IMEXHS LIMITED
ABN 60 096 687 839
AUDITED FINANCIAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
CONTENTS
CORPORATE INFORMATION
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES OF EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ASX SUPPLEMENTARY INFORMATION
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2
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78
The audited Financial Report covers ImExHS Limited, consisting of ImExHS Limited (“ImExHS Limited” or the
“Company”) and its wholly owned subsidiaries.
ImExHS Limited is a company limited by shares, incorporated and domiciled in Australia. The financial report is
presented in Australian dollars.
CORPORATE INFORMATION
Directors
Mr Thomas Pascarella
Dr German Arango
Mr Howard Digby
Dr Doug Lingard
Mr Carlos Palacio
Non-executive Chairman
Chief Executive Officer
Non-executive Director
Non-executive Director
Non-executive Director
Company Secretary
Mr Peter Webse
Registered & Principal Office
122 O’Riordan Street
Mascot NSW 2020
Auditors
BDO (Audit) WA Pty Ltd
38 Station Street
Subiaco WA 6008
Bankers
Westpac Banking Corporation
260 Queen Street
Brisbane QLD 4000
Share Registry
Automic Pty Ltd
Level 5, 126 Phillip Street
Sydney NSW 2000
Tel: 1300 288 664
Tel: +61 2 9698 5414 (international)
Email: hello@automic.com.au
Stock Exchange Listing
Australian Securities Exchange
ASX Code: IME
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
The Directors present their report, together with the financial statements, on ImExHS Limited (the
Company) for the year ended 31 December 2018.
1
Directors
The following persons were Directors of the Company during the financial year and until the date of this
report unless otherwise stated:
Name
Role
Appointed
Resigned
Mr Tom Pascarella
Chairman
25/10/2018
Current
Dr German Arango
CEO
28/8/2018
Current
Mr Howard Digby
Non-Executive Director
1/8/2017
Current
Dr Doug Lingard
Non-Executive Director
10/12/2018
Current
Mr Carlos Palacio
Non-Executive Director
28/8/2018
Current
Mr Andrew Lilley
Non-Executive Director
1/7/2017
25/10/2018
Mr Peter Webse
Non-Executive Director
17/11/2017
28/8/2018
2
Principal activity
During the year, the Company ceased the development and sale of the Omni suite of products and
focussed on the acquisition of Imaging Experts and Healthcare Services Pty Ltd, whose principal
continuing activity is the development and sale of its Hiruko software platform.
Hiruko is a modular Radiology Information System (RIS) and Picture Archiving and Communications
System (PACS). The RIS combines a workflow management system with a patient data and image
distribution system, and the PACS allows a healthcare organisation to capture, store, view and share
radiology images.
The details of this acquisition are detailed in the Review of Operations below.
3
Dividends
There were no dividends paid, recommended or declared during the financial year ended 31 December
2018 was $nil (2017: $nil).
4
Review of operations
The loss of the Group for the year ended 31 December 2018 was $4,887,165 (2017: loss of $899,508),
after providing for income tax.
The loss included costs associated with the acquisition of Imaging Experts and Healthcare Services Pty
Ltd and the successful relisting of the Group on the ASX. The total of these costs, including share based
payments, was $3,929,770.
The Company had net assets of $5,850,795 (2017: $636,966) and Cash and cash equivalents of
$2,445,329 (2017: $4,593).
Underlying EBITDA
During the year, ImExHS recorded a number of non-recurring items in relation to its reverse takeover
listing process. In order to present an underlying EBITDA result, these items are identified below:
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Result before Tax
Adjust:
Net interest
Depreciation and Amortisation
Reported EBITDA
Adjust:
Net exchange gains/losses
Listing and Share Based Payments Expenses
2018
$
(4,795,347)
193,013
306,711
499,724
2017
Restated *
$
(821,997)
133,810
244,167
377,977
(4,295,623)
(444,020)
225,379
3,979,770
4,155,149
19,414
-
19,414
Underlying EBITDA**
(140,474)
(424,606)
* Refer note 30 for details about restatements for changes in accounting policies
** Underlying EBITDA excludes non-recurring transaction costs associated with the acquisition of Imaging Experts
and Healthcare Services Pty Ltd and foreign exchange losses
After adjusting for the transaction costs, ImExHS has recorded an improvement in its Underlying
EBITDA of $284,132 from 2017.
The result reflects the revenues being generated by its increasing portfolio of recurring revenue
contracts over the year together with strong second-half one-off sales.
Highlights for the Financial Year
i)
Acquisition of Imaging Experts and Healthcare Services Pty Ltd
On 28 August 2018, ImExHS Limited completed the acquisition of 100% of the issued capital of Imaging
Experts and Healthcare Services Pty Ltd, an Australian registered company that had, in turn, on 20
April 2018 acquired Imaging Experts and Healthcare Services S.A.S. a Colombian registered company
that has developed and owns the Hiruko software suite.
Following a review of opportunities in the market, the Company elected to pursue the acquisition of
Imaging Experts and Healthcare Services Pty Ltd, a company that has an established customer base
in Latin America and was seeking to expand its footprint in Latin America and elsewhere.
The Hiruko platform is a software suite that receives digital images and data from various Radiologic
modalities (e.g. Computed Tomography (CT) scanners, Magnetic Resonance (MR) scanners,
ultrasound systems (US), computed & direct radiographic (CR, DX) devices, secondary capture devices
(SC), scanners (OT), imaging gateways, etc.). Images and data can be captured, stored,
communicated, processed and displayed within the system and or across computer networks at
distributed locations using an embedded web-based viewer with image manipulation tools and strong
data encryption to ensure a secure data transfer.
This product is an implementation of a DICOM® archive and image manager packed with a web-based
viewer including basic image manipulation tools where its components are closely integrated to provide
an implementation of many IHE actors and Integration Profiles to take advantage of HL7®.
Hiruko uses indexed information from DICOM® headers for locating objects on the file system and it
does not produce any original medical images and is designed to be deployed over conventional TCP/IP
networking or cloud infrastructure utilizing commercially available computer hardware platforms and
operating systems.
ImExHS has also been developing additional verticals such as the APLIS (Anatomical Pathology and
Laboratory Information System), which has already tested and installed in two reference costumers.
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Not only has the technology been disruptive due to the HTML5 architecture, but also the ImExHS’s
business model is disruptive as the Company has a first mover advantage in “as a service” proposals
in the LatAm region.
The terms of the transaction were as follows:
ii)
The issue of 220 million ordinary shares at an issue price of $0.025 each to raise $5.5 million
(before costs);
The issue of 520 million ordinary shares, 50 million Class A Consideration Options, 50 million
Class B Consideration Options and 50 million Class C Consideration Options to the vendors
of Imaging Experts and Healthcare Services Pty Ltd;
The issue of 25 million shares and 12.5 million new options upon conversion of the
outstanding convertible loans of $500,000 in Imaging Experts and Healthcare Services Pty
Ltd;
The issue of 30 million options to the lead manager; and
The issue of 10 million shares to Directors in lieu of cash for work spent on the acquisition.
Board Appointments
Following the company’s acquisition of Imaging Experts and Healthcare Services Pty Ltd, the company
sought to enhance the board through the appointment of new directors with skills aligned with those
desired to ensure the success of the new acquisition.
Dr German Arango
Dr Arango was appointed the Chief Executive Officer.
Dr Arango is the CEO and founder of Imaging Experts and Healthcare Services S.A.S. and has over
14 years’ experience as a practising radiologist in Colombia, with a degree in Diagnostic Neuroradiology
from McGill University, Montreal, Canada. Dr Arango is currently the Chairman and Staff
Neuroradiologist at Mederi-Hospital Universitario Mayor, Bogota Colombia and has practised as a
Neuroradiologist in various hospitals and clinics in Colombia.
Dr Arango is the Associate Professor of Diagnostic Neuroradiology for the neurology and neurosurgery
residency programmes for University El Rosario at Mederi – Hospital Universitario Mayor and has held
various Associate Professor of Diagnostic Neuroradiology roles for Universidad Miltar de Colombia,
Fundacion Universitaria de Ciencias de la Salud, Universidad Nacional de Colombia and El Bosque
University during the period from 2006 to 2012.
Mr Carlos Palacio
Mr Palacio was appointed as a non-executive director.
Mr Palacio is an entrepreneur with over 27 years’ experience in international IT, Telecommunications
and strategic management. He is currently the CEO of CrossPoint Telecommunications, a Managed IT
Service Provider, specialising on creating and managing cost-effective IT solutions for multinational
organisations. CrossPoint currently provides services in 42 countries and employs 54 staff in Australia,
Singapore and Philippines.
Mr Palacio had a long career with Nokia where he served in a number of roles including Regional
Network Manager, Chief Specialist and Architect, Technology Advisor in Mergers and Acquisitions,
Global Platforms Design and Planning and Global Program Manager. Mr Palacio worked for Nokia
Networks Australia, Singapore and Finland at various stages of his Nokia career, but was largely based
in Australia.
Mr Tom Pascarella
Mr Pascarella was appointed non-executive director and Chairman.
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Mr Pascarella is a Partner with Allen Partners in Sydney, a boutique advisory firm which specialises in
raising institutional capital for local and offshore fund managers, as well as providing Corporate Finance
and M&A advisory services to SMEs, fund managers, start-ups and scale-ups.
The majority of Mr Pascarella’s career has been in various relationship management, transaction
origination and senior leadership roles in Corporate & Investment Banking; most recently as CEO and
Managing Director of Bank of America N.A. Sydney Branch / Bank of America Merrill Lynch Australia.
Prior to Bank of America, Tom was a Senior Banker in Media, Telecoms & Entertainment with Banque
Paribas (Sydney and Singapore). Tom has qualifications from Princeton University and Oxford
University, is a fellow of FinSIA, is a Certified Finance & Treasury Professional with the Finance &
Treasury Association, and a Member of the Australian Institute of Company Directors.
Mr Pascarella has been the President of the American Chamber of Commerce in Australia, a Board
Member and Chairman of the dual-Government entity the Australian-American Fulbright Commission
and Chairman of the ASX listed Agricultural Land Trust during its successful restructuring from Elders
Ltd.
Dr Doug Lingard
Dr Lingard was appointed as a non-executive director.
Dr Lingard is an experienced Radiologist and Nuclear Physician who has worked in various leadership
roles in Auckland, Washington DC and Sydney. In Australia he was a co-founder of Pittwater Radiology
Partners which after a series of mergers and acquisitions listed on the ASX in mid-2000 as Medical
Imaging Australasia Ltd (MIA) and became the largest supplier of radiology services in Australia and a
major supplier of diagnostic imaging to the NHS in the United Kingdom. In mid-2004, MIA was acquired
by DCA Group Ltd for A$700m to become one of the world's largest radiology businesses, and the
leading practice in Australia known as I-Med.
Dr Lingard has a medical degree MB.ChB from Otago University, NZ, and was a National Institutes of
Health Fellow in Washington DC. He is presently a Fellow of the Royal Australia & NZ College of
Radiologists, a Senior Associate of FinSIA and a member of the Australian Institute of Company
Directors. He is the founder and present Chairman of the Mito Foundation, the peak charity in Australia
for people with mitochondrial disease.
iii)
US Food and Drug Administration Premarket Submission Started
In December 2018, ImExHS commenced its submission to the US Food and Drug Administration (FDA)
for the company’s Hiruko product to be demonstrated to be safe and effective.
This is required when introducing a product into commercial distribution in the United States for the first
time and represents an important hurdle, allowing ImExHS to meet its project milestone of a soft launch
in the US market.
iv)
Commercialisation of the Anatomical Pathology and Laboratory Information System
(APLIS)
The company is committed to widening the scope of the services in its portfolio. During the year the
company successfully completed its trial of the APLIS and moved into a limited commercial
implementation at its client, Clinica Las Americas.
This represents an important expansion in the capabilities of the company and adds to our ability to
provide multiple services to our customers.
v)
Continued piloting of new developments
ImExHS continues to develop its Cardiology Information System (CIS) module for Hiruko. It has
continued with its initial pilot at Clinica Las Americas.
vi)
Release of new tools for Hiruko
ImExHS continues to develop its Hiruko Product Suite with the addition of new tools. These web-based
tools include: a Triangulation Tool; a Multiplanar Reconstruction Tool; and a 3D Maximum Intensity
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Projection Tool. These tools are unique in the market in providing this functionality over the web and
provide great improvements in productivity for our users without a large technological overhead.
vii)
Expansion into new Markets
The company continued its expansion across Latin America, with the completion of new distribution
agreements in El Salvador, Panama, Honduras and Nicaragua.
The company now has distribution agreements in 11 countries and as a result is well-placed to continue
its growth in these territories.
viii)
Financial Position
The Company’s financial year end position was substantially strengthened during the year, following
the successful capital raise that brought in $5,500,000 during the year.
For further information see significant changes in the state of affairs below.
5
Significant changes in state of affairs
Cessation of development and sales of Omni suite of products
During the year the company undertook a review of its operations and look at options to conserve it
cash position. The company therefore decided to cease development and sales of the Omni suite of
products, and commenced a search for a new business venture for the benefit of the company’s
shareholders.
Acquisition of Imaging Experts and Healthcare Services Pty Ltd
Both the acquisition of Imaging Experts and Healthcare Services Pty Ltd of Imaging Experts and
Healthcare Services S.A.S. and the acquisition of Imaging Experts and Healthcare Services Pty Ltd by
ImExHS Limited have been accounted for as reverse takeovers under the Australian Accounting
Standards.
As such, the historical financial information of the Company will be presented as that of the Colombian
entity.
Other
During the year, the Company also relocated its head office from Brisbane to Mascot.
6
Outlook for 2019
The company continues to invest in the development of Hiruko’s features and plans further expansion
in its existing and new territories. Potential revenues are building momentum via the company’s network
of experienced, in-country medical products distributors.
i)
USA Soft Launch
FDA approval for commercialisation is anticipated in the first half of 2019. Following this ImExHS will
look to have a soft launch of Hiruko in the USA and already has leads for potential customers in Florida.
ii)
Commercialisation
The company is looking to complete the developments necessary for the full commercialisation of the
CIS, and will initially look to market this to existing RIS clients, many of whom have already indicated
their need for the module.
The APLIS module will be completed and move from pilot into production in the first quarter of 2019.
The APLIS module will be a unique advantage of Hiruko. It brings the advantages of a controlled
workflow, business intelligence, zero footprint digital imaging viewer all through an HTML5 environment
which are currently unavailable to pathologists.
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
iii)
Artificial Intelligence
ImExHS continues to work on using natural language processing algorithms. Our work will be targeting
three areas: specified pathologies; predictive diagnostic alerts (triage reporting); and diagnostic
concordance analysis. From these algorithms, Hiruko will then be able to structure and classify the
diagnosis for post analysis. These will provide the specialists with better diagnostic tools for the
specialists to serve their patients.
From this structured information, Hiruko will be able to provide automatic image annotation
recommendations, to provide valuable sets of data for future machine learning applications.
iv)
Research
ImExHS continues to work on its Braviz platform for advanced analytics and visualisation of neurological
images by providing a unique platform that provides significant amount of useful data for both research
and education purposes that is currently not available.
v)
Visualisation tools
Building on the work on web-based visualisation tools released early in 2019, the company is working
on extending the MPR capabilities to MRI images.
vi)
New Markets
In Latin America, ImExHS is working to build on its current footprint and continues to pursue new
distribution arrangements in new countries. We will also continue to grow our direct sales team to enable
us to reach all of Latin America with technical sales support to our distributors.
The company is also looking to complete the pilot site in Australia and move to commercialisation with
a fully integrated RIS-PACS solution, complete with Voice Recognition and Patient Portal. This pilot is
expected to be completed 2nd quarter 2019.
7
Capital Structure
Securities currently quoted on ASX
Fully paid ordinary shares
Unquoted securities
Performance shares (Class A)
Options exercisable at 2.5 cents on or before 31 March 2021
Class A unlisted options at 5 cents on or before 30 June 2021
Class B unlisted options at 3.75 cents on or before 28 August 2023
Class C unlisted options at 3.75 cents on or before 28 August 2023
Advisor unlisted options at 5 cents on or before 30 June 2021
Unlisted options at 3.75 cents on or before 30 June 2021
Unlisted options at 7 cents on or before 25 October 2023
Unlisted options at 5.3 cents on or before 9 December 2023
7
Number
925,657,186
Number
750,000
35,000,000
50,000,000
50,000,000
50,000,000
30,000,000
12,500,000
4,000,000
2,000,000
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
8
Events after the reporting date
There has not been any matter or circumstance occurring subsequent to the end of the financial year
that has significantly affected, or may significantly affect, the operation of the entity, the results of those
operations, or the state of affairs of the entity in future financial years.
9
Future developments and results
Other than as referred to in this report, further information as so the likely developments in the
operations of the Company and likely results of those operations would, in the opinion of the Directors,
be speculative.
10
Environmental issues
The Company’s operations are not regulated by any significant environmental regulations under a law
of the Commonwealth or of a state or territory of Australia.
11
Information on directors
Name
Title
Mr Tom Pascarella (appointed 25 October 2018)
Non-executive Chairman
Qualifications:
A.B. Political Economy (Princeton), CFTP, F.Fin, MAICD
Experience and expertise:
Mr Pascarella’s has extensive experience over 25 years in various
relationship management,
transaction origination and senior
leadership roles in Corporate & Investment Banking.
Other current listed
Company directorships:
Former listed Company
directorships (last 3 years):
N/A
N/A
Interests in shares and
options:
Ordinary shares: nil
Options over ordinary shares: 4,000,000
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Name
Title
Qualifications:
German Arango (appointed 28 August 2018)
Chief Executive Officer
Medical Doctor and Surgery (El Bosque), Diagnostic Radiology (La
Sabana), Diagnostic Neuroradiology (McGill), Member of RSNA,
Member of CAR, Member of ACR, Member of ASNR
Experience and expertise:
Dr Arango is the CEO and founder of Imaging Experts and Healthcare
Services S.A.S. and has over 14 years’ experience as a practising
radiologist in Colombia.
Other current listed
Company directorships:
Former listed Company
directorships (last 3 years):
N/A
N/A
Interests in shares and
options:
Ordinary shares: 157,525,160
Class A options over ordinary shares: 15,287,254
Class B options over ordinary shares: 15,287,254
Class C options over ordinary shares: 15,287,254
Name
Title
Mr Howard Digby (appointed 1 August 2018)
Non-executive Director
Qualifications:
B.Eng (Hons)
Experience and expertise:
Mr. Digby brings over 25 years management experience
in
technology and information services including senior roles at IBM,
Adobe, Gartner and The Economist Group in numerous countries.
Other current listed
Company directorships:
4DS Memory Limited, Elsight Limited, HearMeOut Limited,
Transaction Solutions International Limited
Former listed Company
directorships (last 3 years):
Estrella Resources Limited,
Interests in shares and
options:
Ordinary shares: 7,600,000
Options over ordinary shares: 1,500,000
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Name
Title
Dr Doug Lingard (appointed 10 December 2018)
Non-executive Director
Qualifications:
MB.ChB. FRANZCR, MAICD
Experience and expertise:
Doug is an experienced Radiologist and Nuclear Physician who has
worked in various leadership roles in Auckland, Washington DC and
Sydney.
Doug is a Senior Associate of FinSIA and a member of the Australian
Institute of Company Directors. He is the founder and present
Chairman of the Mito Foundation, the peak charity in Australia for
people with mitochondrial disease.
Other current listed
Company directorships:
Former listed Company
directorships (last 3 years):
N/A
N/A
Interests in shares and
options:
Ordinary shares: 2,685,758
Options over ordinary shares: 2,000,000
Name
Title
Mr Carlos Palacio (appointed 28 August 2018)
Non-executive Director
Qualifications:
B.Elec.Eng, MBA
Experience and expertise:
Mr Palacio has over 27 years’ experience in international IT,
Telecommunications and strategic management.
Other current listed
Company directorships:
Former listed Company
directorships (last 3 years):
N/A
N/A
Interests in shares and
options:
Ordinary shares: 103,833,600
Class A options over ordinary shares: 10,076,680
Class B options over ordinary shares: 10,076,680
Class C options over ordinary shares: 10,076,680
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Name
Title
Mr Andrew Lilley (appointed 1 July 2017)
Non-executive Director (resigned 25 October 2018)
Qualifications:
B. Commerce, B. Economics
Experience and expertise:
Mr Lilley brings capital market experience and financial analysis
expertise across a wide range of industries.
Other current listed
Company directorships:
Former listed Company
directorships (last 3 years):
N/A
N/A
Interests in shares and
options:
Ordinary shares: 10,200,000
Options over ordinary shares: 1,500,000
Name
Title
Mr Peter Webse (appointed 17 November 2017)
Non-executive Director (resigned 28 August 2018)
Qualifications:
B.Bus, FGIA, FCPA, MAICD
Experience and expertise:
Mr Webse is Managing Director of Platinum Corporate Secretariat, a
in providing company secretarial, corporate
firm specialising
governance and corporate advisory services
listed
companies.
to ASX
Other current listed
Company directorships:
Cynata Therapeutics Limited
Former listed Company
directorships (last 3 years):
N/A
Interests in shares and
options:
Ordinary shares: 1,000,000
12
Company secretary
The Company’s Company Secretary is Mr Peter Webse (appointed 1 May 2018).
Mr Webse has over 25 years’ company secretarial experience and is managing director of Platinum
Corporate Secretariat Pty Ltd, a company specialising in providing company secretarial, corporate
governance and corporate advisory services. Mr Webse holds a Bachelor of Business with a double
major in Accounting and Finance, is a Fellow of the Governance Institute of Australia, a Fellow Certified
Practicing Accountant and a Member of the Australian Institute of Company Directors.
Prior to the appointment of Mr Webse, the Company Secretary was Mr Paul Frederiks (6 February 2017
to 31 May 2018).
13
Meetings of directors
The following table sets out the number of meetings of the Company’s Directors held while each was a
Director and includes meetings held in person and by teleconference.
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Tom Pascarella
German Arango
Howard Digby
Doug Lingard
Carlos Palacio
Andrew Lilley
Peter Webse
Directors’ Meetings
Number eligible to
attend
Number attended
3
4
10
1
4
7
6
3
4
10
1
4
7
6
14
Shares Under Option
At the date of this report, the unissued ordinary shares of ImExHS Limited under option are unlisted
and are as follows:
Type
Grant date
Date of
expiry
Exercise
price
Number under
option
Comment
Options
7/7/2017
31/3/2021
$0.025
35,000,000
Class A Options*
28/8/2018
30/6/2021
$0.05
50,000,000
Class B Options*
28/8/2018
28/8/2023
$0.0375
50,000,000
Class C Options*
28/8/2018
28/8/2023
$0.0375
50,000,000
New Options*
28/8/2018
30/6/2021
$0.0375
12,500,000
Advisor Options*
28/8/2018
30/6/2021
$0.05
30,000,000
Director Options
25/10/2018
25/10/2023
$0.07
4,000,000
Director Options
9/12/2018
9/12/2023
$0.053
2,000,000
(a)
(b)
(c)
(d)
Total
* Subject to escrow
233,500,000
(a) Options issued in consideration for Imaging Experts and Healthcare Services Pty Ltd, subject to
the vesting condition of the company exceeding $5,000,000 EBIT in any rolling four quarter
period.
(b) Options issued in consideration for Imaging Experts and Healthcare Services Pty Ltd, subject to
the vesting condition of the company exceeding $7,500,000 EBIT in any rolling four quarter
period.
(c) Options issued as remuneration to Mr Tom Pascarella, subject to vesting conditions.
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
(d) Options issued as remuneration to Dr Doug Lingard, subject to vesting conditions.
Holders do not have any rights to participate in any issues of shares or other interests in the Company.
During the year and up to the date of this report the following options were exercised or lapsed:
Type
Status
Date of
expiry
Exercise
price
Number
Listed Options
Lapsed
31/12/2018
$1.00
2,500,006
No person entitled to exercise the option had or has any right by virtue of the option to participate in
any share issue of any other body corporate.
15
Indemnification and insurance of officers
Every person who is or has been a director, secretary or executive officer of the entity is indemnified,
to the maximum extent permitted by law, out of property of the company against any liabilities for costs
and expenses incurred by that person unless the liability arises out of conduct involving a lack of good
faith.
The company has paid a premium for directors and officers liability. The insurance policy covers the
directors of the company and executive officers. The contract prohibits the disclosure of the nature of
the liability insured and the amount of the premium.
16
Indemnification and insurance of auditors
The Company has not, during or since the end of the financial period, indemnified or agreed to indemnify
the auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial period, the Company has not paid a premium in respect of a contract to insure the
auditor of the Company or any related entity.
17
Proceedings on behalf of company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a
party for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
The Company was not a party to any such proceedings during the year.
18
Non-audit services
During the year, BDO Audit (WA) Pty Ltd, the Company’s auditor provided non-audit services in relation
to the Investigating Accountant’s Report and Compliance and Taxation Services.
The Directors are satisfied that the provision of non-audit services provided during the financial period,
by the auditor (or by another person or firm on the auditor’s behalf), is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the external auditor’s
independence requirements of the Corporations Act 2001 for the following reasons:
All non-audit services have been reviewed and approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
None of the services undermine the general principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting
Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work,
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IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
acting in a management or decision-making capacity for the Company, acting as an advocate for
the Company or jointly sharing economic risks and rewards.
The following fees for non-audit services were paid to the external auditors during the year ended 31
December 2018:
Compliance and Taxation Services
Investigating Accountant’s Report
2018
$
2017
$
6,255
27,000
4,080
7,093
19
Auditor’s independence declaration
The auditor’s independence declaration in accordance with section 307C of the Corporations Act 2001
for the period ended 31 December 2018 has been received and can be found on page 37 of the financial
report.
20
Remuneration report (audited)
This remuneration report outlines the Director and executive remuneration arrangements of each
director of ImExHS Limited, and for all other key management personnel (KMP), in accordance with the
requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, KMP
are defined as those persons having authority and responsibility for planning, directing and controlling
the major activities of the Company, directly or indirectly, including any directors (whether executive or
otherwise).
The remuneration report is presented in the below sections:
20.1 Key Management Personnel
20.2 Remuneration Framework
20.3 Executive Remuneration Arrangements
20.4 Executive Contractual Arrangements
20.5 Non-executive Director Arrangements
20.6 Relationship of Reward and Performance
20.7 Company performance, shareholder wealth and director & executive remuneration
20.8 Share-based Remuneration
21 Details of Remuneration
22 Shareholdings
23 Other Key Management Personnel Disclosures
23 Voting and comments at the 2017 AGM
24 Use of Remuneration Consultants
The figures disclosed in this Remuneration Report reflect the remuneration whilst employed by ImExHS
Ltd only. The totals do not necessarily correspond to various disclosures in the financial statements as
the definition of KMP under Australian Accounting Standards differs from the Corporations Act 2001.
14
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
20.1
Key management personnel (including the executives of the Company)
The report covers Non-Executive Directors, Executive Directors and other KMP, and includes:
2018
Non-executive directors (NED) Executive Directors
Other KMP
Tom Pascarella 1
German Arango 2
Jorge Marin 3
Howard Digby 4
Doug Lingard 6
Carlos Palacio 8
Andrew Lilley 10
Peter Webse 11
Tony Thomas 5
Andres Vanegas 7
Paul Frederiks 9
There were no other changes after the reporting date and before the date the financial report was
authorised for issue.
1 Appointed 25 October 2018.
2 Appointed 28 August 2018.
3 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
4 Appointed 1 August 2017.
5 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
6 Appointed 10 December 2018.
7 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
8 Appointed 28 August 2018.
9 Appointed 6 February 2017, Resigned as Company Secretary 31 May 2018. Resigned as CFO 28 August 2018.
10 Appointed 1 July 2017, Resigned 25 October 2018.
11 Appointed 17 November 2017, Resigned as Director 28 August 2018, and continues as a KMP in his capacity as Company
Secretary.
15
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
2017
Non-executive directors (NED) Executive Directors
Other KMP
Howard Digby 12
Andrew Lilley 14
Peter Webse 16
Richard Dennis 17
Bryan Granzien 18
Glenn Vassallo 19
Paul Frederiks 13
Paul Cochrane 15
20.2
Remuneration Framework
Due to the size of the Company, the role of remuneration committee is performed by the Board. It is
primarily responsible for:
The over-arching executive remuneration framework;
Remuneration levels of executives; and
Non-executive director fees.
The remuneration packages of directors and KMP of ImExHS Ltd have been designed to align director
and other KMP objectives with shareholder and business objectives by providing a fixed remuneration
component and offering specific performance pay incentives based on key performance areas affecting
the entity’s financial results where the Board deems such incentives to be appropriate. The Board of
ImExHS Ltd believes this remuneration methodology to be appropriate and effective in its ability to
attract and retain the best KMP and directors to run and manage the business, as well as create goal
congruence between directors, other KMP and shareholders.
The Board determines the nature and the amount of remuneration for Board members and KMP of the
entity as detailed below.
The non-executive directors and executives based in Australia receive the superannuation guarantee
contribution, where entitled, required by the government, which is currently 9.5%, and do not receive
any other retirement benefits.
All remuneration paid to directors and other KMP is valued at the cost to the Company and expensed.
20.3
Executive Remuneration Arrangements
All KMP may receive a base salary, superannuation, fringe benefits (if applicable) and performance pay
incentives (if applicable).
12 Appointed 1 August 2017.
13 Appointed 6 February 2017, Resigned 28 August 2018.
14 Appointed 1 July 2017, Resigned 25 October 2018.
15 Resigned 6 February 2017, included for comparative information only.
16 Appointed 17 November 2017, Resigned as Director 28 August 2018, and continues as a KMP in his capacity as Company
Secretary.
17 Resigned 1 August 2017, included for comparative information only.
18 Resigned 1 July 2017, included for comparative information only.
19 Resigned 17 November 2017, included for comparative information only.
16
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
The performance pay plan is reviewed by the Board. Objectives for the KMP are set by the Board. KMP
packages are reviewed annually by reference to the entity’s performance, KMP performance and
comparable information from industry sectors and other listed companies in similar industries.
The performance of KMP is measured against criteria agreed annually with each KMP, and is in part
based on the forecast growth of the entity’s profits and shareholders’ value. All bonuses and incentives
must be linked to predetermined performance criteria. The Board may, however, exercise its discretion
in relation to approving incentives and bonuses. Any changes must be justified by reference to
measurable performance criteria. The remuneration practices are designed to attract the highest calibre
of KMP and reward them for performance that results in long-term growth in shareholder wealth.
The principal terms of executive services agreements are as follows:
Dr German Arango – Chief Executive Officer
The remuneration comprises a base salary of $290,000 per annum plus statutory
superannuation.
Termination may be:
a) by either party without cause with 6 months' written notice, or in the case of the Company
immediately with payment in lieu of notice;
b) by the Company with one month’s notice, or immediately with payment in lieu of notice if Dr
Arango is unable to perform his duties under the agreement for three consecutive months
or a period aggregating to three months in a 12 month period
c) by either party with 6 months' written notice if Dr Arango's role becomes redundant. If the
Company terminates the employment of Dr Arango within 6 months of a Change of Control
it will be deemed to be a termination by reason of redundancy. If the Company terminates
for reason of redundancy it shall be obliged to pay Dr Arango for any notice period worked.
In addition, it will be required to pay any redundancy amount payable under applicable laws,
an amount equal to 6 months' base salary (less tax) and any accumulated entitlements;
d) by the Company, at any time with written notice and without payment (other than
entitlements accrued to the date of termination) as a result of any occurrence which gives
the Company a right of summary dismissal at common law; and
e) by Dr Arango immediately, by giving notice, if the Company is in breach of a material term
of its agreement with him.
The agreement otherwise contains industry‐standard provisions for a senior executive of a
public listed company.
Dr Jorge Marin – Chief Medical Officer
The remuneration comprises a base salary of $200,000 per annum plus mandatory entitlements
under the governing labour law and regulations.
Termination may be:
a) by either party without cause with 6 months' written notice, or in the case of the Company
immediately with payment in lieu of notice; and
b) by the Company with immediate effect if Dr Marin does not, refuses or is unable to perform
his duties under the agreement.
The agreement otherwise contains industry‐standard provisions for a senior executive of a public
listed company.
Mr Andres Vanegas – Chief Sales Officer
The remuneration comprises a base salary of $140,000 per annum plus mandatory entitlements
under the governing labour law and regulations. A bonus of up to additional $60,000 per annum
may be earned by Mr Venegas contingent on him meeting sales targets agreed with the
Company.
17
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Termination may be:
a) by either party without cause with 6 months' written notice, or in the case of the Company
immediately with payment in lieu of notice; and
b) by the Company with immediate effect if Mr Vanegas does not, refuses or is unable to
perform his duties under the agreement.
The agreement otherwise contains industry‐standard provisions for a senior executive of a public
listed company.
20.4
Executive Contractual Arrangements
Remuneration and other terms of employment for the CFO and Company Secretary and all other key
management positions held have been formalised in service agreements.
Mr Tony Thomas – Chief Financial Officer
ImExHS has agreed to pay Mr Thomas a consultancy fee of $900 per professional day worked
(exclusive of GST) for his services. The agreement has no fixed term.
Termination may be:
a) by either party without cause with 3 months' written notice; or
b) by the Company with immediate effect for cause, including for a breach of the agreement, if
Mr Thomas is convicted of a criminal office involving fraud or dishonesty, if Mr Thomas
conducts himself to bring him or ImExHS into disrepute or for conflicts of interest that cannot
be resolved.
Mr Peter Webse – Company Secretary
ImExHS has engaged Mr Webse through Platinum Corporate Secretariat to provide company
secretary services to the Company. Mr Webse receives a monthly fee of $5,000 (plus GST).
Mr Webse will also receive a fee of $250 (plus GST) per hour for any additional tasks outside of
the scope of the company secretarial services provided to the Company.
Termination may be:
a) by either party without cause with 3 months' written notice; or
b)
immediately by written notice should the Company or the Directors adversely impact Mr
Webse in performing his duties and obligations under the Corporations Act and/or expose
Mr Webse to possible personal prosecution; and
c)
immediately by written notice in the event that any remuneration payable by the Company
to Mr Webse has not been paid within 30 days of the due date for payment.
20.5
Non-executive Director Remuneration Arrangements
The Board’s policy is to remunerate non-executive directors at a rate that reflects the Company’s current
stage of development, remaining cognisant of market rates for comparable companies for time,
commitment and responsibilities.
Remuneration of the non-executive directors is made on this basis and is reviewed annually, based on
market practice, duties and accountability. Independent external advice is sought where required. The
maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval
by shareholders at general meeting. For the financial period ended 31 December 2018, and in respect
of each financial year thereafter and until otherwise determined by a resolution of shareholders, the
maximum aggregate remuneration payable by the Company to all Non-Executive Directors of the
Company for their services as Directors including their services on a Board committee or sub-committee
and including superannuation is limited to $250,000 per annum.
18
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
The total remuneration packages exclusive of superannuation benefits for the Non-Executive Directors
are as follows:
Board fees
Chairman
Other Non-Executive Directors
$ per annum
72,000
36,000
There are no additional committee fees payable.
All Non-Executive Directors enter into a service agreement with the Company in the form of a letter of
appointment. The letter summarises the Board policies and terms, including remuneration, relevant to
the office of Director.
20.6
Relationship of Reward and Performance
As is detailed in the below sections of this Directors Report, current directors, Dr German Arango and
Mr Carlos Palacio, as well as KMP members, Dr Jorge Marin and Mr Andres Vanegas also indirectly
hold Options (Class B and Class C). These options were issued to them as a component of
consideration as vendors of Imaging Experts and Healthcare Services Pty Ltd. The terms of these
options are dealt with below.
20.7
Company performance, shareholder wealth, and director and executive
remuneration
Due to the change in the nature of operations of the business during the past year, there does not yet
exist a clear link between the gross revenue, profits and dividends for the last four years for the
Company as well as the share price at the end of the respective financial years. The normal operations
of the company during a full financial year for 2019 will help establish these relationships.
20.8
Share-based remuneration
Options were issued to non-executive Directors, Mr Tom Pascarella and Dr Doug Lingard as a
component of their remuneration as non-executive Directors of the Company. The terms of these
options are dealt with below.
There were nil options issued during the period to other KMP in connection with remuneration. Options
may be issued to KMP as part of their remuneration.
Options are issued to KMP of ImExHS Limited and its subsidiaries to increase goal congruence between
KMP and shareholders, and are partly based on performance criteria.
19
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
21
Details of Remuneration
Remuneration of Key Management Personnel
Remuneration for the period ended 31 December 2018
Cash salary
and fees
Fixed
Superannuation
Variable
Share-based
payments
Total
$
$
$
$
Remuneration
consisting of
share-based
payments
%
12,000
33,508
3,000
11,219
26,007
59,667
1,140
-
285
1,066
-
-
4,038
125,000
561
-
125,000
-
145,401
2,491
254,599
96,986
64,037
62,100
66,839
54,875
247,851
490,238
-
-
-
-
-
-
-
-
-
-
-
2,491
254,599
17,178
158,508
3,846
12,285
151,007
59,667
402,491
96,986
64,037
62,100
66,839
54,875
247,851
747,328
23.5
78.9
14.6
-
82.8
-
-
-
-
-
-
Non-Executive Directors
Mr Tom Pascarella 20
Mr Howard Digby 21
Dr Doug Lingard 22
Mr Carlos Palacio 23
Mr Andrew Lilley 24
Mr Peter Webse 25
Total Non-Executive
Directors
Executive Directors
Dr German Arango 26
Other KMP
Dr Jorge Marin 27
Mr Tony Thomas 28
Mr Andres Vanegas 29
Mr Paul Frederiks 30
Total Other KMP
TOTAL KMP
20 Appointed 25 October 2018.
21 Appointed 1 August 2017. Share based payment relates to the issue of shares in lieu of cash for work spent on the acquisition
of Imaging Experts and Healthcare Services Pty Ltd.
22 Appointed 10 December 2018.
23 Appointed 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
24 Appointed 1 July 2017, Resigned 25 October 2018. Comprises $17,966 in Directors fees and $3,875 in consulting fees. Share
based payment relates to the issue of shares in lieu of cash for work spent on the acquisition of Imaging Experts and Healthcare
Services Pty Ltd.
25 Appointed 17 November 2017, Resigned as Director 28 August 2018. Comprises $16,667 in Director Fees to that date and
$43,000 in Company Secretarial fees for the full year.
26 Appointed 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
27 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
28 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
29 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
30 Appointed 6 February 2017, Resigned 28 August 2018.
20
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Remuneration for the period ended 31 December 2017
Cash salary
and fees
Fixed
Superannuation
Variable
Share-based
payments
Total
$
$
$
$
Remuneration
consisting of
share-based
payments
%
Non-Executive Directors
Mr Howard Digby 31
Mr Andrew Lilley 32
Mr Peter Webse 33
Mr Glenn Vassallo 34
Mr Richard Dennis 35
Mr Bryan Granzien 36
Total Non-Executive
Directors
Executive Directors
Nil
Other KMP
Mr Paul Frederiks 37
Mr Paul Cochrane 38
Total Other KMP
TOTAL KMP
15,418
27,500
3,044
22,013
14,583
12,500
95,058
89,000
5,000
94,000
189,058
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,418
27,500
3,044
22,013
14,583
12,500
95,058
89,000
5,000
94,000
189,058
-
-
-
-
-
-
-
-
31 Appointed 1 August 2017. Comprises $10,418 in Director fee and $5,000 in consulting fees prior to being appointed a director.
32 Appointed 1 July 2017, Resigned 25 October 2018. Comprises $12,500 in Director fees and $15,000 in consulting fees prior
to being appointed a director.
33 Appointed 17 November 2017, Resigned as Director 28 August 2018.
34 Resigned 17 November 2017
35 Resigned 1 August 2017.
36 Resigned 1 July 2017.
37 Appointed 6 February 2017, Resigned 28 August 2018.
38 Resigned 6 February 2017.
21
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
22
Shareholdings
22.1
Ordinary Shares
The number of shares in the Company held by each Director and other KMP during the period, including
their related parties is summarised below.
Balance at
1/1/2018
Granted as
Remuneration
Purchased
Consideration
Other
Balance at
31/12/2018
Non-Executive Directors
Mr Tom Pascarella
Mr Howard Digby 39
Dr Doug Lingard 40
Mr Carlos Palacio 41
Mr Andrew Lilley 42
Mr Peter Webse 43
-
-
-
1,600,000
5,000,000*
1,000,000
-
-
-
-
1,009,999
-
103,833,600*
-
-
-
-
-
-
-
-
7,600,000
1,009,999
103,833,600
3,200,000
5,000,000*
2,000,000
-
-
1,000,000
-
-
(10,200,000)
(1,000,000)
-
-
Total Executive Directors
4,800,000
10,000,000
5,009,999
103,833,600
(11,200,000)
112,443,599
Executive Directors
Dr German Arango 44
Other KMP
Dr Jorge Marin 45
Mr Tony Thomas
Mr Andres Vanegas 46
Mr Paul Frederiks
Total Other KMP
TOTAL KMP
* Subject to escrow
-
-
-
-
-
-
-
-
-
-
-
-
-
157,525,160*
-
157,525,160
-
1,507,745
-
-
-
-
102,437,920*
-
1,507,745
102,437,920
-
-
-
-
-
-
1,507,745
102,437,920
-
103,945,665
4,800,000
10,000,000
6,517,744
363,796,680
(11,200,000)
373,914,424
39 Appointed 1 August 2017.
40 Appointed 10 December 2018.
41 Appointed 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
42 Appointed 1 July 2017, Resigned 25 October 2018.
43 Appointed 1 July 2017, Resigned 28 August and ceased to be a KMP from that date.
44 Consideration shares were issued as part of the acquisition of Imaging Experts and Healthcare Services Pty Ltd. These are
held in the company Digital Imaging Solutions S.A.S. where Dr Arango is the controlling shareholder. Accordingly these shares
are disclosed against Dr Arango.
45 Consideration shares were issued as part of the acquisition of Imaging Experts and Healthcare Services Pty Ltd. These are
held in the company Digital Imaging Solutions S.A.S. where Dr Arango is the controlling shareholder. Accordingly these shares
are disclosed against Dr Arango.
46 Consideration shares were issued as part of the acquisition of Imaging Experts and Healthcare Services Pty Ltd.
22
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Balance at 1
January 2017
Granted as
Remuneration
Purchased
1 for 10
Consolidation
Other
Balance at 31
December
2017
Non-Executive Directors
Mr Howard Digby 47
Mr Andrew Lilley 48
Mr Peter Webse
Mr Glenn Vassallo 49
Mr Richard Dennis 50
Mr Bryan Granzien
-
-
-
25,349,377
250,000
-
Total Executive Directors
25,599,377
Executive Directors
Nil
Other KMP
Mr Paul Cochrane
Mr Paul Frederiks
Total Other KMP
TOTAL KMP
-
-
-
-
25,599,377
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,600,000
1,600,000
3,200,000
3,200,000
-
10,000,000
(22,814,439)
(12,534,938)
-
-
(225,000)
(25,000)
-
-
10,000,000
(23,039,439)
(7,759,938)
4,800,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000,000
(23,039,439)
(7,759,938)
4,800,000
The above figures are from the later of the date of employment commencement date and 1 January
2017 through to the earlier of termination date and 31 December 2017.
47 Other represents balance at date of appointment, 1 August 2017.
48 Other represents balance at date of appointment, 1 July 2017.
49 Purchased shares were shares issued on conversion of convertible note. Other represents balance at date of resignation, 17
November 2017
50 Other represents balance at date of resignation, 1 August 2017.
23
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
22.2
Options
The number of options in the Company held by each Director and other KMP during the period, including
their related parties is summarised below.
2018
Non-Executive Directors
Class
Balance at
1/1//2018
Granted as
Remuneration
Purchased
Consideration
Other
Balance at
31/12/ 2018
Vested at
31/12/ 2018
Unvested at
31/12/ 2018
Mr Tom Pascarella 51
Director
-
4,000,000
Unlisted
1,500,000
-
Mr Howard Digby 52
Dr Doug Lingard 53
Mr Carlos Palacio 54
Director
Class A*
Class B*
Class C*
-
-
-
-
-
2,000,000
-
-
-
-
-
-
Mr Andrew Lilley 55
Mr Peter Webse
Unlisted
1,500,000
-
-
Total Non-Executive Directors
3,000,000
6,000,000
Class A*
Class B*
Class C*
-
-
Class A*
Class B*
Class C*
Executive Directors
Dr German Arango 56
Total Executive Directors
Other KMP
Dr Jorge Marin 57
Mr Tony Thomas
Mr Andres Vanegas 58
Mr Paul Frederiks
Total Other KMP
TOTAL KMP
* Subject to escrow
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,076,680
10,076,680
10,076,680
30,230,040
-
-
-
-
-
-
-
4,000,000
-
4,000,000
1,500,000
1,500,000
-
2,000,000
-
2,000,000
10,076,680
10,076,680
-
10,076,680
10,076,680
-
-
10,076,680
10,076,680
30,230,040
10,076,680
20,153,360
-
-
(1,500,000)
-
-
-
-
-
-
-
30,230,040
(1,500,000)
37,730,040
11,576,680
26,153,360
15,287,254
15,287,254
15,287,254
45,864,762
-
-
9,941,234
9,941,234
9,941,234
29,823,702
-
29,823,702
-
-
-
-
-
-
-
-
-
-
-
-
15,287,254
15,287,254
-
15,287,254
15,287,254
-
-
15,287,254
15,287,254
45,864,762
15,287,254
30,574,508
-
-
-
-
9,941,234
9,941,234
-
-
-
9,941,234
9,941,234
-
-
9,941,234
9,941,234
29,823,702
9,941,234
19,882,468
-
-
-
29,823,702
9,941,234
19,882,468
3,000,000
6,000,000
-
105,915,504
(1,500,000)
113,408,504
36,805,168
76,610,336
51 Appointed 25 October 2018.
52 Appointed 1 August 2017.
53 Appointed 10 December 2018.
54 Appointed 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
55 Other represents balance on resignation at 25 October 2018.
56 Consideration options were issued as part of the acquisition of Imaging Experts and Healthcare Services Pty Ltd. These are
held in the company Digital Imaging Solutions S.A.S. where Dr Arango is the controlling shareholder. Accordingly these shares
are disclosed against Dr Arango.
57 Consideration options were issued as part of the acquisition of Imaging Experts and Healthcare Services Pty Ltd. These are
held in the company Digital Imaging Solutions S.A.S. where Dr Arango is the controlling shareholder. Accordingly these shares
are disclosed against Dr Arango.
58 Consideration options were issued as part of the acquisition of Imaging Experts and Healthcare Services Pty Ltd.
24
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
2017
Non-Executive Directors
Mr Howard Digby 59
Mr Andrew Lilley 60
Mr Peter Webse
Mr Glenn Vassallo
Mr Richard Dennis
Mr Bryan Granzien
Total Non-Executive Directors
Executive Directors
Nil
Other KMP
Mr Paul Cochrane
Mr Paul Frederiks
Total Other KMP
TOTAL KMP
Class
Balance at
1/1//2017
Granted as
Remuneration
Purchased
Consideration
Other
Balance at
31/12/ 2017
Vested at
31/12/ 2017
Unvested at
31/12/ 2017
Unlisted*
Unlisted*
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
3,000,000
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
3,000,000
-
-
-
-
-
-
-
-
-
-
-
* The options have an exercise price of 2.5 cents and an expiry date of 31 March 2021.
22.3
Terms and conditions of the share-based payment arrangements
Shares
At a general meeting of the shareholders on 31 July 2018, it was resolved to approve the grant
of ordinary shares to Messrs Digby and Lilley in recognition of the significant time and work
spent by those directors on the acquisition date and the further work required to complete the
acquisition of Imaging Experts and Healthcare Services Pty Ltd.
Grant date
Granted as
Remuneration
Value
$
Other
Non-Executive Directors
Mr Howard Digby
Mr Andrew Lilley
28 Aug 2018
5,000,000
125,000
24 months escrow
28 Aug 2018
5,000,000
125,000
24 months escrow
Vested
%
100
100
Total Non-Executive Directors
10,000,000
250,000
TOTAL KMP
10,000,000
250,000
59 Balance at date of appointment, 1 August 2017.
60 Other represents balance on resignation at 25 October 2018.
25
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
Options
The terms and conditions of each grant of options affecting remuneration in the current or future
reporting period are as follows:
Number
Grant date
Vesting and
exercise
date
Expiry
date
Exercise
price
$
Vested
%
Value per
option at
grant date
$
Non-Executive
Directors
Mr Tom Pascarella
1,000,000
25 Oct 2018
25 Oct 2020
25 Oct 2023
Mr Tom Pascarella
3,000,000
25 Oct 2018
25 Oct 2021
25 Oct 2023
Dr Doug Lingard
500,000
10 Dec 2018
10 Dec 2020
10 Dec 2023
Dr Doug Lingard
1,500,000
10 Dec 2018
10 Dec 2021
10 Dec 2023
0.07
0.07
0.053
0.053
0.012
0.016
0.011
0.014
0
0
0
0
Total Non-Executive
Directors
6,000,000
TOTAL KMP
6,000,000
22.4
Performance Related Shares and Options
Class B and C Options
During the year, the company issued Class B and C Options as part of the consideration for the
purchase of Imaging Experts and Healthcare Services Pty Ltd. These options are held by Digital
Imaging Solutions S.A.S. and Dr German Arango and Dr Jorge Marin are shareholders of this company.
Class B and Class C Options are tied to Earnings Before Interest and Tax (EBIT) as the key
performance criteria and expire five years from their grant.
The Class B and Class C Options Performance Shares will vest as the Company exceeds varying
audited revenue thresholds (detailed further below). Given the Company’s long-term growth is largely
determined by commercialisation of the Company’s software as a services business and associated
technologies, the Class B and Class C Options are subject to performance hurdles measured against
the revenue of the business.
Class and Performance Hurdles
1 January
2018
Granted 28
August 2018
Outstanding 31
December
2018
Notes
Class B Options
- 50,000,000
50,000,000 Expiring 28
The company achieving EBIT exceeding
$5,000,000
in any rolling four quarter
period. Exercise price: $0.0375.
August 2023
Class C Options
- 50,000,000
50,000,000 Expiring 28
The company achieving EBIT exceeding
in any rolling four quarter
$7,500,000
period. Exercise price: $0.0375.
August 2023
23
Other Key Management Personnel Disclosures
Transactions with related parties were all made on normal commercial terms.
26
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
The group sold goods and services from entities that are controlled by members of the group’s Key
Management Personnel (KMP):
Entity
Nature of
transactions
KMP
Note
UT Imágenes
Diagnosticas La
Misericordia
RIMAB SAS
Datamedic SAS
Sales
Revenue
Sales
Revenue
Sales
Revenue
G Arango
G Arango
A Vanegas
(a)
(b)
Income
Amounts Outstanding
2018
$
57,106
2017
$
62,854
2018
$
109,690
2017
$
120,979
672,564
480,023
435,292
98,071
659,718
-
698,098
-
The group acquired services from entities that are controlled by members of the group’s KMP:
Entity
RIMAB SAS
German Arango
Jorge Marin
CrossPoint
Telecommunications
Nature of
transactions
Cost of Sales
Joint Venture
Payments
Joint Venture
Payments
Office Space
& IT Services
KMP
Note
G Arango
G Arango
J Marin
C Palacio
(b)
(c)
(d)
(e)
Expenses
Amounts Outstanding
2018
$
489,598
108,891
2017
$
359,248
129,371
2018
$
17,751
44,949
2017
$
865
-
189,042
653,738
171,835
8,917
-
1,165
-
-
(a) Dr Arango is a minority shareholder of UT Imágenes Diagnosticas La Misericordia.
(b) The company has an agreement with RIMAB S.A.S., an entity owned 100% by Dr Arango, whereby
ImExHS receives 95% of the revenues of its PaaS and SaaS contracts with Hospital Isaias Duarte
and Clinica Nueva and is responsible for 95% of the expenses incurred in providing those services.
(c) Chief Executive Director, Dr German Arango has provided equipment to Imaging Experts and
Healthcare Services S.A.S. in return for payments from a joint venture providing PaaS services.
The equipment is repaid at a 200% rate of return on their loan which is paid in monthly instalments
over the initial term of the PaaS contract.
(d) Chief Medical Officer, Dr Jorge Marin has provided equipment to Imaging Experts and Healthcare
Services S.A.S. in return for payments from a joint venture providing PaaS services. The
equipment is repaid at a 200% rate of return on their loan which is paid in monthly instalments over
the initial term of the PaaS contract.
(e) CrossPoint Telecommunications is also a non-exclusive distributor in Australia of ImExHS’s Hiruko
product. No fees have been received or receivable from ImExHS under this distribution agreement
to date.
The company had the following loans from KMP:
KMP
G Arango
J Marin
Balance at start
of year
$
$
Interest paid and
payable
$
$
161,052
-
19,899
-
Net payments
$
$
(180,951)
14,901
Balance at end of
the year
$
$
-
14,901
24
Voting and comments made at the Company’s 2018 Annual General Meeting
The Company received more than 99.9% of “yes” proxy votes on its remuneration report for the 2017
financial year, inclusive of discretionary proxy votes. The Company did not receive any specific
feedback at the AGM or throughout the year on its remuneration practices.
27
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ REPORT
25
Use of remuneration consultants
The Company did not employ services of consultants to review its existing remuneration policies.
26
End of Audited Remuneration Report
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution
of the Board of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Thomas Pascarella
Chairman
21st March 2019
28
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 19 March 2019 and has been approved by the
Board of the Company.
This Corporate Governance Statement discloses the extent to which the Company follows the
recommendations set by the ASX Corporate Governance Council in its publication Corporate
Governance Principles and Recommendations 3rd Edition (Recommendations). The Recommendations
are not mandatory, however the Recommendations that have not been followed have been identified
and reasons for not following them, along with what (if any) alternative governance practices have been
adopted in lieu of the Recommendation.
The Company has adopted a Corporate Governance Plan which provide written terms of reference for
the Company’s corporate governance practices. The Board of the Company has not yet formed an audit
committee, nomination committee, risk management committee or remuneration committee.
The Company’s Corporate Governance Plan
www.imexhs.com.au
is available on
the Company’s website at
Principle 1: Lay solid foundations for management and oversight
Roles of the Board & Management
The role of the Board is to provide overall strategic guidance and effective oversight of management.
The Board derives its authority to act from the Company’s Constitution.
The Board is responsible for and has the authority to determine all matters relating to the strategic
direction, policies, practices, establishing goals for management and the operation of the Company.
The Board delegates responsibility for the day-to-day operations and administration of the Company to
the Managing Director.
The role of management is to support the Managing Director and implement the running of the general
operations and financial business of the Company, in accordance with the delegated authority of the
Board.
•
In addition to matters it is expressly required by law to approve, the Board has reserved the following
matters to itself:
•
Driving the strategic direction of the Company, ensuring appropriate resources are available to
meet objectives and monitoring management’s performance;
Appointment, and where necessary, the replacement, of the Managing Director and other senior
executives and the determination of their terms and conditions including remuneration and
termination.;
Approving the Company’s remuneration framework;
•
• Monitoring the timeliness and effectiveness of reporting to Shareholders;
•
Reviewing and ratifying systems of audit, risk management and internal compliance and control,
codes of conduct and legal compliance to minimise the possibility of the Company operating
beyond acceptable risk parameters;
Approving and monitoring the progress of major capital expenditure, capital management and
significant acquisitions and divestitures;
Approving and monitoring the budget and the adequacy and integrity of financial and other
reporting such that the financial performance of the company has sufficient clarity to be actively
monitored;
Approving the annual, half yearly and quarterly accounts;
Approving significant changes to the organisational structure;
Approving decisions affecting the Company’s capital, including determining the Company’s
dividend policy and declaring dividends;
Recommending to shareholders the appointment of the external auditor as and when their
appointment or re-appointment is required to be approved by them (in accordance with the ASX
Listing Rules if applicable);
Ensuring a high standard of corporate governance practice and regulatory compliance and
promoting ethical and responsible decision making; and
•
•
•
•
•
•
•
29
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
•
Procuring appropriate professional development opportunities for Directors to develop and
maintain the skills and knowledge needed to perform their role as Directors effectively.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board delegates
to the Managing Director responsibility for the management and operation of ImExHS. The Managing
Director is responsible for the day-to-day operations, financial performance and administration of
ImExHS within the powers authorised to him from time-to-time by the Board. The Managing Director
may make further delegation within the delegations specified by the Board and will be accountable to
the Board for the exercise of those delegated powers.
Further details of Board responsibilities, objectives and structure are set out in the Board Charter which
is contained within the Corporate Governance Plan available on the ImExHS website.
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity
to justify the formation of separate committees at this time including audit and risk, remuneration or
nomination committees, preferring at this stage of the Company’s development, to manage the
Company through the full Board of Directors. The Board assumes the responsibilities normally
delegated to the Audit and Risk, Remuneration and Nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees
will be reviewed by the Board and implemented if considered appropriate.
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a director or putting that
person forward as a candidate to ensure that person is competent, experienced, and would not be
impaired in any way from undertaking the duties of director. The Company provides relevant information
to shareholders for their consideration about the attributes of candidates together with whether the
Board supports the appointment or re-election.
The terms of the appointment of a non-executive director, executive directors and senior executives are
agreed upon and set out in writing at the time of appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to
do with the proper functioning of the Board, including agendas, Board papers and minutes, advising the
Board and its Committees (as applicable) on governance matters, monitoring that the Board and
Committee policies and procedures are followed, communication with regulatory bodies and the ASX
and statutory and other filings.
Diversity
The Board has adopted a Diversity Policy which provides a framework for the Company to establish
and achieve measurable diversity objectives, including in respect to gender, age, ethnicity and cultural
diversity. The Diversity Policy allows the Board to set measurable gender diversity objectives (if
considered appropriate) and to assess annually both the objectives (if any have been set) and the
Company’s progress towards achieving them.
The Board considers that, due to the size, nature and stage of development of the Company, setting
measurable objectives for the Diversity Policy at this time is not appropriate. The Board will consider
setting measurable objectives as the Company increases in size and complexity.
The participation of women in the Company at the date of this report is as follows:
• Women employees in the Company
• Women in senior management positions
• Women on the Board
37%
12%
0%
30
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
The Company’s Diversity Policy is available on its website.
Board & Management Performance Review
On an annual basis, the Board conducts a review of its structure, composition and performance.
The annual review includes consideration of the following measures:
•
comparison of the performance of the Board against the requirements of the Board charter;
•
examination of the Board’s interaction with management;
the nature of information provided to the Board by management; and
•
• management’s performance in assisting the Board to meet its objectives.
The method and scope of the performance evaluation will be set by the Board and may include a Board
self-assessment checklist to be completed by each Director. The Board may also use an independent
adviser to assist in the review.
The Chairman has primary responsibility for conducting performance appraisals of Non-Executive
Directors, in conjunction with them, having particular regard to:
•
•
•
•
• membership of and contribution to any Board committees; and
•
contribution to Board discussion and function;
degree of independence including relevance of any conflicts of interest;
availability for and attendance at Board meetings and other relevant events;
contribution to Company strategy;
suitability to Board structure and composition.
The Board conducts an annual performance assessment of the Managing Director against agreed key
performance indicators.
The Managing Director conducts an annual performance assessment of senior executives against
agreed key performance indicators.
As a result of the re-listing of the Company in August 2018 and substantial changes to the structure of
the Board, no formal appraisal of the Board or of the Managing Director were conducted during the
year.
Independent Advice
Directors have a right of access to all Company information and executives. Directors are entitled, in
fulfilling their duties and responsibilities, to seek independent external professional advice as
considered necessary at the expense of the Company, subject to prior consultation with the Chairman.
A copy of any such advice received is made available to all members of the Board.
Principle 2: Structure the board to add value
Board Composition
During the financial year and as at the date of this report the Board was comprised of the following
members:
Mr Thomas Pascarella Non-Executive Chairman (appointed 25 October 2018);
Dr German Arango
Mr Howard Digby
Chief Executive Officer and Managing Director (appointed 28 August 2018);
Non-Executive Director (appointed Non-Executive Chairman 1 August 2018
and reverted to Non-Executive Director 25 October 2018);
Non-Executive Director (appointed 10 December 2018)
Non-Executive Director (appointed 28 August 2018);
Non-Executive Director (appointed 1 July 2017, ceased 25 October 2018); and
Non-Executive Director (appointed 17 November 2017, ceased 28 August
2018).
Dr Douglas Lingard
Mr Carlos Palacio
Mr Andrew Lilley
Mr Peter Webse
The Board comprises of only four Non-Executive Directors and one Executive Director.
31
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
Messrs Pascarella, Digby and Lingard are considered as independent as they are non-executive
directors of the Company. Dr German Arango is not considered to be independent by virtue of being
Managing Director and a substantial shareholder of the Company. Mr Carlos Palacio is not considered
to be independent as he provides contractual services to the Company through CrossPoint
Telecommunications.
ImExHS has adopted a definition of 'independence' for Directors that is consistent with the
Recommendations.
Board Selection Process
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is required
in order to effectively govern ImExHS. The Board believes that orderly succession and renewal
contributes to strong corporate governance and is achieved by careful planning and continual review.
The Board is responsible for the nomination and selection of directors. The Board reviews the size and
composition of the Board regularly and at least once a year as part of the Board evaluation process.
The Board has established a Board Skills Matrix. The Board Skills Matrix includes the following areas
of knowledge and expertise:
strategic expertise;
•
accounting and finance;
•
legal;
•
• managing risk;
• managing people and achieving change;
•
•
experience with financial markets; and
investor relations.
Induction of New Directors and Ongoing Development
New Directors are issued with a formal Letter of Appointment that sets out the key terms and conditions
of their appointment, including Director's duties, rights and responsibilities, the time commitment
envisaged, and the Board's expectations regarding involvement with any Committee work.
An induction program is in place and new Directors are encouraged to engage in professional
development activities to develop and maintain the skills and knowledge needed to perform their role
as Directors effectively.
Principle 3: Act ethically and responsibly
The Company has implemented a Corporate Code of Conduct, which provides a framework for
decisions and actions in relation to ethical conduct in employment. It underpins the Company’s
commitment to integrity and fair dealing in its business affairs and to a duty of care to all employees,
clients and stakeholders.
All employees and Directors are expected to:
respect the law and act in accordance with it;
•
• maintain high levels of professional conduct;
•
•
•
•
respect confidentiality and not misuse Company information, assets or facilities;
avoid real or perceived conflicts of interest;
act in the best interests of shareholders;
by their actions contribute to the Company’s reputation as a good corporate citizen which seeks
the respect of the community and environment in which it operates;
perform their duties in ways that minimise environmental impacts and maximise workplace safety;
exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their
workplace and with customers, suppliers and the public generally; and
act with honesty, integrity, decency and responsibility at all times.
•
•
•
An employee that breaches the Code of Conduct may face disciplinary action including, in the cases of
serious breaches, dismissal. If an employee suspects that a breach of the Code of Conduct has
32
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
occurred or will occur, he or she must report that breach to the Company Secretary, or in their absence,
the Chairman. No employee will be disadvantaged or prejudiced if he or she reports in good faith a
suspected breach. All reports will be acted upon and kept confidential.
Principle 4: Safeguard integrity in corporate reporting
The Board as a whole fulfils to the functions normally delegated to the Audit Committee as detailed in
the Audit Committee Charter.
The Board is responsible for the initial appointment of the external auditor and the appointment of a
new external auditor when any vacancy arises. Candidates for the position of external auditor must
demonstrate complete independence from the Company throughout the engagement period. The Board
may otherwise select an external auditor based on criteria relevant to the Company’s business and
circumstances. The performance of the external auditor is reviewed on an annual basis by the Board.
The Board receives regular reports from management and from external auditors. It also meets with the
external auditors as and when required.
The external auditors attend ImExHS's AGM and are available to answer questions from security
holders relevant to the audit.
Prior approval of the Board must be gained for non-audit work to be performed by the external auditor.
There are qualitative limits on this non-audit work to ensure that the independence of the auditor is
maintained.
There is also a requirement that the lead engagement partner responsible for the audit not perform in
that role for more than five years.
CEO and CFO Certifications
The Board, before it approves the entity’s financial statements for a financial period, receives from its
CEO and CFO (or, if none, the persons fulfilling those functions) a declaration provided in accordance
with Section 295A of the Corporations Act 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.
Principle 5: Make timely and balanced disclosure
The Company has a Continuous Disclosure Policy which outlines the disclosure obligations of the
Company as required under the ASX Listing Rules and Corporations Act. The policy is designed to
ensure that procedures are in place so that the market is properly informed of matters which may have
a material impact on the price at which Company securities are traded.
The Board considers whether there are any matters requiring disclosure in respect of each and every
item of business that it considers in its meetings. Individual Directors are required to make such a
consideration when they become aware of any information in the course of their duties as a Director of
the Company.
The Company is committed to ensuring all investors have equal and timely access to material
information concerning the Company.
The Board has designated the Company Secretary as the person responsible for communicating with
the ASX. All key announcements at the discretion of the Managing Director are to be circulated to and
reviewed by all members of the Board.
The Chairman, the Board, Managing Director and the Company Secretary are responsible for ensuring
that:
33
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
a) company announcements are made in a timely manner, that announcements are factual and do
not omit any material information required to be disclosed under the ASX Listing Rules and
Corporations Act; and
b) company announcements are expressed in a clear and objective manner that allows investors to
assess the impact of the information when making investment decisions.
Principle 6: Respect the rights of security holders
The Company recognises the value of providing current and relevant information to its shareholders.
The Board of the Company aims to ensure that the shareholders are informed of all major developments
affecting the Company’s state of affairs.
The Company respects the rights of its shareholders and to facilitate the effective exercise of those
rights the Company is committed to:
•
communicating effectively with shareholders through releases to the market via ASX, the company
website, information posted or emailed to shareholders and the general meetings of the Company;
giving shareholders ready access to clear and understandable information about the Company;
and
•
• making it easy for shareholders to participate in general meetings of the Company.
The Company also makes available a telephone number and email address for shareholders to make
enquiries of the Company. These contact details are available on the “Corporate Directory” page of the
Company’s website.
Shareholders may elect to, and are encouraged to, receive communications from ImExHS and
ImExHS's securities registry electronically. The contact details for the registry are available on the
“Corporate Directory” page of the “Investor Relations” section of the Company’s website.
The Company maintains information in relation to its Constitution, governance documents, Directors
and senior executives, Board and committee charters, annual reports and ASX announcements on the
Company’s website.
Principle 7: Recognise and manage risk
The Board is committed to the identification, assessment and management of risk throughout ImExHS's
business activities.
The Board is responsible for the oversight of the Company’s risk management and internal compliance
and control framework. The Company does not have an internal audit function. Responsibility for control
and risk management is delegated to the appropriate level of management within the Company with
the Managing Director having ultimate responsibility to the Board for the risk management and internal
compliance and control framework. ImExHS has established policies for the oversight and management
of material business risks.
ImExHS's Risk Management Policy recognises that risk management is an essential element of good
corporate governance and fundamental in achieving its strategic and operational objectives. Risk
management improves decision making, defines opportunities and mitigates material events that may
impact security holder value.
ImExHS believes that explicit and effective risk management is a source of insight and competitive
advantage. To this end, ImExHS is committed to the ongoing development of a strategic and consistent
enterprise wide risk management program, underpinned by a risk conscious culture.
ImExHS accepts that risk is a part of doing business. Therefore, the Company’s Risk Management
Policy is not designed to promote risk avoidance. Rather, ImExHS's approach is to create a risk
conscious culture that encourages the systematic identification, management and control of risks whilst
ensuring we do not enter into unnecessary risks or enter into risks unknowingly.
ImExHS assesses its risks on a residual basis; that is, it evaluates the level of risk remaining and
considering all the mitigation practices and controls. Depending on the materiality of the risks, ImExHS
34
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
applies varying levels of management plans.
The Board has required management to design and implement a risk management and internal
compliance and control system to manage ImExHS’s material business risks. It receives regular reports
on specific business areas where there may exist significant business risk or exposure. The Company
faces risks inherent to its business, including economic risks, which may materially impact the
Company’s ability to create or preserve value for security holders over the short, medium or long term.
The Company has in place policies and procedures, including a risk management framework (as
described in the Company’s Risk Management Policy), which is developed and updated to help manage
these risks. The Board does not consider that the Company currently has any material exposure to
environmental or social sustainability risks.
The Company’s process of risk management and internal compliance and control includes:
•
identifying and measuring risks that might impact upon the achievement of the Company’s goals
and objectives, and monitoring the environment for emerging factors and trends that affect those
risks;
formulating risk management strategies to manage identified risks, and designing and
implementing appropriate risk management policies and internal controls; and
•
• monitoring the performance of, and improving the effectiveness of, risk management systems and
internal compliance and controls, including regular assessment of the effectiveness of risk
management and internal compliance and control.
The Board review’s the Company’s risk management framework at least annually to ensure that it
continues to effectively manage risk.
Management reports to the Board as to the effectiveness of ImExHS’s management of its material
business risks at each Board meeting.
Principle 8: Remunerate fairly and responsibly
The Board as a whole fulfils to the functions normally delegated to the Remuneration Committee as
detailed in the Remuneration Committee Charter.
ImExHS is in the process of implementing a Remuneration Policy which will be designed to recognise
the competitive environment within which ImExHS operates and also emphasise the requirement to
attract and retain high calibre talent in order to achieve sustained improvement in ImExHS’s
performance. The overriding objective of the Remuneration Policy will be to ensure that an individual’s
level of responsibility, individual
remuneration package accurately reflects their experience,
performance and the performance of ImExHS.
The key principles will be to:
•
review and approve the executive remuneration policy to enable the Company to attract and retain
executives and Directors who will create value for shareholders;
ensure that the executive remuneration policy demonstrates a clear relationship between key
executive performance and remuneration;
fairly and responsibly reward executives having regard to the performance of the Group, the
performance of the executive and the prevailing remuneration expectations in the market;
remunerate fairly and competitively in order to attract and retain top talent;
recognise capabilities and promote opportunities for career and professional development; and
review and approve equity based plans and other incentive schemes to foster a partnership
between employees and other security holders.
•
•
•
•
•
The Board determines the Company’s remuneration policies and practices and assesses the necessary
and desirable competencies of Board members. The Board is responsible for evaluating Board
performance, reviewing Board and management succession plans and determines remuneration
packages for the Managing Director, Non-Executive Directors and senior management based on an
annual review process.
ImExHS’s executive remuneration policies and structures and details of remuneration paid to directors
and key management personnel (where applicable) are set out in the Remuneration Report.
35
IMEXHS LTD FINANCIAL REPORT 2018
CORPORATE GOVERNANCE STATEMENT
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their
services, the reimbursement of reasonable expenses and, in certain circumstances options.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is
$250,000 per annum. The Directors set the individual Non-Executive Directors fees within the limit
approved by shareholders.
Executive directors and other senior executives (where appointed) are remunerated using combinations
of fixed and performance based remuneration. Fees and salaries are set at levels reflecting market
rates and performance based remuneration is linked directly to specific performance targets that are
aligned to both short and long term objectives.
The Company prohibits Directors and employees from entering into any transaction that would have
the effect of hedging or otherwise transferring the risk of any fluctuation in the value of any unvested
entitlement in the Company’s securities to any other person.
Further details in relation to the company’s remuneration policies are contained in the Remuneration
Report, within the Directors’ report.
36
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF IMEXHS LIMITED
As lead auditor of ImExHS Limited for the year ended 31 December 2018, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of ImExHS Ltd and the entities it controlled during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 21 March 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
IMEXHS LTD FINANCIAL REPORT 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
Sales Revenue
Cost of Sales
Gross Profit
Note
2018
$
2017
Restated *
$
4
5,779,851
3,545,849
(3,401,426)
(2,652,880)
2,378,425
892,969
Administration and Distribution Expenses
5
(3,023,002)
(1,555,647)
Interest and other revenue
307,129
24,809
Interest, foreign exchange and other expenses
(528,129)
(184,128)
Listing and Share Based Payment Expenses
6
(3,929,770)
-
Profit / (Loss) from ordinary activities before income tax
(4,795,347)
(821,997)
Income tax benefit / (expense)
28
(91,818)
(77,511)
Profit/(Loss) from ordinary activities after income tax
(4,887,165)
(899,508)
Other comprehensive income
Items that may be reclassified to profit and loss
Foreign currency translation of international subsidiaries
Total items that may be reclassified to profit and loss
Other Comprehensive Profit / (Loss) for the year
42,160
42,160
42,160
(57,552)
(57,552)
(57,552)
Total comprehensive profit/(loss) for the period attributable to
the members of ImExHS Limited
(4,845,005)
(957,060)
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
21
21
(0.007)
(0.007)
(0.002)
(0.002)
* Refer note 30 for details about restatements for changes in accounting policies
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
38
IMEXHS LTD FINANCIAL REPORT 2018
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2018
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangibles
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Financial Liabilities
Trade and other payables
Provisions
Other
Total Current Liabilities
Non-Current Liabilities
Deferred Tax Liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share-based payments reserve
Foreign Currency Translation Reserve
Retained profits / (accumulated losses)
TOTAL EQUITY
Note
2018
$
2017
Restated *
$
1 January 2017
Restated *
$
7
8
9
10
11
12
13
14
15
28
16
17
18
2,445,329
3,880,759
811,310
7,137,398
1,591,111
527,368
2,118,479
9,255,877
188,491
1,897,472
419,152
817,744
3,322,859
82,223
82,223
3,405,082
5,850,795
4,593
2,598,144
297,174
2,899,911
446,491
302,729
749,220
18,700
1,761,386
516,295
2,296,381
538,417
113,756
652,173
3,649,131
2,948,554
457,387
594,416
220,152
1,727,868
2,999,823
12,342
12,342
3,012,165
636,966
534,828
511,786
115,747
760,868
1,923,229
27,404
27,404
1,950,633
997,921
10,553,259
1,559,756
963,651
1,208,718
(15,392)
(5,895,790)
5,850,795
-
(57,552)
(865,238)
636,966
-
-
34,270
997,921
* Refer note 30 for details about restatements for changes in accounting policies
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
39
IMEXHS LTD FINANCIAL REPORT 2018
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Note
Issued
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
$
$
$
$
$
Balance at 1 January 2017
Change in accounting policy – AASB 15*
30
Restated total equity at the beginning of
the financial year
Result for the year (restated*)
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Issue of Ordinary Shares, net of
transaction costs
963,651
-
963,651
-
-
-
Balance as 31 December 2017 (restated)
1,559,756
16
596,105
-
-
-
-
-
-
-
-
-
-
-
-
328,026
1,291,677
(293,756)
(293,756)
34,270
997,921
(899,508)
(899,508)
(57,552)
-
(57,552)
(57,552)
(899,508)
(957,060)
-
-
596,105
(57,552)
(865,238)
636,966
Note
Issued
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
$
$
$
$
$
Balance at 1 January 2018 (restated)
1,559,756
Change in accounting policy – AASB 9*
30
-
Restated total equity at the beginning of
the financial year
1,559,756
Result for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Issue of Ordinary Shares, net of
transaction costs
Shares & Options issued
16
17
-
-
-
8,993,503
-
-
-
-
-
-
-
(57,552)
(865,238)
636,966
-
(143,385)
(143,385)
(57,552)
(1,008,623)
493,581
-
(4,887,165)
(4,887,165)
42,160
-
42,160
42,160
(4,887,165)
(4,845,005)
-
-
-
-
8,993,503
1,208,718
-
1,208,718
Balance as 31 December 2018
10,553,259
1,208,718
(15,392)
(5,895,790)
5,850,795
* Refer note 30 for details about restatements for changes in accounting policies
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
40
IMEXHS LTD FINANCIAL REPORT 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) for the year
Adjustments for:
Depreciation and Amortisation
Impairment in receivables
Impairment in inventories
Net (gain)/loss on sale of non-current assets
Equity settled transactions
Movement in trade and other receivables
Movement in inventories
Movement in trade and other payables
Movement in other provisions
Movement in other liabilities
Movement in deferred tax liabilities
Net cash flow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired from acquisitions
Purchase of property, plant & equipment
Movement in intangible assets
Net cash outflows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from issue of options
Equity Settled convertible notes
Movement in financial liabilities
Net cash inflows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange differences
Note
2018
$
2017
$
(4,887,166)
(899,508)
306,711
244,166
81,340
38,077
-
3,929,770
17,274
37,352
29,274
-
(1,142,569)
(854,031)
(552,213)
181,770
924,800
199,001
(936,998)
82,630
104,405
961,869
69,881
(15,063)
(1,969,366)
(109,862)
347,484
-
(1,318,182)
(53,287)
(352,299)
(317,200)
(1,322,997)
(370,487)
5,500,000
601,236
925
500,000
(310,662)
5,690,263
2,397,900
4,593
42,836
-
-
(77,441)
523,795
(4,003)
18,700
(57,553)
4,593
NET CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
7
2,445,329
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
41
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
1
REPORTING ENTITY
ImExHS Limited (“Company”) is a listed public company incorporated and domiciled in Australia. The consolidated
financial statements of the Company as at and for the year ended 31 December 2018 comprise the Company and its
subsidiaries (together referred to as the “consolidated entity” or “Group”).
The consolidated financial statements were authorised by the Board of Directors on the date of signing of the
Directors’ Declaration.
2
BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
ImExHS Limited is a company limited by shares. The financial report is presented in Australian currency. ImExHS
Limited is a for-profit entity.
Historical Cost Convention
These financial statements have been prepared under the historical cost convention.
Significant Judgements and Key Assumptions
The preparation of financial statements in conformity with AASBs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the
amounts recognised in the financial statements are included in the following notes:
Issued Capital
No value has been allocated to the Class A Performance Shares due to the uncertainty of meeting the performance
milestone.
Issued Options
No value has been allocated to the Class B or Class C options due to the uncertainty of meeting the performance
milestone.
Reverse Acquisition
The value of the share based payment in the reverse acquisition is based on the notional amount of shares that
ImExHS Limited would need to issue to acquire the majority interest of ImExHS Limited’s shares that the shareholders
did not own after the acquisition, multiplied by the fair value of the ImExHS Limited shares. The deemed fair value of
ImExHS Limited shares is the exchange ratio applied to the share price of the listed entity (ImExHS Limited) at
acquisition date.
42
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Share Based Payments
Share based payments are measured at the fair value of goods or services received or the fair value of the equity
instrument issued (if the fair value of goods or services cannot be reliably determined) and are recorded at the date
the goods or services are received. The fair value of options is determined using the Black-Scholes option pricing
model. The number of share and options expected to vest is reviewed and adjusted at the end of each reporting
period such that the amount recognised for services received as consideration for the equity instruments granted is
based on the number of equity instruments that eventually vest.
Revenue Recognition
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises
revenue when performance obligations are met. Where there is a warranty provided with contracts, that warranty
obligation is deferred and is recognised as a provision with the amount recognised as a straight-line over the time that
the warranty has been provided. This is generally 12 months. The amount of the warranty has been estimated by the
Group as comprising 10-12% of the associated contract revenue.
The Group has determined that no significant financing component exists in respect of its business due to there being
no significant time delay between the performance obligation being discharged and the receipt of payment.
Going Concern
For the year ended 31 December 2018, the Group generated a consolidated loss of $4,887,165 (2017: loss of
$899,508) and incurred operating cash outflows of $1,969,366 (2017: outflows of $109,862). As at 31 December
2018, the Group had cash and cash equivalents of $2,445,329 (2017: $4,593), a surplus of net current assets of
$3,814,539 (2017: deficit $99,912) and surplus of net assets of $5,850,795 (2017: $636,966).
The financial statements have been prepared on the basis that the entity is a going concern, which contemplates the
continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of
business.
Reverse Acquisitions
On 28 August 2018, ImExHS Limited (formerly Omni Market Tide Ltd) completed the acquisition of Imaging Experts
and Healthcare Services Pty Ltd, an Australian-based company. This company, in turn, had previously acquired
Imaging Experts and Healthcare Services S.A.S., a Colombian-based company, on 20 April 2018. Under Australian
Accounting Standards, Imaging Experts and Healthcare Services S.A.S. was deemed to be the accounting acquirer in
both transactions. The acquisitions have been accounted for as share based payments by which Imaging Experts and
Healthcare Services S.A.S. acquired the net assets of those entities and the listing status of ImExHS Limited.
Accordingly, the consolidated financial statements of ImExHS Limited have been prepared as a continuation of the
business and operations of Imaging Experts and Healthcare Services S.A.S. As the deemed acquirer, Imaging
Experts and Healthcare Services S.A.S. has accounted for the acquisition of Imaging Experts and Healthcare
Services Pty Ltd from 20 April 2018 and has accounted for the acquisition of ImExHS Limited from 28 August 2018.
The comparative information for the year ended 31 December 2017 is that of Imaging Experts and Healthcare
Services S.A.S.
The implications of the acquisition by Imaging Experts and Healthcare Services S.A.S. on the financial statements are
as follows:
(i)
Statement of Profit or Loss and Other Comprehensive Income
The statement of profit or loss and other comprehensive income comprises the total comprehensive
income for the 12 months ended 31 December 2018 for Imaging Experts and Healthcare Services
43
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
S.A.S. and its wholly owned subsidiaries; for the period 20 April 2018 to 31 December 2018 for
Imaging Experts and Healthcare Services Pty Ltd; and for the period 28 August 2018 to 31 December
2018 for ImExHS Limited and its wholly owned subsidiary OMT Operations (AU) Pty Ltd.
The statement of profit or loss and other comprehensive income for the year ended 31 December
2017 comprises the results of Imaging Experts and Healthcare Services S.A.S. and its wholly owned
subsidiaries only.
(ii)
Statement of Financial Position
The statement of financial position as at 31 December 2018 represents the combination of Imaging
Experts and Healthcare Services S.A.S. and its wholly owned subsidiaries with Imaging Experts and
Healthcare Services Pty Ltd and with ImExHS Limited.
The statement of financial position comparative only represents Imaging Experts and Healthcare
Services S.A.S. and its wholly owned subsidiaries as at 31 December 2017.
(iii)
Statement of Changes in Equity
The Statement of Changes in Equity comprises:
i. The equity balance of Imaging Experts and Healthcare Services S.A.S. at the beginning of the
financial year (1 January 2018).
ii. The total comprehensive income for the financial year and transactions with equity holders,
being 12 months for Imaging Experts and Healthcare Services S.A.S. and its wholly owned
subsidiaries for the year ended 31 December 2018; for the period 20 April 2018 to 31
December 2018 for Imaging Experts and Healthcare Services Pty Ltd; and for the period 28
August 2018 to 31 December 2018 for ImExHS Limited.
iii. The equity balance of the combined Imaging Experts and Healthcare Services S.A.S. and its
wholly owned subsidiaries, Imaging Experts and Healthcare Services Pty Ltd and ImExHS
Limited.
The Statement of Changes in Equity comparatives comprise the fully financial year for Imaging
Experts and Healthcare Services S.A.S. and its wholly owned subsidiaries for the 12 months ended
31 December 2017.
(iv)
Statement of Cash Flows
The Statement of Cash Flows comprises:
i. The cash balance of Imaging Experts and Healthcare Services S.A.S. and its wholly owned
subsidiaries at the beginning of the financial year (1 January 2018).
ii. The transactions for the financial year for Imaging Experts and Healthcare Services S.A.S.
and its wholly owned subsidiaries for the 12 months ended 31 December 2018; for Imaging
Experts and Healthcare Services Pty Ltd from 20 April 2018 to 31 December 2018; and for
ImExHS Limited from 28 August 2018 to 31 December 2018.
The Statement of Cash Flows comparative comprises the fully financial year of Imaging Experts and
Healthcare Services S.A.S. and its wholly owned subsidiaries for the year ended 31 December 2017.
44
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(v)
Equity Structure
The equity structure (the number and type of equity instruments issued) in the financial statements
reflects the consolidated equity structure of Imaging Experts and Healthcare Services S.A.S. and its
wholly owned subsidiaries; for Imaging Experts and Healthcare Services Pty Ltd; and for ImExHS
Limited and its wholly owned subsidiary.
The comparative reflects the equity structure of Imaging Experts and Healthcare Services S.A.S.
(vi)
Earnings Per Share
The weighted average number of shares outstanding for the year ended 31 December 2018 is based
on the weighted average number of shares in ImExHS Limited outstanding in the period following the
acquisition.
The comparative weighted average number of shares is based on the legal subsidiary’s (Imaging
Experts and Healthcare Services S.A.S.) weighted average shares multiplied by the exchange ratio.
(vii)
Deemed Consideration and Listing Expense
The purchase consideration was the issue of shares and options in ImExHS Limited (legal parent)
was deemed to be $3,766,429 based on the following:
Ordinary Shares
Share price based on capital raising
Deemed consideration
The purchase consideration was settled via shares and options as follows:
Instrument
Ordinary Shares
Class A Options
Class B Options
Class C Options
Number
520,000,000
50,000,000
50,000,000
50,000,000
150,657,180
$0.025
$3,766,429
Value
$
3,316,429
450,000
-
-
$3,766,429
The transaction created a one-off non-cash expense arising from the treatment of the acquisition of
ImExHS Limited in accordance with Australian Accounting Standards:
Deemed consideration
Less: net assets of ImExHS Limited at time of acquisition
Listing Expense
$3,766,429
($699,239)
$3,067,190
3
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial
report. The accounting policies have been consistently applied, unless otherwise stated.
(a) Basis of Consolidation
The consolidated financial statements comprise the financial statements of ImExHS Limited and its subsidiaries (the
Group) as at 31 December 2018 or for any time during the year.
45
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an
entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred
asset.
(b) Revenue Recognition
Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the sale of goods or provision
of services to entities outside the Group. The Group recognises revenue from contracts with customers in accordance
with the recognition of the completion of performance obligations under the contract. Where a contract includes an
element of a warranty obligation, the revenue attributable to this warranty obligation is recognised evenly over the period
for which the obligation exists.
Interest revenue is recognised using the effective interest method. It includes the amortisation of any discount or
premium. The revenue is recognised over the time the interest is earned.
(c) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows.
(d) Impairment of Assets
At each reporting date, the Group determines whether there is any indication that assets have been impaired. If such
an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and
value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the Statement of Profit or Loss and Other Comprehensive Income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount
does not exceed the original amount. A reversal of an impairment loss is recognised immediately in the Statement of
Profit or Loss and Other Comprehensive Income.
(e) Income Tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in Consolidated Statement
of Profit or Loss and Other Comprehensive Income except to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
46
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred
tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of
assets or liabilities in a transaction that is not a business combination and that affects neither account nor taxable profit,
and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will
not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realised.
ImExHS Limited and its wholly-owned Australian subsidiaries have not formed an income tax consolidated group under
the tax consolidation regime.
(f) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks.
(g) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related
contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market and are stated at amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and
amortisation.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been
impaired. Any impairment losses are recognised in the Statement of Profit or Loss and Other Comprehensive Income.
(h) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
(i) Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the Group.
(j) Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise receivables, payables, cash and short-term deposits.
47
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the
Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial
targets whilst protecting future financial security.
The main risks arising from the Group financial instruments are interest rate risk and foreign currency risk. The Group
uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring
levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate,
foreign exchange and commodity prices. Ageing analyses and monitoring of specific credit allowances are undertaken
to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees
policies for managing each of the risks identified, including the setting of limits for credit allowances and future cash flow
forecast projections.
(k) Segment Reporting
Operating segments are reported in a manner that is consistent with the internal reporting to the chief operating decision
maker (“CODM”), which has been identified by the Group as the Managing Director and other members of the Board of
directors.
(l) Employee Entitlements
The Group’s liability for employee entitlements arising from services rendered by employees to reporting date is
recognised in provisions. Employee entitlements expected to be settled within one year together with entitlements arising
from wages and salaries, and annual leave which will be settled within one year, have been measured at their nominal
amount and include related on-costs.
(m) Earnings Per Share
(i) Basic Earnings Per Share
Basic earnings per share is determined by dividing the net loss attributable to the equity holder of the Group after income
tax by the weighted average number of ordinary shares outstanding during the financial year.
(ii) Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in determination of basic earnings per share by taking into account
amounts unpaid on ordinary shares and any reduction in earnings per share that will arise from the exercise of options
outstanding during the year.
(n) Trade and Other Receivables
Receivables are initially recognised at the amount of consideration due from customers that is unconditional and
subsequently measured at amortised cost. The Group will apply the simplified impairment methodology provided by
AASB 9.
Current receivables are generally due for settlement within 30-90 days. Cash on deposit is not due for settlement until
rights of tenure are forfeited or performance obligations are met.
(o) Trade and Other Payables
Trade payables and other payables are carried at cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial period that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services. The amounts are unsecured and usually paid within
30-90 days of recognition.
48
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(p) Contributed Equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds
received.
(q) Contingent Liabilities
A contingent loss is recognised as an expense and a liability if it is probable that future events will confirm that after
taking into account any related probable recovery, an asset has been impaired or a liability incurred and, a reasonable
estimate of the amount of the resulting loss can be made.
(r) Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax from the proceeds.
(s) Research and Development
The Group expenses all research costs as incurred. The amounts incurred in respect of development costs are only
recognised as a development asset when there is a high probability that the Group will have the ability to generate sales
with respect to that asset.
Following initial recognition of development expenditure as a development asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Consideration of amortisation of the asset begins when
development is complete and the asset is available for use. Currently development has not yet been finalised.
Amortisation is recorded in other expenses. During the period of development, the asset is tested for impairment
annually.
(t) Share-Based Payment Arrangements
Goods or services received or acquired in share-based payment transactions are recognised as an increase in equity if
the goods or services were received in an equity-settled share-based payment transaction or as a liability if the goods
and services were acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value of the
goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the value of
the goods or services is determined indirectly by reference to the fair value of the equity instrument granted using a
Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option.
Transactions with employees and others providing similar services are measured by reference to the fair value at grant
date of the equity instrument granted using a Black-Scholes option pricing model.
(u) Property, Plant and Equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on
qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item
can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
49
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
profit or loss. When revalued assets are sold, it is group policy to transfer any amounts included in other reserves in
respect of those assets to retained earnings.
The depreciable amount of all fixed assets is depreciated on a straight-line basis or diminishing value (whichever is
more appropriate) over their useful lives to the entity commencing from the time the asset is held ready for use.
The effective lives used for each class of depreciable assets are:
Class of Fixed Asset
Effective Life
Furniture and Fittings
Computer Equipment
Medical Equipment
(v) Inventories
5-10 years
3-5 years
5-10 years
Inventories are assets held for sale in the normal course of operations. The inventories of the Group related to goods
not manufactured by the Group, and are measured at the lower of cost and net realisable value, with the majority being
valued on a weighted average basis.
(w) Intangible Assets
The intangible assets of related to licensing of software and copyright, which are stated at cost less accumulated
amortisation and accumulated impairment losses. These intangible assets are generally amortized on a straight line
over the estimated life of 5 -10 years.
(x) Leases
Leases are classified as financial when the lease terms substantially transfer to tenants all the risks and rewards inherent
in ownership of the property. All other leases are classified as operating.
As lessor
The rental income under operating leases is recognized using the straight-line method over the term of the lease. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the asset
leased and recognized on a straight-line basis over the term of the lease.
As lessee
Leased assets classified as finance leases are recognised as assets. The amount initially brought to account is the
present value of the minimum lease payments. Finance leased assets are amortised on a diminishing value basis over
the estimated useful life of the assets.
Finance lease payments are allocated between interest expense and reduction of lease liability over the term of the
lease. The interest rate is determined by applying the interest rate implicit in the lease to the outstanding lease liability
at the beginning of each lease payment period.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement
of Profit or Loss and Other Comprehensive Income on a straight-line basis over the period of the lease.
(y) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is measured using the currency of the primary economic
environment in which that entity operates.
50
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss.
Exchange differences arising on the translation of non-monetary items are recognised in other comprehensive income
to the extent that the underlying gain or loss is recognised as other comprehensive income; otherwise the exchange
difference is recognised in profit or loss.
4
REVENUES
Medical Equipment and Licences
Leasing equipment and software and services
Sale of inputs
Service and maintenance of equipment and software
Returns and discounts given
Timing of revenue recognition:
Over time
At a point in time
2018
$
2,337,571
2,611,973
756,197
180,716
(106,606)
2017
$
1,091,108
2,273,309
91,819
96,730
(7,117)
5,779,851
3,545,849
2,797,682
2,982,169
2,359,732
1,186,117
5,779,851
3,545,849
The Group derived revenue from the one geographical region, Latin America.
Revenue recognised in the year ended 31 December 2018 that was included in contract liabilities as at 1 January
2018 is $1,179,158.
51
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
5
ADMINISTRATION AND DISTRIBUTION EXPENSES
Employee and Director Benefit Expenses
Fees
Taxes
Leases
Insurance
Services & Utilities
Legal
Maintenance
Travel
Depreciation and Amortisation
Provisions
Impairment losses on contract assets
Loss on Sale of Fixed Assets
Other
6
LISTING AND SHARE BASED PAYMENT EXPENSES
Share based payment expense on acquisition of Imaging Experts and Healthcare
Services Pty Ltd
Share based payment expense on issue of Director shares
Share based payment expense on issue of Director options
Listing expense on reverse acquisition of ImExHS Limited (Note 2)
Issue of options pursuant to convertible notes
Finance cost of convertible notes
7
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Savings and Investments
52
2018
$
1,160,255
260,613
83,181
117,822
23,223
433,466
57,304
16,564
189,158
306,711
37,776
75,344
-
2017
$
592,173
106,219
72,872
93,795
15,042
57,016
3,698
16,962
125,635
244,166
38,889
18,761
29,429
261,585
140,990
3,023,002
1,555,647
2018
$
2017
$
345,606
250,000
4,599
3,067,190
137,375
125,000
3,929,770
-
-
-
-
-
-
-
2018
$
53,805
2,391,524
2,445,329
2017
$
4,260
333
4,593
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
8
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Prepayments
Indirect tax receivables
Other
2018
$
2017
$
3,362,828
2,381,934
61,964
446,435
9,532
4,268
193,024
18,918
3,880,759
2,598,144
Trade receivables are non-interest bearing.
Information about the impairment of trade and other receivables, their credit quality and the group's exposure to credit
risk, foreign currency risk and interest rate risk can be found in Note 25.
9
INVENTORIES
Merchandise not manufactured by the Group
Materials and spare parts
Impairment in inventories
2018
$
840,220
46,518
(75,428)
811,310
2017
$
305,224
29,302
(37,352)
297,174
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 31 December 2018 amounted to $2,061,522 (2017:
$2,032,731). These were included in cost of sales.
Write-downs of inventories to net realisable value amounted to $38,076 (2017: $37,352). These were included in
Other administration and distribution expenses – provisions.
10 PROPERTY, PLANT AND EQUIPMENT
Furniture and Fitting – at cost
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Medical Equipment – at cost
Less: Accumulated depreciation
53
2018
$
27,459
(10,371)
17,088
945,182
(151,908)
793,274
986,106
(205,357)
780,749
1,591,111
2017
$
12,174
(7,826)
4,348
213,789
(58,362)
155,427
400,546
(113,830)
286,716
446,491
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Balance at 1 January 2017
Additions
Disposals
Depreciation expense
Exchange differences
Furniture and
Fittings
$
Computer
Equipment
$
7,927
21,484
Medical
Equipment
$
509,005
-
(945)
(2,111)
(523)
156,613
(4,138)
(16,980)
(1,552)
-
(99,310)
(88,354)
(34,625)
Total
$
538,416
156,613
(104,393)
(107,445)
(36,700)
Balance at 31 December 2017
4,348
155,427
286,716
446,491
Additions
Disposals
Depreciation expense
Exchange differences
15,089
-
(2,488)
139
718,176
(1,622)
(83,735)
5,028
606,839
(27,737)
(92,828)
7,759
1,340,104
(29,359)
(179,051)
12,926
Balance at 31 December 2018
17,088
793,274
780,749
1,591,111
11
INTANGIBLES
Copyright – at cost
Less: Accumulated amortisation
Licences – at cost
Less: Accumulated amortisation
Reconciliations
2018
$
27,908
(14,372)
13,355
818,739
(304,906)
513,833
2017
$
27,465
(10,299)
17,166
444,879
(159,316)
285,563
527,368
302,729
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Balance at 1 January 2017
Additions
Disposals
Amortisation expense
Exchange differences
Balance at 31 December 2017
Additions
Disposals
Amortisation expense
Exchange differences
Balance at 31 December 2018
Copyright
$
Licences
$
29,604
84,152
Total
$
113,756
-
-
(10,375)
(2,063)
17,166
-
-
(4,720)
1,089
13,535
302,070
-
(95,271)
(5,388)
302,070
-
(105,646)
(7,451)
285,563
302,729
325,423
-
(122,939)
25,786
325,423
-
(127,659)
26,875
513,833
527,368
54
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
12
FINANCIAL LIABILITIES
Current:
Overdraft
Credit Cards
Loans (refer below for additional information)
2018
$
2017
$
-
8,716
179,775
188,491
4,344
9,167
443,876
457,387
Due to their short-term nature, the carrying amount of financial liabilities are assumed to be the same as their fair values.
Details of loans are included below:
Unsecured
Revolving credit Banco Davivienda
Revolving credit Banco Colpatria
Banco Procredit
Banco Colpatria
Banco Davivienda
Banco Davivienda
Banco Pichincha-Poliza Todo Riesgo
Other
Total unsecured loans
Total loans
13
TRADE AND OTHER PAYABLES
Trade payables
Rate
%
Term
2018
$
2017
$
15.7%
18.0%
Ends 18/7/19
Ends 11/2/21
14.7%
Ends 10/5/19
21.9%
Ends 30/4/19
10,700
120,866
-
-
6,444
-
-
41,765
179,775
179,775
100,497
146,272
150,676
8,982
18,733
13,498
5,218
-
443,876
443,876
2018
$
2017
$
1,897,472
1,897,472
594,416
594,416
Due to their short-term nature, the carrying amount of trade payables are assumed to be the same as their fair values.
14 PROVISIONS
Employee benefits
2018
$
2017
$
419,152
419,152
220,152
220,152
55
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
15 OTHER CURRENT LIABILITIES
Income Taxes
Indirect Taxes
Other
Contract liabilities relating to contracts with customers
16
ISSUED CAPITAL
2018
$
2017
$
22,151
445,532
258,581
91,480
817,744
113,675
353,378
81,656
1,179,159
1,727,868
2018
Shares
2017
Shares
2018
$
2017
$
Ordinary shares – fully paid
925,657,186
8,178
10,553,259
1,559,756
Movements in ordinary share capital
Balance
Balance
Elimination of Imaging Experts and Healthcare Services SAS
shares on acquisition of ImExHS Limited
Existing shares in ImExHS Limited
Issue of Shares pursuant to the Acquisition (Note 2)
Issue of Shares pursuant to the Public Offer
Issue of Shares pursuant to Convertible Note Offer
Issue of Director Shares in lieu of fees
Cost of share issue
Issue of Lead Advisor Options
Issue of Shares on Expiry of Class A Performance Shares
Balance
Date
No of shares
$
1 Jan 2017
31 Dec 2017
8,178
8,178
1,559,756
1,559,756
28 Aug 2018
(8,178)
28 Aug 2018
150,657,180
-
-
28 Aug 2018
520,000,000
3,316,430
28 Aug 2018
220,000,000
5,500,000
28 Aug 2018
25,000,000
28 Aug 2018
10,000,000
28 Aug 2018
28 Aug 2018
31 Dec 2018
-
-
6
625,000
250,000
(427,927)
(270,000)
-
31 Dec 2018
925,657,186
10,553,259
In addition to the above, the following Performance Shares and Options have been issued in ImExHS Limited:
750,000 unquoted Class A Performance Shares: These are convertible to ordinary shares as the Group exceeds varying
audited revenue thresholds (detailed below). Given the Group’s long-term growth is largely determined by
commercialisation of the Group’s stakeholder engagement platform and associated technologies, the Class A
Performance Shares are subject to performance hurdles measured against audited revenue of the business. The
quantum of distribution of the Class A Performance Shares on issue is detailed in the table below.
56
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Class and Performance Hurdles
The audited revenue of GRT App during any
financial year being equal to or greater than
$3,000,000.
The audited revenue of GRT App during any
financial year being equal to or greater than
$4,000,000.
The audited revenue of GRT App during any
financial year being equal to or greater than
$6,000,000.
The audited revenue of GRT App during any
financial year being equal to or greater than
$8,000,000.
1 January
2018
Expired 31
December
2018
Outstanding
31 December
2018
Notes
750,000
(750,000)
750,000
(750,000)
750,000
(750,000)
-
-
-
750,000
-
750,000
Converted to 6
Ordinary
Shares
Must be
converted on
or before 22
July 2020
Total Class A Performance Shares
3,000,000
(2,250,000)
750,000
There were no performance shares converted or redeemed during the period and no performance milestones were met.
Capital Management
When managing capital, the Board’s objective is to ensure the Group continues as a going concern as well as to
maximise the returns to shareholders and benefits for other stakeholders. The Board also aims to maintain a capital
structure that ensures the lowest cost of capital available to the entity.
The Group was not subject to any externally imposed capital requirements during the year.
17 SHARE BASED PAYMENTS RESERVE
Amounts paid on issue of options
Option valuation reserve
Consolidated
2018
Consolidated
2017
$
1,013
1,207,705
1,208,718
$
-
-
-
Pursuant to the acquisition of Imaging Experts and Healthcare Services Pty Ltd and the related capital raising on 28
August 2018, ImExHS Limited issued a total of 192,500,000 options to certain original shareholders of Imaging Experts
and Healthcare Services Pty Ltd, original convertible noteholders of Imaging Experts and Healthcare Services Pty Ltd
and advisers.
In addition, ImExHS Limited issued 6,000,000 options to incoming non-executive directors of ImExHS Limited in October
and December 2018.
57
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Shares & Options issued to pursuant to acquisition of Imaging Experts and
Healthcare Services Pty Ltd in April 2018 (Note 6)
Options issued pursuant to acquisition agreement in August 2018 (Note 2)
Options issued pursuant to convertible note agreement in August 2018
Options issued to Lead Adviser pursuant to Placement in August 2018
Options issued pursuant to Director remuneration in October 2018
Options issued pursuant to Director remuneration in December 2018
Year ended
31 December 2018
No. of
Options
-
150,000,000
12,500,000
30,000,000
4,000,000
2,000,000
$
345,606
450,000
137,500
270,000
4,038
561
Total Issued
198,500,000
1,207,705
At the date of this report, the unissued ordinary shares of ImExHS Limited under option are unlisted and are as
follows:
Type
Grant date
Date of
expiry
Exercise
price
Number
under option
Valuation
Note
Options
Class A
Options*
Class B
Options*
Class C
Options*
7/7/2017
31/3/2021
$0.025
35,000,000
233,480
28/8/2018
30/6/2021
$0.05
50,000,000
450,000
28/8/2018
28/8/2023
$0.0375
50,000,000
28/8/2018
28/8/2023
$0.0375
50,000,000
-
-
(a)
(b)
New Options*
28/8/2018
30/6/2021
$0.0375
12,500,000
137,500
Advisor
Options*
28/8/2018
30/6/2021
$0.05
30,000,000
270,000
Director Options
25/10/2018
25/10/2023
$0.07
4,000,000
60,000
(c)
Director Options
9/12/2018
9/12/2023
$0.053
2,000,000
26,500
(d)
Total
* Subject to escrow
233,500,000
(a) Options issued in consideration for Imaging Experts and Healthcare Services Pty Ltd, subject to the vesting
condition of the Group exceeding $5,000,000 EBIT in any rolling four quarter period.
(b) Options issued in consideration for Imaging Experts and Healthcare Services Pty Ltd, subject to the vesting
condition of the Group exceeding $7,500,000 EBIT in any rolling four quarter period.
(c) Options issued as remuneration to Mr Tom Pascarella, subject to vesting conditions.
(d) Options issued as remuneration to Dr Doug Lingard, subject to vesting conditions.
The value of the share-based payments issued in 2018 was measured at the fair value of the equity instruments issued
using the Black-Scholes pricing model applying the relevant expiry date, exercise price, a spot price of $0.025 (the issue
price at the date of the transaction), a raw risk free rate of 2.09% and a volatility of between 80%-100%
The weighted average remaining contractual life of options outstanding at the end of the period was 3.39 years.
58
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
18 RETAINED PROFITS / ACCUMULATED LOSSES
Balance at the beginning of the financial year (restated)
Change in accounting policy (Note 30)
Net loss attributable to members
Balance at the end of the financial year
* Refer note 30 for details about restatements for changes in accounting policies
19 RELATED PARTY TRANSACTIONS
(a) Compensation
Consolidated
2018
$
(865,238)
(143,385)
(4,887,165)
(5,895,790)
Consolidated
Restated *
2017
$
328,026
(293,756)
(899,508)
(865,238)
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2018
$
534,944
-
2,491
254,599
792,034
2017
$
236,011
-
-
-
236,011
(b) Other Key Management Personnel Disclosures
Transactions with related parties were all made on normal commercial terms.
The group sold goods and services from entities that are controlled by members of the group’s Key Management
Personnel (KMP):
Entity
Nature of
transactions
KMP
Note
UT Imágenes Diagnosticas La
Misericordia
RIMAB SAS
Datamedic SAS
Sales Revenue
G Arango
Sales Revenue
Sales Revenue
G Arango
A Vanegas
(a)
(b)
Income
2018
$
57,106
2017
$
Amounts
Outstanding
2018
$
2017
$
62,854
109,690 120,979
672,564
659,718
480,023
-
435,292
698,098
98,071
-
The group acquired services from entities that are controlled by members of the group’s KMP:
Expenses
Entity
Nature of
transactions
KMP
Note
RIMAB SAS
German Arango
Jorge Marin
CrossPoint Telecommunications
Cost of Sales
Joint Venture
Payments
Joint Venture
Payments
Office Space & IT
Services
G Arango
G Arango
J Marin
C Palacio
(b)
(c)
(d)
(e)
59
Amounts
Outstanding
2018
$
489,598
108,891
2017
$
359,248
129,371
2018
$
17,751
44,949
2017
$
865
-
189,042
653,738
171,835
8,917
-
1,165
-
-
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(a) Dr Arango is a minority shareholder of UT Imágenes Diagnosticas La Misericordia.
(b) The Group has an agreement with RIMAB S.A.S., an entity owned 100% by Dr Arango, whereby ImExHS receives
95% of the revenues of its PaaS and SaaS contracts with Hospital Isaias Duarte and Clinica Nueva and is
responsible for 95% of the expenses incurred in providing those services.
(c) Chief Executive Director, Dr German Arango has provided equipment to Imaging Experts and Healthcare Services
S.A.S. in return for payments from a joint venture providing PaaS services. The equipment is repaid at a 200% rate
of return on their loan which is paid in monthly instalments over the initial term of the PaaS contract.
(d) Chief Medical Officer, Dr Jorge Marin has provided equipment to Imaging Experts and Healthcare Services S.A.S.
in return for payments from a joint venture providing PaaS services. The equipment is repaid at a 200% rate of
return on their loan which is paid in monthly instalments over the initial term of the PaaS contract.
(e) CrossPoint Telecommunications is also a non-exclusive distributor in Australia of ImExHS’s Hiruko product. No
fees have been received or receivable from ImExHS under this distribution agreement to date.
The company had the following loans from KMP:
KMP
G Arango
J Marin
Balance at start
of year
$
$
161,052
-
Interest paid
and payable
$
$
19,899
-
Net payments
$
$
(180,951)
14,901
Balance at end
of the year
$
$
-
14,901
20 AUDITOR’S REMUNERATION
Paid and payable remuneration of the auditor of the parent entity for:
BDO Audit (WA) Ltd
Auditing and review of financial reports
Prepare tax returns
Prepare Investigating Accountants Report & Corporate Advisory Services
Paid and payable remuneration of the audit of Imaging Experts and Healthcare
Services S.A.S. for:
Auditing and review of financial reports
2018
$
2017
$
25,500
6,255
27,000
58,755
26,900
4,080
7,093
38,073
23,223
-
60
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
21 EARNINGS PER SHARE
Earnings used in calculating earnings per share
Net Profit/(Loss) after income tax
2018
$
2017
$
(4,887,165)
(899,508)
Net Profit/(Loss) after income tax attributable to the owners of ImExHS Limited
(4,845,005)
(957,060)
Basic earnings/(loss) per share attributable to equity holders (cents per share)
Diluted earnings/(loss) per share attributable to equity holders (cents per share)
(0.007)
(0.007)
(0.002)
(0.002)
Weighted average number of ordinary shares outstanding during the year used in
calculating basic EPS
Adjustments for calculation of diluted earnings per share
Weighted average number of ordinary shares outstanding during the year used in
calculating diluted EPS
658,923,692 520,000,000
-
-
658,923,692 520,000,000
Options outstanding during the year have not been taken into account in the calculation of the weighted average
number of shares as they are not considered dilutive. Performance shares are not considered to be dilutive as their
conversion to ordinary shares would reduce the loss attributable to members.
22 GROUP ENTITIES
Parent Entity
The legal and ultimate parent of the group is ImExHS Limited. The consolidated financial statements include the
financial statements of the subsidiaries listed in the following table.
Name
Principal place of business /
Country of incorporation
OMT Operations (AU) Pty Ltd
Imaging Experts and Healthcare Services Pty Ltd
Imaging Experts and Healthcare Services S.A.S.
Australia
Australia
Colombia
Ownership interest
2017
%
2018
%
100%
100%
100%
100%
N/A
N/A
61
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
23 PARENT ENTITY INFORMATION
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Loans and other receivables
Other
Total Current Assets
Non-Current Assets
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Other
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Changes in assets and liabilities:
Issued capital
Share based payments reserve
Accumulated losses
TOTAL EQUITY
2018
$
2017
$
2,404,513
3,481
3,476,256
-
963,928
574,730
-
2,087
5,884,250
1,540,745
4,713
4,713
7,035
7,035
5,888,963
1,547,780
38,168
-
38,168
74,094
15,000
89,094
89,094
5,850,795
1,458,686
14,684,067
8,375,423
646,379
233,480
(9,479,651)
(7,150,217)
5,850,795
1,458,686
24 EVENTS OCCURING AFTER THE REPORTING PERIOD
There has not been any matter or circumstance occurring subsequent to the end of the financial year that has
significantly affected, or may significantly affect, the operation of the entity, the results of those operations, or the state
of affairs of the entity in future financial years.
25
FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a number of financial risks, including interest rate risk, foreign exchange risk, credit
risk and liquidity risk.
The Group uses different methods to measure different types of risk it is exposed to. These methods include sensitivity
analysis in the case of interest rate risk and foreign exchange risk, and ageing analysis for credit risk.
Financial risk management is carried out by the board.
Market Risk
62
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Cash flow and fair value interest rate risk
During the year, the Group was exposed to interest rate risk through borrowings with variable rates. As at 31 December
2018, the group had $146,726 outstanding (2017: $301,494). A change of +/- 2% per annum with all other variables
being constant would impact equity and net profit by $2,935 (2017: $6,030).
The entity is exposed to interest rate risk at the date of this report via its cash holdings.
The entity does not currently have any formal policies in place regarding interest rate risk as it is not considered
significant.
Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are
denominated in a currency that is not the entity’s functional currency. Individual transactions are assessed, and forward
exchange contracts are used to hedge the risk where deemed appropriate.
While the Group as a whole has assets and liabilities in different currencies, individual entities in the Group do not have
a significant foreign exchange exposure to receivables or payables in currencies that are not their functional currency.
The Company’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars,
was as follows:
Cash
Trade and other debtors
Trade and other payables
COP
$
18,284
3,421,409
809,430
31 Dec 18
USD
$
-
444,579
614,221
EUR
$
-
-
388,918
COP
$
4,593
1,767,278
332,235
31 Dec 2017
USD
$
-
830,866
59,805
EUR
$
-
202,286
Based on the financial instruments held at 31 December 2018, had the Australian dollar weakened by 5% against the
Colombian Peso, US Dollar and Euro, with all other variables held constant, the Group’s pre-tax profit for the year would
have been $103,585 higher (2017: $100,416 higher). If the Australian dollar had strengthened the corresponding impact
would have been a decrease in pre-tax profit by the same amount.
Price risk
The Group is not exposed to significant price risk.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Credit risk principally arises from customers, cash and cash equivalents, and deposits with
banks and financial institutions.
For banks and financial institutions, the creditworthiness is assessed prior to entering into arrangements and approved
by the Board.
For customers, the maximum exposure to credit risk at the reporting date is the higher of the carrying value and fair
value of each receivable. Risk control involves the assessment of the credit quality, taking into account financial position,
past experience and other factors. The utilisation of credit limits is regularly monitored.
AASB 9 Financial Instruments
AASB 9 Financial Instruments, introduces a new model for classification and measurement of financial assets and
liabilities, an expected credit loss (ECL) impairment model and reformed approach to hedge accounting. In accordance
with the transitional provisions of AASB 9, comparative figures have not been restated.
In accordance with the ECL impairment model in AASB 9, the Group was required to revise its methodology and
accounting policies for the impairment of trade receivables and contract assets identified in AASB 15 Revenue from
Contracts with Customers. The updated accounting policy effective 1 January 2018 is set out below. The Group has
assessed the financial impact of adopting the new impairment model on transition to be immaterial due to the historically
63
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
low level of bad debt in the Group and taking into account appropriate forward-looking information. On this basis, the
loss allowance for trade receivables as at 31 December 2018 as follows:
Trade receivables
ECL %
Loss Allowance
Current
1,347,278
0%
-
< 3 months
1,272,481
0%
-
3-6 months
216,599
13%
25,020
6-12 months > 12 months
562,214
37%
189,000
227,574
24%
49,298
Total
3,626,146
263,318
Past Due
The closing loss allowance for trade receivables as at 31 December 2018 reconcile to the opening loss
allowance as follows:
Opening 31 December
Amounts restated through opening retained earnings
Opening loss allowance at 1 January 2018 – calculated under AASB 9
Increase in loss allowance recognised in profit or loss during the year
Foreign Exchange Differences
Closing 31 December
Liquidity risk
2018
$
2017
$
37,860
143,385
181,245
74,512
7,561
263,318
20,586
-
20,586
18,761
(1,487)
37,860
The entity manages liquidity risk my monitoring forecast cash flows and ensuring sufficient cash reserves are on hand
to meet obligations.
Cash and Cash Equivalents
2018
$
2,445,329
2,445,329
2017
$
4,593
4,593
Financial instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of
maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the
amounts may not reconcile to the statement of financial position.
64
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Range of
effective
interest rate
Variable
interest rate
Fixed Interest
1 Year or
less
Over 1 to 5
years
Total
Contractual
Cash Flows
Non-interest
bearing
Total
%
$
$
$
$
$
$
Nil-1.5%
4,593
31 December 2017
Financial Assets
Cash and cash
equivalents
Loans and other
receivables
Financial Liabilities
Trade and other
payables
Other financial liabilities
10.3-19.8%
-
4,593
-
-
-
-
-
-
-
-
-
-
-
182,902
274,485
182,902
274,485
Fixed Interest
1 Year or
less
Over 1 to 5
years
-
-
-
-
-
-
-
4,593
2,598,144
2,598,144
2,598,144
2,602,737
594,416
594,416
-
457.387
594,416
1,051,803
Total
Contractual
Cash Flows
Non-interest
bearing
Total
Range of
effective
interest rate
Variable
interest rate
%
$
$
$
$
$
$
31 December 2018
Financial Assets
Cash and cash
equivalents
Loans and other
receivables
Financial Liabilities
Trade and other
payables
Nil-1.05%
2,445,329
-
2,445,329
-
Other financial liabilities
14.7%-21.9%
139,726
139,726
-
-
-
-
41,765
41,765
-
-
-
-
-
-
Trade and other payable are expected to be paid as follows:
Less than 6 months
6 months to 1 year
1 to 5 years
Over 5 years
65
-
-
-
-
-
-
-
2,445,329
3,880,759
3,880,759
3,880,759
6,326,088
1,897,472
1,897,472
-
181,491
1,897,472
2,052,103
2018
$
2017
$
1,835,263
594,416
-
-
-
-
-
-
1,835,263
594,416
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(a)
Fair Value Measurement
For all assets and liabilities net fair value approximates their carrying value. No financial assets and financial liabilities
are readily traded on organised markets in standardised form other than listed investments of which the entity has no
holdings in. Financial assets where the carrying amount exceeds net fair values have not been written down as the
Group intends to hold these assets to maturity. The aggregate net fair values and carrying amounts of financial assets
and financial liabilities are disclosed in the statement of financial position and in the notes to the financial statements.
There are no financial assets or liabilities that are carried at fair value in the financial statements therefore no additional
disclosures have been made with respect to fair value measurement.
26 CONTINGENT LIABILITIES
There were no contingent liabilities as at the date of this report.
27 COMMITMENTS
Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:
Within one year
After one year but not more than five years
101,758
30,940
87,815
113,026
Consolidated
Consolidated
2018
$
2017
$
66
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
28
INCOME TAX
Major components of income tax expense:
Accounting profit/(loss) before income tax
Consolidated
2018
$
Consolidated
2017
$
(4,795,347)
(821,997)
Income tax expense/(benefit) at the Company’s statutory rate of 28.5% (2017 – 28.5%)
(1,366,674)
(234,269)
Tax effect of:
Adoption of AASB 15
Provision for accounts receivable
Provision for inventories
Non-deductible taxes
Non-deductible employee contributions
Non-deductible interest, fines and levies
Non-deductible financial transactions levy
Other non-deductible expenses
Income tax applied to companies in tax loss in overseas jurisdiction
Deferred tax assets not recognised
Effect of overseas tax rates
Current income tax expense
Movement in deferred taxes
Adjustment of tax for prior period
Income tax (benefit)/expense
Deferred Tax Liabilities comprise:
Provision for doubtful debts
Provision for warranty commitments
(275,054)
261,106
9,269
(16,337)
-
11,015
4,585
1,583
32,633
2,564
1,228,607
21,698
351,049
11,438
21,698
69,881
239
91,818
6,644
8,116
17,918
2,029
6
-
-
14,975
71,203
(15,063)
21,371
77,511
Consolidated
2018
$
52,034
Consolidated
2017
$
12,342
30,189
82,223
-
12,342
No deferred tax assets have been recognised as it is not probable within the immediate future that tax profits will be
available against which deductible temporary differences can be utilised.
The benefit for tax losses will only be obtained if:
the Company derives future assessable income in Australia of a nature and of an amount sufficient to enable
the benefit from deductions for the losses to be realised;
the Company continues to comply with the conditions for deductibility imposed by tax legislation in Australia;
and
there are no changes in tax legislation in Australia which will adversely affect the Company in realising the
benefit from deductions for the losses.
67
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
29 SEGMENT INFORMATION
The consolidated entity is organised into one main operating segment. All of the consolidated entity’s activities are
interrelated and discrete financial information is reported to the Board (Chief Operating Decision Maker) as a single
segment. Accordingly, all significant operating decisions are based upon analysis of the consolidated entity as one
segment. The financial results from this segment are equivalent to the financial statements of the consolidated entity
as a whole.
30 CHANGES IN ACCOUNTING POLICIES
(a) New or revised Standards and Interpretations that are first effective in the current reporting period
As a result of the changes in the entity’s accounting policies, prior year financial statements had to be restated. As
explained below, AASB 9 was generally adopted without restating comparative information with the exception of
certain aspects of hedge accounting. The reclassifications and the adjustments arising from the new impairment rules
are therefore not reflected in the restated balance sheet as at 31 December 2017, but are recognised in the opening
balance sheet on 1 January 2018.
The following tables show the adjustments recognised for each individual line item. The adjustments are explained in
more detail by standard below.
Balance sheet (extract)
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Property, Plant & Equipment
Intangibles
Total Assets
Liabilities
Financial liabilities
Trade and other payables
Provisions
Other current liabilities
Deferred tax liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Share based payment reserve
Foreign Currency Translation Reserve
Retained profits/(losses)
Total Equity
31 Dec 2017
As originally
presented
$
AASB 15
$
31 Dec 2017
Restated
$
AASB 9
$
1 January
2018
Restated
$
4,593
4,593
2,598,144
(143,385)
2,454,759
297,174
446,491
302,729
3,649,131
457,387
594,416
220,152
1,179,159
1,727,868
12,342
3,012,165
636,966
1,559,756
-
(57,552)
(865,238)
636,966
15,517
(1,194,675)
297,174
446,491
302,729
3,505,746
457,387
594,416
220,152
1,727,868
12,342
3,012,165
493,581
1,559,756
-
(57,552)
(143,385)
(1,008,623)
493,581
4,593
2,598,144
297,174
446,491
302,729
3,649,131
457,387
594,416
220,152
548,709
12,342
1,833,006
1,816,123
1,559,756
-
(73,069)
329,436
1,816,123
68
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Comprehensive Income Statement (extract)
Sales Revenue
Cost of Sales
Gross Profit
Administration and Distribution Expenses
Interest and other revenue
Other expenses
Profit/(Loss) from ordinary activities before
income tax
Income tax expense
Profit/(Loss) from ordinary activities before
income tax
Foreign currency translation of international
subsidiaries
Total comprehensive profit/(loss) for the year
31 Dec 2017
As originally
presented
$
AASB 15
$
31 Dec 2017
Restated
$
AASB 9
$
4,431,250
(885,401)
3,545,849
(2,675,463)
1,755,787
(1,533,064)
24,809
(184,128)
63,404
(77,511)
(14,107)
(73,069)
(87,176)
(2,652,880)
892,969
(1,555,647)
24,809
(184,128)
(821,997)
(77,511)
(899,508)
(57,552)
(957,060)
15,517
1 January
2018
Restated
$
3,545,849
(2,652,880)
892,969
(1,555,647)
24,809
(184,128)
(821,997)
(77,511)
(899,508)
(57,552)
(957,060)
The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are relevant to its operations and effective for the current reporting period,
as follows:
AASB 9 Financial Instruments
Nature of Change: Changes to classification and measurement requirements of financial instruments and hedge
accounting.
The entity has both long term and short term trade receivables. As a result of the adoption of this standard, the entity’s
loss allowance on trade receivables has increased.
The change has been applied retrospectively, however comparatives need not be retrospectively restated. Instead,
the cumulative effect of applying the change for the first time is recognised as an adjustment to the opening balance of
retained earnings on 1 January 2018.
The impact of this change was to reduce opening retained earnings at 1 January 2018 by $7,561.
AASB 15 Revenue from Contracts with Customers
Nature of Change: New standard for the recognition of revenue based on the principle that revenue is recognised
when the control of a good or service transfers to a customer.
The entity operates in the technology industry and recognised revenue for:
• Once off sales of Equipment and Software;
• Maintenance Contracts
• Software as a Service; and
• Platform as a Service which includes leasing, service and maintenance of Equipment and Software.
Under AASB 15, revenue is recognised when performance obligations are satisfied by transferring a promised good or
service to a customer or when an asset is transferred to a customer.
69
IMEXHS LTD FINANCIAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Once off sales of Equipment and Software
As part of the Group’s review of its contracts with its customer, it identified revenue should be deferred, and recognised
as a contract liability, until the distinct performance obligation has been satisfied which is when he goods are delivered
and installed successfully. This has resulted in a generally later recognition of revenue than under the previous revenue
standard.
The review also identified certain revenue from once off sales of software and Equipment includes a warranty component
of service and maintenance for 12 months. Under AASB 15, this post-sale service and maintenance support is a
separate performance obligation and a portion of the revenue is therefore deferred and recognised over the warranty
period.
Maintenance, Software as a Service (SaaS), and Platform as a Service (PaaS) contracts
These contracts are sold as inclusive contracts with the provision of the service running for a specified contract period
running from 12 months for maintenance contracts to typically 60 months for PaaS contracts.
Therefore, the obligations under the contract and the raising of invoices under the contracts are aligned and there has
been no change in the recognition of revenue for these contracts under the new standard.
The impact of the changes described above was to reduce opening retained earnings at 1 January 2017 of $293,757
and to reduce sales revenue for the year ended 31 December 2017 by $885,401, and increase contract liabilities by
$1,179,158.
(b) Impact of standards issued but not yet applied by the entity
AASB 16 Leases
Nature of Change: AASB 16 eliminates the separate classifications of operating and finance leases. Instead it requires
all leases to be brought to an account in a similar way to how existing finance leases are accounted for under AASB
117. An entity will be required to recognise a lease liability and a right to use asset on its balance sheet for most
leases, with some exemptions or low value leases or leases of 12 months or less duration.
Where ImExHS, as lessee, has outstanding operating leases at the date of application of 1 January 2019, right-to-use
assets will be recognised as the unamortised portion of the useful life, and the lease liabilities will be recognised as the
present value of the outstanding lease payments.
As a result of the standard, Earnings Before Interest, Depreciation, Amortisation and Tax will be higher because
operating lease expenses currently included therein will be instead be recognised as amortisation of the right-to-use
asset, and interest expense on the lease liability.
Generally, there will be a reduction in net profit before tax in the early years of a lease as result of amortisation and
interest charges exceeding the current straight line expense incurred under AASB 117. This will reverse over the life of
a lease.
ImExHS’s current operating leases are of short duration and the impact of the adoption of the standard is not expected
to be material.
70
IMEXHS LTD FINANCIAL REPORT 2018
DIRECTORS’ DECLARATION
The directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 38 to 70 are in accordance with the Corporations Act
2001 and:
a.
comply with Accounting Standards and the Corporations Regulations 2001 other mandatory professional
reporting requirements; and
b. give a true and fair view of the financial position as at 31 December 2018 and of the performance for the
financial year ended on that date of the Company and entity; and
c.
complies with International Financial Reporting Standards as disclosed in note 1.
2.
the Chief Executive Officer (or equivalent) and Chief Financial Officer (or equivalent) have each declared that:
a.
the financial records of the Company for the financial year have been properly maintained in accordance
with section 286 of the Corporations Act 2001;
b.
the financial statements and notes for the financial year comply with Accounting Standards; and
c.
the financial statements and notes for the financial year give a true and fair view.
3.
in the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Tom Pascarella
Chairman
Dated this 21st March 2019
71
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of ImExHS Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of ImExHS Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated balance sheet as at 31 December 2018, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the financial report,
including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Accounting for Reverse Asset Acquisition
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 2 of the financial report,
on 28 August 2018, ImExHS Limited (formerly
Omni Market Tide Ltd) completed the
acquisition of Imaging Experts and Healthcare
Services Pty Ltd. This company, had in turn
previously acquired Imaging Experts and
Healthcare Services S.A.S., a Colombian-based
company, on 20 April 2018.
The accounting of this acquisition is a key
audit matter due to the accounting complexity
of the arrangement which is accounted for as
Imaging Experts and Healthcare Services S.A.S
(the accounting parent) issuing a share-based
payment in return for the net assets acquired
in the company and a listing status.
Furthermore, judgement is involved in the
determination of the value of the purchase
consideration settled by way of a share-based
payment.
Refer to Note 2, Note 2(vii) and Note 6 of the
financial report for a description of the
accounting policy and judgements applied to
this transaction.
Our procedures included but were not limited to:
·
·
·
·
·
Reviewing acquisition agreement including
holding discussions with management to
understand the key terms and conditions
of the transaction;
Evaluating management’s assessment of
the accounting acquirer and whether the
transaction constituted a business or an
asset acquisition by checking against post
acquisition shareholding structure and our
knowledge of the operations of the legal
subsidiaries;
Evaluating the basis of valuation of the
share-based payment against market
capitalisation of company;
Checking the calculation of the share-
based payment, net assets and listing
expense;
Assessing the adequacy of the related
disclosures in Note 2, Note 2(vii) and Note
6 to the financial report.
Accounting for Share Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 31 December
2018, the Group issued equity instruments, in
the form of shares and options, to eligible
directors, vendors and other consultants as
detailed in Note 17.
The Group performed valuations of the options
and recorded the related share-based payment
expense or share issue costs in accordance with
the relevant accounting standard.
Due to the judgemental estimates used in
determining the fair value of the share based
payments, we consider the accounting for the
share-based payments to be a key audit
matter.
Our audit procedures in respect of this area
included but were not limited to the following:
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Reviewing relevant supporting
documentation to obtain an
understanding of the contractual nature
and terms and conditions of the share-
based payment arrangements;
Involving our valuation specialists to
assess the assumptions and inputs used in
the valuation;
Assessing management’s determination of
achieving non-market vesting conditions
of the options issued;
Assessing the allocation of the share-
based payment expense over
management’s expected vesting period;
and
Assessing the adequacy of the disclosure
in Note 2, Note 6 and Note 17 in the
financial report.
Revenue recognition
Key audit matter
How the matter was addressed in our audit
AASB 15 Revenue from Contracts with
Customers (AASB 15) became effective for
periods beginning on or after 1 January 2018
and has an impact on the Group.
There are complexities and judgements
associated with interpreting key revenue
contracts entered into by the entity against the
requirements of the new accounting standard.
This results in management judgement and
estimation in relation to:
·
·
Interpreting and accounting for
contractual terms including
performance obligations and clauses
relating to warranties (amongst
others); and
Accounting judgments and treatments
in relation to first time application of
the new accounting standard including
assessment of performance obligations,
allocation of revenue and consideration
of revenue recognition as being at a
point in time or over time.
Our audit procedures in respect of this area
included but were not limited to the following:
(cid:127)
Discussing with management and
critically assessing the financial impact of
the new revenue standard and changes to
the Group’s revenue recognition policies
during the year;
(cid:127) Obtaining and reviewing a sample of
contracts, considering the terms and
conditions, performance obligations of
these arrangements and assessing the
accounting treatment under AASB 15;
(cid:127)
(cid:127)
Evaluating whether revenue had been
recorded in the correct period based on
contractual terms for a sample of sales
around the reporting date;
Assessing the adequacy of the disclosure
in Note 2 and Note 4 in the financial
report.
.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2018, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Other Matter
The financial report of the Entity for the year ended 31 December 2017 was audited by another auditor
who expressed an unmodified opinion on that financial report on 9 March 2018
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 28 of the directors’ report for the
year ended 31 December 2018.
In our opinion, the Remuneration Report of ImExHS Limited, for the year ended 31 December 2018,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 21 March 2019
IMEXHS LTD FINANCIAL REPORT 2018
ASX SUPPLEMENTARY INFORMATION
1
i)
Additional information for listed public companies
ASX additional information
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is
set out below. This information is effective as at 15 March 2019.
ii)
Substantial shareholders
Substantial holders in the Company are set out below:
DIGITAL IMAGING SOLUTIONS S.A.S
MILLA PAULA INARI PALACIO
JAAVA ASESORES INTEGRALES S.A.S
VOLEGNA HOLDINGS PTY LTD
iii)
a.
Voting rights
Ordinary Shares
Ordinary shares
Number held
157,525,160
103,833,600
102,437,920
62,009,480
% of total issued
shares
17.02%
11.22%
11.07%
6.70%
On a show of hands, every member present at a meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote.
b.
Options and Class A Performance Shares
No voting rights.
iv)
Distribution schedule of fully paid ordinary shares as at 15 March 2019
Holdings ranges
Holders
Number held
% of total issued shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Totals
580
151
31
183
377
1,322
40,618
434,894
251,199
9,887,340
915,043,135
925,657,186
0.00
0.05
0.03
1.07
98.85
100.00
As at 15 March 2019 there were 786 shareholders holding an aggregate of 1,059,529 shares as
unmarketable parcels.
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IMEXHS LTD FINANCIAL REPORT 2018
ASX SUPPLEMENTARY INFORMATION
v)
Twenty largest shareholders
The names of the twenty largest holders of fully paid ordinary shares (including escrowed fully paid
ordinary shares):
DIGITAL IMAGING SOLUTIONS SAS
JAAVA ASESORES INTEGRALES SAS
VOLEGNA HOLDINGS PTY LTD
IRUKANDJI INVESTMENTS PTY LTD
RIO NEGRO PTY LTD
JAMES WOULFE & CATHERINE MARIA WOULFE
TISIA NOMINEES PTY LTD
OAKTONE NOMINEES PTY LTD
JK NOMINEES PTY LTD
VIRGINIA MARIN MUNOZ
CARMEN CECILIA ARANGO BONNET
JOHN ALEXANDER SANZ RAMIREZ
OPTIM8 PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
SAFARI CAPITAL PTY LTD
BNP PARIBAS NOMINEES PT LTD HUB 24 CUSTODIAL SERV LTD DRP
GLIZE SUPER FUND PTY LTD
SCOTT WELLS
PAUL LOWRY & KIM WATSON
KOBIA HOLDINGS PTY LTD
Ordinary shares
Number held
157,525,160
102,437,920
62,009,480
59,391,800
44,441,800
23,525,320
16,025,000
16,000,000
14,729,732
14,542,840
14,542,840
12,681,240
12,454,520
12,000,000
11,990,198
10,002,401
10,000,000
10,000,000
8,302,840
8,000,000
% of total
issued shares
17.02
11.07
6.70
6.42
4.80
2.54
1.73
1.73
1.59
1.57
1.57
1.37
1.35
1.30
1.30
1.08
1.08
1.08
0.90
0.86
620,603,091
67.06
vi)
Restricted Securities
As at 15 March 2019 the following securities are subject to escrow:
530,000,000 Fully Paid Ordinary Shares escrowed until 3 September 2020
50,000,000 Class A Consideration Options expiring 30 June 2021 @ $0.05 escrowed until
3 September 2020
50,000,000 Class B Consideration Options expiring 28 August 2023 @ $0.0375 escrowed until
3 September 2020
50,000,000 Class C Consideration Options expiring 28 August 2023 @ $0.0375 escrowed until
3 September 2020
12,500,000 Options expiring 30 June 2021 @ $0.0375 escrowed until 14 May 2019
30,000,000 Options expiring 30 June 2021 @ $0.05 escrowed until 3 September 2020
79
IMEXHS LTD FINANCIAL REPORT 2018
ASX SUPPLEMENTARY INFORMATION
vii)
Unquoted equity securities
As at 15 March 2019, the number of unquoted equity securities that are on issue and the number of
holders are:
A. 35,000,000 Options expiring 31 March 2021 @ $0.025 – 8 holders
Holders with more than 20%:
Holder name
JK NOMINEES PTY LTD
OAKTONE NOMINEES PTY LTD
TISIA NOMINEES PTY LTD
Holding
% of total
7,250,000
7,250,000
7,250,000
20.71
20.71
20.71
B. 50,000,000 Class A Consideration Options expiring 30 June 2021 @ $0.05 escrowed until 3
September 2020 – 14 holders
Holders with more than 20%:
Holder name
Holding
% of total
DIGITAL IMAGING SOLUTIONS SAS
15,287,254
30.57
C. 50,000,000 Class B Consideration Options expiring 28 August 2023 @ $0.0375 escrowed
until 3 September 2020 – 14 holders
Holders with more than 20%:
Holder name
Holding
% of total
DIGITAL IMAGING SOLUTIONS SAS
15,287,254
30.57
D. 50,000,000 Class C Consideration Options expiring 28 August 2023 @ $0.0375 escrowed
until 3 September 2020 – 14 holders
Holders with more than 20%:
Holder name
Holding
% of total
DIGITAL IMAGING SOLUTIONS SAS
15,287,254
30.57
E. 12,500,000 Options expiring 30 June 2021 @ $0.0375 escrowed until 14 May 2019 – 8 holders
Holders with more than 20%:
Holder name
SCOTT WELLS
Holding
% of total
5,000,000
40.00
F. 30,000,000 Options expiring 30 June 2021 @ $0.05 escrowed until 3 September 2020 – 8
holders
Holders with more than 20%:
Holder name
JK NOMINEES PTY LTD
OAKTONE NOMINEES PTY LTD
TISIA NOMINEES PTY LTD
G. 4,000,000 Options expiring 25 October 2023 @ $0.07 – 1 holder
Holders with more than 20%:
Holder name
THOMAS PASCARELLA
Holding
% of total
8,000,000
8,000,000
8,000,000
26.67
26.67
26.67
Holding
% of total
4,000,000
100.00
80
IMEXHS LTD FINANCIAL REPORT 2018
ASX SUPPLEMENTARY INFORMATION
H. 2,000,000 Options expiring 9 December 2023 @ $0.053 – 1 holder
Holders with more than 20%:
Holder name
DOUGLAS LINGARD
I.
750,000 Class A Performance Shares – 6 holders
Holders with more than 20%:
Holder name
IP PAYOVATION PTY LTD
MSQ NOMINEES PTY LTD
viii) On-Market Buy Back
There is currently no on-market buyback program.
ix)
ASX Listing Rule 4.10.19
Holding
% of total
2,000,000
100.00
Holding
% of total
196,190
195,952
26.16
26.13
The Company has used it cash and assets in a form reading convertible to cash that it has at the time
of re-listing of the Company’s securities in a way consistent with its business objectives.
81