ResApp Health Limited
Annual Report 2015

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ResApp Health Limited (formerly Narhex Life Sciences Limited) ABN 51 094 468 318 ANNUAL REPORT for the year ended 30 June 2015 ResApp Health Limited – Annual Report ABN 51 094 468 318 CONTENTS TO FINANCIAL REPORT Corporate Information ................................................................................................................................ 1 Directors’ report .......................................................................................................................................... 2 Corporate Governance Statement ............................................................................................................. 6 Remuneration report (audited) ................................................................................................................ 13 Auditor’s independence declaration ....................................................................................................... 19 Statement of profit or loss and other comprehensive income for the financial year ended 30 June 2015 .................................................................................................................................. 20 Statement of financial position as at 30 June 2015 ............................................................................... 21 Statement of changes in equity for the financial year ended 30 June 2015 ........................................ 22 Statement of cash flows for the financial year ended 30 June 2015 .................................................... 23 Notes to the financial statements ............................................................................................................ 24 Directors’ declaration ............................................................................................................................... 37 Independent auditor’s report ................................................................................................................... 38 ASX Additional Information ..................................................................................................................... 40 ResApp Health Limited – Annual Report ABN 51 094 468 318 Corporate Information This annual report is for ResApp Health Limited (formerly Narhex Life Sciences Limited) (the “Company”). Unless otherwise stated, all amounts are presented in Australian Dollars. A description of the Company’s operations and of its principal activities is included in the review of operations and activities in the directors’ report on pages 4 to 5. The directors’ report is not part of the financial statements. Directors Mr Cyril D’Silva (Director) (appointed on 16 May 2013 and resigned 21 January 2015) Mr Adam Sierakowski (Director) (appointed as Alternate Director on 16 May 2013, resigned as Alternate Director on 20 December 2013 and appointed on 20 December 2013) Dr Robert Ramsay (Director) (appointed 20 December 2013, resigned on 2 July 2015) Mr Chris Ntoumenopoulos (appointed 21 January 2015) Dr Tony Keating (appointed 2 July 2015) Dr Roger Aston (appointed 2 July 2015) Company Secretary Ms. Nicki Farley (appointed 7 November 2012) Registered and Principal Office Level 24, 44 St Georges Tce, PERTH WA 6000 Auditors Somes Cooke Level 2, 35 Outram St PERTH WA 6005 Share Registry & Register Link Market Services Ltd Solicitors Price Sierakowski Corporate Ground Floor, 178 St Georges Tce Level 24, 44 St Georges Tce PERTH WA 6000 PERTH WA 6000 Bankers National Australia Bank 100 St Georges Tce PERTH WA 6000 Contact Information Ph: 08 6211 5099 Fax: 08 9218 8875 Stock Exchange Listing ResApp Health Limited Limited (formerly Narhex Life Sciences) is listed on the Australian Securities Exchange. ASX Code: RAP (formerly NLS) Web Site www.resapphealth.com.au 1 ResApp Health Limited – Annual Report ABN 51 094 468 318 Directors’ report The directors of ResApp Health Limited (formerly Narhex Life Sciences Limited) (the “Company”) submit herewith the annual financial statements of the Company for the financial year ended 30 June 2015. These financial statements cover the period from 1 July 2014 to 30 June 2015. In order to comply with the provision of the Corporations Act 2001, the directors’ report is as follows: The names and particulars of the directors of the company during or since the end of the financial year are: Name Mr Cyril D’Silva (appointed on 16 May 2013 and resigned 21 January 2015 ) Dr. Robert Ramsay (appointed 20 December 2013, resigned on 2 July 2015) Mr Adam Sierakowski (appointed as non- executive director on 20 December 2013) (appointed as Chairman on 21 January 2015, resigned as Chairman on 2 July 2015.) Mr Chris Ntoumenopoulos (appointed 21 January 2015) Particulars Director Cyril D’Silva is a Singapore-born entrepreneur, with extensive working experience and a network of business contacts in the South East Asia region. He is currently the Executive Chairman of Golden Saint Resources Ltd (BVI) which was listed on 19th July on AIM. Cyril is also the Executive Chairman of Golden Saint Australia Limited and a director for both Golden Saint Liberia Ltd (in Liberia) and Golden Saint Resources Africa (in Sierra Leone). Through Golden Saint Capital Pte Ltd (Singapore) Cyril has raised funds for the initial mining ventures in Sierra Leone and Liberia. Cyril is currently based in Perth, Western Australia. Director Dr Ramsay is a geologist with over 30 years experience working with Rio Tinto, Striker Resources, BHP Billiton, and several junior explorers. During 20 years with Rio Tinto and Striker Resources, Dr Ramsay specialized in diamond exploration and the assessment of diamond-pipe prospectivity using indicator-mineral geochemistry. Most recently Dr Ramsay was the Senior Project Geologist with Speewah Metals Ltd where he was responsible for the planning and implementation of drilling programmes from discovery through to a JORC compliant resources of 4.7Billion tonnes on the V- Ti – magnetite along with mapping and drilling of an epithermal, vein style deposit of fluorite adjacent to the V-Ti -magnetite deposit leading to the expansion of a JORC compliant resource of 6.7Mt. Dr. Ramsay is also a Director of ASX listed Coziron Resources Limited (ASX: CZR). Non-Executive Director Adam Sierakowski is a lawyer and founding director of the legal firm Price Sierakowski. He has over 20 years’ experience in legal practice, much of which he has spent as a corporate lawyer consulting and advising on a range of transactions to a variety of large private and listed public entities. He is the co-founder and director of Perth based corporate advisory business, Trident Capital, where he has for years advised a variety of large private and public companies on structuring their transactions and coordinating fundraising both domestically and overseas. Mr Sierakowski has held a number of board positions with ASX listed companies and is currently a member of the Australian Institute of Company Directors and the Association of Mining and Exploration Companies. Non-Executive Director Mr Ntoumenopoulos is a partner at CPS Capital, a WA based Stockbroking and Corporate Advisory firm. He has worked in financial markets for the past 12 years, focusing on Capital Raisings, Portfolio Management and Corporate Advisory. Mr Ntoumenopoulos has advised and funded numerous ASX companies from early stage venture capital, through to IPO. He is an executive director of various private companies which span across finance, technology and medical sectors. Mr Ntoumenopoulos has a Bachelor of Commerce degree from the University of WA, majoring in Money and Banking, Investment Finance and Electronic Commerce. 2 Dr Tony Keating (appointed 2 July 2015) Dr Roger Aston (appointed 2 July 2015) ResApp Health Limited – Annual Report ABN 51 094 468 318 Managing Director and Chief Executive Officer Dr Tony Keating has over 9 years’ experience in commercialising technology. Dr Keating created the initial business strategy for ResApp and has led the commercialization of ResApp’s technology to date. Previously, Dr Keating was Director, Commercial Engagement at UniQuest Pty Ltd, one of the global leaders in commercialisation of university technology. While at UniQuest, Dr Keating held roles as interim Chief Executive Officer and Non-Executive Director for a number of privately-held, venture-capital funded start-up companies. Prior to joining UniQuest Dr Keating held business development and engineering management roles at Exa Corporation, a US-based software company that is now listed on the NASDAQ. Dr Keating holds a Bachelor of Engineering, a Master of Engineering Science and a Doctor of Philosophy (Mechanical Engineering) from The University of Queensland. Dr Keating also has an Executive Certificate of Management and Leadership from the MIT Sloan School of Management, and is a Graduate Member of the Australian Institute of Company Directors. Non-Executive Chairman Dr Roger Aston, BSc (Hons) PhD is currently the Executive Chairman of OncoSil Medical. He has had extensive experience on boards of many pharmaceutical companies, and has been Chief Executive Officer of Pitney Pharmaceuticals Ltd, PSIMedica, pSiOncology Pte Ltd, Peptech and Cambridge Antibody Technology. In 2001, Dr Aston co-founded pSivida Limited. He served as the Chief Executive Officer of Mayne Pharma Group Limited until 15 February 2012. During his career, Dr Aston has been closely involved in start-up companies and major pharmaceutical companies. Aspects of his experience include FDA and EU product registration, clinical trials, global licensing agreements, fundraising through private placements, and a network of contacts within the pharmaceutical, banking and stock broking sectors. Dr Aston is both a scientist and a seasoned biotechnology entrepreneur, with a successful track record in both fields. He currently has several executive and non- executive board positions with prominent biotechnology companies. Directorships of other listed companies Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are as follows: Name Adam Sierakowski Robert Ramsay Roger Aston Chris Ntoumenopoulos Company Flexiroam Limited Coziron Resources Limited iWebGate Limited Kinetiko Energy Limited Coziron Resources Limited Immuron Limited Regeneus Ltd PharmAust Limited Oncosil Medical Limited IDT Australia Limited Polynovo Limited Nil Period of directorship 18 March 2015 - current 21 October 2010 – current 23 July 2012 – current 8 December 2010 – current 20 December 2012 - current 25 May 2012 – current 21 September 2012 – current 20 August 2013 – current 28 March 2013 – current 20 March 2012 – 20 November 2013 15 November 2013 – 10 September 2014 Nil Tony Keating Nil Nil 3 ResApp Health Limited – Annual Report ABN 51 094 468 318 Company secretary Name Ms Nicki Farley (appointed 7 November 2012) Particulars Ms Farley has over 10 years’ experience working within the legal and corporate advisory area providing advice in relation to capital raisings, corporate and securities laws, mergers and acquisitions and general commercial transactions. Ms Farley has also held a number of company secretarial roles for ASX listed companies. Ms Farley holds a Bachelor of Laws and Arts from the University of Western Australia. Principal activities During the year, the Company proceeded with its acquisition of ResApp Diagnostics Pty Ltd (“ResApp”), having signed a Share Sale Agreement to acquire 100% of the rights and title to ResApp. Operating results and financial position The net loss for the year ended 30 June 2015 was $489,321 compared with a net loss of $578,388 for the previous year. The Company had a net asset position as at 30 June 2015 of $484,941 (2014: $121,412). The loss for the current year is attributable to increased legal services performed in relation to the acquisition of ResApp Diagnostics Pty Ltd. The prior year loss is attributable to due diligence expenses of the Company’s previous proposed acquisition of a Guinea and Liberian project. Review of operations Acquisition of ResApp Diagnostics Pty Ltd On 2 October 2014 the Company announced it had entered into a binding Heads of Agreement (“HOA”) to acquire 100% of the issued capital of ResApp. ResApp through the exclusive licence it has been granted by the University of Queensland (“UQ”) is developing mobile medical applications for the diagnosis and management of respiratory disease. The technology is based on a machine learning algorithm that uses sound alone to diagnose and measure the severity of a respiratory condition. The algorithm has been tested for pneumonia and asthma diagnosis in a clinical proof of concept study of 91 patients by UQ through funding from the Bill and Melinda Gates Foundation. On 17 December 2014, the Company announced it would raise $900,000 under a placement by issuing 180 million shares at $0.005. Sophisticated investors who participate in the placement were also issued one free attaching option (exercisable at $0.01 and have an expiry date of 31 December 2016) for every 2 shares subscribed for. The Placement was completed in 2 tranches, with funds raised used for working capital and the costs associated with re-compliance with Chapters 1 & 2 of the ASX Listing Rules. On 22 January 2015, the Company announced that Mr Chris Ntoumenopoulos had been appointed as a non- executive director of the Company replacing Mr Cyril D’Silva. Mr Adam Sierakowski, an existing non- executive director was also appointed as Chairman of the Company. On 20 February 2015 the Company, ResApp, UniQuest Pty Ltd (“UniQuest”) and the ResApp Vendors entered into the Share Sale Agreement. Subject to various conditions, the Company agreed to purchase 100% of the ordinary shares in ResApp, and the ResApp Vendors and UniQuest agreed to sell all of their ordinary shares in ResApp to the Company. On 8 May 2015 the Company issued a Prospectus offering up to 200,000,000 Shares to the public at $0.02 to raise up to $4 million before costs. A Replacement Prospectus was subsequently lodged on 26 May 2015. On 27 May 2015 at a General Meeting of the Company, Shareholders approved the following resolutions: • • • • Capital Consolidation: The Company consolidating its issued capital on a 3 for 8 basis, which was subsequently completed on 3 June 2015. Change in nature and scale: The Company changing the nature and scale of its activities as a result of the acquisition of ResApp. Approval of Performance Shares: The Company approving the Performance Shares. Issue of Shares and Performance Shares to the ResApp Vendors and UniQuest: The Company issuing the 250,000,000 Consideration Shares (on a pre-Consolidation basis) and the 250,000,000 Performance Shares (on a pre-Consolidation basis) to the ResApp Vendors and UniQuest in consideration of acquiring 100% of the securities in ResApp. 4 ResApp Health Limited – Annual Report ABN 51 094 468 318 Review of operations (continued) • • • • • • • • • Public Offer: The Company offering up to 200,000,000 Shares to the public under this Prospectus to raise up to $4,000,000 before costs. Issue of Facilitation Shares to Related Parties: The Company issuing 25,000,000 Facilitation Shares (on a pre-Consolidation basis) to Trident Capital Pty Ltd and 5,625,000 Facilitation Shares (on a pre-Consolidation basis) to SOBOL Capital Pty Ltd under the Prospectus. Facilitation Shares to Non-Related Parties: The Company issuing 16,666,667 Facilitation Shares (on a pre-Consolidation basis) to Seamist Enterprises Pty Ltd and 2,708,333 Facilitation Shares (on a pre-Consolidation basis) to CPS Capital Group Pty Ltd. Ratification of Placement Shares and Placement Options issued to Sophisticated Investors: the Company ratifying the previous issues to sophisticated investors of 10,000,000 Placement Shares (on a pre-Consolidation basis) on 19 December 2014 and 60,000,000 Placement Shares (on a pre- Consolidation basis) on 24 March 2015. Issue of Placement Options to Sophisticated Investors: the Company issuing 30,000,000 Placement Options to sophisticated investors. Issue of Placement Shares and Placement Options to Trident Capital Pty Ltd: the Company issuing 10,000,000 Placement Shares and 5,000,000 Placement Options to Trident Capital (both on a pre- Consolidation basis). Change of name: The Company changing its name from “Narhex Life Sciences Limited” to “ResApp Health Limited”. Appointment of Dr Tony Keating as Director. Approval of Issue of Incentive Options to Dr Tony Keating: the Company issuing 20,000,000 Incentive Options to Dr Tony Keating. On 12 June 2015 the Company announced that its Capital Raising had closed oversubscribed, with funds totalling $4 million having been raised under the Company’s Replacement Prospectus dated 26 May 2015. Subsequent Events On 2 July 2015, the Company announced that the Share Sale Agreement dated 20 February 2015 between the Company, ResApp, the Shareholders of ResApp and UniQuest had completed with the Company acquiring 100% of ResApp. In accordance with the Company’s Replacement Prospectus dated 26 May 2015 and as approved by Shareholders at the General Meeting held on 27 May 2015, the following securities were issued (on a post consolidation basis): Public Offer – 200,000,000 Shares at $0.02 per Share having raised $4 million; (a) (b) Vendor Offer – 93,750,000 Shares and 93,750,000 Performance Shares issued in consideration for the acquisition of ResApp; Facilitation Offer – 18,749,999 Shares to the Facilitators for services provided; and Incentive Options – 20 million Incentive Options. (c) (d) Following completion of the acquisition, Dr Tony Keating was appointed to the Board of the Company in the position of Managing Director and Chief Executive Officer. Dr Roger Aston has also been appointed as a non- executive director, replacing Dr Rob Ramsay. Dr Roger Ashton was subsequently appointed as Chairman of the Company, replacing Mr Adam Sierakowski who remains on the Board as a non-executive director. In addition, the Company changed its name from Narhex Life Sciences Limited to ResApp Health Limited and was reinstated to official quotation on the ASX on 14 July 2015 under the new ASX Code “RAP”. Future developments The Company will continue the development and commericalisation of the ResApp technology for the purpose of providing health care solutions to assist doctors and consumers diagnose respiratory disease. Environmental regulation The company’s operations are not subject to significant environmental regulations under the law of the Commonwealth or of a State, or Territory. 5 ResApp Health Limited – Annual Report ABN 51 094 468 318 Dividends No dividend has been proposed or paid. Indemnification of officers and auditors The company has not otherwise, during or since the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor. Directors’ meetings The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). Board of directors Held Attended Directors Mr Cyril D’Silva1 Dr Robert Ramsay2 Mr Adam Sierakowski Mr Chris Ntoumenopoulos3 1 Cyril resigned on 21 January 2015 2 Robert resigned on 2 July 2015 3 Chris was appointed on 21 January 2015 - - 1 1 - - 1 1 The Board of Directors also approved thirteen (13) circular resolution during the year ended 30 June 2015 which was signed by all Directors of the Company. The audit, compliance and corporate governance committee did not hold any meetings during the financial year. Corporate Governance Statement The Board is responsible for establishing the Company’s corporate governance framework, the key features of which are set out below. In establishing its corporate governance framework, the Board has referred to the 3rd edition of the ASX Corporate Governance Councils’ Corporate Governance Principles and Recommendations. In accordance with ASX Listing Rule 1.1 Condition 13, the corporate governance statement discloses the extent to which the Company follows the recommendations. The Company will follow each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company’s corporate governance practices will follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not” reporting regime, where, after due consideration, the Company’s corporate governance practices will not follow a recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any, alternative practices the Company will adopt instead of those in the recommendation. following governance-related documents The www.resapphealth.com.au, under the section marked “Corporate Governance”: found on can be Board Charter; (a) Board Performance Evaluation Policy; (b) (c) Code of Conduct; (d) Audit Committee Charter; (e) (f) (g) (h) (i) (j) (k) Diversity Policy. Remuneration and Nomination Committee Charter; Security Trading Policy; Continuous Disclosure Policy; Shareholder Communication and Investor Relations Policy; Risk Committee Charter; Risk Management Policy; and the Company’s website at 6 ResApp Health Limited – Annual Report ABN 51 094 468 318 Principle 1: Lay solid foundations for management and oversight Recommendation 1.1 The Company has established the respective roles and responsibilities of its Board and management, and those matters expressly reserved to the Board and those delegated to management, and has documented this in its Board Charter. Recommendation 1.1(continued) The responsibilities of the Board include but are not limited to: setting and reviewing strategic direction and planning; reviewing financial and operational performance; identifying principal risks and reviewing risk management strategies; and considering and reviewing significant capital investments and material transactions. (a) (b) (c) (d) In exercising its responsibilities, the Board recognises that there are many stakeholders in the operations of the Company, including employees, shareholders, co-ventures, the government and the community. The Board has delegated responsibility for the business operations of the Company to the Chief Executive Officer and the management team. The management team, led by the Chief Executive Officer is accountable to the Board. Recommendation 1.2 The Company undertakes appropriate checks before appointing a person, or putting forward to shareholders a candidate for election as a director and provides shareholders with all material information in its possession relevant to a decision on whether or not to elect a director. The checks which are undertaken, and the information provided to shareholders, are set out in the Company’s Remuneration and Nomination Committee Charter. Recommendation 1.3 The Company has a written agreement with each of the Directors and the Incoming Directors and senior executives setting out the terms of their appointment. The material terms of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with its Chief Executive Officer, any of its directors, and any other person or entity who is a related party of the Chief Executive Officer or any of its directors will be disclosed in accordance with ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule). Recommendation 1.4 The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board. The Company Secretary is responsible for the application of best practice in corporate governance and also supports the effectiveness of the Board by: ensuring a good flow of information between the Board, its committees, and Directors; (a) (b) monitoring policies and procedures of the Board; (c) (d) advising the Board through the Chairman of corporate governance policies; and conducting and reporting matters of the Board, including the despatch of Board agendas, briefing papers and minutes. Recommendation 1.5 The Company has a Diversity Policy, the purpose of which is: (a) (b) to outline the Company’s commitment to creating a corporate culture that embraces diversity and, in particular, focuses on the composition of its Board and senior management; and to provide a process for the Board to determine measurable objectives and procedures which the Company will implement and report against to achieve its diversity goals. The Board intends to set measurable objectives for achieving diversity, specifically including gender diversity and will review and report on the effectiveness and relevance of these measurable objectives. However, due to the current size of the Board and management, these measurable objectives have not yet been set. 7 ResApp Health Limited – Annual Report ABN 51 094 468 318 Recommendation 1.6 The Chief Executive Officer will be responsible for evaluating the performance of the Company’s senior executives in accordance with the process disclosed in the Company’s Process for Performance Evaluations, which is currently being developed by the Board, following the Company’s reinstatement to the ASX. The Chair will be responsible for evaluating the performance of the Company’s Chief Executive Officer in accordance with the process disclosed in the Company’s Process for Performance Evaluations, which is currently being developed by the Board. Recommendation 1.7 The Chair will be responsible for evaluating the performance of the Board, Board committees and individual directors in accordance with the process disclosed in the Company’s Board performance evaluation policy. This policy is to ensure: (a) (b) (c) individual Directors and the Board as a whole work efficiently and effectively in achieving their functions; the executive Directors and key executives execute the Company’s strategy through the efficient and effective implementation of the business objectives; and committees to which the Board has delegated responsibilities are performing efficiently and effectively in accordance with the duties and responsibilities set out in the board charter. This policy will be reviewed annually. During the reporting period, an evaluation of the Board, its committees and individual directors has taken place in accordance with the Company’s policy. Principle 2: Structure the board to add value Recommendation 2.1 Due to the size of the Board, the Company does not have a separate nomination committee. The roles and responsibilities of a nomination committee are currently undertaken by the Board. The duties of the full Board in its capacity as a nomination committee are set out in the Company’s Remuneration and Nomination Committee Charter which is available on the Company’s website. When the Board meets as a remuneration and nomination committee is carries out those functions which are delegated to it in the Company’s Remuneration and Nomination Committee Charter. Items that are usually required to be discussed by a Remuneration and Nomination Committee are marked as separate agenda items at Board meetings when required. The Board has adopted a Remuneration and Nomination Committee Charter which describes the role, composition, functions and responsibilities of a Nomination Committee and is disclosed on the Company’s website. Recommendation 2.2 The mix of skills and diversity which the Board is looking to achieve in its composition is: (a) (b) a broad range of business experience; and technical expertise and skills required to discharge duties. Recommendation 2.3 The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the Principles and Recommendations. Currently the Board is structured as follows: Dr Roger Aston (Chairman); (a) (b) Dr Anthony Keating (Managing Director and CEO); (c) Mr Adam Sierakowski (Non-executive Director); and (d) Mr Chris Ntoumenopoulos (Non-executive Director). 8 ResApp Health Limited – Annual Report ABN 51 094 468 318 Recommendation 2.3(continued) Dr Keating and Dr Aston were appointed to the Board on 2 July 2015. Dr Keating is an executive director of the Company and is therefore a non-independent director. Dr Aston is an independent, non-executive Chairman of the Board. Mr Sierakowski has been a director of the Company since 20 December 2013. He is a director and shareholder of Trident, a provider of material professional services, and accordingly, is also not independent. Mr Ntoumenopoulos is an independent director who was appointed to the Board on 21 January 2015. Recommendation 2.4 Currently, the Board considers that membership weighted towards technical expertise is appropriate at this stage of the Company’s operations. Accordingly, the Board does not have a majority of independent directors. Recommendation 2.5 Dr Aston is an independent Chairman of the Board. Recommendation 2.6 It is a policy of the Company, that new Directors undergo an induction process in which they are given a full briefing on the Company. Where possible this includes meetings with key executives, tours of the premises, an induction package and presentations. In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development. Specifically, Directors are provided with the resources and training to address skills gaps where they are identified. Principle 3: Act ethically and responsibly Recommendation 3.1 The Company is committed to promoting good corporate conduct grounded by strong ethics and responsibility. The Company has established a Code of Conduct (Code), which addresses matters relevant to the Company’s legal and ethical obligations to its stakeholders. It may be amended from time to time by the Board, and is disclosed on the Company’s website. The Code applies to all Directors, employees, contractors and officers of the Company. The Code will be formally reviewed by the Board each year. Principle 4: Safeguard integrity in corporate reporting Recommendation 4.1 Due to the size of the Board, the Company does not have a separate Audit Committee. The roles and responsibilities of an audit committee are undertaken by the Board. The full Board in its capacity as the audit committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. The duties of the full Board in its capacity as the audit committee are set out in the Company’s Audit Committee Charter which is available on the Company’s website. When the Board meets as an audit committee is carries out those functions which are delegated to it in the Company’s Audit Committee Charter. Items that are usually required to be discussed by an Audit Committee are marked as separate agenda items at Board meetings when required. The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises. Candidates for the position of external auditor must demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to the Company's business and circumstances. The performance of the external auditor is reviewed on an annual basis by the Board. The Board has adopted an Audit Committee Charter which describes the role, composition, functions and responsibilities of the Audit Committee and is disclosed on the Company’s website. Recommendation 4.2 Before the Board approves the Company financial statements for each financial period it will receive from the Chief Executive Officer and the Chief Financial Officer or equivalent a declaration that, in their opinion, the financial records of the Company for the relevant financial period have been properly maintained and that the financial statements for the relevant financial period comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Company and the consolidated entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. 9 ResApp Health Limited – Annual Report ABN 51 094 468 318 Recommendation 4.3 Under section 250RA of the Corporations Act, the Company’s auditor is required to attend the Company’s annual general meeting at which the audit report is considered, and does not arrange to be represented by a person who is a suitably qualified member of the audit team that conducted the audit and is in a position to answer questions about the audit. Each year, the Company will write to the Company’s auditor to inform them of the date of the Company’s annual general meeting. In accordance with section 250S of the Corporations Act, at the Company’s annual general meeting where the Company’s auditor or their representative is at the meeting, the Chair will allow a reasonable opportunity for the members as a whole at the meeting to ask the auditor (or its representative) questions relevant to the conduct of the audit; the preparation and content of the auditor’s report; the accounting policies adopted by the Company in relation to the preparation of the financial statements; and the independence of the auditor in relation to the conduct of the audit. The Chair will also allow a reasonable opportunity for the auditor (or their representative) to answer written questions submitted to the auditor under section 250PA of the Corporations Act. Principle 5: Make timely and balanced disclosure Recommendation 5.1 The Company is committed to: (a) (b) (c) ensuring that shareholders and the market are provided with full and timely information about its activities; complying with the continuous disclosure obligations contained in the Listing Rules and the applicable sections of the Corporations Act; and providing equal opportunity for all stakeholders to receive externally available information issued by the Company in a timely manner. The Company has adopted a Disclosure Policy, which is disclosed on the Company’s website. The Disclosure Policy sets out policies and procedures for the Company’s compliance with its continuous disclosure obligations under the ASX Listing Rules, and addresses financial markets communication, media contact and continuous disclosure issues. It forms part of the Company’s corporate policies and procedures and is available to all staff. The Company Secretary manages the policy. The policy will develop over time as best practice and regulations change and the Company Secretary will be responsible for communicating any amendments. This policy will be reviewed by the Board annually. Principle 6: Respect the rights of security holders Recommendation 6.1 The Company provides information about itself and its governance to investors via its website at www.resapphealth.com.au. The Company is committed to maintaining a Company website with general information about the Company and its operations and information specifically targeted at keeping the Company’s shareholders informed about the Company. In particular, where appropriate, after confirmation of receipt by ASX, the following will be posted to the Company website: relevant announcements made to the market via ASX; (a) (b) media releases; (c) (d) (e) (f) investment updates; Company presentations and media briefings; copies of press releases and announcements for the preceding three years; and copies of annual and half yearly reports including financial statements for the preceding three years. Recommendation 6.2 The Company has a Shareholder Communication and Investor Relations Policy which aims to ensure that Shareholders are informed of all major developments of the Company. The policy is disclosed on the Company’s website. Information is communicated to Shareholders via: reports to Shareholders; (a) (b) ASX announcements; (c) (d) annual general meetings; and the Company website. 10 ResApp Health Limited – Annual Report ABN 51 094 468 318 Recommendation 6.2 (continued) This Shareholder Communication and Investor Relations policy will be formally reviewed by the Board each year. While the Company aims to provide sufficient information to Shareholders about the Company and its activities, it understands that Shareholders may have specific questions and require additional information. To ensure that Shareholders can obtain all relevant information to assist them in exercising their rights as Shareholders, the Company has made available a telephone number and relevant contact details (via the website) for Shareholders to make their enquiries. Recommendation 6.3 The Board encourages full participation of Shareholders at meetings to ensure a high level of accountability and identification with the Company’s strategies and goals. However, due to the size and nature of the Company, the Board does not consider a policy outlining the policies and processes that it has in place to facilitate and encourage participating at meetings of shareholders to be appropriate at this stage. Recommendation 6.4 Shareholders are given the option to receive communications from, and send communication to, the Company and its share registry electronically. To ensure that shareholders can obtain all relevant information to assist them in exercising their rights as shareholders, the Company has made available a telephone number and relevant contact details (via the website) for shareholders to make their enquiries. Principle 7: Recognise and manage risk Recommendation 7.1 Due to the size of the Board, the Company does not have a separate Risk Committee. The Board is responsible for the oversight of the Company’s risk management and control framework. When the Board meets as a risk committee is carries out those functions which are delegated to it in the Company’s Risk Committee Charter. Items that are usually required to be discussed by a Risk Committee are marked as separate agenda items at Board meetings when required. The Board has adopted a Risk Committee Charter which describes the role, composition, functions and responsibilities of the Risk Committee and is disclosed on the Company’s website. The Board has adopted a Risk Management Policy, which is disclosed on the Company’s website. Under the policy, responsibility and control of risk management is delegated to the appropriate level of management within the Company with the Chief Executive Officer having ultimate responsibility to the Board for the risk management and control framework. The risk management system covers: operational risk; financial reporting; compliance / regulations; and system / IT process risk. (a) (b) (c) (d) A risk management model is to be developed and will provide a framework for systematically understanding and identifying the types of business risks threatening the Company as a whole, or specific business activities within the Company. Recommendation 7.2 The Board will review the Company’s risk management framework annually to satisfy itself that it continues to be sound, to determine whether there have been any changes in the material business risks the Company faces and to ensure that the Company is operating within the risk appetite set by the Board. Arrangements put in place by the Board to monitor risk management include, but are not limited to: (a) monthly reporting to the Board in respect of operations and the financial position of the Company; and quarterly rolling forecasts prepared; (b) 11 ResApp Health Limited – Annual Report ABN 51 094 468 318 Recommendation 7.3 The Company does not have, and does not intend to establish, an internal audit function. To evaluate and continually improve the effectiveness of the Company’s risk management and internal control processes, the Board relies on ongoing reporting and discussion of the management of material business risks as outlined in the Company’s Risk Management Policy. Recommendation 7.4 Given the speculative nature of the Company’s business, it is subject to general risks and certain specific risks as outlined in the Company’s Prospectus. The Company has identified those economic, environmental and/or social sustainability risks to which it has a material exposure, and disclosed how it intends to manage those risks. Principle 8: Remunerate fairly and responsibly Recommendation 8.1 Due to the size of the Board, the Company does not have a separate remuneration committee. The roles and responsibilities of a remuneration committee are currently undertaken by the Board. The duties of the full board in its capacity as a remuneration committee are set out in the Company’s Remuneration and Nomination Committee Charter which is available on the Company’s website. When the Board meets as a remuneration committee is carries out those functions which are delegated to it in the Company’s Remuneration and Nomination Committee Charter. Items that are usually required to be discussed by a Remuneration Committee are marked as separate agenda items at Board meetings when required. The Board has adopted a Remuneration and Nomination Committee Charter which describes the role, composition, functions and responsibilities of the Remuneration Committee and is disclosed on the Company’s website. Recommendation 8.2 Details of the Company’s policies on remuneration will be set out in the Company’s ”Remuneration Report” in each Annual Report published by the Company. This disclosure will include a summary of the Company’s policies regarding the deferral of performance-based remuneration and the reduction, cancellation or claw-back of the performance-based remuneration in the event of serious misconduct or a material misstatement in the Company’s financial statements. Recommendation 8.3 The Company does not currently have an equity-based remuneration scheme. Security Trading Policy In accordance with ASX Listing Rule 12.9, the Company has adopted a trading policy which sets out the following information: (a) (b) (c) closed periods in which directors, employees and contractors of the Company must not deal in the Company’s securities; trading in the Company’s securities which is not subject to the Company’s trading policy; and the procedures for obtaining written clearance for trading in exceptional circumstances. The Company’s Security Trading Policy is available on the Company’s website. 12 ResApp Health Limited – Annual Report ABN 51 094 468 318 Remuneration report (audited) Non- executive Director Remuneration The board policy is to remunerate non-executive directors at a level which provides the company with the ability to attract and retain directors with the experience and qualification appropriate to the development strategy of the company’s Intellectual Property. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. This was set at $200,000 per annum by shareholders on 18 November 2005. Directors’ fees are reviewed annually. For the year ended 30 June 2015, Chairman and non- executive director fees were $75,000 and $48,000 per annum respectively. Non-executive directors’ fees are not linked to the performance of the company. However to align directors interests with shareholder interests, the directors are encouraged to hold shares in the company. During the year to 30 June 2015, the Company did not engage in any remuneration consultants. Executive Directors’ Remuneration The board policy is to remunerate executive directors at a level that provides the company with the ability to attract and retain executives with the experience and qualification appropriate to the development strategy of the company’s Intellectual Property. Relationship between the remuneration policy and company performance Aside from the matters described above, no Director held or holds any contract for performance-based remuneration with the Company. Director and executive remuneration The directors incurred the following amounts as compensation for their services as directors and executives of the company during the year. Short-term employee benefits Post employment benefits Bonus $ Other $ Superannuation $ Share- based payment Options & rights $ Total $ % Consistin g of share- based payments $ 2015 Directors Mr Cyril D’Silva5 Mr Adam Sierakowski6 Dr Robert Ramsay 7 Mr Chris Ntoumenopoulos1 Total 1 Salary & fees $ - 48,000 48,000 21,290 117,290 - - - - - - - - - - - - - - - - - - - - 48,000 48,000 21,290 - 117,290 Chris was appointed on 21 January 2015 and his director fees were paid to Sobol Capital Pty Ltd. - - - - - 13 ResApp Health Limited – Annual Report ABN 51 094 468 318 Short-term employee benefits Post employment benefits Bonus $ Other $ Superannuation $ Share- based payment Options & rights $ Total $ % Consistin g of share- based payments $ - - - - - - - - - - - - - - - - - - - - - - - - - - - 17,000 18,889 18,000 46,023 24,000 24,000 - 147,912 - - - - - 2014 Directors Mr David Mandel2 Mr Peter Christie3 Mr Simon Lill4 Mr Cyril D’Silva5 Mr Adam Sierakowski6 Dr Robert Ramsay7 Salary & fees $ 17,000 18,889 18,000 46,023 24,000 24,000 147,912 Total 2 3 4 5 6 7 David resigned on 20 December 2013 and his director fees were paid to Chastain Corporate Pty Ltd. Peter resigned on 20 December 2013 and his director fees were paid to Hawkins Christie Management Services Pty Ltd. Simon resigned on 20 December 2013 and his director fees were paid to Trident Capital Pty Ltd. Cyril resigned on 21 January 2015 and his director fees are paid to Clayhill Capital Consultants Pty Ltd. Adam was appointed on 20 December 2013 and his director fees are paid to Trident Capital Pty Ltd. Robert was appointed on 20 December 2013 and his director fees are paid to himself. Robert resigned on 2 July 2015. Transactions with key management personnel and related parties A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. A number of these entities transacted with the Company in the reporting period. The terms and conditions of the transactions with management persons and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis. Company secretarial and accounting services Adam Sierakowski is a Director and shareholder of Trident Management Services Pty Ltd (“Trident Management Services”), which provided the Company with accounting and company secretarial services. The amount incurred for the year ended 30 June 2015 was $70,041 (2014: $82,387). The amount payable as at 30 June 2015 is $4,550 (2014: $73,093). Debt forgiven and written off for the year ended 30 June 2015 was $58,653 (incl gst) (2014: $nil). Corporate finance and office services Adam Sierakowski is a Director and shareholder of Trident Capital Pty Ltd (“Trident Capital”) which provides corporate advisory services and office accommodation. The amount incurred for the year ended 30 June 2015 was $69,000 (2014: $84,000). The amount payable as at 30 June 2015 is $nil (2014: $69,300). Debt forgiven and written off for the year ended 30 June 2015 was $83,600 (incl gst) (2014: $nil). Legal fees Adam Sierakowski is a Director and shareholder of Price Sierakowski Pty Ltd (“Price Sierakowski”) which provides legal services. The amount incurred for the year ended 30 June 2015 was $172,179 (2014: $36,310). The amount payable as at 30 June 2015 is $64,844 (2014: $18,854). 14 ResApp Health Limited – Annual Report ABN 51 094 468 318 Capital raising fees Trident Capital and Price Sierakowski also provided capital raising services. The amount incurred during the year and payable as at 30 June 2015 is as shown below: Amount Incurred for the year ended 30 June 2015 Amount Payable as at 30 June 2015 $27,500 $33,724 $22,000 $11,592 Trident Capital Price Sierakowski Nil capital raising fees were incurred or payable as at 30 June 2014. Reimbursement For the year ended 30 June 2015, $6,072 (2014: $194) was paid to Adam Sierakowski as a reimbursement of expenses. Cyril D’Silva is a Director and shareholder of Golden Saint Australia Ltd (“Golden Saint Australia”). For the year ended 30 June 2014, $2,285 was paid to Golden Saint Australia as a reimbursement of expenses. For the year ended 30 June 2014, $10,000 was paid to Cyril D’Silva for travel expenses. Loan advancement $20,300 of interest was charged on the loan to Golden Saint Minerals Guinea (“GSMG”). Cyril D’Silva is a Director and shareholder of GSMG. Director fees Amounts of Director fees incurred during the current and prior year are set out on page 13. The amount payable as at 30 June 2015 to Clayhill Capital Consultants Pty Ltd is $nil. The amount payable as at 30 June 2015 to Trident Capital Pty Ltd is $4,000. The amount payable as at 30 June 2015 to Rob Ramsay is $8,000. The amount payable as at 30 June 2015 to Sobol Capital Pty Ltd is $4,000. Directors’ shareholdings The following table sets out each director’s relevant interest in shares and options in shares of the Company during the year and as at 30 June 2015. Balance at 1 July 2014 or on date of appointment Granted as remuneration during the year Issued on exercise of options during the year Other changes during the year Balance at 30 June 2015 or on date of resignation 2015 Mr Cyril D’Silva Mr Adam Sierakowski Dr Robert Ramsay Mr Chris Ntoumenopoulos 1,100,000 22,195,939 - - Total 23,295,939 - - - - - - - - - - (687,500)(i) (13,872,462)(i) - - 412,500(ii) 8,323,477 - - (14,559,962) 23,295,939 (i) The Company’s share capital was consolidated on a 3:8 basis as at 4 June 2015. (ii) Shareholding shown on a post-consolidation basis for consistency. 15 ResApp Health Limited – Annual Report ABN 51 094 468 318 Balance at 1 July 2013 or on date of appointment Granted as remuneration during the year Issued on exercise of options during the year Other changes during the year Balance at 30 June 2014 or on date of resignation 2014 Mr David Mandel Mr Simon Lill Mr Peter Christie Mr Cyril D’Silva Mr Adam Sierakowski Dr Robert Ramsay Total 150,000 4,000,000 - - 21,195,939 - 25,345,939 - - - - - - - - - - - - - - - - - 1,100,000 1,000,000 - 150,000 4,000,000 - 1,100,000 22,195,939 - 2,100,000 27,445,939 The directors held nil options during the years to 30 June 2014 and 2015. The performance of the Company depends upon the quality of its directors and executives to prosper. It is imperative that the company attract, motivate and retain appropriately experienced and qualified directors and executives. To this end, the company’s remuneration framework is embodied with the principles of providing competitive rewards to attract high calibre executives and link executives’ rewards to shareholder value. In accordance with best practice corporate governance, the structure of non-executive directors and executive management remuneration is separate and distinct. Currently, the Board consists of three non-executive Directors. End of audited Remuneration Report 16 ResApp Health Limited – Annual Report ABN 51 094 468 318 The relevant interest of each director in the shares issued by the Company as notified by the directors to the Australian Securities Exchange in accordance with Section 205G(1) of the Corporations Act 2001, as at the date of this report are as follows: Director Mr Adam Sierakowski1 Ordinary Shares 17,698,477 Performance Shares - - - - 2,109,375 Dr Robert Ramsay Mr Chris Ntoumenopoulos 2 Dr Tony Keating Dr Roger Aston 3 1 Mr Sierakowski holds 6,448,477 Shares in IML Holdings Limited and 11,250,000 Shares in Trident Capital Pty Ltd, entities of which he is a director and shareholder. 2 Mr Ntoumenopoulos holds 2,109,375 Shares in Sobol Capital Pty Ltd, an entity of which he is a director and shareholder. 3 Dr Aston holds 8,437,500 Shares and 8,437,500 Performance Shares in Newtonmore Biosciences Pty Ltd, an entity of which he is a director and shareholder. - 8,437,500 - 8,437,500 Unlisted share options granted to directors At the date of this report, there are 20 million unlisted options on issue as follows: Director/Consultant Grant date Exercise price Number Value Expiry date Tony Keating Tony Keating Tony Keating Dr Udantha Abeyratne Dr Udantha Abeyratne 2 July 2015 2 July 2015 2 July 2015 22 September 2015 22 September 2015 $0.025 $0.05 $0.10 $0.05 5,000,000 5,000,000 10,000,000 3,000,000 $95,000 $85,000 $150,000 -1 2 July 2020 2 July 2020 2 July 2020 $0.10 2,000,000 -1 Total 25,000,000 1 As at the date of this report, these options issued have not yet been valued. $330,000 In 2011 unlisted options were granted to directors and an external consultant in consideration for their role as directors and for consulting services rendered. The details are as follows: Director/Consultant Grant date Exercise price Number Value Expiry date Peter Christie1 David Mandel2 25 May 2011 25 May 2011 $0.02 $0.02 2,500,000 2,500,000 $52,500 $52,500 14 July 2014 14 July 2014 Total 1 Peter resigned on 20 December 2013 2 David resigned on 20 December 2013 5,000,000 $105,000 Voting and comments made at the Company’s 2014 Annual General Meeting The Company received more than 99% of votes, of those shareholders who exercised their right to vote, in favour of the remuneration report for the 2014 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. Proceedings on behalf of the company No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. 17 ResApp Health Limited – Annual Report ABN 51 094 468 318 Non-audit services During the year $nil was paid to the auditor for the provision of non-audit services (2014: nil). Auditor’s independence declaration The auditor’s independence declaration is included on page 19 of the annual report. Signed in accordance with a resolution of the directors Adam Sierakowski Director Perth 30 September 2015 18 ResApp Health Limited – Annual Report ABN 51 094 468 318 Statement of profit or loss and other comprehensive income for the financial year ended 30 June 2015 Other revenue Administration expenses Exploration costs Finance costs Due diligence costs Profit/(loss) before income tax Income tax benefit Loss for the year Note 2015 $ 2014 $ 5 6 8 173,427 (662,128) - (620) - 1,467 (457,441) (12,896) (902) (108,616) (489,321) (578,388) (489,321) (578,388) Other comprehensive income for the year - - Total comprehensive loss for the year (489,321) (578,388) Loss per share (basic and diluted) (cents) 13 (0.24) (0.35) The accompanying notes form an integral part of this Statement of profit or loss or other comprehensive income. 20 ResApp Health Limited – Annual Report ABN 51 094 468 318 Statement of financial position as at 30 June 2015 CURRENT ASSETS Cash and cash equivalents Trade receivables Other receivables Other assets Total Current Assets Note 14 9 2015 $ 2014 $ 4,097,129 65,017 520,300 98,143 4,780,589 38,034 5,514 290,000 4,878 338,426 Total Assets 4,780,589 338,426 CURRENT LIABILITIES Trade and other payables Annual leave provision Funds received in advance of share issue Total Current Liabilities Total Liabilities Net Assets EQUITY Issued capital Reserves Accumulated losses Total Equity 10 11 12 487,126 - 3,808,522 4,295,648 4,295,648 484,941 4,004,499 - (3,519,558) 215,269 1,745 - 217,014 217,014 121,412 3,151,649 210,000 (3,240,237) 484,941 121,412 The accompanying notes form an integral part of this Statement of financial position. 21 ResApp Health Limited – Annual Report ABN 51 094 468 318 Statement of changes in equity for the financial year ended 30 June 2015 Fully paid ordinary shares $ Equity-settled benefits reserve $ Accumulated losses $ Total $ Balance at 1 July 2013 Loss for the year Total comprehensive income Transactions with owners, in their capacity as owners Issue of shares Costs directly attributable to issue of share capital Balance at 30 June 2014 Balance at 1 July 2014 Loss for the year Total comprehensive income Transactions with owners, in their capacity as owners Expiration of options Issue of shares Costs directly attributable to issue of share capital Balance at 30 June 2015 2,623,029 - - 546,120 (17,500) 3,151,649 3,151,649 - - - 900,000 (47,150) 4,004,499 210,000 - - - - 210,000 210,000 - - (210,000) - - (2,661,849) (578,388) (578,388) - - (3,240,237) (3,240,237) (489,321) (489,321) 210,000 - - - (3,519,558) The accompanying notes form an integral part of this Statement of changes in equity. 171,180 (578,388) (578,388) 546,120 (17,500) 121,412 121,412 (489,321) (489,321) - 900,000 (47,150) 484,941 22 ResApp Health Limited – Annual Report ABN 51 094 468 318 Statement of cash flows for the financial year ended 30 June 2015 Note 2015 $ 2014 $ Cash flows from operating activities Cash payments to suppliers and employees Interest paid Interest received (394,163) (620) 2,506 (350,640) (902) 1,467 Net cash flows used in operating activities 14 (392,277) (350,075) Cash flows from investing activities Advance to Golden Saint Minerals Guinea Advance to ResApp Diagnostics 9 9 - (210,000) (290,000) - Net cash flows used in investing activities (210,000) (290,000) Cash flows from financing activities Costs of capital raising Proceeds from Issue of share capital Monies raised in advance of share issues (233,628) 900,000 3,995,000 (17,500) 546,120 - Net cash flows provided by financing activities 4,661,372 528,620 Net decrease in cash and cash equivalents 4,059,095 (111,455) Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 38,034 149,489 14 4,097,129 38,034 The accompanying notes form an integral part of this Statement of cash flows. 23 ResApp Health Limited – Annual Report ABN 51 094 468 318 Notes to the financial statements NOTE 1 REPORTING ENTITY This annual financial report includes the financial statements and notes of ResApp Health Limited (“the Company”). The Company is a for-profit entity primarily and is domiciled in Australia. The Company, through an exclusive license is developing smart phone applications for respiratory disease diagnostics and management. Its registered address is Level 24, 44 St George’s Terrace, Perth, Western Australia. NOTE 2 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 liabilities in the ordinary course of business. The entity incurred an operating loss of $489,321 for the year ended 30 June 2015 (2014: $578,388) and a net cash outflow from operating activities amounting to $392,277 (2014: $350,075). The Company successfully completed a public capital raising of $4,000,000 under a Replacement Prospectus dated 26 May 2015. The shares were issued on 2 July 2015 and the Company’s securities were re-instated to trading on 14 July 2015. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. The Directors believe there are sufficient funds to meet the Company’s working capital requirements and as at the date of this report, the Company believes it can meet all liabilities as and when they fall due. NOTE 3 NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS There are a number of new Accounting standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Company and have not been applied in preparing these consolidated financial statements. The Company does not plan to adopt these standards early. These standards are not expected to have a material impact on the Company in the current or future reporting periods. NOTE 4 SIGNIFICANT ACCOUNTING POLICIES Basis of preparation These financial statements include the financial statements of the Resapp Health Limited (the “Company”). These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards are equivalent to International Financial Reporting Standards (“IFRS”). Compliance with Australian Accounting Standards ensures that these financial statements comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. Except for the cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The functional currency of the Company is measured using the currency of the primary economic environment in which the Company operates. These financial statements are presented in Australian dollars which is the Company’s functional and presentation currency. The following significant accounting policies have been adopted in the preparation and presentation of the financial report: a) Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 24 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 4 SIGNIFICANT ACCOUNTING POLICIES (CONT’D) b) Financial instruments Recognition and Initial Measurement Financial instruments, incorporating financial assets and financial liabilities, are recognised when the Company becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention. Financial instruments are initially measured at fair value plus transaction costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are then classified and measured as set out below. Classification and Subsequent Measurement All financial instruments of the Company are subsequently measured at amortised cost, using the effective interest rate method. Amortised Cost Amortised cost is calculated as a) the amount at which the financial asset or liability is measured at initial recognition; b) less principal repayments; c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and d) less any reduction for impairment. Effective Interest Rate Method The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. Derecognition Financial instruments are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the Company no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment of financial assets Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. 25 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 4 SIGNIFICANT ACCOUNTING POLICIES (CONT’D) b) Financial instruments (cont’d) Debt and equity instruments Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangements. c) Impairment of other tangible and intangible assets At each reporting date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase. d) Income Tax Current tax Current tax is calculated by reference to the amount of income taxes payable to or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred tax Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the balance sheet. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from the initial recognition of goodwill. 26 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 4 SIGNIFICANT ACCOUNTING POLICIES (CONT’D) d) Income Tax (cont’d) Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures except where the company is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interest are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. Deferred tax liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequence that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities Deferred Tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authorities and the company intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the period Current and deferred tax is recognised as an expense or income in the statement of profit or loss and other comprehensive income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess. e) Research and development costs Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project is expected to deliver future economic benefits and these benefits can be measured reliably. Capitalised development costs have a finite useful life and are amortised on a systematic basis based on the future economic benefits over the useful life of the project. f) Share-based payments Equity-settled share-based payments are measured at fair value of the equity instrument at the grant date. Fair value is measured by the use of a binomial model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. g) Critical accounting judgements and key sources of estimation uncertainty The directors make a number of estimates and assumptions in preparing general purpose financial statements. The resulting accounting estimates, will, by definition, seldom equal the related actual results. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods if relevant. The following key judgement and estimate was made in preparing these financial statements: Recoverability of loan to Golden Saint Minerals Guinee SA. Based on discussions with the directors of Golden Saint Minerals Guinee (GSMG), the directors believe that the loan to GSMG of $290,000 plus interest is recoverable. However this is subject to ongoing assessment and if the amount is deemed unrecoverable in future periods, it will be impaired accordingly. 27 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 5 OTHER REVENUE During the year, with the Company having limited funds, the Directors, Trident Capital Pty Ltd and Trident Management Services Pty Ltd agreed to write off amounts owing to Trident Capital Pty Ltd in relation to corporate advisory fees, office services fees, directors’ fees and Trident Management Services Pty Ltd in relation to accounting fees and company secretarial fees. Creditors debts forgiven Other revenue Interest income NOTE 6 ADMINISTRATION EXPENSES Corporate fees Consulting fees Director fees Professional fees (including legal fees) Administration expenses NOTE 7 REMUNERATION OF AUDITORS 2015 $ 142,253 8,369 22,806 173,428 2015 $ (45,000) (35,786) (117,290) (275,286) (188,766) (662,128) 2014 $ - - 1,467 1,467 2014 $ (60,000) (8,231) (147,912) (120,147) (121,151) (457,441) 2015 $ 2014 $ Auditor of the Company – Nexia Melbourne (resigned as auditor on 27 November 2013) Audit or review of the financial statements - - Auditor of the Company – Somes Cooke (appointed as auditor on 27 November 2013) 27,200 Audit or review of the financial statements 27,200 12,400 12,400 22,000 22,000 28 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 8 INCOME TAXES (a) Income tax recognised in profit or loss Tax expense/(income) comprises: Current tax expense/(income) Deferred tax expense/(income) relating to the origination and reversal of temporary differences Total tax expense/(income) (b) The prima face income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in the financial statements as follows: Loss from operations Income tax benefit calculated at 30% Tax effect of: - Other timing differences - Non deductible items - Non deductible share based payments - Capital raising costs - Capitalised acquisition expenses - Tax effect of current year revenue losses for which no deferred tax asset has been recognised 2015 $ 2014 $ - - - - - - (489,321) (146,796) (578,388) (173,516) 1,126 51,669 - (11,875) - (347) 10,893 - (3,263) - 105,876 - 166,233 - Income Tax Expense (c) Unrecognised deferred tax balances The following deferred tax assets (at 30%) have not been brought to account: Unrecognised deferred tax asset – tax losses Unrecognised deferred tax asset – other temporary differences Unrecognised deferred tax liability – capitalised acquisition expenses claimed for tax purposes Net deferred tax assets The net deferred tax assets not brought to account will only be of a benefit to the Company if future assessable income is derived of a nature and amount sufficient to enable the benefits to be realised, the conditions for deductibility imposed by the tax legislation continue to be complied with and the Company is able to meet the continuity of ownership and/or continuity of business tests. - 733,509 - 626,507 623,133 3,374 729,009 4,500 NOTE 9 OTHER RECEIVABLES Loan Receivable from Golden Saint Minerals Guinea On 30 December 2013, the Company entered into a loan agreement to advance $290,000 to Golden Saint Minerals Guinea SA (“GSMG”) to provide working capital to GSMG. As at 30 June 2015, the principal loan amount of $290,000 and interest of $20,300 is due and receivable by GSMG. Cyril D’Silva is a Director and shareholder of GSMG. Loan Receivable from ResApp Diagnostics Pty Ltd On 17 March 2015, the Company entered into a loan agreement to advance $210,000 to ResApp Diagnostics Pty Ltd (“ResApp Diagnostics”) to provide working capital to ResApp Diagnostics. On 2 July 2015, the Company completed its acquisition of ResApp Diagnostics and as such, interest on the loan was forgiven. NOTE 10 TRADE AND OTHER PAYABLES Trade and other payables1 Accruals 1 Amounts payable to related parties are detailed in note 16. 2015 $ 389,620 97,506 2014 $ 196,486 18,783 487,126 215,269 29 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 11 FUNDS RECEIVED IN ADVANCE OF SHARE ISSUE As at 30 June 2015, the Company had raised funds totalling $3,995,000 under the Company’s Replacement Prospectus dated 26 May 2015 for which shares had yet to be issued. The shares were issued subsequent to year end, on 2 July 2015. Funds received in advance of share issue Costs directly attributable to shares not yet issued NOTE 12 ISSUED CAPITAL Fully paid ordinary shares and authorised capital Balance at beginning of financial year Shares issued Costs directly attributable to shares issued Number of shares Fully paid ordinary shares and authorised capital Balance at beginning of financial year Shares issued 19 December 2013(i) Shares issued 19 December 2014(ii) Shares issued 24 March 2015(iii) Shares issued 26 June 2015(iv) Capital Consolidation 4 June 2015(v) 2015 $ 3,995,000 (186,478) 3,808,522 2014 $ - - - 2015 $ 2014 $ 3,151,649 900,000 (47,150) 2,623,029 546,120 (17,500) 4,004,499 3,151,649 No No 484,729,407 - 110,000,000 60,000,000 3,750,000 (409,206,054) 430,117,350 54,612,057 - - - - 249,273,353 484,729,407 (i) On 19 December 2013, 54,612,057 shares were issued at $0.01 per share under a Sophisticated Placement Raising. (ii) On 19 December 2014, 110,000,000 shares were issued at $0.005 per share under a Sophisticated Placement Raising. (iii) On 24 March 2015, 60,000,000 shares were issued at $0.005 per share under a Sophisticated Placement Raising. (iv) On 26 June 2015, 3,750,000 shares were issued at $0.0133 per share under a Sophisticated Placement Raising. (v) On 4 June 2015, the Company’s issued capital was consolidated on a 3:8 basis as approved by Shareholders at the Company’s General Meeting held on 27 May 2015. Fully paid ordinary shares carry one vote per share and carry the right to dividends. Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. 30 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 13 LOSS PER SHARE 2015 $ 2014 $ The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: Attributable to ordinary equity holders (used in calculating basic and diluted EPS) – continuing operations. Weighted average number of ordinary shares for the purpose of basic 172,122,904 and diluted earnings per share adjusted for share consolidation Earnings per share (basic and diluted) (cents)* (0.35) * For the purposes of comparability between the 2014 and 2015 financial years, the basic and diluted EPS have been calculated with the assumption that the shares have always been consolidated on the basis of 3:8 that occurred on 4 June 2015 205,330,089 (0.24) (578,388) (489,321) NOTE 14 NOTES TO THE CASH FLOW STATEMENT (a) Reconciliation of cash and cash equivalents For the purpose of the cash flow statement, cash includes cash on hand and in banks and deposits at call, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the Cash Flow Statement is reconciled to the related items in the balance sheet as follows: Cash at bank (b) Reconciliation of loss for the period to net cash flows from operating activities Net Loss Adjustments for Assets written off Trade and other payables forgiven Interest accrued Changes in assets and liabilities (Increase)/decrease in assets: Receivables and other assets (Decrease)/increase in liabilities: Trade and other payables (Decrease)/increase in provisions: Annual leave provision 2015 $ 4,097,129 2014 $ 38,034 4,097,129 38,034 2015 $ 2014 $ (489,321) (578,388) - (150,621) (20,300) 80,443 - - (152,768) 4,939 422,478 141,186 (1,745) 1,745 Net cash flows from operating activities (392,277) (350,075) 31 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 15 FINANCIAL INSTRUMENTS The Company’s financial instruments consist mainly of deposits with banks and accounts receivable and payable. Financial Assets Cash and cash equivalents Trade receivables Other receivables Total financial assets Financial Liabilities Trade and other payables Total financial liabilities Note 14 2015 $ 4,097,129 65,017 520,300 2014 $ 38,034 5,514 290,000 4,682,446 333,548 487,126 215,269 487,126 215,269 (a) Financial risk management policies The Company’s principal financial instruments comprise cash and short-term deposits, trade and other payables and financial liabilities as disclosed in the financial statements. The main purpose of these financial instruments is to manage the working capital needs of the Company’s operations. It is the Company’s policy that no trading in financial instruments shall be undertaken. The main risk arising from the Company’s financial instruments is liquidity risk. The board reviews and agrees policies for managing this risk is summarized below. (i) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instruments are disclosed in Note 4 to the financial statements. (ii) Credit risk management The Company is not currently exposed to credit risk other than in the normal course of business. At the balance sheet date, the significant concentrations of credit risk are attributeable to cash and cash equivalents, as well as the loan receivable from Golden Saint Minerals Guinea SA (refer to note 9). Based on discussions with the directors of Golden Saint Minerals Guinee (GSMG), the directors believe that the loan to GSMG of $290,000 plus interest is recoverable. However this is subject to ongoing assessment and if the amount is deemed unrecoverable in future periods, it will be impaired accordingly. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. Credit risk related to balances with banks and other financial institutions is managed by the Board in accordance with approved board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard & Poor’s rating of at least AA-. The following table provides information regarding the credit risk relating to cash and money market securities based on Standard & Poor’s counterparty credit ratings. Cash and cash equivalents -AA rated Note 2015 $ 2014 $ 4,097,129 14 4,097,129 38,034 38,034 32 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 15 FINANCIAL INSTRUMENTS (CONT’D) (iii) Liquidity risk management Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. 2015 $ 2014 $ Note Financial liabilities due for payment Trade and other payables Total expected outflows Financial assets – cash flow realisable Cash and cash equivalents Trade receivables Other receivables 487,126 215,269 487,126 215,269 14 4,097,129 65,017 520,300 38,034 5,514 290,000 Total anticipated inflows 4,682,446 333,548 Net inflow on financial instruments 4,195,320 118,279 (iv) Interest rate risk The financial instruments which primarily expose the Company to interest rate risk are cash and cash equivalents. The Company’s exposure to interest rate risk and the effective interest rate for classes of financial assets and financial liabilities is set out below: Note Effective interest rate Floating interest rate $ 1 year or less 1 to 5 years $ $ Non- interest bearing $ Total $ 30 June 2015 Financial assets Cash assets Trade receivables Other receivables 14 1.50% 4,097,129 - - 7.00% 9 - - - 520,300 Total financial assets 4,097,129 520,300 Financial liabilities Trade and other payables Total financial liabilities - - - - - - - - - - - - 4,097,129 65,017 - 65,017 520,300 65,017 4,682,446 487,126 487,126 487,126 487,126 33 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 15 FINANCIAL INSTRUMENTS (CONT’D) (iv) Interest rate risk (cont’d) Note Effective interest rate Floating interest rate $ 1 year or less 1 to 5 years $ $ Non- interest bearing $ Total $ 14 9 2.30% - 7.00% 38,034 - - - - 290,000 38,034 290,000 - - - - - - - - - - - - 10,392 - 38,034 10,392 290,000 10,392 338,426 215,269 215,269 215,269 215,269 30 June 2014 Financial assets Cash assets Trade receivables Other receivables Total financial assets Financial liabilities Trade and other payables Total financial liabilities (v) Fair value of financial instruments The fair values of financial assets and financial liabilities are determined as follows: • The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and • The fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analyses. The directors consider that the carrying amounts of financial assets and financial liabilities which are all recorded at amortised cost less accumulated impairment charges in these financial statements, approximate their fair values. Note 2015 Carrying Amount $ 2015 Fair Value $ 2014 Carrying Amount $ 2014 Fair Value $ 14 4,097,129 4,097,129 38,034 38,034 9 65,017 520,300 65,017 520,300 10,392 290,000 10,392 290,000 4,682,446 4,682,446 338,426 338,426 487,126 487,126 215,269 215,269 487,126 487,126 215,269 215,269 Financial assets Cash and cash equivalents Trade receivables Other receivables Total financial assets Financial liabilities Trade and other payables Total financial liabilities 34 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 16 RELATED PARTY TRANSACTIONS (a) Transactions with key management personnel i. Key management personnel compensation The aggregate compensation made to key management personnel of the company and the Company is set out below: Short term employee benefits Post-employment benefits Termination benefits Other benefits Share-based payments 2015 $ 2014 $ 117,290 - - - - 147,912 - - - - 117,290 147,912 ii. Transactions with key management personnel and related parties A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. A number of these entities transacted with the Company in the reporting period. The terms and conditions of the transactions with management persons and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis. Company secretarial and accounting services Adam Sierakowski is a Director and shareholder of Trident Management Services Pty Ltd (“Trident Management Services”), which provided the Company with accounting and company secretarial services. The amount incurred for the year ended 30 June 2015 was $70,041 (2014: $82,387). The amount payable as at 30 June 2015 is $4,550 (2014: $73,093). The amount written off for the year ended 30 June 2015 was $58,653 (incl gst) (2014: $nil). The debt forgiven and written off in the year ended 30 June 2015 but was incurred in the previous year. Corporate finance and office services Adam Sierakowski is a Director and shareholder of Trident Capital Pty Ltd (“Trident Capital”) which provides corporate advisory services and office accommodation. The amount incurred for the year ended 30 June 2015 was $69,000 (2014: $84,000). The amount payable as at 30 June 2015 is $nil (2014: $69,300). The amount written off for the year ended 30 June 2015 was $83,600 (incl gst) (2014: $nil). The debt forgiven and written off in the year ended 30 June 2015 but was incurred in the previous year. Legal fees Adam Sierakowski is a Director and shareholder of Price Sierakowski Pty Ltd (“Price Sierakowski”) which provides legal services. The amount incurred for the year ended 30 June 2015 was $172,179 (2014: $36,310). The amount payable as at 30 June 2015 is $64,844 (2014: $18,854). Capital raising fees Trident Capital and Price Sierakowski also provided capital raising services. The amount incurred during the year and payable as at 30 June 2015 is as shown below: Amount Incurred for the year ended 30 June 2015 Amount Payable as at 30 June 2015 $27,500 $33,724 $22,000 $11,592 Trident Capital Price Sierakowski Nil capital raising fees were incurred or payable as at 30 June 2014. 35 ResApp Health Limited – Annual Report ABN 51 094 468 318 NOTE 16 RELATED PARTY TRANSACTIONS (CONT’D) (a) Transactions with key management personnel (cont’d) Reimbursement For the year ended 30 June 2015, $6,072.65 (2014: $194) was paid to Adam Sierakowski as a reimbursement of expenses. Cyril D’Silva is a Director and shareholder of Golden Saint Australia Ltd (“Golden Saint Australia”). For the year ended 30 June 2014, $2,285 was paid to Golden Saint Australia as a reimbursement of expenses. For the year ended 30 June 2014, $10,000 was paid to Cyril D’Silva for travel expenses) Loan advancement $20,300 of interest was charged on the loan to Golden Saint Minerals Guinea (“GSMG”). Cyril D’Silva is a Director and shareholder of GSMG. Director fees Amounts of Director fees incurred during the current and prior year are set out on page 11. The amount payable as at 30 June 2015 to Clayhill Capital Consultants Pty Ltd is $nil. The amount payable as at 30 June 2015 to Trident Capital Pty Ltd is $4,000. The amount payable as at 30 June 2015 to Rob Ramsay is $8,000. The amount payable as at 30 June 2015 to Sobol Capital Pty Ltd is $4,000. NOTE 17 COMMITMENTS AND CONTINGENT LIABILITIES There are no commitments and contingent liabilities as at the date of this report. NOTE 18 SUBSEQUENT EVENTS On 2 July 2015, the Company announced that the Share Sale Agreement dated 20 February 2015 between the Company, ResApp, the Shareholders of ResApp and UniQuest had completed with the Company acquiring 100% of ResApp. In accordance with the Company’s Replacement Prospectus dated 26 May 2015 and as approved by Shareholders at the General Meeting held on 27 May 2015, the following securities were issued (on a post consolidation basis): Public Offer – 200,000,000 Shares at $0.02 per Share having raised $4 million; (a) (b) Vendor Offer – 93,750,000 Shares and 93,750,000 Performance Shares issued in consideration for the acquisition of ResApp; Facilitation Offer – 18,749,999 Shares to the Facilitators for services provided; and Incentive Options – 20 million Incentive Options. (c) (d) Following completion of the acquisition, Dr Tony Keating was appointed to the Board of the Company in the position of Managing Director and Chief Executive Officer. Dr Roger Aston has also been appointed as a non- executive director, replacing Dr Rob Ramsay. Dr Roger Aston was subsequently appointed as Chairman of the Company, replacing Mr Adam Sierakowski who remains on the Board as a non-executive director. In addition, the Company changed its name from Narhex Life Sciences Limited to ResApp Health Limited and was reinstated to official quotation on the ASX on 14 July 2015 under the new ASX Code “RAP”. NOTE 19 SEGMENT NOTE The Company was operating under one business segment, being health technology. The Company also operates in one geographical location, being Australia. The Board of Directors’ review internal management reports that are consistent with the information provided in the statement of profit or loss and other comprehensive income, statement of financial position and statement of cash flows, in this Annual Report. 36 ResApp Health Limited – Annual Report ABN 51 094 468 318 Directors’ declaration The directors of the company declare that: 1. in the directors’ opinion, the financial statements and accompanying notes set out on pages 24 to 36 are in accordance with the Corporations Act 2001 and: (a) (b) comply with Accounting Standards and the Corporations Regulations 2001; and give a true and fair view of the company’s financial position as at 30 June 2015 and of its performance for the year ended on that date; 2. 3. 4. note 4 confirms that the financial statements also comply with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB); in the directors’ opinion, 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 remuneration disclosures included in pages 13 to 16 of the directors’ report (as part of the audited Remuneration Report), for the year ended 30 June 2015, comply with section 300A of the Corporations Act 2001; and This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by: Adam Sierakowski Director Perth 30 September 2015 37 ResApp Health Limited – Annual Report ABN 51 094 468 318 ASX Additional Information Pursuant to the Listing Rules of the Australian Securities Exchange, the shareholder information set out below was applicable as at 21 September 2015. Distribution of Equity Securities A. Analysis of numbers of shareholders by size of holding: Distribution 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and Over Total No. of shareholders 493 286 52 197 386 1,414 Number of Shares 245,596 677,389 381,489 10,259,369 550,209,509 561,773,352 There were 845 shareholders holding less than a marketable parcel of ordinary shares. Substantial Shareholders B. An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below: Shareholder Name UniQuest Pty Ltd Freeman Road Pty Ltd HSBC Custody Nominees (Australia) Limited Issued Ordinary Shares Number 42,187,500 30,000,000 28,473,438 % of shares 7.51 5.34 5.07 Twenty Largest Shareholders C. The names of the twenty largest holders of quoted shares are listed below: Shareholder Name UniQuest Pty Ltd Freeman Road Pty Ltd HSBC Custody Nominees (Australia) Limited Mr Jason Peterson & Mrs Lisa Peterson Mr Brian Leedman & Mrs Natasha Leedman Narhex Life Sciences Developments Limited Mr Philip Coulson Trident Capital Pty Ltd Paticoa Nominees Pty Ltd Dead Knick Pty Ltd Mr Mark John Bahen & Mrs Margaret Patricia Bahen Seamist Enterprises Pty Ltd Pershing Australia Nominees Pty Ltd Newtonmore Biosciences Pty Ltd Mr Gavin Michael Zischke Tashtech Pty Ltd Comsec Nominees Pty Limited TOTAL No. Shares % 42,187,500 30,000,000 28,473,438 19,088,642 18,750,000 15,000,000 12,975,000 11,250,000 10,697,170 10,562,500 10,250,000 10,000,000 8,606,137 8,437,500 7,310,000 7,292,421 6,000,000 6,000,000 4,730,000 4,500,000 4,043,603 276,153,911 7.51 5.34 5.07 3.40 3.34 2.67 2.31 2.00 1.90 1.88 1.82 1.78 1.53 1.50 1.30 1.30 1.07 1.07 0.84 0.80 0.72 49.16 40 ResApp Health Limited – Annual Report ABN 51 094 468 318 D. As at the date of this report there were nil listed options on issue in the Company. Listed Options Voting Rights E. In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. F. Unquoted Securities Unlisted Options - $0.026; 31 Dec 2016 Number of Options Number of Holders 33,750,000 31 Holders with more than 20% Freeman Road Pty Ltd - 44.44% Performance Shares Number of Performance Shares Number of Holders Holders with more than 20% Incentive Options - $0.025; expiring 2 July 2020 Number of Performance Shares Number of Holders Holders with more than 20% Incentive Options - $0.05; expiring 2 July 2020 Number of Performance Shares Number of Holders Holders with more than 20% Incentive Options - $0.10; expiring 2 July 2020 Number of Performance Shares Number of Holders Holders with more than 20% Incentive Options - - $0.05; expiring 22 September 2020 Number of Performance Shares Number of Holders Holders with more than 20% 93,750,000 8 Uniquest Pty Ltd – 45% Brian Leedman & Natasha Leedman – 20% 5,000,000 1 Dr Tony Keating – 100% 5,000,000 1 Dr Tony Keating – 100% 10,000,000 1 Dr Tony Keating – 100% 3,000,000 1 Dr Udantha Abeyratne – 100% 41 ResApp Health Limited – Annual Report ABN 51 094 468 318 Incentive Options- $0.10; expiring 22 September 2020 Number of Performance Shares Number of Holders Holders with more than 20% 2,000,000 1 Dr Udantha Abeyratne – 100% G. On Market Buy-Back There is no current on market buy-back for any of the Company’s securities. H. Restricted Securities Shares Shares - Escrowed 12 months to 19 December 2015 Shares - Escrowed 12 months to 2 July 2016 Shares - Escrowed 24 months to 14 July 2017 Total Unlisted Options - $0.026; 31 Dec 2016 Unlisted Options - Escrowed 12 months to 19 December 2015 Unlisted Options - Escrowed 12 months to 2 June 2016 Unlisted Options - Escrowed 12 months to 26 June 2016 Unlisted Options - Escrowed 24 months to 14 July 2017 Total Performance Shares Performance Shares - Escrowed 12 months to 2 July 2016 Performance Shares - Escrowed 24 months to 14 July 2017 Total No. Shares 8,750,000 55,312,500 57,187,499 121,249,999 18,750,000 8,812,500 937,500 5,250,000 33,750,000 55,312,500 38,437,500 93,750,000 42

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