Global Health Limited
Annual Report 2017

Plain-text annual report

Annual 2017 Report www.global-health.com/about-us/investor TAB LE O F CO NTE NT S 1. REVIEW OF OPERA TIONS Yo u r D i r e c to r s s u b m i t t h e i r r e p o r t fo r t h e f i n a n c i a l ye a r e n d e d 3 0 J u n e 2 017. 1.1. CHAIR MAN’S LET TER D e a r S h a r e h o l d e r s I t i s a p l e a s u r e to b e a b l e to r e p o r t a n ot h e r p r o f i ta b l e ye a r fo r t h e C o m p a ny w i t h a n et p r o f i t b e fo r e ta x o f $1,9 3 2 , 019, w h i c h i s a s u b s ta n t i a l i n c r e a s e f r o m t h e p r ev i o u s ye a r ( i n c r e a s e a f te r r e s ta te m e nt o f $1, 8 2 4 , 074). A s r e p o r te d l a s t ye a r, i n A u g u s t 2 016 w e w e r e a b l e to r e s o l ve t h e o n g o i n g u s e o f t h e C h i r o n H o s p i ta l M a n a g e m e nt Sy s te m w i t h S A H e a l t h . A n ot h e r h i g h l i g ht fo r t h e ye a r w a s o u r a n n o u n c e m e nt i n A p r i l o f t h e c o m m e rc i a l i s a t i o n o f t h e L i fe ca r d Pe r s o n a l H e a l t h Re c o r d fo r co n s u m e r s , to g et h e r w i t h t h e H ot H e a l t h d i g i ta l e n g a g e m e nt p l a t fo r m fo r p r ov i d e r s . T h e m a j o r c o n n e c t i v i t y r o l l o u t a c r o s s Pe n i n s u l a H e a l t h w h i c h w a s a n n o u n c e d i n M a y w a s a l s o a m a j o r m i l e s to n e fo r t h e C o m p a ny. W h i l e t h e e c o n o m y i n A u s t r a l i a co nt i n u e s to b e c h a l l e n g i n g , w e s t i l l e x p e c t to m a ke m a j o r s a l e s i nto o u r h o m e co u nt r y, a s w e l l a s g r o w i n g o u r s a l e s i nto t h e fa s t e x p a n d i n g h e a l t h ca r e m a r ket i n t h e A S E A N Re g i o n . T h i s b o d e s w e l l fo r a n ot h e r s u cc e s s f u l ye a r. I w o u l d to t h a n k o u r C E O, M a t h e w C h e r i a n , fo r h i s t i r e l e s s w o r k i n e n s u r i n g t h e c o nt i n u e d s u cc e s s o f t h e C o m p a ny, a s w e l l a s o u r ve r y h a r d w o r k i n g a n d l oya l e m p l oye e s , a n d m y fe l l o w B o a r d m e m b e r s . O u r g o a l i s to c o nt i n u e to i n c r e a s e o u r p r o f i ta b i l i t y, a n d i n t u r n ca p i ta l va l u e, fo r o u r ve r y s u p p o r t i ve s h a r e h o l d e r s . Pa y i n g t w o s p e c i a l d i v i d e n d s d u r i n g t h e ye a r w a s a p a r t i c u l a r l y s a t i s f y i n g w a y o f r e w a r d i n g o u r s h a r e h o l d e r s fo r t h e i r p a t i e n c e. Yo u r s s i n c e r e l y Yo u r s fa i t h f u l l y, S t eve n L e i g h P y n t N o n - E xe c u t i ve C h a i r m a n 3 1.2. CHIEF EXECUTI VE OF FI CER ’S O PE R ATIONS SO L U T I O N S REPO RT 1.3. FIN ANCI AL SUM MA RY Yo u r D i r e c to r s s u b m i t t h e i r r e p o r t fo r f i n a n c i a l ye a r e n d e d 3 0 J u n e 2 017. T h e P r ev i o u s C o r r e s p o n d i n g Pe r i o d ( P C P) fo r t h i s r e p o r t i s t h e t w e l ve m o nt h s to 3 0 J u n e 2 016 . Dashboard 80 60 50 40 30 20 10 MON TUES WED THURS FRI SAT SUN MY MEASURES Sleep F I N A N C I A L H I G H L I G H T S • Reve n u e - $10 . 3 M U p 9 8 % ( i n c l u d i n g $ 5 m f r o m t h e s et t l e m e nt o f t h e C h i r o n S o f t w a r e l i t i g a t i o n) • N et P r o f i t B e fo r e Ta x - $1,9 3 2 , 019 - u p 169 0 % • • D i v i d e n d s p a i d o f 2 c e nt s p e r s h a r e E a r n i n g s Pe r S h a r e ( E P S) b e fo r e ta x u p 2 0 8 4 % to 5 . 81 c e n t s p e r s h a r e R E V I E W O F T H E F I N A N C I A L YE AR TO J U N E 2 017 T h r o u g h o u t F Y17, w e a c h i eve d a l ot a s a b u s i n e s s . T h e r e s o l u t i o n o f t h e o n g o i n g u s e o f t h e C H I R O N H o s p i ta l M a n a g e m e nt Sy s te m w i t h S A H e a l t h i n A u g u s t w a s a g o o d s ta r t to t h e f i n a n c i a l ye a r. I nve s t m e nt i n n e w p r o d u c t d eve l o p m e nt i n c r e a s e d by n e a r l y 10 % to $1. 4 8 m a n d e n a b l e d a n a cce l e r a te d i n n ova t i o n p r o g r a m ta r g et i n g g r e a te r c o n s u m e r e n g a g e m e n t a n d c o n n e c t i v i t y fo r c o n s u m e r s a n d t h e i r h e a l t h ca r e p r ov i d e r s . T h e u n d e r l y i n g d e s i g n p h i l o s o p hy i s a “ m o b i l e - f i r s t ” a rc h i te c t u r e to o pt i m i s e t h e u s e r e x p e r i e n c e o n m o b i l e s m a r t p h o n e s a n d ta b l et s i n a d d i t i o n to t h e t r a d i t i o n a l w i d e r s c r e e n s o f p e r s o n a l c o m p u te r s . T h e “ m o b i l e - f i r s t ” d e s i g n p h i l o s o p hy i s a m a r ket - l e a d i n g r e s p o n s e to g l o b a l u s a g e t r e n d s . I n A p r i l , t h e C o m p a ny a n n o u n c e d t h e c o m m e r c i a l r e l e a s e o f t h e L i fe c a r d Pe r s o n a l H e a l t h Re c o r d fo r c o n s u m e r s a l o n g w i t h t h e H ot H e a l t h d i g i ta l e n g a g e m e nt p l a t fo r m fo r p r ov i d e r s . L i fe c a r d a n d H ot H e a l t h a r e t h e e m b o d i m e nt o f o u r l o n g - s ta n d i n g v i s i o n to c o n n e c t c l i n i c i a n s a n d c o n s u m e r s a n d s t r e a m l i n e t h e p a t i e nt j o u r n ey. O u r c u r r e nt a n d g r o w i n g m a r ket p r e s e n c e a c r o s s h e a l t h ca r e p r ov i d e r s c o m b i n e s w i t h t h i s n e w te c h n o l o g y to e n h a n c e t h e e n d - u s e r e x p e r i e n c e fo r b ot h c o n s u m e r s a n d p r ov i d e r s a n d a c h i eve m e a n i n g f u l s ca l e i n t h e c o n s u m e r m a r ket. T h e i n i t i a l d e p l oy m e nt o f t h e L i fe ca r d p a t i e nt p o r ta l w a s a c r o s s t h r e e e a r l y a d o pte r s i te s i n t h e a c u te ( h o s p i ta l) s e c to r a n d t h r e e co m m u n i t y h e a l t h c a r e p r ov i d e r s fo r o n - g o i n g c o n s u m e r e n g a g e m e nt. E a r l y fe e d b a c k f r o m c u s to m e r s h a s b e e n ve r y e n c o u r a g i n g w i t h u p to 5 0 % o f p r e - a d m i s s i o n s fo r m s s u b m i t te d o n l i n e w i t h i n 6 m o n t h s o f l a u n c h . L i fe c a r d Pa t i e nt Po r ta l i s n o w i n g e n e r a l r e l e a s e fo r t h e C o m p a ny’s w i d e r b a s e o f c u s to m e r s . We h a ve s e c u r e d a g r e e m e n t s w i t h t w o h e a l t h c a r e p r o fe s s i o n a l o r g a n i s a t i o n s c ove r i n g a p p r o x i m a te l y 15 , 0 0 0 i n d i v i d u a l p r ov i d e r s fo r t h e co m m e rc i a l r e l e a s e o f t h e m o r e c o m p r e h e n s i ve H ot H e a l t h d i g i ta l e n g a g e m e nt p l a t fo r m fo r p r ov i d e r s . Dashboard Search measurement First Last Name 37 c Today 7 Hours Today 8 Hours Yesterday BODY TEMP SLEEP MY MEASURES Sleep Blood Pressure Dashboard Temperature Search measurement Heart Rate 7 6 5 4 3 2 1 Health Record Measurements Allergies Medications Medical History Attachments Notifications Reminders Settings Learn More Feedback MON TUES WED THURS FRI SAT SUN First Last Name Blood Glucose 37 c Today 7 Hours Today 8 Hours Yesterday BODY TEMP SLEEP 66 bpm Today 68 bpm Yesterday HEART RATE BLOOD PRESSURE 120 Health Record Systolic mmHg Measurements 60 Allergies Diastolic mmHg Medications Medical History Attachments Notifications Reminders Settings Learn More Feedback BODY TEMP 37 c Today HEART RATE 66 BPM Yesterday Blood Pressure LIFECARD 120 Systolic mmHg Temperature BLOOD PRESSURE SLEEP 7 Hrs Yesterday 60 Diastolic mmHg 7 6 5 4 3 2 1 MON TUES WED THURS FRI SAT SUN 66 bpm Today 68 bpm Yesterday 120 Systolic mmHg 60 Diastolic mmHg HEART RATE BLOOD PRESSURE Heart Rate Blood Glucose Load More 7 6 5 4 3 2 1 MON TUES WED THURS FRI SAT SUN L I F E C A R D A p e r s o n a l h e a l t h r e c o r d f o r c o n s u m e r s to s e c u r e l y s t o r e a n d a c c e s s h e a l t h i n fo r m a t i o n a n y w h e r e, a n y t i m e a n d o n a n y d ev i c e. I m p o r ta n t p e r s o n a l h e a l t h i n fo r m a t i o n , key o b s e r va t i o n s a n d m e a s u r e m e n t s c a n b e m o n i t o r e d a n d t r a c ke d to e n c o u r a g e p o s i t i ve b e h a v i o r c h a n g e. T h e L i fe c a r d p l a t fo r m e m p o w e r s i n d i v i d u a l s t o p r o - a c t i ve l y m a i n ta i n t h e i r w e l l n e s s a n d m a n a g e t h e i r h e a l t h o u tc o m e s . H OT H E A LT H A p a t i e n t e n g a g e m e n t p l a t fo r m fo r h e a l t h c a r e p r a c t i t i o n e r s t o e n g a g e w i t h p a t i e n t s a n d c l i e n t s o n l i n e. E a s i l y c r e a t e a n d m a i n ta i n a b u s i n e s s o n l i n e w i t h a w e b s i t e a n d m o b i l e a p p t h a t s t r e a m l i n e s t h e p a t i e n t j o u r n ey a n d b u i l d s c o m m u n i t i e s a r o u n d t h e i r p r a c t i c e. 4  Review of the financial year to June 2017 (continued). SO L U T I O N S H ot H e a l t h w i l l r e c o r d p a t i e nt c o n s e n t, p r ov i d e fo r o n l i n e a p p o i nt m e nt s a n d te l e - co n s u l t i n g i n a d d i t i o n to t h e L i fe ca r d p a t i e nt p o r ta l fo r fo r m s a n d a s s e s s m e nt s . I n M a y, t h e C o m p a ny a n n o u n ce d a m a j o r c o n n e c t i v i t y r o l l o u t a c r o s s Pe n i n s u l a H e a l t h - t h e m a j o r h e a l t h ca r e p r ov i d e r s e r v i n g t h e m et r o p o l i ta n a n d r e g i o n a l a r e a s o n V i c to r i a’s M o r n i n g to n Pe n i n s u l a . Pe n i n s u l a H e a l t h i s a m et r o p o l i ta n p u b l i c h e a l t h s e r v i ce w i t h ove r 9 0 0 R E F E R R A L N E T b e d s , d e l i ve r i n g h e a l t h c a r e s e r v i c e s to a p o p u l a t i o n o f ove r 3 0 0 , 0 0 0 a c r o s s a r e g i o n o f a p p r o x i m a te l y 9 0 0 s q u a r e k i l o m et r e s . A p a r t f r o m i m p r ove m e nt s i n w o r k f l o w p r o d u c t i v i t y a n d p a t i e nt s a fet y, a key d r i ve r fo r t h e C o n n e c t i v i t y p r o j e c t i s to m e et t h e V i c to r i a n G ove r n m e nt ’s e Re fe r r a l a n d Acc e s s Po l i c i e s fo r m a n a g i n g r e fe r r a l s . T h i s c ove r s t h e p r o c e s s i n g a n d l i ve t r a c k i n g o f Re fe r r a l s a n d t h e r e p o r t i n g o f K P I s r e l a t i n g to i n b o u n d r e fe r r a l s . T h e i n i t i a l p h a s e o f t h e Re fe r r a l M a n a g e m e nt p r o j e c t h a s b e e n p r o g r e s s i ve l y r o l l e d o u t s i n c e D e c e m b e r 2 016 w i t h d i s c h a r g e s u m m a r i e s s e nt e l e c t r o n i c a l l y f r o m F r a n k s to n H o s p i ta l’s C e r n e r E l e c t r o n i c M e d i c a l Re c o r d s y s te m t h r o u g h G l o b a l H e a l t h’s Re fe r r a l N et s e c u r e m e s s a g i n g p l a t fo r m , to G e n e r a l P r a c t i t i o n e r s (G P s) a n d S p e c i a l i s t s i n t h e r e g i o n . O ve r 6 5 % o f d i s c h a r g e s u m m a r i e s f r o m Pe n i n s u l a H e a l t h a r e n o w s e nt v i a t h e Re fe r r a l N et p l a t fo r m . I nte g r a t i o n to t h e h o s p i ta l’s i PM Pa t i e nt Ad m i n i s t r a t i o n Sy s te m h a s b e e n c o m p l ete d w i t h a l i m i te d r o l l o u t o f i n - b o u n d r e fe r r a l s to 2 o f 4 0 o u t p a t i e n t c l i n i c s a t t h e h o s p i ta l n o w i n p r o g r e s s . T h e C o m p a ny h a s a l s o a c h i eve d i n te r o p e r a b i l i t y w i t h Te l s t r a H e a l t h’s A r g u s M e s s a g i n g p l a t fo r m w i t h Re fe r r a l N et s u b s c r i b e r s a b l e to s e n d to A r g u s s u b s c r i b e r s . Vo l u m e s o f Re fe r r a l N et to A r g u s m e s s a g e s m o r e t h a n t r i p l e d ove r t h e 6 m o n t h s to J u n e i n t h e l i m i te d t r i a l s . Tw o - w a y m e s s a g i n g f r o m A r g u s to Re fe r r a l N et i s i n a d va n c e d s ta g e s o f f i e l d te s t i n g fo l l o w i n g w h i c h Re fe r r a l N et a n d A r g u s i nte r o p e r a b i l i t y w i l l b e a va i l a b l e fo r g e n e r a l m a r ket r e l e a s e. O ve r t h e 12 m o nt h s to 3 0 -J u n e, Re fe r r a l N et s u b s c r i b e r s g r e w by 8 % w h i l e t r a n s a c t i o n vo l u m e s g r e w by 2 0 % . T h e l eve l o f e x p e n d i t u r e i n i n n ova t i o n i s r ev i e w e d eve r y 6 m o n t h s to e n s u r e r et u r n o n i nve s t m e nt s a r e p e r fo r m i n g i n l i n e w i t h fo r e c a s t s . I m p a i r m e nt c h a r g e s o f $ 917 k w e r e a p p l i e d a g a i n s t i nta n g i b l e a s s et s fo l l o w i n g a r ev i e w by t h e B o a r d . T h e n et r e s u l t i s a r e p o r te d r e c o r d n et p r o f i t b e fo r e ta x o f $1.9 3 m r e p r e s e nt i n g E a r n i n g s Pe r S h a r e b e fo r e ta x o f 5 . 8 c e nt s . A s e c u r e m e s s a g i n g p l a t fo r m fo r h e a l t h ca r e p r ov i d e r s to s e c u r e l y s e n d a n d r e c e i ve p a t i e nt - r e l a te d d o c u m e nt s s u c h a s r e fe r r a l s , l et te r s , r e s u l t s a n d d i s c h a r g e s u m m a r i e s . S e c u r e m e s s a g i n g i m p r ove s b u s i n e s s p r o d u c t i v i t y a n d p a t i e nt o u tco m e s by r e d u c i n g t h e n e e d fo r r e - key i n g o f d a ta a n d m i n i m i s i n g t r a n s c r i pt i o n e r r o r s . MASTERCARE + Clients Messaging Patient Dashboard Edit First Name Frank Gender Male Primary Phone +61 2 400 000 000 Last Name Billy Date of Birth 0 1 1 9 5 6 More New Referrals Processed Referrals Scheduled Referrals 7 within limit 2 due soon 1 1 late 4 within limit 3 due soon 2 2 late 6 3 within limit 3 due soon 2 3 late Workload Sort Group Filter Assigned to Global Heath Limited MasterCare Plus brings an innovative and customisable solution for the Health Industry. Sheduled M A S T E RCA R E + A w e b - b a s e d p l a t fo r m a n d m a r ket p l a c e w i t h a n e x te n s i b l e a n d m o d u l a r d e s i g n , e n a b l i n g u s e r s to c o n f i g u r e t h e fe a t u r e s t h ey n e e d fo r t h e i r h e a l t h ca r e b u s i n e s s . M a s te r C a r e + i s o f fe r e d a s a s u b s c r i pt i o n s o f t w a r e s e r v i c e a cc e s s i b l e a ny w h e r e, a ny t i m e a n d o n a ny d ev i c e. 5 Review of the financial year to June 2017 (continued) SO L U T I O N S I n t h e 5 ye a r s to 3 0 -J u n -2 017, t h e s h a r e p r i c e o f G L H h a s p r ov i d e d a r et u r n i n e x c e s s o f 4 9 % C AG R (C o m p o u n d A n n u a l G r o w t h Ra te) i n c l u s i ve o f d i v i d e n d s . M A S T E R C A R E E M R A n i n t u i t i ve t e a m - b a s e d a p p r o a c h to c l i e n t m a n a g e m e n t w h i c h h a s p r ove n to b e t h e p e r f e c t f i t fo r g ove r n m e n t a n d N G O s e r v i c e p r ov i d e r s i n t h e c o m m u n i t y. W i t h a s t r o n g r e p o r t i n g p e d i g r e e a n d s c a l a b l e a r c h i t e c t u r e M a s t e r C a r e E M R h e l p s p r ov i d e r s w o r k w i t h t h e i r c l i e n t s t o i m p r ove h e a l t h o u tc o m e s . M a s t e r C a r e E M R i s d e p l oy e d i n m u l t i p l e s ta t e - w i d e r o l l - o u t s , a c r o s s m u l t i p l e s p e c i a l t i e s i n eve r y h e a l t h c a r e s et t i n g . M A S T E R C A R E DATA WA R E H O U S E A d a ta w a r e h o u s e t h a t c o l l a t e s t h e l a r g e vo l u m e o f b u s i n e s s a n d c l i n i c a l d a ta to e n a b l e h e a l t h c a r e e x e c u t i ve s t o g a i n t i m e l y i n s i g h t s i n t o t h e i r h e a l t h c a r e o p e r a t i o n s . M a s t e r C a r e D a ta Wa r e h o u s e p r ov i d e s “ s l i c e - a n d - d i c e” f u n c t i o n a l i t y a c r o s s a r a n g e o f f i n a n c i a l a n d c l i n i c a l Key Pe r fo r m a n c e I n d i c a to r s ( K P I s) t o e n a b l e i n fo r m e d d e c i s i o n s a n d e n c o u r a g e c o n t i n u o u s q u a l i t y i m p r ove m e n t. 6 CO R E O PE R AT I O N S R E V I E W T h e C o m p a ny’s c o r e o p e r a t i o n a l r eve n u e i s d e r i ve d f r o m t h e s a l e o f s o f t w a r e a n n u a l s u b s c r i pt i o n s a n d p r o d u c t - r e l a te d p r o fe s s i o n a l s e r v i c e s to: S p e c i a l i s t s , G e n e r a l P r a c t i t i o n e r s , C o m m u n i t y H e a l t h a n d A l l i e d H e a l t h P r ov i d e r s (t h e n o n - a c u te o r C o m m u n i t y s e c to r ) a n d , O ve r n i g ht a n d D a y H o s p i ta l s (t h e a c u te o r H o s p i ta l s e c to r ). S o f t w a r e fo r co n n e c t i v i t y i s s o l d u n d e r t h e Re fe r r a l N et b r a n d ( w w w. r e fe r r a l n et. c o m . a u) w h i l e s o f t w a r e fo r h e a l t h c a r e p r ov i d e r s a r e s o l d u n d e r t h e M a s te r C a r e ( w w w. m a s te r C a r e. n et. a u/ ) a n d P r i m a r y C l i n i c ( w w w. p r i m a r yc l i n i c . c o m . a u/ ) b r a n d s . T h e s e a r e d e p l oye d i n b ot h t h e co m m u n i t y a n d h o s p i ta l m a r ket s e c to r s . Reve n u e f r o m s a l e s to t h e C o m m u n i t y S e c to r w a s u p 9 % to $ 3 . 74 m l a r g e l y d r i ve n by t h e co nt i n u i n g a p p e a l o f M a s te r C a r e E M R fo r p r ov i d e r s o f M e n ta l H e a l t h s e r v i c e s w i t h 19 n e w c u s to m e r o r g a n i s a t i o n s a n d ove r 5 0 0 n e w h e a l t h ca r e p r o fe s s i o n a l s . P r o j e c t s p e c i f i c p r o fe s s i o n a l s e r v i c e e x p e n s e s o f a p p r o x i m a te l y $ 3 5 0 k w e r e i n c u r r e d ove r t h e ye a r fo r p r o j e c t s e x p e c te d to g o - l i ve p r i o r to 3 0 -J u n e h o w eve r t h e a s s o c i a te d p r o j e c t s h a ve b e e n d e l a ye d b eyo n d t h e r e p o r t i n g p e r i o d a n d a r e n o w s c h e d u l e d fo r g o - l i ve i n t h e S e pte m b e r q u a r te r. Review of the financial year to June 2017 (continued) I n a cc o r d a n ce w i t h t h e C o m p a ny’s p o l i c y, w o r k- i n - p r o g r e s s i s n ot r e c o g n i s e d a s r eve n u e i n t h e p e r i o d i n c u r r e d . P r o j e c t s e r v i c e s a n d l i ce n s e r eve n u e f r o m t h e s e w i l l o n l y r e c o g n i s e d o n i nvo i c i n g w h i c h i n t h e s e p r o j e c t s a r e o n l y d u e o n g o - l i ve. T h e e f fe c t o f t h e s e i s a g r e a te r e x p e n s e r e f l e c te d i n t h e 2 017 F i n a n c i a l Ye a r w i t h t h e c o r r e s p o n d i n g p r o j e c t r eve n u e d e l a ye d to t h e 2 018 F i n a n c i a l Ye a r. T h e C o m p a ny h a s i n c r e a s e d i nve s t m e nt i n s a l e s a n d m a r ket i n g a c t i v i t y fo c u s e d o n M e nta l H e a l t h S e r v i c e s , C o n n e c t i v i t y a n d C o n s u m e r e n g a g e m e nt. G i ve n t h e r e l a t i ve l y l o n g s a l e s - c yc l e i n h e a l t h ca r e, i t w a s a n i m p o r ta nt i nve s t m e nt to m a x i m i s e t h e l i ke l i h o o d o f s u s ta i n a b l e r eve n u e g r o w t h i n t h e m e d i u m - te r m fo r t h i s g r o w t h a r e a . Reve n u e a n d m a r g i n s f r o m c u s to m e r s d e l i ve r i n g s e r v i c e s w i t h i n h o s p i ta l s h a s b e e n f l a t ove r t h e r e p o r t i n g p e r i o d . T h e r e d u c t i o n i n r eve n u e i s d u e to t h e c l o s u r e o f t w o h o s p i ta l s w i t h i n t h e c u s to m e r b a s e a n d a d e l a ye d g o - l i ve o f a f u r t h e r t w o n e w h o s p i ta l c u s to m e r s . C o r e s u b s c r i pt i o n s i n t h i s s e c to r a r e fo r t h e u s e t h e C o m p a ny’s M a s te r C a r e PA S ( Pa t i e nt Ad m i n i s t r a t i o n Sy s te m) to m a n a g e p a t i e nt w o r k f l o w f r o m p r e - a d m i s s i o n t h r o u g h to d i s c h a r g e i n c l u d i n g t h e m a n a g e m e nt o f b e d s , t h e a t r e s , m e d i ca l r e c o r d s , b i l l i n g a n d r e c e i pt i n g . T h e C o m p a ny h a s ta ke n s te p s to r e d u c e t h e c o s t b a s e fo r t h e H o s p i ta l b u s i n e s s u n i t i n t h e c u r r e nt p e r i o d a n d a c c e l e r a te t h e u p g r a d e o f M a s te r C a r e PA S to t h e n e w M a s te r C a r e + p l a t fo r m w h i c h w i l l r e - v i ta l i s e t h e co m p et i t i ve p o s i t i o n i n g o f o u r o f fe r i n g to h o s p i ta l o p e r a to r s . M a s te r C a r e + i s a m u l t i - te n a nte d , “ m o b i l e - f i r s t ”, w e b b a s e d p l a t fo r m & m a r ket p l a c e w h i c h i s t h e s u cc e s s o r to o u r h e a l t h ca r e p r ov i d e r p r o d u c t s i n c l u d i n g M a s te r C a r e E M R a n d PA S . M a s te r C a r e + fe a t u r e s a n e x te n s i b l e a n d m o d u l a r d e s i g n s o c u s to m e r s o n l y s u b s c r i b e to fe a t u r e s t h ey n e e d . T h e f i r s t r e l e a s e a d d r e s s e s t h e Re fe r r a l M a n a g e m e nt n e e d s o f h e a l t h ca r e p r ov i d e r s . D u r i n g t h e t r a n s i t i o n a r y p e r i o d , r eve n u e g r o w t h fo r t h e a c u te s e c to r w i l l b e d e r i ve d f r o m a d d - o n s s u c h a s t h e L i fe ca r d Pa t i e nt Po r ta l a n d M a s te r C a r e + fo r Re fe r r a l M a n a g e m e nt to e x i s t i n g c u s to m e r s . SO L U T I O N S P A S M A S T E RCA R E PA S A p a t i e nt a d m i n i s t r a t i o n s y s te m fo r h o s p i ta l a d m i n i s t r a to r s s e e k i n g to s t r e a m l i n e t h e p a t i e nt j o u r n ey w i t h i n t h e i r fa c i l i t y. M a s te r C a r e PA S m a n a g e s t h e r eve n u e c yc l e f r o m p r e - a d m i s s i o n t h r o u g h to b e d m a n a g e m e nt, t h e a t r e m a n a g e m e nt, m e d i ca l r e co r d s m a n a g e m e nt a n d d i s c h a r g e p l a n n i n g . PR I M A RYC L I N I C A f u l l y fe a t u r e d p r a c t i c e a n d c l i n i ca l m a n a g e m e nt s y s te m to s u p p o r t g e n e r a l p r a c t i t i o n e r s , s p e c i a l i s t s a n d a l l i e d h e a l t h p r ov i d e r s i n p r i va te p r a c t i c e. 7 Review of the financial year to June 2017 (continued) I n t h e c u r r e nt f i n a n c i a l ye a r, t h e fo c u s i s o n d eve l o p i n g d i g i ta l h e a l t h c o m m u n i t i e s t h r o u g h t h e n e w l y r e l e a s e d H ot H e a l t h p l a t fo r m ( w w w. h ot h e a l t h . c o m), to e n c o u r a g e d i g i ta l e n g a g e m e nt b et w e e n h e a l t h ca r e p r ov i d e r s a n d t h e i r h e a l t h ca r e c o n s u m e r s . C o n s u m e r s w i l l b e p r ov i d e d w i t h to o l s to m a n a g e t h e i r o n - g o i n g h e a l t h co n d i t i o n s t h r o u g h d i g i ta l i nte r a c t i o n s w i t h t h e i r h e a l t h c a r e p r ov i d e r s , a n d e n c o u r a g e d to p r o - a c t i ve l y m a n a g e t h e i r h e a l t h a n d w e l l n e s s t h r o u g h t h e L i fe ca r d Pe r s o n a l H e a l t h Re c o r d ( w w w. l i fe ca r d . c o m). O ve r 3 0 0 0 h e a l t h c a r e o r g a n i s a t i o n s u s e G l o b a l H e a l t h a p p l i ca t i o n s i n h o s p i ta l s , co m m u n i t y a n d c h r o n i c d i s e a s e h e a l t h c e nt r e s , s p e c i a l i s t s , g e n e r a l p r a c t i ce a n d a l l i e d h e a l t h . O u r c ove r a g e a c r o s s t h e A u s t r a l i a n h e a l t h ca r e i n d u s t r y i s e s t i m a te d a t 12 , 0 0 0 i n d i v i d u a l h e a l t h ca r e p r ov i d e r s a n d i s e x p e c te d to g r o w a t r o u n d 1, 0 0 0 p r ov i d e r s p e r a n n u m i n t h e n e a r f u t u r e, h o w eve r, o n l y o n e t h i r d o f t h e s e a r e p a y i n g s u b s c r i b e r s w h e n t h ey co m e o n b o a r d . O n e o f t h e key d r i ve r s fo r r eve n u e g r o w t h i n t h e i m m e d i a te f u t u r e r e l i e s o n t h e s u cc e s s f u l m o n et i s a t i o n o f t h e s e f r e e m i u m s u b s c r i b e r s . B y p r ov i d i n g i m p r ove d b u s i n e s s p r o d u c t i v i t y a n d i m p r ove d p a t i e nt o u tc o m e s , t h e g o a l i s to i n c r e a s e t h e a ve r a g e r eve n u e p e r c u s to m e r s . T h i s w i l l b e a c h i eve d t h r o u g h a d d - o n a p p l i ca t i o n s a n d m o n et i s a t i o n o f i n te r a c t i o n s b et w e e n p r ov i d e r s a n d t h e i r c l i e n t s . I n t h e f i r s t q u a r te r, o u r n e w M a s te r C a r e + S o f t w a r e a s a S e r v i c e p l a t fo r m w i l l b e l i ve w i t h t h e i n i t i a l r e l e a s e. T h i s e x te n d s t h e C o m p a ny’s s a l e s r e a c h to t h e g l o b a l m a r ket p l a ce w i t h p r ov i d e r, c o n n e c t i v i t y, c o n s u m e r a n d d i g i ta l e n g a g e m e n t p l a t fo r m s a c c e s s i b l e a ny w h e r e, a ny t i m e a n d o n a ny d ev i c e. A d e d i ca te d G e n e r a l M a n a g e r fo r b u s i n e s s d eve l o p m e nt a c r o s s t h e A S E A N Re g i o n h a s c o m m e n c e d to d eve l o p n e w ove r s e a s o p p o r t u n i t i e s fo r t h i s s u i te o f “ m o b i l e - f i r s t ”, c l o u d a p p l i ca t i o n s to “ C o n n e c t C l i n i c i a n s a n d C o n s u m e r s ”. W i t h ove r 62 5 m i l l i o n p e o p l e i n t h e A S E A N Re g i o n a n d a r a p i d l y g r o w i n g m i d d l e c l a s s t h e C o m p a ny b e l i eve s t h a t o u r p r ove n p r o d u c t s ca n h e l p i m p r ove t h e h e a l t h ca r e m a r ket s i n t h e s e e c o n o m i e s . T h e l a s t 12 m o nt h s h a s s e e n m a r ket d e m a n d fo r a d d r e s s i n g t h e s p i r a l l i n g co s t s o f h e a l t h ca r e i n c r e a s e s u b s ta nt i a l l y. A f te r 5 ye a r s o f p r o f i ta b l e o p e r a t i o n s , t h e s t r e n g t h e n e d b a l a n ce s h e et h a s b e e n t i m e l y, e n a b l i n g t h e C o m p a ny to i n c r e a s e o u r i nve s t m e nt ove r t h e l a s t 9 m o nt h s i n: Key s a l e s , m a r ket i n g a n d d eve l o p m e nt p e r s o n n e l t h a t h a ve c o m e o n b o a r d; N e w m o b i l e a p p l i c a t i o n s a n d m a r ket p l a c e p l a t fo r m s , a n d , E x p a n d i n g o u r r e a c h to t h e fa s t d eve l o p i n g h e a l t h ca r e m a r ket i n t h e A S E A N Re g i o n . T h e s e i nve s t m e nt s w i l l m a x i m i s e t h e o p p o r t u n i t y to b u i l d a g e n u i n e g l o b a l b u s i n e s s o f s ca l e. E n q u i r i e s ca n b e d i r e c te d to M a t h e w C h e r i a n , C h i e f E x e c u t i ve O f f i c e r, o n + 61 3 9675 0 6 8 8 o r a l te r n a t i ve l y by e m a i l to m a t h e w. c h e r i a n @ g l o b a l - h e a l t h . c o m . F o r a n d o n b e h a l f o f G l o b a l H e a l t h L i m i te d M a t h e w C h e r i a n C h i e f E xe c u t i ve O f f i ce r a n d M a n a g i n g D i r e c t o r 8 C ONN E CTI N G CLINICIANS AND C ONSU MER S HEALTHCARE PROFESSIONALS CONSUMER PATIENT ENGAGEMENT PL ATFORM e-switch INTEGRATION SOLUTION SECURE MESSAGE EXCHANGE MASTERCARE + Clients Messaging Patient Dashboard Edit First Name Frank Gender Male Primary Phone +61 2 400 000 000 Last Name Billy Date of Birth 0 1 1 9 5 6 More Dashboard Search measurement First Last Name 37 c Today 7 Hours Today 8 Hours Yesterday BODY TEMP SLEEP New Referrals Processed Referrals Scheduled Referrals 7 within limit 2 due soon 1 1 late 4 within limit 3 due soon 2 2 late 6 3 within limit 3 due soon 2 3 late Workload Sort Group Filter Assigned to Global Heath Limited MasterCare Plus brings an innovative and customisable solution for the Health Industry. Sheduled Health Record Measurements Allergies Medications Medical History Attachments Notifications Reminders Settings Learn More Feedback 7 6 5 4 3 2 1 MY MEASURES Sleep Blood Pressure Dashboard Temperature Search measurement Heart Rate Dashboard 80 60 50 40 30 20 10 MON TUES WED THURS FRI SAT SUN MY MEASURES Sleep BODY TEMP 37 c Today HEART RATE 66 BPM Yesterday Blood Pressure LIFECARD 120 Systolic mmHg Temperature BLOOD PRESSURE SLEEP 7 Hrs Yesterday 60 Diastolic mmHg MON TUES WED THURS FRI SAT SUN First Last Name Blood Glucose 37 c Today 7 Hours Today 8 Hours Yesterday BODY TEMP SLEEP 66 bpm Today 68 bpm Yesterday HEART RATE BLOOD PRESSURE 120 Health Record Systolic mmHg Measurements 60 Allergies Diastolic mmHg Medications Medical History Attachments Notifications Reminders Settings Learn More Feedback 7 6 5 4 3 2 1 MON TUES WED THURS FRI SAT SUN 66 bpm Today 68 bpm Yesterday 120 Systolic mmHg 60 Diastolic mmHg HEART RATE BLOOD PRESSURE Heart Rate Blood Glucose Load More 7 6 5 4 3 2 1 MON TUES WED THURS FRI SAT SUN PMS | CLINICAL SOFTWARE EMR | PAS | CONNECT WEB BASED PLATFORM PHR| PATIENT PORTAL ANALYTICS 9 2. DIRE CTORS’ R EPORT Yo u r D i r e c to r s p r e s e nt t h e i r r e p o r t o n G l o b a l H e a l t h L i m i te d a n d co nt r o l l e d e nt i t i e s (‘G r o u p’) fo r t h e f i n a n c i a l ye a r e n d e d 3 0 J u n e 2 017. 2.1. DIRECTORS T h e n a m e s o f t h e D i r e c to r s i n o f f i c e a t a ny t i m e d u r i n g , o r s i n c e t h e e n d o f, t h e ye a r a r e: Names Steven L. Pynt Mathew Cherian Grant Smith Robert Knowles Pattie Beerens Position Non-executive Chairman Executive director Non-executive director Non-executive director Non-executive director (Appointed 1 December 2016) D i r e c to r s h a ve b e e n i n o f f i c e s i n c e t h e s ta r t o f t h e f i n a n c i a l ye a r to t h e d a te o f t h i s r e p o r t u n l e s s ot h e r w i s e s ta te d . I N F O R M AT I O N O N D I R E C TO R S T h e s k i l l s , e x p e r i e n c e a n d e x p e r t i s e o f e a c h p e r s o n w h o i s a D i r e c to r o f t h e C o m p a ny a t t h e e n d o f t h e f i n a n c i a l ye a r i s p r ov i d e d b e l o w. 1. S T E V E N L . PYN T Q u a l i f i ca t i o n s L L B , B B u s , M B A , MTa x I n d e p e n d e n t N o n - E xe c u t i ve C h a i r m a n M r P y nt h a s b e e n a n i n d e p e n d e nt n o n - e x e c u t i ve d i r e c to r s i n c e 2 0 0 0 a n d C h a i r m a n s i n ce 2 0 0 5 . M r P y nt i s L e g a l D i r e c to r o f M u z z B u z z F r a n c h i s i n g P t y Ltd , a d r i ve t h r o u g h c o f fe e s to r e f r a n c h i s o r. M r P y nt i s a l s o a D i r e c to r o f t h e Pe r t h l e g a l f i r m , T h o m p s o n P y nt, a n d h i s m a i n a r e a o f p r a c t i c e i s i n c o m m e r c i a l l a w i n c l u d i n g c o r p o r a t i o n s’ l a w, f r a n c h i s i n g a n d co nt r a c t s . H e i s a m e m b e r o f t h e A u s t r a l i a n I n s t i t u te o f C o m p a ny D i r e c to r s a n d w a s fo r m e r l y a m e m b e r o f t h e Ra c i n g Pe n a l t i e s A p p e a l s Tr i b u n a l a n d C h a i r m a n o f t h e C o m m e r c i a l Tr i b u n a l o f WA . O t h e r L i s t e d C o m p a n y C u r r e n t D i r e c t o r s h i p s E p h r a i m Re s o u r c e s L i m i te d G o n d w a n a Re s o u r ce s L i m i te d F o r m e r D i r e c t o r s h i p s i n t h e l a s t 3 ye a r s p r i o r t o t h e c u r r e n t ye a r R i c h f i e l d I nte r n a t i o n a l L i m i te d S p e c i a l R e s p o n s i b i l i t i e s C h a i r m a n o f t h e B o a r d M e m b e r o f A u d i t C o m m i t te e 10 2 . M AT H E W C H E R I A N Q u a l i f i ca t i o n s B B u s ( I S/ I T ), M AC S , M A I C D C h i e f E xe c u t i ve O f f i ce r M r C h e r i a n h a s b e e n i n t h e i n fo r m a t i o n te c h n o l o g y i n d u s t r y s i n ce 19 81. I n 19 8 5 h e e s ta b l i s h e d Wo r k i n g Sy s te m s P t y Ltd i n Pe r t h , We s te r n A u s t r a l i a . M r C h e r i a n w a s a p p o i nte d C E O o f Wo r k i n g Sy s te m s S o l u t i o n s L i m i te d i n J a n u a r y 2 0 0 2 , to r e - fo c u s t h e G r o u p a s a s o f t w a r e p r o d u c t d eve l o p e r fo r t h e H e a l t h ca r e s e c to r. T h e i n i t i a l p h a s e c u l m i n a te d w i t h t h e r e - b r a n d i n g o f t h e C o m p a ny a s G l o b a l H e a l t h L i m i te d i n D e c e m b e r 2 0 07. M r C h e r i a n p l a y s a n a c t i ve r o l e i n p r o d u c t s t r a te g y a n d t h e d eve l o p m e nt o f ove r s e a s m a r ket s fo r t h e C o m p a ny. O t h e r C u r r e n t D i r e c t o r s h i p s N o n e F o r m e r D i r e c t o r s h i p s i n t h e l a s t 3 ye a r s p r i o r t o t h e c u r r e n t ye a r N o n e S p e c i a l R e s p o n s i b i l i t i e s M a n a g i n g D i r e c to r 3 . G R A N T S M I T H Q u a l i f i ca t i o n s B C o m m , A A I M , A S I A I n d e p e n d e n t N o n - E xe c u t i ve D i r e c t o r M r S m i t h h a s w o r ke d i n i n s u r a n ce, s u p e r a n n u a t i o n , i nve s t m e nt a n d f u n d s m a n a g e m e nt fo r ove r 4 0 ye a r s . H e s ta r te d w i t h N a t i o n a l M u t u a l (n o w A M P) i n t h e i nve s t m e nt s d i v i s i o n a n d w a s r e s p o n s i b l e fo r t h e e s ta b l i s h m e nt o f t h e f u n d s m a n a g e m e nt b u s i n e s s fo r N a t i o n a l M u t u a l . I n 19 8 4 h e e s ta b l i s h e d a n i n d e p e n d e nt f u n d s m a n a g e m e n t g r o u p a n d f l o a te d H o s p i ta l s o f A u s t r a l i a - t h e f i r s t h e a l t h c a r e i nve s t m e n t f u n d i n A u s t r a l i a . H o s p i ta l s o f A u s t r a l i a o w n e d a n d o p e r a te d a n u m b e r o f h o s p i ta l s t h r o u g h o u t A u s t r a l i a . M r S m i t h w a s i nt i m a te l y i nvo l ve d i n t h e b u i l d i n g o f a n u m b e r o f h o s p i ta l s i n c l u d i n g St r a t h f i e l d p r i va te, S o u t h e r n H i g h l a n d s P r i va te H o s p i ta l , Po r t M a cq u a r i e H o s p i ta l a n d t h e r e f u r b i s h m e nt o f a n u m b e r o f ot h e r h e a l t h c a r e fa c i l i t i e s . H o s p i ta l s o f A u s t r a l i a w a s u l t i m a te l y a cq u i r e d by M a y n e N i c k l e s s L i m i te d . I n t h e p a s t 15 ye a r s M r S m i t h d eve l o p e d a n d b u i l t t h e M e d i ca C e nt r e a n d o p e n e d t h e f i r s t d i g i ta l (p a p e r l e s s) p r i va te s u r g i ca l h o s p i ta l i n A u s t r a l i a . H e i s c u r r e nt l y i nvo l ve d i n d eve l o p i n g n e w h o s p i ta l s i n M e l b o u r n e. M r S m i t h i s a l s o i nvo l ve d i n u t i l i s i n g d i g i ta l te c h n o l o g y to g e n e r a te i n c r e a s e d p r o d u c t i v i t y a n d e f f i c i e n c i e s fo r t h e h e a l t h ca r e s e c to r. O t h e r L i s t e d C o m p a n y C u r r e n t D i r e c t o r s h i p s N o n e 11 F o r m e r D i r e c t o r s h i p s i n t h e l a s t 3 ye a r s p r i o r t o t h e c u r r e n t ye a r N o n e S p e c i a l R e s p o n s i b i l i t i e s M e m b e r o f A u d i t C o m m i t te e 4 . R O B E R T K N OW L E S Q u a l i f i ca t i o n s M A I C D AO I n d e p e n d e n t N o n - E xe c u t i ve D i r e c t o r M r K n o w l e s i s a fa r m e r a n d c o m p a ny d i r e c to r. H e i s a d i r e c to r o f t h e S i l ve r C h a i n G r o u p o f C o m p a n i e s , I P G P t y Ltd , D r i n k w i s e A u s t r a l i a Ltd a n d St J o h n o f G o d H e a l t h ca r e Ltd . H e i s a l s o a C o m m i s s i o n e r w i t h t h e N a t i o n a l M e nta l H e a l t h C o m m i s s i o n a n d C h a i r o f t h e Roya l C h i l d r e n’s H o s p i ta l . M r K n o w l e s w a s V i c to r i a n M i n i s te r fo r H e a l t h f r o m 19 96 u nt i l 19 9 9 a n d a m e m b e r o f t h e V i c to r i a n L e g i s l a t i ve C o u n c i l f r o m 1976 -19 9 9. H e h a s a l s o s e r ve d a s C h a i r m a n o f F o o d Sta n d a r d s A u s t r a l i a a n d N e w Ze a l a n d a n d a s a n Ag e d C a r e C o m p l a i n t s C o m m i s s i o n e r. O t h e r L i s t e d C o m p a n y C u r r e n t D i r e c t o r s h i p s N o n e F o r m e r D i r e c t o r s h i p s i n t h e l a s t 3 ye a r s p r i o r t o t h e c u r r e n t ye a r N o n e S p e c i a l R e s p o n s i b i l i t i e s N o n e 5 . PAT T I E B E E R E N S Q u a l i f i ca t i o n s L L B c o m , GA I C D I n d e p e n d e n t N o n - E xe c u t i ve D i r e c t o r M s B e e r e n s h a s w o r ke d i n t h e h e a l t h c a r e s e c to r fo r ove r 2 0 ye a r s a n d a s t h e C E O o f t w o n a t i o n a l h e a l t h s e c to r i n d u s t r y a s s o c i a t i o n s fo r ove r 12 ye a r s . H e r e a r l y ca r e e r w a s a s a c o m m e rc i a l s o l i c i to r a n d l a te r o n a s C o m p a ny S e c r eta r y a n d G e n e r a l M a n a g e r L e g a l fo r M c E w a n s L i m i te d i n 19 91. M s B e e r e n s e s ta b l i s h e d a n d l a u n c h e d A u s t r a l i a’s f i r s t h e a l t h o n l y p h a r m a c y f r a n c h i s e i n 19 9 8 fo r F a u l d i n g L i m i te d a n d , a s G e n e r a l M a n a g e r fo r M a y n e G r o u p L i m i te d fo l l o w i n g t h e a cq u i s i t i o n , m a n a g e d p h a r m a c y s y s te m s o p e r a t i o n s a n d g ove r n m e nt r e l a t i o n s . I n 2 0 0 5 , a s E x e c u t i ve D i r e c to r o f t h e N a t i o n a l P h a r m a c e u t i ca l S e r v i c e s A s s o c i a t i o n , M s B e e r e n s l e d t h e e s ta b l i s h m e nt o f t h e C o m m u n i t y S e r v i c e O b l i g a t i o n (a F e d e r a l G ove r n m e nt i n i t i a t i ve) w h i c h r e co g n i s e d t h e i m p o r ta n ce o f t i m e l y p a t i e nt a cc e s s , to m e d i c i n e s a c r o s s A u s t r a l i a . T h e C S O c o m m e n c e d i n 2 0 0 5 a n d c o n t i n u e s to d a y to s u p p o r t a cc e s s to m e d i c i n e s i n r u r a l A u s t r a l i a . 12 M s B e e r e n s h a s a n o n g o i n g r o l e a s C E O o f t h e A u s t r a l i a n D i a g n o s t i c I m a g i n g A s s o c i a t i o n a n d n e g ot i a te d t h e r e c e nt l y a n n o u n c e d a g r e e m e nt w i t h t h e F e d e r a l G ove r n m e nt o n t h e p l a n fo r a cce s s to a f fo r d a b l e d i a g n o s t i c i m a g i n g fo r a l l A u s t r a l i a n s . O t h e r L i s t e d C o m p a n y C u r r e n t D i r e c t o r s h i p s N o n e F o r m e r D i r e c t o r s h i p s i n t h e l a s t 3 ye a r s p r i o r t o t h e c u r r e n t ye a r N o n e S p e c i a l R e s p o n s i b i l i t i e s N o n e 2.2. COMPAN Y SECRETARY Pete r C u r i g l i a n o h e l d t h e p o s i t i o n o f C o m p a ny S e c r eta r y f r o m O c to b e r 2 0 0 5 u nt i l h i s r e s i g n a t i o n a n d d e p a r t u r e f r o m G l o b a l H e a l t h i n D e ce m b e r 2 016 . M r Steve n P y nt ( I n d e p e n d e nt D i r e c to r a n d C h a i r m a n) w a s a p p o i nte d a s co m p a ny s e c r eta r y o n a n i nte r i m b a s i s e f fe c t i ve f r o m 11 J a n u a r y 2 017 fo l l o w i n g Pete r ’s d e p a r t u r e. M r G l e n n F o w l e s [ B B u s (Ac c o u nt i n g)] w a s a p p o i nte d a s c o m p a ny s e c r eta r y e f fe c t i ve o n 21 F e b r u a r y 2 017. M r F o w l e s w a s p r ev i o u s l y C o m p a ny S e c r eta r y o f A SX l i s te d c o m p a n i e s , C o nta n g o M i c r o C a p L i m i te d a n d C o n ta n g o I n c o m e G e n e r a to r L i m i te d . T h e c o m p a ny s e c r eta r y i s r e s p o n s i b l e fo r t h e C o m p a ny’s co nt i n u o u s d i s c l o s u r e r e q u i r e m e nt s , p r e p a r a t i o n o f t h e A n n u a l Re p o r t, A n n u a l G e n e r a l M e et i n g s a n d a n n o u n c e m e nt s to t h e s h a r e m a r ket. 2.3. MEETI NG OF DIRECTO RS AND CO M M I TT EE S Th e n u m b e r o f m e et i n g s o f t h e C o m p a ny’s B o a r d o f D i r e c to r s a n d o f e a c h A u d i t c o m m i t te e h e l d , w h e r e by m e m b e r s c o u l d a t te n d i n t h e i r ca p a c i t y d u r i n g t h e ye a r e n d e d 3 0 J u n e 2 017, a n d t h e n u m b e r o f m e et i n g s a t te n d e d by e a c h D i r e c to r w e r e: Direc tors Mee t in gs Au dit Co mm itt e e Mee t ing s Number of Meet ings Attended Nu m be r of Me et in gs e ligible t o at t en d Nu mb er of Me et in gs At te n de d Mr M Cherian Mr S L Pynt Mr G Smith Mr R Knowles Ms P Beerens 6 6 6 6 2 6 6 6 6 2 - 1 1 - - Nu m be r of Me et ing s e lig ible to at t en d - 1 1 - - 13 2.4. DIRECTORS’ I NTEREST S Re l eva nt i nte r e s t s o f t h e D i r e c to r s a n d t h e i r c l o s e l y r e l a te d p a r t i e s i n t h e s h a r e s o f t h e C o m p a ny a t t h e d a te o f t h i s r e p o r t a r e: Mr M Cherian Mr S L Pynt Mr G Smith Mr R Knowles Ms P Beerens O rd in ar y Sh ar e s 18,619,370 257,408 300,000 20,000 22,000 Total 19, 218, 778 1 Options through a related party, Kye Cherian 2 400,000 options were approved for issue to directors at the 2016 AGM Op tio n s 150,0001 200,0002 100,0002 100,0002 - 550, 000 2.5. PRINCIPAL ACTI VI T IES D u r i n g t h e ye a r t h e p r i n c i p a l a c t i v i t i e s o f t h e G r o u p c o n s i s te d o f : 1. t h e d eve l o p m e nt, s a l e s a n d s u p p o r t o f a p p l i ca t i o n s o f t w a r e fo r t h e h e a l t h c a r e s e c to r ; a n d 2 . t h e d eve l o p m e nt o f s y s te m s i n te g r a t i o n s o f t w a r e t h a t e n a b l e s d a ta to b e s e c u r e l y e x c h a n g e d b et w e e n m u l t i p l e, d i s p a r a te a p p l i ca t i o n s w i t h i n a n e nte r p r i s e a n d a c r o s s t h e h e a l t h ca r e va l u e c h a i n . 2.6. RESUL TS AND DI VI D EN DS 2.6.1. O PE RA TI N G RESU LTS T h e p r o f i t o f t h e G r o u p fo r t h e f i n a n c i a l ye a r a f te r p r ov i d i n g fo r i n co m e ta x a n d e l i m i n a t i n g n o n - c o nt r o l l i n g e q u i t y i nte r e s t s a m o u n te d to $1, 7 2 8 , 0 4 5 (2 016 r e s ta te d: $107,94 5). 2.6.2. DI VI D EN DS D u r i n g t h e f i n a n c i a l ye a r e n d e d 3 0 J u n e 2 017, t h e C o m p a ny d e c l a r e d a n d p a i d t w o s p e c i a l d i v i d e n d s o f 1 c e nt p e r s h a r e e a c h . D eta i l s o f d i v i d e n d s p a i d a r e d i s c l o s e d i n n ote 2 9 o f t h e f i n a n c i a l s ta te m e nt s . 2.7. REVI EW OF OPERA TI ONS I n fo r m a t i o n o n t h e o p e r a t i o n s a n d f i n a n c i a l p o s i t i o n o f t h e G r o u p a n d i t s b u s i n e s s s t r a te g i e s a n d p r o s p e c t s i s s et o u t i n t h e ‘C h i e f E x e c u t i ve O f f i ce r ’s O p e r a t i o n s Re p o r t ’ s e c t i o n o f t h i s A n n u a l Re p o r t. 2.8. SIGNI FICANT CHANGES I N TH E S T ATE O F AFFAI R S T h e r e a r e n o s i g n i f i ca nt c h a n g e s i n t h e s ta te o f a f fa i r s o f t h e G r o u p d u r i n g t h e f i n a n c i a l ye a r e n d e d 3 0 J u n e 2 017 a n d u p to t h e d a te o f t h i s r e p o r t. 2.9. SIGNIFI CANT EVENTS A FT ER R E PO R TI NG D AT E T h e r e h a ve b e e n n o s i g n i f i c a nt eve nt s a f te r r e p o r t i n g d a te. 14 2.10. LIKE LY DEVELOPMENT S T h e G r o u p w i l l c o nt i n u e to p u r s u e i t s p o l i c y o f i n c r e a s i n g t h e p r o f i ta b i l i t y a n d m a r ket s h a r e o f i t s m a j o r b u s i n e s s s e c to r s d u r i n g t h e n e x t f i n a n c i a l ye a r. 2.11. SHA RE OPTION S At t h e d a te o f t h i s r e p o r t, t h e u n l i s te d o r d i n a r y s h a r e s o f G l o b a l H e a l t h L i m i te d u n d e r o pt i o n a r e: Date of Issue Date of E xpir y Exe rc is e Pr ice p er o pt ion Nu mb er Un de r Op tio n * 19 December 2013 19 December 2017 26 May 2014 10 June 2016 26 May 2019 10 June 2020 19 December 2016 30 November 2019 19 December 2016 30 November 2021 $0.65 $0.75 $0.65 $0.75 $0.75 530,000 300,000 310,000 400,000 600,000 2, 140, 000 *Option holders do not have any rights to participate in any issues of shares or other interests of the company or any other entity. All options were issued by Global Health Limited and entitled the holder to one ordinary share in Global Health Limited for each option exercised. 4 0 0 , 0 0 0 o pt i o n s w i t h a n e x e rc i s e p r i c e o f $ 0 . 75 e x p i r i n g o n 3 0 N ove m b e r 2 019 w e r e i s s u e d D u r i n g t h e ye a r e n d e d 3 0 J u n e 2 017, t h e fo l l o w i n g eve nt s o cc u r r e d: • • • • 6 0 0 , 0 0 0 o pt i o n s w i t h a n e x e rc i s e p r i c e o f $ 0 . 75 e x p i r i n g o n 3 0 N ove m b e r 2 0 21 w e r e i s s u e d 3 0 0 , 0 0 0 o pt i o n s w i t h a n e x e rc i s e p r i c e o f $ 0 .15 e x p i r i n g o n 5 J u l y 2 018 w e r e e x e rc i s e d 8 0 , 0 0 0 o pt i o n s w i t h a n e x e r c i s e p r i ce o f $ 0 . 6 5 e x p i r i n g o n t h e10 J u n e 2 0 2 0 w e r e fo r fe i te d F o r d eta i l s o f o pt i o n s i s s u e d to d i r e c to r s a n d e x e c u t i ve s a s r e m u n e r a t i o n , r e fe r to t h e r e m u n e r a t i o n r e p o r t. 2.12. REM UNER ATI ON REP OR T ( AUD I TE D ) 2.12. 1. PRI NC I P LE S USE D TO DETERM INE TH E NAT U RE AND AMOU NT O F REM UNE RA TION Re m u n e r a t i o n o f D i r e c to r s a n d key m a n a g e m e nt p e r s o n n e l o f t h e C o m p a ny i s e s ta b l i s h e d by t h e B o a r d . Re m u n e r a t i o n i s d ete r m i n e d a s p a r t o f a n a n n u a l p e r fo r m a n c e r ev i e w, h a v i n g r e g a r d to m a r ket fa c to r s a n d a p e r fo r m a n ce eva l u a t i o n p r o c e s s . T h e r e m u n e r a t i o n f r a m e w o r k i s d e s i g n e d to a l i g n e x e c u t i ve r e w a r d w i t h a c h i eve m e nt o f s t r a te g i c o b j e c t i ve s a n d t h e c r e a t i o n o f va l u e fo r s h a r e h o l d e r s , a n d c o n fo r m s to m a r ket b e s t p r a c t i c e fo r d e l i ve r y o f r e w a r d . F o r D i r e c to r s a n d e x e c u t i ve s , r e m u n e r a t i o n p a c ka g e s g e n e r a l l y c o m p r i s e s a l a r y a n d s u p e r a n n u a t i o n . E x e c u t i ve s a r e a l s o p r ov i d e d w i t h l o n g e r- te r m i n c e nt i ve s t h r o u g h t h e e m p l oye e s h a r e a n d s h a r e o pt i o n s c h e m e s , w h i c h a c t to a l i g n t h e e x e c u t i ve’s a c t i o n s w i t h t h e i nte r e s t s o f t h e s h a r e h o l d e r s . N o n - E x e c u t i ve D i r e c to r s a r e n ot e nt i t l e d to p e r fo r m a n c e - b a s e d b o n u s e s . T h e B o a r d m e et s a n n u a l l y to r ev i e w i t s o w n p e r fo r m a n c e. T h e C h a i r m a n a l s o h o l d s i n d i v i d u a l d i s c u s s i o n s w i t h e a c h D i r e c to r to d i s c u s s t h e i r p e r fo r m a n c e. T h e N o n - e x e c u t i ve D i r e c to r s a r e r e s p o n s i b l e fo r eva l u a t i n g t h e p e r fo r m a n c e o f t h e C h i e f E x e c u t i ve O f f i c e r, w h o i n t u r n eva l u a te s t h e p e r fo r m a n c e o f a l l ot h e r s e n i o r e x e c u t i ve s . 15 P ER F ORMANCE BASED RE MU NERATIO N Pe r fo r m a n c e b a s e d r e m u n e r a t i o n i s eva l u a te d b a s e d o n s p e c i f i c c r i te r i a , i n c l u d i n g t h e G r o u p’s b u s i n e s s p e r fo r m a n c e a n d a c h i eve m e nt o f t u r n ove r a n d N PAT ( N et P r o f i t A f te r Ta x ) ta r g et s , w h et h e r l o n g - te r m s t r a te g i c o b j e c t i ve s a r e b e i n g a c h i eve d a n d t h e a c h i eve m e n t o f i n d i v i d u a l p e r fo r m a n c e o b j e c t i ve s . R ELATI ONSHIP BETWEEN REMUNE RATION AND C OMPANY PE RFO RMA NC E T h e r e m u n e r a t i o n p r i n c i p l e s a r e ta i l o r e d to i n c r e a s e g o a l c o n g r u e n c e b et w e e n s h a r e h o l d e r s , d i r e c to r s a n d e x e c u t i ve s . Tw o m et h o d s h a ve b e e n a p p l i e d to a c h i eve t h i s a i m , t h e f i r s t b e i n g a p e r fo r m a n c e b o n u s b a s e d o n K P I s , a n d t h e s e co n d b e i n g t h e i s s u e o f o pt i o n s to d i r e c to r s a n d e x e c u t i ve s to e n c o u r a g e t h e a l i g n m e nt o f p e r s o n a l a n d s h a r e h o l d e r i nte r e s t s . T h e r e i s n o fo r m a l p o l i c y l i n k i n g r e m u n e r a t i o n a n d t h e co m p a ny’s p e r fo r m a n c e. NO N-EXECUTI VE DIRECTORS’ R EMUNE RATION F e e s a n d p a y m e nt s to N o n - E x e c u t i ve D i r e c to r s r e f l e c t t h e d e m a n d s w h i c h a r e m a d e o n , a n d t h e r e s p o n s i b i l i t i e s o f, t h e D i r e c to r s . N o n - e x e c u t i ve D i r e c to r s’ fe e s a n d p a y m e nt s a r e r ev i e w e d a n n u a l l y by t h e B o a r d to e n s u r e a l l p a y m e nt s a r e a p p r o p r i a te a n d i n l i n e w i t h t h e m a r ket. T h e m a x i m u m a m o u nt o f r e m u n e r a t i o n a s d ete r m i n e d by s h a r e h o l d e r s a t t h e C o m p a ny’s A n n u a l G e n e r a l M e et i n g o n 2 4 N ove m b e r 2 0 0 9 i s $ 3 5 0 , 0 0 0 p e r a n n u m w h i c h m a y b e d i v i d e d a m o n g N o n - E x e c u t i ve D i r e c to r s i n t h e m a n n e r d ete r m i n e d by t h e B o a r d f r o m t i m e to t i m e. T h e C h a i r m a n’s fe e s a r e d ete r m i n e d i n d e p e n d e nt l y to t h e fe e s o f N o n - E x e c u t i ve D i r e c to r s b a s e d o n co m p a r a t i ve r o l e s i n s i m i l a r s i z e d c o m p a n i e s a n d s e c to r s i n t h e e x te r n a l m a r ket. T h e C h a i r m a n i s n ot p r e s e nt a t a ny d i s c u s s i o n s r e l a t i n g to d ete r m i n a t i o n o f h i s o w n r e m u n e r a t i o n . T h e r e w e r e n o r e m u n e r a t i o n c o n s u l ta nt s u s e d d u r i n g t h e ye a r. EXECUTIVE DI RECTORS’ REMUNE RATION T h e E x e c u t i ve D i r e c to r s’ s a l a r y a n d c o n d i t i o n s a r e d ete r m i n e d by t h e B o a r d o f D i r e c to r s a n d r ev i e w e d a t t h e e x p i r y o f e a c h c o nt r a c t p e r i o d . EXECUTIVE REMUNERATI ON E x e c u t i ve s a r e o f fe r e d a c o m p et i t i ve b a s e p a y t h a t co m p r i s e s t h e f i x e d c o m p o n e nt o f p a y a n d r e w a r d s . B a s e p a y fo r s e n i o r e x e c u t i ve s i s r ev i e w e d a n n u a l l y to e n s u r e t h e e x e c u t i ve’s p a y i s c o m p et i t i ve w i t h t h e m a r ket. T h e r e a r e n o g u a r a nte e d b a s e p a y i n c r e a s e s i n c l u d e d i n a ny s e n i o r e x e c u t i ve’s c o nt r a c t. 2.12.2. DE TA I LS OF R E MUNE RAT ION D eta i l s o f t h e r e m u n e r a t i o n o f t h e D i r e c to r s a n d t h e key m a n a g e m e nt p e r s o n n e l o f G l o b a l H e a l t h L i m i te d a r e s et o u t i n t h e fo l l o w i n g ta b l e: 16 2017 Sh ort-Term benefits Performance related Post - Employment Benefits Ot her long term benefits Share- ba sed Pa yment Bonus S u pe rann uation Shares $ Tot al $ Propo rt i on of Remu n er at i on th a t i s perfo rm a nc e b as ed Accrued Long Service Leave $ - 4,189 - - - - $ 3,922 33,381 3,043 3,043 1,771 20,820 9,432 54,638 - 4,716 4,716 - - 306,604 39,796 39,796 20,416 160,864 % - - - - - - - - 35,370 2,435 16,002 174,387 101, 350 6, 624 34, 866 796, 501 1 appointed 1 December 2016 2 resigned 28 December 2016 T h e r e h a ve b e e n n o c h a n g e s i n D i r e c to r s a n d E x e c u t i ve s s u b s e q u e nt to ye a r e n d . 2 0 16 Sh ort-Term benefits Performance related Post - Employment Benefits Ot her long term benefits Share- ba sed Pa yment Bonus S u pe rann uation Accrued Long Service Leave $ - 4,199 - - $ Directors: 3,922 24,799 3,043 3,043 16,292 2,758 13,064 - 64 ,16 3 6, 957 Shares $ - - - - - - - Tot al $ 45,206 319,337 35,080 35,080 175,378 150,577 760, 658 Propo r ti o n of Remun er a ti on tha t i s perfo r ma n ce ba se d % - - - - - - - $ - - - - - - - - $ - - - - - - - Nam e Sa lary and or Fees $ Di re c tors : Mr S L Pynt 41,284 Mr M Cherian 269,034 Mr G Smith 32,037 Mr R Knowles 32,037 MS P Beerens1 18,645 Key Management Personnel: Mr P Curigliano 2 Mr K Jayesuria 140,044 120,580 TOTAL 653,661 Nam e Sa lary and or Fees $ Mr S L Pynt 41,284 Mr M Cherian 290,339 Mr G Smith Mr R Knowles 32,037 32,037 Key Management Personnel: Mr P Curigliano Mr K Jayesuria 156,328 137,513 TOTAL 689,538 17 2.12.3. SERV I C E AGREEM EN TS Re m u n e r a t i o n a n d ot h e r te r m s o f e m p l oy m e nt fo r key m a n a g e m e n t p e r s o n n e l a r e fo r m a l i s e d i n s e r v i c e a g r e e m e nt s . I t i s C o m p a ny p o l i c y t h a t e m p l oy m e nt co n t r a c t s co nta i n p r ov i s i o n s fo r te r m i n a t i o n w i t h n ot i c e o r p a y m e nt i n l i e u t h e r e o f a n d fo r te r m i n a t i o n by t h e C o m p a ny w i t h o u t n ot i c e fo r s e r i o u s m i s co n d u c t a n d b r e a c h o f c o nt r a c t. T h e M a n a g i n g D i r e c to r i s e nt i t l e d to r e c e i ve a te r m i n a t i o n p a y m e n t i n a d d i t i o n to n ot i c e w h e r e t h e C o m p a ny te r m i n a te s e m p l oy m e nt o n g r o u n d s o f i l l n e s s o r i n ca p a c i t y. T h e n ot i c e p e r i o d r e q u i r e d to b e g i ve n by t h e e m p l oye e o r t h e C o m p a ny a l o n g w i t h a ny te r m i n a t i o n p a y m e nt s a r e s et o u t i n t h e ta b l e b e l o w. Notic e perio d by Co mpan y No tic e pe rio d by Em p lo yee T er m in ati on Pa ym e nts Managing Direc to r Mr M Cherian 6 months 6 months 6 months* Technology Delivery Manager Mr K Jayesuria 1 month 1 month None * if termination is by reason of the employee’s illness or incapacity. 2.12.4. INT ER E ST S IN SH ARES AND OP T I ONS SHARES T h e i nte r e s t o f D i r e c to r s a n d t h e i r r e l a te d e nt i t i e s i n s h a r e s o f t h e C o m p a ny a s a t 3 0 J u n e 2 017 a r e: Total number of shares Nu mb er of sh ar es s old Nu m be r of s h ar es ac q uir ed 2017 20 16 2017 2016 Mr M Cherian 18,619,370 18,619,370 Mr S L Pynt Mr G Smith Mr R Knowles Ms P Beerens 257,408 300,000 20,000 22,000 232,408 300,000 20,000 - 19,218,778 19,171, 778 - - - - - - - - - - - - 2017 - 25,000 - - 22,000 2016 - - 20,000 - - 47, 000 20, 000 D i r e c to r s r e ce i ve d d i v i d e n d s f r o m t h e i r s h a r e h o l d i n g s i n t h e n o r m a l c o u r s e o f d i v i d e n d p a y m e nt s by t h e C o m p a ny – r e fe r to n ote 2 9 fo r d eta i l s o f d i v i d e n d s p a i d . 18 O P TI ONS T h e i nte r e s t s o f D i r e c to r s a n d t h e i r r e l a te d e n t i t i e s i n o pt i o n s o f t h e C o m p a ny a s a t 3 0 J u n e 2 017 a r e: 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 Number of Options unvested at report date Option type (Listed / Unlisted) Exercise price per Option ($) 2017 2016 2017 2016 2017 2017 2017 150,000 150,000 - Mr M Cherian1 Mr S L Pynt Mr G Smith 200,000 100,000 Mr R Knowles 100,000 Ms P Beerens - - - - - 200,000 100,000 100,000 - 550,000 150,000 400,000 1 Options through a related party, Kye Cherian - - - - - - - - - - - - 150,000 - Unlisted $0.65 66,667 33,337 33,337 - 133,333 Unlisted 66,663 66,663 - Unlisted Unlisted Unlisted 283, 341 266, 659 $0.75 $0.75 $0.75 $0.75 - 2.12.5. LOA N S TO KE Y MA NAGE MENT PE R SO NNE L T h e r e w e r e n o l o a n s a d va n c e d to key m a n a g e m e n t p e r s o n n e l d u r i n g t h e ye a r. 2.12.6. OTH ER TRA N SA CTIONS WIT H K EY MANAGE ME NT PE RSO NNE L T h e r e w e r e n o ot h e r t r a n s a c t i o n s c o n d u c te d b et w e e n t h e G r o u p a n d K M P o r t h e i r r e l a te d p a r t i e s , a p a r t f r o m t h o s e d i s c l o s e d a b ove r e l a t i n g to e q u i t y, c o m p e n s a t i o n a n d l o a n s , t h a t w e r e co n d u c te d ot h e r t h a n i n a cc o r d a n c e w i t h n o r m a l e m p l oye e, c u s to m e r o r s u p p l i e r r e l a t i o n s h i p s o n te r m s n o m o r e fa vo u r a b l e t h a n t h o s e r e a s o n a b l y e x p e c te d u n d e r a r m’s l e n g t h d e a l i n g s w i t h u n r e l a te d p e r s o n s . -- End of audited remuneration report – 19 2.13. INDEMNIF ICATI ON O F D IR ECTO R S AND E X E CU TI V E S OR AUDITORS D u r i n g o r s i n ce t h e e n d o f t h e f i n a n c i a l ye a r, t h e G r o u p h a s n ot, i n a ny r e s p e c t fo r a ny p e r s o n w h o i s o r h a s b e e n a n o f f i c e r o r d i r e c to r o f t h e p a r e nt e nt i t y o r a r e l a te d b o d y c o r p o r a te, i n d e m n i f i e d o r m a d e a ny r e l eva nt a g r e e m e nt fo r i n d e m n i f y i n g a g a i n s t a l i a b i l i t y, i n c l u d i n g c o s t s a n d e x p e n s e s i n s u cc e s s f u l l y d e fe n d i n g l e g a l p r o c e e d i n g s . D u r i n g o r s i n ce t h e e n d o f t h e f i n a n c i a l ye a r t h e G r o u p h a s p a i d p r e m i u m s i n r e s p e c t o f a c o nt r a c t i n s u r i n g t h e D i r e c to r s a n d o f f i c e r s o f a l l c o m p a n i e s i n t h e G r o u p a g a i n s t a l i a b i l i t y i n c u r r e d i n t h e i r r o l e a s D i r e c to r s a n d o f f i c e r s o f a l l co m p a n i e s w i t h i n t h e G r o u p e x c e pt w h e r e: i . i i . T h e l i a b i l i t y a r i s e s o u t o f c o n d u c t i nvo l v i n g a w i l f u l b r e a c h o f d u t y ; o r T h e r e h a s b e e n a co nt r a ve n t i o n o f S e c t i o n s 2 3 2(5) o r (6) o f t h e C o r p o r a t i o n s Ac t 2 0 01. T h e tota l a m o u nt o f p r e m i u m s p a i d by t h e G r o u p fo r D i r e c to r s a n d O f f i ce r s L i a b i l i t y I n s u r a n c e w a s $13 , 610 (2 016: $13 , 6 0 8 ). 2.14. PROCEEDINGS ON BEHAL F O F TH E CO M P ANY O n 2 A u g u s t 2 016 t h e C o m p a ny, i t s s u b s i d i a r y Wo r k i n g Sy s te m s S o f t w a r e P t y Ltd a n d S A H e a l t h r e a c h e d s et t l e m e nt r e g a r d i n g S A H e a l t h’s co nt i n u i n g u s e o f C H I R O N s o f t w a r e. D eta i l s o f t h e s et t l e m e nt w e r e r e l e a s e d to A SX o n 4 A u g u s t 2 016 . F u r t h e r t r e a t m e nt o f t h i s i te m i s d eta i l e d i n N ote 1(v) “ Re s ta te m e nt o f P r i o r Pe r i o d i te m” o f t h e s e f i n a n c i a l s ta te m e nt s . 2.15. NON -AUDIT SE RVIC ES T h e C o m p a ny’s a u d i to r, S h i n eW i n g A u s t r a l i a , h a s n ot p r ov i d e d a ny n o n - a u d i t o r a s s u r a n c e s e r v i c e s to t h e C o m p a ny. D eta i l s o f a m o u nt s p a i d fo r t h e i r s ta t u to r y a u d i t d u t i e s a r e d eta i l e d i n N ote 2 3 . 2.16. ENVI RONMENTAL I S SUES A s t h e o p e r a t i o n s o f t h e G r o u p a r e l i m i te d to c o m p u te r s o f t w a r e d eve l o p m e nt a n d s u p p o r t a n d p r o fe s s i o n a l c o n s u l t i n g s e r v i ce s , t h e G r o u p h a s m i n i m a l i nvo l ve m e nt i n a n d e x p o s u r e to e nv i r o n m e nta l r i s k s a n d i s s u e s . T h e G r o u p i s n ot r e q u i r e d to c o m p l y w i t h a ny s p e c i f i c Ac t. 2.17. CORPORA TE GOVER NANC E I n r e c o g n i s i n g t h e n e e d fo r t h e h i g h e s t s ta n d a r d s o f c o r p o r a te b e h a v i o u r a n d a cc o u n ta b i l i t y, t h e D i r e c to r s o f t h e C o m p a ny s u p p o r t a n d h a ve a d h e r e d to t h e p r i n c i p l e s to t h e e x te nt o u t l i n e d i n t h e C o r p o r a te G ove r n a n c e Sta te m e nt. T h e C o m p a ny’s C o r p o r a te G ove r n a n c e Sta te m e nt i s c o nta i n e d i n a s e p a r a te s e c t i o n o f t h i s A n n u a l Re p o r t. 20 2.18. AUDITORS’ I NDEPEND ENCE D E CL AR AT IO N A c o py o f t h e A u d i to r s’ I n d e p e n d e n c e D e c l a r a t i o n a s r e q u i r e d u n d e r s e c t i o n 3 07C o f t h e C o r p o r a t i o n s Ac t 2 0 01 a c c o m p a n i e s a n d fo r m s p a r t o f t h i s r e p o r t. S i g n e d i n a cco r d a n c e w i t h a r e s o l u t i o n o f t h e D i r e c to r s . S t eve n L e i g h P y n t N o n - E xe c u t i ve C h a i r m a n M e l b o u r n e, 2 7 S e p t e m b e r 2 017 21 3. Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 to the directors of Global Health Ltd and Controlled Entities I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017 there have been: (i) No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and (ii) No contraventions of any applicable code of professional conduct in relation to the audit. ShineWing Australia Chartered Accountants Nick Michael Partner Melbourne, 28 September 2017 ShineWing Australia ABN 39 533 589 331. Liability limited by a scheme approved under Professional Standards Legislation. ShineWing Australia is an independent member of ShineWing International Limited – members in principal cities throughout the world. 4. CORP ORATE GOVERNA NCE S T AT EMEN T G l o b a l H e a l t h L i m i te d (t h e C o m p a ny) a n d t h e B o a r d a r e c o m m i t te d to a c h i ev i n g a n d d e m o n s t r a t i n g t h e h i g h e s t s ta n d a r d s o f c o r p o r a te g ove r n a n c e. Acco r d i n g l y, u n l e s s s ta te d ot h e r w i s e i n t h i s d o c u m e nt, t h e B o a r d’s co r p o r a te g ove r n a n ce a r r a n g e m e nt s c o m p l y w i t h t h e r e c o m m e n d a t i o n s o f t h e A SX C o r p o r a te G ove r n a n c e C o u n c i l (2 014 – Ve r s i o n 3 ) a s w e l l a s c u r r e nt s ta n d a r d s o f b e s t p r a c t i c e fo r t h e e nt i r e f i n a n c i a l ye a r e n d e d 3 0 J u n e 2 017. T h e C o m p a ny a n d i t s c o nt r o l l e d e nt i t i e s to g et h e r a r e r e fe r r e d to a s t h e G r o u p i n t h i s s ta te m e n t. T h e B o a r d o f D i r e c to r s o f t h e C o m p a ny i s r e s p o n s i b l e fo r t h e co r p o r a te g ove r n a n ce o f t h e G r o u p. T h e D i r e c to r s a r e r e s p o n s i b l e to t h e s h a r e h o l d e r s fo r t h e p e r fo r m a n c e o f t h e G r o u p i n b ot h t h e s h o r t a n d t h e l o n g e r te r m a n d s e e k to b a l a n c e s o m et i m e s c o m p et i n g o b j e c t i ve s i n t h e b e s t i nte r e s t s o f t h e G r o u p a s a w h o l e. T h e B o a r d i s a l s o r e s p o n s i b l e fo r s et t i n g t h e s t r a te g i c d i r e c t i o n a n d e s ta b l i s h i n g t h e p o l i c i e s o f t h e G r o u p. T h e fo c u s i s to e n h a n ce t h e i nte r e s t s o f s h a r e h o l d e r s a n d ot h e r key s ta ke h o l d e r s a n d to e n s u r e t h e G r o u p i s p r o p e r l y m a n a g e d . D a y to d a y m a n a g e m e nt o f t h e G r o u p’s a f fa i r s a n d t h e i m p l e m e nta t i o n o f t h e c o r p o r a te s t r a te g y a n d p o l i c y i n i t i a t i ve s a r e fo r m a l l y d e l e g a te d by t h e B o a r d to t h e C h i e f E x e c u t i ve O f f i c e r a n d s e n i o r e x e c u t i ve s . A d e s c r i pt i o n o f t h e C o m p a ny’s m a i n c o r p o r a te g ove r n a n c e p r a c t i c e s i s s et o u t b e l o w. A l l t h e s e p r a c t i c e s , u n l e s s ot h e r w i s e s ta te d , w e r e i n p l a c e fo r t h e e nt i r e ye a r. ETHICAL STANDARDS T h e B o a r d i s c o m m i t te d to i t s c o r e g ove r n a n ce va l u e s o f i nte g r i t y, r e s p e c t, t r u s t a n d o p e n n e s s a m o n g a n d b et w e e n b o a r d m e m b e r s , m a n a g e m e nt, e m p l oye e s , c u s to m e r s a n d s u p p l i e r s . T h e s e va l u e s a r e e n s h r i n e d i n t h e B o a r d’s C o d e o f C o n d u c t p o l i c y. T h e C o d e o f C o n d u c t Po l i c y, r e q u i r e s a l l d i r e c to r s , m a n a g e m e nt a n d e m p l oye e s a t a l l t i m e s to: a c t h o n e s t l y a n d i n g o o d fa i t h; - e x e rc i s e d u e ca r e a n d d i l i g e n c e i n f u l f i l l i n g t h e f u n c t i o n s o f o f f i ce; - a vo i d c o n f l i c t s a n d m a ke f u l l d i s c l o s u r e o f a ny p o s s i b l e co n f l i c t o f i nte r e s t ; - c o m p l y w i t h b ot h t h e l et te r a n d s p i r i t o f t h e l a w ; - e n co u r a g e t h e r e p o r t i n g a n d i nve s t i g a t i o n o f u n l a w f u l a n d u n et h i ca l b e h a v i o u r ; a n d - c o m p l y w i t h t h e s h a r e t r a d i n g p o l i c y o u t l i n e d i n t h e C o d e o f C o n d u c t. D i r e c to r s a r e o b l i g e d to b e i n d e p e n d e nt i n j u d g m e n t a n d e n s u r e a l l r e a s o n a b l e s te p s a r e ta ke n to e n s u r e t h a t t h e B o a r d’s c o r e g ove r n a n c e va l u e s a r e n ot c o m p r o m i s e d i n a ny d e c i s i o n s t h e B o a r d m a ke s . DIVERSITY POL ICY D i ve r s i t y i n c l u d e s , b u t i s n ot l i m i te d to, g e n d e r, a g e, et h n i c i t y a n d c u l t u r a l b a c kg r o u n d . T h e C o m p a ny i s c o m m i t te d to d i ve r s i t y a n d r e c o g n i s e s t h e b e n e f i t s a r i s i n g f r o m e m p l oye e a n d B o a r d d i ve r s i t y a n d t h e i m p o r ta n c e o f b e n e f i t i n g f r o m a l l a va i l a b l e ta l e nt. 23 T h e p o l i c y o u t l i n e s r e q u i r e m e nt s fo r t h e B o a r d to d eve l o p m e a s u r a b l e o b j e c t i ve s fo r a c h i ev i n g d i ve r s i t y, a n d a n n u a l l y a s s e s s b ot h o b j e c t i ve s a n d t h e p r o g r e s s i n a c h i ev i n g t h o s e o b j e c t i ve s . A s D i r e c to r a n d s e n i o r e x e c u t i ve p o s i t i o n s b e c o m e va ca nt a n d a p p r o p r i a te l y q u a l i f i e d ca n d i d a te s b e c o m e a va i l a b l e, t h e B o a r d h a s d eve l o p e d t h e fo l l o w i n g o b j e c t i ve s : a c h i eve a d i ve r s e a n d s k i l l e d w o r k fo rc e l e a d i n g to c o nt i n u o u s i m p r ove m e nt ; - t h e d eve l o p m e nt o f c l e a r c r i te r i a fo r b e h a v i o u r a l e x p e c ta t i o n s i n r e l a t i o n to p r o m ot i n g d i ve r s i t y i n t h e w o r k e nv i r o n m e nt ; - e n s u r e t h a t p e r s o n n e l r e s p o n s i b l e fo r r e c r u i t m e nt ta ke d i ve r s i t y i s s u e s i nto a c co u nt w h e n c o n s i d e r i n g va ca n c i e s ; - c r e a te a w o r k e nv i r o n m e nt t h a t va l u e s a n d u t i l i s e s t h e co nt r i b u t i o n s o f e m p l oye e s w i t h d i ve r s e b a c kg r o u n d s , e x p e r i e n c e s a n d p e r s p e c t i ve s ; a n d - c r e a te a w a r e n e s s i n a l l e m p l oye e s o f t h e i r r i g ht s a n d r e s p o n s i b i l i t i e s w i t h r e g a r d s to fa i r n e s s , e q u i t y a n d r e s p e c t fo r a l l a s p e c t s o f d i ve r s i t y. T h e B o a r d b e l i eve s i t h a s i m p l e m e nte d t h e s e o b j e c t i ve s t h r o u g h o u t t h e C o m p a ny’s w o r k fo r c e a n d co nt i n u e s to m o n i to r a n d a s s e s s t h e C o m p a ny’s e f fo r t s i n t h i s r e g a r d . T h e n u m b e r o f w o m e n e m p l oye d by t h e C o m p a ny a n d t h e i r e m p l oy m e nt c l a s s i f i ca t i o n s a r e a s fo l l o w s : 2017 2016 Nu m be r Pe rc en t age Nu m be r Pe rc en t ag e Women on the Board Women in Senior Management Women employees in the Company 1 - 14 20% 0% 35% - - 13 0% 0% 40% 4.1. COMPOSITION OF THE BO AR D T h e r e w e r e f i ve d i r e c to r s o n t h e B o a r d a t a ny o n e t i m e t h r o u g h o u t t h e ye a r. O f t h e s e, fo u r w e r e n o n - e x e c u t i ve d i r e c to r s a n d o n e w a s a n e x e c u t i ve d i r e c to r – t h e l a t te r b e i n g t h e M a n a g i n g D i r e c to r/C h i e f E x e c u t i ve O f f i c e r. E a c h ye a r o n e - t h i r d o f d i r e c to r s a n d a ny d i r e c to r (e x c l u d i n g t h e M a n a g i n g D i r e c to r ) w h o h a s h e l d o f f i c e fo r t h r e e ye a r s o r t h r e e a n n u a l g e n e r a l m e et i n g s ( w h i c h eve r i s l o n g e r ) m u s t r et i r e f r o m o f f i c e. A r et i r i n g d i r e c to r i s e l i g i b l e to s e e k r e - e l e c t i o n i f s o m i n d e d . T h e s k i l l s , e x p e r i e n c e a n d e x p e r t i s e r e l eva nt to t h e p o s i t i o n o f e a c h d i r e c to r w h o i s i n o f f i c e a t t h e d a te o f t h e A n n u a l Re p o r t a n d t h e i r te r m o f o f f i c e a r e d eta i l e d i n t h e D i r e c to r s’ Re p o r t. T h e B o a r d s t r i ve s to a c h i eve a m i x o f c o m m e rc i a l , f i n a n c i a l , l e g a l , m a n a g e m e nt, h e a l t h i n d u s t r y a n d I T s k i l l s a n d e x p e r i e n c e a m o n g i t s m e m b e r s . T h e co m p o s i t i o n o f t h e B o a r d i s d ete r m i n e d i n a cc o r d a n ce w i t h t h e fo l l o w i n g p r i n c i p l e s a n d g u i d e l i n e s : • t h e B o a r d s h o u l d c o m p r i s e a t l e a s t t h r e e D i r e c to r s a n d s h o u l d m a i nta i n a m a j o r i t y o f • • • • i n d e p e n d e n t a n d N o n - E x e c u t i ve D i r e c to r s ; t h e C h a i r m a n m u s t b e a n i n d e p e n d e nt a n d N o n - E x e c u t i ve D i r e c to r ; t h e r o l e s o f C h i e f E x e c u t i ve O f f i c e r a n d C h a i r m a n m u s t n ot b e p e r fo r m e d by t h e s a m e i n d i v i d u a l; t h e B o a r d s h o u l d c o m p r i s e D i r e c to r s w i t h a n a p p r o p r i a te r a n g e o f q u a l i f i ca t i o n s a n d e x p e r t i s e; a n d t h e B o a r d s h a l l m e et r e g u l a r l y a n d h a ve a va i l a b l e a l l n e c e s s a r y i n fo r m a t i o n to p a r t i c i p a te i n a n i n fo r m e d d i s c u s s i o n o f a l l a g e n d a i te m s . 24 W h e n c o n s i d e r i n g p ote nt i a l ca n d i d a te s fo r d i r e c to r s h i p, t h e B o a r d a s s e s s e s q u a l i f i e d p r o fe s s i o n a l s a n d e x p e r i e n ce d b u s i n e s s p e o p l e i n i n d u s t r y. T h e C o m p a ny d o e s n ot e n g a g e a ny c o n s u l ta nt s to s o u rc e p ote nt i a l B o a r d m e m b e r s , b u t r e l i e s o n t h e D i r e c to r s’ i n d u s t r y c o nta c t s to i d e nt i f y p ote nt i a l ca n d i d a te s b a s e d o n a n i n d i v i d u a l’s p r o fe s s i o n a l a n d b u s i n e s s r e p u ta t i o n , h e a l t h c a r e s e r v i c e s i n d u s t r y e x p e r i e n c e a n d ot h e r a r e a s o f e x p e r t i s e. T h e C o m p a ny s e e k s to m a i nta i n a d i ve r s e r a n g e o f m e m b e r s o f t h e B o a r d by h a v i n g o n l y o n e d i r e c to r d r a w n f r o m a ny o n e p r o fe s s i o n a l b a c kg r o u n d a t a ny o n e t i m e. 4.2. BOA RD M EMBERS T h e D i r e c to r s i n o f f i c e a t t h e d a te o f t h i s s ta te m e nt a r e: 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 Ms P Beerens Non-Executive Director T h e r e a r e fo u r N o n - E x e c u t i ve D i r e c to r s w h o a r e d e e m e d i n d e p e n d e nt u n d e r t h e p r i n c i p l e s s et o u t b e l o w, a n d o n e E x e c u t i ve D i r e c to r, a t t h e d a te o f s i g n i n g t h e D i r e c to r s’ Re p o r t. T h e B o a r d s e e k s to e n s u r e t h a t : a t a ny p o i nt i n t i m e, i t s m e m b e r s h i p r e p r e s e nt s a n a p p r o p r i a te b a l a n c e b et w e e n D i r e c to r s w i t h e x p e r i e n c e a n d k n o w l e d g e o f t h e G r o u p a n d D i r e c to r s w i t h a n e x te r n a l o r f r e s h p e r s p e c t i ve; a n d t h e s i z e o f t h e B o a r d i s c o n d u c i ve to e f fe c t i ve d i s c u s s i o n a n d e f f i c i e nt d e c i s i o n - m a k i n g . A s a B o a r d , t h e D i r e c to r s n e e d to p r ov i d e t h e fo l l o w i n g s k i l l s a n d k n o w l e d g e: • a b a l a n c e o f p r ove n e x p e r t i s e, d i ve r s e s k i l l s a n d e x p e r i e n c e i n c o m m e r ce, f i n a n ce, h e a l t h ca r e i n n ova t i o n a n d ot h e r a r e a s w h e r e s o f t w a r e te c h n o l o g y ca n i m p r ove t h e e x p e r i e n ce o f c o n s u m e r s a n d p r ov i d e r s o f h e a l t h ca r e s e r v i ce s ; • u n d e r s ta n d i n g o f t h e r o l e s , d u t i e s a n d r e s p o n s i b i l i t i e s o f d i r e c to r s u n d e r t h e C o r p o r a t i o n s Ac t ; • l e a d e r s h i p s k i l l s , e x p e r i e n c e m a k i n g d e c i s i o n s a t t h e h i g h e s t l eve l s , s t r a te g i c t h i n k i n g a n d l o n g - te r m p l a n n i n g a b i l i t i e s ; • a n u n d e r s ta n d i n g o f c u r r e nt i s s u e s a f fe c t i n g t h e A u s t r a l i a n h e a l t h ca r e i n d u s t r y i n p a r t i c u l a r, a n d i n g e n e r a l a w i d e r u n d e r s ta n d i n g o f i nte r n a t i o n a l m e d i ca l a n d te c h n o l o g i ca l t r e n d s i n h e a l t h ca r e p r ov i s i o n a n d c o n s u m pt i o n; • f l e x i b l e, c o n s u l ta t i ve a n d i n n ova t i ve a p p r o a c h e s to c o m m u n i ca t i n g a n d a c h i ev i n g c o r p o r a te g o a l s ; a n d • a p a s s i o n fo r a n d s t r o n g c o m m i t m e nt to t h e s u cc e s s o f t h e a c t i v i t i e s o f G l o b a l H e a l t h L i m i te d . A s G l o b a l H e a l t h L i m i te d h a s a r e l a t i ve l y s m a l l B o a r d , t h e f u l l B o a r d a c t s a s a n o m i n a t i o n c o m m i t te e a n d r ev i e w s B o a r d m e m b e r s h i p s i n c l u d i n g a n a s s e s s m e nt o f n e ce s s a r y a n d d e s i r a b l e c o m p ete n c i e s , p a r t i c u l a r l y i n c o n s i d e r a t i o n o f a p p o i nt m e nt s a n d r e m ova l s . 25 4.3. BOARD RESPONSIBIL IT IES T h e r e s p o n s i b i l i t i e s o f t h e B o a r d i n c l u d e: 1. p r ov i d i n g s t r a te g i c g u i d a n c e to t h e C o m p a ny i n c l u d i n g c o nt r i b u t i n g to t h e d eve l o p m e n t o f a n d a p p r ov i n g t h e c o r p o r a te s t r a te g y ; 2 . r ev i e w i n g a n d a p p r ov i n g b u s i n e s s p l a n s , t h e a n n u a l b u d g et a n d f i n a n c i a l p l a n s i n c l u d i n g a va i l a b l e r e s o u rc e s a n d m a j o r ca p i ta l e x p e n d i t u r e i n i t i a t i ve s ; 3 . ove r s e e i n g a n d m o n i to r i n g: a . o r g a n i s a t i o n a l p e r fo r m a n ce a n d t h e a c h i eve m e nt o f t h e G r o u p’s s t r a te g i c g o a l s a n d o b j e c t i ve s ; a n d b. p r o g r e s s o f m a j o r ca p i ta l e x p e n d i t u r e s a n d ot h e r s i g n i f i ca nt c o r p o r a te p r o j e c t s i n c l u d i n g a ny a cq u i s i t i o n s o r d i ve s t m e nt s ; 4 . m o n i to r i n g f i n a n c i a l p e r fo r m a n c e i n c l u d i n g a p p r ova l o f t h e a n n u a l a n d h a l f - ye a r f i n a n c i a l r e p o r t s a n d l i a i s o n w i t h t h e C o m p a ny’s a u d i to r s ; 5 . a p p o i nt m e nt, p e r fo r m a n c e a s s e s s m e nt a n d , i f n e c e s s a r y, r e m ova l o f t h e M a n a g i n g D i r e c to r ; 6 . r a t i f y i n g t h e a p p o i nt m e nt a n d r e m ova l o f a n d c o nt r i b u t i n g to t h e p e r fo r m a n c e a s s e s s m e nt o f m e m b e r s o f t h e s e n i o r m a n a g e m e nt te a m; 7. e n s u r i n g t h e r e a r e e f fe c t i ve m a n a g e m e nt p r o c e s s e s i n p l a c e a n d a p p r ov i n g m a j o r c o r p o r a te i n i t i a t i ve s ; 8 . e n h a n c i n g a n d p r ote c t i n g t h e r e p u ta t i o n o f t h e o r g a n i s a t i o n; a n d 9. ove r s e e i n g t h e o p e r a t i o n o f t h e G r o u p’s s y s te m fo r co m p l i a n c e a n d r i s k m a n a g e m e nt r e p o r t i n g to s h a r e h o l d e r s . 4.4. NON -EXECUTIVE DI REC T OR S’ IN DE P END E NCE T h e B o a r d h a s a d o pte d s p e c i f i c p r i n c i p l e s i n r e l a t i o n to N o n - E x e c u t i ve D i r e c to r s’ i n d e p e n d e n ce. T h e s e s ta te t h a t to b e d e e m e d i n d e p e n d e nt, a D i r e c to r m u s t b e a N o n - E x e c u t i ve a n d: • n ot b e a s u b s ta nt i a l s h a r e h o l d e r o f t h e C o m p a ny o r a n o f f i c e r o f, o r ot h e r w i s e a s s o c i a te d d i r e c t l y w i t h , a s u b s ta nt i a l s h a r e h o l d e r o f t h e C o m p a ny ; • w i t h i n t h e l a s t t h r e e ye a r s , n ot h a ve b e e n e m p l oye d i n a n e x e c u t i ve ca p a c i t y by t h e C o m p a ny o r a ny ot h e r G r o u p m e m b e r o r b e e n a D i r e c to r a f te r c e a s i n g to h o l d a ny s u c h e m p l oy m e n t ; • w i t h i n t h e l a s t t h r e e ye a r s n ot h a ve b e e n a p r i n c i p a l o f a m a te r i a l p r o fe s s i o n a l a d v i s o r o r a m a te r i a l co n s u l ta nt to t h e C o m p a ny o r a ny ot h e r G r o u p m e m b e r, o r a n e m p l oye e m a te r i a l l y a s s o c i a te d w i t h t h e s e r v i c e p r ov i d e d; • n ot b e a m a te r i a l s u p p l i e r o r c u s to m e r o f t h e C o m p a ny o r a ny ot h e r G r o u p m e m b e r, o r a n o f f i ce r o f o r ot h e r w i s e a s s o c i a te d d i r e c t l y o r i n d i r e c t l y w i t h a m a te r i a l s u p p l i e r o r c u s to m e r ; • m u s t h a ve n o m a te r i a l co nt r a c t u a l r e l a t i o n s h i p w i t h t h e C o m p a ny o r a co nt r o l l e d e n t i t y ot h e r t h a n a s a D i r e c to r o f t h e G r o u p; • n ot h a ve b e e n o n t h e B o a r d fo r a ny p e r i o d w h i c h co u l d , o r c o u l d r e a s o n a b l y b e p e rc e i ve d to, m a te r i a l l y i nte r fe r e w i t h t h e D i r e c to r ’s a b i l i t y to a c t i n t h e b e s t i nte r e s t s o f t h e C o m p a ny ; a n d • b e f r e e f r o m a ny i nte r e s t a n d a ny b u s i n e s s o r ot h e r r e l a t i o n s h i p w h i c h c o u l d , o r c o u l d r e a s o n a b l y b e p e rc e i ve d to, m a te r i a l l y i nte r fe r e w i t h t h e D i r e c to r ’s a b i l i t y to a c t i n t h e b e s t i nte r e s t s o f t h e C o m p a ny. 26 4.5. TRADING POLICY D i r e c to r s a r e s u b j e c t to t h e C o r p o r a t i o n s Ac t 2 0 01 r e l a t i ve to r e s t r i c t i o n s a p p l y i n g to a cq u i r i n g a n d d i s p o s i n g o f s e c u r i t i e s o f t h e C o m p a ny, i f t h ey a r e i n p o s s e s s i o n o f i n fo r m a t i o n w h i c h i s n ot g e n e r a l l y a va i l a b l e, a n d w h i c h , i f g e n e r a l l y a va i l a b l e, a r e a s o n a b l e p e r s o n w o u l d e x p e c t to h a ve a m a te r i a l e f fe c t o n t h e p r i c e o f t h e s e c u r i t i e s o f t h e C o m p a ny. T h e C o m p a ny’s p o l i c y r e s t r i c t s D i r e c to r s a n d e m p l oye e s f r o m a c t i n g o n m a te r i a l i n fo r m a t i o n u nt i l i t h a s b e e n r e l e a s e d to t h e m a r ket a n d a d e q u a te t i m e h a s b e e n g i ve n fo r t h i s to b e r e f l e c te d i n t h e s e c u r i t y’s p r i c e s . 4.6. CHAIR MAN AND CH IEF EXEC U TI V E OF FI CE R ( CE O ) T h e C h a i r m a n i s r e s p o n s i b l e fo r l e a d i n g t h e B o a r d , e n s u r i n g D i r e c to r s a r e p r o p e r l y b r i e fe d i n a l l m a t te r s r e l eva nt to t h e i r r o l e a n d r e s p o n s i b i l i t i e s , fa c i l i ta t i n g B o a r d d i s c u s s i o n s a n d m a n a g i n g t h e B o a r d’s r e l a t i o n s h i p w i t h t h e C o m p a ny’s s e n i o r e x e c u t i ve s . T h e C E O i s r e s p o n s i b l e fo r i m p l e m e nt i n g G r o u p s t r a te g i e s a n d p o l i c i e s . T h e B o a r d c h a r te r s p e c i f i e s t h a t t h e s e a r e s e p a r a te r o l e s to b e u n d e r ta ke n by s e p a r a te p e o p l e. 4.7. COMM ITM EN T T h e B o a r d h e l d s i x B o a r d m e et i n g s d u r i n g t h e ye a r. T h e n u m b e r o f m e et i n g s o f t h e C o m p a ny’s B o a r d o f D i r e c to r s a n d o f e a c h B o a r d c o m m i t te e h e l d d u r i n g t h e ye a r e n d e d 3 0 J u n e 2 017, a n d t h e n u m b e r o f m e et i n g s a t te n d e d by e a c h D i r e c to r i s d i s c l o s e d i n t h e D i r e c to r s’ Re p o r t. T h e t h r e e N o n - E x e c u t i ve D i r e c to r s m e et d u r i n g t h e ye a r, i n s c h e d u l e d s e s s i o n s w i t h o u t t h e p r e s e n c e o f m a n a g e m e nt, to d i s c u s s t h e o p e r a t i o n o f t h e B o a r d a n d a r a n g e o f ot h e r m a t te r s . Re l eva nt m a t te r s a r i s i n g f r o m t h i s m e et i n g w a s s h a r e d w i t h t h e f u l l B o a r d . I t i s t h e C o m p a ny’s p r a c t i c e to a l l o w i t s E x e c u t i ve D i r e c to r s to a cce pt a p p o i nt m e nt s o u t s i d e t h e C o m p a ny w i t h p r i o r w r i t te n a p p r ova l o f t h e B o a r d . P r i o r to a p p o i nt m e nt o r b e i n g s u b m i t te d to fo r r e - e l e c t i o n , e a c h N o n - E x e c u t i ve D i r e c to r i s r e q u i r e d to s p e c i f i ca l l y a c k n o w l e d g e t h a t t h ey h a ve a n d w i l l co nt i n u e to h a ve t h e t i m e a va i l a b l e to d i s c h a r g e t h e i r r e s p o n s i b i l i t i e s to t h e C o m p a ny. 4.8. CORPORATE REPOR TI NG T h e M a n a g i n g D i r e c to r a n d C h a i r o f t h e A u d i t C o m m i t te e h a ve m a d e t h e fo l l o w i n g c e r t i f i ca t i o n s to t h e B o a r d: • • t h a t t h e G r o u p’s f i n a n c i a l r e p o r t s a r e c o m p l ete a n d p r e s e nt a t r u e a n d fa i r v i e w, i n a l l m a te r i a l r e s p e c t s , o f t h e f i n a n c i a l c o n d i t i o n a n d o p e r a t i o n a l r e s u l t s o f t h e G r o u p a n d a r e i n a c co r d a n ce w i t h r e l eva nt a cc o u nt i n g s ta n d a r d s ; a n d t h a t t h e a b ove s ta te m e nt i s fo u n d e d o n a s o u n d s y s te m o f r i s k m a n a g e m e nt a n d i n te r n a l c o m p l i a n ce a n d c o nt r o l w h i c h i m p l e m e nt s t h e p o l i c i e s a d o pte d by t h e B o a r d a n d t h a t t h e G r o u p’s r i s k m a n a g e m e nt a n d i nte r n a l c o m p l i a n c e a n d co nt r o l i s o p e r a t i n g e f f i c i e nt l y a n d e f fe c t i ve l y i n a l l m a te r i a l r e s p e c t s . 27 4.9. AUDIT COMMI TTEE T h e B o a r d h a s e s ta b l i s h e d a n A u d i t C o m m i t te e w h i c h a c t s i n a cc o r d a n c e w i t h i t s c h a r te r. T h e A u d i t C o m m i t te e co n s i s t s o f t h e fo l l o w i n g N o n - E x e c u t i ve D i r e c to r s : M r S L P y nt M r G S m i t h D u e to t h e s m a l l n u m b e r o f B o a r d m e m b e r s , t h e B o a r d h a s a g r e e d to a l l o w t h e A u d i t C o m m i t te e to b e m a d e u p o f t w o i n d e p e n d e nt N o n - E x e c u t i ve D i r e c to r s . D eta i l s o f t h e s e D i r e c to r s’ q u a l i f i ca t i o n s a n d a t te n d a n c e a t A u d i t C o m m i t te e m e et i n g s a r e s et o u t i n t h e D i r e c to r s’ Re p o r t. T h e A u d i t C o m m i t te e h a s a p p r o p r i a te f i n a n c i a l e x p e r t i s e a n d a l l m e m b e r s a r e f i n a n c i a l l y l i te r a te a n d h a ve a n a p p r o p r i a te u n d e r s ta n d i n g o f t h e i n d u s t r i e s i n w h i c h t h e G r o u p o p e r a te s . T h e A u d i t C o m m i t te e h a s a u t h o r i t y, w i t h i n t h e s c o p e o f i t s r e s p o n s i b i l i t i e s , to s e e k a ny i n fo r m a t i o n i t r e q u i r e s f r o m a ny e m p l oye e o r e x te r n a l p a r t y. I t i s t h e co m m i t te e’s r e s p o n s i b i l i t y to e n s u r e t h a t a n e f fe c t i ve i nte r n a l c o nt r o l f r a m e w o r k e x i s t s w i t h i n t h e G r o u p i n c l u d i n g l i a i s o n w i t h e x te r n a l a u d i to r s . T h i s i n c l u d e s i nte r n a l co nt r o l s to d e a l w i t h b ot h t h e e f fe c t i ve n e s s a n d e f f i c i e n c y o f s i g n i f i c a nt b u s i n e s s p r o c e s s e s . T h i s i n c l u d e s t h e s a fe g u a r d i n g o f a s s et s , t h e m a i nte n a n c e o f p r o p e r a cco u nt i n g r e c o r d s a n d t h e r e l i a b i l i t y o f f i n a n c i a l i n fo r m a t i o n . 4.10. REMU NERAT ION T h e B o a r d d o e s n ot h a ve a s e p a r a te r e m u n e r a t i o n c o m m i t te e d u e to t h e s m a l l n u m b e r o f B o a r d m e m b e r s . C o n s e q u e nt l y, t h e i s s u e o f r e m u n e r a t i o n i s u n d e r t h e c o nt r o l o f t h e B o a r d w h i c h h a s t h e r e s p o n s i b i l i t y o f r ev i e w i n g a n d a p p r ov i n g r e m u n e r a t i o n o f t h e N o n - E x e c u t i ve C h a i r m a n a n d ot h e r e x e c u t i ve s o f t h e G r o u p. Re m u n e r a t i o n l eve l s w i l l b e co m p et i t i ve l y s et to a t t r a c t t h e m o s t q u a l i f i e d a n d e x p e r i e n c e d D i r e c to r s a n d s e n i o r e x e c u t i ve s . W h e r e n e c e s s a r y t h e B o a r d m a y o bta i n i n d e p e n d e nt a d v i c e o n t h e a p p r o p r i a te n e s s o f r e m u n e r a t i o n p a c ka g e s a n d o bta i n a ny n e ce s s a r y s h a r e h o l d e r a p p r ova l s . T h e a m o u nt o f r e m u n e r a t i o n fo r a l l D i r e c to r s i s d eta i l e d i n t h e D i r e c to r s’ Re p o r t s e c t i o n . Pa y m e nt o f e q u i t y - b a s e d e x e c u t i ve r e m u n e r a t i o n i s m a d e i n a cc o r d a n c e w i t h t h r e s h o l d s s et i n p l a n s a p p r ove d by s h a r e h o l d e r s . T h e B o a r d e x p e c t s t h a t t h e r e m u n e r a t i o n s t r u c t u r e i m p l e m e nte d w i l l r e s u l t i n t h e C o m p a ny b e i n g a b l e to a t t r a c t a n d r eta i n t h e b e s t e x e c u t i ve s to r u n t h e G r o u p. I t w i l l a l s o p r ov i d e e x e c u t i ve s w i t h t h e n e c e s s a r y i n c e nt i ve s to w o r k to g r o w l o n g - te r m s h a r e h o l d e r va l u e. 4.11. MONITORI NG OF THE BOAR D ’S PE R FO R M ANCE T h e B o a r d h a s a d o pte d a co d e o f co n d u c t fo r D i r e c to r s i n ke e p i n g w i t h t h e C o m p a ny’s d e s i r e to r e m a i n a g o o d co r p o r a te c i t i z e n a n d a p p r o p r i a te l y b a l a n ce, p r ote c t a n d p r e s e r ve a l l s ta ke h o l d e r s’ i nte r e s t s . I n o r d e r to e n s u r e t h a t t h e B o a r d co nt i n u e s to d i s c h a r g e i t s r e s p o n s i b i l i t i e s i n a n a p p r o p r i a te m a n n e r, t h e C h a i r m a n r ev i e w s t h e p e r fo r m a n c e o f a l l D i r e c to r s a n n u a l l y. 28 4.12. COMMU NICATION TO SHAR EHO LD E R S T h e B o a r d a i m s to e n s u r e t h a t t h e s h a r e h o l d e r s , o n b e h a l f o f w h o m t h ey a c t, a r e i n fo r m e d o f a l l i n fo r m a t i o n n e c e s s a r y to a s s e s s t h e p e r fo r m a n c e o f t h e e c o n o m i c e nt i t y. I n fo r m a t i o n i s c o m m u n i ca te d to t h e s h a r e h o l d e r s t h r o u g h: • • • • t h e A n n u a l Re p o r t w h i c h i s d i s t r i b u te d to a l l s h a r e h o l d e r s ; t h e A n n u a l G e n e r a l M e et i n g a n d ot h e r m e et i n g s ca l l e d to o bta i n a p p r ova l fo r B o a r d a c t i o n a s a p p r o p r i a te; r e g u l a r r e l e a s e o f m e d i a a n d m a r ket u p d a te s to t h e A SX ; a n d t h e C o m p a ny’s w e b s i te: w w w. g l o b a l - h e a l t h . c o m . T h e C o m p a ny S e c r eta r y i s t h e p e r s o n r e s p o n s i b l e fo r c o m m u n i ca t i o n s w i t h t h e A u s t r a l i a n Sto c k E x c h a n g e (A SX ). T h i s r o l e i n c l u d e s r e s p o n s i b i l i t y fo r e n s u r i n g c o m p l i a n c e w i t h t h e c o nt i n u o u s d i s c l o s u r e r e q u i r e m e nt s i n t h e A SX L i s t i n g R u l e s a n d ove r s e e i n g a n d c o o r d i n a t i n g i n fo r m a t i o n d i s c l o s u r e to t h e A SX , a n a l y s t s , b r o ke r s , s h a r e h o l d e r s , t h e m e d i a a n d t h e p u b l i c . A l l i n fo r m a t i o n d i s c l o s e d to t h e A SX i s p o s te d o n t h e C o m p a ny’s w e b s i te a s s o o n a s i t i s d i s c l o s e d to t h e A SX . W h e n a n a l y s t s a r e b r i e fe d o n a s p e c t s o f t h e G r o u p’s o p e r a t i o n s , t h e m a te r i a l s u s e d i n t h e p r e s e n ta t i o n a r e r e l e a s e d to t h e A SX a n d p o s te d o n t h e C o m p a ny’s w e b s i te. A l l s h a r e h o l d e r s a r e e nt i t l e d to r e c e i ve a co py o f t h e C o m p a ny’s a n n u a l a n d h a l f ye a r l y r e p o r t s . I n a d d i t i o n , t h e C o m p a ny s e e k s to p r ov i d e o p p o r t u n i t i e s fo r s h a r e h o l d e r s to p a r t i c i p a te t h r o u g h e l e c t r o n i c m e a n s . I n i t i a t i ve s to fa c i l i ta te t h i s i n c l u d e m a k i n g a l l C o m p a ny a n n o u n c e m e nt s , m e d i a b r i e f i n g s , d eta i l s o f C o m p a ny m e et i n g s , p r e s s r e l e a s e s fo r t h e l a s t t h r e e ye a r s a n d f i n a n c i a l r e p o r t s fo r t h e l a s t t h r e e ye a r s a va i l a b l e o n t h e C o m p a ny’s w e b s i te. T h e w e b s i te a l s o i n c l u d e s a n o pt i o n fo r s h a r e h o l d e r s to r e g i s te r t h e i r e m a i l a d d r e s s fo r d i r e c t e m a i l u p d a te s o n C o m p a ny m a t te r s . 4.13. INDEPENDEN T PROFES SI ONAL AD V IC E E a c h D i r e c to r i s e nt i t l e d to s e e k i n d e p e n d e nt p r o fe s s i o n a l a d v i c e a t t h e e x p e n s e o f t h e C o m p a ny i n ca r r y i n g o u t h i s d u t i e s a s a D i r e c to r. P r i o r to o bta i n i n g s u c h a d v i ce, i f a t t h e e x p e n s e o f t h e e c o n o m i c e nt i t y, t h e C h a i r m a n w i l l b e a d v i s e d o f t h e m a t te r a n d a n e s t i m a te o f t h e c o s t. 29 4.14. ASX RECOMMENDA TI ONS 1.1 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 1.2 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. 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. 1.4 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. 1.5 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. 1.6 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. 1.7 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. 2.1 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 2.2 diversity that the board currently has or is looking to achieve in its membership. 2.3 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. 2.4 A majority of the Board of a listed entity should be independent Directors C om p lie d No te        --    1 30 2.5 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. 2.6 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. 3.1 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. 4.1 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. 4.2 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. 4.3 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. 5.1 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. 6.1 A listed entity should provide information about itself and its governance to investors via its website. 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors. 6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders. 6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. 7.1 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. 7.2 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. C om p lie d No te   2            31 7.3 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. 7.4 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. 8.1 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. 8.2 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. 8.3 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. C om p lie d No te -- 3 4  --   NOTES: N ote 1: T h e B o a r d o f D i r e c to r s o f t h e C o m p a ny d o e s n ot h a ve a N o m i n a t i o n C o m m i t te e. T h e B o a r d i s o f t h e o p i n i o n t h a t d u e to t h e n a t u r e a n d s i z e o f t h e C o m p a ny, t h e f u n c t i o n s p e r fo r m e d by a N o m i n a t i o n C o m m i t te e ca n b e a d e q u a te l y h a n d l e d by t h e f u l l B o a r d . N ote 2 : T h e C o m p a ny h a s t h r e e N o n - E x e c u t i ve D i r e c to r s , o f w h o m t w o co m p r i s e t h e A u d i t C o m m i t te e. T h e B o a r d i s o f t h e o p i n i o n t h a t d u e to t h e n a t u r e a n d s i z e o f t h e C o m p a ny, t h i s f u n c t i o n ca n b e a d e q u a te l y h a n d l e d w i t h l e s s t h a n t h e t h r e e m e m b e r s r e c o m m e n d e d u n d e r A SX g u i d e l i n e s . N ote 3 : T h e C o m p a ny d o e s n ot h a ve a n I nte r n a l A u d i t F u n c t i o n . T h e B o a r d i s o f t h e o p i n i o n t h a t d u e to t h e n a t u r e a n d s i z e o f t h e C o m p a ny, t h e f u n c t i o n s p e r fo r m e d by a n i n te r n a l a u d i to r a r e b e i n g a d e q u a te l y s e r ve d by t h e C o m p a ny’s i n d e p e n d e nt e x te r n a l a u d i to r s . N ote 4: T h e C o m p a ny d o e s n ot h a ve a Re m u n e r a t i o n C o m m i t te e. T h e B o a r d i s o f t h e o p i n i o n t h a t d u e to t h e n a t u r e a n d s i z e o f t h e C o m p a ny, t h e f u n c t i o n s p e r fo r m e d by a Re m u n e r a t i o n C o m m i t te e ca n b e a d e q u a te l y h a n d l e d by t h e f u l l B o a r d . 32 5. ANNUAL FINANCIAL REP ORT T h i s G l o b a l H e a l t h L i m i te d c o n s o l i d a te d e nt i t y (‘G r o u p’) f i n a n c i a l r e p o r t i s p r e s e nte d i n t h e A u s t r a l i a n c u r r e n c y. G l o b a l H e a l t h L i m i te d i s a c o m p a ny l i m i te d by s h a r e s , i n co r p o r a te d a n d d o m i c i l e d i n A u s t r a l i a . T h e C o m p a ny’s r e g i s te r e d o f f i c e a n d p r i n c i p a l p l a c e o f b u s i n e s s i s : G l o b a l H e a l t h L i m i te d L eve l 2 , 6 07 B o u r ke St r e et M e l b o u r n e, V i c to r i a 3 0 0 0 A u s t r a l i a . A d e s c r i pt i o n o f t h e n a t u r e o f t h e G r o u p’s o p e r a t i o n s a n d i t s p r i n c i p a l a c t i v i t i e s i s i n c l u d e d i n t h e r ev i e w o f o p e r a t i o n s a n d a c t i v i t i e s i n t h e D i r e c to r s’ Re p o r t w h i c h a r e p a r t o f t h i s f i n a n c i a l r e p o r t. T h e f i n a n c i a l r e p o r t w a s a u t h o r i s e d fo r i s s u e by t h e D i r e c to r s o n 2 7 S e pte m b e r 2 017. 33 CONSOLIDATED STATEME NT OF P RO F IT OR L OS S AND OTHE R COMPREHENSIVE INCOME FOR THE Y EAR E NDE D 30 JU NE 20 1 7 C on s o lid at ed G rou p Revenue from the sale of licenses and maintenance contracts Revenue from professional services Other income Chiron Software Settlement 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 Impairment 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 Earnings per share – after tax Basic earnings after tax per share (cents per share) Diluted earnings per share after tax (cents per share) Earnings per share – before tax Basic earnings per share (cents per share) Diluted earnings per share (cents per share) No te 2 2 2 2 3 3 3 3 3 3, 9 3,9 4 17 18 25 25 24 24 2017 $ 3,415,775 1,191,795 692,611 5,000,000 10,300,181 (4,954,609) (263,754) (1,731,893) 3,349,925 (146,500) (87,931) (266,021) (917,381) (73) 1,932,019 (203,974) 1,728,045 (6,259) 1,721,786 1,728,369 (324) 1,728,045 1,722,118 (332) 1,721,786 5.212 4.896 5.827 5.474 2016 Restated* $ 3,587,110 906,187 706,153 - 5,199,450 (3,496,079) (170,475) (957,523) 575,373 (97,568) (122,048) (262,043) - 14,231 107,945 - 107,945 (18,757) 89,188 106,061 1,884 107,945 87,268 1,920 89,188 (0.329) (0.327) (0.329) (0.327) T h e a b ove s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r co m p r e h e n s i ve i n c o m e s h o u l d b e r e a d i n c o n j u n c t i o n w i t h t h e a c c o m p a ny i n g n ote s . * A m o u n t s s h o w n i n t h e 2 016 c o m p a r a t i v e c o l u m n h e r e d o n o t c o r r e s p o n d t o t h e 2 016 f i n a n c i a l s t a t e m e n t s a n d r e f l e c t r e s t a t e m e n t s m a d e , r e f e r t o N o t e 1( v) 34 C O NSOLIDATED STATEMENT OF F INANC IAL P OSITION AS AT 3 0 JU N E 2 01 7 C on s o lid at ed G rou p Note 2017 $ 2016 Res tated* $ Current Assets Cash and cash equivalents Trade and Other Receivables Other Assets Current tax asset Total Current Assets Non-Current Assets Trade and other receivables Property, plant and equipment Intangibles Deferred tax asset Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Interest bearing liabilities Provisions – Employee Benefits Unearned income Total Current Liabilities Non-Current Liabilities Interest bearing liabilities Provisions – Employee Benefits Unearned income Deferred tax liability Total Non-Current Liabilities Total Liabilities 5 6 7 10 6 8 9 10 11 12 13 14 12 13 14 10 2,543,412 1,821,098 185,969 481,842 1,149,028 1,536,734 841,718 - 5,032,321 3,527,480 140,911 150,738 4,817,920 596,599 5,706,168 10,738,489 276,645 172,613 4,847,152 5,296,410 8,823,890 1,079,282 1,395,768 389,880 506,469 1,462,960 3,438,591 1,078,880 30,764 46,128 1,282,415 2,438,187 5,876,778 355,351 423,370 1,471,764 3,646,253 1,386,378 146,001 - - 1,532,379 5,178,632 As a t 1 Ju ly 2015 Restat ed* $ 548,404 931,730 235,989 - 1,716,123 135,047 146,971 3,880,762 - 4,162,780 5,878,903 718,130 28,508 452,510 1,029,282 2,228,430 39,415 127,488 - - 166,903 2,395,333 Net Assets/(Liabilities) 4,861,711 3,645,258 3,483,570 Equity Contributed equity Reserves Accumulated losses Total Parent Entity Interest Non-controlling interest 15 16 17 18 20,836,242 20,728,742 105,079 60,463 (16,079,686) (17,144,355) 4,861,635 3,644,850 76 408 Total Equity 4,861,711 3,645,258 20,656,242 79,256 (17,250,416) 3,485,082 (1,512) 3,483,570 T h e a b ove s ta te m e nt o f f i n a n c i a l p o s i t i o n s h o u l d b e r e a d i n co n j u n c t i o n w i t h t h e a c c o m p a ny i n g n ote s . * A m o u n t s s h o w n i n t h e 2 016 c o m p a r a t i v e c o l u m n h e r e d o n o t c o r r e s p o n d t o t h e 2 016 f i n a n c i a l s t a t e m e n t s a n d r e f l e c t r e s t a t e m e n t s m a d e , r e f e r t o N o t e 1( v) 35 C O NSOLIDATED STATEMENT OF CHA NG ES IN EQU ITY FO R TH E YE A R E N D E D 30 J UNE 2 017 Issu e d c apit al o rdin a ry O pti on re se rv e C urrency trans lation reserve Retain ed earni ngs Total attribu table to owners of the parent Non- C on trolling interes t Total equity 20,656,2 42 29,978 49,278 (17,250,416) 3,485,082 (1,512) 3, 483, 570 72,500 72,500 - - - - - - - - - - - - - 72,500 72,500 - - 72,500 72,500 106,061 106,061 1,884 107,945 (18,793) - (18,793) 36 (18,757) (18,793) 106,061 (106,061) 1,920 89,188 20,728,74 2 29,978 30,485 (17,144,355) 3,644,850 408 3, 645, 258 20,728,7 42 29,978 30,485 (17,144,355) 3,644,850 408 3, 645, 258 Consolidated Gro u p Bala nce 1 July 201 5 Res ta ted* Issue of share capital 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 Bala nce 30 June 2016 Res ta ted* Balan ce 1 July 2016 Res ta ted* Issue of share capital Exercise of options Share based payment 62,500 45,000 - Transactions with owners 107,500 Profit/(loss) for the period Payment of dividends Other comprehensive income: Exchange difference on translation of foreign operations Total comprehensive profit/ (loss) for the period - - - - - - 50,867 50,867 - - - - - - - - - - - - - - 62,500 45,000 50,867 158,367 - - - - 1,728,369 1,932,343 (324) (663,700) (663,700) - 62,500 45,000 50,867 158,367 1,728,045 (663,700) (6,251) - (6,251) (8) (6,259) (6,251) 1,064,669 1,262,392 (332) 1,058,086 Ba lan ce 30 June 2017 20,836,2 42 80,845 24,234 (16,079,686) 5,065,609 76 4, 861, 711 T h e a b ove s ta te m e nt o f c h a n g e s i n e q u i t y s h o u l d b e r e a d i n c o n j u n c t i o n w i t h t h e a c c o m p a ny i n g n ote s . * A m o u n t s s h o w n i n t h e 2 016 c o m p a r a t i v e c o l u m n h e r e d o n o t c o r r e s p o n d t o t h e 2 016 f i n a n c i a l s t a t e m e n t s a n d r e f l e c t r e s t a t e m e n t s m a d e , r e f e r t o N o t e 1( v) 36 STATEMENT OF CASH FLOWS F OR THE YE AR E NDE D 30 JU NE 2 0 1 7 C on s ol id at ed Gr o up No te Cash Flows from Operating Activities Receipts from customers Cash received from the settlement of Chiron Software litigation Receipts from Research and Development Grants Payments to suppliers and employees Interest received Interest and finance costs paid Net cash inflow from operating activities 27 Cash Flows from Investing Activities Proceeds from sale of plant and equipment Purchase of property, plant and equipment Purchase of intangibles Net cash outflow from investing activities Cash Flows from Financing Activities Proceeds from borrowings Repayment of borrowings Payment of dividends Net cash (outflow)/inflow 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 2017 $ 4,722,667 5,000,000 423,002 (6,491,096) 43,206 (146,500) 3,551,279 - (66,056) (1,154,170) (1,220,226) - (272,969) (663,700) (936,669) 1,394,384 1,149,028 2016 $ 4,839,316 - 518,089 (4,743,208) 15,069 (97,568) 531,698 1,850 (149,273) (1,457,457) (1,604,880) 1,915,578 (241,772) - 1,673,806 600,624 548,404 5 2,543,412 1,149,028 T h e a b ove s ta te m e nt o f ca s h f l o w s s h o u l d b e r e a d i n c o n j u n c t i o n w i t h t h e a c co m p a ny i n g n ote s . T h e co n s o l i d a te d f i n a n c i a l s ta te m e nt s a n d n ote s r e p r e s e nt t h o s e o f G l o b a l H e a l t h Ltd a n d C o nt r o l l e d E nt i t i e s (t h e “c o n s o l i d a te d g r o u p” o r “g r o u p”).G l o b a l H e a l t h L i m i te d i s a fo r- p r o f i t l i s te d c o m p a ny l i m i te d by s h a r e s a n d d o m i c i l e d i n A u s t r a l i a . T h e co n s o l i d a te d f i n a n c i a l s ta te m e nt s a r e p r e s e nte d i n A u s t r a l i a n d o l l a r s w h i c h i s t h e p a r e n t e nt i t y’s f u n c t i o n a l a n d p r e s e nta t i o n c u r r e n c y. U n l e s s s ta te d ot h e r w i s e, b a l a n c e s fo r t h e 2 016 a r e r e s ta te d a s p e r N ote 1(v). T h e s e p a r a te f i n a n c i a l s ta te m e n t s a n d n ote s o f t h e p a r e n t e nt i t y, G l o b a l H e a l t h L i m i te d , h a ve n ot b e e n p r e s e nte d w i t h i n t h i s f i n a n c i a l r e p o r t a s p e r m i t te d by a m e n d m e n t s m a d e to t h e C o r p o r a t i o n s Ac t 2 0 01. T h e p a r e nt e nt i t y s u m m a r y i s i n c l u d e d i n N ote 3 0 . T h e f i n a n c i a l s ta te m e nt s w e r e a u t h o r i s e d fo r i s s u e by t h e B o a r d o f D i r e c to r s o n x x S e pte m b e r 2 017. 37 1. S T AT EMENT O F S I GNIFIC ANT ACC OU NTING POL ICIE S a . BASIS OF PREPARATION T h e g e n e r a l p u r p o s e f i n a n c i a l s ta te m e nt s h a ve b e e n p r e p a r e d i n a cc o r d a n ce w i t h t h e C o r p o r a t i o n s Ac t 2 0 01, A u s t r a l i a n Acc o u n t i n g Sta n d a r d s a n d I nte r p r eta t i o n s o f t h e A u s t r a l i a n Acc o u nt i n g Sta n d a r d s B o a r d a n d I nte r n a t i o n a l F i n a n c i a l Re p o r t i n g Sta n d a r d s a s i s s u e d by t h e I nte r n a t i o n a l Ac c o u nt i n g Sta n d a r d s B o a r d . T h e G r o u p i s a fo r- p r o f i t e nt i t y fo r f i n a n c i a l r e p o r t i n g p u r p o s e s u n d e r A u s t r a l i a n Acc o u n t i n g Sta n d a r d s . M a te r i a l a cc o u nt i n g p o l i c i e s a d o pte d i n t h e p r e p a r a t i o n o f t h e s e f i n a n c i a l s ta te m e nt s a r e p r e s e nte d b e l o w a n d h a ve b e e n c o n s i s te nt l y a p p l i e d u n l e s s s ta te d ot h e r w i s e. E x c e pt fo r ca s h f l o w i n fo r m a t i o n , t h e f i n a n c i a l s ta te m e nt s h a ve b e e n p r e p a r e d o n a n a cc r u a l s b a s i s a n d a r e b a s e d o n h i s to r i ca l co s t s , m o d i f i e d , w h e r e a p p l i ca b l e, by t h e m e a s u r e m e nt a t fa i r va l u e o f s e l e c te d n o n - c u r r e nt a s s et s , f i n a n c i a l a s s et s a n d f i n a n c i a l l i a b i l i t i e s . b . PRINCIPLES OF CONSOLIDA TION T h e G r o u p f i n a n c i a l s ta te m e nt s c o n s o l i d a te t h o s e o f t h e Pa r e nt C o m p a ny a n d a l l o f i t s s u b s i d i a r i e s a s o f 3 0 J u n e 2 017. T h e Pa r e nt c o nt r o l s a s u b s i d i a r y i f i t i s e x p o s e d , o r h a s r i g ht s , to va r i a b l e r et u r n s f r o m i t s i nvo l ve m e n t w i t h t h e s u b s i d i a r y a n d h a s t h e a b i l i t y to a f fe c t t h o s e r et u r n s t h r o u g h i t s p o w e r ove r t h e s u b s i d i a r y. A l i s t o f c o nt r o l l e d e nt i t i e s i s c o nta i n e d i n N ote 19 to t h e f i n a n c i a l s ta te m e nt s . A l l c o nt r o l l e d e nt i t i e s h a ve a J u n e f i n a n c i a l ye a r e n d . A s a t r e p o r t i n g d a te, t h e a s s et s a n d l i a b i l i t i e s o f a l l c o n t r o l l e d e nt i t i e s h a ve b e e n i n co r p o r a te d i nto t h e c o n s o l i d a te d f i n a n c i a l s ta te m e n t s a s w e l l a s t h e i r r e s u l t s fo r t h e ye a r t h e n e n d e d . W h e r e c o n t r o l l e d e nt i t i e s h a ve e n te r e d ( l e f t) t h e G r o u p d u r i n g t h e ye a r, t h e i r o p e r a t i n g r e s u l t s h a ve b e e n i n c l u d e d (e x c l u d e d) f r o m t h e d a te c o nt r o l w a s o bta i n e d (c e a s e d). A l l i nte r- c o m p a ny b a l a n c e s a n d t r a n s a c t i o n s b et w e e n e nt i t i e s i n t h e G r o u p, i n c l u d i n g a ny u n r e a l i s e d p r o f i t s o r l o s s e s , h a ve b e e n e l i m i n a te d o n c o n s o l i d a t i o n . Acco u nt i n g p o l i c i e s o f s u b s i d i a r i e s h a ve b e e n c h a n g e d w h e r e n e ce s s a r y to e n s u r e c o n s i s te n c y w i t h t h o s e p o l i c i e s a p p l i e d by t h e p a r e nt e nt i t y. N o n - c o nt r o l l i n g i nte r e s t s , b e i n g t h a t p o r t i o n o f t h e p r o f i t o r l o s s a n d n et a s s et s o f s u b s i d i a r i e s a t t r i b u ta b l e to e q u i t y i nte r e s t s h e l d by p e r s o n s o u t s i d e t h e G r o u p, a r e s h o w n s e p a r a te l y w i t h i n t h e e q u i t y s e c t i o n o f t h e c o n s o l i d a te d s ta te m e nt o f f i n a n c i a l p o s i t i o n a n d i n t h e c o n s o l i d a te d s ta te m e nt o f p r o f i t o r l o s s . B u s i n e s s c o m b i n a t i o n s o c c u r w h e r e a n a cq u i r e r o bta i n s co nt r o l ove r o n e o r m o r e b u s i n e s s e s a n d r e s u l t s i n t h e c o n s o l i d a t i o n o f i t s a s s et s a n d l i a b i l i t i e s . A b u s i n e s s co m b i n a t i o n i s a cco u nte d fo r by a p p l y i n g t h e a cq u i s i t i o n m et h o d , u n l e s s i t i s a c o m b i n a t i o n i nvo l v i n g e nt i t i e s o r b u s i n e s s e s u n d e r c o m m o n c o n t r o l . T h e a cq u i s i t i o n m et h o d r e q u i r e s t h a t fo r e a c h b u s i n e s s c o m b i n a t i o n o n e o f t h e co m b i n i n g e nt i t i e s m u s t b e i d e nt i f i e d a s t h e a cq u i r e r ( i . e. p a r e nt e nt i t y). T h e b u s i n e s s co m b i n a t i o n w i l l b e a cco u nte d fo r a s a t t h e a cq u i s i t i o n d a te, w h i c h i s t h e d a te t h a t c o nt r o l ove r t h e a cq u i r e e i s o bta i n e d by t h e p a r e nt e nt i t y. At t h i s d a te, t h e p a r e nt s h a l l r e c o g n i s e, i n t h e co n s o l i d a te d a cco u nt s , a n d s u b j e c t to c e r ta i n l i m i te d e x ce pt i o n s , t h e fa i r va l u e o f t h e i d e nt i f i a b l e a s s et s a cq u i r e d a n d l i a b i l i t i e s a s s u m e d . I n a d d i t i o n , co nt i n g e nt l i a b i l i t i e s o f t h e a cq u i r e e w i l l b e r e c o g n i s e d w h e r e a p r e s e nt o b l i g a t i o n h a s b e e n i n c u r r e d a n d i t s fa i r va l u e ca n b e r e l i a b l y m e a s u r e d . 38 T h e a cq u i s i t i o n m a y r e s u l t i n t h e r e co g n i t i o n o f g o o d w i l l . T h e m et h o d a d o pte d fo r t h e m e a s u r e m e nt o f g o o d w i l l w i l l i m p a c t o n t h e m e a s u r e m e nt o f a ny n o n - c o nt r o l l i n g i nte r e s t to b e r e c o g n i s e d i n t h e a cq u i r e e w h e r e l e s s t h a n 10 0 % o w n e r s h i p i s h e l d i n t h e a cq u i r e e. T h e a cq u i s i t i o n d a te fa i r va l u e o f t h e c o n s i d e r a t i o n t r a n s fe r r e d fo r a b u s i n e s s c o m b i n a t i o n p l u s t h e a cq u i s i t i o n d a te fa i r va l u e o f a ny p r ev i o u s l y - h e l d e q u i t y i nte r e s t s h a l l fo r m t h e co s t o f t h e i nve s t m e nt. C o n s i d e r a t i o n m a y c o m p r i s e t h e s u m o f t h e a s s et s t r a n s fe r r e d by t h e a cq u i r e r, l i a b i l i t i e s i n c u r r e d by t h e a c q u i r e r to t h e fo r m e r o w n e r s o f t h e a cq u i r e e a n d t h e e q u i t y i nte r e s t s i s s u e d by t h e a cq u i r e r. F a i r va l u e u p l i f t s i n t h e va l u e o f p r e - e x i s t i n g e q u i t y h o l d i n g s a r e ta ke n to t h e s ta te m e nt o f p r o f i t o r l o s s . W h e r e c h a n g e s i n t h e va l u e o f s u c h e q u i t y h o l d i n g s h a d b e e n p r ev i o u s l y r e co g n i s e d i n ot h e r co m p r e h e n s i ve i n c o m e, s u c h a m o u nt s a r e r e c yc l e d to p r o f i t o r l o s s . I n c l u d e d i n t h e m e a s u r e m e nt o f c o n s i d e r a t i o n t r a n s fe r r e d i s a ny a s s et o r l i a b i l i t y r e s u l t i n g f r o m a c o nt i n g e nt c o n s i d e r a t i o n a r r a n g e m e nt. A ny o b l i g a t i o n i n c u r r e d r e l a t i n g to c o nt i n g e nt c o n s i d e r a t i o n i s c l a s s i f i e d a s e i t h e r a f i n a n c i a l l i a b i l i t y o r e q u i t y i n s t r u m e nt, d e p e n d i n g u p o n t h e n a t u r e o f t h e a r r a n g e m e nt. R i g ht s to r e f u n d s o r c o n s i d e r a t i o n p r ev i o u s l y p a i d a r e r e co g n i s e d a s a r e c e i va b l e. S u b s e q u e n t to i n i t i a l r e c o g n i t i o n , c o nt i n g e nt c o n s i d e r a t i o n c l a s s i f i e d a s e q u i t y i s n ot r e - m e a s u r e d a n d i t s s u b s e q u e nt s et t l e m e nt i s a cc o u nte d fo r w i t h i n e q u i t y. C o nt i n g e nt c o n s i d e r a t i o n c l a s s i f i e d a s a n a s s et o r a l i a b i l i t y i s r e - m e a s u r e d e a c h r e p o r t i n g p e r i o d to fa i r va l u e t h r o u g h t h e s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r c o m p r e h e n s i ve i n co m e u n l e s s t h e c h a n g e i n va l u e ca n b e i d e nt i f i e d a s e x i s t i n g a t a cq u i s i t i o n d a te. A l l t r a n s a c t i o n c o s t s i n c u r r e d i n r e l a t i o n to t h e b u s i n e s s c o m b i n a t i o n a r e e x p e n s e d to t h e s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r co m p r e h e n s i ve i n c o m e. c. IMPAI RMENT OF NON-FINA NC IAL AS SETS At e a c h r e p o r t i n g d a te, t h e G r o u p r ev i e w s t h e ca r r y i n g va l u e s o f i t s ta n g i b l e a n d i nta n g i b l e a s s et s to d ete r m i n e w h et h e r t h e r e i s a ny i n d i ca t i o n t h a t t h o s e a s s et s h a ve b e e n i m p a i r e d . I f s u c h a n i n d i c a t i o n e x i s t s , t h e r e c ove r a b l e a m o u nt o f t h e a s s et, b e i n g t h e h i g h e r o f t h e a s s et ’s fa i r va l u e l e s s co s t s to s e l l a n d va l u e i n u s e, i s c o m p a r e d to t h e a s s et ’s ca r r y i n g va l u e. I n a s s e s s i n g va l u e i n u s e, t h e e s t i m a te d f u t u r e ca s h f l o w s a r e d i s c o u nte d to t h e i r p r e s e nt va l u e u s i n g a p r e - ta x d i s co u nt r a te t h a t r e f l e c t s c u r r e nt m a r ket a s s e s s m e nt s o f t h e t i m e va l u e o f m o n ey a n d t h e r i s k s s p e c i f i c to t h e a s s et fo r w h i c h t h e e s t i m a te s o f f u t u r e ca s h f l o w s h a ve n ot b e e n a d j u s te d . A ny e x c e s s o f t h e a s s et ’s ca r r y i n g va l u e ove r i t s r e c ove r a b l e a m o u nt i s e x p e n s e d to t h e s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r co m p r e h e n s i ve i n c o m e. 39 d . REVENUE RECOGNITION Reve n u e i s m e a s u r e d a t t h e fa i r va l u e o f t h e c o n s i d e r a t i o n r e c e i ve d o r r e c e i va b l e. Reve n u e i s r e co g n i s e d fo r t h e m a j o r b u s i n e s s a c t i v i t i e s a s fo l l o w s : SA L E S R E V E N U E S a l e s r eve n u e c o m p r i s e s r eve n u e e a r n e d (n et o f r et u r n s , d i s c o u nt a n d a l l o w a n c e s) f r o m t h e p r ov i s i o n o f p r o d u c t s o r s e r v i c e s to e nt i t i e s o u t s i d e t h e co n s o l i d a te d e nt i t y. S a l e s r eve n u e i s ca te g o r i s e d a n d r e c o g n i s e d a s fo l l o w s : I n i t i a l L i c e n c e F e e s a n d U p g r a d e F e e s I n i t i a l L i c e n c e F e e s a n d U p g r a d e F e e s a r e b r o u g ht to a cc o u nt o n t h e e a r l i e r o f : 1. 2 . t h e d a te o f s i g n i n g t h e co nt r a c t o r a g r e e m e nt o r ; t h e d a te s t i p u l a te d i n t h e e x e c u te d c o nt r a c t o r a g r e e m e nt. T h e e nt i t y i s a b l e to r e c o g n i s e t h e r eve n u e w h e n t h e s i g n i f i ca nt r i s k s o f o w n e r s h i p a r e t r a n s fe r r e d f r o m t h e e nt i t y to t h e b u ye r a n d o n e o f t h e a b ove c o n d i t i o n s i s m et. M a i n t e n a n ce F e e s M a i nte n a n c e fe e s a r e a n o n - r e f u n d a b l e d e fe r r e d r eve n u e s t r e a m . C l i e nt s s u b s c r i b e to t h e i r l i ce n c e s i n a d va n ce – r a n g i n g f r o m m o nt h l y, q u a r te r l y, h a l f - ye a r l y to a n n u a l p a y m e nt s . T h ey a r e p r o p o r t i o n a l l y a c c r u e d i n a r r e a r s , a t t h e e n d o f e a c h m o nt h a n d r e c o g n i s e d a s r eve n u e ove r t h e l i c e n c e p e r i o d . T h e s e e n t i t l e t h e c u s to m e r to a u s a g e l i c e n c e, h e l p d e s k te l e p h o n e s u p p o r t a n d r i g ht s to e x te n d e d w a r r a nt y a n d p r o d u c t e n h a n ce m e nt s . P r o f e s s i o n a l S e r v i ce s P r o fe s s i o n a l s e r v i c e s a r e b r o u g ht to a cco u nt o n t h e i s s u e o f i nvo i ce o n co m p l et i o n o f w o r k t h a t m a y b e p e r fo r m e d o n a t i m e a n d m a te r i a l s o r a p r o j e c t m i l e s to n e b a s i s . T h i s i n c l u d e s w o r k d o n e i n t h e h e a l t h a n d n o n - h e a l t h s e g m e n t s . G R A N T S G r a nt m o n i e s a r e n ot r e c o g n i s e d u nt i l t h e r e i s r e a s o n a b l e a s s u r a n c e t h a t t h e c o n s o l i d a te d e nt i t y w i l l co m p l y w i t h t h e c o n d i t i o n s a t ta c h i n g to i t, a n d t h a t t h e g r a nt w i l l b e r e c e i ve d . Re c e i pt o f a g r a nt d o e s n ot o f i t s e l f p r ov i d e c o n c l u s i ve ev i d e n ce t h a t t h e c o n d i t i o n s a t ta c h i n g to t h e g r a nt h a ve b e e n o r w i l l b e f u l f i l l e d . I N T E R E S T I N CO M E I nte r e s t r eve n u e i s r e co g n i s e d u s i n g t h e e f fe c t i ve i nte r e s t m et h o d . A S S E T SA L E S T h e n et p r o f i t o r l o s s o n s a l e s o f f i x e d a s s et s i n c l u d i n g p l a nt a n d e q u i p m e nt i s i n c l u d e d a s r eve n u e o f t h e c o n s o l i d a te d e nt i t y. T h e p r o f i t o r l o s s o n d i s p o s a l o f a s s et s i s b r o u g ht to a cco u nt a t t h e d a te a n u n c o n d i t i o n a l c o nt r a c t o f s a l e i s s i g n e d . e. GOOD S AND SERVICES TAX Reve n u e s , e x p e n s e s a n d a s s et s a r e r e c o g n i s e d n et o f t h e a m o u nt o f G o o d s a n d S e r v i ce s Ta x (G S T ), e x c e pt w h e r e t h e a m o u nt o f G S T i n c u r r e d i s n ot r e cove r a b l e f r o m t h e A u s t r a l i a n Ta x a t i o n O f f i c e (ATO). I n t h e s e c i r c u m s ta n c e s t h e G S T i s r e c o g n i s e d a s p a r t o f t h e c o s t o f a cq u i s i t i o n o f t h e a s s et o r a s p a r t o f a n i te m o f t h e e x p e n s e. Re c e i va b l e s a n d p a ya b l e s a r e s ta te d w i t h t h e a m o u nt o f G S T i n c l u d e d . T h e n et a m o u nt o f G S T r e c ove r a b l e f r o m , o r p a ya b l e to, t h e ATO i s i n c l u d e d a s a c u r r e nt a s s et o r l i a b i l i t y i n t h e c o n s o l i d a te d s ta te m e n t o f f i n a n c i a l p o s i t i o n . 40 C a s h f l o w s a r e i n c l u d e d i n t h e s ta te m e nt o f ca s h f l o w s o n a g r o s s b a s i s . T h e G S T co m p o n e nt s o f ca s h f l o w s a r i s i n g f r o m i nve s t i n g a n d f i n a n c i n g a c t i v i t i e s w h i c h a r e r e c ove r a b l e f r o m , o r p a ya b l e to, t h e ATO a r e c l a s s i f i e d a s o p e r a t i n g ca s h f l o w. f. INCOME TAX T h e i n c o m e ta x e x p e n s e o r r eve n u e fo r t h e p e r i o d i s t h e ta x p a ya b l e o n t h e c u r r e nt p e r i o d’s ta x a b l e i n c o m e b a s e d o n t h e n a t i o n a l i n c o m e ta x r a te fo r e a c h j u r i s d i c t i o n a d j u s te d by c h a n g e s i n d e fe r r e d ta x a s s et s a n d l i a b i l i t i e s a t t r i b u ta b l e to te m p o r a r y d i f fe r e n ce s b et w e e n t h e ta x b a s e s o f a s s et s a n d l i a b i l i t i e s a n d t h e i r ca r r y i n g va l u e s i n t h e f i n a n c i a l s ta te m e nt s , a n d to u n u s e d ta x l o s s e s . D e fe r r e d ta x a s s et s a n d l i a b i l i t i e s a r e r e co g n i s e d fo r te m p o r a r y d i f fe r e n c e s a t t h e ta x r a te s e x p e c te d to a p p l y w h e n t h e a s s et s a r e r e c ove r e d o r l i a b i l i t i e s a r e s et t l e d , b a s e d o n t h o s e ta x r a te s w h i c h a r e s u b s ta n t i a l l y e n a c te d fo r e a c h j u r i s d i c t i o n . T h e r e l eva nt ta x r a te s a r e a p p l i e d to t h e c u m u l a t i ve a m o u nt s o f d e d u c t i b l e a n d ta x a b l e te m p o r a r y d i f fe r e n c e s a r i s i n g f r o m t h e i n i t i a l r e c o g n i t i o n o f a n a s s et o r a l i a b i l i t y. N o d e fe r r e d ta x a s s et o r l i a b i l i t y i s r e c o g n i s e d i n r e l a t i o n to t h e s e te m p o r a r y d i f fe r e n ce s i f t h ey a r o s e i n a t r a n s a c t i o n , ot h e r t h a n a b u s i n e s s c o m b i n a t i o n , t h a t a t t h e t i m e o f t h e t r a n s a c t i o n d i d n ot a f fe c t e i t h e r a c c o u nt i n g p r o f i t o r ta x a b l e p r o f i t o r l o s s . D e fe r r e d ta x a s s et s a r e r e c o g n i s e d fo r d e d u c t i b l e te m p o r a r y d i f fe r e n c e s a n d u n u s e d ta x l o s s e s o n l y i f i t i s p r o b a b l e t h a t f u t u r e ta x a b l e a m o u nt s w i l l b e a va i l a b l e to u t i l i s e t h o s e te m p o r a r y d i f fe r e n c e s a n d l o s s e s . C u r r e nt a n d d e fe r r e d ta x b a l a n c e s a t t r i b u ta b l e to a m o u nt s d i r e c t l y i n e q u i t y a r e a l s o r e co g n i s e d d i r e c t l y i n e q u i t y. TA X CO N SO L I DAT I O N L E G I S L AT I O N T h e C o m p a ny a n d i t s w h o l l y - o w n e d A u s t r a l i a n e nt i t i e s h a ve i m p l e m e n te d t h e ta x c o n s o l i d a t i o n l e g i s l a t i o n . T h e s e w e r e fo r m a l l y a d o pte d o n l o d g e m e nt o f t h e 2 0 0 4 i n co m e ta x r et u r n s . T h e C o m p a ny i s r e s p o n s i b l e fo r r e c o g n i s i n g t h e d e fe r r e d ta x a s s et s r e l a t i n g to ta x l o s s e s fo r t h e Ta x C o n s o l i d a te d G r o u p. T h e Ta x C o n s o l i d a te d G r o u p h a s e nte r e d i nto a ta x - s h a r i n g a g r e e m e nt w h e r e by e a c h co m p a ny i n t h e G r o u p co nt r i b u te s to t h e i n c o m e ta x p a ya b l e i n p r o p o r t i o n to t h e i r c o nt r i b u t i o n to t h e n et p r o f i t b e fo r e ta x o f t h e Ta x C o n s o l i d a te d G r o u p. g. INTANGIBLE ASSETS I nta n g i b l e a s s et s c o n s i s t o f t h e fo l l o w i n g: D E V E LO PE D PRO D U C T S D eve l o p e d p r o d u c t s a r e i n i t i a l l y r e co g n i s e d a t c o s t a n d a r e s u b s e q u e nt l y m e a s u r e d a t co s t l e s s a cc u m u l a te d a m o r t i s a t i o n a n d a cc u m u l a te d i m p a i r m e nt l o s s e s . D eve l o p e d p r o d u c t s h a ve a f i n i te l i fe a n d a r e a m o r t i s e d o n a s y s te m a t i c b a s i s m a tc h e d to t h e f u t u r e e co n o m i c b e n e f i t s ove r t h e u s e f u l l i fe o f t h e p r o j e c t w h i c h i s 10 ye a r s . PRO D U C T S U N D E R D E V E LO PM E N T E x p e n d i t u r e d u r i n g t h e r e s e a rc h p h a s e o f a p r o j e c t i s r e co g n i s e d a s a n e x p e n s e w h e n i n c u r r e d . D eve l o p m e nt co s t s a r e ca p i ta l i s e d o n l y w h e n te c h n i ca l fe a s i b i l i t y s t u d i e s i d e nt i f y t h a t t h e p r o j e c t w i l l d e l i ve r f u t u r e e co n o m i c b e n e f i t s a n d t h e s e b e n e f i t s ca n b e m e a s u r e d r e l i a b l y. 41 T h e e x p e n d i t u r e ca p i ta l i s e d i n c l u d e s t h e c o s t o f m a te r i a l s , d i r e c t l a b o u r a n d ove r h e a d c o s t s t h a t a r e d i r e c t l y a t t r i b u ta b l e to p r e p a r i n g t h e a s s et fo r i t s i nte n d e d u s e. O t h e r d eve l o p m e nt e x p e n d i t u r e i s r e c o g n i s e d i n p r o f i t o r l o s s a s i n c u r r e d . T h e ca r r y i n g va l u e o f p r o d u c t s u n d e r d eve l o p m e nt a r e r ev i e w e d a n n u a l l y w h e n t h e a s s et i s n ot yet a va i l a b l e fo r u s e, o r w h e n eve nt s o r c i rc u m s ta n ce s i n d i ca te t h a t t h e ca r r y i n g va l u e m a y b e i m p a i r e d . O n c o m m e rc i a l i s a t i o n o f t h e s e p r o d u c t s w h i c h i s r e p r e s e nte d by w h e n t h e a s s et i s a va i l a b l e fo r u s e, t h e ca p i ta l i s e d c o s t s r e l a t i n g to t h e p r o j e c t i s t r a n s fe r r e d to D eve l o p e d p r o d u c t s h . PLAN T AND EQUIPMENT CO S T A N D VA L UAT I O N P l a nt a n d e q u i p m e nt, l e a s e h o l d i m p r ove m e nt s a n d f u r n i t u r e a n d f i t t i n g s a r e ca r r i e d a t co s t. A s s et a r e ca r r i e d a t c o s t l e s s a ny a cc u m u l a te d d e p r e c i a t i o n a n d a ny i m p a i r m e nt l o s s e s . C o s t s i n c l u d e p u rc h a s e p r i c e, ot h e r d i r e c t l y a t t r i b u ta b l e c o s t s a n d t h e i n i t i a l e s t i m a te o f t h e co s t s o f d i s m a nt l i n g a n d r e s to r i n g t h e a s s et, w h e r e a p p l i ca b l e. D E PR E C I AT I O N A N D A M O R T I SAT I O N P l a nt a n d e q u i p m e nt, l e a s e h o l d i m p r ove m e nt s a n d f u r n i t u r e a n d f i t t i n g s o f t h e c o n s o l i d a te d e nt i t y a r e d e p r e c i a te d /a m o r t i s e d o n a d i m i n i s h i n g va l u e b a s i s . Ra te s o f d e p r e c i a t i o n / a m o r t i s a t i o n a r e ca l c u l a te d to a l l o ca te t h e c o s t, l e s s e s t i m a te d r e s i d u a l va l u e a t t h e e n d o f t h e u s e f u l l i ve s o f t h e a s s et s . T h e d e p r e c i a t i o n /a m o r t i s a t i o n r a te s u s e d fo r e a c h c l a s s o f d e p r e c i a b l e a s s et s a r e: Class of As se t Dim in ish in g Va lue (%) Leasehold Improvements Plant and Equipment 29 - 37 25 - 50 T h e a s s et s’ r e s i d u a l va l u e s a n d u s e f u l l i ve s a r e r ev i e w e d , a n d a d j u s te d i f a p p r o p r i a te, a t t h e e n d o f e a c h r e p o r t i n g p e r i o d . G a i n s a n d l o s s e s o n d i s p o s a l s a r e d ete r m i n e d by c o m p a r i n g p r o c e e d s w i t h t h e ca r r y i n g a m o u nt. T h e s e g a i n s a n d l o s s e s a r e i n c l u d e d i n t h e c o n s o l i d a te d s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r c o m p r e h e n s i ve i n c o m e. i. FOREIGN CURRENCY F U N C T I O N A L A N D PR E S E N TAT I O N CU R R E N CY I te m s i n c l u d e d i n t h e f i n a n c i a l s ta te m e nt s o f e a c h o f t h e G r o u p’s e nt i t i e s a r e m e a s u r e d u s i n g t h e c u r r e n c y o f t h e p r i m a r y e c o n o m i c e nv i r o n m e nt i n w h i c h t h e e nt i t y o p e r a te s (‘ t h e f u n c t i o n a l c u r r e n c y’). T h e c o n s o l i d a te d f i n a n c i a l s ta te m e nt s a r e p r e s e nte d i n A u s t r a l i a n d o l l a r s , w h i c h i s G l o b a l H e a l t h L i m i te d’s f u n c t i o n a l a n d p r e s e nta t i o n c u r r e n c y. T R A N S L AT I O N O F CO N T RO L L E D F O R E I G N E N T I T I E S T h e r e s u l t s a n d f i n a n c i a l p o s i t i o n o f a l l t h e G r o u p e nt i t i e s t h a t h a ve a f u n c t i o n a l c u r r e n c y d i f fe r e n t f r o m t h e G r o u p’s p r e s e n ta t i o n c u r r e n c y a r e t r a n s l a te d i nto t h e p r e s e nta t i o n c u r r e n c y a s fo l l o w s : • a s s et s a n d l i a b i l i t i e s a r e t r a n s l a te d a t e x c h a n g e r a te s p r eva i l i n g a t t h e e n d o f t h e r e p o r t i n g p e r i o d; • • i n co m e a n d e x p e n s e s a r e t r a n s l a te d a t a ve r a g e e x c h a n g e r a te s fo r t h e p e r i o d; a n d r eta i n e d e a r n i n g s a r e t r a n s l a te d a t t h e e x c h a n g e r a te s p r eva i l i n g a t t h e d a te o f t h e t r a n s a c t i o n . 42 E x c h a n g e d i f fe r e n c e s a r i s i n g o n t r a n s l a t i o n o f fo r e i g n o p e r a t i o n s w i t h f u n c t i o n a l c u r r e n c i e s ot h e r t h a n A u s t r a l i a n d o l l a r s a r e r e c o g n i s e d i n ot h e r c o m p r e h e n s i ve i n c o m e a n d i n c l u d e d i n t h e fo r e i g n c u r r e n c y t r a n s l a t i o n r e s e r ve i n t h e s ta te m e nt o f f i n a n c i a l p o s i t i o n . T h e c u m u l a t i ve a m o u nt o f t h e s e d i f fe r e n c e s i s r e c l a s s i f i e d i nto p r o f i t o r l o s s i n t h e p e r i o d i n w h i c h t h e o p e r a t i o n i s d i s p o s e d o f. j. LEASES L e a s e s a r e c l a s s i f i e d a t t h e i r i n c e pt i o n a s e i t h e r o p e r a t i n g o r f i n a n c e l e a s e s b a s e d o n t h e e c o n o m i c s u b s ta n c e o f t h e a g r e e m e nt s o a s to r e f l e c t t h e r i s k s a n d b e n e f i t s i n c i d e nta l to o w n e r s h i p. F i n a n ce l e a s e s , w h i c h e f fe c t i ve l y t r a n s fe r to t h e G r o u p, s u b s ta nt i a l l y a l l o f t h e r i s k s a n d b e n e f i t s i n c i d e nta l to o w n e r s h i p o f t h e l e a s e d i te m , a r e ca p i ta l i s e d a t t h e p r e s e nt va l u e o f t h e m i n i m u m l e a s e p a y m e nt s a n d a m o r t i s e d ove r t h e p e r i o d t h e G r o u p i s e x p e c te d to b e n e f i t f r o m t h e u s e o f t h e l e a s e d a s s et s . O p e r a t i n g l e a s e p a y m e nt s , w h e r e t h e l e s s o r e f fe c t i ve l y r eta i n s s u b s ta nt i a l l y a l l o f t h e r i s k s a n d b e n e f i t s o f o w n e r s h i p o f t h e l e a s e d i te m s , a r e r e co g n i s e d i n o p e r a t i n g p r o f i t o r l o s s ove r t h e l e a s e te r m . k . EMPLOYEE BENEFITS P r ov i s i o n i s m a d e fo r b e n e f i t s a cc r u i n g to e m p l oye e s i n r e s p e c t o f s a l a r i e s a n d w a g e s , a n n u a l l e a ve a n d l o n g s e r v i c e l e a ve w h e n i t i s p r o b a b l e t h a t s et t l e m e nt w i l l b e r e q u i r e d a n d t h ey a r e ca p a b l e o f b e i n g m e a s u r e d r e l i a b l y. S H O R T T E R M B E N E F I T S L i a b i l i t i e s a r i s i n g i n r e s p e c t o f w a g e s , s a l a r i e s , a n n u a l l e a ve a n d ot h e r e m p l oye e b e n e f i t s e x p e c te d to b e w h o l l y s et t l e d w i t h i n 12 m o nt h s r e p r e s e nt t h e a m o u nt w h i c h t h e G r o u p h a s a p r e s e nt o b l i g a t i o n to p a y r e s u l t i n g f r o m e m p l oye e s’ s e r v i c e s p r ov i d e d u p to t h e r e p o r t i n g d a te. L i a b i l i t i e s h a ve b e e n c a l c u l a te d a t t h e a m o u nt s e x p e c te d to a p p l y a t t h e t i m e o f s et t l e m e nt. O n - co s t s a r e i n c l u d e d i n t h i s a m o u nt. LO N G T E R M B E N E F I T S T h e l i a b i l i t y fo r e m p l oye e b e n e f i t s to l o n g s e r v i ce l e a ve r e p r e s e nt s t h e p r e s e nt va l u e o f t h e e s t i m a te d f u t u r e ca s h o u t f l o w s to b e m a d e by t h e e m p l oye r r e s u l t i n g f r o m e m p l oye e s’ s e r v i c e s p r ov i d e d u p to t h e r e p o r t i n g d a te. L i a b i l i t i e s fo r e m p l oye e b e n e f i t s w h i c h a r e n ot e x p e c te d to b e s et t l e d w i t h i n t w e l ve m o n t h s a r e d i s c o u nte d u s i n g c o r p o r a te b o n d r a te s a t r e p o r t i n g d a te, w h i c h m o s t c l o s e l y m a tc h t h e te r m s o f m a t u r i t y o f t h e r e l a te d l i a b i l i t i e s . I n d ete r m i n i n g t h e l i a b i l i t y fo r l o n g s e r v i ce l e a ve, c o n s i d e r a t i o n h a s b e e n g i ve n to f u t u r e i n c r e a s e s i n w a g e a n d s a l a r y r a te s , a n d t h e G r o u p’s e x p e r i e n ce w i t h s ta f f d e p a r t u r e s . Re l a te d o n - co s t s h a ve a l s o b e e n i n c l u d e d i n t h e l i a b i l i t y. S H AR E - BA S E D PAYM E N T S S h a r e - b a s e d co m p e n s a t i o n b e n e f i t s a r e p r ov i d e d to e m p l oye e s v i a t h e C o m p a ny’s E m p l oye e O pt i o n P l a n a n d a n e m p l oye e s h a r e s c h e m e. I n fo r m a t i o n r e l a t i n g to t h e s e s c h e m e s i s s et o u t i n N ote 21. T h e fa i r va l u e o f o pt i o n s g r a nte d u n d e r t h e C o m p a ny’s E m p l oye e O pt i o n P l a n i s r e c o g n i s e d a s a n e m p l oye e b e n e f i t e x p e n s e ove r t h e ve s t i n g p e r i o d w i t h a c o r r e s p o n d i n g i n c r e a s e i n t h e o pt i o n r e s e r ve. T h e fa i r va l u e i s m e a s u r e d a t g r a nt d a te a n d r e c o g n i s e d ove r t h e p e r i o d d u r i n g w h i c h t h e e m p l oye e s b e c o m e u n c o n d i t i o n a l l y e nt i t l e d to t h e o pt i o n s . 43 T h e fa i r va l u e a t g r a nt d a te i s i n d e p e n d e nt l y d ete r m i n e d u s i n g t h e B l a c k- S c h o l e s p r i c i n g m o d e l t h a t ta ke s i nto a cc o u n t t h e e x e rc i s e p r i c e, t h e te r m o f t h e o pt i o n , t h e ve s t i n g a n d p e r fo r m a n c e c r i te r i a , t h e i m p a c t o f d i l u t i o n , t h e n o n - t r a d e a b l e n a t u r e o f t h e o pt i o n , t h e s h a r e p r i c e a t g r a nt d a te a n d e x p e c te d p r i c e vo l a t i l i t y o f t h e u n d e r l y i n g s h a r e, t h e e x p e c te d d i v i d e n d y i e l d a n d t h e r i s k- f r e e i nte r e s t r a te fo r t h e te r m o f t h e o pt i o n . At e a c h r e p o r t i n g d a te, t h e e nt i t y r ev i s e s i t s e s t i m a te o f t h e n u m b e r o f o pt i o n s t h a t i s e x p e c te d to b e c o m e e x e rc i s a b l e. T h e e m p l oye e b e n e f i t e x p e n s e r e co g n i s e d e a c h p e r i o d ta ke s i nto a cc o u nt t h e m o s t r e c e nt e s t i m a te. U p o n t h e e x e rc i s e o f o pt i o n s , t h e b a l a n ce o f t h e s h a r e - b a s e d p a y m e nt s r e s e r ve r e l a t i n g to t h o s e o pt i o n s i s t r a n s fe r r e d to s h a r e ca p i ta l . T h e m a r ket va l u e o f s h a r e s i s s u e d to e m p l oye e s fo r n o ca s h c o n s i d e r a t i o n u n d e r t h e e m p l oye e s h a r e s c h e m e i s r e c o g n i s e d a s a n e m p l oye e b e n e f i t s e x p e n s e w i t h a co r r e s p o n d i n g i n c r e a s e i n e q u i t y w h e n t h e e m p l oye e s b e c o m e e nt i t l e d to t h e s h a r e s . l. TRAD E AND OTHER PAYAB LE S Tr a d e a n d ot h e r p a ya b l e s r e p r e s e nt t h e l i a b i l i t i e s fo r g o o d s a n d s e r v i ce s r e c e i ve d by t h e e nt i t y t h a t r e m a i n u n p a i d a t t h e e n d o f t h e r e p o r t i n g p e r i o d . T h e a m o u nt s a r e u n s e c u r e d a n d a r e r e c o g n i s e d a s a c u r r e nt l i a b i l i t y w i t h t h e a m o u nt s n o r m a l l y p a i d w i t h i n 3 0 d a y s o f r e c o g n i t i o n . m. FINANCIAL I NSTRUMENTS I n i t i a l r e c o g n i t i o n a n d m e a s u r e m e n t F i n a n c i a l i n s t r u m e nt s , i n c o r p o r a t i n g f i n a n c i a l a s s et s a n d f i n a n c i a l l i a b i l i t i e s , a r e r e c o g n i s e d w h e n t h e e nt i t y b e c o m e s a p a r t y to t h e co nt r a c t u a l p r ov i s i o n s o f t h e i n s t r u m e nt. F i n a n c i a l i n s t r u m e nt s a r e i n i t i a l l y m e a s u r e d a t fa i r va l u e p l u s t r a n s a c t i o n s c o s t s w h e r e t h e i n s t r u m e nt i s n ot c l a s s i f i e d a s a t fa i r va l u e t h r o u g h p r o f i t o r l o s s . F i n a n c i a l i n s t r u m e nt s a r e c l a s s i f i e d a n d m e a s u r e d a s s et o u t b e l o w. C L A S S I F I C AT I O N A N D S U B S E Q U E N T M E A S U R E M E N T L o a n s a n d r e ce i va b l e s L o a n s a n d r e c e i va b l e s a r e n o n - d e r i va t i ve f i n a n c i a l a s s et s w i t h f i x e d o r d ete r m i n a b l e p a y m e nt s t h a t a r e n ot q u ote d i n a n a c t i ve m a r ket a n d a r e s ta te d a t a m o r t i s e d co s t u s i n g t h e e f fe c t i ve i nte r e s t r a te m et h o d . F i n a n c i a l l i a b i l i t i e s N o n - d e r i va t i ve f i n a n c i a l l i a b i l i t i e s (e x c l u d i n g f i n a n c i a l g u a r a n te e s) a r e s u b s e q u e nt l y m e a s u r e d a t a m o r t i s e d co s t u s i n g t h e e f fe c t i ve i nte r e s t r a te m et h o d . T r a d e r e ce i va b l e s Tr a d e r e c e i va b l e s a r e r e c o g n i s e d i n i t i a l l y a t fa i r va l u e a n d s u b s e q u e n t l y m e a s u r e d a t a m o r t i s e d co s t u s i n g t h e e f fe c t i ve i nte r e s t m et h o d , l e s s p r ov i s i o n fo r i m p a i r m e n t. Tr a d e r e ce i va b l e s a r e g e n e r a l l y d u e fo r s et t l e m e nt w i t h i n 3 0 d a y s . C o l l e c ta b i l i t y o f t r a d e r e c e i va b l e s i s r ev i e w e d o n a n o n g o i n g b a s i s . D e bt s w h i c h a r e k n o w n to b e u n c o l l e c t i b l e a r e w r i t te n o f f by r e d u c i n g t h e ca r r y i n g a m o u nt d i r e c t l y. A n a l l o w a n ce a cco u nt (p r ov i s i o n fo r i m p a i r m e nt o f t r a d e r e c e i va b l e s) i s u s e d w h e n t h e r e i s o b j e c t i ve ev i d e n ce t h a t t h e G r o u p w i l l n ot b e a b l e to co l l e c t a l l a m o u nt s d u e a cc o r d i n g to t h e o r i g i n a l te r m s o f t h e r e c e i va b l e s . S i g n i f i ca nt f i n a n c i a l d i f f i c u l t i e s o f t h e d e bto r, p r o b a b i l i t y t h a t t h e d e bto r w i l l e nte r b a n k r u ptc y o r f i n a n c i a l r e o r g a n i s a t i o n , a n d d e fa u l t o r d e l i n q u e n c y i n p a y m e nt s (m o r e t h a n 3 0 d a y s ove r d u e) a r e c o n s i d e r e d i n d i ca to r s t h a t t h e t r a d e r e c e i va b l e 44 i s i m p a i r e d . T h e a m o u nt o f t h e i m p a i r m e nt a l l o w a n ce i s t h e d i f fe r e n c e b et w e e n t h e a s s et ’s ca r r y i n g a m o u nt a n d t h e p r e s e nt va l u e o f e s t i m a te d f u t u r e ca s h f l o w s , d i s c o u nte d a t t h e o r i g i n a l e f fe c t i ve i nte r e s t r a te. C a s h f l o w s r e l a t i n g to s h o r t - te r m r e c e i va b l e s a r e n ot d i s c o u nte d i f t h e e f fe c t o f d i s c o u nt i n g i s i m m a te r i a l . T h e a m o u nt o f t h e i m p a i r m e n t l o s s i s r e co g n i s e d i n t h e s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r c o m p r e h e n s i ve i n c o m e w i t h i n ot h e r e x p e n s e s . W h e n a t r a d e r e c e i va b l e fo r w h i c h a n i m p a i r m e nt a l l o w a n c e h a d b e e n r e c o g n i s e d b e c o m e s u n c o l l e c t i b l e i n a s u b s e q u e n t p e r i o d , i t i s w r i t te n o f f a g a i n s t t h e a l l o w a n c e a c c o u nt. S u b s e q u e n t r e cove r i e s o f a m o u nt s p r ev i o u s l y w r i t te n o f f a r e c r e d i te d a g a i n s t g e n e r a l a n d a d m i n i s t r a t i ve e x p e n s e s i n t h e s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r co m p r e h e n s i ve i n c o m e. I M PA I R M E N T O F F I N A N C I A L A S S E T S At e a c h r e p o r t i n g d a te, t h e G r o u p a s s e s s e s w h et h e r t h e r e i s o b j e c t i ve ev i d e n c e t h a t a f i n a n c i a l i n s t r u m e nt h a s b e e n i m p a i r e d . T h e ca r r y i n g a m o u nt o f f i n a n c i a l a s s et s i n c l u d i n g u n co l l e c t i b l e t r a d e r e c e i va b l e s i s r e d u c e d by t h e i m p a i r m e nt l o s s t h r o u g h t h e u s e o f a n a l l o w a n c e a cc o u n t. S u b s e q u e nt r e c ove r i e s o f a m o u nt s p r ev i o u s l y w r i t te n o f f a r e c r e d i te d a g a i n s t t h e a l l o w a n ce a cc o u nt. C h a n g e s i n t h e ca r r y i n g a m o u nt o f t h e a l l o w a n c e a cco u nt a r e r e c o g n i s e d i n p r o f i t o r l o s s . I f i n a s u b s e q u e nt p e r i o d , t h e a m o u nt o f t h e i m p a i r m e nt l o s s d e c r e a s e s a n d t h e d e c r e a s e ca n b e r e l a te d o b j e c t i ve l y to a n eve nt o cc u r r i n g a f te r t h e i m p a i r m e nt w a s r e c o g n i s e d , t h e p r ev i o u s l y r e c o g n i s e d i m p a i r m e nt l o s s i s r eve r s e d t h r o u g h p r o f i t o r l o s s . F I N A N C I A L G UAR A N T E E S W h e r e m a te r i a l , f i n a n c i a l g u a r a nte e s i s s u e d t h a t r e q u i r e t h e i s s u e r to m a ke s p e c i f i e d p a y m e nt s to r e i m b u r s e t h e h o l d e r fo r a l o s s i t i n c u r s b e ca u s e a s p e c i f i e d d e bto r fa i l s to m a ke p a y m e nt w h e n d u e a r e r e co g n i s e d a s a f i n a n c i a l l i a b i l i t y a t fa i r va l u e o n i n i t i a l r e c o g n i t i o n . T h e fa i r va l u e o f f i n a n c i a l g u a r a nte e c o nt r a c t s h a s b e e n a s s e s s e d u s i n g t h e p r o b a b i l i t y w e i g hte d d i s c o u nte d ca s h f l o w a p p r o a c h . T h e p r o b a b i l i t y h a s b e e n b a s e d o n: • • • t h e l i ke l i h o o d o f t h e g u a r a nte e d p a r t y d e fa u l t i n g i n a 12 - m o nt h p e r i o d; t h e p r o p o r t i o n o f t h e e x p o s u r e t h a t i s n ot e x p e c te d to b e r e c ove r e d d u e to t h e g u a r a nte e d p a r t y d e fa u l t i n g ; a n d t h e m a x i m u m l o s s e x p o s e d i f t h e g u a r a n te e d p a r t y w e r e to d e fa u l t. F i n a n c i a l g u a r a nte e s a r e s u b s e q u e nt l y m e a s u r e d a t t h e h i g h e r o f t h e b e s t e s t i m a te o f t h e o b l i g a t i o n i n a cc o r d a n ce w i t h A A S B 137: P r ov i s i o n s , C o nt i n g e nt L i a b i l i t i e s a n d C o nt i n g e nt A s s et s a n d t h e a m o u nt i n i t i a l l y r e c o g n i s e d l e s s , w h e n a p p r o p r i a te, c u m u l a t i ve a m o r t i s a t i o n i n a cco r d a n c e w i t h A A S B 118 : Reve n u e. W h e r e t h e e nt i t y g i ve s g u a r a nte e s i n e x c h a n g e fo r a fe e, r eve n u e i s r e co g n i s e d i n a cc o r d a n c e w i t h A A S B 118 . D E R E CO G N I T I O N F i n a n c i a l a s s et s a r e d e r e c o g n i s e d w h e r e t h e co nt r a c t u a l r i g h t s to r e c e i pt o f ca s h f l o w s e x p i r e s o r t h e a s s et i s t r a n s fe r r e d to a n ot h e r p a r t y w h e r e by t h e e nt i t y n o l o n g e r h a s a ny s i g n i f i ca nt c o nt i n u i n g i nvo l ve m e n t i n t h e r i s k s a n d b e n e f i t s a s s o c i a te d w i t h t h e a s s et. F i n a n c i a l l i a b i l i t i e s a r e d e r e c o g n i s e d w h e r e t h e r e l a te d o b l i g a t i o n s a r e e i t h e r d i s c h a r g e d , ca n c e l l e d o r e x p i r e. T h e d i f fe r e n c e b et w e e n t h e ca r r y i n g va l u e o f t h e f i n a n c i a l l i a b i l i t y e x t i n g u i s h e d o r t r a n s fe r r e d to a n ot h e r p a r t y a n d t h e fa i r va l u e o f c o n s i d e r a t i o n p a i d , i n c l u d i n g t h e t r a n s fe r o f n o n - c a s h a s s et s o r l i a b i l i t i e s a s s u m e d i s r e co g n i s e d i n p r o f i t o r l o s s . 45 n . CONTRIBUTED EQUITY I s s u e d a n d p a i d u p ca p i ta l i s r e c o g n i s e d a t t h e fa i r va l u e o f t h e c o n s i d e r a t i o n r e ce i ve d by t h e C o m p a ny. Tr a n s a c t i o n co s t s a r i s i n g o n t h e i s s u e o f e q u i t y i n s t r u m e nt s a r e r e c o g n i s e d d i r e c t l y i n e q u i t y a s a r e d u c t i o n o f t h e p r o c e e d s o f t h e e q u i t y i n s t r u m e n t s to w h i c h t h e c o s t s r e l a te. o . EARNINGS PER SHARE B a s i c e a r n i n g s p e r s h a r e ( E P S) i s ca l c u l a te d a s t h e n et r e s u l t a t t r i b u ta b l e to m e m b e r s , a d j u s te d to e x c l u d e c o s t s o f s e r v i c i n g e q u i t y (ot h e r t h a n d i v i d e n d s), d i v i d e d by t h e w e i g hte d a ve r a g e n u m b e r o f o r d i n a r y s h a r e s , a d j u s te d fo r a ny b o n u s e l e m e nt. D i l u te d E P S i s ca l c u l a te d a s t h e n et r e s u l t a t t r i b u ta b l e to m e m b e r s , a d j u s te d fo r : • c o s t s o f s e r v i c i n g e q u i t y (ot h e r t h a n d i v i d e n d s) a n d p r e fe r e n ce s h a r e d i v i d e n d s ; • t h e a f te r- ta x e f fe c t o f d i v i d e n d s a n d i nte r e s t a s s o c i a te d w i t h d i l u t i ve p ote nt i a l o r d i n a r y s h a r e s t h a t h a ve b e e n r e co g n i s e d a s e x p e n s e s ; a n d • ot h e r n o n - d i s c r et i o n a r y c h a n g e s i n r eve n u e s o r e x p e n s e s d u r i n g t h e p e r i o d t h a t w o u l d r e s u l t f r o m t h e d i l u t i o n o f p ote nt i a l o r d i n a r y s h a r e s ; d i v i d e d by t h e w e i g hte d a ve r a g e n u m b e r o f o r d i n a r y s h a r e s a n d d i l u t i ve p ote nt i a l o r d i n a r y s h a r e s , a d j u s te d fo r a ny b o n u s e l e m e n t. p. CASH AND CA SH EQUI VA LENTS C a s h a n d ca s h e q u i va l e nt s i n c l u d e s ca s h o n h a n d , d e p o s i t s h e l d a t ca l l w i t h f i n a n c i a l i n s t i t u t i o n s , ot h e r s h o r t - te r m , h i g h l y l i q u i d i nve s t m e nt s w i t h o r i g i n a l m a t u r i t i e s w i t h t h r e e m o nt h s o r l e s s t h a t a r e r e a d i l y c o nve r t i b l e to k n o w n a m o u nt s o f ca s h a n d w h i c h a r e s u b j e c t to a n i n s i g n i f i ca nt r i s k o f c h a n g e s i n va l u e. q. GOVERNMENT GRANTS G ove r n m e nt g r a nt s a r e r e c o g n i s e d a t fa i r va l u e w h e r e t h e r e i s r e a s o n a b l e a s s u r a n c e t h a t t h e g r a nt w i l l b e r e ce i ve d a n d a l l g r a n t c o n d i t i o n s w i l l b e m et. G r a nt s r e l a t i n g to e x p e n s e i te m s a r e r e co g n i s e d a s i n c o m e o n t h e d a te o f r e c e i pt o f t h e g r a nt. T h e G ove r n m e nt h a s t h e r i g ht to r ev i e w g r a nt s p a i d a n d m a y c l a w b a c k f u n d s i n t h e eve nt o f a n e x ce s s c l a i m . Re s e a rc h a n d D eve l o p m e nt G r a nt T h e C o m p a ny r e c e i ve d a fe d e r a l g ove r n m e nt Re s e a rc h a n d D eve l o p m e nt Ta x I n c e nt i ve o f $ 4 2 3 , 0 0 2 (2 016: $ 518 , 0 8 9) i n r e l a t i o n to i t s r e s e a rc h a n d d eve l o p m e n t a c t i v i t i e s fo r t h e 2 017 f i n a n c i a l ye a r. r. BORROWI NG COSTS B o r r o w i n g c o s t s a r e e x p e n s e d a s i n c u r r e d . s. CRI TI CAL ACC OUNTING E STIMA TES A ND JUD GEME NTS T h e D i r e c to r s eva l u a te e s t i m a te s a n d j u d g m e nt s i n c o r p o r a te d i nto t h e f i n a n c i a l r e p o r t b a s e d o n h i s to r i ca l k n o w l e d g e a n d b e s t a va i l a b l e c u r r e nt i n fo r m a t i o n . E s t i m a te s a s s u m e a r e a s o n a b l e e x p e c ta t i o n o f f u t u r e eve nt s a n d a r e b a s e d o n c u r r e nt t r e n d s a n d e c o n o m i c d a ta , o bta i n e d b ot h e x te r n a l l y a n d w i t h i n t h e G r o u p. 46 Key e s t i m a t e s ( i ) I m p a i r m e nt T h e G r o u p a s s e s s e s i m p a i r m e nt a t t h e e n d o f e a c h r e p o r t i n g p e r i o d by eva l u a t i n g co n d i t i o n s a n d eve nt s s p e c i f i c to t h e G r o u p t h a t m a y b e i n d i ca t i ve o f i m p a i r m e nt t r i g g e r s . Re c ove r a b l e a m o u nt s o f r e l eva nt a s s et s a r e r e a s s e s s e d u s i n g va l u e - i n - u s e ca l c u l a t i o n s w h i c h i n c o r p o r a te va r i o u s key a s s u m pt i o n s . I m p a i r m e nt te s t s a r e ca r r i e d o u t o n i nta n g i b l e s , r e c e i va b l e s a n d s u b s i d i a r i e s . W i t h r e s p e c t to c a s h f l o w p r o j e c t i o n s i n A u s t r a l i a a n d ove r s e a s , m o d e s t g r o w t h r a te s h a ve b e e n fa c to r e d i nto va l u a t i o n m o d e l s fo r t h e n e x t f i ve ye a r s o n t h e b a s i s o f m a n a g e m e nt ’s e x p e c ta t i o n s a r o u n d t h e G r o u p’s c o nt i n u e d a b i l i t y to c a pt u r e m a r ket s h a r e f r o m co m p et i to r s . Key j u d g m e n t s ( i ) P r ov i s i o n fo r I m p a i r m e nt o f Re c e i va b l e s P r ov i s i o n fo r i m p a i r m e nt o f t r a d e r e c e i va b l e s h a s b e e n i n c l u d e d i n N ote 6 Re ce i va b l e s . t. GOING CONCERN A s a t 3 0 J u n e 2 017 t h e c o m p a ny h a s ca s h r e s e r ve s o f $ 2 , 5 4 3 , 412 (2 016 r e s ta te d: $1,14 9, 0 2 8 ) a n d a n et c u r r e nt a s s et p o s i t i o n o f $1, 5 9 3 , 7 3 0 (2 016: $ 2 0 9, 7 3 8 ). T h e c u r r e nt ye a r p r o f i t fo r t h e p e r i o d w a s $1,9 2 5 , 76 0 a f te r r e c e i pt o f $ 5 , 0 0 0 , 0 0 0 r e l a te d to o u r C h i r o n s o f t w a r e d i s p u te (2 016 Re s ta te d: $107,94 5). T h e a n n u a l f i n a n c i a l r e p o r t h a s b e e n p r e p a r e d o n a g o i n g co n ce r n b a s i s w h i c h a s s u m e s t h a t t h e c o n s o l i d a te d e nt i t y w i l l b e a b l e to m e et t h e i r d e bt s a s a n d w h e n t h ey fa l l d u e. T h e fo l l o w i n g m a t te r s h a ve b e e n c o n s i d e r e d by t h e d i r e c to r s i n d ete r m i n i n g t h e a p p r o p r i a te n e s s o f t h e g o i n g c o n c e r n b a s i s o f p r e p a r a t i o n i n t h e f i n a n c i a l s ta te m e nt s : S u cce s s i n co n t i n u e d o p e r a t i o n s I n t h e c u r r e nt f i n a n c i a l ye a r, t h e G r o u p w a s s u c c e s s f u l i n o bta i n i n g c o nt r a c t s w i t h G ove r n m e nt a g e n c i e s a n d l a r g e co m m u n i t y h e a l t h o r g a n i s a t i o n s . T h i s i s e x p e c te d to i n c r e a s e ca s h f l o w s r e l a te d to t h e o p e r a t i o n s o f t h e e nt i t y. M a n a g e m e nt a l s o h a ve t h e a b i l i t y to r e d u c e o p e r a t i n g c o s t s i n r e l a t i o n to d eve l o p m e nt s h o u l d t h e n e e d a r i s e. I n c r e a s e s i n e x p e c te d co l l e c t i o n s w i t h t h e a b i l i t y to r e d u c e o p e r a t i n g co s t s i n r e l a t i o n to d eve l o p m e nt w i l l a l l o w t h e g r o u p to i n c r e a s e i t s o p e r a t i n g ca s h f l o w s . E x p a n s i o n i n t o t h e A S E A N r e g i o n T h e G r o u p h a s e x p a n d e d i t s a c t i v i t i e s i n t h e A S E A N r e g i o n (M a l a y s i a , S i n g a p o r e, I n d o n e s i a , T h a i l a n d , V i et n a m). M a n a g e m e nt e x p e c t to l eve r a g e t h i s p o s i t i o n to i n c r e a s e o p e r a t i n g ca s h f l o w s t h r o u g h t h e s a l e o f s o f t w a r e a n d s e r v i ce s ta r g ete d to w a r d s i nte r n a t i o n a l m a r ket s . Ava i l a b i l i t y o f F i n a n ce T h e G r o u p, t h r o u g h i t s f i n a n c i a l i n s t i t u t i o n s , m a y b e a b l e to a cq u i r e a d d i t i o n a l f i n a n c i a l s u p p o r t i f s o r e q u i r e d . O n t h e b a s i s o f t h e s e fa c to r s , t h e D i r e c to r s b e l i eve t h a t t h e g o i n g c o n c e r n b a s i s o f p r e p a r a t i o n i s a p p r o p r i a te a n d t h e G r o u p w i l l b e a b l e to r e p a y t h e i r d e bt s a s a n d w h e n t h ey fa l l d u e. I n t h e eve nt t h a t t h e G r o u p c a n n ot c o nt i n u e a s a g o i n g c o n c e r n , i t m a y n ot r e a l i s e i t s a s s et s a n d s et t l e i t s l i a b i l i t i e s i n t h e n o r m a l c o u r s e o f o p e r a t i o n s a n d a t t h e a m o u nt s s ta te d i n t h e f i n a n c i a l s ta te m e nt s . 47 u . NEW ACCOUNTING STANDARDS AND AU STRAL IAN ACC OUN TIN G INT ERPRETATIONS Acc o u nt i n g Sta n d a r d s i s s u e d by t h e A A S B t h a t a r e n ot yet m a n d a to r i l y a p p l i ca b l e to t h e G r o u p, to g et h e r w i t h a n a s s e s s m e n t o f t h e p ote nt i a l i m p a c t o f s u c h p r o n o u n ce m e nt s o n t h e G r o u p w h e n a d o pte d i n f u t u r e p e r i o d s , a r e d i s c u s s e d b e l o w : – A A S B 9 : F i n a n c i a l I n s t r u m e n t s a n d a s s o c i a t e d A m e n d i n g S t a n d a r d s (a p p l i ca b l e t o a n n u a l r e p o r t i n g p e r i o d s b e g i n n i n g o n o r a f t e r 1 J a n u a r y 2 018) A A S B 9 r e p l a ce s A A S B 13 9 F i n a n c i a l I n s t r u m e nt s : Re c o g n i t i o n a n d M e a s u r e m e nt a n d i n c l u d e s r ev i s e d r e q u i r e m e nt s fo r t h e c l a s s i f i ca t i o n a n d m e a s u r e m e nt o f f i n a n c i a l i n s t r u m e nt s , r ev i s e d r e c o g n i t i o n a n d d e - r e c o g n i t i o n r e q u i r e m e nt s fo r f i n a n c i a l i n s t r u m e nt s , r ev i s e d i m p a i r m e nt r e q u i r e m e nt s a n d s i m p l i f i e d r e q u i r e m e nt s fo r h e d g e a cco u nt i n g . T h e r ev i s e d r e q u i r e m e nt s i n c l u d e: - - s i m p l i f i ca t i o n s to t h e c l a s s i f i ca t i o n o f f i n a n c i a l a s s et s s i m p l i f i ca t i o n s to t h e a c co u nt i n g o f e m b e d d e d d e r i va t i ve s - a n e x p e c te d l o s s i m p a i r m e nt m o d e l - t h e i r r evo c a b l e e l e c t i o n to r e c o g n i s e g a i n s a n d l o s s e s o n i nve s t m e nt s i n e q u i t y i n s t r u m e nt s t h a t a r e n ot h e l d fo r t r a d i n g i n ot h e r co m p r e h e n s i ve i n c o m e. - a n e w m o d e l fo r h e d g e a c c o u nt i n g t h a t w i l l a l l o w g r e a te r f l e x i b i l i t y i n t h e a b i l i t y to h e d g e r i s k , p a r t i c u l a r l y w i t h r e s p e c t to h e d g e s o f n o n - f i n a n c i a l i te m s . T h e f i n a n c i a l a s s et s a n d l i a b i l i t i e s o f t h e G r o u p c o n s i s t o f c a s h , r e c e i va b l e s a n d p a ya b l e s . T h e r e fo r e, t h e d i r e c to r s d o n ot e x p e c t a m a te r i a l i m p a c t o n t r a n s i t i o n to A A S B 9. – A A S B 15 : R eve n u e f r o m C o n t r a c t s w i t h C u s t o m e r s (a p p l i ca b l e t o a n n u a l r e p o r t i n g p e r i o d s b e g i n n i n g o n o r a f t e r 1 J a n u a r y 2 018) T h i s Sta n d a r d w i l l r e p l a c e t h e c u r r e nt a cc o u n t i n g r e q u i r e m e nt s a p p l i ca b l e to r eve n u e w i t h a s i n g l e, p r i n c i p l e s - b a s e d m o d e l . E x ce pt fo r a l i m i te d n u m b e r o f e x c e pt i o n s , i n c l u d i n g l e a s e s , t h e n e w r eve n u e m o d e l i n A A S B 15 w i l l a p p l y to a l l co nt r a c t s w i t h c u s to m e r s a s w e l l a s n o n - m o n eta r y e x c h a n g e s b et w e e n e nt i t i e s i n t h e s a m e l i n e o f b u s i n e s s to fa c i l i ta te s a l e s to c u s to m e r s a n d p ote nt i a l c u s to m e r s . T h e co r e p r i n c i p l e o f t h e Sta n d a r d i s t h a t a n e nt i t y w i l l r e c o g n i s e r eve n u e to d e p i c t t h e t r a n s fe r o f p r o m i s e d g o o d s o r s e r v i c e s to c u s to m e r s i n a n a m o u nt t h a t r e f l e c t s t h e c o n s i d e r a t i o n to w h i c h t h e e nt i t y e x p e c t s to b e e nt i t l e d i n e x c h a n g e fo r t h e g o o d s o r s e r v i c e s . To a c h i eve t h i s o b j e c t i ve, A A S B 15 p r ov i d e s t h e fo l l o w i n g f i ve - s te p p r o c e s s : - - - - - i d e nt i f y t h e c o nt r a c t(s) w i t h a c u s to m e r ; i d e nt i f y t h e p e r fo r m a n c e o b l i g a t i o n s i n t h e c o nt r a c t(s); d ete r m i n e t h e t r a n s a c t i o n p r i c e; a l l o ca te t h e t r a n s a c t i o n p r i c e to t h e p e r fo r m a n c e o b l i g a t i o n s i n t h e co nt r a c t(s); a n d r e c o g n i s e r eve n u e w h e n (o r a s) t h e p e r fo r m a n c e o b l i g a t i o n s a r e s a t i s f i e d . T h e d i r e c to r s h a ve m a d e a p r e l i m i n a r y a s s e s s m e nt o f t h e i m p a c t a s fo l l o w s : N e w L i ce n s e s : N e w L i c e n s e s u n d e r A A S B 15 w i l l b e r e c o g n i s e d ove r t h e s e r v i c e p e r i o d i n w h i c h t h ey fa l l d u e. T h i s i s co n s i s te nt w i t h t h e a p p r o a c h ta ke n fo r r e c u r r i n g r eve n u e. I n c o m e r e ce i ve d i n a d va n c e fo r t h i s s e r v i c e p e r i o d w i l l b e c l a s s i f i e d a s a c u r r e nt l i a b i l i t y. 48 R e c u r r i n g l i ce n s e s : T h e r e w i l l b e n o c h a n g e u n d e r A A S B 15 fo r r e co g n i t i o n o f r e c u r r i n g l i c e n s e s . T h e s e a r e r e co g n i s e d ove r t h e s e r v i c e p e r i o d o f t h e c o nt r a c t. I n c o m e r e ce i ve d i n a d va n ce fo r t h i s s e r v i c e p e r i o d w i l l b e c l a s s i f i e d a s a c u r r e nt l i a b i l i t y. PRO F E S S I O N A L F E E S: F o r p r o fe s s i o n a l s e r v i c e o f fe r e d to e x i s t i n g c l i e n t s fo r a d - h o c s e r v i c e s r eve n u e w i l l b e r e co g n i s e d w h e n t h e p e r fo r m a n ce o b l i g a t i o n i s m et w h i c h w o u l d n o r m a l l y o cc u r w h e n s e r v i c e s a r e r e n d e r e d . F o r p r o fe s s i o n a l s e r v i c e s p e r fo r m e d fo r n e w c l i e nt s r e l a te d to t h e s et u p o f s o f t w a r e, r eve n u e w i l l r e c o g n i s e d ove r t h e a s s e s s e d e x p e c te d l i fe o f t h e c l i e nt. O u r c u r r e nt a s s e s s m e nt o f c l i e nt l i fe i s fo r f i ve ye a r s . T h i s i s b a s e d o n o u r l o n g e s t co nt r a c t p e r i o d o f fe r e d a s w e l l a s m a n a g e m e nt ’s a s s e s s m e nt o f c l i e nt l i fe. OT H E R I N CO M E : O t h e r i n c o m e w i l l n ot b e s i g n i f i c a n t l y i m p a c te d by A A S B 15 . I t w i l l b e r e c o g n i s e d a s i n co m e w h e n t h e i d e nt i f i e d p e r fo r m a n c e o b l i g a t i o n s h a ve b e e n s a t i s f i e d . T h e e f fe c t o n r eve n u e (c o n s o l i d a te d) a c co u n t s i s a s fo l l o w s : 2017 as per c u rre n t accou nt ing standa rd s $ Po te n tia l re s ta t em en t u n de r AASB 15 re q uir em e nt s $ 2017 Res t at ed u n de r AASB 15 re q uir em e nt s $ Account Profit and Loss Revenue from the sale of licenses and maintenance 8,415,775 (281,984)* 8,133,791 contracts Revenue from professional services Statement of Financial Position Current Liabilities. 1,191,795 (443,251)* 748,544 - 725,235 725,235 * Re s ta te m e nt o f r eve n u e i s b a s e d o n t h e c h a n g e s a nt i c i p a te d by A A S B 15 a n d by t h e a s s u m pt i o n s m a d e by m a n a g e m e n t a s a t p r e p a r a t i o n d a te o f t h e f i n a n c i a l s ta te m e n t s . A s s u m pt i o n s m a y b e r e a s s e s s e d i n t h e f u t u r e a cc o u nt i n g p e r i o d’s r e s u l t s i n d i f fe r e n c e s i n t h e e x p e c te d r e s ta te m e nt o f r eve n u e b a l a n c e s fo r t h e 2 017 F i n a n c i a l Ye a r. – A A S B 16: L e a s e s (a p p l i ca b l e t o a n n u a l r e p o r t i n g p e r i o d s b e g i n n i n g o n o r a f t e r 1 J a n u a r y 2 019) . A A S B 16 w i l l r e p l a c e t h e c u r r e nt a cco u nt i n g r e q u i r e m e nt s a p p l i ca b l e to l e a s e s i n A A S B 117: L e a s e s a n d r e l a te d I nte r p r eta t i o n s . A A S B 16 i nt r o d u ce s a s i n g l e l e s s e e a cco u nt i n g m o d e l t h a t e l i m i n a te s t h e r e q u i r e m e nt fo r l e a s e s to b e c l a s s i f i e d a s o p e r a t i n g o r f i n a n c e l e a s e s . T h e m a i n c h a n g e s i nt r o d u c e d by t h e n e w Sta n d a r d i n c l u d e: - r e co g n i t i o n o f a r i g ht - to - u s e a s s et a n d l i a b i l i t y fo r a l l l e a s e s (e x c l u d i n g s h o r t - te r m l e a s e s w i t h l e s s t h a n 12 m o nt h s o f te n u r e a n d l e a s e s r e l a t i n g to l o w - va l u e a s s et s); - d e p r e c i a t i o n o f r i g ht - to - u s e a s s et s i n l i n e w i t h A A S B 116: P r o p e r t y, P l a nt a n d E q u i p m e nt i n p r o f i t o r l o s s a n d u n w i n d i n g o f t h e l i a b i l i t y i n p r i n c i p a l a n d i nte r e s t c o m p o n e n t s ; 49 - va r i a b l e l e a s e p a y m e nt s t h a t d e p e n d o n a n i n d e x o r a r a te a r e i n c l u d e d i n t h e i n i t i a l m e a s u r e m e nt o f t h e l e a s e l i a b i l i t y u s i n g t h e i n d e x o r r a te a t t h e c o m m e n c e m e n t d a te; - by a p p l y i n g a p r a c t i ca l e x p e d i e nt, a l e s s e e i s p e r m i t te d to e l e c t n ot to s e p a r a te n o n - l e a s e c o m p o n e nt s a n d i n s te a d a cc o u nt fo r a l l c o m p o n e nt s a s a l e a s e; a n d - a d d i t i o n a l d i s c l o s u r e r e q u i r e m e n t s . T h e d i r e c to r s e x p e c t t h a t t h e a d o pt i o n o f A A S B 16 w i l l r e s u l t i n l e a s e a s s et s a n d l i a b i l i t i e s b e i n g r e c o g n i s e d o n b a l a n c e s h e et a n d a c h a n g e i n h o w r e l a te d e x p e n s e s a r e i n c u r r e d . T h e f i n a n c i a l i m p a c t o f t h i s h a s n ot yet b e e n d ete r m i n e d . – A A S B 2 016 -1: A m e n d m e n t s t o Au s t r a l i a n Acco u n t i n g S t a n d a r d s – R e co g n i t i o n o f D e f e r r e d Ta x A s s e t s f o r U n r e a l i s e d L o s s e s (a p p l i ca b l e f o r r e p o r t i n g p e r i o d s b e g i n n i n g o n o r a f t e r 1 J a n u a r y 2 017 ) T h i s s ta n d a r d c l a r i f i e s t h a t d e fe r r e d ta x a s s et r e c o g n i t i o n o n u n r e a l i s e d l o s s e s a r i s i n g f r o m a s s et s m e a s u r e d a t fa i r va l u e i n t h e f i n a n c i a l s ta te m e nt s s h o u l d ca r r i e d o u t a f te r ta k i n g i nto a cc o u nt a ny r e s t r i c t i o n s i m p o s e d u n d e r ta x l a w s o n t h e s o u rce o f ta x a b l e p r o f i t s a g a i n s t w h i c h t h e d e d u c t i b l e te m p o r a r y d i f fe r e n ce s ca n b e o f f s et. F u r t h e r t h e f u t u r e ta x a b l e p r o f i t s s h o u l d n ot i n c l u d e a ny a m o u nt s t h a t a r e r eve r s a l o f t h e d e d u c t i b l e te m p o r a r y d i f fe r e n c e s . A A S B 2 016 -1 i s n ot e x p e c te d to i m p a c t t h e G r o u p’s f i n a n c i a l s ta te m e nt s s i n c e t h e d i r e c to r s b e l i eve t h a t t h e G r o u p’s a cco u nt i n g p o l i c y fo r d e fe r r e d ta x a s s et i n r e l a t i o n to a s s et s m e a s u r e d a t fa i r va l u e i s a l r e a d y i n c o m p l i a n ce w i t h t h e s ta n d a r d . F u r t h e r m o r e, t h e G r o u p d o e s n ot h a ve a ny s i g n i f i c a nt a s s et s m e a s u r e d a t fa i r va l u e. – A A S B 2 016 - 5 : A m e n d m e n t s t o A u s t r a l i a n Acco u n t i n g S t a n d a r d s – C l a s s i f i ca t i o n a n d M e a s u r e m e n t o f S h a r e - b a s e d Pa y m e n t T r a n s a c t i o n s (a p p l i ca b l e f r o m 1s t J a n u a r y 2 018) T h i s s ta n d a r d p r ov i d e s g u i d a n c e o n t r e a t m e nt o f ve s t i n g co n d i t i o n s i n a c a s h - s et t l e d s h a r e b a s e d p a y m e nt a r r a n g e m e nt t h a t a r e s i m i l a r to w h a t h a s b e e n p r e s c r i b e d fo r e q u i t y s et t l e d s h a r e b a s e d p a y m e n t a r r a n g e m e n t s . I t a l s o c l a r i f i e s t h a t, s u b j e c t to c e r ta i n e x ce pt i o n s , s h a r e b a s e d p a y m e nt t r a n s a c t i o n s w i t h n et - s et t l e m e nt fe a t u r e o n a c co u nt o f w i t h h o l d i n g ta x o b l i g a t i o n s s h o u l d b e c l a s s i f i e d i n e nt i r et y a s e q u i t y s et t l e d s h a r e b a s e d p a y m e nt. S i n c e t h e G r o u p d o e s n ot h a ve a p o l i c y o f ca s h - s et t l e d s h a r e b a s e d a w a r d s o r n et - s et t l e m e nt fe a t u r e s i n e q u i t y s et t l e d p l a n s , t h i s s ta n d a r d i s n ot e x p e c te d to i m p a c t t h e G r o u p’s f i n a n c i a l s ta te m e n t s . v. RESTA TEMENT OF PRIOR P ERIOD F INANCIA L STA TEMENTS SA H E A LT H L I T I GAT I O N T h e l e g a l s et t l e m e nt s u m o f $ 5 m i l l i o n r e c e i ve d f r o m t h e r e s o l u t i o n o f t h e C h i r o n S o f t w a r e l i t i g a t i o n h a d b e e n p r o p o r t i o n a te l y r e co g n i s e d a s r eve n u e fo r t h e ye a r e n d e d 3 0 J u n e 2 016 . T h i s h a s b e e n i d e nt i f i e d a s a n e r r o r g i ve n t h e n a t u r e o f t h e s et t l e m e nt w h e r e i t r e l a te d to c o m p e n s a t i o n i n d a m a g e s w h i c h s h o u l d b e r e co g n i s e d a s r eve n u e o n t h e d a te o f r e c e i pt w h i c h o cc u r r e d i n A u g u s t 2 016 . T h e r e w e r e n o f u r t h e r p e r fo r m a n c e o b l i g a t i o n s r e q u i r e d f r o m G l o b a l H e a l t h to p r ov i d e s e r v i c e s to S A H e a l t h . Acco r d i n g l y, t h e s et t l e m e nt s u m o f $ 5 m s h o u l d b e r e c o g n i s e d i m m e d i a te l y a s r eve n u e o n r e c e i pt. T h e i m p a c t o f t h e a b ove r e s ta te m e nt h a s r e s u l te d i n $1. 2 5 m i l l i o n b e i n g d e r e c o g n i s e d fo r t h e ye a r e n d e d J u n e 2 016 a n d r e s ta te d i n t h e 2 017 f i n a n c i a l ye a r. 50 30 June 2016 Res t at em e nt Receivables Revenue (1,250,000) (1,250,000) I mp ac t Decrease Decrease I n a d d i t i o n , $ 6 0 9, 5 2 7 o f c a p i ta l i s e d l e g a l c o s t s w e r e m i s c l a s s i f i e d to i nta n g i b l e a s s et s r e l a t i n g to t h e S A H e a l t h l i t i g a t i o n f r o m w h i c h a n a m o r t i s a t i o n c h a r g e o f $15 2 , 3 8 2 h a d b e e n r e c o g n i s e d i n p r o f i t o r l o s s . T h e s e ca p i ta l i s e d l e g a l co s t s r e l a te to t h e p r ote c t i o n o f i nte l l e c t u a l p r o p e r t y. T h i s h a d b e e n r e c l a s s i f i e d a s ot h e r a s s et s r e l a t i n g to t h e ye a r e n d e d 3 0 J u n e 2 016 . T h e a m o r t i s a t i o n c h a r g e o n t h e ca p i ta l i s e d l e g a l c o s t s h a d b e e n d e r e co g n i s e d i n t h e 2 016 f i n a n c i a l ye a r. 30 June 2016 Restatement Intangible Assets Other assets Amortisation expense (457,145) 609,527 (152,382) Impact Decrease Increase Decrease C A PI TA L I SAT I O N O F OV E R H E A D E X PE N D I T U R E G e n e r a l ove r h e a d c o s t s n ot d i r e c t l y a t t r i b u ta b l e to t h e d eve l o p m e nt o f i nte r n a l l y g e n e r a te d i nta n g i b l e a s s et s h a d b e e n i n c o r r e c t l y ca p i ta l i s e d by $14 4 , 4 3 6 a n d $119, 4 97 d u r i n g t h e f i n a n c i a l ye a r s e n d e d 3 0 J u n e 2 015 a n d 3 0 J u n e 2 016 r e s p e c t i ve l y. T h e s e c o s t s h a ve b e e n r e s ta te d a s a n e x p e n s e i n t h e co r r e c t r e p o r t i n g p e r i o d a n d h a ve a cco r d i n g l y b e e n d e - r e co g n i s e d f r o m i nta n g i b l e a s s et s . 30 June 2 016 Res t at em e nt Intangible Assets Accumulated Losses Operating Expenses (263,933) 144,436 119,497 I mp ac t Decrease Increase Increase A BA K I SO F T WAR E PU R C H A S E T h e p u rc h a s e o f t h e A b a k i s o f t w a r e w h i c h o cc u r r e d i n t h e ye a r e n d e d 3 0 J u n e 2 016 h a d b e e n i n a p p r o p r i a te l y r e c o r d e d o n i n i t i a l r e c o g n i t i o n . T h i s r e s u l te d i n a n u n d e r s ta te m e nt o f i nta n g i b l e a s s et s by $ 3 2 8 , 511. T h e s o f t w a r e w a s a l s o m i s c l a s s i f i e d a s ot h e r a s s et s i n t h e c o n s o l i d a te d s ta te m e nt o f f i n a n c i a l p o s i t i o n a s a t 3 0 J u n e 2 016 r e s u l t i n g i n a m i s c l a s s i f i ca t i o n e r r o r o f $171, 4 8 9. A n a m o r t i s a t i o n c h a r g e o f $ 5 0 , 0 94 h a d a l s o b e e n r e s ta te d i n t h e 2 016 f i n a n c i a l ye a r to r e f l e c t t h e s u b s e q u e nt m e a s u r e m e nt o f t h e i nta n g i b l e a s s et. 30 June 2016 Res t at em e nt Intangible Assets Other Assets Amortisation expense Trade payable 449,906 (171,489) 50,094 (328,511) I mp ac t Increase Decrease Increase Increase w. NON-CONTROLLI NG INTE RES T T h e n o n - c o nt r o l l i n g i nte r e s t i n e q u i t y h a d b e e n ove r s ta te d by $13 6 , 6 6 4 a s a t 3 0 J u n e 2 016 a r i s i n g f r o m a m i s a l l o ca t i o n o f t h e p r o f i t o r l o s s a n d ot h e r c o m p r e h e n s i ve i n c o m e b et w e e n o w n e r s o f t h e p a r e nt a n d n o n - c o n t r o l l i n g i nte r e s t p r i o r to t h a t p e r i o d . T h i s h a s b e e n r e s ta te d i n t h e e a r l i e s t co m p a r a t i ve p e r i o d p r a c t i ca b l e, w h i c h h a s b e e n i d e nt i f i e d a s 3 0 J u n e 2 015 . T h e i m p a c t h a d b e e n d ete r m i n e d a s fo l l o w s : 51 30 June 20 16 Res t at em e nt Non-controlling interest Accumulated losses 136,664 (136,664) I m pac t Increase Decrease T h e c u m u l a t i ve i m p a c t o n t h e f i n a n c i a l s ta te m e nt s a r i s i n g f r o m t h e r e s ta te m e nt s o n t h e p r i o r p e r i o d e r r o r s a r e d i s c l o s e d a s fo l l o w s : CO N SO L I DAT E D S TAT E M E N T O F F I N A N C I A L P O S I T I O N 30 June 2015 Increase/ (Decrease) Receivables Other Assets 931,730 235,989 0 0 Intangibles 4,025,198 (144,436) Payables 718,130 0 30 Ju n e 2015 (Re st a te d) 931,730 235,989 3,880,762 718,130 30 Ju n e 2016 I n cr ea se / (De c re as e) 30 Ju ne 2016 (Re st ated) 2,786,734 (1,250,000) 1,536,734 403,680 5,118,324 1,067,257 438,038 (271,172) 328,511 841,718 4,847,152 1,395,768 Net As sets 3,628,006 (14 4,436) 3, 483, 570 5, 056, 903 (1, 411, 645) 3, 645, 258 Accumulated losses Non-controlling interest (16,969,316) (281,100) (17,250,416) (15,596,046) (1,548,309) (17,144,355) (138,176) 136,664 (1,512) (136,256) 136,664 408 Total Equity 3,628,006 (14 4,436) 3, 483, 570 5, 056, 903 (1, 411, 645) 3, 645, 258 CO N SO L I DAT E D S TAT E M E N T O F PRO F I T O R LO S S A N D OT H E R CO M PR E H E N S I V E I N CO M E 30 June 2015 Increase/ (Decrease ) 30 Ju n e 2015 (Re st a te d) 30 Ju n e 2016 I n cr ea se / (De c re as e) 30 Ju ne 2016 (Re st ated) Revenue from the sale of licenses and 3,504,313 0 3,504,313 4,837,110 (1,250,000) 3,587,110 maintenance contracts General and administration -777,354 -144,436 -921,790 -838,026 (119,497) (957,523) costs Amortisation -211,371 0 -211,371 -364,331 102,288 -262,043 Prof it before income tax Income tax expense Net profit for the period 1,059,907 -144,4 36 915, 471 1, 375, 154 (1, 267, 209) 107, 94 5 0 0 0 1,059,907 -144,4 36 915, 471 1, 375, 154 (1, 267, 209) 107, 94 5 52 2. R EVEN UE A N D O T HER INC OME Revenue Sales of licenses Maintenance contracts Professional services Other Income Settlement on Chiron Software litigation - refer note 1(v) Interest received on financial assets Research and Development grants Other 3. EX P ENS ES Prof it bef ore inco me tax inclu de s th e f o llo w in g specific expense s Direct external costs Depreciation of non-current assets Amortisation of Intangibles Impairment of Intangibles C on s ol id at ed Gr o up 2017 $ 906,187 2,509,588 1,191,795 4,607,570 5,000,000 43,206 423,002 226,403 5,692,611 2016 $ 800,224 2,786,886 906,187 4,493,297 - 15,069 518,089 172,995 706,153 10,300,181 5,199,450 C on s ol id at ed Gr o up 2017 $ 263,754 87,931 266,021 917,381 2016 $ 170,475 122,048 262,043 - Wages and salaries, net of Capitalised Development cost 4,954,609 3,496,079 Travel and accommodation Operating lease expense Finance cost (interest expense and bank charges) 116,222 149,700 146,500 118,502 161,794 97,568 53 4. I NC O ME T AX EX PE NSE C on s o lid at ed G rou p The major component s of t ax e xpen s e c o m p ris e: Current Tax Deferred Tax The prima facie t ax on pro fit fr o m o r d in a ry a c t iv it ie s before income tax is r ec onc ile d t o t he i n c om e t ax as follows: Profit from continuing operations before income tax Prima facie tax/ (tax benefit) at 30% (2016: 30%) Add tax effect of: AIFRS adjustments (non-deductible) Foreign exchange taxable gains Entertainment (non-deductible) Entertainment (non-deductible) Legal expenses (non-deductible) Prior period differences Less tax effect of: Tax losses deducted Grants receivable Refundable tax offsets Tax losses recognised Income tax expense recognised Current and Deferre d tax balanc e s : Assets : CURRENT/NON-CURRENT Current tax asset Deferred tax asset Liabi lities: Deferred tax liability 2017 $ (481,842) 685,816 1,932,019 579,606 19,965 - 17,712 17,712 5,815 1,122,211 (1,098,248) (126,901) (481,842) (349,507) 203, 974 481,842 596,599 1,282,415 2016 $ - - - - - - - - - - - - - - - - - - 54 5. C AS H A N D CASH E QUIVAL ENTS Cash at bank and on hand Deposits at call C on s ol id at ed Gr o up 2017 $ 384,966 2,158,446 2016 $ 1,149,028 - Balance per St at eme nt of Ca sh F lo w s 2, 543, 412 1, 149, 028 6. T R AD E A ND OT HER RE CEIVAB L E S Current Trade receivables Impairment of receivables Non-Current Trade receivables C on s o lid at ed G rou p 2017 $ 1,850,658 (29,560) 2016 $ 1,537,645 (911) 1, 821, 098 1, 536, 734 140,911 140, 911 276,645 276, 645 1, 962, 009 1, 813, 379 PROV I S I O N F O R I M PA I R M E N T O F CU R R E N T T R A D E R E C E I VA B L E S C u r r e nt t r a d e r e ce i va b l e s a r e n o n - i nte r e s t b e a r i n g r e c e i va b l e s a n d g e n e r a l l y o n 3 0 - d a y te r m s . A p r ov i s i o n fo r i m p a i r m e nt i s r e c o g n i s e d w h e n t h e r e i s o b j e c t i ve ev i d e n ce t h a t a n i n d i v i d u a l t r a d e r e c e i va b l e i s i m p a i r e d . M ove m e nt s i n t h e p r ov i s i o n a r e a s fo l l o w s : Balance at beginning of year Charge for year Amounts written off Amounts reversed Closing balanc e C on s o lid at ed G rou p 2017 $ 911 28,649 - - 2016 $ 911 - - - 29, 560 911 55 T R A D E R E C E I VA B L E S - I M PA I R E D A s a t 3 0 J u n e 2 017, t h e fo l l o w i n g t r a d e r e c e i va b l e s o f t h e G r o u p w e r e p a s t d u e a n d i m p a i r e d (2 016: $ 911). T h e a g e i n g o f t r a d e r e c e i va b l e s w h i c h h a ve b e e n i m p a i r e d a r e a s fo l l o w s : 1 to 3 months 3 to 6 months Over 6 months C on s ol id at ed Gr o up 2017 2016 $ - - 29,560 $ - - 911 T R A D E R E C E I VA B L E S T H AT AR E PA S T D U E B U T N OT I M PA I R E D A s o f 3 0 J u n e 2 017, t r a d e r e ce i va b l e s o f $ 4 9 0 , 4 67 (2 016: $ 37 8 , 5 7 8 ) w e r e p a s t d u e b u t n ot i m p a i r e d . T h e s e r e l a te to a n u m b e r o f i n d e p e n d e n t c u s to m e r s fo r w h o m t h e r e i s n o r e c e nt h i s to r y o f d e fa u l t. T h e a g e i n g a n a l y s i s o f t h e s e t r a d e r e c e i va b l e s i s a s fo l l o w s : 1 month 2-3 months Over 3 months C on s ol id at ed Gr o up 2017 $ 150,759 131,287 208,421 2016 $ 66,411 193,518 118,649 FA I R VA L U E S T h e ca r r y i n g va l u e l e s s i m p a i r m e nt p r ov i s i o n o f t r a d e r e c e i va b l e s a r e a s s u m e d to a p p r o x i m a te fa i r va l u e. 7. O T HER AS SE TS Current Prepayments SA Health – legal IP protection costs Security bonds C on s ol id at ed Gr o up 2017 $ 77,504 - 108,465 185, 969 2016 $ 116,089 609,527 116,102 841, 718 56 8. P R OP ER TY , P LAN T AND EQUIPM E NT a . PROPERTY, PL ANT AND EQ UIP ME NT S U MMAR Y Property, plant and e qu ip me n t Leasehold improvements – at cost Accumulated amortisation Plant and equipment – at cost Accumulated depreciation Total property, plant and equ ipme n t C on s ol id at ed Gr o up 2017 $ 178,787 (117,727) 61, 060 344,221 (254,543) 89, 678 150, 738 2016 $ 178,787 (92,065) 86, 722 278,165 (192,274) 85, 891 172, 613 b . PROPERTY, PL ANT AND EQ UIP ME NT R ECO NCIL IA TION Movement in Carr ying Am ou n t Leasehold improv ement s Carrying amount – as at 1 July Additions Amortisation Carrying amount – as at 30 June Plant and equip me nt Carrying amount – as at 1 July Additions Disposal, net Depreciation Carrying amount – as at 30 June C on s ol id at ed Gr o up 2017 $ 86,722 - (25,662) 61,060 85,891 66,056 - (62,269) 89, 678 2016 $ 132,448 5,570 (51,296) 86,722 14,523 143,703 (1,583) (70,752) 85, 891 Total property, plant and equ ipme n t 150, 738 172, 613 57 9. I NT A NG IB LE AS SET S a . INTANGIBLE ASSET SUMMA RY Intangible assets C on s ol id at ed Gr o up 2017 $ 2016 Res t at ed $ Products und er d ev elopmen t – at co s t * 3, 946, 143 2, 838, 462 Developed Products Cost Accumulated amortisation Accumulated Impairment Total Develop ed Pr oduct s Total intangible assets 2,844,203 (1,055,045) (917,381) 871, 777 4,817,920 2,797,715 (789,024) - 2, 008, 691 4,847,152 * T h i s r e p r e s e nt s c o s t s a r i s i n g f r o m t h e d eve l o p m e nt p h a s e o f i nte r n a l p r o j e c t s . D eve l o p m e nt c o s t s i n c o r p o r a te d i r e c t l y a t t r i b u ta b l e e m p l oye e b e n e f i t e x p e n s e s , fe e s to r e g i s te r a l e g a l r i g ht a n d ot h e r d i r e c t m a te r i a l a n d s e r v i c e s c o s t s to d eve l o p t h e p r o j e c t. D eve l o p e d p r o d u c t s h a ve f i n i te u s e f u l l i fe o f 10 ye a r s w h i c h a r e a m o r t i s e d o n a s t r a i g ht l i n e b a s i s ove r t h e i r e f fe c t i ve l i fe. T h e c u r r e n t a m o r t i s a t i o n c h a r g e s fo r i nta n g i b l e a s s et s h a ve b e e n s e p a r a te l y p r e s e nte d a s a m o r t i s a t i o n e x p e n s e i n t h e co n s o l i d a te d s ta te m e nt o f p r o f i t o r l o s s a n d ot h e r c o m p r e h e n s i ve i n c o m e. b. INTANGIBLE ASSET RECONC ILIA TION Movement in Carrying Amount Carrying amount – as at 1 July 2015 Restated Additions Transfer of commercialised product Disposals Amortisation charge Impairment Carrying amount – as at 30 June 2016 Restated Products u nd er De velopm e nt $ 1,826,430 1,012,032 - - - - De velo pe d Pro du c ts $ 2,270,733 - - - (262,043) - T ot a l $ 4,097,163 1,012,032 - - (262,043) - 2,838, 462 2, 008, 690 4, 847, 152 Carrying amount – as at 1 July 2016 Additions Transfer of commercialised product Disposals Amortisation charge Impairment 2,838,462 1,107,682 - - - - Carrying amount – as at 30 June 2017 3,946, 144 2,008,690 46,487 - - (266,020) (917,381) 871, 776 4,847,152 1,154,169 - - (266,020) (917,381) 4, 817, 920 58 c . IMPAI RMENT DISCLOSURES D E V E LO PE D PRO D U C T S A s a t 3 0 J u n e 2 017, a n i m p a i r m e nt c h a r g e o f $ 917, 3 81 h a d b e e n r e c o g n i s e d i n r e l a t i o n to c e r ta i n d eve l o p e d p r o d u c t s d u e to i m p a i r m e nt i n d i ca to r s i d e n t i f i e d f r o m u n d e r p e r fo r m i n g a s s et s . F o r e ca s te d ca s h f l o w s , b e i n g a n e s t i m a te o f t h e r e c ove r a b l e a m o u nt o f t h e a s s et s h a d i n d i ca te d a d e f i c i e n c y a g a i n s t t h e a s s et ’s ca r r y i n g va l u e s , p r i n c i p a l l y d r i ve n by t h e b u s i n e s s c h a l l e n g e s fa ce d i n t h e s o f t w a r e a n d te c h n o l o g i c a l e nv i r o n m e nt. T h e i m p a i r m e nt te s t i n g h a d b e e n p e r fo r m e d b a s e d o n t h e ca s h g e n e r a t i n g u n i t s i d e nt i f i e d by s o f t w a r e p r o d u c t l i n e s . T h e s e p r o d u c t l i n e s fa l l w i t h i n t h e a c u te a n d n o n - a c u te r e p o r t i n g s e g m e nt s a s o u t l i n e d i n N ote 2 6 . T h e i m p a i r m e nt c h a r g e r e c o g n i s e d w i t h r e s p e c t to e a c h s o f t w a r e p r o d u c t l i n e a r e: Year ended 30 June 2017 Impairment charge Refer ralNet Mast erCare L ife c ar d Aba ki St re am lin ing t he Pat ien t J ou rn e y T ot al (733,381) - (184,000) - - (917,381) T h e i m p a i r m e nt c h a r g e r e c o g n i s e d w i t h r e s p e c t to Re fe r r a l N et a n d L i fe ca r d fo r m p a r t o f t h e n o n - a c u te r e p o r t i n g s e g m e nt. T h e r e c ove r a b l e a m o u nt o f e a c h ca s h - g e n e r a t i n g u n i t a b ove i s d ete r m i n e d b a s e d o n va l u e - i n - u s e ca l c u l a t i o n s . Va l u e - i n - u s e i s ca l c u l a te d b a s e d o n t h e p r e s e nt va l u e o f ca s h f l o w p r o j e c t i o n s ove r a 5 ye a r p e r i o d . T h e ca s h f l o w s a r e d i s c o u nte d u s i n g a p r e - ta x d i s c o u nt r a te o f 10 % . T h e fo l l o w i n g key a s s u m pt i o n s w e r e u s e d i n t h e va l u e - i n - u s e ca l c u l a t i o n s : P r e - ta x d i s co u nt r a te o f 10 % - G r o w t h r a te s - E m p l oy m e n t c o s t s - N o te r m i n a l g r o w t h r a te to e x t r a p o l a te ca s h f l o w s b eyo n d t h e fo r e ca s t p e r i o d * * T h e s o f t w a r e p r o d u c t l i n e s h a ve a f i n i te u s e f u l l i fe, h e n ce n o te r m i n a l va l u e h a d b e e n i n c l u d e d a t t h e e n d o f t h e 5 ye a r p e r i o d i n t h e r e c ove r a b l e a m o u nt ca l c u l a t i o n . M a n a g e m e nt h a s b a s e d t h e va l u e - i n - u s e c a l c u l a t i o n s o n b u d g et s fo r e a c h r e p o r t i n g s e g m e nt. T h e s e b u d g et s u s e h i s to r i ca l w e i g hte d a ve r a g e g r o w t h r a te s to p r o j e c t r eve n u e. C o s t s a r e c a l c u l a te d ta k i n g i nto a cc o u nt h i s to r i ca l g r o s s m a r g i n s a s w e l l a s e s t i m a te d w e i g hte d a ve r a g e i n f l a t i o n r a te s ove r t h e p e r i o d , w h i c h a r e c o n s i s te nt w i t h i n f l a t i o n r a te s a p p l i ca b l e to t h e l o ca t i o n s i n w h i c h t h e G r o u p o p e r a te s . 59 10. DEF ER RE D T AX BA LANC ES Deferred tax asset Open in g Bala n ce Rec o gn is ed in Pr of it o r L os s Opening balance at 1 July 201 6 Future income tax benefits attributable to tax losses Accrued expenses Provisions Cl osing balance at 30 J une 2017* $ - - - - - $ - 349,507 51,216 195,876 596, 599 Rec o gn is ed dir e ct ly in Eq u ity $ - - - - - Deferred tax liab ility Opening balance at 1 July 201 6 Prepayments and other assets Intangible assets Clo sing balance at 3 0 June 201 7* Open in g Bala n ce 000’ s $ - - - - Rec o gn is ed in Pr of it o r L os s 000’ s $ - 985 1,281,430 1, 282, 415 Rec o gn is ed dir ec t ly in Eq ui ty 000’ s $ - - - - T ot al $ - 349,507 51,216 195,876 596,5 99 T ot al 000 ’s $ - 985 1,281,430 1, 282,4 15 * T h i s i s t h e f i r s t ye a r f r o m w h i c h ta x e f fe c t i ve a cc o u nt i n g h a d b e e n a p p l i e d i n d ete r m i n i n g t h e r e s p e c t i ve d e fe r r e d a s s et s a n d l i a b i l i t i e s a s a t 3 0 J u n e 2 017. 11. P AY A B LES Trade creditors Other creditors and accruals C on s o lid at ed G rou p 2017 $ 469,635 609,647 2016 $ 712,326 683,442 1, 079, 282 1, 395, 768 T h e ca r r y i n g va l u e o f t r a d e p a ya b l e s i s a s s u m e d to a p p r o x i m a te fa i r va l u e. 12. I NT ER E ST BE AR I N G LIABIL ITIES Current Borrowings Non-Current Borrowings C on s o lid at ed G rou p 2017 $ 2016 $ 389,880 389, 880 355,351 355, 351 1,078,880 1,386,378 1, 078, 880 1, 386, 378 I nte r e s t b e a r i n g l i a b i l i t i e s a r e p r ov i d e d to G r o u p o n te r m s o f 5 ye a r s a n d a n a ve r a g e e f fe c t i ve i nte r e s t r a te o f 8 . 6 0 % . 60 13. EMP LO Y EE BE NEFI TS Analysis o f Emplo yee Be n ef it s Co nsolidat ed Grou p 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 14. U NEA R NED INC O ME C on s ol id at ed Gr o up 2017 $ 2016 $ 569,371 (254,744) 222,606 537,233 579,998 (252,291) 241,664 569,371 506,469 423,370 30,764 537, 233 146,001 569, 371 C on s o lid at ed G rou p 2017 $ 2016 $ Current Annual licence and maintenance in advance 1,462,870 1,471,764 Non-Current Annual licence and maintenance in advance 46,218 - A n n u a l l i c e n c e a n d m a i nte n a n c e i n a d va n ce r eve n u e c o m p r i s e s fe e s fo r t h e r i g ht to u s e o u r s o f t w a r e, m i n o r f i x e s , r i g ht s to u p d a te d ve r s i o n s a n d l i m i te d h e l p l i n e s u p p o r t. T h e s e a r e i nvo i c e d u p to 12 m o nt h s i n a d va n c e. T h e r eve n u e i s r e c o g n i s e d m o nt h l y a s t h e s e r v i c e s a r e 1, 509, 088 1, 471, 764 p r ov i d e d to c l i e nt s . 15. CO NT R I B UT ED EQ UI T Y C on s ol id at ed Gr o up 2017 Nu m be r 2017 $ 2016 Nu mb er 2016 $ Issued and paid up c ap ital 33, 354, 995 20, 836, 242 32, 846, 662 20, 728,7 42 Ordinary shares Opening balance Add: Shares issued for the purchase of the medical software assets of Abaki Pty Ltd 32,846,662 20,728,742 32,659,758 20,656,242 208,333 62,500 146,904 62,500 Add: Shares issued under Exempt Employee Share Plan - - 40,000 10,000 Add: Shares issued from exercise of options 300,000 45,000 - - Total number of shares o n issu e 33, 354, 995 20, 836, 242 32, 846, 662 20, 728,7 42 61 a . ORDI NARY SHARES T h e h o l d e r s o f o r d i n a r y s h a r e s a r e e nt i t l e d to r e c e i ve d i v i d e n d s a s t h ey a r e d e c l a r e d f r o m t i m e to t i m e a n d a r e e nt i t l e d to o n e vote p e r s h a r e a t t h e s h a r e h o l d e r s m e et i n g . I n t h e eve nt o f w i n d i n g u p t h e C o m p a ny o r d i n a r y s h a r e h o l d e r s r a n k a f te r a l l ot h e r s h a r e h o l d e r s a n d c r e d i to r s a n d a r e f u l l y e nt i t l e d to a ny n et p r o c e e d s o f l i q u i d a t i o n . T h e r e i s n o p a r va l u e a t t r i b u te d to t h e s h a r e s o f t h e C o m p a ny. O n 2 A u g u s t 2 016 , 2 0 8 , 3 3 3 s h a r e s w e r e i s s u e d i n t h e s e c o n d i n s ta l l m e nt o f t h e A b a k i a c q u i s i t i o n . O n 9 F e b r u a r y 2 017, 3 0 0 , 0 0 0 o pt i o n s w e r e e x e rc i s e d a t a s t r i ke p r i c e o f $ 0 .15 p e r s h a r e ($ 4 5 , 0 0 0 ) b . OPTIONS T h e m ove m e nt i n t h e n u m b e r o f u n l i s te d o pt i o n s o n i s s u e t h r o u g h o u t t h e ye a r i s a s fo l l o w s : (i) $0. 15 options ex ercisable on o r be fo re 5 J u ly 20 17 Opening balance Issued Exercised Cancelled Closing balance (ii) $0. 65 options ex ercisable on o r be fo re 1 9 De ce m be r 2017 Opening balance Issued Exercised Cancelled Closing balance (iii ) $0. 75 options ex ercisable on o r be fo re 2 6 May 2019 Opening balance Issued Exercised Cancelled C on s ol id at ed Gr o up 2017 Nu mb er 201 6 Nu mbe r 300,000 - (300,000) - - 300,000 - - - 300, 0 00 530,000 690,000 - - - 530, 000 - - (160,000) 530, 0 00 300,000 300,000 - - - - - - Closing balance 300, 000 300, 0 00 (iv) $0. 65 options ex ercisable on o r be fo re 1 0 J un e 2020 Opening balance Issued Exercised Cancelled Closing balance (v ) $0. 75 options ex ercisable on o r be fo re 3 0 No ve m be r 201 9 Opening balance Issued Exercised Cancelled Closing balance 62 390,000 390,000 - - (80,000) 310, 000 - 400,000 - - 400, 000 - - - 390, 0 00 - - - - - (v i) $0. 75 options ex ercisable on o r be fo re 3 0 No ve m be r 202 1 Opening balance Issued Exercised Cancelled Closing balance TOTAL C on s o lid at ed G rou p 2017 Nu m be r 201 6 Nu m ber - 600,000 - - 600, 000 - - - - - 2, 140, 000 1, 520, 00 0 At t h e C o m p a ny A n n u a l G e n e r a l M e et i n g h e l d o n 2 9 N ove m b e r 2 016 , s h a r e h o l d e r s a p p r ove d t h e i s s u e o f : - 4 0 0 , 0 0 0 o pt i o n s w i t h a n e x p i r y d a te o f 3 0 N ove m b e r 2 019 a t a s t r i ke p r i c e o f $ 0 . 75 p e r s h a r e - 6 0 0 , 0 0 0 o pt i o n s w i t h a n e x p i r y d a te o f 3 0 N ove m b e r 2 0 21 a t a s t r i ke p r i c e o f $ 0 . 75 p e r s h a r e. O n 2 3 J u n e 2 017, d u e to t h e r e s i g n a t i o n o f a n e m p l oye e, 8 0 , 0 0 0 u n l i s te d e m p l oye e o pt i o n s w h i c h h a d n ot yet ve s te d , w e r e fo r fe i te d . c . CAPITAL MANAGEMENT M a n a g e m e nt co nt r o l s t h e ca p i ta l o f t h e G r o u p i n o r d e r to m a i nta i n a g o o d d e bt to e q u i t y r a t i o, p r ov i d e t h e s h a r e h o l d e r s w i t h a d e q u a te r et u r n s a n d e n s u r e t h a t t h e G r o u p ca n f u n d i t s o p e r a t i o n s a n d c o nt i n u e a s a g o i n g co n ce r n . T h e G r o u p’s d e bt a n d ca p i ta l co m p r i s e s o r d i n a r y s h a r e ca p i ta l , s u p p o r te d by f i n a n c i a l a s s et s . T h e r e a r e n o e x te r n a l l y i m p o s e d ca p i ta l r e q u i r e m e nt s . M a n a g e m e nt e f fe c t i ve l y m a n a g e s t h e G r o u p’s ca p i ta l by a s s e s s i n g t h e G r o u p’s f i n a n c i a l r i s k s a n d a d j u s t i n g i t s c a p i ta l s t r u c t u r e i n r e s p o n s e to c h a n g e s i n t h e s e r i s k s a n d i n t h e m a r ket. T h e s e r e s p o n s e s i n c l u d e t h e m a n a g e m e nt o f d e bt l eve l s , d i s t r i b u t i o n s to s h a r e h o l d e r s a n d s h a r e i s s u e s . T h e r e h a ve b e e n n o c h a n g e s i n t h e s t r a te g y a d o pte d by m a n a g e m e nt to c o nt r o l t h e ca p i ta l o f t h e G r o u p s i n c e t h e p r i o r ye a r. T h e g e a r i n g r a t i o s fo r t h e ye a r s e n d e d 3 0 J u n e 2 017 a n d 3 0 J u n e 2 016 a r e a s fo l l o w s : Gearing Ratios Borrowings Less Cash and Cash Equivalents Net Debt Total e quity Total c apital Gearing Ratio C on s ol id at ed Gr o up 2017 Nu mb er 2016 Nu m be r 1,468,760 (2,543,412) (1,074,652) 4, 861, 711 3, 787, 059 (28% ) 1,741,219 (1,149,028) 592,191 3, 645, 258 4, 237, 449 14% 63 16. R ES ER VES a . CURRENCY TRANSLATION RE SER VE T h e fo r e i g n c u r r e n c y t r a n s l a t i o n r e s e r ve r e c o r d s t h e fo r e i g n c u r r e n c y d i f fe r e n c e s a r i s i n g f r o m t h e t r a n s l a t i o n o f fo r e i g n o p e r a t i o n s . Reconciliation of c urrency t ra n s lat io n r e s e r ve Balance at beginning of financial year Exchange differences on translation of foreign operations Balanc e at the end of the fi na n ci al ye a r C on s ol id at ed Gr o up 2017 $ 30,485 (6,251) 24, 234 2016 $ 49,278 (18,793) 30, 485 b . OPTION RESERVE T h e o pt i o n r e s e r ve r e c o r d s i te m s r e c o g n i s e d a s e x p e n s e s o n va l u a t i o n o f e m p l oye e s h a r e o pt i o n s . Reconciliation o f opt ion r e se rv e Balance at beginning of financial year Share based payment expense C on s ol id at ed Gr o up 2017 $ 29,978 50,867 2016 $ 29,978 - Balanc e at the end of the fi na n ci al ye a r 80, 845 29, 978 17. A CCUMU LA TE D L OSSES C on s o lid at ed G rou p 2017 $ 2016 Res t at ed $ Accumulated losses at the beginning of the financial year (17,144,355) (17,250,416) Net profit attributable to the members of the parent entity Dividends paid 1,728,369 (663,700) 106,061 - Accumulated lo sses at the en d of t h e f in a n cia l ye a r (16, 079, 686) (17, 144, 355) 18. N ON - CO NT R OLLI NG INT EREST G l o b a l H e a l t h L i m i te d h a s a 9 3 . 8 % (2 016: 9 3 . 8 %) i nte r e s t i n t h e s u b s i d i a r y Wo r k i n g Sy s te m s S o l u t i o n s (M a l a y s i a) S d n B h d . Reta i n e d e a r n i n g s a t t r i b u ta b l e to t h e n o n - co nt r o l l i n g i nte r e s t a r e a s fo l l o w s : 64 Balance at the beginning of t he f in an c ia l ye ar Non-controlling interests attributable to this entity is as follows: - share of profit/(loss) - share of currency translation reserve Balance at the e nd of t he fin a n c ia l yea r C on s ol id at ed Gr o up 2017 $ 408 (324) (8) 76 2016 Res t at ed $ (1, 512) 1,884 36 408 19. P AR T I CULA RS I N REL ATION T O C ONTROL L E D E NTITIE S G l o b a l H e a l t h L i m i te d , i n c o r p o r a te d i n A u s t r a l i a , i s t h e u l t i m a te p a r e nt e n t i t y. I t s l e g a l fo r m i s a p u b l i c c o m p a ny a n d t h e C o m p a ny i s d o m i c i l e d i n V i c to r i a . U n l e s s s ta te d ot h e r w i s e, a l l s u b s i d i a r i e s p r i n c i p a l a c t i v i t y i s t h e s a l e a n d s u p p o r t o f a p p l i ca t i o n s o f t w a r e fo r t h e h e a l t h ca r e s e c to r. Controlled Entity Plac e o f In co rp or at io n T ype of Se cu r ity I n te re s t 2017 I n te re st 2016 Global Health (Australia) Sdn Bhd Kuala Lumpur Working Systems Solutions (Malaysia) Sdn Bhd Kuala Lumpur Working Systems Solutions Pty Ltd Victoria Uni U International Pty Ltd Western Australia Working Systems Solutions (Singapore) Pte Ltd Singapore Bourke Johnston Systems Pty Ltd Victoria Working Systems Software Pty Ltd Western Australia Statewide Unit Trust Western Australia Ordinary Shares Ordinary Shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Units 100% 100% 94% 94% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 65 20. F IN AN CI AL IN ST RU ME NTS AND RIS K M ANAGE ME NT T h e G r o u p’s f i n a n c i a l i n s t r u m e nt s c o n s i s t p r i m a r i l y o f t r a d e r e c e i va b l e s , t r a d e p a ya b l e s a n d b o r r o w i n g s . T h e G r o u p d o e s n ot h a ve s i g n i f i ca nt r i s k e x p o s u r e to f i n a n c i a l i n s t r u m e nt s a n d a s s u c h r i s k e x p o s u r e s a r e g e n e r a l l y m a n a g e d a s p a r t o f t h e G r o u p’s ove r a l l s t r a te g i c a n d o p e r a t i o n a l r i s k m a n a g e m e nt s t r a te g i e s . C o n s e q u e nt l y, t h e r e i s c u r r e n t l y n o s p e c i f i c r i s k m i t i g a t i n g te c h n i q u e s e m p l oye d . H o w eve r, a s t h e G r o u p e x p a n d s b ot h d o m e s t i ca l l y a n d i nte r n a t i o n a l l y, m a n a g e m e nt c o nt i n u e s to m o n i to r i t s e x p o s u r e a n d w i l l i m p l e m e nt s u i ta b l e p o l i c i e s w h e n d e e m e d n e c e s s a r y. T h e f i n a n c i a l i n s t r u m e nt s h e l d by t h e G r o u p a r e a s fo l l o w s : Financial Asset s Cash and cash equivalents Trade and other receivables Financial Liabilities Financial liabilities at amortised cost: Trade and other payables Borrowings C on s ol id at ed Gr o up 2017 $ 2016 $ 5 6 10 11 2,543,412 1,962,009 1,149,028 1,813,379 4, 505, 421 2, 962, 407 (1,079,282) (1,468,761) (1,395,768) (1,741,729) (2, 548, 042) (3, 137, 497) T h e G r o u p i s e x p o s e d to fo r e i g n c u r r e n c y f l u c t u a t i o n s d u e to l o a n a cc o u nt s b et w e e n r e l a te d e nt i t i e s b e i n g u n h e d g e d a n d r e q u i r i n g p a y m e nt i n A u s t r a l i a n d o l l a r a t a n u n d ete r m i n e d d a te i n t h e f u t u r e. a. CREDI T RISK C r e d i t r i s k r e fe r s to t h e r i s k t h a t t h e c o u nte r p a r t y w i l l d e fa u l t o n i t s co nt r a c t u a l o b l i g a t i o n s r e s u l t i n g i n f i n a n c i a l l o s s to t h e G r o u p a n d e s s e n t i a l l y a r i s e s f r o m h o l d i n g s o f ca s h a n d d e p o s i t s , t r a d e r e c e i va b l e s a n d l o a n s r e ce i va b l e a s w e l l a s f r o m t h e p a r e nt ’s p ote nt i a l o b l i g a t i o n s u n d e r t h e i n d e m n i t y g u a r a nte e p r ov i d e d to b a n k s . T h e r i s k i s l a r g e l y m a n a g e d t h r o u g h a p o l i c y o f o n l y d e a l i n g w i t h c r e d i t w o r t hy c o u nte r p a r t i e s . Pe r i o d i c a s s e s s m e nt s o f d e bto r b a l a n ce s a r e u n d e r ta ke n a n d p r ov i s i o n s fo r i m p a i r m e nt a r e r e c o g n i s e d w h e r e a p p r o p r i a te. M a x i m u m e x p o s u r e to c r e d i t r i s k w i t h o u t ta k i n g a cc o u nt o f a ny c o l l a te r a l h e l d o r ot h e r c r e d i t e n h a n c e m e nt s a r i s i n g f r o m t h e G r o u p’s r e c o g n i s e d f i n a n c i a l a s s et s i s co n s i d e r e d to b e e q u i va l e nt to t h e i r ca r r y i n g va l u e s a t r e p o r t i n g d a te. M a x i m u m e x p o s u r e s a r i s i n g f r o m t h e i n d e m n i t y g u a r a nte e a r e a s d i s c l o s e d a t N ote 2 4: C o m m i t m e nt s a n d C o nt i n g e n c i e s . T h e G r o u p d o e s n ot h a ve a ny s i g n i f i ca nt c r e d i t r i s k e x p o s u r e to a ny s i n g l e c o u nte r p a r t y o r g r o u p s o f c o u nte r p a r t i e s h a v i n g s i m i l a r c h a r a c te r i s t i c s . T h e m a j o r i t y o f c u s to m e r s h a ve l o n g s ta n d i n g b u s i n e s s r e l a t i o n s h i p s w i t h t h e G r o u p a n d t h e i r c r e d i t q u a l i t y w i t h r e s p e c t to t r a d e r e c e i va b l e s i s a s s e s s e d a s h i g h . A l l ca s h a n d ca s h e q u i va l e nt s a r e h e l d w i t h l a r g e r e p u ta b l e f i n a n c i a l i n s t i t u t i o n s w i t h i n A u s t r a l i a , M a l a y s i a a n d S i n g a p o r e a n d t h e r e fo r e c r e d i t r i s k i s c o n s i d e r e d ve r y l o w. 66  Cash at Bank and deposits Australian banks Malaysian banks b . LIQUIDI TY RISK C on s o lid at ed G rou p 2017 $ 2,529,019 13,791 2016 $ 1,145,451 3,577 2, 542, 810 1, 149, 028 L i q u i d i t y r i s k i s m a n a g e d t h r o u g h m o n i to r i n g c u r r e nt f u n d s a va i l a b l e, u n d r a w n fa c i l i t i e s a n d a nt i c i p a te d r e c ove r y o f r e ce i va b l e s a n d c o m p a r i n g w i t h f u t u r e f u n d i n g r e q u i r e m e nt s c o nta i n e d i n m a n a g e m e nt b u d g et s a n d fo r e ca s t s . I n t h i s r e g a r d , t h e t i m i n g o f e x p e c te d s et t l e m e nt o f l i a b i l i t i e s i s a l s o a n a l y s e d s o a s to m i n i m i s e r i s k w i t h r e s p e c t to o b l i g a t i o n s b e c o m i n g p a s t d u e. T h i s i s c o n s i s te nt w i t h t h e p r i o r ye a r. T h e m a t u r i t y p r o f i l e o f t h e G r o u p’s f i n a n c i a l l i a b i l i t i e s i s p r e s e nte d i n t h e fo l l o w i n g ta b l e b a s e d o n c o nt r a c t u a l m a t u r i t y d a te s a n d r e p r e s e nt u n d i s c o u nte d ca s h f l o w s . 1 to 5 ye ar s Ove r 5 yea rs Group 30 June 2017 Wit hin 1 yea r $ Financial liabilities due for payment Trade and Other Payables (1,079,282) $ - Borrowings (389,880) (1,078,880) Total expected out flo ws (1,469, 162) (1, 078, 880) Financial assets – cash flows realisable Cash and cash equivalents Trade and other receivables 2,543,412 1,821,098 - 140,911 Total anticipat ed inflo w o n financial instr ument s 4,364, 510 140, 911 Net inflow on financial instruments 2,895,348 (937,969) $ - - - - - - - Group 30 June 2016 Wit hin 1 yea r 1 to 5 ye ar s Ove r 5 yea rs $ $ Financial liabilities due for payment Trade and Other Payables (1,145,768) (250,000) Borrowings (355,351) (1,386,378) Total expected out flo ws (1,501, 119) (1, 636, 378) Financial assets – cash flows realisable Cash and cash equivalents Trade and other receivables Total anticipat ed inflo w o n financial instr ument s Net inflow/(outflow) on financial instruments 1,149,028 1,536,734 - 276,645 2,685, 762 276, 645 1,184,643 (1,359,733) $ - - - - - - - 67 T ot a l c on t ra ct ed c as h f low s $ (1,079,282) (1,468,760) (2, 548, 042) 2,543,412 1,962,009 4, 505, 421 1,957,379 T ot a l c on t ra ct ed c as h f low s $ (1,395,768) (1,741,729) (3, 137, 497) 1,149,028 1,813,379 2, 962, 407 (175,090) c . MARKET RISK T h e G r o u p i s e x p o s e d to i nte r e s t r a te a n d fo r e i g n c u r r e n c y r i s k . ( i ) I n t e r e s t r a t e r i s k T h e G r o u p h a s e x p o s u r e to va r i a b l e i n te r e s t r a te s o n m o n i e s t h a t a r e ke pt i n a t - c a l l b a n k a cco u nt s . F o r s e n s i t i v i t i e s r e l a t i n g to i nte r e s t r a te r i s k , r e fe r to p a r a g r a p h ( i i i ) b e l o w. ( i i ) F o r e i g n exc h a n g e r i s k T h e G r o u p co nt r o l s s u b s i d i a r i e s i n M a l a y s i a a n d S i n g a p o r e a n d p a r t i c i p a te s i n a j o i nt ve nt u r e i n M a l a y s i a . T h e G r o u p i s t h e r e fo r e e x p o s e d to fo r e i g n e x c h a n g e r i s k a r i s i n g f r o m e x p o s u r e to c u r r e n c i e s o f t h e s e r e s p e c t i ve c o u nt r i e s . S u c h r i s k a r i s e s f r o m f u t u r e t r a n s a c t i o n s a n d a s s et s a n d l i a b i l i t i e s t h a t a r e d e n o m i n a te d i n f u n c t i o n a l c u r r e n c i e s ot h e r t h a t t h e A u s t r a l i a n d o l l a r. M a n a g e m e nt d o e s n ot e n g a g e i n a n a c t i ve p r o g r a m o f h e d g i n g e x p o s u r e to fo r e i g n c u r r e n c i e s . T h e e x p o s u r e to fo r e i g n c u r r e n c y r i s k a t r e p o r t i n g d a te i s r e p r e s e nte d by t h e fo l l o w i n g b a l a n c e s : Assets denominated in foreign currency Liabilities denominated in foreign currency Net exposure t o foreign curr en c y C on s o lid at ed G rou p 2017 2016 MY R 48,181 - - SG D - - - MY R 100,911 (24,287) 76, 624 SG D 12,889 (7,484) 5, 405 F o r s e n s i t i v i t i e s r e l a t i n g to fo r e i g n c u r r e n c y r i s k , r e fe r to p a r a g r a p h ( i i i ) b e l o w. ( i i i ) S e n s i t i v i t y A n a l y s i s I n t e r e s t R a t e R i s k a n d F o r e i g n C u r r e n c y R i s k T h e fo l l o w i n g s e n s i t i v i t y a n a l y s i s d e m o n s t r a te s t h e e f fe c t o n t h e c u r r e nt ye a r r e s u l t s a n d e q u i t y w h i c h c o u l d r e s u l t f r o m a r e a s o n a b l y p o s s i b l e c h a n g e i n i nte r e s t r a te a n d fo r e i g n c u r r e n c y r i s k s . T h e a n a l y s i s i s i n d i ca t i ve o n l y a n d a s s u m e s t h a t t h e m ove m e nt i n t h e p a r t i c u l a r va r i a b l e i s i n d e p e n d e n t o f t h e ot h e r va r i a b l e s a n d t h a t a l l ot h e r va r i a b l e s r e m a i n e d c o n s ta n t. C on s ol id at ed Gr o up 2017 $ +/-11,000 +/-2,500 2016 $ +/-200 +/-0 +/-11,000 +/-2,500 +/-200 +/-28,000 Change in pr ofit after t ax +/- 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% 68 ( i v) C a p i t a l R i s k M a n a g e m e n t M a n a g e m e nt co nt r o l s t h e ca p i ta l o f t h e G r o u p i n o r d e r to m a i nta i n a g o o d d e bt to e q u i t y r a t i o, p r ov i d e t h e s h a r e h o l d e r s w i t h a d e q u a te r et u r n s a n d e n s u r e t h a t t h e G r o u p c a n f u n d i t s o p e r a t i o n s a n d c o nt i n u e a s a g o i n g co n ce r n . T h e G r o u p’s d e bt a n d ca p i ta l co m p r i s e s o r d i n a r y s h a r e ca p i ta l s u p p o r te d by f i n a n c i a l a s s et s . T h e G r o u p d o e s n ot c u r r e nt l y h a ve s i g n i f i ca nt d e bt ca p i ta l e m p l oye d i n t h e b u s i n e s s . T h e r e a r e n o e x te r n a l l y i m p o s e d c a p i ta l r e q u i r e m e nt s . F a i r va l u e e s t i m a t i o n T h e fa i r va l u e s o f f i n a n c i a l a s s et s a n d f i n a n c i a l l i a b i l i t i e s a r e a s p r e s e nte d i n t h e c o n s o l i d a te d s ta te m e nt o f f i n a n c i a l p o s i t i o n . F a i r va l u e s a r e t h o s e a m o u nt s a t w h i c h a n a s s et c o u l d b e e x c h a n g e d , o r a l i a b i l i t y s et t l e d , b et w e e n k n o w l e d g e a b l e, w i l l i n g p a r t i e s i n a n a r m’s l e n g t h t r a n s a c t i o n . F a i r va l u e s d e r i ve d m a y b e b a s e d o n i n fo r m a t i o n t h a t i s e s t i m a te d o r s u b j e c t to j u d g m e nt, w h e r e c h a n g e s i n a s s u m pt i o n s m a y h a ve a m a te r i a l i m p a c t o n t h e a m o u nt s e s t i m a te d . T h e n et fa i r va l u e o f ca s h a n d c a s h e q u i va l e nt s a n d n o n i nte r e s t b e a r i n g m o n eta r y f i n a n c i a l a s s et s a n d f i n a n c i a l l i a b i l i t i e s o f t h e G r o u p a p p r o x i m a te s t h e i r ca r r y i n g a m o u nt s . T h e ca r r y i n g va l u e l e s s i m p a i r m e nt p r ov i s i o n o f t r a d e r e c e i va b l e s a n d p a ya b l e s a r e a s s u m e d to a p p r o x i m a te t h e i r fa i r va l u e s d u e to t h e i r s h o r t te r m n a t u r e. 2017 2016 Net C ar ryin g Va lue $ Ne t Fa ir valu e $ Ne t C ar ryin g Va lue $ Ne t Fa ir valu e $ Financial assets Cash and cash equivalents 2,543,412 2,543,412 1,149,028 1,149,028 Trade and other receivables 1,962,009 1,962,009 1,813,379 1,813,379 Total financial asse t s 4, 505, 421 4, 505, 421 2, 962, 407 2, 962, 407 Financial liabilitie s Trade and other payables (1,079,282) (1,079,282) (1,395,768) (1,395,768) Borrowings (1,468,761) (1,468,761) (1,741,729) (1,741,729) Total financial liabilit ies (2, 548, 043) (2, 548, 043) (3, 137, 497) (3, 137, 497) 69 21. S H AR E- BAS E D PA Y ME NT S a . EMPLOYEE SHARE OPT ION P LA N T h e E m p l oye e S h a r e O pt i o n P l a n w a s a d o pte d w h e n t h e C o m p a ny w a s l i s te d . T h e p l a n a l l o w s t h e C o m p a ny to g r a n t o pt i o n s ove r s h a r e s to key e x e c u t i ve s a n d d i r e c to r s a n d ot h e r e m p l oye e s a s s e l e c te d by t h e D i r e c to r s to e n a b l e t h e m to p a r t i c i p a te i n t h e f u t u r e g r o w t h a n d p r o f i ta b i l i t y o f t h e C o m p a ny, to p r ov i d e a n i n c e nt i ve a n d r e w a r d fo r t h e i r c o nt r i b u t i o n s a n d to a t t r a c t a n d m a i nta i n p e r s o n n e l . T h e o pt i o n s a r e i s s u e d a t n o co n s i d e r a t i o n . T h e e x e r c i s e p r i ce o f o pt i o n s i s b a s e d o n t h e w e i g hte d a ve r a g e m a r ket p r i c e o f t h e C o m p a ny’s S h a r e s d u r i n g t h e f i ve t r a d i n g d a y s u p to a n d i n c l u d i n g t h e d a te o f g r a nt o f t h e o pt i o n o r s u c h ot h e r d a te o r p e r i o d a s t h e D i r e c to r s c o n s i d e r a p p r o p r i a te. O pt i o n s ve s t o n e - t h i r d e a c h ye a r ove r t h r e e ye a r s f r o m t h e g r a nt d a te a n d h a ve a n e x p i r y d a te o f f i ve ye a r s f r o m t h e g r a nt d a te. T h e p a r e nt e nt i t y h a s a d o pte d t w o i n c e nt i ve p l a n s to e n a b l e e m p l oye e s a n d d i r e c to r s to p a r t i c i p a te i n o w n e r s h i p o f G l o b a l H e a l t h L i m i te d . T h e d i r e c to r s h a ve d ete r m i n e d t h a t t h e tota l n u m b e r o f s e c u r i t i e s w h i c h m a y b e i s s u e d p u r s u a nt to t h e E x e m pt E m p l oye e S h a r e P l a n a n d E m p l oye e S h a r e O pt i o n P l a n i n a ny f i ve - ye a r p e r i o d m u s t n ot e x c e e d 5 % o f t h e tota l n u m b e r o f s e c u r i t i e s o n o f fe r f r o m t i m e to t i m e. T h i s l i m i ta t i o n o n l y a p p l i e s to n e w o f fe r s o f s e c u r i t i e s by t h e p a r e nt e nt i t y a n d n ot to e x i s t i n g s e c u r i t i e s p u rc h a s e d o n m a r ket u n d e r t h e E x e m pt E m p l oye e S h a r e P l a n . T h e o pt i o n s i s s u e d u n d e r t h e E S O P a r e n ot q u ote d o n t h e A u s t r a l i a n Sto c k E x c h a n g e. E m p l oye e S h a r e O pt i o n s a r e i s s u e d u n d e r t h e te r m s a n d co n d i t i o n s o f t h e P l a n a s d i s c l o s e d o n t h e C o m p a ny’s w e b s i te. S h o u l d a n e m p l oye e c e a s e e m p l oy m e nt b e fo r e t h e c o m p l et i o n o f t w o ye a r s a f te r t h e i s s u e o f a ny e m p l oye e o pt i o n , t h e o pt i o n i s s u e d a u to m a t i ca l l y l a p s e s , e x ce pt w h e r e c e s s a t i o n i s d u e to d e a t h o r tota l p e r m a n e nt d i s a b i l i t y, r et i r e m e nt, r e d u n d a n c y o r a ny ot h e r r e a s o n , b a s e d o n w h i c h t h e d i r e c to r s b e l i eve i s fa i r a n d r e a s o n a b l e to w a r r a nt t h e e m p l oye e m a i nta i n i n g t h e i r r i g ht to e x e rc i s e t h e o pt i o n i n w h i c h ca s e t h ey w i l l h a ve s i x (6) m o nt h s to e x e r c i s e t h e o pt i o n s . Opening balance Issued Exercised Forfeited Closing balanc e C on s o lid at ed G rou p 2017 Nu m be r 1, 520, 000 1,000,000 (300,000) (80,000) 2, 140, 000 2016 Nu mb er 1, 680, 000 - - (160,000) 1, 520, 000 D u r i n g t h e f i n a n c i a l ye a r a n d u p to t h e d a te o f t h e s e a cc o u nt s , 1, 0 0 0 , 0 0 0 o pt i o n s w e r e i s s u e d (2 016: n i l). T h e fa i r va l u e o f t h e 1, 0 0 0 , 0 0 0 o pt i o n s i s s u e d d u r i n g t h e ye a r w a s d ete r m i n e d u s i n g t h e B l a c k S c h o l e s va l u a t i o n m o d e l o n g r a n t d a te b a s e d o n t h e fo l l o w i n g i n p u t s . 70 Grant date Ve sting date Share price at valuat ion date Exe rc is e Pr ice Exp ec t ed vo lat ility Ris k f r ee in te re s t ra t e F air va lue at gr an t date (p er o pt io n) 19 December 30 November $0.49 2016 2021 19 December 30 November $0.49 2016 2019 $0.75 $0.75 40% 40% 3.00% 3.00% $0.1269 $0.0789 H i s to r i ca l vo l a t i l i t y h a s b e e n t h e b a s i s fo r d ete r m i n i n g e x p e c te d s h a r e p r i c e vo l a t i l i t y a s i t i s a s s u m e d t h a t t h i s i s i n d i ca t i ve o f f u t u r e m ove m e nt s . T h e m a r ket p r i c e o f t h e o r d i n a r y s h a r e s o f G l o b a l H e a l t h L i m i te d w a s $ 0 . 3 2 o n 3 0 J u n e 2 017 (2 016: $ 0 . 4 2). S et o u t b e l o w a r e s u m m a r i e s o f o pt i o n s g r a nte d u n d e r t h e p l a n: CONSOLIDATE D AND PAR EN T ENTITY - 20 17 Grant D a te Expir y D a te Exercise Price 5 July 2013 5 Jul 2017 19 Dec 2013 19 Dec 2017 26 May 2014 26 May 2019 10 Jun 2016 10 Jun 2020 19 Dec 2016 30 Nov 2019 19 Dec 2016 30 Nov 2021 $0.15 $0.65 $0.75 $0.65 $0.75 $0.75 Balance at start of the year Number 300,000 530,000 300,000 390,000 - - Gr an t ed du r in g t he yea r Nu m be r Exe rc is ed du r in g th e yea r Nu m be r Exp ire d/ f or f eit ed du r in g t he yea r Nu m be r Bala n ce at th e e nd of t he yea r Nu mb er Exerc isabl e at th e e nd o f th e ye ar Number - - - - 400,000 600,000 (300,000) - - - - - - - - (80,000) - - - 530,000 300,000 310,000 400,000 600,000 - 530,000 300,000 260,000 133,333 120,000 TOTALS 1,5 20,000 1, 000, 000 (300, 000) (80, 000) 2, 140, 000 1, 34 3, 33 3 We ig hted average e xer cise p ric e $0.57 $0. 75 $0. 15 $0. 65 $0. 71 $ 0.6 7 We ig hted average share pric e $0.3916 CONSOLIDATED AND PARENT EN TITY - 2 016 Grant D ate Expiry Date Exercise Price 5 Jul 2013 5 Jul 2017 19 Dec 2013 19 Dec 2017 26 May 2014 26 May 2019 10 Jun 2016 10 Jun 2020 $0.15 $0.65 $0.75 $0.65 TOTALS We ig hted average e xer cise p ric e Balanc e at start of the year Number 300,000 690,000 300,000 390,000 1,680,000 $0.58 We ig hted average share pric e $0.2971 Gr an t ed du r in g t he yea r Nu mb er Exe rc is ed du r in g th e yea r Nu mb er - - - - - - - - - - - - Exp ire d/ f or f eit ed du r in g t he yea r Nu m be r - (160,000) - - Bala n ce at th e e nd of t he yea r Nu mb er 300,000 530,000 300,000 390,000 Exerc isabl e at th e e nd o f th e ye ar Number 200,000 380,000 200,000 130,000 (160, 000) 1, 520, 000 9 10 ,00 0 $0. 65 $0. 57 $ 0.5 6 71 b . EXEMPT EMPLOYEE SHARE PL AN (‘EE S P’) A p l a n u n d e r w h i c h s h a r e s m a y b e i s s u e d by t h e C o m p a ny to e m p l oye e s fo r n o ca s h c o n s i d e r a t i o n w a s a d o pte d w h e n t h e C o m p a ny w a s l i s te d . A l l d i r e c to r s , o f f i c e r s o r e m p l oye e s w h o a r e f r o m t i m e to t i m e e n g a g e d i n f u l l o r p a r t t i m e w o r k fo r t h e C o m p a ny a r e e l i g i b l e to p a r t i c i p a te i n t h e E x e m pt E m p l oye e S h a r e P l a n . U n d e r t h e p l a n , e l i g i b l e e m p l oye e s m a y b e g r a nte d u p to $1, 0 0 0 w o r t h o f f u l l y p a i d o r d i n a r y s h a r e s i n t h e C o m p a ny fo r n o c a s h c o n s i d e r a t i o n . T h e m a r ket va l u e o f t h e s h a r e s w i l l b e m e a s u r e d a s t h e m a r ket p r i ce q u ote d fo r b u ye r s o f t h e C o m p a ny s h a r e s a t t h e c l o s e o f t r a d i n g o n t h e d a y i m m e d i a te l y p r e ce d i n g t h e d a te o f t h e o f fe r by t h e D i r e c to r s a s p u b l i s h e d by t h e A SX . O f fe r s u n d e r t h e p l a n a r e a t t h e d i s c r et i o n o f t h e C o m p a ny a n d t h e s h a r e s ca n n ot b e t r a n s fe r r e d o r a s s i g n e d by t h e h o l d e r w i t h i n t h e p e r i o d o f t h r e e ye a r s f r o m t h e d a te o f i s s u e o r t r a n s fe r to t h e h o l d e r u n l e s s t h e h o l d e r ce a s e s e m p l oy m e nt w i t h t h e C o m p a ny e a r l i e r t h a n t h a t d a te e x c e pt t h a t t h e h o l d e r m a y a t a ny t i m e t r a n s fe r a l l o r a ny o f h i s S h a r e s to h i s s p o u s e o r to a c o m p a ny t h e m a j o r i t y o f t h e i s s u e d s h a r e s i n w h i c h a r e b e n e f i c i a l l y o w n e d by h i m o r to a ny t r u s t t h a t t h e h o l d e r i s a b e n e f i c i a r y o f. D u r i n g t h e ye a r, n o s h a r e s w e r e i s s u e d u n d e r t h e p l a n (2 016: 4 0 , 0 0 0 s h a r e s a t $10 , 0 0 0 ) 22. KE Y MAN AGEME NT PE RSONNE L DIS C LOS U RE S a. DIRECTORS AND KEY MANAGEM ENT PER S ON NE L T h e fo l l o w i n g p e r s o n s w e r e D i r e c to r s a n d Key M a n a g e m e nt Pe r s o n n e l o f t h e C o m p a ny d u r i n g t h e f i n a n c i a l ye a r : M r S P y nt C h a i r m a n – I n d e p e n d e nt N o n - E x e c u t i ve M r M C h e r i a n C h i e f E x e c u t i ve O f f i c e r a n d M a n a g i n g D i r e c to r M r G S m i t h M r R K n o w l e s M s P B e e r e n s D i r e c to r – I n d e p e n d e nt N o n - E x e c u t i ve D i r e c to r – I n d e p e n d e nt N o n - E x e c u t i ve D i r e c to r – I n d e p e n d e nt N o n - E x e c u t i ve (a p p o i nte d 1 D e ce m b e r 2 016) M r P C u r i g l i a n o C o m p a ny S e c r eta r y a n d C h i e f F i n a n c i a l O f f i c e r (c e a s e d 2 8 D e c e m b e r 2 016) M r K J a ye s u r i a Te c h n o l o g y D e l i ve r y M a n a g e r b. KEY MANAGEMENT PERSONN EL CO MP ENS ATION Re fe r to t h e Re m u n e r a t i o n Re p o r t i n t h e D i r e c to r s’ Re p o r t fo r d eta i l s o f t h e r e m u n e r a t i o n p a i d o r p a ya b l e to e a c h m e m b e r o f t h e G r o u p’s Key M a n a g e m e nt Pe r s o n n e l fo r t h e ye a r e n d e d 3 0 J u n e 2 017.T h e tota l r e m u n e r a t i o n p a i d to Key M a n a g e m e nt Pe r s o n n e l o f t h e C o m p a ny a n d t h e G r o u p d u r i n g t h e ye a r a r e a s fo l l o w s : C on s ol id at ed Gr o up 2017 $ 653,661 6,624 101,350 2016 $ 689,538 6,957 64,163 761, 635 760, 658 Short-term employee benefits Other long-term benefits Post-employment benefits 72 S H AR E S T h e i nte r e s t o f key m a n a g e m e nt p e r s o n n e l a n d t h e i r r e l a te d e nt i t i e s i n s h a r e s o f t h e C o m p a ny a s a t 3 0 J u n e 2 017 a r e: Total number o f shares Nu m be r of s h ar es so ld Nu mb er of sh ar es ac qu ir ed Mr K Jayesuria 2017 4,000 4,000 2016 4,000 4,000 2017 2016 2017 2016 - - - - - - - - O P T I O N S T h e i nte r e s t o f Key M a n a g e m e nt Pe r s o n n e l a n d t h e i r r e l a te d e nt i t i e s i n o pt i o n s o f t h e C o m p a ny a s a t 3 0 J u n e 2 017 a r e: Total number of o pt ions Nu m be r of o pt io n gr an t ed du rin g th e yea r Nu mb er of op tion s e xer cis ed du rin g th e yea r Mr K Jayesuria 600,000 2017 2016 300,000 2017 300,000 600,000 300,000 300, 000 2016 2017 2016 - - - - - - 23. R EMU NER A TI ON O F AUD ITORS Amounts rece ived, or due a nd re c e ivab le b y t h e auditors of the ent ity for: - MSI Ragg Weir ( Australia) Auditing or reviewing the financial report Taxation services Shine Wing (Aust ra lia) C on s ol id at ed Gr o up 2017 $ 2016 $ - - 51,462 7,950 Auditing or reviewing the financial report 65,000 - - TY Teoh Int ernational (Malays ia ) [ Pa r t o f t h e MSI Group Allianc e] Auditing or reviewing the financial report of controlled entities Taxation services for controlled entities - J Wong and Associat es (Sin gap or e ) Auditing or reviewing the financial report 3,150 1,500 1,500 71, 150 3,174 1,474 1,482 65, 542 73 24. CO MMI TME NT S AN D CONTINGE NCIE S a . OPERA TI NG LEASE COMMITMEN TS C on s o lid at ed G rou p 2017 $ 2016 $ Future operating lease rentals n o t pr ovid e d fo r in t h e f in an c ial st ate m e n ts an d payable: Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years 162,725 547,156 - 162,725 709,881 - 809, 881 872, 606 T h e p a r e nt e nt i t y’s o p e r a t i n g l e a s e fo r t h e r e l o ca te d M e l b o u r n e o f f i c e c o m m e n c e d o n 14 J u l y 2 014 w i t h r e d u c e d f l o o r s p a c e i n t h e s a m e b u i l d i n g . T h e C o m p a ny s i g n e d o n fo r a l e a s e te r m o f 7 ye a r s . 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. C on s ol id at ed Gr o up 2017 $ 2016 $ 102,187 102,187 I n t h e o p i n i o n o f t h e D i r e c to r s , t h e G r o u p d i d n ot h a ve a ny c o nt i n g e n c i e s a s a t 3 0 J u n e 2 017. 74 25. EA R NI N GS P ER S HA RE C on s o lid at ed G rou p 2017 $ 2016 Restat ed $ The following re flects the inco me a n d s h ar e d at a u s e d in t h e c alc u lat io n s o f bas i c and diluted ear nings per share : Net profit/ (loss) attributable to owners of the parent Net profit / (loss) attributable to non-controlling interests 1,932,343 (324) Earnings used in calculating basic and diluted earnings per share 1,932,019 (106,061) 1,884 (107,945) Weighted average number of ordinary shares used in calculating basic earnings per share: Nu m be r of Sh a re s Nu m be r of Sh a re s 33,152,050 32,794,621 Weighted average number of ordinary shares used in calculating diluted earnings per share: 35,292,050 32,910,114 Basic earnings after tax per share (cents per share) Diluted earnings per share (after tax) Basic Earnings Per Share (before tax) Diluted Earnings Per Share (before tax) 26. S EGMENT INF OR MA TION 2017 c en ts 5.212 4.896 5.827 5.474 2016 c en ts (0.329) (0.327) (0.329) (0.327) O PE R AT I N G S E G M E N T S T h e G r o u p o p e r a te s i n t h e c o m p u te r te c h n o l o g y, s o f t w a r e a n d s e r v i c e s i n d u s t r y w i t h p a r t i c u l a r e m p h a s i s o n h e a l t h ca r e a n d a s s o c i a te d p r o fe s s i o n a l s e r v i c e s . T h e G r o u p h a s i d e nt i f i e d i t s o p e r a t i n g s e g m e nt s b a s e d o n t h e i nte r n a l r e p o r t s t h a t a r e r ev i e w e d a n d u s e d by t h e e x e c u t i ve m a n a g e m e nt te a m (‘ t h e c h i e f o p e r a t i n g d e c i s i o n m a ke r ’) i n a s s e s s i n g p e r fo r m a n c e a n d i n d ete r m i n i n g t h e a l l o ca t i o n o f r e s o u r ce s . T h e o p e r a t i n g s e g m e nt s a r e i d e nt i f i e d by m a n a g e m e nt b a s e d o n t h e n a t u r e o f t h e s e r v i c e p r ov i d e d . D i s c r ete f i n a n c i a l i n fo r m a t i o n a b o u t e a c h o f t h e s e o p e r a t i n g s e r v i c e l i n e s i s r e p o r te d to t h e e x e c u t i ve m a n a g e m e nt te a m o n a t l e a s t a m o nt h l y b a s i s . T h e r e p o r ta b l e s e g m e nt s a r e b a s e d o n a g g r e g a te d o p e r a t i n g s e g m e nt s d ete r m i n e d by t h e s i m i l a r i t y o f t h e s e r v i ce s p r ov i d e d , t h e s i m i l a r i t y o f t h e c u s to m e r b a s e s , t h e c o m m o n r e p o r t i n g a n d m a n a g e m e nt s y s te m s u s e d a n d t h e c o m m o n r e g u l a r i t y e nv i r o n m e nt a p p l i ca b l e to e a c h r e p o r ta b l e s e g m e nt. T h e r e i s a c l e a r d e s i g n a t i o n o f r e s p o n s i b i l i t y a n d a cc o u nta b i l i t y by t h e c h i e f o p e r a t i n g d e c i s i o n m a ke r s fo r t h e m a n a g e m e n t a n d p e r fo r m a n c e o f t h e s e r e p o r ta b l e s e g m e n t s . 75 T h e G r o u p co m p r i s e s t h e fo l l o w i n g m a i n o p e r a t i n g s e g m e nt s : • • • • Ac u te I n fo r m a t i o n s y s te m a p p l i ca t i o n s fo r t h e h o s p i ta l a n d d a y s u r g e r y m a r ket to d e l i ve r b et te r a n d m o r e i nte g r a te d h e a l t h ca r e. N o n - Ac u te C o m p r e h e n s i ve s u i te o f a p p l i ca t i o n s t h a t p r ov i d e t h e m a n a g e m e nt o f p o p u l a t i o n o u tc o m e s fo r c o m m u n i t i e s o f c o m m o n i nte r e s t. O t h e r P r o d u c t s a n d s e r v i c e s d e l i ve r e d to n o n - h e a l t h c a r e c u s to m e r s a n d i n c l u d e r eve n u e s a n d e x p e n s e s a s s o c i a te d w i t h t h i r d p a r t y p r o d u c t s a n d c o s t r e c ove r i e s f r o m c u s to m e r s . C o r p o r a te E x p e n d i t u r e a s s o c i a te d w i t h C o r p o r a te, S a l e s a n d M a r ket i n g a c t i v i t i e s . S E G M E N T ACCO U N T I N G P O L I C I E S T h e G r o u p g e n e r a l l y a c c o u n t s fo r i nte r- s e g m e n t s a l e s a n d t r a n s fe r s a s i f t h e s a l e s o r t r a n s fe r s w e r e to t h i r d p a r t i e s a t c u r r e nt m a r ket p r i c e s . Reve n u e s a r e a t t r i b u te d to g e o g r a p h i c a r e a s b a s e d o n t h e l o ca t i o n o f t h e a s s et s p r o d u c i n g t h e r eve n u e s . D u r i n g t h e f i n a n c i a l ye a r t h e r e w e r e n o c h a n g e s i n s e g m e nt a cc o u nt i n g p o l i c i e s t h a t h a d a m a te r i a l e f fe c t o n t h e s e g m e nt i n fo r m a t i o n . G E O G R A PH I C A L S E G M E N T S A l t h o u g h t h e G r o u p’s d i v i s i o n s a r e m a n a g e d o n a g l o b a l b a s i s t h ey o p e r a te i n t w o m a i n g e o g r a p h i ca l a r e a s : A u s t r a l i a T h i s i s t h e h o m e c o u nt r y o f t h e m a i n o p e r a t i n g e nt i t y. T h e c o r p o r a te h e a d o f f i ce i s b a s e d i n M e l b o u r n e, V i c to r i a w i t h a s m a l l n u m b e r o f e m p l oye e s a l s o l o ca te d i n ot h e r s ta te s i n A u s t r a l i a fo r t h e p r ov i s i o n o f p r o fe s s i o n a l s e r v i c e s a n d p r o d u c t d eve l o p m e nt. M a l a y s i a I n p r i o r ye a r s , t h e G r o u p o p e r a te d i n t h e A S E A N r e g i o n w i t h l o ca l r e s o u rc e s e m p l oye d to p r ov i d e s u p p o r t to S o u t h e a s t A s i a n c l i e nt s o f t h e G r o u p. C u r r e nt l y, t h e C o m p a ny’s c l i n i ca l s o f t w a r e, M a s te r C a r e E M R , i s u s e d by t h e M a l a y s i a n M i n i s t r y o f H e a l t h’s M E N TA R I c o m m u n i t y m e nta l h e a l t h p r o g r a m . T h e C o m p a ny, t h r o u g h i t s M a l a y s i a n d i s t r i b u to r, i s l o o k i n g to f u r t h e r i t s e n g a g e m e nt i n t h e m a r ket. I n p r e s e nt i n g i n fo r m a t i o n o n t h e b a s i s o f g e o g r a p h i ca l s e g m e nt s , s e g m e nt r eve n u e i s b a s e d o n t h e g e o g r a p h i ca l l o ca t i o n o f c u s to m e r s . S e g m e nt a s s et s a r e b a s e d o n t h e g e o g r a p h i ca l l o ca t i o n o f t h e a s s et s . 76 d e t a d i l o s n o C e t a r o p r o C r e h t O e t u c A - n o N e t u c A 6 1 0 2 7 1 0 2 6 1 0 2 7 1 0 2 6 1 0 2 7 1 0 2 6 1 0 2 7 1 0 2 6 1 0 2 7 1 0 2 0 5 4 , 9 9 1 , 5 1 8 1 , 0 0 3 , 5 0 5 4 , 9 9 1 , 5 1 8 1 , 0 0 3 , 0 1 - 0 0 0 , 0 0 0 , 5 - - - - 8 5 1 , 3 3 5 4 2 7 , 5 7 4 1 5 2 , 0 3 4 , 3 8 3 3 , 5 3 7 , 3 1 4 0 , 6 3 2 , 1 9 1 1 , 9 8 0 , 1 0 0 0 , 0 0 0 , 5 - - - - - - t n e m e l t t e s h t l a e H A S 0 0 0 , 0 0 0 , 5 8 5 1 , 3 3 5 4 2 7 , 5 7 4 1 5 2 , 0 3 4 , 3 8 3 3 , 5 3 7 , 3 1 4 0 , 6 3 2 , 1 9 1 1 , 9 8 0 , 1 e u n e v e r t n e m g e s l a t o T s t l u s e R 1 6 0 , 6 0 1 3 4 3 , 2 3 9 , 1 ) 4 4 0 , 8 4 9 , 1 ( 4 4 4 , 1 6 7 7 9 1 , 9 0 4 9 4 1 , 9 1 3 7 3 0 , 7 7 1 , 1 6 7 4 , 1 8 7 1 7 8 , 7 6 4 4 7 2 , 0 7 x a t r e t f a t fi o p r t n e m g e S 0 9 8 , 3 2 8 , 8 8 4 0 , 0 6 6 , 9 2 3 6 , 8 7 1 , 5 3 6 3 , 4 9 5 , 4 - - - - 3 1 8 , 4 0 9 8 4 0 , 7 6 8 5 1 4 , 1 2 8 , 5 4 8 9 , 7 0 8 , 6 2 6 6 , 7 9 0 , 2 6 1 0 , 5 8 9 , 1 3 2 0 , 1 3 5 2 7 3 , 2 1 4 7 1 5 , 6 1 4 , 3 8 0 9 , 7 3 2 , 3 2 9 0 , 1 3 2 , 1 3 8 0 , 4 4 9 3 4 0 , 2 6 2 1 2 0 , 6 6 2 - 1 8 3 , 7 1 9 - - - - 8 4 0 , 2 2 1 1 3 9 , 7 8 0 2 8 , 8 4 7 6 1 , 0 4 7 4 8 , 1 4 3 7 , 1 2 - 9 7 5 , 1 7 7 8 , 3 2 - 3 2 6 , 4 5 5 1 2 , 4 3 8 5 7 , 6 1 1 3 8 , 9 3 1 0 8 4 , 7 8 1 8 7 4 , 0 0 1 - 1 8 3 , 7 1 9 - 0 7 9 , 1 1 4 4 6 , 4 5 - t n e m g e s r e h t O : n o i t a m r o f n i s e i t i l i b a i l t n e m g e S s t e s s a t n e m g e S s e i t i l i b a i L s t e s s A n o i t i a c e p e D r n o i t a s i t r o m A t n e m r i a p m I d e t a d i l o s n o C l a n o i t a n r e t n I a i l a r t s u A g n i t r o p e R y r a d n o c e S 6 1 0 2 0 5 4 , 9 9 1 , 5 1 6 0 , 6 0 1 0 9 8 , 3 2 8 , 8 2 3 6 , 8 7 1 , 5 7 1 0 2 1 8 1 , 0 0 3 , 0 1 9 6 3 , 8 2 7 , 1 8 4 0 , 0 6 6 , 9 8 7 7 , 6 7 8 , 5 6 1 0 2 3 4 8 , 9 8 8 5 4 3 6 , 4 0 1 5 4 2 , 0 1 7 1 0 2 5 1 5 , 9 ) 1 8 9 , 7 3 ( 3 9 7 , 3 1 - 6 1 0 2 7 0 6 , 9 0 1 , 5 3 0 0 , 6 0 1 6 5 2 , 9 1 7 , 8 7 8 3 , 8 6 1 , 5 7 1 0 2 6 6 6 , 0 9 2 , 0 1 0 5 3 , 6 6 7 , 1 6 9 6 , 4 2 7 , 0 1 8 7 7 , 6 7 8 , 5 l a c i h p a r g o e G e u n e v e r t n e m g e S t l u s e r t n e m g e S s t e s s a t n e m g e S s e i t i l i b a i l t n e m g e S g n i t r o p e R y r a m i r P s t n e m g e S s s e n i s u B e u n e v e R e h t e d i s t u o s r e m o t s u c o t l s e a S y t i t n e d e t a d i l o s n o c 77 27. CO N SO LI DA TE D ST ATE ME NT OF C ASH FL OW S R E CO N C I L I AT I O N O F O PE R AT I N G PR O F I T/(LO S S) B E F O R E I N CO M E TA X TO N E T C A S H PROV I D E D BY O PE R AT I N G AC T I V I T I E S C on s ol id at ed Gr o up 2017 $ 2016 $ Operating profit/ (lo ss) be fore inc om e t a x 1, 932, 019 107, 945 Add /(deduct) non-cash items: Amortisation of Intangibles Depreciation of fixed assets Impairment of intangible assets Bad debt written off Employee share option expense Net loss/(gain) on disposal of plant and equipment 266,021 87,931 917,381 - 50,687 - 262,043 122,048 - 29,455 10,000 (100) Net cash inflow/ (out flo w ) fro m o p e r at in g a c t ivit ie s before change in asse ts and lia b ilit ie s 3, 254, 039 531, 391 Change in assets and liabilities during the period: (Increase)/decrease in trade and other receivables (Increase)/decrease in other assets Increase/(decrease) in provisions Increase/(decrease) trade and other payables (111,306) 700,749 (32,138) (260,065) (531,533) (263,263) (10,627) 805,730 Net cash inflow fr om opera t ing a ct ivit ie s 3, 551, 279 531, 698 28. EVE NT S S UB SEQU EN T TO RE PO RTING D ATE T h e r e h a ve b e e n n o s i g n i f i c a nt eve nt s s u b s e q u e nt to r e p o r t i n g d a te. 29. DI VI D ENDS N o p r ov i s i o n i s m a d e fo r d i v i d e n d s o n o r b e fo r e t h e e n d o f t h e ye a r. D u r i n g t h e ye a r t h e C o m p a ny d e c l a r e d a n d p a i d t w o s p e c i a l d i v i d e n d s o f 1 c e nt e a c h (2 016: n i l). D eta i l s o f d i v i d e n d s d e c l a r e d a n d o r p a i d: Div ide nd Det ails Sp ec ial Divid en d Sp ec ial Divid en d T OT AL Date dividend declared 14 Sep 2016 24 Feb 2017 Date dividend paid 25 Nov 2016 9 Mar 2017 Franked amount per share Unfranked amount per share Total per share - $0.01 $0. 01 - $0.01 $0. 01 - $0.02 $0. 02 Total value of dividend paid $330,150 $333,550 $663,700 78 30. GLO BA L H EA L TH LI M ITED PAR ENT COM PANY INFORM AT IO N Assets Current Assets Non-Current Assets Total Assets Liabi lities Current Liabilities Non-Current Liabilities Total Liabilities Glo ba l H ea lt h L im it ed 2017 $ 4,935,761 5,572,401 10,508,162 3,484,719 2,392,059 5,876,778 2016 $ 3,429,789 4,967,899 8,397,688 3,302,116 1,532,379 4,834,495 Net Ass ets/( Liabilities) 4, 631, 384 3, 563, 193 Equity Contributed equity Reserves Accumulated Losses Total Equity Financial Perfor ma nce Profit /(Loss) for the year Other comprehensive income Total Comprehe nsive income / ( los s ) 20,836,242 20,728,742 80,846 60,463 (16,285,704) (17,226,012) 4, 631, 384 3, 563, 193 1,766,025 - 1, 766, 025 87,268 - 87, 268 Other than that st at ed in Not e 24 to t h e fi n an ci al s t a t e m en ts , th e C o mpan y is n o t subject to any co ntinge nt liab ilit ies or c on t ra ct u a l co m m it me n t s 79 6. DIRE CTORS DECLARAT ION I n t h e o p i n i o n o f t h e D i r e c to r s o f G l o b a l H e a l t h L i m i te d (‘ t h e C o m p a ny’): 1. t h e f i n a n c i a l s ta te m e nt s a n d n ote s , s et o u t o n p a g e s 2 6 to 6 0 a r e i n a cc o r d a n c e w i t h t h e C o r p o r a t i o n s Ac t 2 0 01 i n c l u d i n g: i . g i v i n g a t r u e a n d fa i r v i e w o f f i n a n c i a l p o s i t i o n o f t h e c o n s o l i d a te d e nt i t y a s a t 3 0 J u n e 2 017 a n d o f i t s p e r fo r m a n c e, fo r t h e ye a r e n d e d o n t h a t d a te; i i . c o m p l y i n g w i t h Acc o u nt i n g Sta n d a r d s i n A u s t r a l i a a n d t h e C o r p o r a t i o n s Re g u l a t i o n s 2 0 01; i i i . i v. c o m p l y i n g w i t h I nte r n a t i o n a l Re p o r t i n g Sta n d a r d s a s d i s c l o s e d i n N ote 1; a n d t h e r e a r e r e a s o n a b l e g r o u n d s to b e l i eve t h a t t h e C o m p a ny w i l l b e a b l e to p a y i t s d e bt s a s a n d w h e n t h ey b e c o m e d u e a n d p a ya b l e. 2 . T h e D i r e c to r s h a ve b e e n g i ve n t h e d e c l a r a t i o n s r e q u i r e d by s e c t i o n 2 95 A o f t h e C o r p o r a t i o n s Ac t 2 0 01 f r o m t h e C h i e f E x e c u t i ve O f f i c e r a n d C h i e f F i n a n c i a l O f f i ce r fo r t h e ye a r e n d e d 3 0 J u n e 2 017. T h i s d e c l a r a t i o n i s m a d e i n a cco r d a n c e w i t h a r e s o l u t i o n o f t h e D i r e c to r s . O n b e h a l f o f t h e B o a r d S t eve n L e i g h P y n t N o n - E xe c u t i ve C h a i r m a n M e l b o u r n e, 2 8 S e p t e m b e r 2 017 80 7. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GLOBAL HEALTH LIMITED AND CONTROLLED ENTITIES Report on the Audit of the Financial Report Qualified Opinion We have audited the financial report of Global Health Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial performance for the year then ended; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Qualified Opinion The Group had not applied tax effective accounting in recognising current and deferred tax in prior periods, which constitutes a departure from Australian Accounting Standards. We were unable to obtain sufficient appropriate audit evidence on opening tax balances in respect of the comparative period ended 30 June 2016. Accordingly, we were unable to determine whether any adjustments were necessary on current and deferred tax in prior periods. We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. ShineWing Australia ABN 39 533 589 331. Liability limited by a scheme approved under Professional Standards Legislation. ShineWing Australia is an independent member of ShineWing International Limited – members in principal cities throughout the world. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section we have determined the matters described below to be the key audit matters to be communicated in our report. Key Audit Matter How the matter was addressed during the audit Valuation of Intangible Assets (Note 9) Our procedures included, amongst others: Australian Accounting Standards require the Group to undertake an impairment analysis of assets where impairment indicators are identified from internal and external sources of information. As at 30 June 2017, internal indicators were identified from management’s forecast with respect to certain underperforming intangible assets. We have determined this is a key audit matter due to the judgement required by management in preparing value in use models to satisfy the impairment test as prescribed in AASB 136 Impairment of Assets, including the forecasting of future cash flows and applying an appropriate discount rate which inherently involved a high degree of estimation and judgement by management.  Assessing the model for compliance with AASB 136 Impairment of Assets;  Assessing management’s determination of the cash generating units based on our understanding of the nature of intangible assets;  Analysing the future cash flows forecasts and understanding the process by which they were developed, including testing the underlying calculations of the models and reasonableness of key assumptions;  We performed sensitivity analysis on the key assumptions and variables to determine various outcomes of the value in use model and whether there were any significant impairment indicators; and  Assessed the adequacy of the Group’s disclosures within the financial statements. Capitalisation of Development Costs (Note 9) Our procedures included, amongst others: During the year, Global Health Ltd continued to capitalise development costs relating to internal software development projects. For internally generated intangible assets, the Australian Accounting Standards require certain conditions to be satisfied prior to development costs being capitalised. We have determined this is a key audit matter due to the judgement required by management to differentiate costs between the research phase and development phase. As at 30 June 2017, the Group had disclosed a carrying value of $4,817,920 relating to internal software development projects.  We checked the capitalisation process and status of current projects to obtain an understanding of the relevant procedures and control activities performed to appropriately capitalise development costs;  We enquired with management on significant transactions capitalised during the reporting period to determine the nature of the additions and whether this had been recognised in accordance with the relevant accounting standards;  We discussed with management business plans and examined post commercialisation revenue projections; and  We tested a sample of capitalised development costs for the year to source documentation and assessed whether the intangible asset recognition criteria had been satisfied for capitalisation. 2 Key Audit Matter How the matter was addressed during the audit Revenue Recognition (Note 2) Our procedures included, amongst others: The Group’ derives revenue from the provision of licences, maintenance fees and rendering of professional services. Some of these streams are dependent on project milestones being completed and also the subscription period of contracts. Revenue recognition from these streams can be complex and require judgement. Accordingly, the terms of the contracts and consequential revenue recognition has been identified as a key audit matter. In addition, Global Health Ltd had also settled a litigation case during the financial year concerning SA Health whereby Global Health had received $5m in compensation. Determining the appropriate revenue recognition of the compensation received and disclosures of the event were a key focus area to the audit.  We documented and tested processes and key internal controls in the revenue cycle (where applicable);  We considered the appropriateness of the accounting policy used to recognise revenue;  We checked sales transactions both sides of the balance sheet date for recognition in the appropriate year;  We selected a random sample of revenue transactions recorded during the year and traced to source documentation for reasonableness including an examination on the terms of the contract for appropriate revenue recognition;  We performed sales analytics against forecasts/prior year results (where applicable) to identify any sales anomalies;  We examined the legal settlement documents relating to the SA Health litigation and other relevant documentation to assess the appropriate revenue recognition of the compensation received; and  We checked the disclosures of the event and determined whether this was appropriately reflected in the financial statements. Other Matter The financial report of Global Health Ltd for the year ended 30 June 2016 was audited by another auditor who expressed an unmodified opinion on that report on 29 September 2016. Information Other than the Financial Report and Auditor’s Report Thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 3 Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. We conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 4 We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them, all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 15 to 17 of the directors’ report for the year ended 30 June 2017. In our opinion, the Remuneration Report of Global Health Limited the year ended 30 June 2017 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. ShineWing Australia Chartered Accountants Nick Michael Partner Melbourne, 28 September 2017 5 8. SHAREHOLDER IN FORMATION T h i s s h a r e h o l d e r i n fo r m a t i o n i s m a d e u p to 3 A u g u s t 2 017. 8.1. SHAREHOLDI NG 1. D i s t r i b u t i o n o f S h a r e h o l d e r N u m b e r s Cat e go ry (s ize o f h o lding ) Num ber of H old er s No. of S hares 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over TO TAL 446 317 92 120 31 1,006 189,582 768,315 720,503 3,961,350 27,715,245 33,354,995 2 . T h e n u m b e r o f s e c u r i t y i nve s to r s h o l d i n g l e s s t h a n a m a r keta b l e p a rce l o f 1, 4 3 0 s e c u r i t i e s ($ 0 . 3 5 p e r s h a r e o n 3 A u g u s t 2 017 ) i s 5 3 5 a n d t h ey h o l d 3 01, 4 0 0 s e c u r i t i e s . A n u n m a r keta b l e p a rc e l o f s h a r e s i s g e n e r a l l y a p a rc e l o f s h a r e s w i t h a tota l va l u e o f l e s s t h a n $ 5 0 0 . 3 . T h e n a m e s o f t h e t w e nt y l a r g e s t h o l d e r s o f o r d i n a r y s h a r e s a r e: Shareholder No. of s hares held % of is sued sh ares Micron Holdings Pty Ltd (Cherian Family Account) Micron Holdings Pty Ltd (Micron Holdings Pty Ltd Superfund A/c) Mrs Elizabeth May Priscilla Thomas Pacific Nominees Limited Alumootil Mathew Cherian Triglobal Management Limited Dadiaso Holdings Pty Ltd Dr Serene Lim B&R James Investments Pty LTd Mr David Leroy Boyles Connaught Consultants (Finance) Pty Ltd Damon Groenveld Roxanne Investments Pty Ltd Ms Serene Lim & Mr Nicholas Russell Ward Lomas Superannuation Pty Ltd Mr Rajiv Paramanathan Asket Pty Ltd Abaki Pty Ltd Chris Bell Investments Pty Ltd P Partnership Pacific Services Pty Limited Total top 20 holders 13,558,334 4,311,036 1,530,702 1,497,196 750,000 500,000 450,000 400,000 400,000 400,000 347,000 300,000 300,000 260,000 250,000 250,000 226,074 202,885 200,000 175,000 40.65 12.92 4.59 4.49 2.25 1.50 1.35 1.20 1.20 1.20 1.04 0.90 0.90 0.78 0.75 0.75 0.68 0.61 0.60 0.52 26,308,227 78.88% 8.2. SUBSTANTIAL SHA REHOLDER S Shareholder Micron Holdings Pty Ltd (Cherian Family Account) Micron Holdings Pty Ltd (Micron Holdings Pty Ltd Superfund A/c) No. of s hares Percentage 13,558,334 4,311,036 40.65% 12.92% 86 9. CORPORATE DIRECTORY D i r e c t o r s M r Steve n L e i g h P y nt ( I n d e p e n d e n t N o n - E x e c u t i ve C h a i r m a n) M r M a t h e w C h e r i a n (C h i e f E x e c u t i ve O f f i c e r a n d M a n a g i n g D i r e c to r ) M r G r a nt S m i t h ( I n d e p e n d e nt N o n - E x e c u t i ve D i r e c to r ) M r Ro b e r t K n o w l e s AO ( I n d e p e n d e nt N o n - E x e c u t i ve D i r e c to r ) M s Pa t t i e B e e r e n s ( I n d e p e n d e nt N o n - E x e c u t i ve D i r e c to r ) C o m p a n y S e c r e t a r y M r G l e n n F o w l e s H e a d O f f i ce L eve l 2 , 6 07 B o u r ke St r e et M e l b o u r n e, V i c to r i a 3 0 0 0 A u s t r a l i a Te l e p h o n e: + 61 (3 ) 9675 0 6 0 0 F a c s i m i l e: + 61 (3 ) 9675 0 69 9 E m a i l : i n fo @ g l o b a l - h e a l t h . c o m S h a r e R e g i s t r a r L i n k M a r ket S e r v i c e s L i m i te d To w e r 4 , 7 2 7 C o l l i n s St r e et M e l b o u r n e, V i c to r i a 3 0 0 8 , A u s t r a l i a Te l e p h o n e: 13 0 0 5 5 4 474 F a c s i m i l e: + 61 (3 ) 9615 9 8 4 8 We b s i te: w w w. g l o b a l - h e a l t h . c o m We b s i te: w w w. l i n k m a r ket s e r v i c e s . c o m . a u E m a i l : r e g i s t r a r s @ l i n k m a r ket s e r v i c e s . c o m . M a l a y s i a R e g i s t e r e d O f f i ce B -2 5 -2 , B l o c k B , J a ya O n e N o. 7 2 A J a l a n U n i ve r s i t i a u S o l i c i t o r s 4 62 0 0 Peta l i n g J a ya , S e l a n g o r D a r u l D a v i e s C o l l i s o n C a ve, M e l b o u r n e, E h s a n M a l a y s i a Te l e p h o n e: + 6 0 3 7 95 5 0 95 5 F a c s i m i l e: + 6 0 3 7 95 5 0 95 9 A u d i t o r s S h i n eW i n g A u s t r a l i a L eve l 10 , 5 3 0 C o l l i n s St r e et M e l b o u r n e, V I C 3 0 0 0 A u s t r a l i a Te l e p h o n e: + 61 3 8 6 3 5 18 0 0 F a c s i m i l e: + 61 3 810 2 3 4 0 0 A u s t r a l i a F i n l a y s o n s , Ad e l a i d e, A u s t r a l i a B a n ke r s B a n k o f We s te r n A u s t r a l i a Ltd A N Z B a n k Ltd H S B C Ltd S t o c k E xc h a n g e L i s t i n g G l o b a l H e a l t h L i m i te d s h a r e s t r a d e o n t h e A u s t r a l i a n Sto c k E x c h a n g e We b s i te: w w w. s h i n e w i n g . c o m . a u C o d e: G L H T h e h o m e e x c h a n g e i s A u s t r a l i a n Sto c k E x c h a n g e (M e l b o u r n e) L i m i te d F u r t h e r I n f o r m a t i o n F o r f u r t h e r i n fo r m a t i o n a b o u t G l o b a l H e a l t h L i m i te d a n d i t s o p e r a t i o n s , r e fe r to C o m p a ny a n n o u n c e m e nt s to t h e A u s t r a l i a n Sto c k E x c h a n g e. I n fo r m a t i o n i s a l s o a va i l a b l e o n o u r w e b s i te: w w w. g l o b a l - h e a l t h . c o m . 87 ASX: GLH ABN 75 091 377 892 GLOBAL HEALTH LIMITED AND CONTROLLED ENTITIES www.global-health.com/about-us/investor 

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