Connecting clinicians and consumers
GLOBAL HEALTH LIMITED CO NSO LIDAT E D EN TIT Y
ANNU AL REPORT 2 0 15
Table
of
Contents
GLOBAL HEALTH LIMITED CO NSO LIDAT E D EN TIT Y
GLOBAL HEALTH LIMITED CO NSO LIDAT E D EN TIT Y
ANNU AL REPORT 2 0 15
ANNU AL REPORT 2 0 15
Review of operations
Your Directors submit their report for the financial year ended 30 June 2015.
CHAIRMAN’S LETTER
Dear Shareholders,
I am pleased to report that the Company achieved a Net Profit after Tax in excess of $1m in a very
challenging and transformational year.
Last year’s Annual General Meeting outlined the Company’s initiative to move to a cloud-based services
model (Software-as-a-Service / SaaS). Whilst the Company is part way through this transition from an
On-Premises model to SaaS model, early indications are that the take up is being well received. Providing
the Company’s solutions as a Cloud service, is enabling healthcare businesses to realise significant
improvements and reduce the costs associated with running their businesses. The SaaS model is also
presenting opportunities for the Company on an international level.
The Company’s acquisition of healthcare software vendor Abaki Pty Ltd announcement in July 2015, has
extended the Company’s offering in the healthcare sector, whilst bolstering its development and support
capability with an offshore centre in Vietnam.
The Company is also progressing its legal action against SA Health for breaches of contract and
infringements of copyright by the State of South Australia, arising from the State’s continuing use of the
Company’s Chiron Patient Administration System software and Harmony Financial System software after the
State’s licence to use expired on 31 March 2015. These events impacted the Company’s gross revenue and
corresponding net profit for the full year.
Thanks again to all our employees and my fellow Board Members for their loyalty and ongoing commitment
to the achievement of the Company’s goals.
As always, the Board continues to look for ways to grow shareholder value and we also thank you,
our shareholders, for your continued support.
Yours faithfully,
Steven Leigh Pynt
Non-Executive Chairman
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FINANCIAL SUMMARY
Your Directors submit their report for the financial year ended 30 June 2015. The Previous Corresponding
Period (PCP) for this report is the twelve months to 30 June 2014.
Summary
· Increasing customer base across MasterCare ePAS, MasterCare EMR and ReferralNet
· Over 500 new customers further reducing reliance on few bulky clients
· Net Profit After Tax of $1,059,907
· EPS of 3.24 cents per share in line with guidance announced in November 2014
Operational Review
The Company’s core Operational Revenue is
derived from the sale of software licences and
annual subscriptions to:
· Overnight and Day Hospitals (the acute or
Hospital sector) and,
· Specialists, General Practitioners,
Community Health and Allied Health
Providers (the non-acute or Community
sector).
An AusIndustry Research and Development
Grant of $531,896 represents the bulk of Other
Revenue received in the reporting period.
Revenue
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Hospitals
Community
Other
2013
2014
2015
2,287,973
2,593,842
1,650,504
1,720,747
2,119,686
2,306,270
535,043
537,559
582,335
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Hospital Segment Customers
Customers operating in the Hospital segment are those that use the Company’s Patient Administration
System (PAS) to manage patient workflow from pre-admission through to discharge including the
management of beds, theatres, medical records, billing and receipting.
During the reporting period, the final remaining contract for the use of the Company’s superseded CHIRON
PAS expired on 31 March 2015. This contract provided for the use of CHIRON PAS at 68 public hospitals
across South Australia.
Over the reporting period, the Company implemented MasterCare ePAS (enhanced Patient Administration
System) at four new private hospitals consolidating its position as a leading provider of Hospital PAS
systems to the private sector in Australia.
The maturity of the Company’s MasterCare ePAS and the focus on software as a subscription commodity
has resulted in lower average revenue per client because of the minimal customisation and implementation
services. In combination with the conclusion of the 20-year legacy contract with SA Health in this reporting
period, overall revenue from Hospital customers decreased by $943,338 (-36%).
The 36% revenue decline resulted in a 9% drop in operating margins for this segment, to a 70% operating
margin pre-R&D (PCP: 79%). This ratio validates the Company’s ‘commodity subscription’ model and augers
well for a strong earnings contribution in the future as new customers are acquired.
Community Segment Customers
Customers operating in this segment are those that use the Company’s ReferralNet connectivity platform
and MasterCare clinical and practice management systems in community settings.
Revenue from this segment grew by approximately 9% with MasterCare and ReferralNet both contributing
equally to the growth. The growth was lower than normal due to a major re-organisation of community
health services by the Commonwealth effective from 1 July 2015. This uncertainty inhibited new buying
decisions from Community Health providers due to the heavy involvement of the public sector in this
segment.
Operations related to the Community Segment delivered a 43% (PCP: 51%) operating margin excluding
R&D. The reduction in margins is largely through the initiation of ‘freemium’, try-before-you-buy models
of customer acquisition which provide a risk-free trial period to new customers who are converted to paid
(‘premium’) subscriptions in future periods.
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Earning and Margins
Earnings and Margins
Operating expenses decreased by $278,791
(-8.4%) over the reporting period with staffing
levels maintained at around 30 full-time
equivalents.
The Company’s EBITDA Margin reduced by
5% to 27% while NPAT (Net Profit After Tax)
margins reduced by 4% to an acceptable
23%. This represents Earnings Per Share
(EPS) of 3.24 cents for the reporting period.
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Jun-13
Jun-14
Jun-15
Revenue
$4,543,763
$5,251,086
$4,539,109
Operating Expense
$3,379,338
$3,591,600
$3,312,810
EBITDA
$1,164,425
$1,659,486
$1,226,299
EBITDA Margin
26%
32%
27%
NPAT
$1,096,848
$1,443,513
$1,059,907
NPAT Margin
24%
27%
23%
Cash + Net Receivables
1,000,000
800,000
600,000
400,000
200,000
0
Jun-13
Jun-14
Jun-15
Cash + Net Receivables
552,031
951,526
762,004
Financial Position
At 30 June 2015, the Company had Net
Assets of $3,628,006 – an improvement of
$952,954 from 30 June 2014. Closing cash
plus Net Receivables was down $189,522
(-20%) to $762,004.
The major current liability is represented by
Unearned Income of $1,029,282 representing
non-refundable Annual Licence Fees (ALFs)
paid in advance.
In addition to a ‘Right-to-Use’ Licence, the
ALF entitles customers to help desk services,
software updates and upgrades and is
consequently recognised as pro-rata revenue
at the end of each month.
Other than the remaining balance of short to
medium term funding for the new head office
fit-out of $67,923, the Company has no debt.
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FORWARD OUTLOOK
In line with market trends, the Company is mid-way through a transition from higher-priced, customised
product, and process intensive project implementation services to a more volume-based, commodity model
based on Commercial-off-the-Shelf (COTS) products delivered as a managed, cloud service (‘Software-as-a-
Service/SaaS’).
The SaaS model reduces the reliance on few high-value clients requiring physical proximity, to a broader
base of lower-value, remote clients that can access commodity-based software as a service, with no or
minimal implementation services.
This model will provide improved margins over the long term as scale is achieved.
The transition from high-value On-Premises to Software as a Service is targeted to be completed by 2017.
In support of the longer-term growth objectives, the Company continues to invest approximately 20% of
total revenue to the research and development of a connected healthcare eco-system that is consumer
centric and offered as a Software Service in the Cloud, across multiple devices.
The provision of integrated Cloud applications that connect clinicians and consumers is based on
‘Streamlining the Patient Journey’. This is the focus of our R&D activity with the initial early adopter in the
community segment implemented in May 2015.
Three additional early adopters in the hospital segment are in various states of implementation as the next
phase which will trial further functionality and features.
Early feedback has been overwhelmingly positive with considerable productivity gains, improved decision-
support and enhanced user experiences for all stakeholders - administrators, clinicians and patients. These
pilot projects will integrate our MasterCare Health Provider platform to our LifeCard Patient platform and
ReferralNet connectivity platform offering customers a single comprehensive technology partner for the
emerging connected healthcare eco-system.
Standards-based Inter-connectivity is inherent across all Global Health products enabling our customers to
seamlessly integrate to best-of-breed and pre-existing software investments.
Over the past 15 months, the Company has commenced business development activities overseas with an
initial focus on our ASEAN neighborhood. In July, the Company announced the acquisition of Abaki Pty Ltd
- a well-regarded Australian healthcare software vendor with over 400 customers and offshore development
and support capability in Vietnam.
The provision of integrated Cloud applications extends the Company’s sales reach to the global marketplace
and significant new revenue opportunities in subsequent years.
Enquiries can be directed to Mathew Cherian, Chief Executive Officer, on +61 3 9675 0600 or alternatively
by email to mathew.cherian@global-health.com.
For and on behalf of Global Health Limited,
Mathew Cherian
Chief Executive Officer and Managing Director
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MasterCare ®
A business and clinical solution that supports
healthcare delivery across acute and non-acute sectors
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Directors’ Report
Your Directors present their report on Global Health Limited consolidated entity (‘Group’)
for the financial year ended 30 June 2015.
DIRECTORS
The following persons were Directors of Global Health Limited during the whole of the financial year and up
to the date of this report (except where indicated otherwise):
1. Steven L. Pynt LLB, BBus, MBA, MTax Age 57
Independent Non-Executive Chairman
Mr Pynt has been an independent non-executive director since 2000 and Chairman since 2005.
Mr Pynt is Managing Director of Muzz Buzz Franchising Pty Ltd, a drive through coffee store franchisor.
Other Listed Company Current Directorships
Ephraim Resources Limited
Richfield International Limited
Gondwana Resources Limited
Former Directorships in the last 3 years
South East Asia Resources Limited
Special Responsibilities
Chairman of the Board
Member of Audit Committee
2. Mathew Cherian BBus (IS/IT), MACS, MAICD Age 58
Chief Executive Officer
Mr Cherian has been in the information technology industry since 1981. In 1985 he established Working
Systems Pty Ltd in Perth, Western Australia.
Mr Cherian was appointed CEO of Working Systems Solutions Limited in January 2002, to re-focus the
Group as a software product developer for the Healthcare sector. The initial phase culminated with the
re-branding of the Company as Global Health Limited in December 2007.
Mr Cherian plays an active role in product strategy and the development of overseas markets for
the Company.
Other Current Directorships
None
Former Directorships in the last 3 years
None
Special Responsibilities
Managing Director
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3. Grant Smith Age 62
Independent Non-Executive Director
Mr Smith has worked in insurance, superannuation, investment and funds management for over 30
years. He started with National Mutual (now AMP) in the investments division and was responsible for
the establishment of the funds management business for National Mutual.
In 1984 he established an independent funds management group and floated Hospitals of Australia –
the first healthcare investment fund in Australia. Hospitals of Australia owned and operated a number of
hospitals throughout Australia. Mr Smith was intimately involved in the building of a number of hospitals
including Strathfield Private, Southern Highlands Private Hospital, Port Macquarie Hospital and the
refurbishment of a number of other healthcare facilities. Hospitals of Australia was ultimately acquired
by Mayne Nickless Limited.
In the past 15 years Mr Smith developed and built the Medica Centre and opened the first digital
(paperless) private surgical hospital in Australia. He is currently involved in developing new hospitals in
Sydney, Melbourne, Shanghai, Papua New Guinea and Canada.
Mr Smith is also involved in utilising digital technology to generate productivity for the healthcare sector.
Other Listed Company Current Directorships
None
Former Directorships in the last 3 years
None
Special Responsibilities
Member of Audit Committee
4. Robert Knowles, AO Age 68
Independent Non-Executive Director
Mr Knowles is a director of the Silver Chain Group of Companies, IPG Pty Ltd and Drinkwise
Australia Ltd.
He is also a Commissioner with the National Mental Health Commission, Chair of the Royal Children’s
Hospital and Chair of the Victorian Health Innovation and Reform Council.
Other Listed Company Current Directorships
None
Former Directorships in the last 3 years
None
Special Responsibilities
None
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5. Peter Curigliano BBus (Accounting), CPA Age 47
Chief Financial Officer and Company Secretary
Mr Curigliano has in excess of 20 years’ experience in corporate accounting including financial and
business planning and compliance and taxation. He was appointed Chief Financial Officer in October
2007 after joining the Company as Financial Controller in May 2004.
Mr Curigliano is also the Company Secretary and has held this position since October 2005. In this
role he is responsible for the Company’s continuous disclosure requirements, preparation of the
Annual Report, Annual General Meetings and announcements to the share market.
Other Listed Company Current Directorships
None
Former Directorships in the last 3 years
None
MEETING OF DIRECTORS AND COMMITTEES
The number of meetings of the Company’s Board of Directors and of each Audit committee held, whereby
members could attend in their capacity during the year ended 30 June 2015, and the number of meetings
attended by each Director were:
Directors Meetings
Audit Committee Meetings
Number of Meetings
Attended
Number of Meetings
eligible to attend
Number of Meetings
Attended
Number of Meetings
eligible to attend
M Cherian
S L Pynt
G Smith
R Knowles
5
5
5
4
DIRECTORS’ INTERESTS
5
5
5
5
-
1
1
-
-
1
1
-
Relevant interests of the Directors and their closely related parties in the shares of the Company at the date
of this report are:
M Cherian
S L Pynt
G Smith
R Knowles
Total
Ordinary Shares
18,619,370
232,408
280,000
20,000
19,151,778
There are no options currently issued to Directors.
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PRINCIPAL ACTIVITIES
During the year the principal activities of the Group consisted of:
1. The development, sales and support of application software for the healthcare sector; and
2. The development of systems integration software that enables data to be securely exchanged between
multiple, disparate software applications within an enterprise and across the healthcare value chain.
RESULTS AND DIVIDENDS
Operating Results
The profit of the Group for the financial year after providing for income tax and eliminating non-controlling
equity interests amounted to $1,059,907 (2014: $1,443,513).
Dividends
No dividends have been declared or paid on the ordinary shares for the financial year ended 30 June 2015.
REVIEW OF OPERATIONS
Information on the operations and financial position of the Group and its business strategies and prospects
is set out in the ‘Chief Executive Officer’s Operations Report’ section of this Annual Report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There are no significant changes in the state of affairs of the Group during the financial year ended 30 June
2015 and up to the date of this report.
SIGNIFICANT EVENTS AFTER REPORTING DATE
On 29 July 2015, the Company finalised the acquisition of the medical software business and associated
assets of Abaki Pty Ltd. The maximum consideration of $500,000 in 4 equal parts of cash and Global Health
shares will take place over 37 months. The cash component will be funded out of working capital.
LIKELY DEVELOPMENTS
The Group will continue to pursue its policy of increasing the profitability and market share of its major
business sectors during the next financial year.
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SHARE OPTIONS
At the date of this report, the unlisted ordinary shares of Global Health Limited under option are:
Date of Expiry
Exercise Price per option
Number Under Option
Date of Issue
10 June 2015
5 July 2013
10 June 2020
5 July 2018
19 December 2013
19 December 2018
26 May 2014
26 May 2019
$0.65
$0.15
$0.65
$0.75
390,000
300,000
690,000
300,000
1,680,000
There were no share options which expired during the financial year.
REMUNERATION REPORT
Principles used to determine the nature and amount of remuneration
Remuneration of Directors and key management personnel of the Company is established by the Board.
Remuneration is determined as part of an annual performance review, having regard to market factors and
a performance evaluation process. The remuneration framework is designed to align executive reward with
achievement of strategic objectives and the creation of value of shareholders, and conforms to market best
practice for delivery of reward. For Directors and executives, remuneration packages generally comprise
salary and superannuation. Executives are also provided with longer-term incentives through the employee
share and share option schemes, which act to align the executive’s actions with the interests of the
shareholders. Non-Executive Directors are not entitled to performance-based bonuses.
The Board meets annually to review its own performance. The Chairman also holds individual discussions
with each Director to discuss their performance. The Non-executive Directors are responsible for evaluating
the performance of the Chief Executive Officer, who in turn evaluates the performance of all other senior
executives. These evaluations are based on specific criteria, including the Group’s business performance
and achievement of turnover and NPAT (Net Profit After Tax) targets, whether long-term strategic objectives
are being achieved and the achievement of individual performance objectives.
· Non-Executive Directors’ remuneration
Fees and payments to Non-executive Directors reflect the demands which are made on, and the
responsibilities of, the Directors. Non-executive Directors’ fees and payments are reviewed annually by
the Board to ensure all payments are appropriate and in line with the market. The maximum amount
of remuneration as determined by shareholders at the Company’s Annual General Meeting on 24
November 2009 is $350,000 per annum which may be divided among Non-executive Directors in the
manner determined by the Board from time to time. The Chairman’s fees are determined independently
to the fees of Non-executive Directors based on comparative roles in similar sized companies and
sectors in the external market. The Chairman is not present at any discussions relating to determination
of his own remuneration.
· Executive Directors’ remuneration
The Executive Directors’ salary and conditions are determined by the Board of Directors and reviewed
at the expiry of each contract period.
· Executive remuneration
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards.
Base pay for senior executives is reviewed annually to ensure the executive’s pay is competitive with
the market. There is no guaranteed base pay increases included in any senior executive’s contract.
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Details of Remuneration
Details of the remuneration of the Directors and the key management personnel of Global Health Limited
are set out in the following table:
Short-Term
benefits
Performance
related
Post-
Employment
Benefits
Other long
term benefits
Share-based
Payment
Salary and
or Fees
$
Bonus
$
Superannuation
$
Accrued Long
Service Leave
$
Shares
$
Total
$
41,284
278,526
32,037
32,037
165,159
122,209
671,252
41,284
277,376
24,554
22,693
Key Management Personnel:
-
-
-
-
-
-
-
3,922
23,881
3,043
3,043
15,688
11,610
61,187
-
4,187
-
-
2,751
-
6,938
-
-
-
-
-
-
-
45,206
306,594
35,080
35,080
183,598
133,819
739,377
Short-Term
benefits
Performance
related
Post-
Employment
Benefits
Other long
term benefits
Share-based
Payment
Salary and
or Fees
$
Bonus
$
Superannuation
$
Accrued Long
Service Leave
$
Shares
$
Total
$
Key Management Personnel:
P Curigliano
K Jayesuria3
TOTAL
175,138
70,938
611,983
-
25,000
-
-
-
-
25,000
3,819
23,252
2,271
2,099
16,200
6,562
54,203
-
4,751
-
-
3,124
-
7,875
-
-
-
-
-
-
-
45,103
330,379
26,825
24,792
194,462
77,500
699,061
2015
Name
Directors:
S L Pynt
M Cherian
G Smith
R Knowles
P Curigliano
K Jayesuria
TOTAL
2014
Name
Directors:
S L Pynt
M Cherian
G Smith1
R Knowles2
1 Appointed as director on 25 September 2013.
2 Appointed as director on 15 October 2013.
3 Commenced employment on 11 November 2013.
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Service Agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements with a fixed term of three years except as noted. It is Company policy that employment
contracts contain provisions for termination with notice or payment in lieu thereof and for termination by the
Company without notice for serious misconduct and breach of contract. The Managing Director is entitled to
receive a termination payment in addition to notice where the Company terminates employment on grounds
of illness or incapacity.
The notice period required to be given by the employee or the Company along with any termination
payments are set out in the table below.
Notice period by Company
Notice period by Employee
Termination Payments
Managing Director
M Cherian
Chief Financial Officer
P Curigliano
Technology Delivery Manager
K Jayesuria
6 months
6 months
6 months*
1 month
1 month
1 month
1 month
None
None
* if termination is by reason of the employee’s illness or incapacity.
Shares and Options granted to directors and officers of the Company
Number of shares issued
Number of options granted
Key Management Personnel
P Curigliano
K Jayesuria
2015
-
-
2014
-
-
2015
-
-
2014
300,000
300,000
During the financial year and up to the date of these accounts, the Company, on 10 June 2015, issued
390,000 unlisted employee options to two employees of the Company with an exercise price of 65 cents
per option.
During the previous financial year, the Company issued the following unlisted employee options to
employees of the Company: (a) on 5 July 2013, 300,000 options to one employee with an exercise price of
15 cents per option; (b) on 19 December 2013, 690,000 options to three employees with an exercise price
of 65 cents per option; and (c) on 26 May 2014, 300,000 options to one employee with an exercise price of
75 cents per option.
All of the unlisted employee options vest in equal one-third parts every 12-months over a period of 36
months from their respective dates of issue and all will expire five years after their respective dates of issue.
During the financial year and up to the date of this report, nil options have been exercised.
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INDEMNIFICATION OF DIRECTORS AND EXECUTIVES OR AUDITORS
During or since the end of the financial year, the Group has not, in any respect for any person who is or has
been an officer or director of the parent entity or a related body corporate, indemnified or made any relevant
agreement for indemnifying against a liability, including costs and expenses in successfully defending legal
proceedings.
During or since the end of the financial year the Group has paid premiums in respect of a contract insuring
the Directors and officers of all companies in the Group against a liability incurred in their role as Directors
and officers of all companies within the Group except where:
i. The liability arises out of conduct involving a wilful breach of duty; or
ii. There has been a contravention of Sections 232(5) or (6) of the Corporations Act 2001.
The total amount of premiums paid by the Group for Directors and Officers Liability Insurance was $24,171
(2014: $31,948).
PROCEEDINGS ON BEHALF OF THE COMPANY
The Company’s wholly-owned subsidiary, Working Systems Software Pty Ltd commenced legal
proceedings against the Crown in right of the State of South Australia by filing originating process in the
Adelaide Registry of the Federal Court of Australia on 11 June 2015. Working Systems Software Pty Ltd
claims breaches of contract and infringements of copyright by the State of South Australia, arising from
the State’s continuing use of the Company’s Chiron Patient Administration System software and Harmony
Financial System software after the State’s licence to use expired on 31 March 2015. Working Systems
is seeking damages, declarations and a permanent injunction restraining the State from continuing to use
Chiron and Harmony. The South Australian Minister for Health has indicated the State’s intention to rely upon
the Crown’s compulsory licensing regime for Commonwealth and State governments under the Copyright
Act 1968 (Cth) which Working Systems contends does not apply to computer programs.
NON-AUDIT SERVICES
The Group had a need to employ the auditor on assignments additional to their statutory audit duties as
detailed in Note 23.
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
satisfied that the services disclosed in Note 23 did not compromise the external auditor’s independence for
the following reasons:
- all non-audit services are reviewed and approved by the Board of Directors prior to the commencement
to ensure they do not adversely affect the integrity and objectivity of the auditor; and
- the nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
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ENVIRONMENTAL ISSUES
As the operations of the Group are limited to computer software development and support and professional
consulting services, the Group has minimal involvement in and exposure to environmental risks and issues.
The Group is not required to comply with any specific Act.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
the Company support and have adhered to the principles to the extent outlined in the corporate governance
statement. The Company’s corporate governance statement is contained in a separate section of this
Annual Report.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act
2001 accompanies and forms part of this report.
Signed in accordance with a resolution of the Directors.
Steven Leigh Pynt
Non-Executive Chairman
Melbourne, 29 September 2015
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ReferralNet
A cloud-based platform for connectivity across
the healthcare sector
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Governance Statement
Global Health Limited (the Company) and the Board are committed to achieving and demonstrating the
highest standards of corporate governance. Accordingly, unless stated otherwise in this document,
the Board’s corporate governance arrangements comply with the recommendations of the ASX Corporate
Governance Council (including the 2014 amendments) as well as current standards of best practice for
the entire financial year ended 30 June 2015.
The Company and its controlled entities together are referred to as the Group in this statement.
The Board of Directors of the Company is responsible for the corporate governance of the Group. The Directors
are responsible to the shareholders for the performance of the Group in both the short and the longer term and
seek to balance sometimes competing objectives in the best interests of the Group as a whole. The Board is also
responsible for setting the strategic direction and establishing the policies of the Group. The focus is to enhance
the interests of shareholders and other key stakeholders and to ensure the Group is properly managed.
Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy
initiatives are formally delegated by the Board to the Managing Director and senior executives.
A description of the Company’s main corporate governance practices is set out below. All these practices,
unless otherwise stated, were in place for the entire year.
Global Health Limited is listed on the Australian Securities Exchange (ASX). Accordingly, unless
stated otherwise in this document, the Board’s corporate governance arrangements comply with the
recommendations of the ASX Corporate Governance Council (including the 2014 amendments) as well as
current standards of best practice for the entire financial year ended 30 June 2015.
Ethical Standards
The Board is committed to its core governance values of integrity, respect, trust and openness among and
between board members, management, employees, customers and suppliers. These values are enshrined
in the Board’s Code of Conduct policy.
The Code of Conduct policy requires all directors, management and employees to, at all times:
· act honestly and in good faith;
· exercise due care and diligence in fulfilling the functions of office;
· avoid conflicts and make full disclosure of any possible conflict of interest;
· comply with both the letter and spirit of the law;
· encourage the reporting and investigation of unlawful and unethical behaviour; and
· comply with the share trading policy outlined in the Code of Conduct.
Directors are obliged to be independent in judgment and ensure all reasonable steps are taken to ensure that
the Board’s core governance values are not compromised in any decisions the Board makes.
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Diversity Policy
Diversity includes, but is not limited to, gender, age, ethnicity and cultural background. The Company is
committed to diversity and recognises the benefits arising from employee and Board diversity and the
importance of benefiting from all available talent.
The policy outlines requirements for the Board to develop measurable objectives for achieving diversity,
and annually assess both objectives and the progress in achieving those objectives. As Director and senior
executive positions become vacant and appropriately qualified candidates become available, the Board has
developed the following objectives:
· Achieve a diverse and skilled workforce leading to continuous improvement;
· The development of clear criteria for behavioural expectations in relation to promoting diversity in the
work environment;
· Ensure that personnel responsible for recruitment take diversity issues into account when considering
vacancies;
· Create a work environment that values and utilises the contributions of employees with diverse
backgrounds, experiences and perspectives;
· Create awareness in all employees of their rights and responsibilities with regards to fairness, equity
and respect for all aspects of diversity
The Board believes it has been successful in implementing these objectives throughout the Company’s
workforce and continues to monitor and assess the Company’s efforts in this regard.
The number of women employed by the Company and their employment classifications are as follows:
2015
2014
Number
Percentage
Number
Percentage
Women on the Board
Women in senior management
Women employees in the Company
-
1
10
0%
12%
37%
-
3
11
0%
38%
34%
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COMPOSITION OF THE BOARD
There were four directors on the Board at any one time throughout the year. Of these, three were non-
executive directors and one was executive director – the latter being the Managing Director/Chief Executive
Officer. Each year one-third of directors and any director (excluding the Managing Director) who has held
office for three years or three annual general meetings (whichever is longer) must retire from office. A retiring
director is eligible to seek re-election if so minded.
The skills, experience and expertise relevant to the position of each director who is in office at the date of the
Annual Report and their term of office are detailed in the Directors’ Report. The Board strives to achieve a mix
of commercial, financial, legal, management, health industry and IT skills and experience among its members.
The composition of the Board is determined in accordance with the following principles and guidelines:
· The Board should comprise at least three Directors and should maintain a majority of independent and
Non-executive Directors;
· The Chairman must be an independent and Non-executive Director;
· The roles of Chief Executive Officer and Chairman must not be performed by the same individual;
· The Board should comprise Directors with an appropriate range of qualifications and expertise; and
· The Board shall meet regularly and have available all necessary information to participate in an informed
discussion of all agenda items.
When considering potential candidates for directorship, the Board assesses qualified professionals and
experienced business people in industry. The Company does not engage any consultants to source potential
Board members, but relies on the Directors’ industry contacts to identify potential candidates based on an
individual’s professional and business reputation, health care services industry experience and other areas
of expertise. The Company seeks to maintain a diverse range of members of the Board by having only one
director drawn from any one professional background at any one time.
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BOARD MEMBERS
The Directors in office at the date of this statement are:
Name
Mr S L Pynt
Mr M Cherian
Mr G Smith
Position
Non-executive Chairman
Chief Executive Officer and Managing Director
Non-executive Director
Mr R Knowles AO
Non-executive Director
There are three Non-executive Directors who are deemed independent under the principles set out below,
and one Executive Director, at the date of signing the Directors’ Report.
The Board seeks to ensure that:
· At any point in time, its membership represents an appropriate balance between Directors with
experience and knowledge of the Group and Directors with an external or fresh perspective.
· The size of the Board is conducive to effective discussion and efficient decision-making.
As a Board, the Directors need to provide the following skills and knowledge:
· A balance of proven expertise, diverse skills and experience in commerce, finance, health care
innovation and other areas where software technology can improve the experience of consumers and
providers of health care services
· Understanding of the roles, duties and responsibilities of directors under the Corporations Act
· Leadership skills, experience making decisions at the highest levels, strategic thinking and long-term
planning abilities
· An understanding of current issues affecting the Australian health care industry in particular, and in
general a wider understanding of international medical and technological trends in health care provision
and consumption
· Flexible, consultative and innovative approaches to communicating and achieving corporate goals
· A passion for and strong commitment to the success of the activities of Global Health Limited
As Global Health Limited has a relatively small Board, the full Board acts as a nomination committee
and reviews Board memberships including an assessment of necessary and desirable competencies,
particularly in consideration of appointments and removals.
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BOARD RESPONSIBILITIES
The responsibilities of the Board include:
1. providing strategic guidance to the Company including contributing to the development of and approving
the corporate strategy;
2. reviewing and approving business plans, the annual budget and financial plans including available
resources and major capital expenditure initiatives;
3. overseeing and monitoring:
a. organisational performance and the achievement of the Group’s strategic goals and objectives
b. progress of major capital expenditures and other significant corporate projects including any
acquisitions or divestments;
4. monitoring financial performance including approval of the annual and half-year financial reports and
liaison with the Company’s auditors;
5. appointment, performance assessment and, if necessary, removal of the Managing Director;
6. ratifying the appointment and/or removal and contributing to the performance assessment of the
members of the senior management team;
7. ensuring there are effective management processes in place and approving major corporate initiatives;
8. enhancing and protecting the reputation of the organisation;
9. overseeing the operation of the Group’s system for compliance and risk management reporting to
shareholders.
NON-EXECUTIVE DIRECTORS’ INDEPENDENCE
The Board has adopted specific principles in relation to Non-Executive Directors’ independence. These state
that to be deemed independent, a Director must be a Non-executive and;
· Not be a substantial shareholder of the Company or an officer of, or otherwise associated directly with,
a substantial shareholder of the Company.
· Within the last three years, not have been employed in an executive capacity by the Company or any
other Group member or been a Director after ceasing to hold any such employment.
· Within the last three years not have been a principal of a material professional advisor or a material
consultant to the Company or any other Group member, or an employee materially associated with the
service provided.
· Not be a material supplier or customer of the Company or any other Group member, or an officer of or
otherwise associated directly or indirectly with a material supplier or customer.
· Must have no material contractual relationship with the Company or a controlled entity other than as a
Director of the Group.
· Not have been on the Board for any period which could, or could reasonably be perceived to, materially
interfere with the Director’s ability to act in the best interests of the Company.
· Be free from any interest and any business or other relationship which could, or could reasonably be
perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.
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TRADING POLICY
Directors are subject to the Corporations Act 2001 relative to restrictions applying to acquiring and disposing
of securities of the Company, if they are in possession of information which is not generally available, and
which, if generally available, a reasonable person would expect to have a material effect on the price of the
securities of the Company.
The Company’s policy restricts Directors and employees from acting on material information until it has been
released to the market and adequate time has been given for this to be reflected in the security’s prices.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER (CEO)
The Chairman is responsible for leading the Board, ensuring Directors are properly briefed in all matters
relevant to their role and responsibilities, facilitating Board discussions and managing the Board’s relationship
with the Company’s senior executives.
The CEO is responsible for implementing Group strategies and policies. The Board charter specifies that
these are separate roles to be undertaken by separate people.
COMMITMENT
The Board held five Board meetings during the year.
The number of meetings of the Company’s Board of Directors and of each Board committee held during
the year ended 30 June 2015, and the number of meetings attended by each Director is disclosed in the
Directors’ Report.
The three Non-executive Directors meet during the year, in scheduled sessions without the presence of
management, to discuss the operation of the Board and a range of other matters. Relevant matters arising
from this meeting was shared with the full Board.
It is the Company’s practice to allow its Executive Directors to accept appointments outside the Company
with prior written approval of the Board.
Prior to appointment or being submitted to for re-election, each Non-executive Director is required to
specifically acknowledge that they have and will continue to have the time available to discharge their
responsibilities to the Company.
CORPORATE REPORTING
The Managing Director and Chief Financial Officer have made the following certifications to the Board:
· that the Group’s financial reports are complete and present a true and fair view, in all material respects,
of the financial condition and operational results of the Group and are in accordance with relevant
accounting standards; and
· that the above statement is founded on a sound system of risk management and internal compliance
and control which implements the policies adopted by the Board and that the Group’s risk management
and internal compliance and control is operating efficiently and effectively in all material respects.
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AUDIT COMMITTEE
The Board has established an audit committee which acts in accordance with its charter. The audit
committee consists of the following Non-executive Directors:
Mr S L Pynt
Mr G Smith
Due to the small number of Board members, the Board has agreed to allow the audit committee to be made
up of two independent non-executive Directors. Details of these Directors’ qualifications and attendance at
audit committee meetings are set out in the Directors’ Report.
The audit committee has appropriate financial expertise and all members are financially literate and have an
appropriate understanding of the industries in which the Group operates. The audit committee has authority,
within the scope of its responsibilities, to seek any information it requires from any employee or external party.
It is the committee’s responsibility to ensure that an effective internal control framework exists within
the Group. This includes internal controls to deal with both the effectiveness and efficiency of significant
business processes. This includes the safeguarding of assets, the maintenance of proper accounting records
and the reliability of financial information.
REMUNERATION
The Board does not have a separate remuneration committee due to the small number of Board members.
Consequently the issue of remuneration is under the control of the Board which has the responsibility of
reviewing and approving remuneration of the Non-Executive Chairman and other executives of the Group.
Remuneration levels will be competitively set to attract the most qualified and experienced Directors and
senior executives. Where necessary the Board may obtain independent advice on the appropriateness of
remuneration packages and obtain any necessary shareholder approvals. The amount of remuneration for
all Directors is detailed in the Directors’ Report section.
Payment of equity-based executive remuneration is made in accordance with thresholds set in plans
approved by shareholders. The Board expects that the remuneration structure implemented will result in the
Company being able to attract and retain the best executives to run the Group. It will also provide executives
with the necessary incentives to work to grow long term shareholder value.
MONITORING OF THE BOARD’S PERFORMANCE
The Board has adopted a code of conduct for Directors in keeping with the Company’s desire to remain
a good corporate citizen and appropriately balance, protect and preserve all stakeholders’ interests.
In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner,
the Chairman reviews the performance of all Directors annually.
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COMMUNICATION TO SHAREHOLDERS
The Board aims to ensure that the shareholders, on behalf of whom they act, are informed of all information
necessary to assess the performance of the economic entity. Information is communicated to the
shareholders through:
- the Annual Report which is distributed to all shareholders;
- the Annual General Meeting and other meetings called to obtain approval for Board action as appropriate;
- regular release of media and market updates to the ASX; and
- the Company’s website: www.global-health.com.
The Company Secretary is the person responsible for communications with the Australian Stock Exchange
(ASX). This role includes responsibility for ensuring compliance with the continuous disclosure requirements
in the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX, analysts,
brokers, shareholders, the media and the public.
All information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the
ASX. When analysts are briefed on aspects of the Group’s operations, the materials used in the presentation
are released to the ASX and posted on the Company’s website.
All shareholders are entitled to receive a copy of the Company’s annual and half yearly reports. In addition,
the Company seeks to provide opportunities for shareholders to participate through electronic means.
Initiatives to facilitate this include making all Company announcements, media briefings, details of Company
meetings, press releases for the last three years and financial reports for the last three years available on the
Company’s website. The website also includes an option for shareholders to register their email address for
direct email updates on Company matters.
INDEPENDENT PROFESSIONAL ADVICE
Each Director is entitled to seek independent professional advice at the expense of the Company in carrying
out his duties as a Director. Prior to obtaining such advice, if at the expense of the economic entity, the
Chairman will be advised of the matter and an estimate of the cost.
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ASX RECOMMENDATIONS
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2.1
2.2
2.3
2.4
2.5
2.6
3.1
4.1
A listed entity should disclose: (a) the respective roles and responsibilities of its Board and management; and
(b) those matters expressly reserved to the Board and those delegated to senior management
A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to
security holders a candidate for election, as a director; and (b) provide security holders with all material
information in its possession relevant to a decision on whether or not to elect or re-elect a director.
A listed entity should have a written agreement with each director and senior executive setting out the
terms of their appointment.
The company secretary of a listed entity should be accountable directly to the Board, through the chair,
on all matters to do with the proper functioning of the Board.
A listed entity should have a diversity policy which includes requirements for the Board or a relevant
committee of the Board to set measurable objectives for achieving gender diversity and to assess
annually both the objectives and the entity’s progress in achieving them; (b) disclose that policy or
a summary of it; and disclose as at the end of each reporting period the measurable objectives for
achieving gender diversity set by the Board or a relevant committee of the Board in accordance with the
entity’s diversity policy and its progress towards achieving them, and either: the respective proportions
of men and women on the board, in senior executive positions and across the whole organisation
(including how the entity has defined “senior executive” for these purposes); or if the entity is a
‘relevant employer’ under the Workplace Gender Equality Act, the entity’s most recent ‘Gender Equality
Indicators’, as defined in and published under that Act.
A listed entity should have and disclose the process for periodically evaluating the performance of the
Board, its committees and individual directors; and (b) disclose, in relation to each reporting period,
whether a performance evaluation was undertaken in the reporting period in accordance with that process.
A listed entity should have and disclose the process for periodically evaluating the performance of
its senior executives; and (b) disclose, in relation to each reporting period, whether a performance
evaluation was undertaken in the reporting period in accordance with that process.
The board of a listed entity should: (a) have a nomination committee which: (1) has at least three
members, a majority of whom are independent directors; and (2) is chaired by an independent director,
and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the
end of each reporting period, the number of times the committee met throughout the period and
the individual attendances of the members at those meetings; or (b) if it does not have a nomination
committee, disclose that fact and the processes it employs to address board succession issues and to
ensure that the board has the appropriate balance of skills, knowledge, experience, independence and
diversity to enable it to discharge its duties and responsibilities effectively.
A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity
that the board currently has or is looking to achieve in its membership.
A listed entity should disclose: (a) the names of the directors considered by the board to be independent
directors; (b) if a director has an interest, position, association or relationship of the type described in
Box 2.3 but the board is of the opinion that it does not compromise the independence of the director,
the nature of the interest, position, association or relationship in question and an explanation of why the
board is of that opinion; and (c) the length of service of each director.
A majority of the Board of a listed entity should be independent Directors
The Chair of the Board of a listed entity should be an independent director and, in particular, should not
be the same person as the CEO of the entity.
A listed entity should have a program for inducting new directors and provide appropriate professional
development opportunities for directors to develop and maintain the skills and knowledge needed to
perform their role as directors effectively.
A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
The Board of a listed entity should: (a) have an Audit Committee which: (1) has at least three members,
all of whom are non-executive directors and a majority of whom are independent directors; and (2) is
chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the
committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in
relation to each reporting period, the number of times the committee met throughout the period and the
individual attendances of the members at those meetings; or (b) if it does not have an audit committee,
disclose that fact and the processes it employs that independently verify and safeguard the integrity of its
corporate reporting, including the processes for the appointment and removal of the external auditor and
the rotation of the audit engagement partner.
Complied Note
-
1
2
3
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4.2
4.3
5.1
6.1
6.2
6.3
6.4
7.1
7.2
7.3
7.4
8.1
8.2
8.3
The board of a listed entity should, before it approves the entity’s financial statements for a financial
period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the
entity have been properly maintained and that the financial statements comply with the appropriate
accounting standards and give a true and fair view of the financial position and performance of the entity
and that the opinion has been formed on the basis of a sound system of risk management and internal
control which is operating effectively.
A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to
answer questions from security holders relevant to the audit.
A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations
under the Listing Rules; and (b) disclose that policy or a summary of it.
A listed entity should provide information about itself and its governance to investors via its website.
A listed entity should design and implement an investor relations program to facilitate effective two-way
communication with investors.
A listed entity should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders.
A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an
independent director, and disclose: (3) the charter of the committee; (4) the members of the committee;
and (5) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings; or (b) if it does not have a
risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for
overseeing the entity’s risk management framework.
The Board or a committee of the Board should: (a) review the entity’s risk management framework at
least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting
period, whether such a review has taken place.
A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what
role it performs; or (b) if it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal control processes.
A listed entity should disclose whether it has any material exposure to economic, environmental and
social sustainability risks and, if it does, how it manages or intends to manage those risks.
The Board of a listed entity should : (a) have a remuneration committee which: (1) has at least three
members, a majority of whom are independent directors; and (2) is chaired by an independent director,
and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of
each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or (b) if it does not have a remuneration committee,
disclose that fact and the processes it employs for setting the level and composition of remuneration for
directors and senior executives and ensuring that such remuneration is appropriate and not excessive.
A listed entity should separately disclose its policies and practices regarding the remuneration of non-
executive directors and the remuneration of executive directors and other senior executives.
A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether
participants are permitted to enter into transactions (whether through the use of derivatives or otherwise)
which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it.
Complied Note
-
-
4
5
Note 1: The Board of Directors of the Company does not have a Nomination Committee. The Board is of the opinion
that due to the nature and size of the Company, the functions performed by a Nomination Committee can be
adequately handled by the full Board.
Note 2: The Company did not have a formal written code/policy but has had one in place since 1 September 2015.
Note 3: The Company has three non-executive Directors, of whom two comprise the Audit Committee. The Board is of
the opinion that due to the nature and size of the Company, this function can be adequately handled with less
than the three members recommended under ASX guidelines.
Note 4: The Company does not have an Internal Audit Function. The Board is of the opinion that due to the nature
and size of the Company, the functions performed by an internal auditor are being adequately served by the
Company’s independent external auditors.
Note 5: The Company does not have a Remuneration Committee. The Board is of the opinion that due to the nature and size
of the Company, the functions performed by a Remuneration Committee can be adequately handled by the full Board.
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LifeCard
A personal health record that empowers consumers to be
more proactive about their health and wellness
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Directors’ Declaration
1. In the opinion of the Directors of Global Health Limited (‘the Company’):
(a) the financial statements and notes, set out on pages 36 to 73 are in accordance with the Corporations
Act 2001 including:
i. giving a true and fair view of financial position of the consolidated entity as at 30 June 2015 and
of its performance, as represented by the results of its operations and its cash flows, for the year
ended on that date;
ii. complying with Accounting Standards in Australia and the Corporations Regulations 2001;
iii. complying with International Reporting Standards as disclosed in Note 1; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
2. There are reasonable grounds to believe that the Company and the controlled entities identified in
Note 19 will be able to meet any obligations or liabilities to which they are or may become subject.
3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the year ended 30 June 2015.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the Board
Steven Leigh Pynt
Non-Executive Chairman
Melbourne, 29 September 2015
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D I R E C T O R S ’ D E C L A R A T I O N
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HotHealth
An e-health portal for healthcare organisations to engage
with their providers and patients online
G L O B A L H E A L T H L I M I T E D C O N S O L I D A T E D E N T I T Y A N N U A L R E P O R T 2 0 1 5
Annual
Financial
Report
2015
This Global Health Limited consolidated
entity (‘Group’) financial report is presented
in the Australian currency.
Global Health Limited is a company limited
by shares, incorporated and domiciled in
Australia. With effect from 1 September
2014, the Company’s registered office and
principal place of business is:
Global Health Limited
Level 2, 607 Bourke Street
Melbourne, Victoria 3000
Australia.
A description of the nature of the Group’s
operations and its principal activities is
included in the review of operations and
activities in the Directors’ Report which
are part of this financial report.
The financial report was authorised for issue
by the Directors on 29 September 2015.
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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Revenue from the sale of licenses and maintenance contracts
Revenue from professional services
Other revenues
Total revenue from continuing operations
Salaries and related costs
Direct external costs
General and administration costs
Earnings before interest, tax, depreciation and amortisation
Finance costs
Depreciation
Amortisation
Non-operating foreign exchange gains/(losses)
Profit before income tax
Income tax benefit/(expense)
Net profit for the period
Other comprehensive income
Exchange differences on translating foreign operations
Total comprehensive profit for the period
Net profit/(loss) for the period attributable to:
Owners of the parent
Non-controlling interest
Total comprehensive profit/(loss) attributable to:
Owners of the parent
Non-controlling interest
Earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Note
2
2
2
3
3
3
3
3, 9
4
17
18
25
25
Consolidated Group
2015
$
2014
$
3,504,313
450,023
584,773
4,539,109
(2,508,020)
(27,436)
(777,354)
1,226,299
(17,759)
(47,502)
(211,371)
110,240
1,059,907
-
4,102,836
666,065
482,185
5,251,086
(2,614,639)
(136,803)
(840,158)
1,659,486
31,397
(8,402)
(209,953)
(29,015)
1,443,513
-
1,059,907
1,443,513
(106,953)
952,954
1,060,120
(213)
1,059,907
953,243
(289)
952,954
Cents
3.246
3.240
28,494
1,472,007
1,443,725
(212)
1,443,513
1,472,135
(128)
1,472,007
Cents
4.420
4.420
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
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STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015
Note
Consolidated Group
2015
$
2014
$
Current Assets
Cash and cash equivalents
Receivables
Other
Total Current Assets
Non-Current Assets
Receivables
Property, plant and equipment
Intangibles
Total Non-Current Assets
Total Assets
Current Liabilities
Payables
Interest bearing liabilities
Provisions
Unearned income
Total Current Liabilities
Non-Current Liabilities
Interest bearing liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets/(Liabilities)
Equity
Contributed equity
Reserves
Accumulated losses
Total Parent Entity Interest
Non-controlling interest
Total Equity
5
6
7
6
8
9
11
12
13
14
12
13
15
16
17
18
548,404
931,730
235,989
1,716,123
135,047
146,971
4,025,198
4,307,216
6,023,339
718,130
28,508
452,510
1,029,282
2,228,430
39,415
127,488
166,903
2,395,333
1,117,444
500,899
166,479
1,784,822
97,680
10,664
3,080,101
3,188,445
4,973,267
666,817
44,715
455,439
997,646
2,164,617
-
133,598
133,598
2,298,215
3,628,006
2,675,052
20,656,242
79,256
(16,969,316)
3,766,182
(138,176)
3,628,006
20,656,242
186,133
(18,029,436)
2,812,939
(137,887)
2,675,052
The above statement of financial position should be read in conjunction with the accompanying notes.
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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015
Consolidated Group
Issued
capital
ordinary
Option
reserve
Currency
translation
reserve
Retained
earnings
Total
attributable
to owners of
the parent
Non-
Controlling
interest
Total
equity
Balance 1 July 2014
20,656,242
29,978
156,155
(18,029,436)
2,812,939
(137,887)
2,675,052
Share based payments
Transactions with
owners
Profit/(loss) for the period
Other comprehensive
income:
Exchange difference on
translation of foreign
operations
Total comprehensive
profit/(loss) for the
period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,060,120
1,060,120
(213)
1,059,907
(106,877)
-
(106,877)
(76)
(106,953)
(106,877)
1,060,120
953,243
(289)
952,954
Balance 30 June 2015
20,656,242
29,978
49,278
(16,969,316)
3,766,182
(138,176)
3,628,006
Balance 1 July 2013
20,656,242
29,978
127,745
(19,473,161)
1,340,804
(137,759)
1,203,045
Share based payments
Transactions with
owners
Profit/(loss) for the period
Other comprehensive
income:
Exchange difference on
translation of foreign
operations
Total comprehensive
profit/(loss) for the
period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,443,725
1,443,725
(212)
1,443,513
28,410
-
28,410
84
28,494
28,410
1,443,725
1,472,135
(128)
1,472,007
Balance 30 June 2014
20,656,242
29,978
156,155
(18,029,436)
2,812,939
(137,887)
2,675,052
The above statement of changes in equity should be read in conjunction with the accompanying notes.
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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2015
Note
Consolidated Group
2015
$
2014
$
Cash Flows from Operating Activities
Receipts from customers
Receipts from Research and Development Grants
Payments to suppliers and employees
Sub-total
Interest received
Interest and finance costs paid
Net cash inflow from operating activities
28
Cash Flows from Investing Activities
Proceed from sale of plant and equipment
Purchase of property, plant and equipment
Purchase of intangibles
Net cash outflow from investing activities
3,921,599
531,896
(3,711,475)
742,020
22,506
(17,759)
746,767
1,650
(184,711)
(1,156,469)
(1,339,530)
5,121,084
413,833
(4,167,132)
1,367,785
14,921
31,397
1,414,103
-
(11,188)
(1,100,460)
(1,111,648)
Net cash inflow/(outflow) from operating and investing activities
(592,763)
302,455
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Net cash inflow/(outflow) from financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
5
176,337
(152,614)
23,723
(569,040)
1,117,444
548,404
66,301
(76,666)
(10,365)
292,090
825,354
1,117,444
The above statement of cash flows should be read in conjunction with the accompanying notes.
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Notes to the
Financial Statements
Global Health Limited and its controlled entities is a for-profit company domiciled in Australia. The financial
statements were authorised for issue by the Board of Directors on 29 September 2015.
The consolidated financial statements are presented in Australian dollars which is the parent entity’s
functional and presentation currency.
The separate financial statements and notes of the parent entity, Global Health Limited, have not been
presented within this financial report as permitted by amendments made to the Corporations Act 2001.
The parent entity summary is included in Note 32.
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. The financial
statements cover Global Health Limited and its controlled entities as a consolidated entity (‘Group’). Global
Health Limited is a for-profit public listed company limited by shares, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the Group in the preparation of
the financial report.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
Compliance with IFRSs
Compliance with Australian Accounting Standards ensures that the financial statements and notes of Global
Health Limited and its controlled entities comply with International Financial Reporting Standards (IFRSs).
Historical cost convention
These financial statements have been prepared under the historical cost convention and are also
prepared on an accruals basis.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the Group.
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Key estimates
(i)
Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions and
events specific to the Group that may be indicative of impairment triggers. Recoverable amounts
of relevant assets are reassessed using value-in-use calculations which incorporate various key
assumptions.
With respect to cash flow projections in Australia and overseas, modest growth rates have been
factored into valuation models for the next five years on the basis of management’s expectations
around the Group’s continued ability to capture market share from competitors.
Key judgments
(i) Provision for Impairment of Receivables
Provision for impairment of trade receivables has been included in Note 6 Receivables.
(b) Principles of Consolidation
A controlled entity is any entity that Global Health Limited has the power to control the financial and
operating policies of the entity so as to obtain benefits from its activities. In assessing the power to
govern, the existence and effect of holdings of actual and potential voting rights are considered.
A list of controlled entities is contained in Note 19 to the financial statements. All controlled entities
have a June financial year end.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the
consolidated financial statements as well as their results for the year then ended. Where controlled
entities have entered (left) the Group during the year, their operating results have been included
(excluded) from the date control was obtained (ceased).
All inter-company balances and transactions between entities in the Group, including any unrealised
profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been
changed where necessary to ensure consistencies with those policies applied by the parent entity.
Non-controlling interests, being that portion of the profit or loss and net assets of subsidiaries
attributable to equity interests held by persons outside the Group, are shown separately within the
equity section of the consolidated statement of financial position and in the consolidated statement of
profit or loss.
Business combinations occur where an acquirer obtains control over one or more businesses and
results in the consolidation of its assets and liabilities. A business combination is accounted for by
applying the acquisition method, unless it is a combination involving entities or businesses under
common control. The acquisition method requires that for each business combination one of the
combining entities must be identified as the acquirer (ie parent entity). The business combination will
be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained
by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject
to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed.
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In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been
incurred and its fair value can be reliably measured.
The acquisition may result in the recognition of goodwill. The method adopted for the measurement
of goodwill will impact on the measurement of any non-controlling interest to be recognised in the
acquiree where less than 100% ownership is held in the acquiree.
The acquisition date fair value of the consideration transferred for a business combination plus the
acquisition date fair value of any previously-held equity interest shall form the cost of the investment.
Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the
acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of profit or loss.
Where changes in the value of such equity holdings had been previously been recognised in other
comprehensive income, such amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a
contingent consideration arrangement. Any obligation incurred relating to contingent consideration is
classified as either a financial liability or equity instrument, depending upon the nature of the arrangement.
Rights to refunds or consideration previously paid are recognised as a receivable. Subsequent to
initial recognition, contingent consideration classified as equity is not re-measured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or a liability
is re-measured each reporting period to fair value through the statement of profit or loss and other
comprehensive income unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
profit or loss and other comprehensive income.
The acquisition date fair value of the consideration transferred for a business combination plus the
acquisition date fair value of any previously-held equity interest shall form the cost of the investment.
Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the
acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of profit or loss.
Where changes in the value of such equity holdings had been previously been recognised in other
comprehensive income, such amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a
contingent consideration arrangement. Any obligation incurred relating to contingent consideration is
classified as either a financial liability or equity instrument, depending upon the nature of the arrangement.
Rights to refunds or consideration previously paid are recognised as a receivable. Subsequent to
initial recognition, contingent consideration classified as equity is not re-measured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or a liability
is re-measured each reporting period to fair value through the statement of profit or loss and other
comprehensive income unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
profit or loss and other comprehensive income.
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(c) Impairment of non-financial assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of
profit or loss and other comprehensive income.
(d) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue
is recognised for the major business activities as follows:
Sales Revenue
Sales revenue comprises revenue earned (net of returns, discount and allowances) from the provision
of products or services to entities outside the consolidated entity. Sales revenue is categorised and
recognised as follows:
·
Initial Licence Fees and Upgrade Fees
Initial Licence Fees and Upgrade Fees are brought to account on the earlier of:
1. The date of signing the contract or agreement or;
2. The date stipulated in the executed contract or agreement.
The entity is able to recognise the revenue when the significant risks of ownership are transferred
from the entity to the buyer and one of the above conditions is met.
· Maintenance Fees
Maintenance fees are a non-refundable deferred revenue stream. Clients subscribe to their
licences in advance – ranging from monthly, quarterly, half-yearly to annual payments. They are
proportionally accrued in arrears, at the end of each month. These entitle the customer to a usage
licence, help desk telephone support and rights to extended warranty and product enhancements.
· Professional Services
Professional services are brought to account on the issue of invoice on completion of work that
may be performed on a time and materials or a project milestone basis. This includes work done in
the health and non-health segments.
Grants
Grant monies are not recognised until there is reasonable assurance that the consolidated entity will comply
with the conditions attaching to it, and that the grant will be received. Receipt of a grant does not of itself
provide conclusive evidence that the conditions attaching to the grant have been or will be fulfilled.
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Rent recharge
Revenue received from the sub-let of office premises is recognised monthly.
Interest Income
Interest revenue is recognised using the effective interest method.
Asset Sales
The net profit or loss on asset sales is included as revenue of the consolidated entity. The profit or loss
on disposal of assets is brought to account at the date an unconditional contract of sale is signed.
All revenue is stated net of the amount of goods and services tax.
(e) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST),
except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). 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 are stated with the amount of GST included. The net amount of GST
recoverable from, or payable to, the ATO is included as a current asset or liability in the statement
of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of
cash flows arising from investing and financing activities which are recoverable from, or payable to,
the Australian Taxation Office are classified as operating cash flow.
(f) Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and their
carrying values in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are
recognised for temporary differences at the tax rates expected to apply when the assets are recovered
or liabilities are settled, based on those tax rates which are substantially enacted for each jurisdiction. The
relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences
arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in
relation to these temporary differences if they arose in a transaction, other than a business combination,
that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts directly in equity are also recognised directly
in equity.
Tax consolidation legislation
Global Health Limited and its wholly-owned Australian entities have implemented the tax consolidation
legislation. These were formally adopted on lodgement of the 2004 income tax returns.
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On forming a tax consolidated group, Global Health Limited is now responsible for recognising the
deferred tax assets relating to tax losses for the Tax Consolidated Group. The Tax Consolidated Group has
entered into a tax-sharing agreement whereby each company in the Group contributes to the income tax
payable in proportion to their contribution to the net profit before tax of the Tax Consolidated Group.
(g) Intangible assets
Expenditure during the research phase of a project is recognised as an expense when incurred.
Development costs are capitalised only when technical feasibility studies identify that the project will
deliver future economic benefits and these benefits can be measured reliably.
The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are
directly attributable to preparing the asset for its intended use, and capitalised borrowing costs.
Other development expenditure is recognised in profit or loss as incurred.
Capitalised development costs are measured at cost less accumulated amortisation and accumulated
impairment losses.
Development costs have a finite life and are amortised on a systematic basis matched to the future
economic benefits over the useful life of the project which is 10 years.
(h) Plant and Equipment
Cost and valuation
Plant and equipment, leasehold improvements and furniture and fittings are carried at cost.
Asset are carried at cost less any accumulated depreciation and any impairment losses. Costs include
purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and
restoring the asset, where applicable.
Depreciation
Plant and equipment, leasehold improvements and furniture and fittings of the consolidated entity are
depreciated on a diminishing value basis. Rates of depreciation are calculated to allocate the cost, less
estimated residual value at the end of the useful lives of the assets.
The depreciation rates used for each class of depreciable assets are:
Class of Asset
Leasehold Improvements
Plant & Equipment
Furniture and Fittings
Motor Vehicles
Diminishing Value (%)
25 - 35
27 - 40
13
22.5
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the assets’
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of profit or loss and other comprehensive income.
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(i) Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment. Trade receivables are generally due
for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly. An allowance account (provision
for impairment of trade receivables) is used when there is objective evidence that the Group will not be
able to collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default or delinquency in payments (more than 30 days overdue) are considered indicators that the
trade receivable is impaired. The amount of the impairment allowance is the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of
discounting is immaterial.
The amount of the impairment loss is recognised in the statement of profit or loss within other
expenses. When a trade receivable for which an impairment allowance had been recognised becomes
uncollectible in a subsequent period, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against general and administrative expenses in
the statement of profit or loss and other comprehensive income.
(j) Foreign Currency
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian dollars, which is Global Health
Limited’s functional and presentation currency.
Translation of controlled foreign entities
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
· Assets and liabilities for each statement of financial position presented are translated at the closing
rate at the date of that statement of financial position;
·
Income and expenses for each statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions); and
· All resulting exchange differences are recognised as a separate component of equity.
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On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and borrowings and other currency instruments, are taken to shareholders’ equity. When a foreign operation
is sold or borrowings repaid, a proportionate share of such exchange differences are recognised in the
statement of profit or loss and other comprehensive income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rate.
(k) Leases
Leases are classified at their inception as either operating or finance leases based on the economic
substance of the agreement so as to reflect the risks and benefits incidental to ownership.
Finance leases, which effectively transfer to the Group, substantially all of the risks and benefits
incidental to ownership of the leased item, are capitalised at the present value of the minimum lease
payments and amortised over the period the Group is expected to benefit from the use of the leased
assets. Operating lease payments, where the lessor effectively retains substantially all of the risks and
benefits of ownership of the leased items, are included in the determination of the operating profit or
loss in equal instalments over the lease term.
(l) Employee Benefits
Provision is made for benefits accruing to employees in respect of salaries and wages, annual leave and
long service leave when it is probable that settlement will be required and they are capable of being
measured reliably.
Wages, Salaries & Annual Leave
Liabilities arising in respect of wages, salaries, annual leave and other employee benefits expected to
be settled within 12 months represent the amount which the Group has a present obligation to pay
resulting from employees’ services provided up to the reporting date. Liabilities have been calculated at
the amounts expected to apply at the time of settlement. On-costs are included in this amount.
Long Service Leave
The liability for employee benefits to long service leave represents the present value of the estimated
future cash outflows to be made by the employer resulting from employees’ services provided up to
the reporting date.
Liabilities for employee benefits which are not expected to be settled within twelve months are
discounted using the rates attaching to national government securities at reporting date, which most
closely match the terms of maturity of the related liabilities.
In determining the liability for long service leave, consideration has been given to future increases in
wage and salary rates, and the Group’s experience with staff departures. Related on-costs have also
been included in the liability.
Share-based payments
Share-based compensation benefits are provided to employees via the Company’s Employee Option
Plan and an employee share scheme. Information relating to these schemes is set out in Note 27.
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The fair value of options granted under the Company’s Employee Option Plan is recognised as an employee
benefit expense with a corresponding increase in equity. The fair value is measured at grant date and
recognised over the period during which the employees become unconditionally entitled to the options.
The fair value at grant date is independently determined using an option pricing model that takes into
account the exercise price, the term of the option, the vesting and performance criteria, the impact
of dilution, the non-tradeable nature of the option, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term
of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions
(for example, profitability and sales growth targets). Non-market vesting conditions are included in
assumptions about the number of options that are expected to become exercisable. At each reporting
date, the entity revises its estimate of the number of options that are expected to become exercisable.
The employee benefit expense recognised each period takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to those
options is transferred to share capital.
The market value of shares issued to employees for no cash consideration under the employee share
scheme is recognised as an employee benefits expense with a corresponding increase in equity when
the employees become entitled to the shares.
(m) Accounts Payable
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or
not billed to the Group. The amounts are unsecured and are usually paid within 30 days of recognition.
(n) Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the
entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted
for financial assets that are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is
not classified as at fair value through profit or loss. Transaction costs related to instrument classified as
at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are
classified and measured as set out below.
Effective interest rate method
The effective interest method is a method of calculating the amortised cost of a financial asset and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial assets, or, where
appropriate, a shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those financial
assets ‘at fair value through profit or loss’.
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Classification and subsequent measurement
Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or loss when they are held for trading for
the purpose of short term profit taking, where they are derivatives not held for hedging purposes, or
designated as such to avoid an accounting mismatch or to enable performance evaluation where a
group of financial assets is managed by key management personnel on a fair value basis in accordance
with a documented risk management or investment strategy. Realised and unrealised gains and losses
arising from changes in fair value are included in profit or loss in the period in which they arise.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are stated at amortised cost using the effective interest rate method.
Held-to-maturity investments
These investments have fixed maturities, and it is the Group’s intention to hold these investments to
maturity. Held-to-maturity investments held by the Group are stated at amortised cost using the effective
interest rate method.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that
are not classified in any of the other categories. They comprise investments in the equity of other entities
where there is neither a fixed maturity nor fixed or determinable payments. They are held at fair value with
changes in fair value taken through the financial assets reserve directly to other comprehensive income.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest rate method.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
Impairment of financial assets
At each reporting date, the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a significant or
prolonged decline in the value of the instrument is considered to determine whether an impairment has
arisen. Impairment losses are recognised in the statement of profit or loss.
The carrying amount of financial assets including uncollectible trade receivables is reduced by the
impairment loss through the use of an allowance account. Subsequent recoveries of amounts previously
written off are credited against the allowance account. Changes in the carrying amount of the allowance
account are recognised in profit or loss.
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With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of
the impairment loss decreases and the decrease can be related objectively to an event occurring after
the impairment was recognised, the previously recognised impairment loss is reversed through profit
or loss to the extent the carrying amount of the investment at the date the impairment is reversed does
not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale equity instruments, any subsequent increase in fair value after an
impairment loss is recognised directly in other comprehensive income.
Financial Guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due,
are recognised as a financial liability at fair value on initial recognition. The guarantee is subsequently
measured at the higher of the best estimate of the obligation and the amount initially recognised less,
when appropriate, cumulative amortisation in accordance with AASB 118 Revenue. Where the entity
gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using the probability weighted
discounted cash flow approach. The probability has been based on:
·
·
the likelihood of the guaranteed party defaulting in a 12-month period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party
defaulting; and
·
the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset
is transferred to another party whereby the entity no longer has any significant continuing involvement in
the risks and benefits associated with the asset. Financial liabilities are derecognised where the related
obligations are either discharged, cancelled or expire. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss.
(o) Contributed Equity
Issued and paid up capital is recognised at the fair value of the consideration received by Global Health
Limited.
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to which the costs relate.
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(p) Earnings Per Share
Basic earnings per share (EPS) is calculated as the net result attributable to members, adjusted to
exclude costs of servicing equity (other than dividends), divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted EPS is calculated as the net result attributable to members, adjusted for:
· Costs of servicing equity (other than dividends) and preference share dividends;
· The after tax effect of dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses; and
· Other non-discretionary changes in revenues or expenses during the period that would result from
the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
(q) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities with three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(r) Going Concern
At 30 June 2015, the Company reported an EBITDA profit of $1,226,299 (2014: $1,659,486). A net
asset surplus of $3,628,006 (2014: $2,675,052) and a net current asset deficiency of $512,307
(2014: $379,795) was also recorded.
This net current asset deficiency is primarily represented by unearned revenue of $1,029,282.
Unearned revenue comprises annual subscriptions (licence to use, help desk telephone support,
rights to enhancements and extended warranties) paid in advance but recognised monthly. These
subscriptions in advance are not subject to refunds or cancellation but do incur an obligation by the
Group to provide monthly help-desk and warranty services. The reporting of unearned revenue on
the Company’s balance sheet has always been shown and is a normal business operation.
The Board believes it is appropriate to prepare the financial statements on a going concern basis.
(s) Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year. Comparatives are consistent with prior years,
unless otherwise stated.
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(t) Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant
will be received and all grant conditions will be met. Grants relating to expense items are recognised
as income on the date of receipt of the grant.
The Government has the right to review grants paid and may clawback funds in the event of an
excess claim.
Research and Development Grant
The Company received a federal government Research and Development Tax Incentive of $531,896
(2014:$ 413,833) in relation to its research and development activities for the 2015 financial year.
(u) Borrowing Costs
Borrowing costs are expensed as incurred.
(v) Legal Fees
Legal costs will be incurred from time to time. Their treatment will be classified under the following
scenarios:
1. Ordinary Course of Business;
Where legal fees are incurred in the ordinary course of business they will be expensed to the
Statement of Profit and Loss.
2. Protection of Intellectual Property;
Where legal fees incurred are directly related to the protection of Intellectual Property, the costs will
be capitalised and shown as a Non-Current Asset on the Company’s Statement of Financial Position
where there is a reasonable expectation that the claim will succeed. Should this condition not be met,
legal fees for the protection of Intellectual Property will be expensed to the Profit and Loss Statement.
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(w) New accounting standards and Australian Accounting Interpretations
In the current year, the Group has adopted all of the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board that are relevant to its operations and effective for
the current annual reporting.
There are no significant effects on current, prior or future periods arising from the first-time application
of the standards discussed above in respect of presentation, recognition and measurement of accounts.
At the date of authorisation of the financial statements, the following Australian Accounting Standards/
Accounting Interpretations have been issued or amended and are applicable to the Group but are not
yet effective and have not been adopted in preparation of the financial statements.
Standard/Interpretation
Impact on the Group
AASB 2015-3 Amendments to
Australian Accounting Standards
arising from the withdrawal of
AASB 1031 Materiality
AASB 2015-2 Disclosure Initiative
– Amendment to AASB 101
AASB 15 Revenue from contracts
with customers
AASB 2014-5 Amendment to
Australian Accounting Standards
arising from AASB 15
There is not expected to be any
changes to the reported financial
position, performance or cash
flows of the entity
No impact on reported financial
position or performance is
expected
The changes in revenue
recognition requirements in
AASB 15 might cause changes
to the timing and amounts of
revenue recorded in the financial
statements as well as additional
disclosures. The impact of AASB
15 has not yet been quantified.
Effective for annual
reporting periods
beginning on or after
First applied in the
year ending
1 July 2015
30 June 2016
1 January 2016
30 June 2016
1 January 2018
30 June 2018
AASB 9 Financial Instruments
No significant impact is expected
1 January 2018
30 June 2019
AASB 2013-9 Amendments to
Australian Accounting Standards –
Conceptual Framework, Materiality
and Financial Instrument
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2. REVENUE AND OTHER INCOME
Revenue
Sales of licences
Maintenance contracts
Professional services
Other Income
Interest received on financial assets at amortised cost
Research and Development grants
Rental recharge
Other
Note: All revenue is attributed to controlling interests
3. EXPENSES
Profit before income tax includes the following specific expenses
Cost of sales
Depreciation of non-current assets
Amortisation of Development Asset
Impairment losses on financial assets
- Trade receivables
Consolidated Group
2015
$
2014
$
917,488
2,586,825
450,023
3,954,336
22,506
531,896
903
29,468
584,773
1,682,444
2,420,392
666,065
4,768,901
14,921
413,833
8,957
44,474
482,185
4,539,109
5,251,086
Consolidated Group
2015
$
2014
$
27,436
47,502
211,371
136,803
8,402
209,953
-
15,337
Wages and salaries, net of Capitalised Development cost
2,508,020
2,614,639
Travel and accommodation
Operating lease payments
Interest expense on financial liabilities carried at amortised cost
91,028
180,725
17,759
87,864
214,403
(31,397)
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4.
INCOME TAX EXPENSE
A The prima facie tax on profit from ordinary activities before income tax is
reconciled to the income tax as follows:
Prima facie income tax payable on profit/(loss) before income tax at 30%
317,972
433,054
Consolidated Group
2015
$
2014
$
Increase/(decrease) in income tax expense due to:
- other non-allowable items
- foreign subsidiary losses not booked
- recoupment of losses
Deferred tax asset/(liabilities) not brought to account
B Deferred tax asset not brought to account, the benefits of which will only
be realised if the conditions for deductibility set out in Note 1(f) occur
- from temporary differences
- from unused tax losses
5. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Deposits at call
Balance per Statement of Cash Flows
6. RECEIVABLES
Current
Trade receivables
Impairment of receivables
Non-Current
Trade receivables
133,883
3,133
(195,538)
(259,450)
(514,899)
1,243,767
728,868
216,686
3,822
(404,170)
(249,392)
(255,449)
1,463,764
1,208,315
Consolidated Group
2015
$
2014
$
548,404
-
548,404
1,108,754
8,690
1,117,444
Consolidated Group
2015
$
2014
$
932,641
(911)
931,730
135,047
135,047
507,909
(7,010)
500,899
97,680
97,680
1,066,777
598,579
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Provision for Impairment of Current Trade Receivables
Current trade receivables are non-interest bearing receivable and generally on 30-day terms. A provision for
impairment is recognised when there is objective evidence that an individual trade receivable is impaired.
Movements in the provision are as follows:
Balance at beginning of year
Charge for year
Amounts written off
Amounts reversed
Closing balance
Trade receivables that are impaired
Consolidated Group
2015
$
2014
$
7,010
-
-
(6,099)
911
9,530
-
-
(2,520)
7,010
As at 30 June 2015, the following trade receivables of the Group were past due and impaired (2014: $7,010).
The ageing of trade receivables which have been impaired are as follows:
1 to 3 months
3 to 6 months
Over 6 months
Consolidated Group
2015
$
2014
$
-
867
44
-
5,369
1,641
Trade receivables that are past due but not impaired
As of 30 June 2015, trade receivables of $53,598 (2014: $9,074) were past due but not impaired. These
relate to a number of independent customers for whom there is no recent history of default. The ageing
analysis of these trade receivables is as follows:
1 to 3 months
3 to 6 months
Over 6 months
Fair Values
Consolidated Group
2015
$
2014
$
44,550
9,048
-
344
8,730
-
The carrying value less impairment provision of trade receivables are assumed to approximate fair value.
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7. OTHER ASSETS
Current
Prepayments
Security bonds
8. PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements – at cost
Accumulated amortisation
Plant and equipment – at cost
Accumulated depreciation
Consolidated Group
2015
$
2014
$
123,967
112,022
235,989
110,384
56,095
166,479
Consolidated Group
2015
$
2014
$
173,217
(40,769)
132,448
460,750
(446,227)
14,523
9,500
(9,500)
-
718,479
(707,815)
10,664
Property, plant and equipment (net)
146,971
10,664
Reconciliation of the carrying amounts or each class of property, plant and equipment are set out below:
Leasehold improvements
Carrying amount – as at 1 July
Additions
Amortisation
Carrying amount – as at 30 June
Plant and equipment
Carrying amount – as at 1 July
Additions
Disposal, net
Depreciation
Carrying amount – as at 30 June
-
173,217
(40,769)
132,448
10,664
11,495
(903)
(6,733)
14,523
2,542
-
(2,542)
-
5,336
11,188
-
(5,860)
10,664
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9.
INTANGIBLES
Non-Current
Development expenditure – at cost*
Accumulated amortisation
Consolidated Group
2015
$
2014
$
4,460,104
(526,981)
3,933,123
3,395,711
(315,610)
3,080,101
Legal fees – protection of Intellectual Property
92,075
-
Total Intangibles, net
4,025,198
3,080,101
Intangibles
Carrying amount – as at 1 July
Additions
Amortisation
Carrying amount – as at 30 June
4,025,198
3,080,101
1,156,468
(211,371)
4,025,198
3,080,101
2,189,594
1,100,460
(209,953)
3,080,101
* This represents costs arising from the development phase of internal projects.
Amortisation has been charged to the accounts as it has been determined that the products have been launched and are ready for sale.
10. FAIR VALUE MEASUREMENT
The introduction of AASB 13 provided guidance for determining the fair value of assets and liabilities. It
did not change when the Company is required to use fair value but, rather, provides guidance on how to
determine fair value when fair value is required or permitted. It also expands the disclosure requirements for
all assets or liabilities carried at fair value. The Company reviewed its policies for measuring fair values and
the application of AASB 13 has not resulted in any change in the fair value measurements of the Company.
11. PAYABLES
Trade creditors
Other creditors and accruals
Consolidated Group
2015
$
2014
$
416,755
301,375
718,130
343,881
322,936
666,817
The carrying value of trade payables is assumed to approximate fair value.
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12. INTEREST BEARING LIABILITIES
Current
Loan – Premium funded policies
Loan for Leasehold Improvements
Non-Current
Loan for Leasehold Improvements
Consolidated Group
2015
$
2014
$
-
28,508
28,508
39,415
39,415
44,715
-
44,715
-
-
The Premium Funded Policies are 12-month terms in line with the term of the premiums and are unsecured. Whilst policies remain
current and in place, the funding arrangement expired on 31 March 2015 and was not renewed.
The Loan for Leasehold Improvements relates to work done for Level 2, 607 Bourke Street, Melbourne. The Company’s head office
relocated to these premises on 1 September 2014.
Fair Values
Loan – Premium funded policies
Loan for Leasehold Improvements
13. PROVISIONS
Analysis of Provisions
Consolidated Group
Opening balance at 1 July 2014
Amounts taken during the year
Amount provided during the year
Closing Balance 30 June 2015
Current
Employee benefits
Non-Current
Employee benefits
Consolidated Group
2015
$
2014
$
-
67,923
67,923
44,715
-
44,715
Consolidated Group
2015
$
2014
$
589,037
(244,730)
235,691
579,998
521,312
(200,361)
268,086
589,037
452,510
455,439
127,488
579,998
133,598
589,037
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14. UNEARNED INCOME
Consolidated Group
2015
$
2014
$
Annual licence and maintenance in advance
1,029,282
997,646
Annual licence and maintenance in advance revenue comprises fees for the right to use our software,
minor fixes, rights to updated versions and limited help line support. These are invoiced up to 12 months in
advance. The revenue is recognised monthly as the services are provided to clients.
15. CONTRIBUTED EQUITY
Consolidated Group
2015
Number
2015
$
2014
Number
2014
$
Issued and paid up capital
32,659,758
$20,656,242
32,659,758
$20,656,242
Ordinary shares
Opening balance
32,659,758
$20,656,242
32,659,758
$20,656,242
Add: Shares issued as part of renounceable rights issue
Add: Shares issued as part of management service agreement
-
-
-
-
-
-
-
-
Total number of shares on issue post-consolidation
32,659,758
$20,656,242
32,659,758
$20,656,242
(a) Ordinary shares
The holders of ordinary shares are entitled to receive dividends as they are declared from time to time
and are entitled to one vote per share at the shareholders meeting. In the event of winding up the
Company ordinary shareholders rank after all other shareholders and creditors and are fully entitled to
any net proceeds of liquidation. There is no par value attributed to the shares of the Company.
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(b) Options
The movement in the number of unlisted options on issue throughout the year is as follows:
(i) $2.25 options exercisable on or before 31 July 2013
Opening balance
Issued
Exercised
Cancelled/Expired
Closing balance
(ii) $2.25 options exercisable on or before 8 October 2013
Opening balance
Issued
Exercised
Cancelled/Expired
Closing balance
(iii) $0.15 options exercisable on or before 5 July 2018
Opening balance
Issued
Exercised
Cancelled/Expired
Closing balance
(iv) $0.65 options exercisable on or before 19 December 2018
Opening balance
Issued
Exercised
Cancelled/Expired
Closing balance
(v) $0.75 options exercisable on or before 26 May 2019
Opening balance
Issued
Exercised
Cancelled/Expired
Closing balance
(vi) $0.65 options exercisable on or before 10 June 2020
Opening balance
Issued
Exercised
Cancelled/Expired
Closing balance
TOTAL
Consolidated Group
2015
Number
2014
Number
-
-
-
-
-
-
-
-
-
-
300,000
-
-
-
4,000
-
-
(4,000)
-
106,667
-
-
(106,667)
-
-
300,000
-
-
300,000
300,000
690,000
-
-
-
-
690,000
-
-
690,000
690,000
300,000
-
-
-
-
300,000
-
-
300,000
300,000
-
390,000
-
-
390,000
1,680,000
-
-
-
-
-
1,290,000
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During the financial year and up to the date of these accounts, the Company issued 390,000 unlisted
employee share options exercisable at 65 cents on or before 10 June 2020 which will vest in equal one-
third parts (ie 130,000) every 12 months over a period of 36 months.
During the previous financial year, the Company issued to its employees a total of 1,290,000 unlisted
employee options:
· on 5 July 2013: 300,000 unlisted employee options with an exercise price of 15 cents which will vest
in equal one-third parts (ie 100,000 options) every 12 months over a period of 36 months;
· on 19 December 2013: 690,000 unlisted share options exercisable at 65 cents on or before 19
December 2018 which will vest in equal one-third parts (ie 230,000) every 12 months over a period
of 36 months; and
· on 26 May 2014: 300,000 unlisted employee options with an exercise price of 75 cents which will
vest in equal one-third parts (ie 100,000 options) every 12 months over a period of 36 months.
(c) Capital management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide
the shareholders with adequate returns and ensure that the Group can fund its operations and continue
as a going concern. The Group’s debt and capital comprises ordinary share capital, supported by
financial assets. There are no externally imposed capital requirements. A loan at commercial terms was
secured to fund the Company’s office fit-out at new premises. Refer to Note 12.
16. RESERVES
Nature and purpose of reserve
Currency Translation Reserve
The foreign currency translation reserve records the foreign currency differences arising from the translation
of foreign operations.
Option Reserve
The option reserve records the accumulated cost of options on issue for the Company.
17. ACCUMULATED LOSSES
Accumulated losses at the beginning of the financial year
Net profit attributable to the members of the parent entity
Accumulated losses at the end of the financial year
Consolidated Group
2015
$
(18,029,436)
1,060,120
(16,969,316)
2014
$
(19,473,161)
1,443,725
(18,029,436)
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18. NON-CONTROLLING INTEREST
Global Health Limited has a 93.8% (2014: 93.8%) interest in the subsidiary Working Systems Solutions
(Malaysia) Sdn Bhd. Retained earnings attributable to the non-controlling interest are as follows:
Consolidated Group
2015
$
2014
$
Balance at the beginning of the financial year
(137,887)
(137,759)
Non-controlling interests attributable to this entity is as follows:
- share of losses
- share of currency translation reserve
Balance at the end of the financial year
(213)
(76)
(212)
84
(138,176)
(137,887)
19. PARTICULARS IN RELATION TO CONTROLLED ENTITIES
Global Health Limited, incorporated in Australia, is the ultimate parent entity. Its legal form is a public
company and the Company is domiciled in Victoria.
Controlled Entity
Place of Incorporation
Type of Security
Interest
2015
Interest
2014
Global Health (Australia) Sdn Bhd
Kuala Lumpur
Ordinary Shares
Working Systems Solutions (Malaysia) Sdn Bhd
Kuala Lumpur
Ordinary Shares
Working Systems Solutions Pty Ltd
Victoria
Ordinary shares
Uni U International Pty Ltd
Western Australia
Ordinary shares
Working Systems Solutions (Singapore) Pte Ltd
Singapore
Ordinary shares
Bourke Johnston Systems Pty Ltd
Victoria
Ordinary shares
Working Systems Software Pty Ltd
Western Australia
Ordinary shares
Statewide Unit Trust
Western Australia
Units
100%
94%
100%
100%
100%
100%
100%
100%
100%
94%
100%
100%
100%
100%
100%
100%
20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group’s financial instruments consist primarily of trade receivables, trade payables and borrowings.
The Group does not have significant risk exposure to financial instruments and as such risk exposures are
generally managed as part of the Group’s overall strategic and operational risk management strategies.
Consequently, there is currently no specific risk mitigating techniques employed. However, as the Group
expands both domestically and internationally, management continues to monitor its exposure and will
implement suitable policies when deemed necessary.
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The current financial instruments held by the Group are as follows:
Financial Assets
- Cash and cash equivalents
- Receivables
Financial Liabilities
- At amortised cost
Financial liabilities measured at amortised cost consist of:
- Current payables
- Current interest-bearing liabilities
Consolidated Group
2015
$
2014
$
548,404
931,730
1,480,134
1,117,444
500,899
1,618,343
(746,638)
(711,532)
(718,130)
(28,508)
(746,638)
(666,817)
(44,715)
(711,532)
5
6
11
12
The Group is exposed to foreign currency fluctuations due to loan accounts between related entities being
unhedged and requiring payment in AUD at an undetermined date in the future.
(a) Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in
financial loss to the Group and essentially arises from holdings of cash and deposits, trade receivables
and loans receivable as well as from the parent’s potential obligations under the indemnity guarantee
provided to banks. The risk is largely managed through a policy of only dealing with creditworthy
counterparties. Periodic assessments of debtor balances are undertaken and provisions for impairment
are recognised where appropriate.
Maximum exposure to credit risk without taking account of any collateral held or other credit
enhancements arising from the Group’s recognised financial assets is considered to be equivalent to
their carrying values at reporting date. Maximum exposures arising from the indemnity guarantee are as
disclosed at Note 24: Commitments and Contingencies. The Group does not have any significant credit
risk exposure to any single counterparty or groups of counterparties having similar characteristics.
The majority of customers have long standing business relationships with the Group and their credit
quality with respect to trade receivables is assessed as high.
All cash and cash equivalents are held with large reputable financial institutions within Australia,
Malaysia and Singapore and therefore credit risk is considered very low.
Cash at Bank and deposits
Australian banks
Malaysian banks
Singaporean banks
Consolidated Group
2015
$
2014
$
544,445
3,959
-
548,404
1,105,079
3,875
8,490
1,117,444
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(b) Liquidity risk
Liquidity risk is managed through monitoring current funds available, undrawn facilities and anticipated
recovery of receivables and comparing with future funding requirements contained in management
budgets and forecasts. In this regard, the timing of expected settlement of liabilities is also analysed so as
to minimise risk with respect to obligations becoming past due. This is consistent with the prior year.
The maturity profile of the Group’s financial liabilities is presented in the following table based on
contractual maturity dates and represent undiscounted cash flows.
Consolidated
at
30 June 2015
Weighted
average
effective
rate
Variable
amount
at call
<6
months
6 – 12
months
1 – 2
years
2 – 5
years
>5
years
Total
contracted
cash flows
Carrying
value of
financial
liability
%
$
$
$
$
$
$
$
$
Trade and Other
Payables
Loan – Premium
Funded Policies
Loan for
Leasehold
Improvements
Totals
-
-
11.5%
-
-
-
-
718,130
-
-
-
-
-
-
-
11,457
17,052
32,215
7,199
729,587
17,052
32,215
7,199
Consolidated
at
30 June 2014
Weighted
average
effective
rate
Variable
amount
at call
<6
months
6 – 12
months
1 – 2
years
2 – 5
years
>5
years
%
$
$
$
$
$
$
Trade and Other
Payables
-
Loan – Premium
Funded Policies
3.47%
Loan for
Leasehold
Improvements
Totals
-
-
-
-
666,817
-
27,706
17,009
-
-
694,523
17,009
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
718,130
718,130
-
-
67,923
67,923
786,053
786,053
Total
contracted
cash flows
Carrying
value of
financial
liability
$
$
666,817
666,817
44,715
44,715
-
-
711,532
711,532
(c) Market risk
The Group is exposed to interest rate and foreign currency risk. Details are provided in the following
paragraphs. There are no known exposures to other risks that are material to the financial statements.
(i)
Interest rate risk
Fair values of financial instruments held have been disclosed at Note 20. The Group also has
exposure to variable interest rates on monies that are kept in at-call bank accounts.
The table provided at Note 20(b) details the Group’s exposure to interest rate risk. For sensitivities
relating to interest rate risk, refer to paragraph (iii) below.
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(ii) Foreign exchange risk
The Group controls subsidiaries in Malaysia and Singapore and participates in a joint venture
in Malaysia. The Group is therefore exposed to foreign exchange risk arising from exposure to
currencies of these respective countries. Such risk arises from future transactions and assets
and liabilities that are denominated in functional currencies other that the Australian dollar.
Management does not engage in an active program of hedging exposure to foreign currencies.
The exposure to foreign currency risk at reporting date is represented by the following balances:
Assets denominated in foreign currency
Liabilities denominated in foreign currency
Net exposure to foreign currency
Consolidated Group
2015
2014
MYR
SGD
MYR
SGD
11,866
(19,310)
(7,444)
12,889
(4,710)
8,179
12,091
(17,399)
(5,308)
12,889
(4,710)
8,179
For sensitivities relating to foreign currency risk, refer to paragraph (iii) below.
(iii) Sensitivity Analysis
Interest Rate Risk and Foreign Currency Risk
The following sensitivity analysis demonstrates the effect on the current year results and equity
which could result from a reasonably possible change in interest rate and foreign currency
risks. The analysis is indicative only and assumes that the movement in the particular variable is
independent of the other variables and that all other variables remained constant.
Change in profit after tax
+/- in interest rate by 0.5%
+/- in $A/MYR rate by 15%
Change in Equity
+/- in interest rate by 0.5%
+/- in $A/MYR rate by 15%
(iv) Capital Risk Management
Consolidated Group
2015
$
2014
$
+/-200
+/-0
+/-200
+/-28,000
+/-200
+/-0
+/-200
+/-28,000
Management controls the capital of the Group in order to maintain a good debt to equity ratio,
provide the shareholders with adequate returns and ensure that the Group can fund its operations
and continue as a going concern. The Group’s debt and capital comprises ordinary share capital
supported by financial assets.
The Group does not currently have significant debt capital employed in the business. There are no
externally imposed capital requirements.
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Net Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are as presented in the statement of financial
position. Fair values are those amounts at which an asset could be exchanged, or a liability settled,
between knowledgeable, willing parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where
changes in assumptions may have a material impact on the amounts estimated.
21. DIRECTORS
The names of each person holding the position of Director of Global Health Limited at any one time during
the year ended 30 June 2015 are Mathew Cherian, Steven Leigh Pynt, Grant Smith and Robert Knowles.
(a) Contracts involving Directors’ interests
Apart from the details disclosed in this note, no Director has entered into any material contract with
the Group and there are no material contracts involving Directors’ interests subsisting at the end of the
current financial period.
Transactions with the Group:
(i) Mr Cherian’s son is employed by Global Health Limited under standard employment terms.
(b) Transactions of Directors and Director-related entities concerning shares and options
Shares
The interest of Directors and their related entities in shares of the Company as at 30 June 2015 are:
Total number of shares
Number of shares sold
Number of shares acquired
2015
2014
2015
2014
2015
2014
Mr M Cherian
18,619,370
18,619,370
Mr S L Pynt
Mr G Smith
Mr R Knowles
232,408
280,000
20,000
232,408
280,000
20,000
19,151,778
19,151,778
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,334
-
280,000
20,000
303,334
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Options
The interests of Directors and their related entities in options of the Company as at 30 June 2015 are:
No. of
Options
granted
Exercise
price per
Option ($)
Option type
(Listed /
Unlisted)
Number of
Options vested/
exercisable at
report date
Number
of Options
exercised
Total
number
of Options
Mr M Cherian4
150,000
$0.65
Unlisted
Mr S L Pynt
Mr G Smith
Mr R Knowles
-
-
-
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
-
-
-
150,000
22. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors
The following persons were Directors of the Company during the financial year:
Parent Entity Directors:
Mr S Pynt
Chairman – Independent Non-Executive
Mr M Cherian
Chief Executive Officer and Managing Director
Mr G Smith
Director – Independent Non-Executive
Mr R Knowles
Director – Independent Non-Executive
(b) Key management personnel compensation
Refer to the Remuneration Report in the Directors’ Report for details of the remuneration paid or
payable to each member of the Group’s key management personnel for the year ended 30 June 2015.
The total remuneration paid to key management personnel of the Company and the Group during the
year are as follows:
Short-term employee benefits
Other long-term benefits
Post-employment benefits
Consolidated Group
2015
$
2014
$
671,252
6,938
61,187
739,377
636,983
7,875
54,203
699,061
4 Through a related party, Kye Cherian.
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Shares
The interest of key management personnel and their related entities in shares of the Company as at 30
June 2015 are:
P Curigliano
K Jayesuria
Options
Total number of shares
Number of shares sold
Number of shares acquired
2015
2014
2015
2014
2015
2014
55,459
55,459
-
-
55,459
55,459
-
-
-
-
-
-
-
-
-
-
-
-
The interest of key management personnel and their related entities in options of the Company as at 30
June 2015 are:
Total number of options
Number of options
granted during the year
Number of options
exercised during the year
2015
2014
2015
2014
2015
2014
P Curigliano
K Jayesuria
300,000
300,000
600,000
300,000
300,000
600,000
-
-
-
300,000
300,000
600,000
-
-
-
-
-
-
23. REMUNERATION OF AUDITORS
Amounts received, or due and receivable by the auditors of the entity for:
- MSI Ragg Weir (Australia)
Auditing or reviewing the financial report
Taxation services
- TY Teoh International (Malaysia)
Auditing or reviewing the financial report of controlled entities
Taxation services for controlled entities
- J Wong and Associates (Singapore)
Auditing or reviewing the financial report
Consolidated Group
2015
$
2014
$
48,082
7,840
3,313
855
1,446
61,536
47,140
7,650
3,391
1,147
1,527
60,855
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24. COMMITMENTS AND CONTINGENCIES
(a) Operating lease commitments
Future operating lease rentals not provided for in the financial statements and payable:
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Consolidated Group
2015
$
2014
$
91,061
709,746
193,229
994,036
14,124
614,113
379,924
1,008,161
The parent entity’s operating lease for the Melbourne office expired on 1 May 2014 and a new lease was
negotiated for reduced floor space in the same building commencing on 14 July 2014. In 2015, revenue of
$903 (2014: $8,957) was earned from a sub-lease of the Melbourne office premises and recorded in the
Company’s gross revenue. The sub-lease agreement expired on 21 August 2014 and was not renewed.
(b) Guarantees
Consolidated Group
2015
$
2014
$
The parent has provided a cash security bond in favour of the property owner of the
parent entity’s leased premises in Melbourne, Australia.
102,187
56,095
(c) Legal contingencies
The Company has commenced legal action against the Crown in right of the State of South Australia
pertaining to breaches of contract and infringements of copyright. At this stage, the expected cost of
this action and any damages are uncertain and accordingly the directors do not make a disclosure as to
the estimated costs or proceeds of this action.
25. EARNINGS PER SHARE
The following reflects the income and share data used in the calculations of
basic and diluted earnings (loss) per share:
Net earnings
Adjustment
Net loss attributable to outside equity interests
Earnings used in calculating basic and diluted earnings per share
Weighted average number of ordinary shares used in calculating basic
earnings per share:
Weighted average number of ordinary shares used in calculating diluted
earnings per share:
Basic Earnings Per Share
Diluted Earnings Per Share
Consolidated Group
2015
$
2014
$
1,059,907
1,443,513
(213)
1,060,120
(212)
1,443,725
Number of Shares
Number of Shares
32,659,758
32,659,758
32,719,544
32,659,758
2015
cents
2014
cents
3.246
3.240
4.420
4.420
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26. SEGMENT INFORMATION
Operating Segments
The Group operates in the computer technology, software and services industry with particular emphasis on
healthcare and associated professional services.
The Group has identified its operating segments based on the internal reports that are reviewed and used
by the executive management team (‘the chief operating decision maker’) in assessing performance and in
determining the allocation of resources.
The operating segments are identified by management based on the nature of the service provided.
Discrete financial information about each of these operating service lines is reported to the executive
management team on at least a monthly basis.
The reportable segments are based on aggregated operating segments determined by the similarity of the
services provided, the similarity of the customer bases, the common reporting and management systems
used and the common regularity environment applicable to each reportable segment. There is a clear
designation of responsibility and accountability by the chief operating decision makers for the management
and performance of these reportable segments.
The Group comprises the following main operating segments:
Hospitals/Day Surgeries
Information system applications for the hospital and day surgery market to
deliver better and more integrated health care.
e-Health
Other
Comprehensive suite of applications that provide the management of
population outcomes for communities of common interest.
Products and services delivered to non-healthcare customers and include
revenues and expenses associated with third party products and cost
recoveries from customers.
Corporate
Expenditure associated with Corporate, Sales and Marketing activities.
Segment accounting policies
The Group generally accounts for inter-segment sales and transfers as if the sales or transfers were to third
parties at current market prices. Revenues are attributed to geographic areas based on the location of the
assets producing the revenues.
During the financial year there were no changes in segment accounting policies that had a material effect on
the segment information.
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Geographical Segments
Although the Group’s divisions are managed on a global basis they operate in two main geographical areas:
Australia
This is the home country of the main operating entity. The corporate head office is based in Melbourne,
Victoria. The Company also has a presence in Western Australia for the provision of professional services
and product development.
Malaysia
In prior years, the Group operated in the ASEAN region with local resources employed to provide support
to Southeast Asian clients of the Group. Currently, there is a presence in the region with a view to future
engagement in the market.
In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of customers. Segment assets are based on the geographical location of the assets.
Primary
Reporting
Business
Segments
Revenue
Sales to customers
outside the
consolidated entity
Total segment
revenue
Total consolidated
revenue
Results
Segment result
Income tax expense
Non-controlling
interests
Net profit/(loss)
Assets
Segment assets
Liabilities
Segment liabilities
Cash flows from
operating activities
Cash flows from
investing activities
(Acquisition of
property, plant &
equipment, intangible
assets and other non-
current assets)
Cash flows from
financing activities
Hospitals/Day
Surgeries
e-Health
Other
Corporate
Consolidated
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
1,650,504
2,593,842
2,306,270
2,119,686
582,335
537,559
1,650,504
2,593,842
2,306,270
2,119,686
582,335
537,559
-
-
-
-
4,539,109
5,251,087
4,539,109
5,251,087
4,539,109
5,251,087
1,412,339
1,449,478
850,240
1,341,072
406,160
198,870
(1,608,832)
(1,545,907)
1,059,907
1,443,513
2,190,198
2,456,609
3,060,391
2,007,539
772,750
509,119
870,987
1,135,232
1,217,042
927,711
307,304
235,271
-
-
-
-
6,023,339
4,973,267
2,395,333
2,298,214
34,655
408,101
318,676
271,858
34,397
83,536
409,337
650,608
797,065
1,414,103
(60,427)
(320,812)
(555,670)
(213,710)
(59,978)
(65,668)
(713,753)
(511,458)
(1,389,828)
(1,111,648)
1,031
(2,995)
9,485
(1,995)
1,024
(613)
12,183
(4,762)
23,723
(10,365)
Other segment information:
Depreciation
2,065
2,425
18,992
1,615
2,050
740
24,395
3,622
47,502
8,402
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26. SEGMENT INFORMATION (CONTINUED)
Secondary Reporting
Geographical
Australia
International
Consolidated
2015
2014
2015
2014
2015
2014
Segment revenue
4,534,731
5,251,086
4,378
-
4,539,109
5,251,086
Segment assets
Segment Result
Other segment information
Acquisition of property, plant and equipment,
intangible assets and other non-current assets
Major Client
7,158,377
6,089,142
(1,135,038)
(1,115,875)
6,023,339
4,973,267
1,059,907
1,443,513
1,389,828
1,111,648
-
-
-
-
1,059,907
1,443,513
1,389,828
1,111,648
The Company’s former major client, SA Health, which contributed more than 10% of the Company’s
revenue in previous years, ceased being a client from 1 April 2015 although the Company’s obsolete
CHIRON and Harmony software applications continue to be used at SA Health hospitals. Legal proceedings
are currently on foot in the Federal Court in Adelaide to determine the parties’ respective rights. Refer to
Note 24(c)
27. SHARE-BASED PAYMENTS
(a) Employee Share Option Plan
The Employee Share Option Plan was adopted when the Company was listed. The plan allows the
Company to grant options over shares to key executives and directors and other employees as selected
by the Directors to enable them to participate in the future growth and profitability of the Company,
to provide an incentive and reward for their contributions and to attract and maintain personnel. The
options are issued at no consideration. The exercise price of options is based on the weighted average
market price of the Company’s Shares during the five trading days up to and including the date of grant
of the option or each other date or period as the Directors consider appropriate.
Set out below are summaries of options granted under the plan:
Grant
Date
Expiry
Date
Exercise
Price
Consolidated and parent entity – 2015
5 July 2013
5 July 2018
19 Dec 2013
19 Dec 2018
26 May 2014
26 May 2019
10 June 2015
10 June 2020
$0.15
$0.65
$0.75
$0.65
Weighted average exercise price
$0.56
TOTALS
1,290,000
Balance
at start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Expired/
forfeited
during
the year
Number
Balance
at the end
of the year
Number
Exercisable
at the end
of the year
Number
300,000
690,000
300,000
-
-
-
-
390,000
390,000
$0.65
-
-
-
-
-
-
-
-
-
-
-
-
300,000
690,000
300.000
390,000
1,680,000
$0.58
100,000
230,000
100,000
-
430,000
$0.56
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Balance
at start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Balance
at the end
of the year
Number
Exercisable
at the end
of the year
Number
Expired/
forfeited
during
the year
Number
(4,000)
(106,667)
-
-
-
-
-
-
-
-
-
-
-
-
300,000
690,000
300.000
(110,667)
1,290,000
$2.25
$0.56
-
-
-
-
-
-
-
Grant
Date
Expiry
Date
Exercise
Price
Consolidated and parent entity – 2014
31 July 2008
31 July 2013
8 Oct 2008
8 Oct 2013
5 July 2013
5 July 2018
19 Dec 2013
19 Dec 2018
26 May 2014
26 May 2019
$2.25
$2.25
$0.15
$0.65
$0.75
4,000 5
106,667 6
-
-
0
-
-
300,000
690,000
300,000
Weighted average exercise price
$2.25
$0.56
TOTALS
110,667
1,290,000
(b) Exempt Employee Share Plan
A plan under which shares may be issued by the Company to employees for no cash consideration was
adopted when the Company was listed. All directors, officers or employees who are from time to time
engaged in full or part time work for the Company are eligible to participate in the Exempt Employee
Share Plan.
Under the plan, eligible employees may be granted up to $1,000 worth of fully paid ordinary shares in
the Company for no cash consideration. The market value of the shares will be measured as the market
price quoted for buyers of the Company shares at the close of trading on the day immediately preceding
the date of the offer by the Directors as published by the ASX.
Offers under the plan are at the discretion of the Company and the shares shall not be transferred or
assigned by the holder within the period of three years from the date of issue or transfer to the holder
unless the holder ceases employment with the Company earlier than that date except that the holder
may at any time transfer all or any of his Shares to his spouse or to a company the majority of the
issued shares in which are beneficially owned by him or to any trust that the holder is a beneficiary of.
(c) Expenses arising from share-based payment transactions
There were no employee share-based payment transactions during the year.
5 Post-15:1 share consolidation, options previously issued to a director who has since resigned.
6 Post-15:1 share consolidation, options previously issued to employees who have since resigned.
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28. CONSOLIDATED STATEMENT OF CASH FLOWS
Reconciliation of Operating Profit/(Loss) before Income Tax to Net Cash provided by
Operating Activities
Consolidated Group
2015
$
2014
$
Operating profit/(loss) after income tax
1,059,907
1,443,513
Add (deduct) non-cash items:
Amortisation of Development Cost
Depreciation of fixed assets
Bad debt written off
Net loss/(gain) on disposal of plant and equipment
Movement in foreign currency translation
Net cash inflow/(outflow) from operating activities before change in
assets and liabilities
Change in assets and liabilities during the period:
(Increase)/Decrease in receivables
(increase)/Decrease in other assets
Increase/(Decrease) in provisions
Increase/(Decrease) in payables and deferred income
Net cash inflow from operating activities
211,371
47,502
-
(597)
(106,877)
1,211,306
(468,199)
(70,249)
(9,039)
82,948
746,767
209,953
8,402
15,337
-
28,494
1,705,699
(49,198)
(41,177)
67,725
(268,946)
1,414,103
29. EMPLOYEE BENEFITS AND SUPERANNUATION COMMITMENTS
(a) Employee Share and Option Plans
The parent entity has adopted two incentive plans to enable employees and directors to participate in
ownership of Global Health Limited. The directors have determined that the total number of securities
which may be issued pursuant to the Exempt Employee Share Plan and Employee Share Option Plan in
any five year period must not exceed 5% of the total number of securities on offer from time to time.
This limitation only applies to new offers of securities by the parent entity and not to existing securities
purchased on market under the Exempt Employee Share Plan.
(b) Employee Share Option Plan (‘ESOP’)
The options issued under the ESOP are not quoted on the Australian Stock Exchange.
Employee Share Options are issued under the terms and conditions of the Plan as disclosed on the
Company’s website. Should an employee cease employment before the completion of 2 years after the
issue of any employee option, the option issued automatically lapses, except where cessation is due
to death or total permanent disability, retirement, redundancy or any other reason, based on which the
directors believe is fair and reasonable to warrant the employee maintaining their right to exercise the
option in which case they will have six (6) months to exercise the options.
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Opening balance
Issued
Exercised
Cancelled
Closing balance
Consolidated Group
2015
Number
2014
Number
1,290,000
390,000
-
-
1,680,000
110,667
1,290,000
-
(110,667)
1,290,000
During the financial year and up to the date of these accounts, 390,000 options were issued
(2014: 1,290,000 issued7; 110,667 cancelled).
The value ascribed to the options issued was determined using an options valuation pricing model.
The market price of the ordinary shares of Global Health Limited was $0.375 on 30 June 2015 (2014: $0.54).
(c) The Exempt Employee Share Plan (‘EESP’)
The EESP is open to all eligible employees including directors (but subject first to shareholder approval
in general meeting), be they full-time or part-time. The EESP allows for the allocation of up to $1,000
worth (market value) of shares per annum per eligible employee. The shares can either be newly issued
or purchased on market.
The shares are issued free of consideration. Participants will not be permitted to dispose of their shares
until three years after the date of acquisition unless they leave the employment of the Company.
The number of shares issued to participants in the plan is the offer amount divided by the weighted
average price at which the Company’s shares are traded on the Australian Stock Exchange during the
week up to and including the date of grant.
(d) Superannuation Plans
The Company contributes to various superannuation plans under which its employees are entitled
to benefits on retirement, disability or death. The parent entity makes contributions as specified by
Australian legislation. Employees contribute at various percentages of their wages and salaries.
30. EVENTS SUBSEQUENT TO REPORTING DATE
On 29 July 2015, the Company finalised the acquisition of the medical software business and associated
assets of Abaki Pty Ltd. The maximum consideration of $500,000 in 4 equal parts of cash and Global Health
shares will take place over 37 months. The cash component will be funded out of working capital.
31. DIVIDENDS
No provision is made for dividends on or before the end of the year.
7 300,000 on 5 July 2013, 690,000 on 19 December 2013 and 300,000 on 26 May 2014.
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32. GLOBAL HEALTH LIMITED PARENT COMPANY INFORMATION
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets/Liabilities
Equity
Contributed equity
Reserves
Accumulated Losses
Total Equity
Financial Performance
Profit /(Loss) for the year
Other comprehensive income
Total Comprehensive income/ (loss)
Global Health Limited
2015
$
2014
$
1,647,790
4,364,658
6,012,448
2,409,749
166,903
2,576,652
3,435,796
20,656,242
29,979
(17,250,425)
3,435,796
951,492
-
951,492
1,867,364
3,097,909
4,965,273
2,347,371
133,598
2,480,969
2,484,304
20,656,242
29,979
(18,201,917)
2,484,304
1,448,083
-
1,448,083
Other than that stated in Note 24 to the financial statements, the Company is not subject to any contingent liabilities or contractual
commitments
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Shareholder Information
This shareholder information is made up to 14 September 2015.
SHAREHOLDING
1. Distribution of Shareholder Numbers
Category (size of holding)
Number of Holders
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
471
328
119
145
29
1,092
210,137
801,198
957,823
4,383,456
26,454,048
32,806,662
2. The number of security investors holding less than a marketable parcel of 1,785 securities ($0.28 per
share on 14 September 2015) is 598 and they hold 382,531 securities. An unmarketable parcel of
shares is generally a parcel of shares with a total value of less than $500.
3. The names of the twenty largest holders of ordinary shares are:
Shareholder
Micron Holdings Pty Ltd
Micron Holdings Pty Ltd
National Nominees Limited
Mrs Elizabeth May Priscilla Thomas
Alumootil Mathew Cherian
Mr David Leroy Boyles
Dr Serene Lim
Chris Bell Investments Pty Ltd
Roxanne Investments Pty Ltd
B & R James Investments Pty Limited
Ms Serene Lim & Mr Nicholas Russell Ward
Simkar Pty Ltd
Asket Pty Ltd
Holder Super Pty Ltd
Lomas Superannuation Pty Ltd
Pacific Nominees Limited
Ranjenco Pty Ltd
Ubs Wealth Management Australia Nominees Pty Ltd
Abaki Pty Ltd
Bujo Pty Ltd
Mr Mark David Holder
No. of shares held
% of issued shares
13,558,334
3,804,602
1,809,734
1,530,702
1,256,434
400,000
400,000
300,000
280,000
240,000
215,000
212,266
201,074
199,528
195,000
190,742
180,000
150,000
146,904
130,000
125,736
41.33
11.60
5.52
4.67
3.83
1.22
1.22
0.91
0.85
0.73
0.66
0.65
0.61
0.61
0.59
0.58
0.55
0.46
0.45
0.40
0.38
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SUBSTANTIAL SHAREHOLDERS
Shareholder
Micron Holdings Pty Ltd
Micron Holdings Pty Ltd
National Nominees Limited
No. of Ordinary shares
Percentage
13,558,334
3,804,602
1,809,734
41.33
11.60
5.52
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Corporate Directory
Directors
Share Registrar
Mr Steven Leigh Pynt
(Independent Non-Executive Chairman)
Mr Mathew Cherian
(Chief Executive Officer and Managing Director)
Mr Grant Smith
(Independent Non-Executive Director
Mr Robert Knowles AO
(Independent Non-Executive Director)
Company Secretary
Mr Peter Curigliano CPA
Head Office
Level 2, 607 Bourke Street
Melbourne, Victoria 3000
Australia
Telephone: +61 (3) 9675 0600
Facsimile: +61 (3) 9675 0699
Email:
Website: www.global-health.com
info@global-health.com
Malaysia Registered Office
No.6 Jalan Bangsar Utama 9
Bangsar Utama
59000 Kuala Lumpur, Malaysia
Telephone: +60 (3) 2287 6833
Facsimile: +60 (3) 2287 1032
Auditors
MSI Ragg Weir Chartered Accountants
2/108 Power Street
Hawthorn, Victoria 3122, Australia
Telephone: +61 (3) 9819 4011
Facsimile: +61 (3) 9819 6780
Website: www.raggweir.com.au
Link Market Services Limited
Locked Bag A14
Sydney South, NSW 1235, Australia
Telephone: 1300 554 474
Facsimile: +61 (2) 9287 0303
Website: www.linkmarketservices.com.au
Email: registrars@linkmarketservices.com.au
Solicitors
Finlaysons, Adelaide, Australia
McDonald Pynt Lawyers, Perth, Australia
Davies Collison Cave, Melbourne, Australia
Bankers
Bank of Western Australia Ltd
HSBC Ltd
Stock Exchange Listing
Global Health Limited shares trade on the
Australian Stock Exchange
Code: GLH
The home exchange is Australian Stock Exchange
(Melbourne) Limited
Further Information
For further information about Global Health
Limited and its operations, refer to Company
announcements to the Australian Stock Exchange.
Information is also available on our website:
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