Jayex Healthcare Ltd
ANNUAL REPORT
2018
Jayex Healthcare Limited
Contents
31 December 2018
Corporate directory
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of Jayex Healthcare Limited
Shareholder information
General information
2
3
16
17
18
19
20
21
55
56
60
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:
Registered office
Level 4
100 Albert Road
South Melbourne VIC 3205
Principal place of business
17B Cribb Street
Milton QLD 4064
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 March 2019. The
directors have the power to amend and reissue the financial statements.
1
Jayex Healthcare Limited
Corporate directory
31 December 2018
Directors
Registered office
Michael Boyd
Brian Renwick
Agam Jain
Michael Chan
Level 4
100 Albert Road
South Melbourne VIC 3205
Principal place of business
17B Cribb Street
Milton QLD 4064
Share register
Auditor
Solicitors
Boardroom Pty Ltd
Level 12, Grosvenor Place
225 George Street
Sydney NSW 2000
Phone: 1300 737 760 (in Australia); +61 29290 9600 (international)
Grant Thornton Audit Pty Ltd
Collins Square, Tower 5, Level 22
727 Collins Street
Melbourne VIC 3008
SWS Lawyers
41-45 Newcomen Street
Newcastle NSW 2300
Stock exchange listing
Jayex Healthcare Limited shares are listed on the Australian Securities Exchange
(ASX code: JHL)
Website
http://jayexhealthcare.com.au
2
Jayex Healthcare Limited
Directors' report
31 December 2018
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 Limited (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 2018.
Directors
The following persons were directors of Jayex Healthcare Limited 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 (Non-Executive Director)
Michael Chan (Non-Executive Director)
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 $1,125,000 (31 December 2017:
$2,496,000).
Positive Overall Improvements
The Company has successfully implemented its priority activities for 2018, which included ensuring that the Company
reduced its losses, continued to invest in its core healthcare capabilities, as well as invest in future leading-edge healthcare
opportunities.
Further, and importantly, the Company continues to demonstrate the positive improvements from the extensive
restructuring program initiated in 2017.
The key achievements include:
●
Completion of the “Jayex Connect Platform” in Q4 2018 – being a critical cloud-based development in the
presentation to customers of the Company’s ‘end-to-end’ integrated healthcare technologies
Completion of procedures for the roll-out of the Jayex Connect Platform in January 2019
No further loan advances during 2018 under the loan agreement – reflecting continued financial improvement and
closer alignment of the business operating costs with revenues, and
Significant improvement in the margins and profitability of the Company compared to prior periods.
●
●
●
We are pleased that, after much effort, the Company is now well-positioned to realise on the benefits of the reconstruction
program, including the rationalisation of the Company’s technologies through the innovative Jayex Connect platform.
New Jayex Connect Platform
A major achievement has been the successful completion and rolling out the Jayex Connect Platform. The Connect
Platform is a new and innovative cloud-based Patient Engagement platform which provides all the tools for our customers
in a single, integrated easy-to-use dashboard environment.
The Connect Platform provides the Company’s customers with all the online tools needed to improve the patient
experience and boost patient engagement within the continuum of healthcare.
This Platform will not only provide our customers with an enhanced and improved system from Jayex, it will also give in the
coming months and years further capability, supporting better health outcomes by deploying additional capability in
telehealth applications, wearable health monitoring devices, as well as deploying Artificial Intelligence know-how.
3
Jayex Healthcare Limited
Directors' report
31 December 2018
New Opportunities
The Company continues to look at new opportunities to expand the application of its existing technologies into new
markets, and for complimentary technologies to enhance the breadth of our potential customers.
Jayex continues to monitor and pursue opportunities to commercialise its proprietary P2U® electronic prescription
processing technology and BluePoint® remote dispensing terminal technology in respect to the prescribing, sale and
distribution of legally approved medical cannabis products.
The Company has invested approximately $350,000 in the development of technologies and, in particular the P2U® and
BluePoint® technologies, to support the growing global medical cannabis market. The global medical cannabis market size
in 2017 was estimated by Research and Markets to be more than US$ 11 billion. The global market is expected by
Research and Markets to grow and reach an estimated US$ 37 billion by 2023. This is a CAGR of around 22% during
2017-2023. Jayex with its current enhanced technologies will be able to support this growing market.
The Company will also continue to look at future investments and opportunities in this growth market in 2019 and beyond.
Financial Improvements
The Company continued to benefit from the restructuring program that was initiated on the 1st June 2017 and continued
into the 1st quarter of 2018. The most obvious benefit was the improvement of EBIT loss after income tax. The loss for the
consolidated entity after providing for income tax amounted to $1,125,000 (31 December 2017: $2,496,000). In addition, no
further loan advances during 2018 under the loan agreement were undertaken by the Company. This reflected continued
financial improvement as well as closer alignment of the business operating costs with revenues.
The improved financial position of the Company was also assisted through the significant improvement in the margins and
profitability of the customers’ projects that Jayex undertook. These margin improvements are a direct result of our
development program. In 2018 Jayex delivered to our customers more Jayex developed capability rather than relying on
third-party capability. Our expenses related to raw materials and consumables used were reduced by $848,000 in 2018.
Revenue for the group was down 8.4%, from $7.503m in 2017 to $6.749m. The reduction in revenue was primarily due to
delays imposed by customers, whereby customer sites were not ready to accept delivery of, or installations of, Jayex
equipment and services ordered by those customers and therefore invoicing by Jayex for those orders was delayed.
Significant changes in the state of affairs
On 4 June 2018, the Consolidated entity issued 8,740,150 fully paid ordinary shares to Directors in lieu of outstanding
Directors fees pursuant to Resolutions 4 to 7 of the Company’s Notice of Annual General Meeting held on 25 May 2018 as
approved by shareholders.
On 18 June 2018, the Consolidated entity issued 250,000 fully paid ordinary shares to exercise of options expiring 2
February 2019.
On 13 July 2018, the Consolidated entity issued 5,000,000 fully paid ordinary shares and 15,000,000 unlisted performance
rights in accordance with the terms and conditions of the Consulting Term Sheet executed on 6 July 2018 between the
Company and Mr Ross Smith.
On 19 October 2018, the Consolidated entity announced the termination of the conditional healthcare technology licence
agreement entered into with MediCann NZ Ltd and MediGlobal Ltd on 6 July 2018. The Consolidated group denies
MediCann’s statement that the termination was due to a conflict of interest and failure to disclose solvency issues and
reserves all of its rights.
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
The following matters have arisen since 31 December 2018 that have 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.
4
Jayex Healthcare Limited
Directors' report
31 December 2018
On 18 March 2019 the Company announced to the market that:
●
It was implementing a revised strategy to commercialise its P2U® script processing and BluePoint® remote
dispensing technologies in New Zealand’s emerging medical cannabis market and had established a wholly-owned
NZ subsidiary, with an experienced, qualified and high-profile NZ board to guide and execute this strategy;
an application for the appropriate licenses to establish a medical cannabis research facility, and, subject to regulations
being passed, commercially cultivate medical cannabis, was progressing with NZ’s Ministry of Health;
commercial discussions to produce medical cannabis products for distribution via the Company’s technology were
ongoing, and were subject to the granting of licences and regulation; and
based on current plans, the Company expected to have completed the required modifications to its BluePoint®
technology to suit the NZ medical cannabis market by the end of Q3 2019.
●
●
●
No other matter or circumstance has arisen since 31 December 2018 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 ultimate goal remains unchanged. Jayex seeks to create superior healthcare solutions that are user-friendly for
patients, reliable and easy to maintain for healthcare professionals, offer good value for purchasers and provide long-term
returns for our investors, while creating a Company culture that employees feel valued in and proud of.
We will do this by accelerating our development, as well as look to partners, collaborators and M&A opportunities to create
a comprehensive end-to-end capability healthcare platform. This platform will support patients and healthcare
professionals in the Primary, Secondary, Tertiary and ‘Green’ care markets, ranging from but not limited to audiology,
cancer management, community, dental, general practices, outpatients, phlebotomy, and x-ray.
We will incorporate artificial intelligence algorithms, internet of things, and data analysis that will vastly improve healthcare
outcomes for patients, whilst providing such services at very competitive rates to service healthcare providers.
Jayex currently touches 50 million patients annually across these care markets. We will capitalise and utilise our installed
base to deliver further and enhanced capability to these care markets through our comprehensive and growing end-to-end
cloud-based platform. Our platform will provide everything from Appointment booking, Patient calling, Patient check-in,
through to health messaging, self-care monitoring, script management, remote terminal dispensing of pharmaceutical
and/or medical cannabis products and telehealth solutions.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
5
Jayex Healthcare Limited
Directors' report
31 December 2018
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
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 26 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.
Other current directorships:
-
Former directorships (last 3 years): -
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Member of Audit and Risk Committee, member of Remuneration and Nomination
Committee
78,798,079 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.
-
Other current directorships:
Former directorships (last 3 years): -
Special responsibilities:
Chairman of Audit and Risk Committee, Chairman of Remuneration and Nomination
Committee
1,245,653 fully paid ordinary shares
Interests in shares:
6
Jayex Healthcare Limited
Directors' report
31 December 2018
Name:
Title:
Qualifications:
Experience and expertise:
Agam Jain
Non-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.
Other current directorships:
-
Former directorships (last 3 years): -
Special responsibilities:
Member of Audit and Risk Committee, member of Remuneration and Nomination
Committee
23,312,061 fully paid ordinary shares
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Michael Chan
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.
Other current directorships:
-
Former directorships (last 3 years): -
Interests in shares:
1,705,025 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.
'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.
7
Jayex Healthcare Limited
Directors' report
31 December 2018
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 2018, 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
9
8
9
8
9
9
9
9
-
2
2
1
-
2
2
2
-
-
-
-
-
-
-
-
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
●
8
Jayex Healthcare Limited
Directors' report
31 December 2018
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 2018.
9
Jayex Healthcare Limited
Directors' report
31 December 2018
The key management personnel of the consolidated entity consisted of the following directors of Jayex Healthcare Limited:
●
●
●
●
Michael Boyd (Chairman)
Brian Renwick (Non-Executive Director)
Agam Jain (Non-Executive Director)
Michael Chan (Non-Executive Director)
And the following persons:
●
●
●
Nick Fernando (Chief Executive Officer)
Tony Panther (Chief Financial Officer) (left the Company on 31 March 2018)
Nathan Woodard (Chief Financial Officer) (appointed 28 August 2018)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Cash
Super-
Long
service
and fees **
$
bonus
$
allowance
$
annuation
$
leave
$
Equity-
settled -
options
$
Termination
benefit
$
Total
$
60,000
30,000
30,000
55,188
-
-
-
-
239,099
46,250
49,408
509,945
17,711
-
-
17,711
-
-
-
-
-
-
-
-
-
-
-
-
-
4,394
-
4,394
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
30,000
30,000
55,188
-
36,178
-
36,178
256,810
86,822
49,408
568,228
2018
Non-Executive
Directors:
Mr M Boyd
(Chair)
Mr B Renwick
Mr M Chan
Mr A Jain
Other Key
Management
Personnel:
Mr N Fernando*
Mr T Panther**
Mr. N Woodard***
*
**
The bonus was paid in cash and was determined in accordance with the Board’s assessment of achievement of
relevant performance criteria in relation to the recipient, including: Group revenue, market share, technical
developments, business development, internal collaboration and integration, customer satisfaction.
Mr T Panther ceased employment with the Company on 31 March 2018, as agreed with the Company. A termination
benefit was paid in accordance with contractual obligations.
*** Mr N Woodard was employed by Jayex Technology Limited from 28 August 2018.
10
Jayex Healthcare Limited
Directors' report
31 December 2018
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
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees**
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
60,000
30,000
22,500
54,318
226,853
185,000
578,671
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,575
17,575
-
-
-
-
-
-
-
-
-
-
60,000
30,000
22,500
-
54,318
-
-
-
226,853
202,575
596,246
*
**
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.
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 M Jain
Other Key Management
Personnel:
Mr N Fernando
Mr T Panther
Mr. N Woodard
Fixed remuneration
2017
2018
At risk - STI
At risk - LTI
2018
2017
2018
2017
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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:
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.
11
Jayex Healthcare Limited
Directors' report
31 December 2018
Name:
Title:
Agreement commenced:
Term of agreement:
Nathan Woodard
Chief Financial Officer
28 August 2018
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.
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 2018 or 31 December 2017.
On 04 June 2018, the Group announced that 8,740,150 shares had been issued to Directors all of which were in
settlement of existing liabilities for outstanding accrued Directors fees pursuant to Resolutions 4 to 7 of the Company’s
Notice of Annual General Meeting held on 25 May 2018 as approved by shareholders.
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 2018.
Additional information
The earnings of the consolidated entity for the two years to 31 December 2018 are summarised below:
Sales revenue
EBITDA
EBIT
Loss after income tax
2018
$'000
2017
$'000
6,749
(342)
(885)
(1,125)
7,503
(1,919)
(2,437)
(2,496)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2018
2017
2016
Share price at financial year end (cents)
1.9
1.6
5.0
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.
12
Jayex Healthcare Limited
Directors' report
31 December 2018
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
81,822,554
115,000
19,213,378
300,000
101,450,932
3,481,055
1,130,653
3,123,417
1,005,025
8,740,150
-
-
975,266
400,000
1,375,266
(6,505,530) 78,798,079
-
1,245,653
- 23,312,061
1,705,025
-
(6,505,530) 105,060,818
*
**
Includes shares held when the person commenced or ceased as a member of key management personnel.
On 04 June 2018, the Group announced that 8,740,150 shares had been issued to Directors all of which were in
settlement of existing liabilities for outstanding accrued Directors fees pursuant to Resolutions 4 to 7 of the
Company’s Notice of Annual General Meeting held on 25 May 2018 as approved by shareholders.
Other transactions with key management personnel and their related parties
During the financial period:
- loans were made by the company’s chairman to the consolidated entity; and
- payments of rental premises were made to a related entity of a director of the consolidated entity
Details of these transactions are disclosed below:
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.
Consolidated Consolidated
2018
$
2017
$
Other transactions:
Loan interest paid or payable to Covenant Holdings (WA) 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)
146,200
115,347
132,832
126,029
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated Consolidated
2018
$
2017
$
Current payables:
Accrued loan interest payable to Covenant Holdings (WA) Pty Ltd (an entity related to
director Michael Boyd)
126,679
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:
13
Jayex Healthcare Limited
Directors' report
31 December 2018
Consolidated Consolidated
2018
$
2017
$
Non-current borrowings:
Loans from Covenant Holdings (WA) Pty Ltd (an entity related to director Michael Boyd)
3,055,000
2,885,000
Terms and conditions
The terms of the loans made by Covenant Holdings (WA) Pty Ltd to companies within the consolidated entity are as
follows:
Loan to Jayex Healthcare Limited: Balance at 31 December 2018 and 31 December 2017 - $2,000,000; interest rate - 8%
per annum
Loan to Jayex Healthcare Limited: Balance at 31 December 2018 - $1,000,000 (31 December 2017: $830,000); interest
rate - 12% per annum
Loan to P2U Pty Ltd: Balance at 31 December 2018 and 31 December 2017 - $55,000; loan is interest free.
All loans are unsecured and are repayable on 1 April 2020.
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of Jayex Healthcare Limited under option outstanding at the date of this report.
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 under performance rights
Unissued ordinary shares of Jayex Healthcare Limited under performance rights at the date of this report are as follows:
Grant date
13 July 2018
Expiry date
Exercise
price
Number
under rights
Vest upon satisfaction of defined performance
conditions
$0.00
15,000,000
No person entitled to exercise the performance right had or has any right by virtue of the performance right to participate in
any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Jayex Healthcare Limited issued on the exercise of options during the period ended 31
December 2018 and up to the date of this report.
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 25 to the financial statements.
14
Jayex Healthcare Limited
Directors' report
31 December 2018
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 directors are of the opinion that the services as disclosed in note 26 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
●
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.
Auditor
Grant 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 directors
___________________________
Michael Boyd
Chairman
28 March 2019
Melbourne
15
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 9320 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 2018, I declare that, to the best of my knowledge and belief, there have
been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S C Trivett
Partner - Audit & Assurance
Melbourne, 28 March 2019
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘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.
Jayex Healthcare Limited
Consolidated statement of profit or loss and other comprehensive income
For the period ended 31 December 2018
Note
Consolidated
2018
$'000
2017
$'000
Revenue
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Professional services expenses
Depreciation and amortisation expense
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 Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the period, net of tax
Total comprehensive income for the period attributable to the owners of Jayex
Healthcare Limited
4
5
5
5
6
6,749
7,503
125
-
(1,249)
(3,744)
(338)
(543)
(684)
(158)
(242)
(50)
(250)
(501)
(357)
(2,097)
(4,562)
(683)
(518)
(511)
(246)
(246)
(138)
(326)
(614)
(184)
(1,242)
(2,622)
117
126
(1,125)
(2,496)
13
13
(76)
(76)
(1,112)
(2,572)
Cents
Cents
Basic earnings per share
Diluted earnings per share
33
33
(0.7)
(0.7)
(1.6)
(1.6)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
17
Jayex Healthcare Limited
Consolidated statement of financial position
As at 31 December 2018
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
Contract liabilities
Other liabilities
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
Note
Consolidated
2018
$'000
2017
$'000
7
8
9
10
11
12
13
14
15
16
17
18
18
19
20
418
1,499
388
57
2,362
27
58
9,176
9,261
1,015
1,262
314
95
2,686
50
83
9,293
9,426
11,623
12,112
1,336
-
54
252
1,534
-
3,176
3,054
718
3,772
1,256
9
77
303
1,482
118
3,245
2,885
827
3,712
6,948
6,957
4,675
5,155
21
22
23
25,996
(1,724)
(19,597)
25,420
(1,793)
(18,472)
4,675
5,155
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
18
Jayex Healthcare Limited
Consolidated statement of changes in equity
For the period ended 31 December 2018
Consolidated
Shared-
based
payment
reserve
$'000
Foreign
exchange
reserve
$'000
Issued
capital
$'000
Accumulated
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 income for the period,
net of tax
Total comprehensive income for the period
Transactions with owners in their capacity as
owners:
Share-based payments (note 34)
Exercise of options
-
-
-
-
-
-
-
480
96
(480)
-
(2,496)
(2,496)
(76)
(76)
-
-
-
(76)
(2,496)
(2,572)
-
-
96
-
Balance at 31 December 2017
25,420
62
(1,855)
(18,472)
5,155
Consolidated
Shared-
based
payment
reserve
$'000
Foreign
exchange
reserve
$'000
Issued
capital
$'000
Accumulated
losses
$'000
Total equity
$'000
Balance at 1 January 2018
25,420
62
(1,855)
(18,472)
5,155
Loss after income tax benefit for the period
Other comprehensive income for the period,
net of tax
Total comprehensive income for the period
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 21)
Share-based payments (note 34)
Exercise of options
Balance at 31 December 2018
-
-
-
514
-
62
25,996
-
-
-
-
118
(62)
118
-
13
13
-
-
-
(1,125)
(1,125)
-
13
(1,125)
(1,112)
-
-
-
514
118
-
(1,842)
(19,597)
4,675
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
19
Jayex Healthcare Limited
Consolidated statement of cash flows
For the period ended 31 December 2018
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest and other finance costs paid
Note
Consolidated
2018
$'000
2017
$'000
7,832
(8,506)
8,789
(10,991)
(674)
(76)
(2,202)
(139)
Net cash used in operating activities
32
(750)
(2,341)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
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
12
13
-
-
-
170
-
170
(580)
1,015
(17)
(17)
(223)
(240)
2,955
(670)
2,285
(296)
1,334
(23)
Cash and cash equivalents at the end of the financial period
7
418
1,015
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
20
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
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.
AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments (2014) became mandatorily effective
on 1 January 2018. Accordingly, these standards apply for the first time to this set of financial statements. The nature and
effect of changes arising from these standards are summarised later in this section.
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 2018 of the consolidated entity, as disclosed in the statement of financial
position, is an apparent excess of current liabilities over current assets of $814,000 (2017: $559,000). However, the current
liabilities as at 31 December 2018 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 2018, the adjusted working capital has a surplus of
approximately $972,000.
The cash balance at 31 December 2018 was $418,000 (2017: $1,015,000).
The consolidated entity incurred a net loss after tax for the financial year ended 31 December 2018 of $1,125,000 (financial
year ended 31 December 2017: $2,496,000) and had net cash outflows from operating activities of $750,000 (financial
year ended 31 December 2017: $2,341,000).
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 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.
New Accounting Standards and Interpretations adopted as at 1 January 2018
AASB 15: Revenue from Contracts with Customers
AASB 15 replaces AASB 118 Revenue, AASB 111 Construction Contracts and several revenue-related Interpretations.
The new Standard has been applied as at 1 January 2018 using the modified retrospective approach. Under this method,
the cumulative effect of initial application is recognised as an adjustment to the opening balance of retained earnings at 1
January 2018 and comparatives are not restated. In accordance with the transition guidance, AASB 15 has only been
applied to contracts that are incomplete as at 1 January 2018.
The standard require:
21
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
●
●
●
●
contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within
the contract
determination of 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
recognition of revenue when each performance obligation is satisfied
Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers, the
significant judgments 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 has concluded that revenue from its sales should be recognised either at the point in time or over
the time, when (or as) the Consolidated Entity satisfies performance obligations by transferring the promised services to its
customers. The adoption of AASB 15 did not have an impact on the timing or the amount of revenue recognition.
On the date of initial application of AASB15, 1 January 2018, the Consolidated entity reclassified $1,600,000 from other
liabilities to contract liabilities.
Credit risk is presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation
is 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 selects an appropriate measure of progress to determine how much revenue should be recognised as
the performance obligation is satisfied. Contracts with customers are 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.
AASB 9: Financial instruments
The consolidated entity has adopted AASB9 from 1 January 2018. This standard replaces AASB 139 Financial
Instruments: Recognition and Measurement. AASB 9 includes revised guidance on the classification and measurement of
financial instruments, including a new expected credit loss model for calculation of impairment on financial assets, and new
general hedge accounting requirements. It also carries forward guidance on recognition and derecognition of financial
instruments from AASB 139.
To assess for any expected credit losses under AASB 9, there is consideration around the probability of default upon initial
recognition of the asset, and subsequent consideration as to whether there have been any significant increases in credit
risk on an ongoing basis at each reporting period. To assess whether there is a significant increase in credit risk the
consolidated entity compares the risk of a default occurring on the asset as at the reporting date with the risk of default as
at the date of initial recognition.
In making this assessment, as far as available, the consolidated entity considers both quantitative and qualitative
information that is reasonable and supportable, including historical experience and forward-looking information that is
available without undue cost or effort. Forward-looking information considered includes the future prospects of the
industries in which the consolidated entity’s debtors operate, obtained from economic expert reports, financial analysts,
governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external
sources of actual and forecast economic information that relate to the consolidated entity’s core operations.
In particular, as far as available, the following information is taken into account when assessing significant movements in
credit risk:
22
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
●
●
●
●
●
●
●
actual or expected significant adverse changes in business, financial or economic conditions that are expected to
cause a significant change to the borrower’s ability to meet its obligations
actual or expected significant changes in the operating results of the borrower
significant increases in credit risk on other financial instruments of the same borrower
external credit rating
significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or
credit enhancements
significant changes in the expected performance and behaviour of the borrower, including changes in the payment
status of borrowers in the consolidated entity and changes in the operating results of the borrower
macroeconomic information such as market interest rates and growth rates
The Consolidated Entity assesses on a forward-looking basis the expected credit losses associated with its financial
assets. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For
trade receivables, the Consolidated Entity applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. For trade receivables, a simplified approach to
measuring expected credit losses using a lifetime expected loss allowance is available. There is no material effect on the
Consolidated entity recognition or measurement of financial assets or liabilities trade receivables, there is no change to the
impairment allowance at 1 January 2018 (of nil) and no impairment allowance at 31 December 2018 due to favourable
credit history.
New Accounting Standards and Interpretations 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 year ended 31 December 2018. 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 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions,
a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12
months or less and leases of low-value assets (such as personal computers and small office furniture) where an
accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit
or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or
dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the
leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit
or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into
both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases.
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
Operating cash outflows will be lower and financing cash flows 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.
Interest can also be included within financing activities
23
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
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').
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 2018 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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Jayex Healthcare Limited's functional and
presentation currency.
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.
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.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
24
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
Revenue recognition
The consolidated entity predominantly derives revenue from the sale of goods and services. Significant contracts with
customers depict various performance obligations, such as:
●
●
●
●
●
Supply and delivery of equipment, along with the software license to run on such equipment. This also include
installation services and web portal access;
Additional services (if contracted and included to that standard services agreement);
Annual, ongoing software license and support services;
Software customisation (development) and related support services; and
Annual and ongoing extended warranty services.
To determine whether to recognise revenue, the Consolidated entity follows a 5-step process:
●
●
●
●
●
Identifying the contract with a customer
Identifying the performance obligations
Determining the transaction price
Allocating the transaction price to the performance obligations
Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is recognised either at a point in time or over time, when (or as) the Consolidated entity satisfies performance
obligations by transferring the promised goods or services to its customers.
Rendering of services
All deals are done on an annual basis with the option to pay for additional year(s)' warranty and software support at the
time of the sale in advance. Revenue is recognised on a straight-line basis over the term of the contract for such services.
This method best depicts the transfer of services to the customer as the Consolidated entity’s historical experience
demonstrates no statistically significant variation in the quantum of services provided in each year of a multi-year contract.
Under AASB 15, the Consolidated entity concluded that revenue from warranty and software support services will continue
to be recognised over time, using an input method to measure progress towards complete satisfaction of the service similar
to the previous accounting policy, because the customer simultaneously receives and consumes the benefits provided by
the Consolidated entity.
The Consolidated entity recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Consolidated
entity satisfies a performance obligation before it receives the consideration, the Consolidated entity recognises either a
contract asset or a receivable in its statement of financial position, depending on whether something other than the
passage of time is required before the consideration is due.
Equipment (Kiosk) sale and installation
The supply, installation and commissioning of requested equipment by the consolidated entity to the customer in
accordance with a contract. Revenue is recognized at the point in time when the equipment has been commissioned and
commences operation in accordance with specifications, at which point the performance obligation is satisfied. The
equipment can only be installed by the company, as such the customer cannot derive benefits from the equipment until
after installation of the software to run it, consequently, the revenue is recognized at a point in time after installation.
Software licences
Provision, over a specified period, of licence permitting and enabling the customer to access and use the software product
supplied by the consolidated entity. Revenue is recognized on a straight line basis over the specified period, i.e. over time.
Extended warranties
Provision, over a specified period, of an extended warranty in favour of the customer to repair or replace equipment
previously supplied by the consolidated entity. Revenue is recognized on a straight line basis over the specified warranty
period, i.e. over time.
25
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
Software support services
Provision by the consolidated entity, over a specified period, of telephone and online software support services to the
customer, whereby client queries and problems are resolved by consolidated entity staff as required. Revenue is
recognized on a straight line basis over the specified period, i.e. over time.
Software development services
The supply, installation and commissioning of specific specialised software enhancements as required by the customer,
which are outside of, or in addition to, the standard software product offered by the consolidated entity. Revenue is
recognized over time as and when the software development services are delivered and recognition ceases once the
project has been commissioned and commences operation in accordance with customer specifications at which point the
performance obligation is satisfied. At this point any further service provided in relation to such development would be
covered by Software support services as described above.
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.
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.
26
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
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.
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.
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
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.
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.
27
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
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.
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.
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.
28
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
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.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Consolidated entity becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when
the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Financial assets are classified according to their business model and the characteristics of their contractual cash flows.
Except for those trade receivables that do not contain a significant financing component and are measured at the
transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as hedging
instruments, are classified into the following four categories:
●
●
●
●
Financial assets at amortised cost
Financial assets at fair value through profit or loss (FVTPL)
Equity instruments at fair value through other comprehensive income (FVTOCI)
Debt instruments at fair value through other comprehensive income (FVTOCI)
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other
expenses.
Financial assets at amortised cost
Financial assets with contractual cash flows representing solely payments of principal and interest and held within a
business model of ‘hold to collect’ contractual cash flows are accounted for at amortised cost using the effective interest
method. The consolidated entity’s trade and most other receivables fall into this category of financial instruments that were
previously classified as loans and receivables under AASB 139.
29
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
The Consolidated Entity does not have any financial instruments in the categories FVTPL, Equity FVTOCI and Debt
FVTOCI.
Impairment of financial assets
AASB 9’s impairment requirements use more forward looking information to recognize expected credit losses – the
‘expected credit losses (ECL) model’. Instruments within the scope of the new requirements included loans and other debt-
type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured
under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at
fair value through profit or loss.
The Consolidated entity considers a broader range of information when assessing credit risk and measuring expected
credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
Trade and other receivables and contract assets
The Consolidated entity assess impairment of trade receivables on a collection basis as they possess shared credit risk
characteristics they have been grouped on the days past due.
Classification and measurement of financial liabilities
As the accounting for financial liabilities remains largely unchanged from AASB 139, the Consolidated entity's financial
liabilities were not impacted by the adoption of AASB 9. However, for completeness, the relevant accounting policy is
disclosed below.
The Consolidated entity's financial liabilities include borrowings and trade and other payables.
Financial liabilities are initially measured at fair value, and, where and to the extent applicable, adjusted for transaction
costs unless the Consolidated entity designate a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives
and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in
profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments).
All interest-related charges and if applicable charges in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
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.
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.
30
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either:
(i) 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; or,
(ii) Barrier option pricing model which takes into account largely the same factors as the above model, but also takes into
account the relevant predetermined level (the barrier), with the fair value calculated using a trinomial lattice.
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.
31
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 1. Significant accounting policies (continued)
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.
32
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
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.
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.
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.
33
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 3. Operating segments (continued)
Major customers
The consolidated entity does not have a major customer that contributes more than 10% or more to the consolidated
entity's revenue.
Geographical information
Australia
United Kingdom
Sales to external customers
Geographical non-current
assets
2018
$'000
2017
$'000
2018
$'000
2017
$'000
1,097
5,777
1,038
6,465
320
8,941
502
8,924
6,874
7,503
9,261
9,426
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
Consolidated
2018
$'000
2017
$'000
6,749
7,503
Sales revenue is revenue generated from the consolidated entity's healthcare industry service provision businesses.
For 2018, revenue includes $1,270,000 (2017: $1,205,000) included in the contract liability balance at the beginning of the
period.
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
Supply and installation of Kiosks (at a point of time)
Software licences and support services (over time)
Extended warranty (over time)
Software development customisation services (over time)
Software development supports services (over time)
Consolidated
2018
$'000
2017
$'000
3,387
2,373
669
89
231
4,472
2,038
614
176
203
6,749
7,503
34
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 5. 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
2018
$'000
2017
$'000
26
29
213
304
517
543
201
288
489
518
357
184
250
326
48
123
458
96
Employee benefits expense excluding superannuation and share based payments
Employee benefits expense excluding superannuation and share based payments
3,696
4,343
35
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 6. 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 20)
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%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
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
Adjustment to deferred tax balances as a result of change in statutory tax rate
Income tax benefit
Amounts charged directly to equity
Deferred tax liabilities (note 20)
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5%
Consolidated
2018
$'000
2017
$'000
28
(145)
(117)
(19)
(107)
(126)
(145)
(107)
(1,242)
(2,622)
(342)
(721)
126
(156)
(87)
13
(446)
493
(14)
(150)
-
(117)
26
(95)
(119)
24
(885)
926
(60)
(46)
(61)
(126)
Consolidated
2018
$'000
2017
$'000
36
-
13,360
11,596
3,674
3,189
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 7. Cash and cash equivalents
Cash at bank
Consolidated
2018
$'000
2017
$'000
418
1,015
36
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 8. Trade and other receivables
Trade receivables
Other receivables
GST receivable
Consolidated
2018
$'000
2017
$'000
1,457
18
24
1,226
18
18
1,499
1,262
All of the Consolidated entity’s trade and other receivables have been reviewed for indicators of impairment and concluded
that there is no impairment allowance at 31 December 2018 as the main clients of the Consolidated entity are hospitals
which have not demonstrated any difficulties in making payment.
Note 9. Inventories
Stock on hand - at cost
Note 10. Other
Prepayments
Note 11. Receivables
Other receivables
Consolidated
2018
$'000
2017
$'000
388
314
Consolidated
2018
$'000
2017
$'000
57
95
Consolidated
2018
$'000
2017
$'000
27
50
37
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 12. Property, plant and equipment
Motor vehicles - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
Furniture and fittings - at cost
Less: Accumulated depreciation
Consolidated
2018
$'000
2017
$'000
71
(59)
12
252
(222)
30
70
(54)
16
58
70
(48)
22
241
(202)
39
68
(46)
22
83
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 2017
Additions
Depreciation expense
Balance at 31 December 2017
Exchange differences
Depreciation expense
Balance at 31 December 2018
Note 13. Intangibles
Furniture &
fittings
$'000
Office
equipment
$'000
Computer
equipment
$'000
Motor vehicle
$'000
Total
$'000
12
15
(5)
22
(1)
(6)
15
49
1
(13)
37
3
(10)
30
-
1
-
1
-
-
1
33
-
(10)
23
(1)
(10)
12
94
17
(28)
83
1
(26)
58
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
38
Consolidated
2018
$'000
2017
$'000
9,944
(4,085)
5,859
9,676
(4,085)
5,591
586
586
1,255
(685)
570
3,254
(1,093)
2,161
1,201
(444)
757
3,113
(754)
2,359
9,176
9,293
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 13. 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 2017
Additions
Exchange differences
Amortisation expense
Balance at 31 December 2017
Exchange differences
Amortisation expense
Balance at 31 December 2018
Goodwill
$'000
Patents &
trademarks
$'000
Software
platform
$'000
Customer
relationships
$'000
Total
$'000
5,539
-
52
-
5,591
268
-
5,859
586
-
-
-
586
-
-
586
740
223
(5)
(201)
757
27
(214)
2,643
-
4
(288)
2,359
106
(304)
9,508
223
51
(489)
9,293
401
(518)
570
2,161
9,176
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.
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.
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 Limited (United Kingdom)
Consolidated
2018
$'000
2017
$'000
5,859
5,591
39
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 13. Intangibles (continued)
Methodology
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 Jayex Technology Limited CGU using a value
in use approach.
The recoverable amounts of the CGU has 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 the 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.
Impairment testing for CGUs containing goodwill
Goodwill arose in the business combinations for the acquisition of Jayex Technology Limited 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 Jayex Technology Limited CGU using discounted cash flows. For the 2018
reporting period, the recoverable amount of the cash generating units (CGUs) was determined based on value-in-use
calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets
approved by management covering a one-year period. Cash flows beyond the one-year period are extrapolated using the
estimated growth rates and assumptions used in the value in use calculations are stated below:
Discount rate - 14.75%
Foreign exchange rate - £/$A 0.5523
Period over which cash flows projected - 5 years
•
•
•
• Management has made numerous assumptions about the budgeted revenue to be achieved in 2019, and this has
resulted in a revenue growth rate of 22% compared to the actual revenues in 2018, this contemplates successful
launch of new products from existing assets which would increase the company’s revenues and cash flows.
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 - 5.3% per annum
Apart from the considerations described in determining the value-in-use of the cash-generating units described above,
management is not currently aware of any other probable changes that would necessitate changes in its key estimates.
However, the estimate of recoverable amount for the consulting unit is particularly sensitive to the discount rate. If the
discount rate used is increased by 3%, an impairment loss of $29,000 would have to be recognised.
Impairment
The Consolidated entity has performed an impairment assessment based on its cash generating units (CGU), which were
the Jayex Technology Limited CGU.
The Company determined that the recoverable amount in relation the Jayex Technology Limited CGU exceeded its
carrying value of assets as at 31 December 2018, therefore no adjustment to its carrying value was required.
40
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 14. Trade and other payables
Trade payables
Accrued expenses
GST payable
Other payables
Refer to note 24 for further information on financial instruments.
Note 15. Borrowings
Other loans
Refer to note 24 for further information on financial instruments.
Note 16. Employee benefits
Annual leave
Note 17. Provisions
Provision for warranties
Provision for credit notes
Consolidated
2018
$'000
2017
$'000
432
515
181
208
506
409
137
204
1,336
1,256
Consolidated
2018
$'000
2017
$'000
-
9
Consolidated
2018
$'000
2017
$'000
54
77
Consolidated
2018
$'000
2017
$'000
238
14
252
275
28
303
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.
41
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 17. Provisions (continued)
Movements in provisions
Movements in each class of provision during the current financial period, other than employee benefits, are set out below:
Warranties Credit notes
$'000
$'000
275
(37)
238
28
(14)
14
Consolidated
2018
$'000
2017
$'000
1,534
-
1,482
118
1,534
1,600
Consolidated
2018
$'000
2017
$'000
3,054
2,885
Consolidated - 2018
Carrying amount at the start of the period
Reduction in provision required
Carrying amount at the end of the period
Note 18. Contract and other liabilities
Other liabilities consist of the following:
Other liabilities
Contract liabilities - Deferred service income
Revenue received in advance
Carrying amount at the end of the period
Deferred revenue represents sales invoiced in advance for the provision of contracted services.
Note 19. Borrowings
Borrowings - non-current
Refer to note 24 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.
42
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 20. 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 6)
Charged to equity (note 6)
Closing balance
Note 21. Issued capital
Consolidated
2018
$'000
2017
$'000
658
6
54
-
718
827
(145)
36
718
765
8
64
(10)
827
934
(107)
-
827
Consolidated
2018
Shares
2017
Shares
2018
$'000
2017
$'000
Ordinary shares - fully paid
167,613,024 153,622,874
25,996
25,420
Movements in ordinary share capital
Details
Date
No of shares Issue price
$'000
Balance
Issue of shares upon exercise of options
Issue of shares upon exercise of options
1 January 2017
12 January 2017
24 November 2017
152,122,874
750,000
750,000
Balance
Shares issued to Directors
Issue of shares upon exercise of options
Shares issued to Consultant
31 December 2017
04 June 2018
18 June 2018
13 July 2018
153,622,874
8,740,150
250,000
5,000,000
Balance
31 December 2018
167,613,024
$0.32
$0.32
$0.02
$0.25
$0.07
24,940
240
240
25,420
174
62
340
25,996
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.
Share buy-back
There is no current on-market share buy-back.
43
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 21. Issued capital (continued)
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 22. Reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2018
$'000
2017
$'000
(1,842)
118
(1,855)
62
(1,724)
(1,793)
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 2017
Foreign currency translation
Amortisation of share based employee incentives
Exercise of options
Balance at 31 December 2017
Foreign currency translation
Exercise of options
Shared-based payments
Balance at 31 December 2018
Foreign
currency
reserve
$'000
Share-based
payments
reserve
$'000
Total
$'000
(1,779)
(76)
-
-
(1,855)
13
-
-
(1,842)
446
-
96
(480)
62
-
(62)
118
118
(1,333)
(76)
96
(480)
(1,793)
13
(62)
118
(1,724)
44
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 23. Accumulated losses
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
Note 24. Financial instruments
Consolidated
2018
$'000
2017
$'000
(18,472)
(1,125)
(15,976)
(2,496)
(19,597)
(18,472)
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
Other loans
Borrowings - non-current
Market risk
Consolidated
2018
$'000
2017
$'000
418
1,457
27
1,902
1,336
-
3,054
4,390
1,015
1,226
50
2,291
1,256
9
2,885
4,150
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.
45
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 24. Financial instruments (continued)
The average exchange rates and reporting date exchange rates applied were as follows:
Australian dollars
Pound sterling (GBP)
Average
exchange
rate
2018
Average
exchange
rates
2017
Reporting
date
exchange
rate
2018
Acquisition
date
exchange
rate
2017
0.5646
0.5951
0.5523
0.5787
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 $418,000 and borrowings of $3,055,000. 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 $1,000,000. 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 adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the consolidated entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
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.
46
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 24. Financial instruments (continued)
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 - 2018
Non-derivatives
Non-interest bearing
Trade and other payables
Accruals
Borrowings - non-current
Interest-bearing - fixed rate
Borrowings - non-current
Borrowings - non-current
Total non-derivatives
Consolidated - 2017
Non-derivatives
Non-interest bearing
Trade and other payables
Accruals
Borrowings - non-current
Interest-bearing - fixed rate
Other loans
Borrowings - non-current
Borrowings - non-current
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
-
-
-
8.00%
12.00%
432
511
-
244
55
1,242
-
-
55
2,040
1,003
3,098
-
-
-
-
-
-
-
-
-
-
-
-
432
511
55
2,284
1,058
4,340
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
-
-
-
7.80%
8.00%
12.00%
506
409
-
9
160
100
1,184
-
-
55
-
2,040
855
2,950
-
-
-
-
-
-
-
-
-
-
-
-
-
-
506
409
55
9
2,200
955
4,134
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.
47
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 25. 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
Note 26. Remuneration of auditors
Consolidated
2018
$
2017
$
527,656
40,572
578,671
17,575
568,228
596,246
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 Pty Ltd
Audit or review of the financial statements
Other services - Grant Thornton Audit Pty Ltd
Preparation of the tax return
International Dealings Schedule
Tax consulting
Audit services - network firms
Audit or review of the financial statements
Note 27. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2018
$
2017
$
84,500
74,000
8,000
2,500
-
-
-
45,512
10,500
45,512
95,000
119,512
46,066
44,000
Consolidated
2018
$'000
2017
$'000
149
136
285
276
360
636
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 2 years.
48
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 28. Related party transactions
Parent entity
Jayex Healthcare Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 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)
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
2018
$
2017
$
146,200
115,347
132,832
126,029
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2018
$
2017
$
Current payables:
Accrued loan interest payable to Covenant Holdings (WA) Pty Ltd (an entity related to
director Michael Boyd)
126,679
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)
3,055,000
2,885,000
Consolidated
2018
$
2017
$
49
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 28. Related party transactions (continued)
Terms and conditions
The terms of the loans made by Covenant Holdings (WA) Pty Ltd to companies within the consolidated entity are as
follows:
Loan to Jayex Healthcare Limited: Balance at 31 December 2018 and 31 December 2017 - $2,000,000; interest rate - 8%
per annum
Loan to Jayex Healthcare Limited: Balance at 31 December 2018 - $1,000,000 (31 December 2017: $830,000); interest
rate - 12% per annum
Loan to P2U Pty Ltd: Balance at 31 December 2018 and 31 December 2017 - $55,000; loan is interest free.
All loans are unsecured and are repayable on 1 April 2020.
Note 29. 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
Total comprehensive income
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
2018
$'000
2017
$'000
(1,587)
(2,840)
(1,587)
(2,840)
Parent
2018
$'000
2017
$'000
30
117
9,063
9,754
300
322
3,426
3,161
25,996
118
(20,477)
25,420
63
(18.890)
5,637
6,593
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 2018 or 31 December
2017.
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 2018 or 31 December 2017.
50
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 29. Parent entity information (continued)
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2018 or 31 December
2017.
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.
Note 30. 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
Whakaora Hou Limited
Note 31. Events after the reporting period
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
United Kingdom
Australia
New Zealand
New Zealand
Ownership interest
2017
2018
%
%
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%
100.00%
100.00%
-
The following matters have arisen since 31 December 2018 that have 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.
On 18 March 2019 the Company announced to the market that:
●
It was implementing a revised strategy to commercialise its P2U® script processing and BluePoint® remote
dispensing technologies in New Zealand’s emerging medical cannabis market and had established a wholly-owned
NZ subsidiary, with an experienced, qualified and high-profile NZ board to guide and execute this strategy;
an application for the appropriate licenses to establish a medical cannabis research facility, and, subject to regulations
being passed, commercially cultivate medical cannabis, was progressing with NZ’s Ministry of Health;
commercial discussions to produce medical cannabis products for distribution via the Company’s technology were
ongoing, and were subject to the granting of licences and regulation; and
based on current plans, the Company expected to have completed the required modifications to its BluePoint®
technology to suit the NZ medical cannabis market by the end of Q3 2019.
●
●
●
No other matter or circumstance has arisen since 31 December 2018 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.
51
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 32. 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
Share-based payments
Non-cash interest expense
Change in operating assets and liabilities:
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/(decrease) in other provisions
Increase/(decrease) in deferred revenue
Consolidated
2018
$'000
2017
$'000
(1,125)
(2,496)
543
458
280
(228)
(74)
38
23
(390)
(115)
(43)
(51)
(66)
518
96
45
(184)
45
(30)
(7)
(337)
(101)
17
25
68
Net cash used in operating activities
(750)
(2,341)
Note 33. Earnings per share
Consolidated
2018
$'000
2017
$'000
Loss after income tax attributable to the owners of Jayex Healthcare Limited
(1,125)
(2,496)
Weighted average number of ordinary shares used in calculating basic earnings per share
168,234,988 152,928,353
Weighted average number of ordinary shares used in calculating diluted earnings per share 168,234,988 152,928,353
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.7)
(0.7)
(1.6)
(1.6)
Number of contingent shares not included in the diluted earnings per share calculation as they are anti-dilutive: 115,068
(2017: 944,521).
52
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 34. 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:
2018
Grant date
Expiry date
price
Exercise
Balance at
the start of
the period
Granted
02/02/2016
02/02/2019
$0.00
250,000
250,000
Exercised
-
-
(250,000)
(250,000)
Expired/
forfeited/
other
Balance at
the end of
the period
-
-
-
-
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.
2017
Grant date
Expiry date
price
Exercise
Balance at
the start of
the period
Granted
02/02/2016
02/02/2019
$0.00
1,750,000
1,750,000
Exercised
-
-
(1,500,000)
(1,500,000)
Expired/
forfeited/
other
Balance at
the end of
the period
-
-
250,000
250,000
Set out below are the rights granted to third parties as consideration for services:
Grant date
Expiry date
13/07/2018
01/01/2015
2018
2017
Number
Number
15,000,000
15,000,000
-
-
The weighted average share price during the financial period was $0.0246 (2017: $0.024).
(b) Performance Rights
The Consolidated entity on 6 July 2018 signed a legally binding term sheet by which it has engaged Mr Ross Smith as a
global consultant to advise the Company on the commercialisation of its P2U®, and BluePoint® technologies for medical
cannabis distribution in association with MediCann in New Zealand, and in respect to similar opportunities in Canada,
certain states in the United States and potentially the United Kingdom and Australia.
53
Jayex Healthcare Limited
Notes to the consolidated financial statements
31 December 2018
Note 34. Share-based payments (continued)
Under the binding term sheet and the formal consulting agreement, Mr Smith is entitled to receive:
- an annual consulting fee of $250,000 payable by the Company;
- 5 million ordinary shares upon signing the term sheet; and
- three tranches of performance rights which are subject to vesting conditions based on the implementation of the Licence
Agreement and the development of the Company’s medical cannabis distribution technology business.
Set out below are summaries of Rights granted to Mr Ross Smith:
2018
Grant date
Expiry date*
price**
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
13/07/2018
12/07/2021
-
- 15,000,000
-
- 15,000,000
An amount of $118,000 was recognised as an expense for the Rights during the current financial year.
* The Rights do not have an expiry date attached to them, however the valuation report noted that they can be terminated
subject to the relevant termination event clauses in the holder’s consulting agreement. They have assumed a three-year
expiry period based on advice from Management.
** The Rights do not have an exercise price.
Note 35. 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.
54
Jayex Healthcare Limited
Directors' declaration
31 December 2018
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as
at 31 December 2018 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 Boyd
Chairman
28 March 2019
Melbourne
55
Collins Square, Tower 5
727 Collins Street
Docklands VIC 3008
GPO Box 4736
Melbourne VIC 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 2018, 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 2018 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 auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group incurred a net loss of $1,125,000
during the year ended 31 December 2018, and as of that date, the Group had cash and cash equivalents of $418,000 with
current liabilities exceeding its total assets by $814,000. As stated in Note 2, these events or conditions, along with other
matters as set forth in Note 2, 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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘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.
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
How our audit addressed the key audit matter
Intangible assets – Impairment (Note 13)
As at 31 December 2018, the Group has intangible assets
amounting to $9,176,000. As disclosed in Note 6 in the financial
report these relate primarily to the goodwill and other intangible
assets of the Jayex Technology Limited (United Kingdom) cash
generating unit (“CGU”).
The Directors, have assessed the intangible assets attributed
to this CGU for impairment at balance date. The evaluation of
the recoverable amount of the intangible assets requires
significant judgement in determining the key assumptions
supporting the expected future cash flows of the business and
the utilisation of the relevant assets including:
-
-
-
discount rate;
revenue growth rates; and
EBITDA margin.
This assessment was considered a key audit matter as it
involved critical accounting estimates and assumptions,
specifically related to the valuation of the assets using a value
in use model (“the model”).
Valuation of share-based payments (Note 34)
During the year, the Group issued performance rights to an
external consultant as consideration for services to be received
in the future.
The Group engaged a valuation specialist to provide a valuation
of these share-based payments.
This area is a key audit matter due to the inherent subjectivity
involved in the Group making judgments relating to the key
inputs and assumptions used to value the performance rights,
as well as the judgements required relating to vesting
conditions.
Our procedures included, amongst others:
• Obtaining an understanding of management’s process
associated with the preparation of the valuation models used
to assess the recoverable amount of the CGU;
• In conjunction with our valuation experts, assessing and
reviewing management’s value in use calculations including:
-
Testing the mathematical accuracy of the calculations;
- Critically evaluating the cash inflows and outflows to
be generated by the CGU’s assets;
- Comparing the forecast cash flows to actual cash
flows for previous years to assess the historical
accuracy of the Group’s forecasting; and
-
Assessing the Group’s discount rate used in the
model.
• Evaluating recoverable amount for compliance with the
requirements of AASB 136 Impairment of Assets;
• Evaluating management’s assessment of the sensitivity to a
change in key assumptions that either individually or
collectively would be required for assets to be impaired and
considering the likelihood of such a movement in those key
assumptions arising; and
• We also assessed the appropriateness of the disclosures in
note 6 to the financial statements.
Our procedures included, amongst others:
• Agreeing
the
issue of
relevant
performance right agreements, evaluating the awards and
their accounting treatment for compliance with AASB 2:
Share based payments;
instruments
the
to
• Evaluating the qualifications, expertise and objectivity of the
external specialist in order to assess their professional
competence and capabilities as they relate to the work
undertaken;
• Reviewing and testing the assumptions applied by:
-
-
verifying the reasonableness and historical accuracy;
and
agreeing certain key inputs to the relevant terms within
the performance rights agreement;
Key audit matter
How our audit addressed the key audit matter
Valuation of share-based payments (Note 34) (cont’d)
• Testing the mathematical accuracy of the valuation provided
by the specialist;
• Utilising an auditor’s valuation specialist to review the
appropriateness of the model used in the valuation of the
share based payments;
• Evaluating and challenging management’s judgements
regarding vesting conditions; and
• Assessing the adequacy of the Group’s disclosures in
respect to share-based payments.
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 financial report for the year ended 31 December 2018, 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.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the 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 to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 2018.
In our opinion, the Remuneration Report of Jayex Healthcare Limited, for the year ended 31 December 2018 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S C Trivett
Partner - Audit & Assurance
Melbourne, 28 March 2019
Jayex Healthcare Limited
Shareholder information
31 December 2018
The shareholder information set out below was applicable as at 25 March 2019.
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
Number of
unquoted
Performance
Rights
Number of
holders of
ordinary
shares
-
-
-
-
1
1
-
16
39
114
180
85
434
182
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number held
COVENANT HOLDINGS(WA)PTY LTD (BOYD#4 A/C)
VECTOR LONDON LTD
MR JOHN CLIVE ALLINSON
MR AGAM JAIN
MR DEAN HENRY CLEARY (THE CLEARWAY INVESTMENT A/C)
DONOVAN PRODUCTS PTY LTD (FAMILY ACCOUNT)
MR MUN KEE CHANG
CITICORP NOMINEES PTY LIMITED
MR ROBERT JOHN MANTEL & MRS FIONA MANTEL (R & F MANTEL SUPER FUND A/C)
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
AMG CORPORATE PTY LTD (THE AMG SUPER FUND A/C)
MR PETER HOWELLS
STAINTON PTY LTD (BOYD FAMILY A/C)
MR DENNIS CRAIG TELFORD
MISS OLGA OSIPOVA
MR BRIAN PATRICK RENWICK
DR CHOON-JOO KHO
MS MANDY JEAN RUTHERFORD
MR NEIL CHARLES SELMAN
BERNE NO 132 NOMINEES PTY LTD (W 1253672 A/C)
77,912,910
19,003,378
6,580,530
4,276,417
4,140,000
2,746,916
2,651,433
2,281,118
2,250,000
1,801,365
1,705,025
1,558,243
1,515,942
1,500,000
1,297,946
1,227,840
1,200,000
1,128,000
1,095,712
1,053,750
46.48
11.34
3.93
2.55
2.47
1.64
1.58
1.36
1.34
1.07
1.02
0.93
0.90
0.89
0.77
0.73
0.72
0.67
0.65
0.63
136,926,525
81.67
60
Jayex Healthcare Limited
Shareholder information
31 December 2018
Unquoted equity securities
Performance rights
Number
on issue
Number
of holders
15,000,000
1
The following persons hold 20% or more of unquoted equity securities:
Name
Mr Ross Smith
Class
Performance rights
Number held
15,000,000
Substantial holders
Substantial holders in the Company are set out below:
Michael Boyd/Covenant Holdings (WA) Pty Ltd
Vector London Ltd
Ordinary shares
% of total
shares
issued
Number held
78,798,079
19,003,378
47.01
11.34
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.
61
Jayex Healthcare Ltd.
Phone No: 1300 330 611
Address: 17B Cribb Street, Milton 4064, QLD
ABN 15 119 122 477