CREATING A
LASTING LEGACY
IN HEALTHCARE
Annual Report 2018
1
Dedicated to healing
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CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 1
Asian American Medical Group Limited
ABN NUMBER 42 091 559 125
Annual Report for the year ended 31 August 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 TABLE OF CONTENTS
03
Corporate directory
04
Corporate profile
06
Key milestones
08
Chairman’s message
11
14
18
22
28
37
39
Profile of Board of Directors
Profile of Doctors and Key Management
Financial review
Corporate governance statement
Directors’ Report
Auditor’s Independence Declaration
Consolidated statement of profit or loss and
other comprehensive income
40
Consolidated statement of financial position
41
42
43
77
78
81
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder information
CREATING A LASTING LEGACY IN HEALTHCARE
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3
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Dato’ Dr Kai Chah Tan
(Executive Chairman)
Mr Evgeny Tugolukov
(Non-Executive Director)
Mr Heng Boo Fong
(Independent Non-Executive Director)
Mr Paul Vui Yung Lee
(Independent Non-Executive Director)
Ms Jeslyn Jacques Wee Kian Leong
(Independent Non-Executive Director)
Mr Stuart L Dean
(Independent Non-Executive Director)
AUDIT COMMITTEE
Mr Heng Boo Fong (Chairman)
Mr Paul Vui Yung Lee
Ms Jeslyn Jacques Wee Kian Leong
COMPANY SECRETARY
Mr Dario Nazzari
REGISTERED OFFICE
25 Peel Street
Adelaide SA 5000
Tel: +61 8 8110 0999
Fax: +61 8 8110 0900
Website: www.aamg.co
AUDITORS
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
Adelaide SA 5000
Tel: +61 8 8372 6666
Fax: +61 8 8372 6677
BANKERS
DBS Bank Ltd
12 Marina Boulevard
DBS Asia Central, Marina Bay Financial Centre
Tower 3
Singapore 018982
NOMINATION AND REMUNERATION COMMITTEE
Mr Heng Boo Fong (Chairman)
Mr Paul Vui Yung Lee
Mr Evgeny Tugolukov
Westpac Banking Corporation
114 William 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 Official
List of the Australian Securities Exchange Limited.
ASX Code : AJJ
ASIAN AMERICAN MEDICAL GROUP LIMITED
ANNUAL REPORT 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 04
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CREATING A LASTING LEGACY IN HEALTHCARE
CORPORATE PROFILE
Asian American Medical Group Limited (“AAMG” or the “Group”), based in Singapore, has been listed on the
Australian Securities Exchange (“ASX”) since September 2009. The Group’s operations include the Asian
American Liver Centre Pte Ltd (“AALC”), established 1994 in Singapore, and Asian American Radiation &
Oncology Pte Ltd (“AARO”), established in 2015.
The Group entered into a strategic collaboration in October 2012 with United States (“U.S.”) based US$19-
billion integrated global health enterprise University of Pittsburgh Medical Centre (“UPMC”). UPMC ranked No.
14 in the U.S. News & World Report Honor Roll of American’s Best Hospitals, is affiliated with the University of
Pittsburgh Schools of the Health Sciences and is a pioneer in the field of transplantation. This collaboration has
enhanced AAMG’s clinical capabilities through shared protocols, rigorous quality standards and technology
and also created a platform for AAMG to expand into other countries in Asia such as Malaysia and Myanmar.
AALC, one of Asia’s foremost liver centres, is led by renowned hepatobiliary expert and liver transplant
surgeon, Dato’ Dr Kai Chah Tan (“Dr KC Tan”), who helped start the Liver Transplant Programme at King’s
College Hospital in London, United Kingdom (“U.K.”), and pioneered the highly successful Living Donor Liver
Transplantation (“LDLT”) Programme in Singapore. In 2014, AALC began conducting surgical procedures at
iHEAL Medical Centre in Kuala Lumpur, Malaysia. Following the setting up of our subsidiary Gold Bell Asia
American Healthcare Ventures Company Limited (“GBAA”) in Myanmar, AALC began conducting consultancy
and surgical procedures at Grand Hantha International Hospital in Yangon from 2017.
AARO offers radiation oncology treatment services, consultancy and management services and is spearheaded
by Dr Daniel Yat Harn Tan. Based in Singapore, AARO will drive expansion into the growing radiotherapy
and oncology segment in the overseas market, at a time where there is a shortage of modern radiotherapy
treatment centres.
In March 2018, AAMG completed the acquisition of Hippocrates Development Sdn Bhd (“HDSB”). HDSB owns
a 5-acre block of land in Iskandar Puteri, in the Southern Malaysian state of Johor, which has been earmarked
to be developed into medical hub, which will include an international cancer centre to be built in memory of
the Late Johor Prince Almarhum Tunku Abdul Jalil Iskandar ibni Sultan Ibrahim Ismail.
ASIAN AMERICAN MEDICAL GROUP LIMITED
ANNUAL REPORT 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 05
OUR
VISION
To develop AAMG
into an international
healthcare brand
through organic
growth and
geographical
expansion.
OUR
MISSION
To deliver excellent multi-
disciplinary medical care
through clinical excellence,
technological innovation
and patient-centric care.
Excellence
We always strive to excel and take pride in all that we do.
OUR
VALUES
Innovation
Integrity
We practise the most up-to-date clinical techniques, employ
the latest technology and keep abreast of advancements in
medical treatment.
Honesty and integrity are fundamental to our organisation.
We take pride in our ethical conduct and comply strictly with
legal requirements.
Transparency
We carefully communicate to our patients what their care will
entail so that they clearly understand the medical process.
We regularly publish and present our clinical outcomes.
Compassion
Patients are our top priority, and we work hard to meet their
diverse needs. Empathy and compassion are integral to our
mission to provide the best quality care.
KEY BUSINESS SEGMENTS
LIVER
RADIATION AND
ONCOLOGY
AAMG’s liver segment operates under AALC and is headquartered at
Gleneagles Hospital in Singapore. Today, AALC is one of Asia’s foremost
liver centres dedicated to the treatment of all liver, pancreas and bile duct
diseases in adults and children, and has expanded to Malaysia and Myanmar.
AARO is a sub-specialised radiation and oncology division of AAMG. AARO
provides radiation therapy treatment as well as management and advisory
services to radiation oncology units in Asia. It is currently focused on
expanding across Singapore, Myanmar and has collaboration agreements
in Russia.
HEALTHCARE
MANAGEMENT
AND CONSULTANCY
Leveraging on the rich pool of experience, knowledge and network of
AAMG’s key management team, the Group’s healthcare management and
consultancy segment aims to source and identify potential healthcare-
related projects that AAMG can participate in.
HEALTHCARE
REAL ESTATE
This newly created segment is managed under AAMG’s subsidiary Million
Health Ventures Pte Ltd (“MHV”), which owns HDSB in Malaysia. HDSB is
undertaking the development of a cancer centre on its 5-acre land in Johor,
Malaysia.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
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CREATING A LASTING LEGACY IN HEALTHCARE
KEY MILESTONES
1990
-
1997
2002
-
2013
1990
1991
1992
1993
1994
1995
1997
The world’s first heart-and-liver transplant performed by Dr KC Tan
and Professor Sir Magdi Yacoub.
First split-liver transplant in U.K. by Dr KC Tan.
First auxiliary liver transplant for liver failure in the U.K. by Dr KC Tan.
First paediatric living donor liver transplant (“LDLT”) in the U.K. and
Second auxiliary liver transplant for metabolic disease in the world
by Dr KC Tan.
AALC, formerly known as Asian Centre for Liver Diseases &
Transplantation (“ACLDT”), is established.
First paediatric LDLT in Southeast Asia.
Second split-liver transplant in Asia.
2002
2004 - 2006
2007
2009
2010
2011
2012
2013
First successful adult LDLT in Southeast Asia.
Performed first liver transplants for patients from Pakistan,
Sri Lanka, Myanmar, Bangladesh and The United Arab
Emirates in our centre.
Successfully performed the 100th LDLT.
Listed on the ASX, stock code AJJ.
First healthcare company in Singapore to use remote
patient monitoring devices for the Intensive Care Unit.
Established its first satellite clinic, which incorporated
telemedicine services, in Ho Chi Minh City, Vietnam.
Entered into a Management Services Agreement with
Parkway Hospitals to co-manage Gleneagles Hospital’s liver
diseases clinical program.
Signed Service Agreement with UPMC, a top Global
Healthcare Enterprise based in Pittsburgh, U.S..
Successfully performed the 200th LDLT.
Signed Consultancy Agreement with iHEAL Medical
Services to practise at iHEAL Medical Centre in Kuala
Lumpur, Malaysia.
Established Haematopoietic Stem Cell Transplant Centre
which offers treatment for other blood related diseases.
Signed Service Agreement with Vinmec International
Hospital to set up a liver clinic in Hanoi, Vietnam.
Successful placement of 21,000,000 new shares to RusSing
Med Holdings.
Creation of new brand and corporate identity, renamed
Asian American Medical Group (“AAMG”).
2014
2014
Signed a Joint Venture Agreement with Pinlon Hospital and 30th
Street Clinic in Yangon, Myanmar to establish the first premier
liver centre based in Pinlon Hospital to provide treatment for liver
diseases.
ASIAN AMERICAN MEDICAL GROUP LIMITED
ANNUAL REPORT 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
2015
-
2018
CREATING A LASTING LEGACY IN HEALTHCARE
07
07
2015
Successful placement of 30,000,000 new shares to a group of
sophisticated investors.
Set up a Radiation Oncology division, Asian American Radiation
Oncology Pte Ltd (subsequently changed to Asian American
Radiation & Oncology Pte Ltd (“AARO”)), led by Dr Daniel Yat Harn
Tan.
Signed a Memorandum of Understanding (“MOU”) between AARO
and Hwa Koon Engineering, a specialist contractor in the healthcare
industry, focusing on turnkey project design and building services
with expertise in radiation shielding and bunker construction to
explore collaborations in Asia.
2016
Successful placement of 57,000,000 new shares to a group of
sophisticated investors.
Opened the Pinlon Gastrointestinal & Liver Centre (“PGLC”) in
Yangon, Myanmar.
Signed a Service Agreement between AARO and Japan’s Jisenkai
Medical Corporation Aizawa Hospital, following an earlier MOU.
2017
Partnered Golden Land United Health Group Company Limited to
explore healthcare opportunities in Myanmar through Gold Bell Asia
American Healthcare Ventures Co., Ltd.
Signed a Joint Venture Agreement with Grand Hantha Company
Limited through Gold Bell Asia American Healthcare Ventures
Co., Ltd to provide clinical services to Grand Hantha International
Hospital.
Entered into a Service Agreement with Hippocrates Development
Sdn Bhd (“HDSB”), to provide advice and project leadership for
HDSB’s development of a premium cancer treatment centre in
Johor, Malaysia.
Entered into a Conditional Agreement to subscribe for 19,408,163
new shares or 95.1% in HDSB.
2018
On 6 March 2018, MHV completed the acquisition of HDSB and
40,000,000 new ordinary shares were issued to the His Majesty
Sultan Ibrahim Ibni Almarhum Sultan Iskandar, the Sultan of Johor
as part satisfaction of amount due to His Majesty as land vendor.
On 1 April 2018, His Majesty Sultan Ibrahim Ibni Almarhum Sultan
Iskandar, the Sultan of Johor, officially announced the launch of the
Tunku Laksamana Johor Cancer Centre (“TLJCC”).
ASIAN AMERICAN MEDICAL GROUP LIMITED
ANNUAL REPORT 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
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CHAIRMAN’S MESSAGE
Dear Shareholders,
BUSINESS REVIEW
On behalf of the Board of Directors of Asian
American Medical Group (“AAMG” or the “Group”),
I am pleased to present the Annual Report for the
financial year ended 31 August 2018 (“FY2018”).
This scorecard captures our return to profitability in
the year under review and the significant progress
in our regionalisation efforts, especially with regards
to a proposed integrated cancer treatment centre in
Iskandar, Johor, Malaysia (“the Johor Project”).
The private medical sector in Singapore is still
grappling with challenges such as high healthcare
costs, stiff regional competition as medical hubs
spring up across Asia and the weakening of most
Southeast Asian currencies - in particular the
Indonesian Rupiah and the Malaysian Ringgit –
against the Singapore dollar. The wider availability
of medical expertise across Asia has resulted in
lower patient traffic from Southeast Asia and the
Middle East to Singapore.
Our financial recovery during the year in review
validates our strategy of focusing on our medical
specialisations and activities, our discipline
in
cost containment, and our tenacity in pursuing
partnerships
in countries from Myanmar and
Malaysia to Russia and beyond.
Dato’ Dr Kai Chah Tan
Executive Chairman
ASIAN AMERICAN MEDICAL GROUP LIMITED
ANNUAL REPORT 2018
Apart from cost management and quality control,
we have been responding to these challenges by
strategically expanding into specialised radiation
and oncology, healthcare management and
consultancy and forging key partnerships in the
region. I am pleased to report that our efforts
continue to bear fruit. Despite the challenging
operating environment, our revenue rose 15.2% to
S$17.5 million this year from S$15.2 million a year
ago as overall patient transactions edged up 2.5%
to 7,079 from 6,903 in FY2017.
FINANCIAL PERFORMANCE
Liver Segment
The Asian American Liver Centre (“AALC”), our
wholly-owned one-stop provider of
liver and
hepatobiliary care and treatment, remained our
major revenue contributor. Full-year turnover came
to S$12.7 million, even as patient transactions for
this segment declined 0.6% to 6,494 in FY2018
from 6,530 last year. Our net loss in this segment
narrowed to S$0.7 million due to a cost reduction
exercise in January 2018.
Although Singaporeans have become more cost-
conscious in recent times, liver disease is a prevalent
issue in the city-state; the National Organ Transplant
Unit recently stated that the waiting list for liver
transplants has risen from nine in 2007 to 52 as of
mid-2018.
remains challenging
We carried out four Living Donor Liver Transplants
(“LDLTs”) this year, two fewer than in 2017. While
this decline indicates that the financial cost of
LDLTs
for Singaporeans,
we remain confident in AALC’s reputation and
capabilities. The number of liver dialyses performed
by AALC increased 67.8% during the year in review,
underscoring our status as a trusted medical
provider.
Radiation and Oncology
The Group’s subsidiary Asian American Radiation &
Oncology (“AARO”), which was established in 2015,
continues to grow steadily under the leadership of
Dr Daniel Yat Harn Tan and remains a major revenue
driver for us. We completed 585 patient transactions
this year, an increase of 56.8% from 373 the previous
year.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 During the year in review, AARO also welcomed
its new Consultant Radiation Oncologist, Dr David
Boon Harn Tan, who brings to the AAMG team a
decade’s worth of experience with the National
Cancer Centre Singapore. Moreover, I am pleased
to inform you that AARO’s clinical presence now
spans five locations in Singapore, in addition to its
existing body of overseas project management and
consultancy services in Myanmar and Russia.
Management and Consultancy Segment
The revenue for our management and consultancy
segment surged to S$1.8 million in FY2018 from
S$30,000 in FY2017 due to professional services
rendered for the development of the Johor Project.
Other income also increased 100.0% to S$0.4 million
in FY2018 from S$0.2 million in FY2017 due to the
sale of two ambulances. The segment recorded a
net profit of S$1.1 million in FY2018, a positive swing
from last year’s net loss of S$1.5 million.
Overall, the Group achieved a net profit after tax
of S$2.1 million in FY2018 across all segments,
reversing a loss of S$3.0 million a year ago. This
included a deferred tax benefit of S$0.2 million and
a gain on purchase of S$1.6 million after factoring
in one-off expenses amounting to S$0.7 million for
professional fees for our potential listing migration.
Without these one-off items, our net profit for
FY2018 would have been S$1.2 million.
EXPANSION STRATEGY
Hippocrates Development Sdn Bhd &
The Johor Project
On 6 March 2018, we completed the acquisition
of Hippocrates Development Sdn Bhd (“HDSB”),
an investment holding company incorporated in
Malaysia. HDSB is the land owner and developer
of the Johor Project, also known as the Tunku
Laksamana Johor Cancer Centre (“TLJCC”).
Following the transaction, AAMG holds 95.1%
interest of HDSB’s enlarged share capital and His
Majesty, the Sultan of Johor, Sultan Ibrahim Ismail
ibni Almarhum Sultan Iskandar Al-Haj, became a
major shareholder of AAMG.
In line with AAMG’s strategic initiatives, TLJCC
will be built on HDSB’s major asset, a five-acre
freehold parcel of land in Iskandar Puteri, located
in the Southern Malaysian state of Johor. During
the Project Launch on 1 April 2018, His Majesty said
that the comprehensive specialist cancer centre
will initiate a number of “first” in Malaysia and the
region and is an initiative by the Johor Royal Family
to bring advanced cancer treatment to Johor.
The Johor Project will be a private, purpose-built
facility for cancer treatment, research and education.
It will feature state-of-the-art cancer diagnostic and
treatment facilities which will not only change the
operating environment for oncology in Southeast
Asia but also have a significant impact on the
Group’s overall performance.
09
Phase 1 of the centre will have a gross development
value of approximately RM300 million (US$77
million) and built-up area of approximately 14,000
square meters (150,696 square feet), offering an
ambulatory cancer facility comprising 30 day beds.
At full capacity, Phase 1 of the centre will be able to
treat up to 7,000 patients a year.
Rosatom Healthcare
Subsequent to the financial year, the Group signed
a Memorandum of Understanding (“MoU”) on 19
September 2018 with Russian nuclear medicine
integrator, Rosatom Healthcare (“Rosatom”), to
develop a nuclear medical centre alongside TLJCC
in Iskandar Puteri.
Possible features of this centre include a cyclotron
and radiochemical complex, as well as departments
for radionuclide diagnostics and electron beam
treatment. This development will help enhance
TLJCC’s treatment offerings and make it into a
premier cancer treatment destination.
Both of these ventures illustrate our ability to
attract international strategic partners of significant
stature, as well as our determination to offer
a differentiated value proposition as we chart
new growth opportunities. These areas will be
the combined focus of our team going forward:
achieving excellence in delivering medical outcomes
in our areas of specialisation while seeking to create
or enhance value for all stakeholders.
TEAM UPDATE
We welcome to our Board Mr Stuart Dean, who was
appointed as Independent Non-Executive Director
of AAMG on 1 May 2018. He is an experienced
corporate advisor whose career spans more than
35 years in General Electric Inc.’s business functions
in the United States and Asia; including sales,
marketing, product management, capital markets
and business development.
We are grateful to Mr Kong Meng Ang, who stepped
down as Non-Executive Director on 5 February 2018
to focus other pursuits, for his service to the Group.
We wish him the best in his future endeavours.
APPRECIATION
On behalf of the team, I wish to convey my
appreciation to all shareholders for your loyalty and
support, and to AAMG’s management team and
staff for their hard work during the year.
Dato’ Dr Kai Chah Tan
Executive Chairman
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 Tunku Laksamana Johor Cancer Centre
Project Launch
The Tunku Laksamana Johor Cancer Centre (“TLJCC” or the “Johor Project”) was officially launched by His
Majesty Sultan Ibrahim Ibni Almarhum Sultan Iskandar, the Sultan of Johor, on 1 April 2018. TLJCC is being
established in memory of Almarhum Tunku Abdul Jalil Iskandar Ibni Sultan Ibrahim, Tunku Laksamana Johor,
who died from liver cancer in 2015 at age 25. The Prince was His Majesty’s third son and was known for his
philanthropic nature.
Led by AAMG, TLJCC will be a private, advanced purpose-built facility for cancer treatment, set up in the
heart of Iskandar.
“Tunku Jalil often went out of the way to visit, encourage and
inspire other cancer patients and survivors. He promised to
fight for their cause and ease the burden of cancer patients.
My family and I will continue what Tunku Jalil had hoped to
accomplish – to ensure that his legacy lives on,”
His Majesty said.
ASIAN AMERICAN MEDICAL GROUP LIMITED
ANNUAL REPORT 2018
11
PROFILE OF
BOARD OF DIRECTORS
Dato’ Dr Kai Chah Tan
Executive Chairman
D.P.M.P., MBBS (MAL), FRCS (EDIN), FAMS
Mr Evgeny Tugolukov
Non-Executive Director
B Econ
Mr Evgeny Tugolukov holds a degree
in
Economics and Enterprise Management from the
Ural State Technical University (“USTU”) in Russia.
He is the President and Founder of Strongbow
Investments Pte Ltd (“Strongbow”) which was
founded to create more linkages between Russia
and Singapore/Southeast Asia to create new
business visions and ideas as well as strengthen
the bilateral cultural communications.
Mr Tugolukov has over 20 years of rich
entrepreneurial background in various businesses.
Under his management, several sizeable holdings
were created, including one of Russia’s largest
power machine-building
companies, PJSC
EMAlliance. He is currently involved in industries
such as agriculture, healthcare and real estate
development. Having established a successful
track record in the business field, Mr Tugolukov
became an Honorary Business Representative of
Enterprise Singapore in Russia.
Mr Tugolukov was appointed as Non-Executive
Director of AAMG on 3 June 2013 and is also a
member of the Nomination and Remuneration
Committee.
Dato’ Dr Kai Chah Tan serves as the Executive Chairman of
AAMG. He is also the Executive Chairman of Asian American
Liver Centre Pte Ltd (“AALC”) and the Director of Asian
American Medical Group Inc. (“AAMG Inc”), Asian American
Radiation & Oncology Pte Ltd (“AARO”), Asian American
Medical Group Pte Ltd (“AAMGPL”), Million Health Ventures
Pte Ltd (“MHV”), Asian American Oncology Management
Sdn Bhd (“AAOM”) and Hippocrates Development Sdn Bhd
(“HDSB”), all of which are subsidiaries of AAMG. Dr Tan is the
Lead Surgeon (Hepatobiliary/Transplant) of AALC.
Dr Tan graduated from the University of Malaya in 1978 before
obtaining his Surgical Fellowship from the Royal College of
Surgeons, Edinburgh in 1982. From 1984 to 1987, he received
advanced training in paediatric surgery in Manchester
and Southampton, U.K. and further training in paediatric
hepatobiliary surgery and liver transplant surgery at King’s
College Hospital (“KCH”), London. Dr Tan was Consultant
Liver Surgeon at KCH and taught surgery at the University of
London from 1988 to 1994.
Pioneering various liver transplant procedures in the U.K. for
both adults and paediatric patients from the first ‘split-liver’
transplant and the first auxiliary liver graft to five liver-kidney
and two heart-liver transplants, Dr Tan has received many
accolades from his peers, patients and their families alike.
Having completed more than 400 liver transplant procedures
in the U.K. under his belt, Dr Tan set up his practice, the Asian
Centre for Liver Diseases & Transplantation (“ACLDT”), in
Gleneagles Hospital, Singapore in 1994. Dr Tan was also
appointed the Director of the Liver Transplant Programme,
National University Hospital (“NUH”), Singapore from 1995 to
2002.
In April 2002, the first successful adult-adult LDLT in Southeast
Asia was performed in Gleneagles Hospital, Singapore. Dr
Tan and his team have successfully performed more than 200
LDLTs - the only private centre in Southeast Asia to reach this
historic 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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 12
PROFILE OF
BOARD OF DIRECTORS
Mr Heng Boo Fong
Independent Non-Executive Director
B Acc (Hons)
Mr Paul Vui Yung Lee
Independent Non-Executive Director
B Bus (MIS)
Mr Paul Vui Yung Lee has over 20 years’ experience
in business development, quality control and
cost management. He has been serving on a few
boards of companies in Malaysia and Australia. He
has diverse experience across a broad range of
industries and international businesses that includes
public utilities infrastructure construction, building
materials, property development, and oil palm
plantations. With a Business Degree from Edith
Cowan University in Perth and strong analytical
skills, he has aided companies in both identifying
and implementing strategic growth opportunities.
Mr Lee was appointed to the Board on 31 January
2013. He is a member of the Nomination and
Remuneration Committee and Audit Committee.
Mr Heng Boo Fong is an Independent Non-Executive
Director and is also the Chairman of the Audit
Committee and Nomination and Remuneration
Committee of AAMG.
Mr Fong studied at the University of Singapore
(now known as the National University of Singapore,
“NUS”) and graduated in 1973 with an Honours
Degree in Accountancy. He has over 44 years of
working experience in auditing, finance, business
development and corporate governance.
He was with the Auditor-General’s Office, Singapore,
from 1975 to 1993. He held the appointment of
Assistant Auditor-General when he left the Auditor-
General’s Office. He was also General Manager
(Corporate Development) of a listed company in
Singapore as well as the Chief Financial Officer of
a listed company in Australia. His other professional
includes membership of Audit
experience
Committees of Statutory Boards and Advisory
Committees of the School of Accountancy of
Nanyang Technological University, Singapore and
Ngee Ann Polytechnic, Singapore. Mr Fong was
a Fellow Member of the Institute of Singapore
Chartered Accountants. He was a council member
of the then Institute of Certified Public Accountants
of Singapore (“ICPAS”) (now known as the Institute
of Singapore Chartered Accountants (“ISCA”)), and
ICPAS awarded him a silver medal in 1999.
Mr Fong is also presently an Independent Director
of four companies listed on the SGX-ST.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 13
PROFILE OF
BOARD OF DIRECTORS
Ms Jeslyn Jacques Wee Kian Leong
Independent Non-Executive Director
Mr Stuart L Dean
Independent Non-Executive Director
BA Econ & PSC, M.B.A.
Ms Jeslyn Leong was a Fellow of the Association of
Chartered Certified Accountants (United Kingdom)
with 25 years of extensive experience in the field
of corporate finance, which included tenure as a
Financial Accountant of Teys Australia Pty Ltd,
Australia’s leading beef processor and exporter.
Ms Leong joined AAMG as an Independent Non-
Executive Director on 1 January 2012. She is
currently an Accountant with Orrcon Steel, a wholly-
owned subsidiary of BlueScope Steel Limited
(listed on ASX), a leading Australian distributor and
manufacturer of steel, tubes and pipes. In this role,
she obtained extensive experience in manufacturing
management.
Ms Leong is a member of the Audit Committee.
Mr Stuart Dean is an experienced senior advisor
and director whose professional career spans over
35 years within General Electric, Inc’s business
functions in the United States and Asia; including
sales, marketing, product management, capital
markets and business development. As the former
President and Chief Executive Officer of General
Electric International Inc. (“GEII”) in Kuala Lumpur,
Malaysia, he oversaw all of GEII’s operations within
the ASEAN region. He retired from GE in April 2015
and joined ASEAN Advisory Pte Ltd (a subsidiary of
ZICO Holdings Inc.) as Senior Advisor.
Mr Dean holds various directorships and advisory
positions at Air Asia Bhd, ASEAN Advisory Pte
Ltd, Duke University Trinity College, Harvard
Business School Asia, Junior Achievement Malaysia,
Junior Achievement Asia, Malaysian Investment
Development Authority and Orbis ASEAN.
Mr Dean was appointed to the Board on 1 May 2018
as an Independent Non- Executive Director.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 14
PROFILE OF
DOCTORS AND KEY MANAGEMENT
Dr Kang Hoe Lee
Respiratory Physician & Intensivist
(Critical Care & Liver Transplant)
MA (U.K.), MBBChir (U.K.), MRCP (U.K.), FRCP (EDIN),
FAMS (SIN), EDIC (EUR)
Dr Kang Hoe Lee graduated from University of
Cambridge, U.K. He was a scholar at Jesus College,
Cambridge and a recipient of the Duckworth Prize.
He also received support from Kuok Foundation,
Malaysia for his medical studies. Dr Lee interned
with Professor Sir Roy Calne at Addenbrooke’s
Hospital and finished his general medicine training at
Cambridge before coming to Singapore. In 1990, he
joined the Department of Medicine at the National
University Hospital (“NUH”), Singapore. Dr Lee
completed his Fellowship in Critical Care Medicine
at the UPMC in the U.S. from 1993 to 1995, and was
awarded Fellow of the Year in 1994. From 1994 to
1995, Dr Lee performed research with Professor
Michael Pinsky at UPMC on acute lung injury.
On his return to Singapore, Dr Lee joined NUS as a
Lecturer in Medicine and was promoted to Associate
Professor. He was also the Medical Director of the
ICU at NUH, where he started the liver dialysis
programme in 2000.
Dr Lee was with NUS until 2005 when he joined
Gleneagles Hospital, Singapore as Director of the
ICU. Since then, he has been working together
with AALC. Dr Lee has expanded the liver dialysis
programme to include other devices and also
helped set up the dedicated liver ICU where he has
been active in the management of liver failure and
liver transplant patients.
Dr Lee was one of the founding members of the
Society of Intensive Care Medicine and was also
a previous member of the Specialist Training
Committee
Intensive Care Medicine and
Respiratory Medicine.
for
He has published extensively in the areas of critical
care and liver transplant, and has also been involved
in various research protocols together with scientists
at NUS and A*STAR in Singapore.
Dr Daniel Yat Harn Tan
Radiation Oncologist & Medical Director
(Stereotactic Radiosurgery (SRS/SBRT),
Brain and Spine, Breast and Prostate Cancers)
MBBS (SIN), FRCR (Clinical Oncology, U.K.),
FAMS (Radiation Oncology)
Dr Daniel Yat Harn Tan is consultant radiation
oncologist and medical director of AARO, the
radiotherapy and oncology division of AAMG.
Before joining AARO, he was consultant radiation
oncologist at the National Cancer Centre Singapore
(“NCCS”) and clinical lecturer at the Yong Loo Lin
School of Medicine at NUS. His clinical interest is
in stereotactic radiosurgery and stereotactic body
radiation therapy (“SRS/SBRT”), and he specialises
in the management of the central nervous system,
prostate and breast cancers.
After completing his MBBS at the NUS in 2002, he
went on to obtain the FRCR in Clinical Oncology
in 2011 at the Royal College of Radiologists, U.K..
He then underwent training with a focus on
neuro-oncology at international premier centres,
which included Proton Therapy at University of
Pennsylvania’s Roberts Proton Therapy Center, U.S.,
Spine Radiosurgery at Princess Margaret Hospital
and Sunnybrook’s Odette Cancer Centre, Toronto,
and Advanced Radiation Technologies at Tokyo
Metropolitan Komagome Hospital in Japan.
Together with his mentors, he was instrumental in
the development of the Novalis Brain Stereotactic
Radiosurgery Program at NCCS and subsequently
developed
the Novalis Spine Stereotactic
Radiosurgery Program after his return from his
Health Manpower Development Programme
(“HMDP”) Award training.
His research involves the application of SRS and
SBRT in benign and malignant tumours of the brain
and spine, as well as in oligometastatic and prostate
cancers. His research have been presented at major
international conferences, and he is frequently
invited to lecture on these subjects in regional
meetings. He has written and published on the
topics of neuro-oncology, SRS and SBRT.
Apart from his Clinical Practice, Dr Tan also leads
and manages several local and overseas Cancer
Centres in the establishment of good clinical and
operational standards so as to expand access to
quality cancer care. In collaboration with renowned
American institutions, these centres have received
certifications after passing onsite audits. Dr Tan
earned an MBA with specialization in Healthcare
Management from NUS Business School as he
believes that the good management effects good
medicine.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
PROFILE OF
DOCTORS AND KEY MANAGEMENT
15
Dr Jonathan Yi Hui Teh
Radiation Oncologist
(Stereotactic Radiosurgery (SRS/SBRT), Pediatric,
Urologic, Gastrointestinal Cancers and Sarcoma)
MBBS (SIN), FRCR (Clinical Oncology, U.K.),
FAMS (Radiation Oncology)
Dr David Boon Harn Tan
Radiation Oncologist
(Stereotactic Radiosurgery (SRS/SBRT),
Gynaecological, Gastrointestinal & Lung Cancers)
MBBS (SIN), FRCR (Clinical Oncology, U.K.),
FAMS (Radiation Oncology)
the
Dr Jonathan Yi Hui Teh is a consultant radiation
oncologist at AARO,
radiotherapy and
oncology division of AAMG. Prior to joining AARO,
he was a consultant at NCCS, where he had served
in various roles since 2006. He specialises in
genitourinary and gastrointestinal cancers, as well
as bone and soft tissue sarcomas and paediatric
cancers.
After completing his MBBS at NUS in 2002, Dr Teh
commenced a Radiation Oncology residency at
NCCS in 2007. He received the Singhealth HMDP
Award for Advanced Training in Clinical Oncology
in 2009 and was an Honorary Clinical Fellow in
the University College Hospital London Oncology
department from 2009 to 2011. He was also active
in the London Sarcoma Service, providing patient
care and participating in clinical trials. In 2011, he
received the Fellowship of the Royal College of
Radiologists (“FRCR U.K.”) in Clinical Oncology.
Upon returning to Singapore, Dr Teh was admitted
as a Fellow of the Academy of Medicine of
(“FAMS”) Chapter of Radiation
Singapore’s
Oncology and commenced work as a Consultant
Radiation Oncologist at NCCS. In 2012, he joined
the NCCS Blood Transfusion Committee until July
2017 and also received the Singhealth Doctor’s
Long Service Award.
Dr Teh’s research interests include advanced
radiotherapy for prostate cancer treatment. He
was the Principal Investigator of a Phase II Trial in
Stereotactic Ablative Body Radiotherapy for Low-
Intermediate Risk Prostate Cancer from 2013 to
2017, which was Southeast Asia’s first trial of this
non-invasive technique.
research has been presented at
Dr Teh’s
international conferences, and he has also been
invited to speak on these subjects in regional
meetings. He has written and published extensively
on the subject of sarcoma treatment.
Dr David Tan is a Consultant Radiation Oncologist at
AARO. His clinical expertise is in the management of
gynaecological, gastrointestinal, hepato-biliary and
lung cancers, and in the use of Stereotactic Body
Radiotherapy (“SBRT”) and Brachytherapy. Prior to
joining AARO, Dr Tan was a consultant at the National
Cancer Centre, Singapore, where he served for 10
years and pioneered the liver and pancreas SBRT
programmes. He was also previously adjunct assistant
professor at the Duke-NUS Graduate Medical School
and a clinical lecturer at the Nanyang Polytechnic
School of Radiation Therapy.
Dr Tan graduated from the NUS in 2005 with a MBBS
and commenced training in Radiation Oncology in 2007.
He was awarded a Health and Manpower Development
Award by the Singapore Ministry of Health in 2011
to undergo a Fellowship in Clinical Oncology in the
U.K. There, he obtained advanced training in general
oncology and honed his stereotactic and subspecialty
expertise. He was an active member of the Stereotactic
Cyberknife team and trained under renowned expert
in the fields of gynaecological, GI and lung cancers. He
subsequently obtained the FRCR in Clinical Oncology
in 2013 and was admitted as a Fellow of the Academy
of Medicine, Singapore (“FAMS”) in Radiation Oncology
in 2014.
Dr Tan currently serves as an executive committee
member in the Singapore Radiological Society (“SRS”)
where he holds the office of honorary treasurer. He
remains involved in clinical research and has published
widely on his areas of clinical expertise in high impact
oncology journals.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
16
PROFILE OF
DOCTORS AND KEY MANAGEMENT
Mr Cherinjit Kumar Shori
Group Chief Operating Officer
B Acc, PGDip Marketing & Healthcare
Mr Meng Yau Yeoh
Group Chief Financial Officer
FCA (S’pore), FCCA (U.K.), CA (M’sia)
Mr Cherinjit Kumar Shori has held the position of
Group Chief Operating Officer at AAMG since 2009.
He is responsible for the company’s marketing,
business development and operations.
Before joining AAMG, Mr Shori was the Group
Vice President/Deputy Chief Marketing Officer
for Parkway Pantai where he served for 10 years’
in strategic marketing, business development and
regional expansion to increase the market share for
its group of hospitals in Singapore.
In total, Mr Shori has more than 20 years’ experience
in the healthcare and hospitality industries covering
business development and marketing in various
companies including Sun Cruises and Sembawang
Leisure (a subsidiary of Sembawang Corporation).
He holds a Bachelor of Accountancy degree from
the Nanyang Technological University in Singapore
as well as an Graduate Diploma in Marketing
from the Singapore Institute of Management and
a Certificate
in Healthcare Management from
Georgetown University, U.S.
Mr Shori has also been
invited to speak at
international conferences such as Internationale
Tourismus-Börse Berlin (ITB Berlin) Conference,
where he shared his experience in the future of
global medical tourism.
Mr Meng Yau Yeoh obtained his professional
accounting qualification from the Association of
Chartered Certified Accountants (United Kingdom)
(“ACCA”) in 1994 and has over 22 years’ experience
in auditing, finance and business development.
He started his career at the then, KPMG Peat Marwick
in 1995 and left as an Audit Senior in 1998. After
spending four years in the Big 4 audit firm, Mr Yeoh
spent the decade spanning 1999 to 2009 working in
senior positions in several listed and privately-owned
companies involved in a wide range of industries
ranging from property development, construction,
information technology and investment holdings to
service and hospitality in Singapore, Malaysia and
Australia. During that period, he was involved in
two successful main board Initial Public Offerings in
Singapore as well as listing exercises and trade sales
in Germany and U.K.
Mr Yeoh is a Fellow Member of the Institute of
Singapore Chartered Accountants
(“ISCA”),
Fellow Member of the ACCA and a Chartered
Accountant registered with the Malaysian Institute
joined AAMG as
of Accountants (“MIA”). He
Group Financial Controller in December 2009 and
subsequently appointed as Group Chief Financial
Officer in March 2013.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 PROFILE OF
DOCTORS AND KEY MANAGEMENT
17
Angela Choong
Chief Commercial Officer
CA (S’pore), FCMA (U.K.)
Ms Angela Choong
joined AAMG as Chief
Commercial Officer in August 2015 to head the
Commercial Division, responsible for the project
and commercial management.
Before joining AAMG, Ms Choong held the positions
of finance director and regional financial controller
with a European MNC in manufacturing. She has
over 25 years’ of regional business partnering
experience with a strong track record of finance,
risk management, management of new factory
construction projects, and
implementation of
business
improvement projects across China,
Taiwan, Hong Kong and Southeast Asia.
Ms Choong is a fellow member of Chartered Institute
of Management Accountants United Kingdom
(“CIMA”) and member of the Institute of Singapore
Chartered Accountants (“ISCA”).
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 18
FINANCIAL REVIEW
Year ended 31 August
Revenue
Other income
Gain on purchase, relating to acquisition of HDSB
2018
S$'000
17,477
405
1,561
Direct costs and operating expenses
(17,548)
(18,255)
Share of results of associates
Profit/(Loss) before tax
Taxation
Profit/(Loss) after taxation
Profit/(Loss) attributable to:
Members of the parent entity
Non-controlling interest
2
1,897
170
2,067
1,951
116
2,067
-
(2,881)
(150)
(3,031)
(3,093)
62
(3,031)
2017
Changes
S$'000
15,167
207
-
%
15.2
95.7
n.m
(3.9)
n.m
n.m
n.m
n.m
n.m
87.1
n.m
Total share capital and reserves
15,437
9,605
60.7
Basic earning/(loss) per share
Net asset value per share
Net tangible asset value per share
n.m – not meaningful
2018
2017
S Cents
S Cents
0.62
5.19
5.19
(1.04)
3.23
3.23
The Group’s revenue rose to S$17.5 million for the financial year ended 31 August 2018 (“FY2018”), representing
an increase of 15.2% or S$2.3 million from S$15.2 million for the financial year ended 31 August 2017 (“FY2017”),
due mainly to significant improvements in the radiation and oncology and healthcare management and
consultancy segments.
Our radiation and oncology segment recorded higher patient volume in FY2018 with the addition of a Radiation
Oncologist during the financial year, resulting in revenue increasing 53.6% to S$3.0 million in FY2018.
Revenue for the healthcare management and consultancy segment increased to S$1.8 million in FY2018,
due to fees for preliminary work performed in relation to the development of the integrated cancer centre
in Johor, Malaysia. Following that, the Group completed the acquisition of Hippocrates Development Sdn
Bhd (“HDSB”), the land owner and developer of the Johor Project, on 6 March 2018, signalling its foray into
healthcare real estate and the expansion of its radiation and oncology segment into Malaysia.
The Group recorded a 2.5% rise in overall patient transactions to 7,079 from 6,903 in FY2017. The corresponding
Net Profit after Tax (“Net Profit”) was S$2.1 million in FY2018, after accounting for a deferred tax benefit of
S$0.2 million, reversing a Net Loss after Tax (“Net Loss”) of S$3.0 million in FY2017. The Net Profit included a
gain on purchase of S$1.6 million relating to the acquisition of HDSB, as well as one-off expenses amounting to
S$0.7 million relating to professional fees incurred for the Group’s exploration of a potential listing migration
from ASX to the SGX. Without these one-off items, the Group’s Net Profit would have been S$1.2 million.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 19
FINANCIAL REVIEW
LIVER SEGMENT
Revenue for AALC, the Group’s wholly-owned subsidiary operating in the liver segment, was S$12.7 million in
FY2018, a decline of 3.6% or S$0.5 million from S$13.2 million in FY2017. Patient transactions for this segment
declined marginally by 0.6% with 6,494 patient transactions in FY2018 compared to 6,530 in FY2017.
Although an increase is seen in the professional fees and number of liver dialysis of 9.3% and 67.8% in FY2018,
it was offset by the decrease in other activities such as surgeries, fibroscans and medication sales of 25.8%,
16.8% and 18.9% respectively. There were fewer LDLT performed during the year in review, with four completed
in FY2018 compared to six in FY2017.
Direct costs decreased by 4.7% or S$0.4 million to S$8.2 million from S$8.6 million in line with the lower
revenue. The marginally higher reduction in direct costs compared to revenue was due to a higher volume
of sales mix from clinical procedures with higher Gross Profit Margin (“GPM”). As a result, the overall GPM
increased to 35.4% in FY2018 from 34.5% in FY2017.
Despite the lower revenue, Net Loss narrowed by 86.3% or S$0.7 million due mainly to the cost reduction
exercise implemented in January 2018. Although the Group increased its headcount to 31 in FY2018 from 28
in FY2017, employee benefits expenses – AALC’s main cost component (constituting approximately 79% of
total expenses) – decreased by 9.8% or S$0.4 million to S$3.7 million in FY2018 from S$4.1 million in FY2017
as a result of reductions to salaries and bonuses.
The liver segment accounted for 72.7% of the Group’s revenue in FY2018 compared to 86.9% in FY2017.
Although it remains the Group’s largest revenue contributor, its share of contributions has declined due to the
growing contribution from other segments.
RADIATION AND ONCOLOGY SEGMENT
Revenue for the Group’s radiation and oncology unit, AARO, continued its growth momentum with a 53.6%
or S$1.0 million increase to S$3.0 million in FY2018 from S$2.0 million in FY2017. This was driven by the
56.8% increase in patient transactions to 585 from 373 in FY2017. AARO increased its number of doctors
to three with the recruitment of another Radiation Oncologist, Dr David Tan, in March 2018. In addition,
AARO expanded its clinical presence to five locations in Singapore. Provision of clinical services to patients
accounted for 96.0% of AARO’s total revenue, with the balance from overseas project management and
consultancy services carried out in Russia and Myanmar.
Direct costs increased by 58.3% or S$0.7 million to S$1.9 million in FY2018 from S$1.2 million in FY2017, in line
with the increase in revenue. The marginally higher increase in direct costs compared to revenue was due to
a higher volume of sales mix from clinical procedures with lower GPM. As a result, the overall GPM declined
slightly to 36.9% in FY2018 from 41.0% in FY2017.
Other operating expenses increased by 50.0% or S$0.3 million to S$0.9 million in FY2018 from S$0.6 million
in FY2017 as a result of the expanding operations. AARO’s headcount increased from four to seven to cater
for the larger operations, resulting in AARO’s employment cost increasing from S$0.5 million to S$0.6 million
in FY2018. Operating lease increased to S$72,000 in FY2018, up S$69,000 from S$3,000 in FY2017, as AARO
started new clinics in four more locations: Mount Alvernia Hospital, Mount Elizabeth Novena Hospital, Farrer
Park Hospital and Concord International Hospital.
As a result of the above, Net Profit increased by 100.0% or S$0.2 million to S$0.4 million in FY2018 from S$0.2
million in FY2017, after recording deferred tax benefit of S$0.2 million. AARO remains the Group’s second-
largest revenue contributor, accounting for 17.3% (2017: 13.0%) of the Group’s revenue in FY2018.
MANAGEMENT AND CONSULTANCY SEGMENT
Revenue for the management and consultancy segment increased significantly to S$1.8 million in FY2018
from S$30,000 in FY2017. The increase was attributable to professional services rendered to HDSB in relation
to the development of the Johor Project prior to HDSB’s acquisition. Professional services rendered to HDSB
post-acquisition have been eliminated at the Group level.
Other income increased to S$0.4 million in FY2018, up 100.0% or S$0.2 million from S$0.2 million in FY2017,
due mainly to the sale of two ambulances which brought in a one-off net trading profit of S$0.2 million. Net
Profit from the management and consultancy segment came to S$1.1 million in FY2018, reversing a net loss
of S$1.5 million in FY2017.
The Group’s other operating expenses declined to S$1.0 million in FY2018, down by 35.0% or S$0.6 million
from S$1.6 million in FY2017, largely attributable to unrealised exchange gain arising from the weakening of
AUD against SGD on foreign-denominated intercompany loans, amounting to S$0.7 million.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 20
FINANCIAL REVIEW
As a result of the above, the Group recognised a Net Profit of S$2.1 million in FY2018, reversing a net loss of
S$3.0 million in FY2017.
REVENUE
EBITDA AND PROFIT/(LOSS) AFTER TAX
Revenue
(S$'000)
20,354
12,322
17,083
17,477
15,167
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
25000
20000
15000
10000
5000
0
1500
1000
500
0
-500
-1000
-1500
-2000
-2500
-3000
-3500
2015
2018
2014
2016
2017
SHARE CAPITAL AND RESERVES
EPS AND NAV
EBITDA (S$'000)
(Loss)/profit (S$'000)
2018
2016
2017
20000
15000
10000
2015
2014
5000
0
6
5
4
3
2
1
0
-1
-2
2014
2015
2016
2017
2018
Share capital and reserves (S$'000)
REVIEW OF FINANCIAL POSITION
Net asset value
per share (S cents)
Basic (Loss)/Earnings
per share (S cents)
Net assets for the Group increased by 60.7% or S$5.8 million to S$15.4 million in FY2018 from S$9.6 million in
FY2017. This was due to Net Profit for the year of S$2.1 million and an increase in share capital as a result of
the issuance of 40 million new shares; partially offset by the decrease in foreign currency translation reserve of
S$1.0 million, due to the weakening of AUD against SGD.
Significant changes during the year under review were:
a)
b)
c)
d)
e)
f)
Decrease in cash and cash equivalents by 2.7%, or S$0.3 million, to S$8.9 million in FY2018 (FY2017:
S$9.2 million) due to the engagement of professional services for the development of the Johor Project;
Increase in property, plant and equipment by S$8.9 million to S$9.0 million in FY2018 (FY2017: S$69,000)
relating to the land and building for the development of the Johor Project, which has been consolidated
from HDSB at the Group level;
Increase in investment in joint venture by S$69,000 in FY2018 (FY2017: nil) due to the incorporation of
All-Star American Medical Specialists (Myanmar) Limited (“AAMS”);
Increase in deferred tax asset by S$0.2 million in FY2018 (FY2017: nil) due to recognition of unutilised
tax losses at entity’s level;
Decrease in trade and other receivables by 54.0%, or S$3.3 million, to S$2.8 million in FY2018 (FY2017:
S$6.1 million) due to a shorter collection period for trade receivables, despite the 15.2% increase in
revenue from improved collection;
Decrease in trade and other payables by 5.0%, or S$0.3 million, to S$5.6 million in FY2018 (FY2017:
S$5.9 million) due to a shorter payment period for trade payables, despite the 16.2% increase in direct
costs.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 21
FINANCIAL REVIEW
Given the above, Net Asset Value (“NAV”) per share rose by S 2.0 cents to S 5.2 cents in FY2018 from S 3.2
cents in FY2017.
AALC- TRANSACTION BY
PATIENTS NATIONALITY % FY 2018
AALC- TRANSACTION BY
PATIENTS NATIONALITY % FY 2017
.
I
%
7
4
A
D
O
B
M
A
C
&
M
A
N
T
E
V
I
UAE 28.4%
2 . 7 %
S I A 2
E
D O N
I N
P H I L I P P I N E S 3 . 4 %
OTHERS 12.0%
RUSSIAN 0.8%
O
T
H
E
R
S
7
.
1
%
SIA 4.7
%
S
O
U
T
H A
%
5
.
3
1
E
R
O
P
A
G
N
I
S
M
%
Y
A
S I A 1 3 . 3
M O N G O L I A N 2 . 2 %
A
L
UAE 27.3%
O
G
N
O
M
%
L I A 1. 7
YSIA 16.2%
ALA
M
S
I
N
G
A
P
O
R
E
1
0
.
8
%
I N D O N E
4 . 1 %
S I A 2
%
S 2.5
%
4
.
3
A
I
D
O
B
M
A
C
&
M
A
N
T
E
I
V
E
PIN
HILIP
P
MYANMAR 1.1%
PATIENT NATIONALITY MIX FOR LIVER SEGMENT
The UAE region still forms a substantial part of the revenue contribution for our liver segment in FY2018, a
percentage of 28% of the entire patient population as compared to 27% in FY2017. The revenue contribution
from these UAE patients amounted to 65% of AALC’s revenue, a slight drop from 71% in FY2017. The changes
in the proportion of patient origin reflects AAMG’s effort in bringing in patients from other regions such as
India and Burmese.
Patients from Indonesia, Malaysia and Singapore also forms a major part of our patient profile, accounting for
23%, 16% and 11% respectively, with a collectively contribution of 50%, a steady trend as compared to 51% in
FY2017.
AARO - TRANSACTION BY PATIENTS
NATIONALITY % FY 2018
AARO - TRANSACTION BY PATIENTS
NATIONALITY % FY 2017
OTHERS
21.2%
OTHERS
29.6%
INDONESIA
8.6%
SINGAPORE
51.9%
SINGAPORE
47.5%
VIETNAM &
CAMBODIA
6.1%
%
E 0 .7
A
U
MALAYSIA
11.5%
INDONESIA
8.0%
VIE T N A M 2.5 %
MALAYSIA
12.4%
PATIENT NATIONALITY MIX FOR RADIATION AND ONCOLOGY SEGMENT
Singaporeans remain as the major revenue contributor for the radiation and oncology segment, follow up
by Malaysian and Indonesian, accounting for 52%, 12% and 9% of the total patient population in FY2018
respectively. This total of 73% is an increase as compared to a collectively proportion of 68% in FY2017. The
patient revenue from these countries form 65% of the total AARO’s revenue in FY2018.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
22
CORPORATE GOVERNANCE STATEMENT
The Board of Asian American Medical Group Limited (“AAMG”) seeks to practise 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 AAMG 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.aamg.co.
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 AAMG, 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 Executive Director and implement the running of the general
operations and financial 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.aamg.co.
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 senior management.
The Board is responsible for:
•
Setting the strategic direction of the Company and establishing goals to ensure these strategic
objectives are met;
• Appointing the senior management, setting objectives for the senior management and reviewing
performance against those objectives, ensuring appropriate policies and procedures are in place for
recruitment, training, remuneration and succession planning;
• Monitoring financial performance including approval of the annual and half-yearly financial reports
•
and liaison with the Company’s auditors;
Ensuring that risks facing the Company and its controlled entities have been identified ensuring that
appropriate and adequate controls, monitoring and reporting mechanisms are in place;
• Receiving detailed briefings from senior management on a regular basis during the year;
• Approving the Board of Directors of subsidiary companies; and
•
Ensuring the Company complies with the law and conforms to the highest standards of financial and
ethical behavior.
AAMG 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 Executive 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 qualifications 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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 23
CORPORATE GOVERNANCE STATEMENT
DIRECTORS IN OFFICE
At the date of this statement, the following directors are considered independent by the Board:
Name
Mr Heng Boo Fong
Mr Paul Vui Yung Lee
Ms Jeslyn Jacques Wee Kian Leong
Mr Stuart L Dean
Position
Independent
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Yes
Yes
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 four of AAMG’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 officer 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 officer 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
and AAMG does comply with that recommendation.
Where additional skills are considered necessary for specific 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 fill a casual vacancy or as an addition to the current Board, holds office 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 programme is available to directors that include one-on-one sessions with members of the
senior management team.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 24
CORPORATE GOVERNANCE STATEMENT
EVALUATION OF SENIOR EXECUTIVES
Senior executives, including the Group Chief Operating Officer, Group Chief Financial Officer or Chief
Commercial Officer have a formal job description and letter of appointment describing their term of office,
duties, rights, responsibilities and entitlements upon termination.
The performance of senior executives is reviewed annually before the budgets are approved for the next
financial year. This process is a formal one with the executive’s performance assessed against Company,
division and personal benchmarks by the 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 financial 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 confidence 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
conflicts 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 Conflict of Interest Policy
that clarifies the processes for directors and senior executives to determine and disclose when a conflict of
interest exists.
DIVERSITY POLICY
The Company values diversity and recognises the benefits it can bring to the organisation’s ability to achieve
its goals. Our recruitment processes encourage the development of diversity in our workplace, bearing in
mind that employees must have the required skills to be successful in their positions.
In accordance with this policy and ASX Corporate Governance Principles, the Board has established the
following objectives in relation to gender diversity. We currently meet our objectives but will continue to
monitor and improve on our objectives to be in line with our Company’s needs and direction. A written
diversity policy has been developed by the Board to ensure gender diversity.
Number of women employees in the whole organisation
Number of women in senior executive positions
Number of women on the Board
SHAREHOLDING AND TRADING
Objective
Actual
Number
18
2
2
%
67
33
33
Number
20
1
1
%
65
17
17
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
financial 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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 25
CORPORATE GOVERNANCE STATEMENT
SAFEGUARD INTEGRITY
The Board has established an Audit Committee (“AC”) comprised of the three independent 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 the meetings.
The members of the AC are:
• Mr Heng Boo Fong (Chairman)
• Mr Paul Vui Yung Lee
• Ms Jeslyn Jacques Wee Kian Leong
The qualifications 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 AC is to assist the Board to fulfill its responsibilities in relation to the identification of the areas
of significant business risks and the monitoring of the following:
Effective management of financial and other business risks;
•
• Reliable management reporting;
• Compliance with laws and regulations in respect to financial reporting;
• Maintenance of effective and efficient 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 AC 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 AC provides the Board with additional assurances regarding the reliability of financial information for
inclusion in the financial statements.
The committee is chaired by an independent chair who is not the chairman of the Board.
TIMELY AND BALANCED DISCLOSURE
The Board recognises the need to comply with ASX Listing Rule 3.1 concerning continuous disclosure.
At each meeting of directors, consideration is given as to whether notice of material information concerning
the Company, including its financial 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 performance 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.aamg.co.
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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 26
CORPORATE GOVERNANCE STATEMENT
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 AC.
The Board is responsible for ensuring the risks and opportunities are identified 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 identified 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 financial and non-financial nature; and
The establishment of committees to report on specific risk as identified.
•
INTERNAL RISK MANAGEMENT SYSTEM COMPLIANCE
Management is accountable to the Board to ensure that operating efficiency, 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 significant risks
faced by the Company.
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 shareholders.
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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 27
CORPORATE GOVERNANCE STATEMENT
NOMINATION AND REMUNERATION
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (“NRC”) comprised of three non-executive directors. The
members of the NRC are:
• Mr Heng Boo Fong (Chairman)
• Mr Paul Vui Yung Lee
• Mr Evgeny Tugolukov
The qualifications 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 NRC 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 Officer,
Group Chief Financial Officer, Chief Commercial Officer and senior executives; and
• Responsible for considering general remuneration policies and practices, recruitment and termination
policies and superannuation requirements.
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 confident 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 financial commitments against shares issued under the executive securities plan and
has requested that they take sufficient professional advice in relation to their individual financial position.
There are no retirement schemes or retirement benefits other than statutory benefits for non-executive
directors.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 28
DIRECTORS’ REPORT
The directors present their report, together with the financial statements of the Asian American Medical
Group Limited (“AAMG” or the “Group”) for the year ended 31 August 2018.
DIRECTORS
The directors of the Group at any time during or since the end of the financial year are as set out below.
Dato’ Dr Kai Chah Tan (Executive Chairman)
Mr Evgeny Tugolukov (Non-Executive Director)
Mr Heng Boo Fong (Independent Non-Executive Director)
Mr Paul Vui Yung Lee (Independent Non-Executive Director)
Ms Jeslyn Jacques Wee Kian Leong (Independent Non-Executive Director)
Mr Stuart L Dean (Independent Non-Executive Director) (appointed on 1 May 2018)
Mr Kong Meng Ang (Non-Executive Director) (resigned on 5 February 2018)
The skills, experience, expertise and tenure of each director are disclosed in the profile of directors section
within the Annual Report.
Below is the profile of a director who is no longer in office:
Mr Kong Meng Ang FCA (S’pore), FCCA (UK) (resigned 5 February 2018)
Mr Kong Meng Ang is the founder and Partner at Ang & Co. PAC, an independent accounting and business
advisory firm established in 1980 and has 40 years of experience in finance and accounting.
Mr Ang graduated from the University of Singapore (now known as the National University of Singapore,
“NUS”) with a Bachelor of Accountancy in 1976. Mr Ang is a fellow and practising member of the Institute of
Singapore Chartered Accountants (“ISCA”) and a fellow member of the Association of Chartered Certified
Accountants (United Kingdom) (“ACCA”). Mr Ang is also an accredited tax advisor (Income Tax, GST) from
the Singapore Institute of Accredited Tax Professionals.
PRINCIPAL ACTIVITIES
The principal activity of AAMG and its controlled entities are that of provision of specialised medical services
for liver diseases and transplantation, radiation and oncology, healthcare project management and consultancy
services and healthcare real estate.
There has been no change in the principal activity of the Group during the financial year other than the
expansion into the healthcare real estate segment.
COMPANY SECRETARY
The following person held the position of company secretary at the end of the financial year:
Mr Dario Nazzari
Mr Nazzari has a Bachelor of Commerce, a Diploma in Financial Planning and has more than 20 years professional
experience. He is a Chartered Accountant and a member of the Institute of Chartered Accountants.
REVIEW AND RESULTS OF OPERATIONS
Details of the operations of AAMG during the year, the financial position and the strategies and prospects
for the future years can be found in the Chairman’s message found on pages 8 and 9 and Financial Review
section on pages 18 to 21, which forms part of this Annual Report.
DIRECTORS’ MEETINGS
The following table sets out the number of director’s meetings (including meetings of Committees of
directors) held during the financial year and the number of meetings attended by each director (while they
were a director or committee member). During the financial year, six (6) Board meetings, two (2) Audit
Committee meetings and two (2) Nomination and Remuneration Committee meetings were held.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 29
DIRECTORS’ REPORT
Directors’
Meetings
Audit Committee
Meetings
Dato’ Dr Kai Chah Tan
Mr Evgeny Tugolukov
Mr Kong Meng Ang^
Mr Heng Boo Fong
Mr Paul Vui Yung Lee
Ms Jeslyn Jacques Wee Kian Leong
Mr Stuart L Dean*
^ Mr Kong Meng Ang resigned on 5 February 2018
* Mr Stuart L Dean was appointed on 1 May 2018
Number
Eligible
to attend
6
6
4
6
6
6
-
DIRECTORS’ INTEREST
Number
Attended
6
5
4
6
5
6
-
Number
Eligible
to attend
-
-
-
2
2
2
-
Number
Attended
-
-
-
2
1
2
-
Nomination and
Remuneration
Committee Meetings
Number
Eligible to
attend
-
2
-
2
2
-
-
Number
Attended
-
2
-
2
2
-
-
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
Mr Evgeny Tugolukov
Mr Heng Boo Fong
Mr Paul Vui Yung Lee
Ms Jeslyn Jacques Wee Kian Leong
Mr Stuart L Dean
^ Indirect interest through RusSing Med Holdings Pte Ltd
None of the directors have share options in the Company.
DIVIDENDS PAID OR RECOMMENDED
Number of shares
115,798,180
^ 21,000,000
-
-
-
-
No interim or final dividend has been paid or recommended by the directors for the financial year ended
31 August 2018 (2017 : Nil).
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 20 October 2017, MHV entered into a conditional agreement to subscribe for 19,408,163 new shares in
HDSB, an investment holding company incorporated in Malaysia, representing 95.1% of HDSB’s enlarged share
capital. MHV’s subscription for 19,408,163 ordinary shares of HDSB at an issue price of RM1.00 each was
satisfied by payment of RM5,606,963 in cash and the remaining RM13,801,200 by the issuance of 40,000,000
new AAMG shares at A$0.105 each. The Group obtained shareholders’ approval for the acquisition at the
Annual General Meeting on 18 December 2017 and the subscription was completed on 6 March 2018.
Other than the above, there were no significant changes in the state of affairs of the Group during the year.
EVENTS SUBSEQUENT TO REPORT DATE
No other matters or circumstances have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the Group, the results of those operations, or the state of affairs
of the Group in future financial years.
LIKELY DEVELOPMENTS
Likely developments, future prospects and business strategies of the operations of the Group and the
expected results of those operations in future years are detailed in the Chairman’s message on pages 8 and
9. These are mainly in line with the Group’s growth strategies as follows:
1)
2)
3)
4)
5)
Continue with the Group’s geographical expansion plans and build on existing presence overseas
such as in Malaysia, Russia and Myanmar, in the area of specialised clinical services and project
management;
Enhance AARO’s comprehensive suite of capabilities as a regional provider of one-stop solutions in
radiology and oncology and to leverage on these capabilities to expand;
Strengthen our position in our core markets for liver services;
Explore investment opportunities in the region in the healthcare sector; and
Commence the development of the cancer centre in Iskandar Puteri in Johor, Malaysia.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 30
DIRECTORS’ REPORT
OPTIONS
At the date of this report, there are no unissued ordinary shares of AAMG.
There have been no unissued shares or interests under option of any controlled entity within the Group during
or since reporting date.
ENVIRONMENTAL REGULATION
The Company’s operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a State or Territory in Australia.
The directors are not aware of any particular or significant environmental issues which have been raised in
relation to the Company’s operations during the financial year. The directors are also not aware of any breach
in the environmental regulations in Singapore, Malaysia and Myanmar during the financial year.
REMUNERATION REPORT (AUDITED)
The Directors of Asian American Medical Group Limited (“AAMG” or the “Group”) present the Remuneration
Report for Non-Executive Directors, Executive Directors and other KMP, prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001.
DETAILS OF MEMBERS OF KEY MANAGEMENT PERSONNEL
The key management personnel of the Group during the financial year ended 31 August 2018 are listed below.
Directors:
Dato’ Dr Kai Chah Tan – Executive Director and Chairman
Mr Evgeny Tugolukov - Non-Executive Director
Mr Heng Boo Fong - Independent Non-Executive Director
Mr Paul Vui Yung Lee - Independent Non-Executive Director
Ms Jeslyn Jacques Wee Kian Leong - Independent Non-Executive Director
Mr Stuart L Dean - Independent Non-Executive Director (appointed on 1 May 2018)
Mr Kong Meng Ang - Non-Executive Director (resigned on 5 February 2018)
Other key management personnel:
Mr Cherinjit Kumar Shori – Group Chief Operating Officer
Mr Meng Yau Yeoh – Group Chief Financial Officer
Ms Angela Chiew Foong Choong – Chief Commercial Officer
The skills, experience, expertise and tenure of each director and KMP are disclosed in the profile of directors
and KMP sections respectively within the Annual Report.
The Remuneration Report is set out under the following main headings:
a.
b.
c.
d.
e.
principles used to determine the nature and amount of remuneration;
details of remuneration;
service agreements;
share-based remuneration; and
other information.
A.
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
•
•
•
to align rewards to business outcomes that deliver value to shareholders;
to drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
to ensure remuneration is competitive in the relevant employment market place to support the
attraction, motivation and retention of executive talent.
AAMG has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board has established a Nomination and Remuneration Committee (“NRC”) which operates in accordance
with its charter as approved by the Board and is responsible for determining and reviewing compensation
arrangements for the Directors and the Executive Team.
The NRC, 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 officers of the Group taking into account the financial position of the Consolidated Group. The
board remuneration policy per the formal charter is to ensure the remuneration package properly reflects
the person’s duties and responsibilities, and that remuneration is competitive in attracting, retaining and
motivating people of the highest quality.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 31
DIRECTORS’ REPORT
The Constitution of the Company specifies 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$15,450-A$25,750 (2017:
A$15,450-A$25,750).
The remuneration structure that has been adopted by the Group consists of the following components:
•
•
fixed remuneration being annual salary; and
short term incentives, being employee share schemes and bonuses.
The NRC assess the appropriateness of the nature and amount of remuneration on a periodic basis by reference
to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit
from the retention of a high-quality Board and Executive Team.
The payment of bonuses, share options and other incentive payments are reviewed by the NRC annually as
part of the review of executive remuneration and a recommendation is put to the Board for approval. All
bonuses, options and incentives must be linked to pre-determined performance criteria.
SHORT TERM INCENTIVE (“STI”)
AAMG performance measures involve the use of annual performance objectives, metrics, performance
appraisals and continuing emphasis on living the Company values.
The performance measures are set annually after consultation with the directors and executives and are
specifically tailored to the areas where each executive has a level of control. The measures target areas the
Board believes hold the greatest potential for expansion and profit and cover financial and non-financial
measures.
The Key Performance Indicators (“KPI’s”) for the Executive Team are summarised as follows:
Performance area:
•
•
financial - operating profit and earnings per share; and
non-financial - strategic goals set by each individual business unit based on job descriptions.
The STI Program incorporates both cash and share-based components for the Executive Team and other
employees.
The Board may, at its discretion, award bonuses for exceptional performance in relation to each person’s pre-
agreed KPIs.
VOTING AND COMMENTS MADE AT THE COMPANY’S LAST ANNUAL GENERAL MEETING
AAMG received more than 100% of ‘yes’ votes on its Remuneration Report for the financial year ended 31
August 2017. The Company received no specific feedback on its Remuneration Report at the Annual General
Meeting.
CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the
following indices in respect of the current financial year and the previous four financial years:
Item
EPS (S cents)*
Dividends (S cents per share)
Net profit/ (loss) (S$000)
Share price (A$)
*continued operations
2018
0.62
-
2,067
0.11
2017
(1.04)
-
2016
(0.74)
-
(3,031)
(2,061)
0.11
0.12
2015
0.49
-
559
0.08
2014
(1.09)
-
(2,493)
0.08
USE OF REMUNERATION CONSULTANTS
AAMG did not make use of remuneration consultants during the financial year.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 32
DIRECTORS’ REPORT
B.
DETAILS OF REMUNERATION
Details of the nature and amount of each element of the remuneration of each KMP of AAMG are shown in
the table below:
Short term employee benefit
Post-
employment
benefit
Cash salary
and fees
Cash bonus
Non-
monetary
benefits
Central
Provident
Fund/
Superannuation
31 August 2018
S$
S$
S$
S$
Performance
based
percentage
of
remuneration
%
Total
S$
Executive Director
Dato’ Dr Kai Chah Tan
2,162,500
Non-Executive Directors
Mr Evgeny Tugolukov
Mr Kong Meng Ang (1)
15,835
15,835
Mr Heng Boo Fong
23,029
Mr Paul Vui Yung Lee
15,835
Ms Jeslyn Jacques Wee
Kian Leong
Mr Stuart L Dean (2)
14,330
-
Other Key Management Personnel
-
-
-
-
-
-
-
Mr Cherinjit Kumar
Shori
242,256
18,746
Mr Meng Yau Yeoh
166,400
11,733
Ms Angela Chiew
Foong Choong
179,200
16,000
2,835,220
46,479
(1) Mr Kong Meng Ang resigned 5 February 2018
(2) Mr Stuart L Dean was appointed on 1 May 2018
-
-
-
-
-
-
-
-
-
-
-
6,480
2,168,980
-
-
-
-
15,835
15,835
23,029
15,835
1,505
15,835
-
-
15,810
276,812
14,960
193,093
7,920
203,120
46,675
2,928,374
-
-
-
-
-
-
-
7%
6%
8%
-
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 33
DIRECTORS’ REPORT
Short term employee benefit
Post-employment
benefit
Cash salary
and fees
Cash bonus
Non-
monetary
benefits
Central
Provident Fund/
Superannuation
31 August 2017
S$
S$
S$
S$
Performance
based
percentage
of
remuneration
%
Total
S$
Executive Director
Dato’ Dr Kai Chah Tan
2,400,000
4,467
Non-Executive Directors
Mr Wing Kwan Teh (3)
5,976
Mr Evgeny Tugolukov
16,400
Mr Kong Meng Ang
Mr Heng Boo Fong
10,020
23,700
Mr Paul Vui Yung Lee
16,400
Ms Jeslyn Jacques Wee
Kian Leong
16,400
Other Key Management Personnel
-
-
-
-
-
-
Mr Cherinjit Kumar
Shori
259,560
43,260
Mr Meng Yau Yeoh
190,500
32,667
Ms Angela Chiew
Foong Choong
192,000
21,333
3,130,956
101,727
(3) Mr Wing Kwan Teh resigned 11 January 2016
-
-
-
-
-
-
-
-
-
-
-
8,280
2,412,747
n..m
-
-
-
-
-
-
5,976
16,400
10,020
23,700
16,400
16,400
17,340
320,160
17,340
240,507
9,420
222,753
52,380
3,285,063
-
-
-
-
-
-
14%
14%
10%
-
The cash bonus relates to bonus that was vested during the year and is subject to approval by the Nomination
and Remuneration Committee. The cash bonus is paid between November and December every year and no
part of the bonus is payable in the future years. There was no bonus that was forfeited during the year.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 34
DIRECTORS’ REPORT
C.
SERVICE AGREEMENTS
Remuneration and other terms of employment for the Executive Directors and other KMP are formalised in a
service agreement. The major provisions of the agreements relating to remuneration are set out below:
Name
Base salary per month (S$)
Term of agreement
Notice period
Dato’ Dr Kai Chah Tan
Mr Cherinjit Kumar Shori
Mr Meng Yau Yeoh
Ms Angela Chiew Foong Choong
170,000
19,467
12,800
14,400
D.
SHARE-BASED REMUNERATION
Unspecified
Unspecified
Unspecified
Unspecified
3 months
3 months
3 months
3 months
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.
E.
OTHER INFORMATION
KMP Options and Right Holdings
All KMP 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.
No options were granted, exercised, lapsed/cancelled or vested during by any director or KMP of the Group
during the financial year (2017: Nil).
KMP Shareholdings
The number of ordinary shares in Asian American Medical Group Limited held by each KMP of the Group
during the financial year are as follows:
31 August 2018
Dato’ Dr Kai Chah Tan
Mr Evgeny Tugolukov
Mr Kong Meng Ang
Mr Heng Boo Fong
Mr Paul Vui Yung Lee
Ms Jeslyn Jacques Wee Kian Leong
Mr Stuart L Dean
Mr Cherinjit Kumar Shori
Mr Meng Yau Yeoh
Ms Angela Chiew Foong Choong
Balance at
beginning
of year
Issued
during the
year
Issued on
exercise
of options
during the
year
Other
changes
during the
year
115,798,180
21,000,000
46,062,300
-
-
-
-
842,000
457,000
-
184,159,480
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of year
-
-
115,798,180
21,000,000
*(46,062,300)
-
-
-
-
-
-
-
-
-
-
-
-
842,000
457,000
-
(46,062,300)
138,097,180
* Mr Kong Meng Ang resigned as a Non- Executive Director on 5 February 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 35
DIRECTORS’ REPORT
Balance at
beginning
of year
Issued
during the
year
Issued on
exercise
of options
during the
year
Other
changes
during the
year
Balance at
end of year
107,298,250
21,000,000
34,000,000
-
-
-
842,000
457,000
-
163,597,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,499,930
115,798,180
-
21,000,000
12,062,300
46,062,300
-
-
-
-
-
-
-
-
-
842,000
457,000
-
20,562,230
184,159,480
31 August 2017
Dato’ Dr Kai Chah Tan
Mr Evgeny Tugolukov
Mr Kong Meng Ang
Mr Heng Boo Fong
Mr Paul Vui Yung Lee
Ms Jeslyn Jacques Wee Kian Leong
Mr Cherinjit Kumar Shori
Mr Meng Yau Yeoh
Ms Angela Chiew Foong Choong
Other KMP Transactions
During the financial year, MHV acquired 95.1% of HDSB as the major shareholder. Prior to the acquisition,
HDSB was fully held by Dato’ Dr Kai Chah Tan, as the sole director, who is also the Executive Chairman of
AAMG. The total consideration for the acquisition was S$6,188,915. (Refer to Note 8).
Prior to the acquisition of HDSB on 6 March 2018, management revenue of S$1,743,316 was billed from Asian
American Medical Pte Ltd (“AAMGPL”) to HDSB for the services provided under the Service Agreement
dated 26 September 2017. These services relates to costs and expenses incurred in providing professional
services to HDSB on the Johor Project.
Other than the above, there have been no other related party transactions in the current financial year.
End of audited remuneration report.
INDEMNIFICATION AND INSURANCE OF OFFICERS
During the year, AAMG paid a premium to insure officers of the Group. The officers of the Group covered by
the insurance policy include all directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of the Group, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise
out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else to cause detriment to the Group.
Details of the amount of the premium paid in respect of insurance policies are not disclosed as such disclosure
is prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify any current or former officer of the Group against a liability incurred
as such by an officer.
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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 36
DIRECTORS’ REPORT
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 satisfied 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 2018 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
2 November 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 37
Grant Thornton House
Level 3
170 Frome Street
Adelaide, SA 5000
Correspondence to:
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 American Medical Group Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Asian
American Medical Group Limited for the year ended 31 August 2018, 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
B K Wundersitz
Partner – Audit & Assurance
Adelaide, 2 November 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
Asian American
Medical Group Limited
ABN NUMBER 42 091 559 125
Annual Report for the year ended
31 August 2018
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 31 August 2018
39
Revenue
Other operating income
Changes in inventories
Inventories
Purchase services
Employment benefits expense
Operating lease expense
Depreciation
Directors’ fees
Recovery of doubtful debts
Gain on purchase relating to acquisition of HDSB
Write-off of goodwill
Other expenses
Share of results of associates
Profit/ (Loss) before income tax
Income tax benefit/(expense)
Profit/ (Loss) for the year
Consolidated Group
Year ended
Year ended
Note
31 August 2018
31 August 2017
S$
S$
3
3
12
8
15
20
5
4
17,477,029
15,166,882
404,903
25,207
(1,110,307)
(9,277,854)
(5,476,572)
(562,090)
(46,062)
(79,176)
-
1,560,772
207,412
(25,110)
(1,122,839)
(8,592,330)
(6,201,273)
(492,993)
(53,551)
(81,596)
150,078
-
-
(266,123)
(1,021,315)
(1,569,988)
2,417
1,896,952
169,886
-
(2,881,431)
(149,379)
2,066,838
(3,030,810)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Net effect of foreign currency translation
19
(963,095)
525,350
Total comprehensive profit/ (loss) for the year
1,103,743
(2,505,460)
Profit/ (Loss) attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive profit/ (loss) attributable to:
Members of the parent entity
Non-controlling interest
1,950,766
(3,093,383)
116,072
62,573
2,066,838
(3,030,810)
987,671
116,072
(2,568,033)
62,573
1,103,743
(2,505,460)
Earnings/ (Loss) per share
Basic earnings/ (loss) per share (S cents)
Diluted earnings/ (loss) per share (S cents)
10
10
0.62
0.62
(1.04)
(1.04)
These financial statements should be read in conjunction with the accompany notes.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 40
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 31 August 2018
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax refundable
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investment in joint venture
Deferred tax asset
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Total current liabilities
Non- current liabilities
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Equity attributable to members of the parent entity:
Issued capital
Reserves
Accumulated losses
Non-controlling interest
Total equity
Note
Consolidated Group
2018
S$
2017
S$
11
12
13
17
14
15
20
17
16
17
18
19
8,928,738
2,820,867
192,689
-
9,174,730
6,127,377
165,618
8,334
11,942,294
15,476,059
8,973,374
69,934
-
69,248
171,375
9,213,997
21,156,291
-
-
-
69,934
15,545,993
5,642,378
5,642,378
5,940,733
5,940,733
75,922
75,922
5,718,300
15,437,991
-
-
5,940,733
9,605,260
17,228,598
(812,302)
(1,701,739)
14,714,557
723,434
12,932,538
150,793
(3,652,505)
9,430,826
174,434
15,437,991
9,605,260
These financial statements should be read in conjunction with the accompany notes.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 41
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Issued
capital
Accumulated
losses
Foreign
currency
translation
reserve
Non-
controlling
interest
S$
S$
S$
S$
Total
S$
Balance at 1.9.2016
12,932,538
(559,122)
(374,557)
111,861
12,110,720
Total comprehensive income:
(Loss)/Profit for the year
Other comprehensive income
-
-
-
(3,093,383)
-
62,573
(3,030,810)
-
525,350
-
525,350
(3,093,383)
525,350
62,573
(2,505,460)
Balance at 31.8.2017
12,932,538
(3,652,505)
150,793
174,434
9,605,260
Balance at 1.9.2017
12,932,538
(3,652,505)
150,793
174,434
9,605,260
Total comprehensive income:
Profit for the year
Other comprehensive loss
-
-
-
1,950,766
-
116,072
2,066,838
-
(963,095)
-
(963,095)
1,950,766
(963,095)
116,072
1,103,743
Transactions with owners in their
capacity as owners:
Issue of share capital
(net of capital arising)
Non-controlling interest arising
from acquisition of a subsidiary
Acquisition of subsidiary
(Note 8)
4,296,060
-
-
-
-
-
-
-
-
-
4,296,060
33,628
33,628
399,300
399,300
Balance at 31.8.2018
17,228,598
(1,701,739)
(812,302)
723,434
15,437,991
These financial statements should be read in conjunction with the accompany notes.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 42
CONSOLIDATED STATEMENT OF
CASH FLOWS
For year ended 31 August 2018
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Income tax refunded
Consolidated Group
Year ended
Year ended
Note
31 August 2018
31 August 2017
S$
S$
20,457,930
14,103,279
(19,824,879)
(16,607,227)
6,845
621
Net cash generated from/ (used in) continuing operations
24
639,896
(2,503,327)
Cash flows from investing activities
Interest income
Purchase of property, plant and equipment
Investment in joint venture - GBAA
Acquisition of HDSB, net of cash
Net cash (used in)/ generated from investing
Cash flows from financing activities
Capital contribution from non-controlling interest
Net cash generated from financing activities
63,713
(712,899)
(34,766)
38,591
(645,361)
33,628
33,628
100,617
(4,849)
-
-
95,768
-
-
Net change in cash and cash equivalents held
28,163
(2,407,559)
Cash and cash equivalents at beginning of financial year
Exchange (loss)/gain on cash held in foreign currencies
Cash and cash equivalents at end of financial year
11
9,174,730
(274,155)
8,928,738
11,307,905
274,384
9,174,730
These financial statements should be read in conjunction with the accompany notes.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 43
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 August 2018
1.
2.
(a)
Principle activities
Asian American Medical Group Limited (“AAMG” or “Company”) is a company domiciled in Australia.
The consolidated financial report of the Company as at and for year ended 31 August 2018 comprises
the Company and its controlled entities. The principal activity of AAMG is that of provision of
specialised medical services for liver diseases and transplantation, radiation and oncology, healthcare
project management and consultancy services and healthcare real estate.
AAMG is a for-profit entity for the purpose of preparing financial statements.
Statement of significant accounting policies
This financial report includes the consolidated financial statements and notes of AAMG and controlled
entities (“Consolidated Group” or “Group”).
Basis of preparation
The consolidated general purpose financial statements of the Group have been prepared in
accordance with the requirements of the Corporation Act 2001, Australian Accounting Standards and
other authoritative pronouncements of the Australian Accounting Standards Board. Compliance with
Australian Accounting Standards results in full compliance with the International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Material accounting policies adopted in the preparation of this financial report are presented below
and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets
and financial liabilities.
The consolidated final report is presented in Singapore Dollars (SGD or S$) as a significant portion of
the group’s activity is denominated in Singapore Dollars.
These consolidated financial statements have been approved for issue by the Board of Directors on 2
November 2018.
(b)
Principles of consolidation
The Group financial statements consolidate those of the Parent company and all of its subsidiaries as
of 31 August 2018. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns
from its involvement with the subsidiary and has the ability to affect those returns through its power
over the subsidiary. All subsidiaries have a reporting date of 31 August, except for Gold Bell Asia
American Healthcare Ventures Company, a newly incorporated subsidiary who has a reporting date
of 31 March.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Where unrealised losses on
intragroup asset sales are reversed on consolidation, the underlying asset is also tested for impairment
from a group perspective. Amounts reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the
year are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit 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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
44
NOTES TO THE FINANCIAL STATEMENTS
(c)
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses and
results in the consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The acquisition method requires that for each
business combination one of the combining entities must be identified as the acquirer (i.e. parent
entity). The business combination will be accounted for as at the acquisition date, which is the
date that control over the acquiree is obtained by the parent entity. At this date, the parent shall
recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the
identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree
will be recognised where a present obligation has been incurred and its fair value can be reliably
measured.
The acquisition may result in the recognition of goodwill (refer Note 2(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 financial 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.
All transaction costs incurred in relation to the business combination are expensed to the profit or
loss.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit 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 (benefit) for the year comprises current income tax expense (benefit) and
deferred tax expense (benefit).
Current income tax expense charged to the profit 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 reflects movements in deferred tax asset and deferred tax liability
balances during the year as well unused tax losses.
Current and deferred income tax expense (benefit) is charged or credited directly to equity instead
of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax
assets also result where amounts have been fully expensed but future tax deductions are available.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding
a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates enacted or substantively
enacted at reporting date. Their measurement also reflects the manner in when management expects
to recover or settle the carrying amount of the related asset or liability.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
45
NOTES TO THE FINANCIAL STATEMENTS
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised.
The amount of benefits 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 sufficient future assessable income to enable the benefit 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)
Property, plant and equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
Property, plant and equipment are measured on the cost basis less depreciation and impairment
losses.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure
it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed
on the basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the profit or loss during the financial year in which they are incurred.
Depreciation
The depreciation of all fixed 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 fixed asset
Office equipment
Medical equipment
Computers
Furniture and fittings
Leasehold Improvements
Building
Depreciation Rate
5 years
5 years
5 years
5 years
4 years
30 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 profit or loss.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
46
NOTES TO THE FINANCIAL STATEMENTS
(g)
Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the
lessor, are charged as expenses in the periods in which they are incurred.
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 finance 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 classified 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.
Depreciation methods and useful lives for assets held under finance lease agreements correspond to
those applied to comparable assets which are legally owned by the Group. The corresponding finance
leasing liability is reduced by lease payments less finance charges, which are expensed as part of
finance costs.
The interest element of leasing payments represents a constant proportion of the capital balance
outstanding and is charged to profit or loss over the period of the lease.
(h)
Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that the
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 classified “at fair value through profit or loss” in which case transaction costs
are expensed to the profit or loss immediately.
Classification 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 price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement
date. 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 specifically applicable to financial instruments.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost.
(ii) Held-to-maturity investments
These investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Group’s intention to hold these investments to maturity. They
are subsequently measured at amortised cost.
(iii) Available for sale financial assets
Available for sale financial assets are non-derivative assets that are either not suitable to be classified
into other categories of financial assets due to their nature or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
Available for sale financial assets are included in non-current assets, except for those which are
expected to mature within 12 months after the end of the reporting year.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
47
NOTES TO THE FINANCIAL STATEMENTS
(iv) Financial liabilities
Non-derivative financial liabilities (excluding financial 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 financial
instrument has been impaired.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or
the asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised
where the related obligations are either discharged, cancelled or expired. The difference between the
carrying value of the financial liability extinguished or transferred to another party and the fair value
of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in
profit or loss.
Impairment of assets
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 profit or loss.
Impairment testing is performed annually for goodwill.
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 identifiable 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.
(i)
(j)
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
48
NOTES TO THE FINANCIAL STATEMENTS
(k)
Investments in associates and joint arrangements
Associates are those entities over which the Group is able to exert significant influence but which are
not subsidiaries.
A joint venture is an arrangement that the Group controls jointly with one or more other investors, and
over which the Group has rights to a share of the arrangement’s net assets rather than direct rights
to underlying assets and obligations for underlying liabilities. A joint arrangement in which the Group
has direct rights to underlying assets and obligations for underlying liabilities is classified as a joint
operation.
Investments in associates and joint ventures are accounted for using the equity method. Interests in
joint operations are accounted for by recognising the Group’s assets (including its share of any assets
held jointly), its liabilities (including its share of any liabilities incurred jointly), its revenue from the
sale of its share of the output arising from the joint operation, its share of the revenue from the sale
of the output by the joint operation and its expenses (including its share of any expenses incurred
jointly).
Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture
is not recognised separately and is included in the amount recognised as investment.
The carrying amount of the investment in associates and joint ventures is increased or decreased to
recognise the Group’s share of the profit or loss and other comprehensive income of the associate
and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the
Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures
are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are
eliminated, the underlying asset is also tested for impairment.
(l)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are
presented in 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
profit or loss and other comprehensive income, except where deferred in equity as a qualifying cash
flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange
difference is recognised in the statement of profit or loss and other comprehensive income.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
49
NOTES TO THE FINANCIAL STATEMENTS
Group companies
The financial results and position of foreign operations whose functional currency is different from the
Group’s presentation currency are translated as follows:
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 are charged or credited to other comprehensive income and recognised in the
foreign currency translation reserve in equity.
(m) Employee benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits 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 benefits payable later than one year are measured at the present value of the estimated
future cash outflows to be made for those benefits. Those cash flows are discounted using market
yields on high quality corporate bonds with terms to maturity that match the expected timing of cash
flows.
Central Provident Fund (“CPF”)/Superannuation contributions: The Group makes contributions to
the Central Provident Fund scheme in Singapore and Superannuation scheme in Australia, a defined
contribution post-employment or pension scheme. Contributions to post-employment benefits under
defined contribution plans are recognised as an expense in the profit or loss 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.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can
be reliably measured.
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 insignificant risk of changes in values.
Revenue and other income
Revenue is measured at the fair value of the consideration received or receivable. Revenue from sale
of medication is recognised upon delivery of the medication to the patient. Revenue from rendering
of medical services such as medical consultation, surgery and transplantation is recognised upon
completion of the consultation or procedure. Management services fees are recognised upon the
rendering of management and consultancy services to and accepted by the customer.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial
assets, is the rate inherent in the instrument.
Management fees revenue is recognised by reference to the stage of completion of the contract.
All revenue is stated net of goods and services tax (“GST”).
(n)
(o)
(p)
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
50
NOTES TO THE FINANCIAL STATEMENTS
(q)
(r)
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.
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 Office (“ATO”) or Inland Revenue Authority
of Singapore (“IRAS”). 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 financial position inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO or IRAS is included as a current asset
or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from, or payable to, the
ATO or IRAS are classified as operating cash flows.
(s)
Share-based employee remuneration
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 profitability and sales growth targets and performance conditions).
All share-based remuneration is ultimately recognised as an expense in profit 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.
(t)
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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
(u)
Standards and Interpretations issued but not yet effective
51
Effective date
(annual reporting
periods beginning
on or after...)
1 January 2018
Likely impact on
initial application
Based on
the entity’s
assessment, the
Standard is not
expected to have
a material impact
on the transactions
and balances
recognised in
the financial
statements when
it is first adopted
for the year ending
31 August 2019.
New / revised
pronouncement
Superseded
pronouncement
Nature of change
AASB 9 Financial
Instruments
(December 2014)
AASB 139
Financial
Instruments:
Recognition and
Measurement
AASB 9 introduces new requirements
for the classification and measurement
of financial assets and liabilities and
includes a forward-looking ‘expected
loss’ impairment model and a
substantially-changed approach to
hedge accounting.
These requirements improve and
simplify the approach for classification
and measurement of financial assets
compared with the requirements of
AASB 139. The main changes are:
a Financial assets that are debt
instruments will be classified based
on: (i) the objective of the entity’s
business model for managing
the financial assets; and (ii) the
characteristics of the contractual
cash flows.
b Allows an irrevocable election on
initial recognition to present gains
and losses on investments in equity
instruments that are not held for
trading in other comprehensive
income (instead of in profit or
loss). Dividends in respect of these
investments that are a return on
investment can be recognised
in profit or loss and there is no
impairment or recycling on disposal
of the instrument.
c Introduces a ‘fair value through
other comprehensive income’
measurement category for
particular simple debt instruments.
d Financial assets can be designated
and measured at fair value through
profit or loss at initial recognition if
doing so eliminates or significantly
reduces a measurement or
recognition inconsistency that
would arise from measuring assets
or liabilities, or recognising the gains
and losses on them, on different
bases.
e Where the fair value option is used
for financial liabilities the change in
fair value is to be accounted for as
follows:
•
to changes in credit risk
are presented in Other
Comprehensive Income (OCI)
•
the remaining change is
presented in profit or loss
the change attributable
If this approach creates or enlarges
an accounting mismatch in the
profit or loss, the effect of the
changes in credit risk are also
presented in profit or loss.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 52
NOTES TO THE FINANCIAL STATEMENTS
New / revised
pronouncement
Superseded
pronouncement
Nature of change
Effective date
(annual reporting
periods beginning
on or after...)
Likely impact on
initial application
Otherwise, the following requirements
have generally been carried forward
unchanged from AASB 139 into
AASB 9:
• classification and measurement of
financial liabilities; and
• derecognition requirements for
financial assets and liabilities
AASB 9 requirements regarding hedge
accounting represent a substantial
overhaul of hedge accounting that
enable entities to better reflect their
risk management activities in the
financial statements.
Furthermore, AASB 9 introduces a new
impairment model based on expected
credit losses. This model makes use of
more forward-looking information and
applies to all financial instruments that
are subject to impairment accounting.
AASB 15:
• replaces AASB 118 Revenue, AASB
111 Construction Contracts and some
revenue-related Interpretations:
- establishes a new revenue
recognition model
- changes the basis for deciding
whether revenue is to be
recognised over time or at a
point in time
- provides new and more detailed
guidance on specific topics (e.g.
multiple element arrangements,
variable pricing, rights of return,
warranties and licensing)
- expands and improves
disclosures about revenue
1 January 2018
The entity has
undertaken
a detailed
assessment of the
impact of AASB
15 and concluded
that the Standard
does not have a
material impact on
the transactions
and balances
recognised in
the financial
statements when
it is first adopted
for the year ending
31 August 2019.
AASB 15
Revenue from
Contracts with
Customers
AASB 118
Revenue
AASB 111
Construction
Contracts
Int. 13
Customer
Loyalty
Programmes
Int. 15
Agreements
for the
Construction of
Real Estate
Int. 18
Transfer of
Assets from
Customers
Int. 131
Revenue –
Barter
Transactions
Involving
Advertising
Services
Int. 1042
Subscriber
Acquisition
Costs in the
Telecommunications
Industry
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 NOTES TO THE FINANCIAL STATEMENTS
53
Effective date
(annual reporting
periods beginning
on or after...)
1 January 2019
New / revised
pronouncement
Superseded
pronouncement
Nature of change
AASB 16 Leases
AASB 117
Leases
Int. 4
Determining
whether an
Arrangement
contains a Lease
Int. 115
Operating
Leases—Lease
Incentives
Int. 127
Evaluating the
Substance of
Transactions
Involving the
Legal Form of
a Lease
AASB 16:
• replaces AASB 117 Leases and some
lease-related Interpretations
• requires all leases to be accounted
for ‘on-balance sheet’ by lessees,
other than short-term and low value
asset leases
• provides new guidance on the
application of the definition of
lease and on sale and lease back
accounting
largely retains the existing lessor
accounting requirements in AASB
117
•
• requires new and different
disclosures about leases
Likely impact on
initial application
The entity is yet to
undertake a detailed
assessment of the
impact of AASB 16.
However, based on the
entity’s preliminary
assessment, the likely
impact on the first
time adoption of the
Standard for the year
ending 31 August
2020 includes:
• there will be a
significant increase
in lease assets and
financial liabilities
recognised on the
balance sheet
• the reported equity
will reduce as the
carrying amount
of lease assets
will reduce more
quickly than the
carrying amount of
lease liabilities
• EBIT in the
statement of profit
or loss and other
comprehensive
income will be
higher as the
implicit interest in
lease payments for
former off balance
sheet leases will
be presented as
part of finance
costs rather than
being included
in operating
expenses
• operating cash
outflows will
be lower and
financing cash
flows will be
higher in the
statement of cash
flows as principal
repayments on all
lease liabilities will
now be included in
financing activities
rather than
operating activities.
Interest can also
be included within
financing activities.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 54
NOTES TO THE FINANCIAL STATEMENTS
(v)
New and revised standards that are effective for these financial statements
A number of new and revised standards became effective for the first time to annual periods beginning
on or after 1 September 2017. Information on the more significant standard(s) is presented below.
• AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of
Interests in Joint Operations
• AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable
Methods of Depreciation and Amortisation
• AASB 2014-6 Amendments to Australian Accounting Standards – Agriculture: Bearer Plants
• AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate
Financial Statements
• AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments
to AASB 101
The adoption of this amendments has not had a material impact on the Group.
(w) Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial 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.
(x)
(y)
Earnings per share
Basic earnings per share is calculated by dividing income by the weighted-average number of shares
outstanding during the year. Diluted earnings per share is calculated by dividing income by the
weighted-average number of shares outstanding during the year, assuming that all potentially dilutive
securities were exercised, if dilutive.
Key Estimates and Judgements
Impairment
The Group assesses impairment at each reporting date by evaluating conditions and events specific 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.
Please refer to Note 12 and 15 with respect to Management’s consideration of impairment of trade and
other receivables and goodwill respectively, as at 31 August 2018.
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of
a business combination (see Note 2(c)). Particularly, the fair value of contingent consideration is
dependent on the outcome of many variables that affect future profitability (see Note 8).
Recognition of tax losses
Management has applied judgement to recognise the unused tax losses carried forward and differences
in tax depreciation of plant and equipment to the extent that it is probable that future taxable profits
will be available against which they can be utilised.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
55
3
Revenue
Operating activities
Provision of services
Sale of medication
Management fee
Total revenue from operating activities
Other operating income
Interest received
Other income
Total other operating income
4
Profit/ (Loss) for the year
Consolidated Group
2018
S$
2017
S$
13,662,937
12,800,020
1,733,107
1,965,929
2,080,985
400,933
17,477,029
15,166,882
63,713
341,190
404,903
100,617
106,795
207,412
The profit/ (loss) for the year has been arrived at after (charging)/crediting the following items:
Expenses
Cost of sales
Net foreign exchange gain/(loss)
Occupancy cost as follows:
- premises
Depreciation
Recovery of doubtful debts (Note 12(a))
Professional fees
Management fees
Credit card charges
Central Provident Fund/Superannuation
Consolidated Group
2018
S$
2017
S$
(10,362,954)
(9,740,279)
665,711
(371,148)
(562,090)
(492,993)
(46,062)
-
(53,551)
150,078
(1,116,508)
(540,202)
-
(69,447)
(83,634)
(59,033)
(263,837)
(233,441)
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 56
NOTES TO THE FINANCIAL STATEMENTS
5
Income Tax Expense/(Benefit)
a. The components of tax expense/(benefit) comprise:
Current tax expense
Deferred tax (benefit)/expense
(Under)/Over provision in respect of prior years
Consolidated Group
2018
S$
1,486
(171,375)
3
(169,886)
2017
S$
4,079
150,000
(4,700)
149,379
b. The prima facie tax on profit/ (loss) before income tax is reconciled to the income tax as
follows:
Prima facie tax payable/(refundable) on profit/ (loss) before
income tax at Australian tax rate of 30% (2017 : 30%)
569,085
(864,430)
Add:
Effect of tax rates in foreign jurisdiction
(153,278)
248,069
Tax effect of:
- derecognition of deferred tax assets
- gain on purchase on acquisition of HDSB
- deduction under Internationalisation Scheme grant
- write-off of goodwill
- non-deductible expenses
- non-taxable income
- (under)/over provision for income tax in prior years
- withholding tax deducted at source
- utilisation of deferred tax assets previously not recognised
- deferred tax asset not recognised
- deferred tax asset recognised
- tax effect on capital allowances
Income tax (benefit)/expense
-
150,000
(468,232)
(25,500)
-
143,103
(30,890)
3
1,486
(200,747)
166,459
(171,375)
-
(169,886)
-
-
79,837
3,270
(3,620)
(4,700)
4,079
(5,224)
575,012
-
(32,914)
149,379
The value of tax losses not recognised is S$7,774,000 (2017: S$9,941,000). There was no capital
allowances not recognised in current financial year (2017: S$214,000).
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
6
Key Management Personnel Compensation
The key management personnel (“KMP”) compensation included in employment expenses includes:
57
Short-term benefits
Post-employment benefit
Total compensation
Consolidated Group
2018
S$
2017
S$
2,881,699
3,232,683
46,675
52,380
2,928,374
3,285,063
Detailed remuneration disclosures are provided in the remuneration report.
7
Auditor’s Remuneration
Remuneration of the parent entity auditor,
Grant Thornton Audit Pty Ltd:
- auditing or reviewing the financial report
- taxation services
- expert report services
Remuneration of other auditors:
- auditing or reviewing the financial report of subsidiaries
- taxation services
Consolidation Group
2018
S$
2017
S$
25,495
8,199
36,129
37,815
6,157
-
57,960
10,547
57,548
9,995
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 58
NOTES TO THE FINANCIAL STATEMENTS
8
Gain on Purchase on Acquisition of HDSB
On 6 March 2018, MHV, a wholly-owned subsidiary of AAMG, completed its acquisition of 95.1% of
HDSB which resulted in the recognition of gain on purchase, recognised in the profit or loss statement.
Prior to the acquisition, HDSB was wholly-owned by Dato’ Dr Kai Chah Tan, the Executive Chairman
and single largest shareholder of AAMG. HDSB owns a five acres parcel of land in Iskandar Puteri,
in the Southern Malaysian state of Johor and intends to develop this land into an integrated cancer
centre. AAMG will provide overall strategic services to assist with project development of the land.
Details of the transactions are as follows:
Non-current assets
Property, plant and equipment
Current assets
Cash and cash equivalents
Total liabilities
Trade and other payables
Fair value of assets and liabilities at acquisition date
Fair value of assets acquired and liabilities assumed by
non-controlling interest
Fair value of assets acquired and liabilities assumed
Shares consideration issued
Cash consideration paid
Gain on purchase
2018
S$
8,360,687
1,931,446
(2,143,146)
8,148,987
(399,300)
7,749,687
(4,296,060)
(1,892,855)
1,560,772
The acquisition of HDSB was settled partially in shares and cash, amounting to S$4,296,060 and
S$1,892,855 respectively. 40,000,000 shares were issued at an issued price of A$0.105. Acquisition
related costs amounting to S$52,000 are not included as part of consideration transferred and
have been recognised as an expense in the consolidated statement of profit or loss and other
comprehensive income, as part of ‘other expenses’.
Fair value of the net assets as at acquisition date, comprising of five acres land, a construction in
progress building and other payables, exceeds the total purchase consideration, resulting in a gain
on bargain purchase.
Conditions precedent to the subscription agreement for the acquisition dated 20 October 2017
was met on 2 March 2018 and shares allotment to MHV was completed on 6 March 2018. Upon the
successful allotment of shares, AAMG controls 95.1% of HDSB.
HDSB contributed a net loss of S$105,000 to the consolidated profit for the financial year from 1
September 2017 to 31 August 2018. If HDSB has been acquired on 1 September 2017, intercompany
management fees of S$391,000 would be eliminated and pre-acquisition net losses of S$14,000
would be accounted in the consolidated profit.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 59
NOTES TO THE FINANCIAL STATEMENTS
9
Dividends
No interim or final dividend has been paid during the year or recommended by the Directors following
the completion of accounts for the financial year ended 31 August 2018 (2017 : Nil).
10
Earnings per Share
Basic earnings or loss per share amounts are calculated by dividing the profit or loss for the year
attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted earnings or loss per share amounts are calculated by dividing the profit or loss for the year
attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding during the financial year plus the weighted average number of ordinary shares that
would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table reflects the profit and loss and share data used in the computation of basic and
diluted earnings per share for the year ended 31 August:
Consolidation Group
2018
S$
2017
S$
Profit/ (Loss) after income tax attributable to the owners of AAMG
1,950,766
(3,093,383)
Weighted average number of ordinary shares during the year used
in calculating basic/diluted EPS
317,369,192
297,752,754
Number of
shares
Number
of shares
Basic earnings/ (loss) per share (S cents)
0.62
(1.04)
Diluted earnings/ (loss) per share (S cents)
0.62
(1.04)
11
Cash and Cash Equivalents
Cash and bank balances
Fixed deposits
Consolidation Group
2018
S$
2017
S$
5,542,147
5,434,804
3,386,591
3,739,926
Cash and cash equivalents per consolidated statement of cash flows
8,928,738
9,174,730
The effective interest rate on short-term bank deposits was 0.74% - 2.00% (2017: 0.45% - 2.75%) per
annum. The bank deposits will mature in January 2019.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 60
NOTES TO THE FINANCIAL STATEMENTS
12
Trade and Other Receivables
Current
Trade receivables
Other receivables
Deposits
Total current trade and other receivables
a Provision for impairment of receivables
Consolidation Group
2018
S$
2017
S$
2,500,684
5,718,574
131,366
188,817
253,366
155,437
2,820,867
6,127,377
Current trade and term receivables are non-interest bearing loans and generally on 60 - 120 days
terms. A provision for impairment is recognised when there is objective evidence that an individual
trade or term receivable is impaired. The Group reviews its trade receivables for evidence of
impairment on a regular basis. The trade receivable consists mainly amounts owing by the United
Arab Emirates (“UAE”) government agencies. Management holds regular meetings with the
agencies relating to patient care feedback and collection of amounts outstanding. Management
is of the opinion that the trade receivables are recoverable and hence, no impairment is required.
b Credit risk
The group has no significant 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 (more than 60 days) 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 specific 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.
The ageing profile of the trade receivables as at 31 August 2018 as as follows:
Current
Due 1 - 30 days
Due 31- 60 days
Due over 60 days
13
Inventories
Consolidation Group
2018
S$
476,242
482,705
2017
S$
1,518,501
760,021
38,569
1,014,633
1,503,168
2,425,419
2,500,684
5,718,574
Consolidated Group
2018
S$
2017
S$
Medical supplies at cost
192,689
165,618
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 NOTES TO THE FINANCIAL STATEMENTS
14
Property, plant and equipment
61
Office equipment
At cost
Accumulated depreciation
Total office equipment
Medical equipment
At cost
Accumulated depreciation
Total medical equipment
Computers
At cost
Accumulated depreciation
Total computers
Furniture and fittings
At cost
Accumulated depreciation
Total furniture and fittings
Leasehold Improvement
At cost
Accumulated depreciation
Total leasehold improvement
Land
At cost
Accumulated depreciation
Total land
Building (construction in progress)
At cost
Accumulated depreciation
Total building
Consolidated Group
2018
S$
7,735
(6,067)
1,668
2017
S$
7,735
(6,333)
1,402
340,129
338,929
(339,109)
(334,262)
1,020
4,667
163,656
169,975
(143,281)
(129,721)
20,375
40,254
256,167
256,167
(246,812)
(232,556)
9,355
23,611
79,677
(3,320)
76,357
6,902,384
-
6,902,384
1,962,215
-
1,962,215
-
-
-
-
-
-
-
-
-
Total property, plant and equipment
8,973,374
69,934
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 62
NOTES TO THE FINANCIAL STATEMENTS
Movements in carrying amounts
Movement in the carrying amounts for each class of property, plant and equipment between the beginning
and the end of the current financial year.
Office
equipment
Medical
equipment Computers
Furniture
and
fittings
Leasehold
Improvement
Land
Building
Total
S$
S$
S$
S$
S$
S$
S$
S$
Consolidated Group
Balance at
31 August
2017
Additions
Acquisition
through
business
combination
Disposals
Write-off
Exchange
Difference
Depreciation
expense
Carrying
amount at 31
August 2018
Balance at
31 August
2016
Additions
Disposals
Write-offs
Depreciation
expense
Balance at
31 August
2017
1,402
4,667
40,254
23,611
-
-
-
-
815
-
1,200
4,431
-
-
-
-
-
-
(1,220)
-
-
-
-
-
-
79,677
-
-
-
-
-
-
-
69,934
627,590
712,898
6,988,113
1,372,574
8,360,687
-
-
-
-
-
(405)
(85,729)
(37,949)
(123,678)
(549)
(4,847)
(23,090)
(14,256)
(3,320)
-
-
(46,062)
1,668
1,020
20,375
9,355
76,357
6,902,384
1,962,215
8,973,374
Office
equipment
Medical
equipment Computers
Furniture
and
fittings
Leasehold
Improvement
Land
Building
Total
S$
S$
S$
S$
S$
S$
S$
S$
2,134
13,767
59,534
43,201
-
-
-
-
-
-
4,849
-
-
-
-
-
(732)
(9,100)
(24,129)
(19,590)
1,402
4,667
40,254
23,611
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
118,636
4,849
-
-
(53,551)
69,934
There was no asset purchased under finance lease arrangement during the financial year (2017 : Nil).
The Group owns a freehold piece of land with a total area of five acres located in Iskandar Puteri,
Johor, Malaysia
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 NOTES TO THE FINANCIAL STATEMENTS
63
15
Intangible Assets
Total Intangible Assets
Goodwill
Goodwill, at cost
Less: Goodwill written-off
Net carrying amount
Impairment of Goodwill
Consolidated Group
2018
S$
2017
S$
-
-
-
266,123
(266,123)
-
The recoverable amount of a CGU is based on value-in-use calculations. These calculations are
based on projected cash flows approved by management covering a period not exceeding five
years. Management’s determination of cash flow projections and gross margins are based on past
performance and its expectation for the future. The present value of future cash flows has been
calculated using a discount rate of 10% and a growth rate of 5% per annum to determine value-in-use.
In the last financial year, the liver segment incurred a loss and as the Management is uncertain about
the profitability of AALC in the coming years, the Group wrote-off its goodwill of S$266,123 in FY2017.
16
Trade and Other Payables
Current
Trade payables
Patients’ deposits
Provision for employee benefits
Sundry payables and accrued expenses
Total current trade and other payables
Consolidated Group
2018
S$
2017
S$
3,615,215
5,029,622
305,194
190,516
85,063
165,826
1,531,453
660,222
5,642,378
5,940,733
The provision for employee benefits relates to the provision for cash bonus to employees for the period
from January to August 2018 (2017: January to August 2017) and is payable by December 2018
(2017: December 2017).
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 64
NOTES TO THE FINANCIAL STATEMENTS
17
Taxation
Current assets
Income tax refundable
Non-current
Deferred tax assets and liabilities:
Tax liability arising from land revaluation
Tax allowances arising from unused tax losses
Net deferred tax asset
18
Issued Capital
Opening share balance
Consolidated Group
2018
S$
2017
S$
-
8,334
1 September
2017
S$
-
-
-
S$
75,922
(171,375)
(95,453)
31 August
2018
S$
75,922
(171,375)
(95,453)
Consolidated Group
2018
S$
2017
S$
12,932,538
12,932,538
Shares issued during the year - issued for acquisition of HDSB
4,296,060
-
Total capital
17,228,598
12,932,538
a.
Ordinary Shares
At the beginning of reporting year
Shares issued during year
At reporting date
Consolidated Group
2018
Number
of shares
2017
Number
of shares
297,752,754
297,752,754
40,000,000
-
337,752,754
297,752,754
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
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.
During the financial year, 40,000,000 new ordinary shares were issued at A$0.105 per share in part
satisfaction of the consideration under the Subscription Agreement to subscribe for 95.1% of HDSB.
b.
Capital Management
Management controls the capital of the Group in order to provide shareholders with adequate returns
and ensure that the Group can fund its operations and continue as a going concern. Currently the
Group has no debt.
There are no externally imposed capital requirements.
There have been no changes in the strategy adopted by management to control the capital during
the year.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 65
NOTES TO THE FINANCIAL STATEMENTS
19
Reserves
a.
Nature and purpose of reserve
Share-based payments
(i)
The share-based payments reserve is used to recognise:
•
•
•
At grant date of the fair value of options issued to employees but not exercised
At grant date the fair value of shares issued to employees
The issue of shares held by the AAMG Employee Share Trust to employees
There is no share option issued in the reporting period.
Foreign currency translation
(ii)
Exchange difference arising on translation of the foreign controlled entity are recognised in other
comprehensive income as described in note 2(l) and accumulated in a separate reserve within equity.
The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
b.
Movements in reserves
(i) Foreign currency translation reserve
Beginning of financial year
Net currency translation difference of financial
statements of foreign subsidiaries
End of financial year
Total as at the end of financial year
Consolidated Group
2018
S$
2017
S$
150,793
(374,557)
(963,095)
(812,302)
(812,302)
525,350
150,793
150,793
20
Investment in Joint Venture
During the financial year, GBAA entered into a joint collaboration with its strategic partner to
incorporate AAMS in Myanmar. GBAA has a 50% shareholding under this joint venture, which entitles
AAMGPL to 25.5% of AAMS’s profit.
Investment in joint venture
Profit from related associate
Total net assets of AAMS
Proportion of ownership interest held by the Group
Carrying amount of the investment in AAMS
Consolidated Group
2018
S$
69,248
2,417
138,496
50%
69,248
2017
S$
-
-
-
-
-
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 66
NOTES TO THE FINANCIAL STATEMENTS
21
Share-Based Employee Remuneration
As at 31 August 2018, the Group maintained an equity settled share-based payment scheme for
employee remuneration.
There are no outstanding share options at the end of the current and previous reporting years.
22
a.
Controlled Entities
Controlled entities consolidated
Name
Country of
incorporation
Percentage owned
(%)
2018
2017
Asian American Medical Group Limited
Australia
Subsidiary of Asian American Medical Group Limited:
Asian American Medical Group Inc.
British Virgin
Islands
100
100
Subsidiaries of Asian American Medical Group Inc.
Asian American Liver Centre Pte Ltd
Asian American Radiation & Oncology Pte Ltd
Asian American Medical Group Pte Ltd
Million Health Ventures Pte Ltd
Subsidiary of Million Health Ventures Pte Ltd:
Asian American Oncology Management Sdn Bhd
Hippocrates Development Sdn Bhd (1)
Singapore
Singapore
Singapore
Singapore
Malaysia
Malaysia
100
70
100
100
100
95
Subsidiary of Asian American Medical Group Pte Ltd:
Gold Bell Asia American Healthcare Ventures Company
Limited (2)
Myanmar
51
100
70
100
100
100
-
-
Associate of Asian American Liver Centre Pte Ltd:
PT. Asian Liver Center Indonesia (3)
Indonesia
-
50
1 Acquired on 6 March 2018
2 Incorporated on 19 September 2017
3 Disposed on 12 September 2017
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 67
NOTES TO THE FINANCIAL STATEMENTS
b.
Acquisition of controlled entities
a) On 19 September 2017, AAMGPL incorporated a 51% owned subsidiary, GBAA for a cash
consideration of S$34,767.
b) On 6 March 2018, MHV completed the acquisition of HDSB, an investment holding company
incorporated in Malaysia, representing 95.1% of HDSB’s enlarged share capital. MHV’s subscription
for 19,408,163 ordinary shares of HDSB at an issue price of RM1.00 each was satisfied by payment
of RM5,606,963 in cash and the remaining RM13,801,200 by the issuance of 40,000,000 new
AAMG shares at A$0.105 each.
c) On 16 May 2018, GBAA incorporated a 50% owned joint venture with Grand Hantha Company
Limited, for a cash consideration of S$67,021. This transaction has been accounted for by the
equity method of accounting as it meets all elements of a joint venture.
c.
Disposal of controlled entity
On 12 September 2017, PT. Asian Liver Center Indonesia, a 50% dormant associate of AALC was
disposed of at a nominal sum of S$1.00.
23
a.
Commitments and Contingencies
Operating leases
Non-cancellable operating leases contracted for but not capitalised in the financial statements:
Consolidated Group
2018
S$
-
-
-
2017
S$
415,018
33,000
448,018
Payable – minimum lease payments
Not longer than 1 year
Longer than 1 year but not longer than 5 years
At the date of this report, the lease for the premises was still in negotiation.
b.
Finance leases
There is no outstanding finance lease balance as at balance date.
c.
Capital Commitments
There is no capital commitment as at reporting date.
d.
Contingent Liabilities
Under the Sale and Purchase Agreement (“SPA”) of the land owned under HDSB, HDSB will pledge
up to 20% of the Net Profits earned by TLJCC to be paid to the land vendor or the vendor’s named
beneficary for a period of 10 years.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
68
NOTES TO THE FINANCIAL STATEMENTS
24
Cash Flow Information
Reconciliation of cash flow from operations with loss after income tax
Profit/ (Loss) after income tax
Adjustment for:
Write off of property, plant and equipment
Depreciation
Gain on purchase on acquisition of HDSB
Write-off of goodwill
Foreign exchange gain- net
Finance income
Changes in assets and liabilities:
Decrease/(Increase) in trade and other receivables
(Increase)/Decrease in inventories
(Decrease)/Increase in trade and other payables
(Decrease)/Increase in deferred and current tax liabilities
Net cash generated from/ (used in) operating activities
25
Events After the Report Date
Consolidated Group
2018
S$
2017
S$
2,066,838
(3,030,810)
407
46,062
(1,560,772)
-
(665,711)
-
53,551
-
266,123
(98,138)
(63,713)
(100,618)
2,639,711
(1,173,537)
(27,071)
25,111
(1,632,814)
1,404,991
(163,041)
150,000
639,896
(2,503,327)
No matters or circumstances have arisen since the end of the financial, which significantly affected
or may significantly affect the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial years.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 69
NOTES TO THE FINANCIAL STATEMENTS
26
Related Party
The Group’s related parties include its associates and joint venture, KMP and post-employment benefit
plans for the Group’s employees.
Balances and transactions between the Company and its subsidiaries, which are related to the
Company have been eliminated on consolidation and are not disclosed in this note.
Disclosures relating to KMP are set out in Note 6 and in the remuneration report.
Balances and transactions between the Company and its associate, AAMS, incurred in the current
financial year are as follows:
Balances
Amount due from related associate
Amount due to related associate
Transactions
Management fee from related associate
2018
S$
31,432
68,332
6,014
2017
S$
-
-
-
During the financial year, MHV acquired 95.1% of HDSB as the major shareholder. Prior to the acquisition,
HDSB was fully held by Dato’ Dr Kai Chah Tan, as the sole director, who is also the Executive Chairman
of AAMG. The total consideration for the acquisition was S$6,188,915. (Refer to Note 8)
Prior to the acquisition of HDSB on 6 March 2018, management revenue of S$1,743,316 was billed from
AAMGPL to HDSB for the services provided under the Service Agreement dated 26 September 2017.
These services relates to costs and expenses incurred in providing professional services to HDSB on
the Johor Project.
Other than the above, there have been no other related party transactions in the current financial year.
27
Operating Segments
AASB 8 requires operating segments to be identified 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 identified its operating segments to be as
follows based on distinct operational activities:
(i) Provision of medical consultation and services in the hepatology and related fields
(liver segment); and
(ii) Provision of medical consultation and services in the radiation and oncology and related fields
(radiation and oncology segment);
(iii) Provision of healthcare management and consultancy services (management and consultancy
segment);
(iv) Development of real estate projects (healthcare real estate segment), established through
acquisition of HDSB (see Note 8); and
(v) Provision of corporate management services (corporate segment).
This is the basis on which internal reports are provided to the Board of Directors for assessing
performance and determining the allocation of resources within the Consolidated Group. Unless
stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker
with respect to operating segments, are determined in accordance with accounting policies that are
consistent to those adopted in the Annual Financial Statements of the group.
The current Consolidated Group operates primarily in four businesses, namely the provision of medical
consultation and services in the hepatology, radiation and oncology, healthcare management and its
related field advisory and healthcare real estate. The corporate segment relates to administrative
expenses at Group level.
Details of the performance of each of these operating segments for the financial years ended 31
August 2018 and 31 August 2017 are set out in the following pages:
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 70
NOTES TO THE FINANCIAL STATEMENTS
(i)
Segment Performance
Radiation
and
Oncology
Management
&
Consultancy
Healthcare
Real Estate
S$
S$
S$
Total
S$
Liver
S$
31 August 2018
External sales revenue
12,697,626
3,020,487
1,758,916
Inter-segment sales
8,731
-
1,124,766
Total segment revenue
12,706,357
3,020,487
2,883,682
-
-
-
17,477,029
1,133,497
18,610,526
(1,133,497)
17,477,029
-
-
-
15,166,882
3,957
15,170,839
(3,957)
15,166,882
Inter-segment elimination
Total Group revenue
Segment net profit/ (loss)
before tax
Other income
Total Group profit before tax
Income tax benefit
Total Group net profit after tax
(116,948)
246,100
1,082,918
(119,725)
1,092,345
804,607
1,896,952
169,886
2,066,838
Radiation
and
Oncology
Management
&
Consultancy
Healthcare
Real Estate
S$
S$
S$
Total
S$
Liver
S$
31 August 2017
External sales revenue
13,171,254
1,966,084
29,544
Inter-segment sales
3,957
-
-
Total segment revenue
13,175,211
1,966,084
29,544
Inter-segment eliminations
Total Group revenue
Segment net profit/(loss)
before tax
Other expenses
Total Group loss before tax
Income tax expense
Total Group net loss after tax
(851,213)
208,578
(1,529,742)
-
(2,172,377)
(709,054)
(2,881,431)
(149,379)
(3,030,810)
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
71
NOTES TO THE FINANCIAL STATEMENTS
(ii)
Segment assets
Radiation
and
Oncology
Management
&
Consultancy
Healthcare
Real Estate Corporate
S$
S$
S$
S$
Liver
S$
Total
S$
31 August 2018
Segment assets
6,103,337
1,550,073
7,895,266 9,045,446 25,627,724
50,221,846
Reconciliation of segment assets to Group assets:
Inter-segment eliminations
Total Group assets
Segment asset increases in the year
(29,065,555)
21,156,291
Capital
expenditure
through business
combination
Capital
expenditure
Total
31 August 2017
-
-
84,108
84,108
1,200
1,200
-
-
-
8,360,687
627,590
8,988,277
-
-
-
8,360,687
712,898
9,073,585
Radiation
and
Oncology
Management
&
Consultancy
Healthcare
Real Estate Corporate
S$
S$
S$
S$
Liver
S$
Total
S$
Segment assets
7,119,366
895,093
5,457,186
-
3,647,853
17,119,498
Reconciliation of
segment assets to
Group assets:
Inter-segment eliminations
Total Group assets
(1,573,505)
15,545,993
Segment asset increases in the year
Capital
expenditure
4,849
-
-
-
4,849
-
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 72
NOTES TO THE FINANCIAL STATEMENTS
(iii)
Segment liabilities
Radiation
and
Oncology
S$
Management
&
Consultancy
S$
Liver
S$
Healthcare
Real Estate Corporate
S$
S$
Total
S$
31 August 2018
Segment liabilities
(4,939,040)
(480,331)
(8,589,309)
(2,549,110)
(7,766,567) (24,324,357)
Reconciliation of segment liabilities to Group liabilities:
Inter-segment eliminations
Total Group liabilities
18,606,057
(5,718,300)
Radiation
and
Oncology
S$
Management
&
Consultancy
S$
Liver
S$
Healthcare
Real Estate Corporate
S$
S$
Total
S$
31 August 2017
Segment liabilities
(5,836,637)
(242,827)
(7,293,295)
- (4,610,249) (17,983,008)
Reconciliation of segment liabilities to Group liabilities:
Inter-segment eliminations
Total Group liabilities
(iv) Revenue by geographical location
12,042,275
(5,940,733)
Revenue attributable to external customers is disclosed below, based on the location of where the
revenue was derived:
Singapore
Asia (ex-Singapore)
Others
Total revenue
(v)
Assets by geographical location
Assets by geographical location:
Australia
Singapore
Malaysia
Myanmar
Total assets
Consolidated Group
2017
2018
S$
S$
14,694,885
15,532,860
154,632
1,827,040
117,129
317,365
15,166,882
17,477,029
Consolidated Group
2018
S$
2017
S$
2,229,675
3,118,012
8,674,333
12,427,981
10,106,038
146,245
-
-
21,156,291
15,545,993
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 73
NOTES TO THE FINANCIAL STATEMENTS
(vi) Major Customers
The Group is not reliant on any one major customer to whom it provides its products or services.
28
Financial risk management policies
The Group’s financial instruments consist mainly of cash at bank, accounts receivable and payable.
The totals for each category of financial instruments, measured in accordance with AASB 139 as
detailed in the accounting policies to the financial statements, are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Total financial liabilities
Consolidated Group
2018
S$
2017
S$
8,928,738
9,174,730
2,820,867
6,127,377
11,749,605
15,302,107
(5,642,378)
(5,940,733)
(5,642,378)
(5,940,733)
Financial risk management policies
The Board is responsible for monitoring and managing financial risk exposures of the Group.
Specific financial risk exposures and management
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 flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the
Group holds financial instruments which are other than the functional currency of the Group
which is the Singapore dollar.
(i) 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.
(ii) Sensitivity analysis
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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 74
NOTES TO THE FINANCIAL STATEMENTS
(b) Credit risk exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as
contracted.
The credit risk on financial assets of the entity which have been recognised in the statement of
financial position, is the carrying amount, net of any allowance for credit losses.
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.
Apart from the allowance for credit losses as disclosed in Note 12, no other receivables are
considered past due or impaired.
(c) Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities.
All financial assets and liabilities as disclosed above have maturities within one year for the 31
August 2018 financial year.
The Group manages liquidity risk by monitoring forecast cash flows.
(d) Treasury risk management
The Board meets on a regular basis to analyse financial 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
financial targets, whilst maintaining the effects on financial performance. Risk is also minimised
through investing surplus funds in financial institutions that maintain a high credit rating or in
entities that the Board has otherwise cleared as being financially sound.
(e) Fair values of financial assets and liabilities
Fair value represents the price that would be received to sell an asset or paid to transfer a liability
in an ordinary transaction between market participants at the measurement date.
The carrying values of financial instruments approximate their fair values.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 NOTES TO THE FINANCIAL STATEMENTS
29
Parent Company Information
75
Parent entity
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Total net assets
Equity
Issued capital
Accumulated losses
Foreign currency revaluation reserve
Total equity
Financial performance
Loss for the year
Other comprehensive (expense)/income
Total comprehensive loss
2018
S$
2017
S$
6,737,334
3,649,838
9,159,693
6,246,612
15,897,027
9,896,450
(459,037)
(459,037)
(291,190)
(291,190)
15,437,990
9,605,260
30,315,365
26,019,305
(14,034,181)
(16,484,479)
(843,194)
70,434
15,437,990
9,605,260
(1,347,914)
(4,421,664)
(913,628)
503,472
(2,261,542)
(3,918,192)
Included in the loss for the year is a S$966,114 write down (2017: S$3,798,212) of investment in
subsidiary to the net asset of the Group 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.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 76
30
Company Details
The registered office of the Company is:
25 Peel Street
Adelaide SA 5000
The principal place of business is:
Asian American Medical Group
6A Napier Road,
Gleneagles Hospital Annexe Block #02-37,
Singapore 258500
Singapore centres:
Asian American Liver Centre Pte Ltd
6A Napier Road,
Gleneagles Hospital Annexe Block #02-37,
Singapore 258500
Asian American Radiation & Oncology Pte Ltd
6A Napier Road,
Gleneagles Hospital Annexe Block #02-37,
Singapore 258500
Asian American Medical Group Pte Ltd
6A Napier Road,
Gleneagles Hospital Annexe Block #02-37,
Singapore 258500
Malaysia centre:
iHEAL Medical Centre
Level 7 & 8, Annexe Block, Menara IGB,
Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur,
Malaysia
Myanmar centre:
Grand Hantha International Hospital
No.3, Corner of Nar,
Nat Taw Road & Lower Kyee Myindaing Kanner Road,
Kamaryut Township Yangon, Myanmar
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 77
DIRECTORS’ DECLARATION
The directors of Company declare that:
(a)
the financial statements and notes, as set out on pages 39 to 76, are in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the financial position as at 31 August 2018 and of the performance
for the year ended on that date of the Consolidated Group; and
(ii) complying with Accounting Standards.
(b)
(c)
(d)
the Executive Director and Group Chief Financial Officer have declared that:
(i)
the financial records of the Company for the financial year have been properly maintained in
accordance with s286 of the Corporations Act 2001;
(ii) The financial statements and notes for the financial year comply with the Accounting Standards;
and
(iii) The financial statements and notes for the financial year give a true and fair view.
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.
complying with International Financial Reporting Standards as disclosed in Note 2 to the financial
statements;
This declaration is made in accordance with a resolution of the Board of Directors.
Dato’ Dr Kai Chah Tan
Director
2 November 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
78
Grant Thornton House
Level 3
170 Frome Street
Adelaide, SA 5000
Correspondence to:
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
Independent Auditor’s Report
To the Members of Asian American Medical Group Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Asian American Medical Group Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 August 2018, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 31 August 2018 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
79
Key audit matter
Revenue recognition – note 2(p), 3 and 12
The Group generated S$17,477,029 in revenue for the year
ended 31 August 2018. Revenue is predominately generated
from specialised medical services which are driven by patient
volumes. Revenue from the sale of medication is recognised
at the point of delivery to the patient. There is a risk of
improper revenue recognition, particularly with the occurrence
of revenues at year end given the significant size of accounts
receivable at 31 August 2018.
Revenue was considered a key audit matter as it represents a
key measurement of the Group’s performance and growth.
How our audit addressed the key audit matter
Our procedures included, amongst others:
Documenting the processes and assessing the internal
controls relating to revenue processing and recognition
for significant revenue streams;
Performing analytical procedures by comparing against
audit expectations to understand the movements and
trends in revenue;
Analysing a sample of revenue transactions from the
general ledger to source data to confirm appropriate
revenue recognition had been applied;
Performing cut off testing to ensure that revenue
transactions around year end have been recorded in the
correct period;
Reviewing the aging profiles of accounts receivable to
identify any issues in aging that warrant further
investigation;
Confirming a sample of customer balances to subsequent
receipts, contracts and invoices, and government
guarantees where applicable; and
Assessing the adequacy of the Group's revenue
disclosures within the financial statements.
Gain on purchase relating to acquisition of HDSB – note
2(c) and 8
On 6 March 2018, Million Health Ventures Pte Ltd ("MVH")
completed the acquisition of 95.1% Hippocrates Development
Sdn Bhd (“HDSB”). Prior to the acquisition, HDSB was wholly
owned by Dato’ Dr Tan Kai Chah, the Executive Chairman
and single largest shareholder of AAMG.
In accordance with AASB 3 Business Combinations, a
business combination is accounted for by applying the
acquisition method, unless it is a combination involving entities
or businesses under common control.
The Group has determined that the transaction, which
completed on 6 March 2018, met the conditions in AASB 3
and applied the acquisition method of accounting resulting in a
bargain gain on purchase of $1,560,772.
This area is a key audit matter due to the technical complexity
of the transaction, the judgements and estimates used in the
valuation of net assets acquired and the allocation of the
purchase price, which resulted in the bargain gain on
acquisition.
Our procedures included, amongst others:
Reviewing the terms and conditions of the share
purchase agreement;
Reviewing management’s technical accounting position
paper relating to the transaction, including assessment of
the sufficiency of the judgements and estimates taken in
accounting for this acquisition under AASB 3;
Evaluating management’s expert engaged in the
valuation of the key asset acquired in the business
combination;
Reviewing the report prepared by the valuation expert in
relation to the valuation of the key asset acquired in the
business combination;
Evaluating the assessment performed by auditors
experts, used in the assessment of the purchase price
allocation; and
Assessing the adequacy of the Group's disclosures within
the financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 31 August 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
80
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 31 August 2018.
In our opinion, the Remuneration Report of Asian American Medical Group Limited, for the year ended 31 August 2018
complies with section 300A of the Corporations Act 2001.
Responsibilities
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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B K Wundersitz
Partner – Audit & Assurance
Adelaide, 2 November 2018
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
81
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 1 November 2018.
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
149
55
41
46
34
325
-
-
-
-
-
-
There were 198 holders of less than marketable parcel of ordinary shares.
The percentage of the total holdings of the twenty largest holders of ordinary shares was 98.75 per cent.
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018
82
SHAREHOLDER INFORMATION
B.
Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Citicorp Nominees Pty Limited
Kong Meng Ang
Ordinary shares
Number held
Percentage
147,715,347
46,062,300
Sultan Ibrahim Ibni Almarhum Sultan Iskandar Al-Haj
40,000,000
HSBC Custody Nominees (Australia) Limited
Russing Med Holdings Pte Ltd
Zhi Cheng Ang
Chin Soon Ong
Tye Wee Thin
BNP Paribas Noms Pty Ltd (DRP)
Aspire Strategy Pte Ltd
Khai Ping Wun
J P Morgon Nominees Australia Limited
Dr Kang Hoe Lee
Dr Huat Seong Saw
Hiroshi Tatara
Ravindran Govindan
Harry Vui Khiun Lee
Meng Yau Yeoh
Arabesque Unit Trust Pty Ltd
Boon Hwa Koh
33,482,068
21,000,000
12,062,300
7,000,000
5,000,000
4,771,900
4,000,000
3,000,000
2,694,001
2,500,040
1,000,000
1,000,000
699,483
561,915
457,000
317,400
220,000
43.73
13.64
11.84
9.91
6.22
3.57
2.07
1.48
1.41
1.18
0.89
0.80
0.74
0.30
0.30
0.21
0.17
0.14
0.09
0.07
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 SHAREHOLDER INFORMATION
83
C.
Substantial holders
Substantial holders in the company are set out below:
Citicorp Nominees Pty Limited
Kong Meng Ang
Sultan Ibrahim Ibni Almarhum Sultan Iskandar Al-Haj
HSBC Custody Nominees (Australia) Limited
Russing Med Holdings Pte Ltd
D.
E.
Voting rights
Please refer Note 18.
On-market buy back
There are no current on-market buy back.
Number held
Percentage
147,715,347
46,062,300
40,000,000
33,482,068
21,000,000
43.73
13.64
11.84
9.91
6.22
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 84
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK
CREATING A LASTING LEGACY IN HEALTHCAREASIAN AMERICAN MEDICAL GROUP LIMITEDANNUAL REPORT 2018 Asian American Medical Group Limited
www.aamg.co
In collaboration with UPMC
6A Napier Road, Gleneagles Hospital
Annexe Block #02-37
Singapore 258500
T (65) 6476 2088 F (65) 6476 3088
E enquiry@aamg.co