AI assistant
PRO MEDICUS LIMITED — Annual Report 2003
Sep 3, 2003
65579_rns_2003-09-03_be6846fc-f5ca-40e7-82ee-f126279bab6c.pdf
Annual Report
Open in viewerOpens in your device viewer
| TABLE OF CONTENTS | |
|---|---|
| Directors' Report | 2 |
| Statement of Financial Performance | 9 |
| Statement of Financial Position | 10 |
| Statement of Cash Flows | 11 |
| Notes to the Financial Statements | 12 |
| Note 1 - Summary of Significant Accounting Policies | 12 |
| Note 2 - Revenue from Ordinary Activities | 15 |
| Note 3 - Expenses and Losses/(Gains) | 15 |
| Note 4 - Income Tax | 16 |
| Note 5 - Dividends Paid or Provided For on Ordinary Shares | 16 |
| Note 6 - Receivables (Current) | 17 |
| Note 7 - Inventories (Current) | 17 |
| Note 8 - Other Financial Assets (Current) | 17 |
| Note 9 Property, Plant and Equipment | 17 |
| Note 10 - Deferred Tax Assets | 18 |
| Note 11 - Payables (Current) | 18 |
| Note 12 - Interest-Bearing Liabilities (Current) | 19 |
| Note 13 - Provisions (Current) | 19 |
| Note 14 - Interest-Bearing Liabilities (Non-Current) | 19 |
| Note 15 - Provisions (Non-Current) | 20 |
| Note 16 - Contributed Equity | 20 |
| Note 17 - Reserves and Retained Profits | 20 |
| Note 18 - Statement of Cash Flows | 21 |
| Note 19 - Expenditure Commitments | 21 |
| Note 20 - Employee Entitlements and Superannuation Commitments | 22 |
| Note 21 - Subsequent Events | 23 |
| Note 22 - Earnings Per Share | 24 |
| Note 23 - Remuneration of Directors | 24 |
| Note 24 - Remuneration of Executives | 24 |
| Note 25 - Auditors' Remuneration | 24 |
| Note 26 - Related Party Disclosures | 25 |
| Note 27 - Segment Information | 25 |
| Note 28 - Financial Instruments | 26 |
| Directors' Declaration | 28 |
| Independent Audit Report | 29 |
| ASX Additional Information | 31 |
| Corporate Governance Statement | 32 |
| Corporate Information | 35 |
Directors' Report
Your Directors submit their report for the year ended 30 June 2003. The names and details of the Company's directors in office during the financial year and until the date of this report are:
Directors
| Melvyn Keith Ward AOB.E.(Hons), M.Eng.Sc.,F.I.E(Aust), F.T.S., F.A.LM.,I.V.A.(Chairman) | Mel Ward joined Pro Medicus Limited as a Director on 4 April, 2000. Heis a director of a number of companies including Coca-Cola Amatil Ltd,Pty Ltd,ManufacturersofAustraliaMacquarieInsuranceCommunications Infrastructure Group, Western Australian NewspapersHoldings Limited and Transfield Services Limited.After a long career in the communications sector, he retired asManaging Director of Telecom Australia (Telstra) in 1992. |
|---|---|
| Dr Peter David JonsonB.Comm(Hons), M.A.(Hons),PhD, F.A.I.C.D, F.A.A.S.S.(Deputy Chairman) | Peter Jonson joined Pro Medicus as a Director on 4th April 2000. He isChairman of the Australian Institute for Commercialisation and of theCooperative Research Centre for Microtechnology. He is a director ofVillage Roadshow Ltd and of Sequoia Capital Management Ltd. He isChair Emeritus of the Melbourne Institute, having served as the Chair ofits Advisory Board from 1992 to 2002. |
| In his previous career, Peter was an economist at the Reserve Bank ofAustralia for 17 years, including 7 years in its most senior economicspost, then called Head of Research. He subsequently worked in theprivate finance industry for 12 years including CEO of Norwich FinancialServices Ltd and Managing Director and then Chairman of ANZ FundsManagement. Peter is a fellow of the Australian Institute of companyDirectors and of the Academy of the Social Sciences in Australia. | |
| Dr Sam Aaron HupertM.B.B.S.(Managing Director and ChiefExecutive Officer) | Co-founder of Pro Medicus Limited in 1983, Sam Hupert is a MonashUniversity Medical School graduate who commenced General Practicein 1980. Realising the significant potential for computers in medicine heleft general practice in late 1984 to devote himself full time to managingthe Company. |
| Anthony Barry HallB.Sc.(Hons), M.Sc.(Executive Director andTechnology Director) | Co-founder of Pro Medicus Limited in 1983, Anthony Hall has beenprincipal architect and developer of the core software systems.Hiscurrent role is to oversee all product development and plan the futuretechnical direction of the Company. |
| Philip Gregory MolyneuxB.Econ, F.C.A.(Non-Executive Director) | Philip Molyneux joined Pro Medicus Limited as a Director on 4 April,2000. He is Chairman of Anadis Limited, and Equity Trustees Limited, adirector of Sundowner Motor Inns Limited, Centre for Eye ResearchAustralia Limited, Australian National Academy of Music and Corps ofCommissionaires (Victoria) Limited. He is also a trustee of MonashUniversity Accident Research Foundation. |
All Directors were in office from the beginning of the financial year until the date of this report.
Company Secretary Geoffrey William Holden Geoffrey Holden has been company secretary for 3 years. Prior to holding this position he was Manager Finance and Administration of CA Victorian Imaging Group for 9 years and held various roles within other organisations including 6 years at Dunlop and 10 years with ToucheRoss & Co Chartered Accountants. Geoffrey has been a registered Chartered Accountant for 29 years.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
| As at the date of this report, the interests of the directors in the shares and options of the Company were: | ||
|---|---|---|
| OrdinaryShares | Options overOrdinaryShares | |
| A. B. Hall | 40.068.500 | 425.000 |
| S. A. Hupert | 40.072.660 | 425,000 |
| M. K. Ward | 50,000 | 400,000 |
| P.D. Jonson | 50,000 | 200.000 |
| P. G. Molyneux | 25,000 | 200.000 |
EARNINGS PER SHARE
| --------------------------------------,,,,,,,,,,,,,,,,,,Cents | |
|---|---|
| Basic earnings per share | 4.5 |
| Diluted earnings per share | 4.5 |
DIVIDENDS
| ∵ents | s anc | |
|---|---|---|
| Final dividends recommended: | ||
| . on ordinary shares | 20 | 2.000 |
| Dividends paid in the year: | ||
| Interim for the year | ||
| • on ordinary shares | 125 | -1250 |
| Final for 2002 shown as recommended in the 2002 report: | ||
| • on ordinary shares | 15 |
CORPORATE INFORMATION
Corporate Structure
Pro Medicus Limited is a company limited by shares that is incorporated and domiciled in Australia.
Nature of operations and principal activities
The principal activities of the Company during the year were the supply of diagnostic imaging groups and a broad range of groups within the private medical market in the following areas;
- provision of computer hardware, network design and installation services;
- innovative proprietary medical software;
- ongoing support and service contracts, which provide help desk support; and
- Promedicus.net secure email.
Promedicus.net has been further developed and marketed during the year. In addition development has been completed for the following new products:
- RIS/PACS interface for the Agfa digital radiology system; and
- "Professional Suite" which is an integrated package using Pro Medicus software modules aimed at the medical specialist market.
Apart from this, there have been no significant changes in the nature of activities during the year.
REVIEW AND RESULTS OF OPERATIONS
Investment Activities
The Company has no investments at year end but invests in commercial bills during the year to maximise the interest return on surplus funds.
Performance Indicators
Management and the Board monitor overall performance, from strategic plan through to the performance of the Company against operating plans and financial budgets.
The Board, together with management, have identified key performance indicators (KPIs) that are used to monitor performance. Key management monitors these KPIs on a regular basis and Directors receive the KPI's for review prior to each monthly Board meeting allowing them to actively monitor the Company's performance.
Dynamics of the Business
An improvement in gross margin has been achieved this year as a result of the previously anticipated change in mix of products sold. It is anticipated that more software and support contracts can be sold and these will attract better margins compared to the current mix with hardware.
Operating Results for the Period
Pro Medicus has experienced the second most profitable year in its history. This has been achieved in a difficult operating environment which saw some major clients, due to one-off factors beyond the control of Pro Medicus, defer installations scheduled for the second half of the 2003 financial year into the first half of the 2004 financial year.
During the past financial year, the company continued its focus on higher margin software sales, e-health and services. The change in product mix away from hardware sales resulted in a slight decrease in revenue, offset by a decrease in cost of goods sold. This has resulted in profit before tax to revenue from operating activities increasing to 70.7% (2002: 66.5%).
Promedicus.net, the company's e-health offering, continued its strong growth in both the number of doctors registered as well as transaction volumes which have now exceeded 4 million, making promedicus.net the leading e-health provider in Australia. The company continued to maximise the value of promedicus.net by extending its use to non-radiology providers, a trend we anticipate will accelerate in the 2004 financial year.
In March of 2003, the company achieved a strategic milestone, installing its Practice Management and Appointments software into fifteen sites in the UK for MIA Lodestone, one of the UK's largest private radiology groups. Two additional sites have been added since the original installation. This installed base in the UK provides the company with a product highly suited to the local environment and a strategic presence in a market over three times the size of Australia.
Building on the success of the first digital imaging sale to Lake Imaging in October 2002, the company has been in advanced negotiations with a number of major clients. Due to the size and complexity of these negotiations, the company has experienced slightly longer than expected lead times for sales of these products, which has impacted sales growth for the 2003 financial year. The company is still confident that it will achieve ongoing sales of this technology as its clients transition to a digital radiology environment.
SUMMARISED OPERATING RESULTS
| 2003 | |||
|---|---|---|---|
| Revenues | Results BeforeTax | ||
| $'000 | $'000 | ||
| Industry segments | |||
| Core Business | 6,685 | 4,680 | |
| Promedicus net | 1,771 | 1,470 | |
| RIS/PACS | 644 | 287 | |
| Total sales from operating activities and operating profit | 9,100 | 6437 |
Shareholder Returns
The Company is pleased to report that dividend return to shareholders of 3.25 cents per share has exceeded the percentage return paid in the previous year. Reductions in return on net assets and equity as shown in the table below, reflect the retention of extra cash in the business.
| 2003 | 2002 | 2001 | 2000 | |
|---|---|---|---|---|
| Basic earnings per share (cents) | 4.5 | 4.8 | 4.1 | 3.3 |
| Return on assets (%) | 51.3 | 59.4 | 66.6 | 74.1 |
| Return on equity (%) | 42.3 | 64.6 | 79.5 | 99.6 |
| Net debt / equity ratio (%) | 1.8 | 3.3 | 6.2 | 11.3 |
| Dividend payout ratio $(%)$ | 71.5 | 51.9 | 55.1 | 51.7 |
| Available franking credits ($'000) | 11.295 | 8.098 | 5.934 | 3.045 |
Investments for Future Performance
The Company will continue to direct resources into the development of new products and in particular is committed to the research being undertaken within both the core and Promedicus net areas. In turn, this will translate into an increase in sales and, more importantly, to a significant improvement in the bottom line of the operation.
The Company's workforce remained at the same level as last year, in spite of the increased activity and continued product development. The Company has increased its level of activity, largely due to the efforts of employees at all levels. The directors express their gratitude for the efforts of all employees in achieving this year's result.
The workforce currently stands at 17 equivalent full time employees compared with 18 in 2002. The group believes that there needs to be a small increase in staff numbers to ensure that effort can be maintained and new initiatives will have the staffing resources necessary for their success.
The Company remains committed to providing staff with access to appropriate training and development programs, together with the resources to complete their duties.
REVIEW OF FINANCIAL CONDITION
Capital Structure
The company has a sound capital structure. This is clear in the debt/equity ratio, which is 1.8% in the current year and was 3.3% in the previous year.
The directors believe that the debt to equity ratio for the Company could be higher, if the need for expansion or acquisition required extra funds sourced from borrowings. The Directors are satisfied with the ratio as it currently stands.
Treasury Policy
The Company is not exposed to any interest rate or significant currency sensitive loans or debts. The treasury function, co-ordinated within Pro Medicus Limited, is basically limited to maximising interest return on surplus funds. The treasury operates within policies set by the Board, which is responsible for ensuring that management's actions are in line with board policy.
During the financial period, surplus cash was deposited to various bank instruments and Cash Management accounts to maximise the interest earned. At balance date there was in excess of $9.5m of cash available to the company.
Cash from Operations
Net cash flows from operating activities increased from $4.3m in the previous year to $4.5m in the current period. The increase in cash from operating activities was largely due to reduced payments to suppliers and higher interest income. Net operating cash flow excluding tax payments was essentially consistent with the previous year.
There was a decrease in receipts from customers of approximately 8% and the ratio of payments to suppliers and employees, as a percentage of receipts from customers showed a decrease of 10%.
Liquidity and Funding
The Company is cash flow positive, has substantial cash on deposit and has no overdraft facility. Sufficient funds are held to finance operations.
Risk Management
The Company 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 Company's objectives and activities are aligned with the risks and opportunities identified by the Board.
The Company believes that it is crucial for all Board members to participate in this process, as such the Board has not established separate committees for areas such as risk management, environmental issues, occupational health and safety or treasury.
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:
- Board approval of strategic plans, which encompass the company's vision, mission and strategy statements, designed to meet stakeholder needs and manage business risk;
- Implementation of Board approved operating plans and budgets and Board monitoring of progress against these budgets, including the establishment and monitoring of KPIs; and
- Oversight of appropriate backup procedures for important company data. ab.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Pro Medicus Limited support and have adhered to the principles of good corporate governance. Please refer to the separate "Corporate Governance" section for more details of specific policies.
Statement of Compliance
The above report is based on the quidelines in The Group of 100 Incorporated publication Guide to the Review of Operations and Financial Condition.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Shareholders' equity increased to $10.75m from $7.45m, an increase of $3.3m (2002: $2.31m) or 44% (2002: 45%). The movement was largely the result of retaining more cash in the business relative to the previous year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
A Final Dividend of 2.0 cents per share (2002: nil) has been declared post 1 July. Please refer Note 5(c). This Final Dividend was based on the Directors' decision to change the dividend policy in future to distribute between 60 and 70% of Profit after Tax. Previously this was based on a payout of 50%.
No other significant post balance date events have been identified.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Directors foresee that the 2004 financial year will be a period of consolidation for sales of the traditional core products and during which the changes made in the 2003 financial year will have their full impact. The most significant areas for change will be in:
- Continued installation and use of the Promedicus.net secure email product;
- Continued sales of the Pro Medicus Appointments System;
- * Marketing of the Radiology Information System (RIS)/PACS interface and introduction to the Australian market under an alliance with Agfa-Gevaert Limited;
- Marketing of the Professional Suite to various medical specialists;
- Expansion of the business overseas to service MIA Group UK operations together with the sale of Pro Medicus products into the local UK market; and
Expansion of the business to Asia to promote the RIS/PACS products developed under the Agfa-₩ Gevaert strategic alliance agreement.
It is anticipated that the 2004 financial year will show continued improvement in profits. However, this is dependant on many market factors over which the directors have no control.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company has no identified risk with regard to environmental regulations currently in force. There have been no known breaches by the Company of any regulations.
SHARE OPTIONS
Un-issued Shares
As at the date of this report, there were 2,470,000 un-issued ordinary shares under options (2,470,000 at balance date). Refer to Note 16 of the financial statements for further details of the options outstanding.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company.
Shares Issued as a Result of the Exercise of Options
During the financial vear, no employees or directors have exercised any option to acquire fully paid ordinary shares in Pro Medicus Limited. Since the end of the financial year, no options have been exercised.
Under the terms of the Share Option Plan 20% of the options vest on each anniversary of the date of commencement 25 August 2000 and can be converted into fully paid shares.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company did not indemnify any person for any reason.
During or since the financial year, the Company has paid premiums in respect of a contract for Directors' & Officers'/Company Re-Imbursement Liability insurance for officers and Pro Medicus Limited for costs incurred in defending proceedings against them.
Terms of this cover are confidential and are not disclosed per Corporations Act 2001 section 300(9).
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.
DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS
Remuneration Policy
In order to maintain good corporate governance the Non-Executive Directors will assume responsibility for determining and reviewing compensation arrangements for the Chief Executive Officer and Technical Director who will in turn review the terms for the Non-Executive directors. The full Board will review the terms of employment for the Company Secretary. It should be noted that no review of Directors' or Company Secretary emoluments has taken place at the date of this report.
The Board has delegated the responsibility of executive remuneration to the management who will assess the appropriateness of the nature and amount of emoluments of such officers 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 quality executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company.
To assist in achieving these objectives, the Board links the nature and amount of officers' emoluments to the Company's financial and operational performance.
Details of the nature and amount of each element of the emolument of each director of the Company and each of two executive officers of the Company receiving the highest emolument for the financial year are as follows:
EMOLUMENTS* OF DIRECTORS OF PRO MEDICUS LIMITED
| Annual EmolumentsBaseFee/Salary | Other | Long Term EmolumentsOptions Vesting During the CurrentPeriod @ | Super-annuation | |||
|---|---|---|---|---|---|---|
| Number | $%$ ofRemuneration | |||||
| A. B. Hall | 239.481 | 8.632 | 85,000 | 32.217 | 11.1 | 10.519 |
| S. A. Hupert | 239.481 | 10.072 | 85,000 | 32,217 | 11.0 | 10.519 |
| M. K. Ward | 60,000 | 80,000 | 30.322 | 31.7 | 5.400 | |
| P.D. Jonson | 30.000 | 40,000 | 15.161 | 31.7 | 2,700 | |
| P. G. Molvneux | 30.000 | 40.000 | 15.161 | 31.7 | 2.700 |
EMOLUMENTS* OF THE TWO MOST HIGHLY PAID EXECUTIVE OFFICERS* OF THE COMPANY
| Annual Emoluments | Long Term Emoluments | ||||
|---|---|---|---|---|---|
| Salary | Bonus | Options Vesting during the CurrentPeriod @ | Superannuation | ||
| Number | |||||
| D. Tauber | 239,481 | 70,000 | 26,532 | 10.519 | |
| G. W. Holden | 97.515 | -------- | 17.000 | 6,443 | 22,485 |
Notes
The terms 'director' and 'officer' have been treated as mutually exclusive for the purposes of this disclosure.
The elements of emoluments have been determined on the basis of the cost to the Company
Executives are those directly accountable and responsible for the operational management and strategic direction of the Company. ₿ Interpretation of this definition results in two staff members being identified for reporting purposes.
The company has adopted the fair value measurement provisions of ED 108 "Share-based Payment" prospectively for all options granted ◎ to directors and relevant executives, which have not vested as at 1 July 2002. The fair value of such grants is being amortised and disclosed as part of director and executive emoluments on a straight-line basis over the vesting period. No adjustments have been or will be made to reverse amounts previously disclosed in relation to options that never vest (i.e., forfeitures). From 1 July 2002, options granted as part of director and executive emoluments have been valued using a Black Scholes option pricing model, which takes account of factors including the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected dividends on the underlying share, current market price of the underlying share and the expected life of the option. For further details, refer to Note 20 to the financial statements.
DIRECTORS' MEETINGS
The numbers of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follows:
| Strategic Planning | |||
|---|---|---|---|
| Directors' Meetings | Committee | Audit Committee | |
| Number of meetings held: | |||
| Number of meetings attended: | |||
| A. B. Hall | |||
| S. A. Hupert | |||
| M. K. Ward | |||
| P.D. Jonson | 10 | ||
| P. G. Molyneux |
No Audit Committee meetings were held during the financial period however the committee was constituted in June and the first meeting was held on 13 August 2003.
Signed in accordance with a resolution of the Directors.
M K Ward Director Melbourne, 4 September 2003.
STATEMENT OF FINANCIAL PERFORMANCE
| YEAR ENDED 30 JUNE 2003 | Notes | 2003$'000 | 2002$'000 |
|---|---|---|---|
| REVENUES FROM ORDINARY ACTIVITIES | 2 | 9,502 | 10,414 |
| Borrowing costs expense | 3 | (14) | (10) |
| Other expenses from ordinary activities | 3 | (3,051) | (3,646) |
| PROFIT FROM ORDINARY ACTIVITIES BEFOREINCOME TAX EXPENSE | 6.437 | 6,758 | |
| INCOME TAX EXPENSE RELATING TO ORDINARYACTIVITIES | 4 | (1,891) | (1,946) |
| PROFIT FROM ORDINARY ACTIVITIES AFTERINCOME TAX EXPENSE | 4.546 | 4.812 | |
| NET PROFIT | 4,546 | 4,812 | |
| NET PROFIT ATTRIBUTABLE TO MEMBERS OF PROMEDICUS LIMITED | 17 | 4,546 | 4812 |
| TOTAL CHANGES IN EQUITY OTHER THAN THOSERESULTING FROM TRANSACTIONS WITH OWNERSAS OWNERS | 4.546 | 4.812 | |
| Basic earnings per share (cents per share) | 22 | 4.58 | 4.8 |
| Diluted earnings per share (cents per share) | 22 | 45 | 4.8 |
| Franked dividends per share (cents per share) | 5 | 325 | 2.50 |
STATEMENT OF FINANCIAL POSITION
| AS AT 30 JUNE 2003 | Notes | 2003 | 2002 |
|---|---|---|---|
| $'000 | $'000 | ||
| CURRENT ASSETS | |||
| Cash assets | 9.579 | 1,941 | |
| Receivables | 6 | 2,483 | 2,901 |
| Inventories | 7 | 5 | 10 |
| Other financial assets | 8 | 6,000 | |
| TOTAL CURRENT ASSETS | 12,067 | 10,852 | |
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 9 | 239. | 307 |
| Deferred tax assets | 10 | 2396 | 225 |
| TOTAL NON-CURRENT ASSETS | 476 | 532 | |
| TOTAL ASSETS | 12,548 | 11,384 | |
| CURRENT LIABILITIES | |||
| Payables | 11 | 280 | 611 |
| Interest-bearing liabilities | 12 | 68 | 249 |
| Current tax liabilities | 4 | 556 | 841 |
| Provisions | 13 | 492 | 1,980 |
| TOTAL CURRENT LIABILITIES | 1396 | 3,681 | |
| NON-CURRENT LIABILITIES | |||
| Interest-bearing liabilities | 14 | 123 | |
| Deferred tax liabilities | 4 | m | 14 |
| Provisions | 15 | 成就 | 237 |
| TOTAL NON-CURRENT LIABILITIES | 399 | 251 | |
| TOTAL LIABILITIES | 1,795 | 3,932 | |
| NET ASSETS | 10,748 | 7452 | |
| EQUITY | |||
| Contributed equity | 16 | 9 | 9 |
| Retained profits | 17 | 10.739 | 7,443 |
| TOTAL EQUITY | 10,748 | 7452 |
STATEMENT OF CASH FLOWS
| YEAR ENDED 30 JUNE 2003 | 2003 | 2002 | |
|---|---|---|---|
| Notes | $'000 | $'000 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Receipts from customers | 9,451 | 10,286 | |
| Payments to suppliers and employees | (3.153) | (3,838) | |
| Interest received | BBB | 265 | |
| Borrowing costs | 119 | (10) | |
| Income tax paid | (2491) | (2,367) | |
| NET CASH FLOWS FROM OPERATING ACTIVITIES | 18(a) | 4,476 | 4,336 |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of property, plant and equipment | 141) | (18) | |
| Redemption/(Purchase) of commercial bills | 6,000 | (2,200) | |
| NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES | 5,969 | (2,218) | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Repayments of hire purchase borrowings | (U) | (69) | |
| Payment of dividends on ordinary shares | (2.750) | (1,500) | |
| NET CASH FLOWS (USED IN) FINANCING ACTIVITIES | (2,607) | (1,569) | |
| NET INCREASE/(DECREASE) IN CASH HELD | 7,638 | 549 | |
| Add opening cash brought forward | 1.941 | 1,392 | |
| CLOSING CASH CARRIED FORWARD | 18(b) | 9.579 | 1,941 |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of accounting
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, which includes applicable Accounting Standards. Other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also been complied with.
The financial statements have been prepared in accordance with the historical cost convention. Cost in relation to assets represents the cash amount paid or the fair value of the assets given in exchange.
(b) Foreign currencies
Translation of foreign currency transactions
Transactions in foreign currencies are converted to local currency at the rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate at the end of the financial year.
(c) Cash and cash equivalents
Cash on hand and in banks and short-term deposits are stated at the lower of cost and net realisable value.
For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks.
(d) Trade and other receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectable debts. A provision is raised for doubtful debts based on general and specific review of outstanding amounts at balance date. Bad debts are written-off as incurred.
(e) Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of finished goods represents the purchase cost and is assigned on a first in first out basis.
(f) Recoverable Amount
Non-current assets are not carried at an amount above their recoverable amount, and where carrying values exceed this recoverable amount assets are written down. In determining recoverable amount, the expected net cash flows have been discounted to their present value using a market determined risk adjusted discount rate.
(g) Plant and equipment
Cost and valuation
Plant and equipment is carried at cost.
Depreciation
$\mathbf{H}$
Depreciation is provided on a straight-line basis or diminishing value basis on all plant and equipment. Depreciation rates are calculated to allocate the cost less estimated residual value at the end of the useful lives of assets against revenue over those estimated useful lives.
| MAJOR DEPRECIATION PERIODS | 2003 | 2002 | |
|---|---|---|---|
| Property Improvements | 2 to 7 years | 2 to 7 years | |
| Motor Vehicles | 4 to 5 years | 4 to 5 years | |
| Office Equipment | $2$ to 7 years | 2 to 7 years | |
| Furniture and Fittings | b years | 5 years | |
| Research and Development Equipment | 3 to 4 years | 3 to 4 years |
(h) Hire Purchase Liability
Acquisitions by means of hire purchase are capitalised recording an asset and liability equal to the fair value of the asset acquired. Hire purchase repayments are allocated between the reduction of the hire purchase liability and interest expense for the year.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont)
(i) Research & development costs
Research and development costs are expensed as incurred.
(j) Trade and other payables
Liabilities for trade creditors and other amounts are carried at cost, which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the entity.
(k) Provisions
Dividends payable are recognised when a legal or constructive obligation to pay the dividend arises, typically following approval of the dividend at a meeting of directors.
(I) Share capital
Ordinary share capital is recognised at the fair value of the consideration received by the Company.
(m) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Sale of goods
Control of goods has passed to the buyer.
Service Income
Where the contract outcome can be reliably measured, control of the right to be compensated for the services and the stage of completion can be reliably measured. Stage of completion is measured by completion of identifiable service segments.
Sales Revenue is recognized over the term of the contract. Where revenue is received in advance, revenue is recognized in the period during which service was provided.
Where the contract outcome cannot be reliably measured, revenue is recognised only to the extent that costs have been incurred.
Licences
Control of the right to receive licensing fees.
Interest
Control of the right to receive the interest payment.
(n) Income Tax
Tax-effect accounting is applied using the liability method whereby income tax is regarded as an expense and is calculated on the accounting profit after allowing for permanent differences. To the extent timing differences occur between the times items are recognised in the financial statements and when items are taken into account in determining taxable income, the net related taxation benefit or liability, calculated at current rates, is disclosed as a future income tax benefit or a provision for deferred income tax. The net future income tax benefit relating to tax losses and timing differences is not carried forward as an asset unless the benefit is virtually certain of being realised.
The income tax expense for the year is calculated using the 30% tax rate.
(o) Employee entitlements
Provision is made for employee entitlement benefits accumulated as a result of employees rendering services up to the reporting date.
Liabilities arising in respect of wages and salaries and annual leave, expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.
Employee benefit expenses and revenues arising in respect of the following categories:
- Wages and salaries, non-monetary benefits, annual leave, long service leave and other leave benefits and
- Other types of employee benefits
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont)
are recognised against profits on a net basis in their respective categories.
Contributions are made by the Company to employee superannuation funds and are charged as expenses when incurred.
(p) Earnings per share
Basic earnings per share is determined by dividing the profit from ordinary activities after related income tax expense by the weighted average number of ordinary shares outstanding during the financial year.
Diluted earnings per share is determined by dividing the profit from ordinary activities after related income tax expense by the weighted average number of ordinary shares (both issued and potentially dilutive) outstanding during the financial year.
(q) Leases
Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.
Operating Leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight-line basis.
Finance Leases
Leases which effectively transfer substantially all of the risks and benefits incidental to ownership of the leased items to the group are capitalized at the present value of the minimum lease payments and disclosed as property plant and equipment under lease. A lease liability of equal value is also recognized.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and charged directly to the Statement of Financial Performance.
(r) Changes in accounting policies
The accounting policies adopted are consistent with those of the previous year except for the accounting policies with respect to provision for dividend.
(i) Provision for dividends
The company has adopted the new Accounting Standard AASB 1044 "Provisions, Contingent Liabilities and Contingent Assets" which has resulted in a change in the accounting for dividends provision. Previously, the company recognised a provision for dividend based on the amount that was proposed or declared after the reporting date. In accordance with the requirements of the new Standard, a provision for dividends will only be recognised at the reporting date where the dividends have been declared, determined or publicly recommended prior to the reporting date. The effect of the revised policy has been to increase the company retained profits and decrease provisions at the beginning of the year by $1,500,000 (refer to note 17 (a)). In accordance with the new Standard, no provision for dividend has been recognised for the year ended 30 June 2003.
(ii) Employee benefits
The company has adopted the revised Accounting Standard AASB 1028 "Employee Benefits", which has resulted in a change in the accounting policy for the measurement of employee benefit liabilities. Previously, the company measured the provision for employee benefits based on remuneration rates at the date of recognition of the liability. In accordance with the requirements of the revised Standard, the provision for employee benefits is now measured based on the remuneration rates expected to be paid when the liability is settled. The effect of the revised policy is immaterial and no change was required to the financial statements.
(s) Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
| NOTES | ||
|---|---|---|
| 30 JUNE 2003 | 2003Notes | 2002 |
| $'000 | $'000 | |
| REVENUE FROM ORDINARY ACTIVITIES2. | ||
| Revenues from operating activities | ||
| Sale of goods | 181 | 1,460 |
| Service Income | 6,146 | 5,798 |
| Licence Income | 2 283 | 2,898 |
| Total revenues from operating activities | 9,100 | 10,156 |
| Revenues from non-operating activities | ||
| Interest | ||
| Other | 402 | 258 |
| Total interest | 402 | 258 |
| Total revenues from outside the operating activities | 402 | 258 |
| Total revenues from ordinary activities | 9,502 | 10.414 |
| 3. EXPENSES AND LOSSES/(GAINS) | ||
| Profit from ordinary activities has been determined after | ||
| charging /(crediting) the following items: | ||
| (a) Expenses | ||
| Borrowing costs expensedInterest on Hire Purchase contracts | Ш | |
| Total borrowing costs expensed | 14 | 10.10 |
| Accounting & Secretarial Fees | 128 | 150 |
| Advertising and Public Relations | $\mathbf{d}$ | 86 |
| Cost of Goods Sold | 295 | 801 |
| Depreciation and Amortisation | ||
| Property ImprovementsMotor Vehicles | W | 17. |
| Office Equipment | 41.48 | 5315 |
| Furniture and Fittings | 19 | 27 |
| Research & Development Equipment | b | 5 |
| Total Depreciation and Amortisation Expenses | 99 | 117 |
| Insurance | 96 | 87 |
| Operating Lease Expenditure | 668 | 157 |
| Other Expenses | 148 | 203 |
| Research & Development costs | 669 | 611 |
| Salaries and Employee Benefits Expense | 1.329. | 1,336 |
| Travel and Accommodation | 63 | 98 |
| Total Other Expenses from Ordinary Activities | 3.051 | 3,646 |
| NOTES cont | |
|---|---|
| 30 JUNE 2003 |
| 30 JUNE 2003 | Notes | 2003$'000 | 2002$'000 |
|---|---|---|---|
| INCOME TAX4. | |||
| The prima facie tax, using tax rates applicable in thecountry of operation, on profit from ordinary activities differs | |||
| from the income tax provided in the financial statements as | |||
| follows: | |||
| Prima facie tax on profit from ordinary activitiesTax effect of permanent differences | 1931 | 2,027 | |
| Non-deductible Entertainment | 顟 | 2 | |
| Life and Trauma Insurance | k. | 11 | |
| Research & Development Concession | (65) | (84) | |
| Non-deductible depreciation on Motor Vehicles | M | 8 | |
| Other items (net) | 3 | ||
| Under/(over) provision of previous year | 78 | (21) | |
| Income tax expense relating to ordinary activities | 1,891 | 1.046 | |
| Deferred tax assets and liabilities | |||
| Current tax payable | 556 | 841 | |
| Provision for deferred income tax - non-current | $\mathcal{P}$ | 14 | |
| Future income tax benefit - non-current | Ź. | 225 | |
| This future income tax benefit will only be obtained if: | |||
| (a) | future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; | ||
| (b) | the conditions for deductibility imposed by tax legislation continue to be complied with; and | ||
| (c) | no changes in tax legislation adversely affect the consolidated entity in realising the benefit. | ||
| DIVIDENDS PAID OR PROVIDED FOR ON5. | |||
| ORDINARY SHARES | |||
| (a) Dividends proposed and recognised as a liability | |||
| Franked dividends 2003: (nil c per share), (2002: 1.5c | 13, 1(r) | 1,500 | |
| per share) | |||
| (b) Dividends paid during the year | |||
| (i) Current year interim | |||
| Franked dividends (1.25c per share) (2002: 1c) | 1,2501,250 | 1,0002,500 | |
| (ii) Previous year final | |||
| Franked dividends (1.5c per share) (2002: 0.5c) | 1,500 | 500 | |
| (c) Dividends proposed and not recognised as a | |||
| liability | |||
| Franked dividend (2.0c per share) (2002: nil) | 1(r) | 2,000 | |
| (d) Franking credit balance | |||
| The amount of franking credits available for the | |||
| subsequent financial year are: | |||
| - franking account balance as at the end of the | 9,997 | 7,635 | |
| financial year (at 30%) | |||
| - franking credits that will arise from the payment of | 1,298 | 1,963 | |
| income tax payable as at the end of the financial | |||
| year | |||
| - franking debits that will arise from the payment of | (1,500) | ||
| dividends as at the end of the financial year- franking credits that will arise from the receipt of | |||
| dividends recognised as receivables at the reporting | |||
| date | |||
| - franking credits that the entity may be prevented from | |||
| distributing in the subsequent financial year | |||
| a a componente de composición de componente de composición de composición de composición de composición de com | 11,295 | 8,098 | |
| The tax rate at which paid dividends have been franked | |||
| is 30%, (2002: 30%). Dividends proposed at 30 June | |||
| 2002 were fully franked at the rate of 30%. |
2002 were fully franked at the rate of 30%.
| NOTES cont | |||
|---|---|---|---|
| 30 JUNE 2003 | Notes | 2003 | 2002 |
| $'000 | $'000 | ||
| 6. RECEIVABLES (CURRENT) | |||
| Trade Debtors | 2.432 | 2,848 | |
| Other Debtors and Prepayments | 51 | 53 | |
| the contract of the contract of the contract of the contract of the contract of the contract of the contract of | 2.483 | 2,901 | |
| Terms and conditions relating to the above financial | |||
| instruments | |||
| Trade debtors are on 30 day trading terms.(i) | |||
| INVENTORIES (CURRENT)7. | |||
| Finished goods | |||
| At costTotal inventories at lower of cost and net realisable value | F,š | 1010. | |
| 8. OTHER FINANCIAL ASSETS (CURRENT) | |||
| Commercial Bills | |||
| At cost | 6,000 | ||
| Total Other Financial Assets | 6,000 | ||
| PROPERTY, PLANT AND EQUIPMENT9. | |||
| Property Improvements | 186 | 184 | |
| Accumulated depreciation | (182) | (165) | |
| Ð | 19 | ||
| Motor Vehicles | 30 | 30 | |
| Accumulated depreciation | (29) | (29)1 | |
| Motor Vehicles Under Hire Purchase | 446 | 446 | |
| Accumulated amortisation | (306) | (265) | |
| 141 | 181 | ||
| Office Equipment | 146 | 119 | |
| Accumulated depreciation | (89) | (71) | |
| 57 | 48 | ||
| Furniture & Fittings | 222 | $\overline{222}$ | |
| Accumulated depreciation | (120)32 | (172)50 | |
| Research & Development Equipment | ítz | 365 | |
| Accumulated depreciation | (190) | (357) | |
| 8 | |||
| Total plant and equipment | 239 | 307 | |
| Total plant and equipment Cost | 1,225 | 1,366 | |
| Accumulated depreciation and amortisation | (986) | (1,059) | |
| Total written down amount | 239 | 307 |
During the period Research & Development Equipment with a zero written down value was scrapped by offsetting the Cost andAccumulated Depreciation amounts to a value of $172,034 (2002: nll). There was no profit effect as a
| NOTES | |||
|---|---|---|---|
| 30 JUNE 2003 | Notes | 2003 | 2002 |
| $'000 | $'000 | ||
| Reconciliations | |||
| Property Improvements | |||
| Carrying amount at beginning | 19 | 36 | |
| Depreciation expense | (M) | (17) | |
| the contract of the contract of the contract of the contract of the contract of the contract of the contract of | þ. | 19 | |
| Motor Vehicles | |||
| Carrying amount at beginning | 1 | 2 | |
| Disposals | |||
| Depreciation expense00000000000000000000000000000000000000 | $\left(1\right)$1 | ||
| Motor Vehicles Under Hire Purchase | |||
| Carrying amount at beginning | 184 | 233 | |
| Depreciation expense | (41) | (52) | |
| and the contract of the contract of the contract of the contract of the contract of the contract of the contract of | 140 | 181 | |
| Office Equipment | |||
| Carrying amount at beginning | 48 | 52 | |
| Additions | Д. | 11 | |
| Depreciation expense | (16) | (15) | |
| the contract of the contract of the contract of the contract of the contract of the contract of the | W | 48 | |
| Furniture & Fittings | |||
| Carrying amount at beginning | 蠅 | 75 | |
| AdditionsDisposals | 2 | ||
| Depreciation expense | (18) | (4)(23) | |
| 1989 - Andrea Maria Andrea, ann an t-Aonaichte ann an t-Aonaichte ann an t-Aonaichte ann an t-Aonaichte ann an | 32 | 50 | |
| Research & Development Equipment | |||
| Carrying amount at beginning | E | 8 | |
| Additions | 5 | ||
| Depreciation expense | 15) | (5) | |
| 8 | |||
| 10. DEFERRED TAX ASSETS | |||
| Future Income Tax Benefit | 2876 | 225 | |
| the contract of the contract of the contract of the contract of the contract of the contract of the contract of | 237 | 225 | |
| 11. PAYABLES (CURRENT)Trade creditors | M | 151 | |
| Other creditors and accruais | 101 | 126 | |
| Goods and services tax | 434 | 252 | |
| 269 | 529 | ||
| Deferred Income | Ш | 82 | |
| Π| 82 | ||
| the contract of the contract of the contract of the contract of the contract of the contract of the | 280 | 611 |
Terms and conditions relating to the abovefinancial instruments:Trade creditors are non-interest bearing and are normally settled on 30-day terms.Offier creditors are non-interest bearing and have an average term of 1 m
$\begin{pmatrix} i \ ii \end{pmatrix}$
| 30 JUNE 2003 | Notes | 2003$'000 | 2002$'000 |
|---|---|---|---|
| 12. INTEREST BEARING LIABILITIES (CURRENT)Hire Purchase Liability- secured | 19(a) | 138 | 249 |
| Terms and conditions relating to the abovefinancial instruments(i) Hire Purchase contracts have a term of 2 yearswith the option to purchase the asset at thecompletion of the term for the asset's residual value.The average discount rate implicit in the leases is7.0%, (2002: 6.6%). Secured hire purchase liabilitiesare secured by a charge over the hired assets.13. PROVISIONS (CURRENT)Dividends on ordinary sharesEmployee entitlements | 20 | 68492 | 249.1.500480 |
| 422 | 1980 |
Terms and conditions relating to the above financial instruments
(i) No dividends were provided for the year ended 2003, (2002: 1.5 cents per ordinary share). The extent to which the dividends are franked, details of the franking account balance at balance date and franking credits available for the subsequent financial year are disclosed in Note 5(d).
| $'000 | 2002$'000 | |
|---|---|---|
| 14. INTEREST-BEARING LIABILITIES (NON-CURRENT)Hire Purchase Liability - secured | . | |
| - 47 M | ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | |
| Terms and conditions relating to the above financialinetrumante | WANNERSHIP |
instruments(i) Hire Purchase contracts have a term of 2 years with the option to purchase the asset at the completion of the term for the asset's residual value. The average discount rate implicit in the leases is 7.0%, (2002: 6.6%). Secured hire purchase liabilities are secured by a charge over the hired assets.
| 30 JUNE 2003 | S'OOO | 2002$'000 | ||
|---|---|---|---|---|
| 15. PROVISIONS (NON-CURRENT)Employee entitlements | 20 | 22 | 23. | |
| 16. CONTRIBUTED EQUITY | 23. | 237 | ||
| (a) | Issued and paid up capitalOrdinary shares fully paid |
(b) Movements in shares on issue
| 2003 | 2002 | |||
|---|---|---|---|---|
| Number of | $'000 | Number of | $'000 | |
| Shares | Shares | |||
| Beginning of the financial year | 100.000.000 | 100.000.000 | ||
| End of the financial year committee | -466. |
(c) Share Options
Options over ordinary shares:
Employee share scheme
During the financial year, no additional options were issued over ordinary shares. The Option Plan states options are exercisable from the first anniversary from the date of issue with an issue term of 5 years. During the financial year nil (2002: 20,000) options were cancelled due to option holding staff leaving employment with Pro Medicus Ltd. The options had an exercise price of $1.15 and each option converts to one fully paid share. Details are provided in Note 20. At the end of the year there were 2,470,000 (2002: 2,470,000) unissued ordinary shares in respect of which options were outstanding.
(d) Terms and conditions of contributed equity
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
| Notes | 2003$'000 | 2002$'000 | ||
|---|---|---|---|---|
| 17. RESERVES AND RETAINED PROFITS | ||||
| Retained profits | 10.739 | 7443 | ||
| (a) | Retained profitsBalance at the beginning of yearNet profit attributable to members of Pro MedicusLimited | 74434.546 | 5.1314,812 | |
| Adjustment arising from adoption of revisedaccounting standards;AASB 1028 Employee BenefitsAASB 1044 Provisions, Contingent Liabilities and | ||||
| Contingent Assets | 1(r) | 1.500 | ||
| Total available for appropriation | 13.489 | 9,943 | ||
| Dividends provided for or paid | (2,750) | (2,500) | ||
| Balance at end of year | 10.739 | 7443 |
| 30 JUNE 2003Notes | 2003$'000 | 2002$'000 |
|---|---|---|
| 18. STATEMENT OF CASH FLOWS | ||
| (a) Reconciliation of the profit from ordinary activitiesafter tax to the net cash flows from operating activities | ||
| Profit from ordinary activities after tax | 4,546 | 4.812 |
| Non-Cash Items | ||
| Depreciation of non-current assets | 99 | 117 |
| Changes in assets and liabilities | ||
| (Increase)/decrease in trade and other receivables | 411 | 537 |
| (Increase)/decrease in inventory(Increase)/decrease in future income tax benefit | 108 | |
| (Increase)/decrease in prepayments | (12) | (13)9 |
| (Decrease)/increase in deferred income | (70) | (400) |
| (Decrease)/increase in trade and other creditors | (140) | (387) |
| (Decrease)/increase in tax provision | (285) | (412) |
| (Decrease)/increase in deferred income tax liability | $\left( 2\right)$ | 3 |
| (Decrease)/increase in goods and services tax payable | (121) | (89) |
| (Decrease)/increase in employee entitlementsNet cash flow from operating activities | 394476 | 514 3 3 6 |
| (b) Reconciliation of cashCash balance comprises: | ||
| - cash on hand | 9,579 | 1,941 |
| Closing cash balance | 9.579 | 1 941 |
| 19. EXPENDITURE COMMITMENTS | ||
| (a) Commitments in relation to hire purchase | ||
| agreements are payable as follows: | ||
| - not later than one year | 68 | 250 |
| - later than one year and not later than five years | 187 | |
| - aggregate lease expenditure contracted for at balancedate | 202 | 250 |
| Less: Future finance charges | (11) | (1) |
| 191 | 249 | |
| Aggregate expenditure commitments comprise: | ||
| - current (Note 12) | 68 | 249 |
| - non-current (Note 14)TANAH MANAH BAGASI DAN MANAH DAN BAGASI DAN DAN BAGASI DAN BAGASI DAN BAGASI DAN BAGASI DAN BAGASI DAN BAGASI | 428 | |
| 384 | 249 | |
| (b) Non-Cancellable Operating Lease expenditure | ||
| commitmentsMinimum lease payments | ||
| - not later than one year | 184 | 175 |
| - later than one year and not later than five years | 246 | 379 |
| aggregate lease expenditure contracted for at balance | 400 | 554 |
| date |
| 30 JUNE 2003 | 2003$'000 | 2002$'000 |
|---|---|---|
| 20. EMPLOYEE ENTITLEMENTS ANDSUPERANNUATION COMMITMENTS | ||
| Employee Entitlements | ||
| The aggregate employee entitlement liability is comprised of: | ||
| Provisions (current) | 480 | |
| Provisions (non-current) | 237 | |
| 756 |
Employee Share Incentive Scheme
An employee share incentive scheme was established on 25th August 2000 whereby directors and staff of the Company were issued with options over the ordinary shares of Pro Medicus Limited. The options, issued for nil consideration, have an exercise price of $1.15. Options vest at 20% per annum commencing at the end of the first anniversary of issue. The options cannot be transferred and will not be quoted on the ASX. There are currently 15 staff members, 2 executive directors and 3 non-executive directors eligible for this scheme.
Information with respect to the number of options granted under the employee share incentive scheme is as follows:
| 2003 | 2002 | |||
|---|---|---|---|---|
| Number ofOptions | Weightedaverageexerciseprice | Number ofOptions | Weightedaverageexerciseprice | |
| Balance at beginning of the year | 2,470,000 | $1.15 | 2.490.000 | $1.15 |
| - granted | ||||
| - forfeited | (20,000) | $1.15 | ||
| - exercised | ||||
| Balance at end of year | 2,470,000 | $1.15 | 2.470.000 | $1.15 |
| Exercisable at end of year | 988,000 | $115 | 494 000 | $1.15 |
(a) Options held at the beginning of the reporting period:
The following table summarises information about options held by employees as at 1 July 2002:
| Number of options | Grant Date | Vesting Date | Expiry Date | Weighted averageexercise price |
|---|---|---|---|---|
| 494,000 | 25 August 2000 | 25 August 2001 | 25 August 2010 | $1.15 |
| 494,000 | 25 August 2000 | 25 August 2002 | 25 August 2010 | $1.15 |
| 494.000 | 25 August 2000 | 25 August 2003 | 25 August 2010 | $1.15 |
| 494.000 | 25 August 2000 | 25 August 2004 | 25 August 2010 | $1.15 |
| 494,000 | 25 August 2000 | 25 August 2005 | 25 August 2010 | $1.15 |
(b) Options granted during the reporting period:
No options (2002 nil) were granted during the year.
(c) Options exercised:
No options (2002 nil) were exercised during the year.
(d) Options held as at the end of the reporting period:
The following table summarises information about options held by the employees as at 30 June 2003:
| Number of options | Grant Date | Vesting Date | Expiry Date | Weighted averageexercise price | |
|---|---|---|---|---|---|
| 494,000 | 25 August 2000 | 25 August 2001 | 25 August 2010 | $1.15 | |
| 494,000 | 25 August 2000 | 25 August 2002 | 25 August 2010 | $1.15 | |
| 494,000 | 25 August 2000 | 25 August 2003 | 25 August 2010 | $1.15 | |
| 494.000 | 25 August 2000 | 25 August 2004 | 25 August 2010 | $1.15 | |
| 494,000 | 25 August 2000 | 25 August 2005 | 25 August 2010 | $1.15 |
30 JUNE 2003
Notes
(e) Fair value of options:
The fair value of each option is estimated on the date of grant using a Black Scholes option-pricing model with the following assumptions used for grants made on 25 August 2000.
| Dividend yield | 4.68% |
|---|---|
| Expected volatility | 51.9% |
| Historical volatility | 51.9% |
| Risk-free interest rate | 6.37% |
| Expected life of option | 7.0 years |
The dividend yield reflects the assumption that the current dividend payout will continue in line with the policy adopted to determine the 2003 final dividend which was based on a payout of between 60% and 70% of Profit after Tax. As no options have been exercised the expected life of the options is based on best estimate and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.
The resulting fair value per option vesting after 1 July 2001 are:
| Number of options | Grant date | Vesting date | Weighted average fairvalue |
|---|---|---|---|
| 494,000 | 25 August 2000 | 25 August 2001 | 0.44 |
| 494.000 | 25 August 2000 | 25 August 2002 | 0.44 |
| 494.000 | 25 August 2000 | 25 August 2003 | 0.44 |
| 494,000 | 25 August 2000 | 25 August 2004 | 0.44 |
| 494,000 | 25 August 2000 | 25 August 2005 | 0.44 |
Currently, these fair values are not recognised as expenses in the financial statements. However, should these grants be expensed, they would be amortised over the vesting periods resulting in an increase in employee benefits expense of $187,237 for the 2003 financial year (2002: $312,889). Note that no adjustments to these amounts have been made to reflect estimated or actual forfeitures (i.e., options that do not vest).
Superannuation Commitments
Superannuation contributions are paid by the Company in accordance with relevant statutory requirements. Contributions of 9% of employee's ordinary time earnings are legally enforceable in Australia up to 30 June as the legal minimum. The superannuation plans provide accumulated benefits.
21. SUBSEQUENT EVENTS
$(a) 2003$
A Final Dividend of 2.0 (2002: nil) cents per share has been declared since 1 July. Please refer Note 5(c). This Final Dividend was based on the Directors' decision to change the dividend policy in future to distribute between 60 and 70% of Profit after Tax. Previously this was based on a payout of 50%.
No other significant post balance date events have been identified.
| 30 JUNE 2003 | Notes | 2003 | 2002 |
|---|---|---|---|
| 22. EARNINGS PER SHARE | |||
| diluted earnings per shareNet Profit | The following reflects the income and share data used in the calculations of basic and | 4.546 | 4.812 |
| Effect of dilutive securities: | Weighted average number of ordinary shares on issue used in the calculation of basicearnings per share. Comparative figure has been adjusted for share split. | 100.000.000 | 100,000,000 |
| Share Options | 836.416 | 418.208 | |
| per share. Comparative figure has been adjusted for share split. | Weighted average number of ordinary shares used in the calculation of diluted earnings | 100 836 416 | 100.418.208 |
| (a) Conversions, calls, subscription or issues after 30 June 2003 | $\sim$ and $\sim$ and $\sim$ and $\sim$ and $\sim$ and $\sim$ and $\sim$ and $\sim$ and $\sim$ |
Since the end of the financial year, no ordinary shares have been issued pursuant to the employee share incentive scheme.There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of
| Notes | 2003$ | 2002$ |
|---|---|---|
| 23. REMUNERATION OF DIRECTORS(a) Directors' remunerationIncome paid or payable, or otherwise made available,in respect of the financial year, to all directors of ProMedicus Limited, directly or indirectly, from the entityor any related party. | 655 660 | 648.304 |
| No. | No. | |
| The number of directors of Pro Medicus Limitedwhose income (including superannuationcontributions) falls within the following bands is:$$30,000 - $39,999$$$60,000 - $69,999$$250,000 - $259,999$$260,000 - $269,999$ | 2ä | 2111 |
| The above disclosure does not require the inclusion of the FairValue of any options. | ||
| 24. REMUNERATION OF EXECUTIVES | ||
| Remuneration received or due and receivable byexecutive officers of the Company whoseremuneration is $100,000 or more, from the Companyor any related party, in connection with themanagement of the affairs of the Company, whetheras an executive officer or otherwise | 894,860 | 839,362 |
| No. | Nο. | |
| The number of executives of the Company whoseremuneration falls within the following bands:$120,000 - $129,999$200,000 - $209,999$250,000 - $259,999$260,000 - $269,999 | 1111 | |
| 25. AUDITORS' REMUNERATION | ||
| Amounts received or due and receivable by Ernst & Young for:- an audit or review of the financial report of the Company- other services in relation to the Company | 56.0003,50059,500 | 54,00014.15068 150 |
26. RELATED PARTY DISCLOSURES
Directors
The directors of Pro Medicus Limited during the financial year were: M K Ward S A Hupert PD Jonson A B Hall P G Molyneux
Other related party transactions Directors and director-related entity transactions Director-related entity
Lease payments of $162,718 (2002 $157,365) in respect of the operating premises paid to Champagne Properties Pty. Ltd., an entity controlled by S. Hupert and A. Hall. Commercial arrangements on an 'arms length basis' have been determined by an independent assessment of rental and lease terms.
Equity instruments of directors
Interests at balance date
Interests in the equity instruments of Pro Medicus Limited held by directors of the reporting entity and their director-related entities:
| Ordinary Shares | Options over | ||||
|---|---|---|---|---|---|
| Fully Paid | Ordinary Shares | ||||
| 2003 | 2002 | 2002 | |||
| Number | Number | Number | Number | ||
| A B Hall | 40.068.500 | 40,068,500 | 425,000 | 425,000 | |
| S A Hupert | 40.072,660 | 40,072,660 | 425.000 | 425.000 | |
| M K Ward | 50.000 | 50,000 | 400.000 | 400,000 | |
| PD Jonson | 50,000 | 50,000 | 200.000 | 200,000 | |
| P Molyneux | 25,000 | 25,000 | 200,000 | 200,000 | |
| 80,266,160 | ,650,000 |
Movements in directors' equity holdings
Number of shares and options acquired during the financial year by directors and director-related entities nil (2002: 32,160). All equity dealings with directors have been entered into with terms and conditions no more favourable than those that the entity would have adopted if dealing at arm's length.
27. SEGMENT INFORMATION
The Company operates predominantly in one industry being, information technology within the health care industry and in one geographical area being Australia.
.........
28. FINANCIAL INSTRUMENTS
28(a) Accounting policiesDetails of significant accounting policies in respect of each class of financial asset and financial liability are disclosed in Note 1 Significant Accounting Policies.
28(b) Interest rate risk
The Company's exposure to interest rate risks and the effective interest rate of financial assets and financial llabilities, both recognised and unrecognised at the balance date, are as follows:
| Floating interest | Fixed interest rate maturing in: | Non-interest | Total carrying | Weighted | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Financial Instruments | rate | 1 year or less | Over 1 to 5 years | More than 5 years | bearing | amount as per | average effective | |||||||
| the balance sheet | interest rate | |||||||||||||
| 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | |
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | % | % | |
| Financial assets$\langle i \rangle$ | ||||||||||||||
| Cash | 9,579 | 1,941 | 9,5(9) | 1,941 | 32. | 33 | ||||||||
| Trade and other receivables | -- | ىت | ىسە | 2483 | 2,901 | 2,483 | 2,901 | NES | N/A | |||||
| Commercial Bills | 6,000 | 6,000 | 48. | 4.40 | ||||||||||
| zagz | ||||||||||||||
| Total financial assets | 9579 | 1941 | 6,000 | 1992 | 2.488 | $2 - 901$ | 12,062 | 10842 | m | 44 | ||||
| Financial liabilities(ii) | ||||||||||||||
| Trade creditors and accruais | 269 | 529 | 269 | 529 | NIA. | NA | ||||||||
| Hire Purchase Liability | 68 | 249 | 428. | ىست | ىت | 491 | 249 | $70,$ | 6.6 | |||||
| Deferred Income | m | 82 | M | 82 | NA | N/A | ||||||||
| Total Financial Liabilities | 68 | 249 | ara. | 88 | ÷ | 280 | 611 | 871 | 860 | 7.0 | 66 |
$-26 -$
28. FINANCIAL INSTRUMENTS (Cont'd)
28(c) Net fair values
For all financial assets and liabilities, the carrying amount approximates fair value.
28(d) Credit risk exposures
The Company minimises concentrations of credit risk in relation to trade receivables by undertaking transactions with a large number of customers within the specified industry.
Concentrations of credit risk
Concentrations of credit risk on trade receivables arise in the following industries:
| Maximum credit risk exposure* for each concentration | ||||||||
|---|---|---|---|---|---|---|---|---|
| Percentage of total trade debtors | $'000 | |||||||
| 2003 | 2002 | 2003 | 2002 | |||||
| Diagnostic Imaging | 100 | 2.848 | ||||||
| --------------------------------------- | 00 | .848 |
*The maximum credit risk exposure does not take into account the value of any collateral or other security held, in the event other entities/parties fail to perform their obligations under the financial instruments in question. Credit risk in trade receivables is managed in the following ways:
-
payment terms are 30 days;
-
a risk assessment process is used for customers over $50,000; and
-
high dollar value deposits and/or bank & other guarantees are obtained for high-risk customers.
In accordance with a resolution of the directors of Pro Medicus Limited, I state that:
- $(1)$ In the opinion of the directors:
- (a) the financial statements and notes of the company are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the company's financial position as at 30 June 2003 and of it's performance for the year ended on that date; and
- (ii) complying with Accounting Standards and Corporations Regulations 2001; and
- (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
- (a) the financial statements and notes of the company are in accordance with the Corporations Act 2001, including:
On behalf of the Board
kan kan tau kan mang
M K Ward Chairman
Melbourne, 4 September 2003
SILENCT & VELLAGE
Feed with the m AND THE GENERAL PROPERTY Aux realis 1970 ass) (1910) an de part de C. (1983).Sédimonyme (1970-1988).
■ No. 000 トリスト 4000000000000000000000000000000000000 草原& - 数草 英國聯合國 科莱格勒 THE THIRD CARD COMMON
Independent audit report to members of Pro Medicus Limited
Scome
The financial report and divertors responsibility
The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for Pro Medicus Limited (the company), for the year ended 30 June 2003.
The directors of the company are responsible for preparing a financial report that gives a trac and fair view of the financial position and performance of the company, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designel to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.
Andit argrenach
We conducted an independent audit of the financial report in order to express an opinion on it to the menhes of the commov. Our sudit was conducted in accordance with Australian Auditing Standards in order to provide regonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of nersuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.
We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's financial position, and of its performance as represented by the neculis of its operations and cash flows.
We formed our audit opinion on the basis of these procedures, which included:
- examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
- assessing the appropriateness of the accounting policies and disclosures used and the $\blacksquare$ resonablencs of significant accouning estimates made by the directors.
While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our and it was not designed to provide assurance on internal controls.
We performed procedures to assess whether the substance of business transactions was accurately reflected in the fanancial report. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.
a higherty control by the Approximation fightnian, improved and or that Pentru arms) thankness are 1940 (1953) p
EILTE VIINT
Indenemience
We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations $A$ er $2091.$
Audit opinion
In our opinion, the financial report of Pro Medicus Limited is in accordance with:
- the Cornorations Act 2001, including: 【組》
- giving a true and fair view of the financial position of Pro Medicus Limited at 30 ${3}$ lune 2003 and of its performance for the year ended on that date; and
- complying with Accounting Standards in Australia and the Corpovations (ii) Regulations 2001; and
- th) other mandatory financial reporting requirements in Australia.
Enst & Young
Errat & Young
David Peterson Partner Melbosme
Date: 4 September 2003
ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 29 August 2003
Distribution of equity securities $(a)$
The number of shareholders, by size of holding, in each class of share are:
| Ordinary shares | ||||
|---|---|---|---|---|
| Number ofholders | Number ofshares | |||
| - | 1,000 | 124 | 91,245 | |
| 1,001 | - | 5,000 | 595 | 1,919,603 |
| 5,001 | - | 10,000 | 266 | 2,193,253 |
| 10,001 | - | 100.000 | 174 | 4,778,885 |
| 100,001 | and over | 12 | 91,017,014 | |
| 1.171 | 100.000.000 | |||
| The number of shareholders holding less than a |
43
17,017
marketable parcel of 569 shares are:
$(b)$ Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
| Listed ordinary shares | |||
|---|---|---|---|
| Number ofshares | Percentageof ordinaryshares | ||
| 1 | S Hupert | 40.072,660 | 40.1% |
| 2 | A Hall | 40,068,500 | 40.1% |
| 3 | Citicorp Nominees Pty Ltd <cfs companies<="" developing="" td="">7.233.1577.2% | 7.233.157 | 7.2% |
| 4 | Citicorp Nominees Pty Ltd <cfsil cfs="" companies<="" small="" td="" ws="">1,064,8011.1% | 1,064,801 | 1.1% |
| 5 | Commonwealth Custodial Services Limited | 796,724 | 0.8% |
| 6 | Mirrabooka Investments Limited | 471,429 | 0.5% |
| 7 | Cogent Nominees Pty Limited | 438,558 | 0.4% |
| 8 | Queensland Investment Corporation | 409,746 | 0.4% |
| 9 | National Nominees Limited | 241,177 | 0.2% |
| 10 | GE Moir | 126,422 | 0.1% |
| 11 | Invia Custodian Pty Limited | 120,000 | 0.1% |
| 12 | RP Hall | 115,000 | 0.1% |
| 13 | Ms Y K Chun | 100,000 | 0.1% |
| 14 | S G Hannes | 100,000 | 0.1% |
| 15 | J & R Hupert | 100,000 | 0.1% |
| 16 | J & P O'Shea | 100,000 | 0.1% |
| 17 | J P Morgan Nominees Australia Limited | 90,483 | 0.1% |
| 18 | ANZ Nominees | 78,941 | 0.1% |
| 19 | Tower Trust Limited | 78,024 | 0.1% |
| 20 | S Uldridge | 76,485 | 0.1% |
| 91,882,107 | 91.9% |
Substantial shareholders $(c)$
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Law are: $\mathbf{a}$ $\mathbf{r}$
| --------------------------------------- | Number of shares |
|---|---|
| S. Hupert | 40.072.660 |
| A Hall | 40.068.500 |
| Commonwealth Bank of Australia | 8,297,958 |
Voting rights $(d)$
All ordinary shares carry one vote per share without restriction.
Corporate Governance
The Board of Directors of Pro Medicus Limited is responsible for the corporate governance of the entity. The Board guides and monitors the business and affairs of Pro Medicus Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.
To ensure the Board is well equipped to discharge its responsibilities it supports and has adopted where considered appropriate, the principles set out in the ASX Corporate Governance Council "Principles of Good Corporate Governance and Best Practice Recommendations" dated March 2003.
The board has codified a list of its responsibilities consistent with the recommendations and details are disclosed on the company website.
The Board wishes to advise that it continues to maintain responsibility for the actions of the chief executive officer and any tasks delegated to the management by the Board.
Directors' Appointment Letters have not been revised in the prescribed format as the board considered this unnecessary given the small number of fairly recently appointed current directors who understand their roles and responsibilities. The board has undertaken that the recommended format should be used for any future director appointments.
Composition of the Board
The composition of the Board was determined in accordance with the following principles and guidelines:
- The Board should comprise at least five directors and should maintain a majority of non-executive directors:
- The Chairperson must be a non-executive director and not occupy the role of CEO;
- The Board should comprise directors with an appropriate range of qualifications and expertise; and
- The Board shall meet monthly and follow meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.
The non-executive directors are "independent" according to the assessment criteria in "Principle 2" of the ASX Corporate Governance Council March 2003 recommendations.
The directors in office at the date of this statement are:
| Name | Position |
|---|---|
| M K Ward | Chairperson, Non-Executive Director |
| P D Jonson | Deputy Chairperson, Non-Executive Director |
| S A Hupert | Managing Director, Chief Executive Officer |
| A B Hall | Technology Director |
| P G Molyneux | Non-Executive Director |
Code of Conduct and Securities Trading Policy
The board has developed a "Code of Conduct" and a "Securities Trading Policy" consistent with the recommendations and details are disclosed on the company website.
Committees
The current Board of five Directors was appointed on April 4, 2000. Due to the relatively recent appointment and small number of Directors, the Board decided it was more appropriate to handle nomination and remuneration issues at full Board level. No Committees for these functions have been established at this time.
In addition the full Board handles any matters as and when they arise concerning environmental issues, occupational health and safety, finance and treasury.
In order to maintain good corporate governance the Non-Executive Directors will assume responsibility for determining and reviewing compensation arrangements for the Chief Executive Officer and Technology Director who will in turn review the terms for the Non-Executive Directors. The full Board will review the terms of employment for the Company Secretary. It should be noted that no review of these emoluments has taken place at the date of this report.
The Board has delegated the responsibility of executive remuneration to the management who will assess the appropriateness of the nature and amount of emoluments of such officers 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 quality executive team. Independent experts have been consulted to provide appropriate information to ensure decisions are soundly based.
The recent appointment of appropriately skilled Non-Executive Directors, together with a broadly unchanged business base has meant no new director nominations have been required to date.
Corporate Governance
Audit Committee
The board has established an audit committee, which operates under a charter approved by the Board.
It is the Board's responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes. This also includes the safeguarding of assets, the maintenance of proper accounting records, and reliability of financial information as well as non-financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated the responsibility for the establishment and maintenance of a framework of internal control and ethical standards for the management of the entity to the audit committee.
The committee also provides the board with additional assurance regarding the reliability of financial information for inclusion in the financial reports. All members of the audit committee are non-executive directors
The members of the audit committee are:
P. G. Molvneux Chairperson
M. K. Ward
P. D. Jonson
The audit committee is also responsible for nomination of the external auditor and reviewing the adequacy of the scope and quality of the annual statutory audit and half yearly audit or review.
A copy of the Audit Committee Charter is posted on the company website.
The Company is small with a total staff at present of seventeen full time people so it should be understood that the Chief Executive Officer and Chief Financial Officer play key roles in all financial aspects of the business. Both people will provide a written assurance to the board stating the financial reports show a "true and fair view" of the results.
Strategic planning has been an important objective of the Board. Meetings are scheduled so that all Board members can attend and are conducted in an informal fashion to allow non-executive directors to gain enhanced industry, customer, product and research knowledge.
Board Responsibilities
As the Board acts on behalf of and is accountable to the shareholders, it seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. The Board seeks to discharge these responsibilities in a number of ways.
The Board has delegated responsibility for the operation and administration of the entity to the Chief Executive Officer and the executive team. The Board ensures that this team is appropriately qualified and experienced to discharge their responsibilities and has in place procedures to assess the performance of the Chief Executive and the executive team.
The Board is responsible for ensuring that management's objectives and activities are aligned with the expectations and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved. In addition to the establishment of the committee referred to above, these mechanisms include the following:
- Board approval of strategic plans, which encompass the entity's vision, mission and strategy statements, designed to meet stakeholders' needs and manage business risk;
- the strategic plan is a dynamic document and the Board is actively involved in developing and approving initiatives and strategies designed to ensure the continued growth and success of the entity;
- GB. implementation of operating plans and budgets by management and Board monitoring of progress against budget - this includes the establishment and monitoring of key performance indicators (both financial and non-financial) for all significant business processes; and
- use of appropriately skilled professionals to provide advice on relevant discussion topics and procedures to allow Directors, in the furtherance of their duties, to seek independent professional advice at the Company's expense.
In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the Chairman annually reviews the performance of all Directors who will be asked to retire from the board if not performing in a satisfactory manner.
Monitoring of the Board's Performance and Communication to Shareholders
Continuous Disclosure Policy
The board has developed a written policy to ensure compliance with the ASX Listing Rules on continuous disclosure and has adopted measures to ensure the market and shareholders are fully informed. The measures in place require all potential market sensitive matters are discussed with the Chief Executive
Corporate Governance
Officer who in conjunction with the Chairman and other relevant directors decide whether to make an appropriate announcement to the market.
Only nominated authorised persons have the authority to release these communications to the ASX. This policy is displayed on the company website.
Shareholder Communication
The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the Directors. Information is communicated to the shareholders through:
- the annual report which is distributed to all shareholders registered to receive copies: Ġ.
- the annual general meeting and other meetings so called to obtain approval for Board action as $ appropriate;
- Ó3 an up to date website - www.promedicus.com.au;
- $ email contact with registered users; and
- ₩ special written communications to shareholders distributed with the dividend notifications.
The company is adopting procedures to ensure that any material given to a particular group is available to all interested parties via the company website. This includes any material presented at the Annual General Meeting.
A representative of the external auditors Ernst & Young will continue to attend the Annual General Meeting.
Risk Management Policies
Pro Medicus Limited has no interest, or at this time any significant currency sensitive assets or liabilities. Small value GBP currency invoice proceeds have been deposited to a designated foreign currency account for use in future UK operations, thus providing a natural hedge on currency changes.
The Board oversees appropriate backup procedures for important company data.
Detailed annual review of insurance policies in force to ensure cover is at appropriate levels to safequard key executives, Company assets and operations.
The Board regularly considers succession planning to ensure staff of appropriate skill and experience are available to the Company.
The Board accepts the need for more explicit formal policies and processes for risk assessment, management and control.
Corporate information
ABN 25 006 194 752
Directors
The names of the Directors of the Company in office during the year and until the date of this report are: Melvyn Keith Ward Chairman Dr Peter David Jonson Deputy Chairman Dr Sam Aaron Hupert Managing Director Anthony Barry Hall Technical Director Philip Gregory Molyneux Non-Executive Director
Company Secretary
Geoffrey William Holden CA
Registered Office
450 Swan Street Richmond, VIC, 3121 (03) 9429 8800
Solicitors
Madgwicks
Bankers
Bank of Melbourne
Share Register
Computershare Registry Services Pty Limited Level 12 565 Bourke Street Melbourne, VIC, 3000 Ph (03) 9615 5970
Auditors
Ernst & Young