dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
APPENDIX 4E - YEAR ENDED 30 JUNE 2017
dorsaVi Ltd and controlled entities
APPENDIX 4E
PRELIMINARY FINANCIAL REPORT
FOR THE YEAR ENDED
30 JUNE 2017
Provided to the ASX under listing rule 4.3A
ABN: 15 129 742 409
ASX CODE: DVL
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
APPENDIX 4E - YEAR ENDED 30 JUNE 2017
TABLE OF CONTENTS
Appendix 4E
Details of the reporting period and the previous corresponding period
Results for Announcement to the Market
Explanation of Results
Statement of Accumulated Losses
Details of entities over which control has been gained or lost during the period
Audit of the Financial Report
Attachment
Annual Report for the year ended 30 June 2017
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
APPENDIX 4E - YEAR ENDED 30 JUNE 2017
Details of the reporting period and the previous corresponding period
Reporting period:
Year ended 30 June 2017
Previous corresponding period:
Year ended 30 June 2016
Results for announcement to the market
Revenue
June 2017
June 2016
Change
Change
($)
($)
($)
(%)
3,897,882
3,238,138
659,744
20%
Loss from ordinary activities after tax
attributable to members
(3,876,248) (5,237,102)
1,360,856
-26%
Loss for the period attributable to members
(3,876,248) (5,237,102)
1,360,856
-26%
Net Tangible asset per share
Explanation of Results
June 2017
(cents)
June 2016
(cents)
Change
(cents)
6.29
5.02
1.27
dorsaVi Ltd continued to focus on building its sales revenue and customer base in Australia, the UK and the US
and on reducing cost.
Total revenue increased 20% year on year. Total expenditure reduced by $538,376 (6% year on year) mainly
due to: a reduction in employee benefits expense and reductions in professional and consultancy expenditure
as regulatory requirements become more streamlined.
The loss from continuing operations after income tax for the 2017 financial year was $3,876,248 (2016:
$5,237,102), a reduction of 26% on the 2016 financial year.
During the financial year there were no returns to shareholders in any form.
This report should be read in conjunction with any public announcements made by dorsaVi Ltd in accordance
with the continuous disclosure requirements arising under the Corporations Act 2001 and ASX Listing Rules.
The information provided in this report contains all the information required by ASX Listing Rule 4.3A.
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
APPENDIX 4E - YEAR ENDED 30 JUNE 2017
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Refer to the attached statement
Consolidated Statement of Financial Position
Refer to the attached statement
Consolidated Statement of Changes in Equity
Refer to the attached statement
Consolidated Statement of Cash Flows
Refer to the attached statement
Dividends
The board has declared no dividend for the years ended 30 June 2016 or 30 June 2017. There are no dividend
reinvestment plans in operation.
Statement of Accumulated Losses
Balance at the beginning of year
(22,212,210)
(17,317,080)
(15,868,777)
(13,085,756)
Consolidated Entity
Parent Entity
2017
$
2016
$
2017
$
2016
$
Net loss attributable to members
of the parent entity
Reversal of share based
payment reserve
Total available for appropriation
Dividends paid
Balance at end of year
(3,876,248)
(5,237,102)
(1,964,808)
(3,124,993)
15,326 341,972 15,326 341,972
(15,868,777)
(17,818,259)
(26,073,132)
(22,212,210)
- - - -
(26,073,132)
(22,212,210)
(17,818,259)
(15,868,777)
Details of entities over which control has been gained or lost during the period
There was no gain or loss in control of entities during the year ended 30 June 2017.
Audit of the Financial Report
The audit has been completed. The financial report contains an independent audit report that is not subject to
a modified opinion, emphasis of matter or other matter paragraph.
Date: 28 August 2017
Damian Connellan
CFO
dorsaVi Ltd
GD4543 DS - Annual Report Cover A4 2pp – FRONT COVER
GoDesign.net.au
ANNUAL REPORT
2017
dorsaVi Ltd
(ABN: 15 129 742 409)
Annual Report
For the Year Ended 30 June 2017
CONTENTS
Chairman’s Review
CEO Operational Report
Financial Report
Directors’ Report
Auditor’s Independence Declaration
Financial Report for the Year Ended – 30 June 2017
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report to The Members of dorsaVi Ltd
Shareholder Information
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CHAIRMAN’S REVIEW
Dear Shareholders
I am delighted to present dorsaVi’s Annual Report for the Financial Year 2016/2017. As global
demand for sophisticated and accurate movement data continues to grow, dorsaVi’s first to
market position in medical grade wearable technology is now well established.
This Financial Year was marked with important milestones demonstrating the continued market opportunities
for data-driven wearable technology. The launch of myViSafe in the Australian, the US and UK market; the
unveiling of our new generation ViMove2™ and subsequent launch in Australia; our successful projects with
big brands such as Snowy Hydro, Heathrow Airport, Crown Resorts and shoe manufacturer Mizuno all
illustrate our success in satisfying an unmet demand for meaningful movement data.
In December 2016 dorsaVi raised $8.0M (before costs) to invest in further product development and growth
in the major US market. Listening to market feedback in relation to our products is essential to ensure we
remain market leaders in this fast-moving movement analytics space. Our team have made significant
investment into both gathering market feedback and optimising our products to stay ahead of the curve. Our
new mini sensors and app based functionality will allow the product to be truly scalable, improving start up
time, reducing the training time for our sales teams and enabling the products to be sold on line.
Whilst outside the 2016/2017 Financial Year, our 510(k) clearance by the US FDA for the next generation
ViMove2™ sensor in July, was a major regulatory milestone, paving the way for the product’s anticipated
launch in the UK and US in the 2018 Financial Year. ViMove2™ is designed to measure, record and analyse
movement and muscle activity of the lower back, and, considering the significant size of the low-back pain
market - it costs the US economy US$100-$200 billion annually - the product has mass market clinical
opportunities.
With our first mover advantage in medical-grade wearable technology and the aforementioned milestones,
our products continue to gain traction with major workforce employers, clinicians and elite sports clubs
across all our three priority markets; the US, UK and Australia.
There are of course also macro factors which have supported our achievements and success throughout the
year. This includes the increasing awareness within labour intensive industries who recognise the importance
of preventing workplace injury; a greater focus on providing a safer workplace; and clinical networks looking
to position themselves as innovators who offer best practice treatments with leading technologies.
Whilst dorsaVi differentiates itself as a data-driven company with innovative products assisting large
workforce companies, athletes and clinicians, at our core we are a company making a difference in people’s
lives and their recovery journey.
Within the OHS market, dorsaVi captured two prestigious awards in the UK, being awarded the Health and
Safety Solution of the Year at the London Construction Awards and the Product Innovation for myViSafe at
the British Safety Industry Federation. The award winning ViSafe™ product is being used by new customers
and repeat projects in large manual handling industries such as construction, aviation, transport and
manufacturing. The launch of myViSafe™, an easy-to-use wearable sensor system that can be self-managed
by employers, has also helped create an annuity revenue model for dorsaVi from the OHS market. The
scalable nature of this product means it can be used by small and large corporations and it addresses the
growing demand for employers to take preventative measures when it comes to workplace safety.
In terms of our clinical opportunities, we are pleased by the initial sales growth following ViMove2™’s
Australian launch and we are in the planning stages of launching this highly intuitive product in the UK later
this calendar year and US in the fourth quarter of FY18. ViMove™ has already demonstrated its effectiveness
in reducing pain and improving clinical outcomes through a randomised controlled clinical trial, with the
outcomes published in a peer reviewed journal. A subsequent health economic paper shows the merits for
the use of this technology in reducing the costs associated with managing chronic low back pain. The US
based clinical group Select Medical, who have over 2,000 sites in 46 states, have steadily increased their use
of ViMove and now have the technology used at 45 of their clinical sites as part of their initial pilot study –
well ahead of expectations.
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In our sporting market, we continue to see strong demand for our technology among elite and professional
teams across the sports spectrum, from the NBA to NFL and NHL. This market continues to provide practical
product development insights for our new generation devices, as well as supporting dorsaVi’s brand
awareness.
We go into this new financial year with revenue growth in the major US market and new products that
continue to lead our field. With the backing of peer reviewed clinical data, US reimbursement, US, European
and Australian regulatory clearance, and market evidence from our product in the market, we are confident
on continued global scale up.
On behalf of the board, I would like to thank CEO Andrew Ronchi and his team for their tireless efforts and
passion for the company and for their dedication for helping our customers on their recovery journey.
To our shareholders, we are grateful for your continued support.
In closing, I would like to advise all of dorsaVi’s employees, customers and shareholders that I have advised
the Board of my intention to retire as Chairman and as a director of dorsaVi at the Company’s Annual
General Meeting (AGM) to be held on 23 November 2017. Mr Greg Tweedly, the current Chair of the Audit
and Risk Committee, will succeed me as Chairman at the AGM. It has been a pleasure to be associated with
dorsaVi.
Herb Elliott
Chairman
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CEO OPERATIONAL REPORT
“dorsaVi had a year of strong client retention, expansion and revenue growth in the US market.
Launching the new app-based mini sensors and building annuity revenue into the OHS market
have been critical steps forward for dorsaVi. This has been a year of significant product
development, and I am pleased to share our highlights with shareholders and stakeholders.”
Andrew Ronchi, Chief Executive Officer
Introduction
The year was marked with significant developments across dorsaVi’s key geographic markets in the US, UK
and Australia. Our first to market position in providing medical grade wearable technology continues to
strengthen as demand for sophisticated and accurate movement data grows internationally.
As a medical grade wearable, cleared for sale by the FDA, TGA, and in Europe with the CE mark, we remain
in a strong position to capitalise on this rising demand, differentiating ourselves from consumer wearables.
Our expanding new customer base and strong retention with existing clients support this strong position.
With regulatory approval behind us, our focus is now firmly on execution and scalability.
Whilst dorsaVi has a leading market position and there are high barriers to entry into the market, given our
FDA, TGA, CE Mark and patent-protected technologies, product innovation remains a key ingredient to our
success.
We continue to strive to be the world leader in movement analysis and technologies for the clinical, workers’
compensation and elite sports markets. The introduction of our mini sensors used in myViSafe™ and
ViMove2™ demonstrates our investment in innovation and we expect promising returns from these new
products.
Financial Summary
Our annual sales revenue was up 15% year-on-year in Australian dollar terms. Sales revenue would have
increased 21% compared to the previous year if currency exchange rates had remained constant throughout
the past financial year. Cost was down 6% year-on-year. Whilst macro political events in the UK influenced
lower growth, and Australian sales growth was impacted by a hold on marketing campaigns ahead of the
launch of MyViSafe and ViMove2™, we have been encouraged by the strong revenue growth in the US,
which was up 161% on FY2016.
Key Milestones
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Business Overview
dorsaVi Workplace Solutions (OHS)
dorsaVi’s workplace solutions taps into the significant yet underserved Occupational Health and Safety
(OHS) market worth US$250 billion per annum in the US alone. As regulatory changes to workers’
compensation incentivise workplaces to establish preventative practices for workplace injury, there is a
growing demand for data-driven technologies to help improve workplace safety and reduce the rate of
injuries. dorsaVi’s ViSafe provides an OHS solution to determine, measure and mitigate high risk activities in
the workplace, allowing senior management and Boards to make informed decisions based on data and facts
rather than opinion only.
Our self-managed solution, myViSafe™, which was available commercially at the end of 2016, has
introduced an annuity revenue stream into the ViSafe product portfolio. By providing a complete manual
handling movement analysis training and education solution to employers, we have identified an unmet need
for an interactive and personalised approach to manual handling assessment, compliance and workplace
training.
The easy-to-use application of myViSafe™ means it is a scalable solution for small to large corporates. In
Australia, the innovative solution is already used by Crown Resorts, Coles Liquor and Visy Board. In the UK
Marston’s Brewery have taken up myViSafe to assess onsite jobs and tasks and for continuous auditing of
their manual handling workforce. In the US, dorsaVi has signed Weyerhaeuser in the logging industry,
Workright NW for manual handling training, Innocor for the assessment of worker tasks in the
manufacturing sector and Southern Towing in the shipping and freight area. These companies in each
jurisdiction value the objective data that they are able to gather on their own employee’s movements.
Senior management are most interested in the ability to remotely monitor their workforce through an easy
to use dashboard.
The market opportunity for a solution like myViSafe™ is significant. In the UK and Australia, we are
operating a direct sales model. In the US we have an agent model to enable rapid revenue growth, coupled
with direct sales representatives in key markets. Currently, dorsaVi has sales partnerships with seven agents
across the country, and continues to offer centralised analysis ensuring data integrity and ownership
remains within dorsaVi’s control.
We are focused on scaling up sales programs and will continue to capitalise on our first mover advantage to
address the growing demand for data-driven technologies to inform workplace decisions.
A self-managed solution for organisations to monitor employee movement
Key benefits:
! Annuity revenue business model for dorsaVi that provides a scalable solution for
small to large corporations
! Mass opportunity with a very large serviceable market due to attractive price
point
! High volume solution with low touch support
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dorsaVi Clinical
A major milestone for dorsaVi was the launch of the new generation ViMove2™, which is designed to
measure, record, and analyse movement of the lower back and lower limbs. This product has received
510(k) clearance from the US FDA, and following a pilot launch in Australia, is preparing for launch in the UK
and US in FY2018. We continue to build on the strong foundations of ViMove™ with clinical trials showing
our ViMove™ treatment protocol reduces pain by 45% and improves function by 73% in patients with
chronic low back pain. A health economic paper released also shows that our ViMove™ treatment protocol
delivers both improved clinical outcomes and reduced economic impact.
“This evaluation has identified that motion-sensor biofeedback intervention using ViMove System was both
more effective and less costly overall than the control from the societal perspective. Rarely are health care
interventions found to be both more effective and less costly overall.”
- Prof. Terry Haines, Monash University (Melbourne, Australia)
ViMove2™’s easier-to-use application provides significant benefits for physical therapist/physiotherapists,
including a rapid start up time of 10 seconds (vs previous 3 minutes) and reducing the face-to-face training
time for new clinical sites, reducing the training time from four hours to 10 minutes, with training now
delivered online. This frees up sales staff for additional sales activity and is designed to enhance both the
clinician’s and the patient’s experience.
An example of ViMove2™’s uptake in the Australian market is with the integrated physiotherapy clinic,
Kieser. This physiotherapy chain signed a three-year deal in June 2017 for the uptake of 18 devices to be
used across their nine clinics. We look forward to the opportunities ViMove2™ will bring to the US and UK
clinical markets when launched.
In parallel, dorsaVi has seen continued growth in the number of US clinical sites which use our existing
clinical products ViMove and ViPerform. The continued adoption of dorsaVi’s technology into clinical centres,
leading hospitals and universities/colleges is important in fulfilling the strategic plan of training the next
generation of clinicians to use our technology in managing movement-related conditions.
The US clinical opportunity for dorsaVi is significant, with more than 284,000 physical therapists in the
country. Since launching ViMove and ViPerform in the US in 2014, the company has signed on 160 sites. Of
note is our partnership with Select Medical which has 2,000 clinical sites across the US. Our initial pilot
program was for an initial 20 sites, and has been scaled up early with ViMove and ViPerform already being
used in 45 sites, with more expected throughout the coming year. The uptake by Select Medical is above
initial expectations and is indicative of the demand from the market for data-driven technologies to assist in
achieving best practice treatments for patients.
The ViMove2™ solution includes specialist modules:
! ViMove2™ Knee: Clinicians can quickly assess the stresses and strains placed on a patient’s knee in real
time, which has historically been very difficult to do.
! ViMove2™ Low Back: Rapidly gains a clearer picture by assessing lumbar spine movement in real-time,
automatically prescribing exercises that are appropriate for patients based on the assessment data.
! ViMove2™ Run: Enables clinicians to quickly understand how a runner is moving, providing new insights
on the quality of running.
Finally, the first retail opportunity for our technology sees leading sports shoe manufacturer Mizuno utilise
the ViMove™ Run solution to better understand and inform shoe selection at a retail level in the UK. This
pilot program illustrates the strong need for data-driven technologies and evidence for new data insights at
a retail level.
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dorsaVi Elite Sports
The elite sports market continues to be an important segment for the company to explore product
development and expansion, while also acting as a source of brand and product validation. The association
with well-known sports teams and athletes has helped open new opportunities in other markets.
Over the past year, the company has continued to expand its ViPerform™ solution to more US sports
customers, including National Basketball Association (NBA) team LA Lakers, National Football League (NFL)
team and 2017 Super Bowl champion New England Patriots, as well as National Hockey League team
Philadelphia Flyers. Other groups which have adopted the ViPerform™ technology include Ohio State
University and the Marquette University basketball team.
The Athletic Movement Index is the most popular dorsaVi module in the US and allows sport administrators
to benchmark their players against normalised data as an indicator to injury susceptibility and strength.
dorsaVi Elite Sports continues to expand organically and through strong word of mouth.
Andrew Ronchi
Chief Executive Officer
7
FINANCIAL REPORT
For The Year Ended 30 June 2017
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Financial Report
For The Year Ended 30 June 2017
TABLE OF CONTENTS
Directors’ Report
Auditor’s Independence Declaration
Financial Report For The Year Ended – 30 June 2017
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the Members of dorsaVi Ltd
Shareholder Information
10
29
30
30
31
32
33
34
60
61
66
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Directors’ Report
The directors present their report together with the financial report of the Group consisting of dorsaVi and
the entities it controlled, for the financial year ended 30 June 2017 and auditor’s report thereon.
Directors
The names of directors in office at any time during or since the end of the year are:
Herbert James Elliott – Non-executive Chairman:
Chairman of dorsaVi Ltd and chairs the Nomination and Remuneration Committee. He was appointed to the
Board on 29 October 2013.
Ashraf Attia - Non-executive Director:
Mr. Attia serves on the Audit and Risk Committee. He was appointed to the Board on 14 July 2008.
Michael Panaccio – Non-executive Director:
Dr. Panaccio serves on the Audit and Risk Committee and the Nomination and Remuneration Committee. He
was appointed to the Board on 16 May 2008.
Gregory John Tweedly – Non-executive Director:
Mr. Tweedly chairs the Audit and Risk Committee and serves on the Nomination and Remuneration
Committee. He was appointed to the Board on 29 October 2013.
Andrew Ronchi – Chief Executive Officer, Director:
Dr. Ronchi was appointed to the Board on 18 February 2008.
The directors have been in office since the start of the year to the date of this report unless otherwise
stated.
Principal Activities
The principal activity of dorsaVi Ltd and its controlled entities during the financial year was distribution of
innovative motion analysis technologies. These technologies are commercialised via license, sale or fixed fee
consultancy. There has been no significant change in the nature of these activities during the financial year.
Results
The consolidated loss after income tax attributable to the members of dorsaVi Ltd was $3,876,248
(2016: $5,237,102).
Review of Operations
dorsaVi Ltd has been listed on the ASX since December 2013.
The Group consists of four entities:
1. dorsaVi Ltd, the listed Parent group;
2. dorsaVi Europe Ltd, a wholly owned subsidiary incorporated and domiciled in the UK;
3. dorsaVi USA, Inc., a wholly owned subsidiary incorporated and domiciled in the US; and
4. Australian Workplace Compliance Pty Ltd, a wholly owned subsidiary domiciled in Australia.
Revenue for the 2017 financial year was $3,897,882 (2016: $3,238,138) predominantly driven by 15%
(2016: 123%) growth in sales revenue to $3,466,027 (2016: $3,019,928) and increased grant income.
The loss from continuing operations after income tax for the 2017 financial year was $3,876,248
(2016: $5,237,102), a reduction of 26% on the 2016 financial year.
dorsaVi Ltd has continued to focus on building its sales revenue and customer base in each of its three
geographic locations and, at the same time, controlling cost. Whilst sales revenue grew by 15% year on
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year, total expenditure reduced by $538,376 (6% year on year) mainly due to a reduction in employee
benefits expense and reductions in professional and consultancy expenditure as regulatory requirements
become more streamlined.
OHS Services
During 2017 dorsaVi continued the development of ViSafe and the launch of myViSafe with myViSafe
starting to bring annuity revenue into the OHS business model. The need for these products continues to be
validated by major corporates undertaking assessments with a high proportion of these corporations signing
on for repeat and larger contracts. Significant new and repeat customers have included Coles Liquor, Crown
Resorts, Visy Board, Snowy Hydro, Transport for London, Heathrow Airport, Network High Speed Rail,
Siemens, Intel, Innocor, Weyerhaeuser and Chilton Logging.
Revenue for OHS Consultancy, utilising ViSafe technology, was $1,911,091 for the 2017 financial year up
10% over the 2016 financial year ($1,737,388).
Clinical and Sports Product
By 30 June 2017 the Group had over 400 devices in the market globally. This represented a 33% increase
over the 300 devices in the market at 30 June 2016. The investment in, and release of, ViMove2 in the
Australian market during 2017 and the progressive release in the US and UK over the 2018 financial year is
expected to increase the rate of device take up and lower the cost of goods sold.
Revenue from the licensing and sale of devices was $1,554,936 for the 2017 financial year up 21% over the
2016 financial year ($1,282,540).
The directors expect global revenue to continue to grow year on year. Factors impacting and driving this
growth include: the effectiveness of the global marketing plan; additional sales generation in the OHS and
clinical markets in Australia, Europe and US markets; shortening of the sales lead times; and the rate of
uptake of new generation product.
Cost of sales increased in the 2017 financial year to $1,068,139 (2016: $841,416) in line with expectations
and largely as a result of the increase in OHS assessments.
Employee benefits expense for the 2017 financial year was $4,302,643 (2016: $4,762,296), a 10%
decrease year on year. Employee benefits expense represented 50% of the total expenses for the Group for
the 2017 financial year (2016: 52%).
The material business risks that are likely to have an effect on the financial prospects of the Group include:
!
! Over time, dorsaVi may be subjected to increased competition if potential competitors develop new
technologies or make scientific or systems advances that compare with or compete with dorsaVi’s
products.
In the medical sector (but not the Elite Sports or OHS sectors), sales and adoption rates of dorsaVi’s
system are, in part, likely to be influenced by the availability and level of reimbursement from
government and/or insurance payers. Whilst the dorsaVi’s products already benefit from reimbursement
in some circumstances, there is no guarantee that the use of dorsaVi’s products will receive further
reimbursement.
! General economic conditions, movements in interest and inflation rates and currency exchange rates
may have an adverse effect on the dorsaVi’s activities, as well as on its ability to fund those activities. In
particular, much of its future income is expected to come from the US and European markets and
therefore dorsaVi’s activities will be affected by currency exchange fluctuations.
! dorsaVi is not currently profitable. Proceeds from the initial float in the 2014 financial year and
subsequent capital raisings were and are primarily being used to fund, both, the commercial rollout of
dorsaVi’s products and continued product development. There is no guarantee that the commercial
rollout will result in profitability for the Group. If the commercial roll out is slower or less successful than
planned, dorsaVi may need to raise additional capital in the future.
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Significant Changes in the State of Affairs
The following changes in the state of affairs occurred during the period:
! On 18 August 2016, dorsaVi Ltd announced that it had entered into a partnership with a leading US-
based sports injury expert to develop an Athletic Movement Index (AMI) to be used on the ViPerform
platform to optimise athletic performance in college and school athletes.
! On 29 September 2016, dorsaVi Ltd announced that they had been awarded a Victorian Government
Future Industries grant of $350,000 to assist in the implementation, over an eighteen-month period
ended 28 February 2018, of new manufacturing technologies and processes.
! On 27 October 2016, dorsaVi Ltd announced the launch of a US based patient registry to recruit low
back pain patients to produce a series of medial publications and to form part of dorsaVi’s
reimbursement strategy for the US market.
! On 29 November 2016, at dorsaVi Ltd’s annual general meeting, shareholders approved the grant of
900,000 performance rights to the Chief Executive Officer, Andrew Ronchi pursuant to the dorsaVi
Employee Share Ownership Plan (ESOP). The performance rights are subject to performance and vesting
conditions. The performance rights will be granted to Dr Ronchi before 29 November 2017 but will not
be fully vested until 29 November 2019 if performance and vesting conditions are fully satisfied. The
performance rights were granted at a zero-exercise price.
! On 6 December 2016, dorsaVi Ltd launched myViSafe, a complete manual handling movement analysis
training and education solution for the workplace. Crown Resorts Ltd will be the first to manage its
manual handling risk using myViSafe.
! On 6 December 2016, dorsaVi Ltd announced that it had signed a 12-month distribution agreement with
Connect Healthcare Collaboration. Under this agreement Connect will act a sales agent for the dorsaVi
workplace solution, ViSafe.
! On 13 December 2016, dorsaVi Ltd issued 10,869,565 fully paid ordinary shares to various institutional
and sophisticated investors under a private placement. The shares were issued at $0.46 per share and
raised $5,000,000 before costs.
! On 13 December 2016, dorsaVi Ltd also announced the offer, to eligible shareholders, of ordinary shares
under a Share Purchase Plan (SPP) at the same price offered to institutional and sophisticated investors.
The SPP, which closed on 19 January 2017, was oversubscribed and resulted in the issue of 2,173,850
fully paid ordinary shares at $0.46 per share raising $999,971 before costs.
! On 19 December 2016, dorsaVi Ltd announced that it had signed a twelve-month agreement with
Heathrow Airport to assist it with its plans to implement new manual handling aids across all its
terminals.
! On 20 January 2017, dorsaVi Ltd shareholders, at a general meeting, approved the issue of 4,347,828
fully paid ordinary shares, at $0.46 per share, to major shareholder, Starfish Technology Fund II Trust A
and Starfish Technology Fund II Trust B. This share issue raised $2,000,001.
! On 23 February 2017, dorsaVi Ltd announced that the UK’s Network Rail (High Speed) Ltd would use
dorsaVi’s ViSafe product to enhance its understanding of movement associated with manual work by its
overhead contact system and track maintenance teams.
! On 4 May 2017, dorsaVi Ltd announced that Chinese Patent Application 201280017642.1 had been
granted. This is the first patent granted for the automatic detection of whether a person is standing,
sitting, lying down or engaged in dynamic activity. Patent applications covering this intellectual property
are undergoing review on other geographies.
! On 11 May 2017, dorsaVi Ltd announced that Snowy Hydro Ltd would undertake an extensive program
of ViSafe assessments to provide them with a better understanding of the movement profiles associated
with civil and maintenance roles and to enable informed modification of related plant and equipment.
! On 15 May 2017, dorsaVi Ltd announced the commercial release of its ViMove2 product featuring
smaller, faster and easier to use sensors, together with a simplified software interface, improved
reporting tools, out of clinic monitoring, a comprehensive exercise video library and a patient app.
! On 15 May 2017, dorsaVi Ltd granted of 1,250,000 options to a senior executive and 50,000 to an
employee pursuant to the dorsaVi Employee Share Ownership Plan (ESOP). The options have an exercise
price of $0.33 and expire 5 years from the date of vesting. 550,000 of the options vested on grant date.
750,000 of the options are subject to performance and vesting conditions over three years and will not
be fully vested until the year ended 30 June 2020 if performance and vesting conditions are fully
satisfied.
! On 5 June 2017, dorsaVi Ltd granted of 2,849,000 performance rights to five senior executives and
three employees pursuant to the dorsaVi Employee Share Ownership Plan (ESOP). The performance
rights were granted at a zero-exercise price. 250,000 of the performance rights vested on 1 July 2017.
2,599,000 of the performance rights are subject to performance and vesting conditions over three years
and will not be fully vested until the year ended 30 June 2020 if performance and vesting conditions are
fully satisfied.
12
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
! On 14 June 2017, dorsaVi Ltd announced that Kieser Australia had signed a three-year agreement to use
ViMove2 across its network of nine centres located in Melbourne and Sydney.
After Balance Date Events
With the exception of the following, no matters or circumstances have arisen since the end of the financial
year that have significantly affected or may significantly affect the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
! On 14 July 2017, dorsaVi Ltd received 510(k) Clearance by the US Food and Drug Administration (FDA)
for the next generation ViMove2 sensor designed to measure, record and analyse movement and muscle
activity of the lower back.
! On 27 July 2017, the Remuneration Committee and the Board completed their assessments of the
performance of key management personnel for the year ended 30 June 2017. Of the 795,666
performance rights and performance options previously granted in respect of that year it was confirmed
that performance outcomes would result in 407,363 (51%) of these rights and options vesting. In
accordance with performance agreements these rights and options will vest on 1 October 2017 and 1
January 2018.
! On 14 August 2017, dorsaVi Ltd issued 250,000 fully paid ordinary shares, at $nil per share, to
employees, under the dorsaVi ESOP. The issue of these shares arose on the vesting of 250,000
performance rights previously granted as a result of those employees meeting the performance
conditions attached to the rights.
! On 28 August 2017, dorsaVi Ltd announced that Herb Elliott had advised the Board of his intention to
retire as Chairman and as a director of dorsaVi at the Company’s Annual General Meeting (AGM) to be
held on 23 November 2017. Mr Greg Tweedly, the current Chair of the Audit and Risk Committee, will
succeed Herb Elliott as Chairman at the AGM.
Likely Developments
The following likely developments in the business of the Group are expected to influence its financial results
in the near term:
! The Group expects continued growth in total revenue, year on year, in the Australian, Europe and US
markets from its OHS consultancy and Clinical revenue streams.
! The Group also expects to increase, year on year, the annuity revenue proportion of total OHS and
Clinical revenue.
! The Group expects that, the new product released into the Australian market during 2017, will be
progressively released into the UK and US markets during the 2018 financial year.
Environmental Regulation
The Group’s operations are not subject to any significant environmental Commonwealth or State regulations
or laws.
Dividend Paid, Recommended and Declared
No dividends were paid, declared or recommended since the start of the financial year.
Equity Instruments
Performance rights and options over unissued ordinary shares granted by dorsaVi Ltd during or since the
financial year end to executives were as follows:
Executives
A Ronchi
M Blackburn
M Connell
M Heaysman
M May
M Umer
Z Wyhatt
Equity Instrument
Performance Rights
Performance Rights
Performance Rights
Performance Rights
Performance Rights
Performance Rights
Options
Granted during the Year
900,000
450,000
300,000
500,000
675,000
150,000
1,250,000
13
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
There were no performance rights or options over unissued ordinary shares granted to non-executive
directors during or since the financial year end. Further details regarding options granted as remuneration
are provided in the Remuneration Report below.
Shares under Option
Unissued ordinary shares of dorsaVi Ltd under option at the date of this report are as follows:
Date Options Granted
Number of
Unissued Ordinary Shares
under Option
Issue Price of
Shares
Expiry Date of the
Options
2 September 2014
24 March 2016
15 May 2017
15 May 2017
15 May 2017
15 May 2017
15 May 2017
100,000
200,000
550,000
133,333
133,333
133,334
350,000
1,600,000
$0.40
$0.40
$0.33
$0.33
$0.33
$0.33
$0.33
1 September 2019
24 March 2021
15 May 2022
1 October 2022
1 October 2023
1 October 2024
1 July 2024
No option holder has any right under the options to participate in any other share issue of the Group.
Shares Issued on Exercise of Options
To the date of this report, there have been no shares issued during or since the end of the year as a result
of the exercise of an option over unissued shares.
Shares Subject to Performance Rights
Unissued ordinary shares of dorsaVi Ltd subject to performance rights at the date of this report are as
follows:
Date Performance
Rights Granted
Number of Unissued
Ordinary Shares subject to
Performance Rights
Issue Price of
Shares
Vesting Date of
Performance Rights
5 June 2017
5 June 2017
5 June 2017
5 June 2017
5 June 2017
250,000
662,334
622,334
622,332
1,592,000
3,749,000
-
-
-
-
-
1 July 2017
1 October 2017
1 October 2018
1 October 2019
1 July 2019
A performance right holder does not have any right to participate in any other share issue of the Group until
the performance rights vest and are converted to ordinary shares.
Shares Issued on Vesting of Performance Rights
Since 30 June 2017 and to the date of this report, 250,000 shares were issued on the vesting of 250,000
performance rights. There remain 3,499,000 performance rights that do not convert to issued shares unless
performance conditions are met and they vest.
Information on Directors and Company Secretary
Herbert James Elliott, AC, MBE, MA (Cantab) – Non-executive Chairman
Herb Elliott is the Chairman of dorsaVi Ltd and chairs the Nomination and Remuneration Committee. He was
appointed to the Board on 29 October 2013.
Herb has been a chairman of Telstra Foundation Limited (March 2002 to December 2010). Herb is a former
director of Ansell Limited (February 2001 to October 2006). Herb is a former director of Fortescue Metals
Group Limited (ASX: FMG). He was a director of Fortescue from October 2003 and was Group chairman from
2007 to 2011. He was the inaugural chairman of the National Australia Day Committee, a Commissioner of
the Australian Broadcasting Commission and deputy chairman of the Australian Sports Commission.
14
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Herb was also a director of the World Olympians Association and was a gold medallist (1500 metres
athletics) at the Rome 1960 Olympics. Previous executive roles include president of PUMA North America.
Herb is an honorary Doctor of the Queensland University of Technology.
No other directorships of listed companies were held during the three years to 30 June 2017.
Ashraf Attia, BSc (Eng)(Hons), MSc (Biomed. Eng), Dip (Mktg), FAICD – Non-executive Director
Ash Attia serves on the Audit and Risk Committee. He was appointed to the Board on 14 July 2008.
Ash has had senior management experience in multinational operations for over 25 years within the medical
devices, biotechnology and diagnostics industries. He was most recently the Managing Director, Asia Pacific
of St Jude Medical/Thoratec, a Group with global revenues of over 5.5 billion, which manufactures and sells
cardiac assist devices for use by patients with heart failure. Ash has also consulted to several organisations
in the areas of business development, strategic marketing, sales and marketing management, and
distribution strategies.
No other directorships of listed companies were held during the three years to 30 June 2017.
Michael Panaccio, BSc (Hons), MBA, PhD, FAICD – Non-executive Director
Michael Panaccio serves on the Audit and Risk Committee and the Nomination and Remuneration
Committee. He was appointed to the Board on 16 May 2008.
Michael is one of the founders of Starfish Ventures Pty Ltd, an Australian based venture capital manager. He
was formerly an Investment Manager with JAFCO Investment (Asia Pacific). Prior to joining JAFCO, Michael
was Head of the Department of Molecular Biology at the Victorian Institute of Animal Sciences. Michael has
previously been a director of numerous technology businesses in Australia and the US including ImpediMed
Ltd (resigned August 2016), SIRTeX Medical Ltd, Protagonist Therapeutic Inc and Energy Response Pty Ltd.
With the exception of ImpediMed Ltd, no other Directorships of listed companies were held during the three
years to 30 June 2017. Michael is also a director of Starfish Ventures Pty Ltd, MuriGen Therapeutics Pty Ltd,
Armaron Bio Ltd, Ofidium Pty Ltd, Mimetica Pty Ltd and Cylite Pty Ltd.
Gregory John Tweedly, B. Com, CPA, GAICD – Non-executive Director
Greg Tweedly chairs the Audit and Risk Committee and serves on the Nomination and Remuneration
Committee. He was appointed to the Board on 29 October 2013.
Greg is a Director of Melbourne Health, Chair of the Personal Injury Education Foundation and was a Director
and CEO of the Victorian WorkCover Authority (WorkSafe) from 2003 to 2012. Prior to joining WorkSafe,
Greg was an executive with the Transport Accident Commission from 1996 to 2002 in various senior roles
including Chief Operating Officer. He was formerly a Director of the Emergency Services and
Telecommunications Authority, Director of the Institute of Safety Compensation and Recovery Research, a
Director of the Personal Injury Education Foundation, a Director and Chair of the Victorian Trauma
Foundation, Chair of the Heads of Workers’ Compensation Authorities of Australia and New Zealand and
Member of SafeWork Australia and its predecessor organisation.
No other directorships of listed companies were held during the three years to 30 June 2017.
Andrew Ronchi, B. App. Sci. (Physio), PhD (RMIT Eng), GAICD – Chief Executive Officer, Director
Andrew Ronchi was appointed to the Board on 18 February 2008.
Before co-founding dorsaVi, Andrew was a practising physiotherapist both at an AFL club and in private
practice. He is a founding partner in two physiotherapy centres, the largest of these employing 28 staff
(including 13 physiotherapists). Prior to the formation of dorsaVi, Andrew undertook a PhD in Computer and
Systems Engineering, investigating the reliability and validity of transducers for measuring lumbar spine
movement. As CEO of dorsaVi Ltd, Andrew is responsible for all aspects of the Group’s operations.
No other directorships of listed companies were held during the three years to 30 June 2017.
15
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Brendan Case, MComLaw (Melb), BEc, CPA, Grad Dip App Fin, Dip FP, FCIS
Brendan Case has served as dorsaVi Ltd’s secretary since October 2013 and has more than 20 years of
company secretarial, corporate governance and finance experience. He is a former Associate Company
Secretary of National Australia Bank Limited (NAB), former secretary of NAB’s Audit and Risk Committees
and has held senior management roles in risk management and regulatory affairs.
Directors’ Meetings
The number of meetings of the board of directors and of each board committee held during the financial
year and the numbers of meetings attended by each director were:
Mr Herb Elliott
Mr Ashraf Attia
Dr Michael Panaccio
Mr Greg Tweedly
Dr Andrew Ronchi
Mr Herb Elliott
Dr Michael Panaccio
Mr Greg Tweedly
Board of Directors
Eligible to
Attend
8
8
8
8
8
Attended
8
5
8
8
8
Audit and Risk Committee
Attended
Eligible to
Attend
-
2
2
2
-
-
2
2
2
-
Nomination and Remuneration Committee
Eligible to Attend
2
2
2
Attended
2
2
2
Directors’ Interest in Shares, Performance Rights or Options as at 30 June 2017
Names of Holders
Michael Panaccio
Andrew James Ronchi
Ashraf Attia
Herbert James Elliott
Gregory John Tweedly
Ordinary Shares of dorsaVi Ltd
72,421,255
8,331,546
211,139
100,097
86,347
The directors have no interests in performance rights or options over shares in dorsaVi Ltd as at the date of
this report with the exception of Andrew Ronchi who has an interest in 900,000 performance rights which,
subject to the satisfaction of performance conditions, can vest into shares progressively over the next three
financial years.
Indemnification and Insurance of Directors and Officers
The Group has insured its Directors, Secretary and executive officers for the financial year ended 30 June
2017. Under the Group’s Directors and Officers Liability Insurance Policy, the Group cannot release to any
third party or otherwise publish details of the nature of the liabilities insured by the policy or the amount of
the premium.
The Group also indemnifies every person who is or has been an officer of the Group against any liability
(other than for legal costs) incurred by that person as an officer of the Group where the Group requested the
officer to accept appointment as Director.
To the extent permitted by law and subject to the restrictions in section 199A and 199B of the Corporations
Act 2001, the Group indemnifies every person who is or has been an officer of the Group against reasonable
legal costs incurred in defending an action for a liability incurred by that person as an officer of the Group.
ASIC Instrument on Rounding of Amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the
amounts in the directors’ report and in the financial statements have been rounded to the nearest dollar.
Indemnification and Insurance of Auditors
No indemnities have been given or insurance premiums paid during or since the end of the financial year for
any auditors of the Group.
16
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Proceedings on behalf of the Group
No person has applied for leave of Court to bring proceedings on behalf of the Group.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act
2001 in relation to the audit for the financial year is provided with this report.
Non-audit Services
Non-audit services are approved by resolution of the audit committee and approval is provided in writing to
the board of directors. Non-audit services were provided by the auditors of entities in the consolidated group
during the year, namely Pitcher Partners Melbourne, network firms of Pitcher Partners, and other non-
related audit firms, as detailed below. The directors are satisfied that the provision of the non-audit services
during the year by the auditor is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001 for the following reasons:
! All non-audit services were subject to the corporate governance procedures adopted by dorsaVi Ltd and
have been reviewed and approved by the Audit Committee to ensure they do not impact on the integrity
and objectivity of the auditor; and
! The non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve
reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for
dorsaVi Ltd or any of its related entities, acting as an advocate for dorsaVi Ltd or any of its related
entities, or jointly sharing risks and rewards in relation to the operations or activities of dorsaVi Ltd or
any of its related entities.
Amounts Paid and Payable to Pitcher Partners Melbourne for Non-audit
Services:
Taxation and Other Compliance Services
Total Remuneration for Non-audit Services
2017
$
2016
$
26,831
26,831
24,595
24,595
17
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Remuneration Report (Audited)
The Directors present the Group’s 2017 Remuneration Report, which details the remuneration information
for dorsaVi Ltd’s, Non-Executive Directors, Executive Directors and other Key Management Personnel.
A.
Details of the Key Management Personnel
Period of Responsibility
Position
Directors
Herb Elliott
Ashraf Attia
Michael Panaccio
Greg Tweedly
Full Year
Full Year
Full Year
Full Year
Executive Director
Andrew Ronchi
Full Year
Executives
Damian Connellan
Megan Connell
Meagan Blackburn
Muhammad Umer
Matthew May
Zoë Whyatt
Mark Heaysman
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
B.
Remuneration Policies
Chairman, Non-Executive Director
Independent, Non-Executive Director
Non-Executive Director
Independent, Non-Executive Director
Chief Executive Officer/Director
Chief Financial Officer
Chief Marketing Officer
Chief Innovation Officer
Software Architect
Sales Manager, Australia
Chief Operating Officer, Europe
Chief Operating Officer, USA
Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board of Directors is responsible for making
recommendations to the Board on the remuneration arrangements for each Non-Executive Director (NED),
Executive Director/Chief Executive Officer (CEO) and each Executive reporting to the CEO. The current
members of the Nomination and Remuneration Committee are: Herb Elliott, Michael Panaccio and Greg
Tweedly.
The Nomination and Remuneration Committee assess the appropriateness of the nature and amount of
remuneration of executives on a periodic basis by reference to relevant employment market conditions with
the overall objective of ensuring maximum stakeholder benefit from the retention of high quality, high
performing directors and executive team. In determining the level and composition of executive
remuneration, the Nomination and Remuneration Committee may also engage external consultants to
provide independent advice.
The primary responsibility of the Nomination and Remuneration Committee is to review and recommend to
the Board:
! Executive remuneration and incentive policies and practices;
! The Executive Director's total remuneration having regard to remuneration and incentive policies;
! The design and total proposed payments from any executive incentive plan and reviewing the
performance hurdles for any equity based plan;
! The remuneration and related policies of Non-Executive Directors for serving on the board and any
committee (both individually and in total); and
! Any other responsibilities as determined by the Nomination and Remuneration Committee or the Board
from time to time.
Remuneration Strategy
The remuneration strategy of dorsaVi Ltd is designed to attract, motivate and retain Employees, Executives
and Non-Executive Directors in Australia, the United States and Europe by identifying and rewarding high
performers and recognising the contribution of each employee to the continued growth and success of the
Group.
18
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
To this end, the key objectives of the Group’s reward framework are to:
! Align remuneration with the Group’s business strategy;
! Offer an attractive mix of remuneration benchmarked against the applicable market’s region and country
practices;
! Provide strong linkage between individual and Group performance and rewards;
! Offer remuneration based on internal equity with other employees and individual skill matching the role
requirements with their experience and responsibilities;
! Align the interests of executives and shareholders and share the success of the Group with the
employees; and
! Support the corporate mission statement, values and policies through the approach to recruiting,
organizing and managing people.
Remuneration Structure
In accordance with best practice corporate governance, the structure of the non-executive directors and
executive remuneration is separate and distinct.
Non-Executive Director Remuneration Structure
The ASX Listing Rules specify that an entity must not increase the total aggregate amount of remuneration
of Non-Executive Directors without the approval of holders of its ordinary securities.
The Board, and since its inception the Nomination and Remuneration Committee, considers the level of
remuneration required to attract and retain Directors with the necessary skills and experience for the
Group’s Board. This remuneration is reviewed with regard to market practice and Directors’ duties and
accountability.
The constitution provides that the Non-Executive Directors are entitled to remuneration for their services as
determined by the Board up to an aggregate limit of $500,000 (which may be increased with Shareholder
approval). The Group has obtained advice about remuneration levels for Directors of listed companies and,
based on that advice, set the following annual non-executive Directors’ fees:
! Chairman: $75,092 plus superannuation;
! Other Directors: $50,000 plus superannuation; and
! Further fees for acting as chairman of a committee: $5,000 plus superannuation per committee.
The Group determines the maximum amount for remuneration, including thresholds for share-based
remuneration for Executives, by resolution. The remuneration received by the Non-Executive Directors for
the year ended 30 June 2017 is detailed in Table 1 of this section of the report.
Non-executive directors receive fees and do not receive options or bonus payments.
Executive Remuneration Structure
The Group provides a remuneration package that incorporates both cash based remuneration and share-
based remuneration. The contracts for service between the Group and executives are on a continuing basis
the terms of which are not expected to change in the immediate future. Share-based remuneration is
conditional upon continuing employment thereby aligning director and shareholder interests.
Remuneration consists of the following key elements:
! Fixed remuneration (base salary and superannuation); and
! Variable remuneration – short term incentives (STI) in the form of an annual incentive plan and long-
term equity incentive (LTI)
Fixed Remuneration
Objective
Fixed remuneration is reviewed annually by the Board / Nomination and Remuneration Committee. The
process consists of a review of the Group and individual performance, relevant comparative remuneration
from external and internal sources and where appropriate, external advice on policies and practices.
19
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Structure
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash
and allowances (such as motor vehicle allowance). It is intended that the manner of payment chosen will be
optimal for the recipient without creating undue cost for the Group.
Variable Remuneration – Short-Term Incentive (STI)
Objective
The key objective of the STI program is to link the achievement of the Group’s operational targets with the
remuneration received by the executives charged with meeting those targets.
Structure
Any STI granted depend on the extent to which specific targets set at the beginning of the financial year or
on appointment are met. The Key Milestones or Key Performance Indicators (KPI’s) cover individual, team
and organisational financial measures of performance. Typically included are measures such as: achieving
sales/revenue targets and/or growth, and meeting Group compliance requirements. These measures were
chosen as they represent the key drivers for the short-term success of dorsaVi.
The Group has predetermined benchmarks that must be met in order to trigger STI under the STI scheme.
Either on an annual or financial year basis, after consideration of performance against the Key Milestones or
KPIs, the Nomination and Remuneration Committee, in line with their responsibilities determine the amount,
if any, of the STI to be awarded to each Executive. This process usually occurs within one month after the
trigger date. Typically, STI awards are made under the Employee Share Ownership Plan (ESOP) and are
delivered in the form of share options or performance rights. Each option entitles the holder to one fully paid
ordinary share of dorsaVi Ltd at an exercise price to be determined in accordance with the ESOP or by
determination by the Nomination and Remuneration Committee. Each performance right vested entitles the
holder to one fully paid ordinary share of dorsaVi Ltd at $nil price.
The annual STI available for executives across the Group are subject to the approval of the Nomination and
Remuneration Committee.
Variable Remuneration – Long-Term Incentive (LTI)
Objective
The objectives of providing long term incentives are: to motivate and retain key dorsaVi employees; to
attract quality employees; to create commonality of purpose between dorsaVi and its employees; to add
wealth for all shareholders of the Group through the motivation of dorsaVi’s employees; and by allowing
dorsaVi’s employees to share the rewards of the success of dorsaVi through the acquisition of, or
entitlements to, shares and options.
Structure
The Board offers LTIs to reward the performance of employees, which is in alignment with shareholders’
interests and the long-term benefit of the Group. LTI awards are made under the Employee Share
Ownership Plan (ESOP) and are delivered in the form of share options, performance rights or loan for
shares. Each option entitles the holder to one fully paid ordinary share of dorsaVi Ltd at an exercise price to
be determined in accordance with the ESOP or by determination by the Nomination and Remuneration
Committee. Each performance right vested entitles the holder to one fully paid ordinary share of dorsaVi Ltd
at $nil price.
Where an LTI participant ceases employment prior to vesting in their award, the options and unvested
performance rights are forfeited unless the Nomination and Remuneration Committee applies its discretion
to allow vesting at or post cessation of employment in appropriate circumstances.
Options and performance rights were granted, under the ESOP plan, during the 2017 Financial Year. See
Table 6.
20
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Employment Agreements
The Group has entered into Employment Agreements with all executives, including the CEO. The Group may
terminate the Executive’s Employment Agreements by providing at least one month’s written notice or
providing payment in lieu of the notice period (based on the fixed component of the executive’s
remuneration). The Group may terminate the contract at any time without notice if serious misconduct has
occurred.
The notice periods for key management personnel are as follows:
Name
Andrew Ronchi
Damian Connellan
Matthew May
Muhammad Umer
Mark Heaysman
Meagan Blackburn
Zoë Whyatt
Megan Connell
Notice Period
6 months
3 months
3 months
3 months
3 months
8 weeks’ notice until 3 years of continuous employment. One additional week for each
completed year of continuous employment up to a maximum of 12 weeks’ notice.
12 weeks’ notice
8 weeks’ notice
CEO Remuneration
Under Andrew Ronchi’s employment agreement his fixed remuneration is $250,000 per annum plus
superannuation giving a total of $273,750 inclusive of superannuation. In addition, Andrew Ronchi has, as
approved at a meeting of shareholders, been granted 900,000 performance rights. The vesting of these
performance rights is subject to performance conditions over three years but will not fully vest before
29 November 2019. None of these performance rights vested during the year ended 30 June 2017.
Upon termination of Andrew Ronchi’s employment contract, he will be subject to a restraint of trade for a
maximum of 12 months.
C.
Details of Key Management Personnel Remuneration
(a)
Non-Executive Directors’ Remuneration: Table 1
Short-Term
Post Employment
2017
Salary
Fees
Cash
Bonus
Non-
Monetary
Other
$
Non-Executive Directors
H Elliott
A Attia
M Panaccio (i)
G Tweedly
74,341
54,450
54,120
49,912
232,823
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
Super-
annu-
ation
$
Retire-
ment
Benefits
$
Termin-
ation
Benefits
$
7,062
5,173
-
9,710
21,945
-
-
-
-
-
-
-
-
-
-
Long-
term
Share-
based
Pay-
ments
Incentive
Plans
Equity
TOTAL
Total
Perform-
ance
Related
Options
as % of
Total
$
-
-
-
-
-
$
-
-
-
-
-
$
%
%
81,403
59,623
54,120
59,622
254,768
-
-
-
-
-
-
-
-
-
-
(i)
Michael Panaccio provides his services via Starfish Technology Fund II, LP.
Short-Term
Post Employment
2016
Salary
Fees
Cash
Bonus
Non-
Monetary
Other
$
Non-Executive Directors
H Elliott
A Attia
M Panaccio (i)
G Tweedly
67,583
45,000
49,163
49,500
211,246
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
Super-
annu-
ation
$
Retire-
ment
Benefits
$
Termin-
ation
Benefits
$
6,420
3,919
-
4,311
14,650
-
-
-
-
-
-
-
-
-
-
Long-
term
Share-
based
Pay-
ments
Incentive
Plans
Equity
TOTAL
Total
Perform-
ance
Related
Options
as % of
Total
$
-
-
-
-
-
$
-
-
-
-
-
$
%
%
74,003
48,919
49,163
53,811
225,896
-
-
-
-
-
-
-
-
-
-
(i)
Michael Panaccio provides his services via Starfish Technology Fund II, LP.
21
(i)
(ii)
(iii)
(iv)
2016
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(b)
Executives’ Remuneration: Table 2
Short-Term
Post Employment
Super-
annu-
ation
$
Retire-
ment
Benefits
$
Termin-
ation
Benefits
$
19,616
-
2017
Salary
Fees
Cash
Bonus
Non-
monetary
Other
$
Executive Directors
A Ronchi
249,999
Executives
M Blackburn
D Connellan
M Connell
M Heaysman
(i) (iii)
M May
M Umer
Z Whyatt (i)
(iv)
205,000
109,289
119,013
281,039
205,000
150,000
134,431
1,453,771
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
19,475
-
11,306
68,062 9,738
-
-
19,475
14,250
16,659 4,033
84,721 97,893
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Long-
term
Share-
based
Pay-
ments
Incentive
Plans
Equity
(ii)
TOTAL
Total
Perform-
ance
related
Share
based
Payments
as % of
Total
$
-
-
-
-
-
-
-
-
-
$
$
%
%
97,402
367,017
8,560
-
4,410
233,035
109,289
134,729
33,629
392,468
39,252
3,378
263,727
167,628
104,254
259,377
290,885 1,927,270
-
-
-
-
-
-
-
-
-
26.5
3.7
-
3.3
8.6
14.9
2.0
40.2
15.1
Other benefits include the payment of a relocation allowance and certain health and disability related
insurance premiums as is customary in the US and UK markets.
Share based payments comprise mixture of the grant of options, performance rights, and, loan
shares backed by an interest free, no-recourse loan. For accounting purposes, all these equity
instruments are valued the same as options.
Converted into AUD from USD at the average exchange rate throughout 2016/2017
(1 AUD = 0.7545 USD).
Converted into AUD from GBP at the average exchange rate throughout 2016/2017
(1 AUD = 0.5951 GBP).
Short-Term
Post Employment
Salary
Fees
Cash
Bonus
Non-
monetary
Other
Super-
annu-
ation
$
Retire-
ment
Benefits
$
Termin-
ation
Benefits
$
$
221,539 78,264
$
$
Executive Directors
A Ronchi
231,250
10,897
52,307
110,800
Executives
J Whelan
D Connellan
(ii)
D Wildermuth
(v) (viii)
M Connell (iii)
(xi)
M Blackburn
(i)
31,250
M Umer (iv)
M May
196,004
Z Whyatt (vii) 162,800
J Kowalczyk
(v) (viii) (ix)
M Heaysman
(x)
144,442
251,728
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
180,000 20,000
- 19,308
-
-
-
4,801
-
523 23,685
-
1,035
- 13,722
-
2,969
- 18,620
4,884
-
42,557 11,534
67,939 17,652
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL
Total
Perform-
ance
Related
Share
based
Payments
as % of
Total
Long-
Term
Share-
based
pay-
ments
Incentive
Plans
Equity
(vi)
$
-
-
-
-
-
-
-
-
-
-
-
$
$
%
%
- 250,558
-
-
57,108
- 110,800
-
-
- 324,011 24.2
-
11,932
- 158,164
863
35,082
2,466 217,090
26,152 193,836
15,326 321,145
-
-
-
-
-
-
-
-
-
-
-
-
2.5
1.1
13.5
4.8
71,504 357,095
5.6
20.0
(i)
(ii)
(iii)
(iv)
(v)
(vi)
-
-
-
111,019 118,210
1,593,017 98,624
-
Appointed 1 July 2015.
Appointed 13 October 2015.
Appointed 24 May 2016.
Appointed 15 April 2016.
Other benefits for US based employees include the payment of certain health and disability related
insurance premiums as is customary in the US market. This arrangement started in Q1 2014/2015.
Share based payments comprise loan shares granted under the dorsaVi Ltd's ESOP and are backed
by an interest free, no-recourse loan. For accounting purposes, these are valued the same as
options.
116,311 2,036,821
5.7
4.8
22
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(vii)
(viii)
(ix)
(x)
(xi)
Converted into AUD from GBP at the average exchange rate throughout 2015/2016
(1 AUD = 0.4914 GBP).
Converted into AUD from USD at the average exchange rate throughout 2015/2016
(1 AUD = 0.7283 USD).
Other benefits include post-employment costs associated with resignation of J Kowalczyk.
Relocation allowance included in other benefits.
Employed 3 days per week.
D.
Relationship between Remuneration and Group Performance
(a)
Remuneration Not Dependent on Satisfaction of Performance Condition
The non-executives remuneration policy is not directly related to Group performance. The Board considers a
remuneration policy based on short-term returns may not be beneficial to the long-term creation of wealth
by the Group for shareholders.
(b)
Remuneration Dependent on Satisfaction of Performance Condition
A portion of the Executive Remuneration is based on attainment of performance conditions. Performance-
based remuneration includes short-term cash bonus and long-term incentive plan. Performance-based
remuneration granted to key management personnel has regard to Group performance over a twelve month
to 2-year period.
The following table summarises the performance conditions for KMP with performance-linked
equity instruments: Table 3.
KMP
Andrew Ronchi
Damian Connellan
Megan Connell
Meagan Blackburn
Muhammad Umer
Matthew May
Zoe Whyatt
Mark Heaysman
Conditions for vesting of Options and Performance Rights
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
Key Milestones as determined by and at the discretion of the Board
These vesting conditions were selected to promote the creation of shareholder wealth during the period.
The following Table sets out the Terms and Conditions of each Grant of the Performance-Linked
Bonus affecting Compensation in Current and Future Years: Table 4
As at the date of this report the following performance linked bonuses are payable for key management
personnel.
2017
A Ronchi
M Blackburn
M Connell
M Heaysman
M May
M Umer
Z Whyatt
(i)
Total Performance
Linked Bonus
$
97,402
8,560
4,410
33,629
39,252
3,378
104,254
Awarded/Available
Forfeited
%
81%
80%
72%
95%
89%
85%
95%
%
19%
20%
28%
5%
11%
15%
5%
All performance bonuses are in the form of performance rights that convert to shares on their
vesting date, 1 October 2017 or 1 January 2018, or options, and have been valued at the market
share price on date of grant.
23
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(c)
Consequences of Group’s Performance on Shareholder Wealth
The following Table summarises Group Performance and Key Performance Indicators: Table 5
Group Performance
Revenue
% increase in revenue
Loss before tax
% (increase)/decrease in loss before tax
Change in share price
Dividend paid to shareholders
Return of capital
Total remuneration of KMP
Total performance based remuneration
2017
3,897,882
20%
(4,717,447)
20%
7%
-
-
2,182,038
290,885
2016
3,238,138
75%
(5,915,567)
32%
4%
-
-
2,450,850
98,264
2015
1,850,416
141%
(8,684,709)
(111%)
(41%)
-
-
2,442,136
140,295
2014
767,418
42%
(4,121,606)
(90%)
10%
-
-
1,213,960
79,512
E.
Key Management Personnel’s Share-Based Compensation
(a)
Details of Compensation Equity
Table 6
2017
Grant Date (i)
Number
Granted
Value per
Unit at
Grant
Date
$
Vested
during the
Year
Year in
which
Equity
may Vest
Terms and Conditions for each Grant
Vest
Lapsed
during the
Year
Exercise
Price
Expiry
Date
First
Exercise
Date
Last
Exercise
Date
%
$
2016
- 250,000
0.28
2017
- 250,000
0.28
2018
- 250,000
0.28
-
-
-
-
-
-
-
-
-
Executives
Z Whyatt
30-Sep-15 250,000
0.28
Z Whyatt
30-Sep-15 250,000
0.28
Z Whyatt
30-Sep-15 250,000
0.28
M Heaysman
3-Jul-14 250,000
0.04
M Heaysman
17-Aug-15 500,000
0.17
M May
5-Nov-14
20,000
0.27
M Umer
25-Feb-15
30,000
0.23
A Ronchi
29-Nov-16 150,000
0.45
A Ronchi
29-Nov-16 150,000
0.45
A Ronchi
29-Nov-16 150,000
0.45
A Ronchi
29-Nov-16 450,000
0.45
Z Whyatt
-
-
-
-
-
-
-
-
-
-
-
2017
2020
-
-
2019
100%
2020
100%
2018
2019
2020
2020
-
-
-
-
15-May-17 500,000
0.33 500,000
2017
100%
Z Whyatt
15-May-17 133,333
0.33
Z Whyatt
15-May-17 133,333
0.33
Z Whyatt
15-May-17 133,334
0.33
Z Whyatt
15-May-17 350,000
0.33
M Heaysman
5-Jun-17
83,334
0.31
M Heaysman
5-Jun-17
83,334
0.31
-
-
-
-
-
-
-
-
-
-
-
-
2018
2019
2020
2020
2018
2019
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.46
3-Jul-19
N/A
N/A
0.26 17-Aug-20 N/A
N/A
0.40
5-Nov-19
N/A
N/A
0.36 25-Feb-20
N/A
N/A
-
-
-
-
1-Oct-17 1-Oct-17 1-Oct-17
1-Oct-18 1-Oct-18 1-Oct-18
1-Oct-19 1-Oct-19 1-Oct-19
29-Nov-19 29-Nov-19 29-Nov-19
0.33 15-May-22 15-May-17 15-May-22
0.33
1-Oct-22 1-Oct-17 1-Oct-22
0.33
1-Oct-23 1-Oct-18 1-Oct-23
0.33
1-Oct-24 1-Oct-19 1-Oct-24
0.33
1-Jul-24 1-Jul-19 1-Jul-24
-
-
1-Jan-18 1-Jan-18 1-Jan-18
1-Jan-19 1-Jan-19 1-Jan-19
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2017
Grant Date (i)
Number
Granted
Value per
Unit at
Grant
Date
$
Vested
during the
Year
Year in
which
Equity
may Vest
Vest
Lapsed
during the
Year
Exercise
Price
%
$
Terms and Conditions for each Grant
Executives
M Heaysman
5-Jun-17 333,332
0.31
M Connell
5-Jun-17
50,000
0.31
M Connell
5-Jun-17
50,000
0.31
M Connell
5-Jun-17
50,000
0.31
M Connell
5-Jun-17 150,000
0.31
M Blackburn
5-Jun-17 100,000
0.31
M Blackburn
5-Jun-17 100,000
0.31
M Blackburn
5-Jun-17 100,000
0.31
M Blackburn
5-Jun-17 150,000
0.31
M May
M May
M May
M May
M May
5-Jun-17 100,000
0.31
5-Jun-17 125,000
0.31
5-Jun-17 125,000
0.31
5-Jun-17 125,000
0.31
5-Jun-17 200,000
0.31
M Umer
5-Jun-17
25,000
0.31
M Umer
5-Jun-17
25,000
0.31
M Umer
5-Jun-17
25,000
0.31
M Umer
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5-Jun-17
75,000
5,775,000
0.31
-
500,000
2020
2018
2019
2020
2020
2018
2019
2020
2020
2017
2018
2019
2020
2020
2018
2019
2020
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expiry
Date
First
Exercise
Date
Last
Exercise
Date
1-Jan-20 1-Jan-20 1-Jan-20
1-Oct-17 1-Oct-17 1-Oct-17
1-Oct-18 1-Oct-18 1-Oct-18
1-Oct-19 1-Oct-19 1-Oct-19
1-Jul-19 1-Jul-19 1-Jul-19
1-Oct-17 1-Oct-17 1-Oct-17
1-Oct-18 1-Oct-18 1-Oct-18
1-Oct-19 1-Oct-19 1-Oct-19
1-Jul-19 1-Jul-19 1-Jul-19
1-Jul-17 1-Jul-17 1-Jul-17
1-Oct-17 1-Oct-17 1-Oct-17
1-Oct-18 1-Oct-18 1-Oct-18
1-Oct-19 1-Oct-19 1-Oct-19
1-Jul-19 1-Jul-19 1-Jul-19
1-Oct-17 1-Oct-17 1-Oct-17
1-Oct-18 1-Oct-18 1-Oct-18
1-Oct-19 1-Oct-19 1-Oct-19
1-Jul-19 1-Jul-19 1-Jul-19
(i)
The options and performance rights granted during the current year are subject to performance and
retention conditions.
As at 30 June 2017, no options have been exercised or performance rights vested and, accordingly, no
shares have been issued as a result of options previously vested or performance rights granted.
25
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2016
Grant Date (i)
Number
Granted
Value per
Unit at
Grant
Date
$
Vested
during
the Year
Year in
which
Equity
may Vest
Vest
%
Terms and Conditions for each Grant
Lapsed
during the
Year
Exercise
Price
Expiry
Date
First
Exercise
Date
Last
Exercise
Date
$
Executives
J Kowalczyk
8-Apr-14 1,000,000 0.30
- 2015 (i) 39%
1,000,000 0.51 11-Dec-15
J Kowalczyk
11-Dec-15
277,778 0.10
277,778 2015 (ii) 100%
- 0.38 11-Dec-16
D Wildermuth
21-Oct-14
900,000 0.26
318,750 2015 (iii) 35%
- 0.40 14-Jul-16
-
-
-
-
-
-
Z Whyatt
30-Sep-15
250,000 0.28
250,000
2016
100%
- 0.28 30-Sep-20 30-Sep-15 30-Sep-20
Z Whyatt
30-Sep-15
250,000 0.28
Z Whyatt
30-Sep-15
250,000 0.28
3-Jul-14
M Heaysman
(iv)
M Heaysman
(iv) 17-Aug-15
M May (iv)
250,000 0.04
500,000 0.17
-
-
-
-
2017
2018
2017
2020
-
-
-
-
- 0.28 30-Sep-21 30-Sep-16 30-Sep-21
- 0.28 30-Sep-22 30-Sep-17 30-Sep-22
- 0.46
3-Jul-19
- 0.26 17-Aug-20
-
-
-
-
-
-
-
-
-
-
5-Nov-14
20,000 0.27
20,000
2019
100%
- 0.40 5-Nov-19
M Umer (iv)
25-Feb-15
30,000 0.23
30,000
2020
100%
- 0.36 25-Feb-20
J Whelan (iv)
(v)
6-May-14
100,000 0.18
3,827,778
-
896,528
2017
-
100,000 0.49 6-May-17
1,100,000
(i)
(ii)
(iii)
(iv)
(v)
The options available to this employee were forfeited on 11 December 2015 as the employee
resigned from the Group.
The option grant shall vest at the same time as they were granted. These options related to prior
service and were not forfeited on termination.
The options available to this employee were forfeited on 14 July 2016 as the employee resigned
from the Group on 14 April 2016.
The share based compensation comprises non-recourse interest free loans granted under the
Employee Share Ownership Plan to acquire shares in dorsaVi. The accounting treatment for non-
recourse loans is consistent with accounting for options. The exercise period is from grant date up to
the fifth-year anniversary.
J Whelan resigned 12 October 2015.
F.
Key Management Personnel’s Equity Holdings
(a)
Number of Equity Holdings held by Key Management Personnel
As at 30 June 2017 key management personnel held options, under the Group’s Employee Share Ownership
Plan 2013, to purchase 1,250,000 ordinary shares of the Group. As at 30 June 2017 500,000 of these
options had vested and were convertible to shares.
As at 30 June 2017 key management personnel held 3,475,000 performance rights, under the Group’s
Employee Share Ownership Plan 2013, which, on vesting, convert to 3,475,000 ordinary shares of the
Group. As at 30 June 2017 none of these performance rights had vested and converted to shares.
26
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(b)
Number of Shares held by Key Management Personnel (Consolidated)
The relevant interest of each key management personnel in the share capital of the Group as notified the
ASX as at 30 June 2017 is as follows:
Table 7
2017
Non-Executive Directors
H Elliott
A Attia
M Panaccio
M Panaccio (relevant
interest)
G Tweedly
Executive Director
A Ronchi
Executives
M Connell
D Connellan
M Blackburn
Z Whyatt
M Umer
M Heaysman
M May
Balance
1/07/16
Received
as
Remuneration
Net
Change
Other
Balance
30/06/17
82,500
208,440
67,055,830
1,000,000
68,750
8,313,949
-
-
253,982
63,496
795,442
1,168,972
20,000
79,031,361
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,597 (i)
2,699 (i)
4,365,425 (ii)
-
100,097
211,139
71,421,255
1,000,000
17,597 (i)
86,347
17,597 (i)
8,331,546
-
-
17,597 (i)
-
-
-
-
4,438,512
-
-
271,579
63,496
795,442
1,168,972
20,000
83,469,873
(i)
(ii)
G.
Acquired shares through the Group's share purchase plan.
Acquired shares through the Group's share purchase plan and as part of a private placement.
Loans to Key Management Personnel
(a)
Aggregate of Loans Made
There were no loans made to key management personnel during the 2017 financial year (2016: $nil). There
were no outstanding loans to key management personnel as at 30 June 2017 (30 June 2016: $nil).
H.
Other Transactions with Key Management Personnel
(a)
Transactions with Key Management Personnel of the Entity or its Parent and their
Personally Related Entities
During the year ended 30 June 2017, dorsaVi Ltd paid $nil (2016: $20,011) to Simon Heaysman, paid $nil
(2016: $2,224) to Dane Heaysman (both inclusive of expense claim reimbursements) and paid $104,038
(2016: $97,754) to Safety Assess Pty Ltd a related Company of Dane Heaysman. These amounts are on
normal commercial terms and were paid to these parties in their capacity as ViSafe Assessors on various
ViSafe projects throughout the financial year. These individuals and company are related to dorsaVi through
their relationship to their father, Mr Mark Heaysman.
(b)
Transactions with Other Related Parties
Starfish Ventures Pty Ltd is a related party as it is connected with a director of dorsaVi Ltd. During the year
ended 30 June 2017, Starfish Ventures Pty Ltd charged rent to dorsaVi Ltd. Total value of these rental
charges was $121,970 (2016: $105,995). The rent was charged to dorsaVi on normal terms and conditions.
The balance outstanding at balance date was $14,916 (2016: $20,772) included in Trade Payables at
Note 14.
27
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
During the year ended 30 June 2017, dorsaVi Ltd paid $54,120 (2016: $49,163) to Starfish Technology
Fund II, LP on behalf of Michael Panaccio for director’s fees.
I.
Use of Remuneration Consultants
During the year the Board did not engage remuneration consultants.
J.
Voting and Comments made at the Group’s 2016 Annual General Meeting (AGM)
At the Group’s most recent AGM, resolution to adopt the prior year remuneration report was put to the vote
and at least 75% of ‘yes’ votes were cast for adoption of that report. No comments were made on the
remuneration report that was considered at the AGM.
-----------------------------------End of the Remuneration Report------------------------------------------
Signed in accordance with a resolution of the directors
Herb Elliott
Director and Chairman
Andrew Ronchi
Director and CEO
Melbourne
Date: 28 August 2017
Melbourne
Date: 28 August 2017
28
AUDITOR’S INDEPENDENCE DECLARATION
To the Directors of dorsaVi Ltd.
In relation to the independent audit for the year ended 30 June 2017, to the best of my knowledge and belief there have
been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act 2001; and
No contraventions of APES 110 Code of Ethics for Professional Accountants.
This declaration is in respect of dorsaVi Ltd and the entities it controlled during the year.
F V RUSSO
Partner
28 August 2017
PITCHER PARTNERS
Melbourne
An independent Victorian Partnership ABN 27 975 255 196
Level 19, 15 William Street, Melbourne VIC 3000
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle
An independent member of Baker Tilly International
29
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Financial Report for the Year Ended – 30 June 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Revenue and Other Income
Sales revenue
Other income
Less: Expenses
Cost of sales
Advertising expenses
Conference expenses
Consultancy expenses
Depreciation and amortisation expenses
Device development expenditure
Employee benefits expenses
Finance costs
Occupancy expenses
Professional fees
Regulatory expenses
Software expenses
Travel expenses
Other expenses
Loss before Income Tax Benefit
Income tax benefit
Loss from Continuing Operations
Notes
2017
$
2016
$
4
4
5
5
5
5
5
6
3,466,027
431,855
3,897,882
3,019,928
218,210
3,238,138
(1,068,139)
(239,990)
(72,596)
(332,815)
(174,677)
(181,033)
(4,302,643)
-
(283,078)
(446,470)
(86,800)
(170,261)
(447,460)
(809,367)
(8,615,329)
(4,717,447)
841,199
(3,876,248)
(841,416)
(228,395)
(59,652)
(443,696)
(115,935)
(118,300)
(4,762,296)
(3,094)
(274,997)
(617,489)
(212,405)
(177,208)
(392,388)
(906,434)
(9,153,705)
(5,915,567)
678,465
(5,237,102)
Other Comprehensive Income
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign subsidiaries net of
tax
Other comprehensive income for the year
Loss for the Year
Loss per share for loss from continuing operations attributable to
equity holders of the parent entity:
Basic loss per share
Diluted loss per share
308,995
308,995
(3,567,253)
191,699
191,699
(5,045,403)
20
20
(2.45 cents)
(2.45 cents)
(3.63 cents)
(3.63 cents)
The above statement should be ready in conjunction with the accompanying notes.
30
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2017
Current Assets
Cash and cash equivalents
Receivables
Inventories
Other assets
Total Current Assets
Non-Current Assets
Intangible assets
Plant and equipment
Total Non-Current Assets
Total Assets
Current Liabilities
Payables
Provisions
Total Current Liabilities
Non-Current Liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Accumulated losses
Total Equity
Notes
2017
$
2016
$
8
9
10
11
12
13
14
15
15
8,609,602
2,410,615
317,157
146,125
11,483,499
2,607,199
381,094
2,988,293
14,471,792
6,029,185
1,820,958
246,781
136,056
8,232,980
1,059,871
310,242
1,370,113
9,603,093
930,084
385,696
1,315,780
714,005
279,114
993,119
30,340
30,340
1,346,120
18,892
18,892
1,012,011
13,125,672
8,591,082
16
17
17
38,440,518
758,286
(26,073,132)
13,125,672
30,709,796
93,496
(22,212,210)
8,591,082
The above statement should be ready in conjunction with the accompanying notes.
31
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated Entity
Balance as at 1 July 2015
Loss for the year
Exchange differences on translation
of foreign operations, net of tax
Total Comprehensive Income for
the Year
Transactions with Owners in their
capacity as Owners:
Issue of shares
Cost of raising capital
Redemption of Employee share
ownership plan
Employee share ownership plan
Options lapsed
Share
Capital
$
23,855,099
-
Reserves
$
78,697
-
Accumulated
Losses
$
Total Equity
$
(17,317,080)
(5,237,102)
6,616,716
(5,237,102)
-
-
191,699
-
191,699
191,699
(5,237,102) (5,045,403)
7,719,800
(381,538)
56,435
-
-
6,854,697
-
-
-
-
7,719,800
(381,538)
-
165,072
(341,972)
(176,900)
-
-
341,972
341,972
56,435
165,072
-
7,019,769
Balance as at 30 June 2016
30,709,796
93,496
(22,212,210)
8,591,082
Balance as at 1 July 2016
Loss for the year
Exchange differences on translation
of foreign operations, net of tax
Total Comprehensive Income for
the Year
Transactions with Owners in their
capacity as Owners:
Issue of shares
Cost of raising capital
Redemption of Employee share
ownership plan
Employee share ownership plan
Options lapsed
30,709,796
-
93,496
-
(22,212,210)
(3,876,248)
8,591,082
(3,876,248)
-
-
308,995
-
308,995
308,995
(3,876,248) (3,567,253)
7,999,972
(309,411)
40,161
-
-
7,730,722
-
-
-
371,121
(15,326)
355,795
-
-
7,999,972
(309,411)
-
-
15,326
15,326
40,161
371,121
-
8,101,843
Balance as at 30 June 2017
38,440,518
758,286
(26,073,132) 13,125,672
The above statement should be ready in conjunction with the accompanying notes.
32
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash Flow from Operating Activities
Receipts from customers
Payments to suppliers and employees
Grants received
Interest received
Finance costs
Income tax refunded
Net Cash used in Operating Activities
Cash Flow from Investing Activities
Payment for plant and equipment
Payment for intangibles
Net Cash used in Investing Activities
Cash Flow from Financing Activities
Proceeds from share issue
Cost of raising capital
Proceeds from employee share ownership plan
Repayments of borrowings
Net Cash provided by Financing Activities
Reconciliation of Cash
Cash at beginning of the financial year
Net increase in cash held
Cash at End of the Year
Notes
2017
$
2016
$
3,475,183
2,567,599
(7,947,085)
258,370
148,588
-
678,220
(3,386,724)
(9,376,574)
86,455
129,164
(3,094)
648,548
(5,947,901)
18 (b)
(133,492)
(1,630,089)
(1,763,581)
(14,545)
(568,327)
(582,327)
7,999,972
(309,411)
40,161
-
7,730,722
7,179,800
(381,538)
56,435
(38,252)
6,816,445
6,029,185
2,580,417
8,609,602
5,743,513
285,672
6,029,185
18 (a)
The above statement should be ready in conjunction with the accompanying notes.
33
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Notes to the Financial Statements
TABLE OF CONTENTS
NOTE 1:
NOTE 2:
NOTE 3:
NOTE 4:
NOTE 5:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
FINANCIAL RISK MANAGEMENT
REVENUE AND OTHER INCOME
LOSS FROM CONTINUING OPERATIONS
NOTE 6:
INCOME TAX
NOTE 7: DIVIDENDS
NOTE 8:
CASH AND CASH EQUIVALENTS
NOTE 9:
RECEIVABLES
NOTE 10: INVENTORIES
NOTE 11: OTHER ASSETS
NOTE 12: INTANGIBLE ASSETS
NOTE 13: PLANT AND EQUIPMENT
NOTE 14: PAYABLES
NOTE 15: PROVISIONS
NOTE 16: SHARE CAPITAL
NOTE 17: RESERVES AND ACCUMULATED LOSSES
NOTE 18: CASH FLOW INFORMATION
NOTE 19:
COMMITMENTS AND CONTINGENCIES
NOTE 20: LOSS PER SHARE
NOTE 21: SHARE BASED PAYMENTS
NOTE 22: DIRECTORS' AND EXECUTIVE COMPENSATION
NOTE 23: SUBSIDIARIES AND RELATED PARTY DISCLOSURES
NOTE 24: AUDITOR'S REMUNERATION
NOTE 25: PARENT ENTITY INFORMATION
NOTE 26: SEGMENT INFORMATION
NOTE 27: SUBSEQUENT EVENTS
35
43
43
46
46
46
47
47
47
48
48
48
48
50
50
50
51
52
52
53
53
55
56
56
57
57
59
34
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2017
NOTE 1:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies adopted by the Group in the preparation and
presentation of the financial report. The accounting policies have been consistently applied, unless otherwise
stated.
(a)
Basis of Preparation of the Financial Report
This financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Interpretations and other applicable authoritative pronouncements of the
Australian Accounting Standards Board.
The financial report covers dorsaVi Ltd and controlled entities as a Group. dorsaVi Ltd is a company limited
by shares, incorporated and domiciled in Australia at: Level 1, 120 Jolimont Road, East Melbourne East,
Victoria, 3002. dorsaVi Ltd is a for-profit entity for the purpose of preparing the financial statements.
The financial report was authorised for issue by the directors on the date of the director’s report.
Compliance with IFRS
The consolidated financial statements of dorsaVi Ltd also comply with the International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB).
Historical Cost Convention
The financial report has been prepared under the historical cost convention, as modified by revaluations to
fair value for certain classes of assets and liabilities as described in the accounting policies.
Significant Accounting Estimates and Judgements
The preparation of the financial report requires the use of certain estimates and judgements in applying the
entity’s accounting policies. Those estimates and judgements significant to the financial report are disclosed
in Note 2.
(b)
Going Concern
The financial report has been prepared on a going concern basis.
(c)
Principles of Consolidation
The consolidated financial statements are those of the Group, comprising the financial statements of the
parent entity and of all entities, which the parent entity controls. The Group controls an entity when it is
exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity,
using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting
policies, which may exist.
All inter-company balances and transactions, including any unrealised profits or losses have been eliminated
on consolidation. Subsidiaries are consolidated from the date on which control is established and are de-
recognised from the date that control ceases.
(d)
Revenue
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be
measured reliably. Risks and rewards of ownership are considered to have passed to the buyer at the time
of delivery of the goods to the customer.
Revenue from the provision of services to a customer is recognised upon performance of the service.
Accrued income arising from recognised revenue is transferred to trade receivables when project milestones
35
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
are achieved and tax invoices are raised. Certain customers may be invoiced in advance of the provision of
services and this unearned income is recognised as a liability until the service is performed.
Revenue from fixed price contracts is recognised by reference to the stage of completion. The stage of
completion is determined using inputs from dorsaVi’s project management methodology, including effort
expended and effort to complete.
Revenue from grants is recognised in accordance with the recognition and measurement requirements of
AASB 120 “Accounting for Government Grants and Disclosure of Government Assistance”. Revenue from
grants does not include refundable research and development tax offsets. These are accounted for within
Income Tax Expense.
Interest revenue is recognised when it becomes receivable on a proportional basis taking into account the
interest rates applicable to the financial assets.
Device rental income is recognised on a straight-line basis over the term of the rental term.
All revenue is stated net of the amount of goods and services tax (GST).
(e)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity
of three months or less held at call with financial institutions, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities on the statement of financial position.
(f)
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products
includes direct material, direct labour and a proportion of manufacturing overheads based on normal
operating capacity.
(g)
Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation
and any accumulated impairment loss.
Plant and Equipment
Plant and equipment is measured on a cost basis.
Depreciation
The depreciable amount of all fixed assets is depreciated over their estimated useful lives commencing from
the time the asset is held ready for use.
Class of Fixed Asset
Testing equipment at cost
Leased devices at cost
Office equipment at cost
Furniture, fixtures and fittings at cost
Tooling at cost
Depreciation Rates
10-67%
20%
10-67%
10-20%
10%
Depreciation Basis
Diminishing value
Straight line
Diminishing value
Diminishing value
Straight line
(h)
Leases
Leases are classified at their inception as either operating or finance leases based on the economic
substance of the agreement so as to reflect the risks and benefits incidental to ownership.
Operating Leases
Lease payments for operating leases are recognised as an expense on a straight-line basis over the term of
the lease.
36
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(i)
Intangibles
Goodwill
Goodwill represents the future economic benefits arising from other assets acquired in a business
combination that are not individually identifiable or separately recognised.
Goodwill is not amortised but is tested annually for impairment, or more frequently if events or changes
in circumstances indicate that it might be impaired. Goodwill is carried at cost less any accumulated
impairment losses.
Patents
Patents, trademarks and licenses are recognised at cost and depreciated on a straight-line basis over their
effective lives, which is estimated to be 20 years.
Research
Expenditure on research activities is recognised as an expense when incurred.
Development
Development costs are capitalised when the entity can demonstrate all of the following: the technical
feasibility of completing the asset so that it will be available for use or sale; the intention to complete the
asset and use or sell it; the ability to use or sell the asset; how the asset will generate probable future
economic benefits; the availability of adequate technical, financial and other resources to complete the
development and to use or sell the asset; and the ability to measure reliably the expenditure attributable to
the asset during its development. Capitalised development expenditure is carried at cost less any
accumulated amortisation and any accumulated impairment losses. Amortisation is calculated using a
straight-line method to allocate the cost of the intangible asset over its estimated useful life, which range
from 5 to 10 years. Amortisation commences when the intangible asset is available for use.
Other development expenditure is recognised as an expense when incurred.
(j)
Impairment of Non-Financial Assets
Goodwill, intangible assets not yet ready for use and intangible assets with indefinite useful lives are not
subject to amortisation and are therefore tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired.
For impairment assessment purposes, assets are generally grouped at the lowest levels for which there are
largely independent cash flows - Cash Generating Units (CGU). Accordingly, most assets are tested for
impairment at the cash-generating unit level. Because it does not generate cash flows independently of
other assets or groups of assets, goodwill is allocated to the CGU or units that are expected to benefit from
the synergies arising from the business combination that gave rise to the goodwill.
Assets other than goodwill, intangible assets not yet ready for use and intangible assets with indefinite
useful lives are assessed for impairment whenever events or circumstances arise that indicate the asset may
be impaired.
An impairment loss is recognised when the carrying amount of an asset or CGU exceeds the asset’s or CGU’s
recoverable amount. The recoverable amount of an asset or CGU is defined as the higher of its fair value
less costs to sell and value in use. Refer to Note 2 for a description of how management determines value in
use.
Impairment losses in respect of individual assets are recognised immediately in profit or loss unless the
asset is carried at a revalued amount such as property, plant and equipment, in which case the impairment
loss is treated as a revaluation decrease in accordance with the applicable Standard. Impairment losses in
respect of CGU’s are allocated first against the carrying amount of any goodwill attributed to the CGU with
any remaining impairment loss allocated on a pro rata basis to the other assets comprising the relevant
CGU.
37
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(k)
Income Tax
Current income tax expense or revenue is the tax payable on the current period's taxable income based on
the applicable income tax rate adjusted by changes in deferred tax assets and liabilities. Current Income Tax
expense or revenue incudes refundable research and development tax offsets.
Deferred Tax Balances
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when
the assets are expected to be recovered or liabilities are settled. Deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises
from initial recognition of an asset or liability in a transaction, other than a business combination, that at the
time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity.
Tax Consolidation
dorsaVi Ltd (parent entity) and its wholly owned subsidiary, (Australian Workplace Compliance Pty Ltd),
have applied tax consolidation legislation and formed a tax-consolidated group from 1 July 2014. The parent
entity and subsidiary in the tax-consolidated group have entered into a tax funding agreement such that
each entity in the tax-consolidated group recognises the assets, liabilities, expenses and revenues in relation
to its own transactions, events and balances only. This means that:
! The parent entity recognises all current and deferred tax amounts relating to its own transactions,
events and balances only;
! The subsidiary recognises current or deferred tax amounts arising in respect of their own transactions,
events and balances;
! Current tax liabilities and deferred tax assets arising in respect of tax losses, are transferred from the
subsidiary to the head entity as inter-company payables or receivables.
The tax-consolidated group also has a tax sharing agreement in place to limit the liability of the subsidiary in
the tax-consolidated group arising under the joint and several liability requirements of the tax consolidation
system, in the event of default by the parent entity to meet its payment obligations.
(l)
Provision
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
(m)
Employee Benefits
(i)
Short-Term Employee Benefit Obligations
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected
to be settled within twelve months of the reporting date are measured at the amounts based on
remuneration rates which are expected to be paid when the liability is settled. The expected cost of short-
term employee benefits in the form of compensated absences such as annual leave is recognised in the
provision for employee benefits. All other short-term employee benefit obligations are presented as
payables.
(ii)
Long-Term Employee Benefit Obligations
The provision for employee benefits in respect of long service leave and annual leave which, are not
expected to be settled within twelve months of the reporting date, are measured at the present value of the
estimated future cash outflow to be made in respect of services provided by employees up to the reporting
date.
Employee benefit obligations are presented as current liabilities in the balance sheet if the entity does not
have an unconditional right to defer settlement for at least twelve months after the reporting date,
regardless of when the actual settlement is expected to occur.
38
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(iii)
Retirement Benefit Obligations
Defined Contribution Superannuation Plan
The Group makes contributions to defined contribution superannuation plans in respect of employee services
rendered during the year. These superannuation contributions are recognised as an expense in the same
period when the employee services are received.
(iv)
Share-Based Payments
The Group operates share-based payment employee share and option schemes. The fair value of the equity
to which employees become entitled is measured at grant date and recognised as an expense over the
vesting period, with a corresponding increase to an equity account. The fair value of shares is measured at
the market bid price at grant date. In respect of share-based payments that are dependent on the
satisfaction of performance conditions, the number of shares and options expected to vest is reviewed and
adjusted at each reporting date. The amount recognised for services received as consideration for these
equity instruments granted is adjusted to reflect the best estimate of the number of equity instruments that
eventually vest.
(v)
Bonus Plan
The Group recognises a provision when a bonus is payable in accordance with the employee’s contract of
employment, and the amount can be reliably measured.
(n)
Borrowing Costs
Borrowing costs can include interest expense calculated using the effective interest method, finance charges
in respect of finance leases, and exchange differences arising from foreign currency borrowings to the extent
that they are regarded as an adjustment to interest costs. Borrowing costs are expensed as incurred.
(o)
Financial Instruments
Classification
The Group classifies its financial instruments in the following categories: financial assets at fair value
through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial
assets. The classification depends on the purpose for which the instruments were acquired. Management
determines the classification of its financial instruments at initial recognition.
Loans and Receivables
Loans and receivables are measured at fair value at inception and subsequently at amortised cost using the
effective interest rate method.
Financial Liabilities
Financial liabilities include trade payables, other creditors, loans from third parties and loans or other
amounts due to director-related entities.
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
Impairment of Financial Assets
Financial assets are tested for impairment at each financial year end to establish whether there is any
objective evidence for impairment.
For loans and receivables, impairment loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows (excluding future credit losses that have not
been incurred) discounted at the financial asset’s original effective interest rate. The amount of the loss
reduces the carrying amount of the asset and is recognised in profit or loss. The impairment loss is reversed
39
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
through profit or loss if the amount of the impairment loss decreases in a subsequent period and the
decrease can be related objectively to an event occurring after the impairment was recognised.
(p)
Foreign Currency Translations and Balances
Functional and Presentation Currency
The financial statements of each entity within the Group are measured using the currency of the primary
economic environment in which that entity operates (the functional currency). The consolidated financial
statements are presented in Australian dollars which is the Group’s functional and presentation currency.
Transactions and Balances
Transactions in foreign currencies of entities within the consolidated group are translated into functional
currency at the rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items
arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the
contract) are translated using the spot rate at the end of the financial year.
Except for certain foreign currency hedges, all resulting exchange differences arising on settlement or
re-statement are recognised as revenues and expenses for the financial year.
Foreign Subsidiaries
Entities that have a functional currency different to the presentation currency are translated as follows:
! Assets and liabilities are translated at the closing rate on reporting date;
!
Income and expenses are translated at actual exchange rates or average exchange rates for the period,
where appropriate; and
! All resulting exchange differences are recognised in other comprehensive income.
(q)
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 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 gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
(r)
Comparatives
Where necessary, comparative information has been reclassified and repositioned for consistency.
(s)
Rounding of Amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the
amounts in the directors’ report and in the financial statements have been rounded to the nearest dollar.
(t)
Accounting Standards Issued but not yet Effective at 30 June 2017
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting periods, some of which are relevant to the Group. The
Group has decided not to early adopt any of these new and amended pronouncements. The Group’s
assessment of the new and amended pronouncements that are relevant to the Group but applicable in future
reporting periods is set out below.
— AASB 9: Financial Instruments (December 2014), AASB 2014-7: Amendments to Australian Accounting
Standards arising from AASB 9 (December 2014), AASB 2014-8: Amendments to Australian Accounting
Standards arising from AASB 9 (December 2014) – Application of AASB 9 (December 2009) and AASB 9
(December 2010) (applicable for annual reporting periods commencing on or after 1 January 2018).
These Standards will replace AASB 139: Financial Instruments: Recognition and Measurement. Key
changes that may affect the Group on application of AASB 9 and associated amending Standards
40
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
include:
— Simplifying the general classifications of financial assets into those carried at amortised cost and
those carried at fair value;
— Permitting entities to irrevocably elect on initial recognition to present gains and losses on an
equity instrument that is not held for trading in other comprehensive income (OCI);
— Simplifying the requirements for embedded derivatives, including removing the requirements to
separate and fair value embedded derivatives for financial assets carried at amortised cost;
— Introducing a new model for hedge accounting that permits greater flexibility in the ability to
hedge risk, particularly with respect to non-financial items; and
— Requiring impairment of financial assets carried at amortised cost to be based on an expected loss
approach.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s
financial instruments, it is impracticable at this stage to provide a reasonable estimate of such impact.
— AASB 15: Revenue from Contracts with Customers, AASB 2014-5: Amendments to Australian
Accounting Standards arising from AASB 15, AASB 2015-8: Amendments to Australian Accounting
Standards – Effective Date of AASB 15 and AASB 2016-3: Amendments to Australian Accounting
Standards – Clarifications to AASB 15 and AASB 2016-7 (applicable for annual reporting periods
commencing on or after 1 January 2018).
AASB 15 will provide (except in relation to some specific exceptions, such as lease contracts and
insurance contracts) a single source of accounting requirements for all contracts with customers,
thereby replacing all current accounting pronouncements on revenue.
These Standards provide a revised principle for recognising and measuring revenue. Under AASB 15,
revenue is recognised in a manner that depicts the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the provider of the goods or services expects to
be entitled. To give effect to this principle, AASB 15 requires the adoption of the following 5-step
model:
Identify the contract(s) with a customer;
Identify the performance obligations under the contract(s);
!
!
! Determine the transaction price;
! Allocate the transaction price to the performance obligations under the contract(s); and
! Recognise revenue when (or as) the entity satisfies the performance obligations.
AASB 15 also provides additional guidance to assist entities in applying the revised principle to licences
of intellectual property, warranties, rights of return, principal/agent considerations and options for
additional goods and services.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group’s
reported revenue, it is impracticable at this stage to provide a reasonable estimate of such impact.
— AASB 16: Leases (applicable for annual reporting periods commencing on or after 1 January 2019).
AASB 16 will replace AASB 117: Leases and introduces a single lessee accounting model that will
require a lessee to recognise right-of-use assets and lease liabilities for all leases with a term of more
than 12 months, unless the underlying asset is of low value. Right-of-use assets are initially measured
at their cost and lease liabilities are initially measured on a present value basis. Subsequent to initial
recognition:
— Right-of-use assets are accounted for on a similar basis to non-financial assets, whereby the right-
of-use asset is accounted for in accordance with a cost model unless the underlying asset is
accounted for on a revaluation basis, in which case if the underlying asset is:
!
Investment property, the lessee applies the fair value model in AASB 140: Investment
Property to the right-of-use asset; or
! Property, plant or equipment, the lessee can elect to apply the revaluation model in AASB 116:
Property, Plant and Equipment to all of the right-of-use assets that relate to that class of
property, plant and equipment; and
— Lease liabilities are accounted for on a similar basis as other financial liabilities, whereby interest
expense is recognised in respect of the liability and the carrying amount of the liability is reduced
to reflect lease payments made.
AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly,
under AASB 16 a lessor would continue to classify its leases as operating leases or finance leases
subject to whether the lease transfers to the lessee substantially all of the risks and rewards incidental
to ownership of the underlying asset, and would account for each type of lease in a manner consistent
with the current approach under AASB 117.
41
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group’s
accounting for its operating leases, it is impracticable at this stage to provide a reasonable estimate of
such impact.
— AASB 2016-2: Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to
AASB 107 (applicable for annual reporting periods commencing on or after 1 January 2017).
This Amending Standard amends AASB 107: Statement of Cash Flows to require entities to provide
disclosures that enable users of financial statements to evaluate changes in liabilities arising from
financing activities, including both changes arising from cash flows and non-cash changes. To the
extent necessary to satisfy this objective, entities will be required to disclose the following changes in
liabilities arising from financing activities:
— Changes from financing cash flows;
— Changes arising from obtaining or losing control of subsidiaries or other businesses;
— The effect of changes in foreign exchange rates;
— Changes in fair values; and
Other changes.
This Standard is not expected to significantly impact the Group’s financial statements.
— AASB 2016-5: Amendments to Australian Accounting Standards – Classification and Measurement of
Share-based Payment Transactions (applicable for annual reporting periods commencing on or after 1
January 2018).
This Amending Standard amends AASB 2: Share-based Payment to address:
— The accounting for the effects of vesting and non-vesting conditions on the measurement of cash-
settled share-based payments;
— The classification of share-based payment transactions with a net settlement feature for
withholding tax obligations; and
— The accounting for a modification to the terms and conditions of a share-based payment that
changes the classification of the transaction from cash-settled to equity-settled.
This Standard is not expected to significantly impact the Group’s financial statements.
— AASB Interpretation 22: Foreign Currency Transactions and Advance Consideration (applicable for
annual reporting periods commencing on or after 1 January 2018).
Interpretation 22 clarifies that, in applying AASB 121: The Effects of Changes in Foreign Exchange
Rates, the date of the transaction for the purpose of determining the exchange rate to use on initial
recognition of the related asset, expense or income (or part of it) is the date on which an entity initially
recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of
advance consideration. Accordingly, if there are multiple payments or receipts in advance, the entity is
required to determine a date of the transaction for each payment or receipt of advance consideration.
This Interpretation is not expected to significantly impact the Group’s financial statements.
— AASB Interpretation 23: Uncertainty over Income Tax Treatments (applicable for annual reporting
periods commencing on or after 1 January 2019).
Interpretation 23 clarifies how to apply the recognition and measurement requirements in AASB 112
Income Taxes when there is uncertainty over income tax treatments. If the entity concludes that it is
probable that the taxation authority will accept the uncertain tax treatment, the entity determines
current tax and deferred tax consistently with the tax treatment used or planned to be used in its
income tax filings. Whereas, if the entity concludes that it is not probable that the taxation authority
will accept an uncertain tax treatment, the entity reflects the effect of uncertainty in the determination
of current tax and deferred tax, based on either ‘the most likely amount’ or ‘the probability-weighted
amount’ of tax (depending on which method the entity expects to better predict the resolution of the
uncertainty).
42
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 2:
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
Certain accounting estimates include assumptions concerning the future, which, by definition, will seldom
represent actual results. Estimates and assumptions based on future events have a significant inherent risk,
and where future events are not as anticipated there could be a material impact on the carrying amounts of
the assets and liabilities discussed below:
(a)
Impairment of Non-Financial Assets other than Goodwill
All assets are assessed for impairment at each reporting date by evaluating whether indicators of
impairment exist in relation to the continued use of the asset by the Group. Impairment triggers include
declining product or manufacturing performance, technology changes, adverse changes in the economic or
political environment or future product expectations. If an indicator of impairment exists, the recoverable
amount of the asset is determined.
The recoverable amount of a CGU is based on value in use calculations. Value in use calculations are based
on projected cash flows approved by management covering a maximum five-year period. Management’s
determination of cash flow projections are based on past performance and its expectations of the future.
(b)
Income Tax
Deferred tax assets and liabilities are based on the assumption that no adverse change will occur in the
income tax legislation and the anticipation that the Group will derive sufficient future assessable income to
enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
Deferred tax assets are recognised for deductible temporary differences as management considers that it is
probable that future taxable profits will be available to utilise those temporary differences.
(c)
Employee Benefits
The calculation of long term employment benefits requires estimation of the retention of staff, future wage
levels and timing of the settlement of employee entitlements. The estimates are based on historical trends.
(d)
Share Based Payments
Calculation of share based payments requires estimation of the timing of the exercise of the underlying
equity instrument. The estimates are based on historical trends.
NOTE 3:
FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks comprising:
Interest rate risk
! Currency risk
!
! Credit risk
!
Liquidity risk
The Board of directors has overall responsibility for identifying and managing operational and financial risks.
The Group holds the following financial instruments:
Financial Assets
Cash and cash equivalents
Trade receivables
Other receivables
Related party receivables
Financial Liabilities
Trade payables
Other payables
Related party payables
2017
$
8,609,602
1,490,542
893,466
26,607
2016
$
6,029,185
989,262
805,089
26,607
11,020,217
7,850,143
304,012
625,072
1,000
930,084
469,601
243,404
1,000
714,005
43
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(a)
Currency Risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
The Group is exposed to foreign currency risk through the operation of wholly owned subsidiaries in the
United Kingdom and the United States of America.
Whilst operations in these geographical regions are in their infancy, the Group has not established a hedging
policy to mitigate adverse currency risk.
Sensitivity
If foreign exchange rates were to increase/decrease by 10% from rates used to determine fair values of all
financials instruments as at the reporting date, assuming all other variables that might impact on fair value
remain constant, then the impact on loss for the year and equity is as follows:
+/- 100 basis points
Impact on loss after tax
Impact on equity
(b)
Interest Rate Risk
2017
$
121,637
121,637
2016
$
134,407
134,407
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as
a result of changes in market interest rates.
The Group’s exposure to interest rate risk in relation to future cash flows and the effective weighted average
interest rates on classes of financial assets and financial liabilities, is as follows:
2017
Financial Instruments
Financial Assets
Cash
Flexi Deposit
Floating Deposit
Term Deposit
Term Deposit
Trade receivables
Other receivables
Related party receivables
Financial Liabilities
Trade payables
Other payables
Related party payables
Interest
Bearing
$
2,534,495
3,500,000
2,500,000
26,602
48,505
-
-
-
8,609,602
-
-
-
-
Non-interest
Bearing
$
-
-
-
-
-
1,490,542
893,466
26,607
2,410,615
304,012
625,072
1,000
930,084
Total
Carrying
Amount
$
2,534,495
3,500,000
2,500,000
26,602
48,505
1,490,542
893,466
26,607
11,020,217
Weighted Average
Effective Interest
Rate
1.50% Floating
2.55% Fixed
2.47% Floating
2.65% Fixed
2.10% Fixed
0.00%
0.00%
0.00%
304,012
625,072
1,000
930,084
0.00%
0.00%
0.00%
44
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2016
Financial Instruments
Financial Assets
Cash
Flexi Deposit
Floating Deposit
Term Deposit
Term Deposit
Trade receivables
Other receivables
Related party receivables
Financial Liabilities
Trade payables
Other payables
Related party payables
Interest
Bearing
$
1,964,185
2,000,000
2,000,000
25,000
40,000
-
-
-
6,029,185
-
-
-
-
Non-interest
Bearing
$
-
-
-
-
-
989,262
805,089
26,607
1,820,958
469,601
243,404
1,000
714,005
Total
Carrying
Amount
$
1,964,185
2,000,000
2,000,000
25,000
40,000
989,262
805,089
26,607
7,850,143
469,601
243,404
1,000
714,005
Weighted Average
Effective Interest
Rate
1.75% Floating
2.55% Fixed
2.72% Floating
2.95% Fixed
2.65% Fixed
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
No other financial assets or financial liabilities are expected to be exposed to interest rate risk. There are no
variable interest borrowings in the Group. The Group is exposed to variable interest cash and cash deposits
held; however, fluctuations due to interest rates are considered immaterial.
(c)
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date
of recognised financial assets is the carrying amount of those assets, net of any provisions for impairment of
those assets, as disclosed in consolidated statement of financial position and notes to the consolidated
financial statements.
The Group does not have any material credit risk exposure to any single debtor or group of debtors under
financial instruments entered into by the Group.
The Group minimises concentrations of credit risk in relation to trade receivables by undertaking
transactions with a number of known and existing customers and reputable organisations.
(i)
Cash Deposits
Credit risk for cash deposits is managed by holding all cash deposits with major Australian banks.
(ii)
Trade Receivables
Credit risk for trade receivables is managed by setting credit limits and completing credit checks for new
customers. Outstanding receivables are regularly monitored for payment in accordance with credit terms.
The ageing analysis of trade and other receivables is provided in Note 9.
As the Group undertakes transactions with a large number of customers and regularly monitors payment in
accordance with credit terms, the financial assets that are neither past due nor impaired, are expected to be
received in accordance with the credit terms.
(iii) Other Receivables
Other receivables relate to research and development tax concessions receivable from the Australian
Taxation Office and do not pose a material credit risk.
45
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(d)
Liquidity Risk
The Group’s approach to managing liquidity risk is to ensure, as far as possible, that, at all times, it has
sufficient liquidity to meet its liabilities. The Group has cash reserves and expects to settle all financial
liabilities within six months of year end.
(e)
Fair Value
The fair value of financial assets and financial liabilities approximates their carrying amounts as disclosed in
the consolidated statement of financial position and notes to the consolidated financial statements.
NOTE 4:
REVENUE AND OTHER INCOME
Revenue from Continuing Operations
Device and consumables sales
Device rental income
Consulting income
Other Income
Grant income
Interest income
Foreign exchange gain
NOTE 5:
LOSS FROM CONTINUING OPERATIONS
Losses before income tax has been determined after:
Cost of sales
Finance costs
Depreciation
Amortisation of patents and intangibles
Employee benefits expense
- Share based payments
- Other employee benefits
Operating lease rental
Research and development expense
NOTE 6:
INCOME TAX
(a)
Current tax
Components of Tax Benefit
Prima Facie Tax Payable
(b)
The prima facie tax refundable on loss before income tax is
reconciled to the income tax benefit as follows:
Prima facie income tax refundable on loss before income tax at 30%
(2016: 30%)
Add tax effect of:
- Accounting research and development expenditure
- Other non-allowable items
- Share based payments expense
- Tax losses not recognised
- Unrealised foreign exchange loss
- Deferred tax assets not recognised
46
2017
$
981,378
573,558
1,911,091
3,466,027
258,370
148,588
24,897
431,855
3,897,882
1,068,139
-
91,916
82,761
371,121
3,931,522
4,302,643
283,078
1,845,839
2016
$
621,600
660,940
1,737,388
3,019,928
86,455
129,165
2,590
218,210
3,238,138
841,416
3,094
82,815
33,120
165,072
4,597,224
4,762,296
274,997
1,507,701
(841,199)
(678,465)
(1,415,234)
(1,774,671)
553,752
9,252
111,336
720,753
152,728
73,713
1,621,534
452,310
5,664
49,522
1,308,309
156,229
-
1,972,034
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Less tax effect of:
- Amortisation of capital raising costs
- Research and development tax offset
- Effect of foreign tax rates
- Deferred tax assets not recognised
Income tax benefit attributable to loss
Deferred Tax Assets not brought to Account
(c)
Temporary differences
Operating tax losses
NOTE 7:
DIVIDENDS
There were no dividends paid during the period.
NOTE 8:
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Deposits at call
NOTE 9:
RECEIVABLES
CURRENT
Trade receivables
Provision for doubtful debts
Accrued income
Research and development tax offset refundable
Amounts receivable from:
- Superspine Forrest Hill Unit Trust
2017
$
127,044
841,199
79,256
-
1,047,499
(841,199)
2016
$
108,549
678,465
82,245
6,569
875,828
(678,465)
183,283
5,534,457
5,717,740
109,570
4,813,704
4,923,274
2,534,495
6,075,107
8,609,602
1,964,185
4,065,000
6,029,185
1,571,003
(80,461)
1,490,542
52,022
841,444
893,466
1,007,893
(18,631)
989,262
126,624
678,465
805,089
26,607
2,410,615
26,607
1,820,958
Trade receivables ageing analysis at 30 June is:
Gross 2017
$
Impairment
2017
$
Gross 2016
$
Impairment
2016
$
Not past due
Past due 31-60 days
Past due 61-90 days
Past due more than 91 days
1,091,650
133,331
204,391
141,631
1,571,003
-
-
-
(80,461)
(80,461)
816,733
47,051
22,739
121,370
1,007,893
-
-
-
(18,631)
(18,631)
Trade receivables are non-interest bearing with 30-day terms. An impairment loss is recognised when there
is objective evidence that an individual trade receivable is impaired. Trade receivables not impaired are
expected to be received.
47
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2017
$
2016
$
317,157
-
317,157
231,461
15,320
246,781
NOTE 10:
INVENTORIES
CURRENT
At Cost
Finished goods
Work in progress
NOTE 11:
OTHER ASSETS
Prepayments
146,125
136,056
NOTE 12:
INTANGIBLE ASSETS
Patents at cost
Less accumulated amortisation
Intangibles at cost
Less accumulated amortisation
Goodwill at cost
(a)
Reconciliations
745,402
(105,462)
1,910,856
(55,707)
112,110
2,607,199
597,084
(71,383)
429,085
(7,025)
112,110
1,059,871
Reconciliation of the carrying amounts of intangible assets at the beginning and end of the current financial
year:
Goodwill
Patents
Intangibles
Opening balance
Additions
Amortisation expense
2017
$
112,110
2016
$
112,110
-
-
-
-
2017
$
525,701
148,318
2016
$
412,554
2017
$
422,060
139,242
1,481,771
(34,079)
(26,095)
(48,682)
Closing balance
112,110
112,110
639,940
525,701
1,855,149
2016
$
-
429,085
(7,025)
422,060
Development expenditure capitalised during the year relates to product that had progressed from the
research phase to where it has been determined that the product will be developed for progressive release
to the market (refer Note 1 (i)).
NOTE 13:
PLANT AND EQUIPMENT
Plant and Equipment
Testing equipment at cost
Accumulated depreciation
Leased devices at cost
Accumulated depreciation
Office equipment at cost
Accumulated depreciation
2017
$
126,485
(84,997)
41,488
257,144
(106,553)
150,591
231,166
(147,862)
83,304
2016
$
107,986
(68,944)
39,042
227,867
(59,195)
168,672
190,902
(126,453)
64,449
48
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Furniture, fixtures and fittings at cost
Accumulated depreciation
Tooling at cost
Accumulated depreciation
Total plant and equipment
(a)
Reconciliations
2017
$
63,691
(5,215)
58,476
67,530
(20,295)
47,235
381,094
2016
$
10,544
(3,624)
6,920
45,949
(14,790)
31,159
310,242
Reconciliation of the carrying amounts of plant and equipment at the beginning and end of the current
financial year:
39,042
18,500
(16,054)
41,488
168,672
29,276
(47,357)
150,591
64,449
40,264
(21,409)
83,304
6,920
53,147
(1,591)
58,476
31,159
21,581
(5,505)
47,235
310,242
133,492
29,276
(91,916)
381,094
50,610
3,311
(14,879)
39,042
152,184
53,812
(37,324)
168,672
82,198
7,735
(25,484)
64,449
7,745
-
(825)
6,920
31,963
3,499
(4,303)
31,159
324,700
14,545
53,812
(82,815)
310,242
Testing Equipment
Opening carrying amount
Additions
Depreciation expense
Closing Carrying Amount
Leased Devices
Opening carrying amount
Transfers from inventory
Depreciation expense
Closing Carrying Amount
Office Equipment
Opening carrying amount
Additions
Depreciation expense
Closing Carrying Amount
Furniture, Fixtures And Fittings
Opening carrying amount
Additions
Depreciation expense
Closing Carrying amount
Tooling
Opening carrying amount
Additions
Depreciation expense
Closing Carrying Amount
Total Plant And Equipment
Opening carrying amount
Additions
Transfers from inventory
Depreciation expense
Closing Carrying Amount
49
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 14:
PAYABLES
CURRENT
Unsecured Liabilities
Trade payables
Unearned income
Sundry creditors and accruals
Loan from related parties
NOTE 15:
PROVISIONS
CURRENT
Employee benefits
NON-CURRENT
Employee benefits
(a) Aggregate employee benefits liability
(b) Number of employees at year end
NOTE 16:
SHARE CAPITAL
The Group’s share capital is as follows:
2017
$
2016
$
304,012
229,571
395,501
1,000
930,084
469,601
24,502
218,902
1,000
714,005
385,696
279,114
30,340
18,892
416,036
41
298,006
28
Ordinary Shares
Parent Equity
2017
Parent Equity
2016
No of Shares
$
No of Shares
$
Beginning of the financial year
Issued during the financial year
- Employee share scheme (A)
- Other shares issued (B)
- Shares issued (C)
- Cost of raising capital
149,914,616
30,709,796
121,800,000
23,855,099
-
-
17,391,243
-
-
40,161
7,999,972
(309,411)
500,000
-
27,614,616
-
-
56,435
7,179,800
(381,538)
End of the financial year
167,305,859
38,440,518
149,914,616
30,709,796
! Shares issued under the Employee Share Ownership Plan:
!
In the prior year 500,000 ordinary shares were issued to employees of the Group at an average market
price of 26 cents. All these shares are subject to non-recourse loans. Refer to Note 21, Share Based
Payments.
(i)
Shares Issued under the Employee Share Ownership Plan:
During the year a number of employees, previously issued shares under the Employee Share Ownership Plan
(ESOP) repaid their non-recourse loans and took possession of their share entitlement.
(ii)
Shares Issued in a Capital Raising:
In December 2016 and January 2017, the Group:
!
!
!
Issued 10,869,565 fully paid ordinary shares to institutional and sophisticated investors at $0.46 per
share raising $5,000,000 before costs;
Issued 4,347,828 fully paid ordinary shares to major shareholder, Starfish Technology Fund II Trust A
and Starfish Technology Fund II Trust B, at $0.46 per share raising $2,000,001; and
Issued 2,173,850 fully paid ordinary shares under a share purchase plan to shareholders at $0.46 per
share raising $999,971.
50
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Rights of each Type of Share
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held. At shareholders’ meetings, each ordinary share is entitled to one vote when a
poll is called, otherwise each shareholder has one vote on a show of hands.
Capital Management
When managing capital, management's objective is to ensure the Group continues as a going-concern as
well as to maintain optimal returns to shareholders and benefits for other stakeholders. This is achieved
through the monitoring of historical and forecast performance and cash flows.
During 2017, management paid dividends of $nil (2016: $nil).
Employee Share Ownership Plan (ESOP)
The Group continued to offer employee participation in short-term and long-term incentive schemes as part
of the remuneration packages for the employees of the Group. Refer to Note 21, Share Based Payments, for
detailed disclosures.
NOTE 17:
RESERVES AND ACCUMULATED LOSSES
Share-based payment reserve
Foreign currency translation reserve
Notes
17(a)
17(b)
2017
$
584,162
174,124
758,286
2016
$
228,367
(134,871)
93,496
Accumulated losses
17(c)
(26,073,132)
(22,212,210)
(a)
Share-based Payment Reserve
(i)
Nature and Purpose of Reserve
This reserve is used to record the fair value of options and shares issued to employees as part of their
remuneration. The balance is transferred to share capital when options are granted and balance is
transferred to retained earning when options lapse.
Movements in Reserve
(ii)
Balance at beginning of year
Movement taken to comprehensive income during the year:
- Employee share ownership plan
- Equity instruments lapsed
Balance at end of year
Foreign Currency Translation Reserve
(b)
Balance at beginning of year
Movement taken to comprehensive income during the year
Balance at end of year
Accumulated Losses
(c)
Balance at beginning of year
Net loss attributable to members of dorsaVi Ltd
Reversal of share based payment reserve
Balance at end of year
228,367
405,267
371,121
(15,326)
584,162
(134,871)
308,995
174,124
165,072
(341,972)
228,367
(326,570)
191,699
(134,871)
(22,212,210)
(3,876,248)
15,326
(26,073,132)
(17,317,080)
(5,237,102)
341,972
(22,212,210)
51
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 18:
CASH FLOW INFORMATION
(a)
Reconciliation of Cash
2017
$
2016
$
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related
items in the statement of financial position as follows:
Cash at bank and on hand
Deposits at call
2,534,495
6,075,107
8,609,602
1,964,185
4,065,000
6,029,185
(b)
Reconciliation of Cash Flow used in Operations with Loss after Income Tax
Loss from ordinary activities after income tax
(3,876,248)
(5,237,102)
Adjustments and Non-cash Items
Amortisation
Depreciation
Share based payments
Movement in debtor provision
Foreign currency translation through reserve
Changes in Assets and Liabilities
(Increase) / decrease in receivables
(Increase) / decrease in other assets
Increase in inventories
Increase / (decrease) in payables
(Increase) / decrease in research and development tax offset
receivable
Increase in provisions
Cash flows used in operating activities
NOTE 19:
COMMITMENTS AND CONTINGENCIES
82,761
91,916
371,121
61,830
308,995
(563,110)
64,533
(99,655)
216,082
(162,979)
118,030
489,524
(3,386,724)
Operating Lease Commitments
(a)
Non-cancellable operating leases contracted for but not capitalised in the financial statements:
Payable
- Not later than one year
- Later than one year and not later than five years
138,521
1,575
140,096
33,120
82,815
165,072
(4,151)
191,699
(679,770)
43,319
(162,636)
(352,527)
(29,917)
2,176
(710,799)
(5,947,901)
99,802
-
99,802
Description of Leasing Arrangement:
- Operating lease of premises in Australia - Month by month Agreement
- Operating lease of storage in Australia - Expires 18 November 2018
- Operating lease of premises in Europe - Expires 20 June 2018
- Operating lease of premises in USA – Expires 30 April 2018
Capital Expenditure Commitments
(b)
Acquisition of intangible asset
Total capital expenditure commitments
170,000
170,000
-
-
Contingent Asset and Liabilities
(c)
There are no contingent assets or contingent liabilities at balance date.
52
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 20:
LOSS PER SHARE
Reconciliation of loss used in calculating loss per share:
Loss from continuing operations
Loss used in calculating basic earnings per share
Loss used in calculating diluted earnings per share
2017
$
2016
$
(3,876,248)
(3,876,248)
(3,876,248)
(5,237,102)
(5,237,102)
(5,237,102)
2017
2016
No of Shares
No of Shares
Weighted average number of ordinary shares used in calculating basic
earnings per share
Effect of dilutive securities:
Equity instruments
Adjusted weighted average number of ordinary shares used in
calculating diluted earnings per share
158,497,079
-
-
144,346,723
-
-
158,497,079
144,346,723
NOTE 21:
SHARE BASED PAYMENTS
(a)
Employee Shares
The Board established an Employee Share Ownership Plan (ESOP). This plan was established by the Group
to facilitate the acquisition of Shares, Options and Performance Rights by those employed, or otherwise
engaged by, or holding a position of office in, dorsaVi.
They key objective of the plan is to provide an incentive for employees to align their interests with those of
the shareholders. Other objectives of the ESOP include:
! To attract, motivate and retain quality employees and Directors of dorsaVi;
! To create a commitment and united purpose between the employees and Directors and dorsaVi; and
! To add wealth for all shareholders of dorsaVi through the motivation of dorsaVi’s employees and
Directors.
This plan allows for dorsaVi to offer employees non-recourse and interest-free loans to acquire fully paid
shares. On 20 September 2013, the Group’s shareholders approved the giving of such financial assistance.
Only a person who is an Eligible Person may be invited and authorised by the Board to participate in this
plan. An Eligible person means:
! An employee of dorsaVi or a subsidiary of dorsaVi; or
! A Director of dorsaVi or a subsidiary of dorsaVi who holds a salaried employment or office in dorsaVi or a
subsidiary of dorsaVi; or
! A contractor engaged by dorsaVi or a subsidiary of dorsaVi and whom the Group has determined is an
Eligible Person to participate in this plan.
There is no maximum limit on the number of Securities that may be acquired by Eligible Persons under the
ESOP. However, the Board intends to restrict further issues of Securities to no more than 5% of the Group’s
issued share capital. This limit will be maintained unless shareholder approval is subsequently sought to
increase this level.
No ESOP shares were issued to employees during the year ended 30 June 2017. Between 1 July 2015 and
30 June 2016, 500,000 Shares were granted under the ESOP at an average market price of 26 cents,
subject to a non-recourse loan. These shares carry a full entitlement to dividends and capital returns. There
is no ability for the Group to offset dividends paid against the non-recourse loan.
The ESOP Shares are subject to restriction agreements imposing loan repayment obligations, and, that the
holders of Shares are not able to trade them within 12 months of issuance. After 12 months, 1/3rd of the
issued shares can be traded. Contingent upon continued employment with the Group and meeting loan
repayment obligations, the remaining shares become available for trading at a monthly rate of 1/36th of the
shares issued over the subsequent 24 months.
53
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(b)
Employee Options
Under the Group’s Employee Share Ownership Plan 2013, dorsaVi agreed to grant options to 1,300,000
ordinary shares of the Group during the period 1 July 2016 to 30 June 2017. Of the options granted,
750,000 are subject to vesting conditions in accordance with each option agreement. During the year a total
of 1,977,778 options were cancelled.
(c)
Employee Performance Rights
During the period 1 July 2016 to 30 June 2017 and under the Group’s Employee Share Ownership Plan
2013, dorsaVi agreed to grant 3,749,000 performance rights that may vest into ordinary shares of the
Group. Performance rights are subject to performance vesting conditions in accordance with each
agreement. The performance rights do not vest into shares unless the performance conditions are met.
During the year ended 20 June 2017 no performance rights vested. The performance rights vest into shares
at $nil.
Details of shares, options and performance rights granted are as follows:
2017
Grant Date
Expiry
Date
Exercise
Price
3-Jul-14
2-Sep-14
21-Oct-14
5-Nov-14
25-Feb-15
17-Aug-15
30-Sep-15
30-Sep-15
30-Sep-15
11-Dec-15
24-Mar-16
8-Jun-16
29-Nov-16
29-Nov-16
29-Nov-16
29-Nov-16
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
TOTAL
3-Jul-19
1-Sep-19
14-Jul-16
5-Nov-19
25-Feb-20
17-Aug-20
30-Sep-20
30-Sep-21
30-Sep-22
11-Dec-16
24-Mar-21
8-Jun-21
1-Oct-17
1-Oct-18
1-Oct-19
29-Nov-19
15-May-22
1-Oct-22
1-Oct-23
1-Oct-24
1-Jul-24
1-Oct-22
1-Oct-23
1-Oct-24
1-Jul-24
1-Jul-17
1-Oct-17
1-Oct-18
1-Oct-19
1-Jul-19
1-Jan-18
1-Jan-19
1-Jan-20
$0.46
$0.40
$0.40
$0.40
$0.36
$0.26
$0.28
$0.28
$0.28
$0.38
$0.40
$0.34
$0.33
$0.33
$0.33
$0.33
$0.33
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
at
1/7/2016
250,000
100,000
900,000
20,000
80,000
500,000
250,000
250,000
250,000
277,778
200,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Granted
during
the Year
-
-
-
-
-
-
-
-
-
-
-
-
150,000
150,000
150,000
450,000
550,000
133,333
133,333
133,334
350,000
79,000
39,000
39,000
117,000
250,000
350,000
350,000
350,000
775,000
83,334
83,334
333,332
3,127,778 5,049,000
Balance at
30/6/2017
Expired
Exercised
during
during
the Year
the Year
250,000
-
-
100,000
-
-
-
900,000
-
20,000
-
-
80,000
-
-
500,000
-
-
-
250,000
-
-
250,000
-
-
250,000
-
-
277,778
-
200,000
-
-
-
50,000
-
150,000
-
-
150,000
-
-
150,000
-
-
450,000
-
-
550,000
-
-
133,333
-
-
133,333
-
-
133,334
-
-
350,000
-
-
79,000
-
-
39,000
-
-
39,000
-
-
117,000
-
-
250,000
-
-
350,000
-
-
350,000
-
-
350,000
-
-
775,000
-
-
83,334
-
-
83,334
-
-
-
333,332
-
- 1,977,778 6,199,000
Exercisable at
the end of the
Year
250,000
91,666
-
20,000
80,000
500,000
-
-
-
-
100,000
-
-
-
-
-
550,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,591,666
54
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2016
Grant date
Expiry
Date
Exercise
Price
Balance at
1/7/2015
Granted
during the
Year
Exercised
during the
Year
Expired
during the
Year
Balance at
30/6/2016
8-Apr-14
6-May-14
3-July-14
2-Sep-14
21-Oct-14
5-Nov-14
25-Feb-15
17-Aug-15
30-Sep-15
30-Sep-15
30-Sep-15
11-Dec-15
24-Mar-16
8-Jun-16
TOTAL
11-Dec-15
6-May-17
3-July-19
1-Sep-19
14-Jul-16
5-Nov-19
25-Feb-20
17-Aug-20
30-Sep-20
30-Sep-21
30-Sep-22
11-Dec-16
24-Mar-21
8-Jun-21
$0.51
$0.49
$0.46
$0.40
$0.40
$0.40
$0.36
$0.26
$0.28
$0.28
$0.28
$0.10
$0.40
$0.34
1,000,000
100,000
250,000
100,000
900,000
20,000
80,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
250,000
250,000
250,000
277,778
200,000
50,000
2,450,000 1,777,778
- 1,000,000
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 1,100,000
-
-
250,000
100,000
900,000
20,000
80,000
500,000
250,000
250,000
250,000
277,778
200,000
50,000
3,127,778
Exercisable
at the end
of the Year
-
-
250,000
58,333
318,750
20,000
80,000
500,000
250,000
-
-
277,778
100,000
2,083
1,856,944
Other additional information associated with these share performance rights and option grants include:
! The weighted average remaining contractual life for equity entitlements outstanding at the end of the
period was 6 years.
! The weighted average value of the equity entitlements at grant date was $0.34. This excluded any
consideration of the impact of the exercise (or vesting) conditions.
! The fair value was determined using the binomial tree method or the Black-Scholes option-pricing
models.
! The share price at grant date ranged from: $0.26 to $0.46
! Expected price volatility of the Group’s shares: 80%
! Dividends: $nil
! Risk free interest rate: 1.81% to 2.15%
(c)
Expenses Recognised from Share-Based Payment Transactions
The expense recognised in relation to the share-based payment transactions was recorded within employee
benefits expense in the statement of comprehensive income were as follows:
Equity instruments issued under employee share plan
Shares issued under employee share plan
Total expenses recognised from share-based payment transactions
NOTE 22:
DIRECTORS' AND EXECUTIVE COMPENSATION
Compensation by Category
Short-term employment benefits
Post-employment benefits
Share-based payments
2017
$
339,866
31,255
371,121
2016
$
80,062
85,010
165,072
1,771,315
119,838
290,885
2,182,038
1,802,300
118,210
116,311
2,036,821
55
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 23:
SUBSIDIARIES AND RELATED PARTY DISCLOSURES
The consolidated financial statements include the financial statements of dorsaVi Ltd and its controlled entities
listed below:
dorsaVi Europe Ltd
dorsaVi USA, Inc.
Australian Workplace Compliance Pty Ltd
Country of
incorporation
Ownership interest
held by DVL
2017
%
2016
%
100
100
100
100
100
100
UK
USA
AUS
! dorsaVi Europe Ltd was incorporated on 3 February 2014.
! dorsaVi USA, Inc. was incorporated on 19 May 2014.
! Australian Workplace Compliance Pty Ltd was purchased on 3 July 2014.
(a)
Transactions with Entities with Associates:
Superspine Forrest Hill Unit Trust is considered an associate of dorsaVi Ltd, as dorsaVi Ltd has a 25%
ownership in the entity. There is a loan receivable from Superspine Forrest Hill Unit Trust of $26,607 (2016:
$26,607) at year-end. There is also loan payable at balance date for $1,000 (2016: $1,000) included in
Payables at Note 14.
(b)
Transactions with Directors, Key Management Personnel and Other Related Parties:
During the year ended 30 June 2017, dorsaVi Ltd paid $54,120 (2016: $49,163) to Starfish Technology
Fund II, LP on behalf of Michael Panaccio for director’s fees.
Starfish Ventures Pty Ltd is a related party as it is connected with a director of dorsaVi Ltd. During the year
ended 30 June 2017, Starfish Ventures Pty Ltd charged rent to dorsaVi Ltd. Total value of these rental
charges was $121,970 (2016: $105,995). The rent was charged to dorsaVi on normal terms and conditions.
The balance outstanding at balance date was $14,916 (2016: $20,772) included in Trade Payables at
Note 14.
During the year ended 30 June 2017, dorsaVi Ltd paid $nil (2016: $20,011) to Simon Heaysman, paid $nil
(2016: $2,224) to Dane Heaysman (both inclusive of expense claim reimbursements) and paid $104,038
(2016: $97,754) to Safety Assess Pty Ltd, a related company of Dane Heaysman. These amounts are on
normal commercial terms and were paid to these parties in their capacity as ViSafe Assessors on various
ViSafe projects throughout the financial year. These individuals and company are related to dorsaVi through
their relationship to their father, Mr Mark Heaysman.
NOTE 24:
AUDITOR'S REMUNERATION
Amounts Paid and Payable to Pitcher Partners Melbourne for:
Audit and Other Assurance Services
(i)
An audit or review of the financial report of the entity and any other
entity in the consolidated entity
Total remuneration for audit and other assurance services
Other Non-audit Services
(ii)
Taxation and other Compliance Services
Total remuneration for non-audit services
Total remuneration of Pitcher Partners Melbourne
2017
$
2016
$
79,400
79,400
107,125
107,125
26,831
26,831
106,231
24,595
24,595
131,720
56
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 25:
PARENT ENTITY INFORMATION
Summarised Statement of Financial Position
(a)
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed capital
Share-based payment reserve
Accumulated losses
Total equity
Summarised Statement of Comprehensive Income
(b)
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
NOTE 26:
SEGMENT INFORMATION
(a)
Description of Segments
2017
$
2016
$
20,108,383
2,988,293
23,096,676
15,575,009
1,370,113
16,945,122
1,859,915
30,340
1,890,255
21,206,421
1,856,846
18,892
1,875,738
15,069,384
38,440,518
584,162
(17,818,259)
21,206,421
30,709,796
228,367
(15,868,779)
15,069,384
(1,964,808)
-
(1,964,808)
(3,124,993)
-
(3,124,993)
The Group’s chief operating decision maker has identified the following reportable segments:
! Segment 1: Australia
! Segment 2: Europe
! Segment 3: United States of America
Management differentiates operating segments based on geographical areas and regulatory environments.
The type of products and services from which each reportable segment derives its revenue is considered the
same.
The operating segments have been identified based on internal reports reviewed by the Group’s chief
operating decision makers in order to allocate resources to the segment and assess its performance.
(b)
Segment Information
The Group’s chief operating decision maker’s use segment revenue and segment result to assess the
financial performance of each operating segment.
Amounts for segment information are measured in the same way in the financial statements. They include
items directly attributable to the segment and those that can reasonably be allocated to the segment based
on the operations of the segment. There has been no inter-segment revenue or expenses during the year.
57
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Segment information is reconciled to financial statements and underlying profit disclosure notes as follows:
2017
Australia
$
Europe
$
USA
$
Total
$
Segment Revenue
Total Segment Revenue
Segment Revenue from External Source
Segment Result
Total Segment Result
Segment Result from External Source
2,037,596
2,037,596
675,438
675,438
1,184,848
1,184,848
3,897,882
3,897,882
(1,964,808)
(1,964,808)
(468,145)
(468,145)
(1,443,295)
(1,443,295)
(3,876,248)
(3,876,248)
Items Included within the Segment Result:
Grant income
Interest income
Depreciation and amortisation expense
Income tax benefit
258,370
148,564
(174,677)
802,940
-
24
-
38,259
-
-
-
-
23,338,117
1,031,158
1,044,604
258,370
148,588
(174,677)
841,199
25,413,879
(10,942,087)
14,471,792
Total Segment Assets
Elimination
Consolidated Segment Assets
Total Assets include:
Additions to Non-current Assets
Total Segment Liabilities
Elimination
Consolidated Segment Liabilities
2016
Segment Revenue
Total Segment Revenue
Segment Revenue from External Source
Segment Result
Total Segment Result
Segment Result from External Source
Items included within the segment result:
Grant Income
Interest Income
Interest Expense
Depreciation and Amortisation Expense
Income Tax Benefit
Total Segment Assets
Elimination
Consolidated Segment Assets
Total Assets include:
Additions to Non-current Assets
Total Segment Liabilities
Elimination
Consolidated Segment Liabilities
1,763,581
-
-
1,763,581
(1,969,528)
(3,407,529)
(6,911,150)
(12,288,207)
10,942,087
(1,346,120)
Australia
$
Europe
$
USA
$
Total
$
2,056,587
2,056,587
727,749
727,749
453,802
453,802
3,238,138
3,238,138
(3,124,993)
(3,124,993)
(567,605)
(567,605)
(1,544,504)
1,544,504
(5,237,102)
(5,237,102)
86,455
129,122
(3,094)
(115,935)
678,465
-
43
-
-
-
-
-
-
-
-
16,870,149
1,082,326
816,183
86,455
129,165
(3,094)
(115,935)
678,465
18,768,658
(9,165,565)
9,603,093
582,872
-
-
582,872
(1,773,465)
(3,257,191)
(5,146,920)
(10,177,576)
9,165,565
(1,012,011)
58
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(c)
Major Customers
In 2017 no customer contributed greater than 10% of the Group’s total revenue. In the prior year, one
major customer contributed external revenue of $333,993 which was greater than 10% of the Group’s total
revenue. Revenue from this customer was included in the Europe segment.
NOTE 27:
SUBSEQUENT EVENTS
With the exception of the following, no matters or circumstances have arisen since the end of the financial
year that have significantly affected or may significantly affect the operations of the Group, the results of
those operations, or the state of affairs of the Group in future financial years.
! On 14 July 2017, dorsaVi Ltd received 510(k) Clearance by the US Food and Drug Administration (FDA)
for the next generation ViMove2 sensor designed to measure, record and analyse movement and muscle
activity of the lower back.
! On 27 July 2017, the Remuneration Committee and the Board completed their assessments of the
performance of key management personnel for the year ended 30 June 2017. Of the 795,666
performance rights and performance options previously granted in respect of that year it was confirmed
that performance outcomes would result in 407,363 (51%) of these rights and options vesting. In
accordance with performance agreements these rights and options will vest on 1 October 2017 and 1
January 2018.
! On 14 August 2017, dorsaVi Ltd issued 250,000 fully paid ordinary shares, at $nil per share, to
employees, under the dorsaVi ESOP. The issue of these shares arose on the vesting of 250,000
performance rights previously granted as a result of those employees meeting the performance
conditions attached to the rights.
! On 28 August 2017, dorsaVi Ltd announced that Herb Elliott had advised the Board of his intention to
retire as Chairman and as a director of dorsaVi at the Company’s Annual General Meeting (AGM) to be
held on 23 November 2017. Mr Greg Tweedly, the current Chair of the Audit and Risk Committee, will
succeed Herb Elliott as Chairman at the AGM.
59
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Directors’ Declaration
The directors declare that the financial statements and notes set out on pages 30 to 59 in accordance with
the Corporations Act 2001:
a) Comply with Accounting Standards and the Corporations Regulations 2001, and other mandatory
professional reporting requirements;
b) As stated in Note 1(a) the consolidated financial statements also comply with International Financial
Reporting Standards; and
c) Give a true and fair view of the financial position of the Group as at 30 June 2017 and of its performance
for the year ended on that date.
In the directors’ opinion, there are reasonable grounds to believe that dorsaVi Ltd will be able to pay its
debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made by the chief executive
officer and chief financial officer to the directors in accordance with section 295A of the Corporations Act
2001 for the financial year ending 30 June 2017.
This declaration is made in accordance with a resolution of the directors.
Herb Elliott
Director and Chairman
Andrew Ronchi
Director and CEO
Melbourne
Date: 28 August 2017
Melbourne
Date: 28 August 2017
60
dorsaVi Ltd and controlled entities
ABN 15 129 742 409
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF dorsaVi Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of dorsaVi Ltd “the Company” and controlled entities “the Group”, which
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the dorsaVi Ltd and controlled entities is in accordance with
the Corporations Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants “the Code” that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report 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.
An independent Victorian Partnership ABN 27 975 255 196
Level 19, 15 William Street, Melbourne VIC 3000
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle
An independent member of Baker Tilly International
61
dorsaVi Ltd and controlled entities
ABN 15 129 742 409
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF dorsaVi Ltd
Key Audit Matter
Recognition of revenue‐ $3,897,882
Refer to Note 4 ‘Revenue and other income’
The Group’s three largest revenue streams are:
The sale of devices and consumables,
Rental of devices; and,
The provision of consulting services.
service
stream
revenue
Consulting
(FY17:
$1,911,091, FY16: $1,737,388) includes contracts
that account for revenue based on the percentage
of completion method, calculated on management’s
estimation of work completed to balance date and
against set project milestones.
The accurate recording of consulting service
revenue is highly dependent on management’s
internal project management system, in order to
track the completion of milestones and tasks.
Key elements of the internal project management
system includes:
Accurately estimating total effort to complete
project at initiation of the contract;
Management’s estimation of work completed
to date; and
Estimate of the cost to complete, including
identification of potential project over‐runs.
We focused on this area as a key audit matter due to
the number and type of estimation events over the
course of the contract life, in determining revenue
recognition for consulting services.
How our audit addressed the key audit matter
Our procedures included amongst others:
We evaluated managements’ process regarding the
recognition of revenue for consulting services,
which included a review of the project management
system utilised. This
included obtaining an
understanding of the milestone and task completion
tracking capability, and the internal project delivery
function.
We selected a sample of contracts, and performed
the following procedures:
o We obtained and reviewed the original
contract and associated terms;
o We assessed the revenue recognised under
the percentage of completion method,
to date, effort
including
remaining and an assessment of any
applicable changes to scope or delivery
issues;
the effort
o We agreed progress payments made by
for projects with billing
customers
milestones in order to assess the likelihood
of the recovery for the works completed;
and
o We evaluated contract performance in the
period since balance date to determine
whether there have been any material
adverse changes in the delivery of projects.
An independent Victorian Partnership ABN 27 975 255 196
Level 19, 15 William Street, Melbourne VIC 3000
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle
An independent member of Baker Tilly International
62
dorsaVi Ltd and controlled entities
ABN 15 129 742 409
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF dorsaVi Ltd
Key Audit Matter
Capitalisation of development costs ‐ $1,481,771
Refer to Note 12 ‘Intangible Assets’
The research and development of new and existing
technology is part of the Group’s operations. Each
project undertaken represents an investment made
by the business, for which future economic benefits
are expected to be derived.
The capitalisation of any development costs is highly
subject to management judgement and is also
subject to various recognition criteria as per AASB
138 Intangible assets.
Key management considerations to be made include
the following:
Stage of the development cycle ‐ research vs
development;
for
Ability to accurately record and allocate costs
including
incurred
employee costs; and
Technical and commercial viability of individual
projects undertaken.
individual projects,
We focused on this area as a key audit matter due to
the number and type of judgement and estimation
events required for each of the development
projects.
How our audit addressed the key audit matter
Our procedures included amongst others:
We selected from a sample of transactions which had
been included within the capitalised development costs
and subsequently performed the following:
We
and
reconciliations for the amounts capitalised;
reviewed management
obtained
We
tested
the mathematical accuracy of
reconciliations prepared for costs that had been
capitalised;
Reviewing the employee costs allocated to the
different development projects, and testing a
sample of employee rates and captured hours for
the internal amounts capitalised and traced to
timesheets;
testing contractor costs
Reviewing the external contractor costs allocated to
the different development projects, and sampling
and
supporting
information to substantiate the expenditure;
We evaluated management’s process surrounding
the capitalisation of development costs. This
included reviewing development projects against
the recognition criteria as per AASB 138 Intangible
assets; and
to
As part of our assessment, we challenged
management of both
the development and
operations teams to assess the technical and
commercialisation
commercial
expectations of the development costs capitalised.
viability/
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2017, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
An independent Victorian Partnership ABN 27 975 255 196
Level 19, 15 William Street, Melbourne VIC 3000
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle
An independent member of Baker Tilly International
63
dorsaVi Ltd and controlled entities
ABN 15 129 742 409
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF dorsaVi Ltd
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
An independent Victorian Partnership ABN 27 975 255 196
Level 19, 15 William Street, Melbourne VIC 3000
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle
An independent member of Baker Tilly International
64
dorsaVi Ltd and controlled entities
ABN 15 129 742 409
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF dorsaVi Ltd
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 28 of the directors’ report for the year ended
30 June 2017. In our opinion, the Remuneration Report of dorsaVi Ltd, for the year ended 30 June 2017, 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.
F V RUSSO
Partner
28 August 2017
PITCHER PARTNERS
Melbourne
An independent Victorian Partnership ABN 27 975 255 196
Level 19, 15 William Street, Melbourne VIC 3000
Liability limited by a scheme approved under Professional Standards Legislation
Pitcher Partners is an association of independent firms
Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle
An independent member of Baker Tilly International
65
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
SHAREHOLDER INFORMATION
Corporate Governance
The Group’s Corporate Governance Statement can be obtained at http://dorsavi.com/investor-relations/
Overview
The Group’s securities are listed for quotation in the form of Ordinary Shares on the Australian Securities
Exchange (ASX) and trade under the symbol “DVL”. The shareholder information below was applicable as at
14 August 2017.
The Group’s share capital was as follows:
Type of Security
Ordinary Shares (Shares)
Options
Performance Rights
Substantial Holders
Names of Holders
Number of
Securities
167,555,859
1,600,000
3,499,000
Number of
Holders
817
4
9
Number of
Shares Held
% of Total
Shares
Starfish Technology Fund II, LP, Starfish Ventures, Michael Panaccio and
Christiana Panaccio and Micana Family Trust
72,767,755
43.43%
Unmarketable Parcels
Based on the closing market price on 14 August 2017, there were 79 shareholders holding less than a
marketable parcel (i.e. a parcel of securities of less than $500).
Options and Performance Rights (not listed on ASX)
There were 1,600,000 unquoted options on issue to purchase ordinary shares under the Group’s Incentive
Stock Option Agreement. The Options have been issued in accordance with the terms and conditions of the
dorsaVi Ltd 2013 Share Ownership Plan.
There were 3,499,000 unquoted Performance Rights granted, but not vested into ordinary shares, under the
Group’s Incentive Agreements. The Performance Rights have been granted in accordance with the terms and
conditions of the dorsaVi Ltd 2013 Share Ownership Plan.
Restricted Securities and Escrow Agreements
There are no securities which are restricted or subject to escrow agreements.
Voting Rights
At a general meeting, each Shareholder present (in person or by proxy, attorney or representative) has one
vote on a show of hands and one vote for each share held when voting is done via a poll.
Proxy forms will be included in each notice of meeting sent to Shareholders. Holders of issued but
unexercised options are not entitled to vote.
Distribution Schedule
Number of Shares
1 – 1,000
1,001 - 10,000
10,001 – 100,000
100,001 – 1,000,000
1,000,001 and above
Total
Number of
Holders
28
348
282
140
19
817
66
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Required Statements
a)
b)
There is no current on-market buy-back of the Group’s securities.
The Group’s securities are not quoted on any exchange other than the ASX.
dorsaVi’s Top 20 Shareholders
Set out below is a schedule of the 20 largest holders of each class of securities quoted.
Name of Registered Holder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
STARFISH TECHNOLOGY FUND II LP
AR BSM PTY LTD
UBS NOMINEES PTY LTD
STARFISH TECHNOLOGY FUND II NOMINEES A PTY LTD
STARFISH TECHNOLOGY FUND II NOMINEES B PTY LTD
CITICORP NOMINEES PTY LIMITED
MS GABRIELLE BANAY
BENTALE PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
DANIEL RONCHI
GARSIND PTY LTD
MOZLEY PTY LTD
ANDREW RONCHI
MORRMAC PTY LTD
LEVENSON INVESTMENTS PTY LTD
DR BSM PTY LTD
MR FRANCIS ROSS SELLENGER + MRS DIANA ELIZABETH
SELLENGER
MRS ROSALIND LAWRENCE
MR WILLIAM HARRIS + MRS JANE HARRIS
MR MARK STEPHEN HEAYSMAN
Total shares held by top 20 shareholders
Total shares held by all other shareholders
No. of Shares
Held
60,597,345
7,021,814
6,439,439
5,203,782
5,203,781
4,467,435
3,634,491
3,598,637
3,206,157
2,401,138
1,984,357
1,340,218
1,309,732
1,294,231
1,258,147
1,233,353
1,205,385
1,089,923
1,060,000
989,375
114,538,740
53,017,119
% of
Total
Shares
36.17
4.19
3.84
3.11
3.11
2.67
2.17
2.15
1.91
1.43
1.18
0.80
0.78
0.77
0.75
0.74
0.72
0.65
0.63
0.59
68.36
31.64
67
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Corporate Directory
Board of Directors and Company Secretary
Mr Herbert Elliott
Mr Ashraf Attia
Dr Michael Panaccio
Dr Andrew Ronchi
Chairman
Non-Executive Director
Non-Executive Director
Chief Executive Officer
and Executive Director
Non-Executive Director
Company Secretary
Mr Gregory Tweedly
Mr Brendan Case
Chief Executive Officer
Chief Financial Officer
Executive Team
Dr Andrew Ronchi
Mr Damian Connellan
Mr Mark Heaysman
Ms Meagan Blackburn
Ms Zoe Whyatt
Mr Matthew May
Ms Megan Connell
Mr Muhammad Umer
Registered Office in Australia
C/- Pitcher Partners, Level 19,
15 William Street, Melbourne, VIC 3000
Tel. +61 3 8610 5000
Principal Administrative Office
Level 1, 120 Jolimont Rd,
Melbourne East, VIC 3002
Tel. 1800 367 7284
Auditor
Pitcher Partners
Level 19, 15 William Street,
Melbourne, VIC 3000
Tel: +61 3 8610 5000
Investor Relations
Ms Rebecca Wilson
Buchan Consulting
T: +61 3 9866 4722
Share Registry
Computershare Investor Services Pty Limited
GPO BOX 242, Melbourne, VIC 3001
Tell: + 61 3 9415 5000
Annual General Meeting Date and Place
The Annual General Meeting will be held Thursday,
23 November 2017 at 10:00 am at:
Offices of Pitcher Partners, Level 19,
15 William Street, Melbourne, Victoria, 3000
68
GD4543 DS - Annual Report Cover A4 2pp – BACK COVER
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info@dorsavi.com | www.dorsavi.com
Australia
+61 3 9652 2198
Level 1, 120 Jolimont Road
East Melbourne, VIC, 3002
United Kingdom
+44 20 3457 0777
2 Angel Square,
London, EC1V 1NY
United States
800-961-0772
315 W 36th Street,
New York, NY 10018
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