Pro Medicus Annual Report 2017

FY2017 Annual Report · Pro Medicus
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Annual Report 2017

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450 Swan Street Richmond Victoria 3121 Australia

promedicus.com.au • promedicus.com • visageimaging.com

 
 
 
 
 
 
HIGHLIGHTS

FINANCIAL 
SUMMARY
  NPAT $9.32 million for continuing 
operations up from $6.37 million 

  Underlying after-tax proﬁ t up 53%

  Revenue of $31.62 million 

– increase of 15%

  Margins increase to 45% – up 29%

  Cash reserves of $22.78 million

  Strong balance sheet – debt free

  Dividends of 4.0c per share with 

ﬁ nal fully franked

BUSINESS 
HIGHLIGHTS
  Increased transaction revenue 

from US contracts

  Implementations on or ahead 

of schedule

  Future contracted revenue of 
$110 million over next 5 years

  Rapidly expanding foot print 
in North American market

  Visage 7 Open Archive released

visit us at: 

www.promedicus.com.au
  Australian business expands with 
Primary Healthcare contract win
www.promedicus.com
www.visageimaging.com

PRO MEDICUS ANNUAL REPORT 2017

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contents

  1.  Highlights 2016/2017 

  11.  The Year in Review 

 65.  Independent Audit Report 

  3.  CEO and Chairman’s Letter 

  13.  Into the Future 

 72.  ASX Additional Information

  5.  Financial Summary 

  15.  Financial Report

 73.  Corporate Governance 

  7.  Business Background

  16.  Director’s Report 

  81.  Corporate Information

  9.  Global Leadership Team

 64.  Director’s Declaration

 
 
 
 
 
 
 
 
Dr Sam Hupert

Peter Kempen

Dear Shareholders,

This has been a record year for the company. We 
continued to expand our footprint in the North 
American market and made signiﬁ cant inroads in 
Australia with the announcement of the Healthcare 
Imaging Services (Primary Healthcare) contract in 
March. Our ongoing investments in Research and 
Development for both our Visage 7 and Visage RIS 
products continue to be rewarded. 

We were pleased to report a net proﬁ t after tax of 
$9.32 million from our continuing operations in 2017, 
a signiﬁ cant improvement on the previous years 
reported proﬁ t of $6.37 million. Underlying proﬁ t 
(excluding currency ﬂ uctuations) increased by 53%. 

Revenue rose to $31.62 million in 2017, an increase 
of 15 percent, with the growth coming from both 
our North American and Australian businesses. EBIT 
margins continued to increase, a trend the company 
sees continuing in FY18.

The past year has also seen the company 
successfully complete a record number of large-
scale implementations in North America. Pleasingly, 
we were able to complete these implementations 
on, or ahead of, schedule and in a number of cases 
in a fraction of the planned project time. This has 
resulted in our clients realising signiﬁ cant beneﬁ ts 
in key areas such as IT infrastructure consolidation, 
radiologist productivity, increased clinical accuracy 
and scalability allowing them to expand their 
operations. This not only reinforces our belief 
that Visage 7 is truly world leading technology 
but also that is able to deliver unparalleled value 
to our clients. 

The trend towards purchasing our technology on 
a transaction or “pay per view” basis continues, 
with the vast majority of North American revenue 
now coming from this model. The model, based 
on committed minimum transaction numbers over 
a contract period, which ranges from 5 to 7 years, 
has helped build a high quality annuity stream that 
continues to grow as existing customers increase 
their “views” and new customers are bought on 
to the system. Forward contracted revenue now 
exceeds $110M AUD over the next ﬁ ve years.

The trends we have previously identiﬁ ed as driving 
the industry are continuing unabated. Exponentially 
growing image sizes and the requirement to access 
the electronic medical record (EMR), of which the 
medical images are a signiﬁ cant part, are fueling 

industry adoption of new systems. Visage 7 with its 
fast, highly modular and scalable technology and 
the recently released Visage 7 Open Archive are 
uniquely suited to dealing with these challenges.

In Australia, a parallel trend is appearing where 
larger Radiology companies are searching for 
a Radiology Information System (RIS) that is 
capable of dealing with both their scale and their 
sophisticated requirements. In March of this year 
the company signed a landmark deal that will see 
Visage RIS (Practice Management) implemented 
throughout Healthcare Imaging Services (Primary 
Healthcare) 141 clinics. This deal has repositioned the 
company as the undisputed leader in RIS in Australia 
and will help form the base for future sales of this 
product locally.

During the past year we continued to invest in 
our personnel successfully recruiting key people 
to supplement our growing US team. The global 
management structure that we introduced in 2015 
is proving to be highly successful in providing the 
base for future growth.

Pro Medicus continued to generate positive cash 
ﬂ ow from operations in 2017, and ﬁ nished the year 
with cash in hand of $22.78 million. This was up from 
$17.11 million a year earlier, and is after the payment 
of dividends during the year of $3.08 million. The 
company remains debt free and we believe we have 
suffi  cient reserves to internally fund the organic 
growth of the business. 

Accordingly, your board was pleased to declare 
dividends for the year of 4.0 cents per share, an 
increase of 33%, with the ﬁ nal dividend of 2.5 cents 
being fully franked. We believe our strong balance 
sheet positions us well to grow the business in the 
years ahead as well as support our dividend policy. 

Finally, we would like to thank our fellow directors 
and the capable and hard-working teams at Pro 
Medicus and Visage Imaging, all of whom have 
made valued contributions to our progress in 2017 
positioning us strongly for the future. 

Yours faithfully

Peter Kempen
CHAIRMAN

Sam Hupert
CHIEF EXECUTIVE OFFICER

PRO MEDICUS ANNUAL REPORT 2017

3

CEO & CHAIRMAN

letter

2

YEAR 
ENDED 
30 JUNE 2017

ALL FIGURES IN $A 
THOUSANDS UNLESS 
OTHERWISE STATED

2017
$’000

31,597
+14.8%

31,619
+14.7%

13,390
+41.8%

9,321
+46.4%

2016 
$’000

27,521
+56.9%

27,557
+56.9%

9,441
+87.9%

6,368
+97.9%

47,206

39,404

Revenues from Continuing Operations

Total Revenues 

Operating Proﬁ t Before Interest and Income Tax

Net Proﬁ t After Tax

Total Assets 30 June

Shareholders’ Funds 30 June

34,834

27,385

Net Tangible Assets per Share at 30 June (cents)

Earnings per Share (cents)

23.0

9.1
+44.4%

17.0

6.3
+97.9%

FINANCIAL

summary

PRO MEDICUS ANNUAL REPORT 2017

5

Pro Medicus Limited [ASX: 
PME] is a leading health 
imaging IT provider. Founded in 
1983, the company provides a 
comprehensive range of health 
imaging software and services 
to hospitals, imaging centres and 
health care groups worldwide. 
These solutions are branded 
“Visage” and provide one of the 
most comprehensive, enterprise 
level, end-to-end off erings 
available in the radiology 
market today.

 VISAGE PRODUCTS
The Visage product line 
comprises solutions for RIS 
(Radiology Information 
Systems) /Practice Management, 
Healthcare Imaging and e-health. 
These systems can be used either 
individually or in combination by 
radiologists and other medical 
imaging professionals to interpret 
the images created by medical 
imaging equipment such as 
X-Ray and Ultrasound machines 
and CT and MRI Scanners and 
communicate the results to their 
referring clinicians.

RIS AND PRACTISE 
MANAGEMENT
Pro Medicus off ers software 
applications and services 
designed to aid the management 
of medical practices. The 
software includes medical 
accounting, clinical reporting, 
appointments/scheduling 
and marketing/management 
information modules and can 
be integrated with third-party 
applications. The Visage RIS 
provides radiology practices 
with a highly scalable, enterprise 
level practice management 
solution that incorporates 
powerful search capability and 
conﬁ gurable workﬂ ow and rules 
engines to meet a broad range 
of customer’s needs. Services 
include project management, 
implementation, training and 
ongoing technical and end 
user support.

HEALTHCARE IMAGING
In January 2009, the company 
purchased Visage Imaging, 
which has been transformed 
into a global provider of 

leading edge Enterprise 
imaging and 3D PACS (Picture 
Archiving and Communication 
System) solutions. The 
company’s Visage 7 product 
line incorporates leading 
edge proprietary advanced 
visualization capability that 
is able to deliver extremely 
fast, multi-dimensional images 
streamed via the Visage 7 
intelligent thin-client viewer. 
Visage 7 components can either 
be combined and sold as an 
entire solution or individual 
components can be sold in 
a modular fashion as part of 
a “deconstructed” or best in 
breed off ering.

THE VISAGE 7 
ENTERPRISE VIEWER
The Visage 7 Enterprise Viewer 
combines 3D/4D and advanced 
visualisation capabilities with 
the full gamut of 2D reading 
functionality creating a truly 
unique thin client streaming 
universal viewing platform that 
enables radiologists to read any 
type of examination from a 2D 
chest x-ray to a complicated 3D 
cardiac study all within the one 
viewer. The Enterprise viewer 
can be interfaced with a broad 
range of third-party vendor 
neutral image archiving (VNA) 
databases and worklist products 
as part of a Deconstructed 
PACS® solution. 

VISAGE 3D PACS 
As a result of the extensive 
R&D undertaken post the 
Visage Imaging acquisition, 
the Company has its own 
comprehensive 2D-3D/PACS 
off ering which combines the 
Visage 7 Enterprise Viewer with 
the ability to store and archive 
radiological images using the 
Visage 7 Open Archive, creating 
one of the world’s ﬁ rst 3D PACS. 

The scalability and highly 
modular nature of the Visage 7 
product off ering means that our 
technology is ideally suited to 
the vast majority of radiology 
environments including large 
enterprise hospitals, private 
imaging centres and remote 
reading/tele-radiology groups 
enabling us to address segments 

of the radiology market 
previously not available or only 
partially accessible to us.

VISAGE EASE PRO 
Visage Ease Pro provides 
mobile app technology for 
diagnostic interpretation of 
medical images using iOS 
based mobile devices. It is U.S. 
Food and Drug Administration 
(FDA) 510 (k) certiﬁ ed for 
all imaging modalities apart 
from mammography which 
requires higher screen resolution 
than current iOS devices can 
support. This enables clinicians 
to interpret images no matter 
how large anywhere using 
Visage technology. Visage Ease 
Pro includes numerous image 
manipulation features, display of 
non-DICOM (and non-diagnostic) 
images such as photos, support 
for recording voice memos, 
and the ability to upload photo 
attachments to studies on 
Visage 7.

E-HEALTH
The Company’s Internet-based 
e-health off ering, promedicus.
net, enables referring doctors to 
receive encrypted clinical reports 
via the Internet to a centralised 
“in-tray” run on the doctor’s 
computer. These reports are then 
electronically incorporated into 
the patients’ medical records, 
doing away with the need for 
double handling or manual 
ﬁ ling. Over 26,000 Australian 
doctors are registered users 
of promedicus.net.

VISAGE 7 OPEN ARCHIVE
The Company introduced Visage 
7 Open Archive to the North 
American market during the year 
with the off ering built on the 
same ultrafast, highly scalable 
enterprise imaging platform 
used in Visage 7. Coupled with 
a modular design based on 
open standards, Visage 7 Open 
Archive ensures maximum 
interoperability even in the most 
complex environments. The 
introduction of Visage 7 Open 
Archive enables the Company to 
off er the choice of deconstructed 
or single vendor solutions.

PRO MEDICUS ANNUAL REPORT 2017

7

BUSINESS

background

VISAGE IMAGING INC - SAN DIEGO

VISAGE GMBH - BERLIN

KEY PERSONNEL

In 2015 the company transitioned from 
a Regional to a Global management 
structure appointing four regional 
managers to global roles in the areas of 
Technology/R&D, Sales, Marketing, and 
Customer Services. The 2017 ﬁ nancial 
year has been the most successful in the 
company’s history conﬁ rming the board’s 
belief that this new structure positions 
the group to cater for anticipated 
future growth.

MALTE WESTERHOFF
General Manager –
Europe and Global Chief 
Technology Offi  cer

Malte Westerhoff  is the General Manager 
for Visage Imaging GmbH, the European 
branch of Visage Imaging. He is also 
the company Chief Technical Offi  cer 
(CTO) and is responsible for product 
management and R&D globally. He has 
more than twelve years of experience 
in medical imaging and software 
development, holding positions in both 
research and industry. Malte holds a 
master’s degree in physics from Technical 
University, Berlin, and a PhD in computer 
science and mathematics from Free 
University, Berlin. 

Malte was one of the founders of Indeed 
– Visual Concepts GmbH the precursor 
to Visage Imaging and is an author/co-
author of a number of papers in scientiﬁ c 
visualization and high-performance 
computing. In role as CTO, he is involved 
in developing and overseeing the 
company’s growing intellectual property 
patent portfolio. Prior to joining Pro 
Medicus, he served in senior technical 
leadership positions at Mercury Computer 
Systems and Indeed – Visual Concepts.

MELBOURNE

SEAN LAMBRIGHT
Global Head of Sales

Sean Lambright is the Global Head of 
Sales for Visage Imaging as well as VP 
Sales, North America. He is responsible 
for the company’s global sales strategy, 
including all third-party and channel 
relationships. Sean joined Visage in 2010 
and has been instrumental in positioning 
Visage as a complete enterprise imaging 
solution capable of dealing with some of 
the largest and most prestigious health 
systems in North America. Prior to Visage, 
his career in imaging IT has spanned 
15 years, having served in senior sales 
roles with AGFA Healthcare, AMICAS 
and Emageon.

Sean holds a Bachelor of Science degree 
from Arizona State University.

BRAD LEVIN
General Manager –
North America and Global 
Head of Marketing 

Brad Levin’s broad experience has 
spanned a variety of leadership roles, 
including government, consulting, 
and marketing. While in government, 
Brad worked as a PACS subject matter 
expert for the U.S. Department of 
Defence’s Digital Imaging Network–
Picture Archiving and Communications 
System (DIN-PACS) initiative, as well as 
consulting for top healthcare institutions 
across the U.S.

After leaving his consulting role, Brad 
went on to spearhead marketing for two 
web-based PACS start-ups, ﬁ rst AMICAS, 
and then Dynamic Imaging. Both ﬁ rms 
experienced rapid commercial growth 
leading to acquisition, by Vitalworks and 
GE Healthcare, respectively. In his most 
recent role, Brad was GE Healthcare’s 
commercial Marketing Director, where he 
had radiology and cardiology marketing 
responsibility for their RIS, PACS and CVIT 
product portfolios.

DANNY TAUBER
General Manager –
Australia

After graduating in 1986 Danny Tauber 
started his career with chartered 
accountants Warnocks gaining 
experience in taxation and general 
accounting. He then started his own 
property development company and 
spent a number of years gaining project 
management and general ﬁ nance 
skills. An interest in IT led Danny 
into the computer industry where he 
worked for a company producing hotel 
management systems. Danny joined Pro 
Medicus in 1993 and has been with the 
company for over 23 years. Danny has 
progressed through the company to his 
current position of General Manager – 
Australia which he assumed on the 1st 
of January 2011.

TERESA GSCHWIND
Global Head of Customer Service

Teresa Gschwind is the Global Head of 
Customer Service for Visage Imaging, where 
she is responsible for pre and post-sales 
customer service activities worldwide. Prior 
to this role, Teresa managed the Company’s 
U.S. Customer Service team based in MA, and 
then the European Customer Service team 
based in Berlin, Germany. Teresa has extensive 
experience working with Visage’s global 
customer base, having joined the Company 
in 2002 when Visage was part of Mercury 
Computer Systems. Prior to Visage, Teresa held 
numerous management positions at Datacube, 
Inc, where she specialized in image processing.

Teresa holds a Bachelor of Science degree 
in Electrical Engineering from the University 
of New Hampshire.

PRO MEDICUS ANNUAL REPORT 2017

9

GLOBAL  LEADERSHIP

team

AUSTRALIA
The company’s Australian operation undertakes research and 
development of the Visage RIS and e-health products as well 
as sales and service/support functions of both Visage RIS and 
Visage 7 products.

Australian revenue increased by 28.6% as a result of new sales of 
both the Visage PACS and Visage RIS products with many sales 
being for the combined product off ering.

The company continued to transition its Australian customers to 
the new Visage RIS platform. The sale of Visage RIS to Healthcare 
Imaging Services (Primary Healthcare) during the year helped solidify 
the company’s leading position in the Australian RIS market.

Promedicus.net, the company’s e-health off ering, continued to hold 
its strong market position despite increasing competition. 

NORTH AMERICA
The company’s North American team which comprises sales, 
marketing, implementation and service/support staff  was a strong 
contributor to the group’s overall performance with revenue growing 
by 27.6% compared to the previous year. This was attributable to 
a signiﬁ cant growth in transaction based revenue as a number 
of previously won contracts came on stream. 

The year also saw the company’s biggest implementation 
undertaking, with previously announced deals in North America 
being installed during the period. The fast track implementation 
methodology used by the company provides customers with 
substantial savings in both IT and infrastructure whilst also delivering 
a strategic advantage to the company due to the speed of the 
implementations compared to industry norms. 

EUROPE
The Group’s employees in its Berlin offi  ce undertake research and 
development of Visage Imaging products worldwide as well as sales, 
marketing and service/support functions for the Group’s European 
operations. Revenue from our European operations decreased by 
58.2% from last year, in line with expectations, due to a large capital 
sale to a German government hospital in the prior year not being 
repeated in the current year. 

COMPANY OFFICES
IN ADDITION TO ITS MELBOURNE-BASED AUSTRALIAN HEAD 
OFFICE, THE COMPANY HAS TWO OFFSHORE OFFICES:

VISAGE GMBH – BERLIN
This is the company’s European headquarters and houses employees 
who are primarily involved in product R&D and ongoing product 
support. This offi  ce also forms the base of the company’s European 
operations including order administration and both direct and OEM 
sales activities.

VISAGE IMAGING INC – SAN DIEGO 
This is the company’s North American headquarters and is the 
base for staff  involved in sales, marketing, training/implementation 
and applications support for both the Visage Imaging and 
Pro Medicus products.

THE YEAR

in review

PRO MEDICUS ANNUAL REPORT 2017

11

EXPANDED PRODUCT 
PORTFOLIO

GROUND BREAKING
VISAGE 7 TECHNOLOGY

ADDRESSING ENTERPRISE /
HOSPITAL MARKETS

CONTINUED
US EXPANSION

NEW RIS TECHNOLOGY
PLATFORM

PAY PER USE
LICENSING MODEL

ENTERPRISE IMAGING

INTO THE

future

The Board and Management believe the Company 
is extremely well positioned for growth after making 
strong progress in the 2017 ﬁ nancial year. Key 
factors predicted to drive growth include:

EXPANDED GEOGRAPHICAL 
FOOTPRINT
Over the past year the company continued to build 
on its presence in North America and Australia as 
well as consolidate its position in Europe. 

Our growing North American customer base 
comprises some of the largest and most prestigious 
health systems in the U.S., including the #1 ranked 
hospital in the U.S. for 2017/2018 (U.S. News & 
World Report Honour Roll). 

The company believes it can leverage its expanded 
footprint and increased market presence to drive 
further sales opportunities across all segments 
of the market including large Enterprise hospitals, 
private imaging centres and remote reading 
tele-radiology.

HIGHLY DIFFERENTIATED TECHNOLOGY
The Company continues to maintain its signiﬁ cant 
ongoing investment in R&D for its ﬂ agship Visage 
7 suite of products, which includes the Visage 
7 Viewer and Visage 7 Open Archive, which we 
believe will continue to diff erentiate our off erings 
in the Deconstructed PACS®, Enterprise viewer, 
3D PACS and advanced visualisation space.

The Visage RIS platform is the culmination of 
many years of intense R&D eff ort and positions 
Pro Medicus at the forefront of RIS/Practice 
Management technology. It is diff erentiated by its 
scalability, powerful search capability and ability 
to allow clients to conﬁ gure their own business-
speciﬁ c workﬂ ow and rules to meet their needs.

INDUSTRY TRENDS
The Company believes the North American market 
has reached a tipping point as a result of a number 
of signiﬁ cant industry trends that combined, will 
continue to drive demand for Visage 7 products. 

Adoption of Electronic Medical Records (EMR)
The US Government as part of its Meaningful Use 
program has mandated US health institutions to 
implement an enterprise wide Electronic Medical 
Record (EMR). 

Under this new model, all patient clinical data 
including images is entered into, and is accessed via, 
the EMR. This has resulted in a heightened focus on 
enterprise imaging as medical images both DICOM 
(radiology and cardiology) as well as non DICOM 
(photos and videos) now comprise a large and 
rapidly growing part of the medical record. 

Visage 7, with its ability to display all of these image 
types within the one product is well positioned to 
beneﬁ t from this rapidly evolving trend.

Explosion in image data size continues
With developments in imaging technology it is 
now not uncommon for a single examination 

image ﬁ le to be in the order of 1.5 to 2 Gigabytes 
or larger in size. The introduction of Digital Breast 
Tomosynthesis (DBT), a new form of 3D breast 
imaging, has added to the data explosion problem 
producing image ﬁ les as large as 6 Gigabytes per 
examination. Traditional PACS/Digital Imaging 
technology requires these ﬁ les to be transferred 
across the network to the radiologist desktop 
in order to be visualised. This has created very 
signiﬁ cant network bottlenecks which has limited 
the widespread adoption and use of these new 
imaging technologies. 

Visage 7, with its unique server side thin-client 
streaming technology, enables the radiologist 
or referring clinician to instantly visualize these 
very large datasets without having to move the 
images to their desktop thereby overcoming the 
bandwidth/ network bottleneck issue. 

The move to best in breed or Deconstructed 
PACS® Solutions
Increasingly sales opportunities are requesting 
a modular or “best in breed” approach whereby 
multiple components from diff erent vendors are 
integrated into a single solution. Unlike systems 
from traditional PACS vendors, Visage 7, with 
its highly modular and scalable design is ideally 
suited to this new paradigm resulting in a growing 
pipeline of opportunities that the company 
is actively pursuing.

TRANSACTION BASED LICENCING 
The vast majority of the company’s contracts are 
now transaction or “pay per view” based. This 
not only enables customers to more accurately 
align their investment in Visage to the size 
of the business, it has the added beneﬁ t of 
creating signiﬁ cant ongoing revenue streams 
for the company.

ENTERPRISE IMAGING
The company has made signiﬁ cant investments 
in ongoing R&D in order to develop products 
including Visage 7 Enterprise. This new product 
extends the capability of Visage 7 beyond the 
realm of radiology enabling the viewing of DICOM 
(radiology) and non-DICOM images such as 
photos and HD videos (also described as medical 
multimedia objects) all in the one viewer.

Examples of this include wound care photos taken 
at the bedside, ophthalmology images, dermatology 
images, as well as video (endoscopic, arthroscopic, 
operating room HD-video).

NEW PRODUCTS AND SERVICES
As our customer base continues to grow so 
does the opportunity for on-selling additional, 
complementary products and services. An 
increasing proportion of the company’s R&D eff ort 
is focused on developing such as complementary 
services and products which we believe will 
further increase our value proposition for our large 
enterprise clients.

PRO MEDICUS ANNUAL REPORT 2017

13

ANNUAL
FINANCIAL REPORT
30 JUNE 2017

Directors’ Report

Auditor’s Independence Declaration

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

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1 Corporate Information

2 Summary of Signiﬁ cant Accounting Policies

3 Signiﬁ cant Accounting Judgements, Estimates and Assumptions

4 Operating Segments

5 Income and Expenses

6 Income Tax

7 Earnings per Share

8 Dividends Paid and Proposed

9 Cash and Cash Equivalents

10 Trade and Other Receivables (Current)

11

Inventory

12 Plant and Equipment

13 Intangible Assets

14 Trade and Other Payables

15 Provisions

16 Contributed Equity and Reserves

17 Share based Payments

18 Commitments

19 Events after the Balance Sheet Date

20 Auditors’ Remuneration

21 Key Management Personnel

22 Related Party Disclosure

23 Financial Risk Management Objectives and Policies

24 Contingencies

25 Parent Entity Information

26 Other Accounting Policies

Directors’ Declaration

Independent Auditor’s Report

ASX Additional Information

Corporate Governance Statement

Corporate Information

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PRO MEDICUS ANNUAL REPORT 2017

15

FINANCIAL

report

DIRECTORS’

report

Your Directors submit their report for the year ended 30 June 2017 
in relation to Pro Medicus Limited (the “Company”) and its 
subsidiaries (the “Group”).

The names and details of the Company’s Directors in offi  ce during 
the ﬁ nancial year and until the date of this report are as follows:

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

As at the date of this report, the interests of the Directors in the shares and options of the Company were:

Ordinary Shares

Options over 
Ordinary Shares

PETER TERENCE KEMPEN
F.C.A, F.A.I.C.D
(Chairman)
Peter Kempen joined Pro Medicus Limited 
as a Director on 12 March 2008. He is 
Chairman of Australasian Leukaemia and 
Lymphoma Group. He is also a Director 
of the Yara Pilbara group of companies, 
a Trustee of the Barr Family Foundation 
and a member of the Council of St Hilda’s 
College, University of Melbourne.

Peter has previously been Chairman 
of Patties Food Limited, Chairman of 
Danks Holdings Limited, Chairman of 
Ivanhoe Grammar School and Managing 
Partner of Ernst & Young Corporate 
Finance Australia.

Peter is a Fellow of the Institute of 
Chartered Accountants in Australia and 
a Fellow of the Australian Institute of 
Company Directors.

Peter became Chairman in August 
2010 before which he served as a Non-
Executive Director of the Company.

Peter is also Chairman of the audit 
committee.

DR SAM AARON HUPERT
M.B.B.S. 
Managing Director and Chief 
Executive Offi  cer
Co-founder of Pro Medicus Limited 
in 1983, Sam Hupert is a Monash 
University Medical School graduate who 
commenced General Practice in 1980. 
Realising the signiﬁ cant potential for 
computers in medicine he left general 
practice in late 1984 to devote himself full 
time to managing the Group.

Sam served as CEO from the time he 
co-founded the company until October 
2007 at which time he stepped down 
to become an executive director. Sam 
resumed full time CEO activities in 
October of 2010.

ANTHONY JAMES 
GLENNING
B.CS, B.EE, M.EE
Non-Executive Director
Anthony joined Pro Medicus Limited as a 
Director on 1 May 2016. He is Investment 
Director of Starﬁ sh Ventures and sits on 
the board of a number of private Starﬁ sh 
portfolio companies. 

Anthony is the founder and previously 
the CEO of Tonic Systems and a founding 
Non-Executive Director of Cameron 
Systems.

Anthony holds bachelor degrees in 
Computer Science and Electrical 
Engineering from University of Melbourne 
and holds a Master’s degree in Electrical 
Engineering from Stanford University 
California.

Anthony also serves on the audit 
committee.

RODERICK LEWIS 
JOHN LYLE
LL.B., B.Com, LL.M (Lond), MBA (Melb) 
Non-Executive Director
Roderick joined Pro Medicus Limited 
as a Director on 23 November 2010. He 
is the Senior Corporate Advisor in the 
Melbourne offi  ce of Clayton Utz and is a 
former Managing Partner of that offi  ce.

Roderick is a member of the Law Institute 
of Victoria, a member of the Law Society 
of New South Wales and a member of the 
Law Society London.

Roderick is recognised as one of 
Australia’s leading commercial lawyers. 
He has been a key advisor in a large 
number of signiﬁ cant mergers and 
acquisitions and equity capital markets 
transactions throughout Australia, and 
internationally, for more than three 
decades.

Roderick is also a Guest Lecturer 
(Mergers & Acquisitions) Melbourne 
Business School, MBA and EMBA courses.

Roderick also serves on the audit 
committee.

ANTHONY BARRY HALL
B.Sc. (Hons), M.Sc.
Executive Director and 
Technology Director
Co-founder of Pro Medicus Limited in 
1983, Anthony Hall has been principal 
architect and developer of the core 
software systems. His current focus is 
the transition to and development of the 
Company’s next generation RIS systems.

Anthony hold a Bachelor and Master’s 
degree in Science from La Trobe 
University.

16

CLAYTON 
JAMES HATCH
CPA
Company Secetary
Clayton was appointed Company 
Secretary on 1 July 2009. 

Clayton has strong experience in ﬁ nancial 
and management accounting having 
worked in a Finance role for several 
years. Clayton joined Pro Medicus in 
June 2008 and has progressed through 
the Company to his current position of 
Chief Financial Offi  cer which he assumed 
on 1 July 2012.

A. B. Hall

S. A. Hupert

P. T. Kempen

R. Lyle

A. Glenning

EARNINGS PER SHARE

Basic earnings per share

Diluted earnings per share

DIVIDENDS

ORDINARY SHARES

Final dividends recommended:

  Normal dividend plan

Dividends paid in the year:

Interim for the year

Final dividend for 2016 shown as recommended in the 2016 report:

  Normal dividend plan

OPERATING AND FINANCIAL REVIEW

30,068,500

30,107,660

678,082

340,000

4,000

NIL

NIL

NIL

NIL

NIL

Cents

9.10

8.95

CENTS

$’000

2.5

1.5

1.5

2,567

1,540

1,535

CORPORATE STRUCTURE
Pro Medicus Limited is a 
company limited by shares that 
is incorporated and domiciled 
in Australia. 

Nature of operations and 
principal activities 
The principal activities of the 
Group during the year were the 
supply of healthcare imaging 
products and services to 
hospitals, diagnostic imaging 
groups and other health related 
entities in Australia, North 
America and Europe. These 
products and services include:

Radiology Information Systems 
(RIS)
 ▶ Innovative proprietary 

medical software for practice 
management (RIS);

 ▶ Training, installation and 
professional services;

 ▶ After sale support and 

service products; 

 ▶ Promedicus.net secure email; 

and

 ▶ Digital radiology integration 

products 

Visage 7.0
 ▶ Innovative medical imaging 

software that provides 
radiologist and clinicians with 
advanced visualisation capability 
for rapidly viewing 2-D, 3-D and 
4-D medical images; 

 ▶ PACS/Digital imaging 

software that is sold directly 
and to original equipment 
manufacturers (OEM);

 ▶ Training, installation and 
professional services;

 ▶ Service and support products; 

The Group undertakes 
research and development 
(R&D) in Australia for its 
Practice Management (RIS) 
and promedicus.net products 
including R&D for Visage RIS, 
its new technology platform.

The R&D for the Visage 
Imaging product set is carried 
out in Europe. The Group has 
continued development of 
both the RIS products and 
the Visage 7.0 product line 
throughout the period.

PRO MEDICUS ANNUAL REPORT 2017

17

 
DIRECTORS’ REPORT CONT.

REVIEW AND RESULTS OF 
OPERATIONS 
Investment Activities
Surplus funds which are held in several currencies 
are invested by the Group in a cash management 
account and term deposits to maximise the 
interest return. 

Performance Indicators
Management and the Board monitor overall 
performance, from the strategic plan through to the 
performance of the Group against operating plans 
and ﬁnancial budgets.

The Board, together with management, have 
identiﬁed key performance indicators (KPIs) that 
are used to monitor performance. Key management 
monitor these KPIs on a regular basis and 
Directors receive appropriately structured board 
reports for review prior to each monthly Board 
meeting allowing them to actively monitor the 
Group’s performance.

Dynamics of the Business
Australia
The Group’s Australian employees undertake 
research and development of Pro Medicus products 
(RIS) as well as sales and service/support functions.

The Group’s Australian revenue was 28.6% above 
last year as a result of new sales of both the Visage 
PACS and Visage RIS products with a number of 
sales being for the combined product offering. 

Promedicus.net, the company’s e-health offering, 
continued to hold its market position despite 
increasing competition. 

North America
The growing North American team fulﬁl sales, 
marketing and professional services roles. Revenue 
from North America increased by 27.6% compared 
to the previous year. This was attributable to new 
sales and an increase in transaction based revenue 
from sales of Visage technology as more contracts 
came on stream.

Europe
The Group’s employees in its Berlin office undertake 
research and development of Visage Imaging 
products worldwide as well as sales, marketing and 
service/support functions for the Group’s European 
operations. Revenue from our European operations 
decreased by 58.2% from last year, due to a large 
capital sale to a German government hospital in the 
prior year.

Financials
Reported proﬁt after tax for the period was $9.32m 
an increase of $2.95m (46.4%) from the previous 
year.

Full year revenue of the Group increased from 
$27.58m to $31.62m, an increase of 14.7%.

The key drivers of the proﬁt increase was the 
signiﬁcant increase in the performance of the North 
American and Australian operations.

As the Group’s costs are relatively ﬁxed, an increase 
in sales has a signiﬁcant impact on proﬁtability.

Investments for Future Performance
The Company will continue to direct resources into 
the development of new products and is committed 
to the continued development of its Visage RIS and 
Visage 7.0 product sets.

It is anticipated that this strategy of ongoing 
development will continue to position Pro Medicus 
as a market leader and enable the Group to further 
leverage its expanded product portfolio and 
geographical spread. 

The Group remains committed to providing 
staff with access to appropriate training and 
development programs, together with the 
resources to complete their duties.

The Directors express their gratitude for the efforts 
of the management team and all employees in 
achieving this year’s result.

REVIEW OF FINANCIAL CONDITION
Capital Structure
The Company has a sound capital structure with a 
strong ﬁnancial position, with no debt.

Treasury Policy
With the increase in overseas operations there is 
an increased currency risk as a consequence of 
contracts written in and cash being held in foreign 
currencies. Whilst this is offset to a degree by 
having operations in North America and Europe, 
this change in risk proﬁle has been noted by the 
Board and action is being taken to manage this risk.

The treasury function, co-ordinated within 
Pro Medicus Limited, is limited to maximising 
interest return on surplus funds and managing 
currency risk. The treasury function operates within 
policies set by the Board, which is responsible for 
ensuring that management’s actions are in line 
with Board policy. 

Cash from Operations
Net cash ﬂows from operating activities for the 
current period was a positive $14.83m, with receipts 
from customers totalling $31.87m compared with 
payments of $12.57m to suppliers and employees. 
During the year the Company paid out a total of 
$3.08m in dividends, the net result being total 
cash assets of $22.78m; an increase of 33.1% from 
last year.

Liquidity and Funding
The Group is cash ﬂow positive, has adequate cash 
reserves and has no overdraft facility. Sufficient 
funds are held to ﬁnance operations.

Risk Management
The Company takes a proactive approach to risk 
management. The Board is responsible for ensuring 
that risks, and also opportunities, are identiﬁed 
on a timely basis and that the Group’s objectives 
and activities are aligned with the risks and 
opportunities identiﬁed by the Board.

The Company believes that it is crucial for all Board 
members to participate in this process, as such the 
Board has not established separate committees 
for areas such as risk management, environmental 
issues, occupational health and safety or treasury.

The Board has a number of mechanisms in place to 
ensure that management’s objectives and activities 
are aligned with the risks identiﬁed by the Board. 
These include the following:

•  Board approval of strategic plans, which 

encompass the Company’s vision, mission 
and strategy statements, designed to meet 
stakeholder needs and manage business risk;

•  Implementation of Board approved operating 
plans and budgets and Board monitoring of 
progress against these budgets, including the 
establishment and monitoring of KPIs; 

•  Overseeing of appropriate backup procedures 

for important company data; and

•  Routine review by key executives of its 

established Quality Assurance program and 
corrective action recommendations stemming 
from it.

Corporate Governance
In recognising the need for the highest standards 
of corporate behaviour and accountability, the 
Directors of Pro Medicus Limited support and 
have adhered to the principles of good corporate 
governance. Please refer to the separate “Corporate 
Governance” section for more details of speciﬁc 
policies.

SIGNIFICANT CHANGES IN THE 
STATE OF AFFAIRS 
Shareholders’ equity increased by 27.2% from 
$27.39m to $34.83m. This movement was largely 
the result of proﬁt during the year, offset by 
dividends paid out during the year.

SIGNIFICANT EVENTS AFTER 
THE BALANCE DATE 
A Final Dividend of 2.5 cents per share has been 
declared post 1 July 2017. Please refer to Note 8 
of the ﬁnancial statements.

LIKELY DEVELOPMENTS 
AND EXPECTED RESULTS 
The Directors anticipate that the 2018 ﬁnancial 
year will see more opportunity crystallise for the 
company due to improved prospects in North 
America and the continued commercialisation 
and roll out of Visage RIS, the company’s new 
technology RIS platform.

Key components that are likely to affect the 
performance of the company are:

•  Increased revenue being generated from 

previously won transaction based contracts 
which are scheduled to come on stream in the 
2018 ﬁnancial year.

•  Continued strong interest in the Visage 7.0 suite 
of products in the North American market has 
resulted in a number of sales opportunities that 
the Company is actively pursuing.

•  The ability of the expanded Visage 7.0 product 
set to address key market segments such as 
large Health Systems and Hospitals in addition to 
the private radiology and teleradiology markets. 

•  Market dynamics that favour the adoption of 
Visage 7.0 technology such as trend towards 
modular, best in breed solutions.

•  Increased revenue from Visage RIS, the 

company’s new technology RIS platform as the 
rollout of this new platform continues.

As a result, it is anticipated that the 2018 ﬁnancial 
year will show a continuing improvement in 
operational results, however this is dependent upon 
many market factors over which the Directors have 
limited or no control. 

ENVIRONMENTAL REGULATION 
AND PERFORMANCE 
The Group has no identiﬁed risk with regard to 
environmental regulations currently in force. There 
have been no known breaches by the Group of any 
regulations.

SHARE OPTIONS 
Un-issued Shares
As at the date of this report, there were 25,000 un-
issued ordinary shares under options. Refer to Note 
17 of the ﬁnancial statements for further details of 
the options outstanding.

Option holders do not have any right, by virtue of 
the option, to participate in any share issue of the 
Company.

Shares Issued as a Result of the Exercise 
of Options
During the ﬁnancial year, 400,000 share options 
were exercised by current employees and no share 
options expired. A further 300,000 share options 
were exercised by Directors or key management 
personnel in the current year to acquire fully paid 
ordinary shares in Pro Medicus Limited.

18

PRO MEDICUS ANNUAL REPORT 2017

19

DIRECTORS’ REPORT CONT.

PERFORMANCE RIGHTS
Un-issued Shares
As at the date of this report, there were 1,475,590 
un-issued ordinary shares under performance 
rights. Refer to Note 17 of the ﬁnancial statements 
for further details of the performance rights 
outstanding.

Rights holders do not have any right, by virtue 
of the right, to participate in any share issue of 
the Company.

Shares Issued as a Result of the Exercise of 
Performance Rights
During the ﬁnancial year, 73,375 performance 
rights were exercised by current employee 
and no performance rights expired. A further 
153,000 performance rights were exercised 
by key management personnel in the current 
year to acquire fully paid ordinary shares in 
Pro Medicus Limited.

INDEMNIFICATION AND INSURANCE 
OF DIRECTORS AND OFFICERS 
During the year, Pro Medicus Limited indemniﬁed 
Clayton Utz and each one or more of the past, 
present or future partners of Clayton Utz (other 
than Mr. Lyle) against any liability (including a 
liability incurred by Clayton Utz to pay legal costs) 
arising out of Mr. Lyle’s activities as a Director of 
Pro Medicus Limited.

During or since the ﬁnancial year, the Company 
has paid premiums in respect of a contract for 
Directors’ & Officers’/Company Re-Imbursement 
Liability insurance for directors, officers and Pro 
Medicus Limited for costs incurred in defending 
proceedings against them. 

Disclosure of the amount of insurance and the 
terms of this cover is prohibited by the insurance 
policy.

INDEMNIFICATION OF AUDITORS 
To the extent permitted by law, the Company has 
agreed to indemnify its auditors, Ernst & Young, 
as part of the terms of its audit engagement 
agreement against claims by third parties arising 
from the audit (for an unspeciﬁed amount). No 
payment has been made to indemnify Ernst & 
Young during or since the ﬁnancial year.

REMUNERATION REPORT (AUDITED)
This remuneration report for the year ended 30 
June 2017 outlines the remuneration arrangements 
of the Group in accordance with the requirements 
of the Corporations Act 2001 and its Regulations. 
This information has been audited as required by 
section 308(3C) of the Act.

The remuneration report details the remuneration 
arrangements for key management personnel 
(KMP) who are deﬁned as those persons having 
authority and responsibility for planning, directing 
and controlling the major activities of the Company 
and the Group, directly or indirectly, including 
any director (whether executive or otherwise) 
of the Group.

For the purposes of this report, the term ‘executive’ 
includes the Chief Executive Officer (CEO), 
executive directors and other senior executives 
of the Group.

(i) Non – executive directors

Peter Terence Kempen  Chairman 

Roderick Lyle  

Director (non-executive) 

Anthony Glenning 

Director (non-executive)

(ii) Executive directors

Dr Sam Aaron Hupert  Managing Director and CEO

Anthony Barry Hall 

Technology Director

(iii) Other Executives

Danny Tauber 

Malte Westerhoff 

Brad Levin 

Sean Lambright 

 General Manager  
– Pro Medicus Limited

 Managing Director  
– Visage Imaging GmbH 

 General Manager  
– Visage Imaging Inc

 Global Head of Sales  
– Visage Imaging Inc

Remuneration Committee 
Remuneration and nomination issues are handled 
at the full Board level. Due to the small number of 
Directors no committee has been established for 
this purpose. 

Board members, as per groupings detailed below, 
are responsible for determining and reviewing 
compensation arrangements.

In order to maintain good corporate governance 
the Non-Executive Directors assume responsibility 
for determining and reviewing compensation 
arrangements for the Executive Directors of 
the Group. The Executive Directors in turn are 
responsible for determining and reviewing the 
compensation arrangements for the Non-Executive 
Directors. The CEO, in conjunction with the full 
Board reviews the terms of employment for all 
executives.

The assessment considers the appropriateness of 
the nature and amount of remuneration of such 
executives 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 Philosophy
The performance of the Group depends upon the 
quality of its Directors and Executives. To prosper, 
the Group must attract, motivate and retain highly 
skilled Directors and Executives.

To this end, the Group provides competitive 
rewards to attract high calibre Executives.

Executives  
(including Executive Directors remuneration)
Objective
The Group aims to reward Executives with a level 
and mix of remuneration commensurate with their 
position and responsibilities within the Group and 
so as to:

Remuneration Structure
In accordance with best practice corporate 
governance, the structure of Non-Executive 
Director and Executive’s remuneration is separate 
and distinct.

Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration 
at a level which provides the Company with the 
ability to attract and retain Directors of the highest 
calibre, whilst incurring a cost which is acceptable 
to shareholders.

Structure
The Constitution and the ASX Listing Rules specify 
that the aggregate remuneration of Non-Executive 
Directors shall be determined from time to time by 
a general meeting. An amount not exceeding the 
amount determined is then divided between the 
Directors as agreed. The latest determination was 
at the Annual General Meeting held on 4 November 
2005 when shareholders approved an aggregate 
remuneration of $500,000 per year.

The amount of the aggregate remuneration sought 
to be approved by shareholders and the manner 
in which it is apportioned amongst Directors is 
reviewed annually. The Board considers fees paid to 
Non-Executive Directors of comparable companies 
when undertaking the annual review process.

Each Director receives a fee for being a Director 
of the Company. No additional fee is paid for time 
spent on Audit Committee business.

Non-Executive Directors have long been 
encouraged by the Board to hold shares in the 
Company (purchased by the Director on market). 
It is considered good governance for the Directors 
to have a stake in the Company on whose Board 
they sit. 

The remuneration of Non-Executive Directors for 
the period ended 30 June 2017 is detailed in Table 1 
of this report.

•  align the interests of Executives with those 

of shareholders;

•  ensure total remuneration is competitive by 

market standards.

Structure
Employment contracts have been entered into 
with all Executives of the Group. Details of these 
contracts are provided on page 23.

Remuneration consists predominately of ﬁxed 
remuneration. Variable remuneration is provided 
occasionally at the Board’s discretion including 
both short term incentives (STI) and long term 
incentives (LTI).

The Company does not have a policy regarding 
Executives entering into contracts to hedge their 
exposure to share options granted as part of their 
remuneration package. 

The Board engaged external consultants 
throughout the year to undertake a review of the 
remuneration of Executives.

Fixed Remuneration
Objective
The level of ﬁxed remuneration is set so as to 
provide a base level of remuneration which is both 
appropriate to the position and is competitive 
in the market.

Fixed remuneration is reviewed annually and 
the process consists of a review of Group wide, 
business and individual performance, relevant 
comparative remuneration in the market and 
internal and, where appropriate, external advice 
on policies and practices. As noted above, the 
company conducting the review has access to 
external advice independent of management.

Executives, including Executive Directors are given 
the opportunity to receive their ﬁxed (primary) 
remuneration in a variety of forms including cash 
and fringe beneﬁts such as motor vehicles and 
expense payment plans. It is intended that the 
manner of payment chosen will be optimal for 
the recipient without creating undue cost for the 
Group.

The ﬁxed remuneration is detailed in Table 1 of this 
report.

20

PRO MEDICUS ANNUAL REPORT 2017

21

DIRECTORS’ REPORT CONT.

REMUNERATION REPORT (audited) (continued) 

Variable Remuneration – Long Term Incentive (LTI)
Performance Rights
A long term incentive plan was established during 2011–12 whereby Senior Executives of the Group 
were offered performance rights over the ordinary shares of Pro Medicus Limited. The performance 
rights, issued for nil consideration, are offered over a 5 year period and vest 4 years after grant date on 
completion of service. This long term incentive plan includes performance hurdles related to proﬁtability 
(EBIT – 75%) which is set on an annualised basis by the Board and individual performance (25%). 
These measures have been selected and set to align to Company performance and to reﬂect individual 
contribution to the Company.

The fair value of the equity-settled performance rights is estimated using a Black-Scholes model at grant 
date taking into account the terms and conditions upon which the performance rights were granted. For 
further details of valuation of options, models and assumptions used please refer to Note 17 of the ﬁnancial 
statements.

The table below outlines the proportion of LTI that were granted since the plan was established. 

75% EBIT targets met

2017

125%

25% Individual targets met

60–100%*

* subject to Board approval

2016

85%

88%

2015

25%

92%

2014

90%

87%

2013

0%

96%

A new long term incentive plan was established during 2016–17 whereby Senior Executives of the Group 
were offered performance rights over the ordinary shares of Pro Medicus Limited. The performance 
rights, issued for nil consideration, are offered over a 5 year period and vest 4 years after grant date on 
completion of service. This long term incentive plan includes performance hurdles related to proﬁtability 
– Earnings per share (EPS) growth (60%) which is set on an annualised basis by the Board and Total 
shareholder returns (TSR) growth (40%). The Company’s TSR growth performance hurdle is measured 
relative to the ASX300 Index and assessed by the Board at the end of the performance period in 
accordance with the terms of the plan. These measures have been selected and set to align to Company 
performance and shareholder value.

The fair value of the equity-settled performance rights is estimated using Black Sholes and Monte Carlo 
Simulation Models at grant date taking into account the terms and conditions upon which the performance 
rights were granted. For further details of valuation of options, models and assumptions used please refer 
to Note 17 of the ﬁnancial statements.

Variable Remuneration – Short Term Incentive (STI)
Short term incentives in the form of cash bonuses were paid to key staff based on a mix of Company 
based and personal performance targets.

STI bonus for 2017
For the 2017 ﬁnancial year, the total amount of STI cash bonus either paid or accrued at year end was 
$884,690. The maximum STI cash bonus amount payable was $1,043,623.

Key Performance Indicators
Actual STI payments granted to key staff depended on the extent to which speciﬁc targets set at the time 
of employment were met. The targets consist of a number of Key Performance Indicators (KPIs) covering 
both ﬁnancial (Sales Targets) and non-ﬁnancial measures of performance, including client satisfaction, 
patent ﬁlings and employee satisfaction.

Shareholder Returns
The Directors are conﬁdent that the holdings of reserve cash is sufficient to underpin the development and 
expansion needs of the Company as the business looks to increase its penetration of existing markets.

The return on net assets and equity are shown in the table below.

Basic earnings per share – reported (cents)

Return on assets (%)

Return on equity (%)

Dividend payout ratio (%) – normal dividend plan

Dividend payout ratio (%) – total dividend 

Available franking credits ($’000)

2017

9.1

28.6

26.8

44.0

44.0

531

2016

6.3

24.3

23.3

47.9

47.9

0

2015

3.2

17.6

14.7

62.3

62.3

0

2014

1.5

8.4

7.3

132.8

132.8

782

2013

5.1

25.6

24.2

39.7

39.7

1,641

Employment Contracts
Executive Directors
Executive Service Contracts, on similar terms and conditions, have been prepared for all Executive 
Directors of the Company. 

These agreements provide the following major terms:

•  Each Executive will receive a remuneration package per annum which is to be reviewed annually;

•  The agreements protect the Company and Group’s conﬁdential information and provide that any 

inventions or discoveries of an Executive become the property of the Group;

•  Non-competition during employment and for a period of 12 months thereafter; and

•  Termination by the Company on six months’ notice or payment of six months remuneration in lieu 

of notice or a combination of both (or without notice or payment in lieu in the event of misconduct 
or other speciﬁed circumstances). The agreements may be terminated by the Executives on the giving 
of six months’ notice.

Executives (excluding Executive Directors)
All Executives have rolling contracts. The Group may terminate the Executive’s employment agreement 
by providing six months written notice or providing payment in lieu of the notice period (based on the 
ﬁxed component of the Executive’s remuneration). The Group may terminate the contract at any time 
without notice if serious misconduct has occurred. Where termination with cause occurs the Executive 
is only entitled to that portion of remuneration that is ﬁxed, and only up to the date of termination. On 
termination with cause any unvested options will immediately be forfeited.

Remuneration of key management personnel of the Company and the Group.

Table 1: Remuneration of key management personnel for the year ended 30 June 2017

Short-Term

Post  
Employment

Long  
Term

Share-Based 
Payment

Total  
Performance 
Related (%)

Total

30 June 2017
($)

Salary  
& Fees

Cash  
Bonus

Non 
Monetary 
beneﬁts

Super- 
annuation

Long  
Service 
Leave

Performance 
Rights

Directors

P T Kempen

S A Hupert

A B Hall

R Lyle

A Glenning

Executives

D Tauber

63,806

465,000

340,000

45,662

91,324

321,871

—

—

—

—

—

—

M Westerhoff

417,432

108,390

16,474

B Levin

303,004

66,314

S Lambright

234,139

709,986

—

—

1,194

35,000

—

—

—

—

—

35,000

35,000

4,338

8,676

13,129

2,532

—

—

—

7,610

5,708

—

—

—

—

—

—

—

100,000

507,610

380,708

50,000

100,000

—

—

—

—

—

5,365

60,136

400,501

—

—

—

123,427

668,255

83,275

452,593

55,483

999,608

15.0%

34.7%

33.1%

76.6%

2,282,238 884,690

17,668

133,675

18,683

322,321

3,659,275

22

PRO MEDICUS ANNUAL REPORT 2017

23

REMUNERATION REPORT (audited) (continued)

Compensation options granted, vested and exercised during the year as part of remuneration 
During the reporting period, 77,538 rights with a fair value of $139,956 were granted as performance rights 
to Malte Westerhoff with a grant date of 19 October 2016. The performance rights have a 4 year vesting 
period from grant date and are automatically exercised upon achievement of the vesting conditions.

During the reporting period, 26,800 rights with a fair value of $48,374 were granted as performance rights 
to Danny Tauber with a grant date of 19 October 2016. The performance rights have a 4 year vesting 
period from grant date and are automatically exercised upon achievement of the vesting conditions.

During the reporting period, 40,000 rights with a fair value of $195,200 ($4.88 per performance right) 
were granted as performance rights to Brad Levin with a grant date of 19 October 2016. The performance 
rights have a 4 year vesting period from grant date and are automatically exercised upon achievement of 
the vesting conditions.

During the reporting period, an additional 50,000 rights with a fair value of $44,500 ($0.89 per 
performance right) were granted as performance rights to Sean Lambright in relation to STI commission 
due for the 2014–15 ﬁnancial year with a grant date 25 August 2015. The performance rights have a 12 
month vesting period from grant date and are automatically exercised upon achievement of the vesting 
conditions.

Table 2: Remuneration of key management personnel for the year ended 30 June 2016

Short-Term

Post  
Employment

Long  
Term

Share-Based Payment

Total

Total  
Performance 
Related %

30 June 2016
($)

Salary  
& Fees

Cash  
Bonus

Non 
Monetary 
beneﬁts

Super- 
annuation

Long  
Service 
Leave

Performance 

Rights Options

Directors

P T Kempen

63,172

—

1,828

35,000

—

S A Hupert

465,000 110,000

A B Hall

R Lyle

A Glenning

Executives

D Tauber

340,000

47,500

45,662

15,221

321,871

—

—

—

—

—

—

—

—

35,000

114,858

35,000

52,026

4,338

723

—

—

13,129

10,810

M Westerhoff

424,140

114,311

17,373

2,670

B Levin

279,962

68,670

S Lambright

233,478 595,387

—

—

—

—

—

—

—

—

—

—

—

—

51,272

92,959

35,309

55,173

— 100,000

—

—

724,858

474,526

1,226

51,226

—

—

—

—

—

15,944

397,082

651,453

383,941

884,038

—

—

—

—

—

13.6%

31.7%

27.2%

73.6%

2,188,506 935,868

19,201

125,860 177,694

234,713

1,226 3,683,068

During the reporting period, 84,313 rights with a fair value of $166,940 ($1.98 per performance right) 
were granted as performance rights to Malte Westerhoff with a grant date of 22 September 2015. The 
performance rights have a 4 year vesting period from grant date and are automatically exercised upon 
achievement of the vesting conditions.

During the reporting period, 45,750 rights with a fair value of $90,585 ($1.98 per performance right) were 
granted as performance rights to Danny Tauber with a grant date of 22 September 2015. The performance 
rights have a 4 year vesting period from grant date and are automatically exercised upon achievement of 
the vesting conditions.

During the reporting period, 39,781 rights with a fair value of $78,766 ($1.98 per performance right) were 
granted as performance rights to Brad Levin with a grant date of 22 September 2015. The performance 
rights have a 4 year vesting period from grant date and are automatically exercised upon achievement 
of the vesting conditions.

During the reporting period, 21,563 rights with a fair value of $42,694 ($1.98 per performance right) 
were granted as performance rights to Sean Lambright with a grant date of 22 September 2015. The 
performance rights have a 4 year vesting period from grant date and are automatically exercised upon 
achievement of the vesting conditions.

An additional 50,000 rights with a fair value of $44,500 ($0.89 per performance right) were granted as 
performance rights to Sean Lambright in relation to STI commission due for the 2014–15 ﬁnancial year with 
a grant date 25 August 2015. The performance rights have a 12 month vesting period from grant date and 
are automatically exercised upon achievement of the vesting conditions. 

Table 3: Option holdings of Key Management Personnel

Balance  
at beginning  
of year

1 July 2016

30 June 2017
Number

Directors

P T Kempen

100,000

S A Hupert

A B Hall

R. Lyle

A. Glenning

Executives

D Tauber

M Westerhoff

B Levin

S Lambright

—

—

200,000

—

350,000

—

—

—

Total

650,000

Granted as  
Remuneration

Options  
Exercised

Balance  
at end of year

30 June 2017

Not vested

Vested/
Exercisable

Total

—

—

—

—

—

—

—

—

—

—

100,000

—

—

200,000

—

350,000

—

—

—

650,000

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Table 4: Shareholdings of Key Management Personnel

Shares held in  
Pro Medicus Limited
(Number)

Balance at  
beginning of year

On Exercise of 
Performance rights

On Exercise  

of Options  Net Change Other

Balance 
30 June 2017

30 June 2017

1 July 2016 Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Directors

P T Kempen

S A Hupert

A B Hall

R Lyle

A Glenning

Executives

D Tauber

M Westerhoff

B Levin

S Lambright

578,082

30,107,660

30,068,500

140,000

—

129,000

32,700

—

150,000

—

—

—

—

—

100,000*

—

—

200,000**

—

—

—

—

—

4,000***

38,750

54,250

10,000

50,000

350,000****

—

—

—

(111,338)~

(27,125)~~

—

—

678,082

30,107,660

30,068,500

340,000

4,000

406,412

59,825

10,000

200,000

Total

61,205,942

153,000

650,000

(134,463)

61,874,479

* 

** 

 Peter Kempen exercised 100,000 share options throughout the year at $1.25 per share option. 
The intrinsic value of the share options at exercise date was $388,000 ($3.88 per share option).
 Roderick Lyle exercised 200,000 share options throughout the year at $0.55 per share option. 
The intrinsic value of the share options at exercise date was $1,135,200 ($5.68 per share option).
***  Anthony Glenning purchased 4,000 shares throughout the year at the prevailing market share price.
****   Danny Tauber exercised 350,000 share options throughout the year at $1.00 per share option. 

The intrinsic value of the share options at exercise date was $1,925,000 ($5.50 per share option). 
Danny Tauber sold 111,338 shares throughout the year at the prevailing market share price.

~ 
~~  Malte Westerhoff sold 27,125 shares throughout the year at the prevailing market share price.

24

PRO MEDICUS ANNUAL REPORT 2017

25

 
 
 
ROUNDING
The amounts contained in this report and in the ﬁnancial report have been rounded to the nearest 
$1,000 (where rounding is applicable) under the option available to the Company under ASIC 
Corporations (Rounding in Financial/Directors Reports) instrument 2016/191. The Company is an entity 
to which the Class Order applies.

AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The Directors received a declaration from the auditor of Pro Medicus Limited (refer page 28).

NON-AUDIT SERVICES
The following non-audit services were provided by the company’s auditor, Ernst & Young. The directors are 
satisﬁed that the provision of non-audit services is compatible with the general standard of independence for 
the auditors imposed by the Corporations Act. The nature and scope of the non-audit service provided means 
that auditor independence is not compromised.

Ernst & Young received the following amount for the provision of non-audit services:

Professional services rendered in respect to taxation matters $103,736.

Signed in accordance with a resolution of the Directors.

P T Kempen
Director

Melbourne, 18 August 2017

REMUNERATION REPORT (audited) (continued)

Table 5: Performance rights of Key Management Personnel

Balance  
at beginning  
of year

Granted as  
Remuneration

Performance 
rights  
Exercised

Balance  
at end of year

30 June 2017
(Number)

1 July 2016

30 June 2017

Not vested

Vested/
Exercisable

Total

Directors

P T Kempen

S A Hupert

A B Hall

R Lyle

A Glenning

Executives

D Tauber

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

225,500

26,800

(38,750)

M Westerhoff

B Levin

395,751

131,656

77,538

(54,250)

40,000

(10,000)

S Lambright

72,188

50,000

(50,000)

213,550

419,039

161,656

72,188

213,550

419,039

161,656

72,188

Total

825,095

194,338

(153,000)

866,433

866,433

Loans to Key Management Personnel
No loans are made to Key Management Personnel or staff.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

213,550

419,039

161,656

72,188

866,433

Other transactions and balances with Key Management Personnel
Purchases
During the year lease payments of $169,476 (2016: $169,476) in respect of the Group’s operating 
premises at 450 Swan Street Richmond were paid to Champagne Properties Pty. Ltd., an entity controlled 
by S. Hupert and A. Hall. Commercial arrangements on an ‘arm’s length basis’ have been determined by an 
independent assessment of rental and lease terms.

DIRECTORS’ MEETINGS
The numbers of meetings of Directors (including meetings of committees of Directors) held during the 
year and the number of meetings attended by each Director were as follows:

Directors’ Meetings

Eligible to attend

Audit Committee

Eligible to attend

Number of meetings held:

Number of meetings attended:

P T Kempen

R Lyle

A Glenning

A B Hall

S A Hupert

9

9

9

9

8

9

2

2

2

2

2

2

9

9

9

9

9

2

2

2

2

2

Committee membership
As at 30 June 2017, the company had an Audit Committee comprising the 3 Non-Executive Directors 
and 2 Executive Directors. 

26

PRO MEDICUS ANNUAL REPORT 2017

27

AUDITOR’S INDEPENDENCE DECLARATION 
To the Directors of Pro Medicus Limited

CONSOLIDATED STATEMENT OF 
COMPREHENSIVE INCOME

Ernst & Young 
8 Exhibition Street  
Melbourne  VIC  3000  Australia 
GPO Box 67 Melbourne  VIC  3001 

Tel: +61 3 9288 8000 
Fax: +61 3 8650 7777 
ey.com/au 

Auditor’s Independence Declaration to the Directors of Pro Medicus 
Limited 

As lead auditor for the audit of Pro Medicus Limited for the financial year ended 30 June 2017, I 
declare to the best of my knowledge and belief, there have been: 

a)  no contraventions of the auditor independence requirements of the Corporations Act 2001 in 

relation to the audit; and   

b)  no contraventions of any applicable code of professional conduct in relation to the audit. 

This declaration is in respect of Pro Medicus Limited and the entities it controlled during the financial 
year. 

Ernst & Young 

Paul Gower 
Partner 

18 August 2017 

FOR THE YEAR ENDED 30 JUNE 2017

Revenue

Finance Revenue

Revenue

Cost of Sales

Gross Proﬁt

Net foreign currency losses

Accounting and secretarial fees

Advertising and public relations

Depreciation and amortisation

Insurance

Legal costs

Operating lease expense 

Other expense

Salaries and employee beneﬁts expense

Travel and accommodation

Proﬁt before tax

Income tax expense

Proﬁt for the year

Other Comprehensive Income
Items that may be reclassiﬁed subsequently to proﬁt and loss

Foreign Currency translation

Other comprehensive income for the year

TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX

Earnings per share (cents per share)

– Basic for net proﬁt for the year 

– Diluted for net proﬁt for the year

Notes

4

5(a)

Consolidated

2017
$’000

31,597

22

31,619

(521)

31,098

(777)

(638)

(962)

2016
$’000

27,521

56

27,577

(619)

26,958

(89)

(527)

(944)

5(b)

(4,283)

(3,828)

(756)

(268)

(514)

(603)

(8,178)

(707)

13,412

(4,091)

9,321

28

28

9,349

9.1¢

9.0¢

(595)

(842)

(474)

(707)

(8,599

(856)

9,497

(3,129)

6,368

198

198

6,566

6.3¢

6.2¢

5(b)

6

16

7

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

28

PRO MEDICUS ANNUAL REPORT 2017

29

 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF 
FINANCIAL POSITION 

CONSOLIDATED STATEMENT OF 
CHANGES IN EQUITY

AS AT 30 JUNE 2017

ASSETS

Current Assets

Cash and cash equivalents

Trade and other receivables

Accrued revenue

Inventories

Prepayments

Total Current Assets

Non-current Assets

Deferred tax assets

Plant and equipment

Intangible assets

Prepayments

Total Non-current Assets 

TOTAL ASSETS

LIABILITIES 

Current Liabilities

Trade and other payables

Income tax payable

Provisions

Total Current Liabilities 

Non-current Liabilities

Deferred tax liabilities

Provisions

Total Non-current Liabilities 

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Share buyback reserve

Share reserve

Foreign currency translation reserve

Retained earnings

TOTAL EQUITY

Notes

Consolidated

2017
$’000

2016
$’000

9

10

11

6

12

13

14

15

6

15

16

16

16

16

22,775

3,489

3,264

54

598

17,107

4,771

2,258

86

531

FOR THE YEAR ENDED 30 JUNE 2017

At 1 July 2015

Proﬁt for the year

Other comprehensive income

30,180

24,753

Total comprehensive income for the period

Transaction with owners in their capacity 
as owners

Share Based Payment

Exercise of share options

Dividends

At 30 June 2016

At 1 July 2016

Proﬁt for the year

Other comprehensive income

Total comprehensive income for the period

Transaction with owners in their capacity 
as owners

Share Based Payment

Exercise of share options

Share buy-back

Dividends

At 30 June 2017

1,023

283

15,478

242

17,026

47,206

3,458

1,972

1,822

7,252

5,045

75

5,120

12,372

34,834

1,937

(73)

1,717

145

31,108

34,834

757

382

13,512

—

14,651

39,404

2,994

2,747

1,826

7,567

4,386

66

4,452

12,019

27,385

1,302

—

1,104

117

24,862

27,385

Consolidated

Issued 
Capital
$’000

Share 
Buyback 
Reserve

$’000

Share 
Reserve
$’000

Foreign 
Currency 
Translation 
Reserve
$’000

Retained 
Earnings
$’000

Total 
Equity
$’000

327

—

—

—

—

975

—

1,302

1,302

—

—

—

—

635

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

(73)

—

666

(81)

21,026

21,938

—

—

—

438

—

—

1,104

—

198

198

—

—

—

6,368

6,368

—

198

6,368

6,566

—

—

438

975

(2,532)

(2,532)

117

24,862

27,385

1,104

117

24,862

27,385

—

—

—

613

—

—

—

—

28

28

—

—

—

—

9,321

9,321

—

28

9,321

9,349

—

—

—

613

635

(73)

(3,075)

(3,075)

1,937

(73)

1,717

145

31,108

34,834

30

PRO MEDICUS ANNUAL REPORT 2017

31

CONSOLIDATED STATEMENT OF 
CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2017

Cash ﬂows from operating activities

Receipts from customers 

Payments to suppliers and employees 

Income tax (paid)/refunded 

Net cash ﬂows from operating activities

Cash ﬂows from investing activities

Capitalised development costs 

Interest received

Purchase of plant and equipment

Net cash ﬂows used in investing activities

Cash ﬂows from ﬁnancing activities

Payment of dividends on ordinary shares

Payment of share buyback

Proceeds from issuing shares

Net cash ﬂows used in ﬁnancing activities

Net increase/(decrease) in cash and cash equivalents

Net foreign exchange differences

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

9

Consolidated

2017
$’000

2016
$’000

Notes

31,874

24,432

(12,572)

(13,486)

(4,473)

14,829

308

11,254

(6,070)

(5,607)

22

(80)

56

(222)

(6,128)

(5,773)

9

13

12

8

(3,075)

(2,532)

(73)

635

—

975

(2,513)

(1,557)

6,188

(520)

17,107

22,775

3,924

248

12,935

17,107

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2017

1. CORPORATE INFORMATION
The ﬁnancial report of Pro Medicus Limited (the 
Company) for the year ended 30 June 2017 was 
authorised for issue in accordance with a resolution 
of Directors on 18 August 2017.

Pro Medicus Limited is a for proﬁt company 
limited by shares incorporated in Australia 
whose shares are publicly traded on the Australian 
Securities Exchange.

The nature of the operations and principal activities 
of the Group are described in the Directors’ Report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING 
POLICIES

(a) Basis of Preparation
The ﬁnancial report is a general-purpose ﬁnancial 
report, which has been prepared in accordance 
with the requirements of the Corporations Act 
2001, Australian Accounting Standards and other 
authoritative pronouncements of the Australian 
Accounting Standards board. The ﬁnancial report 
has also been prepared on a historical cost basis.

The ﬁnancial report is presented in Australian 
dollars and all values are rounded to the nearest 
thousand dollars ($000) unless otherwise stated.

(b) Statement of compliance with IFRS 
The ﬁnancial report complies with Australian 
Accounting Standards and International Financial 
Reporting Standards (IFRS) as issued by the 
International Accounting Standards Board. 

(c) Basis of consolidation
The consolidated ﬁnancial statements comprise the 
ﬁnancial statements of Pro Medicus Limited and its 
subsidiaries as at 30 June each year (the Group). 
Control is achieved when the Group is exposed, or 
has rights, to variable returns from its involvement 
with the investee and has the ability to affect 
those returns through its power over the investee. 
Speciﬁcally, the Group controls an investee if and 
only if the Group has:

•  Power over the investee (i.e. existing rights that 
give it the current ability to direct the relevant 
activities of the investee)

•  Exposure, or rights, to variable returns from 

its involvement with the investee, and

•  The ability to use its power over the investee 

to affect its returns.

When the Group has less than a majority of the 
voting or similar rights of an investee, the Group 
considers all relevant facts and circumstances in 
assessing whether it has power over an investee, 
including:

•  The contractual arrangement with the other 

vote holders of the investee

•  Rights arising from other contractual 

arrangements

•  The Group’s voting rights and potential 

voting rights.

The Group re-assesses whether or not it controls 
an investee if facts and circumstances indicate 
that there are changes to one or more of the three 
elements of control. Consolidation of a subsidiary 
begins when the Group obtains a control over the 
subsidiary and ceases when the Group loses control 
of the subsidiary. Assets, liabilities, income and 
expenses of a subsidiary acquired or disposed of 
during the year are included in the statement of 
comprehensive income from the date the Group 
gains control until the date the Group ceases to 
control the subsidiary.

Proﬁt or loss and each component of other 
comprehensive income (OCI) are attributed to the 
equity holders of the parent of the Group and to 
the non-controlling interests, even if this results 
in the non-controlling interests having a deﬁcit 
balance. When necessary, adjustments are made 
to the ﬁnancial statements of subsidiaries to bring 
their accounting policies into line with the Group’s 
accounting policies. All intra-group assets and 
liabilities, equity, income, expenses and cash ﬂows 
relating to transactions between members of the 
Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, 
without a loss of control, is accounted for as an 
equity transaction. If the Group loses control over 
a subsidiary, it:

– 

– 

– 

– 

– 

– 

– 

 Derecognises the assets (including goodwill) 
and liabilities of the subsidiary.

 Derecognises the carrying amount of any  
non-controlling interest.

 Derecognises the cumulative translation 
differences, recorded in equity.

 Recognises the fair value of the consideration 
received.

 Recognises the fair value of any investment 
retained.

 Recognises any surplus or deﬁcit in proﬁt 
or loss.

 Reclassiﬁes the parent’s share of components 
previously recognised in OCI to proﬁt or loss or 
retained earnings, as appropriate, as would be 
required if the Group had directly disposed of 
the related assets or liabilities.

32

PRO MEDICUS ANNUAL REPORT 2017

33

NOTES TO FINANCIAL STATEMENTS cont.

2. SUMMARY OF SIGNIFICANT ACCOUNTING 
POLICIES (cont’d)
Any contingent consideration to be transferred 
by the acquirer will be recognised at fair value at 
the acquisition date. Subsequent changes to the 
fair value of the contingent consideration which is 
deemed to be an asset or liability will be recognised 
in accordance with AASB 139 Financial Instruments: 
Recognition and Measurement either in proﬁt 
or loss or in other comprehensive income. If the 
contingent consideration is classiﬁed as equity, 
it shall not be remeasured.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, 
ESTIMATES AND ASSUMPTIONS
The preparation of the ﬁnancial statements requires 
management to make judgements, estimates and 
assumptions that affect the reported amounts in 
the ﬁnancial statements. Management continually 
evaluates its judgements and estimates in relation 
to assets, liabilities, contingent liabilities, revenue 
and expenses. Management bases its judgements 
and estimates on historical experience and on other 
various factors it believes to be reasonable under 
the circumstances, the result of which form the 
basis of the carrying values of assets and liabilities 
that are not readily apparent from other sources. 
Actual results may differ from these estimates 
under different assumptions and conditions.

Management has identiﬁed the following 
critical accounting policies for which signiﬁcant 
judgements, estimates and assumptions are made. 
Actual results may differ from these estimates 
under different assumptions and conditions and 
may materially affect ﬁnancial results or the 
ﬁnancial position reported in future periods.

Further details of the nature of these assumptions 
and conditions may be found in the relevant notes 
to the ﬁnancial statements.

(i) Signiﬁcant accounting judgements, estimates 
and assumptions

Capitalisation of development costs:
Development costs are only capitalised by the 
Group when it can be demonstrated that the 
technical feasibility of completing the intangible 
asset is valid so that the asset will be available 
for use or sale.

The capitalisation of development costs includes an 
overhead rate which has been estimated from total 
costs. The estimated development overheads rate 
has been calculated by dividing the development 
labour costs over total labour costs to give a 
percentage of development labour rate. The 
development labour rate is then applied against 
the total overheads of the company, to give an 
estimate of the amount of overheads that relates 
to development.

Impairment of non-ﬁnancial assets:
The Group assesses impairment of all assets at 
each reporting date by evaluating conditions 
speciﬁc to the Group and to the particular asset 
that may lead to impairment. If an impairment 
trigger exists the recoverable amount of the asset 
is determined. Management has tested certain 
assets for impairment in this ﬁnancial period. Refer 
to Note 13 of the ﬁnancial statements for signiﬁcant 
assumptions applied in assessing for impairment 
on non-ﬁnancial assets.

Taxation:
The Group’s accounting policy for taxation requires 
management’s judgement as to the types of 
arrangements considered to be a tax on income in 
contrast to an operating cost. Judgement is also 
required in assessing whether deferred tax assets 
and certain deferred tax liabilities are recognised 
on the statement of ﬁnancial position. Deferred tax 
assets, including those arising from un-recouped 
tax losses, capital losses and temporary differences, 
are recognised only where it is considered more 
likely than not that they will be recovered, which 
is dependent on the generation of sufficient future 
taxable proﬁts. Deferred tax liabilities arising from 
temporary differences in investments, caused 
principally by retained earnings held in foreign tax 
jurisdictions, are recognised unless repatriation of 
retained earnings can be controlled and are not 
expected to occur in the foreseeable future.

Assumptions about the generation of future 
taxable proﬁts and repatriation of retained earnings 
depend on management’s estimates of future cash 
ﬂows. These depend on estimates of future sales 
volumes, operating costs, capital expenditure, 
dividends and other capital management 
transactions. Judgements are also required about 
the application of income tax legislation. These 
judgements and assumptions are subject to risk 
and uncertainty, hence there is a possibility that 
changes in circumstances will alter expectations, 
which may impact the amount of deferred tax 
assets and deferred tax liabilities recognised on 
the statement of ﬁnancial position and the amount 
of other tax losses and temporary differences not 
yet recognised. In such circumstances, some or all 
of the carrying amounts of recognised deferred 
tax assets and liabilities may require adjustment, 
resulting in a corresponding credit or charge to the 
statement of comprehensive income.

Deferred tax assets are recognised for deductible 
temporary differences as management considers 
that it is probable that future taxable proﬁts will be 
available to utilise those temporary differences.

Net investment in foreign operations:
The Group maintains inter-company loans it 
assesses to represent a part of its net investment 
in its foreign operations. The judgements made in 
assessing these loans to represent net investments 
are on the basis the loans are neither planned nor 
likely to be settled within the foreseeable future, 
the loans do not include trade receivables or trade 
payable and the loans represent a return of funds 
from their investment in the respective subsidiaries.

Operating segments have been identiﬁed 
based on the information provided to the chief 
operating decision makers – being the executive 
management team.

The Group aggregates two or more operating 
segments when they have similar economic 
characteristics and the segments are similar in each 
of the following respects:

•  Nature of the products and services

•  Type or class of customer for the products 

and services

•  Nature of the regulatory environment.

Operating segments that meet the quantitative 
criteria as prescribed by AASB 8 are reported 
separately. However, an operating segment that 
does not meet the quantitative criteria is still 
reported separately where information about the 
segment would be useful to users of the ﬁnancial 
statements.

Information about other business activities and 
operating segments that are below the quantitative 
criteria are combined and disclosed in a separate 
category for “all other segments”.

Inter-entity sales are recognised based on an 
internally set transfer price. The price aims to reﬂect 
what the business operation could achieve if they 
sold their output and services to external parties 
at arm’s length.

Share-based payments:
The Group measures the cost of equity-settled 
transactions with employees by reference to the 
fair value of equity instruments at the date at which 
they are granted. Estimating fair value for share-
based payment transactions requires determination 
of the most appropriate valuation model, which 
is dependent on the terms and conditions of the 
grant. This estimate also requires determination 
of the most appropriate inputs to the valuation 
model including the expected life of the share 
option/performance rights, volatility and dividend 
yield and making assumptions about them. The 
assumptions and models used for estimating fair 
value of share-based payment transactions are 
disclosed in Note 17.

4. OPERATING SEGMENTS
The Group has identiﬁed its operating segments 
based on the internal reports that are reviewed 
and used by the executive management team 
(the chief operating decision makers) in assessing 
performance and in determining the allocation 
of resources.

The operating segments are identiﬁed by 
management based on country of origin. Discrete 
ﬁnancial information is reported to the executive 
management team on at least a monthly basis.

Impairment is not monitored at segment level.

Types of products and services
The Group produces integrated software 
applications for the health care industry. In 
addition, the Group provides services in the form 
of installation and support.

Accounting policies and inter-segment 
transactions
An operating segment is a component of an entity 
that engages in business activities from which it 
may earn revenues and incur expenses (including 
revenues and expenses relating to transactions 
with other components of the same entity), whose 
operating results are regularly reviewed by the 
entity’s chief operating decision maker to make 
decisions about resources to be allocated to 
the segment and assess its performance and for 
which discrete ﬁnancial information is available. 
This includes start-up operations which are yet 
to earn revenues.

Management will also consider other factors in 
determining operating segments such as the 
existence of a line manager and the level of 
segment information presented to the Board 
of Directors.

34

PRO MEDICUS ANNUAL REPORT 2017

35

NOTES TO FINANCIAL STATEMENTS cont.

Operating Segments

Australia

Europe

North America

Total Operations

2017 
$’000

2016 
$’000

2017 
$’000

2016 
$’000

2017 
$’000

2016 
$’000

2017 
$’000

2016 
$’000

Revenue

Sales to external customers 

Inter-segment sales

8,340

6,486

14,512

10,399

1,740

5,253

4,166

21,517

16,869

31,597

27,521

4,830

—

—

19,765

15,229

Total segment revenue

22,852

16,885

6,993

8,996

21,517

16,869

51,362

42,750

Inter-segment elimination

Total consolidation revenue

Results

Segment result

Interest revenue

Non segment expenses

Income tax expense

Net proﬁt

Assets

Non-current assets 

Deferred tax asset

Current assets

Segment assets

Inter-segment elimination

Total assets

Liabilities

Segment liabilities

Inter-segment elimination

Total liabilities

Other segment information

Capital expenditure

Depreciation and amortisation

Cash ﬂow information

Net cash ﬂow  
from operating activities

Net cash ﬂow  
from investing activities

Net cash ﬂow  
from ﬁnancing activities

Product information

(19,765)

(15,229)

31,597

27,521

11,609

7,281

1,222

1,735

559

425

13,390

9,441

22

56

(4,091)

(3,129)

9,321

6,368

19,549

17,574

729

431

121

—

149

—

55

294

93

—

19,725

17,816

1,023

431

26,834

28,366

24,057

23,370

24,441

16,747

75,332

68,483

47,112

46,371

24,178

23,519

24,790

16,840 96,080

86,730

(48,874)

(47,652)

47,206

39,078

31,696

37,339

2,147

2,275

23,638

16,095

57,481

55,709

(45,109)

(44,016)

12,372

11,693

6,075

4,141

5,677

3,686

53

81

79

88

23

61

73

54

6,151

4,283

5,829

3,828

4,479

5,367

(4,733)

(1,419)

15,083

7,306

14,829

11,254

(2,513)

(1,557)

—

—

—

— (2,513)

(1,557)

Revenue from external customers

Consolidated

Radiology Information Systems (RIS)

Picture Archiving Communications Systems (Visage 7/PACS)

Other income

Total revenue per statement of comprehensive income

2017
$’000

6,964

24,595

38

31,597

2016
$’000

6,032

21,468

21

27,521

Revenue from major customers
Included in the North American segment 
are customers that contributed to the total 
consolidated Group revenue by 14.9% (2016: 13.4%) 
from one party and 13.0% (2016: nil) from another 
party. No other customer contributed 10% or 
more to the Group’s revenue for the year ended 
30 June 2017.

Revenue recognition
Revenue is recognised to the extent that it is 
probable that the economic beneﬁts will ﬂow to the 
Group and the revenue can be reliably measured. 
The following speciﬁc recognition criteria must 
also be met before revenue is recognised:

Rendering of services
Revenue generated from pay-per-view contracts 
is recognised based on the number of image views 
undertaken by the customer, multiplied by the 
contracted view rate. Minimum exam counts are 
recognised in the year the customer is implemented 
and any subsequent year that image views do not 
exceed minimum agreed examinations.

Revenue from the installation and ongoing 
support of software applications and services 
is recognised by reference to the stage of 
completion of a contract or contracts in progress. 

Stage of completion is measured by completion 
of identiﬁable service segments as a percentage 
of the total services to be provided for each 
contract, which is determined by a quotation 
with the customer.

Service revenue is recognised over the term of the 
contract. Where revenue is received in advance, 
revenue is recognised in the period during which 
the service is provided.

Where the contract outcome cannot be reliably 
measured, revenue is recognised only to the extent 
that costs have been incurred.

Licences
Licence revenue is recognised when control of the 
right to be compensated for the license can be 
reliably measured. Licence revenue is recognised 
when ownership of the goods have passed to 
the buyer, which is usually after the software 
application has been installed and is ready for use 
by the buyer.

Interest
Revenue is recognised as the interest accrues 
(using the effective interest method, which is the 
rate that exactly discounts estimated future cash 
receipts through the expected life of the ﬁnancial 
instrument) to the net carrying amount of the 
ﬁnancial asset.

5. INCOME AND EXPENSES

(a) Net foreign currency gains/(losses)

Currency gains

Currency (loss)

Total net foreign currency losses

(b) Expenses

Depreciation and amortisation

Motor vehicles

Office equipment

Capitalised development costs

Computer software

Total depreciation and amortisation expense

Salaries and employee beneﬁts expense

Wages and salaries

Long service leave provision

Share-based payment expense

Deﬁned contribution plan expense

Notes

12

12

12

13

13

Consolidated

2017
$’000

3,377

2016
$’000

1,760

(4,154)

(1,849)

(777)

(89)

7

147

25

7

155

19

4,103

3,646

1

1

4,283

3,828

6,594

68

613

903

7,013

244

438

904

Total salaries and employee beneﬁts expense

8,178

8,599

(6,053)

(5,621)

(53)

(79)

(22)

(74)

(6,128)

(5,774)

Furniture and ﬁttings and property improvements

36

PRO MEDICUS ANNUAL REPORT 2017

37

NOTES TO FINANCIAL STATEMENTS cont.

6. 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 reporting date.

Deferred income tax is provided on all temporary 
differences at the reporting 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: 

•  where the deferred income tax liability 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.

•  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 assets and unused tax losses can be utilised, 
except:

•  where 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.

•  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 reporting 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 reporting 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 the tax rates (and tax 
laws) that have been enacted or substantively 
enacted at the reporting date.

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.

Income taxes relating to items recognised directly 
in equity are recognised in equity and not in the 
statement of comprehensive income.

Unrecognised temporary differences
At 30 June 2017, there are no temporary differences 
associated with the Group’s investments in 
subsidiaries being recognised as the parent is 
able to control the timing of the reversal of any 
temporary differences and it is not probable any 
temporary difference will reverse in the foreseeable 
future.

Tax consolidation legislation
Pro Medicus Limited and its wholly-owned 
Australian controlled entities implemented the tax 
consolidation legislation as of 1 July 2009.

The head entity, Pro Medicus Limited, and the 
controlled entities in the tax consolidated group 
continue to account for their own current and 
deferred tax amounts. The Group has applied 
the Group allocation approach to determining 
the appropriate amount of current taxes and 
deferred taxes to allocate to members of the 
tax consolidated group. An allocation of income 
tax liabilities between the entities of the tax 
consolidated group will be made should the head 
entity default on its tax payment obligations. No 
such amounts have been recognised in the ﬁnancial 
statements on the basis that the possibility of 
default is remote.

In addition to its own current and deferred tax 
amounts, Pro Medicus Limited also recognises the 
current tax liabilities (or assets) and the deferred 
tax assets arising from unused tax losses and 
unused tax credits assumed from controlled entities 
in the tax consolidated group.

Notes

Consolidated

2017
$’000

2016
$’000

6. INCOME TAX (cont’d)

The major components of income tax expense are:

Statement of Comprehensive Income

Current income tax

Current income tax charge

Prior year adjustment

Deferred income tax

Relating to origination and reversal of temporary differences

Income tax expense/(beneﬁt) reported in the statement  
of comprehensive income

A reconciliation between tax expense and the product of accounting proﬁt before income tax
multiplied by the Group’s applicable income tax rate is as follows:

Accounting proﬁt before tax

At the applicable statutory income tax rate in each country 

3,865

(167)

393

4,091

2,015

(71)

1,185

3,129

13,412

9,497

3,489

2,201

190

368

(167)

330

(119)

145

523

(71)

326

5

4,091

3,129

– Australia

– United States of America

– Germany

Prior year adjustment

Expenditure not allowable for income tax purposes

Other 

Income tax expense reported in the statement 
of comprehensive income

Deferred income tax

Deferred income tax at 30 June relates  
to the following:

Deferred Tax liabilities

Foreign currency exchange gain

Capitalised development expenses

Other

Deferred income tax liabilities

Deferred tax assets

Employee entitlements

Intellectual property expenses

Audit fee accrual

Other 

Deferred income tax assets

Consolidated Statement 
of Financial Position

Consolidated Statement 
of Comprehensive Income

2017 
$’000

2016 
$’000

2017 
$’000

2016 
$’000

732

4,264

49

5,045

690

308

22

3

1,023

886

3,500

—

4,386

411

326

16

4

757

154

(764)

(49)

(659)

279

(18)

6

(1)

266

28

(1,116)

—

(1,088)

85

(19)

(8)

(41)

(97)

38

PRO MEDICUS ANNUAL REPORT 2017

39

9. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

Short-term deposits

Consolidated

2017
$’000

22,775

—

22,775

2016
$’000

15,577

1,530

17,107

Cash and cash equivalents in the Statement of Financial Position and Statement of Cash Flow comprise cash 
at bank and in hand and short term deposits with an original maturity of three months or less that are readily 
convertible to known amounts of cash and which are subject to an insigniﬁcant risk of changes of value.

Cash at bank earns interest at ﬂoating rates based on daily bank deposit rates.

Short term deposits are made for varying periods of between 30 days and 120 days, depending on the immediate 
cash requirements of the Group, and earn interest at the respective short-term deposit rates.

The fair value of cash and cash equivalents is their carrying value.

Reconciliation of net proﬁt after tax to net cash ﬂows from operations

Net proﬁt 

Adjustments for:

Depreciation of property plant and equipment

Amortisation of intangible assets

Interest received classiﬁed in investing activities

Foreign currency loss

Share-based payment expense

Changes in assets and liabilities

(Increase)/decrease in trade and other receivables

(Increase)/decrease in inventory

(Increase)/decrease in deferred tax asset

(Increase)/decrease in prepayments

(Increase)/decrease in accrued revenue

(Decrease)/increase in deferred income

(Decrease)/increase in trade and other payables

(Decrease)/increase in tax provision

(Decrease)/increase in deferred tax liability

(Decrease)/increase in employee entitlements

Net cash ﬂow from operations

9,321

6,368

179

4,104

(22)

777

613

181

3,647

(56)

89

438

1,282

(1,040)

32

(266)

(309)

43

78

(189)

(1,006)

(2,048)

(7)

242

(775)

659

5

14,829

178

(95)

2,252

1,107

301

11,254

NOTES TO FINANCIAL STATEMENTS cont.

7. 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 (other than dividends) divided by the weighted average number 
of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net proﬁt attributable to members of the Group adjusted for: 

–  Costs of servicing equity (other than dividends)

–   The after tax effect of dividends and interest associated with dilutive potential ordinary shares that 

have been recognised as expenses

–   Other non-discretionary changes in revenue or expenses during the period that would result from 

the dilution of potential ordinary shares 

–   Dilutive potential ordinary shares adjusted for any bonus element

and then divided by the weighted average number of ordinary shares.

The following reﬂects the income and share data used in the basic and diluted 
earnings per share computations:

Net proﬁt attributable to ordinary equity holders

Consolidated

2017
$’000

2017
$’000

9,321,331

6,368,722

Number

Number

Weighted average number of ordinary shares for basic earnings per share

102,484,842

101,378,835

Effect of dilution:

Share options

Performance rights

132,573

1,505,931

686,563

1,379,441

Weighted average number of ordinary shares adjusted for the effect of dilution

104,123,346

103,444,839

There have been no other transactions involving ordinary shares or potential ordinary shares between the 
reporting date and the date of completion of these ﬁnancial statements

8. DIVIDENDS PAID AND PROPOSED

Declared and paid during the year:

Dividends on ordinary shares

Final unfranked dividend for 2016: 1.5 cent (2015: 1.0 cent)

Interim unfranked dividend for 2017: 1.5 cent (2016: 1.5 cent unfranked)

Proposed for approval by directors (not recognised as a liability as at 30 June):

Dividends on ordinary shares:

Final franked dividend for 2017: 2.5 cents (2016: 1.5 cents unfranked)

Total dividends proposed

Franking credit balance

 − franking account balance as at the end of the ﬁnancial year at 30% (2016: 30%)

 − franking credits that will arise from the payment of income tax payable  

as at the end of the ﬁnancial year

 − franking debits that will arise from the payment of dividends  

as at the end of the ﬁnancial year

 − franking credits that the entity may be prevented from distributing 

in the subsequent ﬁnancial year

 − prior period adjustment

The amount of franking credits available for future reporting periods:

 − impact on the franking account of dividends proposed or declared 

before the ﬁnancial report was authorised for issue but not recognised 
as a distribution to equity holders during the period

Consolidated

2017
$’000

2016
$’000

1,535

1,540

3,075

1,006

1,526

2,532

2,567

2,567

1,526

1,526

531

501

—

—

—

1,032

(1,102)

(70)*

—

—

—

—

—

—

—

—

* The deﬁcit at 30 June 2017 is expected to be supported by income tax instalments paid in the subsequent ﬁnancial year.
The tax rate at which paid dividends have been franked is 30% (2016: 0%). Dividends proposed will be fully franked. 

40

PRO MEDICUS ANNUAL REPORT 2017

41

NOTES TO FINANCIAL STATEMENTS cont.

10. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade and intercompany receivables are recognised initially at fair value and subsequently measured 
at amortised cost less an allowance for any uncollectible amounts.

A provision for impairment is made when there is objective evidence that the Group will not be able 
to collect the debts. Financial difficulty of the debtors is considered objective evidence by the Group. 
Bad debts are written off when identiﬁed.

Trade receivables

Provision for impairment

Research & development tax receivable

Other receivables

Fair value approximates carrying value due to the short term nature of receivables.

a) Allowance for impairment loss

Movements in the provision for impairment loss were as follows:

At 1 July

Charge to/(write back of) provision for the year

Utilised during the year

Foreign exchange translation

At 30 June

3,284

—

3,284

—

205

3,489

—

—

—

—

—

3,533

—

3,533

989

249

4,771

140

—

(140)

—

At June 30, the ageing analysis of trade receivables is as follows:

Total

0 – 30 days

31 – 60 days

61 – 90 days

+91 days

+91 days

2017 Consolidated

2016 Consolidated

3,284

3,533

1,978

1,471

*  Past due not impaired (‘PDNI’) 
** Considered Impaired (‘CI’)

PDNI*

290

391

PDNI*

712

393

PDNI*

304

1,278

CI**

—

—

Payment terms on $301,356 (2016: $526,379) of trade receivables have been renegotiated. The Company 
has been in direct contact with these debtors and is satisﬁed that payment will be received in full.

11. INVENTORY

Finished goods (at lower of cost and net realisable value)

Consolidated

2017
$’000

54

2016
$’000

86

Inventory write downs recognised as an expense during the year ended 30 June 2017 total nil (2016: nil)

Inventories are valued at the lower of cost and net realisable value. The cost of ﬁnished goods represents 
the purchase cost.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated 
costs of completion and the estimated costs necessary to make the sale.

12. PLANT & EQUIPMENT
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Property Improvements

Motor Vehicles

Office Equipment

Furniture and Fittings

2017

2016

2 to 7 years

4 to 5 years

2 to 7 years

5 years

2 to 7 years

4 to 5 years

2 to 7 years

5 years

Research and Development Equipment

3 to 4 years

3 to 4 years

12. PLANT & EQUIPMENT (cont’d)
An item of plant and equipment is derecognised upon disposal or when no future economic beneﬁts 
are expected to arise from the continued use of the asset.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net 
disposal proceeds and the carrying amount of the item) is included in the statement of comprehensive 
income in the period the item is derecognised.

Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with 
recoverable amount being estimated when events or changes in circumstances indicate that the carrying 
value may be impaired.

For an asset that does not generate largely independent cash inﬂows, the recoverable amount is 
determined for the cash generating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amount, 
the assets or cash-generating units are written down to their recoverable amount.

The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in 
use. In assessing value in use, the estimated future cash ﬂows are discounted to their present value using 
a pre-tax discount rate that reﬂects current market assessments of the time value of money and the risks 
speciﬁc to the asset.

Year ended 30 June 2017

At 1 July 2016 net of accumulated  
depreciation

Additions

Disposals

Exchange differences

Depreciation charge for the year

At 30 June 2017 net  
of accumulated depreciation

At 30 June 2017

Cost

Accumulated depreciation  
and impairment

Net carrying amount

Year ended 30 June 2016

At 1 July 2015 net  
of accumulated depreciation

Additions

Disposals

Exchange differences

Depreciation charge for the year

At 30 June 2016 net of  
accumulated depreciation

At 30 June 2016

Cost

Consolidated

Property
Improvements

Motor
Vehicles

Office
Equipment

Furniture &
Fittings

Research &
Development
Equipment

Total

$’000

$’000

$’000

$’000

$’000

$’000

19

—

—

—

(2)

17

41

—

—

—

(7)

34

262

83

—

(2)

(147)

196

60

—

—

(1)

(23)

36

—

—

—

—

—

—

382

83

—

(3)

(179)

283

329

488

2,204

399

209

3,629

(312)

(454)

(2,008)

(363)

(209)

(3,346)

17

34

196

36

—

283

22

—

—

—

(3)

19

48

—

—

—

(7)

41

248

163

—

6

(155)

262

329

488

2,183

23

53

—

—

(16)

60

401

(341)

60

—

—

—

—

—

—

341

216

6

(181)

382

209

3,610

(209)

(3,228)

—

382

Accumulated depreciation and impairment

(310)

(447)

(1,921)

Net carrying amount

19

41

262

42

PRO MEDICUS ANNUAL REPORT 2017

43

NOTES TO FINANCIAL STATEMENTS cont.

13. INTANGIBLE ASSETS
Intangible assets acquired separately are initially 
measured at cost. The cost of an intangible asset 
acquired in a business combination is its fair 
value as at date of acquisition. Following initial 
recognition, intangible assets with a ﬁnite life are 
carried at cost less any accumulated amortisation 
and any accumulated impairment losses.

Amortisation is calculated on a straight-line basis 
over the estimated useful life of the asset. 

Intangible assets, excluding development costs, 
created within the business are not capitalised and 
expenditure is charged against proﬁts in the period 
in which the expenditure is incurred.

Intangible assets are tested for impairment where 
an indicator of impairment exists, either individually 
or at the cash generating unit level. The recoverable 
amount is estimated and an impairment loss is 
recognised to the extent that the recoverable 
amount is lower than the carrying value.

The amortisation period and method is renewed 
at each ﬁnancial year end and adjustments, where 
applicable, are made on a prospective basis. 

Research and development costs
Research costs are expensed as incurred.

An intangible asset arising from development 
expenditure on an internal project is recognised 
only when the group can demonstrate the technical 
feasibility of completing the intangible asset so 
that it will be available for sale or use, its intention 
to complete and its ability to use or sell the asset, 
how the asset will generate future economic 
beneﬁts, the availability of resources to complete 
the development and the ability to measure reliably 
the expenditure attributable to the intangible asset 
during its development. Following initial recognition 
of the development expenditure, the cost model is 
applied requiring the asset be carried at cost less 
any accumulated amortisation and accumulated 
impairment losses. Any expenditure so capitalised 
is amortised on a straight line basis over the period 
of expected beneﬁt from the related project 
(5 years). 

Development expenditure includes costs of 
materials and services and salaries and wages 
and other employee related costs arising from 
the generation of the intangible asset.

The carrying value of an intangible asset arising 
from development expenditure is tested for 
impairment annually when the asset is not 
yet available for use or more frequently when 
an indication of impairment arises during the 
reporting period.

Intellectual Property – Software
Three separately identiﬁable intangible assets, 
in the form of software intellectual property, 
have previously been identiﬁed in the business 
acquisition of Visage Imaging:

•  Visage PACS

•  Visage MagicWeb and 

•  Amira.

Following initial recognition, Intellectual property 
is measured at cost less any accumulated 
amortisation. A useful life of 5 years has been 
determined.

Software Licenses
The Group identiﬁed a separate intangible asset 
in the form of software licenses, in the business 
acquisition of Visage Imaging.

Following initial recognition, software licenses 
are measured at cost less any accumulated 
amortisation. A useful life of 4 years has been 
determined.

Customer List
The Group identiﬁed a separate intangible asset 
in the form of a customer list, in the business 
acquisition of Visage Imaging.

Following initial recognition, the customer 
list is measured at cost less any accumulated 
amortisation. A useful life of 4 years has been 
determined.

13. INTANGIBLE ASSETS

Year ended 30 June 2017

At 1 July 2016 net of accumulated
amortisation and impairment

Additions – internal development

Disposals

Exchange differences

Amortisation charge for the year

At 30 June 2017 net of accumulated 
amortisation and impairment

At 30 June 2017

Cost

Consolidated

Intellectual
Property
i)

Development
Costs 
ii)

Software
Licenses 
iii)

$’000

$’000

$’000

—

—

—

—

—

—

13,510

6,070

—

—

(4,103)

15,477

2

—

—

—

(1)

1

Total

$’000

13,512

6,070

—

—

(4,104)

15,478

1,848

38,725

294

40,867

Accumulated amortisation and impairment

(1,848)

(23,248)

(293)

(25,389)

Net carrying amount

Year ended 30 June 2016

At 1 July 2015 net of accumulated amortisation 
and impairment

Additions – internal development

Disposals

Exchange differences

Amortisation charge for the year

At 30 June 2016 net of accumulated 
amortisation and impairment

At 30 June 2016

Cost

—

—

—

—

—

—

—

15,477

1

15,478

11,549

5,607

—

—

(3,646)

13,510

3

—

—

—

(1)

2

11,552

5,607

—

—

(3,647)

13,512

1,848

32,655

296

34,799

Accumulated amortisation and impairment

(1,848)

(19,145)

(294)

(21,287)

Net carrying amount

—

13,510

2

13,512

44

PRO MEDICUS ANNUAL REPORT 2017

45

NOTES TO FINANCIAL STATEMENTS cont.

Revenue forecasts – Revenue forecasts are based 
on current year consolidated budgets for each 
geographical segment. Estimated growth rates are 
then used to forecast the following 4 years revenue 
for each product used in each geographical 
segment. Total forecast segment growth rates 
range from 0% to 57% (2016: -1% to 22%) across 
the 4 year period.

Discount rates – The discount rate applied to 
the cash ﬂow projections have been assessed to 
reﬂect the time value of money and the perceived 
risk proﬁle of the industry in which each cash 
generating unit (CGU) operates. The post-tax 
discount rate applied was 17% (2016:17%). 

Growth rate estimates – rates are based on 
industry based customer price index (CPI) 
forecasts. The long term rate of 2.5% (2016: 2.5%) 
was used in the current assessment.

Sensitivity to changes in assumptions
With regard to the assessment of value in use of 
development costs, the estimated recoverable 
amount is in excess of its carrying value for each 
product, however adverse changes in assumptions 
could result in an impairment loss. Management 
has considered the possible change in each of 
the key assumptions applied to the respective 
capitalised development costs recoverable amount 
assessments. A reasonably possible adverse change 
in the revenue forecasts for the RIS product could 
have the potential to give rise to circumstances 
where the recoverable amount may be lower than 
the carrying amount. To illustrate the sensitivity 
of this assumption, if forecast revenues of the RIS 
product were to decrease materially, that is in 
the range of 7 – 10%, across the ﬁve year forecast 
period without the implementation of mitigation 
plans, cost reductions or restructure which 
management would look to do if such decreases 
were to arise, this could lead to a future impairment 
write-down of approximately $0.2 – $1.3 million. 

i)   Intellectual property was acquired in 2009 

through the Visage Imaging business 
combination and is carried at cost less 
accumulated amortisation. Three separately 
identiﬁable intangible assets, in the form of 
software intellectual property, have been 
identiﬁed in the business acquisition of Visage 
Imaging; Visage CS, Visage PACS and Amira. 
These intangible assets have been assessed as 
having a ﬁnite life and have been fully amortised 
using the straight line method over a period of 
5 years, commencing February 2009. Amira 
was sold in July 2012.

ii)   Development costs have been capitalised at 
cost. This intangible asset has been assessed 
as having a ﬁnite life and is amortised using 
the straight line method over a period of 5 
years. As at 30 June 2017 the carrying values 
of capitalised development costs are Visage 
PACS ($10,593,365) RIS ($4,367,516) and 
Visage MagicWeb ($515,579), all sit within the 
Australian operating segment.

The Group undertook an impairment assessment 
of the capitalised development costs as at 30 June 
2017. The recoverable amount of development 
costs have been determined based on a value 
in use calculation using cash ﬂow projections 
from ﬁnancial budgets approved by the Board of 
Directors covering a ﬁve-year period. The projected 
cash ﬂows were updated to reﬂect the change in 
forecast revenues and a post-tax discount rate of 
17% (30 June 2016:17%) was applied. Cash ﬂows 
beyond a 5 year period have been extrapolated 
using a 2.5% growth rate (30 June 2016: 2.5%). 
The Groups recoverable value was in excess of the 
carrying value using the value in use calculation 
and as such no impairment charges were recorded 
at 30 June 2017.

Key assumptions used in value in use 
calculations
The calculation of value in use for development 
costs is most sensitive to the following 
assumptions:

–  Revenue forecasts

–  Discount rates

– 

 Growth rates used to extrapolate cash ﬂows 
beyond the forecast period

14. TRADE AND OTHER PAYABLES 
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and 
services provided to the Group prior to the end of the ﬁnancial year that are unpaid and arise when the 
Group becomes obliged to make future payments in respect of the purchase of these goods and services.

Current

Trade payables

Other payables and accruals

Deferred Income

Consolidated

Notes

2017
$’000

2016
$’000

446

2,086

2,532

926

3,458

676

1,383

2,059

935

2,994

(i)  Trade payables are non-interest bearing and are normally settled on 30-day terms.
(ii)  Other payables, other than inter-company payables are non-interest bearing and have an average term 

of 30 days.

Fair value approximates carrying value due to the short term nature of trade and other payables.

Consideration is given to expected future wage and 
salary levels, experience of employee departures, 
and periods of service. Expected future payments 
are discounted using market yields at the reporting 
date on high quality corporate bonds with terms 
to maturity and currencies that match, as closely 
as possible the estimated future cash outﬂows. 
Expenses for non-accumulating sick leave are 
recognised when the leave is taken and are 
measured at the rates paid.

(ii) Long service leave
The liability for long service leave is recognised 
and measured as the present value of expected 
future payments to be made in respect of services 
provided by employees up to the reporting 
date, using the projected unit credit method. 
Consideration is given to expected future wage and 
salary levels, experience of employee departures, 
and periods of service. Expected future payments 
are discounted using market yields at the reporting 
date on high quality corporate bonds with terms to 
maturity and currencies that match, as closely as 
possible the estimated future cash outﬂows.

15. PROVISIONS

Provisions are recognised when the Group has 
a present obligation (legal or constructive) as a 
result of a past event, it is probable that an outﬂow 
of resources embodying economic beneﬁts 
will be required to settle the obligation and a 
reliable estimate can be made of the amount of 
the obligation. Provisions are measured at the 
present value of management’s best estimate of 
the expenditure required to settle the present 
obligation at the reporting date.

When the Group expects some or all of a provision 
to be reimbursed, for example under an insurance 
contract, the reimbursement is recognised as a 
separate asset but only when the reimbursement 
is virtually certain. The expense relating to 
any provision is presented in the statement of 
comprehensive income net of any reimbursement.

Dividends payable are recognised when a legal or 
constructive obligation to pay the dividend arises, 
typically following approval of the dividend at a 
meeting of directors.

Employee leave beneﬁts
Provision is made for employee entitlement 
beneﬁts accumulated as a result of employees 
rendering services up to the reporting date.

(i) Annual leave and sick leave
The liability for annual leave is recognised and 
measured as the present value of expected future 
payments to be made in respect of services 
provided by employees up to the reporting 
date, using the projected unit credit method. 

46

PRO MEDICUS ANNUAL REPORT 2017

47

NOTES TO FINANCIAL STATEMENTS cont.

15. PROVISIONS (cont’d)

Consolidated

16. CONTRIBUTED EQUITY AND RESERVES (cont’d)

Current

Long service leave

Annual leave

Non Current

Long service leave

Notes

2017
$’000

821

1,001

1,822

75

75

2016
$’000

799

1,027

1,826

66

66

16. CONTRIBUTED EQUITY AND RESERVES
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.

Contributed Equity

(i) Ordinary shares

Issued and fully paid

Fully paid ordinary shares carry one vote per share and carry the right to dividends
(ii) Movements in shares on issue

At 1 July 2016

Cancellation for share buy-back

Issued for cash on exercise of options

Vesting of performance rights

At 30 June 2017

At 1 July 2015

Cancellation for share buy-back

Issued for cash on exercise of options

Vesting of performance rights

At 30 June 2016

Share Reserve (i)

Balance at 1 July 

Share options expensed

Performance rights expensed

Balance at 30 June 

Consolidated

2017
$’000

1,937

1,937

Number of Shares

101,750,406

(16,232)

700,000

226,375

2017
$’000

1,302

1,302

2017
$’000

1,302

—

635

—

102,660,549

1,937

Number of Shares

100,263,406

—

950,000

537,000

2016  
$’000

327

— 

975

—

101,750,406

1,302

Consolidated

2017
$’000

1,104

—

613

1,717

2016
$’000

666

1

437

1,104

Foreign Currency Translation Reserve (ii)

Balance at 1 July 

Foreign Currency Movement

Balance at 30 June 

Retained Earnings

Balance at 1 July 

Net proﬁt for the year

Dividends

Balance at 30 June

(i) Share reserve

The share reserve is used to record the value of 
share based payments provided to employees, 
including KMP, as part of their remuneration. 
Refer to note 17 for further details of these plans.

(ii) Foreign currency translation reserve

The foreign currency translation reserve is used 
to record exchange differences arising from the 
translation of the ﬁnancial statements of foreign 
subsidiaries and for exchange differences arising 
from long term loan accounts resulting from net 
investment in subsidiaries.

Capital Management
When managing capital, management’s objective 
is to ensure the entity continues as a going 
concern as well as to maintain optimal returns to 
shareholders and beneﬁts for other stakeholders. 
Management also aims to maintain a capital 
structure that ensures the lowest cost of capital 
available to the entity.

Management review the capital structure to take 
advantage of favourable costs of capital or high 
returns on assets. As the market is constantly 
changing, management may change the amount 
of dividends to be paid to shareholders, return 
capital to shareholders, or issue new shares.

During the year, the company paid dividends 
of $3,074,568 (2016: $2,532,142). 

17. SHARE BASED PAYMENTS 
(i) Equity settled transactions:

The Group provides beneﬁts to its employees 
(including KMP) in the form of share-based 
payments, whereby employees render services 
in exchange for shares or rights over shares  
(equity-settled transactions).

Consolidated

2017
$’000

2016
$’000

117

28

145

24,862

9,321

(3,075)

31,108

(81)

198

117

21,026

6,368

(2,532)

24,862

There are currently two plans in place to provide 
these beneﬁts:

•  The Employee Share Option Plan (ESOP), which 
provides beneﬁts to directors, senior executives 
and other employees.

•  The Long Term Incentive Plan (LTIP), which 

provides beneﬁts to senior executives and other 
employees.

The cost of these equity-settled transactions with 
employees (for awards granted after 7 November 
2002 that were unvested at 1 January 2005) 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 using 
either a Black Scholes model or Monte Carlo 
simulation model.

In valuing equity-settled transactions, no account 
is taken of any vesting conditions, other than 
conditions linked to the price of the shares of Pro 
Medicus Limited (market conditions) if applicable.

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 (the vesting 
period), ending on the date on which the relevant 
employees become fully entitled to the award (the 
vesting date).

At each subsequent reporting date until vesting, 
the cumulative charge to the statement of 
comprehensive income is the product of:

(i)  The grant date fair value of the award;

(ii)   For options with non-market vesting 

conditions, the current best estimate of the 
number of awards that will vest, taking into 
account such factors as the likelihood of 
employee turnover during the vesting period 
and the likelihood of non-market performance 
conditions being met; and

(iii)  The expired portion of the vesting period.

48

PRO MEDICUS ANNUAL REPORT 2017

49

NOTES TO FINANCIAL STATEMENTS cont.

The charge to the statement of comprehensive 
income for the period is the cumulative amount as 
calculated above less the amounts already charged 
in previous periods. There is a corresponding entry 
to equity.

Until an award has vested, any amounts recorded 
are contingent and will be adjusted if more or fewer 
awards vest than were originally anticipated to 
do so. Any award subject to a market condition is 
considered to vest irrespective of whether or not 
that market condition is fulﬁlled, provided that all 
other conditions are satisﬁed.

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. An 
additional 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.

The dilutive effect, if any, of outstanding options 
is reﬂected as additional share dilution in the 
computation of diluted earnings per share 
(see Note 7).

Employee Share Option Scheme
An employee share incentive scheme was 
established on 25 August 2000 whereby Directors 
and staff of the Company were issued with options 
over the ordinary shares of Pro Medicus Limited. 
The options, issued for nil consideration, had an 
exercise price of $1.15 and 2,100,000 share options 
expired under the scheme on 25 August 2010. 
Options vested at 20% per annum commencing on 
the ﬁrst anniversary of issue. The options cannot be 
transferred and will not be quoted on the ASX. 

200,000 shares were granted as options to Peter 
Kempen on becoming a Director of the company 
in 2008 under a separate agreement. The options 
had a grant date of 12 March 2008 and an exercise 
price of $1.25. The fair value of the options at grant 
date was $40,852 ($0.13 – $0.29 per option). The 
options have a ﬁrst exercise date of 12 March 2009 

and can be exercised at anytime through to expiry 
date of 12 March 2018. The options vest over a 
5 year period on completion of service. During 
the reporting period, all options had vested and 
100,000 (50%) options were exercised during 
the year. 

900,000 shares were granted as options to key 
Visage Imaging GmbH employees under a separate 
agreement. The options had a grant date of 1 April 
2010 and an exercise price of $1.00. The fair value 
of the options at grant date was $67,278 ($0.07 
per option). The options have a ﬁrst exercise date 
of 1 April 2011 and can be exercised at anytime 
through to expiry date of 1 April 2020. The options 
vest over a 5 year period on completion of service. 
During the reporting period, all options had vested 
and 175,000 (19%) options had expired. No options 
were exercised during the year. 

550,000 shares were granted as options to Key 
Executives under a separate agreement. The 
options had a grant date of 25 August 2010 and an 
exercise price of $1.00. The fair value of the options 
at grant date was $54,109 ($0.10 per option). The 
options have a ﬁrst exercise date of 25 August 2011 
and can be exercised at anytime through to expiry 
date of 25 August 2020. The options vest over 
a 5 year period on completion of service. During 
the reporting period, all options had vested and 
400,000 (73%) options were exercised during 
the year.

200,000 shares were granted as options to 
Roderick Lyle on becoming a Director of the 
company in 2011 under a separate agreement. 
The options had a grant date of 18 November 2011 
and an exercise price of $0.55. The fair value of 
the options at grant date was $45,116 ($0.23 per 
option). The options have a ﬁrst exercise date of 
18 November 2012 and can be exercised at anytime 
through to expiry date of 18 November 2021. The 
options vest over a 5 year period on completion 
of service. During the reporting period, all options 
had vested and 200,000 (100%) options were 
exercised during the year.

Information with respect to the number of options granted under the employee share option scheme is as 
follows:

2017

2016

Number of  
Options

Weighted average 
exercise price

Number of  
Options

Weighted average 
exercise price

Outstanding at the beginning of the year

725,000

$0.91

1,675,000

$0.98

– granted

– forfeited

– exercised

– expired

Outstanding at the end of the year

Exercisable at end of year

—

—

—

—

—

—

(700,000)

$0.91

(950,000)

—

25,000

25,000

—

$1.00

$1.00

—

725,000

685,000

—

—

$1.03

—

$0.91

$0.93

All options above have been recognised in 
accordance with AASB 2 as the options were 
granted after 7 November 2002.

The outstanding balance as at 30 June 2017 
is represented by:

•  25,000 options over ordinary share with an 

exercise price of $1.00 each, exercisable until 
1 April 2020.

Weighted average remaining contractual life 
The weighted average remaining contractual life 
for share options outstanding at 30 June 2017 
is 2.76 years (2016: 4.14 Years) 

Range of exercise price
The range of exercise prices for options 
outstanding at the end of the year was  
$1.00 – $1.00 (2016: $0.55 – $1.25).

Weighted average fair value
The weighted average fair value of options granted 
during the year was nil (2016: nil). 

Option pricing model
The fair value of the equity-settled share options 
granted is estimated as at the date of the grant 
using a Black Scholes Model taking into account 
the terms and conditions upon which the options 
were granted.

Performance Rights
Tranche 1
A long term incentive plan was established on 
18 November 2011 whereby Senior Executives of 
the Group were offered performance rights over 
the ordinary shares of Pro Medicus Limited. The 
performance rights, issued for nil consideration, 
are offered for a 5 year period and vest 4 years 
after granting date on completion of service. The 
performance rights cannot be transferred and will 
not be quoted on the ASX. This long term incentive 
plan includes performance hurdles related to the 
Company and vesting conditions relating to the 
employee’s period of service. 

Tranche 2
A new long term incentive plan was established 
during 2016–17 whereby Senior Executives of 
the Group were offered performance rights over 
the ordinary shares of Pro Medicus Limited. The 
performance rights, issued for nil consideration, 
are offered for a 12 month period and vest 4 years 
after granting date on completion of service. The 
performance rights cannot be transferred and will 
not be quoted on the ASX. This long term incentive 
plan includes performance hurdles related to the 
Company and vesting conditions relating to the 
employee’s period of service. 

During the reporting period, 230,246 performance 
rights had been granted during the year with a 
grant date of 19 October 2016. 90,000 performance 
rights from Tranche 1 vest over 4 years from grant 
date on completion of service. The fair value of 
these 90,000 performance rights at grant date 
was $439,326 ($4.88 per performance right). A 
further 180,492 performance rights from Tranche 
2 vest over 4 years from grant date on completion 
of service. The fair value of these 180,492 
performance rights at grant date was $326,003. 
The remaining 50,000 performance rights vest in 
September 2017 and the fair value of these rights 
was $44,500 ($0.89 per performance right). 

414,375 performance rights were granted in 
prior periods in relation to the 2015–16 ﬁnancial 
performance. 364,375 performance rights vest over 
4 years from grant date on completion of service. 
The fair value of the 364,375 performance rights 
at grant date was $721,463 ($1.98 per performance 
right). The remaining 50,000 performance rights 
vest in September 2016 and the fair value of these 
rights was $44,500 ($0.89 per performance right). 

397,469 performance rights were granted in 
prior periods in relation to the 2014–15 ﬁnancial 
performance. 247,469 performance rights vest over 
4 years from grant date on completion of service. 
The fair value of the 247,469 performance rights at 
grant date was $205,166 ($0.83 per performance 
right). The remaining 150,000 performance rights 
vest in September 2015 and the fair value of these 
rights was $133,737 ($0.89 per performance right). 

633,500 performance rights were granted in 
prior periods in relation to the 2013–14 ﬁnancial 
performance. The performance rights had a grant 
date of 27 March 2014 and vest over 4 years from 
grant date on completion of service. The fair 
value of the performance rights at grant date was 
$434,766 ($0.69 per performance right).

176,375 performance rights were granted in 
prior periods in relation to the 2012–13 ﬁnancial 
year. The performance rights had a grant date 
of 15 September 2013 and vest over 3 years 
on completion of service. The fair value of the 
performance rights at grant date was $44,094 
($0.25 per performance right).

387,000 performance rights were granted in prior 
periods in relation to the 2011–12 ﬁnancial year. The 
performance rights had a grant date of 1 July 2012 
and vest over 3 years on completion of service. The 
fair value of the performance rights at grant date 
was $96,750 ($0.25 per performance right).

50

PRO MEDICUS ANNUAL REPORT 2017

51

NOTES TO FINANCIAL STATEMENTS cont.

Information with respect to the number of performance rights granted under the long term incentive 
scheme is as follows:

Outstanding at the beginning of the year

 − granted

 − forfeited

 − exercised

 − expired

Outstanding at the end of the year

Exercisable at end of year

2017

2016

Number of  
Performance Rights

Number of  
Performance Rights

1,471,719

320,492

—

1,594,344

414,375

—

(226,375)

(537,000)

—

—

1,565,836

1,471,719

—

—

Weighted average remaining contractual life 
The weighted average remaining contractual life for performance rights at 30 June 2017 is 1.8 years (2016: 
2.2 Years) 

Performance rights pricing model (Tranche 1)
The fair value of the equity-settled performance rights granted for Tranche 1 is estimated as at the date 
of the grant using a Black Scholes Model taking into account the terms and conditions upon which the 
performance rights were granted.

The following table lists the inputs to the models used:

Dividend yield

Expected volatility

Risk-free interest rate

Expected life of performance rights

Performance rights exercise price

2017

0.6%

40%

3.30%

2016

1.2%

0%

0%

1 – 4 years

1 – 4 years

$0.00

$0.00

Weighted average share price at measurement date

$0.89 – $4.88

$0.89 – $1.98

Performance rights pricing model (Tranche 2)
The fair value of the equity-settled performance rights granted for Tranche 2 is estimated as at the date 
of the grant using Black Sholes and Monte Carlo Simulation Models taking into account the terms and 
conditions upon which the performance rights were granted.

The following table lists the inputs to the models used:

Dividend yield

Expected volatility

Risk-free interest rate

Expected life of performance rights

Performance rights exercise price

Weighted average share price at measurement date

2017

0.6%

40%

3.30%

1 – 4 years

$0.00

$0.85 – $2.45

18. COMMITMENTS

Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the 
arrangement and requires an assessment of whether the fulﬁlment of the arrangement is dependent on the 
use of a speciﬁc asset or assets and the arrangement conveys a right to use the asset.

Operating lease commitments – Group as lessee
Leases where the lessor retains substantially all the risks and beneﬁts of ownership of the asset are 
classiﬁed as operating leases. 

Operating lease payments are recognised as an expense in the statement of comprehensive income 
on a straight-line basis over the lease term.

The US operations have entered into a commercial property lease for office premises from 1 December 
2015 for a 5 year period. The German operations have entered into a commercial property lease for office 
premises and can give notice to vacate 6 months prior to 31 March each year, whereby they sign into 
another 12 months.

The German operations also have several motor vehicle leases which expire at various stages between 
December 2017 and September 2018.

Future minimum rentals payable under non-cancellable operating lease
as at 30 June are as follows:

 − Within one year

 − After one year and not more than ﬁve years

 − After more than ﬁve years

Consolidated

2017
$’000

350

456

—

806

2016
$’000

356

679

—

1,035

19. EVENTS AFTER THE BALANCE SHEET DATE
On 18 August 2017, the directors of Pro Medicus Limited declared a ﬁnal dividend on ordinary shares 
in respect of the 2017 ﬁnancial year. This dividend comprises a normal dividend of 2.5 cents per share. 
The total amount of the dividend is $2,566,514 which represents a franked dividend of a total of 2.5 cents 
per share. The dividend has not been provided for in the 30 June 2017 ﬁnancial statements.

20. AUDITOR’S REMUNERATION

Amounts received or due and receivable by Ernst & Young (Australia) for:

–   an audit or review of the ﬁnancial report of the Company and any other 

entity in the Group

–  other services in relation to the Company or Group

Amounts received or due and receivable by related practices 
of Ernst & Young (Australia):

–  audit of the ﬁnancial report of Visage Imaging GmbH

–  other services in relation to Visage Imaging GmbH

Consolidated

2017

2016

169,895

55,590

225,485

59,143

48,146

332,774

168,313

46,480

214,793

53,221

8,489

276,503

52

PRO MEDICUS ANNUAL REPORT 2017

53

NOTES TO FINANCIAL STATEMENTS cont.

21. KEY MANAGEMENT PERSONNEL

(a) Compensation for key management personnel

Short-term employee beneﬁts

Post-employment beneﬁts

Other long-term beneﬁts

Share-based payment

Total compensation

Consolidated

2017
$’000

2016
$’000

3,184,596

3,143,575

133,675

18,683

322,321

125,860

177,694

235,939

3,659,275

3,683,068

(b) Loans to Key Management Personnel
No loans are made to Key Management Personnel or staff.

(c) Other transactions and balances with Key Management Personnel
Purchases
During the year lease payments of $169,476 (2016: $169,476) in respect of the Group’s operating premises 
at 450 Swan Street, Richmond were paid to Champagne Properties Pty. Ltd., an entity controlled by S. 
Hupert and A. Hall. Commercial arrangements on an ‘arm’s length basis’ have been determined by an 
independent assessment of rental and lease terms. The current arrangement is on a month to month basis.

22. RELATED PARTY DISCLOSURE

(a) Subsidiaries
The consolidated ﬁnancial statements include the ﬁnancial statements of Pro Medicus Limited and the 
subsidiaries listed in the following table.

Name

Country of incorporation

2017

2016

2017

2016

% Equity interest

Investment $000

Promed (USA) Pty Ltd

PME IP Australia Pty Ltd

Australia

Australia

Visage Imaging (Aust) Pty Ltd

Australia

Pro Medicus (USA) LLC

United States

Visage Imaging Inc

United States

Visage Imaging GmbH

Germany

100

100

100

100

100

100

100

100

100

100

100

100

—

—

—

—

2,389

3,638

6,027

—

—

—

—

2,389

3,638

6,027

(b) Ultimate parent
Pro Medicus Limited is the ultimate Australian parent entity and the ultimate parent of the Group.

(c) Key management personnel
Details relating to KMPs, including remuneration paid, are included in Note 21.

(d) Transactions with related parties
The following table provides the total amount of transactions that were entered into with related parties 
for the relevant ﬁnancial year.

Sales to related 
parties 
$000

Purchases from 
related parties 
$000

Other transactions 
with related parties 
$000

Related party

Consolidated

Champagne Properties Pty Ltd – Rental lease

Champagne Properties Pty Ltd – Rental lease

2017

2016

—

—

169

169

—

—

Terms and conditions of transactions with 
related parties

Sales to and purchases from related parties are 
made in arm’s length transactions both at normal 
market prices and on normal commercial terms.

Outstanding balances at year end are unsecured, 
interest free and payable on demand. 

Entities within the Group that own the intellectual 
property earn a royalty between 30% – 97% from 
the sales made by other entities within the Group.

Development costs undertaken by the German 
operations are reimbursed by the parent on 
commercial terms.

23. FINANCIAL RISK MANAGEMENT OBJECTIVES 
AND POLICIES
The Group’s principal ﬁnancial instruments are cash 
and short-term deposits. 

The main purpose of these ﬁnancial instruments 
is to provide ﬁnance for the Group’s operations. 
The Group has various other ﬁnancial assets and 
liabilities such as trade receivables and trade 
payables, which arise directly from its operations. 
The main risks arising from the Group’s ﬁnancial 
instruments are foreign currency risk, interest risk 
and credit risk. The Board manages each of these 
risks as detailed below.

Foreign currency risk
(i) Functional and presentation currency

Both the functional and presentation currency 
of Pro Medicus Limited and its Australian 
subsidiaries are Australian dollars ($). The United 
States subsidiaries’ functional currency is United 
States Dollars. The subsidiary in Germany has a 
functional currency of Euro. Foreign subsidiaries 
are translated to presentation currency for 
consolidated reporting.

(ii) Transactions and balances

Transactions in foreign currencies are initially 
recorded in the functional currency by applying the 
exchange rates ruling at the date of the transaction. 

Monetary assets and liabilities denominated in 
foreign currencies are retranslated at the rate of 
exchange ruling at the reporting date.

Non-monetary items that are measured in 
terms of historical cost in a foreign currency are 
translated using the exchange rate as at the date 
of the initial transaction. Non-monetary items 
measured at fair value in a foreign currency are 
translated using the exchange rates at the date 
when the fair value was determined.

(iii) Translation of Group Companies’ functional 
currency to presentation currency

The results of the United States and German 
subsidiaries are translated into Australian dollars 
(presentation currency) using an average exchange 
rate for the trading period. Assets and liabilities 
are translated at exchange rates prevailing at 
reporting date.

Exchange variations resulting from the translation 
are recognised in the foreign currency translation 
reserve in equity.

On consolidation, exchange differences arising from 
the translation of the net investments in foreign 
subsidiaries are taken to the foreign currency 
translation reserve. If a foreign subsidiary were sold, 
the proportionate share of exchange differences 
would be transferred out of equity and recognised 
in proﬁt or loss.

The Group has transactional currency exposure, 
which arise from sales made in currencies other 
than the Group’s presentational currency.

Approximately 92% (2016: 76%) of the Group’s 
sales are denominated in currencies other than 
the presentational currency, and these sales 
would be predominately offset by currency 
exposure on costs. Foreign bank accounts have 
also been established, to create a natural hedge 
and reduce the need for regular transfers from the 
presentational currency (AUD) cash holdings. 

At 30 June the Group had the following exposure to US$ foreign currency that is not designated in cash 
ﬂow hedges or recorded in the functional currency of the subsidiary.

Financial assets

Cash and cash equivalents

Financial liabilities

Trade and other payables

Net exposure

Consolidated

2017
$’000

2,804

2,804

—

2,804

2016
$’000

2,114

2,114

—

2,114

55

54

PRO MEDICUS ANNUAL REPORT 2017

NOTES TO FINANCIAL STATEMENTS cont.

23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d) 
At 30 June the Group had the following exposure to CAD$ foreign currency that is not designated in cash 
ﬂow hedges or recorded in the functional currency of the subsidiary

Financial assets

Cash and cash equivalents

Financial liabilities

Trade and other payables

Net exposure

Consolidated

2017
$’000

1,518

1,518

—

1,518

2016
$’000

842

842

—

842

At 30 June the Group had the following exposure to GBP£ foreign currency that is not designated in cash 
ﬂow hedges or recorded in the functional currency of the subsidiary.

Financial assets

Cash and cash equivalents

Financial liabilities

Trade and other payables

Net exposure

Consolidated

2017
$’000

2016
$’000

118

118

—

118

126

126

—

126

At 30 June the Group had the following exposure to EUR€ foreign currency that is not designated in cash 
ﬂow hedges or recorded in the functional currency of the subsidiary.

Financial assets

Cash and cash equivalents

Financial liabilities

Trade and other payables

Net exposure

Consolidated

2017
$’000

3

3

—

3

2016
$’000

600

600

—

600

At 30 June, had the Australian Dollar moved, as illustrated in the table below, with all other variables held 
constant, post-tax proﬁt and equity (excluding retained proﬁts) would have been affected as follows:

Management believe the reporting date risk exposures are representative of the risk exposure inherent in 
the ﬁnancial instruments.

Credit risk

Credit risk arises from the ﬁnancial instruments of the Group, which comprise cash and cash equivalents 
and trade and other receivables. The Group’s exposure to credit risk arises from potential defaults of the 
counter-party, with a maximum exposure equal to the carrying amount of the ﬁnancial assets.

The Group trades only with recognised, credit worthy third parties.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit 
assessment.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s 
exposure to bad debts is not signiﬁcant.

As the Group trades predominantly within the Diagnostic Imaging market there is a concentration of credit 
risk. Given the underlying Government funding support for Radiology in Hospital settings and the Imaging 
Centre and Diagnostic Imaging market, and the commercial successes achieved by the Group to date, 
credit risk is considered to be minimal. 

Cash and cash equivalents are held with several ﬁnancial institutions, with the majority held with the 
Westpac Banking Corporation and Wells Fargo Bank N.A., both AA rated banks.

Interest risk

The Group exposure to market interest rates relates primarily to the company’s cash and cash equivalents.

At reporting date, the Group had the following ﬁnancial assets exposed to Australian Variable interest rate 
risk that are not designated in cash ﬂow hedges:

Cash and Cash equivalents in the Group ($’000) $22,775 (2016: $17,107). 

The Group’s policy is to place cash balances in either 30 day term deposits or commercial bills that earn 
higher interest rates.

At 30 June 2017, if interest rates had moved, as illustrated in the table below, with all other variables held 
constant, post-tax proﬁt and equity (excluding retained proﬁts) would have been affected as follows:

Consolidated

Judgements of reasonably possible movements:

+1% (100 basis points)

–0.5% (50 basis points)

Liquidity risk

Post tax proﬁt
higher/(lower)

Other comprehensive income
higher/(lower)

2017 
$’000

228

(114)

2016 
$’000

171

(86)

2017 
$’000

—

—

2016 
$’000

—

—

The Group has minimal liquidity risk as it has cash reserves of $22.8m, with no borrowings.

These cash reserves are deemed to be adequate and the Board believes they will underpin the ongoing 
growth of the business.

The table below reﬂects all contractually ﬁxed pay-offs for settlement and repayments resulting from 
recognised ﬁnancial liabilities. Cash ﬂows for ﬁnancial liabilities without ﬁxed amount of timing are based 
on the conditions existing at 30 June 2017.

The remaining contractual maturities of the Group’s ﬁnancial liabilities are:

Judgements of reasonably possible movements:

AUD/USD +10%

AUD/USD –5%

AUD/CAD +10%

AUD/CAD –5%

AUD/GBP +10%

AUD/GBP –5%

AUD/EUR +10%

AUD/EUR –5%

56

Post tax proﬁt
higher/(lower)

Other comprehensive income
higher/(lower)

2017 
$’000

(280)

140

(152)

76

(12)

6

—

—

2016 
$’000

(211)

106

(84)

42

(13)

6

(60)

30

2017 
$’000

(69)

34

—

—

—

—

(152)

76

2016 
$’000

(78)

39

—

—

—

—

(156)

78

<30 days

31 – 60 days

61 – 90 days

Over 90 days

TOTAL

PRO MEDICUS ANNUAL REPORT 2017

Consolidated

2017
$’000

752

816

161

1,729

3,458

2016
$’000

1,015

204

189

1,586

2,994

57

NOTES TO FINANCIAL STATEMENTS cont.

24. CONTINGENCIES

Tax related contingencies
Amended assessments from the Australian Taxation Office (ATO)

As a result of the ATO’s program of routine and regular tax audit, the Group anticipates that ATO audits 
may occur in the future. The Group is similarly subject to routine tax audits in certain overseas jurisdictions. 
The ultimate outcome of any future tax audits cannot be determined with an acceptable degree of 
reliability at this time. Nevertheless, the Group believes that it is making adequate provision for its taxation 
liabilities (including amounts shown as deferred and current tax liabilities) and is taking reasonable 
steps to address potentially contentious issues with the ATO. However, there may be an impact to the 
Group of any of the revenue authority investigations results in an adjustment that increases the Group’s 
taxation liabilities.

Ongoing transactions – transfer pricing

The Group has offshore operations in the United States and Germany (Note 22). As disclosed in Note 22, 
there are extra Group transactions, which include the Company and its US and German based subsidiaries 
Visage Imaging Inc. and Visage Imaging GmbH and Pro Medicus Limited. These transactions are on an 
arm’s length basis and are conducted at normal market prices and on normal commercial terms.

Whilst there are no investigations currently in progress, such transactions are not subject to any statutory 
limit in Australia. 

25. PARENT ENTITY INFORMATION

Information relating to Pro Medicus Limited

Current assets

Total assets

Current liabilities

Total liabilities

Issued capital

Retained earnings

Foreign currency translation reserve

Share reserve

Share Buyback Reserve

Total shareholders’ equity

Proﬁt/(loss) of the parent entity

Total comprehensive income of parent entity

2017

$000

26,834

36,211

28,274

29,837

1,937

5,001

(2,208)

1,717

(73)

6,374

(13)

(13)

2016

$000

28,366

37,465

27,826

29,312

1,302

8,088

(2,341)

1,104

—

8,153

(607)

(607)

The parent entity has not entered into any guarantees in relation to the debts of its subsidiaries. There are 
no contingent liabilities held against the parent entity. The parent entity does not have any contractual 
commitments for the acquisition of property, plant and equipment.

26. OTHER ACCOUNTING POLICIES

(a) New accounting standards and interpretations 
Changes in Accounting policy and disclosures

The accounting policies adopted are consistent with those of the previous ﬁnancial year except as follows:

The Group has adopted the following new and amended Australian Accounting Standards and AASB 
Interpretations as of 1 July 2016. Adoption of these standards did not have any effect on the ﬁnancial 
position or performance of the Group. The necessary disclosures have been updated to reﬂect amended 
accounting standards.

Pronouncement

Title

AASB 2014-4

Clariﬁcation of Acceptable Methods of Depreciation and Amortisation 
(Amendments to AASB 116 and AASB 138)

Application date 
of standard*

Application date 
for Group*

1 January 2016

1 July 2016

The amendments clarify the principle in AASB 116 Property Plant and 
Equipment and AASB 138 Intangible Assets that revenue reﬂects a 
pattern of economic beneﬁts that are generated from operating a 
business (of which the asset is part) rather than the economic beneﬁts 
that are consumed through use of the asset. As a result, the ration of 
revenue generated to total revenue expected to be generated cannot 
be used to depreciate property, plant and equipment and may only be 
used in very limited circumstances to amortise intangible assets.

AASB 2015-1

Amendments to Australian Accounting Standards – Annual 
Improvements to Australian Accounting Standards 2012–2014 Cycle 

1 January 2016

1 July 2016

The amendments clarify certain requirements in:
•  AASB 5 Non-current Assets Held for Sale and Discontinued 

Operations - Changes in methods of disposal

•  AASB 7 Financial Instruments: Disclosures – sservicing contracts; 
applicability on the amendments to AASB 7 to condensed interim 
ﬁnancial statements

•  AASB 119 Employee Beneﬁts – regional market issue regarding 

discount rate 

•  AASB 134 Interim Financial Reporting – disclosure of information 

‘elsewhere in the interim ﬁnancial report’

AASB 2015-2

Amendments to Australian Accounting Standards – Disclosure 
Initiative: Amendments to AASB 101

1 January 2016

1 July 2016

The Standard amends AASB 101 Presentation of Financial Statements 
to clarify existing presentation and disclosure requirements and to 
ensure entities are able to use judgement when applying the Standard 
in determining what information to disclose, where and in what order 
information is presented in their ﬁnancial; statements. For example, 
the amendments make clear that materiality applies to the whole of 
ﬁnancial statements and that inclusion of immaterial information can 
inhibit the usefulness of ﬁnancial disclosures.

58

PRO MEDICUS ANNUAL REPORT 2017

59

NOTES TO FINANCIAL STATEMENTS cont.

(b) Accounting Standards and Interpretation issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are 
not yet effective have not been adopted by the Group for the annual reporting period ending 30 June 
2017. These are outlined in the table below.

Pronouncement

Title

Summary

Application 
date of 
standard*

Impact on 
Group ﬁnancial 
report

Application 
date for 
Group*

1 July 2018

The Group 
is currently 
assessing 
the impact on 
the change in 
standard.

AASB 9

Financial 
Instruments

AASB 9 replaces AASB 139 Financial Instruments: 
Recognition and Measurement. 

1 January 
2018

Except for certain trade receivables, an entity 
initially measures a ﬁnancial asset at its fair value 
plus, in the case of a ﬁnancial asset not at fair value 
through proﬁt or loss, transaction costs.

Debt instruments are subsequently measured at 
fair value through proﬁt or loss (FVTPL), amortised 
cost, or fair value through other comprehensive 
income (FVOCI), on the basis of their contractual 
cash ﬂows and the business model under which 
the debt instruments are held.

There is a fair value option (FVO) that allows 
ﬁnancial assets on initial recognition to be 
designated as FVTPL if that eliminates or 
signiﬁcantly reduces an accounting mismatch.

Equity instruments are generally measured at 
FVTPL. However, entities have an irrevocable 
option on an instrument-by-instrument basis to 
present changes in the fair value of non-trading 
instruments in other comprehensive income (OCI) 
without subsequent reclassiﬁcation to proﬁt or loss. 

For ﬁnancial liabilities designated as FVTPL using 
the FVO, the amount of change in the fair value 
of such ﬁnancial liabilities that is attributable 
to changes in credit risk must be presented in 
OCI. The remainder of the change in fair value 
is presented in proﬁt or loss, unless presentation 
in OCI of the fair value change in respect of the 
liability’s credit risk would create or enlarge an 
accounting mismatch in proﬁt or loss.

All other AASB 139 classiﬁcation and measurement 
requirements for ﬁnancial liabilities have been 
carried forward into AASB 9, including the 
embedded derivative separation rules and the 
criteria for using the FVO.

The incurred credit loss model in AASB 139 has 
been replaced with an expected credit loss model 
in AASB 9.

The requirements for hedge accounting have been 
amended to more closely align hedge accounting 
with risk management, establish a more principle-
based approach to hedge accounting and address 
inconsistencies in the hedge accounting model in 
AASB 139.

Pronouncement

Title

Summary

Application 
date of 
standard*

Impact on 
Group ﬁnancial 
report

Application 
date for 
Group*

AASB 15

Revenue from 
Contracts with 
Customers

AASB 2016-5

Amendments 
to Australian 
Accounting 
Standards – 
Classiﬁcation 
and 
Measurement 
of Share-based 
Payment 
Transactions

AASB 
Interpretation 22

Foreign 
Currency 
Transactions 
and Advance 
Consideration

1 July 2017

1 January 
2018

The Group 
is currently 
undertaking 
an impact 
assessment in 
relation to the 
requirements 
of AASB 15. 
The assessment 
is currently 
on-going and 
the Group has 
not reached a 
determination 
or conclusion 
with respect 
to the impact 
of the new 
accounting 
standard.

1 July 2017

1 January 
2018

The Group 
will continue 
to assess the 
impact on 
the change in 
standard, if any

1 January 
2018

No impact

1 July 2017

AASB 15 replaces all existing revenue requirements 
in Australian Accounting Standards (AASB 111 
Construction Contracts, AASB 118 Revenue, AASB 
Interpretation 13 Customer Loyalty Programmes, 
AASB Interpretation 15 Agreements for the 
Construction of Real Estate, AASB Interpretation 
18 Transfers of Assets from Customers and AASB 
Interpretation 131 Revenue – Barter Transactions 
Involving Advertising Services) and applies to all 
revenue arising from contracts with customers, 
unless the contracts are in the scope of other 
standards, such as AASB 117 (or AASB 16 Leases, 
once applied).

The core principle of AASB 15 is that an entity 
recognises revenue to depict the transfer of 
promised goods or services to customers in an 
amount that reﬂects the consideration to which an 
entity expects to be entitled in exchange for those 
goods or services. An entity recognises revenue in 
accordance with the core principle by applying the 
following steps:

•  Step 1: Identify the contract(s) with a customer

•  Step 2 : Identify the performance obligations 

in the contract

•  Step 3: Determine the transaction price

•  Step 4: Allocate the transaction price to the 

performance obligation in the contract

•  Step 5: Recognise revenue when (or as) the 
entity satisﬁes a performance obligation.

This Standard amends AASB 2 Share-based 

Payment, clarifying how to account for certain 
types of share-based payment transactions. 
The amendments provide requirements on 
the accounting for:

•  The effects of vesting and non-vesting 

conditions on the measurement of cash-settled 
share-based payments

•  Share-based payment transactions with a 
net settlement feature for withholding tax 
obligations

•  a modiﬁcation to the terms and conditions 
of a share-based payment that changes the 
classiﬁcation of the transaction from cash-
settled to equity-settled.

The Interpretation clariﬁes that in determining the 
spot exchange rate to use on initial recognition of 
the related asset, expense or income (or part of 
it) on the derecognition of a non-monetary asset 
or non- monetary liability relating to advance 
consideration, the date of the transaction is the 
date on which an entity initially recognises the 
non-monetary asset or non-monetary liability 
arising from the advance consideration. If there are 
multiple payments or receipts in advance, then the 
entity must determine a date of the transactions for 
each payment or receipt of advance consideration.

60

PRO MEDICUS ANNUAL REPORT 2017

61

(ii) Loans and receivables
Loans and receivables including loan notes and loans to key management personnel are non-derivative 
ﬁnancial assets with ﬁxed or determinable payments that are not quoted in an active market. Such assets 
are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in 
proﬁt or loss when the loans and receivables are derecognised or impaired. These are included in current 
assets, except for those with maturities greater than 12 months after reporting date, which are classiﬁed 
as non-current.

(e) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:

•  when the GST incurred on a purchase of goods and services is not recoverable from the taxation 

authority, in which case the GST is recognised as part of the cost of acquisition of the asset or of the 
expense item as applicable; and

•  receivables and payables are stated with the amount of GST included.

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

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

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, 
the taxation authority.

(f) Comparatives
Where necessary, comparatives have been reclassiﬁed and repositioned for consistency with current year 
disclosures.

NOTES TO FINANCIAL STATEMENTS cont.

Pronouncement

Title

Summary

Application 
date of 
standard*

Impact on 
Group ﬁnancial 
report

Application 
date for 
Group*

AASB 16

Leases

1 July 2018

AASB 16 requires lessees to account for all 
leases under a single on- balance sheet model in 
a similar way to ﬁnance leases under AASB 117 
Leases. The standard includes two recognition 
exemptions for lessees – leases of ’low-value’ assets 
(e.g., personal computers) and short-term leases 
(i.e., leases with a lease term of 12 months or less). 
At the commencement date of a lease, a lessee 
will recognise a liability to make lease payments 
(i.e., the lease liability) and an asset representing 
the right to use the underlying asset during the 
lease term (i.e., the right-of-use asset).

Lessees will be required to separately recognise 
the interest expense on the lease liability and the 
depreciation expense on the right-of-use asset.

Lessees will be required to remeasure the lease 
liability upon the occurrence of certain events 
(e.g., a change in the lease term, a change in future 
lease payments resulting from a change in an 
index or rate used to determine those payments). 
The lessee will generally recognise the amount 
of the remeasurement of the lease liability as an 
adjustment to the right-of-use asset.

Lessor accounting is substantially unchanged 
from todays’ accounting under AASB 117. Lessors 
will continue to classify all lease using the 
same classiﬁcation principle as in AASB 117 and 
distinguish between two types of leases: operating 
and ﬁnance leases.

1 January 
2019

The Group 
is currently 
assessing the 
impact on 
the change 
in standard. 
However an 
asset and 
liability will be 
required to be 
recorded on 
the statement 
of ﬁnancial 
position for 
operating 
leases. There 
will be a further 
shift in the 
classiﬁcation 
of expenses 
between 
operating 
lease expense, 
depreciation 
expense and 
a ﬁnancing 
charge. 

26. OTHER ACCOUNTING POLICIES (cont’d)

(c) Derivative ﬁnancial instruments and hedging
The Group has not transacted any derivative ﬁnancial instruments to hedge its risk associated foreign 
currency and interest rate ﬂuctuations. 

(d) Investments and other ﬁnancial assets 
Investments and ﬁnancial assets in the scope of AASB 139 Financial Instruments: Recognition and 
Measurement are categorised as either ﬁnancial assets at fair value through proﬁt or loss, loans and 
receivables, held-to-maturity investments, or available-for-sale ﬁnancial assets. The classiﬁcation depends 
on the purpose for which the investments were acquired or originated. Designation is re-evaluated at 
each reporting date, but there are restrictions on reclassifying to other categories. When ﬁnancial assets 
are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through 
proﬁt or loss, directly attributable transaction costs.

Recognition and derecognition
All regular way purchases and sales of ﬁnancial assets are recognised on the trade date i.e., the date 
that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of 
ﬁnancial assets under contracts that require delivery of the assets within the period established generally 
by regulation or convention in the market place. Financial assets are derecognised when the right to 
receive cash ﬂows from the ﬁnancial assets has expired or when the entity transfers substantially all the 
risks and rewards of the ﬁnancial assets. If the entity neither retains nor transfers substantially all of the 
risks and rewards, it derecognises the asset if it has transferred control of the assets.

Subsequent measurement
(i) Financial assets at fair value through proﬁt or loss
Financial assets classiﬁed as held for trading are included in the category “ﬁnancial assets at fair value 
through proﬁt or loss”. Financial assets are classiﬁed as held for trading if they are acquired for the 
purpose of selling in the near term with the intention of making a proﬁt. Derivatives are also classiﬁed as 
held for trading unless they are designated as effective hedging instruments. Gains or losses on ﬁnancial 
assets held for trading are recognised in proﬁt or loss and the related assets are classiﬁed as current assets 
in the statement of ﬁnancial position.

62

PRO MEDICUS ANNUAL REPORT 2017

63

DIRECTORS DECLARATION

INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

In accordance with a resolution of the directors of Pro Medicus Limited, I state that:

(1) In the opinion of the directors:

(a)   the ﬁnancial statements, notes and the additional disclosures included in the directors’ report 
designated as audited, of the consolidated entity are in accordance with the Corporations Act 
2001, including:

(i)   giving a true and fair view of the consolidated entity’s ﬁnancial position as at 30 June 2017 

and of the performance for the year ended on that date; and 

(ii)   complying with Accounting Standards (including the Australian Accounting Interpretations) 

and the Corporations Regulations 2001; and

(b)   there are reasonable grounds to believe that the consolidated entity will be able to pay its debts 

as and when they become due and payable.

Ernst & Young 
8 Exhibition Street  
Melbourne VIC 3000 Australia 
GPO Box 67 Melbourne VIC 3001 

Tel: +61 3 9288 8000 
Fax: +61 3 8650 7777 
ey.com/au 

Independent Auditor’s Report to the Members of Pro Medicus Limited 

Report on the Audit of the Financial Report 

(c)   the ﬁnancial statements and notes comply with International Financial Reporting Standards 

Opinion 

(IFRS) as disclosed in Note 2(b).

(2) This declaration has been made after receiving the declarations required to be made to the directors 
in accordance with section 295A of the Corporations Act 2001 for the ﬁnancial year ended 30 June 2017.

On behalf of the Board

P T Kempen 
Chairman

Melbourne, 18 August 2017

We have audited the financial report of Pro Medicus Limited (the Company) and its subsidiaries 
(collectively the Group), which comprises the consolidated statement of financial position as at 30 
June 2017, the consolidated statement of comprehensive income, consolidated statement of changes 
in equity and consolidated statement of cash flows for the year then ended, notes to the financial 
statements, including a summary of significant accounting policies, and the directors declaration. 

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations 
Act 2001, including: 

a) 

b) 

giving a true and fair view of the consolidated financial position of the Group as at 30 June 
2017 and of its consolidated financial performance for the year ended on that date; and 

complying with Australian Accounting Standards and the Corporations Regulations 2001. 

Basis for Opinion 

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under 
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial 
Report section of our report. We are independent of the Group in accordance with the auditor 
independence requirements of the Corporations Act 2001 and the ethical requirements of the 
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional 
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also 
fulfilled our other ethical responsibilities in accordance with the Code.  

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 
for our opinion. 

Key Audit Matters 

Key audit matters are those matters that, in our professional judgement, were of most significance in 
our audit of the financial report of the current year. These matters were addressed in the context of 
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide 
a separate opinion on these matters. For each matter below, our description of how our audit 
addressed the matter is provided in that context. 

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the 
Financial Report section of our report, including in relation to these matters. Accordingly, our audit 
included the performance of procedures designed to respond to our assessment of the risks of 
material misstatement of the financial report. The results of our audit procedures, including the 
procedures performed to address the matters below, provide the basis for our audit opinion on the 
accompanying financial report. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

64

PRO MEDICUS ANNUAL REPORT 2017

65

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

1.  Capitalisation of development costs 

2.  Impairment of intangible assets  

Why significant 

How our audit addressed the key audit matter 

Why significant 

How our audit addressed the key audit matter 

The Group develops medical software related 
to radiology systems. Development costs are 
capitalised and presented as intangible assets 
on the consolidated statement of financial 
position.  

The carrying value of intangible assets as at 
30 June 2017 was $15.5 million (33% of total 
assets). 

Capitalised development costs represents a 
key audit matter as product development is 
core to the Group’s operations and it is the 
key asset on the Group’s consolidated 
statement of financial position. This involves 
judgement to determine whether the costs 
meet the capitalisation criteria in accordance 
with Australian Accounting Standard - AASB 
138 Intangible Assets. 

The measurement of capitalised development 
costs is based on the time and overhead costs 
associated with individuals employed by the 
Group for the specific purpose of developing 
software. Capitalised development costs are 
amortised once the product is available for 
use. Capitalised development costs are 
amortised over a useful life of five years.  

Refer to Note 13 to the financial report for 
disclosure relating to capitalised program 
development costs. 

Our audit procedures assessed the existence and 
measurement of capitalised development costs 
and the related disclosures. In performing our 
assessment, we: 

►  Assessed key measurement inputs, including 
salaries and overhead costs, used in the 
Group’s capitalisation model which 
determines the amount of capitalised 
development costs. 

►  Tested a sample of overhead costs capitalised 
within the capitalisation model to assess 
whether these costs were appropriately 
capitalised in accordance with Australian 
Accounting Standard – AASB 138 Intangible 
Assets. 

►  Tested a sample of employee costs recorded 
within the capitalisation model to employee 
timesheets and enquired with the Group 
regarding the development activities that 
were undertaken. This included an 
assessment of whether a sample of 
employees were directly involved in 
developing software and not maintenance (as 
maintenance costs are not eligible for 
capitalisation). 

►  Assessed the useful life and amortisation rate 

allocated to capitalised development costs.  

►  Assessed the consistency of the capitalisation 

methodology applied by the Group in 
comparison to prior reporting periods. 

►  Assessed the adequacy of the disclosures 

included in Note 13.  

As at 30 June 2017 the Group held $15.5 
million (or 33% of total assets) in intangible 
assets, predominately comprising capitalised 
development costs recognised in accordance 
with Australian Accounting Standard - AASB 
138 Intangible Assets.  

As explained in Note 13 to the financial 
report, intangible assets are tested by the 
Group for impairment annually. 

The directors’ assessment of the recoverable 
amounts has been determined based on a 
value in use model referencing discounted 
cash flows of the RIS, Visage PACS, and 
Visage Magic Web cash generating units 
(CGU). This impairment model contains 
estimates and significant judgements 
regarding future cash flow projections and, 
therefore, the recoverable amount of 
intangible assets has been identified as a key 
audit matter. 

Our audit procedures assessed the recoverable 
amount of intangible assets and the related 
disclosures. In performing our assessment, we 
involved our valuation specialists and: 

►  Assessed the appropriateness of the 

valuation methodologies. 

►  Assessed the incorporation of the Board 

approved 2018 cash flows into the Group’s 
impairment analysis. 

►  Evaluated the key inputs and assumptions 

including cash flows, discount rates and 
growth rates adopted in the valuation of the 
recoverable amounts. In doing so, we 
assessed the Group’s ability to achieve 
historical forecasts and assessed the 
assumptions with respect to forecasted 
future revenues and the probability of 
achieving such revenues.  

►  Assessed key assumptions including cash 

flow projections and discount rate to external 
market data.  

►  Assessed the adequacy of the disclosures 
made in the financial report per those 
required by Australian Accounting Standard - 
AASB 136 Impairment of Assets. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

66

67

PRO MEDICUS ANNUAL REPORT 2017 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

3.  Revenue recognition 

Why significant 

How our audit addressed the key audit matter 

The Group generated $31.6 million in revenue 
across three jurisdictions for the year ended 
30 June 2017.  

Our audit procedures assessed the recognition of 
revenue and the related disclosures. In performing 
our assessment, we: 

Revenue recognition is deemed a key audit 
matter as it represents a key measurement of 
the Group’s performance and demonstrates 
the growth of the Group. 

Revenue is predominately generated from 
pay-per-view contracts which are driven by 
the number of image views undertaken by the 
customer. 

Revenue from the installation and ongoing 
support of software applications and services 
is recognised by reference to the stage of 
contract completion.  

Service revenue is recognised over the term 
of the contract.  

Refer to Note 4 to the financial report for 
disclosure relating to revenue recognition.  

►  Reviewed new significant customer contracts. 

►  Tested whether the recognition of revenue 
was in accordance with the customer 
contracts by testing a sample of revenue 
transactions to contracts and customer 
invoices.  

►  Analytically reviewed revenue recognised to 

compare and contrast the revenue 
recognition profile between reporting 
periods, including on a customer, product and 
geographical basis.  

►  Tested a sample of revenue transactions 
recognised prior to and after year end, to 
assess whether revenue was recognised in 
the appropriate period. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

68

Information Other than the Financial Report and Auditor’s Report Thereon 

The directors are responsible for the other information. The other information comprises the 
information included in the Group’s 2017 Annual Report other than the financial report and our 
auditor’s report thereon. We obtained the Directors’ Report and the Corporate Governance Statement 
that are to be included in the Annual Report, prior to the date of this auditor’s report, and we expect 
to obtain the remaining sections of the Annual Report after the date of this auditor’s report.  

Our opinion on the financial report does not cover the other information and we do not and will not 
express any form of assurance conclusion thereon. 

In connection with our audit of the financial report, our responsibility is to read the other information 
and, in doing so, consider whether the other information is materially inconsistent with the financial 
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.  

If, based on the work we have performed on the other information 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. 

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 Group’s ability to 
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the 
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease 
operations, or have no realistic alternative but to do so. 

Auditor's Responsibilities for the Audit of the Financial Report 

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that 
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an 
audit conducted in accordance with the Australian Auditing Standards will always detect a material 
misstatement when it exists. Misstatements can arise from fraud or error and are considered material 
if, individually or in the aggregate, they could reasonably be expected to influence the economic 
decisions of users taken on the basis of this financial report. 

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional 
judgment and maintain professional scepticism throughout the audit. We also: 

 

Identify and assess the risks of material misstatement of the financial report, whether due to 
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit 
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not 
detecting a material misstatement resulting from fraud is higher than for one resulting from 
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the 
override of internal control. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

69

PRO MEDICUS ANNUAL REPORT 2017 
 
 
 
 
 
 
 
 
 
 
 
 
INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

INDEPENDENT AUDIT REPORT
FOR THE YEAR ENDED 30 JUNE 2017

 

 

 

 

 

Obtain an understanding of internal control relevant to the audit in order to design audit 
procedures that are appropriate in the circumstances, but not for the purpose of expressing an 
opinion on the effectiveness of the Group’s internal control.  

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting 
estimates and related disclosures made by the directors. 

 Conclude on the appropriateness of the directors’ use of the going concern basis of accounting 
and, based on the audit evidence obtained, whether a material uncertainty exists related to 
events or conditions that may cast significant doubt on the Group’s ability to continue as a going 
concern. If we conclude that a material uncertainty exists, we are required to draw attention in 
our auditor’s report to the related disclosures in the financial report or, if such disclosures are 
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up 
to the date of our auditor’s report. However, future events or conditions may cause the Group 
to cease to continue as a going concern.  

Evaluate the overall presentation, structure and content of the financial report, including the 
disclosures, and whether the financial report represents the underlying transactions and events 
in a manner that achieves fair presentation. 

Obtain sufficient appropriate audit evidence regarding the financial information of the entities 
or business activities within the Group to express an opinion on the financial report. We are 
responsible for the direction, supervision and performance of the Group audit. We remain solely 
responsible for our audit opinion. 

We communicate with the directors regarding, among other matters, the planned scope and timing of 
the audit and significant audit findings, including any significant deficiencies in internal control that we 
identify during our audit. 

We also provide the directors with a statement that we have complied with relevant ethical 
requirements regarding independence, and to communicate with them all relationships and other 
matters that may reasonably be thought to bear on our independence, and where applicable, related 
safeguards. 

From the matters communicated to the directors, we determine those matters that were of most 
significance in the audit of the financial report of the current year and are therefore the key audit 
matters. We describe these matters in our auditor’s report unless law or regulation precludes public 
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter 
should not be communicated in our report because the adverse consequences of doing so would 
reasonably be expected to outweigh the public interest benefits of such communication. 

Report on the Audit of the Remuneration Report 

Opinion on the Remuneration Report 

We have audited the Remuneration Report included in pages 7 to 13 of the directors' report for the 
year ended 30 June 2017. 

In our opinion, the Remuneration Report of Pro Medicus Limited for the year ended 30 June 2017, 
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. 

Ernst & Young 

Paul Gower 
Partner 
Melbourne 

18 August 2017 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

70

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

71

PRO MEDICUS ANNUAL REPORT 2017 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASX ADDITIONAL INFORMATION

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this 
report is as follows. 

(a) Distribution of equity securities

The number of shareholders, by size of holding, in each class of share are:

Ordinary shares
Number of holders

Number of shares

1  – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and Over

1,193

1,334

326

302

45

685,509

3,450,797

2,572,929

8,385,510

87,565,804

CORPORATE GOVERNANCE STATEMENT

FOR THE YEAR ENDED 30 JUNE 2017

The Board of Directors of Pro Medicus Limited is responsible for the corporate governance of the entity 
having regard to the ASX Corporate Governance Council (CGC) published guidelines as well as its 
corporate governance principles and recommendations. The Board guides and monitors the business and 
affairs of Pro Medicus Limited on behalf of the shareholders by whom they are elected and to whom they 
are accountable.

The table below summaries the Group’s compliance with the CGC’s recommendations.

Recommendation

Comply
Yes/No

Reference/
explanation

The number of shareholders holding less than a marketable parcel are:

69

1,445

1.1

A listed entity should disclose:

Yes

Page 77

3,200

102,660,549

Principle 1 – Lay solid foundations for management and oversight

(b) Twenty largest shareholders

Listed ordinary shares

The names of the twenty largest holders of quoted shares are:

Number of shares

Percentage  
of ordinary shares

1 Dr S Hupert (multiple shareholdings)

2 Mr A Hall (multiple shareholdings)

3 J P Morgan Nominees Australia Limited

4 UBS Nominees Pty Ltd

5 Citicorp Nominees Pty Ltd

6 National Nominees Limited

7 BNP Paribas Noms Pty Ltd

8 Mr Bram Vander Jagt & Mrs Maaike Vander Jagt

9 One Managed Investment Funds Limited

10 HSBC Custody Nominees (Australia) Limited – A/C No 2

11 Grain Exporters (Australia) Pty Ltd

12 Mr Peter Terence Kempen & Mrs Elaine Margaret Kempen 

(multiple shareholdings)

13 HSBC Custody Nominees (Australia) Limited

14 Mr Danny Tauber

15 Mr Kenneth John Vander Jagt & Mrs Tanya Vander Jagt

16 Mr John Charles Plummer

17 Mr Roderick Lyle (multiple shareholdings)

18 Mr Stephen Geoffrey Wilson &  Ms Denise Adele Prandi

19 Mr Evan Philip Clucas and Ms Leanne Jane Weston

20 Mr Michael Wu

30,107,660

30,068,500

6,196,601

3,731,531

3,183,055

2,275,880

1,468,282

900,000

878,776

878,756

720,297

678,082

532,900

406,412

403,600

365,000

340,000

337,537

328,980

275,912

29.33%

29.29%

6.04%

3.63%

3.10%

2.22%

1.43%

0.88%

0.86%

0.86%

0.70%

0.66%

0.52%

0.40%

0.39%

0.36%

0.33%

0.33%

0.32%

0.27%

(c) Substantial shareholders
The names of substantial shareholders who have notiﬁed the Company in accordance with section 671B 
of the Corporations Law are:

84,077,761

81.90%

S. Hupert

A Hall

(d) Voting rights
All ordinary shares carry one vote per share without restriction.

Number of shares

30,107,660

30,068,500

a)  roles and responsibilities of its board and management; and 

b)   those matters expressively reserved to the board and those delegated 

to management.

1.2 A listed entity should:

a)  undertake appropriate checks before appointing a person, or putting 
forward to security holders a candidate for election, as a director; and 

b)  provide security holders with all material information in its possession 
relevant to a decision on whether or not to elect or re-elect a director.

Yes

Page 77

1.3 A listed entity should have written agreement with each director and senior 

executive setting out the terms of their agreement.

1.4

The company secretary of a listed entity should be accountable directly to 
the board, through the chair, on all matters to do with the proper functioning 
of the board.

No

Yes

Page 77

Page 77

1.5 A listed entity should:

Yes 

Page 77

a)  have a diversity policy which includes requirements for the board or 
a relevant committee of the board to set measurable objectives for 
achieving gender diversity and to assess annually both the objectives 
and the entity’s progress in achieving them;

b)  disclose that policy or a summary

c)  disclose as at the end of each reporting period the measurable objectives 
for achieving gender diversity set by the board or a relevant committee of 
the board in accordance with the entity’s diversity policy and its progress 
towards achieving them, and either:

1)   the respective proportions of men and women on the board, in senior 
executive positions and across the whole organisation (including how 
the entity has deﬁned “senior executive” for these purposes); or

2)   if the entity is a “relevant employer” under the Workplace Gender 

Equality Act, the entity’s most recent “Gender Equality Indicators”, 
as deﬁned in and published under that Act.

1.6 A listed entity should:

Yes

Page 77

a)  have and disclose a process for periodically evaluation the performance 

of the board, its committees and individual directors; and 

b)  disclose, in relation to each reporting period, whether a performance 
evaluation was undertaken in the reporting period in accordance with 
that process.

1.7 A listed entity should:

Yes

Page 77

a)  have and disclose a process for periodically evaluating the performance 

of its senior executives; and

b)  disclose, in relation to each reporting period, whether a performance 
evaluation was undertaken in the reporting period in accordance with 
that process.

72

PRO MEDICUS ANNUAL REPORT 2017

73

 
 
Comply
Yes/No

Reference/
explanation

No

Page 78

Recommendation

Principle 2 – Structure the board to add value

2.1

The board of a listed entity should:

a)  have a nomination committee which:

1)   has at least three members, a majority of whom are independent 

directors; and

2)  is chaired by an independent directors, and disclose

  3)  the charter of the committee;

  4)  the members of the committee; and 

  5)   as at the end of each reporting period, the number of times the 

committee met throughout the period and the individual attendances 
of the members at this meetings; or

b)  if it does not have a nomination committee, disclose the fact and the 
process it employs to address board succession issues and to ensure 
that the board has the appropriate skills, knowledge, experience, 
independence and diversity to enable it to discharge its duties and 
responsibilities effectively.

2.2 A listed entity should have and disclose a board skills matrix setting out the 

Yes

Directors Report

mix of skills and diversity that the board currently has or is looking to achieve 
in its membership.

2.3 A listed entity should disclose:

Yes

Page 76

a)  the names of the directors considered by the board to be independent 

directors; 

b)  if a director has an interest, position, association or relationship of the 

type described in Box 2.3 but the board is of the opinion that it does not 
compromise the independence of the director, the nature of the interest, 
position, association or relationship in question and an explanation of why 
the board is of that opinion; and 

c)  the length of service of each director. 

2.4 A majority of the board of a listed entity should be independent directors.

2.5

The chair of the board of a listed entity should be an independent directors 
and, in particular, should not be the same person as the CEO of the entity.

2.6 A listed entity should have a program for inducting new directors and 

provide appropriate professional development opportunities for directors to 
develop and maintain the skills and knowledge needed to perform their role 
as a directors effectively.

Principle 3 – Act ethically and responsibly

3.1 A listed entity should:

a)  have a code of conduct for its directors, senior executives and employees; 

and 

b)  disclose that code or a summary of it.

Principle 4 – Safeguard integrity in corporate reporting

4.1

The board of a listed entity should:

a)  have an audit committee which:

1)   has at least three members, all of whom are non-executive directors 

and a majority of whom are independent directors; and

2)   is chaired by an independent director, who is not the chair of the 

board; and disclose

  3)  the charter of the committee

  4)   the relevant qualiﬁcations and experience of the members of the 

committee; and

  5)   in relation to each reporting period, the number of times the 

committee met throughout the period and the individual attendances 
of the members at those meetings; or

b)  if it does not have an audit committee, disclose that fact and the 

processes it employs that independently verify and safeguard the 
integrity of its corporate reporting, including the processes for the 
appointment and removal of external auditor and the rotation of the audit 
engagement partner.

Yes

Yes

Yes

Page 76

Page 76

Page 76

Yes

Page 79

No

Page 78

Recommendation

4.2

The board of a listed entity should, before it approves the entity’s ﬁnancial 
statements for a ﬁnancial period, receive from its CEO and CFO a declaration 
that, in their opinion, the ﬁnancial records of the entity have been properly 
maintained and that the ﬁnancial statements comply with the appropriate 
accounting standards and give a true and fair view of the ﬁnancial position 
and performance of the entity and that the opinion has been formed on 
the basis of a sound system of risk management and internal control which 
is operating effectively.

Comply
Yes/No

Yes

Reference/
explanation

Page 79

4.3 A listed entity that has an AGM should ensure that its external auditor 

Yes

Page 79

attends its AGM and is available to answer questions from security holders 
relevant to the audit.

Principle 5 – Make timely and balanced disclosure

5.1 A listed entity should:

Yes

Page 79

a)  have a written policy for complying with its continuous disclosure 

obligations under the Listing Rules; and

b)  disclose that policy or a summary of it.

Principle 6 – Respect the rights of security holders

6.1 A listed entity should provide information about itself and its governance 

to investors via its website.

6.2 A listed entity should design and implement an investor relations program 

to facilitate effective two-way communication with investors.

6.3 A listed entity should disclose policies and progress it has in place to 
facilitate and encourage participation at meetings of security holders.

6.4 A listed entity should give security holders the option to receive 

communications from, and send communications to, the entity and its 
security registry electronically.

Principle 7 – Recognise and manage risk

7.1

The board of a listed entity should:

Yes

Yes

Yes

Yes

Page 79

Page 79

Page 79

Page 79

No

Page 80

a)  have a committee or committees to oversee risk, each of which:

1)   has at least three members, a majority of whom are independent 

directors; and

2)  is chaired by an independent director; and disclose

  3)  the charter of the committee

  4)  the members of the committee; and

  5)   as at the end of each reporting period, the number of times the 

committee met throughout the period and the individual attendances 
of the members at those meetings; or

b)  if it does not have a risk committee or committees that satisfy (a) above, 

disclose that fact and the processes it employs for overseeing the entity’s 
risk management framework.

7.2

The board or a committee of the board should:

Yes

Page 80

a)  review the entity’s risk management framework at least annually to satisfy 

itself that it continues to be sound; and

b)  disclose, in relation to each reporting period, whether such a review has 

taken place.

7.3 A listed entity should disclose:

No

Page 80

a)  if it has an internal audit function, how the function is structured and what 

role it performs; or

b)  if it does not have an internal audit function, that fact and the processes 
it employs for evaluation and continually improving effectiveness of its 
risk management and internal control processes.

7.4 A listed entity should disclose whether it has any material exposure 

Yes

Page 80

to economic, environmental and social sustainability risks and, if it does, 
how it manages or intends to manage those risks.

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PRO MEDICUS ANNUAL REPORT 2017

75

 
 
 
 
 
 
Recommendation

Principle 8 – Remunerate fairly and responsibly

8.1

The board of a listed entity should:

a)  have a remuneration committee which:

1)   has at least three members, a majority of whom are independent 

directors; and

2)  is chaired by an independent director; and disclose

  3)  the charter of the committee

  4)  the members of the committee; and

  5)   as at the end of each reporting period, the number of times the 

committee met throughout the period and the individual attendances 
of the members at those meetings; or

if it does not have a remuneration committee, disclose that fact and the 
processes it employs for setting the level and composition of remuneration 
for directors and senior executives and ensuring that such remuneration is 
appropriate and not excessive.

8.2 A listed entity should separately disclose its policies and practices regarding 
the remuneration of non-executive directors and the remuneration of 
executive directors and other senior executives.

8.3 A listed entity which has an equity-based remuneration scheme should:

a)  have a policy on whether participants are permitted to enter into 

transactions (whether through the use of derivatives or otherwise) which 
limit the economic risk of participating in the scheme; and

b)  disclose that policy or a summary of it.

Comply
Yes/No

Reference/
explanation

No

Page 78

Yes

No

Page 78

Page 78

Pro Medicus Limited’s corporate governance 
practices were in place throughout the year ended 
30 June 2017.

Structure of the Board
The skills, experience and expertise relevant to the 
position of director held by each director in office 
at the date of the annual report is included in the 
Directors’ Report. 

The composition of the Board was determined 
in accordance with the following principles 
and guidelines:

•  The Board should comprise at least four 

directors and should maintain a majority of  
non-executive directors, or at least a 50/50 ratio 
of non-executives and executive directors;

•  The Chairperson must be a non-executive 
director and not occupy the role of CEO;

•  The Board should comprise directors with an 

appropriate range of qualiﬁcations and expertise; 
and

•  The Board shall meet monthly and follow 
meeting guidelines set down to ensure all 
directors are made aware of, and have available 
all necessary information, to participate in an 
informed discussion of all agenda items.

Directors of Pro Medicus Limited are considered 
to be independent when they are independent of 
management and free from any business or other 
relationship that could materially interfere with 
– or could reasonably be perceived to materially 
interfere with the exercise of their unfettered and 
independent judgement.

In the context of director independence, 
“materiality” is considered from both the 
company and individual director perspective. The 
determination of materiality requires consideration 
of both quantitative and qualitative elements. An 
item is presumed to be quantitatively immaterial 
if it is equal or less than 5% of the appropriate 
base amount. It is presumed to be material (unless 
there is qualitative evidence to the contrary) if it 
is equal to or greater than 10% of the appropriate 
base amount. 

Qualitative factors considered include whether 
a relationship is strategically important, the 
competitive landscape, the nature of the 
relationship and the contractual or other 
arrangements governing it and other factors which 
point to the actual ability of the director in question 
to shape the direction of the company’s loyalty.

In accordance with the deﬁnition of independence 
above, and the materiality thresholds set, the 
following directors of Pro Medicus Limited are 
considered to be independent:

Name 
P T Kempen  Chairman,  

Position

Non-Executive Director, 
Chairman Audit Committee

R Lyle 

Non-Executive Director

A Glenning  Non-Executive Director

The Board wishes to advise that it continues to 
maintain responsibility for the actions of the Chief 
Executive Officer and any tasks delegated to the 
management by the Board.

The appointment of appropriately skilled Non-
Executive Directors, together with a broadly 
unchanged business base has meant one new 
director nomination has occurred this year. 

Executive Directors’ Appointment Letters have 
not been revised in the prescribed format as 
the board considered this unnecessary given 
the small number of fairly recently appointed 
current directors who understand their roles and 
responsibilities. The board has undertaken that 
the recommended format should be used for any 
future director appointments.

Non-Executive Directors and senior executives 
have a written employment agreement with 
the Company setting out the terms of their 
appointment.

Mr. Sam Hupert and Mr. Anthony Hall were directors 
in Pro Medicus Pty Ltd since incorporation in 1983. 
Mr. Peter Kempen was appointed in March 2008, 
Mr Roderick Lyle was appointed in November 2010 
and Mr Glenning was appointed in May 2016.

Company Secretary
The Company Secretary is accountable to the 
Board on all matters to do with the proper 
functioning of the Board. The Company Secretary, 
who is also the Chief Financial Officer, attends all 
Board meetings and ensures that the business 
at Board meetings is accurately captured in the 
minutes of these meetings.

Board Functions
As the Board acts on behalf of and is accountable 
to the shareholders, it seeks to identify the 
expectations of the shareholders, as well as other 
regulatory and ethical expectations and obligations. 
In addition, the Board is responsible for identifying 
areas of signiﬁcant business risk and ensuring 
arrangements are in place to adequately manage 
those risks. The Board seeks to discharge these 
responsibilities in a number of ways.

The Board has delegated responsibility for the 
operation and administration of the group to the 
Chief Executive Officer and the executive team 
(as detailed in Note 21). The Board ensures that 
this team is appropriately qualiﬁed and experienced 
to discharge their responsibilities and has in place 
procedures to assess the performance of the Chief 
Executive and the executive team.

The Board is responsible for ensuring that 
management’s objectives and activities are aligned 
with the expectations and risks identiﬁed by the 
Board. The Board has a number of mechanisms in 
place to ensure this is achieved. These mechanisms 
include the following:

•  approval of strategic plans, which encompass 

the entity’s vision, mission and strategy 
statements, designed to meet stakeholders’ 
needs and manage business risk;

•  involvement in developing the strategic plan 

(a dynamic document) and approving initiatives 
and strategies designed to ensure the continued 
growth and success of the entity;

•  overseeing implementation of operating plans 
and budgets by management and monitoring 
of progress against budget – this includes 
the establishment and monitoring of key 
performance indicators (both ﬁnancial and  
non-ﬁnancial) for all signiﬁcant business 
processes; and

•  utilising appropriately skilled professionals to 

provide advice on relevant discussion topics and 
procedures to allow Directors, in the furtherance 
of their duties, to seek independent professional 
advice at the Company’s expense.

Performance
The performance of the board and key executives 
is reviewed regularly against both measurable and 
qualitative indicators. During the reporting period 
the board conducted performance evaluations that 
involved an assessment of each board member’s 
and key executive’s performance against speciﬁc 
and measurable qualitative and quantitative 
performance criteria.

The performance criteria against which directors 
and executives are assessed are aligned with 
the ﬁnancial and non-ﬁnancial objectives of 
Pro Medicus Limited.

In order to ensure that the Board continues to 
discharge its responsibilities in an appropriate 
manner, the Chairman annually reviews the 
performance of all Directors who will be asked 
to retire from the board if not performing in a 
satisfactory manner.

Diversity
The Group recognises the value contributed 
to the organisation by employing people with 
varying skills, cultural backgrounds, ethnicity 
and experience. Pro Medicus believes its diverse 
workforce is the key to its continued growth, 
improved productivity and performance.

We actively value and embrace the diversity of 
our employees and are committed to creating an 
inclusive workplace where everyone is treated 
equally and fairly, and where discrimination, 
harassment and inequity are not tolerated. While 
Pro Medicus is committed to fostering diversity at 
all levels, gender diversity has been and continues 
to be a priority for the Group.

The Group has established a diversity policy 
outlining the board’s measureable objectives 
for achieving diversity. This is assessed annually 
to measure the progress towards achieving 
those objectives.

The table below outlines the diversity objectives 
established by the board, the steps taken 
during the year to achieve these objectives and 
the outcomes.

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77

 
 
 
 
 
 
Objectives

Steps taken/Outcome

Increase the number of women 
in the workforce, including 
senior management positions 
and at board level.

•  There were no key senior female appointments made during 

the year as there were no key senior appointments made during 
the year.

•  Pro Medicus did not appoint any females in managerial roles as 
there were no managerial appointments made during the year

•  As at 30 June 2017, women represented 21% in the Group’s 

workforce (2016:22%), 20% in key executive positions (2016:20%) 
and 0% at board level (2016:0%)

•  Women represented 0% of new hires during the year (2016:33%)

•  For the upcoming ﬁnancial year, the Group targets to increase 
female representation in the Group’s workforce to 25 – 30%.

Promote an inclusive culture 
that treats the workforce with 
fairness and respect.

•  Pro Medicus has set a zero tolerance policy against discrimination 
of employees at all levels.  The company also provides avenues for 
employees to voice their concerns or report any discrimination.

•  No cases of discrimination were reported during the year (2016: nil).

Provide career development 
opportunities for every 
employee, irrespective of 
any cultural, gender or other 
differences.

•  Whilst Pro Medicus place focus on gender diversity, career 
development opportunities are equal for all employees.

•  During the year, representation at training and development 

programs was based on performance of the employees.

The achievement of the measurable objectives 
in the current ﬁnancial year was taken into 
consideration in assessing bonuses for employees. 
The Group will continue to review and update the 
measureable objectives to promote diversity for 
the upcoming year.

The Company does not have a policy in regards 
to whether participants are permitted to enter 
into transactions (whether through derivatives 
or otherwise) which limit the economic risk of 
participating in the scheme, however the Board are 
in the process of evaluating a policy for such issues.

Committees
Due to the small number of Directors, the Board 
decided it was more appropriate to handle 
nomination and remuneration issues at full Board 
level. No Committees for these functions have been 
established at this time. 

Strategic planning has been an important objective 
of the Board. Meetings are scheduled so that all 
Board members can attend and are conducted in 
an informal fashion to allow non-executive directors 
to gain enhanced industry, customer, product and 
research knowledge.

In addition the full Board handles any matters as 
and when they arise concerning environmental 
issues, occupational health and safety, ﬁnance and 
treasury. 

Audit Committee
The Board has established an audit committee, 
which operates under a charter approved by 
the Board. 

In order to maintain good corporate governance 
the Non-Executive Directors assume responsibility 
for determining and reviewing compensation 
arrangements for the Executive Directors of 
the Group. The Executive Directors in turn are 
responsible for determining and reviewing the 
compensation arrangements for the Non-Executive 
Directors. The CEO, in conjunction with the full 
Board reviews the terms of employment for 
all executives.

It is the Board’s responsibility to ensure that an 
effective internal control framework exists within 
the entity. This includes internal controls to deal 
with both the effectiveness and efficiency of 
signiﬁcant business processes. This also includes 
the safeguarding of assets, the maintenance 
of proper accounting records, and reliability of 
ﬁnancial information as well as non-ﬁnancial 
considerations such as the benchmarking of 
operational key performance indicators. 

The Board has delegated the responsibility of 
executive remuneration to the management who 
will assess the appropriateness of the nature 
and amount of remuneration of such executives 
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. 

The members of the audit committee are:

P T Kempen Chairman

S A Hupert

A B Hall

R Lyle

A Glenning

•  an up to date website  

– www.promedicus.com.au;

•  email contact with registered users; and

•  special written communications to shareholders 

distributed with the dividend notiﬁcations.

The company ensures that any material given to 
a particular group is available to all interested 
parties via the company website. This includes 
any material presented at the Annual General 
Meeting. Shareholders are encouraged to receive 
communications electronically as requested 
and can elect to do so through the company’s 
share registry.

A copy of the Corporate Governance Statement 
is also available of the Company’s website  
– www.promedicus.com.au. 

The Company effectively facilitates two-way 
communication with shareholders, through six 
monthly investor relations roadshows and through 
constant investor meetings and conference calls 
with shareholders on request.

Trading policy
Under the group’s security trading policy, an 
executive, director, or any employee of the group, 
must not trade in any securities of the parent 
company at any time when they are in possession 
of unpublished, price-sensitive information in 
relation to those securities.

Executives, directors and employees of the group 
may only trade in the securities of the parent 
company during an open period. 

Only in exceptional circumstances will approval be 
forthcoming outside of an open period which is 30 
days after:-

•  One day following the announcement of the half-
yearly and full year results as the case may be.

•  One day following the holding of the annual 

general meeting.

•  One day after any other form of earnings 
forecast update is given to the market.

As required by the ASX listing rules, the Group 
notiﬁes the ASX of any transaction conducted by 
directors in the securities of the parent company.

Code of Conduct 
The board has developed a “Code of Conduct”” 
consistent with the recommendations and details 
are disclosed on the company website.

The audit committee is also responsible for 
nomination of the external auditor and reviewing 
the adequacy of the scope and quality of the 
annual statutory audit and half yearly audit review.

Due to the small number of Directors, the 
Committee does not meet the requirements of 
Recommendation 4.1 as all members of the Board 
serve on the Audit Committee, whilst the Board 
Chairman is also the Audit Committee Chairman as 
his area of expertise is in Accounting and Finance.

The number of meetings held and individual 
attendance of Committee members at those 
meetings are disclosed in the Directors Report. 

Prior to approval of the Company’s annual ﬁnancial 
statements, the Board obtains a declaration from 
the Chief Executive Officer and Chief Financial 
Officer that, in their opinion, the ﬁnancial records 
of the entity have been properly maintained and 
that the ﬁnancial statements comply with the 
appropriate accounting standards and give a 
true and fair view of the ﬁnancial position and 
performance of the entity and that the opinion 
has been formed on the basis of a sound system 
of risk management and internal control which is 
operating effectively.

A representative of the external auditors Ernst & 
Young will continue to attend the Annual General 
Meeting and is available to answer questions from 
security holders relevant to the audit.

Continuous Disclosure Policy
The board has developed a written policy to 
ensure compliance with the ASX Listing Rules 
on continuous disclosure and has adopted 
measures to ensure the market and shareholders 
are fully informed. The measures in place 
require all potential market sensitive matters are 
discussed with the Chief Executive Officer who in 
conjunction with the Chairman and other relevant 
directors decide whether to make an appropriate 
announcement to the market. 

Only nominated authorised persons have the 
authority to release these communications 
to the ASX. This policy is displayed on the 
company website.

Shareholder Communication 
The Board of Directors aims to ensure that the 
shareholders, on behalf of whom they act, are 
informed of all information necessary to assess 
the performance of the Directors. Information is 
communicated to the shareholders through:

•  the annual report which is distributed to all 
shareholders registered to receive copies;

•  through the release of information to the market 

via the ASX

•  the annual general meeting and other meetings 
so called to obtain approval for Board action as 
appropriate;

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79

The Company up until late in the ﬁnancial period 
was not exposed to any interest rate or signiﬁcant 
currency sensitive loans or debts. Given the 
increase in overseas operations there is now an 
increased currency risk as a consequence of 
contracts written in and cash being held in foreign 
currencies. This change in risk proﬁle has been 
noted by the board and action is being taken to 
manage this risk. The Board oversees appropriate 
backup procedures for important company data. 
Detailed annual review of insurance policies in force 
to ensure cover is at appropriate levels to safeguard 
key executives, Company assets and operations. 
The Board regularly considers succession planning 
to ensure staff of appropriate skill and experience 
are available to the Company. 

A review of the Company risk management policy 
was not undertaken during the year.

The Board does not believe the Company has any 
material exposure to economic, environmental and 
social sustainability risks at the present time.

Risk Management Policies 
The Company takes a proactive approach to risk 
management. The Board is responsible for ensuring 
that risks are identiﬁed on a timely basis and that 
the Group’s objectives and activities are aligned 
with the risks identiﬁed by the Board.

The Company believes that it is crucial for all Board 
members to participate in this process; as such the 
Board has not established separate committees 
for areas such as risk management, environmental 
issues, occupational health and safety or treasury.

Whilst the Company has not established an internal 
audit function, it is committed to the identiﬁcation; 
monitoring and management of risks associated 
with its business activities and has included in its 
management and reporting systems a number of 
risk management controls, such as:

•  Annual budgeting and monthly reporting 

systems for all operations which enable the 
monitoring of progress against performance 
targets and to evaluate trends

•  Guidelines and limits on capital expenditure and 

purchasing authority matrix

•  Executive approvals for staffing requirements

•  Detailed monthly management reports including 
cash ﬂow reports, and to identify any foreign 
currency risks associated with contracts written 
in and cash being held in foreign currencies

CORPORATE INFORMATION

ABN 25 006 194 752

Directors
The names of the Directors of 
the Company in office during the 
year and until the date of this 
report are:

Peter Terence Kempen
Chairman/  
Non-Executive Director/
Chairman Audit Committee 

Dr Sam Aaron Hupert 
Chief Executive Officer/ 
Managing Director 

Anthony Barry Hall
Technology Director

Roderick Lyle

Non-Executive Director

Anthony Glenning
Non-Executive Director

Company Secretary
Clayton James Hatch

Registered Office 
450 Swan Street 
Richmond, VIC, 3121
(03) 9429 8800

Internet Address
www.promedicus.com.au

www.promedicus.com

www.visageimaging.com

Solicitors
Sci-Law Strategies 

Morrison Foerster

Bankers
Westpac Banking Corporation

Auditors
Ernst & Young

Share Registry 
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Australia

Mailing address:
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Australia

T: +612 8280 7111
Toll free: 1300 554 474
F: +612 9287 0303
F: (proxy forms only) 
+612 9287 0309

E: registrars@linkmarketservices.
com.au

www.linkmarketservices.com.au

You can do so much more online

80

PRO MEDICUS ANNUAL REPORT 2017

81

NOTES

DID YOU KNOW THAT YOU CAN ACCESS – AND EVEN UPDATE – 
INFORMATION ABOUT YOUR HOLDINGS IN PRO MEDICUS LIMITED 
VIA THE INTERNET.

Visit Link Market Services’ 
website www.linkmarketservices.
com.au and access a wide 
variety of holding information, 
make some changes online or 
download forms. 

YOU CAN:
•  Check your current and 

previous holding balances

•  Choose your preferred annual 

report delivery option

•  Update your address details

•  Update your bank details

•  Lodge, or conﬁrm lodgement 

of, your Tax File Number 
(TFN), Australian Business 
Number (ABN) or exemption

•  Check transaction and 

dividend history

•  Enter your email address

•  Check the share prices 

and graphs

•  Download a variety of 

instruction forms

•  Subscribe to email 
announcements.

You can access this information 
via a security login using your 
Security holder Reference 
Number (SRN) or Holder 
Identiﬁcation Number (HIN) 
as well as your surname (or 
company name) and postcode 
(must be the postcode recorded 
on your holding record).

DON’T MISS OUT ON YOUR 
DIVIDENDS
Dividend cheques that are 
not banked are required to be 
handed over to the State Trustee 
under the Unclaimed Monies 
Act. You are reminded to bank 
cheques immediately.

BETTER STILL, WHY NOT 
HAVE US DO YOUR BANKING 
FOR YOU.
Wouldn’t you prefer to have 
immediate access to your 
dividend payment? Your 
dividend payments can be 
credited directly into any 
nominated bank, building 
society or credit union account 
in Australia as cleared funds on 
dividend payment date – and 
we will still mail [(or email if you 
prefer)] you a dividend advice 
conﬁrming your payment details.

Not only can we do your banking 
for you, but payment by direct 
credit eliminates the risk of 
cheque fraud.

TOP 5 TIPS FOR PRO MEDICUS 
LIMITED INVESTORS VISITING 
LINK’S (OUR REGISTRY) 
WEBSITE
1)   Bookmark 

www.linkmarketservices. 
com.au – to bookmark, click 
on ‘Favourites’ on the menu 
bar at the top of your browser 
then select ‘Add to Favourites’

2)   Create a portfolio for your 
holding or holdings and 
you don’t have to remember 
your SRN or HIN every time 
you visit

3)   Lodge your email via the 

‘Communications Options’ 
and beneﬁt from the online 
communications options 
Pro Medicus Limited offers 
its investors

4)   Check out the ‘FAQs’ page 
(accessible via the orange 
menu bar) for answers to 
frequently asked questions

5)   Use the ‘Client List’ page 

(accessible via the orange 
menu bar) to link to Pro 
Medicus Limited website and 
the website of the other Link 
clients in which you invest.

CONTACT INFORMATION
You can also contact the 
Pro Medicus Limited 
share registry by calling
+61 2 8280 7111 or 
Toll Free 1300 554 474.

82

PRO MEDICUS ANNUAL REPORT 2017

83

NOTES

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contents

  1.  Highlights 2016/2017 

  11.  The Year in Review 

 65.  Independent Audit Report 

  3.  CEO and Chairman’s Letter 

  13.  Into the Future 

 72.  ASX Additional Information

  5.  Financial Summary 

  15.  Financial Report

 73.  Corporate Governance 

  7.  Business Background

  16.  Director’s Report 

  81.  Corporate Information

  9.  Global Leadership Team

 64.  Director’s Declaration

84

visit us at: 

www.promedicus.com.au
www.promedicus.com
www.visageimaging.com

 
 
 
 
 
 
 
 
Annual Report 2017

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450 Swan Street Richmond Victoria 3121 Australia

promedicus.com.au • promedicus.com • visageimaging.com