1
MedAdvisor
Annual Report
Year ending June 30, 2020
MedAdvisor Limited ABN 17 145 327 617
Contents
3
3
Highlights
Chair + CEO letter
Business update
Management commentary
Directors’ report
Financials
Governance and disclosures
Brooke
S T R O K E
S U R V I V O R &
M E DA DV I S O R
U S E R
COVER:
Eric
P H A R M AC Y
O W N E R &
M E DA DV I S O R
C U S TO M E R
Highlights
1.7m
PAT I ENT S
$9.6m
O PERAT ING REVEN U E
+42% Y OY
+16. 5% Y OY
3,500+
PH ARM ACIES
AU +260 Y OY
$5.9m
S AAS REVEN U E
+19. 4% Y OY
$6.3m
ARR
+15. 3% Y OY
$
8.4m
GROSS MARGIN
+16.0% YOY
450+
PAT I ENT S
PER PH ARM ACY
+25% Y OY
$32,268
L I F E T I M E V A L U E
T O T AL PH ARM ACY L T V
P E R P H A R M A C Y
+10% Y OY
+10. 2% Y OY
70+
+
# H EAL T H PRO G RAM S
# H EAL T H PRO G RAM S
+28. 6% Y OY
5
5
MedAdvisor’s remote
customer service team
CLOCKWISE: Josh, Tom, Alice, Nick, Laura, Sonja
7
Some exciting milestones helped underpin these results:
• Entered into an agreement with NASDAQ-listed HMS to provide
health programs to its pool of 100 million insured lives
• Launched first US Health Program with Adheris in Q4 FY20
• Expanded Australian pharmacy network with deals including ma-
jor groups like Amcal, PharmaSave, Guardian, Pharmacy Alliance
and Chemist Warehouse to expand market share to more than
60%.
In the coming year, we will continue to focus on improving and ex-
panding our pharmacy, patient and pharmaceutical offerings. We
also plan to invest in building our global footprint, as well as help
existing customers better use our suite of products.
MedAdvisor’s strong results in fiscal 2020 are a testament to the
commitment and the talent of the people who work here. We are in-
credibly proud of all the MedAdvisor employees who come together
each day to build great products that our customers love.
Thank you for joining us on this journey.
Kind regards,
Christopher Ridd
Non-Executive Director and Chair
Robert Read
CEO and Managing Director
27 August, 2020
Chair +
CEO letter
To our shareholders, customers and partners,
We have spent the last few years establishing the foundations for
MedAdvisor’s diversified g lobal growth strategy w ith t he f ocus on
driving results and operational discipline at scale. MedAdvisor is
now helping millions of people better manage their medication and
become more adherent. Medication adherence is estimated to be a
US$630B global problem.
To achieve this, we’ve focused on partnering with global pharmaceu-
tical companies and leading pharmacies across Australia, the UK,
the US and Asia. We’ve also invested in building internal capability,
bolstering our marketing, sales, technical and development exper-
tise across all levels of the business.
We have continued to invest in our new global technology platform
which is providing opportunities in new markets. It is built to the
highest privacy standards including meeting stringent overseas
standards such as HIPAA and GDPR. MedAdvisor is also ISO 27001
certified, which helps build trust with new customers and partners.
We continue to invest with an eye towards the future. It’s this
disci-pline and focus that provides us the opportunities we see
ahead - namely, MedAdvisor’s global expansion - particularly as we
continue to execute across the US and the UK. Given our strong
domestic business which is continuing to evolve, executing in
these new over-seas markets is our primary focus as we head into
our fiscal 2021.
The 2020 financial year was another productive year with total
revenue of $11.1 million, up 20.4% year-on-year, annual recurring
revenue up 15.3% to $6.3 million, and generating more than
$32,000 in total lifetime value per pharmacy, up 10% year-on-year.
We also grew the MedAdvisor family to 100 employees across
Australia, UK, USA and South East Asia.
Board of
directors
Christopher Ridd
Non-Executive Director and Chair
Bachelor of Business, Economics/Marketing (SUT) and Post Grad
Diploma in Strategic Marketing (Distinction) (Charles Sturt Uni)
Director since February 2020
Chris is non-executive director, advisor and investor in various fast-
growth, Australian-based startups. He has 30 years’ experience in
the IT industry including 5 years as Managing Director for Xero Aus-
tralia and 15 years at Microsoft in various senior executive roles. He
led Xero’s expansion in the Australian market from a small startup
to become the largest online cloud accounting software company,
growing from seven staff and 3,500 customers, to over 300 staff and
320,000 paying customers.
In 2015, Chris was awarded The CEO Magazine’s Financial Services
Executive of the Year & Runner Up in Managing Director of the Year.
Jeffrey Sherman
Non-Executive Director
MBA (USC), B.S.Bus Fin & Acct (CU)
Director since October 2019
Jeff has more than 30 years of experience in corporate and hos-
pital-based finance. He previously served as executive vice presi-
dent and CFO of Accentcare, executive vice-president and CFO of
Lifepoint Hospitals Inc., and held senior finance positions at Tenet
Healthcare Corporation.
Based in the US, Jeff serves as Chief Financial Officer and Treasurer
for HMS. Additionally, he is responsible for corporate development,
including mergers and acquisitions.
9
Sandra Hook
Non-Executive Director
GAICD
Director since 2016
Chair of Audit and Risk Committee
Member of the People, Remuneration and Nominations Committee
Sandra Hook has 25+ years’ experience developing and implement-
ing commercially successful business and brands driving growth
and leading change. Sandra has a track record in delivering custom-
er-centred business transformation and transitioning traditional or-
ganisations in rapidly evolving environments.
Sandra brings extensive operational, financial management and
strategic experience built over a career which includes CEO, COO,
GM, Marketing Director and Snr Brand Manager with some of Aus-
tralia’s largest media companies including News Limited, Foxtel,
Federal Publishing Company, Murdoch Magazines and Fairfax. She
brings a strong focus on customer-centric growth and digital inno-
vation at Board level.
Since 2000 she has served as a non-executive director on listed,
public and private companies, and government bodies.
Sandra is currently director of ASX listed digital, technology and
marketing communications companies: RXP Services Ltd and IVE
Group Ltd, as well as .au, Redhill Education Ltd and the Sydney Fish
Market Ltd. She is a trustee of the Sydney Harbour Federation Trust.
Peter Bennetto
Non-Executive Director
GAICD, SA Fin.
Director since 2013
Member of Audit and Risk Committee
Member of the People, Remuneration and Nominations Committee
Peter Bennetto is an experienced company director, with skills in
banking, corporate finance and governance. Peter has held a num-
ber of company director positions in exploration, mining and man-
ufacturing companies listed on the ASX since 1990. Mr Bennetto
has been Non-Executive Chairman at MedAdvisor Limited (formerly
Exalt Resources Limited) since November 28, 2013.
Mr Bennetto is currently non-executive Chairman of Ironbark Zinc
Ltd and Kingwest Resources Ltd.
11
Jim Xenos
Non-Executive Director
BSc, DipEd, AFAIM, GAICD
Director since 2015
Member of Audit and Risk Committee
Member of the People, Remuneration and Nominations Committee
Jim Xenos brings to the board a wealth of pharmaceuticals industry
experience and market insight, forged over 25+ years leading highly
successful teams to drive strong commercial outcomes.
He has a track record of delivering market share and profit growth
across national and multinational corporations by creating impact-
ful brand and portfolio strategies, and by introducing new product
offerings that leverage innovative go-to market platforms in highly
competitive industry categories.
In addition to his extensive industry knowledge, Mr Xenos’ brings
to the role a sharp strategic mindset, collaborative approach and a
single-minded focus on value creation.
Robert Read
CEO and Managing Director
BComm(Mgt), BA(Psych), GAICD
Director since 2015
Member of Audit and Risk Committee
Member of the People, Remuneration and Nominations Committee
Robert Read has led MDR since July 2015 as a small private
compa-ny, taking it through initial ASX listing and growing the
business to now successfully operate in Australia, US, UK and SEA
with strong partners and customer relationships.
Robert has extensive commercial experience in a wide range of
including Director of Commercial Strategy and
businesses,
Operations
leading pharmaceutical
in one of
companies, GSK and roles in venture capital and private equity.
the world’s
Robert has had roles in business consulting and senior roles in pri-
vate equity including Director at ANZ Private Equity and Managing
Director at Harbert Private Equity, specialising in growing small and
medium sized businesses.
Robert brings a wide range of skills to the position of CEO -
including leadership, sales and marketing, financial performance
improvement and a deep understanding of the requirements to
successfully grow businesses.
Joshua Swinnerton
Executive Director and Founder
MEI, GradCert Eng., BE, BCS(Hons)
Director since 2015
Joshua Swinnerton has extensive experience leading and managing
large companies, as a
sizeable
consultant, and as the technical and operational lead of start-up
companies.
IT ventures, both within
Prior to founding MedAdvisor, Josh led a technology start-up which
he also founded and sold into the US as well as raising funds in
the US for the company’s expansion and managed software
develop-ment. During this time Mr Swinnerton gained valuable
experience in bridging the gap between innovative technology
and business objectives. Josh also has extensive skills in building
and managing exceptional development teams.
Company
secretaries
Executive
team
13
Naomi Lawrie
General Counsel and Company Secretary
LLB (Hons), BCom (Hons)
Naomi Lawrie holds over 20 years’ legal experience including as a
partner in a national law firm. She has particular expertise in cor-
porate and commercial law and has consulted to companies in a
variety of sectors, including health and technology.
Joining MedAdvisor in August 2020 as General Counsel and Compa-
ny Secretary, Naomi is responsible for legal, compliance and compa-
ny secretarial matters.
Carlo Campiciano
Company Secretary
MEI, GradDip(Comp), Bbus(Acc), GIA(cert), MIPA
Carlo Campiciano is a qualified accountant with extensive experi-
ence working with business on a wide range of areas including taxa-
tion, finance, operations, planning, operational and financial strategy.
Mr Campiciano commenced his career with Coopers & Lybrand
where he completed his Professional Year of Study which qualified
him for admittance to the Institute of Chartered Accountants before
moving onto roles in professional services firms as well as roles in
industry which extended both his technical as well as practical busi-
ness skills.
Mr Campiciano was a Director of MedAdvisor International Pty Ltd
prior to the relisting of MedAdvisor Limited and was the CFO from
2012 until June 30, 2019.
Steve Watt
Chief Revenue Officer
B.Comp.Sc. (Hons), MBA
A seasoned entrepreneur, Steve Watt has deep experience leading
global tech organisations through business transformation and de-
livering consistent revenue growth. Joining MedAdvisor in 2020,
Steve is charged with leading the global go-to-market strategy with
a particular emphasis on the US and UK markets.
Prior to joining MedAdvisor, Steve was CEO Computer Automated
Business Systems (CABS) in Europe where he grew the EU sales sig-
nificantly from selling to the likes of PWC and KPMG. He is also the
co-founder of Invisic where he expanded the Australian business to
the US and the UK, growing to over 100 people based in Washington.
Following which, as CEO for Raywood (a taxi dispatch software) he
grew international sales from <20% to >50% of overall sales.
Steve holds a Bachelor’s Degree in Computing from the University of
Technology Sydney and a Master of Business Administration from
Boston University.
Executive team
15
Craig Schnuriger
Interim Chief Technology Officer
Bachelor of Business Systems (B. BSys)
As MedAdvisor’s Interim CTO, Craig leads the technical team as it
scales the company’s platform to help patients manage their medi-
cation globally.
Completing a Bachelor of Business Systems in 2003, Craig has
worked in IT ever since. Prior to working at MedAdvisor, Craig had
roles at Ernst & Young, Shell and Tenix Solutions.
In 2011 Craig took his experience over to the US to work on the first
generation of pharmacy/insurance connected mobile applications
to support patients taking chronic medications. He brought this ex-
pertise back to the Australian market and has been with MedAdvisor
since its inception in 2013. Craig has worked extensively within the
pharmacy industry within Australia and recognizes the role of tech-
nology in supporting patients, pharmacists and doctors.
Over the years, Craig has held several roles at MedAdvisor including
Head of Engineering, Head of Architecture and now the CTO role.
Simon Glover
Chief Financial Officer
MBA (Melb), B.Com (Melb), CA.
Simon Glover holds over 25 years’ experience in senior financial
and operational leadership across a range of industries including
retail, aviation, gambling and entertainment, technology and
communications and financial services across Australia and
internationally.
Joining MedAdvisor in July 2019 as Chief Financial Officer, Simon
is responsible for corporate finance and investor relations, while
also leading the broader finance team in supporting financial
planning, forecasting, business analytics and operating budgets.
Prior to joining MedAdvisor he held a number of senior finance
roles
listed companies such as Tabcorp Holding
(ASX:TAH) and Coles Group (ASX:COL) and also brings prior
industry experience from his time at Mayne Pharma.
large
in
Prior to 2006 Simon was heavily involved in the international
expansion of Jetstar where he was responsible for all finance
matters relating to the launch of the international business.
Ruba El Afifi
EGM People and Culture
Bachelor of Business (HR)
A commercially astute strategic HR executive with experience in
both large and small entrepreneurial organisations, with roles as
EGM People at Aconex (ASX: ACX), as well as senior HR roles at
QIC and AAMI. Ruba brings a wealth of industry experience gained
in IT, finance, insurance and professional services.
Ruba has significant experience in mergers & acquisitions and, in
particular, integration and business transformation, aligning people
strategy and business strategy, and creating a performance
culture.
Passionate about building outstanding businesses, Ruba has a
depth of experience advising Boards, CEOs and developing
effective teams. She is also a very strong team leader who has led
small and large teams with success. Ruba also prides herself
on her
and
succession skills as well as her ability to take a commercial
and business perspective.
change management
talent management,
Business
update
Business overview
MedAdvisor continues to align its activities with its core strategic
priorities which include uplifting technology to deliver innovative
solutions, investing in a global sales organisation, establishing a
performance culture where talented people do meaningful work,
building a world-class marketing organisation and executing on its
global expansion plans.
COVID-19 changed the game
As healthcare professionals on the frontline continue to face the
challenges of COVID-19, the sector is changing to deal with these
challenges. The provision of healthcare is increasingly taking a tech-
first approach - largely driven by adoption of digital health initiatives,
funding for innovation and the upcoming launch of ePrescribing.
The pandemic has driven cultural change and we’re seeing what is a
largely traditional and slow moving industry embrace new models of
care to prioritise low or no touch options and offer consumers more
convenience, protection and improved access.
Behind these changes is an increased level of government support
for digital health. The Australian Government alone has allocated
$1.1 billion to the health sector during COVID-19, supporting a raft of
initiatives including medication delivery and telehealth.
As a result, MedAdvisor moved to support pharmacists on the front-
line by providing technology to help them work smarter and safer.
We prioritised the development of features that help patients and
pharmacists social distance with the launch of in-app payment and
on-demand delivery. We’ve already had 34,000+ deliveries complet-
ed on the platform.
17
Product overview
MedAdvisor continues to develop its core offerings: MedAdvisor app,
PlusOne pharmacy platform and pharmaceutical health programs.
This year we have established a core technology team, led by
interim CTO Craig Schnuriger and
in key product
development resources. We’ve also worked to replatform our
systems onto Amazon Web Services. AWS employs some of the
most stringent security and data privacy protocols globally. Data
centres enable us to have limited down time (we currently run at
99.98% uptime). They also provide proactive security monitoring,
firewall protection and inbuilt redundancy.
invested
Data security
We have established a world-class security program, are regular-
ly audited and comply with some of the most rigorous protocols
globally including HIPAA, ISO27001 Certification and GDPR. We con-
tinuously iterate and improve our security operations by assessing
risks and potential vulnerabilities, confidentiality, integrity, and avail-
ability of the service.
We regularly review and update security policies, carry out internal
security training, perform application and network security testing,
monitor compliance with security policies, and conduct internal and
external risk assessments. We also regularly conduct penetration
testing of our infrastructure to confirm the resilience of our systems
and identify any potential vulnerabilities.
R&D
In light of COVID-19 and its impact on our core market, we released
several features to help pharmacists and patients cope with the
changing environment. This included in-app payment and on-de-
mand delivery functionality.
A key project has been readying the platform for ePrescribing ca-
pability in Australia. ePrescribing is one of the largest and most
significant changes the pharmacy industry has experienced since
the computerisation of pharmacies. There are many benefits of ePre-
scriptions, including no more loss of paper scripts and an improved
customer experience. MedAdvisor is well positioned to leverage this
digital transformation of Australia’s pharmacy sector to attract more
patients to its network.
We have also been establishing our offering for key expansion mar-
kets like the UK, the US and South East Asia.
Business update
19
Regional overview
Australia
With a pharmacy network share of more than 60%, Australia
continues to be MedAdvisor’s core market. Over the year we saw
ARR increase 15.3% to $6.3m, compared to the same period prior.
Over the year we signed several agreements with major pharmacy
groups
including Sigma, Chemist Warehouse and Pharmacy
Alliance Group. More than 260 new pharmacies were added to the
platform and we saw the volume of health programs increase by
28.6%, year-on-year. We also saw the number of digitally
connected patients expand from 1.2 million to 1.7 million over the
year.
To help our pharmacists cope with heightened demand and
re-strictions during COVID-19, we
launched several new
capabilities including on-demand delivery and in-app payment.
UK
Over the year, MedAdvisor signed an agreement with UK-based
Day Lewis Pharmacy Group to develop a solution for use by its
270+ pharmacies. The UK’s National Pharmacy Association also
endorsed MedAdvisor as the solution of choice for its members,
representing 8 out of 10 independent community pharmacies.
US
The highlight for the year
in our US operations was the
strategic alliance deal with NASDAQ-listed HMS which will
expand
insurers,
pharmaceutical companies, pharmacies, patients and GPs.
MedAdvisor will integrate with HMS’ health engagement platform
opening a new channel for up to 100 million insured lives. This
partnership
that
MedAdvisor has already built, extending into a new marketplace.
ad-dressable market
the secure digital
technology
leverages
include
our
to
The HMS Eliza business has sent more than 865 million
unique patient outreaches since 2016. MedAdvisor will receive a
revenue share for each of the secure digital messages that are sent.
The new integration is expected to go live towards the end of Q2
FY21.
Additionally, MedAdvisor’s first set of US health programs com-
top 10 global pharmaceutical
menced with one of
companies successfully going live in Q4FY20.
the
Asia
Asia remains on track to deliver revenue in FY21 with pilot health
programs developed as part of the Company’s joint venture with
ZuelligPharma (ZP MedAdvisor Pte Ltd.) progressing on schedule.
MedAdvisor has launched the MedExpress Pharmacy App in the
Philippines and expects this to be promoted actively in Q1FY21.
People and culture overview
Enriching a performance culture by building the capability of our
people has been a core focus this year. We can only achieve our stra-
tegic objectives if our people are the most talented and engaged,
and willing to embrace diverse, innovative thinking. The implemen-
tation of a sophisticated and robust recruitment process to attract
high calibre candidates has also enhanced our existing talent pool.
MedAdvisor welcomed several new executives to its leadership
team including CFO Simon Glover, CRO Steve Watt and, in August
2020, General Counsel and Company Secretary Naomi Lawrie. For-
mer Xero Managing Director and technology investor, Chris Ridd
was appointed as a Non-Executive Director and Chair of the Board.
US-based Jeff Sherman was also appointed Non-Executive Director
to add industry experience and a global perspective.
This year has seen MedAdvisor significantly invest in our people
through the development of key leadership training frameworks
and programs.
the
launch of
the Performance
For all MedAdvisor staff,
Management Framework has provided a platform
for
completing regular performance discussions, and setting unique
action plans that link to the company purpose and goals. This
consistent approach with the implementation of the Performance
Management Online System engages, connects, and develops all
sectors across the business.
Management
commentary
Diversified revenue growth
$9.6m
+16. 5% Y OY
$8.2m
+24. 8% Y OY
$6.6m
F Y 18
F Y 1 9
F Y 20
SAAS
HEALTH PROGRAMS
TRANSACTION FEES
Driving diversified revenue growth has underpinned MedAdvisor’s
FY20 results. We’ve seen solid performance from Software as a
Service (SaaS) revenue, largely driven by growth in our pharmacy
network. Health programs also grew in volume, up 28.6%, year-
on-year - despite the second half of the year impacted by
COVID-19. Transaction
the
revenue mix
introduction of in-app payments and changes in SMS revenue as
more patients migrate to app-based solutions.
is evolving with
21
Improved scale and operating
efficiencies
GROSS MARGIN
COST OF ACQUISITION
(PER PHARMACY)
87. 3%
87. 7%
87. 6%
$8381.4m
$7228.0m
$5783.1m
-24%
F Y 18
F Y 19
F Y 20
F Y 19
F Y 20
OPEX – CORE &
GROWTH
$19. 5m
+20. 0%
$16. 3m
+47. 6%
F Y 18
F Y 19
F Y 20
Growth Opex
Core Opex
CORE EBITDA
+50%
+87. 5%
$3.3m
$2.2m
$1.2m
F Y 18
F Y 19
F Y 20
The Company is starting to realise the benefits of scale and oper-
ating efficiency. Gross margin was stable at 87.3%, impacted by
one-off costs for infrastructure technology uplift - including replat-
forming to AWS. Growth operating expenditure reflects investment
in overseas expansion and product offering while core operating
expenditure was stable with core EBITDA product costs including
operating expenditure reflecting operating leverage.
Management commentary
23
Revenue continues to climb
Driving revenue expansion
Full year financial statement
Cash flow
Year ended 30 June 2020 ($000)
FY20
FY19
Var % +ve/(-ve)
Operating Revenue
9,602.6
8,242.0
Other Revenue
Total Revenue
Gross Margin
1,468.1
951.1
11,070.7
9,193.1
8,381.4
7,228.0
Gross Margin %
87.3%
87.7%
Maintenance Opex3
5,675
5,304
16.5%
54.4%
20.4%
16.0%
(0.4%)
(7.0%)
Growth Opex3
13,839
10,960
(26.3%)
Operating Expenses
19,514
16,264
(20.0%)
EBIT1
EBITDA
(9,774)
(8,220)
(18.9%)
(9,261)
(7,960)
(16.3%)
Core EBITDA2
3,286
2,190
50.0%
Profit/(Loss) Before Income Tax
(9,780)
(8,101)
(20.7%)
1. EBIT includes depreciation associated with adopting AASB 17 Leases
2. Core EBITDA represents the “business as usual” EBITDA excluding all growth opex;
3. Maintenance opex represents costs associated with maintaining core operations; growth opex
represents costs associated with expansion into new markets
MedAdvisor posted revenue growth of 20.4% to $11.1 million for
the year. Operating revenue was up 16.5% to $9.6 million. The
company saw some short term delays and impact, primarily in
overseas markets from COVID-19 during late Q3 and Q4. Other
revenue reflects R&D tax concessions and Government grants.
Operating expenses driven by overseas investment.
Year ended 30 June 2020 ($000)
FY20
FY19
$ Var
Total operating cash receipts
11,419.5
8,946.6
2,473
Total operating cash payments
(20,100)
(15,892)
(4,208)
Net cash inflow / (outflow) from operating
activities
(8,681)
(6,945)
(1,735)
Net cash inflow / (outflow) from investing
activities
(324)
(104)
(220)
Net cash inflow / (outflow) from financing
activities
16,949
975
15,974
Net increase / (decrease) in cash held
7,944
(6,074)
14,019
Cash & equivalents at
beginning of the year
4,401
10,475
(6,074)
Cash & equivalents at end of the year
12,345
4,401
7,944
Based on current projections and growth plans, we have sufficient
capital available on hand to drive the business towards cash flow
breakeven. With growth in annualised committed monthly revenue
over the past year, and a large opportunity in the healthcare sector
around the world, MedAdvisor can continue to execute its long-term
growth strategy.
We finished the year with $12.3 million cash at bank, up $7.9 mil-
lion after completing a $17 million capital raise in October 2019.
Our cash receipts were up 28% year-on-year to $11.4 million.
Payments to suppliers and employees was up 26% year-on-
year,
in overseas expansion
investment
strategy.
largely supporting
Management commentary
25
25
Well positioned for growth
Balance sheet
Year ended 30 June 2020 ($000)
FY20
FY19
$ Var
Cash & cash equivalents
12,345
4,401
7,944
Trade receivables
1,839
1,130
710
Other
376
407
(32)
Current Assets
14,560
5,938
8,623
Total Non Current Assets
6,711
5,837
874
Total Assets
21,271
11,775
9,497
Total Liabilities
4,251
3,130
1,121
Net Assets
17,021
8,645
8,376
MedAdvisor’s strong cash position has been driven by the $17 million
capital raise completed in October 2019 as well as revenue growth.
The company also saw net assets increase 96% year-on-year - large-
ly due to the capital raise. The adoption of AASB16 Lease standard
in FY20 impacted property, plant and equipment offset by lease
liability.
MedAdvisor’s remote
branding workshop
August, 2020
MEDADVISOR LIMITED
DIRECTORS’ REPORT
Directors’ report
Directors’
report
The Directors of MedAdvisor Limited (‘MedAdvisor’) present their report, together with the financial statements
of the consolidated entity, being MedAdvisor Limited (‘the Company’) and its Controlled Entities (‘the Group’)
for the year ended 30 June 2020.
Directors
The names of Directors in office at any time during or since the end of the year are:
Christopher Ridd
Non-Executive Director and Chair (appointed 17 February 2020)
Robert Read
CEO and Managing Director
Joshua Swinnerton
Executive Director and Founder
Peter Bennetto
Non-Executive Director
Jim Xenos
Sandra Hook
Non-Executive Director
Non-Executive Director
Jeffrey Sherman
Non-Executive Director (appointed 11 October 2019)
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
Board meetings
2020
Christopher Ridd
Robert Read
Josh Swinnerton
Peter Bennetto
Sandra Hook
Jim Xenos
Jeffrey Sherman
Committee meetings
2020
Robert Read
Peter Bennetto
Sandra Hook
Jim Xenos
Principal activities
27
Meetings
attended
4
10
9
10
10
10
6
Board Meetings
Meetings
held
4
10
10
10
10
10
7
People, Remuneration &
Nominations
Audit & Risk
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
The principal activities of the Company have continued to be the development and deployment of the
MedAdvisor medication and adherence platform. The MedAdvisor platform is focused on improving health
outcomes by connecting health professionals with their patients using mobile and web technologies.
Details of the qualifications, experience and special responsibilities of the Directors and the qualifications
and experience of the Company Secretaries as at the date of this report are set out on pages 8 to 12.
Operating results
Board and Board Committee meetings and attendance
The number of meetings of the Board of Directors and of the Committees of the Board and the individual
attendance by Directors at those meetings which they were eligible to attend, during the financial year, is
summarised in the tables below:
During the year, the Company reported a comprehensive loss of $9,727,382 (2019 $8,152,293). Operating
revenue totaled $9,602,646, growing 16.5% on the prior financial year (2019 $8,241,993).
Dividends
No dividends have been paid or declared by the Company since the beginning of the financial year.
Review of operations
Please refer to the Business Update and Management Commentary sections of the 2020 Annual Report on
pages 16 to 25 for the following information in respect of the Group:
•
•
•
•
a review of operations during the financial year and the results of those operations
likely developments in the operations in future financial years and the expected results of those
operations
comments on the financial position
comments on business strategies and prospects for future financial years.
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
29
In respect of likely developments, business strategies and prospects for future financial years, material which
if included would be likely to result in unreasonable prejudice to the Group has been omitted.
Remuneration report
Financial position
The Group has $12,345,164 in cash plus $127,268 in cash on deposit as security, bringing a total cash balance
of $12,472,432 as of 30 June 2020 following a net cash increase of $7,944,198 for the year.
The net assets of the Group at 30 June 2020 were $17,020,609, an increase in net assets of $8,375,787 from
30 June 2019.
State of affairs
There were no other significant changes in the state of affairs of the Group that occurred during the financial
year that are not otherwise disclosed in this report.
Proceedings
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for
all or any part of those proceedings. The Group was not a party to any such proceedings in the financial year.
Matters subsequent to the end of the financial year
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the
potential impact, positive or negative, after the date of this report. The situation is rapidly developing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
There have been no other matters or circumstances which have arisen since the end of the financial period
that significantly affected, or may significantly affect the operations of the Company, the results of those
operations or the state of affairs of the Company in future years.
Unissued ordinary shares under option
The Directors of MedAdvisor Limited (the Group) present the Remuneration Report for Non-Executive
Directors, Executive Directors and other Key Management Personnel, prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001 Remuneration Philosophy.
The Remuneration Report is set out under the following main headings:
a) Principles used to determine the nature and amount of remuneration
b) Details of remuneration
c) Service agreements
d) Share-based remuneration; and
e) Other information
a. Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
•
•
•
to align rewards to business outcomes that deliver value to shareholders;
to drive a high-performance culture by setting challenging objectives and rewarding high performing
individuals; and
to ensure remuneration is competitive in the relevant employment market place to support the
attraction, motivation and retention of executive talent.
MedAdvisor Limited has structured a remuneration framework that
is market competitive and
complementary to the reward strategy of the Group. The remuneration structure that has been adopted by
the Group consists of the following components:
•
•
•
fixed remuneration being annual salary;
short term incentives, being bonuses; and
long term incentives, being employee share schemes.
The payment of bonuses, share options and other incentive payments are reviewed by the Board prior to
approval by the Board annually as part of the review of executive remuneration. All bonuses, options and
incentives must be linked to pre-determined performance criteria.
Short Term Incentive (STI) and Long-Term Incentive (LTI)
MedAdvisor performance measures involve the use of annual performance objectives, metrics, performance
appraisals and continuing emphasis on living the Company values. The performance measures are set
annually after consultation with the Directors and executives and are specifically tailored to the areas where
each executive has a level of control. The measures target areas the Board believes hold the greatest
potential for expansion and profit and cover financial and non-financial measures.
The Key Performance Indicators (KPI’s) for the Executive Team are summarised as follows:
Performance areas
•
•
financial – revenues and operating results; and
non-financial – strategic goals set for each business unit based on job descriptions
The STI and LTI Programs incorporate both cash and share-based components for the Executive Team and
other employees. The Board may, at its discretion, award bonuses for exceptional performance in relation to
each person’s pre-agreed KPIs.
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
Remuneration report – cont.
b. Details of remuneration
2020
Cash Salary
& Fees
$
Cash
Bonus
$
Super-
annuation
$
Value of Share
Based Awards
in 2020
Financial Year1
$
Value of Share
Based Awards
from prior
years1
$
Total
$
Executive Directors
R Read
J Swinnerton
Non-Executive Directors
C Ridd
P Bennetto
J Xenos
S Hook
Other Key Management Personnel
S Glover
C Campiciano
292,113
281,157
40,639
69,000
45,000
45,000
198,103
166,719
1,137,731
-
-
-
-
-
-
-
-
-
21,002
1,546
3,861
6,555
4,275
4,275
18,836
15,472
75,822
129,642
-
-
-
-
230,921
47,882
21,878
430,323
18,316
-
* 461,073
282,703
-
-
-
-
44,500
75,555
49,275
280,196
-
-
18,316
264,821
204,069
1,662,192
∗ Mr Read’s performance linked Share Based Entitlements are in accordance with his Employment Agreement dated 30 June 2015
which were disclosed in the Company’s Prospectus dated 8 September 2015. These Share Based Entitlements are brought to account
based on a probability of all the performance milestones under his Employment Agreement being achieved. During the financial year
142,857 Read Rights vested based on the agreed milestones. The value brought to account of the Vested Read Rights in the current
year; net of the value brought to account in previous years for lapsed options is $18,316, (2019 $7,938).
2019
Cash Salary
& Fees
$
Cash
Bonus
$
Super-
annuation
$
Value of Share
Based Awards
in 2019
Financial Year1
$
Value of Share
Based Awards
from prior
years1
$
Total
$
Executive Directors
R Read
J Swinnerton
Non-Executive Directors
P Bennetto
J Xenos
S Hook
Other Key Management Personnel
C Campiciano
285,229
259,795
81,000
45,000
45,000
233,906
949,930
-
-
-
-
-
-
-
20,531
6,453
7,695
4,275
4,275
20,531
63,760
-
-
-
-
-
10,705
-
316,465
266,248
-
-
-
88,695
49,275
49,275
56,952
56,952
-
10,705
311,389
1,081,347
1 Share based entitlements have been measured at fair value on grant date determined in accordance with the Binomial or Black- Scholes
option pricing model.
The proportion of the cash bonus paid/payable or forfeited is as follows:
Executive Directors
R Read
Cash bonus paid/payable
Cash bonus forfeited
2020
2019
2020
2019
0%
0%
0%
0%
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
Remuneration report – cont.
31
The relative proportions of remuneration that are linked to performance and those that are fixed are as
follows:
`
Fixed Remuneration
2019
2020
At Risk - STI
At Risk - LTI
2020
2019
2020
2019
Executive Directors
R Read
J Swinnerton
Non-Executive Directors
C Ridd
P Bennetto
J Xenos
S Hook
Other Key Management Personnel
S Glover
C Campiciano
c. Service agreements
68%
100%
100%
100%
100%
18%
82%
89%
97%
100%
n/a
100%
100%
100%
n/a
82%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
n/a
0%
0%
0%
n/a
0%
32%
0%
0%
0%
0%
82%
18%
11%
3%
0%
n/a
0%
0%
0%
n/a
18%
Remuneration and other terms of employment for the Executive Directors and other Key Management
Personnel are formalised in a Service Agreement. The major provisions of the agreements relating to
remuneration are set out below:
Name
Directors
R Read
J Swinnerton
Other Key Management Personnel
S Glover
C Campiciano
Base salary
agreement
Notice period
$293,906
$284,890
$228,307
$243,977
Undefined
Undefined
Undefined
Undefined
9 months
9 months
6 months
6 months
Note: Base salary noted above is the current base salary and is exclusive of superannuation which under the
applicable service agreements is capped in accordance with the maximum superannuation contribution base
for superannuation guarantee purposes.
The remuneration of non-executive Directors is set by the Board at a level that provides the Board with the
ability to attract and retain directors of the highest calibre whilst incurring a cost that is acceptable to
shareholders. At the Annual General Meeting held on 18 December 2015 shareholders approved aggregate
remuneration of non-executive directors of $350,000 per annum.
The amount each non-executive director is remunerated is set by the Board based on the recommendation
from the People and Remuneration Committee. Individual remuneration is set having regard to the director’s
experience and their role on the Board and Committees.
d. Share-based remuneration
MedAdvisor employee incentive option plan
All options refer to options over ordinary shares of the Company, which are exercisable at no cost on a one-
for-one basis under the terms of the Employee Share Option Plan that was approved by shareholders at the
2015 annual general meeting.
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
Remuneration report – cont.
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
Remuneration report – cont.
33
Options granted to employees under the MedAdvisor Employee Incentive Option Plan will vest subject to the
service period and performance milestone conditions in the grant of Options in accordance with the plan.
Unvested options will expire on the termination of the individual’s employment; vested options will expire on
the expiry date, which is 15 years.
Read Rights
Rights were issued to Mr Read under his employment agreement dated 1 July 2015 and were exercisable
subject to meeting the following conditions:
•
•
714,286 (5 million pre share consolidation) for continuous employment (Employment Rights) over a
5-year period from the date of his employment with MedAdvisor International Pty Ltd
5.4 million (37.5 million pre share consolidation) on achievement of predetermined revenue,
activated patients and active medical practitioner targets (Performance Rights) within 3 years from
the date of relisting of the Company on the Australian Securities Exchange being 1 December 2015.
Employment Rights
All 714,286 of Mr Read’s Employment Rights have vested as at 30 June 2020.
Performance Rights
1Read Rights
Shares held by directors and key management personnel
Of the 5.4 million Performance Rights, 2.2 million lapsed on 1 December 2018 and 3.2 million had vested on
achievement of the predetermined milestones as of 1 December 2018 as follows:
Ordinary Shares
Financial year ended
30-Jun-17
30-Jun-18
30-Jun-19
714,286
1,071,429
1,428,571
3,214,286
Of the total of 3.9 million Read Rights that have vested (0.7 million Employment Rights and 3.2 million
Performance Rights), Mr Read has exercised a total of 1.7 million Read Rights (1 million in September 2017
and 0.7 million in May 2019), 2.2 million Read Rights that have vested but not exercised as at 30 June 2020.
All of the Read Rights refer to rights over ordinary shares of the Company, which are exercisable on a one-
for-one basis at no cost under the terms of Mr Read’s employment agreement.
Bonuses included in remuneration
There were no bonuses paid and or payable in the 2020 financial year.
e. Other information
Options held by directors and key management personnel
The number of options and rights to acquire shares in the Company held during the 2020 reporting period by
each of the directors and key management personnel of the Group; including their related parties are set out
below.
The number of ordinary shares in the Company held during the 2020 reporting period by each of the directors
and key management personnel of the Group; including their related parties are set out below.
Balance at
start of the
Granted as
2020
reporting period remuneration
Received or
Exercised
Other
changes
Held
at end of the
reporting period
Executive Directors
R Read
J Swinnerton
Non-Executive Directors
P Bennetto
S Hook
J Xenos
Other Key Management Personnel
C Campiciano
2,631,983
25,008,943
1,618,965
178,571
20,583,723
3,362,842
-
-
-
-
-
-
-
-
-
-
-
57,147
-
(10,000,000)
2,631,983
15,008,943
-
-
-
-
1,618,965
178,571
20,583,723
3,419,989
Balance at
start of the
Granted as
2019
reporting period remuneration
Received or
Exercised
Other
changes
Held
at end of the
reporting period
Executive Directors
R Read
J Swinnerton
Non-Executive Directors
P Bennetto
S Hook
J Xenos
Other Key Management Personnel
C Campiciano
1,917,698
25,008,943
190,394
178,571
20,583,723
3,143,795
-
-
-
-
-
-
714,285
-
1,428,571
-
-
219,047
-
-
-
-
-
-
2,631,983
25,008,943
1,618,965
178,571
20,583,723
3,362,842
Note: the above shares reflect the 1:7 share consolidated that was effected on 21 November 2019.
MEDADVISOR LIMITED
DIRECTORS’ REPORT – CONT.
Remuneration report – cont.
MEDADVISOR LIMITED
DIRECTORS' REPORT -CONT.
35
Other transactions with directors and key management personnel :
•
During 2020 the Group used the services of NostraData Pty Ltd of which Mr Jim Xenos is a director
and has significant influence. The amounts billed relate to the provision of Data Services by
NostraData Pty Ltd and amounted to $143,157 (2019 $140,825).
Additional information
The earnings of the group since the incorporation of MedAdvisor International Pty Ltd are summarized
below:
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 36 and forms part of this report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This directors’ 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,
Christopher Ridd
Non-Executive Director and Chair
27 August 2020
Camberwell, VIC
End of audited Remuneration report
Indemnities given to, and insurance premiums paid for officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their
capacity as a director or executive, for which they may be held personally liable, except where there is a lack
of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The
contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnities and insurance premiums of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor
of the company or any related entity.
Non-audit services
During the year, RSM Australia Partners, the Company’s auditors provided services in relation to a R&D Tax
Concession Claim, valued at $44,673. They did not perform any other services in addition to this and their
statutory audit duties.
Details of the amounts paid to the auditors of the Company, RSM Australia Partners, and its related practices
for audit services provided during the year are set out in Note 8 to the financial statements.
AUDITOR’S INDEPENDENCE DECLARATION
37
RSM Australia Partners
Level 21, 55 Collins Street Melbourne VIC 3000
PO Box 248 Collins Street West VIC 8007
T +61 (0) 3 9286 8000
F +61 (0) 3 9286 8199
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report MedAdvisor Limited for the year ended 30 June 2020, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
B Y CHAN
Partner
Date: 27 August 2020
Melbourne, Victoria
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
THE POWER OF BEING UNDERSTOODAUDIT | TAX | CONSULTINGRSM Australia Partnersis a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036Liability limited by a scheme approved under Professional Standards LegislationRSMAustralia PartnersLevel21, 55 Collins Street Melbourne VIC3000POBox 248Collins Street West VIC8007T +61(0) 3 9286 8000F+61(0) 39286 8199www.rsm.com.auINDEPENDENTAUDITOR’SREPORTTo the Members of MedAdvisorLimitedOpinionWehaveaudited the financial reportofMedAdvisorLimited (the Company) and itssubsidiaries (theGroup), whichcomprises the consolidated statement of financialposition as at30June 2020, the consolidatedstatement ofprofitor lossand other comprehensive income, the consolidated statement of changes in equityand the consolidatedstatement of cash flows for theyear then ended,andnotes to the financialstatements, including asummaryofsignificant accounting policies, andthedirectors'declaration.Inouropinion theaccompanying financial reportoftheGroupisin accordance withthe CorporationsAct2001,including:I.giving a true and fair view of the Group's financial positionas at30 June 2020 and of its financialperformance for theyear thenended;andII.complyingwith Australian Accounting Standards andthe Corporations Regulations2001.BasisforOpinionWe conducted our auditin accordance with Australian Auditing Standards. Ourresponsibilities under thosestandardsare furtherdescribed in the Auditor'sResponsibilitiesforthe Audit ofthe FinancialReportsection ofourreport. We are independentofthe Group in accordancewith the auditorindependence requirementsoftheCorporationsAct 2001 and the ethical requirements of theAccounting ProfessionalandEthicalStandardsBoard'sAPES110Code ofEthicsforProfessionalAccountants(theCode)that are relevanttoourauditofthe financialreport in Australia.Wehave also fulfilled ourother ethical responsibilitiesin accordance with the Code.We confirm that theindependencedeclarationrequired bytheCorporationsAct 2001, which hasbeen given tothe directors of theCompany, would bein the same terms if given to the directors as at the time of this auditor'sreport.Webelieve thatthe auditevidence we have obtained is sufficient and appropriate to providea basisforouropinion. Financials
Consolidated financial
report for the year
ended 30 June 2020
MEDADVISOR LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR YEAR ENDED 30 JUNE 2020
39
Revenues from continuing operations
Other revenue
Direct expenses
Development costs
Notes
5 a.
5 b.
6 a.
Consolidated
2020
30-Jun-20
$
2019
30-Jun-19
$
9,602,646
8,241,993
1,468,098
951,121
(1,221,227)
(1,014,022)
(2,504,232)
(2,591,683)
Employee benefits expenses
6 b.
(11,501,162)
(9,268,366)
Marketing expense
Depreciation and amortisation expenses
Directors fees
Other expenses
Finance costs
Loss before income tax
Income tax (expense) / income
Loss after income tax expense for the year
Other comprehensive income
Total comprehensive loss for the year
Loss for the year is attributable to:
Non-controlling interest
Owners of MedAdvisor Limited
Total comprehensive loss for the year is attributable to:
Non-controlling interest
Owners of MedAdvisor Limited
Loss per Share
Basic loss per share
Diluted loss per Share
6 c.
6 b.
6 d.
7
(2,425,110)
(2,355,979)
(512,224)
(259,314)
(217,892)
(187,245)
(2,353,387)
(1,601,563)
(115,100)
(16,328)
(9,779,590)
(8,101,385)
-
-
(9,779,590)
(8,101,385)
52,208
(50,908)
(9,727,382)
(8,152,293)
(194,595)
(9,584,995)
(9,779,590)
(196,529)
(9,530,853)
(9,727,382)
-
(8,152,293)
(8,152,293)
-
(8,152,293)
(8,152,293)
3
3
$
$
(4.22)
(4.22)
$
$
(4.23)
(4.23)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Comparative figures are for the full year ended 30 June 2019
MEDADVISOR LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2020
41
41
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Other assets
Fixed assets
Right-of-use assets
Intangible assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Income in advance
Employee benefits
Leases
Total Current Liabilities
Non-Current Liabilities
Employee benefits
Leases
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Retained earnings / (losses)
Equity attributable to the owners of MedAdvisor Limited
Non-controlling interest
Total Equity
Consolidated
2020
30-Jun-20
$
2019
30-Jun-19
$
Notes
9
10
11
11
12
13
14
15
16
17
18
17
18
19
20
21
22
12,345,164
1,839,384
375,732
14,560,280
-
393,560
1,073,219
5,244,415
6,711,194
4,400,720
1,129,752
407,270
5,937,742
250,000
405,295
-
5,181,815
5,837,111
21,271,474
11,774,853
1,189,710
521,231
1,036,199
263,856
3,010,996
82,950
1,156,919
1,239,869
1,850,094
474,977
751,957
-
3,077,028
53,003
-
53,003
4,250,865
3,130,031
17,020,609
8,644,822
45,369,890
1,574,072
(30,281,714)
16,662,248
358,361
17,020,609
28,136,013
1,153,935
(20,645,126)
8,644,822
-
8,644,822
The above statement of financial position should be read in conjunction with the accompanying notes.
Comparative figures are as at 30 June 2019
Contributed
Equity
$
Reserves
$
Retained
Earnings/(Losses)
$
Non-Controlling
Interest
$
Total
Equity
$
Notes
Consolidated
Balance 1 July 2019
Transactions with owners in their capacity as
owners:
28,136,013
1,153,935
(20,645,126)
-
8,644,822
Ordinary shares issued
Capital raising costs (net of GST)
Share Options issued
Share Options exercised
17,120,000
(467,903)
-
581,780
-
-
947,775
(581,780)
-
-
-
-
554,890
-
-
-
Total comprehensive income for the full year:
Other comprehensive income
AASB 16 Retained Earnings Adjustment
Loss after tax
-
-
-
54,142
-
-
(51,593)
(9,584,995)
(1,934)
(194,595)
17,674,890
(467,903)
947,775
-
-
52,208
(51,593)
(9,779,590)
Balance 30 June 2020
45,369,890
1,574,072
(30,281,714)
358,361
17,020,609
25,979,898
1,732,305
(12,543,741)
Consolidated
Balance 1 July 2018
Transactions with owners in their capacity as
owners:
Ordinary shares issued
Capital raising costs (net of GST)
Share Options issued
Share Options exercised
983,750
(16,347)
-
1,188,712
-
-
661,250
(1,188,712)
-
-
-
-
-
(8,101,385)
Total comprehensive income for the full year:
Other comprehensive income
Loss after income tax
-
-
(50,908)
-
Balance 30 June 2019
28,136,013
1,153,935
(20,645,126)
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Comparative figures are for the full year ended 30 June 2019
-
-
-
-
-
-
-
-
15,168,462
983,750
(16,347)
661,250
-
(50,908)
(8,101,385)
8,644,822
MEDADVISOR LIMITED
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
43
Cash Flows From Operating Activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Receipt from R&D tax concession
Interest received
Interest paid
Net cash outflow from operating activities
Cash Flows From Investing Activities
Payments for property, plant and equipment
Payments for intangibles
Net cash outflow from investing activities
Cash Flows From Financing Activities
Proceeds from new share issue
Capital raising costs (net of GST)
Receipts from non controlling entities
Repayment of lease liabilities
Consolidated
2020
30-Jun-20
$
2019
30-Jun-19
$
Notes
10,129,859
(20,005,320)
1,188,204
101,394
(94,684)
8,063,295
(15,891,812)
749,545
133,804
-
(8,680,547)
(6,945,168)
(100,667)
(223,545)
(103,890)
-
(324,212)
(103,890)
17,100,000
(467,903)
554,890
(237,784)
975,000
-
-
-
24
12
14
19
19
22
Net cash (outflow) inflow from financing activities
16,949,203
975,000
Note 1: Statement of Significant Accounting Policies
The financial statements cover the Company of MedAdvisor Limited. MedAdvisor Limited is a listed public
company limited by shares, incorporated and domiciled in Australia.
The financial statements were authorized for issue on the 27 August 2020 by the Directors of the Company.
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 years presented, unless otherwise stated.
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance
Interpretations, other authoritative
with Australian Accounting Standards, Australian Accounting
pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The
Company is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable
information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards as issued by the IASB. Material
accounting policies adopted in the preparation of these financial statements are presented below and have
been consistently applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets
and financial liabilities.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new
or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
Net increase/(decrease) in cash held
7,944,444
(6,074,058)
AASB 16 Leases
Cash and cash equivalents at the beginning of the year
4,400,720
10,474,777
Cash and cash equivalents at the end of the year
9
12,345,164
4,400,720
The above statement of cash flows should be read in conjunction with the accompanying notes.
Comparative figures are for the full year ended 30 June 2019
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases
of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of
financial position.
Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use
assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in
finance costs). In the earlier periods of 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 improve as the operating expense is now replaced by interest
expense and depreciation in profit or loss.
For classification within the statement of cash flows, the interest portion is disclosed in operating activities
and the principal portion of the lease payments are separately disclosed in financing activities. For lessor
accounting, the standard does not substantially change how a lessor accounts for leases.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
45
Note 1: Statement of Significant Accounting Policies – cont.
Note 1: Statement of Significant Accounting Policies – cont.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been
restated. The impact of adoption on opening retained profits as at 1 July 2019 was as follows:
Operating lease commitments as at 1 July 2019 (AASB 117)
Transition assessment adjustment
Finance lease commitments as at 1 July 2019 (AASB 117)
Operating lease commitments discount based on the weighted average incremental borrowing rate of 6% (AASB 16)
Short-term leases not recognised as a right-of-use asset (AASB 16)
Low-value assets leases not recognised as a right-of-use asset (AASB 16)
Accumulated depreciation as at 1 July 2019 (AASB 16)
Right-of-use assets (AASB 16)
Adjustment for lease incentive
Lease liabilities - current (AASB 16)
Lease liabilities - non-current (AASB 16)
Tax effect on the above adjustments
Reduction in opening retained profits as at 1 July 2019
01-Jul-19
2,831,258
(506,934)
(654,872)
-
-
-
(357,740)
1,311,712
295,253
(158,684)
(1,499,876)
-
51,595
When adopting AASB 16 from 1 July 2019, the consolidated entity has applied the following practical
expedients:
•
•
•
•
Applying a single discount rate to the portfolio of leases with reasonably similar characteristics
Accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short term
leases
Excluding initial direct costs from the measurement of right of use assets
Using hindsight in determining the lease term when the contract contains options to extend or
terminate the lease; and
• Not apply AASB 16 to contracts that were not previously identified as containing a lease.
Accounting Policies
(a)
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note 28.
(b)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent
MedAdvisor Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent
controls an entity when it 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 over the entity. A list of controlled entities is
contained in Note 2 9 of the Financial Statements.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
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.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests”. The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on
liquidation at either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net
assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss
and each component of other comprehensive income. Non-controlling interests are shown separately within
the equity section of the statement of financial position and statement of comprehensive income.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
(c)
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM
is responsible for the allocation of resources to operating segments and assessing their performance.
(d)
Foreign currency translation
The financial statements are presented in Australian dollars, which is MedAdvisor 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 year-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.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
47
Note 1: Statement of Significant Accounting Policies – cont.
Note 1: Statement of Significant Accounting Policies – cont.
(e)
Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring goods or services to a customer. For each contract with
a customer, the consolidated entity: identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to
the constraining principle are recognised as a refund liability.
License fees
License fees are charged for the use of the MedAdvisor platform and the revenue recognized at the point at
which the customer has agreed to the terms and conditions of use of the platform and installs the interface
on their computer equipment and is able to benefit from and be rewarded for the use of the platform.
Rendering of services
Rendering of services revenue from health programs is recognised by reference to the stage of completion
of the contracts. Stage of completion is measured by reference to labour hours incurred to date as a
percentage of total estimated labour hours for each contract. Where the contract outcome cannot be reliably
estimated, revenue is only recognised to the extent of the recoverable costs incurred to date.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(f)
Income tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and
deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period.
Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered
from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets
also result where amounts have been fully expensed but future tax deductions are available. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at
the end of the reporting period. Their measurement also reflects the manner in which management expects
to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will be available against which the benefits of the deferred
tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(g)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed
in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realized within 12 months after the reporting period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after
the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12
months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
49
Note 1: Statement of Significant Accounting Policies – cont.
Note 1: Statement of Significant Accounting Policies – cont.
(h)
Cash and cash equivalents
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short-term
highly liquid investments with original maturities of three months or less.
(l)
Plant and equipment
(i)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance to measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(j)
Work in progress
Work in progress on services contract’s in progress comprises the cost of labour directly related to the
performance of the contract plus any other direct costs incurred in delivering the contract services.
(k)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets
are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is
written off.
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated
depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is
greater than the estimated recoverable amount, the carrying amount is written down immediately to the
estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation
decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is
made when impairment indicators are present (refer to Note 1 (o) for details of impairment).
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net
cash flows have been discounted to their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. All other repairs and maintenance are recognised
as expenses in profit or loss during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding
freehold land, is depreciated over the asset’s useful life to the Company commencing from the time the asset
is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period
of the lease or the estimated useful lives of the improvements.
The depreciation rates and method of deprecation is as follows:
• Office equipment – diminishing value at 30% p.a.
• Office furniture – straight line at 20% p.a.
• Leasehold improvements – straight line over the unexpired period of the lease
Financial assets at fair value through profit or loss
(m) Right-of-use assets
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of
making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value
movements are recognised in profit or loss.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period
as to whether the financial instrument's credit risk has increased significantly since initial recognition, based
on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected
credit losses that is attributable to a default event that is possible within the next 12 months. Where a
financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of
the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
51
Note 1: Statement of Significant Accounting Policies – cont.
Note 1: Statement of Significant Accounting Policies – cont.
(n)
Intangible assets
(q)
Lease liabilities
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. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any
impairment. Finite life intangible assets are subsequently measured at cost less amortization and any
impairment. 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
amortization method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested
annually for impairment, or more frequently if events or changes in circumstances indicate that it might be
impaired and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken
to profit or loss and are not subsequently reversed.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis
over the period of their expected benefit, being their finite life of 10 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 5-10 years.
(o)
Impairment of assets
At the end of each reporting period, the Company assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of
pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by
comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its
recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued
amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116:
Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease
in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible
assets not yet available for use.
(p)
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the
end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised
cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an index
or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When
a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or
loss if the carrying amount of the right-of-use asset is fully written down.
(r)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
(s)
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.
(t)
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.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured as the present value of expected future payments to be made in respect of
services provided by employees up to the reporting date. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency
that match, as closely as possible, the estimated future cash outflows.
Share-based payments
Equity-settled and cash-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. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
53
Note 1: Statement of Significant Accounting Policies – cont.
Note 1: Statement of Significant Accounting Policies – cont.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option, together with non-vesting conditions that do not determine whether the consolidated entity receives
the services that entitle the employees to receive payment. No account is taken of any other vesting
conditions.
The cost of equity-settled transactions is 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.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by
applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and
conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the
liability is calculated as follows:
•
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of
the liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is
the cash paid to settle the liability.
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.
(u)
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.
There are no assets and liabilities held at fair value on a recurring or non-recurring basis.
(v)
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.
(w)
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of
any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in
the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net
assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and
liabilities assumed for appropriate classification and designation in accordance with the contractual terms,
economic conditions, the consolidated entity's operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously
held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value
and the previous carrying amount is recognised in profit or loss.
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.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note 1: Statement of Significant Accounting Policies – cont.
(x)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of MedAdvisor Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued
during the financial year.
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.
(y)
Goods and services tax (GST)
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.
(z)
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted. 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.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January
2020 and early adoption is permitted. The Conceptual Framework contains new definition and recognition
criteria as well as new guidance on measurement that affects several Accounting Standards. Where the
consolidated entity has relied on the existing framework in determining its accounting policies for
transactions, events or conditions that are not otherwise dealt with under the Australian Accounting Standards,
the consolidated entity may need to review such policies under the revised framework. At this time, the
application of the Conceptual Framework is not expected to have a material impact on the consolidated
entity's financial statements.
(aa) Comparative figures
Where required by Accounting standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
55
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.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has
had, or may have, on the consolidated entity based on known information. This consideration extends to the
nature of the products and services offered, customers, supply chain, staffing and geographic regions in
which the consolidated entity operates. Other than as addressed in specific notes, there does not currently
appear to be either any significant impact upon the financial statements or any significant uncertainties with
respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting
date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Goodwill and other indefinite life intangible assets
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.
The recoverable amount of the consolidated entity's goodwill has been determined by a value-in-use
calculation using a discounted cash flow model, based on a 3 year projection period approved by
management and extrapolated for a further 2 years using a steady rate, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most
sensitive.
The following key assumptions were used in the discounted cash flow model for the business:
a) 21.64% (2019: 21.16%) pre-tax discount rate;
b) 5-10% (2019: 15-20%) per annum projected revenue growth rate;
c) 3-5% (2019: 15-20%) per annum increase in operating costs and overheads.
The discount rate of 21.64% pre-tax reflects management’s estimate of the time value of money and the
consolidated entity’s weighted average cost of capital, the risk-free rate and the volatility of the share price
relative to market movements.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note 2: Critical accounting judgements, estimates and assumptions – cont.
Management believes the projected revenue growth rate of 10% in years one and two, and 5% in years three
through to five, is prudent and justified based on current and expected growth in the business. Similarly,
management believes that the projected increase in operating costs and overheads of between 3-5% in years
one through to five, is prudent and justified based on the cost structure and control environment in the
business.
Based on the above an impairment charge has not been applied as the carrying amount of goodwill does not
exceed its recoverable amount for the business.
Sensitivity
The directors have made judgements and estimates in respect of impairment testing of goodwill. Should
these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The
sensitivities are as follows:
a) Revenue would need to decrease by more than 5% for the business before goodwill would need to
be impaired, with all other assumptions remaining constant.
b) The discount rate would be required to increase by more than 9% on a pre-tax basis before goodwill
would need to be impaired, with all other assumptions remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable
amount of the goodwill is based would not cause the cash-generating unit’s carrying amount to exceed its
recoverable amount.
If there are any negative changes in the key assumptions on which the recoverable amount of goodwill is
based, this would result in a further impairment charge for the goodwill.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined by
using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which
the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-
based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
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.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences
and losses
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
57
Note 3: Earnings per Share
Both the basic and diluted loss per share have been calculated using the loss attributable to shareholders of
MedAdvisor Limited as the numerator, i.e. no adjustments to profits were necessary during the year ended
30 June 2020.
Earning per share for loss from continuing operations
of MedAdvisor Limited
Loss for the year
Basic loss per share
Diluted loss per share
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in
calculating basic earnings per share
Adjustment for calculation of diluted earnings per share
Options over ordinary shares
Performance rights vested but not exercised
Performance rights not vested
Consolidated
Jun-20
$
Jun-19
$
(9,779,590)
(8,101,385)
Cents
(4.22)
(4.22)
Cents
(4.23)
(4.23)
231,932,954
191,543,699
7,239,208
2,071,426
-
7,543,508
1,928,571
142,857
241,243,588
201,158,636
Note, in November 2019, MedAdvisor Limited conducted a consolidation of the Company’s issued capital on
a basis of one new share for every 7 shares on issue. The adjusted weighted average number of shares have
been disclosed for comparative purposes for the 12 months ended 30 June 2019.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
59
Note 4: Operating Segments
Note 5: Revenues
The Board has determined that the Company presently has five reporting segments. The first being the
business activities of the MedAdvisor medication management and adherence platform, followed by the
activities associated with operations in the USA, UK, and Asia, and finally, the corporate function associated
with being an ASX listed company. The Board monitors the Company based on actual versus budgeted
revenue and expenditure incurred. This internal reporting framework is the most relevant to assist the Board
with making decisions regarding the Company and its ongoing activities.
Disaggregation of revenue
a. From continuing operations
Major service lines
SaaS Revenue
Transaction & Development fees
Health Programs
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
b. Other Revenue
Interest received
Sundry income - Government Grants
Sundry income - R&D Tax Concession
Revenue by geographical region has been disclosed in note 4.
Consolidated
Jun-20
$
Jun-19
$
5,913,620
2,462,002
1,227,024
9,602,646
5,913,620
3,689,026
9,602,646
109,213
170,681
1,188,204
1,468,098
4,951,730
2,291,730
998,533
8,241,993
4,618,510
3,623,483
8,241,993
134,518
67,058
749,545
951,121
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
61
Note 6: Expenses
Note 7: Income tax expense
Profit (loss) before income tax from continuing operation
includes the following specific expenses:
a. Direct costs
Direct transaction costs
Direct costs of sms services
Managed services costs for the MedAdvisor Platform
b. Employee Benefits Expenses:
Development
Marketing
Business devlopment - international
People and Culture
Administration
Share based employee remuneration
Governance - Directors fees
c. Depreciation & Amortization
Depreciation
Leasehold improvements
Office furniture and equipment
Right-of-use asset
Motor vehicle
Total depreciation
Amortization
Software
Intellectual property
Total amortization
d. Finance costs
Interest and finance charges paid/payable
Other bank charges
Consolidated
Jun-20
$
Jun-19
$
98,730
461,313
661,184
33,912
467,592
512,518
1,221,227
1,014,022
5,329,673
2,860,719
375,645
399,224
1,588,127
947,774
11,501,162
217,892
11,719,054
31,081
74,802
238,493
6,903
351,279
148,165
12,780
160,945
512,224
94,684
20,416
115,100
4,788,190
2,847,565
-
-
971,360
661,251
9,268,366
187,245
9,455,611
30,902
45,506
21,433
-
97,841
148,693
12,780
-
161,473
259,314
17
16,311
16,328
e. Superannuation expense
Defined contribution superannuation expense
805,146
690,962
Note 8: Auditors remuneration
During the year the following fees were paid or payable for services provided
Audit and review of financial report
Other Services
76,618
44,673
121,291
72,148
-
72,148
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
63
Note 9: Cash and cash equivalents
Cash on hand
Cash at bank
Note 10: Trade and other receivables
Trade debtors
Other debtors
Consolidated
Jun-20
$
Jun-19
$
-
12,345,164
12,345,164
303
4,400,417
4,400,719
1,525,428
313,956
1,839,384
1,129,752
-
1,129,752
The consolidated entity has recognised a loss of $50,611 in the profit or (loss) in respect of the expected
credit losses for the year ended 30 June 2020 (30 June 2019: $35,000).
The ageing of these receivables and allowances for expected credit losses provided for above are as follows:
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Expected credit loss rate
Carrying amount
Expected credit losses allowance
30-Jun-20
30-Jun-19
%
0%
4%
45%
67%
%
0%
1%
18%
66%
30-Jun-20
$
1,307,769
211,532
14,675
42,063
30-Jun-19
$
914,246
183,401
23,831
43,275
1,576,039
1,164,752
30-Jun-20
$
30-Jun-19
$
6,494
9,411
6,578
28,128
50,611
237
2,150
4,234
28,379
35,000
Movements in the allowance for expected credit losses are as follows:
Balance
Additional provision recognised
Receivables written off during the year as uncollectable
Balance
Consolidated
Jun-20
$
Jun-19
$
35,000
58,183
(42,572)
50,611
57,443
36,277
(58,720)
35,000
Note 11: Other assets
Currrent
Security bonds - cash on deposit with banks
Prepayments
Non Currrent
Other receivables
Note 12: Fixed assets
Leasehold improvements at cost
Less: Accumulated depreciation
Office furniture & equipment at cost
Less: Accumulated depreciation
Motor vehicle
Less: Accumulated depreciation
Consolidated
Jun-20
$
Jun-19
$
127,268
248,464
375,732
-
-
217,538
(68,996)
148,542
422,309
(201,692)
220,617
31,149
(6,748)
24,401
127,022
280,249
407,270
250,000
250,000
217,539
(37,915)
179,624
321,642
(126,890)
194,752
30,919
-
30,919
Total property, plant and equipment
393,560
405,295
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note 12: Fixed assets - continued
Reconciliation of written down values at the beginning and end of the current and previous financial year:
Balance at 1 July 2018
Additions
Depreciation
Balance 30 June 2019
Additions
Depreciation
Foreign currency movements
Balance 30 June 2020
Note 13: Right-of-use assets
Building - right-of-use
Less: Accumulated depreciation
Leasehold
Improvements
$
192,068
18,458
(30,902)
179,624
-
(31,082)
-
148,542
Office
Furniture &
Equipment
$
Motor
Vehicle
$
177,808
83,883
(66,939)
194,752
100,667
(74,802)
-
220,617
-
30,919
-
30,919
-
(6,903)
385
24,401
Total
$
369,876
133,260
(97,841)
405,295
100,667
(112,787)
385
393,560
Consolidated
Jun-20
$
Jun-19
$
1,669,452
(596,233)
1,073,219
-
-
-
The consolidated entity leases a building for its offices under an agreement of seven years. The lease has a
CPI linked escalation clause. On renewal, the terms of the lease will be renegotiated.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
65
Note 14: Intangible assets
Intellectual property at cost
Less: Accumulated amortization
Software at cost
Less: Accumulated amortization
Goodwill at cost
Total intangible assets
Consolidated
Jun-20
$
Jun-19
$
131,219
(70,560)
60,659
1,705,201
(535,313)
1,169,888
131,219
(57,781)
73,439
1,481,656
(387,148)
1,094,508
4,013,868
4,013,868
5,244,415
5,181,815
Reconciliation of written down values at the beginning and end of the current and previous financial year:
Copyright
Trademarks
Software
Goodwill
Balance at 1 July 2018
Additions
Depreciation
Balance 30 June 2019
Additions
Amortization
Balance 30 June 2020
$
$
45,000
-
(12,780)
32,220
-
(12,780)
19,440
Note 15: Trade and other payables
Trade creditors
Other creditors & accruals
38,190
3,030
-
41,220
-
-
$
1,243,201
-
(148,693)
1,094,508
223,544
(148,165)
$
4,013,868
-
-
4,013,868
-
-
Total
$
5,340,258
3,030
(161,473)
5,181,815
223,544
(160,945)
41,220
1,169,888
4,013,868
5,244,415
Consolidated
Jun-20
$
Jun-19
$
715,026
474,684
1,189,710
746,615
1,103,478
1,850,094
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note 16: Income in advance
Gross pharmacy subscriptions in advance
Patient engagement program (PEP) fees in advance
Total income in advance
Note 17: Employee benefits
Current
Provision for employee leave
Non-Current
Provision for employee leave
Consolidated
Jun-20
$
Jun-19
$
412,521
108,710
521,231
369,815
105,163
474,977
1,036,199
751,957
82,950
53,003
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have
completed the required period of service and also those where employees are entitled to pro-rata payments in
certain circumstances. The entire amount is presented as current, since the consolidated entity does not have
an unconditional right to defer settlement. However, based on past experience, the consolidated entity does
not expect all employees to take the full amount of accrued leave or require payment within the next 12
months.
Note 18: Lease liability
Current
Lease liability
Non-Current
Lease liability
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
67
Note 19: Issued Capital
a. Fully paid ordinary shares
Ordinary shares fully paid
Jun-20
Shares
246,718,025
Jun-19
Shares
195,987,489
Jun-20
$
45,369,890
Jun-19
$
28,136,013
Note, in November 2019, MedAdvisor Limited conducted a consolidation of the Company’s issued capital
on a basis of one new share for every seven shares on issue. The comparatives have been restated for the
year ended 30 June 2019.
Movements in ordinary share capital
Balance at 1 July 2018
EIP Options Exercised
Exercise of Bennetto Options
Exercise of Lead Manager Options
Issue for services
Read Rights Exercised
Share issue transaction costs, net of tax for the year
Balance at 30 June 2019
EIP Options Exercised
New Share Issue
Options on issue 21 November 2019
Share Consolidation Adjustment ( 1:7)
Shares on issue post share consolidation (1:7)
EIP Options Exercised
New Share Issue (as Consideration)
# of shares
Issue price
$
1,317,927,982
25,979,898
16,289,995
$
0.0375
10,000,000
$
0.0418
22,500,000
$
0.0438
194,445
$
0.0450
5,000,000
$
0.0300
610,627
418,085
985,000
8,750
150,000
(16,347)
1,371,912,422
28,136,013
4,156,666
$
0.0365
151,870
342,500,000
$
0.0499
17,099,999
1,718,569,088
(1,473,059,917)
245,509,171
1,168,854
$
0.3678
40,000
$
0.5000
45,387,882
45,387,882
429,911
20,000
(467,903)
45,369,890
Share issue transaction costs, net of tax for the year
Balance at 30 June 2020
246,718,025
263,856
1,156,919
-
-
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.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note 19: Issued Capital – continued
b.
Read rights
Balance
Employment rights
Employment rights
Performance rights
Balance
Balance
Share Consolidation Adjustment ( 1:7)
Balance post share consolidation
Employment rights
Balance
Date
1-Jul-18
24-Aug-18
30-Nov-18
30-Jun-19
1-Jul-19
21-Nov-19
21-Nov-19
21-Nov-19
30-Jun-20
30-Jun-20
c.
Options over unissued shares
Balance at 1 July 2018
Bennetto Options Exercised
Lead Manager Options Expired
Lead Manager Options Exercised
Employee incentive options exercised
Employee incentive options
Employee incentive options expired
Read Rights exercised
Read rights vested
Balance at 30 June 2019
Employee incentive options exercised
Employee incentive options
Options expired
Hook options expired
Hook options issued
Options on issue 21 November 2019
Share Consolidation Adjustment ( 1:7)
Options on issue post share consolidation (1:7)
Employee incentive options
Employee incentive options exercised
Employee incentive options expired
Read rights vested
Balance at 30 June 2020
Issued
#
Vested
#
42,500,000
15,500,000
10,000,000
#
-
-
Expired
Balance
#
27,000,000
17,000,000
2,000,000
1,000,000
1,000,000
1,000,000
(857,143)
142,857
-
-
-
-
-
-
15,000,000
1,000,000
-
42,500,000
42,500,000
26,500,000
15,000,000
26,500,000
15,000,000
(36,428,572)
(22,714,286)
(12,857,143)
6,071,429
3,785,714
2,142,857
-
142,857
-
6,071,429
3,928,571
2,142,857
Issued
#
94,733,332
(10,000,000)
(1,500,000)
(22,500,000)
(16,289,993)
20,330,000
(4,876,669)
(5,000,000)
11,000,000
65,896,670
(6,656,666)
420,000
(12,500,000)
(5,000,000)
5,000,000
47,160,004
(40,422,861)
6,737,143
4,846,371
(1,168,854)
(1,111,692)
142,857
9,445,825
1 Lead manager (Peloton) unlisted options are exercisable at $0.03 with an expiry date of 17 December 2018
2 Read unquoted employment rights are exercisable at no cost and have vested and are exercisable immediately
3 Bennetto unlisted options exercisable at $.0.03 with an expiry date of 12 November 2018
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
Note 19: Issued Capital – continued
Employee Incentive Options
69
Employee incentive plan options are unquoted and will vest in accordance with the rules of the plan. Unvested
employee incentive options lapse on termination of employment, or failure to meet performance based
vesting conditions in accordance with the conditions under which the options have been granted.
Issue
Date
14-Apr-16
15-Dec-16
27-Oct-17
19-Dec-17
12-Apr-18
24-Aug-18
24-Sep-18
10-Jan-19
15-Mar-19
25-Aug-19
23-Dec-19
28-Apr-20
15-May-20
Expiry
Date
14-Apr-31
14-Dec-31
27-Oct-32
19-Nov-32
12-Apr-33
24-Apr-33
24-Sep-33
10-Jan-34
15-Mar-34
25-Aug-34
8-Dec-34
26-Apr-35
15-May-35
d.
Capital management
Issued
#
1,292,827
2,215,685
1,792,795
44,283
161,422
250,000
1,211,378
407,140
1,035,713
59,997
5,117,132
324,477
119,047
Lapsed
Exercised
Balance
Exercised
Unvested
Vested Not
#
142,848
229,182
743,318
-
39,046
-
278,563
-
666,666
8,571
-
-
#
830,939
1,505,562
418,564
5,714
90,950
250,000
391,419
392,856
369,047
-
142,857
175,205
119,047
#
319,040
480,941
630,913
38,569
31,426
-
541,396
14,284
-
51,426
319,040
480,941
436,162
23,808
20,950
-
377,122
4,761
-
2,857
4,974,275
2,142,855
149,272
-
-
-
-
-
194,751
14,761
10,476
-
164,274
9,523
-
48,569
2,831,420
149,272
-
14,031,896
2,108,194
4,692,160
7,231,542
3,808,496
3,423,046
Management’s objective is to maintain optimal returns to shareholders and benefits for other stakeholders.
Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the
entity.
Management adjusts the capital structure to the extent possible to take advantage of favourable costs of
capital or high returns on assets. As the market is constantly changing, management may change the amount
of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell assets to
reduce debt.
The Company is not subject to any externally imposed capital requirements, nor does it focus on obtaining
debt as a key capital management tool.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
71
Note 20: Reserves
Note 22: Non-controlling interest
Share options reserve
Foreign currency translation reserve
Movements in reserves
Consolidated
Jun-20
$
Jun-19
$
1,570,838
3,234
1,574,072
1,204,843
(50,908)
1,153,935
Issued capital
Reserves
Accumulated losses
Consolidated
Jun-20
$
Jun-19
$
554,890
(1,934)
(194,595)
358,361
-
-
-
-
Movements in each class of reserve during the current and previous financial year are set out below
Balance at 1 July 2018
Share Options issued
Share Options exercised
Foreign currency translation
Balance 30 June 2019
Share Options issued
Share Options exercised
Foreign currency translation
Share
options
$
1,732,305
661,250
(1,188,712)
-
1,204,843
947,775
(581,780)
-
Foreign
currency
$
-
-
-
(50,908)
(50,908)
-
-
54,142
Total
$
1,732,305
661,250
(1,188,712)
(50,908)
1,153,935
947,775
(581,780)
54,142
Balance 30 June 2020
1,570,838
3,234
1,574,072
Note 21: Accumulated losses
Accumulated losses at the beginning of the year
AASB 16 Retained Earnings Adjustment
Accumulated losses at the beginning of the year - restated
Total comprehensive loss for the year
Accumulated losses at the end of the year
Consolidated
Jun-20
$
Jun-19
$
(20,645,126)
(12,543,741)
(51,593)
-
(20,696,719)
(12,543,741)
(9,584,995)
(8,101,385)
(30,281,714)
(20,645,126)
The non-controlling interest has a 50% (2019: 0%) equity holding in ZP MedAdvisor Pte. Ltd.
Note 23: Financial risk management
The company’s financial instruments consist mainly of deposits with banks, trade receivable and payables.
Totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the
accounting policies to these financial statements, are as follows:
Financial Assets
Cash and equivalents
Trade and other receivables
Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables
- Lease liabilities
Financial Risk Management Policies
Consolidated
Jun-20
$
Jun-19
$
12,345,164
1,839,384
14,184,548
4,400,720
1,129,752
5,530,472
1,189,710
1,420,776
2,610,485
1,850,094
-
1,850,094
The Directors’ overall risk management strategy seeks to assist the company in meeting its financial targets
whilst minimising potential adverse side effects on financial performance. Risk management policies are
approved and reviewed by the Directors’ on a regular basis. These include credit risk policies and future cash
flow requirements.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
NOTE 23: FINANCIAL RISK
MANAGEMENT - CONTINUED
Specific Financial Risk Exposures and Management
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
NOTE 23: FINANCIAL RISK
MANAGEMENT - CONTINUED
a.
Credit Risk
41
73
The main risks the Entity is exposed to through its financial instruments are interest rate risk, liquidity risk,
credit risk and foreign currency risk.
Exposure to credit risk relating to financial assets arises from the potential non−performance by counter
parties of contract obligations that could lead to a financial loss to the Entity.
a)
Interest Rate Risk
Exposure to interest risk arises on financial assets financial assets and financial liabilities
recognised at reporting date whereby a future change in interest rates will affect future cash flows or
the fair value of fixed rate financial instruments.
b) Liquidity Risk
Liquidity risk arises from the possibility that the company might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. The Entity manages this risk
through the preparation of forward-looking cash flow analysis in relation to its operational, investing
and financing activities.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of
systems for the approval, granting and removal of credit limits, regular monitoring of exposures against such
limits and monitoring of the financial stability of significant customers and counter parties), ensuring to the
extent possible, that customers and counter parties to transactions are of sound credit worthiness. Such
monitoring is used in assessing receivables for impairment. Credit terms are generally 30 days from the
invoice date. Customers who do not meet the Entity's strict credit policies may only purchase in cash or only
use recognised credit cards.
Within 1 year
Between 1 and
2 years
Between 2 and 5
years
Total
Credit Risk Exposures
1,189,710
-
-
1,189,710
The maximum exposure to credit risk by class of recognised financial assets at balance date is equivalent to
the carrying value and classification of those financial assets (net of any allowance for expected credit loss)
as presented in the balance sheet
263,856
275,900
881,019
1,420,776
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality.
Aggregates of such amounts are as detailed in Note 10.
1,453,566
275,900
881,019
2,610,485
b.
Foreign Currency Risk
Consolidated - 2020
Financial liabilities due for payment
Trade and other payables
Interest bearing - fixed rate
Lease liabilities
Total financial liabilities
Financial assets - cash flows realisable
Cash and equivalents
Trade and other receivables
12,345,164
1,839,384
14,184,548
-
-
-
-
-
-
12,345,164
1,839,384
14,184,548
Net inflow/(outflow) on financial instruments
12,730,982
(275,900)
(881,019)
11,574,063
Consolidated - 2019
Within 1 year
Between 1 and
2 years
Between 2 and 5
years
Total
Financial liabilities due for payment
Trade and other payables
1,850,094
Interest bearing - fixed rate
Lease liabilities
Total financial liabilities
Financial assets - cash flows realisable
Cash and equivalents
Trade and other receivables
Net inflow/(outflow) on financial instruments
-
1,850,094
4,400,720
1,129,752
5,530,472
3,680,379
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,850,094
-
1,850,094
4,400,720
1,129,752
5,530,472
3,680,379
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
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 the foreign exchange risk to be
low and has not entered into any forward foreign exchange contracts.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial
liabilities at the reporting date were as follows:
Consolidated
US dollars
British pounds
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
1,274,725
95,476
154,263
-
111,728
22,533
32,824
-
1,370,201
154,263
134,261
32,824
The consolidated entity had net assets denominated in foreign currencies of $1,235,940 (assets of $1,274,725
less liabilities of $134,261) as at 30 June 2020 (2019: 121,439)). Based on this exposure, had the Australian
dollar weakened by 5% (2019: 5%) against these foreign currencies with all other variables held constant, the
consolidated entity's loss before tax for the year would have been $61,797 lower (2019: $7,007).
The percentage change is the expected overall volatility of the significant currencies, which is based on
management’s assessment of reasonable possible fluctuations taking into consideration movements over the
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
NOTE 23: FINANCIAL RISK MANAGEMENT - CONTINUED
last 6 months each year and the spot rate at each reporting date. The actual foreign exchange gain for the year
ended 30 June 2020 was $52,208 (2019: $33,063).
c.
Price Risk
The consolidated entity is not exposed to any significant price risk.
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be
compared to their carrying values as presented in the balance sheet. Fair values are those amounts at which
an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length
transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in
assumptions may have a material impact on the amounts estimated. Areas of judgment and the
assumptions have been detailed below. Where possible, valuation information used to calculate fair value is
extracted from the market, with more reliable information available from markets that are actively traded. In
this regard, fair values.
Differences between fair values and carrying amounts on financial instruments with fixed interest rates are
due to the change in discount rates being applied by the market since their initial recognition by the company.
Most of the instruments which are carried at amortised cost are to be held until maturity and therefore the net
fair value figures calculated bear little relevance to the company.
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
NOTE 23: FINANCIAL RISK
MANAGEMENT - CONTINUED
Financial Assets
Cash and equivalents
Trade and other receivables
Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables
75
Jun-19
Net Carrying
Value
$
Net Fair
Value
$
4,400,720
1,129,752
5,530,472
4,400,720
1,129,752
5,530,472
1,850,094
1,850,094
1,850,094
1,850,094
Note 24: Reconciliation of profit/(loss) after tax to net cash flow from operations
Consolidated
Jun-20
$
Jun-19
$
Jun-20
Net Carrying
Value
$
Value
$
Net Fair
Cash assets - Note 9
12,345,164
4,400,720
(a) Reconciliation of cash to the statement of cash flows:
(b) Reconciliation of profit from ordinary activities to net cash used in operating activities
(9,779,590)
(8,101,385)
Financial Assets
Cash and equivalents
Trade and other receivables
Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables
- Lease liabilities
12,345,164
1,839,384
14,184,548
12,345,164
1,839,384
14,184,548
1,189,710
1,420,776
2,610,485
1,189,710
1,420,776
2,610,485
Profit after income tax
Add: non cash items
- Other non cash expenses
- Depreciation and amortisation
- Doubtful debts
- Non cash share based payments
- Foreign exchange differences
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
- (Increase) decrease in receivables
- (Increase) decrease in other assets
- Increase (decrease) in payables / creditors
- Increase (decrease) in income in advance
- Increase (decrease) in provisions
Net cash flows used in operating activities
(752,204)
31,538
(365,128)
46,254
314,188
(725,352)
(8,680,547)
270,000
512,224
42,572
947,775
51,825
1,824,396
(142,378)
259,314
36,065
661,251
-
814,252
(234,734)
(342,094)
833,256
85,537
-
341,966
(6,945,168)
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
77
Note 25: Contingencies
Note 28: Parent entity information
There were no contingent liabilities or contingent assets at the date of this report (2019: none) to affect the
financial statements.
Set out below is the supplementary information about the parent entity.
Note 26: Events subsequent to the reporting date
The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the
potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
There have been no matters or circumstances which have arisen since the end of the financial period that
significantly affected, or may significantly affect the operations of the Entity, the results of those operations
or the state of affairs of the Entity, in future years.
Note 27: Other related party transactions
Other related parties include close family members of key management personnel and entities that are
controlled or jointly controlled by those key management personnel individually or collectively with their close
family members.
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other persons unless otherwise stated.
NostraData Pty Ltd is an associated entity of the Company which has entered into the following related party
transaction with the Company during the financial year.
Consolidated
Jun-20
$
Jun-19
$
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
Net assets
Equity
Issued capital
Share options reserve
Accumulated losses
Total equity
Contingent liabilities
Parent
Jun-20
$
Jun-19
$
(1,654,168)
(1,654,168)
(892,333)
(892,333)
37,907
36,090
41,244,993
24,750,511
558,503
558,503
9,722
9,722
40,686,490
24,740,788
43,939,865
1,570,838
(4,824,213)
40,686,490
26,705,989
1,204,843
(3,170,044)
24,740,788
Total value of consulting , data and marketing services
143,157
140,825
Capital commitments – property plant & equipment
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Amounts due and payable to NostraData Pty Ltd at the end
of the financial year included in trade and other payables
26,504
26,061
The parent entity had no capital commitments for property plant & equipment as at 30 June 2020 and 30 June
2019.
Zuellig Pharma Pte Ltd has entered into a joint venture with MedAdvisor Limited with 50% ownership interest
in ZP MedAdvisor Pte Ltd. The following contributions for equity were advanced to the Company during the
financial year.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity as disclosed
in Note 1.
Related party transactions with Zuellig Pharma Pte Ltd
Capital contributions received for investment in ZP
MedAdvisor Pte Ltd
554,890
-
MEDADVISOR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR YEAR ENDED 30 JUNE 2020
MEDADVISOR LIMITED
79
Note 29: Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-
owned subsidiaries in accordance with the accounting policy described in note 1:
Directors’ declaration
The Directors of the Company declare that:
Name
MedAdvisor International Pty Ltd
Health Enterprises 2 Pty Ltd
MedAdvisor Welam UK Ltd.
MedAdvisor Welam USA Inc.
Principal place of business /
Country of incorporation
Australia
Australia
UK
USA
Ownership interest
2020
%
100%
100%
100%
100%
2019
%
100%
100%
100%
100%
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary
with non-controlling interests in accordance with the accounting policy described in Note 1:
Name
Principal place of business / Country
of incorporation
ZP MedAdvisor
Pte.Ltd
Singapore
Parent Ownership interest
2020
%
2019
%
Non-controlling interest
2020
%
2019
%
50%
50%
50%
50%
Note 30: 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:
1.
The consolidated financial statements and notes, as set out on pages 38 to 78, are in accordance with
the Corporations Act 2001 and:
(a)
(b)
comply with Accounting Standards which as stated in accounting policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2020 and of the performance for
the year ended on that date of the Company;
2.
the Director’s have declared that:
(a)
(b)
(c)
the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards;
and
the financial statements and notes for the financial year give a true and fair view; and
3.
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Short-term employee benefits
Share based entitlements
Total compensation
Consolidated
Jun-20
$
Jun-19
$
1,267,322
448,639
1,715,961
1,013,690
67,657
1,081,347
Christopher Ridd
Non-Executive Director and Chair
27 August 2020
Camberwell, VIC
AUDIT REPORT
Audit report
81
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.
Key Audit Matter
How our audit addressed this matter
Impairment of Goodwill
Refer to Note 14 in the financial statements
The Group has goodwill of $4,013,868 as at 30 June
2020.
We identified this area as a key audit matter due to
the size of the goodwill balance, and because the
directors’ assessment of the ‘value in use’ of the cash
generating unit (“CGU”) involves judgements about
the future underlying cash flows of the business and
the discount rate applied to them.
For the year ended 30 June 2020 management have
performed an impairment assessment over the
goodwill balance by:
Calculating the value in use the CGU using a
discounted cash flow model. These models used
cash flows (revenues, expenses and capital
expenditure) for the CGU for 5 years, with a
terminal growth rate applied to the 5th year.
These cash flows were then discounted to net
present value using
the Group’s weighted
average cost of capital (WACC) adjusted for the
CGU; and
Comparing the resulting value in use of the CGU
to their respective book values.
Management also performed a sensitivity analysis
over the value in use calculations by varying the
assumptions used (growth rates, terminal growth rate
and WACC) to assess the impact on the valuations.
Our audit procedures in relation to management’s
impairment assessment included:
Assessing management’s determination that the
goodwill should be allocated to a single CGU based
on the nature of the Group’s business and the
in which results are monitored and
manner
reported;
Assessing the valuation methodology used;
Challenging
the
reasonableness
key
assumptions, including the cash flow projections,
revenue growth
rates, and
sensitivities used;
rates, discount
of
Checking the mathematical accuracy of the cash
flow model, and reconciling input data to supporting
evidence such as approved budgets, and
considering the reasonableness of these budgets;
and
Reviewing the accuracy of disclosures of critical
financial
valuation
estimates and assumptions
in
statements
methodologies.
relation
the
the
to
in
THE POWER OFBEING UNDERSTOODAUDIT |TAX | CONSULTINGRSM AustraliaPartnersis amemberof theRSM network and trades asRSM.RSMis thetradingname used bythemembers of theRSM network. Each memberoftheRSM networkisan independentaccountingand consultingfirm which practicesin its ownright.The RSMnetwork isnot itselfaseparate legal entityin any jurisdiction.RSMAustralia Partners ABN36965185 036Liability limited by a scheme approved under Professional Standards LegislationRSM Australia PartnersLevel 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007 T +61 (0) 3 9286 8000 F +61 (0) 3 9286 8199 www.rsm.com.au INDEPENDENT AUDITOR’S REPORT To the Members of MedAdvisor Limited Opinion We have audited the financial report of MedAdvisor Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial 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: I. giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial performance for the year then ended; and II. complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for OpinionWe 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. THE POWER OF BEING UNDERSTOODAUDIT | TAX | CONSULTINGRSM Australia Partnersis a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036Liability limited by a scheme approved under Professional Standards LegislationRSMAustralia PartnersLevel21, 55 Collins Street Melbourne VIC3000POBox 248Collins Street West VIC8007T +61(0) 3 9286 8000F+61(0) 39286 8199www.rsm.com.auINDEPENDENTAUDITOR’SREPORTTo the Members of MedAdvisorLimitedOpinionWehaveaudited the financial reportofMedAdvisorLimited (the Company) and itssubsidiaries (theGroup), whichcomprises the consolidated statement of financialposition as at30June 2020, the consolidatedstatement ofprofitor lossand other comprehensive income, the consolidated statement of changes in equityand the consolidatedstatement of cash flows for theyear then ended,andnotes to the financialstatements, including asummaryofsignificant accounting policies, andthedirectors'declaration.Inouropinion theaccompanying financial reportoftheGroupisin accordance withthe CorporationsAct2001,including:I.giving a true and fair view of the Group's financial positionas at30 June 2020 and of its financialperformance for theyear thenended;andII.complyingwith Australian Accounting Standards andthe Corporations Regulations2001.BasisforOpinionWe conducted our auditin accordance with Australian Auditing Standards. Ourresponsibilities under thosestandardsare furtherdescribed in the Auditor'sResponsibilitiesforthe Audit ofthe FinancialReportsection ofourreport. We are independentofthe Group in accordancewith the auditorindependence requirementsoftheCorporationsAct 2001 and the ethical requirements of theAccounting ProfessionalandEthicalStandardsBoard'sAPES110Code ofEthicsforProfessionalAccountants(theCode)that are relevanttoourauditofthe financialreport in Australia.Wehave also fulfilled ourother ethical responsibilitiesin accordance with the Code.We confirm that theindependencedeclarationrequired bytheCorporationsAct 2001, which hasbeen given tothe directors of theCompany, would bein the same terms if given to the directors as at the time of this auditor'sreport.Webelieve thatthe auditevidence we have obtained is sufficient and appropriate to providea basisforouropinion. AUDIT REPORT
Audit report
83
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/ar2.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 30 June 2020.
In our opinion, the Remuneration Report of MedAdvisor Limited, for the year ended 30 June 2020, 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.
RSM AUSTRALIA PARTNERS
B Y CHAN
Partner
Date: 27 August 2020
Melbourne, Victoria
Key Audit Matters (continued.) Key Audit Matter How our audit addressed this matter Recognition of Revenue Refer to Note 5 in the financial statements Revenue recognition was considered a key audit matter. MedAdvisor receives revenue from three core income streams, and the accounting for each of these differs. While SaaS revenues from subscriptions are not complex and do not involve significant management judgements, the recognition of revenue generated from Transaction and Development Fees and Health Programs involves management estimates around the timing of delivery of services. Our audit procedures in relation to the recognition of revenue included: Assessing whether the Group’s revenuerecognition policies were in compliance with AASB15 Revenue from Contracts with Customers;Evaluating the operating effectiveness ofmanagement’s controls related to revenuerecognition;Performing substantive analytical reviewprocedures on SaaS revenues;Performing detailed testing on a sample ofTransaction and Development Fees and HealthPrograms revenue recognised and assessing theallocation of revenue to various elements in thecontracts with customers; andReviewing revenue transactions before and afteryear-end to ensure that revenue is recognised inthe correct period.Other Information The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly 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 ReportThe directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 85
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87
87
Governance
and disclosures
MEDADVISOR LIMITED
Additional disclosures
Shareholder information
The shareholder information set out below was applicable as at 18 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As
such, MedAdvisor Limited and its Controlled Entities (‘the Group’) have adopted the third edition of the
Corporate Governance Principles and Recommendations which was released by the ASX Corporate
Governance Council on 27 March 2014 and became effective for financial years beginning on or after 1 July
2014.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2020 is dated as at 30
June 2020 and date of last review and Board approval was on 25 August 2020. The Corporate Governance
Statement is available on MedAdvisor’s website at:
www.mymedadvisor.com/investors-corporate-governance > Governance Documents > Other
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
Number of holders of ordinary
shares
#
%
174
1103
499
833
135
2744
123
0.05%
1.20%
1.56%
9.81%
87.38%
100.00%
0.02%
MEDADVISOR LIMITED
SHAREHOLDER INFORMATION – CONT.
MEDADVISOR LIMITED
SHAREHOLDER INFORMATION – CONT.
89
Equity security holders
Twenty largest quoted security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Escrowed securities
Restricted securities
Voting rights
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares
All issued ordinary shares carry one vote per share (including restricted securities).
Options
Options do not carry a right to vote.
Substantial shareholders
The substantial shareholders in the Company are set out below:
Ordinary Shares
Number
held
% of total
shares
issued
Health Management Systems Inc
31,428,571
12.74%
Ebos Ph Pty Ltd
26,459,627
10.72%
Kojent Pty Ltd
20,540,866
8.33%
Hsbc Custody Nominees (Australia) Limited
16,441,606
6.66%
Wavey Industries Pty Ltd
15,008,943
6.08%
Regal Funds Management Pty Ltd
14,981,247
6.07%
Unquoted equity securities
Options over ordinary shares issued
Corporate directory
Registered office
MedAdvisor Limited,
Level 2, 971 Burke Road,
Camberwell, VIC 3124
Tel: +613 9095 3036
ABN
17 145 327 617
Web address
www.mymedadvisor.com
Directors
Mr Christopher Ridd
Non-Executive Director and Chair
Mr Peter Bennetto
Non-Executive Director
Mr Jim Xenos
Non-Executive Director
Ms Sandra Hook
Non-Executive Director
Mr Jeffrey Sherman
Non-Executive Director
Mr Robert Read
CEO and Managing Director
Mr Joshua Swinnerton
Executive Director and Founder
Company secretaries
Naomi Lawrie and Carlo Campiciano
Stock exchange listing
MedAdvisor Limited shares are listed on the
Australian Securities Exchange (ASX:MDR)
Share registrar
Computershare Investor Services Pty Ltd
Yarra Falls
1152 Johnston Street
Abbotsford Vic 3067
Tel: 1300 850 505 (within Australia)
+613 9415 4000 (outside Australia)
Auditor
RSM Australia Partners
Level 21, 55 Collins Street
Melbourne Vic 3000
Lawyers
HWL Ebsworth – Lawyers
Level 26, 530 Collins Street
Melbourne Vic 3000
Notice of annual general meeting
The Annual General Meeting of MedAdvisor
Limited will be held as a Virtual Meeting
which has been scheduled for 9:00 a.m. on
Thursday 5 November 2020 (further details
will be provided in the Notice of Meeting).