ACTINOGEN LIMITED
ABN 14 086 778 476
FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2015
ACTINOGEN LIMITED
C O N T E N T S P A G E
Contents
Corporate Directory
Corporate Governance Statement
Directors’ Report
Lead Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
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ACTINOGEN LIMITED
C O R P O R A T E D I R E C T O R Y
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Board of DirectorsAuditorsExecutive Chairman – Mr Martin RogersErnst & YoungManaging Director – Dr Bill KetelbeyErnst & Young BuildingNon-Executive Director – Dr Jason Loveridge11 Mounts Bay RoadNon-Executive Director – Dr Anton UvarovPerth WA 6000Company SecretaryLawyersCompany Secretary - Peter WebseGTP LegalLevel 1, 28 Ord Street Principal Place of Business / Registered OfficeWest Perth WA 6005Level 9, Suite 1, 68 Pitt StreetSydney NSW 2000Share RegisterAutomic Registry ServicesPostal AddressSuite 1A, Level 1PO Box 2717 Ventnor AvenueWest Perth WA 6872West Perth WA 6005Contact DetailsActinogen Limited shares are listed onTelephone: 02 8964 7401the Australian Stock Exchange (ASX)www.actinogen.com.auASX Code: ACWABN 14 086 778 476BankersNational Australia Bank1232 Hay StreetWest Perth WA 6005
ACTINOGEN LIMITED
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
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This Corporate Governance Statement (“Statement”) outlines the key aspects of Actinogen Limited’s
(‘Actinogen’ or ‘the Company’) governance framework and main governance practices. The
Company’s charters, policies, and procedures are regularly reviewed and updated to comply with
law and best practice. These charters and policies can be viewed on Actinogen’s website located
at www.actinogen.com.au.
This Statement is structured with reference to the Australian Securities Exchange Corporate
Governance Council’s (“the Council’s”) “Principles of Good Corporate Governance and Best
Practice Recommendations 3rd Edition” (“the Recommendations”).
The Board of Directors has adopted the Recommendations to the extent that is deemed appropriate
considering current the size and operations of the Company. Therefore, considering the size and
financial position of the Company, where the Board considers that the cost of implementing a
recommendation outweighs any potential benefits, those recommendations have not been
adopted.
This Statement was approved by the Board of Directors and is current as at 13 August 2015.
Principle 1: Lay solid foundations for management and oversight
Roles of the Board & Management
The Board is responsible for evaluating and setting the strategic direction for the Company,
establishing goals for management and monitoring the achievement of these goals. The Managing
Director is responsible to the Board for the day-to-day management of the Company.
•
•
The principal functions and responsibilities of the Board include, but are not limited to, the following:
•
Appointment, evaluation and, if necessary, removal of the Managing Director, any other
executive directors, the Company Secretary and the Chief Financial Officer (if applicable) and
approval of their remuneration;
Determining, in conjunction with management, corporate strategy, objectives, operations, plans
and approving and appropriately monitoring plans, new investments, major capital and
operating expenditures, capital management, acquisitions, divestitures and major funding
activities;
Establishing appropriate levels of delegation to the Managing Director to allow the business to
be managed efficiently;
Approval of remuneration methodologies and systems;
•
• Monitoring actual performance against planned performance expectations and reviewing
operating information at a requisite level to understand at all times the financial and operating
conditions of the Company;
• Monitoring the performance of senior management, including the implementation of strategy
and ensuring appropriate resources are available;
• Overseeing the management of business risks, safety, occupational health and environmental
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•
•
•
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issues;
Satisfying itself that the financial statements of the Company fairly and accurately set out the
financial position and financial performance of the Company for the period under review;
Satisfying itself that there are appropriate reporting systems and controls in place to assure the
Board that proper operational, financial, compliance, risk management and internal control
processes are in place and functioning appropriately;
Assuring itself that appropriate audit arrangements are in place in relation to the Company’s
financial affairs;
Authorising the issue of any shares, options, equity instruments or other securities within the
constraints of the Corporations Act and the ASX Listing Rules; and
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the
Company has adopted, and that its practice is consistent with, a number of guidelines
including:
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ACTINOGEN LIMITED
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
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− Code of Conduct;
− Continuous Disclosure Policy;
− Diversity Policy;
− Performance Evaluation Policy;
− Procedures for Selection and Appointment of Directors;
− Remuneration Policy;
− Risk Management and Internal Compliance and Control Policy.
− Securities Trading Policy; and
− Shareholder Communications Policy.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board has
delegated to the Managing Director responsibility for the management and operation of Actinogen.
The Managing Director is responsible for the day-to-day operations, financial performance and
administration of Actinogen within the powers authorised to him from time-to-time by the Board. The
Managing Director may make further delegation within the delegations specified by the Board and is
accountable to the Board for the exercise of those delegated powers.
Further details of Board responsibilities, objectives and structure are set out in the Board Charter on
the Actinogen Website.
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity
to justify the formation of separate committees at this time including audit, risk, remuneration or
nomination committees, preferring at this stage of the Company’s development, to manage the
Company through the full Board of Directors. The Board assumes the responsibilities normally
delegated to the Audit, Risk, Remuneration and Nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate
committees will be reviewed by the Board and implemented if appropriate.
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a director, or putting
that person forward as a candidate to ensure that person is competent, experienced, and would not
be impaired in any way from undertaking the duties of director. The Company provides relevant
information to shareholders for their consideration about the attributes of candidates together with
whether the Board supports the appointment or re-election.
The terms of the appointment of a non-executive director, executive directors and senior executives
are agreed upon and set out in writing at the time of appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters
to do with the proper functioning of the Board, including agendas, Board papers and minutes,
advising the Board and its Committees (as applicable) on governance matters, monitoring that the
Board and Committee policies and procedures are followed, communication with regulatory bodies
and the ASX and statutory and other filings.
Diversity
The Company has adopted a formal Diversity Policy and is committed to workplace diversity, with a
particular focus on supporting the representation of women at the senior level of the Company and
on the Company Board.
The Company is currently in an early stage of its development and given that it currently has a limited
number of employees, the application of measurable objectives in relation to gender diversity, at
various levels of the Company’s business, is not considered to be appropriate nor practical.
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The Board will review this position on an annual basis and will implement measurable objectives as
and when they deem the Company to require them.
The proportion of women in the consolidated entity as at 13 August 2015 is as follows:
Women on the board: 0 of 4 (0%)
Women in senior executive positions: 0 of 3 (0%)
Women in the organisation: 2 of 7 (29%)
The Company’s Diversity Policy is available on its website.
Board & Management Performance Review
On an annual basis, the Board conducts a review of its structure, composition and performance
The annual review includes consideration of the following measures:
comparing the performance of the Board against the requirements of its Charter;
assessing the performance of the Board over the previous 12 months having regard to the
corporate strategies, operating plans and the annual budget;
reviewing the Board’s interaction with management;
reviewing the type and timing of information provided to the Board by management;
reviewing management’s performance in assisting the Board to meet its objectives; and
identifying any necessary or desirable improvements to the Board Charter.
The method and scope of the performance evaluation will be set by the Board and may include a
Board self-assessment checklist to be completed by each Director. The Board may also use an
independent adviser to assist in the review.
The Executive Chairman has primary responsibility for conducting performance appraisals of Non-
Executive Directors, in conjunction with them, having particular regard to:
contribution to Board discussion and function;
degree of independence including relevance of any conflicts of interest;
availability for and attendance at Board meetings and other relevant events;
contribution to Company strategy;
membership of and contribution to any Board committees; and
suitability to Board structure and composition.
The Board conducts an annual performance assessment of the Managing Director against agreed
key performance indicators.
Board and management performance reviews were conducted during the financial year in
accordance with the above processes.
Independent Advice
Directors have a right of access to all Company information and executives. Directors are entitled, in
fulfilling their duties and responsibilities, to obtain independent professional advice on any matter
connected with the discharge of their responsibilities, with prior notice to the Chairman, at
Actinogen’s expense.
Principle 2: Structure the board to add value
Board Composition
During the financial year and to the date of this report the Board was comprised of the following
members:
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ACTINOGEN LIMITED
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Mr Martin Rogers
Dr Bill Ketelbey
Dr Jason Loveridge
Dr Anton Uvarov
Dr Brendan de Kauwe
Daniel Parasiliti
Executive Chairman (appointed 1 December 2014)
Managing Director (appointed 18 December 2014)
Non-Executive Director (appointed 1 December 2014)
Non-Executive Director (appointed 16 December 2013)
Executive Chairman (appointed 23 September 2013,
December 2014)
Non-Executive Director (appointed 23 September 2013, resigned 1
December 2014)
resigned 18
The Board currently consists of two Executive Directors being the Chairman and Managing Director,
and two Non-Executive Directors.
Actinogen has adopted a definition of 'independence' for Directors that is consistent with the
Recommendations.
The Company’s Executive Chairman, Mr Martin Rogers, is not an independent director, neither was
the Company’s former Executive Chairman, Dr Brendan de Kauwe. The Board believes it is important
to have the Chairman engaged in an executive capacity at this critical stage of the Company’s
development. The Board values the insight and advice provided by Mr Rogers and considers that
the materiality of his relationship is such that it does not interfere with his capacity to bring an
independent judgment on issues before the Board and to act in the best interests of Actinogen and
its security holders generally.
The Board does not currently consist of a majority of independent directors. It had a majority of
independent directors, being Dr Anton Uvarov and Mr Daniel Parasiliti up until the latter’s resignation
in December 2014. Dr Anton Uvarov is the only current director considered to be independent. Dr
Jason Loveridge is not considered to be independent as he was a substantial shareholder of the
Company up to the completion of a capital raising by the Company in May 2015. Given the size of
the Board and the nature and scale of the Company’s current operations the Board believes the
presence of one independent director on the Board is sufficient.
Board Selection Process
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is
required in order to effectively govern the Actinogen. The Board believes that orderly succession
and renewal contributes to strong corporate governance and is achieved by careful planning and
continual review.
The Board is responsible for the nomination and selection of directors. The Board reviews the size and
composition of the Board regularly and at least once a year as part of the Board evaluation process.
The Board has a skills matrix covering the competencies and experience of each member. When the
need for a new director is identified, the required experience and competencies of the new director
are defined in the context of this matrix and any gaps that may exist.
Generally a list of potential candidates is identified based on these skills required and other issues
such as geographic location and diversity criteria. Candidates are assessed against the required
skills and on their qualifications, backgrounds and personal qualities. In addition, candidates are
sought who have a proven track record in creating security holder value and the required time to
commit to the position.
Induction of New Directors and Ongoing Development
New Directors are issued with a formal Letter of Appointment that sets out the key terms and
conditions of their appointment, including Director's duties, rights and responsibilities, the time
commitment envisaged, and the Board's expectations regarding involvement with any Committee
work. An induction program is in place and new Directors are encouraged to engage in professional
development activities to develop and maintain the skills and knowledge needed to perform their
role as Directors effectively.
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Principle 3: Act ethically and responsibly
The Company has implemented a Code of Conduct, which provides guidelines aimed at
maintaining high ethical standards, corporate behaviour and accountability within the Company.
All employees and Directors are expected to:
respect the law and act in accordance with it;
maintain high levels of professional conduct;
respect confidentiality and not misuse Company information, assets or facilities;
avoid real or perceived conflicts of interest;
act in the best interests of shareholders;
by their actions contribute to the Company’s reputation as a good corporate citizen which
seeks the respect of the community and environment in which it operates;
perform their duties in ways that minimise environmental impacts and maximise workplace
safety;
exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their
workplace and with customers, suppliers and the public generally; and
act with honesty, integrity, decency and responsibility at all times.
An employee that breaches the Code of Conduct may face disciplinary action including, in the
cases of serious breaches, dismissal. If an employee suspects that a breach of the Code of Conduct
has occurred or will occur, he or she must report that breach to the Company Secretary. No
employee will be disadvantaged or prejudiced if he or she reports in good faith a suspected breach.
All reports will be acted upon and kept confidential.
Principle 4: Safeguard integrity in corporate reporting
The Board as a whole fulfills to the functions normally delegated to the Audit Committee as detailed
in the Audit Committee Charter.
The Board is responsible for the initial appointment of the external auditor and the appointment of a
new external auditor when any vacancy arises. Candidates for the position of external auditor must
demonstrate complete independence from the Company through the engagement period. The
Board may otherwise select an external auditor based on criteria relevant to the Company’s business
and circumstances. The performance of the external auditor is reviewed on an annual basis by the
Board.
The Board receives regular reports from management and from external auditors. It also meets with
the external auditors as and when required.
The external auditors attend Actinogen's AGM and are available to answer questions from security
holders relevant to the audit.
Prior approval of the Board must be gained for non-audit work to be performed by the external
auditor. There are qualitative limits on this non-audit work to ensure that the independence of the
auditor is maintained.
There is also a requirement that the audit partner responsible for the audit not perform in that role for
more than five years.
CEO Certifications
The Board has received certifications from the CEO in connection with the financial statements for
the Actinogen for the Reporting Period. The Company does not currently have a CFO. The
certifications state that the declaration provided in accordance with Section 295A of the
Corporations Act as to the integrity of the financial statements is founded on a sound system of risk
management and internal control which is operating effectively.
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ACTINOGEN LIMITED
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Principle 5: Make timely and balanced disclosure
The Company has a Disclosure Policy which outlines the disclosure obligations of the Company as
required under the ASX Listing Rules and Corporations Act. The policy is designed to ensure that
procedures are in place so that the market is properly informed of matters which may have a
material impact on the price at which Company securities are traded.
The Board considers whether there are any matters requiring disclosure in respect of each and every
item of business that it considers in its meetings. Individual Directors are required to make such a
consideration when they become aware of any information in the course of their duties as a Director
of the Company.
The Company is committed to ensuring all investors have equal and timely access to material
information concerning the Company.
The Board has designated the Company Secretary as the person responsible for communicating with
the ASX. The Executive Chairman, Managing Director and the Company Secretary are responsible
for ensuring that:
a) Company announcements are made in a timely manner, that announcements are factual and
do not omit any material information required to be disclosed under the ASX Listing Rules and
Corporations Act; and
b) Company announcements are expressed in a clear and objective manner that allows investors
to assess the impact of the information when making investment decisions.
Principle 6: Respect the rights of security holders
The Company recognizes the value of providing current and relevant information to its shareholders.
The Company respects the rights of its shareholders and to facilitate the effective exercise of those
rights the Company is committed to:
•
•
communicating effectively with shareholders through releases to the market via ASX, the
company website, information mailed to shareholders and the general meetings of the
Company;
giving shareholders ready access to clear and understandable information about the
Company; and
• making it easy for shareholders to participate in general meetings of the Company.
The Company also makes available a telephone number and email address for shareholders to
make enquiries of the Company. These contact details are available on the “contact us” page of
the Company’s website.
Shareholders may elect to, and are encouraged to, receive communications from Actinogen and
Actinogen's securities registry electronically.
The Company maintains information in relation to its Constitution, governance documents, Directors
and senior executives, Board and committee charters, annual reports and ASX announcements on
the Company’s website.
Principle 7: Recognise and manage risk
The Board is committed to the identification, assessment and management of risk throughout
Actinogen's business activities.
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The Board is responsible for the oversight of the Company’s risk management and internal
compliance and control framework. Responsibility for control and risk management is delegated to
the appropriate level of management within the Company with the Managing Director having
ultimate responsibility to the Board for the risk management and internal compliance and control
framework. Actinogen has established policies for the oversight and management of material
business risks.
Actinogen's Risk Management and Internal Compliance and Control Policy recognises that risk
management is an essential element of good corporate governance and fundamental in achieving
its strategic and operational objectives. Risk management improves decision making, defines
opportunities and mitigates material events that may impact security holder value.
Actinogen believes that explicit and effective risk management is a source of insight and
competitive advantage. To this end, Actinogen is committed to the ongoing development of a
strategic and consistent enterprise wide risk management program, underpinned by a risk conscious
culture.
Actinogen accepts that risk is a part of doing business. Therefore, the Company’s Risk Management
and Internal Compliance and Control Policy is not designed to promote risk avoidance. Rather
Actinogen's approach is to create a risk conscious culture that encourages the systematic
identification, management and control of risks whilst ensuring we do not enter into unnecessary risks
or enter into risks unknowingly.
Actinogen assesses its risks on a residual basis; that is it evaluates the level of risk remaining and
considering all the mitigation practices and controls. Depending on the materiality of the risks,
Actinogen applies varying levels of management plans.
The Board has required management to design and implement a risk management and internal
compliance and control system to manage Actinogen's material business risks. It receives regular
reports on specific business areas where there may exist significant business risk or exposure. The
Company faces risks inherent to its business, including economic risks, which may materially impact
the Company’s ability to create or preserve value for security holders over the short, medium or long
term. The Company has in place policies and procedures, including a risk management framework
(as described in the Company’s Risk Management and Internal Compliance and Control Policy),
which is developed and updated to help manage these risks. The Board does not consider that the
Company currently has any material exposure to environmental or social sustainability risks
The Company’s process of risk management and internal compliance and control includes:
identifying and measuring risks that might impact upon the achievement of the Company’s
goals and objectives, and monitoring the environment for emerging factors and trends that
affect those risks.
formulating risk management strategies to manage identified risks, and designing and
implementing appropriate risk management policies and internal controls.
monitoring the performance of, and improving the effectiveness of, risk management systems
and internal compliance and controls, including regular assessment of the effectiveness of risk
management and internal compliance and control.
The Board review’s the Company’s risk management framework at least annually to ensure that it
continues to effectively manage risk.
Management reports to the Board as to the effectiveness of Actinogen's management of its material
business risks on at each meeting.
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ACTINOGEN LIMITED
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Principle 8: Remunerate fairly and responsibly
Actinogen’s Remuneration Policy was designed to recognise the competitive environment within
which Actinogen operates and also emphasise the requirement to attract and retain high caliber
talent in order to achieve sustained improvement in Actinogen’s performance. The overriding
objective of the Remuneration Policy is to ensure that an individual’s remuneration package
accurately reflects their experience, level of responsibility, individual performance and the
performance of Actinogen.
The key principles are to:
link executive reward with strategic goals and sustainable performance of Actinogen
apply challenging corporate and individual key performance indicators that focus on both
short-term and long-term outcomes
motivate and recognise superior performers with fair, consistent and competitive rewards
remunerate fairly and competitively in order to attract and retain top talent
recognise capabilities and promote opportunities for career and professional development
through employee ownership of Actinogen shares, foster a partnership between employees and
other security holders
The Board determines the Company’s remuneration policies and practices and assesses the
necessary and desirable competencies of Board members. The Board is responsible for evaluating
Board performance,
reviewing Board and management succession plans and determines
remuneration packages for the CEO, Non-Executive Directors and senior management based on an
annual review.
Actinogen’s executive remuneration policies and structures and details of remuneration paid to
directors and senior managers are set out in the Remuneration Report.
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their
services, the reimbursement of reasonable expenses and, in certain circumstances options. They do
not receive any termination or retirement benefits, other than statutory superannuation.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is
$150,000 per annum. The Directors set the individual Non-Executive Directors fees within the limit
approved by shareholders.
The total fees paid to Non-Executive Directors during the reporting period were $126,668.
Executive directors and other senior executives are remunerated using combinations of fixed and
performance based remuneration. Fees and salaries and set at levels reflecting market rates and
performance based remuneration is linked directly to specific performance targets that are aligned to
both short and long term objectives.
In accordance with the Company’s share trading policy, participants in an equity based incentive
scheme are prohibited from entering into any transaction that would have the effect of hedging or
otherwise transferring the risk of any fluctuation in the value of any unvested entitlement in the
Company’s securities to any other person.
Further details in relation to the company’s remuneration policies are contained in the Remuneration
Report, within the Directors’ Report.
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ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
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Your Directors present their report pertaining to Actinogen Limited (“Company” or “Actinogen”) for
the year ended 30 June 2015.
INFORMATION ON DIRECTORS
1.
BOARD OF DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until the date
of this report are as follows. Directors were in office for this entire period unless otherwise stated.
Dr Bill Ketelbey (appointed 18 December 2014)
MBBCh, FFPM, MBA, GAICD
Managing Director and Chief Executive Officer
Dr Ketelbey is a highly experienced and successful healthcare and pharmaceutical sector professional,
with 30 years’ experience in the industry, including senior medical and management roles with global
pharmaceutical giant, Pfizer. Dr Ketelbey has a Medical degree from the University of the Witwatersrand,
South Africa, is a Fellow of the Faculty of Pharmaceutical Medicine with the Royal College of Physicians,
UK, has an MBA from Macquarie University and is a Graduate of the Australia Institute of Company
Directors
Prior to joining Actinogen Medical, Dr Ketelbey was the APAC Regional Vice President of Medical Affairs
for Pfizer’s Primary Care Business Unit and Country Medical Director for Pfizer Australia and New Zealand.
At Pfizer, Dr Ketelbey was responsible for leading the development of numerous medicines across a
broad range of therapeutic areas, including Aricept, the market leading therapy for Alzheimer’s Disease.
Dr Ketelbey has held no other directorships during the past three years.
Mr Martin Rogers (appointed 1 December 2014)
B.Eng(Chem), B. Sc.
Executive Chairman
Mr Rogers is a well-recognised Australian biotechnology entrepreneur and executive. The appointment
of Mr Rogers will add substantial capital markets experience to the current Board of the Company.
During the past three years Mr Rogers has served as a director of the following ASX-listed companies:
Non-Executive Chairman – Rhinomed Limited (ASX: RNO) – Appointed 3 September 2012 –
Current.
Non-Executive Director – Oncosil Limited (ASX: OSL) – Appointed 3 April 2013 – Current;
and
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NamePositionAppointedResignedDr Bill KetelbeyManaging Director / Chief Executive Officer18/12/2014-Mr Martin RogersExecutive Chairman1/12/2014-Dr Jason LoveridgeNon-Executive Director1/12/2014-Dr Anton UvarovNon-Executive Director16/12/2013-Dr Brendan de KauweExecutive Chairman23/09/201318/12/2014Mr Daniel ParasilitiNon-Executive Director23/09/20131/12/2014
ACTINOGEN LIMITED
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Non-Executive Director – Cellmid Limited (ASX: CDY) – Appointed 19 September 2012 –
Resigned 30 June 2015.
Dr Jason Loveridge (appointed 1 December 2014)
BSc PhD FRSM
Non-Executive Director
Dr. Loveridge has been working in the biotech and medtech industries for over 25 years and brings
extensive experience in the commercialisation of medical research to the Board of Actinogen. As a
venture investor with JAFCO Nomura Dr. Loveridge invested in over 24 companies in Europe, the US
and Israel and has been directly involved in the management of a number of innovative companies
in the medical arena.
During the past three years Dr. Loveridge has served as a director of the following ASX-listed
companies:
Non-Executive Director of Resonance Health Limited (ASX: RHT) – appointed February 2013 –
Current.
Dr Anton Uvarov (appointed 16 December 2013)
PhD BioChem.Med.Gen, MBA
Non-Executive Director
Dr Uvarov has significant experience as an equity analyst in healthcare sector, both domestically and
internationally. Prior to moving to Australia he was with Citigroup Global Markets where he spent two
years as a member of New York based biotechnology team.
Dr Uvarov holds a PhD degree in Biochemistry and Medical Genetics from the University of Manitoba,
Canada and an MBA degree from the University of Calgary, Canada.
During the past three years Dr Uvarov has also served as a Director of the following listed companies:
Executive Director of Sun Biomedical Limited (ASX: SBN) – appointed 20 November 2013 –
Current; and
Non-Executive Director of Acuvax Limited (ASX: ACU) – appointed: 10 October 2013;
resigned 14 March 2014.
The following Directors resigned during the year:
Dr Brendan de Kauwe (appointed 23 September 2013; resigned 18 December 2014)
BDS (UWA), Grad Dip App Fin
Executive Chairman
Dr de Kauwe was initially appointed as Non-Executive Director on 23 September 2013, then made
Executive Director on 19 November 2013, and then made Executive Chairman on 23 April 2014.
Dr de Kauwe studied a Bachelor of Science and a Bachelor of Dental Surgery at the University of
Western Australia. He also holds a Post Graduate Diploma in Applied Finance, majoring in Corporate
Finance, is currently completing his Masters in Applied Finance and is an ASIC compliant (RG146)
Securities Adviser.
Dr de Kauwe’s extensive science and bio-medical background with more than 10 years’ experience
in the health sector; coupled with his finance backing, gives him an integral understanding in the
evaluation of projects over a diverse range of sectors.
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During the past three years Dr de Kauwe has also served as a Director of the following listed
companies:
Non-Executive Director of Raya Group Limited (ASX: RYG) – appointed on 25 May 2015.
Non-Executive Director of Prescient Therapeutics Limited (ASX: PTX) (formerly known as: Virax
Holdings Limited (VHL)). Appointed 30 August 2013; resigned on 29 November 2014.
Non-Executive Director of Cossack Energy Limited (ASX Code: COD). Appointed 29 February
2012; resigned in July 2013.
Mr Daniel Parasiliti (appointed 23 September 2013; resigned 1 December 2014)
BSc. Physiotherapy
Non-Executive Director
Mr Parasiliti has many years experience in Injury Management, Industrial Health, and as a Private
Practice and Independent Physiotherapist Practitioner. Mr Parasiliti is a Partner in one of WA's largest
Physiotherapy Practices in WA, Midland Physiotherapy, which employee's 14 Physiotherapists, 2
Massage therapists, also other speciality professionals including Audiologists, Ear Nose and Throat
Specialists and Cardiac technicians just to name a few. Since graduating as a Physiotherapist from
Curtin University of Technology in 2005, Mr Parasiliti has gained extensive knowledge in private
practise Physiotherapy, Allied Health Consultancy, Policy, business and patient management.
Mr Parasiliti is currently completing his Post Graduate Juris Doctorate of Law at Murdoch University,
where he has a focus on property, contract, mediation, and corporation law.
Mr Parasiliti was a former Political Candidate for the State Seat of Midland which he narrowly lost by
24 votes, which is now one of the most marginal seats in Australia. Mr Parasiliti has gained an
extensive network within both the State and Federal Government, subsequently leading to his
campaign victory in 2013 in the Local Government elections for the City of Swan ward, Midland-
Guildford.
Mr Parasiliti held no other directorships during the past three years.
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the Directors in the shares of the Company were as follows:
(a) 14,717,184 subject to voluntary escrow until 30 November 2015.
(b) During the year 43,000,000 Loan Shares were issued to Directors of which 18,000,000 have vested as at 30
June 2015.
13
NameFully paid ordinary sharesLoan shares (b)TotalDr Bill Ketelbey 342,894 12,000,000 12,342,894 Mr Martin Rogers 11,407,894 25,000,000 36,407,894 Dr Jason Loveridge (a) 21,875,078 6,000,000 27,875,078 Dr Anton Uvarov 4,187,244 - 4,187,244 Total37,813,110 43,000,000 80,813,110
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
2. DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Company’s Directors held while each
Director was in the office and the number of meetings attended by each Director.
Due to size and scale of the Company, there is no Remuneration, Nomination or Audit Committee at
present. Matters typically dealt with by these Committees are, for the time being, reverted to the Board
of Directors. For details of the function of the Board please refer to the Corporate Governance
Statement which is included as part of this financial report.
3. CORPORATE GOVERNANCE
The Board recognises the recommendations of the Australian Securities Exchange Corporate
Governance Council, and has disclosed its level of compliance with those guidelines within the
Corporate Governance Statement which is included as part of this financial report.
4. COMPANY SECRETARY
The following person held the position of Company Secretary during the financial year.
Peter Webse (appointed 10 October 2013)
B.Bus, FGIA, FCPA, MAICD
Mr Webse has over 24 years’ company secretarial experience and is managing director of Platinum
Corporate Secretariat Pty Ltd, a company specialising in providing company secretarial, corporate
governance and corporate advisory services. Mr Webse holds a Bachelor of Business with a double
major in Accounting and Finance, is a Fellow of the Governance Institute of Australia, a Fellow Certified
Practicing Accountant and a Member of the Australian Institute of Company Directors.
5.
SHARES UNDER OPTION
As at the date of this report, there were 63,103,177 unissued ordinary shares under option of the
Company are as follows:
-
-
-
9,103,177 listed options at $0.40 per share exercisable on or before 30 September 2015; and
48,500,000 unlisted options at $0.02 per share exercisable on or before 30 November 2018; and
5,500,000 unlisted Facilitator options at $0.02 per share exercisable on or before 30 November
2018.
No option holder has any right, by virtue of the option, to participate in any share issue of the Company
or any related body corporate. For further details of the options outstanding please refer to the
Remuneration Report which is included as part of this financial report.
14
Mr Martin Rogers88Dr Bill Ketelbey88Dr Jason Loveridge88Dr Anton Uvarov1212Dr Brendan de Kauwe55Mr Daniel Parasiliti43DirectorNumber of meetings attendedNumber of meetings available to attend
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
OPERATIONS AND FINANCIAL REVIEW
6.
PRINCIPAL ACTIVITIES
The principal activity of the Consolidated Entity during the year was on biotechnology focused on
the development of novel treatments for Alzheimer’s disease and other major age-related
neurodegenerative disorders
7.
REVIEW OF OPERATIONS
Highlights during the year:
(i) Acquisition of Corticrine Limited completed
(ii) Changes to the Actinogen Board and Management
(iii) VAT refund received in June 2015 Quarter
(iv) $13.2 million in additional capital raised
(v) Successful completion of first stage of Alzheimer’s drug clinical trial.
(vi) Appointment of Clinical Advisors
(vii) Update on Actinogen’s legacy research
(i) Acquisition of Corticrine Limited
The acquisition of 100% of Corticrine Ltd was completed on 1 December 2014. Corticrine has
licensed worldwide development and commercialisation rights from the University of Edinburgh to
Xanamem™ (formerly known as UE2343), which is in clinical development for Alzheimer’s disease.
With significant support from the Wellcome Trust, the University of Edinburgh successfully completed a
Phase 1 single ascending dose (SAD) study of Xanamem™ in healthy human volunteers. It was shown
to be well tolerated in humans with no serious adverse events.
The new management team and Clinical and Scientific Advisory Boards for Actinogen Medical are in
place and taking the project forward. Near term value inflection points – a Phase 1 multiple
ascending dose, fed/fasted and CNS pharmacokinetics study of Xanamem™ that completes in Q3
2015, and a Phase 2 proof-of-concept study in patients with early Alzheimers disease expected to
dose the first patient in the first half of 2016.
The Board of Directors is extremely pleased to have secured a project of such caliber and potential,
and believe that the transaction will transform Actinogen into a clinical stage company with an asset
that has the potential to become an important treatment for Alzheimer’s dementia, a multi-billion
dollar market. According to the World Health Organization 18 million people are affected globally
with Alzheimer’s with 5.1 million in the US alone. The expected growth in the number of Alzheimer’s
patients is equally substantial, with the patient population tripling within the next 30 years. There are
currently only 4 approved regularly prescribed Alzheimer’s drugs, however their effect is limited – the
market is significantly unsatisfied and new therapies are desperately needed. This market could
potentially surpass $20B USD with the approval of the new drug to treat the disease.
(ii) Changes to Actinogen’s Board & Management:
Following completion of Corticrine transaction, the following changes were made to the Board of
Directors:
15
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Appointment of Dr Bill Ketelbey – Managing Director and Chief Executive Officer
Dr Ketelbey was appointed to the Board as Managing Director and Chief Executive Officer. Dr
Ketelbey is a highly experienced and successful healthcare and pharmaceutical sector
professional, with 30 years’ experience in the industry, including senior medical and
management roles with global pharmaceutical giant, Pfizer. The appointment was effective
from 18 December 2014
Appointment of Mr Martin Rogers – Executive Chairman
Mr Rogers is a well-recognised Australian biotechnology entrepreneur and executive. The
appointment of Mr Rogers will add substantial capital markets experience to the current Board
of Actinogen Limited. The appointment was effective from 1 December 2014.
Appointment of Dr Jason Loveridge (founder of Corticrine Limited) – Non-Executive Director
Dr Loveridge brings extensive experience
in developing clinical stage biotechnology
companies to the Board of Actinogen. The appointment was effective from 1 December 2014.
Other
In other Board changes Dr Brendan de Kauwe and Mr Daniel Parasiliti resigned from the Board
effective 18 December 2014 and 1 December 2014 respectively.
(iii) VAT Refund
A VAT refund of approximately GBP 238,000 (approx. AUD 452,000) was received in the June 2015
quarter.
(iv) Capital raising
During the year the Consolidated Entity successfully completed the following capital raisings.
$1 million (Tranche 1) raised via the issue of 50,000,000 ordinary fully paid shares at an issue
price of 2 cents per share to sophisticated and institutional investors in September 2014; and
$1.39 million (Tranche 2) raised via the issue of 69,500,000 ordinary fully paid shares at an issue
price of 2 cents per share to Directors, sophisticated and institutional investors following
shareholder approval at the AGM in November 2014, accompanying the acquisition of
Corticrine Limited.
$10 million raised via the issue of 105,289,474 ordinary fully paid shares at an issue price of 9.5
cents per share to sophisticated and institutional investors in May 2015.
$830,000 raised via the issue of 8,736,746 ordinary fully paid shares at an issue price of 9.5
cents per share under a Shareholder Share Purchase Plan (SPP) in May 2015.
(v) Excellent progress with Xanamem research program.
Since acquiring Xanamem at the end of 2014, Actinogen has already completed the first 2 stages of
the second Phase I healthy volunteer trial – these are the multiple ascending dose trail of 24
participants and the fed/fasted study in 12 participants.
Both the first and second stages of this study demonstrated the safety and tolerability of Xanamem™,
even at the highest dose of 35mg twice daily. These data will be used to define the optimum daily
dose for Xanamem to take forward into the Phase II clinical trial.
Additionally, Actinogen is about to initiate the third and final stage of the second Phase I
Xanamem™ trial, having received ethics approval in June. This final stage will examine the CNS
pharmacokinetics of Xanamem™ and will involve the recruitment of four healthy volunteers. The
primary endpoint is to demonstrate that Xanamem™ is efficiently delivered to the brain, its primary
site of action in Alzheimer’s disease. It is expected this trial will have completed by the end of August.
16
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
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All 3 stages of this Phase I trial were conducted at Linear Clinical Research, a world-class clinical trial
facility that is part of the QEII Medical Centre in Perth, Western Australia.
Actinogen is also pleased to announce that dosing in the final pre-clinical toxicology study is well
underway with the results expected before the end of the year.
Significantly, all these studies remain on-track (time and budget), with results to be incorporated into
the research documentation supporting the all-important Phase II study of Xanamem™ in mild
Alzheimer’s and mild cognitive impairment patients, expected to start in the first half of 2016. The
results will enable an Investigational New Drug (IND) application to the FDA for the Phase II trial in
Alzheimer’s patients to be run in the US. The trial is also planned to run in Australia, New Zealand and
the UK.
The second half of 2015 will focus on setting up all the logistics for the Phase II trial, with the first
patient expected to be recruited in the first half of 2016. Actinogen initiated the process of
developing the study protocol in February this year with the establishment of the Xanamem Clinical
Advisory Board. This Board has broad representation of globally recognised experts in Alzheimer’s
research, and includes Professor Craig Ritchie from Edinburgh University, Professor Colin Masters from
Melbourne University and Professor Jeff Cummings from the Cleveland Clinic in Ohio and Nevada in
the USA. The Board has met twice this year – the first in March and again in mid-June, and has made
excellent progress in developing the Phase II study protocol. Actinogen expects to have final sign-off
of all the key elements of the protocol by the end of July.
Simultaneously we are well down the road in selecting Research and Regulatory commercial
partners to assist in gaining regulatory approval to run the study and to manage the complex logistics
initiated
of managing this study across all three geographies. Additionally Actinogen has
manufacturing of adequate drug supplies for the study at High Force in the UK. We expect the study
to commence in the first half of 2016 and to take about 2 years to complete. It will be a double
blinded placebo controlled randomised study – no results will therefore be known until the trial
completes. This is currently expected around the end of 2017.
(vi) Appointment of Clinical Advisors:
Actinogen has two Advisory Boards assisting with the ongoing development of Xanamem – the
Xanamem Clinical Advisory Board and the Xanamem Scientific Advisory Board.
The Xanamem Clinical Advisory Board includes Alzheimer’s specialists with particular expertise in the
early diagnosis and treatment of Alzheimer’s disease. They will help Actinogen Medical shape the
research and drive the development of its new lead research drug, Xanamem™.
The broad geographic spread of the membership of the Xanamem™ Advisory Board will provide a
true global dimension to Actinogen Medical’s research strategy for Xanamem.
The exceptional quality of this Advisory Board will put Xanamem™ clinical research at the forefront of
early Alzheimer’s disease diagnosis and treatment. It not only speaks to the strength of the science,
but it is also a real coup to have secured experts of such high global standing in Alzheimer’s research
to support the development of Xanamem™. This will be a huge asset to driving the future research
and development of Xanamem™.
Members of this Board include:
Professor Craig Ritchie
Professor Ritchie is the Professor of Psychiatry of Ageing at the University of Edinburgh. He will
chair the Advisory Board. Professor Ritchie is a leading authority on clinical trials in dementia
and has been senior investigator on more than 30 drug trials of both disease-modifying and
symptomatic agents for the condition.
17
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
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Professor Colin Masters
Professor Colin Masters is currently the Executive Director of the Mental Health Research
Institute, and a Laureate Professor at the University of Melbourne. He is also the Senior Deputy
Director of the Florey Institute of Neuroscience and Mental Health, and a consultant at the
Royal Melbourne Hospital. He has focused his career on research in Alzheimer's disease and
other neurodegenerative diseases. With over 35 years’ experience, he
is widely
acknowledged as having had a major worldwide influence on Alzheimer’s disease research
and the causes of the disease.
Professor Jeff Cummings
Professor Jeff Cummings is the Camille and Larry Ruvo Chair of the Neurological Institute of
Cleveland Clinic and Professor of Medicine (Neurology), Cleveland Clinic Lerner College of
Medicine of Case Western Reserve University. He is a world-renowned Alzheimer’s researcher
and leader of clinical trials and has been recognized for his research and leadership
contributions in the field of Alzheimer’s.
The Scientific Advisory Board assisting with the broad development of Xanamem and the numerous
potential indications, other than Alzheimer’s disease. These Board members include:
Professor Alan Boyd
Professor Alan Boyd has 30 years’ pharmaceutical industry experience with various companies
including Glaxo, ICI and AstraZeneca. In 1999 he joined Ark Therapeutics Ltd where he was
responsible for the development of their gene based medicines portfolio and in 2005 Alan set
up Boyd Consultants. A graduate in Biochemistry and Medicine from the University of
Birmingham, UK Professor Boyd is President of the Faculty of Pharmaceutical Medicine, Royal
College of Physicians, UK and is an Honorary Professor in the College of Medical and Dental
Sciences at the University of Birmingham Medical School.
is clinical Professor of Endocrinology and Head of
Professor Brian Walker
Brian Walker
the University of
Edinburgh/British Heart Foundation Centre for Cardiovascular Science. His prolific translational
research over 20 years has concerned the role of glucocorticoids in metabolic syndrome and
cardiovascular disease. He published the original description of 11β-HSD1 as an amplifier of
glucocorticoid action, identifying this enzyme as a prime therapeutic target.
(vii) Update on legacy research
Actinogen’s other work during the quarter was focused on drug discovery research using a panel of
over 6000 actino-bacteria with its scientific team currently conducting trials at its laboratory premises
at Murdoch University’s State Agricultural Biotechnology Centre (SABC) in Western Australia.
Antimicrobials project
The aim of this project was to identify novel antimicrobial agents. It was decided that this project
would be discontinued. The in depth analysis of isolates using fraction collection techniques did not
yield promising results.
The analysis uncovered trace amounts of known antibacterial agents or resulted in the inactivation of
the compounds effects. There are currently more advanced methods of antimicrobial discovery used
in other laboratories, for example the microfluidic chip developed by Slava Epstein which resulted in
the discovery of teixobactin and potentially many more novel antibiotics. Without specialised
equipment, methods and expertise Actinogen cannot compete with their high through-put and
innovative discovery programs. Going forward Company will focus on seeking licensing partners for
it’s antimicrobials project.
18
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Cellulase Project
The aim of this project was to identify new isolates with the ability to produce cellulolytic enzymes
with the ultimate goal being to develop them for use in bio-fuel applications. This project was carried
out in collaboration with Leaf Resources Ltd. (ASX.LER). Research was completed over last 12 months
and the results made available to the partner. While the Actinobacteria studied had many
interesting and possibly unique qualities, scaling up their cellulolytic and lignase activities for
commercial use would be extremely challenging and impractical. There are already genetically
modified E. coli and yeasts being used for the same applications. It was decided that this project
would be discontinued
Cancer Stem Cell Project
The aim of this project was to identify isolates with anti-cancer stem cell activity. Isolates prepared by
Actinogen Limited were tested by a CSC research group at Curtin University to confirm previous work.
While the results showed some anti-cancer stem cell activity was present, they were ultimately
inconclusive. Intensive Actinobacteria activity screening programs would need to be set up to
identify additional candidates for the study. After the Curtin study was completed it was decided
that work on this project would be discontinued. Going forward the Company’s strategy will focus on
seeking licensing partners that could utilize the Company’s current Actinomycetes library and
exclusive intellectual property.
8.
FINANCIAL POSITION
The financial position of the Company for the year ended 30 June 2015 is as follows:
(a) Cash and cash equivalents and total equity increased which was largely the result of contributed equity
issued during the year. Refer to section 11 below for further details.
(b) Accumulated losses increased due to a significant level of spending on research and development related
expenditure plus a share-based payment expense was recognised based on loan shares granted to Key
Management Personnel during the year.
9.
FINANCIAL PERFORMANCE
The financial performance of the Company during the year ended 30 June 2015 is as follows:
19
Full-year endedFull-year ended30/06/201530/06/2014$ $Cash and cash equivalents9,805,6101,127,676(a)Net assets / Total equity15,356,6081,211,812Contributed equity26,254,8917,245,614(a)Accumulated losses(16,253,934)(10,822,925)(b)Full-year endedFull-year ended30/06/201530/06/2014$ $Revenue ($)(a)153,429181,204Net loss after tax ($)(5,431,009)(440,222)Loss per share (cents)(a)(0.01)(0.29)(b)Dividend ($) - -
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(a) Revenue includes $140,000 comprising interest revenue plus a research and development rebate
granted in November 2014. This was offset by a loss on disposal of assets totalling $58,530 when the
Company sold laboratory equipment in May 2015.
(b) Adjusted for the consolidation of share capital that occurred during the prior year ended 30 June 2014.
10. DIVIDENDS
No amounts have been paid or declared by way of dividend since the date of incorporation. The
Directors recommend that no final dividend be paid.
11. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Total equity increased to $15,356,608 from $1,211,812, an increase of $14,144,796. The movement was
largely the result of contributed equity issued, namely to progress the Company’s research and
development. Issue of equity is summarised below:
$1 million (Tranche 1) raised via the issue of 50,000,000 ordinary fully paid shares at an issue
price of 2 cents per share to sophisticated and institutional investors in September 2014; and
$1.39 million (Tranche 2) raised via the issue of 69,500,000 ordinary fully paid shares at an issue
price of 2 cents per share to Directors, sophisticated and institutional investors following
shareholder approval at the AGM in November 2014, accompanying the acquisition of
Corticrine Limited.
$10 million raised via the issue of 105,289,474 ordinary fully paid shares at an issue price of 9.5
cents per share to sophisticated and institutional investors in May 2015.
$829,991 raised via the issue of 8,736,746 ordinary fully paid shares at an issue price of 9.5
cents per share under a Shareholder Share Purchase Plan (SPP) in May 2015.
Refer to Note 15 for further information on movements in equity. Other than what is noted above, there
were no significant changes in the state of affairs of the Company during the year other than what is
noted above.
12. EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
No matters or circumstances have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the Company, the results of those operations, or the state
of the Company in subsequent financial years.
13. OUTLOOK & BUSINESS STRATEGY
With the acquisition of Corticrine and the license rights to Xanamem (UE2343), the strategic focus of
Actinogen has moved to focus on developing Xanamem for Alzheimer’s disease and other potential
clinical indications related to inhibition of the 11β-HSD1 enzyme.
The necessary pre-clinical and Phase I studies required before initiating the Phase II proof-of-concept
study in Alzheimer’s disease and Mild Cognitive Impairment, are nearing completion, with all results
available later this year, and in time to inform the design and regulatory approvals for the Phase II
study, planned for initiation in the first half of 2016. Clinical Advisory Boards have been convened with
appropriately experienced global experts to help design the optimum Phase II protocols, and
commercial Regulatory and Research partners have been contracted to assist with the regulatory
and research logistics of ensuring we are undertaking GCP and Regulatory complaint quality
research in the 3 geographies we plan to run the trial (Australia, UK and USA).
20
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
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We have additionally contracted a specialist API manufacturer in the UK to make a batch of active
drug for the study. All these initiatives are on track to deliver a Phase II study in AD and MCI in the first
half of 2016.
To ensure Actinogen had sufficient capital to undertake this research, the capital raising in May 2015
successfully raised adequate funds to run the study and cover daily corporate expenses, through to
the end of the study, currently envisioned to complete around the end of 2017.
Over the second half of calendar year 2015, Actinogen will be firming up research plans and
timelines leading up the initiation of the Phase II trial, and will keep the market regularly appraised of
important developments in that regard. Key information points will include regulatory and ethics
approval for the study in Australia, the UK and USA, and the initiation of patient recruitment.
Concurrent to initiating the Alzheimer’s Phase II study, development of some additional clinical
indications for Xanamem that are evident through its underlying mechanism of action (inhibition of
the 11β-HSD1 enzyme) will be evaluated. These include a number of commercially promising CNS
indications such as Parkinson disease dementia, cognitive decline in schizophrenia and depression
and PTSD, as well as a number of endocrine/metabolic related indications such as diabetic foot
ulceration and post myocardial infarction. Strategically, while Alzheimer’s disease and MCI are the
primary focus, these additional
indications present substantial potential value add to the
development of Xanamem in the future.
Additionally, as we progress this research program, we will ensure that Xanamem is “partner-ready”
for any potential future commercial partners. The size of the unmet medical need presented by
Alzheimer’s disease is evident by the ongoing significant market interest in companies developing
promising new compounds. We believe there will be increasing interest from potential partners or
acquirers as we progress through the Phase II study and in the lead up to the release of our Phase II
results.
While the current strategic focus for Actinogen is Xanamem, we will also seek collaborations with
national and international partners that are active in the development of synergistic technologies for
Actinogens legacy research.. The Company will look to source licensing partners that could utilise the
Company’s current Actinomycetes library and exclusive intellectual property.
14. LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Should any likely developments of the Company eventuate, this information will be made available to
the market in accordance with its continuous disclosure obligations under the ASX Listing Rules.
21
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
REMUNERATION REPORT (AUDITED)
The information contained in the remuneration report has been audited as required by Section 308(3C)
of the Corporations Act 2001. The Remuneration Report is set out under the following main headings:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Introduction
Remuneration Governance
Executive remuneration arrangements
A. Remuneration principles and strategy
B. Approach to setting remuneration
C. Detail of incentive plans
Executive remuneration outcomes (including link to performance)
Executive contracts
Non-executive director fee arrangements
Additional disclosures relating to options and shares
Loans to key management personnel (KMP) and their related parties
Other transactions and balances with KMP and their related parties
1.
Introduction
The remuneration report details the remuneration arrangements for key management personnel
(KMP) who are defined as those having authority and responsibility for planning, directing and
controlling the major activities of the Company, directly or indirectly, including any director (whether
executive or otherwise). Key management personnel of Actinogen comprise the Board of Directors
and the Vice President of the Company.
The performance of the Company depends upon the quality of its key management personnel. To
prosper the Company must attract, motivate and retain appropriately skilled Directors and
Executives.
The Company’s broad remuneration policy is to ensure the remuneration package properly reflects
the person’s duties and responsibilities and that remuneration is competitive in attracting, retaining
and motivating people of the highest quality. The remuneration arrangements detailed in this report
are for the Directors of the Board and the Vice President during the financial year and are as follows:
22
NamePositionAppointedResignedDr Bill KetelbeyManaging Director / Chief Executive Officer18/12/2014-Mr Martin RogersExecutive Chairman1/12/2014-Dr Jason LoveridgeNon-Executive Director1/12/2014-Dr Anton UvarovNon-Executive Director16/12/2013-Dr Brendan de KauweExecutive Chairman23/09/201318/12/2014Mr Daniel ParasilitiNon-Executive Director23/09/20131/12/2014Mr Vincent RufflesVice President27/10/2014-
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
There were no other changes to KMP after the reporting date and before the date that the financial
report was authorised for issue.
The table below sets out the performance of the Company and the consequences of performance on
shareholders’ wealth over the past five years:
2.
Remuneration Governance
Remuneration of Directors is currently set by the Board of Directors. The Board has not established a
separate Remuneration Committee at this point in the Company’s development nor has the Board
engaged the services of a remuneration consultant to provide recommendations when setting the
remuneration received by Directors. It is considered that the size of the Board along with the level of
activity of the Company renders this impractical and the full Board considers in detail all of the
matters for which the Directors are responsible.
All matters of remuneration will be done in accordance with Corporations Act requirements,
especially in respect of related party transactions. Refer to the Corporate Governance Statement for
further information.
Actinogen Limited received 99.15% of votes in favour of its Remuneration Report for the 2014 financial
year. The Company did not receive any specific feedback at the Annual General Meeting or
throughout the year on its remuneration practices.
3.
Executive Remuneration Arrangements
(A) Remuneration principles and strategy
The Company aims to reward Executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Company and aligned with market practice.
Executive remuneration must be:
aligned with the Company’s vision, values and overall business objectives; and
-
- must be designed to motivate management to pursue the Company’s long term growth
and success.
The nature and amount of remuneration of Executives are assessed on a periodic basis by the Board (in
the absence of a Remuneration Committee) for their approval, with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high performing Executives.
The main objectives sought when reviewing executive remuneration is that the Company has:
Executives who will create value for shareholders;
coherent remuneration policies and practices to attract and retain executives;
competitive remuneration offered benchmarked against the external market; and
fair and responsible rewards to Executives having regard to the performance of the Group,
the performance of the Executives and the general pay environment.
23
20152014201320122011Quotedpriceofordinaryshares at period end (cents) 7.20 1.10 1.00 3.00 3.10 Quotedpriceofoptionsatperiod end (cents)----0.10Loss per share (cents)0.010.290.182.121.66
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
(B) Approach to setting remuneration
The Company aims to reward executives with a level and mix of remuneration appropriate to their
position and responsibilities, while being market competitive. The Group’s remuneration structure for
Executives can include a mix of fixed remuneration, short term incentive (STI) and long term incentive
(LTI) as outlined below.
Fixed Remuneration is represented by total employment cost and comprises base salary, statutory
superannuation contributions (where applicable) and other benefits. It is paid by the Company to
compensate fully for all requirements of the Executives employment with reference to the market
and the individual’s role and experience. It is subject to annual review considering market data and
the performance of the Company and individual. The Company benchmarks the fixed component
against appropriate market comparisons with the comparator group criteria being market
capitalisation.
The STI component is in the form of a cash bonus to the KMP. Payment of the cash bonus is entirely
discretionary and rewards the KMP for their contribution to achievement of business goals. The
business goals are determined annually by the Board and are linked to the strategic and operational
plans of the Group, including budgets agreed for each financial year.
The STI component of the Managing Director’s remuneration package currently includes a
performance condition whereby at the annual review of the Managing Directors’ salary, one of the
factors to be considered by the Board when granting an increase will be the Company’s market
capitalisation against appropriate ASX benchmarks with an aim for 50th percentile pay on ASX
market capitalisation. The Managing Director and the rest of the Board will agree benchmarks for
each year of the term.
The LTI component is in the form of Employee Loan Shares. The Board feels that the shares currently
on issue to these KMP provide a sufficient long term incentive to align the goals of the KMP with those
of the shareholders to maximise shareholder wealth, and as such, has not set any other performance
conditions for these KMP. The Board will continue to monitor this policy to ensure that it is appropriate
for the Company in future years.
(C) Details of incentive plans
Short term incentive
During the year, remuneration in the form of a Bonus Fee paid to KMP was linked to short term
performance conditions being met, being the successful capital raising of $10.8m and the successful
recruitment of the participants in the Phase I trial Company. Both of these short term milestones were
met during the year. Subsequently, the KMP’s were entitled to the following Bonus Fee:
Long term incentive
Additionally, during the year, remuneration in the form of Employee Loan Shares was issued to the
majority of KMP upon certain performance conditions being met (outlined below).
24
DirectorBonus FeeDr Bill Ketelbey50,000$ Mr Martin Rogers50,000$ Dr Jason Loveridge25,000$ Dr Anton Uvarov25,000$ Mr Vincent Ruffles10,000$
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
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The Loan Shares represent an option arrangement. Due to the vesting conditions attached to the
loan shares, these shares will be expensed over the vesting period. The key terms of the Employee
Share Plan and of each limited recourse loan provided under the Plan are as follows:
(i)
(ii)
(iii)
(iv)
(v)
the loan may only be applied towards the subscription price for the Loan Shares;
the loan will be interest free, provided that if the loan is not repaid by the repayment date set by
the Board, the loan will incur interest at 9% per annum after that date (which will accrue on a
daily basis and compound annually on the then outstanding loan balance);
by signing and returning a limited recourse loan application, the participants of the Plan (each a
Participant) acknowledges and agrees that the Loan Shares will not be transferred,
encumbered, otherwise disposed of, or have a security interest granted over it, by or on behalf
of the Participant until the loan is repaid in full to the Company;
the Company has security over the Loan Shares as security for repayment of the loan;
the loan becomes repayable on the earliest of:
a) five years from the date on which the loan is advanced to the Participant;
b) one month after the Participant resigns or ceases to be employed by the Company other
than (i) where the Participant is removed from office by shareholders of the Company, or
(ii) where the Company does not renew the Participant's executive employment
agreement or (iii) where the Company dismisses the Participant other than for cause; and
c) (by the legal personal representative of the Participant) six months after the Participant
ceases to be an employee of the Company due to their death.
Repayment Date
(vi)
(vii)
notwithstanding paragraph (v) above, the Participant may repay all or part of the loan at any
time before the Repayment Date; and
the loan will be limited recourse such that on the Repayment Date the repayment obligation
under the limited recourse loan will be limited to the lesser of (i) the outstanding balance of the
limited recourse loan and (ii) the market value of the Loan Shares on that date. In addition,
where the Participant has elected for the Loan Shares to be provided to the Company in full
satisfaction of the loan, the Company must accept the Loan Shares as full settlement of the
repayment obligation under the limited recourse loan.
Rights attaching to Loan Shares
(viii)
The Loan Shares will rank equally with all other fully paid ordinary shares on issue in the capital of
the Company. Holders of Loan Shares issued under the Plan will be entitled to exercise all voting
rights attaching to the Shares in accordance with the Company's constitution. In addition,
holders of Loan Shares issued under the Plan will be entitled to participate in dividends declared
and paid by the Company in accordance with the Company's constitution.
Vesting conditions
(ix)
Under the Employee Share Plan, the Directors may issue the Loan Shares subject to vesting
conditions (including performance milestones and time based retention hurdles), such that the
holder of the Loan Shares is only entitled to the benefit of the Loan Shares once the vesting
conditions are met. If the vesting conditions are not met, the holder will lose their entitlement to
the Loan Shares and the Company may buy-back or arrange for the sale of those Loan Shares.
This enables the Board to attract, incentivise and retain key personnel and to align the interests of
those personnel and Shareholders through equity participation.
Sale of Loan Shares
(x)
The Loan Shares may only be sold by a Participant where the Participant has been granted a
limited recourse loan and the loan has been repaid in full (otherwise any dealing by the
Participant in the Loan Shares is prohibited without the prior written consent of the Company).
25
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
The vesting conditions are summarised in the table below:
During the year the following Employee Share Plan shares vested:
a) On 16 December 2014, the vesting condition on the 7,500,000 Class C Employee Share Plan
shares issued to Mr Martin Rogers were met.
b) On 24 February 2015, the vesting condition on the 7,500,000 Class D Employee Share Plan
shares issued to Mr Martin Rogers were met.
c) On 21 May 2015, the vesting condition on the 3,000,000 Class B Employee Share Plan shares
issued to Dr Jason Loveridge were met.
4.
KMP Remuneration Outcomes
During the financial year ended 30 June 2015 the KMP’s received the following benefits:
-
-
-
Short-term benefits: cash salary, cash fees and cash bonuses;
Post-employment benefits: retirement benefits; and
Share-based payments.
26
RecipientClass of Loan ShareQuantityIssue PriceVesting ConditionVesting Completed Share-based Payment Expense @ 30/6/2015 Jason LoveridgeClass A 3,000,000 $ 0.02 Upon successful completion of the phase 1b multiple ascending dose (MAD) study.-77,059$ Jason LoveridgeClass B 3,000,000 $ 0.02 Upon funding of the phase 2a proof of concept study.(c)59,311$ Martin RogersClass C7,500,000 0.02$ Upon Shares trading on the ASX above $0.04 for ten consecutive trading days.(a)282,120$ Martin RogersClass D7,500,000 0.02$ Upon Shares trading on the ASX above $0.06 for ten consecutive trading days.(b)282,128$ Martin RogersClass E5,000,000 0.02$ Upon recruitment of the phase 1b multiple ascending dose study.-162,202$ Martin RogersClass F5,000,000 0.02$ Upon recruitment of the phase 2a proof of concept study.-46,208$ Vincent RufflesClass G2,000,000 0.04$ 3 years from commencement of employment.-16,862$ Bill KetelbeyClass H6,000,000 0.04$ 3 years from commencement of employment.-40,926$ Bill KetelbeyClass I3,000,000 0.04$ Upon Share trading on the ASX at 150% of the share price on the date of commencement of employment for 10 consecutive trading days.-109,440$ Bill KetelbeyClass J3,000,000 0.04$ Upon recruiment of Phase II Xanamen Study-23,764$ 45,000,000 1,100,020$
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
During the financial year ended 30 June 2014 the KMP’s only received Short-term benefits in the form
of cash fees. Refer to Table 1 and Table 2 below. All remuneration paid to Directors and Executives is
valued at the cost to the Company and expensed.
Table 1 - Remuneration of Key Management Personnel for the year ended 30 June 2015:
Table 2 - Remuneration of Key Management Personnel for the year ended 30 June 2014:
5.
Executive Contracts
During the financial year, the Company employed the below mentioned Executives and
remunerated them as follows:
27
As at 30/6/2015Post-employmentCash salary and feesCash bonusSuper-annuationOptionsShares$$$$$$ %DirectorsBill Ketelbey 154,891 50,000 11,638 174,130 - 390,659 45%Martin Rogers 66,670 50,000 11,084 772,658 200,000 1,100,412 88%Jason Loveridge 23,334 25,000 - 136,370 100,000 284,704 83%Anton Uvarov 38,334 25,000 - - 40,000 103,334 39%Brendan de Kauwe 30,000 - - - 50,000 80,000 63%Daniel Parasiliti 15,000 - - - - 15,000 0%ExecutivesVincent Ruffles 102,255 10,000 10,664 16,862 - 139,781 12%Total 430,484 160,000 33,385 1,100,020 390,000 2,113,890 Short Term BenefitsShare Based PaymentsValue of Share Based payments as a % of total remunerationTotalAs at 30/6/2014Post-employmentCash salary and feesCash bonusSuper-annuationOptionsShares$$$$$$ %DirectorsBrendan de Kauwe 39,400 ---- 39,400 -Daniel Parasiliti 23,274 ---- 23,274 -Anton Uvarov 21,097 ---- 21,097 -David Alan Zohar ----- - -Zhukov Pervan----- - -David Keast - ---- - -Alan Morton----- - -Christopher England - ---- - -Total83,771 - - - - 83,771 - Short Term BenefitsShare-based PaymentsValue of Share-based payments as a % of total remunerationTotal
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
- Managing Director: Dr Bill Ketelbey received wages totaling $204,891 plus superannuation of
$11,638;
-
Executive Chairman: Mr Martin Rogers received fees totaling $116,670 (plus GST) and
superannuation totaling $11,084;
- Vice President: Mr Vincent Ruffles received wages totaling $112,255 plus superannuation of
$10,664; and
-
Executive Chairman: Dr Brendan de Kauwe received fees totaling $30,000 (plus GST). He
ceased employment with the Company on 18 December 2014.
-
This is also detailed in Table 1 of Section F: Details of Remuneration.
Their contractual arrangements are outlined below.
Dr Bill Ketelbey – Managing Director
-
-
-
-
Employment date: employment commenced on 18 December 2014.
Salary (including superannuation prescribed by the relevant law) totaling $268,783 per
annum.
Term: the appointment of the employee will continue for a period of three years from the
date of commencement of employment unless terminated earlier.
Termination: the Company or the individual may terminate the contract by giving three
month’s written notice. In the event of breach or criminal activity termination is effective
immediately without payment other than the fee accrued to the date of termination.
Mr Martin Rogers – Executive Chairman
Employment date: employment commenced on 1 December 2014.
-
- Director’s Fee: $80,000 per annum (plus GST) plus the superannuation guarantee amount
-
-
prescribed by the relevant law. Subject to annual review.
Term: Mr Rogers was elected as a Director at the Company‘s 2014 Annual General
Meeting, with effect from 1/12/2014 following the acquisition of Corticrine Limited; and
thereafter is subject to retirement by rotation under the Company’s Constitution.
Termination: the Company may, at any time, terminate with effect by giving one month’s
written notice. Mr Rogers can terminate his employment by giving not less than one
month’s written notice. In the event of breach or criminal activity termination is effective
immediately without payment other than the fee accrued to the date of termination.
Mr Vincent Ruffles – Vice President
-
-
-
-
Employment date: employment commenced on 27 October 2014.
Salary (including superannuation prescribed by the relevant law) totaling $165,000 per
annum.
Term: the appointment of the employee will continue indefinitely from the date of
commencement of employment unless terminated earlier.
Termination: the Company or the individual may terminate the contract by giving three
month’s written notice. In the event of breach or criminal activity termination is effective
immediately without payment other than the fee accrued to the date of termination.
Dr Brendan de Kauwe – Executive Chairman (resigned18 December 2014)
Employment date: employment as Executive Chairman commenced on 23 April 2014.
-
- Director’s Fee: $60,000 per month (plus GST).
-
Term: employment ceased on 18 December 2014.
28
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
6.
Non-Executive Director Fee Arrangements
Non-Executive Directors are remunerated by way of fees, in the form of cash, non-cash benefits,
superannuation contributions or salary sacrifice into equity and do not normally participate in
schemes designed for the remuneration of executives.
As noted above, fees for Non-Executive Directors are generally not directly linked to the performance
of the Company, however, to align Directors’ interests with shareholder interests, the Directors are
encouraged to hold shares in the Company.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors, at a
general meeting held on 6 August 2007, is $150,000 per annum. The Directors set the individual Non-
Executive Directors fees within the limit approved by shareholders. Total fees paid to Non-Executive
Directors during the year were $126,668.
During the financial year the Company remunerated the below mentioned Non-Executives as
follows:
- Non-Executive Director: Dr Jason Loveridge received fees totaling $48,334 (GST not
applicable).
- Non-Executive Director: Dr Anton Uvarov received fees totaling $63,334 (plus GST).
- Non-Executive Director: Mr Daniel Parisiliti received fees totaling $15,000 (plus GST) (resigned
1 December 2014).
-
This is detailed in Table 1 of Section F: Details of Remuneration.
Their contractual arrangements are outlined below:
Dr Jason Loveridge – Non-Executive Director
- Contract date: commenced on 1 December 2014.
- Director’s Fee: $3,000 per month (excluding GST) up until 30 April 2014, this then increased
-
-
to $4,167 per month (excluding GST) from 1 May 2015. Subject to annual review.
Term: Dr Loveridge was elected as a Director at the Company‘s 2014 Annual General
Meeting, with effect from 1 December 2014 following the acquisition of Corticrine Limited;
and thereafter is subject to retirement by rotation under the Company’s Constitution.
Termination: The other members of the Board may request that the officer resign with
effect immediately in the event that the Board deems the individual’s performance is
unsatisfactory, or the Company’s shareholders may resolve to seek the officer’s removal
by member’s resolution. The individual may terminate the contract immediately.
Dr Anton Uvarov – Non-Executive Director
- Contract date: commenced on 16 December 2013.
- Director’s Fee: $3,000 per month (plus GST) up until 30 April 2014, this then increased to
$4,167 per month (plus GST) from 1 May 2015. Subject to annual review.
Term: Dr Uvarov’s appointment was valid until the date of the Company‘s 2014 Annual
General Meeting whereby he was re-elected and thereafter is subject to retirement by
rotation under the Company’s Constitution.
Termination: The Company or the individual may terminate the contract immediately.
-
-
29
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Mr Daniel Parasiliti – Non-Executive Director
- Contract date: commenced on 23 September 2013,
- Director’s Fee: $3,000 per month (plus GST) subject to annual review.
-
Term: Mr Parasiliti was re-elected as a Director at the 2013 annual general meeting of the
Company, and was subject to retirement by rotation under the Company’s Constitution.
Termination: ceased on 18 December 2014.
-
7.
Additional disclosures relating to options and shares
Options
The table below discloses the number of employee loan share (in substance options) granted, vested
or lapsed during the year. There were no share options issued as compensation to KMP during the
financial year ended 30 June 2014.
a) Option holding of KMP
At the date of this report, the unissued ordinary shares of Actinogen under option carry no dividend
or voting rights. When exercisable, each option is convertible into one ordinary share of the
Company.
30
ClassBalance at beginning of year 1/7/2014Granted as remunerationOptions exercisedBalance at end of year 30/6/2015VestedNot vestedDirectorsJason LoveridgeA- 3,000,000 - 3,000,000 - 3,000,000 Jason LoveridgeB- 3,000,000 - 3,000,000 3,000,000 - - 6,000,000 - 6,000,000 3,000,000 3,000,000 Martin RogersC- 7,500,000 - 7,500,000 7,500,000 - Martin RogersD- 7,500,000 - 7,500,000 7,500,000 - Martin RogersE- 5,000,000 - 5,000,000 - 5,000,000 Martin RogersF- 5,000,000 - 5,000,000 - 5,000,000 - 25,000,000 - 25,000,000 15,000,000 10,000,000 Bill KetelbeyH- 6,000,000 - 6,000,000 - 6,000,000 Bill KetelbeyI- 3,000,000 - 3,000,000 - 3,000,000 Bill KetelbeyJ- 3,000,000 - 3,000,000 - 3,000,000 - 12,000,000 - 12,000,000 - 12,000,000 Other KMPVincent RufflesG- 2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 - 2,000,000 Total- 45,000,000 - 45,000,000 18,000,000 27,000,000 Vested at 30/6/2015
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
b) Value of options awarded, vested and lapsed during the year
31
ClassValue of options granted during the year ($)Value of options vested during the year ($)Value of options lapsed during the year ($)Share-based payment recognised during the year ($)Remuneration consisting of option for the year (%)Vesting ConditionExecutive DirectorsJason LoveridgeA112,848$ - - 77,059$ 27%Upon successful completion of the phase 1b multiple ascending dose (MAD) study.Jason LoveridgeB112,848$ 112,848$ - 59,311$ 21%Upon funding of the phase 2a proof of concept study.Martin RogersC282,120$ 282,120$ - 282,120$ 26%Upon Shares trading on the ASX above $0.04 for ten consecutive trading days.Martin RogersD282,128$ 282,128$ - 282,128$ 26%Upon Shares trading on the ASX above $0.06 for ten consecutive trading days.Martin RogersE188,085$ - - 162,202$ 15%Upon recruitment of the phase 1b multiple ascending dose study.Martin RogersF188,085$ - - 46,208$ 4%Upon recruitment of the phase 2a proof of concept study.Bill KetelbeyH218,886$ - - 40,926$ 10%3 years from commencement of employment.Bill KetelbeyI109,440$ - - 109,440$ 28%Upon Share trading on the ASX at 150% of the share price on the date of commencement of employment for 10 consecutive trading days.Bill KetelbeyJ109,443$ - - 23,764$ 6%Upon recruiment of Phase II Xanamen Study $ 1,603,883 $ 677,096 $ 1,083,158 Senior ExecutivesVincent RufflesG75,234$ - - 16,862$ 12%3 years from commencement of employment.1,679,117$ 677,096$ -$ 1,100,020$
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
c) Options awarded, vested and lapsed during the year
32
Class# OptionsFinancial yearGrant DateVesting conditionsExercise price ($)Fair value per option at grant date ($)Expiry dateNumber vested during the yearNumber lapsed during the yearExecutive DirectorsJason LoveridgeA3,000,000 201519/11/2014Upon successful completion of the phase 1b multiple ascending dose (MAD) study.0.02$ 0.0376$ 19/11/2019- - Jason LoveridgeB3,000,000 201519/11/2014Upon funding of the phase 2a proof of concept study.0.02$ 0.0376$ 19/11/20193,000,000 - Martin RogersC7,500,000 201519/11/2014Upon Shares trading on the ASX above $0.04 for ten consecutive trading days.0.02$ 0.0376$ 19/11/20197,500,000 - Martin RogersD7,500,000 201519/11/2014Upon Shares trading on the ASX above $0.06 for ten consecutive trading days.0.02$ 0.0376$ 19/11/20197,500,000 - Martin RogersE5,000,000 201519/11/2014Upon recruitment of the phase 1b multiple ascending dose study.0.02$ 0.0376$ 19/11/2019- - Martin RogersF5,000,000 201519/11/2014Upon recruitment of the phase 2a proof of concept study.0.02$ 0.0376$ 19/11/2019- - Bill KetelbeyH6,000,000 201515/12/20143 years from commencement of employment.0.04$ 0.0365$ 15/12/2019- - Bill KetelbeyI3,000,000 201515/12/2014Upon Share trading on the ASX at 150% of the share price on the date of commencement of employment for 10 consecutive trading days.0.04$ 0.0365$ 15/12/2019- - Bill KetelbeyJ3,000,000 201515/12/2014Upon recruiment of Phase II Xanamen Study0.04$ 0.0365$ 15/12/2019- - Total Directors43,000,000 18,000,000 - Senior ExecutivesVincent RufflesG2,000,000 201519/11/20143 years from commencement of employment.0.02$ 0.0376$ 19/11/2019- - Total Senior Executives2,000,000 - - Total45,000,000 18,000,000 -
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
Shares
At 30 June 2015 the relevant interest of each KMP in ordinary fully paid shares of the Company were:
(a) Directors were issued as remuneration Director Placement Shares during the year.
(b) Movement relates to the following: initial directors interest for Directors appointed during the year,
shares taken up under the Private Placement conducted in December 2014 and the Share Purchase
Plan conducted in May 2015; and the final directors interest of those Directors who have resigned
during the year.
(c) 14,717,184 subject to voluntary escrow until 30 November 2015.
There were no shares issued as compensation to KMP during the financial year ended 30 June 2014.
At 30 June 2014 the relevant interest of each KMP in ordinary fully paid shares of the Company were:
(a) Movement relates to the directors interest for Directors appointed during the year, and the
final directors interest of those Directors who have resigned during the year.
33
Balance at beginning of year 1/7/2014Granted as remuneration (a)On exercise of optionsNet change other (b)Balance at end of year 30/6/2015DirectorsBill Ketelbey- - - 342,894 342,894 Martin Rogers- 10,000,000 - 1,407,894 11,407,894 Jason Loveridge (c)- 5,000,000 - 16,875,078 21,875,078 Anton Uvarov2,029,350 2,000,000 - 157,894 4,187,244 Brendan de Kauwe2,000,000 2,500,000 - (4,500,000) - Daniel Parasiliti1,000,000 - - (1,000,000) - 5,029,350 19,500,000 - 13,283,760 37,813,110 Other KMPVincent Ruffles- - - - - - - - - - Total5,029,350 19,500,000 - 13,283,760 37,813,110 Balance at beginning of year 1/7/2013Granted as remunerationOn exercise of optionsNet change otherBalance at end of year 30/6/2014DirectorsBrendan de Kauwe- - - 2,000,000.00 2,000,000 Daniel Parasiliti- - - 1,000,000.00 1,000,000 Anton Uvarov- - - 2,029,350.00 2,029,350 David Zohar 17,941,831 - - (17,941,831) - Zhukov Pervan17,133,334 - - (17,133,334) - David Keast13,733,333 - - (13,733,333) - Alan Morton666,666 - - (666,666) - Christopher England500,000 - - (500,000) - Total49,975,164 - - (44,945,814) 5,029,350
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
8.
Loans Made to Key Management Personnel
No loans were made to any Director or KMP or any of their related entities during the reporting
period.
9.
Other Transactions with Key Management Personnel
There were no other transactions with any Director of KMP or any of their related entities during the
reporting period.
End of Audited Remuneration Report
15.
INDEMNIFICATION OF AUDITORS
To the extent permitted by Law, the Company has agreed to indemnify its auditors, Ernst & Young, as
part of the terms of its audit engagement agreement against claims by third parties arising from the
audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or
since the financial year.
16.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, Actinogen Limited paid a premium to insure the directors and officers of the
Company. The liabilities insured are legal costs that may be incurred in defending civil or criminal
proceedings that may be brought against the officers in their capacity as officers of the entity in the
Company, and any other payments arising from liabilities incurred by the officers in connection with
such proceedings.
This does not include such liabilities that arise from conduct involving a wilful breach of duty by the
officers or the improper use by the officers of their position or of information to gain advantage from
themselves or someone else or to cause detriment to the company. It is not possible to apportion the
premium between amounts relating to the insurance against legal costs and those relating to other
liabilities.
17. PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court, under section 237 of the Corporations Act 2001, to bring
proceedings on behalf of the Company or intervene in any proceedings to which the Company is
party for the purpose of taking responsibility on behalf of the Company for all or part of these
proceedings. The Company was not a party to any such proceedings during the year.
18. ENVIRONMENTAL REGULATIONS
The Company is subject to the reporting requirements of both the Energy Efficiency Opportunities Act
2006 and the National Greenhouse and Energy Reporting Act 2007.
For the year ended 30 June 2015 the Company was below the reported threshold for both legislative
reporting requirements therefore is not required to register or report. The Company will continue to
monitor its registration and reporting requirements however it does not expect to have future reporting
requirements.
19. NON-AUDIT SERVICES
No fees were paid for non-audit services to the external auditors and their associated entities during the
year ended 30 June 2015 and 30 June 2014.
34
ACTINOGEN LIMITED
D I R E C T O R S ’ R E P O R T
_____________________________________________________________
20. LEAD AUDITOR’S INDEPENDENCE DECLARATION
The Lead Auditor’s Independence Declaration as required under section 307C of the Corporations Act
2001 for the year ended 30 June 2015 forms a part of the Directors’ Report and can be found on page
36.
Signed in accordance with a resolution of the Board of Directors.
Dr Bill Ketelbey
Managing Director
Perth, Western Australia
Date: Friday, 28 August 2015
35
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Actinogen
Limited
In relation to our audit of the financial report of Actinogen Limited for the financial year ended 30 June
2015, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
T G Dachs
Partner
28 August 2015
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
36
TD:MW:Actinogen:020
ACTINOGEN LIMITED
S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 5
__________________________________________________________________
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
37
Full-year endedFull-year ended30/06/201530/06/2014Note$ $ Revenue from continuing operations6 49,927 34,199 Other income6 103,502 147,005 Total revenue & other income 153,429 181,204 Business development (507,609) (171,621)Corporate administration expenses (600,583) (194,285)Share-based payments22 (1,490,020) - Research & development expenses6 (2,758,346) (218,681)Finance costs (4,953) (722)Amortisation expense (208,520) - Impairment expenses (1,501) (22,522)Depreciation expenses (12,906) (13,595)Total expenses (5,584,438) (621,426)Loss Before Income Tax 7 (5,431,009) (440,222)Income tax benefit/(expense) - - Loss for the year(5,431,009)(440,222)Other comprehensive income for the Period net of tax - - Total comprehensive loss for the Period(5,431,009)(440,222)Earnings per share for (loss) attributable to the ordinary equity holders of the companyBasic loss per share (cents)17(0.01)(0.29)Dilutive loss per share (cents)17(0.01)(0.29)
ACTINOGEN LIMITED
S T A T E M E N T O F F I N A N C I A L P O S I T I O N
A s a t 3 0 J u n e 2 0 1 5
__________________________________________________________________
The above statement of financial position should be read in conjunction with the accompanying notes
38
Full-year endedFull-year ended30/06/201530/06/2014Note$ $CURRENT ASSETSCash and cash equivalents89,805,6101,127,676Trade and other receivables9215,46025,926TOTAL CURRENT ASSETS10,021,0701,153,602NON-CURRENT ASSETSAvailable for sale financial assets10 - 1,500Property, plant and equipment116,755106,637Intangible assets125,551,423 - TOTAL NON-CURRENT ASSETS5,558,178108,137TOTAL ASSETS15,579,2481,261,739CURRENT LIABILITIESTrade and other payables14222,64049,927TOTAL LIABILITIES222,64049,927NET ASSETS 15,356,6081,211,812EQUITYContributed equity1526,254,8917,245,614Reserve shares15(1,140,000) - Reserves166,495,651 4,789,123 Accumulated losses(16,253,934)(10,822,925)TOTAL EQUITY 15,356,6081,211,812
ACTINOGEN LIMITED
S T A T E M E N T O F C A S H F L O W S
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 5
_________________________________________________________________
The above statement of cash flows should be read in conjunction with the accompanying notes.
39
Full-year endedFull-year ended30/06/201530/06/2014$ $CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers - 20,000 Interest received50,05714,120Payments to suppliers and employees(1,065,090)(415,404)Payments for research and development(2,808,258)(203,507)Research and development tax offset103,502146,954Net cash outflow from operating activities8(3,719,789)(437,837)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment(8,120) (4,684)Net proceeds from sale of property, plant and equipment 36,566 - Net cash inflow/(outflow) from investing activities28,446(4,684)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares13,222,5001,595,500Transaction costs associated with issue of shares(853,223)(137,819)Net cash inflow from financing activities12,369,2771,457,681Net increase in cash and cash equivalents8,677,9341,015,160Cash and cash equivalents at beginning of the year1,127,676112,516CASH AND CASH EQUIVALENTS AT END OF THE YEAR89,805,6101,127,676Note
ACTINOGEN LIMITED
S T A T E M E N T O F C H A N G E S I N E Q U I T Y
F o r t h e y e a r e n d e d 3 0 J u n e 2 0 1 4
_________________________________________________________________
The above statement of changes in equity should be read in conjunction with the accompanying notes.
40
Contributed EquityAccumulated LossesOption ReserveReserve SharesTotalFull-year ended 30/6/2015$$$$$Balance as at 1/7/20147,245,614(10,822,925)4,789,123 - 1,211,811Loss for the year - (5,431,009) - - (5,431,009)Other comprehensive income - - - - - Total comprehensive income for the year - (5,431,009) - - (5,431,009)Transactions with equity holders in their capacity as equity holdersShares issued during the year19,862,500 - - (1,140,000)18,722,500Share-based payments - - 1,706,528 - 1,706,528 Capital raising costs(853,223) - - - (853,223)Balance as at 30/6/201526,254,891(16,253,934)6,495,651(1,140,000)15,356,608Contributed EquityAccumulated LossesOption ReserveReserve SharesTotalFull-year ended 30/6/2014$$$$$Balance as at 1/7/20135,788,433(10,382,704)4,788,623 - 194,352 - Loss for the year - (440,222) - - (440,222)Other comprehensive income - - - - - Total comprehensive income for the year - (440,222) - - (440,222)Transactions with equity holders in their capacity as equity holdersShares issued during the year1,565,000 - - - 1,565,000Capital raising costs(137,819) - - - (137,819)Options issued during the year - - 500 - 500Shares issued upon exercise of options 30,000 - - - 30,000Balance as at 30/6/20147,245,614(10,822,925)4,789,123 - 1,211,811
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
1.
CORPORATE INFORMATION
The consolidated financial statements of Actinogen Limited (the Company) and its subsidiary
(Corticrine Limited) (collectively, the Group), for the year ended 30 June 2015 were authorised in
accordance with a resolution of Directors on 28 August 2015.
Actinogen Limited is a for profit company limited by shares incorporated and domiciled in Australia
whose shares are publicly traded on the Australian Stock Exchange. The nature of operations and
principal activities of the Company are described in the Directors’ Report. Information on other
related party relationships is provided in Note 21.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated. The financial statements of the Company are for the financial year ended 30 June 2015.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards
Board, and the Corporations Act 2001. The financial statements have been prepared on a going
concern basis.
(b) Compliance with IFRS
The financial statements of the Company also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(c)
Historical cost convention
These financial statements have been prepared under the historical cost convention, except for
available-for-sale financial investments which have been measured at fair value.
(d) Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Company’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in note 4.
(e)
Foreign currency translation
The Group’s consolidated financial statements are presented in Australian dollars, which is also the
Parent’s functional currency. For each entity, the Group determines the functional currency and items
included in the financial statements of each entity are measured using that functional currency. The
Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss
that is reclassified to profit or loss reflects the amount that arises from using this method.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective
functional currency spot rates at the date the transaction first qualifies for recognition. Monetary
assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date. Differences arising on settlement or translation of monetary
items are recognised in profit or loss with the exception of monetary items that are designated as part
of the hedge of the Group’s net investment of a foreign operation. These are recognised in other
comprehensive income until the net investment is disposed of, at which time, the cumulative amount
is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those
monetary items are also recorded in other comprehensive income.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
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Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non-monetary items measured at fair value is
treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in other comprehensive income or
profit or loss are also recognised in other comprehensive income or profit or loss, respectively).
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at
the rate of exchange prevailing at the reporting date and their statements of profit or loss are
translated at exchange rates prevailing at the dates of the transactions. The exchange differences
arising on translation for consolidation purposes are recognised in other comprehensive income. On
disposal of a foreign operation, the component of other comprehensive income relating to that
particular foreign operation is recognised in profit or loss. Any goodwill arising on the acquisition of a
foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities
arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at
the spot rate of exchange at the reporting date.
(f)
Plant & equipment
Each asset of plant and equipment is stated at cost, net of accumulated depreciation and
impairment losses, if any. Assets are depreciated from the date the asset is ready for use.
Items of plant and equipment are depreciated using the diminishing value method over their
estimated useful lives to the Company. The depreciation rates used for each class of asset for the
current period are as follows:
Plant and Equipment
Office and Equipment
Computer Equipment
General Pool Assets >$1,000
7.5% to 37.5%
40%
25% to 66.67%
37%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. The recoverable amount is
assessed on the basis of expected net cash flows that will be received from the assets continual use or
subsequent disposal. The expected cash flows have been discounted to their present value in
determining the recoverable amount.
An asset is de-recognised upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
statement of profit and loss when the asset is de-recognised.
The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted if
appropriate, at each balance date.
(g)
Impairment of non-financial assets
At each reporting date, the Company reviews the carrying values of its assets to determine whether
there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value
in use, is compared to the assets carrying value. Any excess of the assets carrying value over its
recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
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In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less cost to sell, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.
(h)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation
and accumulated
intangibles, excluding capitalised
development costs, are not capitalised and the related expenditure is reflected in profit or loss in the
period in which the expenditure is incurred.
Internally generated
impairment
losses.
The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with
finite lives are amortised over the useful economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are considered to modify the amortisation period or
method, as appropriate, and are treated as changes in accounting estimates and adjusted on a
prospective basis. The amortisation expense on intangible assets with finite lives is recognised in the
statement of profit or loss as the expense category that is consistent with the function of the intangible
assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in the
statement of profit or loss when the asset is derecognised.
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are
recognised as an intangible asset when the Group can demonstrate:
Its intention to complete and its ability to use or sell the asset
The technical feasibility of completing the intangible asset so that the asset will be available for
use
or sale
How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development
The ability to use the intangible asset generated
Following initial recognition of the development expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset
begins when development is complete and the asset is available for use. It is amortised over the
period of expected future benefit. Amortisation is recorded in cost of sales. During the period of
development, the asset is tested for impairment annually.
Patents
The Group made upfront payments to purchase patents. The patents have been granted for a period
of 20 years by the relevant government agency with the option of renewal at the end of this period.
As a result, those patents are amortised on a straight-line basis over the period of the patent.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
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(i)
Income tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the end of the reporting period.
Deferred income tax is accounted for using the liability method on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
However, the deferred income tax from the initial recognition of an asset or liability, in a transaction
other than a business combination is not accounted for if it arises that at the time of the transaction
affects either accounting or taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the asset is realised or
liability is settled. Deferred tax is credited in the statement of comprehensive income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if
it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
The Company’s entitlement to the Research and Development tax rebate is recognised as a tax
benefit upon receipt from the Australian Taxation Office.
(j)
Employee benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have
been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits.
(k)
Share-based payments
The Company provides benefits to employees (including directors) of the Company in the form of
share-based payment transactions, whereby employees render services in exchange for shares or
rights over shares (‘equity-settled transactions’). The cost of these equity-settled transactions with
employees is measured by reference to the fair value at the date at which they are granted.
The fair value is determined by an internal valuation using a Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that,
in the opinion of the directors of the Company, will ultimately vest. This opinion is formed based on the
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ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
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best available information at balance date. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination
of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition. Where an equity-settled award is cancelled, it is treated as if it
had vested on the date of cancellation, and any expense not yet recognised for the award is
recognised immediately. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and new award
are treated as if they were a modification of the original award.
(l)
Cash and cash equivalents
For the purpose of the Statement of Cash Flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short term, high liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value and bank overdrafts.
(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 recognised.
Interest revenue is recorded using the effective interest rate method (EIR). EIR is the rate that exactly
discounts the estimated future cash payments or receipts over the expected life of the financial
instrument, or a shorter period, where appropriate, to the net carrying amount of the financial asset or
liability. Interest income is included in finance income in the statement of comprehensive income.
(n)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effect interest method, less allowance for impairment. Trade receivables are generally due
for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly. An allowance account
(provision for impairment of trade receivables) is used when there is objective evidence that the
Company will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days
overdue) are considered indicators that the trade receivable is impaired. The amount of the
impairment allowance is the difference between the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to
short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the statement of comprehensive income within
impairment losses – financial assets. When a trade receivable for which an impairment allowance
had been recognised becomes uncollectible in a subsequent period, it is written off against the
allowance account. Subsequent recoveries of amounts previously written off are credited against
impairment losses – financial assets in the statement of comprehensive income.
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ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
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(o) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount
of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
(p) Contributed equity
Ordinary issued share capital is recognised at the fair value of the consideration received by the
Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in
equity as a reduction in share proceeds received.
(q)
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
Company. Payables to related parties are carried at the principal amount. Interest, when charged
by the lender, is recognised as an expense on an accrual basis.
(r)
Provisions
Provisions for legal claims and make good obligations are recognised when the Company has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item included in the same class of
obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the reporting date. The discount rate used to determine
the present value reflects current market assessments of the time value of money and the risks
specific to the liability. The increase in the provision due to the passage of time is recognised as
interest expense.
(s)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of additional ordinary shares
that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
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(t)
Investments and other financial assets
Classification
The Company classifies its financial assets in the following categories: loans and receivables and
available-for-sale financial assets. The classification depends on the purpose for which the investments
were acquired. Management determines the classification of its investments at initial recognition.
Recognition
Financial instruments are initially measured at fair value on trade date, which includes transaction
costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these
instruments are measured as set out below.
Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-
derivatives that are either designated in this category or not classified in any of the other categories.
They are included in non-current assets unless management intends to dispose of the investment
within 12 months of the reporting period.
Loans and receivables
Loans and receivables are non-derivative financial assets initially recognised at fair value with fixed or
determinable payments that are not quoted in an active market and are stated at amortised cost
using the effective interest rate method.
Subsequent measurement
Available for sale financial assets are subsequently measured at fair value. Changes in the fair value
of available for sale financial assets are recognised in the consolidated statement of comprehensive
income.
Loans and receivables are carried at amortised cost using the effective interest rate method.
Details of how the fair value of financial instruments is determined and disclosed in Note 3.
Impairment
The Company assesses at each balance date whether there is objective evidence that a financial
asset or Company of financial assets is impaired. In the case of equity securities classified as available-
for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as
an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial
assets, the cumulative loss - measured as the difference between the acquisition cost and the current
fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is
removed from equity and recognised in the statement of comprehensive income. Impairment losses
recognised in the statement of comprehensive income on equity instruments classified as available-
for-sale are not reversed through the statement of comprehensive income.
If there is evidence of impairment for any of the Company’s financial assets carried at amortised cost,
the loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows
are discounted at the financial asset’s original effective interest rate. The loss is recognised in the
statement of comprehensive income.
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ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
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(u)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors.
(v) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the costs, which it is
intended to compensate, are expensed. When the grant relates to an asset, it is recognised as
income in equal amount over the expected useful life of the related asset.
(w) New accounting standards and interpretations adopted
The following standards and interpretations have been adopted by the Company:
Reference
Title
AASB 2012-3
AASB 2013-3
Amendments to Australian Accounting Standards - Offsetting
Financial Assets and Financial Liabilities
AASB 2012-3 adds application guidance to AASB 132 Financial
Instruments: Presentation to address inconsistencies identified in
applying some of the offsetting criteria of AASB 132, including
clarifying the meaning of "currently has a legally enforceable
right of set-off" and that some gross settlement systems may be
considered equivalent to net settlement.
Amendments to AASB 136 – Recoverable Amount Disclosures
for Non-Financial Assets
AASB 2013-3 amends the disclosure requirements in AASB 136
Impairment of Assets. The amendments include the requirement
to disclose additional information about the fair value
measurement when the recoverable amount of impaired assets
is based on fair value less costs of disposal.
Application
date of
standard*
Application
date for Group*
1 January 2014
1 July 2014
1 January 2014
1 July 2014
AASB 1031
Materiality
1 January 2014
1 July 2014
The revised AASB 1031 is an interim standard that cross-
references to other Standards and the Framework (issued
December 2013) that contain guidance on materiality.
AASB 1031 will be withdrawn when references to AASB 1031 in
all Standards and Interpretations have been removed.
AASB 2014-1 Part C issued in June 2014 makes amendments to
eight Australian Accounting Standards to delete their
references to AASB 1031. The amendments are effective from 1
July 2014*.
AASB 2013-9
Amendments to Australian Accounting Standards – Conceptual
Framework, Materiality and Financial Instruments
^^
^^
The Standard contains three main parts and makes
amendments to a number Standards and Interpretations.
Part A of AASB 2013-9 makes consequential amendments
arising from the issuance of AASB CF 2013-1.
Part B makes amendments to particular Australian Accounting
Standards to delete references to AASB 1031 and also makes
minor editorial amendments to various other standards.
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ACTINOGEN LIMITED
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Application
date of
standard*
Application
date for Group*
1 July 2014
1 July 2014
1 July 2014
1 July 2014
Reference
Title
AASB 2014-1
Part A -Annual
Improvements
2010–2012 Cycle
AASB 2014-1
Part A -Annual
Improvements
2011–2013 Cycle
Part C makes amendments to a number of Australian
Accounting Standards, including incorporating Chapter 6
Hedge Accounting into AASB 9 Financial Instruments.
AASB 2014-1 Part A: This standard sets out amendments to
Australian Accounting Standards arising from the issuance by
the International Accounting Standards Board (IASB) of
International Financial Reporting Standards (IFRSs) Annual
Improvements to IFRSs 2010–2012 Cycle and Annual
Improvements to IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle addresses the
following items:
► AASB 2 - Clarifies the definition of 'vesting conditions' and
'market condition' and introduces the definition of
'performance condition' and 'service condition'.
► AASB 3 - Clarifies the classification requirements for
contingent consideration in a business combination by
removing all references to AASB 137.
► AASB 8 - Requires entities to disclose factors used to identify
the entity's reportable segments when operating segments
have been aggregated. An entity is also required to
provide a reconciliation of total reportable segments' asset
to the entity's total assets.
► AASB 116 & AASB 138 - Clarifies that the determination of
accumulated depreciation does not depend on the
selection of the valuation technique and that it is
calculated as the difference between the gross and net
carrying amounts.
AASB 124 - Defines a management entity providing KMP
services as a related party of the reporting entity. The
amendments added an exemption from the detailed disclosure
requirements in paragraph 17 of AASB 124 for KMP services
provided by a management entity. Payments made to a
management entity in respect of KMP services should be
separately disclosed.
Annual Improvements to IFRSs 2011–2013 Cycle addresses the
following items:
► AASB13 - Clarifies that the portfolio exception in paragraph
52 of AASB 13 applies to all contracts within the scope of
AASB 139 or AASB 9, regardless of whether they meet the
definitions of financial assets or financial liabilities as defined
in AASB 132.
AASB 140 - Clarifies that judgment is needed to determine
whether an acquisition of investment property is solely the
acquisition of an investment property or whether it is the
acquisition of a group of assets or a business combination in the
scope of AASB 3 that includes an investment property. That
judgment is based on guidance in AASB 3.
**
Only applicable to not-for-profit/public sector entities.
The company has not yet determined the impact of the above new and amended accounting standards
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(x)
New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2015 reporting periods and have not been early adopted by the Company. These new standards and
interpretations are set out below.
The following standards and interpretations have been issued by the AASB but are not yet effective for the
period ending 31 March 2015.
Application
date of
standard*
Application
date for
Group*
AASB 9
Financial
Instruments
Reference Title
Summary
AASB 9
Financial
Instruments
AASB 9 (December 2014) is a new Principal standard which
replaces AASB 139. This new Principal version supersedes AASB 9
issued in December 2009 (as amended) and AASB 9 (issued in
December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment
model and a substantially-reformed approach to hedge
accounting.
AASB 9 is effective for annual periods beginning on or after 1
January 2018. However, the Standard is available for early
application. The own credit changes can be early applied in
isolation without otherwise changing the accounting for financial
instruments.
The final version of AASB 9 introduces a new expected-loss
impairment model that will require more timely recognition of
expected credit losses. Specifically, the new Standard requires
entities to account for expected credit losses from when financial
instruments are first recognised and to recognise full lifetime
expected losses on a more timely basis.
Amendments to AASB 9 (December 2009 & 2010 editions and
AASB 2013-9) issued in December 2013 included the new hedge
accounting requirements, including changes to hedge
effectiveness testing, treatment of hedging costs, risk components
that can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach for
classification and measurement of financial assets compared with
the requirements of AASB 139.
The main changes are described below.
a.
Financial assets that are debt instruments will be classified
based on (1) the objective of the entity's business model for
managing the financial assets; (2) the characteristics of the
contractual cash flows.
b. Allows an irrevocable election on initial recognition to present
gains and losses on investments in equity instruments that are
not held for trading in other comprehensive income. Dividends
in respect of these investments that are a return on investment
can be recognised in profit or loss and there is no impairment
or recycling on disposal of the instrument.
c.
Financial assets can be designated and measured at fair
value through profit or loss at initial recognition if doing so
eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and losses on them,
on different bases.
d. Where the fair value option is used for financial liabilities the
change in fair value is to be accounted for as follows:
►
The change attributable to changes in credit risk are
presented in other comprehensive income (OCI)
►
The remaining change is presented in profit or loss
50
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
Reference Title
Summary
Application
date of
standard*
Application
date for
Group*
AASB 15
Revenue from
Contracts with
Customers
AASB
2015-1
Amendments
to Australian
Accounting
Standards –
Annual
Improvements
to Australian
Accounting
Standards
2012–2014
Cycle
AASB 9 also removes the volatility in profit or loss that was caused
by changes in the credit risk of liabilities elected to be measured
at fair value. This change in accounting means that gains caused
by the deterioration of an entity’s own credit risk on such liabilities
are no longer recognised in profit or loss.
Consequential amendments were also made to other standards
as a result of AASB 9, introduced by AASB 2009-11 and superseded
by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments arising
from the issuance of AASB 9 in Dec 2014.
AASB 2014-8 limits the application of the existing versions of AASB 9
(AASB 9 (December 2009) and AASB 9 (December 2010)) from 1
February 2015 and applies to annual reporting periods beginning
on after 1 January 2015.
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with
Customers, which replaces IAS 11 Construction Contracts, IAS 18
Revenue and related Interpretations (IFRIC 13 Customer Loyalty
Programmes, IFRIC 15 Agreements for the Construction of Real
Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31
Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to
depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. An entity
recognises revenue in accordance with that core principle by
applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance
obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation
Early application of this standard is permitted.
AASB 2014-5 incorporates the consequential amendments to a
number Australian Accounting Standards (including Interpretations)
arising from the issuance of AASB 15.
1 January
2018
1 July 2018
The subjects of the principal amendments to the Standards are set
out below:
1 January
2016
1 July 2016
AASB 5 Non-current Assets Held for Sale and Discontinued
Operations:
• Changes in methods of disposal – where an entity
reclassifies an asset (or disposal group) directly from being
held for distribution to being held for sale (or visa versa),
an entity shall not follow the guidance in paragraphs 27–
29 to account for this change.
AASB 7 Financial Instruments: Disclosures:
•
Servicing contracts - clarifies how an entity should apply
the guidance in paragraph 42C of AASB 7 to a servicing
contract to decide whether a servicing contract is
‘continuing involvement’ for the purposes of applying the
disclosure requirements in paragraphs 42E–42H of AASB 7.
• Applicability of the amendments to AASB 7 to condensed
interim financial statements - clarify that the additional
51
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
Reference Title
Summary
Application
date of
standard*
Application
date for
Group*
disclosure required by the amendments to AASB 7
Disclosure–Offsetting Financial Assets and Financial
Liabilities is not specifically required for all interim periods.
However, the additional disclosure is required to be given
in condensed interim financial statements that are
prepared in accordance with AASB 134 Interim Financial
Reporting when its inclusion would be required by the
requirements of AASB 134.
AASB 119 Employee Benefits:
• Discount rate: regional market issue - clarifies that the high
quality corporate bonds used to estimate the discount
rate for post-employment benefit obligations should be
denominated in the same currency as the liability. Further
it clarifies that the depth of the market for high quality
corporate bonds should be assessed at the currency
level.
AASB 134 Interim Financial Reporting:
• Disclosure of information ‘elsewhere in the interim financial
report’ -amends AASB 134 to clarify the meaning of
disclosure of information ‘elsewhere in the interim
financial report’ and to require the inclusion of a cross-
reference from the interim financial statements to the
location of this information.
The Standard makes amendments to AASB 101 Presentation of
Financial Statements arising from the IASB’s Disclosure Initiative
project. The amendments are designed to further encourage
companies to apply professional judgment in determining what
information to disclose in the financial statements. For example,
the amendments make clear that materiality applies to the whole
of financial statements and that the inclusion of immaterial
information can inhibit the usefulness of financial disclosures. The
amendments also clarify that companies should use professional
judgment in determining where and in what order information is
presented in the financial disclosures.
1 January
2016
1 July 2016
The Standard completes the AASB’s project to remove Australian
guidance on materiality from Australian Accounting Standards.
1 July 2015
1 July 2015
AASB
2015-2
AASB
2015-3
Amendments
to Australian
Accounting
Standards –
Disclosure
Initiative:
Amendments
to AASB 101
Amendments
to Australian
Accounting
Standards
arising from the
Withdrawal of
AASB 1031
Materiality
*
^^
Designates the beginning of the applicable annual reporting period unless otherwise stated.
The application dates of AASB 2013-9 are as follows:
Part C - reporting periods beginning on or after 1 January 2015 Application date for the Group: period
beginning 1 July 2015
There are a number of other standards issued but not yet effective which will not impact the Company.
52
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
3.
FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to a variety of financial risks: market risk, (including interest rate risk
and price risk), credit risk and liquidity risk. The Company’s overall risk in these areas is not significant
enough to warrant a formalised specific risk management program.
Risk management is carried out by the Board of Directors in their day to day function as the overseers
of the business. Set out below is an overview of the financial instruments held by the Company as at
30 June 2015:
53
Cash and cash equivalentsLoan and receivablesAvailable-for-saleFair value profit or lossFair value other comprehensive incomeAs at 30/6/2015$$$$$Financial assets:Cash & cash equivalents9,805,610 - - - - Trade and other receivables- 215,460 - - - Total current9,805,610 215,460 - - - Total assets9,805,610 215,460 - - - Financial liabilities:Trade and other payables222,640 - - - Total current- 222,640 - - - Total liabilities- 222,640 - - - Net exposure9,805,610 (7,180)- - - Cash and cash equivalentsLoan and receivablesAvailable-for-saleFair value profit or lossFair value other comprehensive incomeAs at 30/6/2014$$$$$Financial assets:Equity instruments- - 1,500 - - Total non-current- - 1,500 - - Cash & cash equivalents1,127,676 - - - - Trade and other receivables- 25,926 - - - Total current1,127,676 25,926 - - - Total assets1,127,676 25,926 1,500 - - Financial liabilities:Trade and other payables- 49,927 - - - Total current- 49,927 - - - Total liabilities- 49,927 - - - Net exposure1,127,676 (24,001)1,500 - -
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
(a) Market Risk
(i) Foreign Exchange Risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency and net investments in foreign
operations.
During the financial year, the Company acquired Corticrine Limited, a company located in the United
Kingdom. The subsidiary’s cash and cash equivalents are denominated in Great British Pounds.
Due to the immaterial amount of cash and cash equivalents on hand as at reporting date, the
Company does not consider there to be any risk and therefore has not undertaken any further
analysis of exposure other that the analysis in the table above.
(ii) Price risk
Equity price risk represents the risk that the value of a financial instrument will fluctuate as a result of
changes in market prices, whether those changes are caused by factors specific to the individual
instrument or its issuer or factors affecting all instruments in the market. Equity price risk is minimised
through ensuring that investment activities are undertaken in accordance with the Board established
mandate limits and investment strategies.
During the year the Company’s main equity price risk exposure related to the Company’s available
for sale financial asset. This asset, an equity investment in an ASX-listed entity, was written off during
the year and there is no risk exposure at reporting date.
(iii) Interest rate risk
The Company’s main interest rate risk exposure relates primarily to the Company’s cash at bank and
funds held on deposit that are both held with variable interest rates. The Company does not rely on
the generation of interest on cash and cash equivalents to provide for working capital and as result
does not consider this to be material to the Company and therefore has not undertaken any further
analysis of exposure other that the analysis in the table below:
(b) Credit risk
Credit risk is the risk of financial loss to the Company if a counter party to a financial instrument fails to
meet its contractual obligations. The Company’s main credit risk exposure relates to the financial
assets of the Company, which comprise cash and cash equivalents and trade and other receivables.
The Company’s exposure to credit risk arises from potential default of the counter party, with the
maximum exposure equal to the carrying amount of these instruments.
The carrying amount of financial assets included in the Statement of Financial Position represents the
Company’s maximum exposure to credit risk in relation to those assets. The Company does not hold
any credit derivatives to offset its credit exposure. The Group trades only with recognised, credit
worthy third parties and as such collateral is not requested nor is it the Company’s policy to securitise
54
Weighted average interest rateBalanceWeighted average interest rateBalance%$%$Cash and cash equivalents1.60%9,805,6102.361,127,676As at 30/6/2015As at 30/6/2014
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
its trade and other receivables. Receivable balances are monitored on an ongoing basis with the
result that the Group does not have a significant exposure to bad debts.
The Company has no significant concentrations of credit risk within the Company except for cash
held with National Australia Bank and various receivables with mostly recognised third parties.
(ii) Cash
The Directors believe that there is negligible credit risk with the Company’s cash and cash
equivalents, as funds are held at call with National Australia Bank, a reputable Australian Banking
institution with a Standard and Poors’ long term credit rating of AA-.
(iii) Trade and other receivables
While the Company has policies in place to ensure that transactions with third parties have an
appropriate credit history, the management of current and potential credit risk exposures is limited as
far as is considered commercially appropriate. Up to the date of this report, the Board has placed no
requirement for collateral on existing debtors.
(c)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial liabilities as and when
they fall due. Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities, the availability of funding through an adequate amount of committed credit facilities and
the ability to close out market positions. The Company manages liquidity risk by continuously
monitoring forecast and actual cash flows. Surplus funds are generally only invested at call or in bank
bills that are highly liquid and with maturities of less than six months.
Financing arrangements
The Company does not have any financing arrangements.
Maturities of financial liabilities
The Company’s only debt relates to trade payables, where payments are generally due within 30
days.
(d)
Fair Value Measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (level 2); and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(level 3).
The following tables present the Company’s assets measured and recognised at fair value at 30 June
2015 and 30 June 2014.
55
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is
based on quoted market prices at the reporting date. The quoted market price used for financial
assets held by the Company is the current bid prices at the end of the financial year. These
instruments are included in Level 1.
(e)
Fair Values
Set out below is a comparison of the carrying amounts and fair values of financial instruments as at 30
June 2015. The carrying value of trade receivables and trade payables are assumed to approximate
their fair value due to their short-term nature.
4.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Key estimates: Impairment
The Company assesses impairment at each reporting date by evaluating conditions specific to the
Company that may lead to impairment of non-financial assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Value-in-use calculations performed in assessing
recoverable amounts incorporate a number of key estimates.
56
At 30/6/2015Level 1Level 2Level 3TotalAssetsAvailable-for-sale financial assets - - - - Equity securities - - - - Total assets - - - - At 30/6/2014Level 1Level 2Level 3TotalAssetsAvailable-for-sale financial assets - - - - Equity securities1,500--1,500Total assets1,500--1,500Carrying amountFair value$$Financial assets:Trade and other receivables215,460 215,460 Total current215,460 215,460 Total215,460 215,460 Financial liabilities:Trade and other payables222,640 222,640 Total current222,640 222,640 Total222,640 222,640
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
The Company follows the guidance of AASB 139 Financial Instruments: Recognition and Measurement
on determining when an available-for-sale financial asset is impaired. This determination requires
significant judgement. In making this judgement, the Company evaluates, among other factors, the
duration and extent to which the fair value of an investment is less than its cost and the financial health
of and near term business outlook for the investee, including factors such as industry and sector
performance, changes in technology and operational and financing cash flows.
Key estimates: Share-based payments
The Group initially measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-
based payment transactions requires determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model
including the expected life of the share option, volatility and dividend yield and making assumptions
about them. The assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in Note 22.
Key judgement: Consolidated entity
On 1 December 2014, Actinogen Limited acquired 100% of the shares in Corticrine Limited, an unlisted
company based in the United Kingdom, in exchange for 125,000,000 ordinary shares in Actinogen at
0.044 cents per share. The acquisition was settled following Actinogen meeting the conditions
precedent of the share sale and purchase agreement entered into between Actinogen and the
shareholders of Corticrine Limited. The acquisition of Corticrine Limited has been accounted for as an
asset acquisition in accordance with Australian Accounting Standards.
5.
SEGMENT INFORMATION
The Company’s sole operations are within the biotech industry within Australia. Given the nature of the
Company, its size and current operations, the Company’s management does not treat any part of
the Company as a separate operating segment. Internal financial information used by the
Company’s decision makers is presented on a “whole of entity” manner without dissemination to any
separately identifiable segments. Accordingly the financial information reported elsewhere in this
financial report is representative of the nature and financial effects of the business activities in which it
engages and the economic environments in which it operates. All non-current assets are held in
Australia and all revenue is derived in Australia.
6.
REVENUE, OTHER INCOME AND EXPENSES
57
Full-year endedFull-year ended30/06/201530/06/2014$ $RevenueRevenue from continuing activities - 20,000 Interest Income 49,927 14,199 49,927 34,199 Other incomeGovernment Grants 103,502 147,005Total other income 103,502 147,005 Total revenue 153,429 181,204
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
7.
INCOME TAX
58
Full-year endedFull-year ended30/06/201530/06/2014$ $ExpensesGeneral employee expenses 57,119 98,707 Depreciation 12,906 13,595 70,025 112,302 Research and development expensesResearch consultants 1,857,890 94,248 Administrative 186,873 3,030 Laboratory expenses 90,846 121,403 Employee expenses 622,737 - 2,758,346 218,681 Full-year endedFull-year ended30/06/201530/06/2014$ $Numerical reconciliation of income tax income to prima facie tax payableOperating loss before income tax (5,431,009)(440,222)Tax benefit at the Australian tax rate of 30% (2015: 30%)(1,629,303)(132,067)Tax effect of amounts that are not deductible / taxable in calculating taxable income:Provisions and accruals - (14,455)Capital raising costs - (23,890)Impairment expenses - 6,757 Fines and penalties 24 1,722Share-based payments 447,000 - Research and development764,338(44,086)Future income tax benefit not brought to account417,941206,019Income tax income / (expense) - - Tax income (expense) relating to items of other comprehensive incomeAvailable for sale financial assets - - - -
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
The tax benefit of tax losses and other temporary differences will only arise in the future where the Company
derives sufficient net taxable income and is able to satisfy the carried forward tax loss recoupment rules. The
Directors believe that the likelihood of the Company achieving sufficient taxable income in the future is not
probable and the tax benefit of these tax losses and other temporary differences have not been
recognised.
8.
CASH AND CASH EQUIVALENTS
59
Full-year endedFull-year ended30/06/201530/06/2014$ $Tax LossesUnused tax losses for which no deferred tax asset has been recognised.Potential tax benefit @ 30%1,554,9491,214,5741,554,9491,214,574Unrecognised temporary differencesTemporary differences for which deferred tax assets have not been recognised.- Provisions and accruals 15,000 22,987- Capital raising costs 865,387 181,095- Impairment 205,435 - 1,085,822204,082Unrecognised deferred tax asset relating to the above temporary differences325,74761,225Full-year endedFull-year ended30/06/201530/06/2014$ $Cash at bank and on hand9,775,1251,112,677Short term deposits 30,485 15,000Total cash and cash equivalents9,805,6101,127,677
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
Reconciliation of net cash flows from operating activities
Non cash financing & investing activities
No non-cash financing and investing activities occurred during the year ended 30 June 2015.
Financing facilities available
As at 30 June 2015, the Company had no financing facilities available. For the purposes of the statement of
cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of
outstanding bank overdrafts.
Interest rate risk exposure
The Group’s exposure to interest rate risk is discussed in Note 3.
Credit risk exposure
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of
cash and cash equivalents mentioned above.
9.
TRADE AND OTHER RECEIVABLES
60
Full-year endedFull-year ended30/06/201530/04/2014$ $Loss for the year (5,431,009) (440,222)Non cash items:Depreciation 12,906 13,595 Amortisation expense 208,520 - Impairment expense - 16,029 Writeoff property, plant and equipment 95,096 4,903 Writeoff available-for-sale financial asset 1,500 - Share-based payment expense 1,490,020 - Change in assets and liabilities(Increase)/decrease in trade receivables (219,535) (750)Increase/(decrease) in trade creditors and other payables 122,713 (31,392) (3,719,789) (437,837)Full-year endedFull-year ended30/06/201530/06/2014$ $Prepayments (b)33,95315,043Goods and services tax receivable (c)181,50710,753Accrued revenue - 130 Total trade and other receivables215,46025,926
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
(a) Trade and other receivables
There are no trade or other receivables.
(b) Prepayments
This amount relates to prepaid insurances.
(c) Goods and services tax receivable
This amount relates to good and services tax (GST) paid during the quarter ended 30 June 2015
that is refundable to the Company.
(d) Risk exposure
Information about the Group's exposure to credit risk is provided in Note 3.
None of the current receivables are impaired or past due but not impaired.
10. AVAILABLE FOR SALE FINANCIAL ASSETS
Fair value of investments in listed corporations is assessed as the last bid price on the Australian Securities
Exchange prior to close of business on balance date. The Company held shares in Eagle Nickel Limited
(ASX: ENL) and at year end decided to fully impair the asset.
11.
PROPERTY, PLANT AND EQUIPMENT
61
Full-year endedFull-year ended30/06/201530/06/2014$ $Listed investments at fair value - 1,500Fair value - 1,500Full-year endedFull-year ended30/06/201530/06/2014$ $At beginning of the year1,5001,500Fair value adjustments - - Impairmentofavailableforsalefinancialassets (1,500) - At end of the year - 1,500Full-year endedFull-year ended30/06/201530/06/2014$ $Property, plant and equipment - at cost10,462 205,175 Accumulated depreciation(3,707)(98,538)Total property, plant and equipment6,755106,637
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
12.
INTANGIBLE ASSETS
62
Plant and EquipmentOffice EquipmentComputer EquipmentGeneral PoolTotalBalance at 1 July 2014102,7592153,663 - 106,637Acquisitions - - 4,3323,7898,121Disposals(93,884)(144)(1,069) - (95,097)Depreciation(8,875)(71)(3,295)(665)(12,906)Balance at 30 June 2015 - - 3,631 3,124 6,755 Movements during the yearPlant and EquipmentOffice EquipmentComputer EquipmentGeneral PoolTotalBalance at 1 July 2013119,692359400 - 120,451Acquisitions - - 4,685 - 4,685Disposals (4,903) - - - (4,903)Depreciation(12,030)(144)(1,422) - (13,596)Balance at 30 June 2014102,759 215 3,663 - 106,637 Full-year endedFull-year ended30/06/201530/06/2014$ $ Intangible assets - at cost5,756,744 16,029 Accumulated amortisation (205,321)(16,029)Total intangible assets 5,551,423 - Movements during the PeriodIntellectual PropertySoftwareBalance at 1 July 2014 - - Acquisitions 5,756,744 - Amortisation expense(205,321) - Balance at 30 June 20155,551,423 - Balance at 1 July 2013 - 16,029 Acquisitions - - Amortisation expense - (16,029)Balance at 30 June 2014 - -
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
Intellectual property totalling $5,551,423 comprises patents and licences initially acquired through Corticrine
Limited, the value of research performed to date and the progression of testing to human trials. On 8
December 2014, Actinogen entered into an Assignment of Licence Agreement with Corticrine Limited for the
assignment of all of Corticrine’s interest in, to and under the Licence Agreement to Actinogen and the
assumption by Actinogen of all of Corticrine's obligations in respect of such assignment (Assignment). Refer to
Note 21: Related Party Transactions.
The intellectual property is supported by seven patent families, the most recent of which will expire in 2031.
The patent useful life has been aligned to the patent term and as a result, those patents are amortised on a
straight-line basis over the period of the patent.
For further information refer to Note 13 below and to the accounting policy in Note 2.
13.
ACQUISITION OF CORTICRINE LIMITED
On 1 December 2014, Actinogen Limited acquired 100% of the shares in Corticrine Limited, an unlisted
company based in the United Kingdom, in exchange for 125,000,000 ordinary shares in Actinogen at 0.044
cents per share. The total acquisition consideration therefore equalled $5,500,000.
Corticrine had licensed worldwide development and commercialisation right from the University of
Edinburgh to Xanamem TM (UE2343), which is in clinical development of Alzheimer’s disease. Actinogen
acquired Corticrine Limited to gain access to the license, so as to focus on the development of novel
treatments for Alzheimer’s disease and other major age related neurodegenerative disorders.
The acquisition was settled on 1 December 2014, following Actinogen meeting the conditions precedent of
the share sale and purchase agreement entered into between Actinogen and the shareholders of
Corticrine Limited. The acquisition of Corticrine Limited has been accounted for as an asset acquisition in
accordance with Australian Accounting Standards.
Assets acquired and liabilities assumed
The carrying amounts based on relative fair values attributed to the assets and liabilities acquired as at the
date of acquisition are detailed below:
% of voting rights acquired – 100%
The consideration paid of $5,500,000 of issued capital, being 125,000,000 ordinary shares issued at $0.044 per
share, and $216,058 of capitalised share-based payments in relation to the facilitator options issued as part
of the acquisition, refer to Note 12.
Due to the nature of the intangible asset acquired a fair value was unable to be estimated reliably at the
date of acquisition due to:
the uncertainty around its ability to produce positive cash flow profits over a period of time;
the lack of longer terms cash flow models; and
the general risks associated with commercialisation and development of new therapies for
Alzheimer disease.
63
Fair Value recognisedNet Assets acquiredon acquisition ($)Cash314Trade and other receivables 7,352 Intangible asset5,756,744Intercompany loan receivable(47,902) Net assets5,716,508
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
As a result, the asset and the corresponding increase in equity has been measured indirectly by reference to
the fair value of the shares granted, measured at the date the asset was acquired being 1 December 2014.
Refer to Note 12 for further information on the Intangible Asset arising on acquisition.
14.
TRADE AND OTHER PAYABLES
Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days.
Information about the Group's exposure to foreign currency risk is provided in Note 3.
15.
CONTRIBUTED EQUITY
(a)
Share Capital
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proposed winding up of the Company
in proportion to the number and amount paid on the share held. Effective 1 July 1998 the Corporations
legislation in place abolished the concepts of authorised capital and par share values. Accordingly, the
Company does not have authorised capital or par value in respect of its issued shares.
64
Full-year endedFull-year ended30/06/201530/06/2014$ $Trade payables192,2768,930Accruals and other payables 15,000 38,072Goods and services tax payable 3,665 - PAYG payable 11,699 2,925 Total trade and other payables222,64049,927Full-year endedFull-year ended30/06/201530/06/2014$ $ Fully paid ordinary shares 606,158,55828,534,8918,672,391Capital raising costs(2,280,000)(1,426,777)Total contributed equity26,254,8917,245,614
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
(b)
Movement of fully paid ordinary shares during the period were as follows:
(c)
Reserve shares
During the year the Company issued 45,000,000 Loan Shares under the Employee Share Plan approved at
the Annual General Meeting of shareholders on 19 November 2014. The details of these loan shares are listed
below:
33,000,000 shares issued at $0.02 each on 1 December 2014 of which 18,000,000 have vested; and
12,000,000 shares issued at $0.04 each on 12 December 2014.
(d)
Share Options
As at the date of this report, there were 63,103,177 unissued ordinary shares under option:
65
DateQuantityUnit Price $Total $Balance carried forward 1 July 2013 89,264,709 5,788,433 Issue of shares - private placement7/10/2013 13,000,000 0.005 65,000 Pre-consolidated balance 102,264,709 5,853,433 Consolidation of shares (1:2 basis)*10/12/2013(51,132,371) - - Post-consolidated balance 51,132,338 5,853,433 Issue of shares - private placement12/12/2013 150,000,000 0.01 1,500,000 Capital raising costs - - (137,819)Exercise of options:10/04/2014 1,500,000 0.02 30,000 Balance at 30 June 2014202,632,3387,245,614Issue of shares - Tranche 12/09/2014 50,000,000 0.02 1,000,000 Issue of shares - Tranche 21/12/2014 50,000,000 0.02 1,000,000 Issue of shares - Tranche 2 (Director Placement)1/12/2014 19,500,000 0.02 390,000 Capital raising costs - - (227,163)Consideration shares - Acquisition of Corticrine Ltd3/12/2014 125,000,000 0.044 5,500,000 Issue of loan shares3/12/2014 33,000,000 0.02 660,000 Issue of loan shares12/12/2014 12,000,000 0.04 480,000 Placement shares6/05/2015 105,289,474 0.095 10,002,500 Share Purchase Plan20/05/2015 8,736,746 0.095 830,000 Capital raising costs - - (626,060)Balance at 30/6/2015606,158,55826,254,891DateQuantityUnit Price $Total $Reserve shares3/12/2014(33,000,000)0.02$ (660,000) Reserve shares12/12/2014(12,000,000)0.04$ (480,000) Balance at 31/05/2015(45,000,000) (1,140,000)
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
9,103,177 listed options on issue post-consolidation. These options are
exercisable at 40 cents each (20 cents pre-consolidation) with an expiry
date of 30 September 2015;
48,500,000 unlisted options with an exercise price of $0.02 and an expiry
date of 30 November 2018; and
5,500,000 unlisted Facilitator options at $0.02 per share exercisable on or
before 30 November 2018.
(e)
Terms and Conditions of Issued Capital
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to
the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a
poll is called, otherwise each shareholder has a vote on a show of hands. Ordinary shares have no par
value.
(f)
Capital risk management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going
concern, so it can provide returns to shareholders and benefits to other stakeholders. The Company
considers capital to consist of cash reserves on hand and available for sale financial assets.
Consistent with the Company’s objective, it manages working capital by issuing new shares, selling assets or
modifying its planned research and development program as required.
During the year the Consolidated Entity successfully completed the following capital raisings.
$1 million (Tranche 1) raised via the issue of 50,000,000 ordinary fully paid shares at an issue price of 2
cents per share to sophisticated and institutional investors in September 2014; and
$1.39 million (Tranche 2) raised via the issue of 69,500,000 ordinary fully paid shares at an issue price
of 2 cents per share to Directors, sophisticated and institutional investors following shareholder
approval at the AGM in November 2014, accompanying the acquisition of Corticrine Limited.
$10 million raised via the issue of 105,289,474 ordinary fully paid shares at an issue price of 9.5 cents
per share to sophisticated and institutional investors in May 2015.
$830,000 raised via the issue of 8,736,746 ordinary fully paid shares at an issue price of 9.5 cents per
share under a Shareholder Share Purchase Plan (SPP) in May 2015.
In connection with the acquisition of Corticrine Limited whereby Actinogen Limited acquired 100%
of the shares in Corticrine Limited, in exchange for 125,000,000 ordinary shares in Actinogen at 0.044
cents per share, facilitator options were also issued as part of the process to a third party entity for
their role in ensuring the consummation of the acquisition. 5,500,000 options, exercisable at $0.02
each, were issued upon successful completion of the acquisition which occurred on 1 December
2014.
Given the stage of the Company’s development there are no formal targets set for return on capital. The
Company is not subject to externally imposed capital requirements. The net equity of the Company is
equivalent to capital. Net capital is obtained through capital raisings on the Australian Securities Exchange.
16.
RESERVES
Reserves are made up of the options reserve and the movement in the fair value of available for sale
investments reserve. The option reserve records items recognised as expenses on valuation of employee and
Director share options.
Details of the movement in reserves is shown below.
66
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
The $1,706,528 of options issued during the year relates to $216,508 Facilitator Options and $390,000 Director
Placement Shares that vested immediately; as well as, $1,100,020 in shared-based payment expense
attributable to the loan shares issued to Key Management Personnel during the year.
17.
EARNINGS PER SHARE
There are 63,103,177 unissued ordinary shares under option excluded from the calculation of diluted earnings
per share that could potentially dilute basic earnings per share in the future because they are anti-dilutive or
the current period presented.
There have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of authorisation of these financial statements.
18.
COMMITMENTS
Other than what is mentioned below, the Company has no future commitments existing as at 30 June 2015
(2014: Nil).
Rental Agreement
During the year the Company entered into a property rental lease for a term of three years commencing 1 July
2015 with no renewal option included in the agreement. There are no restrictions placed upon the Company
by entering into this lease.
67
Full-year endedFull-year ended30/06/201530/06/2014$ $Option reserve6,495,6514,789,123Full-year endedFull-year ended30/06/201530/06/2014$ $Option ReserveBalance at the beginning of the year4,789,1234,788,623Share-based payment expense1,706,528500Balance at end of year6,495,6514,789,123Full-year endedFull-year ended30/06/201530/06/2014$ $Basic EPS from continuing operations attributable to the ordinary share holders of the Company (a)(0.01) (0.29) Weighted number of ordinary shares used as the denominator412,406,878 152,632,548 Net loss used in calculating EPS(5,431,009) (440,222) Diluted EPS from continuing operations attributable to the ordinary share holders of the Company (a)(0.01) (0.29) Weighted number of ordinary shares used as the denominator412,406,878 152,632,548 Net loss used in calculating dilurted EPS(5,431,009) (440,222)
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
The lease includes a clause to enable upward revision of the rental charge on an annual basis according to
prevailing market conditions. Future minimum rentals payable under non-cancellable operating leases as at 30
June 2015 are as follows:
19.
CONTINGENCIES
The Directors are not aware of any contingent liabilities or assets as at 30 June 2015 (2014: Nil).
20.
KEY MANAGEMENT PERSONNEL DISCLOSURES
Key management personnel of Actinogen Limited are listed below:
(a) Key Management Personnel Compensation:
The detailed remuneration disclosures and relevant interested of each Key Management Personnel in fully
paid ordinary shares and options of the Company are provided in the audited remuneration report on
pages 22 to 34.
68
Full-year endedFull-year ended30/06/201530/06/2014$ $Within one year100,813$ - After one year but not more than five years201,625$ - More than five years-$ - 302,438$ - NamePositionAppointedResignedDr Bill KetelbeyManaging Director / Chief Executive Officer18/12/2014-Mr Martin RogersExecutive Chairman1/12/2014-Dr Jason LoveridgeNon-Executive Director1/12/2014-Dr Anton UvarovNon-Executive Director16/12/2013-Dr Brendan de KauweExecutive Chairman23/09/201318/12/2014Mr Daniel ParasilitiNon-Executive Director23/09/20131/12/2014Mr Vincent RufflesVice President27/10/2014-30/06/201530/06/2014$ $Short-term employee benefits 590,484 83,771 Post employment benefits 33,385 - Share-based payment 1,490,020 - 2,113,890 83,771
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
21.
RELATED PARTY TRANSACTIONS
(a) Transactions with Key Management Personnel
Details of transactions with Key Management Personnel are set out in Note 20.
(b) Other related party transactions
Background information:
Assignment of Licence Agreement to Actinogen Limited
Whereby previously, Corticrine Limited (Corticrine) and the University Court of the University of Edinburgh
(University) entered into a Licence Agreement dated 9 June 2014 (Licence Agreement), whereby the
University agreed to grant Corticrine an exclusive right and licence under such patent rights and
confidential know-how for the development and commercialisation of therapeutic agents for the
treatment of dementia, related neurological disorders and metabolic disease.
On 8 December 2014, Actinogen entered into an Assignment of Licence Agreement with Corticrine
Limited for the assignment of all of Corticrine’s interest in, to and under the Licence Agreement to
Actinogen and the assumption by Actinogen of all of Corticrine's obligations in respect of such assignment
(Assignment).
As consideration for the Assignment, Actinogen owes Corticrine £1,161,780, the equivalent of AUD
$2,373,624 as at reporting date.
Trade receivables and payables
Prior to acquisition of Corticrine Limited, Actinogen paid on behalf of Corticrine any outstanding creditor
amounts. The total amount paid was £21,360, the equivalent of AUD $43,640 as at reporting date.
Terms and conditions:
The sales to and purchases from related parties were made on terms equivalent to those that prevail in
arm’s length transactions.
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.
There have been no guarantees provided or received for any related party receivables or payables.
For the year ended 30 June 2015, the Group has not recorded any impairment of receivables relating to
amounts owed by related parties (2014: $Nil). This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which the related party operates.
There were no other related party transactions that occurred during the year.
22.
SHARE – BASED PAYMENTS
The following share based payment existed at 30 June 2015:
69
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
Employee Plan Loan Shares
Under the Employee Share Plan (approved by shareholders on 19 November 2014), awards are made to
executives and other key management personnel who have an impact on the Group’s performance. The Plan
awards are delivered in the form of options over shares which vest over a period of five years subject to
meeting performance measures.
The fair value of share options granted have been valued using a Black Scholes methodology, taking into
account the terms and conditions upon which the share options were granted.
The approximate interest rate over a five year term was used. The assumed dividend payable in the next five
years was deemed to be nil. A volatility of the share price fluctuation was calculated by considering the
historical movement of the share price over period of time as well factoring market conditions of its competitors
to predict the distribution of relative share performance.
The exercise price of the share options is equal to the market price of the underlying shares on the date of
grant. The contractual term of the share options is five years and there are no cash settlement alternatives for
the employees. The Group does not have a past practice of cash settlement for these awards.
The fair value of options granted during the six months ended 30 June 2015 was estimated on the date of grant
using the following assumptions:
Dividend yield (%) nil
Weighted average share price ($) 0.04
Expected volatility (%) 100
Risk-free interest rate (%) 5.0
Expected life (years) 5.0
70
RecipientClass of Loan ShareQuantityIssue PriceValue recognised during the year $Value to be recognised in future years$Loan sharesJason LoveridgeClass A 3,000,000 $ 0.02 77,059 35,789 Jason LoveridgeClass B 3,000,000 $ 0.02 59,311 53,537 Martin RogersClass C7,500,000 0.02$ 282,120 - Martin RogersClass D7,500,000 0.02$ 282,128 - Martin RogersClass E5,000,000 0.02$ 162,202 25,883 Martin RogersClass F5,000,000 0.02$ 46,208 141,877 Vincent RufflesClass G2,000,000 0.04$ 16,862 58,372 Bill KetelbeyClass H6,000,000 0.04$ 40,926 177,960 Bill KetelbeyClass I3,000,000 0.04$ 109,440 - Bill KetelbeyClass J3,000,000 0.04$ 23,764 85,679 45,000,000 1,100,020 579,097 Directors Placement SharesMartin Rogers10,000,000 0.02$ 200,000 - Brendan de Kauwe*2,500,000 0.02$ 50,000 - Jason Loveridge5,000,000 0.02$ 100,000 - Anton Uvarov2,000,000 0.02$ 40,000 - 19,500,000 390,000 - Total1,490,020 579,097 * Brendan de Kauwe resigned on 18/12/2014
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
Director Placement Shares
During the half-year, the Company issued 19,500,000 Director Placement Shares. This was subject to shareholder
approval which occurred on 19 November 2014, and therefore were fair valued based on the closing price on
19 November 2014 which was 4 cents. The difference between the issue price and the share price at
measurement date of 2 cents is treated as a Share based payment (as it is a discount on fair value).
23.
PARENT ENTITY NOTE
24.
INFORMATION ABOUT SUBSIDIARIES
The consolidated financial statements of the Group include Corticrine Limited, an unlisted company based
in the United Kingdom. Corticrine licensed worldwide development and commercialisation right from the
University of Edinburgh to Xanamem TM (UE2343), which is in clinical development of Alzheimer’s disease.
Actinogen acquired Corticrine Limited to gain access to the license, so as to focus on the development of
novel treatments for Alzheimer’s disease and other major age related neurodegenerative disorders.
Actinogen Limited is the ultimate holding company of the Group, which is based and listed in Australia, and
holds significant influence over the Group owning 100% of the shares in Corticrine since 1 December 2014.
71
Full-year endedFull-year ended30/06/201530/06/2014Note$ $Current assets10,069,4941,153,602Non-current assets7,891,566108,137Total assets17,961,0601,261,739Current liabilities2,596,26449,927Total liabilities2,596,26449,927Net Assets15,364,7961,211,812Contributed equity26,254,8917,245,614Reserve shares(1,140,000) - Reserves6,495,651 4,789,123 Accumulated losses(16,245,746)(10,822,925)Total equity15,364,7961,211,812Profit / (loss) for the year(5,422,821) (440,222) Other comprehensive income for the year- - Total comprehensive income / (loss) for the year(5,422,821) (440,222)
ACTINOGEN LIMITED
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3 0 J U N E 2 0 1 5
_________________________________________________________________
25.
REMUNERATION OF AUDITOR
26.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
No matters or circumstances have arisen since the end of the reporting period which significantly affected
or may significantly affect the operations of the entity, the results of those operations, or the state of the
entity in subsequent financial years.
72
Full-year endedFull-year ended30/06/201530/06/2014Amounts paid or payable to Ernst & Young for:$ $- Anauditorreviewofthefinancialstatements of the entity 21,630 21,695 21,630 21,695
ACTINOGEN LIMITED
D I R E C T O R S ’ D E C L A R A T I O N
3 0 J U N E 2 0 1 4
_________________________________________________________________
In the Directors opinion:
1.
The financial statements and notes set out on pages 37 to 72, are in accordance with the Corporations
Act 2001 including:
(a) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(b) giving a true and fair view of the Company’s financial position as at 30 June 2015 and of its
performance for the year ended on that date;
2.
3.
4.
5.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The remuneration disclosure included in the audited Remuneration Report in the Director’s Report complies
with Section 300A of the Corporations Act 2001.
The directors have been given the declaration by the Managing Director as required by section 295A of
the Corporations Act 2001.
The Company has included in the notes to the financial statements an explicit and unreserved statement
of compliance with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors.
Dr Bill Ketelbey
Managing Director
Sydney, New South Wales
Date: Friday, 28 August 2015
73
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Actinogen Limited
Report on the financial report
We have audited the accompanying financial report of Actinogen Limited, which comprises the statement
of financial position as at 30 June 2015, the statement of comprehensive income, statement of changes
in equity and statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors' declaration.
Directors' responsibility 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 controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 2(b), the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation of the
financial report that gives a true and fair view in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
74
RK:MW:Actinogen:060
2
Opinion
In our opinion:
a.
the financial report of Actinogen Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the company's financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2(b).
Report on the remuneration report
We have audited the Remuneration Report included in pages 22 to 34 of the directors' report for the year
ended 30 June 2015. 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.
Opinion
In our opinion, the Remuneration Report of Actinogen Limited for the year ended 30 June 2015 complies
with section 300A of the Corporations Act 2001.
Ernst & Young
T G Dachs
Partner
Perth
28 August 2015
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
75
RK:MW:Actinogen:060
ACTINOGEN LIMITED
S H A R E H O L D E R I N F O R M A T I O N
___________________________________________________________
Substantial shareholders
The substantial shareholders as at 30 September 2015 were:
Holders
EDINBURGH TECHNOLOGY FUND
LIMITED
MR MARTIN ROGERS
DENLIN NOMINEES PTY LTD/OAKTONE
NOMINEES PTY LTD
TISIA NOMINEES PTY LTD
JK NOMIINEES PTY LTD
Percentage
of Issued
Capital
7.94
6.01
5.58
5.55
5.44
Shares
48,147,864
36,250,000
33,798,071
33,617,184
33,000,000
Distribution of ordinary shareholders as at 30 September 2015
Range of Holding
1-1,000
1,001-5,000
5,001-10,000
10,001 - 100,000
100,001 – over
Shareholders with less than a
marketable parcel.
Voting Rights
Shares
8,109
1,086,237
1,687,523
26,745,744
576,630,945
606,158,558
Holders
22
339
203
572
369
1,505
456
Each fully paid ordinary share carries voting rights of one vote per share.
Twenty Largest holders of quoted ordinary shares as at 30 September 2015
EDINBURGH TECHNOLOGY FUND LIMITED
MR MARTIN ROGERS
WEBINVEST PTY LTD
DENLIN NOMINEES PTY LTD
TISIA NOMINEES PTY LTD
MR JASON PETERSON + MRS LIASA PETERSON
JK NOMINEES PTY LTD
WARAMBI SARL
TISIA NOMINEES PTY LTD
OAKTONE NOMINEES PTY LTD
JK NOMINEES PTY LTD
DR WILLIAM JOHN KETELBEY
CABLETIME PTY LTD
BANNABY INVESTMENTS PTY LTD
1215 CAPITAL PTY LTD
ZP PTY LTD
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
BANNABY INVESTMENTS PTY LTD
ARDROY SECURITIES PTY LTD
CONCEPT BIOTECH PTY LTD
TOTAL
76
Number of
Shares
48,147,864
25,000,000
23,423,197
19,080,887
18,900,000
18,465,788
18,282,816
14,875,078
14,717,184
14,717,184
14,717,184
12,157,894
12,034,703
11,555,263
11,445,423
9,000,000
7,592,728
7,500,000
7,500,000
7,362,435
316,4765,628
Percentage
of Issued
Capital
7.94
4.12
3.86
3.15
3.12
3.05
3.02
2.45
2.43
2.43
2.43
2.01
1.99
1.91
1.89
1.48
1.25
1.24
1.24
1.21
52.21
ACTINOGEN LIMITED
S H A R E H O L D E R I N F O R M A T I O N
___________________________________________________________
Unquoted Securities as at 30 September 2015
There were 54,000,000 unquoted options exercisable at $0.02 each and expiring on 30 November
2018 held by seven holders, on issue.
Details of the holders of unquoted options holding more than 20%:
AH SUPER PTY LTD
TOTAL
Restricted Securities
Number of
Options
18,500,000
18,500,000
Percentage
34.26
34.26
The Company has 125,000,000 fully paid ordinary shares subject to voluntary escrow until
1 December 2015
On-Market Buy-Back
There is no current on-market buy back in place.
77