Resonance Health Limited
ABN 96 006 762 492
Annual Report - 30 June 2021
Resonance Health Limited
Contents
30 June 2021
Corporate Directory
Review of Operations
Directors' Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the members of Resonance Health Limited
Shareholder Information
2
3
5
17
18
19
20
21
22
54
55
59
1
Resonance Health Limited
Corporate Directory
30 June 2021
Directors
Dr Martin Blake - Non-executive Chairman
Mr Mitchell Wells - Managing Director
Mr Simon Panton - Non-executive Director
Dr Travis Baroni - Non-executive Director
Company secretary
Mr Nicholas Allan
Registered office
Principal place of business
Share register
Auditor
Solicitors
Ground Floor
Suite 2, 141 Burswood Road
BURSWOOD WA 6100
T: +61 8 9286 5300
F: +61 8 9286 5399
Ground Floor
Suite 2, 141 Burswood Road
BURSWOOD WA 6100
T: +61 8 9286 5300
F: +61 8 9286 5399
Advanced Share Registry Ltd
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 8 9389 8033
Fax: +61 8 93897871
HLB Mann Judd (WA) Partnership
Level 4
130 Stirling Street
Perth WA 6000
Steinepreis Paganin
Level 4, The Reed Building
16 Milligan Street
Perth WA 6000
Bankers
National Australia Bank Limited
Stock exchange listing
Resonance Health Limited shares are listed on the Australian Securities Exchange
(ASX code: RHT)
Website
www.resonancehealth.com
email: info@resonancehealth.com
2
Resonance Health Limited
Review of Operations
30 June 2021
Resonance Health Limited (ASX: RHT) (“Resonance Health” or the “Company”) presents its Review of Operations for the
year ended 30 June 2021.
About Resonance Health
Resonance Health is an Australian healthcare technology and services company, specialising in the development and
delivery of noninvasive medical imaging software and services.
The Company’s products are used globally by clinicians in the diagnosis and management of human diseases and by
pharmaceutical and therapeutic companies in their clinical trials. Resonance Health has gained endorsement by leading
physicians worldwide for consistently providing high quality quantitative measurements essential in the management
of particular diseases.
Resonance Health’s dedication to scientific rigour and quality management has enabled it to achieve regulatory
clearances for a range of Software as a Medical Device (SaMD) products in the US, Europe, and Australia and to proudly
carry ISO 13485 certification for the design and manufacture of medical devices. A number of these SaMD products
incorporate the use of Artificial Intelligence (AI) in order to improve speed and efficiency of service delivery:
FerriScan® - provides an accurate measurement of liver iron concentration (LIC) through a non-invasive MRI-based
technology, for use in the assessment of individuals with iron overload conditions. FerriScan is internationally
recognised as the gold standard in LIC assessment
FerriSmart® - an AI-driven system for the automated real-time measurement of LIC in patients using non-invasive
MRI-based technology
HepaFat-AI® - an AI-driven system for the automated real-time multi-metric measurement of liver fat in patients
using non-invasive MRI-based technology, for use in the assessment of individuals with confirmed or suspected
fatty liver disease
The Company has an active development pipeline of additional medical imaging analysis products and services,
including, Alert-PE®, an AI tool for the automated review of chest CT scans of patients with suspected pulmonary
embolism.
Sales Revenue
Sales revenue for the year was $3.78 million, a 3% increase on the previous year of $3.67 million which was achieved
despite the impact of COVID-19 due to global lockdowns and
accessibility issues for patients to scanning centres during the
global pandemic.
Sales Revenue
31% of sales revenue for the year was derived from the United
States and Canada with the UK contributing 21% and the
balance spread across Europe, Australia and Asia. Commercial
revenue accounted for 59% of total revenue with clinical trials
and other studies making up the balance. Receipts from
customers were $3.68 million, up 2% from the previous year’s
result.
$4.00M
$3.50M
$3.00M
$2.50M
$2.00M
$1.50M
$1.00M
$0.50M
-
Net Profit After Tax
FY 2018
FY 2019
FY 2020
FY 2021
The Company recorded a Net Profit after Tax for the year of $585,858, compared with a Net Loss after Tax for FY2020
of $715,076.
Research and Development Activities
Resonance Health recorded a number of significant achievements during the year in respect of its artificial intelligence
(“AI”), imaging and molecular medicine R&D workstreams:
FerriSmart – The Company reached agreement for the incorporation of Resonance’s FerriSmart AI-based liver-iron
concentration measurement tool into the Siemens Healthineers Digital Marketplace. This follows previous
3
Resonance Health Limited
Review of Operations
30 June 2021
agreements allowing FerriSmart to be sold as part of 3DR’s post-processing services to their customers in the
United States and via Blackford Analysis’s platform.
HepaFat-AI – The Company achieved regulatory clearance from the US Food & Drug Administration (“FDA”), the
Australian Therapeutic Goods Administration (“TGA”) and European CE Marking for HepaFat-AI, the Company’s
fully automated AI-based liver fat quantification tool (see ASX announcements dated 9 December 2020, 18
February 2021 and 24 February 2021). In addition, the HepaFat-AI technology was integrated into channel partner
Blackford Analysis’s platform during the year pursuant to an Alliance Partner Agreement (see ASX announcement
24 December 2020).
Alert-PE – The Company continued to develop its Alert-PE tool, a radiological software tool that performs fully
automated AI identification of pulmonary embolism (“PE”) using computer tomography pulmonary angiogram
(“CTPA”) scans. The Company is progressing the Alert-PE product through validation of its performance and has
recently (post period) lodged an application for a pre-submission meeting with the FDA.
Antiviral Therapies Project - The Company has also progressed its molecular medicine R&D workstream aimed at
treating liver-related diseases. Following testing the Company has selected a lead antisense oligonucleotide
(“ASO”) compound which has been named AS3 and which is intended to target a human host protein essential to
the lifecycle of numerous human viruses, including Hepatitis B (“HBV”). In a preclinical cell model of HBV infection,
AS3 demonstrated statistically significant viral suppression compared to a control ASO. In view of the positive data
and market opportunity, the Company has extended the testing program to include other important viral diseases
and has commenced a liver dosing study in humanized liver mice.
As part of these R&D workstreams, the Company received an R&D tax incentive of $242,334 for eligible R&D work
expended by the Company for the financial year ended 30 June 2021.
The Company continues to assess opportunities to expand its core business, with R&D expenditure targeted specifically
towards the diversification of in-house R&D projects by establishing three key areas of focus, artificial intelligence,
imaging, and molecular medicine.
Cash at Bank
Cash at Bank as at 30 June 2021 totaled $8.86 million, in
comparison to the 30 June 2020 cash balance of $6.97 million
which reflected strong Cash Flows from Operating Activities
during the year of $1.17 million. The financial year included an
R&D tax incentive refund of $242,334 and $1.25 million from the
issue of fully paid ordinary shares on the exercise of options.
The Company has no debt.
Management Changes and Strategy for Growth
$9.0M
$8.0M
$7.0M
$6.0M
$5.0M
$4.0M
$3.0M
$2.0M
$1.0M
-
Cash at Bank
FY 2018
FY 2019
FY 2020
FY 2021
Mr. Mitchell Wells was appointed Managing Director on 28 June
2021 following the resignation of Ms. Alison Laws as CEO of Resonance Health. Mr. Wells commenced working with
Resonance Health in April 2017. He initially provided strategy, contract, and corporate advisory services and in early
2018 he was invited to join the Board of Directors. He has served as a Director and a consultant of the Company since
February 2018. Mr. Nicholas Allan was appointed Chief Financial Officer and Company Secretary during the year. Post
year end, Mr. Ajay Nair was appointed as GM – Global Sales & Marketing.
Going into FY2021 the Company is focused on pursuing organic revenue growth from its existing regulatory-approved
product suite, building product and brand awareness in its current and new markets, pursuing strategic alliances to
accelerate product distribution and progressing its R&D portfolio toward clinical validation and regulatory approval.
4
Resonance Health Limited
Directors' Report
30 June 2021
The Directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group') consisting of Resonance Health Limited (referred to hereafter as the 'Company' or 'parent
entity') and the entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
The following persons were Directors of Resonance Health Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Dr Martin Blake
Mr Mitchell Wells
Mr Simon Panton
Dr Travis Baroni
Principal activities
The Company’s business involves the development and commercialisation of technologies and services for the
quantitative analysis of radiological images in a regulated and quality controlled environment.
The Company’s core product is FerriScan, a non-invasive liver diagnostic technology used for the measurement of iron
in the liver.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The profit for the Group after providing for income tax amounted to $585,858 (30 June 2020: loss of $715,076).
Significant changes in the state of affairs
Agha Shahzad resigned as the CFO and Company Secretary on 8 April 2021. Mitchell Wells was appointed as Company
Secretary.
Nick Allan was appointed as CFO and Company Secretary on 31 May 2021.
The resignation of the CEO Alison Laws was announced on 4 June 2021 and her final day worked was 2 July 2021.
Mitchell Wells transitioned to the role of Executive Director on 4 June 2021 and Managing Director effective 2 July
2021.
297,620 fully-paid ordinary shares were issued (subject to satisfaction of conditions) pursuant to the Licence
Agreement with Telethon Kids Institute and Erasmus University Medical Centre on 11 June 2021.
The Controlled Placement Agreement ("CPA") with Acuity Capital increased from $5m to $7.75m with the expiry
extended to 31 July 2023. Following the increase and extension the available capacity under the CPA is $5m. There
were no fees or costs associated with increase and extension of the CPA.
On 30 June 2021 the following unlisted options were cancelled:
●
●
1,000,000 unlisted options exercisable at $0.10 on or before 1 January 2022
1,000,000 unlisted options exercisable at $0.125 on or before 1 January 2022
There were no other significant changes in the state of affairs of the Group during the financial year.
5
Resonance Health Limited
Directors’ Report
30 June 2021
Matters subsequent to the end of the financial year
Mr Mitchell Wells was appointed as Managing Director on 2 July 2021, following the resignation of CEO Ms Alison
Laws.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not
been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the
Group.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Dr Martin Blake
Non-executive Chairman
MBBS, FRANZCR, FAANMS, MBA, FAICD
Dr Blake is a Radiologist and Nuclear Physician and brings significant technical and
industry experience to Resonance Health. He has been a Partner of Perth
Radiological Clinic since 1997 and is currently the Chairman of that Company.
Dr Blake has an MBA from Melbourne University, is a Fellow of the Australian
Institute of Company Directors, and holds directorships on a number of private
Company boards.
None
None
Chairman of the Remuneration Committee
Member of the Audit and Risk Committee
6,464,677 ordinary shares
1,000,000 options exercisable at $0.150 on or before 28 November 2022
1,000,000 options exercisable at $0.175 on or before 28 November 2022
1,000,000 options exercisable at $0.200 on or before 28 November 2022
6
Resonance Health Limited
Directors’ Report
30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Mr Mitchell Wells
Managing Director (appointed a Non-executive Director on 28 February 2018 and
appointed Managing Director on 2 July 2021)
L.LB, B.Comm, Dip. Aviation (CPL)
Mr Wells is an experienced senior executive with commercial and legal experience
in Australia, the United States of America and the United Kingdom. He has served
as a Director and worked as a senior executive of public and private companies
including ASX and US Nasdaq listed public companies. He has served as Chair of
two non-profit organisations and he has previously served as the company
secretary of two ASX listed public companies and as the corporate secretary of a
US Nasdaq listed public company. Mr. Wells previously provided part-time
consulting services to the Company before transitioning to Managing Director on
2 July 2021.
None
Lonestar Resources US Inc. – Nasdaq Listed US Public Company
Member of the Audit and Risk Committee
Member of the Remuneration Committee
600,000 ordinary shares
1,000,000 options exercisable at $0.150 on or before 28 November 2022
1,000,000 options exercisable at $0.175 on or before 28 November 2022
1,000,000 options exercisable at $0.200 on or before 28 November 2022
Mr Simon Panton
Director — Non-Executive (appointed 5 October 2009)
Mr Panton has been a strong supporter of the Company and the FerriScan
technology over a number of years and is a major shareholder of Resonance
Health. Mr Panton brings skills in business and marketing having run his own
successful business.
None
None
Member of the Audit and Risk Committee
Member of the Remuneration Committee
73,846,350 ordinary shares
1,000,000 options exercisable at $0.150 on or before 28 November 2022
1,000,000 options exercisable at $0.175 on or before 28 November 2022
1,000,000 options exercisable at $0.200 on or before 28 November 2022
Dr Travis Baroni
Director — Independent and Non-Executive (appointed 25 November 2016)
Mr Baroni has broad experience across industrial research, commercialisation of
technology, asset valuations and investment banking services. He has managed
innovation development and technology strategy in a large company setting as
well as being an active investor in early stage investments. He has worked in
investment banking, providing advisory services to equity capital market
transactions, corporate research and valuations to clients.
None
None
Chairman of the Audit and Risk Committee
Member of the Remuneration Committee
350,000 ordinary shares
600,000 options exercisable at $0.150 on or before 28 November 2022
600,000 options exercisable at $0.175 on or before 28 November 2022
600,000 options exercisable at $0.200 on or before 28 November 2022
7
Resonance Health Limited
Directors’ Report
30 June 2021
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Nicholas Allan - B.Com ACA
Position: Company Secretary and Chief Financial Officer (appointed 31 May 2021)
Experience: Mr Allan is a Chartered Accountant with over 25 years’ experience in commerce, corporate advisory and
public practice. Mr Allan has previously held several senior finance positions including Chief Financial Officer and
Company Secretary of a number of ASX-listed public companies.
Mr Mitchell Wells - L.LB, B.Comm, Dip. Aviation (CPL)
Position: Company Secretary (appointed 8 April 2021)
Mr Agha Shahzad Pervez - B.Sc (IT) Hons, M.Com (Accounting)
Position: Company Secretary and Chief Financial Officer (appointed 29 November 2017 – resigned 8 April 2021)
Experience: Mr Pervez has over ten years’ experience in managing the financial obligations of an ASX listed corporation.
He joined Resonance Health in 2009 and has in-depth knowledge of all financial and operational aspects of the
Company. Agha has also been responsible for the handling of EMDG rebates and R&D Tax Incentive claims for the last
several years.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2021,
and the number of meetings attended by each Director were:
Full Board
Attended
Held
Remuneration Committee Audit and Risk Committee
Attended
Attended
Held
Held
Dr M Blake
Mr M Wells
Mr S Panton
Dr T Baroni
9
9
9
9
9
9
9
9
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
Held: represents the number of meetings held during the time the Director held office.
Remuneration Report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all Directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
8
Resonance Health Limited
Directors’ Report
30 June 2021
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for
the delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key
criteria for good reward governance practices:
●
set competitive remuneration packages to attract the highest calibre of employees in the context of prevailing
market conditions, particular experience of the individual concerned and the overall performance of the
Company; and
reward employees for performance that results in long-term growth in shareholder wealth, with the objective of
ensuring maximum stakeholder benefit from the retention of a high-quality board and executive team.
●
The Remuneration Committee is responsible for determining and reviewing remuneration arrangements for its
Directors and executives. The performance of the Group depends on the quality of its Directors and executives. The
remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
In consultation with external remuneration consultants, the Remuneration Committee has structured an executive
remuneration framework that is market competitive and complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered
that it should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and
delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of
value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive Director and executive Director
remuneration is separate.
Non-executive Directors remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and
retain Directors of a high calibre, whilst incurring a cost that is acceptable to shareholders.
Non-executive Directors’ fees not exceeding an aggregate of $250,000 per annum have been approved by the
Company in a general meeting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Directors is reviewed annually. The Board considers fees paid to non-executive directors of
comparable companies when undertaking the annual review process.
Each of the non-executive Directors receives a fixed fee for their services as directors. There is no direct link between
service fees paid to any of the Directors and corporate performance.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
which has both fixed and variable components.
9
Resonance Health Limited
Directors’ Report
30 June 2021
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by
the Remuneration Committee based on individual and business unit performance, the overall performance of the
Group and comparable market remunerations.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance
indicators ('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and
product management.
The long-term incentives ('LTI') include long service leave and share-based payments.
All bonuses and incentives are linked to predetermined performance criteria. The Board may, however, exercise its
discretion in relation to approving incentives and bonuses.
The Remuneration Committee is of the opinion that the continued improved results can be attributed in part to the
adoption of performance based compensation and is satisfied that this improvement will continue to increase
shareholder wealth if maintained over the coming years.
Adoption of Remuneration Report
The remuneration report for the year ended 30 June 2020 was voted in favour at the 2020 AGM.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following Directors of Resonance Health Limited:
●
●
●
●
Dr Martin Blake
Mr Mitchell Wells
Mr Simon Panton
Dr Travis Baroni
And the following persons:
●
●
●
Ms Alison Laws - Chief Executive Officer (resigned 2 July 2021)
Mr Agha Shahzad – Company Secretary & Chief Financial Officer (resigned 8 April 2021)
Mr Nicholas Allan – Company Secretary & Chief Financial Officer (appointed 31 May 2021)
10
Resonance Health Limited
Directors’ Report
30 June 2021
2021
Non-Executive Directors:
Dr M Blake
Mr S Panton
Dr T Baroni
Executive Directors:
Mr M Wells*
Other Key Management
Personnel:
Ms A Laws
Mr AS Pervez**
Mr N Allan
Short-term benefits
Post-
employ-
ment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
54,795
36,530
36,530
150,500
266,147
168,913
17,308
730,723
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,205
3,470
3,470
-
-
-
-
-
-
-
-
60,000
40,000
40,000
-
150,500
23,038
11,290
1,644
48,117
-
28,626
-
28,626
1,000
1,000
-
2,000
290,185
209,829
18,952
809,466
* Mr M Wells remuneration represents $40,000 director fees and $110,500 consulting fees. Mr Wells was appointed
as an executive director effective 4 June 2021, and from 2nd July 2021 Mr Wells was appointed Managing Director.
** Mr AS Pervez resigned on 8 April 2021, the cash salary and fees includes $50,067 of unused annual leave paid out
on termination of employment.
Short-term benefits
Post-
employ-
ment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled**
$
Total
$
54,795
130,000
36,530
36,530
-
-
-
-
250,000
150,000
657,855
27,000
15,000
42,000
-
-
-
-
-
-
-
5,205
-
3,470
3,470
-
-
-
-
423,975
423,975
423,975
423,975
483,975
553,975
463,975
463,975
26,315
15,675
54,135
1,000
141,322
-
304,315
-
321,997
- 1,838,222 2,592,212
2020
Non-Executive Directors:
Dr M Blake
Mr M Wells*
Mr S Panton
Dr T Baroni
Other Key Management
Personnel:
Ms A Laws
Mr AS Pervez
* Mr M Wells remuneration represents $40,000 director fees and $90,000 consulting fees.
11
Resonance Health Limited
Directors’ Report
30 June 2021
** The share-based remuneration is a non-cash expense of $140,322 for employee options and $1,695,900 for Director
options as a result of all options being expensed out this financial year. The Directors options were approved by
shareholders at the Company’s AGM held on 28 November 2019. The valuation is based on the grant date according
to AASB 2, and no director has exercised any of their options.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Dr M Blake
Mr S Panton
Dr T Baroni
Executive Directors:
Mr M Wells
Other Key Management Personnel:
Ms A Laws
Mr AS Pervez
Mr N Allan
Fixed remuneration
2020
2021
Share based payments
2021
2020
100%
100%
100%
12%
9%
9%
100%
23%
99%
99%
100%
90%
51%
-
-
-
-
-
1%
1%
-
88%
91%
91%
77%
10%
49%
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Details:
Name:
Title:
Agreement commenced:
Details:
Name:
Title:
Details:
Mr Pervez
Company Secretary & Chief Financial Officer
29 November 2017
The employment agreement provides for a salary of $150,000 pa exclusive of
superannuation and a termination notice of 4 weeks. This salary increased to
$165,000 pa exclusive of superannuation during the year. The agreement
terminated on 8 April 2021 due to Mr. Pervez’ resignation.
Ms Laws
Chief Executive Officer
23 February 2018
The employment agreement provides for a salary of $250,000 pa exclusive of
superannuation and a termination notice of 3 months by the Company or Ms
Laws. This salary increased to $300,000 pa exclusive of superannuation during the
year. The agreement terminated on 2 July 2021 due to Ms. Laws’ resignation.
Mr Wells
Consultancy Services Agreement
Mr Wells has a Consultancy Agreement with Resonance Health Analysis Services
and provides commercial, investor relations, and management consulting services
on a part-time basis. This Consultancy Agreement provides for consultancy fees of
$90,000 per annum. The agreement may be terminated on 30 days notice by
mutual agreement. The agreement terminated on 30 June 2021 due to Mr. Wells
taking up the role of Managing Director.
12
Resonance Health Limited
Directors’ Report
30 June 2021
Name:
Title:
Agreement commenced:
Details:
Name:
Title:
Agreement commenced:
Details:
Mr Wells
Managing Director
1 July 2021
The employment agreement provides for a salary of $236,432 pa exclusive of
superannuation and a termination notice of 3 months by the Company or Mr
Wells.
Mr Allan
Company Secretary & Chief Financial Officer
31 May 2021
The employment agreement provides for a salary of $205,479.45 pa exclusive of
superannuation and a termination notice of 3 months by the Company or Mr
Allan.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
Details of shares issued to Directors and other key management personnel as part of compensation during the year
ended 30 June 2021 are set out below:
Name
Mr AS Pervez
Ms A Laws
Date
Shares
Issue price
$
29 December 2020
29 December 2020
4,878
4,878
$0.205
$0.205
1,000
1,000
Options
There were no options over ordinary shares issued during the year ended 30 June 2021 to Directors and other key
management personnel as part of compensation that were outstanding as at 30 June 2021.
There were no options over ordinary shares granted to or vested by Directors and other key management personnel
as part of compensation during the year ended 30 June 2021.
Additional information
The earnings of the Group for the five years to 30 June 2021 are summarised below:
2021
$’000
2020
$’000
2019
$’000
2018
$’000
2017
$’000
Sales revenue
EBITDA
EBIT
Profit/(loss) after income tax
3,779
722
357
637
3,668
653
(994)
(715)
3,625
1,150
904
1,270
2,896
(62)
(243)
225
2,485
(473)
(667)
(304)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)
0.16
0.14
0.15
(0.17)
0.11
0.31
0.02
0.06
0.02
(0.08)
2021
2020
2019
2018
2017
13
Resonance Health Limited
Directors’ Report
30 June 2021
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at Received
the start of as part of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Dr M Blake
Mr M Wells
Dr T Baroni *
Mr S Panton
Ms A Laws
Mr AS Pervez **
Mr N Allan
6,464,677
600,000
500,000
73,546,350
9,091
9,091
-
81,129,209
-
-
-
-
-
-
132,500
300,000
4,878 10,000,000
2,500,000
4,878
-
-
9,756 12,932,500
-
-
(282,500)
6,464,677
600,000
350,000
- 73,846,350
- 10,013,969
-
-
(2,796,469) 91,274,996
(2,513,969)
-
T Baroni had an off-market transfer of 282,500 ordinary shares.
*
** A Shahzad disposed of 500,000 ordinary shares and resigned 8 April 2021.
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Options over ordinary shares
Dr M Blake
Mr M Wells
Dr T Baroni *
Mr S Panton
Ms A Laws
Mr AS Pervez **
Mr N Allan
Balance at
the start of
the year
Granted
Exercised
Expired/
off market
transfer/
other
Balance at
the end of
the year
3,000,000
3,000,000
3,000,000
3,000,000
10,000,000
3,500,000
-
25,500,000
-
-
-
-
-
-
-
-
- (10,000,000)
(2,500,000)
-
-
-
- (12,500,000)
-
-
(1,200,000)
-
-
(1,000,000)
-
3,000,000
3,000,000
1,800,000
3,000,000
-
-
-
(2,200,000) 10,800,000
T Baroni had an off-market transfer of 1,200,000 unlisted options.
*
** A Shahzad resigned 8 April 2021.
This concludes the remuneration report, which has been audited.
14
Resonance Health Limited
Directors’ Report
30 June 2021
Shares under option
Unissued ordinary shares of Resonance Health Limited under option at the date of this report are as follows:
Type
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Expiry date
13 June 2022
1 December 2022
28 November 2022
28 November 2022
28 November 2022
Exercise
price
Number
under option
$0.100
$0.100
$0.150
$0.175
$0.200
1,000,000
200,000
4,000,000
4,000,000
4,000,000
13,200,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue
of the Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Resonance Health Limited were issued during the year ended 30 June 2021 and up to
the date of this report on the exercise of options granted:
Expiry date
9 March 2021
9 March 2021
9 March 2021
9 March 2021
13 June 2022
Exercise
price
Number of
shares issued
$0.030
$0.050
$0.075
$0.100
$0.100
2,500,000
3,250,000
4,500,000
4,750,000
2,000,000
17,000,000
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a
Director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives
of the Company against a liability 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.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
15
Resonance Health Limited
Directors’ Report
30 June 2021
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 24 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 24 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for
the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
●
Auditor’s Independence Declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this Directors’ Report.
Auditor
HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the Directors
___________________________
Dr Martin Blake
Chairman
29 September 2021
Perth, Western Australia
16
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Resonance Health Limited for
the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
29 September 2021
M R Ohm
Partner
17
Resonance Health Limited
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
Revenue
Other income
Expenses
Depreciation expense
Amortisation expense
Share-based payments
Marketing & travel
Consulting and professional services
Employee benefits expense
Research and development
Statutory and compliance
Foreign exchange loss
Other expenses
Profit/(loss) before income tax benefit
Note
Consolidated
2021
$
2020
$
5
6
3,778,914
3,668,184
243,577
231,239
(74,993)
(289,166)
(34,227)
(241,051)
(135,264)
(1,970,270)
(393,925)
(211,628)
(88,243)
(240,200)
(75,364)
(265,208)
(1,851,223)
(236,457)
(108,822)
(1,719,589)
(152,280)
(215,917)
(4,024)
(223,239)
343,524
(952,700)
Income tax benefit
7
242,334
237,624
Profit/(loss) after income tax benefit for the year attributable to the owners of
Resonance Health Limited
20
585,858
(715,076)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income / (loss) for the year attributable to the owners of
Resonance Health Limited
585,858
(715,076)
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Cents
Cents
33
33
0.13
0.13
(0.17)
(0.17)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
18
Resonance Health Limited
Statement of Financial Position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2021
$
2020
$
8
9
10
11
12
13
10
14
15
16
17
15
8,856,820
790,375
43,008
9,690,203
6,974,237
765,606
39,871
7,779,714
52,481
55,925
2,594,630
45,900
2,748,936
27,431
111,849
2,532,122
45,900
2,717,302
12,439,139 10,497,016
492,508
60,105
26,924
32,201
611,738
385,272
55,998
75,821
13,843
530,934
-
-
60,105
60,105
611,738
591,039
11,827,401
9,905,977
18
19
20
73,882,788 72,565,449
2,045,950
(64,119,564) (64,705,422)
2,064,177
11,827,401
9,905,977
The above statement of financial position should be read in conjunction with the accompanying notes
19
Resonance Health Limited
Statement of Changes in Equity
For the year ended 30 June 2021
Consolidated
Foreign
currency
translation
reserve
$
Issued
capital
$
Options
reserve
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2019
69,674,199
(270,580)
480,307 (63,990,346)
5,893,580
Loss after income tax benefit for the year
Other comprehensive income for the year,
net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction
costs (note 18)
Share-based payments (note 34)
-
-
-
-
-
-
-
-
-
(715,076)
(715,076)
-
-
(715,076)
(715,076)
2,891,250
-
-
-
-
1,836,223
-
-
2,891,250
1,836,223
Balance at 30 June 2020
72,565,449
(270,580)
2,316,530 (64,705,422)
9,905,977
Consolidated
Foreign
currency
translation
reserve
$
Issued
capital
$
Options
reserve
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2020
72,565,449
(270,580)
2,316,530 (64,705,422)
9,905,977
Profit after income tax benefit for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction
costs (note 18)
Share-based payments (note 34)
1,250,000
67,339
-
-
-
-
-
-
-
-
585,858
585,858
-
-
585,858
585,858
-
18,227
-
-
1,250,000
85,566
Balance at 30 June 2021
73,882,788
(270,580)
2,334,757 (64,119,564) 11,827,401
The above statement of changes in equity should be read in conjunction with the accompanying notes
20
Resonance Health Limited
Statement of Cash Flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employee
Interest received
Interest and other finance costs paid
Grants received
Income taxes refunded
Note
Consolidated
2021
$
2020
$
3,679,488
(3,102,424)
3,601,142
(2,654,492)
577,064
45,624
(4,103)
307,595
242,334
946,650
47,639
(9,135)
88,000
237,624
7
Net cash from operating activities
32
1,168,514
1,310,778
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
11
13
(44,119)
(351,674)
(2,106)
(248,526)
Net cash used in investing activities
(395,793)
(250,632)
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of lease liabilities
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
18
1,250,000
-
(51,895)
2,891,250
(15,000)
(51,671)
1,198,105
2,824,579
1,970,826
6,974,237
(88,243)
3,884,725
3,081,192
8,320
Cash and cash equivalents at the end of the financial year
8
8,856,820
6,974,237
The above statement of cash flows should be read in conjunction with the accompanying notes
21
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 1. General information
The financial statements cover Resonance Health Limited as a Group consisting of Resonance Health Limited and the
entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars,
which is Resonance Health Limited's functional and presentation currency.
Resonance Health Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Suite 3, 141 Burswood Road
BURSWOOD WA 6100
T: +61 8 9286 5300
F: +61 8 9286 5399
A description of the nature of the Group's operations and its principal activities are included in the Directors’ Report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 September
2021. The Directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and settlements of liability in the ordinary course of business.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 29.
22
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Resonance Health
Limited ('Company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended.
Resonance Health Limited and its subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for
the allocation of resources to operating segments and assessing their performance. The Board of Directors have been
identified as the CODM.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Resonance Health Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in
equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed
of.
Revenue recognition
Refer to note 5 for accounting policy.
23
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached conditions.
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.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent
that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Resonance Health Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated
group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied
the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members
of the tax consolidated group.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
24
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is
held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there
is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
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 14 - 90 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected
loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
3-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the
assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
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 Group 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.
25
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
Intangible assets
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as
incurred.
An intangible asset arising from development expenditure on an internal project is recognised if, and only if, all of the
following have been demonstrated:
●
●
●
●
●
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probably future economic benefits;
The availability of adequate technical, financial and other resources to complete development and to use or sell
the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
●
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.
The useful life used in the calculation of amortisation is 10 years.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it
is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of
the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If
the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
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.
26
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are measured at the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the
amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the
impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the Group receives the services that entitle the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award,
the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The
amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less
amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying the
Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at
the reporting date.
●
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid
to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
27
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award
is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on
its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Resonance Health Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive
potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
28
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 2. Significant accounting policies (continued)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The Group
has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are discussed below.
Impairment of intangibles
The Group determines whether intangibles with indefinite useful lives are impaired at least on an annual basis. This
requires an estimation of the recoverable amount of the cash generating units to which the intangibles with indefinite
useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of
intangibles with indefinite useful lives are discussed in note 13.
Additionally, the Group assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Group that may indicate impairment triggers. Recoverable amounts of relevant assets are reassessed
using value-in-use calculations which incorporate various key assumptions.
With respect to cash flow projections growth rates have been factored into valuation models for the next five years
on the basis of management’s expectations regarding the Group’s continued ability to increase market share based on
contractual obligations already in place and historical sales growth rates.
Historic Group averages have been used to reflect projected cash flow growth rates in year 1 and year 2. In subsequent
periods a consistent growth rate has been attached as a conservative estimate for use in the impairment calculation.
The directors acknowledge that there is potential uncertainty surrounding budgeted commercial income as a result of
the COVID-19 pandemic. As a result, the projected cash flows have been adjusted. For commercial income, a reduced
growth rate of 10% has been adopted.
Pre-tax discount rate of 10% which includes a risk component, has been used throughout the value-in-use model.
Development expenditure is considered to be sensitive to these assumptions as they are not ready for use. Therefore
sensitivity analyses of 5% and 10% reduction in revenue and the use of a pre-tax discount rate of 15% have been
calculated and did not indicate an impairment.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking
into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets
and liabilities within the next annual reporting period but may impact profit or loss and equity.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.
29
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Fair value measurement hierarchy
The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to
determine what is significant to fair value and therefore which category the asset or liability is placed in can be
subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on
unobservable inputs.
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. 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.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets
at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. Where the final tax outcome of
these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability.
Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or
purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when
ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances
that create an economical incentive to exercise an extension option, or not to exercise a termination option, are
considered at the lease commencement date. Factors considered may include the importance of the asset to the
Group's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties;
existence of significant leasehold improvements; and the costs and disruption to replace the asset. The Group
reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if
there is a significant event or significant change in circumstances.
Note 4. Operating segments
Identification of reportable operating segments
The chief operating decision maker is considered to be the Company’s Board of Directors. The Group’s operating
segments are determined by differences in the type of activities performed. The financial results of the Group’s
operating segments are reviewed by the Board of Directors on a quarterly basis.
30
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 4. Operating segments (continued)
Business Segments
The following table presents revenue and profit/(loss) information and certain asset and liability information
regarding business segments for the year ended 30 June 2021.
Consolidated - 2021
Revenue
Sales to external customers
Total revenue
Total revenue
Other income
Other expenses
Profit/(loss) before income tax benefit
Income tax benefit
Profit after income tax benefit
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Consolidated - 2020
Revenue
Sales to external customers
Total revenue
Total revenue
Other income
Expenses
Profit/(loss) before income tax benefit
Income tax benefit
Loss after income tax benefit
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Research
and
Services
$
development Corporate
$
$
Other
segments
$
Total
$
3,778,914
3,778,914
-
-
-
-
3,778,914
-
(1,598,636)
2,180,278
-
-
(1,104,485)
(1,104,485)
-
243,577
(975,846)
(732,269)
703,807
2,645,969
9,089,363
-
-
-
-
-
-
3,778,914
3,778,914
3,778,914
243,577
(3,678,967)
343,524
242,334
585,858
- 12,439,139
12,439,139
32,201
-
579,537
-
611,738
611,738
Research
and
Services
$
development Corporate
$
$
Other
segments
$
Total
$
3,668,184
3,668,184
-
-
-
-
3,668,184
-
(2,084,938)
1,583,246
-
-
(300,400)
(300,400)
-
231,329
(2,466,875)
(2,235,546)
765,606
2,532,122
7,199,288
-
-
-
-
-
-
3,668,184
3,668,184
3,668,184
231,329
(4,852,213)
(952,700)
237,624
(715,076)
- 10,497,016
10,497,016
399,115
-
191,924
-
591,039
591,039
The group derived 12% of its external customer sales revenue from one major customer.
31
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 4. Operating segments (continued)
Geographical Segments
The company earns revenue in three significant geographical regions, countries are grouped in the regions of
Asia/Pacific, North America and Europe-Middle-East-Africa (EMEA).
All non-current assets are located in Australia being the Asia/Pacific region, applicable disclosure information is
disclosed in Business Segment assets and no additional disclosure is made.
Asia/Pacific
North America
EMEA
Total sales to external customers
Note 5. Revenue
Accounting policy for revenue
Consolidated
2021
$
2020
$
156,615
1,167,493
2,454,806
115,185
1,149,062
2,403,937
3,778,914
3,668,184
The Group generates revenue largely in the United States of America and the United Kingdom.
The revenue and profits recognised in any period are based on the delivery of performance obligations and an
assessment of when control is transferred to the customer.
In determining the amount of revenue and profits to record, and related statement items (such as contract fulfilment
assets, capitalisation of costs to obtain a contract, trade receivables, accrued income and deferred income) to
recognise in the period, management is required to form a number of key judgements and assumptions. This includes
an assessment of the costs the Group incurs to deliver the contractual commitments and whether such costs should
be expensed as incurred or capitalised.
Revenue is recognised either when the performance obligation in the contract has been performed (so 'point in time'
recognition) or 'over time' as control of the performance obligation is transferred to the customer.
For contracts with multiple components to be delivered such as establishment services, trial establishment project and
data management, project and data management services and analysis services management applies judgement to
consider whether those promised goods and services are (i) distinct - to be accounted for as separate performance
obligations; (ii) not distinct - to be combined with other promised goods or services until a bundle is identified that is
distinct or (iii) part of a series of distinct goods and services that are substantially the same and have the same pattern
of transfer to the customer.
At contract inception the total transaction price is estimated, being the amount to which the Group expects to be
entitled and has rights to under the present contract.
The transaction price does not include estimates of consideration resulting from changed orders for additional goods
and services unless these are agreed.
32
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 5. Revenue (continued)
Once the total transaction price is determined, the Group allocates this to the identified performance obligations in
proportion to their relative stand-alone selling prices and recognises revenue when (or as) those performance
obligations are satisfied.
For each performance obligation, the Group determines if revenue will be recognised over time or at a point in time.
Where the Group recognises revenue over time for long term contracts, this is in general due to the Group performing
and the customer simultaneously receiving and consuming the benefits provided over the life of the contract.
For each performance obligation to be recognised over time, the Group applies a revenue recognition method that
faithfully depicts the Group’s performance in transferring control of the goods or services to the customer. This
decision requires assessment of the real nature of the goods or services that the Group has promised to transfer to
the customer. The Group applies the relevant output or input method consistently to similar performance obligations
in other contracts.
When using the output method the Group recognises revenue on the basis of direct measurements of the value to the
customer of the goods and services transferred to date relative to the remaining goods and services under the contract.
Where the output method is used, in particular for long term service contracts where the series guidance is applied,
the Group often uses a method of time elapsed which requires minimal estimation. Certain long term contracts use
output methods based upon estimation of number of users, level of service activity or fees collected.
If performance obligations in a contract do not meet the over time criteria, the Group recognises revenue at a point in
time. This may be at the point of physical delivery of goods and acceptance by a customer or when the customer
obtains control of an asset or service in a contract with customer-specified acceptance criteria.
The Group disaggregates revenue from contracts with customers by contract type, which includes (i) commercial
revenue, (ii) voucher revenue, (iii) clinical trial revenue and (iv) other study income as management believe this best
depicts how the nature, amount, timing and uncertainty of the Group’s revenue and cash flows.
The nature of contracts or performance obligations categorised within this revenue type includes (i) establishment
services, (ii) trial establishment project and data management, (iii) project and data management services, and (iv)
analysis services.
The service contracts in this category include contracts with either a single or multiple performance obligations.
The Group considers that the services provided meet the definition of a series of distinct goods and services as they
are (i) substantially the same and (ii) have the same pattern of transfer (as the series constitutes services provided in
distinct time increments (e.g. monthly or annual services)) and therefore treats the series as one performance
obligation.
(i) Establishment services
Encompasses different services from which the customer is able to benefit from on their own or with other readily
available resources. Accordingly, revenues are recognised at a point in time when the service is delivered.
(ii) Trial establishment project and data management
Revenues are recognised when the contract is signed and the trial establishment activities have been performed. The
customer can benefit from these activities on their own or with other readily available resources.
(iii) Project and data management services
Revenues are recognised over the contract period as the service is provided.
33
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 5. Revenue (continued)
(iv) Analysis services
Revenues are recognised at a point in time following the completion of the analysis and report compilation.
Contract fulfilment assets and liabilities
As a result of the contracts which the Group enters into with its customers, a number of different assets and liabilities
are recognised on the Group’s balance sheet. These include but are not limited to:
• Trade receivables
• Accrued income
• Deferred income
Deferred and accrued income
The Group’s customer contracts include a diverse range of payment schedules dependent upon the nature and type
of goods and services being provided. The Group often agrees payment schedules at the inception of long term
contracts under which it receives payments throughout the term of the contracts. These payment schedules may
include performance-based payments or progress payments as well as regular monthly payments for ongoing service
delivery. Payments for transactional goods and services may be at delivery date, in arrears or part payment in advance.
Where payments made are greater than the revenue recognised at the period end date, the Group recognises a
deferred income contract liability for this difference. Where payments made are less than the revenue recognised at
the period end date, the Group recognises an accrued income contract asset for this difference.
Disaggregation of revenue
The group derives its revenue from the services at a point in time and over time in the following major categories. This
is consistent with the revenue information that is disclosed for each reportable segment:
Revenue from contracts with customers
Commercial revenue
Voucher program
Clinical trials
Other studies
Revenue
Consolidated
2021
$
2020
$
2,189,364
33,358
1,513,097
43,095
2,007,927
25,342
1,587,337
47,578
3,778,914
3,668,184
Reconciliation of revenue from contracts with customers with the amounts disclosed in segment information
Consolidated
2021
$
2020
$
3,778,914
-
3,668,184
-
3,778,914
3,668,184
Segment revenue
Adjustments and eliminations
Total revenue from contracts with customers
34
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 6. Other income
Subsidies and grants (1)
Interest revenue
Other income
Consolidated
2021
$
2020
$
206,095
37,482
189,925
41,314
243,577
231,239
(1) Grants received included $136,500 in JobKeeper and $52,095 in Cash Flow Boosts from the Australian Federal
Government and $17,500 payroll tax rebate from the Western Australian State Government.
Note 7. Income tax
Income tax benefit
Research and Development tax offset
Aggregate income tax benefit
Numerical reconciliation of income tax benefit and tax at the statutory rate
Profit/(loss) before income tax benefit
Tax at the statutory tax rate of 26% (2020: 27.5%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Expenses that are not deductible in determining taxable profit
Non-assessable income
Effect of unused tax losses not recognised as deferred tax assets
Reduction in tax rate
Tax losses recovered
Effect of temporary differences not recognised in deferred tax assets and liabilities
Research and Development tax offset
Income tax benefit
Unrecognised deferred tax balances
Consolidated
2021
$
2020
$
(242,334)
(237,624)
(242,334)
(237,624)
343,524
(952,700)
89,316
(261,993)
103,876
(13,545)
548,516
(20,054)
179,647
-
(6,910)
(160,374)
(12,363)
(242,334)
266,469
-
-
(233,474)
(32,995)
(237,624)
(242,334)
(237,624)
35
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 7. Income tax (continued)
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Losses available for offset against future taxable income - revenue
Amortisation and depreciation timing differences
Business related costs
Unrealised foreign exchange losses
Accrued expenses and liabilities
Others
Total deferred tax assets not recognised
Consolidated
2021
$
2020
$
2,040,098
127,247
1,753
22,061
61,824
1,045
2,530,838
139,972
1,925
1,107
101,688
1,170
2,254,028
2,776,700
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
Deferred tax liabilities not recognised
Deferred tax liabilities not recognised comprises temporary difference attributable to:
Capitalised research and development costs
Accrued income
Prepayments
Consolidated
2021
$
2020
$
646,658
664
-
696,334
2,970
-
649,322
699,304
Deferred tax liabilities have not been recognised in respect of these taxable temporary differences as the entity is able
to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will
not reverse in the foreseeable future.
Tax Consolidation
Resonance Health Limited and its 100% owned Australian resident subsidiaries implemented the tax consolidation
legislation from 1st July 2012.
36
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 8. Cash and cash equivalents
Current assets
Cash at bank
Term deposits
Consolidated
2021
$
2020
$
2,767,451
6,089,369
929,779
6,044,458
8,856,820
6,974,237
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Term deposits are made for varying periods depending on the immediate cash requirements of the Group and earn
interest at the respective term deposit rates.
Note 9. Trade and other receivables
Current assets
Trade receivables
Other receivables
Consolidated
2021
$
2020
$
755,146
35,229
739,517
26,089
790,375
765,606
Trade receivables are non-interest bearing and are generally on terms of 14 days to 90 days. All amounts are short
term. The carrying value of trade receivables is considered a reasonable approximation of fair value.
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
30 - 60 days overdue
60 - 90 days overdue
90 - 120 days overdue
Carrying amount
2020
2021
$
$
361,426
173,516
97,677
157,756
362,237
88,813
35,512
279,044
790,375
765,606
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables
as these items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess
shared credit risk characteristics.
Trade receivables are written off when there is no reasonable expectation of recovery.
37
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 9. Trade and other receivables (continued)
On the basis determined above, the expected credit loss for trade receivables as at 30 June 2021 was determined as
$nil (30 June 2020: $nil).
Note 10. Other assets
Current assets
Prepayments
Non-current assets
Security deposits
Note 11. Property, plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2021
$
2020
$
43,008
39,871
45,900
45,900
88,908
85,771
Consolidated
2021
$
2020
$
153,873
(101,392)
397,916
(370,485)
52,481
27,431
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 July 2019
Additions
Depreciation expense
Balance at 30 June 2020
Additions
Depreciation expense
Balance at 30 June 2021
$
40,511
6,359
(19,439)
27,431
44,119
(19,069)
52,481
38
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 12. Right-of-use assets
Non-current assets
Land and buildings - right-of-use
Less: Accumulated depreciation
The Group has a single premises lease.
Consolidated
2021
$
2020
$
167,774
(111,849)
167,774
(55,925)
55,925
111,849
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 July 2019
Additions
Depreciation expense
Balance at 30 June 2020
Depreciation expense
Balance at 30 June 2021
Note 13. Intangibles
Non-current assets
Research & development - at cost
Less: Accumulated amortisation
Land and
buildings
$
-
167,774
(55,925)
111,849
(55,924)
55,925
Consolidated
2021
$
2020
$
4,068,506
(1,473,876)
3,716,832
(1,184,710)
2,594,630
2,532,122
39
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 13. Intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 July 2019
Additions
Amortisation expense
Balance at 30 June 2020
Additions
Amortisation expense
Balance at 30 June 2021
$
2,550,818
246,512
(265,208)
2,532,122
351,674
(289,166)
2,594,630
Development expenditure relates to costs incurred in developing MRI image analysis tools for the diagnosis and clinical
management of human disease.
During the current financial year this development has related to a new liver fat assessment tool, further refinement
of FerriScan and the next stage of development of a MRI based liver fibrosis tool.
The recoupment of development expenditure is dependent on the successful development and commercialisation or
sale of the technology developed. The Directors are required to assess at each reporting date whether there is an
indication that an asset may be impaired. If any such indication exists an estimate is made of the asset’s recoverable
amount. Impairment tests are also required for intangible assets not yet ready for use regardless of the existence of
indicator of impairment. Where the asset’s carrying value exceeds the estimated recoverable amount a provision for
impairment is recognised.
In making this assessment the Directors had regard to the size of the liver fibrosis and liver fat markets, competing
products, experience gained with the FerriScan technology, the likely period over which these revenues are expected
to be generated and the likelihood of any technological obsolescence.
The recoverable amount of development expenditure detailed above is determined based on value-in-use
calculations.
Value-in-use is calculated based on the present value of cash flow projections over a five-year period. The cash flows
are discounted using a rate of 10% which includes a risk component at the beginning of the budget period
The following assumptions were used in the value-in-use calculations:
●
●
Growth rate was based on contractual obligations already in place and historical sales growth rates.
Costs are calculated taking into account historical margins and trends as well as estimated weighted average
inflation rates over the period, which are consistent with inflation rates appropriate to historic company rates.
Discount rate was based on the pre-tax discount rate of 10% which includes a risk component.
●
40
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 14. Trade and other payables
Current liabilities
Trade payables (i)
Other payables
Consolidated
2021
$
2020
$
118,495
374,013
53,617
331,655
492,508
385,272
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms. The carrying value of the trade
payables is considered a reasonable approximation of fair value. Information regarding the effective interest rate and
credit risk of current payables is set out in note 22.
Note 15. Lease liabilities
The Group leases only premises. The remaining term of the lease as of 30 June 2021 is 12 months. The incremental
borrowing rate applied to this lease is 4.79%.
Current liabilities
Lease liability
Non-current liabilities
Lease liability
Consolidated
2021
$
2020
$
60,105
55,998
-
60,105
60,105
116,103
Refer to note 22 for further information on financial instruments.
Underlying assets serve as security for the related lease liabilities. A maturity analysis of future minimum lease
payments is presented below:
Lease payments
Interest
Net present values
Lease payments due
< 1 year
1 - 2 years
Total
61,903
(1,798)
60,105
-
-
-
61,903
(1,798)
60,105
41
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 16. Provisions
Current liabilities
Long service leave
Note 17. Other liabilities
Current liabilities
Unearned income
Note 18. Issued capital
Consolidated
2021
$
2020
$
26,924
75,821
Consolidated
2021
$
2020
$
32,201
13,843
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
Ordinary shares - fully paid
461,149,601 443,773,933 73,882,788 72,565,449
Movements in ordinary share capital
Details
Date
Shares
$
Balance
Share issue on conversion of options
Shares issue under ESP
Controlled placement cost
Share issue to Acuity Capital1
Balance
Shares issued on conversion of options
Shares issued under ESP
Shares issued for research and development projects2
1 July 2019
30 June 2020
422,497,568 69,674,199
141,250
15,000
(15,000)
2,750,000
8,500,000
136,365
-
12,640,000
443,773,933 72,565,449
17,000,000
1,250,000
78,048
16,000
297,620
51,339
Balance
30 June 2021
461,149,601 73,882,788
(1) As collateral for a Controlled Placement Agreement ("CPA") that was entered into on 18 April 2019, the Company
agreed to place additional 12,640,000 shares from its Listing Rule 7.1 capacity, at issue price of $0.218 per share to
Acuity Capital (collateral shares) but may, at any time, cancel the CPA and buy back the collateral shares for no
consideration.
The CPA was initially established with a limit of $5m and the Company has utilised the CPA to raise a total of $2.75m.
On 30 June 2021 it was announced that the CPA limit was increased to $7.75m and expiry date was extended to 31
July 2023. The Company now has available capacity of $5m under the CPA.
There is no requirement to utilise the CPA and there were no fees or costs associated with the increase in and extension
of the CPA.
42
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 18. Issued capital (continued)
(2) 297,620 shares were issued to the Telethon Kids Institute on 11 June 2021 at an issue price of $0.1725. Refer note
34.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value
and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group is not actively pursuing
additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2020 Annual Report.
Note 19. Reserves
Foreign currency reserve
Options reserve
Consolidated
2021
$
2020
$
(270,580)
2,334,757
(270,580)
2,316,530
2,064,177
2,045,950
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services.
43
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 19. Reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Options issued
Balance at 30 June 2020
Options amortised
Balance at 30 June 2021
Note 20. Accumulated losses
Foreign
currency
translation
reserve
$
Option
reserve
$
Total
$
(270,580)
-
480,307
1,836,223
209,727
1,836,223
(270,580)
-
2,316,530
18,227
2,045,950
18,227
(270,580)
2,334,757
2,064,177
Consolidated
2021
$
2020
$
Accumulated losses at the beginning of the financial year
Profit/(loss) after income tax benefit for the year
(64,705,422) (63,990,346)
(715,076)
585,858
Accumulated losses at the end of the financial year
(64,119,564) (64,705,422)
Note 21. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 22. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Group. The Group does not enter into or trade financial instruments, including derivative financial instruments
such as forward foreign exchange contracts to hedge certain risk exposures.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of
Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the
Group's operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
44
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 22. Financial instruments (continued)
Exchange rate exposures are managed within approved policy parameters, the Group does not engage in forward
exchange contracts.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US dollars
Euros
Pound Sterling
Assets
2021
$
2020
$
Liabilities
2021
$
2020
$
2,148,146
244,390
1,035,920
1,052,673
174,061
291,320
-
554
4,126
5,441
2,249
4,378
3,428,456
1,518,054
4,680
12,068
Foreign currency sensitivity analysis
The Group is exposed to United States Dollar (USD), Great British Pound (GBP) and European Euro (EUR) currency
fluctuations.
The following table illustrates the Group’s sensitivity to an 10% increase and decrease in the Australian dollar against
the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A negative
number indicates a decrease in profit and other equity where the Australian dollar strengthens against the respective
currency. For a weakening of the Australian dollar against the respective currency there would be an equal and
opposite impact on the profit and other equity and the balances below would be positive.
Profit or loss impact:
USD
EUR
GBP
Price risk
The Group is not exposed to any significant price risk.
Consolidated
2021
$
2020
$
(195,286)
(22,167)
(93,799)
(95,203)
(15,619)
(26,086)
Interest rate risk
All financial assets and financial liabilities are non-interest bearing except for cash and cash equivalent balances, and
lease liabilities. The following table details the Group’s expected maturities for cash and cash equivalent financial
assets.
45
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 22. Financial instruments (continued)
Cash and cash equivalent financial assets:
Consolidated
Less than one month
One to three months
2021
2020
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
0.13%
0.49%
8,856,820
45,900
0.86%
1.34%
6,974,237
45,900
8,902,720
7,020,137
The Group is exposed to fluctuations in interest rates as it has deposited monies at floating interest rates. The impact
of a 10% change in interest rates will not have a material impact on the result for the year.
Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily from
customer receivables) and from its financing activities, including deposits with banks, foreign exchange transactions
and other financial instruments.
Outstanding customer receivables are regularly monitored and any credit concerns highlighted to senior
management. At 30 June 2021, the Group had one customer that accounted for 9% of all trade receivables (2020:
12%). Refer note 9 for further details.
The maximum exposure to credit risk, excluding the value of any collateral or other security at balance date in relation
to each class of recognised financial assets is the carrying amount, net of any allowance for impairment recorded in
the financial statements. The Group does not hold any collateral as security for any trade receivable.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves by
continually monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and
liabilities.
46
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 22. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Remaining
contractual
maturities
$
Over 5 years
$
-
-
-
492,508
32,201
60,105
584,814
-
-
-
-
-
-
-
-
-
-
-
-
492,508
32,201
60,105
584,814
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Remaining
contractual
maturities
$
Over 5 years
$
-
-
-
385,272
13,843
-
-
55,998
455,113
60,105
60,105
-
-
-
-
-
-
-
-
385,272
13,843
116,103
515,218
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 23. Key management personnel disclosures
Directors
The following persons were Directors of Resonance Health Limited during the financial year:
Dr Martin Blake
Mr Mitchell Wells
Mr Simon Panton
Dr Travis Baroni
47
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 23. Key management personnel disclosures (continued)
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the Group, directly or indirectly, during the financial year:
Ms Alison Laws
Mr Agha Shahzad
Mr Nicholas Allan
Chief Executive Officer (resigned 2 July 2021)
Company Secretary & Chief Financial Officer (resigned 8
April 2021)
Company Secretary & Chief Financial Officer (appointed
31 May 2021)
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set
out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 24. Remuneration of auditors
Consolidated
2021
$
2020
$
730,723
48,117
28,626
2,000
699,855
54,135
-
1,838,222
809,466
2,592,212
During the financial year the following fees were paid or payable for services provided by HLB Mann Judd, the auditor
of the Company:
Consolidated
2021
$
2020
$
61,931
57,528
7,500
12,500
69,431
70,028
Audit services - HLB Mann Judd
Audit or review of the financial statements
Other services - HLB Mann Judd
Preparation of the tax return
Note 25. Contingent assets
The Group has no contingent assets as at 30 June 2021 (2020: $nil).
48
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 26. Contingent liabilities
On 10 September 2020 the Company announced that they had entered into a licence agreement with the Telethon
Kids Institute ("Telethon Kids") and the Erasmus University Medical Centre for the use of computer tomography
("PRAGMA-CF Data") datasets that will be used by the Company in the potential development of a new artificial
intelligence ("AI") algorithm for the automated assessment of lung disease progression in patients with cystic fibrosis.
See Note 34 for further details.
Under the licence agreement a further 297,620 fully paid ordinary shares in the Company will be issuable to Telethon
Kids upon first submission of its medical device dossiers to a regulatory authority and a 10% net royalty on all sales of
the analysis performed by the AI algorithm device will be payable by the Group.
Note 27. Commitments
The Group has no operating or capital commitments.
Note 28. Related party transactions
Parent entity
Resonance Health Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 23 and the remuneration report included in the
Directors’ Report.
Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services:
Services provided to Perth Radiological Clinic *
Payment for goods and services:
Services provided by Perth Radiological Clinic *
Consolidated
2021
$
2020
$
2,156
270
300
540
*
Dr Martin Blake is a shareholder, Chairman and consulting Radiologist of Perth Radiological Clinics.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
49
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 29. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of Profit or Loss and Other Comprehensive Income
Loss after income tax
Total comprehensive income
Statement of Financial Position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Options reserve
Accumulated losses
Total equity
Parent
2021
$
2020
$
(570,871)
(2,409,395)
(570,871)
(2,409,395)
Parent
2021
$
2020
$
6,119,528
6,091,272
6,976,210
6,947,954
102,207
59,343
2,663,411
3,399,850
73,882,788 72,565,449
2,316,530
(71,904,746) (71,333,875)
2,334,757
4,312,799
3,548,104
Note 30. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Principal place of business /
Country of incorporation
Resonance Health Analysis Services Pty Ltd
WA Private Health Care Services Pty Ltd
IVB Holdings Pty Ltd
Resonance USA Inc
Australia
Australia
Australia
USA
Ownership interest
2020
2021
%
%
100%
100%
100%
100%
100%
100%
100%
100%
50
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 31. Events after the reporting period
Mr Mitchell Wells was appointed as Managing Director on 2 July 2021, following the resignation of CEO Ms Alison
Laws.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 32. Cash flow information
Reconciliation of profit/(loss) after income tax to net cash from operating activities
Profit/(loss) after income tax benefit for the year
585,858
(715,076)
Consolidated
2021
$
2020
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign exchange differences
Interest expense
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in prepayments
Increase/(decrease) in trade and other payables
Decrease in employee benefits
Increase/(decrease) in other operating liabilities
Net cash from operating activities
Note 33. Earnings per share
364,159
85,566
88,243
(4,103)
340,572
1,836,223
-
-
(24,769)
(3,137)
107,236
(48,897)
18,358
(103,278)
(3,551)
(44,078)
-
(34)
1,168,514
1,310,778
Consolidated
2021
$
2020
$
Profit/(loss) after income tax attributable to the owners of Resonance Health Limited
585,858
(715,076)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per
share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
450,260,200
432,385,267
1,976,827
-
Weighted average number of ordinary shares used in calculating diluted earnings per
share
452,237,027
432,385,267
51
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 34. Share-based payments (continued)
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
The dilutionary impact of options did not change the earnings per share.
Note 34. Share-based payments
Cents
Cents
0.13
0.13
(0.17)
(0.17)
The Company has an Employee Incentive Option Plan for key staff members and consultants of the Company.
Set out below are summaries of options granted under the plan:
Weighted
average
exercise
price
2021
Number of
options
2021
Weighted
average
exercise
price
2020
Number of
options
2020
Outstanding at the beginning of the financial year
Granted
Forfeited
Exercised
Expired
Cancelled
32,200,000
-
(2,000,000)
(17,000,000)
-
-
$0.122 33,500,000
$0.000 12,200,000
(5,000,000)
$0.115
(8,500,000)
$0.075
-
$0.000
-
$0.000
$0.074
$0.170
$0.000
$0.000
$0.000
$0.000
Outstanding at the end of the financial year
13,200,000
$0.170 32,200,000
$0.122
Exercisable at the end of the financial year
13,200,000
$0.170 32,200,000
$0.122
2021
Grant date
Expiry date
08/11/2018
08/11/2018
08/11/2018
08/11/2018
14/02/2019
14/02/2019
13/06/2019
28/11/2019
28/11/2019
28/11/2019
02/12/2019
09/03/2021
09/03/2021
09/03/2021
09/03/2021
01/01/2022
01/01/2022
13/06/2022
28/11/2022
28/11/2022
28/11/2022
01/12/2022
Exercise
price
Balance at
the start of
the year
Granted
Expired/
Balance at
cancelled/ the end of
Exercised
other
the year
$0.030
$0.050
$0.075
$0.100
$0.100
$0.125
$0.100
$0.150
$0.175
$0.200
$0.100
2,500,000
3,250,000
4,500,000
4,750,000
1,000,000
1,000,000
3,000,000
4,000,000
4,000,000
4,000,000
200,000
32,200,000
(2,500,000)
-
(3,250,000)
-
(4,500,000)
-
(4,750,000)
-
-
-
-
-
(2,000,000)
-
-
-
-
-
-
-
-
-
- (17,000,000)
-
-
-
-
(1,000,000)
(1,000,000)
-
-
-
-
-
-
-
-
-
-
-
1,000,000
4,000,000
4,000,000
4,000,000
200,000
(2,000,000) 13,200,000
The weighted average share price during the financial year was $0.199 (2020: $0.087).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 1.4 years
(2020: 1.5 years).
52
Resonance Health Limited
Notes to the Financial Statements
30 June 2021
Note 34. Share-based payments (continued)
78,048 fully paid ordinary shares were issued to employees under the Employee Share Plan on 29 December 2020 at
an issue price of $0.205. $16,000 was expensed to share based payments.
On 10 September 2020 the Company announced that they had entered into a licence agreement with the Telethon
Kids Institute ("Telethon Kids") and the Erasmus University Medical Centre for the use of computer tomography
("PRAGMA-CF Data") datasets that will be used by the Company in the potential development of a new artificial
intelligence ("AI") algorithm for the automated assessment of lunch disease progression in patients with cystic fibrosis.
Consideration for the licence of the PRAGMA-CF Data will be as follows:
(i) 297,620 fully paid ordinary shares to Telethon Kids payable upon receipt and acceptance of both the first and
second primary tranches of PRAGMA-CF Data
(ii) subject to (i) being satisfied, 297,620 fully paid ordinary shares to Telethon Kids upon first submission of its
medical device dossiers to a regulatory authority.
(iii) 10% net royalty on all sales of the analysis performed by the Device.
During the year ended 30 June 2021 the PRAGMA-CF Data was received and the first tranche of 297,620 fully-paid
ordinary shares were issued to Telethon Kids on 11 June 2021 at an issue price of $0.1725, $51,339 was expensed to
research and development expenditure during the period.
Reconciliation of share based payments expense:
Options to staff and consultants
Employee share plan
Shares issued for research & development
Consolidated
2021
$
2020
$
18,227
16,000
51,339
1,836,223
15,000
-
85,566
1,851,223
53
Resonance Health Limited
Directors’ Declaration
30 June 2021
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30
June 2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Dr Martin Blake
Chairman
29 September 2021
Perth, Western Australia
54
INDEPENDENT AUDITOR’S REPORT
To the members of Resonance Health Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Resonance Health Limited (“the Company”) and its
controlled entities (“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 cash flows 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 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.
We have determined the matters described below to be the key audit matters to be communicated
in our report.
55
Key Audit Matter
Intangible assets
Refer to Note 13
As at 30 June 2021, the Group has an intangible
asset balance of $2,594,630 which comprises
intangible assets not yet available for use and other
intangible assets.
Under AASB 136 Impairment of Assets, intangible
assets not yet available for use are subject to an
annual impairment test and other intangible assets
are subject to an impairment test should indicators of
impairment arise.
We considered this to be a key audit matter as it
involves complex matters involving subjectivity and
judgement, it is material to the users’ understanding
of the financial statements as a whole and it required
significant auditor attention and communication with
those charged with governance.
How our audit addressed the key audit
matter
Our audit procedures included but were not
limited to the following:
- Obtained an understanding of the key
controls associated with the preparation
of the value-in-use calculation used to
assess the recoverable amount of the
intangible assets;
- Critically
evaluated management’s
methodology used in the value-in-use
calculation and
for key
assumptions including the discount rate
used;
the basis
- Assessed the value-in-use calculation
accounting
for
consistency with
standards requirements;
- Compared key assumptions in forecast
cash flows to historical results and,
where these were materially different,
we critically reviewed the basis for
differing future expectations;
the
assets
comprising the cash-generating unit
had been correctly allocated;
- Considered whether
- Compared
the value-in-use
the
carrying amount of assets comprising
the cash-generating unit;
to
- Performed sensitivity analyses around
the key inputs used in the cash flow
forecasts and the headroom impact on
the value-in-use calculation;
- Reviewed the mathematical accuracy of
the net present value calculation; and
- Assessed the appropriateness of the
disclosures included in the relevant
notes to the financial report.
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.
56
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or 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 Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
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.
57
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Resonance Health 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
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
29 September 2021
M R Ohm
Partner
58
Resonance Health Limited
Shareholder Information
30 June 2021
The following additional information is disclosed in accordance with section 4.10 of the Australia Securities
Exchange Listing Rules in respect of a listed public company.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
Resonance Health Limited support and adhere to the principles of corporate governance. The Company’s Corporate
Governance Statement is contained on the Company’s web site located here:
http://www.resonancehealth.com/investors/business-overview.html
Analysis of Shareholdings (as of 10 September 2021)
Distribution of shareholders (ASX Code: RHT)
Spread of Holdings
Number of Units
Number of Holders
% of Total Issued
Capital
1 - 1000
1001 - 5000
5001 - 10000
10001 - 100000
100001 - 999999999999
TOTAL
Voting Rights
20,994
966,680
2,059,234
44,575,179
413,527,514
461,149,601
117
255
256
1,097
471
2,196
0.00%
0.21%
0.45%
9.67%
89.67%
100%
Ordinary Securities:
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by
proxy has a one vote on a show of hands.
59
Resonance Health Limited
Shareholder Information
30 June 2021
Twenty largest shareholders of quoted ordinary shares (as of 10 September 2021)
Rank Name
Units
% of Units
1
2
3
SOUTHAM INVESTMENTS 2003 PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ACUITY CAPITAL INVESTMENT MANAGEMENT PTY LTD
4 MS ALISON VIRGINIA WESLEY
5 MR PAUL JOHN VAN DYK
6 MR WILLIAM MURRAY THOMPSON
7 MS JADE LOUISE THOMPSON
8 MR BRUCE ALAN STEVENSON
9 MR HELMUT ROCKER
10 MARCOLONGO NOMINEES PTY LTD
11
THE MAJOBRI HOLDINGS PTY LTD
12 MR THOMAS PSARAKIS
13 MR HARISH GARG
14
BNP PARIBAS NOMINEES PTY LTD
DR MARTIN PETER BLAKE
15
16 MR VINCENT OLADELE
17
18
19
20
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY
LIMITED
FULLERTON PRIVATE CAPITAL PTY LIMITED
THE UNIVERSITY OF WESTERN AUSTRALIA
NEWECONOMY COM AU NOMINEES PTY LIMITED <900
ACCOUNT>
73,300,000
43,293,525
20,000,000
10,000,000
9,349,700
6,658,660
6,512,759
6,300,000
6,250,000
5,186,200
4,500,000
4,434,777
4,001,245
3,890,663
3,798,590
3,708,052
3,588,012
3,500,000
3,478,750
3,389,575
15.9
9.39
4.34
2.17
2.03
1.44
1.41
1.37
1.36
1.12
0.98
0.96
0.87
0.84
0.82
0.8
0.78
0.76
0.75
0.74
The names of substantial shareholders who have notified the Company in accordance with the Corporations
Act 2001 are:
SOUTHAM INVESTMENTS 2003 PTY LTD
73,300,000 Ordinary shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
43,293,525 Ordinary shares
225,140,508
48.82
60