Asian American Medical Group Limited Annual Report 2011

Plain-text annual report

For personal use onlyACLDT 2011 Inside Cover FA.ai 1 11/5/11 2:49 PM ACLDT 2011 Inside Cover FA.ai 1 11/5/11 2:49 PM C M Y CM MY CY CMY K For personal use onlyDedicated to Healing. Powered by Innovation. For personal use onlyAsian Centre for Liver Diseases and Transplantation Limited ABN NUMBER 42 091 559 125 Annual Report for the year ended 31 August 2011 For personal use onlyTable of Contents 04 Corporate directory 05 Chairman’s Message 07 Executive Director’s Message 10 Proﬁ le of Board of Directors 12 Proﬁ le of Doctors and Key Management 15 Financial review 17 Patient’s Testimonal - Baby Ethan’s miracle story 19 Corporate governance statement 24 Directors’ report 33 Auditor’s Independence Declaration 36 Statement of comprehensive income 37 Statement of ﬁ nancial position 38 Statement of changes in equity 39 Statement of cash ﬂ ows 40 Notes to the ﬁ nancial statements 70 Directors’ declaration 71 Independent auditor’s report 74 Shareholder information For personal use onlyCorporate directory Directors Dato’ Dr Kai Chah Tan (Executive Chairman) Ms Pamela Anne Jenkins (Executive Director) Mr Wing Kwan Teh (Non-Executive Director) Mr Heng Boo Fong (Independent Non-Executive Director) Mr Harry Vui Khiun Lee (Independent Non-Executive Director) Company Secretary Dario Nazzari Registered Ofﬁ ce 25 Peel Street Adelaide SA 5000 Tel: +61 8 8110 0999 Fax: +61 8 8110 0900 Website: www.asianlivercentre.com.sg Auditors Grant Thornton Audit Pty Ltd Level 1, 67 Greenhill Road Wayville SA 5034 Tel: +61 8 8372 6666 Fax: +61 8 8372 6677 Banker Westpac Banking Corporation 447 Bourke Street Melbourne VIC 3000 Share registry Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street Adelaide SA 5000 Tel: +61 8 8236 2300 Fax: +61 8 9473 2408 Stock Exchange Listing The Company’s shares are quoted on the Ofﬁ cial List of Australian Securities Exchange Limited. ASX Code : AJJ 0404 For personal use onlyWhat deﬁ nes us… DD Dato’ Dr Kai Chah Tan DaDD D D.P.M.P., MBBS(MAL), FRCS(EDIN) PMMD.P.M Executive Chairman and Surgeon, E Exe HH HepHeepp Hepatobiliary / Transplant 05 For personal use onlyChairman’s Message Dear Shareholders, In presenting to you this annual scorecard – our second as a corporation listed on the Australian Securities Exchange – I draw your attention to two major highlights of the year under review. The ﬁ rst is that our reputation for high-quality specialist medical care continues to be in demand in spite of economic uncertainties sweeping the globe. Asian Centre for Liver Diseases and Transplantation (“ACLDT”) conducted 21 transplantations in the year under review, one less than the year earlier while the number of patient transactions rose 15% to 15,023, respectively. Along with higher sales of medication, our revenue increased to S$20.8 million from S$20.5 million over the comparative ﬁ nancial years. The second is that, mindful of our unrelenting focus to improve the range of medical care and enhance shareholder value over the longer term, we streamlined our operations even as we increased our capabilities in the year under review. Since our listing in 2009 we have added headcount, most notably of two specialists while strengthening management and support functions. The increased capability means we can now serve more patients while ensuring the high quality of service and medical excellence which we are known for. Given that, we have reduced reliance on third- party consultants as we can now handle more cases in-house. At the same time, we now have experienced surgeons and support staff who can help us cope with our expanded network to include a new clinic in Singapore, and satellite clinics or centres in Malaysia and Vietnam. The improved capabilities, expanded network and increased management depth also mean that we have a stronger value proposition as we contemplate alliances and explore opportunities for future growth. Had it not been for these investments (the costs of which were not capitalised), additional employee beneﬁ ts and such ﬁ xed operating expenses, our net proﬁ t attributable to shareholders in FY2011 would have been higher than the S$1.6 million recorded (FY2010: S$2.3 million). Accordingly, our earnings per share declined to 0.86 S cent from 1.24 S cents, respectively. Notably, our balance sheet remains strong with cash at bank increasing sharply by 74.5% or S$2.2 million to S$5.2 million as at 31 August 2011. We do not have bank borrowings during the year under review and our expansion plans have been ﬁ nanced by internally-generated funds. During the ﬁ nancial year, Mr Wing Kwan Teh and Mr Harry Vui Khiun Lee joined us as Non-Executive Directors on 31 January 2011 and 18 April 2011, respectively, and Dr Vincent Lai, a Gastroenterologist and specialist in acute liver failure, joined us in January 2011. FY2011 has been a year in which we strengthened and widened our capabilities with a clear vision to provide high-quality medical care while enhancing shareholder value. Many people have contributed much during this period under review – the directors, staff and management, and business partners, as well as our patients and loyal shareholders. Given our strong cash ﬂ ow position, the board of directors has proposed a ﬁ nal dividend of A$0.002 per share on top of the interim dividend of A$0.001 paid in May 2011, bringing the total dividend for FY2011 to A$0.003. On behalf of the Board of directors, we express our deep appreciation. We look forward to your continued support in the year ahead as we continue to realise the LDT. visionon aandd promise of ACCLDDT. vision and promise of ACLDT. Dato’ Dr Kai CChahah Taann Dato’ Dr Kai Chah Tan Executive Chairman 06 For personal use only Ms Pamela Anne Jenkins RGN, B Sc (Hons), MBA Executive Director 07 For personal use onlyExecutive Director’s Message In last year’s Annual Report, I mentioned that our listing on the Australian Securities Exchange marked the start of a transformational year in which we laid the corporate, operational and human resources frameworks for robust future expansion. If I could summarise the events in the year under review, I would say that it was a period in which ACLDT consolidated itself after a hectic period of building the necessary frameworks to prepare for the next level of growth. As depicted on this year’s Annual Report cover, the motif of two livers shaped in the form of a butterﬂ y, captures ACLDT’s metamorphosis from an established regional liver centre into a global healthcare brand offering world-class quality healthcare to all our patients. Strengthening of the medical team Dr Vincent Lai, a leading gastroenterologist and specialist in acute liver failure who joined us in January 2011 from the National University Hospital, has immediately made an impact to the organisation. Apart from his medical duties at our centres in Singapore, Dr Lai is also heavily involved in the operations at our centres in Vietnam and Malaysia. In Vietnam, he has conducted several seminars and talks on liver-related diseases organised by various hospitals and healthcare agencies in Vietnam. These seminars have helped to increase the awareness of liver- related diseases and the treatments available to the Vietnamese community and also raised the proﬁ le of Asian Liver Centre Vietnam (“ALCVN”) in Vietnam. The recruitments that we made to our medical team since our listing on the ASX in 2009 have given us the capacity to expand horizontally and support our overseas ventures. As a result, we have sufﬁ cient doctors now to manage our new centres and cater to the increase in patient numbers, as reﬂ ected in the 15.0% rise in patient transactions compared to the previous ﬁ nancial year. Satellite clinic in Vietnam The clinic in Vietnam was our ﬁ rst satellite clinic and our maiden venture overseas. Getting the centre opened on 11 September 2010 was a huge challenge for our relatively small management team but with the help of our local Vietnamese partner, we completed the building and had it functional on schedule. Our Singapore-based specialist travels regularly to the centre to provide consultation, diagnosis and to advise Vietnamese and expatriate patients. For the ﬁ nancial year ended 31 August 2011, the patient transactions from this clinic formed approximately 2.4% of the Group’s total for the year. Financially, ALCVN recorded a net loss of $0.3 million for FY2011 with ACLDT absorbing approximately $0.2 million as a 70% shareholder. The result was in line with our expectations, being the ﬁ rst year of operation. As with most start-ups in a foreign country and, especially for ALCVN as the ﬁ rst foreign private medical centre in Vietnam, there is a gestation period but we are conﬁ dent the coming ﬁ nancial year will see an improvement. The experience of the centre in Ho Chi Minh City provided many valuable lessons in operating an overseas medical centre. Local experience, knowledge and connections are vital in the success of any business overseas, something which our local partner, Hoa Lam Consultant Investment Ltd (“HL”), possesses. HL ﬁ rst indicated its intention to have a larger role in the operations of the centre in August 2011 and on 3 October 2011, both ACLDT and HL formalised the roadmap for HL to play a signiﬁ cantly active role in ALCVN. HL will be more heavily involved in the marketing and business development aspects of ALCVN and leverage on its local knowledge and connections within Vietnam. ACLDT will continue to provide the required clinical expertise to ensure that the standards and quality of clinical care are maintained. To compensate HL for its increased involvement in the joint-venture, both parties have agreed for ALCVN to allot and issue new shares to HL. A new Joint-Venture Agreement will be drafted and executed to reﬂ ect the change in shareholdings and shareholders’ responsibilities. The new shares issued to HL will subsequently make it the majority shareholder at 67.86% and dilute ACLDT’s shareholdings from 70% currently to 30%. Proceeds from the issue of the new shares will strengthen ALCVN’s balance sheet, with the funds earmarked for increased marketing and business development efforts which will translate into increased awareness and patient numbers. One initiative implemented is the recruitment of a local Gastroenterologist, Dr Dang Thi Dong Phuong, who joined ALCVN on 10 October 2011. With Dr Phuong on board, ALCVN is able to see and treat patients when ACLDT’s Singapore-based doctor is not there, hence enabling the centre to continuely generate income. 08 For personal use onlyNew Clinic at Mount Elizabeth Medical Centre Singapore In July 2010, ACLDT announced that it had entered into a service agreement with Panasia Surgery Pte Ltd located at Mount Elizabeth Medical Centre. This allowed us to begin to tap into the patient pool at Singapore’s largest private hospital which is under Parkway Holdings Limited, a leading healthcare provider in Asia with 16 hospitals and more than 3,000 beds across Asia. On 6 September 2011, we ofﬁ cially opened a new ACLDT liver specialist clinic at Mount Elizabeth Medical Centre, thus increasing our presence to a greater degree. We are excited by this development as ACLDT now has physical presence in two of the largest private hospitals in Singapore which are premium destinations for overseas patients seeking treatment in Singapore. for the assessment of prognosis and for evidence of progressive disease (ﬁ brosis) in disorders such as hepatitis C virus (“HCV”) infection or non-alcoholic fatty liver disease. Currently, most liver histology is obtained by percutaneous liver biopsy for the presence of ﬁ brosis or cirrhosis. FibroScan® uses a modiﬁ ed ultrasound probe to measure the velocity of a shear wave created by a vibratory source and is totally non- invasive and painless, adding to the patient’s comfort. Estimates of stiffness of the liver by ultrasound correlate with stage of ﬁ brosis. We have conducted more than 100 examinations since purchasing the FibroScan® and we hope to capitalise further on the use of this device to enhance our overall patient care. Liver Clinic in Malaysia In early 2011, a collaboration between ACLDT and Mawar Renal Medical Centre (“Mawar”) was put in place to provide consultation in Malaysia for patients with liver and gastro diseases. Mawar is located in Seremban and is an independent Non-Proﬁ t and Non- Government Organisation (“NGO”) which helps poor patients with mainly kidney and other diseases. The proﬁ t that ACLDT makes from its monthly visits is shared with Mawar, which in turn, is used to subsidise costs for its patients at its kidney dialysis centre. Overview ACLDT’s brand name and reputation in the ﬁ eld of hepatobiliary and liver transplantation is something we are leveraging on to further grow our business and enhance shareholder value. Our vision of growth remains the same, focusing on the opportunities within Singapore and also keeping a keen eye for strategic alliances overseas. At the same time, we will not compromise on our level of care but we will continue to strive to provide the best care and service to all our patients. I look forward to the coming ﬁ nancial year as we begin to reap the fruits of our labour. me PaP mela Ann Pamela Anne Jenkins nne JeJenkinnss Executive Director Although the contribution from Malaysia is not signiﬁ cant, it allows ACLDT’s Malaysian patients to have follow-up treatments or new patients to meet our doctors without travelling to Singapore. Should our doctors ﬁ nd that they require surgery or transplantation, they will be referred to our main centre in Singapore. FibroScan® FibroScan® is a concept developed and produced by Echosens and ACLDT is the ﬁ rst private liver centre in Singapore to own the world’s ﬁ rst and only totally non-invasive hepatic ﬁ brosis diagnostic and monitoring device. When we purchased the device in February 2011, ACLDT was one of only four healthcare providers in Singapore to operate this device. The majority of the FibroScan® devices in Singapore are located in the public-sector hospitals. For a patient with chronic liver disease, establishing the presence of ﬁ brosis or cirrhosis is important 09 For personal use onlyDato’ Dr Kai Chah Tan Executive Chairman D.P.M.P., MBBS(MAL), FRCS(EDIN) Proﬁ le of Board of Directors Dato’ Dr Kai Chah Tan serves as the Executive Chairman of ACLDT. He is also the Executive Chairman of Asian Centre for Liver Diseases and Transplantation Pte Ltd and the director of Asian Centre for Liver Diseases and Transplantation Inc, both wholly owned subsidiaries of ACLDT. Dr Tan is the lead Surgeon (Hepatobiliary/ Transplant) in ACLDT. Dr Tan graduated from the University of Malaya, in 1978 and obtained his Surgical Fellowship in 1982. From 1984 to 1987, he obtained advanced training in paediatric and adult hepatobiliary surgery and liver transplant surgery in the United Kingdom. He was Consultant Liver Surgeon in King’s College Hospital (“KCH”) and taught in surgery, University of London between 1988 to 1994. Dr Tan returned to South-East Asia in 1994 to set up private practice, the Asian Centre for Liver Diseases and Transplantation Pte Ltd, in Gleneagles Hospital, Singapore and the Subang Jaya Medical Centre (“SJMC”), Kuala Lumpur, Malaysia. He started a paediatric living donor liver transplantation programme in SJMC, Malaysia in 1995 where over 50 transplants were performed. It was here that he performed South-East Asia’s ﬁ rst paediatric live donor liver transplantation on 23 March 1995. In 1996, Dr Tan was appointed Director of the Liver Transplant Programme, National University Hospital (“NUH”), Singapore. He performed 47 transplants, both adult and paediatric, at the NUH before he resigned in March 2002. In April 2002, the ﬁ rst successful adult-adult living donor liver transplantation in South- East Asia was performed in Gleneagles Hospital, Singapore. Dr Tan and his team have successfully performed close to 200 living donor liver transplantations - the only private centre in South-East Asia to reach this historical milestone. He has published extensively, including co-editing a textbook on ‘The Practice of Liver Transplantation’, and lectured on the subjects of hepatobiliary and liver transplantation surgery. Ms Pamela Anne Jenkins Executive Director RGN, B Sc (Hons), MBA Ms Jenkins began her career in 1984 as an Operating Theatre Sister, KCH, London, and subsequently attained the position of Clinical Nurse Specialist and Department Manager at the hospital’s Liver Transplant Surgical Service. In her latter role, she was in charge of operating theatre staff, trainee nurses, administration, management of the unit and budgetary control. After ten years at KCH, she relocated to Singapore in 1994 to establish ACLDT with Dr Tan, assuming the role of director of ACLDT. She was responsible for the design and development of the centre, implementation of management systems, and assisted in hepatobiliary and liver transplantation surgery. In 1997, she assumed the position of Managing Director of ACLDT. Ms Pamela Anne Jenkins is the Executive Director of ACLDT. She is also the Managing Director of Asian Centre for Liver Diseases and Transplantation Pte Ltd and the director of Asian Centre for Liver Diseases and Transplantation Inc. Ms Jenkins oversees management and operational issues, budgetary control and strategic planning in liaison with the Executive Chairman and Founder, Dato’ Dr Kai Chah Tan. Ms Jenkins holds a Bachelor of Science (Honours) degree from University of East London, United Kingdom as well as a Master of Business Administration (“MBA”) from Kingston University, United Kingdom. Ms Jenkins has wide experience in specialised nursing and healthcare management, covering neurosurgery, cardiothoracic surgery, vascular surgery, orthopaedic surgery, general surgery, microvascular surgery, eye surgery, plastic surgery, paediatric surgery, urology and renal transplantation, hepatobiliary and liver transplant surgery. She has also written conference papers on liver failure and liver transplantation, with special focus on paediatric liver diseases. 10 For personal use onlyMr Wing Kwan Teh specialises in corporate ﬁ nance, ﬁ nancial management and merger and acquisition (“M&A”) evaluation. More speciﬁ cally, he advises the Group on its investment opportunities, growth initiatives, operational restructuring and corporate ﬁ nance matters. He is currently a Group Chief Financial Ofﬁ cer of Koda Ltd (listed on the SGX); an Independent Director & Audit Committee Chairman of Creative Master Bermuda Ltd (listed on the SGX) and an Independent Director & Audit Committee Chairman of China Titanium Ltd (listed on the SGX). Mr Wing Kwan Teh Non-Executive Director CPA (S’pore), FCCA (UK), CA (M’sia) Mr Teh brings extensive ﬁ nancial experience to the Group. He has been a ﬁ nancial professional who advises M&A plans, reviews corporate ﬁ nance and ﬁ nancial reporting matters for several companies listed in and preparing to list in Singapore, Australia, Vietnam and Taiwan. He was appointed head of ﬁ nance for other companies which prepared their Initial Public Offering (“IPO”) applications to the Singapore Exchange (“SGX”), Hanoi Stock Exchange and the then Kuala Lumpur Stock Exchange (“KLSE”). Mr Heng Boo Fong Independent Non-Executive Director FCPA (S’pore), B Acc (Hons) Mr Teh is a Fellow of the Association of Chartered Certiﬁ ed Accountants (United Kingdom), a Certiﬁ ed Public Accountant of the Institute of Certiﬁ ed Public Accountants of Singapore, a Chartered Accountant of Malaysian Institute of Accountants and a Full Member of Singapore Institute of Directors. Mr Teh was appointed to the Board on 31 January 2011. Mr Heng Boo Fong is the Independent Non- Executive Director and is also the Chairman of the Audit Committee of ACLDT. He is also a member of the joint Nomination and Remuneration Committee. Mr Fong studied at the University of Singapore (now known as National University of Singapore, NUS) and graduated with an Honours Degree in Accountancy. He has over 37 years of working experience in auditing, ﬁ nance, business development, corporate governance, with full management responsibility taking independent initiative in various functional areas and had received numerous awards for his performance. He is currently a Director (Special Duties) at the Singapore Totalisator Board (owner of Singapore Pools & Singapore Turf Club). Prior to this appointment, he was with the Auditor-General’s Ofﬁ ce, Singapore from 1975 to 1993. He held the appointment of Assistant Auditor-General when he left the Auditor- General’s Ofﬁ ce. He was also General Manager (Corporate Development) of a listed company in Singapore as well as the Chief Financial Ofﬁ cer of a listed company in Australia. His other professional experience included membership of Audit Committees of Statutory Boards and Advisory Committees of School of Accountancy of Nanyang Technological University, Singapore and Ngee Ann Polytechnic, Singapore. Mr Fong is a Fellow member of the Institute of Certiﬁ ed Public Accountants of Singapore. Mr Fong is presently an Independent Director of Colex Holdings Limited (a company listed on the SGX) and he chairs the Audit Committee. He is also an Independent Director and Chairman of the Audit Committee of Surbana Corporation (a wholly-owned subsidiary of Temasek Holdings Limited). Mr Harry Vui Khiun Lee Independent Non-Executive Director B Bus (Econ & Fin) Mr Harry Lee has more than 20 years of experience in construction-related industries in Malaysia, Singapore and Australia. He is currently the Chief Executive Ofﬁ cer of the HRL Group of Companies which is involved in investment holdings and development. He also holds several directorships of private and listed companies in different industries. He has been a director of another public-listed company in Australia, Millepede International Ltd, since 25 January 2011. 11 Mr Lee joined ACLDT as an Independent Non-Executive Director on 18 April 2011. He chairs the joint Normination and Remuneration Committee and is also a member of the Audit Committee. For personal use only Proﬁ le of Doctors and Key Management Dr Kang Hoe Lee graduated from University of Cambridge, UK, in 1987. He was a scholar at Jesus College, Cambridge, where he received the Duckworth Prize. Dr Lee also received a scholarship from the Kuok Foundation, Malaysia, for furthering his medical studies. He performed his surgical housemanship with Professor Sir Roy Calne (one of the pioneers in liver transplantation) at Addenbrooke’s Hospital, Cambridge. This was followed by further training in internal medicine at Cambridge and he obtained his MRCP (London) in 1990. Subsequent to this, he joined the Department of Medicine, NUH, Singapore, and underwent further training in Intensive Care and Respiratory Medicine. This continued with a two-year Critical Care Fellowship at University of Pittsburgh Medical Center, USA - the leading centre for liver transplantation in the world - under Professor Thomas Starzl and Professor John Fung, where he was awarded Fellow of the Year. Dr Lee then returned to Singapore in 1995, and later joined NUS as a Lecturer in the Department of Medicine. He later became an Associate Professor of Medicine and Senior Consultant, and Director of Medical Intensive Care Unit. He was also one of the founding members of the Society of Intensive Care Medicine in Singapore. During this period, he published many articles on respiratory related issues (especially pneumonia), ICU issues, health outcomes, liver cirrhosis and liver transplantation. Dr Lee joined Gleneagles Hospital in September 2005 as the Director of Critical Care and has been afﬁ liated with ACLDT since then. He is still an adjunct Associate Professor at NUS. He has established close contacts with the King’s College Liver Unit, UK, as part of the development of ACLDT as a leading liver transplant centre. He is currently responsible for managing all the acute liver failure patients and liver transplant patients treated at ACLDT. He is also responsible for all liver dialysis treatments and has brought several machines to ACLDT, making it one of the premier liver dialysis centres in the world. Dr Kang Hoe Lee Respiratory Physician (Critical Care & Liver Transplant) MA(UK), MBBCHir(UK), MRCP(UK), FAMS(SIN), EDIC(EUR) Dr Yu Meng Tan graduated with ﬁ rst-class honours in biochemistry and molecular biology from Charing Cross and Westminster Medical School, University of London, UK, before completing his MBBS (with distinction) from the same university. He was admitted to the Royal College of Surgeons, Edinburgh in 1999. During his surgical training, he received several awards including the Young Surgeons Award at the Asian Surgical Congress. Dr Tan subsequently pursued his interest in hepatobiliary-pancreatic surgery and gastrointestinal surgical oncology. Dr Tan was a key founding member of the liver transplantation team at Singapore General Hospital (“SGH”) in 2005. In 2007, he was appointed the Deputy Head, Senior Consultant of the Department of Surgical Oncology, National Cancer Centre of Singapore (“NCCS”) and the Surgical Director of the Liver Transplantation Programme at the SGH. Among other appointments, he was also an Adjunct Assistant Professor at the Duke-NUS Graduate Medical School of NUS and the Chairman, Infection Control Committee, NCCS. He has published numerous articles in medical journals and is a regular speaker at medical conferences and reviewer of medical journals. Dr Tan joined ACLDT in April 2010. Dr Yu Meng Tan Surgeon (Hepatobiliary-Pancreatic Surgery/Transplant and Surgical Oncology) BSC (Hons), MBBS (LON), FRCS (EDIN), FAMS (Gen Surg) 12 For personal use onlyDr Desmond Chun Tao Wai obtained his basic medical degree at the NUS in 1994. He passed his membership for the Royal College of Physicians (UK) and Master of Medicine (Internal Medicine) in 1998. Dr Wai also completed his specialist training in internal medicine in 1999 and advanced specialist training in Gastroenterology and Hepatology in 2002. Following that, Dr Wai went to the University of Michigan at Ann Arbor, Michigan, USA, for his fellowship in hepatology, under the mentorship of world renowned hepatologist, Professor Anna Lok. In 2003, Dr Wai joined the NUH, Singapore, as a consultant hepatologist and gastroenterologist and later served as an Assistant Professor of Medicine in 2005 at NUS. He has published more than 90 scientiﬁ c articles in peer-reviewed journals including Hepatology, Liver Transplantation and the American Journal of Gastroentrerology. Dr Wai joined ACLDT in Nov 2006 and is currently working as a transplant hepatologist and gastroenterologist. Dr Desmond Chun Tao Wai Gastroenterologist (Transplant Hepatology & Endoscopy) MBBS (SIN), MRCP (UK), MMED (Internal Medicine, SIN) Subsequently, Dr Lai joined NUH, Singapore, as a Consultant Gastroenterologist with speciﬁ c interest in viral hepatology, acute liver failure and liver transplantation. He played an integral part in the set-up of the liver failure unit at NUH, and was part of the acute liver failure faculty in the Asia Paciﬁ c Study of Liver Disease group. Dr Lai is also trained in therapeutic endoscopy and Endoscopic Retrograde Cholangiopancreatography (“ERCP”). His research interests are in the adaptive and innate immunity in patients with liver disease particularly those with viral hepatitis and liver failure. In January 2011, Dr Lai joined ACLDT as a Consultant Gastroenterologist with a speciﬁ c interest in viral hepatology, acute liver failure, therapeutic endoscopy and liver transplantation. Dr Vincent Lai attained his basic medical degree from the University of Shefﬁ eld in England in 1993. He undertook his specialist training in Gastroenterology and Hepatology in England and spent ﬁ ve years in Birmingham, which has one of the largest liver transplant units in Europe. In 2002, he was awarded the prestigious Medical Research Council Clinical Training Fellowship. He completed his Ph.D. at the University of Birmingham in 2007, investigating the liver immunity in viral hepatitis. He was accredited by the Specialist Accreditation Board in gastroenterology in England and was a Consultant in a teaching hospital prior to taking up a post in Singapore. As a Consultant Hepatologist at the Derby NHS Foundation Trust Hospital from 2006 to 2008, Dr Lai helped in the further development of the provision of viral services in Derby. During his tenure there, he not only obtained a grant from the Trust for a study in infection in liver patients but was also actively involved in medical research. 13 Dr Vincent Wai Kwan Lai Gastroenterologist (Transplant Hepatology & Therapeutic Endoscopy) MBChB (UK), MRCP (UK), PhD (Bham UK), CCT (UK), Specialist Register (UK) For personal use only Prior to that, he held senior management positions with various companies including Sun Cruises and Sembawang Leisure (a subsidiary of Sembawang Corporation). Mr Shori joined ACLDT as Group Chief Operating Ofﬁ cer in November 2009. Mr Cherinjit Kumar Shori Group Chief Operating Officer B Acc, PGDip Marketing & Healthcare Mr Cherinjit Kumar Shori holds a Bachelor of Accountancy degree from Nanyang Technological University in Singapore. Mr Shori also holds a Graduate Diploma in Marketing from the Singapore Institute of Management and Certiﬁ cate in Healthcare Management from Georgetown University, USA. He has more than 20 years’ experience in the healthcare and hospitality industries covering business development and marketing. He was the Group Vice President/Deputy Chief Marketing Ofﬁ cer for Singapore-based Parkway Group Healthcare Pte Ltd, one of Asia’s largest healthcare providers, where he served for ten years developing new markets for growth for Parkway, before joinning ACLDT. Mr Meng Yau Yeoh obtained his professional accounting qualiﬁ cation from the Association of Chartered Certiﬁ ed Accountants (“ACCA”) in 1994. He started his career at the then KPMG Peat Marwick in 1995 as Audit Junior and left as an Audit Senior in 1998. After spending four years in the Big 4 audit ﬁ rm, Mr Yeoh spent the next ten years between 1999 and 2009 working in several listed and privately owned companies involved in a wide range of industries ranging from construction, information technology, investment holdings to service and hospitality in Singapore, Malaysia and Australia. During that period, he was involved in two successful IPOs in Singapore. Mr Yeoh is a non-practicing member of the Institute of Certiﬁ ed Public Accountants of Singapore, Fellow Member of the Association of Chartered Certiﬁ ed Accountants (United Kingdom) and a Chartered Accountant registered with the Malaysian Institute of Accountants. He was appointed as ACLDT’s Group Financial Controller in December 2009. Mr Meng Yau Yeoh Group Financial Controller CPA (S’pore), FCCA (UK), CA (M’sia) 14 For personal use only Financial review Revenue Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) Proﬁ t after income tax attributable to members Total share capital and reserves Basic earnings per share Net asset value per share Net tangible asset value per share Increase/ (Decrease) % 1.3 (26.1) (30.6) 2011 2010 S$’000 20,763 2,125 1,625 2,757 S$’000 20,492 2,874 2,340 1,814 2011 S Cents 2010 S Cents 0.86 1.46 1.32 1.24 0.96 0.82 The ﬁ nancial report under review for the 12-month period ending 31 August 2011 (“FY2011”) compares with the 14-month period ending 31 August 2010 (“FY2010”) and follows the change of ﬁ nancial period in FY2010 to align its reporting period with its subsidiary in Singapore. For the year under review, the Group invested signiﬁ cantly in facilities and equipment to establish its ﬁ rst overseas satellite clinic, located in Vietnam, a new clinic at Mount Elizabeth Medical Centre in Singapore, a liver clinic in Malaysia and the acquisition of FibroScan® equipment. Revenue rose by S$0.3 million to S$20.8 million from S$20.5 million as compared a year earlier, due mainly to a 15% increase of patient transactions to 15,023 from 13,066, respectively. However, the number of transplantations performed during the year declined to 21, one less than in FY2010. Sales of medication increased by S$0.3 million to S$3.4 million from S$3.1 million, respectively. Expenses rose by S$1.2 million to S$18.9 million from S$17.7 million due mainly to the new facilities acquired and increased headcount. This is in line with ACLDT’s growth initiatives to widen its range of medical capabilities and to increase its capacity to cater to more patients. Employee beneﬁ ts expense increased to S$6.5 million in FY2011 from S$4.9 million a year earlier. The increase in headcount includes a gastroenterologist who joined in January 2011 and also the full-year impact of the addition of a senior transplant surgeon who joined in April 2010. This increase was, however, partly offset by a cost saving of S$0.4 million as a result of the reduction in our engagement of third-party consultation in FY2011, as some of the services can now be performed by our newly recruited specialists. This cost saving is expected to be higher in the coming ﬁ nancial year. Depreciation and administrative expenses increased S$0.2 million as a result of the new facilities acquired and established to cater for future growth of the Group. As a result of these increased capabilities, net proﬁ t after tax attributable to members decreased to S$1.6 million from S$2.3 million, compared to a year earlier, on the back of S$20.8 million revenue. Earnings per share for FY2011 was 0.86 S cent compared to 1.24 S cents a year earlier. 15 For personal use only Revenue EBITDA and Proﬁ ts Share capital and reserves EPS and NAV Our balance sheet remains healthy with cash and cash equivalents of S$5.2 million compared to S$3.0 million a year earlier, an increase of S$2.2 million even after paying FY2010 ﬁ nal dividends of S$0.7 million. This was due mainly to improved settlement of receivables, which declined to S$1.05 million from S$2.7 million, respectively. Shareholders’ equity or net asset rose by S$1.0 million to S$2.8 million as at 31 August 2011 mainly due to the investment in facilities and equipment which increased tangible non-current assets to S$0.9 million as at 31 August 2011 from S$0.2 million as at 31 August 2010. Correspondingly, net asset value rose by 0.5 S cent to 1.5 S cents from 1.0 S cent a year earlier. The Group did not see any signiﬁ cant shift in patient mix with patients from Indonesia, Malaysia, Singapore, UAE, Myanmar and Vietnam forming the majority of the patients, but saw an increase in the number of patients from these core countries. However, patient numbers from South Asian countries such as India, Bangladesh and Sri Lanka saw a marginal reduction. “Others” comprises a wide range of nationalities such as Mongolians, Russians, Sri Lankans and Laotians. 16 For personal use onlyPatient’s testimonial - Baby Ethan’s miracle story Married for ﬁ ve years and serving as missionaries with the Campus Crusade for Christ, we rejoiced at the arrival of our son, Ethan Azariah in 2009. He fulﬁ lled our dreams and completed our family. B a b y E t h a n b e f o r e f o r e t h e t r a n s p l a n t . t . Barely one week old, young Ethan was diagnosed with jaundice. Into his third month, his tummy started swelling and his eyes remained yellowish. Alarmed, his paediatrician ordered an immediate abdominal ultrasound. The result revealed that his liver and spleen were enlarged with a ﬂ uid build-up in his abdomen. The initial impression was biliary atresia - the absence or injury of his bile ducts. Later, the biopsy from a local hospital in Manila conﬁ rmed that it was liver cirrhosis (scarring of the liver) secondary to biliary atresia. Ethan’s liver was deteriorating quickly and his only option, a liver transplant. There were no successful cases in the Philippines back then. Complicating matters, Ethan had to be older or weigh at least 10kg before receiving surgery, even then, success was not guaranteed. The following months were difﬁ cult, but seeing Ethan in joyful spirits despite his condition kept us going. We were hoping that his condition will improve, but in October 2009, Ethan’s condition worsened and we decided to opt for a liver transplantation. The doctor warned that the survival of babies with biliary atresia is tested within one to two years after surgery, depending on the liver’s condition. We researched further, looking for treatments in Asia and America, and came across two people whose daughters went through the same ordeal. One was a Malaysian businessman who shared his comprehensive research of hospitals, recommending ACLDT in Singapore and, the other, Ms Ria Pasimio shared encouraging experience at the same Centre. With their encouragement, the assurance of the doctors’ credibility and ACLDT’s success rate, we decided to proceed with the surgery in Singapore. Upon sending Ethan’s laboratory results, ACLDT promptly advised that Ethan needed the liver transplantation as soon as possible but most importantly, that it can be done before his ﬁ rst birthday. By the ﬁ rst week of December, we began logistical and emotional preparations – being tested for donor suitability. Without a donor, we cannot ﬂ y to Singapore. After a series of evaluation and tests, to our relief, Dr Janus Ong cleared Tina, my wife as a potential living donor. Baby Ethan 2 days after his transplant. With no concrete plans and insufﬁ cient funds, we ﬂ ew to Singapore on 7 February 2010. Tina and I were warmly greeted by ACLDT’s transplant coordinator, Cecelia Soosaynathan, the doctors and other staff at the Centre. In the initial meeting, Dr Lee Kang Hoe gave us a positive outlook on Ethan’s case. Ethan and Tina underwent ﬁ nal testing and the results showed that they were a suitable match for liver transplantation. Our hopes and conﬁ dence increased further as Dr K C Tan and his team explained the procedure to us. With the support from friends - who set up a website (www.ethanfriends.com) - and families back home, we managed to raise funds for the surgery. Together with the approval of Singapore’s Transplant Ethics Committee, we were ready for surgery. On 10 March, Tina was wheeled into the operating room at Gleneagles Hospital, and then Ethan, an hour later. The transplant surgery took eight hours, and Cecelia gave frequent updates, assuring that everything was going smoothly. By 6pm, Dr Tan came out of the operating theatre and said, “Everything is ok, I’m very happy! Ethan is a very strong boy!” Surrounded by doctors and staff at the ICU, there was a great sense of relief, which marked the beginning for Ethan’s new lease of life. 17 For personal use onlyThrough Ethan’s life and journey, we are blessed and thankful to have found much comfort and encouragement. The ACLDT team certainly provided us with their expertise and support, making sure we understood the procedures and risk at all times. They acceded to our request for medication and consultations regardless of the fact that we were home in Manila, going beyond their call of duty. We want to express our sincere appreciation to ACLDT’s team of doctors and staff, especially Dr K C Tan, Dr Lee Kang Hoe, Dr Nancy Tan, Dr Desmond Wai, Dr Hsieh Wen-Son, Dr Wong Sin Yew and, last but not least, Cecelia. B a b y E t h a n h a p p i l y p l a y i n g w i t h w a t e r Baby Ethan playing with his basketball Under careful supervision of the staff at Gleneagles Hospital’s Liver Ward, both mother and child recovered quickly. They were very supportive and encouraged Tina to walk on the third day following the surgery for faster healing. Ethan displayed great resilience, celebrating his ﬁ rst birthday 18 days after surgery with a new liver. The ACLDT team and the Liver Ward staff eased our stay in a foreign land which was felt mostly during weekly and monthly check-ups. It was comforting to see the team sharing the joy of our Ethan’s new life. We returned back home to Manila three months after the transplant. Ethan was living a full and normal life until we spotted fresh blood in his stool nine months after the transplant. By January 2011, his lymph nodes had become more apparent. Although he remained active, doctors suspected a gastrointestinal problem or worse, a possible post-transplant lymphoproliferative disorder (PTLD). Ethan was twice admitted to a hospital in Manila for a CT scan and biopsy of the lymph nodes. The biopsy procedure turned out critical as lab results conﬁ rmed the signs of early-stage PTLD. Filipino doctors diagnosed it as malignant (cancer) and wanted to start chemotherapy treatment immediately. Seeking a second opinion, we consulted ACLDT doctors who then asked us to bring Ethan to Singapore immediately. Another pathology conﬁ rmed that it was PTLD but thankfully, it was discovered in its early stage. What a relief it was when we heard Dr Lee and Dr Hsieh Wen-Son say, “It’s actually better than what we’ve expected. Treat it and call it an infection. It’s not cancer.” No chemotherapy was necessary. Since the main drug - Prograf – has been suspended, Ethan has been taking steroids as immunosuppression to ﬁ ght the infection, protecting the liver graft. Since March 2011, his blood and liver parameters have stabilised and his growth has been steady. Today, Ethan has become a blessing and inspiration to others with his love for life. 18 For personal use only Corporate governance statement Annual Report 2011 The Board of Asian Centre for Liver Diseases and Transplantation Limited (“ACLDT”) seeks to practice the highest ethical and commercial standards while executing its responsibilities in directing the business and affairs of the Company on behalf of its shareholders. The Board of ACLDT has considered the principles of good corporate governance and best practice recommendations as published by the ASX Corporate Governance Council (“ASXCGC”). ASX Listing Rule 4.10.3 requires the Company to disclose the extent to which it follows or diverges from these best practice recommendations in its Annual Report. This report discloses corporate governance practices the Board would like to highlight to stakeholders. Additional information relating to corporate governance practices that the Company has adopted can be found on the Company’s web site: www.asianlivercentre.com.sg. The Board acknowledges the existence of the new amendments to the 2nd edition of the Corporate Governance Principles effective for the period commencing 1 January 2012. The Board are in the process of implementing policies and procedures to comply with the amended Corporate Governance Principles. The Role of the Board & Management The Company has formalised and disclosed the roles and responsibilities of the Board and those delegated to senior management. The Board of the Company is responsible for the overall corporate governance of the ACLDT, including its ethical behavior, strategic direction, establishing goals for management and monitoring the achievement of those goals with a view to optimising Company performance and maximising shareholder value. The role of management is to support the Managing Director and implement the running of the general operations and ﬁ nancial business of the Company, in accordance with the delegated authority of the Board. Full details of the matters reserved to the Board and to senior management are available on the Company’s web site at www. asianlivercentre.com.sg. Scheduled meetings of the Board are held at least four times a year and the Board meets on other occasions to deal with matters that require attention between scheduled meetings. The responsibility for the operation and administration of the consolidated entity is delegated by the Board to the Managing Director. The Board is responsible for: • Setting the strategic direction of the Company and establishing goals to ensure these strategic objectives are met; • Appointing the Managing Director, setting objectives for the Managing Director and reviewing performance against those objectives, ensuring appropriate policies and procedures are in place for recruitment, training, remuneration and succession planning; • Monitoring ﬁ nancial performance including approval of the annual and half-yearly ﬁ nancial reports and liaison with the Company’s auditors; • Ensuring that risks facing the company and its controlled entities have been identiﬁ ed ensuring that appropriate and adequate controls, monitoring and reporting mechanisms are in place; • Receiving detailed brieﬁ ngs from senior management on a regular basis during the year; • Approving the Boards of Directors of subsidiary companies; and • Ensuring the Company complies with the law and conforms to the highest standards of ﬁ nancial and ethical behavior. ACLDT has obligations to its stakeholders to ensure the Company is managed with appropriate due diligence and that all necessary processes are implemented to minimise risk and maximise business opportunities. To this end, all commercial arrangements, capital expenditure, operational expenditure and other commitments are appropriately documented and have been authorised by either the Managing Director or the Board as appropriate. The composition of the Board is determined in accordance with the Company’s constitution and the following principles and guidelines: • The Board should comprise of at least three directors with at least two non-executive directors; • The Board should comprise of directors with an appropriate range of qualiﬁ cations and expertise; and • The Board should meet formally at least four times per annum and informally on an “as required” basis with all directors being made aware of, and having available, all necessary information, to participate in an informed discussion of all agenda items. 19 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Directors in ofﬁ ce At the date of this statement the following directors are considered independent by the Board: Annual Report 2011 Name Mr Heng Boo Fong Mr Harry Vui Khiun Lee Position Non-Executive Director Non-Executive Director Independent Yes Yes The skills, experience, expertise and tenure of each director are disclosed in the Directors’ Report within this Annual Report. Director independence The Board considers two of ACLDT’s directors as independent under the guidelines. In assessing the independence of directors, the Board follows the ASX guidelines as set out: An independent director is a non-executive director (i.e. is not a member of management) and: • Is not a substantial shareholder of the Company or an ofﬁ cer of, or otherwise associated directly with, a substantial shareholder of the Company; • Within the last three years has not been employed in an executive capacity by the Company or another Group member, or been a director after ceasing to hold any such employment; • Within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another Group member, or an employee materially associated with the service provided; • Is not a material supplier or customer of the Company or other Group member, or an ofﬁ cer of or otherwise associated directly or indirectly with a material supplier or customer; • Has no material contractual relationship with the Company or another Group member other than as a director of the Company; • Has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company; and • Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company. ASXCGC Recommendation 2.1 states that the majority of directors of the Company should be independent. Although currently ACLDT does not comply with that recommendation, the Board is of the opinion that the current structure and composition of the Board is appropriate given the size and nature of operations of the Group. Where additional skills are considered necessary for speciﬁ c purposes, access is made to independent professional advice at the expense of the Company. Such advice is to be shared amongst the directors. Chairman Due to the size of the Company, Dato’ Dr Kai Chah Tan is the Company’s Chairman. While recognising that the ASXCGC recommends that the chairperson be independent, the Company feels that the strong independence exercised by the other Board members mitigates any negative impact on the Company that it may have. Appointment to the Board Where a casual vacancy arises during the year, the Board has procedures to select the most suitable candidate with the appropriate experience and expertise to ensure a balanced and effective board. Any director appointed during the year to ﬁ ll a casual vacancy or as an addition to the current board, holds ofﬁ ce until the next Annual General Meeting and is then eligible for re-election by the shareholders. New directors receive a letter of appointment which sets out the terms of their appointment. On appointment, an induction program is available to directors that include one-on-one sessions with members of the senior management team. 20 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Evaluation of senior executives Senior executives, including the group chief operating ofﬁ cer or group ﬁ nancial controller have a formal job description and letter of appointment describing their term of ofﬁ ce, duties, rights, responsibilities and entitlements upon termination. The performance of senior executives is reviewed annually before the budgets are approved for the next ﬁ nancial year. This process is a formal one with the executive’s performance assessed against Company, division and personal benchmarks by the joint Nomination and Remuneration Committee. Benchmarks are agreed with the respective senior executives and reviews are based upon the degree of achievement against those benchmarks. Induction procedures are in place to allow new senior executives to participate fully and actively in management decision-making. The induction program includes orientation of: • The Company’s ﬁ nancial position, strategies, operations and risk management policies. • The respective rights, duties, responsibilities and roles of the board and senior executives. Ethical business practices The Company has adopted a Code of Conduct to maintain conﬁ dence in the Company’s integrity, its legal obligations and the expectations of its stakeholders. The Company is committed to being a socially responsible corporate citizen, using honest and fair business practices, to act in the best interests of clients so as to achieve the best outcome for shareholders. The Board has procedures in place for reporting any matters that may give rise to unethical practices or conﬂ icts between the interests of a director or senior executive and those of the Company. These procedures are reviewed as required by the Board. To this end, the Company has adopted a Conﬂ ict of Interest Policy that clariﬁ es the processes for directors and senior executives to determine and disclose when a conﬂ ict of interest exists. Shareholding and trading The Board encourages directors and senior executives to own shares in the Company to further link their interests with the interests of all shareholders. Trading of shares by directors or senior executives is prohibited under certain circumstances and as described in the ASX Listing Rules and during certain periods of the ﬁ nancial year. A director or senior executive must not deal in the Company shares at any time when he or she has unpublished information which, if generally available, might affect the share price. Directors are required to notify the Company Secretary following dealing. Safeguard integrity The Board has established an Audit Committee (previously joint Audit and Remuneration Committee) comprised of the two non- executive directors. This committee operates under a charter to enable it to perform its roles and responsibilities. Where considered appropriate, the Company’s external auditors and the Company’s management are invited to attend meetings. The members of the Audit Committee are: • Mr Heng Boo Fong (Chairman) • Mr Harry Vui Khiun Lee The qualiﬁ cations of members of the committee together with their attendances at committee meetings are disclosed in the Directors’ Report within this Annual Report. The role of the Audit Committee is to assist the Board fulﬁ ll its responsibilities in relation to the identiﬁ cation of the areas of signiﬁ cant business risks and the monitoring of the following: • Effective management of ﬁ nancial and other business risks; • Reliable management reporting; • Compliance with laws and regulations in respect to ﬁ nancial reporting; • Maintenance of effective and efﬁ cient audits; • Meeting with external auditors on a twice-yearly basis and informally as circumstances require; and • Recommending to the Board the appointment, rotation, removal and remuneration of the external auditors, and review their terms of engagement, and the scope and quality of the audit. Periodically, the Audit Committee reviews the appointment of the external audit engagement partners using a formal process of evaluation to determine the most appropriate level of skills and experience to suit the size and complexity of the Company. The Audit Committee provides the Board with additional assurances regarding the reliability of ﬁ nancial information for inclusion in the ﬁ nancial statements. The committee is chaired by an independent chair who is not the chairman of the Board. 21 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Timely and balanced disclosure The Board recognises the need to comply with ASX Listing Rule 3.1 concerning continuous disclosure. Annual Report 2011 At each meeting of directors, consideration is given as to whether notice of material information concerning the Company, including its ﬁ nancial position, performance, ownership and governance has been made available to all investors. The Continuous Disclosure Policy also requires senior executives in possession of disclosable information to comply with that policy. Communication with shareholders The Board aims to ensure that shareholders, on behalf of whom they act, are informed of all major developments affecting the Company’s activities and its state of affairs, including information necessary to assess the perform ance of the directors. Communication with shareholders is achieved through the distribution of the following information: • The Annual Report distributed to shareholders; • The Half Yearly Report which is available on the Company’s web site; • The Annual General Meeting and other meetings called to obtain shareholder approval for Board action as appropriate. Shareholders are encouraged to attend and participate at the Company’s Annual General Meeting and other General Meetings; • Letters to shareholders when considered to be appropriate and informative; • Announcements to the Australian Securities Exchange; and • Investor information through the Company’s internet portal at www.asianlivercentre.com.sg The Company strives to ensure that Company announcements via the ASX are made in a timely manner, are factual, do not omit material information and are expressed in a clear and objective manner. Shareholders’ role The shareholders of the Company are responsible for voting on the election of directors at the Annual General Meeting in accordance with the constitution. All directors (other than a Managing Director) are subject to re-election by rotation, no later than every three years. The Annual General Meeting also provides shareholders with the opportunity to express their views on matters concerning the Company and to vote on other items of business for resolution by shareholders. Risk management The Board is responsible for overseeing the risk management function. The Company believes that it is crucial for all Board members to be a part of the process and as such has established risk management as a component of the Audit Committee. The Board is responsible for ensuring the risks and opportunities are identiﬁ ed on a timely basis. The Board has a number of mechanisms in place to ensure the management’s objectives and activities are aligned with the risks identiﬁ ed by the Committee. These include the following: • Implementation of Board approved operating plans and budgets; • Board monitoring of progress against these budgets, including the monitoring of key performance indicators of both a ﬁ nancial and non ﬁ nancial nature; and • The establishment of committees to report on speciﬁ c risk as identiﬁ ed. Internal Risk Management System Compliance Management is accountable to the Board to ensure that operating efﬁ ciency, effectiveness of risk management procedures, internal compliance control systems and controls and policies are all being monitored. Management has designed and implemented a risk management and internal control system to manage the Company’s material business risks and reports to the Board at each meeting on the effective management of those risks. The Company has developed a series of operational risks which the Company believes to be inherent in the industry in which the Company operates. These include: • Changed operating, market or regulatory environments; • Fluctuations in demand volumes; • Fluctuations in exchange rates; and • Increasing costs of operations. These risk areas are provided here to assist investors better understand the nature of the signiﬁ cant risks faced by the Company. 22 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Monitoring Performance The Board and senior management monitor the performance of all divisions through the preparation of monthly management accounts. The monthly management accounts are prepared using accrual accounting techniques and report each business unit’s result as contribution after overhead allocation. These monthly management accounts are compared to monthly budgets, which have been set allowing for the seasonality of anticipated revenues and costs in each of the divisions. The monitoring of the Company’s performance by the Board and management assists in identifying the correct allocation of resources and staff to maximise the overall return to share holders. A performance evaluation for senior management was undertaken during the year and was in accordance with the process developed by the Board for that purpose. Details of the structure of non-executive directors’ and senior executives’ remuneration are included in the Remuneration Report within the Directors’ Report in this Annual Report. Nomination and Remuneration Joint Nomination and Remuneration Committee The Board has established a joint Nomination and Remuneration Committee comprising the non-executive directors on 14 June 2011. Prior to that, the role of the Nomination Committee was performed by the Board itself and the Remuneration Committee was part of the joint Audit and Remuneration Committee. The role of the joint Nomination and Remuneration Committee is to make decisions on the following matters: • Determine the appropriate size and composition of the Board; • Determine the terms and conditions of appointment to and retirement from the Board; • Develop appropriate criteria for Board membership; • Reviewing membership of the Board and proposing candidates for consideration by the Board; • Arranging a review of the Board’s own performance; • Determine the Company’s remuneration plans, policies and practices, including compensation arrangements for the non-executive directors, executive directors, group chief operating ofﬁ cer and senior executives; and • Responsible for considering general remuneration policies and practices, recruitment and termination policies and superannuation requirements. Details of the attendance of directors at the joint Nomination and Remuneration Committee meetings are disclosed in the Directors’ Report in this Annual Report. The Board believes that it has the right numbers and skill sets within its Board members for the current size of the Company, and is conﬁ dent that each non-executive director brings independent judgement to bear on Board decisions. The Company does not have a policy to preclude its executives from entering into transactions to limit their economic risk from investing in Company shares, options or rights and has made executives aware of their obligations in relation to ﬁ nancial commitments against shares issued under the executive securities plan and has requested that they take sufﬁ cient professional advice in relation to their individual ﬁ nancial position. There are no retirement schemes or retirement beneﬁ ts other than statutory beneﬁ ts for non-executive directors. 23 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Directors’ report Annual Report 2011 The directors present their report, together with the ﬁ nancial statements of the Asian Centre for Liver Diseases and Transplantation Limited (“the Group”) for the year ended 31 August 2011. Directors The directors of the Group at any time during or since the end of the ﬁ nancial year are as set out below. Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Wing Kwan Teh Mr Heng Boo Fong Mr Harry Vui Khiun Lee Mr Hoong Kee Tang (Executive Chairman) (Executive Director) (Non Executive Director) (Independent Non-Executive Director) (Independent Non-Executive Director) (appointed 18 April 2011) (Independent Non-Executive Director) (resigned 13 June 2011) (appointed 31 January 2011) The skills, experience, expertise and tenure of each director are disclosed in the proﬁ le of directors section within the Annual Report. Below is the proﬁ le of a director who is no longer in ofﬁ ce: Mr Hoong Kee Tang B Com (Hons) (resigned 13 June 2011) Mr Hoong Kee Tang was an Independent Non-Executive Director and chaired the joint Audit and Remuneration Committee of ACLDT from 14 August 2009 to 13 June 2011. Mr. Tang graduated with a Bachelor of Commerce (Honours) degree from the University of Manitoba (Canada) majoring in accounting and ﬁ nance. He has over 30 years’ experience in the banking, corporate ﬁ nance and telecommunications industries in which he has held several senior management positions. Principal activities The Group’s principal activities consist of provision of specialist medical consultation and services in hepatology practice and related ﬁ elds. Company Secretary The following person held the position of company secretary at the end of the ﬁ nancial year: Mr Dario Nazzari Dario Nazzari has a Bachelor of Commerce, a Diploma in Financial Planning and has more than 14 years professional experience. He is a Chartered Accountant and a member of the Institute of Chartered Accountants. Review and results of operations The reverse takeover exercise for Asian Centre for Liver Diseases and Transplantation Limited (“ACLDT”) (formally known as Costarella Design Limited (“CDL”)) was completed in August 2009. As such, the comparative numbers presented for the period ended 31 August 2010 were for 14 months from 1 July 2009 to 31 August 2010, which comprised: • 2 months from 1 July 2009 to 31 August 2009 for CDL – there were no operating activities for the discontinued operations of CDL during the period under review; • 12 months from 1 September 2009 – 31 August 2010 for ACLDT Details of the Operations of ACLDT during the year, the ﬁ nancial position and the strategies and prospects for the future years can be found in the Chairman and Executive Director’s message found on pages 5 to 9 which forms part of this Annual Report. 24 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Directors’ report (Cont’d) Directors’ meetings The following table sets out the number of director’s meetings (including meetings of Committees of directors) held during the ﬁ nancial year and the number of meetings attended by each director (while they were a director or committee member). During the ﬁ nancial year, seven (7) Board meetings and three (3) joint Audit and Remuneration Committee meetings were held. No joint Remuneration Nomination Committee meetings were held during the ﬁ nancial year. Directors’ Meetings Audit Committee Meetings Joint Nomination and Remuneration Committee Meetings ^ Number Eligible to attend 7 7 4* 7 2* 6 Number Attended 7 7 4* 7 2* 6 Number Eligible to attend - - - 3 - 3 Number Attended - - - 3 - 3 Number Eligible to attend - - - - - - Number Attended - - - - - - Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Wing Kwan Teh Mr Heng Boo Fong Mr Harry Vui Khiun Lee Mr Hoong Kee Tang (resigned 13 June 2011) ^ the Nomination Committee was formed on 11 April 2011 and was subsequently combined with the Remuneration Committee on 14 June 2011. The ﬁ rst joint Nomination and Remuneration Committee meeting was held on 17 October 2011. * Mr Wing Kwan Teh and Mr Harry Vui Khiun Lee were appointed on 31 January 2011 and 18 April 2011 respectively. Directors’ interest The relevant interests of each director in the shares of the parent entity at the date of this report are as follows: Director Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Wing Kwan Teh Mr Heng Boo Fong Mr Harry Vui Khiun Lee Number of shares 102,298,250 21,324,600 4,084,090 - 561,905 None of the directors have share options in the Company. Dividends paid or recommended An interim unfranked dividend of S$0.001 (A$0.001) (2010 : S$0.006) per qualifying ordinary share for the ﬁ nancial year ended 31 August 2011 was paid on 31 May 2011. Following the completion of accounts the Directors propose to declare a ﬁ nal unfranked dividend of S$0.003 (A$0.002) (2010 : S$0.003) per qualifying ordinary share in respect of the ﬁ nancial year ended 31 August 2011, to be paid to the shareholders in December 2011. This dividend has not been included as a liability in these ﬁ nancial statements and will be paid to all shareholders on the Register of Members at the relevant date. The total estimated to be paid is S$493,000 (A$377,000). 25 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Directors’ report (Cont’d) Annual Report 2011 Signiﬁ cant changes in state of affairs There were no signiﬁ cant changes in the state of affairs of the Group during the year. Events subsequent to balance date On 6 September 2011, the company announced that it had commenced operations for a new liver clinic at Mount Elizabeth Medical Centre, the largest private hospital in Singapore. The new clinic complements the main Liver Centre at Gleneagles Hospital and allows ACLDT to tap higher patient load and referrals from specialists at Mount Elizabeth. Both hospitals are part of Parkway Holdings Limited, which has a network of 16 hospitals throughout Asia. During the ALCVN Members’ Council meeting held on the 3 October 2011, all shareholders of ALCVN passed a resolution to issue new shares to Hoa Lam Consultant Investment Ltd to raise its shareholding in ALCVN from 25% to 67.86%. ACLDT’s shareholding in ALCVN will be diluted from 70% to 30% as a result of the new issue of shares. The new shares will be issued upon ﬁ nalisation of a new Joint Venture Agreement (“JVA”). As at t he date of this report, the new JVA has yet to be ﬁ nalised. Other than the above, no matters or circumstances have arisen since the end of the ﬁ nancial year which signiﬁ cantly affected or may signiﬁ cantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future ﬁ nancial years. Likely developments Except as detailed in the Chairman’s and Executive Director’s message on pages 5 to 9, likely developments, future prospects and business strategies of the operations of the Group and the expected results of those operations in future years have not been included in this report, as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the Group. Options At the date of this report, the unissued ordinary shares of ACLDT under option are as follows: Grant Date Exercise Price Options outstanding at 1.9.2010 Options granted Options exercised/ cancelled/ lapsed Options outstanding at 31.8.2011 Exercise period 17.1.2011 $0.088 - 1,299,000 - 1,299,000 17.1.2012 to 17.1.2016 Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other entity. Except as disclosed above, there have been no unissued shares or interests under option of any controlled entity within the Group during or since reporting date. For details of options issued to directors and executives as remuneration, refer to the Remuneration Report. During the ﬁ nancial year, no ordinary shares were issued as a result of the exercise of options. Environmental regulation The Company’s operations are not regulated by any signiﬁ cant environmental regulation under a law of the Commonwealth or of a State or Territory. The directors are not aware of any particular or signiﬁ cant environmental issues which have been raised in relation to the Company’s operations during the ﬁ nancial year. The directors are also not aware of any breach in the environmental regulations in Singapore and Vietnam during the ﬁ nancial year. 26 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 Directors’ report (Cont’d) Remuneration report This remuneration report, which forms part of the director’s report, sets out information about the remuneration of the directors and executives for the year ended 31 August 2011. Remuneration policy The objective of the Group’s remuneration policy is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns remuneration with achievement of strategic objectives and the creation of value to shareholders, and conforms to market best practice for delivery of reward. The Board ensures that remuneration satisﬁ es the following key criteria for good reward governance practices: (i) Competitiveness and reasonableness; (ii) Acceptability to shareholders; (iii) Performance linkage/alignment of executive compensation; (iv) Transparency; and (v) Capital management. The Group has structured an executive remuneration framework that is market competitive and complimentary to the reward strategy of the Group. Alignment to shareholders’ interest: (i) Focuses on sustained growth in shareholder wealth; and (ii) Attracts and retains high calibre executives. Alignment to program participants’ interest: (i) Rewards capability and experience; and (ii) Provides a clear structure for earning rewards. The joint Nomination and Remuneration Committee, consisting of at least two non-executive directors, is responsible for making recommendations on remuneration policies and packages applicable to Board members and for approval of remuneration for executive ofﬁ cers of the Group taking into account the ﬁ nancial position of the Consolidated Group. The Board remuneration policy per the formal Charter is to ensure the remuneration package properly reﬂ ects the person’s duties and responsibilities, and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Constitution of the Company speciﬁ es that the aggregate remuneration of directors, other than salaries paid to executive directors, shall be determined from time to time by general meeting. An amount not exceeding the amount determined is divided between those directors as they agree. The latest determination was at the Annual General Meeting held on 23 November 2009 when shareholders approved an aggregate remuneration pool of A$200,000 per annum. The Board as a whole determines the amount of the fees paid to each non-executive director. The amount proposed to be paid to each non-executive director during the year is A$20,000 (2010: A$20,000). All directors and executives may be allocated options to acquire shares in the Group under the Incentive Option Scheme approved by shareholders from time to time. The last such scheme was approved by shareholders at the Annual General Meeting of shareholders held on 6 December 2010. The options are subject to service conditions such that only a third of the options granted may be exercised on or after the ﬁ rst, second and third anniversary of the grant. Options expire at the earlier of termination of employment or ﬁ ve years after the grant date. The exercise price is set by the joint Nomination and Remuneration Committee. The inputs to the option valuation methodology are set out in Note 21. 27 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Directors’ report (Cont’d) Annual Report 2011 The Group’s policy for determining the nature and amounts of emoluments of board members and key management personnel of the company is as follows: Fixed remuneration for executives The executive directors and key management personnel are employed under a contract detailing their remuneration, service period and non-competition clauses. All executive directors and key management personnel are employed on a continuing basis the terms of which are not expected to change in the immediate future. Apart from retirement beneﬁ ts which accrue under statute (such as unpaid annual leave and pension beneﬁ ts), there are no retirement beneﬁ ts for executive directors and key management personnel. The Company pays to the Singapore Central Provident Fund (“CPF”) at the statutory employer’s contribution rate and salary sacriﬁ ced contributions and therefore there are no future liabilities in respect of these payments. Service contracts The executive directors and key management personnel are employed under a contract detailing their remuneration, service period and non-competition clauses. All executive directors and key management personnel are employed on a continuing basis the terms of which are not expected to change in the immediate future. Contracts can be terminated by ACLDT at will in cases of severe misconduct or breach of duties. Currently there are no formal service contracts in place for the non-executive directors. Performance based remuneration Performance based remuneration has short-term and long-term incentive components. Short-term organisational goals are managed with the use of performance bonuses. The criteria relate to either achievement of individual performance targets, budget targets or achievement of year on year growth of key ﬁ nancial measures. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the committee’s recommendations. Long-term organisational goals are aligned with key management personnel performance through the use of options under the Group’s Incentive Option Scheme. Options are granted based on the performance and contribution of the directors and executives. The exercise price is set by the joint Nomination and Remuneration Committee. Shares issued to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director and executive. Options are valued using the binomial option pricing methodology and expensed in accordance with the vesting conditions. Employment Details of Members of Key Management Personnel The key management personnel of the Group during the ﬁ nancial year ended 31 August 2011 are listed below. – Executive Director and Chairman Directors: Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins – Executive Director Mr Wing Kwan Teh Mr Heng Boo Fong Mr Harry Vui Khiun Lee Mr Hoong Kee Tang – Non-Executive Director – Independent Non-Executive Director – Independent Non-Executive Director – Independent Non-Executive Director (resigned 13 June 2011) Other key management personnel: Mr Cherinjit Kumar Shori – Group Chief Operating Ofﬁ cer Mr Meng Yau Yeoh – Group Financial Controller The skills, experience, expertise and tenure of each director and key management personnel are disclosed in the proﬁ le of directors and key management personnel sections respectively within the Annual Report. 28 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyThe following table provides details of persons who were, during the ﬁ nancial year, members of key management personnel of the Consolidated Group. The table also illustrates the proportion of remuneration that was performance and non-performance based and the proportion of remuneration that was received in the form of options: Annual Report 2011 Directors’ report (Cont’d) Proportion of elements of remuneration related to performance. Proportion of elements of remuneration not related to performance Position held as at 31 August 2011 Contract details (duration & termination) Non-salary cash-based incentives Share/ Options Fixed salary/Fees Total 31 August 2011 Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Executive Director Executive Director/ Surgeon Service Agreement/ In accordance with Constitution Service Agreement/ In accordance with Constitution Mr Wing Kwan Teh Non-Executive Director (appointed 31 January 2011) In accordance with Constitution Mr Heng Boo Fong (1) Non-Executive Director In accordance with Constitution Mr Harry Vui Khiun Lee (2) Non-Executive Director (appointed 18 April 2011) In accordance with Constitution Mr Cherinjit Kumar Shori Group Chief Operating Ofﬁ cer No ﬁ xed term/ One month Mr Meng Yau Yeoh Group Financial Controller No ﬁ xed term/ One month 3% 14% - - - 19% 18% - - - - - 3% 3% 97% 100% 86% 100% - - 100% 100% - - 78% 100% 79% 100% (1) Mr Heng Boo Fong is also a member of the Audit Committee and joint Nomination and Remuneration Committee. Mr Fong replaced Mr Tang as the Chairman of the Audit Committee on 14 June 2011. (2) Mr Harry Vui Khiun Lee is also the Chairman of the joint Nomination and Remuneration Committee and member of the Audit Committee. 29 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyDirectors’ report (Cont’d) Annual Report 2011 Remuneration Details for the Year Ended 31 August 2011 The following table of beneﬁ ts and payment details, in respect of the ﬁ nancial year, the components of remuneration for each director and member of the key management personnel of the Consolidated Group: Cash salary and fees Cash bonus Post employment beneﬁ t – Central Provident Fund Long term employee beneﬁ ts - Share Options 31 August 2011 Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Wing Kwan Teh (2) Mr Hoong Kee Tang (1) Mr Heng Boo Fong Mr Harry Vui Khiun Lee (2) Mr Cherinjit Kumar Shori Mr Meng Yau Yeoh S$ 2,400,000 408,000 - 25,826 25,827 - 250,000 131,280 3,240,933 S$ S$ S$ 66,666 66,666 - - - - 62,000 32,800 228,132 6,263 8,553 - - - - 8,613 11,613 35,042 - - - - - - 10,026 5,443 15,469 3,519,576 Total S$ 2,472,929 483,219 - 25,826 25,827 - 330,639 181,136 (1) Mr Hoong Kee Tang resigned on 13 June 2011. (2) Mr Wing Kwan Teh and Mr Harry Vui Khiun Lee were appointed during the ﬁ nancial year; therefore there are no comparative ﬁ gure. Cash salary and fees Cash bonus Post employment beneﬁ t– Central Provident Fund Long term employee beneﬁ ts - Share Options 31 August 2010 Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Hoong Kee Tang Mr Heng Boo Fong Mr Cherinjit Kumar Shori Mr Meng Yau Yeoh S$ 2,400,000 408,000 - - 200,000 78,674 3,086,674 S$ S$ S$ 25,000 25,000 - - 60,000 18,500 128,500 5,743 10,558 - - 9,430 5,877 31,608 - - - - - - - Total S$ 2,430,743 443,558 - - 269,430 103,051 3,246,782 30 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyOptions and Rights Granted All directors and executives may be allocated options to acquire shares in the Group under the Incentive Option Scheme approved by shareholders from time to time. The last such scheme was approved by shareholders at the Annual General Meeting of shareholders held on 6 December 2010. Annual Report 2011 Directors’ report (Cont’d) Grant details For the ﬁ nancial year ended 31 August 2011 Overall Date No. Value $ (Note 1) Exercised no. Exercised $ Lapsed Lapsed $ Vested no. no. Vested % Unvested % Lapsed % Group Key Management Personnel Mr Cherinjit Kumar Shori 17.1.2011 842,000 10,026 Mr Meng Yau Yeoh 17.1.2011 457,000 5,443 - - - - - - - - - - - - - - - - - 100% 100% - - Note 1 The value of options granted as remuneration and as shown in the above table has been determined in accordance with applicable accounting standards. 31 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Directors’ report (Cont’d) Annual Report 2011 Indemniﬁ cation and insurance of ofﬁ cers The Company is required to indemnify the directors and other ofﬁ cers of the Company against any liabilities incurred by the directors and ofﬁ cers that may arise from their position as directors and ofﬁ cers of the Company. No costs were incurred during the year pursuant to this indemnity. The Company has entered into deeds of indemnity with each director whereby, to the extent permitted by the Corporations Act 2001, the Company agreed to indemnify each director against all loss and liability incurred as an ofﬁ cer of the Company, including all liability in defending any relevant proceedings. Since the end of the previous year the Company has paid insurance premiums in respect of directors’ and ofﬁ cers’ liability and legal expenses’ insurance contracts. The terms of the policies prohibit disclosure of details of the amount of the insurance cover, the nature thereof and the premium paid. Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. There were no such proceedings brought or interventions on behalf of the Company with leave from the Court under section 237 of the Corporations Act 2001. Non-audit services During the year, Grant Thornton, the Group’s auditors, performed certain other services in addition to their statutory audit duties. The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Audit Committee, is satisﬁ ed that the provision of those non-audit services during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: • All non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed by the Audit Committee to ensure they do not impact upon the impartiality and objectivity of the auditor; and • The non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards. Details of the amounts paid to the auditors of the Group, Grant Thornton, and its related practices for audit and non-audit services provided during the year are set out in note 7 to the Financial Statements. Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required by section 307C of the Corporations Act 2001 for the year ended 31 August 2011 has been received as set out immediately following the end of the Directors’ report. The Report of Directors is signed in accordance with a resolution of the Board of Directors. Dato’ Dr Kai Chah Tan Executive Chairman 3 November 2011 32 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF ASIAN CENTRE FOR LIVER DISEASES AND TRANSPLANTATION LIMITED In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Asian Centre for Liver Diseases and Transplantation Limited for the year ended 31 August 2011, I declare that, to the best of my knowledge and belief, there have been: a b no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants S J Gray Director – Audit & Assurance Adelaide, 3 November 2011 Grant Thornton Audit Pty Ltd a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Australia Limited is a member ﬁ rm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member ﬁ rms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation 33 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyl y l y f a m i f a m i i g b i g b i g O n e O n e n e Dr Kang Hoe Lee Dr Kang Hoe Lee D D Dr Vincent Lai Dr Vincent Lai Y u M e n g T a n n T a n Y u M e n g T a D r D r D r D e s m o n d W a i D e s m o n d W a i D r D D Our friendly staff 34 For personal use onlyAnnual Report 2011 Asian Centre for Liver Diseases and Transplantation Limited ABN NUMBER 42 091 559 125 Financial Statements for the year ended 31 August 2011 35 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Statement of comprehensive income For the year ended 31 August 2011 Annual Report 2011 Revenue Other operating income Changes in inventories Inventories Purchase services Employment beneﬁ ts expense Operating lease expense Depreciation and amortisation expenses Directors’ fees Bad debts written off Finance expense Other expenses Costs associated with business combination Proﬁ t before income tax Income tax expense Proﬁ t for the year/period Other comprehensive income: Net effect of foreign currency translation Note 2 3 4 5 Consolidated Group Year ended 31 August 2011 S$ 20,762,783 21,663 (107,709) (1,717,725) (9,013,722) (6,481,417) (486,721) (231,733) (51,653) - (3,249) (800,415) - 1,890,102 (348,813) 1,541,289 14 months ended 31 August 2010 S$ 20,491,819 12,193 6,190 (1,649,026) (9,881,230) (4,875,861) (453,696) (40,568) - (1,524) - (669,634) (105,000) 2,833,663 (493,964) 2,339,699 63,337 1,954 Total comprehensive income for the year/period 1,604,626 2,341,653 Proﬁ t attributable to : Members of the parent entity Non-controlling interest Total comprehensive income attributable to : Members of the parent entity Non-controlling interest Earnings per share From continuing operations: Basic earnings per share (S cents) 9 Diluted earnings per share (S cents) 9 1,625,102 (83,813) 1,541,289 1,691,706 (87,080) 1,604,626 2,339,699 - 2,339,699 2,341,653 - 2,341,653 0.86 0.86 1.24 1.24 These ﬁ nancial statements should be read in conjunction with the accompanying notes. 36 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Statement of ﬁ nancial position As at 31 August 2011 Annual Report 2011 Note Consolidated Group 2010 2011 S$ S$ Current assets Cash and cash equivalents Trade and other receivables Inventories Total current assets Non-current assets Plant and equipment Intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Finance lease liabilities Current tax liabilities Total current liabilities Non-current liabilities Other payables Finance lease liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Non-controlling interest Total equity 10 11 12 13 14 15 18 16 17 18 16 19 20 5,175,475 1,050,968 261,675 6,488,118 2,966,419 2,710,452 369,384 6,046,255 874,029 266,123 1,140,152 7,628,270 183,373 266,123 449,496 6,495,751 3,616,224 44,990 322,542 3,983,756 3,267,631 - 489,034 3,756,665 723,311 125,664 38,492 887,467 4,871,223 2,757,047 266,133 28,993 2,482,040 2,777,166 (20,119) 2,757,047 921,029 - 3,950 924,979 4,681,644 1,814,107 266,133 (49,812) 1,597,786 1,814,107 - 1,814,107 These ﬁ nancial statements should be read in conjunction with the accompanying notes. 37 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Statement of changes in equity For year ended 31 August 2011 Annual Report 2011 Issued Capital Retained Earnings Reserve for own shares S$ 266,133 S$ 387,112 S$ Foreign Currency Translation Reserve S$ (48,883) - - - - - (2,883) - 2,339,699 (1,129,025) - - 1,954 - Balance at 1.9.2009 Shares issued/purchased during the period Total comprehensive income for the period Dividend paid (note 8) Balance at 31.8.2010 266,133 1,597,786 (2,883) (46,929) Balance at 1.9.2010 266,133 1,597,786 (2,883) (46,929) Employee share option reserve Non- controlling interest S$ S$ Total S$ 604,362 (2,883) 2,341,653 (1,129,025) 1,814,107 1,814,107 - - - - - - - - - - - - Total comprehensive income for the year Employee share option Non-controlling interest on acquisition of subsidiary Dividend paid (note 8) - - - - 1,625,102 - - (740,848) - - - - 66,604 (87,080) 1,604,626 - 15,469 - 15,469 (3,268) - - - 66,961 63,693 - (740,848) Balance at 31.8.2011 266,133 2,482,040 (2,883) 16,407 15,469 (20,119) 2,757,047 These ﬁ nancial statements should be read in conjunction with the accompanying notes. 38 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyS tatement of cash ﬂ ows For year ended 31 August 2011 Annual Report 2011 Note Consolidated Group Year ended 31 August 2011 S$ 14 months ended 31 August 2010 S$ Cash ﬂ ows from operating activities Receipts from customers Payments to suppliers and employees Income tax paid Net cash provided by operating activities 24a 22,431,449 21,029,550 (18,342,444) (20,200,303) (480,763) 3,608,242 (370,077) 459,170 Cash ﬂ ows from investing activities Purchase of treasury shares Purchase of plant and equipment Interest received Acquisition of subsidiary, net of cash 22b Cost associated with business combinations during the period Net cash used in investing activities Cash ﬂ ows from ﬁ nancing activities Repayment of ﬁ nance lease liabilities Fixed deposit pledged Dividends paid Finance cost Net cash used in ﬁ nancing activities Net change in cash and cash equivalents held 8 3 Cash and cash equivalents at beginning of ﬁ nancial year/period Effect of exchange rate change on balances of cash held in foreign currencies Cash and cash equivalents at end of ﬁ nancial year/period 10 - (452,308) 12,481 (214,744) - (654,571) (18,146) - (740,848) (3,249) (762,243) 2,191,428 2,845,229 17,628 5,054,285 (2,883) (133,886) 8,885 - (105,000) (232,884) - (84,574) (1,129,025) - (1,213,599) (987,313) 3,827,892 4,650 2,845,229 These ﬁ nancial statements should be read in conjunction with the accompanying notes. 39 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to the ﬁ nancial statements For the year ended 31 August 2011 Annual Report 2011 1 Statement of signiﬁ cant accounting policies This ﬁ nancial report includes the consolidated ﬁ nancial statements and notes of Asian Centre for Liver Diseases and Transplantation Limited and controlled entities (“Consolidated Group” or “Group”). (a) Basis of preparation The ﬁ nancial report is a general purpose ﬁ nancial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a ﬁ nancial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the ﬁ nancial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this ﬁ nancial report are presented below and have been consistently applied unless otherwise stated. The ﬁ nancial report has been prepared on an accruals basis and is based on historical costs, modiﬁ ed, where applicable, by the measurement at fair value of selected non-current assets, ﬁ nancial assets and ﬁ nancial liabilities. Asian Centre for Liver Diseases and Transplantation Limited (“ACLDT”) is a company domiciled in Australia. On 18 August 2009, ACLDT completed its acquisition of all of the issued shares in Asian Centre for Liver Diseases and Transplantation Inc. (including its wholly owned subsidiary Asian Centre for Liver Diseases and Transplantation Pte Ltd) in consideration for the issue of post-consolidation shares in the Company. As a result of the reverse acquisition, the ﬁ nancial statements of the Company are now a continuation of the ﬁ nancial statements of its legal subsidiary. On 14 January 2010, the Australian Securities and Investments Commission (“ASIC”) granted relief to enable the Company to change its ﬁ nancial year end from 30 June to 31 August to align the ﬁ nancial year end of ACLDT Ltd with that of its subsidiary undertakings. As a result, the ﬁ nancial report for the period ended 31 August 2010 reﬂ ects the 14 months from the 1 July 2009 to 31 August 2010. The consolidated ﬁ nancial report is presented in Singapore Dollars (SGD) as a signiﬁ cant portion of the group’s activity is denominated in Singapore Dollars. These consolidated ﬁ nancial statements have been approved for issue by the Board of Directors on 3 November 2011. (b) Principles of consolidation A controlled entity is any entity over which Asian Centre for Liver Diseases and Transplantation Limited has the power to govern the ﬁ nancial and operating policies so as to obtain beneﬁ ts from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered. A list of controlled entities is contained in Note 22 to the ﬁ nancial statements. All controlled entities have a 31 August ﬁ nancial year end. As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated ﬁ nancial statements as well as their results for the year then ended. Where controlled entities have entered the Consolidated Group during the year, their operating results have been included from the date control was obtained. All inter-group balances and transactions between entities in the Consolidated Group, including any unrealised proﬁ ts or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. Accounting policies of subsidiaries are consistent with those adopted by the parent entity. 40 Asian Centre for Liver Diseases and Transplantation Limited For personal use only (c) Business combinations Business combinations occur where an acquirer obtains controls over one or more businesses and results in the consolidation of its assets and liabilities. Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identiﬁ ed as the acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identiﬁ able assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured. The acquisition may result in the recognition of goodwill (refer Note 1(j)) or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree. The 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 ﬁ nancial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the entity interest issued by the acquirer. Reverse acquisition, where the cost of the business combination is deemed to have been incurred by the legal subsidiary (ie. the acquirer for accounting purposes) in the form of equity instruments issued to the owners of the legal parent (i.e. the acquiree for accounting purposes), are accounted for under AASB 3: Business Combinations. The method calculates the fair value of the instruments issued by the legal parent on the basis of existing instruments of the legal subsidiary. All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income. Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s proﬁ t or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests. (d) Income tax The income tax expense (beneﬁ t) for the year comprises current income tax expense (beneﬁ t) and deferred tax expense (beneﬁ t). Current income tax expense charged to the proﬁ t or loss is the tax payable on taxable income calculated using applicable income tax rates that have been enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reﬂ ects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (beneﬁ t) is charged or credited directly to equity instead of the proﬁ t or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the ﬁ nancial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable proﬁ t or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reﬂ ects the manner in when management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable proﬁ t will be available against which the beneﬁ ts of the deferred tax asset can be utilised. 41 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) Annual Report 2011 The amount of beneﬁ ts brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income tax legislation and the anticipation that the Company will derive sufﬁ cient future assessable income to enable the beneﬁ t to be realised and comply with the conditions of deductibility imposed by the law. (e) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes direct costs associated with the purchase of inventory including transportation costs. (f) Plant & equipment Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash ﬂ ows that will be received from the asset’s employment and subsequent disposal. The expected net cash ﬂ ows have been discounted to their present values in determining recoverable amounts. 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 beneﬁ ts associated with the item will ﬂ ow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the ﬁ nancial year in which they are incurred. Depreciation The depreciation of all ﬁ xed assets 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. The depreciation rates used for each class of depreciable assets are: Class of ﬁ xed asset Ofﬁ ce equipment Medical equipment Computers Furniture and ﬁ ttings Renovations Depreciation Rate 5-6 years 5 years 5 years 5 years 4-5 years The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. (g) Leases Leased payments for operating leases, where substantially all the risks and beneﬁ ts remain with the lessor, are charged as expenses in the periods in which they are incurred. In accordance with AASB 117 Leases, the economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards related to the ownership of the leased asset. The related asset is then recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a ﬁ nance leasing liability, irrespective of whether some of these lease payments are payable up-front at the date of inception of the lease. Leases of land and buildings are classiﬁ ed separately and are split into a land and a building element, in accordance with the relative fair values of the leasehold interests at the date the asset is recognised initially. 42 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) Depreciation methods and useful lives for assets held under ﬁ nance lease agreements correspond to those applied to comparable assets which are legally owned by the Group. The corresponding ﬁ nance leasing liability is reduced by lease payments less ﬁ nance charges, which are expensed as part of ﬁ nance costs. Annual Report 2011 The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to proﬁ t or loss over the period of the lease. (h) Financial instruments Initial recognition and measurement Financial assets and ﬁ nancial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For ﬁ nancial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classiﬁ ed “at fair value through proﬁ t or loss” in which case transaction costs are expensed to the proﬁ t or loss immediately. Classiﬁ cation and subsequent measurement Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties. Where available, quoted prices in an active market are used to determine fair value. The Group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards speciﬁ cally applicable to ﬁ nancial instruments. (i) Loans and receivables Loans and receivables are non-derivative ﬁ nancial assets with ﬁ xed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. (ii) Held-to-maturity investments These investments are non-derivative ﬁ nancial assets that have ﬁ xed maturities and ﬁ xed or determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. (iii) Available for sale ﬁ nancial assets Available for sale ﬁ nancial assets are non-derivative assets that are either not suitable to be classiﬁ ed into other categories of ﬁ nancial 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 ﬁ xed maturity nor ﬁ xed or determinable payments. Available for sale ﬁ nancial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (iv) Financial liabilities Non-derivative ﬁ nancial liabilities (excluding ﬁ nancial guarantees) are subsequently measured at amortised cost. (v) Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment At each reporting date, the Group assesses whether there is objective evidence that a ﬁ nancial instrument has been impaired. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash ﬂ ows expires or the asset is transferred to another party whereby the entity no longer has any signiﬁ cant continuing involvement in the risks and beneﬁ ts associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the ﬁ nancial 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 proﬁ t or loss. 43 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) (i) Impairment of assets Annual Report 2011 At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income. Impairment testing is performed annually for goodwill. (j) Intangibles Goodwill Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of: (i) (ii) (iii) the consideration transferred; any non-controlling interest; and the acquisition date fair value of any previously held equity interests over the acquisition date fair value of net identiﬁ able assets acquired. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is tested for impairment annually and is allocated to the Group’s cash generating units or groups of cash generating units, which represent the lowest level at which goodwill is monitored by where such level is not larger than an operating segment. (k) 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 ﬁ nancial statements are presented in Singapore dollars which is the Group’s functional and presentation currency. Transaction 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 the statement of comprehensive income, except where deferred in equity as a qualifying cash ﬂ ow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of comprehensive income. Group companies The ﬁ nancial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows: • • • assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; income and expenses are translated at average exchange rates for the year; and retained earnings are translated at the exchange rates prevailing at the date of the transaction. Exchange differences arising on the translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the statement of comprehensive income. These differences are recognised in the statement of comprehensive income in the year in which the operation is disposed. 44 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) (l) Employee beneﬁ ts Provision is made for the Group’s liability for employee beneﬁ ts arising from services rendered by employees to balance date. Employee beneﬁ ts that are expected to be settled within one year are measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee beneﬁ ts payable later than one year are measured at the present value of the estimated future cash outﬂ ows to be made for those beneﬁ ts. Those cash ﬂ ows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash ﬂ ows. Central Provident Fund (“CPF”) contributions: The Group makes contributions to the Central Provident Fund scheme in Singapore, a deﬁ ned contribution post-employment or pension scheme. Contributions to post-employment beneﬁ ts under deﬁ ned contribution plans are recognised as an expense in the statement of comprehensive income as incurred. Equity-settled compensation: The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a binomial option pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. (m) 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 outﬂ ow of economic beneﬁ ts will result and that outﬂ ow can be reliably measured. (n) Cash and cash equivalents Cash and cash equivalents includes cash on hand, demand deposits held with banks, other short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insigniﬁ cant risk of changes in values. (o) Revenue and other income Revenue is measured at the fair value of the consideration received or receivable. Revenue from sale of goods or rendering of a service is recognised upon delivery of the goods or service. Interest revenue is recognised using the effective interest rate method, which, for ﬂ oating rate ﬁ nancial assets, is the rate inherent in the instrument. All revenue is stated net of goods and services tax (“GST”). (p) Trade and other payables Trade and other payables represent the liability outstanding at the end of the reporting year for goods and services received by the Group during the reporting year which remains unpaid, The balance is recognised as a current liability with the amount being normally paid within 30 days of initial recognition. (q) Goods and services tax 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 Tax Ofﬁ ce (“ATO”). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated in the statement of ﬁ nancial position inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of ﬁ nancial position. Cash ﬂ ows are included in the statement of cash ﬂ ows on a gross basis. The GST components of cash ﬂ ows arising from investing and ﬁ nancing activities which are recoverable from, or payable to, the ATO are classiﬁ ed as operating cash ﬂ ows. 45 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) (r) Share-based employee remuneration Annual Report 2011 The Group operates equity-settled share-based remuneration plans for its employees. None of the Group’s plans feature any options for a cash settlement. All goods and services received in exchange for the grant of any share-based payment are measured at their fair values. Where employees are rewarded using share-based payments, the fair values of employees’ services are determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example proﬁ tability and sales growth targets and performance conditions). All share-based remuneration is ultimately recognised as an expense in proﬁ t or loss with a corresponding credit to ‘share option reserve’. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting. Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up are allocated to share capital. (s) Transaction costs on the issue of equity instruments Transaction costs arising from the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued. (t) Comparative ﬁ gures When required by Accounting Standards, comparative ﬁ gures have been adjusted to conform to changes in presentation for the current ﬁ nancial year. (u) New and Revised Accounting Standards The Group has adopted the following revisions and amendments to AASB’s issued by the Australian Accounting Standards Board and IFRS issued by the International Accounting Standards Board, which are relevant to and effective for the Group’s ﬁ nancial statements for the annual period beginning 1 July 2010: • • Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project– AASB 2009-5 Improvements to IFRSs- AASB 2010-03. The adoption of new and revised Accounting Standards effective for the ﬁ nancial statements for the annual period beginning 1 July 2010 did not have a material impact on the Group’s ﬁ nancial statements. 46 Asian Centre for Liver Diseases and Transplantation Limited For personal use only (v) Accounting standards not yet effective AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 (Effective from 1 January 2013) Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) AASB 9 introduces new requirements for the classiﬁ cation and measurement of ﬁ nancial assets and liabilities. AASB 9 uses a single approach to determine whether a ﬁ nancial asset is measured at amortised cost or fair value, replacing the many different rules in AASB 139 and removes the impairment requirement for ﬁ nancial assets held at fair value. In addition, the majority of requirements from AASB 139 for the classiﬁ cation and measurement of ﬁ nancial liabilities has been carried forward unchanged, except in relation to own credit risk where an entity takes the option to measure ﬁ nancial liabilities at fair value. AASB 9 requires the amount of the change in fair value due to changes in the entity’s own credit risk to be presented in other comprehensive income (OCI), unless there is a accounting mismatch in the proﬁ t or loss, in which case all gains or losses are to be presented in the proﬁ t or loss. The amendment is not expected to have any impact on the group’s ﬁ nancial statements. AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards arising from AASB 124 (Effective from 1 January 2011) The amendment clariﬁ es and simpliﬁ es the deﬁ nition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. The group will apply the amended standard from 1 July 2011. When the amendments are applied, the group will need to disclose any transactions between its subsidiaries and it associated. However, there will be no impact on any of the amounts recognised in the ﬁ nancial statements. (w) Impact of the Carbon Tax Legislation On 10 July 2011, the Commonwealth Government announced the “Securing a Clean Energy Future – the Australian Government’s Climate Change Plan”. Whilst the announcement provides further details of the framework for a carbon pricing mechanism, uncertainties continue to exist on the impact of any carbon pricing mechanism on the Group as legislation must be voted on and passed by both Houses of Parliament. In addition, as the Group will not fall within the “Top 500 Australian Polluters”, the impact of the Carbon Scheme will be through indirect effects of increased prices on many production inputs and general business expenses as suppliers subject to the carbon pricing mechanism are likely to pass on their carbon price burden to their customers in the form of increased prices. Directors expect that this will not have a signiﬁ cant impact upon the operation costs within the business, and therefore will not have an impact upon the valuation of assets and/or going concern of the business. (x) Critical accounting estimates and judgements The directors evaluate estimates and judgements incorporated into the ﬁ nancial report based on historical knowledge and best available 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. Key Estimates and Judgements (i) Impairment The Group assesses impairment at each reporting date by evaluating conditions and events speciﬁ c to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value in use calculations and valuations from independent valuers are performed and used in assessing recoverable amounts, these calculations and valuations incorporate a number of key estimates. 47 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) 2 Revenue Annual Report 2011 Operating activities Provision of services Sale of medication Total revenue from operating activities Other revenue Interest received Other income Total other revenue 3 Finance expense Consolidated Group 2011 S$ 2010 S$ 17,384,876 17,369,484 3,377,907 3,122,335 20,762,783 20,491,819 12,481 9,182 21,663 8,885 3,308 12,193 Interest expense on obligation under ﬁ nance lease 3,249 - 4 Proﬁ t for the year/period The proﬁ t for the year/period has been arrived at after crediting/(charging) the following items: a. Expenses Cost of sales Foreign currency translation gain/(loss) Bad and doubtful debts Consolidated Group 2011 S$ 2010 S$ (10,839,156) (11,524,066) 450 - (72) (1,524) Administrative expenses include rental expense on operating leases as follows: - premises (486,721) (453,696) Depreciation and amortisation is reﬂ ected in the statement of comprehensive income as follows: - depreciation Professional fees Credit card charges Central Provident Fund Share option expense (231,733) (151,430) (114,984) (153,722) (15,469) (40,568) (181,091) (99,725) - - 48 Asian Centre for Liver Diseases and Transplantation Limited For personal use only 5 Income Tax Expense Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) a. The components of tax expense comprise: Current tax Deferred tax (Over)/under provision in respect of prior years Note Consolidated Group 2011 S$ 2010 S$ 16 383,826 34,542 (69,555) 348,813 493,298 - 666 493,964 b. The prima facie tax on proﬁ t before income tax is reconciled to the income tax as follows: Prima facie tax payable on proﬁ t before income tax at 17% (2010: 17%) 321,317 481,723 Add: Tax effect of: - (over)/under provision for income tax in prior years - partial income tax exemption - current year losses for which no deferred tax asset was recognised Income tax expense (69,555) (25,925) 122,976 348,813 666 (25,925) 37,500 493,964 6 Key Management Personnel Compensation The key management personnel (“KMP”) compensation included in employment expenses includes: Short-term beneﬁ ts Post employment beneﬁ t Share based payments Total compensation Detailed remuneration disclosures are provided in the remuneration report. 2011 S$ 2010 S$ 3,469,065 3,215,174 35,042 15,469 31,608 - 3,519,576 3,246,782 49 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) Annual Report 2011 KMP Options and Right Holdings All directors and executives may be allocated options to acquire shares in the Group under the Incentive Option Scheme approved by shareholders from time to time. The last such scheme was approved by shareholders at the Annual General Meeting of shareholders held on 6 December 2010. The number of options over ordinary shares held by each KMP of the Group during the ﬁ nancial year is as follows: 31 August 2011 Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Wing Kwan Teh Mr Hoong Kee Tang Mr Heng Boo Fong Mr Harry Vui Khiun Lee Mr Cherinjit Kumar Shori Mr Meng Yau Yeoh Balance at beginning of year Granted as remuner ation during the year Exercised during the year Lapsed/ cancelled Balance at end of year Balance vested as end of year Vested during the year - - - - - - - - - - - - - - - 842,000 457,000 1,299,000 - - - - - - - - - - - - - - - - - - - - - - - - 842,000 457,000 1,299,000 - - - - - - - - - - - - - - - - - - There were no share options issued during the last ﬁ nancial period ended 31 August 2010. KMP Shareholdings The number of ordinary shares in Asian Centre for Liver Diseases and Transplantation Limited held by each KMP of the Group during the ﬁ nancial year is as follows: 31 August 2011 Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Wing Kwan Teh Mr Hoong Kee Tang Mr Heng Boo Fong Mr Harry Vui Khiun Lee Mr Cherinjit Kumar Shori Mr Meng Yau Yeoh * At date of appointment Balance at beginning of year 102,298,250 21,324,600 - - - - - - 123,622,850 Issued during the year Issued on exercise of options during the year Other changes during the year Balance at end of year - - - - - - - - - - - - - - - - - - - - 4,084,090* - - 102,298,250 21,324,600 4,084,090 - - 561,915* 561,915 - - - - 4,646,005 128,268,855 50 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 Notes to ﬁ nancial statements (Cont’d) Balance at beginning of period Issued during the period - - - - - - - - - - 102,298,250 21,324,600 - - 486,988 133,805 10,000 - - 124,253,643 Issued on exercise of options during the period - - - - - - - - - - Other changes during the period Balance at end of period - - - - - - - - - - 102,298,250 21,324,600 - - 486,988 133,805 10,000 - - 124,253,643 31 August 2010 Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins Mr Hoong Kee Tang Mr Heng Boo Fong Mr Ravindran Govindan Mr Aurelio Costarella Mr Sam Di Giacomo Mr Cherinjit Kumar Shori Mr Meng Yau Yeoh Other KMP Transactions There have been no other transactions involving equity instruments other than those described in the tables above. For details of other transactions with KMP, refer to Note 26: Related Parties. 7 Auditor’s Remuneration Remuneration of the parent entity auditor, Grant Thornton Audit Pty Ltd: - auditing or reviewing the ﬁ nancial report - taxation services Remuneration of related practices of Grant Thornton Audit Pty Ltd: - auditing or reviewing the ﬁ nancial report of subsidiaries - taxation services Consolidation Group 2011 S$ 2010 S$ 34,741 12,095 65,408 5,308 22,427 - 55,992 4,192 51 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyNotes to ﬁ nancial statements (Cont’d) 8 Dividends Annual Report 2011 Final unfranked dividend of 0.3 S cents per share in respect of ﬁ nancial period ended 2010 Interim unfranked dividends 0.1 S cents per share (2010 : 0.6 S cents per share) Consolidation Group 2011 S$ 492,950 247,898 2010 S$ - 1,129,025 740,848 1,129,025 Following the completion of accounts the Directors propose to declare a ﬁ nal unfranked dividend of S$0.003 (A$0.002) (2010 : S$0.003) per qualifying ordinary share in respect of the ﬁ nancial year ended 31 August 2011, to be paid to the shareholders in December 2011. This dividend has not been included as a liability in these ﬁ nancial statements and will be paid to all shareholders on the Register of Members at the relevant date. The total estimated to be paid is S$493,000 (A$377,000). 9 Earnings per Share Proﬁ t for the year/period Consolidation Group 2010 S$2,339,699 2011 S$1,625,102 Weighted average number of ordinary shares during the year/period used in calculating basic EPS 188,454,000 188,033,135 Effect of dilution: Share option Weighted average number of ordinary shares during the year/period used in calculating diluted EPS 811,875 - 189,265,875 188,033,135 Basic earnings per share (S cents) Diluted earnings per share (S cents) 0.86 0.86 1.24 1.24 10 Cash and Cash Equivalents Consolidation Group Cash and bank balances Fixed deposit pledged 2011 S$ 5,054,285 121,190 5,175,475 2010 S$ 2,845,229 121,190 2,966,419 The effective interest rate on short-term bank deposits was 0.70% (2010 : 0.70%) per annum; these deposits have an average maturity of 24 months (2010 : 24 months). The Fixed deposit is pledged to a bank for performance guarantee relating to the operating lease. 52 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyReconciliation of cash Cash at the end of the ﬁ nancial year as shown in the statement of cash ﬂ ows is reconciled to items in the statement of ﬁ nancial position as follows: Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) Cash and cash equivalents Less: Fixed deposit pledged Cash and cash equivalents in the statement of cash ﬂ ows 11 Trade and Other Receivables Trade receivables Current Trade receivables Other receivables Deposits Total current trade and other receivables 5,175,475 (121,190) 5,054,285 2,966,419 (121,190) 2,845,229 Consolidation Group 2011 S$ 2010 S$ 998,567 35,101 17,300 1,050,968 2,618,669 89,783 2,000 2,710,452 a Provision for impairment of receivables Current trade and term receivables are non-interest bearing loans and generally on 30-day terms. A provision for impairment is recognised when there is objective evidence that an individual trade or term receivable is impaired. No trade or other receivables are considered past due and impaired. b Credit risk The group has no signiﬁ cant concentration of credit risk with respect to any single counter party or group of counter parties. The following table details the Group’s trade receivables exposed to credit risk with ageing analysis. Amounts are considered as ‘past due’ when the debt has not been settled, with the terms and conditions agreed between the Group and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are speciﬁ c circumstances indicating that the debt may not be fully repaid to the Group. The balances of receivables that remain within initial trade terms are considered to be high credit quality. Current Due 1 - 30 days Due 31- 60 days Due over 60 days 12 Inventories Current - Medical Supplies at cost Total inventories Consolidation Group 2011 S$ 2010 S$ 454,760 146,607 349,186 48,014 998,567 1,069,665 663,394 501,198 384,412 2,618,669 Consolidation Group 2011 S$ 2010 S$ 261,675 261,675 369,384 369,384 53 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) 13 Plant and Equipment Annual Report 2011 Consolidated Group 2011 S$ 2010 S$ Ofﬁ ce equipment At Cost Accumulated depreciation Total ofﬁ ce equipment Medical equipment At Cost Accumulated depreciation Total medical equipment Computers At Cost Accumulated depreciation Total computers Furniture and ﬁ ttings At cost Accumulated depreciation Total furniture and ﬁ ttings Renovations At cost Accumulated depreciation Total Renovations Total plant and equipment 63,055 (30,645) 32,410 495,058 (108,144) 386,914 124,073 (38,340) 85,733 61,077 (19,253) 41,824 487,172 (160,024) 327,148 874,029 31,487 (24,443) 7,044 55,829 (51,011) 4,818 123,544 (71,032) 52,512 19,024 (9,023) 10,001 144,926 (35,928) 108,998 183,373 54 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) Ofﬁ ce equipment Medical equipment Computers Furniture and ﬁ ttings Renovations Total S$ S$ S$ S$ S$ S$ a. Movements in Carrying Amounts Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the current ﬁ nancial year. Consolidated Group Balance at 31 August 2010 Additions Addition through business combination Depreciation expense Currency alignment Carrying amount at 31 August 2011 7,044 25,719 9,077 (8,593) (837) 32,410 4,818 426,429 15,106 (59,671) 232 386,914 52,512 55,810 - (22,723) 134 85,733 10,001 42,053 - (10,811) 581 41,824 108,998 - 399,894 (129,935) (51,809) 327,148 183,373 550,011 424,077 (231,733) (51,699) 874,029 Included in medical equipment is medical equipment under ﬁ nance lease arrangement amounting to $208,467 (2010 : Nil). Finance lease liabilities (see note 18) are secured by the related assets held under ﬁ nance leases. 14 Intangible Assets Total Intangible Assets Goodwill Cost Accumulated impairment losses Closing carrying value at the end of the year/period Reconciliation of Goodwill Balance at the beginning of year/period Additions Disposals Impairment losses Consolidated Group 2011 S$ 2010 S$ 266,123 - 266,123 266,123 - 266,123 266,123 266,123 - - - - - - Closing carrying value at the end of the year/period 266,123 266,123 Impairment test for goodwill Goodwill is allocated to cash generating units (“CGU’s”) according to applicable business operations. There is no impairment loss in the current year and prior period. In the current ﬁ nancial year and prior ﬁ nancial period, ACLDT had one cash generating unit which is medical services. The recoverable amount of a CGU is based on value-in-use calculations. These calculations are based on projected cash ﬂ ows approved by management covering a period not exceeding ﬁ ve years. Management’s determination of cash ﬂ ow projections and gross margins are based on past performance and its expectation for the future. The present value of future cash ﬂ ows has been calculated using a discount rate of 7% (2010 : 7%) and a growth rate of 5% (2010 : 5%) per annum to determine value-in-use. No impairment loss was required for the carrying value of goodwill as the recoverable amount was assessed to be in excess of its carrying value. The directors believe that any reasonable change in the key assumptions will not materially cause the recoverable value of the CGU to be lower than the carrying amount. 55 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyNotes to ﬁ nancial statements (Cont’d) 15 Trade and Other Payables Annual Report 2011 Current Trade payables Patients’ deposits Sundry payables and accrued expenses Total current trade and other payables 16 Taxation Current Income tax payable Non-current Consolidated Group 2011 S$ 2010 S$ 2,303,633 2,356,492 788,073 524,518 547,416 363,723 3,616,224 3,267,631 Consolidated Group 2011 S$ 2010 S$ 322,542 489,034 Deferred tax liabilities: Tax allowances relating to plant & equipment Net deferred tax liability 1 September 2010 S$ Recognised in proﬁ t and loss S$ 31 August 2011 S$ 3,950 3,950 34,542 34,542 38,492 38,492 Deferred tax liabilities: Tax allowances relating to plant & equipment Net deferred tax liability 17 Other Payables 1 September 2009 S$ Recognised in proﬁ t and loss S$ 31 August 2010 S$ 3,950 3,950 - - 3,950 3,950 Consolidated Group 2011 S$ 2010 S$ Other payables 723,311 921,029 Included in Other payables is an amount owing to previous shareholders of Asian Centre for Liver Diseases and Transplantation Inc of $515,200 (2010 : $921,029). Also included is an amount owing to non-controlling interest of $208,261 (2010 : Nil). The amounts owing has no ﬁ xed term of repayment, is interest free and is not due within one year. 56 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) 18 Finance Lease Current Non-current 19 Issued Capital 188,454,000 Fully paid ordinary shares (2010 : 188,454,000) Total capital Consolidated Group 2011 S$ 44,990 125,664 170,654 2010 S$ - - - Consolidated Group 2011 S$ 266,133 266,133 2010 S$ 266,133 266,133 Changes to the then Corporation Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the parent entity does not have a limited amount of authorised capital and issued shares do not have a par value. Ordinary Shares At the beginning of reporting year Shares issued during year: At reporting date Treasury Shares At the beginning of reporting year Shares purchased during year At reporting date Consolidated Group Number S$ 188,454,000 266,133 - - 188,454,000 266,133 47,500 - 47,500 2,883 - 2,883 Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. c. Capital Management Management controls the capital of the Group in order to provide shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. Currently the Group’s debt relates to ﬁ nance lease only. There are no externally imposed capital requirements. There have been no changes in the strategy adopted by management to control the capital during the year. 57 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) Annual Report 2011 20 Reserves Nature and purpose of reserve (i) Share-based payments The share-based payments reserve is used to recognise: • The grant date of fair value of options issued to employees but not exercised • The grant date fair value of shares issued to employees • The issue of shares held by the ACLDT Employee Share Trust to employees (ii) Transactions with non-controlling interests The reserve is used to record the differences described in note 1(c) which may arise as a result of transactions with non- controlling interests that do not result in a loss of control. (iii) Foreign currency translation Exchange difference arising on translation of the foreign controlled entity are recognised in other comprehensive income as described in note 1(k) and accumulated in a separate reserve within equity. The cumulative amount is reclassiﬁ ed to proﬁ t or loss when the net investment is disposed of. (iv) Reserve for own shares The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group. At 31 August 2011, the Group held 47,500 of the Company’s shares (2010 : 47,500) 21 Share-Based Payments i. On 23 November 2009, the shareholders of ACLDT approved the establishment of the ACLDT Employee Share Option Plan and the rules that govern the operation of the Plan. Minor amendments to the Rules have been approved by shareholders at the Annual General Meeting since. The options are granted under the Plan for no consideration and hold no voting or dividend rights and are not transferable. On 17 January 2011, 1,299,000 share options were granted to certain key management personnel under the Plan to take up ordinary shares at an exercise price of A$0.088 each. The options are exercisable on or before 17 January 2016. ii. Options granted to key management personnel are as follows: Grant Date 17 January 2011 Number 1,299,000 These options vest over a 3-year period and are subject to service conditions such that only a third of the options granted may be exercised on or after the ﬁ rst, second and third anniversary of the grant. Options expire at the earlier of termination of employment or ﬁ ve years after the grant date. Further details of these options are provided in the Directors’ report. The options lapse when a KMP ceases their employment with the Group. During the ﬁ nancial year, no options were vested with key management personnel (2010 : Nil). iii. The Company established the ACLDT Employee Share Option Plan as a long-term incentive scheme to recognise talent and motivate executives to strive for Group performance. Employees are granted options which vest over 3 years, subject to meeting speciﬁ ed service criteria. The options are issued for no consideration and carry no entitlements to voting rights or dividends of the Group but have been listed. The number available to be granted is determined by the joint Normination and Remuneration Committee and is based on performance measures including growth in shareholder return, return on equity, cash earnings, and group EPS growth. Options are forfeited 30 days after the holder ceases to be employed by the Group, unless the Board determines otherwise (this is usually only in the case of retirement, redundancy, death or disablement). The options are issued with an exercise price determined by the joint Normination and Remuneration Committee to be either: (a) a price equal to the Market Price or such higher price as may be determined by the Committee in its absolute discretion; or (b) a price which is set at a discount to the Market Price, the quantum of such discount to be determined by the Committee in its absolute discretion, provided that the maximum discount which may be given in respect of any Option shall not exceed twenty (20) per cent of the Market Price in respect of the that Option. 58 Asian Centre for Liver Diseases and Transplantation Limited For personal use only The Market Price is deﬁ ned as the weighted average closing sale price of the shares recorded on the Australian Securities Exchange (“ASX”) over the last 5 trading days on which sales of the shares were recorded preceding the day on which the Committee resolves to invite the application for an Option. Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) A summary of the movements of all Company options issues is as follows: Number Weighted average exercise price Options outstanding as at 31 August 2010 Granted Forfeited Exercised Expired Options outstanding as at 31 August 2011 Options exercisable as at 31 December 2011: Options exercisable as at 31 December 2010: - 1,299,000 - - - 1,299,000 - - - A$0.088 - - - - - The weighted average remaining contractual life of options outstanding at year end was 4.4 years. The exercise price of outstanding shares at the end of the reporting year was A$0.088. The fair values of options granted were determined using a variation of the binomial option pricing model that takes into account factors speciﬁ c to the share incentive plans, such as the vesting period. The total shareholder return performance condition related to the Scheme, being a market condition, has been incorporated into the measurement by means of actuarial modelling. The following principal assumptions were used in the valuation: Grant date Vesting period ends Share price at date of grant Volatility Option life Dividend yield Risk free investment rate Fair value at grant date Exercise price at date of grant Exercisable from / to 17 January 2011 17 January 2014 A$0.12 69% 5 years 5.830% 2.875% A$0.04 A$0.088 17 January 2012- 17 January 2016 Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements. The life of the options is based on the historical exercise patterns, which may not eventuate in the future. 59 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyNotes to ﬁ nancial statements (Cont’d) 22 Controlled Entities a. Controlled entities consolidated Annual Report 2011 The foreign currency revaluation reserve records exchange differences arising on translation of a foreign controlled subsidiary. Country of incorporation Percentage owned (%) 2011 2010 Asian Centre for Liver Diseases and Transplantation Limited Australia Subsidiary of Asian Centre for Liver Diseases and Transplantation Limited: Asian Centre for Liver Diseases and Transplantation Inc. Subsidiary of Asian Centre for Liver Diseases and Transplantation Inc.: Asian Centre for Liver Diseases and Transplantation Pte Ltd ALC Management Consultancy Pte Ltd Subsidiary of Asian Centre for Liver Diseases and Transplantation Pte. Ltd : Asian Liver Centre Co. Limited Associate of Asian Centre for Liver Diseases and Transplantation Pte. Ltd : PT. Asian Liver Center Indonesia b. Acquisition of controlled entities British Virgin Isles Singapore Singapore Vietnam Indonesia 100 100 100 100 70 50 100 - - - (A) Asian Centre for Liver Diseases and Transplantation Pte Ltd, a subsidiary of Asian Centre for Liver Diseases and Transplantation Ltd, on 10 September 2010, acquired 70% of Asian Liver Centre Co. Limited (“ALC VN”), a newly set up limited liability company incorporated in Vietnam and is a provider of specialist medical consultation and services in hepatology practice and related ﬁ elds. (B) Asian Centre for Liver Diseases and Transplantation Pte Ltd, a subsidiary of Asian Centre for Liver Diseases and Transplantation Ltd, on 8 October 2010, committed to invest in 50% of the shares in PT. Asian Liver Center Indonesia, a newly set up limited liability company incorporated in Indonesia with an intended activity as a provider of specialist medical consultation and services in hepatology practice and related ﬁ elds and referral centre. PT. Asian Liver Center Indonesia was dormant at the reporting date (C) Asian Centre for Liver Diseases and Transplantation Inc., a subsidiary of Asian Centre for Liver Diseases and Transplantation Ltd, on 11 November 2010, incorporated a fully owned subsidiary called ALC Management Consultancy Pte Ltd, a limited liability company in Singapore with an intended activity of providing management and consultancy services in the healthcare industry. ALC Management Consultancy Pte Ltd was dormant at the reporting date. 60 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) Purchase consideration Fair values of assets acquired and liabilities assumed at acquisition date: Cash and cash equivalents Inventories Property, plant and equipment Trade and other payables Current borrowings Consideration paid Cash and cash equivalents Net cash ﬂ ow of acquisition (A) 25,534 573 365,318 (58,370) (92,777) 240,278 (25,534) 214,744 The ﬁ nancial effect of this transaction has been reﬂ ected in the ﬁ nancial statements for the year ended 31 August 2011 based on estimates of the fair value of the assets acquired and the liabilities assumed. Revenue of ALCVN included in the consolidated revenue of the Group since the acquisition on 10 September 2010 amounted to S$31,000. Loss of ALCVN included in the consolidated proﬁ t of the Group since the acquisition date amounted to S$196,000. Prior to the acquisition date, ALCVN had not commenced operations. 23 Leasing Commitments Operating leases Non-cancellable operating leases contracted for but not capitalised in the ﬁ nancial statements: Payable – minimum lease payments Not longer than 1 year Longer than 1 year but not longer than 5 years Consolidated Group 2011 S$ 2010 S$ 164,066 155,921 319,987 371,926 - 371,926 The Group continues to lease space under a pre-existing lease agreement for $37,400 monthly. Contractual terms of the lease expired in June 2011 and there have been no subsequent renewal as of release of these ﬁ nancial statements. Future minimum ﬁ nance lease payments at the end of each reporting period under review were as follows: Minimum lease payments due Within 1 year 1 to 5 years After 5 years $’000 $’000 $’000 Total $’000 31 August 2011 Lease payments Finance charges Net present values 31 August 2010 Lease payments Finance charges Net present values 132,671 (7,007) 125,664 - - - - - - - - - 184,019 (13,365) 170,654 - - - 51,348 (6,358) 44,990 - - - 61 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyNotes to ﬁ nancial statements (Cont’d) 24 Cash Flow Information Annual Report 2011 a Reconciliation of cash ﬂ ow from operations with proﬁ t after income tax Proﬁ t after income tax Adjustment for cost associated with business combinations during the period Non cash ﬂ ows in proﬁ t: Depreciation and amortisation Foreign currency translation Employee share option cost Finance income Finance cost Changes in assets and liabilities: Decrease in trade and other receivables Decrease/(increase) in inventories Increase/(decrease) in trade and other payables (Decrease)/increase in deferred and current tax liabilities Net cash provided by operating activities b Acquisition of entities During the year, the following entities were acquired: Consolidated Group 2011 S$ 2010 S$ 1,541,289 - 231,733 (108,886) 15,469 (12,481) 3,249 - 1,659,483 108,282 302,054 (131,950) 3,608,242 2,339,699 105,000 40,568 (11,581) - - - - 534,424 (6,190) (2,666,637) 123,887 459,170 Asian Centre for Liver Diseases and Transplantation Pte Ltd, a subsidiary of Asian Centre for Liver Diseases and Transplantation Ltd, on 10 September 2010, acquired 70% of Asian Liver Centre Co. Limited (“ALCVN”), a newly set up limited liability company incorporated in Vietnam and is a provider of specialist medical consultation and services in hepatology practice and related ﬁ elds. This was fully funded via cash and has been considered in Note 22 to this ﬁ nancial report. Asian Centre for Liver Diseases and Transplantation Pte Ltd, a subsidiary of Asian Centre for Liver Diseases and Transplantation Ltd, on 8 October 2010, committed to invest in 50% of the shares in PT. Asian Liver Center Indonesia, a newly set up limited liability company incorporated in Indonesia with an intended activity as a provider of specialist medical consultation and services in hepatology practice and related ﬁ elds and referral centre. PT. Asian Liver Center Indonesia was dormant at the reporting date. Asian Centre for Liver Diseases and Transplantation Inc., a subsidiary of Asian Centre for Liver Diseases and Transplantation Ltd, on 11 November 2010, incorporated a fully owned subsidiary called ALC Management Consultancy Pte Ltd, a limited liability company in Singapore with an intended activity of providing management and consultancy services in the healthcare industry. ALC Management Consultancy Pte Ltd was dormant at the reporting date. c Non-cash investing and ﬁ nancing activities Acquisition of medical equipment by means of ﬁ nance lease 208,467 - 2011 S$ 2010 S$ 62 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 Notes to ﬁ nancial statements (Cont’d) 25 Events After the Balance Sheet Date During the ALCVN Members’ Council meetings held on 3 October 2011, all shareholders of ALCVN passed a resolution to issue new shares to Hoa Lam Consultant Investment Ltd to raise its shareholding in ALCVN from 25% to 67.86%. ACLDT’s shareholding in ALCVN will be diluted from 70% to 30% as a result of the proposed capital enlargement. The new shares will be issued upon ﬁ nalisation of a new Joint Venture Agreement (“JVA”). As at the date of this report, the new JVA has yet to be ﬁ nalised. Other than the above, no matters or circumstances have arisen since the end of the ﬁ nancial year which signiﬁ cantly affected or may signiﬁ cantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future ﬁ nancial years. 26 Related Party A number of directors of the Group, or their director-related entities, held positions in other entities during the ﬁ nancial year that result in them having control or signiﬁ cant inﬂ uence over the ﬁ nancial or operating policies of those entities. The terms and conditions of the transactions with directors and their director related entities were no more favourable to the directors and their director related entities than those available, or which might reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis. The aggregate amounts recognised during the year (excluding re-imbursement of expenses incurred on behalf of the Company) relating to directors and their director-related entities were as follows: Disclosure relating to key management personnel are set out in note 6. Other related party transactions Related corporation : Patient referral fees 2011 S$ 2010 S$ 255 9,893 The related corporation is a company in which one of the directors, Dato’ Dr Kai Chah Tan is a director and shareholder. Related party balances Other payables: Old shareholders Non-controlling interest 2011 S$ 2010 S$ 515,200 208,261 921,029 - The above balance payable to the old shareholders of Asian Centre for Liver Diseases and Transplantation Inc, who are also directors and shareholders of ACLDT, is a result of the acquisition of the Company by ACLDT. The balance payable to non-controlling interest represents loan made by Hoa Lam Consultant Investment Ltd to ALCVN. The amounts owing has no ﬁ xed term of repayment, is interest free and is not due within one year as disclosed in note 17. Other than the related party information disclosed elsewhere in the ﬁ nancial statements, the above are signiﬁ cant related party transactions entered into by Asian Centre for Liver Diseases and Transplantation Pte Ltd, a wholly owned subsidiary of ACLDT, with related companies at agreed rates. 63 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) Annual Report 2011 27 Operating Segments AASB 8 requires operating segments to be identiﬁ ed on the basis of internal reports about components of the Consolidated Group that are regularly reviewed by the chief operating decision maker, the Board of directors (chief operating decision makers), in order to allocate resources to the segment and to assess its performance. The Consolidated Group has identiﬁ ed its operating segments to be as follows based on distinct operational activities: (i) Provision of medical consultation and services in the hepatology and related ﬁ elds; and (ii) Corporate activities. This is the basis on which internal reports are provided to the Board for assessing performance and determining the allocation of resources within the Consolidated Group. Unless stated otherwise, all amounts reported to the Board, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual ﬁ nancial statements of the Group. The Consolidated Group operates primarily in one business, namely the provision of medical consultation and services in the hepatology and related ﬁ elds. Details of the performance of each of these operating segments for the ﬁ nancial periods ended 31 August 2010 and 31 August 2011 are set out below: (i) Segment Performance Segment revenue Medical consultation Corporate Total 2011 S$ 2010 S$ 2011 S$ 2010 S$ 2011 S$ 2010 S$ External sales revenue 20,762,783 20,491,819 - - 20,762,783 20,491,819 Inter segment sales - - 1,600,000 3,000,000 1,600,000 3,000,000 Total segment revenue 20,762,783 20,491,819 1,600,000 3,000,000 22,362,783 23,491,819 Reconciliation of segment revenue to Group revenue: Inter-segment eliminations Total Group revenue (1,600,000) (3,000,000) 20,762,783 20,491,819 Segment net proﬁ t/(loss) before tax 2,100,472 3,054,253 (210,370) (220,590) 1,890,102 2,833,663 (ii) Segment assets Medical consultation Corporate Total 2011 S$ 2010 S$ 2011 S$ 2010 S$ 2011 S$ 2010 S$ Segment assets 8,671,892 6,584,151 15,579,253 15,700,035 24,251,145 22,284,186 Reconciliation of segment assets to Group assets: Inter-segment eliminations Unallocated assets intangibles Total Group assets (16,888,998) (16,054,558) 266,123 266,123 7,628,270 6,495,751 Segment asset increases in the year/period Capital expenditure 550,011 Acquisitions 424,077 133,886 - 974,088 133,886 - - - - 550,011 133,886 15,433,758 424,077 15,433,758 15,433,758 974,088 15,567,644 64 Asian Centre for Liver Diseases and Transplantation Limited For personal use only(iii) Segment liabilities Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) Medical consultation Corporate Total 2011 S$ 2010 S$ 2011 S$ 2010 S$ 2011 S$ 2010 S$ Segment liabilities (4,653,720) (3,729,841) (1,475,280) (1,544,574) (6,129,000) (5,274,415) Reconciliation of segment liabilities to Group liabilities: Inter-segment eliminations Total Group liabilities (iv) Revenue by geographical location Revenue attributable to external customers is disclosed below, based on the location of where the revenue was derived: Singapore Outside Singapore Total revenue (v) Assets by geographical location Assets by geographical location Australia Vietnam Singapore Total assets 1,257,777 592,771 (4,871,223) (4,681,644) Consolidated Group 2011 S$ 2010 S$ 20,731,812 20,491,819 30,971 - 20,762,783 20,491,819 Consolidated Group 2011 S$ 2010 S$ 145,482 517,026 266,263 6,965,762 6,229,488 7,628,270 6,495,751 (vi) Major Customers The Group is not reliant on any one major customer to whom it provides its products or services. 65 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyNotes to ﬁ nancial statements (Cont’d) Annual Report 2011 28 Financial risk management policies The Group’s ﬁ nancial instruments consist mainly of cash at bank and accounts receivable and payable. The totals for each category of ﬁ nancial instruments, measured in accordance with AASB 119 as detailed in the accounting policies to the ﬁ nancial statements, are as follows. Financial assets Cash and cash equivalents Trade and other receivables Total ﬁ nancial assets Financial liabilities Trade and other payables Other non-current payables Finance lease Total ﬁ nancial liabilities Total net ﬁ nancial assets Consolidated Group 2011 S$ 2010 S$ 5,175,475 2,966,419 1,050,968 2,710,452 6,226,443 5,676,871 (3,616,224) (3,267,631) (723,311) (921,029) (170,654) - (4,510,189) (4,188,660) 1,716,254 1,488,211 66 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyFinancial risk management policies The Board is responsible for monitoring and managing ﬁ nancial risk exposures of the Group. Speciﬁ c ﬁ nancial risk exposures and management Annual Report 2011 Notes to ﬁ nancial statements (Cont’d) The main risk the Group is exposed to include foreign exchange risk, credit risk, liquidity risk and treasury management risk. (a) Foreign exchange risk Exposure to foreign exchange risk may result in the fair value or future cash ﬂ ows of a ﬁ nancial instrument ﬂ uctuating due to movement in foreign exchange rates of currencies in which the Group holds ﬁ nancial instruments which are other than the functional currency of the Group which is the Singapore dollar. (b) Risk management The Group’s transactions are predominantly in it functional currency which is the Singapore dollar. The amount of asset and liability held in foreign currency is not considered material to the Group and hence does not hedge these asset or liability. (c) Foreign exchange risk A sensitivity analysis of the impact of foreign exchange risk is not shown as it is not considered material to the Group at the reporting date. (d) Credit risk exposures Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on ﬁ nancial assets of the entity which have been recognised in the statement of ﬁ nancial position, is the carrying amount, net of any provision of doubtful debts. Credit risk is managed through the maintenance of procedures which ensure to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. No receivables are considered past due or impaired. (e) Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difﬁ culty in settling its debts or otherwise meeting its obligations related to ﬁ nancial liabilities. All ﬁ nancial assets and liabilities as disclosed above have maturities within one year for the 31 August 2011 ﬁ nancial year with the exception of the non-current other payables and non-current portion of the ﬁ nance lease. The Group manages liquidity risk by monitoring forecast cash ﬂ ows. (f) Treasury risk management The Board meets on a regular basis to analyse ﬁ nancial risk exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The Board’s overall risk management strategy seeks to assist the Consolidated Group in meeting its ﬁ nancial targets, whilst maintaining the effects on ﬁ nancial performance. Risk is also minimised through investing surplus funds in ﬁ nancial institutions that maintain a high credit rating or in entities that the Board has otherwise cleared as being ﬁ nancially sound. (g) Net fair values of ﬁ nancial assets and liabilities Fair values are amounts at which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arms length transaction. The carrying values of ﬁ nancial instruments approximate their fair values. 67 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Notes to ﬁ nancial statements (Cont’d) Annual Report 2011 29 Parent Company Information Parent entity Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Total net assets Equity Issued capital Reserves Foreign currency revaluation reserve Total equity Financial performance (Loss)/proﬁ t for the year/period Other comprehensive income Total comprehensive (loss)/income 2011 S$ 2010 S$ 145,482 2,803,557 2,949,039 266,263 13,352,900 13,619,163 (191,992) (189,874) - (191,992) 2,757,047 13,352,900 (10,534,470) (61,383) 2,757,047 (9,956,593) 9,731 (9,946,862) - (189,874) 13,429,289 13,352,900 147,503 (71,114) 13,429,289 1,279,411 (71,114) 1,208,297 Included in the loss for the year is S$10,549,343 (2010 : Nil) write down of investment in subsidiary to the net asset of the Group. The write down relates to the reverse takeover exercise of ACLDT in 2009 and does not have an impact on the Group’s consolidated results for the current or prior year. The parent entity has no contingent liabilities, contractual commitments or guarantees in relation to its subsidiary entities. 68 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 30 Company Details The registered ofﬁ ce of the Company is: 25 Peel Street Adelaide SA 5000 The principal place of business is: 6A Napier Road Gleneagles Hospital Annexe Block #02-37 Singapore 258500 Singapore branch: 3 Mount Elizabeth Road, #16-06 Mount Elizabeth Medical Centre, Singapore 228510 Vietnam centre: 210 Nguyen Thi Minh Khai Street, Nguyen Cu Trinh Ward, District 1, Ho Chi Minh City, Vietnam Malaysia centre: Mawar Renal Medical Centre No. 71 Jalan Rasah, 70300 Seremban, Negeri Sembilan Darul Khusus, Malaysia. 69 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyDirectors’ declaration Annual Report 2011 The directors of Company declare that: (a) the ﬁ nancial statements and notes, as set out on pages 35 to 69, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the ﬁ nancial position as at 31 August 2011 and of the performance for the year ended on that date of the Consolidated Group; and (ii) complying with Accounting Standards. (b) the Executive director and Group ﬁ nancial controller have declared that: (i) the ﬁ nancial records of the Company for the ﬁ nancial year have been properly maintained in accordance with s286 of the Corporations Act 2001; (ii) The ﬁ nancial statements and notes for the ﬁ nancial year comply with the Accounting Standards; and (iii) The ﬁ nancial statements and notes for the ﬁ nancial year give a true and fair view. (c) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. (d) complying with International Financial Reporting Standards as disclosed in Note 1 to the ﬁ nancial statements; This declaration is made in accordance with a resolution of the Board of Directors. Dato’ Dr Kai Chah Tan Dato’ Dr Kai Chah Tan Director 3 November 2011 70 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF ASIAN CENTRE FOR LIVER DISEASES AND TRANSPLANTATION LIMITED Report on the ﬁ nancial report We have audited the accompanying ﬁ nancial report of Asian Centre for Liver Diseases and Transplantation Limited (the “Company”), which comprises the consolidated statement of ﬁ nancial position as at 31 August 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash ﬂ ows for the year then ended, notes comprising a summary of signiﬁ cant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the ﬁ nancial year. Directors’ responsibility for the ﬁ nancial report The Directors of the Company are responsible for the preparation of the ﬁ nancial report that gives a true and fair view of the ﬁ nancial report in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes such internal controls as the Directors determine are necessary to enable the preparation of the ﬁ nancial report to be free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the ﬁ nancial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the ﬁ nancial report, comprising the ﬁ nancial statements and notes, complies with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the ﬁ nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the ﬁ nancial report is free from material misstatement. Grant Thornton Audit Pty Ltd a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Australia Limited is a member ﬁ rm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member ﬁ rms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation 71 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF ASIAN CENTRE FOR LIVER DISEASES AND TRANSPLANTATION LIMITED Cont Auditor’s responsibility Cont An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁ nancial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the ﬁ nancial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the ﬁ nancial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the ﬁ nancial report. We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s opinion In our opinion, a b the ﬁ nancial report of Asian Centre for Liver Diseases and Transplantation Limited is in accordance with the Corporations Act 2001, including: i giving a true and fair view of the consolidated entity’s ﬁ nancial position as at 31 August 2011 and of its performance for the year ended on that date; and ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and the ﬁ nancial report also complies with International Financial Reporting Standards as disclosed in the notes to the ﬁ nancial statements. Report on the remuneration report We have audited the remuneration report included in pages 27 to 31 of the directors’ report for the year ended 31 August 2011. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. 72 Asian Centre for Liver Diseases and Transplantation Limited For personal use only Annual Report 2011 AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF ASIAN CENTRE FOR LIVER DISEASES AND TRANSPLANTATION LIMITED Cont Auditor’s opinion on the remuneration report In our opinion, the remuneration report of Asian Centre for Liver Diseases and Transplantation Limited for the year ended 31 August 2011, complies with section 300A of the Corporations Act 2001. GRANT THORNTON AUDIT PTY LTD Chartered Accountants S J Gray Director – Audit & Assurance Adelaide, 3 November 2011 73 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 Shareholder Information The shareholder information set out below was applicable as at 26 October 2011. A. Distribution of holders of equity securities 1 1,001 5,001 - - - 10,001 - 1,000 5,000 10,000 100,000 100,001 and over Ordinary Shares Employee Options 182 62 49 87 32 412 - - - - 2 2 There were 237 holders of less than marketable parcel of ordinary shares. The percentage of the total holdings of the twenty largest holders of ordinary shares was 96.88 per cent. B. Equity security holders The names of the twenty largest holders of quoted equity securities are listed below: Name Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins HSBC Custody Nominees (Australia) Limited Philips Securities Pte Ltd (Client Account) Citicorp Nominees Pty Limited Mr Ronnie Tan Siew Bin Mr Wing Kwan Teh Dr Kang Hoe Lee Mr Ravindran Govindan HSBC Custody Nominees (Australia) Limited - A/C 2 Mr Robert John Wood & Mrs Stella Agnes Wood (Bob & Stella Wood S/F A/C) Mr Harry Vui Khiun Lee Mr Robert John Wood & Mrs Stella Agnes Wood (Bob & Stella Wood Super A/C) Twenty Twenty Investments Pty Ltd (T Clare Super Fund Account) Mr Barry William Quaill & Mrs Pamela Louise Quaill (BW&PLQUAILL Investment A/C) Mr John Philip Joshua Mr Jonathan Pinshaw & Mrs Renee Pinshaw (Pinshaw Super Fund A/C) Boon Hwa Koh Nefco Nominees Pty Ltd Jyh Gang James Koh Ordinary shares Number held Percentage 102,298,250 21,324,600 18,369,870 11,667,438 8,885,792 8,499,930 4,084,090 2,500,040 699,483 650,000 590,415 561,915 500,000 444,204 380,000 245,000 230,000 220,000 220,000 200,000 54.28 11.32 9.75 6.19 4.72 4.51 2.17 1.33 0.37 0.34 0.31 0.30 0.27 0.24 0.20 0.13 0.12 0.12 0.12 0.11 74 Asian Centre for Liver Diseases and Transplantation Limited For personal use only C. Substantial holders Substantial holders in the company are set out below: Annual Report 2011 Ordinary shareholders Number held Percentage Dato’ Dr Kai Chah Tan Ms Pamela Anne Jenkins HSBC Custody Nominees (Australia) Limited Philips Securities Pte Ltd (Client Account) D. Voting rights Please refer note 19. E. On-market buy back There are no current on-market buy back. 102,298,250 21,324,600 18,369,870 11,667,438 54.28 11.32 9.75 6.19 75 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyAnnual Report 2011 This page has been intentionally left blank. 76 Asian Centre for Liver Diseases and Transplantation Limited For personal use onlyACLDT 2011 Inside Cover FA.ai 1 11/5/11 2:49 PM ACLDT 2011 Inside Cover FA.ai 1 11/5/11 2:49 PM C M Y CM MY CY CMY K For personal use onlyFor personal use only

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