Neurotech International Limited
Appendix 4E
Preliminary final report
Company details
Name of entity:
ACN:
Reporting period:
Previous period:
Neurotech International Limited
610 205 402
For the year ended 30 June 2019
For the year ended 30 June 2018
Results for announcement to the market
$000
Revenues from ordinary activities
up
565%
to
195
Loss from ordinary activities after tax attributable to the owners of Neurotech
International Limited
up
20%
to
(4,802)
Loss for the year attributable to the owners of Neurotech International Limited
up
23%
to
(4,747)
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The operating loss for the Company after providing for income tax amounted to $4,802,208 (30 June 2018: loss of
$3,990,293).
Net tangible assets
Net tangible assets per ordinary security (cents)
Attachments
Reporting
Previous
period
Cents
period
Cents
0.22
3.88
Additional Appendix 4E disclosure requirements can be found in the director’s report and the 30 June 2019 financial
statements and accompanying notes.
This report is based on the financial statements which have been audited by BDO Audit (WA).
Signed
___________________________
Winton Willesee
Director
30 August 2019
1
ACN 610 205 402
NEUROTECH INTERNATIONAL LIMITED
ANNUAL REPORT - 30 JUNE 2019
CONTENTS
CORPORATE DIRECTORY
CHAIRMANS LETTER
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT
ASX ADDITIONAL INFORMATION
PAGE
3
4
5
28
29
30
31
32
34
35
70
71
74
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 2
CORPORATE DIRECTORY
DIRECTORS
Mark Davies (Chairman)
Peter Griffiths (Chief Executive Officer)
Winton Willesee (Non-Executive Director)
David Cantor (Non-Executive Director)
COMPANY SECRETARY
Erlyn Dale
REGISTERED AND PRINCIPAL OFFICE
Suite 5 CPC, 145 Stirling Highway
NEDLANDS WA 6009
Telephone:
Website:
Email:
(08) 9389 3130
www.neurotechinternational.com
info@neurotechinternational.com
AUDITORS
SHARE REGISTRY
HOME EXCHANGE
SOLICITORS
BANKERS
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
Security Transfer Australia Pty Ltd
770 Canning Highway
APPLECROSS WA 6153
Telephone:
1300 992 916
Facsimile:
(08) 9315 2233
Australian Securities Exchange Ltd
Exchange Plaza
2 The Esplanade
PERTH WA 6000
ASX Code: NTI
Jackson McDonald
Level 17
225 St Georges Terrace
PERTH WA 6000
St George Bank
Level 2, Westralia Plaza
167 St Georges Terrace
PERTH WA 6000
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 3
CHAIRMANS LETTER
Dear Shareholders,
The focus of the year at Neurotech has been the implementation of a new strategic direction to maximise long-
term growth of the Company which is now under new operational leadership following senior leadership
changes.
These changes have been critical to identifying the best path to delivery of shareholder value into the future.
One of the earlier executive changes saw longstanding director and early investor in Neurotech, Mr Peter
Griffiths, appointed to the role of Chief Executive Officer in November 2018.
Under Mr Griffiths leadership the Company has implemented a new direction for market entry. This direction is
focused on enabling clinicians to use Mente to expand their practices with Mente’s home-based neurofeedback
therapy.
The focus on clinicians enables the company to enter the US market with Mente registered as a neurofeedback
device for improved patient wellbeing. This approach should enable us to build on the successful US clinical trial
results in July as well as positive feedback from parents, clinicians and experts in the field.
The results of the US clinical trial were positive and confirmed the beneficial impact for children with autism
spectrum disorder. The encouraging results provided strong evidence that Mente can be considered as a
complementary therapy for autistic children.
In June 2019 we released a new ‘ecommerce enabled’ platform and website www.mentetech.com that enables
a subscription model for clinics to manage the therapy across multiple Mente patients at home. The platform
also offers a virtual clinic where consultations and therapy can be provided remotely, enabling clinicians to
extend their practice and significantly reducing the barriers of adoption for Mente.
The release of the platform coincided with a test launch of a digital campaign for Mente in the UK and the
Company continues to pursue new and existing regional partners regarding contracts based on the new platform
and subscription-based business model.
Feedback from many of these partners has continued to demonstrate and confirm that the new business model
is a more attractive proposition for the clinicians prescribing it while also easing the financial burdens on families
who need the device.
Mente has also been registered as a neurofeedback device in the United States to enable US-based clinics to
prescribe the therapy. We remain confident in the Mente product and the team we have assembled who
continue to focus on the goal of helping to improve the lives of families working with autism and
neurodevelopmental disorders.
In April 2019, Neurotech announced several changes to the Board including my appointment as Independent
Non-Executive Chairman, Winton Willesee’s appointment as Independent Non-Executive Director and Erlyn
Dale’s appointment as Company Secretary. These appointments were made in line with the Company’s revised
commercial strategy as it reviews Neurotech’s assets to maximise shareholder value.
The new Board continues to assess its assets and strategy, including the most appropriate ways to fund the
ongoing operations of the Company at both the project and parent levels, with Mente as part of this
consideration. As we reflect on this year, I would like to thank my fellow Board members, Neurotech’s
management and staff for their efforts that have allowed us to move forward. I look forward to bringing positive
developments to shareholders in 2020 as the Board and management endeavour to deliver value to our
stakeholders.
Mark Davies
Chairman
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 4
DIRECTORS’ REPORT
The Directors present their report together with the financial report of Neurotech International Limited and its
controlled entities (Group) for the financial year ended 30 June 2019 and the Auditor’s Report thereon.
BOARD OF DIRECTORS
The names and details of the Directors in office during the financial period and until the date of this report are set out
below.
Mark Davies
(Chairman – appointed 16 April 2019)
Peter Griffiths
(Chief Executive Officer and Managing Director - appointed as CEO 26 November 2018)
Winton Willesee
(Non-Executive Director – appointed 16 April 2019)
David Cantor
(Non-Executive Director – appointed 4 July 2018)
Peter O’Connor
(Chairman – resigned 16 April 2019)
Wolfgang Johannes Storf (Chief Executive Officer and Managing Director – resigned 26 November 2018)
Simon Trevisan
(Non-Executive Director – resigned 16 April 2019)
Cheryl Tan
(Non-Executive Director – resigned 30 November 2018)
Neale Fong
(Non-Executive Director – appointed 3 October 2018, resigned 16 April 2019)
PRINCIPAL ACTIVITIES
Neurotech researches, designs, markets and through third party manufacturers, produces wearable neurotechnology
devices to assist with neurological conditions such as autism.
Neurotech’s current core focus is the design, manufacturing, sale and distribution of its first product, Mente, a portable
electroencephalogram (EEG) medical device that uses neurofeedback to help relax the minds of children with autism
spectrum disorder (ASD or autism).
DIVIDENDS PAID OR RECOMMENDED
The Directors of the Company do not recommend the payment of a dividend in respect of the current financial period
ended 30 June 2019 (2018: Nil).
OPERATING RESULTS
The consolidated Group’s net loss after providing for income tax for the year ended 30 June 2019 amounted to
$4,802,208 (30 June 2018: $3,990,293). At 30 June 2019, the Group has $474,682 in cash and cash equivalents (30 June
2018: $2,212,737).
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 5
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Mente Study
A highlight of the year was the publication of the full results of the US Clinical Trial in Mente Autism in leading medical
journal Frontiers in Neurology. The trial demonstrated significant positive changes in the active treatment group versus
the placebo including:
Significant reductions in the brain wave frequency bands of interest (delta, belta and high beta), which are
typically abnormally high in children with autism
Improved balance with eyes open rather than closed, which is the opposite effect experienced by autistic
children
Positive effects and a reduction of autistic behaviours, across questionnaires used globally as validated tools in
clinical applications
Parents indicating significant improvements in social skills and communication of their children
The positive results of the trial highlight that Mente Autism is well placed to target autism as a home-based
neurofeedback tool, and this saw a significant increase in inbound enquiries for the device through the Company’s
distributor and online channels.
Dr Ahmed Hankir, Professor of Psychiatry, Carrick Institute, and Senior Research Fellow at BCMHR in association with
University of Cambridge, UK presented the outcomes of the study, “The Treatment of Autism Spectrum Disorder With
Auditory Feedback: A Randomised Placebo Controlled Trial Using the Mente Autism Device” at the Royal College of
Psychiatrists (UK) Faculty of Psychiatry conference on Intellectual Disability, on 4th and 5th of October 2018 in Liverpool,
United Kingdom.
Dr Hankir is a co-author of the Mente study published in Frontiers in Neurology, which has been viewed almost 24,000
times since its publication in July, setting a record for having more reads than 99% of the studies published in Frontiers
journals.
Neurotech attended the International Congress on Autism, held in Houston, Texas on 12-15 November 2018. The
International Congress on Autism was organised by the World Autism Organisation. Prof. Frederick R. Carrick, from the
Carrick Institute, presented his research team’s study into Neurotech’s flagship Mente Autism device: “The Treatment
of Autism Spectrum Disorder with Auditory Neurofeedback: A Randomized Placebo Controlled Trial Using the Mente
Autism Device”.
The Company also attended Medica in Dusseldorf, Germany which was held 12-15 November 2018. Medica is one of
the largest trade fairs for the medical sector in the world. More than 5,000 exhibitors from 70 countries attend the
event each year and Neurotech organised several meetings with prospective partners during the event.
Neurotech’s Chief Scientific Officer, Dr Emanuela Russo gave a presentation at “Autism Spectrum Disorders: The body
beyond the behaviour (A systemic perspective for an effective multidisciplinary approach)”, an autism conference being
held in Caserta, Italy on 12-13 November 2018. Dr Russo presented on “The Neurofeedback approach in supporting
children on the autistic spectrum.”
New Strategic Direction
The Company assumed a new strategy for US market entry with a focus on delivering Mente using partnerships with
certified clinicians. This change is designed to enable the Company to enter the market earlier than planned with Mente
under registration as a device aimed at patients’ wellbeing.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 6
DIRECTORS’ REPORT
This decision follows the successful US clinical trial results in July 2018 as well as feedback received from clinicians and
experts in the field, with the Company deciding to build on this success through partnering with clinicians to collect
more data designed to further validate Mente’s use as a home-based therapy. The change in strategy means the
Company will defer its current De Novo application with the US Food and Drug Administration (FDA). The Company
submitted its FDA clearance application for Mente Autism in October 2018.
E-commerce Platform
Neurotech released a new e-commerce platform and website www.mentetech.com during March 2019 to enable the
subscription model for clinics prescribing Mente. The Company has negotiated with existing regional distribution
partners regarding new contracts based on the subscription model. Neurotech has received positive feedback from
many of these partners, confirming the new business model is a more attractive proposition for the clinicians prescribing
it as well as easing the financial burden on families who need the device.
Mente Launched in the UK and US
Mente launched in the UK in March 2019 and the Company appointed premier lead generation agency, ANCHOVY. Plc
as its partner for the development of its network of clinics. As a result of public relation issues surrounding the
Company’s founder, plans for the full media launch in the UK were put on hold.
A series of articles in the Maltese media were picked up by international outlets and this would have also dampened
the effects of the UK campaign. Instead, Neurotech focused on its digital marketing and lead generation efforts in the
UK targeting clinicians and its online awareness campaign around Mente.
Mente was also registered as a neurofeedback device in the United States with the launch of Mente to US-based clinics
planned for mid-2019.
The most recent iteration of the Mente device, released in 2018 delivers a brain training therapy that is based on widely
published research. The results of the Mente therapy have been independently verified in a US clinical trial. The results
show positive effects and a reduction in autistic behaviours. In addition, parents anecdotally indicated significant
improvements in social skills and communication of their children. The US trial validates the current version of Mente
as a complementary home-based therapy for children with autism spectrum disorder.
Launch of Mente Clinic
In June 2019, Neurotech launched a pilot version of Mente Clinic, a virtual clinic that enables clinicians to interact with
Mente patients and remotely monitor their progress. Mente Clinic can be accessed via www.menteclinic.com and clients
are able to make appointments via video conferencing with use monitored remotely.
Mente Clinic is designed to enable clinicians to extend their practice, assist clients in areas where clinic access is
restricted, and monitor Mente clients’ progress.
Neurotech also launched an Early Adopter Program in all geographic regions where the Mente device can be used,
offering discounts to the Mente Starter Pack and subscription model. The Company has encouraged early adopters to
provide feedback on usability. Parents can also join this program and book in consultations with a Mente specialist or
order the Mente headband and therapy sessions in a starter pack.
The Mente iOS application is available to the public on the AppStore. Mente clients can now choose between the iOS or
Android versions of the app. This allows families to continue using their platform of choice, Android or iOS, without the
need to change or purchase new devices.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 7
DIRECTORS’ REPORT
Corporate
During January 2019, the Company announced a renounceable rights issue to shareholders, on the basis of 1 new share
for every 1 Neurotech share held as at 4 February 2019 (5.00pm WST).
On the close of the Offer the Company issued the 26,122,966 shares and 26,122,966 options to shareholders, on
Monday 25 February 2019.
On 4 November 2018, 28,487,058 ordinary shares and 10,894,390 options, exercisable at $0.20 and expiring 30
November 2020 were released from escrow. These Shares are held by Directors of the Company, other related parties,
and promoters of the Company at time of the Company’s admission to the ASX on 4 November 2016.
Board and Management Changes
Following Neurotech’s revised commercial strategy to ensure the best path forward toward maximising shareholder
value, several key appointments were made to the Board and management across the year to give the Company new
operational leadership.
Mr Peter Griffiths appointed CEO and Managing Director
Mr Mark Davies as Independent Non-Executive Chairman
Mr Winton Willesee as Independent Non-Executive Director
Miss Erlyn Dale as Company Secretary
Dr David Cantor as Non-Executive Director
The Company became aware of an article in the Times of Malta newspaper in early 2019 concerning the qualifications
of its strategic adviser, Dr Adrian Attard Trevisan. The article asserts that Dr Adrian Attard Trevisan does not have a PhD
in Neuroscience from University College London, that he misled the public as having credentials as a PhD in
Neuroscience, that Dr Adrian Attard Trevisan has admitted that he does not have a PhD from University College London
and that he only has a PhD in Human Physiology from the University of Milan.
The assertations refer to Dr Adrian Attard Trevisan’s conduct during the period 2012 to 2015. The article, and
information it contained were deeply disappointing to Neurotech, its Board and Management. Dr Adrian Attard Trevisan
ceased to be an employee of Neurotech in April 2017 and resigned as a Director of the company in June 2018. He no
longer has any role in Neurotech.
Neurotech’s flagship Mente product is the result of much more than the work of one person and the Company’s
dedicated Mente team has worked for many years to create, refine and improve the device and its therapeutic
outcomes.
Mente’s personalised neurofeedback therapy is a form of brain training backed by extensive scientific literature and the
Company stands by the peer-reviewed science of Mente and the results it is delivering for children with autism spectrum
disorder.
Change of Address
Neurotech has relocated its registered office and principal place of business. The new address and contact details are:
Suite 5 CPC
145 Stirling Highway
Nedlands WA 6009
Phone: +61 8 9389 3130
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 8
DIRECTORS’ REPORT
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year were as follows.
The Group raised $783,689 in new shareholder equity in February 2019 pursuant to a Renounceable Pro-rata Rights
Issue made to eligible shareholders.
The Group recorded an operating loss after income tax of $4,802,208 (2018: $3,990,293). This result includes an
impairment expense of $1,593,864 of expenditure previously capitalised in relation to the development of the Mente
Autism medical technology and the write-down of associated property, plant & equipment from $374,200 to nil.
As at 30 June 2019, the Group had $474,682 in cash and cash equivalents, and accordingly attention is drawn to Note
1(c) in relation to the ability of the Group to continue as a Going Concern.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
No matters or circumstances have arisen since 30 June 2019 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
OUTLOOK
The Company remains committed to the development of Mente. The Board is reviewing the options for it to continue
the development of Mente which includes accessing sufficient funding in a suitably attractive form to shareholders to
fund the continued development. Refer Note 1 (c).
The overarching consideration of the Board is to maximise the value of its assets, and specifically its Mente assets, for
the benefit of its shareholders.
ENVIRONMENTAL REGULATION
National Greenhouse and Energy Reporting Act 2007
This is an Act to provide for the reporting and dissemination of information related to greenhouse gas emissions,
greenhouse gas projects, energy production and energy consumption, and for other purposes. The Entity is not subject
to the National Greenhouse and Energy Reporting Act 2007.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 9
DIRECTORS’ REPORT
BOARD OF DIRECTORS
Mark Davies – Chairman (appointed 16 April 2019)
Experience and
Expertise
Mark Davies graduated from the University of Western Australia with a Bachelor of
Commerce. He has over 20 years’ experience in trading, investment banking and providing
corporate advice. He worked at Montagu Stockbrokers before co-founding investment
banking firm Cygnet Capital and more recently 1861 Capital. Mark specialises in providing
corporate advice and capital raising services to emerging companies seeking business
development opportunities and funding from the Australian market.
Other Current
Directorships
None
Former Directorships
in last 3 years
None
Special
Responsibilities
Chairman of the Board
Interests in Shares
and Options
Nil
Peter Griffiths – CEO and Managing Director (appointed to this role 26 November 2018)
Experience and
Expertise
Peter J.L. Griffiths, B.Sc. (Hons), draws on his more than 20 years of leadership experience in
the software industry. As EVP and Group Executive at CA Technologies, he was responsible for
investment and strategy across the five business units that drove the company’s leadership in
IT Management Cloud, Application Development, Operations, DevOps and Security for
enterprise and growth markets. As a member of the company’s Executive Management Team;
Mr. Griffiths also oversaw all aspects of Operations, M&A activity, Industry Solutions, and the
CA Technologies Innovation Center, driving mobile-first software products and the transition
to SaaS offerings and business models.
Other Current
Directorships
None
Former Directorships
in last 3 years
None
Special
Responsibilities
Interests in Shares
and Options
None
7,292,378 ordinary shares in Neurotech International Limited
2,060,334 unlisted $0.20 options over ordinary shares in Neurotech International Limited
2,634,790 unlisted $0.06 options over ordinary shares in Neurotech International Limited
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 10
DIRECTORS’ REPORT
David Cantor – Non-Executive Director (appointed 4 July 2018)
Experience and
Expertise
A highly distinguished clinician, neuroscientist, program developer and a member of the
Group’s Scientific Advisory Board, Dr Cantor’s career spans more than 40 years in the academic
and clinical neuroscience sector.
He is currently the CEO and Clinical Director of Mind and Motion Developmental Centers of
Georgia, a multidisciplinary treatment facility providing a range of diagnostic and treatment
services to children and adults seeking help with neurological disorders such as autism, ADHD,
traumatic brain injury and sensory processing disorders. He is also the CEO and Managing
Partner of BrainDx, an international software Group that produces functional brain analytic
software through computer assisted quantitative EEG (QEEG) reports and big database
measures of brain development.
In addition to the above, Dr Cantor has held multiple board positions across various
neuroscientific associations, including being a founding board member and current Chairman
of the International Board of Quantitative Electrophysiology, established to maintain the
highest quality of resources and examination procedures for clinicians and academicians with
interests in quantitative electrophysiology. He is also Secretary of the International Society of
Neurofeedback and Research and an advisory board member of the Innovative Health
Foundation.
Other Current
Directorships
None
Former Directorships
in last 3 years
None
Special
Responsibilities
Interests in Shares
and Options
Chair of the Company’s Scientific Advisory Board
142,857 ordinary shares in Neurotech International Limited
Winton Willesee – Non-Executive Director (appointed 16 April 2019)
Experience and
Expertise
Other Current
Directorships
Mr Willesee is an experienced company director and company secretary. Mr Willesee has
considerable experience with ASX listed and other companies over a broad range of industries
having been involved with many successful ventures from early stage through to large capital
development projects. Mr Willesee holds a Master of Commerce, a Post-Graduate Diploma in
Business (Economics and Finance), a Graduate Diploma in Applied Finance and Investment, a
Graduate Diploma in Applied Corporate Governance, a Graduate Diploma in Education and a
Bachelor of Business. He is a Fellow of the Financial Services Institute of Australasia, a
Graduate of the Australian Institute of Company Directors, a Member of CPA Australia and a
Fellow of the Governance Institute of Australia and the Institute of Chartered Secretaries and
Administrators/Chartered Secretary.
New Zealand Coastal Seafoods Limited, MMJ Holdings Limited and Nanollose Limited
Former Directorships
in last 3 years
Ding Sheng Xin Finance Co Limited, Metallum Limited (now Kopore Metals Limited), Birimian
Ltd (now Mali Lithium Limited), and DroneShield Limited.
Special
Responsibilities
Interests in Shares
and Options
None
337,906 ordinary shares in Neurotech International Limited
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 11
DIRECTORS’ REPORT
COMPANY SECRETARY
Erlyn Dale – Company Secretary (appointed 16 April 2019)
Experience and
Expertise
Miss Dale is an experienced corporate professional with a broad range of corporate
governance, accounting and capital markets experience. Miss Dale holds positions as
company secretary for a number of ASX listed public companies across a range of industries
with particular expertise in the facilitation of company listings, merger and acquisition
transactions and capital raisings. Miss Dale has completed a Bachelor of Commerce
(Accounting and Finance) and a Graduate Diploma of Applied Corporate Governance and is
an Associate Member of both the Institute of Chartered Secretaries and Administrators and
the Governance Institute of Australia.
MEMBERS OF THE BOARD OF DIRECTORS DURING THE FINANCIAL YEAR
Peter O’Connor – Chairman (resigned 16 April 2019)
Experience and
Expertise
Peter O’Connor, MA (Trinity College, Dublin), Barrister-at-Law, is an experienced global and
regional asset allocation and manager selection adviser for financial institutions, family
offices and charities. He was Chairman of a number of publicly quoted investment
companies with particular exposure in Asia. Mr O’Connor was the Co-Founder and Deputy
Chairman of IMS Management Ltd and FundQuest UK Ltd from 1998 to 2008. He has a
wealth of global experience in the fund management and private equity industries. He has
extensive global experience in the funds management industry, both public and private
companies in developed and emerging economies.
Other Current
Directorships
Non-Executive Director at Northern Star Resources Limited
Non-Executive Director of Blue Ocean Monitoring Ltd
Former Directorships
in last 3 years
None
Wolfgang Johannes Storf – Chief Executive Officer (resigned 26 November 2018)
Experience and
Expertise
Wolfgang Storf joined AAT Research in 2016 as Chief Executive Officer. Prior to that, he was
Chief Strategy Officer with the MS Pharma Group. He was also CEO of Novartis-Sandoz in South
Africa and held other senior management positions with Novartis-Sandoz, Apotex and Johnson
& Johnson in different regions of the world. Mr Storf is a seasoned senior executive with
proven global strategic and execution leadership experience – covering both commercial and
technical operations as well R&D responsibility inside multinational and private businesses in
the pharmaceutical and medical industry. He has a highly successful record of entering new
markets, leading company turnarounds and effectively managing crisis missions. He also has
experience in post-merger integration programs in both branded / un-branded markets. He
has wide-ranging product expertise covering key chronic and acute TAs (solid / injectable) with
focus on differentiation.
Other Current
Directorships
None
Former Directorships
in last 3 years
None
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 12
DIRECTORS’ REPORT
Simon Trevisan B Econ, LLB (Hons), MBT – Non-Executive Director (resigned 16 April 2019)
Experience and
Expertise
Simon Trevisan is the Managing Director of the Tribis Pty Ltd and Iris Residential Pty Ltd. He
has 20 years’ experience in public and private investments, corporate finance and management
of large public and private businesses. He has been responsible for the funding and
management of a number of public companies and Iris Residentials’ substantial property
investments. His experience includes the establishment and listing of Mediterranean Oil & Gas
plc, an AIM listed oil and gas company with production and a substantial oil discovery in Italy.
Mr Trevisan was Executive Chairman of ASX listed gold explorer Aurex Consolidated Ltd and a
founding executive director of ASX-listed Ausgold Limited and AssetOwl Limited (previously
Regalpoint Resources Ltd). He was also responsible for arranging debt funding for the
development of in excess of $500 million of property and significantly involved in arranging
and drawing down one of the first foreign bank project facilities for a resources development
in Indonesia.
He has a Bachelor of Economics and a Bachelor of Laws from the University of Western
Australia and a Master Degree in Business and Technology from the University of New South
Wales. Before becoming Managing Director of the Tribis, Mr Trevisan practiced as a solicitor
with Allens Arthur Robinson Legal Group firm, Parker and Parker, in the corporate and natural
resources divisions.
Mr Trevisan is also currently a director of ASX-listed AssetOwl Ltd, Zeta Petroleum plc and BMG
Resources Ltd. He is a board member of not for profit St George’s College Foundation, St
George’s College Inc and Cystic Fibrosis WA Inc.
Mr Trevisan is the Chairman of the Audit Committee, a member of the Risk Committee and a
member of the Share Trading Committee.
Other Current
Directorships
Non-Executive Director of AssetOwl Limited
Non-Executive Director of BMG Resources Limited
Non-Executive Director of Zeta Petroleum Plc
Former Directorships
in last 3 years
None
Cheryl Tan – Non-Executive Director (resigned 30 November 2018)
Experience and
Expertise
Cheryl Tan is an Associate Director with Azure Capital Limited with 10 years’ experience in the
corporate advisory and finance industry, advising clients across a wide variety of engagements,
including project financing, general corporate advisory and mergers and acquisitions,
particularly within the telecommunications, utilities and infrastructure sectors.
Prior to Azure, Ms Tan spent over a year at BankWest, subsidiary of the Halifax Bank of
Scotland (Australia) at the time, within the credit risk modelling division, undertaking several
aspects of credit risk modelling required to achieve advanced Basel II accreditation.
Ms Tan holds a Bachelor of Commerce and a Bachelor of Science from the University of
Western Australia, as well as a Graduate Diploma of Applied Finance from Kaplan Professional.
Other Current
Directorships
None
Former Directorships
in last 3 years
None
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 13
DIRECTORS’ REPORT
Neale Fong – Non-Executive Director (appointed 3rd October 2018, resigned 16th April 2019)
Experience and
Expertise
Dr Neale Fong is a registered medical practitioner with over 35 years’ experience in a wide
range of leadership roles in the public and private health systems. Dr Fong has held and
continues to hold very senior positions in all health care sectors covering government services,
private hospitals, academia, health research public health, aged care and not-for-profit
organisations.
Other Current
Directorships
None
Former Directorships
in last 3 years
None
DIRECTORS’ MEETINGS
Attendances by each Director during the year were as follows:
Director
Mark Davies
Winton Willesee
Peter O’Connor
Peter Griffiths
Wolfgang Johannes Storf
Simon Trevisan
Cheryl Tan
Neale Fong
David Cantor
Number
Eligible to
Attend
Number
Attended
1
1
8
9
3
8
3
6
9
1
1
7
8
3
8
3
6
8
REMUNERATION REPORT (AUDITED)
This Remuneration Report outlines the Director and Executive remuneration arrangements of the Group and the Group
and has been audited in accordance with the requirements by section 308(3C) of the Corporations Act 2001 and the
Corporations Regulations 2001.
For the purposes of this report, Key Management Personnel of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Group and the Consolidated Entity,
directly or indirectly, including any Director (whether Executive or otherwise) of the Group.
Key Management Personnel disclosed in the Report
Names and positions held of Parent Entity Directors and Key Management Personnel in office at any time during the
financial year are:
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 14
DIRECTORS’ REPORT
Directors
Mark Davies
Chairman (appointed 16 April 2019)
Winton Willesee
Non-Executive Director (appointed 16 April 2019)
Peter Griffiths
David Cantor
Peter O’Connor
Chief Executive Officer and Managing Director (from 26 November 2018)
Deputy Chairman and Non-Executive Director (until 26 November 2018)
Non-Executive Director (appointed 4 July 2018)
Chairman (resigned 16 April 2019)
Wolfgang Johannes Storf
Chief Executive Officer and Managing Director (resigned 26 November 2018)
Simon Trevisan
Non-Executive Director (resigned 16 April 2019)
Cheryl Tan
Neale Fong
Non-Executive Director (resigned 30 November 2018)
Non-Executive Director (appointed 3 October 2018, resigned 16 April 2019)
Remuneration Governance
The full Board filling the role of the Nomination and Remuneration Committee is responsible with respect to the
following:
(a) remuneration policies and practices;
(b) remuneration of the Executive Officer and Executive Directors;
(c) composition of the Board; and
(d) performance Management of the Board and of the Executive Officer.
Use of Remuneration Consultants
During the year, the Group has not required or used any remuneration consultants.
Executive Remuneration Policy and Framework
The full Board reviews and make recommendations regarding the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
strategies in relation to Executive remuneration policies;
compensation arrangements for the Chairman, Non-Executive Directors, CEO, and other Senior Executives as
appropriate;
performance related incentive policies;
the Group’s recruitment, retention and termination policies;
the composition of the Board having regard to the skills/experience desired and skills/experience represented;
the appointment of Board members;
the evaluation of the performance of the CEO;
consideration of potential candidates to act as Directors; and
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 15
DIRECTORS’ REPORT
(i)
succession planning for Board members.
Key Management Personnel Remuneration Policy
The Board’s policy for determining the nature and amount of remuneration of Key Management Personnel for the
economic entity is as follows:
The remuneration structure for Key Management Personnel is based on a number of factors, including length of service
and the particular experience of the individual concerned. The contracts for service between the Group and Key
Management Personnel are on a continuing basis, the terms of which are not expected to change in the immediate
future. There is no scheme to provide retirement benefits, other than statutory superannuation.
The constitution and total remuneration value of each member of the entity’s Key Management Personnel. On
appointment to the Board, all Executive and Non-Executive Directors enter into an agreement with the Group. The letter
of appointment summarises the Board’s policies and terms, including remuneration.
Dr David Cantor receives a payment for his role as Chair of Scientific Advisory Board other than that Directors do not
receive additional fees for chairing or participating on Board committees. Non-Executive Directors do not receive
retirement allowances. Non-Executive Directors do not receive performance-based pay.
The Group’s executive Key Management Personnel includes the Chief Executive Officer, Wolfgang Storf (resigned 26
November 2018) and Peter Griffiths (appointed 26 November 2018). The CEO is entitled to receive performance-based
pay under his engagement agreement. Information on the remuneration of the Executive Key Management Personnel
is provided at pages 17 and 18.
The structure of the performance-based element of the Executive’s remuneration is designed to encourage retention
of the Executives while also rewarding short term performance of the individual and long-term performance of the
Group, and therefore contributing to the wealth of the Group’s shareholders. Executives are subject to an annual
performance review against objectives relevant to their role, and the performance against these objectives is used to
determine the amount of their annual short-term incentive bonus received.
A formal performance review has not been carried out to date for the CEO.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 16
DIRECTORS’ REPORT
Key Management Personnel Compensation
The compensation of the Group’s Key Management Personnel is disclosed below
Short-term Benefits
Termination
Benefits
Share-based payment
Salary ($)
Bonus ($)
Post
Retirement
benefits ($)
Other
benefits ($)
Termination
Benefits ($)
Shares and
Share Rights
($)
Options
($)
Total Share
Based
Payments ($) *
Total ($)
Performance
related
2019 Key
Management
Person
DIRECTORS
Mark Davies
10,833
-
-
-
-
-
-
-
10,833
-
Winton Willesee
8,446
-
-
-
-
-
-
-
8,446
-
Peter Griffiths
224,413
-
-
-
-
-
91,654
91,654
316,067
29%
David Cantor
62,951
-
-
-
-
6,714
-
6,714
69,665
-
Peter O’Connor
24,611
-
-
-
-
-
-
-
24,611
-
Wolfgang Storf1
101,744
33,891
-
-
143,537
7,191
-
7,191
286,363
12%
Neale Fong
21,778
-
2,069
-
-
-
-
-
23,847
-
Simon Trevisan
-
-
-
-
-
-
-
-
-
-
Cheryl Tan
16,667
-
-
-
-
-
-
-
16,667
-
TOTAL
471,443
33,891
2,069
-
143,537
13,905
91,654
105,559 *
756,499
*Refer to Note 6: Share based payments for further details
1. Mr Wolfgang Storf’s was granted a bonus of €21,250 euro (A$33,891) during the financial year, in recognition of his performance.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 17
DIRECTORS’ REPORT
Key Management Personnel Compensation
Short-term Benefits
Salary ($)
Bonus ($)
Annual
Leave ($)
Non-
monetary
benefits ($)
Termination
Benefits
Termination
Benefits ($)
Share-based payment
Shares and
Share Rights
($)
Options
($)
Total Share
Based
Payments ($)
Total ($)
Performance
related
2018 Key
Management
Person
DIRECTORS
Peter O’Connor
50,000
-
-
-
-
-
-
-
50,000
-
Peter Griffiths1
96,956
-
-
9,170
-
-
-
-
106,126
-
Wolfgang Storf2
307,911
61,575
29,603
81,081
-
12,700*
15,401*
28,101*
508,271
12%
Adrian Attard
Trevisan
137,558
-
-
2,538
-
-
-
-
140,096
Simon Trevisan3
-
-
-
-
-
-
-
-
-
Cheryl Tan
40,000
-
-
-
-
-
-
-
40,000
OTHER KEY MANAGEMENT PERSONNEL
164,868
-
17,022
39,804
53,878
-
-
-
275,572
-
-
-
-
797,293
61,575
46,625
132,593
53,878
12,700
15,401
28,101*
1,120,065
-
Mario Raciti
TOTAL
*Refer to Note 6: Share based payments for further details
1. Mr Peter Griffiths’ remuneration is $40,000/year as a non-executive director of the Group. In addition, from 1 January 2018 has been engaged under an executive services agreement where he receives €5,000
per month and an additional €1,000 administration support payment.
2. Mr Wolfgang Storf’s was granted a bonus of €40,000 euro (A$61,575) during the financial year, in recognition of his performance.
3. Mr Simon Trevisan has not received remuneration from the Group for the year ended 30 June 2018. Neurotech International Limited has an agreement with Tribis Pty Ltd, which is a Director related Entity.
Tribis Pty Ltd charges an administrative fee for office space, telecommunications, office supplies, accounting support and business support services, the fee is $7,500 per month for the entire financial year.
Mr Trevisan is a director of Tribis Pty Ltd.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 18
DIRECTORS’ REPORT
Remuneration arrangements of the Group’s Executive Key Management Personnel are as follows:
Chief Executive Officer – Peter Griffiths
Fixed Remuneration
€160,000 per annum payable monthly.
Contract Duration
Initial fixed term to 30 November 2019, then ongoing.
Notice period for
Termination
Variable Remuneration
6 months’ notice after 30 November 2019.
The CEO will be entitled to an increased Fee and a performance bonus if the following revenue targets are achieved:
-
Less than €2,000,000 in revenue in a financial year - a Fee entitlement of €160,000 (ie. no Fee increase) and a performance cash bonus
of €40,000;
€2,000,000 or more, but less than €5,000,000 in revenue in a financial year - a Fee entitlement of €200,000 and a performance cash
bonus of €100,000;
€5,000,000 or more, but less than €8,000,000 in revenue in a financial year - a Fee entitlement of €280,000 and a performance cash
bonus of €120,000; and
€8,000,000 or more in revenue in a financial year - a Fee entitlement of €300,000 and a performance cash bonus of €200,000.
-
-
-
The revenue targets are in respect of consolidated annual revenue (calculated in accordance with applicable accounting standards) of the
Neurotech Group in any financial year (ie. a 12-month period ending 30 June) during the term of the agreement.
Share based payment
Pursuant to his consultancy services agreement, subject to shareholder approval, Mr Griffiths will be awarded the following Options in the
Company:
Tranche 1: 6,500,000 Options agreed to be granted, subject to shareholder approval. These options are exercisable at $0.0589 and valued
as at 30 June 2019 at a value of $71,221.
Tranche 2: 5,429,754 Options agreed to be granted, subject to shareholder approval. These options are exercisable at $0.0199 and valued
as at 30 June 2019 at a value of $76,074.
The Options will expire on the earlier of the 5th anniversary of the date on which the Options are granted and the date of termination of the
agreement by reason of Bad Leaving, if applicable. One third of these options vest immediately with the remaining value to vest over the
period from the commencement of service, 1 December 2018 to 1 December 2020. These Options will only be issued following shareholder
approval at the 2019 Annual General Meeting.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 19
DIRECTORS’ REPORT
Other amounts payable
Secretarial & administrative services: €12,000 per annum.
Health insurance: €3,000 per annum.
International travel insurance: €2,000 per annum.
Chief Executive Officer – Wolfgang Storf (resigned 26 November 2018)
Fixed Remuneration
Mr Storf was remunerated at a rate of €160,000 from 1 July 2018, this was a reduction from his rate in the 2018 financial year of €200,000
per annum.
Contract Duration
Ongoing Contract.
Notice period for
Termination
6 months’ notice.
Variable Remuneration
Entitled to a bonus of up to €160,000 per annum, payable if actual sales (for which cash has been received) are equal to 130% of budget.
Performance based remuneration granted during the year.
Wolfgang Storf (Chief Executive Officer – resigned 26 November 2018)
During the year, the Company’s former CEO, Wolfgang Storf was paid a short-term incentive payment of €21,250. This bonus was calculated on the extent which the Group
achieved budgeted Mente Autism unit sales in the quarter to 30 September 2018. No bonus was paid to Mr Storf in relation to unit sales in the period 1 October 2018 up to
the date of his termination on 26 November 2018.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 20
DIRECTORS’ REPORT
Equity Instruments Disclosure Relating to Key Management Personnel
Shares:
Number of shares held by Parent Entity Directors and other Key Management Personnel of the Group, including their personally related parties, are set out below.
Name
Directors
Mark Davies
Peter Griffiths
David Cantor
Winton Willesee
Balance at the
start of the year
Acquired
Disposed
Other *
Balance at
the end of
the year
-
-
4,657,588
2,634,790
-
-
-
7,292,378
-
-
142,857
337,906
503,100
-
-
-
-
-
-
-
(1,006,200)
Peter O’Connor
503,100
Wolfgang Johannes Storf
937,277
-
(471,277)
(466,000)
Simon Trevisan
5,405,100
3,333,334
Cheryl Tan
Neale Fong
31,304
-
-
-
-
-
-
(8,738,434)
(31,304)
-
* Other refers to shares held at the date of resignation
142,857
337,906
-
-
-
-
-
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 21
DIRECTORS’ REPORT
Share Rights
During the financial year shares to the value of $81,274 were issued to Directors in relation to bonus and incentive amounts contractually payable. These amounts were
expensed during the year ended 30 June 2019 and 30 June 2018. Details of these share issues and the expense recognized in the year ended 30 June 2019 are as follows:
Director
Date of Issue
No. of shares
Mr Wolfgang Storf
03/12/2018
466,000
Mr David Cantor
04/12/2018
142,857
Total
Value
$
74,560
6,714
81,274
Expense $
Vested and
exercisable
7,191
6,714
13,905
-
-
-
As at 30 June 2019 there are no outstanding share rights, vested nor unvested (30 June 2018: Nil).
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 22
DIRECTORS’ REPORT
Options
Number of options held by Parent Entity Directors and other Key Management Personnel of the Group, including their personally related parties, are set out below.
Name
Balance at the
start of the year
Acquired
Disposed
Other*
Balance at
the end of
the year
Mark Davies
Peter Griffiths
David Cantor
Winton Willesee
-
-
2,060,334
2,634,790
-
-
-
-
Peter O’Connor
1,631,000
503,100
Wolfgang Johannes Storf
466,000
-
Simon Trevisan
1,864,000
3,333,334
Cheryl Tan
Neale Fong
-
-
-
-
* Other refers to options held at the date of resignation
-
-
-
-
-
-
-
-
-
-
-
-
4,695,124
-
-
(2,134,100)
(466,000)
(5,197,334)
-
-
-
-
-
-
-
-
-
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 23
DIRECTORS’ REPORT
Options
During the financial year, options were agreed to be issued to the CEO (Peter Griffiths) in December 2018. These options are subject to shareholder approval at the
November 2019 Annual General Meeting (“AGM”). The approval at the 2019 AGM will determine the grant date.
These share based payments have been valued based on the 30 June 2019 share price and volatility as the best estimate of the value of the share based payments at the date
they will be granted. The value of the share based payments will be updated once shareholder approval is obtained in the 2019 AGM. However, if shareholder approval is not
obtained then the amounts recognized to date will be reversed through profit or loss. The options vest over the period of service up to 1 December 2020 and accordingly the
options have been expensed over the vesting period. The amounts expensed during the year ended 30 June 2019 are shown below:
Director
Valuation date*
No. of options
Fair Value per
option at
valuation date $
Exercise price $
Expiry date
Value $
Peter Griffiths (Tranche 1)
30/06/2019
6,500,000
Peter Griffiths (Tranche 2)
30/06/2019
5,429,754
0.0110
0.0140
$0.0589
30/06/2024
$0.0199
30/06/2024
Total
11,929,754
44,317
47,337
91,654
* Options are subject to shareholder approval which will occur subsequent to year end, therefore 30 June 2019 has been used as the valuation date.
Voting and comments made at the Group’s 2018 Annual General Meeting
The Group received a 76.75% “yes” votes on its remuneration report for the 2018 financial year (2017: 91% yes).
The Group did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 24
DIRECTORS’ REPORT
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Transactions with Related Parties
Transactions between related parties are on normal commercial terms and conditions no more favorable than
those available to other parties unless otherwise stated.
The following transaction occurred with related parties for the year ended 30 June 2019.
The aggregate amount recognised during the year relating to Directors, Key Management Personnel and their
related parties were as follows.
Director
Transaction
Transactions value for
the year ended 30 June
Balance outstanding as
at 30 June
2019 ($)
2018 ($)
2019 ($)
2018 ($)
Simon Trevisan
(Director and controlling
Shareholder of Tribis Pty
Ltd)
Winton Willesee (Director
and controlling
Shareholder of Azalea
Consulting Pty Ltd)
Winton Willesee (Director
and controlling
Shareholder of Valle
Corporate Pty Ltd)
Total
Corporate
administration services
82,500
90,000
-
Corporate
administration services
8,970
-
5,850
Bookkeeping and
accounting services
-
-
2,277
91,470
90,000
8,127
-
-
-
-
Notes in relation to the table of related party transactions.
Payments to Tribis Pty Ltd (director related entity of Simon Trevisan) for corporate administration services
including company secretarial and accounting services and front and registered office services;
Payments to Azalea Consulting Pty Ltd (director related entity of Winton Willesee) for corporate administration
services including company secretarial and accounting services and front and registered office services; and
Payments to Valle Corporate Pty Ltd (director related entity of Winton Willesee) for bookkeeping and financial
reporting services fees.
As at 30 June 2019, the Group owed €29,500 ($47,740) for funds advanced by an entity related to Mr Winton
Willesee, a director of the Parent company. This advance was repaid during July 2019, and no interest was
payable.
This is the end of the Audited Remuneration Report.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 25
DIRECTORS’ REPORT
INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a)
Indemnification
The Group has agreed to indemnify the current Directors and Group Secretary of the Group against all liabilities
to another person (other than the Group or a related body corporate) that may arise from their position as
Directors and Group Secretary of the Group, except where the liability arises out of conduct involving a lack of
good faith.
The Agreement stipulates that the Group will meet to the maximum extent permitted by law, the full amount
of any such liabilities, including costs and expenses.
(b)
Insurance Premiums
During the year ended 30 June 2019, the Company paid insurance premiums in respect of Directors and Officers
Liability Insurance for Directors and Officers of the Company. The liabilities insured are for damages and legal
costs that may be incurred in defending civil or criminal proceedings that may be brought against the Directors
and Officers in their capacity as Directors and Officers of the Company 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.
NON-AUDIT SERVICES
The Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of
non-audit services during the year is compatible with the general standard of independence for Auditors
imposed by the Corporations Act 2001.
The Board and the Audit and Risk Committee have considered the non-audit services provided during the
financial year by the Auditor and are satisfied that the provision of those non-audit services during the financial
year by the Auditor is compatible with, and did not compromise, the Auditor’s independence requirements of
the Corporations Act 2001 for the followings reasons:
(a)
(b)
all non-audit services were subject to the Corporate Governance procedures adopted by the Group; and
the non-audit services provided do not undermine the general principals relating to Auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve
reviewing or auditing the Auditor’s own work, acting in a management or decision-making capacity for
the Group, acting as an advocate for the Group or jointly sharing risks and rewards.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the
parent entity, its related practices and non-related audit firms:
Other Services
BDO Corporate Finance
Total remuneration for other services
SHARES
30 June 2019 ($)
30 June 2018 ($)
2,006
2,006
5,345
5,345
As at the date of this report there are 135,743,869 ordinary shares on issue.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 26
DIRECTORS’ REPORT
OPTIONS
All options granted are over ordinary shares in Neurotech International Limited, which confer a right of one
ordinary share for every option held.
The group has the following options on issue as at 30 June 2019:
Grant Date
Expiry Date
Exercise
Price
Balance at end
of the year
Vested and
exercisable
($)
$0.20
$0.20
$0.20
$0.06
Number
Number
7,899,314
7,899,314
466,000
155,333
2,529,076
2,529,076
26,122,966
26,122,966
37,017,356
36,706,689
09/05/2016
30/11/2020
03/04/2016
30/11/2020
28/10/2016
30/11/2020
25/02/2019
31/03/2021
DIVERSITY
Female employees in the whole organisation
Females in Senior Executive Positions
Females on the Board
Number of
Females
5
3
-
The Group does not have documented diversity targets, the Group makes employment decisions based on
requirements of the role to be filled and does not make employment decisions based on the gender of potential
candidates. The establishment of diversity targets has the potential to result in the Group making employment
decisions giving consideration to gender.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 for the
year ended 30 June 2019 has been received and can be found on page 29.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
Signed on behalf of the Board of Directors.
Winton Willesee
Non-Executive Director
Dated at Perth, Western Australia, this 30th August 2019
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 27
CORPORATE GOVERNANCE
The Board is responsible for the overall corporate governance of the Group, and it recognises the need for the
highest standards of ethical behavior and accountability. It is committed to administrating its corporate
governance structures to promote integrity and responsible decision making.
The Group’s corporate governance structures, policies and procedures are described in its Corporate
Governance Statement which is available at the Group’s website at:
http://neurotechinternational.com/investor-centre/corporate-governance
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 28
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF NEUROTECH
INTERNATIONAL LIMITED
As lead auditor of Neurotech International Limited for the year ended 30 June 2019, I declare that, to
the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Neurotech International Limited and the entities it controlled during
the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 30 August 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED
Notes
30 June 2019 ($)
30 June 2018 ($)
CONTINUING OPERATIONS
Revenue
Other income
Cost of sales
Obsolete stock written off
Professional consultant and advisory expenses
Professional legal expenses
Corporate and administration expenses
Depreciation and amortisation expenses
Finance expenses
Advertising and marketing expenses
Impairment expense
Employee benefits expense
Research expense
Share based payments expense
Procurement compensation payment
Equipment and materials direct cost
Other expenses
PROFIT/(LOSS) BEFORE INCOME TAX
Income tax benefit
3
4
5
5
5
5
5
6
7
194,556
59,236
(73,078)
(290,666)
29,277
68,421
(29,435)
(47,528)
(279,793)
(186,691)
(85,921)
(91,859)
(810,257)
(776,803)
-
(530,488)
(2,006)
(18,618)
(203,046)
(116,438)
(2,012,274)
(137,578)
(903,169)
(1,399,912)
(19,982)
(290,131)
(105,559)
(28,101)
-
(133,947)
(85,764)
(10,075)
(184,485)
(290,387)
(4,802,208)
(3,990,293)
-
-
PROFIT/(LOSS) AFTER INCOME TAX
(4,802,208)
(3,990,293)
Other comprehensive income/(loss)
-
-
Items that may be reclassified subsequently to profit or loss:
Exchange difference on translation of foreign operations
54,280
121,636
Total comprehensive profit/(loss) for the period
(4,747,928)
(3,868,657)
Basic loss per share (cents per share)
25
(4.06)
(3.93)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income are to be read in conjunction
with the accompanying notes.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 30
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
CONSOLIDATED
Notes
30 June 2019 ($)
30 June 2018 ($)
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Short-term borrowings
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed Equity
Reserves
Accumulated Losses
TOTAL EQUITY
10
11
12
13
14
15
16
17
18
19
474,682
178,066
-
2,212,737
308,173
70,981
652,748
2,591,891
-
-
-
652,748
229,260
126,075
355,335
355,335
297,413
374,200
1,640,641
2,014,841
4,606,732
345,872
29,788
375,660
375,660
4,231,072
15,099,925
14,309,941
1,378,507
1,299,942
(16,181,019)
(11,378,811)
297,413
4,231,072
The Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019
FINANCIAL YEAR ENDED 30 JUNE 2019
Balance at 1 July 2018
(Loss) for the year
Exchange Difference
Total comprehensive (loss)
Transactions with equity holders in their capacity
as equity holders
Exchange Difference
Capital Raising
Shares Issued to Directors
Share based payments
Share issue costs
Balance at 30 June 2019
Contributed Equity
($)
Accumulated
Losses ($)
Capital Reserve
($)
Share-based
payment Reserve
($)
Foreign Currency
Translation
Reserve ($)
Total ($)
14,309,941
(11,378,811)
74,560
1,192,044
33,338
4,231,072
-
-
-
(4,802,208)
-
-
-
(4,802,208)
-
-
-
54,280
54,280
(4,802,208)
-
-
54,280
(4,747,928)
-
-
-
-
783,689
-
-
-
81,274
-
(61,274)
(20,000)
-
-
(13,286)
118,845
(74,979)
-
-
-
-
-
-
-
-
-
783,689
-
105,559
(74,979)
15,099,925
(16,181,019)
-
1,290,889
87,618
297,413
The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019
Contributed Equity
($)
Accumulated
Losses ($)
Capital Reserve
($)
Share-based
payment Reserve
($)
Foreign Currency
Translation
Reserve ($)
Total ($)
FINANCIAL YEAR ENDED 30 JUNE 2018
Balance at 1 July 2017
(Loss) for the year
Exchange Difference
Total comprehensive (loss)
Transactions with equity holders in their capacity
as equity holders
Capital Raising
Shares Issued to Directors
Share based payments
Share issue costs
Balance at 30 June 2018
10,354,758
(7,388,518)
178,683
1,238,503
(88,298)
4,295,128
-
-
-
(3,990,293)
-
(3,990,293)
4,000,000
178,683
16,500
(240,000)
-
-
-
-
-
-
-
-
(178,683)
74,560
-
-
-
-
-
-
(46,459)
-
-
(3,990,293)
121,636
121,636
121,636
(3,868,657)
-
-
-
-
4,000,000
-
44,601
(240,000)
14,309,941
(11,378,811)
74,560
1,192,044
33,338
4,231,072
The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 33
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Other receipts
CONSOLIDATED
Notes
30 June 2019 ($)
30 June 2018 ($)
113,777
36,816
51,278
-
Payments to suppliers and employees
(2,714,059)
(3,075,722)
Finance costs
Interest received
(2,006)
7,958
(17,411)
30,655
NET CASH USED IN OPERATING ACTIVITIES
20
(2,543,052)
(3,025,662)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Payments for intangible assets
Proceeds on sale of property, plant and equipment
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Repayment of borrowings
Payment of share issue costs
Proceeds from borrowings
NET CASH PROVIDED BY FINANCING ACTIVITIES
Net (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Effect of exchange rate changes on cash and cash
equivalents
-
-
-
-
783,689
-
(74,979)
96,287
804,997
(1,738,055)
2,212,737
(97,841)
(675,881)
2,697
(771,025)
4,000,000
(397,016)
(240,000)
23,494
3,386,478
(420,906)
2,637,363
-
(3,720)
Cash and cash equivalents at end of financial year
10
474,682
2,212,737
The Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The primary accounting policies adopted in the preparation of the Financial Statements are set out below. These
policies have been consistently applied to all years presented, unless otherwise stated.
(a)
General Information
Neurotech International Limited (Company) or (Entity) is a public Company limited by shares, incorporated in
Australia with operations in Malta. The Consolidated Financial Report of the Company as at and for the year
ended 30 June 2019 comprises the Company and its subsidiaries (together referred to as the ‘Consolidated
Entity’ or ‘Group’).
The Company is primarily involved in the research, design, development and manufacture quality medical
solutions and medical devices, through the use of hardware, software or technology of any kind, that improve
people’s quality of life.
The nature of the operations and principal activities of the Consolidated Entity are described in the Directors’
Report.
(b)
Basis of Preparation
The financial report is a general-purpose financial report which has been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the
Corporations Act 2001. Neurotech International Limited is a for profit entity for the purpose of preparing the
Financial Statements.
(i)
Compliance with IFRS
The Financial Statements of the Group also comply with International Financial Reporting Standards (IFRSs) and
interpretations adopted by the International Accounting Standard Board (IASB).
The Financial Statements were approved by the Board of Directors on 30th August 2019.
(ii)
Historical cost convention
The financial report has been prepared on an accrual basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis
of accounting has been applied.
All amounts are presented in Australian dollars, unless otherwise noted.
(iii)
Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(c)
Going Concern
The Directors are satisfied that the going concern assumption has been appropriately applied in preparing the
financial statements and the historical financial information has been prepared on a going concern basis, which
contemplates the continuity of normal business activity and the realisation of assets and the settlement of
liabilities in the normal course of business.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
These financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
For the year ended 30 June 2019 the Group made an operating loss of $4,802,208 (2018: loss of $3,990,293) and
had cash outflows from operating activities of $2,543,052 (2018: $3,025,662).
The consolidated entity’s ability to continue as a going concern is dependent on one or more of the following:
raising further capital at the parent or project level, material increased sales of its Mente devices and associated
revenue and/or sales of assets along with reducing costs and the cash impact of its costs. These conditions
indicate a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going
concern and therefore whether it will be able to pay its debts as and when they fall due and realise its assets
and extinguish its liabilities in the normal course of business.
The Directors believe that there are reasonable grounds to believe that the Company and consolidated entity
will continue as a going concern, after consideration of the following factors:
(i)
the Company has the ability to issue additional shares (or other securities) under the Corporations Act
2001 to raise further working capital and has been successful in doing this previously, as evidenced by
the successful capital raising during the financial year ended 30 June 2019;
(ii) the Company may be able to access funding for its activities at the project level via investments or
grants or a combination of both;
(iii) directors and other key management personnel may agree to accept equity in lieu of cash fees; and
(iv) the consolidated entity has the ability to scale down its operations in order to curtail expenditure, in
the event capital raisings are delayed or insufficient cash is available to meet projected expenditure.
The Directors have prepared a cashflow forecast for the next 12 month period reflecting the need for further
funding as mentioned above. While the Directors are confident that they will be able to raise further capital, the
funding, timing and extent is uncertain.
In the event that the funding of an amount necessary to meet the future budgeted operational and investing
activities of the Group is unavailable, the Directors would undertake steps to contain the operating and
investment activities as mentioned above.
Should the consolidated entity not be able to continue as a going concern, it may be required to realise its assets
and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements. The financial report does not include any adjustment relating to the
recoverability and classification of the asset carrying amounts or the classification of liabilities that might be
necessary should the consolidated entity not be able to continue as a going concern.
(d)
Significant Accounting Judgments, Estimates and Assumptions
The preparation of the Financial Statements requires Management to make judgments, estimates and
assumptions that affect the reported amounts in the Financial Statements. Management continually evaluates
its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgments and estimates on historical experience and on other various factors it believes
to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future
periods affected.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amount recognised in the Financial Statements are outlined
below:
1. Amortisation methods and useful life of intangible assets
The amortisation method used and the useful life of the Group’s intangible assets inherently results in the
amount of amortisation of such assets being an estimate.
Refer to Note 1(p) for disclosure of the types of assets that the Group recognises as intangible assets, the
amortisation methods employed and the useful lives of the assets.
2.
Impairment of assets
Goodwill, intangible assets that have an indefinite useful life and intangible assets not yet available for use are
not subject to amortisation and are tested annually for impairment or more frequently if events or changes in
circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating
units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of
the impairment at the end of each reporting period.
3. Share based payments
The Group measures the cost of equity settled transactions with employees by reference to the fair value of
equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes
option pricing model, inputs used in valuing share-based payments, including options, are estimates.
4. Depreciation methods and useful life of Property, Plant and Equipment
The depreciation method used, and the useful life of the Group’s Property, Plant and Equipment inherently
results in the amount of depreciation of such assets being an estimate.
Refer to Note 1(o) for disclosure of the depreciation methods employed and the useful lives of the assets.
5. Treatment of costs incurred for Research and Development
The Group’s consideration of whether its internal projects to develop medical devices are in a research phase
or development phase involves significant judgement.
The Group considers a project to be in a development phase when the following can be demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
there is intention to complete the project;
the existence of a market to be able to sell output resulting from the completion of the project;
how the intangible asset will generate probable future economic benefits;
there is adequate technical, financial and other resources available to complete the development and
to use or sell the intangible asset; and
expenditure attributable to the project can be reliably measured.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
When the above 6 criteria are met, the Group will recognise an intangible asset in relation to the project,
otherwise costs incurred to date on the project are expensed as incurred.
(e)
Principles of Consolidation
The Consolidated Financial Statements incorporate the assets and liabilities of all the subsidiaries that Neurotech
International Limited (‘the Parent Entity’) has the power to control the Consolidated Entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the Consolidated Entity and has the
ability to affect those returns through its power to direct the activities of the Consolidated Entity, the financial
and operating policies as at 30 June 2019 and the results of all subsidiaries for the year ended 30 June 2019. All
intercompany balances and transactions between the Group and the Consolidated Entity, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistencies with those policies applied by the Group.
Subsidiaries
Subsidiaries are all entities controlled by the Consolidated Entity. The Financial Statements of subsidiaries are
included in the Consolidated Financial Statements from the date that control commences until the date that
control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with
the policies adopted by the Group.
In the Company’s Financial Statements, investments in subsidiaries are carried at cost. The Financial Statements
of the subsidiary are prepared for the same reporting period as the Group, using consistent accounting policies.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
In preparing the Consolidated Financial Statements, all intercompany balances and transactions, income and
expenses and profit or losses resulting from inter-entity transactions have been eliminated in full. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
The investments in subsidiaries held by Neurotech International Limited are accounted for at cost in the separate
Financial Statements of the Group less any impairment charges. The acquisition of subsidiaries is accounted for
using the acquisition method of accounting. The acquisition method of accounting involves allocating the cost
of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities
assumed at the date of acquisition.
(f)
Foreign Currency translation
Functional and presentation currency
Items included in the Financial Statements of each of the Group entities are measured using the currency of the
primary economic environment in which the Entity operates (‘the functional currency’). The Consolidated
Financial Statements are presented in Australian dollars (A$), which is Neurotech International Limited’s
functional and presentation currency.
The functional currency of the subsidiaries of Neurotech International Limited incorporated in Malta is the Euro
(EUR€).
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Foreign currency transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency 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 ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined.
Translation of Foreign Operations
The Statement of Profit or Loss and Other Comprehensive Income is translated at the average exchange rates
for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity. On
disposal of the foreign entity, the deferred cumulative amount recognised in equity relating to that foreign
operation will be recognised in the Statement of Profit or Loss and Other Comprehensive Income.
(g)
Revenue recognition
The adoption of AASB15 has led the Group to consider its accounting policies with respect to revenue
recognition. Neurotech’s revenue is substantially from the sale of Mente devices, which to date are principally
sold through Distributors which Neurotech has Distribution Agreements with. Sales are recognised when control
of the products has transferred, being when the products are delivered to the distributor, the distributor has
full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could
affect the distributor’s acceptance of the products. Delivery occurs when the products have been shipped to the
specific location, the risks of obsolescence and loss have been transferred to the distributor, and either the
distributor has accepted the products in accordance with the distribution agreement, the acceptance provisions
have lapsed, or the group has objective evidence that all criteria for acceptance have been satisfied.
With the exception of devices which are defective, Distributors are not able to return devices to Neurotech, that
is, there is no “Right of Return”, consequentially it is not necessary for the Group to consider the probability of
units being returned which would lead to the recognition of a refund liability, and a right of return asset.
(h)
Other income
Interest Income
Interest income is recognised using the effective interest method. The effective interest method uses the
effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the
expected life of the financial asset.
Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received, and the group will comply with all attached conditions. Government grants relating to
the purchase of property, plant and equipment are included in non-current liabilities as deferred income and
are credited to profit or loss on a straight-line basis over the expected lives of the related assets.
Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(i)
Research and development
Research expenditure is recognised as an expense as incurred.
Costs incurred on development projects (relating to the design and testing of new or improved products) are
recognised as intangible assets when it is probable that the project will, after considering its commercial and
technical feasibility, be completed and generate future economic benefits and its costs can be measured reliably.
The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct
labour and an appropriate proportion of overheads. Other development expenditures that do not meet these
criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are
not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible
assets and amortised from the point at which the asset is ready for use.
(j)
Income Tax Expenses or Benefit
The income tax expense or benefit (revenue) for the period is the tax payable on the current period's taxable
income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences between the tax base of assets and liabilities and their
carrying amounts in the Financial Statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of
assets and liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to
apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on
initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that
at the time of the transaction did not affect either accounting profit or taxable profit. Deferred tax assets are
only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount
and tax bases of investments in controlled entities, associates and interests in joint ventures where the Parent
Entity is able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not be reversed in the foreseeable future. Current and deferred tax balances relating to amounts
are recognised directly in equity.
Neurotech International Limited and its resident subsidiaries have unused tax losses. However, no deferred tax
balances have been recognised, as it is considered that asset recognition criteria have not been met at this time.
(k)
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in
the Statement of Financial Position.
(l)
Inventories
Inventories consist of autism related neurofeedback medical equipment being held for resale and are valued
at the lower of cost and net realisable value.
Cost is determined on the first-in first-out basis. Net realisable value is the estimate of the selling price in the
ordinary course of business, less the expected selling expenses.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(m)
Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. Trade receivables are generally due for settlement
within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. The Group applies the AASB
9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all
trade receivables. Customers with heightened credit risk are provided for specifically based on historical default
rates and forward-looking information. Trade receivables are written off when there is no reasonable
expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others,
the failure of a debtor to engage in a repayment plan with the Group. Other receivables are recognised at
amortised cost, less any provision for impairment.
(n)
Financial Assets
Classification
All the Group’s financial assets are classified in the category of “Trade and other receivables”. Management
determines the classification of financial assets at initial recognition. The Group does not currently hold any
other financial assets.
Measurement
Loans and receivables are non‑derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for those with maturities greater than
12 months after the reporting period which are classified as non‑current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest rate method, less provision for impairment. The fair value of trade receivables and payables
is their nominal value less estimated credit adjustments.
(o)
Property, Plant and Equipment
Items of property, plant and equipment are initially recorded at historical cost less accumulated depreciation.
Depreciation is calculated on the straight-line method to write off the cost of the assets to their residual values
over their estimated useful life.
The annual rates used for this purpose, which are consistent with those used in previous years, are as follows:
Improvements to premises
Furniture and fittings
10%
20%
Computer equipment and software
20-25%
Medical and other equipment
25%
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that the future economic benefits associated with the item will flow to the Group and
the cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs
and maintenance are charged to the Statement of Profit or Loss and Other Comprehensive Income during the
financial year in which they are incurred.
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in the income statement. When revalued assets are sold, the amounts included in other reserves are transferred
to retained earnings.
(p)
Intangible assets
Project Development Costs
Development costs that are directly attributable to the design and testing of identifiable and unique medical
equipment products controlled by the Group are recognised as intangible assets when the following criteria are
met:
it is technically feasible to complete the product so that it will be available for use;
management intends to complete the product and use or sell it;
there is an ability to use or sell the product;
it can be demonstrated how the product will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use or sell the
product are available; and
the expenditure attributable to the product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the medical equipment product include the
development employee costs and an appropriate portion of relevant overheads. Other development
expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period. Medical
equipment product development costs recognised as assets are amortised over their estimated useful lives,
which does not exceed five years.
Patents and trademarks
Patents and trademarks are capitalised on the basis of the costs incurred to acquire and bring to use the
respective medical equipment. These costs are amortised over their estimated useful lives of 5 to 15 years.
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis
over the period of their expected benefit, being their finite useful life of up to 15 years and are carried at
cost less accumulated amortisation and impairment losses.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 5 years.
Website Development Costs
The Group capitalised certain costs associated with website development. Capitalisation of website development
costs begins at the start of the application development stage and ceases once testing is complete and the
website is placed in operation.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Additional costs may also be capitalised subsequent to the date the website is placed in operation if the
modifications result in additional functionality. Website development costs are amortised using the straight-line
method over the period of five years.
(q)
Trade and Other Payables
Liabilities are recognised for amounts to be paid in the future for goods or services received prior to the end of
the period, whether or not billed to the Group before reporting date. Trade accounts payable are normally
settled within 60 days.
Financial liabilities are initially measured at their fair value and subsequently measured at amortised cost using
the effective interest rate method.
Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged
or cancelled.
(r)
Borrowings
Borrowings are recognised initially at the proceeds received, net of issue costs incurred. In subsequent periods,
borrowings are stated at amortised cost using the effective yield method. Any difference between proceeds (net
of issue costs) and the redemption value is recognised in the Statement of Profit or Loss and Other
Comprehensive Income over the period of the borrowings using the effective yield method.
(s)
Employee Benefits
Short term Employee Benefit Obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected
to be settled wholly within 12 months after the end of the period in which the employees render the related
service are recognised in respect of employees’ service up to the end of the reporting period and are measured
at the amounts expected to be paid when the liabilities are settled. All other short-term employee benefit
obligations are presented as payables.
Other long-term Employee Benefit Obligations
The Group does not recognise a liability for annual leave at reporting date, annual leave taken during the course
of employment and annual leave paid to employees upon termination of employment is recognised in the
financial statements of the Group when the employee is paid for their leave.
Termination Benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognised
termination benefits at the earlier of the following dates:
(a) when the Group can no longer withdraw the offer of those benefits; and
(b) when the Entity recognised costs for a restructuring that is within the scope of AASB 137 and involves the
payment of terminations benefits.
In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based
on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the
end of the reporting period are discounted to present value.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(t)
Share-based payments
Share-based payments which have been granted to employees comprise of shares, share rights and share
options.
Shares
The value of shares granted and issued to key management personnel in a year is recognised as an employee
benefit expense with a corresponding increase in equity (share capital). The value of shares granted and vested
to key management personnel in one year, which will be issued in a future year are recognised as an employee
benefit expense with a corresponding increase in equity (share capital reserve). Upon issuing of the shares, the
value in the share capital reserve will be transferred to share capital.
The value of shares granted and in the process of vesting to key management personnel are recognised as an
employee benefit expense with a corresponding increase in equity (share based payments reserve). Upon
vesting and subsequent issue of the shares, the value in the share-based payments reserve will be transferred
to share capital.
The basis for the value recognised for each share is the price at the time when the terms of the grant are agreed
between the Group and the counter party.
Share rights
The value of share rights granted to key management personnel in a year is recognised as an employee benefit
expense with a corresponding increase in equity (share based payments reserve).
In the year in which the share rights become vested, the value of share rights which have vested will be
recognised in share capital reserve.
Upon issue of the related shares, the value in the share capital reserve is transferred to share capital.
The basis for the value recognised for each share right is the price at the time when the terms of the grant are
agreed between the Group and the counter party.
Share options
The fair value of options granted to employees (including Key Management Personnel) is recognised as an
employee benefit expense with a corresponding increase in equity (share-based payments reserve). The fair
value is measured at grant date and recognised over the period during which the employees become
unconditionally entitled to the options. The fair value at grant date is determined using a Black-Scholes option
pricing model that takes into account the exercise price, the term of the option, the vesting and performance
criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term
of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions (for example,
profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable. At each reporting date, the Entity revises its
estimate of the number of options that are expected to become exercisable. The employee benefit expense
recognised in each period takes into account the most recent estimate.
This estimate also requires determination of the most appropriate inputs to the valuation model including the
expected life of the share option, volatility and dividend yield and making assumptions about them.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(u) Share-based Payment Transactions for the acquisition of goods and services
Share-based payment arrangements in which the Group receives goods or services as consideration for its own
equity instruments are accounted for as equity-settled share-based payment transactions. The Group measures
the value of equity instruments granted at the fair value of the goods and services received, unless that fair value
cannot be measured reliably.
If the fair value of the goods or services received cannot be reliably measured, the transaction is measured by
the by reference to the fair value of the instruments granted.
(v)
Contributed Equity
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity
proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options
associated with the acquisition of a business are included as part of the purchase consideration.
(w)
Earnings or Loss per share
Basic earnings or loss per share are calculated by dividing the net profit or loss attributable to members of the
Parent Entity for the reporting period by the weighted average number of ordinary shares of the Group.
(x)
Fair Value
The fair values of financial assets and liabilities are determined in accordance with generally accepted pricing
models based on estimated future cash flow. There are currently no assets and liabilities which require fair
valuing under the measurement hierarchy. Due to their short-term nature, the carrying amounts of the current
receivables, current payables and current borrowings are assumed to approximate their fair value.
(y)
Goods and Services Tax
Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods
and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from,
or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial
Position.
Cash flows are included in the Statement of Cash Flow 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 authorities
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(z)
New and amended standards adopted by the Group
Australian Accounting Standards and Interpretations that have recently issued or amended but are not yet effective have not been adopted by the Group for the year ended
30 June 2019. These are outlined in the table below.
AASB
Reference
Title
AASB 16
Leases
Summary
Application Date of
Standard
Impact on Consolidated Financial
Report
Application
Date for Group
AASB 16 eliminates the operating and finance lease classifications for lessees
currently accounted for under AASB 117 Leases. It instead requires an entity to
bring most leases into its statement of financial position in a similar way to how
existing finance leases are treated under AASB 117. An entity will be required to
recognise a lease liability and a right of use asset in its statement of financial
position for most leases.
There are some optional exemptions for leases with a period of 12 months or less
and for low value leases.
Annual reporting
periods beginning
on or after 1
January 2019.
Lessor accounting remains largely unchanged from AASB 117.
To the extent that the entity, as
lessee, has significant operating
leases outstanding at the date of
initial application, 1 July 2019, right-
of-use assets will be recognised for
the amount of the unamortised
portion of the useful life, and lease
liabilities will be recognised at the
present value of the outstanding
lease payments.
1 July 2019
Thereafter, earnings before interest,
depreciation, amortisation and tax
increase because
(EBITDA) will
operating lease expenses currently
included in EBITDA will be recognised
instead as amortisation of the right-
of-use asset, and interest expense on
the lease liability. However, there will
be an overall reduction in net profit
before tax in the early years of a lease
because
and
interest charges will exceed the
current straight-line expense incurred
under AASB 117 Leases. This trend
will reverse in the later years.
amortisation
the
There will be no change to the
accounting treatment for short-term
leases less than 12 months and
leases of low value items, which will
continue to be expensed on a
straight-line basis.
There are no other standards that are not yet effective and that are expected to have a material impact on the Entity in the current or future reporting periods.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Segment Information
The Directors have considered the requirements of AASB 8 – Operating segments. Operating segments are
identified, and segment information disclosed on the basis of internal reports that are regularly provided to, or
reviewed by, the Group’s chief operating decision maker, which is the Board of Directors. In this regard, such
information is provided using similar measures to those used in preparing the consolidated statement of profit
or loss and other comprehensive income, consolidated statement of financial position and consolidated
statement of cash flows.
One segment is identified, being Medical Device Development and Distribution.
The segment ‘Medical Device Development and Distribution, represents the operations of the subsidiary
entities, being AAT Research & AAT Medical. The operation of the parent company Neurotech International
Limited is considered to be part of the ‘Medical Device Development’ segment as its sole purpose is to provide
financial, operational and strategic support the subsidiary entities.
3.
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue represents the value of medical equipment and services sold by the Group.
Sales Mente Products
4.
OTHER INCOME
Foreign Exchange Gain
Award winnings
Shipping of Sales Products
Interest Income
Government Grants
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
194,556
194,556
29,277
29,277
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
-
-
2,990
7,958
48,288
59,236
18,388
18,608
770
30,655
-
68,421
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.
EXPENSES
Cost of sales expenses
Cost of units sold (Mente Products)
Mente 3 production rejects
Obsolete Stock Written Off (Mente 2 units)
Employee Benefits Expense
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
62,512
10,566
73,078
290,666
363,744
29,435
-
29,435
47,528
76,963
The total employment costs, excluding share-based payments, for the financial year ended 30 June 2019 were
as follows:
Wages and salaries and related employment costs
Employer’s share of national insurance contribution
Recruitment and Redundancy payments
Less: Amounts capitalised as development costs
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
844,391
32,198
26,580
-
903,169
1,470,861
47,005
-
(138,858)
1,379,008
Obsolete Stock Expense
Obsolete stock expense represents a provision made against the carrying value of all Mente 3 products, such
that the carrying value has been written down to zero.
Corporate and Administration Expense
Corporate and Administration expenses include costs relating to, but not limited to: remuneration paid to Non-
Executive Directors, ASX listing fees, travel and accommodation, office rent and utilities and legal, audit and
accounting fees.
Impairment Expense
An impairment expense of $2,012,274 has been recognised for the year ended 30 June 2019. This amount relates
to the impairment of the Group’s range of Mente products, which were capitalised as an intangible asset.
Development costs are carried at cost less accumulated amortisation. The total amount of development costs
has been subject to impairment testing. If impairment indicators are identified, the recoverable amount is
estimated using the higher of value-in-use methodology or fair value less costs of disposal. The board has
determined that there is full impairment at 30 June 2019 and accordingly the net carrying value has been written
down to nil (2018: $1,640,641). The impairment expense recognised is detailed in Note 14.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6.
SHARE BASED PAYMENTS
Share Rights
During the financial year shares to the value of $81,274 were issued to Directors in relation to bonus and
incentive amounts contractually payable. These amounts were expensed during the year ended 30 June 2019
and 30 June 2018. Details of these share issues and the expense recognized in the year ended 30 June 2019 are
as follows:
Name
Wolfgang Storf
David Cantor
Total
Date of issue
No. of shares
Value $
Expense $
03/12/2018
466,000
74,560
04/12/2018
142,857
6,714
81,274
7,191
6,714
13,905
As at 30 June 2019 there are no outstanding share rights, vested nor unvested (30 June 2018: Nil).
Options
During the financial year, options were agreed to be issued to the CEO (Peter Griffiths) in December 2018. These
options are subject to shareholder approval at the November 2019 Annual General Meeting (“AGM”). The
approval at the 2019 AGM will determine the grant date.
These share based payments have been valued based on the 30 June 2019 share price and volatility as the best
estimate of the value of the share based payments at the date they will be granted. The value of the share based
payments will be updated once shareholder approval is obtained in the 2019 AGM. However, if shareholder
approval is not obtained then the amounts recognized to date will be reversed through profit or loss.
The assessed fair value of these options has been determined using a Black-Scholes option pricing model with
the following inputs:
Input
Tranche 1
Tranche 2
Number of options
6,500,000
5,429,754
Underlying share price
Exercise price
Expected volatility
Expiry date (years)
Expected dividends
Risk free rate
Value
$0.0190
$0.0589
100%
5.0
-
1.03%
71,221
$0.0190
$0.0199
100%
5.0
-
1.03%
76,074
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The options vest over the period of service up to 1 December 2020 and accordingly the options have been
expensed over the vesting period. The amounts expensed during the year ended 30 June 2019 are shown below.
Name
Valuation date*
No. of options
Value $
Peter Griffiths (Tranche 1)
30/06/2019
6,500,000
Peter Griffiths (Tranche 2)
30/06/2019
5,429,754
Total
11,929,754
44,317
47,337
91,654
* Options are subject to shareholder approval which will occur subsequent to year end, therefore 30 June 2019 has been
used as the valuation date.
Recognition of vesting of options
The 466,000 options granted on 3 April 2016 are held by the Group’s CEO Wolfgang Storf and were granted
under terms of his executive services agreement entered into on 31 March 2016. The executive services
agreement provides that one third of the options vest every year, with the first third having vested on 3
November 2017.
The sole vesting condition relating to these options is Mr Storf’s continued employment. Following the
resignation of Wolfgang Storf on 26 November 2018, the options vested in full.
Short term incentive (STI) transactions with previous CEO
On 30 November 2017, Neurotech International Limited issued 471,277 shares to the Group’s CEO Wolfgang
Storf. These shares were issued to settle the STI entitlement earned by Mr Storf in relation to the period April
2016 to December 2016. This is therefore not share based payment in accordance with AASB 2 Share-Based
Payments, however it is a transaction settled through the issue of shares.
The value of the STI entitlement for the 9-month period, $112,864 (€76,500) was settled through the issue of
471,277 shares.
The value of the STI entitlement in AUD and the number of shares was determined using the average EUR:AUD
exchange rate for the period 1 April 2016 to 31 December 2016, and the 3 VWAP of the Group’s shares to 17
May 2017, being the day the Mr Storf agreed to receive his bonus in shares, respectively.
In relation to the 2018 financial year, the Group’s CEO was paid an STI of $61,575 (€40,000) which was paid in
cash during the year. No further STI was granted or will be granted to Mr Storf in relation to the 2019 financial
year.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
INCOME TAX
The current taxation charge comprises taxation at 27.5% on the profit generated by one of the Group’s entities
as adjusted for tax purposes.
A deferred taxation asset arising on temporary differences and unused tax losses has not been recognised in
these financial statements.
The numerical reconciliation between tax expense and the
accounting loss before income tax multiplied by the Group's
applicable income tax rate is as follows:
Accounting (loss) before income tax
Income tax benefit calculated at the Group's statutory income tax
rate of 27.5% (2018: 27.5%)
Add Tax effect on amounts which are assessable/not tax
deductible:
Capital expenses to be amortised over 5 years
Non assessable income
Non-deductible expenses
Timing differences
Less Tax effect on amounts which are tax deductible:
Black hole expenditure
Tax losses not brought to account
Income tax benefit
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
(4,802,208)
(1,320,607)
(3,990,293)
(1,097,330)
-
-
-
-
-
1,320,607
-
34,714
-
189,435
30,713
(95,777)
938,245
-
The total amount of tax losses not brought to account is $3,485,641 (2018: $2,165,034).
The benefit for tax losses will only be obtained if:
(a) the Group derives future assessable income of a nature and an amount sufficient to enable the benefit from
the deductions for the losses to be realised;
(b) the Group continues to comply with the conditions for deductibility imposed by Law; and
(c) no changes in tax legislation adversely affect the ability of the Group to realise these benefits.
8.
FINANCIAL RISK MANAGEMENT
i. Overview
The financial risks arising from the Group’s operations comprise market, liquidity and credit risk. These risks
arise in the normal course of business, and the Group manages its exposure to them in accordance with the
Group’s portfolio risk management strategy.
The objective of the strategy is to support the delivery of the Group’s financial targets while protecting its future
financial security and flexibility by taking advantage of the natural diversification provided by the scale, diversity
and flexibility of the Group’s operations and activities.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
This note presents information about the Group's exposure to each of the above risks, their objectives, policies
and processes for measuring risk and the management of capital.
The Group's Risk Management Framework is supported by the Board. The whole Board is responsible for
approving and reviewing the Group's Risk Management Strategy and Policy. Management is responsible for
monitoring appropriate processes for identifying, monitoring and managing significant business risks faced by
the Group and considering the effectiveness of its internal control system.
The Board has established an overall Risk Management Policy which sets out the Group’s system of risk
oversight, management of material business risks and internal control.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
474,682
30,621
505,303
229,260
126,075
355,335
2,212,737
51,919
2,264,656
324,466
29,788
354,254
ii. Financial Risk Management Objectives
The overall financial Risk Management Strategy focuses on the unpredictability of the finance markets and seeks
to minimise the potential adverse effects on financial performance and protect future financial security.
iii. Credit Risk
Credit risk is the risk of the financial loss to the Group if counterparty to a financial instrument fails to meet its
contractual obligations and the risk arises principally from the Group's cash and cash equivalents, deposits with
banks and financial institutions, and receivables.
Cash at bank is placed with reliable financial institutions. For banks and financial institutions, the Group banks
only with financial institution with high quality standing or rating.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have
been grouped based on shared risk characteristics and the days past due. Trade receivables are written off when
there is no reasonable expectation of recovery. Impairment losses on trade receivables are presented as net
impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited
against the same line item.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Trade receivables
Counterparties without external credit rating, past due but not
impaired
Existing customers (less than 6 months) with no defaults in the
past
Existing customers (more than 6 months) with no defaults in
the past
Counterparties without external credit rating, past due and
impaired
Gross Value
Doubtful Debt Provision
Net Value
Other receivables
Security Deposit
Other receivables
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
-
-
1,777
19,774
80,779
(80,779)
-
8,040
(7,086)
954
1,777
20,728
28,844
-
28,844
30,240
851
31,091
Total trade and Other receivables
30,621
51,819
Cash at bank and Commercial Bills **
Cash at bank – St George Bank and Bank of Valletta Plc.
Petty cash account
HiFX Foreign Exchange – Euro denominated
Commercial Bills – St George Bank
474,312
370
-
-
474,682
195,695
-
1,010,768
1,006,274
2,212,737
**Bank of Valletta is currently rated ‘BBB’ by an international rating agency and St George Bank has an “AA” credit rating,
HiFX is a 100% owned subsidiary of Euronet Worldwide Inc (NASDAQ: EEFT) which has a market capitalization of USD$4.96
billion as of 28 August 2018. Neither HiFX nor Euronet have a published credit rating.
Security deposits relate to manufacturing of Mente Autism units and a security deposit for the Group’s premises
in Malta.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
iv. Liquidity Risk
Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet their
obligations to repay their financial liabilities as and when they fall due.
Ultimate responsibility for Liquidity Risk Management rests with the Board of Directors. The Board has
determined an appropriate Liquidity Risk Management Framework for the management of the Group’s short,
medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves and continuously monitoring budgeted and actual cash flows and matching the
maturity profiles of financial assets, expenditure commitments and liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months
equal their carrying amounts as the impact of the discounting is not significant.
Contractual maturities of
financial liabilities
Less than
6 months ($)
6 – 12
months ($)
More than 12
months ($)
Total ($)
Carrying
Amount ($)
Group - at 30 June 2019
Trade payables
Borrowings
Total
Group - at 30 June 2018
Trade payables
Borrowings
Total
154,220
126,075
280,295
127,296
29,788
157,084
-
-
-
-
-
-
-
-
-
-
-
-
154,220
126,075
280,295
127,296
29,788
157,084
154,220
126,075
280,295
127,296
29,788
157,084
The Group has an unsecured General Banking Facility of €60,000 ($94,578) by Bank of Valletta P.L.C., which was
drawn to €48,405 ($78,335) at 30 June 2019.
As at 30 June 2019, the Group owed €29,500 ($47,740) for funds advanced by an entity related to Mr Winton
Willesee, a director of the Parent company. This advance was repaid during July 2019, and no interest was
payable.
v. Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates may affect the Group’s
income or the value of its holdings of financial instruments. The objective of Market Risk Management is to
manage and control market risk exposures within acceptable parameters, while optimising return.
vi. Foreign Exchange Risk
The Group is exposed to currency risk on financial assets or liabilities that are denominated in a currency other
than the respective functional currencies of the Group's, the Australian Dollar (AUD) for Parent Entity and Euro
(EUR) for the subsidiaries of Consolidated Entity.
The Parent Entity which has a functional currency of Australian Dollars has no exposure to foreign exchange risk
as there are no financial assets or liabilities denominated in a foreign currency (30 June 2018: $1,010,768). The
subsidiaries of the of the Parent Entity, which have a functional currency of the Euro (EUR) have no exposure to
foreign exchange risk as there are no financial assets or liabilities denominated in a foreign currency (30 June
2018: nil).
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
vii. Interest Rate Risk
The Group’s exposure to interest rates primarily relates to the Group’s cash and cash equivalents.
As the Group has no significant interest-bearing assets, its income and operating cash flows are substantially
independent of changes in market interest rates. The Group has a low level of interest bearing liabilities and as
such does not actively manage exposure to interest rate risk
Profile
At the reporting date, the interest rate profile of the Group’s and the Entity’s interest bearing financial
instruments are:
Variable Rate Instruments
Financial Assets
Financial Liabilities
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
474,682
(78,335)
396,347
2,212,737
(29,788)
2,182,949
As at 30 June 2019, the Group had net cash of A$396,347 comprising borrowings of A$78,335 (EUR 48,405), and
cash reserves of A$474,682 (EUR 2,213 and AUD 470,730).
The average interest rates on the Group’s borrowings were as follows:
Bank overdrafts
Bank loans
Maturity of interest-bearing loans and borrowings
Repayable on demand
Less than 6 months
Between 1 and 2 years
Between 2 and 5 years
5 years and over
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
5.65%
-
5.65%
-
78,335*
29,788*
-
-
-
-
-
-
-
-
*AUD equivalent values of borrowings denominated in Euros.
The Group’s borrowings are represented by an overdraft which is repayable on demand. This overdraft was
repaid in July 2019.
The Group’s exposure to interest rate risk and effective weighted average interest rate by maturing periods is
set out in tables below. All cash balances and borrowings are subject to a floating interest rate. The Group does
not earn interest on cash held in the EUR currency, and the below stated weighted average interest rate reflects
this.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2019
Cash and cash
equivalents
Borrowings
30 June 2018
Cash and cash
equivalents
Borrowings
Weighted Average
Effective Interest Rate
Cash Available
for use
Borrowings Payable
on Demand
Total
0.57%
474,682
-
5.65%
-
78,335
474,682
78,335
Weighted Average
Effective Interest Rate
Cash Available
for use
Borrowings Payable
on Demand
Total
0.57%
2,212,737
-
2,212,737
5.65%
-
29,788
29,788
Up to the end of the reporting period, the Group did not have any hedging policy with respect to interest rate
risk as exposure to such risk was not deemed to be significant by the directors since these assets are of a short-
term nature. Management considers the potential impact on profit or loss of a defined interest rate shift that is
reasonably probable at the end of the reporting period to be immaterial.
Cash Flow Sensitivity Analysis for Variable Rate Instruments
The Board’s assessment of a reasonably possible change in interest rates relating to the Company’s Cash and
Cash equivalents and borrowings is disclosed in the table below
Cash and cash equivalents
Borrowings
Number of basis points
25
100
Management considers the potential impact on profit or loss of a reasonably possible change in interest rates
at the end of the reporting period to be immaterial based on the current amounts of cash and cash equivalents
and borrowings.
9.
CAPITAL MANAGEMENT
When managing capital, the Board’s objective is to ensure the Group continues as a going concern as well as to
maintain optimal returns to Shareholders and benefits for other Stakeholders. The Board also aims to maintain
a capital structure that ensures the lowest cost of capital available to the Group.
The Board is constantly adjusting the capital structure to take advantage of favourable costs of capital or high
return on assets. As the market is constantly changing Management may issue new shares, sell assets to reduce
debt.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position although there is no formal
policy regarding gearing levels whilst this position has not changed.
The Group has no formal financing and gearing policy or criteria during the year having regard to the early status
of its development and low level of activity. This position has not changed from the previous year.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the Consolidated Statement of Cash Flows comprise the following
Consolidated Statement of Financial Position amounts:
Cash at Bank and on hand
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
474,682
474,682
2,212,737
2,212,737
No amount of the Group’s Cash at bank and on hand is restricted (30 June 2018: Nil). Refer to Note 8 Financial
Risk Management for risk exposure analysis for Cash and cash equivalents.
11.
TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for non-recovery
Net Trade receivables
Security Deposits
GST/VAT/Sales Tax Receivable
Other receivables
Trade and Other receivables
Prepayments
12.
INVENTORIES
Raw Materials
Finished Goods
Provision for obsolescence
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
82,555
(80,778)
1,777
28,844
138,171
-
168,792
9,274
178,066
20,728
-
20,728
30,240
124,831
851
176,650
131,523
308,173
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
140,236
154,707
(294,943)
-
60,767
10,214
-
70,981
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
PROPERTY, PLANT AND EQUIPMENT
Year ended 30 June 2019
Balance at 1 July 2018, net of accumulated depreciation
Disposals/Write off
Depreciation expense
Balance at 30 June 2019, net of accumulated depreciation
Year ended 30 June 2018
Balance at 1 July 2017, net of accumulated depreciation
Additions
Movement in foreign currency
Disposals/Write off
Depreciation expense
Balance at 30 June 2018, net of accumulated depreciation
Balance at 30 June 2018
Cost
Accumulated Depreciation
Net carrying amount as at 30 June 2018
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
Improvements to
premises
Medical and other
equipment
Computer
equipment and
software
Furniture and
fittings
139,406
(139,406)
-
-
101,008
(101,008)
-
-
38,058
(38,058)
-
-
95,728
(95,728)
-
-
Improvements to
premises
Medical and other
equipment
Computer
equipment and
software
Furniture and
fittings
166,583
25,306
9,630
(41,877)
(20,236)
139,406
178,898
(39,492)
139,406
104,429
37,754
5,243
(640)
(45,778)
101,008
218,914
(117,906)
101,008
47,095
5,663
2,489
(1,715)
(15,474)
38,058
75,242
(37,184)
38,058
145,997
29,118
7,907
(47,344)
(39,950)
95,728
169,033
(73,305)
95,728
Total
374,200
(374,200)
-
-
Total
464,104
97,841
25,269
(91,576)
(121,438)
374,200
642,087
(267,887)
374,200
PAGE 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14.
INTANGIBLE ASSETS
Year ended 30 June 2019
Website
Mente
Development
Trademarks
Patents
Total
Balance at 1 July 2018, net of amortisation
27,377
1,575,327
Additions
Movement in foreign currency
Impairment
Assets written off
Amortisation expense
Balance at 30 June 2019, net of accumulated amortisation
-
-
-
(27,377)
-
-
-
18,537
(1,593,864) 1
-
-
-
-
-
-
-
-
-
-
37,937
1,640,641
-
446
-
(36,363)
(2,020)
-
-
18,983
(1,593,864)
(63,740)
(2,020)
-
1 This amount is the value of the Group’s Mente products which was recognised as an intangible asset at 30 June 2018. During the financial year the Group has impaired
this asset in full in accordance with AASB 136 due to significant changes with an adverse effect on the entity have taken place during the period, or are expected to take
place in the near future, in the extent to which, or manner in which, an asset is used or is expected to be used.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. INTANGIBLE ASSETS (CONTINUED)
Year ended 30 June 2018
Balance at 1 July 2017, net of amortisation
Additions
Movement in foreign currency
Impairment
Assets written off
Amortisation expense
Balance at 30 June 2018, net of accumulated amortisation
Balance at 30 June 2018
Cost
Amortisation
Net carrying amount as at 30 June 2018
Website
Mente
Development
Trademarks
Patents
Total
42,882
-
2,180
-
-
(17,685)
27,377
79,547
(52,170)
27,377
1,354,879
675,881
72,976
(137,578) 1
(3,300)
(387,531)
1,575,327
2,096,720
(521,393)
1,575,327
1,349
-
82
-
(1,496)
65
-
2,758
(2,758)
-
39,530
-
3,461
-
(1,154)
(3,900)
37,937
59,900
(21,963)
37,937
1,438,640
675,881
78,699
(137,578)
(5,950)
(409,051)
1,640,641
2,238,925
(598,284)
1,640,641
1 This amount is the value of the Group’s Mente Pro project which was recognised as an intangible asset at 30 June 2017, during the financial year ended 30 June 2018 the
Group has impaired this asset in full.
Significant accounting judgement and estimation
Development costs are carried at cost less accumulated amortisation. The total amount of development costs has been subject to impairment testing. If impairment indicators
are identified, the recoverable amount is estimated using the higher of value-in-use methodology or fair value less costs of disposal. The board has determined that there is
full impairment at 30 June 2019 and accordingly the net carrying value has been written down to zero (2018: $1,640,641).
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15.
PAYABLES
Trade payables
Accrued expenses
Other payables
16.
INTEREST-BEARING LOANS AND BORROWINGS
Current Borrowings
Bank overdrafts
Loan from Director related entity
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
154,220
75,040
-
229,260
127,296
120,398
98,178
345,872
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
78,335
47,740
126,075
29,788
-
29,788
As at 30 June 2019, the Group owed €29,500 ($47,740) for funds advanced by an entity related to Mr Winton
Willesee, a director of the Parent company. This advance was repaid during July 2019, and no interest was
payable.
Risk exposure
Refer to Note 8 above for risk disclosures.
17.
CONTRIBUTED EQUITY
CONSOLIDATED
2019 (Shares)
2018 (Shares)
2019 ($)
2018 ($)
Ordinary Shares
Total Share Capital
135,743,869
109,012,046
15,099,925
14,309,941
135,743,869
109,012,046
15,099,925
14,309,941
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(a)
Movements of share capital during the period
Date
Details
No of shares
Issue price($)
$
Opening Balance as at 01/07/2017
25.10.2017
Share Placement – Tranche 1
30.11.2017
Share Placement – Tranche 2
30.11.2017
Cost of Share Issue
30.11.2017
Issue of shares to Wolfgang Storf
30.11.2017
Issue of shares Adrian Attard Trevisan
30.11.2017
Issue of shares for provision of services
Closing Balance as at 30/06/2018
03.12.2018
Issued to Wolfgang Storf
04.12.2018
Issued to David Cantor
88,035,112
13,205,266
6,794,734
471,277
411,371
94,286
109,012,046
466,000
142,857
25.02.2019
Issue of shares pursuant to prospectus
26,122,966
25.02.2019
Cost of Share Issue
0.20
0.20
0.24
0.16
0.175
0.16
0.047
0.03
10,354,758
2,641,053
1,358,947
(240,000)
112,864
65,819
16,500
14,309,941
74,560
6,714
783,689
(74,979)
Closing Balance as at 30/06/2019
135,743,869
15,099,925
Ordinary Shares
The holder of Ordinary Shares is entitled to participate in dividends and the proceeds on winding up of the Group
in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to
one vote. Ordinary Shares have no par value and the Group does not have a limited amount of authorised capital.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18.
OTHER RESERVES
CONSOLIDATED
Capital Reserve
($)
Share Based Payments
Reserve ($)
Foreign Currency
Translation Reserve ($)
Balance at 30 June 2017
178,683
1,238,503
Foreign exchange movement
-
-
Issue of shares to Wolfgang Storf
(112,864)
-
Issue of shares to Adrian Attard Trevisan
(65,819)
-
Vesting of share-based payments
-
28,101
Issue of shares to Wolfgang Storf
74,560
(74,560)
Balance at 30 June 2018
74,560
1,192,044
Foreign exchange movement
-
-
Issue of shares to Directors
(74,560)
13,905
Issue of options to Directors
-
91,654
(88,298)
121,636
-
-
-
-
33,338
54,280
-
-
Issue of shares to Directors
-
(6,714)
-
Balance at 30 June 2019
-
1,290,889
87,618
(a)
Capital Reserve
The capital reserve is used to record the value of the shares which have been agreed to issue but have not yet
been issued.
Shares issued to Wolfgang Storf
The shares issued to Mr Wolfgang Storf were the settlement of his performance bonus relating to the 9 month
period 1 April 2016 to 31 December 2016. Shareholders approved the issue of these shares at the Annual General
Meeting which was held on 23 November 2018.
Shares issued to Dr Adrian Attard Trevisan
Shares issued in the prior period to Dr Adrian Attard Trevisan were for the settlement of performance rights
which vested on 1 April 2017, being the date that ceased as an employee of the Group and became a non-
executive director.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Movements in share rights during the period
Date
Details
No of rights
Issue price ($)
Opening Balance as at 01/07/2017
411,371
$
65,819
30.11.2017
Settlement share rights, issue of shares
(411,371)
0.16
(65,819)
Closing Balance as at 30/06/2018
Closing Balance as at 30/06/2019
-
-
-
-
(b)
Share-based payments Reserve
The share-based payments reserve represents the value of options and share rights issued to key management
personnel, vendors and for services in relation to capital raisings. The share-based payments reserve is used to
record the value of the share-based payments provided to employees, consultants and for options issued
pursuant to any acquisition or in exchange for services. Further detail on share-based payments is provided at
Note 6.
(c)
Foreign Currency Reserve
The foreign currency reserve records foreign currency differences arising from the translation of Financial
information of the Group’s Maltese subsidiaries which have a functional currency of the Euro.
19.
ACCUMULATED PROFIT/(LOSS)
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
Accumulated (loss) at the beginning of the year
Comprehensive (loss) attributable to shareholders
(11,378,811)
(4,802,208)
(7,388,518)
(3,990,293)
Accumulated (loss) at the end of the year
(16,181,019)
(11,378,811)
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
CASH FLOW INFORMATION
Reconciliation of cash flow from operating activities with the
loss from continuing operations after income tax:
Non-cash flows in profit from ordinary activities
Net (Loss) after Income Tax
Depreciation & amortisation
Share based payment
Write off of loan receivable
Cost of rejected inventory and stock trade ins
Obsolete stock written off
Impairment of intellectual property
Fixed assets write off
Changes in assets & liabilities
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in inventories
(Increase)/Decrease in prepayments
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in exchange rate movements
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
(4,802,208)
(3,990,293)
-
105,559
-
-
-
1,640,641
374,200
130,107
70,981
-
(116,612)
54,281
530,488
44,601
10,697
58,000
47,528
137,578
54,492
131,517
9,765
(108,377)
63,637
(15,295)
Cash flow used in Operating Activities
(2,543,052)
(3,025,662)
21.
INTERESTS IN OTHER ENTITIES
Ownership Interest
held by the Group
Name of Entity
AAT Research Ltd
Place of business/country
of incorporation
2019
Malta
100%
2018
100%
Principal Activities
Parent Group of AAT
Medical Ltd, AAT
Intellectual Property Ltd
and AAT Services Ltd
AAT Medical Ltd
Malta
100%
100%
AAT Intellectual Property Ltd
Malta
0%
100%
Executing medical
research projects and
Developing novel
technological devices that
are marketable
Publishing, registering
and maintaining
intellectual property
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
There are no matters or circumstances that have arisen since the reporting date.
23.
REMUNERATION OF AUDITOR
During the year the following fees were paid or payable for services provided by the Auditor of the Entity and
its related parties.
Audit and Other Assurance Services
BDO Audit (WA) Pty Ltd
Total remuneration for Audit and Other Assurance Services
Other Service
Non auditing service - BDO Corporate Finance (WA) Pty Ltd
Total remuneration for Other Service
24.
COMMITMENTS
Not later than one year
Later than one year but not later than five years
Later than five years
TOTAL
Office Lease Commitment
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
36,977
36,977
2,006
2,006
39,364
39,364
5,345
5,345
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
92,473
7,706
-
100,179
223,254
57,650
-
280,904
The Group has an Office Lease Agreement in respect of a premise within the Malta Life Sciences Park in San
Gwann, Malta (Office Lease).
The Office Lease is for a term of 5 years commencing on 29 July 2015 and expiring on 29 July 2020. The Group
has an option to extend the term for a further 5 years, and the disclosure above does not include amounts that
would be payable under this optional term.
The fee for the lease is €57,141 per annum, exclusive of VAT. At 30 June 2019, the commitment for the period
to 31 July 2020 is €61,903 (A$100,179).
25.
LOSS PER SHARE
The calculation of basic loss per share at 30 June 2019 was based on the loss attributable to ordinary
Shareholders of $4,802,208 (2018: $3,990,293) and a weighted average number of ordinary shares outstanding
during the year of 118,311,905 (2018: 101,523,862).
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basic loss per share (cents per share)
(4.06)
(3.93)
30 June 2019 ($)
30 June 2018 ($)
(Loss) used in the calculation of Earnings (Loss) Per Share
(4,802,208)
(3,990,293)
Weighted average number of ordinary shares
118,311,905
101,523,862
Effect of dilutive securities: Share options are not considered dilutive as the conversion of options to ordinary
shares will result in a decrease in the net loss per share.
26.
CONTINGENT LIABILITIES
The Board is not aware of any circumstances or information, which leads them to believe there are any other
material contingent liabilities outstanding as at 30 June 2019.
27.
FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
At 30 June 2019 and 30 June 2018, the carrying amounts of financial assets and financial liabilities classified with
current assets and current liabilities respectively approximated their fair values due to the short-term maturities
of these assets and liabilities.
The fair values of non-current financial assets and non-current financial liabilities are not materially different
from their carrying amounts.
28.
RELATED PARTY DISCLOSURES
Parent Entity
The legal Parent Entity of the Group is Neurotech International Limited (NTI). NTI owns 100% of the issued
ordinary shares of AAT Research Limited (directly), AAT Medical Limited, and AAT Intellectual Property Limited
(indirectly) which are the subsidiaries of AAT Research Limited. All subsidiaries are incorporated in Malta.
Wholly-owned Group transactions
Loans made by Neurotech International Limited (NTI) to wholly-owned subsidiary companies are contributed to
meet required expenditure payable on demand and are not interest bearing.
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payment
30 June 2019 ($)
30 June 2018 ($)
505,334
2,069
143,537
105,559
756,499
1,038,086
-
53,878
28,101
1,120,065
Detailed remuneration disclosures for Directors and Executives for the year to 30 June 2019 are provided in the
Remuneration Report on pages 14 to 25.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Transactions with other related parties
Transactions between related parties are on normal commercial terms and conditions no more favorable than
those available to other parties unless otherwise stated.
The following transactions occurred with related parties for 30 June 2019.
Administration fee to Tribis Pty Ltd
Administration fee to Azalea Consulting Pty Ltd
Bookkeeping and accounting services to Valle Corporate Pty
Ltd
End of period
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
82,500
8,970
2,277
93,747
90,000
-
-
90,000
Notes in relation to the table of related party transactions.
Payments to Tribis Pty Ltd (director related entity of Simon Trevisan) for corporate administration services
including company secretarial and accounting services and front and registered office services;
Payments to Azalea Consulting Pty Ltd (director related entity of Winton Willesee) for corporate administration
services including company secretarial and accounting services and front and registered office services;
Payments to Valle Corporate Pty Ltd (director related entity of Winton Willesee) for bookkeeping and financial
reporting services fees.
Loans to/from related parties
Loans to Key Management Personnel
Beginning of period
Foreign Exchange movement
Debt write off
End of period
CONSOLIDATED
30 June 2019 ($)
30 June 2018 ($)
-
-
-
-
10,179
518
(10,697)
-
The above loan related to Dr Adrian Attard Trevisan, a non-executive director of the Group who retired from
the Board on 27 June 2018.
As at 30 June 2019, the Group owed €29,500 ($47,740) for funds advanced by an entity related to Mr Winton
Willesee, a director of the Parent company. This advance was repaid during July 2019, and no interest was
payable.
There were no other related parties’ transactions to individual or Directors of the Group during the period
ended 30 June 2019.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29.
PARENT ENTITY INFORMATION
The following details information related to the Parent Entity, Neurotech International Limited, as at 30 June
2019. The information presented here has been prepared using consistent accounting policies as presented in
Note 1.
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Contributed equity
Reserve
(Accumulated losses)
Total Equity
30 June 2019 ($)
30 June 2018 ($)
476,578
-
2,941,987
1,368,731
476,578
4,310,718
143,120
-
143,120
333,458
50,564
-
50,564
4,260,154
19,048,910
18,258,926
1,434,765
1,266,604
(20,150,217)
(15,265,376)
333,458
4,260,154
Profit/(loss) for the year
Other comprehensive profit/(loss) for the year
(4,884,841)
(3,838,408)
-
-
Total Comprehensive profit/(loss) for the Year
(4,884,841)
(3,838,408)
There are no other separate commitments and contingencies for the parent entity other than Management
commitments stated in Note 24 or the Group as at 30 June 2019.
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 69
DIRECTORS’ DECLARATION
In the opinion of the Directors of Neurotech International Limited (Group):
(a)
the Financial Statements, comprising the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of financial position, consolidated statement of cash
flows, consolidated statement of changes in equity, and Notes set out on pages 30 to 69, are in
accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of their
performance, for the financial period ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and Corporations Regulations 2001; and other mandatory professional
reporting requirements.
(b)
(c)
the Financial Report also complies with International Financial Reporting Standards as disclosed in Note
1; and
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the
Financial Officer for the financial period ended 30 June 2019.
Signed in accordance with a resolution of the Directors.
Winton Willesee
Non-Executive Director
Dated at Perth, Western Australia, this 30th August 2019
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 70
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Neurotech International Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Neurotech International Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2019, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
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 Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 (c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Accounting for share based payments
Key audit matter
How the matter was addressed in our audit
During the year the Company agreed to issue share
Our procedures included, but were not limited to the
options to the Company’s Managing Director, the issue
following:
of these options are subject to shareholder approval
which is to be obtained subsequent to year end. These
have been accounted for as share-based payments in
the year ended 30 June 2019 and disclosed in Note 6 of
the financial report.
Share-based payments are a complex accounting area
and due to the judgemental estimates used in
determining the fair value of the share-based payments
in accordance with AASB 2: Share Based Payments, we
consider management’s calculation of the share based
payments expense to be a key audit matter.
(cid:127)
Reviewing relevant supporting
documentation to obtain an understanding of
the contractual nature, terms and conditions
of the share-based payment arrangements;
(cid:127)
Considering the appropriateness of the
methodology and date of valuation used by
management to assess the fair value of the
share-based payments;
(cid:127)
(cid:127)
(cid:127)
Involving our valuation specialists, to assess
the reasonableness of management’s
valuation inputs in respect of volatility;
Assessing the reasonableness of the share-
based payment expense; and
Assessing the adequacy of the related
disclosures in Note 1 and 6 of the financial
report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 25 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Neurotech International Limited, for the year ended 30
June 2019, 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.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 30 August 2019
INDEPENDENT AUDIT REPORT
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 23 August 2019.
1.
Quotation
Listed securities in Neurotech International Limited are quoted on the Australian Securities Exchange under ASX
code NTI (Fully Paid Ordinary Shares).
2.
Voting Rights
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
(a)
(b)
at a meeting of members or classes of members each member entitled to vote may vote in
person or by proxy or by attorney; and
on a show of hands, every person present, who is a member has one vote, and on a poll every
person present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options on issue.
3.
Distribution of Equity Securities:
i)
Fully paid Ordinary Shares
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
25
149
128
439
203
944
6,546
476,760
1,049,231
18,187,042
116,024,290
135,743,869
%
-
0.35
0.77
13.40
85.47
100.00%
On 23 August 2019, there were 541 holders of unmarketable parcels of less than 6,592,161 ordinary shares
(based on the closing share price of $0.014).
ii)
Unlisted Options exercisable at $0.20 on or before 30 November 2020
Shares Range
Holders
Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
-
-
-
-
8
8
1Holders who hold more than 20% of securities are:
Rhaegar Pty Ltd – 2,529,076 options
-
-
-
-
%
-
-
-
-
10,894,3901
100.00
10,894,390
100.00%
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 74
INDEPENDENT AUDIT REPORT
iii)
Unlisted Options exercisable at $0.06 on or before 31 March 2021
Shares Range
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Total
4
18
10
42
34
108
Units
184
65,101
79,918
1,756,454
24,221,3091
26,122,966
%
-
0.25
0.31
6.72
92.72
100.00%
1Holders who hold more than 20% of securities are:
HSBC Custody Nominees (Australia) Limited – 6,666,667 options
4.
Substantial Shareholders
The name of the substantial shareholder listed on the Company’s register as at 23 August 2019 is:
Name: Pyxis Holdings Pty Ltd
Holder of: 7,499,999 fully paid ordinary shares, representing 5.53% as at 27 February 2019
Notice Received: 28 February 2019
5.
Restricted Securities
There are no restricted securities listed on the Company’s register as at 23 August 2019.
6.
On market buy-back
There is currently no on market buy back in place.
7.
Application of funds
The Company has applied its cash and assets readily convertible to cash in a way that is consistent with its
business objectives detailed in its IPO prospectus.
8.
Twenty Largest Shareholders:
The twenty largest shareholders of the Company’s quoted securities as at 23 August 2019 are as follows:
Name
TRIBIS PL
PYXIS HLDGS PL MAPLETREE A/C
SHIMANO VENTURES LTD
SURF COAST CAP PL MINNIE P/F A/C
J & J BANDY NOM PL J & J BANDY S/F A/C
GRECH ALEXANDER
RODSTROM MARK LEE
COMSEC NOM PL
1
2
3
4
5
6
7
8
9 WINDELL HLDGS PL THOMPSON INV A/C
No. of Shares
8,738,434
6,799,999
6,205,884
4,641,694
3,000,000
2,965,624
1,805,550
1,737,000
1,700,000
%
6.44
5.01
4.57
3.42
2.21
2.18
1.33
1.28
1.25
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 75
INDEPENDENT AUDIT REPORT
Name
No. of Shares
10
IQBAL MOBEEN
11 CHEN LIJIAO
12 WINDELL HLDGS PL THOMPSON S/F A/C
13
TOOMEY MELVYN
14 NGUYEN HIEU HUU
15
SILKSHORE HLDGS PL BRAHAM S/F A/C
16 HE BO
17 VELLA DAVID
18 BONAVITA STEPHEN C
19
SHIMANO VENTURES LTD
20 MICHAEL RODOTHEOS
1,600,000
1,488,000
1,465,000
1,397,500
1,300,000
1,250,000
1,211,250
1,159,715
1,103,521
1,086,494
1,025,000
%
1.18
1.10
1.08
1.03
0.96
0.92
0.89
0.85
0.81
0.80
0.76
Total
51,680,665
38.07%
NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2019
PAGE 76