ANNUAL
REPORT
2020
2
ANATARA LIFESCIENCES Annual Report 2020 3
Appendix 4E
Name of entity:
ABN:
Year ended:
Previous period:
Anatara Lifesciences Ltd
41 145 239 872
30 June 2020
30 June 2019
Results for announcement to the market
Revenue from ordinary activities
Loss from ordinary activities after tax
attributable to members
Net loss for the period attributable to
members
Distributions
Up
Down
Down
-%
17.3%
17.3%
$
-
(3,364,644)
(3,364,644)
to
to
to
No dividends have been paid or declared by the company for the current financial year. No dividends were paid for the
previous financial year.
Explanation of results
Please refer to the review of operations and activities on page 7 for explanation of the results.
Additional information supporting the Appendix 4E disclosure requirements can be found in the review of operations and
activities, directors’ report and the financial statements for the year ended 30 June 2020.
Net tangible assets per security
Net tangible asset backing (per security)
Changes in controlled entities
2020
Cents
5.73
2019
Cents
11.96
There have been no changes in controlled entities during the year ended 30 June 2020.
Other information required by Listing Rule 4.3A
a) Details of individual and total dividends or distributions and dividend or distribution payments:
b) Details of any dividend or distribution reinvestment plans:
c) Details of associates and joint venture entities:
d) Other information
Audit
N/A
N/A
N/A
N/A
The financial statements have been audited by the Group’s independent auditor without any modified opinion, disclaimer or
emphasis of matter.
4
Contents
Corporate directory
Chair’s letter
Review of operations and activities
Directors’ report
Directors and company secretary
Principal activities
Dividends – Anatara Lifesciences Ltd
Review of operations
Significant changes in the state of affairs
Events since the end of the financial year
Likely developments and expected results of operations
Environmental regulation
Information on directors
Company secretary
Meetings of directors
Remuneration report (audited)
Shares under option
Insurance of officers and indemnities
Proceedings on behalf of the company
Non-audit services
Taxation services
Auditor’s independence declaration
Rounding of amounts
Corporate governance statement
Financial statements
Independent auditor’s report to the members
Shareholder Information
5
6
7
8
8
8
8
8
8
9
9
9
10
12
13
13
23
23
24
24
25
25
25
27
28
63
66
ANATARA LIFESCIENCES Annual Report 2020 Corporate directory
5
Directors
Ms Sue MacLeman
Non-Executive Chair
Dr Tracie Ramsdale
Non-Executive Director
Dr Jane Ryan
Non-Executive Director
Dr David Brookes
Non-Executive Director
Secretary
Mr Stephen Denaro
Registered office and principal
place of business
Level 3, 62 Lygon Street
Carlton South VIC 3053 Australia
Telephone: (03) 9824 5454
Share register
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street
Brisbane QLD 4000
Telephone: (07) 3237 2100
Auditor
Grant Thornton Audit Pty Ltd
Collins Square
Tower 5, 727 Collins Street
Melbourne VIC 3008
Telephone: (03) 8320 2222
Solicitors
Thomson Geer
Level 16, Waterfront Place
1 Eagle Street
Brisbane QLD 4000
Bankers
Commonwealth Bank of Australia
Melbourne VIC 3000
Stock exchange listings
Anatara Lifesciences Ltd shares are listed on the Australian
Securities Exchange (ASX code: ANR)
Website
www.anataralifesciences.com
6
Chair’s letter
Dear Shareholders,
On behalf of the Anatara Board, I am pleased to present our 2020 Annual Report.
Focusing on Human Gut Health
Anatara is developing an OTC medicine to address factors associated with gastrointestinal (GI) disorders such as irritable
bowel syndrome (IBS) and inflammatory bowel disease (IBD): microbiome dysbiosis, inflammation and mucosal damage. With
preclinical development successfully completed, a clinical trial is anticipated in late 2020. IBS is the most commonly diagnosed
GI condition affecting 11% of people globally. Patients experience high failure rates of current prescription therapies. Patients
have a poor quality of life and 50% of IBS patients seek additional symptomatic relief through the use of adjunct therapies and
complementary medicines. Anatara’s OTC medicine is positioned as an adjunct to existing therapies to empower patients to
better manage their symptoms. Finding and selecting the best marketing partner is critical to the success of a product such as
GaRP and consequently this has and will continue to be a major focus for Anatara.
Animal health
Detach® is approved by the Australian Pesticides and Veterinary Medicines Authority (APVMA) for use in piglets in Australia.
There is a need for a safe, effective, non-antibiotic solution to control scour in piglets and other livestock species, such
as poultry. Feedback from potential licensees suggests additional dosage forms for piglets are required as well as proof of
concept data in encouraging indications for other livestock species such as poultry. Anatara has progressed development of
additional dosage forms and is progressing proof of concept studies to expand utility of Anatara’s animal health assets.
Outlook
The Board is pleased that notwithstanding Covid-19, the Anatara team have been able to advance GaRP to being clinical trial
ready and to develop new bromelain-based formulations for challenge trials in piglets and in poultry. The Board is committed
to continue to execute its human health development plans, and in parallel, the Company is addressing the barriers to out-
licensing Detach® through progression of challenge trials for newly developed formulations for piglets (in-feed) and for poultry.
Anatara anticipates renewed interest in partnering Detach® upon successful completion of challenge trials.
Anatara anticipates commencement of an IBS clinical trial in the 4th quarter of calendar 2020, with a view to partnering by the
end of calendar 2020. We look forward to announcing these important Company milestones over the coming year.
Finally, on behalf of my fellow directors, I thank Anatara’s shareholders for their patience and support throughout the
year. Thanks also goes to the Anatara Board and our small but dedicated team for their continued hard work and ongoing
commitment to the Company. We look forward to seeing those shareholders who can join us at the Anatara AGM.
Yours sincerely,
Ms Sue MacLeman
Chair
ANATARA LIFESCIENCES Annual Report 2020 7
Review of operations and activities
During the year to 30 June 2020, the Company made significant steps towards taking its first human gastrointestinal health
product, GaRP (Gastrointestinal ReProgramming dietary supplement), to market. Expenditure in furthering this effort resulted
in a loss after tax of $3,364,644 for the period (2019: $2,868,272).
Human Health
In January 2020, the Company summarised completion of preclinical studies for Anatara’s Gastrointestinal ReProgramming
(GaRP) OTC medicine. GaRP is a single product with multiple benefits, aimed at effectively managing many of the major
symptoms experienced by irritable bowel syndrome (IBS) and inflammatory bowel disease (IBD) patients. Anatara anticipates
commencement of an IBS clinical trial in the 4th quarter of calendar 2020.
Animal Health
Detach® is approved by the Australian Pesticides and Veterinary Medicines Authority (APVMA) for use in piglets in Australia.
There is a need for a safe, effective, non-antibiotic solution to control scour in piglets and other livestock species, such as
poultry. Opportunities exist for the product globally but with varying requirements for regulatory approval, including additional
formulations and in-country field trials. Feedback from potential licensees suggests additional dosage forms for piglets are
required as well as proof of concept data in encouraging indications for other livestock species such as poultry.
New bromelain-based formulations have been developed: an in-feed formulation for piglets and a formulation for poultry.
Anatara will progress challenge trials with these formulations. The poultry challenge trial will be in collaboration with Poultry
Hub Australia (University of New England). Poultry challenge trial results are anticipated by January 2021.
Partnering
Anatara is engaged in licensing discussions for GaRP for human health with international consumer health companies and
for companion animals with international animal health companies. Anatara anticipates commencement of an IBS clinical
trial in the 4th quarter of calendar 2020, with a view to partnering by the end of calendar 2020. Anatara anticipates renewed
interest in partnering Detach® upon successful completion of challenge trials. We look forward to announcing these important
Company milestones over the coming year.
Investor outreach
Anatara continued an active market awareness program during the first half of the year, delivering presentations directly to
shareholders and investors in Melbourne (August 2019, October 2019) and Sydney (November 2019). Investor relations activity
was reduced in the second half of the year as part of cost containment activities. Anatara presented at the ASX Small and
Mid-cap Conference in September 2020.
Commercial focus
Looking ahead, Anatara will continue to execute its human health development plans, and in parallel, the Company has
prioritised out-licensing both its animal health and human health assets.
8
Directors’ report
Your directors present their report on the consolidated entity consisting of Anatara Lifesciences Ltd and the entities it controlled
at the end of, or during, the year ended 30 June 2020. Throughout the report, the consolidated entity is referred to as the Group.
Directors and company secretary
The following persons held office as directors of Anatara Lifesciences Ltd during the whole of the financial year and up to the
date of this report, except where otherwise stated:
Ms Sue MacLeman, Non-Executive Chair
Dr Tracie Ramsdale, Non-Executive Director
Dr Jane Ryan, Non-Executive Director
Dr David Brookes, Non-Executive Director
The following persons held office as company secretary of Anatara Lifesciences Ltd during the whole of the financial year and
up to the date of this report, except where otherwise stated:
Mr Stephen Denaro
Principal activities
The Group is developing non-antibiotic oral solutions for gastrointestinal diseases in animals and humans and continues to
develop and commercialise Detach®, a non-antibiotic therapy that prevents and treats diarrhea (also known as scour) in piglets.
Dividends – Anatara Lifesciences Ltd
No dividends were declared or paid to members for the year ended 30 June 2020. The directors do not recommend that a
dividend be paid in respect of the financial year.
Review of operations
Information on the operations and financial position of the Group and its business strategies and prospects is set out in the
review of operations and activities on page 7 of this annual report.
Significant changes in the state of affairs
Significant changes in the state of affairs of the Group during the financial year were as follows.
On 14 October 2019, the company reported statistically significant animal studies. Successful completion of the preclinical
program has provided strong scientific proof that the GaRP dietary supplement has the potential to be game changing. When
compared to a placebo control, GaRP reduced the combined disease characteristics of colon inflammation and disrupted
bowel habits by 2.5-fold (p=0.012). GaRP promoted mucosal healing by increasing mucin genes by a factor of 5 to 7-fold
(MUC2 and MUC6, p<0.001).
ANATARA LIFESCIENCES Annual Report 2020 9
On 19 December 2019, the company reported achievement of an important preclinical milestone, namely a potential adjuvant
effect in reducing inflammation with the co-administration of GaRP with disease-modifying medications. This offers the
potential to reduce the dose of disease-modifying medications known to have devastating side-effects. It was also shown that
GaRP does not affect the uptake or potential activity of probiotics.
On 20 December 2019, the company reported finalisation of a draft protocol for an IBS clinical trial. However, on 7 April 2020,
the company advised that due to Covid-19, plans to initiate an IBS clinical trial had been delayed to the second half of 2020.
The company received financial support from Federal Government incentives through Cashflow Boost and through payroll
tax refunds and deferrals by state governments. Anatara recorded other income of $101,765 for these items. Anatara did
not participate in JobKeeper and has not terminated any employees during this period. Anatara employees have been able
to continue laboratory-based activities and as a result have advanced GaRP to being clinical trial ready. In addition, new
bromelain-based formulations were developed for challenge trials in piglets (in-feed) and in poultry.
On 23 June 2020, the company provided an update on partnering GaRP and Detach® stating that Anatara did not anticipate
reaching a partnering agreement by the end of FY 2020 for an animal health product. Anatara remains in discussions with
third parties to progress development of the company’s animal health assets to address barriers to partnering. Anatara did not
anticipate reaching a partnering agreement by the end of FY 2020 for an animal health product. Anatara continues to progress
the human health portfolio and now plans the commencement of a clinical trial of GaRP in irritable bowel syndrome (IBS) in
the 4th quarter of calendar 2020. Anatara is evaluating partnering opportunities for GaRP with multinational consumer health
companies.
Events since the end of the financial year
No matter or circumstance has arisen since 30 June 2020 that has significantly affected the Group’s operations, results or state
of affairs, or may do so in future years.
Likely developments and expected results
of operations
Other than the information disclosed in the review of operations and activities on page 7, there are no likely developments or
details on the expected results of operations that the Group has not disclosed.
Environmental regulation
The Group is not affected by any significant environmental regulation in respect of its operations.
10
Information on directors
The following information is current as at the date of this report.
Ms Sue MacLeman Non-Executive Chair
Experience and
expertise
Sue has more than 30 years’ experience as a pharmaceutical, biotechnology and medical
technology executive with senior roles in corporate, medical, commercial and business
development. Sue has served as CEO and Board member of several ASX and NASDAQ listed
companies in the sector. She is currently Chair – Anatara Lifesciences (ASX:ANR), Chair –
MTPConnect (Medical Technology and Pharmaceuticals Industry Innovation Growth Centre),
Chair of Tali Digital Ltd (ASX:TD1), Non-Executive Director of Palla Pharma Ltd (ASX:PAL), Non-
Executive Director - Oventus Medical Ltd (ASX:OVN), and Non-Executive Director of veski.
Sue is also appointed to a number of academic and government advisory committees including
the Prime Ministers Digital Expert Advisory Board, Australian Advisory Board of Technology
and Healthcare Competitiveness, CSIRO Health and Biosecurity Advisory Committee, the
Genomics Health Futures Expert Advisory Committee (MRFF), various Covid-19 taskforces,
the DMTC Strategic Advisory Medical Countermeasures Committee and the Asialink Business
Taskforce. Sue is also Chair of ATSE Health Technology Forum and ATSE Policy Committee.
Her broad commercial experience is underpinned by graduate qualifications in pharmacy and
post graduate qualifications in corporate governance, commercial law, business administration
and marketing.
Other current
public directorships
Tali Digital Ltd (ASX: TD1), since 6 September 2018
Oventus Medical Ltd (ASX: OVN), since 27 November 2015
Palla Pharma Limited (ASX: PAL), since 27 November 2018
Former public
directorships in
last 3 years
Special responsibilities
RHS Limited (ASX: RHS), until June 2018
Chair of Board
Member of the audit and risk management committee
Member of the remuneration and nominations committee
ANATARA LIFESCIENCES Annual Report 2020 11
Dr Tracie Ramsdale Non-Executive Director
Experience
and expertise
Tracie has over 30 years experience in the development and commercialisation of
life sciences technologies and has engaged with all aspects of the innovation and
commercialisation pipeline. Following a successful career as a Principal Investigator
and Commercial Manager of the Centre for Drug Design and Development at the
University of Queensland, Tracie co-founded a drug discovery and development
company (Alchemia Limited) and served as its CEO for almost 10 years. During this time,
she was responsible for multiple financing transactions and licensing the company’s
technology to major international pharmaceutical and manufacturing partners.
Tracie has extensive experience as a CEO, board member and advisor of several ASX-
listed and unlisted companies. Tracie has chaired the audit and risk, and research and
development committees of ASX-listed companies. She has served on a number of
industry and government advisory committees and provides independent consulting
advice to the biotechnology industry, academia and government.
Tracie is a Fellow of the Australian Academy of Technological Sciences and Engineering,
and a member of the Australian Institute of Company Directors.
Other current
public directorships
Former public
directorships in
last 3 years
None
None
Special responsibilities
Member of the audit and risk management committee
Member of the remuneration and nominations committee
Dr Jane Ryan Non-Executive Director
Experience and
expertise
Other current
public directorships
Former public
directorships in
last 3 years
Special responsibilities
Jane has over 30 years of international experience in the pharmaceutical and biotechnology
industries where she has held executive roles in management of research and development
programs as well as business development and alliance management. Jane has worked in
Australia, the United States and United Kingdom with companies including Peptech, Roche,
Cambridge Antibody Technology and Biota Holdings. Throughout her career, she has led
many successful fundraising campaigns and licensing initiatives including the awarding of a
$230 million US Government contract.
Jane currently chairs the Advisory Board at the ithree Institute at the University of Technology
Sydney (UTS) which studies how microbes grow, live, adapt and survive. Jane was previously
a Board Member of the Victorian endowment for Science Knowledge and Innovation (veski),
Diabetes Victoria, TechInSA, and the Diabetes Vaccine Development Centre.
None
None
Member of the audit and risk management committee
Chair of the remuneration and nominations committee
12
Dr David Brookes Non-Executive Director
Experience and
expertise
Dr. Brookes has extensive experience in the health and biotechnology industries, first be-
coming involved in the biotechnology sector in the late 1990’s as an analyst. Dr. Brookes
has since held Board positions in numerous ASX listed biotechnology companies, in-
cluding Chairman of genomics solutions company, RHS Ltd, which was acquired by
PerkinElmer Inc (NYSE:PKI $9B biotech company) in June 2018. He has also Chaired and been
a member of a number of risk and audit committees in ASX listed companies. He is currently a
Non-Executive Director of Factor Therapeutics (ASX: FTT) as well as Non-Executive Chairman
of the Better Medical group (unlisted).
Dr. Brookes maintains roles as a clinician and as a biotechnology industry consultant. Dr
Brookes, MBBS (Adelaide), is a Fellow of the Australian College of Rural and Remote Medicine
and a Fellow of the Australian Institute of Company Directors.
Other current
public directorships
Factor Therapeutics Limited (ASX: FTT), since 10 April 2019
Tali Digital Ltd (ASX: TD1), since 29 June 2020
Former public
directorships in
last 3 years
AtCor Medical Holdings Limited (ASX: ACG), until 3 April 2018
RHS Limited (ASX: RHS), until 15 June 2018
Special responsibilities
Chair of the audit and risk management committee
Member of the remuneration and nominations committee
Company secretary
The company secretary is Mr Stephen Denaro, appointed to the position on 24 February 2014. Stephen has extensive experience
in mergers and acquisitions, business valuations, accountancy services, and income tax compliance gained from positions
as Company Secretary and Chief Financial Officer of various public companies and with major chartered accountancy firms
in Australia and the United Kingdom. He provides company secretarial services for a number of start-up technology and ASX
listed and unlisted public companies.
Stephen has a Bachelor of Business in accountancy, Graduate Diploma in Applied Corporate Governance and is a member of
the Institute of Chartered Accountants in Australia and the Australian Institute of Company Directors.
ANATARA LIFESCIENCES Annual Report 2020 13
Meetings of directors
The numbers of meetings of the company’s board of directors and of each board committee held during the year ended 30
June 2020, and the numbers of meetings attended by each director were:
Ms Sue MacLeman
Dr Tracie Ramsdale
Dr Jane Ryan
Dr David Brookes
Full meetings of directors
Meetings of committees
A
10
10
10
9
Audit Remuneration
A
2
2
2
2
B
2
2
2
2
A
4
4
4
4
B
4
4
4
4
B
10
10
10
9
A= Number of meetings attended
B= Number of meetings held during the time the director held office or was a member of the committee during the year
Remuneration report (audited)
The directors present the Anatara Lifesciences Ltd 2020 remuneration report, outlining key aspects of our remuneration policy
and framework, and remuneration awarded this year.
The report is structured as follows:
A. Key management personnel (KMP) covered in this report
B. Remuneration policy and link to performance
C. Elements of remuneration
D. Link between remuneration and performance
E. Remuneration expenses
F. Contractual arrangements with executive KMPs
G. Non-executive director arrangements
H. Additional statutory information
A. Key management personnel covered in this report
Ms Sue MacLeman, Non-Executive Chair
Dr Tracie Ramsdale, Non-Executive Director
Dr Jane Ryan, Non-Executive Director
Dr David Brookes, Non-Executive Director
Other key management personnel
Mr Steven Lydeamore, Chief Executive Officer
Dr Michael West, Chief Operating Officer
Dr Tracey Brown, Chief Development Officer (resigned on 31 January 2020)
14
B. Remuneration policy and link to performance
Our remuneration and nominations committee is made up of independent non-executive directors. The committee
reviews and determines our remuneration policy and structure annually to ensure it remains aligned to business needs,
and meets our remuneration principles. In particular, the board aims to ensure that remuneration practices are:
• competitive and reasonable, enabling the company to attract and retain key talent
• aligned to the company’s strategic and business objectives and the creation of shareholder value
•
transparent and easily understood, and
• acceptable to shareholders.
Element
Purpose
Performance metrics
Potential value
Fixed
remuneration
(FR)
Provide competitive
market remuneration
Nil
Positioned at the market rate
STI
LTI
Reward for in-year
performance and
retention
Alignment
to long-term
shareholder value
KPI achievement,
determined by
remuneration and
nominations committee
CEO: 40% of FR
COO: 30% of FR
CDO: 30% of FR
KPI achievement,
determined by
remuneration and
nominations committee
CEO: 600,000 unlisted
5-year options at $0.736
exercise price
COO: 210,000 unlisted
5-year options at $1.70
exercise price
CDO: 210,000 unlisted
5-year options at $1.70
exercise price
Assessing performance
The remuneration and nominations committee is responsible for assessing performance against KPIs and determining
the STI and LTI to be paid. To assist in this assessment, the committee receives data from independently run surveys.
Performance is monitored on an informal basis throughout the year and a formal evaluation is performed annually.
Securities trading policy
Anatara Lifesciences Ltd’s securities trading policy applies to all directors and executives,
see https://anataralifesciences.com/investors/corporate-governance/. It only permits the purchase or sale of company
securities during certain periods.
ANATARA LIFESCIENCES Annual Report 2020 15
C. Elements of remuneration
(i) Fixed annual remuneration (FR)
Key management personnel may receive their fixed remuneration as cash, or cash with non-monetary benefits such
as health insurance and car allowances. FR is reviewed annually, or on promotion. It is benchmarked against market
data for comparable roles in companies in a similar industry and with similar market capitalisation. The committee aims
to position executives at or near the median, with flexibility to take into account capability, experience, value to the
organisation and performance of the individual.
(ii) Short-term incentives
All executives are entitled to participate in a short-term incentive scheme which provides for executive employees to
receive a combination of short-term incentive (STI) as part of their total remuneration if they achieve certain performance
indicators as set by the board. The STI can be paid either by cash, or a combination of cash and the issue of equity in the
company, at the determination of the remuneration and nominations committee and board.
The company’s CEO, COO and CDO are entitled to short-term incentives in the form of a bonus up to 40%, 30% and
30% of FR, respectively, against agreed various key performance indicators (KPIs), including target EBITDA, appreciation
in share price value, retention of key talent, and achievement of major project milestones.
On an annual basis, KPIs are reviewed and agreed in advance of each financial year and include financial and non-
financial company and individual performance goals that relate to:
• Operational management
•
Investor relations and shareholder value creation
• R&D activities
• Product development and commercialisation
(iii) Long-term incentives
Executives may also be provided with longer-term incentives through the company’s ‘executive option plan’ (EOP), that
was approved by shareholders at the annual general meeting held on 13 November 2017. The aim of the EOP is to
allow executives to participate in, and benefit from, the growth of the company as a result of their efforts and to assist
in motivating and retaining those key employees over the long-term. Continued service is the condition attached to the
vesting of the options. The board at its discretion determines the total number of options granted to each executive.
16
D. Link between remuneration and performance
Statutory performance indicators
We aim to align our executive remuneration to our strategic and business objectives and the creation of shareholder
wealth. The table below shows measures of the Group’s financial performance over the last five years as required by the
Corporations Act 2001. However, these are not necessarily consistent with the measures used in determining the variable
amounts of remuneration to be awarded to KMPs. As a consequence, there may not always be a direct correlation
between the statutory key performance measures and the variable remuneration awarded.
2020
2019
2018
2017
2016
Loss for the year attributable to owners ($)
3,364,644
2,868,272
3,569,016
1,705,002
723,934
Basic loss per share (cents)
Share price at year end ($)
6.77
0.13
5.80
0.25
7.22
0.64
3.45
1.00
1.40
1.26
The company’s earnings have remained negative since inception due to the nature of the business. Shareholder wealth
reflects this speculative and volatile market sector. No dividends have ever been declared by Anatara Lifesciences Ltd.
The company continues to focus on revenue growth with the objective of achieving key commercial milestones in order
to add further shareholder value.
ANATARA LIFESCIENCES Annual Report 2020 E. Remuneration expenses
The following tables show details of the remuneration expense recognised for the Group’s key management personnel
for the current and previous financial year measured in accordance with the requirements of the accounting standards.
17
2020
Short-term benefits
Post-
employment
benefits
Cash
bonus
Super-
annuation
Cash
salary and
fees
$
Non-executive
directors
Ms Sue MacLeman
135,585
Dr Tracie Ramsdale
Dr Jane Ryan
Dr David Brookes
Other KMP
67,792
72,635
72,635
$
-
-
-
-
Mr Steven Lydeamore
379,807
33,927
Dr Michael West
250,000
18,750
Dr Tracey Brown
172,223
23,625
Long
term
benefits
Long
service
leave
Share-based
payments
Options
Total
Perfor-
mance
rights
$
-
-
-
-
$
517
258
277
277
$
-
$
148,983
21,896
96,386
-
-
79,812
79,812
2,035
4,328
-
73,115
95,547
620,513
3,118
3,118
64,125
364,071
23,625
236,750
$
12,881
6,440
6,900
6,900
36,082
23,750
14,159
1,150,677
76,302
107,112
6,363
80,680
205,193
1,626,327
Total KMP
compensation
Notes
• Cash bonus includes estimation of the bonus for the current year and any adjustments to the bonus for prior years.
• Due to COVID-19, Anatara Board resolved to reduce their directors’ fees from 1 May 2020 temporarily. On 22 June
2020, Anatara Board resolved to issue 761,912 options to KMP and non-executive directors (subject to approval by
shareholders at November 2020 AGM).
• Dr Tracey Brown resigned on 31 January 2020 and 210,000 unlisted options (total value $121,716) were cancelled
during the year.
Cash
bonus
Super-
annuation
Long
term
benefits
Long
service
leave
Share-based
payments
Options
Total
Termi-
nation
benefits
18
2019
Short-term benefits
Post-
employment
benefits
Cash
salary and
fees
$
Non-executive
directors
Ms Sue MacLeman
115,769
$
-
Dr Tracie Ramsdale
232,407
46,073
Dr Jane Ryan
Dr David Brookes
Dr Jay Hetzel
Mr Iain Ross
Mr Paul Grujic
Other KMP
62,019
32,347
37,692
21,900
12,114
-
-
-
-
-
$
10,998
23,885
5,892
3,073
3,581
-
1,151
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
$
126,767
302,365
67,911
35,420
41,273
21,900
13,265
75,216
422,167
18,201
298,105
Mr Steven Lydeamore
257,190
67,853
21,649
259
Dr Michael West
Dr Tracey Mynott
250,000
38,463
-
-
27,312
2,592
12,284
-
125,000
-
175,747
Dr Tracey Brown
250,000
28,500
29,094
2,504
-
18,201
328,299
1,309,901
142,426
138,919
5,355
125,000
111,618
1,833,219
Total KMP
compensation
Notes
• Cash bonus includes estimation of the bonus for the current year and any adjustments to the bonus for prior years.
• Dr Tracie Ramsdale resigned as Interim CEO changing her role from Executive Director to Non-Executive Director
effective from 7 January 2019.
• Mr Steven Lydeamore was appointed to CEO on 2 December 2018.
• Ms Sue MacLeman was appointed Non-Executive Chair on 1 September 2018.
• Dr Jay Hetzel resigned on 12 November 2018.
• Mr Paul Grujic resigned on 31 August 2018.
• Mr Iain Ross resigned on 30 September 2018.
ANATARA LIFESCIENCES Annual Report 2020 19
F. Contractual arrangements with executive KMPs
Name:
Position:
Contract duration:
Notice period:
Fixed remuneration:
Name:
Position:
Contract duration:
Notice period:
Fixed remuneration:
Name:
Position:
Contract duration:
Notice period:
Fixed remuneration:
Mr Steven Lydeamore
Chief Executive Officer
Unspecified
6 months by either party
$395,000 per annum, plus 9.5% superannuation
Dr Michael West
Chief Operating Officer
Unspecified
3 months by either party
$250,000 per annum, plus 9.5% superannuation
Dr Tracey Brown
Chief Development Officer
Unspecified
3 months by either party
$250,000 per annum, plus 9.5% superannuation
G. Non-executive director arrangements
Non-executive directors receive a board fee and fees for chairing but not participating on board committees, see table
below. They do not receive performance-based pay. The fees are exclusive of superannuation. The chair receives double
the base fee of other non-executive directors, reflective of the additional demands and responsibilities of this role.
Fees are reviewed annually by the board taking into account comparable roles and market data provided by the board’s
independent remuneration adviser.
The maximum annual aggregate directors’ fee pool limit is $500,000, adopted on initial public offering of Anatara
Lifesciences Ltd on 14 October 2014.
Base fees
Chair
Other non-executive directors
Additional fees
Audit and risk management committee-chair
Audit and risk management committee-member
Remuneration and nominations committee-chair
Remuneration and nominations committee-member
$140,000
$70,000
$5,000
-
$5,000
-
20
H. Additional statutory information
(i) Relative proportions of fixed vs variable remuneration expense
The following table shows the relative proportions of remuneration that are linked to performance and those that are
fixed, based on the amounts disclosed as statutory remuneration expense on page 17 above:
Name
Fixed remuneration
At risk – STI
At risk – LTI
Non-executive director
Ms Sue MacLeman
Dr Tracie Ramsdale
Dr Jane Ryan
Dr David Brookes
Other KMP
Mr Steven Lydeamore
Dr Michael West
Dr Tracey Brown
2020
2019
2020
2019
2020
2019
%
%
%
%
%
%
100
77
100
100
67
76
79
100
86
100
100
67
94
86
-
-
-
-
5
5
10
-
14
-
-
16
-
8
-
23
-
-
27
18
11
-
-
-
-
17
6
5
(ii) Terms and conditions of the share-based payment arrangements
Options
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are
as follows:
Grant date
Vesting and
exercise date
Expiry date
Exercise price ($)
Value per option at
grant date ($)
Vested (%)
2016-09-23
2019-09-23
2021-09-23
2019-04-10
2019-04-10
2019-04-10
2019-02-18
2024-02-17
2020-02-18
2024-02-17
2021-02-18
2024-02-17
2020-06-22
2020-09-01
2022-08-31
2020-06-20
2020-11-26
2022-11-25
For detailed disclosures please refer to note 18 on page 48.
1.700
0.736
0.736
0.736
0.231
0.231
0.5796
0.2731
0.2731
0.2731
0.0737
0.0737
100%
100%
100%
0.0%
0.0%
0.0%
ANATARA LIFESCIENCES Annual Report 2020 (iii) Reconciliation of options and ordinary shares held by KMP
21
Option holdings
2020
Options
Ms Sue MacLeman
Dr Tracie Ramsdale
Dr Jane Ryan
Dr David Brookes
Mr Steven Lydeamore
600,000
Dr Michael West
Dr Tracey Brown
Notes
210,000
210,000
1,020,000
Balance at
start of the
period1
Granted as
remuneration
Exercised
Other
changes2
Vested and
exercisable
Balance
at end
of the
period3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
137,515
137,515
68,765
68,765
73,677
73,677
73,677
73,677
-
-
-
-
383,527
983,527
400,000
-
210,000
210,000
(210,000)
-
-
527,161
1,547,161
610,000
1. Balance may include shares held prior to individuals becoming a KMP. For individuals who became a KMP during the period,
the balance is as at the date they became a KMP.
2. Other changes incorporates changes resulting from the expiration/forfeiture of options.
3. For a former KMP, the balance is as at the date they cease being a KMP.
22
Share holdings
2020
Ordinary
shares
Ms Sue
MacLeman
Dr Tracie
Ramsdale
Dr Jane Ryan
Dr David
Brookes
Mr Steven
Lydeamore
Dr Michael
West
Dr Tracey
Brown
Notes
Balance at
the start of
the period1
Granted as
performance
Received on
exercise of
rights
Received on
exercise of
options
Other
changes2
Balance at
the end of the
period3
12,477
45,614
-
50,000
50,000
-
-
158,091
-
-
-
-
-
-
-
-
-
106,810
-
-
149,457
82,599
104,075
442,941
-
-
-
-
-
-
-
-
-
-
49,745
50,000
-
-
-
12,477
152,424
49,745
100,000
199,457
82,599
104,075
99,745
700,777
1. Balance may include shares held prior to individuals becoming a KMP. For individuals who became KMP during the period, the
balance is as at the date they became a KMP.
2. Other changes incorporates changes resulting from the acquisition of shares.
3. For a former KMP, the balance is as at the date they cease being a KMP.
In the current year, Steven Lydeamore, Michael West and Tracey Brown exercised Performance Rights which were issued in accordance
with the options approved under the Anatara Executive Option Plan. Tracie Ramsdale exercised Performance Rights as approved at the
Annual General Meeting on 11 November 2019.
(iv) Other transactions with key management personnel
Aggregate amounts of other transactions with key management personnel of Anatara Lifesciences Ltd:
Amounts recognised as expense
2020
$
-
2019
$
-
(v) Voting of shareholders at last year’s annual general meeting
Anatara Lifesciences Ltd received more than 75 percent of favourable votes on its remuneration report for the 2019
financial year. The company did not receive any specific feedback at the 2019 annual general meeting or throughout the
year on its remuneration practices.
[This concludes the remuneration report, which has been audited]
ANATARA LIFESCIENCES Annual Report 2020 23
Shares under option
A. Unissued ordinary shares
Unissued ordinary shares of Anatara Lifesciences Ltd under option at the date of this report are as follows:
Date options granted
2015-12-14
2016-09-23
2017-11-28
2018-09-10
2019-04-10
2020-06-22
2020-06-22
Total
Expiry date
2020-12-14
2021-09-23
2022-11-17
2020-12-14
2024-02-17
2022-08-31
2022-11-25
Issue price of shares
($)
Number under
option
1.450
1.700
2.270
1.450
0.736
0.231
0.231
562,500
210,000
36,000
750,000
600,000
383,527
378,385
2,920,412
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
B. Shares issued on the exercise of options
No ordinary shares of Anatara Lifesciences Ltd were issued during the year ended 30 June 2020 on the exercise of
options granted.
Insurance of officers and indemnities
A. Insurance of officers
The Company has agreed to indemnify all the directors of the Company for any liabilities to another person (other than
the Company or related body corporate) that may arise from their position as directors of the Company and its controlled
entities, except where the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the directors and officers of the
Company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by
the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount
of the premium.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct
involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to
gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the
premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
24
B. Indemnity of auditors
Anatara Lifesciences Ltd has agreed to indemnify their auditors, Grant Thornton Audit Pty Ltd, to the extent permitted by
law, against any claim by a third party arising from Anatara Lifesciences Ltd’s breach of their agreement. The indemnity
stipulates that Anatara Lifesciences Ltd will meet the full amount of any such liabilities including a reasonable amount of
legal costs.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to 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 part of those proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit services
The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the company and/or the Group are important.
Details of the amounts paid or payable to the auditor (Grant Thornton Audit Pty Ltd) for audit and non-audit services provided
during the year are set out below.
The board of directors has considered the position and, in accordance with advice received from the audit committee, is
satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set
out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity
of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
ANATARA LIFESCIENCES Annual Report 2020 25
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
Taxation services
Grant Thornton Audit Pty Ltd and its related entities and other Grant Thornton network firms:
Taxation services
Grant Thornton Audit Pty Ltd and its related entities and other Grant Thornton network firms:
Tax compliance services
Total remuneration for taxation services
Total remuneration for non-audit services
2020
$
2019
$
34,350
24,000
34,350
24,000
34,350
24,000
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 26.
Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the
directors’ report. Amounts in the directors’ report have been rounded off in accordance with the instrument to the nearest dollar.
This report is made in accordance with a resolution of directors.
Ms Sue MacLeman
Non-Executive Chair
Melbourne
24 August 2020
26
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Anatara Lifesciences Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Anatara
Lifesciences Ltd for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 24 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
ANATARA LIFESCIENCES Annual Report 2020
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
27
Corporate governance statement
Anatara Lifesciences Ltd and the board are committed to achieving and demonstrating the highest standards of corporate
governance. Anatara Lifesciences Ltd has reviewed its corporate governance practices against the Corporate Governance
Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council.
The 2020 corporate governance statement is dated as at 30 June 2020 and reflects the corporate governance practices in
place throughout the 2020 financial year. The 2020 corporate governance statement was approved by the board on 24 August
2020. A description of the Group’s current corporate governance practices is set out in the Group’s corporate governance
statement which can be viewed at https://anataralifesciences.com/investors/corporate-governance/.
Auditor’s Independence Declaration
To the Directors of Anatara Lifesciences Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Anatara
Lifesciences Ltd for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 24 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
28
Financial statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows (direct method)
Notes to the financial statements
Directors’ declaration
29
30
31
32
33
62
These financial statements are consolidated financial statements for the Group consisting of Anatara Lifesciences Ltd and its
subsidiaries. A list of major subsidiaries is included in note 12.
The financial statements are presented in Australian currency.
Anatara Lifesciences Ltd is a company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Level 3,
62 Lygon Street
Carlton South VIC 3053
The financial statements were authorised for issue by the directors on 24 August 2020. The directors have the power to amend
and reissue the financial statements.
ANATARA LIFESCIENCES Annual Report 2020 29
Consolidated statement of profit or loss and
other comprehensive income
For the year ended 30 June 2020
Revenue from contracts with customers
Gross profit
Other income
General and administrative expenses
Research and development expenses
Operating loss
Finance income
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive income
Items that may be reclassified to profit or loss:
Other comprehensive income for the period,
net of tax
Total comprehensive loss for the period
Total comprehensive income for the period is
attributable to:
Owners of Anatara Lifesciences Ltd
Notes
2
3(a)
3(b)
3(b)
4
2020
$
-
-
789,211
2019
$
663,405
663,405
877,573
(2,916,978)
(3,775,495)
(1,288,941)
(776,256)
(3,416,708)
(3,010,773)
52,064
142,501
(3,364,644)
(2,868,272)
-
-
(3,364,644)
(2,868,272)
-
-
(3,364,644)
(2,868,272)
(3,364,644)
(2,868,272)
Cents
Cents
Loss per share for loss attributable to the ordinary
equity holders of the company:
Basic and diluted loss per share
20
(6.77)
(5.80)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
30
Consolidated statement of financial position
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Term Deposits
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee benefit obligations
Total current liabilities
Non-current liabilities
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Other reserves
Accumulated losses
Total equity
Notes
5(a)
5(b)
5(c)
5(d)
6(a)
6(a)
7(a)
7(b)
2020
$
2019
$
2,682,368
630,333
-
23,740
3,336,441
7,187
-
7,187
1,360,077
895,986
4,050,000
49,021
6,355,084
20,196
7,046
27,242
3,343,628
6,382,326
412,355
51,679
464,034
22,929
22,929
486,963
2,856,665
17,039,590
553,342
(14,736,267)
2,856,665
364,551
88,269
452,820
13,939
13,939
466,759
5,915,567
16,941,392
499,070
(11,524,895)
5,915,567
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
ANATARA LIFESCIENCES Annual Report 2020 31
Consolidated statement of changes in equity
For the year ended 30 June 2020
Attributable to owners of Anatara Lifesciences Ltd
Notes
Share capital
$
Other reserves
$
Accumulated
losses
$
Total equity
$
16,941,392
583,749
(8,937,691)
8,587,450
-
-
-
-
-
-
(2,868,272)
(2,868,272)
(2,868,272)
(2,868,272)
196,389
(281,068)
-
196,389
281,068
-
16,941,392
499,070
(11,524,895)
5,915,567
7(b)
7(b)
Attributable to owners of Anatara Lifesciences Ltd
Notes
Share capital
$
Other reserves
$
Accumulated
losses
$
Total equity
$
16,941,392
499,070
(11,524,895)
5,915,567
-
-
98,198
-
-
-
7(b)
7(b)
-
-
207,544
(153,272)
(3,364,644)
(3,364,644)
(3,364,644)
(3,364,644)
-
-
153,272
98,198
207,544
-
17,039,590
553,342
(14,736,267)
2,856,665
Balance at 1 July 2018
Loss for the period
Total comprehensive loss for
the period
Transactions with owners in
their capacity as owners:
Options issued/expensed
Options forfeited/lapsed
Balance at 30 June 2019
Balance at 1 July 2019
Loss for the period
Total comprehensive loss
for the period
Share based payment expense
– performance rights
Transactions with owners in
their capacity as owners:
Options issued/expensed
Options forfeited/lapsed
Balance at 30 June 2020
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
32
Consolidated statement of cash flows
For the year ended 30 June 2020
Notes
2020
$
2019
$
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Government grants and tax incentives
-
(3,745,235)
95,376
924,960
Net cash (outflow) from operating activities
8(a)
(2,724,899)
Cash flows from investing activities
669,872
(4,397,727)
188,662
1,301,538
(2,237,655)
Payments for investment in term deposits
(1,500,000)
(7,050,000)
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds from withdrawal from term deposits
Net cash inflow from investing activities
Net cash inflow (outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning
of the financial year
Cash and cash equivalents at end of year
5(a)
(4,076)
1,266
5,550,000
4,047,190
-
1,322,291
1,360,077
2,682,368
-
-
9,200,000
2,150,000
-
(87,655)
1,447,732
1,360,077
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
ANATARA LIFESCIENCES Annual Report 2020 Contents of the notes to
the financial statements
1.
Segment information
2. Revenue from contract with customers
3. Other income and expense items
4.
5.
Income tax expense
Financial assets and financial liabilities
6. Non-financial assets and liabilities
7.
Equity
8. Cash flow information
9. Critical estimates, judgements and errors
10. Financial risk management
11. Capital management
12.
Interests in other entities
13. Contingent liabilities
14. Commitments
15. COVID-19 impact on business
16. Events occurring after the reporting period
17. Related party transactions
18. Share-based payments
19. Remuneration of auditors
20. Loss per share
21. Parent entity financial information
22. Summary of significant accounting policies
33
34
34
35
37
38
39
40
42
42
43
45
46
46
46
47
47
47
48
50
51
51
53
34
1. Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Chief Executive Officer of Anatara Lifesciences Ltd. The Group has identified one
reportable segment; that is, the research, development of oral solutions for gastrointestinal diseases and the commercialisation
of the Detach® diarrhea treatment for piglets. The segment details are therefore fully reflected in the body of the financial
statements.
2. Revenue from contract with customers
A. Disaggregation of revenue from contracts with customers
The Group derives revenue from the licensing of its intellectual property over time:
Licensing fees
B. Accounting policies
(i) Licensing revenue
2020
$
-
-
2019
$
663,405
663,405
The Group signed a license, development and commercialisation agreement with Zoetis Services LLC (Zoetis) on 10 May
2018 for the Group’s Detach® product. The first milestone payment of US$2,500,000 was payable upfront at the effective
date of the agreement signed 10 May 2018 (funds were received in July 2018). This comprised consideration for the rights
granted, subject to the terms and conditions of the agreement. Of this amount, US$2,000,000 offset the previously paid
option and evaluation agreement entered into in 2016. The balance of US$500,000 (equivalent to A$669,872) was to be
recognised as revenue over time to 26 October 2032 to reflect the license access rights transferred to Zoetis over the
term of the license agreement. The unearned revenue was recognised as deferred revenue.
On 14 June 2019, the Group announced Zoetis had given notice of termination of the Detach® licensing agreement.
Under the terms of the original agreement, the first milestone payment is non-refundable. Accordingly, the $663,405
deferred revenue amount recognised at 30 June 2018 was recognised as revenue in the year ended 30 June 2019.
ANATARA LIFESCIENCES Annual Report 2020 35
3. Other income and expense items
A. Other income
Research and development tax incentive
EMDG
COVID-19 government assistance
(i) Fair value of R&D tax incentive
2020
$
659,812
27,634
101,765
789,211
2019
$
840,932
36,641
-
877,573
The Group’s research and development (R&D) activities are eligible under an Australian government tax incentive for
eligible expenditure. Management has assessed these activities and expenditure to determine which are likely to be
eligible under the incentive scheme. Amounts are recognised when it has been established that the conditions of the
tax incentive have been met and that the expected amount can be reliably measured. For the year ended 30 June 2020,
the Group has included an item in other income of $659,812 (2019: $840,932) to recognise income over the period
necessary to match the grant on a systematic basis with the costs that they are intended to compensate.
(ii) Fair value of EMDG and COVID-19 government assistance
The Group’s other grant income is recognised when compliance with the conditions attached to the grant have been
determined and the Group has ascertained the grant will be received. For the year ended 30 June 2020, the Group has
included an item in other income of $129,399 (2019: $36,641) to recognise income over the period necessary to match
the grant on a systematic basis with the costs that they are intended to compensate.
The Group recognised $27,634 Export Market Development Grant (EMDG) (2019: $36,641) in other income. This is a key
Australian Government financial assistance program for aspiring current exporters.
COVID-19 government assistance $101,765 is included in other income. This includes $62,500 “Cashflow boost for
employers” measure announced as part of the Australian Government’s economic stimulus package of March 2020, as
well as $39,265 payroll tax waived credit and deferrals. This is the coronavirus payroll tax relief provided by various State
Revenue Office for the 2019-20 financial year.
36
B. Breakdown of expenses by nature
General and administrative expenses
Accounting and audit
Consulting
Depreciation
Employee benefits
Insurance
Investor relations
Legal
Listing and share registry
Occupancy
Share-based payments
Superannuation
Travel and entertainment
Other
Research and development expenses
Project research and development
Corporate and finance
Notes
18(b)
2020
$
148,094
335,713
16,098
1,452,317
57,312
120,188
33,821
68,686
93,767
305,744
138,897
32,508
113,833
2019
$
247,998
233,469
22,728
2,044,647
59,046
280,739
92,205
69,607
25,215
196,389
170,281
210,178
122,993
2,916,978
3,775,495
1,240,834
48,107
1,288,941
754,414
21,842
776,256
ANATARA LIFESCIENCES Annual Report 2020 37
4. Income tax expense
A. Numerical reconciliation of income tax expense
to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
R&D tax incentive
Accounting expenditure subject to R&D tax incentive
Blackhole expenditure (Section 40-880, ITAA 1997)
Deferred revenue
Share-based payments
Other items
Subtotal
Tax losses and other timing differences for which no deferred tax
asset is recognised
Income tax expense
B. Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
Potential tax benefit @ 27.5%
2020
$
(3,364,644)
(925,277)
2019
$
(2,868,272)
(788,775)
(181,448)
417,122
(32,222)
-
84,080
3,759
(633,986)
633,986
-
2020
$
8,549,841
2,351,206
(231,256)
531,624
(73,819)
(182,436)
54,007
(18,354)
(709,009)
709,009
-
2019
$
6,168,136
1,696,237
The numerical reconciliation of income tax expense to prima facie tax payable and unused tax losses for the year ended
30 June 2019 have been represented to reflect the income tax return lodged for the same period.
38
5. Financial assets and financial liabilities
A. Cash and cash equivalents
Current assets
Cash at bank and in hand
(i) Reconciliation to cash flow statement
2020
$
2019
$
2,682,368
1,360,077
The above figures reconcile to the amount of cash shown in the consolidated statement of cash flows at the end of the
financial year as follows:
Balances as above
Balances per statement of cash flows
(ii) Classification as cash equivalents
2020
$
2,682,368
2,682,368
2019
$
1,360,077
1,360,077
Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition
and are repayable with 24 hours notice with no loss of interest. See note 22(j) for the Group’s other accounting policies
on cash and cash equivalents.
(iii) Risk exposure
The Group’s exposure to interest rate risk is discussed in note 10. The maximum exposure to credit risk at the end of the
reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.
B. Trade and other receivables
2020
2019
Current
$
Non-current
$
Total
$
Current
$
Non-current
$
Accrued receivables (i)
630,333
Other receivables
-
630,333
(i) Accrued receivables
-
-
-
630,333
848,659
-
47,327
630,333
895,986
-
-
-
Total
$
848,659
47,327
895,986
Accrued receivables include $612,967 from the Australian Taxation Office in relation to the R&D tax incentive (2019:
$800,481), $12,500 cash boost in relation to the COVID-19 relief, and $4,866 interest income from deposits at call with
terms greater than three months (2019: $48,178).
(ii) Fair value of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their
fair value.
ANATARA LIFESCIENCES Annual Report 2020 39
C. Other financial assets at amortised cost
(i) Classification of financial assets at amortised cost
The Group classifies its financial assets as at amortised cost only if both of the following criteria are met:
•
•
the asset is held within a business model whose objective is to collect the contractual cash flows, and
the contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets at amortised cost comprise the following debt investments:
2020
2019
Current
$
Non-current
$
Total
$
Current
$
Non-current
$
Total
$
Deposits at call
-
-
-
-
-
-
4,050,000
4,050,000
-
-
4,050,000
4,050,000
(ii) Impairment and risk exposure
All of the financial assets at amortised cost are denominated in Australian dollars. As a result, there is no exposure to foreign
currency risk.
D. Trade and other payables
Trade payables
Accrued expenses
Other payables
2020
2019
Current
$
Non-current
$
Total
$
Current
$
Non-current
$
33,861
351,875
26,619
412,355
-
-
-
-
33,861
116,764
351,875
214,617
26,619
33,170
412,355
364,551
-
-
-
-
Total
$
116,764
214,617
33,170
364,551
Trade payables are unsecured and are usually paid within 30 days of recognition.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-
term nature.
6. Non-financial assets and liabilities
A. Employee benefit obligations
2020
2019
Current
$
Non-current
$
Total
$
Current
$
Non-current
$
Total
$
Leave obligations (i)
51,679
22,929
74,608
88,269
13,939
102,208
40
(i) Leave obligations
The leave obligations cover the Group’s liabilities for long service leave and annual leave which are classified as either
other long-term benefits or short-term benefits, as explained in note 22(p).
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service
leave where employees have completed the required period of service and also for those employees that are entitled to
pro-rata payments in certain circumstances. The entire amount of the provision of $51,679 (2019: $88,269) is presented as
current, since the Group does not have an unconditional right to defer settlement for any of these obligations. However,
based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require
payment within the next 12 months.
7. Equity
A. Share capital
Ordinary shares
Fully paid
2020
Shares
2019
Shares
2020
2019
$
$
49,856,177
49,413,236
17,039,590
16,941,392
49,856,177
49,413,236
17,039,590
16,941,392
(i) Movements in ordinary shares:
Below is the movement in ordinary shares in the year ended 30 June 2020 (2019: nil):
Details
Balance at 1 July 2018
Balance at 30 June 2019
Exercise of performance rights at $0.227 (2019-10-31)
Exercise of performance rights at $0.205 (2019-11-22)
Exercise of performance rights at $0.227 (2019-12-10)
Exercise of performance rights at $0.227 (2020-01-15)
Number of shares
$
Total
49,413,236
49,413,236
149,457
106,810
82,599
104,075
16,941,392
16,941,392
33,927
21,896
18,750
23,625
Balance 30 June 2020
49,856,177
17,039,590
ANATARA LIFESCIENCES Annual Report 2020 41
(ii) Ordinary shares
Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
(iii) Options
Information relating to options, including details of options issued, exercised and lapsed during the financial year and
options outstanding at the end of the reporting period is set out in note 7(b).
B. Other reserves
The consolidated statement of financial position line item ‘other reserves’ comprises the ‘share-based payments reserve’.
(i) Nature and purpose of other reserves
Share-based payments
The share-based payment reserve records items recognised as expenses on valuation of share options issued to key
management personnel, other employees and eligible contractors.
(ii) Movement in options
Details
Opening balance 1 July 2018
Options issued during the period
Share-based payment expenses of previously issued options
Forfeited/lapsed during the year
Balance 30 June 2019
Issue of unlisted option at $0.2305 (2020-06-22)
Share-based payment expenses of previously issued options
Share-based payments expenses of performance bonus
Options cancelled during the year
Balance 30 June 2020
Number of shares
2,436,000
1,725,000
-
(1,590,000)
2,571,000
761,912
-
-
(412,500)
2,920,412
Total
$
583,749
143,476
58,171
(286,326)
499,070
4,608
81,646
124,408
(156,390)
553,342
42
8. Cash flow information
A. Reconciliation of profit/(loss) after income tax to net cash inflow
from operating activities
Loss for the period
Adjustments for
Depreciation and amortisation
Net (gain) loss on sale of non-current assets
Share-based payments
Change in operating assets and liabilities:
Movement in trade and other receivables
Movement in other operating assets
Movement in trade and other payables
Movement in other operating liabilities
Notes
3(b)
18(b)
2020
$
2019
$
(3,364,644)
(2,868,272)
16,098
(280)
305,744
265,653
32,327
47,803
(27,600)
22,728
-
196,389
1,144,258
25,438
(54,962)
(703,234)
Net cash inflow (outflow) from operating activities
(2,724,899)
(2,237,655)
The Company has reclassified certain cash flow items in prior year comparatives in order to be consistent with the
current year classification and presentation.
B. Non-cash investing and financing activities
Non-cash investing and financing activities disclosed in other notes are:
• options issued for no cash consideration – note 18.
9. Critical estimates, judgements and errors
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal
the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which
are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information
about each of these estimates and judgements is included in other notes together with information about the basis of
calculation for each affected line item in the financial statements. In addition, this note also explains where there have
been actual adjustments this year as a result of an error and of changes to previous estimates.
ANATARA LIFESCIENCES Annual Report 2020 43
A. Significant estimates and judgements
The areas involving significant estimates or judgements are:
• Estimation of R&D tax incentive income accrual – note 3(a)(i)
• Estimation of other grants income accrual – note 3(a)(ii)
• Estimation of employee benefit obligations – note 6(a)(i)
• Estimation of share-based payments – note 18
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
10. Financial risk management
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial
performance.
The Group’s risk management is predominantly controlled by the board. The board monitors the Group’s financial risk
management policies and exposures and approves substantial financial transactions. It also reviews the effectiveness of
internal controls relating to market risk, credit risk and liquidity risk.
A. Market risk
(i) Foreign exchange risk
The majority of the company’s operations are denominated in Australian dollars, with the few exceptions on services
acquired from overseas suppliers but at a marginally insignificant amount and frequency. Therefore, management has
concluded that market risk from foreign exchange fluctuation is not material.
(ii) Cash flow and fair value interest rate risk
The Group’s main interest rate risk arises from cash and cash equivalents and other financial assets at amortised cost
(deposits at call) held, which expose the Group to cash flow interest rate risk. During 2020 and 2019, the Group’s cash
and cash equivalents and deposits at call at variable rates were denominated in Australian dollars.
The Group’s exposure to interest rate risk at the end of the reporting period, expressed in Australian dollars, was as
follows:
Financial instruments with cash flow risk
Cash and cash equivalents
Financial assets at amortised cost
2020
$
2,682,368
-
2,682,368
2019
$
1,360,077
4,050,000
5,410,077
44
Sensitivity
Profit or loss is sensitive to higher/lower interest income from cash and cash equivalents as a result of changes in
interest rates.
Impact on loss for the period
2020
$
2019
$
6,706
10,820
Impact on other components of
equity
2020
$
-
2019
$
-
Interest rates – change by 25 basis
points (2019: 20 basis points)*
* Holding all other variables constant
The use of 0.25 percent (2019: 0.20 percent) was determined based on analysis of the Reserve Bank of Australia cash rate
change, on an absolute value basis, at 30 June 2020 and the previous four balance dates. The average cash rate at these
balance dates was 1.25 percent (2019: 1.60 percent). The average change to the cash rate between balance dates was
24.69 percent (2019: 12.69 percent). By multiplying these two values, the interest rate risk was derived.
Profit is less sensitive to movements in interest rates in 2020 than 2019 due to decreased cash and cash equivalents and
deposits at call as well as low interest rate. The Group’s exposure to other classes of financial instruments with cash flow
risk is not material.
B. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counter parties of contract
obligations that could lead to a financial loss to the Group.
(i) Risk management
The company manages credit risk and the losses which could arise from default by ensuring that financial assets such as
cash at bank and deposits at call are held with reputable organisations.
(ii) Impairment of financial assets
While cash and cash equivalents and term deposits are subject to the impairment requirements of AASB 9, the identified
impairment loss was immaterial.
C. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
• preparing forward looking cash flow analyses in relation to its operating, investing and financing activities;
• obtaining funding from a variety of sources;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
investing cash and cash equivalents and deposits at call with major financial institutions; and
• comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
ANATARA LIFESCIENCES Annual Report 2020
45
(i) Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.
Contractual
maturities of
financial liabilities
Less than 6
months
6-12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
At 30 June 2020
$
Trade and other
payables
Total
At 30 June 2019
Trade and other
payables
Total
412,355
412,355
364,551
364,551
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
Total
contractual
cash flows
Carrying
amount
(assets)/
liabilities
$
$
412,355
412,355
412,355
412,355
364,551
364,551
364,551
364,551
11. Capital management
A. Risk management
The Group’s objectives when managing capital are to
•
safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders
and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the Group may issue new shares or reduce its capital, subject to the
provisions of the Group’s constitution. The capital structure of the Group consists of equity attributed to equity holders
of the Group, comprising contributed equity, reserves and accumulated losses. By monitoring undiscounted cash flow
forecasts and actual cash flows provided to the board by the Group’s management, the board monitors the need to raise
additional equity from the equity markets.
As at 30 June 2020, the Group held cash and equivalents of $2.68 million. The Group has put in place measures to reduce
all non-critical expenditure. The Group anticipates a delay, to the second half of 2020, for the commencement of its
clinical trial in irritable bowel syndrome (IBS) for its Gastrointestinal ReProgramming (GaRP) over-the-counter medicine.
The anticipated delay clinical trial extends the Group’s cash runway, and the Group will review funding needs in the
second half of the year.
B. Dividends
No dividends were declared or paid to members for the year ended 30 June 2020 (2019: nil). The Group’s franking
account balance was nil at 30 June 2020 (2019: nil).
46
12. Interests in other entities
A. Subsidiaries
The Group’s principal subsidiaries at 30 June 2020 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held
equals the voting rights held by the Group. The country of incorporation or registration is also their principal place
of business.
Name of entity
Place of business/ country of incorporation
Ownership interest held by the Group
Sarantis Pty Ltd
Australia
13. Contingent liabilities
The Group had no contingent liabilities at 30 June 2020 (2019: nil).
14. Commitments
2020
%
2019
%
100
100
A. Non-cancellable short-term and immaterial leases
The company leases a laboratory under non-cancellable leases expiring on 30 November 2020. On renewal, the terms
of the lease is renegotiated.
Commitments for minimum lease payments in relation to non-cancellable
leases are payable as follows:
Within one year
Later than one year but not later than five years
2020
$
2019
$
32,402
-
32,402
80,761
32,402
113,163
ANATARA LIFESCIENCES Annual Report 2020 47
15. COVID-19 impact on business
Anatara Lifesciences remains committed to its corporate strategy and focused on delivering on its anticipated milestones
during the year ahead. However, the Company is actively planning for disruptions that may lead to delays in meeting
some of these objectives.
The company received financial support from Federal Government incentives through Cashflow Boost and, through
payroll tax refunds and deferrals by state governments. Anatara recorded other income of $101,765 for these items.
Anatara did not participate in JobKeeper and has not terminated any employees during this period. Anatara employees
have been able to continue laboratory-based activities and as a result have advanced GaRP to being clinical trial ready.
In addition, new bromelain-based formulations were developed for challenge trials in piglets (in-feed) and in poultry.
16. Events occurring after the reporting period
No matter or circumstance has occurred subsequent to period end that has significantly affected, or may significantly
affect, the operations of the Group, the results of those operations or the state of affairs of the Group or economic entity
in subsequent financial years.
17. Related party transactions
A. Subsidiaries
Interests in subsidiaries are set out in note 12(a).
B. Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payments
2020
$
1,226,979
107,112
6,363
-
285,873
1,626,327
2019
$
1,452,327
138,919
5,355
125,000
111,618
1,833,219
Detailed remuneration disclosures are provided in the remuneration report on pages 13 to 22.
48
C. Transactions with other related parties
The following transactions occurred with related parties:
Sales and purchases of goods and services
Purchases of various goods and services from entities
controlled by key management personnel (i)
$
$
2020
2019
-
20,000
(i) Purchases from entities controlled by key management personnel
In 2019 Mr Iain Ross (resigned 30 September 2018) received $20,000 consultancy fees from the Group.
18. Share-based payments
A. Executive option plan
The establishment of the ‘executive option plan’ (EOP) was approved by shareholders at the 2017 annual general meeting.
The plan is designed to provide long-term incentives for executives (including directors) to deliver long-term shareholder
returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the
plan or to receive any guaranteed benefits.
Set out below are summaries of options granted under the plan:
2020
2019
Average exercise
price per share
option
Number of options
Average exercise
price per share
option
Number of options
$1.41
$0.23
-
$1.58
$1.33
$1.34
2,571,000
761,912
$1.35
$1.00
2,436,000
1,725,000
-
$0.98
(1,590,000)
(412,500)
2,920,412
1,946,500
-
$1.41
$1.37
-
2,571,000
1,727,000
As at 1 July
Granted during the
year
Forfeited/lapsed
during the year
Cancelled during
the year
As at 30 June
Vested and
exercisable at 30
June
The forfeited/lapsed options were fully vested before they forfeited/lapsed.
ANATARA LIFESCIENCES Annual Report 2020 Share options outstanding at the end of the year have the following expiry date and exercise prices:
49
Vesting date
Expiry date
Number
Exercise price ($)
Grant date
2015-12-14
2015-12-14
2015-12-14
2016-12-14
2017-12-14
2018-12-14
2020-12-14
2020-12-14
2020-12-14
2016-09-23
2019-09-23
2021-09-23
2017-11-28
2017-11-28
2017-11-28
2018-09-10
2019-04-10
2019-04-10
2019-04-10
2018-11-17
2019-11-17
2020-11-17
2018-09-10
2019-02-18
2020-02-18
2021-02-18
2022-11-17
2022-11-17
2022-11-17
2020-12-14
2024-02-17
2024-02-17
2024-02-17
2020-06-22
2020-09-01
2022-08-31
2020-06-22
2020-11-26
2022-11-25
Total
Weighted average remaining contractual life of options outstanding
at end of period
180,000
180,000
202,500
210,000
12,000
12,000
12,000
750,000
200,000
200,000
200,000
383,527
378,385
2,920,412
2020
1.67
1.450
1.450
1.450
1.700
2.270
2.270
2.270
1.450
0.736
0.740
0.740
0.231
0.231
2019
2.36
50
B. Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Performance rights issued under EOP1
Options issued under EOP2
Performance pay3
$
$
2020
2019
98,198
83,138
124,408
305,744
-
196,389
-
196,389
1. During the year it was agreed that 50% of performance pay for key management personnel relating to the year ended
30 June 2019 would be paid out in performance rights rather than cash. 336,131 performance rights were valued at
$0.227 each and 106,810 performance rights were valued at $0.205, total performance rights value was $98,198. $0.227
was the VWAP at the date the terms were agreed being 23 September 2019, and $0.205 was the VWAP at the date the
terms were agreed being 11 November 2019.
2. In June 2020 the board resolved to issue options to key management personnel for salary and directors fee reduction
in the year ended 30 June 2020. These options were valued at $0.0737 each with a total value of $56,182. $0.0737 was
the VWAP at the date the terms were proposed being 22 June 2020. Formal approval for $26,076 options to be issued to
directors is expected at the AGM post year-end.
3. In June 2020 it was agreed that performance pay for selected employees for the year ended 30 June 2020 would
be paid in performance rights rather than cash. These performance rights were valued at $0.137 each with a total value
of $124,408. $0.137 was the VWAP at the date the terms were agreed being 20 July 2020. Performance rights issued to
employees are long-term incentives under the Executive Option Plan.
19. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
A. Grant Thornton Audit Pty Ltd
(i) Audit and other assurance services
Audit and review of financial statements
Total remuneration for audit and other assurance
services
2020
$
38,500
38,500
2019
$
56,031
56,031
ANATARA LIFESCIENCES Annual Report 2020 (ii) Taxation services
Tax compliance services
Total remuneration for taxation services
Total auditor’s remuneration
2020
$
34,350
34,350
72,850
51
2019
$
24,000
24,000
80,031
It is the Group’s policy to employ Grant Thornton Audit Pty Ltd on assignments additional to their statutory audit duties
where Grant Thornton Audit Pty Ltd’s expertise and experience with the Group are important. These assignments are
principally tax advice.
20. Loss per share
A. Reconciliation of loss used in calculating loss per share
Basic and diluted loss per share
Loss attributable to the ordinary equity holders of the company used
in calculating loss per share:
From continuing operations
3,364,644
2,868,272
2020
$
2019
$
B. Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted loss per share
49,670,261
49,413,236
On the basis of the Group’s losses, the outstanding options as at 30 June 2020 are considered to be anti-dilutive and
therefore were excluded from the diluted weighted average number of ordinary shares calculation.
2020
Number
2019
Number
21. Parent entity financial information
A. Summary financial information
The individual financial statements for the parent resemble the consolidated financial statements as the company’s
subsidiary, Sarantis Pty Ltd is a dormant entity.
52
B. Guarantees entered into by the parent entity
The parent entity has not entered into any guarantees in relation to debts of its subsidiaries in the year ended 30 June
2020 (2019: nil).
C. Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.
D. Contractual commitments for the acquisition of property, plant or
equipment
The parent entity has not entered into any contractual commitments for the acquisition of property, plant or equipment
in the year ended 30 June 2020 (2019: nil).
E. Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements, except as set out below.
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of Anatara Lifesciences Ltd.
(ii) Tax consolidation legislation
Anatara Lifesciences Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation.
The head entity, Anatara Lifesciences Ltd, and the controlled entities in the tax consolidated Group account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated Group
continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Anatara Lifesciences Ltd also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled
entities in the tax consolidated Group.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate
Anatara Lifesciences Ltd for any current tax payable assumed and are compensated by Anatara Lifesciences Ltd for any
current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to
Anatara Lifesciences Ltd under the tax consolidation legislation. The funding amounts are determined by reference to the
amounts recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the
head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require
payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current
amounts receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
ANATARA LIFESCIENCES Annual Report 2020 Contents of the summary of significant
accounting policies
A. Basis of preparation
B. Principles of consolidation
C. Segment reporting
D. Foreign currency translation
E. Revenue recognition
F. Government grants
G.
Income tax
H. Leases
I.
Impairment of non-financial assets
J. Cash and cash equivalents
K. Trade receivables
L.
Investments and other financial assets
M. Property, plant and equipment
N.
Intangible assets
O. Trade and other payables
P.
Employee benefits
Q. Contributed equity
R. Dividends
S.
Loss per share
T. Rounding of amounts
U. Goods and services tax (GST)
53
54
56
56
56
56
56
57
57
57
58
58
58
59
60
60
60
61
61
61
62
62
54
22. Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been
consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group
consisting of Anatara Lifesciences Ltd and its subsidiaries.
A. Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Anatara Lifesciences
Ltd is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Anatara Lifesciences Ltd Group also comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis.
(iii) Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a loss of $3,364,644 and had operating cash outflows of
$2,724,899 for the year ended 30 June 2020. As at 30 June 2020, the Group’s held cash and cash equivalents of $2,682,368.
In the process of approving the Group’s internal forecast and business plan for upcoming financial years, the board has
considered the cash position of the Group within the next 12 months from the date of this report. The Group’s internal
forecast and business plan for the upcoming financial year does not include capital raising.
The Group’s internal forecast and business plan for upcoming financial year does include approximately $400,000 from
the R&D Tax Incentive relating to anticipated approval of an Overseas Finding that has been submitted. The directors are
confident, if necessary, the company could raise additional capital to meet the Group’s contractual commitments and
working capital requirements. Notwithstanding the uncertainty over either of these events occurring, based on the above
considerations, the board has assessed the resources and opportunities available to the Group, and consequently believe
that the Group will be able to repay its debts as and when they fall due and are of the opinion that the financial statements
have been appropriately prepared on a going concern basis.
ANATARA LIFESCIENCES Annual Report 2020 55
COVID-19
The World Health Organisation declared the outbreak of a novel coronavirus (COVID-19) as a pandemic.
In 2020 the Group received financial support from Federal Government incentives through Cashflow Boost and, through
payroll tax refunds and deferrals by state governments. Anatara recorded other income of $101,765 for these items.
Anatara did not participate in JobKeeper and has not terminated any employees during this period.
Anatara employees have been able to continue laboratory-based activities and as a result have advanced GaRP to being
clinical trial ready. In addition, new bromelain-based formulations were developed for challenge trials in piglets (in-feed)
and in poultry.
Anatara anticipates renewed interest in partnering Detach® upon successful completion of challenge trials. Anatara will
continue to execute its human health development plans, and in parallel, the Company has prioritised out-licensing both
its animal health and human health assets.
The spread of Covid-19 has resulted in significant uncertainty around the breadth and duration of business disruptions.
Anatara is unable to determine whether it will have a material impact to its operations. However, at this stage the directors
do not believe this will impact the going concern of the company.
(iv) New and amended standards adopted by the Group
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 ‘Leases’ and for lessees eliminates
the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets,
right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line
operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets and an interest
expense on the recognised lease liabilities.
In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared
to lease expenses under AASB 117. However, EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) results
improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For lessor
accounting, the standard does not substantially change how a lessor accounts for leases.
In applying AASB 16 for the first time, the Group has used the practical expedients permitted by the standard whereby
short-term and low value leases are exempt and all other leases have been deemed immaterial. Therefore there has been
no impact from the adoption of AASB16 in this reporting period.
Interpretation 23 Uncertainty over Income Tax Treatments
Interpretation 23 requires the assessment of whether the effect of uncertainty over income tax treatments should be
included in the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. The
Interpretation outlines the requirements to determine whether an entity considers uncertain tax treatments separately, the
assumptions an entity makes about the examination of tax treatments by taxation authorities, how an entity determines
taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates and how an entity considers changes
in facts and circumstances.
The Group has adopted Interpretation 23 from 1 July 2019, based on an assessment of whether it is ‘probable’ that a
taxation authority will accept an uncertain tax treatment. This assessment takes into account that for certain jurisdictions
in which the Group operates, a local tax authority may seek to open a Group’s books as far back as inception of the
Group. Where it is probable, the Group has determined tax balances consistently with the tax treatment used or planned
to be used in its income tax filings. Where the Group has determined that it is not probable that the taxation authority will
accept an uncertain tax treatment, the most likely amount or the expected value has been used in determining taxable
balances (depending on which method is expected to better predict the resolution of the uncertainty). There has been
no impact from the adoption of Interpretation 23 in this reporting period.
56
B. Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
C. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. This has been identified as the chief executive officer.
D. Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollar ($), which is Anatara Lifesciences Ltd’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally
recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated income statement, within
finance costs. All other foreign exchange gains and losses are presented in the consolidated income statement on a net
basis within other gains/(losses).
E. Revenue recognition
The accounting policies for the Group’s revenue from contracts with customers are explained in note 2.
F. Government grants
Transactions involving government grants received are accounted for by applying AASB 120 Government Grants. Grants
from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Group will comply with all attached conditions. Note 3 provides further information on how the Group
accounts for government grants.
ANATARA LIFESCIENCES Annual Report 2020 57
G. Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the company and its subsidiaries and associates operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
H. Leases
Policies from 1 July 2019
The Group has adopted AASB 16 from 1 July 2019. With the exception of short-term, low value and immaterial leases,
right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-
line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs).
Payments associated with short-term leases, low value and immaterial leases are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Polices prior to 1 July 2019
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases (note 14). Payments made under operating leases (net of any incentives received from the
lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
I. Impairment of non-financial assets
Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period.
58
J. Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the
consolidated statement of financial position.
K. Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less loss allowance. See note 5(b) for further information about the Group’s accounting for trade
receivables and note 10(b) for a description of the Group’s impairment policies.
L. Financial assets
(i) Classification
The Group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through OCI or through profit or loss), and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms
of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election
at the time of initial recognition to account for the equity investment at fair value through other comprehensive income
(FVOCI).
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits
to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial
assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of
ownership.
(iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
ANATARA LIFESCIENCES Annual Report 2020 59
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt
instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as separate line item in the consolidated income statement.
• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and
foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other
gains/(losses). Interest income from these financial assets is included in finance income using the effective interest
rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are
presented as separate line item in the consolidated income statement.
• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt
investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/
(losses) in the period in which it arises.
(iv) Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried
at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
(v) Income recognition
Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired, the Group reduces the
carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective
interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired
loans is recognised using the original effective interest rate.
M. Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
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 Group and the cost of the item
can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount (note 22(i)).
60
N. Intangible assets
(i) Research and development
Expenditure on research activities, undertaken with the prospect of obtaining new scientific or technical knowledge
and understanding, is recognised in the consolidated statement of profit or loss and other comprehensive income as an
expense when it is incurred.
Expenditure on development activities, being the application of research findings or other knowledge to a plan or design
for the production of new or substantially improved products or services before the start of commercial production
or use, and other development expenditure, is recognised in the consolidated statement of profit or loss and other
comprehensive income as an expense as incurred.
O. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables
are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are
recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
P. Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are
expected to be settled wholly within 12 months after the end of the period in which the employees render the related
service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit
obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The Group also has liabilities for long service leave and annual leave that are not expected to be settled wholly within 12
months after the end of the period in which the employees render the related service. These obligations are therefore
measured as the present value of expected future payments to be made in respect of services provided by employees up
to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the end of the reporting period of high-quality corporate bonds with terms and currencies that
match, as closely as possible, the estimated future cash outflows. Remeasurements as a result of experience adjustments
and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right
to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is
expected to occur.
ANATARA LIFESCIENCES Annual Report 2020 61
(iii) Share-based payments
Share-based compensation benefits are provided to employees via the ‘employee option plan’ (EOP). Information relating
to these schemes is set out in note 18.
Employee options
The fair value of options granted under the EOP is recognised as a share-based payment expense with a corresponding
increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:
•
including any market performance conditions (e.g. the company’s share price)
• excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth
targets and remaining an employee of the company over a specified time period), and
•
including the impact of any non-vesting conditions (e.g. the requirement for employees to save or holdings shares for
a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that
are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to
original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Q. Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
R. Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
S. Loss per share
(i) Basic loss per share
Basic loss per share is calculated by dividing:
•
the loss attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year.
(ii) Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss 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.
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
62
T. Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in
the financial statements. Amounts in the financial statements have been rounded off in accordance with the instrument
to the nearest dollar.
U. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Independent Auditor’s Report
To the Members of Anatara Lifesciences Ltd
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the consolidated
statement of financial position.
Report on the audit of the financial report
Opinion
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
Directors’ declaration
In the directors’ opinion:
a)
the financial statements and notes set out on pages 28 to 62 are in accordance with the Corporations Act 2001,
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for
the financial year ended on that date, and
Basis for opinion
b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
Note 22(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
Ms Sue MacLeman
Non-Executive Chair
Melbourne
24 August 2020
We have audited the financial report of Anatara Lifesciences Ltd (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 22(a)(iii) in the financial statements, which indicates that the Group incurred a net loss of
$3,364,644 and had operating cash outflows of $2,724,899 during the year ended 30 June 2020. As at 30 June 2020 the
Group held cash and cash equivalents of $2,682,368. As stated in Note 22(a)(iii), these events or conditions, and other
matters as set forth in Note 22(a)(iii), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
ANATARA LIFESCIENCES Annual Report 2020 63
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Anatara Lifesciences Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of Anatara Lifesciences Ltd (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 22(a)(iii) in the financial statements, which indicates that the Group incurred a net loss of
$3,364,644 and had operating cash outflows of $2,724,899 during the year ended 30 June 2020. As at 30 June 2020 the
Group held cash and cash equivalents of $2,682,368. As stated in Note 22(a)(iii), these events or conditions, and other
matters as set forth in Note 22(a)(iii), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
64
Key audit matters
Responsibilities of the Directors for the financial report
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Recognition of research and development tax incentive –
Notes 3(a)(i), 5(b)(i), and 9(a)
The Group receives a refundable tax offset of eligible
expenditure under the research and development (R&D) tax
incentive scheme. An R&D plan is filed with AusIndustry in the
following financial year and, based on this filing, the Group
receives the incentive in cash.
Management perform a detailed review of the Group’s total
research and development expenditure to determine the
potential claim under the R&D tax incentive legislation.
The Group recognises R&D tax incentive rebate income on an
accruals basis, meaning that a receivable is recorded at the
balance date based on the estimated amount that is yet to be
received from the Australian Taxation Office for the period 1
July 2019 to 30 June 2020.
This area is a key audit matter due to the degree of judgement
and interpretation of the R&D tax legislation required by
management to assess the eligibility of the R&D expenditure
under the scheme.
Our procedures included, amongst others:
Obtaining the R&D incentive calculations prepared by
management and engaging an internal R&D Tax
Expert to assist the engagement team in assessing
the reasonableness of the estimate;
Comparing the nature of the R&D expenditure
included in the current year estimate to the prior year
approved claim;
Comparing the estimates made in previous years to
the amount of cash actually received after lodgement
of the R&D tax claim;
Considering the nature of the expenses against the
eligibility criteria of the R&D tax incentive scheme to
form a view about whether the expenses included in
the estimate are likely to meet the eligibility criteria;
Assessing the eligible expenditure used to calculate
the estimate to ensure it is in accordance with
expenditure recorded in the general ledger;
Agreeing a sample of individual expenditure items
included in the estimate to underlying supporting
documentation to ensure that they have been
appropriately recognised in the accounting records
and that they are eligible expenditures;
Inspecting copies of relevant correspondence with
AusIndustry and the ATO related to the claims; and
Reviewing the appropriateness of the relevant
disclosures in the financial statements.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 24 August 2020
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
2020.
Responsibilities
We have audited the Remuneration Report included in pages 13 to 22 of the Directors’ report for the year ended 30 June
In our opinion, the Remuneration Report of Anatara Lifesciences Ltd, for the year ended 30 June 2020 complies with
section 300A of the Corporations Act 2001.
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
ANATARA LIFESCIENCES Annual Report 2020 65
Key audit matters
Responsibilities of the Directors for the financial report
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
The Group recognises R&D tax incentive rebate income on an
Comparing the estimates made in previous years to
Recognition of research and development tax incentive –
Notes 3(a)(i), 5(b)(i), and 9(a)
The Group receives a refundable tax offset of eligible
expenditure under the research and development (R&D) tax
incentive scheme. An R&D plan is filed with AusIndustry in the
following financial year and, based on this filing, the Group
receives the incentive in cash.
Management perform a detailed review of the Group’s total
research and development expenditure to determine the
potential claim under the R&D tax incentive legislation.
accruals basis, meaning that a receivable is recorded at the
balance date based on the estimated amount that is yet to be
received from the Australian Taxation Office for the period 1
July 2019 to 30 June 2020.
This area is a key audit matter due to the degree of judgement
and interpretation of the R&D tax legislation required by
management to assess the eligibility of the R&D expenditure
under the scheme.
Our procedures included, amongst others:
Obtaining the R&D incentive calculations prepared by
management and engaging an internal R&D Tax
Expert to assist the engagement team in assessing
the reasonableness of the estimate;
Comparing the nature of the R&D expenditure
included in the current year estimate to the prior year
approved claim;
the amount of cash actually received after lodgement
of the R&D tax claim;
Considering the nature of the expenses against the
eligibility criteria of the R&D tax incentive scheme to
form a view about whether the expenses included in
the estimate are likely to meet the eligibility criteria;
Assessing the eligible expenditure used to calculate
the estimate to ensure it is in accordance with
expenditure recorded in the general ledger;
Agreeing a sample of individual expenditure items
included in the estimate to underlying supporting
documentation to ensure that they have been
appropriately recognised in the accounting records
and that they are eligible expenditures;
Inspecting copies of relevant correspondence with
AusIndustry and the ATO related to the claims; and
Reviewing the appropriateness of the relevant
disclosures in the financial statements.
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 13 to 22 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Anatara Lifesciences Ltd, for the year ended 30 June 2020 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
Grant Thornton Audit Pty Ltd
Chartered Accountants
thereon.
conclusion thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
T S Jackman
Partner – Audit & Assurance
Melbourne, 24 August 2020
66
Shareholder Information
The shareholder information set out below was applicable as at 18/8/2020.
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Holding
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 Over
Ordinary shareholders
Ordinary shares
% Units
120
292
177
358
73
1,020
63,936
912,034
1,385,021
11,757,289
35,737,897
49,856,177
-
2
3
24
71
100
There were 241 holders of less than a marketable parcel of ordinary shares.
Equity Security Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
RTL GROUP INVESTMENTS PTY LTD
PARMA CORPORATION PTY LTD
MYENG PTY LTD
UBS NOMINEES PTY LTD
MR IAIN ROSS
KALOKERY PTY LTD
DAVID CHARLES VENABLES
NAVIGATOR AUSTRALIA LTD
BEEBEE HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES
BNP PARIBAS NOMINEES PTY LTD
GENETIC HORIZONS PTY LTD
JACOBY MANAGEMENT SERVICES PTY LIMITED
MATTHEW TURNER
TULIP SUPER PTY LTD
MR BRENDAN PHYLAND
MRS BARBARA GREY
JONTRA HOLDINGS PTY LTD
WOTS IN THERE PTY LTD
DR MARK DANIEL REEVES
No of Shares
% Issued Shares
5,400,000
5,386,274
4,310,011
2,583,113
1,600,000
748,833
719,750
631,327
614,218
598,250
488,682
486,109
485,731
464,102
450,000
447,217
369,755
355,614
330,000
320,614
10.83
10.80
8.64
5.18
3.21
1.50
1.44
1.27
1.23
1.20
0.98
0.98
0.97
0.93
0.90
0.90
0.74
0.71
0.66
0.64
26,789,600
53.71
ANATARA LIFESCIENCES Annual Report 2020 67
ANNUAL REPORT 2020
Anatara Lifesciences Ltd
ABN 41 145 239 872
Level 3, 62 Lygon St,
Carlton South, Victoria, Australia, 3053
(03) 9824 5454