BTC HEALTH | ANNUAL REPORT
PG 0
Contents
2
Chairman’s
Letter
17
Financial
Report
42
Independent
Auditor Report
4
Directors
Report
40
Directors
Declaration
46
Shareholder
Information
11
Corporate
Governance
Statement
41
Auditors
Independence
Declaration
48
Corporate Directory
BTC HEALTH | ANNUAL REPORT
PG 1
Chairman's letter
Last year we changed the company name to BTC health in order to
more effectively communicate the strategic intent of the group and
to position the business as a provider of innovative pharmaceutical
products and medical devices. We believe that the combined factors
of an ageing population, increased healthcare expenditure, new
technologies and the constant striving for better health outcomes
makes this a particularly exciting and relevant space in which to
invest and build.
BTC health has a vision to become a leading supplier of innovative
medical products in Australia and New Zealand and our team is
motivated by the opportunity to provide patients with greater access
to some of the best specialised therapeutics and medical devices
from around the world
I am pleased to report that in the last 12-months we have taken decisive steps toward building BTC health as a
group of high-growth businesses in the healthcare space. On 31 May 2019, BTC Speciality Health acquired the
hospital infusion business from Admedus Australia for a purchase price of $6.3m. The acquisition included
$1.75m of working capital, the novation of an 8-year agreement for the exclusive distribution rights for the
ambIT® infusion pumps in Australia and New Zealand, as well as the transfer of ten experienced hospital sales
personnel and an established customer base. We recognised the ambIT® infusion pumps to be high quality
devices with good growth potential in both the private and public hospitals throughout Australia and New
Zealand. This business acquisition is in itself transformative, providing us a strong platform for growth and an
infrastructure which will allow for a range of new product introductions in the hospital channel.
Since completion of the transaction we have moved quickly to integrate the people, operations, IT and
administration into BTC health and the product distribution and customer service functions into Sigma. We
have also taken this opportunity to invest in our quality and inventory control systems in anticipation of future
growth. We are planning to launch episil® mouth spray later this year as a new treatment for oral pain in
cancer patients and subject to TGA approval we will introduce Chlorasolv, a novel wound care product, in the
second half of next year.
In May we raised $9.2m of new equity capital in order to fund the hospital infusion acquisition. We received
very strong support from existing shareholders, and we were furthermore pleased to welcome Sigma
Healthcare as a new 10% shareholder. Our cash position at 30 June 2019 was $3.9m and our investment plan
remains fully compliant with the requirements of being a registered Pooled Development Fund (PDF). Given
the potential value that the PDF status confers to shareholders, the Board will continue to take all reasonable
steps to maintain this.
Our Bio101 business which provides accounting, tax and company administration services continued to grow
its client base and service offering during the year. I am pleased to report that the business consistently
performed ahead of expectations and as such we increased the fair value of this investment by 35% to
$375,000. We expect this positive trend will continue over the next 12 months.
In August 2019 we welcomed Bruce Hewett to the board as a non-executive Director. Bruce brings a wealth of
relevant industry experience and insights and we look forward to him making a very positive contribution to
our growth plans. Peter Mears, previously of Device Technologies has joined as an advisor on new business
opportunities and we consider ourselves very fortunate to be able to benefit from his many years of industry
expertise.
We have created a strong platform for growth, and we are optimistic about the company's prospects for the
year ahead. Our focus will be on ensuring optimum operational effectiveness of the hospital business, while
pursuing organic growth within the business and incremental growth from new products or new businesses.
BTC HEALTH | ANNUAL REPORT
PG 2
Our goal is to deliver strong underlying growth and create a sustainable and profitable business within a
compliant Pooled Development Fund.
On behalf of the Board, I wish to thank you for your continued support of BTC health.
Dr. Richard S Treagus
Chairman
BTC HEALTH | ANNUAL REPORT
PG 3
Directors’ Report
The directors of BTC health Limited present their report on the audited financial statements of BTC health
Limited for the year ended 30 June 2019.
Directors
The following persons were directors of BTC health Limited (“the Company”) during the whole
of the financial year and up to the date of this report, unless stated otherwise:
-
-
Richard Spencer Treagus
- Peter John Jones
Jonathan Charles Pilcher
- Bruce Alwyn Hewett (appointed 5 August 2019)
Principal Activities
BTC health is a Pooled Development Fund, registered under the Pooled Development Funds Act 1992. The
Company continues to actively seek investment opportunities in entities operating in the biotechnology / life-
science sectors.
Review of Operations and Results
BTC health’s wholly owned investee company BTC Speciality Health acquired the Hospital Infusion Business
from Admedus Limited during the financial year. The acquisition was funded via a two-tranche capital raise by
BTC health to institutional and sophisticated investors along with a share purchase plan for existing
shareholders. The acquisition gives the BTC health group an infrastructure and a strong platform for growth.
Revenue from continuing operations for the year increased to $187,763 (2018: $62,937). Operating loss after
income tax decreased to $692,742 (2018: $1,467,834), mainly due to the 2018 loss on sale of Biointelect,
partially offset by an increase of $130,000 in the fair value of the investment in Bio101group Pty Ltd in 2019.
Financial Position
At 30 June 2019, the company’s net assets were $11,341,485 compared with $2,973,002 at 30 June 2018. The
increase in net assets was mainly due to the capital raise and additional investment into BTC Speciality Health
Pty Ltd. Cash reserves as at 30 June 2019 were $3,942,921, compared with $2,649,629 at 30 June 2018. The
net tangible asset backing per share as at 30 June 2019 equated to 4.64 cents (2018: 2.27 cents).
Dividends
No dividends have been declared in respect of the financial year ended 30 June 2019 (2018: nil).
Business Strategies and Future Prospects
BTC health’s investee company Bio101 provides a range of professional services to high-growth biotech,
medtech and pharmaceutical companies. BioImpact invests in and holds intellectual property rights for
pharmaceuticals and medical devices. BTC Speciality Health, which has recently expanded via the acquisition of
the hospital
in-licenced
infusion business, commercialises and distribute the BTC health group’s
pharmaceuticals and medical devices in the Asia/Pacific region.
BTC health is committed to supporting its investee companies’ business objectives in order that they grow
their respective service offerings, client base, revenues and ultimately their profitability. BTC health will
carefully evaluate additional
life sciences sector, more specifically,
technologies and companies that in the Board’s view will benefit from greater access to management
expertise and development capital.
investment opportunities
in the
BTC HEALTH | ANNUAL REPORT
PG 4
Information on Directors
Director
Experience
Special
Responsibilities
Particulars of Directors’ Interest
as at 16 August 2019
R S Treagus
P J Jones
J C Pilcher
B A Hewett
Shares
Options
Executive Chairman
23,050,198
-
Non-Executive
Director
17,074,323
-
BScMed, MBChB, MPharmMed, MBA,
MAICD. Dr Treagus is a physician and
entrepreneur with over 20 years’
the
experience
in all aspects of
and
international
pharmaceutical
biotechnology
industry. Currently a
Director of Neuren Pharmaceuticals
Limited.
Appointed 4 August 2014. Age 53.
and
Chartered Accountant. Mr Jones is a
successful investor in public and private
considerable
companies
investment
the
experience
biotechnology and life sciences sector.
Currently a Director of Site International
Limited.
has
in
Appointed 4 August 2014. Age 67.
Chartered Accountant. Mr Pilcher holds a
degree in biotechnology from the
University of Reading in the UK.
Currently the CFO and Company
Secretary of Neuren Pharmaceuticals
Limited.
Appointed 1 September 2015. Age 53.
Bruce graduated as a pharmacist and has
had over 30 years’ experience in all
aspects of the pharmaceutical industry.
Appointed 5 August 2019. Age 65
Non-Executive
125,000
-
Director
Non-Executive
45,000
-
Director
Company Secretary
Mr Stuart Jones has over 10 years’ financial management and administration experience within the accounting
profession and commerce. He is a member of Chartered Accountants Australia and New Zealand.
BTC HEALTH | ANNUAL REPORT
PG 5
Remuneration Report (Audited)
This report outlines the remuneration arrangements in place for key management personnel of BTC health
Limited - (the “company”).
The following persons acted as directors and were also the key management personnel of the company during
the financial year:
Richard Spencer Treagus
Peter John Jones
Jonathan Charles Pilcher
Remuneration Policy
The performance of the company depends upon the quality of its directors and executives. To prosper, the
company must attract, motivate and retain highly skilled directors and executives. The fees for services
provided by Directors have been determined contractually at arm’s length. The Board has not appointed a
Remuneration Committee and this function is being undertaken by the Board.
Peter Jones was paid a fixed non-executive director fee of $20,000 per annum. Jonathan Pilcher was paid a
fixed non-executive director and audit committee chairman fee of $40,000 per annum. The director fees are
determined by the board.
Richard Treagus is an executive director and receives a monthly executive director fee of $10,000, which
totalled $120,000 for the financial year. A service contract with PharmaConnect Pty Ltd (an entity associated
with Richard Treagus) may be terminated with one day’s written notice.
No Directors are entitled to long service leave or annual leave.
Company Performance and Link to Company Performance
Non-executive directors receive fixed rate remuneration, with no link to company performance.
The following table shows the revenue, the operating result and net assets of the company for the last 5 years
as well as the share price and earnings per share at the end of the respective financial years.
2015
2016
2017
2018
2019
Revenue from continuing operations
11,350
71,184
28,496
62,937
187,763
Investment fair value adjustment
-
-
-
144,900
130,000
Net Profit/ (Loss) after tax
(507,019)
(870,780)
(516,527)
(1,467,834)
(692,742)
Other Comprehensive Income (Loss)
Dividend Paid
Share Placement
Net Assets
-
-
-
-
-
-
-
-
-
-
277,143
2,318,124
1,973,346
347,628
8,849,798
1,036,015
2,489,135
3,978,873
2,973,002
11,341,485
Share price at Year end (in cents)
0.10
0.11
0.16
0.20
0.085
Basic earnings per Share (in cents)
(0.60)
(0.88)
(0.45)
(1.14)
(0.51)
BTC HEALTH | ANNUAL REPORT
PG 6
Remuneration of Directors:
2019
SHORT TERM
EMPLOYEE
BENEFITS
POST-
EMPLOYMENT
BENEFITS
SHARE
BASED
PAYMENTS
OTHER LONG-
TERM
BENEFITS
$
$
Salary and Fees
Superannuation
R S Treagus
(Chairman)
P J Jones
(non-executive)
J C Pilcher
(non-executive)
120,000
20,000
36,530
Total Remuneration
176,530
-
-
3,470
3,470
$
-
-
-
-
$
-
-
-
-
SHORT TERM
EMPLOYEE BENEFITS
POST-
EMPLOYMENT
BENEFITS
SHARE BASED
PAYMENTS
OTHER LONG-
TERM BENEFITS
2018
R S Treagus
(Chairman)
P J Jones
(non-executive)
B A Hancox *
(non-executive)
J C Pilcher
(non-executive)
J R Herz #
(non-executive)
$
$
Salary and Fees
Superannuation
120,000
20,000
18,333
-
-
-
36,530
3,470
$
-
-
-
-
-
-
(10,498)
Total Remuneration
194,863
3,470
(10,498)
* Resigned 31 May 2018
# Resigned 20 April 2018
Share based payments
$
-
-
-
-
-
-
TOTAL
$
120,000
20,000
40,000
180,000
TOTAL
$
120,000
20,000
18,333
40,000
(10,498)
187,835
No directors of the Company received any share-based payments as part of their remuneration during the
financial year ended 30 June 2019 or 2018.
BTC HEALTH | ANNUAL REPORT
PG 7
Remuneration Practices
No director appointed during the period received a payment as part of his or her consideration for agreeing to
hold the position. The remuneration of each director has been established on the basis of a flat fee, inclusive
of any superannuation benefit. Thus, there is no direct link between performance and the level of
remuneration.
Share holdings
The numbers of shares in the company held during the financial year by each director of BTC health Limited,
including their personally-related entities, are set out below:
Year ended 30 June 2019
NAME
BALANCE
AT THE
START OF
THE YEAR
ADDITIONS
OTHER NET
CHANGES
DURING THE
YEAR
BALANCE
AT THE END OF THE YEAR
Ordinary shares
R S Treagus
P J Jones
J C Pilcher
22,237,698
187,500
15,711,823
1,272,500
-
125,000
-
-
-
22,425,198
16,984,323
125,000
Year ended 30 June 2018
NAME
BALANCE
AT THE
START OF
THE YEAR
ADDITIONS
OTHER NET
CHANGES
DURING THE
YEAR
BALANCE
AT THE END OF THE YEAR
Ordinary shares
R S Treagus
P J Jones
B A Hancox
J C Pilcher
J R Herz
Unlisted Options
17,313,371
13,787,496
4,924,327
1,924,327
-
-
-
-
10,100,000
924,327
-
-
-
-
(5,000,000)^
(6,024,327)*
J R Herz
1,000,000
-
(1,000,000)#
22,237,698
15,711,823
-
-
-
-
*Net change relates to the balance of the shares held at the date of resignation of key management personnel.
^Sale of shares to facilitate the purchase of Biointelect Pty Ltd from BTC health.
# Options were forfeited as part of the Biointelect sale to a related party of Jennifer Herz
Transactions with directors and director related entities
The terms and conditions of transactions with directors and their director related entities were no more
favourable than those available or which might reasonably be expected to be available, on similar transactions
to non-director entities on an arm’s length basis.
End of Remuneration Report
BTC HEALTH | ANNUAL REPORT
PG 8
Directors Meetings
The number of meetings of the company’s board of directors (including committees of directors) held for the
year ended 30 June 2019, and the number of meetings attended by each director were:
NUMBER OF
DIRECTOR
MEETINGS
NUMBER OF
DIRECTOR
MEETINGS
ATTENDED
NUMBER
OF AUDIT
COMMITTEE
MEETINGS
NUMBER OF
MEETINGS
ATTENDED
R S Treagus
P J Jones
J C Pilcher
8
8
8
8
8
8
-
2
2
-
2
2
Auditor Independence Declaration to the Directors
The directors have received the auditors’ independence declaration which is included on page 41 of this
report.
Insurance of Directors and Officers
During the financial year, the company paid a premium of $24,795 (2018: $18,595) including GST to insure the
directors and officers of the company. The liabilities insured are costs and expenses that may be incurred in
defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of
the company or a related body corporate.
Share Options
At the date of this report, BTC health Limited has 7,500,000 (2018: 3,000,000) unissued ordinary shares under
option.
Significant Events after the Balance Date
On 3 July 2019, 625,000 ordinary shares were issued to a related party of Richard Treagus as part of the capital
raise, as approved at the company’s extraordinary general meeting on the 21 June 2019. 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 company, the results of those operations or the state of affairs of the company in
future financial years.
BTC HEALTH | ANNUAL REPORT
PG 9
Likely Developments and Expected Results of Operations
BTC health is committed to supporting the business objectives of its wholly owned investee companies in
order that they grow their revenues and ultimately their profitability. BTC health also continues to seek and
carefully evaluate additional
life sciences sector, more specifically,
technologies and companies that in the Board’s view will benefit from greater access to management
expertise and development capital.
investment opportunities
in the
Environmental Regulation
The company is not subject to any significant environmental regulation in respect of its activities.
Proceedings on Behalf of the Board
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
Auditor & Non-Audit Services
Other than audit fees, Deloitte Touché Tohmatsu were paid a fee of $85,736 for corporate finance assistance
related to the business acquisition by BTC Speciality Health Pty Ltd from Admedus (2018: $Nil).
This directors’ report is signed in accordance with a resolution of directors made pursuant to s.298(2) of the
Corporations Act 2001.
R S Treagus, Chairman
Melbourne
16 August 2019
BTC HEALTH | ANNUAL REPORT
PG 10
Corporate Governance Statement
BTC health’s board of directors (“Board”) aims to ensure that the company operates with a corporate
governance framework and practices that promote an appropriate governance culture throughout the
organisation and that are relevant, practical and cost-effective for the current size and stage of development
of the business. The Board will continue to review the framework and practices as the business size and
complexity changes. The corporate governance statement was adopted 16 August 2019.
A description of the framework and practices is set out below, laid out under the structure of the ASX Listing
Rules and
(the
“Recommendations”) 3rd Edition issued by the ASX Corporate Governance Council in March 2014.
(the “Principles”) and Recommendations
the Corporate Governance Principles
Principle 1.
Lay solid foundations for management and oversight:
The Board is responsible for the overall corporate governance of the company. The Board acts on behalf of and
is accountable to the shareholders. The Board seeks to identify the expectations of shareholders as well as
other regulatory and ethical expectations and obligations. The Board is responsible for identifying areas of
significant business risk and ensuring mechanisms are in place to manage those risks adequately. In addition,
the Board sets the overall strategic goals and objectives, and monitors achievement of goals.
The Board has delegated the responsibility for the operation and administration of the company to the
Executive Chairman and the Company Secretary. The Board will ensure that management is appropriately
qualified to discharge its responsibilities.
The Board will ensure management’s objectives and activities are aligned with the expectations and risks
identified by the Board through a number of mechanisms including the following:
•
•
•
•
•
establishment of the overall strategic direction and leadership of the company;
approving and monitoring the implementation by management of the company’s strategic plan to
achieve those objectives;
reviewing performance against its stated objectives, by receiving regular management reports on
business situation, opportunities and risks;
monitoring and review of the companies controls and systems including those concerned with
regulatory matters to ensure statutory compliance and the highest ethical standards; and
review and adoption of budgets and forecasts and monitoring the results against stated targets.
BTC HEALTH | ANNUAL REPORT
PG 11
The Board sets the corporate strategy and financial targets with the aim of creating long-term value for
shareholders. In accordance with Recommendation 1.2, the Board undertakes appropriate checks before
appointing a new director or putting forward to shareholders a candidate for election and provides
shareholders with all material information in its possession relevant to a decision on whether or not to elect or
re-elect a director. The company has written agreements with each director of the company in accordance
with Recommendation 1.3. The Company Secretary is accountable directly to the Board on all matters to do
with the proper functioning of the Board, in accordance with Recommendation 1.4.
At this stage of the company’s development, considering the very small size of the workforce, the Board has
chosen not to establish a formal diversity policy or formal objectives for gender diversity, as described in
Recommendation 1.5. The company does not discriminate on the basis of age, ethnicity or gender and when a
position becomes vacant the company seeks to employ the best candidate available for the position. Currently
all directors are male.
Given the size and nature of the company a formal process for evaluating the performance of the Board and
the directors in accordance with Recommendation 1.6 has not been developed. The company currently has no
senior executives other than the Chairman and therefore does not have a process for evaluating their
performance, as described in Recommendation 1.7.
Principle 2.
Structure the Board to add value
The Board has not considered it necessary or value-adding to establish a separate Nomination Committee
(Recommendation 2.1). The selection, appointment and retirement of directors is considered by the full
Board, within the framework of the skills required. The Board may also engage an external consultant where
appropriate to identify and assess suitable candidates who meet the Board’s specifications. The composition
of the board is discussed regularly, and each director may propose changes for discussion.
The company does not currently have a skills matrix setting out the mix of skills that the Board seeks to
achieve in its membership (recommendation 2.2), due to the current structure and size of the company.
The current Board consists of 3 non-executive directors and 1 executive director. The skills and experience of
each of the directors are detailed in the Directors’ Report. Each of the current directors has held office
continuously since their date of appointment and these details are:
Current Directors
R S Treagus appointed 4 August 2014*
P J Jones appointed 4 August 2014*
J C Pilcher appointed 1 September 2015 (independent director)
B A Hewett appointed 5 August 2019 (independent director)
* R S Treagus and P J Jones are not considered to be independent as they are a related person to substantial
shareholders in BTC health.
The directors believe that the current structure, small size and membership profile of the Board provides the
maximum value to the business at this stage of its development, notwithstanding that they do not follow
Recommendations 2.4 and 2.5. The Board currently does not have a majority of independent directors
(Recommendation 2.4) and the chair is not independent (Recommendation 2.5). The Board will continue to
assess whether this is the optimum membership and structure for the business as it grows and develops.
The company currently does not have a formal program for inducting new directors (Recommendation 2.6),
due to the current structure and size of the company.
BTC HEALTH | ANNUAL REPORT
PG 12
Principle 3.
Promote ethical and responsible decision-making
The Board established a formal Code of Conduct on 19 of October 2016, which requires that Board members
and executives:
• will act honestly, in good faith and in the best interests of the whole company
• owe a fiduciary duty to the company as a whole
• have a duty to use due care and diligence in fulfilling the functions of office and exercising the powers
attached to that office
• will undertake diligent analysis of all proposals placed before the Board
• will act with a level of skill expected from Directors and key executives of a publicly listed company
• will use the powers of office for a proper purpose, in the best interests of the company as a whole
• will demonstrate commercial reasonableness in decision-making
• will not make improper use of information acquired as Directors and key executives
• will not disclose non-public information except where disclosure is authorised or legally mandated
• will keep confidential information received in the course of the exercise of their duties and such
information remains the property of the company from which it was obtained and it is improper to
disclose it, or allow it to be disclosed, unless that disclosure has been authorised by the person from
whom the information is provided, or required by law
• will not take improper advantage of the position of Director or use the position for personal gain or to
compete with the company
• will not take advantage of company property or use such property for personal gain or to compete
with the company
• will protect and ensure the efficient use of the company’s assets for legitimate business purposes
• will not allow personal interests, or the interest of any associated person, to conflict with the interests
of the company
• have an obligation to be independent in judgement and actions and Directors will take all reasonable
steps to be satisfied as to the soundness of all decisions of the Board
• will make reasonable enquiries to ensure that the company is operating efficiently, effectively and
legally, towards achieving its goals
• will not engage in conduct likely to bring discredit upon the company
• will encourage fair dealing by all employees with the company’s customers, suppliers, competitors
and other employees
• will encourage the reporting of unlawful/unethical behaviour and actively promote ethical behaviour
and protection for those who report violations in good faith
• will give their specific expertise generously to the company
• have an obligation, at all times, to comply with the spirit, as well as the letter of the law and with the
principles of this Code of Conduct
Principle 4.
Safeguard integrity in financial reporting
With regards to Recommendation 4.1, The Board has established an Audit Committee, which currently consists
of two non-executive directors, Jon Pilcher and Peter Jones, both of whom have financial qualifications and
experience. The independent director Jon Pilcher chairs the Committee. The Audit Committee currently does
not have three members or have a majority of independent directors. The Audit Committee met two times
during 2019 and these meetings were attended by all members.
BTC HEALTH | ANNUAL REPORT
PG 13
The current Committee operates under a charter approved by the Board on the 19 October 2016, a summary
of which is available on the BTC health website.
It is responsible for undertaking a broad review of, ensuring compliance with, and making recommendations in
respect of, the company's internal financial controls and legal compliance obligations. It is also responsible for:
•
•
•
•
•
•
•
review of audit assessment of the adequacy and effectiveness of internal controls over the company’s
accounting and financial reporting systems, including controls over computerised systems;
review of the audit plans and recommendations of the external auditors;
evaluating the extent to which the planned scope of the audit can be relied upon to detect
weaknesses in internal control, fraud and other illegal acts;
review of the results of audits, any changes in accounting practices or policies and subsequent effects
on the financial statements and make recommendations to management where necessary and
appropriate;
review of the performance and fees of the external auditor;
oversight of legal compliance including trade practices, corporations law, occupational health and
safety and environmental statutory compliance, and compliance with the Listing Rules of the ASX;
supervision of special investigations when requested by the Board;
In undertaking these tasks, the Audit Committee meets separately with management and external auditors
where required.
In accordance with Recommendation 4.2, the Board sought assurances in writing from the Executive Chairman
and the Company Secretary that in their opinion the financial records of the company for the financial year 30
June 2019 were;
(a) properly maintained in accordance with section 286 of the Corporations Act 2001; and
(b) the financial statements, and the notes to the financial statements, of the entity, for the financial year
ended 30 June 2019:
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
a.
professional reporting requirements; and
b.
give a true and fair view of the entity's financial position as at 30 June 2019 and of its
performance, as represented by the results of its operations and its cash flows, for the financial year
ended on that date.
The Board received those assurances on 16 August 2019.
In accordance with Recommendation 4.3, the Board ensures that its external auditor attends the AGM and is
available to answer questions from security holders relevant to the audit.
Principle 5.
Make timely and balanced disclosure
In accordance with ASX Listing rules, the company will notify ASX of any information which the Board considers
would be likely to have a material effect on the price or value of the company’s securities, or which could
influence a person to buy, sell or hold its securities.
Due to the size and stage of development of the business, the company does not have a formal written policy
for complying with its continuous disclosure obligations (Recommendation 5.1). However, the Board employs
review and approval processes that ensure timely, and balanced disclosure of material information concerning
the company, to shareholders and the general public.
The company also has a policy of ensuring that all media comment is provided by the Chairman only.
BTC HEALTH | ANNUAL REPORT
PG 14
Principle 6.
Respect the rights of shareholders
The Board strives to communicate effectively with shareholders, give them ready access to balanced and
understandable information about the business and make it easy for them to participate in shareholder
meetings.
In accordance with Recommendation 6.1, comprehensive information about the company and its governance
is provided via the website www.btchealth.com.au. This includes information about the Board, as well as
corporate governance policies. All announcements, presentations, financial information and meetings
materials disclosed to the ASX are placed on the website, so that current and historical information can be
accessed readily.
The company’s investor relations program facilitates effective two-way communication with investors
(Recommendation 6.2). The Chairman interacts with institutional investors, private investors, analysts and
media on an ad hoc basis, conducting meetings in person or by teleconference and responding personally to
enquiries. The Board seeks practical and cost-effective ways to promote informed participation at shareholder
meetings (Recommendation 6.3). This includes providing access to clear and comprehensive meeting
materials and electronic proxy voting. In accordance with Recommendation 6.4, shareholders are provided
with and encouraged to use electronic methods to communicate with the company and with the share
registry.
Principle 7.
Recognise and manage risk
The Directors have not considered it necessary to form a separate Risk Committee. The Board thus retains
direct responsibility, oversight and management for material business risks. (Recommendation 7.1)
The multiple risks inherent in operating the company and managing its investments are managed by a number
of means designed to avoid or minimise any adverse material financial impact. These include:
•
•
•
reviews by the Board of the scope, practical application and thoroughness of the system of internal
control and the company’s means of recognising and protecting itself against material business risk;
reports from the company’s insurance broker concerning the adequacy of insurance cover.
reports and recommendations received from the external auditor during the process of reviewing the
accounts and internal controls.
Given that the company’s business focus is upon providing patient equity capital to new Australian enterprises
endeavouring to exploit commercial opportunities in the life-sciences field, the major financial risk is that the
company’s investment will be lost or will materially lose value. This could occur under a variety of
circumstances including where the underlying enterprise subsequently fails, or commercially suffers in a
significant way, e.g. due to marketing difficulties or delays, product failure, serious management or funding
problems, etc. The innovative nature of the investee enterprises also tends to increase the investment risk
involved.
The Board endeavours to reduce investment risk by a number of means, including:
•
•
•
•
•
•
requiring all investments to be made in full compliance with the Pooled Development Funds Act 1992
and the general rationale of the PDF Program;
ensuring proper evaluation of new investment opportunities by means of a thorough due diligence
assessment;
ensuring investees have taken proper steps to secure their intellectual property rights;
ensuring each investee has a proper business plan, financial budgets and has established clear,
achievable, commercial goals;
diversifying investment over a number of different companies, each aiming at a different potential
market area or niche;
appointing a director to the board of an investee company when possible.
BTC HEALTH | ANNUAL REPORT
PG 15
The Board reviewed the company’s risk management framework and satisfied itself that it continues to be
sound on 16 August 2019. (Recommendation 7.2)
The Board considers that it is not necessary to have an internal audit function. The Board processes described
above are adequate, given the size and complexity of the business (Recommendation 7.3).
The company does not have a material exposure to economic, environmental or social sustainability risks.
(Recommendation 7.4)
Principle 8.
Remunerate fairly and responsibly
Due to the current size and structure of the company, the Board has not considered it necessary to form a
Remuneration Committee (Recommendation 8.1) and any remuneration matters are dealt with by the Board.
Particulars concerning Directors’ remuneration are set out in the Directors’ Report. The company’s current
policy is that non-executive directors receive only fixed cash remuneration.
The total remuneration pool for non-executive directors is approved by shareholders. There is currently only
one executive director and his executive fee has been determined and agreed upon by the board. The level of
the fee was determined by the directors based on professional experience, market forces and the amount of
time required to execute the role.
In accordance with Recommendation 8.3, any participants in an equity-based remuneration scheme are not
permitted to enter into any transactions (whether through the use of derivatives or otherwise) which limit the
economic risk of participating in the scheme.
BTC HEALTH | ANNUAL REPORT
PG 16
Financial Report - 30 June 2019
Contents Page
Financial Report
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
18
19
20
21
22
BTC health Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
BTC health Limited
Suite 201
697 Burke Road,
Camberwell VIC 3124
BTC HEALTH | ANNUAL REPORT
PG 17
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2019
Notes
2019
$
2018
$
Revenue from continuing operations
Investment fair value adjustment
Loss on disposal of unlisted investments
Loan write-off
Accounting and Company Secretarial expenses
Executive Directors fees
Non-Executive Directors fees
Employment expenses
Due Diligence expenses
Listing and Chess Fees
Legal Fees
Share based payments
Share registry fees
Other expenses from operations
2
6
6
10
Loss before income tax
187,763
130,000
-
-
(97,344)
(120,000)
(60,000)
(4,810)
(113,949)
(38,057)
(145,048)
(211,427)
(27,326)
(192,544)
(692,742)
Income tax benefit
3
-
62,937
144,900
(721,815)
(280,000)
(61,875)
(120,000)
(78,333)
(82,686)
-
(30,855)
(17,156)
(114,335)
(23,319)
(145,297)
(1,467,834)
-
Loss after income tax attributable to
members of BTC health Limited
(692,742)
(1,467,834)
Total comprehensive loss for the year
(692,742)
(1,467,834)
Loss per share
Basic and diluted loss per share
19
(0.51) cents
(1.14) cents
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
BTC HEALTH | ANNUAL REPORT
PG 18
Statement of Financial Position
As at 30 June 2019
Current Assets
Cash and cash equivalents
Other Assets
Total Current Assets
Non-Current Assets
Financial assets
Loans to investee companies
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Unclaimed monies
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Other reserves
Accumulated losses
Notes
2019
$
2018
$
4
5
6
7
8
3,942,921
163,639
4,106,560
6,375,100
1,237,691
7,612,791
2,649,629
83,719
2,733,348
245,200
336,885
582,085
11,719,351
3,315,433
158,032
219,834
377,866
377,866
90,479
251,952
342,431
342,431
11,341,485
2,973,002
9
10
11
53,104,855
346,914
(42,110,284)
44,255,057
158,455
(41,440,510)
Total Equity
11,341,485
2,973,002
The above statement of financial position should be read in conjunction with the accompanying notes.
BTC HEALTH | ANNUAL REPORT
PG 19
Statement of Cash Flows
For the year ended 30 June 2019
Cash Flows from Operating Activities
Receipts from customers
Interest received
Payments to suppliers and directors
Notes
2019
$
2018
$
90,080
17,763
(731,525)
-
22,937
(578,461)
Net cash used in operating activities
12
(632,682)
(555,524)
Cash Flows from Investing Activities
Transfer from unclaimed monies account
Payments for investments
Proceeds from the sale of investments
Loans to investee companies
6
(32,118)
(5,999,900)
-
(900,806)
(964)
(100)
700,000
(579,996)
Net cash (used in)/ generated by investing activities
(6,932,824)
118,940
Cash Flows from Financing Activities
Share placement (net of capital raising costs)
Proceeds from borrowings
Repayment of borrowings
Net cash generated by financing activities
6
6
8,849,798
4,000,000
(4,000,000)
8,849,798
-
-
-
-
Net increase/ (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
1,293,292
2,649,629
(436,584)
3,086,213
Cash and cash equivalents at the end of the Financial Year
4
3,942,921
2,649,629
The above statement of cash flows should be read in conjunction with the accompanying notes.
BTC HEALTH | ANNUAL REPORT
PG 20
Statement of Changes in Equity
For the year ended 30 June 2019
At 1 July 2017
Loss for the year
Other comprehensive income
Total comprehensive (loss) for the year
Transaction with owners in their capacity as
owners:
Share placement
(net of capital raising costs)
Share based payments
Forfeiture of share options
Issued
capital
$
Accumulated
losses
$
Other
reserves
$
Total
$
43,907,429
(40,018,133)
89,577
3,978,873
-
-
-
(1,467,834)
-
(1,467,834)
347,628
-
-
-
-
45,457
-
-
-
-
114,335
(45,457)
(1,467,834)
-
(1,467,834)
347,628
114,335
-
At 30 June 2018
44,255,057
(41,440,510)
158,455
2,973,002
At 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive (loss) for the year
Transaction with owners in their capacity as
owners:
Share placement
(net of capital raising costs)
Share based payments
Expiry of share options
44,255,057
(41,440,510)
158,455
-
-
-
(692,742)
-
(692,742)
8,849,798
-
-
-
-
22,968
-
-
-
-
211,427
(22,968)
2,973,002
(692,742)
-
(692,742)
8,849,798
211,427
-
At 30 June 2019
53,104,855
(42,110,284)
346,914
11,341,485
The above statement of changes in equity should be read in conjunction with the accompanying notes.
BTC HEALTH | ANNUAL REPORT
PG 21
Note 1 Summary of Significant Accounting Policies
The Financial Report of BTC health Limited for the year ended 30 June 2019
This general purpose financial report has been prepared in accordance with the requirements of Australian
Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001. The
financial report was authorised for issue in accordance with a resolution of the directors on 16 August 2019
BTC health Limited is a company limited by shares incorporated in Australia whose shares are publicly traded
on the Australian Securities Exchange.
Basis of Preparation
The financial statements are prepared in accordance with the historical cost convention, except for certain
assets which, as noted, are at fair value.
Fair value is 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, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating the fair value of an asset or a
liability, the Company takes into account the characteristics of the asset or liability if market participants would
take those characteristics into account when pricing the asset or liability at the measurement date. Fair value
for measurement and/or disclosure purposes in these financial statements is determined on such a basis,
except for share-based payment transactions that are within the scope of AASB 2.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based
on the degree to which the inputs to the fair value measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which are described as follows:
•
•
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
Both the functional currency and presentation currency of BTC health Limited is Australian dollars ($AUD).
For the purpose of preparing the financial statements, the Company is a for-profit entity.
Statement of Compliance
Compliance with Australian Accounting Standards ensures that the financial report, comprising the financial
statements and notes, complies with International Financial Reporting Standards (‘IFRS’).
Adoption of New and Revised Accounting Standards
New and amended Australian Accounting Standards that are effective for the current year
Impact of initial application of AASB 9 - Financial Instruments
This standard replaces AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 includes
revised guidance on the classification and measurement of financial instruments, including a new expected
credit loss model for calculation of impairment on financial assets and new general hedge accounting
requirements. It also carries forward guidance on recognition and derecognition of financial instruments from
AASB 139.
BTC HEALTH | ANNUAL REPORT
PG 22
Loans to investee companies and trade receivables – expected credit losses
The implementation of AASB 9 has resulted in a change to the methodology by which the Company has
assessed the provision for doubtful debts from the incurred loss model to the expected credit loss model. The
Company has adopted the simplified approach to measuring expected credit losses, which uses lifetime
expected loss allowance for all loans to investee companies and trade receivables.
The expected credit loss model requires the Company to determine the lifetime expected credit losses for
groups of financial assets with shared credit risk characteristics. An expected credit loss rate is then
determined for each group, based on the historic credit loss rates for each group, adjusted for any other
current observable data that may materially impact the group’s future credit risk.
The requirements of AASB 9 were adopted on 1 July 2018 and applied to the Company’s loans to investee
companies and trade receivables at that time.
The application of this policy did not result in changes to the amounts previously reported.
Impact of AASB 15 - Revenue from Contracts with Customers
The requirements of AASB 15 replace AASB 118 Revenue. AASB 15 establishes a single comprehensive five-
step model for entities to use in accounting for all revenue streams arising from contracts with customers with
two separate approaches for recognising revenue: at a point in time or over time.
The company’s only revenue stream is management fees earned through the provision of advisory and
consulting services to investee companies.
Management fee revenue is recognised over time as the customer simultaneously receives the benefits
provided by the entity’s performance.
The company adopted AASB 15 using the modified retrospective method of adoption. The application of this
policy did not result in changes to the amounts previously reported.
New and revised Australian Accounting Standards in issue but not yet effective
At the date of authorisation of the financial statements, the Company has not applied the following new and
revised Australian Accounting Standards that have been issued but are not yet effective:
AASB 16 - Leases
AASB 16 Leases is effective for annual reporting periods beginning on or after 1 January 2019 and for reporting
by the Company in the 30 June 2020 financial year.
The standard will result in almost all leases being recognised on the balance sheet, as the distinction between
operating and finance leases has been removed. Under the new standard, an asset (the right to use the leased
item) and a financial liability to pay rentals are recognised. The only exceptions are short term and low-value
leases. The accounting for lessors will not significantly change.
The directors do not anticipate that the application of the new standard will have a material impact on the
Company’s financial statements as the Company does not presently have any long-term lease commitments.
BTC HEALTH | ANNUAL REPORT
PG 23
Significant Accounting Policies
The following significant accounting policies have been adopted in the preparation and presentation of the
financial report.
(a)
Investment Entity
The company meets the definition of investment entities which are exempt from consolidation under
AASB10 Consolidated Financial Statements. Instead of consolidating controlled investments the
company measures its investments at fair value in the Statement of Financial Position and recognises
changes in the fair value through the profit or loss.
(b)
Revenue Recognition
The company recognises revenue from management fees for services rendered to investee
companies.
Revenue is measured based on the consideration to which the Company expects to be entitled in a
contract with a customer and excludes amounts collected on behalf of third parties. Management fee
revenue is recognised over time as the customer simultaneously receives the benefits provided by the
entity’s performance.
(c)
Interest Income
Interest income is recognised as the interest accrues (using the effective interest method, which is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial
instrument) to the net carrying amount of the financial asset.
(d)
Income Tax
Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as
reported in the statement of comprehensive income because of items of income or expense that are
taxable or deductible in other years and items that are never taxable or deductible. The company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted
by the end of the reporting period.
Deferred income tax is provided on all temporary differences at the statement of financial position
date between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except
where the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry-forward of unused tax
credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilised. Deferred income tax assets and
liabilities are measured at the tax rates expected to apply to the year when the asset is realised, or
the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the statement of financial position date.
BTC HEALTH | ANNUAL REPORT
PG 24
(e)
Financial Instruments
Financial assets and financial liabilities are recognised in the Company’s statement of financial
position when the Company becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit or loss.
Financial Assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are measured subsequently in their entirety at either amortised cost or
fair value, depending on the classification of the financial assets.
Classification of financial assets
The company classifies its financial assets as debt instruments measured subsequently at amortised
cost only if both the following criteria are met:
•
the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
•
Impairment of financial assets
The Company recognises a loss allowance for expected credit losses (ECL) on investments in debt
instruments that are measured at amortised cost and trade receivables. The amount of expected
credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition
of the respective financial instrument.
The Company always recognises lifetime ECL for trade receivables. The expected credit losses on
these financial assets are estimated based on the Company’s historical credit loss experience,
adjusted for factors that are specific to the debtors, general economic conditions and an assessment
of both the current as well as the forecast direction of conditions at the reporting date, including time
value of money where appropriate.
For all other financial instruments, the Company recognises lifetime ECL when there has been a
significant increase in credit risk since initial recognition. However, if the credit risk on the financial
instrument has not increased significantly since initial recognition, the Company measures the loss
allowance for that financial instrument at an amount equal to 12-month ECL.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with
the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument.
BTC HEALTH | ANNUAL REPORT
PG 25
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of direct issue costs.
Financial liabilities
All the Company’s financial liabilities are measured subsequently at amortised cost using the effective
interest method.
(f)
Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprises of cash at bank and in
hand and short-term deposits with an original maturity of three months or less that are readily
convertible to known amounts of cash and which are subject to insignificant risk of change in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(g)
Share-based payments
Equity-settled share-based payments to employees and others providing similar services are
measured at the fair value of the equity instruments at the grant date. The fair value excludes the
effect of non-market-based vesting conditions.
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Company’s estimate of the number of
equity instruments that will eventually vest. At each reporting date, the Company revises its estimate
of the number of equity instruments expected to vest as a result of the effect of non-market-based
vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit
or loss such that the cumulative expense reflects the revised estimate, with a corresponding
adjustment to reserves.
Equity-settled share-based payment transactions with parties other than employees are measured at
the fair value of the goods or services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the equity instruments granted,
measured at the date the entity obtains the goods or the counterparty renders the service.
(h)
Earnings / (Loss) per share
(i)
Basic earnings / (loss) per share
Basic earnings per share is determined by dividing net profit after income tax attributable to
members of the company, excluding any costs of servicing equity other than ordinary shares,
by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the year.
(ii)
Diluted earnings / (loss) per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per
share to take into account the after-income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary
shares.
BTC HEALTH | ANNUAL REPORT
PG 26
(i)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST. Cash
flows are presented in the statement of cash flows on a net basis.
(j)
Critical accounting judgments, estimates and assumptions
In applying the Company's accounting policies, management continually evaluates judgments,
estimates and assumptions based on experience and other factors, including expectations of future
events that may have an impact on the Company. All judgments, estimates and assumptions made are
believed to be reasonable based on the most current set of circumstances available to management.
Actual results may differ from the judgments, estimates and assumptions. Significant judgments,
estimates and assumptions made by management in the preparation of these financial statements are
outlined below:
Valuation of investments
The fair values of unlisted securities not traded in an active market are determined in accordance with
the directors’ valuations which are based on their experience in the industry.
The directors have used assumptions, such as estimated cash flows, project business growth plans
and other market data available in determining their valuation of the unlisted investments. Should
these assumptions change in subsequent periods the fair value may be impacted and accounted for
through the profit or loss. The directors have used a number of different valuation tools together to
determine the fair value of the investee companies, including projected discounted cash flows and
multiples of projected revenues and profits.
Note 2 Revenues from Ordinary Activities
Interest income
Management Fee
30 June 2019
$
17,763
170,000
187,763
30 June
2018
$
22,937
40,000
62,937
BTC HEALTH | ANNUAL REPORT
PG 27
Note 3 Income Tax
Major components of income tax expense for the years ended 30 June 2019 and 2018 are:
Statement of Profit or Loss and other Comprehensive Income
Current Income
Current income tax benefit
Deferred Income Tax
Relating to origination and reversal of temporary differences
Income tax expense reported in the statement of profit or loss and
other comprehensive income
A reconciliation of income tax expense / (benefit) applicable to
accounting profit / (loss) before income tax at the statutory income
tax rate to income tax expense at the company’s effective income tax
rate for the years ended 30 June 2019 and 2018 is as follows:
30 June 2019
$
30 June
2018
$
-
-
-
-
-
-
Accounting profit / (loss) before tax from continuing operations
(692,742)
(1,467,834)
At the statutory income tax rate of 25% (2018: 25%)
(173,186)
(366,959)
Temporary differences and tax losses not brought to account as a
deferred tax asset
Permanent differences
Temporary differences and tax losses not brought to account as a
deferred tax asset to retained earnings
At effective income tax rate of (0%) (2018: (0%))
Income tax expense reported in statement of profit or loss
The Company is a Pooled Development Fund (PDF) and is taxed at
15% on income and gains from investments in small to medium
enterprises and taxed at 25% on all other income.
205,686
(32,500)
222,730
144,229
-
-
-
-
-
-
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the
following items:
Tax Losses – Revenue
Temporary differences
Tax Losses – Capital
30 June 2019
$
30 June
2018
$
6,555,944
6,434,138
191,935
225,000
23,688
225,000
6,972,879
6,682,826
The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in
respect of this item because it is not probable that future taxable profit will be available in the immediate
future against which the company can utilise the benefits from.
BTC HEALTH | ANNUAL REPORT
PG 28
Note 4 Cash and cash equivalents
Cash at bank and on hand
30 June
2019
$
30 June
2018
$
3,942,921
3,942,921
2,649,629
2,649,629
Cash at bank and on hand earns interest at floating rates based on daily bank deposit rates.
Note 5 Other assets
Office bond
Prepayments
Trade debtors
30 June
2019
$
14,795
28,100
120,744
163,639
30 June
2018
$
14,795
23,742
45,182
83,719
Trade debtors as at 30 June 2019 are all related party transactions from BTC health’s subsidiaries. The
estimated loss allowance for trade debtors at 30 June 2019 is $nil (2018: $nil).
Note 6 Financial assets
30 June
2019
$
30 June
2018
$
Non - Current
Financial assets carried at fair value through profit or loss
Bio101group Pty Ltd
BioImpact Pty Ltd
BTC Speciality Health Pty Ltd
Total Financial assets carried at fair value through profit or loss
375,000
100
6,000,000
6,375,100
245,000
100
100
245,200
Total Non-Current Financial Assets
6,375,100
245,200
BTC health Limited, as an investment entity, has applied the exception to consolidation and instead
accounts for its investments in its subsidiaries at fair value through profit or loss in accordance with AASB
10.
Bio101group Pty Ltd is 100% owned by BTC health Limited. Bio101 provides a range of finance and
administration services to private, public and listed companies in the Australian life sciences sector. These
services include accounting, company secretarial, taxation, grant applications, payroll administration,
business development, royalty and partner management.
BioImpact Pty Ltd is 100% owned by BTC health Limited. BioImpact invests in and holds intellectual
property rights for pharmaceuticals and medical devices for the development and commercialisation in
the Asia/Pacific region. Technologies and products are sourced from a range of global third parties.
BTC HEALTH | ANNUAL REPORT
PG 29
BTC Speciality Health Pty Ltd is 100% owned by BTC health Limited. BTC Speciality Health commercialises
and distributes the BTC health group’s in-licenced pharmaceuticals and medical devices in the Asia/Pacific
region.
Bio101group, BioImpact and BTC Speciality Health’s principal place of business is 201/ 697 Burke Road,
Camberwell VIC 3124.
Unlisted shares
The fair value of each unlisted investment is determined by directors’ valuation, which is based on their
experience in the industry. The directors have used assumptions, such as estimated cash flows, project
plans and other market data available in determining their valuation of the unlisted investments. Should
these assumptions change in subsequent periods the fair value may be impacted and accounted for
through the profit or loss. The directors have used several different valuation tools to determine the fair
value of the investee companies, including discounted cash flows and multiples of revenues and profits.
Summary of changes in investments in financial assets
Opening
Loss on disposal of unlisted investment
Disposal of unlisted investment
Revaluation of unlisted investment
Additions
Closing
30 June 2019
$
245,200
-
-
130,000
5,999,900
6,375,100
30 June
2018
$
1,522,015
(721,815)
(700,000)
144,900
100
245,200
Bio101group Pty Ltd.’s valuation was increased in the period by $130,000 to $375,000.
Additions of $5,999,900 relate to an increased investment in the ordinary share capital of BTC Speciality
Health Pty Ltd. The cash advanced through this investment provided BTC Speciality Health with the
necessary funds to acquire the hospital infusion business from Admedus Limited in the year.
The investment was financed in part through a short term loan of $4,000,000 which was settled on 27
June 2019 with proceeds from the share placement (refer to note 9).
Note 7 Loans to investee companies
Non- Current
Loans to investee companies
BioImpact Pty Ltd
BTC Speciality Health Pty Ltd
30 June
2019
$
30 June
2018
$
347,691
890,000
1,237,691
161,885
175,000
336,885
The loans issued to BioImpact Pty Ltd and BTC Speciality Health Pty Ltd are non-interest bearing and
have no fixed terms of repayment. The estimated loss allowance for loans to investee companies at 30
June 2019 is $nil (2018: $nil).
BTC HEALTH | ANNUAL REPORT
PG 30
Note 8 Trade and other payables
Current
Trade creditors
Accruals
30 June
2019
$
142,832
15,200
158,032
30 June
2018
$
76,479
14,000
90,479
Trade and other payables are non-interest bearing and are generally settled on 30-day terms.
Note 9 Issued Capital
2019
Shares
2019
$
2018
Shares
2018
$
(a)
Ordinary Shares
Issued and fully paid – Opening Balance
130,296,532
44,255,057
127,107,604
43,907,429
Share Placement 28 November 2017
Capital raising costs
-
-
-
-
3,188,928
-
350,783
(3,155)
Share Placement 22 May 2019
Capital raising costs
31,841,127
-
2,547,290
(90,707)
Share Placement 13 June 2019
Capital raising costs
14,871,250
-
1,189,700
(17,850)
Share Placement 27 June 2019
Capital raising costs
67,533,874
-
5,402,710
(181,345)
-
-
-
-
-
-
-
-
-
-
-
-
Closing Balance
244,542,783
53,104,855
130,296,532
44,255,057
(b)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
company in proportion to the number of and amounts paid on the shares held. On a show of hands
every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote. The company does not have authorised capital or par
value in respect of its issued capital.
Note 10
Share options Reserve
Opening balance
Amortisation of unlisted share options
Forfeiture of options
Expiry of options
Closing balance
30 June 2019
$
158,455
211,427
-
(22,968)
346,914
30 June
2018
$
89,577
114,335
(45,457)
-
158,455
Unlisted options are valued using the Black-Scholes valuation model and are amortised over the vesting
period of the options. At the date of the report, there are 7,500,000 unlisted ordinary shares under
option (2018: 3,000,000). 7,000,000 of the 7,500,000 options granted have vested.
BTC HEALTH | ANNUAL REPORT
PG 31
The following share-based payment arrangements in the form of share options were in existence during
the current reporting period:
2017 Financial Year Grant
Options
Granted
Grant
Date
Grant date fair
value
$
Exercise
Price
$
Expiry
Date
Vesting
Date
500,000
20 April 2017
0.046
0.169
5 May 2019
5 May 2017
500,000
20 April 2017
0.076
0.169
20 April 2022
or 2 years after
vesting
25 February
2018*
*The options vested on receipt of marketing approval in Australia of the first licensed drug or device
resulting in an accelerated vesting charge in the year ended 30 June 2018 of $36,390.
2018 Financial Year Grant
Options
Granted
1,000,000
500,000
500,000
Grant
Date
Grant date
fair value
$
Exercise Price
$
Expiry
Date
Vesting
Date
28 November
2017
28 November
2017
28 November
2017
0.061
0.079
0.093
0.24375
0.24375
0.24375
28 November
2019
28 November
2020
28 November
2021
28 November
2017
28 November
2018
28 November
2019
The above options will only vest if the eligible recipients are employed or contracted by the BTC health
Group of companies on the date of vesting.
2019 Financial Year Grant
Options
Granted
Grant
Date
Grant date
fair value
$
Exercise
Price
$
Expiry
Date
Vesting
Date
5,000,000
21 June 2019
0.03
0.10
21 June 2022
21 June 2019
The above options were granted in relation to the settlement of a short term loan that was issued and
repaid in the year.
There has been no alteration of the terms and conditions of the above share-based payment
arrangements since the grant date.
BTC HEALTH | ANNUAL REPORT
PG 32
Fair value of share options granted in the year
The weighted average fair value of the share options granted during the 2019 financial year is $0.034
(2018: $0.073). Options were priced using a Black Scholes option pricing model. Where relevant, the
expected life used in the model has been adjusted based on management’s best estimate for the
effects of non-transferability and exercise restrictions, including the probability of meeting market and
service conditions attached to the option. Expected volatility was based on the historical share price
volatility in the 3 year period leading up to the grant date.
Inputs into the model
Grant date share price
Exercise price
Options Granted
Volatility
Dividend Yield
Risk free rate
2019 Tranche
0.08
0.10
5,000,000
73.95%
0.00%
1.25%
Note 11
Accumulated Losses
Accumulated losses at the beginning of the year
Forfeiture of share options
Expiry of share options
Total comprehensive loss for the year
Accumulated losses at the end of the year
Note 12
Cash Flow from Operating Activities
Reconciliation of Operating Loss after Income Tax to the Net
Loss after income tax
Adjustment for:
Increase in valuation of unlisted investment
Loan write-off
Loss on disposal of unlisted investment
Capital raising costs
Share based payments
Increase / (Decrease) in trade and other payables
(Increase) / Decrease in other assets
30 June 2019
$
30 June 2018
$
(41,440,510)
-
22,968
(692,742)
(42,110,284)
(40,018,133)
45,457
-
(1,467,834)
(41,440,510)
30 June 2019
$
30 June 2018
$
(692,742)
(1,467,834)
(130,000)
-
-
-
211,427
67,553
(79,920)
(144,900)
280,000
721,815
(3,155)
114,335
5,741
(61,526)
Net cash used in operating activities
(623,682)
(555,524)
BTC HEALTH | ANNUAL REPORT
PG 33
Note 13
Subsequent Events
On 3 July 2019, 625,000 ordinary shares were issued to a related party of Richard Treagus as part of the capital
raise, as approved at the company’s extraordinary general meeting on the 21 June 2019. 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 company, the results of those operations or the state of affairs of the company in
future financial years.
Note 14
Key Management Personnel
Name and position of key management personnel of the company in office at any time during the financial
year:
Directors and Executives
R Treagus – Executive Chairman
P Jones – Non-executive
J Pilcher – Non-executive
Remuneration of key management personnel
Information on remuneration of key management personnel is set out in the Remuneration
Report in the Directors Report.
Short term benefits
Post-employment benefits
Share based payments
Note 15 Remuneration of Auditors
Deloitte Touché Tohmatsu
Remuneration for audit or review of the financial statements
Remuneration for non-audit - corporate finance assistance related to the
business acquisition by BTC Speciality Health Pty Ltd
30 June 2019
$
30 June 2018
$
176,530
3,470
-
180,000
194,863
3,470
(10,498)
187,835
30 June 2019
$
30 June 2018
$
38,325
85,736
124,061
36,500
-
36,500
Note 16
Related Party Disclosures
BTC health received management fee income from consulting services to Bio101group Pty Ltd during the year
of $170,000 (2018: $40,000). The trade debtors balance receivable from Bio101 group Pty Ltd at 30 June 2019
amounted to $105,632 (2018: $45,182). These debtors have been received since year end.
Mr. Stuart Jones (Company Secretary) is a related party of Mr Peter Jones (non-executive director) as he is his
son. Stuart is paid by the hour for his services to BTC health. Stuart reports to and has all invoices approved by
Dr. Richard Treagus (Chairman). Remuneration received in 2019 was $97,344 (2018: $65,750).
Mr. Cameron Jones the Managing Director of Bio101group Pty Ltd (a wholly owned subsidiary of BTC health), is
also a related party of Mr. Peter Jones (non-executive director) as he is his son. Cameron’s remuneration was
determined by, and he reports to, Dr. Richard Treagus (Chairman). Remuneration received from Bio101group
Pty Ltd in 2019 was $130,000 (2018: $109,600).
BTC HEALTH | ANNUAL REPORT
PG 34
Note 17
Operating Segments
Operating segments have been identified on the basis of internal reports of the Company that are regularly
reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess
their performance. The chief operating decision maker has been identified as the Executive Chairman. BTC
health has a single operating segment, being the making and managing of investments in biotechnology and
pharmaceutical ventures.
Note 18
Financial Risk Management Objectives and Policies
Financial Risk Management
Overview
The company has exposure to the following risks from their use of financial instruments – interest rate risk,
credit risk, liquidity risk and market price risk. This note presents information about the Company’s exposure
to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the
management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The board reviews regularly the adequacy of the risk management framework in relation to the
risks faced by the company. The company’s principal financial instruments comprise cash and short-term
deposits and financial assets. The company has other financial instruments such as trade debtors and trade
creditors that arise directly from its operations. The company’s policy in relation to the valuation of
investments traded on organised markets, and unlisted investments has been described in Note 1(e).
Interest Rate Risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations in
interest bearing financial assets and liabilities that the company uses. The company’s financial assets which
are affected by interest rate risk are the company’s cash and cash equivalents and term deposits held. The
company manages its interest risk by using a mix of fixed and variable rates and trades only with recognised
credit worthy third parties.
The following table sets out the carrying amount, by maturity, of the financial instruments that are exposed to
interest rate risk:
30 June 2019
Financial Assets
Cash
Total financial assets
Financial liabilities -
Trade and other payables
Total financial liabilities
Net Financial Assets
Balance
$
Interest
Rate
Weighted Average
Effective Interest Rate
Floating
0.26%
N/A
-
3,942,921
3,942,921
158,032
158,032
3,784,889
BTC HEALTH | ANNUAL REPORT
PG 35
30 June 2018
Financial Assets
Cash
Total financial assets
Financial liabilities -
Trade and other payables
Total financial liabilities
Net Financial Assets
Balance
$
Interest
Rate
Weighted Average
Effective Interest Rate
Floating
0.98%
N/A
-
2,649,629
2,649,629
90,479
90,479
2,559,150
Fair value sensitivity analysis for fixed rate instruments
The company does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
company’s:
-
Loss for the year ended 30 June 2019 would decrease/increase by $34,200 (2018: decrease/increase
by $11,646). This is mainly attributable to the company’s exposure to interest rates on its variable
rate savings.
Credit Risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises principally from the company's cash and cash equivalents,
other assets and loans to investee companies. The company’s maximum exposure to credit risk at balance
date in relation to each class of recognised financial asset is the carrying amount of these assets.
Liquidity Risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company’s reputation. The following are the contractual
maturities of financial liabilities:
30 June 2019
Trade and other payables
Unclaimed monies
30 June 2018
Trade and other payables
Unclaimed monies
Carrying
amount
Contractual
cash flows
6 months or
less
$
$
$
(158,032)
(219,834)
(377,866)
(158,032)
(219,834)
(377,866)
(158,032)
(219,834)
(377,866)
(90,479)
(251,952)
(342,431)
(90,479)
(251,952)
(342,431)
(90,479)
(251,952)
(342,431)
Greater than 6
months, less than 1
year
Greater than
1 year
$
-
-
-
-
-
-
$
-
-
-
-
-
-
BTC HEALTH | ANNUAL REPORT
PG 36
Fair Value of Financial Assets and Liabilities
There is no difference between the fair values and the carrying amounts of the company’s financial
instruments. The company has no unrecognised financial instruments at balance date.
Market Price Risk
Equity price risk arises from financial assets held at fair value through profit or loss held as a part of the
company's operations. Investments within the portfolio are managed on an individual basis and all buy and sell
decisions are approved by the Board of Directors. The primary goal of the Company’s investment strategy is to
maximise investment returns on sale of investments. Unlisted investments are designated as a financial asset
held at fair value through profit or loss their performances are actively monitored, and they are managed on a
fair value basis.
Sensitivity analysis on changes in market equity prices
A change of 20% (based on the Board’s assessment of similar movements in the life sciences industry) in equity
prices at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown
below. The analysis is performed on the same basis for 2018.
30 June 2019
Financial assets carried at fair value
through profit or loss:
Unlisted investments
30 June 2018
Financial assets carried at fair value
through profit or loss:
Unlisted investments
Profit or loss
Equity
Carrying
Value
20%
increase
20%
decrease
20%
increase
20%
decrease
$
$
$
$
$
6,375,100
1,275,020
1,275,020
(1,275,020)
(1,275,020)
1,275,020
1,275,020
(1,275,020)
(1,275,020)
245,200
49,040
49,040
(49,040)
(49,040)
49,040
49,040
(49,040)
(49,040)
Fair value of financial instruments: Valuation techniques and
assumptions applied for the purposes of measuring fair value
The fair values of unlisted investments are determined in accordance by directors’ valuations, which are based
on their experience in the industry. Directors have used assumptions, such as estimated cash flows, project
plans and other market data available in determining their valuation of unlisted investments. Directors have
reviewed discounted cash flows and multiple of revenue and profit calculations to determine the fair value
holding costs of the investments.
BTC HEALTH | ANNUAL REPORT
PG 37
Name of Investment
Core Activity
Bio101group Pty Ltd
Finance and administration for life
science clients
Basis of Valuation
• Multiple of revenue based on actual
results for the year ended 30 June
2019
BioImpact Pty Ltd
In licence speciality pharmaceuticals
and medical devices
BTC Speciality Health Pty
Ltd
Commercialisation and distribution
of pharmaceuticals and medical
devices
•
•
Investment valuation on cost
incurred basis
Investment valuation on cost
incurred basis
Fair value measurements recognised in the statement of financial position:
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
a) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
b) Level 2 fair value measurements are those derived from inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
c) Level 3 fair value measurements are those derived from valuation techniques that include inputs for
the asset or liability that are not based on observable market data (unobservable inputs).
30 June 2019
Financial assets
Unlisted investments– Financial assets carried at
fair value through profit or loss
30 June 2018
Financial assets
Unlisted investments– Financial assets carried at
fair value through profit or loss
Level 1
Level 2
Level 3
Total
$
-
-
-
-
$
-
-
-
-
$
$
6,375,100
6,375,100
6,375,100
6,375,100
245,200
245,200
245,200
245,200
There were no transfers between levels during the year.
Reconciliation of Level 3 fair value measurements of financial assets
Opening balance
Total gains or losses:
- acquisitions
- disposals
- investment fair value adjustment
- loss on disposal of unlisted investments
Closing balance
2019
Total
$
245,000
5,999,900
-
130,000
-
6,375,100
2018
Total
$
1,522,015
100
(700,000)
144,900
(721,815)
245,200
Significant assumptions used in determining fair value of financial assets and liabilities
The fair value of unlisted investments are determined by directors’ valuations and assumptions, such as
impacts on estimated cash flows, project plans and market data available.
BTC HEALTH | ANNUAL REPORT
PG 38
Capital risk management
The Company objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. The management of the Company's capital is performed
by the Board. The company is not subject to externally imposed capital requirements. The Company’s overall
strategy remains unchanged from 2018.
The capital structure of the Company consists of cash and cash equivalents and equity attributable to equity
holders, comprising issued capital, reserves and retained earnings. Operating cash flows are used to maintain
and expand operations, as well as to make routine expenditu.res such as tax and general administrative
outgoings.
Categories of financial instruments
Financial assets
Cash and cash equivalents
Other assets
Loans to investee companies
Financial assets carried at fair value through profit or loss
Financial liabilities
Trade and other payables
Unclaimed monies
Note 19
Loss Per Share
30 June 2019
$
30 June 2018
$
3,942,921
163,639
1,237,691
6,375,100
158,032
219,834
2,649,629
83,719
336,885
245,200
90,479
251,952
Basic and diluted loss per share, based on the after tax
loss of $692,742 (2018: ($1,467,834)) *
(0.51) cents per
share
(1.14) cents per
share
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
134,946,441 shares
128,977,277 shares
30 June 2019
30 June 2018
*The options issued are not included in the diluted EPS as they are anti-dilutive.
Note 20
Contingent Liabilities
There were no contingencies of which the company is aware as at the date of this report.
BTC HEALTH | ANNUAL REPORT
PG 39
Directors’ Declaration
The directors declare that,
a)
b)
c)
in the director’s 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,
in the director’s opinion, the attached financial statements are in compliance with International
Financial Reporting Standards as disclosed in Note 1 to the financial statements,
in the director’s opinion, the attached financial statements and notes thereto are in accordance
with the Corporations Act 2001, including compliance with accounting standards and giving a
true and fair view of the financial position and performance of the entity, and
d)
the directors have been given the declarations required by s.295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the board of directors pursuant to section 295(5) of
the Corporations Act 2001.
R S Treagus
Chairman
Melbourne
16 August 2019
BTC HEALTH | ANNUAL REPORT
PG 40
Deloitte Touche Tohmatsu
ABN 74 490 121 060
550 Bourke Street
MELBOURNE VIC 3000
PO Box 78
MELBOURNE VIC 3001 Australia
Tel: +61 (0) 3 9671 7000
Fax: +61 (0) 3 9671 7001
www.deloitte.com.au
16 August 2019
The Board of Directors
BTC health Limited
Suite 201/697 Burke Road
CAMBERWELL VIC 3124
Dear Board Members
Auditor’s Independence Declaration to BTC health Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of BTC health Limited.
As lead audit partner for the audit of the financial statements of BTC health Limited for the
financial year ended 30 June 2019, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Anneke du Toit
Partner
Chartered Accountants
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL
(also referred to as “Deloitte Global”) and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL
does not provide services to clients. Please see www.deloitte.com/about to learn more.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
41
Deloitte Touche Tohmatsu
ABN 74 490 121 060
550 Bourke Street
Melbourne VIC 3000
GPO Box 78
Melbourne VIC 3001 Australia
Tel: +61 (0) 3 9671 7000
Fax: +61 (0) 3 9671 7001
www.deloitte.com.au
Independent Auditor’s Report
to the Members of BTC health Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of BTC health Limited (the “Company”) which comprises
the statement of financial position as at 30 June 2019, the statement of profit or loss and other
comprehensive income, the statement of changes in equity and the statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Company’s financial position as at 30 June 2019 and
of its financial performance for the year then ended; and
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 Company 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 confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of the Company, would be in the same terms if given to the
directors as at the time of this auditor’s report.
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 for 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.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte Network
42
Key Audit Matter
Unlisted shares held at fair value
Refer Note 6
The company invests in a portfolio of life
science organisations.
As at 30 June 2019, the company’s
investment portfolio consisted of three
unlisted companies carried at a fair value
of $6,375,100.
The valuation of these assets requires
significant management judgement.
How the scope of our audit responded to
the Key Audit Matter
Our procedures included, but were not limited
to:
Obtaining an understanding of the processes
undertaken by management to determine
the fair value of investments in the unlisted
companies within their portfolio;
Assessing and challenging management’s
valuation methodology and assumptions
applied, in conjunction with our valuation
specialists;
Evaluating the actual financial performance
of each of the investments by:
o Comparing
the
forecast
financial
information for the year and the plans
included in the investment business
case, to the actual financial and
operational results;
o Agreeing key account balances to
supporting reconciliations;
o Obtaining an understanding of key
customers contracts in place;
o Performing analytical procedures to
identify unusual trends or movements
in account balances; and
o Discussing business performance and
future business plans and forecasts,
including the adequacy of existing
funding, with management of the
investment company to assess whether
those forecasts are appropriate and are
consistent with the investment business
case.
We also assessed the appropriateness of the
disclosures in note 6 to the financial statements.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the Company’s annual report for the year ended 30 June 2019, 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.
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.
43
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 ability of the
Company 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 Company or to cease operations, or has 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the financial report, including
the disclosures, and whether the financial report represents the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
44
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of
most significance in the audit of the financial report of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 8 of the Directors’ Report for
the year ended 30 June 2019.
In our opinion, the Remuneration Report of BTC health Limited, for the year ended 30 June
2019, 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.
DELOITTE TOUCHE TOHMATSU
Anneke du Toit
Partner
Chartered Accountants
Melbourne, 16 August 2019
45
Shareholder Information
As at 15 August 2019
A. Spread of equity security holdings
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
B. Substantial holders
Ordinary
Shareholders
23
305
194
393
135
1,050
Unlisted
Option holders
-
-
-
-
4
4
Notices under Section 671B of the Corporations Act, disclosing a relevant interest in the company’s shares,
have been received from the following substantial holders as at the date of this report:
Name
Number of shares/votes
Voting power
NAOS ASSET MANAGEMENT LIMITED
LHC CAPITAL PARTNERS PTY LTD
SIGMA COMPANY LIMITED
RICHARD AND KAREN TREAGUS
PETER AND HELEN JONES
C. Equity security holders
48,165,801
26,284,910
25,000,000
23,050,198
16,984,323
19.65%
10.72%
10.22%
9.40%
6.95%
The names of the twenty largest holders of quoted equity securities are listed below:
Rank Name
A/C designation
Ordinary Shares held
1
2
3
4
5
6
7
8
9
NATIONAL NOMINEES LIMITED
UBS NOMINEES PTY LTD
MRS KAREN ELIZABETH TREAGUS
SIGMA COMPANY LIMITED
STUART ANDREW PTY LTD
SIGMA COMPANY LIMITED
MR CAMPBELL DINWOODIE TAYLOR
MRS SUSAN MAREE WHITING
WINDARRI INVESTMENTS PTY LTD
10
BNP PARIBAS NOMINEES PTY LTD
11 MS DESPINA MAKRIS
12
13
LINWIERIK INVESTMENTS PTY LTD
NAMARONG INVESTMENTS PTY LTD
14
PRITDOWN PTY LTD
15
THIRTY SIXTH VILMAR PTY LTD
16 MR NICHOLAS DERMOTT MCDONALD
HANSEN INVESTMENT
60,687,968
28,134,910
23,050,198
16,856,467
16,009,323
8,143,533
4,448,805
4,300,000
4,213,727
3,500,000
3,078,363
2,473,102
2,107,058
2,005,480
1,875,000
1,800,000
Voting
Percentage
24.75
11.48
9.40
6.88
6.53
3.32
1.81
1.75
1.72
1.43
1.26
1.01
0.86
0.82
0.76
0.73
BTC HEALTH | ANNUAL REPORT
PG 46
Rank Name
A/C designation
Ordinary Shares held
17
BNP PARIBAS NOMINEES PTY LTD
HUB24 CUSTODIAL SERV LTD DRP
GRAY LANE HOLDINGS PTY LTD
18
19 MR NICHOLAS DERMOTT MCDONALD
20
YORKSHIRE INVESTMENTS PTY LTD
Total
D. Less than marketable parcel holders
Voting
Percentage
0.73
0.66
0.57
0.53
1,780,600
1,627,804
1,386,363
1,309,144
188,787,845
77.00
The number of holders holding less than a marketable parcel based on the market price was 286.
E. Voting rights
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Options
There are no voting rights attached to unlisted options until they are exercised.
BTC HEALTH | ANNUAL REPORT
PG 47
Corporate Directory
Registered Office
BTC health Limited
Suite 201
697 Burke Road
CAMBERWELL VIC 3124
Principal Contacts
Richard Treagus
Chairman
T +61 417 520 509
rtreagus@btchealth.com.au
Stuart Jones
Company Secretary
T+ 61 3 9092 0470
sjones@btchealth.com.au
Link Market Services Limited
Tower 4, 727 Collins Street
MELBOURNE VIC 3008
Locked Bag A14
SYDNEY SOUTH NSW 1235
T 1300 554 474
F 02 9287 0303
Auditors
Deloitte Touché Tohmatsu
550 Bourke Street,
MELBOURNE VIC 3000
BTC HEALTH | ANNUAL REPORT
PG 48
BTC HEALTH | ANNUAL REPORT
PG 49
BTC HEALTH | ANNUAL REPORT
PG 50