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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
dorsaVi Ltd
(ABN: 15 129 742 409)
Annual Report
For the Year Ended 30 June 2019
CONTENTS
CHAIRMAN’S REVIEW
CEO REPORT
FINANCIAL REPORT
Directors’ Report
Auditor’s Independence Declaration
Financial Report for the Year Ended – 30 June 2019
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 pleased to present dorsaVi Ltd’s (dorsaVi) 2019 annual report to our shareholders.
With health costs growing at unsustainable rates and injuries in the workplace continuing to be a major issue, efficient,
technology-based solutions aiming to reduce health costs and minimise injuries in the workplace are attractive offerings.
dorsaVi’s data driven solutions have been shown to improve health outcomes in clinical trials and reduce injuries in
workplaces and dorsaVi is very well positioned to expand their product uptake through the major US, UK and Australian
markets.
FY19 was a year of significant change for dorsaVi with a focus on transition to recurring revenue, reducing costs through
operational changes and building a dedicated and US focused sales team. These changes have been worked through during
the FY19 year and we are seeing the results of these changes with a significant increase in recurring revenue, reduced
operating costs and twice the number of dedicated salespeople in the US market than this time last year.
The restructuring of the business 18 months ago has allowed our Chief Executive Officer (CEO), Andrew Ronchi, to be
based in the US market to focus on larger scale strategic sales opportunities and investor relations with existing and new
potential shareholders. The appointment of dorsaVi’s General Manager (GM) of Operations, Matthew May, is working well,
ensuring there is a focus on business operations and cost efficiency. Our new Chief Technical Officer, David Erikson, is
providing senior product guidance and oversight to ensure stable products in the market and a clear product roadmap based
on feedback from the major markets.
During the year significant operational changes were made to reduce expenditure including reduction in senior management
salaries. In support of these initiatives, the Non-Executive Directors have resolved, subject to shareholder approval, to
accept options in lieu of directors’ fees applicable from 1 March 2019. Subject to shareholder approval, the number of
options to be issued will be determined on the last day of each quarter by dividing the current Board remuneration owing to
each non-executive director by the closing share price on that day. The exercise price of the options to be issued will be at a
50% premium to the 10-day volume weighted average price (VWAP) up to the last trading day of each quarter. The first
calculation date was on 1 July 2019 and the options will have a five-year exercise period.
During the year, the Company signed a number of important deals, including the signing of the ASM Technologies deal
securing significant recurring revenue over the following three years. We have also seen other workplace groups expand
their myViSafeTM offering across their wider business providing further evidence that the recurring revenue myViSafeTM
product is well positioned to scale across many companies in the coming years. The relationship with the major insurer
American International Group (AIG) is progressing well, providing data insights that AIG have not had access to before.
In the clinical market there continues to be a strong appetite, especially in the US market, for dorsaVi’s data driven clinical
solution, Professional Suite. The App based mini sensors are showing steady growth with clinical groups able to generate a
strong return on investment and bring in new referrals to their clinics from the use of dorsaVi’s clinical products. The large
clinical franchise groups in the US market continue to be a major strategic opportunity for dorsaVi with a number of these
groups piloting the dorsaVi products in different ways.
We look forward to the new financial year knowing that we have growing recurring revenue coming from our two major
markets, clinical and workplace. We believe the current business structure and the more recent operational changes position
dorsaVi well to further build on our recurring revenue base, keep our operational costs lean and produce market leading
products for the clinical and workplace markets. We are optimistic that we will be able to execute on our strategies.
On behalf of my fellow Board members, I would like to thank CEO, Andrew Ronchi, and his team for their hard work and
dedication to dorsaVi. The Company’s leading technologies have the ability to assist patient’s recovery and drive
improvement in workplace practices with the goal of reducing injuries in the workplace.
To our shareholders, we are grateful for your continued support.
Greg Tweedly
Chairman
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CEO REPORT
Introduction
FY19 was a year where dorsaVi was focused on achieving the following:
•
•
•
growth in recurring revenue;
broadening the capacity and coverage of sales in the important US market; and
driving operational efficiencies through process and system changes, and execution of expense management initiatives
announced to the market in January 2018 and March 2019.
Growth in Recognised Recurring Revenue (RRR)
First, it’s important to acknowledge that total revenue for FY19 reduced by 27% when compared to FY18.
The company’s strategy to transition from a heavy historical reliance on consulting revenue to a more sustainable Software as
a Service (SaaS) recurring revenue (shown in the graphic below) provides some background to this result. However, several
changes to our sales team, including the re-allocation of resources and the longer than anticipated timeframe for recruitment
of sales staff into the US market, also impacted this result.
Positively, dorsaVi’s recurring revenue increased 50% YOY. For our clinical products, recurring revenue grew 27% on prior
comparative period (PCP) (from $771k FY18 to $978k FY19). From a workplace product perspective, recurring revenue has
grown 256% on PCP (increasing from $85k FY18 to $303k in FY19), following the introduction of our small sensor and App-
based myViSafeTM product into the US market 18 months ago.
Drivers for continued growth of recurring revenue include: aligning pricing models for core products with a strong focus on
subscription fees and longer term contracts; the expansion of our ‘direct’ US sales capacity across both the clinical and
workplace markets; the engagement of a US based marketing agency to customise marketing initiatives in this growth
market; and the continued focus on selling both Professional Suite (clinical) and myViSafeTM (workplace) products.
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The graphic below provides a trajectory for future growth in recurring revenue based on sustaining or increasing current
growth rates. The graphic is not a growth forecast.
Aligned with the YOY growth in recurring revenue, market adoption has also strengthened for our core products. The number
of devices in the clinical market increased by 42% (FY18 vs FY19) and the number of devices in the workplace market
increasing by 141% (FY18 vs FY19). Positively, retention has been >90% for both product lines.
Broadening sales capability and coverage in the important US market
The company continues to focus on capitalising on the growth opportunities in the US market. Importantly, this has led to a
reallocation of sales resources to prioritise this growth market. During FY19, the company doubled the number of sales FTE
in the US, strengthening its ‘direct’ sales capability whilst also broadening coverage to include the West Coast.
Whilst the time to recruitment took longer than anticipated, the recruitment of staff with local industry knowledge and
demonstrated sales performance, is expected to impact positively in FY20.
In addition to strengthening the company’s ‘direct’ sales capability, US agency and/or distributor relationships have been
reviewed and either terminated where performance has warranted it or rebased to provide a better return in the future.
Strategic partnerships, like the one announced to the market specific to AIG, have also been established to complement the
company’s ‘direct’ sales model.
Driving Operational Efficiencies
The company has undergone significant change to its operations and structure during FY19.
As CEO, my relocation to the US to target strategic sales opportunities and investor relations, led the business to appoint a
GM, Matthew May, who has direct responsibility for the day-to-day management of all areas of the business.
David Erikson was appointed as CTO to provide senior architectural and product leadership and ensure execution against a
clear product development pathway.
Further to these changes, the company completed a more detailed review of internal operations in March 2019, announcing
to the market several initiatives aimed at reducing operating costs, building recurring revenue and optimising cash reserves.
Openly, the initiatives to optimise cash reserves included a voluntary reduction in senior management salaries including my
own salary and benefits which reduced from USD$310k to USD$221k. This acknowledges the need for accountability,
heightens the focus and commitment to achieving our goals of building the US market through strategic deals and sales that
will drive an increase in our recurring revenue.
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Other operational initiatives included a reduction in corporate and marketing overheads in securing the tenure of a US based
marketing agency to provide more customised marketing initiatives to the large US clinical and workplace markets. From a
technical perspective, the plan is to optimise our spend on new technical development with a focus on enhancing dorsaVi’s
core products in the marketplace and tuning the product platform toward the needs of large multi-national company
applications, rather than pursue new applications.
The net effect of these changes is that staff numbers have been reduced in corporate and support services. These changes
are in-line with the company’s strategy to prioritise the US market and to increase the ‘direct’ sales capability in the US
workplace and clinical markets.
These strategic initiatives are having the desired impact on cash expenses as shown in the graphic below:
Financial Summary
The transition from consulting revenue to recurring revenue has led to a short-term reduction in total sales revenue as the
recurring revenue base builds. The sales revenue for FY19 was $2,514,992, a 27% reduction on our FY18 revenue of
$3,433,348.
Historically, when dorsaVi secured a workplace services contract valued at, for example, $120k, the contract would typically
be recognised across two quarters (say, $60k each quarter) without any further revenue unless additional work was won
with the customer. This resulted in revenue that was unpredictable or lumpy.
With the change, any contracts won within the same corporate group with our recurring revenue product, myViSafeTM, for
say a 3-year period, in the first two quarters of this contract dorsaVi will recognise $10k each quarter. The benefit is seen in
the longer term, being able to recognise revenue for the next 3 years from this one group, therefore providing more stable
and predictable revenue growth. The negative impact is that during the transition period there will be an immediate impact
on total sales revenue as the recurring revenue base builds.
As shown in the graphic above, total cash expenses reduced from $9.90m FY18 to $7.86m FY19, a reduction of $2.04m
(21%) mainly due to cost decreases during the year as a result of restructuring of business operations previously announced
to the market in March 2019. We believe these reductions in expenses are sustainable and we have provided some insight
to the estimated cash expenses for FY20 being $6.48m, which would be a further reduction of $1.38m (18%) on FY19 (or a
reduction of $3.42m (35%) from FY18 to the FY20 estimate). Cost control continues to be an ongoing focus for the business.
dorsaVi Clinical market
The US Clinical market (mainly Physical Therapy (PT) clinics) represents an extremely large opportunity for dorsaVi as we
now have proven product in the market and strong evidence of clinics creating a good return on investment from dorsaVi
products. To add to these elements, clinics are successfully utilising Current Procedural Terminology (CPT) codes for the
use of dorsaVi technology for patient assessments, being able to claim against these CPT codes for insurers to fund the
assessments. Furthermore, clinical groups are looking for ‘cash pay’ alternatives where patients actively pay out of their own
pocket, rather than utilise reimbursement or insurance. Due to the pressure on reimbursement at a Federal level, many
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
clinics wish to de-risk their business model by introducing more ‘cash pay’ assessment and treatment options for their
patients.
In the US PT market, there are approximately 123,000 PT clinics that could utilise the dorsaVi applications and potential
revenue generation from each clinic would be ~$3k per year per dorsaVi kit, noting that a number of clinics take up multiple
dorsaVi kits per clinic. This makes the total size of the direct addressable market $370m per year, if dorsaVi were to achieve
100% penetration. Noting that dorsaVi’s penetration at present is less than 1%, there is significant growth potential in this
largely untapped market. Reflecting on the last 12 months, the number of dorsaVi kits grew by 188 kits (or 42% YOY) with
the total number of clinical kits in the market at 634. With increased salespeople to drive sales and the new US based
marketing agency focused on the US market, we expect this rate to increase.
As an example, one of the large franchise groups in the USA, Select Medical, started using dorsaVi’s clinical technology and
committed to using the devices at 20 PT sites. Select Medical has approximately 2,000 PT clinics across the US and has
steadily increased their number of dorsaVi devices over the past 12 months from 50 clinics using the technology to 75
clinics.
As part of the clinical product offering, orthopaedic companies are interested in being able to monitor and track patient’s
movements both before and after surgery, aiming to more effectively guide surgeons with additional metrics during surgery
and monitor patients post-surgery, aiming to improve post-surgical outcomes. In this field of use, dorsaVi has entered into an
agreement with a leading orthopaedic company, aiming to test dorsaVi’s algorithms in a particular use case. The project is
confidential and dorsaVi continues to make progress towards this goal.
In relation to the size of the opportunity in the orthopaedic market, there are 1.5 million hip and knee replacements
performed each year in the US and if you were to justify the expense of a sensor kit for each patient undergoing a hip or
knee replacement, this would make the total of the direct addressable market $1.2b per annum.
dorsaVi’s strength in the clinical market relates to the FDA clearance, clinically validated algorithms and the traction of
current products in the US market that generate recurring revenue. We look forward to reporting progress in the clinical and
the orthopaedic markets.
dorsaVi Workplace Solutions (OHS)
The workplace market’s appetite for wearables data has accelerated significantly over the past 12 months. Insurers and
corporate groups are interested in data insights to better understand their movement risk profile and to allow informed
decisions on mitigating this risk. Corporate groups also have a strong interest for scalable wearable solutions that they can
distribute through their workforce, in order to reduce the cost of OHS implementation and also enable sourcing data from
workers in remote locations.
dorsaVi identified this opportunity 2-3 years ago and invested in building the myViSafeTM product that is App-based and built
for ease of use and scalability. The myViSafeTM devices can be distributed easily to remote locations, safety officers can be
trained in a 30-minute online tutorial and the data from these devices is delivered, via the cloud, to a centralised database
which EHS and OHS managers can view. The myViSafeTM product is distributed through a SaaS style business model
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where the corporate clients pay a monthly subscription fee for the use of the sensors, the App and the global dashboard.
The myViSafeTM product sales have shown a 141% increase to last financial year, increasing from 90 devices in the market
(FY18) to 222 devices in the market at 30 June 2019.
In the US workplace market, there are approximately 230,000 corporates with over 100 workers that could utilise the dorsaVi
applications. This makes the total size of the direct addressable market $920m per year, if dorsaVi were to achieve 100%
penetration. Noting that dorsaVi’s penetration at present is less than 1%, there is significant growth potential in this largely
untapped market.
In the workplace market the SaaS style business model generates ~$4k per year, per dorsaVi kit, and several of our
corporate customers are taking up the myViSafeTM devices over 10-20 sites with the largest group to date taking up the
myViSafeTM product across 64 sites. In this deal, ASM Technologies, as the procurement group for a large UK Rail group,
chose dorsaVi’s myViSafeTM product to distribute across the national UK Rail group.
Previously dorsaVi has generated consulting revenue from the workplace market where our assessors would spend days on
site at a corporate client capturing data from multiple workers. The consulting projects will still be part of the dorsaVi offering
and we anticipate the consulting revenue will continue to generate between $1-2m per annum to add to the recurring
revenue. It is also worth noting, that of the consulting project clients, 43% of these clients have transitioned to the
myViSafeTM product offering within the first 12 months. The consulting projects have a higher cost of goods whereas the
myViSafeTM product and process has significantly lower cost of goods creating a higher margin from myViSafeTM.
As companies across the world are increasingly under pressure to establish preventative practices when it comes to
workplace injuries, there is a growing demand for sophisticated and objective technologies that can help improve workplace
safety and reduce injuries. dorsaVi is very well-positioned to take advantage of this large workplace market that has an
appetite for change and a desire to improve the way their workers move.
Andrew Ronchi
Chief Executive Officer
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FINANCIAL REPORT
For the Year Ended 30 June 2019
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dorsaVi Ltd and controlled entities
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Financial Report
For the Year Ended 30 June 2019
TABLE OF CONTENTS
Financial Report
Directors’ Report
Auditor’s Independence Declaration
Financial Report for the Year Ended 30 June 2019
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
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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 2019 and auditor’s report thereon.
Directors
The names of directors in office at any time during or since the end of the year are:
Name
Greg Tweedly
Ashraf Attia
Caroline Elliott
Michael Panaccio
Andrew Ronchi
Designation
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer, Executive Director
Appointed
29 October 2013
14 July 2008
24 November 2017
16 May 2008
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 the development and sale 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 from continuing operations, after income tax, attributable to the members of dorsaVi Ltd was
$4,020,751 (2018: $3,727,073).
Review of Operations
The Group consists of four entities:
1. dorsaVi Ltd;
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.
Net assets of the Group, as at 30 June 2019, were $6,989,294 (2018: $9,417,165).
Total revenue for the 2019 financial year was $3,223,869 (2018: $4,394,271). Sales revenue was $2,514,992 (2018:
$3,433,348).
Clinical
Clinical income was $1,336,817 for the 2019 financial year (2018: $1,478,898).
Workplace
Workplace income, utilising ViSafe technology, was $956,624 for the 2019 financial (2018: $1,954,450). This decline is
reflective of the Group’s strategy to transition from consulting income to a recurring revenue model.
The directors expect Group revenue to grow into the future. Factors impacting and driving this growth include: the
effectiveness of the global marketing plan; additional sales generation in the clinical and workplace markets in Australia,
Europe and US markets; shortening of the sales lead times; and the rate of uptake of new generation product.
Total expenditure decreased by $1,223,746 (14% year on year) mainly due to cost reductions implemented during the year.
Employee benefits expense reduced 12% to $3,979,898 (2018: $4,498,316), due to cost control measures undertaken
during the latter part of the financial year. Employee benefits expense represented 51% of the total expenses for the Group
for the 2019 financial year (2018: 50%).
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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 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 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 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.
Significant Changes in the State of Affairs
The following changes in the state of affairs occurred during the period:
•
•
•
•
•
•
•
•
•
On 3 July 2018, dorsaVi Ltd announced that it had signed an agreement with CitiPower and Powercor for the
provision of dorsaVi’s wearable sensor technology to profile movement risk and improve manual handling safety.
On 18 July 2018, dorsaVi announced that it had signed an evaluation agreement with Stryker Leibinger GmbH &
Co to evaluate ViMove2.
On 8 October 2018, dorsaVi Ltd issued 87,941 fully paid ordinary shares, at $Nil per share, to employees, under the
dorsaVi ESOP. The issue of these shares arose on the vesting of 87,941 performance rights previously granted as a
result of those employees meeting the performance conditions attached to the rights. At the same time, it was
announced that 1,196,550 performance rights and 692,501 options, previously granted, had lapsed.
On 15 November 2018, dorsaVi Ltd announced that it had been granted a “body orientation algorithm” patent in the
USA.
On 21 November 2018, dorsaVi Ltd announced a 1 for 3 non-renounceable pro rata rights offer, to eligible
shareholders, at $0.058 per share. The rights offer, which closed on 14 December 2018, resulted in the issue of
36,010,620 fully paid ordinary shares raising $2,088,616 before costs.
On 22 November 2018, dorsaVi Ltd announced that it had entered into an agreement with a US corporation, Work
Right NW, for them to use dorsaVi’s ViSafeTM, myViSafeTM and Professional Suite products to develop safety
assessments and manual handling analysis within the construction industry.
On 26 November 2018, dorsaVi Ltd announced that it had changed its address to 86 Denmark Street, Kew,
Victoria.
On 15 March 2019, dorsaVi Ltd announced operational changes which included voluntary senior management
salary reductions, reductions in corporate and marketing expenses and optimising of new development expenditure
to a focus on enhancing core products rather than pursuing new applications. In addition, the non-executive
directors, subject to shareholder approval at the AGM, agreed to waive directors’ fees in lieu of the receipt of
options, issued at a 50% premium to the 10-day VWAP up to the last trading day of each quarter commencing 1
July 2019.
On 8 April 2019, dorsaVi Ltd announced that it had signed a three-year agreement with ASM Technologies Ltd, on
behalf of a major UK transport infrastructure organisation, for 64 myViSafeTM kits at a contract value of GBP293,760.
After Balance Date Events
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.
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Likely Developments
The following likely developments, in the business of the Group, are expected to influence its future financial results:
▪ The Group expects to increase, year on year, the annuity revenue proportion of total clinical and workplace revenue.
▪ The Group expects that product, released globally in recent years, will continue to support revenue growth.
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
There were no performance rights and options over unissued ordinary shares granted to executives by dorsaVi Ltd during
the financial year.
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
24 March 2016
15 May 2017
15 May 2017
15 May 2017
200,000
550,000
55,000
24,166
829,166
$0.40
$0.33
$0.33
$0.33
24 March 2021
15 May 2022
1 October 2022
1 October 2023
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
29 November 2016
29 November 2016
5 June 2017
5 June 2017
150,000
450,000
317,000
164,000
1,081,000
-
-
-
-
Vesting Date of
Performance Rights
1 October 2019
29 November 2019
1 July 2019
1 October 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.
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Shares Issued on Vesting of Performance Rights
During the year ended 30 June 2019 and to the date of this report, 87,941 shares were issued on the vesting of 87,941
performance rights. During the year ended 30 June 2019 and to the date of this report, 1,242,725 performance rights were
cancelled. There remain 1,081,000 performance rights that do not convert to issued shares unless performance conditions
are met, and they vest.
Information on Directors and Company Secretary
Greg Tweedly, B. Com, CPA, GAICD – Non-executive Chairman
Greg Tweedly is Chairman of dorsaVi Ltd 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, Deputy Chair Environmental Authority, 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 2019.
Ashraf Attia, BSc (Eng)(Hons), MSc (Med. Eng), Dip (Mktg), FAICD – Non-executive Director
Ash Attia was appointed as a director of dorsaVi on 14 July 2008 and chairs the Nomination and Remuneration Committee
and serves on the Audit and Risk Committee.
Ash has had senior management experience in multinational operations for over 30 years within the medical devices,
biotechnology and diagnostics industries. He is currently Chief Executive Officer of Bionic Vision Technologies, a company
developing an implantable device to restore sight to the blind. Ash was most recently Vice President of Asia Pacific, Middle
East and Israel at TransMedics Inc, a company based in Boston, USA, and is carrying out revolutionary work in the area of
heart, lung and Liver organ transplants and preservation. He has held several senior executive roles with global medical
devices organizations and has special expertise in the areas of commercialization, business development, clinical,
regulatory, R&D, strategic marketing, sales and distribution management.
No other directorships of listed companies were held during the three years to 30 June 2019.
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 founding directors 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, 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
2019. Michael is also a director of Starfish Ventures Pty Ltd.
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Caroline Elliott, B. Ec, CA, GAICD – Non-executive Director
Caroline Elliott is chair of the Audit and Risk Committee and was appointed to the Board on 24 November 2017.
Caroline is currently a Director of the National Film and Sound Archive of Australia, St John’s Ambulance Australia (Vic) and
Wiltrust Nominees Pty Ltd. She has previously held non-executive director roles at Cell Therapies Pty Ltd, Peter MacCallum
Cancer Centre and the Public Transport Ombudsman Limited. She is currently the Chief Operating Officer at retail fashion
business, The Propel Group Pty Ltd, and was previously the CFO and Company Secretary at Optal Limited.
No other directorships of listed companies were held during the three years to 30 June 2019.
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 has
also been founding partner in two physiotherapy centres, the largest of these employing 28 staff (including 13
physiotherapists). Andrew completed 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 2019.
Brendan Case, MComLaw (Melb), BEc, CPA, Grad Dip App Fin, Dip FP, FCIS
Brendan Case has served as dorsaVi Ltd’s secretary since 29 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:
G Tweedly
A Attia
C Elliott
M Panaccio
A Ronchi
G Tweedly
A Attia
M Panaccio
Board of Directors
Audit and Risk Committee
Eligible to Attend
11
11
11
11
11
Attended
11
11
11
11
11
Eligible to Attend
-
3
3
3
-
Attended
-
3
3
3
-
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 2019
Names of Holders
M Panaccio
A Ronchi
A Attia
G Tweedly
Ordinary Shares of dorsaVi Ltd
90,280,662
8,886,323
281,518
115,129
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 600,000 performance rights which, subject to the satisfaction of
performance conditions, can vest into shares progressively over the 2020 financial year.
dorsaVi Annual Report 2019
15
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Indemnification and Insurance of Directors and Officers
The Group has insured its Directors, Secretary and executive officers for the financial year ended 30 June 2019. 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.
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 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
▪ 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
2019
$
18,727
18,727
2018
$
23,450
23,450
dorsaVi Annual Report 2019
16
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Remuneration Report (Audited)
The Directors present the Group’s 2019 Remuneration Report, which details the remuneration information for dorsaVi Ltd’s,
Directors and other Key Management Personnel (KMP).
A.
Details of the Key Management Personnel
Period of Responsibility
Position
Non-Executive Directors:
Greg Tweedly
Caroline Elliott
Ashraf Attia
Michael Panaccio
Executive Director:
Andrew Ronchi
Executives:
Matthew May
Damian Connellan
Megan Connell
Meagan Blackburn
David Erikson
Zoë Whyatt
Full Year
Full Year
Full Year
Full Year
Full Year
Chairman, Non-Executive Director
Independent, Non-Executive Director
Independent, Non-Executive Director
Non-Executive Director
Chief Executive Officer/Director
Full Year
Full Year
Resigned, 22 March 2019
Resigned, 21 December 2018
Full Year
Resigned, 10 August 2018
General Manager
Chief Financial Officer
Chief Marketing Officer
Chief Innovation Officer
Chief Technology Officer
Chief Operating Officer, Europe
B.
Remuneration Policies
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, Executive Director/Chief Executive Officer (CEO)
and each Executive reporting to the CEO. The current members of the Nomination and Remuneration Committee are:
Ashraf Attia, 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. 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 merit and individual skill matching the role requirements with their experience and
responsibilities;
dorsaVi Annual Report 2019
17
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
▪ Align the interests of executives with 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 Non-Executive Directors with the necessary skills and experience for the Group’s Board. This
remuneration is reviewed with regard to market practice and Non-Executive 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
previously 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 2019 is
detailed in Table 1 of this section of the report.
Non-executive directors received fees for the current year up until 1 March 2019. The non-executive directors agreed,
subject to shareholder approval at the next AGM, to forego the payment of directors fees from 1 March until further notice
and would, in lieu of the quarterly fees normally payable, receive options with an exercise price that is at a 50% premium to
the 10-day VWAP up to the last trading day of each quarter. The number of options granted would be calculated by dividing
the fees payable by the closing share price on the last trading day of each quarter.
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 Executives with 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). STI and LTI are currently only provided to KMP by way of share-based payments and include no cash
component.
Fixed Remuneration
Objective
Fixed remuneration is reviewed annually by the Board and 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.
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.
dorsaVi Annual Report 2019
18
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
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 in 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 have been granted, under the ESOP. Refer Table 5 for details of options and performance
rights granted to Executives under the ESOP.
Employment Agreements
The Group has entered into employment agreements with all Executives, including the CEO. The Group may terminate an
Executive’s employment agreement by providing 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
Matthew May
Damian Connellan
David Erikson
Notice Period
6 months
3 months
3 months
3 months
dorsaVi Annual Report 2019
19
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CEO Remuneration
At the commencement of the 2019 financial year, Andrew Ronchi’s fixed remuneration was US$360,000, including medical
benefits insurance, plus director’s fees of A$25,000 per annum. Subsequent to the start of the 2019 financial year Andrew
Ronchi agreed to reduce his fixed remuneration to US$221,499, including medical benefits insurance, plus director’s fees of
A$10,000 per annum. In addition, Andrew Ronchi has previously, as approved at a meeting of shareholders, been granted
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. During 2019; 11,250 performance rights vested into shares and 138,750 lapsed.
As at 30 June 2019; 600,000 performance rights remain outstanding. Upon termination of Andrew Ronchi’s employment
contract, he will be subject to a restraint of trade for a maximum of 12 months.
C.
(a)
2019
Details of Key Management Personnel Remuneration
Non-Executive Directors’ Remuneration: Table 1
Short-Term
Salary fees
$
Post-employment
Pension Plan
$
$
Non-Executive Directors
C Elliott
A Attia
M Panaccio (i)
G Tweedly
34,833
34,833
34,276
47,558
151,500
3,309
3,309
-
4,518
11,136
38,142
38,142
34,276
52,076
162,636
(i)
Michael Panaccio provides his services via Starfish Technology Fund II, LP.
TOTAL
Total performance related
Share based payments
as % of total
%
-
-
-
-
-
%
-
-
-
-
-
2018
Non-Executive Directors
H Elliott (ii)
C Elliott (iii)
A Attia
M Panaccio (i)
G Tweedly
Short-Term
Salary fees
$
30,975
32,083
54,781
54,120
66,888
238,847
Post-employment
Pension Plan
TOTAL
Total performance related
Share based payments
as % of total
$
$
2,943
3,048
5,204
-
6,354
17,549
33,918
35,131
59,985
54,120
73,242
256,396
%
-
-
-
-
-
-
%
-
-
-
-
-
-
(i) Michael Panaccio provides his services via Starfish Technology Fund II, LP.
(ii) Retired 23 November 2017
(iii) Appointed 24 November 2017
(b)
Executives’ Remuneration: Table 2
Short-Term
Post-employment
Salary, fees
$
Other (i)
$
Pension Plan
$
Share based
payments
Equity (ii)
$
Total
Total performance
related
Share based
payments as % of
total
$
%
2019
Executive Director:
A Ronchi (iii)
Executives:
M Blackburn (v)
D Connellan
M Connell (iv)
D Erikson
M May
Z Whyatt (iii), (vi)
389,709
30,445
21,250
91,079
532,483
17.1
89,837
51,527
145,091
190,000
240,000
16,842
-
-
-
-
-
3,183
8,439
-
11,935
18,050
20,531
1,138
1,358
-
695
-
48,544
891
99,634
51,527
157,721
208,050
309,075
22,054
1,123,006
33,628
81,343
142,567
1,380,544
1.4
-
0.4
-
15.7
4.0
10.3
%
17.1
1.4
-
0.4
-
15.7
4.0
10.3
(i) Other benefits include the payment of certain health and disability related insurance premiums in the US and UK.
(ii) Share based payments comprise mixture of the grant of options, performance rights, and loan shares backed by an interest free, non-recourse loan. For accounting
purposes, all these equity instruments are valued the same as options.
(iii) Foreign currency amounts are converted into AUD at the average exchange rates applicable throughout the year.
(iv) Resigned, 22 March 2019.
(v) Resigned, 21 December 2018.
(vi) Resigned, 10 August 2018.
dorsaVi Annual Report 2019
20
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Short-Term
Post-employment
Share based
payments
Total
Total performance
related
Share based
payments as % of
total
2018
Salary, fees
Other (i)
Pension Plan
Equity (ii)
$
$
$
$
$
%
Executive Director:
A Ronchi (iii)
Executives:
M Blackburn
D Connellan
M Connell
D Erikson (iv)
M Heaysman (iii) (v)
M May
M Umer (vi)
Z Whyatt (iii)
343,302
13,861
22,524
103,255
482,942
21.4
205,000
109,200
140,000
38,528
278,039
235,000
177,380
138,841
-
-
-
-
16,501
-
-
17,143
1,665,290
47,505
19,475
-
13,299
3,660
-
19,762
11,875
4,165
94,760
60,984
-
40,553
-
43,257
66,710
-
54,943
285,459
109,200
193,852
42,188
337,797
321,472
189,255
215,092
369,702
2,177,257
21.4
-
20.0
-
12.8
20.8
-
25.5
17.0
%
21.4
21.4
-
20.9
-
12.8
20.8
-
25.5
17.0
(i) Other benefits include the payment of certain health and disability related insurance premiums in the US and UK.
(ii) Share based payments comprise mixture of the grant of options, performance rights, and loan shares backed by an interest free, non-recourse loan. For
accounting purposes, all these equity instruments are valued the same as options.
(iii) Foreign currency amounts are converted into AUD at the average exchange rates applicable throughout the year.
(iv) Commenced 16 April 2018.
(v) Ceased to be a KMP, 11 April 2018.
(vi) Resigned, 30 April 2018.
D.
(a)
Relationship between Remuneration and Group Performance
Remuneration Not Dependent on Satisfaction of Performance Condition
The non-executive 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 may include short-term and long-term incentive plans. Performance-based remuneration granted to key
management personnel has regard to Group performance over a twelve month to 3-year period.
Summary of the performance conditions for KMP with performance-linked equity instruments: Table 3
KMP
Andrew Ronchi
Matthew May
Damian Connellan
David Erikson
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
The conditions were selected to promote the creation of shareholder wealth during the period.
dorsaVi Annual Report 2019
21
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(c)
Consequences of Group’s Performance on Shareholder Wealth
Summary of Group Performance and Key Performance Indicators: Table 4
Company Performance
Revenue
% increase/(decrease)
Loss after tax
% (increase)/decrease
Change in share price
Dividend paid to shareholders
Return of capital
Total remuneration of KMP
Total performance-based
remuneration
2019
3,223,869
(27%)
(4,020,751)
(8%)
(58%)
-
-
1,543,180
2018
4,394,271
13%
(3,727,073)
4%
(59%)
-
-
2,433,653
2017
3,897,882
20%
(3,876,248)
26%
7%
-
-
2,182,038
2016
3,238,138
75%
(5,237,102)
35%
4%
-
-
2,450,850
2015
1,850,416
141%
(8,036,161)
(226%)
(41%)
-
-
2,442,136
142,567
369,702
290,885
98,264
140,295
Key Management Personnel’s Share-Based Compensation
Details of Compensation Equity
E.
(a)
Table 5
2019
Grant Date (i)
Executives:
A Ronchi:
29-Nov-16
29-Nov-16
29-Nov-16
M May:
5-Nov-14
5-Jun-17
5-Jun-17
5-Jun-17
M Blackburn: (ii)
5-Jun-17
5-Jun-17
5-Jun-17
M Connell: (iii)
5-Jun-17
5-Jun-17
5-Jun-17
Z Whyatt: (iv)
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
Number
Granted
Value per
unit at
grant date
$
Vested during
the year
Year in which
equity may vest
150,000
150,000
450,000
20,000
125,000
125,000
200,000
100,000
100,000
150,000
50,000
50,000
150,000
500,000
78,333
133,333
133,334
350,000
3,015,000
0.45
0.45
0.45
0.27
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.33
0.33
0.33
0.33
0.33
11,250
-
-
-
22,500
-
-
22,500
-
-
11,500
-
-
-
-
24,166
-
-
91,916
2019
2020
2020
2019
2019
2020
2020
2019
2020
2020
2019
2020
2020
2017
2018
2019
2020
2020
Vest
%
8%
-
-
100%
18%
-
-
23%
-
-
23%
-
-
100%
100%
18%
-
-
(i) The options and performance rights granted are subject to performance and retention conditions.
(ii) M Blackburn resigned, 21 December 2018.
(iii) M Connell resigned, 22 March 2019.
(iv) Z Whyatt resigned, 10 August 2018.
Terms and conditions for each grant
Forfeited during
the year
Exercise
Price
Expiry
Date
First
Exercise
Date
Last
Exercise
Date
$
-
-
-
138,750
-
-
N/A
1-Oct-19
29-Nov-19
N/A
1-Oct-19
29-Nov-19
N/A
1-Oct-19
29-Nov-19
-
0.40
5-Nov-19
-
-
-
-
-
-
-
-
-
N/A
1-Oct-19
1-Jul-19
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1-Oct-19
1-Jul-19
1-Oct-19
1-Jul-19
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.33
0.33
0.33
-
-
15-May-22
1-Oct-22
15-May-17
1-Oct-17
15-May-22
1-Oct-22
1-Oct-23
1-Oct-18
1-Oct-23
N/A
N/A
N/A
N/A
N/A
N/A
102,500
-
-
77,500
100,000
150,000
38,500
50,000
150,000
-
-
109,167
133,334
350,000
1,399,751
As at 30 June 2019, no options have been exercised and, accordingly, no shares have been issued as a result of options
previously vested.
dorsaVi Annual Report 2019
22
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2018
Grant Date (i)
Executives:
A Ronchi:
29-Nov-16
29-Nov-16
29-Nov-16
29-Nov-16
Z Whyatt:
15-May-17
15-May-17
15-May-17
15-May-17
15-May-17
M Heaysman: (ii)
3-Jul-14
17-Aug-15
5-Jun-17
5-Jun-17
5-Jun-17
M Connell:
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
M Blackburn:
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
M May:
5-Nov-14
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
M Umer: (iii)
25-Feb-15
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
Number
Granted
Value per
unit at grant
date
Vested
during the
year
Year in
which
equity may
vest
$
0.45
0.45
0.45
0.45
0.33
0.33
0.33
0.33
0.33
0.04
0.17
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.31
0.27
0.31
0.31
0.31
0.31
0.31
0.23
0.31
0.31
0.31
0.31
150,000
150,000
150,000
450,000
500,000
133,333
133,333
133,334
350,000
250,000
500,000
83,334
83,334
333,332
50,000
50,000
50,000
150,000
100,000
100,000
100,000
150,000
20,000
100,000
125,000
125,000
125,000
200,000
30,000
25,000
25,000
25,000
75,000
5,025,000
75,000
-
-
-
-
55,000
-
-
-
-
-
31,250
-
-
33,750
-
-
-
67,000
-
-
-
-
100,000
52,500
-
-
-
-
16,063
-
-
-
430,563
2018
2019
2020
2020
2017
2018
2019
2020
2020
2017
2020
2018
2019
2020
2018
2019
2020
2020
2018
2019
2020
2020
2019
2017
2018
2019
2020
2020
2020
2018
2019
2020
2020
Vest
%
50%
-
-
-
100%
41%
-
-
-
-
-
37%
-
-
68%
-
-
-
67%
-
-
-
100%
100%
42%
-
-
-
100%
64%
-
-
-
Terms and conditions for each grant
Forfeited
during the year
Exercise
Price
Expiry Date
First
Exercise
Date
Last
Exercise
Date
$
-
-
-
-
0.33
0.33
0.33
0.33
0.33
0.46
0.26
-
-
-
-
-
-
-
-
-
-
-
0.40
-
-
-
-
-
0.36
-
-
-
-
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
3-Jul-19
17-Aug-20
1-Jan-18
1-Jan-19
1-Jan-20
1-Oct-17
1-Oct-18
1-Oct-19
1-Jul-19
1-Oct-17
1-Oct-18
1-Oct-19
1-Jul-19
5-Nov-19
1-Jul-17
1-Oct-17
1-Oct-18
1-Oct-19
1-Jul-19
25-Feb-20
1-Oct-17
1-Oct-18
1-Oct-19
1-Jul-19
N/A
1-Oct-18
1-Oct-19
29-Nov-19
15-May-17
1-Oct-17
1-Oct-18
1-Oct-19
1-Jul-19
N/A
1-Oct-18
1-Oct-19
29-Nov-19
15-May-22
1-Oct-22
1-Oct-23
1-Oct-24
1-Jul-24
N/A
N/A
N/A
N/A
N/A
N/A
1-Oct-18
1-Oct-19
1-Jul-19
N/A
1-Oct-18
1-Oct-19
1-Jul-19
N/A
N/A
N/A
1-Oct-18
1-Oct-19
1-Jul-19
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1-Oct-18
1-Oct-19
1-Jul-19
N/A
1-Oct-18
1-Oct-19
1-Jul-19
N/A
N/A
N/A
1-Oct-18
1-Oct-19
1-Jul-19
N/A
N/A
N/A
N/A
N/A
75,000
-
-
-
-
78,333
-
-
-
250,000
500,000
52,084
83,334
333,332
16,250
-
-
-
33,000
-
-
-
-
-
72,500
-
-
-
30,000
8,937
25,000
25,000
75,000
1,657,770
The options and performance rights granted during 2017 are subject to performance and retention conditions.
(i)
(ii) M Heaysman ceased to be a member of the KMP, 11 April 2018.
(iii) M Umer resigned, 30 April 2018.
F.
(a)
Key Management Personnel’s Equity Holdings
Number of Equity Holdings held by Key Management Personnel
As at 30 June 2019, no key management personnel held options, under the Group’s Employee Share Ownership Plan 2013.
As at 30 June 2019, key management personnel held 925,000 performance rights under the Group’s Employee Share
Ownership Plan 2013, which, on vesting, convert to 925,000 ordinary shares of the Group. As at 30 June 2019, none of
these performance rights had vested and converted to shares.
dorsaVi Annual Report 2019
23
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
2019 is as follows:
Table 7
Non-Executive Directors:
A Attia
M Panaccio
M Panaccio (relevant
interest)
G Tweedly
Executive Director:
A Ronchi
Executives:
M Connell (i)
M Blackburn (i)
Z Whyatt (i)
M May
Balance
30 June 2018
Vested on
Achievement of
KPI
Participation in
share issue
Net change
Other (ii)
Balance
30 June 2019
211,139
71,421,255
1,000,000
86,347
-
-
-
-
70,379
17,859,407
-
28,782
8,406,546
11,250
468,527
-
-
-
-
-
33,750
338,579
63,496
172,500
81,733,612
11,500
22,500
-
22,500
67,750
-
-
-
-
18,427,095
(45,250)
(361,079)
(63,496)
-
(469,825)
281,518
89,280,662
1,000,000
115,129
8,886,323
-
-
-
195,000
99,758,632
(i) Resigned during the year.
(ii) Balance at resignation date
G.
(a)
Loans to Key Management Personnel
Aggregate of Loans Made
There were no loans made to key management personnel during the 2019 financial year (2018: $Nil). There were no
outstanding loans to key management personnel as at 30 June 2019 (30 June 2018: $Nil).
H.
(a)
Other Transactions with Key Management Personnel
Transactions with Key Management Personnel of the Entity or its Parent and their Personally Related
Entities
During the year, dorsaVi Ltd did not enter into any transactions with key management personnel or their personally related
entities.
(b)
Transactions with Other Related Parties
Starfish Ventures Pty Ltd is considered a related party in accordance with the definition under AASB 124: Related Parties.
During the first five months of the year ended 30 June 2019, Starfish Ventures Pty Ltd leased property and charged rent to
dorsaVi Ltd. Total value of these rental charges was $83,570 (2018: $109,346). The rent was charged to dorsaVi on normal
terms and conditions. The balance outstanding at balance date was $Nil (2017: $15,047). The Rental arrangement ceased
in November 2018.
During the year ended 30 June 2019, dorsaVi Ltd paid $34,276 (2018: $54,120) to Starfish Technology Fund II, LP on behalf
of Michael Panaccio for director’s fees.
dorsaVi Annual Report 2019
24
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
I.
Use of Remuneration Consultants
During the year the Board did not engage remuneration consultants.
J.
Voting and Comments made at the Group’s 2018 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
Greg Tweedly
Chairman
Andrew Ronchi
Director and CEO
Melbourne
Date: 29 August 2019
Melbourne
Date: 29 August 2019
dorsaVi Annual Report 2019
25
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(cid:51)(cid:76)(cid:87)(cid:70)(cid:75)(cid:72)(cid:85)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:36)(cid:81)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:57)(cid:76)(cid:70)(cid:87)(cid:82)(cid:85)(cid:76)(cid:68)(cid:81)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:36)(cid:37)(cid:49)(cid:3)(cid:21)(cid:26)(cid:3)(cid:28)(cid:26)(cid:24)(cid:3)(cid:21)(cid:24)(cid:24)(cid:3)(cid:20)(cid:28)(cid:25)(cid:17)(cid:3)(cid:47)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:20)(cid:22)(cid:15)(cid:3)(cid:25)(cid:25)(cid:23)(cid:3)(cid:38)(cid:82)(cid:79)(cid:79)(cid:76)(cid:81)(cid:86)(cid:3)(cid:54)(cid:87)(cid:85)(cid:72)(cid:72)(cid:87)(cid:15)(cid:3)(cid:39)(cid:82)(cid:70)(cid:78)(cid:79)(cid:68)(cid:81)(cid:71)(cid:86)(cid:15)(cid:3)(cid:57)(cid:44)(cid:38)(cid:3)(cid:22)(cid:19)(cid:19)(cid:27)(cid:3)
(cid:51)(cid:76)(cid:87)(cid:70)(cid:75)(cid:72)(cid:85)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:68)(cid:86)(cid:86)(cid:82)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:73)(cid:76)(cid:85)(cid:80)(cid:86)(cid:17)(cid:3)(cid:47)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:3)(cid:86)(cid:70)(cid:75)(cid:72)(cid:80)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:51)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:47)(cid:72)(cid:74)(cid:76)(cid:86)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)(cid:3)
(cid:51)(cid:76)(cid:87)(cid:70)(cid:75)(cid:72)(cid:85)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:86)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:74)(cid:79)(cid:82)(cid:69)(cid:68)(cid:79)(cid:3)(cid:81)(cid:72)(cid:87)(cid:90)(cid:82)(cid:85)(cid:78)(cid:3)(cid:82)(cid:73)(cid:3)(cid:37)(cid:68)(cid:78)(cid:72)(cid:85)(cid:3)(cid:55)(cid:76)(cid:79)(cid:79)(cid:92)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:72)(cid:83)(cid:68)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:79)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)
(cid:36)(cid:71)(cid:72)(cid:79)(cid:68)(cid:76)(cid:71)(cid:72)(cid:3)(cid:3)(cid:37)(cid:85)(cid:76)(cid:86)(cid:69)(cid:68)(cid:81)(cid:72)(cid:3)(cid:3)(cid:48)(cid:72)(cid:79)(cid:69)(cid:82)(cid:88)(cid:85)(cid:81)(cid:72)(cid:3)(cid:3)(cid:49)(cid:72)(cid:90)(cid:70)(cid:68)(cid:86)(cid:87)(cid:79)(cid:72)(cid:3)(cid:3)(cid:54)(cid:92)(cid:71)(cid:81)(cid:72)(cid:92)(cid:3)(cid:3)(cid:51)(cid:72)(cid:85)(cid:87)(cid:75)(cid:3)
pitcher.com.au
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Financial Report for the Year Ended 30 June 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Notes
2019
$
2018
$
Revenue and other income:
Sales revenue
Other income
Less: Expenses:
Cost of sales
Advertising expenses
Conference expenses
Consultancy expenses
Depreciation and amortisation expenses
Employee benefits expenses
Write off of goodwill
Finance costs
Occupancy expenses
Professional fees
Software expenses
Travel expenses
Other expenses
Loss before income tax benefit
Income tax benefit
Loss from continuing operations
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
Total comprehensive income for the year
Earnings per share for loss from
continuing operations attributable to
equity holders of the parent entity:
Basic loss per share
Diluted loss per share
4
4
5
5
5
5
5
6
2,514,992
708,877
3,223,869
3,433,348
960,923
4,394,271
(448,597)
(185,009)
(137,852)
(218,940)
(965,854)
(873,625)
(244,742)
(88,292)
(362,075)
(738,281)
(3,979,898)
(4,498,316)
-
(112,110)
(32,136)
(198,495)
(459,934)
(330,821)
(207,899)
(645,834)
-
(356,250)
(543,182)
(219,786)
(387,902)
(610,454)
(7,811,269)
(9,035,015)
(4,587,400)
(4,640,744)
566,649
913,671
(4,020,751)
(3,727,073)
(500,365)
(500,365)
(4,521,116)
(443,571)
(443,571)
(4,170,644)
21
21
(2.15 cents)
(2.15 cents)
(2.22 cents)
(2.22 cents)
The above statement should be read in conjunction with the accompanying notes.
dorsaVi Annual Report 2019
27
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2019
Notes
2019
$
2018
$
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
Lease liability
Provisions
Total current liabilities
Non-current liabilities
Lease liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
8
9
10
11
12
13
14
15
16
15
16
17
18
18
2,766,419
1,363,607
308,520
142,578
4,581,124
3,966,857
2,189,079
324,934
235,995
6,716,865
4,069,915
577,695
4,647,610
3,884,253
324,331
4,208,584
9,228,734
10,925,449
1,513,207
1,084,644
125,524
340,133
1,978,864
-
381,782
1,466,426
235,470
25,106
260,576
2,239,440
6,989,294
-
41,858
41,858
1,508,284
9,417,165
40,381,715
38,455,224
(77,193)
731,407
(33,315,228)
(29,769,466)
6,989,294
9,417,165
The above statement should be read in conjunction with the accompanying notes.
dorsaVi Annual Report 2019
28
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated Entity
Share capital
Reserves
$
$
Accumulated
losses
$
Total Equity
$
Balance as at 1 July 2017
Loss for the year
38,440,518
758,286
-
-
(26,073,132)
(3,727,073)
13,125,672
(3,727,073)
Exchange differences on translation of foreign
operations, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Redemption of Employee share ownership plan
Employee share ownership plan
Equity instruments lapsed
-
-
(443,571)
(443,571)
-
(3,727,073)
(443,571)
(4,170,644)
14,706
-
-
-
14,706
447,431
(30,739)
416,692
-
-
14,706
447,431
30,739
30,739
-
462,137
Balance as at 30 June 2018
38,455,224
731,407
(29,769,466)
9,417,165
Balance as at 1 July 2018
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
Employee share ownership plan
Equity instruments lapsed
38,455,224
731,407
-
-
(29,769,466)
(4,020,751)
9,417,165
(4,020,751)
-
-
(500,365)
(500,365)
-
(4,020,751)
(500,365)
(4,521,116)
2,088,616
(162,125)
-
-
-
-
1,926,491
166,754
(474,989)
(308,235)
-
-
-
2,088,616
(162,125)
166,754
474,989
474,989
-
2,093,245
Balance as at 30 June 2019
40,381,715
(77,193)
(33,315,228)
6,989,294
The above statement should be read in conjunction with the accompanying notes.
dorsaVi Annual Report 2019
29
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Grants and sundry income received
Interest received
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
Payment of principal portion of lease liability
Proceeds from employee share ownership plan
Net cash provided by financing activities
Reconciliation of cash
Cash at beginning of the financial year
Net decrease in cash held
Cash at end of the year
Notes
2019
$
2018
$
19 (b)
3,593,957
(6,716,175)
(32,136)
140,225
46,610
884,476
(2,083,043)
4,389,596
(8,316,837)
-
347,051
112,182
870,640
(2,597,368)
(34,023)
(969,139)
(1,003,162)
(49,980)
(2,010,103)
(2,060,083)
2,088,616
(162,125)
(40,724)
-
1,885,767
-
-
-
14,706
14,706
19 (a)
3,966,857
(1,200,438)
2,766,419
8,609,602
(4,642,745)
3,966,857
The above statement should be read in conjunction with the accompanying notes.
dorsaVi Annual Report 2019
30
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:
NOTE 6:
NOTE 7:
NOTE 8:
NOTE 9:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
FINANCIAL RISK MANAGEMENT
REVENUE FROM CONTRACTS WITH CUSTOMERS AND OTHER INCOME
LOSS FROM CONTINUING OPERATIONS
INCOME TAX
DIVIDENDS
CASH AND CASH EQUIVALENTS
RECEIVABLES
NOTE 10:
INVENTORIES
NOTE 11:
NOTE 12:
NOTE 13:
NOTE 14:
OTHER ASSETS
INTANGIBLE ASSETS
PLANT AND EQUIPMENT
PAYABLES
NOTE 15:
LEASE LIABILITY
NOTE 16:
NOTE 17:
NOTE 18:
NOTE 19:
NOTE 20:
NOTE 21:
PROVISIONS
SHARE CAPITAL
RESERVES AND ACCUMULATED LOSSES
CASH FLOW INFORMATION
COMMITMENTS AND CONTINGENCIES
LOSS PER SHARE
NOTE 22:
SHARE BASED PAYMENTS
NOTE 23:
NOTE 24:
NOTE 25:
NOTE 26:
SUBSIDIARIES AND RELATED PARTY DISCLOSURES
AUDITOR'S REMUNERATION
PARENT ENTITY INFORMATION
SEGMENT INFORMATION
NOTE 27:
SUBSEQUENT EVENTS
dorsaVi Annual Report 2019
32
40
41
43
44
44
44
45
45
46
46
46
47
49
49
49
50
51
51
52
53
53
56
56
57
57
58
31
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2019
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 the Corporations Act
2001, Australian Accounting Standards, Interpretations and other applicable authoritative pronouncements of the Australian
Accounting Standards Board (AASB).
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: 86 Denmark Street, Kew, Victoria, 3101. 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 directors’ report.
Compliance with International Financial Reporting Standards:
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)
New and Revised Accounting Standards Effective at 30 June 2019
The Group has applied all new and revised Australian Accounting Standards that apply to annual reporting periods
beginning on or after 1 July 2018 including the following:
(i)
AASB 9 – financial instruments
The Group adopted AASB 9 Financial Instruments, from 1 July 2018. AASB 9 replaces AASB 139: Financial Instruments:
Recognition and Measurement. The key changes to the requirements in AASB 139 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;
requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair
value due to changes in the entity’s own credit risk in OCI, except when it would create an ‘accounting mismatch’;
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.
•
•
•
The Group adopted AASB 9 effective 1 July 2018. The adoption of AASB 9 has not had a material impact on the prior
reporting periods presented in the financial statements.
(ii)
AASB 15 – revenue from contracts with customers
The Group adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018. AASB 15 provides (other than 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. The
core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to a
customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
dorsaVi Annual Report 2019
32
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
or services. Accordingly, in contrast to the approach under AASB 118 Revenue, AASB 15 does not prescribe different
patterns of revenue recognition depending on whether the entity provides goods or service to the customer.
The Group adopted AASB 15 effective 1 July 2018. The adoption of AASB 15 has not had a material impact on the prior
reporting periods presented in the financial statements.
(iii)
AASB 16 – leases
The Group adopted AASB 16, from 1 July 2018. AASB 16 replaces AASB 117: Leases. The key changes to the
requirements in AASB 117 include introducing a single lessee accounting model that requires 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.
• 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.
The Group early adopted AASB 16 effective 1 July 2018. The impact is reflected in the Consolidated Statement of Financial
Position (refer Notes 13 and 15) and the Consolidated Statement of Profit or Loss and Other Comprehensive Income. The
adoption of AASB 16 has not had a material impact on the prior reporting periods presented in the financial statements.
(c)
Going Concern
The financial report has been prepared on a going concern basis. The Group incurred a loss from ordinary activities after
income tax of $4,020,751 during the year ended 30 June 2019 (2018: $3,727,073) and had a net decrease in cash held of
$1,200,438 (2018: decrease $4,642,745). As at 30 June 2019, the Group’s current assets exceed current liabilities by
$2,602,260 (2018: $5,250,439).
The 2019 financial year has continued the strategic change for the Group that was implemented in the 2018 financial year.
The Group has continued its focus on driving penetration into the US clinical market and on building annuity revenue
streams. Whilst, these strategic changes continue to have a short-term financial impact on the Group through cash burn
and adverse growth in revenue, in the longer term, the size of the US clinical market and scalability of annuity products, is
expected to provide the greatest opportunity for the Group and its shareholders.
In determining the basis for preparation of the financial report, the Directors have reviewed the financial performance, future
operating plans (including cashflow forecasts), financial position and existing cash resources available to the Group. The
Directors are confident that the Group will be able to continue as a going concern for at least 12 months from the date of
authorisation of the financial report, which contemplates continuity of normal business activities and the realisation of assets
and the settlement of liabilities in the ordinary course of business.
Should the need arise in the medium to long-term, the Company will seek to raise additional working capital through capital
raises.
As a result of the above, the Directors have concluded that the going concern basis is appropriate.
Whilst the Directors are confident that the above initiatives will generate sufficient funds to enable the Group to continue as a
going concern for a period of at least 12 months from the date of signing the financial report, should these initiatives be
unsuccessful, there exists a material uncertainty that may cast significant doubt on the ability of the Group to continue as a
going concern and therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of
business, and at the amounts stated in the financial report.
(d)
Principles of Consolidation
The consolidated financial statements are those of the Group, comprising the financial statements of the parent entity and all
of the entities which the parent 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.
dorsaVi Annual Report 2019
33
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(e)
Revenue from contracts with customers
The Group derives revenue from the sale of wearable sensors and software. The devices, when used with Group software,
allow the accurate measurement of movement at a variety of different places on the human body or the activity of muscles.
Revenue from integrated sales of devices and software:
The Group’s contracts with customers are typically integrated and requires the provision of devices and software which is
not separately identifiable and so is considered a bundle of goods and services. Revenue from the sale or lease of devices
and licencing of software is recognised over the licence term.
Revenue from consulting:
Revenue from consulting contracts is recognised over time, as the services are provided to the customer, based on service
hours performed as a percentage of estimated total service hours under the contract. Recognising revenue on the basis of
service hours is considered an appropriate method of recognising revenue as it is consistent with the manner in which
services are provided to the customer.
Revenue from the sale of consumables:
The Group sells various consumables goods to customers to support their ongoing use of their wearable sensors. Revenue
from the consumables is recognised at the point in time when control of the goods is transferred to the customer, which
generally occurs at the time of delivery. Customers are, either, required to pay in full for all goods and services purchased at
the time of purchase, or, are invoiced on a monthly basis depending on the contract. Outstanding invoices are due for
payment within 30 days of the invoice date.
Consideration included in the measurement of revenue:
The consideration to be received from customers is generally fixed and based on the customer contract.
Receivables from contracts with customers:
A receivable from a contract with a customer represents the Group’s unconditional right to consideration arising from the
transfer of goods or services to the customer (i.e. only the passage of time is required before payment of the consideration is
due). Subsequent to initial recognition, receivables from contracts with customers are measured at amortised cost and are
tested for impairment.
Contract assets:
A contract asset represents the Group’s right to consideration (not being an unconditional right recognised as a receivable)
in exchange for goods or services transferred to the customer. Contract assets are measured at the amount of
consideration that the Group expects to be entitled in exchange for goods or services transferred to the customer.
Contract liabilities:
A contract liability represents the Group’s obligation to transfer goods or services to the customer for which the company has
received consideration (or an amount of consideration is due) from the customer. Amounts recorded as contract liabilities
are subsequently recognised as revenue when the Group transfers the contracted goods or services to the customer.
Costs to obtain a contract:
Incremental costs incurred by the company to obtain a contract with a customer, such as the payment of commissions, are
recognised as an asset and amortised on a systematic basis that is consistent with the transfer of the contracted goods or
services to the customer
Costs to fulfil a contract:
Costs incurred by the Group to fulfil a contract with a customer that are not included in the carrying amount of another
recognised asset, such as inventory, plant and equipment or intangible asset, are recognised as an asset to the extent that
such costs relate directly to a contract or anticipated contract, generate or enhance resources of the Group that will be used
to fulfil the contract, and are expected to be recovered from the consideration expected to be obtained from fulfilling the
contract. Costs incurred to fulfil a contract that are recognised as an asset are amortised on a systematic basis that is
consistent with the transfer of the contracted goods or services to the customer. Other costs incurred by the Group to fulfil a
contract with a customer (that are not recognised as an asset) are recognised as an expense when incurred.
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(f)
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.
(g)
Inventories
Inventories are measured at the lower of cost and net realisable value. Cost comprises all costs of purchase, cost of
conversion and other costs incurred in bringing inventories to their present location and condition.
(h)
Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation and any
accumulated impairment loss.
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
Leased devices
Office equipment
Furniture, fixtures and fittings
Right to use asset
Tooling
(i)
Leases
Lease assets:
Depreciation Rates
10-50%
20%
10-67%
10-20%
31%
10%
Depreciation Basis
Diminishing value
Straight line
Diminishing value
Diminishing value
Straight line
Straight line
At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the company
recognises a lease asset representing its right to use the underlying asset and a lease liability representing its obligation to
make lease payments.
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the lease liability, any
lease payments made at or before the commencement date of the lease, less any lease incentives received, any initial direct
costs incurred by the company, and an estimate of costs to be incurred by the company in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the
terms and conditions of the lease, unless those costs are incurred to produce inventories.
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement of the lease liability),
less accumulated depreciation and any accumulated impairment loss.
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset,
consistent with the estimated consumption of the economic benefits embodied in the underlying asset.
Lease liabilities:
At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the company
recognises a lease asset representing its right to use the underlying asset and a lease liability representing its obligation to
make lease payments.
Lease liabilities are initially recognised at the present value of the future lease payments (i.e. the lease payments that are
unpaid at the commencement date of the lease). These lease payments are discounted using the interest rate implicit in the
lease, if that rate can be readily determined, or otherwise using the company’s incremental borrowing rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of remaining lease payments (i.e. the
lease payments that are unpaid at the reporting date). Interest expense on lease liabilities is recognised in profit or loss
(presented as a component of finance costs). Lease liabilities are remeasured to reflect changes to lease terms, changes to
lease payments and any lease modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an expense when incurred.
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Leases of 12-months or less and leases of low value assets:
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease asset and
a lease liability has not been recognised) are recognised as an expense on a straight-line basis over the lease term.
(j)
Intangibles
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 Expenditure:
Development expenditure encompasses the cost of developing new products including mobile applications, algorithms,
sensors, hardware and firmware. Development expenditure is 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.
(k)
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 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.
(l)
Income Tax
Current income tax expense or benefit is the tax payable (receivable), 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 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.
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
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.
(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.
(iii)
Retirement Benefit Obligations:
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. 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.
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(n)
Borrowing Costs
Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of
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
Initial recognition and measurement:
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
instrument. For financial assets, this is equivalent to the date that the Group commits itself to either the purchase or sale of
the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value adjusted for transaction costs, except where the instrument is
classified as fair value through profit or loss, in which case transaction costs are immediately recognised as expenses in
profit or loss.
Classification of financial assets:
Financial assets recognised by the Group are subsequently measured in their entirety at either amortised cost or fair value,
subject to their classification and whether the Group irrevocably designates the financial asset on initial recognition at fair
value through other comprehensive income (FVtOCI) in accordance with the relevant criteria in AASB 9.
Financial assets not irrevocably designated on initial recognition at FVtOCI are classified as subsequently measured at
amortised cost, FVtOCI or fair value through profit or loss (FVtPL) on the basis of both:
the Group’s business model for managing the financial assets; and
(a)
the contractual cash flow characteristics of the financial asset.
(b)
Classification of financial liabilities:
Financial liabilities classified as held-for-trading, contingent consideration payable by the Group for the acquisition of a
business, and financial liabilities designated at FVtPL, are subsequently measured at fair value.
All other financial liabilities recognised by the Group are subsequently measured at amortised cost.
Trade and other receivables:
Trade and other receivables arise from the Group’s transactions with its customers and are normally settled within 30 days.
Consistent with both the Group’s business model for managing the financial assets and the contractual cash flow
characteristics of the assets, trade and other receivables are subsequently measured at amortised cost.
Impairment of financial assets:
The following financial assets are tested for impairment by applying the ‘expected credit loss’ impairment model:
(a)
(b)
(c)
debt instruments measured at amortised cost;
debt instruments classified at fair value through other comprehensive income; and
receivables from contracts with customers and contract assets.
The Group applies the simplified approach under AASB 9 to measuring the allowance for credit losses for both receivables
from contracts with customers and contract assets. Under the AASB 9 simplified approach, the Group determines the
allowance for credit losses for receivables from contracts with customers and contract assets on the basis of the lifetime
expected credit losses of the financial asset. Lifetime expected credit losses represent the expected credit losses that are
expected to result from default events over the expected life of the financial asset.
For all other financial assets subject to impairment testing, when there has been a significant increase in credit risk since the
initial recognition of the financial asset, the allowance for credit losses is recognised on the basis of the lifetime expected
credit losses. When there has not been an increase in credit risk since initial recognition, the allowance for credit losses is
recognised on the basis of 12-month expected credit losses. ’12-month expected credit losses’ is the portion of lifetime
expected credit losses that represent the expected credit losses that result from default events on a financial instrument that
are possible within the 12 months after the reporting date.
The Group consider a range of information when assessing whether the credit risk has increased significantly since initial
recognition. This includes such factors as the identification of significant changes in external market indicators of credit risk,
significant adverse changes in the financial performance or financial position of the counterparty, significant changes in the
value of collateral, and past due information.
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
The Group assumes that the credit risk on a financial asset has not increased significantly since initial recognition when the
financial asset is determined to have a low credit risk at the reporting date. The Group considers a financial asset to have a
low credit risk when the counterparty has an external ‘investment grade’ credit rating (if available) of BBB or higher, or
otherwise is assessed by the Group to have a strong financial position and no history of past due amounts from previous
transactions with the Group.
The Group determines expected credit losses using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the financial asset as well as current and future expected economic
conditions relevant to the financial asset. When material, the time value of money is incorporated into the measurement of
expected credit losses. There has been no change in the estimation techniques or significant assumptions made during the
reporting period.
The Group has identified expected credit loss rates for the purpose of measuring expected credit losses. These credit loss
rates have been selected based on the Group’s historical experience. Because contract assets are directly related to
unbilled work in progress, contract assets have a similar credit risk profile to receivables from contracts with customers.
Accordingly, the Group applies the same approach to measuring expected credit losses of receivables from contracts with
customers as it does to measuring impairment losses on contract assets.
The measurement of expected credit losses reflects the Group’s ‘expected rate of loss’, which is a product of the probability
of default and the loss given default, and its ‘exposure at default’, which is typically the carrying amount of the relevant
asset. Expected credit losses are measured as the difference between all contractual cash flows due and all contractual
cash flows expected based on the Group’s exposure at default, discounted at the financial asset’s original effective interest
rate.
Financial assets are regarded as ‘credit-impaired’ when one or more events have occurred that have a detrimental impact
on the estimated future cash flows of the financial asset. Indicators that a financial asset is ‘credit-impaired’ include
observable data about the following:
(a)
(b)
(c)
significant financial difficulty of the issuer or the borrower;
breach of contract;
the lender, for economic or contractual reasons relating to the borrower’s financial difficulty, has granted
concessions to the borrower that the lender would not otherwise consider; or
it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation.
(d)
The gross carrying amount of a financial asset is written off (i.e. reduced directly) when the counterparty is in severe
financial difficulty and the Group has no realistic expectation of recovery of the financial asset. Financial assets written off
remain subject to enforcement action by the Group. Recoveries, if any, are recognised in profit or loss.
(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 undertaken in foreign currencies are recognised in the Group’s 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 in the financial year in which they arose.
dorsaVi Annual Report 2019
39
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
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.
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 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. The Directors have determined that there is one
CGU applicable to the cash flows generated. 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.
(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
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity
instruments on the date at which they are granted. The fair value of equity instruments is determined using the Black
Scholes model.
dorsaVi Annual Report 2019
40
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
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
Finance liabilities:
Trade payables
Lease liability
Other payables
(a)
Currency Risk
2019
$
2018
$
2,766,419
617,700
745,907
4,130,026
3,966,857
1,164,759
1,024,320
6,155,936
228,668
360,994
1,284,539
1,874,201
228,901
-
855,743
1,084,644
The Group undertakes transactions denominated in foreign currencies. 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.
The carrying amount of foreign currency denominated monetary assets and monetary liabilities at reporting date are:
2019
$
2018
$
USD
GBP
USD
GBP
450,706
251,895
198,811
483,970
352,753
131,217
558,516
331,757
226,759
342,297
31,476
310,821
Current assets
Current liabilities
Sensitivity:
If foreign exchange rates were to increase/decrease by 10% from rates used to determine fair value 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:
+/- 10%
Impact on loss after tax
Impact on equity
(b)
Interest Rate Risk
2019
$
131,019
131,019
2018
$
141,422
141,422
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.
dorsaVi Annual Report 2019
41
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
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:
2019
Financial Instruments
Financial assets
Cash
Flexi Deposit
Term Deposit
Term Deposit
Term Deposit
Trade receivables
Other receivables
Financial liabilities
Trade payables
Lease liability
Other payables
2018
Financial Instruments
Financial assets:
Cash
Flexi Deposit
Term Deposit
Term Deposit
Trade receivables
Other receivables
Financial liabilities:
Trade payables
Other payables
Interest
Bearing
$
Non-interest
bearing
$
Total carrying
amount
$
Weighted average
effective interest rate
1,638,124
999,856
51,381
27,932
49,126
-
-
2,766,419
-
-
-
-
-
617,700
745,907
1,363,607
1,638,124
999,856
51,381
27,932
49,126
617,700
745,907
4,130,026
0.70% Floating
1.80% Fixed
2.66% Fixed
2.20% Fixed
2.61% Fixed
0.00%
0.00%
-
360,994
-
360,994
228,668
-
1,284,539
1,513,207
228,668
360,994
1,284,539
1,874,201
0.00%
12.00% Fixed
0.00%
Interest
Bearing
$
1,891,314
2,000,000
26,602
48,941
-
-
3,966,857
-
-
-
Non-interest
bearing
$
Total carrying
amount
$
Weighted average
effective interest rate
-
-
-
-
1,164,759
1,024,320
2,189,079
228,901
855,743
1,084,644
1,891,314
2,000,000
26,602
48,941
1,164,759
1,024,320
6,155,936
228,901
855,743
1,084,644
0.80% Floating
2.59% Fixed
2.52% Fixed
2.09% Fixed
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.
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
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 and unbilled debtors in relation to accrued income.
(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 when they fall due.
(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 FROM CONTRACTS WITH CUSTOMERS AND OTHER INCOME
Revenue recognised at a point in time:
Clinical income
Workplace income
Project income
Revenue recognised over time:
Clinical income
Workplace income
Project income
Revenue from contracts with customers is disclosed in the segment note as follows:
Clinical income
Workplace income
Project income
Other income:
Grant and other income
Interest income
Foreign exchange gain
2019
$
2018
$
359,020
653,576
221,551
1,234,147
708,189
1,869,605
-
2,577,794
977,797
303,048
770,709
84,845
-
-
1,280,845
2,514,992
855,554
3,433,348
1,336,817
956,624
221,551
2,514,992
140,225
46,610
522,042
708,877
3,223,869
1,478,898
1,954,450
-
3,433,348
347,051
112,182
501,690
960,923
4,394,271
dorsaVi Annual Report 2019
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dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
The Group adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018. Revenue from device sales is now
recognised over time and not at a point in time in accordance with the previous accounting policy. Adoption of AASB 15 did
not result in any material differences for the prior period.
NOTE 5:
LOSS FROM CONTINUING OPERATIONS
Loss before income tax has been determined after:
Depreciation
Amortisation
Employee benefits expense:
- Share based payments
- Other employee benefits
Less employee benefits capitalised
Operating lease rental
Research and development expense
Cost of sales
Write off of goodwill
Bad debts
NOTE 6:
INCOME TAX
(a) Components of tax benefit
Current tax
(b) Prima facie tax payable
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 27.5% (2018:
27.5%)
Add tax effect of:
- Accounting R&D expenditure
- Other non-allowable items
- Write-off of goodwill
- Share based payments expense
- Tax losses not recognised
Less tax effect of:
- R&D tax offset
- Effect of foreign tax rates
- Deferred tax assets not recognised
Income tax benefit attributable to loss
(c) Deferred tax assets not brought to account
Temporary differences
Operating tax losses
NOTE 7:
DIVIDENDS
There were no dividends paid during the period.
2019
$
2018
$
182,377
783,477
965,854
117,342
620,939
738,281
166,754
4,514,547
4,681,301
701,403
3,979,898
447,431
5,083,226
5,530,657
1,032,371
4,498,286
198,495
1,302,641
448,597
-
171,092
356,250
2,052,485
873,625
112,110
154,509
(566,649)
(913,671)
(1,261,535)
(1,276,205)
371,997
172
-
45,857
1,059,944
1,477,970
566,649
12,529
203,906
783,084
(566,649)
545,686
1,215
30,830
123,043
935,847
1,636,621
913,671
101,090
259,326
1,274,087
(913,671)
202,563
6,846,669
7,049,232
175,325
6,412,609
6,587,934
dorsaVi Annual Report 2019
44
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 8:
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Deposits at call
NOTE 9:
RECEIVABLES
CURRENT
Receivables from contracts with customers
Allowance for credit losses
Contract assets
R&D tax offset refundable
Contract assets:
2019
$
1,638,124
1,128,295
2,766,419
2018
$
1,891,314
2,075,543
3,966,857
744,311
(126,611)
617,700
179,259
566,648
745,907
1,363,607
1,245,737
(80,978)
1,164,759
139,845
884,475
1,024,320
2,189,079
The Group recovered the majority of the 2018 contract assets within the 2019 year and expects the 2019 balance to be
settled within 12 months.
Credit losses:
The group applies the simplified approach under AASB 9 to measuring the allowance for credit losses for both receivables
from contracts with customers and contract assets. Under the AASB 9 simplified approach, the group determines the
allowance for credit losses for receivables from contracts with customers and contract assets on the basis of the lifetime
expected credit losses of the instrument. Lifetime expected credit losses represent the expected credit losses that are
expected to result from default events over the expected life of the financial asset.
The group determines expected credit losses using a provision matrix based on the group’s historical credit loss experience,
adjusted for factors that are specific to the financial asset as well as current and future expected economic conditions
relevant to the financial asset. When material, the time value of money is incorporated into the measurement of expected
credit losses. There has been no change in the estimation techniques or significant assumptions made during the reporting
period.
Life-time expected credit losses - receivables from contracts with customers:
Loss allowance at 1 July
Net remeasurement of loss allowance
Amounts written off
Loss allowance at 30 June
(80,978)
(171,092)
125,459
(126,611)
(80,461)
(154,509)
153,992
(80,978)
30 June 2019:
Estimated total gross carrying
amount at default
Expected credit loss rate
Expected credit loss
30 June 2018:
Estimated total gross carrying
amount at default
Expected credit loss rate
Expected credit loss
Not past due
Past due 0-
30 days
Past due 30-
90 days
Past due
90+ days
Total
178,090
1%
1,781
268,932
3%
8,068
82,061
10%
8,206
215,228
50%
108,556
744,311
17.0%
126,611
100,994
1%
505
459,023
3%
13,770
498,650
5%
24,933
187,070
22%
41,770
1,245,737
6.5%
80,978
dorsaVi Annual Report 2019
45
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 10:
INVENTORIES
CURRENT
At cost
Finished goods
Work in progress
NOTE 11:
OTHER ASSETS
2019
$
2018
$
265,751
42,769
308,520
324,934
-
324,934
Prepayments
142,578
235,995
NOTE 12:
INTANGIBLE ASSETS
Patents, at cost
Less accumulated amortisation
Development expenditure, at cost
Less accumulated amortisation
(a)
Reconciliations
1,045,537
(197,440)
848,097
4,589,964
(1,368,146)
3,221,818
4,069,915
934,156
(147,581)
786,575
3,732,206
(634,528)
3,097,678
3,884,253
Reconciliation of the carrying amounts of intangible assets at the beginning and end of the current financial year:
Goodwill
Patents
Development
Expenditure
2019
$
2018
$
2019
$
2018
$
2019
$
2018
$
Opening carrying amount
Additions
Amortisation expense/write off
Closing carrying amount
- 112,110
-
- (112,110)
-
786,575
- 111,381
(49,859)
- 848,097
639,940
188,753
(42,118)
786,575
3,097,678
857,758
(733,618)
3,221,818
1,855,149
1,821,350
(578,821)
3,097,678
Additions to intangibles during the year related 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 (j)). During the prior year
workplace compliance services ceased to be provided and as a result goodwill was written off.
dorsaVi Annual Report 2019
46
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 13:
PLANT AND EQUIPMENT
Testing equipment, at cost
Accumulated depreciation
Leased devices, at cost
Accumulated depreciation
Office equipment, at cost
Accumulated depreciation
Furniture, fixtures and fittings, at cost
Accumulated depreciation
Right of use asset, at cost (i)
Accumulated depreciation
Tooling, at cost
Accumulated depreciation
Total
2019
$
128,635
(116,160)
12,475
267,743
(208,185)
2018
$
128,635
(108,314)
20,321
267,743
(158,657)
59,558
109,086
286,291
(203,929)
82,362
63,691
(16,384)
47,307
401,718
(82,404)
319,314
94,258
(37,579)
56,679
577,695
252,268
(176,043)
76,225
63,691
(11,097)
52,594
-
-
-
94,258
(28,153)
66,105
324,331
(i) On 15 November 2018, the Group entered into a 39-month property lease. The agreement does not include variable
lease payments or residual guarantees. Standard extension options are not expected to be exercised. The Group is
required to return the relevant asset to a specific condition at the end of the lease term.
dorsaVi Annual Report 2019
47
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(a)
Reconciliations
Reconciliation of the carrying amounts of plant and equipment at the beginning and end of the current financial year:
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
Right of use asset:
Opening carrying amount
Additions
Depreciation expense
Closing carrying amount
Tooling:
Opening carrying amount
Additions
Depreciation expense
Closing carrying amount
Total:
Opening carrying amount
Additions
Transfers from inventory
Depreciation expense
Closing carrying amount
2019
$
2018
$
20,321
-
(7,846)
12,475
41,488
2,150
(23,317)
20,321
109,086
-
(49,528)
59,558
150,591
10,599
(52,104)
109,086
76,225
34,023
(27,886)
82,362
83,304
21,102
(28,181)
76,225
52,594
-
(5,287)
47,307
58,476
-
(5,882)
52,594
-
401,718
(82,404)
319,314
-
-
-
-
66,105
-
(9,426)
56,679
47,235
26,728
(7,858)
66,105
324,331
435,741
-
(182,377)
577,695
381,094
49,980
10,599
(117,342)
324,331
dorsaVi Annual Report 2019
48
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 14:
PAYABLES
CURRENT
Unsecured liabilities
Trade payables
Contract liabilities
Sundry creditors and accruals
NOTE 15:
LEASE LIABILITY
2019
$
2018
$
228,668
228,901
1,070,347
579,434
214,192
276,309
1,513,207
1,084,644
On 15 November 2018, the Group entered into a 39-month property lease and elected to early adopt AASB 16: Leases.
The impact of the early adoption of this accounting standard was the recognition of a lease liability and a corresponding
non-current asset, Right of Use Asset, refer Note 13.
Future minimum lease payments and the present value of the net minimum lease payments:
- Not later than one year
- Later than one year and not later than 5 years
Total minimum lease payments
- Future finance charges
Present value of minimum lease payment
Current lease liability
Non-current lease liability
NOTE 16:
PROVISIONS
CURRENT
Employee benefits
NON-CURRENT
Employee benefits
160,000
268,449
428,449
(67,455)
360,994
125,524
235,470
360,994
-
-
-
-
-
-
-
-
340,133
381,782
25,106
41,858
(a) Aggregate employee benefits liability
365,239
423,640
dorsaVi Annual Report 2019
49
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 17:
SHARE CAPITAL
The Group’s share capital is as follows:
Ordinary Shares
Parent Equity
2019
Parent Equity
2018
No of Shares
$
No of Shares
$
Beginning of the financial year
Issued during the financial year
- Employee share scheme (i)
- Other shares issued (ii)
- Shares issued (iii)
- Cost of raising capital
End of the financial year
167,918,222
38,455,224
167,305,859
38,440,518
87,941
-
36,010,620
-
204,017,783
-
-
2,088,616
(162,125)
40,381,715
612,363
-
-
-
167,918,222
-
14,706
-
-
38,455,224
(i)
Shares Issued under the Employee Share Ownership Plan:
During the prior year performance rights previously granted to employees under the Employee Share Ownership Plan
(ESOP) vested into shares. The shares were issued for $Nil consideration.
(ii)
Other Shares Issued:
During the year a number of employees, previously issued shares under the ESOP repaid their non-recourse loans and took
possession of their share entitlement.
(iii)
Shares Issued in a Capital Raising:
During the year ended 30 June 2019, the Group issued 36,010,620 fully paid ordinary shares at $0.058 per share, under a 1
for 3 non-renounceable pro-rata rights offer to eligible shareholders, raising $2,088,616 before costs.
There was no capital raising during the prior year.
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 2019, management paid dividends of $Nil (2018: $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 22, Share Based Payments, for detailed disclosures.
dorsaVi Annual Report 2019
50
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 18:
RESERVES AND ACCUMULATED LOSSES
Share-based payment reserve
Foreign currency translation reserve
Notes
18(a)
18(b)
2019
$
692,619
(769,812)
(77,193)
2018
$
1,000,854
(269,447)
731,407
Accumulated losses
18(c)
(33,315,228)
(29,769,466)
(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 the balance is transferred to retained earnings when
options lapse.
(ii) Movements in reserve
(a) Share-based payment reserve
Balance at beginning of year
Employee share ownership plan
Transfers to retained earnings
Balance at end of year
(b) Foreign currency translation reserve
Balance at beginning of year
Exchange differences on translation of foreign operations
Balance at end of year
(c) Accumulated losses
Balance at beginning of year
Net loss attributable to members of dorsaVi Ltd
Transfer from share-based payment reserve
Balance at end of year
NOTE 19:
CASH FLOW INFORMATION
(a)
Reconciliation of Cash:
1,000,854
166,754
(474,989)
692,619
584,162
447,431
(30,739)
1,000,854
(269,447)
(500,365)
(769,812)
174,124
(443,571)
(269,447)
(29,769,466)
(26,073,132)
(4,020,751)
474,989
(33,315,228)
(3,727,073)
30,739
(29,769,466)
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
1,638,124
1,128,295
2,766,419
1,891,314
2,075,543
3,966,857
dorsaVi Annual Report 2019
51
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(b)
Reconciliation of Cash Flow used in Operations with Loss after Income Tax:
Loss from ordinary activities after income tax
(4,020,751)
(3,727,073)
2019
$
2018
$
Adjustments and non-cash items:
Amortisation
Depreciation
Write-off of goodwill
Share based payments
Movement in debtor provision
Foreign exchange differences on operating assets
Unrealised foreign currency differences through profit and loss
Changes in assets and liabilities:
Decrease in receivables
(Increase) / decrease in other assets
(Increase) / decrease in inventories
Increase in payables
(Increase) / decrease in R&D tax offset receivable
Increase / (decrease) in provisions
Cash flows used in operating activities
(c) Reconciliation of liabilities arising from financing activities:
Balance at the beginning of the year
New leases acquired
Interest accrued
Payments made
Balance at the end of the year
NOTE 20:
COMMITMENTS AND CONTINGENCIES
(a) Operating lease commitments
Non-cancellable operating leases contracted for but not capitalised in the
financial statements:
Payable
- Not later than one year
783,477
182,377
-
166,754
45,633
38,455
(538,820)
462,012
93,417
16,414
428,563
317,827
(58,401)
1,937,708
(2,083,043)
620,939
117,342
112,110
447,431
517
57,814
(501,385)
325,266
(151,086)
(18,376)
154,560
(43,031)
7,604
1,129,705
(2,597,368)
-
401,718
32,136
(72,860)
360,994
-
-
-
-
-
-
-
28,862
28,862
Description of leasing arrangement:
On 15 November 2018 the Group entered into a 39-month property lease and elected to early adopt AASB 16: Leases.
The impact of the early adoption of this accounting standard was the recognition of the lease liability in the balance sheet,
refer Note 15.
(b) Expenditure commitments
Acquisition of inventories, less than one year
Total expenditure commitments
291,102
291,102
(c) Contingent asset and liabilities
There are no contingent assets or contingent liabilities at balance date.
dorsaVi Annual Report 2019
-
-
52
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 21:
LOSS PER SHARE
Reconciliation of loss used in calculating loss per share:
Loss from continuing operations
Loss used in calculating basic loss per share
Loss used in calculating diluted loss per share
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
NOTE 22:
SHARE BASED PAYMENTS
(a)
Employee Shares
2019
$
(4,020,751)
(4,020,751)
(4,020,751)
2018
$
(3,727,073)
(3,727,073)
(3,727,073)
2019
No of Shares
2018
No of Shares
186,924,883
167,773,817
-
-
186,924,883
167,773,817
In 2013 the Board established an ESOP 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 Ltdi.
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 Ltd;
▪ To create a committed and united purpose between the employees and Directors and dorsaVi Ltd; and
▪ To add wealth for all shareholders of dorsaVi through the motivation of dorsaVi’s employees and Directors.
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 Ltd or a subsidiary of dorsaVi Ltd; or
▪ A Director of dorsaVi Ltd or a subsidiary of dorsaVi Ltd who holds a salaried employment or office in dorsaVi Ltd or a
subsidiary of dorsaVi Ltd; or
▪ A contractor engaged by dorsaVi Ltd 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.
(b)
Loan Shares and Options
The 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. Loan shares are treated as
options in accordance with accounting standards.
Loan 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.
During the year ended 30 June 2019 no options to ordinary shares or loan shares were granted to employees (2018: Nil).
During the year a total of 592,501 options were cancelled (2018: 78,333 options cancelled).
dorsaVi Annual Report 2019
53
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
(c)
Employee Performance Rights
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 30 June 2019, 87,941
(2018: 612,363) performance rights vested into shares. During the year ended 30 June 2019, 1,242,725 performance rights
lapsed (2018: 724,971). At 30 June 2019, 1,081,000 performance rights remain outstanding.
Details of shares, options and performance rights granted are as follows:
2019
Grant date
Expiry date
Exercise
price
Balance at
1/7/2018
Granted
during the
year
Vested
during the
year
Expired
during the
year
3-Jul-14
2-Sep-14
5-Nov-14
25-Feb-15
17-Aug-15
24-Mar-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
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
5-Jun-17
-
-
5-Nov-19
25-Feb-20
-
24-Mar-21
-
1-Oct-19
29-Nov-19
15-May-22
1-Oct-22
1-Oct-23
-
-
-
1-Oct-19
1-Jul-19
-
1-Oct-19
1-Jul-19
-
-
$0.46
$0.40
$0.40
$0.36
$0.26
$0.40
-
-
-
$0.33
$0.33
$0.33
$0.33
$0.33
-
-
-
-
-
-
-
-
250,000
100,000
20,000
80,000
500,000
200,000
150,000
150,000
450,000
550,000
55,000
133,333
133,334
350,000
39,000
39,000
117,000
275,000
275,000
500,000
83,334
333,332
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,250
-
-
-
-
-
-
-
9,775
-
-
56,500
-
-
10,416
-
250,000
100,000
-
30,000
500,000
-
138,750
-
-
-
-
109,167
133,334
350,000
29,225
-
-
218,500
150,000
300,000
72,918
333,332
Balance at
30/6/2019
Exercisable at
year end
-
-
-
-
20,000
50,000
20,000
50,000
-
-
200,000
-
150,000
450,000
550,000
55,000
24,166
-
-
-
39,000
117,000
-
125,000
200,000
-
-
100,000
-
-
-
550,000
55,000
24,166
-
-
-
-
-
-
-
-
-
-
TOTAL
4,783,333
-
87,941
2,715,226
1,980,166
799,166
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 1.27
years.
▪ The weighted average share price for performance rights vesting into shares during the year was $Nil (2018: $Nil).
▪ There were no options exercised during the year (2018: none exercised).
▪ The fair value was determined using the binomial tree method or the Black-Scholes option-pricing models:
a. The share price at grant date ranged from: $0.26 to $0.46
b. Expected price volatility of the Group’s shares: 80%
c. Dividends: $Nil
d. Risk free interest rate: 1.81% to 2.50%
dorsaVi Annual Report 2019
54
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
2018
Grant date
Expiry date
Exercise
price
Balance at
1/7/2017
Granted
during the
year
Vested
during the
year
Expired
during
the year
Balance at
30/6/2018
Exercisable at
year end
3-Jul-14
2-Sep-14
5-Nov-14
25-Feb-15
17-Aug-15
24-Mar-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
5-Nov-19
25-Feb-20
17-Aug-20
24-Mar-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-17
1-Oct-18
1-Oct-19
1-Jul-19
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
$0.36
$0.26
$0.40
-
-
-
-
$0.33
$0.33
$0.33
$0.33
$0.33
-
-
-
-
-
-
-
-
-
-
-
-
250,000
100,000
20,000
80,000
500,000
200,000
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
6,199,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
75,000
-
-
-
-
-
-
-
-
54,050
-
-
-
250,000
202,063
-
-
-
31,250
-
-
612,363
-
-
-
-
-
-
75,000
-
-
-
-
78,333
-
-
-
24,950
-
-
-
-
147,937
75,000
75,000
275,000
52,084
-
-
803,304
250,000
100,000
20,000
80,000
500,000
200,000
-
150,000
150,000
450,000
550,000
55,000
133,333
133,334
350,000
-
39,000
39,000
117,000
-
-
275,000
275,000
500,000
-
83,334
333,332
4,783,333
250,000
100,000
20,000
80,000
500,000
100,000
-
-
-
-
550,000
55,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,655,000
(d)
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:
Share options
Performance rights
Total expenses recognised from share-based payment transactions
2019
$
891
165,863
166,754
2018
$
54,943
392,488
447,431
dorsaVi Annual Report 2019
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
UK
USA
AUS
2019
%
100
100
100
2018
%
100
100
100
▪ 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:
There were no transactions with associates or their entities during the year ended 30 June 2019. In the prior year, dorsaVi
Ltd sold its 25% ownership of Superspine Forrest Hill Unit Trust and it ceased to be an associate of dorsaVi Ltd. The
transaction was settled in full in July 2018.
(b)
Transactions with Directors, Key Management Personnel and Other Related Parties:
During the year ended 30 June 2019, dorsaVi Ltd paid $34,276 (2018: $54,120) to Starfish Technology Fund II, LP on behalf
of Michael Panaccio for director’s fees.
Starfish Ventures Pty Ltd is considered a related party in accordance with the definition under AASB 124: Related Parties.
During the first five months of the year ended 30 June 2019, Starfish Ventures Pty Ltd leased property and charged rent to
dorsaVi Ltd. Total value of these rental charges was $83,570 (2018: $109,346). The rent was charged to dorsaVi Ltd on
normal terms and conditions. The balance outstanding at balance date was $Nil (2017: $15,047). The Rental arrangement
ceased in November 2018.
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)
2019
$
116,236
116,236
18,727
18,727
134,963
2018
$
94,000
94,000
23,450
23,450
117,450
dorsaVi Annual Report 2019
56
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
NOTE 25:
PARENT ENTITY INFORMATION
(a) Summarised statement of financial position
Assets:
Current assets
Non-current assets
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity:
Share capital
Share-based payment reserve
Accumulated losses
Total equity
(b) Summarised statement of comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
NOTE 26:
SEGMENT INFORMATION
(a)
Description of Segments
2019
$
2018
$
17,818,775
4,647,610
22,466,385
17,886,039
4,208,584
22,094,623
2,146,073
25,106
2,171,179
20,295,206
1,888,928
41,858
1,930,786
20,163,837
40,381,715
692,619
(20,779,128)
20,295,206
38,455,224
1,000,854
(19,292,241)
20,163,837
(1,961,876)
(1,504,721)
-
-
(1,961,876)
(1,504,721)
For the year ended 30 June 2019, management has differentiated operating segments based on product (2018: operating
segments were based on geographical areas and regulatory environments). Prior period comparatives have been adjusted
to reflect segment reporting based on product categories.
The Group’s chief operating decision maker has identified the following reportable segments:
▪ Segment 1: Clinical;
▪ Segment 2: Workplace; and
▪ Segment 3: Projects.
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. Assets and liabilities are reported to
management on a consolidated basis.
(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 during the year.
dorsaVi Annual Report 2019
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:
2019
Segment revenue:
Segment revenue from external source
Non-segment revenue
Total revenue
Segment result:
Segment result from external source
Non-segment revenue
Non-segment expenses
Income tax benefit
Loss from continuing operations
2018
Segment revenue:
Segment revenue from external source
Non-segment revenue
Total revenue
Segment result:
Segment result from external source
Non-segment revenue
Non-segment expenses
Income tax benefit
Loss from continuing operations
Revenue by geographic location:
2019
Revenue by geographic location
Total revenue from external source
2018
Revenue by geographic location
Total revenue from external source
(c)
Major Customers
Clinical
$
Workplace
$
Projects
$
Total
$
1,336,817
-
956,624
-
221,551
-
2,514,992
708,877
3,223,869
1,086,076
816,371
-
-
-
-
-
-
163,948
-
-
-
2,066,395
708,877
(7,362,672)
566,649
(4,020,751)
1,478,898
1,954,450
-
-
-
-
3,433,348
960,923
4,394,271
1,171,651
1,388,072
-
-
-
-
-
-
-
-
-
-
2,559,723
960,923
(8,161,390)
913,671
(3,727,073)
Australia
$
Europe
$
USA
$
Total
$
1,608,442
1,608,442
290,607
290,607
1,324,820
1,324,820
3,223,869
3,223,869
2,415,744
2,415,744
725,568
725,568
1,252,959
1,252,959
4,394,271
4,394,271
In 2019 and 2018 no customer contributed greater than 10% of the Group’s total revenue.
NOTE 27:
SUBSEQUENT EVENTS
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.
dorsaVi Annual Report 2019
58
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 27 to 58 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 2019 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 2019.
This declaration is made in accordance with a resolution of the directors.
Greg Tweedly
Chairman
Andrew Ronchi
Director and CEO
Melbourne
Date: 29 August 2019
Melbourne
Date: 29 August 2019
dorsaVi Annual Report 2019
59
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pitcher.com.au
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(cid:3)
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(cid:296)(cid:396)(cid:381)(cid:373)(cid:3)
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(cid:3)
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(cid:3)
(cid:3)
(cid:3)
(cid:361)(cid:437)(cid:282)(cid:336)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)
•(cid:3)
(cid:3)
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•(cid:3) (cid:75)(cid:271)(cid:410)(cid:258)(cid:349)(cid:374)(cid:349)(cid:374)(cid:336)(cid:3) (cid:258)(cid:374)(cid:3) (cid:437)(cid:374)(cid:282)(cid:286)(cid:396)(cid:400)(cid:410)(cid:258)(cid:374)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3) (cid:381)(cid:296)(cid:3) (cid:410)(cid:346)(cid:286)(cid:3) (cid:258)(cid:272)(cid:272)(cid:381)(cid:437)(cid:374)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)
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pitcher.com.au
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•(cid:3)
•(cid:3)
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pitcher.com.au
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pitcher.com.au
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pitcher.com.au
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pitcher.com.au
dorsaVi Ltd and controlled entities
ABN: 15 129 742 409
Shareholder Information
Corporate Governance:
The Group’s Corporate Governance Statement can be obtained at https://www.dorsavi.com/au/en/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 15 August 2019.
The Group’s share capital was as follows:
Type of Security:
Ordinary Shares
Options
Performance Rights
Substantial Holders:
Names of Holders
Starfish Technology Fund II, LP, Starfish Ventures, Michael Panaccio and
Cristiana Panaccio and Micana Family Trust
Unmarketable Parcels:
Number of
Securities
204,016,783
829,166
1,081,000
Number of
Holders
650
3
4
Number of
Shares Held
% of Total
Shares
90,280,662
44.25%
Based on the closing market price on 15 August 2019, there were 264 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 829,166 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 1,081,000 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.
dorsaVi Annual Report 2019
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.
Distribution Schedule:
Number of Shares
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 – 100,000
100,001 and above
Total
dorsaVi Ltd’s Top 20 Shareholders:
Set out below is a schedule of the 20 largest holders of each class of securities quoted.
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
STARFISH TECHNOLOGY FUND II LP
STARFISH TECHNOLOGY FUND II NOMINEES A PTY LTD
STARFISH TECHNOLOGY FUND II NOMINEES B PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
AR BSM PTY LTD
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