Annual Report
for the year ended 30 June 2020
Adherium Limited • ABN 24 605 352 510
Company Overview
Adherium is a provider of digital health solutions and a
global leader in connected respiratory medical devices,
with more than 170,000 sold globally. The company
develops, manufactures and supplies a broad range of
connected medical devices for respiratory medications
for patients, pharmaceutical companies, healthcare
providers and contract research organisations.
Adherium’s Hailie® solution is designed to achieve better
adherence for patients and provide visibility to parents
and caregivers. It does this by tracking medication use
and reminding the user when it is time to take doses,
and by providing physicians access to usage history to
better understand patients’ patterns in their asthma and
COPD. These tools ultimately enable people who live with
asthma or COPD to more easily manage their condition
alongside their physician.
Table of
Contents
Chairman’s Report
CEO’s Report
Directors’ Report (including Remuneration Report)
Auditor’s Independence Declaration
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
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Australian Securities Exchange Additional Information
02
04
06
20
22
23
24
25
26
45
46
51
Chairman’s
Report
I am pleased to be able to provide the Chairman’s
statement for Adherium and comment on the opportunity
for the business and the progress made in the last twelve
months. Having known Adherium for over five years and
worked extensively in the respiratory and medical device
space there are three primary reasons why I believe that
Adherium has strong prospects for the future:
• the newly introduced US reimbursement framework
for remote patient monitoring;
• the development of a focused, credible and relevant
business strategy; and
• the appointment of a strong, experienced and well
qualified management team to lead the execution
of strategy and operational management of
the business.
Game Change in Environment and Opportunity
The unmet need for better assessment and management
of adherence in the respiratory field remains as critical
today as ever. Approximately $34 billion is estimated
to be spent in the USA on avoidable healthcare costs
for uncontrolled COPD and asthma patients. Patients
and carers struggle with poor inhalation technique
aggravated by the range and complexity of different
devices provided by pharmaceutical companies
Adherium has its proven Hailie® technology designed
to address these issues, and existing industry-leading
clinical evidence of the impact of its use in reducing
symptoms and as well as cost. This has been the case
for a number of years. However, the recent introduction
of reimbursement to physicians for remote patient
monitoring (RPM) greatly increases the motivation for
physicians to employ this technology.
Put simply, reimbursement for RPM is a game changer
for the digital sensor medical device industry and creates
enormous opportunity for Adherium. Adherium is moving
quickly to establish a base for sustained, recurring
revenue streams with business partners who have
well-established direct physician, provider and patient
models. Hailie® has the potential to be the the preferred
respiratory inhalation monitoring system, enabling
better clinical and financial outcomes for physicians,
payers and patients with severe, uncontrolled asthma
and COPD. Additionally, beyond adherence monitoring
Adherium has the potential to leverage our respiratory
channel partner and software technology platform
by adding remote monitoring solutions for a range of
respiratory diagnostics and devices, creating a portfolio
of options for integrated patient assessment, data
analysis and data aggregation. Further opportunities lie
beyond this including the monetization of aggregated
data across multiple sensor platforms and patient
groups along with remote patient monitoring beyond the
respiratory therapeutic area.
2
Prior to 2019 there were no direct financial incentives
for physicians and health care providers to engage
with patients with remote monitoring devices. However,
since 2019 reimbursement codes have been introduced
to pay physicians approximately $1,400 p/a for each
patient utilising RPM devices such as those provided by
Adherium. This, along with the COVID-19 pandemic,
is helping to drive a profound change in patient and
physician behaviour and provides the catalyst for the
adoption of remote monitoring on an unprecedented
scale. We are already seeing a number of companies
accelerating their activities in this space including
monitoring tools providers such as Livongo, and the
addition of remote sensing capabilities by medical
device providers such as Medtronic.
Focused Strategy
Adherium’s strategy has also evolved significantly
combining the learnings from the past with a credible,
relevant and focused approach for the future. The
strategy is clear.
1. To focus on the patient segment with the highest
unmet medical need, i.e. severe asthma and COPD
patients, who incur the largest economic cost to the
healthcare systems. The use of electronic monitoring
tools to assess these patients is now flagged as a
recommended step in the GINA (Global Initiative for
the treatment of asthma) and, with over 1.3 million
severe asthma and COPD patients in the US,
represents a very meaningful segment for the
business.
2. To focus our go-to-market commercial approach
through business partners who are established
and already operate with respiratory physicians
and patients and are thereby positioned to enable
physician and provider access to the US
reimbursement codes. This is being done with our
commercial partners HGE Health and Trudell
Medical’s US Monaghan Medical commercial team.
Adherium will continue to be open to collaborating
with single pharma company sponsors but will
not focus on this as its primary commercial go-to-
market model. Adherium continues to work closely
with AstraZeneca on a number of revenue-generating
projects and is committed to mutually valuable
focused collaboration going forwards.
3. To further differentiate our portfolio of devices and
access the US remote monitoring codes through
the simultaneous collection of physiological measures
(airflow) alongside the existing monitoring of
adherence. At the same time, Adherium is working
with our technology partners Planet Innovation in
Annual Report 2020 Adherium Ltd
Melbourne, upgrading hardware and software
functionality to simplify ease of use, data capture and
reporting for customers and adding the new
physiological measure related to the US reimbursement
codes.
Given the high level of interest in the digital remote
monitoring space competitiveness is an important
consideration for Adherium. Adherium and its strategy
is differentiated in its product offering (proven Hailie®
technology combined with the development of an industry
leading range of physiologically enabled devices in
asthma and COPD), its commercial model partnering
with channel partners rather than pharma sponsors
and open approach to data reporting and portal use
integrating with existing provider platforms as opposed
to limiting usage to an Adherium provided data access
approach and management tool alone. The combination
of differentiation in product technology, business model
and integrated customer solutions approach is compelling
and competitive.
Adherium continues to partner with Summatix, a Class
2 regulated digital device platform, to take advantage
of the emerging opportunities of its proprietary data
related to data monetization. Adherium continues to see
its collaboration with Summatix as an important further
differentiator as we progress with our commercial partners
and move beyond the commercial continuum of initial
patient adoption and population monitoring.
The strategy being adopted by Adherium reflects key
learnings in the business since the IPO. The previous
strategy targeted all asthma patients including the mild
to moderate patient group which appears to be an
attractive proposition given the huge patient numbers.
However, this approach did not target the patients where
symptom control and economic burden are recognised to
be the greatest problem. Adherium previously adopted a
commercial model prioritising individual pharma company
sponsorship. For physicians, patient compliance and
competence of device use is a problem which impacts
the efficacy of multiple devices and is typically not related
to one single branded device. Adherium’s technology
solution, therefore, needs to be available across a wider
range of inhalation devices enabling physicians to have
a range of reliever and maintenance device sensors
that may be used according to the patient’s individual
needs. Additionally, where we previously directly lead the
commercialisation activities, our commercial investment is
now focused in supporting our well-established in market
partners, HGE Health and Trudell. The previous approach
was attractive from the perspective of future margin
generation but unattractive given the significant upfront
financial cost and operational capability, scale and risk
required.
Overall our strategy is well thought through in terms
of phasing and scale-up of investment linked to key
milestones, initially focused over the next two years. It can
be considered in three phases. Phase 1 is the testing and
adaptation of the operational components of the new
US channel partnerships up to the end of CY Q1 2021.
Following that, Phase 2, Adherium should start to see the
initial scaling up of customer and commercial traction,
through its channel partners. From the beginning of 2022,
Phase 3, Adherium should have established and scaling
revenue generation in the US and be in the position to
start to extend its commercial focus outside the US.
Strengthening Leadership and Relevant
Management Capability
As indicated in my introductory words the strengthening
of the leadership team is the third important positive
component to the positive outlook for Adherium going
forwards. With Mike Motion as CEO (UK based), Anne Bell
as CFO (Australia based), Geoff Feakes joining the team
as CTO (Australia based), and Jane Lapon (Canada
based) leading pricing and reimbursement Adherium
now has a management team with over 100 years industry
experience including in the respiratory, pharmaceutical,
drug and device development, remote monitoring, digital
and global commercial arenas. This represent a major
step up in the leadership capability, strategy and sector
relevance of the business alongside my own respiratory
drug device experience and network and the broad
commercial, technology and finance experience of the
existing Board.
A key part of Adherium’s activities this year has been to
secure the necessary financing to support the business.
This has been addressed with the successful refinancing
and rights issue completed in January 2020 raising
$5.4 million. This was followed by the investment of $5
million from the BioScience Managers Translation Fund 1
reflecting their mandate to invest in Australian innovative
technology development activity. On behalf of the Board
I would particularly like to thank all the investors who
have participated in the funding of the business and all
investors for their continued commitment to the business.
I look forward to your on-going support as we seek
additional funding in the future to execute on a path to
profitability.
I would like to thank the Board and Jeremy Curnock Cook,
Bryan Mogridge, Bill Hunter and Bruce McHarrie in
particular, for their significant support in the operational
restructuring and participation in the refinancing of the
business in 2019. I would also like to give a formal note of
thanks on behalf of the Board and all those associated
with Adherium to my predecessor Thomas Lynch, who
sadly passed away in April. In addition, I would like to
thank all the Adherium team who despite the changes
to the business and recent challenges presented
by COVID-19 are highly motivated and engaged in
supporting the new Adherium strategy implementation.
Conclusion
With the turnaround completed, lessons learned and a
revised strategy and team in place, the business is making
positive steps forward. Adherium is now well positioned
to realise its unfulfilled promise. As well as providing US
physicians with a financially attractive tool to improve
patient management Adherium represents a compelling
investment opportunity for investors given comparative
valuations for many companies in the digital health
technology field.
James Ward-Lilley
Non-executive Chairman
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Annual Report 2020 Adherium Ltd
CEO’s
Report
Dear Shareholder
2020 has brought unprecedented challenges and
change across many aspects of our lives – including a
paradigm shift in the way in which medicine is practised
and patients are managed by their doctors. In this
respect, COVID-19 has worked as a positive driver for our
business and I am pleased to report significant progress in
advancing the new growth strategy we defined last year.
Our commercial strategy is focused initially on the USA
and on leveraging Adherium’s technology to address
the high unmet need of patients with severe/difficult-
to-treat asthma and chronic obstructive pulmonary
disease (COPD) – patients who represent a preventable
healthcare cost of US$34 billion. Recent changes to the
US health payment structure work to our advantage, and
we have made great strides in being able to capitalise on
these, with two US respiratory specialist channel partners
signed this year, and funding secured for a research
and development collaboration that will significantly
strengthen our position.
To reframe the reimbursement framework, in 2018,
the Centers for Medicare & Medicaid Services (CMS)
– the single largest payer for health care in the USA
– announced criteria for the reimbursement of remote
patient monitoring (RPM) and telehealth services.
Adherium identified the opportunity this presented – by
adding physiological data capture to existing technology,
our sensors would provide “connected care” and a path to
payment through the RPM Current Procedural Terminology
(CPT) coding system for providers. The value to Adherium
comes not only from the use of our technology, but also
from the data generated from that usage, which has
significant inherent value in its potential to inform more
personalised treatment solutions and more effective
healthcare spending.
From a clinical perspective, our primary focus is on
solving the persistent medical problem of prescription
non-adherence. Adherium’s Hailie® sensor technology
and cloud-based data platform have been shown in
clinical trials to improve patient outcomes and reduce
acute respiratory attacks by transforming the way in which
patients with asthma and COPD follow their prescribed
inhaled medication dosage and schedule. By using
Adherium’s systems, doctors also collect longitudinal
medical data to help them better diagnose, manage,
and treat patients. By improving medication adherence,
Adherium increases the effectiveness of the medication
regime, helping to enhance patients’ quality of life while
lowering the overall treatment cost.
This year, we set out clear pathways to demonstrate
our value proposition to providers and payers in the US,
focusing on commercial execution through the two major
distribution channel partnerships announced in April:
1. HGE Health is a full-service remote COPD
disease management specialist in the US. HGE
contracts with insurance companies/payers to manage
large COPD patient populations through its clinical call
centres. Their digital platform and technology-enabled
services, HGE Care, are supported by a nurse
led clinical call centre – the “humanware” enabler
for pulmonary and primary care physicians to
remotely care for patients from anywhere in the US.
They help patients use technology to better understand
and manage changes in their COPD symptoms,
confident that professional and personalised support
is always available. We are now working to integrate
Adherium’s Hailie® technology into HGE Health’s
established telemedicine service to better assess,
manage, and treat high-risk respiratory patients
through a 100-patient pilot program in CYQ3/4 2020.
For the pilot we are evaluating the combination of our
Hailie® sensors to monitor patients' inhaled medication
adherence and compliance, with the patients' use
of the HGE Care app to self-report symptoms, and
the call centre staff using an algorithm to review their
symptom and medication use-data on a daily basis. If
a trend towards exacerbation is identified, the
call centre will intervene through a telephone
consultation, and may also make a prescription review
recommendation to the patient’s physician. HGE
reduces the frequency and severity of exacerbations
and the number of ER admissions, which represent a
very high cost burden and can incur insurance
penalties. In the pilot through the enhanced HGE-
Adherium service we believe patients will enjoy
better care and outcomes, while providers and payers
should see substantial cost benefits over baseline and
historic savings.
2. Monaghan Medical Corporation is the specialist US
respiratory device subsidiary of the Trudell Medical
Group, a globally recognised leader in the
manufacture and supply of innovative, high-quality,
patient-oriented aerosol drug delivery devices and
respiratory management solutions, Trudell is also a 13%
shareholder in Adherium. We signed a head-of-terms
sales and distribution agreement with Monaghan to
leverage the access their salesforce has to the specialist
asthma centres that manage the severe and difficult-
to-treat asthmatics we target. Monaghan’s dedicated
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Annual Report 2020 Adherium Ltd
We have significantly strengthened the leadership and
management team bringing highly qualified and relevant
experience to the business. Following a period working
as CCO and COO, I took on the role of CEO in April, with
Anne Bell also joining as CFO. Jane Lapon also joined
the business, bringing significant experience to leading
the pricing and market access activity. Most recently in
August 2020, Geoff Feakes was appointed CTO and
will be based in Melbourne to focus on the execution of
our software and hardware development programme
with Planet Innovation. In addition to the executive
appointments James Ward-Lilley was appointed Chairman
in April 2020, bringing a wealth of knowledge of the
respiratory disease and devices market, having previously
worked for AstraZeneca PLC and Vectura PLC.
Moving forward, between now and the end of 2022 we
are working on a three-phase commercialisation plan:
1. Testing and proving of HGE and Trudell business and
commercial operations models and Adherium sensor/
software user experience with limited initial sensor
sales (CY Q3, 2020 – Q1, 2021);
2. Scale up of HGE and Trudell activity with progressive
revenue growth alongside introduction of first wave
new sensors enabling physiological/peak flow
measurement; Development completion and market
launch of full range of physiologically enabled sensor
and software in both COPD and Asthma (CY Q2, 2021
to Q4, 2021); and
3. Revenue scale-up through US partner activity
with all major new sensors on market; Potential
expanded scale up in EU/ROW territories; Potential
next wave device development including nebuliser/
integrated sensors (CY Q4 2021 into 2022)
We are all thoroughly energised by the opportunity in
front of Adherium – in the US and ultimately in other major
markets. I am confident that the mix of skill and experience
on our board and management team, the partnerships
we have established and the progress we have made
in moving forward our strategy positions us very well for
success.
Yours faithfully
Mike Motion
CEO and Executive Director
salesforce has an in-depth understanding of these
patients and strong relationships with the physicians
that we need to reach. The beauty of this partnership
is that Monaghan benefits from a valuable incremental
product offering and from data captured through
our Hailie® system that will increase their insights into
the patient population they specialise in – helping them
stay at the forefront of innovative solutions for the
physicians they sell to. In building the relationship and
validating our business model, we are working closely
with Monaghan over the next few quarters to train key
accounts in the use of our technology establishing
a network of expert centres to support early
commercialisation.
These two channels allow Adherium to participate in
the new reimbursement environment in US healthcare
in distinct yet complimentary ways. The benefit for
Adherium is that revenue is generated through multiple
channels. In disease management customers are charged
a per-patient, per-sensor, per-month fee, in addition
to a proportion of any risk-share savings the insurance
companies realise and in addition, once doctors gain
access to the CPT code with our physiological data
capture technology, we will levy a charge for services
providing that access. Through our distributor channel we
gain revenue from both sensor sales and the licensing of
software and data access.
This brings me to another strategically critical relationship
that was also signed in April this year – with Planet
Innovation (PI), a Melbourne-based healthtech innovation
and commercialisation company. We have struck a
strategic device hardware and software development
collaboration with them for our next-generation Hailie®
technology. This will incorporate the physiological
data capture functionality required to access the CPT
reimbursement and will give physicians more and better
quality information about patients and how well they are
controlling their disease as well as an audit trail to support
their claims for reimbursement.
By working with Planet Innovation, Adherium will gain
the full benefit of the investment announced in May by
the BioScience Managers Translation Fund 1 (BMTF1),
which has invested $5 million in Adherium now, with an
option (if exercised within 18 months of issue) to invest a
further $5million. BMTF1 has a specific mandate to invest
in Australian-based innovative healthcare technology,
and so on the back of this investment and the Planet
Innovation partnership, Adherium will base both its R&D
and innovation capability in Melbourne. This investment,
along with the $5.4 million rights issue completed
earlier in the year, puts Adherium in a solid position to
commercialise its business and support its software and
hardware development programme in 2020.
In addition to these new partnerships, we continue to work
closely with our long-term pharma partner AstraZeneca,
with whom we are establishing a new commercial
framework that will place a higher emphasis on the
value of the data generated by our sensors in addition
to the transactional revenue from sales. We continue to
support several substantial clinical trials and innovative
development work being funded by AstraZeneca.
5
Annual Report 2020 Adherium Ltd
Directors’ Report
The Directors present their report on the consolidated entity (the Group), consisting of Adherium Limited (the Company
or Adherium) and the entities it controlled at the end of, or during, the year ended 30 June 2020, together with the
independent auditor’s report thereon.
Directors
The Directors of the Company at any time during the year and until the date of this report are:
Mr James Ward-Lilley, BA (Hons), MBA. Age 55.
Independent Non-Executive Chair
Appointed as a Director and Chairman 14 April 2020.
Mr Ward-Lilley had an extensive 28 year global pharmaceutical career at AstraZeneca before becoming Chief
Executive Officer of Vectura Group PLC (the inhaled formulation and device development specialist) in September 2015.
At Vectura he was responsible for leading the business through a critical period including the successful merger with
Skyepharma. James stepped down in June 2019 leaving Vectura as a growing, cash generative business with a strong
balance sheet and positive pipeline momentum.
At AstraZeneca James had a number of increasingly senior roles including leading the business in China to become the
number one pharmaceutical company in the market in 2008. He went on to become Regional Vice President for Central
Eastern Europe and the Middle East and led AstraZeneca’s investor relations team during the transition of Chair, CEO
and strategy as Leif Johansson and Pascal Soriot joined the business.
Mr Ward-Lilley’s last role at AstraZeneca was to lead the Respiratory, Inflammation & Autoimmunity franchise with
responsibility for the revitalisation of one of AstraZeneca's three core therapeutic areas including the acquisitions of
Almirall's respiratory business and Pearl Therapeutics. He was responsible for leading AstraZeneca’s corporate device
strategy in 2014/15 and was the key sponsor for AstraZeneca’s initial investment in Adherium at the time of the IPO in 2015.
Mr Ward-Lilley is CCO for UK based Aerogen Group and a director for its subsidiary Aerogen Pharma Ltd. He has not
held any other Australian public company directorships in the last three years.
Mike Motion, B.Sc (Hons). Age 58.
Chief Executive Officer and Executive Director
Appointed as a Director 24 April 2020.
Mr Motion has over 35 years’ corporate experience in medical devices and pharmaceuticals starting his commercial career at
Baxter Healthcare in 1984 working in manufacturing, sales and marketing and commercial leadership roles at UK, European
and global levels. This was across a number of therapeutic areas including nutrition, infectious diseases and oncology.
Mr Motion joined Biocompatibles in 2005 to lead the commercialisation of its Interventional Oncology portfolio, setting
up a direct sales force in the US and a global network of distributors in EMEA, APAC, China and Japan. After growing
the business to about UK$40m per annum, Biocompatibles was acquired by BTG in 2011 for US$283m.
At BTG Mr Motion held senior leadership roles as General Manager for Interventional Oncology and Head of Digital
Innovation, developing and executing BTG’s digital health strategy in the therapeutic areas of oncology, anti-venom,
vascular disease and respiratory. Latterly, he was Head of Varithena, the only NDA approved treatment for Chronic
Venous Insufficiency, securing CPT coding and extensive payer coverage ahead of successful commercialisation in the
US. Mike graduated in Aberdeen, Scotland with a BSc in Pharmacy.
Mr Motion has not held any other Australian public company directorships in the last three years.
Mr Jeremy Curnock Cook, MA. Age 71.
Independent Non-Executive Director
Appointed as a Director on incorporation of Adherium Limited on 17 April 2015.
Mr Curnock Cook was formerly head of the life science private equity team at Rothschild Asset Management in the UK and
an active investor in the Australian life science sector. At Rothschild, Mr Curnock Cook was responsible for the launch of the
first dedicated biotechnology fund for the Australian market. Over his 40-year career, Mr Curnock Cook has specialised in
creating value in emerging biotech enterprises, through active participation with management. He has served on over 40
boards in various roles, including chair of private and public biotechnology companies listed on NASDAQ, LSE, TSX and
ASX. Mr Curnock Cook received his MA in Natural Sciences from Trinity College in Dublin, Ireland. He is currently Managing
Director of BioScience Managers (manager of a major shareholder in Adherium), Chairperson of Avena Therapeutics
and AmpliPhi Biosciences and sits on the board of Avita Medical, Rex Bionics Pty and Sea Dragon Ltd. Mr Curnock Cook
was previously a director of Bioxyne Limited and Phylogica Limited. He has held no other Australian public company
directorships in the last three years.
6
Annual Report 2020 Adherium Ltd Dr William Hunter, MD. Age 57.
Indpendent Non-Executive Director
Appointed as a Director on 17 December 2015.
Dr Hunter has extensive experience in commercialising medical device technologies. He co-founded Angiotech
Pharmaceuticals in 1992 and assumed the position of CEO in 1997 when Angiotech was a venture-stage, private,
pre-clinical company with less than 50 employees. He led Angiotech through its IPO and listing on the Toronto Stock
Exchange and NASDAQ. Dr Hunter has over 200 patents and patent applications to his name and products in which
he was an inventor or co-inventor, including the TAXUS® Drug-Eluting Coronary Stent, the Zilver PTX Peripheral Drug-
Eluting Stent, the Quill barbed wound closure device and the 5-FU Anti-Infective Catheter. Combined, these products
have generated revenues of over $12 billion and have helped the lives of over 15 million patients globally. He is currently
President and CEO of Canary Medical Inc. and formerly Correvio Pharma Corp (NASDAQ: CORV). Dr Hunter is also
a Director of Rex Bionics and an Industry Expert Advisor for BioScience Managers (manager of a major shareholder in
Adherium). He has previously served as a director of Epirus Biopharmaceuticals (NASDAQ: EPRS) and Union Medtech.
Dr Hunter completed his BSc from McGill University and a MSC and MD from the University of British Columbia. Dr
Hunter served as a practising physician in British Columbia for five years. Dr Hunter held no other Australian public
company directorships in the last three years.
Mr Bruce McHarrie, B.Com, FCA, GAICD. Age 62.
Independent Non-Executive Director
Appointed as a Director on 20 July 2015.
Mr McHarrie is currently an independent director and consultant with over 20 years’ experience in the health and life
sciences sectors. He was formerly with Telethon Kids Institute in Perth, Western Australia, for 15 years, where his roles
included Chief Financial Officer, Director of Operations and Director of Strategic Projects. Prior to joining Telethon
Kids, Mr McHarrie was a Senior Manager at Deloitte in London before moving to Rothschild Asset Management as
Assistant Director of the Bioscience Unit, a life sciences private equity group investing in early stage biotechnology
and healthcare companies. Outside his role at Adherium, he is currently an advisor to BioScience Managers (manager
of a major shareholder in Adherium), a director at AusCann (Australasian Medical Cannabis) and an independent
consultant. Mr McHarrie is a Fellow of the Institute of Chartered Accountants Australia and New Zealand. He holds a
Bachelor of Commerce from the University of Western Australia and is a graduate member of the Australian Institute of
Company Directors. Mr McHarrie has held no other Australian public company directorships in the last three years.
As noted, as an advisor to BioScience Managers, Mr McHarrie has an association with a significant shareholder of the
Company. The board of directors is of the opinion that this does not compromise Mr McHarrie’s independence as to
the best of the board’s knowledge he is not involved in decision making by BioScience Managers and the value of the
advisory services provided is not material.
Mr Matt McNamara BSc (Hons), MBA, GAICD. Age 56.
Independent Non-Executive Director
Appointed 18 October 2019.
Mr McNamara is currently the Chief Investment Officer and director of Horizon 3 Biotech Pty Ltd. Mr McNamara has
over 25 years’ experience in the Healthcare & Medical Sciences sector. After initially being a Molecular Biology
Research Assistant, he spent 11 years in sales & marketing and general management with Merck &Co. and Johnson
and Johnson Medical Pty Ltd respectively. He was CEO of a Life Sciences Venture Capital Fund, SciCapital Pty Ltd.
and from 2005 –2019 was CIO of BioScience Managers’ healthcare funds. Mr McNamara is also a director of Avecho
Biotechnology Limited (ASX: AVE).
Mr Bryan Mogridge BSc, ONZM, FNZIOD. Age 74.
Independent Non-Executive Director
Appointed as a Director on 20 July 2015.
Mr Mogridge has been a successful public company director for over 30 years. He has been CEO of two listed
companies and has a background in science, manufacturing, investment and technology. His business philosophy
is to be invested where he is involved and grow value for all shareholders. Mr Mogridge is currently Chairperson of
BUPA ANZ, Thinxtra and SeaDragon Limited, and a director of Mainfreight and Clearspan. Until recently he was also
Chairperson of Rakon Ltd. He also recently joined as a director of Auckland Regional Amenities Funding Board.
Mr Mogridge also has significant involvement in philanthropy, chairing one of New Zealand’s most successful charities
(The Starship Foundation) for 20 years, helping to transform sick children’s lives through New Zealand’s national
children’s hospital “The Starship”. Mr Mogridge is currently a Trustee for The Starship Foundation. He has held no other
Australian public company directorships in the last three years.
Professor John Mills, AO, SB, MD, FACP, FIDSA, FRACP was an Independent Non-Executive Director until his
resignation on 18 October 2019.
Mr Thomas Lynch, BSc, FCA was Adherium's Independent Non-Executive Chairman until his untimely death in April
2020.
7
Annual Report 2020 Adherium Ltd Joint Company Secretaries
Mr Rob Turnbull, B.Com, CA. Age 53.
General Manager and Joint Company Secretary
Appointed 21 August 2015.
Mr Turnbull has over 25 years’ corporate experience, starting his career with PricewaterhouseCoopers where he worked
in Auckland, Toronto, and London; and has almost 20 years’ experience with technology and life-sciences companies. Mr
Turnbull has also been Chief Financial Officer for an ASX-listed biotech company undertaking multiple international studies
ranging from preclinical to clinical Phase 3, and with operations in the United States, Australia and New Zealand. In
addition to capital markets financing and compliance, treasury, tax, financial reporting, commercial contract negotiations
and general management, he has been involved in M&A activity to acquire and develop specific technologies. Mr Turnbull
graduated from Auckland University with a Bachelor of Commerce, and is a Chartered Accountant and member of
Chartered Accountants Australia and New Zealand.
Mr Mark Licciardo, B.Bus (Acc), GradDip CSP, FCSA, FCIS, FAICD. Age 56.
Joint Company Secretary
Appointed 10 May 2016.
Mr Licciardo is Managing Director of Mertons Corporate Services Pty Ltd (Mertons) which provides company secretarial
and corporate governance consulting services to ASX listed and unlisted public and private companies. Prior to establishing
Mertons, Mr Licciardo was Company Secretary of the Transurban Group (2004-07) and Australian Foundation Investment
Company Limited, Djerriwarrh Investments Limited, AMCIL Limited and Mirrabooka Investments Limited (1997-2004). Mr
Licciardo has also had an extensive commercial banking career with the Commonwealth Bank and State Bank Victoria. Mr
Licciardo is a former Chairman of Governance Institute of Australia (GIA) (formerly the Chartered Secretaries Australia) in
Victoria, a fellow of both GIA and the Australian Institute of Company Directors (AICD), former Chairman of Melbourne Fringe
Limited and a director of ASX listed Frontier Digital Ventures and several unlisted public and private companies.
Directors’ Meetings
The number of meetings of Directors (including meetings of committees of directors) held during the period and the
number of meetings attended by each Director was as follows:
Directors’ Meetings
Audit & Risk Committee
Meetings
Nomination & Remumeration
Committee Meetings
Meetings
eligible
to attend
Meetings
attended
Meetings
eligible
to attend
Meetings
attended
Meetings
eligible
to attend
Meetings
attended
J Ward-Lilley
M Motion
J Curnock Cook
W Hunter
B McHarrie
M McNamara
B Mogridge
T Lynch
J Mills
4
3
16
16
16
10
16
11
7
4
3
15
13
16
10
13
7
5
-
-
2*
-
4
2
4
-
2
-
-
2*
-
4
2
4
-
1
-
-
1
-
-
-
1
1
-
-
-
1
-
-
-
1
1
-
*In attendance ex-officio.
Committees of the Board
The Company has established the following committees of the board, with membership in the year to 30 June 2020 as noted:
Committee
Audit & Risk
Nomination & Remuneration
Membership
Bruce McHarrie (Chair), Non-Executive Director
Matt McNamara, Non-Executive Director (appointed 25 November 2019)
Bryan Mogridge, Non-Executive Director
John Mills, Non-Executive Director (until resignation 18 October 2019)
Bryan Mogridge (Chair), Non-Executive Director
Jeremy Curnock Cook, Non-Executive Director
James Ward-Lilley, Non-Executive Director (appointed 17 June 2020)
Thomas Lynch, Non-Executive Director (until directorship ceased 3 April 2020)
John Mills, Non-Executive Director (until resignation 18 October 2019)
The committees’ Charters are available on the Company’s website.
8
Annual Report 2020 Adherium Ltd Principal Activities
During the year, the principal continuing activity of the Group was the development, manufacture and supply of its
Hailie® (formerly Smartinhaler®) digital health technologies which address sub-optimal medication use and improve
health outcomes in chronic disease.
Results and Dividends
The net loss after tax of the Group for the year ended 30 June 2020 was $11,397,000.
No dividends were paid, declared or recommended during the year ended 30 June 2020.
Review of Operations
Following the reorganisation in fiscal 2019 and the refocussing of the Adherium business in order to scale commercially,
the 2020 year has been about taking those steps to implement the revised strategy to target reimbursement
opportunities in the US within remote patient monitoring and telehealth services. These steps have included:
1. Building a new highly qualified management team which has seen the appointment during the year of James
Ward-Lilley as Chairman, Mike Motion as CEO, Anne Bell as CFO, Geoff Feakes as CTO and Jane Lapon as
Head of Pricing & Reimbursement;
2. Melbourne-based healthtech innovation and commercialisation company Planet Innovation has been retained
as Adherium’s strategic R&D partner. A number development work streams are now underway in both hardware
and software to capture physiological measures in the Hailie® platform which will support access to
reimbursement by physicians and providers; and
3. To support commercialisation initiatives funding was obtained through the issue of $2.9 million of Convertible
Notes, and a $5.4 million Rights Issue to shareholders and new investors. Significant contributors to this funding
included existing shareholders K One W One and Fidelity International, and new investors EGP Capital and
Trudell Medical. In addition and most recently, a $5 million share placement to the BioScience Managers
Translation Fund 1 has been completed.
Progress has already been made in entering the US disease management market in the US. Relationships have been
established with strategic partners HGE Health, a full-service remote COPD disease management specialist in the US,
and Monaghan Medical Corporation, the specialist US respiratory device subsidiary of the Trudell Medical Group, a
globally recognised leader in the manufacture and supply of innovative, high-quality, patient-oriented aerosol drug
delivery devices and respiratory management solutions. Programmes involving Adherium’s Hailie® solution in a US-
based COPD patient population have already commenced.
Revenue to 30 June 2020 was $2,218,000, compared with $2,779,000 in fiscal 2019. The reduction occurred across
both sensors sales and engineering services on reduced customer orders, although per unit revenue on the 14,000
sensors delivered in 2020 was higher than in 2019 when 28,000 were sold, but included promotional pricing as part of
Adherium’s direct-to-consumer channel launch in calendar 2018. This promotional pricing also impacted gross margin
in the previous year.
Research and development activities for the year ended 30 June 2020 amounted to $3,953,000 compared with
$5,120,000 in the prior year. The reduction was predominantly associated with the significant re-architecture of the
Hailie® mobile patient app and physician platform in the prior year. Current year activities have included:
• customer specific feature development and customisation in the Hailie® mobile patient app and platform to
support notifications for remote patient monitoring by physicians;
investigation of integrations with country specific health platforms in Europe and Asia;
•
• strategic sensor and software development work with Planet Innovation to enhance Adherium’s leading
device coverage position in both asthma and COPD with sensors and software developed to capture and
integrate physiological data and enable physician monitoring and reimbursement activity in the US.
Sales and marketing costs were $1,766,000 in the year to 30 June 2020, compared with $3,028,000 in the prior year. This
reduction was largely a result of a full year of the more focussed organisational structure in fiscal 2020 compared to
fiscal 2019. Sales and marketing initiatives in the current year have been very focussed and targeted in the US resulting
in the relationships with HGE Health and Monaghan Medical noted above.
Administrative expenses reduced from $4,345,000 in 2019 to $3,769,000 in 2020, again as a result of the full year impact
of the reorganisation undertaken in the previous year and the resultant reduction in corporate staff and rationalisation
of overhead. Non-cash costs included asset depreciation and amortisation expense of $335,000 (2019: $413,000), and
fixed asset write-offs associated with further office rationalisation of $32,000 (2019: $270,000).
9
Annual Report 2020 Adherium Ltd
While cost reductions were achieved across all areas compared to the previous year, the loss for the year was not
significantly reduced at $11,397,000 compared to $11,794,000 in 2019. This was due largely to the financing cost of
$2,601,000 in the year to 30 June 2020 related to the Convertible Notes prior to their conversion into shares and options.
This financing cost is a non-cash expense and arose under accounting treatments from recognising finance charges
and fair value measurements on the debt and derivate elements respectively of the Convertible Notes.
Adherium ended the year to 30 June 2020 with cash of $4,584,000. In addition, subsequent to year end, and following
approval by shareholders, the balance of $1.9 million of the $5 million investment commitment from BioScience
Managers Translation Fund 1 was received.
Significant Changes in the State of Affairs
There have been no significant changes in the state of affairs of the Group during the financial year ended 30 June 2020.
Events since the end of the Financial Year
In May 2020, the Company agreed a $5 million investment commitment from the BioScience Managers Translation Fund
1 (BMTF1). The first tranche of $3.1 million (104,261,036 ordinary shares) was received in June 2020.
Subsequent to the balance sheet date, shareholder approval was received to proceed with the balance of the
investment and in August 2020 the Company received $1.9 million from BMTF1 and allotted a further 62,405,631 ordinary
shares and 83,333,333 options with an exercise price of 6 cents for option and expiry date of 17 February 2022.
There are no other matters or circumstances that have arisen since the end of the financial year that have significantly
affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs in
future years.
Likely Developments and Expected Results
Commentary on the Group’s strategic direction and plan is set out in the Chairman's Report and CEO's Report on pages
2 to 5.
Environmental Regulation
The Group’s operations are not subject to any significant environmental Commonwealth or State regulations or laws.
Directors’ Interests
The relevant interest of each Director in shares and options over shares in the Company as notified by the Directors to
the ASX in accordance with section 205G of the Corporations Act 2001 as at 30 June 2020 is:
Director
J Ward-Lilley
M Motion
J Curnock Cook
W Hunter
B McHarrie
M McNamara
B Mogridge
Ordinary Shares
Options over Ordinary Shares
-
600,000
1,192,734
1,612,734
1,277,587
123,038
12,858,965 *
10,000,000
10,000,000
-
-
-
-
-
* relevant interest includes 10,003,149 ordinary shares held in the Director’s capacity as trustee of the Company’s Employee Share Plan.
10
Annual Report 2020 Adherium Ltd
Indemnification and Insurance of Directors and Officers
The Company has entered into deeds of access, insurance and indemnity with each director and officer which contain
rights of access to certain books and records of the Group for a period of seven years after the director or officer ceases
to hold office. This seven-year period can be extended where certain proceedings or investigations commence before
the seven-year period expires.
In respect of the indemnity of the directors and officers, the Company is required, pursuant to the constitution, to indemnify
all directors and officers, past and present, against all liabilities allowed under law. Under the deed of access, insurance
and indemnity, the Company indemnifies parties against all liabilities to another person that may arise from their position
as a director or an officer of the Company or its subsidiaries to the extent permitted by law. The deed stipulates that the
Company will meet the full amount of any such liabilities, including reasonable legal costs and expenses.
In respect of insurance being obtained on behalf of the directors and officers, the Company may arrange and maintain
directors’ and officers’ insurance for its directors and officers to the extent permitted by law. Under the deed of access,
insurance and indemnity, the Company must obtain such insurance during each director’s and officer’s period of
office and for a period of seven years after a director or an officer ceases to hold office. This seven-year period can be
extended where certain proceedings or investigations commence before the seven-year period expires.
Disclosure of the insurance premiums and the nature of liabilities covered by such insurance are prohibited by the
relevant contracts of insurance.
Shares Under Option
Unissued shares
As at the date of this report, unissued ordinary shares of the Company under options comprised:
Exercise price
Total Number of Options
Vested Options
Expiry Date
$0.134039
$0.134039
$0.134039
$0.134039
$0.040000
$0.060000
$0.134039
$0.021900
$0.040000
217,214
542,952
1,039,428
259,857
3,000,000
83,333,333
173,238
27,519,467
20,000,000
217,214
542,952
1,039,428
259,857
3,000,000
30 November 2020
16 December 2020
1 January 2021
24 March 2021
7 August 2021
-
17 February 2022
173,238
27,519,467
-
31 March 2022
29 January 2027
14 April 2027
Outstanding at 27 August
2020
136,085,489
32,752,156
The options over unissued ordinary shares do not entitle the holder to participate in any share issue of the Company or
any entity in the Group.
During the year ended 30 June 2020 and to the date of this report the following Directors of the Company or other key
management personnel of the Group were granted options:
Director/KMP
Number of Options
Exercise Price
Expiry Date
J Ward-Lilley
M Motion
B Mogridge
W Hunter
10,000,000
10,000,000
1,500,000
1,500,000
$0.04
$0.04
$0.04
$0.04
14 April 2027
14 April 2027
7 August 2021
7 August 2021
Details of fully paid ordinary shares issued on exercise of options in the year to 30 June 2020 are contained in the
accompanying consolidated financial statements.
11
Annual Report 2020 Adherium Ltd Proceedings on behalf of the Company
There are no legal or other proceedings being made on behalf of the Company or against the Company as at the date of this report.
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.
The fees paid to PricewaterhouseCoopers for other services set out in note 6 of the Group’s financial statements for the year
ended 30 June 2020 related to advice in relation to employee incentive plan structures. The directors are satisfied that the
provision of these services during the year by the auditor did not impair the auditors’ independence.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 in
relation to the audit for the financial year is provided with this report.
Corporate Governance Statement
The board of Directors of Adherium Limited is responsible for corporate governance. The board has prepared the
Corporate Governance Statement (CGS) in accordance with the fourth edition of the ASX Corporate Governance
Council’s Principles and Recommendations under which the CGS may be made available on the Company’s website.
Accordingly, a copy of the Company’s CGS is available on the Adherium website at www.adherium.com under the
Investors/Corporate Governance section.
12
Annual Report 2020 Adherium Ltd
Remuneration Report (Audited)
The Directors present the Group’s 2020 remuneration report which sets out the remuneration information for the
Company’s Non-Executive Directors, Executive Director and other key management personnel of the Group.
The report contains the following sections:
(a) Details of key management personnel disclosed in this report
(b) Remuneration governance
(c) Executive remuneration policy and framework
(d) Relationship between remuneration and Group performance
(e) Non-Executive director remuneration policy
(f) Details of remuneration of key management personnel
(g) Service agreements
(h) Details of share and option based compensation
(i) Equity instruments held by key management personnel
(j) Other transactions with key management personnel
(a) Details of key management personnel disclosed in this report
The following persons acted as key management personnel of the Company and the Group during the year ended
30 June 2020.
(i) Non-Executive and Executive Directors
•
•
•
•
•
•
•
•
James Ward-Lilley
Non-Executive Chairman (appointed 14 April 2020)
Mike Motion
Jeremy Curnock Cook
Executive Director (appointed 24 April 2020) and Group CEO (appointed 24 April 2020,
previously appointed CCO 22 Novermber 2019, and COO from 14 April 2020)
Non-Executive Director (appointed on incorporation 17 April 2015)
William Hunter
Non-Executive Director (appointed 17 December 2015)
Bruce McHarrie
Non-Executive Director (appointed 20 July 2015)
Bryan Mogridge
Non-Executive Director (appointed 20 July 2015)
John Mills
Non-Executive Director (appointed 20 July 2015, resigned 18 October 2019)
Thomas Lynch
Non-Executive Chairman (appointed 1 September 2016, ceased 3 April 2020)
(ii) Other key management personnel
•
•
•
•
Anne Bell
Rob Turnbull
Chief Financial Officer (appointed 20 April 2020)
Joint Company Secretary (appointed 21 August 2015) and General Manager
Mark Licciardo
Joint Company Secretary (appointed 10 May 2016)
Peter Stratford
Chief Executive Officer (appointed 22 November 2019, resigned 11 February 2020)
(iii) Changes since the end of the reporting period
In the period after 30 June 2020 and up to the date of this report Geoff Feakes was appointed Chief Technology Officer (3
August 2020). There have been no other changes in key management personnel.
(b) Remuneration Governance
The Nomination and Remuneration Committee is a committee of the board. Its responsibilities include assisting the
board in ensuring that the Company:
• has coherent remuneration policies and practices which are observed and which enable it to attract and
retain executives and directors who will create value for shareholders;
• fairly and responsibly rewards executives having regard to the performance of the Company,
the performance of the executive and the general pay environment;
• provides disclosure in relation to the Company’s remuneration policies to enable investors to understand the
costs and benefits of those policies and the link between remuneration paid to directors and key executives
and corporate performance; and
• complies with the provisions of the ASX Listing Rules and the Corporations Act.
13
Annual Report 2020 Adherium Ltd
The primary purpose of the Nomination and Remuneration Committee is to support and advise the board in fulfilling its
responsibilities to shareholders in ensuring that the board is appropriately remunerated, structured and comprised of
individuals who are best able to discharge the responsibilities of directors by:
• assessing the size, composition, diversity and skills required by the board to enable it to fulfil its
responsibilities to shareholders, having regard to the Company’s current and proposed scope of activities;
• assessing the extent to which the required knowledge, experience and skills are represented on the board;
• establishing processes for the identification of suitable candidates for appointment to the board;
• overseeing succession planning for the board and the Chief Executive Officer;
• establishing processes for the review of the performance of individual directors and the board as a whole;
• assessing the terms of appointment and remuneration arrangements for non-executive directors; and
• assessment and reporting to the board in relation to:
- executive remuneration policy;
-
-
the remuneration of executive directors;
the remuneration of persons reporting directly to the Chief Executive Officer, and as appropriate,
other executive directors;
- diversity plans, measurable diversity objectives and ensuring equality in remuneration across gender
aligned, where relevant, with the ASX Corporate Governance Guidelines;
-
- superannuation arrangements; and
- all equity-based plans.
the Company’s recruitment, retention and termination policies and procedures;
(c) Executive remuneration policy and framework
Remuneration policy
The policy for determining the nature and amount of remuneration of key management personnel is agreed by the
board of directors as a whole on advice from the Nomination and Remuneration Committee. The board obtains
professional advice where necessary to ensure that the Group attracts and retains talented and motivated directors and
employees who can enhance the performance of the Group through their contributions and leadership. The Nomination
and Remuneration Committee makes specific recommendations on the remuneration package and other terms of
employment for the CEO having regard to his or her performance, relevant comparative information, and if appropriate,
independent expert advice.
For key management personnel, the Group provides a remuneration package that incorporates both cash-based
remuneration and, if appropriate, share or option based remuneration. The contracts for service between the Group
and key management personnel are on a continuing basis, the terms of which are to align executive performance-
based remuneration with Group objectives.
The Nomination and Remuneration Committee is also responsible for making recommendations to the board in relation
to the terms of any issue of equity-based remuneration to employees, as part of their individual package, or a wider staff
incentive and retention scheme, and for ensuring that any such issue is made in accordance with the ASX Listing Rules.
Executive pay
The executive pay and reward framework has three components:
• base pay and benefits, including legislative superannuation;
• short-term performance incentives; and
•
long-term incentives through participation in the Adherium employee share and option plans.
A combination of some or all of these components comprises an executive’s total remuneration.
Base pay
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for
executives is reviewed annually to ensure that executive remuneration is competitive with the market. There are no
guaranteed base pay increases included in any executives’ contracts.
Short-term incentives (STI)
Executives have a target STI opportunity depending on the accountabilities of the role and impact on the organisation.
The STI is a cash and equity based incentive which forms part of the executive’s total compensation, representing
between 0% and 150% of base salary. Each year, the Nomination and Remuneration Committee in conjunction with
the CEO, will consider the appropriate targets and key performance indicators (KPIs) of each executive to link the STI
plan and the level of payout if targets are met. This will include setting any maximum payout under the STI plan, and
minimum levels of performance to trigger payment of STI. The targets and KPIs selected are chosen to align executive
performance with the Group’s annual business objectives set by the board and encompassing business development,
research & development, and cash management.
14
Annual Report 2020 Adherium Ltd
The STI achievement is calculated and paid annually. The Nomination and Remuneration Committee in conjunction
with the CEO assesses the extent to which targets and KPIs have been achieved at a Company and individual
performance level to determine the STI to be paid. Measurement of achievement of the business objectives does not
involve comparison with factors external to the Company.
Long-term incentives (LTI)
Long-term incentives are provided to certain employees via the Adherium Employee Share Plans and Executive Share
Option Plan (the Plans).
The board has the discretion to offer and issue to eligible employees including directors:
• ordinary shares in the Company issued at an issue price determined by the board, with limited recourse loans
where some or all of the issue price of the share awards are funded by way of a loan from the Company; or
• options over ordinary shares in the Company with an exercise price determined by the board.
The Plans are designed to focus directors, executives and staff on delivering long-term shareholder returns.
Share and option awards issued under the Plans generally vest in three equal tranches over three years of continuing
employment. If the vesting condition is not met, the related share or option award is forfeited and, where relevant, the
loan cancelled such that the participant receives no benefit from unvested shares where the related loan is not repaid.
Participation in the Plans is at the board’s discretion and staff do not have a contractual right to participate in the Plans.
(d) Relationship between remuneration and Group performance
The Group is presently in a business growth phase, as it undertakes continued product development, and seeks relevant
regulatory approvals for its technologies and market penetration for its products, and this is the focus of executives and
the board. During this phase expenditures continue to exceed revenues, and in the year ended 30 June 2020 the Group
incurred a loss after tax of $11,397,000 (3.6 cent loss per share). In the year to 30 June 2020 the Company’s shares traded
between 1.1 and 6.4 cents per share. Given the stage of the Group’s commercial development, the board does not utilise
earnings per share as a performance measure and does not presently include the Company’s share price as a measure of
executive performance.
No dividends were paid, declared or recommended during the period ended 30 June 2020.
(e) Non-Executive Director remuneration policy
On appointment to the board, Non-Executive Directors enter into a service agreement with the Company in the form of a
letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant to the office
of director.
Non-Executive Directors receive a fee which is inclusive of fees for chairing or participating on board committees. They do
not receive performance-based pay. Non-Executive Directors’ fees and payments are reviewed annually by the board. The
Non-Executive Chairman’s fees are determined independently of the fees of Non-Executive Directors based on comparative
roles in the external market. Non-Executive Chairman and Director fees were approved at the 2016 Annual General Meeting
at $100,000 per annum for the Non-Executive Chairman (previously $80,000 per annum) and $50,000 for each Non-Execu-
tive Director (previously $40,000 per annum). Legislative superannuation contributions are also paid where applicable.
A Non-Executive Director may be paid fees or other amounts as the board determines where a Director performs ser-
vices outside the scope of the ordinary duties of a Director. The Company may reimburse Non-Executive Directors for
their expenses properly incurred as a Director or in the course of office.
15
Annual Report 2020 Adherium Ltd
(f) Details of remuneration of key management personnel
Remuneration for the
year ended 30 June 2020
Short Term Benefits
Post-Employment Benefits
Incentive
Share-based Payments
Salaries & Fees
$
Bonus
$
Insurance
& Other
$
Superannuation
$
Severance
Loan Funded Shares6
Remuneration
Remuneration
Value of Options/
Performance Related
Directors’ remuneration
James Ward-Lilley
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matt McNamara
Bryan Mogridge
Thomas Lynch
John Mills
Sub-total Directors
Executives’ remuneration
Mike Motion2
Anne Bell3
Peter Stratford4
Mark Licciardo5
Rob Turnbull
Sub-total executives
259,782 1
50,000
50,000
50,000
37,351
50,000
75,000
16,667
588,800
385,349
52,514
299,086
7,083
229,030
973,062
Total key management personnel
1,561,862
-
-
-
-
-
-
-
-
-
35,418
10,503
-
-
57,241
103,162
103,162
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,755
3,068
-
-
861
7,684
4,250
4,989
-
-
6,871
16,110
23,794
1. Consulting fee for the period to 30 June 2020.
2. Mike Motion was appointed CCO 22 November 2019, COO 14 April 2020, and CEO 24 April 2020.
3. Anne Bell was appointed CFO on 20 April 2020.
4. Peter Stratford was appointed CEO 22 November 2019 and resigned from the role 11 February 2020.
5. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance
consulting services.
allocated to the reporting period.
6. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares
Remuneration for the
year ended 30 June 2019
Directors’ remuneration
Thomas Lynch
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
John Mills
Bryan Mogridge
Sub-total Directors
Executives’ remuneration
Arik Anderson1
David Allinson2
Garth Sutherland3
Mark Licciardo4
Rob Turnbull
Sub-total executives
Total key management personnel
Short Term Benefits
Post-Employment Benefits
Salaries & Fees
$
Cash Bonus
$
Insurance
& Other
$
Superannuation
$
100,000
50,000
50,000
50,000
50,000
50,000
350,000
398,896
219,934
295,455
24,4204
231,721
1,170,426
1,520,426
-
-
-
-
-
-
-
199,373
18,988
80,414
-
55,045
353,820
353,820
-
-
-
-
-
-
-
96,279
1,175
-
-
-
97,454
97,454
-
-
-
3,760
3,760
-
7,520
-
-
12,713
-
8,603
21,316
28,836
1. Arik Anderson’s employment as Chief Executive Officer ended on 11 January 2019.
2. David Allinson’s employment as Chief Financial Officer ended on 31 December 2018.
3. Garth Sutherland’s employment as Founder ended on 17 March 2019.
4. A company of which Mr Licciardo is a director received these fees from the Company for company secretarial and corporate
governance consulting services.
5. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares allocated
to the reporting period.
awarded under the Employee Share Plan.
6. The negative value of Share-Based Payments represents the reversal related to the cancellation on resignation of Loan Funded Shares previously
16
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
296,996
138,809
435,805
435,805
20,958
280,740
$
621
621
621
-
621
1,242
621
25,305
20,958
-
-
-
22,036
42,994
68,299
$
5,323
2,661
2,661
2,661
2,661
2,661
18,628
(7,810)6
(492)6
(47,797)6
-
4,636
(51,463)
(32,835)
Total
$
50,621
50,621
54,376
40,419
50,621
76,242
18,149
621,789
445,975
68,006
299,086
7,083
315,178
1,135,328
1,757,117
Total
$
105,323
52,661
52,661
56,421
56,421
52,661
376,148
983,734
239,605
479,594
24,420
300,005
2,027,358
2,403,506
%
7%
1%
1%
1%
-
1%
2%
3%
13%
15%
-
-
25%
%
5%
5%
5%
5%
5%
5%
19%
8%
7%
-
20%
Fixed
%
93%
99%
99%
99%
100%
99%
98%
97%
87%
85%
100%
100%
75%
Fixed
%
95%
95%
95%
95%
95%
95%
81%
92%
93%
100%
80%
Incentive
Share-based Payments
Severance
Loan Funded Shares5
Remuneration
Remuneration
Value of Options/
Performance Related
Annual Report 2020 Adherium Ltd Total key management personnel
1,561,862
1. Consulting fee for the period to 30 June 2020.
2. Mike Motion was appointed CCO 22 November 2019, COO 14 April 2020, and CEO 24 April 2020.
3. Anne Bell was appointed CFO on 20 April 2020.
4. Peter Stratford was appointed CEO 22 November 2019 and resigned from the role 11 February 2020.
Directors’ remuneration
James Ward-Lilley
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Matt McNamara
Bryan Mogridge
Thomas Lynch
John Mills
Sub-total Directors
Executives’ remuneration
Mike Motion2
Anne Bell3
Peter Stratford4
Mark Licciardo5
Rob Turnbull
Sub-total executives
Remuneration for the
year ended 30 June 2019
Directors’ remuneration
Thomas Lynch
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
John Mills
Bryan Mogridge
Sub-total Directors
Executives’ remuneration
Arik Anderson1
David Allinson2
Garth Sutherland3
Mark Licciardo4
Rob Turnbull
Sub-total executives
Total key management personnel
-
-
-
-
-
-
-
-
-
-
-
35,418
10,503
57,241
103,162
103,162
$
-
-
-
-
-
-
-
259,782 1
50,000
50,000
50,000
37,351
50,000
75,000
16,667
588,800
385,349
52,514
299,086
7,083
229,030
973,062
$
100,000
50,000
50,000
50,000
50,000
50,000
350,000
398,896
219,934
295,455
24,4204
231,721
1,170,426
1,520,426
199,373
18,988
80,414
-
55,045
353,820
353,820
96,279
1,175
97,454
97,454
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
3,755
3,068
861
7,684
4,250
4,989
6,871
16,110
23,794
-
-
-
-
-
-
-
3,760
3,760
7,520
12,713
8,603
21,316
28,836
(f) Details of remuneration of key management personnel
Remuneration for the
year ended 30 June 2020
Short Term Benefits
Post-Employment Benefits
Incentive
Share-based Payments
Salaries & Fees
$
Bonus
$
Insurance
& Other
$
Superannuation
Severance
$
Value of Options/
Loan Funded Shares6
$
Total
$
Performance Related
Remuneration
%
Fixed
Remuneration
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,958
621
621
621
-
621
1,242
621
25,305
20,958
-
-
-
22,036
42,994
68,299
280,740
50,621
50,621
54,376
40,419
50,621
76,242
18,149
621,789
445,975
68,006
299,086
7,083
315,178
1,135,328
1,757,117
7%
1%
1%
1%
-
1%
2%
3%
13%
15%
-
-
25%
93%
99%
99%
99%
100%
99%
98%
97%
87%
85%
100%
100%
75%
5. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance
consulting services.
6. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares
allocated to the reporting period.
Short Term Benefits
Post-Employment Benefits
Salaries & Fees
Cash Bonus
Insurance
& Other
Superannuation
$
Incentive
Share-based Payments
Severance
$
Value of Options/
Loan Funded Shares5
$
Total
$
Performance Related
Remuneration
%
Fixed
Remuneration
%
-
-
-
-
-
-
-
296,996
-
138,809
-
-
435,805
435,805
5,323
2,661
2,661
2,661
2,661
2,661
18,628
(7,810)6
(492)6
(47,797)6
-
4,636
(51,463)
(32,835)
105,323
52,661
52,661
56,421
56,421
52,661
376,148
983,734
239,605
479,594
24,420
300,005
2,027,358
2,403,506
5%
5%
5%
5%
5%
5%
19%
8%
7%
-
20%
95%
95%
95%
95%
95%
95%
81%
92%
93%
100%
80%
1. Arik Anderson’s employment as Chief Executive Officer ended on 11 January 2019.
2. David Allinson’s employment as Chief Financial Officer ended on 31 December 2018.
3. Garth Sutherland’s employment as Founder ended on 17 March 2019.
4. A company of which Mr Licciardo is a director received these fees from the Company for company secretarial and corporate
governance consulting services.
5. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each
reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares allocated
to the reporting period.
6. The negative value of Share-Based Payments represents the reversal related to the cancellation on resignation of Loan Funded Shares previously
awarded under the Employee Share Plan.
17
Annual Report 2020 Adherium Ltd (g) Service agreements
Joint Company Secretary - Mr Mark Licciardo
Mr Licciardo currently provides company secretarial and corporate governance services under a service arrangement
between the Company and Merton Corporate Services Pty Ltd, a company associated with Mr Licciardo. The current
arrangement has no predetermined termination date, with each party having the right to terminate the arrangement by
giving ninety days’ notice in writing to the other party.
Other key management personnel of the Group
Remuneration and other terms of employment for other key management personnel of the Group are formalised in
employment agreements which specify the components of remuneration, benefits and notice periods. Participation in the STI
and LTI plans is subject to the board’s discretion. Other major provisions of the agreements relating to remuneration are set
out below:
Name
Mike Motion, CEO
Anne Bell, CFO 4
Rob Turnbull, (Joint Company Secretary and
General Manager)
Term of
Agreement
No fixed term
No fixed term
No fixed term
Notice Period 1
Base Salary 2
Termination
Payments 3
6 months
£300,000
4 months
A$320,000
-
-
2 months
NZ$241,500
2 months
1. The notice period applies without cause equally to either party unless otherwise stated.
2. Base salaries quoted are annual as at 30 June 2020; they are reviewed annually by the Nomination and Remuneration Committee.
3. Base salary payable if the Group terminates employees with notice, and without cause (e.g. for reasons other than unsatisfactory performance).
4. Paid 50% in cash and 50% shares in lieu valued at the 5-day VWAP at the end of each pay period.
(h) Details of share and option based compensation
Options over ordinary shares of the Company
All options over ordinary shares issued by the Company are exercisable on a one-for-one basis, and any shares issued
on exercise are fully paid and rank pari passu with existing ordinary shares.
No options over ordinary shares were exercised during the period to 30 June 2020 and to the date of this report.
Loan funded Employee Share Plan
The board has established the loan funded Adherium Employee Share Plans (Plans).
All awards under the Plans vest one third annually over three years of continued employment from the grant date. After
vesting the participant may take title to the shares by repaying to the Company the proportion of the loan related to
those shares.
The fair value of the awards of loan funded shares are calculated at the date of grant using a Black-Scholes pricing
model, which are being allocated over the vesting periods as share based compensation.
In the year ended 30 June 2020 the board made an offer under the Employee Share Plan which was accepted as
follows:
(a) Term of the loan: 5 years (1 July 2024) or cessation of employment, whichever is earlier.
(b) Purchase price of shares funded by loan is 2.7 cents, 7.5 cents, 15 cents and 25 cents per ordinary share vesting
over 5 months, 1 year, 2 years and 3 years of continued employment respectively.
(c) Loan funded shares issued to key management personnel in the year were:
• Rob Turnbull: 2,000,000 ordinary shares; $185,333 loan. A valuation of these shares at the date of award, using
the Black & Scholes option pricing model, totalled $24,394, which is being allocated over the vesting periods as
share-based compensation. The charge allocated to the period ended 30 June 2020 was $22,036.
18
Annual Report 2020 Adherium Ltd
(i)
Equity instruments held by key management personnel
Shareholdings
The numbers of ordinary shares in the Company held during the year to 30 June 2020 by each director and other key
management personnel of the Group, including their personally related parties, are set out below:
Name
Balance at the start
of the year
Purchases
Other changes
during the period
Balance at the end
of the year
James Ward-Lilley
Mike Motion
Jeremy Curnock Cook
William Hunter
Bruce McHarrie
Bryan Mogridge
Anne Bell
Mark Licciardo
Rob Turnbull 1
Thomas Lynch
John Mills
-
-
380,000
800,000
464,853
9,856,1051
-
-
559,645
1,000,000
396,000
-
600,000
-
-
-
-
-
-
-
-
-
-
-
812,7342
812,7342
812,7342
812,7342
2,190,1261
601,1512
-
2,000,000
1,625,4682
-
-
600,000
1,192,734
1,612,734
1,277,587
12,858,9651
601,151
-
2,559,645
2,625,4683
396,0003
1. Ordinary shares held jointly with the General Manager in their capacity as trustees of the Company’s Employee Share Plan. At 30 June 2020
10,003,149 (30 June 2019: 7,813,023) ordinary shares were held in this capacity.
2. Shares issued in lieu of salary/fees.
3. Holding as at date directorship ended.
(j) Other transactions with key management personnel
Transactions with directors or other key personnel are set out in note 18 of the accompanying Group financial statements
for the year ended 30 June 2020.
End of audited Remuneration Report.
This report is made in accordance with a resolution of the directors.
James Ward-Lilley
Non-Executive Chairman
Melbourne
27 August 2020
19
Annual Report 2020 Adherium Ltd
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Adherium Limited for the year ended 30 June 2020, I declare that to
the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Adherium Limited and the entities it controlled during the period.
Scott Walsh
Partner
PricewaterhouseCoopers
Sydney
27 August 2020
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
20
Annual Report 2020 Adherium Ltd
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
Notes to the Consolidated Financial Statements
21
Annual Report 2020 Adherium Ltd Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the year ended 30 June 2020
Notes
June 2020
$000
June 2019
$000
Continuing Operations
Sales
Cost of sales
Gross profit
Grants income
Manufacturing support
Research and development costs
Sales and marketing costs
Administrative expenses
Operating loss
Finance income
Finance expense
Finance income (cost) - net
Loss before income tax
Income tax expense
5
5
5
15
7
2,218
(814)
1,404
-
(727)
(3,953)
(1,766)
(3,769)
(8,811)
15
(2,601)
(2,586)
(11,397)
-
2,779
(1,133)
1,646
279
(1,293)
(5,120)
(3,028)
(4,345)
(11,861)
71
(4)
67
(11,794)
-
Loss for the period attributable to equity holders
(11,397)
(11,794)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss when
certain conditions are met: Foreign exchange differences on
translation of foreign operation
Other comprehensive income for the period, net of tax
Total comprehensive loss for the period
Total comprehensive loss attributable to:
Equity holders of Adherium Limited
(209)
(209)
(99)
(99)
(11,606)
(11,893)
(11,606)
(11,893)
Basic and diluted loss per share
8
(3.6) cents
(6.8) cents
The accompanying notes form part of the financial statements.
22
Annual Report 2020 Adherium Ltd Consolidated Statement of Financial Position as at 30 June 2020
Notes
June 2020
$000
June 2019
$000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Income received in advance
Total current liabilities
EQUITY
Share capital
Accumulated deficit
Other reserves
Total equity
Total liabilities & equity
The accompanying notes form part of the financial statements.
9
10
11
12
13
14
4,584
624
1,120
150
6,478
235
5
6,718
2,646
688
3,334
763
436
417
156
1,772
380
92
2,244
1,375
39
1,414
16
87,682
74,349
(58,349)
(46,952)
(25,949)
(26,567)
3,384
6,718
830
2,244
23
Annual Report 2020 Adherium Ltd
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
Share
Capital
Accumulated
Deficit
$000
$000
Equity as at 1 July 2018
74,349
(35,158)
Loss for the period
Other comprehensive
income
Total comprehensive loss
Transactions with owners:
Share and option grants
for services
-
-
-
-
(11,794)
-
(11,794)
Share &
Option
Compensation
Reserve
Foreign
Currency
Translation
Reserve
Merger
Reserve
$000
$000
$000
1,097
-
-
-
57
-
(99)
(99)
(27,535)
12,810
-
-
-
-
-
(87)
-
Equity as at 30 June 2019
74,349
(46,952)
1,010
(42)
(27,535)
Loss for the period
Other comprehensive
income
Total comprehensive loss
Transactions with owners:
Non-renounceable
Rights Issue
Shares and options issued
on conversion of convertible
notes
Shares issued in placement
Share issue costs
Share and option grants for
services
-
-
-
5,392
4,816
3,128
(180)
177
(11,397)
-
(11,397)
-
-
-
-
-
-
-
-
-
711
-
-
116
-
(209)
(209)
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
Equity
$000
(11,794)
(99)
(11,893)
(87)
830
(11,397)
(209)
(11,606)
5,392
5,527
3,128
(180)
293
Equity as at 30 June 2020
87,682
(58,349)
1,837
(251)
(27,535)
3,384
The accompanying notes form part of the financial statements.
24
Annual Report 2020 Adherium Ltd Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Notes
June 2020
$000
June 2019
$000
Cash flows from operating activities:
Receipts from customers
Receipts from grants
Interest received
Resident withholding tax refunded (paid)
Payments to employees
Payments to suppliers
Net cash provided from (used in) operating activities
Cash flows from investing activities:
Short term cash investments maturing (deposited)
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from the issue of shares
Proceeds from the issue of convertible notes
Payment of capital raising costs
Net cash provided from financing activities
Net increase (decrease) in cash
Cash at the beginning of the year
Effect of exchange rate changes on cash balances
2,731
-
15
13
(2,736)
(7,340)
(7,317)
-
(138)
(138)
8,520
2,926
(105)
11,341
3,886
763
(65)
Cash at the end of the year
9
4,584
3,526
337
84
2
(7,555)
(8,201)
(11,807)
436
(325)
111
-
-
-
-
(11,696)
12,118
341
763
Reconciliation with loss after income tax:
Loss after income tax
Non-cash items requiring adjustment:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Fixed assets (gain) loss on disposal
Convertible notes finance cost
Share and option compensation expense
Shares granted for services
Foreign exchange (gain)
Changes in working capital:
Trade and other receivables
Inventories
Trade and other payables
Income received in advance
Net cash provided from (used in) operating activities
The accompanying notes form part of the financial statements.
(11,397)
(11,794)
12
13
15
249
86
32
2,601
116
177
(144)
(178)
(720)
1,203
658
(7,317)
263
150
270
-
(88)
-
(510)
952
114
(1,203)
39
(11,807)
25
Annual Report 2020 Adherium Ltd Notes to the financial statements for the year ended 30 June 2020
1. General Information
Adherium Limited (the Company or Adherium) is a company domiciled in Australia. The address of the Company’s
registered office is Collins Square, Tower Four, Level 18, 727 Collins Street, Melbourne, VIC 3008. The consolidated
financial statements of the Company as at and for the year ended 30 June 2020 comprise the Company and its
subsidiaries (together referred to as the Group and individually as Group entities). The Group is a for-profit entity and
primarily develops, manufactures and supplies digital health technologies which address sub-optimal medication use
and improve health outcomes in chronic disease.
The separate financial statements of the parent entity, Adherium Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
The consolidated financial statements were authorised for issue by the Board on 27 August 2020.
2. Basis of Preparation
This general purpose consolidated financial report for the twelve months ended 30 June 2020 has been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001.
The consolidated financial statements have been prepared on a going concern basis, meaning the Group has the
intention to continue its business for the foreseeable future.
As of June 30, 2020, the Group had net cash of $4,584,000 (2019: $763,000) and recorded a loss before tax of
$11,397,000 (2019: 11,794,000) and operating cash outflows of $7,317,000 (2019: $11,807,000) for the year then ended.
The Directors have approved cash flow forecasts. These forecasts indicate in order for the Group to meet its operating
requirements for the 12 months from the date of authorisation of these financial statements, the Group must raise
additional capital or alternative funding. The cash flow forecast indicates this additional funding would be required by
the end of calendar year 2020.
The Directors considered the achievability of the assumptions underlying the forecast, and as with any forecast, there
are uncertainties within the assumptions required to meet the Group’s expectations. Whether the Group can raise
additional capital or alternative funding until the group is supported by cash flows from operations represents a
material uncertainty that casts significant doubt over the Group’s ability to continue as a going concern and therefore
whether it will be able to realise its assets and discharge its liabilities in the normal course of business. Despite this
uncertainty, the Directors are of the view that the company will be successful in raising additional capital or alternative
funding and accordingly have adopted the going concern basis for the preparation of this financial report.
(a) Compliance with International Financial Reporting Standards
These consolidated financial statements comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(b) Historical cost convention
These financial statements have been prepared under the historical cost convention as modified by
certain policies below.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s
functional currency.
(d) Critical accounting estimates
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The Company makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are addressed below.
26
Annual Report 2020 Adherium Ltd
(i)
Impairment of non-current assets
The Company reviews annually whether any property, plant and equipment have suffered any
impairment in accordance with the accounting policy stated in note 3.10. In making this assessment,
the extent of the likely future use of these assets is required to be estimated in determining if their
value is impaired at the balance sheet date. The Company evaluates indicators of impairment,
including expected future demand for devices, in relation to each type of asset at the balance sheet date.
(ii) Recognition of deferred tax assets
As at 30 June 2020, the Company has not recognised as an asset tax losses which could be offset
against future taxable profits. These tax losses would only be recognised to the extent that it is
expected that there will be future taxable profits and such losses will be available in the future (after
shareholder continuity tests) to offset those future taxable profits. The Company has considered
its future expected profitability and shareholder continuity and has concluded that sufficient certainty
does not yet exist to recognise these tax losses as an asset.
(e) Rounding of amounts
The Company has applied the relief available to it under ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. Accordingly, amounts in the consolidated financial statements
and Directors’ Report have been rounded to the nearest $1,000.
3. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all periods presented, unless otherwise stated.
3.1 Principles of consolidation:
The consolidated financial statements incorporate all of the assets, liabilities and results of Adherium
Limited and all subsidiaries. Subsidiaries are all entities over which the Group has control. The Group
controls an entity when it 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. A list of the
subsidiaries is provided in note 21. All intercompany transactions are eliminated. The assets and liabilities
of Group companies whose functional currency is not Australian dollars are translated into Australian
dollars at the period-end exchange rate. The revenue and expenses of these companies are translated
into Australian dollars at rates approximating those at the dates of the transactions. Exchange differences
arising on this translation are recognised in the foreign currency translation reserve. On disposal or partial
disposal of an entity, the related exchange differences that were recorded in equity are recognised in the
income statement as part of the gain or loss on sale.
3.2 Segment Reporting
The Company has considered the requirements for segmental reporting as set out in AASB 8: Operating
Segments. The standard requires that operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker. The chief operating decision-maker
has been identified as the Chief Executive Officer. The Company has determined that one segment exists
for the Company’s Hailie® (formerly known as Smartinhaler®) business.
3.3 Foreign currency translation
(a) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the Statement of Profit & Loss and Other
Comprehensive Income.
(b) Group Companies
The financial results and position of foreign operations whose functional currency is different from
the Group’s presentation currency is translated as follows:
• Assets and liabilities are translated at period end exchange rates prevailing at that reporting date.
•
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Income and expenses are translated at average exchange rates for the period.
3.4 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts
receivable for goods supplied, stated net of discounts, returns and taxes. The Company recognises revenue
when specific criteria have been met for each of the Company’s activities,as described below. Amounts
received from customers in accordance with contractual sales terms before these revenue recognition criteria
are met are deferred and recorded as Income Received in Advance until such time as the criteria for
recognition as revenue are met.
27
Annual Report 2020 Adherium Ltd
(a) Sales of devices
The Company manufactures and sells a range of inhaled medication monitoring devices and
related equipment. Sales of products are recognised when they have been delivered to the
customer and there is no unfulfilled obligation that could affect the customer’s acceptance of the
products. Delivery does not occur until the products have been shipped to the specified location,
and either the customer has accepted the products in accordance with the sales contract, the
acceptance provisions have lapsed or the Company has objective evidence that all criteria for
acceptance have been satisfied. No element of financing is deemed present as the sales are made
with a credit term of 30-60 days.
(b) Grants
Grants received for research and development are recognised in the Statement of Profit & Loss and Other
Comprehensive Income when the requirements under the grant agreement have been met. Any grants
for which the requirements under the grant agreement have not been completed are carried as liabilities
until all the conditions have been fulfilled.
(c)
Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
3.5 Research and development
Research costs include direct and directly attributable overhead expenses for product invention and
design. Research costs are expensed as incurred.
When a project reaches the stage where it is reasonably certain that future expenditure can be
recovered through the process or products produced, development expenditure is recognised as a
development asset within Intangible Assets when:
•
•
•
•
a product or process is clearly defined and the costs attributable to the product or process can be
identified separately and measured reliably;
the technical feasibility of the product or process can be demonstrated;
the existence of a market for the product or process can be demonstrated and the Company
intends to produce and market the product or process;
adequate resources exist, or their availability can be reasonably demonstrated to complete the
project and market the product or process.
In such cases the asset is amortised from the commencement of commercial production of the product
to which it relates on a straight-line basis over the years of expected benefit. Research and
development costs are otherwise expensed as incurred.
3.6 Employee benefits
(a) Wages, salaries and annual leave
Liabilities for wages and salaries, bonuses and annual leave expected to be settled within 12
months of the reporting date are recognised in accrued liabilities in respect of employees’ services
up to the reporting date and are measured at the amounts expected to be paid when the liabilities
are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
(b) Share-based payments
The Company operates equity-settled share and option plans and awards certain employees,
directors and consultants shares and options, from time to time, on a discretionary basis. The fair
value of the services received in exchange for the grant of the options is recognised as an expense
with a corresponding increase in the share and option compensation reserve over the vesting
period. The total amount to be expensed over the vesting period is determined by reference to the
fair value of the options at grant date. At each balance sheet date, the Company revises its
estimates of the number of options that are expected to vest and become exercisable. It recognises
the impact of the revision of original estimates, if any, in the Statement of Profit & Loss and Other
Comprehensive Income, and a corresponding adjustment to equity over the remaining vesting period.
3.7 Leases
At lease commencement, as Lessee an asset (the right to use the leased item) and a financial liability to pay
rentals across all leases are recognised unless the lease term is 12 months or less, or the underlying asset has
a low value. The right-of-use assets recognised comprise the initial measurement of the corresponding lease
liability, lease payments made at or before the commencement day, less any lease incentives received and
any initial direct costs. They are subsequently measured at cost less accumulated depreciation and
impairment losses.
28
Annual Report 2020 Adherium Ltd
3.8
Income Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Profit
& Loss and Other Comprehensive Income, except to the extent that it relates to items recognised in directly in
equity. In this case, the tax is also recognised directly in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the company generated taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
3.9 Goods and Services Tax (GST)
The Statement of Profit & Loss and Other Comprehensive Income has been prepared so that all components
are stated exclusive of GST. All items in the balance sheet are stated net of GST, with the exception of
receivables and payables, which include GST invoiced.
3.10
Impairment of non-financial assets
Assets that are subject to amortisation and depreciation are reviewed whenever events or changes
in circumstances indicate that the carrying amount of the assets may not be recoverable. The carrying
amount of an asset is considered impaired when its recoverable amount is less than its carrying value.
In that event, a loss is recognised in the the Statement of Profit & Loss and Other Comprehensive Income
based on the amount by which the carrying amount exceeds the recoverable amount.
3.11 Cash and cash equivalents
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.
3.12 Trade receivables
The Company makes use of a simplified approach in accounting for trade and other receivables, and records
any loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash
flows, considering the potential for default at any point during the life of a financial instrument.
In calculating expected credit losses, the Company uses its historical experience, external indicators and
forward-looking information using a provision matrix. The Company assesses impairment of trade receivables
on a collective basis and as they possess shared credit risk characteristics, grouped them based on the days
past due.
3.13
Inventories
Inventories are stated at the lower of cost or net realisable value. Cost is determined using the first-in,
first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct
labour, other direct costs and related production overheads (based on normal operating capacity). It
excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
3.14 Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation and any impairments
recognised. 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 Company and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the Statement of Profit & Loss and Other Comprehensive Income during the financial period in
which they are incurred.
Depreciation is determined principally using the diminishing value method to allocate their cost, net of
their residual values, over their estimated useful lives, as follows:
Manufacturing tooling equipment
Computer equipment
Office furniture, fixtures & fittings
4 years
2 years
4 years
29
Annual Report 2020 Adherium Ltd
3.15
Intangible assets
(a) Intellectual property
Costs in relation to protection and maintenance of intellectual property are expensed as incurred.
Acquired patents, trademarks and licences have finite useful lives and are carried at cost less
accumulated amortisation and impairment losses. Amortisation is calculated using the straight line
method to allocate the cost over the anticipated useful lives, which are aligned with the unexpired
patent term or agreement over trademarks and licences.
(b) Acquired software
Acquired software licences are capitalised on the basis of the costs incurred to acquire and bring to use
the specific software. These costs are amortised over their estimated useful lives (two to three years).
3.16 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
3.17 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
ordinary shares or options are deferred until the issue of the shares or options, and then shown in equity
as a deduction, net of tax, from the proceeds.
3.18 Financial assets
(a) Financial assets recognised in the Statement of Financial Position include cash and cash
equivalents, and trade and other receivables. The Company believes that the amounts reported for
financial assets approximate fair value.
(b) Financial assets: Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are classified as non-current assets.
The Company’s loans and receivables comprise “trade and other receivables” and “cash and cash
equivalents” in the Statement of Financial Position. Loans and receivables are measured at
amortised cost using the effective interest method less impairment.
3.19 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial
statements in the period in which the dividends are approved by the Company’s shareholders.
3.20 Comparative Information
Where necessary, certain comparative information has been reclassified in order to provide a more
appropriate basis for comparison.
3.21 Adoption of new and revised accounting standards
AASB 16 Leases
Effective for annual reporting periods commencing 1 January 2019, AASB 16 Leases replaces
AASB 117 Leases. The new standard provides a single lessee accounting model, requiring lessees to recognise
an asset (the right to use the leased item) and a financial liability to pay rentals across all leases. The only
exemptions are where the lease term is 12 months or less, or the underlying asset has a low value. The right-
of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment losses.
The Group has adopted AASB 16 Leases using the modified retrospective approach, meaning that
comparatives have not been restated as permitted under the specific transition provisions in the standard.
On adoption of AASB 16 and throughout the current reporting period, the Group had no leases with a term
greater than 12 months. Accordingly, no Right-of-Use assets or Lease Liabilities were recorded in the year to
30 June 2020.
3.22 New Accounting Standards for application in future periods
There are no other standards, amendments, or interpretations to existing standards that have been issued
and yet to be adopted by the Company that are likely to have a material impact on the financial statements.
30
Annual Report 2020 Adherium Ltd
4. Segment Information
The chief operating decision maker is the Chief Executive Officer, who reviews financial information for the Company
as a whole. The information reviewed is prepared in the same format as included in the financial statements. The
Company has therefore determined that one reportable segment exists for the Company’s Hailie® business.
(a) Geographic segment information
The Company operates predominantly from New Zealand, with some manufacturing also undertaken
by suppliers in Asia at which the Company locates equipment and tools:
Domicile of non-current assets
New Zealand and Australia
South-East Asian Countries
Other Countries
June 2020
$000
June 2019
$000
137
100
3
240
235
173
64
472
The Company sells its products and services domestically and internationally. Revenues by customer region of
domicile are:
Location of customer sales
New Zealand and Australia
Europe
North America
Asia
b) Major customers
Revenues are derived from major external customers as follows:
Major customers
Customer A group entities
5. Revenue
Income from continuing operations:
Sensor sales and monitoring services
New product design and engineering services
Grant income
Interest income
June 2020
$000
June 2019
$000
2
2,147
25
44
2,218
2
2,753
14
10
2,779
June 2020
$000
2,110
June 2019
$000
2,704
June 2020
$000
June 2019
$000
1,171
1,047
-
15
2,233
1,499
1,280
279
71
3,129
31
Annual Report 2020 Adherium Ltd
6. Expenses
Loss before income tax includes the following specific expenses:
June 2020
$000
June 2019
$000
Fees paid to PricewaterhouseCoopers for:
- audit of the financial statements
- interim report review
Fees paid to PricewaterhouseCoopers for non-audit services:
- fees in respect of other advice and services
Total fees to PricewaterhouseCoopers
Depreciation and amortisation
Directors’ remuneration
- director fees
- consulting fees
- share based compensation
Total Directors’ remuneration
Employee benefits expense
- wages and salaries
- share and option based compensation
Total employee benefits expense
Foreign exchange (gain) loss
Operating lease costs
7.
Income tax
Current tax
Deferred tax
Income tax expense
Numerical reconciliation of income tax expense to prima facie tax
payable (receivable):
Loss before income tax
Tax calculated at domestic tax rates
Tax effects of:
Expenses not deductible for tax purposes
Under (over) provision in prior year
Deferred tax assets not recognised (note 16)
Income tax expense
The weighted average applicable tax rate was 28% (2019: 32%).
32
93
36
35
164
335
337
260
25
622
3,039
91
3,130
(144)
93
88
40
12
140
413
358
-
19
377
6,036
(106)
5,930
(510)
422
June 2020
$000
June 2019
$000
-
-
-
(11,397)
(3,206)
220
62
2,924
-
-
-
-
(11,794)
(3,771)
24
222
3,525
-
Annual Report 2020 Adherium Ltd 8. Earnings per share
Basic loss per share is based upon the weighted average number of outstanding ordinary shares. For all periods
presented, the Company’s potentially dilutive ordinary share equivalents (being the Options set out in note 16 have an
anti-dilutive effect on loss per share and, therefore, have not been included in determining the total weighted average
number of ordinary shares outstanding for the purpose of calculating diluted loss per share.
June 2020
$000
June 2019
$000
Profit (loss) after income tax attributable to equity holders
(11,397)
(11,794)
Weighted average shares outstanding (basic)
316,010,977
173,896,088
Weighted average shares outstanding (diluted)
Basic and diluted loss per share
316,010,977
(3.6) cents
173,896,088
(6.8) cents
9. Cash and cash equivalents
Cash at bank and on hand
Deposits at call
10. Trade and other receivables
Trade receivables and accruals
Grant income accrued
GST and other taxes receivable
Security deposits
11. Inventories
Raw materials and components
Finished goods
June 2020
$000
114
4,470
4,584
June 2019
$000
145
618
763
June 2020
$000
June 2019
$000
489
-
115
20
624
287
72
34
43
436
June 2020
$000
June 2019
$000
1,021
99
1,120
194
223
417
The cost of inventories recognised as an expense and included in 'cost of sales' amounted to $633,000 (2019: $977,000).
33
Annual Report 2020 Adherium Ltd 12. Property, plant and equipment
Manufacturing
Equipment
$000
Computer
Equipment
$000
Fixtures
& Fittings
$000
Office
Equipment
$000
608
(456)
152
152
189
(7)
(133)
5
206
809
(603)
206
206
167
(9)
(176)
(4)
184
763
(579)
184
217
(138)
79
79
29
(12)
(49)
-
47
248
(201)
47
47
-
(6)
(25)
-
16
123
(107)
16
307
(50)
257
257
51
(188)
(74)
10
56
182
(126)
56
56
-
(27)
(19)
-
10
20
(10)
10
43
(16)
27
27
100
(22)
(35)
1
71
122
(51)
71
71
-
(17)
(29)
-
25
60
(35)
25
As at 1 July 2018
Cost
Accumulated depreciation
Net book value
Movements in the year
ended 30 June 2019
Opening net book value
Additions
Disposals
Depreciation
Foreign currency translation
Closing net book value
As at 30 June 2019
Cost
Accumulated depreciation
Net book value
Movements in the year
ended 30 June 2020
Opening net book value
Additions
Disposals
Depreciation
Foreign currency translation
Closing net book value
As at 30 June 2020
Cost
Accumulated depreciation
Net book value
34
Total
$000
1,175
(660)
515
515
369
(229)
(291)
16
380
1,361
(981)
380
380
167
(59)
(249)
(4)
235
966
(731)
235
Annual Report 2020 Adherium Ltd 13. Intangible assets
As at 1 July 2018
Cost
Accumulated amortisation
Net book value
Movements in the year ended 30 June 2018
Opening net book value
Additions
- External costs
Disposals
Amortisation
Foreign currency translation
Closing net book value
As at 30 June 2019
Cost
Accumulated amortisation
Net book value
Movements in the year ended 30 June 2020
Opening net book value
Additions
- External costs
Disposals
Amortisation
Foreign currency translation
Closing net book value
As at 30 June 2020
Cost
Accumulated amortisation
Net book value
14. Trade and other payables
Trade payables
Accruals
Employee benefits
Software
$000
Total
$000
421
(155)
266
266
-
(34)
(150)
10
92
388
(296)
92
92
-
-
(86)
(1)
5
300
(295)
5
421
(155)
266
266
-
(34)
(150)
10
92
388
(296)
92
92
-
-
(86)
(1)
5
300
(295)
5
June 2020
$000
June 2019
$000
1,003
1,063
580
2,646
914
93
368
1,375
35
Annual Report 2020 Adherium Ltd 15. Convertible Notes
During the year to 30 June 2020 the Company issued Secured Debt Notes with a face value of $2,926,000 and maturity
date of 31 January 2020. The terms of the Notes included conversion features, which were subject to shareholder
approval. These entitled the noteholders to convert the Notes and accrued interest to ordinary shares and options at
a discount to the market price of the ordinary shares, or for the Notes and accrued interest to mandatorily convert to
shares and options should the Company raise $2.5 million or more of capital prior to maturity. Shareholder approval of
the conversion features was received in November 2019.
The Notes were accounted for as two separate liability components from their issue dates – the debt portion recorded
at amortised cost and the embedded derivative conversion option recorded at fair value. In accounting for the debt
portion of the Notes, settlement was assumed to take place on 29 January 2020 with interest accruing at 9% to that
date. The calculation of the fair value of the embedded derivative conversion option took into account the probability of
shareholders approving the conversion features, the market price of the ordinary shares, potential discount options, and
the fair value of options that would be granted on conversion.
On the Company raising $5.4 million in the Rights Issue completed in January 2020, the Notes mandatorily converted
into 137,597,321 ordinary shares and 27,519,467 options over ordinary shares, with an exercise price of $0.0219 per
option, expiring 29 January 2027.
Convertible Notes
Debt component at
amortised cost
$000
Embedded derivative
conversion option
at fair value
$000
Recognition at Note issue
933
1,993
Financing cost:
- Amortised cost
- Fair value change
Total financing cost
Carrying value at conversion
Conversion:
- Shares issued
- Options issued
16. Share capital
Share capital as at 1 July 2018
Cancellation of shares issued in
employee share plan
Share capital as at 30 June 2019
Shares issued in employee share plans
Shares issued in Non-renounceable Rights Issue
Shares issued on conversion of Convertible Notes
Shares issued in placement
Shares issued for services
Share issue costs
2,080
-
2,080
3,013
-
521
521
2,514
Ordinary Shares
174,273,932
(7,258,581)
167,015,351
7,016,635
179,723,413
137,597,321
104,261,036
6,292,578
-
Total
$000
2,926
2,080
521
2,601
5,527
4,816
711
5,527
$000
74,349
-
74,349
-
5,392
4,816
3,128
177
(180)
Share capital as at 30 June 2020
601,906,334
87,682
36
Annual Report 2020 Adherium Ltd (a) Ordinary Shares
The ordinary shares have no par value and all ordinary shares are fully paid-up and rank equally as to
dividends and liquidation, with one vote attached to each fully paid ordinary share.
(b) Employee incentive plans
Adherium Executive Share Option Plan (Adherium ESOP)
The Company operates an employee share option plan for employees, directors and consultants within the Group.
Participants are invited by the Board of Directors and awards typically vest one third annually over a three-year period.
The tables below set out the movements in options within relevant exercise price ranges:
Exercise
price range
$0.075268 –
0.134039
Outstanding
at 1 July 2018
Granted
Exercised
Lapsed
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contract
Life (years)
Weighted
Average
Exercise
Price
Weighted
Average
Share Price
at Exercise
Exercisable
$
$
$
0.1163
2.1
3,448,404
$
0.1163
-
-
Options
3,448,404
-
-
(625,823)
$ 0.0752
Outstanding at
30 June 2019
2,822,581
$
$
$
0.1254
1.4
2,822,581
$
0.1254
-
-
-
-
Granted
Exercised
Lapsed
Outstanding at
30 June 2020
Exercise
price range
$0.04
Outstanding
at 1 July 2019
Granted
Exercised
Lapsed
Outstanding at
30 June 2020
(589,892)
$ 0.0925
2,232,689
$
0.1340
0.6
2,232,689
$
0.1340
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contract
Life (years)
Weighted
Average
Exercise
Price
Weighted
Average
Share Price
at Exercise
Exercisable
Options
-
$
-
-
$
20,000,000
$ 0.0400
-
-
$
$
-
-
20,000,000
$ 0.0400
6.8
-
$
-
-
37
Annual Report 2020 Adherium Ltd
The weighted average fair value of options granted during the year ended 30 June 2020 was estimated using the
Black-Scholes valuation model:
Significant Black-Scholes valuation model inputs
Share price at grant date
Exercise price
Volatility
Dividend yield
Expected option life
Annual risk-free interest rate
Weighted average fair value of options granted
June 2020
$0.0240
$0.0400
101.6%
0%
5 years
0.45%
$0.0163
The Company has no legal or constructive obligation to repurchase or settle the options in cash.
Adherium Employee Share Plans (Adherium ESP)
The Company operates employee share plans for employees, directors and consultants within the Group.
Participants are invited by the Board of Directors and those who accept an offer of ESP shares are provided with
an interest free loan from the Company to finance the whole of the purchase of the ESP shares they were invited to
apply for (ESP Loan). The ESP Loans are provided to participants on a non-recourse basis and upon vesting must be
repaid in order to remove trading restrictions on vested ESP shares. The term of the ESP Loan is five years, however
participants may forfeit their ESP shares if they do not repay the ESP Loan or leave the Company. Awards typically
vest one third annually over a three-year period, and are subject to restriction until vesting conditions are met.
The assessed weighted average fair value at grant date of the awards made during the 2020 financial period is 1.3
cents per ESP share awarded. The awards were priced using a Black-Scholes option pricing model that takes into
account the exercise price, the term of the award, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the award. There were no
new awards under the Adherium ESP during fiscal 2019.
The following incentive awards have been made and are on issue under the Adherium ESP:
Grant date
Shares granted
Issue price
Vested as at
30 June 2020
Restricted as at
30 June 2020
Share price
at grant date
16 May 2016
2,569,609
8 November 2016
2,100,000
14 December 2016
23 December 2016
10 July 2019
10 July 2019
10 July 2019
10 July 2019
173,277
243,628
3,553,866
1,154,251
1,154,251
1,154,251
$0.500
$0.500
$0.500
$0.500
$0.027
$0.075
$0.150
$0.250
2,569,609
2,100,000
-
-
3,377,435
-
-
-
-
-
-
-
-
1,099,872
1,099,872
1,099,872
$0.500
$0.350
$0.305
$0.260
$0.028
$0.028
$0.028
$0.028
(c) Other option issues
During the year ended 30 June 2020 the Company issued Convertible Notes. These converted in January 2020,
resulting in the issue of 27,519,467 options over ordinary shares, with an exercise price of $0.0219 per option,
expiring 29 January 2027. No options were exercised in the period to 30 June 2020.
The options' fair value at grant date of $711,000 ($0.0258 per option) was estimated using a Black-Scholes option
pricing model, which has been recorded in equity on conversion of the Convertible Notes (refer note 15). The
significant inputs to the option pricing model were a grant date share price of $0.0350, a 0% dividend yield, an
expected option life of 5 years, an annual risk-free rate of 0.71%, and a volatility of 84.7%. The Company has no
legal or constructive obligation to repurchase or settle the options in cash.
38
Annual Report 2020 Adherium Ltd
17. Deferred Income Tax
June 2020
$000
June 2019
$000
Movements:
Deferred tax asset (liability) at the beginning of the year
Credited (charged) to the income statement (note 7)
Change in unrecognised deferred tax assets
Deferred tax asset (liability) at the end of the year
-
2,924
(2,924)
-
The movement in deferred income tax assets and liabilities during the period is as follows:
Deferred tax assets (liabilities)
Provisions
and accruals
$000
Intangible
assets
$000
As at 1 July 2018
Credited (charged) to the income statement
Effect of exchange rate changes
Change in unrecognised deferred tax assets
As at 30 June 2019
Credited (charged) to the income statement
Effect of exchange rate changes
Change in unrecognised deferred tax assets
As at 30 June 2020
-
(32)
3
29
-
40
(1)
(39)
-
-
(6)
10
(4)
-
(1)
(6)
7
-
-
3,525
(3,525)
-
Total
$000
-
3,525
378
Tax
losses
$000
-
3,563
365
(3,928)
(3,903)
-
-
2,885
(66)
(2,819)
2,924
(73)
(2,851)
-
-
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related
tax benefit through future taxable profits is probable, or to the extent that they can be set off against deferred income
tax liabilities. The Company did not recognise deferred income tax assets of $14,632,000 (2019: $11,812,000) in respect
of losses amounting to $47,262,000 (2019: $38,016,000) that can be carried forward against future taxable income. The
Company also did not recognise further deferred income tax assets of $412,000 (2019: $380,000) in respect of other
timing differences amounting to $1,467,000 (2019: $1,351,000).
39
Annual Report 2020 Adherium Ltd 18. Related party transactions
(a) Key management personnel
The key management personnel include the directors of the Company, the CEO, and senior executives
responsible for the planning, directing and controlling of the Group’s activities. Compensation for this
group was as follows:
Directors
- director fees and other legislated superannuation
- consulting fees
- share and option based compensation
CEO and management
- short-term benefits
- post-employment benefit contributions
- share and option based compensation
June 2020
$000
June 2019
$000
337
260
25
1,076
16
43
1,757
358
-
19
959
21
44
1,401
Key management personnel and their associates subscribed for share capital in the Company as follows:
June 2020
Ordinary Shares
June 2020
$000
June 2019
Ordinary Shares
June 2019
$000
600,000
600,000
18
18
-
-
-
-
Shares issued in
Rights Issue
(b) Related parties
Transactions with related parties were on normal commercial terms and on conditions no more favourable than
those available to other suppliers.
June 2020
$000
June 2019
$000
Alecia Anderson Design
- Office design consultancy for office refurbishment
-
11
40
Annual Report 2020 Adherium Ltd
19. Financial instruments and risk management
(a) Categories of financial instruments
Financial assets
Loans and receivables classification:
Cash and cash equivalents
Short term investments
Trade and other receivables
Total financial assets
Financial liabilities
Measured at amortised cost:
Trade and other payables
Total financial liabilities
June 2020
$000
June 2019
$000
4,584
-
489
5,073
2,646
2,646
763
-
359
1,122
1,375
1,375
(b) Risk management
The Company is subject to a number of financial risks which arise as a result of its activities.
Foreign exchange risk
During the normal course of business the Company enters into contracts with overseas customers or suppliers or
consultants that are denominated in foreign currency. As a result of these transactions there is exposure to fluctuations in
foreign exchange rates.
The Company does not utilise derivative financial instruments. It operates a policy of holding cash and cash equivalents
in the currency of near-term estimated future supplier payments, however it does not designate formal hedges and as
such remains unhedged against foreign currency fluctuations. A foreign exchange gain of $144,000 is included in results
for the period ended 30 June 2020 (2019: $510,000 gain).
The carrying amounts of foreign currency denominated financial assets and financial liabilities are as follows:
June 2020
$000
June 2019
$000
Assets
New Zealand Dollars
US dollars
UK pound
Liabilities
New Zealand Dollars
US dollars
UK pound
Hong Kong dollars
70
501
16
414
530
517
26
150
346
40
260
768
14
28
41
Annual Report 2020 Adherium Ltd
The following table details the sensitivity of financial assets and financial liabilities to a 10% increase and decrease in
each of the currencies noted against the Australian dollar as at the reporting date.
Decrease (increase) in loss after income tax
10% strengthening of Australian dollar against:
US dollars
UK pound
Hong Kong dollars
10% weakening of Australian dollar against:
US dollars
UK pound
Hong Kong dollars
June 2020
$000
June 2019
$000
-
33
2
-
(40)
(3)
38
(2)
3
(46)
3
(3)
Cash flow and fair value interest rate risk
The Company is exposed to interest rate risk as it holds cash and cash equivalents (refer note 9).
Trade and other receivables and payables do not bear interest and are not interest rate sensitive.
The Company’s interest bearing financial assets bear interest at deposit rates for up to 90 days and accordingly any
change in interest rates would have an immaterial effect on reported loss after tax.
Credit risk
The Company incurs credit risk from transactions with trade receivables and financial institutions in the normal course of
its business. The credit risk on financial assets of the Company, which have been recognised in the statement of financial
position, is the carrying amount, net of any allowance for doubtful debts.
The Company does not require any collateral or security to support transactions with financial institutions or customers.
The counterparties used for banking activities are financial institutions with an A1/A2 credit rating (2019: A-2) and the
Company assesses the credit quality of customers by taking into account their financial position, past experience and
other factors. The credit quality of trade receivables can be assessed by reference to external credit ratings (if available)
or to historical information about counterparty default rates:
Counterparties with external credit rating:
• A-2
Counterparties without external credit rating:
• existing customers (more than 6 months) with no defaults in the past
Total trade receivables
June 2020
$000
June 2019
$000
468
14
482
260
27
287
The Company applies the simplified model of recognising lifetime expected credit losses for all trade receivables
as these items do not have a significant financing component. In measuring the expected credit losses, the trade
receivables have been assessed on a collective basis as they possess shared credit risk characteristics and have
been grouped based on the days past due. In calculating the expected credit losses, the Company uses its historical
experience, external indicators and forward-looking information.
On this basis, the loss allowance as at 30 June 2019 and 30 June 2020 for trade and other receivables was determined
to be $nil.
Trade receivables are written off (i.e. derecognised) when there is no reasonable expectation of recovery. Failure to
make payments within 180 days from the invoice date and failure to engage with the Company on alternative payment
arrangements, amongst others, are considered indicators of no reasonable expectation of recovery.
The Company is exposed to a concentration of credit risk as 97% of accounts receivable are with one counterparty
(2019: 91%). The customer has an external credit rating of A-2.
42
Annual Report 2020 Adherium Ltd Liquidity risk
The table below shows the Company’s non-derivative financial liabilities by relevant maturity grouping based on the
remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
As at 30 June 2020
Trade and other payables
As at 30 June 2019
Trade and other payables
Less than
3 months
$000
Between 3 months
and 1 year
$000
2,646
1,375
-
-
Capital risk
The Company manages its capital to ensure that it is able to continue as a going concern. The capital structure of the
Company consists of cash and cash equivalents, and equity comprising issued capital, reserves and accumulated deficit.
Fair value estimation
Financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value
hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
- Level 3: unobservable inputs for the asset or liability.
20. Parent entity information
The following details information related to the legal parent, Adherium Limited as at 30 June 2020. During the year
ended 30 June 2020 Adherium Limited recognised an impairment on the carrying value of its investments in and loans
to subsidiaries to record those at the Group carrying value. This resulted in an impairment charge of $9,372,000 (2019:
$15,401,000 impairment) The information presented here has been prepared using consistent accounting policies as
presented in Note 1.
Parent
June 2020
$000
Parent
June 2019
$000
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated deficit
Reserves
Total equity
Statement of Profit and Loss and Comprehensive Income
Loss after tax
Total comprehensive loss
4,708
-
1,172
-
1,172
3,536
87,682
(85,568)
1,422
3,536
(14,511)
(14,511)
107
4,080
4,187
300
-
300
3,887
74,349
(71,057)
595
3,887
(16,534)
(16,534)
43
Annual Report 2020 Adherium Ltd
21. Interests in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 3:
Name of Entity
Status
Country of incorporation
Percentage owned
Adherium (NZ) Limited
Adherium North America, Inc.
Adherium Europe Ltd
Nexus6 Limited
Operating
Operating
Operating
Dormant shell
New Zealand
United States
United Kingdom
New Zealand
22. Contingencies and commitments
June 2020
June 2019
100%
100%
100%
100%
100%
100%
100%
100%
The Company had no contingencies or commitments to purchase any property, plant or equipment at 30 June 2020 (2019: nil).
The following aggregate future non-cancellable minimum lease payments for premises have been committed to by the
Company, but not recognised in the financial statements.
Not later than one year
Later than one year and not later than five years
Later than five years
23. Events occurring after balance date
June 2020
$000
June 2019
$000
47
-
-
47
74
-
-
74
In May 2020, the Company agreed a $5 million investment commitment from the BioScience Managers Translation Fund 1
(BMTF1). The first tranche of $3.1 million (104,261,036 ordinary shares) was received in June 2020.
Subsequent to the balance sheet date, shareholder approval was received to proceed with the balance of the
investment and in August 2020 the Company received $1.9 million from BMTF1 and allotted a further 62,405,631 ordinary
shares and 83,333,333 options with an exercise price of 6 cents for option and expiry date of 17 February 2022.
There are no other events occurring after the balance sheet date which require disclosure or adjustment in the financial
statements.
44
Annual Report 2020 Adherium Ltd Directors’ Declaration
The Directors declare that the financial statements and notes set out on pages 22 to 44 in accordance
with the Corporations Act 2001:
(a) comply with Accounting Standards and the Corporations Regulations 2001, and other mandatory professional
reporting requirements;
(b) as stated in note 2, the consolidated financial statements also comply with International Financial Reporting
Standards; and
(c) give a true and fair view of the financial position of the consolidated entity as at 30 June 2020 and of its
performance for the financial year ended on that date.
In the Directors’ opinion there are reasonable grounds to believe that Adherium Limited will be able to pay its debts
as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made by the Chief Executive Officer
and Chief Financial Officer to the Directors in accordance with sections 295A of the Corporations Act 2001 for the year
ended 30 June 2020.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the board.
James Ward-Lilley
Non-Executive Chairman
Melbourne
27 August 2020
45
Annual Report 2020 Adherium Ltd
Independent Auditor’s Report
Independent auditor’s report
To the members of Adherium Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Adherium Limited (the Company) and its controlled entities
(together 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
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the consolidated statement of financial position as at 30 June 2020
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the financial statements, which include a summary of significant accounting policies
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
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 (including Independence
Standards) (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.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
46
Annual Report 2020 Adherium Ltd
Independent Auditor’s Report
Material uncertainty related to going concern
We draw attention to Note 2 of the financial report, which indicates the Group incurred a loss before
tax of $11,397,000 and operating cash outflows of $7,317,000 for the year ended 30 June 2020. As a
result, the Group is dependent on raising additional capital or alternative funding, until it is supported
by cash flows from operations.
These conditions along with other matters as set forth in Note 2, indicate that a material uncertainty
exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our report
is not modified in respect of this matter.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
Key audit matters
(cid:120)
For the purpose of our audit
we used overall Group
materiality of $570,000, which
represents approximately 5%
of the Group’s loss before tax
(cid:120) We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and the
nature, timing and extent of
our audit procedures and to
evaluate the effect of
misstatements on the financial
report as a whole.
(cid:120) We chose Group loss before tax
because, in our view, it is the
benchmark against which the
(cid:120) Our audit focused on where
the Group made subjective
judgements; for example,
significant accounting
estimates involving
assumptions and inherently
uncertain future events.
(cid:120) Amongst other relevant topics,
we communicated the following
key audit matters to the Audit
and Risk Committee:
(cid:16)(cid:16) Revenue recognition
(cid:16)(cid:16) Accounting treatment of
convertible notes
(cid:120)
These are further described in
the Key audit matters section of
our report, except for the matter
which is described in the
Material uncertainty related to
going concern section.
47
Annual Report 2020 Adherium Ltd
Independent Auditor’s Report
performance of the Group is
most commonly measured.
(cid:120) We utilised a 5% threshold
based on our professional
judgement, noting it is within
the range of commonly
acceptable thresholds.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
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
Revenue recognition
(Refer to note 5) [$2,218,000]
Revenue recognition was a key audit matter due
to the significance of revenue to understanding
the financial results for users of the financial
report(cid:17)
We performed the following procedures, amongst
others:
(cid:120) Developed an understanding of and evaluated
the operating effectiveness of relevant key
revenue internal controls.
(cid:120) For a sample of new contracts for each
material revenue stream we:
(cid:120) Developed an understanding of the key
terms of the arrangement including
parties, term dates, background of
agreement, performance obligations and
payments to be made.
(cid:120) Considered the appropriateness of the
accounting treatment in light of the
requirements of Australian Accounting
Standards
(cid:120) Evaluated the adequacy of the disclosures
made in note 5 in light of the
requirements of Australian Accounting
Standards.
Recognition and measurement of
convertible notes
(Refer to note 15) [$2,926,000]
The recognition and measurement of the
convertible notes was a key audit matter due to:
We performed the following procedures, amongst
others:
(cid:120) Read the relevant AGM minutes and
developed an understanding of the key terms
of the convertible notes.
(cid:120) Assessed whether the initial and subsequent
measurement was in accordance with the
48
Annual Report 2020 Adherium Ltd
Independent Auditor’s Report
Key audit matter
How our audit addressed the key audit matter
(cid:120)
(cid:120)
the complexity involved in the initial and
subsequent measurement of the debt
portion of the notes and the embedded
derivative
the complexity of a number of key estimates
and judgements made relating to the
valuation methodology and inputs, such as
probability of conversion outcomes and fair
value of options granted on conversion
date.
requirements of Australian Accounting
Standards.
(cid:120) Assessed the reasonableness of the valuation
of the embedded derivative.
(cid:120) Considered the subsequent conversion
outcomes to verify the reasonableness of key
estimates and judgements including
probability of conversion outcomes.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the 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 accordingly 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 on the other information that we obtained prior to the date of
this auditor’s report, 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.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal 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 ability of the Group 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
49
Annual Report 2020 Adherium Ltd
Independent Auditor’s Report
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the 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
Our opinion on the remuneration report
We have audited the remuneration report included in pages 13 to 19 of the directors’ report for the year
ended 30 June 2020.
In our opinion, the remuneration report of Adherium Limited 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.
PricewaterhouseCoopers
Scott Walsh
Partner
Sydney
27 August 2020
50
Annual Report 2020 Adherium Ltd
Australian Securities Exchange Additional Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as
follows. The shareholder information set out below was applicable as at 17 August 2020.
(a) Distribution of equity securities
Ordinary share capital
As at 17 August 2020 there were 664,811,965 ASX quoted ordinary shares held by 680 shareholders. All issued
ordinary shares carry one vote per share and carry the right to dividends.
Range (size of holding)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Number of
Ordinary Shares
Holders
8,950
264,074
647,479
13,102,987
650,788,475
664,811,965
28
77
77
311
187
680
There were 237 shareholders holding less than a marketable parcel of ordinary shares at a price of $0.0270,
totalling 1,728,871 ordinary shares.
Unquoted options over ordinary shares
As at 17 August 2020 there were 136,085,489 options over ordinary shares held by 16 holders.
b) Twenty largest holders of quoted equity securities as at 17 August 2020
Ordinary Shares
Shareholders
Phillip Asset Management Limited
Trudell Medical Ltd
HSBC Custody Nominees (Australia) Limited
One Funds Management Limited
Citicorp Nominees Pty Limited
Summatix Pty Ltd
K One W One Ltd
National Nominees Limited
JMID Pty Ltd
HSBC Custody Nominees (Australia) Limited - A/C 2
Adherium ESP Trustee Limited
BNP Paribas Nominees (NZ) Ltd
J P Morgan Nominees Australia Pty Limited
Calcium Investments Limited
Mr Garth Campbell Sutherland
National Nominees Limited
Chag Pty Ltd
NZVIF Investments Limited
Miss Sihong Zeng
Mr Daniel Blackwood Ritchie
Number
166,666,667
89,364,179
51,757,132
48,808,957
41,416,995
35,496,341
33,836,351
25,000,000
17,500,000
11,597,736
10,303,149
8,221,667
8,122,000
7,112,779
5,174,885
4,574,936
4,550,000
4,483,383
2,741,076
2,614,454
Total top 20 holders of fully paid ordinary shares
579,342,687
%
25.07
13.44
7.79
7.34
6.23
5.34
5.09
3.76
2.63
1.74
1.55
1.24
1.22
1.07
0.78
0.69
0.68
0.67
0.41
0.39
87.14
51
Annual Report 2020 Adherium Ltd
(c) Substantial shareholders
In accordance with ASX Listing Rule 4.10.4, a listing of substantial holding notices provided to the Company and
released to the ASX are included below:
Substantial shareholders
Phillip Asset Management Limited
Trudell Medical Ltd
Notification
Date
Ordinary Shares
Held
17/08/2020
166,666,667
10/06/2020
89,364,179
One Funds Management Limited
09/06/2020
48,808,957
FIL Limited
Summatix Pty Ltd
K One W One Ltd
Phillip Thematic Fund Pte Ltd
I.G. Investment Management, Ltd and associates
AstraZeneca PLC and its related bodies
11/06/2020
44,681,769
09/06/2020
35,496,341
17/08/2020
33,836,351
10/06/2020
33,333,333
01/09/2015
26/08/2015
9,535,000
8,079,720
(d) Voting Rights
On a show of hands, every shareholder present in person or by proxy holding stapled securities in the
Company shall have one vote and upon a poll each stapled security shall have one vote.
52
Annual Report 2020 Adherium Ltd Corporate Information
ASX code: ADR
Directors
Mr James Ward-Lilley (Chair)
Mr Mike Motion
Mr Jeremy Curnock Cook
Dr William Hunter
Mr Bruce McHarrie
Mr Matt McNamara
Mr Bryan Mogridge
Joint Company Secretaries
Mr Rob Turnbull
Mr Mark Licciardo
Registered Office
Collins Square, Tower 4
Level 18, 727 Collins St
Melbourne VIC 3000, Australia
+61 3 86575540
NZ Office
(Prinicipal Administrative Office)
Level 11, 16 Kingston Street
Auckland 1010, New Zealand
+64 9 307 2771
Share Registry
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street
Abbotsford, Victoria 3067, Australia
Solicitors
K&L Gates
Level 25 South Tower
525 Collins Street
Melbourne VIC 3000, Australia
Auditors
PricewaterhouseCoopers
One International Towers, Watermans Quay,
Barangaroo NSW 2000, Australia
Website
www.adherium.com
www.hailie.com
Shareholder Enquiries
1300 850 505 (+61 3 9415 4000)
Shareholders requiring clarification of holdings,
or requesting changes of name or address should
contact Computershare Investor Services directly on
the above number. Shareholders wishing to create
an online account with Computershare should visit
https://www.investorcentre.com
www.adherium.com