1
ANNUAL
REPORT
Financial Year
ended 30 June 2023
2
1
A message from the Company Chair
On behalf of the Board of Directors of Medical Developments International, it is my pleasure to present to you our
Annual Report for the year ended 30 June 2023.
Overview
A message from the Company Chair
CEO Update
Company Overview
FY23 Highlights
Review of Operations and Financial
Performance
Financial Reports
Directors’ Report
Remuneration Report
Auditors Independence Declaration
Independent Auditor’s Report
Financial Statements
Directors’ Declaration
Shareholder information
1
2
4
7
8
20
22
26
44
45
51
86
87
FY23 Progress
I am pleased with the solid progress made by the Company over the last financial year. The benefits of focussing
on the core pain and respiratory franchises are becoming evident.
Following the successful capital raise a year ago and completion of the primary investment phase, we’re
managing the cash resources of the company very closely.
DIRECTOR’S REPORT
The Company continues to deliver strong revenue growth, with good momentum in underlying demand in all key
markets.
Following careful assessments, we have altered course in France and China to reflect on-ground realities. We
believe that both changes will support our pathway to operational cash break-even.
AUDITOR'S INDEPENDENCE DECLARATION
The auditor's independence declaration is included on page 17.
To complement our growing strength in international markets, the US market entry planning is progressing well.
The prize is substantial, but careful navigation is needed.
The Board has worked hard with management to strengthen our corporate governance systems over the year. We
have implemented substantial changes to our remuneration arrangements to help drive the delivery of strategy
and shareholder value. This includes changes to the remuneration arrangements for the CEO (subject to, in part,
shareholder approval). Our senior executive team now all have an equity component in their short-term incentive
arrangements and have transitioned to new long term incentive arrangements which more strongly align to
shareholder interests.
ROUNDING
The Company is a company of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 dated 24 March 2016, and in accordance with that Corporate Instrument, amounts in the Directors’ Report and
financial report are rounded to the nearest $1,000, unless otherwise stated.
Board Changes
Dr Russell Basser was appointed to the Board on 1 September 2023. Dr Basser is a qualified physician, with
over 30 years of international medical and biopharmaceutical experience. He also has substantial expertise
in international drug and vaccine development, having held multiple global executive roles in medical and
clinical fields at CSL, including several years based in the US. On behalf of the Board, I welcome Russell and the
experience he brings to the Company.
On behalf of the directors
Signed in accordance with a resolution of the Board of Directors made pursuant to s. 298(2) of the Corporations Act 2001:
After 20 years as a non-executive director of the Company, David Williams left the Board in April 2023 to
focus on other personal and business interests. David has been instrumental in building the Company and his
thoughtful transition of the Chair role to me was invaluable. On behalf of my fellow Directors, I thank David for his
remarkable contribution to the Company as well as the continuing support he provides as our lead shareholder.
Thank You
On behalf of the Board of Directors, thank you to Brent and to the entire
Medical Developments team who have performed well during the year.
Importantly, we thank you, our shareholders, for your continued
support as we transform into a global healthcare company.
Gordon Naylor Company Chair
Gordon Naylor
Company Chair
26 August 2022
Medical Developments International Ltd
16
Contents
2
CEO Update
3
FY23 has been an encouraging year, with continued momentum in our Pain Management and Respiratory
segments. Improved volumes and pricing in both segments have delivered strong revenue and margin growth
over the year. We have a strong leadership team in place to help execute our growth strategy and to continue to
build a positive culture. I am proud of our achievements and look forward to continued success in FY24.
The Company confirmed it would seek funding from one or more partner organisations to fund US market entry.
An experienced adviser has been appointed to support the search.
Overall, I am very encouraged by our progress and look forward to the next stage of our Company’s growth.
Outlook
The Company expects underlying EBIT in FY24 to improve on the prior year, driven by:
• Higher Penthrox volumes in Australian hospital emergency departments;
• Share growth in the Respiratory segment; and
•
Incremental margin improvements of $6 million from pricing and efficiency.
Thank You
I would like to take this opportunity to thank our shareholders for their continued investment in the Company and
to thank the Board of Directors for their support as we continue to grow the Company and drive execution of our
strategy.
I am excited about our future, and I look forward to updating you on our progress in the year ahead.
Brent MacGregor Chief Executive Officer
Group Performance
Group revenue was up 47% on the pcp at $32.3 million.
The Pain Management segment delivered revenue growth of 54%, with higher volumes and improved pricing.
In Australia, volumes were up 6%, with solid demand from the ambulance sector, and growing penetration in
hospital emergency departments procedural segments. In Europe, overall demand was stronger despite a
challenging economic backdrop. Volumes in France were up 33%, the UK and Ireland were up 34%, while the
Nordics, Central Europe, Switzerland and Belgium all delivered encouraging growth. Volumes into other markets
were up almost three-fold, driven primarily by inventory stocking for the relaunch of Penthrox in Canada.
Revenue in the Respiratory segment was up 43%, a strong result that reflects continued market share growth,
particularly in the US, and solid underlying demand.
Gross margin was improved by $5.4 million driven by volume growth and higher pricing.
Underlying EBIT for the period was a loss of $18.3 million, $3.6 million unfavourable to the prior year, driven by
higher costs associated with the Company’s capability build. This includes investment in the Australian Penthrox
field team, increased commercial resources in Respiratory, and enhanced leadership and functional capability.
The Company’s primary investment phase is now complete and will continue to drive volume and margin growth
in future periods.
Strategy
The Company’s nearer term strategic focus is to increase the penetration of Penthrox in existing markets, and to
continue to grow its Respiratory segment through market share gains, particularly in the US. Longer term, the
Çompany seeks to enter new and attractive markets for Penthrox, with particular focus on the US.
During the year, foundations were established to support the penetration of Penthrox into the Australian hospital
emergency departments. This included a field sales team, medical scientific liaison support, and the launch of
a new marketing campaign to support the positioning of Penthrox in the emergency department setting which
accounts for 45% of the addressable market in Australia. In this setting, Penthrox offers compelling advantages.
The team have already made progress in working with hospitals and buying groups to list Penthrox on hospital
protocols and formularies in all states.
In France, we delivered 33% growth in Penthrox volume against a challenging backdrop, with volume for the year
at 65,000 units. In light of operating conditions and slower than planned growth, market development investment
in France has been scaled back. Despite the near-term challenges, France remains a key growth opportunity over
the longer term. While we reassess our go-to-market approach, supply to our more than 300 existing customers
will be maintained and supported through agents in the region alongside enhanced support in our Melbourne
head office.
The Company works with partners for the sale of Penthrox in over 20 markets globally. Strong engagement with
these partners will be a key driver of future growth. In the period, the Company’s newest partner successfully
relaunched Penthrox in Canada, and we saw encouraging growth in underlying demand in all partner markets.
During the period we discontinued the clinical trial program in China. This followed extended delays due to COVID
and the challenging regulatory environment in China. It was unlikely we would reach a commercial outcome here.
A careful resolution of the situation has preserved our strategic optionality in this region and allowed us to direct
resources to other priorities which have greater capacity to generate shareholder value in the nearer term.
This includes entry into the US, which will be transformational for the Company and is our primary strategic focus.
A comprehensive market assessment on the commercial opportunity for Penthrox in the US was completed in
the period. This assessment identified a large and attractive opportunity for Penthrox, with in-market revenue
potential of between US$300 million and US$400 million five years post launch.
5
Registered in
over 40 countries
4
Company Overview
A leader in acute pain relief and
respiratory products
Pain Management
A world leader in the supply of analgesia
for acute trauma and procedural pain
The Company manufactures its unique inhaled analgesic,
Penthrox® (the “Green Whistle”), at manufacturing facilities
at Scoresby and Springvale in Victoria, Australia. Penthrox® is
a fast onset, non-opioid analgesic indicated for pain relief by
self-administration in patients with trauma and those requiring
analgesia for surgical procedures. Penthrox® has been used
safely and effectively for more than 40 years in Australia, and is
now approved for sale in over 40 countries with approximately
8 million administrations globally.
Respiratory
A leading supplier of respiratory
products to help patients manage asthma
and chronic obstructive pulmonary
disease (COPD)
The Company supplies pharmacies, medical clinics, and
hospitals with a range of respiratory devices including space
chambers, portable nebulisers and silicon face masks in
Australia, the USA, Europe, and Asia, either directly or through
partnership with leading distributors.
Strategy
The Company’s strategic focus is to accelerate penetration of Penthrox® in existing markets, and to grow its
Respiratory segment through market share gains. Unconditional approval from the FDA to commence Phase III
clinical trials for Penthrox® has opened the door for longer-term growth in the USA.
Penthrox®
Respiratory
Penthrox® & Respiratory
6
7
FY23 Highlights
Financial Overview
Revenue
$32.3m
Pain Management
Revenue
$20.4m1
+47%
+54%
Underlying
EBIT
$18.3m (loss)
Underlying
Adjustments
$10.3m (gain)
Respiratory
Revenue
$11.7m
+43%
NPAT
$5.6m (loss)
(pcp $14.7m loss)
(pcp $1.2m loss before tax)
(pcp $12.4m loss)
1. Excludes Contract termination revenue of $18.9 million
Key Achievements
Commercial milestones
• Expansion of Penthrox into Australian hospital emergency departments
•
•
•
Strong growth for Penthrox in key partner markets
Spend in France scaled back in light of market conditions
Market share gains in the Respiratory segment
Market registrations and product development
• Clinical trial in China discontinued
•
•
•
UK paediatric trial closed; submission expected Q3 FY24
Funding award of $1.5 million to support development of next generation inhaler
US partner search underway; commercial market assessment complete
8
9
Review of Operations and
Financial Performance
OVERVIEW
• Revenue(1) up 47% to $32.3 million (pcp $21.9 million).
-
-
Pain Management revenue up 54% driven by volume growth and improved pricing.
Respiratory revenue up 43%, with strong volume growth in all regions.
• Net loss after tax of $5.6 million (pcp $12.4 million loss).
• Net gain (before tax) from underlying adjustments of $10.3 million, mostly relating to a net gain arising
from the cessation of clinical trial preparations in China and costs for a comprehensive assessment of the
commercial potential of Penthrox in the US.
• Underlying EBIT(2) of $18.3 million loss (pcp $14.7 million loss), reflecting costs of capability build.
• Continued penetration of Penthrox in global markets:
-
European in-market volumes up 39% with growth in all markets.
- Growth of 33% delivered in France against a challenging operating backdrop.
- UK and Ireland in-market volumes up 34% with encouraging growth momentum.
-
-
Volume growth of 6% in Australia with solid demand from ambulance and increased penetration in
hospital emergency departments. Field team deployed to accelerate penetration.
Revenue growth of 141% in Rest of World markets, driven by inventory stocking for relaunch of Penthrox
in Canada, and growth in Middle East, South Africa, and Asia.
• Pleasing progress in growing market share in the Respiratory segment, sales in the USA up 59%.
• Preparation of clinical trials in China discontinued, to ensure greater focus on key growth opportunities in
Australia, Europe and the USA.
• Planning for USA market entry advancing. Program to be funded by one or more partner organisations.
Experienced US adviser appointed to support partner search. A comprehensive market assessment of
the commercial opportunity for Penthrox in the US has identified in-market revenue potential of US$300-
US$400 million (5 years post launch).
• Development of next generation inhaler (“Selfie”) progressing in line with plan. Funding award of up to
$1.5 million received from Clinical Translation and Commercialisation Medtech (CTCM) program to support
development over next 2 years.
• Cash on hand of $24.7 million.
10
11
GROUP RESULTS
Revenue
$’000
Pain Management
Respiratory
Other
Revenue1
Contract termination revenue
Total
2023
20,448
11,720
169
32,337
18,928
51,265
2022
Change $
13,268
8,220
455
21,943
-
21,943
7,180
3,500
(286)
10,394
18,928
29,322
Revenue for the period of $32.3 million was 47.4% higher than the pcp.
Revenue in the Pain Management segment was up 54.1% driven by higher volumes in all markets and improved
pricing, particularly in Australia.
Revenue and in-market volumes in Europe were up 39%, with volume in France up 33% against a challenging
operating backdrop, and volume in the UK and Ireland up 34%, illustrating encouraging growth momentum.
Strongly improved revenue in the 2nd half reflects the recognition of deliveries deferred from the 1st half.
Revenue in Australia was up 30%, reflecting volume growth of 6% and higher prices. Revenue from Rest of World
countries was strongly improved, up 141%, reflecting a significant uplift in volume from inventory stocking for
the relaunch of Penthrox in Canada and growth in Middle East, South Africa and Asia. Milestone income was $0.8
million.
Revenue in the Respiratory segment was up 42.6%, with strong volume growth in all markets, particularly the
USA, supported by market share gains, a higher prevalence of respiratory conditions during winter, and the pass-
through of inflationary impacts in pricing.
Contract termination revenue in the period relates to the termination of agreements for the distribution of
Penthrox in China ($18.5 million), and other countries where revenue opportunities are not being pursued ($0.4
million).
Operating Performance
$’000
Pain Management
Respiratory
Other4
Underlying EBITDA3
Depreciation and amortisation
Underlying EBIT2
Contract termination revenue
Impairment losses - Capitalised registration costs
Commercial Market Assessment Costs
Impairment losses - Veterinary segment
Finalisation of costs for the CSIRO Continuous Flow
technology program
2023
2022
Change $
(9,716)
(7,319)
(2,397)
1,498
1,271
(6,915)
(5,676)
(15,133)
(11,724)
(3,113)
(2,945)
227
(1,239)
(3,409)
(168)
(18,246)
(14,669)
(3,577)
18,928
(6,709)
(1,930)
-
-
-
-
-
(581)
(600)
18,928
(6,709)
(1,930)
581
600
Underlying adjustments
10,289
(1,181)
11,470
Reported EBIT
Net interest expense
Income tax benefit
Net loss after tax
(7,957)
(15,850)
465
1,883
(58)
3,501
7,893
523
(1,618)
(5,609)
(12,407)
6,798
Note: Underlying EBITDA and Underlying EBIT as defined on page 16, are non-IFRS financial measures used by
management to assess the performance of the business. Refer to Note 1.1 of the consolidated financial report for
a reconciliation of Group Underlying EBITDA and Group Underying EBIT by segment.
Net loss after tax was $5.6 million, improved on a loss after tax of $12.4 million in the pcp. Underlying EBIT was
$18.3 million loss, down 24% on the pcp ($14.7 million loss).
Underlying EBIT benefitted from higher volumes in both the Pain Management and Respiratory segments and
higher Penthrox margins, driven by growth in direct market sales and improved pricing. This partly offset costs
relating to the Company’s capability build, including the Australian Penthrox field team, commercial resources in
Respiratory, and leadership and functional resources. These resources are driving the delivery of the Company’s
growth strategy.
Depreciation and amortisation was up $0.2 million on the pcp.
Underlying adjustments were a net $10.3 million gain in the period, including:
• Contract termination revenue arising from the termination of agreements for the distribution of Penthrox in
China ($18.5 million), and other countries where revenue opportunities are not being pursued ($0.4 million).
•
Impairment of capitalised registration costs following the cessation of market activities in China of $5.7
million, and an additional $0.9 million in other countries where revenue opportunities are not being pursued.
There was also a $0.1 million impairment in relation to patents and trademarks.
• Costs to complete a comprehensive assessment of the commercial potential for Penthrox in the US ($1.9
million) which are not of a capital nature.
12
13
Underlying adjustments of $1.2 million loss in the prior period related to:
•
Impairment losses recognised following the Group’s decision to discontinue the Veterinary business ($0.6
million).
• Finalisation costs for the CSIRO Continuous Flow technology program ($0.6 million).
Further detail on revenue and earnings in each of the Group’s operating segments is contained in the Review of
Operations.
Cash Flow
Key Items - $’000
2023
2022
Change $
Net cash flows used in operating activities
(17,061)
(10,777)
Payments for property, plant and equipment
Payments for other intangible assets
Proceeds from the issue of shares (net of costs)
Other cashflows
Net increase / (decrease)
in cash and cash equivalents
(1,784)
(5,881)
28,316
313
3,903
(1,199)
(4,015)
357
(160)
(15,794)
(6,284)
(585)
(1,866)
27,959
473
19,697
Net cash flows used in operating activities
Net cash flows used in operating activities were $17.1 million, $6.3 million higher than the pcp. This reflects
lower EBITDA in the period and investment in working capital of $1.8 million to support sales growth as detailed
below:
Balance Sheet
Key Items - $’000
Cash
Trade and other receivables
Inventories
Prepayments
Property plant & equipment
Intangible assets
Tax assets
Total Assets
$’000
Underlying EBITDA2
Share based payment expense and other non-
cash items
Change in trade and other receivables
Change in inventory
Change in trade and other payables5
Change in trade and other working capital
Change in other assets and liabilities
Income tax received
Interest paid
2023
2022
Change $
(15,133)
(11,724)
(3,409)
Trade and other payables
Employee benefit provisions
Unearned income
Lease liabilities
Total Liabilities
Net Assets
718
(2,870)
(1,842)
2,894
(1,818)
(733)
-
(95)
1,007
(3,342)
(1,374)
2,344
(2,372)
142
2,265
(95)
(289)
472
(468)
550
554
(875)
(2,265)
-
Net cash flows used in operating activities
(17,061)
(10,777)
(6,284)
Commentary relating to the movement in working capital and other assets and liabilities in the period is provided
in the Balance Sheet section.
Net cash flows used in investing activities
Payments for property, plant and equipment were $1.8 million for the period, an increase of $0.6 million versus
the pcp, mostly related to the Company’s manufacturing operations.
Payments for other intangible assets were $5.9 million, mostly related to trials and market registration activities
in the UK, USA and China (China now discontinued) and development of the next generation inhaler (“Selfie”).
Proceeds from the issue of shares (net of costs)
In August 2022 the Company successfully raised $28.4 million net of costs through a fully underwritten placement
and entitlement offer.
2023
24,661
8,932
8,378
791
12,122
38,317
8,112
101,313
14,186
1,070
2,182
2,560
19,998
81,315
2022
Change $
20,398
6,084
7,105
620
11,552
40,687
5,774
92,220
9,368
1,052
21,689
2,813
34,922
57,298
4,263
2,848
1,273
171
570
(2,370)
2,338
9,093
4,818
18
(19,507)
(253)
(14,924)
24,017
14
15
Net change in cash for the year was a $4.3 million increase. In August 2022 the Company undertook a successful
capital raise, which increased cash reserves by approximately $28.4 million. This has been partly offset by
operating and investing activities as detailed in the Cashflow above.
Trade and other receivables increased $2.8 million, reflecting timing of customer deliveries and collections, with
payment for several large deliveries late in FY23 not yet due. Inventories increased $1.3 million, reflecting higher
overall volumes and the trajectory of growth in both the Pain Management and Respiratory segments. Inventory
as a percent of revenue was improved on the prior year.
The decrease in property plant and equipment and intangible assets of $1.8 million includes additions of $8.0
million, offset by depreciation and amortisation of $3.1 million and impairments of $6.7 million.
The increase in trade and other payables of $4.8 million includes $0.8 million for capital accruals, $1.9 million
for a comprehensive assessment of the commercial potential for Penthrox in the US, $0.8 million for contract
termination costs in France following the scale down of investment in light of market conditions, and $1.3 million
increase in trade payables relating to inventory purchases, freight and overall business expansion.
The decrease in unearned income relates to the recognition of $18.9m as income following the termination
of agreements for the distribution of Penthrox in China ($18.5 million), other smaller markets ($0.4 million),
and amortisation of government grants and milestone income in the period. Unearned income of $2.2 million
remaining at the end of the period relates to unamortised income received for the distribution of Penthrox in
Vietnam and Thailand, and Government Grants.
REVIEW OF OPERATIONS
Pain Management
The Pain Management segment is a world leader in the supply of analgesia for acute and procedural pain. The
Company manufactures its world leading inhaled analgesic, Penthrox® (the “Green Whistle”), at manufacturing
facilities at Scoresby and Springvale in Victoria, Australia. Penthrox® is sold into domestic and international
markets through distribution partnerships and direct in-market capability.
Underlying EBIT for the period was a $12.3 million loss. Earnings benefited from higher volumes and improved
margins, with higher pricing and growth in direct sales in France having a positive impact. Costs were higher,
reflecting investment in a field team in Australia to drive penetration in hospital emergency departments, in line
with strategy, and higher marketing costs to support growth.
Respiratory
The Respiratory segment is a leading supplier of respiratory products including asthma and COPD (chronic
obstructive pulmonary disease) space chambers, peak flow meters, portable nebulisers and silicone face masks.
Respiratory supplies into Australia, the USA, Europe and Asia through partnership with leading distributors.
$’000
Revenue1
Underlying EBITDA3
Underlying EBIT2
2023
11,720
1,498
1,250
2022
8,220
1,271
1,036
Change $
3,500
227
214
Revenue for the Respiratory segment was up 42.6% at $11.7 million. A pleasing result that reflects solid market
share gains, particularly in the USA, stronger partner engagement, and improved underlying demand due to an
increased prevalence of respiratory conditions during winter. Pricing was improved, with the pass through of
inflationary impacts.
Underlying EBIT at $1.3m was improved, reflecting the benefit of higher volumes partly offset by higher costs
associated with marketing activity to support growth.
$’000
Revenue1
Underlying EBITDA3
Underlying EBIT2
2023
20,448
2022
Change $
13,268
(9,716)
(7,319)
(12,299)
(9,762)
7,180
(2,397)
(2,537)
Revenue for Pain Management was up 54.1% on the pcp at $20.4 million.
Revenue in Europe was up 39% at $5.5 million, due mostly to higher volumes, with stronger underlying demand.
In-market volumes were up 39%, with growth in all markets despite challenging economic conditions throughout
the period.
Further progress was made in the Company’s strategy to increase penetration of Penthrox in France, with
volumes up 33% at 65,000 units. Momentum was slower than planned, however, impacted by challenging
operating conditions during the period. Several emergency departments were closed in key metropolitan areas
and gaining access to hospitals was difficult.
Against this backdrop, resources in France have been scaled back. Contract termination costs of $0.8 million
associated with withdrawing the field team have been recognised in the period.
Revenue in Australia was up 30% at $9.6 million. Volumes were up 6%, with solid demand from the ambulance
sector, growing penetration in hospital emergency departments and growth in procedural segments, particularly
obstetrics and gynaecology. Pricing was strongly improved. During the period, recruitment of an in-market field
team was completed, and a new Penthrox creative campaign was launched. Both initiatives will underpin future
growth beyond the ambulance sector, with a focus on penetrating hospital emergency departments.
Revenue from Rest of World markets was up 141% at $4.6 million, driven by a significant volume uplift from
inventory stocking for the relaunch of Penthrox in Canada, and growth in the Middle East, South Africa and Asia.
16
17
BUSINESS STRATEGY
The Company’s nearer term strategic focus is to
increase the penetration of Penthrox in existing
markets, and to continue to grow its Respiratory
segment through market share gains, particularly
in the USA. Longer term, the Çompany seeks to
enter new and attractive markets for Penthrox, with
particular focus on the USA.
Execution of strategy in FY23
The Company has made solid progress delivering
strategy in FY23. Key outcomes include:
• A field team was deployed in Australia to increase
the penetration of Penthrox in hospital emergency
departments.
• Strong partner engagement delivered encouraging
momentum in partner markets, including the
relaunch of Penthrox in Canada.
• Spend in France was scaled back in light of
challenging operating conditions, reflecting the
Company’s disciplined management of cash.
• The paediatric trial in the UK was closed, with
regulatory submission expected in Q3 FY24. A
favourable outcome will expand the label for
Penthrox in Europe.
• Clinical trial preparations in China were
discontinued, preserving cash and enabling
greater focus on key growth opportunities in
Australia, Europe and the USA; and
• US market entry planning was advanced.
A comprehensive market assessment was
completed, which identified in-market revenue
potential of US$300-$400 million for Penthrox
in the US (5 years post launch). The Company
announced it would seek funding for market entry
through one or more partner organisations. An
experienced adviser has been retained to support
the partner search. Planning for the clinical
program progressed.
FY24 priorities
The Company will continue to drive strong momentum
toward positive operating cashflow in FY25. Key
priorities for FY24 include:
•
•
Improve margins through pricing and operational
efficiency.
Increase penetration of Penthrox in Australian
hospital emergency departments.
• Complete a reassessment of the go-to-market
strategy in France.
• Progress a partner search and finalise clinical
pathway for US market entry.
• Drive continued growth in Respiratory.
OUTLOOK
FY24 underlying EBIT
The Company expects underlying EBIT in FY24 to
improve on the prior year, driven by:
• Higher Penthrox volumes in Australian hospital
emergency departments;
• Share growth in the Respiratory segment; and
•
Incremental margin improvements of $6 million
from pricing and efficiency.
FY24 capital expenditure
Capital expenditure in FY24 (including spend on trials
and market registration activity) is expected to reduce
to around $5 million.
OTHER EVENTS OF
SIGNIFICANCE
There has not been any matter or circumstance that
has arisen that has significantly affected, or may
significantly affect the operations of the Group, the
results of those operations, or the state of affairs of the
Group in future years.
NOTES
(1) Revenue excludes Contract termination revenue
arising from the termination of agreements for the
distribution of Penthrox in China ($18.5 million),
and other countries where revenue opportunities
are not being pursued ($0.4 million).
(2) Underlying EBIT is a non-IFRS financial measure
which is calculated as earnings before finance
costs, net of interest income, tax and underlying
adjustments.
(3) Underlying EBITDA is a non-IFRS financial
measure which is calculated as Earnings before
finance costs, net of interest income, tax,
depreciation and amortisation and underlying
adjustments.
(4) Other comprises the Veterinary business which
was discontinued during the 2022 financial year
as well as unallocated costs associated with
corporate overheads.
(5) EBITDA in the Net cash flows used in operating
activities table on page 12 excludes underlying
adjustments which did not impact cash from
operations in the period. The payable relating to
a comprehensive assessment of the commercial
potential for Penthrox in the US of $1.9 million has
therefore been excluded from the change in trade
and other payables.
BUSINESS RISKS
Risk recognition and management are considered by
the Company as integral to its objectives of creating
and maintaining shareholder value, and execution of
the Company’s strategy. Effective risk management
is key to operational activities and decision-making,
strategic planning, resource allocation, compliance,
accountability and good governance.
The Company operates in a constantly evolving
environment of science, regulation and healthcare.
We are exposed to risks inherent in the global
pharmaceutical and medical devices industry, which
include research and development, supply chain and
intellectual property.
The Company actively manages a range of risks with
the potential to have a material impact on the Group
and its ability to achieve its objectives. During the
reporting period, the Company refreshed its risk
management framework. It undertook an enterprise
wide risk profiling process to identify risks and
opportunities in respect of the Group’s objectives.
Several risks specific to the operations and objectives
of the Company were identified, each of which is
subject to ongoing risk management across the Group.
The identified risks, which are common to companies
in the pharmaceutical and medical device industries,
have been prioritised by the Company in order of risk
and opportunity impact. These risks, which include
global trends, have also formed the basis of response
planning developed during the period.
While every effort is made to identify and manage
material risks, additional risks not currently known
or detailed below may also adversely affect future
performance. The Company’s principal risks, and an
explanation of our approach to managing them are
outlined below, not in any particular order.
Product quality
The Company’s products must meet a wide range
of regulatory requirements aimed are ensuring the
quality and efficacy of its products and the safety of
patients. The Company’s financial performance and
reputation could be adversely impacted if quality
requirements are not met.
In managing this risk, the Company’s manufacturing,
product quality assurance and pharmacovigilance
practices serve to deliver the highest standards of
safety and the preservation of our reputation. We
adopt and comply with a broad suite of internationally
recognised standards through our quality management
system, including good manufacturing practice
(GMP), good distribution practice (GDP) and audits
of third-party vendors and suppliers. Our processes
and procedures also meet good pharmacovigilance
practice (GPV) and we seek to ensure that product
information is up-to-date and contains all relevant
information to assist customers and healthcare
practitioners to use our products. We are frequently
inspected by independent regulatory authorities,
auditing compliance with these standards.
Successful commercialisation
The Company’s financial performance is dependent on
its ability to develop and successfully commercialise
our products. The Company will need to manage and
optimally develop its operating model to support
a global expansion. Successful commercialisation
includes obtaining regulatory approvals, successful
product launches into new markets, the ability to
identify and onboard promotional partners, ability to
use its products in a broader range of approved uses
and maintaining adequate pricing for products. The
Company faces risks in respect of its key product,
Penthrox, including the ability of the Company to drive
market growth and market penetration in key markets.
The Company implements short, medium and long
term strategy and near term objectives that are
reviewed at least annually. Where appropriate the
Company has considered a different operating model
considering commercialisation challenges, particularly
for key markets such as the US. The Company has
strengthened its commercialisation prowess via a
dedicated commercial business unit and global team.
The Company also manages commercialisation of new
products or launch in new markets through a cross-
functional sales and operations planning team that
meet at least monthly.
Financial risk
In addition to the financial impact arising from
commercialisation risk, there are a variety of risks
arising from the unpredictability of financial markets,
including the cost and availability of funds to meet
business needs and movements in market risks such as
foreign exchange rates.
The Company implements financial risk management
practices by managing exposure to financial risks
including internal controls and cash flow management.
Research & development
A potential impediment to delivery on the Company’s
strategic objectives is the ability to successfully
achieve capital projects to develop a product pipeline,
in particular development of the Company’s next
generation Penthrox device.
To manage this risk, the Company has a dedicated
Research & Development function and the Company
closely monitors progress of development activities.
The Company also dedicates resources to intellectual
property protection.
18
19
security control environment to prevent significant
organisational loss of systems, intellectual property
and clinical data, damage to reputation and/or
disruption to business. To manage this risk, the
Company has focused on cyber security training,
enhanced back up procedures, improved firewall and
screening mechanisms and will engage a third party
during FY24 to advise on key risk areas.
Supply chain
Having a sustainable and reliable supply chain is
critical to the success of the Company’s objectives,
particularly to achieving a consistent, economical,
and efficient supply of its products. The Company is
reliant on third parties for the manufacture and supply
of a substantial portion of its products. Disruptions
to that supply chain, caused by an interruption to
the availability of a key material or component, may
result in unexpected disruption or interruption to our
products. Increases in the costs of raw materials or
other commodities may adversely affect the Company’s
profit margins if higher costs cannot be passed on in
the form of price increases or unless the Company can
achieve further cost efficiencies in its manufacturing
and distribution processes.
The Company constantly monitors inventory and
demand, maintains critical stock levels and seeks,
where possible, to identify alternate sources of supply.
Supply of materials were impacted by COVID, requiring
the Company to implement risk mitigations, including
increased ordering lead times and increased inventory
holdings. Proactive supplier management and
supplier audits are also important components of the
Company’s risk mitigation.
Regulatory and legislative risk
The Group operates under a broad range of legal,
regulatory and tax systems. The Company’s financial
strength may be impacted by specific regulatory
regimes, changes in regulatory regimes, difficulty
interpreting or complying with laws. Changes in laws
and regulations, including their interpretation or
enforcement, could affect, the Company’s business
or products. For example, changes in reimbursement
or accounting standards, tax laws and regulations,
environmental or climate change laws, restrictions or
requirements related to product content, labelling and
packaging.
In managing this risk, the Group has a product
regulatory compliance framework and a dedicated
Regulatory team with inhouse expertise. The Company
has developed and seeks to continuously improve
its broader regulatory compliance framework. The
Company is also actively risk managing the impact
of clinical change regulation and potential impact on
the supply chain of raw materials. The Group has also
appointed a lawyer to support the Company. Group
legal counsel ensures all personnel have the requisite
technical qualifications to perform in their role, and
where required, seeks support from third-party
advisers with requisite skills and experience.
Cyber risk
Increasing sophistication of external attackers
demands an effective and up-to-date cyber
20
21
Financial Reports
Introduction
This is the Consolidated Financial Report of Medical
Developments International Ltd (“MVP” or the
“Company”) and its subsidiaries (together referred
to as the “Group”) for the year ended 30 June 2023.
This Consolidated Financial Report was issued in
accordance with a resolution of the Directors on 31
August 2023.
Information is only included in Consolidated Financial
Report to the extent the Directors consider it material
and relevant to the understanding of the financial
statements. A disclosure is considered material and
relevant if, for example:
•
•
•
•
the dollar amount is significant in size and / or by
nature;
the Group’s results cannot be understood without
the specific disclosure;
it is critical to allow a user to understand the impact
of significant changes in the Group’s business
during the year; and
it relates to an aspect of the Group’s operations
that is important to its future performance.
Preparing this consolidated financial report requires
management to make a number of judgements,
estimates and assumptions to apply the Group’s
accounting policies. Actual results may differ from
these judgements and estimates under different
assumptions and conditions and may materially affect
the financial results or the financial position reported
in future periods. Key judgements and estimates,
which are material to this report, are highlighted in the
following notes:
• Note 1.3 Deferred tax assets
• Note 2.3 Property, plant and equipment
• Note 2.3 Goodwill and other intangibles
• Note 3.4 Going concern
To assist in identifying key accounting estimates and
judgements, they have been highlighted as follows:
Contents
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Section 1: Performance
1.1
Group results
1.2
Revenue from contracts with customers
1.3
Taxation
1.4
Dividends
Section 2: Operating Assets and Liabilities
2.1 Working capital
2.2
Unearned income
2.3
Non-current assets
2.4
Commitments and contingencies
2.5
Leases
Section 3: Capital Structure
3.1
Net cash
3.2
Contributed equity and reserves
3.3
Capital management
3.4
Going concern
3.5 Managing our financial risks
Section 4: Remunerating Our People
4.1
Employee benefits
4.2
Share based payments
4.3
Key management personnel
Section 5: Other Disclosures
5.1
Basis of preparation
5.2
Related parties disclosure
5.3
Parent entity financial information
5.4
Controlled entities
5.5
Auditor’s remuneration
5.6
Segment assets and segment liabilities
5.7
Subsequent events
Director’s Declaration
22
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45
51
52
53
54
55
55
57
58
60
61
63
63
71
71
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23
DIRECTORS’ REPORT
The Directors of Medical Developments International Limited (“MVP” or the “Company”) herewith submit the
annual financial report of the Company and the entities it controlled (“Group”) for the financial year ended 30
June 2023.
Directors
The following persons were Directors of the Company from their date of appointment up to the date of this
report:
Non-Executive
Mr G Naylor
BE (Hons), DipCompSc, MBA, CPA, GAICD, FTSE, MIE(Aust)
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, and was Chair of the Human Resources Committee from 1 September 2021 to 19
April 2022 and remains a member of the Committee.
Public company directorships in the past 3 years
Orica Limited (since 1 April 2022)
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 the board of Australia’s peak medical device industry body,
Medical Technology Association of Australia. Mr Hoare is also the chair of the Human Resources Committee.
Public company directorships in the past 3 years
Polynovo Limited since 27 January 2016
Ms C Emmanuel-Donnelly
B.Sci (Hons), M. ENT, FIPTA, MAICD
Non-Executive Director (since 26 May 2020)
Ms Emmanuel-Donnelly is an experienced IP and business development professional having 35 years’ experience
locally and internationally. Ms Emmanuel-Donnelly is a former Executive Manager of Business Development and
Commercial at the CSIRO, where she led the management of CSIRO’s IP team and IP portfolio for 14 years and
managed the CSIRO equity portfolio for over 5 years. Prior to this role, Ms Emmanuel-Donnelly was in-house IP
Counsel for Unilever in the UK and practised as a patent and trademark attorney for Wilson Gunn (UK), Davies
Collison Cave and Griffith Hack in Melbourne. Christine is also currently non-executive director of Polynovo Ltd,
Pikcha Holdings Ltd, trading as Seminal, and on the Life Sciences Council of SBE Australia. She was previously
Vice President of the Institute of Patent & Trademarks Attorneys of Australia for over 2 years, having been on the
Board since 2010.
Public company directorships in the past 3 years
Polynovo Limited since 13 May 2020
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.
Public company directorships in the past 3 years
IDT Australia Limited from 1 March 2017 to 16 November 2021
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 Chief Financial Officer at Ridley Corporation Limited and was previously Chief Financial Officer at Pact
Group Holdings Ltd for 6 years. Prior to that he held executive finance and general management 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. Mr Betts is Chair of the Audit and Risk Committee.
Company Secretary
Ms T Eaton
Company Secretary (since 8 August 2022)
Ms Tara Eaton is an experienced General Counsel. Her previous roles include General Counsel at the Australian
Red Cross, and prior to that more than ten years in the pharmaceutical industry. This included three years as
Legal and Compliance Director at Gilead Sciences ANZ, and more than seven years as Legal Director at Merck &
Co. Tara brings an impressive record of working with public and private stakeholders alike, pricing and business
development transactions, and developing and managing compliance and risk frameworks. Tara also spent 5
years as a lawyer with Minter Ellison and Clayton Utz.
24
25
PRINCIPAL ACTIVITIES
MVP delivers emergency medical solutions dedicated
to improving patient outcomes in both domestic and
international markets. The Company manufactures
and distributes Penthrox®, a fast acting trauma and
emergency pain relief product, used in hospital
emergency departments, ambulance services, sports
medicine and for analgesia during short surgical
procedures. MVP also distributes a range of respiratory
devices for sufferers of asthma and COPD (chronic
obstructive pulmonary disease).
REVIEW OF OPERATIONS
AND FINANCIAL
PERFORMANCE
A review of the operations and financial performance
of the Group during the year and of the results of those
operations is contained on pages 8 to 18.
CHANGES IN STATE OF
AFFAIRS
Other than as discussed in the review of operations
and financial performance contained on pages 8 to 18,
there was no significant change in the state of affairs of
the Group during the year.
SIGNIFICANT EVENTS
AFTER BALANCE DATE
There has not been any matter or circumstance that
has arisen that has significantly affected, or may
significantly affect the operations of the Group, the
results of those operations, or the state of affairs of the
Group in future years.
FUTURE DEVELOPMENTS
Information regarding likely developments in the
operations of the Group in future financial years
is set out in the review of operations and financial
performance contained on pages 8 to 18 and
elsewhere in the Annual Report.
ENVIRONMENTAL
REGULATIONS
The Group’s operations are not subject to any particular
and significant environmental regulation. The Group
has not incurred any significant liabilities under any
environmental legislation during the financial year.
ENVIRONMENTAL, SOCIAL
AND GOVERNANCE (ESG)
During the year, the Group established an internal
project team to undertake a readiness assessment of
what the ESG roadmap will look like over the next 3
years. This will be supported by external subject matter
specialists. The project will commence in the first half
of FY24. Key objectives of the project are to develop
and prioritise high-level initiatives pertaining to the
Group’s ESG strategy, and compliance with evolving
regulatory requirements.
DIVIDENDS
No dividends were declared in respect of the current
period. No dividends were declared in respect of the
previous corresponding period.
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.
PROCEEDINGS ON BEHALF
OF THE COMPANY
No person has applied to the court under section 237
of the Act for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to
which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part
of those proceedings.
No proceedings have been brought or intervened in on
behalf of the Company with the leave of the court under
section 237 of the Act.
DIRECTORS’ MEETINGS
The following 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).
Board of Directors1
Audit & Risk Commitee
Human Resources
Commitee
Continuous Disclosure
Committee2
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Mr G Naylor
Mr L Hoare
Ms C Emmanuel-Donnelly
Ms M Sontrop
Mr R Betts
Former Directors
Mr D J Williams3
Mr R M Johnston4
13
13
13
13
13
10
6
13
12
13
10
13
8
6
nm
nm
4
4
4
nm
1
nm
nm
4
4
4
nm
1
8
8
nm
6
nm
nm
3
8
8
nm
6
nm
nm
3
1
nm
nm
nm
1
nm
nm
1
nm
nm
nm
1
nm
nm
Includes 4 extraordinary meetings. All Directors attended all 9 scheduled ordinary meetings.
nm - not a member of the relevant committee
1.
2. The Continuous Disclosure Committee was formed in June 2023
3. Mr D J Williams resigned as a Non-Executive Director on 26 April 2023
4. Mr R M Johnston resigned as a Non-Executive Director on 27 October 2022
DIRECTORS’ SHAREHOLDINGS
The following table sets out each director’s relevant interest in shares at the date of this report.
Mr G Naylor
Mr L Hoare
Ms C Emmanuel-Donnelly
Ms M Sontrop
Mr R Betts
Relevant interest in
Ordinary shares
Options over shares
894,573
105,502
62,005
56,475
20,591
23,383
9,504
16,435
784
8,032
1,057,027
140,257
Directors hold 140,257 options over shares as at 30 June 2023 (2022: Nil).
26
27
Remuneration in FY24
Building on the FY23 work, a major change to the CEO’s compensation structure was agreed to take effect for
FY24, subject in part to shareholder approval. The principal objective of the change was to align the CEO’s
compensation more strongly with the interests of shareholders and increase the CEO’s share ownership. The
changes align the “at risk components” of the CEO’s remuneration package (short term and long term incentive
arrangements) with the structures in place for the rest of the executive team, and expectations of shareholders.
No changes were made to the CEO’s fixed annual remuneration.
The new structure, detailed in section 3 below, in summary includes:
• An increase in the CEO’s short term incentive potential from 20% payable in cash to 35% payable in cash and
shares, with STI rules consistent with those applying to other senior executives.
• Subject to shareholder approval, an invitation to participate in the LTI, introduced in FY23 for other senior
executives, with an opportunity of 50% of FAR from FY24. Participation in the LTI will require forfeiture of
options granted under the CEO options program, and approval by shareholders of that forfeiture.
• Termination benefits that align with Corporations Act requirements.
• Contractual terms that are consistent with the language used for other senior executives.
In transitioning to the new arrangement, the Group will purchase on market shares for the CEO, equivalent
in value to the CEO’s FY23 STI ($109,725). These shares will be subject to a 1 year holding lock. The CEO has
volunteered to purchase additional shares in the Company equivalent in value to the after-tax proceeds of his
FY23 STI.
We are confident that these changes considerably strengthen the Company and are in the interests of the
shareholders.
Leon Hoare
Chair of Human Resources Committee
31 August 2023
AUDITED REMUNERATION REPORT
This Remuneration Report forms part of the Directors’ Report.
MESSAGE FROM THE HUMAN RESOURCES COMMITTEE (HRC)
On behalf of the Board of Directors, I am pleased to present MVP’s Remuneration Report for the year ended 30
June 2023 (FY23).
The Year in Review
Under the leadership of Chief Executive Officer (CEO) Brent MacGregor, the Group delivered the following
operational achievements:
• Group revenue growth of 47% driven by improved volumes and higher pricing.
• Expansion of Penthrox into Australian hospital emergency departments.
• Strong growth for Penthrox in key partner markets.
• Spend in France scaled back in light of market conditions.
• Market share gains in the Respiratory segment.
• Discontinuation of clinical trials in China.
• Closure of the UK paediatric trial; submission expected Q3 FY24.
• Funding award of $1.5 million to support development of the next generation inhaler (“Selfie”).
• Advancement of US market entry, including the commencement of a partner search to fund the market entry
program.
FY23 Executive remuneration outcomes
The CEO performed well for the year. Performance against target for most objectives approved by the Board
at the start of the performance year was in line with or above expectation, with the exception being delivery of
agreed growth outcomes in France. Delivery of the financial target, measured in terms of Underlying EBIT, was
in line with expectation. In recognition of the outcomes achieved in the year, the CEO was awarded 100% of his
target short term incentive.
The Chief Financial Officer (CFO) Anita James was awarded a short term incentive equal to 100% of target,
recognising the Company’s achievement of the financial target, and performance in her role.
A fixed remuneration adjustment of 5% was provided for the CEO, effective 1 September 2022, reflecting inflation
and performance in FY22.
Executive remuneration changes in FY23
As foreshadowed in the FY22 report, the HRC has overseen a major overhaul of the executive compensation
system to more strongly align company executive remuneration practices with the delivery of long-term strategy
and shareholder interests.
This includes a new short-term incentive plan (STI), which rewards employees on the delivery of both individual
objectives and overall business performance. In addition, a new long term incentive plan (LTI) is linked to the
achievement of share price growth over three years. These plans replaced all historic plans and were effective
for FY23. They were offered to the CFO and select senior managers (excluding the CEO). The key terms and
conditions of the STI and the LTI are set out in section 3 below.
Key Management Personnel (KMP) changes during FY23
The following changes to Non-Executive KMP took place during the current year:
•
•
Mr R M Johnston resigned as a non-Executive Director on 27 October 2022
Mr D J Williams resigned as a non-Executive Director on 26 April 2023
There were no changes to Executive KMP during the year.
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29
AUDITED REMUNERATION REPORT
CONTENTS
1. Key Management Personnel (KMP)
2. Executive remuneration framework
3. Executive remuneration structure
4. Executive remuneration outcomes
5. Business performance
6. Statutory remuneration tables
7. Equity holdings of the KMP
8. Governance
This Remuneration Report for the year ended 30 June 2023 outlines the remuneration arrangements of the Group
in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information
has been audited as required by section 308(3C) of the Act.
1. Key Management Personnel (KMP)
The Remuneration Report details the remuneration arrangements of KMP who are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Company and
the Group, directly or indirectly, including any director (whether executive or otherwise) of the Company.
For the purposes of this report, the term KMP includes the CEO, the CFO, and all Non-Executive Directors of the
Board.
Position
Term as KMP in 2023
CEO
CFO
Non-Executive Directors (NEDs)
Mr G Naylor
Mr L Hoare
Non-Executive Chair
Non-Executive Director
Ms C Emmanuel-Donnelly
Non-Executive Director
Non-Executive Director
Non-Executive Director
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
Name
Executive KMP
Mr B MacGregor
Ms A James
Ms M Sontrop
Mr R Betts
Former KMP
Mr D J Williams
Mr R M Johnston
Former Non-Executive Director
Resigned 26 April 2023
Former Non-Executive Director
Resigned 27 October 2022
There were no other changes to KMP after the reporting date and before the date the financial report was
authorised for issue.
Executive KMP employment contracts
Remuneration and other terms of employment for the CEO and CFO are formalised in employment contracts. The
material terms of the employment contracts for the Executive KMP are summarised in the table below.
CEO Contractual terms
Conditions
Duration of contract
Permanent full time employment contract until notice given by either party
Notice period
Six months’ notice by either party
Termination clauses
From 1 July 2023 the termination clause has been amended to 12 months annual
base salary averaged over the last 3 years.
CFO Contractual terms
Conditions
Duration of contract
Permanent full time employment contract until notice given by either party
Notice period
Three months’ notice by either party
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31
3. Executive remuneration structure
Detailed components of the remuneration structure are outlined below.
Annual Remuneration
Fixed Annual Remuneration (FAR) comprising of cash salary and superannuation benefits.
Payment vehicle
Other benefits, including travel and tax advice allowances, long service leave benefits and fringe benefits
tax (FBT) benefits.
Short term incentives
Payment vehicle
CFO: cash and shares
CEO (FY23): cash (FY24: cash and shares)
CEO (FY23): at target 20% of base salary payable in cash
Opportunity
CEO (FY24): at target 35% of FAR (maximum opportunity of 45.5%), 50% payable in
cash and 50% as fully paid shares)
CFO: at target 30% of FAR (maximum opportunity of 39%), 50% payable in cash and
50% as fully paid shares.
Performance
measures
STI (equity
component)
Achievement of the group financial targets and business objectives. Business
objectives include organic business growth, developing and executing a plan for
entry into the US market, delivering milestones on other strategic projects, and
building a high-performance culture.
Payable in fully paid ordinary MVP shares. The number of shares allocated is
determined by dividing the amount payable in equity by the VWAP of MVP shares
traded in the 5 trading days following announcement of the Company’s full year
results. The shares are subject to a one year holding lock.
2. Executive remuneration framework
The Company’s remuneration framework seeks to appropriately reward, incentivise and retain senior executives
in alignment with the interests of shareholders. The remuneration framework includes traditional fixed annual
remuneration components (including base salary, superannuation and other benefits), a STI and a LTI.
The remuneration framework for the Company is detailed below for FY23. Note that changes are anticipated for
FY24, and these are also detailed below.
Executive Remuneration Framework
Designed to drive Group Strategy and ensure that the interests of senior executives are
aligned with those of shareholders.
Governing principles of the remuneration framework
Aligns with the Group’s
purpose, culture and
strategy
Attracts, retains and
motivates capable talent
Complies with the
Group’s performance
and risk management
framework
Creation of shareholder
value
Reward framework components
Annual remuneration
Short term incentive at
risk
Long term incentive at risk
Cash salary, superannuation and other
benefits, that are reviewed on an annual
basis.
Competitively set to reward, incentivise
and retain senior executives, reflecting
the role scope and accountabilities.
Determined based on market
benchmarking, individual and
business unit performance and overall
performance of the Group.
At risk annual rewards,
entitlement to which is
determined by the achievement
of financial and individual
goals against targets. These
rewards align remuneration
with the achievement of short-
term strategic objectives and
financial performance.
The STI is measured as a %
of base salary or fixed annual
remuneration (the target), with
payment range between 0%
and 130% of target.
To strengthen alignment with
shareholders, the STI is paid
in cash and equity (50/50) for
senior executive participants,
with the equity component
subject to a 1 year holding lock.
The CEO will join this STI in
FY24.
At risk rewards, entitlement to which is based
on the delivery of agreed shareholder returns
over an extended period. These rewards align
executive remuneration with delivery of long-
term strategy and the creation of shareholder
wealth.
The Company introduced the LTI in FY23
for select senior executives which includes
provision for the allocation of performance rights
which vest as fully paid ordinary shares on the
achievement of agreed shareholder returns over
a 3-year period.
It is anticipated that the CEO will join the LTI
in FY24 and forfeit options received under the
CEO options program (subject to shareholder
approval).
The CEO’s options program consists of a one-off
allocation of options granted to the CEO at the
time of his employment in FY21. No options
granted under this program have vested.
Executive remuneration mix
If proposed changes to the CEO’s remuneration are approved by shareholders, the target remuneration mix
of the above framework components (assuming short term incentives at target and the face value of long
term incentives) in FY24 would be as follows:
CEO
CFO
54%
67%
9%
9%
28%
10%
10%
13%
Fixed Remuneration
STI cash
STI equity
LTI
The Directors believe that this mix aligns rewards with the interests of our shareholders and drives performance
against short term and long term business objectives.
32
Long-term incentives
LTI
Overview
The plan consists of performance rights granted annually (for the first time in FY23). Under the plan,
performance rights were granted to the CFO and select senior executives. Where relevant, all participants
holding prior LTI incentives have agreed to forfeit them and have transferred to the new LTI. Details in
relation to performance hurdles, vesting conditions and other terms and conditions are outlined below.
Overview
33
CEO Options Program
The CEO commenced employment with the Company on 1 November 2020. As part of his remuneration, to
encourage his long-term commitment to the business, he was invited to participate in a long-term incentive
plan. Under this plan a sign on allocation (not an annual allocation) of 1,968,704 options over ordinary
shares was granted to the CEO. All options have a nil exercise price and no entitlement to dividends over the
vesting period.
Subject to shareholder approval it is anticipated that the CEO will join the LTI in FY24, and forfeit all options
received under the CEO options program.
Performance
hurdle
The options are subject to a share price target which commences at the grant date of the option. Following
the achievement of the share price target, the 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, for example, if the share price hurdle is
met 4.5 years after grant, the options will vest at the 5th anniversary.
The option issue was 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)
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
Holding lock
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.
FAR
X
Individual
target %
=
LTI
participation ÷
Fair Value of each
Performance Right
= Performance Rights
granted to KMP
Vesting table
CFO: Maximum opportunity equivalent to 20% of FAR
Opportunity
Senior Executives: Maximum opportunity ranging between the equivalent of 15-20% of FAR.
CEO (from FY24): Maximum opportunity equivalent to 50% of FAR (subject to shareholder approval).
Instrument
Performance rights
Performance
period
The performance period commences on the first day of the current fiscal year and is measured over a three-
year vesting period. The first testing period will be for the year ended 30 June 2025.
The number of performance rights allocated to each KMP is based on the following:
Allocation
approach
Performance
hurdle
The fair value of each right reflects the expected value of each right to the participant today, taking into
consideration the current share price, the performance hurdle (minimum 33% share price growth), vesting
conditions and the probability of various share price outcomes at the end of the performance period. The fair
valuation has been performed by an independent valuer.
Vesting of rights is subject to achieving volume weighted average share price (VWAP) growth targets over a
three-year performance period.
LTI Vesting Schedule
VWAP share price growth at exactly 33%
Vesting %
0%
VWAP share price growth between 33% and 100%
Straight line vesting on a pro rata basis
VWAP share price growth at 100% or above
100%
If no dividends are paid over the 3 year vesting period the minimum performance hurdle would be equivalent
to delivering total shareholder return of 33%. Target performance would be equivalent to total shareholder
return of 100%.
Share price growth for the FY23 grant will be measured from a baseline share price of $1.72, being the
VWAP of shares traded in MVP for the 20-day trading period that commenced 5 trading days after the
announcement of MVP’s FY22 full year results. The share price testing will take place at the end of the three-
year vesting period and will be based on the VWAP of shares traded in MVP for the 20-day trading period
commencing 5 trading days after the results announcement in the final year of the vesting period. Testing
occurs only once, following the year ended 30 June 2025.
Cessation of
Employment
If an executive resigns or is terminated for cause, any unvested LTI awards will be forfeited, unless
otherwise determined by the Board. Any such performance rights will be subject to the original terms and
conditions, and the discretion of the Board.
Rights attaching
to performance
rights
Malus and
Clawback
Performance rights do not carry any dividend or voting entitlements prior to vesting, or priority over any
creditors of MVP upon liquidation or winding up of MVP. Shares allocated upon vesting of performance rights
will carry the same rights as other ordinary shares.
At the discretion of the Board LTI awards will be forfeited where there has been any fraud, dishonesty, or
breach of obligations of the Group policies or codes of conduct.
Change of Control
Provisions
In the event of change of control, or a scheme of arrangement, selective capital reduction or other
transaction is initiated which has an effect similar to a full takeover bid for shares in the Company, then
participants are entitled to accept the takeover bid or participate in the other transaction in respect of all or
part of their awards other than exempt share awards notwithstanding that the restriction period in respect of
such awards has not expired. The Board may waive any vesting conditions at their discretion.
34
35
4. Executive remuneration outcomes
Actual remuneration received
The table below shows the remuneration the Executive KMP actually received for FY23 (paid in cash or accrued),
or in the case of equity awards, the value that vested in FY23. This table differs from the statutory table included
in section 6, in that the table below excludes remuneration from unvested share based payments. The Directors
believe this information is helpful to shareholders.
Fixed annual
remuneration
STI (cash)
STI (equity)
$
$
109,725
$
-
Other
Benefits
$
Total
$
47,345
758,489
56,054
56,053
560
486,358
Mr B MacGregor
Ms A James
601,419
373,691
STI outcomes
STI awards are measured on the delivery of financial and business objectives approved by the Board at the start
of the financial year with clear alignment to strategy.
For FY23, the financial objective (EBIT) was delivered in line with expectations. In determining delivery of the
EBIT objective, the Board excluded earnings adjustments relating to China in the period.
Business objectiv es for FY23 included delivering organic business growth, developing and executing a plan for
entry into the US market, delivering milestones on other strategic projects, and building a high-performance
culture. Specific disclosure of these objectives, target milestones and achieved outcomes are not included in this
report due to commercial sensitivity.
Performance against target for the CEO for most business objectives was in line with or above expectation, with
the exception being delivery of agreed growth outcomes in France. Performance of the CFO was in line with
expectations.
The tables below include details of the KMP STI outcomes during the current year.
Mr B MacGregor
Ms A James
STI Target
opportunity
STI earned
% of target
STI forfeited
% of target
$109,725
$112,107
100%
100%
-
-
STI Paid
$109,725
$112,107
The STI for Ms James is payable in cash 50%; and 50% as fully paid shares.
LTI outcomes
LTI
The table below outlines key details in relation to performance rights granted to KMP during the current year,
and associated remuneration for KMP during FY23. The FY23 LTI has a vesting period of 3 years, the first testing
period will be for the year ended 30 June 2025.
Grant Date
Performance rights
Granted
Fair value of rights
at grant date
Value of rights
included in
compensation for the
year(1)
Performance period
Ms James
FY23 LTI
22 December 2022
84,930
$57,752
$19,251
1 July 2022 to 30
June 2025
CEO options program
Mr MacGregor has share based remuneration of $1,183,396 in the current year, representing the amortisation of
the grant date fair value of the options over the vesting period. Subject to shareholder approval it is anticipated
that the CEO will join the LTI in FY24. All options granted under the CEO option program will be forfeited. Refer to
section 3 for the terms and conditions of the options program.
5. Business performance
The table below summarises key indicators of the performance of the Company and relevant shareholder returns
over the past 5 financial years. Key highlights during the current year have been outlined in the Message from the
HRC on page 26.
Performance measure
2019
2020
2021
2022
2023
Revenue ($000s)1
Revenue growth %
Underlying EBITDA (000’s)
Underlying EBIT (000’s)3
Reported EBIT (000’s)
Statutory net profit / (loss) after tax
($000’s)
Share price at end of period
Total dividends (cps)
Basic earnings / (loss) per share (cps)
20,876
22,535
16,3292
21,943
32,3372
19.6%
7.9%
(27.5%)
34.4%
47.0%
3,441
1,174
1,174
1,038
$5.30
4.00
1.61
2,695
(6,372)
(11,724)
(15,133)
98
98
(10,121)
(14,669)
(18,246)
(14,928)
(15,850)
(7,957)
379
(12,565)
(12,407)
(5,609)
$6.98
$4.50
$1.46
$0.78
2.00
-
-
-
0.58
(18.35)
(17.41)
(6.66)
(1) Revenue and commentary on performance has been included in the Review of Operations and Financial
Performance.
(2) Excludes contract termination revenue in FY21 of $8.9 million arising from the termination of the European
distribution rights for Penthrox previously held by Mundipharma. Excludes contract termination revenue of
$18.9 million in FY23 arising from the termination of agreements for the distribution of Penthrox in China
($18.5 million), and other countries where revenue opportunities are not being pursued ($0.4 million).
(3) Underlying EBIT and commentary on performance has been included in the Review of Operations and
Financial Performance.
36
37
6. Statutory remuneration tables
Executive KMP statutory remuneration
The table below summarises remuneration to Executive KMP.
Executive KMP
Year
Short-term benefits
Long-term
benefits
Share based
payments
Post employment benefits
Total
Remuneration
linked to
performance
Base salary
STI (cash)
Other benefits(1)
Long Service
leave(2)
STI & LTI
Superannuation
Termination
payments
Mr B MacGregor
Ms A James
Former Executive KMP
Mr M Edwards
(Resigned 27 May 2022)
Total Executive
KMP remuneration
2023
2022
2023
2022
2023
2022
2023
2022
$
576,127
547,057
338,182
43,790
-
205,325
914,309
796,172
$
109,725
154,500
56,054
-
-
10,950
165,779
165,450
$
45,940
80,195
-
-
-
-
45,940
80,195
$
1,405
1,645
560
-
-
6,680
1,965
8,325
$
1,183,396(3)
1,183,396
75,304(4)(5)
-
-
(155,490)
1,258,700
1,027,906
$
25,292
23,568
35,509
4,379
-
21,526
60,801
49,473
$
-
-
-
-
-
$
1,941,885
1,990,361
505,609
48,169
-
%
67%
67%
26%
-
-
113,850
202,841
3%
-
113,850
2,447,494
2,241,371
(1) Other benefits include allowances for travel and reimbursement for tax advice for Mr MacGregor, inclusive of
FBT payable by the Company on these benefits.
(2) Represents the movement in the long service leave provision during the current period.
(3) Represents the amortisation of the grant date fair value of options granted to Mr MacGregor in November
2020. The valuation was performed by an independent valuer, and the expense was recognised in the FY23
statement of profit or loss and other comprehensive income over the relevant vesting period in accordance
with AASB2 Share Based Payments.
(4) Includes a grant of fully paid shares equal to the value of $56,053 at the time of the grant, representing 50% of
Ms James STI for the current year.
(5) Includes $19,251 for the amortisation of the grant date fair value of performance rights granted to Ms James
in the current year. The valuation was performed by an independent valuer, and the expense was recognised
in the FY23 statement of profit or loss and other comprehensive income over the relevant vesting period in
accordance with AASB2 Share Based Payments.
38
39
6. Statutory remuneration tables (continued)
Non-Executive KMP remuneration
The Human Resources Committee seeks to attract and retain Non-Executive Directors (NEDs) of the highest
calibre, who have the appropriate experience and expertise to oversee the governance of MVP and provide
direction to senior management on the running of the Company. NED fees are set with reference to their
responsibilities, time commitment and contribution to committees, whilst incurring a cost that is acceptable to
shareholders. NEDs do not participate in any equity remuneration plans.
The table below summarises payments made for NED fees.
Non-Executive KMP
Year
Short Term
Benefits
Post-Employment
Benefits
Total(1)
(1)
Mr G Naylor(1)
Mr L Hoare
Ms C Emmanuel-Donnelly
Ms M Sontrop
Mr R Betts
Former Non-Executive KMP
Mr D J Williams
(resigned 26 April 2023)
Mr R M Johnston
(resigned 27 October 2022)
Mr P J Powell
(resigned 27 October 2021)
Total Non-Executive KMP
remuneration
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Fees
$
85,973
86,364
60,000
57,273
54,299
54,545
54,299
54,545
54,299
54,545
45,249
54,545
18,100
54,545
-
18,182
372,219
434,544
Superannuation
$
9,027
8,636
-
2,727
5,701
5,455
5,701
5,455
5,701
5,455
4,751
5,455
1,900
5,455
-
1,818
32,781
40,456
$
95,000
95,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
50,000
60,000
20,000
60,000
-
20,000
405,000
475,000
(1) The Chair of the Board receives fees of $95,000 (2022: $95,000), while remaining Board members receive
fees of $60,000 (2022: $60,000).
6. Statutory remuneration tables (continued)
KMP performance rights holdings
The table below shows the movement in KMP performance rights holdings during the year, and the balance of
vested and unvested rights at the end of the financial year.
Performance Rights
Balance at 1
July 2022
Number
granted
Balance at 30
June 2023
Vested at 30
June 2023
Unvested at 30
June 2023
Ms A James
-
84,930
84,930
-
84,930
7. Equity holdings of KMP
The following table shows the respective shareholdings of KMP (directly and indirectly) and any movements
during the year ended 30 June 2023
Balance
1 July 2022
Acquired
Disposals
Number of shares
Mr G Naylor
Mr L Hoare
Ms C Emmanuel-Donnelly
Ms M Sontrop
Mr R Betts
Mr B MacGregor
Ms A James
Former KMP
Mr D J Williams
630,815
263,758
38,244
15,385
18,630
3,300
-
-
23,761
41,090
1,961
20,083
25,000
-
9,515,242
1,198,960
Mr R M Johnston
60,000
6,315
10,281,616
1,580,928
Balance
30 June 2023
894,573
62,005
56,475
20,591
23,383
25,000
-
10,714,202(1)
66,315(2)
11,862,544
-
-
-
-
-
-
-
-
-
-
(1) The final shareholding of Mr Williams as at the 26 April 2023, the date he resigned as a Director.
(2) The final shareholding of Mr Johnston as at the 27 October 2022, the date he resigned as a Director.
40
41
KMP ordinary shares under options
The following table shows the number of options held over ordinary shares by KMP (directly and indirectly) and
any movements during the year ended 30 June 2023
8. Governance
The following represents MVP’s remuneration governance framework.
MVP Board
Balance
1 July 2022
Acquired(1)
Disposals
Number of shares
Mr G Naylor
Mr L Hoare
Ms C Emmanuel-Donnelly
Ms M Sontrop
Mr R Betts
-
-
-
-
-
105,502
9,504
16,435
784
8,032
Mr B MacGregor
1,968,704(2)
10,000
Former KMP
Mr D J Williams
Mr R M Johnston
-
479,584
2,526
1,968,704
632,367
Balance
30 June 2023
105,502
9,504
16,435
784
8,032
1,978,704
479,584 (3)
2,526(4)
2,601,071
-
-
-
-
-
-
-
-
-
(1) Options attaching to shares acquired by KMP in the capital raising completed in August 2022.
(2) All options for Mr MacGregor are unvested at 30 June 2023.
(3) The final options holding of Mr Williams as at the 26 April 2023, the date he resigned as a Director.
(4) The final options holding of Mr Johnston as at the 27 October 2022, the date he resigned as a Director.
The Board takes overall accountability for the company and is committed to the highest standard of corporate
governance. To assist in the execution of these responsibilities the Board has established the following
committees:
• Human Resources Committee (HRC)
• Audit and Risk Committee (ARC)
• Continuous Disclosure Committee (CDC)
Responsibilities of the Board include reviewing the terms and conditions of the CEO’s remuneration
and ongoing performance as well as oversight of all matters associated with the organisation’s human
resources. The Board reviews, and when appropriate, approves recommendations from the HRC in relation
to the remuneration of the CEO and executives. The Board also reviews, and when appropriate approves
recommendations from the ARC in relation to audit and risk matters.
Human Resources Committee
Audit and Risk Committee
The HRC works on behalf of the MVP Board to oversee
the Group’s human resources and remuneration
strategy in the best interests of MVP shareholders. The
Committee provides an objective review and oversight
of people and remuneration policies and frameworks so
that they:
•
Align with the Group’s purpose, culture and
strategy.
The ARC works on behalf of the MVP Board to assist
in fulfilling its corporate governance and oversight
responsibilities in relation to the following:
•
•
The integrity of MVP’s financial reporting.
The effectiveness of MVP’s systems of financial risk
management and internal control.
•
The integrity of the external audit process.
• Comply with the Group’s remuneration framework.
• MVP’s risk profile and risk policy.
• Comply with legal and regulatory requirements.
• Remain appropriate to changing market conditions.
The Committee sets the remuneration framework and
monitors the activities listed below, including making
recommendations and providing reports to the Board
on the following:
•
•
The salary package of the CEO and compensation
of the non-executive directors (changes
are approved by the Board as a whole and
shareholders if required)
Annual remuneration for senior executives and
all other staff including, but not limited to, fixed
remuneration, short term incentives, and long-
term incentives, aligned to business strategy in the
interests of shareholders.
•
Assess remuneration practices for internal and
external alignment.
• Recruitment, retention and termination policies
and practices for senior management.
Any other remuneration or human resources tasks
referred to the Committee by the Board.
•
The effectiveness of MVP’s risk management
framework and supporting risk management
systems, including work health and safety.
Continuous Disclosure Committee
The CDC acts as a delegated authority of the Board to:
• Review and consider the materiality of potentially
disclosable information it receives to determine
whether that information is market sensitive;
• Make recommendations to the Board as to the
content of the information to be disclosed; and
•
Approve certain disclosures on behalf of the Board
as set out in the Continuous Disclosure Policy.
External remuneration advice
External remuneration advice is sought by the HRC
and Board where necessary. The nature of the
external advice and the amounts paid to remuneration
consultants are disclosed annually in the Remuneration
Report.
The HRC comprises at least three Non-Executive Directors and meet as often as the members deem necessary to
fulfil the Committee’s obligations. The HRC comprises of the following Directors, Mr Hoare (Chair), Mr Naylor and
Ms Sontrop.
42
43
External remuneration advice received in FY23
During the year the Committee engaged Mercer Consulting (Australia) to provide benchmarking data and advice
in relation to the remuneration package of the CEO, as well as establishing the baseline economic value of the
CEO’s compensation for implementation in FY24. The Company paid $12,000 for this service.
DIRECTORS’ REPORT
NON-AUDIT SERVICES
During the year, the Company’s auditor, performed other assignments in addition to their statutory audit
During the year, the Company’s auditor, performed other assignments in addition to their statutory audit responsibilities.
responsibilities.
NON-AUDIT SERVICES
Details of the amounts paid or payable for non-audit services provided during the year are as follows:
Details of the amounts paid or payable for non-audit services provided during the year are as follows:
$
$
Tax services
Tax services
Total
2023
2023
38,180
38,180
38,180
2022
2022
29,000
29,000
29,000
Total
29,000
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. 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.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. 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.
CORPORATE GOVERNANCE STATEMENT
38,180
A copy of the Company’s Corporate Governance statement can be found at www.medicaldev.com/investors-media/corporate-
governance/
AUDITOR'S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
A copy of the Company’s Corporate Governance statement can be found at
The auditor's independence declaration is included on page 18.
www.medicaldev.com/investors-media/corporate-governance/
ROUNDING
The Company is a company of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 dated 24 March 2016, and in accordance with that Corporate Instrument, amounts in the Directors’ Report and
financial report are rounded to the nearest $1,000, unless otherwise stated.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 44.
Signed in accordance with a resolution of the Board of Directors made pursuant to s. 298(2) of the Corporations Act 2001:
On behalf of the directors
ROUNDING
The Company is a company of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 dated 24 March 2016, and in accordance with that Corporate Instrument, amounts in the
Directors’ Report and financial report are rounded to the nearest $1,000, unless otherwise stated.
Signed in accordance with a resolution of the Board of Directors made pursuant to s. 298(2) of the Corporations
Act 2001:
On behalf of the directors
Gordon Naylor
Company Chair
31 August 2023
Medical Developments International Ltd
17
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne, VIC, 3000
Australia
Phone: +61 3 9671 7000
www.deloitte.com.au
45
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne, VIC, 3000
Australia
Phone: +61 3 9671 7000
www.deloitte.com.au
44
31 August 2023
The Board of Directors
Medical Developments International Limited
4 Caribbean Drive
Scoresby VIC 3179
Dear Board Members
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn -- MMeeddiiccaall DDeevveellooppmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of
independence to the directors of Medical Developments International Limited.
As lead audit partner for the audit of the financial report of Medical Developments International Limited for the year
ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Travis Simkin
Partner
Chartered Accountants
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff
MMeeddiiccaall DDeevveellooppmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of Medical Developments International Limited (the “Company”) and its
subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 30 June 2023,
the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements including significant accounting policies and other explanatory information, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial reports in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the Group for the current period. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
18
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
19
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd
ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
Our procedures included:
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd
ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
TTeerrmmiinnaattiioonn ooff tthhiirrdd ppaarrttyy ddiissttrriibbuuttiioonn aaggrreeeemmeenntt
Our procedures included:
47
46
KKeeyy AAuuddiitt MMaatttteerr
CCaappiittaalliissaattiioonn ooff iinnttaannggiibbllee aasssseettss
Refer to Note 2.3 Non-Current Assets
As at 30 June 2023, the Group holds $29.9 million of capitalised
registration costs and $2.9 million of capitalised development
costs.
Accounting standards require management to use their
judgement to determine:
• Whether expenditure relates to development activities or
research activities.
•
The technical feasibility of completing the intangible asset so
that it will be available for use.
• Whether the Group intends to complete the intangible asset
and either use or sell it.
•
•
•
The probability of expected future economic benefits flowing
to the Group.
•
The availability of resources to complete the development
and to use or sell the intangible asset.
The expenditure attributable to the asset during its
development.
• Whether the useful life assigned to each asset is appropriate.
Where expenditure does not meet the recognition criteria under
accounting standards, or has historically been capitalised and no
longer meets this criteria, it should be expensed or impaired.
•
•
•
Obtaining an understanding of the process
undertaken by management to determine whether
expenditure should be capitalised as an intangible
asset.
Assessing the appropriateness of management’s
accounting policy for capitalisation and
management’s application of that policy with respect
to current year additions to intangible assets.
Assessing all capitalised intangible assets not yet
available for use and a sample of capitalised
intangible assets in use at balance date to determine
whether it is probable that expected future economic
benefits attributable to those assets will flow to the
Group.
Reviewing the listing of capitalised intangible assets at
balance date to verify that:
-
-
Amortisation has commenced on intangible
assets that are in use, and
The useful lives assigned to assets in use are
appropriate.
•
Evaluating the appropriateness of the disclosures
included in Note 2.3 to the financial statements.
CCaarrrryyiinngg vvaalluuee ooff tthhee PPaaiinn MMaannaaggeemmeenntt ccaasshh ggeenneerraattiinngg uunniitt
Our audit procedures included:
Refer to Note 2.3 Non-Current Assets
As at 30 June 2023, the carrying value of the Pain Management
group of cash generating units (“CGU”) included $3.8 million of
goodwill and $29.9 million of capitalised registration costs
associated with the registration of Penthrox in existing markets
and new markets such as the USA. Goodwill and intangible assets
not yet available for use are required to be assessed for
impairment annually and whenever there is an indicator of
impairment.
The recoverable amount of the Pain Management CGU has been
determined by management based on a value in use(“ViU”)
model, which incorporates significant judgement related to the
estimation of future cash flows, short term growth rates, long
term growth rates and an appropriate discount rate.
The Group’s estimate of recoverable amount for the Pain
Management CGU is based on future cash flows which are
contingent upon the Group:
•
•
•
Continuing to grow in established markets such as Australia
and the United Kingdom.
Realising the market opportunity identified in broader
Western Europe.
Achieving registration for Penthrox in the USA and realising
the market opportunity identified.
•
•
•
•
•
•
Understanding management’s processes and controls
related to the preparation of the value in use models
for the Pain Management CGU.
Agreeing forecast cash flows to the latest Board
approved budget for FY24 and the Group’s longer
term business plans, assessing the reasonableness of
the forecast cash flows with reference to current
performance, drivers of expected future performance
and market research commissioned by management
for the USA market.
Evaluating the status of registration activities in the
USA with respect to Penthrox through enquiries of
management and review of relevant correspondence.
In conjunction with our valuation specialists,
assessing the ViU methodology used by management
as well as comparing the discount rates and long term
growth rates used to external benchmark data.
Performing sensitivity analysis on the impairment
model by applying varied discount rates and growth
projections to simulate alternative market conditions
and outcomes.
Evaluating the appropriateness of the disclosures
included in Note 2.3 to the financial statements.
Refer to Note 2.2 Unearned Income, Note 2.3 Non-Current Assets
and Note 1.2 Revenue
The Group entered into a contract with a pharmaceutical
distribution company in October 2018 whereby the distributor
was granted a right to distribute Penthrox in the Asian territories
of China, Thailand and Vietnam. As a part of this agreement, the
distributor paid the Group an upfront non-refundable fee of USD
$15m, which was received upon signing date of the contract
(2018) and was deferred within unearned income.
Registration costs pertaining to the registration process in these
jurisdictions were capitalised to the intangible assets in
accordance with accounting standards and the Group’s
accounting policy, consistent with the accounting treatment
adopted for registration costs undertaken for other jurisdictions.
During the year, both parties agreed to cease pursuing
registration in China and to terminate the agreement, as it
specifically related to China. As a result, the Group recognised
contract termination revenue of $18.5m in the current year
related to the non-refundable upfront payment. Concurrently,
the Group impaired the capitalised registration costs associated
with the Chinese market, recognising an impairment loss of
$5.7m.
Other Information
•
•
•
•
•
Reviewing the original distribution agreement to
confirm the performance obligations under AASB 15
Revenue from contracts with customers.
Reviewing the termination agreement between the
Group and the distributor to understand the terms of
the arrangement and the obligations of the respective
parties.
Evaluating the period over which the
upfront/milestone payments should be recognised as
revenue.
Assessing managements impairment indicator
assessment for the capitalised development costs and
the measurement of the resulting impairment loss.
Evaluating the appropriateness of the disclosures
included within the financial statements, including
Note 2.2 Unearned Income, Note 2.3 Non-Current
Assets, Note 1.2 Revenue and other information such
as the Director’s Report.
The directors are responsible for the other information. The other information comprises the Chairman’s and
CEO’s Report and the Directors’ Report for the year ended 30 June 2023 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
20
21
48
49
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 16 of the Directors’ Report for the year ended
30 June 2023.
pages 26 to 42
In our opinion, the Remuneration Report of 30 June 2023, for the year ended 30 June 2023, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Travis Simkin
Partner
Chartered Accountants
Melbourne, 31 August 2023
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
22
23
50
51
Consolidated Statement of Profit or Loss and
other Comprehensive Income
For the year ended 30 June 2023
$’000
Revenue
Notes
2023
2022
1.1, 1.2
32,337
21,943
Contract termination revenue
1.1, 1.2
18,928
-
Raw materials and consumables used
Employee benefits expense
Distribution expenses
Regulatory and registration expenses
Occupancy, selling and administration expenses
Interest and other Income
Depreciation and amortisation expense
Impairment expense
Finance costs
Loss before income tax expense
Income tax benefit
Net loss for the year
Net loss attributable to equity holders of the parent entity
Other comprehensive income
Items that may be reclassified subsequently to profit or loss, net of tax
(10,125)
(6,735)
(21,615)
(15,323)
(3,825)
(2,596)
(2,969)
(3,150)
(10,963)
(6,889)
657
471
(3,113)
(2,945)
1.1
(6,709)
(95)
(581)
(103)
(7,492)
(15,908)
1.3
1,883
3,501
(5,609)
(12,407)
(5,609)
(12,407)
Foreign currency translation (losses)/gains
Total comprehensive loss for the year
(75)
39
(5,684)
(12,368)
Total comprehensive loss attributable to equity holders of the parent entity
(5,684)
(12,368)
cents
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
1.1
1.1
(6.66)
(17.41)
(6.66)
(17.41)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
52
53
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
For the year ended 30 June 2023
Notes
2023
2022
$’000
Contributed
equity
Accumulated
losses
Share based
payments
reserve
CSIRO option
reserve
Foreign
currency
translation
reserve
Total
equity
$’000
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivable
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Goodwill and other intangible assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits provisions
Lease liabilities
Unearned income
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Employee benefits provisions
Unearned income
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
24,661
20,398
Year ended 30 June 2023
8,932
8,378
-
791
6,084
7,105
162
620
As at 1 July 2022
Loss for the year
Other comprehensive loss
Total comprehensive (loss) / income
42,762
34,369
Share based payments expense
Balance as at 30 June 2023
105,729
(30,154)
3,940
1,866
(66)
81,315
76,992
(24,545)
2,976
1,866
-
-
-
-
30,000
(1,684)
421
28,737
(5,609)
-
(5,609)
-
-
-
-
-
-
-
-
964
-
-
-
964
-
-
-
-
-
-
-
-
9
-
(75)
(75)
-
-
-
-
-
57,298
(5,609)
(75)
(5,684)
964
30,000
(1,684)
421
29,701
76,895
(12,138)
1,969
1,606
(30)
68,302
-
-
-
-
100
-
(3)
97
(12,407)
-
(12,407)
-
-
-
-
-
-
-
-
1,007
-
-
-
1,007
-
-
-
-
-
260
-
260
-
39
39
-
-
-
-
-
9
(12,407)
39
(12,368)
1,007
100
260
(3)
1,364
57,298
Shares issued
Equity raising costs
Tax on equity raising costs
Transactions with owners in their capacity as
owners
Year ended 30 June 2022
As at 1 July 2021
Loss for the year
Other comprehensive gain
Total comprehensive (loss) / income
Shares issued
Options issued as part of CSIRO agreement
Equity raising costs
Transactions with owners in their capacity as
owners
Balance as at 30 June 2022
76,992
(24,545)
2,976
1,866
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying
notes
15,548
10,481
Share based payments expense
2.1
2.1
1.3
2.3
2.3
1.3
2.1
4.1
2.5
2.2
4.1
2.2
2.5
3.2
3.2
12,122
11,552
38,317
40,687
8,112
5,612
58,551
57,851
101,313
92,220
14,186
9,368
727
352
283
683
348
82
343
1,899
2,208
4,450
369
21,607
2,465
24,441
19,998
34,922
81,315
57,298
105,729
76,992
5,740
4,851
(30,154)
(24,545)
81,315
57,298
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
54
55
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for other intangible assets
Interest received
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issue of shares
Share issue transaction costs
Repayment of lease liabilities
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
$’000
Notes
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Receipts from government grants
Income tax received
Interest paid
29,075
18,566
(46,259)
(31,653)
218
-
(95)
140
2,265
(95)
Net cash flows used in operating activities
3.1
(17,061)
(10,777)
NOTES TO THE FINANCIAL STATEMENTS
Section 1 – Performance
This section highlights the results and performance of the Group for the year ended 30 June 2023.
1.1 GROUP RESULTS
MVP’s chief operating decision maker is the Group’s CEO. The Group’s CEO monitors results by reviewing the
Group’s reportable segments from a product perspective as outlined in the table below:
Reportable Segments
Products/Services
Countries of Operation
Pain Management
The manufacture and sale
of Penthrox®
• Australia
• Europe
• Asia
• South Africa
Respiratory
• Middle East
• United Kingdom
The sale of respiratory
devices for use by sufferers
of asthma and chronic
obstructive pulmonary
disease (COPD)
• Australia
• Europe
• Canada
• Asia
• United Kingdom
• USA
The financial information below reflects the segment results reported to and monitored by the CEO:
(1,784)
(1,199)
(5,881)
(4,015)
566
55
(7,099)
(5,159)
3.2
3.2
3.5
30,000
(1,684)
360
(3)
(253)
(215)
$’000
Year ended 30 June 2023
Pain
Management
Respiratory
Other(4)
Total
Net cash flows generated from by financing activities
28,063
142
Revenue(1)
20,448
11,720
169
32,337
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
3,903
(15,794)
20,398
36,277
360
(85)
24,661
20,398
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Underlying EBITDA(2)
Underlying EBIT(3)
Year ended 30 June 2022
Revenue(1)
Underlying EBITDA(2)
Underlying EBIT(3)
(9,716)
1,498
(6,915)
(15,133)
(12,299)
1,250
(7,197)
(18,246)
13,268
8,220
455
21,943
(7,319)
1,271
(5,676)
(11,724)
(9,762)
1,036
(5,943)
(14,669)
The FY22 segment results have been restated to reflect a change in the allocation of employee benefits expense.
FY22 results are presented on a consistent basis with FY23 (refer to note 5.2).
(1) Excludes Contract termination revenue arising from the termination of agreements for the distribution of
Penthrox in China ($18.5 million), and other countries where revenue opportunities are not being pursued
($0.4 million).
(2) Earnings before finance costs, net of interest income, tax, depreciation and amortisation and underlying
adjustments.
(3) Earnings before finance costs, net of interest income, tax and underlying adjustments.
(4) Other comprises the Veterinary business which was discontinued during the 2022 financial year as well as
unallocated costs associated with corporate overheads.
A reconciliation between the Group’s segment information (which excludes underlying adjustments) and
reported financial information as disclosed in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income is presented below.
56
57
Net loss after tax
Set out below is a reconciliation between underlying EBITDA and net loss after tax as disclosed in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income:
1.2 REVENUE FROM CONTRACTS WITH CUSTOMERS
Set out below is an overview of revenue from contracts with customers based on their geographic location:
Disaggregation of revenue from contracts with customers
$’000
Underlying EBITDA
Depreciation and amortisation expense
Underlying EBIT
Contract termination revenue - Pain Management segment(1)
Impairment losses - Capitalised Registration Costs(2)
Commercial Market Assessment Costs(3)
Impairment losses - Veterinary segment(4)
Finalisation of costs for the CSIRO Continuous Flow technology program(5)
Total underlying adjustments
Reported EBIT
Net interest
Net loss before tax
Income tax benefit
Net loss after tax
2023
2022
(15,133)
(11,724)
(3,113)
(2,945)
(18,246)
(14,669)
18,928
(6,709)
(1,930)
-
-
-
-
-
(581)
(600)
10,289
(1,181)
(7,957)
(15,850)
465
(58)
$’000
Year ended 30 June 2023
Australia
Europe
United States
Rest of the World
Revenue(1)(2)(3)
Contract termination revenue(4)
18,928
-
(7,492)
(15,908)
Total
39,376
11,720
1,883
3,501
(5,609)
(12,407)
Year ended 30 June 2022
Pain
Management
Respiratory
Other(5)
Total
9,649
5,656
-
5,143
3,806
2,337
4,590
987
20,448
11,720
169
13,624
-
-
-
169
-
169
7,993
4,590
6,130
32,337
18,928
51,265
(1) Contract termination revenue arising from the termination of agreements for the distribution of Penthrox in
China ($18.5 million), and other countries where revenue opportunities are not being pursued ($0.4 million).
(2) Impairment of capitalised registration costs in the Pain Management segment after the Group ceased
registration activity in China ($5.7 million), and other countries ($0.9 million) where revenue opportunities
are no longer being pursued. There was also a $0.1 million impairment in relation to patents and trademarks.
(3) Costs to complete a comprehensive commercial market assessment for Penthrox in the US.
(4) Impairment losses in the prior year recognised following the Group’s decision to discontinue the Veterinary
business ($0.6 million).
(5) Finalisation costs for the CSIRO Continuous Flow technology program in the prior year ($0.6 million).
Basic and diluted earnings per share
$’000
Earnings / (loss) per share (EPS) (cents) - Basic
Earnings / (loss) per share (EPS) (cents) - Diluted
Calculated using:
•
•
•
Net loss attributable to ordinary equity holders ($’000)
Weighted average of ordinary shares (shares) - Basic
Weighted average of ordinary shares (shares) - Diluted
2023
2022
(6.66)
(6.66)
(17.41)
(17.41)
(5,609)
84,274,349
84,274,349
(12,407)
71,277,791
71,277,791
Earnings per share is calculated by dividing the net loss for the year attributable to ordinary equity holders of MVP
by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to include
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive shares. This includes performance rights granted and employee option plans.
Australia
Europe
United States
Rest of the World
Revenue(1)(2)(3)
7,428
3,953
-
3,197
1,675
2,904
1,887
444
13,268
8,220
196
10,821
-
-
259
455
5,628
2,904
2,590
21,943
(1) There are no sales between reportable segments.
(2) The Group has no individual customers who contributed 10% or more to total revenue in the 2023 fiscal year
(2022: nil).
(3) Revenue from customers with contracts in the Pain Management segment includes deferred revenue from
upfront and milestone payments of $0.7 million, including ROW $0.5 million and Europe $0.2 million (2022:
nil).
(4) Contract termination revenue arising from the termination of agreements for the distribution of Penthrox in
China ($18.5 million), and other countries where revenue opportunities are not being pursued ($0.4 million).
(5) Other comprises the Veterinary business which was discontinued during the 2022 financial year.
58
59
How MVP accounts for revenue
Sale of goods
Revenue from the sale of goods is recognised when the Group has transferred control of the product
to the buyer. The sole performance obligation relates to the delivery of the product 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.
Upfront 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. If the agreement to which the payments relate is terminated or distribution is otherwise ceased,
and there is no obligation to refund any of the amounts received, the deferred revenue will be recognised
immediately in the Consolidated Statement of Profit and Loss and Other Comprehensive Income.
1.3 TAXATION
Reconciliation of income tax benefit
$’000
Accounting loss before tax
Income tax calculated at 25% (2022: 25%)
Research and development benefit
Non-deductible expenses
Deferred tax expense relating to change in company tax rate
Adjustments in respect of previous years income tax
Effect of different tax rates of subsidiaries in other jurisdictions
Income tax benefit
Comprising of:
Current year income tax
Deferred income tax benefit
Deferred tax expense relating to change in company tax rate
Adjustments in respect of previous years income tax
2023
2022
(7,492)
(15,908)
(1,873)
(3,977)
(106)
(105)
294
-
(124)
(74)
419
77
-
85
(1,883)
(3,501)
741
(203)
(2,500)
(3,375)
-
(124)
77
-
The tax rate used in the above reconciliation is the corporate tax rate of 25% (2022 25%) applicable to base rate
entities under Australian tax law.
Non-deductible expenses in the current year primarily relates to share based payment expenses.
Recognised current and deferred tax assets and liabilities
$’000
Deferred tax asset
Temporary differences
Tax losses
Deferred tax liabilities
Temporary differences
Net deferred tax asset
2023
2022
2,551
13,734
6,768
7,982
16,285
14,750
(8,173)
(9,138)
8,112
5,612
Set out below are the deferred tax assets and liabilities recognised by the Group and movements thereon during
the year:
$’000
Year ended 30 June 2023
Deferred tax assets / (liabilities)
Accrued expenses
Deferred revenue
Lease liabilities
Right of use assets
Other intangibles
Property, plant and equipment
Provisions
Brand names
Tax losses
Year ended 30 June 2022
Deferred tax assets / (liabilities)
Accrued expenses
Deferred revenue
Lease liabilities
Right of use assets
Other intangibles
Property, plant and equipment
Provisions
Brand names
Tax losses
Opening
balance
Charged to
income
Closing
balance
201
5,422
703
(565)
(8,262)
(126)
442
(185)
7,982
5,612
116
5,714
793
(658)
(8,088)
(22)
388
(193)
4,187
2,237
885
1,086
(4,876)
(63)
68
796
101
(163)
-
5,752
2,500
85
(292)
(90)
93
(174)
(104)
54
8
3,795
3,375
546
640
(497)
(7,466)
(25)
279
(185)
13,734
8,112
201
5,422
703
(565)
(8,262)
(126)
442
(185)
7,982
5,612
60
61
Key Estimates and Judgements – Taxation
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 assets, including carry
forward tax losses.
How MVP accounts for taxation
Income tax charges:
• Comprise of current and deferred income tax charges and represent the amounts expected to be
paid to and recovered from the taxation authorities in the jurisdictions that MVP operates.
• Are recorded in Equity when the underlying transaction that the tax is attributable to is recorded
within Other Comprehensive Income.
MVP uses the tax laws in place or those that have been substantively enacted at reporting date to
calculate income tax. For deferred income tax, MVP also considers whether these tax laws are expected
to be in place when the related asset is realised or liability is settled. Management periodically re-
evaluate their assessment of their tax positions, in particular where they relate to specific interpretations
of applicable tax regulation.
Deferred tax assets and liabilities are recognised on all assets and liabilities that have different carrying
values for tax and accounting, including those arising from a single transaction, except for the initial
recognition of goodwill.
Specifically, for deferred tax assets:
• They are recognised only to the extent that it is probable that there are sufficient future taxable
amounts to be utilised against. This assessment is reviewed at each reporting date.
• They are offset against deferred tax liabilities in the same tax jurisdiction, when there is a legally
enforceable right to do so.
Research and development (R&D) tax credits receivable as compensation for expenses or losses
already incurred by the Group with no future related costs are recognised in profit or loss in the period
in which they are quantified and become receivable. The Group 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.
1.4 DIVIDENDS
No interim or final dividend was paid in the current year (2022 nil).
Section 2 – Operating Assets and Liabilities
This section highlights the primary operating assets used and liabilities incurred to support the Group’s
operating activities.
2.1 WORKING CAPITAL
Trade and other receivables
Trade and other receivables at balance date comprise of:
$’000
Trade receivables(1)
Allowance for expected credit losses
Other receivables
Total current trade and other receivables
(1) Below is a breakdown of the ageing of trade receivables:
Ageing of trade receivables as at 30 June ($’000)
6,936
4,479
2023
2022
8,769
-
163
8,932
6,215
(320)
189
6,084
1,274 1,097
371
313
189
6
0-30
30-60
61-90
>90
Days
2023
2022
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.
The Group has a number of mechanisms in place which assist in minimising financial losses due to customer non-
payment. These include:
•
all customers who wish to trade on credit terms are subject to strict credit verification procedures, which may
include an assessment of their independent credit rating, financial position, past experience and industry
reputation;
•
individual risks limits, which are regularly monitored in-line with set parameters; and
• monitoring receivable balances on an ongoing basis.
Expected credit loss model
Information about the credit risk exposure on the Group’s trade receivables using a provision matrix has not been
disclosed due to the immaterial amount of expected credit losses as at 30 June 2023.
62
63
How MVP accounts for trade and other receivables
MVP’s trade receivables are non-interest bearing, are initially recorded at fair value and include Goods
and Services Tax (GST). Trade receivables are subsequently measured at amortised cost using the
effective interest method, less and allowance for expected credit losses.
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.
Inventories
Inventories at balance date comprise of:
$’000
Raw materials
Work in progress
Finished goods
Total inventories
2023
2022
2,414
2,932
3,032
8,378
2,027
2,599
2,479
7,105
How MVP accounts for 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.
Trade and other payables
Current trade and other payables at balance date comprise of:
$’000
Trade payables
Other payables
Total current trade and other payables
2023
2022
Represented by:
13,324
9,368
862
-
14,186
9,368
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.
How MVP accounts for Trade and other payables
Trade and other payables are carried at their principal amounts, are not discounted and include GST.
They represent amounts owed for goods and services provided to the Group prior to, but were not paid
for, at the end of the financial year. The amounts are generally unsecured and are usually paid within 30 –
90 days of recognition.
2.2 UNEARNED INCOME
Unearned income at balance date comprise of:
$’000
2023
2022
Revenue received in advance(1)
1,792
21,245
Unearned government grant income(2)
Total unearned income
Current
Non-current
390
444
2,182
21,689
283
82
1,899
21,607
(1) Unearned income represents upfront unamortised payments in relation to licensing and distribution
agreements for Penthrox®. These non-refundable payments are deferred and amortised over the term of
the agreement to which the payments relate, or immediately if the agreement is terminated or distribution
is otherwise ceased. During the current year unearned income relating to distribution of Penthrox in China
($18.5 million), and other countries ($0.4 million) was realised as revenue following the termination of
relevant distribution agreements.
(2) 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.
2.3 NON-CURRENT ASSETS
Property, plant and equipment
The key movements in property, plant and equipment over the year were:
$’000
Estimated useful life
Year ended 30 June 2023
At 1 July 2022 net of accumulated depreciation
Additions
Transfers
Depreciation charge for the year
At 30 June 2023 net of accumulated depreciation
Leasehold
improvements
Plant and
equipment(1)
Right of use
asset
Total
5-10 years
4-12 years
4-12 years
158
10
62
(34)
196
9,133
2,113
(62)
(1,248)
9,936
2,261
11,552
-
-
(271)
1,990
2,123
-
(1,553)
12,122
•
•
at cost
351
18,829
3,074
22,254
Accumulated depreciation
(155)
(8,893)
(1,084)
(10,132)
Year ended 30 June 2022
At 1 July 2021 net of accumulated depreciation
Additions
Depreciation charge for the year
At 30 June 2022 net of accumulated depreciation
Represented by:
209
26
(77)
158
8,963
1,173
2,532
11,704
-
1,199
(1,003)
(271)
(1,351)
9,133
2,261
11,552
•
•
at cost
351
16,708
3,074
20,133
Accumulated depreciation
(193)
(7,575)
(813)
(8,581)
(1) Includes capital works in progress of $1.6 million (2022: $0.4 million).
64
65
Key Estimates and Judgements
Estimation of useful lives of assets
The estimation of the useful lives of assets, excluding the ROU assets, is based on historical
experience. In addition, the condition of the assets is assessed each reporting period and
considered against the remaining useful life. Adjustments to useful lives are made when
considered necessary.
The estimation of the useful lives of ROU assets is based on the non-cancellable period of the
lease plus renewal options when the exercise of the option is considered to be reasonably certain.
Key Estimates and Judgements
Recoverability of property, plant and equipment
The Group assesses impairment of all assets at each reporting date by evaluating conditions
specific to the Group and to the particular asset that may lead to impairment. These include
product and manufacturing performance, technology, social, economic and political environments
and future product expectations. If an impairment trigger exists, the recoverable amount of the
asset is determined to assess if any impairment is required.
How MVP accounts for property plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses. Cost includes expenditure directly attributable to the acquisition of the item and
subsequent costs incurred to replace parts that are eligible for capitalisation. Depreciation is calculated
on a straight-line basis over the estimated useful life of the 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 lease term.
The Group assesses at each reporting date whether there is an indication that an asset with a finite life
may be impaired. If any such indication exists, the Group makes an estimate of the asset’s recoverable
amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in
use and is determined for an individual asset, unless the asset generates cash inflows that are largely
dependent on those from other assets or groups of assets and the asset’s value in use cannot be
estimated to approximate its fair value. In such cases the asset is tested for impairment as part of the
CGU to which it belongs. When the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset or CGU is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. Impairment losses are recognised in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income.
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such an indication exists,
the recoverable amounts are estimated. A previously recognised impairment loss is reversed only if
there has been a change in the estimates used to determine the asset’s recoverable amount since the
last impairment loss was recognised. If this is the case the carrying amount of the asset is increased to
its recoverable amount. The increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Goodwill and other intangibles
Goodwill and other intangible assets are comprised of the following:
• At cost
9,994
2,090
44,921
755
9,095
66,855
$’000
Year ended 30 June 2023
At 1 July 2022 net of
accumulated amortisation
and impairment
Additions
Impairment(2)
Amortisation
At 30 June 2023 net of
accumulated amortisation
and impairment
Represented by:
• Accumulated
amortisation and
impairment
Year ended 30 June 2022
At 1 July 2021 net of
accumulated amortisation
and impairment
Additions
Impairment(2)
Amortisation
At 30 June 2022 net of
accumulated amortisation
and impairment
Represented by:
Development
Patents and
trademarks
Capitalised
registration
costs
Other(1)
intangibles
Goodwill
Total
32,714
755
3,808
40,687
2,411
673
-
999
298
4,928
(112)
(6,597)
(236)
(132)
(1,192)
-
-
-
-
5,899
-
(6,709)
-
(1,560)
2,848
1,053
29,853(3)
755
3,808
38,317
(7,146)
(1,037)
(15,068)
-
(5,287)
(28,538)
2,166
465
-
889
226
-
30,648
755
4,389
38,847
3,324
-
-
-
-
-
4,015
(581)
(581)
-
(1,594)
(220)
(116)
(1,258)
2,411
999
32,714(3)
755
3,808
40,687
• At cost
9,313
1,801
39,992
755
9,095
60,956
• Accumulated
amortisation and
impairment
(6,902)
(802)
(7,278)
-
(5,287)
(20,269)
(1) Other intangibles include Brand names of $738,000 with an indefinite life (2022: $738,000)
(2) The impairment loss recognised in the current year relates to the write down of capitalised registration
costs in the Pain Management segment after the Group ceased registration activity in China ($5.7 million),
and other countries ($0.9 million), and a $0.1 million impairment in relation to patents and trademarks. The
impairment loss recognised in the prior year relates to the Group’s decision to discontinue the Veterinary
business ($0.6 million).
(3) The carrying value for capitalised registration costs comprised:
• Registrations obtained $16.2 million (2022: $14.7 million)
• Registrations in progress $13.6 million, attributable to the USA market: $13.5 million, other countries
$0.1 million (2022: $18.0 million, attributable to the USA market: $12.6 million, Chinese market: $4.8
million, other countries $0.6 million)
66
67
Goodwill has been allocated to the following CGU’s:
$’000
Pain Management
Respiratory
2023
3,808
-
3,808
2022
3,808
-
3,808
How MVP accounts for
intangible assets
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 loss is recognised immediately
in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income and is not
subsequently reversed.
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.
Registration costs
Registration costs relate to costs incurred
to obtain registration for Penthrox® in a
geographic region.
Registration costs are recognised as an
intangible asset 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 reliably measure the
expenditure attributable to the asset during
its development.
If the recognition criteria set out above is not
met, development expenditure is expensed as
incurred. Expenditure on research activities is
also expensed as incurred.
Methoxyflurane, which is the active ingredient
in Penthrox® , has been used for acute
analgesia in Australia for more than 40
years. The Group has successfully registered
methoxyflurane in over 40 countries, requiring
varying levels of documentation and clinical
evidence to meet the requirements of
regulatory bodies. The Group has historically
capitalised registration costs as an intangible
asset on the basis that it is seeking registration
for a product with an established history of use
in Australia and various International markets,
which supports the Group in meeting the
recognition criteria under AASB 138 Intangible
Assets, in particular the technical feasibility
of achieving registration and the probability of
generating future economic benefits.
The amounts capitalised comprise directly
attributable costs, including:
• The cost of preclinical and clinical trials
(principally external costs)
• Employee benefits directly attributable to
achieving registration within a geographic
region
Registration costs are recorded at cost less
accumulated amortisation and impairment.
Amortisation is charged on a straight-line
basis over the estimated useful life of the asset
(5 - 10 years), commencing from the date
that registration is achieved and the Group
commences generating economic benefits from
the relevant geography. Costs capitalised for
registrations in progress are not amortised and
are assessed for impairment annually or when
an indicator of impairment is identified.
MVP remains confident of achieving approval
in the USA market 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.
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69
Brand names
Brand names arising on acquisition of a
business are initially recognised at Fair Value
and subsequently carried at cost less any
applicable impairment charge (if any). They
are not amortised but subject to annual tests for
impairment. For the purposes of impairment
testing, brand names 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.
Product and technology
development costs
Product and technology development costs
principally include development costs
associated with:
• The ongoing development of a new and
enhanced Penthrox® inhaler; and
• Other respiratory devices
Product and technology development costs are
recognised as an intangible asset if, and only if,
they meet the recognition criteria under AASB
138 Intangible Assets, as set out above in the
accounting policy for “registration costs”. If the
recognition criteria is not met, development
costs are expensed as incurred. Expenditure on
research activities is also expensed as incurred.
Product and technology development costs are
recorded at cost less accumulated amortisation
and impairment. Amortisation is charged on a
straight-line basis over the estimated useful
life of the asset (5 - 10 years), commencing
from the date that development activities
are completed and the Group commences
generating economic benefits. Developments
in progress are not amortised.
Key Estimate and Judgement
Impairment of goodwill and other intangibles
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.
Key Estimate and Judgement
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). Management tests these
capitalised costs for impairment annually and where an impairment indicator is identified.
The recoverability of these costs is ultimately contingent upon achieving registration in
these jurisdictions.
Impairment of capitalised
registration costs
On 18 January 2023 the Company announced that
it had discontinued the preparation of clinical trials
for Penthrox in China. This follows extended delays
to the anticipated timeline for clinical trial outcomes
and consequently the commercial launch of Penthrox
in the market, primarily due to the challenging
regulatory environment and COVID restrictions. Given
market registration in China is not being pursued,
an impairment expense of $5.7 million has been
recognised in relation to capitalised registration
costs held within the Pain Management segment.
An impairment loss was also recognised for other
countries where revenue opportunities are no longer
being pursued ($0.9 million).
Annual impairment testing
Goodwill 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.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In estimating the
recoverable amount of an asset (or cash-generating
unit), its 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. An impairment of
goodwill is not subsequently reversed.
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.
The results of the Group’s impairment testing for the
year ended 30 June 2023 are set out below:
Pain Management
The recoverable amount for the Pain Management
CGUs was calculated as at 30 June 2023 using a
‘value in use’ approach, which incorporates cash
flow projections over ten years, and a terminal value,
discounted to present value using a risk-adjusted post-
tax discount rate. The Group has modelled cash flow
over a period greater than 5 years given the scale-up
phase the Group is in. This approach enables the Group
to model expected growth before it reaches a level of
maturity in its terminal value. No impairment loss was
identified as a result of impairment testing performed.
The recoverable amount for Pain Management
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, using the Board approved Budget
for year 1, revenue growth in accordance with
the business operating plan for years 2-10 and a
terminal growth rate of 2.0% (2022: 2.3%). The
estimate of future cash flows was then discounted
using a post-tax discount rate of 15.0% (2022:
11.5%).
2. an estimate of future cash flows expected to
arise from the US market, 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 3.0% (2022: 3.0%). The estimate of future
cash flows was then discounted using a post-tax
discount rate of 25.0% (2022: 20.3%).
The cashflows attributable to the geographies in which
the Group currently operates (principally Australia and
Europe) reflect continued strong growth in the short to
medium term.
The Group believes that the assumptions adopted
in the recoverable amount calculations reflect an
appropriate balance between the Group’s experience
to date and the Group’s long-term growth expectations
for the Pain Management business.
Cash flows assumed from the US market are
dependent upon successful market registration. The
Group remains confident of achieving registration
and penetration in the US market, supported by the
success of Penthrox in existing markets. This success
reflects the safety and efficacy profile of the product.
During FY22 the clinical hold on methoxyflurane was
lifted by the FDA in the US, a critical milestone in the
Group’s efforts to achieve registration and presence
in the market in the US. The Group is advancing plans
to commence the clinical and non-clinical program
required to achieve registration.
70
71
2.4 COMMITMENTS AND CONTINGENCIES
Capital expenditure commitments
There were no material capital expenditure commitments at the end of the year (2022: nil).
Contingencies
The Group is not party to any legal proceedings that are expected, individually or in the aggregate, to have a
material adverse effect on its business, financial position or operating results.
How MVP accounts for provisions and contingencies
Provisions are recognised when the following three criteria are met:
•
•
the Group has a present obligation (legal or constructive) as a result of a past event;
it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; and
•
a reliable estimate can be made of the amount of the obligation
When these criteria cannot be met, a contingency may be recognised.
Provisions are measured at the present value of management’s best estimate of the expenditure required
to settle the present obligation at the reporting date. The discount rate used to determine the present
value reflects current market assessments of the time value of money and the risks specific to the
liability. When discounting is used, the increase in the provision due to the passage of time is recognised
as a financing cost.
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.
2.5 LEASES
The lease liabilities included in the consolidated statement of financial position are:
$’000
Current
Non-current
2023
2022
352
2,208
2,560
348
2,465
2,813
How MVP accounts for 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.
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.
72
73
Section 3 – Capital Structure
This section details specifics of the Groups’ capital structure. When managing capital, Management’s objective is
to ensure that the Group continues as a going concern as well as to provide optimal returns to shareholders and
other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital
available to the Group. Primary responsibility for identification and control of capital and financial risks rests with
the Board of Directors.
3.2 CONTRIBUTED EQUITY AND RESERVES
Terms, conditions and movements of contributed equity
Ordinary shares are classified as equity. Ordinary shares entitle the holder to participate in dividends and the
proceeds on winding up of the Company in proportion to the number of shares held.
3.1 NET CASH
Reconciliation of net loss for the year to net cash flows from operations
$’000
Net loss for the year
Non cash flows in the operating loss:
Depreciation and amortisation
Interest received
Share based payments expense
Impairment expense
Finalisation of costs for the CSIRO Continuous Flow technology program
Contract termination revenue
Net unrealised foreign exchange (gain) / loss
Changes in assets and liabilities:
Increase in trade and other receivables
Increase in inventory
Decrease in tax receivable
Increase in net deferred tax assets and liabilities
Increase in trade and other payables
Increase in employee benefit provisions
Increase in other assets
Deferred revenue realised
Net cash flows used in operating activities
2023
2022
(5,609)
(12,407)
3,113
(560)
964
6,709
-
(18,928)
(246)
2,945
(55)
1,007
581
600
-
142
(2,870)
(3,342)
(1,842)
(1,374)
-
842
(1,883)
(2,041)
4,824
2,344
18
(172)
(579)
205
(224)
-
(17,061)
(10,777)
Movements in contributed equity
Ordinary shares:
Beginning of the year
Issuance of shares
Share placement
Share purchase plan
Share issuance costs
Tax on share issuance costs
2023
2022
Number of
shares
$’000
Number of
shares
$’000
71,305,057
76,992
71,264,672
76,895
15,000,118(1)
30,000
-
-
-
-
(1,684)
421
15,385
25,000
-
-
100
-
(3)
-
End of the year
86,305,175
105,729
71,305,057
76,992
(1) On 4 August 2022 the Company announced a fully underwritten placement and entitlement offer to raise $30
million. The placement and entitlement offer was successfully completed in August 2022.
How MVP accounts for contributed equity
Issued and paid up capital is classified as contributed equity and recognised at the fair value of the
consideration received by the entity. Incremental costs directly attributable to the issue of new shares or
options are shown in contributed equity as a deduction, net of tax, from the proceeds.
Reserves
$’000
Foreign currency translation reserve(1)
Share-based payments reserve(2)
CSIRO option reserve(3)
Total reserves
2023
2022
(66)
3,940
1,866
5,740
9
2,976
1,866
4,851
The Group had no borrowings as at 30 June 2023 (2022: nil) and was in a net cash position.
(1) The foreign currency translation reserve is used to record foreign exchange fluctuations arising from
How MVP accounts for cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement of Financial Position comprise cash at
bank and on hand and short-term deposits with a maturity of twelve months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist
of cash and cash equivalents as defined above, net of bank overdraft balances. Bank overdrafts
are included within interest-bearing loans and borrowings in current liabilities on the Consolidated
Statement of Financial Position. Cash flows are included in the Consolidated Statement of Cash Flows
on a gross basis and the GST component of cash flows arising from investing and financing activities
which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
the translation of the financial statements of foreign subsidiaries (based in the United Kingdom and
Netherlands). Exchange differences arising on the translation from functional currencies to the Group’s
presentation currency (Australian dollars) are recognised directly in other comprehensive income and
accumulated in the foreign currency translation reserve.
(2) The share-based payments reserve relates to performance rights granted in the current year and share
options granted in prior periods by the Company to the CEO and select senior executives, and the equity
settled component of the short term incentive plan introduced for select senior executives in the current year.
(3) The CSIRO option reserve relates to 392,308 options (2022: 392,308) over ordinary shares of the Company.
These options are in relation to the MVP/CSIRO Manufacturing Technologies Project announced on 5 June
2017, the final grant of options under this project was completed in the prior year. 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.
74
75
3.3 CAPITAL 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 trade financial instruments, including derivatives,
for speculative purposes.
The capital structure of the Group consists of net cash
as detailed in note 3.1 and the equity of the Group
(comprising issued capital, reserves and retained
earnings).
The Board of Directors reviews the capital structure
of the Group on a semi-annual basis. As part of this
review, the Board considers the cost of capital and the
risks associated with each class of capital.
As at 30 June 2023 the Group had no borrowings, and
was in a net cash position.
3.4 GOING CONCERN
The consolidated financial statements have been
prepared on a going concern basis, which assumes
that the Group will realise its assets and extinguish
its liabilities in the normal course of business and at
amounts stated in the Full Year Consolidated Financial
Report.
3.5 MANAGING OUR FINANCIAL
RISKS
There are a number of financial risks the Group is
exposed to that could adversely affect the achievement
of future business performance. The Group’s risk
management program seeks to mitigate risks and
reduce volatility in the Group’s financial performance.
Financial risk management is managed by the Audit
and Risk Committee.
The Group’s principal financial risks are:
•
Liquidity risk;
• Credit risk; and
• Foreign currency risk.
Managing liquidity risk
Liquidity risk arises from the financial liabilities of the
Group and the Group’s ability to meet its obligations
to repay these financial liabilities as and when they
fall due. The Group has a range of liabilities at balance
date that will be required to be settled at some future
date.
At 30 June 2023 the Group had $24.7 million in cash
holdings. Net assets were $81.3 million.
What is the risk?
The Directors are satisfied that the Group’s cash
position 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.
The Company’s nearer term strategic focus is to
increase the penetration of Penthrox in existing
markets, and to continue to grow its Respiratory
segment through market share gains, particularly
in the USA. Longer term, the Çompany seeks to
enter new and attractive markets for Penthrox, with
particular focus on the USA.
Investment in capability over the last two years is
driving delivery of the Group’s strategy, including
volume growth in the Pain Management and
Respiratory segments, and higher pricing. The Group
expects operating cashflows in FY24 to be improved
on FY23, reflecting higher pricing, reduced spend
in Europe following the scale-back of resources
in France, other operating efficiencies and volume
growth.
Funding for clinical and non-clinical trials and other
capital programs to support market entry in the US will
be funded through one or more partner organisations
and will only be committed when funding is confirmed.
An experienced advisor has been appointed to support
the search for suitable partners.
The risk that MVP cannot meet its obligations to
repay its financial liabilities as and when they fall
due.
How does MVP manage this risk?
• Maintaining adequate cash reserves and
borrowing facilities.
• Continuously monitoring forecast and actual
cash flows and matching the maturity profiles
of financial assets and liabilities.
Impact at 30 June 2023
The FY23 Financial statements have been
prepared on a going concern basis. The Directors
have assessed that the cash reserves at 30 June
2023, in addition to the cash inflows arising from
the successful share placement and entitlement
offer in August 2022, will provide the Group
sufficient capacity to meet 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 (refer note 3.4).
The Group’s financial instruments comprise cash, trade and other receivables, trade and other payables and
lease liabilities.
The Group does not hold any financial instruments that are measured subsequent to initial recognition at fair
value.
The table below summarises the maturity profile of the Group’s financials liabilities based on contractual
undiscounted payments:
$’000
Year ended 30 June 2023
Financial liabilities
Trade and other payables
Lease liabilities
Year ended 30 June 2022
Financial liabilities
Trade and other payables
Lease liabilities
Less than
1 year
1–5 years
More than
5 years
Total
14,186
-
359
14,545
1,558
1,558
9,368
348
9,716
-
1,509
1,509
-
1,004
1,004
-
1,412
1,412
14,186
2,921
17,107
9,368
3,269
12,637
The following table represents the changes in financial liabilities arising from financing activities:
$’000
Lease liabilities
Total liabilities from financing activities
$’000
Lease liabilities
Total liabilities from financing activities
1 July 2022
Cash Flows
30 June 2023
2,813
2,813
(253)
(253)
2,560
2,560
1 July 2021
Cash Flows
30 June 2022
3,049
3,049
(236)
(236)
2,813
2,813
Managing credit risk
Credit risk represents the loss that would be recognised if counterparties failed to meet their obligations under a
contract or arrangement. The Group has adopted a policy that customers who wish to trade on credit terms, will
be subject to strict credit verification procedures (refer note 2.1).
The Group’s exposure is continually monitored, with trade receivables consisting of a large number of customers.
The Group evaluates the concentration of risk with respect to trade receivables and contract assets as low as its
customers are located in several jurisdictions and industries and operate in largely independent markets.
76
77
Managing foreign currency risk
The Group’s exposure to the risk of changes in foreign exchange rates relates to the Group’s (i) operating
activities which are denominated in a different currency from the entity’s functional currency and (ii) net
investments in foreign subsidiaries.
The Group currently operates through entities in three countries outside of Australia, with the following
functional currencies:
Country of Domicile
Functional Currency
United Kingdom
Netherlands
USA
GBP
EURO
USD
As the Group has an Australian dollar (AUD) presentation currency, which is also the functional currency of its
Australian entities, this exposes the Group to foreign exchange rate risk.
What is the risk?
How does MVP
manage this risk?
Impact at
30 June 2023
If transactions are denominated
in currencies other than the
functional currency of the
operating entity, there is a risk of
an unfavourable financial Impact
to earnings if there is an adverse
currency movement.
The Group does not currently
consider its exposure to foreign
currency to be significant and
as such forward contracts and
currency 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.
Sensitivity analysis of the foreign
currency net transactional
exposures was performed to
movements in the Australian
dollar against the relevant
foreign currencies, with all
other variables held constant.
This 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.
This analysis showed that a 10%
movement in its major trading
currencies would not materially
impact net loss after tax.
As MVP has entities that do not
have an Australian dollar (AUD)
functional currency, if currency
rates move adversely compared
to the AUD, then the amount of
AUD-equivalent profit would
decrease, and the balance sheet
net investment value would
decline.
The Group does not currently
consider its exposure to foreign
currency to be significant. The
Group expects to expand in
countries outside of Australia in
future years and will monitor its
exposure accordingly.
Sensitivity analysis performed
by management showed that a
10% +/- movement in its major
translational currencies as at
30 June 2023 would not have a
significant impact on equity and
net loss before tax.
78
79
How MVP accounts for foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency of the individual entity
by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange prevailing at reporting date.
Non-monetary items that are measured at:
• Historical cost in a foreign currency are translated using the exchange rate as at the date of the initial
transaction.
• Fair value in a foreign currency are translated using the exchange rates at the date when the fair
value was determined.
As at the reporting date the assets and liabilities of the controlled entities with non-Australian dollar
functional currencies are translated into the presentation currency of MVP at the rate of exchange at the
reporting date and their statements of comprehensive income are translated at the weighted average
exchange rate for the year (where appropriate).
The exchange rate differences arising on the translation to presentation currency are taken directly
to the foreign currency translation reserve, in equity. On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to that particular foreign operation is recognised in the
Consolidated Statement of Comprehensive Income.
Section 4 – Remunerating Our People
This section provides financial insight into employee reward and recognition designed to attract, retain, reward
and motivate high performing individuals so as to achieve the objectives of the Group, in alignment with the
interests of its shareholders.
This section should be read in conjunction with the Remuneration Report, contained within the Directors Report,
which provides specific details on the setting of remuneration for Key Management Personnel.
4.1 EMPLOYEE BENEFITS
The Group’s employee benefits expenses for the year were as follows:
$’000
Payroll and other employee benefits expense
Superannuation contributions
Share based payments expense
Contracted employee expense
Total employee benefits expense
2023
2022
14,177
10,282
1,427
964
5,047
973
1,007
3,061
21,615
15,323
The Group’s current employee benefits provisions relate to annual leave entitlements of $727,000 (2022:
$683,000). The non-current employee benefits provisions relate to long service leave entitlements of $343,000
(2022: $369,000).
How MVP accounts for employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to
the reporting date. These benefits include wages and salaries, annual leave and long service leave.
Benefits expected to be settled within twelve months of the reporting date are classified as current and
are measured at their nominal amounts based on remuneration rates which are expected to be paid
when the liability is settled.
The liability for long service leave is recognised and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Under this method consideration is given to expected future wage and
salary levels, experience of employee departures, and periods of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds (except for Australia
where high quality corporate bond rates are used in accordance with the standards) with terms to
maturity and currencies that match, as closely as possible, the estimated future cash outflows.
80
81
4.2 SHARE BASED PAYMENTS
4.3 KEY MANAGEMENT PERSONNEL
FY23 Long term incentive plan
The Company introduced a new long-term incentive plan in the current year for select senior executives, under
which 524,621 performance rights were granted. The plan has a performance hurdle linked to growth in the
share price over a three year vesting period. Details in relation to performance hurdles and vesting conditions are
outlined in section 3 of the 2023 Remuneration Report.
The rights were independently valued to establish fair value in accordance with AASB 2 Share Based Payments.
The key assumptions used in the independent valuation are outlined in the table below.
Share price at valuation date
Volatility
Risk free rate
Expected dividend yield
Fair value per right
Model used
$1.55
55%
3.25%
Nil
$0.68
Monte Carlo Simulation
Performance rights
The table below shows the movement in performance rights holdings during the year, and the balance of vested
and unvested rights at the end of the financial year.
CFO
Executives
Balance at
1 July 2022
Number
granted
forfeited
Balance at
30 June
2023
Vested at
30 June
2023
Unvested
at 30 June
2023
-
-
-
84,930
-
84,930
439,691
(99,863)
339,828
524,621
(99,863)
424,758
-
-
-
84,930
339,828
424,758
Ordinary shares under option
All senior executives who participated in plans have forfeited incentives that had been previously granted to them
in prior periods. There has been no change in the long term equity arrangements of the CEO for the current year.
The table below shows the movement for ordinary shares under option during the current year.
Option Plans
CEO
Executives
Balance at
1 July 2022
1,968,704
310,000
2,278,704
Number
forfeited
-
(310,000)
(310,000)
Balance at
30 June 2023
1,968,704
-
1,968,704
No options were exercised during the current year (2022: No options exercised).
How MVP accounts for 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 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.
Compensation of Key Management Personnel (KMP) of the Group
The amounts disclosed in the table below are the amounts recognised as an expense during the year relating to
KMP:
$’000
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
Share based payments expense
Termination payments
Total compensation
2023
2022
1,498
1,476
93
2
1,259
-
2,852
90
8
1,028
114
2,716
Section 5 – Other Disclosures
This section includes additional financial information that is required by the accounting standards and the
Corporations Act 2001.
5.1 BASIS OF PREPARATION
Basis of preparation and compliance
This financial report:
• Comprises the financial statements of Medical Developments International Ltd, being the ultimate parent
entity, and its controlled entities as specified in Note 5.4.
•
Is a general purpose financial report.
• Has been prepared in accordance and complies with the requirements of the Corporations Act 2001,
Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board.
• Complies with International Financial Reporting Standards (IFRS) and Interpretations as issued by the
International Accounting Standards Board.
• Has been prepared on a historical cost basis.
• Has revenues, expenses and assets recognised net of GST except where the GST incurred on a purchase
of goods and services is not recoverable from the taxation authority, in which case GST is recognised as
part of the acquisition of the asset or as part of the expense item to which it relates. The net amount of GST
recoverable from or payable to the taxation authority is included as part of receivables or payables in the
Consolidated Statement of Financial Position.
•
Is presented in Australian dollars with all values rounded to the nearest $1,000, unless otherwise stated, in
accordance with the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
dated 1 April 2016.
• Has all intercompany balances, transactions, income and expenses and profit and losses resulting from intra-
group transactions eliminated in full.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. The Group will adopt the new and amended standards and interpretations that
are issued, but not yet effective, at the date they become effective. The Groups results and disclosures will not be
materially impacted by these standards.
82
83
Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current period
disclosure.
Presentation of the Group Segment results
In the current year, the Group revised the allocation of employee benefits expense for senior executives to better
reflect the time committed to driving specific strategic outcomes. This change has resulted in a greater allocation
of cost to the Pain Management segment.
Where necessary, comparatives were reclassified for consistency with the current period disclosure. There was
no change in the prior period loss before tax expense of $15.9 million as a result of the above change in approach.
5.2 RELATED PARTY DISCLOSURES
There were no related party transactions during the 2023 financial year (2022: nil). 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 4.3 for details of Key Management Personnel compensation.
5.3 PARENT ENTITY FINANCIAL INFORMATION
$’000
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Loss of the Parent entity
Total comprehensive loss of the Parent entity
2023
2022
40,646
37,626
56,220
56,844
96,866
94,470
13,607
4,451
18,058
78,808
10,025
24,442
34,467
60,003
105,729
76,992
5,806
4,842
(32,727)
(21,831)
78,808
60,003
(10,896)
(10,260)
(10,896)
(10,260)
The above is a summary of the individual financial statements for Medical Developments International Ltd at
balance date. Medical Developments International Ltd:
•
•
•
is the ultimate parent of the Group;
is a for-profit company limited by shares;
is incorporated and domiciled in Australia;
• has its registered office at 4 Caribbean Drive, Scoresby, Victoria, Australia; and
•
is listed on the Australian Stock Exchange (ASX) and its shares are publicly traded.
How MVP accounted for information within parent entity financial
statements
The financial information for the Company has been prepared on the same basis as the consolidated
financial statements, except as set out below:
•
Investments in subsidiaries are accounted for at cost less any impairment in the financial statements of
Medical Developments International Ltd.
84
85
5.4 CONTROLLED ENTITIES
The Group’s subsidiaries at 30 June 2023 are as follows:(1)(2)
United Kingdom
Medical Developments UK Limited
• Distribution of pharmaceutical drug and respiratory products
Ireland
Medical Developments MD&P Limited
• Holder of European Penthrox® marketing authorisation
Netherlands
Medical Developments NED B.V.
• Operating
United States of America
Medical Developments USA Inc.
• Distribution of respiratory products
(1) All entities are wholly owned (2022: wholly owned)
5.6 SEGMENT ASSETS AND SEGMENT LIABILITIES
Segment assets
$’000
Pain Management
Respiratory
Total Segment Assets
Reconciliation to total assets(1):
Cash and cash equivalents
Deferred tax assets
Current tax receivable
Other
TOTAL ASSETS
Segment liabilities
(2) Medical Flow Technologies Pty Ltd was a Non-operating Australian subsidiary that was deregistered during
$’000
the year
How MVP accounts for controlled entities
Controlled entities are fully consolidated when the Group obtains control and cease to be consolidated
when control is transferred out of the Group. The Group controls an entity when it:
•
•
is exposed, or has the rights, to variable returns from its involvement with the investee;
and has the ability to affect those returns through its power over the entity, for example has the ability
to direct the relevant activities of the entity, which could affect the level of profit the entity makes.
5.5 AUDITORS REMUNERATION
During the year, the following fees were paid or payable for services provided by Medical Developments
International Ltd’s external auditors Deloitte Touche Tohmatsu:
$
Fees to Deloitte Touche Tohmatsu
2023
2022
Fees for the audit or review of the statutory financial report of the group
187,500
137,500
Fees for taxation compliance services
Total fees to Deloitte Touche Tohmatsu
38,180
29,000
225,680
166,500
Pain Management
Respiratory
Total Segment Liabilities
Reconciliation to total liabilities(1):
Employee benefits provisions
Lease liabilities
Unearned income
TOTAL LIABILITIES
(1) These reconciling items are managed centrally and not allocated to reportable segments
5.7 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 Group, the results of those operations, or the state of affairs of the Group in future
years.
2023
2022
58,891
57,735
7,947
6,744
66,838
64,479
24,661
20,398
8,112
-
1,702
5,612
162
1,569
101,313
92,220
2023
2022
11,997
2,579
14,576
7,432
2,380
9,812
1,070
2,560
1,792
1,052
2,813
21,245
19,998
34,922
DIRECTOR’S REPORT
AUDITOR'S INDEPENDENCE DECLARATION
The auditor's independence declaration is included on page 17.
86
ROUNDING
Directors’ Declaration
The Company is a company of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 dated 24 March 2016, and in accordance with that Corporate Instrument, amounts in the Directors’ Report and
financial report are rounded to the nearest $1,000, unless otherwise stated.
Additional Stock Exchange Information
87
The directors declare that:
a)
Signed in accordance with a resolution of the Board of Directors made pursuant to s. 298(2) of the Corporations Act 2001:
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;
On behalf of the directors
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 5.1 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
Gordon Naylor
Company Chair
Company Chair
26 August 2022
Dated 31 August 2023
Medical Developments International Ltd
as at 11 September 2023
Number of holders of equity securities
Ordinary share capital
86,305,175 fully paid ordinary shares held by 11,527 individual shareholders.
All issued ordinary shares carry one vote per share.
Distribution of holders of equity securities
Fully paid ordinary shares
1-1000
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
FIL LIMITED (and associated entities) (reported as of 15 May 2023)
Twenty largest holders of equity securities
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LAWN VIEWS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MOGGS CREEK PTY LTD
NETWEALTH INVESTMENTS LIMITED
CITICORP NOMINEES PTY LIMITED
DR RUSSELL KAY HANCOCK
KIDDER PEABODY PTY LTD
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
MR DAVID WILLIAMS
PAYNE MEDIA PTY LTD
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
BNP PARIBAS NOMINEES PTY LTD
NAYLOR-STEWART INVESTMENTS PTY LTD
MR ALISTAIR DAVID STRONG
MRS VIRGINIA CATHERINE HANCOCK
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
NORMAN CHAN PTY LTD
16
6.190
3.477
934
858
68
11,527
4.634
Number
%
9,515,242
6,311,871
13.35
7.31
Number
%
9,743,442
11.29
5,904,120
3,444,174
2,905,320
2,731,071
1,726,027
1,714,214
1,042,945
1,040,936
1,001,569
861,817
860,147
762,881
682,749
645,167
630,000
618,487
524,026
502,548
450,000
6.84
3.99
3.37
3.16
2.00
1.99
1.21
1.21
1.16
1.00
1.00
0.88
0.79
0.75
0.73
0.72
0.61
0.58
0.52
Medical Developments International Limited is a listed public company, incorporated and domiciled in Australia.
Company Secretary
Ms. Tara Eaton
Registered office and principal
place of business
Share registry
Computershare Investor Services Pty Ltd
4 Caribbean Drive
Scoresby, VIC 3179
Tel: (03) 9547 1888
452 Johnston Street
Abbotsford, VIC 3067
Tel: 1300 850 505