PAINCHEK LIMITED | ABN 21 146 035 127
The Universal
Pain Assessment
Solution
ANNUAL REPORT
JUNE 2021
YEAR
ENDING
1 | PAINCHEK LIMITED
Table of Contents
Chairman’s Letter
Directors Report
Financial Statements
Independent Auditor’s Report
Additional Shareholder Information
Corporate Directory
04
11
32
60
65
67
2 | PAINCHEK LIMITED
2 | PAINCHEK LIMITED
PAINCHEK LIMITED | 3
PAINCHEK LIMITED | 3
Chairman’s Letter
Dear Shareholders,
It is a credit to our small, hardworking team that by 30 June 2021
the Company had signed up annual PainChek licenses for more
than 1500 residential aged care (RAC) facilities covering 129,000
beds and representing approximately 60% of the Australian market
(in beds). Beds under license grew by approximately 110% from the
prior year end and represent a potential annual recurring revenue
(ARR) opportunity of up to $5.6m.
This pleasing result was achieved with the benefit of a first year
licence subsidy to the RAC clients under an Australian government
grant scheme; and despite the continuing adverse impact of
COVID-19 on our business and our customers. The opportunity for
new RAC clients to sign up for the grant scheme has now ended,
and our key focus in Australia during FY’22 is to convert this
customer base to satisfied clients paying recurring fees on normal
commercial terms to realise the full value of the ARR. We are
confident we can do this due to the clinical and operational benefits
of our unique, innovative product, and our well-established focus
on customer support.
During the year we also obtained regulatory clearance for our
first version of our Painchek Infant App in Australia, Europe and
certain other markets. We plan to initially launch this Infant App
in the hospital sector in Australia during FY’22 for use in post-
operative and post-vaccination infant pain assessment by both
healthcare professionals and parents as users. In addition, we
successfully launched our Universal App in Australia and Europe
during FY’21. This has broadened the application of the adult App
to also document and monitor pain of people who can self-report
their pain, and ensuring PainChek can be extended to manage pain
assessments for all adults.
4 | PAINCHEK LIMITED
While COVID-19 caused delays to our plans to broaden our product
coverage and international expansion during FY’21, these initiatives
are now progressing positively as the global markets open up post
COVID-19 vaccinations:
•
•
•
•
the Home Care market will be accessed initially by leveraging
RAC partners that also deliver government funded home care
packages in Australia;
the Hospital market will be accessed initially by leveraging
our existing clinical studies with hospitals in Australia, by
partnering with medical device suppliers, and by bundling
together the Infant and Adult App;
International Market expansion is focused on expanding UK
RAC beds penetration and preparing for the expanding in the
UK Home, Hospital and Infant markets;
The Company will continue to assess new market entry
opportunities in Europe, Canada and Asia while continuing the
de-Novo application with FDA for US market clearance.
Non-audit services
We have continued to manage our expenditure carefully, and at the
year end had approximately $11 million in cash.
BDO Audit Pty Ltd
Our share price performance is very disappointing falling to 5.9
Tax advice services
cents at 30 June 2021 compared to 11.5 cents at prior year end.
Tax compliance services
Your Board does not believe this value fairly reflects the global
Other assurance services
market opportunity and the solid foundations we have in place to
capitalise on this in the future. The Board will continue to engage
Total remuneration for non-audit services
with the capital markets and shareholders as the product continues
to roll out with the view this progress will be better reflected in the
share price going forward.
Auditor’s independence declaration
The auditor’s independence declaration is included on the following page.
On behalf of the Board of Directors, I would like to thank all of our
shareholders for continuing to support the Company.
Signed in accordance with a resolution of directors.
Yours sincerely,
John Murray
John Murray
Chairman
Chairman
31 August 2021, Sydney, NSW
PainChek Limited (ASX: PCK)
ABN 21 146 035 1272
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Registered Office:
Suite 401, 35 Lime Street
Sydney, NSW, 2000
info@painchek.com
PAINCHEK LIMITED | 5
PainChek Limited
2021
$
2020
$
-
-
6,000
6,000
-
-
-
20
Review of Operations
Substantial Market Opportunity
When PainChek was founded in 2016 a core goal
was set to be the first to market with a clinically
validated and regulatory cleared Adult and Infant pain
assessment App. Today the Company has achieved
those core goals and has a clear path and strategy to
become the global market leader in both sectors.
The PainChek® technology uses cameras in
smartphones and tablets to capture a brief video
of a person, which is analysed in real time using
facial recognition software to detect the presence
of facial micro-expressions that are indicative of the
presence of pain. These results are combined with
other observational assessments to provide an overall
pain score and pain severity level of the person being
assessed.
The PainChek® technology has multiple regulatory
clearances including TGA (Australia) and CE Mark
(Europe) for use as a class 1 medical device to assess
pain in people who are unable to reliably verbalise,
such people with dementia.
PainChek’s purpose is to give a voice to people
who cannot reliably verbalise their pain, with pain
assessment an area that has relied on manual, paper-
based systems and therefore ripe for disruption.
Two significant groups exist whereby PainChek has
identified a market opportunity: those with dementia
and cognitive impairments who have lost the ability
to reliably indicate their pain levels, and pre-verbal
children.
An estimated 50 million people are living with dementia
worldwide, and this is estimated to grow to 75 million
by 2025. On average there are three carers for each
person with dementia, and these carers are the primary
users of the PainChek® Adult App. Worldwide there are
estimated to be 6.96 million aged care beds, with 43.5
million individuals estimated to be living with dementia
at home.
There are another 400 million children aged 0 to 3-year-
olds worldwide, and each year an estimated 50 million
people become parents for the first time. Annually, 100
million children are born in or pass through hospitals
each year. Parents and practitioners can have difficulty
discerning whether these pre-verbal children are in
genuine pain or just crying from discomfort or hunger.
6 | PAINCHEK LIMITED
Continued strong RAC adoption in Australia
After the PainChek® Adult App was clinically proven
and regulatory cleared, Australia’s residential aged
care (RAC) market has provided an important proving
ground for the technology.
PainChek received Australian Federal Government
funding for the use of the PainChek® Adult App
for those people living with dementia or cognitive
impairment in residential aged care facilities. As
eligibility for the fund ended in May 2021, PainChek
had achieved 82,982 dementia specific beds reported
to the government, with resulting Federal Government
grant payments to PainChek totalling $4.3M in FY20
and FY21.
There are now more than 129,000 beds in 1,569
Residential Aged Care (RAC) facilities that have been
contracted with annual subscription agreements, giving
PainChek more than 60% market share in Australia’s
Aged Care sector including most of the largest providers
with new clients including BUPA and Estia Health. This
uptake results in a projected annual recurring revenue
(ARR) exceeding $5.5 million assuming all contracts
signed under the Government funded scheme are fully
implemented and transitioned onto standard PainChek
commercial agreements.
Some 480,000 clinical pain assessments have been
conducted in Australian aged care as at 30 June 2021,
with an increasing number of case study reports
confirming the clinical and cost benefit. At 30 June 2021
there were 46,843 active licensed beds in RACs, up
from 24,435 beds at 30 June 2020. There was a backlog
of over 82,000 contracted beds at 30 June 2021, which
are scheduled to be implemented after the year end.
PainChek has been further encouraged by the positive
impact its technology is having in residential aged care
facilities, with case studies showing use of PainChek has
led to a reduction in psychotropic medication, initiation
of non-medication interventions to better manage pain,
and a renewed focus on pain assessment within these
facilities.
PainChek has now integrated with all the care
management systems in Australia that provide
documentation systems within residential aged care,
which covers more than 180,000 beds.
RESIDENTIAL AGED CARE CLIENTS
AND FACILITIES CONTRACTED
1,600
1,400
1,200
1,000
800
600
400
200
795
884
993
722
207
223
246
288
1,569
410
Jun-20
Sep-20
Dec-20
Mar-11
June-21
Total Contracted Clients
Contracted RAC Facilities
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International Expansion
Despite the COVID-19 lockdown of UK facilities in until early 2021,
PainChek continued to maintain a presence in the UK market with
a local sales and marketing team, leading to more than 1,000 total
beds now being live and a further 1,500 planned for deployment.
Implementations have occurred in England, Scotland and Wales and
PainChek is targeting a fast tracking of its rollout in the region as
the economy has reopened in conjunction with its significant COVID
vaccination rates.
Plans to conduct PainChek® Adult App FDA studies in the USA have
continued to be delayed by COVID19. However, during FY2021 the
Company has developed and commercially launched PainChek®
Universal, which has clearance to sell in many other key markets.
PainChek® Universal is a complete point-of-care solution that
combines the existing PainChek® App with the Numerical Rating
Scale (NRS) and data from PainChek® Analytics. This enables
best-practice pain management for people living with pain in any
environment — from those who cannot verbalise pain to those who
can, and those who fluctuate between the two.
New Residential Aged Care sales have continued in New Zealand
and Singapore and PainChek has established a partnership for the
Home Care sector in Canada.
Focus For FY22
New Products & Markets
The Infant App received Australian TGA, CE Mark (Europe), UK, New
Zealand, Singapore and Canada regulatory clearances. Furthermore,
the PainChek Infant Face-Only pain assessment study was peer
reviewed and recently published in the highly regarded Lancet
Digital Scientific journal, confirming the technology is a valid and
reliable means of assessing and monitoring procedural pain in
infants.
Opportunity exists for the Infant App in various settings including
children’s hospitals/wards, GPs rooms and for parents at home. The
significant market opportunity has the potential to deliver large
revenues to PainChek with only a very small market share.
PainChek is negotiating partnerships for hospital access and
distribution; The Nurse-led Volunteer Support and PainChek Frailty
Study funded through the Ramsay Hospital Research Foundation
(RHRF) commenced at the Hollywood Hospital in WA during
March, and a second study at Ramsay’s Joondalup Health Campus,
also funded through the RHRF, is planned to evaluate the use of
PainChek® Universal again combined with a nurse-led volunteer
program.
PainChek aims to maintain and grow its position in the ANZ market
by maintaining the current contracted beds above 120,000, growing
integration partnerships with CMS partners and medication
management providers, and transition customers onto commercial
agreements after they have completed their government funded
trial.
The Home Care market will be accessed, initially leveraging RAC
partners that also have government funded home care packages in
Australia. The Hospital market will be entered by leveraging existing
studies with hospitals, partnering with medical device suppliers and
by bundling the Infant and Adult App.
International market expansion is planned by expanding UK RAC
beds penetration and developing the home, hospital and infant
markets. In addition, the Company continues to assess new market
entry opportunities in Europe, Canada and Asia while continuing the
de-Novo application with FDA for US market clearance.
The Infant market will be enabled following the completion of
studies to support procedural pain indication. The initial market
opportunities are focused on post-operative and post-vaccination
pain monitoring and pain management for infants in the hospital
and home care settings.
8 | PAINCHEK LIMITED
PAINCHEK LIMITED | 9
PainChek Limited
Directors’ report
The directors of PainChek Limited (“PainChek” or “the Company”) submit herewith the financial report of
the Company and its subsidiary (“Group” or “Consolidated Entity”) for the year ended 30 June 2021. In
order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
Names of Directors
The names of the directors of the Company during or since the end of the year are noted below.
Directors were in office for the entire period unless otherwise stated:
Mr John Murray (appointed 30 September 2016) LLB (Hons), CA, MAICD – Non-executive Chairman
Mr Murray has 25 years’ experience in private equity and venture capital and was a co-founder and
Managing Partner of Technology Venture Partners; one of the original and leading venture capital firms
in Australia. Mr Murray is a past chairman of the Australian Venture Capital Association. Mr Murray
has considerable experience as an investor and a non-executive director of high growth, technology-
based companies. He possesses a broad understanding of global trends in technology and its impact on a
variety of industries. He is a past Chairman of a private, residential aged care business in Australia. Mr
Murray also brings 12 years’ experience in executive roles in corporate banking, accounting and IT
services industries.
Mr Murray has been on the Board of a number of successful technology rollouts and exits including
online travel play Viator, which was acquired by TripAdvisor for approximately US$200 million in
2014. He is a chartered accountant with an Honour degree in Law and is a member of the Australian
Institute of Company Directors. Mr Murray is a director of UK AIM listed company Seeing Machines Ltd
and was Chairman of ASX listed company Flamingo AI Limited until October 2019, but otherwise has not
been a director of an ASX listed company in the past 3 years.
Mr Philip Daffas (appointed 30 September 2016) BSc, Dip EENG, MBA, GAICD – Managing Director
Philip is a highly accomplished global business leader and people manager with an international career
spanning more than 25 years with leading blue-chip healthcare corporates and novel technology start-up
companies.
Philip has held senior global business leader positions in Europe, US and Australia. He has been
instrumental in building businesses, growing market share and developing extensive high-level customer
and industry relationships in each sector on a global basis.
Philip’s earlier experience was gained in Europe with market leaders such as IVAC infusion systems and
Shiley cardiopulmonary products. He subsequently joined Boehringer Mannheim, initially in the UK
managing their diagnostics business and subsequently was promoted to a Global Marketing role in the
Diabetes Care business cased in Mannheim, Germany.
In 1997 Philip joined Cochlear in the UK as the European Sales and Marketing Manager and subsequently
was promoted in 2000 to the VP Global Marketing role based in Sydney, Australia
Other roles in Australia have included General Manager with Roche Diagnostics, Managing Director at
Bio-Rad Laboratories and CEO of Applied Physiology, an Australian software start up company in the
intensive care monitoring sector.
Graduated in the UK with a BSc and Diploma in Electronic Engineering, Philip also has an MBA and is a
Graduate of the Australian Institute of Company Directors (GAICD). Mr Daffas has not been a director of
an ASX listed company in the past 3 years.
10 | PAINCHEK LIMITED
1
PainChek Limited
Directors’ report
The directors of PainChek Limited (“PainChek” or “the Company”) submit herewith the financial report of
the Company and its subsidiary (“Group” or “Consolidated Entity”) for the year ended 30 June 2021. In
order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
Names of Directors
The names of the directors of the Company during or since the end of the year are noted below.
Directors were in office for the entire period unless otherwise stated:
Mr John Murray (appointed 30 September 2016) LLB (Hons), CA, MAICD – Non-executive Chairman
Mr Murray has 25 years’ experience in private equity and venture capital and was a co-founder and
Managing Partner of Technology Venture Partners; one of the original and leading venture capital firms
in Australia. Mr Murray is a past chairman of the Australian Venture Capital Association. Mr Murray
has considerable experience as an investor and a non-executive director of high growth, technology-
based companies. He possesses a broad understanding of global trends in technology and its impact on a
variety of industries. He is a past Chairman of a private, residential aged care business in Australia. Mr
Murray also brings 12 years’ experience in executive roles in corporate banking, accounting and IT
services industries.
Mr Murray has been on the Board of a number of successful technology rollouts and exits including
online travel play Viator, which was acquired by TripAdvisor for approximately US$200 million in
2014. He is a chartered accountant with an Honour degree in Law and is a member of the Australian
Institute of Company Directors. Mr Murray is a director of UK AIM listed company Seeing Machines Ltd
and was Chairman of ASX listed company Flamingo AI Limited until October 2019, but otherwise has not
been a director of an ASX listed company in the past 3 years.
Mr Philip Daffas (appointed 30 September 2016) BSc, Dip EENG, MBA, GAICD – Managing Director
Philip is a highly accomplished global business leader and people manager with an international career
spanning more than 25 years with leading blue-chip healthcare corporates and novel technology start-up
companies.
Philip has held senior global business leader positions in Europe, US and Australia. He has been
instrumental in building businesses, growing market share and developing extensive high-level customer
and industry relationships in each sector on a global basis.
Philip’s earlier experience was gained in Europe with market leaders such as IVAC infusion systems and
Shiley cardiopulmonary products. He subsequently joined Boehringer Mannheim, initially in the UK
managing their diagnostics business and subsequently was promoted to a Global Marketing role in the
Diabetes Care business cased in Mannheim, Germany.
In 1997 Philip joined Cochlear in the UK as the European Sales and Marketing Manager and subsequently
was promoted in 2000 to the VP Global Marketing role based in Sydney, Australia
Other roles in Australia have included General Manager with Roche Diagnostics, Managing Director at
Bio-Rad Laboratories and CEO of Applied Physiology, an Australian software start up company in the
intensive care monitoring sector.
Graduated in the UK with a BSc and Diploma in Electronic Engineering, Philip also has an MBA and is a
Graduate of the Australian Institute of Company Directors (GAICD). Mr Daffas has not been a director of
an ASX listed company in the past 3 years.
PAINCHEK LIMITED | 11
1
PainChek Limited
PainChek Limited
Mr Ross Harricks (appointed 30 September 2016) BE, MBA – Non-executive Director
Mr Harricks’ experience in the commercialisation of medical products spans over forty years and over
three continents. His experience includes the marketing and commercialising of the computed
technology scanner (CT or CAT scanner) in Australia, where he headed up the EMI Electronics Group as
General Manager. His remit included developing EMI’s medical business in this region.
In 1983, Mr Harricks joined the Nucleus Group as Group Marketing Executive, and later became
President the two Nucleus Group subsidiaries in United States marketing medical equipment and
scientific and engineering computing products. In 1989 in the US, Mr Harricks was the CEO of a venture
capital-backed start-up company developing specialist scientific and medical lasers.
In Australia Mr Harricks has been a director of ResMed Limited and cofounder of AtCor Medical where he
completed an Australian initial public offering in 2005 leading the company until 2007. He was a director
of VentraCor from 2005 to 2009. Other than Painchek, Mr Harricks has not been a director of an ASX
listed company in the past 3 years.
Mr Harricks works with Australian medical and technology companies assisting in commercialisation of
their products into the US and EU markets. His unique expertise and experience includes strategic
advising on the best path to early international market endorsement and adoption, and on providing
hands-on help with implementation in the American and European markets.
Mr Adam Davey (appointed 30 September 2014) – Non-executive Director
Mr Davey’s expertise spans over 25 years and includes capital raising (both private and public), mergers
and acquisition, ASX listings, asset sales and purchases, transaction due diligence and director duties. Mr
Davey is a Director of Wealth Management at Canaccord Genuity Patersons Limited. Mr Davey has been
involved in significantly growing businesses in both the industrial and mining sector. This has been
achieved through holding various roles within different organisations, including chairman, managing
director, non-executive director, major shareholder and corporate adviser to the board.
Mr Davey is a non-executive director of Ensurance Limited and the Agency Group Australia Ltd.
Otherwise, Mr Davey has not been a director of an ASX listed company in the past 3 years.
Company Secretary
Ms Sally McDow was appointed to the position of Company on 2 June 2021. Ms McDow is an
experienced company secretary, admitted as a solicitor (QLD) and holds an MBA and a corporate
governance diploma.
attributed to the following:
• Research expense of $2,652,106 (30 June 2020: $2,270,461);
Mr Ian Hobson B.BUS FCA ACIS MAICD was appointed to the positions of Company Secretary and Chief
Financial Officer on 30 September 2016 and resigned on 2 June 2021..A Fellow Chartered Accountant and
Chartered Secretary, Mr Hobson has more than 30 years’ experience in the areas of corporate finance,
governance, corporate accounting, company secretarial and restructuring advice. Mr Hobson was a
director of PricewaterhouseCoopers and Ferrier Hodgson Chartered Accountants before specializing in
providing company secretarial and corporate accounting services to listed entities.
12 | PAINCHEK LIMITED
2
OPERATIONS REPORT
Principal Activities
communicate their pain with carers.
Financial and operational review
The principal activity of the Company is the development and commercialisation of mobile medical
device applications, that automate intelligent pain assessment of individuals who are unable to
The loss of the Group for the year ended 30 June 2021, after accounting for income tax benefit,
amounted to $6,063,647 (2020 $12,392,659). The year ended 30 June 2021 operating results are
• Share based payments in respect of options issued to Directors and employees of $709,720 (non-
cash) (30 June 2020: $8,907,808 (non-cash)); and
• Corporate and administration expenses of $3,612,398 (30 June 2020: $2,584,273) which included a
provision for payroll tax assessment of $1,400,414 relating to the year ended 30 June 2017.
Review of operations
When we started the PainChek journey in 2016 we set out a core goal of being first to market with a
clinically validated and regulatory cleared Adult and Infant pain assessment App. Today we have achieved
those core goals and have a clear path and strategy to become the global market leader in both sectors
The PainChek® technology uses cameras in smartphones and tablets to capture a brief video of the
person, which is analysed in real time using facial recognition software to detect the presence of facial
micro-expressions that are indicative of the presence of pain. These results are combined with other
observational assessments to provide an overall pain score and pain severity level of the person being
assessed. The PainChek® technology has multiple regulatory clearances including TGA (Australia) and CE
Mark (Europe) for use as a class 1 medical device to assess pain in people who are unable to reliably
verbalise, such people with dementia.
3
PainChek Limited
OPERATIONS REPORT
Principal Activities
The principal activity of the Company is the development and commercialisation of mobile medical
device applications, that automate intelligent pain assessment of individuals who are unable to
communicate their pain with carers.
Financial and operational review
The loss of the Group for the year ended 30 June 2021, after accounting for income tax benefit,
amounted to $6,063,647 (2020 $12,392,659). The year ended 30 June 2021 operating results are
attributed to the following:
• Research expense of $2,652,106 (30 June 2020: $2,270,461);
• Share based payments in respect of options issued to Directors and employees of $709,720 (non-
cash) (30 June 2020: $8,907,808 (non-cash)); and
• Corporate and administration expenses of $3,612,398 (30 June 2020: $2,584,273) which included a
provision for payroll tax assessment of $1,400,414 relating to the year ended 30 June 2017.
Review of operations
When we started the PainChek journey in 2016 we set out a core goal of being first to market with a
clinically validated and regulatory cleared Adult and Infant pain assessment App. Today we have achieved
those core goals and have a clear path and strategy to become the global market leader in both sectors
The PainChek® technology uses cameras in smartphones and tablets to capture a brief video of the
person, which is analysed in real time using facial recognition software to detect the presence of facial
micro-expressions that are indicative of the presence of pain. These results are combined with other
observational assessments to provide an overall pain score and pain severity level of the person being
assessed. The PainChek® technology has multiple regulatory clearances including TGA (Australia) and CE
Mark (Europe) for use as a class 1 medical device to assess pain in people who are unable to reliably
verbalise, such people with dementia.
3
PAINCHEK LIMITED | 13
PainChek Limited
The PainChek® Adult App has been clinically proven and regulatory cleared, and in May 2021 the
Australian Federal Government funded grant came to an end. The grant funded the use of PainChek®
Adult App for those people living with dementia or cognitive impairment and by May 2021 PainChek had
achieved 82,982 dementia specific beds reported to the government, with resulting Federal Government
grant payments to PainChek totalling $4.3M in FY20 and FY21.
There are now more than 129,000 beds in 1,569 Residential Aged Care (RAC) facilities that have been
contracted with annual subscription agreements in Australia, New Zealand, UK and Singapore and
projected annual recurring revenue (ARR) exceeding $5.5 million assuming all contracts are fully
implemented and transitioned onto standard PainChek commercial agreements. Revenue from these
contracts is recognised in the income statement in accordance with the Group’s accounting policy for
Reveue set out on page 30.
Some 480,000 clinical pain assessments have been conducted in Australian aged care as at 30 June 2021,
with an increasing number of case study reports confirming the clinical and cost benefit.
At 30 June 2021 there were 46,843 active licensed beds in RACs, up from 24,435 beds at 30 June 2020.
There was a backlog of over 82,000 contracted beds at 30 June 2021 scheduled to be implemented after
the year end.
We have established a solid base in Australia, with more than 60% market share in Aged Care and
contracts with most of the largest providers.
We have continued, despite the COVID-19 lockdown of UK facilities in the UK until early 2021, to
maintain a presence in the UK market with a local sales and marketing team. New Residential Aged Care
sales have continued in New Zealand and Singapore and we have established a partnership for the Home
Care sector in Canada.
Plans to conduct PainChek® Adult App FDA studies in the USA have continued to be delayed by COVID-
19. However during FY2021 we developed and commercially launched PainChek® Universal, which has
clearance to sell in many other key markets. PainChek® Universal is a complete point-of-care solution
that combines the existing PainChek® App with the Numerical Rating Scale (NRS) and data from
PainChek® Analytics. This enables best-practice pain management for people living with pain in any
environment — from those who cannot verbalise pain to those who can, and those who fluctuate
between the two.
The Infant App received Australian TGA, CE Mark (Europe), UK, New Zealand, Singapore and Canada
regulatory clearances. Furthermore, the PainChek Infant Face-Only pain assessment study was peer
reviewed and accepted for publication in the Lancet Digital Scientific journal in July 2021.
We are negotiating partnerships for hospital access and distribution; The Nurse-led Volunteer Support
and PainChek Frailty Study funded through the Ramsay Hospital Research Foundation (RHRF)
commenced at the Hollywood Hospital in WA during March, and a second study at Ramsay’s Joondalup
Health Campus, also funded through the RHRF, is planned to evaluate the use of PainChek® Universal
again combined with a nurse-led volunteer program.
14 | PAINCHEK LIMITED
4
GLOBAL MARKET ACCESS INCREASING
PainChek Limited
Regulatory clearance received
Regulatory in progress
Partnerships
Sales presence / sales in progress
Likely Developments and Overview of Group Strategy
We aim to maintain and grow our position in the ANZ market by maintaining the current contracted beds
above 120,000, grow integration partnerships with CMS partners and medication management
providers, and transition customers onto commercial agreements after they have completed their
government funded trial.
The Home Care market will be accessed, initially leveraging RAC partners that also have government
funded home care packages in Australia . The Hospital market will be entered by leveraging existing
studies with hospitals, partnering with medical device suppliers and by bundling the Infant and Adult
App.
International market expansion is planned by expanding UK RAC beds penetration and developing the
home, hospital and infant markets. In addition we continue to assess new market entry opportunities in
Europe, Canada and Asia while continuing the de-Novo application with FDA for US market clearance.
The Infant market will be enabled following the completion of studies to support procedural pain
indication. The initial market opportunities are focused in post-operative and post-vaccination pain
monitoring and pain management for infants in the hospital and home care settings.
Subsequent events
No matters or circumstances have arisen since the end of the year which significantly affected or could
significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial years.
REMUNERATION REPORT (AUDITED)
PAINCHEK LIMITED | 15
5
Remuneration Report (Audited)
PainChek Limited
Key Management Personnel
The report discloses the FY’21 remuneration arrangements and outcomes for the people listed below,
who are the individuals within the Company who have been determined to be Key Management
Personnel (KMP) in the financial year to 30 June 2021. Key Management Personnel (KMP) are those
people who have the authority and responsibility for planning, directing and controlling the Group’s
activities, either directly or indirectly.
Remuneration Policy
The remuneration policy of the Group has been designed to align director objectives with shareholder and
business objectives by providing a fixed remuneration component which is assessed on an annual basis in
line with market rates. The Board of the Company believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best Directors to run and manage the Company, as well as
create goal congruence between Directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for board members is as follows:
• The remuneration policy, setting the terms and conditions for the executive Directors and other senior
staff members, was developed and approved by the Board.
•
In determining competitive remuneration rates, the Board considers local and international trends among
comparative companies and the industry generally so that executive remuneration is in line with market
practice and is reasonable in the context of Australian executive reward practices.
• All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation and fringe benefits.
Performance Based Remuneration
The Company is a technology development entity and therefore speculative in terms of performance.
Consistent with attracting and retaining talented executives and Directors,executives and Directotrs are paid
market rates associated with individuals in similar positions within the same industry. Options, equity-based
performance incentives and cash bonus’ have been and may be further issued to provide a performance-
linked incentive component in the remuneration package for the executive and Directors, and for the future
performance by the executives and Directors in managing the operations and strategic direction of the
Company. All remuneration paid to Directors is valued at the cost to the Company and expensed. Options are
valued using an appropriate valuation methodology. For details of Directors’ and executives’ interests in
options and performance rights at year end, refer to section (d) of this remuneration report.
Short term incentive
Generally paid in cash and structured, with a focus on delivery of specific short-term objectives aligned with
the company’s strategies and goals and the Executives role in meeting these targets.
Remuneration Consultant
In August 2019, the Company engaged Eagan Associates Pty Ltd (“Eagan”) to undertake a remuneration review
of the executive director and non-executive directors salary and fees. Eagan received a fee of $14,700 to
undertake the review and provide remuneration recommendations which are set out below and continue to
be applied. No other advice has been sought from Eagan.
The Board is satisfied that Eagan’s remuneration recommendation was made free from undue influence by the
KMP to whom the recommendations relate given only the non-executive chairman had made contact, Eagan
does not provide any other consulting services to the Group and does not have any prior or continuing
relationship or association with the company or any members of the KMP.
16 | PAINCHEK LIMITED
6
PainChek Limited
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The remuneration policy has been tailored to align the strategic goals of the Company to create value for
shareholders, Directors and executives. The Company believes the policy has been effective in aligning the
interests of the Company’s key management personnel with the interests of its shareholders. For details of
Directors’ and executives' interests in equity securities at year end, refer to section (c) of this remuneration
report.
Share price at 30 June
Loss for the year (continuing
and discontinued operations)
Loss for the year (continuing
operations)
EPS for the year (continuing
and discontinued operations)
EPS for the year (continuing
operations)
2017 (formerly
ePAT technologies
Ltd)
2018
2019
2020
2021
$0.025
$0.056
$0.20
$0.115
$0.059
($8,473,802
($4,810,532)
($3,262,418)
($12,392,659)
($6,063,647)
($8,473,802)
($4,810,532)
($3,262,418)
($12,392,659)
($6,063,647)
(1.63) cents
(0.6) cents
(0.4) cents
(1.3) cents
(0.5) cents
(1.63) cents
(0.6) cents
(0.4) cents
(1.3) cents
(0.5) cents
Fixed remuneration is not linked to group performance. It is set with reference to the individual’s role,
responsibilities and performance and remuneration levels for similar positions in the market.
No dividends were paid by the Company nor was there any return of capital over the past 5 years.
Performance Income as a Proportion of total compensation
A short term incentive performance bonus of $75,000 was paid to Mr Daffas for the year ended 30 June 2020,
based on Mr Daffas achieving certain internal KPI’s.
Eagan’s report recommended that the Company’s non-executive director remuneration be supplemented with
the following annual grant of Performance Rights for the financial years ended 30 June 2020, 2021 and 2022 as
follows:
Directors
Fee
Performance Rights
Total remuneration
John Murray
Andrew Davey
Ross Harricks
Total
$ 80,000
$ 40,000
$ 40,000
$ 40,000
$ 120,000
$ 20,000
$ 60,000
$ 20,000
$ 60,000
$ 160,000
$ 80,000
$ 240,000
Non-executive director performance rights have no performance conditions as they are provided to
supplement fixed director fees. The performance rights vest at end 30 June of each subsequent year provided
the director remains a director of the Company at that date.
7
PAINCHEK LIMITED | 17
PainChek Limited
The notional value of performance rights approved by shareholders will differ to the value required to be
recognised for accounting purposes in accordance with AASB 2 Share Based Payments.
Remuneration Consultant Benchmarks
The median total statutory remuneration of $120,000 for the Chairman represents 120% of the median total
statutory remuneration of $100,000 benchmark in the Health and IT sector for companies with a market
capitalisation of between $50 million and $200 million.
The median total statutory remuneration of $60,000 for a non-executive director represents 99% of the
median total statutory remuneration of $60,857 benchmark in the Health and IT sector for companies with a
market capitalisation of between $50 million and $200 million. At the 2019 Annual general meeting,
shareholders approved the issue of Performance Rights to the non-executive directors on the following
principles and terms:
a) each non-executive director will in each end of financial year on 30 June 2020, 2021 and 2022
receive 1/3 of their total annual remuneration in Performance Rights;
b) the number of Performance Rights issued for a year will be calculated based on the VWAP of the
including the date of
Company’s ordinary shares calculated 5 days either side of and
announcement of the company’s annual statutory results for the financial year;
c) Performance Rights will vest at 30 June each subsequent year - being the end of the financial year
subject to the director remaining a director of the Company at that date;
d) each Performance Right has the conditional right to acquire one Share;
e) the Performance rights are issued for Nil consideration;
f)
g) the Performance Rights are subject to the terms and conditions of the LTI Plan; and
h) the below table summarises the position:
the Performance Rights expire 3 months after the vesting date;
Remuneration for
year ended 30 June
Share price
calculation
date
(estimated)
Grant date
Vesting date
Likely date that
Performance
Rights will
convert to shares
Expiry Date of
Performance Rights
if not converted to
shares
2020
2021
2022
5/09/2019
20/11/2019
30/06/2020
28/07/2020
4/09/2020
20/11/2019
30/06/2021
15/07/2021
3/09/2021
20/11/2019
30/06/2022
30/07/2022
30/09/2020
30/09/2021
30/09/2022
CEO remuneration review
The Eagan report recommended that the Company’s CEO remuneration be supplemented with an annual
grant of $200,000 worth of Performance Rights for the financial years ended 30 June 2020, 2021 and
2022.
The Company entered into a new agreement on 8th October 2019 with Philip Daffas to increase his fixed
and variable cash remuneration to a maximum of $400,000 per annum which together with the
proposed $200,000 grant of Performance Rights, will result in total statutory remuneration of $600,000
for FY21. The notional value of performance rights as set out in the AGM Notice will differ to the value
required to be recognised for accounting purposes in accordance with AASB 2 Share Based Payments.
The total statutory remuneration of $600,000 for Philip Daffas represents 124% of the median total
statutory remuneration of $483,812 benchmark in the Health and IT sector for companies with a market
capitalisation of between $50 million and $200 million.
18 | PAINCHEK LIMITED
8
PainChek Limited
The Company received Shareholder approval at the 2019 AGM for the issue of Performance Rights to
Philip Daffas to the value of $600,000 over the 3 years ending 30 June 2022, with an annual limit of
$200,000 for Philip Daffas or his nominee(s) to acquire one Share for each Performance Right held
pursuant to the LTI Plan and as part of Philip Daffas' remuneration.
The Performance Rights issued for a year will be issued at the VWAP of the Company’s ordinary shares
calculated 5 days either side of and including the date of announcement of the company’s annual
statutory results for the financial year preceding the financial year of the grant of the Performance Rights
(Award Issue Price).
Vesting of the Performance Rights is conditional on the following:
a) 50% of the annual grant of $200,000 worth of Performance Rights will vest two years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a.
(Award Target Price) from the relevant Award Issue Price and provided that Philip Daffas
remains employed by the Company at that date (unless he is a Good Leaver as defined in the
LTI Plan in which case he retains the relevant pro rata portion of the grant subject to the
increase in Share price vesting condition); and
b) 50% of the annual grant of $200,000 worth of Performance Rights will vest three years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a.
from the relevant Award Issue Price and provided that Philip Daffas remains employed by the
Company on that date (unless he is a Good Leaver as defined in the LTI Plan in which case he
retains the relevant pro rata portion of the grant subject to the increase in Share price vesting
condition).
The Award Target Price will be calculated based on the 10 days VWAP leading up to and including the
relevant vesting date
The following table summarises the above terms:
Remuneration for
year ended 30
June
Share Price
Calculation
date (2022
year estimated)
Grant date
Vesting date
assuming share
price hurdle is
met
Likely date that
Performance
Rights will convert
to shares
Expiry Date of
Performance
Rights if not
converted to
shares
2020
5/09/2019
20/11/2019
2021
4/09/2020
20/11/2019
2022
3/09/2021
20/11/2019
50% on
1/10/2021; 50%
on 1/10/2022
50% on
30/10/2021; 50%
on 30/10/2022
50% on 1/1/2022;
50% on 1/1/2023
50% on
1/10/2022; 50%
on 1/10/2023
50% on
30/10/2022; 50%
on 30/10/2023
50% on 1/1/2023;
50% on 1/1/2024
50% on
1/10/2023; 50%
on 1/10/2024
50% on
30/10/2023; 50%
on 30/10/2024
50% on 1/1/2024;
50% on 1/1/2025
PAINCHEK LIMITED | 19
9
Remuneration Policy of Key Management Personnel
The objective of the Company’s executive reward framework is set to attract and retain the most
qualified and experienced Directors and senior executives. The Board ensures that executive reward
satisfies the following key criteria for good reward governance practices:
PainChek Limited
• Competitiveness
• Acceptability to shareholders
• Performance linkage
• Capital management
Non-executive Directors
The Board’s policy is to remunerate non-executive Directors at market rates for comparable companies
for time, commitment and responsibilities. The Board determines payments to the non-executive
Directors and reviews their remuneration annually based on market practice, duties and accountability.
The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to
approval by shareholders at the Annual General Meeting and is currently set at $400,000 as approved by
shareholders at the 2019 AGM. Fees for non-executive Directors are not linked to the performance of
the Company.
Directors’ Fees
A Director may be paid fees or other amounts as the Directors determine where a Director performs
special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A
Director may also be reimbursed for reasonable out of pocket expenses incurred as a result of their
Directorship or any special duties.
Service Agreements
Philip Daffas, Managing Director (appointed 30 September 2016)
The Company entered into an Executive Services Agreement (“Agreement”) with Mr Philip Daffas
pursuant to which Mr Daffas was appointed as Managing Director of the Company as at 30 September
2016 which was varied on 8 October 2019. The key terms of the Agreement are:
• A salary of $250,000 per annum inclusive of superannuation;
• A short term incentive of up to $150,000 per annum at the boards discretion;
• An invitation to apply in respect of each of FY2020, FY2021 and FY2022 for an award of the number
of performance rights equivalent to $200,000 divided by the volume weighted average price (VWAP)
of PainChek Ltd shares, calculated 5 days either side of and including the date of announcement of
the Company’s annual statutory results for the financial year preceding the the financial year of the
Award.
The Agreement may be terminated by either party at any time on the giving of not less than three (3)
months’ notice in writing.
Ian Hobson, Company Secretary and Chief Financial Officer (resigned 2 June 2021, appointed 30
September 2016)
The Company entered into a Consultancy Agreement (“Agreement”) with Churchill Services Pty Ltd
pursuant to which Mr Hobson was engaged to provide Company Secretarial and Chief Financial Officer
services to the Company effective from 30 September 2016. Churchill Services Pty Ltd is to receive $200
per hour, exclusive of GST, for services provided by Mr Hobson. The agreement may be terminated by
either party at any time with no notice period and was terminated on 2 June 2021 when Mr Hobson
resigned.
20 | PAINCHEK LIMITED
10
PainChek Limited
Iain McAdam, Chief Financial Officer, appointed 22 March 2021
The Company entered into an Employment Agreement (“Agreement”) with Mr Iain McAdam pursuant to
which Mr McAdam was appointed as Chief Financial Officer of the Company as at 22 March 2021. The
key terms of the Agreement are:
• A salary of $250,000 per annum inclusive of superannuation;
• A short term incentive of up to 20% of base salary, excluding superannuation, on achievement of the
Company’s and the Employee’s annual goals and payable at the discretion of the PainChek Board;
• An offer of 5 million options in accordance with the Company’s Long Term Incentive Plan (“LTIP”), 25%
vest after 12 months of the grant date and the balance in quarterly instalments over the next 3
years, subject to continued employment and with a restriction on disposal of underlying shares
(assuming options have vested and exercised) for 2 years from the date of issue of the options.
The Agreement may be terminated by either party at any time on the giving of not less than three (3)
months’ notice in writing.
Retirement Benefits
Other retirement benefits may be provided directly by the Company if approved by shareholders.
However, no retirement benefits other than statutory superannuation are currently paid.
DIRECTORS’ AND EXECUTIVE OFFICERS’ EMOLUMENTS
(a) Details of Key Management Personnel
Name
Executives
Position
Term
Philip Daffas
Managing Director
From 30 September 2016
Iain McAdam
Chief Financial Officer
From 22 March 2021
Ian Hobson
Chief Financial Officer and
Company Secretary
From 30 September 2016
to 2 June 2021
Non-Executive Directors
John Murray
Chairman
From 30 September 2016
Adam Davey
Non-Executive Director
From 30 September 2014
Ross Harricks
Non-Executive Director
From 30 September 2016
Except as detailed in Notes (b) – (d) to the Remuneration Report, no key management personnel have
received or become entitled to receive, during or since the financial year, a benefit because of a contract
made by the Company or a related body corporate with key management personnel, a firm of which a
member of key management personnel is a member or an entity in which a member of key management
has a substantial financial interest.
11
PAINCHEK LIMITED | 21
PainChek Limited
(b) Compensation of Key Management Personnel
Remuneration Policy
The Board of Directors, comprising a majority of Non-Executive Directors, is responsible for determining
and reviewing compensation arrangements for the key management personnel. The Board will assess
the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high-quality Board and executive team. Remuneration of
Directors is set out below.
The value of remuneration received, or receivable, by key management personnel for the financial year
to 30 June 2021 is as follows:
2021
Short Term
Employee
Benefits
Equity Compensation
Post-
employment
Performance
related %
Base
Salary
and
Fees
Cash
Bonus
Value of
Options
Performance
Rights
Superannuation
Contributions
Total
$
$
$
$
$
$
Directors
John Murray (1)
Philip Daffas(2)
Ross Harricks(4)
Adam Davey(3)
Total Directors
Iain McAdam
Ian Hobson (5)
73,059
-
231,507
75,000
36,530
40,000
381,096
64,103
119,400
-
-
75,000
-
-
-
-
-
-
-
41,147
-
39,492
145,162
19,746
19,746
224,146
-
-
Total
564,599
75,000
41,147
224,146
6,941
18,493
3,470
-
28,904
6,090
-
34,994
119,492
470,162
59,746
59,746
709,146
111,340
119,400
939,886
33%
47%
33%
33%
32%
37%
0%
28%
2020
Short Term
Employee
Benefits
Equity Compensation
Post-
employment
Performance
related %
Base
Salary
and
Fees
Cash
Bonus
Value of
Options
Performance
Rights
Superannuation
Contributions
Total
$
$
$
$
$
$
Directors
John Murray (1)
Philip Daffas(2)
Ross Harricks(4)
Adam Davey(3)
Total Directors
Ian Hobson (5)
Total
69,406
318,570
34,703
38,000
460,679
142,720
603,399
-
-
-
-
-
-
-
2,213,955
3,689,925
1,106,977
1,106,977
8,117,834
-
8,117,834
78,258
88,688
39,129
39,129
245,204
-
245,204
22 | PAINCHEK LIMITED
6,594
25,000
3,297
-
34,891
-
34,891
2,368,213
4,122,183
1,184,106
1,184,106
8,858,608
142,720
9,001,328
97%
92%
97%
97%
94%
0%
93%
12
(b) Compensation of Key Management Personnel
Remuneration Policy
The Board of Directors, comprising a majority of Non-Executive Directors, is responsible for determining
and reviewing compensation arrangements for the key management personnel. The Board will assess
the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high-quality Board and executive team. Remuneration of
Directors is set out below.
to 30 June 2021 is as follows:
The value of remuneration received, or receivable, by key management personnel for the financial year
2021
Equity Compensation
Post-
employment
Performance
related %
Short Term
Employee
Benefits
Cash
Bonus
Value of
Options
Performance
Superannuation
Rights
Contributions
Total
$
$
$
$
$
$
Directors
John Murray (1)
Philip Daffas(2)
Ross Harricks(4)
Adam Davey(3)
231,507
75,000
Total Directors
381,096
75,000
Iain McAdam
Ian Hobson (5)
64,103
119,400
41,147
-
-
-
-
-
-
-
-
-
-
-
39,492
145,162
19,746
19,746
224,146
-
-
Total
564,599
75,000
41,147
224,146
34,994
6,941
18,493
3,470
28,904
6,090
-
-
119,492
470,162
59,746
59,746
709,146
111,340
119,400
939,886
2020
Equity Compensation
Post-
employment
Performance
related %
Base
Salary
and
Fees
73,059
36,530
40,000
Short Term
Employee
Benefits
Base
Salary
and
Fees
Cash
Bonus
Value of
Options
Performance
Superannuation
Rights
Contributions
Total
$
$
$
$
$
$
Directors
John Murray (1)
69,406
Philip Daffas(2)
318,570
Ross Harricks(4)
Adam Davey(3)
34,703
38,000
Total Directors
460,679
Ian Hobson (5)
142,720
Total
603,399
-
-
-
-
-
-
-
2,213,955
3,689,925
1,106,977
1,106,977
8,117,834
-
8,117,834
78,258
88,688
39,129
39,129
245,204
-
245,204
6,594
25,000
3,297
34,891
-
-
2,368,213
4,122,183
1,184,106
1,184,106
8,858,608
142,720
34,891
9,001,328
33%
47%
33%
33%
32%
37%
0%
28%
97%
92%
97%
97%
94%
0%
93%
12
PainChek Limited
PainChek Limited
c) Shares Held by Key Management Personnel
2021
Directors
Balance at 1
July 2020
Performance
Rights
exercised
Bought &
(Sold)
Shares issued
in lieu of
cash
Other
Balance at 30
June 2021
John Murray
12,299,748
186,654
Philip Daffas
Ross Harricks
Adam Davey
20,499,581
6,149,874
9,690,638
93,327
93,327
48,639,841
373,308
Other key management personnel
-
Iain McAdam
-
Ian Hobson
-
-
48,639,841
373,308
-
-
-
-
-
12,961
-
12,961
-
-
-
-
-
-
-
-
-
12,486,402
-
-
-
-
-
-
-
20,499,581
6,243,201
9,783,965
49,013,149
12,961
-
49,026,110
Balance at 1
July 2019
Performance
Rights
exercised
Bought &
(Sold)
Shares issued
in lieu of
cash
Other
Balance at 30
June 2020
2020
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
-
-
-
3,540,764
24,599,497
40,999,162
12,299,748
12,299,748
(12,299,749)
(20,499,581)
(6,149,874)
(6,149,874)
3,540,764
90,198,155
(45,099,078)
Other key management personnel
-
Ian Hobson
-
-
3,540,764
90,198,155
45,099,078
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,299,748
20,499,581
6,149,874
9,690,638
48,639,841
-
48,639,841
13
PAINCHEK LIMITED | 23
PainChek Limited
d) Options Held by Key Management Personnel
2021
Balance at
1 July 2020
Received as
Remuneration
Exercise of
Options
Other
Balance at
30 June
2021
Vested and
exercisable
Unvested
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
-
-
-
-
-
-
-
-
-
-
Other key management personnel
Iain McAdam
Ian Hobson
-
-
5,000,000
-
-
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
5,000,000
2020
Balance at
1 July 2019
Received as
Remuneration
Exercise of
Options
Other
Balance at
30 June
2020
Vested and
exercisable
Unvested
Directors
John Murray
24,599,497
Philip Daffas
40,999,162
Ross Harricks
12,299,748
Adam Davey
12,299,748
90,198,155
Other key management personnel
Ian Hobson
-
90,198,155
-
-
-
-
-
-
-
(24,599,497)
(40,999,162)
(12,299,748)
(12,299,748)
(90,198,155)
-
(90,198,155)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24 | PAINCHEK LIMITED
-
-
-
-
-
-
-
14
PainChek Limited
e) Performance Rights Held by Key Management Personnel
2021
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Balance
at 1 July
2020
186,654
933,270
93,327
93,327
Received as
Remuneration
Conversion
to shares
Other
Balance
at 30
June
2021
Vested
and
Exercisable
Unvested
412,791
2,063,957
206,396
206,396
(186,654)
-
(93,327)
(93,327)
412,791
-
- 2,997,227
206,396
-
206,396
-
412,791
- 2,997,227
206,396
206,396
1,306,578
2,889,540
(373,308)
- 3,822,810
825,583 2,997,227
Other key management
personnel
Iain McAdam
Ian Hobson
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,306,578
2,889,540
(373,308)
- 3,822,810
825,583 2,997,227
Balance
at 1 July
2019
Received as
Remuneration
Conversion
to shares
Other
Balance
at 30
June
2020
Vested
and
Exercisable
Unvested
-
-
-
-
-
-
-
186,654
933,270
93,327
93,327
1,306,578
-
1,306,578
-
-
-
-
-
-
-
-
-
-
-
-
-
-
186,654
933,270
93,327
93,327
186,654
-
93,327
93,327
-
933,270
-
-
1,306,578
373,308
933,270
-
-
-
1,306,578
373,308
933,270
2020
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Other key
management
personnel
Ian Hobson
Share, Performance Rights and Option Holdings
All equity dealings with Directors have been entered into with terms and conditions no more favourable
than those that the entity would have adopted if dealing at arm’s length.
f) Compensation Options and Performance Rights
Options
During the financial year ended 30 June 2021, 5,000,000 options were granted by the Company to
Directors or Other Key Management Personnel (2020: Nil) and Nil options (2020: 90,198,155) were
exercised by Directors or Other Key Management Personnel.
15
PAINCHEK LIMITED | 25
Performance rights
During the financial year ended 30 June 2021, 2,889,540 performance rights were granted by the
Company to Directors in lieu of cash remuneration following the shareholder approval on 20 November
2019 (2020: 1,306,578). 825,583 of these performance rights (2020: 373,308) were exercised by
Directors in July 2021.
PainChek Limited
CEO performance rights
The fair value at the date of grant of performance rights issued to the CEO is determined using a Monte-
Carlo option pricing model that takes into account the exercise price, the underlying share price at the
time of issue, the term of the performance right, the underlying share’s expected volatility, expected
dividends and the risk free interest rate for the expected life of the instrument.
The value of the performance rights were calculated using the inputs shown below:
Tranche 1A
20
November
2019
Nil
Tranche
1B
20
November
2019
Nil
Tranche
2A
20
November
2019
Nil
Tranche
2B
20
November
2019
Nil
Tranche
3A
20
November
2019
Nil
Tranche
3B
20
November
2019
Nil
Refer section “CEO remuneration review” above for vesting conditions and vesting dates
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
1 January
2022
1 January
2023
1 January
2023
1 January
2024
1 January
2024
1 January
2025
2.12
3.12
3.12
4.12
4.12
5.12
100%
100%
100%
100%
100%
100%
Nil
Nil
Nil
Nil
Nil
Nil
0.80%
0.80%
0.80%
0.80%
0.80%
0.80%
Monte-Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
$0.1979
$0.1980
$0.1711
$0.1773
$0.1763
$0.1536
Grant date
Exercise price
Vesting
conditions &
vesting dates
Share price at
date of grant
Expiry date
Life of the
instruments
(years)
Underlying share
price volatility
Expected
dividends
Risk free interest
rate
Pricing model
Fair value per
instrument
26 | PAINCHEK LIMITED
16
PainChek Limited
Non-executive director performance rights
The fair value at the date of grant of performance rights issued to the non-executive directors was
calculated based on the share price at the date of issue ($0.29) (tranche 1), the value of the award
specified in applicable years 2021 (tranche 2) and 2022 (tranche 3) over the vesting period.
The value of the performance rights were calculated using the inputs shown below:
Grant date
Exercise price
Vesting date
Share price at date of grant
Expiry date
Tranche 1
20 November 2019
Nil
30 June 2020
$0.29
30 September 2020
Tranche 2
20 November 2019
Nil
30 June 2021
$0.29
30 September 2021
Tranche 3
20 November 2019
Nil
30 June 2022
$0.29
30 September 2022
g) Short term employee benefits
These amounts include director and consulting fees paid to non-executive directors as well as salary and
paid leave benefits awarded to executive directors.
h) Post-employment benefits
These amounts are superannuation contributions made during the year.
Transactions with Directors and Director related entities
There were no other transactions with Directors or Director related entities during the year.
Loans to Key Management Personnel
There was no loans to KMP during the year.
End of Remuneration Report
ENVIRONMENTAL REGULATIONS AND PROCEEDINGS
The Group’s operations are not subject to any significant environmental regulations where it operates.
MEETINGS OF DIRECTORS
The number of Directors’ meetings held during the financial year each director held office and the
number of meetings attended by each director are:
Director
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Directors Meetings
Meetings
Attended
12
12
12
12
Number Eligible
to Attend
12
12
12
12
The full Board currently fulfils the duties of the Remuneration Committee and the Audit Committee.
17
PAINCHEK LIMITED | 27
OPTIONS
At the date of this report, the following options over new ordinary shares in the Company were on issue.
PainChek Limited
Type
Date of Expiry
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
22 July 2022
9 November 2023
30 June 2022
31 March 2024
26 September 2024
23 March 2025
28 April 2025
25 August 2025
24 September 2025
Exercise
Price
$0.0726
$0.032
$0.25
$0.21
$0.11
$0.09
$0.095
$0.084
$0.075
Number under Option
3,000,000
4,000,000
14,241,379
3,000,000
3,000,000
1,000,000
500,000
5,000,000
7,000,000
Nil ordinary shares were issued (2020: 121,967,121) as a result of the exercise of options during or
since the financial year ended 30 June 2021.
PERFORMANCE RIGHTS
At the date of this report, the following performance rights, convertible for Nil consideration at a ratio of
1:1 into new ordinary shares in the Company were on issue.
Granted to
Non executive
directors
Non executive
directors
CEO
CEO
CEO
CEO
CEO
CEO
Date Right
granted
Expiry date
Share
price at
date of
grant
Value of
performance
rights approved
at the AGM
$0.29
No.of
performance
rights under plan
20/11/2019
30/09/2021
$78,928
825,583
20/11/2019
20/11/2019
20/11/2019
20/11/2019
20/11/2019
20/11/2019
20/11/2019
30/09/2022
01/01/2022
01/01/2023
01/01/2023
01/01/2024
01/01/2024
01/01/2025
$0.29
$78,302
$0.29 $92,833
$0.29
$92,779
$0.29 $58,904
$0.29 $59,421
$0.29 $60,300
$0.29 $56,014
*
466,635
466,635
1,031,979
1,031,978
*
*
3,822,810
*Number of rights for FY2022 to be determined at future date, equivalent to value of performance rights approved at the AGM divided by the
volume weighted average price (VWAP) of PainChek Ltd shares, calculated 5 days either side of and including the date of announcement of
the Company’s annual statutory results for the financial year preceding the the financial year of the Award.
825,583 ordinary shares were issued as a result of the conversion of performance rights since the
financial year ended 30 June 2021.
28 | PAINCHEK LIMITED
18
PainChek Limited
EQUITY HOLDINGS
The relevant interests of each director in the Company’s share capital, options and performance rights at
the date of this report are as follows:
Directors
John Murray
Adam Davey
Philip Daffas
Ross Harricks
Total
Number of
Shares
12,486,402
9,783,965
20,499,581
6,243,201
48,639,841
Number of
Options
-
-
-
-
-
Number of
Performance Rights
412,791
206,396
2,997,227
206,396
3,822,810
INSURANCE OF OFFICERS
To the extent permitted by law, the Company has indemnified (fully insured) each director and the
secretary of the Company. The liabilities insured include costs and expenses that may be incurred in
defending civil or criminal proceedings (that may be brought) against the officers in their capacity as
officers of the Company or a related body, and any other payments arising from liabilities incurred by the
officers in connection with such proceedings, other than where such liabilities arise out of conduct
involving a willful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else or to cause detriment to the Company. It
is not possible to apportion the premium between amounts relating to the insurance against legal costs
and those relating to other liabilities. The company has not insured against or indemnified its auditor.
PROCEEDINGS ON BEHALF OF THE GROUP
The Group is not aware that any person has applied to the court under section 237 of the Corporations
Act 2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings in
which the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part
of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the court under
section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Group and/or the Group are important.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit
services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the
auditor, as set out below, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed to ensure they do not impact the impartiality and
objectivity of the auditor;
none of the services undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants.
•
Details of the amounts paid or payable to the auditor, BDO Audit Pty Ltd for audit services provided
during the year are set out in note 21 to the financial report.
19
PAINCHEK LIMITED | 29
PainChek Limited
2021
$
2020
$
-
-
6,000
6,000
-
-
-
Non-audit services
BDO Audit Pty Ltd
Tax advice services
Tax compliance services
Other assurance services
Total remuneration for non-audit services
Auditor’s independence declaration
The auditor’s independence declaration is included on the following page.
Signed in accordance with a resolution of directors.
John Murray
Chairman
31 August 2021, Sydney, NSW
Notes to the financial statements are included on pages 32 to 56
30 | PAINCHEK LIMITED
20
Auditor’s independence declaration
PainChek Limited
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF PAINCHEK LIMITED
As lead auditor of PainChek Limited for the year ended 30 June 2021, 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
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF PAINCHEK LIMITED
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
As lead auditor of PainChek Limited for the year ended 30 June 2021, I declare that, to the best of my
This declaration is in respect of PainChek Limited and the entities it controlled during the year.
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 PainChek Limited and the entities it controlled during the year.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 31 August 2021
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 31 August 2021
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
19
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
PAINCHEK LIMITED | 31
21
19
Consolidated statement of profit or loss and other
comprehensive income for the year ended 30 June 2021
PainChek Limited
Revenue
Other income – R&D Grant & other rebates
Other income – Government Grant
Cost of sales
Research and development expenses
Marketing and business development expenses
Corporate administration expenses
Share based payment expenses
Loss before income tax
Consolidated
Consolidated
30 June 2021
$
30 June 2020
$
Note
3
4
5
6
15
233,887
1,136,601
1,750,000
(639,010)
(2,652,106)
(1,570,900)
(3,612,398)
(709,720)
(6,063,647)
297,175
848,835
1,750,000
(265,173)
(2,270,461)
(1,260,954)
(2,584,273)
(8,907,808)
(12,392,659)
7
Income tax benefit
Loss for the period attributable to Owners of PainChek
Limited
-
-
(6,063,647)
(12,392,659
Other comprehensive income, net of income tax
Exchange differences relating to translation of foreign
operations
Other comprehensive income for the period, net of
income tax
Total comprehensive loss for the period
Loss and total comprehensive loss attributable to:
Owners of PainChek Limited
(7,370)
(13,622)
-
(6,071,017)
-
(12,406,281)
(6,071,017)
(12,406,281)
Loss per share:
Basic and diluted (cents per share)
8
(0.55)
(1.3)
Notes to the financial statements are included on pages 34 to 58
Notes to the financial statements are included on pages 24 to 47.
32 | PAINCHEK LIMITED
22
Consolidated statement of financial position as at 30 June 2021
PainChek Limited
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated Consolidated
30 June 2020
$
30 June 2021
$
Note
19
9
10
11
12
14
15
11,419,512
372,929
11,792,441
6,120,090
77,599
6,197,689
18,455
18,455
11,810,896
17,952
17,952
6,215,641
3,399,364
167,153
3,566,516
3,566,516
8,244,379
1,971,631
115,553
2,087,184
2,087,184
4,128,457
30,738,987
12,790,230
(35,284,838)
8,244,379
21,261,767
12,095,111
(29,228,421)
4,128,457
Notes to the financial statements are included on pages 34 to 58
Notes to the financial statements are included on pages 24 to 47.
23
PAINCHEK LIMITED | 33
Consolidated statement of changes in equity for the
year ended 30 June 2021
PainChek Limited
Company
Note
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
$
Consolidated
Balance at 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive loss for
the period
Transactions with owners in
their capacity as owners:
Issue of ordinary shares (refer to
note 14)
Issue of ordinary shares on
conversion of options (refer to
note 14)
Share issue costs (refer to note
14)
Recognition of share based
payments (refer to note 15)
Balance at 30 June 2020
Consolidated
Balance at 1 July 2020
Loss for the year
Other comprehensive income
Total comprehensive loss for
the period
Transactions with owners in
their capacity as owners:
Issue of ordinary shares (refer to
note 14)
Share issue costs (refer to note
14)
Recognition of share based
payments (refer to note 15)
Balance at 30 June 2021
17,755,759
3,200,925
(16,835,762)
(12,392,659)
-
4,120,922
(12,392,659)
(13,622)
(13,622)
-
-
1,000,000
2,561,705
(55,697)
(13,622)
(12,392,659)
(12,406,281)
-
-
-
-
-
-
1,000,000
2,561,705
(55,697)
-
8,907,808
21,261,767 12,095,111
-
(29,228,421)
8,907,808
4,128,457
21,261,767 12,095,111
-
-
(29,228,421)
(6,063,647)
-
-
(14,600)
(14,600)
7,230
(6,056,417)
4,128,457
(6,063,647)
(7,370)
(6,071,017)
10,000,000
(522,781)
-
-
709,720
-
-
-
10,000,000
(522,781)
709,720
30,738,986 12,790,231
(35,284,838)
8,244,379
Notes to the financial statements are included on pages 34 to 58
Notes to the financial statements are included on pages 24 to 47.
34 | PAINCHEK LIMITED
24
Consolidated statement of cash flows for the year
ended 30 June 2021
PainChek Limited
Cash flows from operating activities
Receipts from customers
Receipt from government grant
Payments to suppliers and employees
Interest received
Rebates and grants received
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
(Payment) of share issue costs
Net cash (used in)/provided by financing activities
Consolidated Consolidated
Year ended
Note
30 June 2021
$
30 June 2020
$
168,293
1,353,316
(6,787,569)
19,090
1,125,820
(4,121,050)
374,164
3,000,000
(6,149,850)
40,162
848,835
(1,886,689)
19.1
(60,032)
(60,032)
(45,561)
(14,501)
14
14
10,000,000
(522,781)
9,477,219
3,561,705
(55,696)
3,506,009
Net increase / (decrease) in cash and cash equivalents
5,296,136
1,573,759
Cash and cash equivalents at the beginning of the period
Effect of FX on cash balances
Cash and cash equivalents at the end of the period
6,120,090
3,286
11,419,512
4,562,476
(16,145)
6,120,090
19
Notes to the financial statements are included on pages 34 to 58
Notes to the financial statements are included on pages 24 to 47.
25
PAINCHEK LIMITED | 35
PainChek Limited
Notes to the financial statements for the year ended 30 June 2021
1.
Significant accounting policies
Basis of preparation
PainChek Ltd (the “Consolidated Entity”) is a listed public company, incorporated and domiciled in
Australia. The group’s principal activities are development and commercialization of mobile
medical device applications that provide pain assessment for individuals that are unable to
communicate with their carers.
The financial report is presented in Australian dollars.
The financial report is a general purpose financial report, which has been prepared in accordance
with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and complies
with other requirements of the law.
The financial information has been prepared on the accruals basis and is based on historical costs
and does not take into account changing money values. Cost is based on the fair values of the
consideration given in exchange for assets.
Statement of Compliance
The financial report was authorised for issue on 31 August 2021.
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures
that the financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (“IFRS”).
Standards and Interpretations on issue not yet adopted
Certain new accounting standards and interpretations have been published that are not yet
mandatory for 30 June 2021 reporting periods. The Consolidated Entity has decided against early
adoption of these standards. The Consolidated Entity has assessed the impact of these new
standards and interpretations and does not expect that there would be a material impact on the
Consolidated Entity in the current or future reporting periods and on foreseeable future
transactions.
New and amended standards adopted by the Group
The accounting policies adopted are consistent with those of the previous financial year. Several
other amendments and interpretations were applied for the first time during the year, but these
changes did not have an impact on the Consolidated Entity’s financial statements, and hence, have
not been disclosed.
36 | PAINCHEK LIMITED
26
PainChek Limited
Going concern basis
The accompanying consolidated financial statements have been prepared on a going concern basis.
The going concern basis of presentation assumes that the Company will continue in operation for
the foreseeable future and will be able to realise its assets and discharge its liabilities and
commitments in the normal course of business.
As disclosed in the financial statements, the consolidated entity has net operating cash outflows for
the year of $4,121,051 (2020: $1,886,689) and net current assets of $8,225,925 (30 June 2020:
$4,110,595). The consolidated entity also generated a loss after tax of $6,063,647 (2020:
$12,392,659).The financial statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of assets and settlement of
liabilities in the normal course of business. As such, the group’s ability to continue to adopt the
going concern assumption will depend upon a number of matters including the successful
commercialisation of its intellectual property in a manner that generates sufficient operating cash
inflows.
The Directors believe that the preparation of the financial statements using the going concern basis
of accounting is appropriate based on cash flow forecasts which show the Consolidated Entity is
expected to be able to pay its debts as and when they fall due for the next 12 months and to realise
the value of its assets and discharge its liabilities in the ordinary course of business. Key factors in
those forecasts include:
•
continued growth and commercialisation of the consolidated entity’s products resulting in
increases in revenue and cash flow;
• ability to reduce costs and implement efficiency improvements; and
•
continued government support including receipt of Research & Development grants.
Significant accounting policies of the Consolidated Entity
Set out below are the significant accounting policies that have been applied in the preparation of
the consolidated financial statements:
Fair Values
The fair values of consolidated entity’s financial assets and financial liabilities approximate their
carrying values due to short –term in nature. No financial assets or financial liabilities are readily
traded on organised markets in standardised form.
(a)
Principles of Consolidation
The consolidated financial statements comprise the financial statements of all subsidiaries of the
Company and the results of all subsidiaries from the date that control was obtained. The
Company controls another entity when the Company is exposed to, or has the rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is fully transferred. They are
deconsolidated from the date control ceases.
The financial statement of the subsidiary is prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions,
income and expenses and profit and losses resulting from intra-group transactions have been
eliminated in full.
27
PAINCHEK LIMITED | 37
PainChek Limited
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A
change in ownership interest without a loss of control is accounted for as an equity transaction.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
financial statements. Losses incurred by the consolidated entity are attributed to the non-
controlling interests in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets
including goodwill, liabilities and non-controlling interest in the subsidiary, together with any
cumulative translation differences in equity. The consolidated entity recognises the fair value of
the consideration received and the fair value of any investment retained together with any gains
or losses in profit or loss.
(b)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted by the balance
date.
Deferred income tax is provided on all temporary differences at the balance date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and the carry-forward
of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, in which case a deferred tax asset is only recognised
to the extent that it is probable that the temporary difference will reverse in the foreseeable
future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax
assets are reassessed at each balance date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the balance date.
38 | PAINCHEK LIMITED
28
PainChek Limited
Income taxes relating to items recognised directly in equity are recognised in equity and not in
profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists
to set off current tax assets against current tax liabilities and the deferred tax assets and
liabilities relate to the same taxable entity and the same taxation authority.
(c)
Impairment of non – financial Assets
The Group assesses at each balance date whether there is an indication that an asset may be
impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the
Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount
is the higher of its fair value less costs to sell and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets and the asset's value in use cannot be estimated to
be close to its fair value. In such cases the asset is tested for impairment as part of the cash
generating unit to which it belongs. When the carrying amount of an asset or cash-generating
unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired
and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. Impairment losses relating to continuing operations are
recognised in those expense categories consistent with the function of the impaired asset unless
the asset is carried at revalued amount (in which case the impairment loss is treated as a
revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit
or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a
revaluation increase.
After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remaining useful
life.
(d)
Share-based Payment Transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by
using a suitable option pricing model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other
than conditions linked to the price of the shares of the Company.
29
PAINCHEK LIMITED | 39
PainChek Limited
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance and/or service conditions are fulfilled, ending
on the date on which the relevant recipient of the equity becomes fully entitled to the award
(the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Company’s
best estimate of the number of equity instruments that will ultimately vest. No adjustment is
made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The profit or loss charge or
credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where
vesting is only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if
the terms had not been modified. In addition, an expense is recognised for any modification that
increases the total fair value of the share-based payment arrangement, or is otherwise beneficial
to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph.
(e)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid
investments 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.
For the purpose of the Statement of Cash Flows, cash includes on hand and other funds held at
call net of bank overdrafts.
(f)
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.
The group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. Management has
determined that assessment of expected credit loss associated with trade receivables is
immaterial.
(g)
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
40 | PAINCHEK LIMITED
30
PainChek Limited
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant
and equipment over their expected useful lives as follows:
Plant and equipment
Less than 5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future
economic benefit to theGroup. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
(h)
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently measured at
amortised cost using the effective interest method These amounts represent liabilities for goods
and services provided to the Group prior to the end of the financial year and which are unpaid.
Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
(i)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled within 12 months of the reporting date are recognised in current
liabilities in respect of employees' services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months
of the reporting date are recognised in non-current liabilities, provided there is an unconditional
right to defer settlement of the liability. The liability is measured as the present value of
expected future payments to be made in respect of services provided by employees up to the
reporting date.. Consideration is given to expect future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on corporatebonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which
they are incurred.
(j)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(k)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the Group,
adjusted to exclude any costs of servicing equity, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
31
PAINCHEK LIMITED | 41
PainChek Limited
Diluted earnings per share is calculated as net profit attributable to members of the Group,
adjusted for:
•
•
costs of servicing equity;
the weighted average number of additional ordinary shares that would have been
outstanding assuming the conversion of all dilutive potential ordinary shares;
the after tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
•
• other non-discretionary changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares divided by the weighted average number of
ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(l)
i)
Revenue from Contracts with Customers and Government Grants
Software subscriptions
Revenue from the sale of term (subscription) licences is recognised on a straight line basis over
the subscription term.
ii)
Training
Revenue from the provision of training services is recognised typically at a point in time when the
Company has provided training and has met the performance obligation.
iii)
Software support (maintenance)
Revenue for software support is recognised on a straight line basis over the service period as
performance obligations require the Consolidated Entity to respond to requests made by
customers to provide technical product support and unspecified updates, upgrades and
enhancements on a when-available and if-available basis.
iv)
Incremental Costs of obtaining Customer Contracts
Commissions on software subscriptions are capitalised and amortised over the term, where the
term is greater than 12 months.
v)
Contract Liabilities
A contract liability is recognised when a customer initially purchases services and goods, it is
released as they are delivered to the customer.
vi)
Contract Assets (Trade Receivables and Work in progress)
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within 30 days and therefore
are all classified as current. Trade receivables are recognised initially at the amount of
consideration that is unconditional unless they contain significant financing components, when
they are recognised at fair value. The Company holds the trade receivables with the objective to
collect the contractual cash flows and therefore measures them subsequently at amortised cost
using the effective interest method.
Work in progress represents costs incurred and profit recognised for services that are in progress
at balance date and the Company has an enforceable right to payment for its performance
completed to date.
vii)
Unsatisfied performance obligations
The Company continues to recognise its contract liabilities under AASB 15 in respect of any
unsatisfied performance obligations, which are disclosed as Unearned revenue in the Statement
of Financial Position.
42 | PAINCHEK LIMITED
32
PainChek Limited
viii)
Financing components
The Company does not recognise adjustments to transition prices or Contract balances where
the period between the transfer of promised goods or services to the customer and payment by
customer does not exceed one year.
The Company reviewed its prior year contracts and did not identify material adjustments in
timing and amounts recognised as revenue in prior years.
Government grants
ix)
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the related costs, for
which it is intended to compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life of the related asset.
(m)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective
restatement or reclassifies items in its financial statements, an additional (third) statement of
financial position as at the beginning of the preceding period in addition to the minimum
comparative financial statements is presented. No adjustments was made to prior year numbers.
(n)
Significant accounting judgements and key estimates
The preparation of financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expense. Actual results may differ from these estimates.
In preparing these statements, the key estimates made by management in applying the
Consolidated Entity’s accounting policies in particular to:
• Going concern – refer note 1 above.
• The valuation of share-based payments - refer to note 15;
• Recognition of Government Grant income when milestones are reasonably assured of
being met as detailed in notes 4, 5 and 11; and
• Recognition of a payroll tax liability related to options issued – refer to note 11.
2.
Segment information
Operating segments are presented using the ‘management approach’, where information presented
is on the same basis as the internal reports provided to the Chief Operating Decision Makers
(CODM). The CODM is responsible for the allocation of resources to operating segments and
assessing their performance. The Group operates predominantly in one segment, being the sale of
its pain assessment solutions. The primary financial statements reflects this segment.
3. Revenue
Subscription revenue – recognised over time
Interest income
Total Revenue
Consolidated
2021
$
214,798
19,089
Consolidated
2020
$
248,194
48,981
233,887
297,175
33
PAINCHEK LIMITED | 43
4. Other income
ATO cash boost
COVID-19 government payments
Research & Development Tax Incentive
Total Other Income
PainChek Limited
Consolidated
2021
$
50,000
28,280
1,058,320
1,136,601
Consolidated
2020
$
50,000
-
798,835
848,835
Research and development tax incentive
The consolidated entity
is eligible for the Commonwealth Government research and
development tax incentive. To be eligible the company must meet stringent guidelines on what
represents both core and supporting activities of research and development. Government grants
are not recognised until there is reasonable assurance that the company will comply with the
conditions attaching to them and the grants will be received which generally coincides with
lodgement of the return with the regulatory body.
5. Other income – government grants
Government grant
Total government grants
Consolidated
2021
$
1,750,000
1,750,000
Consolidated
2020
$
1,750,000
1,750,000
In December 2019, the Australian Government signed a grant funding contract with the
Company for the national trial of the PainChek application for Australians with dementia living in
residential aged care facilities. The Grant ended 31 May 2021.
The intended outcome of the grant is to improve diagnosis and management of pain in people
living with dementia in residential aged care. During this period, PainChek Limited also entered
into agreements with end users acknowledging the Australian Government grant and allowing
for the first period of those agreements to be funded in accordance with the Australian
Government grant agreement.
During the year, the Group received $1,353,316 (FY20: $3,000,000) pursuant to the terms of the
funding contract of which $1,750,000 (FY20: $1,750,000) has been recognised as income and at
30 June 2021 the balance of $853,316 (FY20: $1,250,000) has been recognised as deferred
income – see note 11.
44 | PAINCHEK LIMITED
34
6.
Loss for the year
Loss for the year has been arrived at after charging the
following items of expenses:
Corporate administration expenses
Salaries & oncosts
Superannuation
Payroll Tax assessment
Board fees
Company secretary fees
Consultants fees
Travel
Legal and professional fees
Regulatory
Share registry fees
ASX
Audit & tax
IT & telecommunications
Other administration expenses
Payroll Tax Assessment
See also note 11
7.
Income taxes
7.1
Income tax recognised in profit or loss
Current tax expense/(income)
Deferred tax expense/(income)
Tax losses not recognised
Total Tax expense/(income)
PainChek Limited
Consolidated
2021
Consolidated
2020
$
$
426,174
210,043
1,400,414
160,000
131,400
272,234
28,156
116,343
8,313
55,169
80,035
185,202
144,246
394,669
3,612,398
567,104
158,547
-
152,000
142,720
439,608
185,840
114,871
124,459
54,862
105,935
94,527
106,631
337,169
2,584,273
Consolidated
2021
$
Consolidated
2020
$
(1,501,202)
(49,186)
1,550,388
-
(1,075,247)
10,487
1,064,760
-
The income tax expense for the year can be reconciled to the accounting loss as follows:
Loss before tax from continuing operations
Income tax expense/(revenue) calculated at 26% (2020: 27.5%)
Effect of items that are not assessable/deductible in
determining taxable loss:
Non-deductible expenses
Non-assessable income
Effect of unused tax losses not recognised as deferred tax assets
Consolidated
2021
$
(6,063,646)
Consolidated
2020
$
(12,392,659)
(1,576,548)
(3,407,982)
329,387
(303,227)
1,550,388
-
2,577,648
(234,427)
1,064,761
-
The tax rate used for the 2021 was 26% and 2020 was 27.5% to calculate the reconciliations above being
the corporate tax rate payable by Australian corporate entities on taxable profits under Australian tax
law in those years.
The Company has no franking credits available for recovery in future years.
35
PAINCHEK LIMITED | 45
7.2
Income tax recognised directly in equity
Current tax
Share issue costs
Deferred tax
Share issue costs deductible over 5 years
7.3
Unrecognised deferred tax assets
PainChek Limited
Consolidated
2021
$
Consolidated
2020
$
(135,923)
(55,696)
-
(135,923)
-
(55,696)
Consolidated
2021
$
Consolidated
2020
$
Unused tax losses (revenue) for which no deferred tax assets
have been recognised
Temporary differences
3,101,481
293,555
3,523,109
218,750
All unused tax losses were incurred by Australian entities.
This benefit for tax losses will only be obtained if the specific entity carrying forward the tax losses
derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised, and the Group complies with continuity of business / same
business test and the conditions for deductibility imposed by tax legislation.
8.
Loss per share
Basic and diluted loss per share (cents per share)
Consolidated
2021
$
Consolidated
2020
$
(0.55)
(1.3)
The loss and weighted average number of ordinary shares used in the calculation of basic loss
per share are as follows:
Loss for the year attributable to the owners of the Company
(6,063,647)
(12,392,659)
Consolidated
2021
$
Consolidated
2020
$
Weighted average number of ordinary shares for the
purposes of basic and diluted loss per share
Consolidated
2021
No.
Consolidated
2020
No.
1,111,992,128
989,161,514
Options and Performance Rights on issue are considered to be anti-dilutive while the entity is
making losses.
9.
Trade and other receivables
Other receivables
Prepayments
At the reporting date, no receivables are past due.
46 | PAINCHEK LIMITED
Consolidated
2021
$
315,822
57,107
372,929
Consolidated
2020
$
69,094
8,505
77,599
36
10.
Property, plant and equipment
Carrying amounts of
Computer Equipment – at cost
Cost
Balance at 1 July 2020
Additions
Disposals
Balance at 30 June 2021
Accumulated depreciation
Balance at 1 July 2020
Depreciation expense
Disposals
Balance at 30 June 2021
Net book value
11.
Trade and other payables
Trade creditors
Deferred income
Contract liability
Accruals and other payables
PainChek Limited
Consolidated
2021
$
32,600
Consolidated
2020
$
21,036
Consolidated
2021
$
66,036
60,032
-
126,249
Consolidated
2021
$
(48,084)
(59,259)
(107,613)
Consolidated
2020
$
20,475
45,561
-
66,036
Consolidated
2020
$
4,759
43,325
-
48,084
18,455
17,952
Consolidated
2021
$
325,135
853,316
191,893
2,196,172
3,399,364
Consolidated
2020
$
231,207
1,250,000
-
490,424
1,971,631
Trade creditor payment terms are 30 days from end of month.
Dererred income comprises the Federal Government Grant received and recognised as deferred
income until the related costs, for which the grant is intended to compensate, are incurred.
Contract liability is the customer initial payments for subscriptions and training recognised as a
contract liability until the services are delivered. Customer terms vary between 1 month and 1
year payment in advance.
Payroll Tax liability
Accruals and Other Payables includes $1,400,414 Payroll Tax assessment received, relating to the
30 June 2020 year.
The NSW Office of State Revenue issued an amended 2020 payroll tax assessment in relation to
options issued in 2016 and exercised in 2020. This assessment indicated that Painchek had a
liability of $1.4m (including penalties) related to the 2020 financial year.
Painchek has accrued for this liability in full in its 30 June 2021 financial statements.
37
PAINCHEK LIMITED | 47
12.
Provisions
Provision for employee entitlements
13.
Subsidiaries
PainChek Limited
Consolidated
2021
$
167,153
Consolidated
2020
$
115,553
The consolidated financial statements include the financial statements of PainChek Limited and its
wholly owned subsidiary companies Electronic Pain Assessment Technologies (EPAT) Pty Ltd and
PainChek UK Limited.
14.
Issued capital
1,126,804,799 fully paid ordinary shares (June 2020:
1,035,522,400)
Consolidated
2021
$
Consolidated
2020
$
30,738,987
21,261,768
Movements during the
period
Balance at beginning of the
period
Placement – issued at $0.11
(FY20: $0.25) per share
Exercise of options –
exercise price from $0.02 to
$0.25
Exercise of performance
rights – exercise price $0.00
Capital raising costs (net of
tax)
Balance at end of period
2021
Number
2020
Number
2021
$
2020
$
1,035,522,400
906,658,727
21,261,767
17,755,759
90,909,091
6,896,552
10,000,000
1,000,000
-
121,967,121
373,808
-
2,561,704
-
-
-
1,126,804,799
-
1,035,522,400
(522,781)
30,738,987
(55,696)
21,261,767
Fully paid ordinary shares carry one vote per share and carry the right to dividends. Ordinary shares
participate in the proceeds on winding up of the Company in proportion to the number of shares
held.
15. Reserves
Balance at beginning of the reporting period
Share based payments reserve
Foreign currency translation reserve
Total reserves at end of period
48 | PAINCHEK LIMITED
Consolidated
2021
$
Consolidated
2020
$
12,095,111
709,720
(14,600)
12,790,231
3,200,925
8,907,808
(13,622)
12,095,111
38
Reconcilation of movement in reserves
Opening balance
Foreign exchange gain/loss recognised
Share based payments reserve
Total reserves at end of period
PainChek Limited
Share based
payments
reserve
12,108,733
-
709,720
12,818,453
Foreign
exchange
reserve
(13,622)
(14,600)
-
(28,222)
Total
12,095,111
(14,600
709,720
12,790,231
The foreign currency translation reserve records exchange rate differences arising from the
translation of the financial statements of foreign subsidiaries.
The share based payments reserve is used to record the value of share based payments provided to
employees as part of their remuneration and to consultants for services provided.
Financial instruments
16.1
Capital management
The Group manages its capital to ensure entities in the Group will be able to continue as going
concern while maximising the return to stakeholders through the optimisation of the debt and
equity balance. The Group’s overall strategy remains unchanged from 2020.
The Group is not subject to any externally imposed capital requirements.
Given the nature of the business, the Group monitors capital on the basis of current business
operations and cash flow requirements.
16.2
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Consolidated
2021
$
Consolidated
2020
$
11,419,512
372,929
11,792,441
6,120,090
77,599
6,197,689
2,354,155
2,354,155
721,631
721,631
The fair value of the above financial instruments approximates their carrying values.
16.3 Financial risk management objectives
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information in
respect of those risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
PAINCHEK LIMITED | 49
39
PainChek Limited
The board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Group’s finance function.
The Group’s risk management policies and objectives are therefore designed to minimise the
potential impacts of these risks on the Group where such impacts may be material. The board
receives monthly financial reports through which it reviews the effectiveness of the processes put
in place and the appropriateness of the objectives and policies it sets. The overall objective of the
board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group’s competitiveness and flexibility.
16.4 Market risk
Market risk for the Group arises from the use of interest bearing financial instruments. It is the
risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in interest rate (see 16.5 below).
16.5
Interest rate risk management
The sensitivity analyses below have been determined based on the exposure to interest rates for
both derivatives and non-derivative instruments at the end on the reporting period.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for
both derivatives and non-derivative instruments at the end on the reporting period.
If interest rates had been 100 basis points higher/lower and all other variables were held constant,
the Group’s loss for the year ended 30 June 2021 would increase/decrease by $120,000
(2020:$61,000).
16.6 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Group. The Group has adopted a policy of dealing with creditworthy
counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the
risk of financial loss from defaults. The Group only transacts with entities that are rated the
equivalent of investment grade and above. This information is supplied by independent rating
agencies where available and, if not available, the Group uses other publicly available financial
information and its own trading records to rate its major customers. The Group’s exposure and the
credit ratings of its counterparties are continuously monitored and the aggregate value of
transactions concluded is spread amongst approved counterparties.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-
ratings assigned by international credit-rating agencies.
16.7 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which has
established 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 by maintaining adequate banking facilities, by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and
liabilities.
50 | PAINCHEK LIMITED
40
PainChek Limited
Contractual cash flows
Carrying
Amount
Less than 1
month
1-3
months
3-12
months
1 year to
5 years
$
$
$
$
$
Total
contractual
cash flows
$
2021
Trade and other payables
2020
Trade and other payables
2,354,155
2,354,155
721,631
721,631
-
-
-
-
-
-
2,354,155
721,631
17.
Key management personnel
The aggregate compensation made to directors and other members of key management personnel
of the Company is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
18. Related party transactions
18.1 Entities under the control of the Group
Consolidated
2021
$
639,599
34,994
265,293
939,886
Consolidated
2020
$
603,399
34,891
8,363,038
9,001,328
Parent Entity: PainChek Ltd
Australia
Country of
Incorporation
Perecentage Owned (%)*
2021
2020
Electronic Pain Assessment
Technology (EPAT) Pty Ltd
PainChek UK Limited
Australia
England
100%
100%
100%
100%
*Percentage of voting power is proportional to ownership
18.2 Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to note 17.
18.3 Other related party transactions
All transactions between the Group and related parties are on an arms-length basis.
41
PAINCHEK LIMITED | 51
PainChek Limited
19. Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand
and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the
reporting period as shown in the statement of cash flows can be reconciled to the related items in
the statement of financial position as follows:
Cash and bank balances
Consolidated
2021
$
11,419,512
Consolidated
2020
$
6,120,090
19.1 Reconciliation of loss for the year to net cash flows from operating activities
Cash flow from operating activities
Loss for the year
Adjustments for:
Depreciation
Share based payments
Movements in working capital
(Increase)/decrease in other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase in provisions
Net cash outflows from operating activities
Consolidated
2021
$
Consolidated
2020
$
(6,063,647)
(12,392,659)
59,529
709,720
43,026
8,907,808
(232,622)
(48,562)
1,402,932
51,600
(4,121,050)
92,283
1,288
1,409,261
52,306
(1,886,689)
20. Commitments and contingencies
As per agreement with KPMG for Monitoring and Evaluation of the National Rollout of PainChek
dated 4 February 2021, Company has agreed to Fees, payable in 4 stages on in accordance with a
deliverable schedule. The remaining commitment is $175,749 is due in less than 12 months.
21. Remuneration of auditors
Auditor of the parent entity
Audit and review of the financial statements
Other non-audit services
The auditors of PainChek Ltd are BDO Audit Pty Ltd.
Consolidated
2021
$
63,359
6,000
69,359
Consolidated
2020
$
54,129
-
54,129
52 | PAINCHEK LIMITED
42
PainChek Limited
22. Events after the reporting period
There are no events after the reporting period significant enough for disclosure.
23. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the 2020
financial information shown below, are the same as those applied in the financial statements.
Refer to note 1 for a summary of significant accounting policies relating to the Group. The legal
Parent Entity of the Consolidated Entity is Painchek Limited.
Financial position of PainChek Limited
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Provisions
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
2020
$
2019
$
11,444,688
15,050
11,459,738
3,067,649
147,709
-
3,215,358
8,244,380
5,914,148
-
5,914,148
1,689,885
95,807
-
1,785,692
4,128,457
39,493,692
12,857,465
(44,106,777)
8,244,380
30,016,473
12,147,745
(38,035,761)
4,128,457
(6,071,016)
(12,470,433)
24. Approval of financial statements
The financial statements were approved by the board of directors and authorised for issue on 31
August 2021.
43
PAINCHEK LIMITED | 53
PainChek Limited
25 SHARE BASED PAYMENTS
Performance rights
The Company has granted performance rights to the non-executive directors (NEDs) and the CEO at the
2019 AGM. The performance rights were granted for nil consideration and are not quoted on the ASX.
Performance rights granted carry no dividend or voting rights. When vested, each performance right is
convertible into one ordinary share.
Details of performance right issued, exercised and expired during the financial year are set out below:
Expiry Date
Tranche
30/09/2020
30/09/2021
30/09/2022
01/01/2022
01/01/2023
01/01/2023
01/01/2024
01/01/2024
01/01/2025
NEDs 1
NEDs 2
NEDs 3
CEO 1A
CEO 1B
CEO 2A
CEO 2B
CEO 3A
CEO 3B
Exercise
Price
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
VWAP
Price
$0.29
$0.10
*
$0.21^
$0.21^
$0.10^
$0.10^
*
*
1 July 2020
Issued
Movements
Exercised
373,308
-
-
466,635
466,635
-
-
-
-
-
825,583
-
-
-
1,031,979
1,031,978
-
-
(373,308)
-
-
-
-
-
-
-
-
Expired /
Forfeited
-
-
-
-
-
-
-
-
-
30 June
2021
-
825,583
-
466,635
466,635
1,031,979
1,031,978
-
-
1,306,578
2,889,540
(373,308)
-
3,822,810
The performance rights outstanding at the end of the year had a weighted average exercise price of nil
and a weighted average remaining contractual life of 0.8 years (2020: 1.3 years)
*Number of rights for FY2022 to be determined at future date, equivalent to value of rights approved at the AGM
divided by the volume weighted average price (VWAP) of PainChek Ltd shares, calculated 5 days either side of and
including the date of announcement of the Company’s annual statutory results for the financial year preceding the
the financial year of the Award.
^ Refer details of vesting conditions below.
The following table shows the calculation of the Performance Rights issued as part of Philip Daffas’
remuneration for holding office during FY20 and FY21 and vesting dates, if Philip Daffas remains in office
and the relevant Award Target Price is achieved on the relevant vesting date:
Annual Value of
Performance Rights for
FY20 and FY21
Share price calculated
based on the VWAP 5
days (and including the
day of) either side of
FY19 and FY20 statutory
results
No. of
Performance
Rights
Vesting Date
Award
Target
Price
$100,000
$0.2143
466,636
1 October 2021
$0.2834
$100,000
$0.2143
466,635
1 October 2022
$0.3259
$100,000
$0.0969
1,031,979
1 October 2022
$0.1282
$100,000
$0.0969
1,031,979
1 October 2023
$0.1474
54 | PAINCHEK LIMITED
44
PainChek Limited
The performance shares have the following key terms and conditions:
Non- executive directors:
a) each non-executive director will in each end of financial year on 30 June 2020, 2021 and
2022 receive 1/3 of their total annual remuneration in Performance Rights;
b) the number of Performance Rights issued for a year will be calculated based on the VWAP of
the Company’s ordinary shares calculated 5 days either side of and including the date of
announcement of the company’s annual statutory results for the financial year;
c) Performance Rights will vest at 30 June each subsequent year - being the end of the financial
year subject to the director remaining a director of the Company at that date;
d) each Performance Right has the conditional right to acquire one Share;
e) the Performance rights are issued for Nil consideration;
f)
g) the Performance Rights are subject to the terms and conditions of the LTI Plan
the Performance Rights expire 3 months after the vesting date
CEO
The issue of Performance Rights to Philip Daffas to the value of $600,000 over the next 3 years with
an annual limit of $200,000 for Philip Daffas or his nominee(s) to acquire one Share for each
Performance Right held pursuant to the LTI Plan and as part of Philip Daffas' remuneration.
The Performance Rights issued for a year will be issued at the VWAP of the Company’s ordinary
shares calculated 5 days either side of and including the date of announcement of the company’s
annual statutory results for the financial year preceding the financial year of the grant of the
Performance Rights (Award Issue Price).
a) 50% of the annual grant of $200,000 worth of Performance Rights will vest two years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a.
(Award Target Price) from the relevant Award Issue Price and provided that Philip Daffas
remains employed by the Company at that date (unless he is a Good Leaver as defined in the
LTI Plan in which case he retains the relevant pro rata portion of the grant subject to the
increase in Share price vesting condition); and
b) 50% of the annual grant of $200,000 worth of Performance Rights will vest three years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a.
from the relevant Award Issue Price and provided that Philip Daffas remains employed by the
Company on that date (unless he is a Good Leaver as defined in the LTI Plan in which case he
retains the relevant pro rata portion of the grant subject to the increase in Share price vesting
condition).
45
PAINCHEK LIMITED | 55
PainChek Limited
Fair value of performance shares granted
The assessed fair value at the date of grant of performance shares issued is determined using a option
pricing models that takes into account the exercise price, the underlying share price at the time of issue,
the term of the performance share, the underlying share’s expected volatility, expected dividends and the
risk free interest rate for the expected life of the instrument.
The value of the performance shares was calculated using the inputs shown below:
Non- executive directors
The fair value at the date of grant of performance rights issued to the non-executive directors was
calculated based on the share price at the date of issue ($0.29) (tranche 1), the value of the award
specified in applicable years 2021 (tranche 2) and 2022 (tranche 3) over the vesting period.
Grant date
Exercise price
Vesting condition
Vesting date
Share price at date of grant
Expected dividends
Expiry day
Life of instrument
Fair value of instrument
Tranche 1
20 November 2019
Nil
Refer above
30 June 2020
$0.29
nil
30 September 2020
0.9
$108,259
Tranche 2
20 November 2019
Nil
Refer above
30 June 2021
$0.29
nil
30 September 2021
1.9
$78,927
Tranche 3
20 November 2019
Nil
Refer above
30 June 2022
$0.29
nil
30 September 2022
2.9
$78,301
The performance rights outstanding at the end of the year had a weighted average exercise price of nil
and a weighted average remaining contractual life of 0.8 years (2020:1.3 years)
56 | PAINCHEK LIMITED
46
PainChek Limited
CEO
Grant date
Exercise
price
Vesting
conditions
Share price
calculation
date
Vest date
Share price
at date of
grant
Expected
dividends
Expiry date
Tranche 1A
20/11/19
Tranche 1B
20/11/19
Tranche 2A
20/11/19
Tranche 2B
20/11/19
Tranche 3A
20/11/19
Tranche 3B
20/11/19
Nil
Nil
Nil
Nil
Nil
Nil
Refer above
- 50% will
vest after 2
years from
grant date
5
September
2019
1 Oct 2021
Refer above
- 50% will
vest after 3
years from
grant date
5
September
2019
1 Oct 2022
Refer above
- 50% will
vest after 3
years from
grant date
5
September
2020
1 Oct 2022
Refer above
- 50% will
vest after 4
years from
grant date
5
September
2020
1 Oct 2023
Refer above
- 50% will
vest after 4
years from
grant date
5
September
2021
1 Oct 2023
Refer above
- 50% will
vest after 5
years from
grant date
5
September
2021
1 Oct 2024
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
Nil
Nil
Nil
Nil
Nil
Nil
1 January
2022
1 January
2023
1 January
2023
1 January
2024
1 January
2024
1 January
2025
Life (years)
2.12
3.12
3.12
4.12
4.12
5.12
Fair value
$0.1979
$0.1980
$0.1711
$0.1773
$0.1763
$0.1536
Volatility
Risk free
rate
Pricing
model
100%
0.80%
100%
0.80%
100%
0.80%
100%
0.80%
100%
0.80%
100%
0.80%
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
Monte-
Carlo
Simulation
The performance rights outstanding at the end of the year had a weighted average exercise price of nil
and a weighted average remaining contractual life of 2 years (2020:3 years)
Summary of vesting dates
Non-executive directors
Remuneration
for year
ended 30 June
Share price
calculation
date
(estimated)
Grant date
Vesting date
Likely date that
Performance
Rights will
convert to shares
Expiry Date of
Performance
Rights if not
converted to
shares
2020
2021
2022
5/09/2019
20/11/2019
30/06/2020
30/07/2020
5/09/2020
20/11/2019
30/06/2021
30/07/2021
5/09/2021
20/11/2019
30/06/2022
30/07/2022
30/09/2020
30/09/2021
30/09/2022
47
PAINCHEK LIMITED | 57
PainChek Limited
CEO
The Award Target Price will be calculated based on the 10 days VWAP leading up to and including
the relevant vesting date.The following table summarises the above terms:
Remuneration
for year
ended 30 June
Share Price
Calculation
date
(estimated)
Grant date
Vesting date
assuming share
price hurdle is
met
Likely date that
Performance
Rights will
convert to shares
Expiry Date of
Performance
Rights if not
converted to
shares
2020
5/09/2019
20/11/2019
2021
5/09/2020
20/11/2019
2022
5/09/2021
20/11/2019
Options
50% on
1/10/2021; 50%
on 1/10/2022
50% on
30/10/2021; 50%
on 30/10/2022
50% on 1/1/2022;
50% on 1/1/2023
50% on
1/10/2022; 50%
on 1/10/2023
50% on
30/10/2022; 50%
on 30/10/2023
50% on 1/1/2023;
50% on 1/1/2024
50% on
1/10/2023; 50%
on 1/10/2024
50% on
30/10/2023; 50%
on 30/10/2024
50% on 1/1/2024;
50% on 1/1/2025
Details of options issued, exercised and expired during the financial year are set out below:
Expiry Date
7 October 2019
24 November 2019
3 October 2021
22 July 2022
9 November 2023
30 June 2022
31 March 2024
26 September 2024
23 March 2025
28 May 2025
25 August 2025
24 September 2025
Tranches
1
2
3
4
5
5
7
8
9
10
11
12
Exercise
Price
$0.025
$0.02
$0.36
$0.0726
$0.032
$0.25
$0.21
$0.11
$0.090
$0.095
$0.084
$0.075
Movements
1 July 2020
Issued
-
-
5,000,000
3,000,000
4,000,000
14,241,379
3,000,000
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
500,000
5,000,000
7,000,000
Exercised
-
-
-
-
-
-
-
-
-
-
-
-
Expired
-
-
-
-
-
-
-
-
-
-
-
-
30 June
2021
-
-
5,000,000
3,000,000
4,000,000
14,241,379
3,000,000
3,000,000
1,000,000
500,000
5,000,000
7,000,000
32,241,379
13,500,000
-
-
45,741,379
The share options outstanding at the end of the year had a weighted average exercise price of $0.1647
and a weighted average remaining contractual life of 1.1 years (2020: 2.4 years)
Fair value of options granted
The assessed fair value at the date of grant of options issued is determined using a option pricing models
that takes into account the exercise price, the underlying share price at the time of issue, the term of the
option, the underlying share’s expected volatility, expected dividends and the risk free interest rate for
the expected life of the instrument.
58 | PAINCHEK LIMITED
48
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PAINCHEK LIMITED | 59
Expenses arising from share-based payment transactions
Performance shares and options issued
Vesting conditions Tranche 2 - Director options
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
PainChek Limited
2020
$
2021
$
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
709,720
8,907,808
90,198,155 options were granted to the Directors as approved by shareholders at the annual general
meeting on 23 November 2016. The options issued to directors vested over three tranches as follows:
1. One third after one year of service.
INDEPENDENT AUDITOR'S REPORT
2. One third after the Company makes an announcement that Regulatory Approval to enable
To the members of PainChek Limited
commercial use of the PainChek App in Australia, the United States or Europe is received, or
the Company has announced the execution of a binding licence agreement to licence the
PainChek App to:
Report on the Audit of the Financial Report
a. one or more residential aged care facilities facility owners managing in total in excess of
Opinion
150 beds; or
b. one or more medical clinics which service in total in excess of 2,000 patients per year; or
We have audited the financial report of PainChek Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
c. a metropolitan hospital with in excess of 200 beds;
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’
d. or a global distribution partner with multiple End Users as existing customers.
declaration.
(each an “End User”);
3. One third upon the Company generating cumulative revenue of $1,000,000. Shareholders
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
approved the variation of this vesting condition at the AGM held on 20 November 2019.
Act 2001, including:
(i)
(ii)
Basis for opinion
Director options – change of tranche 3 vesting conditions from Tranch 2 above
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
Tranches one and two had vested in prior periods. At the AGM on 20 November 2019, shareholders
approved the variation of the vesting conditions for 30,066,052 tranche 3 options. The Company
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
has expensed the incremental fair value of the options at the time of the modification. The
incremental fair value is the difference between the fair value of the modified equity instrument
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
and the fair value of the of the original instrument, both estimated as at the date of the
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
modification and being $0.27 per option, resulting in a non-cash expense of $8,117,834 recognised
Report section of our report. We are independent of the Group in accordance with the Corporations
during the period. The fair value was determined by reference to the share price as at the date of
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
modification given the value of the option immediately pre modification was Nil.
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
50
60 | PAINCHEK LIMITED
50
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.
Going concern basis of preparation of financial statements
Key audit matter
How the matter was addressed in our audit
The Group’s disclosures around the basis of
preparation and going concern assumption are
included in Note 1 which details results of the
group during the year and mitigating factors. As
detailed in Note 1 the financial statements have
been prepared by the Group on a going concern
basis.
Given the results of the Group and mitigating
factors going concern was considered a key audit
matter due to there being significant judgement
involved in assessing the Group’s forecast
cashflows (for a period of at least 12 months from
the audit report date) and this matter requiring
significant auditor effort.
Our procedures included, amongst others:
Obtaining and evaluating management’s
assessment of the Group’s ability to
continue as a going concern for at least
12 months from the date of our auditor’s
report.
Evaluating management’s cash-flow
forecasts and challenging management’s
assumption applied around future sales,
operating costs and resulting cash flows.
Assessing management’s assumptions in
the cash flow forecasts to assess
whether current cash levels along with
expected cash inflows and expenditure
can sustain the operations of the Group
for a period of at least 12 months from
the date of audit report.
Assessing the appropriateness of the
Group’s going concern basis of
preparation disclosures in the financial
statements for consistency with
Australian Accounting Standards.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
51
PAINCHEK LIMITED | 61
Revenue Recognition and other income
Key audit matter
How the matter was addressed in our audit
Recognition of Revenue and Other Income was
identified as a key audit matter due to the
significance to the financial report and the
complex nature of the agreements entered into
by the Group.
The assessment of revenue recognition and
income required significant auditor effort and
judgement.
We have performed the following procedures to
address this risk in the financial report:
Reviewing the terms and conditions of
the agreements entered into in the
current and prior year to determine the
relevant accounting standard to be
applied to the various revenue and
income streams.
Assessing the accounting policy adopted
for recognition of revenue and other
income and assessing compliance with
AASB 15 Revenue from Contracts with
Customers (‘AASB 15’) or AASB 120
Accounting for Government Grants and
Disclosure of Government Assistance
(‘AASB 120’).
Verified government grant income to
bank statements and ensured income is
recognised in the correct period and in
compliance with AASB 120.
For a sample of transactions, vouching
to supporting documentation such as
invoices and receipts and assessing
compliance against the accounting
policy adopted including the recognition
of any contract liability or deferred
income.
Assessed the adequacy of the disclosures
in the financial statements.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the Directors report for the year ended 30 June 2021, but does not include
the financial report and our auditor’s report thereon, which we obtained prior to the date of this
auditor’s report, and the Annual report, which is expected to be made available to us after that date.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
52
62 | PAINCHEK LIMITED
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
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the Annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom
our report is prepared.
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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
53
PAINCHEK LIMITED | 63
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 16 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of PainChek Limited, for the year ended 30 June 2021,
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 Pty Ltd
T R Mann
Director
Brisbane, 31 August 2021
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
54
64 | PAINCHEK LIMITED
Additional Shareholder Information
The following additional information is current as at 26 September 2021.
Corporate Governance:
The Company’s Corporate Governance Statement is available on the company’s website at www.painchek.com/corporate-governance
Holding
113,000,000
% IC
9.977%
Substantial shareholder:
Holder Name
PETERS INVESTMENTS PTY LTD
Ordinary Shares:
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Holders
86
505
873
2,484
1,027
4,975
Total Units
13,631
1,737,719
6,768,375
97,773,376
1,026,337,281
1,132,630,382
There are 76 shareholders with less than a marketable parcel.
Voting Rights
Each fully paid ordinary share carries voting rights of one vote per share.
The top 20 holders of ordinary shares are:
Name
PETERS INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J&E CONSULTING PTY LTD
MR MUSTAFA ABDUL WAHED ATEE
DR KRESHNIK HOTI
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
MR PHILIP DAFFAS
THORNBURY NOMINEES PTY LTD
G & G CHILCOTT PTY LTD
MR ROBERT ANTHONY HEALY
NANJOP PTY LTD
MR ALLAN GRAHAM JENZEN & MRS ELIZABETH JENZEN
CITICORP NOMINEES PTY LIMITED
CAPPER SUPERANNUATION PTY LTD
XTREME NOMINEES PTY LTD
MR ROBERT ANTHONY HEALY
MS ELOISE KATHLEEN JENNINGS & MR ANDREW JOHN HOPKINS
MS ELOISE KATHLEEN JENNINGS & MR ANDREW JOHN HOPKINS
BRADAN INVESTMENTS PTY LIMITED
MR CRAIG ROBERT WILLIAMSON
Total Securities of Top 20 Holdings
Total of Securities
%
0
0.15
0.6
8.63
90.62
100
Balance as at
26-09-2021
113,000,000
41,338,803
37,003,125
37,003,125
37,003,125
26,033,862
20,499,581
15,050,000
13,927,169
12,857,143
12,299,748
12,277,974
11,890,945
11,674,331
11,654,791
11,000,000
10,599,791
10,486,709
10,000,000
9,433,000
%
9.977%
3.650%
3.267%
3.267%
3.267%
2.299%
1.810%
1.329%
1.230%
1.135%
1.086%
1.084%
1.050%
1.031%
1.029%
0.971%
0.936%
0.926%
0.883%
0.833%
465,033,222
41.058%
1,132,630,382
PAINCHEK LIMITED | 65
Unquoted equity securities
Number
Number of Holders
Class
8,541,782
3,000,000
4,000,000
14,241,379
3,000,000
3,000,000
1,000,000
500,000
5,000,000
7,000,000
Use of Funds
1
1
3
12
1
1
1
1
3
2
Holders of more than 20%
Phillip Daffas (6,957,624)
PCKAA Performance Rights
Options exercisable at $0.0726 expiring of 22 July 2022
Issued pursuant to ESOP
Share options with an exercise price of $0.032 and an expiry
date of 23rd November 2023.
Issued pursuant to ESOP
Share options with an exercise price of $0.25 and an expiry
date of 30 June 2022
Peters Investments Pty Ltd
(6,896,551)
Share options with an exercise price of $0.21 and an expiry
date of 31 March 2024
Share options with an exercise price of $0.11 and an expiry
date of 26 September 2024
Share options with an exercise price of $0.09 and an expiry
date of 23 March 2025
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Share options with an exercise price of $0.095 and an expiry
date of 28 May 2025
Issued pursuant to ESOP
Share options with an exercise price of $0.084 and an expiry
date of 25 August 2025
Issued pursuant to ESOP
Share options with an exercise price of $0.075 and an expiry
date of 24 September 2025
Issued pursuant to ESOP
The entity has used the cash and assets in a form readily convertible into cash at the time of listing in a way that is consistent with its business
objectives.
There is no current share buy-back
66 | PAINCHEK LIMITED
Corporate directory
Board of Directors
Mr John Murray
Non-Executive Chairman
Mr Philip Daffas
Managing Director
Mr Adam Davey
Non-Executive Director
Mr Ross Harricks
Non-Executive Director
Principal Place of Business
Suite 401, 35 Lime Street
Sydney NSW 2000
Company Secretary
Ms Sally McDow
Registered Office
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Website
Website: www.painchek.com
Auditor
BDO Audit Pty Ltd
Share Registry
Boardroom Pty Ltd
Grosvenor Place
Level 12, 225 George Street
Sydney, NSW 2000
Tel:
Fax:
+61 2 9290 9600
+61 2 9290 9655
Stock Exchange
Australian Securities Exchange
20 Bridge Street
Sydney, NSW 2000
ASX Code
PCK
PAINCHEK LIMITED | 67
PainChek Limited (ASX: PCK)
ABN 21 146 035 1272
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Registered Office:
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
info@painchek.com
PAINCHEK LIMITED | 68