Global Health Limited
Annual Report 2018

Plain-text annual report

www .gl obal-health.com Annual Rep ort 2018 TAB LE O F CO NTE NT S 1. R E V I E W O F O PE R AT I O N S 1.1. C H A I R M A N ’ S L E T T E R 1. 2 . C H I E F E X E C U T I V E O F F I C E R ’ S O P E R AT I O N S R E P O R T 1. 3 . F I N A N C I A L S U M M A RY 2 . D I R E C TO R S’ R E PO R T 2 .1. D I R E C TO R S 2 . 2 . CO M PA N Y S E C R E TA RY 2 . 3 . M E E T I N G O F D I R E C TO R S A N D C O M M I T T E E S 2 . 4 . D I R E C TO R S’ I N T E R E S T S 2 . 5 . P R I N C I PA L AC T I V I T I E S 2 . 6 . R E S U LT S A N D D I V I D E N D S 2 . 7. R E V I E W O F O P E R AT I O N S 2 . 8 . S I G N I F I C A N T C H A N G E S I N T H E S TAT E O F A F FA I R S 2 . 9. S I G N I F I C A N T E V E N T S A F T E R R E P O R T I N G DAT E 2 .10 . L I K E LY D E V E LO PM E N T S 2 .11. S H A R E O P T I O N S 2 .12 . R E M U N E R AT I O N R E P O R T ( AU D I T E D ) 2 .13 . I N D E M N I F I C AT I O N O F D I R E C TO R S A N D E X E C U T I V E S 2 .14 . P R O C E E D I N G S O N B E H A L F O F T H E C O M PA N Y 2 .15 . N O N - AU D I T S E R V I C E S 2 .16 . E N V I R O N M E N TA L I S S U E S 2 .17. CO R P O R AT E G OV E R N A N C E 2 .18 . AU D I TO R S’ I N D E P E N D E N C E D E C L A R AT I O N 3 . CO R PO R AT E G OVE R NAN CE S TAT E M E N T 3 .1. CO M P O S I T I O N O F T H E B OA R D 3 . 2 . B OA R D M E M B E R S 3 . 3 . B OA R D R E S P O N S I B I L I T I E S 3 . 4 . N O N - E X E C U T I V E D I R E C TO R S’ I N D E P E N D E N C E 3 . 5 . T R A D I N G P O L I C Y 3 . 6 . C H A I R M A N A N D C H I E F E X E C U T I V E O F F I C E R (C E O) 3 . 7. CO M M I T M E N T 3 . 8 . C O R P O R AT E R E P O R T I N G 3 . 9. AU D I T CO M M I T T E E 3 .10 . R E M U N E R AT I O N 3 .11. R I S K 3 .12 . M O N I TO R I N G O F T H E B OA R D’ S P E R F O R M A N C E 3 .13 . CO M M U N I C AT I O N W I T H S H A R E H O L D E R S 3 .14 . I N D E P E N D E N T P R O F E S S I O N A L A DV I C E 3 .15 . A S X R E CO M M E N DAT I O N S 4 . AN N UAL F I NAN C I AL R E PO R T 5 . 6 . D I R E C TO R S D E CL AR AT I O N S HAR E H O LD E R I N F O R M AT I O N 6 .1. S H A R E H O L D I N G 6 . 2 . S U B S TA N T I A L S H A R E H O L D E R S 7. AU D I TO R S R E PO R T 8 . CO R PO R AT E D I R E C TO RY 3 3 4 4 10 10 13 13 13 13 13 14 14 14 14 14 15 18 18 19 19 19 19 21 2 2 2 3 2 3 2 4 2 4 2 4 2 5 2 5 2 5 2 6 2 6 2 6 2 6 2 7 2 8 31 76 7 7 7 7 7 7 78 8 3 ANNUAL REPORT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 2 018 . 1.1. CHAIR MAN’S LET TER D e a r S h a r e h o l d e r s , I a m p l e a s e d to p r e s e nt to yo u o u r A n n u a l Re p o r t fo r 2 018 . T h e C o m p a ny’s u n d e r l y i n g p e r fo r m a n c e d u r i n g t h e ye a r w a s r e a s o n a b l y s t r o n g g i ve n t h e c h a l l e n g i n g e nv i r o n m e nt w h i c h w e o p e r a te i n , w i t h u n d e r l y i n g r eve n u e i n c r e a s i n g to $ 5 ,97 0 , 871 (f r o m $ 5 , 3 0 0 ,181 t h e p r ev i o u s ye a r ) a n d o p e r a t i n g c o s t s w e r e r e d u c e d to $ 6 ,10 9, 3 2 5 (f r o m $ 6 ,95 0 , 2 5 6 t h e p r ev i o u s ye a r ). T h e n et l o s s fo r t h e ye a r w a s $ 4 21, 2 3 4 , c o m p a r e d to a p r o f i t t h e p r ev i o u s ye a r o f $1, 7 2 8 , 0 4 5 w h i c h i n c l u d e d a s i g n i f i ca nt a b n o r m a l i te m ($ 5 , 0 0 0 , 0 0 0 ) f r o m r e s o l v i n g t h e o n g o i n g u s e o f t h e C h i r o n s y s te m w i t h S A H e a l t h . Yo u r B o a r d e l e c te d n ot to p a y a d i v i d e n d fo r t h e ye a r, w h i c h r e f l e c t s t h e C o m p a ny’s o n g o i n g i nve s t m e nt i n d eve l o p i n g o u r p r o d u c t s a n d p u r s u i n g g r o w t h i n A s i a . We b e l i eve yo u r c o m p a ny i s w e l l p o s i t i o n e d to ca p i ta l i s e o n t h i s i nve s t m e nt to c o nt i n u e to i n c r e a s e r eve n u e, r et u r n to p r o f i ta b i l i t y, a n d s t r e n g t h e n s h a r e h o l d e r va l u e ove r t h e n e x t fe w ye a r s . Key h i g h l i g ht s fo r t h e ye a r i n c l u d e: • • • • • C o nt i n u e d g r o w t h i n s a l e s o f M a s te r C a r e E M R ; S i g n i f i c a nt i n c r e a s e i n t h e C o m p a ny’s Re fe r r a l N et S M D s u b s c r i b e r n et w o r k ; F a s t t r a c k i n g o f r e l e a s e o f o u r C o n n e c te d H e a l t h Re c o r d s p o r t fo l i o; Re c r u i t m e nt o f a d d i t i o n a l key p e r s o n n e l; D eve l o p i n g o p p o r t u n i t i e s fo r o u r p r o d u c t s i n A s i a . I w o u l d l i ke to t h a n k m y fe l l o w D i r e c to r s , o u r C E O M a t h e w C h e r i a n , a n d t h e e n t i r e te a m fo r t h e i r o n g o i n g l oya l t y, d e d i ca t i o n , a n d t i r e l e s s e f fo r t s to e x p a n d o u r b r a n d a w a r e n e s s a n d g r o w t h e C o m p a ny’s r eve n u e b a s e, b ot h i n A u s t r a l i a a n d A s i a . A l s o, t h a n k s to yo u, o u r s h a r e h o l d e r s , fo r yo u r c o nt i n u e d p a t i e n c e, a n d u n d e r s ta n d i n g o f o u r b u s i n e s s s t r a te g y. Yo u r s s i n c e r e l y, 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, Steve n L e i g h P y nt N o n - E x e c u t i ve C h a i r m a n 3 ANNUAL REPORT 1.2. CHIEF EXECUTI VE OFF IC ER’ S O PE R ATI O NS RE PO R T 1.3. FINANCI 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 2 018 . 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 2 017. R EVIE W OF THE F INANCIAL YE AR TO JU NE 2 018 FI NANCIAL RESULT T h e f i n a n c i a l r e s u l t o f t h e C o m p a ny fo r t h e ye a r e n d e d 3 0 J u n e 2 018 i s s u m m a r i s e d b e l o w : 2018 $ Licence Subscriptions 3,880,443 Services & Other Revenue 2,090,428 Total Revenue Total Operating Expenses EBITDA Net Profit / (Loss) 5,970,871 6,109,325 (138,454) (421,234) 2017 $1 3,415,775 1,884,406 5,300,181 464,668 206,022 670,090 6,950,256 (890,931) (1,650,075) 1,511,621 (3,271,955) 2,850,721 +14% +11% +13% -12% +92% +87% $ Change % Change 1 2017 results have been adjusted for significant one-off legal settlement of $5,000,000 T h e o p e r a t i o n s h a ve a c h i eve d s t r o n g t r e n d s a c r o s s key m e a s u r e s : • • • • 14 % g r o w t h i n n e w a n d r e c u r r i n g L i c e n ce S u b s c r i pt i o n s 13 % g r o w t h i n ove r a l l r eve n u e to j u s t u n d e r $ 6 M 12 % r e d u c t i o n i n o p e r a t i n g e x p e n s e s $1. 5 M t u r n a r o u n d i n E B I T DA to ($13 8 K ) • Re d u c t i o n i n N et L o s s a f te r a b n o r m a l i te m s f r o m ($ 3 . 2 7 2 M) to ($ . 4 21M). BUSINESS AS USUAL ( BAU) - TODAY ’S RE VE NUE O ve r 8 0 % o f r eve n u e w a s g e n e r a te d f r o m t h e p r ov i s i o n o f o u r s o f t w a r e s o l u t i o n s to c o m m u n i t y h e a l t h , h o s p i ta l a n d p r i m a r y ca r e h e a l t h b u s i n e s s e s , d e p l oye d o n c u s to m e r ’s I T i n f r a s t r u c t u r e (“o n - p r e m i s e s ”). • S a l e s o f M a s te r C a r e E l e c t r o n i c M e d i ca l Re c o r d ( E M R) s o f t w a r e to m e nta l h e a l t h a n d c h r o n i c d i s e a s e h e a l t h c a r e p r ov i d e r s w a s t h e fa s te s t g r o w i n g l i n e o f b u s i n e s s (u p 3 3 %). M a s te r C a r e E M R n o w r e p r e s e nt s m o r e t h a n 5 0 % o f tota l r eve n u e. A n u m b e r o f s i g n i f i ca nt i m p l e m e nta t i o n s w e nt “ l i ve” t h r o u g h t h e ye a r : • Te r r i to r y - w i d e d e p l oy m e nt a c r o s s AC T fo r M e nta l H e a l t h , J u s t i c e, A l c o h o l a n d O t h e r D r u g s p u b l i c s e r v i c e s ; • M e rc y M e nta l H e a l t h s e r v i c e s d e p l oy m e nt i n m et r o p o l i ta n V i c to r i a • W i n d a n a D r u g a n d A l c o h o l Re cove r y i n V i c to r i a • B a s s C o a s t C o m m u n i t y H e a l t h S e r v i ce s i n co u nt r y V i c to r i a . W i t h a c o n s i s te nt l y s t r o n g p i p e l i n e, M a s te r C a r e E M R i s e x p e c te d to co nt i n u e i t s g r o w t h w e l l b eyo n d t h e e x i s t i n g 10 0 c u s to m e r s ove r t h e n e x t 18 m o nt h s . S e c u r e M e s s a g e D e l i ve r y ( S M D) p l a t fo r m s a r e s o f t w a r e p l a t fo r m s t h a t e n a b l e s e n s i t i ve c l i n i ca l i n fo r m a t i o n to b e e n c r y pte d , d i g i ta l l y s i g n e d a n d s e c u r e l y s h a r e d b et w e e n p r ov i d e r s to p r ote c t p a t i e nt p r i va c y a n d c o n f i d e nt i a l i t y. 4 ANNUAL REPORTT h e C o m p a ny’s Re fe r r a l N et S M D s u b s c r i b e r n et w o r k g r e w 13 % p r o c e s s i n g 16% m o r e m e s s a g e s (o r c l i n i c a l d o c u m e nt s) ove r t h e 12 m o nt h s . Re fe r r a l N et i s c u r r e nt l y e n g a g e d i n t w o F e d e r a l G ove r n m e nt p r o j e c t s to i m p r ove i nte r o p e r a b i l i t y w i t h A u s t r a l i a’s t w o l a r g e s t S M D n et w o r k s . T h e c o m p l et i o n o f t h e p r o j e c t l a te r i n 2 018 s h o u l d e x te n d t h e n et w o r k r e a c h o f Re fe r r a l N et to ove r 8 0 % o f h e a l t h ca r e p r ov i d e r s t h a t a r e e n a b l e d fo r S M D. T h e i nte r o p e r a b i l i t y p r o j e c t s w i l l b e fo l l o w e d by ca m p a i g n s to e x te n d Re fe r r a l N et s u b s c r i b e r s b eyo n d V i c to r i a fo c u s i n g p r i m a r i l y o n A l l i e d H e a l t h a n d S p e c i a l i s t p r ov i d e r s . O ve r 3 , 0 0 0 h e a l t h ca r e o r g a n i s a t i o n s i n A u s t r a l i a r e l y o n G l o b a l H e a l t h o n - p r e m i s e s s o f t w a r e a p p l i ca t i o n s to s u p p o r t t h e i r i n te r n a l o p e r a t i o n s o r t h e i r c o n n e c t i v i t y n e e d s . T h e C o m p a ny’s B u s i n e s s - a s - U s u a l ( B AU) p o r t fo l i o o f a p p l i ca t i o n s t h a t a r e d e p l oye d “o n - p r e m i s e s ” i s fo r e c a s t to co n t i n u e d o u b l e - d i g i t g r o w t h ove r t h e fo r e s e e a b l e f u t u r e. B u t H e a l t h c a r e c a n n ot m a i nta i n a s ta t u s q u o o r “ B u s i n e s s - a s - U s u a l ”. T HE PROBLEM – UNSUSTAINAB L E COS T ESC AL A TION IN H E AL THC A R E • • 5 0 % o f u s h a ve o r w i l l h a ve a c h r o n i c d i s e a s e i n o u r l i fet i m e; 6 3 % o f t h o s e w i l l d i e f r o m t h e i r d i s e a s e; • 5 0 % o f u s w i l l e x p e r i e n c e a m e nta l h e a l t h e p i s o d e. T h e c o m b i n a t i o n o f : • • • a n a g i n g p o p u l a t i o n , u n h e a l t hy, s e d e nta r y l i fe s t y l e s , o b e s i t y a n d • t h e s t r e s s e s o f m o d e r n l i fe. A s w e l l a s t h e: • • r a p i d i m p r ove m e nt s i n m e d i ca l te c h n o l o g y, e a r l i e r d ete c t i o n o f a d ve r s e co n d i t i o n s , • m o r e m e d i ca t i o n s to m a n a g e l i fe l o n g c o n d i t i o n s a n d • i n n ova t i ve d eve l o p m e nt s i n m e d i ca l d ev i c e s . H a ve c r e a te d a c r i s i s i n h e a l t h ca r e d e l i ve r y. I n A u s t r a l i a h a l f a b i l l i o n d o l l a r s i s s p e nt o n h e a l t h ca r e e a c h a n d eve r y d a y. A n d i t i s g r o w i n g . A p p r o x i m a te l y 3 5 % o f h e a l t h ca r e c o s t s a r e n o n - p a t i e nt fa c i n g – b a c k o f f i ce c o s t s s u c h a s p h o n e co nve r s a t i o n s b et w e e n p r ov i d e r s , r e - key i n g o f i n fo r m a t i o n o n p a p e r a s va l u a b l e c l i n i ca l i n fo r m a t i o n i s e x c h a n g e d t h r o u g h t h e p a t i e nt j o u r n ey, r e - key i n g o f p a t i e nt s to r i e s a n d r e - d o i n g te s t s . T h o u s a n d s o f a vo i d a b l e d e a t h s o cc u r d u e to p o o r a cce s s to r e l eva nt i n fo r m a t i o n a t t h e p o i nt o f ca r e. H e a l t h ca r e i s a c o m p l e x s y s te m o f c o m p l e x s y s te m s . F u n d i n g o f h e a l t h ca r e i n A u s t r a l i a i s a c o m b i n a t i o n o f s e l f - f u n d i n g , p r i va te i n s u r a n c e, M e d i ca r e, DVA , Wo r ke r s C o m p e n s a t i o n , Tr a n s p o r t Acc i d e nt c o m p e n s a t i o n a n d a m y r i a d o f Sta te a n d F e d e r a l f u n d i n g p r o g r a m s . T h e r e a r e a n e s t i m a te d 15 0 , 0 0 0 d i f fe r e nt b u s i n e s s e s i nvo l ve d i n h e a l t h ca r e – f r o m s ta te - f u n d e d A r e a H e a l t h S e r v i c e s i n e a c h s ta te, c o m m o n w e a l t h - f u n d e d 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 , p r i va te a g e d c a r e o p e r a to r s , g e n e r a l p r a c t i ce, d a y h o s p i ta l s , ove r n i g ht h o s p i ta l s , a l l i e d h e a l t h s e r v i c e s , d i a g n o s t i c s e r v i c e s a n d p h a r m a c i e s . G l o b a l l y, h e a l t h c a r e c o s t s a r e i n c r e a s i n g a t ove r 5 % p. a . i n r e a l te r m s . 5 ANNUAL REPORTT h e l a r g e s t g r o w t h i n c h r o n i c d i s e a s e i s i n d eve l o p i n g e c o n o m i e s – a s p e o p l e b e c o m e m o r e a f f l u e nt, t h e p r e c u r s o r s o f c h r o n i c d i s e a s e ta ke h o l d a n d eve nt u a l l y co s t s ta ke o f f. H e a l t h ca r e i s a u n i ve r s a l p r o d u c t – d i a b ete s i n D u b a i o r D e l h i i s b e s t t r e a te d t h e s a m e w a y a s d i a b ete s i n B o s to n o r M e l b o u r n e. S o m e b e l i eve t h a t a s i n g l e h o m o g e n o u s s y s te m a c r o s s a l l o f h e a l t h ca r e i s t h e a n s w e r. At G l o b a l H e a l t h w e t h i n k d i f fe r e nt l y. C O NNECTED HEALTH RECORDS O u r v i s i o n fo r i m p r ov i n g c o n s u m e r o u tc o m e s a n d h e a l t h ca r e p r o d u c t i v i t y i s a n e c o - s y s te m fo r d i g i ta l h e a l t h b a s e d o n c o n n e c t i v i t y, s p e c i a l i s t a p p l i ca t i o n s a n d c o n s u m e r e n g a g e m e n t. C o n n e c t e d H e a l t h R e co r d s w i t h co n s u m e r s o r c u s to m e r s o f t h e h e a l t h ca r e s y s te m a t t h e c e nt r e. C a r e m a n a g e r s d eve l o p a c t i v i t y ta s k s o r m a n a g e m e nt p l a n s ta i l o r e d to e a c h i n d i v i d u a l’s c i r c u m s ta n ce t h a t n e e d to b e s h a r e d a n d a c t i ve l y m o n i to r e d to m a x i m i s e c o m p l i a n ce. E n g a g e d co n s u m e r w i l l b e t h e key to d i s r u pt i n g t h e e s c a l a t i n g c o s t s o f h e a l t h ca r e a n d i m p r ov i n g i n d i v i d u a l h e a l t h o u tc o m e s . C o n s u m e r s w i l l c h o o s e w h o a n d w h e n to s h a r e i n fo r m a t i o n; w i t h t h e i r fa m i l y a n d e x te r n a l ca r e te a m . M a ny h e a l t h c a r e i s s u e s ca n b e a d d r e s s e d i f a s c o n s u m e r s , w e e x e rc i s e m o r e, e a t h e a l t hy, s l e e p w e l l a n d m a n a g e s t r e s s b et te r. W i t h t h e u s e o f A r t i f i c i a l I nte l l i g e n c e (A I ), m a c h i n e l e a r n i n g a n d g a m i n g te c h n i q u e s w e h a ve a g r e a te r c h a n c e to i n f l u e n c e b e h a v i o u r m o d i f i c a t i o n s – to s to p b a d h a b i t s , l o s e w e i g ht, ta ke o u r m e d i c i n e s , e x e rc i s e m o r e a n d b e c o m e m o r e s o c i a l l y a c t i ve. T h e b et te r w a y to s to p t h e e s ca l a t i o n i n h e a l t h ca r e c o s t s i s by a d d r e s s i n g t h e d e m a n d s i d e. EMPOWERM ENT, EN GAG EMEN T AND COLLABORATION W ITH P ROVI DERS. Supporting consumers th roughou t thei r life time F a m i l y H e a l t h We l l b e i n g S u p p o r t a n d C a r e N e t w o r k 6 ANNUAL REPORT T OMORROW’S GROWTH REVENUE P r i o r to J u l y 2 017, t h e C o m p a ny s p e nt a n a ve r a g e o f $1M e a c h ye a r o n p r o d u c t d eve l o p m e nt fo r t h e n e x t - g e n e r a t i o n o f s o f t w a r e p l a t fo r m s a i m e d a t c o n n e c t i n g h e a l t h ca r e c o n s u m e r s a n d c l i n i c i a n s . T i m i n g i s c o n s i d e r e d o n e o f t h e m o s t i m p o r ta nt fa c to r s i n t h e s u cc e s s o f te c h n o l o g y c o m p a n i e s . I n t h e p a s t ye a r, o u r p r o d u c t d eve l o p m e nt w a s a cc e l e r a te d . We h a ve i nve s te d a p p r o x i m a te l y $ 2 M i n n e w p r o d u c t d eve l o p m e nt to fa s t t r a c k t h e r e l e a s e o f o u r S a a S ( 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 s t h a t to g et h e r c o m p r i s e o u r C o n n e c te d H e a l t h Re co r d s (C H R) p o r t fo l i o. T h e s e a r e d e s i g n e d fo r m o b i l i t y a n d i n te r n a t i o n a l m a r ket s : • • • to w o r k o n s m a r t p h o n e s , ta b l et s a n d l a pto p s , to s u p p o r t m u l t i p l e l a n g u a g e s , a n d to o f fe r a n o p e n m a r ket p l a ce fo r t h i r d p a r t i e s to va l u e - a d d m o d u l e s u n i q u e to c e r ta i n s p e c i a l t i e s o r j u r i s d i c t i o n s . C o n n e c t e d H e a l t h R e co r d s c o m p r i s e o f fo u r p l a t fo r m s : M a s t e r C a r e + i s a c l o u d - b a s e d m a r ket p l a c e w h e r e h e a l t h ca r e p r ov i d e r s ca n s u b s c r i b e to t h e S o f t w a r e S e r v i c e s a n d fe a t u r e s t h ey n e e d – p a t i e nt r e c o r d m a n a g e m e nt, p r e s c r i pt i o n s , m e d i ca t i o n m a n a g e m e nt, d i a g n o s t i c s e r v i ce s , s e c u r e m e s s a g i n g , c l i n i c a l n ote s , m a n a g e m e nt p l a n s , b i l l i n g , a p p o i nt m e nt s etc . W i t h i n 5 ye a r s , M a s te r C a r e + i s e x p e c te d to r e p l a c e t h e f u n c t i o n a l i t y o f o u r e x i s t i n g o n - p r e m i s e s h o s p i ta l , co m m u n i t y h e a l t h , m e d i c a l a n d a l l i e d h e a l t h a p p l i ca t i o n s . L i f e ca r d i s fo r c o n s u m e r s ; yo u a n d I a s c u s to m e r s o f h e a l t h ca r e s e r v i c e s , e m p o w e r e d to w o r k p r o a c t i ve l y w i t h o u r c a r e te a m s . L i fe ca r d i s a l r e a d y a va i l a b l e i n T h a i , V i et n a m e s e a n d B a h a s a – t h e 3 l a r g e s t m a r ket s w i t h i n A S E A N w i t h a b o u t 4 5 0 M c o n s u m e r s . H o t H e a l t h e n a b l e s h e a l t h ca r e p r ov i d e r s to e n g a g e w i t h t h e i r p a t i e nt s ; w i t h v i d e o - c o n fe r e n c i n g , t h e i r o w n w e b - s to r e, o n l i n e a p p o i nt m e nt s , s p e c i a l - i nte r e s t g r o u p s a n d c h a t s ; I n e s s e n c e, t h e o n l i n e c l i n i c fo r h e a l t h ca r e p r ov i d e r s to b u i l d 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. C o n s u m e r s c a n s u b s c r i b e to m u l t i p l e p r ov i d e r s , fo r e x a m p l e t h e i r d e nt i s t, p hy s i o, G P, n u t r i t i o n i s t a n d s o o n . C o r e to a l l o f t h e s e i s t h e R e f e r r a l N e t S M D p l a t fo r m w h i c h e n a b l e s d a ta to s e c u r e l y f l o w f r o m a s i n g l e p o i nt o f e nt r y t h r o u g h to c o l l e a g u e s , f u n d e r s a n d co n s u m e r s . O ve r t h e l a s t 15 m o nt h s , t h e C H R p o r t fo l i o w a s s u cc e s s f u l l y d e p l oye d to a l i m i te d n u m b e r o f e a r l y a d o pte r s w i t h key l e a r n i n g s r e - fa c to r e d i nto t h e p l a t fo r m s r e a d y fo r c o m m e rc i a l i s a t i o n a n d g r o w t h . Secure Connectivity Existing third party clinical and provider systems Health Provider Applications Consumer Applications Consumer Engagement Remote home monitoring devices and wearables 7 ANNUAL REPORTDI GI TALLY CONNECTED HEALTH CARE J O URNEY We o p e r a te a t t h e i nte r s e c t i o n o f te c h n o l o g y a n d h e a l t h ca r e w h i c h r e p r e s e nt s t h e b e s t o f b ot h w o r l d s - h e a l t h c a r e i s a d e fe n s i ve i n d u s t r y t h a t i s l e s s s u s ce pt i b l e to e c o n o m i c c yc l e s . We g et s i c k i n g o o d t i m e s a n d i n b a d; e n a b l i n g te c h n o l o g y to b e t h e fa s te s t g r o w t h i n d u s t r y i n t h e w o r l d . H e a l t h ca r e te c h n o l o g y i s h a r d b u t s t i c k y. At G l o b a l H e a l t h , o u r s t r a te g y i s to fo c u s o n a p a t h to s u s ta i n a b l e p r o f i ta b i l i t y. O u r i nve s t m e n t s i n n e w p r o d u c t s a n d m a r ket s h a ve b e e n f u n d e d by i nte r n a l l y g e n e r a te d f u n d s – c l o s e to $10 M ove r t h e r e c e nt p a s t. O u r fo c u s i s o n t h e p r eve nt i o n s i d e o f h e a l t h c a r e; p l a t fo r m s d e s i g n e d to e d u ca te c o n s u m e r s a n d e n c o u r a g e b e h a v i o u r c h a n g e. Ac h i ev i n g s ca l e w i l l d e p e n d o n t h e a b i l i t y to e x e c u te o u r v i s i o n i n m a r ket s w i t h m u c h g r e a te r p o p u l a t i o n s o f c o n s u m e r s . T h e l a r g e s t p o p u l a t i o n s a n d fa s te s t g r o w i n g e co n o m i e s a r e i n o u r n e i g h b o u r h o o d - w i t h a p o p u l a t i o n o f 6 5 0 M c o n s u m e r s a c r o s s S o u t h - E a s t A s i a o r A S E A N , t h e p ote nt i a l m a r ket i s 2 6 t i m e s l a r g e r t h a n A u s t r a l i a . W i t h a G D P a l r e a d y t w i c e t h e s i z e o f A u s t r a l i a a n d g r o w i n g a t 3 0 % , t h i s i s a key fo c u s g o i n g fo r w a r d . S u cc e s s f u l l y e x p a n d i n g to i nte r n a t i o n a l m a r ket s g i ve s t h e s ca l e o f c o n s u m e r s w e n e e d to m a ke a n a f fo r d a b l e d i f fe r e n c e. O ve r t h e n e x t t h r e e to f i ve ye a r s , o u r t r a d i t i o n a l o n - p r e m i s e s r eve n u e d e r i ve d f r o m A u s t r a l i a n c u s to m e r s w i l l b e a u g m e nte d w i t h r eve n u e f r o m o u r C o n n e c te d H e a l t h Re co r d s p l a t fo r m s , f r o m a b r o a d e r r e g i o n a l m a r ket. 8 ANNUAL REPORTFo r m ore inf ormat ion: T: + 61 3 9675 0 6 8 8 Ab o ut Globa l Health Limited G l o b a l H e a l t h i s a l e a d i n g p r ov i d e r o f e - h e a l t h s o l u t i o n s to 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 s u p p o r t i n g h e a l t h c a r e d e l i ve r y i n h o s p i ta l s a n d c o m m u n i t y s et t i n g s . C o n n e c t i v i t y i s e m b e d d e d i n G l o b a l H e a l t h a p p l i ca t i o n s to p r o m ote s e c u r e i n fo r m a t i o n s h a r i n g , f i n a n c i a l t r a n s a c t i o n s a n d t h e u s e o f te c h n o l o g y i n w a y s t h a t t r a n s fo r m h e a l t h ca r e d e l i ve r y. P r o d u c t s i n t h e G l o b a l H e a l t h s u i te i n c l u d e: M a s te r C a r e E M R , M a s te r C a r e PA S , P r i m a r y C l i n i c , Re fe r r a l N et, A l t i t u d e C l o u d H o s t i n g , H ot H e a l t h a n d L i fe C a r d . G l o b a l H e a l t h i s l i s te 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 w i t h i t s h e a d o f f i c e i n M e l b o u r n e. 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 a n d i t s p r o d u c t s , v i s i t w w w. g l o b a l - h e a l t h . c o m . 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 9 ANNUAL REPORT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 n t 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 2 018 . 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 Position Non-executive Chairman Executive director Non-executive director Non-executive director Pattie Anne Beerens Non-executive director 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 . INFORMATI ON ON DIRECTORS T h e s k i l l s , e x p e r i e n ce 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. STEVEN L. PYNT 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 ce 2 0 0 0 a n d C h a i r m a n s i n ce 2 0 0 5 . E x p e r i e n ce H e i s 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 , M P C o m m e rc i a l L a w ye r s , a n d h i s m a i n a r e a o f p r a c t i ce i s i n co m m e rc 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 c o 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 rc 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 rc e s L i m i te d G o n d w a n a Re s o u rc e 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 ANNUAL REPORT 2 . MATHEW CHERIAN 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 E x p e r i e n ce 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 c e 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 ce 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. GRANT SMI TH 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 E x p e r i e n ce 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 nt 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 nt 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 ca 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 c a 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 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 C h a i r m a n o f t h e A u d i t C o m m i t te e 11 ANNUAL REPORT 4 . RO BERT KNOWLES 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 E x p e r i e n ce 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 B eyo n d B l u e Ltd . H e i s 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 n t 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 to 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 s 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 a s a n Ag e d C a r e C o m p l a i nt 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 St J o h n o f G o d H e a l t h ca r e Ltd 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. PATTIE ANNE BEERENS 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 E x p e r i e n ce Pa t t i e 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 ca 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 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 . M s B e e r e n s’ 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 t h e 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 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 , to o k t h e l e a d o n p h a r m a c y s y s te m 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 c o 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 co m m e n c e d i n 2 0 0 5 a n d co nt i n u e s to d a y to s u p p o r t a cce 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 . 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 . 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 12 ANNUAL REPORT 2.2. COMPAN Y SECRETARY M r S a m B u tc h e r [ L L B( H o n s), B E c] 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 w i t h e f fe c t f r o m 21 J u n e 2 018 . S a m 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 B H P B i l l i to n L i m i te d , Z i n i fe x L i m i te d a n d B o n l a c F o o d s L i m i te d . M r G l e n n F o w l e s w a s c o m p a ny s e c r eta r y u nt i l N ove m b e r 2 017 a n d M r J o s e p h P h i l l i p p o s w a s c o m p a ny s e c r eta r y f r o m N ove m b e r 2 017 to J u n e 2 018 . 2.3. MEETI NG OF DIRECTO RS AND CO M M I TT EE S 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 A u d i t co 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 c a 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 2 018 , 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: Directors Meetings Audit Committee Meetings Number of Meetings Attended Number of Meetings eligible to attend Number of Meetings Attended Number of Meetings eligible to attend Mr M Cherian Mr S L Pynt Mr G Smith Mr R Knowles Ms P Beerens 6 6 6 6 6 6 6 6 6 6 - 2 2 - - - 2 2 - - 2.4. DIRECTORS’ INTERES TS 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: Ordinary Shares Options Mr M Cherian Mr S L Pynt Mr G Smith Mr R Knowles Ms P Beerens Total 18,619,370 257,408 300,000 20,000 22,000 19,218,778 150,0001 200,000 100,000 100,000 - 550,000 1 Options through a related party, Kye Cherian 2.5. PRINCI PAL A CTI VI TI ES 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. 2 . 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 t h e d eve l o p m e nt o f s y s te m s i nte 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 n te 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. RESU LTS AND DIVI DENDS 2.6.1. O PE R A TI NG RE SULTS T h e l o s s 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 c o 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 nte d to $ 4 21, 2 3 4 (2 017: p r o f i t $1, 7 2 8 , 0 4 5). 13 ANNUAL REPORT 2.6.2. DI V ID E ND S 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 2 018 , t h e C o m p a ny d i d n ot p a y a d i v i d e n d . D eta i l s o f d i v i d e n d s 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. REVIEW 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 c e 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. SIGNIFI CANT C HANGES IN 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 2 018 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. 2.10. LIKEL Y DEVELOPME NTS 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. SHAR E OPTI ONS 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 Expiry 26 May 2014 10 June 2016 26 May 2019 10 June 2020 19 December 2016 30 November 2019 19 December 2016 30 November 2021 Exercise Price Number Under per option Option* $0.75 $0.65 $0.75 $0.75 300,000 310,000 400,000 600,000 1,610,000 * O pt i o n h o l d e r s d o n ot h a ve a ny r i g ht s to p a r t i c i p a te i n a ny i s s u e s o f s h a r e s o r ot h e r i nte r e s t s o f t h e c o m p a ny o r a ny ot h e r e nt i t y. A l l o pt i o n s w e r e i s s u e d by G l o b a l H e a l t h L i m i te d a n d e nt i t l e d t h e h o l d e r to o n e o r d i n a r y s h a r e i n G l o b a l H e a l t h L i m i te d fo r e a c h o pt i o n e x e rc i s 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 2 018 , t h e fo l l o w i n g eve n t s o c c u r r e d: • 5 3 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 . 6 5 e x p i r e d o n 19 D e ce m b e r 2 017 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. 14 ANNUAL REPORT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 ce 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 c e eva l u a t i o n p r o ce 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 ce. 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 ce 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 . PERFORMANCE BASED REMUNERATION 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 et P r o f i t A f te r Ta x ( N PAT ) 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 nt 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 . RELATIONSHIP BETWEEN REMUNERATION AND COMPANY PERFORMANCE 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 c o 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 co u r a g e t h e a l i g n m e n t 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 n te r e s t s . T h e r e i s n o fo r m a l r e m u n e r a t i o n 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 c o m p a ny’s p e r fo r m a n c e. NON-EXECUTIVE DIRECTORS’ REMUNERATION 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 c o 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 DIRECTORS’ REMUNERATION 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 REMUNERATION 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 c o 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 co nt r a c t. 15 ANNUAL REPORT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: 2018 Short-Term benefits Performance related Post- Employment Benefits Other long term benefits Share-based Payment* Name Salary and or Fees $ Bonus Superannuation Accrued Long Service Leave Shares Total $ $ $ $ $ Mr S L Pynt 51,605 Mr M Cherian 212,534 Mr G Smith 32,036 Mr R Knowles 35,240 MS P Beerens 35,160 Mr D Groenveld 164,383 Mr K Jayesuria 134,288 TOTAL 665,246 - - - - - - - - 4,902 53,027 3,043 3,347 3,340 Directors: - 7,868 64,375 4,190 - 269,751 - - - 3,934 3,934 39,013 42,521 - 38,500 Key Management Personnel: 15,616 2,740 15,819 198,558 24,587 107,862 2,435 9,365 15,819 47,374 177,129 829,847 Proportion of Remuneration that is performance based % - - - - - - - - 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 . 2017 Short-Term benefits Performance related Post-Employment Benefits Other long term benefits Share-based Payment* Name Salary and or Fees $ Bonus Superannuation Accrued Long Service Leave Shares Total $ $ $ $ $ Proportion of Remuneration that is performance based % Mr S L Pynt Mr M Cherian Mr G Smith Mr R Knowles Ms P Beerens 41,284 269,034 32,037 32,037 18,645 Mr P Curigliano (resigned 28 140,044 Dec 2016) Mr K Jayesuria TOTAL 120,580 653,661 - - - - - - - - 3,922 33,381 3,043 3,043 1,771 20,820 35,370 101,350 Directors: 9,432 54,638 - 306,604 4,716 4,716 - 39,796 39,796 20,416 Key Management Personnel: - 160,864 - 4,189 - - - - 2,435 6,624 16,002 174,387 34,866 796,501 - - - - - - - - * Re c o g n i s e e x p e n s e o f g r a nt i n g s h a r e o pt i o n s to d i r e c to r s a n d K M P i n p r i o r ye a r s . 16 ANNUAL REPORT 2.12. 3. SE RV IC E AGR EEMEN 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 nt 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 nt r a c t s c o 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 o f n ot i c e, 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 c o n d u c t o r b r e a c h o f co 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 nt 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 c a 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. Notice period by Notice period by Company Employee Termination Payments Managing Director Mr M Cherian 6 months 6 months 6 months* Principal Architect Mr D Groenveld 1 month Chief Operating Officer Mr K Jayesuria 1 month * If termination is by reason of the employee’s illness or incapacity. 1 month 1 month None None 2.12. 4. IN TE R E STS I N S HAR ES AND OP T IONS 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 2 018 a r e: Total number of shares 2018 Number of Number of shares sold shares acquired 2017 2018 2017 2018 2017 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 22,000 257,408 300,000 20,000 22,000 TOTAL 19,218,778 19,218,778 - - - - - - - - - - - - - - - - - - - 25,000 - - 22,000 47,000 D i r e c to r s r e c e i ve 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 n t 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 . 17 ANNUAL REPORTOPTIONS 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 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 2 018 a r e: Total number of options 2 Number Number of of options option granted exercised during the year during the year 2018 2017 2018 2017 2018 Mr M Cherian1 150,000 150,000 Mr S L Pynt 200,000 200,000 Mr G Smith 100,000 100,000 Mr R Knowles 100,000 100,000 Ms P Beerens - - - - - - - - 200,000 100,000 100,000 - - - - - - Number Number Option Exercise of Options of Options type price per vested/ unvested (Listed / Option ($) exercisable at report Unlisted) at report date date 2018 150,000 133,333 66,663 66,663 - 2018 - Unlisted 66,667 33,337 33,337 - Unlisted Unlisted Unlisted - $0.65 $0.75 $0.75 $0.75 - TOTAL 550,000 550,000 - 400,000 - 416,659 133,341 1 Options through a related party, Kye Cherian 2 Options holders have no rights to participate in any share or interest issue of the entity/other entities. 2.12. 5. LOANS TO KEY MANAGEMENT PE RS ONNE L At 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 , a l o a n o f $ 2 4 , 4 91 w a s o u t s ta n d i n g f r o m Key M a n a g e m e n t Pe r s o n n e l o f w h i c h i nte r e s t o f $1, 7 7 2 h a d b e e n c h a r g e d d u r i n g t h e ye a r. 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 nt p e r s o n n e l d u r i n g t h e ye a r (2 017: $ 4 5 , 0 0 0 ). 2.12. 6. O THE R T RAN S ACTI ONS WITH K E Y 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 co 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 c o n d u c te d ot h e r t h a n i n a c co 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 – 2.13. INDEMNIFI CATION O F DI RECT O RS AND E X EC U TI V ES D u r i n g o r s i n c e 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 ce r o r d i r e c to r o f t h e p a r e n t 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 n t 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 c e 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 c o 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 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 18 2 o r 18 3 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 c e r s L i a b i l i t y I n s u r a n c e w a s $14 , 87 0 (2 017: $13 , 610 ). 2.14. PRO CEEDINGS ON B EHALF O F T HE CO M PANY N o p e r s o n h a s a p p l i e d to t h e C o u r t u n d e r s e c t i o n 2 37 o f t h e C o r p o r a t i o n s Ac t 2 0 01 fo r l e a ve to 18 ANNUAL REPORTb r i n g p r o c e e d i n g s o n b e h a l f o f t h e C o m p a ny, o r to i nte r ve n e i n a ny p r o c e e d i n g s to w h i c h t h e C o m p a ny i s a p a r t y, fo r t h e p u r p o s e o f ta k i n g r e s p o n s i b i l i t y o n b e h a l f o f t h e C o m p a ny fo r a l l o r p a r t o f t h o s e p r o c e e d i n g s . 2.15. NON-AUDIT SERVICES 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 p r ov i d e d co n s u l ta n c y s e r v i c e s r e g a r d i n g o u r ta x p o s i t i o n . 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 n d co n s u l ta n c y a r e d eta i l e d i n N ote 2 3 . 2.16. EN VIR ONMENTAL I SSU ES 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 c e 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 e nv i r o n m e n ta l Ac t. 2.17. CORPORATE GOVERNAN CE 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 nta 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. 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 2 018 19 ANNUAL REPORT3. CORP ORATE G OVERNANCE ST A TE MENT 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 h i g h s ta n d a r d s o f c o r p o r a te g ove r n a n ce. Acc o 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 c o r p o r a te g ove r n a n c e a r r a n g e m e nt s co m p l y w i t h t h e P r i n c i p l e s a n d Re 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 (3 r d E d i t i o n - 2 014) 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 2 018 . 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 n t 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 nt. 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 c o r p o r a te g ove r n a n c e 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 l o n g e r te r m a n d s e e k to b a l a n c e 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 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 c e 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 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 i e s a r e 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 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 ce p r a c t i c e s i s s et o u t b e l o w. A l l o f 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. E t h i ca l S t a n d a r d s T h e B o a r d i s c o m m i t te d to i t s co r e g ove r n a n c e 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 n t 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 co n f l i c t s o f i nte r e s t 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 ote nt i a l c o n f l i c t s ; • 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 c o 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 o r 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 nt 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 m a d e by t h e B o a r d . D i ve r s i t y Po l i c y 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 co m m i t te d to d i ve r s i t y a n d r e co 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. T h e C o m p a ny’s d i ve r s i t y p o l i c y i n c l u d 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 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 t h e 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 e m . 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 n t i n u o u s i m p r ove m e nt ; • d eve l o p 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 cc o u nt w h e n c o n s i d e r i n g va ca n c i e s ; 21 ANNUAL REPORT• 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 c o 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 rce a n d c o 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 : 2 018 2 017 N u m b e r Pe r ce n t a g e N u m b e r Pe r ce n t a g e Women on the Board Women in Senior Management Women employees in the Company 1 - 11 20% 0% 29% 1 - 14 20% 0% 35% 3.1. 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 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, n a m e l y 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 ce 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 ce 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 c o 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 cco r d a n c e 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 n ta i n a m a j o r i t y o f i n d e p e n d e n t 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 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 • • p e r s o n; • 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 i te m s o f b u s i n e s s . 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 a n d e x p e r i e n c e d p r o fe s s i o n a l s a n d b u s i n e s s p e o p l e. 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 n t s to s o u rce 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 co nta c t s to i d e n t i f y p ote nt i a l ca n d i d a te s b a s e d o n t h e i r 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 ce 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. 22 ANNUAL REPORT3.2. 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 c u r r e nt l y 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 co n s i d e r 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. 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 co 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 a r e e x p e c te 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 rce, 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 c a n i m p r ove t h e e x p e r i e n c e 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 c a r e s e r v i ce s ; • a n 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 c a 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 t h e C o m p a ny. A s t h e C o m p a ny 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 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 s k i l l s a n d c o m p ete n c i e s , p a r t i c u l a r l y i n t h e co nte x t o f b o a r d r e n e w a l . 3.3. BOAR D RE SPON SI BI LI TI ES 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 m a n a g e m e nt te a m , 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 nt o f a n d a p p r ov i n g t h e co 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 r c 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 ; 23 ANNUAL REPORT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 co nt r i b u t i n g to t h e p e r fo r m a n ce 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 ce 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 G r o u p; 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 s 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 a n d r e p o r t i n g to s h a r e h o l d e r s . 3.4. 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 t h e i n d e p e n d e n c e o f N o n - E x e c u t i ve D i r e c to r s . T h e s e s ta te t h a t to b e c o n s i d e r e d i n d e p e n d e n t, a D i r e c to r m u s t b e 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 nt ; • 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 ce 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 ; • h a ve n o m a te r i a l c o 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 c o nt r o l l e d e nt i t y ot h e r t h a n a s a D i r e c to r ; • n ot h a ve b e e n o n t h e B o a r d fo r a 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 co u l d , o r co 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. 3.5. TRADING POLI CY D i r e c to r s a r e s u b j e c t to t h e l e g i s l a t i ve r e s t r i c t i o n s o n a cq u i r i n g o r 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 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 i f i t w e r e g e n e r a l l y a va i l a b l e. T h e C o m p a ny’s s e c u r i t i e s t r a d i n g 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 . 3.6. CHAIR MA N AND CH I EF EXEC U T IV 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. 24 ANNUAL REPORT3.7. COMM ITM EN T 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 2 018 , 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 fo u r 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 a r e s h a r e d w i t h t h e f u l l B o a r d a s a p p r o p r i a te. I t i s t h e C o m p a ny’s p r a c t i ce 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 cc e 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 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 c o nt i n u e to m a ke 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. 3.8. 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 F i n a n c i a l C o nt r o l l e r h a ve m a d e t h e fo l l o w i n g ce 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 co 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 cc o r d a n c e w i t h r e l eva nt a cco 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 nte 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 n t 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 co m p l i a n c e a n d c o 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 . 3.9. AUDIT COMM ITTEE 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 (C h a i r ) 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 C o m m i t te e i s c h a i r e d by M r S m i t h . 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 C o 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 c o nt r o l s fo r 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 , i n c l u d i n g 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 cc o 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 . 25 ANNUAL REPORT3.10. 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 co 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 c o 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. 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 ce 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 ce 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. D eta i l s o f t h e r e m u n e r a t i o n a n d p e r fo r m a n ce o f e x e c u t i ve s a r e i n c l u d e d i n t h e D i r e c to r s’ Re p o r t. 3.11. RISK 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 i s k 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 . T h e B o a r d i s r e s p o n s i b l e fo r ove r s e e i n g t h e G r o u p’s s y s te m s 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. T h e B o a r d a p p r ove s t h e G r o u p’s r i s k m a n a g e m e n t f r a m e w o r k , w h i c h i s i m p l e m e nte d by m a n a g e m e nt, a n d m o n i to r s p e r i o d i ca l l y r ev i e w s t h e key r i s k s . T h e G r o u p 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 G r o u p, t h e f u n c t i o n s p e r fo r m e d by a n i nte 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 i n d e p e n d e nt e x te r n a l a u d i to r s . 3.12. 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 c o 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 c o 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 c e, 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 n t 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 B o a r d r ev i e w s i t s p e r fo r m a n c e a n d 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 ce o f i n d i v i d u a l D i r e c to r s a n n u a l l y. T h e s e p e r fo r m a n ce r ev i e w s a r e g e n e r a l l y c o n d u c te d i nte r n a l l y a n d t h e B o a r d w i l l s e e k a n e x te r n a l l y - fa c i l i ta te d p e r fo r m a n ce r ev i e w i f i t c o n s i d e r s i t a p p r o p r i a te to d o s o. 3.13. COMMUNI CATI ON WIT H SHAR E H OL D ER S T h e B o a r d a i m s to e n s u r e t h a t s h a r e h o l d e r s 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 co m m u n i c a te d to 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 l e a s e o f m a te r i a l i n fo r m a t i o n to t h e A SX , i n c l u d i n g m e d i a a n d m a r ket u p d a te s ; 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 . 26 ANNUAL REPORT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 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 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 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 d i s c l o s u r e o f i n fo r m a t i o n to t h e A SX . 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 f te r 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 nta 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 ce 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 n t 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 . 3.14. 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 t h e i r 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 c e, i f a t t h e e x p e n s e o f t h e G r o u p, 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. 27 ANNUAL REPORT3.15. ASX RECOMMENDA TI ONS Complied Note 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. P P P P P P P 2.1 The board of a listed entity should: (a) have a nomination committee which: (1) has at least -- 1 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. 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership. 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 P P P 28 ANNUAL REPORT Complied Note 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. P P P P P P P P P P P __ P 2 3 29 ANNUAL REPORT Complied Note 4 5 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. P -- P P N o t e s : 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 c a 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 c o 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 R i s k 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 R i s k 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 4: 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 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, N ote 5: 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 . 30 ANNUAL REPORT 4. 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 c o 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 t e d L eve l 2 , 6 0 7 B o u r ke S t r e e t M e l b o u r n e, V i c t o 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 2 018 . 31 ANNUAL REPORTCO N SO L I DAT E D S TAT E M E N T O F PR O 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 F O R T H E YE AR E N D E D 3 0 J U N E 2 018 Note Consolidated Group 2018 $ 2017 $ Revenue from the sale of licenses and maintenance contracts Revenue from professional services Other income Settlement on Chiron Software Litigation Total revenue from continuing operations Salaries and related costs Direct external costs General and administration costs interest, tax, depreciation and Earnings before amortisation Finance costs Depreciation Amortisation Impairment Non-operating foreign exchange gains/(losses) (Loss)/profit before income tax Income tax benefit/(expense) Net (loss)/profit for the year (after tax) Other comprehensive income Exchange differences on translating foreign operations Total comprehensive (loss)/profit for the year Net (loss)/profit for the year attributable to: Owners of the parent Non-controlling interest Total comprehensive (loss)/profit 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 before tax per share (cents per share) Diluted earnings per share before tax (cents per share) 2 2 2 2 3 3 3 3 3 3,9 3,9 4 17 18 25 25 25 25 3,880,443 1,408,076 682,352 - 5,970,871 (4,172,422) (207,310) (1,729,593) (138,454) (110,060) (63,624) (132,778) - (166) (445,082) 23,848 (421,234) - (421,234) (421,234) - (421,234) (421,234) - (421,234) (1.259) (1.183) (1.330) (1.250) 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 T h e a b ove 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 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 cc o m p a ny i n g n ote s . 32 ANNUAL REPORT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 A S AT 3 0 J U N E 2 018 Consolidated Group Note 2018 $ 2017 $ 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 Net Assets Equity Contributed equity Reserves Accumulated losses Total Parent Entity Interest Non-controlling interest Total Equity 5 6 7 4 6 8 9 10 11 12 13 14 12 13 14 10 15 16 17 18 1,157,536 2,262,567 187,752 805,136 2,543,412 1,821,098 185,969 481,842 4,412,991 5,032,321 - 87,694 6,533,971 517,819 7,139,484 11,552,475 1,312,032 515,657 574,201 1,427,676 3,829,566 140,911 150,738 4,817,920 596,599 5,706,168 10,738,489 1,079,282 389,880 506,469 1,462,960 3,438,591 1,170,513 1,078,880 17,121 - 1,984,923 3,172,557 7,002,123 30,764 46,128 1,282,415 2,438,187 5,876,778 4,550,352 4,861,711 20,898,742 152,454 (16,500,920) 4,550,276 76 20,836,242 105,079 (16,079,686) 4,861,635 76 4,550,352 4,861,711 T h e a b ove 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 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 . 33 ANNUAL REPORTCO N S O L I DAT E D S TAT E M E N T O F C H A N G E S I N E Q U I T Y F O R T H E YE AR E N D E D 3 0 J U N E 2 018 Issued capital ordinary Option reserve Currency translation reserve Total Retained attributable earnings to owners of the parent Non- Controlling interest Total equity Consolidated Group Balance 1 July 2017 20,836,242 80,845 24,234 (16,079,686) 4,861,635 76 4,861,711 Issue of share capital Options revaluation 62,500 - Transactions with owners 62,500 - 47,375 47,375 Profit/(loss) for the period Other comprehensive income: Exchange difference on translation of foreign operations Total comprehensive profit/ (loss) for the period - - - - - - - - - - - - - - - - - - 62,500 47,375 109,875 (421,234) (421,234) - - - - (421,234) (421,234) - - - - - - - 62,500 47,375 109,875 (421,234) - - (421,234) Balance 30 June 2018 20,898,742 128,220 24,234 (16,500,920) 4,550,276 76 4,550,352 Balance 1 July 2016 20,728,742 29,978 30,485 (17,144,355) 3,644,850 408 3,645,258 Issue of share capital Exercise of options Share based payment 62,500 45,000 - Transactions with owners 107,500 - - 50,867 50,867 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 - - - - - - - - - - - - - - - - - - 1,728,369 (663,700) 62,500 45,000 50,867 158,367 1,728,369 (663,700) - - - - 62,500 45,000 50,867 158,367 (324) 1,728,045 - (663,700) (6,251) - (6,251) (8) (6,259) (6,251) 1,064,669 1,058,418 (332) 1,058,086 Balance 30 June 2017 20,836,242 80,845 24,234 (16,079,686) 4,861,635 76 4,861,711 T h e a b ove c o n s o l i d a te d 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 . 34 ANNUAL REPORTS TAT E M E N T O F C A S H F LOW S F O R T H E Y E AR E N D E D 3 0 J U N E 2 018 Consolidated Group Note 2018 $ 2017 $ 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 inflow/(outflow) from financing activities 5,080,045 4,722,667 - 5,000,000 491,888 (5,232,719) 16,969 (110,060) 246,123 - (580) (1,848,829) (1,849,409) 423,002 (6,491,096) 43,206 (146,500) 3,551,279 - (66,056) (1,154,170) (1,220,226) 602,807 (385,397) - 217,410 - (272,969) (663,700) (936,669) Net (decrease)/increase in cash and cash equivalents held (1,385,876) 1,394,384 Cash and cash equivalents at the beginning of the financial year 2,543,412 1,149,028 Cash and cash equivalents at the end of the financial year 5 1,157,536 2,543,412 T h e a b ove c o n s o l i d a te d 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 c o m p a ny i n g n ote s . 35 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 1. S TA T EMEN T OF SI GN IFICANT ACC OUNT ING POL IC IE 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 n te 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 nt 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. T h e s e p a r a te f i n a n c i a l s ta te m e nt s a n d n ote s o f t h e p a r e nt 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 nt 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 2 7 S e pte m b e r 2 018 B ASIS 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 cco 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 nt 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 n te 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 nt 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 c c 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 c o 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 n t 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 . a. PRINCIPLES OF CONSOLIDATION T h e G r o u p f i n a n c i a l s ta te m e n t 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 2 018 . T h e Pa r e nt co 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 nt 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 nt r o l l e d e nt i t i e s h a ve b e e n i n c o r p o r a te d i nto 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 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 nt r o l l e d e n t i t i e s h a ve e nte 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- co 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 co n s o l i d a t i o n . Acc o 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 co 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 cc u r w h e r e a n a cq u i r e r o bta i n s c o 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 c o 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 36 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) u n d e r c o m m o n c o nt r o l . T h e a c q 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 co m b i n a t i o n o n e o f t h e c o 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 c q 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 c o 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 co n t r o l ove r t h e a c q u i r e e i s o bta i n e d by t h e p a r e nt e n t 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 c o n s o l i d a te d a c c o u n t 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 c e 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 , c o 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 co 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 . 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 c o 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 co 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 c q 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 co 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 c q 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 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 co 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 c o 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 nt 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 n t 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 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 co 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 co 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. b. IMPA IRMENT OF NON-FINANC IAL A SSE TS 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 ca 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 c o 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 c a 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 co 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 cove 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. c. 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 ce 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 : 37 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) SAL ES REV EN UE 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 c o 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 c e – 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 cc 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 nt 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 ce, 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 cc o 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 nt 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 co n s o l i d a te d e nt i t y w i l l c o 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 c e 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 n t 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 . d. GOOD S AND SERVI CES TA X 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 c e s Ta x (G S T ), e x ce 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 co 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 nt o f f i n a n c i a l p o s i t i o n . 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 c o 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 cove 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 c a s h f l o w. 38 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) e . INCOME TAX T h e i n co 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 c e 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 c o 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 co 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 c e 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 cc 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 c o 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 nte 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 c o m p a ny i n t h e G r o u p c o 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. f. 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 c o 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 n t 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 c o 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 c o 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 c o s t s a r e c a 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 c o 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 c a n b e m e a s u r e d r e l i a b l y. T h e e x p e n d i t u r e c a 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 c a 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 r c 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 39 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) g . PLANT 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 r c 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 co 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 c o 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 c a 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 Asset Diminishing Value (%) Leasehold Improvements Plant and Equipment 29 - 37 13 - 67 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 co 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. h. 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 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 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 nta 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 . E x c h a n g e d i f fe r e n ce 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 n to 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. 40 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) i. 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 n t 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 c a 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 n t 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 c o 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 . j. EMPLOYEE BENEF ITS 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 ca 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 n t. O n - c o s t s a r e i n c l u d e d i n t h i s a m o u n t. 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 c e 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 nt h s a r e d i s c o u nte d u s i n g co 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 c e 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 n te 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 co 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 . 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 nt 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 ce 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 41 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) At e a c h r e p o r t i n g d a te, t h e e n t 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 co 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 c o g n i s e d e a c h p e r i o d ta ke s i nto a cco 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 c o 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 . k . TRADE AND OTHER PAYAB LES 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 c e 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 n t s a r e u n s e c u r e d a n d a r e r e co 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 . l. FINANCIAL INSTRUMENTS I n i t i a l r e co 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 n t 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 co 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 c o 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 nt l y m e a s u r e d a t a m o r t i s e d c o 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 nt. Tr a d e r e c e 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 co 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 c e a cc o 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 n t s d u e a c co 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 ce 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 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 c e 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 nt 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 ce 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 co g n i s e d b e co m e s u n co l l e c t i b l e i n a s u b s e q u e nt 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 nt 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 c o m p r e h e n s i ve i n c o m e. 42 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 c o 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 nt. 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 c e a c c 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 c o 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 c c 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 n t 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 co 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 c o g n i s e d i n a c c 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 c o nt r a c t u a l r i g ht s to r e c e i pt o f c a 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 n t c o nt i n u i n g i nvo l ve m e nt 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 ce 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 c a 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 co 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 - ca 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 c o g n i s e d i n p r o f i t o r l o s s . m. 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 c e 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 co 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 ce e d s o f t h e e q u i t y i n s t r u m e nt s to w h i c h t h e co s t s r e l a te. n. 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 43 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 nt. o . CASH AND CASH EQUIVAL EN TS 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. p . 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 c e i ve d a n d a l l g r a nt 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 n t. T h e G ove r n m e nt h a s t h e r i g h t 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 . q. BORROWING 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 . r. CRI TICAL ACCOUNTING ES TIMATE S AND J UDG EM E 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 n t 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. 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 cove 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 co 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 c a 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 ca 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 . ( i i ) D e fe r r e d Ta x A s s et T h e e x te nt to w h i c h d e fe r r e d ta x a s s et s ca n b e r e c o g n i s e d i s b a s e d o n a n a s s e s s m e nt o f t h e p r o b a b i l i t y o f t h e C o m p a ny’s f u t u r e ta x a b l e i n co m e a g a i n s t w h i c h t h e d e fe r r e d ta x a s s et s ca n b e u t i l i s e d . I n a d d i t i o n , s i g n i f i ca n t j u d g e m e nt i s r e q u i r e d i n a s s e s s i n g t h e i m p a c t o f a ny l e g a l o r e c o n o m i c l i m i t s o r u n c e r ta i nt i e s i n va r i o u s ta x j u r i s d i c t i o n s 44 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) ( i i i ) E m p l oye e B e n e f i t s P r ov i s i o n s E m p l oy m e nt o n - c o s t s e x p e n s e s s u c h a s w o r ke r s’ c o m p e n s a t i o n i n s u r a n ce a n d p a y r o l l ta x a r e i n c l u d e d i n t h e ca l u c l a t i o n o f e m p l oye e b e n e f i t p r ov i s i o n s . ( i v) C a p i ta l i s a t i o n o f D eve l o p m e nt C o s t s D i s t i n g u i s h i n g t h e r e s e a rc h a n d d eve l o p m e nt p h a s e s o f a n e w c u s to m i s e d s o f t w a r e p r o j e c t a n d d ete r m i n i n g w h et h e r t h 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 t h e ca p i ta l i s a t i o n o f d eve l o p m e nt c o s t s a r e m et r e q u i r e s j u d g e m e nt. A f te r ca p i ta l i s a t i o n , m a n a g e m e nt m o n i to r s w h et h e r t h e r e co g n i t i o n r e q u i r e m e nt s c o nt i n u e to b e m et a n d w h et h e r t h e r e a r e a ny i n d i ca to r s t h a t ca p i ta l i s e d c o s t s m a y b e i m p a i r e d . s. GOING CON CERN A s a t 3 0 J u n e 2 018 t h e c o m p a ny h a s ca s h r e s e r ve s o f $1,15 7, 5 3 6 (2 017: $ 2 , 5 4 3 , 412) 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 $ 5 8 3 , 4 2 6 (2 017: $1, 5 9 3 , 7 3 0 ). T h e c u r r e n t ye a r l o s s b e fo r e ta x fo r t h e p e r i o d w a s $ 4 4 5 , 0 8 2 (2 017: P r o f i t $1,9 3 2 , 019 - 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). 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 c o n c e 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 co n ce 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 a n d p r ev i o u s 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 cc e s s f u l i n o bta i n i n g co 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 n t i t y. We h a ve p r e p a r e d a n d p r ov i d e d a ca s h f l o w s ta te m e nt fo r t h e n e x t 12 m o nt h s i n d i ca t i n g p o s i t i ve ca s h f l o w s fo r t h i s p e r i o d u p to S e pte m b e r 2 019. 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 ce 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 c o 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 c e 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 t h r o u g h i nte r n a t i o n a l d i s t r i b u to r 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 , i s 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 . A fa c i l i t y l i m i t o f $1, 0 0 0 , 0 0 0 i s a va i l a b l e i m m e d i a te l y to t h e C o m p a ny. 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 ca 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 . t. NEW ACCOUNTING STANDARDS AND AU STRAL IAN ACC OUN TIN G INTERPRETATIONS 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 nt 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 : 45 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) – AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or after 1 January 2019) AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and includes revised requirements for the classification and measurement of financial instruments, revised recognition and de-recognition requirements for financial instruments, revised impairment requirements and simplified requirements for hedge accounting. The revised requirements include: - simplifications to the classification of financial assets - simplifications to the accounting of embedded derivatives - an expected loss impairment model - the irrevocable election to recognise gains and losses on investments in equity instruments that are not - held for trading in other comprehensive income. - a new model for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. The financial assets and liabilities of the Group consist of cash, receivables and payables. Therefore, the directors do not expect a material impact on transition to AASB 9. – AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 January 2019) This Standard will replace the current accounting requirements applicable to revenue with a single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers. The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process: - - identify the contract(s) with a customer; identify the performance obligations in the contract(s); - determine the transaction price; - allocate the transaction price to the performance obligations in the contract(s); and - recognise revenue when (or as) the performance obligations are satisfied. The directors have made a preliminary assessment of the impact as follows: New Licenses: New Licenses under AASB 15 will be recognised over the service period in which they fall due. This is consistent with the approach taken for recurring revenue. Income received in advance for this service period will be classified as a current liability. Recurring licenses: There will be no change under AASB 15 for recognition of recurring licenses. These are recognised over the service period of the contract. Income received in advance for this service period will be classified as a current liability. Professional Fees: For professional service offered to existing clients for ad-hoc services revenue will be recognised when the performance obligation is met which would normally occur when services are rendered. For professional services performed for new clients related to the setup of software, revenue will recognised over the assessed expected life of the client. Our current assessment of client life is for five years. This is based on our longest contract period offered as well as management’s assessment of client life. Other income: Other income will not be significantly impacted by AASB 15. It will be recognised as income when the identified performance obligations have been satisfied. 46 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 cc o u nt s i s a s fo l l o w s : Account 2018 as per current Potential restatement 2018 Restated accounting standards under AASB 15 under AASB 15 requirements requirements $ $ $ P r o f i t a n d L o s s D e c r e a s e i n Reve n u e f r o m t h e s a l e o f l i c e n s e s a n d m a i nte n a n ce c o nt r a c t s D e c r e a s e i n Reve n u e f r o m p r o fe s s i o n a l s e r v i c e s Sta te m e nt o f F i n a n c i a l Po s i t i o n I n c r e a s e i n N e w s u b s c r i pt i o n s/p r o fe s s i o n a l s e r v i c e s i n a d va n c e 3 , 8 8 0 , 4 4 3 (18 8 , 7 9 2)* 3 , 691, 6 51 1, 4 0 8 , 076 ( 8 4 5 , 5 9 2)* 5 62 , 4 8 4 - 1, 0 3 4 , 3 8 4 1, 0 3 4 , 3 8 4 Account 2017 as per current Potential restatement 2017 Restated accounting standards under AASB 15 under AASB 15 requirements requirements Profit and Loss Revenue from the sale of licenses and maintenance contracts Revenue from professional services Statement of Financial Position Increase in New subscriptions/ professional services in advance $ $ $ 8,415,775 1,191,795 (281,984)* (443,251)* 8,133,791 748,544 - 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 nt 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 c c 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 2 018 F i n a n c i a l Ye a r. 47 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) – AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019). AASB 16 will replace the current accounting requirements applicable to leases in AASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases. The main changes introduced by the new Standard include: - - - - - recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets); depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components; variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability using the index or rate at the commencement date; by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and instead account for all components as a lease; and additional disclosure requirements. The directors expect that the adoption of AASB 16 will result in lease assets and liabilities being recognised on balance sheet and a change in how related expenses are incurred. It is expected total property leases of $667,550 will be recognised on the balance sheet as lease assets and liabilities and that annual rental of approximately $154,693 will be reclassified from occupancy costs to depreciation and interest. 48 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) – AASB 2018-1 Annual Improvements to IFRS Standards 2015–2017 Cycle AASB 2018-1 makes a number of relatively minor amendments to AASB 3 Business Combinations, AASB 111 Joint Arrangements, AASB 112 Income Taxes and AASB 123 Borrowing Costs. When these amendments are first adopted for the year ending 30 June 2020, there will be no material impact on the financial statements. – AASB 2018-1 Annual Improvements to IFRS Standards 2015–2017 Cycle Interpretation 22 looks at what exchange rate to use for translation when payments are made or received in advance of the related asset, expense or income. Although AASB 121 The Effects of Changes in Foreign Exchange Rates sets out requirements about which exchange rate to use when recording a foreign currency transaction on initial recognition in an entity’s functional currency, the IFRS Interpretations Committee had observed diversity in practice in circumstances in which an entity recognises a non-monetary liability arising from advance consideration. The diversity resulted from the fact that some entities were recognising revenue using the spot exchange rate at the date of the receipt of the advance consideration while others were using the spot exchange rate at the date that revenue was recognised. Interpretation 22 addresses this issue by clarifying that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the nonmonetary asset or non-monetary liability arising from the payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or receipt of advance consideration. When these amendments are first adopted for the year ending 30 June 2020, there will be no material impact on the financial statements. 49 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 Interest received on financial assets Research and Development grants Other 3. EX P ENS ES Profit before income tax includes the following specific expenses Direct external costs Depreciation of non-current assets Amortisation of Intangibles Impairment of Intangibles Consolidated Group 2018 $ 2017 $ 1,267,218 2,613,225 1,408,076 5,288,519 906,187 2,509,588 1,191,795 4,607,570 - 5,000,000 16,969 491,888 173,495 682,352 43,206 423,002 226,403 5,692,611 5,970,871 10,300,181 Consolidated Group 2018 $ 2017 $ 207,310 63,624 132,778 - 263,754 87,931 266,021 917,381 Wages and salaries, net of Capitalised Development cost 4,172,422 4,954,609 Travel and accommodation Operating lease expense Finance cost (interest expense and bank charges) 198,054 154,693 110,060 116,222 149,700 146,500 50 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 4. I NC O ME T AX EX PE NSE The major components of tax expense comprise: (Increase) in Current Tax Increase/(decrease) in Deferred Taxes The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: (Loss)/profit from continuing operations before income tax Prima facie tax/(tax benefit) at 27.5% (2017: 30%) Add tax effect of: Other expenses (non-deductible) Entertainment (non-deductible) Legal expenses (non-deductible) Legal Expenses deducted in 2016 Tax Losses not recognised as a deferred tax asset Prior period differences Less tax effect of: Tax losses deducted Grants receivable Refundable tax offsets Tax losses recognised Consolidated Group 2018 $ 2017 $ (805,136) 781,288 (23,848) (481,842) 685,816 203,974 (445,082) (122,398) 44,903 2,185 2,829 - 122,398 176,105 - - (249,870) - 1,932,019 579,606 19,965 17,712 5,815 182,858 - 1,122,211 (1,098,248) (126,901) (149,537) (349,507) Income tax (benefit)/expense recognised (23,848) 203,974 Current and Deferred tax balances: Assets: CURRENT/NON-CURRENT Current tax asset Deferred tax asset Liabilities: Deferred tax liability 805,136 517,819 481,842 596,599 1,984,923 1,282,415 51 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 5. CA S H A ND C ASH E QUIVAL ENTS Cash at bank and on hand Deposits at call Total cash and cash equivalents 6. T R AD E A ND OT HER RE CEIVAB L E S Current Trade receivables R&D Tax Offset Impairment of receivables Non-Current Trade receivables Consolidated Group 2018 $ 2017 $ 657,289 500,247 384,966 2,158,446 1,157,536 2,543,412 Consolidated Group 2017 $ 2017 $ 1,502,222 1,850,658 789,905 (29,560) 2,262,567 - (29,560) 1,821,098 - - 140,911 140,911 Total Trade Receivables 2,262,567 1,962,009 P r ov i s i o n f o r I m p a i r m e n t o f C u r r e n t T r a d e R e ce i va b l e s C u r r e nt t r a d e r e c e 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 co 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 balance Consolidated Group 2018 $ 2017 $ 29,560 - - - 911 28,649 - - 29,560 29,560 52 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) T r a d e r e ce i va b l e s - i m p a i r e d A s a t 3 0 J u n e 2 018 , t h e fo l l o w i n g t r a d e r e ce 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 (2 017: $ 2 9, 5 0 0 ). 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 Consolidated Group 2018 $ 2017 $ - - - - 29,560 29,560 T r a d e r e ce i va b l e s t h a t a r e p a s t d u e b u t n o t i m p a i r e d A s o f 3 0 J u n e 2 018 , t r a d e r e c e i va b l e s o f $ 5 5 0 , 318 (2 017: $ 4 9 0 , 4 67 ) 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 nt 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 F a i r Va l u e s Consolidated Group 2018 $ 2017 $ 91,436 19,612 439,270 150,759 131,287 208,421 T h e c a 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. OT HE R A S SET S Current Prepayments - Expenses Security bond - Property at Level 2, 607 Bourke Street Melbourne Consolidated Group 2018 $ 2017 $ 79,287 108,465 187,752 77,504 108,465 185,969 53 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 equipment Leasehold improvements – at cost Accumulated amortisation Plant and equipment – at cost Accumulated depreciation Total property, plant and equipment Consolidated Group 2018 $ 2017 $ 178,787 (135,765) 43,022 232,842 (188,170) 44,672 87,694 178,787 (117,727) 61,060 344,221 (254,543) 89,678 150,738 b . PROPERTY, PL ANT AND EQ UIP ME NT R ECO NCIL IA TION Movement in Carrying Amount Leasehold improvements Carrying amount – as at 1 July Additions Amortisation Carrying amount – as at 30 June Plant and equipment Carrying amount – as at 1 July Additions Disposal, net Depreciation Carrying amount – as at 30 June Total property, plant and equipment Consolidated Group 2018 $ 2017 $ 61,060 - (18,038) 43,022 89,678 580 - (45,586) 44,672 87,694 86,722 - (25,662) 61,060 85,891 66,056 - (62,269) 89,678 150,738 54 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 9. I NT A NG IB LE AS SET S a . INTANGIBLE ASSET SUMMA RY Intangible assets Consolidated Group 2018 $ 2017 $ Products under development – at cost* 5,794,972 3,946,143 Developed Products Cost Accumulated amortisation Accumulated Impairment Total Developed Products Total intangible assets 2,844,203 (1,187,823) (917,381) 738,999 2,844,203 (1,055,045) (917,381) 871,777 6,533,971 4,817,920 * 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 n te 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 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. b. INTANGIBLE ASSET RECONCILIATION Movement in Carrying Amount Products under Development Developed Products Total Carrying amount – as at 1 July 2016 Additions Transfer of commercialised product Disposals Amortisation charge Impairment $ 2,838,462 1,107,681 - - - - Carrying amount – as at 30 June 2017 3,946,143 Carrying amount – as at 1 July 2017 Additions Transfer of commercialised product Disposals Amortisation charge Impairment 3,946,143 1,848,829 - - - - $ $ 2,008,690 46,488 - - (266,020) (917,381) 871,777 871,777 - - - 4,847,152 1,154,169 - - (266,020) (917,381) 4,817,920 4,817,920 1,848,829 - - (132,778) (132,778) - - Carrying amount – as at 30 June 2018 5,794,972 738,999 6,533,971 55 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) c . IMPAI RMENT DISCLOSURES I M PA I R M E N T T E S T I N G O F PRO D U C T S U N D E R D E V E LO PM E N T I r r e s p e c t i ve o f w h et h e r t h e r e i s a ny i n d i ca t i o n o f i m p a i r m e nt, t h e co m p a ny w i l l te s t a n i nta n g i b l e a s s et w i t h a n i n d e f i n i te u s e f u l l i fe o r a n i nta n g i b l e a s s et n ot yet a va i l a b l e fo r u s e fo r i m p a i r m e nt a n n u a l l y by co m p a r i n g i t s ca r r y i n g a m o u nt w i t h i t s r e cove r a b l e a m o u nt. T h i s i m p a i r m e nt te s t i s p e r fo r m e d a s a t t h e e n d o f t h e f i n a n c i a l p e r i o d . 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 n t s a s o u t l i n e d i n N ote 2 6 . 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 c a 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 (s a l e s) • E m p l oy m e nt 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 c a 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 Hospitals Consumer Connectivity Allied Health Sales Growth Rates Discount Rates 2018 2.1% 2.1% 2.1% 2.1% 2017 3.4% 3.4% 3.4% 3.4% 2018 10% 10% 10% 10% 2017 10% 10% 10% 10% 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 c e 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 cove 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 n t h a s b a s e d t h e va l u e - i n - u s e ca 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 c a 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 ca 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 c a 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 h te 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 co 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 . T h e ta b l e b e l o w d i s c l o s e s t h e e x p e c te d s u b s c r i b e r g r o w t h r a te s a s a n a ve r a g e fo r t h e n e x t 5 ye a r s a n d t h e i r s e n s i t i v i t y to c h a n g e. T h e s e n s i t i v i t y te s t r a n g e r e p r e s e nt s r e d u c t i o n s to s u b s c r i b e r g r o w t h r a te s a p p l i e d to e a c h CG U to te s t a t w h i c h p o i nt i m p a i r m e n t i n d i ca to r s e x i s t. B a s e d o n t h e i m p a i r m e nt te s t i n g p e r fo r m e d fo r e a c h CG U, t h e r e w e r e n o i m p a i r m e nt i n d i ca to r s fo r p r o d u c t s u n d e r d eve l o p m e nt. Subscriber Growth (5 year average) 2018 13% 13% 13% 13% 2017 13% 13% 13% 13% Sensitivity Test Range (Reduction of Growth) 2018 2017 10% - 80% 10% - 80% 10% - 80% 10% - 80% 10% - 80% 10% - 80% 10% - 80% 10% - 80% Hospitals Consumer Connectivity Allied Health 56 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 10. DEF ER RE D T AX BA LANC ES Deferred tax asset Opening Balance $ Opening balance at 1 July 2017 596,599 Future income tax benefits attributable to tax losses Accrued expenses Provisions Closing balance at 30 June 2018 349,507 51,216 195,876 Recognised in Profit or Loss Recognised directly in Equity Total $ $ (49,917) (51,216) 22,353 $ - - - Deferred tax liability Opening Balance Recognised in Profit or Loss Recognised directly in Equity $ $ Opening balance at 1 July 2017 1,282,415 Prepayments and other assets 986 Intangible assets 1,281,430 18,571 683,936 Closing balance at 30 June 2018 $ - - 299,590 - 218,229 517,819 Total $ 19,557 1,965,366 1,984,923 Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income, based on the Group’s forecast of future operating results which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in full. 11. P AY A B LES Trade creditors Other creditors and accruals Consolidated Group 2018 $ 2017 $ 437,506 874,526 469,635 609,647 1,312,032 1,079,282 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. 57 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 12. I N TER ES T B EA R I N G LI ABIL ITIE S Current Borrowings Non-Current Borrowings Consolidated Group 2018 $ 2017 $ 515,657 515,657 389,880 389,880 1,170,513 1,170,513 1,078,880 1,078,880 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 % . 13. EMP LO Y EE BE NEFI TS Analysis of Employee Benefits Consolidated Group Opening balance at 1 July Amounts taken during the year Amount provided during the year Closing Balance 30 June Current Employee benefits Non – Current Employee benefits 14. U NEA R NED INC O ME Consolidated Group 2018 $ 2017 $ 537,233 (214,140) 268,229 591,322 569,371 (254,744) 222,606 537,233 574,201 506,469 17,121 591,322 30,764 537,233 Consolidated Group 2018 $ 2017 $ Current Annual subscriptions and maintenance in advance 1,427,676 1,462,960 Non-Current Annual subscriptions and maintenance in advance - 1,427,676 46,218 1,509,178 A n n u a l l i c e n ce a n d m a i nte n a n ce i n a d va n c e 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 p r ov i d e d to c l i e nt s . 58 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 15. CO N TR I BU TE D EQU ITY Consolidated Group 2018 Number 2018 $ 2017 Number 2017 $ Issued and paid up capital 33,470,259 20,898,742 33,354,995 20,836,242 Ordinary shares Opening balance Add: Shares issued for the purchase of the medical software assets of Abaki Pty Ltd Add: Shares issued under Exempt Employee Share Plan Add: Shares issued from exercise of options 33,354,995 20,836,242 32,846,662 20,728,742 115,264 62,500 208,333 62,500 - - - - - - 300,000 45,000 Total number of shares on issue 33,470,259 20,898,742 33,354,995 20,836,242 a . ORD INARY 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 ce 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. 59 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 exercisable on or before 5 July 2017 Opening balance Issued Exercised Cancelled Closing balance (ii) $0.65 options exercisable on or before 19 December 2017 Opening balance Issued Exercised Cancelled Closing balance (iii) $0.75 options exercisable on or before 26 May 2019 Opening balance Issued Exercised Cancelled Consolidated Group 2018 Number 2017 Number - - - - - 300,000 - (300,000) - - 530,000 530,000 - - (530,000) - - - - 530,000 300,000 300,000 - - - - - - Closing balance 300,000 300,000 (iv) $0.65 options exercisable on or before 10 June 2020 Opening balance Issued Exercised Cancelled Closing balance (v) $0.75 options exercisable on or before 30 November 2019 Opening balance Issued Exercised Cancelled 310,000 390,000 - - - 310,000 400,000 - - - - - (80,000) 310,000 - 400,000 - - Closing balance 400,000 400,000 (vi) $0.75 options exercisable on or before 30 November 2021 Opening balance Issued Exercised Cancelled Closing balance TOTAL 600,000 - - - 600,000 1,610,000 - 600,000 - - 600,000 2,140,000 60 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) c . CAPITAL MANAGEMENT M a n a g e m e nt c o nt r o l s t h e c a 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 c o 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 n t 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 2 018 a n d 3 0 J u n e 2 017 a r e a s fo l l o w s : Gearing Ratios Borrowings Less Cash and Cash Equivalents Net Debt Total equity Total capital Gearing Ratio 16. R ES ER VES Consolidated Group 2018 $ 2017 $ 1,686,170 (1,157,536) 528,634 4,550,352 5,078,986 10% 1,468,760 (2,543,412) (1,074,652) 4,861,711 3,787,059 (28%) a. CURRENCY TRANSLATI ON RESE R 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 ce 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 currency translation reserve Balance at beginning of financial year Exchange differences on translation of foreign operations Balance at the end of the financial year Consolidated Group 2018 $ 2017 $ 24,234 - 24,234 30,485 (6,251) 24,234 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 of option reserve Balance at beginning of financial year Share based payment expense Balance at the end of the financial year Consolidated Group 2018 $ 2017 $ 80,845 47,375 128,220 29,978 50,867 80,845 61 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 17. A CCU MUL AT ED LO SS ES Consolidated Group 2018 $ 2017 $ Accumulated losses at the beginning of the financial year (16,079,686) (17,144,355) Net profit attributable to the members of the parent entity Dividends paid (421,234) - 1,728,369 (663,700) Accumulated losses at the end of the financial year (16,500,920) (16,079,686) 18. N O N- CO NT RO LLI N G INT ERE ST 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 - c o 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 : Balance at the beginning of the financial year Non-controlling interests attributable to this entity is as follows: - share of profit/(loss) - share of currency translation reserve Balance at the end of the financial year Consolidated Group 2018 $ 2017 $ 76 - 76 408 (324) (8) 76 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 nt 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 Place of Incorporation Type of Security Interest Interest 2018 2017 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 Ordinary Shares Ordinary Shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Statewide Unit Trust Western Australia Units 100% 100% 94% 94% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 62 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 co 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 nt 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 Assets Cash and cash equivalents Trade and other receivables Financial Liabilities Financial liabilities at amortised cost: Trade and other payables Borrowings Consolidated Group 2018 $ 2017 $ 1,157,536 2,262,567 2,543,412 1,962,009 3,420,103 4,505,421 (1,312,032) (1,686,170) (1,079,282) (1,468,760) (2,998,202) (2,548,042) 5 6 11 12 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 c o 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 nt 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 c a 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 c e 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 c e 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 ce 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 c a 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 co n s i d e r e d ve r y l o w. 63 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) Cash at Bank and deposits Australian banks Malaysian banks Consolidated Group 2018 $ 2017 $ 1,143,744 13,792 2,529,019 13,791 1,157,536 2,542,810 b . LIQUIDI TY RISK 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 c e 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 c a 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 co u nte d ca s h f l o w s . Group 30 June 2018 Financial liabilities due for payment Within 1 year 1 to 5 years Over 5 years contracted $ $ $ $ cash flows Total Trade and Other Payables (1,312,032) - Borrowings (515,657) (1,170,513) Total expected outflows (1,827,689) (1,170,513) Financial assets – cash flows realisable Cash and cash equivalents Trade and other receivables Total anticipated inflow on financial instruments Net inflow/(outflow) on financial instruments 1,157,536 2,262,567 3,420,103 - - - 1,592,414 (1,170,513) - - - - - - - (1,312,032) (1,686,170) (2,998,202) 1,157,536 2,262,567 3,420,103 421,901 64 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) Group 30 June 2017 Financial liabilities due for payment Within 1 year 1 to 5 years Over 5 years contracted $ $ $ $ cash flows Total Trade and Other Payables (1,079,282) - Borrowings (389,880) (1,078,880) Total expected outflows (1,469,162) (1,078,880) Financial assets – cash flows realisable Cash and cash equivalents Trade and other receivables Total anticipated inflow on financial instruments Net inflow/(outflow) on financial instruments c. MARKET RISK 2,543,412 1,821,098 - 140,911 4,364,510 140,911 2,895,348 (937,969) - - - - - - - (1,079,282) (1,468,760) (2,548,042) 2,543,412 1,962,009 4,505,421 1,957,379 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 nte 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 - ca 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 c o 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 to foreign currency Consolidated Group 2018 MYR 41,100 - 41,100 2017 MYR 48,181 - 48,181 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. 65 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) ( i i i ) S e n s i t i v i t y A n a l y s i s In te rest Rate Risk and Forei gn C u rrenc y Ris 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 nt 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 co n s ta nt. Change in profit after tax +/- in interest rate by 0.5% +/- in $A/MYR rate by 15% Change in Equity +/- in interest rate by 0.5% +/- in $A/MYR rate by 15% Consolidated Group 2018 $ 2017 $ +/-5,800 +/-2,100 +/-11,000 +/-2,500 +/-5,800 +/-2,100 +/-11,000 +/-2,500 ( 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 c o nt r o l s t h e c a 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 c o n c e 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 c a 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 ca p i ta l r e q u i r e m e nt s . Fair v alue estimat ion 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 n t 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 ca 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 ce 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. Financial assets Cash and cash equivalents Trade and other receivables Total financial assets Financial liabilities Trade and other payables Borrowings Total financial liabilities 2018 2017 Net Carrying Value Net Fair value Net Carrying Value Net Fair value $ 1,157,536 2,262,567 $ 1,157,536 2,262,567 $ 2,543,412 1,962,009 $ 2,543,412 1,962,009 3,420,103 3,420,103 4,505,421 4,505,421 (1,312,032) (1,686,170) (1,312,032) (1,686,170) (1,079,282) (1,468,760) (1,079,282) (1,468,760) (2,998,202) (2,998,202) (2,548,042) (2,548,042) 66 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 nt 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 ce 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 c o n s i d e r a t i o n . T h e e x e rc i s e p r i c e 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 ce 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 n t 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 c o 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 c a 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 balance Consolidated Group 2018 Number 2017 Number 2,140,000 - - (530,000) 1,610,000 1,520,000 1,000,000 (300,000) (80,000) 2,140,000 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 ce 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 . 2 0 o n 3 0 J u n e 2 018 ($ 0 . 3 2 o n 3 0 J u n e 2 017 ). 67 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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: Consolidated and parent entity - 2018 Balance at Granted Exercised Grant Date Expiry Exercise start of the during the during the Date Price year year year Number Number Number Expired/ Balance forfeited at the during end of the year the year Number Number Exercisable at the end of the year Number 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 TOTALS $0.65 $0.75 $0.65 $0.75 $0.75 Weighted average exercise price Weighted average share price 530,000 300,000 310,000 400,000 600,000 2,140,000 $0.71 $0.2600 - - - - - - - - - - - - - - (530,000) - - - - - 300,000 310,000 400,000 600,000 - 300,000 310,000 200,333 240,000 (530,000) 1,610,000 1,050,333 $0.65 $0.73 $0.73 Consolidated and parent entity - 2017 Balance at Granted Exercised Grant Date Expiry Exercise start of the during the during the Date Price year year year Number Number Number 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 $0.75 300,000 530,000 300,000 390,000 - - - - - - 400,000 600,000 (300,000) - - - - - Expired/ forfeited during the year Number - - - (80,000) - - Balance at Exercisable the end of at the end the year of the year Number Number - 530,000 300,000 310,000 400,000 600,000 - 530,000 300,000 260,000 133,333 120,000 TOTALS 1,520,000 1,000,000 (300,000) (80,000) 2,140,000 1,343,333 Weighted average exercise price Weighted average share price $0.57 $0.3916 $0.75 $0.15 $0.65 $0.71 $0.67 b. EXEMPT EMPLOYEE SHARE P LAN (‘E E SP’) 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 ce 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 ca 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 c e 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 . 68 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 c a 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 c e 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 ce 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 (2 017: N i l). 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 n t N o n - E x e c u t i ve M r D G r o e nve l d P r i n c i p a l A r c h i te c t M r K J a ye s u r i a C h i e f O p e r a t i n g O f f i ce 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 2 018 . 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 : Short-term employee benefits Other long-term benefits Share-based payments Post-employment benefits S h a r e s Consolidated Group 2018 $ 2017 $ 665,246 9,365 47,374 107,862 829,847 653,661 6,624 34,866 101,350 796,501 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 2 018 a r e: Total number of shares Number of shares sold Number of shares acquired 2018 2017 2018 2017 2018 2017 Mr D Groenveld Mr K Jayesuria 300,000 300,000 4,000 304,000 4,000 304,000 - - - - - - - - - 300,000 - 300,000 69 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 2 018 a r e: Total number of options Number of option granted Number of options during the year exercised during the year 2018 2017 2018 2017 2018 2017 Mr D Groenveld - - Mr K Jayesuria 600,000 600,000 600,000 600,000 - - - - 300,000 300,000 - - - - - - L o a n s Pa ya b l e T h e C o m p a ny c u r r e nt l y h a s o u t s ta n d i n g $ 61, 7 94 p a ya b l e to M a t h e w C h e r i a n (2 017: $ 47, 5 0 5) r e l a te d to w a g e s p a y m e nt s i n a r r e a r s . 23. R EMU NER A TI ON O F AUD ITORS Amounts received, or due and receivable by the auditors of the entity for: ShineWing Australia Taxation services for controlled entities Auditing or reviewing the financial report - TY Teoh International (Malaysia) [Part of the MSI Group Alliance] Auditing or reviewing the financial report of controlled entities Taxation services for controlled entities - J Wong and Associates (Singapore) Auditing or reviewing the financial report 24. CO MMI TME NT S AN D CONTINGE NCIE S a. OPERA TI NG LEASE COMMITMEN TS Consolidated Group 2018 $ 2017 $ 3,409 106,357 601 - 4,240 114,607 - 65,000 3,150 1,500 1,500 71,150 Consolidated Group 2018 $ 2017 $ Future operating lease rentals not provided for in the financial statements and payable: Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years 214,907 452,643 - 667,550 162,725 547,156 - 709,881 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 ce c o m m e n ce d o n 14 J u l y 2 014 w i t h r e d u ce 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 . 70 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) b . GUARANTEES The parent has provided a cash security bond in favour of the property owner of the parent entity’s leased premises in Melbourne, Australia. Consolidated Group 2018 $ 2017 $ 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 2 018 . 25. EA R NI N GS P ER S HA RE Consolidated Group 2018 $ 2017 $ The following reflects the income and share data used in the calculations of basic and diluted earnings per share: (Loss)/profit after tax from continuing operations attributable to owners of the parent Net (loss) from continuing operations attributable to non-controlling interests Earnings used in calculating basic and diluted earnings per share (after tax) Earnings from continuing operations used in calculating basic and diluted earnings per share (before tax) Weighted average number of ordinary shares used in calculating basic earnings per share: (421,234) 1,728,369 - (324) (421,234) 1,728,045 (445,082) 1,932,019 Number of Shares Number of Shares 33,450,679 33,152,050 Weighted average number of ordinary shares used in calculating diluted earnings per share: 35,590,680 35,292,050 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) 2018 Cents (1.259) (1.183) (1.330) (1.250) 2017 cents 5.212 4.896 5.827 5.474 E a r n i n g s p e r s h a r e fo r d i s c o n t i n u e d o p e r a t i o n s w a s N I L (2 017: N I L). 26. S EGMENT INF OR MA TION OPERATI NG SEGMENT 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 ce 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 rc e s . 71 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 n t 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 co 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 c a 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 cco 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 nt 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 nt s . 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 n te 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 ca 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 . SEGMENT ACCOUNTING POLI CIE S T h e G r o u p g e n e r a l l y a c c o u nt s fo r i nte r- s e g m e nt 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 c co 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 . GEOGRAPHICAL SEGMENTS 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 c e 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 r ce 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 rca 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 c a 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 . 72 ANNUAL REPORTNOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) ) d e u n i t n o c ( n o i t a m r o f n I t n e m g e S 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 g n i t r o p e R y r a m i r P 7 1 0 2 8 1 0 2 7 1 0 2 8 1 0 2 7 1 0 2 8 1 0 2 7 1 0 2 8 1 0 2 7 1 0 2 8 1 0 2 s t n e m g e S s s e n i s u B 1 8 1 , 0 0 3 , 5 1 7 8 , 0 7 9 , 5 - 0 0 0 , 0 0 0 , 5 - 0 0 0 , 0 0 0 , 5 1 8 1 , 0 0 3 , 0 1 1 7 8 , 0 7 9 , 5 0 0 0 , 0 0 0 , 5 - - - - - - - - - 4 2 7 , 5 7 4 8 9 4 , 3 8 5 8 3 3 , 5 3 7 , 3 8 8 2 , 7 7 2 , 4 9 1 1 , 9 8 0 , 1 5 8 0 , 0 1 1 1 , 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 t n e m e l t t e s h t l a e H A S y t i t n e d e t a d i l o s n o c e u n e v e R 4 2 7 , 5 7 4 8 9 4 , 3 8 5 8 3 3 , 5 3 7 , 3 8 8 2 , 7 7 2 , 4 9 1 1 , 9 8 0 , 1 5 8 0 , 0 1 1 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 9 6 3 , 8 2 7 , 1 ) 4 3 2 , 1 2 4 ( 0 7 4 , 7 5 5 ) 2 9 9 , 9 5 8 , 2 ( 9 4 1 , 9 1 3 6 7 0 , 1 7 4 6 7 4 , 1 8 7 1 1 9 , 6 3 7 , 1 4 7 2 , 0 7 1 7 7 , 0 3 2 x a t r e t f a t fi o r p t n e m g e S 9 8 4 , 8 3 7 , 0 1 5 7 4 , 2 5 5 , 1 1 1 4 4 , 8 7 0 , 1 8 7 7 , 6 7 8 , 5 3 2 1 , 2 0 0 , 7 5 1 4 , 2 8 2 , 1 - - 8 4 0 , 7 6 8 7 5 9 , 8 2 1 , 1 4 8 9 , 7 0 8 , 6 0 2 7 , 5 7 2 , 8 6 1 0 , 5 8 9 , 1 8 9 7 , 7 4 1 2 , 2 7 3 , 2 1 4 7 7 2 , 4 8 6 8 0 9 , 7 3 2 , 3 4 3 0 , 6 1 0 , 5 3 8 0 , 4 4 9 2 1 8 , 1 0 3 1 , 1 8 3 , 7 1 9 - 1 2 0 , 6 6 2 8 7 7 , 2 3 1 - - - - 1 3 9 , 7 8 4 2 6 , 3 6 7 6 1 , 0 4 1 7 0 , 9 2 - 9 7 5 , 1 7 7 8 , 3 2 - 1 1 0 , 1 5 7 9 , 2 1 5 1 2 , 4 3 0 8 4 , 7 8 1 1 8 3 , 7 1 9 - 5 5 8 , 4 2 7 1 1 , 5 9 - 0 7 9 , 1 1 4 4 6 , 4 5 - 7 8 6 , 8 6 8 6 , 4 2 s e i t i l i b a i l t n e m g e S t n e m g e s r e h t O : n o i t a m o r f n i 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 r p e D n o i t a s i t r o m A t n e m r i a p m I - n o N e h t n i r e m o t s u c e l g n i s a n o d e d n e p e d s e u n e v e r s ’ y n a p m o C e h t f o ) % 4 . 4 r o 5 4 1 , 0 5 4 $ : 7 1 0 2 ( % 5 . 9 1 r o 4 0 8 , 4 6 1 , 1 $ , 8 1 0 2 g n i r u D . t n e m g e s e t u c A 1 8 1 , 0 0 3 , 0 1 9 6 3 , 8 2 7 , 1 9 8 4 , 8 3 7 , 0 1 8 7 7 , 6 7 8 , 5 1 7 8 , 0 7 9 , 5 ) 4 3 2 , 1 2 4 ( 5 7 4 , 2 5 5 , 1 1 3 2 1 , 2 0 0 , 7 - 5 1 5 , 9 ) 1 8 9 , 7 3 ( 3 9 7 , 3 1 - 0 0 0 , 5 1 2 2 2 , 3 2 2 9 , 1 4 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 1 7 8 , 5 5 9 , 5 ) 6 5 4 , 4 2 4 ( 3 5 5 , 0 1 5 , 1 1 3 2 1 , 2 0 0 , 7 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 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 7 1 0 2 8 1 0 2 7 1 0 2 8 1 0 2 7 1 0 2 8 1 0 2 l i a c h p a r g o e G g n i t r o p e R y r a d n o c e S 73 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 27. CO NS O LID AT ED ST AT E MENT OF CAS H F L OW S Re c o n c i l i a t i o n o f O p e r a t i n g ( L o s s)/ P r o f i t b e fo r e I n c o m e Ta x to N et C a s h p r ov i d e d by O p e r a t i n g Ac t i v i t i e s Consolidated Group 2018 $ 2017 $ Operating (loss)/profit before income tax (445,082) 1,932,019 Add /(deduct) non-cash items: Amortisation of Intangibles Depreciation of fixed assets Impairment of intangible assets Employee share option expense Net cash (outflow)/inflow from operating activities before change in assets and liabilities Change in assets and liabilities during the period: (Increase) in trade and other receivables (Increase)/decrease in other assets Increase/(decrease) in provisions Increase/(decrease) in trade and other payables Net cash inflow from operating activities 132,778 63,624 - 47,375 266,021 87,931 917,381 50,687 (201,305) 3,254,039 (300,558) (246,295) 54,089 940,192 246,123 (111,306) 700,749 (32,138) (260,065) 3,551,279 28. EV ENT S S UBS EQ UENT T O R EPORTING 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 V ID ENDS N o D i v i d e n d s w e r e d e c l a r e d o r p a i d i n 2 018 . 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 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 ce nt e a c h . 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: Dividend Details Special Dividend Special Dividend TOTAL 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 74 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (CONTINUED) 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 Liabilities Current Liabilities Non-Current Liabilities Total Liabilities Net Assets Equity Contributed equity Reserves Accumulated Losses Total Equity Financial Performance (Loss)/profit for the year after tax Other comprehensive income Total Comprehensive (loss)/income Global Health Limited 2018 $ 2017 $ 4,371,068 7,139,465 11,510,533 4,935,761 5,572,401 10,508,162 3,829,566 3,172,557 7,002,123 3,484,719 2,392,059 5,876,778 4,508,410 4,631,384 20,898,742 20,836,242 152,454 80,846 (16,542,786) (16,285,704) 4,508,410 4,631,384 (424,456) 1,766,025 - - (424,456) 1,766,025 Other than that stated in Note 24 to the financial statements, the Company is not subject to any contingent liabilities or contractual commitments 75 ANNUAL REPORT5. 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’): a . 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 3 2 to 75 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 2 018 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 . 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 i i . 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 b. 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. 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 c e r fo r t h e ye a r e n d e d 3 0 J u n e 2 018 . 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 Steve n L e i g h P y nt N o n - E x e 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 pte m b e r 2 018 76 ANNUAL REPORT6. SHAREHOLDER INFORMAT ION 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 2 5 S e pte m b e r 2 018 . 6.1. SHAR EHOLDING 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 Category (size of holding) Number of Holders No. of Shares 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over 35 140 85 103 31 394 10,375 441,161 668,418 3,799,682 28,510,623 33,430,259 TOTAL 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 rc e l o f 2 , 3 8 0 s e c u r i t i e s ($ 0 . 21 p e r s h a r e 2 5 S e pte m b e r 2 018 ) i s 6 4 a n d t h ey h o l d 6 0 ,12 4 s e c u r i t i e s . A n u n m a r keta b l e p a rce l o f s h a r e s i s g e n e r a l l y a p a rce 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 shares held % of issued shares MICRON HOLDINGS PTY LTD (Cherian Family Account) MICRON HOLDINGS PTY LTD (Micron Holdings Pty Ltd Superfund A/c) MRS ELIZABETH MAY PRISCILLA THOMAS PACIFIC NOMINEES LIMITED ALUMOOTIL MATHEW CHERIAN ANNEX PARTNERS PTY LTD TRIGLOBAL MANAGEMENT LIMITED B & R JAMES INVESTMENTS PTY LIMITED CONNAUGHT CONSULTANTS (FINANCE) PTY LTD DR SERENE LIM MR DAVID LEROY BOYLES LOMAS SUPERANNUATION PTY LTD EMERALD SHARES PTY LIMITED ROXANNE INVESTMENTS PTY LTD DAMON GROENVELD MR RAJIV PARAMANATHAN MS SERENE LIM & MR NICHOLAS RUSSELL WARD CEBON ASKET PTY LTD DADIASO HOLDINGS PTY LTD MR BRENDAN THOMAS BIRTHISTLE DR MARIE HEITZ LILYFIELD HOLDINGS PTY LTD MR MICHAEL JOHN THROWER & MRS SUSAN KATHRYN THROWER BUJO PTY LTD Total top 20 holders 6.2. SUBSTANTIA L SHAREHO LDERS 13,558,334 4,311,036 1,530,702 1,502,196 750,000 500,000 500,000 500,000 458,500 400,000 400,000 315,000 300,000 300,000 300,000 280,000 274,480 235,335 226,074 200,000 186,000 167,066 150,000 136,035 130,000 40.56 12.90 4.58 4.49 2.24 1.50 1.50 1.50 1.37 1.20 1.20 0.94 0.90 0.90 0.90 0.84 0.82 0.70 0.68 0.60 0.56 0.50 0.45 0.41 0.39 27,610,758 82.59 Shareholder No. of shares Percentage Micron Holdings Pty Ltd (Cherian Family Account) Micron Holdings Pty Ltd (Micron Holdings Pty Ltd Superfund A/c) 13,558,334 4,311,036 40.56 12.90 77 ANNUAL REPORT7. AUDI TORS R EPORT 8. 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 nt 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 S a m B u tc h e r 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 We b s i te: w w w. g l o b a l - h e a l t h . 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 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. 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 . a u 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 E h s a n S o l i c i t o r s 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 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, 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 We b s i te: w w w. s h i n e w i n g . c o m . a u 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 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 ANNUAL REPORT www.g loba l-he alth.c om ASX : G LH ABN: 75 091 377 892 Glob al Hea lth and Controlled Entities 

Continue reading text version or see original annual report in PDF format above