Alternus Energy Group
Annual Report 2012

Plain-text annual report

Analytica Limited Financial Statements For the Year Ended 30 June 2012 Analytica Limited Contents 30 June 2012 Financial Statements Corporate Governance Statement Directors' Report Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Audit Report Additional Information for Listed Public Companies Page 1 8 21 22 23 24 25 26 64 65 67 Analytica Limited Corporate Governance Statement 30 June 2012 The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the governance framework and practices in place to ensure they meet the interests of shareholders. The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations 2nd Edition (the Principles). Copies of Analytica Limited's board and board committee charters and key corporate governance policies or summaries are available in the Corporate Governance section of the website at www.analyticamedical.com. Principle 1: Lay solid foundations for management and oversight Role of the Board and Management The Board of Directors is responsible for the corporate governance of the Company. The Board provides strategic guidance for the Company, and effective oversight of management. The Board guides and monitors the business and affairs of Analytica Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. Your Board has adopted a Charter that details its roles and responsibilities, which is available on our website. Your Board has delegated responsibility for day-to-day management of the Company to the CEO and there is a formal delegations structure in place which sets out the powers delegated to the CEO and those specifically retained by the Board, these delegations are reviewed on a regular basis. Responsibilities of the Board The Board is responsible for:          Overseeing the company, including its control and accountability systems; Appointing and removing the CEO; Where appropriate, ratifying the appointment and removal of senior executives; Providing input into and final approval of management’s development of corporate strategy and performance objectives; Reviewing, ratifying and monitoring systems of risk management and internal controls, codes of conduct and legal compliance; Monitoring senior executives performance and implementation of strategy; Ensuring appropriate resources are available to senior executives; Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestures; and Approving and monitoring financial and other reporting. 1 Analytica Limited Corporate Governance Statement 30 June 2012 Principle 2: Structure the Board to add Value The Board’s policy is that the Board needs to have an appropriate mix of skills, experience, expertise and diversity to be well equipped to help the Company navigate the range of challenges faced by the company. The names of the members of the Board as at the date of this report are set out below:    Dr M. Monsour Mr R. Mangelsdorf Mr W. Brooks Details of the Board member’s experience, expertise, qualifications, term of office and independence status, are set out in the directors' report. Composition of the Board The Board’s composition is determined based on criteria set out in the Company’s constitution and the Board Charter. The Board seeks to ensure that:    At any point in time, its membership represents an appropriate balance between directors with experience and knowledge of the Group and directors with an external or fresh perspective; There is a sufficient number of directors to serve on Board committees without overburdening the directors or making it difficult for them to fully discharge their responsibilities; and The size of the Board is appropriate to facilitate effective discussion and efficient decision making. In accordance with the ASX Listing Rules, the Company must hold an election of Directors each year. Board committees To ensure that the responsibilities of the Board are upheld and executed to the highest level, the Board has established the following Board committees:   Audit Committee Remuneration Committee Each of these committees has established charters and operating procedures in place, which are reviewed on a regular basis. The Board may establish other committees from time to time to deal with matters of special importance. The Committees have access to the Company’s executives and senior management as well as independent advice. Copies of the minutes of each Committee meeting are made available to the full Board, and the Chairman of each Committee provides an update on the outcomes at the Board meeting that immediately follows the Committee meeting. Independent decision making The Board recognises the important contribution independent Directors make to good corporate governance. All Directors, whether independent or not, are required to act in the best interests of the Company and to exercise unfettered and independent judgment. The Board has adopted specific principles in relation to directors’ annually, when determining if a Director is independent: independence and considers the following, at least 2 Analytica Limited Corporate Governance Statement 30 June 2012 Whether the Director:      Is a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company. Is employed, or has previously been employed in an executive capacity by the company or another group member, and there has not been a period of at least three years between ceasing such employment and serving on the Board. Has within the last three years been a principal of a material professional adviser or a material consultant to the company or another group member, or an employee materially associated with the service provided. Is a material supplier or customer of the company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer. Has a material contractual relationship with the company or another group member other than as a director. Role of the Chair The Chair of the Board is responsible for leadership of the Board and for the efficient organisation and conduct of the Board’s functioning. The Chair facilitates the effective contribution of all directors and promote constructive and respectful relations between directors and between Board and management. Access to information The Board is provided with the information it needs to discharge its responsibilities effectively and all Directors have complete access to senior management through the Chairman, CEO or Company Secretary at any time. In certain circumstances, each Director has the right to seek independent professional advice at the Company’s expense, within specified limits, or with the prior approval of the Chairman. Principle 3: Promote ethical and responsible decision-making Code of conduct The Board acknowledges and emphasises the importance of all directors and employees maintaining the highest standards of corporate governance practice and ethical conduct. A code of conduct has been established requiring directors and employees to:       Act honestly and in good faith; Exercise due care and diligence in fulfilling the functions of office; Avoid conflicts and make full disclosure of any possible conflicts of interest; Comply with the law; Encourage the reporting and investigating of unlawful and unethical behaviour; and Comply with the share trading policy outlined in the Code of Conduct. A copy of the Code of Conduct is available from the company’s website. 3 Analytica Limited Corporate Governance Statement 30 June 2012 Diversity policy In respect of diversity, the Board considers that diversity includes differences that relate to gender, age, ethnicity and cultural background. It also includes differences in background and life experience, communication styles, interpersonal skills, education and problem solving skills. The Company seeks to develop a culture of diversity within the Company whereby a mix of skills and diverse backgrounds are employed by the Company at all levels. The Company strives to: 1. 2. 3. 4. develop and maintain a diverse and skilled workforce through transparent recruitment processes. promote an inclusive workplace culture that values and utilises the contributions of all employees backgrounds, experiences and perspective though improved awareness of the benefits of workforce diversity. facilitate diversity in the workplace by developing programs that promote growth for all employees, so each employee may reach their full potential, and providing maximum benefit for the Company. set measurable objectives to encourage diversity within the Company. Analytica Limited considers the key management personnel, excluding Directors, company. to be the senior executives of the Principle 4: Safeguard integrity in financial reporting Audit Committee The audit committee assists the Board in fulfilling its corporate governance responsibilities in regard to:     the integrity of the financial reporting compliance with legal and regulatory obligations the effectiveness of the company’s risk management and internal control framework oversight of the independence of the external auditors The names and qualifications of those appointed to the audit committee and their attendance at meetings of the committee are included in the directors' report. The audit committee reports to the full Board after every meeting on all matters relevant to the committee’s roles and responsibilities. External auditor The Audit Committee oversees the relationship with the external auditor. lead Audit Partner on the audit is required to rotate at the completion of a 5 year term. In accordance with the Corporations Act 2001, the The external auditor attends the AGM and is available to answer your shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report. 4 Analytica Limited Corporate Governance Statement 30 June 2012 Principle 5: Make timely and balanced disclosure Analytica Limited has established policies and procedures to ensure timely and balanced disclosures of all material matters concerning the Company, and to ensure that all investors have access to information on the Company’s financial performance. These policies and procedures include a comprehensive disclosure policy that includes identification of matters that may have a material effect on the price on the Company’s securities, notifying them to the ASX, posting relevant information on the Company’s website and issuing media releases. The Annual Report including relevant information about the operations of the company the year, key financial information, changes in the state of affairs and indications of future developments. The Annual Reports for the current year and for previous years are available under the Investor Relations section of the company website. The half year and full year financial results are announced to the ASX and are available to shareholders via the company and ASX websites. All announcements made to the market, and related information (including presentations to investors and information provided to analysts or the media during briefings) are made available to all shareholders under the investor relations section of the company website after they are released to the ASX. All ASX announcements, media releases and financial public release. information are available on Company website within one day of Principle 6: Respect the rights of shareholders The Company Secretary has been nominated as the person responsible for communications with the Australian Securities Exchange (ASX). All Executive Management have an ongoing obligation to advise the Company Secretary of any material non-public information which may need to be communicated to the market. The Company has a Shareholder Communications Policy which promotes effective communication with shareholders and encourages participation at general meetings. The company makes all ASX announcements available via its website. email notification of announcements. In addition, shareholders who are registered receive The Notice of Annual General Meeting (AGM) will be provided to all shareholders and posted on the company’s website. Notices for general meetings and other communications with shareholders are drafted to ensure that they are honest, accurate and not misleading and that the nature of the business of the meeting is clearly stated and explained where necessary. The Board encourages full participation by shareholders at the Annual General Meeting to ensure a high level of Director accountability to shareholders and shareholder identification with the Company’s strategy and goals. For shareholders unable to attend, an AGM question form will accompany the Notice of Meeting, giving shareholders the opportunity to forward questions and comments to the company or the external auditor prior to the AGM. 5 Analytica Limited Corporate Governance Statement 30 June 2012 Principle 7: Recognise and manage risk The Board considers identification and management of key risks associated with the business as vital to maximise shareholder wealth. A yearly assessment of the business's risk profile is undertaken and reviewed by the Board, covering all aspects of the business from the operational level through to strategic level risks. The CEO has been delegated the task of implementing internal controls to identify and manage risks for which the Board provides oversight. The effectiveness of these controls is monitored and reviewed regularly. The recent economic environment has emphasised the importance of managing and reassessing its key business risks. The Board is responsible for reviewing the company’s policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control. The Board requires management to design and implement the risk management and internal control system to manage the company's material business risks and report to it on whether those risks are being managed effectively. The Board has received a report from management as to the effectiveness of the company's management of its material business risks. A summary of the Company’s risk related policies can be found with other corporate governance policies under the Corporate Governance section of the company’s website. Internal control The Board is responsible for reviewing the company’s policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control. The Board has received assurance from the Chief Executive Officer and the Chief Financial Officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. Principle 8: Remunerate fairly and responsibly The company’s remuneration policy is designed in such as way that it:   motivates senior executives to pursue the long-term growth and success of the company demonstrates a clear relationship between senior executives’ performance and remuneration. The remuneration policy, which sets the terms and conditions for the key management personnel (KMP) was developed by the remuneration committee after seeking professional advice from independent consultants and was approved by the Board. All executives receive a base salary, superannuation, fringe benefits, performance incentives and retirement benefits. The remuneration committee reviews executive packages annually by reference to company performance, executive performance, comparable information from industry sectors and other listed corporations and independent advice. The performance of executives is measured against criteria agreed half yearly which are based on the forecast growth of the company’s profits and shareholder value. The policy is designed to attract the highest calibre executives and reward them for performance which results in long-term growth in shareholder value. The Board expects that the remuneration structure implemented will result in the company being able to attract and retain It will also provide executives with the necessary incentives to work to grow long-term growth in the best executives. shareholder value. 6 Analytica Limited Corporate Governance Statement 30 June 2012 The payment of bonuses, options and other incentive payments are reviewed by the remuneration committee annually as part of the review of executive remuneration and a recommendation is put to the Board for approval. All bonuses, options and incentives must be linked to predetermined performance criteria. The Board can exercise its discretion in relation to approving incentives, bonuses and options and can recommend changes to the committee’s recommendations. Any changes must be justified by reference to measurable performance criteria. Further information about the company’s remuneration strategy and policies and their relationship to company performance can be found in the Remuneration Report which forms part of the directors' report, together with details of the remuneration paid to key management personnel. Remuneration committee The responsibilities of the remuneration committee include a review of and recommendation to the Board on:      the company’s remuneration, executives recruitment, retention and termination policies and procedures for senior senior executives’ remuneration and incentives superannuation arrangements the remuneration framework for directors remuneration by gender. Each member of the remuneration committee:   is familiar with the legal and regulatory disclosure requirements in relation to remuneration has adequate knowledge of executive remuneration issues, including executive remuneration issues, including executive retention and termination policies and short term and long term incentive arrangements. 7 Analytica Limited Directors' Report For the Year Ended 30 June 2012 Your directors present their report on Analytica Limited for the year ended 30 June 2012. 1. General information Information on directors The names,qualifications, experience and special responsibilities of each person who has been a director during the year and to the date of this report are: Dr Michael Monsour Qualifications Chairman (appointed 28 June 2004) MBBS-HONS, FACRRM, FAICD Experience Dr Michael Monsour is a Medical Practitioner with extensive interests in Queensland medical and dental centres. Michael Monsour graduated from the University of Queensland in 1977 in medicine with honours. He operates a medical management company, which provides management support to medical and dental practitioners. He is the principal of Godbar Software (established 1988) which is one of the leading software developers of Occupational Health, Safety and Medical Accounting software packages in Australia. Interest in shares and options Direct: Directors’ interest in ordinary shares: 740,088 Directors’ interest in share options - ALTO: 185,022 Directors’ interest in share options - ALTOA: 185,022 Indirect: MPAMM Pty Ltd: 31,144,799 Ordinary Shares 25,743,827 ALTO Options 25,743,827 ALTOA Options MP Monsour Medical Practice Pty Ltd 10,255,720 Ordinary Shares 2,563,930 ALTO Options 2,563,930 ALTOA Options Special responsibilities Other directorships in listed entities held in the previous three years Dr Michael Monsour is a member of the Audit and Risk Management Committee and the Remuneration Committee. Dr Monsour was formerly a director of the listed entity CBio Limited (January 2007 to November 2011). 8 Analytica Limited Directors' Report For the Year Ended 30 June 2012 1. General information continued Information on directors continued Mr. Ross Mangelsdorf Qualifications Experience Executive Director (appointed 7 October 2008) B.Bus, FCA, FTIA, MAICD Mr Mangelsdorf is a Director of a Queensland based land development Company and has been a Director/partner of a chartered accounting firm for 30 years. He works with SME production, manufacturing and retail firms assisting with business, taxation and management services. Interest in shares and options Direct: Ross Mangelsdorf Director's interest in ordinary shares: 13,333 Director's interest in share options - ALTO: 3,333 Director's interest in share options - ALTOA: 3,333 Indirect: RM & JM Mangelsdorf: 13,333 ordinary shares 3,333 ALTO options 3,333 ALTOA options Tambien Pty Ltd: 11,168,994 ordinary shares 6,570,627 ALTO options 6,570,627 ALTOA options Manowe Pty Ltd: 4,180,585 ordinary shares 4,180,585 ALTO options 4,180,585 ALTOA options Special responsibilities Mr Mangelsdorf performs the function of Chief Financial Officer of the Company and is a member of the Audit and Risk Committee, and Remuneration Committee. Mr. Warren Brooks Qualifications Experience Non Executive Director (appointed 25 July 2011) Securities Institute Certificate, Diploma in Financial Planning Warren previously had 28 years experience working in Investment Banking and Stockbroking. Interest in shares and options Director's interest in ordinary shares: 39,206,989 Director's interest in options - ALTO: 16,983,505 Director's interest in options - ALTOA: 16,983,505 Special responsibilities Mr Brooks is a member of Remuneration Committee. the Audit and Risk Committee and Other directorships in listed entities held in the previous three years Mr Brooks was the Managing Director and Founder of boutique Financial Advisory firm Clime AFM Pty Ltd which was a wholly owned subsidiary of Clime Investment Management Ltd, an ASX listed Company. Warren founded Australian Financial Management (Investment) Pty Ltd in 1998 and sold the business to Clime Investment Management Ltd in 2006. 9 Analytica Limited Directors' Report For the Year Ended 30 June 2012 1. General information continued Information on directors continued Mr. David Gooch Qualifications Experience Non-Executive Director (resigned 25 July 2011) FAICD Mr Gooch is a well known Sydney businessman who has developed and been instrumental in the steering to success of several small an medium sized businesses's. Mr Gooch was a corporate advisor and financial management specialist who has had experience in industries including construction, hospitality, retail and finance. Interest in shares and options Director's interest in ordinary shares: Nil Director's interest in share options: Nil Principal activities and significant changes in nature of activities The principal activities of Analytica Limited during the year were:     The development of intellectual property in the medical device field in relation to patents in the burette field; The development of strategies for commercial sales of burette product; The development of intellectual property of medical device in relation to patents and systems in the pelvic floor exercise field; Development of intellectual property of manufacture and delivery of Naltrexone implants. There were no significant changes in the nature of Analytica Limited's principal activities during the year. 2. Operating results and review of operations for the year Operating results The loss of the company amounted to $ (2,222,009), after providing for income tax. This represented a 90% decrease on the results reported for the year ended 30 June 2011 of $(203,176). The significant loss was largely due to the fair value adjustment in CBio Limited of $595,485 and the increase in fair value adjustment in CBio Limited in 2011 of $381,320 a net movement of $976,806. The increase in depreciation was due to the write off of intellectual property of $90,000. Administration costs increase was largely due to the costs of the share, rights and option issues. Research and development the Perineometer device branded "PeriCoach". increase was largely due to the product development of Review of operations A review of the operations of the company during the financial year and the results of those operations are discussed as follows. ELF2 Analytica has signed a licensing agreement with Melbourne-based medical device developer Gorman ProMed Ltd for the company's Electrical Low Frequency (ELF-001) stimulator product IP. The ELF device delivers a low-frequency voltage used by neurologists to locate nerve endings during Botulinum neurotoxin A injection treatment for muscular spasticity. Gorman ProMed has successfully sold units to neurologists in Australia, New Zealand and Thailand. These units have been received favourably by clinicians, featuring in a number of published clinical papers. 10 Analytica Limited Directors' Report For the Year Ended 30 June 2012 2. Operating results and review of operations for the year continued Review of operations continued Analytica's ELF2 device builds on this foundation with additional electromyographic (EMG) functionality, and a number of the clinician during treatment. Analytica is currently investigating patent protection of these innovations. innovative enhancements to assist A pre-project market assessment has recently been completed and Analytica is currently finalising the product specification pending the results of patent investigations. PeriCoach® Our engineering team are making substantial progress with the development of the perineometer product. The PeriCoach® device assists women with their pelvic floor exercises which have been shown to mitigate female stress urinary incontinence in later life. Development has progressed with working prototypes and the recent completion of representative samples for clinician assessment. Electronic hardware and firmware for the device is very well progressed, and work continues based on clinician feedback on the physical usability of the design and the graphical user interface. Early feedback from professionals in the industry has already demonstrated that this new device will offer a never before seen advantage in diagnosing and treating patients, and there is great anticipation for further development of the project. Market research has confirmed there is a substantial market which is currently unsatisfied. AutoStart® Burette The Analytica AutoStart® Burette is a sterile, single use infusion device that provides automatic flow control functionality not found in any other burette. The patented AutoStart® system automatically restarts the flow from the infusion reservoir once a medication bolus is delivered, allowing the clinician to attend to other issues. The method of operation of the device reduces nurse time, improves patient treatment, as well as permitting advanced features of infusion pumps to be fully utilised. Analytica Limited and licensee Medical Australia Limited announced in July 2011 that Concord Repatriation Hospital in Sydney has placed an order with forecast sales revenue upward of $500,000 per annum. Concord is a teaching hospital of Sydney Medical School at the University of Sydney, and offers a comprehensive range of specialty and sub specialty services, many recognized nationally and internationally as centres of excellence. This order, a result of an extensive 6 month clinical evaluation of the safety and time saving features of the AutoStart® Burette, has resulted in their most substantial change in IV practices in 16 years. Supply problems have hampered the roll out of this contract. These supply problems were overcome late in the 2011/2012 FY. It is estimated that the AutoStart® Burette frees 20 up to minutes of nurse time per medication event, which means the device more than pays for itself in nurse time savings. In today's under staffed hospitals, time savings are critical to nurses, patients, and administrators alike. Medical Australia has incorporated Analytica's AutoFlush feature into their range of TUTA® burettes, under the trademark MediFlush. Standard burettes with this functionality were released to the market in the fourth quarter 2011/2012 FY. The flushing system allows the needle less injection port and the medication delivery syringe to be flushed with saline from the IV bag, without the need for additional flushing syringes or ampoules, delivering substantial cost savings and safety. This feature addresses infection control issues associated with conventional burettes. These issues have previously required hospitals to use a higher cost, alternative solution. Medical Australia continues to pursue opportunities in Queensland and New South Wales with trials and evaluations underway. Medical Australia are also active in Europe. Analytica is currently developing market opportunities in the US. Analytica commissioned a production line at an OEM Manufacturer outside Shenzhen, for the purpose of supplying the US market. The commissioned design contains both the AutoStart® and the AutoFlush features, and includes production cost advantages over prior design iterations. Analytica is also currently investigating sales in PNG and South America. Analytica recently filed for a provisional Australian patent for the AutoStart burette, and intends to publish in multiple jurisdictions in coming years under the Patent Cooperation Treaty (PCT). The innovation sets the correct vent and clamp controls for the AutoStart, AutoFlush, and standard burette functions in a single, simple controller. The invention dramatically simplifies use of the device, which has been one of the main customer concerns. The invention also reduces part count and can be implemented on standard burettes as well. Because of the potentially game-changing nature of this invention Analytica's priority is to implement this innovation as 11 Analytica Limited Directors' Report For the Year Ended 30 June 2012 2. Operating results and review of operations for the year continued Review of operations continued soon as possible. Development of the invention concept into a fully-engineered, validated production feature may take 9-12 months. 3. Financial review Financial position The net assets of Analytica Limited have increased by $ 838,529 from 30 June 2011 to $ 1,378,539 at 30 June 2012. This increase is largely due to the following factors:    proceeds from share issues raising $2,979,905 reduction of borrowings accelerating research and development expenditure. Analytica Limited held several successful rights issues for the year, resulting in an additional 148,781,612 ordinary shares issued at a value of $2,979,905, to the 30 June 2012. The capital raising has enabled the company to reduce its 2011 borrowings to nil. The directors believe the company is in a strong and stable financial position to expand and grow its current operations. 4. Other items Significant changes in state of affairs The following significant changes in the state of affairs of the company occurred during the year: i) On 6 July 2011, the company announced that a major clinical trial using Analytica's AutoStart Burette has been successfully completed in Sydney, Australia with Concord Repatriation and General Hospital. ii) Analytica Limited announced on 1 November 2011 that Analytica Limited has been granted an exclusive option to receive the assignment of intellectual property relating to the pelvic floor exercise system. The option will expire on 25 October 2014. The option was exercised by the Company, and the Company will pay part of assignment of the Patent by issuing two tranches of ordinary fully paid shares as follows: the consideration for the o o The first tranche of shares was issued valued at $40,000. The number of shares issued calculated by reference to a 5 day volume weighted average price of the Company’s ordinary shares up to and including the date of exercise of the option (5 Day VWAP). The second tranche of shares is subject to a revenue target of $1 million (net of direct cost of sales) being achieved within three years and six months of the date of exercise of the option. If the revenue target is reached, the Company will issue shares to the value of $80,000 and the number of shares issued will be calculated by reference to the 5 Day VWAP. iii) On 18 October 2011, the company issued 3,000,000 ordinary shares at $0.02 per share. This issue was for payment of corporate advisery to the share issue of $60,000. iv) On 1 December 2011 the company issued 1,250,000 ordinary shares at $0.02 per share. This issue was for payment of market research services of $25,000. v) On 6 December 2011 the company issued 1,786,352 ordinary shares at $0.022392 per share. 12 Analytica Limited Directors' Report For the Year Ended 30 June 2012 4. Other items continued Significant changes in state of affairs continued This issue was for payment of the exercise of the option for intellectual property relating to the pelvic floor exercise system. vi) On 16 December 2011 the company rights issue, resulted in the issue of 94,905,143 ordinary shares at $0.02 per share on the basis of 1 share for every 3 shares held. With 94,905,143 options expired 6 September 2012 exercisable at $0.04 (lapsed); and 94,905,143 options expiring 6 June 2013 exercisable at $0.08. vii) On 22 December 2011 the company issued 4,745,260 ordinary shares at $0.02 per share. This issue was for payment of corporate advisory to the share issue of $94,905.40. viii) On 9 March 2012 the company issued 43,094,857 ordinary shares at $0.02 per share. With 43,094,857 options expiring 6 September 2012 exercisable at $0.04; 43,094,857 options expiring 6 June 2013 exercisable at $0.08. This issue is for capital subscribed by the underwriters to the rights share issue. ix) 33,000,000 $0.05 Options granted to directors in 2008 expired on the 30 June 2012 were not exercised. Dividends paid or recommended No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made. Events after the end of the reporting period On 3 July 2012 Analytica Limited (ASX:ALT) and Medical Australia Limited (ASX:MLA) announced that sales of Tuta-branded burettes equipped with Analytica's patented flush system have commenced in the Australian market. The system is being marketed by Medical Australia under the trademark MediFlush. On 18 July 2012 Analytica (ASX:ALT) announced a successful pilot production run of the Version 2 AutoStart Burette in China. The production was performed by our OEM manufacturing partner near Shenzhen, and is intended for the US market. The pilot production run produced a small number of units intended for validation testing and marketing purposes. This production also provided an opportunity for our manufacturing partner to be audited as a burette manufacturer. Analytica is currently directing sterilisation validation, accelerated aging and product shelf life validation, and ISO 10993 biocompatibility testing. The testing and auditing are being performed by independent third parties and the first full production run will be done in parallel with these tests. Analytica will release the product for trials in the US Market once all validation activities are completed. Analytica is currently in discussions with major distributors and licensees in the US. The 138,000,000 ALTO $0.04 share options expired on 6 September 2012. Except for the above, no other matters or circumstances have arisen since the end of the year which significantly affected or could 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 and results The Directors and management are focused on building the current business through the development and commercialisation of similar businesses and technologies in the medical technology area that can take advantage of our expertise and resources to optimise returns to shareholders. The likely developments in the operations of the consolidated group and the expected results of those operations in 13 Analytica Limited Directors' Report For the Year Ended 30 June 2012 4. Other items continued Future developments and results continued future financial years are as follows: • • • • • • • • • Introduction to the market by Medical Australia of their range of Burettes fitted with our Autoflush device; Appointment of specialist medical device distributors to distribute Analytica’s range of products in the USA; Development of pelvic floor exercise device, interface and reporting and monitoring systems. Development of marketing and sales support systems for the pelvic floor exercise system. Development and implementation of the business plan supporting Naltrexone implants and delivery; Successful manufacture of Naltrexone implants suitable for clinical trials; Clinical trials using Naltrexone implants to treat alcohol and drug addicted patients; Application for North American (FDA) and European (CE Mark) regulatory approval; Continued development of ‘next generation’ products. Environmental issues The company's operations are not regulated by any significant environmental regulations under a law of Commonwealth or of a state or territory of Australia. the Company secretary The following person held the position of company secretary at the end of the year: Tom Rowe (BA LLB (Hons)) has been the company secretary since 23 December 2011. Tom Rowe is a Corporate and Commercial Lawyer with a specialty in listed company secretarial practice. Mr Rowe holds a BA LLB (Hons) from the University of Adelaide and is an Associate of the Chartered Institute of Secretaries. He is the current Principal of Company Matters, a specialist provider of legal, governance and company secretarial services. Previously, he held the position of Legal Counsel and Company Secretary at CSR Ltd. Meetings of directors During the year, 9 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Directors' Meetings Audit Committee Remuneration Committee Number eligible to attend Number attended Number eligible to attend Number attended Number eligible to attend Number attended Dr Michael Monsour Mr. Ross Mangelsdorf Mr. Warren Brooks Mr. David Gooch 9 9 7 2 8 9 7 2 2 2 - - 2 2 - - 2 2 2 - 2 2 2 - 14 Analytica Limited Directors' Report For the Year Ended 30 June 2012 Non-audit services continued Indemnification and insurance of officers and auditors No indemnities have been given or insurance premiums paid, during or since the end of the year, for any person who is or has been an officer or auditor of Analytica Limited. Options At the date of this report, the unissued ordinary shares of Analytica Limited under option are as follows: Grant Date 16 December 2011 9 March 2012 Date of Expiry Exercise Price Number under Option 6 June 2013 6 June 2013 $0.08 $0.08 94,905,143 43,094,857 138,000,000 Option holders do not have any rights to participate in any issues of shares or other interests in the company. For details of options issued to directors and other key management personnel as remuneration, refer to the remuneration report. Options exercised during the year During the year ended 30 June 2012, the following ordinary shares of Analytica Limited were issued on the exercise of options granted. Proceedings on behalf of 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. The company was not a party to any such proceedings during the year. Non-audit services The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit independence for auditors imposed by the services during the year is compatible with the general standard of Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor's independence for the following reasons:   all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. 15 Analytica Limited Directors' Report For the Year Ended 30 June 2012 4. Other items continued Non­audit services continued The following fees were paid or payable to the external auditors for non-audit services provided during the year ended 30 June 2012: Audit of royalty paid to company Auditor's independence declaration 30 June 2012 $ - 30 June 2011 $ 2,100 The lead auditor's independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 30 June 2012 has been received and can be found on page 21 of the financial report. 5. Remuneration report (audited) Remuneration policy The remuneration policy of Analytica Limited has been designed to align key management personnel (KMP) objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting Analytica Limited's financial results. The Board of Analytica Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage Analytica Limited, as well as create goal congruence between directors, executives and shareholders. The Board's policy for determining the nature and amount of remuneration for key management personnel of Analytica Limited is as follows:      The remuneration policy has been developed by the Remuneration Committee and approved by the Board following professional advice from independent external consultants. All key management personnel receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, and performance incentives. Performance incentives are based on predetermined key performance indicators. Incentives paid in the form of options or rights are intended to align the interests of the KMP and company with those of the shareholders. In this regard, key management personnel are prohibited from limiting risk attached to those instruments by use of derivatives or other means. The Remuneration Committee reviews key management personnel packages annually by reference to Analytica Limited’s performance, executive performance and comparable information from industry sectors. The performance of key management personnel is measured against criteria agreed bi-annually with each executive and is based predominantly on the forecast growth of Analytica Limited’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the Committee’s recommendations. Any changes must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth. 16 Analytica Limited Directors' Report For the Year Ended 30 June 2012 5. Remuneration report (audited) continued Remuneration policy continued Key management personnel receive a superannuation guarantee contribution required by the law, which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation. Upon retirement, key management personnel are paid employee benefit entitlements accrued to the date of retirement. Key management personnel are paid a percentage of between 5-10% of their salary in the event of redundancy. Any options not exercised before or on the date of termination will lapse. All remuneration paid to key management personnel is valued at the cost to the company and expensed. The Board’s policy is to remunerate executive Directors at a level which provides the Company with the ability to attract and retain executives with the experience and qualifications appropriate to the development strategy of the Company’s Intellectual Property. The Board's policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Remuneration Committee determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of to approval by shareholders at the Annual General Meeting,the current maximum is $550,000 - which was approved at the 2011 AGM. Previous to this approval the maximum pool was set at $300,000 per annum by shareholders in November 2004. Subsequent to this meeting in November 2004 the Board set individual Directors fees at $50,000 per annum plus statutory superannuation and the chairman’s fee at $75,000 plus statutory superannuation. Based on the current board structure total fees paid on a yearly basis will be $175,000 plus statutory superannuation. fees that can be paid to non-executive directors is subject Entities associated with Mr Ross Mangelsdorf were paid consulting, accounting and taxation services fees during the year of $46,000 (2011: $49,000) There was one additional key management person employed by the Company during the year in addition to the Company’s Directors. Mr Geoff Daly is the Company’s Operations Manager was appointed on the 7 November 2005. Mr Daly has extensive experience in the design of medical devices, prototyping and manufacturing. Mr Daly is employed by the Company under the terms and conditions set out in an employment contract. Due to the size of the company and the nature of its operations, the contract is open- ended and not for a specific time frame. Mr Daly’s contract can be terminated by either party giving notice commensurate with the period of employment, which varies from 1 to 4 weeks. There is no provision in the employment contract for the payment of any termination payments other than accrued statutory entitlements. Key management personnel are also entitled and encouraged to participate in the employee share and option arrangements to align their interests with shareholders' interests. Options granted under these arrangements do not carry dividend or voting rights. Each option is entitled to be converted into one ordinary share and is valued using the Black-Scholes methodology. Key management personnel who are subject to these arrangements are subject to a policy governing the use of external hedging arrangements. Such personnel are prohibited from entering into hedge arrangements, i.e. put options, on unvested shares and options which form part of their remuneration package. Terms of employment signed by such personnel contain details of such restrictions. Relationship between remuneration policy and company performance The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. Two methods have been applied to achieve this aim, the first being a performance-based bonus based on 17 Analytica Limited Directors' Report For the Year Ended 30 June 2012 5. Remuneration report (audited) continued Relationship between remuneration policy and company performance continued key performance indicators, and the second being the issue of options to directors and executives to encourage the The company believes this policy has been effective in increasing alignment of personal and shareholder interests. shareholder wealth over the past 5 years. The following table shows the gross revenue, profits and dividends for the last five years for the company, as well as the share prices at the end of the respective financial years. 2008 $ 2009 $ 2010 $ 2011 $ 2012 $ Revenue Net Profit Share Price at Year-end Dividends Paid Performance conditions linked to remuneration 164,894 290,548 247,617 (828,153) (1,900,560) (1,287,837) 0.026 - 0.022 - 0.023 - 272,878 194,705 (203,176) (2,222,009) 0.017 - 0.030 - The key performance indicators (KPIs) are set annually, with a certain level of consultation with key management personnel to ensure buy-in. The measures are specifically tailored to the area each individual is involved in and has a level of control over. The KPIs target areas the Board believes hold greater potential for Group expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each KPI is based on budgeted figures for Analytica Limited and respective industry standards. Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved. Following the assessment, the KPIs are reviewed by the Remuneration Committee in light of the desired and actual outcomes, and their efficiency is assessed in relation to Analytica Limited's goals and shareholder wealth, before the KPIs are set for the following year. The satisfaction of the performance conditions are based on a review of the audited financial statements of Analytica Limited, as such figures reduce any risk of contention relating to payment eligibility. The Board does not believe that performance conditions should include a comparison with factors external of Analytica Limited at this time. Employment details of members of key management personnel and other executives There was one additional key management person employed by the Company during the year in addition to the Company’s Directors. Mr Geoff Daly is the Company’s Operations Manager and was appointed on 7 November 2005. Mr Daly has extensive experience in the design of medical devices, prototyping and manufacturing. Mr Daly is employed by the Company under the terms and conditions set out in an employment contract. Due to the size of the Company and the nature of its operations, the contract is open-ended and not for a specified time frame. Mr Daly’s contract may be terminated by either party giving notice commensurate with his period of employment, which varies from 1 to 4 weeks. There is no provision in the employment contract for the payment of any termination payments other than accrued statutory entitlements. Company executive fees are not linked to the performance of the Company. However, to align executives’ interests with shareholder interests, the executives are encouraged to hold shares in the Company. 18 Analytica Limited Directors' Report For the Year Ended 30 June 2012 5. Remuneration report (audited) continued Remuneration details for the year ended 30 June 2012 The following table of benefits and payment details, in respect to the year, the components of remuneration for each member of the key management personnel of Analytica Limited: Table of benefits and payments 2012 Directors Dr Michael Monsour Mr. Ross Mangelsdorf Mr. Warren Brooks Mr. David Gooch KMP Geoff Daly 2011 Directors Dr Michael Monsour Mr. Ross Mangelsdorf Mr. David Gooch KMP Mr. Geoff Daly short term cash salary fees superannuation non monetary other short-term post employment pension and superannuation other post employment long term employee benefits termination share based payments options and rights shares and units cash-settled $ $ $ $ $ $ $ $ $ $ $ 75,000 50,000 46,795 4,167 210,000 385,962 6,750 4,500 4,212 375 18,900 34,737 - - - - - - - - - - - - - - - - - - short term cash salary fees superannuation non monetary other short-term post employment pension and superannuation other post employment $ $ $ $ $ $ 75,000 50,000 50,000 160,000 335,000 6,750 4,500 4,500 14,400 30,150 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 81,750 54,500 51,007 4,542 228,900 420,699 long term employee benefits termination share based payments options and rights shares and units cash-settled $ $ $ $ $ - - - - - - - - - - - - - - - - - - - - - - - - - 81,750 54,500 54,500 174,400 365,150 19 Bentleys THINKING AHEAD AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 3O7C OF THE CORPORATIONS ACT 2OO1 TO THE DIRECTORS OF ANALYTICA LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2012there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. ç.-{kr5 Bentleys Brisbane PartnershiP Chartered Accountants Douglas Partner Brisbane 28 September 2012 Kreston lnternational ts-_ ÀrbffidHFûtddltu Íhememberfirmsof AmemberofBentleys,anassocrationofindependentaccountingfirmslnAustlal¡a the Bentleys assocratron are affliated only and not rn partnership Lrabìlity limited by a scheme approved under Professronal Standards Leglslation Accountants Auclitors Advisors Analytica Limited Statement of Comprehensive Income For the Year Ended 30 June 2012 Sales & grant revenue Other income Administrative expenses Capital raising costs Depreciation, amortisation and impairments Fair value adjustment Finance costs Marketing expenses Occupancy costs Sundry expenses Research and development Loss before income taxes Income tax expense Loss for the year Other comprehensive income: Net gain on revaluation of land and buildings Changes in fair value of available-for-sale financial assets Share of other comprehensive income of associates and joint ventures Other comprehensive income for the year, net of tax Note 2 2 3 30 June 2012 $ 162,452 32,254 (492,040) (289,130) (97,931) (595,486) (18,755) - (2,600) (10,844) (909,929) (2,222,009) - 30 June 2011 $ 267,549 5,330 (424,190) - (12,844) 381,320 (5,333) (26,047) (600) (13,776) (374,584) (203,175) - (2,222,009) (203,175) - - - - - - - - Total comprehensive income for the year (2,222,009) (203,176) Earnings per share Basic/diluted earnings per share (cents) (0.0040) (0.0005) The accompanying notes form part of these financial statements. 22 4 16 Analytica Limited Statement of Financial Position As At 30 June 2012 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other financial assets Property, plant and equipment Intangible assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings Short-term provisions Employee benefits TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Employee benefits TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained earnings TOTAL EQUITY 30 June 30 June Note 2012 $ 2011 $ 5 6 7 8 9 10 11 12 13 14 14 1,213,820 182,029 - 1,395,849 62,683 8,937 18,943 90,563 1,486,412 98,588 (65) 26,098 48,116 172,737 15,766 15,766 188,503 1,297,909 1,342 293,428 16,238 311,008 658,169 20,169 - 678,338 989,346 113,306 268,700 24,044 35,099 441,149 8,185 8,185 449,334 540,012 15 17 83,939,012 2,630,508 (85,271,611) 80,959,107 2,630,508 (83,049,603) 1,297,909 1,297,909 540,012 540,012 The accompanying notes form part of these financial statements. 23 Analytica Limited Statement of Changes in Equity For the Year Ended 30 June 2012 30 June 2012 Ordinary Shares Retained Earnings Note $ $ Option Reserve $ Balance at 1 July 2011 80,959,107 (83,049,603) 2,630,508 Profit or loss attributable to members of the parent entity - (2,222,009) Transactions with owners in their capacity as owners Shares issued during the year Rights issue Sub-total 219,905 2,760,000 - - 2,979,905 (2,222,009) - - - - Balance at 30 June 2012 83,939,012 (85,271,612) 2,630,508 30 June 2011 Balance at 1 July 2010 80,959,107 (82,846,396) 2,630,508 Ordinary Shares Retained Earnings Note $ $ Option Reserve $ Profit or loss attributable to members of the parent entity Elimination of outside equity interest following deregistration of subsidiaries Transactions with owners in their capacity as owners Sub-total - - - (203,176) (31) (203,176) - - - Balance at 30 June 2011 80,959,107 (83,049,603) 2,630,508 Non-controlling Interests $ - - - - - - Non-controlling Interests $ 5 - (5) - - Total $ 540,012 (2,222,009) 219,905 2,760,000 757,896 1,297,908 Total $ 743,224 (203,176) (36) (203,212) 540,012 The accompanying notes form part of these financial statements. 24 Analytica Limited Statement of Cash Flows For the Year Ended 30 June 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Receipt from grants Interest received Payments to suppliers and employees Finance costs Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment Net cash used by investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares Repayment of directors' loan accounts Proceeds from directors' loan accounts Net cash used by financing activities Net increase (decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year 5 30 June 30 June Note 2012 $ 2011 $ 5,121 261,449 32,013 (1,763,089) (18,755) 33,284 - 5,330 (717,090) (5,993) 26 (1,483,261) (684,469) (15,401) (15,401) (2,272) (2,272) 2,979,905 (268,790) - 2,711,115 1,212,453 1,342 1,213,795 - - 268,700 268,700 (418,041) 419,383 1,342 The accompanying notes form part of these financial statements. 25 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 This annual financial report includes the financial statements and notes of Analytica Limited. The annual financial statements were authorised for issue by the Board of Directors on the date of the director’s report. Analytica Limited is a for profit company domiciled in Australia. 1 Summary of Significant Accounting Policies (a) Basis of preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (b) Going concern The financial report has been prepared on a going concern basis. This basis has been adopted as the company has sufficient cash at 30 June 2012 to conduct its affairs due to the capital raised from shares issued in 2012, and received a guarantee of continuing financial support from Dr Monsour to allow the company to meet its liabilities and it is the belief that such financial support will continue to be made available. The company’s forward cash flow projections currently indicate that the company will be required to raise additional funds to meet forecast needs. The Directors have considered this position and have assessed available funding options and believe should funding be required that sufficient funds could be sourced to satisfy creditors as and when they fall due. The company also expects to generate royalty income during the 2013 year from the sales of its AutoStart® Burette and/or AutoFlush enabled Burette. Whilst not expected to generate positive cash flows for 30 June 2013, royalty revenues generated will assist the company in meeting its ongoing working capital requirements. However, if adequate capital raising is not achieved the company may be unable to continue as a going concern. No adjustments have been made relating to the recoverability and classification of recorded assets amounts and classification of liabilities that might be necessary should the company not continue as a going concern. (c) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The accompanying notes form part of these financial statements. 26 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (d) Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. In the periods when the freehold land and buildings are not subject to an independent valuation, the Directors conduct Directors valuations to ensure the land and buildings carrying amount is not materially different to the fair value. Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in shareholders' equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the consolidated income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the consolidated income statement and depreciation based on the asset's original cost is transferred from the revaluation surplus to retained earnings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Land and buildings are measured at cost less accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated income statement during the financial period in which they are incurred. Plant and equipment are measured on the cost basis. Cost includes expenditure that is directly attributable to the asset. Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, life to the company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Land is not depreciated. is depreciated on a reducing balance basis over the asset's useful The accompanying notes form part of these financial statements. 27 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (d) Property, plant and equipment continued The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Plant and Equipment Office Equipment Computer Equipment Depreciation Rate 20% 33.3% to 40% 33.3% The assets' residual values, depreciation methods 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 and losses are included in the income statement. (e) Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is the equivalent to the date that the company commits itself to either the purchase or sale of 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 transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in arm's length transaction. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is calculated as: (a) (b) (c) (d) the amount at which the financial asset or financial liability is measured at initial recognition; less principal repayments; plus or minus the cumulative amortisation of recognised and the maturity amount calculated using the effective interest method; and the difference, if any, between the amount initially less any reduction for impairment. 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 The accompanying notes form part of these financial statements. 28 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (e) Financial instruments continued predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. The classification of financial instruments depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and at the end of each reporting period for held-to-maturity assets. 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 financial assets is avoid an accounting mismatch or to enable performance evaluation where a group of 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 value 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 . Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. 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. Held-to-maturity investments are included in non-current assets, except for those which are expected to be realised within 12 months after the end of the reporting period, which will be classified as current assets. If during the period the company sold or reclassified more than an insignificant amount of the held-to-maturity investments before maturity, the entire held-to-maturity investments category would be tainted and reclassified as available-for-sale. The company did not hold any held-to-maturity investments in the current or comparative financial year. (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be 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. Available-for-sale financial assets are included in non-current assets, except for those which are expected to be realised within 12 months after the end of the reporting period. (v) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. The accompanying notes form part of these financial statements. 29 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (e) Financial instruments continued Fees payable on the establishment of loan facilities are recognised as transaction costs of the loan. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models. Impairment Objective evidence that a financial asset is impaired includes default by a debtor, evidence that the debtor is likely to enter bankruptcy or adverse economic conditions in the stock exchange. At the end of each reporting period, the company assesses whether there is objective evidence that a financial asset has been impaired through the occurrence of a loss event. In the case of available-for-sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to indicate that an impairment has arisen. Where a subsequent event causes the amount of the impairment loss to decrease (e.g. payment received), the reduction in the allowance account (provision for impairment of receivables) is taken through profit and loss. However, any reversal in the value of an impaired available for sale asset is taken through other comprehensive income rather than profit and loss. Impairment losses are recognised through an allowance account for loans and receivables in the income statement. Financial guarantees Where material, financial guarantees issued which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as financial liabilities at fair value on initial recognition. The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118 'Revenue'.' The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probability has been based on:    the likelihood of the guaranteed party defaulting in a period; the proportion of defaulting; and the exposure that is not expected to be recovered due to the guaranteed party the maximum loss exposed if the guaranteed party were to default. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options for immediate are recognised as a deduction from equity, net of any tax effects. Preference share capital is classified as equity if it is non-redeemable or redeemable only at the company’s option, and any dividends are discretionary. The accompanying notes form part of these financial statements. 30 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued Preference share capital is classified as financial liability if it is redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. When available-for-sale investments are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss. (f) Impairment of non-financial 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 the consideration of external and internal sources of information and dividends received from subsidiaries, associates or jointly controlled entities 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 value. Value in use is calculated by discounting the estimated future cash flows of the asset or cash-generating unit (CGU) at a pre-tax discount rate reflecting the specific risks in the asset / CGU. Any excess of the asset's carrying value over its recoverable amount is expensed to the income statement. 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. Impairment losses recognised in respect of CGU's are allocated first to reduce the carrying amount of goodwill to nil and then to the other assets in the unit in proportion to their carrying amount. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Assets, other than goodwill that have an allocated impairment loss are reviewed for reversal indicators at the end of each reporting period. After recognition of an impairment loss, the amortisation charge for the asset is adjusted in future periods to allocate the asset's revised carrying amount on a systematic basis over its remaining useful life. Impairment losses are recognised as an expense immediately, unless the relevant asset is property, plant and equipment held at fair value (other than investment property carried at a revalued amount) in which case the impairment loss is treated as a revaluation decrease as described in the accounting policy for property, plant and equipment. (g) Intangibles Goodwill Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of: i) ii) the consideration transferred; any non-controlling interest; and The accompanying notes form part of these financial statements. 31 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued iii) the acquisition date fair value of any previously held equity interest; over the acquisition date fair value of net identifiable assets acquired. The value of goodwill recognised on acquisition of each subsidiary in which the company holds less than a 100% interest will depend on the method adopted in measuring the aforementioned non-controlling interest. The company can elect to measure the non-controlling interest in the acquiree either at fair value ('full goodwill the subsidiary's identifiable net assets method') or at ('proportionate interest method'). The company determines which method to adopt for each acquisition. the non-controlling interest's proportionate share of Under the 'full goodwill method', the fair values of the non-controlling interests are determined using valuation techniques which make the maximum use of market information where available. Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where they investment has been equity accounted, any credit reserve balances are recycled to the statement of comprehensive income. In determining the net identifiable assets acquired, contingent liabilities of the acquiree are included to the extent to which they represent a present obligation and can be measured reliably. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. is not amortised but is tested for impairment annually and is allocated to the company's cash Goodwill generating units or groups of cash generating units, which represent the lowest level at which goodwill is monitored but where such level is not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. Patents, trademarks and licences Patents, trademarks and licences are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful life ranging from 3 to 12 years. Research and development Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognised in profit or loss as incurred. Capitalised development costs are measured at cost impairment losses. less accumulated amortisation and accumulated Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project which is 12 years. Amortisation Amortisation is based on the cost of an asset less its residual value. The accompanying notes form part of these financial statements. 32 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortisation methods, useful appropriate. (h) Cash and cash equivalents lives and residual values are reviewed at each reporting date and adjusted if Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less which are convertible to a known amount of cash and subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. (i) Employee benefits Provision is made for the company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. 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. 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. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Equity-settled compensation The company operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black-Scholes pricing model which incorporates all market vesting conditions. The amount to be expensed is determined by reference to the fair value of the options or shares granted, this expense takes in account any market performance conditions and the impact of any non-vesting conditions but ignores the effect of any service and non-market performance vesting conditions. Non-market vesting conditions are taken into account when considering the number of options expected to vest. At the end of each reporting period, the company revises its estimate of the number of options which are expected to vest based on the non-market vesting conditions. Revisions to the prior period estimate are recognised in profit or loss and equity. (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 at the present value of management's best estimate of the outflow required to settle the obligation at the end of the reporting period. The discount rate used is a pre-tax rate that 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 unwinding of the discount is taken to finance costs in the income statement. (k) Trade and other payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and The accompanying notes form part of these financial statements. 33 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued services received by the company during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. (l) Earnings per share Analytica Limited presents basic and diluted earnings per share information for its ordinary shares. Basic earnings per share is calculated by dividing the profit attributable to owners of the company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share adjusts the 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. (m) Income tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. 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 as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable 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, based on tax rates enacted or substantively enacted at the end of the reporting year. 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. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or The accompanying notes form part of these financial statements. 34 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued liabilities are expected to be recovered or settled. (n) Revenue and other income The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of Analytica Limited's activities as discussed below. Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Sale of goods Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Interest revenue Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets is the rate inherent in the instrument. Government Grants Government grants are recognised at fair value where there is a reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight line basis. All revenue is stated net of the amount of goods and services tax (GST). (o) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (p) 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. The accompanying notes form part of these financial statements. 35 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (q) Foreign currency transactions and balances Functional and presentation currency The functional currency of each of Analytica Limited's entities is measured using the currency of the primary economic environment in which that entity operates. The financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency. Transaction and balances the transaction. Foreign currency monetary items are translated at Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement. (r) Critical accounting estimates and judgments The directors evaluate estimates and judgments 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 judgments - provision for impairment of receivables The value of the provision for impairment of receivables is estimated by considering the ageing of receivables, communication with the debtors and prior history. (s) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current year. When the company applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period will be presented. The accompanying notes form part of these financial statements. 36 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (u) New accounting standards for application in future periods The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The company has decided against early adoption of these Standards . The following table summarises those future requirements, and their impact on the company: Standard name Effective date for entity Requirements AASB 9 Financial Instruments and amending standards AASB 2009-11 / AASB 2010-7 AASB 2010-8 Amendment to Australian Accounting Standards – Deferred tax: Recovery of underlying assets AASB 2011-2 Amendments to Australian Accounting Standards arising from Trans-Tasman convergence – Reduced Disclosure Requirements 30 June 2016 - Changes to the classification and measurement requirements for financial assets and financial liabilities. - New rules relating to derecognition of financial instruments. 30 June 2013 Adds a presumption to AASB 112 that the recovery of the carrying amount of an investment property at fair value will be through sale. 30 June 2014 Highlights the disclosures not FOR RDR ENTITIES required in AASB 1054 for entities applying the RDR. AASB 2011-3 Amendments to Australian Accounting Standards – Orderly Adoption of Changes to ABS GFS Manual and Related Amendments 30 June 2013 Standard is applicable for whole of government and general government financial statements only. AASB 2011 provides details of changes in accounting treatment due to the Government Finance Statistics manual. AASB 13 Fair Value Measurement. 30 June 2014 AASB 13 provides a precise AASB 2011-8 - Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, 2009-11, 2010-7, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132] definition of fair value and a single source of fair value measurement and disclosure requirements for use across Accounting Standards but does not change when fair value is required or permitted. There are a number of additional disclosure requirements. Impact The impact of AASB 9 has not yet been determined as the entire standard has not been released No impact expected. Little impact since the disclosures are not included in the RDR financials. FOR NON RDR ENTITIES The entity is not adopting the RDR and therefore this standard is not relevant. Standard is not applicable and therefore there will be no impact on adoption. Fair value estimates currently made by the entity will be revised and potential changes to reported values may be required. The entity has not yet determined the magnitude of any changes which may be needed. Some additional disclosures will be needed. 37 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (u) New accounting standards for application in future periods continued AASB 2011 – 4 - Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements [AASB 124] 30 June 2014 Remove individual key management personnel disclosure requirements (i.e. components of remuneration) for disclosing entities. The entity is not a disclosing entity and therefore this will have no impact. OR Since the entity is a disclosing entity, the KMP remuneration note in the financial statements will not include individual components of remuneration. Since the entity does not comply with the Reduced Disclosure Regime there is no impact on the adoption of this standard. OR The entity will cease preparation of consolidated financial statements under this standard. The impact of this standard is expected to be minimal. 30 June 2014 This Standard extends the relief from consolidation, the equity method and proportionate consolidation by removing the requirement for the consolidated financial statements prepared by the ultimate or any intermediate parent entity to be IFRS compliant, provided that the parent entity, investor or venturer and the ultimate or intermediate parent entity comply with Australian Accounting Standards or Australian Accounting Standards – Reduced Disclosure Requirements. 30 June 2014 This standard provides many consequential changes due to the release of the new consolidation and joint venture standards. AASB 2011 – 6 – Amendments to Australian Accounting Standards – Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements [AASB 127, AASB 128 & AASB 131] AASB 2011-7 – Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards [AASB 1, 2, 3, 5, 7, 9, 2009-11, 101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 & 1038 and Interpretations 5, 9, 16 & 17] AASB 2011-9 - Amendments to Australian Accounting Standards - Presentation of Items of Other Comprehensive Income. 30 June 2013 Entities will be required to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The items shown in other comprehensive income will be separated into two categories. 38 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 1 Summary of Significant Accounting Policies continued (u) New accounting standards for application in future periods continued AASB 119 Employee Benefits (September 2011) 30 June 2014 The main changes in this standard relate to the accounting for defined benefit plans and are as follows: AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) and AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements - elimination of the option to defer the recognition of gains and losses (the 'corridor method'); - requiring remeasurements to be presented in other comprehensive income; and - enhancing the disclosure requirements. AASB 1053 30 June 2014 This standard allows certain entities to reduce disclosures. AASB 2010-10 30 June 2014 Makes amendments to AASB 1 Since the entity does not have a defined benefit plan, the adoption of these standards will not have any impact. OR Where the entity has a defined benefit plan, the impact of this standard should be calculated and disclosed. Analytica Limited is not able to apply this standard or the impact of this standard has not yet been determined as the entity has a choice on whether to apply No impact since the entity is not a first-time adopter of IFRS. 2 Revenue and Other Income Revenue from continuing operations Sales revenue - sale of goods Other revenue - interest received - operating grants - profit on sale of equipment Total Revenue 30 June 30 June Note 2012 $ 2011 $ 4,880 6,100 32,013 157,572 241 189,826 194,706 5,330 261,449 - 266,779 272,879 39 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 30 June 30 June Note 2012 $ 2011 $ 3 Result for the Year The result for the year includes the following specific expenses Costs of sale 16,238 5,306 Interest expense on financial liabilities at amortised cost - external - related entities Total finance costs Administrative expenses consists of the following significant expenses: Administration - general Compliance costs Employee costs Depreciation of property plant and equipment Amortisation Amortisation of purchased intellectual property Total depreciation and amortisation Remuneration of auditor auditing or reviewing the financial report other services 241 18,514 18,755 76,486 220,310 195,244 492,040 6,873 1,058 90,000 97,931 5,333 - 5,333 50,363 175,066 198,761 424,190 12,844 - - 12,844 35,004 - 35,004 35,004 9,100 44,104 40 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 4 Income Tax Expense (a) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax expense as follows: 30 June 30 June 2012 $ 2011 $ Prima facie tax payable on profit from ordinary activities before income tax at 30% (2011: 30%) (666,602) (60,953) Add: Tax effect of: - other non-allowable items - future benefits not recognised Less: Tax effect of: - movement in provisions - other non-assessable items - other deductible items Income tax expense 5 Cash and Cash Equivalents Cash at bank and in hand Short-term bank deposits Reconciliation of cash 82,829 747,148 163,375 6,796 100,354 56,225 51,206 172,226 162,479 3,363 78,435 80,681 163,375 162,479 - - 86 1,213,734 1,213,820 1,342 - 1,342 Cash at the end of the year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Bank overdrafts Balance as per statement of cash flows 11 1,213,820 (25) 1,213,795 1,342 - 1,342 41 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 6 Trade and Other Receivables CURRENT Prepayments GST receivable R & D tax concession Total current trade and other receivables Credit risk 30 June 30 June Note 2012 $ 2011 $ 19,666 4,791 157,572 182,029 22,733 9,245 261,449 293,427 The company has no significant concentration of credit risk with respect to any single counterparty or group of counterparties. The class of assets described as 'trade and other receivables' is considered to be the main source of credit risk related to the company. 7 Inventories CURRENT At cost: Finished goods - - 16,238 16,238 Write downs of inventories to net realisable value during the year were $ NIL (2011: $ NIL). 8 Other Financial Assets Associated companies - CBio Limited 62,683 658,169 Held for trading financial assets Listed shares at cost Fair value adjustment Total other financial assets 522,356 (459,673) 62,683 522,356 135,812 658,168 CBio Limited (CBZ) listed on the Australian Securities Exchange in 2010. Analytica Limited holds 1,044,712 ordinary shares with a market value at 30 June 2012 of $62,683 (2011: $658,169). 42 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 9 Property, Plant and Equipment Plant and equipment At cost Accumulated depreciation Total plant and equipment Office equipment At cost Accumulated depreciation Total office equipment Computer equipment At cost Accumulated depreciation Total computer equipment Total property, plant and equipment (a) Movements in Carrying Amounts 30 June 30 June 2012 $ 2011 $ 17,036 (10,849) 31,493 (13,224) 6,187 18,269 6,485 (5,978) 507 44,681 (42,438) 2,243 8,937 6,485 (5,233) 1,252 40,604 (39,957) 647 20,168 Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current year: Plant and Equipment Office Equipment Computer Equipment $ $ $ Total $ Balance at 30 June 2012 Balance at the beginning of year Additions Disposals - written down value Depreciation expense Balance at 30 June 2012 Balance at 30 June 2011 Balance at the beginning of year Additions Depreciation expense Balance at 30 June 2011 18,269 - (8,434) (3,648) 6,187 1,252 - - (745) 507 647 4,077 - (2,481) 2,243 20,168 4,077 (8,434) (6,874) 8,937 Plant and Equipment Office Equipment Computer Equipment $ $ $ Total $ 24,568 - (6,299) 18,269 639 1,207 (594) 1,252 5,533 1,065 (5,951) 647 30,740 2,272 (12,844) 20,168 43 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 10 Intangible Assets Patents, trademarks and other rights Cost Accumulated amortisation and impairment Licenses Cost Accumulated amortisation and impairment Net carrying value Total Intangibles 11 Trade and Other Payables CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses Other payables 12 Borrowings CURRENT Bank overdraft Related party payables Total current borrowings 30 June 30 June 2012 $ 2011 $ 235,000 (235,000) - 20,000 (1,057) 18,943 18,943 145,000 (145,000) - - - - - 53,130 9,432 36,027 98,589 91,837 7,752 13,717 113,306 25 (90) (65) - 268,700 268,700 (a) Bank loan facility Balance used at reporting date Borrowings balance at 30 June 2012 was $(90) (2011: $268,700). Balance unused at reporting date Director loan from Dr Michael Monsour represents an unsecured loan from MPAMM Pty Ltd, a related entity associated with Dr Monsour. The loan is repayable on demand and bears interest at 11.04% per annum (annual variable rate per Westpac Banking Corporation for business loans, plus 2%). The interest charged for the year ended 30 June 2012 amounted to $18,514 (2011:$5,333). The maximum amount available under the loan agreement is $400,000 therefore 100% of the facility was undrawn at 30 June 2012. 44 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 13 Provisions CURRENT Provision - audit Provisions - accounting and taxation services Current Opening balance 1 July 2011 Additional provisions Provisions used Balance at 30 June 2012 14 Employee Benefits CURRENT Provision for annual leave NON-CURRENT Provision for long service leave Current Opening balance 1 July 2011 Additional provisions Provisions used Balance at 30 June 2012 Non-Current Opening balance 1 July 2011 Additional provisions Balance at 30 June 2012 30 June 30 June 2012 $ 2011 $ 18,108 7,990 26,098 23,054 990 24,044 Provision for audit fees Provision for taxation $ $ Total $ 23,054 35,004 (39,950) 18,108 990 7,000 - 7,990 24,044 42,004 (39,950) 26,098 30 June 30 June 2012 $ 2011 $ 48,116 35,099 15,766 63,882 8,185 43,284 Provision for annual leave Provision for long service leave $ $ 35,099 20,087 (7,070) 48,116 - - - - - - - 8,150 7,581 15,766 45 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 15 Issued Capital 559,885,794 (2011: 411,104,182) Fully paid ordinary shares 138,000,000 (2011: 0) ALTO Options 138,000,000 (2011: 0) ALTOA Options 0 (2011: 33,000,000) Unlisted Options Total (a) Ordinary shares At the beginning of the reporting period Shares issued during the year Share issue 18 October 2011 Share issue 1 December 2011 Share issue 6 December 2011 Rights issue 16 December 2011 Share issue 22 December 2011 Rights issue 9 March 2012 At the end of the reporting period 30 June 30 June 2012 $ 83,939,012 - - - 2011 $ 80,959,107 - - - 83,939,012 80,959,107 30 June 30 June 2012 No. 2011 No. 411,104,182 411,104,182 3,000,000 1,250,000 1,786,352 94,905,143 4,745,260 43,094,857 - - - - - - 559,885,794 411,104,182 The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the company. On a show of hands at meetings of the company, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote. The company's authorised capital is 559,885,794. The company does not have par value in respect of its shares. On 16 December 2011 the company issued 94,905,143 ordinary shares at $0.02 for every 3 shares held. On 9 March 2012 the company issued 43,094,857 ordinary shares at $0.02. This issue was for capital subscribed by the underwriters to the right share issue. (b) Capital Management Management controls the capital of Analytica Limited in order to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Capital consists of share capital, non-redeemable preference shares, retained profit and non-controlling interests of Analytica Limited. There are no externally imposed capital requirements. Analytica Limited monitors capital through the gearing ratio, which is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is defined as equity per the statement of financial position plus net debt. The target for Analytica Limited’s gearing ratio is between 0% and 50% . The gearing ratios at the current and prior years are shown below: There have been no changes in the strategy adopted by management during the year. 46 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 15 Issued Capital continued (b) Capital Management continued The gearing ratios for the year ended 30 June 2012 and 30 June 2011 are as follows: Borrowings Trade and other payables Retirement benefit obligations Short-term provisions Less Cash and cash equivalents Net debt Total equity Total capital Gearing ratio (c) Share Options 30 June 30 June Note 2012 $ 2011 $ 5 (65) 98,589 48,116 26,098 (1,213,820) (1,041,082) 1,378,540 337,458 (309)% 268,700 113,306 35,099 24,044 (1,342) 439,807 540,012 979,819 45% i) For information relating to the Analytical Limited employee option plan, including details of options issued, exercised and laspsed during the financial year; and the options outstanding at year end, refer to Note 27 Share Based Payments. ii) For information relating to share options issued to key management personnel during the financial year, refer to Note 20 Interests of Key Management Personnel. 16 Earnings per Share Basic/Diluted loss per share (cents per share) (a) Reconciliation of earnings to profit or loss from continuing operations Net loss Earnings used to calculate basic EPS from continuing operations (b) Earnings used to calculate overall earnings per share Earnings used to calculate overall earnings per share 30 June 30 June 2012 $ (0.0040) 2011 $ (0.0005) (2,222,009) (203,176) (2,222,009) (203,176) (2,222,009) (203,176) (c) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 30 June 30 June 2012 No. 2011 No. Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 559,885,794 411,104,182 47 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 17 Reserves Option reserve Opening balance Total reserves (a) Share option reserve 30 June 30 June 2012 $ 2011 $ 2,630,508 2,630,508 2,630,508 2,630,508 This reserve records the cumulative value of employee service received for the issue of share options. When the option is exercised the amount in the share option reserve is transferred to share capital. 18 Financial Risk Management The group's financial instruments consist mainly of cash deposits with banks, accounts receivable and investments in convertible notes. Financial liabilities consist of accounts payable and convertible notes issued by the group. The main purpose of financial instruments is to raise finance and manage capital requirements for group operations. The Board of Directors meets on a regular basis to analyse financial risk exposure and to evaluate financial management strategies in the context of the most recent economic conditions and forecasts. The board's overall risk strategy seeks targets, whilst minimising potential adverse effects on financial to assist performance. the Company in meeting its financial The main risks the Company is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk. An outline of these risks and related risk management policies are summarised below. The totals for each category of financial accounting policies to these financial statements, are as follows: instruments, measured in accordance with AASB 139 as detailed in the Financial Assets Cash and cash equivalents Financial assets at fair value through profit or loss - Listed shares in related entities: CBio Limited Trade and other receivables Total financial assets Financial Liabilities Financial liabilities at amortised cost Trade and other payables Borrowings Total financial liabilities Financial risk management policies 1,213,820 1,342 62,683 162,364 1,438,867 98,589 (65) 98,524 658,169 270,695 930,206 113,305 268,700 382,005 The Board of Directors has overall responsibility for the establishment of Analytica Limited’s financial risk management framework. This includes the development of policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk and the use of derivatives. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Analytica Limited’s activities. 48 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 18 Financial Risk Management continued Financial risk management policies continued The day-to-day risk management is carried out by Analytica Limited’s finance function under policies and objectives which have been approved by the Board of Directors. The Chief Financial Officer has been delegated the authority for designing and implementing processes which follow the objectives and policies. This includes monitoring the levels of exposure to interest rate and foreign exchange rate risk and assessment of market forecasts for interest rate and foreign exchange movements. The Board of Directors receives regular reports which provide details of the effectiveness of the processes and policies in place. Analytica Limited does not actively engage in the trading of financial assets for speculative purposes nor does it write options. Mitigation strategies for specific risks faced are described below: (a) Credit risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for doubtful debts, as disclosed in the Statement of Financial Position and notes to the financial report. There are no trading terms in relation to sundry receivables. No collateral is held as security over any financial assets. There are no past due financial assets at 30 June 2012. There were no impaired assets at 30 June 2012. (b) Liquidity risk Liquidity risk arises from the possibility that Analytica Limited might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The company manages this risk through the following mechanisms:         preparing forward-looking cash flow analysis in relation to its operational, investing and financial activities which are monitored on a monthly basis; using derivatives that are only traded in highly liquid markets; monitoring undrawn credit facilities; obtaining funding from a variety of sources; maintaining a reputable credit profile; managing credit risk related to financial assets; only investing surplus cash with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets. Typically, Analytica Limited ensures that expenses for a period of 60 days. it has sufficient cash on demand to meet expected operational 49 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 18 Financial Risk Management continued The table below reflect an undiscounted contractual maturity analysis for financial liabilities. Financial guarantee liabilities are treated as payable on demand since Analytica Limited has no control over the timing of any potential settlement of the liabilities. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management's expectations that banking facilities will be rolled forward. The amounts disclosed in the table are the undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the statement of financial position due to the effect of discounting. Financial liability maturity analysis - Non-derivative Within 1 Year 1 to 5 Years Over 5 Years Total 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ Financial liabilities due for payment Bank overdrafts and loans 25 - Trade and other payables (excluding estimated annual leave) Borrowings (related parties) Total contractual outflows 98,589 (90) 113,306 268,700 98,524 382,006 Financial assets – cash flows realisable Cash and cash equivalents 1,213,820 1,342 Trade and other receivables Held for trading Total anticipated inflows Net (outflow) infow on financial instruments 162,363 270,695 62,683 658,169 1,438,866 930,206 1,340,342 548,199 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25 - 98,589 (90) 113,306 268,700 98,524 382,006 - 1,213,820 1,342 - - 162,363 270,695 62,683 658,169 - 1,438,866 930,206 - 1,340,342 548,199 The timing of expected outflows is not expected to be materially different from contracted cashflows. (c) Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. i) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period, whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. 50 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 18 Financial Risk Management continued Interest rate risk sensitivity analysis The following table illustrates sensitivities to the entity’s exposures to changes in interest rates. The table indicates the impact on how profit and equity values reported at balance date would have been affected by changes in the relevant risk variable that management considers to be reasonable possible. These sensitivities assume that the movement in a particular variable is independent of other variables. At 30 June 2012, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows: Change in profit - Increase in interest rate by 2% - Decrease in interest rate by 2% Change in equity - Increase in interest rate by 2% - Decrease in interest rate by 2% Net fair values 30 June 30 June 2012 $ 24,276 (24,276) 24,276 (24,276) 2011 $ (5,347) 5,347 (5,347) 5,347 The net fair values of financial assets and financial liabilities approximate their carrying value. Except for the company’s investment in CBio shares, no financial assets and financial liabilities of the group are readily traded on organised markets. Embedded derivatives relating to convertible notes are valued using discounted cash flow models based on interest rates existing at reporting date for similar types of convertible instruments. Loans and receivables due and receivable beyond twelve months are carried at their present value which approximates net fair value. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the Statement of Financial Position and in the notes to and forming part of the financial report. Financial instruments measured at fair value The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements between those whose fair value is based on. The fair value hierarchy consists of the following levels:    quoted prices in active markets for identical assets or liabilities (Level 1); 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 inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). 51 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 18 Financial Risk Management continued 2012 Financial assets: Financial assets at fair value: - listed investments 2011 Financial assets: Financial assets at fair value: - listed investments Level 1 Level 2 Level 3 Total $ $ $ $ 62,683 658,169 - - - - 62,683 658,169 Included within Level 1 of the hierarchy are listed investments which are valued based on quoted price. This is the basis of Fair Value adjustment for CBio shares the only investment of the Company (note 8). There were no transfers between levels during the current or prior periods. 19 Operating Segments Segment information Identification of reportable segments The company has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The company is managed primarily on the basis of product category and service offerings as the diversification of Analytica Limited's operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:      the products sold and/or services provided by the segment; the manufacturing process; the type or class of customer for the products or services; the distribution method; and any external regulatory requirements. Performance is measured based on segment profit before income tax as included in the internal financial reports. 52 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 19 Operating Segments continued Types of products and services by reportable segment i) Medical Devices - AutoStart Burette - Perineometer Analytica's major released product is the AutoStart Burette. The AutoStart Burette infusion set automatically restarts the delivery of liquid or drug. intravenous fluid once the burette has dispensed its predetermined amount of Automatic restart of the IV fluid, once the drug is dispensed can provide enormous savings in nursing time during and following a medication event, and reduces the risk of blood clots forming that may obstruct the intravenous canula. Analytica has licensed the AutoStart Burette and other burette intellectual property to Medical Australia (Formerly BMDI Tuta) who are presently working to take these products into a number of markets worldwide and negotiate supply for some major multinationals companies. The AutoStart Burette has a TGA ARTG entry, CE-marking, and USFDA 510(k) 'approval'. Analytica is also developing an innovative Perineometer device branded PeriCoach to assist women and their clinicians in treatment of Stress Urinary Incontinence. ii) Pharmaceuticals In 2007, Analytica acquired a Naltrexone implant development company, Recovery Clinics Pty Ltd. The purchase represents a significant milestone and one that will play a major role in shaping Analytica's future. Naltrexone binds to the dopamine receptors and blocks the effects of alcohol and opiates (e.g. heroin) in the brain. Naltrexone is used as a method to treat drug and alcohol addicted patients and in the case of drug addiction, is an alternative to the use of the highly addictive methadone. Naltrexone, in orally-administered tablet form, is currently used in Australia and is listed on the Pharmaceutical Benefits Scheme for the treatment of alcoholism. However, orally-administered Naltrexone is not well accepted by the patients and compliance is low compared with other treatments1. Relapse is one of the biggest problems with conventional drug and alcohol treatments. The Analytica Naltrexone implant seeks to greatly reduce the likelihood of relapse as the implant reduces the reliance on the patient to seek and/or administer regular treatment. Doctors are requesting longer-acting treatments, to remove the daily routine requirement of an oral Naltrexone pill. Analytica's Naltrexone implant guarantees that the patient will receive their Naltrexone dose for the life of the implant, and will not need to remember their treatment. Naltrexone Implants are currently only available to patients in Australia under restricted conditions and none are listed on the Australian Register of Therapeutic Goods. Analytica will develop its Naltrexone implant in accordance with TGA requirements in order to have the implant listed on the ARTG and available to the wider population. The development of Analytica's Naltrexone implant is in its infancy. The implants are currently being manufactured by a specialist cGMP manufacturer in Melbourne, and have been used in initial animal trials. Further implant development precedes planned pre-clinical and clinical studies. At the completion of the clinical study program, the Company plans to apply for the Naltrexone implant's inclusion into the ARTG. With obvious public health benefits, Analytica is investigating all possible forms of Government assistance at the State and Federal levels, to further the Naltrexone research program. 53 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 19 Operating Segments continued Types of products and services by reportable segment continued iii) Corporate The corporate segment includes all other operations including the administration, and associated listed public company expenditure. Basis of accounting for purposes of reporting by operating segments (a) Accounting policies adopted Unless stated below, all amounts reported to the Board of Directors, being the chief operating decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of Analytica Limited. Income tax expense Income tax expense is calculated based on the segment operating net profit using a notional charge of 30%. The effect of taxable or deductible temporary difference is not included for internal reporting purposes. (b) Segment assets Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location. (c) Segment liabilities Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to Analytica Limited as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings. (d) Geographical information In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers whereas segment assets are based on the location of the assets. Australia 2012 2011 Revenue Non-current assets Revenue Non-current assets 194,705 90,563 272,878 678,337 54 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 19 Operating Segments continued (e) Segment performance REVENUE Sales Grant revenue Interest revenue Total segment revenue EXPENSE Depreciation and amortisation Interest expense Other expense Research and development Total segment expense Segment results (f) Segment assets Segment assets (g) Segment liabilities Segment liabilities Medical Devices Pharmaceuticals Corporate and Other Total 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 5,121 - - 5,121 6,100 - - 6,100 - - - (909,929) - - - (367,084) (909,929) (367,084) (904,808) (360,984) - - - - - - - - - - - - - - - - - - - - - 157,572 32,013 189,585 - 261,449 5,330 266,779 5,121 157,572 32,013 194,706 6,100 261,449 5,330 272,879 - - - (7,500) (97,931) (18,755) (1,390,100) - (12,844) (5,333) (83,293) - (97,931) (18,755) (1,390,100) (909,929) (12,844) (5,333) (83,293) (374,584) (7,500) (1,506,786) (101,470) (2,416,715) (476,054) (7,500) (1,317,200) 165,309 (2,222,009) (203,175) - - 1,486,412 989,346 1,486,412 989,346 (172,737) (441,148) (172,737) (441,148) 55 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 20 Interests of Key Management Personnel The totals of remuneration paid to the key management personnel of Analytica Limited during the year are as follows: Short-term employee benefits Termination benefits 30 June 30 June 2012 2011 $ 420,699 - 420,699 $ 360,823 4,327 365,150 The Remuneration Report contained in the Directors' Report contains details of the remuneration paid or payable to each member of Analytica Limited's key management personnel for the year ended 30 June 2012. Key management personnel options and rights holdings No options were provided as remuneration to key management personnel for the years ended 30 June 2012 and 30 June 2011. Key management personnel shareholdings The number of ordinary shares in Analytica Limited held by each key management person of Analytica Limited during the year is as follows: Directors 30 June 2012 Dr Michael Monsour MPAMM Pty Ltd MP Monsour Medical Practice Pty Ltd Mrs Anne Monsour Total Mr. Ross Mangelsdorf RM & JM Mangelsdorf Tambien Pty Ltd Manowe Pty Ltd Other related parties Total Mr. Warren Brooks W Brooks Investments Pty Ltd Total Balance at beginning of year On exercise of options Other changes during the year Balance at end of year 555,066 5,400,972 7,691,790 11,669,277 25,317,105 10,000 10,000 4,598,367 - 31,000 4,649,367 5,516,665 16,706,819 22,223,484 52,189,956 - - - - - - - - - - - - - - - 185,022 25,743,827 2,563,930 3,889,759 740,088 31,144,799 10,255,720 15,559,036 32,382,538 57,699,643 3,333 3,333 6,570,627 4,180,585 1,060,332 13,333 13,333 11,168,994 4,180,585 1,091,332 11,818,190 16,467,577 (5,516,665) 22,500,170 - 39,206,989 16,983,505 39,206,989 61,184,253 113,374,209 Other changes during the year: Increases are due to issued capital in the non-renounceable issue allotment on 16 December 2011 and/or 12 March 2012. With the exception of the securities transfer for Mr. Warren Brooks of 5,516,665 shares to W Brooks Investments Pty Ltd. 56 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 20 Interests of Key Management Personnel continued Directors 30 June 2011 Dr Michael Monsour MPAMM Pty Ltd MP Monsour Medical Practice Pty Ltd Mrs Anne Monsour Total Mr. Ross Mangelsdorf RM & JM Mangelsdorf Tambien Pty Ltd Other related parties Total Mr. Warren Brooks W Brooks Investments Pty Ltd Total Balance at beginning of year On exercise of options Other changes during the year Balance at end of year 555,066 5,400,972 7,691,790 11,669,277 25,317,105 10,000 10,000 4,598,367 31,000 4,649,367 5,516,665 16,706,819 22,223,484 52,189,956 i i i i i - - - - - - - - - - - - - - - - - - - - - - - - - - - - 555,066 5,400,972 7,691,790 11,669,277 25,317,105 10,000 10,000 4,598,367 31,000 4,649,367 5,516,665 16,706,819 22,223,484 52,189,956 i) Note correction to comparative information of key management personnel shareholdings to 52,189,956 as at 30 June 2011, increased from 18,256,195 as disclosed in the 2011 annual financial statements. This is due to the inclusion of Mr W Brooks as director and other related parties of Dr M Monsour and Mr R Mangelsdorf, previously omitted. Key management personnel share options The number of options in Analytica Limited held by each key management person of Analytica Limited during the year is as follows: Unlisted Options 30 June 2012 Directors Options Expiring 30/06/12 at $0.05 Dr Michael Monsour Mr Ross Mangelsdorf Balance at beginning of year On exercise of options Other changes during the year Balance at end of year 10,000,000 3,000,000 13,000,000 - - - (10,000,000) (3,000,000) (13,000,000) - - - 57 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 20 Interests of Key Management Personnel continued Listed Options ALTO Options Expiring 06/09/12 at $0.04 30 June 2012 Dr Michael Monsour MPAMM Pty Ltd MP Monsour Medical Practice Pty Ltd Mrs Anne Monsour Total Mr. Ross Mangelsdorf RM & JM Mangelsdorf Tambien Pty Ltd Manowe Pty Ltd Other related parties Total Mr. Warren Brooks W Brooks Investments Pty Ltd Total Total ALTO Options Expiring 06/09/12 at $0.04 Listed Options ALTOA options Expiring 06/06/13 at $0.08 30 June 2012 Dr Michael Monsour MPAMM Pty Ltd MP Monsour Medical Practice Pty Ltd Mrs Anne Monsour Total Mr. Ross Mangelsdorf RM & JM Mangelsdorf Tambien Pty Ltd Manowe Pty Ltd Other related parties Total Mr. Warren Brooks W Brooks Investments Pty Ltd Total Total ALTOA Options Expiring 06/06/13 at $0.08 Balance at beginning of year On exercise of options Other changes during the year Balance at end of year - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 185,022 25,743,827 2,563,930 3,889,759 185,022 25,743,827 2,563,930 3,889,759 32,382,538 32,382,538 3,333 3,333 6,570,627 4,180,585 1,060,332 3,333 3,333 6,570,627 4,180,585 1,060,332 11,818,210 11,818,210 16,983,505 16,983,505 16,983,505 16,983,505 61,184,253 61,184,253 185,022 25,743,827 2,563,930 3,889,759 185,022 25,743,827 2,563,930 3,889,759 32,382,538 32,382,538 3,333 3,333 6,570,627 4,180,585 1,060,332 3,333 3,333 6,570,627 4,180,585 1,060,332 11,818,210 11,818,210 16,983,505 16,983,505 16,983,505 16,983,505 61,184,253 61,184,253 58 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 20 Interests of Key Management Personnel continued Unlisted Options 30 June 2011 Directors Options Expiring 30/06/12 at $0.05 Dr Michael Monsour Mr Ross Mangelsdorf Balance at beginning of year On exercise of options Other changes during the year Balance at end of year 10,000,000 3,000,000 13,000,000 - - - - - - 10,000,000 3,000,000 13,000,000 Other key management personnel transactions For details of other transactions with key management personnel, refer to Note 25: Related Party Transactions. 21 Auditors' Remuneration Remuneration of the auditor of the company, Bentleys Brisbane Partnership Chartered Accountants, for: - auditing or reviewing the financial statements - other services 30 June 30 June 2012 $ 2011 $ 35,004 - 35,004 35,004 9,100 44,104 Other services includes the provision for assistance with financial statement note disclosures and taxation assistance where (if) required. 22 Controlled Entities (a) Controlled entities Percentage Owned (%)* Percentage Owned (%)* 2012 2011 Subsidiaries: Graesser Pty Ltd Golden Top Trading Limited Voluntarily deregistered as at 30 June 2011 Voluntarily deregistered as at 30 June 2011 0 0 100 45 * Percentage of voting power is in proportion to ownership 59 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 23 Associated Companies Interests are held in the following associated companies: Unlisted: Graesser Pty Ltd Golden Top Trading Limited Foot- note i i Total assets Total liabilities Profit Ownership interest Carrying amount of investment 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 $ $ $ $ $ $ % % $ $ - - - - - - - - - - - - - - 100.00 45.00 - - - - (i) Voluntarily deregistered as at 30 June 2011 24 Contingent Liabilities and Contingent Assets In the opinion of the Directors, the company did not have any contingencies at 30 June 2012 (2011:Nil). 25 Related Party Transactions Related Parties (a) The company's main related parties are as follows: i) Key management personnel: Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel. For details of remuneration disclosures relating to key management personnel, refer to Note 20: Interests of Key Management Personnel (KMP) and the remuneration report in the Directors' Report. Other transactions with KMP and their related entities are shown below. Loan facility to the company up to $400,000 provided by Dr Monsour. Refer note 12(a) for further information. ii) Entities subject to significant influence by the company: An entity which has the power to participate in the financial and operating policy decisions of an entity, but does not have control over those policies, is an entity which holds significant influence. Significant influence may be gained by share ownership, statute or agreement. For details of interests held in associated companies, refer to Note 23: Associated Companies. 60 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 25 Related Party Transactions continued (b) Transactions with related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transactions occurred with related parties: During the year accounting services were provided to the company by Avance Chartered Accountants, a firm which director Mr. Ross Mangelsdorf is a partner. Fees of $42,000 (2011: $49,500) were charged for these services to 30 June 2012. (c) Balances to related parties CURRENT Amount payable to: - key management personnel related entities 26 Cash Flow Information (a) Reconciliation of result for the year to cashflows from operating activities Reconciliation of net income to net cash provided by operating activities: Profit for the year Cash flows excluded from profit attributable to operating activities Non-cash flows in profit: - amortisation - depreciation - fair value adjustment CBio Limited - net gain on disposal of property, plant and equipment Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries: - (increase)/decrease in trade and other receivables - (increase)/decrease in prepayments - (increase)/decrease in inventories - increase/(decrease) in trade and other payables - increase/(decrease) in provisions - increase/(decrease) in employee benefits Cashflow from operations 30 June 30 June 2012 $ 2011 $ (90) 268,700 30 June 30 June 2012 $ 2011 $ (2,222,009) (203,176) 1,057 6,873 595,486 (241) 108,331 3,067 16,238 (14,715) 2,054 20,598 - 12,844 (381,320) - (208,999) 1,538 5,306 87,936 (2,057) 3,459 (1,483,261) (684,469) 61 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 27 Share-based Payments At 30 June 2012 Analytica Limited has no share-based payment schemes. i) The following share-based payment remuneration arrangements existed at 30 June 2011: On 26 November 2008, 33,000,000 options were granted under the Analytica Limited Employee Share Option Plan to take up ordinary shares at an exercise price of $0.05 each. The options vest immediately and must be exercised before 30 June 2012. All options granted under the Analytica Limited Employee Share Option Plan are for ordinary shares in Analytica Limited, which confer a right of one ordinary share for every option held. The options hold no voting or dividends rights and are not transferable. All options exercised are required to be settled for cash. The total expense relating to share based payment transactions was $nil (2011: nil). For details of options issued to key management personnel, refer to Note 20 - Interests of Key Management Personnel. A summary of the company options issued is as follows: Grant Date Expiry Date 26 November 2008 30 June 2012 22 December 2011 6 September 2012 22 December 2011 6 June 2013 9 March 2012 6 September 2012 9 March 2012 6 June 2013 Exercise price Start of the year Granted during the year Exercised during the year Forfeited during the year Balance at the end of the year Vested and exercisable at the end of the year 0.05 33,000,000 0.04 0.08 0.04 0.08 - - - - - 94,905,143 94,905,143 43,094,857 43,094,857 - - - - - (33,000,000) - - - - - 94,905,143 94,905,143 43,094,857 43,094,857 - - - - - (b) Options outstanding Listed options outstanding at 30 June 2012 consisted: - 138,000,000 ALTO options with a remaining contractual life of 2 months and 1 week, exercisable at $0.04; - 138,000,000 ALTOA options with a remaining contractual life of 1 year, exercisable at $0.08. listed options are exercised in accordance with their terms of issue, 276,000 ordinary shares would be If all issued (2011: 33,000,000) and contributed equity would increase by $16.56m (2011:$1.65m). The unlisted options (33,000,000) expired on 30 June 2012. There were no options exercised during the year ended, with the 33,000,000 options expiring on 30 June 2012 forfeited. 28 Events after the end of the Reporting Period No matters or circumstances have arisen since the end of the year which 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. 62 Analytica Limited Notes to the Financial Statements For the Year Ended 30 June 2012 29 Company Details The registered office of the company is: Analytica Limited 320 Adelaide Street Brisbane QLD 4000 The postal address for the registered office of the company is: Analytica Limited GPO Box 670 Brisbane QLD 4001 The principal place of business is: 320 Adelaide Street Brisbane QLD 4000 Telephone (07) 3278 1950 63 Bentleys THINKING AHEAD INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ANALYTICA LIMITED Report on the Financial Report We have audited the accompanying financial report of Analytica Limited which comprises the statement of financial position as at 30 June 2012, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration Di recto rs' Responsiöi lity for the F inancia I Repo rt The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting lnterpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. ln Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that compliance with the Australian equivalents to lnternational Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with lnternational Financial Reporting Standards. Auditor's Responsibil ity 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. These Auditing 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 judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. ln making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report 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 control. 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. lndependence ln conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Kreston lnternational ts-_ a#¡.ddhd@h..dütu A member of Bentleys, an assoqation of tndependenl accountlng firms rn Australia fhe member f.ms of the Bentleys associatton âre affil¡ated only and not rn part¡ership Llability limited by â scheme approved under Professional Slandards Legtslatlon Accountants Auditors Advisors Bentleys THINKING AHEAD Opinion ln our opinion a) the financial report of Analytica Limited is in accordance with lhe Coryorations Act 2001, including: (i) giving a true and fair view of the company's financial position as at 30 June 2012 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting lnterpretations) and lhe Corporations Regulations 2001 ; and b) the financial report also complies with the lnternational Financial Reporting Standards as disclosed in Note 1. Emphasis of Matter Without modifying our opinion, we draw attention to Note I in the financial report, which indicates that the company will be required to raise additional funds to meet forecast cash needs. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business. Report on the Remuneration Report We have audited the Remuneration Report included in pages 16 to 20 of the directors'report for the year ended 30 June 2012. fhe 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 ln our opinion the Remuneration Report of Analytica Limited for the year ended 30 June 2012 complies with section 3004 of the Coryorations Act 2001. ó-,f(ey5 Bentleys Brisbane Partnership Chartered Accountants + -\ Stewa Partner glas Brisbane 28 September 2012 ts-__ Kreston lnternational ^tHffidhdFer.@tu A member of Bentleys, an assocrahon ol rndependent accountrng firms rn Australia The member firms of the Bentleys assocratron are aifilated only and not ln partnershrp Lrabi]dy lmûed by a scheme approved under Professro^al Standards Legrslation Accountants Auditors Advisors Analytica Limited Additional Information for Listed Public Companies 30 June 2012 ASX Additional Information Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. This information is effective as at 24 August 2012. Substantial shareholders The number of substantial shareholders and their associates are set out below: Shareholders W Brooks Investments Pty Ltd MPAMM Pty Ltd Voting rights Ordinary Shares Number of shares 39,206,989 31,144,799 On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Options No voting rights. Distribution of equity security holders Holding 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,000 and over Total Ordinary shares Shares Options 382,943 679,982 1,161,663 40,059,751 517,601,545276,000,000 559,885,884276,000,000 The number of security investors holding less than a marketable parcel of 21,740 securities ($0.23 on 23 August 2012) is 1,398 and they hold 5,834,315 securities. Twenty largest shareholders W BROOKS INVESTMENTS PTY LTD M P A M M PTY LTD IGNATIUS LIP PTY LTD MRS ANNE MONSOUR TAMBIEN PTY LTD M P MONSOUR MEDICAL PRACTICE PTY LTD BASILDENE PTY LTD Ordinary shares Number held % of issued shares 39,206,989 31,144,799 25,113,690 15,559,036 11,168,994 7.00 5.56 4.49 2.78 1.99 10,255,720 1.83 8,517,933 1.52 The accompanying notes form part of these financial statements. 67 Analytica Limited Additional Information for Listed Public Companies 30 June 2012 MRS SALLY DIANA YEATES BUSHY LANE PROJECTS PTY LTD DALROSE PTY LTD JAYEM PTY LTD ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD MRS SABINA LIP BH HAAGSMA MR VICTOR PEREIRA MR MATTHEW CRITCHLEY MANOWE PTY LTD MRS MARGUERITE MARY GALLAGHER MR SCOTT JAMES BURNS MRS NATALIE LORIMER TOTAL FOR TOP 20: Twenty largest option holders Security: ALTO - OPT EXP 6/09/12 @$0.04 M P A M M PTY LTD W BROOKS INVESTMENTS PTY LTD IGNATIUS LIP PTY LTD FORTUNE 20 PTY LTD BUSHY LANE PROJECTS PTY LTD MRS ANNE MONSOUR TAMBIEN PTY LTD MR MATTHEW CRITCHLEY MR DAVID WILSON TAMBIEN PTY LTD MANOWE PTY LTD DALROSE PTY LTD M P MONSOUR MEDICAL PRACTICE PTY LTD BASILDENE PTY LTD FITZWILL SUPERANNUATION PTY LTD MR JOHN THOMAS GAHAN MRS SALLY DIANA YEATES MR TIMOTHY WILLIAM FITZPATRICK MR GORAN KARAMESINOSKI JAYEM PTY LTD 5,814,465 5,642,814 5,627,918 5,575,758 5,221,471 5,200,000 5,100,794 4,909,097 4,500,000 1.04 1.01 1.01 1.00 0.93 0.93 0.91 0.88 0.80 4,180,585 0.75 4,000,000 3,608,120 3,505,000 0.71 0.64 0.63 203,853,183 36.41 Options Number held % of issued options 25,743,827 18.65 16,983,505 7,500,000 6,300,000 5,059,361 3,889,759 3,635,624 3,000,000 2,990,000 2,888,920 2,840,585 2,727,252 2,563,930 2,408,333 2,105,944 2,000,000 1,453,616 1,423,591 1,400,000 1,393,939 12.31 5.43 4.57 3.67 2.82 2.63 2.17 2.17 2.09 2.06 1.98 1.86 1.75 1.53 1.45 1.05 1.03 1.01 1.01 98,308,186 71.24 The accompanying notes form part of these financial statements. 68 Analytica Limited Additional Information for Listed Public Companies 30 June 2012 Twenty largest option holders continued Security: ALTOA - OPT EXP 6/6/2013 @$0.08 M P A M M PTY LTD W BROOKS INVESTMENTS PTY LTD BUSHY LANE PROJECTS PTY LTD IGNATIUS LIP PTY LTD MRS ANNE MONSOUR TAMBIEN PTY LTD TAMBIEN PTY LTD MANOWE PTY LTD DALROSE PTY LTD M P MONSOUR MEDICAL PRACTICE PTY LTD BASILDENE PTY LTD MITCHELL'S INDEPENDENT TRADERS PTY LTD MRS SIGRID ARUNDEL MR ADAM ROGERS + MRS CATHERINE ROGERS FITZWILL SUPERANNUATION PTY LTD MRS SALLY DIANA YEATES MR TIMOTHY WILLIAM FITZPATRICK JAYEM PTY LTD MR RONALD CRISTIAAN MONNIER + MS KRISTA ANNE CAVALLARO MR VICTOR PEREIRA Options Number held % of issued options 25,743,827 18.65 16,983,505 9,692,694 7,500,000 3,889,759 12.31 7.02 5.43 2.82 3,635,624 2.63 2,888,920 2.09 2,840,585 2.06 2,727,252 1.98 2,563,930 1.86 2,408,333 1.75 2,316,580 1.68 2,300,000 1.67 2,250,000 1.63 2,105,944 1,453,616 1,423,591 1,393,939 1,250,000 1,227,274 1.53 1.05 1.03 1.01 0.91 0.89 ALTOA - OPTIONS TOTAL TOP 20 96,595,373 70.00 Securities exchange All the ordinary shares of the Company are listed on the Australian Securities Exchange (ASX) under the share code "ALT". The accompanying notes form part of these financial statements. 69

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