ANNUAL
REPORT
YEAR ENDING 30 JUNE 2020
BTC HEALTH LIMITED I ASX: BTC
www.btchealth.com.au
Contents
2
Chairman’s
Letter
17
Financial
Report
3
Directors
Report
40
Directors
Declaration
42
Independent
Auditor Report
44
Shareholder
Information
11
Corporate
Governance
Statement
41
Auditors
Independence
Declaration
47
Corporate
Directory
BTC HEALTH | ANNUAL REPORT
PG 1
Chairman's letter
I am pleased to report that BTC health has made significant progress
over the last 12 months to realise it’s vision of becoming a leading
supplier of innovative medical products in Australia and New Zealand.
BTC health’s cornerstone investment, BTC Speciality Health, has
successfully completed the integration of the hospital infusion
business, purchased from Admedus Australia on 31 May 2019. The
business has established efficient and effective supply chain and
distribution systems, comparable with multinational healthcare
importantly, this foundation enables future
companies.
healthcare investments to be fully integrated in a timely manner,
yielding further benefit to our customers and incremental returns to
shareholders.
Most
The coronavirus pandemic has had a material impact on the anticipated growth for the 2019/20 financial year as
Governments in Australia and New Zealand cancelled elective surgeries in March 2020. Elective surgeries across
both countries have subsequently reopened, albeit on a staggered basis. It is expected that the number of elective
surgeries in public and private hospitals will continue to revert to pre-coronavirus pandemic volumes during the
September 2020 quarter. Sales to hospitals for the 2019/20 financial year were $5.8m, being 12% – 17% below our
pre-coronavirus forecast. The company has exercised strong expense and working capital controls throughout the
year, resulting in a group cash position of almost $2.8m at 30 June 2020. Demand for our products has increased
significantly in the new financial year, particularly in the private sector as surgeons work towards reducing elective
surgery back log. The business is well positioned for growth, with good inventory levels and a fully resourced sales
team across Australia and New Zealand working to onboard new accounts and maintain excellent customer service
of our existing loyal customer base.
The Board would like to thank its employees, customers, shareholders and supply partners for their support and
resilience over the coronavirus pandemic. Our American and European manufacturers have been quick to adapt to
our anticipated growth in forward demand. Sigma Healthcare has continued to maintain superior service levels to
hospitals, ensuring our products are available for surgeons in our shared approach to improve the health outcomes
of all patients.
The Board made the decision to sell its investment in BIO101 Group Pty Ltd, a non-core investment which
provides accounting, taxation and company secretarial services to companies in the life sciences and healthcare
sector. The transaction was completed on 31 July 2020 for $500k cash, which represents a 500% return on BTC
health’s initial investment in 2016, and consistent with the valuation recognised in BTC health’s accounts at 30 June
2020.
We are in the early phase of BTC health’s growth strategy and the future market fundamentals remain strong. The
company is actively assessing specialised healthcare assets to further diversify the business and create scale within
the hospital market. Our objective for the year ahead is to remain keenly focused on this next pillar of growth and
complete a further complimentary transaction, creating incremental return to shareholders 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 2
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 2020.
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
- Bruce Alwyn Hewett (appointed 5 August 2019)
Jonathan Charles Pilcher
- Peter John Jones (resigned 26 November 2019)
Principal Activities
BTC health is a Pooled Development Fund, registered under the Pooled Development Funds Act 1992. The
Company hold investments, and continues to actively seek investment opportunities, in entities operating in the
healthcare sector.
Review of Operations and Results
Revenue from continuing operations for the year of $169,604 (2019: $187,763) comprised management fees of
$160,000 (2019: $170,000) and interest income of $9,604 (2019: $17,763). Operating loss after income tax
decreased to $283,036 (2019: $692,742), mainly due to the cost of issuing options in the prior year to finance
the acquisition of the hospital infusion business, purchased on 31 May 2019 from Admedus Limited.
BTC health held active interests in 3 investment companies at 30 June 2020. The valuation of each investee
company is recognised on the balance sheet. A movement in the valuation of BTC health’s investments is
recognised in the Company’s statement of profit and loss.
BTC Speciality Health Pty Ltd
BTC health’s wholly owned investee company BTC Speciality Health is an established distributor of medical
devices and consumables in the Australian and New Zealand Public and Private Hospital market. Over the last
year the company has been focused on establishing infrastructure capable of delivering strong organic growth,
including building a dedicated team of sales and education specialists, establishing a warehouse and distribution
services in Australia and New Zealand. In addition, the company has established procurement, tender and
customer service functions aimed to support our existing customer base and new product launches.
The Australian and New Zealand governments suspended elective surgeries in March 2020, as a direct result of
the global Coronavirus pandemic. Elective surgeries have since resumed and demand for medical devices and
consumables has subsequently increased. BTC Speciality Health sales to hospitals were $5.8m for the financial
year ended 30 June 2020. BTC health’s investment in BTC Speciality Health remains unchanged at $6.0m.
BioImpact Pty Ltd
BTC health wholly owns BioImpact, an investment company which licenses and holds intellectual property rights
for healthcare products. The investment is valued at $100.
BTC HEALTH | ANNUAL REPORT
PG 3
BIO101 Group Pty Ltd
BIO101, a whole owned subsidiary of BTC health, provides accounting tax and company secretarial services to the
life sciences sector. BTC health revalued its investment in BIO101 to $500,000 at 30 June 2020, an increase of
$30,000 since December 2019. BTC health undertook a review of its investments held and assessed its investment
in financial services as non-core. BTC health subsequently sold its interest in BIO101 on 31 July 2020 for $500,000.
Financial Position
At 30 June 2020, the company’s net assets were $11,228,794 compared with $11,341,485 at 30 June 2019. Cash
reserves as at 30 June 2020 were $2,750,289, compared with $3,942,921 at 30 June 2019. The net tangible asset
backing per share as at 30 June 2020 equated to 4.56 cents (2019: 4.64 cents).
Dividends
No dividends have been declared in respect of the financial year ended 30 June 2020 (2019: nil).
Business Strategies and Future Prospects
BTC health has undertaken a strategic review of its investments to ensure assets are able to generate sufficient
returns in the medium term to shareholders. The Company is committed to supporting investee companies in the
hospital healthcare sector given the demand for patient care, sustainable funding and an ageing population. The
Company is actively assessing a pipeline of assets to purchase which align to the Hospital sector. This may include
target companies which operate within the hospital critical care sector, or companies which provide product
diversification in high growth niche markets.
The primary objective for BTC Speciality Health is to increase market share through organic growth. New products
will continue to be sourced by BioImpact and will enable BTC Speciality Health to expand its product range within
pain management and critical care.
BTC health has supported investment in infrastructure to ensure its investee companies are well positioned to grow
organically and through acquisition. The company will advise the market when capital is needed for a material
investment.
BTC HEALTH | ANNUAL REPORT
PG 4
Information on Directors
Director
Experience
Special
Responsibilities
Particulars of Directors’ Interest
as at 18 August 2020
R S Treagus
J C Pilcher
B A Hewett
BScMed, MBChB, MPharmMed, MBA,
MAICD. Dr Treagus is a physician and
entrepreneur with over 25 years’
in all aspects of
the
experience
pharmaceutical
and
international
biotechnology
Formally a
industry.
Director of Neuren Pharmaceuticals
Limited.
Appointed 4 August 2014. Age 54.
BSc, FCA. Mr Pilcher is a Chartered
Accountant and holds a degree in
biotechnology from the University of
Reading in the UK. Currently the CEO and
formally the CFO of Neuren
Pharmaceuticals Limited.
Appointed 1 September 2015. Age 54.
Bruce graduated as a pharmacist and has
had over 30 years’ experience in all
aspects of the pharmaceutical industry.
Appointed 5 August 2019. Age 66
Shares
Options
Executive Chairman
23,943,055
-
Non-Executive
125,000
-
Director
Non-Executive
45,000
-
Director
Company Secretary
Sharon Papworth has over 20 years’ finance experience, including 10 years in the healthcare sector. She 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
Jonathan Charles Pilcher
Bruce Alwyn Hewett (appointed 5 August 2019)
Peter John Jones (resigned 26 November 2019)
Sharon Papworth (appointed 1 October2019)
Stuart Andrew Jones (resigned 1 October 2019)
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 arms length. The Board has not appointed a Remuneration
Committee and this function is being undertaken by the Board.
Bruce Hewett and Peter Jones were each 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 $15,000. Prior to 1
September, Richard was paid a monthly fee of $10,000. Executive director fees totalled $170,000 for the
financial year. Shareholders approved a bonus, payable in BTC Shares at the Company’s Annual General Meeting
on 26 November 2019. The value of securities granted totaled $102,679 and vested immediately. 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.
2016
2017
2018
2019
2020
Revenue from continuing operations
71,184
28,496
62,937
187,763
169,604
Investment fair value adjustment
-
-
144,900
130,000
125,000
Net Profit/ (Loss) after tax
(870,780)
(516,527)
(1,467,834)
(692,742)
(283,036)
Dividend Paid
Share Placement
Net Assets
-
-
-
-
-
2,318,124 1,973,346
347,628
8,849,798
160,757
2,489,135
3,978,873
2,973,002
11,341,485
11,228,794
Share price at Year end (in cents)
0.11
0.16
0.20
0.085
0.10
Basic earnings per Share (in cents)
(0.88)
(0.45)
(1.14)
(0.51)
(0.12)
BTC HEALTH | ANNUAL REPORT
PG 6
Remuneration of Directors:
2020
SHORT TERM
EMPLOYEE
BENEFITS
POST-
EMPLOYMENT
BENEFITS
EQUITY
SETTLED
SHARES
OTHER LONG-
TERM
BENEFITS
$
$
$
Salary and Fees
Superannuation
170,000
-
102,679
36,530
3,470
18,077
8,098
-
-
-
-
-
R S Treagus
(Chairman)
J C Pilcher
(non-executive)
B Hewett
(non-executive)
Peter Jones*
(non-executive)
Total Remuneration
232,705
3,470
102,679
$
-
-
-
-
-
2019
SHORT TERM
EMPLOYEE BENEFITS
POST-
EMPLOYMENT
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
* Resigned 26 November 2019
Equity Settled Shares
-
-
3,470
3,470
EQUITY
SETTLED
SHARES
OTHER LONG-
TERM BENEFITS
$
-
-
-
-
$
-
-
-
-
TOTAL
$
272,679
40,000
18,077
8,098
338,854
TOTAL
$
120,000
20,000
40,000
180,000
Dr. Richard Treagus was granted 892,857 shares, approved at the Annual General Meeting held on 26 November
2019. The value of securities granted totaled $102,679 and vested immediately. The shares were issued in lieu of
a bonus for completing the hospital infusion business transaction on 31 May 2019. There were no other share based
payments issued to directors during the year ended 30 June 2020. No directors of the Company received any share-
based payments as part of their remuneration during the financial year ended 30 June 2019.
BTC HEALTH | ANNUAL REPORT
PG 7
CFO & Company Secretary
Stuart Jones held the position of CFO & Company Secretary until 1 October 2019. Stuart received remuneration of
$46,281 for the year ended 30 June 2020. Sharon Papworth was appointed CFO and Company Secretary on 1
October 2019. Remuneration is recorded in BTC health’s investee company, BTC Speciality Health, where the
majority of time is allocated. S Papworth received $213,750 in remuneration for the year ended 30 June 2020,
including post-employment benefits.
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 2020
NAME
Ordinary shares
R S Treagus
J C Pilcher
B A Hewett
P J Jones
BALANCE AT
THE START OF
THE YEAR
ADDITIONS
EQUITY
SETTLED
SHARES
OTHER NET
CHANGES
DURING THE
YEAR
BALANCE AT THE
END OF THE YEAR
22,425,198
625,000
892,857
125,000
-
16,984,323
-
45,000
90,000
-
-
17,074,323*
23,943,055
125,000
45,000
*Net change relates to the balance of the shares held at the date of resignation of key management personnel.
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 2020, 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
B A Hewett
10
4
10
10
10
4
10
10
-
2
2
2
*P J Jones resigned 26 November 2019
Auditor Independence Declaration to the Directors
-
2
2
2
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 $29,635 (2019: $24,795) 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 5,000,000 (2018: 7,500,000) unissued ordinary shares under
option.
Significant Events after the Balance Date
On 31 July 2020, BTC health’s investment in Bio101 Group Pty Ltd was sold for $500,000. Proceeds of the sale
were received on 31 July 2020.
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 situation 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 investment opportunities in the healthcare, more specifically, technologies and companies that in the
Board’s view will benefit from greater access to management expertise and development capital.
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
Audit fees of $55,080 were paid to Grant Thornton. No other fees were paid to Grant Thornton.
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
18 August 2020
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 18 August 2020.
A description of the framework and practices is set out below, laid out under the structure of the ASX Listing Rules
and the Corporate Governance Principles (the “Principles”) and Recommendations (the “Recommendations”) 3rd
Edition issued by the ASX Corporate Governance Council in March 2014.
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 2 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*
J C Pilcher appointed 1 September 2015 (independent director)
B A Hewett appointed 5 August 2019 (independent director)
* R S Treagus is not considered to be independent as he is a related person to a substantial shareholder 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
Recommendation 2.5 as the chair is not independent. 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 Bruce Hewett. Jon chairs the Committee and has extensive financial
qualifications and experience. The Audit Committee holds a majority of independent directors, although currently
does not have three members. The Audit Committee met two times during 2019/20 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 2020
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 2020:
a.
b.
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
give a true and fair view of the entity's financial position as at 30 June 2020 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 18 August 2020.
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.
investor relations program facilitates effective two-way communication with
The company’s
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 18 August 2020. (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 2020
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
Level 1
10 Oxley Road,
Hawthorn VIC 3122
BTC HEALTH | ANNUAL REPORT
PG 17
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Revenue from continuing operations
Investment fair value adjustment
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
Audit Fees
Insurance
Filing Fees
Travel
Rent
Office expenses
Other expenses from operations
Loss before income tax
Income tax benefit
Loss after income tax attributable to members of
BTC health Limited
Notes
30 June
2020
$
30 June
2019
$
2
6
10
15
3
169,604
125,000
(46,281)
(272,679)
(66,175)
-
-
(36,190)
(1,476)
(9,588)
(16,201)
(55,180)
(33,281)
(5,738)
(2,862)
(5,815)
(1,296)
(24,878)
(283,036)
-
(283,036)
187,763
130,000
(97,344)
(120,000)
(60,000)
(4,810)
(113,949)
(38,057)
(145,048)
(211,427)
(27,326)
(38,325)
(24,368)
(5,888)
(10,738)
(11,575)
(10,522)
(91,128)
(692,742)
-
(692,742)
Total comprehensive loss for the year
(283,036)
(692,742)
Loss per share
Basic and diluted loss per share
19
(0.12) cents
(0.51) 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 2020
Current Assets
Cash and cash equivalents
Other financial assets
Other Assets
Total Current Assets
Non-Current Assets
Other 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
Total Equity
Notes
30 June
2020
$
30 June
2019
$
4
6
5
6
7
8
2,750,289
500,000
107,484
3,357,773
6,000,100
2,099,057
8,099,157
11,456,930
3,942,921
375,000
163,639
4,481,560
6,000,100
1,237,691
7,237,791
11,719,351
121,409
106,727
228,136
228,136
11,228,794
158,032
219,834
377,866
377,866
11,341,485
9
10
11
53,265,612
214,846
(42,251,664)
11,228,794
53,104,855
346,914
(42,110,284)
11,341,485
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 2020
Notes
30 June
2020
$
30 June
2019
$
Cash Flows from Operating Activities
Receipts from customers
Interest received
Payments to suppliers and directors
Transfer from unclaimed monies account
Net cash used in operating activities
Cash Flows from Investing Activities
Payments for investments
Loans to investee companies
Net cash (used in)/ generated by investing activities
Cash Flows from Financing Activities
Share placement (net of capital raising costs)
Proceeds from borrowings
Repayment of borrowings
Net cash generated by financing activities
226,057
9,604
(614,577)
(113,107)
(492,023)
90,080
17,763
(731,525)
(32,118)
(655,800)
-
(861,366)
(861,366)
(5,999,900)
(900,806)
(6,900,706)
160,757
-
-
160,757
8,849,798
4,000,000
(4,000,000)
8,849,798
12
6
6
6
Net increase/ (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the Financial Year 4
(1,192,632)
3,942,921
1,293,292
2,649,629
2,750,289
3,942,921
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 2020
At 1 July 2018
Loss for the year
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
Issued
capital
$
Accumulated
losses
$
Other
reserves
$
44,255,057
(41,440,510)
158,455
-
-
(692,742)
(692,742)
8,849,798
-
-
-
-
22,968
-
-
-
211,427
(22,968)
Total
$
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
At 1 July 2019
Loss for the year
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
53,104,855
(42,110,284)
346,914
11,341,485
-
-
(283,036)
(283,036)
160,757
-
-
-
-
141,656
-
-
-
9,588
(141,656)
(283,036)
(283,036)
160,757
9,588
-
At 30 June 2020
53,265,612
(42,251,664)
214,846
11,228,794
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 2020
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 18 August 2020.
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’).
COVID-19
In March 2020, the World Health Organisation declared the outbreak of a novel coronavirus (COVID-19) as a
pandemic. The spread of COVID-19 has caused significant volatility in Australian and international markets. There is
significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its
impact on the Australian and international economies and, as such, the Company is unable to determine if it will
have a material impact to its ongoing operations.
Adoption of New and Revised Accounting Standards
New and amended Australian Accounting Standards that are effective for the current year
AASB 16 - Leases
The Company has adopted all new and revised Australian Accounting Standards and Interpretations that became
effective for the first time and are relevant to the Company.
BTC HEALTH | ANNUAL REPORT
PG 22
The Company has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of
low-value assets, right-of-use assets and corresponding lease liabilities are reocgnised in the statement of financial
position. Straight-line operating lease expense recognition is replaced with a depreciation charge of the right-of-
use assets and an interest expense on the recognised lease liabilities. The Company has no active leases at 30 June
2020, therefore as a result, the adoption of the standard had no impact.
New and revised Australian Accounting Standards in issue but not yet effective
At the date of authorisation of these financial statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Intepretations have been published by the IASB. None of these Standards
or amendments to existing Standards have been adopted early by the Company.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or
after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in
the current year have not been disclosued as they are not expected to have a material impact on the Company's
financial statements.
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.
BTC HEALTH | ANNUAL REPORT
PG 23
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.
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.
BTC HEALTH | ANNUAL REPORT
PG 24
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.
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.
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.
BTC HEALTH | ANNUAL REPORT
PG 25
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.
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
Closing balance
30 June
2020
$
9,604
160,000
169,604
30 June
2019
$
17,763
170,000
187,763
BTC HEALTH | ANNUAL REPORT
PG 26
Note 3 Income Tax
Major components of income tax expense for the years ended 30 June 2020 and 2019 are:
30 June
2020
$
30 June
2019
$
-
-
-
-
-
-
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 2020 and 2019 is as follows:
Accounting profit / (loss) before tax from continuing operations
(283,036)
(692,742)
At the statutory income tax rate of 25% (2019: 25%)
(70,759)
(173,186)
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
94,064
205,686
368
-
(23,673)
(32,500)
At effective income tax rate of (0%) (2019: (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.
BTC HEALTH | ANNUAL REPORT
PG 27
30 June
2020
$
30 June
2019
$
Unrecognised deferred tax losses
Deferred tax assets have not been recognised in respect of the following
items:
Tax Losses – Revenue
Temporary differences
Tax Losses – Capital
Closing balance
6,609,387
133,631
225,000
6,968,018
6,555,944
191,935
225,000
6,972,879
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.
Note 4 Cash and cash equivalents
Cash at bank and on hand
Closing balance
30 June
2020
$
30 June
2019
$
2,750,289
2,750,289
3,942,921
3,942,921
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
Closing balance
30 June
2020
$
30 June
2019
$
14,795
38,003
54,686
107,484
14,795
28,100
120,744
163,639
Trade debtors as at 30 June 2020 are all related party transactions from BTC health’s subsidiaries. The
estimated loss allowance for trade debtors at 30 June 2020 is $nil (2019: $nil).
BTC HEALTH | ANNUAL REPORT
PG 28
Note 6 Other financial assets
Other financial assets carried at fair value through profit or loss
Current
Bio101group Pty Ltd
Total Current other financial assets
Non - Current
BioImpact Pty Ltd
BTC Speciality Health Pty Ltd
Sensear Pty Ltd
Total Non-Current other financial assets
Closing balance
30 June
2020
$
30 June
2019
$
500,000
500,000
375,000
375,000
100
6,000,000
-
6,000,100
100
6,000,000
-
6,000,100
6,500,100
6,375,100
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 licenses and holds intellectual property
rights for healthcare products for commercialisation in the Asia/Pacific region. Technologies and products
are sourced from a international supply partners.
BTC Speciality Health Pty Ltd is 100% owned by BTC health Limited. BTC Speciality Health is an established
distributor of BTC health group’s medical devices and consumables in the Australian and New Zealand Public
and Private Hospital market.
Bio101group’s principal place of business is Level 2, 697 Burke Road, Camberwell VIC 3124. BioImpact and
BTC Speciality Health’s principal place of business is Level 1, 10 Oxley Road, Hawthorn VIC 3122.
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
Revaluation of unlisted investment
Additions
Closing balance
30 June
2020
$
30 June
2019
$
6,375,100
125,000
-
6,500,100
245,200
130,000
5,999,900
6,375,100
BTC HEALTH | ANNUAL REPORT
PG 29
Bio101group Pty Ltd.’s valuation was increased in the period by $125,000 to $500,000.
Additions in the prior year 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
Closing balance
30 June
2020
$
30 June
2019
$
555,707
1,543,350
2,099,057
347,691
890,000
1,237,691
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 2020
is $nil (2019: $nil).
Note 8 Trade and other payables
Current
Trade creditors
Accruals
Closing balance
30 June
2020
$
30 June
2019
$
80,809
40,600
121,409
142,832
15,200
158,032
Trade and other payables are non-interest bearing and are generally settled on 30-day terms.
BTC HEALTH | ANNUAL REPORT
PG 30
Note 9
Issued Capital
a)
Ordinary Shares
Issued and fully paid – Opening Balance
244,542,783
53,104,855
130,296,532
44,255,057
2020
Shares
2020
$
2019
Shares
2019
$
Share Placement 22 May 2019
Capital raising costs
Share Placement 13 June 2019
Capital raising costs
Share Placement 27 June 2019
Capital raising costs
Share Placement 3 July 2019
Capital raising costs
Share Placement 27 August 2019
Capital raising costs
-
-
-
-
-
-
-
-
-
-
-
-
31,841,127
-
2,547,290
(90,707)
14,871,250
-
1,189,700
(17,850)
67,533,874
-
5,402,710
(181,345)
625,000
-
71,428
-
50,000
(1,922)
10,000
-
-
-
-
-
-
-
-
-
-
-
-
-
Equity Settled Shares 2 December 2019
892,857
102,679
Capital raising costs
-
-
Closing Balance
246,132,068
53,265,612
244,542,783
53,104,855
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.
Equity Settled Shares
Dr. Richard Treagus was granted 892,857 shares, approved at the Annual General Meeting held on 26
November 2019. The value of securities granted totaled $102,679 and vested immediately. The shares were
issued in lieu of a bonus for completing the hospital infusion business transaction on 31 May 2019. There
were no other share based payments issued to directors during the year ended 30 June 2020. No directors
of the Company received any share-based payments as part of their remuneration during the financial year
ended 30 June 2019.
BTC HEALTH | ANNUAL REPORT
PG 31
Note 10 Share options Reserve
Opening balance
Amortisation of unlisted share options
Expiry of share options
Closing balance
30 June
2020
$
346,914
9,588
(141,655)
214,847
30 June
2019
$
158,455
211,427
(22,968)
346,914
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 5,000,000 unlisted ordinary shares under option
(2019: 7,500,000). All options granted have vested.
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
0.076
0.169
25 February
2020
25 February
2018
2018 Financial Year Grant
Options
Granted
1,000,000
250,000
250,000
250,000
250,000
Grant
Date
Grant date
fair value
$
Exercise Price
$
Expiry
Date
Vesting
Date
28 November
2017
28 November
2017
28 November
2017
28 November
2017
28 November
2017
0.061
0.079
0.093
0.079
0.093
0.24375
0.24375
28 November
2019
19 June 2020
0.24375
19 June 2020
0.24375
31 July 2020
0.24375
31 July 2020
28 November
2017
28 November
2018
28 November
2019
28 November
2018
28 November
2019
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 financial year ended 30 June 2019. At the date of the report, there are 5,000,000 unlisted
ordinary shares under option (2019: 7,500,000). All options granted in 2017 and 2018 have vested.
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
Nil options were granted during the 2020 financial year. The weighted average fair value of the share
options granted during the 2019 financial year is $0.034. 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.
Note 11 Accumulated Losses
Accumulated losses at the beginning of the year
Expiry of share options
Total comprehensive loss for the year
Accumulated losses at the end of the year
30 June
2020
$
30 June
2019
$
(42,110,284)
141,656
(283,036)
(42,251,664)
(41,440,510)
22,968
(692,742)
(42,110,284)
Note 12 Reconciliation of Operating Loss after Income Tax to the Net Cash Flow from
Operating Activities
Loss after income tax
Adjustment for:
Increase in valuation of unlisted investment
Share based payments
Increase / (Decrease) in trade and other payables
(Increase) / Decrease in other assets
Increase / (Decrease) in unclaimed monies account
Net cash used in operating activities
30 June
2020
$
30 June
2019
$
(283,036)
(692,742)
(125,000)
9,588
(36,622)
56,154
(113,107)
(492,023)
(130,000)
211,427
67,553
(79,920)
(32,118)
(655,800)
Note 13
Subsequent Events
On 31 July 2020, BTC health sold its investment in Bio101 Group Pty Ltd, a non-core investment, for $500,000
cash, consistent with the valuation recognised in BTC health’s accounts at 30 June 2020. 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 33
Note 14
Key Management Personnel
Name and position of key management personnel of the company in office at any time during the financial year:
R Treagus – Executive Chairman
J Pilcher – Non-executive
B Hewett – Non-executive (appointed 5 August 2019)
P Jones – Non-executive (resigned 26 November 2019)
S Papworth – CFO and Company Secretary (appointed 1 October 2019)
S Jones – CFO and Company Secretary (resigned 1 October 2019)
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
Closing balance
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
Grant Thornton
Remuneration for audit or review of the financial statements
Total audit remuneration
30 June
2020
$
30 June
2019
$
232,705
3,470
102,679
338,854
176,530
3,470
-
180,000
30 June
2020
$
30 June
2019
$
100
-
38,325
85,736
55,080
-
55,180
124,061
Note 16 Related Party Disclosures
BTC health received management fee income from consulting services to Bio101group Pty Ltd during the year
of $160,000 (2019: $170,000). The trade debtors balance receivable from Bio101 group Pty Ltd at 30 June 2020
amounted to $48,745 (2019: $105,632). These debtors have been received since year end.
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 healthcare ventures.
BTC HEALTH | ANNUAL REPORT
PG 34
Note 18
Financial Risk Management Objectives and Policies
Financial Risk Management
Overview
The company has exposure to the following risks from the 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 2020
Financial Assets
Cash
Total financial assets
Financial liabilities -
Trade and other payables
Total financial liabilities
Net Financial Assets
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
0.07%
N/A
-
Floating
0.26%
N/A
-
2,750,289
2,750,289
121,409
121,409
2,628,880
3,942,921
3,942,921
158,032
158,032
3,784,889
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.
BTC HEALTH | ANNUAL REPORT
PG 35
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 2020 would decrease/increase by $66,423 (2019: decrease/increase
by $34,200). 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:
Carrying
amount
Contractual
cash flows
6 months or
less
Greater than 6
months, less
than 1 year
Greater than
1 year
30 June 2020
Trade and other payables
Unclaimed monies
30 June 2019
Trade and other payables
Unclaimed monies
$
(121,409)
(106,727)
(228,136)
(158,032)
(219,834)
(377,866)
$
(121,409)
(106,727)
(228,136)
$
(121,409)
(106,727)
(228,136)
(158,032)
(219,834)
(377,866)
(158,032)
(219,834)
(377,866)
$
-
-
-
-
-
-
$
-
-
-
-
-
-
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 2019.
BTC HEALTH | ANNUAL REPORT
PG 36
30 June 2020
Financial assets carried at fair value
through profit or loss before tax:
Unlisted investments
30 June 2019
Financial assets carried at fair value
through profit or loss before tax:
Unlisted investments
Profit or loss
before tax
Equity
Carrying
Value
20%
increase
20%
decrease
20%
increase
20%
decrease
$
$
$
$
$
6,500,100 1,300,020
1,300,020
(1,300,020)
(1,300,020)
1,300,020
1,300,020
(1,300,020)
(1,300,020)
Profit or loss
Before tax
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)
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.
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
2020
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)
b)
c)
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
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).
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).
BTC HEALTH | ANNUAL REPORT
PG 37
30 June 2020
Financial assets
Unlisted investments– Financial assets carried at
fair value through profit or loss
30 June 2019
Financial assets
Unlisted investments– Financial assets carried at
fair value through profit or loss
Level 1
Level 2
Level 3
Total
$
-
-
-
-
$
-
-
-
-
$
$
6,500,100
6,500,100
6,500,100
6,500,100
6,375,100
6,375,100
6,375,100
6,375,100
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
investment fair value adjustment
-
-
Closing balance
2020
Total
$
2019
Total
$
6,375,100
245,000
-
125,000
6,500,100
5,999,900
130,000
6,375,100
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.
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 2019.
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
30 June 2020
$
30 June 2019
$
2,750,289
107,484
2,099,057
6,500,100
121,409
106,727
3,942,921
163,639
1,237,691
6,375,100
158,032
219,834
BTC HEALTH | ANNUAL REPORT
PG 38
Note 19 Loss Per Share
Basic and diluted loss per share, based on the
after tax loss of $283,036 (2019: ($692,742)) *
Weighted average number of ordinary shares used
as the denominator in calculating basic earnings per
share
30 June 2020
30 June 2019
(0.12) cents per share
(0.51) cents per share
245,737,503 shares
134,946,441 shares
*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
18 August 2020
BTC HEALTH | ANNUAL REPORT
PG 40
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 9320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of BTC Health Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of BTC Health
Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 18 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
PG 41
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Directors 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 2020, the statement of profit or loss and other comprehensive income, statement of changes in
equity and 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.
PG 41
In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001,
including:
a giving a true and fair view of the Company’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
PG 42
Key audit matter
How our audit addressed the key audit matter
Unlisted shares held at fair value
The company invests in a portfolio of life science
organisations.
As at 30 June 2020, the company’s investment portfolio
consisted of three unlisted companies carried at a fair value of
$6,500,100.
The valuation of these assets requires significant
management judgement.
Our procedures included, amongst others:
Documenting and assessing the processes and control
environment in place for management to determine the fair
value of investments within their portfolio;
Assessing and challenging management’s valuation
methodology and key 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 to the actual financial and operational results;
o Obtaining an understanding of key customer contracts
in place;
o
Performing analytical procedures to identify unusual
trends or movements in account balances;
o Holding discussions with management around
business performance and future business plans,
including whether sufficient existing funding is in place,
and whether the forecasts are appropriate and
consistent with the strategies of the business; and
Assessing the adequacy of the disclosures in the notes to
the financial report.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Company’s annual report for the year ended 30 June 2020, 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.
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 Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
PG 43
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 6 to 8 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of BTC Health Limited, for the year ended 30 June 2020 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 18 August 2020
PG 44
Shareholder Information
As at 13 August 2020
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
Ordinary
Shareholders
27
304
206
400
124
1,061
Unlisted
Option holders
-
-
-
-
1
1
Substantial holders
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
NAOS ASSET MANAGEMENT LIMITED
LHC CAPITAL PARTNERS PTY LTD
SIGMA COMPANY LIMITED
RICHARD AND KAREN TREAGUS
PETER AND HELEN JONES
Equity security holders
Number of shares/votes
Voting power
60,947,189
26,284,910
25,000,000
23,943,055
17,074,323
24.76%
10.68%
10.16%
9.73%
6.94%
The names of the twenty largest holders of quoted equity securities are listed below:
Rank Name
A/C designation
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
NAMARONG INVESTMENTS PTY LTD
11 MS DESPINA MAKRIS
12
13
BNP PARIBAS NOMINEES PTY LTD
LINWIERIK INVESTMENTS PTY LTD
14
15
16
BNP PARIBAS NOMINEES PTY LTD
HUB24 CUSTODIAL SERV LTD
PRITDOWN PTY LTD
GRAY LANE HOLDINGS PTY LTD
CAMPASPE FAMILY
HANSEN INVESTMENT
Ordinary Shares
held
73,749,066
26,500,000
23,943,055
16,856,467
16,009,323
8,143,533
4,448,805
4,300,000
4,213,727
3,125,000
3,078,363
2,725,000
2,600,000
1,817,476
1,645,203
1,627,804
Voting
Percentage
29.96
10.77
9.73
6.85
6.50
3.31
1.81
1.75
1.71
1.27
1.25
1.11
1.06
0.74
0.67
0.66
BTC HEALTH | ANNUAL REPORT
PG 455
Rank Name
A/C designation
MR NICHOLAS DERMOTT MCDONALD
17
18 MR ROBERT BEAUMONT FROST
19
YORKSHIRE INVESTMENTS PTY LTD
20 MRS LILIANA TEOFILOVA
Ordinary Shares
held
Voting
Percentage
1,386,363
1,187,500
1,129,935
1,001,500
0.56
0.48
0.46
0.41
Total
199,488,120
81.05
Less than marketable parcel holders
The number of holders holding less than a marketable parcel based on the market price was 333.
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 4655
Corporate Directory
Registered Office
BTC health Limited Level
Level 1, 10 Oxley Road
HAWTHORN VIC 3122
Principal Contacts
Richard Treagus
Chairman
T +61 417 520 509
rtreagus@btchealth.com.au
Sharon Papworth
Company Secretary
T+ 61 402 229 758
spapworth@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
Grant Thornton
Collins Square, Tower 5
727 Collins Street
MELBOURNE VIC 3008
BTC HEALTH | ANNUAL REPORT
PG 47