Annual Report
2021
Contents
Corporate Directory
Chairman’s Report
Chief Executive Officer’s Report
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent auditor’s review report to the members of TALi Digital Limited
Corporate Governance Statement
Shareholder Information
3
4
6
8
17
28
29
30
31
33
34
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69
70
2 | TALi Digital Limited Annual Report 2021
Corporate Directory
Directors
Ms Sue MacLeman
Mr Jefferson Harcourt
Dr David Brookes
Mr Glenn Smith
Company secretary
Mr Stephen Denaro
Registered office
Level 5,
19 William Street
Cremorne, Victoria 3121
Principal place of business
Level 5,
Share register
19 William Street
Cremorne, Victoria 3121
Automic Registry Services
Level 3, 50 Holt Street
Surry Hills, New South Wales 2010 Australia
Telephone: 1300 288 664
Website: automic.com.au
Email: hello@automic.com.au
Auditor
Grant Thornton Audit Pty Ltd
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3000
Stock exchange listing
TALi Digital Limited shares are listed on the
Australian Securities Exchange.
ASX code
TD1
Website
www.talidigital.com
TALi Digital Limited Annual Report 2021 | 3
The Times Group is the largest media conglomerate in
India and engages with 550 million people each month
via various social networking applications. Whilst the
planned direct-to-consumer roll-out of TALi in this market
via the Times Group has commenced, the initial timeframes
targeted were hampered by the COVID-19 surge in this
region earlier this year. We do remain confident of the
potential for TALi’s products in this large addressable
market and will update shareholders of our progress
once the full marketing launch occurs later in the year.
We have continued to invest in our IP portfolio throughout
the period and have strengthened our position in line
with our global channel partner strategy. During the
year we were granted our first patent in Japan, with this
attractive region being the world’s third largest market for
ADHD treatments and growing at more than 20 percent
annually. We also further strengthened our IP position in
China and Australia. It is TALi’s patents and trademarks
across multiple jurisdictions, including the US, that we
see as pivotal in delivering international partnerships,
and firmly places our Company at the centre of the
digital therapeutics ecosystem.
From a financial perspective, our Balance Sheet is solid
and we have sufficient funding to execute our global
partnership growth plans. During FY21, we conducted a
successful capital raise of $3.85m and welcomed a range
of new institutional investors onto our share register as well
as recognised the continued support from existing holders.
Strengthened Advisory Board
During the year we welcomed the contributions from our
new Advisory Board members Ms Sarah Michel, Dr Phil
Lambert, Professor Con Stough and Dr Scott Collins. The
Advisory Board has been instrumental in guiding our
scientific programs and supporting the team as we begin
to scale in major global markets. Their expertise and
deep experience is highly valuable as we commercialise
our digital therapeutic platform and I look forward to
their ongoing contribution in FY22.
Chairman’s Report
Dear Shareholders,
I am pleased to present TALi Digital’s Annual Report for
the 2021 financial year.
The past 12-months have been transformative for our
Company as we have executed a number of important
milestones on our path toward commercialisation of
our TALi technology platform in key global markets.
Inattention and cognitive impairment right across all
ages continues to be a globally growing diagnosis,
and solutions outside of traditional pharmacological
treatments are growing rapidly, underpinning our
Company’s goal to usher in the next generation of
digital health solutions.
Executing on global growth strategy
During the year our team remained dedicated to
executing on our global growth plans. We recently
announced a landmark deal for our Company, executing
a Strategic Licensing Agreement with global leader Akili
Interactive Labs, Inc. (Akili). Under the agreement, Akili
has become the exclusive commercialisation partner for
TALi paediatric cognition products in the US market.
Under the agreement TALi will receive milestone payments
and royalties upon satisfaction of agreed outcomes.
Akili is a global leader in digital therapeutics having
commercialised the first FDA-cleared and CE-marked
video game treatment to improve attention in children
ages 8–12 years with Attention Deficit Hyperactivity
Disorder (ADHD). In this regard, Akili and TALi’s
technologies are highly complementary and now cover
the full age-range in children, given TALi’s technology
is clinically validated and designed to target and
improve attention in the early childhood years of those
aged 3–8. Importantly, both Akili and TALi also have a
shared focus on rigorous clinical validation and high-
end user experience, and are committed to changing
the way people think about medicine and the role digital
therapeutics can play in healthcare.
To execute an exclusive partnership with a group of
the calibre of Akili also validates the market potential
of the TALi technology and provides the foundation for
additional global partnerships in other regions, a key
area of strategic focus for our Company in the year ahead.
Earlier in the period we also announced a partnership
for the Indian market, executing an investment and
advertising agreement with Brand Capital International,
the strategic investment arm of The Times Group.
4 | TALi Digital Limited Annual Report 2021
We are in the early stages of our global expansion
journey with our recent US licensing agreement putting
us in a good position to progress developments in other
markets. These opportunities underline the potential for
long term sustainable revenues, ensuring the Company
is well positioned to deliver value for shareholders in the
coming years.
I would particularly like to thank our team for their hard
work and efforts during these difficult and challenging
times. I would also like to thank my fellow Directors for their
guidance and insights throughout the year. And to our
shareholders, thank you for your continued support and I
look forward to updating you on our progress as we head
into a new and exciting financial year for our Company.
Yours sincerely,
Sue MacLeman
Chair
TALi Digital Limited Annual Report 2021 | 5
TALi Digital Limited Annual Report 2021 | 5
Chief Executive Officer’s Report
Clinical development and trials collecting US based
paediatric data will be facilitated by Duke Clinical
Research Institute (DCRI). DCRI and TALi have an existing
collaboration and protocols for the trials are currently
being prepared by DCRI. Trial commencement is
projected to occur this calendar year. The next stage will
be for TALi to follow a submission process with the FDA.
Once cleared, TALi’s technology platform has the
potential to lead to a multi-decade annuity revenue
stream in the US market as no additional regulatory
approvals in the US will be required for this paediatric
ADHD product (based on current US legislation/
regulations). First sale and subsequent revenue
milestones will be paid from Akili to TALi on revenues
targets being achieved. Royalty payments will be paid on
all sales of the TALi products in the US market on-top of
milestone payments.
India market penetration
In December 2020, TALi announced that it had signed
an investment and advertising agreement with Brand
Capital International (BCI), the strategic arm of Bennett,
Coleman and Company Ltd. (The Times Group), to
facilitate TALI’s entry and growth in the strategically
important Indian market.
As part of the agreement, The Times Group invested
US$2 million in TALi to provide funds for our Company
to accelerate the roll out of products in India. These
funds have been deployed towards TALi’s marketing
communication in the Indian market through the Times
Group’s media assets, to allow TALi to grow its direct-to-
consumer reach.
Since TALi DETECT and TALi TRAIN were made available
via the iOS and Android app stores the initial consumer
engagement has been strong, with over 25,000
downloads from the Google Play store. The full ‘live-
launch’ of the TALi apps and the full roll out of the print
and radio campaigns is scheduled for later in 2021, given
the surge in COVID-19 cases throughout India earlier this
year. India remains a very relevant market for TALi with a
direct opportunity of approximately 30 million children in
the TALi age range.
Dear Shareholders,
During 2021 we were keenly focused on broadening the
reach of our TALi platform in a range of markets and
progressing our global partnership growth strategy and
I am very pleased to report we delivered on several
major milestones over the past year, including entry into
the US and Indian markets.
OPERATIONAL REVIEW
Strategic licensing agreement with Akili Interactive for
large and growing US-market
On 18 August 2021, TALi announced it had entered into a
Strategic Licensing Agreement with Akili Interactive Labs,
Inc. (Akili), a global leader in the digital therapeutics
space. Under the Agreement, our Company will receive
total future contingent milestone payments of A$51M
(US$37.5M)1 as well as royalties on future sales. Akili now
holds a licence for TALi’s market leading technology to
become the exclusive commercialisation partner for all
paediatric cognition products in the US.
This Agreement is transformational and highly strategic
for TALi. Not only is the Attention Deficit Hyperactivity
Disorder (ADHD) treatment market in the US the largest in
the world (with an estimated value of US$10B annually),
it also provides significant validation for our technology
given Akili is a global leader in this field. Akili has
commercialised the first FDA-cleared and CE-marked
video game treatment, EndeavorRx®, as a Prescription
Digital Therapeutic (“PDT”) to improve attention function
in children with ADHD. Akili are also backed by leading
investment houses and pharmaceutical companies,
having recently completed a US$160M funding round
led by top-tier global investment management group,
Neuberger Berman Funds.
TALi’s platform builds on Akili’s product portfolio and
complements it flagship product EndeavorRx®, which
targets children with ADHD aged between 8–12 years.
Together Akili and TALi’s technology platforms will now
cover the age spectrum of childhood from 3–12 years.
The Agreement is also structured to leverage each
organisation’s expertise. TALi will lead the clinical and
regulatory clearance process, while Akili will lead
commercialisation of the approved paediatric digital
solutions in the United States. The initial milestone
payment to TALi will be US$2m upon FDA clearance.
TALi will also receive payments from Akili for clinical
development in addition to the milestone payments.
1 Exchange rate as at 18th August 2021
6 | TALi Digital Limited Annual Report 2021
Enhanced IP portfolio protection
Positive outlook for FY22
In FY22, the focus is on further progressing the Company’s
partnership growth strategy. Commercial discussions
are ongoing with potential partners in Japan and South
Korea and if successful these are expected to position
TALi to generate additional value from our clinically-
validated technology platform. These discussions also
support TALi in its broader goal to build sustainable long-
term recurring revenues from key global target markets.
TALi is also currently engaged in a evaluating a research
program exploring the potential for its technology
platform to be expanded to other cognitive decline
indications, more common in populations with Mild
Cognitive Impairment (MCI). MCI has been found to often
been a precursor to recognising Alzheimer’s disease and
other forms of dementia. Many conditions associated
with MCI are not able to be screened with conventional
imaging, such as MRI scan, and require a functional test
to assess the reduction in executive cognitive function.
Finally, I would like to thank our shareholders for
your continued commitment, and we look forward to
delivering further strategic milestones in the year ahead.
Yours sincerely,
Glenn Smith
Managing Director
TALi’s IP portfolio was further strengthened in FY21,
with the granting of its first Japanese patent by the Japan
Patent Office. The patent has an expiry date of March 31,
2035 and the claims of the patent cover the TALi DETECT®
and TALi TRAIN® products. This represents a significant
market opportunity given non-pharmaceutical based
approaches are preferred treatment methods in this region.
TALi was also recently issued trademark coverage in
China from the China Trade Mark Office in relation to its
core TALi TRAIN® and TALi DETECT® products.
This trademark has been classified under Acceptance
Class 10 — a category that includes goods for surgical,
medical, dental and veterinary purposes.
In July 2021, TALi was granted its first Australian patent
by IP Australia. This patent covers TALi TRAIN® and TALi
DETECT® as well as next generation solutions currently in
development, and has a continuance period of 20-years
from the priority date March 31, 2015.
Australian market update
TALi is currently focused on further raising awareness
of its products in the healthcare market in Australia
and continues to make developments to enhance the
user experience between consumers and healthcare
professionals. During the period, the Company initiated a
shift towards seeking reimbursement for the TALi solution,
which initially focuses on market data collection as
opposed to direct revenue generation.
Compiling a strong set of data will help us to progress
plans such as the undertaking of a reimbursement
submission (MSAC and/or PBS submission) for TALi to be
potentially listed on the Medicare Benefits Scheme (or
other relevant scheme) in Australia as a reimbursable
diagnostic aid and therapeutic.
Financial position
The Company’s cash at bank as at 30 June 2021 was
$2.7 million, allowing the Company to continue to pursue
growth via its global partnership model. In February
we received strong support from new and existing
shareholders raising $3.85 million, with funds raised
partly used to support TALi’s recent entry into the
US-market via its Agreement with Akili.
The Company reports total revenue and income of
$548,905 and a net loss of $4,858,273 for the period.
Operating, financing and investing activities incurred a
net cash outflow for the year of $1,202,457.
TALi Digital Limited Annual Report 2021 | 7
Directors’ Report
FOR THE YEAR ENDED 30 JUNE 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the ‘Group’) consisting of TALi Digital Limited (referred to hereafter as the ‘Company’ or ‘parent entity’)
and the entities it controlled at the end of, or during, the period ended 30 June 2021.
Directors
The following persons were directors of TALi Digital Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Name and independence status
Period of office and special responsibilities
Sue MacLeman
Independent Non-Executive Director & Chair
Appointed September 6, 2018 Director and Chair since
September 6, 2018. Member of the Audit Committee.
Jefferson Harcourt
Non-Executive Director
David Brookes
Non-Executive Director
Glenn Smith
Managing Director
Appointed February 25, 2016. Member of the Audit
Committee.
Appointed on June 29, 2020. Simultaneously Dr Brookes
was appointed the Chair of the Audit Committee.
Appointed Chief Executive Officer October 3, 2017 and
appointed Managing Director May 10, 2018.
8 | TALi Digital Limited Annual Report 2021
Principal activities
INDIAN MARKET PARTNERSHIP & ROLLOUT
TALi [TALi Digital Limited (ASX: TD1)] is a digital health
company delivering diagnostic and therapeutic solutions
for cognitive function and behaviour. The Company has
built a platform technology, the first iteration of which
targets cognitive attention skills during early childhood
through its breakthrough evidence a video-gamed-based
TALi screening (‘DETECT’) and training (‘TRAIN’). This
first to market and user experience focused technology
is complementary to existing diagnosis and therapy
placing TALi at the forefront of patient experience and
early intervention thus positioning the business as an ideal
partner in the global digital health sector.
Innovations that target cognitive skills to deliver non-
invasive early interventions underpin the TALi platform
technology. This innovation focus is allowing the Company
to deliver a series of product developments in ADHD
(Attention Deficit Hyperactivity Disorder) and ASD (Autism
Spectrum Disorder) for predictive diagnosis and treatment
for all age groups along with a core research program
exploring applications for populations afflicted with
Mild Cognitive Decline (MCI has been found to often
been a precursor to recognizing Alzheimer’s disease and
other forms of dementia). TALi solutions aim to deliver
foundational advances in human cognitive function and
behaviour only dreamt of a few short years ago.
TALi is 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
STRATEGIC LICENCING AGREEMENT WITH AKILI
During FY21 TALi made significant progress toward the
progression of its global partnership strategy, delivering
on several key milestones and subsequent to the reporting
period announcing a Strategic Licensing Agreement
(Agreement) for paediatric cognition products in the US
market with Akili Interactive Labs, Inc. (Akili). Post the
period an agreement was entered into by the parties (see
ASX announcement on 18 August 2021) under which TALi
will receive $51 million (US$37.5 million) in total future
contingent milestone payments plus royalties on potential
revenues.
This Agreement is transformational and highly strategic
for the Group given the paediatric cognitive treatment
market in the US is the largest in the world. In addition,
the Agreement provides significant validation for the
Group’s technology platform and is expected to provide
the foundation for partnerships in other regions.
In December 2020, the Company executed an investment
and advertising agreement with Brand Capital International
(BCI), the strategic arm of Bennett, Coleman and
Company Ltd. (The Times Group), to facilitate TALI’s entry
and growth into the strategically important Indian market.
As part of the agreement, The Times Group invested US$2
million in the Company to provide funds for the Group to
accelerate the roll out of products in India. These funds
have been deployed towards the Group’s marketing
and advertising program in the Indian market through
the Times Group’s media assets, to allow TALi to grow its
direct-to-consumer reach.
Soft-launch activities commenced in the Indian market
in April and since this time initial consumer engagement
with TALi products has been strong, with over 25,000
downloads from the Google Play store. The full ‘live-
launch’ of the TALi apps and the full roll-out of the print
and radio campaigns has been delayed and is scheduled
for later in 2021, given the surge in COVID-19 cases
throughout India earlier this year.
AUSTRALIAN MARKET UPDATE
Over the 2021 financial year, the Group initiated a shift
towards seeking reimbursement for the TALi solution,
which initially focuses on market data collection as
opposed to direct revenue generation in order to build a
more sustainable and longer-term revenue stream.
Compiling a strong set of data is expected to help progress
plans such as the undertaking of a reimbursement
submission (Medicare Benefits Scheme [MBS] and/or
Pharmaceutical Benefits Scheme [PBS]) for TALi to be
potentially listed on the MBS and/or PBS in Australia. The
Company expects real world data collected from its initial
Australia roll-out combined with clinical development data
from trials undertaken by Duke Clinical Research Institute
in the US, under its Agreement with Akili, to support the
Australian market process.
FINANCIAL REVIEW
The statement of profit or loss and other comprehensive
income shows a loss of $4,858,273 (2020: $3,397,938)
for the year. The Group has no bank debt. As at 30 June
2021 the Group had a cash position of $2,726,518 (2020:
$3,945,408). Operating, financing and investing activities
incurred a net cash outflow for the year of $1,202,457
(2020: inflow $3,603,974).
Advertising and promotion expenses for the year ended
30 June 2021 were $885,247 (2020: $342,132) with the
increase largely associated with the Group’s soft-launch
entry into the Indian market via its advertising agreement
with The Times Group. As at 30 June 2021 the Group has
TALi Digital Limited Annual Report 2021 | 9
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2021
$1,973,180 in prepaid advertising credits with The Times
Group, which will be utilised as the Group executes it’s
Indian advertising and marketing plan.
The Group continues to pursue non-dilutive funding
including government funded incentive programs such
as the R&D Tax Incentive (RDTI) and the Export Market
Development Grant (EMDG). At 30 June 2021 the Group
has a receivable for the estimated RDTI refund for the year
ended 30 June 2021 of $795,874 (2020: $682,348) and
during the year the Group received an EMDG of $100,000
(2020: nil).
During the year the Group received $50,000 (2020:
$50,000) of COVID-19 related government PAYGW cash
booster payments. This $50,000 was recorded as income
in FY20. The Group also received $171,000 of JobKeeper
cash payments (2020: $87,000). Of the $171,000, $42,000
was recorded as income in FY20.
COVID-19
The Company highlights that the impact of the COVID-19
pandemic and associated measures (e.g., travel
restrictions, lockdowns, remote work and social distancing)
has been of a significant nature to the operations of TALi.
This has been reflected in the delayed timing of execution
of the agreement between TALi and Akili to progress
the medical use of the TALi technology. Similarly, the
rescheduling of launch activities for the non-medical use
(consumer and education channels) of the TALi technology
in India has been necessary.
OUTLOOK
In FY22, TALi is focused on progressing the Group’s
partnership growth strategy. Commercial discussions are
ongoing with potential partners in a range of international
markets including Japan and South Korea.
This ongoing work, as well as the commencement of Akili
partnership activities such as the clinical development
program in the current calendar year, ensures the Group is
well positioned to progress its growth strategy.
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 136 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. As a digital health
solution TALi provides logistical advantages over
traditional face to face intervention methods to deliver
health care into the home providing significant cost
savings and better outcomes for children.
10 | TALi Digital Limited Annual Report 2021
Capital and corporate structure
On 8 December 2020 the Company announced an investment of $2.7million ($2million USD) by Brand Capital
International (BCI), the strategic investment arm of Bennett, Coleman and Company Ltd (the Times Group). On 6
January 2021 the Company issued 81,800,594 shares at $0.033 per share.
On 16 February 2021 the Company announced a Placement to raise $3.85million before costs and a proposed issuance
of options to Placement participants and to the Sole Lead Manager. Subject to shareholder approval, the Company will
issue one free attaching option for every 2 new shares purchased in the Placement. The attaching options will have an
exercise price of $0.09 per share and will expire 12 months after the date of issue. In addition, Subject to shareholder
approval, the Company also proposed to issue the following options to Taylor Collison (as Sole Lead Manager on the
Placement or its nominee):
(a) 5 million options with exercise price of $0.09 per share and expiring 18 months after completion of the Placement;
(b) 5 million options with exercise price of $0.12 per share and expiring 24 months after completion of the Placement;
(c) 5 million options with exercise price of $0.15 per share and expiring 24 months after completion of the Placement.
On 22 February 2021 the Company issued 98,717,948 ordinary shares at $0.039 per share.
On 30 June 2021 the Company issued 2,082,029 Ordinary shares upon exercise of unlisted options.
Full details of movements in share capital for the year are detailed in note 20 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 &
consultant options:
Employee options:
13,600,000
22,500,000
7,188,883
10,200,000
2,100,000
Total 55,588,883
$0.030
$0.030
$0.090
$0.030
21 November 2022
24 November 2025
30 June 2022
21 November 2022
$0.015
31 October 2024
On 22 February 2021, 49,358,974 options were provisionally issued to shareholders that participated in the placement
and 15,000,000 options were provisionally issued to the Broker of the placement. The options were provisionally issued
as they are required to be approved by shareholders at a shareholder meeting.
TALi Digital Limited Annual Report 2021 | 11
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2021
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 has been a 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 the Chair of MTPConnect (Medical Technology
and Pharmaceuticals Industry Innovation Growth Centre MTPII-GC Ltd), Chair of
Tali Digital Ltd (ASX:TD1), Non-Executive Director of Palla Pharma Ltd (ASX:PAL),
Non-Executive Director at Anatara Lifesciences Ltd (ASX:ANR), Non-Executive
Director of Planet Innovation Holdings Ltd and Non-Executive Director of Omico.
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.
Mr G Smith sits on a number of private technology company boards and is a
Non-Executive Director of HitIQ Limited (ASX:HIQ).
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 and held Board positions in a number
of ASX listed biotechnology companies, including as Chairman of genomics
solutions company, RHS Ltd, which was acquired by PerkinElmer Inc (NYSE:PKI)
in June 2018. He is currently the Non-Executive Chairman of Anatara Therapeutics
Ltd (ASX: ANR) and of Factor Therapeutics Ltd (ASX:FTT), and a Non-Executive
Director of Island Pharmaceuticals Limited (ASX:ILA). He was the Non-Executive
Chairman of the unlisted Better Medical Group until that company was acquired
by private equity firm Livingbridge in January 2021.
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.
12 | TALi Digital Limited Annual Report 2021
Company secretary
Mr 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
3,400,000
22,500,000
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 J Harcourt
Mr G Smith
Dr D Brookes
Board meetings
Audit committee meetings
Attended
Held1
Attended
Held1
12
12
12
12
12
12
12
12
2
2
2
2
2
2
2
2
1 Held: represents the number of meetings held during the time the director held office.
TALi Digital Limited Annual Report 2021 | 13
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2021
Dividends
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
There were no significant changes in the state of affairs
of the Group during the financial year.
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
On 20 July 2021, 6,000,000 options were issued to
employees under the employee incentive scheme.
On 20 July 2021, 900,000 options previously issued to
employees were cancelled.
On 18 August 2021, the Company announced it
had entered into a Strategic Licensing Agreement
(Agreement) with Akili Interactive Labs, Inc., a global
leader in the digital therapeutics space. Under the
Agreement, the Company will receive total milestone
payments of up A$51 million (US$37.5 million) as well as
royalties on future sales.
On 28 September 2021 the Company received the FY21
income tax return refund of $795,873 in relation to the
Research & Development Tax Incentive.
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.
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.
Insurance Premiums
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 subcommittee
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.
Indemnification and insurance of officers
• The establishment of committees to report on
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
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.
14 | TALi Digital Limited Annual Report 2021
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 2021
and is set out after the Directors’ report.
Non-audit services
Details of amounts paid or payable to the auditor for
non-audit services provided during the year by the
auditor are outlined in note 26 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.
TALi Digital Limited Annual Report 2021 | 15
TALi Digital Limited Annual Report 2021 | 16
16 | TALi Digital Limited Annual Report 2021
Remuneration Report — AUDITED
FOR THE YEAR ENDED 30 JUNE 2021
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 21 and 22. 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.
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
fulfill 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.
TALi Digital Limited Annual Report 2021 | 17
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2021
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.
18 | TALi Digital Limited Annual Report 2021
Service contracts
Remuneration arrangements for executives are formalised in employment agreements. The following outlines the details
of contracts with executives
Termination by
Company (death,
disablement,
redundancy etc)
Termination for
cause
Notice period
Payment in lieu of
notice
Treatment of Short-
Term incentives
Treatment of Long-
Term Incentives
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.
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 $92,295 (2020: $8,705) has been recognised in the 2021 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 later in this report.
TALi Digital Limited Annual Report 2021 | 19
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2021
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
Non-Executive Director (NED) maximum aggregate fee pool at the 2021 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.
20 | TALi Digital Limited Annual Report 2021
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.
2021:
Base
compensation
(salary and fees)
$
Bonuses /
incentives
$
Post
Employment:
Superannuation
contributions
$
Share-based
payments:
Shares and
performance
right’s issued
$
Total
compensation
$
Directors
Non-executive
Ms S MacLeman
Mr J Harcourt
Dr D Brookes
Total compensation
Executive Directors
54,788
35,000
31,963
121,751
-
-
-
-
Mr G Smith
250,000
93,750
371,751
93,750
5,205
-
3,037
8,242
23,750
31,992
-
-
20,391
59,993
35,000
55,391
20,391
150,384
70,500
438,000
90,891
588,384
TALi Digital Limited Annual Report 2021 | 21
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2021
2020:
Base
compensation
(salary and fees)
$
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
Total non-executive
compensation
Executive Directors
54,775
34,708
35,000
-
124,483
-
-
-
-
-
Mr G Smith 3
250,000
62,500
374,483
62,500
1 Appointed on 29 June 2020
2 Resigned 29 June 2020
5,204
-
-
-
5,204
25,729
30,933
-
-
-
-
-
-
-
59,979
34,708
35,000
-
129,687
338,229
467,916
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.
22 | TALi Digital Limited Annual Report 2021
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
08/10/2018
08/10/2018
24/11/2020
21/11/2022
21/11/2022
21/11/2025
22,500,000
24/11/2020
26/11/2020
$0.030
$0.030
$0.030
$0.030
Ms S MacLeman
Mr J Harcourt
Dr D Brookes
Mr G Smith
On 23 September 2020, 14,377,766 options previously issued to the CEO and Managing Director were cancelled.
During the year 22,500,000 (2020: 14,377,766) options to acquire ordinary shares were issued to the CEO & Managing
Director approved by Shareholders at the Annual General Meeting (AGM) held on 24 November 2020.
Shares issued on exercise of options and performance rights
During the financial year the Company issued nil (2020: nil) ordinary shares upon the exercise of options or
performance rights to Directors for total proceeds of nil (2020: nil). Since the end of the financial year up to the date of
this report the Company has issued nil (2020: nil) shares upon exercise of options or performance rights to Directors for
total proceeds of nil (2020: 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.
TALi Digital Limited Annual Report 2021 | 23
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2021
Number of shares held in TALi Digital Limited:
2021:
Holding of Ordinary
Shares at 1 July 2020
(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
2021
Number
Number
Number
Number
Number
Number
505,920
38,688,423
1,454,546
3,000,000
43,648,889
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
505,920
38,688,423
1,454,546
3,000,000
- 43,648,889
Directors
Ms S MacLeman
Mr J Harcourt
Mr G Smith
Dr D Brookes
Total
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
Directors
Ms S MacLeman
292,814
Mr J Harcourt
28,688,423
Mr M Simari
Mr G Smith
Dr D Brookes
Total
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
24 | TALi Digital Limited Annual Report 2021
Number of options held in TALi Digital Limited:
2021:
Balance at 1 July
2020 (or date of
appointment)
Granted as
compensation
Exercised / elapsed
Balance at 30 June
2021
Number
Number
Number
Number
6,800,000
3,400,000
14,377,766
-
-
-
-
6,800,000
3,400,000
22,500,000
(14,377,766)
22,500,000
-
3,400,000
-
3,400,000
24,577,766
25,900,000
(14,377,766)
36,100,000
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 G Smith
Dr D Brookes
Total
2020:
Directors
Ms S MacLeman
Mr J Harcourt
Mr M Simari 1
Mr G Smith
Total
1 Mr M Simari resigned 29 June 2020.
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.
TALi Digital Limited Annual Report 2021 | 25
Remuneration Report continued
FOR THE YEAR ENDED 30 JUNE 2021
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.
This report is made with a resolution of the directors.
Sue MacLeman
Chair
30th of September 2021
26 | TALi Digital Limited Annual Report 2021
TALi Digital Limited Annual Report 2021 | 27
TALi Digital Limited Annual Report 2021 | 27
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 2021, 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 2021
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.
28 | TALi Digital Limited Annual Report 2021
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2021
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Note
Revenue
Revenue from continuing operations
Other income
Total revenue and income
Expenses
Contract research and development expenses
Personnel expenses excluding share-based payment expense
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
Total expenses
Operating loss
Net finance income / (expense)
Foreign exchange gains/(losses)
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year attributable to the
owners of TALi Digital Limited
Other Total comprehensive (loss)/income
Items that will not be reclassified subsequently to profit or loss
Net change in fair value of Investments
Total comprehensive (loss)/income for the year attributable
to the owners of TALi Digital Limited
Basic earnings per share
Diluted earnings per share
4
5
21
6(a)
6(b)
7
8
9
9
2021
$
34,238
514,667
548,905
(233,632)
(2,191,833)
(92,295)
(541,501)
(35,804)
(731,408)
(19,925)
(110,131)
(236,545)
(106,265)
(885,247)
(277,479)
2020
$
47,229
574,715
621,944
36,427
(1,841,093)
(8,705)
(548,913)
(52,780)
(631,063)
(129,472)
(85,103)
(86,468)
(128,042)
(342,132)
(186,268)
(5,462,065)
(4,003,612)
(4,913,160)
(3,381,668)
(9,311)
64,198
(14,362)
(1,908)
(4,858,273)
(3,397,938)
-
-
(4,858,273)
(3,397,938)
-
(800,000)
(4,858,273)
(4,197,938)
Cents
(0.59)
(0.59)
Cents
(0.51)
(0.51)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
TALi Digital Limited Annual Report 2021 | 29
Consolidated Statement of Financial Position
AS AT 30 JUNE 2021
Statement of financial position
as at 30 June 2021
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
Deferred income
Lease liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Deferred income
Lease liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2021
$
2020
$
10
11
12
13
12
14
15
16
17
18
19
17
18
19
2,726,518
847,223
1,688
2,016,270
5,591,699
-
4,126,199
113,309
4,239,508
9,831,207
250,338
145,674
55,792
159,344
611,148
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
261,642
136,915
125,820
1,412,794
1,936,746
1,424,274
-
27,266
1,964,012
2,575,160
7,256,047
55,312
12,505
1,492,091
2,904,885
5,666,556
20
208,157,446
202,113,795
502,351
98,238
(201,403,750)
(196,545,477)
7,256,047
5,666,556
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
30 | TALi Digital Limited Annual Report 2021
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2021
Issued capital
$
Share based
payments
reserve
$
Change in
fair value
reserve
$
Accumulated
losses
$
Total
equity
$
202,113,795
1,098,238
(1,000,000)
(196,545,477)
5,666,556
For the year ended
30 June 2021
Opening balance
as at 1 July 2020
Loss after income tax expense
for the year
Other Total comprehensive
(loss)/income for the year, net
of tax
Total comprehensive (loss)/
income for the year
-
-
-
-
-
-
-
-
Issue of ordinary shares
6,549,420
Transaction costs relating to
issue of ordinary shares
(568,230)
Share-based payment
transactions to employees
Share-based payment
transactions to brokers and
shareholders
Issue of ordinary shares from
exercise of options
-
-
92,295
311,818
62,461
-
-
-
-
-
-
-
-
-
(4,858,273)
(4,858,273)
-
-
(4,858,273)
(4,858,273)
-
-
-
-
-
6,549,420
(568,230)
92,295
311,818
62,461
Balance at 30 June 2021
208,157,446
1,502,351
(1,000,000)
(201,403,750)
7,256,047
TALi Digital Limited Annual Report 2021 | 31
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
Issued capital
$
Share based
payments
reserve
$
Change in
fair value
reserve
$
Accumulated
losses
$
Total
equity
$
194,976,507
638,126
(200,000)
(193,147,539)
2,267,094
For the year ended
30 June 2020
Balance
as at 1 July 2019
Loss after income tax expense
for the year
Other Total comprehensive
(loss)/income for the year, net
of tax
Total comprehensive (loss)/
income for the year
-
-
-
Issue of ordinary shares
8,200,000
Transaction costs relating to
issue of ordinary shares
(1,062,712)
Share-based payment
transactions to employees
Share-based payments
to brokers
-
-
8,705
451,407
-
-
-
-
-
-
(3,397,938)
(3,397,938)
(800,000)
-
(800,000)
(800,000)
(3,397,938)
(4,197,938)
-
-
-
-
-
-
-
-
8,200,000
(1,062,712)
8,705
451,407
Balance at 30 June 2020
202,113,795
1,098,238
(1,000,000)
(196,545,477)
5,666,556
32 | TALi Digital Limited Annual Report 2021
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2021
For the year ended 30 June 2021
Note
2021
$
2020
$
Cash flows from operating activities
Receipts from customers from continuing operations
39,906
53,854
Payments to suppliers and employees
(6,997,809)
(3,785,688)
R&D tax incentive
Grants received
Interest received
Net cash used in operating activities
Cash flows from investing purchases
Payments for intangible assets
Payments for property, plant and equipment
694,848
461,738
3,271
750,103
232,960
30,833
(5,798,046)
(2,717,938)
(1,548,718)
(23,283)
(648,826)
(65,479)
Proceeds from disposal of property, plant and equipment
299
-
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Repayment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
(1,571,702)
(714,305)
6,560,776
8,200,001
(256,412)
(137,073)
-
-
6,167,291
(1,202,457)
(611,302)
(122,514)
178,430
(608,398)
7,036,217
3,603,974
Cash and cash equivalents at the beginning of the financial year
3,945,408
341,434
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
10
(16,433)
2,726,518
-
3,945,408
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
TALi Digital Limited Annual Report 2021 | 33
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2021
1. Reporting entity
2. Basis of preparation
3. Significant accounting policies
4. Revenue from continuing operations
5. Other income
6. Profit before related income tax expense
7. Finance income and finance costs
8. Income tax expense
9. Earnings per share
10. Cash and cash equivalents
11. Trade and other receivables
12. Investments
13. Other assets
14. Intangible assets
15. Property, plant and equipment
16. Trade and other payables
17. Deferred income
18. Lease liabilities
19. Employee benefits
20. Issued capital
21. Share-based payments
22. Notes to the statement of cash flows
23. Financial instruments disclosure and financial risk management
24. Dividends
25. Dividend franking account
26. Auditors’ remuneration
27. Segmented reporting
28. Related party transactions
29. Group entities
30. Parent entity disclosure
31. Commitments
32. Contingent liabilities
33. Events after the reporting period
35
35
36
42
42
42
43
43
44
44
45
45
46
46
49
50
50
50
51
52
53
56
57
61
61
61
61
61
62
62
63
63
63
34 | TALi Digital Limited Annual Report 2021
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
1. Reporting entity
TALi Digital Limited (the “Company”) is a company
domiciled in Australia. The consolidated financial
statements of the Company as at 2021 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 accord-ance 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 Ac-counting 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 2021, the consolidated entity incurred
a loss of $4,858,273 (2020: $3,397,938) and had
negative operating cash flows of $5,798,046 (2020:
$2,717,938). The consolidated entity’s main activity is
developing and commercialising the TALi products
and various service lines which will require further
funding and investment.
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 $2,726,518; and
• 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 FY21 and FY22 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.
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 India, 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.
TALi Digital Limited Annual Report 2021 | 35
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
2. Basis of preparation (continued)
(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 14); and
• Assessing the carrying amount of investments
(refer to note 12).
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.
Any new or amended Accounting Standards or
Interpretations that are not mandatory have not yet
been adopted.
The following Accounting Standards and Interpretations
are most relevant to the consolidated entity:
(a) AASB 15 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.
36 | TALi Digital Limited Annual Report 2021
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.
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 reason-able 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 (3c).
(c) Financial 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.
(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 ex-change 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 re-verse 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.
TALi Digital Limited Annual Report 2021 | 37
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
(g) Property, plant and equipment
(i) 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.
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 recover-able
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.
(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.
(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 (2020: 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.
Management assessed the finite life at 1 April 2021
to be 14.5 years (previously 7 years) in line with the
Group’s major patent expiry dates.
38 | TALi Digital Limited Annual Report 2021
3. Significant accounting policies (continued)
(i) Provisions
(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.
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 re-quires 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 contract
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
TALi Digital Limited Annual Report 2021 | 39
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
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
• 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
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.
At inception or on reassessment of a contract 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.
The Group recognises a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use as-set 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 re-measurements 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.
40 | TALi Digital Limited Annual Report 2021
3. Significant accounting policies (continued)
(n) Research and development
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.
(o) Segment reporting
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. From 1 July 2020 the Group deems to only
operate within one business segment.
(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.
(s) New standards and interpretations not yet
adopted
A number of new standards, amendments to
standards and interpretations effective for annual
periods beginning on or after 1 July 2021 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.
(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.
TALi Digital Limited Annual Report 2021 | 41
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
4. Revenue from continuing operations
Sale of licences
5. Other income
Grant income
Other income
R&D tax incentive
6. 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
2021
$
34,238
2021
$
125,204
297
389,166
514,667
2020
$
47,229
2020
$
97,215
68
477,432
574,715
2021
$
2020
$
224,550
316,951
172,607
169,596
271,608
3,371
2,500
277,479
218,618
330,295
139,195
173,705
181,622
1,646
3,000
186,268
42 | TALi Digital Limited Annual Report 2021
7. Finance income and finance costs
Recognised in profit or loss
Interest income on cash and cash equivalents
Finance income
Net change in fair value of financial assets at fair value through profit or loss:
Unwinding on lease liability
Interest charge on loan
Finance costs
Net finance income/(costs) recognised in profit or loss
8. Income tax expense
2021
$
2,844
2,844
(7,050)
(5,105)
(12,155)
(9,311)
2020
$
29,566
29,566
(15,097)
(28,831)
(44,738)
(15,172)
2021
$
2020
$
Numerical reconciliation between tax expense and pre-tax net loss:
Loss before tax – continuing operations
(4,858,273)
(3,397,938)
Current tax expense (benefit) - current year
Deferred tax expense - continuing operations
Aggregate income tax expense
Numerical reconciliation between tax expense and pre-tax net loss:
Loss become income tax expense
Tax at the statutory tax rate of 26% (2020: 27.5%)
Change in unrecognised temporary differences
Add: Non-deductible expenses
Add: Use of tax losses not recognised
Add: Research and development allowance
Less: Items deductible for tax purposes
Less: Items not assessable for tax purposes
Income tax expense
-
-
-
-
-
-
(4,858,273)
(3,397,938)
(1,263,151)
(934,433)
102,402
24,824
1,197,087
167,390
(105,864)
(122,688)
-
85,923
4,192
853,506
252,942
(103,336)
(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
2021 the Group has revenue losses of approximately $159 million (2020: $154 million).
TALi Digital Limited Annual Report 2021 | 43
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
9. Earnings per share
2021
$
2020
$
Loss after income tax attributable to the owners of TALi Digital Limited
(4,858,273)
(3,397,938)
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic
earnings per share
Number
Number
820,820,227
670,288,091
Weighted average number of ordinary shares used in calculating diluted
earnings per share
820,820,227
670,288,091
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
(0.59)
(0.59)
(0.51)
(0.51)
10. Cash and cash equivalents
Current assets
Cash at bank
Cash on deposit
Total current cash and cash equivalents
Financing arrangements
2021
$
2020
$
1,776,338
148,058
950,180
3,797,350
2,726,518
3,945,408
A security bond of $100,000 was provided on a Bank Guarantee on the Group’s Cremorne premises. Interest on
cash at bank is credited at prevailing market rates. The weighted average interest rate at reporting date was
0.003% (2020: 0.46%).
44 | TALi Digital Limited Annual Report 2021
11. Trade and other receivables
Current assets
Trade and other receivables
R&D tax incentive and other tax receivables
Total current trade and other receivables
Allowance for expected credit losses
2021
$
51,349
795,874
847,223
2020
$
214,719
741,348
956,067
The Group has recognised a loss of nil (2020: nil) in profit and loss in respect of the expected credit losses for the
year ended 30 June 2021.
12. Investments
Current
2021
$
2020
$
Financial assets classified at fair value through the profit & loss
1,688
1,418
Non-current assets
Investments in equity instruments
Total
Reconciliation
Reconciliation of the fair values at the beginning and end of the
current and previous financial year are set out below:
Opening fair value
Revaluation increments
Change in fair value recognised in other comprehensive income
Closing fair value
-
-
-
-
1,688
1,688
1,418
270
-
1,688
801,350
68
(800,000)
1,418
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.
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 2020, 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 was written off.
TALi Digital Limited Annual Report 2021 | 45
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
13. Other assets
Current assets
Prepayments
2021
$
2020
$
2,016,270
29,144
On 6 January 2021 $2,586,299 prepaid advertising credits were purchased from the Times Group India. As at 30
June 2021 the Group has $1,973,180 in credits remaining which will be utilised as the Group executes it’s Indian
advertising and marketing plan. The credits have an expiry of June 2022.
14. Intangible assets
Non-current assets
Development - at cost
Less: Accumulated amortisation
Intellectual property - at cost
Less: Accumulated amortisation
Acquired licences - at cost
Less: Accumulated amortisation
2021
$
2020
$
4,007,982
2,887,266
(523,723)
3,484,259
1,149,074
(742,890)
406,184
375,000
(139,244)
235,756
(376,493)
2,510,773
1,149,074
(630,447)
518,627
375,000
(81,968)
293,032
Total
4,126,199
3,322,432
46 | TALi Digital Limited Annual Report 2021
14. Intangible assets (continued)
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
2021
Gross carrying amount
Carrying amount at beginning of
period
Acquired licenses
$
Acquired
intellectual
property
$
Internally
generated
assets
$
Total
$
375,000
1,149,074
2,887,266
4,411,340
Addition, internally developed
-
-
1,120,716
1,120,716
Balance at 30 June 2021
375,000
1,149,074
4,007,982
5,532,056
Amortisation and impairment
Carrying amount at beginning of
period
Amortisation
Impairment losses
(81,968)
(630,447)
(376,493)
(1,088,908)
(57,276)
(112,443)
(147,230)
(316,949)
-
-
-
-
Balance at 30 June 2021
(139,244)
(742,890)
(523,723)
(1,405,857)
Carrying amount at 30 June 2021
235,756
406,184
3,484,259
4,126,199
TALi Digital Limited Annual Report 2021 | 47
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
14. Intangible assets (continued)
2020
Gross carrying amount
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
(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 include the applied development activities conducted on the TALi Technology in respect
of the development stage of the TALi TRAIN and TALi DETECT projects. On 1 April 2021, the estimated useful life of
the internally developed assets was reassessed based on a number of factors and which ultimately align the useful
life of the assets to the expiry of the assets main issued patent. The estimated useful life was reassessed to be 14.5
years (previously 7 years). The date of reassessment occurred on 1 April 2021 in line with the assets roll out to the
Indian market. Both TALi TRAIN and TALi DETECT assets were assessed as available and ready for use for customers
from the date of reassessment and have been amortised accordingly.
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.
48 | TALi Digital Limited Annual Report 2021
15. Property, plant and equipment
Non-current assets
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
2021
$
156,848
(130,994)
25,854
216,588
(162,475)
54,113
400,104
2020
$
162,543
(79,246)
83,297
191,982
(125,017)
66,965
400,104
(366,762)
(233,394)
33,342
113,309
166,710
316,972
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Balance as at 1 July 2019
Additions
Disposals
Reclassifications
Depreciation expense
Leasehold
improvements
$
Plant and
equipment
$
Right-of-use
asset
$
Total
$
108,549
28,549
(1,807)
-
59,337
40,884
-
-
311,192
479,078
-
-
(11,114)
69,433
(1,807)
(11,114)
(51,994)
(33,256)
(133,368)
(218,618)
Balance at 30 June 2020
83,297
66,965
166,710
316,972
Additions
Disposals
Reclassifications
Depreciation expense
-
-
(5,694)
21,145
(258)
5,694
-
-
-
21,145
(258)
-
(51,749)
(39,433)
(133,368)
(224,550)
Balance as at 30 June 2021
25,854
54,113
33,342
113,309
TALi Digital Limited Annual Report 2021 | 49
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
16. Trade and other payables
Current liabilities
Trade payables
Accruals and other payables
2021
$
100,010
150,328
250,338
2020
$
828,938
59,479
888,417
The Group’s exposure to currency and liquidity risk related to trade creditors and accruals is disclosed in Note 23.
17. Deferred income
Current liabilities
2021
$
2020
$
Deferred income - R&D Incentive & Grant Income
145,674
261,642
Non-current liabilities
Deferred income - R&D Incentive & Grant Income
1,936,746
1,424,274
Reconciliation
Reconciliation of the written down values at the beginning and end of
the current and previous financial year are set out below:
Opening balance
Current year additions
Release of deferred revenues to the Profit and Loss
Closing balance
1,685,916
487,512
(91,008)
2,082,420
1,398,322
371,463
(83,869)
1,685,916
Due to the deferral of the TALi products Development Cost Intangible Assets amortisation as indicated in note 14,
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 a total of $389,166 (2020: $477,432) of R&D grant income and $10,205
(2020: $97,215) in CRC-P grant income being recognised in the Profit or Loss for the year ended 30 June 2021.
$1,498,894 (2020: $1,092,186) of R&D grant income relating to future periods and $583,526 (2020: $593,730) in
Grant revenue has been classified as Deferred Income.
18. Lease liabilities
Current liabilities
Lease liability
Non-current liabilities
Lease liability
2021
$
2020
$
55,792
136,915
-
55,792
55,312
192,227
The lease liability relates to the office lease held by the Group. The lease has been accounted for in accordance
with AASB 16.
Refer to note 23 for further information on financial instruments disclosure and financial risk management.
50 | TALi Digital Limited Annual Report 2021
19. Employee benefits
Current liabilities
Employee benefits provision
Non-current liabilities
Employee benefits provision
2021
$
2020
$
159,344
125,820
27,266
186,610
12,505
138,325
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.
2020
Balance at 1 July 2019
Provision utilised
Charges raised
Balance at 30 June 2020
2021
Balance at 1 July 2020
Provision utilised
Charges raised
Balance at 30 June 2021
Annual leave
$
Long service leave
$
111,594
(110,908)
125,134
125,820
54,538
(33,291)
(8,742)
12,505
Total
$
166,132
(144,199)
116,392
138,325
Annual leave
$
Long service leave
$
Total
$
125,820
(124,322)
157,846
159,344
12,505
138,325
-
(124,322)
14,761
27,266
172,607
186,610
TALi Digital Limited Annual Report 2021 | 51
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
20. 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
2021
2020
Number
$
Number
$
Ordinary shares, fully paid
931,905,789
208,157,446
749,305,218
202,113,795
Movements in issued capital during
the year were as follows:
Balance at the beginning of the
financial year
749,305,218
202,113,795
449,305,165
194,976,507
Issue of shares through placement
180,518,542
6,549,420
300,000,053
8,200,000
Issue of shares on exercise of options
2,082,029
62,461
-
(568,230)
-
-
-
(1,062,712)
Transaction costs relating to rights issue
and placements(1)
Issued capital at the end of the
financial year
931,905,789
208,157,446
749,305,218
202,113,795
1 Directly attributable costs incurred in raising capital are presented as a reduction in equity. Costs that are a
reduction of equity include $311,818 share based payment in relation to 15,000,000 options were provisionally
issued to the Broker of the placement on 22 February 2021. The other $256,412 of transaction costs were costs
settled via cash payments.
52 | TALi Digital Limited Annual Report 2021
21. 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:
2021
Grant Date
21/11/2017
8/10/2018
8/10/2018
13/09/2019
19/09/2019
15/10/2019
26/11/2019(1)
29/11/2019
12/06/2020
24/11/2020(1)
24/11/2020(2)
Exercise Price
Balance at the
start of the year
Granted during
the year
Expired/
forfeited/other
Balance at the
end of the year
$0.030
$0.030
$0.030
$0.030
$0.030
$0.020
$0.030
$0.090
$0.060
$0.030
$0.030
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
-
-
-
-
-
-
-
-
-
-
22,500,000
3,400,000
-
-
-
(360,507)
(3,425,000)
(300,000)
(14,377,766)
6,800,000
6,800,000
6,800,000
-
-
2,100,000
-
-
7,188,883
(1,700,000)
-
-
-
22,500,000
3,400,000
Weighted average exercise price
$0.04
$0.03
$0.03
$0.04
49,852,156
25,900,000
(20,163,273)
55,588,883
1 22,500,000 options were issued to the Managing Director, Glenn Smith replacing the 14,377,766 options issued in
2019. Each option issued has an exercise price of $0.03 and will expire on the fifth anniversary of the date of issue.
The options have the following vesting conditions:
• Execution of a market entry partnership agreement with a gross transaction value that has been defined by
the Board and agreed with the Managing Director pertaining to one of the following countries: China, India or
Indonesia; and
• Entry into a joint venture, licence or equivalent agreement with a gross transaction value that has been defined
by the Board and agreed with the Managing Director pertaining to one of the following countries: USA, UK or Japan.
2 Shareholder approval was given to the issue of 3,400,000 options to Director, David Brookes. These were issued
with an exercise price of $0.03 and will expire on 21 November 2022.
TALi Digital Limited Annual Report 2021 | 53
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
21. Share-based payments (continued)
2020
Grant Date
3/10/2017
21/11/2017
8/10/2018
8/10/2018
13/09/2019
19/09/2019
15/10/2019 (1)
26/11/2019 (2)
29/11/2019 (3)
12/06/2020 (4)
Exercise
Price
$0.030
$0.030
$0.030
$0.030
$0.030
$0.030
$0.020
$0.030
$0.090
$0.060
Granted
during the
year
Exercised
during the
year
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
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
-
-
-
-
-
-
-
-
-
-
-
Weighted average exercise price
$0.03
$0.05
$0.00
$0.03
$0.04
1 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.
2 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)
3 Broker options issued vested upon issue.
4 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.
54 | TALi Digital Limited Annual Report 2021
21. Share-based payments (continued)
The weighted average remaining contractual life of performance rights and options outstanding at the end of the
financial year was 2.63 years (2020: 2.37 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
24/11/2020
24/11/2020
Expiry date
24/11/2025
24/11/2022
Share price
at grant date
$0.03
$0.03
Exercise price
Expected volatility
$0.03
$0.03
137%
137%
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.
TALi Digital Limited Annual Report 2021 | 55
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
22. Notes to the statement of cash flows
For the year ended 30 June 2021
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
Bank short term deposits
Cash assets (note 10)
Loss after income tax
Add: depreciation, amortisation and loss on disposal of plant and
equipment
Share based payment expense
Investment (gain)/loss on revaluation and unrealised foreign
exchange (gain)/loss
Total non-cash & non-operating items
(Increase)/decrease in receivables
(Increase)/decrease in other assets
(Increase)/decrease in employee benefits
(Increase)/decrease in deferred income
(Increase)/decrease in payables
Change in operating assets and other receivables
2021
$
2020
$
1,776,338
148,058
950,180
3,797,350
2,726,518
3,945,408
(4,858,273)
(3,397,938)
541,800
548,912
92,295
16,161
650,256
108,844
(1,987,124)
48,285
396,504
(156,538)
(1,590,029)
8,705
(68)
557,549
14,733
(24,887)
(27,807)
287,594
(127,182)
122,451
Net cash used in operating activities
(5,798,046)
(2,717,938)
There have been no non-cash financing and investing transactions during the 2021 financial year (2020: nil) which
have had a material effect on assets and liabilities of the Group.
56 | TALi Digital Limited Annual Report 2021
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 (2020: nil).
At reporting date, the Group had the following exposures to foreign currency, converted to AUD:
Shares
Bank accounts
Payables
Gross balance sheet
exposure
2021
2020
GBP
-
-
-
USD
1,370
5,823
7,193
SGD
EURO
GBP
-
-
-
-
-
-
-
-
USD
144
(29,437)
(29,293)
SGD
EURO
-
-
-
-
-
-
TALi Digital Limited Annual Report 2021 | 57
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
23. Financial instruments disclosure and financial risk management (continued)
Foreign currency sensitivity analysis
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 2021 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 2020. There is no impact on equity.
2021 Exposure
Equity
Profit and loss
Strengthening
Weakening
Strengthening
Weakening
Gross balance sheet exposure
-
-
541
(492)
2020 Exposure
Equity
Profit and loss
Strengthening
Weakening
Strengthening
Weakening
Gross balance sheet exposure
-
-
2,041
(1,856)
The following significant exchange rates applied during the financial year:
Currency
GBP
USD
EURO
Average rate
Reporting date spot rate
2021
0.55
0.72
0.63
2020
0.56
0.70
0.62
2021
0.54
0.75
0.63
2020
0.56
0.69
0.62
(ii) Interest rate risk
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.
Financial assets
Cash assets – at 30 June 2021
Cash assets – at 30 June 2020
Financial liabilities
Borrowings – at 30 June 2021
Borrowings – at 30 June 2020
Effective
interest rate
%
Floating
interest rate
$
3 months
or less
$
Non-interest
bearing
$
Total
$
0.01
0.46
950,180
3,797,450
-
-
-
-
-
-
-
-
1,776,338
148,058
-
-
-
-
-
-
58 | TALi Digital Limited Annual Report 2021
Profit and loss
Profit and loss
Cash at bank –
variable interest rate:
$AUD
2021
2020
Strengthening
Weakening
Strengthening
Weakening
4,751
(4,751)
18,987
(18,987)
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 $4,751 (2020: $18,987), if all other variables, including foreign
currency rates, remain constant. The analysis is performed on the same basis for 2020.
(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.
(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.
Financial assets
3 months or less
$
Greater than 3
months
$
Greater than 1
year
$
Receivables – at 30 June 2021
Receivables – at 30 June 2020
652,139
953,317
-
-
-
2,750
Total
$
652,139
956,067
(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.
TALi Digital Limited Annual Report 2021 | 59
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
23. Financial instruments disclosure and financial risk management (continued)
(c) Liquidity risk
At reporting date, the Group had the following financial liability exposures:
Financial liabilities
Creditors – at 30 June 2021
Creditors – at 30 June 2020
Financial liabilities
3 months or less
$
Greater than 3
months
$
Greater than 1
year
$
100,010
819,924
-
9,014
-
-
Less than one
year
$
One to five years
$
More than 5
years
$
Lease liabilities – at 30 June 2021
Lease liabilities – at 30 June 2020
56,487
143,412
-
55,661
-
-
Maturity analysis – contractual undiscounted
cash flows on lease liabilities
122,514
Less than one year
One to five years
Total undiscounted lease liability at 30 June
Other disclosures
Interest expenses on lease liabilities recognised in the profit or loss
Total cash outflow for leases recognised in the statement of cashflows
2021
$
56,487
-
56,487
7,050
137,073
Total
$
100,010
828,938
Total
$
56,487
199,073
2020
$
143,412
55,661
199,073
15,097
122,514
(d) Net fair values of financial assets and liabilities
(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.
60 | TALi Digital Limited Annual Report 2021
24. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
25. Dividend franking account
The Company has no franking credits at reporting date.
26. 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
27. Segmented reporting
From 1 July 2020 the Group deemed that it has only one business segment.
2021
$
-
68,210
68,210
-
-
-
2020
$
23,250
60,000
83,250
7,400
13,000
20,400
28. Related party transactions
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.
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
Post-employment benefits
Share-based payments
Total compensation
2021
$
371,751
93,750
31,992
90,891
588,384
2020
$
374,483
62,500
30,933
-
467,916
Key Management Personnel transactions
Directors of the Company control 4.68% (2020: 5.83%) 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 2021 or
2020 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 (2020: nil).
TALi Digital Limited Annual Report 2021 | 61
Notes to Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2021
28. Related party transactions (continued)
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.
Loans and other transactions with Key Management Personnel
There were no loans made to Directors or Executives or other loan movements during the 2021 year.
Other related party transactions
Other than the transactions disclosed above, there were no transactions with other related parties during either the
2021 or 2020 financial years.
29. Group entities
Significant subsidiaries for the year ended:
Name
Country of incorporation
Ownership interest %
TALi Health Pty Ltd
ACN 158 797 936 Pty Ltd1
TALi Digital INC
Australia
Australia
USA
TALi Digital (UK) Limited
United Kingdom
1ACN 158 797 936 Pty Ltd was de-registered on 14/09/2020.
2021
100
-
100
100
2020
100
100
100
100
30. Parent entity disclosure
As at, and throughout, the financial year ended 30 June 2021, the parent entity of the Group was TALi Digital Limited.
Statement of profit and loss
Loss after income tax
Total comprehensive (loss)/income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Change in fair value reserve
Share-based payments reserve
Accumulated losses
Total equity
62 | TALi Digital Limited Annual Report 2021
2021
$
2020
$
(2,442,426)
(1,090,531)
(2,442,426)
(1,090,531)
12,845,625
8,798,017
13,300,179
9,542,092
416,608
1,085,555
1,821,484
2,068,734
11,478,695
7,473,358
208,157,446
202,096,875
(1,000,000)
(1,000,000)
1,502,351
1,098,238
(197,181,102)
(194,721,755)
11,478,695
7,473,358
31. Commitments
The Company has no commitments at year end.
32. Contingent liabilities
The Group is not aware of any contingent liabilities or contingent assets capable of having a material impact
on the Group.
33. Events after the reporting period
On 20 July 2021, 6,000,000 options were issued to employees under the employee incentive scheme:
(i) 2,000,000 options exercisable at $0.06, vesting on 1 July 2022 with an expiry date of 30 June 2026.
(ii) 2,000,000 options exercisable at $0.09, vesting on 1 July 2023 with an expiry date of 30 June 2026.
(iii) 2,000,000 options exercisable at $0.09, vesting on 1 July 2024 with an expiry date of 30 June 2026.
On 20 July 2021, 900,000 options previously issued to employees were cancelled.
On 18 August 2021, the Company announced it had entered into a Strategic Licensing Agreement (Agreement)
with Akili Interactive Labs, Inc., a global leader in the digital therapeutics space. Under the Agreement, the
Company will receive total milestone payments of up A$51 million (US$37.5 million) as well as royalties on future
sales.
On 28 September 2021 the Company received the FY21 income tax return refund of $795,873 in relation to the
Research & Development Tax Incentive.
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.
TALi Digital Limited Annual Report 2021 | 63
Directors’ Declaration
FOR THE YEAR ENDED 30 JUNE 2021
In the opinion of the directors of TALi Digital Limited (‘the Company’):
• The attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
• The attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 3 to the financial statements;
• The attached financial statements and notes give a true and fair view of the Group’s financial position as at 30
June 2021 and of its performance for the financial year ended on that date; and
• There are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Sue MacLeman
Chair
Dated at Melbourne this 30th of September 2021.
64 | TALi Digital Limited Annual Report 2021
TALi Digital Limited Annual Report 2021 | 65
TALi Digital Limited Annual Report 2021 | 65
TALi Digital Limited Annual Report 2021 | 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 2021, 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 2021 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 $4,858,273
during the year ended 30 June 2021, and for the period ended on this date, the Group’s operating cash flow for the year was
an outflow of $5,798,046. 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
‘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.
66 | TALi Digital Limited Annual Report 2021
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
How our audit addressed the key audit matter
Intangible Assets – note 14
The Group has intangible assets with a written down value of
$4,126,199 as at 30 June 2021, 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 and TALi Detect products which the Group
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 recognition of R&D and whether the
requirements of AASB 138 and AASB 136 are satisfied.
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;
• Assessing the change in estimate for useful life of intangible
products made by management during the period;
• Obtaining supporting documentation to demonstrate ongoing
use of the asset; and
• Assessing the adequacy of the disclosures within the financial
statements.
R&D Incentives – note 11
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.
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 2021 | 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 2021, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and 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: http://www.auasb.gov.au/auditors_responsibilities/ar1.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 17 to 26 of the Directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of TALi Digital Limited, for the year ended 30 June 2021 complies with section
300A of the Corporations Act 2001.
68 | TALi Digital Limited Annual Report 2021
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 2021
TALi Digital Limited Annual Report 2021 | 69
Shareholder Information
Share capital
The shareholder information set out below was applicable as at 25 August 2021.
Number
Number of shares quoted on the Australian Securities Exchange Limited 931,905,789.
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.
Position Holder name
Holding
BNP PARIBAS NOMINEES PTY LTD
66,494,118
GREY INNOVATION HOLDINGS PTY LTD
SAILORS OF SAMUI PTY LTD
30,909,488
24,305,455
MONDO ELECTRONICS PTY LTD
19,884,346
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
MOONAH CAPITAL PTY LTD
JP MORGAN NOMINEES AUSTRALIA PTY LIMITED
KEMBLA NO 20 PTY LTD
SANLAM PRIVATE WEALTH PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TEN GOALS PTY LTD
MR DONAL FRANCIS O’SULLIVAN
PUNTERO PTY LTD
MRS SHWETA PRIYADARSHINI
ENJIRU PTY LTD
17,701,984
16,000,000
15,425,505
14,300,000
12,500,000
10,222,898
10,000,000
10,000,000
10,000,000
9,850,000
9,044,204
CPO SUPERANNUATION FUND PTY LTD
7,954,271
MR CARMELO CANNAVO
MR ALAN CONIGRAVE
PETERLYN PTY LTD
TEEFISH SUPER PTY LTD
JMT INVESTMENT GROUP VIC PTY LTD
CITOS SUPER PTY LTD
CITICORP NOMINEES PTY LIMITED
CORWEST PTY LTD
Totals
Total issued capital
7,320,000
7,200,000
7,200,000
7,100,000
7,000,000
7,000,000
6,881,979
6,415,560
340,709,808
931,905,789
36.56%
100.00%
70 | TALi Digital Limited Annual Report 2021
% IC
7.14%
3.32%
2.61%
2.13%
1.90%
1.72%
1.66%
1.53%
1.34%
1.10%
1.07%
1.07%
1.07%
1.06%
0.97%
0.85%
0.79%
0.77%
0.77%
0.76%
0.75%
0.75%
0.74%
0.69%
1
2
3
4
5
6
7
8
9
10
11
11
11
12
13
14
15
16
16
17
18
18
19
20
Distribution of shareholders as at 25 August 2021
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
375
212
200
1,140
797
2,724
105,134
603,727
1,646,859
46,780,256
882,769,813
931,905,789
0.01%
0.06%
0.18%
5.02%
94.73%
100.00%
The number of shareholders as at 25 August 2021 with less than a marketable parcel of $500 worth of shares, based
on the market price as at that date ($0.038 per share), was 901, with total 3,657,268 amounting to 0.39% of Total
Shareholding.
Corporate Governance Statement
In accordance with ASX Listing Rule 4.10.3 the Company’s 2021 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 entitled 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 25 August 2021, the Options issued over unissued Ordinary Shares totalled 60,688,883 represented by 7,200,000
granted to employees under the ESOP, 36,100,000 issued to Directors, and 17,388,883 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 25 August 2021
Security
code
Security
name
CHESS
holders
CHESS
holdings
% CHESS
holdings
Issuer
holders
Issuer
holdings
% Issuer
holdings
Total
holders
TD1
Ordinary
fully paid
shares
2,466
903,794,155
96.98%
258
28,111,634
3.02%
2,724
TALi Digital Limited Annual Report 2021 | 71
Shareholder Information continued
Officers
Managing Director: Glenn Smith
Company Secretary: Stephen Denaro
Registered Office
TALi Digital Limited
Level 5, 19 William Street
Share Registry
Automic Registry Services
Level 3, 50 Holt Street
Cremorne, Victoria 3121 Australia
Surry Hills, New South Wales 2010 Australia
Telephone
+61 3 9192 9937 | 1300 082 013
Telephone
1300 288 664
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 2021
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