Jayex Healthcare Ltd
ANNUAL REPORT 2017
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Jayex Healthcare Ltd
31 December 2017
Contents
Corporate directory
Directors' report
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Shareholder information
Independent auditor's report to the members of Jayex Healthcare Ltd
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3
15
16
17
18
19
20
52
53
56
General Information
The financial statements cover Jayex Healthcare Ltd as a consolidated entity consisting of Jayex Healthcare Limited ("the
Company") and the entities it controlled at the end of, or during, the period. The financial statements are presented in
Australian dollars, which is Jayex Healthcare Limited's functional and presentation currency.
Jayex Healthcare Ltd is a for-profit company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Suite 3
53 Coppin Street
Richmond VIC 3121
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 February 2018. The
directors have the power to amend and reissue the financial statements.
1
Jayex Healthcare Ltd
31 December 2017
Contents
Corporate directory
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Jayex Healthcare Ltd
Shareholder information
2
3
15
16
17
18
19
20
52
53
56
General Information
The financial statements cover Jayex Healthcare Ltd as a consolidated entity consisting of Jayex Healthcare Limited ("the
Company") and the entities it controlled at the end of, or during, the period. The financial statements are presented in
Australian dollars, which is Jayex Healthcare Limited's functional and presentation currency.
Jayex Healthcare Ltd is a for-profit company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Suite 3
53 Coppin Street
Richmond VIC 3121
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 February 2018. The
directors have the power to amend and reissue the financial statements.
1
Jayex Healthcare Ltd
Corporate directory
31 December 2017
Directors
Registered office
Principal place of business
Share register
Michael Boyd
Brian Renwick
Agam Jain
Michael Chan
Suite 3
53 Coppin Street
Richmond Victoria 3121
Suite 3
53 Coppin Street
Richmond Victoria 3121
Boardroom Pty Ltd
Level 12, Grosvenor Place
225 George Street
Sydney NSW 2000
Phone: 1300 737 760 (in Australia); +61 29290 9600 (international)
Auditor
Solicitors
Grant Thornton Audit Pty Ltd
Collins Square, Tower 1
727 Collins Street
Melbourne VIC 3008
SWS Lawyers
41-45 Newcomen Street
Newcastle NSW 2300
Stock exchange listing
Jayex Healthcare Ltd shares are listed on the Australian Securities Exchange (ASX
code: JHL)
Website
http://jayexhealthcare.com.au
2
Principal place of business
Suite 3
Jayex Healthcare Ltd
Corporate directory
31 December 2017
Directors
Registered office
Share register
Auditor
Solicitors
Michael Boyd
Brian Renwick
Agam Jain
Michael Chan
Suite 3
53 Coppin Street
Richmond Victoria 3121
53 Coppin Street
Richmond Victoria 3121
Boardroom Pty Ltd
Level 12, Grosvenor Place
225 George Street
Sydney NSW 2000
Grant Thornton Audit Pty Ltd
Collins Square, Tower 1
727 Collins Street
Melbourne VIC 3008
SWS Lawyers
41-45 Newcomen Street
Newcastle NSW 2300
code: JHL)
Phone: 1300 737 760 (in Australia); +61 29290 9600 (international)
Stock exchange listing
Jayex Healthcare Ltd shares are listed on the Australian Securities Exchange (ASX
Website
http://jayexhealthcare.com.au
Jayex Healthcare Ltd
Directors' report
31 December 2017
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Jayex Healthcare Ltd (referred to hereafter as the 'Company' or 'parent entity') and
the entities it controlled at the end of, or during, the period ended 31 December 2017.
Directors
The following persons were directors of Jayex Healthcare Ltd during the whole of the financial period and up to the date of
this report, unless otherwise stated:
Michael Boyd (Chairman)
Brian Renwick (Non-Executive Director)
Agam Jain (Executive Director)
Michael Chan (Non-Executive Director) (appointed 27 March 2017)
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of the development and
provision of healthcare industry service technologies and the development of integrated dispensing automation systems for
the pharmaceutical and healthcare sectors.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial period.
Review of operations
The loss for the consolidated entity after providing for income tax amounted to $2,496,000 (31 December 2016:
$5,063,000).
Jayex operates in the global healthcare services market, primarily in the UK, Ireland and Australia. Founded in 1978, the
company has created several industry-defining products, from the iconic D300 Patient Call Display and Enlighten self-
arrivals, through to data capture and survey systems, along with a range of patient-facing information and call solutions.
2017 was a challenging year for Jayex, as the company faced on-going difficulties with the integration of the Appointuit
product into the other Group technologies, which resulted in the operational and financial results falling behind
expectations in the Australian operations.
In response to the challenges that the company was facing in its Australian operations, on the 23rd May 2017 Nick
Fernando was appointed as Chief Executive Officer (CEO). Nick soon established a re-structuring program to improve on
the current situation. The program started on the 1st June 2017 and was completed on the 31st December 2017. During
this period the company proactively made changes to the operating footprint and the organisational structure of the
company. In 2017 we successfully established our Professional Services Group, Product Management Group and our new
Marketing platform, which included the launch of our new customer engaging Jayex website. We made these changes to
better support our customers and our shareholders, by strengthening our value proposition. With these operational
improvements, Jayex is now better positioned to unlock growth opportunities by creating a stronger product, offered at a
lower cost across the markets that we operate in.
The consolidated entity’s overall revenue for 2017 was approximately $7.5 million. The operations of the consolidated
entity’s United Kingdom-based subsidiary, Jayex Technology Limited (“Jayex UK”), continued to deliver strong revenue
and profits, contributing 86% of overall revenue for the consolidated entity. Jayex UK’s total revenues expressed in GBP
remained steady at approximately £3.85M in 2017, while its GBP EBITDA remained steady at approximately £780K.
However, due to a stronger $A in 2017 compared to 2016, the values of Jayex UK’s revenue and EBITDA converted to $A
were less in 2017 than in 2016.
Jayex UK once again delivered a significant number of multi-site installations for some key Clinical Commission Groups
(CCGs) across England. In all, a total of 259 GP surgeries took delivery of either a Jayex Patient Arrival or Jayex Patient
Calling system under CCG procurement. This was in addition to further systems being ordered individually by Clinics and
GP Surgeries. The increase in sales of Jayex systems over the last 2 years has resulted in more users than ever before
using Jayex systems. Licence sales revenue in 2017 has risen by 15% since 2016, and has grown by 34% since 2015. A
total of 15 new installations and commissions were undertaken in hospitals in the UK and Ireland in 2017 for our Patient
Arrival and Patient Calling systems. Our newly developed Professional Services Group delivered on a number of projects
in 2017, including a Phlebotomy system for two central London hospitals.
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3
Jayex Healthcare Ltd
Directors' report
31 December 2017
Significant changes in the state of affairs
- issued 750,000 shares in the Company upon the exercise of share options in January 2017;
- issued 750,000 shares in the Company upon the exercise of share options in November 2017.
There were no other significant changes in the state of affairs of the consolidated entity during the financial period.
Matters subsequent to the end of the financial period
During January 2018 the Federal Court action served by Australian Medical Consulting Group Pty Ltd (AMCG) and Mr
Gordon Cooper and Ms Rosemary Cooper (the Coopers) upon the Company was concluded with AMCG and the Coopers
discontinuing the proceedings and releasing JHL from all claims. JHL has not paid any settlement sum and each party
agreed to bear their own costs.
On 25 January 2018 the Company amended its Loan Agreement (Agreement) with Covenant Holdings (WA) Pty Ltd
(‘Covenant’), a related entity of the Company’s Chairman and major shareholder, Mr Michael Boyd, to secure further
funding for the Company. Under the revision to the Agreement, Covenant increased the Company’s loan facility by
$170,000 in order to fund the Company’s working capital requirements. The loan facility will bear interest of 12% per
annum with a repayment date of 1 April 2019 and is an unsecured loan.
No other matter or circumstance has arisen since 31 December 2017 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in
future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected results of operations are
as follows:
Our vision at Jayex is to be the undisputed leader in improving patient health outcomes in the markets that we operate in.
We will do this by driving continuous improvements for our customers, through innovation, integrity, customer satisfaction
and teamwork. The restructuring program that took place in 2017 now paves the way for the company to meet its vision of
growth. The investments and changes that the company made in 2017 will support the digital transformation in healthcare
and revolutionise patient care in new and exciting ways. Our healthcare solutions will be delivered on our modern and
innovative healthcare platform. Our solutions will have the ability to save millions of dollars in healthcare spending, whilst
improving patient healthcare outcomes.
Our newly developed platform incorporates the very latest technologies, including cloud based, AI, IoT, Big Data and Data
Analysis. Jayex’s unique understanding of the healthcare market, its decades of experience in this market, and its
technological expertise will ensure that our company goals are achieved.
Our goal is for Jayex UK to grow its healthcare footprint in the UK market as it has done over the past two years and to
continue to be profitable as it has been since its inception in 1978. Jayex Australia will replicate the same business model,
adopted from Jayex UK, to achieve the same level of success and profitability in healthcare.
The business objective for 2018 is to increase revenue and improve operating results. This will be achieved through the
changes that the company made in its organisational structure in 2017. Jayex will accelerate its revenue and profit growth
in 2019 and beyond by capitalising on the new developments and IP that have been created and incorporated into our
platform. These enhancements will deliver superior functionality to our customers in the UK, Australia and beyond.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
Jayex Healthcare Ltd
Directors' report
31 December 2017
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Michael Boyd is the Chairman of the Company and has been involved since its
Michael Boyd
Executive Chairman
B.Comm (UWA) Grad. Dip App Fin
inception in 2004. Based in Melbourne, he has led the corporate structuring of the
Company and the development of the Group’s strategic vision. On a practical level he
has initiated contacts with all stakeholder groups including professional bodies,
regulatory boards, wholesale distributors and pharmacy groups and individuals.
Mr. Boyd has been involved in the creation of new enterprises, both in the private and
public sectors, for over 25 years. Mr. Boyd has been successful in developing and
growing new projects in diverse areas including healthcare, telecommunications and
finance.
Trained as a Chartered Accountant, he was a founding Director and Chairman of
Sonic Healthcare Ltd, now an ASX listed top 50 company. After leaving Sonic he
started Foundation Healthcare, growing it to over 800 healthcare professionals before
it was acquired by Sonic. He was also a founding partner of Iridium Satellite bringing
it out from bankruptcy to now a NASDAQ listed company.
Special responsibilities:
Member of Audit and Risk Committee, member of Remuneration and Nomination
Other current directorships:
Former directorships (last 3 years):
-
-
Interests in shares:
81,822,554 fully paid ordinary shares
Committee
Name:
Title:
Qualifications:
Brian Renwick
Non-Executive Director
MBA, FCA, B.Bus (Accounting) Monash
Experience and expertise:
Mr. Renwick is very broadly experienced across the pharmaceutical and healthcare
sector in Australia. His involvement with sector commenced in finance roles that led
into commercial analysis, marketing and sales. From this broad commercial
experience in the manufacturing end of the supply chain he moved into the
wholesaling segment with various business development roles in retail and hospital
pharmacy. Mr Renwick’s roles broadened into commercial and business development
including as general manager for a corporate pharmacy business. He has completed
two Business Development roles within the CSL Limited group.
With his detailed commercial knowledge and broad experience across the healthcare
segment, Brian has provided consulting advice to Jayex since 2006 and is an
important member of the team.
Other current directorships:
Former directorships (last 3 years):
-
-
Special responsibilities:
Chairman of Audit and Risk Committee, Chairman of Remuneration and Nomination
Interests in shares:
115,000 fully paid ordinary shares
Committee
4
5
Jayex Healthcare Ltd
Directors' report
31 December 2017
Significant changes in the state of affairs
- issued 750,000 shares in the Company upon the exercise of share options in January 2017;
- issued 750,000 shares in the Company upon the exercise of share options in November 2017.
There were no other significant changes in the state of affairs of the consolidated entity during the financial period.
Matters subsequent to the end of the financial period
During January 2018 the Federal Court action served by Australian Medical Consulting Group Pty Ltd (AMCG) and Mr
Gordon Cooper and Ms Rosemary Cooper (the Coopers) upon the Company was concluded with AMCG and the Coopers
discontinuing the proceedings and releasing JHL from all claims. JHL has not paid any settlement sum and each party
agreed to bear their own costs.
On 25 January 2018 the Company amended its Loan Agreement (Agreement) with Covenant Holdings (WA) Pty Ltd
(‘Covenant’), a related entity of the Company’s Chairman and major shareholder, Mr Michael Boyd, to secure further
funding for the Company. Under the revision to the Agreement, Covenant increased the Company’s loan facility by
$170,000 in order to fund the Company’s working capital requirements. The loan facility will bear interest of 12% per
annum with a repayment date of 1 April 2019 and is an unsecured loan.
No other matter or circumstance has arisen since 31 December 2017 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in
future financial years.
as follows:
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected results of operations are
Our vision at Jayex is to be the undisputed leader in improving patient health outcomes in the markets that we operate in.
We will do this by driving continuous improvements for our customers, through innovation, integrity, customer satisfaction
and teamwork. The restructuring program that took place in 2017 now paves the way for the company to meet its vision of
growth. The investments and changes that the company made in 2017 will support the digital transformation in healthcare
and revolutionise patient care in new and exciting ways. Our healthcare solutions will be delivered on our modern and
innovative healthcare platform. Our solutions will have the ability to save millions of dollars in healthcare spending, whilst
improving patient healthcare outcomes.
Our newly developed platform incorporates the very latest technologies, including cloud based, AI, IoT, Big Data and Data
Analysis. Jayex’s unique understanding of the healthcare market, its decades of experience in this market, and its
technological expertise will ensure that our company goals are achieved.
Our goal is for Jayex UK to grow its healthcare footprint in the UK market as it has done over the past two years and to
continue to be profitable as it has been since its inception in 1978. Jayex Australia will replicate the same business model,
adopted from Jayex UK, to achieve the same level of success and profitability in healthcare.
The business objective for 2018 is to increase revenue and improve operating results. This will be achieved through the
changes that the company made in its organisational structure in 2017. Jayex will accelerate its revenue and profit growth
in 2019 and beyond by capitalising on the new developments and IP that have been created and incorporated into our
Jayex Healthcare Ltd
Directors' report
31 December 2017
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
platform. These enhancements will deliver superior functionality to our customers in the UK, Australia and beyond.
Interests in shares:
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
Environmental regulation
law.
Michael Boyd
Executive Chairman
B.Comm (UWA) Grad. Dip App Fin
Michael Boyd is the Chairman of the Company and has been involved since its
inception in 2004. Based in Melbourne, he has led the corporate structuring of the
Company and the development of the Group’s strategic vision. On a practical level he
has initiated contacts with all stakeholder groups including professional bodies,
regulatory boards, wholesale distributors and pharmacy groups and individuals.
Mr. Boyd has been involved in the creation of new enterprises, both in the private and
public sectors, for over 25 years. Mr. Boyd has been successful in developing and
growing new projects in diverse areas including healthcare, telecommunications and
finance.
Trained as a Chartered Accountant, he was a founding Director and Chairman of
Sonic Healthcare Ltd, now an ASX listed top 50 company. After leaving Sonic he
started Foundation Healthcare, growing it to over 800 healthcare professionals before
it was acquired by Sonic. He was also a founding partner of Iridium Satellite bringing
it out from bankruptcy to now a NASDAQ listed company.
-
-
Member of Audit and Risk Committee, member of Remuneration and Nomination
Committee
81,822,554 fully paid ordinary shares
Brian Renwick
Non-Executive Director
MBA, FCA, B.Bus (Accounting) Monash
Mr. Renwick is very broadly experienced across the pharmaceutical and healthcare
sector in Australia. His involvement with sector commenced in finance roles that led
into commercial analysis, marketing and sales. From this broad commercial
experience in the manufacturing end of the supply chain he moved into the
wholesaling segment with various business development roles in retail and hospital
pharmacy. Mr Renwick’s roles broadened into commercial and business development
including as general manager for a corporate pharmacy business. He has completed
two Business Development roles within the CSL Limited group.
With his detailed commercial knowledge and broad experience across the healthcare
segment, Brian has provided consulting advice to Jayex since 2006 and is an
important member of the team.
-
-
Chairman of Audit and Risk Committee, Chairman of Remuneration and Nomination
Committee
115,000 fully paid ordinary shares
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5
Jayex Healthcare Ltd
Directors' report
31 December 2017
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Interests in shares:
Agam Jain
Executive Director
B Sc.
Based in London, Mr Jain has over 30 years’ experience as Managing Director of
Jayex Technology Limited, with extensive hands on experience in mentoring
management teams, sales, international business, CRM and Accounting systems.
He is a graduate in Physics from Imperial College, London and had many years of
sales experience with multinationals in his early career, subsequently progressing to
managing diverse business operations.
Mr Jain has been the founder of several successful companies in IT, finance,
electronics and media.
-
-
Member of Audit and Risk Committee, member of Remuneration and Nomination
Committee
19,213,378 fully paid ordinary shares
Michael Chan (appointed 27 March 2017)
Non-Executive Director
Diploma of Financial Services
Mr Chan has extensive experience in broad based financial services for the past 30
years with hands on knowledge in both consumer and commercial segments.
Michael is the founder and Managing Director at AMG Corporate Pty Ltd, a holder of
an Australian Credit Licence which is primarily a debt advisory business.
Prior to establishing AMG, Michael worked in key roles involved with strategic
business development and marketing at several companies, both in the private and
public sectors.
Michael has had a past affiliation with Make a Wish Foundation and more recently is
the founder and chairman of The Mate Foundation – a men’s health initiative with its
principal purpose to help raise awareness of men’s health diseases, which is due to
launch shortly. He has over the years also undertaken philanthropic work for various
other charities and causes in his community.
-
-
300,000 fully paid ordinary shares
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
transparency
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Ms Melanie Leydin was appointed Company Secretary on 19 August 2015. Ms Leydin graduated from Swinburne
University in 1997, became a Chartered Accountant in 1999 and since February 2000 has been the principal of chartered
accounting firm, Leydin Freyer. Ms Leydin has over 25 years’ experience in the accounting profession and has extensive
experience in relation to public company responsibilities, including ASX and ASIC compliance, control and implementation
of corporate governance, statutory financial reporting, reorganisation of Companies and shareholder relations and is a
director and company secretary for a number of entities listed on the Australian Securities Exchange.
Jayex Healthcare Ltd
Directors' report
31 December 2017
Meetings of directors
Michael Boyd
Brian Renwick
Agam Jain
Michael Chan
committee.
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
period ended 31 December 2017, and the number of meetings attended by each director were:
Full Board
Attended
Held
Remuneration
Remuneration
Audit & Risk
Audit & Risk
& Nomination
& Nomination
Committee
Attended
Committee
Committee
Committee
Held
Attended
Held
10
10
11
8
11
11
11
8
-
1
1
-
1
1
1
-
-
-
-
-
-
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the
delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for
good reward governance practices:
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements
for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and
executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
In past consultation with external remuneration consultants, the Nomination and Remuneration Committee has structured
an executive remuneration framework that is market competitive and complementary to the reward strategy of the
consolidated entity.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
●
●
●
●
●
●
●
●
●
●
●
●
6
7
Jayex Healthcare Ltd
Directors' report
31 December 2017
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
period ended 31 December 2017, and the number of meetings attended by each director were:
Full Board
Attended
Held
Audit & Risk
Committee
Attended
Audit & Risk
Committee
Held
Remuneration
& Nomination
Committee
Attended
Remuneration
& Nomination
Committee
Held
Michael Boyd
Brian Renwick
Agam Jain
Michael Chan
10
10
11
8
11
11
11
8
-
1
1
-
1
1
1
-
-
-
-
-
-
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the
delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for
good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements
for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and
executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
In past consultation with external remuneration consultants, the Nomination and Remuneration Committee has structured
an executive remuneration framework that is market competitive and complementary to the reward strategy of the
consolidated entity.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
7
Jayex Healthcare Ltd
Directors' report
31 December 2017
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure
non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are
determined independently to the fees of other non-executive directors based on comparative roles in the external market.
The chairman is not present at any discussions relating to the determination of his own remuneration. Non-executive
directors do not receive share options or other incentives.
Directors may also be reimbursed for travel and other expenses reasonably incurred in attending to the Company’s affairs.
Non-executive directors may be paid such additional or special remuneration as the directors decide is appropriate where a
director performs extra work or services which are not in the capacity as Director of the Company or a subsidiary.
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the
executive.
Consolidated entity performance and link to remuneration
The remuneration of the Non-Executive Directors is not linked to the performance, share price or earnings of the
consolidated entity.
Remuneration for certain executives is expected to be directly linked to the performance of the consolidated entity. As
noted above the Company is currently reviewing proposals for the STI and LTI programs, which may be linked to the
performance, share price or earnings of the consolidated entity.
Refer to the section 'Additional information' below for details of the earnings and total shareholders return for the last five
years or, if the Company has been listed on the ASX for less than five years, the period from ASX listing to the date of this
report.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
Unless otherwise noted, the named persons were key management personnel for the whole of the period ended 31
December 2017.
8
Jayex Healthcare Ltd
Directors' report
31 December 2017
The key management personnel of the consolidated entity consisted of the following directors of Jayex Healthcare Ltd:
● Michael Boyd (Chairman)
●
●
● Michael Chan (Non-Executive Director) - appointed 27 March 2017
Brian Renwick (Non-Executive Director)
Agam Jain (Executive Director)
And the following persons:
●
●
Nick Fernando (Chief Executive Officer)
Tony Panther (Chief Financial Officer)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees **
$
Cash
bonus
$
Cash
allowance
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled -
options
$
60,000
30,000
22,500
54,318
226,853
185,000
578,671
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,575
17,575
-
-
-
-
-
-
-
Total
$
60,000
30,000
22,500
54,318
226,853
202,575
596,246
-
-
-
-
-
-
-
2017
Non-Executive Directors:
Mr M Boyd (Chair)
Mr B Renwick
Mr M Chan*
Executive Directors:
Mr A Jain
Other Key Management
Personnel:
Mr N Fernando
Mr T Panther
*
**
Mr Chan was appointed on 27 March 2017
As from 1 February 2017 the Mr Boyd and Mr Jain have not drawn cash fees for their services and these fees have
been accrued. Mr Renwick has not drawn cash fees for his services as from 1 July 2017 and Mr Chan has not drawn
cash fees for his services as from 1 August 2017 and their respective fees have been accrued.
All directors have agreed that, as from 1 July 2017 until further notice, any accrued and ongoing directors’ fees will be
paid by way of issues of the Company’s shares in lieu of cash payments, subject to obtaining requisite shareholder
approvals.
9
Jayex Healthcare Ltd
Directors' report
31 December 2017
2016
Non-Executive Directors:
Mr B Renwick
Mr J Allinson*
Mr S Tanner*
Executive Directors:
Mr M Boyd
Mr A Jain
Other Key Management
Personnel:
Mr N Fernando
Mr T Panther**
Mr C Knox**
Mr R Mantel***
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
30,000
17,500
35,000
180,000
49,213
246,292
65,352
101,156
90,000
814,513
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000
10,000
-
6,208
9,610
8,550
24,368
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
17,500
35,000
180,000
49,213
-
-
-
128,000
128,000
246,292
71,560
110,766
236,550
976,881
Mr Allinson resigned 29 July 2016; Mr Tanner resigned 12 July 2016
*
** Mr Knox was appointed as Chief Financial Officer 1 February 2016 and resigned 17 August 2016; Mr Panther was
appointed as Chief Financial Officer 8 August 2016.
*** Mr Mantel changed roles within the company effective 1 July 2016 and ceased to be a member of key management
personnel as from that date. His remuneration as disclosed relates only to the period during which he was a member
of key management personnel.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mr M Boyd
Mr B Renwick
Mr M Chan
Mr J Allinson
Mr S Tanner
Executive Directors:
Mr M Boyd
Mr M Jain
Other Key Management
Personnel:
Mr N Fernando
Mr T Panther
Mr C Knox
Mr R Mantel
Fixed remuneration
2016
2017
At risk - STI
At risk - LTI
2017
2016
2017
2016
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54%
100%
100%
100%
-
-
-
100%
100%
100%
-
-
-
100%
-
100%
100%
100%
100%
100%
100%
100%
46%
10
Jayex Healthcare Ltd
Directors' report
31 December 2017
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Nick Fernando
Chief Executive Officer, Jayex Technology Limited
Effective commencement date with Jayex Healthcare Limited Group - 15 December
2015
No fixed term. Each party may terminate the agreement by giving one months'
notice. The Company may make payment in lieu of part of all of the notice period.
Base salary £135,000 per annum.
Tony Panther
Chief Financial Officer
8 August 2016
No fixed term. Each party may terminate the agreement by giving three months'
notice.
Base salary at rate of $185,000 per annum plus superannuation at 9.5%
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the years
ended 31 December 2017 or 31 December 2016.
The Board has agreed in principle to accept directors' in shares in lieu of cash payments with effect from 1 July 2017,
subject to necessary shareholder approval.
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 31 December 2017.
A grant of options to Mr R Mantel was made during the previous financial year on 2 February 2016 in accordance with an
executive service agreement made prior to 31 December 2015. Accordingly a relevant amount of the options was
recorded as an expense during the previous financial year and is included in the details of Mr Mantel's remuneration for
that period disclosed in this report. Mr Mantel's role with the Group changed as from 1 July 2016 and he therefore ceased
as a member of key management personnel as from that date. Accordingly the amount of the relevant options expense for
the period up to that date is included in the details of Mr Mantel's prior period remuneration disclosed in this report.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the period ended 31 December 2017 and the previous year are set out below:
Name
Mr R Mantel
Number of
options
granted
during the
period
2017
Number of
options
granted
during the
period
2016
Number of
options
vested
during the
period
2017
Number of
options
vested
during the
period
2016
-
2,500,000
-
1,750,000
11
Jayex Healthcare Ltd
Directors' report
31 December 2017
Additional information
The earnings of the consolidated entity for the two years to 31 December 2017 are summarised below:
Sales revenue
EBITDA
EBIT
Loss after income tax
2017
$'000
2016
$'000
7,503
(1,919)
(2,437)
(2,496)
8,747
(4,555)
(5,346)
(5,063)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2017
2016
2015
Share price at financial year end (cents)
1.6
5.0
30.0
As the Company was first listed on the Australian Securities Exchange (ASX) on 17 December 2015, there is limited
relevant information regarding the consolidated entity's earnings and performance for past financial years. The tables
above show, for information purposes:
- earnings data for the full financial years since the Company's ASX listing; and
- the closing market price of the Company's shares on the ASX on the last day of the reporting periods since the
Company's ASX listing.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial period by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Mr M Boyd
Mr B Renwick
Mr A Jain
Mr M Chan
Balance at
the start of
the period
Received
as part of
remuneration
Shares
acquired
Disposals/
other*
Balance at
the end of
the period
81,487,385
115,000
19,213,378
-
100,815,763
-
-
-
-
-
335,169
-
-
150,000
485,169
81,822,554
-
115,000
-
19,213,378
-
150,000
300,000
150,000 101,450,932
*
Includes shares held when the person commenced or ceased as a member of key management personnel.
Other transactions with key management personnel and their related parties
During the financial period:
- loans were made the Company's chairman to the consolidated entity; and
- payments of rental of premises were made to a related entity of a director of the consolidated entity.
Details of these transactions are disclosed in note 29 of the accompanying financial statements.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Jayex Healthcare Ltd under option at the date of this report are as follows:
Grant date
2 February 2016
Expiry date
2 February 2019
12
Exercise
price
Number
under option
$0.00
250,000
The earnings of the consolidated entity for the two years to 31 December 2017 are summarised below:
Jayex Healthcare Ltd
Directors' report
31 December 2017
Additional information
Sales revenue
EBITDA
EBIT
Loss after income tax
Jayex Healthcare Ltd
Directors' report
31 December 2017
2017
$'000
2016
$'000
7,503
(1,919)
(2,437)
(2,496)
8,747
(4,555)
(5,346)
(5,063)
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Jayex Healthcare Ltd were issued during the period ended 31 December 2017 and up to
the date of this report on the exercise of options granted:
Date options granted
2 February 2016
Exercise
price
Number of
shares issued
$0.00
1,500,000
2017
2016
2015
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial period, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
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.
Proceedings on behalf of the 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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial period by the
auditor are outlined in note 27 to the financial statements.
The directors are satisfied that the provision of non-audit services 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 factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end (cents)
1.6
5.0
30.0
As the Company was first listed on the Australian Securities Exchange (ASX) on 17 December 2015, there is limited
relevant information regarding the consolidated entity's earnings and performance for past financial years. The tables
above show, for information purposes:
- earnings data for the full financial years since the Company's ASX listing; and
- the closing market price of the Company's shares on the ASX on the last day of the reporting periods since the
Company's ASX listing.
Shareholding
Additional disclosures relating to key management personnel
The number of shares in the Company held during the financial period by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Mr M Boyd
Mr B Renwick
Mr A Jain
Mr M Chan
Balance at
the start of
the period
Received
as part of
remuneration
Shares
acquired
Disposals/
other*
Balance at
the end of
the period
81,487,385
115,000
19,213,378
-
100,815,763
-
-
-
-
-
335,169
-
-
150,000
485,169
-
-
-
81,822,554
115,000
19,213,378
300,000
150,000
150,000 101,450,932
*
Includes shares held when the person commenced or ceased as a member of key management personnel.
Other transactions with key management personnel and their related parties
During the financial period:
- loans were made the Company's chairman to the consolidated entity; and
- payments of rental of premises were made to a related entity of a director of the consolidated entity.
Details of these transactions are disclosed in note 29 of the accompanying financial statements.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Jayex Healthcare Ltd under option at the date of this report are as follows:
Grant date
2 February 2016
Expiry date
2 February 2019
Exercise
price
Number
under option
$0.00
250,000
Officers of the Company who are former partners of Grant Thornton Audit Pty Ltd
There are no officers of the Company who are former partners of Grant Thornton Audit Pty Ltd.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 15.
12
13
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 advocate for the Company or jointly sharing economic risks and rewards.
The directors are of the opinion that the services as disclosed in note 27 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
●
Jayex Healthcare LtdDirectors' report31 December 201714AuditorGrant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a)of the Corporations Act 2001.On behalf of the directorsMichael BoydChairman27February2018Melbourne Collins Square, Tower 1
727 Collins Street
Docklands Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
to The Directors of Jayex Healthcare Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of Jayex Healthcare Limited for the year ended 31 December 2017, I declare that, to
the best of my knowledge and belief, there have been:
a
No contraventions of the auditor independence requirements of the Corporations Act 2001
in relation to the audit; and
b
No contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B A Mackenzie
Partner - Audit & Assurance
Melbourne, 27 February 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
15
Jayex Healthcare LtdDirectors' report31 December 201714AuditorGrant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a)of the Corporations Act 2001.On behalf of the directorsMichael BoydChairman27February2018Melbourne Jayex Healthcare Ltd
Statement of profit or loss and other comprehensive income
For the period ended 31 December 2017
Revenue
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Professional services expenses
Depreciation and amortisation expense
Impairment of assets
Consultancy expenses
Travel expenses
Marketing expenses
Net foreign exchange loss
Rental expense
Other expenses
Finance costs
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit for the period attributable to the owners of Jayex
Healthcare Ltd
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive loss for the period, net of tax
Total comprehensive loss for the period attributable to the owners of Jayex
Healthcare Ltd
Basic earnings per share
Diluted earnings per share
Consolidated
Note
2017
$'000
2016
$'000
4
5
6
6
14
6
7
7,503
-
(2,097)
(4,562)
(683)
(518)
-
(511)
(246)
(246)
(138)
(326)
(614)
(184)
8,750
2,116
(2,564)
(5,388)
(749)
(791)
(4,085)
(614)
(323)
(309)
(282)
(288)
(816)
(21)
(2,622)
(5,364)
126
301
(2,496)
(5,063)
(76)
(76)
(1,730)
(1,730)
(2,572)
(6,793)
Cents
Cents
34
34
(1.6)
(1.6)
(3.3)
(3.3)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
Jayex Healthcare Ltd
Statement of profit or loss and other comprehensive income
For the period ended 31 December 2017
Jayex Healthcare Ltd
Statement of financial position
As at 31 December 2017
Consolidated
Note
2017
$'000
2016
$'000
Consolidated
Note
2017
$'000
2016
$'000
Revenue
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Professional services expenses
Depreciation and amortisation expense
Impairment of assets
Consultancy expenses
Travel expenses
Marketing expenses
Net foreign exchange loss
Rental expense
Other expenses
Finance costs
Loss before income tax benefit
Income tax benefit
Healthcare Ltd
Loss after income tax benefit for the period attributable to the owners of Jayex
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive loss for the period, net of tax
Total comprehensive loss for the period attributable to the owners of Jayex
Healthcare Ltd
Basic earnings per share
Diluted earnings per share
4
5
6
6
14
6
7
7,503
-
-
(2,097)
(4,562)
(683)
(518)
(511)
(246)
(246)
(138)
(326)
(614)
(184)
8,750
2,116
(2,564)
(5,388)
(749)
(791)
(4,085)
(614)
(323)
(309)
(282)
(288)
(816)
(21)
(2,622)
(5,364)
126
301
(2,496)
(5,063)
(76)
(76)
(1,730)
(1,730)
(2,572)
(6,793)
Cents
Cents
34
34
(1.6)
(1.6)
(3.3)
(3.3)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Receivables
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Employee benefits
Provisions
Other
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1,015
1,262
314
95
2,686
50
83
9,293
9,426
1,334
1,122
359
65
2,880
43
94
9,508
9,645
12,112
12,525
1,256
9
77
303
1,600
3,245
2,885
827
3,712
6,957
5,155
1,470
620
60
278
1,532
3,960
-
934
934
4,894
7,631
25,420
(1,793)
(18,472)
24,940
(1,333)
(15,976)
5,155
7,631
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
The above statement of financial position should be read in conjunction with the accompanying notes
17
Jayex Healthcare Ltd
Statement of changes in equity
For the period ended 31 December 2017
Jayex Healthcare Ltd
Statement of cash flows
For the period ended 31 December 2017
Consolidated
Issued
capital
$'000
Options
reserve
$'000
Foreign
exchange Accumulated
reserve
$'000
losses
$'000
Total equity
$'000
Balance at 1 January 2016
24,588
448
(49)
(10,913)
14,074
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Loss after income tax benefit for the period
Other comprehensive loss for the period, net of
tax
Total comprehensive loss for the period
Transactions with owners in their capacity as
owners:
Share-based payments (note 35)
Exercise of options
Balance at 31 December 2016
Consolidated
-
-
-
-
-
-
-
(5,063)
(5,063)
(1,730)
-
(1,730)
Interest received
(1,730)
(5,063)
(6,793)
Interest and other finance costs paid
Net cash used in operating activities
-
352
24,940
350
(352)
446
-
-
-
-
350
-
(1,779)
(15,976)
7,631
Issued
capital
$'000
Options
reserve
$'000
Foreign
exchange Accumulated
reserve
$'000
losses
$'000
Total equity
$'000
Balance at 1 January 2017
24,940
446
(1,779)
(15,976)
7,631
Loss after income tax benefit for the period
Other comprehensive loss for the period, net of
tax
Total comprehensive loss for the period
Transactions with owners in their capacity as
owners:
Share-based payments (note 35)
Exercise of options
-
-
-
-
-
-
-
480
96
(480)
-
(76)
(76)
-
-
(2,496)
(2,496)
-
(76)
(2,496)
(2,572)
-
-
96
-
Balance at 31 December 2017
25,420
62
(1,855)
(18,472)
5,155
Consolidated
Note
2017
$'000
2016
$'000
8,789
(10,991)
10,747
(13,028)
(2,202)
(2,281)
(2,341)
(2,285)
(139)
-
-
(17)
(223)
(240)
2,955
(670)
-
2,285
(296)
1,334
(23)
1,015
3
(7)
(1,196)
(16)
(168)
(1,380)
600
(5)
(28)
567
(3,098)
4,637
(205)
1,334
Cash flows from investing activities
Payment for business acquisitions (net of cash acquired upon acquisitions)
Payments for property, plant and equipment
Payments for intangibles
33
13
14
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Mortgage payments
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial period
8
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
The above statement of cash flows should be read in conjunction with the accompanying notes
19
Jayex Healthcare Ltd
Statement of changes in equity
For the period ended 31 December 2017
Jayex Healthcare Ltd
Statement of cash flows
For the period ended 31 December 2017
Consolidated
Note
2017
$'000
2016
$'000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Net cash used in operating activities
350
-
Cash flows from investing activities
Payment for business acquisitions (net of cash acquired upon acquisitions)
Payments for property, plant and equipment
Payments for intangibles
33
13
14
Balance at 1 January 2017
24,940
446
(1,779)
(15,976)
7,631
(1,779)
(15,976)
7,631
Issued
capital
$'000
Options
reserve
$'000
exchange Accumulated
Foreign
reserve
$'000
losses
$'000
Total equity
$'000
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Mortgage payments
Net cash from financing activities
Total comprehensive loss for the period
(2,496)
(2,572)
Cash and cash equivalents at the end of the financial period
8
(2,496)
(2,496)
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
8,789
(10,991)
10,747
(13,028)
(2,202)
-
(139)
(2,281)
3
(7)
(2,341)
(2,285)
-
(17)
(223)
(240)
2,955
(670)
-
2,285
(296)
1,334
(23)
1,015
(1,196)
(16)
(168)
(1,380)
600
(5)
(28)
567
(3,098)
4,637
(205)
1,334
Consolidated
Issued
capital
$'000
Options
reserve
$'000
exchange Accumulated
Foreign
reserve
$'000
losses
$'000
Total equity
$'000
Balance at 1 January 2016
24,588
448
(49)
(10,913)
14,074
Loss after income tax benefit for the period
Other comprehensive loss for the period, net of
tax
(5,063)
(5,063)
(1,730)
(1,730)
Total comprehensive loss for the period
(1,730)
(5,063)
(6,793)
Transactions with owners in their capacity as
owners:
Share-based payments (note 35)
Exercise of options
Balance at 31 December 2016
352
24,940
350
(352)
446
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(76)
(76)
-
-
-
-
-
-
(76)
96
-
Transactions with owners in their capacity as
owners:
Share-based payments (note 35)
Exercise of options
480
96
(480)
Balance at 31 December 2017
25,420
62
(1,855)
(18,472)
5,155
Consolidated
Loss after income tax benefit for the period
Other comprehensive loss for the period, net of
tax
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
The above statement of cash flows should be read in conjunction with the accompanying notes
19
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The working capital position as at 31 December 2017 of the consolidated entity, as disclosed in the statement of financial
position, is an apparent excess of current liabilities over current assets of $559,000 (2016: $1,080,000). However, the
current liabilities as at 31 December 2017 contain a number of liability accounts, including provision accounts, revenue
received in advance accounts and unearned revenue accounts, which represent the results of accounting adjustments and
do not represent amounts currently payable, or expected to become payable, to third parties. If these liability accounts are
removed from the calculation of working capital at 31 December 2017, the adjusted working capital has a surplus of
approximately $1,344,000.
The cash balance at 31 December 2017 was $1,015,000 (2016: $1,334,000).
The consolidated entity incurred a net loss after tax for the financial year ended 31 December 2017 of $2,496,000 (financial
year ended 31 December 2016: $5,063,000) and had net cash outflows from operating activities of $2,341,000 (financial
year ended 31 December 2016: $2,285,000).
Notwithstanding these results, the directors believe that the company will be able to continue as a going concern and as a
result the financial statements have been prepared on a going concern basis. The accounts have been prepared on the
assumption that the company is a going concern for the following reasons:
●
●
●
●
●
●
the operating and financial results of the consolidated entity in the 2017 financial year continued to be adversely
affected by integration issues arising from the Appointuit acquisition. The Board is confident that those integration
issues will not recur in the coming financial year and expects improved operational and financial performance;
the consolidated entity's main product, the Enlighten system, remains viable and competitive, and is capable of further
technical development and improvement and therefore remains an important source of profitable and cash-generating
activity for the consolidated entity;
the consolidated entity has undertaken, and is continuing to carry out, organisational restructuring with the objective of
minimising costs without compromising revenue and cash-generating capacity. These measures have already
generated cost savings, with further savings expected to be made in the forthcoming financial year;
the ability of the consolidated entity to further scale back parts of its operations and reduce costs if required;
the Board is of the opinion that the consolidated entity has, or shall have access to, sufficient funds to meet planned
corporate activities and working capital requirements; and
as the Company is an ASX-listed entity, the consolidated entity has the ability to raise additional funds if required.
This financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that might be necessary should the Company not continue as a
going concern.
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').
20
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The working capital position as at 31 December 2017 of the consolidated entity, as disclosed in the statement of financial
position, is an apparent excess of current liabilities over current assets of $559,000 (2016: $1,080,000). However, the
current liabilities as at 31 December 2017 contain a number of liability accounts, including provision accounts, revenue
received in advance accounts and unearned revenue accounts, which represent the results of accounting adjustments and
do not represent amounts currently payable, or expected to become payable, to third parties. If these liability accounts are
removed from the calculation of working capital at 31 December 2017, the adjusted working capital has a surplus of
approximately $1,344,000.
The cash balance at 31 December 2017 was $1,015,000 (2016: $1,334,000).
The consolidated entity incurred a net loss after tax for the financial year ended 31 December 2017 of $2,496,000 (financial
year ended 31 December 2016: $5,063,000) and had net cash outflows from operating activities of $2,341,000 (financial
year ended 31 December 2016: $2,285,000).
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 2.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Jayex Healthcare Ltd
('Company' or 'parent entity') as at 31 December 2017 and the results of all subsidiaries for the period then ended. Jayex
Healthcare Ltd and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'. Details
of subsidiaries are included in Note 31.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity 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 consolidated entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Notwithstanding these results, the directors believe that the company will be able to continue as a going concern and as a
result the financial statements have been prepared on a going concern basis. The accounts have been prepared on the
assumption that the company is a going concern for the following reasons:
Foreign currency translation
The financial statements are presented in Australian dollars, which is Jayex Healthcare Ltd's functional and presentation
currency.
●
●
●
●
●
●
the operating and financial results of the consolidated entity in the 2017 financial year continued to be adversely
affected by integration issues arising from the Appointuit acquisition. The Board is confident that those integration
issues will not recur in the coming financial year and expects improved operational and financial performance;
the consolidated entity's main product, the Enlighten system, remains viable and competitive, and is capable of further
technical development and improvement and therefore remains an important source of profitable and cash-generating
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
activity for the consolidated entity;
the consolidated entity has undertaken, and is continuing to carry out, organisational restructuring with the objective of
minimising costs without compromising revenue and cash-generating capacity. These measures have already
generated cost savings, with further savings expected to be made in the forthcoming financial year;
the ability of the consolidated entity to further scale back parts of its operations and reduce costs if required;
the Board is of the opinion that the consolidated entity has, or shall have access to, sufficient funds to meet planned
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
corporate activities and working capital requirements; and
as the Company is an ASX-listed entity, the consolidated entity has the ability to raise additional funds if required.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
This financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that might be necessary should the Company not continue as a
going concern.
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').
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue
can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the goods, the
risks and rewards are transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue are
net of sales returns and trade discounts.
20
21
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Sale of contracted services
Revenue from sales of contracted software services is recognised on a basis reflecting the pattern of the provision of those
services to the client and the relative costs thereof. These include: initial setting up of those services, such as the provision,
delivery, installation and commissioning of on-site kiosks to deliver the software services, initial software preparation and
systems integration, software costs and training; and ongoing supply of software, maintenance and client service. Where
contract fees are invoiced at the commencement of the contract period, the component of the fees representing initial set
up services are recognised as revenue at that time and where, for accounting purposes, such initial service provision takes
the accounting form of the provision of a finance lease, the relevant revenue is recognised at the commencement of the
contract. Any remaining fees representing the provision of future services, including ongoing provision of software,
maintenance and customer support, are brought to account as a revenue received in advance liability in the statement of
financial position and the relevant revenue is recognised on a straight line basis across the term of the contract.
Rendering of services
Rendering of services revenue from computer maintenance/service fees is recognised by reference to the stage of
completion of the contracts.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of
the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the
trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows
relating to short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
22
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Inventories
Stock on hand is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Motor vehicles
Computer equipment
Office equipment
Furniture and fittings
4 - 5 years
3 years
3 - 5 years
4 - 5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the
risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower,
the present value of minimum lease payments. Lease payments are allocated between the principal component of the
lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's
useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtain ownership at the end
of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease.
23
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition.
Software
Intangible assets acquired separately are initially recognised at cost.
Intangible assets with indefinite useful lives are not amortised, but treated for impairment annually, either individually or at
the cash generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute
to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and
systems. Costs capitalised include external direct costs of materials and service and direct payroll and payroll related
costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis generally over 5-7 years.
IT development costs include only those costs directly attributable to the development phase and are only recognised
following completion of technical feasibility and where the Group has an intention and ability to use the asset.
When these assets are acquired as part of a business combination they are recognised separately from goodwill. The
assets are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. Amortisation
expense is included in depreciation and amortisation expense in the Statement of profit or loss and other comprehensive
income.
Customer relationships
The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the
difference between net disposal proceeds and the carrying amount of the intangible asset.
The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition
date).
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount
recognised for any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purposes of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the
Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or
loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of
the operation disposed of and the portion of the cash generating unit retained.
form a cash-generating unit.
Provisions
Patents and trademarks
All patent and trademark costs for the year are capitalised in the statement of financial position at cost. The patents and
trademarks have not yet commenced to be amortised as the technology related to the relevant patents and trademarks is
still under development and has not yet reached the stage where it is ready for use by the Company as intended by
management.
When these assets are acquired as part of a business combination they are recognised separately from goodwill. The
assets are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis generally over the assets’ estimated useful lives of 10 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit.
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
are settled.
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
24
25
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute
to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and
systems. Costs capitalised include external direct costs of materials and service and direct payroll and payroll related
costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis generally over 5-7 years.
IT development costs include only those costs directly attributable to the development phase and are only recognised
following completion of technical feasibility and where the Group has an intention and ability to use the asset.
When these assets are acquired as part of a business combination they are recognised separately from goodwill. The
assets are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses.
Customer relationships
When these assets are acquired as part of a business combination they are recognised separately from goodwill. The
assets are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis generally over the assets’ estimated useful lives of 10 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit.
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
25
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or 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, together with non-vesting conditions that do
not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
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.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
26
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or 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, together with non-vesting conditions that do
not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
from the proceeds.
Business combinations
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair
value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based
on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Jayex Healthcare Ltd, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial period, adjusted for share splits or bonus elements in ordinary shares issued during the financial
period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
26
27
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations issued, not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 31 December
2017. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and
Interpretations, most relevant to the consolidated entity, are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities of
the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional
new disclosures. The consolidated entity will adopt this standard from 1 January 2018. The adoption of this standard is not
expected to have a material impact on the consolidated entity.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or
implied) to be identified, together with the separate performance obligations within the contract; determine the transaction
price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate
performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation
approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied.
Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance
obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is
satisfied when the service has been provided, typically for promises to transfer services to customers. For performance
obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue
should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's
statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship
between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required
to enable users to understand the contracts with customers; the significant judgements made in applying the guidance to
those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated
entity will adopt this standard from 1 January 2018. The adoption of this standard is not expected to have a material
impact on the consolidated entity.
28
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Note 1. Significant accounting policies (continued)
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations issued, not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 31 December
2017. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and
Interpretations, most relevant to the consolidated entity, are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities of
the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional
new disclosures. The consolidated entity will adopt this standard from 1 January 2018. The adoption of this standard is not
expected to have a material impact on the consolidated entity.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or
implied) to be identified, together with the separate performance obligations within the contract; determine the transaction
price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate
performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation
approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied.
Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance
obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is
satisfied when the service has been provided, typically for promises to transfer services to customers. For performance
obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue
should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's
statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship
between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required
to enable users to understand the contracts with customers; the significant judgements made in applying the guidance to
those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated
entity will adopt this standard from 1 January 2018. The adoption of this standard is not expected to have a material
impact on the consolidated entity.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019.
This standard:
- replaces AASB 117 Leases and some lease-related Interpretations;
- requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low value asset leases;
- provides new guidance on the application of the definition of lease and on sale and lease back accounting;
- largely retains the existing lessor accounting requirements in AASB 117;
- requires new and different disclosures about leases.
The consolidated entity will adopt this standard from 1 January 2019. The entity is yet to undertake a detailed assessment
of the impact of AASB 16. However, based on the entity’s preliminary assessment, the likely impact on the first time
adoption of the Standard for the year ending 31 December 2019 includes:
- there will be a significant increase in lease assets and financial liabilities recognised on the balance sheet;
- the reported equity will reduce as the carrying amount of lease assets will reduce more quickly than the carrying amount
of lease liabilities;
- EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit interest in lease
payments for former off balance sheet leases will be presented as part of finance costs rather than being included in
operating expenses; and
- Operating cash outflows will be lower and financing cash outflows will be higher in the statement of cash flows as
principal repayments on all lease liabilities will now be included in financing activities rather than operating activities.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Estimation of useful lives of assets (Notes 13 and 14)
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives
are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold
will be written off or written down.
Goodwill and other indefinite life intangible assets (Note 14)
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the
accounting policy stated in note 1. The recoverable amounts of cash-generating units have been determined based on
value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on
the current cost of capital and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets (Note 14)
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that
may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves
fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
28
29
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Note 3. Operating segments (continued)
Revenue recognition - Primary sales (Note 4)
Recognition of revenue on sales of Enlighten subscriptions to primary care customers reflects the expected pattern of
provision of relevant goods and services pursuant to those subscription contracts. Management have determined that the
value of goods and services provided to customers at the commencement of those contracts reflects 80 to 85 percent of
the total value of services to be provided over the life of those subscription contracts, with the remaining 15 to 20 percent of
the total contract service value being provided over the three year term of the respective contracts. Accordingly, 80 to 85
percent of the value of those sales is recognised as revenue at the inception of the contracts, while the remaining 15 to 20
percent is recognised on a straight line basis over the three year lives of the contracts. Where a kiosk is provided to a
customer in connection with the provision of Enlighten subscriptions, the ownership of the kiosk effectively remains with the
consolidated entity and the arrangement has the accounting nature of a lease. Management have assessed the lease
criteria and have determined these transactions to in in the nature of a finance lease as opposed to an operating lease,
meaning that the relevant revenue is able to be recognised at the inception of the contract.
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into two operating segments: Australia and United Kingdom (UK). These operating
segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the
Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation), excluding capital-raising
expenses and share-based payments. The accounting policies adopted for internal reporting to the CODM are consistent
with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
No changes to the policy above have occurred during the financial year.
Intersegment transactions
Intersegment transactions were made at market rates. The Australian operating segment charges a management fee to
the United Kingdom operating segment. Intersegment transactions are eliminated on consolidation.
Revenue
Major customers
The consolidated entity does not have a major customer that contributes more than 10% or more to the consolidated
entity's revenue.
Total reportable segment revenues
7,503
8,747
Operating segment information
Consolidated December 2017
Revenue
Sales to external customers
Total sales revenue
Other revenue
Segment operating expenses
EBITDA
Australia
$'000
United
Kingdom
$'000
Total reportable
segments
$'000
6,465
6,465
-
(5,263)
1,202
7,503
7,503
107
(9,434)
(1,824)
1,038
1,038
107
(4,171)
(3,026)
30
Segment operating expenses
(5,377)
(5,761)
(11,138)
The total Revenue and Loss after income tax presented in the Consolidated Entity's operating
segments reconcile to the corresponding key financial figures as presented in its Statement of profit or
loss and other comprehensive income as follows:
Australia
$'000
United
Kingdom
$'000
Total reportable
segments
$'000
8,747
8,747
155
2,116
(4,085)
(4,205)
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Consolidated December 2016
Revenue
Sales to external customers
Total sales revenue
Other revenue
Fair value adjustment to financial liabilities
Impairment of goodwill
EBITDA
7,028
7,028
1,267
-
-
-
3
-
(4,205)
3
(791)
(350)
(21)
301
1,719
1,719
155
2,116
(4,085)
(5,472)
-
-
-
(518)
(96)
(184)
126
31
31 December
31 December
2017
$'000
2016
$'000
7,503
8,750
31 December
31 December
2017
$'000
2016
$'000
Total reportable segment EBITDAs
(1,824)
Interest income
Other revenue
Group revenues
Profit or loss
Interest income
Depreciation and amortisation expense
Share-based payments expense
Interest expense
Income tax (expense)/benefit
Group profit/(loss) after income tax
expense/benefit
(2,496)
(5,063)
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into two operating segments: Australia and United Kingdom (UK). These operating
segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the
Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation), excluding capital-raising
expenses and share-based payments. The accounting policies adopted for internal reporting to the CODM are consistent
with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
No changes to the policy above have occurred during the financial year.
The consolidated entity does not have a major customer that contributes more than 10% or more to the consolidated
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Note 3. Operating segments (continued)
Revenue recognition - Primary sales (Note 4)
Recognition of revenue on sales of Enlighten subscriptions to primary care customers reflects the expected pattern of
provision of relevant goods and services pursuant to those subscription contracts. Management have determined that the
value of goods and services provided to customers at the commencement of those contracts reflects 80 to 85 percent of
the total value of services to be provided over the life of those subscription contracts, with the remaining 15 to 20 percent of
the total contract service value being provided over the three year term of the respective contracts. Accordingly, 80 to 85
percent of the value of those sales is recognised as revenue at the inception of the contracts, while the remaining 15 to 20
Consolidated December 2016
Revenue
percent is recognised on a straight line basis over the three year lives of the contracts. Where a kiosk is provided to a
Sales to external customers
customer in connection with the provision of Enlighten subscriptions, the ownership of the kiosk effectively remains with the
consolidated entity and the arrangement has the accounting nature of a lease. Management have assessed the lease
Total sales revenue
criteria and have determined these transactions to in in the nature of a finance lease as opposed to an operating lease,
meaning that the relevant revenue is able to be recognised at the inception of the contract.
Australia
$'000
United
Kingdom
$'000
Total reportable
segments
$'000
1,719
1,719
7,028
7,028
8,747
8,747
Other revenue
155
-
155
Segment operating expenses
(5,377)
(5,761)
(11,138)
Fair value adjustment to financial liabilities
Impairment of goodwill
EBITDA
2,116
(4,085)
(5,472)
-
-
1,267
2,116
(4,085)
(4,205)
The total Revenue and Loss after income tax presented in the Consolidated Entity's operating
segments reconcile to the corresponding key financial figures as presented in its Statement of profit or
loss and other comprehensive income as follows:
Intersegment transactions
Major customers
entity's revenue.
Operating segment information
Consolidated December 2017
Revenue
Sales to external customers
Total sales revenue
Other revenue
Segment operating expenses
EBITDA
Intersegment transactions were made at market rates. The Australian operating segment charges a management fee to
the United Kingdom operating segment. Intersegment transactions are eliminated on consolidation.
Revenue
31 December
2017
$'000
31 December
2016
$'000
Australia
$'000
United
Kingdom
$'000
Total reportable
segments
$'000
6,465
6,465
-
(5,263)
1,202
7,503
7,503
107
(9,434)
(1,824)
1,038
1,038
107
(4,171)
(3,026)
30
Total reportable segment revenues
Interest income
Other revenue
Group revenues
7,503
-
-
7,503
8,747
3
-
8,750
Profit or loss
Total reportable segment EBITDAs
Interest income
Depreciation and amortisation expense
Share-based payments expense
Interest expense
Income tax (expense)/benefit
Group profit/(loss) after income tax
expense/benefit
31 December
2017
$'000
31 December
2016
$'000
(1,824)
-
(518)
(96)
(184)
126
(4,205)
3
(791)
(350)
(21)
301
(2,496)
(5,063)
31
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 6. Expenses
Depreciation
Plant and equipment
Amortisation
Software
Customer relationships
Total amortisation
Loss before income tax includes the following specific expenses:
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 3. Operating segments (continued)
Geographical information
Australia
United Kingdom
Sales to external customers
Geographical non-current
assets
2017
$'000
2016
$'000
2017
$'000
2016
$'000
1,038
6,465
7,503
1,719
7,028
8,747
502
8,924
9,426
659
8,986
9,645
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets,
post-employment benefits assets and rights under insurance contracts.
Note 4. Revenue
Sales revenue
Interest
Revenue
Consolidated
2017
$'000
2016
$'000
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable
Rental expense relating to operating leases
7,503
8,747
Minimum lease payments
-
3
Superannuation expense
Defined contribution superannuation expense
7,503
8,750
Sales revenue is revenue generated from the consolidated entity's healthcare industry service provision businesses.
Note 5. Other income
Fair value remeasurement of financial liabilities
Consolidated
2017
$'000
2016
$'000
-
2,116
During the year ended 31 December 2016 the Company remeasured the contingent consideration payable in relation to
the prior period's acquisition of Appointuit Pty Ltd, reducing the payable to nil as at 31 December 2016. The amount of the
reduction in the liability arising from the remeasurement adjustment was recorded as other income.
Share-based payments expense
Share-based payments expense
Total employee benefits
Employee benefits expense excluding superannuation and share based payments
Employee benefits expense excluding superannuation and share based payments
4,343
4,739
4,562
5,388
Consolidated
2017
$'000
2016
$'000
29
201
288
489
518
184
326
123
96
31
257
503
760
791
21
288
299
350
32
33
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 3. Operating segments (continued)
Geographical information
Australia
United Kingdom
Note 4. Revenue
Sales revenue
Interest
Revenue
Note 5. Other income
Geographical non-current
Sales to external customers
assets
2017
$'000
2016
$'000
2017
$'000
2016
$'000
1,038
6,465
7,503
1,719
7,028
8,747
502
8,924
9,426
659
8,986
9,645
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets,
post-employment benefits assets and rights under insurance contracts.
Consolidated
2017
$'000
2016
$'000
7,503
8,747
-
3
7,503
8,750
Consolidated
2017
$'000
2016
$'000
-
2,116
Sales revenue is revenue generated from the consolidated entity's healthcare industry service provision businesses.
Fair value remeasurement of financial liabilities
During the year ended 31 December 2016 the Company remeasured the contingent consideration payable in relation to
the prior period's acquisition of Appointuit Pty Ltd, reducing the payable to nil as at 31 December 2016. The amount of the
reduction in the liability arising from the remeasurement adjustment was recorded as other income.
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Plant and equipment
Amortisation
Software
Customer relationships
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
Consolidated
2017
$'000
2016
$'000
29
201
288
489
518
184
326
123
96
31
257
503
760
791
21
288
299
350
Employee benefits expense excluding superannuation and share based payments
Employee benefits expense excluding superannuation and share based payments
Total employee benefits
4,343
4,739
4,562
5,388
32
33
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 7. Income tax benefit
Income tax benefit
Current tax
Deferred tax - origination and reversal of temporary differences
Aggregate income tax benefit
Deferred tax included in income tax benefit comprises:
Decrease in deferred tax liabilities (note 21)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 27.5% (2016: 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Impairment of goodwill
Share-based payments
Fair value remeasurement of financial liability
Non-assessable R&D tax incentive receivable
Difference in overseas tax rates
Sundry items
Current period tax losses not recognised
Prior period tax losses not recognised now recouped
Current period temporary differences not recognised
Prior period temporary differences not recognised now recognised
Adjustment to deferred tax balances as a result of change in statutory tax rate
Income tax benefit
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5% (2016: 30%)
Consolidated
2017
$'000
2016
$'000
(19)
(107)
(126)
(27)
(274)
(301)
(107)
(274)
(2,622)
(5,364)
(721)
(1,609)
-
26
-
(95)
(119)
24
(885)
926
(60)
(46)
-
(61)
(126)
1,225
105
(635)
(85)
(146)
(37)
(1,182)
1,169
(103)
(111)
(74)
-
(301)
Consolidated
2017
$'000
2016
$'000
11,596
3,189
8,650
2,595
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test
is passed.
Note 8. Current assets - cash and cash equivalents
Cash at bank
34
Consolidated
2017
$'000
2016
$'000
1,015
1,334
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 7. Income tax benefit
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 9. Current assets - trade and other receivables
Deferred tax - origination and reversal of temporary differences
Income tax benefit
Current tax
Aggregate income tax benefit
Trade receivables
Other receivables
GST receivable
Consolidated
2017
$'000
2016
$'000
1,226
18
18
1,262
1,047
14
61
1,122
Deferred tax included in income tax benefit comprises:
Decrease in deferred tax liabilities (note 21)
(107)
(274)
As at 31 December 2017 there were no material receivables amounts past due therefore there were no amounts past due
but not impaired (31 December 2016 - Nil).
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 27.5% (2016: 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Impairment of goodwill
Share-based payments
Fair value remeasurement of financial liability
Non-assessable R&D tax incentive receivable
Difference in overseas tax rates
Sundry items
Current period tax losses not recognised
Prior period tax losses not recognised now recouped
Current period temporary differences not recognised
Prior period temporary differences not recognised now recognised
Adjustment to deferred tax balances as a result of change in statutory tax rate
Income tax benefit
Note 10. Current assets - inventories
Stock on hand - at cost
Note 11. Current assets - other
Prepayments
Note 12. Non-current assets - receivables
Other receivables
Note 13. Non-current assets - property, plant and equipment
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5% (2016: 30%)
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test
Note 8. Current assets - cash and cash equivalents
is passed.
Cash at bank
Motor vehicles - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
Furniture and fittings - at cost
Less: Accumulated depreciation
34
35
Consolidated
2017
$'000
2016
$'000
314
359
Consolidated
2017
$'000
2016
$'000
95
65
Consolidated
2017
$'000
2016
$'000
50
43
Consolidated
2017
$'000
2016
$'000
70
(48)
22
241
(202)
39
68
(46)
22
83
69
(37)
32
236
(187)
49
53
(40)
13
94
Consolidated
2017
$'000
2016
$'000
(19)
(107)
(126)
(27)
(274)
(301)
(2,622)
(5,364)
(721)
(1,609)
26
-
-
(95)
(119)
24
(885)
926
(60)
(46)
-
(61)
(126)
1,225
105
(635)
(85)
(146)
(37)
(1,182)
1,169
(103)
(111)
(74)
-
(301)
Consolidated
2017
$'000
2016
$'000
11,596
3,189
8,650
2,595
Consolidated
2017
$'000
2016
$'000
1,015
1,334
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 13. Non-current assets - property, plant and equipment (continued)
Note 14. Non-current assets - intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period are set out
below:
Reconciliations
below:
Reconciliations of the written down values at the beginning and end of the current and previous financial period are set out
Consolidated
Balance at 1 January 2016
Additions
Exchange differences
Write off of assets
Depreciation expense
Balance at 31 December 2016
Additions
Depreciation expense
Balance at 31 December 2017
Note 14. Non-current assets - intangibles
Goodwill - at cost
Less: Impairment
Patents and trademarks - at cost
Software platform - at cost
Less: Accumulated amortisation - Software
Customer relationships - at cost
Less: Accumulated amortisation - Customer relationships
Furniture &
fittings
$'000
Office
equipment
$'000
Computer
equipment Motor vehicle
$'000
$'000
Total
$'000
5
11
(1)
(1)
(2)
12
15
(5)
22
74
2
(11)
-
(16)
49
1
(13)
37
2
3
-
(4)
(1)
-
1
-
1
47
-
(3)
-
(11)
33
-
(10)
23
128
16
(15)
(5)
(30)
94
17
(28)
83
Consolidated
Balance at 1 January 2016
Additions
Exchange differences
Impairment of assets
Amortisation expense
Additions
Exchange differences
Amortisation expense
Balance at 31 December 2016
5,539
586
Goodwill
$'000
Patents &
trademarks
$'000
Software
platform
$'000
Customer
relationships
$'000
Total
$'000
10,856
(1,232)
(4,085)
-
-
-
-
52
586
-
-
-
-
-
-
-
948
168
(119)
-
(257)
740
223
(5)
(201)
757
3,718
(572)
(503)
2,643
-
-
-
4
(288)
2,359
16,108
168
(1,923)
(4,085)
(760)
9,508
223
51
(489)
9,293
Balance at 31 December 2017
5,591
586
Consolidated
2017
$'000
2016
$'000
In 2015 the consolidated entity acquired Jayex Technology Limited (JUK), which is based in the United Kingdom, and
Appointuit Pty Ltd (Appointuit). Both of these companies operate technologies which are complementary to the technology
which is the subject of the patents and therefore enhanced technology business relationships upon which to pursue
discussions in key world markets. The majority of the consolidated entity's technologies were acquired through the
acquisitions of JUK and Appointuit.
9,676
(4,085)
5,591
586
1,201
(444)
757
3,113
(754)
2,359
9,293
9,624
(4,085)
5,539
586
1,009
(772)
237
3,166
(20)
3,146
9,508
The estimated useful lives of the Software Platform and Customer Relationships of Appointuit were reassessed during the
previous financial year resulting in an increase in the amortisation charge in 2016 of $194,000. Descriptions of these items
and their estimated remaining useful lives are as follows:
- Software Platform - value attributed to the respective Enlighten/Appointuit computer software systems and all
enhancements, based on the net earnings/cost savings they are expected to generate over their useful lives (estimated
remaining useful life - JUK: 3 years; Appointuit: Nil)
- Customer Relationships - value attributed to the respective existing JUK/Appointuit customer bases based on the net
earnings they are expected to generate over their useful lives (estimated remaining useful life - JUK: 8 years; Appointuit:
Nil)
Patents & trademarks
The carrying value of patents & trademarks has been assessed on a fair value less costs to sell methodology. An
independent valuation was obtained during the year ended 30 June 2015 which made several key assumptions about the
potential sizes of the markets for the patents and trademarks, adoption rates and revenues and costs associated with
transactions. The directors have re-considered the carrying value in reference to this report and believe that there have
been no material changes to the assumption used that would result in impairment to the patents and trademarks.
36
37
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 14. Non-current assets - intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period are set out
below:
Consolidated
Balance at 1 January 2016
Additions
Exchange differences
Impairment of assets
Amortisation expense
Balance at 31 December 2016
Additions
Exchange differences
Amortisation expense
Balance at 31 December 2017
Goodwill
$'000
Patents &
trademarks
$'000
Software
platform
$'000
Customer
relationships
$'000
Total
$'000
10,856
-
(1,232)
(4,085)
-
5,539
-
52
-
5,591
586
-
-
-
-
586
-
-
-
586
948
168
(119)
-
(257)
740
223
(5)
(201)
757
3,718
-
(572)
-
(503)
2,643
-
4
(288)
2,359
16,108
168
(1,923)
(4,085)
(760)
9,508
223
51
(489)
9,293
In 2015 the consolidated entity acquired Jayex Technology Limited (JUK), which is based in the United Kingdom, and
Appointuit Pty Ltd (Appointuit). Both of these companies operate technologies which are complementary to the technology
which is the subject of the patents and therefore enhanced technology business relationships upon which to pursue
discussions in key world markets. The majority of the consolidated entity's technologies were acquired through the
acquisitions of JUK and Appointuit.
The estimated useful lives of the Software Platform and Customer Relationships of Appointuit were reassessed during the
previous financial year resulting in an increase in the amortisation charge in 2016 of $194,000. Descriptions of these items
and their estimated remaining useful lives are as follows:
- Software Platform - value attributed to the respective Enlighten/Appointuit computer software systems and all
enhancements, based on the net earnings/cost savings they are expected to generate over their useful lives (estimated
remaining useful life - JUK: 3 years; Appointuit: Nil)
- Customer Relationships - value attributed to the respective existing JUK/Appointuit customer bases based on the net
earnings they are expected to generate over their useful lives (estimated remaining useful life - JUK: 8 years; Appointuit:
Nil)
Patents & trademarks
The carrying value of patents & trademarks has been assessed on a fair value less costs to sell methodology. An
independent valuation was obtained during the year ended 30 June 2015 which made several key assumptions about the
potential sizes of the markets for the patents and trademarks, adoption rates and revenues and costs associated with
transactions. The directors have re-considered the carrying value in reference to this report and believe that there have
been no material changes to the assumption used that would result in impairment to the patents and trademarks.
37
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 14. Non-current assets - intangibles (continued)
Goodwill
For the purpose of ongoing annual impairment testing goodwill is allocated to the following cash-generating units, which
are the units expected to benefit from the synergies of the business combinations in which the goodwill arises:
Jayex Technology (United Kingdom)
Methodology
Consolidated
2017
$'000
2016
$'000
5,591
5,539
An impairment loss expense in the profit or loss is recognised when the carrying amount of an asset exceeds its
recoverable amount. The Company determined the recoverable amounts of both the Appointuit CGU and Jayex
Technology CGU using a value in use approach.
The recoverable amounts of both CGUs have been determined by valuation models that estimated the future cash flows
relying on historical performance and growth, discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to each particular CGU.
The discounted cash flow model used in the assessment of value in use is sensitive to a number of key assumptions,
including revenue growth rates, discount rates, operating costs and foreign exchange rates. These assumptions can
change over short periods of time and can have a significant impact on the carrying value of the assets.
Based on the estimated recoverable amount for the Appointuit CGU, the Group recognised an impairment to goodwill in
the year ended 31 December 2016, due primarily to the effect of changes in competition and market conditions,
expectations around performance and growth not being achieved, and ongoing difficulties regarding integration.
Impairment testing for CGUs containing goodwill
Goodwill arose in the business combinations for the acquisition of Jayex Technologies and Appointuit Pty Ltd in 2015. It
represented the excess of the cost of the acquisition over the fair value of the Group’s share of the identifiable net assets
acquired and contingent liabilities assumed at the date of acquisition. Goodwill is allocated to the Group’s cash generating
units (CGUs) identified according to the Group’s operating segments for impairment testing purposes.
In assessing whether an impairment adjustment is required for the carrying value of an asset, its carrying value is
compared with its recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and
value-in-use.
Value in use and key assumptions
The Company estimates the value-in-use of the Appointuit CGU and Jayex Technology CGU using discounted cash flows.
The calculation of value-in-use used the following assumptions:
Foreign exchange rate - £/$A 0.5787
Period over which cash flows projected - 5 years
• Discount rate - 14.75%
•
•
• Growth projections - revenue increase at average rates of 5 - 5.5% per annum, based on past trends
•
Expenses increase at average rates of 3.2 - 3.8% per annum, based on past trends of reducing cost base compared
to revenues
Long term growth rate used to extrapolate cash flow projections beyond forecast period - 2% per annum
•
38
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 14. Non-current assets - intangibles (continued)
Impairment
Company has performed an impairment assessment based on its cash generating units (CGU), which were the Appointuit
CGU and Jayex Technology CGU.
As a result of the assessment the Company has maintained the impairment to the goodwill asset of $4.085 million in
relation to the Appointuit CGU which was previously recognised in the year ended 31 December 2016. This impairment
has not changed during the current financial year.
The Company determined that the recoverable amount in relation the Jayex Technology CGU exceeded its carrying value
of assets as at 31 December 2017, therefore no adjustment to its carrying value was required.
Note 15. Current liabilities - trade and other payables
Consolidated
2017
$'000
2016
$'000
506
409
137
204
756
339
114
261
1,256
1,470
Consolidated
2017
$'000
2016
$'000
-
9
9
613
7
620
Consolidated
2017
$'000
2016
$'000
77
60
Trade payables
Accrued expenses
GST payable
Other payables
Refer to note 25 for further information on financial instruments.
Note 16. Current liabilities - borrowings
Short term loans
Other loans
Refer to note 25 for further information on financial instruments.
Note 17. Current liabilities - employee benefits
Annual leave
39
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 18. Current liabilities - provisions
Provision for warranties
Provision for credit notes
Consolidated
2017
$'000
2016
$'000
275
28
303
237
41
278
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the
reporting date. The provision is estimated based on historical warranty claim information, sales levels and any recent
trends that may suggest future claims could differ from historical amounts.
Credit notes
The provision represents the estimated credit notes which may be granted in future periods in respect of products sold
prior to the reporting date. The provision is estimated based on historical credit note information, sales levels and any
recent trends that may suggest future issues of credit notes could differ from historical amounts.
Movements:
Opening balance
Credited to profit or loss (note 7)
Credited to equity
Movements in provisions
Movements in each class of provision during the current financial period, other than employee benefits, are set out below:
Closing balance
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 21. Non-current liabilities - deferred tax
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Intangible assets arising from business combinations
Property, plant and equipment
Development costs
Carry forward tax losses
Deferred tax liability
Consolidated
2017
$'000
2016
$'000
765
8
64
(10)
827
934
(107)
-
827
962
11
35
(74)
934
1,415
(274)
(207)
934
Consolidated - 2017
Carrying amount at the start of the period
Additional provisions recognised
Reduction in provision required
Carrying amount at the end of the period
Note 19. Current liabilities - other
Deferred revenue
Revenue received in advance
Deferred revenue represents sales invoiced in advance of the provision of contracted services.
Note 20. Non-current liabilities - borrowings
Borrowings - non-current
Refer to note 25 for further information on financial instruments.
Warranties
$'000
Credit notes
$'000
Included in the above balance is the recognised benefit of carry forward tax losses of Jayex Technology Ltd (JUK), the
consolidated entity's UK-based subsidiary. The benefit has been recognised as it is expected that JUK will generate
sufficient future taxable profits to utilise these tax losses, and will comply with the relevant regulatory requirements for the
237
38
-
275
41
-
(13)
28
Consolidated
2017
$'000
2016
$'000
1,482
118
1,600
1,461
71
1,532
utilisation of those losses.
Note 22. Equity - issued capital
Movements in ordinary share capital
Details
Balance
Balance
Issue of shares upon exercise of options
Issue of shares upon exercise of options
Issue of shares upon exercise of options
Issue of shares upon exercise of options
Consolidated
Balance
31 December 2017
153,622,874
2017
$'000
2016
$'000
2,885
-
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
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
Ordinary shares - fully paid
153,622,874 152,122,874
25,420
24,940
Consolidated
2017
Shares
2016
Shares
2017
$'000
2016
$'000
Date
No of shares Issue price
$'000
1 January 2016
20 June 2016
18 October 2016
31 December 2016
12 January 2017
24 November 2017
150,997,874
125,000
1,000,000
152,122,874
750,000
750,000
$0.25
$0.32
$0.32
$0.32
24,588
32
320
24,940
240
240
25,420
These loans have been advanced to the consolidated entity by a related party. Refer Note 29 for further information.
share shall have one vote.
40
41
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the
reporting date. The provision is estimated based on historical warranty claim information, sales levels and any recent
trends that may suggest future claims could differ from historical amounts.
The provision represents the estimated credit notes which may be granted in future periods in respect of products sold
prior to the reporting date. The provision is estimated based on historical credit note information, sales levels and any
recent trends that may suggest future issues of credit notes could differ from historical amounts.
Movements in provisions
Movements in each class of provision during the current financial period, other than employee benefits, are set out below:
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 18. Current liabilities - provisions
Provision for warranties
Provision for credit notes
Warranties
Credit notes
Consolidated - 2017
Carrying amount at the start of the period
Additional provisions recognised
Reduction in provision required
Carrying amount at the end of the period
Note 19. Current liabilities - other
Deferred revenue
Revenue received in advance
Consolidated
2017
$'000
2016
$'000
275
28
303
237
41
278
Warranties
Credit notes
$'000
$'000
237
38
-
275
41
-
(13)
28
Consolidated
2017
$'000
2016
$'000
1,482
118
1,600
1,461
71
1,532
2017
$'000
2016
$'000
2,885
-
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 21. Non-current liabilities - deferred tax
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Intangible assets arising from business combinations
Property, plant and equipment
Development costs
Carry forward tax losses
Deferred tax liability
Movements:
Opening balance
Credited to profit or loss (note 7)
Credited to equity
Closing balance
Consolidated
2017
$'000
2016
$'000
765
8
64
(10)
827
934
(107)
-
827
962
11
35
(74)
934
1,415
(274)
(207)
934
Included in the above balance is the recognised benefit of carry forward tax losses of Jayex Technology Ltd (JUK), the
consolidated entity's UK-based subsidiary. The benefit has been recognised as it is expected that JUK will generate
sufficient future taxable profits to utilise these tax losses, and will comply with the relevant regulatory requirements for the
utilisation of those losses.
Note 22. Equity - issued capital
Consolidated
2017
Shares
2016
Shares
2017
$'000
2016
$'000
Ordinary shares - fully paid
153,622,874 152,122,874
25,420
24,940
Movements in ordinary share capital
Details
Date
No of shares Issue price
$'000
Deferred revenue represents sales invoiced in advance of the provision of contracted services.
Note 20. Non-current liabilities - borrowings
Balance
Issue of shares upon exercise of options
Issue of shares upon exercise of options
Balance
Issue of shares upon exercise of options
Issue of shares upon exercise of options
1 January 2016
20 June 2016
18 October 2016
31 December 2016
12 January 2017
24 November 2017
150,997,874
125,000
1,000,000
152,122,874
750,000
750,000
$0.25
$0.32
$0.32
$0.32
Consolidated
Balance
31 December 2017
153,622,874
24,588
32
320
24,940
240
240
25,420
Borrowings - non-current
Refer to note 25 for further information on financial instruments.
These loans have been advanced to the consolidated entity by a related party. Refer Note 29 for further information.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
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.
40
41
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 22. Equity - issued capital (continued)
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital. No external requirements have been imposed on the consolidated entity in regards to capital
management.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
No changes to what is regarded as capital nor how it is managed have occurred during the financial year.
Note 23. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2017
$'000
2016
$'000
(1,855)
62
(1,779)
446
(1,793)
(1,333)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial period are set out below:
Consolidated
Balance at 1 January 2016
Foreign currency translation
Amortisation of share based employee incentives
Exercise of options
Balance at 31 December 2016
Foreign currency translation
Amortisation of share based employee incentives
Exercise of options
Balance at 31 December 2017
42
Foreign
currency
reserve
$'000
Share-based
payments
reserve
$'000
Total
$'000
(49)
(1,730)
-
-
(1,779)
(76)
-
-
(1,855)
448
-
350
(352)
446
-
96
(480)
399
(1,730)
350
(352)
(1,333)
(76)
96
(480)
62
(1,793)
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 22. Equity - issued capital (continued)
Share buy-back
There is no current on-market share buy-back.
Capital risk management
Note 23. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Foreign currency reserve
operations to Australian dollars.
Share-based payments reserve
Consolidated
2017
$'000
2016
$'000
(1,855)
62
(1,779)
446
(1,793)
(1,333)
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial period are set out below:
Consolidated
Balance at 1 January 2016
Foreign currency translation
Amortisation of share based employee incentives
Exercise of options
Balance at 31 December 2016
Foreign currency translation
Amortisation of share based employee incentives
Exercise of options
Foreign
currency
reserve
$'000
Share-based
payments
reserve
$'000
Total
$'000
(49)
(1,730)
(1,779)
(76)
-
-
-
-
448
-
350
(352)
446
-
96
(480)
399
(1,730)
350
(352)
(1,333)
(76)
96
(480)
Balance at 31 December 2017
(1,855)
62
(1,793)
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 24. Equity - accumulated losses
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital. No external requirements have been imposed on the consolidated entity in regards to capital
management.
Accumulated losses at the beginning of the financial period
Loss after income tax benefit for the period
Accumulated losses at the end of the financial period
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
Note 25. Financial instruments
as total borrowings less cash and cash equivalents.
Consolidated
2017
$'000
2016
$'000
(15,976)
(2,496)
(10,913)
(5,063)
(18,472)
(15,976)
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
No changes to what is regarded as capital nor how it is managed have occurred during the financial year.
Financial risk management objectives
The entity’s principal financial instruments comprise cash and cash equivalents and loans receivable and payable. The
main purpose of these financial instruments is to finance the entity’s operations. The entity has various other financial
assets and liabilities such as receivables and trade payables, which arise directly from its operations. It is, and has been
throughout the entire period, the entity’s policy that no trading in financial instruments shall be undertaken.
There are no major risks arising from the entity’s financial instruments, as no term deposits/cash investments are
maintained. Minor risks are summarised below. The Board reviews and agrees policies for managing each of these risks.
Financial assets and liabilities
Financial assets
Cash at bank
Trade and other receivables - current
Receivables - non-current
Financial liabilities
Trade and other payables
Deferred revenue
Short term loans
Other loans
Borrowings - non-current
Market risk
Consolidated
2017
$'000
2016
$'000
1,015
1,262
50
2,327
1,256
1,600
-
9
2,885
5,750
1,334
1,122
43
2,499
1,470
1,532
620
-
-
3,622
Foreign currency risk
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
The consolidated entity derives approximately 86% of its revenue and 55% its operating costs, and has 89% of its assets
and 44% of its liabilities located in, or arising from activities carried out by, a subsidiary company, Jayex Technology
Limited (JUK), incorporated in the United Kingdom. The activities, assets and liabilities of JUK are denominated in its
functional currency, the Pound Sterling (GBP).
This exposure could have a material effect on the results of the consolidated entity in the long term, in particular the
exchange differences arising from the translation of the consolidated entity's net investment in JUK, and its future revenue
and expense streams.
42
43
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 25. Financial instruments (continued)
The average exchange rates and reporting date exchange rates applied were as follows:
Australian dollars
Pound sterling (GBP)
Average
exchange
rate
2017
Average
exchange
rates
2016
Reporting
date
exchange
rate
2017
Acquisition
date
exchange
rate
2016
0.5951
0.5481
0.5787
0.5842
As noted above, foreign currency risk arises when future commercial transactions and recognised financial assets and
liabilities are denominated in a currency that is not the entity's functional currency. As there is no material exposure to
foreign currency risk within the financial assets and financial liabilities outside of each operating entity's functional currency,
the consolidated entity as a whole did not face a material foreign currency risk as at reporting date and no sensitivity
analysis has been prepared.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity is not exposed to any significant interest rate risk.
As at reporting date the consolidated entity has cash at bank of $1,015,000 and borrowings of $2,885,000. Cash at bank
as at reporting date is held in a number of bank accounts, operated by the consolidated entity's parent entity and its
subsidiaries and its head office function. Interest on bank accounts is insignificant. The interest rates on borrowings are at
fixed rates of 8 percent per annum on a loan of $2,000,000 and 12 percent per annum on a loan of $830,000. Any feasible
change in market rates is not expected to have a material impact on the financial results of the consolidated entity.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes
to the financial statements. The consolidated entity does not hold any collateral.
The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to recognised financial assets is
the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial
position and notes to the financial statements. The consolidated entity does not hold any collateral.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group
and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings
and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with
creditworthy counterparties.
Other than trade receivables, the consolidated entity's main counterparties are major, reputable banks and government
sales tax authorities. The consolidated entity is satisfied that the risk of default on the part of these counterparties is low.
The Group’s management considers that all of the financial assets referred to above that are not impaired or past due at
the reporting date are of good credit quality.
Liquidity risk
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
44
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 25. Financial instruments (continued)
Note 25. Financial instruments (continued)
The average exchange rates and reporting date exchange rates applied were as follows:
Average
exchange
Average
exchange
rate
2017
rates
2016
date
rate
2017
Reporting
Acquisition
exchange
exchange
date
rate
2016
0.5951
0.5481
0.5787
0.5842
Australian dollars
Pound sterling (GBP)
analysis has been prepared.
Price risk
Interest rate risk
As noted above, foreign currency risk arises when future commercial transactions and recognised financial assets and
liabilities are denominated in a currency that is not the entity's functional currency. As there is no material exposure to
foreign currency risk within the financial assets and financial liabilities outside of each operating entity's functional currency,
the consolidated entity as a whole did not face a material foreign currency risk as at reporting date and no sensitivity
The consolidated entity is not exposed to any significant price risk.
The consolidated entity is not exposed to any significant interest rate risk.
As at reporting date the consolidated entity has cash at bank of $1,015,000 and borrowings of $2,885,000. Cash at bank
as at reporting date is held in a number of bank accounts, operated by the consolidated entity's parent entity and its
subsidiaries and its head office function. Interest on bank accounts is insignificant. The interest rates on borrowings are at
fixed rates of 8 percent per annum on a loan of $2,000,000 and 12 percent per annum on a loan of $830,000. Any feasible
change in market rates is not expected to have a material impact on the financial results of the consolidated entity.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes
to the financial statements. The consolidated entity does not hold any collateral.
The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to recognised financial assets is
the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial
position and notes to the financial statements. The consolidated entity does not hold any collateral.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group
and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings
and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with
creditworthy counterparties.
Other than trade receivables, the consolidated entity's main counterparties are major, reputable banks and government
sales tax authorities. The consolidated entity is satisfied that the risk of default on the part of these counterparties is low.
The Group’s management considers that all of the financial assets referred to above that are not impaired or past due at
the reporting date are of good credit quality.
Liquidity risk
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Consolidated - 2017
Non-derivatives
Non-interest bearing
Trade and other payables
Accruals
Deferred revenue
Borrowings - non-current
Interest-bearing - fixed rate
Other loans
Borrowings - non-current
Borrowings - non-current
Total non-derivatives
Consolidated - 2016
Non-derivatives
Non-interest bearing
Trade and other payables
Accruals
Deferred revenue
Interest-bearing - fixed rate
Short term loans
Total non-derivatives
Weighted
average
interest rate 1 year or less
%
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
-
-
-
7.80%
8.00%
12.00%
850
409
1,600
-
9
160
100
3,128
-
-
-
55
-
2,040
855
2,950
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
850
409
1,600
55
9
2,200
955
6,078
Weighted
average
interest rate 1 year or less
%
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
-
-
8.00%
1,131
339
1,532
639
3,641
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,131
339
1,532
639
3,641
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
44
45
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 26. Key management personnel disclosures
Compensation
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
Post-employment benefits
Share-based payments
Note 27. Remuneration of auditors
Consolidated
2017
$
2016
$
578,671
17,575
-
824,513
24,368
128,000
596,246
976,881
During the financial period the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd,
the auditor of the Company, and its network firms:
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Tax consulting
Audit services - network firms
Audit or review of the financial statements
Note 28. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2017
$
2016
$
74,000
79,000
45,512
25,230
119,512
104,230
44,000
42,000
163,512
146,230
Consolidated
2017
$'000
2016
$'000
276
360
636
275
610
885
The operating lease commitments relate to leases of business premises used by the consolidated entity in Australia and
the United Kingdom to accommodate its business activities. The leases are non-cancellable and have terms ranging from
6 months to 3 years.
Note 29. Related party transactions
Parent entity
Jayex Healthcare Ltd is the parent entity.
46
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 26. Key management personnel disclosures
Compensation
entity is set out below:
The aggregate compensation made to directors and other members of key management personnel of the consolidated
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 29. Related party transactions (continued)
Subsidiaries
Interests in subsidiaries are set out in note 31.
During the financial period the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd,
the auditor of the Company, and its network firms:
Short-term employee benefits
Post-employment benefits
Share-based payments
Note 27. Remuneration of auditors
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Tax consulting
Audit services - network firms
Audit or review of the financial statements
Note 28. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2017
$
2016
$
578,671
17,575
-
824,513
24,368
128,000
596,246
976,881
Consolidated
2017
$
2016
$
74,000
79,000
45,512
25,230
119,512
104,230
44,000
42,000
163,512
146,230
Consolidated
2017
$'000
2016
$'000
276
360
636
275
610
885
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties. All transactions were carried out on arm's length terms on a basis
which is no more or less favourable than if the transactions had occurred with non-related entities.
Other transactions:
Loan interest paid or payable to Covenant Holdings (WA) Pty Ltd (an entity related to
director Michael Boyd)
Interest accrued to Lirho Pty Ltd (an entity related to director Michael Boyd)
Premises rent paid or payable by Jayex Technology Limited to Vector Capital Limited (an
entity controlled by Agam Jain, a director of the consolidated entity)
Consolidated
2017
$
2016
$
115,347
-
-
4
126,029
136,829
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2017
$
2016
$
Current payables:
Accrued loan interest payable to Covenant Holdings (WA) Pty Ltd (an entity related to
director Michael Boyd)
8,702
The payables due to related parties were payable on demand and did not bear interest.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Non-current borrowings:
Loans from Covenant Holdings (WA) Pty Ltd (an entity related to director Michael Boyd)
2,885,000
Consolidated
2017
$
2016
$
-
-
Terms and conditions
The terms of the loans made by Covenant Holdings (WA) Pty Ltd to companies within the consolidated entity are as
follows:
The operating lease commitments relate to leases of business premises used by the consolidated entity in Australia and
the United Kingdom to accommodate its business activities. The leases are non-cancellable and have terms ranging from
Loan to Jayex Healthcare Limited: Balance at 31 December 2017 - $2,000,000; interest rate - 8% per annum
Loan to Jayex Healthcare Limited: Balance at 31 December 2017 - $830,000; interest rate - 12% per annum
Loan to P2U Pty Ltd: Balance at 31 December 2017 - $55,000; loan is interest free.
All loans are unsecured and are repayable on 1 April 2019.
6 months to 3 years.
Note 29. Related party transactions
Parent entity
Jayex Healthcare Ltd is the parent entity.
46
47
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 30. Parent entity information
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 31. Interests in subsidiaries
Set out below is the supplementary information about the parent entity.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1:
Statement of profit or loss and other comprehensive income
Loss after income tax benefit
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2017
$'000
2016
$'000
(2,840)
(6,064)
P2U Pty Ltd
(2,840)
(6,064)
Name
Bluepoint International Pty Ltd
Jayex Australia Pty Ltd
Express RX Pty Ltd
Jayex Technology Limited
Appointuit Pty Ltd
Jayex New Zealand Limited
Parent
2017
$'000
2016
$'000
Note 32. Events after the reporting period
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
United Kingdom
Australia
New Zealand
Ownership interest
2017
%
2016
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
117
164
Gordon Cooper and Ms Rosemary Cooper (the Coopers) upon the Company was concluded with AMCG and the Coopers
discontinuing the proceedings and releasing JHL from all claims. JHL has not paid any settlement sum and each party
During January 2018 the Federal Court action served by Australian Medical Consulting Group Pty Ltd (AMCG) and Mr
9,754
10,294
agreed to bear their own costs.
322
3,161
958
958
25,420
63
(18,890)
24,940
446
(16,050)
6,593
9,336
On 25 January 2018 the Company amended its Loan Agreement (Agreement) with Covenant Holdings (WA) Pty Ltd
(‘Covenant’), a related entity of the Company’s Chairman and major shareholder, Mr Michael Boyd, to secure further
funding for the Company. Under the revision to the Agreement, Covenant increased the Company’s loan facility by
$170,000 in order to fund the Company’s working capital requirements. The loan facility will bear interest of 12% per
annum with a repayment date of 1 April 2019 and is an unsecured loan.
No other matter or circumstance has arisen since 31 December 2017 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in
future financial years.
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2017 or 31 December
2016.
Contingent liabilities
With the exception of any matter referred to Note 36 Contingent liabilities, the parent entity had no contingent liabilities as
at 31 December 2017 or 31 December 2016.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2017 or 31 December
2016.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
except for the following:
●
●
investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
dividends received from subsidiaries are recognised as other income by the parent entity.
48
49
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax benefit
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 31. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1:
Name
Bluepoint International Pty Ltd
P2U Pty Ltd
Jayex Australia Pty Ltd
Express RX Pty Ltd
Jayex Technology Limited
Appointuit Pty Ltd
Jayex New Zealand Limited
Note 32. Events after the reporting period
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
United Kingdom
Australia
New Zealand
Ownership interest
2016
2017
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
During January 2018 the Federal Court action served by Australian Medical Consulting Group Pty Ltd (AMCG) and Mr
Gordon Cooper and Ms Rosemary Cooper (the Coopers) upon the Company was concluded with AMCG and the Coopers
discontinuing the proceedings and releasing JHL from all claims. JHL has not paid any settlement sum and each party
agreed to bear their own costs.
On 25 January 2018 the Company amended its Loan Agreement (Agreement) with Covenant Holdings (WA) Pty Ltd
(‘Covenant’), a related entity of the Company’s Chairman and major shareholder, Mr Michael Boyd, to secure further
funding for the Company. Under the revision to the Agreement, Covenant increased the Company’s loan facility by
$170,000 in order to fund the Company’s working capital requirements. The loan facility will bear interest of 12% per
annum with a repayment date of 1 April 2019 and is an unsecured loan.
No other matter or circumstance has arisen since 31 December 2017 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in
future financial years.
Parent
2017
$'000
2016
$'000
(2,840)
(6,064)
(2,840)
(6,064)
Parent
2017
$'000
2016
$'000
117
164
9,754
10,294
322
3,161
958
958
25,420
63
(18,890)
24,940
446
(16,050)
6,593
9,336
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 31 December 2017 or 31 December
With the exception of any matter referred to Note 36 Contingent liabilities, the parent entity had no contingent liabilities as
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2017 or 31 December
2016.
Contingent liabilities
at 31 December 2017 or 31 December 2016.
Capital commitments - Property, plant and equipment
2016.
Significant accounting policies
except for the following:
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
●
●
investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
dividends received from subsidiaries are recognised as other income by the parent entity.
48
49
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 33. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax benefit for the period
Adjustments for:
Depreciation and amortisation
Impairment of goodwill
Write off of non-current assets
Share-based payments
Non-cash interest expense
Fair value remeasurement of financial liabilities
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in prepayments
(Increase)/Decrease in Other receivables - non-current
Decrease in trade and other payables
Decrease in deferred tax liabilities
Increase/(decrease) in employee benefits
Increase in other provisions
Increase/(decrease) in deferred revenue
Consolidated
2017
$'000
2016
$'000
(2,496)
(5,063)
518
-
-
96
45
-
(184)
45
(30)
(7)
(337)
(101)
17
25
68
791
4,085
5
350
13
(2,116)
282
(86)
10
(43)
(360)
(274)
(25)
6
140
Net cash used in operating activities
(2,341)
(2,285)
Note 34. Earnings per share
Consolidated
2017
$'000
2016
$'000
Loss after income tax attributable to the owners of Jayex Healthcare Ltd
(2,496)
(5,063)
Weighted average number of ordinary shares used in calculating basic earnings per share
152,928,353 151,269,390
Weighted average number of ordinary shares used in calculating diluted earnings per share
152,928,353 151,269,390
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(1.6)
(1.6)
(3.3)
(3.3)
Number of contingent shares not included in the diluted earnings per share calculation as they are anti-dilutive: 944,521
(2016: 2,512,117).
50
Jayex Healthcare Ltd
Notes to the financial statements
31 December 2017
Note 35. Share-based payments
(a) Employee options
A share option plan (Plan) has been established by the consolidated entity and approved by shareholders at a general
meeting, whereby the consolidated entity may, at the discretion of the Nomination and Remuneration Committee, grant
options over ordinary shares in the Company to certain employees of the consolidated entity. In accordance with the Plan
options were issued in 2016 for nil consideration and were granted in accordance with performance guidelines established
by the Nomination and Remuneration Committee. As the instruments issued in 2016 have a nil exercise price, they
represent performance rights; these are referred to as "options" in these financial statements and the accompanying
directors' report.
Set out below are summaries of options granted under the plan:
2017
Grant date
Expiry date
Exercise
price
02/02/2016
02/02/2019
$0.00
Balance at
the start of
the period
1,750,000
1,750,000
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the period
-
-
(1,500,000)
(1,500,000)
-
-
250,000
250,000
The options issued on 2 February 2016, and exercised during the financial year, had a nil exercise price, therefore the
weighted average exercise price of options issued, exercised and outstanding at year end was nil.
2016
Grant date
Expiry date
Exercise
price
Balance at
the start of
the period
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the period
02/02/2016
02/02/2019
$0.00
-
-
2,875,000
2,875,000
(1,125,000)
(1,125,000)
-
-
1,750,000
1,750,000
The weighted average share price during the financial period was $0.024 (2015: $0.15).
The weighted average remaining contractual life of options outstanding at the end of the financial period was 1.09 years
(2015: 2.09).
(b) Shares issued to employees and third parties in return for services
The Company may, from time to time, issue shares to employees and third parties as consideration for goods and/or
services provided to the consolidated entity by those parties. All such transactions are settled in equity and vest
immediately, unless otherwise stated. No such shares were issued in the year ended 31 December 2017.
Note 36. Contingent liabilities
(a) Contingent consideration on acquisition of Appointuit Pty Ltd
A contingent consideration payable on business acquisition relates to the acquisition of Appointuit Pty Ltd ("Appointuit")
made by the consolidated entity in 2015.
During the year ended 31 December 2016 the Company remeasured the contingent consideration payable in relation to
the Appointuit acquisition, reducing the payable from $2.214 million as at 31 December 2015 to nil as at 31 December
2016 due to a number of factors having a substantial impact on Appointuit's ability to achieve the EBITDA targets during
the period 1 July 2015 to 30 June 2019, set as part of the contingent consideration payable.
In the event that Appointuit achieves the relevant EBITDA targets during the relevant future time period, then an amount of
contingent consideration would then become payable and would be recognised as a liability at that time.
51
Collins Square, Tower 1
727 Collins Street
Docklands Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
to the Members of Jayex Healthcare Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Jayex Healthcare Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
31 December 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, 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:
a Giving a true and fair view of the Group’s financial position as at 31 December 2017 and of its
performance for the year ended on that date; and
b 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
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial statements, which indicates that the Group incurred a
net loss of $2,496,000 and net cash out flows from operating activities of $2,341,000 during the
year ended 31 December 2017, and as of that date, the Group’s current liabilities exceeded its
total assets by $559,000. As stated in Note 1, these events or conditions, along with other matters
as set forth in Note 1, indicate that a material uncertainty exists that may cast doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
53
Jayex Healthcare LtdDirectors' declaration31 December 201752In the directors' opinion:●the attached consolidated financial statements and notes, and the Remuneration report set out on pages 7to 12ofthe Directors’ report, comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations2001 and other mandatory professional reporting requirements;●the attached consolidated financial statements and notes comply with International Financial Reporting Standards asissued by the International Accounting Standards Board as described in note 1 to the financialstatements;●the attached consolidated financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2017 and of its performance for the financial period ended on that date; and●there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.The directors have been given the declarations required by section 295A of the Corporations Act 2001.Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.On behalf of the directors___________________________Michael BoydChairman27February 2018Melbourne Independent Auditor’s Report
to the Members of Jayex Healthcare Limited
Report on the audit of the financial report
Collins Square, Tower 1
727 Collins Street
Docklands Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Opinion
We have audited the financial report of Jayex Healthcare Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
31 December 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements, 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:
a Giving a true and fair view of the Group’s financial position as at 31 December 2017 and of its
performance for the year ended on that date; and
b 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
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial statements, which indicates that the Group incurred a
net loss of $2,496,000 and net cash out flows from operating activities of $2,341,000 during the
year ended 31 December 2017, and as of that date, the Group’s current liabilities exceeded its
total assets by $559,000. As stated in Note 1, these events or conditions, along with other matters
as set forth in Note 1, indicate that a material uncertainty exists that may cast doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
53
Jayex Healthcare LtdDirectors' declaration31 December 201752In the directors' opinion:●the attached consolidated financial statements and notes, and the Remuneration report set out on pages 7to 12ofthe Directors’ report, comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations2001 and other mandatory professional reporting requirements;●the attached consolidated financial statements and notes comply with International Financial Reporting Standards asissued by the International Accounting Standards Board as described in note 1 to the financialstatements;●the attached consolidated financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2017 and of its performance for the financial period ended on that date; and●there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.The directors have been given the declarations required by section 295A of the Corporations Act 2001.Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.On behalf of the directors___________________________Michael BoydChairman27February 2018Melbourne 2
3
Key Audit Matters
Responsibilities of the Directors’ for the Financial Report
Key audit matters are those matters that, in our professional judgement, were of most significance
The Directors of the Company are responsible for the preparation of the financial report that gives
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section,
we have determined the matters described below to be the key audit matters to be communicated
in our report.
Key audit matter
Goodwill and intangible balances
Note 14
At 31 December 2017, the Group has goodwill and
other intangible assets amounting to $9,293,000
relating to the Jayex Technology Limited cash
generating unit.
The Group is required to perform an impairment test,
where goodwill is allocated to a CGU acquired in a
business combination during the current period,
before the end of the current period.
Management has assessed that the group has four
CGUs, and has allocated the goodwill and other
intangible assets to these CGUs.
Management has tested the CGU’s for impairment by
comparing their carrying amounts with their
recoverable amounts. The recoverable amounts were
determined using the greater of fair value less costs
of disposal and the value-in-use.
We have determined this is a key audit matter due to
the judgements and estimates required in
determining the appropriate CGU’s and calculating
the recoverable amount.
How our audit addressed the key audit matter
to cease operations, or have no realistic alternative but to do so.
Our procedures included, amongst others:
• Enquiring with management to obtain and
document an understanding of management’s
process and controls related to the assessment of
impairment, including management’s identification
of CGUs and the calculation of the recoverable
amount for the CGU;
• Evaluating the recoverable amounts against the
requirements of AASB 136: Impairment of Assets,
including consultation with our valuations experts;
• Reviewing management’s value-in-use
calculations to:
– Test the mathematical accuracy of the
calculations;
– Evaluate management’s ability to perform
accurate estimates;
– Test forecast cash inflows and outflows to be
derived by the CGUs assets; and
– Agree discount rates applied to forecast future
cash flows; and
• Performing sensitivity analysis on the significant
inputs and assumptions made by management in
preparing its calculation; and
• Assessing the adequacy of financial report
disclosures.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 31 December 2017, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
54
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability 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
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 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
31 December 2017.
We have audited the Remuneration Report included in the directors’ report for the year ended
In our opinion, the Remuneration Report of Jayex Healthcare Limited, for the year ended
31 December 2017, complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B A Mackenzie
Partner – Audit & Assurance
Melbourne, 27 February 2018
55
2
3
Key Audit Matters
Responsibilities of the Directors’ for the Financial Report
Key audit matters are those matters that, in our professional judgement, were of most significance
The Directors of the Company are responsible for the preparation of the financial report that gives
How our audit addressed the key audit matter
to cease operations, or have no realistic alternative but to do so.
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability 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
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 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 the directors’ report for the year ended
31 December 2017.
In our opinion, the Remuneration Report of Jayex Healthcare Limited, for the year ended
31 December 2017, complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B A Mackenzie
Partner – Audit & Assurance
Melbourne, 27 February 2018
55
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section,
we have determined the matters described below to be the key audit matters to be communicated
At 31 December 2017, the Group has goodwill and
Our procedures included, amongst others:
in our report.
Key audit matter
Goodwill and intangible balances
Note 14
other intangible assets amounting to $9,293,000
relating to the Jayex Technology Limited cash
generating unit.
The Group is required to perform an impairment test,
where goodwill is allocated to a CGU acquired in a
business combination during the current period,
before the end of the current period.
Management has assessed that the group has four
CGUs, and has allocated the goodwill and other
intangible assets to these CGUs.
Management has tested the CGU’s for impairment by
comparing their carrying amounts with their
recoverable amounts. The recoverable amounts were
determined using the greater of fair value less costs
of disposal and the value-in-use.
We have determined this is a key audit matter due to
the judgements and estimates required in
determining the appropriate CGU’s and calculating
the recoverable amount.
• Enquiring with management to obtain and
document an understanding of management’s
process and controls related to the assessment of
impairment, including management’s identification
of CGUs and the calculation of the recoverable
amount for the CGU;
• Evaluating the recoverable amounts against the
requirements of AASB 136: Impairment of Assets,
including consultation with our valuations experts;
• Reviewing management’s value-in-use
calculations to:
calculations;
– Test the mathematical accuracy of the
– Evaluate management’s ability to perform
accurate estimates;
– Test forecast cash inflows and outflows to be
derived by the CGUs assets; and
– Agree discount rates applied to forecast future
cash flows; and
• Performing sensitivity analysis on the significant
inputs and assumptions made by management in
preparing its calculation; and
• Assessing the adequacy of financial report
disclosures.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 31 December 2017, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
54
Jayex Healthcare Ltd
Shareholder information
31 December 2017
Unquoted equity securities
Options over ordinary shares issued
Substantial holders
Substantial holders in the Company are set out below:
Number
on issue
Number
of holders
250,000
1
Ordinary shares
Number held
% of total
shares
issued
80,937,385
19,003,378
52.69
12.37
Michael Boyd/Covenant Holdings (WA) Pty Ltd
Agam Jain/Vector Capital Limited
The information set out above regarding the names and number of shares held by substantial holders is as disclosed in
substantial holding notices given to the Company.
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
The voting rights attached to ordinary shares are set out below:
Voting rights
Ordinary shares
share shall have one vote.
Options
Options do not have voting rights attached.
There are no other classes of equity securities.
Jayex Healthcare Ltd
Shareholder information
31 December 2017
The shareholder information set out below was applicable as at 9 February 2018.
Corporate governance
to
Refer
governence/.
the Company's Corporate Governance statement at: http://jayexhealthcare.com.au/investor/corporate-
There is no current on-market buy-back.
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
COVENANT HOLDINGS (WA) PTY LTD (BOYD#4 A/C)
VECTOR LONDON LTD
NEW MEDICAL ENTERPRISES PTY LTD (BOYD#4 A/C)
MR DEAN HENRY CLEARY (THE CLEARWAY INVESTMENT A/C)
MR GORDON ASHLEY COOPER
STAINTON PTY LTD (BOYD FAMILY A/C)
DONOVAN PRODUCTS PTY LTD (FAMILY ACCOUNT)
MR MUN KEE CHANG
MR ROBERT JOHN MANTEL & MRS FIONA MANTEL (R & F MANTEL SUPER FUND A/C)
DR CHOON-JOO KHO
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
MR PETER HOWELLS
BERNE NO 132 NOMINEES PTY LTD (W 1253672 A/C)
DONOVAN PRODUCTS PTY LTD (THE DONOVAN PRODUCTS FAM A/C)
MR DENNIS CRAIG TELFORD
TWIN OAKS SUPER PTY LTD (TWIN OAKS SUPER FUND A/C)
EQUITAS NOMINEES PTY LIMITED (PB- 601187 A/C)
E2GO LTD
A & D HOLDINGS 2 PTY LTD (A & D HILL SUPERFUND A/C)
TOUCH SCREEN INFORMATION SYSTEMS PTY LTD
Number of
unquoted
options
Number of
holders of
ordinary
shares
-
-
-
-
1
1
-
9
42
113
185
75
424
8
Ordinary shares
Number held
% of total
shares
issued
74,431,855
19,003,378
6,505,530
4,140,000
3,143,903
2,815,942
2,746,916
2,651,433
2,250,000
1,818,000
1,801,365
1,558,243
1,053,750
1,025,000
1,000,000
1,000,000
810,000
756,262
658,000
638,000
129,807,577
48.45
12.37
4.23
2.69
2.05
1.83
1.79
1.73
1.46
1.18
1.17
1.01
0.69
0.67
0.65
0.65
0.53
0.49
0.43
0.42
84.49
56
57
The shareholder information set out below was applicable as at 9 February 2018.
Jayex Healthcare Ltd
Shareholder information
31 December 2017
Corporate governance
governence/.
There is no current on-market buy-back.
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
Jayex Healthcare Ltd
Shareholder information
31 December 2017
Unquoted equity securities
Refer
to
the Company's Corporate Governance statement at: http://jayexhealthcare.com.au/investor/corporate-
Options over ordinary shares issued
Substantial holders
Substantial holders in the Company are set out below:
Number of
unquoted
options
Number of
holders of
ordinary
shares
Michael Boyd/Covenant Holdings (WA) Pty Ltd
Agam Jain/Vector Capital Limited
Number
on issue
Number
of holders
250,000
1
Ordinary shares
Number held
% of total
shares
issued
80,937,385
19,003,378
52.69
12.37
The information set out above regarding the names and number of shares held by substantial holders is as disclosed in
substantial holding notices given to the Company.
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
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.
Options
Options do not have voting rights attached.
There are no other classes of equity securities.
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
MR ROBERT JOHN MANTEL & MRS FIONA MANTEL (R & F MANTEL SUPER FUND A/C)
COVENANT HOLDINGS (WA) PTY LTD (BOYD#4 A/C)
VECTOR LONDON LTD
NEW MEDICAL ENTERPRISES PTY LTD (BOYD#4 A/C)
MR DEAN HENRY CLEARY (THE CLEARWAY INVESTMENT A/C)
MR GORDON ASHLEY COOPER
STAINTON PTY LTD (BOYD FAMILY A/C)
DONOVAN PRODUCTS PTY LTD (FAMILY ACCOUNT)
MR MUN KEE CHANG
DR CHOON-JOO KHO
MR PETER HOWELLS
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BERNE NO 132 NOMINEES PTY LTD (W 1253672 A/C)
DONOVAN PRODUCTS PTY LTD (THE DONOVAN PRODUCTS FAM A/C)
MR DENNIS CRAIG TELFORD
TWIN OAKS SUPER PTY LTD (TWIN OAKS SUPER FUND A/C)
EQUITAS NOMINEES PTY LIMITED (PB- 601187 A/C)
E2GO LTD
A & D HOLDINGS 2 PTY LTD (A & D HILL SUPERFUND A/C)
TOUCH SCREEN INFORMATION SYSTEMS PTY LTD
Ordinary shares
Number held
% of total
shares
issued
74,431,855
19,003,378
48.45
12.37
-
-
-
-
1
1
-
6,505,530
4,140,000
3,143,903
2,815,942
2,746,916
2,651,433
2,250,000
1,818,000
1,801,365
1,558,243
1,053,750
1,025,000
1,000,000
1,000,000
810,000
756,262
658,000
638,000
9
42
113
185
75
424
8
4.23
2.69
2.05
1.83
1.79
1.73
1.46
1.18
1.17
1.01
0.69
0.67
0.65
0.65
0.53
0.49
0.43
0.42
129,807,577
84.49
56
57
Jayex Healthcare Ltd
Phone No: 1300 330 611
ABN 15 119 122 477