I don't know much about accountancy, as my own accountant despairs at times.
It is clear from the MED Annual Report 2018 that MED and AXIS are closely related, except that MED is a public company and AXIS is a private company. AXIS shares premises with MED.
Some facts are included in the annual report. Reference to 'the Company' are references to MED:
Page 7 "As noted in section (i), the Company employs certain persons in its own right and management services are provided to the Company by AXIS. AXIS pays the Chairman and Managing Director's remuneration. AXIS invoices the Company for remuneration paid to the Company's Executives (not being Directors) based on the time the Executive spends in servicing the requirements of the Company."
Page 11 "AXIS Consultants Pty Ltd ("AXIS") provided key management personnel services to the Company. Included in the management fees paid to AXIS are fees for provision of key management personnel services of $247,562 (2017: $352,386). All charges were on commercial terms. These amounts are included within total management services of $1,974,497 (2017: $2,173,985)." [On page 7 we read that J.I. Gutnick, M.Z. Gutnick, and P.J. Lee are employed by AXIS.]
Page 13 "AXIS Consultants Pty Ltd ('AXIS'), a company of which Mr. J I Gutnick, Mr. M Z Gutnick and Dr. D S Tyrwhitt are or were directors during the year, provided management services to the Company for the year."
Page 60 "Unsecured advances have been made to AXIS. A formal loan agreement was put in place during the year. The loan is repayable in June 2020. The interest rate on monies advanced during the year was 8.78% (2017: 8.70% to 8.80%). The nature of the consideration to be provided in settlement is through services provided or repayment in cash or shares." [My emphasis. This last sentence seems to beg a question to me. Who decides how the cash of $13.8 million is to be paid back to MED's shareholders, when there is such a crossover of interests between the private company AXIS and the public company MED?]
Page 1 of auditor's report, i.e. page following page 63 of annual report. "Included within Notes 10 & 27 of the financial report, the Group has reported a loan receivable [i.e., lent by MED to AXIS and now owed to MED] from AXIS Consultants Pty Ltd amounting to $13,752,125 (2017: $12,158,032) which has been fully provided for. We have been unable to obtain sufficient appropriate audit evidence in respect to the collectability or otherwise of this amount."
So . . . as I understand things, MED paid fees to AXIS and made a loan to AXIS.
MED Price at posting:
0.6¢ Sentiment: None Disclosure: Not Held
