Appendix 4E
Preliminary Final Report
Name of entity
ABN
Analytica Limited
12 006 464 866
1. Reporting Period
Report for the financial year end
Previous corresponding reporting period
30 June 2018
30 June 2017
2. Results for announcement to the market
Revenue from ordinary activities
Profit/(loss) from ordinary activities after
tax attributable to members
Net profit/(loss) for the period attributable
to members
Percentage
increase/(decrease) over
previous corresponding
period
(19)
(34)
(34)
$
1,010,565
(2,159,091)
(2,159,091)
Dividends
Final dividend
Interim dividend
Amount per security
Franked amount per security
Nil
Nil
Nil
Nil
Record date for determining entitlements to
dividend
Not applicable
Brief explanation of any of the figures reported above necessary to enable the figures to be
understood
Reduction in R & D that is claimable for tax rebate in 2016 reduced tax rebate in 2017. Reduction in costs. Company focus was on R & D
and limited marketing.
3. Income
Statement
Refer to Attachment A These accounts are in the process of being audited.
4. Balance Sheet Refer to Attachment A These accounts are in the process of being audited.
5. Statement of
Changes in
Equity
6. Cash Flow
Statement
Refer to Attachment A These accounts are in the process of being audited.
Refer to Attachment A These accounts are in the process of being audited.
Page 1 of 2
7. Dividends
Date dividend is payable
Record date to determine entitlement to the dividend
Amount per security
Total dividend
Amount per security of foreign sourced dividend or distribution
Details of any dividend reinvestment plans in operation
The last date for receipt of an election notice for participation in any
dividend reinvestment plans
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
8. Statement of retained earnings
Consolidated Entity
Balance at the beginning of the year
(99,404,643)
(96,149,860)
Net profit attributable to members of the parent
entity
(2,159,091)
(3,254,783)
2018
2017
Transfer from option reserve
Balance at end of the year
9. Net tangible assets per security
Net tangible asset backing per ordinary
security
(101,563,734)
(99,404,643)
Current period
Previous
corresponding
period
$0.0009
$0.0005
10. Details of entities over which control has been gained or lost
during the period
Not applicable
11. Details of associated and joint venture entities
Name of associate or joint venture entity
PeriCoach Pty Ltd
% Securities held
100
Page 2 of 2
Analytica Limited
ABN 12 006 464 866
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2018
Table of Contents
Table of Contents
Directors Report ______________________________________________________________________ 1
General information ___________________________________________________________________ 1
Information on directors _________________________________________________________ 1
Dr Michael Monsour _____________________________________________________________ 1
Dr. Peter B. Corr. ________________________________________________________________ 2
Dr Thomas Lönngren. ____________________________________________________________ 2
Mr Ross Mangelsdorf ____________________________________________________________ 3
Mr Warren Brooks ______________________________________________________________ 3
Mr Carl Stubbings _______________________________________________________________ 4
Principal activities and significant changes in nature of activities _______________________________ 4
Operating results and review of operations for the year ______________________________________ 4
Operating results _______________________________________________________________ 4
Review of Operations ____________________________________________________________ 5
Financial Review _____________________________________________________________________ 10
Financial position ______________________________________________________________ 10
Other items _________________________________________________________________________ 11
Significant changes in state of affairs_______________________________________________ 11
Changes in the controlled entities and divisions ______________________________________ 11
Events after the reporting date ___________________________________________________ 11
Environmental issues ___________________________________________________________ 11
Future developments and results _________________________________________________ 11
Non-audit services _____________________________________________________________ 12
Auditors independence declaration________________________________________________ 12
Company secretary _____________________________________________________________ 12
Meetings of directors ___________________________________________________________ 12
Employees ____________________________________________________________________ 13
Options ______________________________________________________________________ 13
Remuneration report (audited) ___________________________________________________ 14
Corporate Governance __________________________________________________________ 22
Key Management and Staff ____________________________________________________________ 27
Table of Contents
Geoff Daly, Chief Executive Officer ________________________________________________ 27
Chelsea Cornelius – Product Development and Operations Manager _____________________ 27
Megan Henken – VP Global Marketing _____________________________________________ 27
Auditor’s Independence Declaration _____________________________________________________ 28
Consolidated Statement of Profit or Loss and Other Comprehensive Income _____________________ 29
Consolidated Statement of Financial Position ______________________________________________ 30
Consolidated Statement of Changes in Equity ______________________________________________ 31
Consolidated Statement of Cash Flows ___________________________________________________ 32
Notes to the Financial Statements _______________________________________________________ 33
1: Summary of Significant Accounting Policies _________________________________________ 33
2. Result for the year _________________________________________________________________ 51
Revenue from continuing operations ____________________________________________________ 51
Expenditure _________________________________________________________________________ 51
3. Income Tax _______________________________________________________________________ 52
4. Key management personnel options and rights holdings _______________________________ 53
4. Key management personnel shareholdings ______________________________________________ 55
5 Remuneration of Auditors ____________________________________________________________ 55
6 Earnings per Share __________________________________________________________________ 56
7 Cash and cash equivalents ____________________________________________________________ 56
8 Trade and other receivables __________________________________________________________ 57
9 Inventories ________________________________________________________________________ 57
10 Other financial assets ______________________________________________________________ 57
11 Property, plant and equipment _______________________________________________________ 58
(a) Movements in carrying amounts of property, plant and equipment ___________________ 58
12 Intangible Assets __________________________________________________________________ 59
13 Other assets ______________________________________________________________________ 59
14 Trade and other payables ___________________________________________________________ 60
15 Provisions ________________________________________________________________________ 60
16 Employee Benefits _________________________________________________________________ 60
17 Reserves _________________________________________________________________________ 61
Share option reserve ___________________________________________________________ 61
18 Issued Capital _____________________________________________________________________ 61
(a) Ordinary shares _____________________________________________________________ 62
Table of Contents
(b) Options ___________________________________________________________________ 62
(c) Capital Management _________________________________________________________ 63
19 Contingencies _____________________________________________________________________ 63
20 Operating Segments _______________________________________________________________ 63
Segment information ___________________________________________________________ 63
Geographical information _______________________________________________________ 66
21 Cash Flow Information ______________________________________________________________ 66
22 Share-based Payments _____________________________________________________________ 67
23 Related Parties ____________________________________________________________________ 67
The Group's main related parties are as follows: _____________________________________ 67
Transactions with related parties _________________________________________________ 68
24 Financial Risk Management __________________________________________________________ 68
Specific risks __________________________________________________________________ 68
Financial instruments used_______________________________________________________ 68
Objectives, policies and processes _________________________________________________ 69
Liquidity risk __________________________________________________________________ 69
Market risk ___________________________________________________________________ 70
Credit risk ____________________________________________________________________ 71
25 Fair Value Measurement ____________________________________________________________ 72
Financial assets ________________________________________________________________ 72
26 Events Occurring After the Reporting Date _____________________________________________ 73
27 Company Details __________________________________________________________________ 73
Directors' Declaration _________________________________________________________________ 74
Independent Auditor’s Report __________________________________________________________ 75
ASX Additional Information ____________________________________________________________ 80
Substantial shareholders ______________________________________________________________ 80
Distribution of equity security holders ___________________________________________________ 80
Twenty largest share holders ___________________________________________________________ 80
Voting rights ________________________________________________________________________ 81
Ordinary Shares _______________________________________________________________ 81
Options ______________________________________________________________________ 81
Pg. 01
Directors Report
Directors Report
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 as follows. Directors have been in office
since the start of the year to the date of this report unless otherwise stated.
Dr Michael Monsour
MBBS-HONS, FACRRM, FAICD
Chairman of the Board (appointed 28 June 2004)
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 and indirect
• Dr MP Monsour ordinary shares – 3,583,713
• MPAMM Pty Ltd ordinary shares – 199,750,620
• Halonna Pty Ltd ordinary shares – 413,661,334
• MP Monsour Medical Practice Pty Ltd ordinary shares – 156,379,178
Other related parties
• Ordinary shares 2,801,534
Unlisted options
•
•
13,000,000 @ 3.24c expire 29/10/2018
20,000,000 @ 1.30c expires 21/12/2021
Pg. 02
Directors Report
Dr. Peter B. Corr.
Non-Executive Director (appointed 23 May 2017)
Received his doctorate from Georgetown University School of Medicine.
Dr. Corr has extensive experience in the discovery and development of
medicines as well as the sale of assets to major multinational corporations. Dr.
Corr co-founded and is Managing General Partner of Auven Therapeutics, a
private equity firm pursuing a life science investment strategy where products are acquired, developed
and then sold to multinational pharmaceutical firms. Dr. Corr was previously a Professor of Medicine and
Pharmacology at Washington University for 18 years. He then joined Searle as Senior VP of Discovery
Research, and subsequently was President of Research and Development at Warner Lambert / Parke
Davis and then President, worldwide Development at Pfizer, and Corporate Senior Vice President of
Science and Technology at Pfizer.
Interest in shares and options
Indirect
•
INOV8 LLC - Ordinary shares 360,790,157
Unlisted options
•
10,000,000 @ 1.30c expires 22/12/2022
Dr Thomas Lönngren.
Non-Executive Director (appointed 10 August 2015)
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 Pharmaceutical
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.
Pg. 03
Directors Report
Interest in shares and options
Unlisted options:
•
•
10,000,000 @ 1.62c expires 10/12/2020
10,000,000 @ 1.30c expires 21/12/2021
Mr Ross Mangelsdorf
B.Bus, FCA, CTA, MAICD
Executive Director (appointed 7 October 2008)
Mr Mangelsdorf performs the function of Chief Financial Officer.
Mr Mangelsdorf is a Director/partner of a chartered accounting firm for 35
years. He works with SME production, manufacturing and retail firms
assisting with business, taxation and management services.
Interest in shares and options, direct and indirect
• Director’s interest in ordinary shares: 298,939
• RM & JM Mangelsdorf - Ordinary shares 298,939
•
•
Tambien Pty Ltd - Ordinary shares 58,015,811
Edmonmont Pty Ltd – Ordinary shares 33,870,510
Other related parties
• Ordinary shares 298,939
Unlisted options
•
•
•
10,000,000 @ 3.24c expire 29/10/2018
10,000,000 @ 1.30c expires 21/12/2021
10,000,000 @ 1.30c expires 22/12/2022
Mr Warren Brooks
Non- Executive Director (appointed 25 July 2011, resigned 30 November
2017)
Securities Institute Certificate, Diploma in Financial Planning
Warren previously had 30 years’ experience working in Investment
Banking and Stockbroking.
Pg. 04
Directors Report
Mr Carl Stubbings
Non-Executive Director (appointed 13 January 2013, resigned 30
November 2017)
Bachelor of Applied Science (Medical Technology) degree from the
Queensland University of Technology.
Mr Stubbings’ experience in the sector spans over 30 years with a focus
on medical diagnostics as well as biotechnology. He has specialised in
sales with a particular emphasis on marketing across North America, Latin America, Asia Pacific and
Europe as well as roles covering manufacturing and administration. Previously a board member of
the Queensland North America Biotech Advisory Council.
Other current directorships in listed entities. Mr Stubbings’ works as a business development
consultant for Biotron (ASX:BIT) and BCAL Diagnostics.
Mr Stubbings is also currently a non-executive director of unlisted public company Sienna Diagnostics
and Otakaro Pathways Ltd (New Zealand), providing strategic input for both companies as they
initiate commercialisation of their diagnostic tests.
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);
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 Group's principal activities during the year.
Operating results and review of operations for the year
Operating results
The consolidated loss of the Group amounted to $(2,159,091), after providing for income tax. This
represented a decrease on the loss of $1,095,613 result reported for the year ended 30 June 2017 of
$(3,254,704). Increase for market development of $51,967 to $408,004 (2017: $356,037). Research
and development expenditure of $1,822,313 (2017: $2,341,091) was incurred due to the continued
development of the PeriCoach system. Administration costs decreased by $5,980 to $871,300 (2017:
$877,280).
Pg. 05
Directors Report
Review of Operations
PeriCoach
Executing the commercialisation strategy for the PeriCoach is focussed on the flowing milestones:
• Building ‘best-in-class’ conservative treatment for pelvic floor conditions, with a particular
focus on urinary incontinence.
• Validate and extend clinical credibility and effectiveness of PeriCoach.
•
•
Confirming market acceptance while creating a positive sales environment.
Securing a competitive partnering agreement with a major multinational company with the
resources to make the PeriCoach a global success.
Best-In-Class
•
The PeriCoach system qualifies for the Australian Government’s Research and Development
Tax incentive. The company continues to make substantial investment in the PeriCoach to
establish this unique approach as ‘best in class’. As a result of this investment Analytica
received a $938,968 refund for 2017 year. Substantial investment in the development of
PeriCoach has continued through 2018. The board strongly believe development must
continue to secure and enhance the partnering value of the PeriCoach.
•
The PeriCoach is a sophisticated medical device designed to collect valuable behavioural and
performance data during treatment of pelvic floor dysfunction that has not been available
previously outside of a clinical environment. The Australian limited market release in 2014
identified opportunities to improve ease of use, connectivity and responsiveness. These
enhancements were incorporated in Version 2 of the PeriCoach. The company has continued
to collect data and identified further enhancements to the PeriCoach, which include
monitoring, and biofeedback capabilities. These additional features have been incorporated
and introduced with the release of Version 3 of PeriCoach in 2017.
•
The intuitive and patent-protected design of the PeriCoach incorporates sensors which
provide an ongoing flow of data collected in real-time. This data is transmitted to Analytica’s
proprietary cloud database for further analysis. The PeriCoach smartphone app simplifies
the sensor information providing immediate feedback to the user which drives performance
and motivation. The development of the software, sensor hardware and algorithms is an
ongoing task as we continue to use the data and develop the science from our unique
insights into women’s pelvic health.
• A significant feature released with the Version 3 is feedback on technique. This most
valuable and unique ability to accurately assist women is a result of sophisticated algorithms
developed from the continuing real world data collection.
Pg. 06
Directors Report
•
The data collected also provide a resource to demonstrate not only the efficacy of the
product at a particular point in time, but how our product development program has
improved efficacy over time. This improvement trajectory demonstrates to potential
acquirers the first-mover advantage we have. Analytica has the world’s biggest database of
pelvic floor exercise. We have the data, we can analyse the data and we can improve our
treatments based on the evidence we possess.
•
In conjunction with the release of PeriCoach the purchase and payment system was further
refined. The UK and the US, ordering and payment portals are now linked to each country's
logistics.
•
The web page and digital media presence continues to evolve to ensure that the PeriCoach
remains fresh and interesting to consumers. The marketing efforts assist with defining
critical communication strategies and sales channels for a partner to access consumers.
• Australian (TGA) and European (CE) registration was achieved in 2014 supported by
extensive documentation and testing.
•
Following United States Food and Drug Administration (FDA) approval in March 2015 as a
prescription only product the company lodged an application with the FDA for PeriCoach to
be approved as an ‘Over the Counter’ (OTC) product, meaning it does not require a
prescription. The FDA granted this important milestone in the world’s largest medical device
market in July 2016.
Establish and extend clinical credibility of effectiveness
• Data is the core of the PeriCoach system. Every user is contributing to the growth and
diversity of the the world’s largest pelvic floor database. The current development phase is
building the sophisticated tools to provide powerful insights into the effectiveness of the
PeriCoach system, and the expansion of knowledge of the pelvic floor.
•
Pericoach version 3 all comers, prospective study performed to assess the change in key
clinical measures: Applied Strength, Leak Events, Leak Volume. PeriCoach version 3 users
encouraged to participate in “8 week Challenge” with reminders to exercise a minimum of
five sessions a week, enter information into a bladder diary three days a week, and respond
to a quality of life survey at onset, four and eight weeks.
Pg. 07
Directors Report
Applied Strength – V3
% of Baseline Strength, n=176
150%
140%
130%
120%
110%
100%
90%
80%
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
0
2
4
6
8
10
Week
Leakage Events – V3
Leakage Episodes per day n=37
0
1
2
3
4
5
6
7
8
9
10
Week
Pg. 08
Directors Report
Leakage Volume – V3
Leakage Volume per day (mL) n=37
900
800
700
600
500
400
300
200
100
0
0
1
2
3
4
5
6
7
8
9
10
Week
• Analysis by an independent biostatistician reveals significant improvements in pelvic floor
strength in five weeks, and reduction in urine volume and leakage episodes in only three
weeks. More than 60% of V3 users who used the system for at least three weeks reported
highly significant reduction in leakage episodes (p=.0059) and volume (p=.0017) by week
three and beyond. The post-approval all comers observational study, reviewed women using
the version 3 PeriCoach system. By week eight, more than 75% of the users have at least
80% improvement in both episodes and volume. Assessment of strength was conducted
through measurement of direct force exerted on the vaginal sensor by a user during each
session. This is an objective measure rather than subjective digital examination common for
pelvic strength assessment. PeriCoach version 3 users demonstrated week-on-week
improvement in strength with nearly a third, on average, having at least a 50% improvement
in strength, resulting in predictive improvement by week five (p=.004).
•
•
•
Established data indicate women performing un-assisted pelvic exercises report limited
progress outcomes of only 3% almost continent, 87% unchanged and 10% worse.
Clinical advisory boards consisting of key opinion leaders in both Australia and the United
States continue to provide expert guidance and clinical relations support.
Clinical papers and case studies using PeriCoach in treatment have been published in leading
clinical urology journals. Data from the PeriCoach clinical trial was accepted and presented
at international urogynaecology, physiotherapy and sexual health clinical conferences.
Pg. 09
Directors Report
Testing market acceptance and create a positive sales environment
•
The company has been represented at top urogynaecology and physiotherapy clinical
conferences
in Australia, United States, Europe, and the United Kingdom.
These
conferences are a platform to introduce product, gain clinical perspective on conservative
management of PFD as well as disseminate PeriCoach clinical evidence and core
differentiators to non-clinical competitors.
•
•
•
•
Targeted regional clinical campaigns to educate clinicians and their support teams on
product availability and updates, training program expansion, and efficacy data.
Engagement of clinical advisory board members and key opinion leaders in clinical events.
Expansion of the PeriCoach health care network.
Continued creativity and refinement of brand assets to build momentum online among
search engine marketing and social media.
• Developing video training and promotional assets.
•
Strategic engagement with core demographic audience via bloggers and public relations
efforts to garner regional brand ambassadors that resonate with a global audience.
• Data driven programming to build awareness and derive evidence-based insights about our
core audience, messaging and content triggers that prompt visits to www.pericoach.com.
•
Search Engine Optimization driven by expanded web content, responsive advertising, in
addition to continuous Google Analytics monitoring, further define digital profile for online
consumer journey.
Partnership
The US, EU and Chinese markets are considered the largest medical device markets in the world.
Addressing these markets competitively will require significantly more marketing and sales resources
than Analytica has available. The company is actively engaged in discussions with potential partners
that have the capacity to maximise the sales of PeriCoach in these important regions. Directors Dr
Peter Corr and Dr Thomas Lönngren have experience and networks in the US and EU.
In addition, consultants Navigant Capital Advisors LLC have been engaged to assist with the
development of the company’s partnering strategy.
AutoStart Infusion System
This product, despite overwhelming evidence of cost effectiveness and safety has struggled for a
foothold in the small Australian market. Medical Australia Ltd (ASX:MLA) has successfully listed the
AutoStart burette on the Queensland Health purchasing schedule. Inclusion in this schedule is a
prerequisite for all public Queensland health facilities to purchase medical devices. Analytica
believes this important step could provide a valuable opportunity to gain some market share in
Australia.
Pg. 10
Directors Report
As a result of this listing the system is being trialled in a Queensland hospital, with encouraging
support.
Analytica is investigating the opportunities presented by home based hospital care for the AutoStart
infusion system. Whereas hospitalisation costs upwards of US$1,500 to US$2,500 per day, the
average cost of home infusion is US$150 to US$200 per day. Additionally, the potential savings
accrued by preventing hospital-acquired infections are significant, as these infections result in direct
costs to hospitals of US$28 to US$45 billion a year in the US. The global home infusion therapy
market in 2014 was estimated at US$12,187 million. This is a market well suited to the AutoStart
infusion system, with the AutoStart infusion system features of safety, simplicity, and cost
effectiveness.
Intellectual Property
Analytica continues to develop and protect its intellectual property through patents, trademarks and
design registrations. Protection of intellectual property is critical in partnering negotiations and
assists in securing a potential partner’s freedom to operate in the market.
The PeriCoach has patent protection in Australia, Japan and China providing patent coverage until
2032. Analytica also has PeriCoach patents pending in the PCT national phase in Brazil, India,
Germany, and France. Design registrations have also been granted in these jurisdictions.
Analytica's R&D team continues to develop additional novel ideas for future products and product
enhancements during the PeriCoach product development process.
Analytica's original
embodiment is patent pending in Germany and patented in Australia, US and China until 2026.
licensed burette patents (1995) have expired and more recent (2006)
Analytica's Flush feature developed in 2008 is currently in the Patent Cooperation Treaty (PCT)
national phases, and has been granted patents in China, with US, Australia and Germany pending.
Analytica also maintains registered trademarks in the various jurisdictions above and owns top-level
(.com) and regional internet domains with these trademarks.
Financial Review
Financial position
The net assets of the Group have increased by $ 1,637,008 from 30 June 2017 to $ 2,848,278 at 30
June 2018.
The directors have allotted shares to secure the company’s financial position to continue the
development of the PeriCoach, and support clinical evidence collection and market assessment of the
PeriCoach in the USA and UK/Ireland.
Shareholders contributed $ 3,757,198 in capital for the financial year ended 30 June 2018.
Pg. 11
Directors Report
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:
• October 2017, rights issue and placement.
• November 2017, appointment Navigant Capital Advisors LLC.
•
•
January 2018, submission to senate enquiry into pelvic floor slings.
January 2018, exercise 1st tract of options.
• March 2018, Change of manufacture.
• May 2018, TGA clearance to assist treatment pelvic organ prolapse.
• May 2018, exercise of 2nd tract of options and placement.
Changes in the controlled entities and divisions
No changes.
Events after the reporting date
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.
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
Future developments and results
Continue the commercialisation strategy for the PeriCoach namely:
•
Executing the commercialisation strategy for the PeriCoach is focussed on the following
milestones:
• Building ‘best-in-class’ conservative treatment for pelvic floor conditions, with expansion
from the current focus on urinary incontinence to include pelvic organ prolapse, a condition
which affects up to 10% of all women at some stage of their lives.
• Validate and extend clinical credibility and effectiveness of PeriCoach
•
•
Confirming market acceptance while creating a positive sales environment
Securing a competitive partnering agreement with a major multinational company with the
resources to make the PeriCoach a global success.
Pg. 12
Directors Report
Non-audit services
The Board of Directors 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 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 2018:
Bentleys QLD Pty Ltd
Preparation of Tax Return
Auditors independence declaration
2018
$3,000
2017
$3,000
The lead auditors, independence declaration for the year ended 30 June, 2018 has been received and
can be found on page 28 of the financial report.
Company secretary
The following person held the position of Company 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.
Bryan 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, 11 meetings of directors were held. Attendances by each director during the year
were as follows:
Pg. 13
Directors Report
Number eligible to attend
Number Attended
Dr Michael Monsour
Mr Ross Mangelsdorf
Dr Thomas Lönngren
Dr Peter Corr
Mr Warren Brooks
Mr Carl Stubbings
11
11
11
11
5
5
11
11
11
11
5
5
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 of its staff. Over 65% of current full-time equivalent employees are female.
Where possible Analytica offers 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:
Pg. 14
Directors Report
Grant Date
Date of Expiry Exercise Price
Number under Option
Unlisted Options
30-Jun-13
12-Feb-14
22-May-14
28-Sep-15
26-Nov-15
24-Nov-16
09-Jun-17
09-Jun-17
28-Jun-17
30-Nov-17
29-Oct-18
12-Feb-19
22-May-19
28-Feb-20
10-Dec-20
22-Dec-21
08-Jun-22
08-Jun-22
22-Dec-21
30-Nov-22
0.03220
0.04390
0.07330
0.01900
0.01620
0.01300
0.01300
0.01036
0.01300
0.01300
44,500,000
5,000,000
4,375,000
10,416,667
14,000,000
70,000,000
41,000,000
33,350,000
2,500,000
20,000,000
245,141,667
Option holders do not have any rights to participate in any issues of shares or other interests in the
Company or any other entity.
For details of options issued to directors and other key management personnel as remuneration,
refer to the remuneration report.
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 Board, following professional advice
from independent external consultants when required.
• 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.
Pg. 15
Directors Report
•
•
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 performance of key management personnel is measured against criteria agreed 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. 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%, 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 board 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 plus statutory superannuation.
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
Pg. 16
Directors Report
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. There is no
provision in the employment contract for the payment of any termination payments other than
accrued statutory entitlements.
Mr Mangelsdorf is employed by the Company as CFO. Mr Mangelsdorf has 36 years in the accounting
profession. Due to the size of the company and the nature of its operations, the employment
contract is open- ended and not for a specific time frame. Mr Mangelsdorf can be terminated by
either party giving notice commensurate with the period of employment. There is no provision 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 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.
Pg. 17
Directors Report
2018
$
2017
$
2016
$
2015
$
2014
$
Revenue
1,010,565
1,254,337
2,116,243
1,119,378
587,483
Net Profit/(Loss)
(2,159,091)
(3,254,704)
(3,881,472)
(5,315,604)
(3,176,008)
Share Price at
Year end
Dividends Paid
(cents)
0.01
-
0.01
0.01
0.01
-
-
-
0.04
-
Performance conditions linked to remuneration
Company executive fees are not linked to the performance of the Group. However, to align
executives' interests with shareholder interests, the executives are encouraged to hold shares in the
Group.
Employment details of members of key management personnel
The following table provides employment details of persons who were, during the financial year,
members of key management personnel of the Group.
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.
Pg. 18
Directors Report
Group KMP
Position Held as
at 30 June 2018
and any Change
during the Year
Contract
Details
Duration and
Termination
Proportions of
Elements of
Remuneration
Related to
Performance
Proportions of
Elements of
Remuneration Not
Related to
Performance
l
y
r
a
a
s
-
n
o
N
d
e
s
a
b
-
h
s
a
C
%
s
e
v
i
t
n
e
c
n
I
%
s
t
i
n
U
s
e
r
a
h
S
i
%
s
t
h
g
R
s
n
o
i
t
p
O
%
s
e
e
F
y
r
a
a
S
d
e
x
i
l
F
%
l
a
t
o
T
Directors
Dr M
Monsour
Mr R
Mangelsdorf
Dr T
Lönngren
Dr P Corr
KMP
G Daly
Chairman
Annual Review
Executive
Director and
Chief Financial
Officer
Non-executive
Director
Non-executive
Director
Annual Review*
Annual Review
Annual Review
Chief Executive
Officer
*
-
-
-
-
-
-
-
-
-
-
-
100
100
9%
91%
100
4%
96%
100
25%
75%
100
-
100
100
* Open - ended contract; Termination by 5 weeks notice or 4 weeks employee.
Service Agreements
On appointment to the Board, all non-executive directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and terms,
including 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
Pg. 19
Directors Report
Officer which require 5 weeks’ notice, may be terminated by giving 4 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.
Remuneration details for the year ended 30 June 2018
The following tables 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.
2018
short term
Total
s
e
e
f
y
r
a
l
a
s
h
s
a
c
$
s
u
n
o
b
y
r
a
t
e
n
o
m
n
o
n
r
e
h
t
o
$
$
$
$
post
employment
long
ter
m
n
o
i
t
a
u
n
n
a
r
e
p
u
s
$
t
s
o
p
r
e
h
t
o
t
n
e
m
y
o
p
m
e
l
n
o
i
t
a
n
m
r
e
t
i
$
$
share based
payments
Total
s
t
h
g
i
r
&
s
n
o
i
t
p
o
$
s
t
i
n
u
&
s
e
r
a
h
s
d
e
l
t
t
e
s
-
h
s
a
c
$
$
$
Directors
Dr M
Monsour
Mr R
Mangelsdorf
Dr T
Lönngren
Dr P Corr
Mr W Brooks
Mr C
Stubbings
KMP
G Daly
75,000
176,000
50,000
50,000
20,833
20,833
220,000
612,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
75,000
7,125
176,000 16,720
50,000
4,750
50,000
4,750
20,833
1,979
20,833
1,979
220,000 20,900
612,666 58,203
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,005 *
2,065 #
18,005 *
-
826 #
-
38,901
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
82,125
210,725
56,815
72,755
22,812
23,638
240,900
709,770
# These share based payments were issued during the 2016 year and are being apportioned over the
2016, 2017 and 2018 financial years.
* These share based payments were approved at the AGM held on 30 November 2017 and issued
during the 2018 year and are being apportioned over the 2018 and 2019 financial years.
Pg. 20
Directors Report
2017
short term
Total
post
employment
long
term
share based payments
Total
s
e
e
f
y
r
a
a
s
h
s
a
c
l
$
s
u
n
o
b
y
r
a
t
e
n
o
m
n
o
n
r
e
h
t
o
$
$
$
$
n
o
i
t
a
u
n
n
a
r
e
p
u
s
$
t
s
o
p
r
e
h
t
o
t
n
e
m
y
o
p
m
e
l
n
o
i
t
a
n
m
r
e
t
i
$
$
s
t
h
g
i
r
&
s
n
o
i
t
p
o
$
s
t
i
n
u
&
s
e
r
a
h
s
d
e
l
t
t
e
s
-
h
s
a
c
$
$
$
Directors
Dr M Monsour
75,000
Mr R
Mangelsdorf
176,000
Mr W Brooks
50,000
Mr C Stubbings
50,000
-
-
-
-
-
-
-
-
-
-
-
-
75,000
7,125
176,000
16,720
50,000
4,750
50,000
4,750
Dr T Lönngren
50,000
-
-
-
50,000
4,750
Dr P Corr
5,682
5,682
540
KMP
G Daly
210,000
616,682
-
-
-
-
-
-
210,000
19,950
616,682
58,585
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
126,265
63,133
63,133
-
-
-
-
-
-
208,390
255,853
117,883
67,097
-
-
121,847
73,042
-
181,783
574,453
-
-
-
-
-
-
127,792
6,222
-
-
411,733
1,249,720
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 management personnel and other executives
during the year ended 30 June 2018 (2017: nil).
Pg. 21
Directors Report
Description of options/rights granted as remuneration
Details of the options granted as remuneration to those key management personnel and executives
during the year:
2018
Granted as
remuneration
No.
Value of
options
at grant
date
$
Vested
during the
year
Lapsed
during
the
year
Value of
lapsed
options at
lapse date
No.
No.
$
Directors
Mr R Mangelsdorf
Dr P Corr
10,000,000
10,000,000
0.0031
0.0031
-
-
-
-
2017
Granted as
remuneration
Value of
options
at grant
date
$
Vested
during the
year
Lapsed
during
the
year
Value of
lapsed
options at
lapse date
No.
No.
$
Directors
Dr M Monsour
Mr R Mangelsdorf
Mr W Brooks
Mr Carl Stubbings
Dr Thomas Lönngren
Mr Carl Stubbings *
Dr Thomas Lönngren
*
KMP
Mr G Daly
Mr G Daly
Mr G Daly
Mr G Daly
No.
20,000,000
10,000,000
10,000,000
10,000,000
10,000,000
4,000,000
0.0063
0.0063
0.0063
0.0063
0.0063
0.003
-
-
-
-
-
1,333,333
10,000,000
0.003
3,333,333
10,000,000
10,000,000
14,000,000
4,250,000
-
0.0046
0.0046
-
0.0049 14,000,000
-
0.0049
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options were approved at the 2017 November AGM for directors Dr Peter Corr and Ross
Mangelsdorf. These options are brought to account at valuation prepared by BDO Chartered
Accountants.
*Options were issued to Mr C Stubbings and Dr T Lonngren in 2016 and vest over 3 years.
All options were issued by Analytica Limited and entitle the holder to ordinary shares in Analytica
Limited for each option exercised.
Pg. 22
Directors Report
Description of options/rights granted as remuneration (continued)
There have not been any alterations to the terms or conditions of any share based payment
arrangements since grant date.
Corporate Governance
Analytica Ltd is committed to implementing the highest possible standards of corporate governance.
In determining what those high standards should involve, Analytica Ltd has turned to the ASX
Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX
Principles) and has a corporate governance framework that reflects those recommendations
within the structure of the Company.
The Board of Analytica Ltd approved an updated series of policies and charters in line with the
amendments to the ASX Principles. The Company’s policies and charters together form the basis of
the Company’s governance framework at the date of signing of the directors’ report.
Within this framework:
•
•
•
•
the Board of Directors is accountable to shareholders for the performance of the Company;
the Company’s goals to achieve milestones are set and promulgated;
the risks of the business are identified and managed, and
the Company’s established values and principles underpin the way in which it undertakes its
operations.
The Company has in place an entrenched, well developed governance culture which has its
foundations in the ethical values that the Board, management and staff bring to the Company and
their commitment to positioning the Company as a leader in its field.
In certain instances, due to the size and stage of development of Analytica and its operations, it may
not be practicable or necessary to implement the ASX Principles in their entirety. In these
instances, Analytica Ltd has identified the areas of divergence.
Pg. 23
Directors Report
Key management personnel options and rights holdings
Balance
beginning of
year
Granted as
remunerati
on
d
e
s
i
c
r
e
x
E
r
e
h
t
O
e
g
n
a
h
c
Balance at
the end of
year
Vested
during the
year
Vested and
exercisable
2018
Directors
13,000,000
10,000,000
Unlisted Options @ 3.24 cents, Expire 29/10/18
Dr M
Monsour
Mr R
Mangelsdorf
Unlisted Options @ 1.62 cents, Expire 10/12/20
Dr T
Lonngren
Unlisted Options @ 1.3 cents, Expire 21/12/21
Dr M
Monsour
Mr R
Mangelsdorf
Dr T
Lonngren
Unlisted Options @ 1.3 cents, Expire 20/11/22
10,000,000
20,000,000
10,000,000
10,000,000
-
-
-
Dr P Corr
Mr R
Mangelsdorf
Other KMP
-
-
10,000,000
10,000,000
Unlisted Options @ 3.24 cents, Expire 29/10/18
G Daly
6,000,000
Unlisted Options @ 4.50 cent, Expire 12/02/19
5,000,000
G Daly
Unlisted Options @ 1.30 cent, Expire
8/06/22
G Daly
10,000,000
Unlisted Options @ 1.30 cent, Expire 8/06/22
G Daly
10,000,000
Unlisted Options @ 1.036 cent, Expire 8/06/22
G Daly
14,000,000
Unlisted Options @ 1.036 cent, Expire 8/06/22
G Daly
4,250,000
-
-
-
-
-
-
122,250,000
20,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,000,000
10,000,000
-
-
13,000,000
10,000,000
10,000,000
3,333,334
10,000,000
20,000,000
10,000,000
10,000,000
10,000,000
10,000,000
6,000,000
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
-
10,000,000 10,000,000
10,000,000
10,000,000 10,000,000
10,000,000
14,000,000
-
14,000,000
4,250,000
4,250,000
4,250,000
142,250,000 27,583,334
77,250,000
Pg. 24
Directors Report
Key management personnel options and rights holdings
2017
Balance
beginning of
year
Granted as
remuneration
d
e
s
i
c
r
e
x
E
r
e
h
t
O
e
g
n
a
h
c
Balance at the
end of year
Vested
during the
year
Vested and
exercisable
Directors
Unlisted Options @ 3.24 cents, Expire 29/10/18
Dr M Monsour
13,000,000
Mr R
Mangelsdorf
10,000,000
Mr W Brooks
Unlisted Options @ 1.62 cents, Expire 10/12/20
8,000,000
Mr C Stubbings
Dr T Lonngren
Unlisted Options @ 1.3 cents, Expire 21/12/21
4,000,000
10,000,000
-
-
20,000,000
10,000,000
Dr M Monsour
Mr R
Mangelsdorf
Mr W Brooks
Mr C Stubbings
Dr T Lonngren
Other KMP
Unlisted Options @ 3.24 cents, Expire 29/10/18
10,000,000
10,000,000
10,000,000
-
-
-
G Daly
Unlisted Options @ 4.50 cent, Expire 12/02/19
6,000,000
G Daly
Unlisted Options @ 1.30 cent, Expire 8/06/22
5,000,000
-
-
G Daly
Unlisted Options @ 1.30 cent, Expire 8/06/22
-
10,000,000
G Daly
Unlisted Options @ 1.036 cent, Expire 8/06/22
10,000,000
-
G Daly
Unlisted Options @ 1.036 cent, Expire 8/06/22
14,000,000
-
G Daly
-
4,250,000
56,000,000
98,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,000,000
- 13,000,000
10,000,000
- 10,000,000
8,000,000
-
8,000,000
4,000,000
10,000,000
1,333,333
3,333,333
2,666,666
6,666,666
20,000,000
10,000,000
10,000,000
10,000,000
10,000,000
6,000,000
5,000,000
10,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
-
-
-
14,000,000
14,000,000 14,000,000
4,250,000
-
-
154,250,000
18,666,666 60,333,332
Pg. 25
Directors Report
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
2018
Directors
Dr M Monsour
562,454,437
Mr R
Mangelsdorf
Dr P Corr
KMP
Mr G Daly
58,583,055
320,702,362
941,739,854
881,658
942,621,512
-
-
-
-
-
-
210,920,408
773,374,845
33,901,144
92,484,199
40,087,795
284,909,347
360,790,157
1,226,649,201
1,200,000
2,081,658
286,109,347
1,228,730,859
2017
Balance at
beginning of
year
On exercise of
options
Other changes
during the year
Balance at end of
year
Directors
Dr M Monsour
Mr R Mangelsdorf
Mr W Brooks
Mr C Stubbings
Dr P Corr
KMP
Mr G Daly
500,266,164
50,571,377
48,645,000
2,746,322
202,324,638
804,553,501
881,658
805,435,159
-
-
-
-
-
-
-
-
62,188,273
8,011,678
-
-
118,377,724
188,577,675
562,454,437
58,583,055
48,645,000
2,746,322
320,702,362
993,131,176
-
881,658
188,577,675
994,012,834
Pg. 27
Directors Report
Key Management and Staff
Geoff Daly, Chief Executive Officer
Mr Daly is a Chartered Biomedical and Mechanical Engineer with 25 years of
professional engineering experience, the last 20 in the medical device industry.
Mr Daly has expertise in design processes, quality systems, and business system
improvement, and is trained in the use of Six Sigma tools. He has extensive
hands-on design experience of product development in FDA QSR and ISO 13485
environments in some of Australia's largest and smallest medical device companies.
Chelsea Cornelius – Product Development and Operations
Manager
Chelsea started at Analytica in 2008 and has been a key developer of the
PeriCoach. Chelsea has a double degree of Arts (Cultural Studies) and
Engineering (Mechanical; Hons) at Swinburne University, and a Masters of
Biomedical Engineering at Melbourne University. In 2016 Chelsea received the
Medical Technology Association of Australia Outstanding Achievement Award.
Megan Henken – VP Global Marketing
Megan has a degree in Business Management, emphasis in Marketing from
Colorado State University. She is a global marketing and sales strategist with
over 11 years of healthcare commercial experience, launching of over 20 FDA
regulated products. Her experience spans clinical diagnostics, point of care
medical devices and health care distribution.
Pg. 29
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Note
2
2
2
2
2
2
2
2
2
2
3
Continuing operations
Sales Revenue
Cost of Sales
Gross Profit
Grant Income
Investment revenue
Royalty Income
Administration expense
Depreciation, amortisation and impairments
Finance expenses
Foreign Currency Gains and Losses
Investments Fair Value Adjustment
Marketing expenses
Occupancy expenses
Option Expenses
Patent maintenance expenses
Research and development expense
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Profit attributable to:
Members of the parent entity
Total comprehensive income attributable to:
Members of the parent entity
Consolidated Group
2018
2017
$
$
47,416
(21,991)
25,425
938,968
12,376
11,805
(871,300)
(12,570)
(277)
(20,741)
33,431
(408,004)
(5,548)
(38,901)
(1,442)
(1,822,313)
(2,159,091)
-
(2,159,091)
-
(2,159,091)
-
(2,159,091)
-
(2,159,091)
73,410
(37,656)
35,754
1,154,998
15,306
10,623
(877,280)
(17,664)
(231)
(26,535)
(2,089)
(356,037)
(4,147)
(827,285)
(19,026)
(2,341,091)
(3,254,704)
-
(3,254,704)
-
(3,254,704)
-
(3,254,704)
-
(3,254,704)
Earnings per share
Basic earnings per share (dollars)
Diluted earnings per share (dollars)
6
6
(0.0008)
(0.0008)
(0.0014)
(0.0014)
Pg. 30
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
Consolidated Group
Notes
2018
$
2017
$
Assets
Current Assets
Cash and cash equivalents
Inventories
Prepayments
Trade and other receivables
Non-current Assets
Intangible assets
Other financial assets
Property, plant and equipment
Total Assets
Liabilities
Current Liabilities
Employee benefits
Short-term provisions
Trade and other payables
Non-Current Liabilities
Provision for Long Service Leave
7
9
13
8
12
10
11
16
15
14
16
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained Earnings
Total Equity
2,841,161
138,337
62,719
19,593
3,061,810
186,891
35,520
19,168
241,579
3,303,389
185,004
60,800
174,276
420,080
1,211,983
191,316
63,787
25,196
1,492,282
145,886
2,089
24,273
172,248
1,664,530
141,083
61,100
231,485
433,668
35,031
19,592
455,111
453,260
2,848,278
1,211,270
18
17
103,011,981
1,400,031
(101,563,734)
99,254,783
1,361,130
(99,404,643)
2,848,278
1,211,270
Pg. 31
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Ordinary
Shares
$
99,254,783
Consolidated Group
Retained
Earnings
$
(99,404,643)
Option
Reserve
$
1,361,130
Total
$
1,211,270
-
(2,159,091)
-
(2,159,091)
3,939,381
(182,183)
38,901
-
-
-
38,901
3,939,381
(182,183)
-
-
-
-
17, 18
103,011,981
(101,563,734)
1,400,031
2,848,278
2018
Note
2017
Note
Ordinary
Shares
$
Consolidated Group
Retained
Earnings
$
Option
Reserve
$
Total
$
96,910,986
(96,149,939)
537,844
1,298,891
-
(3,254,704)
-
(3,254,704)
2,387,435
(43,638)
-
823,286
-
-
-
-
-
823,286
2,387,435
(43,638)
-
17, 18
99,254,783
(99,404,643)
1,361,130
1,211,270
Balance at 1 July 2017
Profit/(Loss) attributable to members of
the parent entity
Options issued/exercised during the year
Shares issued during the year
Transaction costs
Shares bought back during the year
Balance at 30 June 2018
Balance at 1 July 2016
Profit/(Loss) attributable to members of
the parent entity
Options issued/exercised during the year
Shares issued during the year
Transaction costs
Shares bought back during the year
Balance at 30 June 2017
Pg. 32
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
Cash flows from operating activities:
Receipts from customers
Receipt from grants
Receipt from royalty income
Payments to suppliers and employees
Interest received
Finance costs
Interest paid
Net cash provided by (used in) operating activities
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
Costs of fund raising
Net cash used by financing activities
Net increase (decrease) in cash and cash equivalents held
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of financial year
7
Consolidated Group
2017
2018
$
$
47,416
938,968
11,805
(3,089,838)
12,376
-
(277)
(2,079,550)
21
73,410
1,154,998
10,623
(3,517,512)
15,306
-
(231)
(2,263,406)
(44,300)
(4,170)
(48,470)
(112,304)
(8,618)
(120,922)
3,939,381
(182,183)
3,757,198
1,629,178
1,211,983
2,841,161
2,387,435
(43,638)
2,343,797
(40,531)
1,252,514
1,211,983
Pg. 33
Notes to the Financial Statements
Notes to the Financial Statements
These consolidated financial statements and notes represent those of Analytica Limited and
Controlled Entities (the “consolidated group” or “group”).
The separate financial statements of the parent entity, Analytica Limited, have not been presented
within this financial report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 29 August 2018 by the directors of the
company.
1: Summary of Significant Accounting Policies
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting
Standards Board and International Financial Reporting Standards as issued by the International
Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under
Australian Accounting Standards. Material accounting policies adopted in the preparation of these
financial statements are presented below and have been consistently applied unless stated
otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis
and are based on historical costs, modified, where applicable, by the measurement at fair value of
selected non-current assets, financial assets and financial liabilities.
a. Principles of Consolidation.
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent
(Analytica Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are
entities the parent controls. The parent controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. A list of the subsidiaries is provided in Note 23.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements
of the Group from the date on which control is obtained by the Group. The consolidation of a
subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances
and unrealised gains or losses on transactions between group entities are fully eliminated on
consolidation. Accounting policies of subsidiaries have been changed and adjustments made where
necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as
“non-controlling interests”. The Group initially recognises
Pg. 34
Notes to the Financial Statements
non-controlling interests that are present ownership interests in subsidiaries and are entitled to a
proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-
controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial
recognition, non-controlling interests are attributed their share of profit or loss and each component
of other comprehensive income. Non-controlling interests are shown separately within the equity
section of the statement of financial position and statement of comprehensive income.
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The business combination will
be accounted for from the date that control is obtained, whereby the fair value of the identifiable
assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to
certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability
resulting from a contingent consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or liability is
remeasured in each reporting period to fair value, recognising any change to fair value in profit or
loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with
the issue of a financial instrument, are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain
purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the
excess of the sum of:
i.
ii.
the consideration transferred;
any non-controlling interest (determined under either the full goodwill or proportionate
interest method); 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 acquisition date fair value of the consideration transferred for a business combination plus the
acquisition date fair value of any previously held equity interest shall form the cost of the investment
in the separate financial statements.
Pg. 35
Notes to the Financial Statements
Fair value re-measurements in any pre-existing equity holdings are recognised in profit or loss in the
period in which they arise. Where changes in the value of such equity holdings had previously been
recognised in other comprehensive income, such amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less
than 100% interest will depend on the method adopted in measuring the non-controlling interest.
The Group can elect in most circumstances to measure the non-controlling interest in the acquired
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). In such circumstances, the
Group determines which method to adopt for each acquisition and this is stated in the respective
notes to these financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest is determined using
valuation techniques which make the maximum use of market information where available. Under
this method, goodwill attributable to the non-controlling interest is recognised in the consolidated
financial statements.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of
associates is included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or
groups of cash-generating units, representing the lowest level at which goodwill is monitored and 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 disposed of.
Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted
for as equity transactions and do not affect the carrying amounts of goodwill.
b. Income Tax.
The income tax expense (income) for the year comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when
the tax relates to items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of
Pg. 36
Notes to the Financial Statements
an asset or liability, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled and their measurement also reflects the
manner in which management expects to recover or settle the carrying amount of the related asset
or liability. With respect to non-depreciable items of property, plant and equipment measured at fair
value and items of investment property measured at fair value, the related deferred tax liability or
deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered
entirely through sale.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where: (i) a legally enforceable right of
set-off exists; and (ii) the deferred tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
c. Fair Value of Assets and Liabilities.
The Group measures some of its assets and liabilities at fair value on either a recurring or non-
recurring basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a
liability in an orderly (ie unforced) transaction between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing
information is used to determine fair value. Adjustments to market values may be made having
regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities
that are not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market data.
Pg. 37
Notes to the Financial Statements
To the extent possible, market information is extracted from either the principal market for the asset
or liability (ie the market with the greatest volume and level of activity for the asset or liability) or, in
the absence of such a market, the most advantageous market available to the entity at the end of the
reporting period (ie the market that maximises the receipts from the sale of the asset or minimises
the payments made to transfer the liability, after taking into account transaction costs and transport
costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s
ability to use the asset in its highest and best use or to sell it to another market participant that
would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-
based payment arrangements) may be valued, where there is no observable market price in relation
to the transfer of such financial instruments, by reference to observable market information where
such instruments are held as assets. Where this information is not available, other valuation
techniques are adopted and, where significant, are detailed in the respective note to the financial
statements.
d. Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured
products includes direct materials, direct labour and an appropriate proportion of variable and fixed
overheads. Cost of inventory is determined using the fist-in-first-out basis and are net of any rebates
and discounts received.
e. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Property
Freehold land and buildings are carried at their fair value (being the amount for which an asset could
be exchanged between knowledgeable, willing parties in an arm’s length transaction), based on
periodic, but at least triennial, valuations by external independent valuers, less accumulated
depreciation for buildings.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a
revaluation surplus in equity. Decreases that offset previous increases of the same asset are
recognised against revaluation surplus directly in equity; all other decreases are recognised in profit
or loss.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying
Pg. 38
Notes to the Financial Statements
amount of the asset and the net amount is restated to the revalued amount of the asset.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated
depreciation and any accumulated impairment. In the event the carrying amount of plant and
equipment is greater than the estimated recoverable amount, the carrying amount is written down
immediately to the estimated recoverable amount and impairment losses are recognised either in
profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal
assessment of recoverable amount is made when impairment indicators are present.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis
of the expected net cash flows that will be received from the asset’s employment and subsequent
disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed within the consolidated group includes the cost of materials,
direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance
are recognised as expenses in profit or loss during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but
excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life to the
consolidated group commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Depreciation Rate
13.33% – 20%
Plant and equipment leased to external parties
33% – 66.67%
Leased plant and equipment
33% - 100%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
Pg. 39
Notes to the Financial Statements
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains and losses are recognised in profit or loss in the period in which they arise. When
revalued assets are sold, amounts included in the revaluation surplus relating to that asset are
transferred to retained earnings.
f. Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the
asset – but not the legal ownership – are transferred to entities in the consolidated group, are
classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal
to the fair value of the leased property or the present value of the minimum lease payments,
including any guaranteed residual values. Lease payments are allocated between the reduction of the
lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives
or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the
lessor, are recognised as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line
basis over the lease term.
g. Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that the
entity commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are
expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective
interest method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is
measured at initial recognition less principal repayments and any reduction for impairment, and
adjusted for any cumulative amortisation of the difference
Pg. 40
Notes to the Financial Statements
between that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that discounts estimated future cash payments or
receipts (including fees, transaction costs and other premiums or discounts) over the expected life (or
when this cannot be reliably predicted, the contractual term) of the financial instrument to the net
carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows
will necessitate an adjustment to the carrying amount with a consequential recognition of an income
or expense item in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint ventures as being
subject to the requirements of Accounting Standards specifically applicable to financial instruments.
(i) Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for
the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are
designated as such to avoid an accounting mismatch or to enable performance evaluation where a
group of financial assets is managed by key management personnel on a fair value basis in
accordance with a documented risk management or
investment strategy. Such assets are
subsequently measured at fair value with changes in carrying amount being included in profit or loss.
(ii) Loans and receivables.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses
are recognised in profit or loss through the amortisation process and when the financial asset is
derecognised.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed
or determinable payments, and it is the Group’s intention to hold these investments to maturity.
They are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss
through the amortisation process and when the financial asset is derecognised.
(iv) Available-for-sale investments.
Available-for-sale investments are non-derivative financial assets that are either not capable of being
classified into other categories of financial assets due to their nature or they are designated as such
by management. They comprise investments in the equity of other entities where there is neither a
fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with any re-measurements other than impairment
losses and foreign exchange gains and losses recognised in other comprehensive income. When the
financial asset is derecognised, the cumulative gain or loss
Pg. 41
Notes to the Financial Statements
pertaining to that asset previously recognised in other comprehensive income is reclassified into
profit or loss.
Available-for-sale financial assets are classified as non-current assets when they are not expected to
be sold within 12 months after the end of the reporting period. All other available-for-sale financial
assets are classified as current assets.
(v) Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at
amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and
when the financial liability is derecognised.
Impairment
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is
objective evidence of impairment as a result of one or more events (a “loss event”) having occurred,
which has an impact on the estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value
of the instrument is considered to constitute a loss event. Impairment losses are recognised in profit
or loss immediately. Also, any cumulative decline in fair value previously recognised in other
comprehensive income is reclassified into profit or loss at this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the
debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency
in interest or principal payments; indications that they will enter bankruptcy or other financial
reorganisation; and changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance
account is used to reduce the carrying amount of financial assets impaired by credit losses. After
having taken all possible measures of recovery, if management establishes that the carrying amount
cannot be recovered by any means, at that point the written-off amounts are charged to the
allowance account or the carrying amount of impaired financial assets is reduced directly if no
impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been
renegotiated, the Group recognises the impairment for such financial assets by taking into account
the original terms as if the terms have not been renegotiated so that the loss events that have
occurred are duly considered.
Financial guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
Pg. 42
Notes to the Financial Statements
are recognised as a financial liability at fair value on initial recognition.
The fair value of financial guarantee contracts has been assessed using a probability-weighted
discounted cash flow approach. The probability has been based on:
– the likelihood of the guaranteed party defaulting during the next reporting period;
– the proportion of the exposure that is not expected to be recovered due to the guaranteed party
defaulting; and
– the maximum loss exposure if the guaranteed party were to default.
Financial guarantees are subsequently measured at the higher of the best estimate of the obligation
in accordance with AASB 137: Provisions, Contingent Liabilities and Contingent Assets and the
amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB
118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised in
accordance with AASB 118.
Derecognition
Financial assets are derecognised when the contractual rights to receipt of cash flows expire 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
when the related obligations are discharged, cancelled or have expired. The difference between the
carrying amount 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.
h. Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal sources of
information including dividends received from subsidiaries, associates or joint ventures deemed to be
out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the
asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less
costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying
amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is
carried at a revalued amount in accordance with another Standard (eg in accordance with the
revaluation model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued
asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Pg. 43
Notes to the Financial Statements
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and
intangible assets not yet available for use.
i. Intangibles Other than Goodwill
Patents and trademarks
Patents and trademarks are recognised at cost of acquisition. They 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 lives ranging from 0 to 20 years.
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 is expected to deliver future economic benefits and these benefits can be
measured reliably.
Capitalised development costs have a finite useful life and are amortised on a systematic basis based
on the future economic benefits over the useful life of the project.
j. 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 currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-
end exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss,
except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
other comprehensive income to the extent that the underlying gain or loss is recognised in other
comprehensive income; otherwise the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from
the Group’s presentation currency, are translated as follows:
Pg. 44
Notes to the Financial Statements
– assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
–income and expenses are translated at average exchange rates for the period; and
–retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other
than Australian dollars are recognised in other comprehensive income and included in the foreign
currency translation reserve in the statement of financial position. The cumulative amount of these
differences is reclassified into profit or loss in the period in which the operation is disposed of.
k. Employee Benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee
benefits are benefits (other than termination benefits) that are expected to be settled wholly before
12 months after the end of the annual reporting period in which the employees render the related
service, including wages, salaries and sick leave. Short-term employee benefits are measured at the
(undiscounted) amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are
recognised as part of current trade and other payables in the statement of financial position. The
Group’s obligations for employees’ annual leave and long service leave entitlements are recognised
as provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be
settled wholly within 12 months after the end of the annual reporting period in which the employees
render the related service. Other long-term employee benefits are measured at the present value of
the expected future payments to be made to employees. Expected future payments incorporate
anticipated future wage and salary levels, durations of service and employee departures and are
discounted at rates determined by reference to market yields at the end of the reporting period on
corporate bonds that have maturity dates that approximate the terms of the obligations. Any re
measurements for changes in assumptions of obligations for other long-term employee benefits are
recognised in profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in
its statement of financial position, except where the Group does not have an unconditional right to
defer settlement for at least 12 months after the end of the reporting period, in which case the
obligations are presented as current provisions.
Pg. 45
Notes to the Financial Statements
Termination benefits
When applicable, the Group recognises a liability and expense for termination benefits at the earlier
of: (i) the date when the Group can no longer withdraw the offer for termination benefits; and (ii)
when the Group recognises costs for restructuring pursuant to AASB 137: Provisions, Contingent
Liabilities and Contingent Assets and the costs include termination benefits. In either case, unless the
number of employees affected is known, the obligation for termination benefits is measured on the
basis of the number of employees expected to be affected. Termination benefits that are expected to
be settled wholly before 12 months after the annual reporting period in which the benefits are
recognised are measured at the (undiscounted) amounts expected to be paid. All other termination
benefits are accounted for on the same basis as other long-term employee benefits.
Equity-settled compensation
The Group operates an employee share and option plan. Share-based payments to employees are
measured at the fair value of the instruments issued and amortised over the vesting periods. Share-
based payments to non-employees are measured at the fair value of goods or services received or
the fair value of the equity instruments issued, if it is determined the fair value of the goods or
services cannot be reliably measured, and are recorded at the date the goods or services are
received. The corresponding amount is recorded to the option reserve. The fair value of options is
determined using the Black-Scholes pricing model. The number of shares and options expected to
vest is reviewed and adjusted at the end of each reporting period such that the amount recognised
for services received as consideration for the equity instruments granted is based on the number of
equity instruments that eventually vest.
l. 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 using the best estimate of the amounts required to settle the obligation at
the end of the reporting period.
m. Provision for Warranties
Provision is made in respect of the Group’s best estimate of the liability on all products and services
under warranty at the end of the reporting period. The provision is measured as the present value of
future cash flows estimated to be required to settle the warranty obligation. The future cash flows
have been estimated by reference to the consolidated group’s history of warranty claims.
Pg. 46
Notes to the Financial Statements
n. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other
short-term highly liquid investments with original maturities of 12 months or less, and bank
overdrafts. Bank overdrafts are reported within borrowings in current liabilities on the statement of
financial position.
o. Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into
account any trade discounts and volume rebates allowed. When the inflow of consideration is
deferred, it is treated as the provision of financing and is discounted at a rate of interest that is
generally accepted in the market for similar arrangements. The difference between the amount
initially recognised and the amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the
transfer of significant risks and rewards of ownership of the goods and the cessation of all
involvement in those goods.
Interest revenue is recognised using the effective interest method.
Dividend revenue is recognised when the right to receive a dividend has been established.
Dividends received from associates and joint ventures are accounted for in accordance with the
equity method of accounting.
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.
The Group 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 Group will
comply with the conditions attaching to the grant and the grant will be received.
All revenue is stated net of the amount of goods and services tax.
p. Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services
performed in the ordinary course of business. Receivables expected to be collected within 12 months
of the end of the reporting period are classified as current assets. All other receivables are classified
as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at
Pg. 47
Notes to the Financial Statements
amortised cost using the effective interest method, less any provision for impairment.
q. Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that
remain unpaid at the end of the reporting period. The balance is recognised as a current liability with
the amounts normally paid within 30 days of recognition of the liability.
r. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
s. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount
of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the ATO is included with other receivables or
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to, the ATO are presented as operating
cash flows included in receipts from customers or payments to suppliers.
t. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or
reclassifies items in its financial statements, an additional (third) statement of financial position as at
the beginning of the preceding period in addition to the minimum comparative financial statements
is presented.
u. Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Corporations (Rounding in financial
statements (Directors’ Report
Instrument) 2016/191. Accordingly, amounts
in the financial
statements have been rounded off to the nearest $1.
Pg. 48
Notes to the Financial Statements
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 2018 to conduct its affairs.
The company has a guarantee of continuing financial support from Dr Monsour to allow the company
to meet 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 sales income during the 2019 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. 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/loss 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.
x. 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 effect.
y. Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial statements based
on historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the Group.
Pg. 49
Notes to the Financial Statements
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.
z. New Accounting Standards for Application in Future Periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, but
may have an impact on the Group when adopted in future periods, are discussed below:
– AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting
periods beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting
outlined below) and includes revised requirements for the classification and measurement of
financial instruments, revised recognition and derecognition requirements for financial instruments
and simplified requirements for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront
accounting for expected credit loss, and the irrevocable election to recognise gains and losses on
investments in equity instruments that are not held for trading in other comprehensive income.
AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the
ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity
elect to change its hedge policies in line with the new hedge accounting requirements of the
Standard, the application of such accounting would be largely prospective.
The directors do not expect a material impact from the adoption of this standard.
– AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods
beginning on or after 1 January 2018, as deferred by AASB 2015-8: Amendments to Australian
Accounting Standards – Effective Date of AASB 15).
When effective, this Standard will replace the current accounting requirements applicable to revenue
with a single, principles-based model. Except for a limited number of exceptions, including leases, the
new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary
exchanges between entities in the same line of business to facilitate sales to customers and potential
customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15
provides the following five-step process:
Pg. 50
Notes to the Financial Statements
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts that
existed in each prior period presented per AASB 108: Accounting Policies, Changes in Accounting
Estimates and Errors (subject to certain practical expedients in AASB 15); or recognise the cumulative
effect of retrospective application to incomplete contracts on the date of initial application. There are
also enhanced disclosure requirements regarding revenue.
The directors do not expect a material impact from the adoption of this standard.
– AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in
AASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting model
that eliminates the requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard include:
- recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less
than 12 months of tenure and leases relating to low-value assets);
-depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or
loss and unwinding of the liability in principal and interest components;
- Inclusion of variable lease payments that depend on an index or a rate are included in the initial
measurement of the lease liability using the index or rate at the commencement date;
- by application of a practical expedient, to permit a leasee to elect not to separate non-lease
components and instead account for all components as a lease; and
- additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to
comparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as
an adjustment to opening equity on the date of initial application.
Although the directors anticipate that the adoption of AASB 16 will impact the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
Pg. 51
Notes to the Financial Statements
2. Result for the year
Revenue from continuing operations
Sale of goods revenue
Other Revenue
R & D tax incentive revenue
Investment revenue
Royalty Income
Total Revenue
Expenditure
Consolidated Group
2018
$
2017
$
47,416
73,410
938,968
12,376
11,805
963,149
1,010,565
1,154,998
15,306
10,623
1,180,927
1,254,337
Profit before income tax from continuing operations includes the following specific expenses
Consolidated Group
Finance expenses
External
Administration expense
Administration - compliance
Administration - employment
Administration - general
Depreciation, amortisation and impairments
Intangible assets
Property, plant and equipment
Marketing expenses
Marketing - employment
Marketing - Pericoach
2018
$
277
277
457,363
383,202
30,735
871,300
3,295
9,275
12,570
33,727
374,277
408,004
2017
$
231
231
480,261
369,088
27,931
877,280
3,241
14,423
17,664
40,991
315,046
356,037
Pg. 52
Notes to the Financial Statements
Patent maintenance expenses
Patent Maintenance - AutoStart Burette
Patent Maintenance - ELF
Patent Maintenance - PeriCoach
Research and development expense
R & D - Employment
R & D - Other
R & D - Pericoach
3. Income Tax
Profit/(Loss) for the year
Tax
Add:
Tax effect of:
- non-deductible expenses
Less:
Tax effect of:
- non assessable income
Temporary differences and tax losses
not brought to account
-
(1,025)
2,467
1,442
677,922
-
1,144,391
1,822,313
6,587
8,741
3,698
19,026
752,340
9,430
1,579,321
2,341,091
Consolidated Group
2018
$
(2,159,091)
27.5%
(593,750)
2017
$
(3,254,704)
27.5%
(895,044)
374,757
(218,993)
847,424
(47,620)
(269,086)
(317,624)
488,079
365,244
Income tax attributable to parent entity
-
-
Carried forward tax losses of $19,366,237 (2017:$ 17,456,030) 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.
Pg. 53
Notes to the Financial Statements
4. Key management personnel options and rights holdings
Balance
beginning
of year
2018
Granted as
remuneration
d
e
s
i
c
r
e
x
E
r
e
h
t
O
g
n
a
h
c
e Balance at
the end of
year
Vested
during the
year
Vested and
exercisable
Directors
Unlisted Options @ 3.24 cents, Expire 29/10/18
13,000,000
Dr M Monsour
Mr R
Mangelsdorf
Unlisted Options @ 1.62 cents, Expire 10/12/20
Dr T Lonngren
Unlisted Options @ 1.3 cents, Expire 21/12/21
10,000,000
10,000,000
20,000,000
Dr M Monsour
Mr R
Mangelsdorf
Dr T Lonngren
Unlisted Options @ 1.3 cents, Expire 20/11/22
10,000,000
10,000,000
-
-
-
-
-
-
Dr P Corr
Mr R
Mangelsdorf
-
-
10,000,000
10,000,000
Other KMP
Unlisted Options @ 3.24 cents, Expire 29/10/18
G Daly
Unlisted Options @ 4.50 cent, Expire 12/02/19
6,000,000
G Daly
Unlisted Options @ 1.30 cent, Expire 8/06/22
5,000,000
G Daly
Unlisted Options @ 1.30 cent, Expire 8/06/22
10,000,000
G Daly
Unlisted Options @ 1.036 cent, Expire 8/06/22
10,000,000
G Daly
Unlisted Options @ 1.036 cent, Expire 8/06/22
14,000,000
G Daly
4,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,000,000
10,000,000
-
-
13,000,000
10,000,000
10,000,000
3,333,334
10,000,000
20,000,000
10,000,000
10,000,000
10,000,000
10,000,000
6,000,000
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
-
10,000,000 10,000,000
10,000,000
10,000,000 10,000,000
10,000,000
14,000,000
-
14,000,000
4,250,000
4,250,000
4,250,000
122,250,000
20,000,000
-
-
142,250,000
27,583,334
77,250,000
Pg. 54
Notes to the Financial Statements
Balance
beginning
of year
2017
Granted as
remuneration
d
e
s
i
c
r
e
x
E
r
e
h
t
O
e
g
n
a
h
c
Balance at
the end of
year
Vested
during the
year
Vested and
exercisable
Directors
Unlisted Options @ 3.24 cents, Expire 29/10/18
Dr M Monsour
Mr R Mangelsdorf
Mr W Brooks
Unlisted Options @ 1.62 cents, Expire 10/12/20
13,000,000
10,000,000
8,000,000
Mr C Stubbings
Dr T Lonngren
Unlisted Options @ 1.3 cents, Expire 21/12/21
4,000,000
10,000,000
-
-
-
-
-
Dr M Monsour
Mr R Mangelsdorf
Mr W Brooks
Mr C Stubbings
Dr T Lonngren
Other KMP
Unlisted Options @ 3.24 cents, Expire 29/10/18
20,000,000
10,000,000
10,000,000
10,000,000
10,000,000
-
-
-
-
-
G Daly
Unlisted Options @ 4.50 cent, Expire 12/02/19
6,000,000
-
G Daly
Unlisted Options @ 1.30 cent, Expire 8/06/22
5,000,000
-
G Daly
Unlisted Options @ 1.30 cent, Expire 8/06/22
-
10,000,000
G Daly
Unlisted Options @ 1.036 cent, Expire 8/06/22
-
10,000,000
G Daly
Unlisted Options @ 1.036 cent, Expire 8/06/22
-
14,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,000,000
10,000,000
8,000,000
-
-
-
13,000,000
10,000,000
8,000,000
4,000,000
10,000,000
1,333,333
3,333,333
2,666,666
6,666,666
20,000,000
10,000,000
10,000,000
10,000,000
10,000,000
6,000,000
5,000,000
10,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
-
-
-
14,000,000 14,000,000
14,000,000
G Daly
-
4,250,000
56,000,000
98,250,000
-
-
-
-
4,250,000
-
-
154,250,000 18,666,666 60,333,332
Pg. 55
Notes to the Financial Statements
4. Key management personnel shareholdings
Balance at
beginning of
year
On exercise
of options
Other changes
during the
year
Balance at end of
year
2018
Directors
Dr M Monsour
562,454,437
Mr R Mangelsdorf
Dr P Corr
KMP
Mr G Daly
58,583,055
320,702,362
941,739,854
881,658
942,621,512
-
-
-
-
-
-
210,920,408
773,374,845
33,901,144
40,087,795
284,909,347
92,484,199
360,790,157
1,226,649,201
1,200,000
286,109,347
2,081,658
1,228,730,859
2017
Balance at
beginning of
year
On exercise
of options
Other changes
during the year
Balance at end of
year
Directors
Dr M Monsour
Mr R Mangelsdorf
Mr W Brooks
Mr C Stubbings
Dr P Corr
KMP
Mr G Daly
500,266,164
50,571,377
48,645,000
2,746,322
202,324,638
804,553,501
881,658
805,435,159
5 Remuneration of Auditors
-
-
-
-
-
-
-
-
62,188,273
8,011,678
-
-
118,377,724
188,577,675
-
188,577,675
562,454,437
58,583,055
48,645,000
2,746,322
320,702,362
993,131,176
881,658
994,012,834
Remuneration of the auditor of the company, Bentleys,
for auditing or reviewing the financial report
Other services
Consolidated Group
2018
$
2017
$
67,400
3,000
68,639
3,000
Pg. 56
Notes to the Financial Statements
6 Earnings per Share
(a) Reconciliation of earnings to profit or loss from continuing operations
Loss from continuing operations
Earnings used to calculate basic EPS from
operations
(b) Earnings used to calculate overall earnings per
share
Earnings used to calculate overall earnings per share
(c) Weighted average number of ordinary shares
outstanding during the year used in calculating
basic EPS
Weighted average number of ordinary shares
outstanding during the year used in calculating basic
EPS
Weighted average number of dilutive options
outstanding
Weighted average number of ordinary shares
outstanding during the year used in calculating
dilutive EPS
Earnings per
share
Basic earnings per share (dollars)
Diluted earnings per share (dollars)
7 Cash and cash equivalents
Cash at bank and in hand
Short term bank deposits
Consolidated Group
2018
$
(2,159,091)
(2,159,091)
2017
$
(3,254,704)
(3,254,704)
(2,159,091)
(3,254,704)
Consolidated Group
2018
No.
2017
No.
2,835,351,750
2,310,242,589
-
-
2,835,351,750
2,310,242,589
(0.0008)
(0.0008)
(0.0014)
(0.0014)
Consolidated Group
2018
$
105,778
2,735,383
2,841,161
2017
$
86,473
1,125,510
1,211,983
Pg. 57
Notes to the Financial Statements
8 Trade and other receivables
Accrued Revenue
GST Refundable
Sundry Debtors
Consolidated Group
2018
$
5,428
12,789
1,376
19,593
2017
$
7,118
18,078
-
25,196
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.
9 Inventories
PC Stock - Finished Goods
PC Stock - Materials
PC Stock - WIP
10 Other financial assets
Consolidated Group
2018
$
20,801
115,209
2,327
138,337
2017
$
12,990
160,875
17,451
191,316
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
Financial assets at fair value through profit and loss
Listed shares at cost
less fair value adjustment
Consolidated Group
2018
$
2017
$
35,520
2,089
522,356
(486,836)
35,520
522,356
(520,267)
2,089
Pg. 58
Notes to the Financial Statements
11 Property, plant and equipment
Computer Equipment
Computer Equipment Dep'n Accum
Office Equipment
Office Equipment Dep'n Accum
Plant & Machinery
Plant & Machinery Dep'n Accum.
Consolidated Group
2018
$
115,114
(108,753)
6,361
17,988
(12,219)
5,769
28,253
(21,215)
7,038
19,168
2017
$
114,144
(101,822)
12,322
14,787
(10,992)
3,795
28,253
(20,097)
8,156
24,273
(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, 2018
Balance at the beginning of year
Additions
Disposals - written down value
Depreciation expense
Balance at the end of the year
Year ended 30 June, 2017
Balance at the beginning of year
Additions
Disposals - written down value
Depreciation expense
Balance at the end of the year
Plant &
Machinery
$
Office
Equipment
$
Computer
Equipment
$
Total
$
8,156
-
-
(1,118)
7,038
8,236
1,027
-
(1,107)
8,156
3,795
3,201
-
(1,227)
5,769
2,818
2,337
-
(1,360)
3,795
12,322
969
-
(6,930)
6,361
24,273
4,170
-
(9,275)
19,168
19,024
5,254
-
(11,956)
12,322
30,078
8,618
-
(14,423)
24,273
Pg. 59
Notes to the Financial Statements
12 Intangible Assets
Patents, trademarks and other rights
Cost
Accumulated amortisation/impairment
Net carrying value
Licences and franchises
Accumulated amortisation/impairment
Consolidated
Year ended 30 June, 2018
Balance at the beginning of the year
Additions
Amortisation
Closing value at 30 June, 2018
Year ended 30 June, 2017
Balance at the beginning of the year
Additions
Amortisation
Closing value at 30 June, 2017
13 Other assets
Prepayments
Prepayments - Suppliers
Consolidated Group
2018
$
430,054
(243,163)
186,891
20,000
(20,000)
-
186,891
2017
$
385,754
(239,868)
145,886
20,000
(20,000)
-
145,886
Patents,
trademarks
Software
Total
$
$
$
145,886
44,300
(3,295)
186,891
36,822
112,305
(3,241)
145,886
-
-
-
-
-
-
-
-
145,886
44,300
(3,295)
186,891
36,822
112,305
(3,241)
145,886
Consolidated Group
2018
$
57,947
4,772
62,719
2017
$
51,137
12,650
63,787
Pg. 60
Notes to the Financial Statements
14 Trade and other payables
Trade payables
Other payables
15 Provisions
Provn for Audit Fees
Provn for Tax Return Costs
16 Employee Benefits
Current liabilities
Provision for Holiday Pay
Provision for Holiday Pay Super
Provision for Long Service Leave
Provision for long-term employee benefits
Provision for Long Service Leave
Consolidated Group
2018
$
142,428
31,848
174,276
2017
$
212,183
19,302
231,485
Consolidated Group
2018
$
41,000
19,800
60,800
2017
$
39,600
21,500
61,100
Consolidated Group
2018
$
2017
$
115,288
10,952
58,764
185,004
94,973
9,022
37,088
141,083
35,031
19,592
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for 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 Group
does not expect the full amount of annual leave or long service leave balances classified as current
liabilities to be settled in the next 12 months. However, these amounts must be classified as current
liabilities since the group does not have an unconditional right to defer the settlement of these
Pg. 61
Notes to the Financial Statements
amounts in the event the employees wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued to 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 historic data.
17 Reserves
Opening balance
Options issued
Share option reserve
Consolidated Group
2018
$
1,361,130
38,901
1,400,031
2017
$
537,845
823,285
1,361,130
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
18 Issued Capital
Fully paid 3,337,012,350 (2017: 2,549,136,332)
Ordinary shares
Total
Consolidated Group
2018
$
103,011,981
2017
$
99,254,783
103,011,981
99,254,783
Pg. 62
Notes to the Financial Statements
(a) Ordinary shares
At the beginning of the reporting period
Shares issued during the year
1 September 2016
Placement
4 October 2016
Placement
16 February 2017
Placement
9 March 2017
Placement
17 March 2017
Placement
24 April 2017
Placement
18 October 2017
31 October 2017
21 December 2017
6 February 2018
7 February 2018
13 June 2018
13 June 2018
Rights issue
Shortfall
allotment
Options
exercised
Placeement
Options
exercised
Placement
Options
exercised
Consolidated Group
2018
No.
2017
No.
2,549,136,332
2,165,855,366
35,714,285
35,714,286
132,700,849
44,117,647
13,000,000
122,033,899
@ 0.070 cents per
share
@ 0.070 cents per
share
@ 0.059 cents per
share
@ 0.068 cents per
share
@ 0.065 cents per
share
@ 0.059 cents per
share
@ 0.05 cents per share
@ 0.05 cents per share
266,839,671
3,000,000
@ 0.05 cents per share
4,000,000
@ 0.05 cents per share
@ 0.05 cents per share
24,000,000
183,713,441
@ 0.05 cents per share
@ 0.05 cents per share
97,400,000
208,922,906
At the end of the reporting period
3,337,012,350
2,549,136,332
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.
(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 22 Share-based payments.
(ii)
For information relating to share options issued to key management personnel during the
year, refer to Note 23
Pg. 63
Notes to the Financial Statements
(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 2018 is 0% (2017: 0%).
There have been no changes in the strategy adopted by management during the year.
19 Contingencies
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2018 (30 June
2017: None).
20 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;
Pg. 64
Notes to the Financial Statements
•
•
•
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.
Types of products and services by reportable segment
(i) Medical Devices
• AutoStart Burette
•
PeriCoach (Perineometer)
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
Australia and United Kingdom January 2015 and release in the United States in June 2015. The
PeriCoach V3 was released in May 2017. The PeriCoach has a TGA ARTG entry, CE-marking, and
USFDA 510(k) 'approval'.
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 cannula.
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 and USFDA 510(k) clearance.
(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
Pg. 65
Notes to the Financial Statements
of 27.5%. 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.
Medical Devices
2018
$
2017
$
Corporate
2018
$
2017
$
Total
2018
$
Total
2017
$
REVENUE
Grant revenue
Sales revenue
Royalty revenue
Interest revenue
Loss sale of equipment
Total segment revenue
Depreciation/amortisation
Cost of sales
Interest expense
Marketing
Patent Maintenance
Other expense
Research & development
Total segment expense
Segment profit (loss)
(e) Segment assets
Segment assets
-
47,416
11,805
-
-
59,221
(3,295)
(21,991)
-
(408,004)
(1,442)
-
(1,822,313)
(2,257,045)
(2,197,824)
-
73,410
10,623
-
-
84,033
(3,241)
(37,656)
-
(356,037)
(19,026)
-
(2,341,091)
(2,757,051)
(2,673,018)
938,968
-
-
12,376
-
951,344
(9,275)
-
(277)
-
-
(903,059)
-
(912,611)
38,733
1,154,998
-
-
15,306
-
1,170,304
(14,423)
-
(231)
-
-
(1,737,336)
-
(1,751,990)
(581,686)
938,968
47,416
11,805
12,376
-
1,010,565
(12,570)
(21,991)
(277)
(408,004)
(1,442)
(903,059)
(1,822,313)
(3,169,656)
(2,159,091)
1,154,998
73,410
10,623
15,306
-
1,254,337
(17,664)
(37,656)
(231)
(356,037)
(19,026)
(1,737,336)
(2,341,091)
(4,509,041)
(3,254,704)
344,821
362,398
2,923,048
1,300,043
3,267,869
1,662,441
Financial assets at fair value through profit and loss
-
(f) Segment liabilities
Segment liabilities
-
-
-
35,520
2,089
35,520
2,089
455,111
453,260
455,111
453,260
Pg. 66
Notes to the Financial Statements
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.
Australia
United Kingdom
United States
21 Cash Flow Information
2018
Revenue
979,582
7,081
23,902
2017
Revenue
1,205,294
10,492
38,551
Consolidated Group
2018
$
2017
$
(3,254,704)
(2,159,091)
Profit for the year
Cash flows excluded from profit attributable to operating activities
Non-cash flows in profit:
- amortisation
- depreciation
- fair value adjustment Invion Limited
- net (gain)/loss on disposal of plant and equipment
- share options expensed
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
- (increase)/decrease in trade and other receivables
- (increase)/decrease in prepayments
- (increase)/decrease in inventories
- increase/(decrease) in trade and other payables
- increase/(decrease) in provisions
- increase/(decrease) in employee benefits
Cashflow from operations
5,603
1,068
52,979
(57,209)
(300)
59,360
(2,079,550)
3,295
9,275
(33,431)
-
38,901
3,241
14,423
2,089
-
823,285
(6,060)
162,065
33,009
(36,359)
8,050
(12,446)
(2,263,406)
Pg. 67
Notes to the Financial Statements
22 Share-based Payments
Grant
Date
Unlisted
Options
Date
of
Expiry
Exercise
Price
Start of
Year
Granted
during the
year
g
n
i
r
u
d
d
e
s
i
c
r
e
x
E
r
a
e
y
e
h
t
e
h
t
g
n
i
r
u
d
d
e
t
i
e
f
r
o
F
r
a
e
y
30-06-
2013
12-02-
2014
22-05-
2014
28-09-
2015
26-11-
2015
24-11-
2016
9-06-
2017
9-06-
2017
28-06-
2017
30-11-
2017
29-10-
2018
12-02-
2019
22-05-
2019
28-02-
2020
10-12-
2020
22-12-
2021
8-06-
2022
8-06-
2022
22-12-
2021
30-11-
2022
0.0322
44,500,000
0.0439
5,000,000
0.0733
4,375,000
0.0190
10,416,667
0.0162
14,000,000
0.0130
70,000,000
0.0130
41,000,000
0.0104
33,350,000
0.0130
2,500,000
-
-
-
-
-
-
-
-
-
0.0130
- 20,000,000
225,141,667 20,000,000
-
-
-
-
-
-
-
-
-
-
-
23 Related Parties
The Group's main related parties are as follows:
(i) Key management personnel:
Balance at
the end of
the year
Vested &
exercisable end
of year
-
-
-
-
-
-
-
-
-
-
-
44,500,000
44,500,000
5,000,000
-
4,375,000
4,375,000
10,416,667
10,416,667
14,000,000
14,000,000
70,000,000
-
41,000,000
41,000,000
33,350,000
33,350,000
2,500,000
2,500,000
20,000,000
-
245,141,667
150,141,667
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. (2017: nil).
Pg. 68
Notes to the Financial Statements
(ii) Subsidiaries:
The consolidated financial statements include the financial statements of Analytica Limited and the
following subsidiaries:
Name of subsidiary
% ownership interest
% ownership interest
PeriCoach Pty Ltd
Transactions with related parties
2018
100
2017
100
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
24 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
Pg. 69
Notes to the Financial Statements
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 CEO or CFO 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
Trade payables
Other payables
Consolidated Group
2018
$
142,428
31,848
174,276
2017
$
212,183
19,302
231,485
Pg. 70
Notes to the Financial Statements
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 2018 or 2017 year.
Foreign currency denominated assets translated into Australian Dollars at the closing rate are
included in the inventory balance of $138,337 (2017: $191,316). Net currency losses of $20,741
(2017: $26,535) are disclosed in the statement of profit or loss and other comprehensive income.
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.
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% (2017: +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.
Cash and cash equivalents
Net results
Equity
Borrowings
Net results
Equity
2018
2017
2.00%
$
-2.00%
$
2.00%
$
-2.00%
$
56,823
56,823
(56,823)
(56,823)
24,240
24,240
(24,240)
(24,240)
-
-
-
-
-
-
-
-
Pg. 71
Notes to the Financial Statements
(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.
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 number of customers, spread across diverse industries and
geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts
receivable.
Pg. 72
Notes to the Financial Statements
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.
25 Fair Value Measurement
The Group measures the following assets and liabilities at fair value on a recurring basis
Financial assets
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
Unadjusted quoted prices in active markets for identical assets or liabilities
that the entity can access at the measurement date.
Level 2
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.
The table below shows the assigned level for each asset and liability held at fair value by the Group:
Fair value hierarchy
2018
Recurring fair value measurements
Listed shares
Level 1
$
Level 2
$
Level 3
$
Total
$
35,520
-
-
35,520
2017
Recurring fair value measurements
Listed shares
Level 1
$
Level 2
$
Level 3
$
2,089
-
-
Total
$
2,089
Pg. 73
Notes to the Financial Statements
26 Events Occurring After the Reporting Date
No 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.
27 Company Details
The registered office of the company is:
Share Registry:
Analytica Limited
Link Market Services
c/o Avance Chartered Accountants
Level 15, 324 Queen Street
222 Bazaar Street,
Brisbane, Queensland 4000
Maryborough Qld 4655
Telephone: +61 1300 554 474
Telephone: (07) 3278 1950
Email: registrars@linkmarketservices.com.au
The postal address for the registered
office of the company is:
The principal place of business is:
Analytica Limited
PO Box 438
320 Adelaide Street
Brisbane Qld 4000
Maryborough Qld 4650
Telephone: (07) 3278 1950
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ANALYTICA LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Analytica Limited (The Company and its subsidiary,
together, the “Group”), which comprises the consolidated statement of financial position as at 30
June 2018 and the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the director’s declaration.
In our opinion:
a.
the consolidated financial report of the Group is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2018
and of its performance for the year then ended; and
(ii) complying with Australian Accounting Standards and
the Corporations
Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Australian Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Material Uncertainty Related to Going Concern
Without modifying our opinion, we draw attention to Note 1v in the financial report, which
indicates that Analytica Limited will be required to raise additional funds to meet forecast cash
needs. These conditions, along with others matters as set forth in Note 1v, indicate the existence
of a material uncertainty that may cast significant doubt about the ability to continue as a going
concern and therefore, Analytica Limited may be unable to realise its assets and discharge it
liabilities in the normal course of business.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the current period. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. In addition to the matter
described in the ‘Material Uncertainty Relating to Going Concern’ section, we have determined
the matters described below to be the key audit matters to be communicated in our report.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ANALYTICA LIMITED (Continued)
Key Audit Matter
How our audit addressed the key audit matter
Accounting For and Disclosure of Options
We focused on this area as a key audit
matter due to:
Our procedures included, amongst others:
Options, including the movements in option
holdings, option expenditure and option
reserves are material in nature and have a
material dollar value impact on the financial
report.
Verifying the completeness of options on issue with
reference to ASX announcements and other third party
supporting information.
the valuation of options by agreeing
Testing
valuation reports completed by independent valuers.
to
inherent complexity and
The
level of
judgment involved in correctly valuing and
accounting for options, especially in regard
to unlisted options.
Checking vesting calculations and correct accounting
for options in accordance with AASB 2 Share-based
Payment.
importance and
The
for
adequate and appropriate disclosure of
options
the
in
remuneration report.
financial report and
requirement
the
Ensuring the disclosure of options in the financial
report was adequate and appropriate, verifying
movements
supporting
information.
in options
relevant
to
Existence and Valuation of Inventory
We focused on this area as a key audit
matter due to:
Our procedures included, amongst others:
Analytica’s inventory is a material balance
on the statement of financial position, and is
at high
to
technological obsolescence.
impairment due
risk of
In recent years Analytica has impaired the
overall
inventory balance by material
amounts as a result of impairment reviews
conducted by Analytica’s management and
Audit.
A significant amount of Analytica’s inventory
is held by third parties.
Verifying the existence of inventory by agreeing the
client’s year end balances and records to third party
confirmations from those entities that hold inventory on
Analytica’s
performed
Those
stocktakes at 30 June 2018, and Bentleys obtained
copies of these stocktake reports.
entities
behalf.
Testing to ensure that total inventory on hand as at
year end was valued at the lower of cost and net
realisable value (NRV). This was performed with
reference to recent sales data, which was used as
evidence to support realisable value.
Testing the adequacy of the provision for impairment
and write offs recorded during the year, based on our
knowledge of the client and the specific inventory
items at risk of obsolescence. Where impairment
indicators were noted, further enquiries were made
with management and
recalculation of potential
impairment was compared to the provision in the
financial report.
Ensuring the accuracy of the Analytica’s inventory
records by checking that the correct cost per unit was
applied to inventory on hand at year end. Inventory
cost per unit was tested on a substantive basis, by
comparing to supporting third party evidence including
supplier invoices.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ANALYTICA LIMITED (Continued)
Key Audit Matter
How our audit addressed the key audit matter
Existence and Valuation of Intangibles – Patents and Trademarks
We focused on this area as a key audit
matter due to:
Our procedures included, amongst others:
Intangibles being material in nature and
having a material dollar value impact on the
financial report.
Verifying on a substantive basis the existence and cost
of eligible expenditure on patents and trademarks.
inherent complexity and
The
level of
judgment involved in correctly accounting
for intangibles like patents and trademarks.
Verifying that the capitalisation of costs in relation to
patents and trademarks was completed in accordance
with
and measurement
recognition
requirements of Australian accounting standards.
relevant
The potential risk of impairment, given the
intangibles relate to hi-tech products.
Challenging management’s
impairment review and
overall assessment of the fair value of intangibles
recognised at year end.
Information Other than the Financial Report and Auditor's Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2018, but does not
include the financial report and our auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ANALYTICA LIMITED (Continued)
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole
is free from material misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor's report. However,
future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
report. We are responsible for the direction, supervision and performance of the Group
audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
Pg. 80
ASX Additional Information
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 14 August, 2018.
Substantial shareholders
The number of substantial shareholders and their associates are set out below:
HALONNA PTY LTD
INOV8 LLC
Distribution of equity security holders
1 to
1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 50,000
50,001 to 100,000
100,001 and Over
Total
781
236
112
669
352
1,171
3,321
361,982
637,831
965,998
18,620,900
27,216,464
3,289,209,175
3,337,012,350
0.01
0.02
0.03
.56
.82
98.57
100.00
There were 2,141 holders of less than a marketable parcel (83,334 securities) and
they hold 34,620,800 ordinary shares.
Twenty largest share holders
1
2
3
4
5
6
7
8
9
10
11
12
HALONNA PTY LTD
INOV8 LLC
MPAMM PTY LTD
M P MONSOUR MEDICAL PRACTICE PTY LTD
IGNATIUS LIP PTY LTD
DR T M MULLINS + DR P J MULLINS
MR M ARUNDEL + MRS S ARUNDEL
VAN AM MARKETING PTY LTD
HALONNA PTY LTD
FITZWILL SUPERANNUATION PTY LTD
CMONSUPER PTY LTD
W BROOKS INVESTMENTS PTY LTD
362,098,834
360,790,157
199,750,620
156,379,178
151,073,534
88,094,250
69,100,000
68,375,148
51,562,500
50,000,000
49,632,352
48,645,000
Pg. 81
ASX Additional Information
13
14
15
16
17
18
19
20
MR R T H DALY + MRS S K DALY
TAMBIEN PTY LTD
NEATFORD PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MRS SARINA LIP
MRS MARGE MEI YU LIP
MR GERRY VAN AMEYDEN
MR VICTOR PEREIRA
47,945,348
44,257,337
40,009,545
35,052,689
29,522,184
29,370,586
23,079,339
22,575,814
1,927,314,415
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.