Quantum Health Group Limited
ABN 19 003 677 245
Annual Report
2021
For personal use only
Quantum Health Group Limited
CONTENTS
Directors’ Report
1
Auditor’s Independence Declaration
8
Independent Auditor’s Report
9
Directors’ Declaration
14
Consolidated Statement of Profit or Loss and Other Comprehensive Income
15
Consolidated Statement of Financial Position
16
Consolidated Statement of Changes in Equity
17
Consolidated Statement of Cash Flows
18
Notes to the Financial Statements
19
Securities Exchange Information
51
The Company’s Corporate Governance Statement can be found on the company’s website
www.qhealthcare.com.au/cg
This financial report was authorised for issue by the Board of Directors on 27 September 2021. The Company has the power
to amend and re-issue the financial report.
For personal use only
Quantum Health Group Limited
Page 1
DIRECTORS’ REPORT
The Directors present their report together with the consolidated financial report of Quantum Health Group Limited (“the
Company”) and its controlled entities (together referred to as “the Group” or “Quantum”) for the financial year ended 30 June
2021.
Directors
The Directors of the Company at any time during or since the end of the financial year are:
•
Mr Drew Townsend, Chairman
•
Mr John Walstab, Managing Director
•
Mr Alan McCarthy, Non-executive Director
•
Ms Stephanie Wen, Non-Executive Director (appointed 27 September 2021)
Directors have been in office since the start of the financial year to the date of this report, unless otherwise stated. The
particulars of the qualifications, experience and independence status of each Director as at the date of this report are set out
below in this report. Mr Walstab has also been the Company Secretary since the start of the financial year to the date of this
report.
Principal Activities
The principal activities of the Group during the financial year continue to be:
Distribution and service of state-of-the-art medical products in the field of radiology, oncology, aesthetics and environmental
health throughout Asia.
There were no significant changes in the nature of the Group’s principal activities during the financial year.
Operating results
The net profit from continuing operations of the Group attributable to owners of the Group after providing for income tax
amounted to $6,821,000 (2020: $5,446,000).
The total comprehensive income of the Group attributable to owners of the Group for the year is $6,058,000 (2020: $5,805,000).
Review of Operations
The Board of Directors are pleased to advise that Quantum Health Group Limited has delivered a strong trading result consistent
with our expectations for the year ended 30th June 2021 as follows:
Year
2019
$’000
2020
$‘000
2021
$’000
Revenue
59,429
59,398
55,671
EBITDA
4,017
9,334
10,744
NPAT
1,905
5,446
6,821
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2019
2020
2021
Net Profit
after Tax
(NPAT)
$Mil
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Quantum Health Group Limited
Page 2
DIRECTORS’ REPORT (CONTINUED)
Stronger Cash Position
Receipts from customers increased 4.7% to $65.1 million in the year to 30 June 2021 compared to $62.2 million in the
corresponding period in 2020.
Quantum’s cash balance at the end of the year has increased to $11.9 million. During the year, Quantum has repaid loans to
the sum of $1.6 million, thus the total debt of $7.4 million is more than offset by Quantum’s cash balance at 30 June 2021.
Shift to Higher Margin, Recurring Service Model
Quantum has been actively realigning its business mix to a reoccurring,
higher margin service model which has resulted in a small decline in
revenues (6%) but significantly increased the operating profits (25%).
During 2020 Quantum acquired the service businesses of Carestream
in Australia, New Zealand and Philippines which significantly increases
our service install base to over 3,500 systems. This also contributed to
the shift to a higher gross margin service contribution.
Financial position
The net assets of the consolidated Group have increased to $47,275,000 as at 30 June 2021 (2020: $40,928,000). The Directors
believe that the Group is in a strong and stable financial position to expand and grow its current operations.
Significant changes and state of affairs
Other than those events detailed above, there were no significant changes in the state of affairs of the Group during the year.
COVID-19 Impact
With the sustained growth in our business, Quantum did not qualify for Job-keeper payments. Quantum is exploring new
initiatives to seek growth opportunities during these extended market conditions. Our expectation remains that COVID-19 will
not materially impact our business.
Events subsequent to balance date
The impact of the COVID-19 pandemic was evident during the year ended 30 June 2021 and is ongoing. The Directors and
management are continually monitoring and managing the Group's operations closely in response to COVID-19. The Group
continues to achieve budgeted results up to 31 August 2021 and management believes it will continue to do so even though
the extent of the impact COVID-19 may have on the Group's future liquidity, financial performance and position and operations
is uncertain and cannot be reasonably estimated at the date these financial statements were issued.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect:
(a)
the Group’s operations in future financial years;
(b)
the results of those operations in future financial years;
(c)
the Group’s state of affairs in future financial years.
Future developments, prospects and business strategies
The Group is unaware of any factors which are likely to affect results in the future other than those mentioned in the Review
of Operations.
Dividends paid or recommended
No dividends were paid or declared for payment during the financial year or since the end of the financial year.
Environmental Regulation
The Group’s operations are not significantly affected by environmental regulations.
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Quantum Health Group Limited
Page 3
DIRECTORS’ REPORT (CONTINUED)
Information on the Directors
Drew Townsend
- Chairman and Non-Executive Director
- Bachelor of Commerce, Member of Institute of Company Directors and Member of
Chartered Accountants Australia and New Zealand.
- Appointed Chairman 2003. Board member since 2003. Over 30 years’ experience in
Australian and international accounting and finance.
•
Director Medlab Clinical Ltd. [ASX:MDC]
•
Partner and Director Hall Chadwick
- 125,138,380 ordinary shares in Quantum Health Group Limited.
John Walstab
- Managing Director and Company Secretary
- Quantum Health Group Limited Board member since 2003. Wide range of experience for
more than 36 years building and managing healthcare technology organisations
specialising in developing overseas markets.
•
Managing Director and founder InSight Oceania P/L (now Quantum Healthcare
Australia P/L)
•
Managing Director Advanced Technology Laboratories P/L (now Philips
Healthcare ANZ)
- 514,712,393 ordinary shares in Quantum Health Group Limited.
Alan McCarthy
- Non-Executive Director
- B Bus (Accounting), M Com in Marketing and Organisational Behaviour, CPA
- Mr McCarthy’s experience spans public health and private health services across
Australia, New Zealand and Asia Pacific over more than 29 years, including:
•
Co-Founder at Alpenglow Australia and SRG NZ - diagnostic imaging
•
Managing Director of Philips ANZ and Cardinal Health
•
Vice-President Asia-Pacific at CareFusion
•
GM of Diagnostic Imaging at Mayne Health
- No shares, interest in or options in Quantum Health Group Limited.
Stephanie Wen
- Non-Executive Director (appointed 27 September 2021)
- Bachelor of Law (LL.B) and Bachelor of Commerce (B.Com, Accounting) - UNSW
Master of International Affairs (International Business and Finance) Columbia University.
-
Stephanie is an experienced corporate lawyer with broad experience in Asia and
Australia including:
•
Cross-border legal advisory
•
Corporate governance and compliance
•
Public and private M&A activity, IPO’s and capital raising for ASX listed
companies
- No shares, interest in or options in Quantum Health Group Limited.
Any directorships in other ASX listed entities, either current or in the past three years prior to 30 June 2021 are shown above.
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Quantum Health Group Limited
Page 4
DIRECTORS’ REPORT (CONTINUED)
Meetings of Directors
During the financial year, 5 meetings of directors and no meeting of committees of directors were held as all matters that might
have been addressed by the committee of directors were discussed by Board of Directors. Attendances by each director during
the year were as follows:
Board of Directors
Board Meetings
Number eligible to attend
Attended
Mr Drew Townsend
5
5
Mr John Walstab
5
5
Mr Alan McCarthy
5
5
Ms Stephanie Wen
0
0
Indemnifying Officers or Auditors
During the financial year the Company paid a premium in respect of a contract insuring the directors of the Company against
any liability incurred as such by a director or secretary to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has, during the financial year, agreed to indemnify officers of the Group or any related body against a liability
incurred by such an officer.
No indemnity has been granted to the auditors of the Group.
Options
At the date of this report, there are no unissued ordinary shares of Quantum Health Group Limited under options. During the
year ended 30 June 2021, no ordinary shares of Quantum Health Group Limited were issued on the exercise of options. No
options have been granted since year end.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit Services
There were no non-audit services provided during the year to the Group by MNSA and HLB Mann Judd (NSW Partnership) or
any related practices or related audit firms.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and a copy can be viewed on
page 8 of the Annual Report.
Rounding of Amounts
The Company is an entity of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 issued by the Australian Securities and Investments Commission (“ASIC”) relating to the “rounding off” of amounts
in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off in
accordance with that ASIC Instrument to the nearest thousand dollars, unless otherwise indicated.
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Quantum Health Group Limited
Page 5
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (Audited)
This report outlines the remuneration arrangements in place for each director of Quantum Health Group Limited and other key
management personnel.
(1) Remuneration philosophy
The performance of Quantum Health Group Limited depends upon the quality of its directors and executives. To prosper, the
Company must attract, motivate and retain highly skilled directors and executives.
To this end, Quantum Health Group Limited embodies the following principles in its remuneration framework:
•
provide competitive rewards to attract high calibre executives;
•
link executive rewards to shareholder value;
•
establish appropriate, demanding performance hurdles in relation to variable executive remuneration.
While Quantum Health Group Limited does not have a remuneration committee, the Board of directors is responsible for
determining and reviewing compensation arrangements for the directors, and the senior management team.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director and senior management
remuneration is separate and distinct.
Non-executive director remuneration
As all directors of the Company are stakeholders (with the exception of Alan McCarthy and Stephanie Wen), directors’
remuneration is not as important as is generally the case. The non-executive directors did not receive remuneration during the
current or prior year. Fees charged by Hall Chadwick Chartered Accountants of which Drew Townsend is a Partner for accounting
services totalled $NIL during the year (2020: $3,261).
Senior executives and executive director remuneration
Objective
Quantum Health Group Limited aims to reward executives with a level and mix of remuneration which is commensurate with
their position, their responsibilities within the Group, their length of service and the overall performance of the Group, and so
as to:
•
reward executives for Group and individual performance against targets set by reference to appropriate benchmarks;
•
align the interests of executives with those of shareholders;
•
link rewards with the strategic goals and performance of the Group; and
•
ensure that total remuneration is competitive by market standards.
Structure
Details of contracts with Directors and senior executives are shown below.
Remuneration for senior managers and the executive director consist of the following key elements:
•
fixed remuneration;
•
variable remuneration, being short and long term incentives.
Fixed Remuneration
Fixed remuneration is reviewed regularly. Senior managers are given the opportunity to receive their fixed (primary)
remuneration in a variety of forms including cash and fringe benefits such as motor vehicle leases. The fixed remuneration
component for directors and key management personnel is detailed below.
Variable Remuneration
The objectives of the short and long term incentive plans are:
•
to link the achievement of the Group’s operational targets with the remuneration received by the executives charged with
meeting those targets; and
•
to reward directors and senior executives in a manner which aligns this element of remuneration with the creation of
shareholder wealth.
Incentives
•
Short term incentives are delivered in the form of cash bonus rewards, being incentive payments based on key
performance indicators such as sales targets.
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Quantum Health Group Limited
Page 6
DIRECTORS’ REPORT (CONTINUED)
Company performance, shareholder wealth and director and executive remuneration
The following table shows the performance of the Consolidated Group during the past five financial years:
Fiscal Year
Revenue from
continuing operations
NPAT/(NLAT)
Basic EPS
Share price at
balance date
Total Equity
NTA per
share
$ 000
$ 000
Cents
Cents
$ 000
$
2017
58,676
(1,709)
(0.17)
0.018
25,507
0.0251
2018
66,993
3,127
0.30
0.016
30,539
0.0072
2019
59,429
1,905
0.17
0.026
34,094
0.0099
2020
59,398
5,446
0.49
0.038
40,928
0.0134
2021
55,671
6,821
0.60
0.053
47,275
0.0191
No dividends have been paid by the Company during the past 5 years.
(2) Employment contracts for director and senior executives
The employment conditions of the Managing Director, Mr. John Walstab, and other specified executives are formalised in
contracts of employment. All executives are permanent employees of Quantum Health Group Limited or its controlled entities.
Under the terms of the present employment contracts, which have no fixed term, the executives may resign from their positions
and thus terminate their contracts by giving one month’s written notice. The Company may terminate these employment
agreements by providing one to three month’s written notice or by payment in lieu of the notice period based on the executive’s
fixed component of remuneration. There are no other termination payments included in the contracts. Termination payments
are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct, the
Company can terminate employment at any time.
Mr. Youngchun Kim (senior executive) is entitled to an annual bonus based on the performance of Quantum Healthcare Korea
Co. Ltd, Quantum Hunex Korea Co. Ltd, Quantum Healthcare Thailand Co. Ltd, Quantum Holdings Korea Co. Ltd and Quantum
Healthcare Australia Pty Ltd. This bonus is based upon a percentage of accumulated profit after tax of the companies listed
above.
(3) Remuneration of Key Management Personnel and Other Executives
The key management personnel of the Group and the specified executives of the Company and the Group are the directors of
the Company and the executives as set out in the table below.
Short-Term
Benefits
Post
Employment
Benefits
Long-term
benefits
Total
Salary/Fees
and
Commission
Bonus
Termination
Superannuation
Long service
leave
Executive Directors
J. Walstab
2021
276,045
-
-
26,709
5,107
307,861
2020
277,119
-
-
26,747
4,428
308,294
Total Executive Directors
2021
276,045
-
-
26,709
5,107
307,861
Total Executive Directors
2020
277,119
-
-
26,747
4,428
308,294
Key Executives
Y. Kim
2021
302,654
268,963
-
36,886
5,062
613,565
2020
306,748
283,486
-
29,558
4,388
624,180
Total Key Executives
2021
302,654
268,963
-
36,886
5,062
613,565
Total Key Executives
2020
306,748
283,486
-
29,558
4,388
624,180
Grand Total
2021
578,699
268,963
-
63,595
10,169
921,426
Grand Total
2020
583,867
283,486
-
56,305
8,816
932,474
The positions held by key management personnel are disclosed in Note 5 to the financial statements.
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Quantum Health Group Limited
Page 7
DIRECTORS’ REPORT (CONTINUED)
Relative proportion of remuneration linked to performance
2021
2020
Y. Kim
44%
45%
J. Walstab
0%
0%
(4) Changes in Directors and Executives Subsequent to Year End
There has been no change in directors or executives subsequent to year end.
(5) Options and Rights Granted and Exercised
During the financial year ended 30 June 2021 there were no options/rights issued or exercised.
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of
Directors.
John Walstab
Director
27 September 2021
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Page 8
QUANTUM HEALTH GROUP LIMITED
AND CONTROLLED ENTITIES
ABN: 19 003 677 245
AUDITOR’S INDEPENDENCE DECLARATION UNDER S 307C OF THE
CORPORATIONS ACT 2001
TO THE DIRECTORS OF QUANTUM HEALTH GROUP LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2021 there have been no contraventions of:
i.
the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii.
any applicable code of professional conduct in relation to the audit.
MNSA Pty Ltd
Mark Schiliro
Director
Sydney
Dated this 27th of September 2021
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Page 9
QUANTUM HEALTH GROUP LIMITED
AND CONTROLLED ENTITIES
ABN: 19 003 677 245
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
QUANTUM HEALTH GROUP LIMITED AND CONTROLLED ENTITIES
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Quantum Health Group Limited (the Group), which comprises the
consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cashflows
for the year then ended, and 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) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance
for the year then ended; and
(b) 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 audit
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 period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
How Our Audit Addressed the Key Audit Matters
Revenue recognition
Revenue represents a material balance consisting of primarily
sales of goods, service maintenance revenue and extended
warranty revenue.
Different revenue streams are captured through different
systems with specific recognition criteria relevant to that type
of revenue stream.
We evaluated the appropriateness of revenue recognition
policies, completed walkthrough testing of material revenue
streams and performed substantive tests of specific
transactions. In particular, procedures covering:
•
the reconciliation of billing systems to the general
ledger;
•
the accuracy and completeness of recording revenue
at point in time sales and recognition over time;
•
reconciliation of cash receipts from customers with
the receivable’s ledger; and
•
consideration of COVID-19 impacts to collection of
receivables and related provisions.
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Page 10
Key Audit Matters (Continued)
Key Audit Matters
How Our Audit Addressed the Key Audit Matters
Carrying Value of Goodwill
The Group had Goodwill of $21,525,000 at 30 June 2021. This
Goodwill arose on acquisition of subsidiary companies in prior
years.
As required by Australian Accounting Standards the Group
tested this Goodwill for impairment at 30 June 2021.
The group determined the recoverable amount using value in
use calculations for the relevant cash generating units (‘CGU’),
which involved a significant level of judgment in respect of
factors such as:
•
estimated future revenue and costs;
•
discount rates; and
•
terminal values.
We considered this to be a key audit matter due to the
significant judgements involved in estimating the recoverable
amount of the Goodwill and the potentially material impact on
the financial report.
We evaluated the judgements applied in managements
evaluation of goodwill during their impairment testing and
analysis. This included:
•
Assessing forecast revenue applied in the value in
use compared to prior forecasts;
•
We reviewed the groups value in use models and
considered assumptions applied to calculations;
•
We tested the mathematical accuracy of cashflow
forecast and impairment models provided; and
•
Assessed disclosures made within the annual report.
Decentralised Operations
The Group comprises subsidiaries (components) whose
operations are spread across Thailand, Korea and Philippines.
The decentralised and varied nature of these operations
require significant oversight by the Group’s management to
monitor activities, review component financial reporting and
undertake the Group consolidation.
This was a key audit matter for us given the number of
subsidiaries, varied operations and the significance of these
operations to the group, and the varied accounting processes
and systems used. We focused on:
•
Understanding the components and identifying
significant risks of misstatement within them;
•
The scoping of relevant procedures consistent with
the risks identified and to enable coverage of
significant aggregated balances;
•
The assessment of component compliance with
Group accounting policies, particularly in regard to
revenue recognition and capitalisation of
development costs;
•
The consolidation process and the information
provided by components used for consolidation
purposes.
We instructed component audit teams to perform procedures
on the financial information prepared for consolidation
purposes for all components. The objective of this was to
gather evidence on significant balances that aggregate to form
the Group’s financial reporting.
The component audit teams performed audits of the financial
information of the components and provided an opinion on
component financial statements, which included notes and
compliance with International Financial Reporting Standards.
We worked with the component audit team to understand the
components, to identify risks that are significant to the audit
of the Group and to plan relevant procedures. We discussed
the audits as they progressed to identify any issues, working
with the components, as appropriate. We evaluated the work
performed by the component audit teams for sufficiency for
our overall audit purpose. We also considered the component
auditors’ compliance with the Group’s accounting policies,
including revenue recognition.
We tested the financial data used, the consolidation process
for consistency with the financial data audited by component
audit teams. We also assessed the consolidation process for
compliance with the accounting standards.
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Key Audit Matters (Continued)
Key Audit Matters
How Our Audit Addressed the Key Audit Matters
Inventory
As at 30 June 2021 the Group held inventory at cost of
$8,968,000. After provision for impairment, carrying
value at 30 June 2021 was $8,147,000.
We consider this to be a key audit matter due to the
significant judgement involved in estimating the
realisable value of inventories.
During the conduct of our audit we attended stocktakes
conducted by the Group. During our attendance we
observed procedures and completed sample testing of
counts conducted.
We reviewed managements process for identifying
inventory for impairment considerations and analysed
stock records for indicators of additional stock that may
require impairment.
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 annual report for the year ended 30 June 2021 but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained
in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibility of the Directors for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable matters, 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 the financial report.
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Page 12
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal controls 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 controls.
•
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 with the directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 5 to 7 of the Directors’ Report for the year ended 30
June 2021.
In our opinion the Remuneration Report of Quantum Health Group Limited for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
MNSA Pty Ltd
Mark Schiliro
Director
Sydney
Dated this 27th of September 2021
For personal use only
Quantum Health Group Limited
Page 14
DIRECTORS’ DECLARATION
1.
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 15 to 50 are in accordance with the Corporations Act 2001,
including:
(i)
complying with Australian Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its
performance for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
2.
The notes to the financial statements include a statement of compliance with International Financial Reporting
Standards.
3.
The directors have been given the declarations by the chief executive officer and chief financial officer for the year
ended 30 June 2021 required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
John Walstab
Director
27 September 2021
For personal use only
Quantum Health Group Limited
Page 15
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR END 30 JUNE 2021
Note
2021
2020
$'000
$'000
Continuing operations
Revenue from contracts with customers
2
55,113
58,309
Other revenue
2
558
1,089
Fair value gain on financial assets
99
67
Cost of sales
(26,653)
(31,032)
Employee benefits expense
(11,421)
(11,337)
Depreciation and amortisation expense
3
(1,541)
(1,553)
Advertising and promotion expenses
(485)
(847)
Finance costs
3
(701)
(757)
Legal fees
(121)
(138)
Research and development expenditure
(83)
(77)
Travel expenses
(639)
(1,052)
Motor vehicle expenses
(584)
(645)
Warranty expenses
(764)
(559)
Telephones and internet
(276)
(230)
Consultants
(805)
(645)
Freight and delivery expenses
(673)
(327)
Occupancy expenses
3
(147)
(221)
Insurance
(295)
(302)
Foreign exchange gain / (loss)
340
(222)
Other expenses
(2,348)
(2,286)
Profit from continuing operations before income tax
8,574
7,235
Income tax expense
4
(864)
(816)
Net profit after tax
7,710
6,419
Other comprehensive income
Items that may be reclassified to profit or loss:
Translation of foreign subsidiaries (loss) / gain
(1,403)
259
Items that will not be reclassified to profit or loss:
Actuarial gain on post-employment benefit obligations
40
155
Total comprehensive income for the year
6,347
6,833
Profit for the year is attributable to:
Non-controlling interests
889
973
Owners of Quantum Health Group Limited
6,821
5,446
7,710
6,419
Total comprehensive income for the year is attributable to:
Non-controlling interests
287
1,028
Owners of Quantum Health Group Limited
6,060
5,805
6,347
6,833
Earnings per share for profit from continuing operations attributable to the ordinary equity holders of Quantum Health
Group Limited
Basic earnings per share (cents per share)
7
0.60
0.49
Diluted earnings per share (cents per share)
7
0.60
0.48
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes to the financial statements.
For personal use only
Quantum Health Group Limited
Page 16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Consolidated Group
30 Jun 2021
30 Jun 2020
Note
$'000
$'000
ASSETS
CURRENT ASSETS
Cash and cash equivalents
8
11,945
8,765
Trade and other receivables
9
14,842
14,963
Inventories
10
8,147
9,464
Financial assets
11
1,176
1,043
Other assets
19
4,499
3,870
TOTAL CURRENT ASSSETS
40,609
38,105
NON-CURRENT ASSETS
Property, plant and equipment
13
1,137
1,700
Right-of-use-assets
14
668
1,414
Investment property
15
2,338
2,444
Deferred tax assets
16
3,078
3,137
Goodwill and intangible assets
18
22,591
22,719
Financial assets
11
2,283
2,628
Other assets
19
1,657
1,906
Defined benefit plans
24
44
-
TOTAL NON-CURRENT ASSSETS
33,796
35,948
TOTAL ASSETS
74,405
74,053
CURRENT LIABLITIES
Trade and other payables
20
11,102
11,401
Contract liabilities
21
3,918
6,840
Borrowings
22
7,277
8,888
Lease liabilities
26
499
929
Current tax liabilities
839
443
Short term provisions
23
2,597
2,249
TOTAL CURRENT LIABILITIES
26,232
30,750
NON-CURRENT LIABILITIES
Trade and other payables
20
484
880
Contract liabilities
21
121
237
Borrowings
22
74
4
Lease liabilities
26
106
476
Employee benefits
23
113
443
Defined benefit plans
24
-
335
TOTAL NON-CURRENT LIABILITIES
898
2,375
TOTAL LIABILITIES
27,130
33,125
NET ASSETS
47,275
40,928
EQUITY
Issued Capital
25
17,452
86,429
Reserves
27
1,507
2,268
Retained earnings / (accumulated losses)
22,958
(52,840)
Equity attributable to owners of Quantum Health Group Limited
41,917
35,857
Non-controlling interests
5,358
5,071
TOTAL EQUITY
47,275
40,928
The above consolidated statement of financial position should be read in conjunction with the accompanying notes to the financial statements.
For personal use only
Quantum Health Group Limited
Page 17
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Attributable to the members of Quantum Health Group Limited
Ordinary
Share Capital
Shares to be
issued
Undistributable
Profits Reserve
Exchange
Translation
Reserve
Actuarial
Gain Reserve
Retained
Profits
(Losses)
Total
Attributable to
non-controlling
interests
Total
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Consolidated
Balance at 1 July 2019
85,709
720
504
1,375
29
(58,286)
30,051
4,043
34,094
Profit for the period
-
-
-
-
-
5,446
5,446
973
6,419
Other comprehensive income for
the period
-
-
-
211
149
-
360
55
415
Shares Issued
720
(720)
-
-
-
-
-
-
-
Balance at 30 June 2020
86,429
-
504
1,586
178
(52,840)
35,857
5,071
40,928
Balance at 1 July 2020
86,429
-
504
1,586
178
(52,840)
35,857
5,071
40,928
Profit for the period
-
-
-
-
-
6,821
6,821
889
7,710
Other comprehensive income for
the period
-
-
-
(801)
40
-
(761)
(602)
(1,363)
Capital restructure
(68,977)
-
-
-
-
68,977
-
-
-
Balance at 30 June 2021
17,452
-
504
785
218
22,958
41,917
5,358
47,275
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes to the financial statements.
r personal use only
Quantum Health Group Limited
Page 18
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
2021
2020
Notes
$ 000
$ 000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
65,098
62,189
Payments to suppliers and employees
(57,457)
(52,580)
Interest received
72
94
Finance costs
(287)
(255)
Income tax paid
(402)
(321)
Net cash provided by operating activities
29
7,024
9,127
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
19
209
Purchase of property, plant and equipment
(174)
(879)
Payments for acquisition of investment
-
(1,670)
Payments for financial assets
(687)
(1,324)
(Payment) / proceeds from (purchase) / sale of financial assets
(615)
947
Net cash used in investing activities
(1,457)
(2,717)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of lease liabilities
(835)
(784)
Repayment of borrowings
(1,552)
(1,188)
Net cash used in financing activities
(2,387)
(1,972)
Net increase in cash held
3,180
4,438
Cash at beginning of period
8,765
4,327
Cash at end of period
8
11,945
8,765
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes to the financial statements.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 19
This financial report includes the consolidated financial statements of Quantum Health Group Limited (‘the Company’) and controlled
entities (collectively the ‘Group’ or ‘consolidated entity’).
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards, Australian
Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing
relevant and reliable information about transactions, events and conditions.
The financial statements also comply with International Financial Reporting Standards.
Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied
unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the
measurement at fair value of selected non-current assets, financial assets and financial liabilities.
(a)
Principles of Consolidation
Subsidiaries
A controlled entity is an entity that is controlled by Quantum Health Group Limited. Quantum controls a company when it is
exposed, or has rights, to variable returns from its involvement with the company and has the ability to affect those returns
through its power over the company. The acquisition method of accounting is used to account for business combinations by
the Group (Note 1(t)).
A list of controlled entities is contained in Note 12 to the financial statements.
The assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as
their results for the year.
All balances and transactions between entities in the consolidated Group, including any unrealised profits or losses, have been
eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with those adopted by the parent entity.
(b)
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (credit) and deferred tax expense
(credit).
Current income tax expense (credit) charged to profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantively enacted, as at the reporting date. Current tax liabilities (assets) are measured at
the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well as unused tax losses.
Current and deferred income tax expense (credit) are charged or credited directly to equity instead of profit or loss when the
tax relates to items that are charged or credited directly to equity.
Deferred tax assets and liabilities are based on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements, and unused tax losses. Deferred tax assets also result where amounts
have been expensed but future tax deductions are available. No deferred income tax is recognised from the initial recognition
of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 20
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b)
Income Tax (continued)
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at the reporting date. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related
asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Where temporary differences exist in relation to investments in subsidiaries, deferred tax assets and liabilities are not
recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the
reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Tax Consolidation
Quantum Health Group Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated Group
under tax consolidation legislation. Each entity in the tax consolidated group recognises its own current and deferred tax
assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Deferred tax assets
arising from unused tax losses and tax credits in the subsidiaries are immediately assumed by the head entity. The Company
notified the Tax Office that it had formed an income tax consolidated group to apply from 1 July 2003. The tax consolidated
group has entered a tax sharing agreement whereby each company in the tax consolidated group contributes to the income
tax payable by the tax consolidated group in proportion to their contribution to the tax consolidated group’s taxable income.
Differences between the amounts of net tax assets and liabilities recognised pursuant to the tax sharing agreement are
recognised as either a contribution by, or distribution to, the head entity.
(c)
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct
materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of
normal operating capacity.
(d)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less accumulated depreciation and impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are
incurred.
Depreciation
The depreciable amount of all plant and equipment including capitalised lease assets, is depreciated on a straight-line or
diminishing value basis over the asset’s useful life to the Group commencing from the time the asset is held ready for use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful
lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment - General
15% – 20%
- Office Equipment
33%
- Motor Vehicles
12.5% – 23%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 21
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
Property, Plant and Equipment (continued)
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount (Note 1(h)).
Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains and losses are
included in profit or loss.
(e)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life
of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
(f)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written
down.
(g)
Financial Instruments
Classification
The Group classified its financial assets in the following measurement categories:
-
those to be measured subsequently at fair value through profit or loss (“FVPL”) and;
-
those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the
cash flows.
Recognition and Derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 22
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g)
Financial Instruments (continued)
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at FVPL,
transaction costs that are directly attributable to the acquisition of the financial asset.
The Group subsequently measures all debt investments that do not qualify for measurement at amortised cost and all equity
investments at fair value. Where the Group’s management has elected to present fair value gains and losses on debt and
equity investments in profit or loss, interest and dividends from such investments continue to be recognised in profit or loss
as other income when the Group’s right to receive payments is established.
Impairment losses (and reversal of impairment losses) on debt and equity investments measured at FVPL are not reported
separately from other changes in fair value.
Impairment
From 1 July 2017, the Group assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVPL and equity instruments carried at FVPL. The impairment methodology applied
depends on whether there has been a significant increase in credit risk since initial recognition. For trade receivables, the
Group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from
initial recognition of the receivables.
(h)
Impairment of Assets
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are measured at amortised cost.
The measurement of the loss allowance depends upon the Group’s assessment at the end of each reporting period as to
whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant
increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This
represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within
the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected
credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over
the life of the instrument discounted at the original effective interest rate.
Impairment of non-financial assets other than Goodwill
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The
assessment will include considering both external and internal sources of information. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s
fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount
over its recoverable amount is recognised immediately in profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 23
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i)
Intangibles
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Goodwill
Goodwill on consolidation is initially recorded at the amount by which the purchase price for a business combination exceeds
the net fair value of identifiable assets, liabilities and contingent liabilities at date of acquisition. Goodwill on acquisition of
subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated
impairment losses. Any gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
Customer Contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 10 years.
(j)
Foreign Currency Transactions and Balances
Functional and Presentation Currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment
in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent
entity’s functional and presentation currency.
Transaction and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at
fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
—
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
—
income and expenses are translated at average exchange rates for the period; and
—
retained earnings are translated at the exchange rates prevailing at the dates of the transactions.
Exchange differences arising on translation of foreign operations are recognised in other comprehensive income.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 24
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k)
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid
when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits.
Additionally, the Korean and Philippine entities operate defined benefit pension plans, which require contributions to be
made to a separately administered fund. Actuarial gains and losses for the defined benefit plan are recognised in full in the
period in which they occur in other comprehensive income. Such actuarial gains and losses are also immediately recognised in
retained earnings and are not reclassified to profit or loss in subsequent periods.
The defined benefit liability comprises the present value of the defined benefit obligation, less the fair value of plan assets out
of which the obligations are to be settled. Plan assets are assets that are held by a long-term employee benefit fund or
qualifying insurance policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly to the
Group. Fair value is based on market price information, and, in the case of quoted securities, it is the published bid price.
Unvested past service costs are recognised as an expense on a straight line basis over the average period until the benefits
become vested. Past service costs are recognised immediately if the benefits have already vested following the introduction
of, or changes to, a pension plan.
(l)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(m)
Provision for Warranties
Provision is made in respect of the Group’s estimated liability on all products and services under warranty at balance date.
The provision is based on the Group’s history of claims to settle warranty obligations over the last two years, calculated as a
percentage of revenue, net of warranties provided to the Group by suppliers.
(n)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in
current liabilities in the consolidated statement of financial position.
(o)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days for Australia and New Zealand entities, 30 to 60 days for Philippine and 60 to 90 days for Korea and Thailand. Other
receivables are recognised at amortised cost, less any allowance for expected credit losses. The group has applied the
simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. Trade and other
receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets.
(p)
Contract liabilities
Contract liabilities represent the Group’s obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right to
consideration, (whichever is earlier) before the consolidated entity has transferred the goods or services to the customer.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 25
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q)
Revenue
The Group recognises revenue to depict the transfer of promised goods or services to customers at an amount that reflects
the consideration to which the Group expects to be entitled in exchange for those goods or services.
Sale of goods:
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery of equipment or when the acceptance form is signed. The Group considers that the point of
satisfaction of the performance obligation is the point of delivering goods or acceptance of equipment.
Service Maintenance Revenue:
Revenue from Service maintenance agreements is recognised over time as the services are rendered over the period of
service maintenance agreements.
Extended Warranty Revenue:
Equipment is often sold with an extended warranty, which is considered to be a separate performance obligation for the
purposes of recognising revenue. In this case, the Group determines the relative stand-alone selling price (price at which an
entity would sell this service separately) of the services underlying the performance obligation. Revenue from extended
warranty is recognised over time over the period of the extended warranty.
Interest:
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue:
Other revenue is recognised when it is received or when the right to receive payment is established.
(r)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial
period of time to prepare for their intended use or sale are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(s)
Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the tax authority. In these circumstances the GST is recognised as part of the cost of acquisition of the asset
or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of
GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
(t)
Business Combinations
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or
at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or
loss.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 26
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t)
Business Combinations (Continued)
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the group remeasures its previously held equity interest in the acquiree
at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in
profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes
in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of
the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in
profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of
the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquiree.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on
either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible
to determine fair value.
(u)
Comparative Figures
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for
the current financial year.
(v)
Rounding of Amounts
The Company is an entity of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 issued by the Australian Securities and Investments Commission (“ASIC”) relating to the “rounding off” of amounts
in the directors' report and financial report. Amounts in the directors' report and financial report have been rounded off in
accordance with that ASIC Instrument to the nearest thousand dollars, unless otherwise indicated.
(w)
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Group.
Key Estimates
(i)
Impairment
The Group assesses impairment at each reporting date by evaluating conditions and events specific to the Group that
may be indicative of impairment triggers. Where any impairment trigger exists, the recoverable amount of the asset is
determined. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate
various key assumptions.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 27
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(w)
Critical Accounting Estimates and Judgments (Continued)
Key Judgements
(i)
Provision for expected credit losses of trade receivables
The Directors have reviewed outstanding debtors of the Group as at 30 June 2021, and have formed the opinion
that amounts receivable from sales made during the current and previous financial years amounting to $413,000
(2020: $732,000) may not be collectable, and have created an allowance for expected credit losses.
(ii)
Provision for Inventory obsolescence
The directors review all inventories at the year end and provide for any inventories where the expected realisable
value is less than carrying value.
(iii)
Impairment of Goodwill and other intangible
The directors have assessed the value of goodwill and other intangible at balance date and have determined that
the net book value at 30 June 2021 is recoverable. Further details are included in Note 18.
(iv)
Provision for Warranty – Quantum Energy Technologies Pty Ltd
Quantum Energy Technologies, a subsidiary of the Company, has a provision for warranty expenses as at 30 June
2021 of $482,000. The provision is based on management's estimate of the cost of providing this warranty for two
years to its customer.
If management's estimate was to increase or decrease by 10%, the warranty provision would increase or decrease
by $48,100.
(v)
Provision for Warranty – Quantum Healthcare Korea Co, Ltd (“QHK”)
Quantum Healthcare Korea Co, Ltd, a subsidiary of the Company, reduced the provision for warranty provision to
$139,000 as at 30 June 2021. The provision of $138,000 is based on management's estimate of the cost of providing
this warranty for one year to its customer (being the difference between the warranty of three years provided by
QHK to its customer and the warranty of two years received from its supplier, which is estimated by management's
review of the contract with its supplier and determining the warranty element of total costs payable to its supplier.
If management's estimate was to increase or decrease by 10%, the warranty provision would increase or decrease
by $13,800.
(vi)
Defined benefit plans – Quantum Healthcare Korea Co. Ltd (“QHK”), Quantum Hunex Korea Co. Ltd (“Hunex”) and
Carestream Health Philippine Inc (“QHP”)
Various actuarial assumptions are required when determining the Group’s defined benefit obligations. See Note 24.
(vii)
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and tax losses only if the Group considers
that it is possible that future taxable amounts will be available to utilise those temporary differences and losses.
(viii)
Estimation of useful lives of assets
The group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets, including customer contracts through business combination.
The useful lives could change significantly as a result of technical innovations or some other event. The depreciation
and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically
obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 28
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(w)
Critical Accounting Estimates and Judgments (Continued)
(ix)
Business combinations
As discussed in note 1(t), business combinations are initially accounted for on a provisional basis. The fair value of
assets acquired, liabilities and contingent liabilities assumed are initially estimated by the group taking into
consideration all available information at the reporting date. Fair value adjustments on the finalisation of the
business combination accounting is retrospective, where applicable to the period the combination occurred and
may have an impact on the assets and liabilities, depreciation and amortisation reported.
(x)
Fair Value Measurement
The fair value of financial assets and liabilities are estimated for disclosure purposes in accordance with AASB 13– Fair Value
Measurement which requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:
(i)
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
(ii)
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
(iii)
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(y)
Going Concern
During the year ended 30 June 2021, the consolidated entity earned a profit after income tax of $7,710,000. At 30 June 2021,
the consolidated entity had net assets of $47,275,000 and net current assets of $14,377,000, and during the year ended 30
June 2021 generated cash flow from operating activities of $7,024,000. Included in current liabilities are amounts due to J
Walstab (a director of the Company) of $2,118,000. Mr Walstab has confirmed that he will not demand repayment of this
amount prior to 31 December 2021 if it affects the ability of the consolidated entity to pay its other debts as and when they
fall due and payable.
Management have prepared cash flow forecasts which management considers demonstrates that the consolidated entity will
generate sufficient cash flows to enable it to continue as a going concern and pay its debts as and when they fall due and
payable. Accordingly, the financial statements have been prepared on a going concern basis.
(z)
New, revised or amending Accounting Standards and Interpretations adopted
The Group has applied all new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board that are mandatory for the current reporting period. The main new Accounting Standards and
Interpretations that became effective during the current reporting period are as follows:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019 which replaces AASB 117 ‘Leases’ and for lessees eliminates the
classification of operating leases and finance leases.
Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding liabilities are recognised in
the balance sheet. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-
use assets and an interest expense on the recognised lease liabilities. In the earlier periods of the lease, the expenses
associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced by
interest expense and depreciation in profit or loss. For classification within the statement of cash flows, the interest portion is
disclosed in operating activities and the principal portion of the lease payments are separately disclosed in financing activities.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 29
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(z)
New, revised or amending Accounting Standards and Interpretations adopted (continued)
On adoption, lease liabilities were measured at the present value of the remaining lease payments, discounted using the
Group’s incremental borrowing rate at 1 July 2019. The weighted average incremental borrowing rate that applied to the
lease liabilities on 1 July 2019 was 4.3%.
Right of use assets were measured at their carrying amounts as if the standard had been applied since commencement date
of each lease but discounted using the incremental borrowing rate that applied on 1 July 2019.
Impact of adoption
The new accounting policies are disclosed in note 1(z). AASB 16 was adopted using the modified retrospective approach and
as such the comparatives have not been restated. The impact of adoption on opening retained profits as at 1 July 2019 was as
follows:
1 July 2019
$000
Operating lease commitments as at 1 July 2019
1,508
Operating lease commitments discount based on the weighted
average incremental borrowing rate of 4.3% (AASB 16)
(65)
Leases exemptions (short term leases and low value leases)
(27)
Right-of-use assets (AASB 16)
1,416
Lease liabilities – current (AASB 16)
(805)
Lease liabilities – non-current (AASB 16)
(611)
Increase in opening retained profits as at 1 July 2019
-
When adopting AASB 16 from 1 July 2019, the Group has applied the following practical expedients:
• applying a single discount rate to the portfolio of leases with reasonably similar characteristics;
• excluding any initial direct costs from the measurement of right-of-use assets;
• using hindsight in determining the lease term when the contract contains options to extend or terminate the lease; and
• not apply AASB 16 to contracts that were not previously identified as containing a lease
There are no other Standards that have been issued that are not yet effective and that are expected to have a material impact
on financial reports of the Group in the current or future reporting periods.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 30
NOTE 2: REVENUE AND OTHER INCOME
Consolidated Group
2021
2020
$000
$000
Revenue from contracts with customers
Sale of goods
32,455
39,876
Services revenue
22,658
18,433
55,113
58,309
Other revenue
Interest receivable – other entities
72
94
Interest receivable – related parties
-
118
Other revenue
486
877
558
1,089
Total Revenue
55,671
59,398
Timing of revenue recognition
Goods transferred at a point in time
32,455
39,876
Other revenue recognised at point in time
558
1,089
Services transferred over time
22,658
18,433
55,671
59,398
AASB 15 requires an entity to disaggregate revenue recognised from contracts with customers into categories that depict how the
nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Group has assessed that the
disaggregation of revenue by operating segments is appropriate in meeting this disclosure requirement as this is the information
regularly reviewed by the chief operating decision maker in order to evaluate the financial performance of the Group.
NOTE 3: PROFIT FOR THE YEAR
Consolidated Group
2021
2020
$000
$000
Profit for the year includes the following expenses:
Finance costs
- External - bank loans and overdrafts
318
210
- Interest expenses on lease liabilities
-
21
- Related parties
383
526
Total finance costs
701
757
Depreciation and amortisation expenses
- Amortisation of right-of-use assets
710
784
- Depreciation of property, plant and equipment
668
684
- Depreciation of investment properties
35
-
- Amortisation of intangible assets
128
85
Total depreciation and amortisation expenses
1,541
1,553
Rental expense relating to operating leases
147
221
Rental expenses of $147,000 recognised in the 30 June 2021 consolidated statement of profit or loss and other comprehensive income
relate to leases that terminated during the year (short term lease exemption) or low value leases.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 31
NOTE 4: INCOME TAX EXPENSE / (CREDIT)
Consolidated Group
2021
2020
$000
$000
(a) Continuing Operations
The components of income tax expense / (credit) comprise:
Current tax relating to Continuing Operations
1,278
268
Deferred tax relating to Continuing Operations
(414)
548
864
816
(b) Income Tax Expense / (Credit)
The prima facie tax on profit from continuing activities before income
tax is reconciled to the income tax expense (credit) as follows:
Prima facie tax payable on profit from continuing activities before
income tax at 30% (2020:30%)
2,572
2,171
Add / (Deduct) tax effect of:
Difference in overseas tax rate
(591)
(161)
Previously unrecognised tax losses used to reduce tax expense
(961)
(956)
Other amounts which are not deductible (assessable) for income tax purposes
(156)
(238)
Income tax expense (credit)
864
816
The applicable weighted average effective rates are
10%
11%
(c) Other comprehensive income
There is no income tax on the items in other comprehensive income.
NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL
(a) Names and positions held of consolidated entity key management personnel in office at any time during the current and
previous financial year are:
D.A Townsend
Chairman and Non-executive Director
J. Walstab
CEO, Managing Director and Company Secretary
Y. Kim
CEO, Quantum Healthcare Pty Ltd (subsidiary)
A. McCarthy
Non-executive Director
(b) Key Management Personnel remuneration
Consolidated Group
2021
2020
$000
$000
Short-term employee benefits
847,662
867,353
Post-employment benefits
63,595
56,305
Long-term benefits
10,169
8,816
921,426
932,474
(c) Option holdings
There are no options held by key management personnel (2020: Nil)
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 32
NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL (CONTINUED)
(d) Shareholdings
The numbers of share in the Company held during the year by each director of the Company and other key management
personnel of the Group, including their personally related parties, are set out below:
Balance 1.7.20
Number
Sold
Number
Purchased
Number
Balance 30.6.21
Number
Directors
D.A Townsend
329,312,458
(204,174,078)1
-
125,138,380
J. Walstab
514,712,393
-
-
514,712,393
A. McCarthy
-
-
-
-
S Wen
-
-
-
-
Specified Executives
Y. Kim
44,000,000
-
-
44,000,000
Related Parties
M. Walstab (Brother of J. Walstab)
400,000
(400,000)
-
-
1 Transaction part of a share restructure, no change to D Townsend’s actual share interest.
NOTE 6: REMUNERATION OF AUDITORS
Consolidated Group
2021
2020
Auditing and reviewing financial reports
MNSA
- Audit and review of financial statements
70,000
-
HLB Mann Judd (NSW Partnership)
- Audit and review of financial statements
65,000
159,750
135,000
159,750
Non-MNSA and Non-HLB Mann Judd (NSW Partnership) auditors for audit of
subsidiary companies:
- Thailand
24,883
24,000
- Korea
42,335
80,998
- Philippines
6,564
6,956
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 33
NOTE 7: EARNINGS PER SHARE
Consolidated Group
2021
2020
Cents per share
Cents per share
Earnings per share after tax
Basic earnings per share
0.60
0.49
Diluted earnings per share
0.60
0.48
Consolidated Group
2021
2020
$000
$000
Net profit
Earnings used to calculate basic EPS
6,821
5,446
Earnings used to calculate diluted EPS
6,821
5,446
No.
No.
(a) Weighted average number of ordinary shares outstanding during
the year used in calculating basic EPS
1,128,308,291
1,114,455,832
(b) Weighted average number of ordinary shares outstanding during
the year used in calculating diluted EPS
1,128,308,291
1,128,308,291
Weighted average number of shares used as the denomination:
Weighted average number of ordinary shares used as the
denomination in calculating basic earnings per share:
1,128,308,291
1,114,455,832
Weighted average number ordinary shares and for shares to be issued
used as the denominator in calculating diluted earnings per share
1,128,308,291
1,128,308,291
NOTE 8: CASH AND CASH EQUIVALENTS
Consolidated Group
2021
2020
$000
$000
Cash at bank and in hand
11,945
8,765
11,945
8,765
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 34
NOTE 9: TRADE AND OTHER RECEIVABLES
Consolidated Group
2021
2020
$000
$000
CURRENT
Trade receivables
15,255
15,695
Allowance for expected credit losses
(413)
(732)
14,842
14,963
Trade receivables past due, not impaired
Not overdue
6,308
12,446
61-90 days past due
6,209
1,562
91 days and above past due
2,325
955
14,842
14,963
Movement in allowance for expected credit loss
Opening balance
(732)
(527)
Additions during the year
-
(253)
Amounts collected during the year
319
-
Amounts written off during the year
-
48
Closing balance
(413)
(732)
Allowance for expected credit losses
Current trade receivables are non-interest bearing and generally on 30-day terms for Australia and New Zealand entities, and 60 to 90-
day terms for Korea, Thailand and Philippines entities. The Group applies the AASB 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses,
trade receivables have been grouped based on shared credit risk characteristics and the days past due.
Credit Risk — Trade and Other Receivables
The Group has no significant concentration of credit risk. The class of assets described as Trade and Other Receivables is considered to
be the main source of credit risk related to the Group. On a geographical basis, the Group has significant credit risk exposures in Australia,
Korea and Thailand given the substantial operations in these countries. In Australia, the Group has retention of title clauses over goods
sold until payment is received. The Group does not hold any financial assets with terms that have been renegotiated, but which would
otherwise be past due or impaired.
NOTE 10: INVENTORIES
Consolidated Group
2021
2020
$000
$000
At cost
Raw materials and stores
511
8
Finished goods
8,457
10,238
8,968
10,246
Less: Provision for Impairment
(821)
(782)
8,147
9,464
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 35
NOTE 11: FINANCIAL ASSETS
Consolidated Group
2021
2020
$000
$000
Current
Financial assets at fair value through profit or loss:
- Shares in listed companies
19
21
- Renewable Energy Certificates
22
3
At face value:
- Term deposits
692
1,019
- Loans - others
443
-
1,176
1,043
Non-Current
- Deposits
1,616
2,065
- Loans - others
254
183
- Convertible note
413
380
2,283
2,628
Level 1 in the fair value hierarchy (refer Note 1 (x)): The fair values of shares in listed companies and Renewable Energy Certificates are
based on quoted market prices at the end of the reporting period.
Term deposits, Deposits and Loans are measured at their face value, which is considered to be their fair value.
NOTE 12: CONTROLLED ENTITIES
Name of entity
Country of
Incorporation
Ownership Interest
2021
2020
Parent entity
Quantum Health Group Limited
Australia
Controlled entity
Quantum Energy Technologies Pty Ltd
Australia
100%
100%
Quantum Energy Installations Pty Ltd
Australia
100%
100%
Quantum Healthcare Australia Pty Ltd
Australia
100%
100%
Medishop Pty Ltd
Australia
100%
100%
Quantum Solar Power Pty Ltd
Australia
100%
100%
Quantum Energy Technologies (Suzhou) Co Ltd
China
100%
100%
Suzhou Sheerdrop Wine Co Ltd
China
100%
100%
Med-X Healthcare Pty Ltd
Australia
100%
100%
Quantum Healthcare Korea Co. Ltd
Korea
100%
100%
Quantum Bio Science Co. Ltd
Korea
70%
70%
Quantum Hunex Korea Co. Ltd
Korea
95%
95%
Quantum Healthcare Thailand Co. Ltd
Thailand
49%
49%
Quantum Healthcare Pty Ltd
Australia
100%
100%
Quantum Healthcare Hong Kong Limited
China
100%
100%
Quantum Holdings Co. Ltd
Korea
100%
100%
Carestream Health Philippines, Inc.
Philippines
100%
100%
Quantum Healthcare NZ Ltd
New Zealand
100%
100%
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 36
NOTE 13: PROPERTY, PLANT AND EQUIPMENT
Consolidated Group
2021
2020
$000
$000
Plant & Equipment at cost
4,234
6,986
Accumulated depreciation
(3,097)
(5,286)
1,137
1,700
Movements in carrying amounts
Opening Balance
1,700
1,570
Additions
143
879
Additions through business combinations (Not 17)
44
28
Re-classification from inventory
-
65
Disposals/write-offs
(82)
(158)
Depreciation/amortisation expense
(668)
(684)
Closing balance
1,137
1,700
NOTE 14: Right of Use Assets
Consolidated Group
2021
2020
$000
$000
Non-Current
Land and building - right-of-use
1,188
1,430
Less: Accumulated Depreciation
(938)
(657)
Equipment-right-of-use
462
420
Less: Accumulated Depreciation
(160)
(46)
Vehicles-right-of-use
306
457
Less: Accumulated Depreciation
(233)
(190)
Others
168
-
Less Accumulated Depreciation Others
(125)
-
Total
668
1,414
Movements in carrying amounts
Opening Balance as at 1 July 2020
1,414
1,416
Additions
210
782
Finished the lease
(246)
-
Depreciation/amortisation expense
(710)
(784)
Closing balance
668
1,414
Total opening balance at 1 July 2020 was $1,414,000. AASB 16 was adopted using the modified retrospective approach and
comparatives for right-of-use assets have not been provided. Refer to Note1(z).
The Group leases land and buildings for its offices and warehouses under agreements of between three to five years with options to
extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated. The Group also leases office
equipment under agreements of up to three years. The Group leases vehicles under agreements of between seven to ten years.
In relation to right of use assets, depreciation charged in the year for land and buildings was $281,000; equipment was $114,000;
vehicle was $43,000 and for others was $125,000.
Details on interest expense and cashflows relating to lease liabilities are disclosed in Note 26.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 37
NOTE 15: INVESTMENT PROPERTIES
Consolidated Group
2021
2020
$000
$000
Opening Balance
2,444
2,444
Depreciation building expense
(35)
-
Re-classification from financial assets
(71)
-
Closing Balance
2,338
2,444
Investment properties, principally a freehold office building in Korea, are held for long-term rental yields and are no longer occupied by
the Group due to the restructure of its environmental division during the year. They are carried at cost.
NOTE 16: DEFERRED TAX ASSETS
Consolidated Group
2021
2020
$000
$000
Consists of:
- Inventories
181
186
- Employee entitlements
820
832
- Lease liability
207
313
- Accruals and Provisions
1,425
1,264
- Other
345
121
- Right of use assets
(195)
(306)
- customer relationship
(320)
(358)
- Impairment provisions
466
465
- Tax losses
149
620
3,078
3,137
The tax losses carried forward from the Australian tax consolidated group have not been recognised as the group estimates that is not
probable that taxable profit will be available against which the unused tax losses in a near future. The total value of the Deferred Tax
Assets on losses carried forward is $1,799,717.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 38
NOTE 17: BUSINESS ACQUISITION
On 1 November 2019, the Group acquired Carestream’s medical imaging service Businesses in Australia and New Zealand (“Carestream
ANZ”). Carestream ANZ provides onsite and remote service to hospitals, radiology imaging centres in Australia and New Zealand. On 1
January 2020, the Group acquired Carestream Health Philippines Inc. (“Carestream Philippines”). Carestream Philippines provides onsite
and remote service to hospitals, radiology imaging centres in Philippine.
Details of the acquisition are as follows:
Carestream ANZ
Carestream
Philippines
Service Business
Service Business
Total
Fair value
Fair value
$000
$000
$000
Cash and cash equivalent
-
2,006
2,006
Trade and other receivables
-
387
387
Inventory
1,465
113
1,578
Customer contracts
1,279
-
1,279
Other assets
18
163
181
Property, plant and equipment
-
15
15
Retirement benefit plan
-
127
127
Deferred tax assets / (liabilities)
(143)
387
244
Employee liabilities
(773)
-
(773)
Deferred income & extended warranty
(1,300)
(315)
(1,615)
Trade and other payables
-
(285)
(285)
Net identifiable assets acquired
546
2,598
3,144
Goodwill / (bargain purchase)
1,542
(130)
1,412
Acquisition-date fair value of the total consideration transferred
2,088
2,468
4,556
Representing:
Cash paid
1,208
2,468
3,676
Deferred consideration
880
-
880
2,088
2,468
4,556
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
1,208
2,468
3,676
Less: cash and cash equivalents
-
(2,006)
(2,006)
Net cash used - investing activities
1,208
462
1,670
The provisional accounting for the acquisition of Carestream Philippines generated a gain from bargain purchase of $130,000 as the fair
value of net assets of $2,598,000 was in excess of the aggregate consideration of $2,468,000. This bargain purchase gain has been
recognised as other income during the year.
The acquisition of Carestream ANZ contributed revenue of $7,671,000 and net profit of $1,015,000 to the group for the period from 1
November 2019 to 30 June 2020. The acquisition of Carestream Philippines contributed revenue of $448,000 and net profit of $24,000 to
the group for the period from 1 January 2020 to 30 June 2020.
Due to restructuring that occurred in both businesses before the acquisition by the Group, it is not possible to estimate reliably what
would have been the impact on revenue and profit for the year ended 30 June 2020 if both businesses had been purchased on 1 July
2019.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 39
NOTE 18: GOODWILL AND INTANGIBLE ASSETS
Consolidated Group
2021
2020
$000
$000
Goodwill on acquisition
Cost
21,525
21,525
Customer contracts:
Customer contracts at cost
1,279
1,279
Less: Accumulated amortisation
(213)
(85)
Net carrying value
1,066
1,194
Total Goodwill and Intangible Assets
22,591
22,719
Reconciliations of the written down values at the beginning and end of the current financial period are set out below:
Goodwill
Customer
Contracts
Total
$'000
$'000
$'000
Balance at 1 July 2020
21,525
1,279
22,804
Amortisation expense
-
(213)
(213)
Total Goodwill and intangible assets
21,525
1,066
22,591
The value in use calculations for the goodwill on acquisition are based on discounted estimated maintainable earnings before interest
and taxes (“EBIT”). EBIT increase is forecast at an average rate for the next five years and a terminal value of a multiple of EBIT. Details
of key assumptions used in the value in use calculations are as follows:
Discount rate
15.5%
Terminal value of approximate times EBIT
5.7
EBIT base on forecast for year ending 30 June 2021
increase (decrease) at average of
1%
Sensitivity Analysis
If discount rates were changed to the rates detailed in the table below with no change to any of the other assumptions, the estimated
recoverable amount would approximately equal the carrying amount.
If forecast EBIT used was changed by the amounts noted in the table below with no change to any of the other assumptions the estimated
recoverable amount would approximately equal the carrying amount.
Discount rate – change discount rates to
39%
EBIT change – reduce forecast EBIT by
59%
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 40
NOTE 19: OTHER ASSETS
Consolidated
Group
Consolidated
Group
2021
2020
$000
$000
CURRENT
Prepayments
40
114
Guarantee deposits
3,680
3,363
Other
779
393
4,499
3,870
NON-CURRENT
Security Deposits
336
450
Guarantee deposits
1,267
1,385
Other
54
71
1,657
1,906
NOTE 20: TRADE AND OTHER PAYABLES
Consolidated Group
2021
2020
$000
$000
CURRENT
Trade payables
8,284
9,346
Account payable to related parties
288
211
Deferred consideration
680
200
Employee benefits
247
657
Other
1,603
987
11,102
11,401
NON-CURRENT
Deferred consideration
284
680
Other payables
200
200
484
880
NOTE 21: CONTRACT LIABILITIES
Consolidated Group
2021
2020
$000
$000
CURRENT
Customers deposits
3,580
3,423
Contract liabilities
338
3,417
3,918
6,840
NON-CURRENT
Contract liabilities
121
237
121
237
Total
4,039
7,077
Contract liabilities are aggregate amount of the transaction price allocated to performance obligations that are unsatisfied at the end of
the reporting period. This will be recognised as revenue when the performance obligations are satisfied.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 41
NOTE 22: BORROWINGS
Consolidated Group
2021
2020
$000
$000
CURRENT
Unsecured liabilities:
- Loans - Related parties (Note 30)
3,326
3,398
- Loans - Other parties
1,029
1,370
- Loans - Director of subsidiary
1,023
1,453
Secured liabilities:
- Bank borrowings
1,899
2,667
7,277
8,888
NON-CURRENT
Unsecured liabilities:
- Loans - Other parties
74
4
74
4
Borrowings are accounted for at face value.
$204,858 is secured by the CEO of Quantum Hunex Korea. $1,248,545 is secured with Hunex factory as collateral and $496,021 is
secured with Quantum Holdings foreign currency deposit.
NOTE 23: PROVISIONS
Consolidated Group
2021
2020
$000
$000
CURRENT
Employee benefits
1,976
1,731
Warranty
621
518
2,597
2,249
NON CURRENT
Employee benefits
113
443
NOTE 24: DEFINED BENEFIT PLANS
The group has defined benefit pension plans in Korea and Philippines. The cost of defined benefit pension plans and the present value
of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These
include the determination of the discount rate, future salary increases, mortality rates and future pension increases. The following
tables summarise the main assumptions used, the components of net benefit expense recognised in the statement of profit or loss and
amounts recognised in the statement of financial position. The actuarial reports underlying the following amounts for Korea were
received by the Company in September 2021.
.
(a) Details of the net retirement benefit obligation is as follows:
Consolidated Group
2021
2020
$000
$000
Present value of the retirement benefit obligation
801
891
Fair value of the plan assets
(845)
(556)
Net retirement benefit obligation
(44)
335
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 42
(b) Profit and loss recognised in connection with defined benefit pension plans for the year ended 30 June 2021 as follows:
Consolidated Group
2021
2020
$000
$000
Current service cost
202
321
Interest cost on retirement benefit obligation
4
17
Total expenses included in the employee benefits expense
206
338
(c) Changes in the present value of the defined benefit liabilities for the year ended
30 June 2021 are as follows:
Consolidated Group
2021
2020
$000
$000
Beginning balance
891
1,426
Defined benefit (asset) / liability adopted upon business acquisition
-
(129)
Current service cost
202
265
Interest cost
20
18
Foreign exchange loss/(gain)
(18)
(20)
Actuarial loss/(gain)
(48)
(167)
Retirement benefits paid
(246)
(502)
Ending balance
801
891
(d) Changes in the fair value of plan assets for the year ended 30 June 2021 are as follows:
2021
2020
$000
$000
Beginning balance
556
470
Contributions
509
391
Interest revenue
16
-
Benefits paid
(196)
(299)
Expected return
(12)
5
Foreign exchange loss/(gain)
-
(11)
Actuarial gain/(loss)
(28)
-
Ending balance
845
556
(e) The principal assumptions used in actuarial valuation as at 30 June 2021 are as follows:
2021
2020
Discount rate
2.86%
2.72%
Future salary increases rate
4.61%
4.94%
Retirement age
60 years
60
years
(f) The plan assets as at 30 June 2021 are as follows:
2021
2020
$000
$000
Term deposits
465
556
Unit Investment Trust Funds
20
-
Government Securities
316
-
Total
801
556
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 43
NOTE 25: ISSUED CAPITAL
Consolidated Group
30 June 2021
30 June 2020
30 June 2021
30 June 2020
No.
No.
$ 000
$ 000
CURRENT
Fully paid ordinary shares
1,128,308,291
1,128,308,291
17,452
86,429
1,128,308,291
1,128,308,291
17,452
86,429
Movements- Fully paid ordinary shares:
At the beginning of the year
1,128,308,291
1,128,308,291
86,429
86,429
Section 258F Capital reduction
-
-
(68,977)
-
At the end of the year
1,128,308,291
1,128,308,291
17,452
86,429
The Board resolved with effect 30 June 2021 to reduce Quantum Health Groups share capital by $68,977,000 in accordance with section
258F of the Corporations Act.
Capital Management
Management controls the capital of the Group in order to meet debt covenants, provide shareholders with adequate returns and ensure
that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital and
financial liabilities supported by financial assets.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response
to changes in risks and in the market. These responses include the management of debt levels and share issues. There have been no
changes in the strategy adopted by management to control the capital of the Group since the prior year.
Note 26: Lease Liabilities
Consolidated Group
2021
2020
$000
$000
CURRENT
- Lease liability
499
929
NON CURRENT
- Lease liability
106
476
AASB 16 was adopted using the modified retrospective approach and comparatives for lease liabilities have not been provided. Refer to
Note 1(z). Interest expense recognised in the statement of profit or loss and other comprehensive income was $21,000 and interest
and principal payments made to lessors in respect to lease liabilities was $805,000 for the year.
The lease liabilities relating to equipment and vehicles are secured over the assets to which the leases relate.
NOTE 27: RESERVES
Consolidated Group
2021
2020
$000
$000
Reserve
Undistributable Profits Reserve
504
504
Exchange Translation Reserve
785
1,586
Actuarial Gain Reserve
218
178
Closing Balance
1,507
2,268
Undistributable Profits Reserve
The undistributable profits reserve records profits earned by Quantum Energy Technologies (Suzhou) Co Ltd that are required to be
retained by that Company and cannot be distributed as dividends to Quantum Health Group Limited. The reserve is currently at its
maximum required amount.
Exchange Translation Reserve
The exchange translation reserve records the exchange differences arising on translation of the financial statements of overseas
subsidiaries to Australian dollars.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 44
NOTE 28: SEGMENT REPORTING
Environmental
Services
Medical
Unallocated
Elimination
Consolidated-
Continuing
Operations
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Total revenue - Australia
3,597
2,305
18,200
19,791
-
119
1,034
(2,408)
22,831
19,807
Total revenue- China
349
1,556
-
-
-
17
-
(1,586)
349
(13)
Total revenue - Thailand
-
-
13,882
16,949
-
-
-
-
13,882
16,949
Total revenue - Korea
-
-
17,383
22,281
-
-
(78)
(74)
17,305
22,207
Total revenue - Philippines
-
-
1,304
448
-
-
-
-
1,304
448
Total revenue
3,946
3,861
50,769
59,469
-
136
956
(4,068)
55,671
59,398
Profit/(Loss) after income tax -
Australia
62
(426)
3,231
5,947
(1,576)
(1,379)
1,631
(907)
3,348
3,235
Profit/(Loss) after income tax -
China
-
673
-
-
-
(40)
6
(1,586)
6
(953)
Profit/(Loss) after income tax -
Thailand
-
-
1,740
1,928
-
-
1,085
1,637
2,825
3,565
Profit/(Loss) after income tax -
Korea
-
-
1,567
(401)
-
-
(42)
949
1,525
548
Profit/(Loss) after income tax -
Philippines
-
-
6
24
-
-
-
-
6
24
Total profit / (loss) after income tax
62
247
6,544
7,498
(1,576)
(1,419)
2,680
93
7,710
6,419
Segment assets - Australia
808
9,482
45,642
45,133
3,182
9,011
(5,801)
(22,815)
43,831
40,811
Segment assets - China
(1,484)
(1,004)
-
-
-
-
-
-
(1,484)
(1,004)
Segment assets - Thailand
-
-
11,853
11,669
-
-
-
-
11,853
11,669
Segment assets - Korea
-
-
17,056
19,560
-
-
-
-
17,056
19,560
Segment assets - Philippines
-
-
3,149
3,017
-
-
-
-
3,149
3,017
Total segment assets
(676)
8,478
77,700
79,379
3,182
9,011
(5,801)
(22,815)
74,405
74,053
Segment liabilities - Australia
(1,446)
8,080
12,224
13,858
5,446
10,503
1,555
(12,124)
17,779
20,317
Segment liabilities - China
400
120
-
-
-
-
-
-
400
120
Segment liabilities - Thailand
-
-
(59)
135
-
-
-
-
(59)
135
Segment liabilities - Korea
-
-
8,422
12,259
-
-
-
-
8,422
12,259
Segment liabilities - Philippines
-
-
588
294
-
-
-
-
588
294
Total segment liabilities
(1,046)
8,200
21,175
26,546
5,446
10,503
1,555
(12,124)
27,130
33,125
Income tax expense (credit)
-
(4)
864
892
-
(72)
-
-
864
816
Depreciation
27
128
1,514
1,425
-
-
-
-
1,541
1,553
Interest Revenue
-
-
68
94
4
118
-
-
72
212
Interest Expense
-
-
94
247
607
510
-
-
701
757
Fair value gain/(loss) on financial
assets
99
40
-
27
-
-
-
-
99
67
Acquisition of Property, plant &
equipment
-
-
143
879
-
-
-
-
143
879
Operating segments are reported in a manner consistent with the internal reporting provided by the chief operating decision maker.
The chief operating decision maker who is responsible for allocating resources and assessing performance of operating segments has
been identified as the board.
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 45
NOTE 28: SEGMENT REPORTING (Continued)
Accounting Policies
Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a
reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables,
inventories, intangibles, other financial assets and property, plant and equipment, net of allowances and accumulated depreciation and
amortisation. While most assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by
two or more segments is allocated to the segments on a reasonable basis. Segment liabilities consist principally of payables, employee
benefits, accrued expenses, provisions and borrowings.
Business Segments
The entity operates in two primary business segments being the medical division focussing on high-end medical equipment distribution
in Asia Pacific and the Environmental division for manufacture of energy saving heat pump technology used for heating and cooling
systems internationally, and other investments/assets.
Geographical Segments
The Group predominantly operates in 5 geographical segments with manufacturing operations in China (ceased in early 2019) and
distribution in Australia, Korea, Thailand and Philippines.
The manufacturing operations in China have not been disclosed as a discontinued corporation, as the Group continues the acquisition
and sale of the same products.
Intersegment Transfers
There were no intersegment transfers.
NOTE 29: CASH FLOWS INFORMATION
2021
2020
Note
$000
$000
Reconciliation of Cash Flows from Operations with Profit After
Income Tax
Operating profit after income Tax
7,710
6,419
Non-cash items in profit
-Depreciation
13
668
684
- Amortisation of right-of-use assets
14
710
784
-Net exchange differences
(1,405)
259
-Profit/loss on disposal of assets/investments
(99)
(91)
-Change in fair value of financial assets
-
(27)
-Provision for annual leave and long service leave
(76)
166
-Impairment of receivables
96
205
-Depreciation investment properties
35
-
-Amortisation of intangible
128
85
-Provision for defined benefit plans
(377)
(621)
(Increase) / decrease in:
-Trade receivables
775
(4,438)
-Inventories
592
(317)
-Deferred Tax Asset
60
75
-Other assets
1,765
(1,498)
Increase/ (decrease) in:
-Trade creditors and accruals
(847)
3,703
-Contract liabilities
(3,038)
3,845
-Provision for warranty
102
(146)
-Income tax payable
225
40
Cash flows from operating activities
7,024
9,127
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 46
NOTE 30: RELATED PARTY DISCLOSURES
(a)
Equity interests in related parties
Details of the percentage of ordinary shares held in controlled entities are disclosed in Note 12 to the financial statements.
(b) Key management personnel
Details of key management personnel remuneration are disclosed in the Remuneration Report in the Directors’ Report, and in Note 5.
(c)
Directors’ equity holdings
Details of directors’ and other key management personnel’s equity holdings are disclosed in Note 5.
(d) Other transactions with key management personnel and related parties
Consolidated Group
2021
2020
$
$
Amount payable to key management personnel and other related parties
- Susan Walstab (John Walstab's sister)
-
65,610
- Youngchun Kim
-
145,546
-
211,156
Loans from key management personnel and other related parties
- John Walstab (unsecured)
-
264,078
- Drew Townsend
962,326
964,916
Accrued interest payable on loans from directors and directors related parties at 10% per
annum
- John Walstab
2,140,513
2,058,902
- Drew Townsend
222,863
109,964
3,325,702
3,397,861
Disclosed as:
Non-Current liability (Note 22)
-
-
Current liability (Note 22)
3,325,702
3,397,861
3,325,702
3,397,861
Payment for accountancy services to Hall Chadwick Chartered Accountants of which Drew
Townsend is a Partner
-
3,261
Payment for sales commission earnt (related to Susan Walstab, sister of John Walstab)
-
65,610
Interest expense/(income) on loans from/(to) Directors
- John Walstab
81,610
(329,539)
- Drew Townsend
43,448
(99,537)
(e) Loans from key management personnel
2021
Balance at
beginning of the
year
Interest payable
for the year
Loans
(repayments)
made during the
year
Balance at end of
the year
Highest balance in
the year
John Walstab
- Loan
264,078
-
(264,078)
-
264,078
- Accrued Interest
2,058,902
228,175
(146,564)
2,140,513
2,140,513
Drew Townsend
- Loan
964,916
-
(2,590)
962,326
962,326
- Accrued Interest
109,964
112,899
-
222,863
222,863
2020
John Walstab
- Loan
61,934
-
202,144
264,078
264,078
- Accrued Interest
4,626,245
329,539
(2,896,882)
2,058,902
2,058,902
Drew Townsend
- Loan
899,996
-
64,920
964,916
964,916
- Accrued Interest
10,427
99,537
-
109,964
109,964
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 47
NOTE 31: FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks:
1.
Market risk – including:
(i)
Foreign exchange risk
(ii)
Interest rate risk
(iii)
Price risk
2.
Credit risk, and
3.
Liquidity risk
1 (i). Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement
in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD functional currency
of the Group.
The Group does not hedge and therefore is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and
services in currencies other than the Group’s functional currency. The Group monitors movements in exchange rates.
The following table shows the foreign currency exposure on the financial assets and liabilities of the Group’s operations, denominated in
currencies other than the functional currency of the operations.
Converted to Australian dollars
2021
2020
$000
$000
Cash and Receivables:
China RMB
8
137
Euro
1
4
US dollars
73
18
New Zealand dollars
1,977
808
Korea WON
8,972
11,097
Thai Baht
9,918
7,256
Philippine Peso
624
789
Total amounts receivable in foreign currencies
21,573
20,109
Payables:
China RMB
259
217
Euro
1
1
US dollars
-
2,155
New Zealand dollars
1
6
Korea WON
4,157
10,699
Thai Baht
1,073
863
Philippine Peso
138
158
Total amounts payable in foreign currencies
5,629
14,099
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 48
NOTE 31: FINANCIAL RISK MANAGEMENT (CONTINUED)
1 (i). Foreign exchange risk (continued)
2021
2020
$000
$000
$000
$000
Financial Assets:
If foreign exchange rates changed by +10% (value of Australian dollar weakens) or -
10% (value of Australian dollar improves) with no change to any other amounts, the
following impact will be noted:
+10%
-10%
+10%
-10%
Increase/ (decrease) in profit
1,904
(2,328)
1,828
(2,234)
Increase/ (decrease) in net assets
1,904
(2,328)
1,828
(2,234)
Financial Liabilities:
If foreign exchange rates changed by +10% (value of Australian dollar weakens) or -
10% (value of Australian dollar improves) with no change to any other amounts, the
following impact will be noted:
+10%
-10%
+10%
-10%
Increase/ (decrease) in profit
499
(610)
1,272
(1,567)
Increase/ (decrease) in net assets
499
(610)
1,272
(1,567)
(ii). Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in
interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group is also exposed to earnings
volatility on floating rate instruments. Interest rate risk is managed using a mix of fixed and floating rate debt as detailed below.
Floating
Fixed Interest Rate Maturing
Non-Interest Bearing
Total
Interest Rate
Weighted
Average
Interest Rate
Less than 1
Year
1 to 5 Years
%
$ 000
$ 000
$ 000
$ 000
$ 000
Consolidated
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Financial assets:
Cash
0.1%
0.1%
11,945
8,765
-
-
-
-
-
-
11,945
8,765
Trade & Other
Receivables
-
-
-
-
-
-
14,842
14,963
14,842
14,963
Renewable Energy
Certificates
-
-
-
-
-
-
22
3
22
3
Shares in Listed
Companies
-
-
-
-
-
-
19
21
19
21
Other loans – non-
interest bearing
-
-
-
-
-
-
443
-
443
-
Loans
10%
10%
-
-
-
-
254
183
-
-
254
183
Term deposits
1.7%
1.7%
-
-
692
1,019
-
-
-
-
692
1,019
Deposits
-
-
-
-
-
-
1,616
2,065
1,616
2,065
Convertible note
-
-
-
-
413
380
-
-
413
380
Other financial
assets
-
-
-
-
-
-
6,156
5,884
6,156
5,884
Total financial
assets
11,945
8,765
692
1,019
667
563
23,098
22,936
36,402
33,283
Financial liabilities:
Lease liability
4.3%
4.3%
-
-
499
929
106
476
-
-
605
1,405
Bank and other
loans
13.2%
13.2%
-
- 6,753
7,435
-
-
1,097
1,457
7,850
8,892
Trade and other
creditors
-
-
-
-
-
-
11,586
12,281
11,586
12,281
Contract liabilities
-
-
-
-
-
-
4,039
7,077
4,039
7,077
Total financial
liabilities
-
- 7,252
8,364
106
476
16,722
20,815
24,080
29,655
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 49
NOTE 31: FINANCIAL RISK MANAGEMENT (CONTINUED)
1 (iii). Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices largely due to demand and supply factors for commodities.
The Group is exposed to movement in the market values of Renewable Energy Certificates (“RECs”) and shares in listed companies.
2. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counter parties of contract obligations
that could lead to a financial loss to the Group. The Group does not have any material credit risk exposure to any single receivable or
group of receivables under financial instruments entered into by the Group.
Credit risk is managed through the maintenance of procedures including the utilisation of systems for the approval, granting and renewal
of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and
counterparties, ensuring to the extent possible that customers and counterparties to transactions are of sound credit worthiness. Such
monitoring is used in assessing receivables for impairment. Within the Group, credit terms are generally 30 to 60 days from the invoice
date.
Risk is also minimised through investing any surplus funds in financial institutions that maintain a high credit rating.
The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral or other
security held, is equivalent to the carrying value of those financial assets as presented in the balance sheet.
3. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations
related to financial liabilities. The Group manages this risk through the following mechanisms:
•
preparing forward looking cash flow analysis in relation to its operational, investing and financing activities
•
monitoring undrawn credit facilities
•
maintaining a reputable credit profile
•
managing credit risk related to financial assets.
Financial liability maturity analysis
After 1 month,
within 1 year
1 to 5 Years
Total
$ 000
$ 000
$ 000
Consolidated
2021
2020
2021
2020
2021
2020
Financial liabilities:
Lease liability
499
929
106
476
605
1,405
Bank and other loans
7,351
8,892
-
-
7,351
8,892
Trade and other creditors
11,102
11,401
484
880
11,586
12,281
Contract liabilities
3,918
6,840
121
237
4,039
7,077
Total financial liabilities
22,870
28,062
711
1,593
23,581
29,655
For personal use only
Quantum Health Group Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
Page 50
NOTE 32: PARENT ENTITY INFORMATION
Consolidated Group
2021
2020
$ 000
$ 000
Current assets
16
-
Total assets
15,650
6,557
Current liabilities
5,439
4,807
Total liabilities
23,806
13,137
Shareholders' equity:
Issued capital
16,252
85,229
Retained earnings
(24,407)
(91,809)
(8,155)
(6,580)
Loss for the year
(1,576)
(1,379)
Total comprehensive loss
(1,576)
(1,379)
NOTE 33: COMPANY DETAILS
The registered office of the Company and the principal place of business is:
Quantum Health Group Limited
22 Rosebery Avenue, Rosebery, NSW 2018 Australia
NOTE 34: IMPACT OF COVID-19 AND EVENTS SUBSEQUENT TO BALANCE DATE
The impact of COVID-19 pandemic is ongoing. Management is closely monitoring the evolution of this pandemic and the response of the
governments, particularly restrictions in place to contain this virus and how this will impact the Group and the economy, as a whole.
The Group continues to achieve budgeted results up to 31 August 2021 and management believes it will continue to do so even through
the extent of the impact COVID-19 may have on its future liquidity, financial performance and position and operations is uncertain and
cannot be reasonably estimated at the date these financial statements were issued.
With significant term deposit and cash on hand, the group is positively placed to manage the impact of this health crisis in the short term.
Management is currently monitoring and assessing the ongoing development and have appropriate plans in place to respond accordingly.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect:
(a)
the Group’s operations in future financial years;
(b)
the results of those operations in future financial years;
(c)
the Group’s state of affairs in future financial years.
For personal use only
Quantum Health Group Limited
Page 51
SECURITIES EXCHANGE INFORMATION
(a) Distribution of Shareholders as at 22 September 2021
Fully Paid Ordinary Shares
Holdings Ranges
Holders
Total Units
%
1-1,000
90
39,646
0.001
1,001-5,000
223
710,464
0.060
5,001-10,000
263
2,148,016
0.190
10,001-100,000
505
17,964,719
1.590
100,001-9,999,999,999
251
1,107,445,446
98.150
Totals
1,332
1,128,308,291
100.000
(b) There are currently 401 holders with less than a marketable parcel of 7,576 shares
(c) The names of the substantial shareholders and the number of shares to which each of the substantial shareholder and their
associates have a relevant interest, as disclosed in the substantial shareholding notices given to the Company, are set out below:
Directors
Shares
J. Walstab
514,712,393
D.A. Townsend
125,138,380
(d) Unquoted equity securities
There are no options issued.
(e) Voting Rights
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has
one vote on a show of hands.
(f) 20 Largest Shareholders – Ordinary Shares as at 22 September 2021
Name/Address 1
Balance
%
MR JOHN WALSTAB
512,182,377
45.394%
REALM GROUP PTY LTD
108,151,695
9.585%
MR PHILLIP SIDNEY
85,000,000
7.533%
YOUNGCHUN KIM
44,000,000
3.900%
MRS SANDRA JOAN MCDONALD & MR ANDREW MCDONALD
18,528,909
1.642%
MR RICHARD ALBARRAN
16,222,754
1.438%
MR DAVID KENNEY
16,222,754
1.438%
MR DREW TOWNSEND
16,222,752
1.438%
FINCLEAR SERVICES NOMINEES PTY LIMITED
16,000,000
1.418%
MR DAVID FAIRFULL
12,978,202
1.150%
MRS SANDRA JOAN MCDONALD & MR ANDREW MCDONALD
11,505,000
1.020%
MR JOHN ROBERT MCGEACHIE & MRS JENNIFER ANN MCGEACHIE
11,469,949
1.017%
DIXSON TRUST PTY LIMITED
11,422,414
1.012%
MR BARRY RAYMOND NELSON & MR BRAD ANDREW NELSON
8,400,000
0.744%
DONG SUN IM
6,000,000
0.532%
SEOK SANGYUP
6,000,000
0.532%
JANG HW
6,000,000
0.532%
MR ANDREW MCDONALD
5,856,000
0.519%
DEBUSCEY PTY LTD
5,684,913
0.504%
JETAN PTY LTD
5,000,000
0.443%
For personal use only
Quantum Health Group Limited
Page 52
SECURITIES EXCHANGE INFORMATION (CONTINUED)
(g) On-market buy-backs
There is no on-market buy-back currently in place in relation to the securities of the Company.
(h) Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Stock
Exchange Limited.
MATERIAL DIFFERENCE TO APPENDIX 4E
There are no material differences to the financial statements set out in this report when compared to the information set out
in the Company’s Appendix 4E preliminary final statement released to the ASX on 30 August 2021.
For personal use only