Annual
Report
2020
Contents
Chair’s Letter
Directors’ Report
Remuneration Report
Lead Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance Statement
Shareholder Information
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A letter from the Chair
Dear Shareholder,
On behalf of the Board of Directors, I am delighted to
present TALi Digital’s Annual Report for the year 2020. It
has been a year of significant progress for our business
as we work towards global commercialisation of our
technology platform.
Attention is one of the first cognitive skills to develop
in early childhood and plays an important role in the
formative years of learning, supporting our children
to be more focused, calmer and adaptive to key skill
development during their growing years.
Our scientifically and clinically validated technology
targets these critical early years, where we can make
the largest impact. Throughout FY20 our team remained
focused on ensuring we achieved the necessary
milestones for our products to have a global reach in
large markets, where we can deliver a lasting social
impact and ultimately create happier kids.
Foundations laid for global growth
Inattention is a problem which affects millions of
children globally and our team worked hard to deliver
groundwork for international growth.
The achievement of Google for Education Partner status
was an important achievement, allowing TALi DETECT
and TALi TRAIN to be accessed on the Google Education
platform which is utilised by tens of millions of students
and teachers daily. This is a significant milestone which
provides the capability for our products to scale rapidly.
Additionally, we successfully signed a collaboration
agreement with the largest academic clinical research
organisation in the world, the Duke Clinical Research
Institute (part of the Duke University School of Medicine
(USA) to generate international clinical evidence
for DETECT, which will help to further establish our
international credentials. For a digital health company,
developing a proven set of data will be crucial for
penetrating large global markets.
During the year our team worked tirelessly to generate
the performance data needed to establish DETECT’s
accuracy as an attention assessment tool and we
were pleased to surpass our participation goal, which
highlights the importance teachers and parents place on
attention assessment in early years. The DETECT Schools
Early Release Programme has helped to provide critical
insights into the use and benefits of our technology platform,
as we prepare to substantially scale up our sales efforts.
New appointments to drive growth
In June we welcomed Dr David Brookes to the Board as
a Non-Executive Director, who has extensive experience
in the health and biotechnology industries. David
replaced Mark Simari who guided our business through
an important period of development and I would like
to thank Mark for the important role he played in the
structure and capitalisation of TALi.
TALi was also strengthened financially via capital raising
activities which in total raised $8.2 million, providing the
balance sheet strength for us to execute on our global
marketing and sales strategy.
As we move into FY21, we are at an exciting point in our
journey where we are ready for global expansion and
a scaling of our business in major markets. I would like
to thank our team for their dedicated efforts during FY21
particularly given the challenges we faced with the
COVID-19 pandemic. I would also like to thank my fellow
Directors who guidance and insights have been invaluable.
On behalf of the Board, I would like to thank all of our
shareholders for your continued support and I look
forward to updating you on our continued progress over
the course of the year.
Yours sincerely,
Sue MacLeman
Chair
TALi Digital Limited Annual Report 2020 | 3
Chief Executive Officer’s report
Dear Shareholder,
2020 has been a significant year for TALi Digital as we
considerably progressed the rollout of TALi DETECT and
TRAIN with successful school trials and the development
of significant global partnerships. Our platform combines
evidence-based proprietary algorithms inside a game-
based program to assess and strengthen core attention
skills and we are well positioned to increase the pace
of our commercial rollout in FY21 as we transition to a
period of significant growth.
We are pleased to present the following report outlining
our key achievements throughout the year.
Operational review
The company significantly advanced the development
and rollout of the TALi products during FY20. The
Company notes that COVID-19 pandemic has seen
an impact on timing of revenue due to the change in
socio-economic conditions within Australia in particular
the continued lockdowns in Victoria. The Directors
further note that the COVID-19 situation continues to
evolve both in Australia and on an international basis.
Changes to government policy and regulations governing
individuals and business continue to be enacted due
to the pandemic with future material impacts on all
organisations as yet unknown.
Google for Education Partner certification
In January 2020, the Company announced that it has
successfully achieved Google For Education Partner
status on a global basis. The Partner Status will allow
TALi DETECT and TALi TRAIN to be accessed via
Google products including G Suite for Education and
Google Chromebooks. These products dominate the
U.S. education system with over 55% of all U.S. school
children using a Google product every day to facilitate
their learning experience.
The partnership represents a key affiliation for the
Company with over 90 million students, teachers and
administrators using G-Suite for Education, while more
than 30 million students use Google Chromebooks. This
combined with marketing support including partnership
branding support and participation in co-marketing
activities will solidify TALi’s position as a first to market
leader in the attention assessment and training segment.
Through large scale testing in education environments
this channel can potentially unlock the true value of
TALi in determining early intervention and treatment of
millions of children that would otherwise not be flagged
without a program like TALi.
4 | TALi Digital Limited Annual Report 2020
IP portfolio protection
The TALi IP portfolio was strengthened with the addition
of a China Trademark, announced to the market on 1st
April 2020. The IP portfolio protection for TALi TRAIN and
TALi DETECT products allows for partnership discussion
with Chinese institutions and organisations, opening up a
large potential revenue pool for the company.
The protection of the Company’s IP portfolio was further
enhanced via a U.S. Patent (see announcement dated
21st April 2020). The growing level of patent protection
over TALi’s product portfolio strengthens the Company’s
competitive advantage and will allow an acceleration of
our strategic opportunities.
And in June 2020 the Company announced the full
assignment of all TALi TRAIN and TALi DETECT IP from Monash
University to the Company providing it a unique basis in
comparison to global peers in the digital health sector.
TALi DETECT positive test results
During the year, TALi DETECT conducted tests through
a range of Victorian primary schools, kindergartens and
childcare centres.
The results confirmed that six game-based (cognitive)
subtests of DETECT provide a foundational assessment
of the key attentional domains. Using the data collected
through the study as a normative sample, DETECT can
provide an index for a child’s attention-related cognitive
capabilities relative to the reference group, allowing
identification of children with performance outside the
typical range.
The study results position DETECT as a leading tool to
facilitate an objective baseline measurement of attention
skills in early childhood.
TALi DETECT Schools Early Release Programme
The company announced the successful completion
of its Schools Early Release Programme (“the Schools
Early Release”) in partnership with 30 schools located in
remote and metropolitan areas of Australia. The Schools
Early Release was aiming to recruit 1000 students (aged
four to eight years) from a balanced cohort of education
providers to utilise the Company’s DETECT attention
assessment program by 30th June 2020 – a goal which
was surpassed by over 61%, due to widespread interest in
TALi DETECT.
The Company’s continued success in creating a world
leading attention detection solution is reliant on the
strong and talented team we have in place. I would
like to thank the TALi team for all their hard work over
FY20. The commitment and determination in these
unprecedented times gives us great confidence that we
can continue to grow our business in FY21 and beyond.
I would also like to thank our shareholders for your
continued commitment, and we look forward to updating
you further at our upcoming Annual General Meeting.
Yours sincerely,
Glenn Smith
Managing Director
The results of this Early Release are a major step forward
for the Company. While a number of the Early Release
schools received discounts as part of the program, our
successful deployments have enabled us to stress test our
customer experience, create more case studies and proof
points, as well as gain a network of influential teachers
and principals who are open to recommending TALi to
the schools in their networks.
Financial position
Despite the current economic and social conditions
resulting from the COVID-19 pandemic, TALi remains in
a robust financial position to execute against its plan
for commercial growth. Total revenues and income of
$621,944 was generated and the Net loss for the period
was $3,397,938.
The Company ended the FY20 with net cash at bank
of $3.9 million (up from $0.3 million at 30 June 2019).
Our balance sheet will provide significant scope for
the company to ramp up our product rollout through
FY21 and drive the company towards significant topline
revenue growth.
Entering FY21 with significant momentum
The securing of key partnerships, our growing IP
protection, positive TALi DETECT test results and the
completion of the Schools Early Release Programme has
laid the foundation for the commercial roll out of TALi’s
products in FY21. Key areas of focus for the Company
include;
• Continued data collection activities in the Australian
market to assist with medium to long- term large-
scale use and reimbursement of TALi products
• Continued development of international
partnerships to secure long term growth
• Continued investment in R&D, Marketing and Sales
to broaden the neurological conditions and cohorts
the Company may serve so as to deliver sustainable
value back to our shareholders
TALi Digital Limited Annual Report 2020 | 5
“
As a psychologist, it’s important
that all interventions that we endorse are
evidence-based. TALi is scientifically proven
to be effective, and this gives me great
confidence and trust in recommending TALi.
Parents are reporting overall improvements
in their child’s attention behaviours.
Maria Karefilakis
Clinic Director, Kare Psychology
6 | TALi Digital Limited Annual Report 2020
6 | TALi Digital Limited Annual Report 2020
TALi Digital Limited Annual Report 2020 | 7
TALi Digital Limited Annual Report 2020 | 7
Directors’ Report
FOR THE YEAR ENDED 30 JUNE 2020
The directors present their report together with the financial statements of the consolidated entity (referred to
hereafter as the Group) comprising of TALi Digital Limited (the Company), and its subsidiaries for the financial year
ended 30 June 2020 and the auditor’s report thereon.
Contents of Directors’ Report
Principal activities
Operating and financial review
Likely developments, outlook and risks
TALi Health Pty Ltd
Capital and corporate structure
Unissued shares
Directors’ qualifications, experience and responsibilities
Company secretary
Directors’ interests
Directors’ meetings and Committee membership
Dividends
Significant changes in the state of affairs
Environmental regulation
Events subsequent to reporting date
Indemnification and insurance of officers
Risk management
Rounding off
Lead Auditor’s Independence Declaration
Non-audit Services
Remuneration Report
Company performance
Principles of compensation and strategy
Fixed compensation
Performance linked compensation
Service contracts
Long Term Incentive
Director compensation
Arrangements with key management personnel
Directors’ and Executive Officers’ compensation tables
Grants, modifications and exercise of options and rights
over equity instruments granted as compensation
Shares issued on excess of options and performance rights
Alteration to option terms
Equity holdings and transactions
Number of shares held in TALi Digital Limited
Number of options held in TALi Digital Limited
Consequences of performance on shareholder wealth
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8 | TALi Digital Limited Annual Report 2020
Principal activities
Likely developments, outlook and risks
The principal activity of the Group during the course of
the financial year was the controlled launch of TALi TRAIN
and the on-going development of TALi DETECT as part of
TALi Digital’s CRC-P grant project. TALi TRAIN, is a mobile
software application used by clinicians, educators and
parents to target the strengthening of core attention in
children between the development ages of 3-8.
TALi Digital is a public company listed on the ASX,
incorporated and domiciled in Australia, and with a
registered office and principal place of business located
at Level 5, 19 William Street, Cremorne Vic 3121. Except as
disclosed elsewhere in this Report, there have been no
significant changes in the nature of these activities during
the year.
Operating and financial review
During the year, TALi’s operations have focused on the
phased launch of the TALi platform in order to test and
optimise market fit for the technology. The Group has also
directed significant effort into building the evidence base
around the TALi TRAIN program and on the continued
development of TALi DETECT.
The statement of profit or loss and other comprehensive
income shows a loss of $3,397,938 (2019: $2,944,443)
for the year. The Group has no bank debt. As at 30 June
2020 the Group had a cash position of $3,945,408 (2019:
$341,434). Operating, financing and investing activities
incurred a net cash inflow for the year of $3,603,974 (2019:
outflow $860,464).
Judgement has been exercised in considering the impacts
that the Coronavirus (COVID-19) pandemic has had, or
may have, on the Group based on known information.
Other than as addressed in ASX announcements, there
does not currently appear to be either any significant
impact upon the financial statements or any significant
uncertainties with respect to events or conditions which
may impact the Group unfavourably as at the reporting
date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
The Group has received $50,000 of the recorded $100,000
COVID-19 related government PAYGW cash booster grant.
The Group has also received $87,000 of the recorded
$129,000 JobKeeper payments.
The Group’s focus for the coming year will be to integrate
TALi TRAIN and TALi DETECT into a commercially suitable
integrated program in order to become a global leader
in the assessment and treatment of children in the area of
inattention. The Group has also completed the divestment
of Newly in order to support the mission of the Group to
deliver market leading, patient outcome focused digital
interventions.
TALi’s lead product, TALi TRAIN is a program is
scientifically and clinically proven to improve attention as a
cognitive skill by targeting the core underlying issue which
sets it apart from all other brain training or memory-based
software applications and provides a much-needed
adjunct to pharmacological treatments.
The claims of the program are underpinned by strong
clinical trial data. These clinical trials demonstrated that
the product was successful in promoting improvements in
both attention (in particular the ability to focus on relevant
information while ignoring distractions) and academic
skills (specifically numeracy abilities) in young children
with developmental delay, including those with autism
spectrum disorder (ASD).
The ability of the Group to meet operating cash
requirements for the next 12 months has been secured
by an Entitlement Offer to shareholders raising a total of
$2.0 million (as announced to the ASX on 19 September
2019) and a subsequent offer raising a total of $6.2 million
(as announced to the ASX on 25 November 2019) which
was added to the existing cash on hand of $0.3 million at
the beginning of the period. Beyond the next 12 months,
the Group expects cash flows being generated from the
successful execution of the TALi commercialisation strategy
and development opportunities will support the cash
position of the Group. The TALi commercialisation strategy
is dependent on a number of factors including, among
others, assumptions relating to development and marketing
expenditure, market demand, sales volume and pricing,
working capital requirements and regulatory compliance.
TALi Digital Limited Annual Report 2020 | 9
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2020
TALi Health Pty Ltd
TALi Health, (100% owned subsidiary of TALi Digital
Limited) is a digital health company pioneering
development of software solutions to address
neurological conditions in early childhood. Backed by
over 25 years of research, the TALi platform is a scientific
and clinically validated program that addresses the
world’s leading early childhood issue—inattention,
a key feature in conditions including Attention Deficit
Hyperactivity Disorder (ADHD) and Autism Spectrum
Disorder (ASD). Our team of neuroscientists, developers
and designers are on a mission to strengthen the attention
of children globally to deliver a lasting social impact.
At TALi, happier kids start here. Approximately 126 million
children globally have severe attention difficulties.
The key to better outcomes for children with attention
difficulties is early identification and intervention.
Currently, there is a significant lack of tools available to
parents, teachers and healthcare professional to provide
effective assessment and treatment. Consequently,
many children who have attention difficulties remain
undetected and miss out on life-changing interventions.
TALi DETECT and TALi TRAIN as early assessment and
training programs are early intervention programs
designed to change that.
TALi focuses on assessing potential attention issues and
then if required strengthening underlying attentional
processes at the cognitive level. Thus, TALi has the potential
to promote deeper and more stable improvements in attention,
as well as behavioural symptoms of attention (e.g. inattentive
and hyperactive behaviour), without the negative side effects
associated with psychostimulant medication.
In addition, TALi provides logistical advantages over
traditional face to face intervention methods as it uses the
latest technology to deliver health care into the home providing
significant cost savings and better outcomes for children.
Capital and corporate structure
On 7 August 2019 the Company announced an
Entitlement Offer to shareholders to raise a total of $2
million. On 28 August 2019, the Company announced the
take-up of the Rights issue entitlements pursuant to the
Entitlement Offer and issued 48,579,677 new shares at an
issue price of $0.01 per ordinary share.
On 5 September 2019, the Company announced the
placement of the shortfall to the Entitlement Offer
received $0.5 million and issued 46,000,000 shares at
$0.01 per share.
On 13 September 2019 the Company announced the
placement of a further $0.9 million and issued 91,000,000
shares at $0.01 per share in respect to the shortfall of the
Entitlement Offer.
On 19 September 2019 the Company announced the
placement of a further $0.1 million and issued 14,420,377
shares at $0.01 per share in respect to the shortfall of the
Entitlement Offer.
On 25 November 2019 the Company announced the
placement of $6.2 million. On 29 November 2019 the
Company issued 99,999,999 shares at $0.062 per share.
Full details of movements in share capital for the year are
detailed in Note 18 to the financial statements.
Unissued shares
Details of unissued Ordinary Shares, interests under options as at the date of this report are as follows:
Number of options on issue at the date of this report
Exercise price when granted
Expiry date
Director options:
Vendor & broker
options:
Employee options:
13,600,000
3,785,507
7,188,883
6,800,000
2,400,000
1,700,000
35,474,390
10 | TALi Digital Limited Annual Report 2020
$0.030
21 November 2022
$0.030
$0.090
$0.030
$0.015
$0.062
30 June 2021
30 June 2022
21 November 2022
31 October 2024
1 May 2025
Directors’ qualifications, experience and responsibilities
The directors of the Company at any time during the year or since the end of the financial year are as follows.
Directors were in office for the entire period unless stated otherwise:
Name, qualification and
independence status
Experience, special responsibilities and
other directorships
Ms Sue MacLeman
Independent Non-Executive
Director & Chair
Qualifications: BPharm.
MMktg, MLaw, FTSE
Ms S MacLeman joined the Board on 6 September 2018. She is Director and Chair
since 6 September 2018 and is a member of the Audit Committee.
Ms S MacLeman has over 30 years’ experience in the medtech, pharma
and biotech sector and is currently Chair, Anatara Lifesciences Ltd, Chair
MTPConnect Ltd, Non – Executive Director Oventus Medical Ltd and
Non-Executive Director Palla Pharma Ltd and Veski Innovation.
Mr Jefferson Harcourt
Non-Executive Director
Qualifications: B.Eng (Hons)
GAICD
Mr J Harcourt joined the Board on 25 February 2016. He is a Non-Executive
Director of the Company and is a member of the TALi Digital Audit Committee.
Mr Harcourt oversaw the initial development of TALi and his extensive
product development and commercial expertise will assist the Company in
commercialising the technology.
Mr J Harcourt sits on a number of private technology company boards in the
medical device and security markets.
Mr Glenn Smith
Managing Director
Qualifications: MBA, BA (Econ)
Mr G Smith was appointed Chief Executive Officer on 3 October, 2017 and
appointed Managing Director on 10 May, 2018. He has over twenty years’
experience in leading customer-centric businesses in periods of rapid growth.
Dr David Brookes
Independent Non-Executive
Director
Qualifications: MBBS,
FACRRM, FAICD
Dr D Brookes was appointed on 29 June 2020. Simultaneously Dr Brookes was
appointed the chair of the audit committee. Dr Brookes has extensive experience
in the health and biotechnology industries, first becoming involved in the
biotechnology sector in the late 1990’s as an analyst.
Dr Brookes has since held Board positions in a number of ASX listed biotechnology
companies, including Chairman of genomics solutions company, RHS Ltd,
which was acquired by PerkinElmer Inc (NYSE:PKI $9B biotech company) in June
2018. He has also Chaired and been a member of a number of risk and audit
committees in ASX listed companies. He is currently a Non-Executive Director
of Anatara Therapeutics (ASX: ANR) as well as Non-Executive Chairman of the
Better Medical group(unlisted).
Dr. Brookes maintains roles as a clinician and as a biotechnology industry consultant.
Dr Brookes, MBBS (Adelaide), is a Fellow of the Australian College of Rural and
Remote Medicine and a Fellow of the Australian Institute of Company Directors.
Mr Mark Simari
Independent Former
Non-Executive Director
Qualifications: B. Acc, Dip F
Mr M Simari joined the Board on 1 September 2016. He is the former Managing
Director of Paragon Care Limited. He has significant experience on boards in
privately held and ASX-Listed companies.
Mr Simari resigned on 29 June 2020. Simultaneously Mr Simari also resigned as
chair of audit committee.
TALi Digital Limited Annual Report 2020 | 11
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Company secretary
Dr Stephen Denaro BCom, CA, MAICD, Grad Dip Corp Gov, AGIA
Mr Denaro was appointed as Company Secretary of TALi Digital Limited on 21 February 2019. He has over 30 years
of senior financial, administrative, commercial and company secretarial experience with ASX listed companies.
Directors’ interests
The relevant interest of each director in the share capital of the Company, as notified by the Company to the ASX in
accordance with S205G (1) of the Corporations Act 2001, as at the date of this report is as follows:
Director
Ms S MacLeman
Dr D Brookes
Mr J Harcourt
Mr G Smith
Number of
ordinary shares
Number of options
to acquire ordinary shares
505,920
3,000,000
38,688,423
1,454,546
6,800,000
-
3,400,000
-
Directors’ meetings and committee membership
Due to the small number of non-executive directors on the Board, all the incumbent non-executive directors are
members of the Audit Committee. The Audit Committee considers quality and reliability of financial information
prepared for use by the Board in determining policies or for inclusion in the financial report. The Company’s
Remuneration and Nomination Committee was disbanded on 1 July 2016 and the responsibility for the composition
of the Board and nomination of new directors and reviewing and monitoring the performance of for directors,
executive and staff remuneration is now assumed by the full Board.
The number of directors’ meetings (including meetings of committees of directors) and number of meetings
attended by each of the directors of the Company during the financial year are:
Director
Ms S MacLeman
Mr M Simari (2)
Mr J Harcourt
Mr G Smith
Mr D Brookes (3)
Board meetings
Audit committee meetings
Attended
Held(1)
Attended
Held(1)
12
11
9
12
-
12
12
12
12
-
2
2
2
-
-
2
2
2
-
-
(1) Represents the number of meetings held during the time that the director held office.
(2) Mr M Simari resigned on 29 June 2020.
(3) Mr D Brookes was appointed as a Director on 29 June 2020.
12 | TALi Digital Limited Annual Report 2020
Dividends
Insurance Premiums
The directors do not recommend a dividend be paid or
declared by the Company for the year. No dividend has
been paid by the Company since its incorporation on 7
April 2004.
Significant changes in the state of affairs
As at 30 June 2020, the Board have determined the fair
value of the investment in Healthcarelink Group Pty Ltd
as nil, as a result the asset has been written off.
At the AGM held on 26 November 2019 shareholders
approved the change of Company name from Novita
Healthcare Limited to TALi Digital Limited.
Other than as detailed elsewhere in this financial report,
there has been no significant change in the state of
affairs of the Group.
Environmental regulation
The Group’s operations are not subject to any significant
environmental regulations under either Commonwealth
or State legislation. The directors believe that the Group
has adequate systems in place for the management of
its environmental requirements and are not aware of
any breach of those environmental requirements as they
apply to the Group.
Events subsequent to reporting date
In the interval between the end of the financial year
and the date of this report no other item, transaction or
event of a material and unusual nature has arisen other
than outlined in this section that is likely, in the opinion of
the directors of the Company, to affect significantly the
operations of the Group, the results of those operations,
or the state of affairs of the Group in future financial years.
On 23 September 2020, 14,377,766 options previously
issued to CEO and Managing Director were cancelled.
Indemnification and insurance of officers
Indemnification
The Company has agreed to indemnify the directors
of the Company against liability arising as a result of
a director acting as a director or other officer of the
Company. The indemnity includes a right to require the
Company to maintain Directors’ and Officers’ Liability
insurance that extends to former directors. The indemnity
provided by the Company is an unlimited and continuing
indemnity irrespective of whether a director ceases to
hold any position in the Company.
Since the end of the financial year, the Company has
paid a premium for Directors’ and Officers’ Liability
insurance for current and former directors and officers,
including executive officers of the Company. The directors
have not contributed to the payment of the policy premium.
The Directors’ and Officers’ Liability insurance policy
covers the directors and officers of the Company
against loss arising from any claims made against them
during the period of insurance (including company
reimbursement) by reason of any wrongful act committed
or alleged to have been committed by them in their
capacity as directors or officers of the Company and
reported to the insurers during the policy period or if
exercised, the extended reporting period.
Risk management
The Group takes a proactive approach to risk
management. The Board is responsible for ensuring that
risks, and also opportunities, are identified on a timely
basis and that the Group’s objectives and activities are
aligned with the risks and opportunities identified by the
Board. The Group believes that it is crucial for all Board
members to be a part of this process, and as such the
Board has not established a separate risk management
committee. Instead sub-committees are convened as
appropriate in response to issues and risks identified
by the Board as a whole, and each respective sub-
committee further examines the issue and reports back to
the Board.
The Board has a number of mechanisms in place to
ensure that management’s objectives and activities are
aligned with the risks identified by the Board. These
include the following:
• Implementation of Board approved strategic and
operating plans and budgets and Board monitoring
of progress against these plans, budgets, including
the establishment and monitoring of KPIs of both a
financial and non-financial nature.
• The establishment of committees to report on
specific business risks.
The Audit Committee assists in discharging the Board’s
responsibility to manage the organisation’s risks, and
monitors Management’s actions to ensure they are in line
with Group policy.
TALi Digital Limited Annual Report 2020 | 13
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Rounding off
The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Report) Instrument
2016/191 issued by the Australian Securities and
Investments Commission (ASIC), relating to the rounding
off of amounts in the consolidated financial statements.
Amounts in the consolidated financial statements have
been rounded off in accordance with that legislative
instrument to the nearest dollar, unless specifically stated
to be otherwise.
Lead Auditor’s Independence Declaration under Section
307C of the Corporations Act 2001
The lead auditor’s independence declaration forms part
of the Directors’ Report for the year ended 30 June 2020
and is set out on page 27.
Non-audit services
During the year the Grant Thornton (GT) replaced RSM
Australia Partners (RSM), as the Group’s auditor.
Details of amounts paid or payable to the auditor for
non-audit services provided during the year by the
auditor are outlined in note 6 to the financial statements.
In the event non-audit services are provided by the
auditor, the Board has established procedures to ensure
that the provision of non-audit services is compatible
with the general standard of independence for auditors.
These include:
• All non-audit services are reviewed and approved
to ensure that they do not impact the integrity and
objectivity of the auditor; and
• Non-audit services do not undermine the general
principles relating to auditor independence as
set out in APES 110 ‘Code of Ethics for Professional
Accountants’ issued by the Accounting Professional
& Ethical Standards Board, including reviewing
or auditing the auditor’s own work, acting in a
management or decision-making capacity for the
Group, acting as advocate for the Group or jointly
sharing economic risks and rewards.
14 | TALi Digital Limited Annual Report 2020
“
I’ve seen a really big change
in my student. He couldn’t focus at
all before. My student that has been
undertaking the TALi training is not the
same boy that started the program. It’s
been really fabulous to see the results
that we’ve been able to get.
Michelle McLaren
Teacher, Prep
TALi Digital Limited Annual Report 2020 | 15
TALi Digital Limited Annual Report 2020 | 15
Remuneration Report — AUDITED
FOR THE YEAR ENDED 30 JUNE 2020
This report outlines the compensation arrangements in place for Non-Executive Directors
(NEDs) and senior executives of the Group being the Key Management Personnel (KMP) of
the Group – being those persons having authority and responsibility for planning, directing
and controlling the major activities of the Group, directly or indirectly, including any
director and includes all the executives in the Group.
For the purposes of this report, the term “executive”
includes the senior executives but does not include
the NEDs or the secretary of the Company. All sections
contained herein have been subject to audit as required
by section 308(3C) of the Corporations Act. Remuneration
is referred to as compensation in this report.
Details of KMP including remunerated executives of
the Group are set out in the tables on pages 20 and 21.
Unless otherwise indicated, the individuals were KMP for
the entire financial year. There have been no changes to
KMP after the reporting date and before the date of this report.
Principles of compensation and strategy
The full Board assesses the appropriateness of the
nature and amount of remuneration of NEDs and senior
executives on a periodic basis by reference to relevant
employment market conditions, with the overall objective
of ensuring maximum stakeholder benefit from the
retention of a high performing director and executive
team and aligning the interests of the executives with
those of the shareholders.
TALi Digital Limited’s remuneration strategy is designed
to attract, motivate and retain employees and NEDs
by identifying and rewarding high performers and
recognising the contribution of each employee to the
continued growth and success of the Group. To this end,
key objectives of the Group’s reward framework are to
ensure that remuneration practices are aligned to the
Group’s business strategy, offer competitive remuneration
benchmarked against the external market, provide strong
linkage between individual and Group performance
and rewards and align the interests of executives with
shareholders.
Where relevant, the remuneration framework
incorporates at risk components through Short-
term Incentives (STI) and Long-term Incentives (LTI)
arrangements tailored to the particular executive by
reference to both financial and other metrics which
generate value for shareholders. The Board also sets
the aggregate fee pool for NEDs (which is subject
to shareholder approval) and NED fee levels. In
accordance with best practice corporate governance,
the structure of NED and executive remuneration is
separate and distinct.
16 | TALi Digital Limited Annual Report 2020
The Board assumes full responsibility for compensation
policies and packages applicable to directors and senior
executives of the Group. The broad compensation policy
is to ensure the compensation package appropriately
reflects the person’s duties and responsibilities, and
that compensation levels are competitive in attracting,
retaining and motivating people who possess the
requisite level of skill and experience. Employees may
receive at-risk incentive payments remunerated as cash
and/or securities (performance rights or options) based
on the achievement of specific goals related to the
performance of the individual and the Group as a whole
as determined by the directors. Incentives are provided to
senior executives and employees for the achievement of
individual and strategic objectives with the broader view
of creating value for shareholders.
Fixed compensation
Fixed compensation consists of a base salary package,
which includes Fringe Benefits Tax calculated on
any salary packaging arrangements and employer
superannuation contributions. Fixed compensation levels
for KMPs and senior members of staff are reviewed by
the Board and comprising the Group’s KMP, through
a process that considers the employee’s personal
development, achievement of key performance objectives
for the year, industry benchmarks wherever possible
and CPI data. The Board’s policy is to ensure that fixed
remuneration is market competitive having regard to
industry peers and companies of similar financial size.
Given the Group’s size it is not considered necessary
to engage remuneration consultants for this purpose
and accordingly the Group undertakes its own informal
review, which it does on an ongoing basis
Key Performance Indicators (KPIs) are individually tailored
by the Board in advance for each employee each year,
and reflect an assessment of how that employee can
fulfil his or her particular responsibilities in a way that
best contributes to Group performance and shareholder
wealth in that year with close alignment to the role and
responsibility within the organisation and in conjunction
with the strategic objectives of the Group.
Performance linked compensation
All employees are potentially eligible to receive at-risk
incentive payments and/or securities (shares or options)
based on the achievement of specific goals related to
(i) performance against individual key performance
indicators and/or (ii) the performance of the Group as
a whole as determined by the Board based on a range
of factors. These factors include traditional financial
considerations such as operating performance, cash
consumption and deals concluded and also industry-
specific factors. The purpose of these payments is to
reward employees for their contribution to the Group.
Employment contracts for staff other than the KMPs do
not generally provide for at-risk or short-term incentive
compensation arrangements having regard to the above
factors although the Board always retains the right to
agree or otherwise provide payments on a discretionary
basis in special circumstances or where individual
performance merits a payment being made.
The Board is responsible for the determination of
incentive compensation for employees and executives
and for any decisions to award performance incentives.
The Board at its sole discretion determines the total
amount of performance-linked compensation payable
as a percentage of the total annualised salaries for all
employees employed as at the end of the financial year
(with pro rata reductions to the annualised salary made
for any employee not employed for the entire financial year).
The Directors have the discretion to recommend the offer
of performance rights to acquire ordinary shares, options
or the direct issue of shares to any member of staff in
recognition of exemplary performance.
Such securities may be fully vested upon issue given that
they are issued as a reward for past performance rather
than as an LTI. Any issue of such securities proposed
as incentive compensation requires approval by the
Board and is subject to any limitations imposed by the
Corporations Act and the ASX Listing Rules. As at the date
of this report, no such securities have been issued.
At, or as soon as practicable after, the beginning of the
financial year, individual and team performance for the
previous year is assessed for every employee by their
manager and new objectives set for the forthcoming year.
These objectives include department and project specific
objectives together with individual stretch objectives,
challenging, realistic and personal development
objectives tailored to the employee’s role within the
organisation. Measurement, management support,
target dates and training course requirements are all
set. Progress against the objectives is reviewed during
the year and percentage achievement concluded at the
end of the year, whereupon the cycle recommences. The
outputs of this process form the basis of the assessment of
the individual’s personal incentive compensation.
The Board has discretion to reduce, cancel or clawback
any unvested performance-based remuneration in the
event of serious misconduct or a material misstatement
in the Group’s financial statements. All Performance
Rights are also subject to an overriding condition that
the financial performance of the Group, in the absolute
discretion of the Board, has been satisfactory.
TALi Digital Limited Annual Report 2020 | 17
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Service contracts
Remuneration arrangements for executives are formalised in employment agreements. The following outlines the details
of contracts with executives.
Notice period
Payment in lieu of
notice
Treatment of Short-
Term incentives
Treatment of Long-
Term Incentives
Termination by
Company (death,
disablement,
redundancy etc)
3 months (6 months
for CEO)
3 months (6 months
for CEO)
Any STI payments are
at Board discretion
At the discretion of the
Board.
Termination for
cause
None
None
Any STI payments are
at Board discretion
Unvested awards
forfeited.
Vested and
unexercised awards
forfeited.
Resignation by
employee
6 weeks (3 months for
CEO)
None
Any STI payments are
at Board discretion
Unvested awards
forfeited.
Performance linked compensation
The Company Secretary is engaged by the Company under a consultancy agreement. The agreement provides a fixed
monthly fee for “in scope” services with additional work charged at hourly rates. The consultancy agreement is a rolling
contract and can be terminated by either party by giving two months’ notice in writing to the other party.
Long Term Incentive (LTI)
From time to time Board approval may be sought for the issue of securities (performance rights or options) to staff
and executives as a means of providing a medium to long term incentive for performance and loyalty. Any such
performance rights are issued under the TALi Digital Performance Rights Plan.
An amount of $8,705 (2019: $170,021) has been recognised in the 2020 financial year by way of shared based
payment expense. In order to give the incentive medium to long term impact, the performance rights have an
approximate three-year life and a vesting profile as shown following.
18 | TALi Digital Limited Annual Report 2020
Director compensation
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall be
determined from time to time by a general meeting. An amount not exceeding the amount approved by shareholders is
then divided between the directors as agreed by the Board. An amount of $350,000 was approved at the Company’s
inaugural Annual General Meeting held on 4 October 2005. The Board does not intend to seek any increase for the
NED maximum aggregate fee pool at the 2020 AGM.
The board seeks to set NED fees at a level which provides the Group with the ability to attract and retain NEDs of the
highest calibre, whilst incurring a cost which is acceptable to shareholders.
The maximum aggregate fee pool and the fee structure is reviewed annually against fees paid to NEDs of comparable
companies in similar industries.
Non-executive directors do not receive performance related compensation and the structure of non-executive director
and senior management compensation is separate and distinct. Non-executive directors do not have contracts of
employment but are required to evidence their understanding and compliance with the Board policies of TALi Digital
Limited. These Board policies do not prescribe how compensation levels for non-executive directors are modified from year
to year. Compensation levels are to be reviewed by the Board each year taking into account cost of living, changes to
the scope of the roles of the directors, and any changes required to meet the principles of the overall Board policies.
Arrangements with key management personnel:
Position
Annual salary (inclusive of superannuation)
Non-Executive Chair
Non-Executive Directors
$60,000
$35,000
NEDs may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs. NEDs do not receive
retirement benefits, nor do they participate in any incentive programs.
TALi Digital Limited Annual Report 2020 | 19
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Directors’ and Executive Officers’ compensation tables
Details of the nature and amount of each major element of the compensation of each director of the Group and each
of the 2 named officers of the Group receiving the highest compensation for the period that the director or officer held
that position during the current and prior financial years are disclosed in accordance with Accounting Standard AASB
124 Related Party Disclosures and with the Corporations Act 2001 in the following tables.
Details of the Group’s policy in relation to the proportion of compensation that is performance related are provided
earlier in this report. For the individuals named in the Directors’ and Executive Officers’ compensation tables, details of
their service contracts are provided under the heading of “Service contracts” earlier in this report. Figures in brackets
represent the value of bonuses/incentives and options respectively as a percentage of total compensation.
2020:
Short term:
Base
compensation
(salary and fees)
$
Consulting
fees
$
Non-cash
benefit
$
Bonuses /
incentives
$
Post
Employment:
Superannuation
contributions
$
Share-based
payments:
Shares and
performance
right’s issued
$
Total
compensation
$
Directors
Non-executive
Ms S MacLeman
Mr M Simari (2)
Mr J Harcourt
Dr D Brookes (1)
54,775
34,708
35,000
-
Total compensation
124,483
Executive Directors
Mr G Smith (3)
250,000
Total compensation
250,000
(1) Appointed on 29 June 2020
(2) Resigned 29 June 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
62,500
62,500
5,204
-
-
-
5,204
25,729
25,729
-
-
-
-
-
-
-
59,979
34,708
35,000
-
129,687
338,229
338,229
(3) Due to changes in the structure of the company from 1 July 2019, Glenn Smith was deemed to be the only employee categorised as
key management personnel.
20 | TALi Digital Limited Annual Report 2020
2019:
Short term:
Base
compensation
(salary and fees)
$
Consulting
fees
$
Non-cash
benefit
$
Bonuses /
incentives
$
Post
Employment:
Superannuation
contributions
$
Share-based
payments:
Shares and
performance
right’s issued
$
Total
compensation
$
Directors
Non-executive
Ms S MacLeman (1)
Mr M Simari (2)
Mr J Harcourt (3)
44,663
36,597
35,000
Total compensation
116,260
Executive Directors
Mr G Smith (4)
250,000
Total compensation
250,000
Key Management Personnel
Dr Hannah Kirk (5)
Ms M Klapakis (6)
Mr M Rose (7)
10,233
165,011
100,603
Total compensation
275,847
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
154,968
154,968
21,000
-
-
4,243
100,640
149,546
-
-
-
-
36,597
35,000
4,243
100,640
221,143
23,750
23,750
2,711
15,676
6,268
69,381
498,099
69,381
498,099
-
-
-
-
33,943
180,687
106,872
321,502
21,000
24,655
(1) Appointed on 6 September 2018.
(5) Resigned 31 October 2018.
(2) Appointed on 1 September 2016.
(6) Appointed on 1 December 2010.
(3) Appointed on 25 February 2016.
(7) Appointed on 15 November 2018
(4) Appointed 2 October 2017.
TALi Digital Limited Annual Report 2020 | 21
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Grants, modifications and exercise of options and rights over equity instruments granted as compensation
Number of options
Grant date
Expiry date
Exercise price
Grantee
6,800,000
3,400,000
3,400,000
14,377,766
8/10/2018
8/10/2018
8/10/2018
26/11/2019
21/11/2022
21/11/2022
21/11/2022
3/10/2022
$0.030
$0.030
$0.030
$0.030
Ms S MacLeman
Mr J Harcourt
Mr M Simari
Mr G Smith
During the year 14,377,766 (2019: nil) options to acquire ordinary shares were issued to the CEO & Managing Director
approved by Shareholders at the Annual General Meeting (AGM) held on 26 November 2019.
On 23 September 2020, 14,377,766 options previously issued to CEO and Managing Director were cancelled.
Shares issued on exercise of options and performance rights
During the financial year the Company issued nil (2019: nil) ordinary shares upon the exercise of options or performance
rights for total proceeds of nil (2019: nil). Since the end of the financial year up to the date of this report the Company
has issued nil (2019: nil) shares upon exercise of performance rights for total proceeds of $nil (2019: nil).
Alteration to option terms
There have been no alterations to option terms and conditions during or since the end of the financial year up to the
date of this report.
Equity holdings and transactions
The movements during the reporting period and prior reporting period in the number of ordinary shares in TALi Digital
Limited (formerly Novita Healthcare Limited) held, directly or indirectly or beneficially, by each specified director and
specified executive, including their personally-related entities are shown in the following tables. For persons who
commenced or ceased as a Director during a period, figures reported are for the period of appointment only.
22 | TALi Digital Limited Annual Report 2020
Number of shares held in TALi Digital Limited:
2020:
Holding of Ordinary
Shares at 1 July 2019
(or date of
appointment)
Granted as
compensation
Received
on exercise
of options/
performance
shares
Net other
change
Balance on
Resignation
Holding of
Ordinary
Shares at
30 June
2020
Number
Number
Number
Number
Number
Number
292,814
28,688,423
3,000,000
1,000,000
-
32,981,237
-
-
-
-
-
-
-
-
-
-
-
-
-
213,106
10,000,000
-
-
505,920
38,688,423
1,363,637
4,363,637
-
454,546
3,000,000
-
-
1,454,546
3,000,000
15,031,289
4,363,637 43,648,889
Directors
Ms S MacLeman
Mr J Harcourt
Mr M Simari
Mr G Smith
Dr D Brookes
Total
2019:
Holding of Ordinary
Shares at 1 July 2018
(or date of
appointment)
Granted as
compensation
Received
on exercise
of options/
performance
shares
Net other
change
Balance on
Resignation
Holding of
Ordinary
Shares at
30 June
2019
Number
Number
Number
Number
Number
Number
Directors
Ms S MacLeman
Mr J Harcourt
Mr M Simari
Mr G Smith
-
25,322,110
2,000,000
-
Total directors
27,322,110
Executives
Ms M Klapakis
Total executives
Total
20,000
20,000
27,342,110
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
292,814
3,366,313
1,000,000
1,000,000
5,659,127
10,000
10,000
5,669,127
-
-
-
-
-
-
-
-
292,814
28,688,423
3,000,000
1,000,000
32,981,237
30,000
30,000
33,011,237
TALi Digital Limited Annual Report 2020 | 23
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Number of options held in TALi Digital Limited:
2020:
Balance at 1 July
2019 (or date of
appointment)
Granted as
compensation
Exercised / elapsed
Balance at 30 June
2020
Number
Number
Number
Number
6,800,000
3,400,000
3,400,000
14,377,766
-
-
-
-
-
-
-
14,377,766
(14,377,766)
-
-
6,800,000
3,400,000
3,400,000
14,377,766
-
27,977,766
14,377,766
(14,377,766)
27,977,766
Directors
Ms S MacLeman
Mr J Harcourt
Mr M Simari
Mr G Smith
Dr D Brookes
Total
Due to changes in the structure of the company from 1 July 2019, Glenn Smith was deemed to be the only employee
classified as key management personnel.
2019:
Directors
Ms S MacLeman
Mr J Harcourt
Mr M Simari
Mr G Smith
Total
Balance at 1 July
2018 (or date of
appointment)
Granted as
compensation
Exercised / elapsed
Balance at 30 June
2020
Number
Number
Number
Number
-
6,800,000
3,400,000
3,400,000
14,377,766
21,177,766
-
-
-
6,800,000
-
-
-
-
-
6,800,000
3,400,000
3,400,000
14,377,766
27,977,766
24 | TALi Digital Limited Annual Report 2020
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2020
Consequences of performance on shareholder wealth
In considering the Group’s performance and how best to generate shareholder value, the Board has regard
to a broad range of factors, some of which are financial and others of which relate to the technical and
commercial progress on the Group’s projects and, where applicable, relationship building with health clinics and
institutions and internal innovation etc. The Board has some but not absolute regard to the Group’s result and
cash consumption for the year. It does not utilise earnings per share as a performance measure and does not
contemplate consideration of any dividends in the short to medium term given that all efforts are currently being
devoted to obtaining value for the Group’s assets and where possible building the business and partnerships to
establish self-sustaining revenue streams and total shareholder value. The Group is of the view that any short term,
adverse movements in the Company’s share price should not necessarily be taken into account in assessing the
performance of KMP’s.
Dated at Melbourne this 30th day of September, 2020.
This report is made with a resolution of the directors.
Sue MacLeman
Chair
TALi Digital Limited Annual Report 2020 | 25
“
I thought my son would be suited
to this style of therapy as he loves to play
games on his tablet. As he has limited
language I simplified the explanation of the
program, telling him it was a special game
to help him behave better at school. I found
that doing TALi TRAIN early in the morning,
when he first woke up, or just after breakfast
helped him to respond better.
Marika
Parent of Adam, a 4 year old with ASD
26 | TALi Digital Limited Annual Report 2020
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3000
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8329 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of TALi Digital Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of TALi Digital
Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 30 September 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
TALi Digital Limited Annual Report 2020 | 27
Statement of Profit or Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2020
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Note
Revenue from continuing operations
Other income
Contract research and development expenses
4
4
Consolidated
2020
$
47,229
574,715
36,427
Personnel expenses excluding share-based payment expense
(1,841,093)
Share based payment expense
Depreciation and amortisation expenses
Occupancy expenses
Professional and consulting expenses
Travel and accommodation expenses
Insurance expenses
Corporate administration expenses
Intellectual property expenses
Advertising and promotion
Other expenses
Results from operating activities
Foreign exchange gains/losses
Net finance income / (expense)
Loss before income tax expense from continuing operations
Income tax expense
Loss after income tax expense from continuing operations
Profit / (loss) after income tax from discontinued operations
Loss attributable to owners of the Group
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
25
5(a)
5(b)
33
7
33
2019
$
87,742
826,125
(174,852)
(1,848,454)
(170,021)
(474,716)
(83,157)
(407,791)
(201,198)
(67,902)
(54,999)
(74,212)
(357,479)
(244,922)
(8,705)
(548,913)
(52,780)
(631,063)
(129,472)
(85,103)
(86,468)
(128,042)
(342,132)
(186,268)
(3,381,668)
(3,245,836)
(1,908)
(14,362)
(4,614)
1,613
(3,397,938)
(3,248,837)
-
-
(3,397,938)
(3,248,837)
-
304,394
(3,397,938)
(2,944,443)
Net change in fair value of Investments
(800,000)
(200,000)
Total comprehensive (loss)/income for the period attributed
to owners of the Group
(4,197,938)
(3,144,443)
Basic earnings per share from continuing operations
Diluted earnings per share from continuing operations
Basic earnings per share from discontinued operations
Diluted earnings per share from discontinued operations
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
(0.51)
(0.51)
-
-
(0.51)
(0.51)
(0.75)
(0.75)
0.07
0.07
(0.67)
(0.67)
The statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to the
financial statements set out on pages 35 to 63.
28 | TALi Digital Limited Annual Report 2020
Statement of Financial Position
AS AT 30 JUNE 2020
Statement of financial position
as at 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Investments
Other assets
Total current assets
Non-current assets
Investments
Intangible assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred income
Employee benefits
Total current liabilities
Non-current liabilities
Employee benefits
Lease liabilities
Deferred income
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share based payment reserve
Revaluation reserve
Accumulated losses
Total equity
Note
Consolidated
2020
$
2019
$
9
10
11
12
11
13
14
15
16
17
34
27
27
17
34
18
19
3,945,408
956,067
1,418
29,144
4,932,037
-
3,322,432
316,972
3,639,404
8,571,441
888,417
-
136,915
261,642
125,820
341,434
970,800
1,350
5,554
1,319,138
800,000
2,575,900
479,078
3,854,978
5,174,116
587,600
429,968
74,806
187,659
156,605
1,412,794
1,436,638
12,505
55,312
1,424,274
1,492,091
2,904,885
5,666,556
9,527
250,196
1,210,663
1,470,386
2,907,022
2,267,094
202,113,795
1,098,238
(1,000,000)
194,976,507
638,126
(200,000)
(196,545,477)
(193,147,539)
5,666,556
2,267,094
The statement of financial position is to be read in conjunction with the notes to the financial statements set out on
pages 35 to 63.
TALi Digital Limited Annual Report 2020 | 29
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
Statement of changes in equity
For the year ended
30 June 2020
Opening balance
as at 1 July 2019
Note
Issued capital
$
Accumulated
losses
$
Share based
payments
reserve
$
Change in
fair value
reserve
$
Total
equity
$
194,976,507
(193,147,539)
638,126
(200,000)
2,267,094
Comprehensive (loss)/income
for the period
Total other comprehensive
income
Total comprehensive
income/(loss) for the period
19
-
-
Transactions with owners,
recorded directly in equity
Contributions by owners:
Impairment of investment
11
Issue of ordinary shares
Transaction costs relating to
issue of ordinary shares
Share-based payment
transactions to employees
Share-based payments
(to brokers)
Total transactions
with owners
Closing balance
as at 30 June 2020
-
-
-
-
8,200,000
(1,062,712)
-
-
7,137,288
(3,397,938)
-
(3,397,938)
-
-
-
-
-
-
-
-
-
-
-
-
8,705
451,407
-
-
-
(3,397,938)
-
(3,397,938)
(800,000)
(800,000)
-
-
-
-
8,200,000
(1,062,712)
8,705
451,407
460,112
(800,000)
6,797,400
18,19
202,113,795
(196,545,477)
1,098,238
(1,000,000)
5,666,556
The statement of changes in equity is to be read in conjunction with the notes to the financial statements set out on
pages 35 to 63.
30 | TALi Digital Limited Annual Report 2020
Comprehensive (loss)/income
for the period
19
-
(2,944,443)
Statement of changes in equity
For the year ended
30 June 2019
Opening balance
as at 1 July 2018
Total other comprehensive
income
Total comprehensive
income/(loss) for the period
Transactions with owners,
recorded directly in equity
Contributions by owners:
Issue of ordinary shares
pursuant to private placement
Transaction costs relating to
issue of ordinary shares
Share-based payment
transactions to employees
Share-based payments
(to vendors)
Total transactions
with owners
Closing balance
as at 30 June 2019
Note
Issued capital
$
Accumulated
losses
$
Share based
payments
reserve
$
Change in
fair value
reserve
$
Total
equity
$
192,495,917
(190,203,096)
368,105
-
-
2,660,926
(2,944,443)
(200,000)
(200,000)
(200,000)
(3,144,443)
-
-
-
-
-
2,785,692
(305,102)
170,021
100,000
2,750,611
-
-
-
-
-
170,021
100,000
270,021
-
(2,944,443)
2,785,692
(305,102)
-
-
2,480,590
-
-
-
-
-
18,19
194,976,507
(193,147,539)
638,126
(200,000)
2,267,094
The statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to the
financial statements set out on pages 35 to 63.
TALi Digital Limited Annual Report 2020 | 31
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2020
For the year ended 30 June 2020
Note
Cash flows from operating activities
Receipts from customers from continuing operations
Cash payments to suppliers and employees
R&D tax incentive
Grants received
Interest received
Consolidated
2020
$
2019
$
53,854
372,134
(3,785,688)
(4,273,387)
750,103
232,960
30,833
734,216
672,800
32,324
Net cash used in operating activities
21
(2,717,938)
(2,461,913)
Cash flows from investing purchases
Payments for intangible assets
Payments for investments
Payments for property, plant and equipment
Proceeds from disposal of listed equity instruments
(648,826)
-
(65,479)
-
(772,533)
(400,000)
(153,379)
22,756
Net cash used in investing activities
(714,305)
(1,303,156)
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Repayment of lease liabilities
Proceeds from borrowings
Repayment from borrowings
8,200,001
(611,302)
(122,514)
178,430
(608,398)
2,785,692
(205,102)
(94,010)
418,025
-
Net cash used in financing activities
7,036,217
2,904,605
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on cash and cash equivalents
3,603,974
341,434
-
(860,464)
1,201,898
-
Cash and cash equivalents at the end of the financial year
9
3,945,408
341,434
The statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 35
to 63.
32 | TALi Digital Limited Annual Report 2020
Amelia really enjoyed the
program and still now, 1 month after
“
she completed it, asks to do more.
It also helped us with an improved
daily routine for her during the
COVID-19 lockdown period.
Misty,
Parent of Amelia,
a 4 year old in kindergarten
TALi Digital Limited Annual Report 2020 | 33
TALi Digital Limited Annual Report 2020 | 33
“
When we first started playing TALi
TRAIN, Jake really loved it and was always
keen to play. Weeks 3 & 4 were a bit harder
to get him motivated but once he started
he was fine. What I loved most about TALi
TRAIN was how much it would calm him
down after school, which helped with his
behaviour in the evening. Jake flourished at
school during the 5 weeks of TALi TRAIN
and was often given ‘star of the day’ in class
because of how attentive he was being.
Overall, I would highly recommend the
program to any school age child struggling
to pay attention.
Deana
Parent of Jake, a 7 year-old with ADHD
34 | TALi Digital Limited Annual Report 2020
Notes to Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
Index to Notes to the Accounts
Note
1 Reporting entity
2 Basis of preparation
3 Significant accounting policies
4 Revenue from continuing activities and other income
5 Profit before related income tax expense
6 Auditors’ remuneration
7
Income tax
8 Dividend franking account
9 Cash and cash equivalents
10 Trade and other receivables
11
Investments
12 Other assets
13
Intangible assets
14 Property, plant and equipment
15 Trade and other payables
16 Borrowings
17 Lease liabilities
18
Issued capital
19 Accumulated losses
20 Commitments
21 Notes to the statements of cash flows
22 Earnings per share
23 Financial instruments disclosure and financial risk management
24 Related parties
25 Share based payment expense
26 Contingent liabilities
27 Employee benefits
28 Events subsequent to balance date
29 Dividends
30 Segment reporting
31 Group entities
32 Parent entity disclosures
33 Discontinued operations
34 Deferred income
35 Finance income and finance costs
TALi Digital Limited Annual Report 2020 | 35
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
Despite this financial position, in the Directors opinion
there are reasonable grounds to believe the consolidated
entity will be able to continue as a going concern,
able to pay its debts as and when they fall due, after
consideration of the following:
• The Group has cash reserves of $3,945,408
• The Group is forecasting increased revenue growth
from the increased sales of licenses for the TALi
products, which will deliver greater cash inflows.
The Directors have prepared projected cash flow
information for the twelve months from the date of
approval of these financial statements taking into
consideration the uncertainty of multiple significant
business impacting events that could occur in the next
twelve months.
In response to the uncertainty arising from this, the
Directors have considered a plausible forecast range.
The lowest of these forecast ranges indicates that
the Group is expected to continue to operate, within
available cash levels. Key to the forecasts are relevant
assumptions regarding the business, business model, any
legal or regulatory restrictions, in particular:
• Receipt of the Research and Development tax
incentive for FY20 and FY21 at similar levels to prior
years;
• Mitigating actions including the deferral of
non-critical and discretionary operating expenditure,
which the Directors and management monitor
monthly; and
• Critically assessing the performance of business
operations to determine the most adequate use of cash.
The Directors remain focused on the Group’s liquidity and
expect to manage business operations in the forecast
period whilst maintaining adequate liquidity. Based
on the forecasts, the Directors believe that it remains
appropriate to prepare the financial statements on a going
concern basis.
1. Reporting entity
TALi Digital Limited (the “Company”) is a company
domiciled in Australia. The consolidated financial
statements of the Company as at 30 June 2020
comprise the Company and its subsidiary entities
(together referred to as the “Group” and individually
as “Group entities”). The Group primarily is involved
in research and development, for commercialisation,
of medical technology projects. The Company is a
public company listed on the ASX, incorporated and
domiciled in Australia, and with a registered office
and principal place of business located at Level
5, 19 William Street, Cremorne Vic 3121. Except as
disclosed elsewhere in this Report, there have been
no significant changes in the nature of these activities
during the year.
2. Basis of preparation
(a) Statement of compliance
The consolidated financial statements are
general purpose financial statements which have
been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian
Interpretations) adopted by the Australian Accounting
Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial statements
comply with the International Financial Reporting
Standards (IFRSs) and interpretations adopted by the
International Accounting Standards Board
The Company is of a kind referred to in ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 issued by the Australian Securities
and Investments Commission (ASIC), relating to the
rounding off of amounts in the consolidated financial
statements. Amounts in the consolidated financial
statements have been rounded off in accordance with
that legislative instrument to the nearest dollar, unless
specifically stated to be otherwise.
(b) Going concern
The financial statements have been prepared on the
going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and
discharge of liabilities in the normal course of business.
As disclosed in the financial statements for the year
ended 30 June 2020, the consolidated entity incurred
a loss of $3,397,938 (2019: $2,944,443) and had
negative operating cash flows of $2,717,938 (2019:
$2,461,913). The consolidated entity’s main activity is
developing and commercialising the TALi products
and various service lines which will require further
funding and investment.
36 | TALi Digital Limited Annual Report 2020
Any new or amended Accounting Standards or
Interpretations that are not mandatory have not yet
been adopted, with the exception of AASB 16 leases,
note below.
The following Accounting Standards and Interpretations
are most relevant to the consolidated entity:
AASB 16 Leases
The consolidated entity has early adopted AASB
16. The standard provides a comprehensive model
for the identification of lease arrangements and
their treatment in the financial statements for both
lessors and lessees. AASB 16 superseded the lease
guidance including AASB 117 Leases and the related
Interpretations when it became effective for accounting
periods beginning on or after 1 January 2019. The initial
date of application of application of the standard for
the consolidated entity was 1 July 2018. The change
in definition of a lease mainly relates to the concept
of control. AASB 16 distinguishes between leases and
service contracts on the basis of whether the use of an
identified asset is controlled by the customer. Control is
considered to exist if the customer has:
• The right to obtain substantially all of the economic
benefits from the use of an identified asset, and
• The right to direct the use of that asset.
The consolidated entity applied the definition of a lease
and related guidance set out in AASB 16 to all lease
contracts entered into or modified on or after 1 July 2018
(whether it is a lessor or a lessee in the lease contract).
The impact on the financial performance and position
of the consolidated entity from the adoption of these
Accounting Standards is detailed in note 17.
2. Basis of preparation (continued)
(b) Going concern (continued)
Judgement has been exercised in considering the
impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the Group based on
known information. Other than a delay in anticipated
revenue due to a change in socio-economic conditions
especially in Victoria, there does not currently appear
to be either any significant impact upon the financial
statements or any significant uncertainties with respect
to events or conditions which may impact the Group
unfavourably as at the reporting date or subsequently
as a result of the Coronavirus (COVID-19) pandemic.
The Group has received $50,000 of the recorded
$100,000, COVID-19 related government PAYGW cash
booster grant. The Group has also received $87,000 of
the recorded $129,000 JobKeeper payments.
(c) Use of estimates and judgements
The preparation of consolidated financial statements
conforms with Australian Accounting Standards which
requires management to make judgements, estimates
and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income
and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision only affects that period or in the
period of the revision and future periods if the revision
affects both current and future periods.
The key estimates and judgments made in preparing
the financial statements are:
• Assessing the carrying amount and estimated useful
life of identifiable intangible assets (refer to note 13);
• Assessing the carrying amount of investments (refer to
note 11).
3. Significant accounting policies
The principle accounting policies adopted in the
preparation of the financial statements are set out
below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
New or amended Accounting Standards and
Interpretations adopted
The consolidated entity has adopted all of the new or
amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Boards (‘AASB’)
that are mandatory for the current reporting period.
TALi Digital Limited Annual Report 2020 | 37
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
Financial assets are derecognised when the
rights to receive cash flows have expired or have
been transferred and the consolidated entity has
transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation
of recovering part or all of a financial asset, it’s
carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or
at fair value through other comprehensive income
are classified as financial assets at fair value through
profit or loss. Typically, such financial assets will be
either: (i) held for trading, where they are acquired
for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii)
designated as such upon initial recognition where
permitted. Fair value movements are recognised in
profit or loss.
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income include equity investments
which the group intends to hold for the foreseeable
future and has irrevocably elected to classify them as
such upon initial recognition.
For financial assets measured at fair value through
other comprehensive income, the loss is recognised
within other comprehensive income. In all other cases,
the loss allowance is recognised in profit and loss.
Cash and cash equivalents comprise cash balances
and call or term deposits. Accounting for finance
income and costs are discussed in Note 3(c).
(c) Finance income and costs
Finance income comprises interest income on funds
invested, dividend income, and changes in the
fair value of financial assets at fair value through
profit or loss, gains on hedging instruments that
are recognised in profit or loss and reclassifications
of amounts previously recognised in other
comprehensive income. Interest income is recognised
as it accrues in profit or loss, using the effective
interest method.
Finance costs comprise interest expense on
borrowings, changes in the fair value of financial
assets at fair value through profit or loss, impairment
losses recognised on financial assets, and losses on
hedging instruments that are recognised in profit
or loss and reclassifications of amounts previously
recognised in other comprehensive income.
3. Significant accounting policies (continued)
(a) Revenue recognition
Sale of goods
The Group follows AASB15 which is based on the
principle that revenue is recognised when control of a
good or service transfers to a customer.
To determine whether to recognise revenue, the
Group follows a 5-step process:
To determine whether to recognise revenue, the
Group follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the
performance obligations
5. Recognising revenue when/as performance
obligation(s) are satisfied.
Revenue from sale of goods is for a one-off fixed fee.
In accordance with the 5-step approach, revenues
are generally recognised at the time of delivery of the
goods to the customer. Invoices for goods or services
transferred are generally due upon receipt of the goods.
Government grants
Conditional government grants are recognised
initially as deferred income when there is a
reasonable assurance that they will be received
and that the Group will comply with the conditions
associated with the grant. Grants that compensate
the Group for expenses incurred are recognised in
profit or loss on a systematic basis in the same periods
in which the expenses are recognised.
An unconditional grant is recognised in profit or loss
as other income when the grant becomes receivable.
(b) Financial instruments
Investments and other financial assets are initially
measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial
assets at fair value through profit or loss. Such assets
are subsequently measured at either amortised
cost or fair value depending on their classification.
Classification is determined based on both the
business model within which such assets are held
and the contractual cash flow characteristics of the
financial asset unless, an accounting mismatch is
being avoided.
38 | TALi Digital Limited Annual Report 2020
(d) Goods and services tax
Revenue, expenses and assets are recognised net of
the amount of Goods and Services Tax (GST), except
where the amount of GST incurred is not recoverable
from the taxation authority. In these circumstances, the
GST is recognised as part of the cost of acquisition of
the asset or as part of the expense.
Receivables and payables are stated with the amount
of GST excluded. The net amount of GST recoverable
from, or payable to, the Australian Taxation Office
(ATO) is included as a current asset or liability in the
balance sheet.
Cash flows are included in the statement of cash
flows on a gross basis. The GST components of cash
flows arising from investing and financing activities
which are recoverable from, or payable to, the ATO
are classified as operating cash flows.
(e) Foreign currency
Transactions in foreign currencies are translated
at the foreign exchange rate ruling at the date of
the transaction. Monetary assets and liabilities
denominated in foreign currencies at the reporting
date are translated to Australian dollars at the
foreign exchange rate at that date. Foreign exchange
differences arising on translation are recognised in
the income statement.
Non-monetary assets and liabilities that are measured
in terms of historical cost in a foreign currency are
retranslated to Australian dollars using the foreign
exchange rate at the date of the transaction. Non-
monetary assets and liabilities denominated in
foreign currencies that are measured at fair value are
retranslated to Australian dollars at the exchange rate
at the date that the fair value was determined.
(f) Income tax
Income tax expense comprises current and deferred
tax. Income tax expense is recognised in profit or loss
except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable
on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised using the balance sheet
liability method, providing for temporary differences
between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is measured
at the tax rates that are expected to be applied to
the temporary differences when they reverse based
on the laws that have been enacted or substantively
enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it
is probable that future taxable profits will be available
against which the temporary difference can be utilised.
Deferred tax assets are reviewed at each reporting
date and reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
(g) Property, plant and equipment
(i) Owned assets
The Group holds no property. Items of plant and
equipment are measured at cost less accumulated
depreciation and impairment losses. Cost includes
expenditures that are directly attributable to the
acquisition of the asset. The costs of day to day
servicing of plant and equipment are recognised in
profit or loss as incurred. The cost of replacing part of
an item of plant and equipment is recognised in the
carrying amount of the asset if it is probable that the
future economic benefits embodied within the part will
flow to the Group and its costs can be measured reliably.
(ii) Depreciation
Depreciation is recognised in profit or loss on a straight-
line basis over the estimated useful lives of each part of
an item of plant and equipment. The estimated useful
lives in the current and comparative periods are as
follows:
• Plant and equipment
2.5 – 10 years
• Leasehold improvements
• Right-of-use asset
3 years
3 years
Depreciation methods, useful lives and residual values
are reassessed annually at the reporting date.
TALi Digital Limited Annual Report 2020 | 39
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
3. Significant accounting policies (continued)
(h) Intangible assets
Intangible assets acquired by the Group which
satisfy the asset recognition criteria set out in
AASB 138 Intangible Assets, are measured at cost
less accumulated amortisation and accumulated
impairment losses. Intangible assets which are
considered to have a finite life are amortised over
their estimated useful life. In respect of acquired
licences / marketing rights, amortisation commences
upon the asset becoming available for use, based
on commercialisation of the licensed or marketed
product. The estimated useful life of acquired
intellectual property is 5-20 years (2019: 5-20 years).
Research and development
Research costs are expensed in the period in which
they are incurred, Development costs are capitalised
when it is probable that the project will be a success
considering its commercial and technical feasibility;
the consolidated entity is able to use or sell the asset;
the consolidated entity has sufficient resources; and
intent to complete the development and its costs can
be measured realisably. Capitalised development
costs are amortised on a straight-line basis over the
period of their expected benefit being their finite life
of 7 years.
(j) Cash and cash equivalents
Cash and cash equivalents comprise cash balances
and short-term deposits with an original maturity of
three months or less.
(j) Impairment
A financial asset is considered to be impaired if
objective evidence indicates that one or more events
have had a negative effect on the estimated future
cash flows of that asset.
The carrying amounts of the Group’s assets are
reviewed at each balance date to determine whether
there is any indication of impairment. If any such
indication exists, the recoverable amount of the asset
is estimated.
An impairment loss in respect of an asset measured
at amortised cost is calculated as the difference
between the carrying amount and the present value
of the estimated future cash flows discounted at the
effective original interest rate.
Individually significant financial assets are tested for
impairment on an individual basis. The remaining
financial assets are assessed collectively in groups
that share similar credit risk characteristics.
40 | TALi Digital Limited Annual Report 2020
All impairment losses are recognised in profit or loss.
Aside from impairment of goodwill, an impairment
loss is reversed if the reversal can be related
objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at
amortised cost, the reversal is recognised in profit or loss.
The carrying amounts for non-financial assets are
reviewed each reporting date to determine whether
there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount
is estimated and an impairment loss recognised
in profit or loss if the carrying amount of an asset
exceeds its recoverable amount. The recoverable
amount of an asset is determined as the greater of its
value in use and its fair value less costs to sell. Value
in use is assessed using discounted cash flow analysis.
When determining fair value less costs to sell, TALi
Digital takes into account information from recent
market transactions and other available market-
based information.
(k) Employee benefits
(i)
Long-term service benefits
The Group’s net obligation in respect of long-term
employee benefits is the amount of future benefit that
employees have earned in return for their service in
the current and prior periods plus related on-costs.
That benefit is discounted to determine its present
value. The discount rate is the yield at the reporting
date on corporate bonds that have maturity dates
approximating the terms of the Group’s obligations.
(ii) Share-based payment transactions
The Group provides benefits to its employees in the
form of share-based payments, whereby services
are rendered in exchange for shares or rights over
shares (equity-settled transaction). There is currently
a Performance Rights Plan in place as part of the LTI,
for the issue of share-based payments to staff and
KMP as a reward for performance and loyalty. LTI
awards to executives are made under the executive
Performance Rights plan and are delivered in the
form of performance rights or zero exercise price
options. The performance rights will vest over a
period of three years subject to meeting performance
measures. The cost of the equity-settled transaction is
recognised, together with a corresponding increase
in equity, over the period in which the performance
and/or service conditions are fulfilled (vesting
period), ending on the date the relevant employees
benefit become fully entitled to the award (the vesting
date. The fair value of the performance rights is based
on the Monte Carlo pricing model to test the likelihood
of attaining the performance hurdles.
(iii)
Wages, salaries, annual leave and at-risk
performance incentives
Liabilities for employee benefits for wages, salaries,
annual leave and performance incentives represent
present obligations resulting from employees’ services
provided up to reporting date and are calculated
at undiscounted amounts based on compensation
wage and salary rates that the Group expects to
pay as at reporting date including related on-costs,
such as workers’ compensation insurance and payroll
tax. Government stimulus payments such as PAYGW
cash booster and JobKeeper are recorded as a
reimbursement of expenditure.
(iv) Superannuation
Obligations for contributions to defined contribution
superannuation funds are recognised as an expense
in profit or loss when they are due. The Group has no
defined benefit pension fund obligations.
(l) Provisions
A provision is recognised if, as a result of a past
event, the Group has a present legal or constructive
obligation that can be measured reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and, when
appropriate, the risks specific to the liability.
Lease make good provision
A provision has been made for the present value
of anticipated costs for future restoration of leased
premises. The provision includes future cost estimates
associated with closure of the premises. The
calculation of this provision requires assumptions such
as application of closure dates and cost estimates.
The provision recognised for each site is periodically
reviews and updated based on the facts and
circumstances available at the time.
Changes to the estimated future costs for sites are
recognised in the statement of financial position by
adjusting the asset and the provision. Reductions in
the provision that exceed the carrying amount of the
asset will be recognised in profit or loss.
(m) Right-of-use asset
At inception of a contract, the Group assesses
whether a contract is, or contains, a lease. A contact
is, or contains, a lease if the contract conveys the right
to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether
a contract conveys the right to control the use of an
identified asset, the Group assesses whether:
• The contract involves the use of an identified
asset – this may be specified explicitly or implicitly
and should be physically distinct asset. If the
supplier has a substantiate substitution right, then
the asset is not identified;
• The Group has the right to obtain substantially
all of the economic benefits from use of the asset
throughout the period of use; and
• The Group has the right to direct the use of the
asset. The Group has the right when it has the
decision-making rights that are most relevant to
changing how and for what purpose the asset is
used. In rare cases where all the decisions about
how and for what purpose the asset is used are
predetermined, the Group has the right to direct the
use of the asset if either:
o The Group has the right to operate the asset; or
o The Group designed the asset in a way that
predetermines how and for what purpose it
will be used.
The Group has applied this approach to contracts
entered into or changed on or after 1 July 2018.
At inception or on reassessment of a contacts that
contains a lease component, the Group allocates the
consideration in the contract that contains a lease
component, the Group allocates the consideration in the
contract to each lease component on the basis of their
relative stand-alone prices.
TALi Digital Limited Annual Report 2020 | 41
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
Lease payments included in the measurement of the
lease liability comprise:
• Fixed payments, including in-substance fixed
payments;
• Variable lease payments that depend on an index
or a rate, initially measured using the index or rate
as at the commencement date;
• Amounts expected to be payable under a residual
value guarantee; and
• The exercise price under a purchase option that
the Group is reasonably certain to exercise, lease
payments in an optional renewal period if the
Group is reasonably certain to exercise an extension
option, and penalties for early termination of a
lease unless the Group is reasonably certain not to
terminate early.
The lease liability is measure at amortised coast using the
effective interest method. It is remeasured when there is
a change in future lease payments arising for a change
in an index or rate, if there is a change in the Group’s
estimate of the amount expected to be payable under
a residual value guarantee or if the Group changes
its assessment of whether it will exercise a purchase,
extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in profit or
lost if the carrying amount of the right-of-use asset has
been reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use
assets and lease liabilities for short-term leases that have
a lease term of 12 months or less and leases of low-value
assets, including IT equipment. The Group recognises the
lease payments as associated with these leases as an
expense on a straight-line basis over the lease term.
Payments made under short term operating leases are
recognised in profit or loss on a straight-line basis over
the term of the lease.
3. Significant accounting policies (continued)
(m) Right-of-use asset (continued)
For contracts entered into before 1 July 2018, the
Group determined whether the arrangement was
or contained a lease based on the assessment of
whether:
• Fulfillment of the arrangement was dependent on
the use of a specific asset or assets; and
• The arrangement had conveyed a right to use the
asset. An arrangement conveyed the right to use
the asset if one of the following was met:
o The purchaser had the ability or right
to operate the asset while obtaining or
controlling more than an insignificant amount
of the output;
o The purchaser had the ability or right to
control physical access to the asset while
obtaining or controlling more than an
insignificant amount of the output; or
o Facts and circumstances indicated that it was
remote that other parties would take more
than an insignificant amount of the output,
and the price per unit was neither fixed per
unit of output nor equal to the current market
price per unit of output.
The Group recognises a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the
lease term. The Estimate useful lived of right-of-use
assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use
asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot
be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.
42 | TALi Digital Limited Annual Report 2020
(n) Research and development
(s) New standards and interpretations not yet
Research expenditure undertaken with the prospect
of gaining new scientific or technical knowledge
or understanding is expensed in profit or loss as
incurred. Development expenditure is capitalised
only if development costs can be measured reliably,
the product is technically and commercially feasible,
future economic benefits are probable, and
completion of development is intended.
adopted
A number of new standards, amendments to
standards and interpretations effective for annual
periods beginning on or after 1 July 2020 have not
been applied in preparing these consolidated
financial statements. None of these is expected to
have a significant effect on the consolidated financial
statements of the Group.
(o) Segment reporting
(t) Non-current assets or disposal groups classified
as held for sale
Non-current assets and assets of disposal groups are
classified as held for sale if their carrying amount will
be recovered principally through a sale transaction
rather than through continued use. They are
measured at the lower of their carrying amount and
fair value less costs of disposal. For non-current assets
or assets of disposal groups to be classified as held
for sale, they must be available for immediate sale in
their present condition and their sale must be highly
probably.
An impairment loss is recognised for any initial or
subsequent write down of the non-current assets
and assets of disposals groups to fair value less costs
of disposal. A gain is recognised for an subsequent
increases in fair value less costs of disposal of a non-
current assets and assets of disposal groups, but not
in excess of any cumulative impairment loss previously
recognised.
Non-current assets are not depreciated or amortised
while they are classified as held for sale. Interest and
other expenses attributable to the liabilities of assets
held for sale continue to be recognised.
A segment is a distinguishable component of a
Group engaged in providing products or services
within a particular business sector or geographical
environment. The Group determines and presents
operating segments based on information that
internally is provided to and used by the Managing
Director, who is the Group’s chief operating decision
maker. The Group operates within two business
segments as at 1 July 2019 comprising research
and development and investments. In the 2019
financial year the segment of Healthcare/Workforce
Management was discontinued. Discrete financial
information about each of these operating businesses
is reported to the Board on at Board meetings.
(p) Earnings per share
The Group presents basic and diluted earnings
per share for its ordinary shares. Basic earnings per
share (EPS) is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares
outstanding for the period. Diluted EPS is calculated
by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number
of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares, including share
options granted to employees and to third parties.
(q) Share capital
Incremental costs directly attributable to the issue of
ordinary shares and share options are recognised as
a deduction from equity, net of any associated tax
benefit.
(r) Fair value reserve
The fair value reserve comprises the cumulative
net change in the fair value of financial assets with
changes in their fair value recognised in the Statement
of Profit or Loss and Other Comprehensive Income.
TALi Digital Limited Annual Report 2020 | 43
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
4. Revenue from continuing activities and other income
Sales revenue
Total revenue from operating activities
R&D tax incentive
Grant income
Other income
Total revenues and other income
Total other revenue
5. Profit before related income tax expense
a) Profit before related income tax expense has been arrived at after
charging the following items:
Depreciation of plant and equipment
Amortisation of intangible assets
Amounts recognised in provisions for employee entitlements
Superannuation payments to defined contribution plans
b) Other expenses:
Workplace administration
Asset management
Other expenses
Total other expenses
6. Auditors’ remuneration
Audit services:
Auditors of the Group – RSM
Auditors of the Group – Grant Thornton
Total audit services
Other services:
Tax compliance and advisory services – RSM
Tax compliance and advisory services Group – Grant Thornton
Total other services
44 | TALi Digital Limited Annual Report 2020
2020
$
47,229
47,229
477,432
97,215
68
574,715
621,944
2019
$
87,742
87,742
354,156
319,193
152,776
826,125
913,867
2020
$
2019
$
218,618
330,295
139,195
173,705
181,622
1,646
3,000
186,268
2020
$
23,250
60,000
83,250
7,400
13,000
20,400
144,421
330,295
138,050
137,356
127,240
8,820
108,862
244,922
2019
$
55,680
-
55,680
7,620
-
7,620
7. Income tax
Current tax expense (benefit) – current year
Deferred tax expense – continuing operations
Total income tax expense (benefit) in income statement attributable to
continuing operations
Numerical reconciliation between tax expense and pre-tax net loss:
2020
$
-
-
-
2019
$
-
-
-
Loss before tax – continuing operations
(3,397,938)
(2,944,443)
Income tax using domestic tax rate of 27.5% (2019: 30%)
(934,433)
(883,333)
Change in unrecognised temporary differences
85,923
373,916
Increase in income tax expense due to:
Non-deductible expenses
Use of tax losses not recognised
Research and development allowance
Decrease in income tax expense due to:
4,192
853,506
252,942
21,935
362,580
300,293
Items deductible for tax purposes
(103,336)
(175,391)
Items not assessable for tax purposes
Income tax expense on pre-tax net loss
(158,794)
-
-
-
The deductible temporary differences and any tax losses do not expire under current tax legislation. Deferred tax
assets have not been recognised in respect of these items because it is not probable that future taxable profit will be
available from which the Group can utilise the benefits. There was no deferred tax recognised directly in equity. As at
30 June 2020 the Group has revenue losses of approximately $154 million (2019: $151 million).
8. Dividend franking account
The Company has no franking credits at reporting date.
9. Cash and cash equivalents
Cash at bank and on hand
Bank short term deposits
Total cash assets
Financing arrangements
2020
$
148,058
3,797,350
3,945,408
2019
$
39,895
301,539
341,434
A security bond of $100,000 was provided on a Bank Guarantee on the Group’s new premises. Interest on cash
at bank is credited at prevailing market rates. The weighted average interest rate at reporting date was 0.46%
(2019: 1.3%).
TALi Digital Limited Annual Report 2020 | 45
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
10. Trade and other receivables
Current
Trade and other receivables
R&D tax incentive and other tax receivables
Total current trade and other receivables
Allowance for expected credit losses
2020
$
2019
$
214,719
741,348
956,067
225,232
745,568
970,800
The consolidated entry has recognised a loss of nil (2019: nil) in profit and loss in respect of the expected credit
losses for the year ended 30 June 2020.
11. Investments
Current
2020
$
2019
$
Financial assets classified at fair value through the profit & loss
1,418
1,350
Investments in equity instruments are categorised as Level 1 within the fair value hierarchy and are valued using
market observable rates, being quoted ASX stock prices.
Non-current
Investments in equity instruments
Balance at 1 July 2019
Additions
Change in fair value recognised in other comprehensive income
Balance at 30 June 2020
Ordinary shares at fair value through OCI
800,000
-
(800,000)
-
On 18 October 2018 Newly Pty Ltd, a fully owned subsidiary of Novita Healthcare, sold its entire business as a going
concern. In consideration for the sale the consolidated entity received 600 fully paid shares (10%) in Healthcarelink
Group Pty Ltd, plus the right to earn out shares. As part of the sale agreement 400 fully paid ordinary shares in the
company were purchased at an issue price of $1,000 per share.
During the current financial year, the Healthcarelink Group were unsuccessful in raising additional capital. Without
the required injection of capital, the business was deemed to no longer be operating as a going concern. Therefore,
under level 3 of the fair value hierarchy, the investment was indirectly determined by the Board to have a fair value
of $ nil. As a result, as at 30 June 2020, the asset has been written off.
46 | TALi Digital Limited Annual Report 2020
12. Other assets
Current
Prepayments
13. Intangible assets
2020
Gross carrying amount
2020
$
2019
$
29,144
5,554
Acquired licenses
$
Acquired
intellectual
property
$
Internally
developed assets
$
Total
$
Carrying amount at 1 July 2019
375,000
721,074
2,238,438
3,334,512
Addition, internally developed
Acquisition of intellectual property
-
-
-
648,828
428,000
-
648,828
428,000
Balance at 30 June 2020
375,000
1,149,074
2,887,266
4,411,340
Amortisation and impairment
Carrying amount at 1 July 2019
Amortisation
Impairment losses
Balance at 30 June 2020
Carrying amount at 30 June 2020
(63,218)
(18,750)
-
(81,968)
293,032
(486,232)
(144,215)
-
(209,163)
(167,330)
-
(758,613)
(330,295)
-
(630,447)
(376,493)
(1,088,908)
518,627
2,510,773
3,322,432
An assessment was made by management to determine whether any indicators of impairment exist. Indicators
assessed included but were not limited to; the Group’s market capitalisation, technology obsolescence, changes in
laws and regulations and COVID-19.
No indicators of impairment were identified. Management also considered the carrying value intangible assets not
yet in use and determined the recoverable amount is greater than the carrying value of these assets.
TALi Digital Limited Annual Report 2020 | 47
Total
$
2,267,384
1,067,128
3,334,512
(428,317)
(330,295)
-
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
13. Intangible assets (continued)
2019
Gross carrying amount
Carrying amount at 1 July 2018
Addition, internally developed
Acquired
licenses
$
Acquired
intellectual
property
$
Internally
developed assets
$
375,000
-
721,074
-
1,171,310
1,067,128
Balance at 30 June 2019
375,000
721,074
2,238,438
Amortisation and impairment
Carrying amount at 1 July 2018
Amortisation
Impairment losses
Balance at 30 June 2019
Carrying amount at 30 June 2019
(44,468)
(18,750)
-
(63,218)
311,782
(342,017)
(144,214)
-
(41,832)
(167,331)
-
(486,232)
(209,163)
(758,612)
234,842
2,029,275
2,575,900
(i) Licences and intellectual property
On the acquisition of TALi Health Pty Ltd announced on February 15th 2016, TALi Digital recognised intellectual
property (including licenses) at a fair value of $1,096,074. In June 2020 patents and other intellectual property were
acquired in relation to TALi products at a fair value of $428,000. Intangibles are initially recognised at cost and
amortised on a straight-line basis over the period of expected benefit, less any adjustments for impairment losses.
The estimated useful life and amortisation method are reviewed at the end of each annual reporting period.
(ii) Internally developed assets
Internally developed assets included the applied development activities conducted on the TALi Technology in
respect of the development stage of the TALi TRAIN, TALi DETECT and TALi MAINTAIN projects.
48 | TALi Digital Limited Annual Report 2020
14. Property, plant and equipment
Leasehold improvements – at cost
Less: accumulated depreciation
Property, plant and equipment – at cost
Less: accumulated depreciation
Right-of-use asset
Less: accumulated depreciation
Closing written down value
2020
$
162,543
(79,246)
83,297
191,982
(125,017)
66,965
400,104
(233,394)
166,710
316,972
2019
$
164,383
(55,834)
108,549
170,495
(111,158)
59,337
400,104
(88,912)
311,192
479,078
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
2020
Leasehold
improvements
$
Plant and
equipment
$
Right-of-use
asset
$
Balance as at 1 July 2019
108,549
59,337
-
28,549
(1,807)
-
40,884
-
311,192
(11,114)
-
-
(51,994)
(33,256)
(133,368)
(218,618)
Total
$
479,078
(11,114)
69,433
(1,807)
Reclassifications
Additions
Profit/loss on disposal
Depreciation expense
Balance as at 30 June 2020
83,297
66,965
166,710
316,972
2019
Balance as at 1 July 2018
Additions
Depreciation expense
Balance as at 30 June 2019
Leasehold
improvements
$
Plant and
equipment
$
Right-of-use
asset
$
Total
$
19,609
125,497
(36,558)
108,549
46,045
32,244
(18,951)
59,337
-
400,104
65,654
553,483
(88,912)
(144,421)
311,192
479,078
TALi Digital Limited Annual Report 2020 | 49
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
15. Trade and other payables
Trade payables
Accruals and other payables
2020
$
828,938
59,479
888,417
2019
$
435,219
152,381
587,600
The Group’s exposure to currency and liquidity risk related to trade creditors and accruals is disclosed in Note 23.
16. Borrowings
Loan - R&D advance
2020
$
-
2019
$
429,968
The liabilities as at 30 June 2019 represent a loan facility and is an advance on 80% of the group’s R&D Tax
Incentive for the three quarters ending 31 March 2019. The interest payable for the loan facility is 15% per annum.
1.16% per month, compound interest payable by 31 October 2019 and is secured by the R&D tax Incentive for the
2018/2019 year. Total transaction costs were $769 at the date of issue and the interest charged to 30 June 2019
was $11,943. The amount borrowed was $417,256.
17. Lease liabilities
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Total undiscounted lease liability at 30 June
Lease liabilities included in the statement of financial position at 30 June
Current
Non-current
Amounts recognised in profit or loss
Interest on lease liabilities
Amounts recognised in the statement of cash flows
2020
$
143,412
55,661
-
199,073
192,227
136,915
55,312
2019
$
137,178
191,217
-
328,395
305,990
74,806
250,196
(15,097)
(13,860)
Total cash outflow for leases
(122,514)
(88,963)
50 | TALi Digital Limited Annual Report 2020
18. Issued capital
Terms and conditions of ordinary shares
Holders of ordinary shares are entitled to one vote per share at shareholders’ meetings and to receive any dividends
as may be declared. In the event of winding up of the Company, ordinary shareholders rank after all creditors and
are fully entitled to any proceeds of liquidation. Ordinary shares have no par value.
Shares
2020
$
Number
2019
$
Number
Ordinary shares, fully paid
202,113,795
749,305,218
194,976,507
449,305,165
Movements in issued capital during
the year were as follows:
Balance at the beginning of the
financial year
194,976,507
449,305,165
192,495,917
359,444,132
Issue of shares
8,200,000
300,000,053
2,785,692
89,861,033
Transaction costs relating to rights issue
and placements
Issued capital at the end of the
financial year
(1,062,712)
-
(305,102)
-
202,113,795
749,305,218
194,976,507
449,305,165
19. Accumulated losses
2020
$
2019
$
Accumulated losses at the beginning of the financial year
(193,147,539)
(190,203,096)
Net loss attributable to owners of the Company
(3,397,938)
(2,944,443)
Accumulated losses at the end of the financial year
(196,545,477)
(193,147,539)
20. Commitments
a) Non-cancellable operating lease expense commitments
Future operating lease commitments not provided for in the financial
statements and payable:
- Within one year
- One year or later and no later than five years
- Greater than five years
(b) Cancellable research and development commitments
- Within one year
- One year or later and no later than five years
2020
$
2019
$
-
-
-
-
-
-
-
21,325
-
-
21,325
452,973
-
452,973
Amounts reflected in the above table represent contracted commitments to undertake various research and
development activities studies as part of the development of the Group’s project portfolio. Each commitment is
cancellable without penalty subject to notice periods of up to fourteen days.
TALi Digital Limited Annual Report 2020 | 51
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
21. Notes to the statement of cash flows
Cash as at the end of the financial year in the statement of cash flows
is reconciled to the related items in the balance sheet as follows:
Cash at bank and on hand
Cash at bank held by disposal groups as held for sale
Bank short term deposits
Cash assets (Note 9)
Loss after income tax
Add non-cash & non-operating items:
- Depreciation, amortisation and loss on disposal of plant and
equipment
- Shared based payment expense
- Investment (gain)/loss on revaluation
- Accrued interest
- Gain on disposal of investment
Change in operating assets and other receivables
- (Increase) / decrease in receivables
- (Increase) / decrease in other assets
- Increase / (decrease) in employee benefits
- Increase / (decrease) in deferred income
- Increase / (decrease) in payables
- Increase / (decrease) in other liabilities
2020
$
2019
$
148,058
-
3,797,350
3,945,408
39,895
-
301,539
341,434
(3,397,938)
(2,944,443)
548,912
479,562
8,705
(68)
-
-
14,733
(24,887)
(27,807)
287,594
(127,182)
-
170,021
2,137
11,492
(575,253)
(155,915)
(15,864)
54,544
906,999
(423,080)
27,887
Net cash used in operating activities
(2,717,938)
(2,461,913)
Non-cash financing and investing activities
There have been no non-cash financing and investing transactions during the 2020 financial year (2019: nil) which
have had a material effect on assets and liabilities of the Group.
22. Earnings per share
Basic Earnings per share (cents per share)
Diluted Earnings per share (cents per share)
a) Earnings reconciliation
Net loss:
Basic earnings
Diluted earnings
b) Weighted average number of shares
Number for basic earnings per share:
Ordinary shares
Number for diluted earnings per share:
Ordinary shares
Effect of share options on issue
2020
$
(0.51)
(0.51)
2019
$
(0.67)
(0.67)
(3,397,938)
(3,397,938)
(2,944,443)
(2,944,443)
Number
Number
670,288,091
434,779,683
Number
Number
670,288,091
434,779,683
-
-
Weighted average number of ordinary shares (diluted)
670,288,091
434,779,683
52 | TALi Digital Limited Annual Report 2020
23. Financial instruments disclosure and financial risk management
The Group has exposure to market, credit and liquidity risks from the use of financial instruments. This note presents
information about the Group’s exposure to each of these risks, its objectives, policies and processes for measuring
and managing risk. The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. The Group has adopted a Strategic Risk
Management Framework through which it manages risks and aims to develop a disciplined and constructive
control environment and action plans for risks that cannot be effectively managed through the use of controls. The
Audit Committee oversees how management monitors compliance with the Group’s Strategic Risk Management
Framework in relation to the changing risks faced by the Group.
(a) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices, will affect the Group’s income or value of its holdings in financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising
the financial return. No more than $2.7m of the Group’s cash resources is permitted to be invested in securities or
investments other than bank and term deposits without approval by the shareholders at an AGM. In respect of listed
company investments, the holding is reviewed by the Audit Committee if the market price falls by more than 10%
below the initial acquisition cost.
(i) Foreign currency risk
The Group has contracts denominated in foreign currencies, predominantly in US dollars and Euros, and may enter
into forward exchange contracts where appropriate in light of anticipated future purchases and sales, conditions
in foreign markets, commitments from customers and past experience and in accordance with Board-approved
limits. Note 3(e) sets out the accounting treatments for such contracts. There were no hedged amounts payable or
receivable in foreign currencies at reporting date (2019: nil).
At reporting date, the Group had the following exposures to foreign currency, converted to AUD:
Shares
Bank accounts
Receivables
Payables
Gross balance sheet
exposure
2020
GBP
-
-
-
-
USD
144
-
(29,437)
(29,293)
Foreign currency sensitivity analysis
SGD
EURO
GBP
-
-
-
-
-
-
-
-
USD
144
-
2019
SGD
EURO
-
-
-
-
-
-
(9,258)
(9,258)
-
-
(542)
(1,117)
(542)
(973)
A 10% strengthening or weakening of the Australian dollar applied against the Gross balance sheet exposure
in the above table in respect of the above currencies at 30 June 2020 would have increased/(decreased) profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates,
remain constant. A sensitivity of 10% has been selected as this is considered reasonable taking in to account the
current level of exchange rates and the volatility observed both on a historical basis and on market expectations
for future movements. The analysis is performed on the same basis for 2019. There is no impact on equity.
2020
Exposure
Equity
Profit and loss
Strengthening
Weakening
Strengthening
Weakening
Gross balance sheet exposure
-
-
2,041
(1,856)
2019
Exposure
Equity
Profit and loss
Strengthening
Weakening
Strengthening
Weakening
Gross balance sheet exposure
682
(833)
974
(1,190)
TALi Digital Limited Annual Report 2020 | 53
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
23. Financial instruments disclosure and financial risk management (continued)
Foreign currency sensitivity analysis (continued)
The following significant exchange rates applied during the financial year:
Currency
GBP
USD
EURO
(ii) Interest rate risk
Average rate
Reporting date spot rate
2020
0.56
0.70
0.62
2019
0.55
0.72
0.63
2020
0.56
0.69
0.62
2019
0.55
0.70
0.62
Interest earned on cash at bank is determined in accordance with published bank interest rates. The Group’s
exposure to interest rate risk is confined to cash assets, the effective weighted average interest rate for which is
set out below.
Note
number
Effective
interest rate
%
Floating
interest rate
$
3 months or
less
$
Non-interest
bearing
$
Total
$
9
9
16
16
0.46
3,797,350
1.1
-
15
301,539
-
429,968
-
-
-
-
148,058
3,945,408
39,895
341,434
-
-
-
429,968
Financial assets:
Cash assets – at 30 June
2020
Cash assets – at 30 June
2019
Financial liabilities:
Borrowings – at 30 June
2020
Borrowings – at 30 June
2019
2020 Profit and loss
2019 Profit and loss
Strengthening
Weakening
Strengthening
Weakening
Cash at bank – variable interest rate:
$AUD
18,987
(18,987)
1,707
(1,707)
An increase or decrease of 0.50% in interest rates applied for 12 months to the cash balances at reporting date
would have increased or decreased profit or loss by $18,987 (2019: $1,707), if all other variables, including foreign
currency rates, remain constant. The analysis is performed on the same basis for 2019.
(b) Credit risk
Credit risk represents the loss that would be recognised if counterparties fail to perform as contracted. For
financial assets, the credit risk exposure of the Group is the carrying amount of the asset net of any provision for
expected credit losses. For the Group, from interest and capital on deposits with financial institutions.
(i) Investments (including cash)
The Group’s Cash Management and Treasury Policy limits the maximum proportion of TALi Digital’s aggregate
gross cash resources that can be placed with or invested in any one counterparty, having regard to the credit
risk assigned to that counterparty unless the Board determines otherwise. No more than $2.7 million of the
Group’s cash resources permitted to be invested in securities or investments other than bank and term deposits
without approval by the shareholders at an AGM. In respect of listed company investments, the holding is
reviewed by the Audit Committee if the market price falls by more than 10% below the initial acquisition cost.
54 | TALi Digital Limited Annual Report 2020
(ii) Receivables
The Group undertakes due diligence prior to entering any collaboration, co-development or licensing agreement
with a counterparty that exposes the Group to credit risk. The Group’s exposure to credit risk from receivables is
shown below. No amounts are past due and impaired at balance date.
Note
number
3 months or
less
$
Greater than
3 months
$
Greater than
1 year
$
Total
$
10
10
953,317
962,000
-
2,750
956,067
8,800
-
970,800
Financial assets:
Receivables – at 30 June 2020
Receivables – at 30 June 2019
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall
due. The Group’s approach to managing liquidity is to ensure that it will maintain sufficient liquidity to meet its
liabilities when due having regard to forecast cash inflows and outflows, which in turn may be impacted by
planned corporate transactions.
The Group has no lines of credit other than a Bank Guarantee of $100,000. The Group manages its liquidity risk
using existing cash reserves managed in accordance with a Cash Management and Treasury Policy. Under this
policy, sufficient liquidity to meet day to day operating requirements is maintained in interest-bearing operating,
at-call and term bank accounts. Cash balances are prepared daily and cash requirements monitored on
weekly, month end reporting and annual budget/forecast cycles.
At reporting date, the Group had the following financial liability exposures:
Financial liabilities:
Creditors – at 30 June 2020
Creditors – at 30 June 2019
Note
number
3 months or
less
$
Greater than
3 months
$
Greater than
1 year
$
Total
$
15
15
819,924
566,480
9,014
21,120
-
-
828,938
587,600
Financial liabilities:
Borrowings – at 30 June 2020
Lease liabilities – at 30 June 2020
Borrowings – at 30 June 2019
Lease liabilities – at 30 June 2019
Note
number
Less than
one year
$
One to five
years
$
More than 5
years
$
16
17
16
17
-
143,412
143,412
429,968
137,178
567,146
-
55,661
55,661
-
191,217
191,217
-
-
-
-
-
-
Total
$
-
199,073
199,073
429,968
328,395
758,363
TALi Digital Limited Annual Report 2020 | 55
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
23. Financial instruments disclosure and financial risk management (continued)
(d) Net fair values of financial assets and liabilities
Net fair values of financial assets and liabilities are determined by the Group on the following bases:
(i) For monetary financial assets and financial liabilities not readily traded in an organised financial market, values
are determined by valuing them at the value of contractual cash flow amounts due from customers and payable
to suppliers discounted as appropriate for settlements beyond 12 months;
(ii) The carrying amounts of bank balances and deposits, trade debtors and accounts payable expected to be
payable within 12 months.
At reporting date there were no material differences between carrying values and fair values.
(e) Capital management
The Board’s policy is to maintain a sufficient capital base so as to sustain investor, creditor and market confidence
and to facilitate the future development of the business. As noted in Note 2 (b), in order to meet forecast operating
cash requirements, the Group may need to raise funds from other sources which may include raising capital or
securing debt facilities.
24. Related parties
Disclosures of compensation policies, service contracts and details of individual directors and executive’s
compensation are included in the Remuneration Report section of the Directors’ Report on pages 16 to 25.
Directors and Key Management Personnel compensation
The Directors and Key Management Personnel compensation included in “employee expenses” are as follows:
Nature of compensation
Short-term employee benefits
Performance benefits
Other short-term benefits
Post-employment benefits
Termination benefits
Share-based payments
Consulting fees
Total compensation
2020
$
374,483
62,500
-
30,933
-
-
-
2019
$
642,107
175,968
-
52,648
-
170,021
-
467,916
1,040,744
Key Management Personnel transactions
Directors of the Company control 5.83% (2019: 7.34%) of the voting shares of the Company.
Several key management personnel, or their related parties, hold positions in other companies that result in them
having control or significant influence over these companies. However, during the period the Group did not transact
with any of these companies.
Other Key Management Personnel transactions with the Group
No Key Management Personnel member has entered a material contract with the Group during either the 2020 or
2019 financial years and there were no material contracts with, amounts receivable from or payable to, interests
involving directors or executives at period end. The value of transactions during the year with entities related to
Directors included in the financial statements was nil (2019: nil).
Other Key Management Personnel transactions with the Group
There are no outstanding balances at the reporting date in relation to transactions with related parties other than KMPs:
No provision for doubtful debts has been raised against amounts receivable from other related parties.
56 | TALi Digital Limited Annual Report 2020
Loans and other transactions with Key Management Personnel
There were no loans made to Directors or Executives or other loan movements during the 2020 year.
Other related party transactions
Other than the transactions disclosed above, there were no transactions with other related parties during either the
2020 or 2019 financial years.
25. Share based payments
A performance right and share option plan has been established by the consolidated entity and approved by
shareholders at the 2017 Annual General Meeting, whereby the consolidated entity may, at the discretion of the
Board, performance rights and grant options over ordinary shares in the Company to certain key management
personnel of the consolidated entity. The performance rights and or options are issued for nil consideration and are
granted in accordance with performance guidelines established by the Board.
Set our below are summaries of Performance Rights and options granted under the plan:
Granted
during the
year
Exercised
during the
year
2020
Grant Date
3/10/2017
21/11/2017
8/10/2018
8/10/2018
13/09/2019
19/09/2019
15/10/2019 (i)
26/11/2019 (ii)
29/11/2019 (iii)
12/06/2020 (iv)
Exercise
Price
$0.030
$0.030
$0.030
$0.030
$0.030
$0.030
$0.020
$0.030
$0.090
$0.060
Balance at
the start of
the year
14,377,766
6,800,000
6,800,000
6,800,000
-
-
-
-
-
-
-
-
-
-
360,507
3,425,000
2,400,000
14,377,766
7,188,883
1,700,000
Weighted average exercise price
$0.03
$0.05
34,777,766
29,452,156
Expired/
forfeited other
At the end
of the year
(14,377,766)
-
-
-
-
-
-
-
-
-
-
6,800,000
6,800,000
6,800,000
360,507
3,425,000
2,400,000
14,377,766
7,188,883
1,700,000
(14,377,766)
49,852,156
$0.03
$0.04
-
-
-
-
-
-
-
-
-
-
-
-
(i) Employee Options were issued under the shareholder approved Performance Right and Share Options Plan. The
Options have the vesting dates of 31 October 2020 (740,000) 31 October 2021 (740,000) and 31 October 2022
(960,000) and are subject to the employees remaining employees of the Group at vesting date.
(ii) Employee Options were issued to the CEO in two tranches. 7,188,883 options (Tranche 1) will vest subject to the
employee remaining an employee at vesting date, and the following clauses;
• TD1 shares trade on the ASX at a minimum of $0.06 per Share for any consecutive 20 trading days during the
period from 3 October 2019 and until 3 October 2022, and
• TD1 achieving an operating profit for 2HFY20 (in the case that there are changes to the business plan approved
by the Board, the Board will determine in good faith any revision to the operating profit vesting criteria)
7,188,883 options (Tranche 2) will vest subject to the employee remaining an employee at vesting date, and the
following clauses;
• TD1 shares trade on the ASX at a minimum of $0.09 per Share for any consecutive 20 trading days during the
period from 3 October 2019 and until 3 October 2022, and
• TD1 achieving an operating profit for 2HFY20 (in the case that there are changes to the business plan approved
by the Board, the Board will determine in good faith any revision to the operating profit vesting criteria)
(iii) Broker options issued vested upon issue.
(iv) Employee Options are issued under Performance Right and Share Options Plan. The Options vesting on 1 March
2021 subject to meeting the Business Plan related KPIs.
TALi Digital Limited Annual Report 2020 | 57
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
25. Share based payments (continued)
2019
Grant date
01/07/2017
03/10/2017
21/11/2017
08/10/2018
08/10/2018
Exercise
price
Balance at
the start of
the year
Granted
during the
year
Exercised
during the
year
$0.022
2,000,000
$0.030
14,377,766
$0.030
6,800,000
-
-
-
$0.030
$0.030
-
-
6,800,000
6,800,000
23,177,766
13,600,000
Expired/
forfeited other
At the end
of the year
(2,000,000)
-
-
-
-
-
14,377,766
6,800,000
6,800,000
6,800,000
(2,000,000)
34,777,766
$0.022
$0.030
-
-
-
-
-
-
-
Weighted average exercise price
$0.029
$0.030
The weighted average remaining contractual life of performance rights and options outstanding at the end of
the financial year was 2.37 years (2019: 3.25 years)
For the options granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date are as follows:
Grant date
13/09/2019
19/09/2019
15/10/2019
26/11/2019
29/11/2019
12/06/2020
Expiry date
30/06/2021
30/06/2021
31/10/2024
3/10/2022
30/06/2022
1/05/2025
Share price
at grant date
Exercise price
Expected volatility
$0.010
$0.010
$0.010
$0.060
$0.060
$0.030
$0.030
$0.030
$0.020
$0.030
$0.030
$0.060
100%
100%
100%
100%
100%
100%
TALi Digital Long-Term Incentive Plan
The purpose of the TALi Digital Long-Term Incentive Plan (LTIP) is to provide long term rewards that are linked
to shareholder returns. Under the LTIP, selected executives may be offered several performance rights (Right)
and share options. Each Right provides the entitlement to acquire one TALi share at nil cost to the satisfaction of
performance hurdles.
The fair value of performance rights granted is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured by an independent third party at grant date and recognised over the
three-year vesting period during which the employees become unconditionally entitled to the performance rights.
26. Contingent liabilities
The Group is not aware of any contingent liabilities or contingent assets capable of having a material impact on the Group.
58 | TALi Digital Limited Annual Report 2020
27. Employee benefits
Aggregate liability for employee benefits, including on-costs:
Current – employee benefits provision
Non-current – employee benefits provision
Total employee benefits
2020
$
125,820
12,505
138,325
2019
$
156,605
9,527
166,132
At-risk incentive performance payments
Compensation for all employees other than non-executive directors includes an at-risk performance component.
Provision has been made at reporting date for the amount payable in respect of performance for the financial
year as measured against agreed criteria set on an employee by employee basis.
A reconciliation of movement for the year for all employee provisions is provided in the following table.
Balance at the beginning of the year
Provision utilised
Charges raised
Balance at the end of the year
Annual
leave
$
111,594
(110,908)
125,134
125,820
Long service
leave
$
Performance
incentive
$
54,538
(33,291)
(8,742)
12,505
-
-
-
-
Total
$
166,132
(144,199)
116,392
138,325
28. Events subsequent to balance date
On 23 September 2020, 14,377,766 options previously issued to CEO and Managing Director were cancelled.
29. Dividends
No dividends were paid or proposed in the current or prior financial years.
TALi Digital Limited Annual Report 2020 | 59
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
30. Segmented reporting
Information about reportable segments
For the financial year beginning 1 July 2019 the Group comprises the following two distinct business segments:
1. Research and Development – the operation of conducting health and medical research and development
for commercialisation.
2. Investments – investing of excess funds in approved instruments including Australian equities.
2020
Research &
Development
Healthcare/
Workforce
Management*
Investments
Total
Revenue from operating activities
Other income
Interest income
Finance expense
Depreciation and amortisation and
loss on disposal
Reportable segment profit / (loss)
before tax
Reportable segment total assets
Reportable segment total liabilities
2020
$
47,229
574,715
29,566
(43,928)
(548,912)
(3,398,006)
8,570,023
2,904,885
2020
$
2020
$
2020
$
47,229
574,715
29,566
(43,928)
(548,912)
-
-
-
-
-
68
(3,397,938)
1,418
8,571,441
-
2,904,885
-
-
-
-
-
-
-
-
2019
Research &
Development
Healthcare/
Workforce
Management*
Investments
Total
Revenue from operating activities
Other income
Interest income
Finance expense
Depreciation and amortisation and
loss on disposal
Reportable segment profit / (loss)
before tax
2019
$
16,202
826,125
27,928
-
2019
$
71,540
-
-
-
(474,716)
(4,846)
2019
$
-
-
-
-
-
2019
$
87,742
826,125
27,928
-
(479,562)
(3,246,412)
304,394
(2,425)
(2,944,443)
Reportable segment total assets
Reportable segment total liabilities
4,353,756
2,888,012
-
-
801,350
5,155,106
-
2,888,012
The aggregate of the assets, liabilities and profits for each segment in the Group Total
* Healthcare/Workforce Management – developing and providing recruitment solutions in aged and community
care in financial year ending 30 June 2019.
60 | TALi Digital Limited Annual Report 2020
30. Segmented reporting (continued)
Reconciliations of information on reportable segments to IFRS measure
Revenues
Total revenue and income for reportable segments
Total revenue and income for other segments
Consolidated revenue
Profit before Tax
2020
$
2019
$
651,510
941,795
-
-
651,510
941,795
Total profit before tax for reportable segments
Profit before tax for other segments
(3,397,938)
(2,944,443)
(135)
-
Consolidated profit before tax from continuing operations
(3,398,073)
(2,944,443)
Assets
Total assets for reportable segments
8,571,441
5,155,107
Assets for other segments
Equity accounted investees
Other unallocated amounts
Consolidated total assets
Liabilities
-
-
-
-
-
-
8,571,441
5,155,107
Total liabilities for reportable segments
2,904,885
2,888,012
Liabilities for other segments
Other unallocated amounts
Consolidated total liabilities
31. Group entities
Significant subsidiaries for the year ended:
-
-
-
-
2,904,885
2,888,012
Country of incorporation
Ownership interest %
AVI Capital Pty Ltd*
TALi Health Pty Ltd
ACN 158 797 936 Pty Ltd^
TALi Digital INC.**
TALi Digital (UK)
Limited***
Australia
Australia
Australia
USA
United Kingdom
2020
-
100
100
100
100
2019
100
100
100
-
-
*Deregistered on 13 February 2020
** Incorporated on 16 October 2019
*** Incorporated on 21 June 2020
^ Formerly Newly Pty Ltd.
TALi Digital Limited Annual Report 2020 | 61
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2020
32. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2020, the parent entity of the Group was TALi Digital Limited.
Results of parent entity
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income for the period
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity:
Share capital
Retained earnings
Total equity
2020
$
2019
$
(1,090,111)
(4,093,183)
-
-
(1,090,111)
(4,093,183)
8,798,016
9,542,092
1,085,555
2,068,734
2,093,603
4,143,974
1,461,637
2,177,488
203,195,113
194,976,507
(195,721,755)
(193,093,907)
7,473,358
1,966,486
33. Discontinued operations
On 18 October 2018 Newly Pty Ltd, (subsequently renamed ACN 158 797 936 Pty Ltd) a fully owned subsidiary
of TALi Digital, sold its entire business as a going concern. In consideration for the sale the consolidated entity
received 600 fully paid shares at $1,000 per share amounting to $600,000 in Healthcarelink Group Pty Ltd, plus
the right to earn out shares.
34. Deferred income
Current
Non-current
Total deferred income
2020
$
261,642
1,424,274
1,685,916
2019
$
187,659
1,210,663
1,398,322
Due to the deferral of the TALi TRAIN, DETECT and MAINTAIN Development Cost Intangible Assets amortisation
as indicated in Note 13, the related deferred R&D grant income and CRC-P grant revenue has been bought into
account over the amortisation period. This has resulted in $477,432 (2019: $354,156) of R&D grant income and
$97,215 (2019: $319,193) in CRC-P grant income being recognised in the Profit or Loss for the year ended 30 June
2020. $1,092,186 (2019: $882,735) of R&D grant income relating to future periods and $593,730 (2019: $515,578) in
Grant revenue has been classified as Deferred Income.
62 | TALi Digital Limited Annual Report 2020
35. Finance income and finance costs
Recognised in profit or loss
Interest income on cash and cash equivalents
Net gain on disposal of available - for-sale financial assets
transferred from equity
Finance income
Net change in fair value of financial assets at fair value through
profit or loss:
Available for sale
Unwinding on lease liability
Interest charge on loan
Finance income (costs)
Net finance income/(costs) recognised in profit or loss
2020
$
29,566
-
29,566
-
(15,097)
(28,831)
(43,928)
(14,362)
2019
$
27,886
2,137
30,023
(2,607)
(13,860)
(11,943)
(28,410)
1,613
TALi Digital Limited Annual Report 2020 | 63
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2020
1. In the opinion of the directors of TALi Digital Limited (‘the Company’):
(a) the consolidated financial statements and notes and the remuneration disclosures that are contained
in the Remuneration Report in the Directors’ Report, set out on pages 16 to 63, are in accordance with
the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
(b) the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2(a); and
(c) there are reasonable grounds to believe that the Company and the group entities will be able to pay
its debts as and when they become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Managing Director and Financial Controller for the financial year ended 30 June 2020.
Dated at Melbourne this 30th day of September, 2020.
This report is made with a resolution of the directors.
Sue MacLeman
Chair
64 | TALi Digital Limited Annual Report 2020
“
I have found the TALi DETECT and
TALi TRAIN programs have both provided
really useful and relatable information
to parents about their children’s ability
to attend to and improve across the
domains of attention. The short structured
daily sessions, individualised challenges
and feedback were really useful to build
skills, and stay on track with my families.
Liz Barty
Speech Pathologist
Eastside Speech Solutions
TALi Digital Limited Annual Report 2020 | 65
TALi Digital Limited Annual Report 2020 | 65
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3000
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8329 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of TALi Digital Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of TALi Digital Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(b) in the financial statements, which indicates that the Group incurred a net loss of $3,397,938
during the year ended 30 June 2020, and for the period ended on this date, the Group’s cash flow for the year was an outflow
of $2,717,938. There also remains significant uncertainty around the breadth and duration of government policy and
regulations governing individuals and businesses due to COVID-19. As stated in Note 2(b), these events or conditions indicate
that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
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Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
66 | TALi Digital Limited Annual Report 2020
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
Intangibles assets – note 13
The Group has intangible assets with a written down value of
$3,322,432 as at 30 June 2020, which consist of both
acquired intangibles and internally generated intangibles.
The acquired assets consist of a health license and intellectual
property relating to the TALi technology acquired as part of the
purchase of TALi Health Pty Ltd in 2016. Internally generated
intangibles consists of capitalised development costs relating
to the TALI Train, TALi Detect and TALi Maintain products
which the Company has developed.
In accordance with AASB 138 Intangible Assets only directly
attributable costs incurred during the development phase may
be capitalised and recognised as an asset. AASB 136
Impairment of Assets requires that an entity shall assess at
the end of each reporting period whether there is any
indication that an asset may be impaired. If any indication
exists, the entity shall estimate the recoverable amount of the
asset.
This area is a key audit matter due to the level of judgement
and estimation required in determining the recoverable
amounts and whether the requirements of AASB 138 and
AASB 136 are satisfied.
R&D Incentives – note 10
The Group received a 43.5% refundable tax offset of eligible
expenditure under the Research and Development (R&D) Tax
Incentive scheme if its turnover is less than $20 million per
annum, provided it is not controlled by income tax exempt
entities.
An R&D plan is filed with AusIndustry in the following financial
year, and based on this filing, the Group receives the incentive
in cash. Management has performed a detailed review of the
Group’s total research and development expenditure to
determine the potential claim under the R&D tax incentive
legislation.
The process in calculating the R&D tax rebate requires
judgment and specialised knowledge in identifying eligible
expenditure which give rise to anticipated R&D tax incentives.
Balances in relation to R&D tax incentives are therefore
considered to be a key focus area as part of our audit.
How our audit addressed the key audit matter
Our procedures included, amongst others:
Assessing the company's accounting policy for
capitalisation of development costs for adherence to AASB
138;
Agreeing a sample of additions to supporting documents
such as time records or invoices from third party suppliers
and assessing whether the amounts met the recognition
criteria in AASB 138;
Evaluating the assumptions utilised by management which
support the generation of future economic benefits from the
capitalised costs;
Considering other qualitative considerations (e.g. market
valuation of the company compared to its net assets, recent
trial results, other public information available or press
releases) in order to challenge management’s assessment
of impairment indicators;
Obtaining supporting documentation to demonstrate
ongoing use of the asset; and
Assessing the adequacy of the disclosures within the
financial statements.
Our procedures included, amongst others:
Comparing the estimates made in prior year to the amount
of cash received after lodgement of the R&D tax claim;
Utilising an internal R&D tax specialist to review the
expenditure methodology employed by management;
Obtaining FY20 R&D rebate calculations performed by
management and performing the following audit
procedures:
–
–
–
–
Developing an understanding of the model, identifying
and assessing key assumptions in the calculation;
Verifying included expenses agree to the underlying
supporting documentation;
Testing the mathematical accuracy of the accrual;
and
Considering the nature of the expenses against the
eligibility criteria of the R&D tax incentive scheme to
form a view about whether the expenses included in
the estimate were likely to meet the eligibility criteria.
• Reviewing disclosures in the notes to the financial
statements to ensure adequacy.
TALi Digital Limited Annual Report 2020 | 67
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 16 to 25 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of TALi Digital Limited, for the year ended 30 June 2020 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 30 September 2020
68 | TALi Digital Limited Annual Report 2020
Corporate Governance Statement
The Board of Directors of TALi Digital Limited is responsible for establishing the corporate governance framework
of the Group having regard to the ASX Corporate Governance Council published guidelines (3rd edition) as
well as its corporate governance principles and recommendations. The Board guides and monitors the business
and affairs of TALi Digital Limited on behalf of the shareholders by whom they are elected and to whom they are
accountable.
In accordance with ASX Listing Rule 4.10.3 the Company’s 2020 Corporate Governance Statement can be found at
https://talidigital.com/investors-centre/governance/
TALi Digital Limited Annual Report 2020 | 69
Shareholder Information
Share capital
As at 22 September 2020 the share capital of the company was issued and paid up capital 749,305,218 ordinary shares.
Number
Number of shares quoted on the Australian Securities Exchange Limited 749,305,218.
TALi Digital Limited ordinary shares have been traded on ASX Limited since 28th December 2019 (former name Novita
Healthcare Limited) and trade under the ASX code TD1. Melbourne is the Home Exchange. The Company’s securities are
not quoted on any other stock exchange
1
2
3
4
5
6
6
7
8
9
10
11
12
13
14
15
16
16
16
17
18
19
19
20
Position Holder name
Grey Innovation Holdings Pty Ltd
Mondo Electronics Pty Ltd
Moonah Capital Pty Ltd
Sailors Of Samui Pty Ltd
Mr Donal Francis O'sullivan
Ten Goals Pty Ltd
Puntero Pty Ltd
Mrs Shweta Priyadarshini
Holding
30,909,488
21,000,000
17,000,000
14,800,000
11,000,000
10,000,000
10,000,000
9,850,000
The King's Ransom (Vic) Pty Ltd
9,223,100
Mr John George Thomas & Mrs Angela Thomas
Tg Sfund Pty Ltd
Mr Carmelo Cannavo
Corwest Pty Ltd
A C N 154 894 256
Kembla No 20 Pty Ltd
Citicorp Nominees Pty Limited
Citos Super Pty Ltd
7,480,500
7,407,679
7,320,000
6,415,560
6,333,333
6,126,724
6,090,333
6,000,000
Jmt Investment Group Vic Pty Ltd
6,000,000
Mr Murray John Turner
Crestpond Pty Limited
Teefish Super Pty Ltd
Jmt Investment Group Vic Pty Ltd
Cvcv Pty Ltd
Mr Brett Fielder
Totals
Total issued capital
6,000,000
5,500,000
5,350,000
5,000,000
5,000,000
4,453,762
224,260,479
749,305,218
70 | TALi Digital Limited Annual Report 2020
% IC
4.13%
2.80%
2.27%
1.98%
1.47%
1.33%
1.33%
1.31%
1.23%
1.00%
0.99%
0.98%
0.86%
0.85%
0.82%
0.81%
0.80%
0.80%
0.80%
0.73%
0.71%
0.67%
0.67%
0.59%
29.93%
100.00%
Distribution of shareholders as at 22 September 2020
Holding ranges
Holders
Total units
% Issued share capital
Above 0 up to and including 1,000
Above 1,000 up to and including 5,000
Above 5,000 up to and including 10,000
Above 10,000 up to and including 100,000
Above 100,000
Totals
373
222
233
1,194
849
2,871
107,546
646,177
1,854,099
50,569,592
696,127,804
749,305,218
0.01%
0.09%
0.25%
6.75%
92.90%
100.00%
The number of shareholders as at 22 September 2020 with less than a marketable parcel of $500 worth of shares,
based on the market price as at that date ($0.026 per share), was 1,099, with total 6,577,954 amounting to 0.88% of
Total Shareholding.
Corporate Governance Statement
In accordance with ASX Listing Rule 4.10.3 the Company’s 2020 Corporate Governance Statement can be found at
https://talidigital.com/investors-centre/governance/
Voting rights
The voting rights attached to ordinary shares are set out in Rule 5(f) and 40 of the Company’s Constitution. In broad
summary, but without prejudice to the provisions of those Rules, each shareholder present at a general meeting in
person or by duly appointed representative, proxy or attorney.
(a) On a show of hands, has one vote except if a shareholder has appointed more than one person as a
representative, proxy or attorney, in which care none of those persons is entitle to vote or if a person is
entitled to vote in more than one capacity, that person is entitled to only one vote; and
(b) On a poll, has one vote for each fully paid share held and for each other share held, has a vote in respect
of the share equivalent to the proportion that the amount paid on that share is of the total amounts paid
and payable on that share at the time a poll is taken but no amount paid on a share in advance of calls
shall be treated as paid on that share.
As at 22 September 2020, the Options issued over unissued Ordinary Shares totalled 35,474,390 represented by
4,100,000 granted to employees under the ESOP, 13,600,000 issued to Directors, and 17,774,390 issued to external
suppliers for services rendered. There are no voting rights attached to either the Options or the underlying unissued
Ordinary Shares.
Issued capital report as at 22 September 2020
Security
code
Security
name
CHESS
holders
CHESS
holdings
% CHESS
holdings
Issuer
holders
Issuer
holdings
% Issuer
holdings
Total
holders
Total
holdings
TD1
Ordinary
fully paid
shares
2,619 722,115,931
96.37%
252
27,189,287
3.63%
2,871 749,305,218
Total
2,619 722,115,931
252
27,189,287
2,871 749,305,218
TALi Digital Limited Annual Report 2020 | 71
Shareholder Information continued
Officers
Managing Director: Glenn Smith
Company Secretary: Stephen Denaro – Appointed 21 February 2019
Registered Office
TALi Digital Limited
Level 5, 19 William Street
Share Registry
Automic Registry Services
Level 3, 50 Holt Street
Cremore, Victoria 3121 Australia
Surry Hills, New South Wales 2010 Australia
Telephone
+61 3 9192 9937 | 1300 082 013
Telephone
1300 288 64
Website
talidigital.com
Website
automic.com.au
Email
info@talidigital.com.au
Email
hello@automic.com.au
Securityholder Information
You can gain access to your security holding information in a number of ways. The details are managed via
the Company’s Registrar, Automic Registry Services, and can be accessed as outlined below. Please note your
Securityholder Reference Number (SRN) or Holder Identification Number (HIN) is required for access.
Investor Phone Access
Provides telephone access, call 1300 288 664 to speak to an operator.
Internet Account Access
Securityholders can access their details via the internet. Automic provides access via its InvestorShare online
service. Go to investor.automic.com.au to view your information.
Changing Shareholder Details
Changes to your name or address must be advised in writing to Automic Registry Services. If you are sponsored by a
broker, your notice in writing must be sent to your sponsoring broker.
TALi Digital Limited Publications Mailing List
The Annual Report is a major source of information about the Company. Shareholders who do not wish to receive
this publication can assist the Company to reduce costs by advising Automic Registry Services in writing or doing so
online using http://investor.automic.com.au/#/home. Shareholders will continue to receive all other shareholder
information, including the Notice of Annual General Meeting and Proxy Form. The Annual Report. Other releases
and general Company information are also available on the Company’s website at www.talidigital.com.au
Investor Relations
If you have any questions or issues regarding your shareholding, please contact Automic Registry Services
on 1300 288 664.
72 | TALi Digital Limited Annual Report 2020
TALi Digital Limited
ABN 53 108 150 750
Level 5, 19 William Street
Cremorne, Victoria 3121 Australia
T +61 3 9192 9937 | 1300 082 013
talidigital.com.au