MediaValet Annual Report 2021

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FY2021 Annual Report · MediaValet

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FULL
YEAR
REPORT
2021

Financial
Year Ended
30 June 2021

(Previous corresponding period:
financial year ended 30 June 2020)

COMPANY
CHAIR
AND CHIEF
EXECUTIVE
OFFICER
REPORT

For the financial year
ended 30 June 2021

Overview

Medical Developments International
Limited (ASX: MVP) announced a Net
Loss after Tax for the twelve months
ended 30 June 2021 (FY21) of $12.6m,
down from the Net Profit after Tax of
$0.4m recorded for the same period
in 2020. The FY21 result included the
non-cash impairments announced to
the market on 16 July in relation to the
Medical Devices business and CSIRO
Technology Project.

Gross Revenue in FY21 was $25.7m,
growing 9% from the $23.6m achieved
in the comparable period. As noted
in our half year results release, the
reduction in people movements,
sporting events and ambulance call-
outs reduced the number of trauma
events and ambulance movements,
adversely affecting Australian
Penthrox® sales in the first half.
Encouragingly, when restrictions
eased in the second half of FY21,
the company experienced a strong
rebound in its local Penthrox® sales
with similar trends also observed in
international Penthrox® markets.

Respiratory product sales, whilst
slightly improved in the second half,
were depressed in FY21 as a result of
the milder cold and flu season as well
as reduced community movement
and ongoing improved community
hygiene practices.

Annual Financial Report 2021
Annual Financial Report 2020

Company
Chair Update

I have been pleased with the rapid progress
by MVP in response to the twin challenges
of COVID-19 and retooling the business for
international growth. Considerable work
remains, but we are seeing early signs of a
positive trajectory.

The successful capital raising under David
Williams’ leadership brought financial stability.
Following sterling service by Max Johnston
as interim CEO, Brent MacGregor has taken
firm command of the business and is doing
the heavy lifting of a major operational reset,
while simultaneously maintaining business
momentum in the midst of the pandemic.

After many years of fine service as a non-
executive Director and chair of our Audit and
Risk Committee (ARC), Philip Powell will not
be seeking re-election at the October AGM. I
was very pleased to welcome Richard Betts
who is well qualified to succeed Philip onto the
Board and as ARC chair.

Our Board was also greatly strengthened
by the appointment of Mary Sontrop, who
is playing a key role supporting Brent and
the leadership team with her international
experience.

CEO Update

Since assuming the CEO seat in November,
and then arriving in Australia in January, I
focused on a deep evaluation of all facets of
the organisation. The return of the Penthrox®
business from Mundipharma, in Europe and in
Australia, offered the opportunity for MVP to
reinvent itself and realise the full potential of
our lead product.

The Business Transformation project evaluated
all facets of the organisation to ensure we
had the capabilities to deliver on our global
aspirations. Project outcomes included
replacement of some leadership team members
and the development of critical new business
processes to support an international operation.

The Europe Strategy project was a foundation
piece to ensure we fully understand the

overall size and structure of our key European
markets, including critical market access
steps. It has been very gratifying to see our
European team putting the plan into action
and delivering early sales growth. This project
also re-affirmed our views on the potential for
Penthrox® in these markets.

Both projects were completed in April in time
for the development of the FY22 operating
plan, allowing for budgeting of key actions.

Looking past the important operational details,
I am as confident as I was in November in the
potential of MVP. Promising work has continued
on our next generation product (“Selfie”) and
we are beginning to think of other innovations
to support strategic sales growth.

Finally, I acknowledge the resilience and
commitment of the (now international) MVP
team who have worked extraordinarily hard in
a difficult and uncertain time to maintain the
supply of our important products to patients.

Penthrox®

European transition:
moving forward
Reclaiming the marketing and distribution
rights in Europe from Mundipharma was
completed during the second half of FY21.
A smooth and successful transition of the
existing sales activities across Europe left MVP
poised to execute new launches.

MVP has engaged Medis as our distributor
in five Central European markets (Czech
Republic, Slovakia, Slovenia, Austria, and
Croatia). Medis will undertake a complete
marketing and sales effort in Slovenia and
Croatia and provide logistics support in the
other three markets.

In the United Kingdom and the Republic of
Ireland, MVP’s partner, Galen, continues to
make good progress. Despite the pandemic,
in-market sales grew 41% in FY21, with the UK
being the key driver.

The Birmingham hospital study was published,
articulating the benefits of Penthrox®. Our
Galen partners engaged in a roadshow with
the study investigator to highlight the study
outcomes. We anticipate further penetration
within the UK ambulance market to build on

Medical Developments International Limitedthe successful addition of the Northern Ireland
Ambulance Service earlier this year.

local sales – the primary reason for reported
Penthrox® sales falling behind the prior year.

Further evidence of Galen’s in-market success
includes recent launch orders from the St. John
Ambulance service in England and the Scottish
Ambulance service. MVP and Galen agreed in
early 2021 to renew the distribution agreement
in the UK and Ireland for a further 5-years.

MVP’s partnership with Galen was also
extended into new markets this year with an
agreement for the Nordic region (Finland,
Sweden, Norway, Denmark, and Iceland). Galen
is well-positioned to leverage key learnings
and successes in the UK and Ireland to build
the Penthrox® business across these markets.

We also plan to deploy our own resources
directly in other key markets, particularly in
France, Belgium, and the Netherlands with
Germany, Italy and Spain to follow.

In France, despite a significant reduction
in emergency room visits, we saw only a
modest sales decline. Consistent with the
Europe Strategy, MVP has deployed a key
account manager and will follow with eight
more in FY22. In Belgium, as one of the few
markets with national reimbursement, a similar
approach has commenced.

Australia: return of the
rights
MVP also took back the Australian distribution
rights for Penthrox® from Mundipharma
Australia in December 2020. In the lead up to
the transition, Mundipharma sold through its
existing stock levels which created a gap in

The transition has ultimately been seamless
and the focus has been on building on the
GP and hospital gains made by Mundipharma
last year whilst continuing to enhance the
business in the core ambulance setting. A
number of new Key Account Managers have
been appointed to drive further growth in
the Australian market in ambulance, GP and
hospital settings.

Canada: finding a new
partner
MVP has also reclaimed the Canadian
Penthrox® distribution rights from Purdue.
No fee was paid for the reclamation and a
strategic review for Penthrox® in Canada is
underway with the expectation of securing a
new partnership before the end of 2021.

The guidance was received in early April.
We convened an advisory group of highly
qualified pain management experts to help us
develop a clinical trial protocol based on the
FDA guidance. We expect to submit a revised
clinical trial protocol to the FDA in the first half
of FY22.

Annual Financial Report 2021China: in the start blocks
MVP has achieved ethics approval for its
required Pharmacokinetic study, with the first
patient to be enrolled in Q4 2021. The two
required additional studies (in trauma and minor
surgical procedures) will follow shortly after.

Respiratory

COVID-19 meant that FY21 was difficult for our
respiratory sales. We expect sales to recover
but a moderated growth outlook resulted in
an FY21 impairment charge of $4.706m being
raised against the Medical Devices segment
goodwill on the balance sheet.

MVP does anticipate an improvement in our
respiratory sales in FY22 following the launch
of our first private label space chamber
product into Walmart in the US in FY21. MVP is
also soon to launch its new collapsible spacer
into the Australian market, under the Breath-A-
Tech brand, which has already been accepted
by Australia’s largest pharmacy chain, My
Chemist Warehouse.

CSIRO
Continuous
Flow
Technology
Project

Research has continued with the CSIRO
developing alternative manufacturing methods
for generic APIs utilising the continuous flow
platform technology. The technology (used
by MVP for production of Methoxyflurane,
the active ingredient in Penthrox®) offers
lower costs and a smaller carbon and
physical footprint than traditional batch
processing. Lidocaine stands as the most
advanced process being developed under flow
conditions with new targets to follow in the
coming year.

Through the last year, progress on formally
validating new molecules at commercial scale
production levels was slower than anticipated
and, to-date, no licenses have been achieved,
making reliable estimation of the technology’s
value-in-use difficult. As a result, MVP has
booked a pre-tax impairment provision
for $4.3m in relation to the capitalised
development costs on the basis that future
economic benefit is not assured.

We remain confident in the underlying
technology and are continuing to pursue the
development project with CSIRO.

FY21 Full Year
Financial
Result

The impact of the impairments noted above
on the FY21 result are summarised below:

After Tax Impact of FY21 Impairment

Pre-Impairment Loss after Tax

CSIRO Project Impairment

Medical Device Goodwill Impairment

Reported/Statutory Loss After Tax

(4.714)

(3.145)

(4.706)

(12.565)

These impairments arose from a
comprehensive assessment of the Group’s
balance sheet assets. Encouragingly, the
assessment strongly supported the carrying
value of MVP’s Penthrox® related assets.

Sales
Gross revenue was up 9%, driven by increased
milestone revenue from the Mundipharma
hand-back of the Penthrox® Europe distribution
rights, resulting in accelerated amortisation of
the previously received monies. Gross Margins
on product sales remain strong and largely
consistent with the prior year.

Expenses
Operating expenses for the year (including
impairment charges) increased 128% over
the comparable period primarily due to the
impairment charges booked in FY21

Medical Developments International Limited
($8.96m) and MVP’s investment in its
Penthrox® European sales and distribution
infrastructure. Investment in the European
business in FY21 totalled approximately
$9.5m, including approximately $4.8m paid to
Mundipharma for services associated with the
transition activities. Impairment and Penthrox®
Europe related costs aside, expenses increased
by less than 5% versus the comparative period.

Cash
In December 2020 MVP completed a successful
$24.9m capital raise via a placement supported
by new and existing institutional investors in
Australia and offshore. This was followed by
successful completion in January 2021 of a
Share Purchase Plan raising a further $11.8m.
The combined raisings strengthened MVP’s
balance sheet. The proceeds are being primarily
used to accelerate the commercialisation of
Penthrox® in Europe, to strengthen the depth
and breadth of the MVP team and to complete
clinical and other key studies.

Outlook

MVP anticipates strong sales growth in FY22
driven by rapid development of our European
commercial footprint and renewed vigour and
focus locally to build on our strong profile
in the Australian market. This is despite the
ongoing challenges of COVID-19 in our key
markets.

We believe the changes in recent months have
positioned MVP well for a period of strong
international growth.

We look forward to reporting further progress
at our AGM scheduled for late October 2021.

BRENT MACGREGOR
CHIEF EXECUTIVE
OFFICER

GORDON NAYLOR
COMPANY CHAIR

Further Information:

MARK EDWARDS
COMPANY SECRETARY
03 9547 1888

Annual Financial Report 20216

Medical Developments International LimitedMr Brent MacGregor
Chief Executive Officer

Brent joined Medical Developments International Limited as Chief Executive Officer of
the Company from 1 November 2020. Previously Brent was Senior Vice President for
Commercial Operations at Seqirus having joined in 2015. Seqirus was formed that year from
CSL’s acquisition of the Novartis influenza vaccines business and combining it with their
own bioCSL operation. Seqirus had a turnover of circa $700m and was loss making. Seqirus
by 2019 had a turnover of $1.2b and EBIT of circa $150m. Brent was at the forefront of the
company’s globalisation, focused R&D and rigorous cost management. Prior to Seqirus,
Brent held a number of senior executive roles at Novartis, including CEO of the Novartis
influenza vaccine business, President of Novartis Vaccines (U.S.) and Head of North America.
Brent joined Novartis in 2012 from Sanofi Pasteur, where he had a 16-year career. He also
held a number of senior leadership roles, including Managing Director, Japan; Managing
Director of Australia and New Zealand; Vice President of the Influenza/Pneumococcal
Franchise and Executive Director of Global Strategic Planning.

Brent graduated in 1986 with a Bachelors degree from Carleton University in Canada, a
Masters degree in International Relations from the University of Reading in the UK (1987),
and an MBA from the Kellogg Business School at Northwestern University in U.S. (1995).

Board of Directors

Mr Gordon Naylor
BE (Hons), DipCompSc,
MBA, CPA, GAICD, FTSE

Non-Executive Chair

Mr David Williams
B.Ec (Hons), M.Ec, FAI

Non-Executive Director

Mr Max Johnston
Non-Executive Director

Mr Leon Hoare
AssocDipAppSc(Orth),
GradDipBus, GAICD

Non-Executive Director

Mr Philip Powell
B.Com (Hons) ACA, MAICD

Non-Executive Director

Ms Christine
Emmanuel
B.Sci (Hons), M. ENT,
FICPI, MAICD

Non-Executive Director

Ms Mary Sontrop
B.AppSci, Grad Dip Quality
Mgt, Grad Dip Management
(Health), MBA, FAICD

Non-Executive Director

Mr Richard Betts
B.Ec, ACA

Non-Executive Director

The above-named directors held office during and since the end of the financial year.

Annual Financial Report 2021

7
7

Annual Financial Report 2021Innovative solutions for being

pioneers in design

Product
portfolio

Pharmaceutical

Analgesia

• Penthrox®

Medical

Asthma
• Anti-Static Compact Space Chamber Plus®
• Anti-Static Space Chamber Plus®
• Breath-A-Tech® Spacer
• Breath-A-Tech® Hospital Spacer
• Breath-A-Tech® Portable Nebuliser
• Breath-A-Tech® Peak Flow Meter
• Breath-Alert® Peak Flow Meter
• Compact Space Chamber Plus®
• MyMDI™ Pulse Oximeter
• Space Chamber Plus®
• Space Chamber Plus®Autoclavable spacer
• Space Chamber Slim®

•

Face masks

• EZ-fit Silicone Face Mask

• MyMDI™ Anti-Static Silicone Face Mask

• MyMDI™ Silicone Face Mask

Oxygen
• OXI-Port® oxygen therapy device
• OXI-Sok oxygen therapy device
• OXI-Pro oxygen resuscitation device
• OXI-Life oxygen resuscitation device
• OXI-Saver™ closed circuit oxygen

resuscitation device

• OXI-Vac™ suction system

Regulators

• KDK™ regulator/flow meter with oxygen flush

Veterinary

• Breath-Alert® breathing monitor
• LANA closed circuit anaesthetic machine
• Mini-KOM™ anaesthetic machine
• MK5 closed circuit anaesthetic machine

• Veterinary spacers

pioneers in design

Innovative solutions for being

able to offer relief

Pharmaceutical

MVP is a world leader in the
management of acute and
procedural pain.

Building our business

MVP manufactures its world leading inhaled
analgesic from its premises located in Scoresby
and Springvale, Victoria, Australia. MVP is the sole
manufacturer of the active molecule worldwide and
continues to develop new markets and applications
for the iconic brand Penthrox®. Penthrox® continues
to be a core medication for the treatment of pain
in trauma by all Ambulance Services in Australia
and New Zealand. MVP continues to focus on the
Australian Ambulance services ensuring that the
strong positioning of Penthrox® is maintained.
Moving forward, the strategy is to continue to
broaden the range of customers (across numerous
specialties) domestically and globally with the
assistance of Penthrox® distribution partners in
specific markets.

Product suite

MVP is continuing to develop additional
formulations of Penthrox® to improve convenience,
utility and value for its customers. This includes
investing in the product development of next
generation Penthrox® inhalers.

Innovative solutions for being

independent

Medical devices

Building our product range

MVP’s focus in FY22 will be to add to our
established product range, to build on the solid
foundation that has been established with our
current partnerships in Australia and overseas. At
the same time MVP will develop new collaborations
for future growth. Core to the growth is the
development of new and improved models of:

• Asthma/COPD Space Chambers

• Peak Flow Meters

• Portable Nebulisers

• Silicone Face Masks

Asthma devices

MVP’s Asthma devices business has been strong for
many years and continues to provide solid sales and
profit. The success of this business over recent years
has been due to:

• The acquisition and subsequent expansion of the

Breath-A-Tech® range

• Growing sales of our range of Asthma products
through established international partners and
development of new partnerships. Of note is
the ongoing growth in respiratory sales in the
USA with MVP products now in approximately
20,000 pharmacies across the USA. MVP now
manufactures spacers for Walmart under their
‘equate’ private label brand.

Product development

To assist in future growth MVP has developed
new and improved Space Chambers to assist with
product differentiation to increase domestic and
international penetration.

Innovative solutions for being

prepared care givers

Oxygen and
other medical
equipment

Safe, precision engineering
and custom design kits and
accessories

MVP manufactures a range of oxygen therapy
and resuscitation equipment, providing
healthcare professionals and trained personnel
with the ability to administer oxygen to patients
in an emergency situation. These devices range
from basic through to advanced systems of
delivering oxygen therapy or resuscitation.

Product suite

• OXI-Port® oxygen therapy device

• OXI-Sok oxygen therapy device

• OXI-Pro oxygen resuscitation device

• OXI-Life oxygen resuscitation device

• OXI-Saver™ closed circuit oxygen

resuscitation device

• OXI-Vac™ suction system

These products are all custom assembled and
tested at MVP’s TGA approved manufacturing
facilities in Melbourne, Australia.

The market

MVP’s oxygen equipment is purchased and
used by:

• Ambulance services

• Fire brigades

• Lifesaving clubs

• Military

Innovative solutions for being

carers of all creatures

Veterinary

MVP has a global
veterinary presence

Products

• Anaesthetic machines

• Vaporisers

• Breathing monitors

• Veterinary Spacers

The market

MVP offers a range of open and closed circuit
anaesthetic machines to the veterinary market,
which are popularly known as Komesaroff
anaesthetic machines. MVP has developed a
unique market position regarding the design,
manufacture and supply of closed circuit
anaesthetic machines to this niche market
in Europe. Whilst the majority of MVP’s
veterinary products continue to be sold into
Europe and China through our distributor,
Kruuse, MVP also manufactures the VetOne
animal spacer products for USA veterinary
supplies company, MWI.

carers of all creatures

Innovative solutions for being

masters in their field

FULL
YEAR
REPORT
Financial year
ended 30 June
2021

(Previous corresponding
period: financial year ended
30 June 2020)

Contents

Directors’ Report

Independence Declaration

Independent Auditor’s Report

Directors’ Declaration

Consolidated Statement of Profit or Loss
and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity 42

Consolidated Statement of Cash Flows

Notes to the Financial Statements

masters in their field

Directors’
Report

The directors of Medical Developments
International Limited (“MVP”) herewith submit
the annual financial report of the company
and the entities it controlled (“Group”) for the
financial year ended 30 June 2021. In order to
comply with the provisions of the Corporations
Act 2001, the directors report as follows:

Information about the
Directors
The names and particulars of the directors of
the company during or since the end of the
financial year are:

Mr G Naylor
BE (Hons), DipCompSc, MBA, CPA, GAICD,
FTSE

Non-Executive Chair
(since 18 December 2020)
Mr Naylor has enjoyed a long and successful
international business career. For over 30 years
he was a key part of the internationalisation
of CSL, holding a range of business and
functional leadership roles including Chief
Financial Officer. At the time of his retirement
from CSL, he was the President of Seqirus
where he led the 3-year turnaround of that
business into one of the most successful
vaccine companies in the world. Mr Naylor
joined the MVP Board on 14 October 2020,
becoming Company Chair on 18 December
and is also Chair of the MVP Human Resources
Committee.

Mr D J Williams
B.Ec (Hons), M.Ec, FAICD

Non-Executive Director
(since 16 September 2003)
Managing Director of Kidder Williams Ltd, with
over 35 years experience in the investment
banking sector. He is also Chairman of
PolyNovo Ltd and RMA Global Limited. Mr
Williams was Non-Executive Chairman of MVP
since its listing until 17 December 2020.

Mr R M Johnston

Non-Executive Director
(since 5 November 2012), Interim
Executive role during the current year
Mr Johnston is Chairman of Auscann Group
Holdings Ltd and a former non-executive
director and Chairman of Probiotec Limited.
He is also a former non-executive director of
Enero Group Limited and Polynovo Limited.
Mr Johnston is also a Director of Prolife Foods
Ltd and BARD1 Life Sciences Limited. For 11
years he was President and Chief Executive
Officer of Johnson & Johnson Pacific and an
Executive Director of Johnson & Johnson.
Mr Johnston has also held several prominent
industry roles as a past President of ACCORD
Australasia Limited, a former Vice Chairman
of the Australian Food and Grocery Council
and a former member of the board of ASMI.
Mr Johnston has had extensive overseas
experience during his career in leading
businesses in Western and Central-Eastern
Europe, Africa as well as Asia-Pacific. Mr
Johnston was acting CEO of MVP from 5 June
2020 until 31 October 2020.

Mr L Hoare
AssocDipAppSc(Orth), GradDipBus,
GAICD

Non-Executive Director
(since 27 September 2013)
Mr Hoare is the Managing Director of Lohmann
& Rauscher Australia & New Zealand (ANZ),
a private EU based medical device company.
Previously, he was Managing Director of Smith
& Nephew ANZ (all divisions) until 2015,
one of the Smith & Nephew’s largest global
subsidiaries outside the USA. He served as
President of Smith & Nephew’s Asia Pacific
Advanced Wound Management (AWM)
business for 5 years and was a member of the
Global Executive Management for the AWM
Division. In his 24 years with Smith & Nephew,
he also held roles in Marketing, Divisional
and General Management. His career has
also included a senior role at Bristol-Myers
Squibb (medical devices), and as Vice-Chair
of Australia’s peak medical device industry
body, Medical Technology Association of
Australia. Mr Hoare is a member of the MVP
Remuneration and Nominations Committee. He
is also a non-executive director of PolyNovo
Limited.

Medical Developments International LimitedMr P J Powell
B.Com (Hons) ACA, MAICD

Non-Executive Director
(since 17 December 2014)
Mr Powell, a Chartered Accountant, has an
extensive finance background and commenced
working in investment banking in 1996 at
Hambros Corporate Finance following ten
years industry experience in senior finance
roles with ASX listed public company OAMPS
Limited. Prior to these roles, he worked for ten
years within the Assurance Division at Arthur
Andersen & Co. From January 2006 to July
2013, he was a director at Corporate Finance
Advisory firm Kidder Williams. Mr Powell is
also a non-executive director of RMA Global
Limited and BARD1 Life Sciences Limited and
a former non-executive director of PolyNovo
Limited. Philip is Chairman of MVP’s Audit and
Risk Committee.

Ms C Emmanuel
B.Sci (Hons), M. ENT, FICPI, MAICD

Non-Executive Director
(since 26 May 2020)
Ms Emmanuel is an experienced patent
and trademark attorney, and a business
development professional having more than
30 years experience locally and internationally.
Ms Emmanuel is a former Executive Manager
of Business Development and Commercial at
the CSIRO, where she founded and led the
management of CSIRO’s IP team and managed
the growth of the CSIRO equity portfolio for
over 5 years. Prior to this role, Ms Emmanuel
was in-house IP Counsel for Unilever in the
UK and practised as a patent and trademark
attorney for Wilson Gunn (UK) and Davies
Collison Cave and Griffith Hack in Melbourne.
She is also currently non-executive director of
Polynovo Ltd, IP & Commercialisation manager
at RMIT University, Vice President of the
Council of Patent & Trademarks Attorneys of
Australia and on the Life Sciences Council of
SPE Australia.

Ms M Sontrop
B.AppSci, Grad Dip Quality Mgt, Grad Dip
Management (Health), MBA, FAICD

Non-Executive Director
(since 5 March 2021)
Ms Sontrop has extensive international
experience in the biopharmaceutical sector
across manufacturing operations, quality,
and business integration. During her 28
years with CSL Limited, Ms Sontrop was an
integral part of CSL’s globalisation through
a series of major acquisitions. This included
primary responsibility for the turnaround
of unprofitable manufacturing operations.
Subsequently as head of global plasma
manufacturing, Ms Sontrop delivered a
globally integrated manufacturing network
spanning four countries. As head of CSL’s
Australia and New Zealand pharmaceutical
business, Ms Sontrop and her team delivered
Australia’s most successful adolescent/adult
immunisation program and achieved USFDA
(US Food & Drug Administration) approval
to manufacture and export CSL’s seasonal
and pandemic influenza vaccines. Ms Sontrop
also has significant international governance
experience is currently a non-executive
director of IDT Australia Limited.

Mr R Betts
B.Ec, ACA

Non-Executive Director
(since 11 May 2021)
Mr Betts is an experienced executive who has
held senior roles with ASX listed entities over
20 years. Mr Betts is currently CFO at Ridley
Corporation Limited and was previously CFO
at Pact Group Holdings Ltd for 6 years. Prior
to that he held divisional finance and other
executive roles at Orica Limited, these roles
provided a deep understanding of working in
various jurisdictions, including North America,
Europe and Asia. Mr Betts has extensive
financial and governance experience within
international manufacturing environments.

Annual Financial Report 2021Directorships of other
listed companies
Directorships of other listed companies held
by the directors in the 3 years immediately
before the end of the financial year are as
follows:

Name

Company

Period of
Directorship

David
Williams

Max
Johnston

Polynovo Limited
(Chairman)

Since 13 March 2014

RMA Global
Limited
(Chairman)

Since November 2014

Polynovo Limited

13 May 2014 -
13 November 2020

CannPal Animal
Therapeutics
Limited

Since 21 April 2017

AusCann Group
Holdings Ltd

Since 20 December
2019

BARD1 Life
Sciences Limited

Polynovo Limited

Philip
Powell

RMA Global
Limited

Since 17 June 2019

13 May 2014 -
13 November 2020

Since 5 April 2018

BARD1 Life
Sciences Limited

Since 17 June 2019

Polynovo Limited Since 27 January 2016

Polynovo Limited Since 13 May 2020

Leon
Hoare

Christine
Emmanuel

Mary
Sontrop

IDT Australia
Limited

Since 21 February 2018

Company Secretary
Mr Mark Edwards, B.Acc, ACA. Mr Edwards
is also the Chief Financial Officer of the
company.

Principal Activities
The company’s principal activities during
the course of the financial year were
the manufacture and distribution of a
pharmaceutical drug and medical and
veterinary equipment.

Review of
Operations

Penthrox® Developments

European transition; moving forward
Reclaiming the marketing and distribution
rights in Europe from Mundipharma was
completed during the second half of FY21.
A smooth and successful transition of the
existing sales activities across Europe left MVP
poised to execute new launches.

MVP engaged Medis as our distributor in five
Central European markets (Czech Republic,
Slovakia, Slovenia, Austria, and Croatia). Medis
will undertake a complete marketing and sales
effort in Slovenia and Croatia and provide
logistics support in the other three markets.

In the United Kingdom and the Republic of
Ireland, MVP’s partner, Galen, continues to
make good progress. Despite the pandemic,
in-market sales grew 41% in FY21, with the UK
being the key driver.

Further evidence of Galen’s in-market success
includes recent launch orders from the St.
John Ambulance service in England and the
Scottish Ambulance service. MVP and Galen
agreed in early 2021 to renew the distribution
agreement in the UK and Ireland for a further
5 years.

We also plan to deploy our own resources
directly in other key markets, particularly in
France, Belgium, and the Netherlands with

Medical Developments International LimitedGermany, Italy and Spain to follow.

Australia: return of the rights
MVP also took back the Australian distribution
rights for Penthrox® from Mundipharma
Australia in December 2020. In the lead up to
the transition, Mundipharma sold through its
existing stock levels which created a gap in
local sales – the primary reason for reported
Penthrox® sales falling behind the prior year.

Canada: finding a new partner
MVP has also reclaimed the Canadian
Penthrox® distribution rights from Purdue.
No fee was paid for the reclamation and a
strategic review for Penthrox® in Canada is
underway with the expectation of securing a
new partnership before the end of 2021.

United States: continuing the discussion
MVP held a ‘Type-C’ meeting with the FDA
in January 2021 where we sought further
guidance on a pathway to lifting the IND
clinical hold so that we could move into Phase
III. The guidance was received in early April.
We convened an advisory group of highly
qualified pain management experts to help us
develop a clinical trial protocol based on the
FDA guidance. We expect to submit a revised
clinical trial protocol to the FDA in the first half
of FY22.

China: in the starting blocks
MVP has achieved ethics approval for its
required Pharmacokinetic study, with the first
patient to be enrolled in Q4 2021. The two
required additional studies (in trauma and

minor surgical procedures) will follow shortly
after.

Respiratory Portfolio
Developments
COVID-19 meant that FY21 was difficult for our
respiratory sales. We expect sales to recover
but a moderated growth outlook resulted in an
FY21 impairment charge of $4.7m being raised
against the Medical Devices segment goodwill
on the balance sheet.

CSIRO Continuous Flow
Technology Project
Research has continued with the CSIRO
developing alternative manufacturing methods
for generic APIs utilising the continuous flow
platform technology. The technology (used
by MVP for production of Methoxyflurane,
the active ingredient in Penthrox®) offers
lower costs and a smaller carbon and
physical footprint than traditional batch
processing. Lidocaine stands as the most
advanced process being developed under flow
conditions with several new targets to follow in
the coming year.

Through the last year, progress on formally
validating new molecules at commercial scale
production levels was slower than anticipated
and, to-date, no licenses have been achieved,
making reliable estimation of the technology’s
value-in-use difficult. As a result, MVP has
booked a pre-tax impairment loss of $4.3m in
relation to the capitalised development costs
on the basis that future economic benefit is
not assured.

We remain confident in the underlying
technology and are continuing to pursue the
development project with CSIRO.

Annual Financial Report 2021FY21 Full Year Financial
Result
Revenue was a record $25.7m, growing by 9%
as a result of the increase in contract income
during the current year. This income was
associated with MVP taking back the EU and
Canadian Penthrox® distribution rights, which
accelerated the recognition in the Profit and
Loss Statement of the previously deferred
contract income amounts associated with the
partnerships in those regions. As a result, gross
margins were also higher.

Expenses increased significantly during the
period due to:

• $9.5m of cost associated with the Penthrox®
EU transition, including a once off transition
services payment to Mundipharma of $4.8m;
and

• $9.0m of impairments recognised during

the current year related to Medical
Devices segment goodwill and the CSIRO
Technology project.

Cash flow
At 30 June 2021, the group had $36.3m in cash
reserves. The company completed a capital
raise during the year as outlined in note 21
which raised $36.7m. During the year MVP
invested:

• $9.5m in taking back the Penthrox® EU
distribution rights and establishing the
required operational infrastructure;

• $3.7 million in clinical trials and registrations

for Penthrox®;

• $1.1 million in our manufacturing

development program with the CSIRO; and

• $1.2 million in various manufacturing and

office equipment.

MVP will continue to invest in its regulatory
program, particularly the USA and China
Penthrox® registrations in FY22 and beyond.

COVID-19
The internal and manufacturing operations
of MVP have not been adversely impacted
by COVID-19 shutdowns, given the company
is recognised as an essential business and
has been able to accommodate ongoing

production and work from home practices.
Refer above for impact of COVID-19 on the
Group’s respective segments.

Financial position
Other than the capital raising referred to in
note 21, the capital structure of the group
remained stable during the period and the
Group has no bank debt. The FY21 result
included the impact of the $9.0m of non-cash
impairments announced to the market on 16
July in relation to the Medical Devices business
and CSIRO Technology Project as outlined
further in notes 13 and 14.

Changes in state of affairs
Other than as discussed in the “Review of
Operations” section above, there was no
significant change in the state of affairs of the
company during the year.

Subsequent events
There has not been any matter or circumstance
that has arisen that has 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.

Dividends
No dividend was declared in relation to the full
year ended 30 June 2021. An interim dividend
was declared in the prior year.

Indemnification of officers and auditors
During the financial year, the company paid a
premium in respect of a contract insuring the
directors of the company (as named above)
and all executive officers of the company
against a liability incurred as such a director,
secretary or executive officer 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.

The company has not otherwise, during or
since the end of the financial year, indemnified
or agreed to indemnify an officer or auditor
of the company against a liability incurred as
such an officer or auditor.

Medical Developments International LimitedG. Naylor*

D.J. Williams

M. Johnston

L. Hoare

P.J. Powell

C. Emmanuel

M. Sontrop†

R. Betts‡

Board of Directors

Audit & Risk Committee

Held

Attended

Held

Attended

*Gordon Naylor joined the Board on 14 October 2020 and was therefore only eligible to attend 8 Board meetings in the current year.

†Mary Sontrop joined the Board on 5 March 2021 and was therefore only eligible to attend 4 Board meetings in the current year.

‡Richard Betts joined the Board on 11 May 2021 and was therefore only eligible to attend 2 Board meetings in the current year.
Richard has also joined the MVP Audit and Risk Committee

The sole Human Resources Committee held during the year was attended by D Williams & L Hoare.

Directors’ meetings
The above table sets out the number of
directors’ meetings (including meetings of
committees of directors) held during the
financial year and the number of meetings
attended by each director (while they were
a director or committee member). During
the financial year, ten Board meetings, three
Audit and Risk Committee meetings and one
Human Resources Committee (previously
Remuneration and Nominations Committee)
meeting were held.

Directors’ shareholdings
The following table sets out each director’s
relevant interest in shares at the date of this
report.

management personnel for the financial
year ended 30 June 2021. The term ‘key
management personnel’ refers to those
persons having authority and responsibility
for planning, directing and controlling the
activities of the consolidated entity, directly
or indirectly, including any director (whether
executive or otherwise) of the consolidated
entity. The prescribed details for each person
covered by this report are detailed below
under the following headings:

• Key management personnel

• Remuneration policy

• Relationship between the remuneration

policy and company performance

• Remuneration of key management

personnel

Fully paid shares

• Key terms of employment contracts.

G. Naylor

D.J. Williams

M. Johnston

L. Hoare

P.J. Powell

C. Emmanuel

M. Sontrop

R. Betts

266,615

9,515,242

54,300

31,244

269,180

18,630

3,300

Directors hold no options over shares as at 30
June 2021 (2020: Nil).

Audited remuneration report
This remuneration report, which forms part
of the directors’ report, sets out information
about the remuneration of Medical
Developments International Limited’s key

Key management personnel details
The company’s key management personnel
consist of the following directors and
executives:

The directors of the company during or since
the end of the financial year were:

• G. Naylor (Chairman from 18 December

2020, non-executive)

• D.J. Williams (Chairman until 17 December

2020, non-executive)

• R.M. Johnston (Executive as outlined further

below)

• L. Hoare (non-executive)

• P. Powell (non-executive)

• C. Emmanuel (non-executive)

Annual Financial Report 2021
• M. Sontrop (non-executive since 5 March

2021)

• R. Betts (non-executive since 11 May 2021)

The company executives during or since the
end of the financial year were:

• B. MacGregor (Chief Executive Officer since

1 November 2020)

• R.M. Johnston (Acting Chief Executive

Officer until 31 October 2020)

• M. Edwards (Chief Financial Officer/

Company Secretary)

Max Johnston served as acting CEO for
the Group between 5 June 2020 and 31
October 2020 as the Board was undertaking

the search for the Group’s new CEO. Once
Brent MacGregor joined as CEO on 1
November 2020, Max conducted a handover
of responsibilities to Brent after which he
returned to his previous role of non-executive
director.

Except as noted, the named persons held their
current position for the whole of the financial
year and since the end of the financial year.

Key management personnel equity holdings – fully paid ordinary shares

2021

Balance at
30 June
2020
No.

Balance
held upon
joining
No.

Issued during
the year via
SPP
No.

Disposals
No.

Acquired
No.

Net Other
Change
No.

G. Naylor

8,000

4,615

254,000

D.J. Williams

9,650,782

M. Johnston

L. Hoare

P.J. Powell

C. Emmanuel*

M. Sontrop

R. Betts

B. MacGregor

M. Edwards

39,868

14,129

264,565

3,300

18,460

(154,000)

4,615

9,817

12,500

18,630

9,969,344

11,300

36,920

(154,000)

294,947

Balance at
30 June
2021
No.

266,615

9,515,242

54,300

31,244

269,180

18,630

3,300

10,158,511

*In December 2020 during the capital raising, it was announced that Christine Emmanuel, was allocated approximately
$100,000 (15,385 of Placement Shares) through participating in the Placement. The issue of Placement Shares allocated to
Christine Emmanuel is subject to MVP shareholder approval at the Group’s next AGM scheduled to be held in October 2021.
Accordingly, this portion of the placement will not settle until that time.

2020

D.J. Williams

M. Johnston

L. Hoare

P.J. Powell

C. Emmanuel

J. Sharman*

M. Edwards

Balance at
30 June
2019
No.

Issued
during the
year via DRP
No.

9,608,754

42,028

39,694

14,068

263,413

5,179

174

1,152

(5,202)

*John Sharman resigned on 5 June 2020

9,931,108

43,438

(5,202)

Disposals
No.

Acquired
No.

Net Other
Change
No.

Balance at
30 June
2020
No.

9,650,782

39,868

14,129

264,565

9,969,344

Medical Developments International LimitedRemuneration policy
The board continues to set remuneration at a
level that will attract directors and executives
of high calibre. The two key elements are:

• Base salary and fees, which are determined
by reference to the market rate based on
payments at similar sized companies in the
industry; and

• Performance incentives, which have two

components – short term incentives based
on achieving key performance indicators
during the year and payable in cash, and
long-term incentives payable in equity, the
value of which depends on the share price
of the company.

The Human Resources Committee, was
reconfigured late in the current financial year
and now comprises of G. Naylor, M. Johnston
and L. Hoare. This committee determines
the salary package of the company CEO and
reviews the compensation of the non-executive
directors on an annual basis. Changes are
approved by the Board as a whole.

Relationship between the remuneration
policy and company performance
The Board aims to ensure there is a strong
link between company performance and
remuneration and believes that the use
of performance incentives ensures that
company performance is reflected in the
quantum of payments made to executives.
Performance metrics are selected to ensure
that the interests of management are aligned
with those of shareholders. For short term
incentives, key metrics are Revenue, Free Cash
Flow and NPAT (Net Profit after Tax), used
to directly link company earnings and cash
bonuses and other operational measures and
individual specific performance measures, the
achievement of which provides the basis for
future growth and profitability.

The long-term incentive scheme is centred
around the achievement of regulatory related
performance measures for key territories.

The table and graph below depict the
company’s earnings for the current financial
year and the previous seven financial years.

Net Proﬁt/(Loss) After Tax 2014-2021

4,000

2,000

-2,000

-4,000

-6,000

-8,000

-10,000

-12,000

-14,000

0
0
0
$

2014

2015

2016

2017

2018

2019

2020

2021

NPAT

875

1,529

1,569

1,820

243

1,038

379

-12,565

The following table shows the company’s share prices for the current financial year and the
previous seven financial years:

Share price - start ($)

Share price - end ($)

Interim Dividend (cps)

Final Dividend (cps)

Basic Earnings per Share (cps)

Diluted Earnings per Share (cps)

2014

2015

2016

2017

2018

2019

2020

2021

1.27

1.32

1.50

1.32

2.68

2.65

2.68

6.10

2.00

1.61

1.60

6.10

4.95

2.00

3.10

4.95

5.80

2.00

0.41

5.80

5.30

2.00

1.61

1.60

5.30

6.98

2.00

6.98

4.50

0.58

(18.35)

0.58

(18.35)

Annual Financial Report 2021Dividends
No dividend has been declared for the full year (2020: Nil). An interim dividend was declared in
the prior year.

Elements of director and executive remuneration
Remuneration packages contain the following key elements:

1. Primary benefits – salary/fees and cash bonuses

2. Post-employment benefits – superannuation

3. Equity – rights to share options granted under the Long-Term Incentive Plan.

The following table discloses the remuneration of the directors of the company in 2021:

Short-Term
Employee Benefits

Post
Employment

Bonus
$

Superannuation
$

Long-
Term
Employee
Benefits

Share-
Based
Payments

Long
Service
Leave
$

Options
& Rights
$

Total

2021

Directors

Gordon Naylor

D. J. Williams

M. Johnston

L. Hoare

P.J. Powell

C. Emmanuel

M. Sontrop

R. Betts

Salary
& Fees
$

58,409

69,444

54,795

18,265

9,132

374,430

5,549

6,597

5,205

1,735

868

35,569

63,958

76,041

60,000

20,000

10,000

409,999

Max Johnston served as acting CEO for the Group between 5 June 2020 and 31 October 2020 as
the Board was undertaking the search for its new CEO. Max received additional remuneration for
this additional work and effort as outlined in the table below.

The following table discloses the remuneration of the key executives of the company in 2021:

2021

Short-Term
Employee
Benefits

Post
Employment

Salary
& Fees
$

Bonus
$

Superannuation
$

Long-
Term
Employee
Benefits

Long
Service
Leave
$

Share-
Based
Payments

Remuneration
Linked to
performance

Total

Options
& Rights
$

Executives

B. MacGregor

350,537

M Johnston
(Interim Chief
Executive
Officer)

M. Edwards
(CFO/
Company
Secretary)

181,126

216,819

748,482

14,463

266

784,608

1,149,874

17,207

198,333

68%

20,598

8,909

55,269

301,595

18%

52,268

9,175

839,877

1,649,802

Medical Developments International LimitedThe following table discloses the remuneration of the directors of the company in 2020:

2020

Directors

D.J. Williams

M. Johnston

L. Hoare

P.J. Powell

C. Emmanuel

Short-Term
Employee Benefits

Post
Employment

Bonus
$

Superannuation
$

Long-
Term
Employee
Benefits

Share-
Based
Payments

Long
Service
Leave
$

Options
& Rights
$

8,242

5,205

434

24,291

Salary
& Fees
$

86,758

54,795

4,566

255,709

Total

95,000

60,000

5,000

280,000

The following table discloses the remuneration of the key executives of the company in 2020:

Short-Term
Employee Benefits

Post
Employment

Salary
& Fees
$

Bonus
$

Superannuation
$

Long-
Term
Employee
Benefits

Long
Service
Leave
$

Share-
Based
Payments

Remuneration
Linked to
performance

Total

Options
& Rights (i)
$

414,889

60,000

31,394

(7,700)

(234,095)

264,488

-66%

197,108

9,132

19,593

5,654

55,421

286,908

22%

2020

Executives

J. Sharman
(Chief
Executive
Officer)

M. Edwards
(CFO/
Company
Secretary)

611,997

69,132

50,987

(2,046)

(178,674)

551,396

(i) The fair value of the options granted to Mr Edwards as part of his remuneration were

calculated at grant date using a Black Scholes Option Pricing Model.

(ii) The fair value of options granted to Mr MacGregor as part of his remuneration were

calculated at grant date using a Monte Carlo Simulation Model that factors in the vesting
triggers that include both stock price and other factors (i.e. service tenure).

Additional details in relation to the valuation methodologies applied are outlined below and also
within note 33 of the Annual Report.

Elements of remuneration related to
performance
Fees paid to non-executive directors are not
directly tied to performance. Salaries paid
to the key executives (including executive
directors) are also not directly tied to
performance. The short term and long-term
incentive programmes are directly related to

performance and regulatory approvals, and
the conditions and assessment methods are
explained below.

Short-term incentives
The determination and approval of any
potential bonuses is at the discretion of the
Board. During the 2021 financial year, no
discretionary bonuses were paid or deemed

Annual Financial Report 2021payable based on business performance
(2020: $69,132 were determined and approved
by the Human Resources Committee in relation
to key management personnel in respect of
their performance in the 2019 financial year).

Long-term incentives

Executive option plans
Under the Executive Option plan awards were
made to executives who have an impact on the
Group’s performance. LTI awards are delivered
in the form of options over shares which vest
on the achievement of specific performance
measures, typically including market based
performance hurdles and non-market based
performance hurdles, including service period
targets and also the approval of Penthrox® in
the USA.

The fair value of share options granted is
estimated at the date of grant using either a
Black Scholes Option Pricing Model or a Monte
Carlo Simulation, taking into account the terms
and conditions upon which the share options
were granted including the option price, the life
of the option, the share price of the underlying
shares on grant date and the expected share
price volatility. It also takes into account
historical and expected dividends. There are no
cash settlement alternatives for the employees
and The Group does not have a past practice of
cash settlement for these awards.

All outstanding options will be cancelled if
the employee leaves or is no longer employed
by MVP for any reason. When the Long-Term
Incentive Plan “LTIP” has met its vesting
criteria and delivers an entitlement to an equity
interest, the employee will typically have 3
months to exercise the relevant options, after
which the relevant options will lapse. Each
share option converts into one ordinary share of
Medical Developments Limited on exercise. No
amounts are paid or payable by the recipient on
the receipt of the option nor are they tradeable
at any time. The options carry neither rights to
dividends or voting rights.

Executive option plans
The following share-based payment
arrangements were in existence during the
current reporting period:

CEO option plan
MVP’s CEO, Brent MacGregor commenced with
MVP on 1 November 2020 at which point in time
it was announced that a long-term incentive

plan had been agreed to, to encourage his
long-term commitment to the business.
1,968,704 options over ordinary shares were
issued to the CEO under the Company’s
Employee Share Option Plan. All options have
a nil exercise price and no entitlement to
dividends over the vesting period.

The option issue is divided into four equal
tranches, with the vesting criteria for each
tranche as follows:

• 25% vest on the achievement of a $8 daily
VWAP for 30 consecutive trading days
(vesting is also subject to the completion
of a 4-year service period from the date of
achieving the share price hurdle);

• 25% vest on the achievement of a $9 daily
VWAP for 30 consecutive trading days
(vesting is also subject to the completion
of a 3-year service period from the date of
achieving the share price hurdle);

• 25% vest on the achievement of a $10 daily
VWAP for 30 consecutive trading days
(vesting is also subject to the completion
of a 2-year service period from the date of
achieving the share price hurdle); and

• 25% vest on the achievement of a $11 daily
VWAP for 30 consecutive trading days
(vesting is also subject to the completion
of a 1-year service period from the date of
achieving the share price hurdle).

The options are subject to a share price target
which commences at the grant date of the
option and ceases 7 years from grant date.
Following achievement of the share price
target, MVP’s CEO must complete a service
period (as specified above). Each tranche vests
at the end of the relevant service period. The
service period condition is waived if the share
price hurdle is achieved by the 5th anniversary
of the options grant e.g. if the share price
hurdle is met 4.5 years after grant, the options
will vest at the 5th anniversary.

Following vesting and exercise, 50% of the
shares will be subject to escrow for 24 months.
If employment ceases for any reason prior to
vesting, the unvested options are forfeited.

Senior management option plan
In September 2018 the company announced
it had agreed to a LTIP with key Senior
Management team members.

Under the plan certain Senior Management
team members were granted options with

Medical Developments International Limiteda strike price of $0.01. The options will only vest on the earlier of FDA approval of Penthrox®
for sale in the USA or the company receives an unconditional takeover offer worth more than
$350m.

A summary of the option plans granted during the year and outstanding as at 30 June 2021 are
outlined below:

2021

Balance
at
30 June
2020
No.

Granted as
remuneration
No.

Exercised
No.

Lapsed/
forfeited
No.

B. MacGregor

1,968,704

M. Edwards
(CFO)

Senior
Management

100,000

300,000

245,000

400,000

2,213,704

Balance
vested at
30 June
2021
but not
exercised
No.

Balance
not
vested
at 30
June
2021
No.

1,968,704

100,000

545,000

Balance
at 30
June
2021
No.

1,968,704

100,000

545,000

2,613,704

- 2,613,704

Options
vested
during
the
year
No.

A summary of option plans outstanding in relation to the Group’s key management personnel are
outlined below:

Issuing Entity

Personnel

Number
of shares
under
option

Class of
shares

Exercise
price of
option

Expiry date
of options

Medical Developments International Ltd B. MacGregor

1,968,704

Ordinary

$0.00

No expiry

Medical Developments International Ltd

M. Edwards

100,000

Ordinary

$0.01

No expiry

No options vested, lapsed, were forfeited or exercised during the year.

Fair value of share options granted
during the year
The only grant of options to Key Management
Personnel in the current year was the grant
of options to the incoming CEO as outlined
above. The fair value of the related options
was measured at grant date using a Monte
Carlo Simulation Model that factors in the
vesting triggers that include both stock price
and other factors (i.e. service tenure).

The prior year grant of options contained
non-market performance hurdles. The fair
value of the related options was measured
at grant date using a ‘Black-Scholes’ Option
Pricing Model. Expected volatility was based
on the historical share price volatility over the
past 2 years prior to grant date. For valuation
purposes a probability of 75% has been
applied to the likelihood of achieving FDA
approval for Penthrox® in the USA.

Inputs into the option pricing models were
as follows:

CEO

CFO

Grant date

1-Nov-20

7-Sep-18

Grant date share price

Exercise price

$5.32

$0.00

Option Fair Value

$4.47-$4.52

Expected volatility

52%

$3.90

$0.01

$3.69

45%

Expected option life

9 years

5 years

Dividend (Bi-annually)

Risk-free interest rate

Nil

0.50%

2.17%

Option Valuation Model

Monte Carlo Black Scholes

Contracts for services
Mr MacGregor is employed under an open-
ended contract with a notice period of
6 months. The contract provides for a
termination payment of up to 12 months’ salary
if termination occurs without proper cause.

Mr Edwards is employed under an open-ended
contract with a notice period of four weeks.

Annual Financial Report 2021

The contract does not provide for any termination payments beyond payment for the notice
period and any accrued employee benefit entitlements.

Non-audit services
The directors are satisfied that the provision of non-audit services, during the year, by the auditor
(or by another person or firm on the auditor’s behalf) is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The non-audit services related
to the provision of taxation services ($28,000). The directors do not believe that the nature of
these services compromises the general principles relating to auditor’s independence, as set out
by the Chartered Accountants Australia and New Zealand.

Details of amounts paid or payable to the auditor for non-audit services provided during the year
by the auditor are outlined in note 7 to the financial statements.

Corporate Governance Statement
A copy of the Company’s Corporate Governance statement can be found at
www.medicaldev.com/investors-media

Auditor’s independence declaration
The auditor’s independence declaration is included on page 33 of the annual report.

Rounding off of amounts
The Company is a Company of the kind referred to in ASIC Corporations (rounding in Financial/
Director’s Reports) Instrument 2016/191 dated 24 March 2016, and in accordance with that
Corporations Instrument, amounts in the directors’ report and the financial statements are
rounded off to the nearest thousand dollars, unless otherwise indicated.

Signed in accordance with a resolution of the directors made pursuant to s.298(2) of the
Corporations Act 2001.

On behalf of the directors.

Gordon Naylor
Company Chair
Melbourne, 25 August 2021

Medical Developments International Limited33

Annual Financial Report 202134

Medical Developments International Limited35

Annual Financial Report 202136

Medical Developments International Limited37

Annual Financial Report 202138

Medical Developments International LimitedDirectors’ Declaration

The directors declare that:

a. 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;

b. in the directors’ opinion, the attached financial statements and notes thereto are in accordance
with the Corporations Act 2001, including compliance with accounting standards and giving a
true and fair view of the financial position and performance of the consolidated entity;

c. the attached financial statements are in compliance with International Financial Reporting

Standards, as stated in note 1 of the financial statements; and

d. the directors have been given the declarations required by s.295A of the Corporations Act

2001.

Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the
Corporations Act 2001.

On behalf of the directors.

Gordon Naylor
Company Chair
Melbourne, 25 August 2021

Annual Financial Report 2021Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the Financial Year Ended
30 June 2021

Gross revenue from sale of goods and contracts

Less discounts and claims

Note

2021
$’000

2020
$’000

25,672

23,640

(400)

(1,105)

Net revenue from sale of goods and contracts

4(a)

25,272

22,535

Cost of sales

Gross profit

Other income

Distribution expenses

Marketing expenses

Occupancy expenses

Administration expenses

Regulatory expenses

Impairment charges

Finance expenses

Other expenses

Profit/(loss) before income tax expense

Income tax benefit/(expense)

Profit/(loss) for the year

Other Comprehensive Income

(6,173)

(7,543)

19,099

14,992

4(a)

336

(1,573)

(3,177)

(1,256)

(13,974)

(1,299)

(4,083)

(1,266)

(4,321)

(4,354)

(2,342)

4(b)

(8,956)

(121)

(738)

(14,978)

5(a)

2,413

(12,565)

(114)

(1,582)

321

379

(42)

337

Items that may be reclassified subsequently to profit or loss, net of income tax

Exchange differences on translating foreign operations

Total comprehensive income/(loss) for the year

(12,550)

Profit/(loss) for the year attributable to:

Owners of the parent

Total comprehensive income/(loss) for the year attributable to:

Owners of the parent

Earnings/(loss) per share:

Basic (cents per share)

Diluted (cents per share)

(12,565)

379

(12,550)

337

(18.35)

0.58

Notes to the financial statements are included on pages 45-75

Medical Developments International LimitedConsolidated Statement of Financial Position as at
30 June 2021

Note

30 June 2021
$’000

30 June 2020
$’000

30(a)

36,277

Current Assets

Cash and cash equivalents

Trade and other receivables

Inventories

Current tax receivable

Other

Total Current Assets

Non-Current Assets

Property, plant and equipment

Deferred tax assets

Goodwill

Other intangible assets

Total Non-Current Assets

Total Assets

Current Liabilities

Trade and other payables

Borrowings

Provisions

Other

Lease liability

Total Current Liabilities

Non-Current Liabilities

Provisions

Other

Lease liability

Total Non-Current Liabilities

Total Liabilities

Net Assets

Equity

Issued capital

Reserves

Retained earnings/(losses)

Total Equity

Notes to the financial statements are included on pages 45-75

5(c)

5(d)

2,648

5,728

2,337

397

15,544

4,082

5,882

416

47,387

25,957

11,704

2,237

4,389

34,458

52,788

100,175

6,002

553

337

6,960

294

21,907

2,712

24,913

31,873

68,302

76,895

3,545

(12,138)

68,302

11,781

2,106

9,095

35,820

58,802

84,759

5,001

401

2,394

326

8,213

269

30,000

2,939

33,208

41,421

43,338

40,954

1,957

427

43,338

Annual Financial Report 2021Consolidated Statement of Changes in Equity

2021

Opening balance

Profit for the year

Other comprehensive income for
the year, net of income tax

Total comprehensive income for
the year

Share based payments

Shares issued - placement

Shares issued - share purchase plan

Options issued as part of CSIRO
agreement

Equity raising costs

Closing balance

2020

Opening balance

Profit for the year

Other comprehensive income for
the year, net of income tax

Total comprehensive income for
the year

Share based payments

Dividends paid

Options issues as part of CSIRO
agreement

Dividends reinvested in the form of
shares

Equity raising costs

Closing balance

Issued
capital
$’000

Retained
earnings
$’000

Employee
equity
settled
benefits
reserve
$’000

CSIRO
option
reserve
$’000

Foreign
currency
translation
reserve
$’000

Total
$’000

40,954

427

802

1,200

(45)

43,338

24,900

11,768

(727)

(12,565)

1,167

406

(12,565)

(12,550)

1,167

24,900

11,768

406

(727)

76,895

(12,138)

1,969

1,606

(30)

68,302

Issued
capital
$’000

Retained
earnings
$’000

Employee
equity
settled
benefits
reserve
$’000

CSIRO
option
reserve
$’000

Foreign
currency
translation
reserve
$’000

Total
$’000

40,410

2,670

711

800

(3)

44,588

557

(13)

379

(2,622)

400

379

(42)

337

(2,622)

400

557

(13)

40,954

427

802

1,200

(45)

43,338

Notes to the financial statements are included on pages 45-75

Medical Developments International Limited2020
$’000

22,822

(20,896)

158

200

(119)

(20)

(1,973)

172

429

(1,492)

(7,409)

(8,472)

Consolidated Statement of Cash Flows for the Financial
Year Ended 30 June 2021

Cash flows from operating activities

Receipts from customers

Payments to suppliers and employees

Receipts from government grants

Upfront and milestone payments received

Interest paid - lease

Interest paid

Income tax received/(paid)

Note

2021
$’000

15,937

(24,775)

(66)

(9)

(21)

Net cash generated by/(used in) operating activities

30(b)

(8,890)

Cash flows from investing activities

Interest received

Payments for plant and equipment

Payments for other intangible assets

Net cash used in investing activities

Cash flows from financing activities

Dividends paid (net of DRP)

Proceeds from the issue of shares/options

Share issue transaction costs

Repayment of lease liability

Repayment of borrowings

Net cash generated by/(used in) financing activities

Net decrease in cash and cash equivalents

(1,247)

(5,313)

(6,478)

(2,065)

37,074

(727)

(141)

(91)

36,115

20,747

400

(13)

(197)

(91)

(1,966)

(10,266)

Cash and cash equivalents at the beginning of the financial year

15,544

25,620

Effects of exchange rate changes on the balance of cash held
in foreign currencies

(14)

190

Cash and cash equivalents at the end of the financial year

30(a)

36,277

15,544

Notes to the financial statements are included on pages 45-75

Annual Financial Report 2021Innovative solutions for being

there when it happens

Notes to
the Financial
Statements

For the financial year
ended 30 June 2021

there when it happens

1. Significant
accounting policies

Statement of compliance
These financial statements are general purpose
financial statements which have been prepared
in accordance with the Corporations Act 2001,
Accounting Standards and other authoritative
pronouncements issued by the Australian
Accounting Standards Board (AASB), and
comply with other requirements of the law.

The financial statements comprise the
consolidated financial statements of the
company and the entities it controlled
for the financial year ended 30 June 2021
(“Group”). For the purposes of preparing the
consolidated financial statements, the Group is
a for-profit entity.

Compliance with Australian Accounting
Standards ensures that the financial
statements and notes of the Group comply
with International Financial Reporting
Standards (‘IFRS’) as issued by the
International Accounting Standards Board
(IASB). Consequently, this financial report
has been prepared in accordance with and
complies with IFRS as issued by the IASB.

Basis of preparation
The consolidated financial statements have
been prepared on the basis of historical
cost, as explained in the accounting policies
below. Historical cost is generally based on
the fair values of the consideration given in
exchange for goods and services. All amounts
are presented in Australian dollars, unless
otherwise noted.

Fair value is 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,
regardless of whether that price is directly
observable or estimated using another
valuation technique. In estimating the fair
value of an asset or a liability, the Group takes
into account the characteristics of the asset or
liability if market participants would take those
characteristics into account when pricing the
asset or liability at the measurement date.
Fair value for measurement and/or disclosure
purposes in these consolidated financial
statements is determined on such a basis,

except for share-based payment transactions
that are within the scope of AASB 2, leasing
transactions that are within the scope of
AASB 16, and measurements that have some
similarities to fair value but are not fair value,
such as net realisable value in AASB 102 or
value in use in AASB 136.

In addition, for financial reporting purposes,
fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which
the inputs to the fair value measurements are
observable and the significance of the inputs
to the fair value measurement in its entirety,
which are described as follows:

• Level 1 inputs are quoted prices (unadjusted)

in active markets for identical assets or
liabilities that the entity can access at the
measurement date;

• Level 2 inputs are inputs, other than quoted

prices included within Level 1, that are
observable for the asset or liability, either
directly or indirectly; and

• Level 3 inputs are unobservable inputs for

the asset or liability.

The Company is a Company of the kind
referred to in ASIC Corporations (rounding
in Financial/Director’s Reports) Instrument
2016/191 dated 24 March 2016, and in
accordance with that Corporations Instrument,
amounts in the financial statements are
rounded off to the nearest thousand dollars,
unless otherwise indicated.

Basis of consolidation
The consolidated financial statements
incorporate the financial statements of the
Company and entities (including special
purpose entities) controlled by the Company
(its subsidiaries). Control is achieved where
the Company has the power to govern the
financial and operating policies of an entity so
as to obtain benefits from its activities.

Income and expense of subsidiaries acquired
or disposed of during the year are included
in the consolidated statement of profit or
loss and other comprehensive income from
the effective date of acquisition and up to
the effective date of disposal, as appropriate.
Total comprehensive income of subsidiaries is
attributed to the owners of the Company and
to the non-controlling interests even if this
results in the non-controlling interests having a
deficit balance.

Medical Developments International LimitedWhere necessary, adjustments are made to the
financial statements of subsidiaries to bring
their accounting policies into line with those
used by other members of the Group.

All intra-group transactions, balances,
income and expenses are eliminated in full on
consolidation.

Changes in the Group’s ownership interests
in subsidiaries that do not result in the Group
losing control are accounted for as equity
transactions. The carrying amounts of the
Group’s interests and the non-controlling
interests are adjusted to reflect the changes in
their relative interests in the subsidiaries. Any
difference between the amount by which the
non-controlling interests are adjusted and the
fair value of the consideration paid or received
is recognised directly in equity and attributed
to owners of the Company.

Significant accounting
policies
The following significant accounting policies
have been adopted in the preparation and
presentation of the financial report:

(a) Borrowings
Borrowings are recorded initially at fair value,
net of transaction costs.

Subsequent to initial recognition, borrowings
are measured at amortised cost with any
difference between the initial recognised
amount and the redemption value being
recognised in profit and loss over the period of
the borrowing using the effective interest rate
method.

(b) Cash and cash equivalents
Cash and cash equivalents comprise cash on
hand, cash in banks and investments in money
market instruments, net of outstanding bank
overdrafts.

(c) Employee benefits
A liability is recognised for benefits accruing
to employees in respect of wages and salaries,
annual leave and long service leave when it is
probable that settlement will be required and
they are capable of being measured reliably.

Liabilities recognised in respect of wages
and salaries and annual leave expected to be
settled within 12 months, are measured at their

nominal values using the remuneration rate
expected to apply at the time of settlement.

Liabilities recognised in respect of annual leave
and long service leave which are not expected
to be settled within 12 months are measured
using an estimate of the present value of
the future cash outflows to be made by the
company in respect of services provided by
employees up to reporting date.

(d) Financial assets

Trade and other receivables
Trade and other receivables are recognised
initially at fair value and are subsequently
measured at amortised cost using the effective
interest method, less a loss allowance.

Impairment of trade and other
receivables
The Group assesses the expected credit losses
associated with its trade and other receivables
on a forward-looking basis. The Group applies
the simplified approach to measuring expected
credit losses, which requires expected lifetime
losses to be recognised from initial recognition
of the receivables. To measure the expected
credit losses, trade and other receivables that
share similar credit risk characteristics and
days past due are grouped and then assessed
for collectability as a whole.

The Group continues to assess the risk of
non-recoverability or expected credit loss
on its receivables to be very low. Trade
receivables are typically collected within a
30-90-day period and despite the occasional
debtor being slow paying, empirical evidence
suggests there has been a very low level of
credit losses in previous years. There has been
no observed increase in credit risk to date
associated with COVID-19.

(e) Financial instruments issued by the
company

Debt and equity instruments
Instruments issued are classified as either debt
or as equity in accordance with the substance
of the contractual arrangement.

Transaction costs on the issue of equity
instruments
Transaction costs arising on the issue of equity
instruments are recognised directly in equity
as a reduction of the proceeds of the equity
instruments to which they relate. Transaction

Annual Financial Report 2021costs are the costs that are incurred directly
in connection with the issue of those equity
instruments and would not have been incurred
had those instruments not been issued.

(g) Goods and services tax
Revenues, expenses and assets are recognised
net of the amount of goods and services tax
(GST), except:

Interest and dividends
Interest and dividends are classified as
expenses or as distributions of profit
consistent with the balance sheet classification
of the related debt or equity instruments or
component parts of compound instruments.

(f) Foreign currency
The individual financial statements of each
Group entity are presented in the currency of
the primary economic environment in which
the entity operates (its functional currency).
For the purpose of the consolidated financial
statements, the results and financial position of
each Group entity are expressed in Australian
dollars (‘$’), which is the functional currency
of the Company and the presentation currency
for the consolidated financial statements.

In preparing the financial statements of
each individual Group entity, transactions in
currencies other than the entity’s functional
currency (foreign currencies) are recognised at
the rates of exchange prevailing at the dates of
the transactions. At the end of each reporting
period, monetary items denominated in
foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items
that are measured in terms of historical cost in
a foreign currency are not retranslated.

Exchange differences on monetary items are
recognised in profit or loss in the period in
which they arise.

For the purpose of presenting consolidated
financial statements, the assets and
liabilities of the Group’s foreign operations
are translated into Australian dollars using
exchange rates prevailing at the end of the
reporting period. Income and expense items
are translated at the average exchange
rates for the period, unless exchange rates
fluctuated significantly during that period,
in which case the exchange rates at the
dates of the transactions are used. Exchange
differences arising, if any, are recognised in
other comprehensive income and accumulated
in equity (attributed to non-controlling
interests as appropriate).

• where the amount of GST incurred is not

recoverable from the taxation authority, it is
recognised as part of the cost of acquisition
of an asset or as part of an item of expense;
or

• for receivables and payables which are

recognised inclusive of GST.

The net amount of GST recoverable from, or
payable to, the taxation authority is included
as part of receivables or payables.

Cash flows are included in the Consolidated
Statement of Cash Flows on a gross basis. The
GST component of cash flows arising from
investing and financing activities which is
recoverable from, or payable to, the taxation
authority is classified as operating cash flows.

(h) Goodwill
Goodwill, representing the excess of the
cost of acquisition over the fair value of the
identifiable net assets acquired, is recognised
as an asset and not amortised but tested for
impairment annually and whenever there is an
indication that the goodwill may be impaired.
Any impairment is recognised immediately in
the Consolidated Statement of Profit or Loss
and Other Comprehensive Income and is not
subsequently reversed. Refer also to note 1(j).

(i) Government grants
Government grants are assistance by the
government in the form of transfers of
resources to the company in return for past
or future compliance with certain conditions
relating to the operating activities of the
company. Government grants include
government assistance where there are no
conditions specifically relating to the operating
activities of the company other than the
requirement to operate in certain regions or
industry sectors.

Government grants relating to income are
recognised as income over the periods
necessary to match them with the related
costs. Government grants that are receivable
as compensation for expenses or losses
already incurred or for the purpose of giving
immediate financial support to the company

Medical Developments International Limitedwith no future related costs are recognised
as income of the period in which it becomes
receivable. Wage subsidies such as JobKeeper
have been recognised as an offset against the
Employee Benefits expense to which it relates.

Government grants relating to assets are
treated as deferred income and recognised in
the profit and loss over the expected useful
lives of the assets concerned.

(j) Impairment of assets
At each reporting date, the company reviews
the carrying amounts of its tangible and
intangible assets to determine whether there is
any indication that those assets have suffered
an impairment loss. If any such indication
exists, the recoverable amount of the asset
is estimated in order to determine the extent
of the impairment loss (if any). Where the
asset does not generate cash flows that are
independent from other assets, the company
estimates the recoverable amount of the cash
generating unit to which the asset belongs.

Goodwill, intangible assets with indefinite
useful lives and intangible assets not yet
available for use are tested for impairment
annually and whenever there is an indication
that the asset may be impaired. An impairment
of goodwill is not subsequently reversed.
Recoverable amount is the higher of fair value
less costs to sell and value in use. In assessing
value in use, the estimated future cash flows
are discounted to their present value using
a post-tax discount rate that reflects current
market assessments of the time value of
money and the risks specific to the asset for
which the estimates of future cash flows have
not been adjusted.

If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than
its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced
to its recoverable amount. An impairment loss
is recognised in the Consolidated Statement
of Profit or Loss and Other Comprehensive
Income immediately.

Where an impairment loss (other than
Goodwill) subsequently reverses, the carrying
amount of the asset (or cash generating unit)
is increased to the revised estimate of its
recoverable amount, but only to the extent
that the increased carrying amount does not
exceed the carrying amount that would have

been determined had no impairment loss been
recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment
loss is recognised in profit or loss immediately.

(k) Income tax

Current tax
Current tax is calculated by reference to
the amount of income taxes payable or
recoverable in respect of the taxable profit or
loss for the period. It is calculated using tax
rates and tax laws that have been enacted
or substantively enacted by reporting date.
Current tax for current and prior periods is
recognised as a liability (or asset) to the extent
that it is unpaid (or refundable).

Where the Group qualifies for the research
and development tax incentive refund (at
38.5%), this reduces the current tax expense
recognised in profit and loss for the period.

Deferred tax
Deferred tax is accounted for using the
comprehensive balance sheet liability method
in respect of temporary differences arising
from differences between the carrying
amount of assets and liabilities in the financial
statements and the corresponding tax base of
those items.

In principle, deferred tax liabilities are
recognised for all taxable temporary
differences. Deferred tax assets are recognised
to the extent that it is probable that sufficient
taxable amounts will be available against
which deductible temporary differences or
unused tax losses and tax offsets can be
utilised. However, deferred tax assets and
liabilities are not recognised if the temporary
differences giving rise to them arise from the
initial recognition of assets and liabilities (other
than as a result of a business combination)
which affects neither taxable income nor
accounting profit. Furthermore, a deferred tax
liability is not recognised in relation to taxable
temporary differences arising from goodwill.

Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply
to the period(s) when the asset and liability
giving rise to them are realised or settled,
based on tax rates (and tax laws) that have
been enacted or substantively enacted by
reporting date. The measurement of deferred
tax liabilities and assets reflects the tax

Annual Financial Report 2021consequences that would follow from the
manner in which the company expects, at
the reporting date, to recover or settle the
carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset
when they relate to income taxes levied by
the same taxation authority and the company
intends to settle its current tax assets and
liabilities on a net basis.

Current and deferred tax for the period
Current and deferred tax is recognised as
an expense or income in the Consolidated
Statement of Profit or Loss and Other
Comprehensive Income, except when it relates
to items credited or debited directly to equity, in
which case the deferred tax is also recognised
directly in equity, or where it arises from the
initial accounting for a business combination,
in which case it is taken into account in the
determination of goodwill or excess.

(l) Intangible assets

Patents, trademarks and licenses
Patents, trademarks and licenses are recorded
at cost less accumulated amortisation and
impairment. Amortisation is charged on a
straight-line basis over their estimated useful
lives of 10 years. The estimated useful life and
amortisation method is reviewed at the end
of each annual reporting period. The carrying
value of patents, trademarks and licenses is
reviewed at each reporting date for indicators
of impairment. Any impairment loss is
recognised as an expense in the Consolidated
Statement of Profit or Loss and Other
Comprehensive Income.

Research and development costs
Expenditure on research activities is
recognised as an expense in the period in
which it is incurred. Where no internally-
generated intangible asset can be recognised,
development expenditure is recognised as an
expense in the period as incurred.

An intangible asset arising from development
(or from the development phase of an internal
project) is recognised if, and only if, all of the
following are demonstrated:

• the technical feasibility of completing the
intangible asset so that it will be available
for use or sale;

• the intention to complete the intangible

asset and use or sell it;

• the ability to use or sell the intangible asset;

• how the intangible asset will generate
probable future economic benefits;

• the availability of adequate technical,

financial and other resources to complete
the development and to use or sell the
intangible asset; and

• the ability to measure reliably the

expenditure attributable to the intangible
asset during its development.

Internally-generated intangible assets in
respect of development costs are stated
at cost less accumulated amortisation and
impairment and are amortised on a straight-
line basis over their estimated useful life of
5-10 years commencing from the date that
revenue results.

The carrying value of internally-generated
intangible assets is reviewed at each reporting
date for indicators of impairment. Any
impairment loss is recognised as an expense in
the Consolidated Statement of Profit or Loss
and Other Comprehensive Income.

Registration costs
Items of expenditure on registrations are
capitalised to the extent that such costs can
be measured reliably, future economic benefits
are attributable to the expenditure, and it is
probable that such future economic benefits
will eventuate.

Any capitalised registration costs are
amortised over a period of 5 - 10 years in
which the corresponding benefits are expected
to arise, commencing from commercial sales to
any of the countries for which the registration
costs contributed to a successful registration.

The carrying value of registration costs is
reviewed at each reporting date for indicators
of impairment. Any impairment loss is
recognised as an expense in the Consolidated
Statement of Profit or Loss and Other
Comprehensive Income.

Brandnames
Brandnames arising on acquisition of a
business are carried at cost as established at
the date of acquisition of the business less any
applicable impairment charge (if any). They are
not amortised but subject to annual tests for
impairment. For the purposes of impairment

Medical Developments International Limitedtesting, brandnames are allocated to the
relevant cash generating unit to which they
relate. Any impairment loss is recognised as an
expense in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income.

(m) Inventories
Inventories are valued at the lower of cost
and net realisable value. Costs, including an
appropriate portion of fixed and variable
overhead expenses, are assigned to inventory
on hand by the method most appropriate
to each particular class of inventory (all
being valued on a first in first out basis). Net
realisable value represents the estimated
selling price less all estimated costs of
completion and costs to be incurred in
marketing, selling and distribution.

(n) Leases
The Group recognises a right-of-use asset and
corresponding lease liability with respect to
all lease agreements in which it is the lessee,
except for short-term leases and leases of low
value assets. Payments associated with short-
term leases and leases of low-value assets
are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are
leases with a lease term of 12 months or less.

Lease liabilities
Lease liabilities are initially measured at the
present value of the lease payments that
are not paid at the commencement date,
discounted by using the rate implicit in the
lease. If this rate cannot be readily determined,
the Group uses its incremental borrowing rate.

The Group’s weighted average incremental
borrowing rate used during the year ended 30
June 2021 was 3.55% (2020: 3.55%).

Each lease payment is allocated between the
lease liability and finance costs. The finance
cost is charged to profit or loss over the period
of the lease to produce a constant periodic
rate of interest on the remaining balance of the
liability for each period.

The carrying amount of a lease liability is
remeasured if there is a modification, a
change in the lease term, a change in the lease
payments (e.g. inflation-linked payments or
market rate rent reviews). A corresponding
adjustment is made to the right of use asset.

Right-of-use assets
Right-of-use assets are measured at cost
comprising the following:

• the amount of the initial measurement of

lease liability;

• any lease payments made at or before
the commencement date less any lease
incentives;

• any initial direct costs; and

• estimated restoration costs.

Right-of-use assets are subsequently
measured at cost less accumulated
depreciation and impairment losses, with
depreciation recognised on a straight-line
basis over the shorter of the asset’s useful
life and the lease term. The Group applies
AASB 136 Impairment of Assets to determine
whether a right-of-use asset is impaired.

(o) Financial liabilities
Trade and other payables are classified as
financial liabilities and are recognised when
the company becomes obliged to make
future payments resulting from the purchase
of goods and services. Financial liabilities
are initially measured at fair value, net of
transaction costs.

Financial liabilities are subsequently measured
at amortised cost using the effective interest
rate method, with interest expense recognised
on an effective yield basis.

The effective interest rate method is a
method of calculating the amortised cost of
a financial liability and of allocating interest
expense over the relevant period. The effective
interest rate is the rate that exactly discounts
estimated future cash payments through the
expected life of the financial liability, or where
appropriate, a shorter period.

(p) Plant and equipment
Plant and equipment and leasehold
improvements are stated at cost less
accumulated depreciation and impairment.
Cost includes expenditure that is directly
attributable to the acquisition of the item.

Depreciation
Depreciation is provided on plant and
equipment and is calculated on a straight-line
basis so as to write off the cost of each asset
over its expected useful life to its estimated

Annual Financial Report 2021Upfront and milestone income
Revenue from upfront and milestone payments
is recognised as deferred revenue (revenue
received in advance) and amortised to profit
or loss over the underlying contract term. As
the performance obligation represents the
provision of a time-based right for the Groups’
partners to exclusively sell product in a specific
market, the consumption of the right and
benefit occurs evenly over the contract period.

Interest income
Interest income is recognised on a time
proportionate basis that takes into account the
effective yield on the financial asset.

(s) Share based payments
Equity-settled share-based payments granted
are measured at fair value at the date of grant.

The fair value determined at the grant date
of the equity-settled share-based payments
is expensed on a straight-line basis over
the vesting period, based on the company’s
estimate of options that will eventually vest
with a corresponding increase in equity.

At the end of the reporting period, the Group
revises its estimate of the number of equity
instruments expected to vest and the impact
of any revision on the original estimates is also
recognised in the profit and loss.

(t) Research and development recoveries
R&D tax credits receivable as compensation
for expenses or losses already incurred
by the Company with no future related
costs are recognised in profit or loss in the
period in which they are quantified and
become receivable. The company applies
the income tax approach for the accounting
and presentation of the R&D tax credit.
Accordingly, the tax benefit is presented
as a reduction of income tax expense in
the Statement of Profit or Loss and Other
Comprehensive Income.

residual value. Leasehold improvements are
depreciated over the period of the lease or
estimated useful life, whichever is the shorter,
using the straight-line method. The estimated
useful lives, residual values and depreciation
method are reviewed at the end of each annual
reporting period.

The following estimated useful lives are used in
the calculation of depreciation:

Leasehold improvements:

5 - 10 years

Plant & equipment
and Right-Of-Use asset:

4 - 12 years

(q) Provisions
Provisions are recognised when the Group has
a present obligation, the future sacrifice of
economic benefits is probable, and the amount
of the provision can be measured reliably.

The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at reporting date,
taking into account the risks and uncertainties
surrounding the obligation. Where a provision
is measured using the cashflows estimated
to settle the present obligation, its carrying
amount is the present value of those cashflows.

When some or all of the economic benefits
required to settle a provision are expected to
be recovered from a third party, the receivable
is recognised as an asset if it is probable that
recovery will be received and the amount of
the receivable can be measured reliably.

Dividends
A liability is recognised for dividends when
they have been declared, determined or
publicly recommended by the directors on or
before the reporting date.

(r) Revenue recognition

Sale of goods
Revenue from the sale of goods is recognised
when the company has transferred control
of the product to the buyer. The sole
performance obligation relates to the delivery
of the product related to the order with no
after sales service embedded or attached to
the underlying sale. Settlement and volume
discounts granted to customers are accounted
for as offsets against sales.

Medical Developments International Limited(u) Application of new and revised accounting standards
The Group has adopted all new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are relevant to its operations and effective
for the current reporting period, as summarised below:

• AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business.

• AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material.

• AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual

Framework.

• AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark

Reform.

• AASB 2020-4 Amendments to Australian Accounting Standards – COVID-19-Related Rent

Concessions.

The adoption of these new and revised Standards and Interpretations did not impact the
disclosures or amounts recognised in the Group’s consolidated financial statements.

Standards and interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Group has not applied the following
new and revised Australian Accounts Standards, Interpretations and amendments that have been
issued but are not yet effective:

Standard/Amendment/Interpretation

AASB 2020-8 Amendments to Australian Accounting
Standards – Interest Rate Benchmark Reform – Phase 2

AASB 2020-1 Amendments to Australian Accounting
Standards – Classification of Liabilities as Current or
Non-Current

AASB 2020-3 Amendments to Australian Accounting
Standards – Annual Improvements 2018-20 and
Other Amendments

AASB 2021-2 Amendments to Australian Accounts
Standards – Disclosure of Accounting Policies and Definition
of Accounting Estimates

Deferred Tax related to Assets and Liabilities arising
from a Single Transaction – Amendments to IAS 12

Effective for annual
reporting periods
beginning on or after

Expected to be initially
applied in the financial
year ending

1 June 2021

30 June 2022

1 January 2022

30 June 2023

1 January 2022

30 June 2023

1 January 2023

30 June 2024

1 January 2023

30 June 2024

The adoption of the above Accounting
Standards and Interpretations is not expected
to impact the disclosures or amounts
recognised in the Group’s consolidated
financial statements.

2. Critical accounting
judgements and key
sources of estimation
uncertainty

the carrying amounts of assets and liabilities
within the next financial year:

Impairment of goodwill
Determining whether goodwill is impaired
requires an estimation of the recoverable
amount of the cash-generating units to which
goodwill has been allocated. The recoverable
amount calculation requires the entity to
estimate the future cash flows expected to
arise from the cash generating unit and a
suitable discount rate in order to calculate the
present value of those cash flows.

The following are the key assumptions
concerning the future, and other key sources
of estimation uncertainty at the balance date,
that could cause a material adjustment to

As the global outbreak of COVID-19 continues
to progress and evolve, it is extremely
challenging to predict the full extent and
duration of its impact on the Group’s

Annual Financial Report 2021
the European Union, following the Group’s
decision to terminate its distribution
arrangement with Mundipharma in Europe.

Whilst the Group’s manufacturing operations
have been largely unaffected by COVID-19
related lockdown restrictions (as they are
considered an ‘essential service’), its trading
performance has been impacted as a result of
the effect that movement restrictions have had
on the demand for Penthrox® and the Group’s
Medical Device products, which ultimately
contributed to the Group’s decision to impair
the goodwill related to its Medical Devices
business. The Group is confident that demand
for its products, in particular Penthrox®, will
rebound as movement restrictions are eased
and market conditions stabilise in the short to
medium term.

The Group generated net cash inflows for the
year of $20.747m, comprising:

• Operating cash outflows of $8.890m

(principally arising due to the establishment
of operations within the European Union
and the effects of COVID-19 restrictions on
trading performance);

• Investing cash outflows of $6.478m
(principally arising from continued
investment in registration costs for the
US, China and other jurisdictions as well
as continued investment in plant and
equipment); offset by

• Financing activities, which generated a net
cash inflow of $36.115m (principally arising
from capital raising activities completed in
December 2020 and January 2021).

The directors are satisfied that the Group’s
cash position and strong net current asset
position as at 30 June 2021 will enable the
Group to pay its debts as and when they fall
due for a period of no less than 12 months
from the date these financial statements
were approved by the directors. This includes
investment activities forecast to occur during
the course of the 2022 financial year to fund
the establishment of the Group’s operations
within the European Union and continued
pursuit of regulatory approval in the US and
China markets for Penthrox®.

business activities. The Group believes that
the assumptions adopted in the recoverable
amount calculations reflect an appropriate
balance between the Group’s experience to
date, the uncertainty associated with the
ongoing impacts of COVID-19 and the long-
term growth expectations of its respective
businesses.

The carrying amount of goodwill at the
balance sheet date was $4,389,000 (2020:
$9,095,000). Further details are provided in
note 13.

Impairment of intangible
assets not yet available
for use
The Group has material capitalised registration
costs in relation to obtaining registration
of Penthrox® in a number of jurisdictions
(primarily the USA and China). Management
tests these costs for impairment annually or
where an impairment indicator is identified.
The recoverability of these costs is ultimately
contingent upon achieving registration in these
jurisdictions.

Deferred tax assets
The carrying amount of deferred tax assets
are reviewed at the end of each reporting
period and reduced to the extent that it is
no longer probable that sufficient taxable
profits will eventuate to enable recovery of the
asset. Based on the Group’s latest forecasts,
it expects to generate future taxable income,
sufficient to recover the carrying value of its
deferred tax asset.

Going concern
The FY21 Financial statements have been
prepared on a going concern basis.

As at 30 June 2021, the Group has significant
cash holdings of $36.277m and undrawn
overdraft facilities of $0.2m as set out in note
30(c). The Group has net current assets of
$39.849m and net assets of $68.302m.

The Group incurred a loss for the year
$12.565m, including non-cash impairment
charges of $8.956m (pre-tax) as set out in
note 4(b) and $9.495m related to investment
in the establishment of operations within

Medical Developments International Limited3. Segment
information

Products and services within
each business segment
The company is organised into three business
units – Pharmaceuticals, Medical Devices and
Veterinary products. The operating results for
these business units are regularly reviewed by
the Chief Executive Officer and the Board of
Directors to assess their performance and make
decisions about the allocation of resources.

The principal products and services of each of
these business units are as follows:

• Pharmaceuticals – the sale of Penthrox®
primarily within Australia, New Zealand,
Europe the UK and some sales in the Middle
East, Asia and South Africa.

• Medical Devices – the sale of medical devices,
particularly the Space Chamber and Breath-
Alert Peak-Flow meters, primarily within
Australia, UK/Europe and North America,
with some sales in Asia and New Zealand.

• Veterinary Products – the sale of veterinary
products within Australia, Europe, and Asia.

No operating segments have been aggregated
in arriving at the reportable segments of the
group.

There have also been no sales between
reportable segments.

Segment revenues and results

Pharmaceuticals

Medical
Equipment

Veterinary
Equipment

Unallocated

Total

2021
$’000

2020
$’000

2021
$’000

2020
$’000

2021
$’000

2020
$’000

2021
$’000

2020
$’000

2021
$’000

2020
$’000

Revenues:

External revenue (gross)

19,536

13,138

5,756

10,151

380

351

Sales discounts and claims

(400)

(1,105)

Total external revenue (net)

19,536

13,138

5,356

9,046

380

351

Results:

Segment results

1,883

4,007

1,446

170

117

25,672

23,640

(400)

(1,105)

25,272

22,535

2,110

5,570

(4,333)

(2,875)

(4,333)

(2,875)

Unallocated

Profit before interest,
income tax depreciation
& amortisation

1,883

4,007

1,446

170

117

(4,333)

(2,875)

(2,223)

2,695

Depreciation & Amortisation

(3,159)

(2,132)

(215)

(201)

(26)

(24)

(349)

(240)

(3,749)

(2,597)

Impairment charges

(4,250)

(4,706)

(8,956)

Profit before interest and tax

(5,526)

1,875

(4,864)

1,245

144

(4,682)

(3,115)

(14,928)

Net Interest
income/(expense)

Profit before income tax
expense

Income tax credit/(expense)

Net profit/(loss) for the year

Assets and Liabilities

Assets

Liabilities

Other Segment Information

Acquisition of segment
assets

(50)

223

(50)

223

(4,732)

(2,892)

(14,978)

321

2,413

(2,319)

(2,834)

(12,565)

379

51,193

52,856

5,688

11,480

962

977

42,332

19,446

100,175

84,759

31,873

41,421

31,873

41,421

6,272

8,378

183

338

153

6,560

8,902

Annual Financial Report 2021The accounting policies of the reportable
segments are the same as the Group’s
accounting policies described in note 1.

Profit before interest, income tax, depreciation,
amortisation and impairment losses is the
measure of profit reported to the Chief
Executive Officer and Board of Directors
for the purposes of resource allocation and
assessment of segment performance.

Unallocated assets primarily include cash
reserves, deferred tax assets and prepayments.
Liabilities are not disclosed per segment as it is
not possible to track these on a segment basis.

Geographical information
The Group operates in two principal
geographical areas: Australia (country of
domicile); and “International” comprising
predominately Europe, North America, Middle
East, Asia and South Africa.

The Group’s revenue from continuing
operations from external customers and
information about its non-current assets by
location of assets are detailed below:

Geographical Information

Australia

International

Revenue
from
external
customers 2021

$’000

8,511

17,161

25,672

Revenue
from
external
customers 2020

33.2%

66.8%

100.0%

$’000

12,109

11,531

23,640

The Group’s non-current assets by location are detailed below:

Non-Current Segment Assets

Leasehold improvements at cost

Plant and equipment at cost

Goodwill at gross carrying amount

Other intangible assets at cost

Deferred tax asset

Australia
$’000

Overseas
$’000

209

10,977

4,389

34,458

2,051

52,084

518

186

704

51.2%

48.8%

100.0%

Total
$’000

209

11,495

4,389

34,458

2,237

52,788

Information about major customers
The Group had no individual customers who contributed 10% or more to the Group’s total 2021
sales revenue (2020: $7.985m Mundipharma Australia).

Medical Developments International Limited4. Items included in profit and loss

(a) Revenue and other income

Gross revenue from sale of goods - at point in time

Sales discounts and claims

Upfront and milestone income - over time

Total revenue (net)

Interest income - bank deposits

(b) Expense items included in profit and loss

Profit before income tax has been arrived at after charging the following expenses:

Depreciation of non-current assets

Amortisation of non-current assets

Research & development costs

Penthrox® EU transition costs

Impairment - Medical Devices Goodwill

Impairment - CSIRO Development Project

Share based payments (equity settled)

Gain/(loss) on foreign currency transactions

Finance expenses

Interest on lease liability

Interest on bank loans

Interest on other loans/hire purchase arrangements

Employee benefit expense

Employee benefits

Government subsidies

Superannuation contributions

2021
$’000

15,209

(400)

10,463

25,272

25,343

(1,324)

(2,425)

(536)

(9,495)

(4,706)

(4,250)

(1,167)

(4)

(112)

(9)

(121)

(6,478)

1,484

(737)

(5,731)

2020
$’000

21,175

(1,105)

2,465

22,535

336

22,871

(1,343)

(1,254)

(396)

(91)

192

(119)

(114)

(4,581)

396

(679)

(4,864)

Annual Financial Report 20215. Income taxes

(a) Income tax recognised in profit or loss

Tax expense comprises:

Current tax expense/(benefit)

Deferred tax expense/(benefit) relating to origination and reversal of
temporary differences

Adjustments recognised in the current year in relation to the current tax of
prior year

Deferred tax expense/(credit) relating to change in company tax rate

Total tax expense

2021
$’000

2020
$’000

(453)

(2,040)

(15)

(2,413)

1,924

(1,972)

(10)

(58)

The prima facie income tax expense on pre-tax accounting profit reconciles to the income tax expense in the financial
statements as follows:

Profit from operations

Income tax calculated at 26% (2020: 27.5%)

Research & development benefit

Non deductible expenses

Adjustments recognised in relation to the current tax of prior year

Deferred tax expense relating to change in company tax rate

Effect of different tax rates of subsidiaries operating in other jurisdictions

Income tax expense recognised in the Statement of Profit or Loss and
Other Comprehensive Income

(14,978)

(3,894)

(166)

1,584

(15)

(17)

(2,413)

321

(163)

(10)

(12)

(58)

The tax rate used in the above reconciliation is the corporate tax rate of 26% (2020: 27.5%) payable by Australian
corporate entities on taxable profits under Australian tax law.

(b) Income tax recognised directly in equity

No current and deferred tax amounts have been charged directly to equity during the period (2020: $nil)

Income tax receivable/(payable)

2,337

Non-deductible expenses in FY21 primarily relates to Medical Device segment goodwill impairment charges and also
share based payment expenses.

The group is in a tax loss position in 2021 and intends to apply tax loss roll back provisions announced by the federal
government as part of its 2020 Budget which will enable to the Group to recoup income tax paid in respect to the year
ended 30 June 2019.

(d) Deferred tax asset (current)

Temporary differences

Tax losses

(e) Deferred tax liabilities

Temporary differences

Net Deferred Tax Asset

7,010

4,187

11,197

(8,960)

2,237

10,182

2,016

12,198

(10,091)

2,106

Medical Developments International LimitedTaxable/Deductible temporary differences arise from the following:

2021

Deferred tax assets/(liabilities):

Accrued expenses

Deferred revenue

Lease liability

Lease asset

Other Intangibles

Property, Plant & Equipment

Provisions

Brandnames

2020

Deferred tax assets/(liabilities):

Accrued expenses

Deferred revenue

Lease liability

Lease asset

Other Intangibles

Property, Plant & Equipment

Provisions

Brandnames

Opening
balance
$’000

Charged to
income
$’000

Closing
balance
$’000

150

8,909

898

(770)

(9,084)

(16)

225

(221)

(34)

(3,195)

(105)

112

996

(6)

163

116

5,714

793

(658)

(8,088)

(22)

388

(192)

(2,040)

(1,950)

Opening
balance
$’000

Charged to
income
$’000

Closing
balance
$’000

186

9,335

952

(845)

(36)

(426)

(54)

150

8,909

898

(770)

(7,556)

(1,528)

(9,084)

(10)

221

(221)

2,062

(6)

(1,972)

(16)

225

(221)

6. Key management
personnel compensation

7. Remuneration
of auditors

The aggregate compensation of the key
management personnel of the company and
the Group is set out below:

Short-term employee benefits

Post employment benefits

Long-term employee benefits

2021

2020

1,123

937

(2)

Audit or review of the financial
report

2021

2020

132,000

104,000

Taxation compliance services

28,000

26,300

Other assurance services

160,000

130,300

Share based payments

840

(179)

2,060

831

The auditor of the entity is Deloitte Touche
Tohmatsu.

Annual Financial Report 2021
8. Current receivables

Movement in the allowance for credit losses.

2021
$’000

2020
$’000

Trade receivables

2,839

3,923

Allowance for credit losses

GST recoverable

(294)

103

159

2,648

4,082

The average credit period on sales of goods to
domestic customers is 30 days, international
customers 60 days. No interest is charged on
trade receivables.

Included in the trade receivable balance are
debtors with a carrying amount of $340,000
(2020: $487,300) which are past due at the
reporting date. The Group holds an allowance
for expected credit loss of $294,000 in respect
to aged debtors that are subject to collection
actions. The Group does not hold any collateral
over its trade receivable balances.

Ageing of past due but not impaired.

60 - 90 days

> 90 days

Total

2021
$’000

2020
$’000

294

340

343

387

2021
$’000

2020
$’000

Balance at the beginning of the year

Impaired losses recognised on
receivables

Balance at the end of the year

(294)

9. Current inventories

Raw materials:

At cost

Work in progress:

At cost

Finished goods:

At cost

2021
$’000

2020
$’000

1,258

1,244

1,560

1,430

3,262

3,358

Provision for obsolesence

(352)

(150)

5,728

5,882

The provision for obsolescence at 30 June 2021
represented predominantly obsolete materials.

10. Other current assets

Prepayments

2021
$’000

2020
$’000

397

416

11. Subsidiaries

Details of the Group’s subsidiaries at the end of the reporting period are as follows:

Name of Subsidiary

Principle activity

Place of
incorporation
and operation

Proportion of ownership
interest and voting power held
by the Group

Medical Developments
UK Limited

Distribution of pharmaceutical drug
and medical and veterinary equipment

United
Kingdom

Medical Developments
MD&P Limited

Holder of European Penthrox®
Marketing Authorisation

Ireland

Medical Developments
USA Inc.

Medical Flow
Technologies Pty Ltd

Distribution of medical devices

United States
of America

Non-operating

Australia

2021

100%

2020

100%

Medical Developments
NED B.V.

Operating

Netherlands

100%

N/A

Medical Developments International Limited12. Property, plant, equipment and right of
use asset

Leasehold
improvements
at cost
$’000

Scoresby Right
of Use Asset
$’000

Manufacturing
Facility
$’000

Plant and
equipment
at cost
$’000

Total
$’000

Gross carrying amount

Balance at 30 June 2019

Additions

Balance at 30 June 2020

Additions

Balance at 30 June 2021

Accumulated depreciation

Balance at 30 June 2019

Depreciation expense

Balance at 30 June 2020

Depreciation expense

Balance at 30 June 2021

Net book value

As at 30 June 2020

As at 30 June 2021

13. Goodwill

585

592

145

737

(419)

(60)

(479)

(49)

(528)

113

209

Gross carrying amount

Balance at beginning
of financial year

2021
$’000

2020
$’000

9,095

Additions

Balance at end of financial year

9,095

3,074

4,087

8,449

13,121

1,485

4,566

4,087

9,934

17,687

1,101

1,246

4,087

11,035

18,933

(477)

(3,667)

(4,563)

(271)

(542)

2,803

2,532

(341)

(818)

(341)

(671)

(1,343)

(4,338)

(5,906)

(663)

(1,324)

(1,159)

(5,001)

(7,229)

3,269

2,929

5,596

11,782

6,034

11,704

Allocation of goodwill to
cash-generating units
Goodwill has been allocated for impairment
testing purposes to three cash-generating
units: pharmaceutical business, medical
devices business and veterinary equipment
business. The carrying amount of goodwill
allocated to cash-generating units is as follows:

2021
$’000

2020
$’000

3,808

4,706

581

4,389

9,095

Net book value

Balance at beginning
of financial year

9,095

Pharmaceuticals

Medical devices

Veterinary

Impairment loss - Medical
Devices

(4,706)

Balance at end of financial year

4,389

9,095

During the year, the company assessed
the recoverable amount of goodwill and
recognised a $4.706m impairment loss
associated with the Medical Device business
(2020: $nil).

Refer to right for further explanation.

The recoverable amount for the respective
CGUs was determined as follows:

Pharmaceuticals
The recoverable amount was calculated using a
‘fair value less costs to dispose’ approach, which
incorporates cash flow projections over five years
and a terminal value, discounted to present value
using a risk-adjusted post-tax discount rate.

Annual Financial Report 2021The recoverable amount for Pharmaceuticals
represents an aggregation of:

1. an estimate of future cash flows attributable

to the geographies in which the Group
currently operates, allowing for further
growth and expansion, assuming EBITDA
growth in accordance with the business
operating plan for years 2-3, an EBITDA
growth rate of 20% for years 4-5 and a
long-term growth rate of 2% (2020: 2%).
The estimate of future cash flows was then
discounted using a post-tax discount rate of
10.3% (2020: 10.3%).

2. an estimate of future cash flows expected
to arise from the Chinese and US markets,
allowing for expected costs to be incurred
to achieve market approval, an estimate of
sales volume, gross margin and operating
costs and a long-term growth rate of 3%
(2020: 3%). The estimate of future cash
flows was then discounted using a post-tax
discount rate of 20% (2020: 25%).

The cash flows attributable to the
geographies in which the Group currently
operates (principally Australia and Europe)
rely on continued growth in the short to
medium term. The cash flows in these
regions were subdued during the period to
30 June 2021 due to COVID-19 and related
Government restrictions. The Group expect
these impacts to lessen, in the short term,
with demand increasing as vaccination
programs improve, restrictions are eased
and activity levels within respective
geographies continue to increase.

As announced to the ASX on 19 August
2020, the company has signed an
agreement to take back the distribution
rights for Penthrox® in Europe from
Mundipharma. This transition was completed
in FY21 and The Group expect these actions
to assist in realising the Group’s market
opportunity.

MVP remains confident of achieving
approval in the Chinese and US markets
based on its 40+ years of experience,
the demonstrated safety profile of
Penthrox® over that time, its ongoing
clinical development program and recent
achievements in getting Penthrox® approved
for sale in more than 40 countries around
the world.

Medical devices
The recoverable amount was calculated using
a ‘value in use’ approach, which incorporates
cash flow projections over five years and a
terminal value, discounted to present value
using a risk-adjusted post-tax discount rate.

The recoverable amount for Medical Devices
is based on management forecasts for Year
1, incorporating an allowance for growth and
expansion in existing markets by assuming an
EBITDA growth rate in Year 2-5 of 15% (2020:
15%) per annum and a long-term growth rate
of 2% (2020: 2%). The estimate of future cash
flows is then discounted using a post-tax
discount rate of 10.3% (2020: 10.3%).

The cash flows generated by the Medical
Devices business were subdued during the
current year vs. FY21 forecast expectations
due to COVID-19 and related Government
restrictions. Whilst the Group saw an elevation
in sales in Q4 FY20 arising from ‘panic buying’,
demand for respiratory devices softened
during FY21 as activity levels fell.

The Group is cautiously optimistic that
these impacts will be lessened in FY22,
with demand increasing as restrictions are
eased, vaccination rates improve and activity
levels within respective geographies begin
to increase. Nevertheless, a moderated
forecast for FY22 and beyond has resulted
in an impairment charge of $4.706m being
recognised against the Medical Devices cash
generating unit, which resulted in the full
impairment of goodwill allocated to the CGU.

Veterinary
The recoverable amount of the Veterinary CGU
is reliant upon trading performance remaining
stable at current levels.

As the global outbreak of COVID-19 continues
to progress and evolve, it is extremely
challenging to predict the full extent and
duration of its impact on the Group’s
business activities. The Group believes that
the assumptions adopted in the recoverable
amount calculations reflect an appropriate
balance between the Group’s experience to
date, the uncertainty associated with the
ongoing impacts of COVID-19 and the long-
term growth expectations of its respective
businesses.

Medical Developments International Limited14. Other intangible assets

2021

Gross carrying amount

Balance at 30 June 2019

Additions

Balance at 30 June 2020

Additions

Balance at 30 June 2021

Accumulated amortisation

Balance at 30 June 2019

Amortisation expense

Balance at 30 June 2020

Amortisation expense

Balance at 30 June 2021

Accumulated impairment
losses

Development
$’000

Patents &
trademarks
$’000

Capitalised
registration
costs
$’000

Brandnames
$’000

Other
$’000

Total
$’000

5,390

1,547

6,937

1,315

8,252

(765)

(234)

(999)

(837)

(1,836)

1,137

180

1,317

258

1,575

(479)

(99)

(578)

(108)

(686)

26,498

5,672

32,170

3,741

35,911

(3,316)

(835)

(4,151)

(1,112)

(5,263)

738

767

777

(305)

(86)

(391)

(369)

(760)

34,530

7,409

41,939

5,313

47,252

(4,865)

(1,254)

(6,119)

(2,425)

(8,544)

(4,250)

Balance at 30 June 2021

(4,250)

Net book value

As at 30 June 2019

As at 30 June 2020

5,938

2,166

739

889

28,019

30,648

738

386

35,820

34,458

The amortisation charge for the year of $2,425,000 (2020: $1,254,000) has been included in
administration expenses. For an explanation of amortisation periods refer Note 1 (l).

The carrying amount of Other Intangible Assets
allocated to cash-generating units is as follows:

Pharmaceuticals

Medical devices

2021
$’000

2020
$’000

32,797

34,202

1,581

1,551

Veterinary equipment

34,458

35,820

Intangible assets are assessed for indicators
of impairment each balance date, or in the
case of intangible assets not yet available
for use, at least annually. When impairment
testing is performed, management estimate
the recoverable amount of the intangible
asset or the cash generating unit to which the
intangible asset belongs.

The impairment loss recognised in the current
year relates to the CSIRO Continuous Flow
Technology Project. The Group is yet to
formally validate new molecules at commercial
scale production levels using its flow

technology. This has delayed the achievement
of a commercial outcome and given the
inability to accurately measure the fair value
of the technology and to reliably estimate
its value in use, the Group has recognised an
impairment provision for the full value of these
capitalised development costs as at 30 June
2021 on the basis that future economic benefit
is not probable. The impairment loss has been
included in administration expenses.

15. Current trade
and other payables

Trade payables (i)

Accrued expenses

Employee benefits payable

PAYG witholding tax payable

2021
$’000

2020
$’000

3,302

2,634

3,841

1,102

6,002

5,001

Annual Financial Report 2021
(i) The average credit period on purchase of goods is 30
days. No interest is charged on trade payables. The
company has financial risk management policies in
place to ensure that all payables are paid within the
credit timeframe.

16. Borrowings

19. Other liabilities

Revenue received in advance

21,245

31,640

2021
$’000

2020
$’000

Secured - at amortised cost

Other (i)

Current

Non-current

2021
$’000

2020
$’000

Summary of borrowing arrangements
(i) During the current year, The Group repaid

the final component of the loan form the
CSIRO.

(ii) The Group has an overdraft facility of

$200,000. As at 30 June 2021, this remains
unused.

17. Current provisions

Employee benefits

553

401

2021
$’000

2020
$’000

18. Non-current
provisions

Employee benefits

294

269

2021
$’000

2020
$’000

The company has 68 full time equivalent
employees at 30 June 2021 (2020: 65)

Unearned government grant
income

Current

Non-current

730

754

21,975

32,394

2,394

21,907

30,000

21,975

32,394

When MVP receives upfront payments
in relation to licensing and distribution
agreements for Penthrox®, for accounting
purposes these non-refundable payments are
deferred and amortised into the profit or loss
over the term of the agreement to which the
payments relate. As at 30 June 2021, $21.245m
(2020: $31.640m) remains unamortised.
The significant decrease in the balance of
unearned income in the current year is a result
of the Penthrox® distributions rights in both
the EU and Canada being taken back by MVP,
resulting in the remaining unearned revenue
associated with those markets, being released
to the profit and loss statement as revenue.

Unearned government grant income
represents funds received through the
Commercial Ready Programme from the
Federal Government, Futures Industries
Manufacturing Program of the Victorian State
Government and various other government
funding initiatives.

20. Lease liabilities

Lease liability

Current

Non-current

2021
$’000

2020
$’000

3,049

337

2,712

3,265

326

2,939

3,049

3,265

Medical Developments International Limited21. Issued capital

2021

2020

No.

$’000

No.

$’000

Fully paid ordinary shares

Balance at beginning of financial year

65,623,491

40,954

65,516,746

40,410

Shares Issued - Dividends Reinvestment Plan

106,745

Share issue - Placement

3,830,769

24,900

Share issue - Share Purchase Plan

Capital raising costs

1,810,412

11,768

(727)

557

(13)

Balance at end of financial year

71,264,672

76,895

65,623,491

40,954

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

In December 2020 MVP completed a successful $24.9m capital raise via a placement supported
by new and existing institutional investors in Australia and offshore. This was followed by the
successful completion in January 2021 of a Share Purchase Plan raising a further $11.8m.

22. Reserves

2021
$’000

2020
$’000

2021
$’000

2020
$’000

(a) Foreign currency translation reserve

Balance at beginning of year

(45)

(3)

Exchange differences arising on
translating the foreign operations

(42)

Balance at end of year

(30)

(45)

Exchange differences relating to the
translation of the results and net assets of the
Group’s foreign operations (UK and EU based)
from their functional currencies to the Group’s
presentation currency (i.e. Australian dollars)
are recognised directly in other comprehensive
income and accumulated in the foreign
currency translation reserve.

Balance at beginning of year

1,200

800

Option issues for services provided

406

400

Balance at end of year

1,606

1,200

The above CSIRO option reserve at 30 June
2021, relates to 320,410 options (2020:
243,706) over ordinary shares of the Company.
These options are in relation to the MVP/
CSIRO Manufacturing Technologies Project
announced on 5 June 2017. Options are
exercisable for no consideration when a
developed technology has been proven to be
commercially viable. The share options granted
to the CSIRO carry no rights to dividends and
no voting rights.

2021
$’000

2020
$’000

23. Retained earnings

(b) Employee equity-settled benefits reserve

Balance at beginning of year

802

Share-based payments recognised

1,167

711

Balance at end of year

1,969

802

The above equity-settled employee benefits
reserve related to share options granted by the
company to its CEO and Senior Management
team under its employee share option plan.

2021
$’000

2020
$’000

Balance at beginning of financial year

427

2,670

Dividends paid

(2,622)

Net profit attributable to members

(12,565)

Balance at end of financial year

(12,138)

379

427

Annual Financial Report 2021

24. Earnings per share

2021
cents per
share

2020
cents per
share

Basic earnings per share

Diluted earnings per share

(18.35)

0.58

Basic earnings per share
The earnings and weighted average number of
ordinary shares used in the calculation of basic
earnings per share are as follows:

Earnings

2021
$’000

2020
$’000

(12,565)

379

2021
No.

2020
No.

Weighted average
number of ordinary
shares

68,465,397

65,586,805

Diluted earnings per share
Earnings used in the basic earnings per share
calculation are identical to those used for the
diluted earnings per share calculation. There
is no dilution of a loss for earnings per share
purpose. Dilutive options outstanding as at 30
June 2020 related to options to employees
and also to the CSIRO.

Weighted average number
of ordinary shares used in
the calculation of basic EPS

2021
No.

2020
No.

68,465,397

65,586,805

Shares deemed to be issued for no consideration in
respect of:

- Dilutive Options

321,957

Weighted average number
of ordinary shares for
diluted EPS

68,465,397

65,908,762

25. Dividends

No interim or final dividend was paid in the current year. An interim dividend of 2 cents per share
was declared and paid in the year ended 30 June 2020.

The interim dividend paid during the 30 June 2020 year resulted in the company paying
dividends of $1,170,000 and the balance of $142,000 issued as shares under the Dividend
Reinvestment Plan.

2021

2020

cents per
share

$’000

cents per
share

$’000

1,312

1,310

2,622

2.0

4.0

Recognised amounts

Fully paid ordinary shares

Interim dividend - fully franked

Full year dividend paid during the year -
fully franked

Unrecognised amounts

Fully paid ordinary shares

Final dividend - fully franked

Medical Developments International Limited28. Related party
disclosures

There were no related party transactions
during the 2021 financial year.

Balances and transactions between the
Company and its subsidiaries which are related
parties of the company have been eliminated
on consolidation and are not disclosed in this
note.

Please also refer to note 6 for details of Key
Management Personnel compensation.

29. Subsequent events

There has not been any matter or circumstance
that has arisen that has 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.

2021
$’000

2020
$’000

Adjusted franking account balance

1,706

1,469

26. Short term leases

2021
$’000

2020
$’000

Non cancellable operating lease payments:

Not longer than 1 year

Longer than 1 year and not longer
than 5 years

Greater than 5 years

Short term leases not accounted for under
AASB 16 primarily relate to low value short-
term factory leases and office equipment with
lease terms < 1.5 years. The company does not
have the option to purchase the leased assets
at the expiry of the lease period.

27. Commitments
for expenditure

(a) Capital expenditure
commitments
There were no material capital expenditure
commitments at 30 June 2021.

Annual Financial Report 2021
30. Notes to the Consolidated Statement
of Cash Flows

(a) Reconciliation of cash and cash equivalents

For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks. Cash at the
end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the related item in the
Statement of Financial Position as follows:

2021
$’000

2020
$’000

Cash and cash equivalents

(b) Reconciliation of profit for the period to net cash flows from operating activities

Profit/(loss) for the period

Interest received

Depreciation and amortisation of non-current assets

Net unrealised foreign exchange (gain)/loss

Share based payments

Impairment - Goodwill

Impairment - CSIRO Development Project

Increase/(decrease) in tax payable

Decrease/(increase) in deferred tax asset

Movements in working capital

Decrease/(increase) in assets:

Receivables

Inventories

Other assets

Increase/(decrease) in liabilities:

Payables

Provisions

Other liabilities

Non-current provisions

Net cash from operating activities

36,277

(12,565)

(82)

3,749

(64)

1,167

4,706

4,250

(2,304)

(131)

1,434

154

1,019

152

(10,419)

(8,890)

15,544

379

(429)

2,597

(222)

(2,053)

2,302

(2,833)

(115)

1,974

(1,552)

(33)

172

Unsecured bank overdraft facility, reviewed annually and payable at call:

Amount unused

200

Medical Developments International Limited31. Financial
instruments

(a) Capital risk
management
The Group manages its capital to ensure that
it will be able to continue as a going concern
while maximising the return to stakeholders.
The Group does not enter into or trade
financial instruments, including derivatives, for
speculative purposes.

The capital structure of the Group consists of
net debt (borrowings as detailed in note 16)
and equity of the Group (comprising issued
capital, reserves, retained earnings, and cash
and cash equivalents as detailed in notes 21,
22, 23, and 30(a), respectively).

The Group’s Audit and Risk Committee
reviews the capital structure of the Group on
a semi-annual basis. As part of this review, the
committee considers the cost of capital and
the risks associated with each class of capital.

As at 30 June 2021 the Group had no
borrowings, and was in a net cash position,
hence it had a nil debt to equity gearing ratio
(30 June 2020: 0.2%).

(b) Significant accounting
policies
Details of significant accounting policies and
methods adopted, including the criteria for
recognition, the basis of measurement and
the basis on which revenues and expenses are
recognised, in respect of each class of financial
asset, financial liability and equity instrument
are disclosed in note 1 to the financial
statements.

These policies were consistent throughout the
current year and the prior year.

(c) Financial risk
management objectives
The Group’s finance function provides services
to the business, co-ordinates access to
domestic and international financial markets,
monitors and manages financial risks relating to
the operations of the Group. These risks include
market risk (including currency risk), credit risk,
liquidity risk and cash flow interest rate risk.

(d) Credit risk management
Credit risk refers to the risk that a counter
party will default on its contractual obligations
resulting in financial loss to the Group. The
Group has adopted a policy of only dealing
with creditworthy counterparties. The Group’s
exposure is continually monitored and the
aggregate value of transactions concluded is
spread amongst approved counterparties.

Trade receivables consist of a large number
of customers. Ongoing credit evaluation is
performed on the financial condition of these
accounts receivable and advance payments
are requested where deemed appropriate.

The carrying amount of financial assets
recorded in the financial statements, net of
any allowance for expected credit losses,
represents the Group’s maximum exposure to
credit risk without taking account of the value
of any collateral or other security obtained.

The Group does not have significant credit
risk exposure to any single counterparty in the
current year or any group of counterparties
having similar characteristics. The Group
defines counterparties as having similar
characteristics if they are related entities.

(e) Foreign currency risk
management
The Group undertakes certain transactions
denominated in foreign currencies, hence
exposures to exchange rate fluctuations arise.

The carrying amount of the Group’s foreign
currency denominated monetary assets and
monetary liabilities at the reporting date is as
follows:

Liabilities

Assets

2021
$’000

2020
$’000

2021
$’000

2020
$’000

852

2,705

1,266

2,012

1,307

139

1,407

1,282

163

454

514

415

125

533

2,232

2,930

3,804

4,367

USD

GBP

NZD

EUR

CND

The Group does not currently consider its
exposure to foreign currency to be significant
and as such forward contracts and currency

Annual Financial Report 2021

swap agreements are not used. The Group
expects to become increasingly exposed to
the Euro as it’s Penthrox® European expansion
progresses in coming years and will monitor
the exposure accordingly.

Foreign currency sensitivity analysis
The Group predominantly trades in Australian
dollars (AUD) but has exposure to the US
dollar (USD), Great Britain Pound (GBP) and
Euro (EUR) based on a portion of its overseas
sales and purchases.

The following table details the Group’s
sensitivity to a 10% increase and decrease in
the Australian Dollar against the USD, GBP
and EUR. 10% represents management’s
assessment of the possible change in foreign
currency rates.

The sensitivity analysis includes only outstanding
foreign currency denominated monetary items
and adjusts their translation at the period end
for a 10% change in foreign currency rates. A
positive number indicates an increase in profit
or loss where the Australian Dollar strengthens
against the respective currency. For a weakening
of the Australian Dollar against the respective
currency there would be an equal and opposite
impact on the profit.

Profit or loss

2021
$’000

(41)

(137)

2020
$’000

(114)

USD Impact

GBP Impact

Euro Impact

The exposure to movement in NZD and CAD is
not deemed to be material.

(f) Fair value of financial
instruments
The Directors consider that the carrying
amount of financial assets and liabilities
recorded at amortised cost in the financial
statements approximates their respective net
fair values, determined in accordance with the
accounting policies disclosed in note 1 to the
financial statements.

The Group does not recognise any financial
instruments that are measured subsequent to
initial recognition at fair value.

(g) Interest rate risk management
The following table details the Group’s exposure to interest rate risk as at 30 June 2021 and
30 June 2020.

Average
interest
rate
%

Less than
1 year
$’000

1 to 5
years
$’000

More than
5 years
$’000

Non-
interest
bearing
$’000

Total
$’000

0.26%

36,277

3.55%

36,277

233

1,141

1,675

36,277

2,648

6,002

2,648

38,925

6,002

3,049

1,675

6,002

9,051

2021

Financial assets

Cash

Receivables

Financial liabilities

Payables

Lease liability

Borrowings

Medical Developments International Limited2020

Financial assets

Cash

Receivables

Financial liabilities

Payables

Lease liability

Borrowings

Average
interest
rate
%

Less than
1 year
$’000

1 to 5
years
$’000

More than
5 years
$’000

Non-
interest
bearing
$’000

Total
$’000

1.58%

15,544

3.55%

3.89%

15,544

215

1,056

1,994

15,544

4,082

5,001

4,082

19,626

5,001

3,265

306

1,056

1,994

5,001

8,357

The following table details the Group’s
sensitivity to a 50-basis point increase or
decrease in interest rates.

monitoring forecast and actual cash flows and
matching the maturity profiles of financial
assets and liabilities.

Profit or Loss

2021
$’000

2020
$’000

165

(h) Liquidity risk
management
The Group manages liquidity risk by
maintaining adequate cash reserves and
reserve borrowing facilities by continuously

Liquidity risk table
The following table details the Group’s
remaining contractual maturity for its non-
derivative financial liabilities. The table has
been drawn up based on the undiscounted
cash flows of financial liabilities based on
the earliest date on which the Group can
be required to pay. The table includes the
principal cash flows.

2021

Payables

Lease Liability

Borrowings

2020

Payables

Lease Liability

Borrowings

Weighted
average
effective
interest
rate
%

Less than
1 year
$’000

1 to 5
years
$’000

More than
5 years
$’000

6,002

3.55%

337

1,461

1,807

Total
$’000

6,002

3,605

6,339

1,461

1,807

9,607

5,001

3.55%

3.89%

326

5,418

1,415

2,191

5,001

3,932

2,191

9,024

Annual Financial Report 202132. Parent entity
information

The accounting policies of the parent entity,
which have been applied in determining the
financial information shown below, are the
same as those applied in the consolidated
financial statements.

Refer to note 1 for a summary of the significant
accounting policies relating to the Group.

Financial position

2021
$’000

2020
$’000

Assets

Current Assets

49,890

26,230

Non-Current Assets

50,471

58,749

Total Assets

100,361

84,979

Liabilities

Current Liabilities

6,540

8,142

Non-Current Liabilities

24,924

33,208

Total Liabilities

31,464

41,350

Equity

Issued capital

Reserves

76,895

40,954

3,575

2,002

Retained earnings

(11,573)

673

Total Equity

68,897

43,629

Financial performance

2021
$’000

2020
$’000

Profit/(loss) for the year

(12,246)

296

Dividends paid

(2,622)

Total comprehesive income

(12,246)

(2,326)

33. Employee Option
Plans

Under the Executive Option Plans, awards are
made to executives who have an impact on
the Group’s performance. Long Term Incentive
awards are delivered in the form of options

over shares which vest on the achievement of
specific performance measures.

The fair value of share options granted is
estimated at the date of grant using either a
Black Scholes option pricing model or Monte
Carlo Simulation Model, taking into account
the terms and conditions upon which the share
options were granted including the option
price, the life of the option, the share price of
the underlying shares on grant date and the
expected share price volatility. It also takes into
account historical and expected dividends.
There are no cash settlement alternatives for the
employees and The Group does not have a past
practice of cash settlement for these awards.

All outstanding options will be cancelled if
the employee leaves or is no longer employed
by the Group for any reason. When the
Long-Term Incentive Plan “LTIP” has met its
vesting criteria and delivers an entitlement to
an equity interest, the employee will have 3
months to exercise the relevant options, after
which the relevant options will lapse.

Each share option converts into one ordinary
share of Medical Developments International
Limited on exercise. No amounts are paid or
payable by the recipient on the receipt of the
option nor are they tradeable at any time. The
options carry neither rights to dividends or
voting rights.

The following share-based payment
arrangements were in existence during the
current period:

CEO Option Plan
CEO, Brent MacGregor commenced with
the Group on 1 November 2020 at which
point in time it was announced that a long-
term incentive plan had been agreed to, to
encourage his long-term commitment to the
business. 1,968,704 options over ordinary
shares were issued to the CEO under the
Company’s Employee Option Plan. All options
have a nil exercise price and no entitlement to
dividends.

The option issue is divided into four tranches,
with the vesting criteria for each tranche as
follows:

Medical Developments International Limited• 25% vest on the achievement of a $9 daily
VWAP for 30 consecutive trading days
(vesting is also subject to the completion
of a 3-year service period from the date of
achieving the share price hurdle);

Following vesting and exercise, 50% of the
shares will be subject to escrow for 24 months.
If employment ceases for any reason prior to
vesting, the unvested options are forfeited.

Senior Management Option
Plan – Tranche 1
In September 2018 the company announced
it had agreed to a LTIP with key Senior
Management team members.

Under the plan certain Senior Management
team members were granted 325,000 options
with a strike price of $0.01. The options will
only vest on the earlier of FDA approval of
Penthrox® for sale in the USA or the company
receives an unconditional takeover offer worth
more than $350m. For valuation purposes
a probability of 75% has been applied to
the likelihood of achieving FDA approval
for Penthrox® in the USA. 100,000 options
within this issue contain a further vesting
trigger being, the delivery of a new Active
Pharmaceutical Ingredient (API) from the
CSIRO manufacturing technologies project
that creates revenue of at least $1m p.a. In
each case, 60% of the new shares issued by

exercising options will be escrowed for a
period of 12 months from issue date. In the
case of an unconditional takeover, the escrow
conditions will not apply.

Senior Management Option
Plan – Tranche 2
An additional Senior Management Option Plan
was granted effective from 1 July 2019. Under
the plan a certain Senior Management team
member was granted 75,000 options with
a strike price of $0.01. The options will vest
based upon certain milestones as follows:

• 25,000 vest when the FDA approves the
opening of the USA IND for Penthrox®;

• 25,000 vest on 2 July 2022; and

• the balance vest in the event of NDA

approval in the USA or an unconditional
takeover offer for greater than $350m.

For tranche 2, where any of the vesting criteria
have been met and the options exercised,
the first 50% of the shares will be available
to sell immediately without restriction. The
remaining 50% of the shares will be subject to
an escrow period of 2 years. In the case of an
unconditional takeover, the escrow conditions
will not apply.

Senior Management Option
Plan – Tranche 3
An additional Senior Management Option Plan
was granted effective from 1 November 2020.

Under the plan certain Senior Management
team members were granted a total of
245,000 options with each option having a
strike price of $0.01 and no entitlement to
dividends. Similar to the CEO option plan,
this issue is divided into a further four equal
tranches, with the vesting criteria for each
tranche as follows:

Annual Financial Report 2021• 25% vest on the achievement of a $10 daily
VWAP for 30 consecutive trading days
(vesting is also subject to the completion
of a 2-year service period from the date of
achieving the share price hurdle); and

The options are subject to a share price target
which commences at the grant date of the
option and ceases 7 years from grant date.

Following achievement of the share price
target, MVP’s CEO must complete a service
period (as specified above). Each tranche vests
at the end of the relevant service period. The
service period condition is waived if the share
price hurdle is achieved by the 5th anniversary
of the options grant e.g. if the share price
hurdle is met 4.5 years after grant, the options
will vest at the 5th anniversary.

Following vesting and exercise, 50% of the
shares will be subject to escrow for 24 months.
If employment ceases for any reason prior to
vesting, the unvested options are forfeited.

Summary of unvested options

2021

Balance
at
30 June
2020
No.

Granted as
remuneration
No.

Exercised
No.

Lapsed/
forfeited
No.

B. MacGregor

1,968,704

M. Edwards (CFO)

100,000

Senior Management

300,000

245,000

400,000

2,213,704

Balance
vested at
30 June
2021
but not
exercised
No.

Balance
not
vested at
30 June
2021
No.

1,968,704

100,000

545,000

2,613,704

Options
vested
during the
year
No.

Issuing Entity

Personnel

Tranche

Number
of shares
under
option

Class of
shares

Exercise
price of
option

Expiry
date of
options

Medical Developments International Ltd

B. MacGregor

1,968,704 Ordinary

$0.00

No expiry

Medical Developments International Ltd M. Edwards

100,000 Ordinary

$0.01

No expiry

Medical Developments International Ltd

Senior
Management

1-3

545,000 Ordinary

$0.01

No expiry

2020

Balance
at
30 June
2019
No.

Granted as
remuneration
No.

Exercised
No.

J. Sharman (CEO)

300,000

M. Edwards (CFO)

100,000

Senior Management

225,000

625,000

75,000

2,613,704

Balance
vested at
30 June
2020
but not
exercised
No.

Balance
not
vested at
30 June
2020
No.

Options
vested
during the
year

100,000

300,000

400,000

Lapsed/
forfeited
No.

300,000

Medical Developments International Limited
Fair value of share options granted during the year
As the options contain non-market performance hurdles, they have been valued using either a
‘Black-Scholes’ Option Pricing Model or a ‘Monte Carlo’ Simulation model. Where relevant, the
expected useful life used in the model has been adjusted based on management’s best estimate
for the effects of non-transferability and exercise restrictions. Expected volatility is based on the
historical share price volatility over the past 2 years.

Inputs into the option pricing model were as follows:

CEO

CFO

Senior
Management
(Tranche 1)

Senior
Management
(Tranche 2)

Senior
Management
(Tranche 3)

Grant date

1-Nov-20

7-Sep-18

1-Jul-19

1-Nov-20

Grant date share price

Exercise price

$5.32

$0.00

Option Fair Value

$4.47-$4.52

Expected volatility

52%

$3.90

$0.01

$3.69

45%

$3.90

$0.01

$3.69

45%

$5.30

$0.01

$5.32

$0.01

$5.13 - $5.24

$4.47-$4.52

45%

52%

Expected option life

9 years

5 years

1.5 - 4.2 years

9 years

Dividend (Bi-annually)

Nil

Risk-free interest rate

0.50%

2.17%

0.98%

Nil

0.50%

Option Valuation Model

Monte Carlo

Black Scholes

Monte Carlo

Share Based Payments Expense

Current year expense

Reversal for forfeited options

Share-based payments

2021
$’000

2020
$’000

1,167

325

(234)

1,167

34. Additional company information

Medical Developments International Limited is a listed public company, incorporated and
domiciled in Australia.

Company Secretary
Mr. Mark Edwards

Registered office and principal place of business
4 Caribbean Drive
Scoresby, VIC 3179

Tel: (03) 9547 1888

Share registry
Computershare Investor Services Pty Ltd
452 Johnston Street
Abbotsford, VIC 3067

Tel: 1300 850 505

Annual Financial Report 2021Additional Stock Exchange Information
as at 31 August 2021

Number of holders of equity securities

Ordinary share capital
71,264,672 fully paid ordinary shares held by 11,844 individual shareholders. All issued ordinary
shares carry one vote per share.

Distribution of holders of equity securities

Fully paid ordinary shares

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and over

Holding less than a marketable parcel

Substantial Shareholders

MR DAVID JOHN WILLIAMS

6,928

3,522

763

583

11,844

1,481

FIL LIMITED (and associated entities) (reported as of 19 July 2021)

M&G Plc and its subsidiaries (reported as of 21 October 2019)

Twenty largest holders of equity securities

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

MR DAVID JOHN WILLIAMS

J P MORGAN NOMINEES AUSTRALIA PTY LTD

NETWEALTH INVESTMENTS LIMITED (WRAP SERVICES A/C)

DR RUSSELL KAY HANCOCK

SANDHURST TRUSTEES (ENDEAVOUR ASSET MGMT MDA A/C)

NATIONAL NOMINEES LIMITED

CITICORP NOMINEES PTY LIMITED

BNP PARIBAS NOMS PTY LTD (DRP)

BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM

SANDHURST TRUSTEES LTD (JMFG CONSOL A/C)

MR ALISTAIR DAVID STRONG

BNP PARIBAS NOMINEES PTY LTD (AGENCY LENDING DRP A/C)

MRS VIRGINA CATHERINE HANCOCK

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED (NT-COMNWLTH SUPER CORP A/C)

JJ OPPERMAN SUPERANNUATION PTY LIMITED

BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD (DRP A/C)

MR MICHAEL CLIFFORD HICKLING & MRS GIOVANNA HICKLING

PNSF PTY LTD

NAYLOR-STEWART INVESTMENTS PTY LTD (NAYLOR-STEWART FAMILY A/C)

Number

9,515,242

4,091,641

3,295,094

Number

10,681,935

9,515,242

3,841,527

2,123,575

1,614,214

1,319,769

875,973

857,359

732,550

707,082

673,102

630,000

542,986

518,487

486,410

422,711

340,737

285,551

269,180

266,615

13.35

5.74

5.02

14.99

13.35

5.39

2.98

2.27

1.85

1.23

1.20

1.03

0.99

0.94

0.88

0.76

0.73

0.68

0.59

0.48

0.40

0.38

0.37

Medical Developments International Limited