the end of the reporting period:
•
Foreign currency monetary items are translated using the closing rate;
43
• Non-monetary items that are measured at historical cost are translated using the exchange
rate at the date of the transaction; and
• Non-monetary items that are measured at fair value are translated using the rate at the date
when fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary
items at rates different from those at which they were translated on initial recognition or in prior
reporting periods are recognised through profit or loss, except where they relate to an item of other
comprehensive income or whether they are deferred in equity as qualifying hedges.
(u)
Critical accounting estimates and judgments
The directors evaluate estimates and judgments incorporated into the interim 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 Group.
These estimates and judgements are based on the best information available at the time of preparing
the financial statements, however as additional information is known then the actual results may
differ from the estimates.
Key estimates ‑ impairment
The Group assesses impairment at the end of each reporting year by evaluating conditions specific
to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets
are reassessed using value-in-use calculations which incorporate various key assumptions.
(v)
Going concern
The financial statements have been prepared on a going concern basis.
This basis has been adopted as the company has sufficient cash at 30 June 2015 to conduct its
affairs. The company has a guarantee of continuing financial support from Dr Monsour to allow
the company to meets its liabilities and it is the belief that such financial support will continue to be
made available.
The company’s forward cash flow projections currently indicate that the company will be required
to raise additional funds to meet forecast 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.
The company also expects to generate increased sales income during the 2016 year from the sales
of its PeriCoach.
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 assets amounts and classification of liabilities that might be necessary should the
company not continue as a going concern.
(w)
Adoption of new and revised accounting standards
During the current year, the following standards became mandatory and have been adopted
retrospectively by the Group:
•
•
•
AASB 13 Fair Value Measurement
AASB 119 Employee Benefits
AASB 2012-9 Amendments to AASB 1048 arising from the Withdrawal of Australian Interpretation
1039
Annual report 2015Confidence through control 44
•
AASB 2012-2 Amendments to Australian Accounting Standards ‑ Disclosures ‑ Offsetting Financial
Assets and Financial Liabilities
The accounting policies have been updated to reflect changes in the recognition and measurement of
assets, liabilities, income and expenses and the impact of adoption of these standards is discussed
below.
AASB 13 Fair Value Measurement does not change what and when assets or liabilities are recorded at
fair value. It provides guidance on how to measure assets and liabilities at fair value, including the
concept of highest and best use for non-financial assets. AASB 13 has not changed the fair value
measurement basis for any assets or liabilities held at fair value, however additional disclosures on
the methodology and fair value hierarchy have been included in the financial statements.
AASB 119 Employee benefits changes the basis for determining the income or expense relating
to defined benefit plans and introduces revised definitions for short-term employee benefits and
termination benefits.
The Group reviewed the annual leave liability to determine the level of annual leave which is expected
to be paid more than 12 months after the end of the reporting period. Whilst this has been considered
to be a long-term employee benefits for the purpose of measuring the leave under AASB 119, the
effect of discounting was not considered to be material and therefore has not been performed.
(x)
New Accounting Standards and Interpretations
The AASB has issued new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting periods. The Group has decided against early
adoption of these standards. The following table summarises those future requirements, and their
impact on the Group:
Standard Name
AASB 9 Financial
Instruments and
amending standards
AASB 2010-7 / AASB
2012-6
AASB 2012-3
Amendments to
Australian Accounting
Standards - Offsetting
Financial Assets and
Financial Liabilities
[AASB 132]
Effective date
for entity
30 June 2016
30 June 2015
Requirements
Impact
Changes to the classification
and measurement
requirements for financial
assets and financial liabilities.
New rules relating to
derecognition of financial
instruments.
The impact of
AASB 9 has
not yet been
determined as the
entire standard
has not been
released.
This standard adds
application guidance to AASB
132 to assist with applying
some of the offset criteria of
the standard.
There will be no
impact to the
entity as there
are no offsetting
arrangements
currently in place.
45
Notes to the Financial
Statements
For the Year Ended 30 June, 2015
2
Result for the Year
Finance cost includes all interest-related expenses, other than those arising from financial assets at
fair value through profit or loss. The following amounts have been included in the finance costs line
in the consolidated statement of profit or loss and other comprehensive income for the reporting
periods presented:
Cost of sales
Finance Costs
- external
- related entities
‑ Total interest expense
Consolidated
2015
$
2014
$
22,784
-
384
‑
384
59
3,045
3,104
Annual report 2015Confidence through control
46
The result for the year includes the following specific expenses:
Other expenses:
Administrative expenses
Administration - general
Compliance costs
Employee costs - general
Depreciation and amortisation
- Amortisation
- Depreciation of property plant and equipment
Marketing expenses
- Auto Start Burrette
- PeriCoach
- Wages
Patent maintenance
- AutoStart Burette
- ELF 2
- PeriCoach
Research and development costs
- Auto Start Burette
- Employee and labour
- ELF 2
- PeriCoach
Consolidated
2015
$
2014
$
108,222
487,944
418,787
1,014,953
71,348
22,017
93,365
‑
1,641,325
651,468
2,292,793
38,015
3,478
45,285
86,778
24,002
311,791
180,291
516,084
7,394
9,514
16,908
76,979
157,413
162,228
396,620
58,294
17,731
74,738
150,763
8,956
34
505,548
616,245
‑
46,294
2,321,004
1,533,221
2,835,508
2,195,794
3
Income Tax Expense
(a) Reconciliation of income tax to accounting profit:
47
Profit
Tax
Add:
Tax effect of:
- non-deductible expenses
Less:
Tax effect of:
Consolidated
2015
$
2014
$
(5,315,604)
(3,176,008)
30%
30%
(1,594,681)
(952,803)
1,267,378
814,456
(326,946)
(138,347)
- non-assessable income
(296,432)
(156,224)
Recoupment of prior year tax losses not previously brought to
account
623,378
294,571
Income tax attributable to parent entity
-
-
-
-
Carried forward tax losses of $11,886,210 (2014:$9,725,879) have not been brought to account as
a deferred tax asset because it is not yet considered probable that they will reverse to the extent of
being utilised in the future.
Annual report 2015Confidence through control 48
4
Key Management Personnel Disclosures
Key management personnel options and rights holdings
Details of options provided as remuneration and shares issued on the exercise of such options
together with terms and conditions of the options can be found in the Remuneration Report within
the Director’s Report.
Balance at
beginning
of year
Granted as
remun‑era‑
tion
Exercised
Other
changes
Balance at
the end of
year
Vested
during the
year
Vested and
exer‑
cis‑able
30 June, 2015
Directors
Unlisted Options @ 3.24
cents Expire 29/10/18
Dr Michael Monsour
13,000,000
Mr Ross Mangelsdorf
10,000,000
Mr Warren Brooks
8,000,000
31,000,000
Other KMP
Unlisted Options @ 3.24c
Expire 29/10/2018
Geoffrey Daly
6,000,000
Unlisted Options @ 4.50c
Expire 12/02/2019
Geoffrey Daly
5,000,000
11,000,000
-
-
-
-
-
-
-
30 June, 2014
Directors
Unlisted Options @ 3.24
cents Expire 29/10/18
Dr Michael Monsour
Mr Ross Mangelsdorf
Mr Warren Brooks
Other KMP
Unlisted Options @ 3.24
cents Expire 29/10/18
Geoffrey Daly
Unlisted Options @ 4.50
cents Expire 12/2/19
Geoffrey Daly
-
-
-
-
-
-
-
13,000,000
10,000,000
8,000,000
31,000,000
6,000,000
5,000,000
11,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,000,000
10,000,000
8,000,000
31,000,000
6,000,000
5,000,000
11,000,000
-
-
-
-
-
-
-
13,000,000
10,000,000
8,000,000
31,000,000
6,000,000
-
6,000,000
13,000,000 13,000,000
10,000,000 10,000,000
8,000,000
8,000,000
31,000,000 31,000,000
6,000,000
6,000,000
5,000,000
-
11,000,000
6,000,000
-
-
-
-
-
-
-
49
Key management personnel shareholdings
The number of ordinary shares in Analytica Limited held by each key management person of the
Group during the year is as follows:
Balance at
beginning of
year
On
exercise of
options
Other
changes
during the
year
Balance at
end of year
30 June, 2015
Dr Michael Monsour
MPAMM Pty Ltd
MP Monsour Medical Practice
Pty Ltd
Halonna Pty Ltd
Other related parties
2,606,337
38,484,118
11,880,611
32,484,118
17,084,482
Total: Dr Michael Monsour
102,539,666
Mr Ross Mangelsdorf
RM & JM Mangelsdorf
Tambien Pty Ltd
Other related parties
14,222
14,222
17,253,200
3,190,758
Total: Mr Ross Mangelsdorf
20,472,402
Mr Warren Brooks
-
W Brooks Investments Pty Ltd
31,759,341
Total: Mr Warren Brooks
31,759,341
Mr Carl Stubbings
Cumberland Pty Ltd
Total: Mr Carl Stubbings
-
1,627,450
1,627,450
156,398,859
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,606,337
6,203,667
44,687,785
366,666
12,247,277
22,180,333
54,664,451
-
17,084,482
28,750,666
131,290,332
-
-
14,222
14,222
1,595,157
18,848,357
-
3,190,758
1,595,157
22,067,559
-
-
670,659
32,430,000
670,659
32,430,000
-
-
203,432
1,830,882
203,432
1,830,882
31,219,914
187,618,773
Annual report 2015Confidence through control 50
Balance at
beginning of
year
On
exercise
of options
Other
changes
during the
year
Balance at
end of year
30 June 2014
Dr Michael Monsour
Dr Michael Monsour
MPAMM Pty Ltd
740,088
35,644,799
MP Monsour Medical Practice Pty Ltd
10,255,720
Halonna Pty Ltd
-
Other related parties
16,035,036
Total: Dr Michael Monsour
62,675,643
Mr Ross Mangelsdorf
RM & JM Mangelsdorf
Tambien Pty Ltd
Other related parties
13,333
13,333
12,918,994
1,841,332
Total: Mr Ross Mangelsdorf
14,786,992
Mr Warren Brooks
-
W Brooks Investments Pty Ltd
30,456,989
Total: Mr Warren Brooks
30,456,989
Mr Carl Stubbings
Cumberland Pty Ltd
Total: Mr Carl Stubbings
Other KMP
-
-
107,919,624
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,866,249
2,606,337
2,839,319
38,484,118
1,624,891
11,880,611
32,484,118
32,484,118
1,049,446
17,084,482
39,864,023
102,539,666
889
889
14,222
14,222
4,334,206
17,253,200
1,349,426
3,190,758
5,685,410
20,472,402
-
-
1,302,352
31,759,341
1,302,352
31,759,341
1,627,450
1,627,450
1,627,450
1,627,450
48,479,235
156,398,859
Other key management personnel transactions
For details of other transactions with key management personnel, refer to Note 24: Related Party
Transactions.
5
Remuneration of Auditors
Consolidated
2015
$
2014
$
Remuneration of the auditor of the Company, Bentleys, for:
- auditing or reviewing the financial report
- other services
70,466
49,000
1,500
1,500
Other services was in relation to the acquittal for the Commercialisation Australia project.
51
6
Earnings per Share
(a) Reconciliation of earnings to profit or loss from continuing operations
Consolidated
2015
$
2014
$
Loss from continuing operations
(5,315,604)
(3,176,008)
Earnings used to calculate basic EPS from continuing operations
(5,315,604)
(3,176,008)
(b) Earnings used to calculate overall earnings per share
Consolidated
2015
$
2014
$
Earnings used to calculate overall earnings per share
(5,315,604)
(3,176,008)
(c) Weighted average number of ordinary shares outstanding during the year used in calculating
basic EPS
Consolidated
2015
No.
2014
No.
Weighted average number of ordinary shares outstanding
during the year used in calculating basic EPS
897,958,600
661,308,208
7
Cash and cash equivalents
Cash at bank and in hand
Short-term bank deposits
Consolidated
2015
$
2014
$
39,487
-
542,044
1,957,868
581,531
1,957,868
Annual report 2015Confidence through control
52
Reconciliation of cash
Cash and Cash equivalents reported in the consolidated statement of cash flows are reconciled to
the equivalent items in the consolidated statement of financial position as follows:
Consolidated
2015
$
2014
$
Cash and cash equivalents
581,531
1,957,868
Bank overdrafts
14
(2,568)
(10,342)
Balance as per consolidated statement of cash flows
578,963
1,947,526
8
Trade and other receivables
CURRENT
Trade receivables
GST receivable
Other receivables
Total current trade and other receivables
Credit risk
Consolidated
2015
$
2014
$
259
259
19,234
‑
19,493
-
-
34,777
1,875
36,652
The Group has no significant concentration of credit risk with respect to any single counterparty or
group of counterparties. The class of assets described as ‘trade and other receivables’ is considered
to be the main source of credit risk related to the Group.
The carrying value of trade and other receivables is considered a reasonable approximation of fair
value due to the short-term nature of the balances.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable
in the financial statements.
9
Inventories
CURRENT
At cost:
Raw materials and consumables
Work in progress
Finished goods
Rejects
176,148
40,021
15,523
‑
89,958
60,026
26,022
1,164
231,692
177,170
53
10
Other financial assets
Financial assets at fair value through profit or loss are shares held for trading for the purpose of
short-term profit taking. Changes in fair value are included in the consolidated statement of profit or
loss and other comprehensive income.
Listed investments, at fair value
- Investments in Invion
19,850
73,130
Financial assets at fair value through profit and loss
- listed shares at cost
- less fair value adjustment
522,356
522,356
(502,506)
(449,226)
19,850
73,130
Invion (IVX) previously known as CBio Limited (CBZ) listed on the Australian Securities Exchange
in 2010. Analytica Limited holds 1,044,712 ordinary shares with a market value at 30 June 2015 of
$19,850 ( 2014: $73,130).
11
Property, plant and equipment
Plant and equipment
At cost
Accumulated depreciation
Total plant and equipment
Office equipment
At cost
Accumulated depreciation
Total office equipment
Computer equipment
At cost
Accumulated depreciation
Total computer equipment
Total property, plant and equipment
Consolidated
notes
2015
$
2014
$
26,636
17,036
(17,991)
(17,036)
8,645
-
10,845
9,989
(8,922)
(8,039)
1,923
1,950
99,919
72,127
(72,105)
(52,430)
27,814
38,382
19,697
21,647
Annual report 2015Confidence through control 54
(a)
Movements in carrying amounts of property, plant and equipment
Movement in the carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current year:
Consolidated
Year ended 30 June, 2015
Plant and
Equip‑
ment
$
Office
Equip‑
ment
$
Computer
Equip‑
ment
$
Total
$
Balance at the beginning of year
-
1,950
19,697
21,647
Additions
9,600
1,554
27,792
38,946
Disposals - written down value
-
(194)
-
(194)
Depreciation expense
(955)
(1,387)
(19,675)
(22,017)
Balance at the end of the year
8,645
1,923
27,814
38,382
Consolidated
Year ended 30 June, 2014
Plant and
Equip‑
ment
$
Office
Equip‑
ment
$
Computer
Equip‑
ment
$
Total
$
Balance at the beginning of year
2,947
618
2,838
6,403
Additions
-
2,778
21,980
24,758
Depreciation expense
(2,947)
(1,446)
(5,121)
(9,514)
Balance at the end of the year
-
1,950
19,697
21,647
55
12
Intangible Assets
Consolidated
2015
$
2014
$
Patents, trademarks and other rights
Cost
255,487
243,771
Accumulated amortisation and impairment
(236,023)
(235,548)
Net carrying value
Licenses and franchises
Cost
Accumulated amortisation and impairment
Net carrying value
Software
Cost
Accumulated amortisation and impairment
Net carrying value
Total Intangibles
(a)
Reconciliation Detailed Table
19,464
8,223
20,000
(20,000)
‑
163,165
(65,445)
97,720
117,184
20,000
(14,393)
5,607
163,165
(179)
162,986
176,816
Patents,
trademarks
and other
rights
$
Licenses
and
franchises
$
Software
$
Total
$
Consolidated
Year ended 30 June, 2015
Balance at the beginning of the year
8,223
5,607
162,986
176,816
Additions
Amortisation
11,716
‑
‑
11,716
(475)
(5,607)
(65,266)
(71,348)
Closing value at 30 June, 2015
19,464
‑
97,720
117,184
Annual report 2015Confidence through control 56
Consolidated
Year ended 30 June, 2014
Balance at the beginning of the year
Additions
Internally generated
Amortisation
Closing value at 30 June, 2014
Patents,
trademarks
and other
rights
$
Licenses
and
franchises
$
Software
$
Total
$
-
-
8,771
(548)
8,223
12,274
-
12,274
-
-
163,165
163,165
-
8,771
(6,667)
(179)
(7,394)
5,607
162,986
176,816
Intangible assets, other than goodwill have finite useful lives. The current amortisation charges for
intangible assets are included under depreciation and amortisation expense in the consolidated
statement of profit or loss and other comprehensive income. Goodwill has an indefinite life and is
not amortised.
13
Other assets
CURRENT
Prepayments
14
Borrowings
CURRENT
Unsecured liabilities:
Bank overdraft
Consolidated
2015
$
2014
$
71,911
381,638
2,568
10,342
Director loan facility from Dr Michael Monsour represents an unsecured loan facility from MPAMM Pty
Ltd, a related entity associated with Dr Monsour. The loan facility is repayable on demand and bears
interest at 7.63% (2014: 8.13%) per annum (annual variable rate per Westpac Banking Corporation
for business loans, plus 2%). The interest charged for the year ended 30 June 2015 amounted to nil
(2014: $3,045). The maximum amount available under the loan agreement is $400,000. Therefore
100% of the facility was undrawn at 30 June 2015, (2014: 100%).
57
15
Trade and other payables
CURRENT
Unsecured liabilities
Trade payables
Other payables
Consolidated
2015
$
2014
$
239,322
230,282
249,495
49,397
488,817
279,679
All amounts are short term and the carrying values are considered to be a reasonable approximation
of fair value.
16
Provisions
Consolidated
2015
$
2014
$
41,000
12,650
53,650
33,800
8,955
42,755
CURRENT
Provisions - audit
Provisions - taxation
Consolidated
Current
Opening balance at 1 July 2014
Additional provisions
Provisions used
Balance at 30 June 2015
Provisions audit
$
Provisions taxation
$
Total
$
33,800
79,166
(71,966)
41,000
8,955
42,755
15,195
94,361
(11,500)
(83,466)
12,650
53,650
Annual report 2015Confidence through control 58
17
Employee Benefits
Current liabilities
Provision for employee benefits
Other employee benefits
Non-current liabilities
Long service leave
Consolidated
2015
$
2014
$
103,421
86,841
9,825
7,897
113,246
94,738
40,713
30,782
(a)
Provision for Long‑term Employee Benefits
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion of this provision includes the total amount accrued for annual leave entitlements
and the amounts accrued for long service leave entitlements that have vested due to employees
having completed the required period of service. Based on past experience, the Company does not
expect the full amount of annual leave or long service leave balances classified as current to be
settled within the next 1 months. However, these amounts must be classified as current liabilities
since the Company does not have an unconditional right to defer the settlement of these amounts in
the event employees wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued for long service leave
entitlements that have not yet vested in relation to those employees who have not yet completed the
required period of service.
In calculating the present value of future cash flows in respect of long service leave, the probability of
long service leave being taken is based on historical data. The measurement and recognition criteria
relating to employee benefits have been discussed in Note 1(m).
18
Reserves and retained surplus
Option reserve
Opening balance
Transfers in
Closing balance
(a)
Share option reserve
Consolidated
2015
$
2014
$
534,737
-
‑
534,737
534,737
534,737
This reserve records the cumulative value of share based payments including employee service
received for the issue of share options. When the option is exercised the amount in the share option
reserve is transferred to share capital.
59
19
Issued Capital
Consolidated
2015
$
2014
$
Fully paid 939,220,439 (2014: 815,361,809) Ordinary shares
92,114,779
88,792,648
53,875,000 (2014: 53,875,000) Unlisted Options
‑‑
-
Total
92,114,779
88,792,648
(a)
Ordinary shares
At the beginning of the reporting period
815,361,809
559,988,815
Consolidated
2015
no
2014
no
Shares issued during the year
- 11 November 2013
- 23 April 2014
- 22 May 2014
- 22 May 2014
- 8 October 2014
- 5 November 2014
- 5 November 2014
‑
‑
‑
‑
129,411,623
75,000,000
34,627,433
16,333,938
28,333,334
85,540,964
9,984,332
-
-
-
At the end of the reporting period
939,220,439
815,361,809
Analytica Limited issued the following fully paid ordinary shares to raise capital for marketing costs
in connection with the launch of the PeriCoach System, and working capital expenses:
On 8 October 2014 Analytica allotted 28,333,334 fully paid ordinary shares at $0.03 per share.
On 5 November 2014 Analytica allotted 85,540,964 fully paid ordinary shares at $0.03 per
share as a result of its 1 for 8 entitlement offer.
On 5 November 2014 Analytica privately placed a further 9,984,332 fully paid ordinary shares
at $0.03 per share.
The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding
up of the Company. On a show of hands at meetings of the Company, each holder of ordinary shares
has one vote in person or by proxy, and upon a poll each share is entitled to one vote.
The Company does not have authorised capital or par value in respect of its shares.
Annual report 2015Confidence through control 60
(b)
Options
(i) For information relating to the Analytica Limited employee option plan, including details of
options issued, exercised and lapsed during the year and the options outstanding at year-end,
refer to Note 23 Share-based payments.
(ii) For information relating to share options issued to key management personnel during the year,
refer to Note 23.
(c)
Capital Management
Management controls the capital of Analytica Limited in order to ensure the entity continues as
a going concern as well as to maintain optimal returns to shareholders and benefits for other
stakeholders. Capital consists of share capital, reserves and retained profit.
There are no externally imposed capital requirements.
The Group monitors capital through the gearing ratio, which is calculated as net debt divided by total
capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is
defined as equity per the consolidated statement of financial position plus net debt.
The target for Analytica Limited’s gearing ratio is between 0% and 50%. The gearing ratios at the
current and prior years are shown below:
Debt to equity gearing ratio for 2015 is 0% (2014: 0%)
There have been no changes in the strategy adopted by management during the year.
20
Contingencies
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2015 (30
June 2014 :None).
21
Operating Segments
Segment information
Identification of reportable segments
The Group 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 Group is managed primarily on the basis of product category and service offerings as
the diversification of the Group’s operations inherently have notably different risk profiles and
performance assessment criteria. Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are
considered to have similar economic characteristics and are also similar with respect to the following:
•
•
•
•
•
the products sold and/or services provided by the segment;
the manufacturing process;
the type or class of customer for the products or services;
the distribution method; and
any external regulatory requirements.
Performance is measured based on segment profit before income tax as included in the internal
financial reports.
61
Types of products and services by reportable segment
(i) Medical Devices
- AutoStart Burette
- PeriCoach (Perineometer)
- ELF 2
Analytica’s lead product is the Perineometer device branded PeriCoach, to assist women and their
clinicians in treatment of Stress Urinary Incontinence. The PeriCoach entered controlled market
release in June 2014, with clinical trials undertaken in November 2014, with its public release in
January 2015.
Analytica is also commercialising the AutoStart Burette infusion system. The AutoStart Burette
set automatically restarts the delivery of intravenous fluid once the burette has dispensed its
predetermined amount of liquid or drug. Automatic restart of the IV fluid, once the drug is dispensed
can provide enormous savings in nursing time during and following a medication event, and reduces
the risk of blood clots forming that may obstruct the intravenous canula.
Analytica has licensed the AutoStart Burette and other burette intellectual property to Medical
Australia (Formerly BMDI Tuta) for distribution in the Australian Market. The AutoStart Burette has a
TGA ARTG entry, CE-marking, and USFDA 510(k) ‘approval’. Distribution agreement has been signed
with Taiwan Allied Dragon who are negotiating registration of the AutoStart Burette in Taiwan.
Analytica continues the development of this medical device for treatment of muscular spasticity.
The ELF2 device delivers a low-frequency voltage used by neurologists to locate nerve endings
during Botulinum neurotoxin A injection treatment. Analytica’s development of this device, licenced
from Gorman ProMed Ltd in 2012, is to enhance usability features of a device currently in use and
respected by the market.
(ii) Corporate
The corporate segment includes all other operations including the administration, and associated
listed public company expenditure.
Basis of accounting for purposes of reporting by operating segments
(a)
Accounting policies adopted
Unless stated below, all amounts reported to the Board of Directors, being the chief operating
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 Group.
Income tax expense
Income tax expense is calculated based on the segment operating net profit using a notional charge
of 30%. The effect of taxable or deductible temporary difference is not included for internal reporting
purposes.
(b)
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.
(c)
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 Group as a whole and are not allocated. Segment liabilities include trade and other payables
and certain direct borrowings.
Annual report 2015Confidence through control 62
(d)
Segment performance
Medical Devices
Corporate
Total
2015
$
2014
$
2015
$
2014
$
2015
$
2014
$
REVENUE
Grant revenue
-
Sales revenue
73,824
-
-
988,107
559,668
988,107
559,668
-
-
-
-
73,824
-
6,228
5,506
51,218
22,309
51,218
22,309
(194)
-
(194)
-
6,228
5,506
-
-
-
-
80,052
5,506
1,039,131
581,977
1,119,183
587,483
(76,376)
(7,394)
(16,989)
(9,514)
(93,365)
(16,908)
Cost of sales
(22,784)
Interest
expense
-
-
-
Marketing
(2,292,793)
(396,620)
(86,778)
(150,763)
-
-
-
-
(22,784)
-
(384)
(3,104)
(384)
(3,104)
-
-
(2,292,793)
(396,620)
(86,778)
(150,763)
-
-
(1,103,175)
(1,000,302)
(1,103,175)
(1,000,302)
(2,835,508)
(2,195,794)
-
-
(2,835,508)
(2,195,794)
(5,314,239)
(2,750,571)
(1,120,548)
(1,012,920)
(6,434,787)
(3,763,491)
(5,234,187)
(2,745,065)
(81,417)
(430,943)
(5,315,604)
(3,176,008)
Royalty
revenue
Interest
revenue
Loss on sale
of equipment
Total
segment
revenue
Depreciation
and
amortisation
Patent
Maintenance
Other
expense
Research and
development
Total
segment
expense
Segment
operating
profit (loss)
(e)
Segment assets
Segment assets
117,184
176,816
943,009
2,574,975
1,060,193
2,751,791
Financial assets at
fair value through
profit and loss
-
-
19,850
73,130
19,850
73,130
63
(f)
Segment liabilities
Segment liabilities
-
-
(698,994)
(450,402)
(698,994)
(450,402)
(g)
Geographical information
In presenting information on the basis of geographical segments, segment revenue is based on
the geographical location of customers whereas segment assets are based on the location of the
assets.
2015
2014
Revenue
Non‑current
assets
Revenue
Non‑current
assets
Australia
1,119,376
175,416
587,483
271,593
22
Cash Flow Information
(a)
Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
Consolidated
2015
$
2014
$
Profit for the year
(5,315,604)
(3,176,008)
Cash flows excluded from profit attributable to operating
activities
Non-cash flows in profit:
- amortisation
- depreciation
71,349
22,017
7,215
9,693
- fair value adjustment Invion Limited (previously CBio Limited)
53,280
(39,699)
- net (gain)/loss on disposal of property, plant and equipment
194
-
- share options expensed
‑
534,737
Changes in assets and liabilities, net of the effects of purchase
and disposal of subsidiaries:
- (increase)/decrease in trade and other receivables
17,159
(23,064)
- (increase)/decrease in prepayments
- (increase)/decrease in inventories
309,727
(373,950)
(54,522)
(177,171)
- increase/(decrease) in trade and other payables
218,964
141,148
- increase/(decrease) in provisions
- increase/(decrease) in employee benefits
10,895
26,511
12,455
30,399
Cashflow from operations
(4,640,030)
(3,054,245)
Annual report 2015Confidence through control 64
23
Share‑based Payments
No options were exercised during the current financial year.
A summary of the Company’s unlisted options issued is as follows:
2015
Grant Date
Expiry
Date
Exercise
price
(cents)
Start of
the year
Granted
during
the year
Exer‑
cised
during
the year
For‑
feited
during
the year
Balance at
the end of
the year
Vested and
exercisable
at the end
of the year
30 October
2013
12 February
2014
22 May
2014
29
October
2018
12
February
2019
22 May
2019
2014:
3.224
44,500,000
4.390
5,000,000
7.330
4,375,000
-
-
-
-
-
-
-
-
-
44,500,000
44,500,000
5,000,000
-
4,375,000
4,375,000
(a) On 11 November 2013 the company issued 44,500,000 unlisted options, comprising 31,000,000
options issued to directors and 13,500,000 options issued to employees. These options have a
5 year term and an exercise price of 3.224 cents.
(b) On 12 February 2014 the company issued 5,000,000 unlisted options for the purpose of CEO
appointment incentive.
(c) On 22 May 2014 the company issued 4,375,000 unlisted options. These have a 5 year term and
an exercise price of 7.38 cents.
24
Related Parties
(a)
The Group’s main related parties are as follows:
(i) Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly, including any director (whether executive or otherwise) of that
entity are considered key management personnel.
For details of remuneration disclosures relating to key management personnel, refer to Note 4:
Interests of Key Management Personnel (KMP) and the remuneration report in the Directors’ Report.
Other transactions with KMP and their related entities are shown below.
Loan facility to the company up to $400,000 provided by Dr Monsour. No funds have been drawn-
down as at reporting date (2014:nil).
65
(ii) Subsidiaries:
The consolidated financial statements include the financial statements of Analytica Limited and the
following subsidiaries:
Name of subsidiary
% ownership interest
2015
% ownership interest
2014
PeriCoach Pty Ltd
100.0
-
(b)
Transactions 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.
The following transactions occurred with related parties:
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 $95,200 (2014:$73,600) were
charged for these services to 30 June 2015, plus preparation of the annual tax return of $11,500
(2014:$8,545).
25
Financial Risk Management
The Company is exposed to a variety of financial risks through its use of financial instruments.
This note discloses the Company‘s objectives, policies and processes for managing and measuring
these risks.
The Company‘s overall risk management plan seeks to minimise potential adverse effects due to the
unpredictability of financial markets.
The Company does not speculate in financial assets.
The most significant financial risks to which the Company is exposed to are described below:
Specific risks
• Market risk - currency risk, cash flow interest rate risk and price risk
•
•
Credit risk
Liquidity risk
Financial instruments used
The principal categories of financial instrument used by the Company are:
•
•
•
•
•
Trade receivables
Cash at bank
Bank overdraft
Investments in listed shares
Trade and other payables
Annual report 2015Confidence through control
66
Objectives, policies and processes
The CFO has primary responsibility for the development of relevant policies and procedures to
mitigate the risk exposure of the Company, these policies and procedures are tabled at the board
meeting following their approval.
Reports are presented at each Board meeting regarding the implementation of these policies and
any risk exposure which the Risk Management Committee believes the Board should be aware of.
Specific information regarding the mitigation of each financial risk to which Company is exposed is
provided below.
Liquidity risk
Liquidity risk arises from the Company’s management of working capital and the finance charges
and principal repayments on its debt instruments. It is the risk that the Company will encounter
difficulty in meeting its financial obligations as they fall due.
The Company’s policy is to ensure that it will always have sufficient cash to allow it to meet its
liabilities when they become due. The Company maintains cash and marketable securities to
meet its liquidity requirements for up to 30-day periods. Funding for long-term liquidity needs is
additionally secured by an adequate amount of committed credit facilities and the ability to sell
long-term financial assets.
The Company manages its liquidity needs by carefully monitoring scheduled debt servicing payments
for long-term financial liabilities as well as cash-outflows due in day-to-day business.
Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well
as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day
period are identified monthly.
At the reporting date, these reports indicate that the Company expected to have sufficient liquid
resources to meet its obligations under all reasonably expected circumstances and will not need to
draw down any of the financing facilities.
The Company‘s liabilities have contractual maturities which are summarised below:
Not later than 1 month
2015
$
2014
$
2,568
10,342
488,817
279,679
491,385
290,021
Bank overdraft and loans
Trade payables
Total
Market risk
(i) Foreign currency sensitivity
Most of the Company transactions are carried out in Australian Dollars. Exposures to currency
exchange rates arise from the Company’s overseas sales and purchases, which are primarily
denominated in USD and CHF.
The Company did not actively reduce exposure of foreign currency risk by utilising forward exchange
contracts for non-Australian Dollar cash flows during the 2015 or 2014 year.
Whilst these forward contracts are economic hedges of the cash flow risk, the Company does not
apply hedge accounting to these transactions. The implications of this decision are that unrealised
foreign exchange gains and losses are recognised in profit and loss in the period in which they occur.
67
Generally, the Company‘s risk management procedures distinguish short-term foreign currency
cash flows (due within 6 months) from longer-term cash flows. Where the amounts to be paid and
received in a specific currency are expected to largely offset one another, no further hedging activity
is undertaken.
Forward exchange contracts are mainly entered into for significant long term foreign currency
exposures that are not expected to be offset by other currency transactions.
Foreign currency denominated assets translated into Australian Dollars at the closing rate are
included in the inventory balance of $231,692 (2014:$177,170). Net currency gains/losses of
$27,923 (2014:$2,271) are disclosed in the statement of profit and loss. Any increase or decrease
in exchange rates would not significantly impact users of the financial statements, as such no
sensitivity analysis is disclosed.
(ii) Cash flow interest rate sensitivity
The Company is exposed to interest rate risk as funds are borrowed at floating and fixed rates.
Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing.
Longer-term borrowings are therefore usually at fixed rates. At the reporting date, the Company
is exposed to changes in market interest rates through its bank borrowings, which are subject to
variable interest rates.
The following table illustrates the sensitivity of the net result for the year and equity to a reasonably
possible change in interest rates of +2.00% and -2.00% (2014: +2.00%/-2.00%), with effect from the
beginning of the year. These changes are considered to be reasonably possible based on observation
of current market conditions.
The calculations are based on the financial instruments held at each reporting date. All other
variables are held constant.
2015
2014
+2.00%
‑2.00%
+2.00%
‑2.00%
$
$
$
$
11,631
(11,631)
39,157
(39,157)
11,631
(11,631)
39,157
(39,157)
(51)
(51)
51
51
(207)
(207)
207
207
Cash and cash equivalents
Net results
Equity
Borrowings
Net results
Equity
(iii) Other price risk
The Company are exposed to equity securities price risk. This arises from listed and unlisted
investments held by the Company and classified as available-for-sale on the consolidated statement
of financial position.
Equity instruments are held for strategic rather than trading purposes and the Company does not
actively trade these investments.
The Company is not exposed to commodity price risk.
There is no profit impact, except for investments held at fair value through profit or loss. Equity would
increase / decrease as a result of fair value movements through the investment reserve.
Annual report 2015Confidence through control 68
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
a financial loss to the Company.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposure to wholesale and retail customers,
including outstanding receivables and committed transactions.
The Company has adopted a policy of only dealing with creditworthy counterparties as a means
of mitigating the risk of financial loss from defaults. The utilisation of credit limits by customers is
regularly monitored by line management. Customers who subsequently fail to meet their credit terms
are required to make purchases on a prepayment basis until creditworthiness can be re-established.
Trade receivables consist of a large number of customers, spread across diverse industries and
geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts
receivable.
The Board receives monthly reports summarising the turnover, trade receivables balance and aging
profile of each of the key customers individually and the Company’s other customers analysed by
industry sector as well as a list of customers currently transacting on a prepayment basis or who
have balances in excess of their credit limits.
Management considers that all the financial assets that are not impaired for each of the reporting
dates under review are of good credit quality, including those that are past due.
The credit risk for liquid funds and other short-term financial assets is considered negligible, since
the counterparties are reputable banks with high quality external credit ratings.
26
Fair Value Measurement
The Group measures the following assets and liabilities at fair value on a recurring basis:
•
Financial assets
Fair value hierarchy
AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be
assigned to a level in the fair value hierarchy as follows:
Level 1
Level 2
Unadjusted quoted prices in active markets for identical assets or liabilities that
the entity can access at the measurement date.
Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3
Unobservable inputs for the asset or liability.
69
The table below shows the assigned level for each asset and liability held at fair value by the Group:
30 June, 2015
$
$
$
$
Level 1
Level 2
Level 3
Total
Recurring fair value measurements
Listed shares
19,850
‑
‑
19,850
30 June, 2014
$
$
$
$
Level 1
Level 2
Level 3
Total
Recurring fair value measurements
Listed shares
73,130
-
73,130
27
Events Occurring After the Reporting Date
As announced on 8 July 2015 Analytica Limited issued 227,164,628 shares under the 1 for 2
renounceable pro-rata rights issue, raising gross proceeds of $1,817,317 at the offer price of 0.8c
per new share.
The Rights Issued was undersubscribed by 242,445,222 shares. Under the underwriting agreement,
122,835,372 shortfall shares will be taken up by investors introduced by the Underwriter (Underwritten
Shares).
In accordance with the terms and Rights Issue and the underwriting agreement, Analytica Limited
will also grant:
- 119,372,193 short dated options exercisable at 1.1c on or before 29 February 2016; and
- 119,372,193 long dated options exercisable at 1.4c on or before 28 February 2018.
All shares issued and options granted were issued on 11 August 2015 and commenced trading on
Wednesday 12 August 2015 with the options granted quotation under ASX ticker codes ALTO (short
dated options) and ALTOA (long dated options).
Except for the above, no other matters or circumstances have arisen since the end of the year which
significantly affected or could significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in future financial years.
Annual report 2015Confidence through control 70
28
Company Details
The registered office of the company is:
Analytica Limited
c/o Avance Chartered Accountants
10 Torquay Road, Pialba
Hervey Bay Qld 4655
Telephone: (07) 3278 1950
Share Registry
Link Market Services
Level 15, 324 Queen Street
Brisbane, Queensland 4000
Telephone: +61 1300 554 474
Email: registrars@linkmarketservices.com.au
The postal address for the registered office of the company is:
Analytica Limited
PO Box 438
Maryborough Qld 4650
The principal place of business is:
320 Adelaide Street
Brisbane Qld 4000
Telephone: (07) 3278 1950
71
Directors’ Declaration
The directors of the Company declare that:
1.
the financial statements and notes for the year ended 30 June, 2015 are in accordance with the
Corporations Act 2001 and:
a. comply with Accounting Standards, which, as stated in accounting policy note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards (IFRS); and
b. give a true and fair view of the financial position and performance of the consolidated group;
2.
the Chief Executive Officer and Chief Finance Officer have given the declarations required by Section
295A that:
a.
the financial records of the Company for the year have been properly maintained in accordance
with section 286 of the Corporations Act 2001;
b.
the financial statements and notes for the year comply with the Accounting Standards; and
c.
the financial statements and notes for the year give a true and fair view.
3.
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 28th day of September 2015
Director
Mr Ross Mangelsdorf
Annual report 2015Confidence through control 72
Independent Audit Report
to the members of Analytica
Limited
Report on the Financial Report
We have audited the accompanying financial report of Analytica Limited, which comprises the consolidated
statement of financial position as at 30 June, 2015, the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the directors’ declaration of the Company and the consolidated entity.
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
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
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 Company’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 Company’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, would be in the same terms if given to the directors as at the time of this
auditor’s report.
Opinion
In our opinion the financial report of Analytica Limited is in accordance with the Corporations Act 2001,
including:
(a)
giving a true and fair view of the Company’s and the consolidated entity’s financial position as at 30
June, 2015 and of their performance for the year ended on that date; and
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
73
Emphasis of Matter
We draw attention to Note to the financial statements which describe the uncertainty related to [enter details
here].
Our opinion is not qualified in respect of this matter.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages of the directors’ report for the year ended
30 June, 2015. The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Analytica Limited for the year ended 30 June, 2015 complies with
section 300A of the Corporations Act 2001.
[Enter place of signing]
Annual report 2015Confidence through control 74
Additional Information for
Listed Public Companies
For the Year Ended 30 June, 2015
ASX Additional Information
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is set out
below. This information is effective as at 19 August, 2015.
Substantial shareholders
The number of substantial shareholders and their associates are set out below:
Shareholders
HALONNA PTY LTD
Number of shares
59,664,451
Voting rights
Ordinary Shares
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Options
No voting rights.
Distribution of equity security holders
Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,000 and over
Shares
Options
ALTO
Options
ALTOA
368,081
654,027
990,458
5,684
250,081
747,472
5,684
250,081
747,472
62,090,206
10,899,093
10,817,427
1,233,234,811
107,469,863
107,551,529
1,297,337,583
119,372,193
119,372,193
There were 2,196 holders of less than a marketable parcel of ordinary shares.
Twenty largest shareholders
75
Number held
% of issued
shares
HALONNA PTY LTD
59,664,451
IGNATIUS LIP PTY LTD
51,292,876
W BROOKS INVESTMENTS
PTY LTD
M P A M M PTY LTD
48,645,000
44,687,785
HALONNA PTY LIMITED
37,500,000
M P MONSOUR MEDICAL
PRACTICE PTY LTD
19,747,277
4.60
3.95
3.75
3.44
2.89
1.52
16,856,418
1.30
TAMBIEN PTY LTD
MR MARK OVERALL TAGG
ARUNDEL + MRS SIGRID
JO-ANNE ARUNDEL
MRS MARGE MEI YU LIP
10
11
MRS SABINA LIP
MR VICTOR PEREIRA
12
MRS SIGRID ARUNDEL
VAN AM MARKETING PTY
LTD
JAYEM PTY LTD
MR SCOTT JAMES BURNS
MR BRIAN WILLIAM
COLLINS + MRS MARALYN
JOAN COLLINS
TAMBIEN PTY LTD
ATLANTIS MG PTY LTD
12,678,000
11,488,233
11,250,000
10,500,000
10,250,000
10,008,599
8,921,214
8,920,097
8,655,000
7,882,975
7,809,971
DALROSE PTY LTD
7,000,000
MR BARRY JOHN WELLBY
7,000,000
0.98
0.89
0.87
0.81
0.79
0.77
0.69
0.69
0.67
0.61
0.60
0.54
0.54
1
2
3
4
5
6
7
8
9
13
14
15
16
17
18
19
20
Annual report 2015Confidence through control 76
Twenty largest option holders
ALTO Options expire 29 February 2016 @1.1 Cents
1
2
3
4
5
6
7
8
9
10
11
12
13
HALONNA PTY LIMITED
12,500,000
IGNATIUS LIP PTY LTD
5,699,208
10.47
4.77
Number
held
% of issued
shares
5,405,000
4.53
W BROOKS INVESTMENTS
PTY LTD
ROTHERWOOD
ENTERPRISES PTY LTD
MRS MARGE MEI YU LIP
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
M P MONSOUR MEDICAL
PRACTICE PTY LTD
ATLANTIS MG PTY LTD
4,551,220
2,943,136
2,560,061
3.81
2.47
2.14
2,500,000
2.09
2,500,000
NUTSVILLE PTY LTD
2,275,610
MENZIES SUPER PTY LTD
2,027,455
MR SCOTT JAMES BURNS
HALONNA PTY LTD
1,666,666
1,666,666
MRS SIGRID ARUNDEL
1,416,666
2.09
1.91
1.70
1.40
1.40
1.19
14
TAMBIEN PTY LTD
1,333,333
1.12
MR MARK OVERELL TAGG
ARUNDEL + MRS SIGRID
JO-ANNE ARUNDEL
MRS SABINA LIP
MR VICTOR PEREIRA
MR MICHAEL PETER
HETRELEZIS
1,250,000
1,250,000
1,166,666
1,142,513
BALARELLI PTY LTD
1,137,805
1.05
1.05
0.98
0.96
0.95
VAN AM MARKETING PTY
LTD
1,137,805
0.95
15
16
17
18
19
20
Twenty largest option holders
ALTOA ‑ Options Expire 28 February 2018 @ 1.4 Cents
77
1
2
3
4
5
6
7
8
9
10
11
12
Number held
% of issued
shares
HALONNA PTY LIMITED
12,500,000
IGNATIUS LIP PTY LTD
5,699,208
W BROOKS INVESTMENTS
PTY LTD
MRS MARGE MEI YU LIP
ATLANTIS MG PTY LTD
5,405,000
2,943,136
2,560,061
10.47
4.77
4.53
2.47
2.14
HSBC CUSTODY
NOMINEES (AUSTRALIA)
LIMITED
M P MONSOUR MEDICAL
PRACTICE PTY LTD
2,500,000
2.09
2,500,000
MR JOHN ARTHUR JARVIS
2,408,333
NUTSVILLE PTY LTD
2,275,610
ROTHERWOOD
ENTERPRISES PTY LTD
MR SCOTT JAMES BURNS
HALONNA PTY LTD
2,182,313
1,666,666
1,666,666
2.09
2.02
1.91
1.83
1.40
1.40
13
MRS SIGRID ARUNDEL
14
TAMBIEN PTY LTD
1,416,666
1.19
1,333,333
1.12
MR MARK OVERELL TAGG
ARUNDEL + MRS SIGRID
JO-ANNE ARUNDEL
MRS SABINA LIP
MR VICTOR PEREIRA
MR MICHAEL PETER
HETRELEZIS
1,250,000
1,250,000
1,166,666
1,142,513
BALARELLI PTY LTD
1,137,805
1.05
1.05
0.98
0.96
0.95
VAN AM MARKETING PTY
LTD
1,137,805
0.95
15
16
17
18
19
20
Securities exchange
The Company is listed on the Australian Securities Exchange.
Annual report 2015Confidence through control 78
79
Annual report 2015Confidence through control Confidence through control