Connecting
clinicians
and
consumers
GLOBAL HEALTH LIMITED CONSOLIDATED ENTIT Y
ANNUAL REPORT 2016
Table
of Contents
Review
of operations
Your Directors submit their report for the financial year ended 30 June 2016.
CHAIRMAN’S LETTER
Dear Shareholders,
I am pleased to report that the Company achieved a Net Profit after Tax of $1.375m in another challenging year.
Following last year’s Annual General Meeting, the Company signed key contracts with ACT Health and two
large Primary Health Networks which helped consolidate its reputation as Australia’s leading collaborative
healthcare solution provider.
The business and assets of healthcare software vendor Abaki Pty Ltd which were acquired in July 2015, have
been successfully integrated into the Company’s offering, and continue to bolster our development and support
capability with a Vietnamese offshore centre.
The Company’s legal action against SA Health for breaches of contract and infringements of copyright by the
State of South Australia, has come to a close resulting in a pleasing outcome as announced to the market in
August 2016. Recognition of part of this revenue as disclosed in the settlement details, along with associated
legal costs, helped boost the Company’s final result.
My sincere thanks to all our employees and my fellow Board Members for their hard work, 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
3
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS CHIEF EXECUTIVE OFFICER’S OPERATIONS REPORT
FINANCIAL SUMMARY
Your Directors submit their report for the financial year ended 30 June 2016.
Result Highlights
· Revenue up 42% (+$1,910,341) to $6,449,450 inclusive of $1,250,000 in SA Health licence arrears as per
settlement of the South Australian licence dispute.
· Revenue up 36% to $5,199,450 excluding SA Health revenue in FY15 and FY16.
· Net Profit after Tax up 30% to $1,375,154.
· Earnings per Share (EPS) up 29% to
4.18 cents per share.
The Company’s core Operational Revenue is
derived from the sale of software licences
and annual subscriptions to:
· Specialists, General Practitioners,
Community Health and Allied Health
Providers (the non-acute or Community
sector); and
· Overnight and Day Hospitals (the acute
or Hospital sector).
A federal government Research and
Development Tax Incentive of $518k
(FY15: $532k) represents the bulk of Other
Revenue received in the reporting period.
COMMUNITY (NON-ACUTE) SECTOR
Revenue by Segment
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
0
Jun-14
Jun-15
Jun-16
Community Revenue
2,119,686
1,962,273
3,263,242
Hospital Revenue
2,593,842
1,994,501
2,486,041
Other
537,559
582,335
700,167
Revenue and margins from customers delivering healthcare services in the community has experienced
record growth with revenue increasing by 66% (up $1,300,969) and segment EBITDA increasing by 108%
(up $566,192) over the prior year.
MasterCare EMR – Community Health, Mental Health and Chronic Disease Management
The core product in this segment is the Company’s MasterCare EMR – a multi-disciplinary, team-based
shared Electronic Medical Record. MasterCare EMR has experienced record revenue and earnings growth
achieved through a number of significant contracts won since 1 July 2015 including:
·
·
·
·
·
ACT Mental Health, Justice Health and Alcohol & Drug Services territory-wide;
Adelaide Primary Health Network covering the metropolitan population of 1.2m in South Australia;
Country South Australia Primary Health Network covering the remaining 30% of the
South Australian population outside metropolitan Adelaide;
360 Health + Community healthcare service provider delivering over 150,000 community services
annually across Western Australia;
Malaysian Ministry of Health’s MENTARI Mental Health Network in 12 of the 13 states
and territories across Malaysia.
4
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS A number of other significant opportunities for MasterCare EMR are in the process of finalisation
as at 30 June 2016.
Primary Clinic – General Practice, Specialists and Allied Health
In July 2015, the Company announced the acquisition of the PracNet and MediNet software and associated
assets of Abaki Pty Ltd. These practice and medical software applications provide the Company with a
foothold and competitive market offerings across General Practice, Specialists and Allied Health. These
assets have been re-launched and marketed under the ‘Primary Clinic’ brand (www.primaryclinic.com.au).
The acquisition has been smoothly integrated within the Company’s operations with productivity benefits
and positive financial contributions in line with expectations. Over the reporting period, the Primary Clinic
Business increased revenues with positive cash flow and positive earnings contributions to the Group.
Customer numbers were largely constant over the reporting period with revenue and margin growth
derived from value-add sales of the Company’s wider portfolio of software applications to existing
customers of Primary Clinic.
The Company has provided additional marketing resources to expand the number of customers in this
highly competitive sector of the healthcare market and believe we will see the benefit of this investment
during the current financial year.
ReferralNet – Connectivity and Enterprise Integration
ReferralNet is the brand within the Company’s portfolio that provides a platform for the:
· secure electronic exchange of correspondence between healthcare providers in separate organisations;
·
integration of patient and clinical records across disparate systems within an organisation and,
· claims processing for organisations from funders of healthcare services such as private health funds,
Medicare Australia and the DVA (Department of Veterans’ Affairs).
Connectivity and interoperability are core to the Company’s motto of “Connecting Clinicians and
Consumers” and is recognised by governments and professional peak bodies as the key to improving
productivity and patient outcomes in healthcare.
Achieving interoperability with other Secure Messaging Platforms has proven challenging for technical and
commercial reasons. Nevertheless, over the reporting period, the Company made some significant headway:
· execution of a bilateral message interchange agreement and the commencement of an interoperability
pilot with Argus Connect – a Telstra Health company;
· execution of a bilateral message interchange agreement and interoperability testing with Queensland-
based Medical Objects; and
· execution of a Preferred Supplier agreement with the Australian Psychological Society – the leading
professional association for mental health practitioners with over 22,000 members.
In addition to the Company’s commitment to interoperable secure messaging, the Company has increased
ReferralNet organically through the ‘freemium’ business model and successfully converted a number of
freemium subscribers to paying, ‘Premium’ subscribers.
Over the reporting period, the Connectivity business unit increased revenue by over 100% with positive
cash flow and positive earnings contributions to the Group.
We believe this will continue to grow once the benefits of interoperability with other Secure Messaging
Platforms is demonstrated in the market.
5
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS HOSPITAL (ACUTE) SECTOR
Revenue and margins from customers delivering services within hospitals has been flat over the reporting period.
Core subscriptions in this sector are for the use of the Company’s MasterCare PAS (Patient Administration
System) to manage patient workflow from pre-admission through to discharge including the management of
beds, theatres, medical records, billing and receipting.
A dedicated Business Development Manager was recruited in November 2015 to develop new customer
opportunities and increase customer value through the bundling of complementary products.
Over the reporting period, the Company implemented MasterCare PAS at three new private hospitals and
commenced the bundling of the Company’s LifeCard Patient Portal, MasterCare Connect Provider Portal,
MasterCare Data Warehouse and ReferralNet Secure Messaging platform at six “early adopter” hospital sites.
It is expected that these early adopters will demonstrate productivity gains for our hospital customers over the
coming months.
Given the relatively small size of the Australian private hospital market with a total of approximately 600 day
and overnight private hospitals, the Company will commence overseas market development to achieve scale in
the medium to long term.
FINANCIAL COMMENTARY
Expenses increased by $1,191,770 (up 36%).
The $143,039 increase (up 521%) in Cost of
Goods Sold are largely due to increased costs
associated with third party revenue such as
SMS services and appointment commissions,
from the Primary Clinic (ex-Abaki) business.
The $60,672 increase (up 8%) in General
and Administration relate primarily to the
engagement of three additional sales staff
in November 2015 reflecting the increased
confidence in the Company’s prospects at
the time, as well as to compensate for the
distraction of key senior executives to litigation
matters which are now settled.
The $988,059 increase (up 39%) in Salaries
and Related costs is the most significant
impact on the overall expense profile for
the period.
Expense Trends
$5,000,000
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
0
2014
2015
2016
Salaries & Related
2,614,639
2,508,020
3,496,079
General & Administration
840,158
777,354
838,026
Costs of Goods Sold
136,803
27,436
170,475
A quick succession of significant projects secured from December 2015 meant the Company was under-
resourced coming into the second half of the financial year. Prompt action was taken through the engagement
of contractors and recruitment of new operational staff.
Key payment milestones from these projects have slipped into the first quarter of this (FY17) financial year
resulting in a mismatch between revenue and expenses over the reporting period.
6
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS The core financial measures of revenue,
EBITDA, NPAT and EPS growth are trending up
and are forecast to continue into the future.
FINANCIAL POSITION
At 30 June 2016, the Company had Net Assets
of $5,056,903 – an increase of $1,428,897
from 30 June 2015.
Expenditure on Research and Development
has been increased in the second half of the
reporting period to catch up with delivery
timelines that had fallen behind due to the
competing demands on cash for expenditure
on the SA Health litigation over the past 18 to
36 months and working capital from a run of
significant project contracts secured in quick
succession.
In order to adequately address these
competing demands on cash, the Company
secured $1,899,427 in debt over the reporting
period. This has resulted in a debt to equity
ratio of 37% as at 30 June 2016.
Closing cash plus Net Receivables was up
$2,106,600 (+276%) to $2,868,604.
The SA Health settlement and payment of
$5.5m (GST inclusive) was made on 16 August
2016 and positions the Company to repay the
debt and still maintain a healthy cash position.
Re-invigorated R&D has enabled the Company
to launch a suite of Consumer engagement
applications designed to enable healthcare
consumers to better engage with their care
providers and pro-actively manage their health
and wellness.
Notwithstanding the strong demands on
the Company’s cash over the past year, the
financial position of the Company is at its
strongest in over a decade.
Financial Performance Profile
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
0
Jun-14
Jun-15
Jul-16
Revenue
$5,251,086
$4,539,109
$6,449,450
Operating Expense
$3,591,600
$3,312,810
$4,504,580
EBITDA
NPAT
$1,659,486
$1,226,299
$1,944,870
$1,443,513
$1,059,907
$1,375,154
EBITDA Margin
NPAT Margin
32%
27%
27%
23%
30%
21%
Cash + Net Receivables
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
-500,000
Jun-14
Jun-15
Jul-16
Closing Cash
1,117,444
548,404
1,149,028
Net Receivables
-165,918
213,600
1,719,576
Cash + Net Receivables
951,526
762,004
2,868,604
7
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS FORWARD OUTLOOK
Over 2000 healthcare organisations use the Company’s applications across hospitals, community and chronic
disease health centres, specialists, general practice and allied health. The historical business of the Company
has been selling software to healthcare businesses – commonly referred to as B2B. The suite of software
applications for healthcare providers and businesses are:
· MasterCare EMR – a team-based, multi-disciplinary clinical system for mental health, chronic disease
management and community health;
· MasterCare Connect – a clinical viewer for providers to securely create, view and exchange patient
correspondence such as referrals, specialist letters, orders and results with their healthcare colleagues;
· MasterCare PAS – a Patient Administration System for the back office operations of day and overnight
hospitals;
· ReferralNet – a platform for connectivity providing Secure Message Delivery, payment processing to
public and private health funds and enterprise integration; and
· Primary Clinic – practice management and clinical software for GPs, Allied Health and Specialists.
This portfolio of discrete applications integrate with each other through web services or Application
Programming Interfaces. This means the Company’s portfolio is open for integration with complementary
third party software applications that enhance the goal of “streamlining the patient journey“.
In June, the Company “soft launched” its initial portfolio of consumer products available on the Web, with
mobile apps for Apple and Android smart phones. These integrate with the B2B portfolio and develops a
Business-to-Consumer (B2C) opportunity for the Company and its customers.
LifeCard (www.lifecard.com) is a Personal Health Record for consumers, accessible anywhere, anytime and
from any device. Healthcare consumers can share some or all of their health record with anyone - clinicians,
care providers, siblings, parents or fitness trainer; for a specific period or until they decide otherwise, and
choose the extent of access.
HotHealth (www.hothealth.com) is a platform for developing a digital health community around the website of
an organisation to engage online with their consumers (patients, clients and the public).
Business customers can interact online via chat or email, and exchange information such as staff profiles,
news, articles, videos and events within their community of healthcare consumers.
HotHealth includes links to patient portals, online aggregators and provides a web-store for financial
transactions between healthcare businesses and their community of healthcare consumers.
For consumers, HotHealth provides a single application to their multiple healthcare providers and is seamlessly
integrated to their LifeCard Personal Health Record.
8
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS Global Health Cloud Hosting
In line with market trends, the Company continues to transition from the higher-priced, customised product, to
a more volume-based, commodity model based on Commercial-off-the-Shelf (COTS) products delivered as a
fully managed cloud service (‘Software as a Service’ (SaaS)).
Over the reporting period the Company has commenced the logical extension to this strategy by establishing
the Global Health Managed Cloud Service for customers of the Company’s enterprise and SaaS platforms.
The provision of integrated Cloud applications and infrastructure extends the Company’s sales reach to the
global marketplace and significant new revenue opportunities in subsequent years.
For further information please contact:
Mathew Cherian, CEO and Managing Director
Global Health Limited
T: 61 3 9675 0688
E: mathew.cherian@global-health.com
For and on behalf of Global Health Limited,
Mathew Cherian
Chief Executive Officer and Managing Director
9
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 REVIEW OF OPERATIONS MasterCare ®
A business and clinical solution that supports
healthcare delivery across acute and non-acute sectors
G L O B A L H E A LT H L I M I T E D C O N S O L I DAT E D E N T I T Y A N N UA L R E P O R T 2 016
Directors’
Report
Your Directors present their report on Global Health Limited consolidated entity (‘Group’) for the financial year
ended 30 June 2016.
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 58
Independent Non-Executive Chairman
Mr Pynt has been an independent non-executive director since 2000 and Chairman since 2005.
Mr Pynt is Legal Director of Muzz Buzz Franchising Pty Ltd, a drive through coffee store franchisor.
Mr Pynt was previously a Director of the Perth legal firm, McDonald Pynt, and his main area of practice
was in commercial law including corporations law and contracts. He was also a Fellow of CPA Australia
and a member of the Australian Institute of Company Directors, the Racing Penalities Appeals Tribunal and
Chairman of the Commercial Tribunal of WA.
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 59
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.
11
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT
Other Current Directorships
None
Former Directorships in the last 3 years
None
Special Responsibilities
Managing Director
3. Grant Smith BComm, AAIM, ASIA Age 63
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 and Papua New Guinea.
Mr Smith is also involved in utilising digital technology to generate increased productivity and efficiencies
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 MAICD, AO Age 69
Independent Non-Executive Director
Mr Knowles is a farmer and company director.
He 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 and Chair of the Royal
Children’s Hospital.
Mr Knowles was Victorian Minister for Health from 1996 until 1999 and a member of the Victorian
Legislative Council from 1976-1999. He has also served as Chairman of Food Standards Australia
and New Zealand and as an Aged Care Complaints Commissioner.
Other Listed Company Current Directorships
None
Former Directorships in the last 3 years
None
Special Responsibilities
None
12
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT
COMPANY SECRETARY
Since October 2005, the position of Company Secretary has been held by Mr Peter Curigliano [B Bus
(Accounting), CPA]. This role is responsible for the Company’s continuous disclosure requirements,
preparation of the Annual Report, Annual General Meetings and announcements to the share market.
Mr Curigliano was appointed Chief Financial Officer in October 2007 after joining the Company as Financial
Controller in May 2004. As Chief Financial Officer of the Company, Mr Curigliano has direct responsibility for
corporate matters and is primarily responsible for financial reporting, treasury and managing the financial risks
of the Company.
He has in excess of 25 years’ experience in corporate accounting including financial and business planning and
compliance and taxation.
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 2016, 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
Mr M Cherian
Mr S L Pynt
Mr G Smith
Mr R Knowles
6
6
6
6
6
6
6
6
-
1
1
-
-
1
1
-
DIRECTORS’ INTERESTS
Relevant interests of the Directors and their closely related parties in the shares of the Company at the date of
this report are:
Mr M Cherian
Mr S L Pynt
Mr G Smith
Mr R Knowles
Total
Ordinary Shares
18,619,370
232,408
300,000
20,000
19,171,778
There are no options currently issued to Directors.
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 applications within an enterprise and across the healthcare value chain.
13
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT 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 $1,375,154 (2015: $1,059,907).
Dividends
No dividends have been declared or paid on the ordinary shares for the financial year ended 30 June 2016.
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
2016 and up to the date of this report.
SIGNIFICANT EVENTS AFTER REPORTING DATE
On 2 August 2016, the Company, its subsidiary Working Systems Software Pty Ltd and SA Health reached
settlement regarding SA Health’s continuing use of CHIRON software. Part of the settlement required
SA Health to pay a licence fee of $5,000,000 plus GST for the period of 1 April 2015 - 31 March 2020,
on or before 30 August 2016. This amount was received in full by the Company on 16 August 2016.
A formal announcement regarding the settlement terms was made to the share market on 4 August 2016.
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 is payable over 37 months. The cash component has been and 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.
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
5 July 2013
5 July 2018
19 December 2013
19 December 2018
26 May 2014
10 June 2015
26 May 2019
10 June 2020
$0.15
$0.65
$0.75
$0.65
300,000
530,000
300,000
390,000
1,520,000
There were no share options which expired during the financial year.
14
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT 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 for 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. There were no remuneration consultants used during the year.
· 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.
15
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT 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
$
Key Management Personnel:
Mr P Curigliano
Mr K Jayesuria
TOTAL
156,328
137,513
689,538
-
-
-
-
-
-
-
3,922
24,799
3,043
3,043
16,292
13,064
64,163
-
4,199
-
-
2,758
-
6,957
-
-
-
-
-
-
-
45,206
319,337
35,080
35,080
175,378
150,577
760,658
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
$
2016
Name
Directors:
Mr S L Pynt
Mr M Cherian
Mr G Smith
Mr R Knowles
2015
Name
Directors:
Mr S L Pynt
Mr M Cherian
Mr G Smith
Mr R Knowles
41,284
290,339
32,037
32,037
41,284
278,526
32,037
32,037
-
-
-
-
-
-
-
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
Key Management Personnel:
Mr P Curigliano
Mr K Jayesuria
TOTAL
165,159
122,209
671,252
Service Agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. 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.
16
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT 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
Mr M Cherian
Chief Financial Officer
Mr P Curigliano
Technology Delivery Manager
Mr 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 granted to key management personnel of the Company
Key Management Personnel
Mr K Jayesuria
2016
4000
2015
-
2016
-
2015
-
Number of shares issued
Number of options granted
During the financial year and up to the date of these accounts, the Company, on 12 January 2016, issued
$1,000 worth of unlisted ordinary shares (equivalent to 4,000 shares) each to 10 employees of the Company at
an issue price of $0.25 per share.
These unlisted employee shares cannot be transferred or assigned by the holder within a 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.
During the previous financial year, 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.
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 thereafter.
During the financial year and up to the date of this report, nil options have been exercised.
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 $13,608
(2015: $24,171).
17
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT 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 claimed 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 sought damages, declarations and
a permanent injunction restraining the State from continuing to use Chiron and Harmony. The South Australian
Minister for Health 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
contended did not apply to computer programs.
On 2 August 2016 the Company, its subsidiary Working Systems Software Pty Ltd and SA Health reached
settlement regarding SA Health’s continuing use of CHIRON software as detailed in Note 29 Events
subsequent to Reporting Date.
NON-AUDIT SERVICES
The Group had a need to employ the auditor – MSI Ragg Weir – on assignments additional to their statutory
audit duties as detailed in Note 22.
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 22 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.
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.
18
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ 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 2016
19
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT
20
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ REPORT ReferralNet
A cloud-based platform for connectivity across
the healthcare sector
G L O B A L H E A LT H L I M I T E D C O N S O L I DAT E D E N T I T Y A N N UA L R E P O R T 2 016
Corporate
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 (2014 – Version 3) as well as current standards of best practice for the entire financial year ended
30 June 2016.
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 Chief Executive Officer 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.
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.
22
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT 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;
· develop 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; and
· 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 implemented 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:
2016
2015
Number
Percentage
Number
Percentage
Women on the Board
Women in senior management
Women employees in the Company
-
-
13
0%
-
40%
-
1
10
0%
12%
37%
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 an 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.
23
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT 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.
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; and
· 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; and
· a passion for and strong commitment to the success of the activities of the Company.
24
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT 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.
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; and
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 removal of and contributing to the performance assessment of 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; and
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; and
· 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.
25
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT
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 six 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 2016, 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.
26
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT 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, including liaison with external auditors. 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.
27
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT 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.
28
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT ASX RECOMMENDATIONS
Complied Note
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.
-
1
2
29
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT 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
-
-
3
4
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 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 3: 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 4: 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.
30
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT LifeCard
A personal health record that empowers consumers to be
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G L O B A L H E A LT H L I M I T E D C O N S O L I DAT E D E N T I T Y A N N UA L R E P O R T 2 016
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 34 to 71 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 2016 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 18 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 2016.
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 2016
32
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 DIRECTORS’ DECLARATION
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 LT H L I M I T E D C O N S O L I DAT E D E N T I T Y A N N UA L R E P O R T 2 016
Annual
Financial
Report
2016
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.
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 2016.
34
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 ANNUAL FINANCIAL REPORT STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
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
16
17
24
24
Consolidated Group
2016
$
2015
$
4,837,110
906,187
706,153
6,449,450
(3,496,079)
(170,475)
(838,026)
1,944,870
(97,568)
(122,048)
(364,331)
14,231
1,375,154
-
1,375,154
(18,757)
1,356,397
1,373,270
1,884
1,375,154
1,354,477
1,920
1,356,397
Cents
4.187
4.173
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
-
1,059,907
(106,953)
952,954
1,060,120
(213)
1,059,907
953,243
(289)
952,954
Cents
3.246
3.240
The above statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
35
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 ANNUAL FINANCIAL REPORT STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
Note
Consolidated Group
2016
$
2015
$
Current Assets
Cash and cash equivalents
Receivables
Other Assets
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 – Employee Benefits
Unearned income
Total Current Liabilities
Non-Current Liabilities
Interest bearing liabilities
Provisions – Employee Benefits
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
10
11
12
13
11
12
14
15
16
17
1,149,028
2,786,734
403,680
4,339,442
276,645
172,613
5,118,324
5,567,582
9,907,024
1,067,257
355,351
423,370
1,471,764
3,317,742
1,386,378
146,001
1,532,379
4,850,121
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
5,056,903
3,628,006
20,728,742
60,463
(15,596,046)
5,193,159
(136,256)
5,056,903
20,656,242
79,256
(16,969,316)
3,766,182
(138,176)
3,628,006
The above statement of financial position should be read in conjunction with the accompanying notes.
36
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 ANNUAL FINANCIAL REPORT STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016
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 2015
20,656,242
29,978
49,278
(16,969,316)
3,766,182
(138,176)
3,628,006
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
72,500
72,500
-
-
-
-
-
-
-
-
-
-
-
-
-
72,500
72,500
-
-
72,500
72,500
1,373,270
1,373,270
1,884
1,375,154
(18,793)
-
(18,793)
36
(18,757)
(18,793)
1,373,270
1,354,477
1,920
1,356,397
Balance 30 June 2016
20,728,742
29,978
30,485
(15,596,046)
5,193,159
(136,256)
5,056,903
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
The above statement of changes in equity should be read in conjunction with the accompanying notes.
37
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 ANNUAL FINANCIAL REPORT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016
Note
Consolidated Group
2016
$
2015
$
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
27
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
4,839,316
518,089
(4,743,208)
614,197
15,069
(97,568)
531,698
1,850
(149,273)
(1,457,457)
(1,604,880)
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)
Net cash inflow/(outflow) from operating and investing activities
(1,073,182)
(592,763)
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
1,915,578
(241,772)
1,673,806
600,624
548,404
1,149,028
176,337
(152,614)
23,723
(569,040)
1,117,444
548,404
The above statement of cash flows should be read in conjunction with the accompanying notes.
38
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 ANNUAL FINANCIAL REPORT
Notes to
the Financial
Statements
Global Health Limited and its controlled entities is a for-profit listed company limited by shares and domiciled in
Australia. The financial statements were authorised for issue by the Board of Directors on 29 September 2016.
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 31.
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’).
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.
39
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 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. Impairment tests are carried out on intangibles, receivables and subsidiaries.
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
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as
of 30 June 2016. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from
its involvement with the subsidiary and has the ability to affect those returns through its power over the
subsidiary.
A list of controlled entities is contained in Note 18 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. 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.
40
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 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 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.
(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. 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.
41
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
·
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 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.
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.
(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 Taxation 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 ATO
are classified as operating cash flow.
42
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (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
The Company and its wholly-owned Australian entities have implemented the tax consolidation legislation.
These were formally adopted on lodgement of the 2004 income tax returns.
The Company is 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
Intangible assets consist of the following:
1.
Development expenditure
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. 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.
2. Legal Fees – 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.
Yearly amortisation is in accordance with the period in which the claimed revenue is recognised.
43
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (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 and Amortisation
Plant and equipment, leasehold improvements and furniture and fittings of the consolidated entity are
depreciated/amortised on a diminishing value basis. Rates of depreciation/amortisation are calculated to
allocate the cost, less estimated residual value at the end of the useful lives of the assets.
The depreciation/amortisation rates used for each class of depreciable assets are:
Class of Asset
Leasehold Improvements
Plant and Equipment
Furniture and Fittings
Diminishing Value (%)
29 - 37
25 - 50
13 - 33
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
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.
(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 and other
comprehensive income 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.
44
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS Translation of controlled foreign entities
The results and financial position of all the Group entities 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.
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.
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.
Short Term Benefits
Liabilities arising in respect of wages, salaries, annual leave and other employee benefits expected to be
wholly 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 Term Benefits
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 corporate rates 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.
45
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 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 26.
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.
At each reporting date, the entity revises its estimate of the number of options that is 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.
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. Financial instruments are classified and measured as
set out below.
Classification and subsequent measurement
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.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost using the effective interest rate method.
Impairment of financial assets
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument
has been impaired.
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.
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.
46
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 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 the Company.
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.
(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.
47
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (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) 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 $518,089
(2015:$ 531,896) in relation to its research and development activities for the 2016 financial year.
(s) Borrowing Costs
Borrowing costs are expensed as incurred.
(t) 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
Refer to Note 1(g) Intangible Assets.
48
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
(u) 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 period.
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 9 Financial Instruments
AASB 15 Revenue from contracts
with customers
AASB 2014-5 Amendment to
Australian Accounting Standards
arising from AASB 15
AASB 2015-8 Amendments to
Australian Accounting Standards –
Effective date of AASB 15
AASB 16 Leases
This is likely to impact on the
provision method for trade
receivables. The impact of AASB
9 has not yet been quanitified.
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.
Whilst the impact of IFRS 16 has
not yet been quantified, the entity
currently has $872,606 worth
of operating leases which are
anticipated to be brought onto the
statement of financial position.
Interest and amortisation expense
will increase and rental expense
will decrease.
Effective for annual
reporting periods
beginning on or after
First applied in the
year ending
1 January 2018
30 June 2019
1 January 2018
30 June 2019
1 January 2019
30 June 2019
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
Consolidated Group
2016
$
2015
$
2,050,224
2,786,886
906,187
5,743,297
15,069
518,089
-
172,995
706,153
917,488
2,586,825
450,023
3,954,336
22,506
531,896
903
29,468
584,773
6,449,450
4,539,109
49
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 3. EXPENSES
Profit before income tax includes the following specific expenses
Cost of sales
Depreciation of non-current assets
Amortisation of Intangibles
Consolidated Group
2016
$
2015
$
170,475
122,048
364,331
27,436
47,502
211,371
Wages and salaries, net of Capitalised Development cost
3,496,079
2,508,020
Travel and accommodation
Operating lease payments
Finance cost (interest expense and bank charges)
4.
INCOME TAX EXPENSE
118,502
161,794
97,568
91,028
180,725
17,759
Consolidated Group
2016
$
2015
$
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%
412,546
317,972
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
128,316
(23,382)
203,988
(721,468)
-
(976,917)
1,447,755
470,838
133,883
3,133
(195,538)
(259,450)
-
(514,899)
1,243,767
728,868
Consolidated Group
2016
$
2015
$
1,149,028
-
1,149,028
548,404
-
548,404
50
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
6. RECEIVABLES
Current
Trade receivables
Impairment of receivables
Non-Current
Trade receivables
Consolidated Group
2016
$
2015
$
2,787,645
(911)
2,786,734
276,645
276,645
932,641
(911)
931,730
135,047
135,047
3,063,379
1,066,777
Provision for Impairment of Current Trade Receivables
Current trade receivables are non-interest bearing receivables 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
Consolidated Group
2016
$
2015
$
911
-
-
-
911
7,010
-
-
(6,099)
911
Trade receivables that are impaired
As at 30 June 2016, the following trade receivables of the Group were past due and impaired (2015: $911).
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
2016
$
2015
$
-
-
911
-
867
44
51
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS Trade receivables that are past due but not impaired
As of 30 June 2016, trade receivables of $138,848 (2015: $53,598) 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
Consolidated Group
2016
$
2015
$
67,865
44,118
26,865
44,550
9,048
-
Fair Values
The carrying value less impairment provision of trade receivables are assumed to approximate fair value.
7. OTHER ASSETS
Current
Prepayments
Security bonds
Consolidated Group
2016
$
2015
$
287,578
116,102
403,680
123,967
112,022
235,989
52
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 8. PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements – at cost
Accumulated amortisation
Plant and equipment – at cost
Accumulated depreciation
Consolidated Group
2016
$
2015
$
178,787
(92,065)
86,722
594,398
(508,507)
85,891
173,217
(40,769)
132,448
460,750
(446,227)
14,523
Property, plant and equipment (net)
172,613
146,971
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
9.
INTANGIBLES
Non-Current
Development expenditure – at cost*
Accumulated amortisation
Legal fees – protection of Intellectual Property – at cost
Accumulated amortisation
Total Intangibles, net
Intangibles
Carrying amount – as at 1 July
Additions
Amortisation
Carrying amount – as at 30 June
* This represents costs arising from the development phase of internal projects.
132,448
5,570
(51,296)
86,722
14,523
143,703
(1,583)
(70,752)
85,891
-
173,217
(40,769)
132,448
10,664
11,495
(903)
(6,733)
14,523
Consolidated Group
2016
$
2015
$
5,400,110
(738,932)
4,661,178
609,526
(152,380)
457,146
5,118,324
4,025,198
1,457,457
(364,331)
5,118,324
4,460,104
(526,981)
3,933,123
92,075
-
92,075
4,025,198
3,080,101
1,156,468
(211,371)
4,025,198
53
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 10. PAYABLES
Trade creditors
Other creditors and accruals
The carrying value of trade payables is assumed to approximate fair value.
11. INTEREST BEARING LIABILITIES
Current
Loans
Loan for Leasehold Improvements
Non-Current
Loans
Loan for Leasehold Improvements
Consolidated Group
2016
$
2015
$
712,326
354,931
1,067,257
416,755
301,375
718,130
Consolidated Group
2016
$
2015
$
355,351
-
355,351
1,386,378
-
1,386,378
-
28,508
28,508
-
39,415
39,415
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.
12. PROVISIONS – EMPLOYEE BENEFITS
Analysis of Provisions
Consolidated Group
Opening balance at 1 July
Amounts taken during the year
Amount provided during the year
Closing Balance 30 June
Current
Employee benefits
Non-Current
Employee benefits
Consolidated Group
2016
$
2015
$
579,998
(252,291)
241,664
569,371
589,037
(244,730)
235,691
579,998
423,370
452,510
146,001
569,371
127,488
579,998
54
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 13. UNEARNED INCOME
Consolidated Group
2016
$
2015
$
Annual licence and maintenance in advance
1,471,764
1,029,282
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.
14. CONTRIBUTED EQUITY
Issued and paid up capital
Ordinary shares
Opening balance
Consolidated Group
2016
Number
2016
$
2015
Number
2015
$
32,846,662
20,728,742
32,659,758
$20,656,242
32,659,758
20,656,242
32,659,758
$20,656,242
Add: Shares issued for the purchase of the medical software
business of Abaki Pty Ltd (50% of 1st of 4-part
consideration)
146,904
62,500
Add: Shares issued under Exempt Employee Share Plan
40,000
10,000
-
-
-
-
Total number of shares on issue
32,846,662
20,728,742
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.
On 12 January 2016, the Company issued 40,000 ordinary shares to employees in accordance with the
Company’s Exempt Employee Share Plan. These shares were issued at no cost to the employees.
55
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (b) Options
The movement in the number of unlisted options on issue throughout the year is as follows:
(i) $0.15 options exercisable on or before 5 July 2018
Opening balance
Issued
Exercised
Cancelled
Closing balance
(ii) $0.65 options exercisable on or before 19 December 2018
Opening balance
Issued
Exercised
Cancelled
Closing balance
(iii) $0.75 options exercisable on or before 26 May 2019
Opening balance
Issued
Exercised
Cancelled
Closing balance
(iv) $0.65 options exercisable on or before 10 June 2020
Opening balance
Issued
Exercised
Cancelled
Closing balance
TOTAL
Consolidated Group
2016
Number
2015
Number
300,000
300,000
-
-
-
-
-
-
300,000
300,000
690,000
690,000
-
-
160,000
530,000
-
-
-
690,000
300,000
300,000
-
-
-
-
-
-
300,000
300,000
390,000
-
-
-
390,000
1,520,000
-
390,000
-
-
390,000
1,680,000
On 24 November 2015, due to the resignation of an employee, 160,000 unlisted employee options which
had not yet vested, were forfeited.
During the previous financial year, 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.
(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.
56
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 15. 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.
16. 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
2016
$
(16,969,316)
1,373,270
(15,596,046)
2015
$
(18,029,436)
1,060,120
(16,969,316)
17. NON-CONTROLLING INTEREST
Global Health Limited has a 93.8% (2015: 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
2016
$
2015
$
Balance at the beginning of the financial year
(138,176)
(137,887)
Non-controlling interests attributable to this entity is as follows:
- share of profit/(loss)
- share of currency translation reserve
Balance at the end of the financial year
1,884
36
(213)
(76)
(136,256)
(138,176)
18. 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
2016
Interest
2015
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%
57
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 19. 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.
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
2016
$
2015
$
1,149,028
2,786,734
3,935,762
548,404
931,730
1,480,134
(1,422,608)
(746,638)
(1,067,257)
(355,351)
(1,422,608)
(718,130)
(28,508)
(746,638)
5
6
10
11
The Group is exposed to foreign currency fluctuations due to loan accounts between related entities being
unhedged and requiring payment in Australian dollar 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 23: 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.
58
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 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
(b) Liquidity risk
Consolidated Group
2016
$
2015
$
1,145,451
3,577
1,149,028
544,445
3,959
548,404
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 2016
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 & Loan
for Leasehold
Improvements
Totals
-
-
1,067,257
-
-
-
8.5%
-
-
157,517
197,834
348,666 1,037,712
1,224,774
197,834
348,666 1,037,712
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
-
-
-
1,067,257
1,067,257
1,741,729
1,741,729
2,808,986
2,808,986
Total
contracted
cash flows
Carrying
value of
financial
liability
%
$
$
$
$
$
$
$
$
Trade and Other
Payables
Loan – Premium
Funded Policies
& Loan for
Leasehold
Improvements
Totals
-
-
718,130
-
-
-
11.5%
-
-
11,457
17,052
32,215
7,199
729,587
17,052
32,215
7,199
-
-
-
718,130
718,130
67,923
67,923
786,053
786,053
59
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (c) Market risk
The Group is exposed to interest rate and foreign currency risk.
(i)
Interest rate risk
The Group has exposure to variable interest rates on monies that are kept in at-call bank accounts.
The table provided at Note 19(b) details the Group’s exposure to interest rate risk. For sensitivities
relating to interest rate risk, refer to paragraph (iii) below.
(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
2016
2015
MYR
SGD
MYR
SGD
100,911
(24,287)
76,624
12,889
(7,484)
5,405
11,866
(19,310)
(7,444)
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
2016
$
2015
$
+/-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.
60
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
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.
20. 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 2016 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 2016 are:
Total number of shares
Number of shares sold
Number of shares acquired
2016
2015
2016
2015
2016
2015
Mr M Cherian
18,619,370
18,619,370
Mr S L Pynt
Mr G Smith
Mr R Knowles
Options
232,408
300,000
20,000
232,408
280,000
20,000
19,171,778
19,151,778
-
-
-
-
-
-
-
-
-
-
-
-
20,000
-
20,000
-
-
-
-
-
The interests of Directors and their related entities in options of the Company as at 30 June 2016 are:
Total number of
options
Number of option
granted during the
year
Number
of options
exercised
during the
year
Number
of Options
vested/
exercisable at
report date
Option
type
(Listed /
Unlisted)
Exercise
price per
Option
($)
2016
2015
2016
2015
2016
2016
Mr M Cherian1
150,000
150,000
Mr S L Pynt
Mr G Smith
Mr R Knowles
-
-
-
-
-
-
150,000
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
Unlisted
$0.65
-
-
-
100,000
-
-
-
-
-
-
-
-
1 Through a related party, Kye Cherian.
61
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 21. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors and Key Management Personnel
The following persons were Directors and Key Management Personnel of the Company during the
financial year:
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
Mr P Curigliano
Chief Financial Officer
Mr K Jayesuria
Technology Delivery Manager
(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 2016.
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
Shares
Consolidated Group
2016
$
2015
$
689,538
6,957
64,163
760,658
671,252
6,938
61,187
739,377
The interest of Key Management Personnel and their related entities in shares of the Company as at
30 June 2016 are:
Total number of shares
Number of shares sold
Number of shares acquired
2016
2015
2016
2015
2016
2015
55,459
4,000
59,459
55,459
-
55,459
-
-
-
-
-
-
-
-
-
Mr P Curigliano
Mr K Jayesuria
Options
The interest of Key Management Personnel and their related entities in options of the Company as at
30 June 2016 are:
Total number of options
Number of options
granted during the year
Number of options
exercised during the year
2016
2015
2016
2015
2016
2015
Mr P Curigliano
Mr K Jayesuria
300,000
300,000
600,000
300,000
300,000
600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
62
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS 22. 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) [Part of the MSI Group Alliance]
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
23. 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
2016
$
2015
$
51,462
7,950
3,174
1,474
1,482
65,542
48,082
7,840
3,313
855
1,446
61,536
Consolidated Group
2016
$
2015
$
162,725
709,881
0
872,606
91,061
709,746
193,229
994,036
The parent entity’s operating lease for the relocated Melbourne office commenced on 14 July 2014 with
reduced floor space in the same building. The Company signed on for a lease term of 7 years.
(b) Guarantees
The parent has provided a cash security bond in favour of the property owner of the
parent entity’s leased premises in Melbourne, Australia.
Consolidated Group
2016
$
2015
$
102,187
102,187
63
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
24. EARNINGS PER SHARE
The following reflects the income and share data used in the calculations of
basic and diluted earnings per share:
Net earnings
Adjustment
Net profit / (loss) attributable to non-controlling 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
25. SEGMENT INFORMATION
Operating Segments
Consolidated Group
2016
$
2015
$
1,375,154
1,059,907
1,884
1,373,270
(213)
1,060,120
Number of Shares
Number of Shares
32,794,621
32,659,758
32,910,114
32,719,544
2016
cents
2015
cents
4.187
4.173
3.246
3.240
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:
Acute
Non-Acute
Other
Information system applications for the hospital and day surgery market to deliver
better and more integrated health care.
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.
64
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
25. SEGMENT INFORMATION (Continued)
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.
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 with a small number of employees also located in other states in 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, the Company’s clinical software, Mastercare EMR, is used by
the Malaysian Ministry of Health’s MENTARI community mental health program. The Company, through its
Malaysian distributor, is looking to further its 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.
Acute
Non-Acute
Other
Corporate
Consolidated
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Primary
Reporting
Business
Segments
Revenue
Sales to customers
outside the
consolidated entity
2,486,041
1,994,501
3,263,242
1,962,273
700,167
582,335
Total segment revenue
2,486,041
1,994,501
3,263,242
1,962,273
700,167
582,335
Total consolidated
revenue
Results
-
-
-
-
6,449,450
4,539,109
6,449,450
4,539,109
6,449,450
4,539,109
Segment result
1,717,871
1,736,718
1,010,028
525,862
593,415
406,159
(1,946,160)
(1,608,832)
1,375,154
1,059,907
Assets
Segment assets
3,818,816
2,646,677
5,012,680
2,603,911
1,075,528
772,751
Liabilities
Segment liabilities
1,869,516
1,052,518
2,453,976
1,035,511
526,629
307,304
-
-
-
-
9,907,024
6,023,339
4,850,121
2,395,333
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
71,275
34,655
136,380
318,676
24,320
34,397
299,723
359,039
531,698
746,767
(220,358)
(60,427)
(718,263)
(555,670)
(24,294)
(59,978)
(641,965)
(663,455)
(1,604,880)
(1,339,530)
229,829
1,031
439,760
9,485
37,750
1,024
966,467
12,183
1,673,806
23,723
Other segment information:
Depreciation
16,758
2,065
54,623
18,992
1,847
2,050
48,820
24,395
122,048
47,502
65
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS Secondary Reporting
Geographical
Australia
International
Consolidated
2016
2015
2016
2015
2016
2015
Segment revenue
6,359,607
4,534,731
89,843
4,378
6,449,450
4,539,109
Segment assets
Segment Result
Other segment information
Acquisition of property, plant and equipment,
intangible assets and other non-current assets
10,973,275
7,158,377
(1,066,251)
(1,135,038)
9,907,024
6,023,339
1,375,154
1,059,907
1,604,880
1,339,530
-
-
-
-
1,375,154
1,059,907
1,604,880
1,339,530
26. 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 such other date or period as the Directors consider appropriate. Options vest one-third each year
over three years from the grant date and have an expiry date of five years from the grant date.
Set out below are summaries of options granted under the plan:
Consolidated and parent entity – 2016
Grant
Date
Expiry
Date
Exercise
Price
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
300,000
690,000
300,000
390,000
TOTALS
1,680,000
-
-
-
-
-
Weighted average exercise price
$0.58
$0.65
Consolidated and parent entity – 2015
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
-
160,000
-
-
-
-
-
-
-
-
300,000
530,000
300,000
390,000
200,000
380,000
200,000
130,000
910,000
$0.56
160,000
1,520,000
-
$0.53
Grant
Date
Expiry
Date
Exercise
Price
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
300,000
690,000
300,000
-
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
-
-
-
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
66
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (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 cannot 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.
During the year, 10 employees each received $1,000 worth of shares under the plan, making a total of
40,000 ordinary shares issued at a cost to the Company of $10,000.
(c) Expenses arising from share-based payment transactions
There were no employee share-based payment transactions during the year.
27. CONSOLIDATED STATEMENT OF CASH FLOWS
Reconciliation of Operating Profit/(Loss) before Income Tax to Net Cash provided by
Operating Activities
Consolidated Group
2016
$
2015
$
Operating profit/(loss) after income tax
1,375,154
1,059,907
Add (deduct) non-cash items:
Amortisation of Intangibles
Depreciation of fixed assets
Bad debt written off
Issuance of shares under employee share plan
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
364,331
122,048
29,455
10,000
(100)
14,120
1,915,008
(1,996,602)
(167,691)
(10,627)
791,610
531,698
211,371
47,502
-
-
(597)
(106,877)
1,211,306
(468,199)
(70,249)
(9,039)
82,948
746,767
67
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
28. 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 two 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.
Opening balance
Issued
Exercised
Forfeited
Closing balance
Consolidated Group
2016
Number
2015
Number
1,680,000
-
-
160,000
1,520,000
1,290,000
390,000
-
-
1,680,000
During the financial year and up to the date of these accounts, no options were issued
(2015: 390,000 issued).
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 $0.420 on 30 June 2016
(2015: $0.375).
(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.
68
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
29. EVENTS SUBSEQUENT TO REPORTING DATE
On 2 August 2016, the Company, its subsidiary Working Systems Software Pty Ltd and the Crown in right of
the State of South Australia settled a Federal Court Proceeding at mediation conducted by the Federal Court of
South Australia. The Proceeding concerned allegations by Working Systems that SA Health had breached its
contract and infringed copyright by SA Health’s continued use of the CHIRON Patient Administration System.
The settlement terms included an obligation that SA Health pay the sum of $5,000,000 plus GST, for the
period 1 April 2015 – 31 March 2020, by 30 August 2016. As at 30 June 2016, receipt of the settlement
amount was considered virtually certain. This amount has since been received in full by the Company on 16
August 2016.
In line with accounting standards and a review by the Company’s auditors, the Company recognised $1.25m
additional revenue in FY2016 (period 1 April 2015 – 30 June 2016) in addition to amortisation costs of
$152,000 for legal fees in relation to this matter.
A formal announcement regarding the settlement terms was made to the share market on 4 August 2016.
On 14 September 2016, the Company declared an unfranked Special Dividend of 1.0c per share. The record
date for the Special Dividend will be 4 November 2016 and is payable on 25 November 2016.
30. DIVIDENDS
No provision is made for dividends on or before the end of the year. See Note 29 above for the Special Dividend.
31. 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
2016
$
2015
$
4,234,609
5,574,716
9,809,325
3,494,618
1,532,379
5,026,997
4,782,328
20,728,742
29,979
(15,976,383)
4,782,338
1,274,041
-
1,274,041
1,698,088
4,314,360
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
Other than that stated in Note 23 to the financial statements, the Company is not subject to any contingent liabilities or contractual
commitments
69
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
G L O B A L H E A LT H L I M I T E D C O N S O L I DAT E D E N T I T Y A N N UA L R E P O R T 2 016 I N D E P E N D E N T A U D I TO R ’ S R E P O R T
70
70
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 INDEPENDENT AUDITOR’S REPORT 71
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 INDEPENDENT AUDITOR’S REPORT Shareholder
Information
This shareholder information is made up to 12 September 2016.
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
464
302
95
125
29
1,015
203,020
726,650
753,691
4,063,362
27,268,272
33,014,995
2. The number of security investors holding less than a marketable parcel of 1,176 securities
($0.425 per share on 12 September 2016) is 491 and they hold 232,387 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
No. of shares held
% of issued shares
Micron Holdings Pty Ltd (Cherian Family Account)
Micron Holdings Pty Ltd (Micron Holdings Pty Ltd Superfund A/c)
Mrs Elizabeth May Priscilla Thomas
Alumootil Mathew Cherian
Pacific Nominees Limited
Triglobal Management Limited
Dadiaso Holdings Pty Ltd
Dr Serene Lim
B & R James Investments Pty Limited
Mr David Leroy Boyles
Holder Super Pty Ltd
Roxanne Investments Pty Ltd
Chris Bell Investments Pty Ltd
Connaught Consultants (Finance) Pty Ltd
Ms Serene Lim & Mr Nicholas Russell Ward
Abaki Pty Ltd
Mr Rajiv Paramanathan
Asket Pty Ltd
P Partnership Pacific Services Pty Limited
Dr Marie Heitz
13,558,334
3,804,602
1,530,702
1,256,434
1,250,195
500,000
450,000
400,000
400,000
400,000
331,253
300,000
300,000
300,000
260,000
255,237
250,000
201,074
175,000
167,066
41.07
11.52
4.64
3.81
3.79
1.51
1.36
1.21
1.21
1.21
1.00
0.91
0.91
0.91
0.79
0.77
0.76
0.61
0.53
0.51
72
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 SHAREHOLDER INFORMATION SUBSTANTIAL SHAREHOLDERS
Shareholder
No. of Ordinary shares
Percentage
Micron Holdings Pty Ltd (Cherian Family Account)
Micron Holdings Pty Ltd (Micron Holdings Pty Ltd Superfund A/c)
13,558,334
3,804,602
41.07
11.52
73
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 SHAREHOLDER INFORMATION
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
B-25-2, Block B, Jaya One
No. 72A Jalan Universiti
46200 Petaling Jaya, Selangor Darul Ehsan
Malaysia
Telephone: +603 7955 0955
Facsimile: +603 7955 0959
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
Tower 4, 727 Collins Street
Melbourne, Victoria 3008,
Australia
Telephone: 1300 554 474
Facsimile: +61 (3) 9615 9848
Website: www.linkmarketservices.com.au
Email: registrars@linkmarketservices.com.au
Solicitors
Davies Collison Cave, Melbourne, Australia
Finlaysons, Adelaide, Australia
Bankers
Bank of Western Australia Ltd
ANZ Bank 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:
74
GLOBAL HEALTH LIMITED CONSOLIDATED ENTITY ANNUAL REPORT 2016 CORPORATE DIRECTORY