ADALTA LTD
ABN 92 120 332 925
(formerly AdAlta Pty Ltd)
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2016
ADALTA LTD
ABN 92 120 332 925
CORPORATE DIRECTORY
DIRECTORS
Paul MacLeman PhD
Samantha Cobb
James Williams PhD
Liddy McCall
John Chiplin PhD
COMPANY SECRETARY
Ian Hobson
REGISTERED OFFICE
Unit 15
2 Park Drive
Bundoora VIC 3083
Telephone: +61 3 9479 5159
Email: enquiries@adalta.com.au
Website: adalta.com.au
STOCK EXCHANGE
Australian Securities Exchange Limited
2 The Esplanade
Perth WA 6000
ASX CODE 1AD
SHARE REGISTRY
Automic Registry Services
Suite 310, Level 3
50 Holt Street
Surrey Hills NSW 2010
Telephone: 1300 288 664
Telephone: +61 2 9698 5414
Website: automic.com.au
Butler Settineri (Audit) Pty Ltd
Unit 16, First Floor
100 Railway Road
Subiaco WA 6008
AUDITOR
BANKERS Westpac Banking Corporation
SOLICITORS
Hive Legal Pty Ltd
Level 4, 50 Market Street
Melbourne VIC 3000
ADALTA LTD
ABN 92 120 332 925
CONTENTS
Directors' Report
Auditor's Independence Declaration
Corporate Governance Statement
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
Shareholder Information
Page No.
2
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16
17
18
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40
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43
ADALTA LTD
ABN 92 120 332 925
DIRECTORS(cid:182) REPORT
The Directors of AdAlta Limited ((cid:179)AdAlta(cid:180) or (cid:179)the Company(cid:180)) submit herewith the annual report of the
Company for the financial year ended 30 June 2016. In order to comply with the provisions of the
Corporations Act 2001, the Directors report as follows:
Information about the Directors
The names and particulars of the Directors of the Company during or since the end of the financial year
are:
Name
Paul MacLeman
MBA, BVSc, Grad Dip
Tech, Grad Cert Eng,
GAICD, MATTA
Samantha Cobb
BSc, MApL, GAICD
Dr James Williams
BSc (Hons), MBA,
PhD, GAICD
Eli(cid:93)abeth (Liddy)
McCall,
LLB., B.Juris,
B.Com(Hons),
GDipApFin(SIA),
GAICD
Particulars
Chairman and non-executive Director, joined the Board 16 April 2015. Paul
has wide ranging, hands on experience across the biotechnology sector,
encompassing technical, commercial and financial areas. He has a career
the pharmaceutical/biotechnology and
spanning veterinary practice,
investment banking sectors. Paul has experience in capital raising, business
development, research management, technology commercialisation, staff
development, and sales and marketing. He has also founded life sciences
start-ups in the biologics area and worked in investment banking focusing on
the analysis and financing of technology companies. Paul is currently CEO of
ASX-listed pharmaceutical manufacturing Company
IDT Australia Ltd
(ASX:IDT).
fifteen years experience
Managing Director / CEO, appointed 29 June 2007. Sam is the founding
CEO of AdAlta and has over
in business
development and commercialisation of early stage scientific technologies.
Prior to AdAlta, Sam was the Business Development Director at the Co-
operative Research Centre for Diagnostics. Sam has also worked for the
biotech start-up companies Sensologix Inc and Nephrogenix Pty Ltd and at
the University of (cid:52)ueensland’s technology commercialisation companies,
Uniquest Pty Ltd and IMBcom Pty Ltd. Sam has a Bachelor of Science, a
Masters of Intellectual Property Law and has completed the Australian
Institute of Company Directors course.
Non-Executive Director, joined the Board 16 December 2010. Dr Williams is
the Executive Chairman of Dimerix Limited as well as co-founder and
investment Director of Yuuwa Capital LP, a venture capital firm based in
Western Australia. Prior to establishing Yuuwa Capital, he was managing
Director of two medical device companies, ASX-listed Resonance Health
Limited and Argus Biomedical Pty Ltd, both of which secured regulatory
approvals under his leadership. Dr Williams conceived, co-founded and is a
former CTO and Director of iCeutica Inc., a clinical stage nano drug
reformulation company. iCeutica was acquired by Philadelphia-based Iroko
Pharmaceuticals in 2011. Dr Williams is Executive Chairman of Dimerix
Limited (ASX:DXB) and a Director of Yuuwa investee companies PolyActiva
Pty Ltd and Nexgen Plants Pty Ltd. He is also a Director of Linear Clinical
Research Ltd, a specialist early phase trial unit and a member of the (cid:179)Panel
of Experts(cid:180) for the University of Western Australia’s Pathfinder Fund.
Non-Executive Director, joined the Board 16 December 2010. Liddy is a co-
founder and Investment Director of Yuuwa Capital LP. Liddy is also a
Director of various unlisted Yuuwa investee companies. Her experience
includes a range of roles in drug development and medical device
companies, including business development and finance. She was co-
founder and Director of iCeutica Inc. Liddy was also a co-founder of Dimerix
Limited (now an ASX-listed clinical stage drug discovery and development
company) and held various executive roles during its establishment and
growth. Liddy was co-founder and Director of Tessitura Pty Ltd, a consulting
company providing services to the biotechnology industry. Previously, Liddy
was an Associate Director in the Corporate Advisory Company of Macquarie
Bank and prior to that worked as a lawyer with a leading Australian law firm.
Page 2
John Chiplin
BPharm, PhD,
MRPharmS
ADALTA LTD
ABN 92 120 332 925
Non-Executive Director, appointed 16 May 2014. John has significant
international experience in the life science and technology industries, from
both an operational and investment perspective. Recent transactions in which
John has been instrumental include Benitec BioPharma (US IPO), Medistem
Inc. (acquired by Intrexon Corporation for US$26 million), former CEO of
ASX-listed Arana Therapeutics (acquired by Cephalon Inc. for US$200
million), and Domantis (acquired by GS(cid:46) for (cid:133)230 million). Immediately prior
to running Arana, John was head of the ITI Life Sciences investment fund in
the U(cid:46), negotiating significant funding with Government Ministers. His own
investment company, Newstar Ventures Ltd., has funded more than a dozen
early stage companies in the past ten years. John currently serves on the
boards of Batu Biologics, Benitec BioPharma (NASDA(cid:52): BNTC), The Coma
Research Institute, Cynata Therapeutics Limited (ASX: CYN), Prophecy Inc,
Scancell Holdings plc (LSE: SCLP), and ScienceMedia Inc.
The above named Directors held office during the whole of the financial year and since the end of the
financial year.
Directors(cid:182) shareholdings
The following table sets out each Director’s relevant interest in shares, debentures and rights or options
in shares or debentures of the Company as at the date of this report:
Directors
Paul MacLeman
Samantha Cobb
James Williams1
Liddy McCall1
John Chiplin
Fully paid ordinary shares
Number
73,273
653,092
54,119,848
54,159,848
561,756
Options under ESOP
Number
366,363
790,751
-
-
249,127
1James Williams and Elizabeth McCall’s interests are partly held (54,059,848 ordinary shares) indirectly through Yuuwa Capital LP,
a venture capital firm managed by its General Partner which is associated with James Williams and Elizabeth McCall
Company Secretary
Ian Hobson B.Bus, FCA, ACIS, MAICD
Mr Hobson is a chartered accountant and chartered company secretary with 30 years’ experience. Ian
acts as non-executive director and company secretary for ASX listed companies and is experienced in
the areas of biotech, technology, finance, mining exploration, marine and mining services. Ian is a
governance professional and facilitates finance and governance courses for AICD.
Dividends
No dividends have been paid or declared since the start of the financial year and the Directors have not
recommended the payment of a dividend in respect of the financial year.
Shares under option or issued on exercise of options
(a) Details of unissued shares or interests under option as at the date of this report are:
Number of shares
under option
252,057
145,976
20,569
381,018
291,953
818,378
234,472
Class of shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Exercise price of
option
$0.17*
$0.17*
$0.17*
$0.17*
$0.17*
$0.17*
$0.17
Expiry date
of options
27 September 2016
1 July 2018
21 September 2018
1 November 2018
1 July 2019
1 November 2019
1 November 2020
*50% of 1,909,951 Options have an exercise price of $0.0002 if exercised within 3 months of vesting, and with the exercise price of
the remaining 50% of those options being $0.09 if exercised within 12 months of vesting. Otherwise the exercise price is $0.17.
Page 3
ADALTA LTD
ABN 92 120 332 925
The holders of these options do not have the right to participate in any share issue of the Company.
(b) Details of ordinary shares issued by the Company during the year on the exercise of options are:
Date option granted
27 June 2015
19 August 2015
11 November 2015
Issue price of shares
$0.001
$0.001
$0.001
Number of shares issued
24,903
3,597
25,000
Indemnification of officers and auditors
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of
the Company (as named above), the company secretary and all executive officers of the Company and of
any related body corporate against a liability incurred as such a Director, secretary or executive officer to
the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the
nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the end of the financial year, except to the extent
permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any
related body corporate against a liability incurred as such an officer or auditor.
Directors(cid:182) meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of
Directors) held during the financial year and the number of meetings attended by each Director (while
they were a Director or committee member). During the financial year, 11 Board meetings were held.
Directors
Paul MacLeman
Samantha Cobb
James Williams
Liddy McCall
John Chiplin
Held
11
11
11
11
11
Board of Directors
Attended
11
11
8
9
11
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the
auditor are outlined in note 18 to the financial statements.
In the event non-audit services are provided, the Board has established procedures to ensure that the
provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. These include:
• all non-audit services are reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor; and
• non-audit services do not undermine the general principles relating to auditor independence as
set out in APES 110 (cid:181)Code of Ethics for Professional Accountants’ issued by the Accounting
Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work,
acting in a management or decision-making capacity for the Company, acting as advocate for the
Company or jointly sharing economic risks and rewards.
Page 4
ADALTA LTD
ABN 92 120 332 925
Auditor(cid:182)s independence declaration
The auditor’s independence declaration is included on page 14 of the financial report.
Operating and financial review
Principal activities
The Company’s principal activity during the course of the financial year was to develop its novel i-
body platform with a focus on its lead candidate AD-114, a first-in class treatment for idiopathic
pulmonary fibrosis (IPF) and other fibrotic diseases.
Operating results
The loss of the Company for the year ended 30 June 2016, after accounting for income tax benefit,
amounted to ($1,163,056) (30 June 2015: ($1,307,868)). The year ended 30 June 2016 operating
results are attributed to the following:
• Research and Development rebate: $738,046 (30 June 2015: $887,553);
• Cost of services $1,413,975 (30 June 2015: $1,712,080); and
• Employment benefit expense ($224,620) (30 June 2015: ($203,007)).
Review of operations
Summary
At the General Meeting held on 18 January 2016, the shareholders approved the Company change its
status from propriety limited to a limited company and change its name to AdAlta Limited. The issued
capital of the Company split on the basis of that every 1 share or option be split into 5.8168 shares or
options at the General meeting held on 9 May 2016. Considerable work was undertaken to prepare a
prospectus to raise a minimum of $8,000,000 to a maximum of $10,000,000 and to make an
application to the ASX for admission to the official list.
During the year, the Company continued to develop its technology platform that produces unique
compounds known as i-bodies, that mimic the shape of shark antibodies and engineers their key
stability features into human proteins, for therapeutic intervention in disease.
Strategy
AdAlta Limited intends to develop its novel i-body platform with a focus on its lead candidate AD-114,
a first-in class treatment for idiopathic pulmonary fibrosis (IPF) and other fibrotic diseases. AdAlta’s
lead drug candidate, AD-114, is undertaking manufacturing scale up to commence clinical trials for
the treatment of IPF and other human fibrotic diseases, for which current therapies are sub-optimal
and there is a high unmet medical need.
The Company’s proprietary technology platform generates a new class of protein therapeutics known
as i-bodies, which are expected to be used as drugs to treat a range of diseases.
The Company also plans to continue further drug discovery and development directed towards other
drug targets and diseases using its i-body technology platform.
The increase in cash and cash equivalents, net assets, contributed equity and accumulated losses
was largely the result of receipt of funding by way of convertible notes and the Research and
Development tax incentive.
The Directors believe the Company is in a strong and stable financial position to expand and grow its
current operations.
Significant changes in state of affairs
During the year, the Company changed its status from propriety limited company to a limited company
and undertook a share split on the basis that 1 share or option split into 5.8618 shares or options.
Events after the reporting period
On 8 July 2016, the Company lodged a prospectus with ASIC for the offer of 32,000,000 and up to
40,000,000 ordinary fully paid shares at a price of $0.25 per share to raise a minimum of $8,000,000 and
Page 5
ADALTA LTD
ABN 92 120 332 925
a maximum of $10,000,000. On 12 August 2016, the Prospectus closed over-subscribed. The Company
was admitted to the official list of the ASX on 22 August 2016.
On 12 August 2016, the Company’s convertible notes and Series A Preference shares converted to
ordinary shares.
On 22 August 2016, the Company received a Research and Development tax incentive refund of
$738,045 for the 2015/2016 financial year.
Otherwise, there has not been any matter or circumstance that has arisen subsequent to the end of the
financial year that has significantly affected, or may significantly affect, the operations of the Company,
the results of those operations, or the state of affairs of the Company in future financial years.
Future developments, prospects and business strategies
AdAlta’s strategy is to develop its lead i-body drug candidate, AD-114, to demonstrate safety and
advance the lead to the clinic for treatment of fibrosis related diseases. Demonstration of the lead i-body
drug candidate in the clinic is also expected to increase interest in wider applications of the i-body
platform and its unique features of safety and efficacy.
AdAlta currently intends to license the lead candidate to a pharmaceutical or biotechnology company to
generate up-front, milestone payments and licensing revenues.
The i-body platform provides an opportunity for the expansion of the pipeline of i-body drug candidates in
multiple therapeutic areas.
The Company plans to maximise the benefits of its i-body platform and i-body libraries through
partnerships, while retaining the ability to resource and focus on its own in-house discovery and
development activities. Development of additional i-body drug candidates provides potential for additional
revenue, including up-front, milestone payments and licensing payments.
Environmental issues
The Company’s operations are not subject to significant environmental regulation under the Australian
Commonwealth or State Law.
Remuneration report (audited)
This remuneration report, which forms part of the Directors’ report, sets out information about the
remuneration of AdAlta Limited’s key management personnel for the financial year ended 30 June 2016.
The term (cid:181)key management personnel’ refers to those persons having authority and responsibility for
planning, directing and controlling the activities of the Company, directly or indirectly, including any
Director (whether executive or otherwise) of the Company. The prescribed details for each person
covered by this report are detailed below under the following headings:
•
•
•
•
•
key management personnel
remuneration policy
relationship between the remuneration policy and Company performance
remuneration of key management personnel
key terms of employment contracts.
Key management personnel
The Directors and other key management personnel of the Company during the financial year were:
Non-executive Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Position
Chairman & Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Executive Directors
Samantha Cobb
Managing Director & CEO
Page 6
ADALTA LTD
ABN 92 120 332 925
The named persons held their current position for the whole of the financial year and since the end of
the financial year.
Remuneration policy
The Board of Directors of the Company is currently responsible for determining and reviewing
compensation arrangements for key management personnel. The Company has a Remuneration
Committee, which consists of John Chiplin (Chair of Remuneration Committee), Paul MacLeman and
Liddy McCall. The remuneration policy, which is set out below, is designed to promote superior
performance and long-term commitment to the Company.
Non-Executive Director remuneration
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.
Shareholders approval must be obtained in relation to the overall limit set for the non-executive
Directors’ fees. The maximum aggregate remuneration approved by shareholders for non-executive
Directors is $350,000 per annum. The Directors set the individual non-executive Director fees within
the limit approved by shareholders. Non-executive Directors are not provided with retirement
benefits.
Executive Director remuneration
Executive Directors receive a base remuneration which is at market rates, and may be entitled to
performance based remuneration, which is determined on an annual basis. Overall remuneration
policies are subject to the discretion of the Board and can be changed to reflect competitive and
business conditions where it is in the interests of the Company and shareholders to do so. Executive
remuneration and other terms of employment are reviewed annually by the Board having regard to
the performance, relevant comparative information and expert advice.
The Board’s remuneration policy reflects its obligation to align executive remuneration with
shareholders’ interests and to retain appropriately qualified executive talent for the benefit of the
Company. The main principles are:
(a) remuneration reflects the competitive market in which the Company operates;
(b) individual remuneration should be linked to performance criteria if appropriate; and
(c) executives should be rewarded for both financial and non-financial performance.
The total remuneration of executives consists of the following:
(a) salary (cid:177) executives receive a fixed sum payable monthly in cash plus superannuation at 9.5% of
salary;
(b) cash at risk component (cid:177) executives may participate in share and option schemes generally
made in accordance with thresholds set in plans approved by shareholders if deemed
appropriate. However, the Board considers it appropriate to issue shares and options to
executives outside of approved schemes in exceptional circumstances;
(c) other benefits (cid:177) executives may, if deemed appropriate by the Board, be provided with a fully
expensed mobile phone and other forms of remuneration; and
(d) performance bonus.
The Board has not formally engaged the services of a remuneration consultant to provide
recommendations when setting the remuneration received by Directors or other key management
personnel during the financial year.
Relationship between the remuneration policy and Company performance
The Board considers that at this time, evaluation of the Company’s financial performance using
generally accepted measures such as profitability, total shareholder return or per Company
comparison are not relevant as the Company is at an early stages of development trial which is
continuing as outlined in the Directors’ report.
Page 7
ADALTA LTD
ABN 92 120 332 925
Remuneration of key management personnel
Short-term employee
benefits
Salary &
fees
$
Other
$
Post-
employment
benefits
Superannuation
$
Share-
based
payment
Options
$
30,000
-
-
20,000
-
-
-
-
-
-
-
-
151,376
201,376
45,413
45,413
18,695
18,695
-
-
-
-
-
-
Short-term employee
benefits
Salary &
fees
$
Other
$
Post-
employment
benefits
Superannuation
$
Share-
based
payment
Options
$
4,950
-
-
20,000
1,833
26,250
-
-
-
-
-
-
-
-
-
-
-
-
151,376
204,409
27,123
27,123
16,957
16,957
-
-
-
-
-
-
-
-
Total
$
30,000
-
-
20,000
215,484
265,484
Total
$
4,950
-
-
20,000
1,833
26,250
195,456
248,489
2016
Non-executive
Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Executive
Directors
Samantha Cobb
Total
2015
Non-executive
Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Merilyn Sleigh
(resigned 31 July
2014
John Ballard
(resigned 13 May
2015)
Executive
Directors
Samantha Cobb
Total
No key management personnel appointed during the year received a payment as part of his or her
consideration for agreeing to hold the position.
Share options issued to key management personnel as remuneration during the year are set out in the
following table (2015: 121,599*). 40,200* share options were exercised by key management personnel
during the year (2015: nil).
Page 8
2016
Samantha Cobb
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Total
Balance at
1 July
No.
150,099
-
-
-
-
150,099
ADALTA LTD
ABN 92 120 332 925
Granted as
compensation
No.
Exercised
-
75,000
-
-
55,000
130,000
(15,200)
(12,500)
-
-
(12,500)
(40,200)
Net other
change
No.
655,852
303,863
-
-
206,627
1,166,342
Balance at
30 June
No.
790,751
366,363
-
-
249,127
1,406,241
*Pre-split amounts. **On 9 May 2016 the options were split on the basis that every 1 option be split into 5.8618 options.
The terms and conditions of each grant of options affecting remuneration in the current or future
reporting period are:
Grant date
11 Nov 2015
11 Nov 2015
11 Nov 2015
Vesting and
exercise date
11 Nov 2015
11 Nov 2016
Date of
transaction
Expiry
date
1 Nov 2018
1 Nov 2019
I Nov 2018
Exercise
price (cid:13)
$1.00
$1.00
$1.00
Value at
grant
date
$0.00
$0.00
$0.00
Performance
achieved
N/A
N/A
Yes
(cid:8) vested
100%
0%
0%
*The exercise price of $1.00 is reduced to $0.0002 if 50% of the options are exercised within 3 months of vesting with the exercise
price of the remaining 50% of those options being $0.09 if exercised within 12 months of vesting otherwise the exercise price is
$0.17 following the split of issued capital.
The value of the options at their date of grant has been taken as zero because, at the time of grant, the
company was an unlisted entity and the equity structure operated such that any returns were paid to
convertible note holders with any residual being paid to holders of Series A Preference shares with any
final amount being available to ordinary shareholders. Based on the Company’s net assets at the date
of grant there was no value attributable to ordinary shares.
Options have been granted to the Managing Director on a case by case basis since 2011 based on the
achievement of milestones which varied for the relevant year depending on the stage of the Company’s
research projects and the achievement of funding. The milestones selected were considered relevant to
enable the Company to progress its research projects and the assessment as to their achievement was
performed by the Board.
Options granted to the non-executive Directors related to their efforts in securing additional funding for
the Company. A performance condition is attached to a portion of the options issued being that the
options can only be exercised in the event of a transaction or exit of the Company.
All other options are subject to time based vesting conditions with no specific performance condition
attached.
Key terms of employment contracts
Samantha Cobb is employed in the position of Managing Director/CEO of the Company on the following
material terms:
1. Effective 12 August 2016 (completion of the capital raising), a salary of $225,000 plus
superannuation.
2. A short term cash incentive of up to 30% of the annual salary subject to achieving key
performance indicators as set by the Board from time to time.
3. Either party is entitled to terminate the employment contract by giving 3 months’ notice.
4. After termination of employment, Ms Cobb is subject to a non-compete condition within Australia
for a period of 3 months, non-solicitation of employees and customers for a period of 6 months.
Page 9
ADALTA LTD
ABN 92 120 332 925
Set out below are the remuneration arrangements with Non-Executive Directors Effective 12 August
2016 (completion of the capital raising):
Name
Position
Paul MacLeman
James Williams
Elizabeth McCall
John Chiplin
Non-Executive
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Annual Salary
(inclusive of
superannuation)
$65,000
$45,000
$45,000
$45,000
The Company has entered into consulting agreements with both Paul MacLeman (Chairman) and John
Chiplin as independent Directors of the Board. Under the terms of these consulting agreement, the
agreements can be terminated by either party by giving one months’ notice. Further, continuation of
appointment is subject to re-election at a forthcoming AGM. The Directors fees for Paul MacLeman are
paid to Dalroar Pty Ltd, ATF MacLeman Investment Trust, which is his personal company.
Both Elizabeth McCall and James Williams are currently appointed as nominated Directors of Yuuwa
Capital LP. Their annual fixed fees of $45,000 including superannuation will be paid to Yuuwa Capital
LP.
No additional fees are payable to Directors for their involvement in Board committees.
On appointment to the Board, all non-executive Directors are required to sign a letter of appointment
with the Company. The letter of appointment summarises the Board policies and terms, including
compensation relevant to the office or Director.
On 29 January 2016, Mr Ian Hobson was appointed as company secretary. His services are provided
through Churchill Services Pty Ltd ((cid:179)Churchill Services(cid:180)). Churchill Services is paid a fee of $200/Hr for
the provision of company secretarial services.
Key management personnel equity holdings
Fully paid ordinary shares of AdAlta Limited
2016
Balance
at 1 July
Granted as
compensation
Samantha
Cobb
Paul
MacLeman
James Williams
Liddy McCall
John Chiplin
No.
96,215
No.
-
-
-
-
-
-
-
-
-
Received
on
exercise of
options
No.
15,200
No.
541,677
12,500
60,773
-
-
12,500
-
-
60,773
Net other
change(cid:13)
Balance on
Resignation
Balance at
30 June
No.
653,092
73,273
-
-
73,723
-
-
-
-
-
*The net other change relates to the share and option split at 5.8618 as approved by shareholders at a meeting on 9 May 2016.
Page 10
ADALTA LTD
ABN 92 120 332 925
2015
Balance at
1 July
No.
96,215
-
-
-
-
-
105,994
Samantha
Cobb
Paul
MacLeman
James
Williams
Liddy
McCall
John Chiplin
Merilyn
Sleigh
(resigned 31
July 2014)
John Ballard
(resigned 13
May 2015)
Granted as
compensati
on
No.
Received
on exercise
of options
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net other
change
Balance on
Resignation
Balance at
30 June
No.
-
-
-
-
-
-
-
No.
96,215
-
-
-
-
-
-
-
-
-
-
-
(105,994)
-
Share options of AdAlta Limited
2016
Balance
at 1 July
Granted
as
compen
-sation
Exercised
Net other
change(cid:13)
Balance
at 30
June
Balance
vested
at 30
June
Vested
and
exercise
-able
Options
vested
during
year
Samantha
Cobb
Paul
MacLeman
James
Williams
Liddy
McCall
John Chiplin
No.
150,099
No.
-
No.
(15,200)
No.
655,852
No.
790,751
No.
256,160
No.
256,160
No.
178,798
-
-
-
-
75,000
(12,500)
303,863
366,363
73,273
73,273
73,273
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,000
(12,500)
206,627
249,127
73,273
73,273
73,273
2015
Balance
at 1 July
Granted
as
compen
-sation
Expired
Net other
change(cid:13)
No.
40,500
No.
121,599
No.
(12,000)
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Samantha
Cobb
Paul
MacLeman
James
Williams
Liddy
McCall
John Chiplin
Merilyn
Sleigh
(resigned 31
July 2014)
John Ballard
(resigned 13
May 2015)
Balance
at 30
June
Balance
vested
at 30
June
Vested
and
exercise
-able
Options
vested
during
year
No.
150,099
No.
28,500
No.
28,500
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*The net other change relates to the share and option split at 5.8618 as approved by shareholders at a meeting on 9 May 2016
Page 11
ADALTA LTD
ABN 92 120 332 925
Series A Preference shares of AdAlta Limited
2016
Samantha
Cobb
Paul
MacLeman
James
Williams
Liddy McCall
John Chiplin
Balance at
1 July
No.
Granted as
compensation
No.
Net other
change
No.
Balance on
Resignation
Balance at
30 June
No.
-
-
-
2,394,454*
2,394,454*
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,394,454*
2,394,454*
-
*Held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital
Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding)
2015
Balance at
1 July
Granted as
compensation
Net other
change
Balance on
Resignation
No.
No.
No.
Samantha
Cobb
Paul
MacLeman
James
Williams
Liddy McCall
John Chiplin
Merilyn Sleigh
(resigned 31
July 2014)
John Ballard
(resigned 13
May 2015)
-
-
2,394,454*
2,394,454*
-
25,000
41,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
30 June
No.
-
-
2,394,454*
2,394,454*
-
-
-
-
-
-
-
(25,000)
(41,250)
-
*Held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital
Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding)
Convertible notes of AdAlta Limited
2016
Samantha
Cobb
Paul
MacLeman
James
Williams
Liddy McCall
John Chiplin
Balance at
1 July
No.
Subscriptions
/conversions
No.
Net other
change
No.
Balance on
Resignation
Balance at
30 June
No.
-
-
-
-
1,000,000*
1,500,000*
1,000,000*
25,000
1,500,000*
25,000
-
-
-
-
-
-
-
-
-
-
-
-
2,500,000*
2,500,000*
50,000
*Held by Yuuwa capital LP (managed by its general partner Yuuwa Management LP and its general partner Yuuwa Capital
Management Pty Ltd of which James Williams and Liddy McCall are Directors and have an indirect shareholding)
Page 12
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of AdAlta Limited for the year ended 30 June 2016, I
declare that, to the best of my knowledge and belief, there have been:
a) No contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the audit; and
b) No contraventions of any applicable code of professional conduct in relation
to the audit.
BUTLER SETTINERI (AUDIT) PTY LTD
LUCY P GARDNER
Director
Perth
Date: 19 September 2016
ADALTA LTD
ABN 92 120 332 925
CORPORATE GOVERNANCE
The Board of Directors of AdAlta Limited is responsible for the corporate governance of the Company
and guides and monitors the business and affairs of the Company on behalf of its shareholders.
To ensure the Board is well equipped to discharge its responsibilities it has guidelines for the
nomination and selection of Directors and for the operation of the Board.
The key charters and policies associated with AdAlta’s corporate governance practices are:
• Constitution
• Board Charter
• Code of Conduct
• Securities Trading Policy
• Continuous Disclosure Policy
• Shareholders Communication Policy
• Risk Management Policy
• Diversity Policy
• Audit & Risk Committee Charter
• Remuneration & Nomination Committee Charter
The Board has also reviewed its compliance with the ASX Corporate Governance Principles and
Recommendations (3rd Edition).
The Board has also reviewed its skill matrix setting out the mix of skills and diversity that the Board
currently has.
In accordance with Listing Rule 4.10.3, the Company has elected to disclose its Corporate
Governance policies and its compliance with them on its website, rather than in the Annual Report.
Accordingly the information detailed above about the Company’s Corporate Governance practices is
set out on the Investor page of the Company’s website at www.adalta.com.au
Page 15
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Revenue
Interest Received
Other Revenue
Expenses
Cost of services
Depreciation and amortisation expenses
Employee benefit expense
Travel expense
Board fees
Patent and legal costs
Other expenses
Profit (loss) before income tax
Tax expense
Profit (loss) for the year
Earnings per Share
Basic and diluted loss per share (cents)
Note
2016
$
2015
$
Restated
2
7
3
4
8,902
738,046
746,948
12,828
887,553
900,381
(1,413,975)
(684)
(224,620)
(57,127)
(50,000)
(44,556)
(119,042)
(1,910,004)
(1,712,080)
(723)
(203,007)
(47,728)
(52,032)
(83,837)
(108,842)
(2,208,249)
(1,163,056)
(1,307,868)
-
-
(1,163,056)
(1,307,868)
(32.59)
(63.33)
The accompanying notes form part of these financial statements.
Page 16
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings (accumulated losses)
TOTAL EQUITY
Note
2016
$
2015
$
Restated
5
6
7
8
9
485,558
897,247
1,382,805
282
282
34,864
931,241
966,105
966
966
1,383,087
967,071
178,797
36,402
215,199
215,199
1,167,888
232,649
28,532
261,181
261,181
705,890
10
11
8,150,331
3,908
(6,986,351)
1,167,888
6,525,277
3,908
(5,823,295)
705,890
The accompanying notes form part of these financial statements.
Page 17
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Share Capital
Series A
Preference
Shares
$
Ordinary shares
$
Convertible
Notes
$
Retained
Earnings
$
Share based
payment
reserve
$
Total
$
2,490,279
2,999,998
1,035,000
(4,515,427)
3,908
2,013,758
-
-
-
-
-
(1,307,868)
-
(1,307,868)
-
(1,307,868)
-
(1,307,868)
2,490,279
2,999,998
1,035,000
(5,823,295)
3,908
705,890
2,490,279
2,999,998
1,035,000
(5,823,295)
3,908
705,890
-
-
54
-
54
-
-
-
-
-
-
(1,163,056)
-
(1,163,056)
-
(1,163,056)
-
(1,163,056)
-
1,625,000
1,625,000
-
-
-
-
-
-
54
1,625,000
1,625,054
1,167,888
2,490,333
2,999,998
2,660,000
(6,986,351)
3,908
The accompanying notes form part of these financial statements.
Page 18
Balance at 1 July 2014 (Restated)
Comprehensive income
Profit (loss) for the year
Total comprehensive income for the
year attributable to the member of the
company
Balance at 30 June 2015
Balance at 1 July 2015
Comprehensive income
Profit (loss) for the year
Total comprehensive income for the
year attributable to the member of the
company
Transactions with the owner, in capacity
as owner and other transfers
Shares issued during the year
Convertible notes converted
Total transactions with the owner and
other transfers
Balance at 30 June 2016
ADALTA LTD
ABN 92 120 332 925
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Note
2016
$
2015
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
R & D tax incentive
Interest received
Net cash provided by (used in) operating activities
19 (b)
Cash flows from financing activities
Proceeds from convertible notes
Proceeds from share capital
Net cash provided by financing activities
Net increase (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
19 (a)
-
(2,061,656)
878,394
8,902
(1,174,360)
23,158
(2,224,366)
805,942
12,828
(1,382,438)
1,625,000
54
1,625,054
450,694
34,864
485,558
1,035,000
-
1,035,000
(347,438)
382,302
34,864
The accompanying notes form part of these financial statements.
Page 19
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The financial statements cover AdAlta Ltd as an individual entity. AdAlta Ltd is a company limited
by shares, incorporated and domiciled in Australia.
The financial statements were authorised for issue on 19 September 2016 by the Directors of the
company.
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance
with Australian Accounting Standards, Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The financial report is presented in Australian Dollars. The Company is
a for-profit entity for financial reporting purposes under Australian Accounting Standards.
in a financial
Australian Accounting Standards set out accounting policies that the AASB has concluded
would result
report containing relevant and reliable information about
transactions, events and conditions to which they apply. Material accounting policies adopted
in the preparation of this financial report are presented below. They have been consistently
applied unless otherwise stated.
Except for cash flow information, the financial report has been prepared on an accruals basis
and is based on historical costs, modified, where applicable, by the measurement at fair value
of selected non-curreent assets, financial assets and financial liabilities.
(b) Going Concern
These financial statements have been prepared on the going concern basis, which
contemplates the continuity of normal business activities and the realisation of assets and
settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Company incurred losses of $1,163,056 (2015:
$1,307,868) and the Company had net cash outflows from operating activities of $1,174,360
(2015: $1,382,438). As at balance date, the Company had net current assets of $1,167,888
(2015: $705,890).
The Directors believe that it is reasonably foreseeable that the Company will continue as a
going concern and that it is appropriate to adopt the going concern basis in the preparation of
the financial report, after consideration of the following.
On 8 July 2016, the Company lodged a prospectus with ASIC for the offer of 32,000,000 and
up to 40,000,000 ordinary fully paid shares at a price of $0.25 per share to raise a minimum of
$8,000,000 and a maximum of $10,000,000.
On 12 August 2016, the Prospectus closed over-subscribed and the Company was admitted to
the official list of the ASX on 22 August 2016.
(c) Income Tax
The income tax expense (revenue) for the year comprises current
(income) and deferred tax expense (income).
income tax expense
Page 20
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(c) Income tax (continued)
Current income tax expense charged to profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at reporting
date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax
liability balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss
when the tax relates to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to
the period when the asset is realised or the liability is settled and their measurement also
reflects the manner in which management expects to recover or settle the carrying amount of
the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised
only to the extent that it is probable that future taxable profit will be available against which the
benefits of the deferred tax asset can be utilised.
(d) Fair value measurement
Fair value is the price the Company would receive to sell an asset or would have to pay to
transfer a liability in an orderly (ie unforced) transaction between independent, knowledgeable
and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing
information is used to determine fair value. Adjustments to market values may be made having
regard to the characteristics of the specific asset or liability. The fair values of assets and
liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise,
the use of
observable market data.
to the extent possible,
the fair value measurement also takes into account a market
For non-financial assets,
participant's ability to use the asset in its highest and best use or to sell it to another market
participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to
share-based payment arrangements) may be valued, where there is no observable market
price in relation to the transfer of such financial instrument, by reference to observable market
information where such instruments are held as assets. Where this information is not available,
other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
(e) Plant and Equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Page 21
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e) Plant and Equipment (continued)
Plant and equipment are measured on the cost basis and are therefore carried at cost less
accumulated depreciation and any accumulated impairment losses.
In the event the carrying
amount of plant and equipment is greater than its estimated recoverable amount, the carrying
amount is written down immediately to its estimated recoverable amount and impairment
losses recognised either in profit or loss or as a revaluation decrease if the impairment losses
relate to a revalued asset.
in excess of
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is
is
not
assessed on the basis of the expected net cash flows that will be received form the asset's
employment and subsequent disposal. The expected net cash flows have been discounted to
their present values in determining recoverable amounts.
from these assets. The recoverable amount
the recoverable amount
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the
asset's useful life to the Company commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable asset are:
Class of Fixed Asset:
Computer software
Office equipment
Depreciation Rate
13.17%
17.31%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the
end of each reporting period. 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.
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These gains or losses are recognised in profit or loss when the item is derecognised.
When revalued assets are sold, amounts included in the revaluation reserve relating to that
asset are transferred to retained earnings.
(f) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions of the instrument. For financial assets, this is equivalent to the date that
the Company commits itself to either purchase or sell the asset (i.e. trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transactions costs, except where
the instrument is classified 'at fair value through profit or loss' in which case transactions costs
are recognised as expenses in profit or loss immediately.
Classification and subsequent measurement
Financial
instruments are subsequently measured at fair value, amortised cost using the
effective interest method or cost. Where available, quoted prices in an active market are used
to determine fair value. In other circumstances, valuation techniques are adopted.
Page 22
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f) Financial Instruments (continued)
Amortised cost is calculated as the amount at which the financial asset or financial liability is
measured at initial recognition less principal repayments and any reduction for impairment, and
adjusted for any cumulative amortisation of the difference between that initial amount and the
maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that exactly discounts estimated future cash
payments or receipts (including fees, transaction costs and other premiums or discounts)
through the expected life (or when this cannot be reliably predicted, the contractual term) of the
liability.
instrument to the net carrying amount of the financial asset or financial
financial
Revisions to expected future net cash flows will necessitate an adjustment to the carrying
amount with a consequential recognition of an income or expense item in profit or loss.
(i) Financial assets at fair value through profit or loss
Financial assets are classified at 'fair value through profit or loss' when they are held for
trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or
when they are designated as such to avoid an accounting mismatch or to enable performance
evaluation where a group of financial assets is managed by key management personnel on a
fair value basis in accordance with a documented risk management or investment strategy.
Such assets are subsequently measured at fair value with changes in carrying amount being
included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market and are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the
financial asset is derecognised.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and
fixed or determinable payments, and it is the Company's intention to hold these investments to
maturity. They are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the
financial asset is derecognised.
(iv) Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of
being classified into other categories of
financial assets due to their nature or they are
designated as such by management. They comprise investments in the equity of other entities
where there is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at
than
impairment losses and foreign exchange gains and losses recognised in other comprehensive
income. When the financial asset is derecognised, the cumulative gain or loss pertaining to
that asset previously recognised in other comprehensive income is reclassified into profit or
loss.
fair value with any re-measurements other
Page 23
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f) Financial Instruments (continued)
Available-for-sale financial assets are classified as non-current assets when they are not
expected to be sold within 12 months after the end of the reporting period. All other available-
for-sale financial assets are classified as current assets.
(v) Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured
at amortised cost. Gains or losses are recognised in profit or loss through the amortisation
process and when the financial liability is derecognised.
the end of each reporting period,
Impairment
At
the Company assesses whether there is objective
evidence that a financial asset has been impaired. A financial asset (or a group of financial
assets) is deemed to be impaired if, and only if, there is objective evidence of impairment as a
result of one or more events (a 'loss event') having occurred, which has an impact on the
estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the
market value of the instrument is considered to constitute a loss event. Impairment losses are
recognised in profit or loss immediately. Also, any cumulative decline in fair value previously
recognised in other comprehensive income is reclassified into profit or loss at this point.
(g) Impairment of assets
At the end of each reporting period, the Company assesses whether there is any indication
that an asset may be impaired. The assessment will include considering external sources of
information and internal sources of information, including dividends received from subsidiaries,
associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication
exists, an impairment test is carried out on the asset by comparing the recoverable amount of
the asset, being the higher of the asset's fair value less costs to sell and value in use to the
asset's carrying amount. Any excess of the asset's carrying amount over its recoverable
amount is recognised immediately in profit or loss, unless the asset is carried at a revalued
amount in accordance with another Standard (e.g. in accordance with the revaluation model in
AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is
treated as a revaluation decrease in accordance with that other Standard.
is not possible to estimate the recoverable amount of an individual asset,
Where it
the
Company estimates the recoverable amount of the cash-generating unit to which the asset
belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(h) Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services
performed in the ordinary course of business. Receivables expected to be collected within 12
months of the end of the reporting period are classified as current assets. All other receivables
are classified as non-current assets.
Page 24
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i) Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual
leave and long
service leave expected to be settled within 12 months of the reporting date are recognised in
current liabilities in respect of employees' services up to the reporting date and are measured
at the amounts expected to be paid when the liabilities are settled.
The Company's obligations for short-term employee benefits such as wages, salaries and sick
leave are recognised as a part of current trade and other payables in the statement of financial
position.
Long-term employee benefits
leave and long service leave not expected to be settled within 12
The liability for annual
months of the reporting date are recognised in non-current liabilites, provided there is an
unconditional right to defer settlement of the liability. The liability is measured as the present
value of expected future payments to be made in respect of services provided by employees
up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on
national goverment bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
(j) Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a
result of past events, for which it is probable that an outflow of economic benefits will result
and that outflow can be reliably measured.
Provisions are measured using the best estimate of
obligation at the end of the reporting period.
the amounts required to settle the
(k) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks,
other short-term highly liquid investments with original maturities of 12 months or less, and
bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities
in the statement of financial position.
(l) Revenue
Revenue is recognised when it is probable that the economic benefit will flow to the Company
and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable.
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
Income from the Research and Development tax incentive is recognised on an accrual basis in
the year to which the incentive relates.
All revenue is stated net of the amount of goods and services tax.
Page 25
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(m) Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the
Company that remain unpaid at the end of the reporting period. The balance is recognised as
a current liability with the amounts normally paid within 30 days of recognition of the liability.
(n) 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 Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable.
The net amount of GST recoverable from, or payable to, the ATO is included with other
receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST component of cash flows arising from
the ATO are
investing or financing activities which are recoverable from, or payable to,
presented as operating cash flows included in receipts from customers or payments to
suppliers.
(o) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform
to changes in presentation for the current financial year.
(p) Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements
based on historical knowledge and best available current information. Estimates assume a
reasonable expectation of future events and are based on current trends and economic data,
obtained both externally and within the Company.
Key Estimates
(i) Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any
pending or enacted environmental legislation, and the Directors understanding thereof. At the
current stage of
the
Directors believe such treatment is reasonable and appropriate.
the Company's development and its current environmental
impact
(ii) Taxation
Balances disclosed in the financial statements and the notes hereto, related to taxation are
based on the best estimates of Directors. These estimates take into account both the financial
performance and position of the Company as they pertain to current income tax legislation and
the Directors understanding thereof. No adjustment has been made for pending or future tax
legislation. The current income tax position represents that Directors' best estimate, pending
an assessment by the Australian Taxation Office.
Page 26
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) New and Amended Accounting Policies Adopted
Change in accounting policy
During the 2015/16 financial year, the Company changed its accounting policy in relation to
revenue recognition in order to reflect more appropriately the way in which economic benefits
flow to the Company as a result of research and development activities performed during the
year. Comparative amounts in the statement of profit or loss and other comprehensive income
and statement of financial posiition have been restated for consistency.
The following tables summarises the impact of the above changes.
2015
2014
Previously
Reported
Change Restated
Previously
Reported
Change
Restated
34,864
-
34,864
382,302
-
382,302
52,847
878,395
931,242
75,772
805,942
881,714
Cash and cash
equivalents
Trade and other
receivables
Plant and equipment
966
Total liabilities
(261,181)
-
-
966
1,689
(261,181)
(286,947)
-
-
1,689
(286,947)
Net assets /
(liabilities)
(172,504)
878,395
705,891
172,816
805,942
978,758
Issued capital
Share based
payment reserve
Convertible notes
(5,490,277)
(3,908)
(1,035,000)
-
-
-
(5,490,277)
(5,490,277)
(3,908)
(1,035,000)
(3,908)
-
-
-
-
(5,490,277)
(3,908)
-
Accumulated losses
6,701,689 (878,395)
172,504 (878,395)
5,823,294
(705,891)
5,321,369 (805,942)
(172,816) (805,942)
4,515,427
(978,758)
Interest received
R & D incentive
Other revenue
(12,828)
(805,942)
(9,158)
-
(72,453)
-
(12,828)
(878,395)
(9,158)
(18,667)
-
(575,192) (230,750)
(150,877)
-
(18,667)
(805,942)
(150,877)
Expenses
2,208,249
-
2,208,249
1,993,568
-
1,993,568
Profit / (loss) before
tax
1,380,321 (72,453)
1,307,868
1,248,832 (230,750)
1,018,082
Page 27
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continuted)
(r) Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed
below were in issue but not yet effective.
The Company does not anticipate that there will be a material effect on the financial statements
from the adoption of these standards.
Standard / Interpretation
AASB9 'Financial Instruments'
AASB14 'Regulatory Deferral Accounts'
AASB 2014-3 ' Amendments to Australian
Accounting Standards - Accounting for Acquisitions
of Interests in Joint Operations'
AASB 2014-4 'Clarification of Acceptable Methods of
Depreciation and Amortisation'
AABS 2014-6 'Amendments to Australian Accounting
Standards - Agriculture: Bearer Plants
AASB15 'Revenue from Contracts with Customers'
AASB 1057 'Application of Australian Accounting
Standards'
AASB 2014-9 'Amendments to Australian Accounting
Standards - Equity Method in Separate Financial
Statements'
AASB 2014-10 'Amendments to Australian
Accounting Standards - Sale or Contribution of
Assets between an investor and its Associate or
Joint Venture'
AASB 2015-1 'Amendments to Australian Accounting
Standards - Annual Improvements to Australian
Accounting Standards 2014-2016 Cycle'
AASB 2015-2 'Amendments to Australian Accounting
Standards - Disclosure Initiative: Amendments to
AASB 101'
AASB 2015-5 'Amendments to Australian Accounting
Standards - Investment Entities: Applying the
Consolidation Exception'
AASB 2015-9 'Amendments to Australian Accounting
Standards - Scope and Application Paragraphs'
AASB 16 'Leases'
AASB 2016-1 'Amendments to Australian Accounting
Standards - Recognition of Deferred Tax Assets for
Unrealised Losses'
AASB 2016-2 'Amendments to Australian Accounting
Standards - Disclosure Initiative: Amendments to
AASB 107'
Page 28
Application date
of standard
Expected to be
initally applied in
the financial year
ended
1 Janaury 2018
1 January 2016
30 June 2019
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2018
30 June 2019
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2018
30 June 2019
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2019
30 June 2020
1 January 2017
30 June 2018
1 January 2017
30 June 2018
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(s) Operating Segments
The Company only operates in one segment.
(t) Earnings per Share
Basic earnings per shares
Basic earnings per share is calculated by dividing the profit attributable to the owners of AdAlta
Limited, 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 financial year.
(u) Capital Risk Management
The Company’s objectives when managing capital are to safeguard its ability to continue as a
going concern, so that it can continue to fund research and development project activities.
The Company monitors capital on the basis of working capital requirements and during the
year, the Company's strategy, which was unchanged from 2015, was to maintain a current
account balance sufficient to meet the Company's day to day expenses with the balance held
in accounts with higher interest rates.
Page 29
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
2.
REVENUE AND OTHER INCOME
Contract Expense
R & D Offset
Grant Income
Total revenue
3.
TAX EXPENSE
(a) Tax expense
Current tax
Deferred tax
Income tax expense
(b) Tax reconciliation
2016
$
2015
$
-
738,046
-
738,046
(374)
878,395
9,532
887,553
-
-
-
-
-
-
Profit (loss) before income tax expense
(1,163,056)
(1,307,868)
Prima facie tax payable at 28.5% (2015: 30%)
Non deductible expenses
Non assessable income
Temporary differences
Benefits of tax losses not brought into account
(331,471)
467,429
(250,342)
(26,713)
141,097
-
(392,360)
587,426
(241,782)
(21,456)
68,172
-
(c)
The Company has revenue losses of approximately $430,000 for which no deferred tax asset
has been recognised.
(d)
The Company has no franking credits currently available for future offset.
4.
EARNINGS PER SHARE
(a) Loss used to calculate basic EPS
(b) Weighted average nymber of ordinary shares
outstanding during the year used in calculating basic
and diluted EPS
(1,163,056)
(1,307,868)
Number of
shares
Number of
shares
3,574,154
2,065,000
The 2,144,423 options (2015: 282,224) are not considered to be dilutive.
5.
CASH AND CASH EQUIVALENTS
Cheque account
Cash reverse account
Savings - bonus
8,632
455,822
21,104
485,558
11,841
2,242
20,781
34,864
Page 30
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
6.
TRADE AND OTHER RECEIVABLES
CURRENT
Sundry receivable - R&D tax offset
Trade receivables
Good and services tax
Prepaid expenses
Prepayments - IPO Costs
7.
PLANT AND EQUIPMENT
Computer software
Less accumulated depreciation
Office equipment
Less accumulated depreciation
Total plant and equipment
2016
$
2015
$
738,046
2,657
21,830
57,894
76,820
897,247
1,241
(1,241)
-
3,952
(3,670)
282
282
878,394
-
46,547
6,300
-
931,241
1,241
(1,241)
-
3,952
(2,986)
966
966
(a) Movements in carrying amounts
Movements in the carrying amounts for each class of plant and equipment.
Office Equipment
Balance at beginning of year
Additions
Depreciation expense
Balance at end of year
8.
TRADE AND OTHER PAYABLES
CURRENT
Accrued expenses
Trade creditors
PAYG and super payable
9.
PROVISIONS
CURRENT
Provision for annual leave
Provision for long service leave
Page 31
966
-
(684)
282
1,689
-
(723)
966
145,241
29,940
3,616
178,797
229,002
-
3,647
232,649
11,539
24,863
36,402
6,438
22,094
28,532
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
10.
ISSUED CAPITAL
Fully paid ordinary shares
Fully paid Series A Preference shares
Fully paid convertible notes
Shares have no par value.
(a) Ordinary Shares
At beginning of reporting period
Issued on exercise of options
Issued as part of share split
At the end of the reporting period
2016
$
2015
$
2,490,333
2,999,998
2,660,000
8,150,331
2,490,279
2,999,998
1,035,000
6,525,277
No.
2,065,000
53,500
10,299,723
12,418,223
No.
2,065,000
-
-
2,065,000
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of
the Company in proportion to the number of and amounts paid on the shares held. On a show
of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled
to one vote, and upon a poll each share is entitled to one vote. Incremental costs directly
attributable to the issue of the new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
(b) Series A Preference Shares
At beginning of reporting period
At the end of the reporting period
No.
2,999,998
2,999,998
No.
2,999,998
2,999,998
All Preference Shares will automatically convert into Ordinary Shares. The conversion ratio for
each Preference Share will be adjusted as provided in the relevant subscription agreement
and for the Share Split. Accordingly, 2,999,998 Preference Shares will convert to 21,594,477
Ordinary Shares.
Holders of a Series A Preference Shares are entitled to repayment of funds in priority to the
repayment of capital to holders of Ordinary Shares.
Each Series A Preference Share carries the right to vote equivalent to the number of ordinary
shares into which it would convert at the time of the vote.
(c) Convertible Notes
At beginning of reporting period
Mezzanine Finance
At the end of the reporting period
2016
No.
1,035,000
1,625,000
2,660,000
2015
No.
-
1,035,000
1,035,000
to
All Convertible Notes (which have all been issued at a price of $1.00) will convert
25,987,316 Ordinary Shares (based on the terms of the relevant Convertible Note deed and
the effect of the Share Split).
Holders of Convertible Notes do not have the right to vote at shareholders' meetings.
Page 32
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
10 ISSUED CAPITAL (Continued)
(d) Options on issue
Expiry Date
27 September 2016*
1 July 2018*
21 September 2018*
1 November 2018*
1 July 2019*
1 November 2019*
1 November 2020**
Number of
Options
252,057
145,976
20,569
381,018
291,953
818,378
234,472
2,144,423
50% of 1,909,951 Options (designated with *) have an exercise price of $0.0002 if exercised
within 3 months of vesting, and with the exercise price of the remaining 50% of those Options
being $0.09 if exercised within 12 months of vesting. Otherwise the exercise price of those
Options is $0.17.
The remaining 234,472 Options (designated with **) have an exercise price of $0.17 per
Option.
11.
RESERVES
Share Based Payment Reserve
At beginning of reporting period
Issued during the year
At the end of the reporting period
2016
2015
3,908
-
3,908
3,908
-
3,908
The Company has established an Employee Share Option Plan where employees, Directors
and Officers of the Company are issued with options over ordinary shares of AdAlta Limited.
The options,
issued for no consideration, are in general exercisable at a fixed price at
commencement date, unless otherwise stated and ending on the expiry date and are subject to
the acheivement of certain milestones, unless otherwise stated.
There are currently seven employees, Directors, contractors and officers eligible for this
scheme.
On 10 May 2016 the Board approved changes to the ESOP in alignment with a publicly listed
company, capping the ESOP at 5% of capital issued.
The Options cannot be transferred and will not be quoted on the ASX.
During the year no options expired or lapsed and 137,160 options were granted under the
Employee Options Plan.
Details of options as at the beginning and end of the reporting date and movements during the
year are set out below:
Page 33
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
11 RESERVES (Continued)
Grant Date
Expiry
Date
Exercise
Price
No. at
the start
of year
Granted in
the year
Exercised
Change
on Split
No. at the
end of
year
27-Jun-13
27-Sep-16
$0.17 *
43,000
27-Jun-15
01-Jul-18
$0.17 *
49,806
-
-
-
209,057
252,057
(24,903)
121,073
145,976
19-Aug-15 21-Sep-18
$0.17 *
-
7,160
(3,597)
17,006
20,569
10-Dec-14
01-Jul-19
$0.17 *
49,806
10-Dec-14 01-Nov-19
$0.17 *
99,612
-
-
242,147
291,953
-
484,294
583,906
11-Nov-15 01-Nov-18
$0.17 *
11-Nov-15 01-Nov-19
$0.17 *
11-Nov-15 01-Nov-18
$0.17 *
-
-
-
10-Dec-14 01-Nov-20
$0.17
40,000
-
50,000
(25,000)
121,546
146,546
40,000
40,000
-
-
-
194,472
234,472
194,472
234,472
194,472
234,472
282,224
137,160
(53,500) 1,778,539 2,144,423
Weighted average exercise price
$1.00
$0.17 *
$0.001
N/A
$0.17 *
50% of options designated with * have an exercise price of $0.0002 if exercised within 3
months of vesting with the exercise price of the reamining 50% being $0.09 if exercised within
12 months of vesting otherwise the exercise price is $0.17.
The weighted average remaining comtractual life of options on issue at 30 June 2016 is 1,007
days
12.
RELATED PARTY TRANSACTIONS
Related Parties
The Company's main related parties are as follows:
John Chiplin
Elizabeth McCall
James Williams
Samantha Cobb
Paul MacLeman
Ian Hobson
Non Executive Director (appointed 16 May 2014)
Non Executive Dirctor (appointed 16 December 2010)
Non Executive Director (appointed 16 December 2010)
Managing Director & CEO (appointed 29 June 2007)
Chairman & Non-Executive Director (appointed 16 April 2015)
Secretary (appointed 29 January 2016)
The Company had no other key management personnel during the period.
(a) Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of
including any Director (whether executive or
otherwise) of that entity, is considered key management personnel.
the entity, directly or indirectly,
Page 34
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
12 RELATED PARTY TRANSACTIONS (continued)
Remuneration of key management personnel
Short-term employee
benefits
Salary &
Post-
employment
benefits
Share-
based
payment
Fees
Other
$
$
Superannuation
$
Options
Total
$
$
2016
Non-executive Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Executive Directors
Samantha Cobb
Total
2015
Non-executive Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Merilyn Sleigh (resigned
31 July 2014)
John Ballard (resigned 13
May 2015)
Executive Directors
Samantha Cobb
Total
30,000
-
-
20,000
-
-
-
-
-
-
-
-
151,376
201,376
45,413
45,413
18,695
18,695
4,950
-
-
20,000
1,833
26,250
-
-
-
-
-
-
-
-
-
-
-
-
151,376
204,409
27,123
27,123
16,957
16,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
-
-
20,000
215,484
265,484
4,950
-
-
20,000
1,833
26,250
195,456
248,489
Share options issued to key management personnel as remuneration:
Balance at Granted as
Exercised
Net other Balance at
2016
Non-executive Directors
Paul MacLeman
James Williams
Liddy McCall
John Chiplin
Executive Directors
Samantha Cobb
Total
-
-
-
-
75,000
-
-
55,000
(12,500)
-
-
(12,500)
303,863
366,363
-
-
-
-
206,627
249,127
150,099
150,099
-
130,000
(15,200)
(40,200)
655,852
1,166,342
790,751
1,406,241
No Share options were exercised by key management personnel during the year 2015.
Page 35
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
13.
14.
CONTINGENT LIABILIATIES & CONTINGENT ASSETS
The Directors are not aware of any matters or circumstances which may give rise to a contingent
liability or asset.
EVENTS AFTER THE REPORTING PERIOD
On 8 July 2016, the Company lodged a prospectus with ASIC for the offer of 32,000,000 and up to
40,000,000 ordinary fully paid shares at a price of $0.25 per share to raise a minimum of
$8,000,000 and a maximum of $10,000,000. On 12 August 2016, the Prospectus closed over-
subscribed. The Company was admitted to the official list of the ASX on 22 August 2016.
On 11 August 2016, the Company’s convertible notes and Series A Preference shares converted to
ordinary shares.
On 22 August 2016, the Company received a Reseach and Development tax incentive refund of
$738,045 for the 2015/2016 financial year.
Otherwise, there has not been any matter or circumstance that has arisen subsequent to the end of
the financial year that has significantly affected, or may significantly affect, the operations of the
Company, the results of those operations, or the state of affairs of the Company in future financial
years.
15.
COMMITMENTS FOR EXPENDITURE
(a) Lease commitments
The Company has no lease commitments.
(b) Capital commitments
The Company has no capital commitments.
(c) Other commitments
The Company is currently not contracted to significant expenditure.
16.
FINANCIAL RISK MANAGEMENT
The Company does not have any complex financial instruments or derivatives.
(a) Terms, conditions and accounting policies
The Company's accounting policies,
including the terms and conditions of each class of
financial asset, financial liability and equity instrument, both recognised and unrecognised at
the balance sheet date, are as follows:
Page 36
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
16 FINANCIAL RISK MANAGEMENT (Continued)
Recognised Financial
Instruments
Statement of
Financial
Position
Notes
i) Financial assets
Cheque account
Cash reserve
Savings
R & D tax incentive
Trade receivables
Goods & services tax paid
ii) Financial liabilities
Trade and other creditors
5
5
5
6
6
6
8
iii) Equity
Ordinary shares
10
Accounting Policies
Terms and Conditions
Carried at face value
Carried at face value
Carried at face value
Recognised on an
accrual basis
Recognised on an
accrual basis
Recognised on an
accrual basis
The cheque account is at
call with an interest rate of
0.00% (2015: 0.00%)
The cash reserve account
is at call with an interest
rate of 1.05% (2015:
0.01%)
The savings bonus
account is at call with an
interest rate of 1.54%
(2015: 1.69%)
The incentive is claimed
annually under an
Australia Taxation Office
mechanism which
designed to promote
research and development
Normal invoice terms are
14-30 days
Business activity
statements are lodged on
a quarterly basis
Liabilities are
recognised for
amounts to be paid in
the future for goods
and services received,
whether or not billed
to the company
The majority of costs are
invoiced on a quarterly
basis and hence liabilities
accrue for up to 90 days.
Trade liabilities are
normally settled on 14-30
day terms
Ordinary share capital
is recognised at the
fair value of the
consideration received
by the company
Details of the shares
issued and the terms and
conditions of the options
outstanding over ordinary
shares at balance date are
set out in Note 10
Page 37
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
16 FINANCIAL RISK MANAGEMENT (Continued)
Series A preference shares
10
Convertible notes
10
Series A Preference
share capital is
recognised at the fair
value of the
consideration received
by the company
Details of the Series A
Preference shares issued
and the terms and
conditions at balance date
are set out in Note 10
Convertible notes are
recognised at the fair
value of the
consideration received
by the company
Details of the convertible
notes issued and the
terms and conditions at
balance date are set out in
Note 10
(b) The carrying value of financial assets and liabilities approximates their fair value.
(c) Financial risk manangement
The Company's activities expose it to a variety of financial risks; market risk (fair value interest
rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company's
overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Company.
(i) Market risk
The Company is not exposed to either equity securities price risk or commodity price risk.
The Company has an exposure to foreign currency risk because several contracts relating to
cost of services are denominated in foreign currencies. When the service agreement is signed
the Company seeks to lock-in a foreign exchange rate to minimise the risks associated with
fluctuating currency markets.
(ii) Credit Risk
The maximum credit risk is total current assets of which the vast majority is either in the form of
cash or amounts receivable from the Australian Taxation Office in the form of the Research and
Development tax incentive and GST refundable.
(iii) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and short term assets to
enable the Company to settle its liabilities.
With no long term debt or contractual commitments the Company's exposure to liquidity risk is
minimal.
(iv) Cash flow and fair value interest rate risk
As the Company has no interest-bearing liabilities, cash out flows are not exposed to changes in
market interest rates.
The Company maintains a current cheque account balance sufficient
expenses with the balance of cash held in accounts designed to maximise interest income.
to meet day to day
Page 38
ADALTA LTD
ABN 92 120 332 925
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
17.
DIVIDENDS
No dividends were paid or declared since the start of
recommendation for payment of dividends has been made.
2016
$
2015
$
the financial year and no
18.
AUDITORS REMUNERATION
Audit services
Auditors of the Company
Butler Settineri (Audit) Pty Ltd
Other services
Butler Settineri (Audit) Pty Ltd
Related practice entity
19.
CASH FLOW INFORMATION
(a) Reconciliation of Cash
Cash at the end of financial year as included in the
statement of cash flows is reconciled to the related
items in the statement of financial position as follows:
Cheque Account
Cash reserve account
Savings - bonus
(b) Reconciliation of cash flow from operations with
profit after income tax
Loss attributable to members
Non-cash flows in profit:
Depreciation
(Increase) / decrease in receivables
Increase / (decrease) in payables
Increase / (decrease) in provisions
Net cash provided by (used in) operating
activities
16,434
5,400
12,500
7,500
20,000
-
-
-
8,632
455,823
21,103
485,558
11,841
2,242
20,781
34,864
(1,163,056)
(1,307,868)
684
33,994
(53,852)
7,870
723
(49,528)
(31,690)
5,925
(1,174,360)
(1,382,438)
Page 39
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ADALTA LIMITED
Report on the Financial Report
We have audited the accompanying financial report of AdAlta Limited (the “Company”)
which comprises the statement of financial position as at 30 June 2016 and the statement
of profit or loss and other comprehensive income, statement of changes in equity and the
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
which gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that is free from material
misstatement, whether due to fraud or error.
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 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
judgement, 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 control relevant to the Company’s preparation of the financial report
which 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 Company’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting
estimates made by 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.
Auditor’s Opinion
In our opinion, the financial report of AdAlta Limited is in accordance with the Corporations
Act 2001 including:
a) giving a true and fair view of the Company’s financial position as at 30 June 2016
and of its performance for the year ended on that date; and
b) complying with Australian Accounting Standards and
the Corporations
Regulations 2001.
Report on the Remuneration Report
We have audited the Remuneration Report included on pages 6 to 13 of the directors’
report for the year ended 30 June 2016.
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.
Auditor’s Opinion
In our opinion the Remuneration Report of AdAlta Limited for the year ended 30 June
2016 complies with section 300A of the Corporations Act 2001.
BUTLER SETTINERI (AUDIT) PTY LTD
LUCY P GARDNER
Director
Perth
Date: 19 September 2016
ADALTA LTD
ABN 92 120 332 925
SHAREHOLDER INFORMATION
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this
report is as follows. The information is current as at 8 September 2016.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
Number of holders
Number of units
1
21
88
257
62
429
1
64,929
749,803
9,545,856
89,639,427
100,000,016
(cid:8) Issued Share
Capital
-
0.06%
0.75%
9.55%
89.64%
100.00(cid:8)
The number of shareholders holding less than a marketable parcel of
shares are:
3
(b) Voting rights
Each fully paid ordinary share carries voting rights of one vote per share.
The names of the twenty largest holders of quoted ordinary shares are:
Position Holder Name
1
2
3
4
5
6
7
8
9
10
11
12
YUUWA CAPITAL LP
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITYCASTLE PTY LTD
LA TROBE UNIVERSITY
MR ROBIN ARTHUR BEAUMONT & MS HELEN
ELAINE SHINGLER
NATIONAL NOMINEES LIMITED
DR FRANCIS JOHN BALLARD & DR LEANNA
CHRISTINE READ
(cid:52)UTBLUEBOX PTY LTD
CS FOURTH NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
- A/C 3
CSIRO
JONTRA HOLDINGS PTY LTD (cid:31)THE J D
MACTAGGART S/F A/C(cid:33)
J P MORGAN NOMINEES AUSTRALIA LIMITED
SAMANTHA COBB
JOHN CHIPLIN
13
14
15
16 MR MATTHEW TURNER
17 MR IAIN ROSS
18
19
20
JOHN ALUN SIEBERT
VEDDEREDDIE PTY LIMITED (cid:31)(cid:52)UIDDITY SF A/C(cid:33)
DRACOSERPENS INVESTMENTS PTY LTD
Total
Total Issued Capital
Page 43
Holding
54,059,848
8,592,730
5,311,856
3,041,330
1,838,559
1,600,000
935,239
898,116
865,235
725,271
614,621
608,828
600,000
480,235
361,756
320,100
320,000
319,900
298,509
284,911
82,077,044
100,000,016
(cid:8) IC
54.06%
8.59%
5.31%
3.04%
1.84%
1.60%
0.94%
0.90%
0.87%
0.73%
0.61%
0.61%
0.60%
0.48%
0.36%
0.32%
0.32%
0.32%
0.30%
0.28%
82.08(cid:8)
100.00(cid:8)
ADALTA LTD
ABN 92 120 332 925
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section
671B of the Corporations Act 2001 are:
Position
Shareholder
1
2
3
YUUWA CAPITAL LP
PLATINUM INVESTMENT MANAGEMENT
LIMITED (HELD BY HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED)
CITYCASTLE PTY LTD
Number of
Shares
54,059,848
8,000,000
(cid:8) IC
54.06%
8.00%
5,311,856
5.31%
(d) Unquoted equity securities:
Number
252,057
145,976
291,953
818,378
234,472
22,997,291
576,967
26,354,000
20,569
146,546
234,472
Number
of
Holders
2
2
2
4
3
4
1
3
1
2
2
(cid:14)Class
Escrow
Period
Holders of more than
20(cid:8)
Unlisted options exercisable
at $0.17* expiring 27/9/2016
Unlisted options exercisable
at $0.17* expiring 1/7/2018
Unlisted options exercisable
at $0.17* expiring 1/7/2019
Unlisted options exercisable
at $0.17* expiring 1/11/2019
Unlisted options exercisable
at $0.17* expiring 1/11/2020
Ordinary Shares, subject to
24 months escrow
Ordinary Shares, subject to
12 months escrow
Ordinary Shares, subject to 6
months escrow
Unlisted options exercisable
at $0.17* expiring 21/9/2018
Unlisted options exercisable
at $0.17* expiring 1/11/2018
Unlisted options exercisable
at $0.17* expiring 1/11/2018
22/08/2018
22/08/2018
22/08/2018
22/08/2018
22/08/2018
22/08/2017
22/02/2017
Samantha Cobb (167,061)
Michael Foley (84,996)
Samantha Cobb (89,099)
Michael Foley (56,877
Samantha Cobb (178,199)
Michael Foley (113,754)
Samantha Cobb (356,392)
Michael Foley (227,514)
David McGibney (117,236)
Brian Richardson (58,618)
John Westwick (58,618)
Yuuwa Capital LLP
(22,082,027)
Citycastle Pty Ltd
(576,967)
Yuuwa Capital LLP
(19,577,821)
Michael Foley (20,569)
22/08/2018
22/08/2018
22/08/2018
22/08/2018
Paul MacLeman (73,273)
John Chiplin (73,273)
Paul MacLeman (146,545)
John Chiplin (87,927)
*50% of 1,909,951 Options have an exercise price of $0.0002 if exercised within 3 months of vesting, and with the exercise
price of the remaining 50% of those options being $0.09 if exercised within 12 months of vesting. Otherwise the exercise price
is $0.17.
(e) Use of funds
Since admission the Company has used its cash in a way consistent with its business objectives.
Page 44