IMEXHS LIMITED
ABN 60 096 687 839
AUDITED FINANCIAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
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 IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ASX SUPPLEMENTARY INFORMATION
1
2
27
35
36
37
38
39
40
67
68
72
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
Non-executive Chairman
Chief Executive Officer
Non-executive Director
Non-executive Director
Non-executive Director
Directors
Mr Doug Flynn
Dr German Arango
Mr Howard Digby
Dr Doug Lingard
Mr Carlos Palacio
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
National Australia Bank
Level 12
100 St Georges Tce
Perth WA 6000
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
1
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
The Directors present their report, together with the financial statements, on IMEXHS Limited (“the Company”
or “the Group”) for the year ended 31 December 2019.
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
Mr Doug Flynn
Dr German Arango
Mr Howard Digby
Dr Doug Lingard
Mr Carlos Palacio*
Mr Tom Pascarella
Role
Chairman
CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chairman
Appointed
12/3/2020
28/8/2018
1/8/2017
10/12/2018
28/8/2018
25/10/2018
Resigned
Current
Current
Current
Current
Current
30/11/2019
* Mr Palacio acted as interim Chairman for the period 30 November 2019 to 12 March 2020.
2
Principal activity
The Company remains focussed on the development and sale of its HIRUKO software platform. HIRUKO is a
modular imaging system that includes a Radiology Information System (RIS); a Cardiology Information
System (CIS); an Anatomical Pathology and Laboratory Information System (APLIS); and a Picture Archiving
and Communications System (PACS). The RIS, CIS and APLIS combine 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.
3
Dividends
There were no dividends paid, recommended or declared during the financial year ended 31 December 2019
was $nil (2018: $nil).
4
Review of operations
Business Operations
IMEXHS has two distinct revenue models, recurring revenue from ‘as a service’ contracts and revenue from
one off sales.
The Company is primarily focused on growing its recurring revenue base. Recurring revenue contracts include
provision of software, support and in some instances associated hardware and maintenance.
The Company’s average revenue mix for ‘as a service solutions’ is approximately 76% for software and the
remaining 24% for hardware. These revenues are typically secured on 5-year contracts with monthly
subscription fees. ‘As a service’ sales represented 85% of total revenue as at 31 December 2019, up from 48%
of revenue in 2018.
The nature of multi-year ‘as a service’ contracts means that the Company incurs the majority of the costs of
winning and rolling out a project in the year the contract is won, and IMEXHS does not defer any of the
acquisition costs of its contracts. Therefore, for an average 5 year contract billing starts half-way through the
year and the Company recognises 10% of the revenue in the year that these costs are incurred (half a year’s
revenue on a 5 year contract). In the remaining years of the contract 20% of the total contract revenue will
flow through whilst the majority of costs have already been expensed.
The Company also does not capitalise any of its research and development spend, which chiefly comprises
staff costs on the continued development of the product.
As a result, the Company takes a conservative approach by incurring its expenses upfront, with significant
bottom line contribution in future years.
2
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Financial Performance
The loss of the Group for the year ended 31 December 2019 was $6,002,288 (2018: loss of $4,887,165), after
providing for income tax.
The loss in the prior year included the costs associated with the reverse take-over of Imaging Experts and
Healthcare Services Pty Ltd and subsequent relisting. The total of these costs was $3,929,770, of this $774,775
represented recurring costs of the holding company for corporate costs associated with being a listed entity
that had been incurred prior to the acquisition date.
EBITDA
The Group’s EBITDA was as loss of $4,623,965 (2018: loss of $4,295,623). The following table provides a
summary of important balances from the Group’s Statement of Profit or Loss for the year ended 31 December
2019:
Consolidated
Recurring Sales Revenue
One off Sales Revenue
Hardware & Licence Expenses
R&D and Support Expenses
Platform as a Service Expenses
Radiology Services Expenses
Administration and Sales Expenses
Other income/expenses
Result before tax
Adjusted for:
Net borrowing costs
Depreciation and Amortisation
EBITDA
Revenue Growth
31 December
2019
$
31 December
2018
$
Movement
%
6,602,883
1,124,377
7,727,260
2,797,682
2,982,169
5,779,851
(1,090,415)
(2,121,479)
(760,571)
(3,120,907)
(4,294,600)
(2,381,919)
(6,042,631)
(1,051,538)
(1,339,903)
(511,213)
(498,772)
(2,603,171)
(4,570,601)
(4,795,347)
592,737
825,929
193,013
306,711
(4,623,965)
(4,295,623)
136%
-62%
34%
-4%
-58%
-49%
-526%
-65%
48%
-26%
207%
169%
-8%
The Company experienced strong revenue growth, with sales revenue of $7,727,260 (2018: 5,779,851), up 34%
over the prior corresponding period (pcp).
The Company’s preference is for recurring revenue contracts, as this underpins our long-term shareholder
value. Recurring sales revenue for the year was $6,602,883, up 136% over the prior year figure of $2,797,682.
The strong revenue growth was driven by a number of new client wins and contract renewals and extensions
with existing customers.
3
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
FINANCIAL YEAR REVENUE
$
A
s
n
o
i
l
l
i
M
9
8
7
6
5
4
3
2
1
-
FY 2017
FY 2018
FY 2019
Recurring Revenue
Non-recurring Revenue
The gross margin1 was 70% at 31 December 2019, consistent with the prior year.
Annualised Recurring Revenue (ARR) of $8.5m was up 94% on pcp. The Company’s ARR has achieved a
Compound Annual Growth Rate (CAGR) of 124% since the Company’s inception in 2013.
ANNUALISED RECURRING REVENUE
$
A
s
n
o
i
l
l
i
M
9
8
7
6
5
4
3
2
1
-
31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019
ARR
ARR Not Yet Billing
1 Gross Margin is calculated using hardware, licence, platform and product support costs
4
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Hardware & Licence Expenses
The Company’s expenditure on Hardware & Licences for the year was $1,090,415 (2018: $1,051,538), which
was slightly higher than the prior year and reflects the usage of inventory for ‘as a service’ contracts.
R&D and Support Expenses
R&D and Support Expenses for the year was $2,121,479 (2018: $1,339,903), an increase of 58%. This was a
strategic decision the Company took, to increase its investment in R&D activities, which has been
instrumental in the ability for the Company to release its new Triangulation Web Tool, Multiplanar
Reconstruction Web Tool & Maximum Intensity Projection Web Tools; its first release of AI tools targeted at
chest X-rays; and the new multi-tenant architecture of HIRUKO.
Platform as a Service Expenses
Platform as a Service Expenses for the year was $760,571 (2018: $511,213), an increase of 49%. With the
success in this business, expenses related to it, including the maintenance of some software licences and the
maintenance and repair of machinery and equipment has increased.
Radiology Services Expenses
Radiology Services Expenses for the year were $3,120,907 (2018: $498,772). The Company has three contracts
in which it provides Radiology services, i.e. radiological interpretation as part of the whole contract, the
largest of which is the recent Colsubsidio contract. IMEXHS has entered into a limited number of these
contracts due to the strategic benefit it derives in developing its Artificial Intelligence capabilities. In addition
to the increase in our image library for AI mentioned earlier, by using HIRUKO in the real world, IMEXHS has
the opportunity to control the testing of software enhancements in the real word prior to wide release. This
ensures that we are able to continually include efficiencies in the platform to the ultimate benefit of our
customers.
Administration & Sales Expenses
The Company’s expenditure on Administration and sales for the year was $4,294,600 (2018: $2,603,171), an
increase of 65%. It is important to note that the prior year comparatives do not include the expenses for the
Australian companies for the whole year, as they are only included from the date of the reverse-takeovers.
This had the effect of reducing the 2018 Administration and Sales Expense numbers by $774,775.
More detailed information on the components of Administration and Sales Expenses is included below and
includes the prior year comparative with the effect of the reverse take-over (RTO) elimination removed to
provide a meaningful 12 month comparison of the Australian entities’ contribution to costs.
5
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Consolidated
Employee and Director Benefit Expenses
Audit, Legal and Tax Advice Fees
Taxes
Office expenses
Insurance
Advertising & Marketing
Corporate expenses
Maintenance
Travel
Other
31 December
2019
$
31 December
2018
$
31 December
2018 excl RTO
$
1,726,610
403,467
179,173
283,645
96,560
180,220
606,901
4,090
223,940
589,994
4,294,600
1,160,255
275,213
83,181
239,766
23,223
42,942
348,842
16,939
189,158
223,652
2,603,171
1,211,174
554,775
83,181
245,862
73,881
42,942
726,034
18,939
196,441
224,717
3,377,946
Employee and Director Benefit Expenses
The Company’s expenditure on Employee and Director Benefit was $1,726,610 (2018: $1,160,255, adjusted for
RTO $1,211,174). The increase represents payment of salaries to the Company’s original founders, Dr Arango,
Dr Marin, Andres Vanegas & Alexander Sanz, to reflect full-time market salaries. This increase adds around
$743,000 per annum when including salary-related government charges. In 2018 these increased salaries were
only from the date of listing, i.e., four months.
Audit, Legal and Tax Advice Fees
Audit, Legal and Tax Advice Fees for the year was $403,467 (2018: $275,213, adjusted for RTO $554,775). The
reduction in fees is primarily related to the additional fees incurred by IMEXHS Limited in 2018 related to the
acquisition.
Taxes
Indirect taxes levied on the business are $179,173 (2018: $83,181) and reflect an increase due to the increased
business activity by the Colombian entity.
Office Expenses
Office expenses were $283,645 (2018: $239,766, adjusted for RTO: $245,862). This number which in the prior
year included office rent (which following the adoption of AASB 16 Leases would have been expected to fall).
However, the growth of the business has seen other general office expenses offset this fall.
Insurance
Insurance expenses were $96,560 (2018: $23,223, adjusted for RTO: $73,881). The increase reflects the
increase on the renewal of various insurances.
Advertising & Marketing
Advertising & Marketing were $180,220 (2018: $42,942). The increase reflects the increased activity by IMEXHS,
particularly in respect of industry conferences, and most notably our first-time as an exhibitor at the
Radiological Society of North America conference.
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IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Corporate Expenses
Corporate Expenses were $606,901 (2018: $348,842, adjusted for RTO: $726,034). These expenses are
comprised mostly of Australian expenses related to costs associated with being a listed entity (ASX, ASIC,
Company Secretarial) and corporate advisory costs. This number has reduced from the adjusted RTO figure
in 2018 as the figure included advisory costs related to the RTO transaction.
Other Expenses
Other Expenses were $589,994 (2018: $223,652, adjusted for RTO: $224,717). The main reason for the increase
in 2019 relates to a decision by the Colombian Tax Authorities to deny deduction to IMEXHS for certain
withholding taxes taken by foreign suppliers in 2017 and 2018.
Financial Position
The Company had net assets of $10,316,636 (2018: $5,850,795) and net tangible assets of $9,846,749 (2018:
$5,323,427). The cash and cash equivalents of $7,149,683 (2018: $2,445,329).
The following table provides a summary of important balances from the Group’s Statement of Financial
Position at 31 December 2019:
Consolidated
Cash and cash equivalents
Trade and other receivables
Inventories
Property, Plant and Equipment
Trade and other payables
Borrowings
Other Assets/Liabilities
Net Assets
Net Tangible Assets
Cash and cash equivalents
31 December
2019
$
31 December
2018
$
Movement
%
7,149,683
3,653,647
107,354
3,376,006
(870,151)
(1,542,301)
(1,557,602)
10,316,636
2,445,329
3,880,759
811,310
1,591,111
(1,897,472)
(188,491)
(791,751)
5,850,795
9,846,749
5,323,427
192%
-6%
-87%
112%
-54%
718%
97%
76%
85%
IMEXHS had cash balances as at 31 December 2019 of $7,149,683 (2018: $2,445,329), which was up 192% over
the prior year. The Company completed a capital raise at an issue price of $0.04 per share during the year.
This generated $9,204,206 (net of fees) of cash for the Company.
Trade and other receivables
The level of trade and other receivables has reduced from $3,880,759 to $3,653,647. Of this, trade receivables
has dropped by 20% to $2,692,470 (2018: $3,362,829). The Company has improved its cash collections during
the year, which has reduced the number of accounts past due less than 180 days. The Company increased its
provision on long-outstanding debtors. It is important to note that some of these debtors are already on
repayment plans and the Company continues to pursue the other long outstanding debts.
Overall, net trade receivables now stand at 89% in current status.
Inventories
The Company’s inventories has reduced in line with the general strategy of pursing recurring revenue sales.
This has seen inventories fall by 87%.
7
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Property, Plant and Equipment
The investment in Property, Plant and Equipment has increased to $3,376,006 (2018: $1,591,111), or 112%.
This increase is driven by the success in winning important recurring revenue contracts.
Trade and other payables
Trade and other payables is $870,151 (2018: $1,897,472), a reduction of 54%. Historically, trade payables has
been high in December owing to the one off sales made in the last quarter of the year. As the Company reduces
its focus on one off sales, trade payables has fallen. This may include equipment that has already been
installed and generating revenue for the Company.
Borrowings
The Company’s borrowings are $1,542,301 (2018: $188,491). This increase has been brought about by the
Company’s preference to obtain financing of the acquisition of property, plant and equipment and software
licences necessary for the Company’s Platform as a Service contracts, to allow for cash flow neutral financing
of equipment.
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)
Momentum in Colombia, key contract extensions & new client wins
IMEXHS’s strong revenue result was driven by a number of key contract wins including a 1-year contract (with
two automatic annual renewals) with Colsubsidio, a leading Family Welfare Fund in Colombia. The contract
has a TCV of $3.9m. The Company also won a new 7-year contract with existing customer AI-RAD (TCV $3.5m).
IMEXHS also announced the 6-year extension of an existing contract with Clínica Las Americas, one of the
leading private hospitals in Colombia. The contract extension has a TCV of $1.6m and demonstrates the
recurring nature of our contracts.
IMEXHS also won contracts with Fundación Cardiovascular de Colombia (TCV $0.3m), RadOne (TCV $0.2m)
and Los Valles Hospital (TCV $0.2m). IMEXHS continues to see positive momentum in its sales pipeline with
customers across LATAM increasingly choosing the HIRUKO software to meet their evolving imaging software
needs.
ii)
Geographic expansion gaining traction, sales pipeline increasing
IMEXHS received clearance from the US Food and Drug Administration (FDA) throughout the year. The
clearance was an important milestone for the Company as it enables IMEXHS to distribute its suite of imaging
software solutions to customers in the US. IMEXHS marked its entry into the US market with a first-time
appearance at Radiological Society of North America (RNSA), one of the leading international industry events.
The conference played a key role in helping IMEXHS raise its profile among important industry stakeholders.
IMEXHS also expanded the distribution of its imaging solutions in Panama, Honduras, Nicaragua, Uruguay
and Brazil and won its first contracts in Spain, Australia and Puerto Rico.
With the global Radiology Information Systems (RIS) and Picture Archiving Communication System (PACS)
market forecast to reach U5$5b by 2027, a CAGR of 7.4%. IMEXHS has a significant opportunity to grow its
revenue base by winning contracts in a large and highly fragmented global market.
8
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
WEIGHTED SALES PIPELINE
A$m
0
10
20
30
40
50
60
70
Recurring Software
Recurring Platform
One Off
iii)
International recognition
The Company also improved its brand awareness winning a number of internationally recognised awards
including first place at SIM Hackathon and ANDICOM; fourth place in the Ingram Micro Cloud Comet
Competition and reaching the semi-finals at “The Minnies” in the category of “Best New Radiology Vendor”.
iv)
Ongoing investment in software and AI strengthening competitive advantage
IMEXHS continues to invest in Research & Development to enhance the competitive advantage of its software
solutions and develop its Artificial Intelligence (AI) capabilities.
The significant investment during the year in R&D has enabled the release of additional web visualisation
tools to the HIRUKO product suite. Throughout the year the Company released a number of new tools
including triangulation, multiplanar reconstruction & maximum intensity projection, AI tools, cardiology and
pathology platforms. The Company also released its industry leading multi-tenant architecture, which has the
potential to be highly disruptive in the imaging software market.
By providing interpretation services in a number of strategic contracts the Company has developed a test bed
for the development and training of its AI tools. The Company now has access to over 257 million images from
which it can leverage its AI development.
9
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
AI Image Library
300
250
s
n
o
i
l
l
i
M
200
150
100
50
-
2016
2017
2018
2019
During 2019 the Company released a number of AI tools, the first of which assists radiologists through the
analysis of chest x-rays across 14 diseases.
Providing Radiology Services is an important part of the Company’s broader strategy as it facilitates the
development of industry leading Artificial Intelligence products for the imaging software market.
For further information see significant changes in the state of affairs below.
5
Significant changes in state of affairs
Capital Raise
On 9 December 2019, the Company completed the second tranche of a $10m placement that it had
announced in October, raising $5m through the issue 125,000,000 shares at an issue price of $0.04 per share.
This two-tranche placement has in total raised $10m through the issue of 250,000,000 shares at an issue price
of $0.04 per share.
6
Outlook for 2020
The Company’s pipeline of revenue opportunities continues to expand through its network of experienced,
in-country medical products distributors and the ongoing development of our own sales capabilities. As a
result, we expect to see revenue to continue to grow year on year.
Against this growth in revenue, the Company continues to invest in the development of HIRUKO’s features
and plans further expansion in its existing and new territories, both of which will drive future growth and
earnings.
i)
Enhancement of remote-working capabilities
The recent impact of the coronavirus disease 2019 (COVID-19) has seen an emphasis on remote working.
IMEXHS will look to capitalise on its strong tele-radiology capabilities with enhancements to allow other forms
of tele-working, including tele-assistance to patients.
ii)
Sales growth
The Company is focussed on converting its strong LATAM sales pipeline and is continuing to expand the
distribution of its imaging software solutions into new markets. In 2020 IMEXHS will focus on expanding its
sales activities in LATAM, the US, Australia, Brazil and Spain. IMEXHS is aiming to complete ANVISA (Agência
10
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Nacional de Vigilância Sanitária, Brazil’s Health Regulatory Agency) certification for Brazil in the first half of
2020, allowing us to actively pursue opportunities in this important market. We will then commence the CE
certification process for Europe, which is expected to be completed before the end of the year.
iii)
Continued product innovation
We will leverage our expanded R&D resources and build on our competitive advantage by offering higher
value tools and AI capabilities to the Medical Imaging industry. Included in our roadmap is the addition of AI
tools to our Radiology and Pathology modules. These enhancements are to be aimed at both the
administrative processes as well as the imaging work.
Working with AG Mednet, we are enhancing our PACS to include specific additional information for clinical
trial purposes. We are also working on our toolsets to enhance the value that can be extracted from our image
library by adding additional metadata to our image set. This will enable us to create a very clean image library
and will improve the machine learning capabilities of HIRUKO.
We are also working on a web version of our Braviz platform for advanced analytics and visualisation of
neurological images, which provides a wealth of data for both research and education purposes.
iv)
Customer satisfaction
Customer satisfaction is key to renewing ‘aaS’ contracts at end of term. The Company is proud of its
outstanding customer satisfaction and customer retention record and is committed to maintaining this
performance. The Company is very proud of our record of never having had HIRUKO displaced by a
competitor.
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
Unlisted options at 5.4 cents on or before 31 March 2022
Unlisted options at 5.4 cents on or before 30 September 2022
8
Events after the reporting date
New Chairman
Number
1,175,657,186
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
40,000,000
5,000,000
Subsequent to the end of the financial year, the Company appointed a new Chairman on 12 March 2020.
Mr Douglas Flynn
Mr Flynn has held senior management roles and directorships in major companies in Australia and overseas.
Prior to moving to London in 1994 Mr Flynn had held senior roles in ICI Australia and News Limited after it
acquired ASX listed Davies Brothers Ltd where he had been chief executive.
While based in London he was successively Managing Director of News International plc chief executive of
Aegis Group plc and chief executive of Rentokil Initial plc.
11
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
In mid-2008, Mr Flynn returned to Australia and has been a director of HKEX listed Qin Jia Yuan Media, and
ASX listed West Australian Newspapers, Seven West Media and chaired Isentia Ltd, APN Outdoor Ltd, Konekt
Ltd and NextDC Ltd. He retired from the board of Seven West Media in 2013 to undertake the IPO of APN
Outdoor which was subsequently sold in December 2018 to international operator JC Decaux. He retired from
the board of iSentia in November 2017. In November 2019 Konekt Ltd was acquired by Quadrant PE owned
APM. Mr Flynn remains chair of leading Australian data centre operator NextDC Limited.
Mr Flynn graduated in chemical engineering from the University of Newcastle, New South Wales. He received
an MBA with distinction from Melbourne University in 1979.
Mr Flynn will be paid a fee of $72,000 per annum plus superannuation.
Subject to shareholder approval, the Company will issue the following securities to Mr Flynn or his nominated
entity as follows:
16,666,667 ordinary shares at 3 cents per share;
8,000,000 options with a strike price of 5.5 cents;
8,000,000 options with a strike price of 7 cents; and
12,000,000 options with a strike price of 3 cents, vesting when the Company’s share price reaches or
exceeds a 30-day VWAP of 12 cents.
Coronavirus pandemic
On 11 March 2020, the World Health Organisation recognised the COVID-19 as a pandemic. The Company has
adopted remote working policies and procedures for its workforce to address the health and wellbeing of our
employees. At this time the pandemic has not had an impact on our ability to deliver services.
The responses by governments and businesses has seen increased remote working, which the Company
believes will show-case the tele-radiology capabilities of HIRUKO. We believe that this will provide increased
awareness of our product, particularly with the increased attention from governments in this area.
Medical imaging through CT Scans and chest X-Rays form an essential part of the diagnosis for the COVID-19
virus. Consequently, the Company expects that the impact on its clients in the short-term will be a likely
increase in in-patient medical imaging and a reduction in out-patient medical imaging from the deferral of
non-urgent clinic visits.
The timing, extent of the impact and recovery from COVID-19 on our employees, customers and suppliers is
unknown at this stage.
The full impact of COVID-19 outbreak continues to evolve as at the date of this report. As such the Company
is unable to estimate the effects of the COVID-19 outbreak on the Company’s financial position, liquidity and
operations in the financial year 2020.
Other than the above, 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.
12
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
11
Information on directors
Name
Title
Qualifications:
Experience and expertise:
Other current listed Company
directorships:
Former listed Company
directorships (last 3 years):
Interests in shares and
options:
Name
Title
Qualifications:
Experience and expertise:
Other current listed Company
directorships:
Former listed Company
directorships (last 3 years):
Interests in shares and
options:
Name
Title
Qualifications:
Experience and expertise:
Other current listed Company
directorships:
Former listed Company
directorships (last 3 years):
Interests in shares and
options:
Mr Douglas Flynn (appointed 12 March 2020)
Non-executive Chairman
B.Eng., MBA
My Flynn is an businessman with extensive executive and non-executive
leadership experience in large and small listed companies in Australia, UK
and Hong Kong. He also has sound experience in early stage technology
businesses.
NextDC Limited
Konekt Limited, APN Outdoor Group Limited, iSentia Group Limited
Nil
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
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.
N/A
N/A
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
Mr Howard Digby (appointed 1 August 2017)
Non-executive Director
B.Eng. (Hons)
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.
4DS Memory Limited, Elsight Limited, HearMeOut Limited, Vortiv Ltd
(formerly Transaction Solutions International Limited), Cirralto Ltd
Estrella Resources Limited
Ordinary shares: 9,539,655
Options over ordinary shares: 1,500,000
13
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Name
Title
Qualifications:
Experience and expertise:
Other current listed Company
directorships:
Former listed Company
directorships (last 3 years):
Interests in shares and
options:
Name
Title
Qualifications:
Experience and expertise:
Other current listed Company
directorships:
Former listed Company
directorships (last 3 years):
Interests in shares and
options:
Name
Title
Qualifications:
Experience and expertise:
Other current listed Company
directorships:
Former listed Company
directorships (last 3 years):
Interests in shares and
options:
Dr Doug Lingard (appointed 10 December 2018)
Non-executive Director
MB.ChB. FRANZCR, MAICD
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.
N/A
N/A
Ordinary shares: 6,094,558
Options over ordinary shares: 42,000,000
Mr Carlos Palacio (appointed 28 August 2018)
Non-executive Director
B.Elec.Eng, MBA
Mr Palacio has over 27 years’ experience
Telecommunications and strategic management.
N/A
N/A
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
in
international
IT,
Mr Tom Pascarella (appointed 25 October 2018)
Non-executive Chairman (resigned 30 November 2019)
A.B. Political Economy (Princeton), CFTP, F.Fin, MAICD
Mr Pascarella has extensive experience over 25 years
in various
relationship management, transaction origination and senior leadership
roles in Corporate & Investment Banking.
N/A
N/A
Ordinary shares: nil
Options over ordinary shares: 4,000,000
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
14
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
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.
13
Meetings of directors
The following table sets out the number of meetings of the Company’s Directors held during the year while
each was a Director and includes meetings held in person and by teleconference.
Carlos Palacio
German Arango
Howard Digby
Doug Lingard
Tom Pascarella
Directors’ Meetings
Number eligible to attend
15
15
15
15
14
Number attended
14
15
15
14
14
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
Options
Class A Options*
Class B Options*
Class C Options*
New Options*
Advisor Options*
Director Options
Director Options
Grant
date
Date of
expiry
22/07/2017
31/03/2021
28/08/2018
28/08/2018
30/06/2021
28/08/2023
28/08/2018
28/08/2023
28/08/2018
30/06/2021
28/08/2018
25/10/2018
30/06/2021
25/10/2023
10/12/2018
10/12/2023
Loan Agreement Options
7/10/2019
31/03/2022
Advisor Options
31/10/2019
30/09/2022
* Subject to escrow
Exercise
Number
price
$0.025
$0.050
$0.038
$0.038
$0.038
$0.050
$0.070
$0.053
$0.054
$0.054
of options
Valuation
Note
35,000,000
233,480
50,000,000
50,000,000
50,000,000
450,000
-
-
12,500,000
137,500
30,000,000
4,000,000
270,000
60,000
2,000,000
26,500
40,000,000
1,080,000
5,000,000
120,000
278,500,000
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(d)
(e)
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.
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.
Options issued as remuneration to Mr Tom Pascarella, subject to vesting conditions.
Options issued as remuneration to Dr Doug Lingard, subject to vesting conditions.
Options issued pursuant to a loan agreement with Domatorisaro Pty Ltd, a related party of Dr Doug
Lingard.
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 no options were exercised or lapsed.
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
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
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, 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 and payable to the external auditors during the year ended
31 December 2019:
Compliance and Taxation Services
Investigating Accountant’s Report
19
Auditor’s independence declaration
2019
$
9,862
-
2018
$
6,255
27,000
The auditor’s independence declaration in accordance with section 307C of the Corporations Act 2001 for the
period ended 31 December 2019 has been received and can be found on page 35 of the financial report.
16
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ 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 2018 AGM
24 Use of Remuneration Consultants
The figures disclosed in this Remuneration Report reflect the remuneration whilst employed by IMEXHS
Limited 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.
20.1
Key management personnel (including the executives of the Company)
The report covers Non-Executive Directors, Executive Directors and other KMP, and is for the full year unless
otherwise noted:
2019
Non-executive directors (NED)
Tom Pascarella 1
Howard Digby
Doug Lingard
Carlos Palacio
Executive Directors
German Arango
Other KMP
Jorge Marin
Tony Thomas
Andres Vanegas
There were no other changes after the reporting date and before the date the financial report was authorised
for issue.
1 Resigned 30 November 2019.
17
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
2018
Non-executive directors (NED)
Tom Pascarella 2
Howard Digby
Doug Lingard 6
Carlos Palacio 8
Andrew Lilley 10
Peter Webse 11
Executive Directors
German Arango 3
Other KMP
Jorge Marin 4
Tony Thomas 5
Andres Vanegas 7
Paul Frederiks 9
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 Limited 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 Limited
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).
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.
2 Appointed 25 October 2018.
3 Appointed 28 August 2018.
4 From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd.
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 Company Secretary.
18
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
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.
Termination may be:
19
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
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.
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.
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
20
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
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.
21
Details of Remuneration
Remuneration of Key Management Personnel
Remuneration for the period ended 31 December 2019
Fixed
Variable
Remuneration
Note
Cash salary
Superannuation
Share-based
Total
consisting of
and fees
Payments
share-based
payments
$
$
$
$
%
Non-Executive Directors
Mr Carlos Palacio
Mr Howard Digby
Dr Doug Lingard
Mr Tom Pascarella
Total Non-Executive Directors
a
Executive Directors
Dr German Arango
Other KMP
Dr Jorge Marin
Mr Tony Thomas
Mr Andres Vanegas
Total Other KMP
TOTAL KMP
39,000
36,000
36,000
66,000
177,000
286,853
189,824
205,650
139,713
535,187
999,040
3,705
-
3,420
6,270
13,395
-
-
9,750
55,962
65,712
42,705
36,000
49,170
128,232
256,107
0.0%
0.0%
19.8%
43.6%
-
-
-
-
-
-
-
-
-
-
286,853
0.0%
189,824
205,650
139,713
535,187
0.0%
0.0%
0.0%
13,395
65,712
1,078,147
Individuals were KMP of the company for the whole period unless otherwise stated.
a
Resigned 30 November 2019.
21
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
Remuneration for the period ended 31 December 2018
Note
Cash
salary
and fees
Fixed
Variable
Remuneration
Superannuation
Share-based
Total
consisting of
Payments
share-based
payments
$
$
$
$
%
Non-Executive Directors
Mr Tom Pascarella
Mr Howard Digby
Dr Doug Lingard
Mr Carlos Palacio
Mr Andrew Lilley
Mr Peter Webse
Total Non-Executive Directors
Executive Directors
Dr German Arango
Other KMP
Dr Jorge Marin
Mr Tony Thomas
Mr Andres Vanegas
Mr Paul Frederiks
Total Other KMP
TOTAL KMP
a
Appointed 25 October 2018
a
b
c
d
e
f
g
h
i
j
k
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
23.5%
78.9%
14.6%
0.0%
82.8%
0.0%
96,986
0.0%
0.0%
0.0%
0.0%
0.0%
64,037
62,100
66,839
54,875
247,851
747,328
b Appointed 1 August 2017. Share based payment relates to the issue of shares in lieu of cash for work spend on the acquisition of Imaging
Experts and Healthcare Services Pty Ltd
c
Appointed 10 December 2018
d Appointed 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
e 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.
f
g
h
i
j
Appointed 17 November 2017. Resigned as Director 28 August 2018. Comprises $16,667 in Directors Fees to that date and $43,000 in
Company Secretarial fees for the full year.
Appointed 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
From 28 August 2018, being the date of acquisition of Imaging Experts and Healthcare Services Pty Ltd
k
Appointed 6 February 2017. Resigned 28 August 2018.
22
IMEXHS LTD FINANCIAL REPORT 2019
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.
Note
Balance at
Granted as
Purchased
Consideration
Other
Balance at
1/01/2019
Remuneration
31/12/2019
Non-Executive Directors
Mr Carlos Palacio
Mr Howard Digby
Dr Doug Lingard
Mr Tom Pascarella
103,833,600
7,600,000
1,009,999
-
Total Non-Executive Directors
112,443,599
Executive Directors
Dr German Arango
a
157,525,160
Other KMP
Dr Jorge Marin
Mr Tony Thomas
Mr Andres Vanegas
Total Other KMP
TOTAL KMP
a
-
2,507,745
102,437,920
104,945,665
374,914,424
-
-
-
-
-
-
-
-
-
-
-
-
1,250,000
1,675,759
-
2,925,759
-
-
-
-
-
2,925,759
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
103,833,600
8,850,000
2,685,758
-
115,369,358
-
157,525,160
-
-
-
-
-
-
2,507,745
102,437,920
104,945,665
377,840,183
a
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.
23
IMEXHS LTD FINANCIAL REPORT 2019
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.
Note
Class
Balance at
Granted as
Purchased
Consideration
Other
Balance at
Vested at
Unvested at
1/01/2019
Remuneration
31/12/2019
31/12/2019
31/12/2019
Non-Executive Directors
Mr Carlos Palacio
Class A*
10,076,680
Class B*
10,076,680
Class C*
10,076,680
30,230,040
Mr Howard Digby
Unlisted
1,500,000
Dr Doug Lingard
Mr Tom
Pascarella
a
b
Director
2,000,000
Director
4,000,000
Total Non-Executive Directors
37,730,040
Executive Directors
Dr German
Arango
c
Class A*
15,287,254
Class B*
15,287,254
Class C*
15,287,254
Total Executive Directors
45,861,762
Other KMP
Dr Jorge Marin
c
Mr Tony Thomas
Mr Andres
Vanegas
Total Other KMP
TOTAL KMP
Subject to escrow
-
-
Class A*
9,941,234
Class B*
9,941,234
Class C*
9,941,234
29,823,702
29,823,702
113,415,504
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
1,500,000
-
40,000,000
42,000,000
40,000,000
2,000,000
(4,000,000)
-
-
-
36,000,000
73,730,040
51,576,680
22,153,360
-
-
-
-
-
-
-
-
-
-
-
15,287,254
15,287,254
-
15,287,254
15,287,254
-
-
15,287,254
15,287,254
45,861,762
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
36,000,000
149,415,504
76,805,168
72,610,336
Granted 40,000,000 options to Domatorisaro Pty Ltd, a related body corporate, as part of a loan agreement entered into on 12 July 2019.
Appointed 25 October 2018. Resigned 30 November 2019 and ceased to be a KMP from that date.
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.
22.3
Terms and conditions of the share-based payment arrangements
Shares
No shares were issued during the year as part of share-based payment arrangements.
*
a
b
c
24
IMEXHS LTD FINANCIAL REPORT 2019
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
Dr Doug Lingard*
40,000,000
7 Oct 2019
7 Oct 2019
31 Mar 2022
0.054
0.027
100
Total Non-Executive
Directors
40,000,000
TOTAL KMP
40,000,000
* During the year, the company entered into a loan with Domatorisaro Pty Ltd, a related party of Dr Doug
Lingard. This loan included the granting of 40,000,000 options. These options have been included as a cost of
borrowing which is being amortised over the life of the loan.
22.3.1 Performance Related Shares and Options
During the year, the company did not issue any performance rated shares or options.
23
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 KMP:
Entity
Nature of Transactions
KMP
Note
2019
2018
2019
$
$
$
2018
$
Income
Amounts Outstanding
UT Imágenes Diagnosticas La Misericordia
Sales Revenue
RIMAB SAS
Datamedic SAS
Sales Revenue
Sales Revenue
G Arango
G Arango
A Vanegas
-
57,106
-
109,690
a
3,352,350
672,564
1,681,800
435,292
30,548
659,718
256,169
698,098
The group acquired services from entities that are controlled by members of the group’s KMP:
Entity
Nature of Transactions
KMP
Note
RIMAB SAS
German Arango
Jorge Marin
Interpretation services
G Arango
PaaS Equipment Financing
G Arango
PaaS Equipment Financing
J Marin
CrossPoint Telecommunications Pty Ltd
Office space and IT Services
C Palacio
Datamedic SAS
Datamedic SAS
Fixed Asset Purchases
Technical services
A Vanegas
A Vanegas
a
b
c
d
Expenses
Amounts Outstanding
2019
2018
$
$
2019
$
1,684,919
489,598
263,046
100,264
108,891
75,705
2018
$
17,751
44,949
172,224
189,042
344,694
171,835
14,925
8,917
1,211
1,165
348,067
76,123
-
-
-
-
-
-
(a) The company has an agreement with RIMAB S.A.S., an entity owned 100% by Dr Arango.
(b) Chief Executive Director, Dr German Arango has provided equipment to Imaging Experts and Healthcare
Services S.A.S. in return for payments from a contract providing PaaS services. The equipment is repaid
25
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ REPORT
at a 200% rate of return on their loan which is paid in monthly instalments over the initial term of the
PaaS contract.
(c) Chief Medical Officer, Dr Jorge Marin has provided equipment to Imaging Experts and Healthcare
Services S.A.S. in return for payments from a contract 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) 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
J Marin
D Lingard
Balance at start of year
Interest paid and payable
Net receipts/(payments)
Balance at end of year
$
$
$
$
14,901
-
-
95,591
(14,901)
1,000,000
-
1,000,000
24
Voting and comments made at the Company’s 2019 Annual General Meeting
The Company received more than 99.9% of “yes” proxy votes on its remuneration report for the 2018 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.
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
Doug Flynn
Chairman
30 March 2020
26
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 30 March 2020 and has been approved by the Board of
the Company.
This Corporate Governance Statement discloses the extent to which the Company followed 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 will be reporting against the Corporate Governance Principles and
Recommendations 4th Edition for the financial year ending 31 December 2020.
The Company has adopted a Corporate Governance Plan which provides 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 is available on the Company’s website at www.imexhs.com
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
•
•
•
•
•
•
•
•
•
•
27
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
•
•
applicable);
Ensuring a high standard of corporate governance practice and regulatory compliance and promoting
ethical and responsible decision making; and
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:
28
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
Women employees in the Company
Women in senior management positions
Women on the Board
57%
38%
0%
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 resignation of the former Chairman and resultant search for a replacement Chairman, 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.
29
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
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 Douglas Flynn
Dr German Arango
Mr Howard Digby
Dr Douglas Lingard
Mr Carlos Palacio
Mr Thomas Pascarella
Non-Executive Chairman (appointed 12 March 2020);
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, appointed Interim Non-
Executive Chairman on 30 November 2019 and reverted to a Non-Executive
Director on 12 March 2020); and
Non-Executive Chairman (appointed 25 October 2018, resigned 30 November
2019).
The Board comprises of only four Non-Executive Directors and one Executive Director.
Messrs Flynn and Digby are considered as independent as they are Non-Executive Directors of the Company
(Mr Pascarella was considered as independent during the term of his appointment as Non-Executive
Chairman). Dr Lingard is not considered to be independent due to a related party of his providing a financing
facility to the Company from 12 July 2019. Dr Arango is not considered to be independent by virtue of being
Managing Director and a substantial shareholder of the Company. Mr Palacio is not considered to be
independent as he provides contractual services to the Company through CrossPoint Telecommunications.
The Board had an independent Chairman until Mr Pascarella’s resignation on 30 November 2019. Mr Palacio,
who is not considered independent, took on the role of Interim Chairman until Mr Flynn’s appointment as
independent Chairman on 12 March 2020. The Company has not had a majority of independent Directors
since 12 July 2019. The Company reviews the composition of the Board periodically.
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.
30
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
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 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
31
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
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:
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
company announcements are expressed in a clear and objective manner that allows investors to assess
the impact of the information when making investment decisions.
b)
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.
32
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
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 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.
33
IMEXHS LTD FINANCIAL REPORT 2019
CORPORATE GOVERNANCE STATEMENT
Principle 8: Remunerate fairly and responsibly
The Board as a whole fulfils 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 performance improvement. The overriding objective of
the Remuneration Policy will be to ensure that an individual’s remuneration package accurately reflects their
experience, level of responsibility, individual 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.
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.
34
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 2019, 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 Limited and the entities it controlled during the period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 30 March 2020
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.
35
IMEXHS LTD FINANCIAL REPORT 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
Sales Revenue
Interest and other revenue
Revenue from Ordinary Activities
Hardware & Licence Expenses
R&D and Support Expenses
Platform as a Service Expenses
Clinical Services Expenses
Administration and Sales Expenses
Interest, foreign exchange and other expenses
Listing and Share Based Payment Expenses
Depreciation and Amortisation
Impairment in inventories
Impairment losses on trade receivables
Note
2019
$
2018
$
4
5
6
7,727,260
142,554
7,869,814
5,779,851
307,129
6,086,980
(1,090,415)
(2,121,479)
(760,571)
(3,120,907)
(4,294,600)
(899,521)
(65,712)
(825,929)
(63,784)
(669,527)
(1,051,538)
(1,339,903)
(511,213)
(498,772)
(2,603,171)
(528,129)
(3,929,770)
(306,711)
(37,776)
(75,344)
Profit / (Loss) from ordinary activities before income tax
(6,042,631)
(4,795,347)
Income tax benefit / (expense)
28
40,343
(91,818)
Profit / (Loss) from ordinary activities after income tax
(6,002,288)
(4,887,165)
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
(5,840)
(5,840)
(5,840)
42,160
42,160
42,160
Total comprehensive profit / (loss) for the period attributable
to the members of IMEXHS Limited
(6,008,128)
(4,845,005)
Basic earnings / (loss) per share (cents per share)
Diluted earnings / (loss) per share (cents per share)
22
22
(0.006)
(0.006)
(0.007)
(0.007)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
36
IMEXHS LTD FINANCIAL REPORT 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, Plant and Equipment
Intangibles
Right of Use Assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Contract Liabilities
Borrowings
Lease liabilities
Employee Benefit Provision
Other
Total Current Liabilities
Non-Current Liabilities
Borrowings
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
2019
$
2018
$
7
8
9
10
11
12
13
14
15
16
14
28
17
18
19
7,149,683
3,653,647
107,354
10,910,684
3,376,006
469,887
40,805
3,886,698
14,797,382
870,151
63,936
715,407
40,574
850,081
1,113,703
3,653,852
826,894
-
826,894
4,480,746
10,316,636
2,445,329
3,880,759
811,310
7,137,398
1,591,111
527,368
-
2,118,479
9,255,877
1,897,472
91,480
188,491
-
419,152
726,264
3,322,859
-
82,223
82,223
3,405,082
5,850,795
19,757,466
2,478,480
(21,232)
(11,898,078)
10,553,259
1,208,718
(15,392)
(5,895,790)
10,316,636
5,850,795
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
37
IMEXHS LTD FINANCIAL REPORT 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Note
Issued
Capital
$
1,559,756
-
-
-
Share
Based
Payments
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
$
-
-
-
-
(57,552)
-
(1,008,625)
(4,887,165)
493,579
(4,887,165)
42,160
-
42,160
42,160
(4,887,165)
(4,845,005)
17
18
8,993,503
-
10,553,259
-
1,208,718
1,208,718
-
-
(15,392)
-
-
(5,895,790)
8,993,503
1,208,718
5,850,795
-
-
-
-
-
-
-
(6,002,288)
(6,002,288)
(5,840)
-
(5,840)
(5,840)
(6,002,288)
(6,008,128)
17
18
9,204,207
-
19,757,466
-
1,269,762
2,478,480
-
-
(21,232)
-
-
(11,898,078)
9,204,207
1,269,762
10,316,636
Balance at 1 January 2018
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
Share & Options issued
Balance at 31 December 2018
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
Share & Options issued
Balance at 31 December 2019
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
38
IMEXHS LTD FINANCIAL REPORT 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note
2019
$
2018
$
CASH FLOWS FROM OPERATING ACTIVITIES
Profit / (Loss) for the year before tax
Adjustments for:
Depreciation and amortisation
Impairment in receivables
Impairment in inventories
Equity settled transactions
Net borrowing costs
Movement in trade and other receivables
Movements in inventories
Movement in trade and other payables
Movement in contract liabilities
Movement in employee benefits
Movement in other liabilities
Cash generated from operations
Interest received
Interest paid
Income Tax Paid
Net cash flow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired from acquisitions
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash flow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from issue of options
Equity settled convertible notes
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Principal elements of lease payments
Net cash flow from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange differences
NET CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
7
(6,042,631)
(4,795,347)
825,929
669,527
63,784
65,712
488,645
(442,411)
640,172
(1,027,322)
(27,545)
430,929
387,358
(3,967,853)
2,774
(82,848)
(41,880)
(4,089,807)
306,711
81,340
38,077
4,357,697
193,033
(1,142,569)
(552,213)
924,800
(1,087,679)
199,001
150,681
(1,326,469)
2,866
(195,899)
(21,937)
(1,541,439)
-
(2,303,069)
(157,420)
(2,460,489)
347,484
(1,318,182)
(352,299)
(1,322,997)
10,000,000
4,050
-
(675,794)
2,383,134
(338,670)
(93,085)
11,279,635
4,729,339
2,445,329
(24,985)
7,149,683
5,500,000
925
500,000
(427,927)
220,110
(530,772)
-
5,262,336
2,397,900
4,593
42,836
2,445,329
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
39
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 2019 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.
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
40
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime
expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate
for each group. These assumptions include recent sales experience and historical collection rates.
Going Concern
For the year ended 31 December 2019, the Group generated a consolidated loss of $6,002,288 (2018: loss of $4,887,165) and
incurred operating cash outflows of $4,089,807 (2018: outflows of $1,541,439). As at 31 December 2019, the Group had cash
and cash equivalents of $7,149,683 (2018: $2,445,329), a surplus of net current assets of $6,429,938 (2018: $3,814,539) and
surplus of net assets of $10,316,636 (2018: $5,850,795).
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.
New and amended standards adopted by the group
A number of new or amended standards became applicable for the current reporting period and the group had to change its
accounting policies and make retrospective adjustments as a result of adopting AASB 16 Leases.
The impact of the adoption of the leasing standard and the new accounting policies are disclosed in note 3 below. The other
standards did not have any impact on the group’s accounting policies and did not require retrospective adjustments.
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 2019 or for any time during the year.
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.
41
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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.
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.
42
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
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.
43
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 has applied the simplified impairment methodology provided by AASB 9. This uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
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.
(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.
44
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(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.
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.
45
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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) 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.
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.
(y) Leases
The group has adopted AASB retrospectively from 1 January 2019 but has not restated comparatives for the 2018 reporting
period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments
arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019.
The standard replaces AASB 117 Leases and for lessees eliminates the classifications of operating leases and finance leases.
Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are
recognised in the statement of financial position. Straight-line operating lease expense recognition is replaced with a
depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease
liabilities (included in finance costs).
In the earlier periods of a lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as
the operating expense is now replaced by interest expense and depreciation in profit or loss.
For classification within the statement of cash flows, the interest portion is disclosed in operating activities and the principal
portion of the lease payments are separately disclosed in financing activities.
46
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
For lessor accounting, the standard does not substantially change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach, and as such the comparatives have not been restated. The
impact of adoption as at 1 January 2019 was as follows:
Operating lease commitments as at 31 December 2018
Discounted using the lessee’s incremental borrowing rate at the date of initial application
Short-term leases not recognised as right-of-use asset
Low-value assets leases not recognised as a right-of-use asset
Contracts reassessed as service agreements
Adjustments as a result of different treatment of extension and termination options
Adjustments relating to changes in the index rate or rate affecting variable payments
Lease liability recognised as at 1 January 2019
Of which are:
Current
Non-current
(z) Right-of-use assets
1 January 2019
$
132,698
119,085
(2,249)
-
-
12,600
-
129,436
89,401
40,035
129,436
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit
or loss as incurred.
At the time of adopting this standard for the first time, Right-of use assets were measured at the amount equal to the lease
liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance
sheet as at 31 December 2018. There were no onerous lease contracts that would have required an adjustment to the right-of-
use assets at the date of initial application.
(aa) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
47
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written
down.
The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 10.0%.
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
2019
$
2018
$
862,009
6,670,570
305,960
210,863
(322,142)
7,727,260
2,337,571
2,611,973
756,197
180,716
(106,606)
5,779,851
6,706,056
1,021,204
7,727,260
2,797,682
2,982,169
5,779,851
-
-
The group derived revenue from one geographic region, Latin America.
Revenue recognised in the year ended 31 December 2019 that was included in contract liabilities as at 1 January 2019 is
$76,412 (2018: $1,179,158).
5
ADMINISTRATION AND DISTRIBUTION EXPENSES
Employee and Director Benefit Expenses
Audit, Legal and Tax Advice Fees
Taxes
Office expenses
Insurance
Advertising & Marketing
Corporate expenses
Maintenance
Travel
Other
48
2019
$
2018
$
1,726,610
403,467
179,173
283,645
96,560
180,220
606,901
4,090
223,940
589,994
4,294,600
1,160,255
275,213
83,181
239,766
23,223
42,942
348,842
16,939
189,158
223,652
2,603,171
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
6
LISTING AND SHARE BASED PAYMENT EXPENSES
Share based payment expense on issue of Director options
Finance cost of convertible notes
Share based payment on issue of Director shares
Listing expense on reverse acquisition of IMEXHS Limited
Issue of options pursuant to convertible notes
Share based payment expense on acquisition of Imaging Experts and
Healthcare Services Pty Ltd
7
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Savings and Investments
8
TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments
Indirect tax receivables
Other
2019
$
2018
$
65,712
-
-
-
-
-
65,712
4,599
125,000
250,000
3,067,190
137,375
345,606
3,929,770
2019
$
2018
$
924,928
6,224,755
7,149,683
53,805
2,391,524
2,445,329
2019
$
2018
$
2,692,470
250,619
700,840
9,718
3,653,647
3,362,829
61,964
446,434
9,532
3,880,759
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 26.
49
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
9
INVENTORIES
Merchandise not manufactured by the Group
Materials and spare parts
Impairment in inventories
2019
$
2018
$
183,474
61,642
(137,762)
107,354
840,220
46,518
(75,428)
811,310
Amounts recognised in profit or loss
Inventories recognised as an expense during the year, included in cost of sales
1,090,415
2,061,552
Write-downs of inventories to net realisable value amounted to $63,784 (2018: $38,076).
10 PROPERTY, PLANT AND EQUIPMENT
31 December 2019
Cost or fair value
Accumulated depreciation
Net carrying amount - 31 December 2019
Movements in carrying amounts
Balance at 1 January 2019
Additions
Disposals
Depreciation expense
Exchange differences
Net carrying amount - 31 December 2019
Furniture &
Fittings
Computer
Equipment
Medical
Equipment
$
$
$
Total
$
26,286
(8,709)
17,577
17,088
6,203
(364)
(5,293)
(57)
17,577
1,640,412
(433,092)
1,207,320
2,519,140
(368,031)
2,151,109
4,185,838
(809,832)
3,376,006
793,274
781,941
(21,782)
(343,482)
(2,631)
780,749
1,552,571
(8,979)
(169,398)
(3,834)
1,591,111
2,340,715
(31,125)
(518,173)
(6,522)
1,207,320
2,151,109
3,376,006
50
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
31 December 2018
Cost or fair value
Accumulated depreciation
Net carrying amount - 31 December 2018
Movements in carrying amounts
Balance at 1 January 2018
Additions
Disposals
Depreciation expense
Exchange differences
Net carrying amount - 31 December 2018
11
INTANGIBLES
31 December 2019
Cost or fair value
Accumulated depreciation
Net carrying amount - 31 December 2019
Movements in carrying amounts
Balance at 1 January 2019
Additions
Disposals
Depreciation expense
Exchange differences
Net carrying amount - 31 December 2019
Furniture &
Fittings
Computer
Equipment
Medical
Equipment
$
$
$
Total
$
27,459
(10,371)
17,088
945,182
(151,908)
793,274
986,106
(205,357)
780,749
1,958,747
(367,636)
1,591,111
4,348
15,089
-
(2,488)
139
17,088
155,427
718,176
(1,622)
(83,735)
5,028
793,274
286,716
606,839
(27,737)
(92,828)
7,759
780,749
446,491
1,340,104
(29,359)
(179,051)
12,926
1,591,111
Copyright
Licences
$
$
Total
$
27,768
(17,355)
10,413
959,465
(499,991)
459,474
987,233
(517,346)
469,887
13,535
-
-
(3,490)
368
10,413
513,833
159,201
-
(211,411)
(2,149)
459,474
527,368
159,201
-
(214,901)
(1,781)
469,887
51
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
31 December 2018
Cost or fair value
Accumulated depreciation
Net carrying amount - 31 December 2018
Movements in carrying amounts
Balance at 1 January 2018
Additions
Disposals
Depreciation expense
Exchange differences
Net carrying amount - 31 December 2018
12 RIGHT OF USE ASSETS
Right of Use - Land and Buildings
Less: Accumulated Depreciation
Copyright
Licences
$
$
Total
$
27,907
(14,372)
13,535
818,739
(304,906)
513,833
846,646
(319,278)
527,368
17,166
-
-
(4,720)
1,089
13,535
285,563
325,423
-
(122,940)
25,787
513,833
302,729
325,423
-
(127,660)
26,876
527,368
2019
$
2018
$
133,288
(92,483)
40,805
-
-
-
-
-
Reconciliations of the written down values at the beginning and end of the previous financial year are set out below.
Right of Use
Assets: Land
and Buildings
$
Total
$
Balance at 1 January 2018
Balance at 31 December 2018
Opening balance on adoption of AASB 16
Modifications to lease terms
Amortisation
Exchange Differences
-
-
129,436
4,417
(92,855)
(193)
129,436
4,417
(92,855)
(193)
Balance at 31 December 2019
40,805
40,805
52
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
13
TRADE AND OTHER PAYABLES
Trade payables
2019
$
2018
$
870,151
870,151
1,897,472
1,897,472
Due to their short-term nature, the carrying amount of trade payables are assumed to be the same as their fair values.
Trade and other payables are expected to be paid within six months.
14 BORROWINGS
Current
Credit Cards
Unsecured Revolving Credit Loans
Unsecured Fixed term loans
Unsecured Other loans
Non-Current
Unsecured Revolving Credit Loans
Unsecured Fixed term loans
Secured Loans from related parties*
Cost of borrowing*
2019
$
2018
$
6,866
91,652
612,501
4,388
715,407
8,716
131,566
6,444
41,765
188,491
2019
$
2018
$
13,276
585,047
1,000,000
(771,429)
826,894
-
-
-
-
-
* The cost of borrowing relates to the net amortised value of the cost of options issued on the loan to Domatorisaro Pty Ltd, a
related party of Dr Doug Lingard. The cost of the options is amortised over the length of the loan. This loan comprised two
possible tranches of $1,000,000 each at an annual interest rate of 12.5% on each tranche and 4% on the facility. The loan is
repayable in March 2021.
The carrying amount of borrowings are assumed to be the same as their fair values.
53
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
15
LEASE LIABILITIES
Lease Liability
2019
$
2018
$
40,574
-
Reconciliations of the movement in the lease liability at the beginning and end of the previous financial year are set out below.
Balance at 1 January 2018
Balance at 31 December 2018
Opening balance on adoption of AASB 16
Interest expense
Lease payments
Modification of lease terms
Exchange Differences
Balance at 31 December 2019
16 OTHER CURRENT LIABILITIES
Income taxes
Indirect taxes
PaaS equipment financing loan*
Other
$
-
-
129,436
9,135
(102,213)
4,407
(191)
40,574
2019
$
2018
$
41,469
442,511
517,182
112,541
1,113,703
22,151
445,532
251,742
6,839
726,264
* Relates to various loans made to the company for PaaS contracts where 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.
54
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
17
ISSUED CAPITAL
Ordinary shares - fully paid
1,175,657,186
925,657,186
19,757,466
10,553,259
2019
Shares
2018
Shares
2019
$
2018
$
Movements in ordinary share capital
Balance 1 January 2018
Elimination of Imaging Experts and Healthcare Services SAS
Existing shares in IMEXHS Limited
Issue of Shares pursuant to acquisition
Issue of Shares pursuant to 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 at 31 December 2018
Issue of Shares pursuant to placement
Cost of share issue
Issue of Lead Advisor Options
No of shares
$
8,178
1,559,756
(8,178)
150,657,180
520,000,000
220,000,000
25,000,000
10,000,000
-
-
6
-
-
3,316,430
5,500,000
625,000
250,000
(427,927)
(270,000)
-
925,657,186
10,553,259
250,000,000
-
-
10,000,000
(675,793)
(120,000)
Balance at 31 December 2019
1,175,657,186
19,757,466
In addition to the above, the company has 750,000 unquoted Class A Performance Shares. The Class A Performance Shares are
subject to performance hurdles measured against audited revenue of the GRT App equal to or exceeding $8,000,000 in any
financial year. These Class A Performance Shares must be converted on or before 22 July 2020.
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.
55
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
18 SHARE BASED PAYMENTS RESERVE
Amounts paid on issue of options
Option valuation reserve
Option valuation reserve comprises:
Balance at 1 January 2018
Shares & Options issued to pursuant to acquisition of Imaging Experts and
Healthcare Services Pty Ltd
Options issued pursuant to acquisition agreement
Options issued pursuant to convertible note agreement
Options issued to Lead Adviser pursuant to Placement
Options issued pursuant to Director remuneration
Options issued pursuant to Director remuneration
Balance at 1 January 2019
Options issued pursuant to Loan Agreement
Options issued to Lead Adviser pursuant to placement
Options issued pursuant to Director Remuneration
Balance at 31 December 2019
2019
$
5,063
2,473,417
2,478,480
2018
$
1,013
1,207,705
1,208,718
No of Options
35,000,000
-
150,000,000
12,500,000
30,000,000
4,000,000
2,000,000
233,500,000
40,000,000
5,000,000
-
278,500,000
$
-
345,606
450,000
137,500
270,000
4,038
561
1,207,705
1,080,000
120,000
65,712
2,473,417
At 31 December 2019, the unissued ordinary shares of IMEXHS Limited under option are unlisted and are as follows:
Type
Options
Class A Options*
Class B Options*
Class C Options*
New Options*
Advisor Options*
Director Options
Director Options
Loan Agreement Options
Advisor Options
* Subject to escrow
Grant
date
7/07/2017
28/08/2018
28/08/2018
28/08/2018
28/08/2018
28/08/2018
25/10/2018
9/12/2018
7/10/2019
31/10/2019
Date of
expiry
31/03/2021
30/06/2021
28/08/2023
28/08/2023
30/06/2021
30/06/2021
25/10/2023
9/12/2023
31/03/2022
30/09/2022
Exercise
price
$0.025
$0.050
$0.038
$0.038
$0.038
$0.050
$0.070
$0.053
$0.054
$0.054
Number
of options
35,000,000
50,000,000
50,000,000
50,000,000
12,500,000
30,000,000
4,000,000
2,000,000
40,000,000
5,000,000
278,500,000
Valuation
Note
233,480
450,000
-
-
137,500
270,000
60,000
26,500
1,080,000
120,000
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
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.
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.
Options issued as remuneration to Mr Tom Pascarella, subject to vesting conditions.
56
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
(d)
(e)
Options issued as remuneration to Dr Doug Lingard, subject to vesting conditions.
Options issued to Domatorisaro Pty Ltd, a related party of Dr Doug Lingard, pursuant to a loan agreement.
The value of the share-based payments issued in 2019 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 the issue price at the date of
the transaction, a raw risk free rate of 1.78% and a volatility of 100%
The weighted average remaining contractual life of options outstanding at the end of the period was 2.38 years.
19 RETAINED PROFITS / ACCUMULATED LOSSES
Balance at the beginning of the financial year
Change in accounting policy
Net loss attributable to members
Balance at the end of the financial year
20 RELATED PARTY TRANSACTIONS
(a) Compensation
2019
$
2018
$
(5,895,790)
-
(6,002,288)
(11,898,078)
(865,240)
(143,385)
(4,887,165)
(5,895,790)
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-employee benefits
Share-based payments
2019
$
999,040
-
13,395
65,712
1,078,147
2018
$
534,944
-
2,491
254,599
792,034
(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
2019
2018
$
$
2019
$
2018
$
UT Imágenes Diagnosticas La Misericordia
Sales Revenue
RIMAB SAS
Datamedic SAS
Sales Revenue
Sales Revenue
G Arango
G Arango
A Vanegas
-
57,106
-
109,690
a
3,352,350
672,564
1,681,800
435,292
30,548
659,718
256,169
698,098
Income
Amounts Outstanding
57
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The group acquired services from entities that are controlled by members of the group’s KMP:
Expenses
Amounts Outstanding
Entity
Nature of Transactions
KMP
Note
2019
2018
$
$
2019
$
RIMAB SAS
German Arango
Jorge Marin
Interpretation services
G Arango
PaaS Equipment Financing
G Arango
PaaS Equipment Financing
J Marin
CrossPoint Telecommunications Pty Ltd
Office space and IT Services
C Palacio
Datamedic SAS
Datamedic SAS
Fixed Asset Purchases
Technical services
A Vanegas
A Vanegas
a
b
c
d
1,684,919
489,598
263,046
100,264
108,891
75,705
172,224
189,042
344,694
171,835
14,925
8,917
1,211
1,165
348,067
76,123
-
-
-
-
-
-
2018
$
17,751
44,949
(a) 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 Clínica Nueva and is responsible for 95% of the
expenses incurred in providing those services. During the year, the Group entered into another agreement with RIMAB
S.A.S. that is tied to a RIMAB contract with Colsubsidio. Under this agreement IMEXHS is entitled to 98% of the revenues
of the contract in return for providing radiology services.
(b) Chief Executive Director, Dr German Arango has provided equipment to Imaging Experts and Healthcare Services S.A.S. in
return for payments from a contract 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.
(c) Chief Medical Officer, Dr Jorge Marin has provided equipment to Imaging Experts and Healthcare Services S.A.S. in return
for payments from a contract 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) 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
J Marin
D Lingard
Balance at start of year
Interest paid and payable
Net receipts/(payments)
Balance at end of year
$
$
$
$
14,901
-
-
95,591
(14,901)
1,000,000
-
1,000,000
During the year, the company entered into a loan with Domatorisaro Pty Ltd, a related party of Dr Doug Lingard. This loan
included the granting of 40,000,000 options (see note 18). These options have been included as a cost of borrowing (see note
14) which is being amortised over the life of the loan.
58
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
21 AUDITOR’S REMUNERATION
2019
$
2018
$
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 and Corporate Advisory Services
71,847
9,862
-
81,709
Paid and payable remuneration of the audit of Imaging Experts and Healthcare Services S.A.S. for:
Auditing and review of financial reports
Other
22 EARNINGS PER SHARE
Earnings Used in calculating earnings per share
Net Profit/(Loss) after income tax
25,500
6,255
27,000
58,755
23,223
-
23,223
46,999
660
47,659
2019
$
2018
$
(6,002,288)
(4,887,165)
Net Profit/(Loss) after income tax attributable to the owners of IMEXHS
LIMITED
(6,008,128)
(4,845,005)
Basic earnings/(loss) per share attributable to equity holders (cents per share)
Diluted earnings/(loss) per share attributable to equity holders (cents per
share)
(0.006)
(0.007)
(0.006)
(0.007)
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
954,081,844
658,923,692
-
-
954,081,844
658,923,692
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.
59
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
23 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 [Dormant]
Imaging Experts and Healthcare Services Pty Ltd
Imaging Experts and Healthcare Services S.A.S.
Australia
Australia
Colombia
Ownership interest
2018
2019
%
%
100%
100%
100%
100%
100%
100%
24 PARENT ENTITY INFORMATION
ASSETS
Current Assets
Cash and cash equivalents
Term deposits
Trade and other receivables
Loans and other receivables
Total Current Assets
Non-Current Assets
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
Non-Current Liabilities
Borrowings
Total Non-Current Liabilities
TOTAL LIABILIITES
NET ASSETS
EQUITY
Issued Capital
Share based payments reserve
Accumulated Losses
TOTAL EQUITY
60
2019
$
2018
$
5,229,002
1,000,989
48,975
4,263,963
10,542,929
3,158
3,158
10,546,087
880
880
228,571
228,571
229,451
10,316,636
2,404,513
-
3,481
3,476,256
5,884,250
4,713
4,713
5,888,963
38,168
38,168
-
-
38,168
5,850,795
23,438,273
2,366,141
(15,487,778)
14,684,067
646,379
(9,749,651)
10,316,636
5,580,795
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
25 EVENTS OCCURING AFTER THE REPORTING PERIOD
New Chairman
Subsequent to the end of the financial year, the Company appointed a new Chairman on 12 March 2020.
Mr Douglas Flynn
Mr Flynn has held senior management roles and directorships in major companies in Australia and overseas.
Prior to moving to London in 1994 Mr Flynn had held senior roles in ICI Australia and News Limited after it acquired ASX listed
Davies Brothers Ltd where he had been chief executive.
While based in London he was successively Managing Director of News International plc chief executive of Aegis Group plc and
chief executive of Rentokil Initial plc
In mid-2008, Mr Flynn returned to Australia and has been a director of HKEX listed Qin Jia Yuan Media, and ASX listed West
Australian Newspapers, Seven West Media and chaired Isentia Ltd, APN Outdoor Ltd, Konekt Ltd and NextDC Ltd. He retired
from the board of Seven West Media in 2013 to undertake the IPO of APN Outdoor which was subsequently sold in December
2018 to international operator JC Decaux. He retired from the board of iSentia in November 2017. In November 2019 Konekt
Ltd was acquired by Quadrant PE owned APM. Mr Flynn remains chair of leading Australian data centre operator NextDC
Limited.
Mr Flynn graduated in chemical engineering from the University of Newcastle, New South Wales. He received an MBA with
distinction from Melbourne University in 1979.
Mr Flynn will be paid a fee of $72,000 per annum plus superannuation.
Subject to shareholder approval, the Company will issue the following securities to Mr Flynn or his nominated entity as follows:
16,666,667 ordinary shares at 3 cents per share;
8,000,000 options with a strike price of 5.5 cents;
8,000,000 options with a strike price of 7 cents; and
12,000,000 options with a strike price of 3 cents, vesting when the Company’s share price reaches or exceeds a 30-day
VWAP of 12 cents.
Coronavirus pandemic
On 11 March 2020, the World Health Organisation recognised the COVID-19 as a pandemic. The Company has adopted remote
working policies and procedures for its workforce to address the health and wellbeing of our employees. At this time the
pandemic has not had an impact on our ability to deliver services.
The responses by governments and businesses has seen increased remote working, which the Company believes will show-
case the tele-radiology capabilities of HIRUKO. We believe that this will provide increased awareness of our product,
particularly with the increased attention from governments in this area.
Medical imaging through CT Scans and chest X-Rays form an essential part of the diagnosis for the COVID-19 virus.
Consequently, the Company expects that the impact on its clients in the short-term will be a likely increase in in-patient medical
imaging and a reduction in out-patient medical imaging from the deferral of non-urgent clinic visits.
The timing, extent of the impact and recovery from COVID-19 on our employees, customers and suppliers is unknown at this
stage.
61
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The full impact of COVID-19 outbreak continues to evolve as at the date of this report. As such the Company is unable to
estimate the effects of the COVID-19 outbreak on the Company’s financial position, liquidity and operations in the financial year
2020.
Other the above, 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.
26
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
Cash flow and fair value interest rate risk
The group’s main interest rate risk arises from borrowings with variable rates, which expose the group to cash flow interest rate
risk. Group policy is to have mainly fixed rate loans directly. During 2019 and 2018, the group’s borrowings at variable rate were
denominated in Colombian Pesos. The group’s borrowings and receivables are carried at amortised cost.
The entity is exposed to interest rate risk at the date of this report via its cash holdings.
The exposure of the group’s borrowings to interest rate changes and the contractual re-pricing dates of the borrowings at the
end of the reporting period are as follows:
Variable rate borrowings
Fixed rate borrowings (no repricing
dates)
2019
% of total
loans
2018
% of total
loans
6,866
0.3%
15,160
8.0%
2,306,864
2,313,730
99.7%
100.0%
173,331
188,491
92.0%
100.0%
An analysis by maturities is provided below. The percentage of total loans shows the proportion of loans that are currently at
variable rates in relation to the total amount of borrowings.
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:
62
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Cash
Trade and other debtors
Trade and other payables
COP
$
938,661
2,537,490
389,768
31 Dec 2019
USD
$
-
246,708
32,706
EUR
$
-
-
9,909
COP
$
18,284
3,421,409
809,430
31 Dec 2018
USD
$
-
444,579
614,221
EUR
$
-
388,918
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
$149,228 higher (2018: $103,585 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.
The Group has increased its expected credit loss provisions to take a more conservative approach on overdue amounts. On this
basis, the loss allowance for trade receivables is as follows:
31 December 2019
Past Due
Current
< 3 months
3-6 months
Trade receivables
2,388,217
241,109
ECL %
Loss Allowance
0%
-
4%
9,389
92,148
50%
46,074
6-12 months
105,837
> 12 months
749,626
Total
3,576,937
75%
79,378
100%
749,626
884,467
31 December 2018
Past Due
Current
< 3 months
3-6 months
Trade receivables
1,347,278
1,272,481
ECL %
Loss Allowance
0%
-
0%
-
216,599
13%
25,020
6-12 months
227,574
> 12 months
562,214
Total
3,626,146
24%
49,298
37%
189,000
263,318
63
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The closing loss allowance for trade receivables as at 31 December 2019 reconciles to the opening loss allowance as follows:
Opening loss allowance at 1 January
Increase in loss allowance recognised in profit or loss during the year
Amounts recovered during the year
Foreign Exchange Differences
Closing 31 December
Liquidity risk
2019
$
2018
$
263,318
666,222
(43,756)
(1,316)
884,467
181,245
74,512
-
7,561
263,318
The entity manages liquidity risk my monitoring forecast cash flows and ensuring sufficient cash reserves are on hand to meet
obligations. Refer Note 7.
Maturity analysis of financial liabilities
The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances as the impact of discounting is not significant.
< 6
months
6-12
months
870,151
40,574
6,866
917,591
-
-
116,567
116,567
Between
1 and 2
years
-
-
1,562,484
1,562,484
Between
2 and 5
Years
-
-
627,814
627,814
Total
Contractual
Cash Flows
870,151
40,574
2,313,730
3,224,455
Carrying
Amount
870,151
40,574
1,542,301
2,453,026
< 6
months
1,897,472
8,716
1,906,188
6-12
months
-
17,144
17,144
Between
1 and 2
years
Between
2 and 5
Years
-
-
-
-
162,631
162,631
Total
Contractual
Cash Flows
1,897,472
188,491
2,085,963
Carrying
Amount
1,897,472
188,491
2,085,963
At 31 December 2019
Trade payables
Lease liabilities
Borrowings
At 31 December 2018
Trade payables
Borrowings
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.
64
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
27 CONTINGENT LIABILITIES
There were no contingent liabilities as at the date of this report.
28
INCOME TAX
Major Components of income tax expense:
Accounting profit/(loss) before income tax
Consolidated
2019
$
Consolidated
2018
$
(6,042,631)
(4,795,347)
Income tax expense/(benefit) at the Company's statutory rate of 28.5% (2018:
28.5%)
(1,722,150)
(1,366,674)
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
Effect of overseas tax rates
Deferred tax assets not recognised
Income tax applied to companies in tax loss in overseas jurisdiction
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
-
190,815
18,178
156,703
8,793
29,842
6,718
131,400
96,623
1,083,077
41,468
41,468
(81,811)
-
(40,343)
(275,054)
9,269
-
4,585
1,583
32,633
2,564
1,228,607
11,438
351,049
21,698
21,698
69,881
239
91,818
Consolidated
2019
$
Consolidated
2018
$
-
-
-
52,034
30,189
82,223
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.
65
IMEXHS LTD FINANCIAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
66
IMEXHS LTD FINANCIAL REPORT 2019
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 36 to 66 are in accordance with the Corporations Act 2001 and:
a.
b.
c.
comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
give a true and fair view of the financial position as at 31 December 2019 and of the performance for the financial
year ended on that date of the Company and entity; and
complies with International Financial Reporting Standards as disclosed in note 1.
2.
the Chief Executive Officer and Chief Financial Officer have each declared that:
a.
b.
c.
the financial records of the Company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with Accounting Standards; and
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.
Doug Flynn
Chairman
Dated this 30 March 2020
67
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 statement of financial position as at 31 December 2019, 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 2019 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.
Emphasis of matter - Subsequent event
We draw attention to Note 25 of the financial report, which describes the non-adjusting subsequent
event on the impact of the COVID-19 outbreak on the Group. Our opinion is not modified with respect
to this matter.
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.
68
Revenue recognition
Key audit matter
How the matter was addressed in our audit
The Group recognises revenue in accordance
with AASB 15 Revenue from Contracts with
Customers (AASB 15).
There are complexities and judgements
associated with interpreting key revenue
contracts entered into by the Group against the
requirements of the accounting standard.
Revenue recognition was a key audit matter
due to:
The significance of revenue to
understanding the financial results for
users of the financial report; and
The complexity involved in applying
AASB 15 requirements including the
interpretation and accounting for
contractual terms.
Our audit procedures in respect of this area
included but were not limited to the following:
• Discussing with management and
critically assessing the financial impact of
the revenue standard and the Group’s
revenue recognition policies during the
year;
• 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;
• Assessing a sample of revenue
transactions through comparison to sales
contracts signed by customers;
• 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 the Note 2, Note 3(b) and Note 4 in the
financial report.
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.
69
Carrying Value of Trade Receivables
Key audit matter
How the matter was addressed in our audit
The group’s trade receivables balance as at 31
December 2019 is disclosed in Note 8 to the
financial report.
AASB 9 Financial Instruments (AASB 9) has been
applied by the Group and requires an
impairment measurement framework, referred
to as Expected Credit Losses (ECLs).
Due to the quantum of the assets and the
judgment involved in determining the provision
for ECLs as disclosed in Note 2 to the financial
report, we have determined that the carrying
value of the trade receivables is a key audit
matter.
Our audit procedures in respect of this area
included but were not limited to the following:
• Verifying, on a sample basis, the
recognition of accounts receivable in
accordance with the group’s accounting
policies;
• Re-calculating the impairment of the
portfolio and the provision established by
the entity;
• Confirming the existence of the third
party accounts receivable balances
recorded at year-end;
• Holding discussions with management
regarding their assessment of the
recoverability of trade receivables
balances;
• Assessing the adequacy of the disclosure
in Note 2 and Note 8 to 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 2019, 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.
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.
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.
70
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 17 to 26 of the directors’ report for the
year ended 31 December 2019.
In our opinion, the Remuneration Report of ImExHS Limited, for the year ended 31 December 2019,
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, 30 March 2020
71
IMEXHS LTD FINANCIAL REPORT 2019
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 13 March 2020.
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
13.40%
8.83%
8.71%
5.27%
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 13 March 2020
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
583
138
48
290
634
1,693
42,247
397,286
404,433
14,716,703
1,160,096,517
1,175,657,186
0.00
0.03
0.03
1.25
98.69
100.00
As at 13 March 2020 there were 834 shareholders holding an aggregate of 1,852,400 shares as
unmarketable parcels.
72
IMEXHS LTD FINANCIAL REPORT 2019
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
HSBC CUSTODY NOMINEES (AUSTRALIA ) LIMITED
JAMES WOULFE & CATHERINE MARIA WOULFE
TISIA NOMINEES PTY LTD
OAKTONE NOMINEES PTY LTD
VIRGINIA MARIN MUNOZ
CARMEN CECILIA ARANGO BONNET
JOHN ALEXANDER SANZ RAMIREZ
BANNABY INVESTMENTS PTY LIMITED ,BANNABY SUPER FUND A/C>
OPTIM8 PTY LTD
BARRY ASSAF
SCOTT WALLACE WELLS
KOBIA HOLDINGS PTY LTD
GLIZE SUPER FUND PTY LTD
BNP PARIBAS NOMINEES PT LTD HUB 24 CUSTODIAL SERV LTD DRP
PAUL LOWRY & KIM WATSON
Ordinary shares
Number held
157,525,160
102,437,920
62,009,480
59,391,800
44,441,800
20,741,648
23,525,320
17,275,000
16,000,000
14,542,840
14,542,840
12,681,240
12,500,000
12,454,520
11,100,550
11,000,000
10,000,000
10,000,000
8,642,401
8,302,840
% of total
issued shares
13.40
8.71
5.27
5.05
3.78
3.47
2.00
1.47
1.36
1.24
1.24
1.08
1.06
1.06
0.94
0.94
0.85
0.85
0.74
0.71
649,115,359
55.21
vi)
Restricted Securities
As at 13 March 2020 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
30,000,000 Options expiring 30 June 2021 @ $0.05 escrowed until 3 September 2020
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IMEXHS LTD FINANCIAL REPORT 2019
ASX SUPPLEMENTARY INFORMATION
vii)
Unquoted equity securities
As at 13 March 2020, 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. 12,500,000 Options expiring 30 June 2021 @ $0.0375 – 8 holders
Holders with more than 20%:
Holder name
SCOTT WELLS
Holding
% of total
5,000,000
40.00
D. 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
E. 40,000,000 Options expiring 31 March 2022 @ $0.054 – 1 holder
Holders with more than 20%:
Holder name
DOMATORISARO PTY LTD
Holding
% of total
8,000,000
8,000,000
8,000,000
26.67
26.67
26.67
Holding
% of total
40,000,000
100.00
F. 5,000,000 Options expiring 30 September 2022 @ $0.054 – 4 holders
Holders with more than 20%:
Holder name
JK NOMINEES PTY LTD
DENLIN NOMINEES PTY LTD
TISIA NOMINEES PTY LTD
MALEKULA PROJECTS PTY LTD
Holding
% of total
1,250,000
1,250,000
1,250,000
1,250,000
25.00
25.00
25.00
25.00
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IMEXHS LTD FINANCIAL REPORT 2019
ASX SUPPLEMENTARY INFORMATION
G. 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
H. 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
I.
4,000,000 Options expiring 25 October 2023 @ $0.07 – 1 holder
Holders with more than 20%:
Holder name
THOMAS PASCARELLA
J. 2,000,000 Options expiring 9 December 2023 @ $0.053 – 1 holder
Holders with more than 20%:
Holder name
DOUGLAS LINGARD
K. 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
4,000,000
100.00
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.
75