Bard1
Annual Report 2016

Plain-text annual report

ANNUAL REPORT 2016 BARD1 LIFE SCIENCES LIMITED TABLE OF CONTENTS CORPORATE DIRECTORY DIRECTORS’ REPORT CORPORATE GOVERNANCE STATEMENT AUDITOR’S INDEPENDENCE STATEMENT STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS NOTES TO FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION INDEPENDENT AUDITOR’S REPORT 1 2 9 15 16 17 18 19 20 42 44 Solicitors DLA Piper Level 31, Central Park 152 St George’s Terrace Perth Western Australia 6000 Bankers - Australia BankWest 853 Hay Street West Perth Western Australia 6000 ASX Code BD1 - Fully Paid Ordinary Shares BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT CORPORATE DIRECTORY Directors Peter Gunzburg Brett Montgomery Irmgard Irminger-Finger Executive Director Executive Chairman/Managing Director Non-Executive Director Geoffrey Laurent (appointed 16 June 2016) Non-Executive Director (appointed 16 June 2016) Company Secretary Pauline Collinson Principal Registered Office in Australia Unit B1, Tempo Building 431 Roberts Road Subiaco Western Australia 6008 Telephone: +61 (0)8 9381 9550 Facsimile: +61 (0)8 9381 7559 Website: www.bard1.com Postal Address PO Box 7493 Cloisters Square Perth Western Australia 6850 Share Registry - Australia Computershare Investor Services Pty Ltd Level11 172 St George’s Terrace Perth Western Australia 6000 Telephone: 1300 850 505 Overseas : +61 3 91454000 Facsimile: +61(0)8 93232033 Auditors - Australia Ernst & Young 11 Mounts Bay Road Perth Western Australia 6000 - 1 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT DIRECTORS' REPORT The directors present their report together with the financial report of BARD1 Life Sciences Limited (formerly Eurogold Limited) (BARD1 or Company) and its controlled entities (collectively referred to as the Group) for the financial year ended 30 June 2016 and the independent auditor’s report thereon. REVERSE ACQUISITION On 17 June 2016, the Company successfully completed the acquisition of BARD1AG SA (BARD1AG SA) together with a $3 million capital raising (Acquisition Transaction). The Acquisition Transaction resulted in BARD1AG SA’s shareholders obtaining control of the Company and the board of directors being restructured such that one of the Company’s three directors stepped down and replaced by two BARD1AG SA nominees. The combination of these factors has resulted in the Acquisition Transaction being treated as a reverse acquisition for accounting purposes. Consequently, the Company (the legal parent) has been accounted for as the subsidiary and BARD1AG SA (the legal subsidiary) has been accounted for as the parent entity. The acquisition has been accounted for as a share- based payment by which BARD1AG SA acquired the net assets and listing status of BARD1 Life Sciences Limited. The financial report presented represents a continuation of the financial statements of BARD1AG SA. The results for the six months ended 30 June 2016 comprise the results of BARD1AG SA for the six month period and the results of BARD1 for the period post completion of the Acquisition Transaction from 17 June 2016. The financial results of the Group are presented in Australian dollars, unless otherwise referenced. The presentation currency of BARD1AG SA applied in its last set of financial statements was Swiss Francs. BARD1AG SA’s previous financial year-end was 31 December 2015, while Bard1 Life Science Limited’s financial year-end was 30 June 2016. The comparative information for the 12 months ended 31 December 2015 is that of BARD1AG SA as presented in its last set of financial statements, restated for the change in presentation currency as noted above. Unless stated otherwise, all comparative information provided is that of BARD1AG SA. DIRECTORS The names and details of the directors of the Company in office during the six months ended 30 June 2016 and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Peter Gunzburg - Executive Chairman B Com. Mr Gunzburg has over 20 years’ experience as a stockbroker. He has a Commerce Degree from the University of Western Australia and has previously been a director of Resolute Limited, the Australian Stock Exchange Limited, Eyres Reed Limited, CIBC World Markets Australia Limited and ASX listed entities Fleetwood Corporation Limited (ASX:FWD), Dragon Mining Limited (ASX:DRA) and Newzulu Limited (ASX:NWZ). In the past 3 years Mr Gunzburg has been a director of the following listed companies: Fleetwood Corporation Limited (20/2/2002-27/11/2015) Dragon Mining Limited (8/2/2010-19/5/2015) Newzulu Limited (30/7/2002-26/8/2014) Brett Montgomery – Non-Executive Director Mr Montgomery has extensive experience in the management of publicly listed mining companies having previously been the Managing Director of Kalimantan Gold NL and a Director of Grants Patch Mining Limited. Mr Montgomery is a Non- Executive Director of Tanami Gold NL (ASX:TAM) and has previously been a Director of Magnum Gas and Power Limited (ASX:MPE) and EZA Corporation Limited (ASX:EZA). In the past 3 years Mr Montgomery has been a director of the following companies: Tanami Gold Limited (20/02/2013 - Present) EZA Corporation (19/11/2014 - 18/1/2016) Magnum Power and Gas Limited (9/10/2008 – 19/8/2016) - 2 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT Pauline Collinson – Non-Executive Director (resigned 10 June 2016) Mrs Collinson has been employed by the Company for 24 years and has held the position of Company Secretary for 15 years. She is also the Company Secretary of ASX listed Tanami Gold NL. Mrs Collinson resigned as a Director of the company on 10 June 2016. Mrs Collinson has not been a director of any other listed companies in the last three years Dr Irmgard Irminger-Finger, PD, PhD (appointed 16 June 2016) Dr Irminger-Finger is the head of the Molecular Gynaecology and Obstetrics Laboratory at the University of Geneva; and the founder of BARD1AG SA. She is responsible for more than 40 publications on BARD1 and cancer. Dr Irminger-Finger has not been a director of any other listed companies in the last three years Professor Geoffrey Laurent, PhD, FRCP(Hon), FRCPath (appointed 16 June 2016) Professor Laurent is the Director of the Institute for Respiratory Health and Director of the Centre for Cell Therapy and Regenerative Medicine at UWA. Prior to these appointments, he was Head of Department of Internal Medicine and Director of the Centre for Respiratory Research at University College London. He was awarded the European Respiratory Societies Presidential Award for his contribution to lung science. He is Editor-in-Chief of the International Journal of Biochemistry and Cell Biology and has published over 250 peer-reviewed articles in international journals of biomedical research. Professor Geoffrey Laurent has not been a director of any other listed companies in the last three years INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE As at the date of this report, the interests of the directors in the shares and performance shares of BARD1 Life Sciences Limited were: Peter Gunzburg Brett Montgomery Dr Irmgard Irminger-Finger Prof. Geoffrey Laurent Ordinary Shares 29,835,004 4,700,000, *108,252,420 600,000 *9,999,600 Unquoted Performance Shares - - **108,252,420 **9,999,600 * Ordinary Shares Escrowed for a period of 24 months from date of issue ** Unquoted Performance Shares are Escrowed for a period of 24 months and with an expiry date of 5 years from date of issue COMPANY SECRETARY Pauline Collinson Mrs Collinson has been employed by the Company for 24 years and has held the position of Company Secretary for 15 years. She is also the Company Secretary of ASX listed Tanami Gold NL. PRINCIPAL ACTIVITIES The principal activity of the consolidated group during the financial year was the development, though certain proprietary intellectual property, a simple blood test for the screening and diagnosing of lung cancer at an early stage of disease progression. OPERATING RESULTS For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ Revenue and other income - - Loss (2,841,093) (85,269) - 3 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT CORPORATE INFORMATION Corporate structure BARD1 Life Sciences Limited is a Company limited by shares and is incorporated and domiciled in Australia. BARD1 Life Sciences Limited is the ultimate legal parent entity. BARD1AG SA is the deemed acquirer for accounting purposes and has prepared a consolidated financial report incorporating the entities that it controlled during the six months ended 30 June 2016 (refer note 22 in the financial report). REVIEW AND RESULTS OF OPERATIONS AND PRINCIPAL ACTIVITIES CORPORATE As announced to ASX on 1 December 2015 the Company entered into binding share sale and purchase agreements under which it agreed, subject to shareholder approval and the satisfaction of certain other conditions, to acquire all the issued shares in the capital of BARD1AG SA, a Swiss public company limited by shares. BARD1AG SA has pioneered, through the development of certain proprietary intellectual property, a simple blood test for screening and diagnosing lung cancer at early stages of disease progression. In addition, the Company undertook a capital raising under a Prospectus to raise $3,000,000 at $0.02 per share in accordance with the Acquisition Transaction. On 17 June 2016 the Acquisition Transaction was completed with the following issues effected. i) ii) iii) 217,003,236 Ordinary Shares issued to the BARD1AG SA Vendors (or their respective nominee) in consideration for the acquisition of their respective shares in BARD1AG SA; 217,003,236 Performance Shares issued to the BARD1AG SA Vendors (or their respective nominee) in consideration for the acquisition of their respective shares in BARD1AG SA. Details of the performance shares are disclosed in note 27; 12,500,555 Ordinary Shares issued to the Universite de Geneve in full consideration of the Change of Control under the UNIGE Licence Agreement; and iv) 150,000,000 Ordinary Shares issued to investors who subscribed in the capital raising In addition to the above share issues, cash consideration of $309,421 was paid to certain BARD1AG SA vendors. As a result of the deemed reverse acquisition under accounting standards as described previously, this payment was accounted for as a distribution to owners. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Refer to section entitled ‘Reverse Acquisition’ on page 2. There were no other significant changes in the state of affairs of the Company during the period. FINANCIAL POSITION The net assets of the consolidated entity at 30 June 2016 totalled $2,833,921 (31 December 2015: net liabilities ($309,613)). Total assets at 30 June 2016 totalled $3,292,509 (31 December 2015: $84,475). The consolidated entity had cash reserves of $3,097,751 at 30 June 2016. SIGNIFICANT EVENTS AFTER THE BALANCE DATE At the date of this report, there have been no matters or circumstances that have arisen since the end of the period which significantly, or may significantly effect:    The consolidated group’s operations in future years; The results of those operations in future years; or The consolidated entity’s state of affairs in future years. DIVIDENDS No dividend has been declared, provided for or paid in respect of six months ended 30 June 2016. - 4 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT SHARE OPTIONS Unissued shares There are no unissued shares at the date of this report. Shares issued as a result of the exercise of options No options were exercised during the period and up to the date of the directors’ report. Options issued during the financial year There were no options issued during the period and up to the date of the directors’ report. Option holders do not have any right, by virtue of the options, to participate in any share issue of the Company or any related body corporate. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Company has insurance in place to indemnify directors of the Company against liability incurred to a third party (not being the Company or a related party) that may arise from their position as directors or officers of the Company. In accordance with subsection 300(9) of the Corporations Act 2001, further details have not been disclosed due to confidentiality provisions of the insurance contracts. INDEMNIFICATION OF AUDITORS To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. INTERESTS IN CONTRACTS OR PROPOSED CONTRACTS WITH THE COMPANY During the financial year, no director has had any interest in a contract or proposed contract with the Company being an interest the nature of which has been declared by the director in accordance with Section 300(11)(d) of the Corporations Act 2001. DIRECTORS’ MEETINGS The following table sets out the number of meetings of the Company’s directors held during the six months ending 30 June 2016 and the number of meetings attended by each director. Peter Gunzburg Brett Montgomery Dr Irmgard Irminger-Finger Prof. Geoffrey Laurent Pauline Collinson Directors’ Meetings No. of meetings held while in office Meetings attended 3 3 1 1 3 3 3 1 1 3 REMUNERATION REPORT (AUDITED) This Remuneration Report outlines the director and executive remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report Key Management Personnel (KMP) of the Group are defined as those persons having the authority and responsibility for planning, directing and controlling the major activities of the Group. As explained in Note 2 ‘Basis of Preparation’ to the financial statements, the consolidated financial statements are prepared in the name of the legal parent entity (BARD1 Life Sciences Limited, formerly Eurogold Limited) but represent the ongoing business of the deemed acquirer for accounting purposes, being BARD1AG SA. The remuneration disclosures for key management personnel of the consolidated entity are as follows:   The 2016 disclosures represent 5 months and 17 days (the period 1 Jan 2016 – 16 June 2016) of the key management personnel (including all directors) of BARD1AG and 13 days (the period 17 June 2016 to 30 June 2016) for the Key Management Personnel of the merged group. The 2015 disclosures represent 12 months of the key management personnel (including all directors) of BARD1AG. - 5 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT Remuneration Policy The Board recognises that the performance of the Company depends upon the quality of its Directors and Executives and to this end the Company is aware that it must attract, motivate and retain experienced Directors and Executives. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. Such officers are given the opportunity to receive their base emolument in the form of salary and fringe benefits such as motor vehicle allowances. In accordance with best practice governance, the structure of Non-Executive Directors and senior executive remuneration is separate and distinct. It should be noted that the amount of salary and the grant of options is at the discretion of the board of directors. The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to Shareholders. The Company’s Constitution and ASX Listing Rules specify that aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general meeting of Shareholders. Approval by Shareholders was granted at a general meeting on 12 August 2008 to pay Non-Executive Directors an aggregate amount of $200,000 per annum. The Board considers fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process. Each Non-Executive Director may also receive an equity based component where approval has been received from Shareholders in a general meeting. The Company does not currently have a remuneration committee, the functions of which are carried out by the full board. Remuneration for directors and executives are not linked directly to the performance of the economic entity. The Company has Employment Agreements in place with Dr Irmgard Irminger-Finger and Mrs Pauline Collinson. The major provisions of each of the agreements relating to compensation are set out below. Dr Irmgard Irminger-Finger Dr Irmgard Irminger-Finger has a Consultancy Agreement with the Company dated 1 June 2016 to perform the role of Chief Scientific Officer as specified in the Consultancy Agreement under which Dr Irminger-Finger will be paid $150,000 per annum. This arrangement can be terminated by either party by providing 180 days written notice, which based on current remuneration rates would amount to a termination payment of $75,000. Mrs Pauline Collinson Mrs Collinson has an Executive Employment Agreement with the Company dated 21 March 2016 to perform the role of Company Secretary. This arrangement can be terminated by either party by providing 3 months written notice, which based on current remuneration rates would amount to a termination payment of $27,500. If Mrs Collinson’s employment ends due to redundancy she is entitled to a payment of 6 months base salary as outlined in the Agreement. The Company does not have any other consultancy or employment agreements in place. REMUNERATION OF KEY MANAGEMENT PERSONNEL KMP Remuneration – Consolidated Entity P Gunzburg1 Chairman I Irminger-Finger Executive-Director G Laurent Non-Executive B Montgomery1 Non-Executive Total Total Six months ended 30 June 2016 Post Employment Superannuation Salary And Fees Total 2,637 - 5,417 - 928 - 1,430 - 10,412 - 686 - - - - - - - 686 - 3,323 - 5,417 - 928 - 1,430 - 11,098 - 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 1Became KMPs of the Consolidated Entity from 16 June 2016 - 6 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT KMP REMUNERATION – PARENT ENTITY P Gunzburg Chairman I Irminger-Finger Executive-Director1 G Laurent Non-Executive1 B Montgomery Non-Executive P Collinson Non-Executive2 Total Total 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 1Became KMPs of the Parent from 16 June 2016 2Resigned as a Non-Executive Director on 16 June 2016 Consolidated Entity Performance Year ended 30 June 2016 Post Employment Superannuation Salary And Fees 54,167 50,000 5,417 - 928 - 36,600 22,154 117,884 109,615 214,996 181,769 5,146 4,750 - - - - - - 11,199 10,413 16,345 15,163 Total 59,313 54,750 5,417 - 928 - 36,600 22,154 129,083 120,028 231,341 196,932 The table below shows the performance of the consolidated entity as measured by the consolidated entity’s closing share price and EPS over the last five years. 12 Months ended 31 December 2012 N/A (72,543) (0.03) 12 Months ended 31 December 2013 N/A (271,724) (0.13) 12 Months ended 31 December 2014 N/A (86,907) (0.04) 12 Months ended 31 December 2015 N/A (85,269) (0.04) 6 months ended 30 June 2016 $0.022 (2,841,093) (1.18) Closing share price Loss after tax EPS ($ per share) Options Granted and Vested During the six months ended 30 June 2016 There were no options granted, vested, exercised or lapsed during the six months ended 30 June 2016. Interests in the Shares and Options of the Company and related Bodies Corporate During the six months ended 30 June 2016 there were no options over ordinary shares in the Company. At 30 June 2016 the interests of the directors in the shares in the Company were: Ordinary Shares Peter Gunzburg Brett Montgomery Pauline Collinson Dr Irmgard Irminger- Finger Prof. Geoffrey Laurent Balance Ordinary Shares 30 June 2015 17,071,932 4,700,000 - - 600,000 Granted as Remuneration Net change other Balance Ordinary Shares 30 June 2016 26,455,932 4,700,000 - Unquoted Performance Shares at 30 June 2015 Unquoted Performance Shares at 30 June 2016 - - - - - - - - **108,252,420 **9,999,600 9,384,000 - *108,252,420 108,252,420 *9,999,600 10,599,600 - - - - - * These shares are Escrowed for 2 years from the date of issue ** The Performance Shares are Escrowed for 2 years from date of issue and have an expiry date of 5 years. milestones for conversion are as follows:   each Performance Share will convert into one Share upon the announcement by the ASX of the following prior to the Expiry Date: the clinical trial of the blood test developed by BARD1AG SA S.A. for the detection of lung cancer (BBLC Test) has been completed; the clinical trial involved at least 2,000 participants, and returned a detection rate greater than 80%, and false positive results of less than 20%; and the results of the clinical trial provide statistically significant evidence that the BBLC Test provides an outcome equal or superior to the current "gold standard" CT Scan, which has a detection rate of less than 80%, and returns false positive results of more than 20%.   Performance Shares are unquoted, not entitled to dividends and there are no participation rights or entitlements inherent in the Performance Shares and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Shares. As described below, the Performance Shares formed consideration for the KMPs’ shares held in BARD1AG SA rather than remuneration. - 7 - BARD1 LIFE SCIENCES LIMITED DIRECTORS' REPORT Transactions with KMPs On 16 June 2016 the Company issued the following shares to KMPs:    108,252,420 ordinary shares and 108,252,240 performance shares to I Irminger-Finger as consideration for shares held in BARD1AG SA; 9,999,600 ordinary shares and 9,999,600 performance shares to G Laurent as consideration for shares held in BARD1AG SA; 9,384,000 ordinary shares to Peter Gunzburg who subscribed for the shares in the capital raising on the same terms as other participants Loans to Key Management Personnel As at 30 June 2016 I Irminger-Finger was owed $35,037 (CH 25,500) by BARD1AG SA for outstanding Convertible Notes. The notes were entered into in July 2015 with a term of one year. The note can be repaid earlier by BARD1AG SA by giving one-month notice. The notes do not bear interest and are convertible into shares of BARD1AG at the lower of the valuation of the Company at the time of conversion or $1,923,600 (CHF1,400,000). The amount was repaid in full on 13 July 2016 for $34,081 based on the prevailing exchange rate at that date. There were no other amounts owed to KMPs at 30 June 2016. ENVIRONMENTAL REGULATION AND PERFORMANCE ** END OF REMUNERATION REPORT ** The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation. The Board believes that the Company has adequate systems in place for the management of environmental requirements and is not aware of any breach of environmental requirements as they apply to the Consolidated Entity. NON-AUDIT SERVICES During the six months ending 30 June 2016 no fees were paid to external auditors Ernst & Young for non-audit services. AUDITORS INDEPENDENCE DECLARATION The lead auditor's independence declaration for the six months ending 30 June 2016 has been received and can be found on page 9. Signed in accordance with a resolution of the directors Peter Gunzburg Executive Chairman 30 September 2016 - 8 - BARD1 LIFE SCIENCES LIMITED CORPORATE GOVERNANCE Corporate Governance Statement The Board of Directors of BARD1 Life Sciences Limited (the “Company”) is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable. This statement sets out the main corporate governance practices in place throughout the financial year in accordance with 3rd edition of the ASX Principles of Good Corporate Governance and Best Practice Recommendations. Further information about the Company’s corporate governance practices is set out on the Company’s website at www.bard1.com. This Statement was approved by the Board of Directors and is current as at [xx] October 2016. PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT ASX Recommendation 1.1: a listed entity should establish the functions reserved to the board and those delegated to senior executives and disclose those functions The Company has complied with this recommendation. The Board has adopted a formal charter that details the respective board and management functions and responsibilities. A copy of this board charter is available in the corporate governance section of the Company's website at www.bard1.com. ASX Recommendation 1.2: a listed entity should undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election as a director and provide security holders with all material information relevant to a decision on whether or not to elect or re-elect a director The Company has partially complied with this recommendation. The Company appointed two Directors during the year which were appointed at a Meeting of Shareholders prior to relisting. Information in relation to Director/(s) seeking reappointment is set out in the Directors report and Notice of Annual General Meeting. ASX Recommendation 1.3: a listed entity should have a written agreement with each Director and senior executive setting out the terms of their appointment. The Company has partially complied with this recommendation. The Company has Employment/Consultancy Agreements in place with Executive Director Dr Irmgard Irminger-Finger, and the Company Secretary Mrs Pauline Collinson. The major provisions of each of the agreements relating to compensation are set out below. Dr Irmgard Irminger-Finger has a Consultancy Agreement with the Company dated 1 June 2016 to perform the role of Chief Scientific Officer as specified in the Consultancy Agreement under which Dr Irminger-Finger will be paid $150,000 per annum. This arrangement can be terminated by either party by providing 180 days written notice, which based on current remuneration rates would amount to a termination payment of $75,000. Mrs Pauline Collinson Mrs Collinson has an Executive Employment Agreement with the Company dated 21 March 2016 to perform the role of Company Secretary. This arrangement can be terminated by either party by providing 3 months written notice, which based on current remuneration rates would amount to a termination payment of $27,500. If Mrs Collinson’s employment ends due to redundancy she is entitled to a payment of 6 months base salary as outlined in the Agreement. The Company does not have any other consultancy or employment agreements in place. ASX Recommendation 1.4: the company secretary of a listed company should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. The Company has complied with this recommendation. The Board Charter provides for the Company Secretary to be accountable directly to the board through the Chair. - 9 - BARD1 LIFE SCIENCES LIMITED CORPORATE GOVERNANCE ASX Recommendation 1.5: a listed entity should:     have a diversity policy which includes the requirement for the board to set measurable objectives for achieving gender diversity and assess annually the objectives and the entity’s progress to achieving them; disclose the policy or a summary of it; disclose the measurable objectives and progress towards achieving them; and disclose the respective proportions of men and women on the board and at each level of management and the company as a whole The Company partly complies with this recommendation. The Company has adopted a Diversity Policy which is available in the corporate governance section of the Company's website at www.bard1.com. The Board considers that, due to the size, nature and stage of development of the Company, setting measurable objectives for the Diversity Policy at this time is not appropriate. The Board will consider setting measurable objectives as the Company increases in size and complexity. The Company currently has five employees (including Directors) of which two are women with one woman being on the Board. ASX Recommendation 1.6: a listed entity should disclose the process for evaluating the performance of the board, its committees and individual directors and whether a performance evaluation was carried out during the reporting period in accordance with that process. The Company has not complied with this recommendation. The Company has a self-evaluation of the Board. There have been no performance evaluations during the year. ASX Recommendation 1.7: a listed entity should have and disclose a process for periodically evaluating the performance of its senior executives and disclose in relation to each reporting period where a performance evaluation was undertaken in accordance with a process. The Company has not complied with this recommendation. The Company has only one executive being the Company Secretary. The Board considers that, due to the size, nature and stage of development of the Company, a formal evaluation process is not required at this stage, however the Board realises the importance of implementing such a process as the Company develops. PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE ASX Recommendation 2.1: The board of a listed entity should establish a nomination committee:  with at least three members the majority of which are independent directors   chaired by an independent Director; and disclose the charter of the committee, the members of the committee and the number of times the committee met throughout the period and member attendance at those meetings The Company has not complied with this recommendation. Given the present size and complexity of the Company the Board has not constituted a Nomination Committee with the full Board carrying out the role of a Nomination Committee. ASX Recommendation 2.2: a listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership The Company has complied with this recommendation. On a collective basis the Board has the following skills: Strategic expertise – the majority of the Board have the ability to identify and critically assess strategic opportunities and threats and develop strategies. Industry knowledge – Directors Professor Geoffrey Laurent and Dr Irmgard Irminger-Finger, have a broad range of experience and expertise in the industry. International experience –All members of the Board have an understanding of the complexities of operating in foreign jurisdictions. Accounting and finance – all members of the Board have experience in accounting and finance or the ability to read and comprehend the company’s accounts, financial material presented to the board, financial reporting requirements and an understanding of corporate finance. - 10 - BARD1 LIFE SCIENCES LIMITED CORPORATE GOVERNANCE Risk management - all members of the Board Identify and monitor risks to which the Company is, or has the potential to be exposed to. Experience with financial markets – Directors Mr Peter Gunzburg and Mr Brett Montgomery have extensive experience in working in or raising funds from the equity or capital markets. Investor relations – Directors Mr Peter Gunzburg and Mr Brett Montgomery have extensive experience in identifying and establishing relationships with Shareholders, potential investors, institutions and equity analysts. ASX Recommendation 2.3: a listed entity should disclose the names of the directors considered by the board to be independent directors and provide details in relation to the length of service of each Director The Company has complied with this recommendation. 2 members of the Board are considered to be independent directors, that being Professor Geoffrey Laurent and Brett Montgomery. The appointment date of Directors is set out in the Directors Report forming part of the Annual Financial Statements. ASX Recommendation 2.4: the majority of the board of a listed entity should be independent directors The Company has not complied with this recommendation. The Board consists of 4 members and 2 of those are independent directors. The Board considers it contains the appropriate position given its current size. ASX Recommendation 2.5: The Chair of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity The Company has not complied with this recommendation. The Chairman, Mr Peter Gunzburg is not considered to be an independent director. The Board considers that given the size and complexity of the Company Mr Gunzburg is the appropriate person to fulfill the role of Chairman. The Board does however realise the importance of reassessing this role in the future. ASX Recommendation 2.6: a listed entity should have a program for inducting new directors and provide appropriate professional development opportunities The Company has complied with this recommendation. The Board is responsible for providing new directors with an induction to the Company and a program for providing adequate professional development opportunities for directors and management. PRINCIPLE 3: ACT ETHICALLY AND RESPONSIBLY ASX Recommendation 3.1: a listed entity should establish a code of conduct and disclose the code or a summary of the code. The Company has complied with this recommendation. The Company has established a code of conduct which requires all business affairs to be conducted legally, ethically and with integrity. A copy of the Company’s code of conduct is available in the corporate governance section of the Company's website at www.bard1.com.. PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING ASX Recommendation 4.1: The Board of a listed entity should establish an audit committee:  with at least three members, all of whom are non-executive directors and a majority of which are independent   directors chaired by an independent Director; and disclose the charter of the committee, the members of the committee and the number of times the committee met throughout the period and member attendance at those meetings The Company has not complied with this recommendation. Given the present size and complexity of the Company the Board has not constituted an Audit Committee with the full Board carrying out the role of an Audit Committee. - 11 - BARD1 LIFE SCIENCES LIMITED CORPORATE GOVERNANCE ASX Recommendation 4.2: The Board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. The Company partly complies with this recommendation. The Board has received the assurance required by ASX Recommendation 4.2 in respect of the financial statements for the half year ended 31 December 2015 and the full year ended 30 June 2016. From the Executive Chairman and Company Secretary and Consultant Financial Accountant. The Company does not presently have a Chief Financial Officer (or equivalent) appointed. Given the size and nature of the Company’s operations the Board has not received the assurance in respect of the quarterly cash flow statements believing that the provision of the assurance for the half and full year financial statements is sufficient. ASX Recommendation 4.3: a listed entity should ensure that the external auditor attends its Annual General Meeting and is available to answer questions from security holders relevant to the audit. The Company has complied with this recommendation. The external auditor attends the Annual General Meeting and is available to answer questions from shareholders relevant to the audit and financial statements. The external auditor will also be allowed a reasonable opportunity to answer written questions submitted by shareholders to the auditor as permitted under the Corporations Act. PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE ASX Recommendation 5.1: a listed entity should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. The Company has complied with this recommendation. The Company has established a continuous disclosure policy which is designed to guide compliance with ASX Listing Rule disclosure requirements and to ensure that all Directors, senior executives and employees of the Company understand their responsibilities under the policy. The CEO and Company Secretary act as the Company’s Disclosure Officers who are responsible for implementing and administering this policy. The Disclosure Officers are responsible for all communication with ASX and for making decisions on what should be disclosed publicly under this policy. In accordance with the Company's continuous disclosure policy, all information provided to ASX for release to the market is posted to its website at www.bard1.com. after ASX confirms an announcement has been made. A copy of the continuous disclosure policy is available in the corporate governance section of the Company's website at www.bard1.com.. PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS ASX Recommendation 6.1: a listed entity should provide information about itself and its governance to investors via its website The Company has complied with this recommendation. The Company’s website at www.bard1.com. contains information about the Company, Directors and management and the Company’s corporate governance practices, policies and charters. All ASX announcements made to the market, including annual and half year financial results are posted on the website as soon as they have been released by the ASX. The full text of all notices of meetings and explanatory material, the Company’s Annual Report and copies of all investor presentations are posted on the website. ASX Recommendation 6.2: a listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors The Company has complied with this recommendation. The Company’s Executive Chairman is the Company’s main contact for investors and potential investors and is available to discuss the Company’s activities when requested together with other Directors as required. In addition to announcements made in accordance with its continuous disclosure obligations the Company, from time to time, prepares and releases general investor updates about the Company. - 12 - BARD1 LIFE SCIENCES LIMITED CORPORATE GOVERNANCE ASX Recommendation 6.3: a listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders The Company has complied with this recommendation. The Company encourages participation of shareholders at any general meetings and its Annual General Meeting each year. Shareholders are encouraged to lodge direct votes or proxies subject to the adoption of satisfactory authentication procedures if they are unable to attend the meeting. The full text of all notices of meetings and explanatory material are posted on the Company’s website at www.bard1.com.. ASX Recommendation 6.4: a listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security register electronically The Company has complied with this recommendation. Contact with the Company can be made via details provided on the website. The Company’s share register provides a facility whereby investors can provide email addresses to receive correspondence from the Company electronically and investors can contact the share register via telephone, facsimile or email. PRINCIPLE 7: RECOGNISE AND MANAGE RISK ASX Recommendation 7.1: The Board of a listed entity should have a committee to oversee risk:  with at least three members, all of whom are non-executive directors and a majority of which are independent   directors chaired by an independent Director; and disclose the charter of the committee, the members of the committee and the number of times the committee met throughout the period and member attendance at those meetings The Company has not complied with this recommendation. Given the present size and complexity of the Company the Board has not constituted a Risk Committee with the full Board responsible for risk management. ASX Recommendation 7.2: The Board or a committee of the Board, of a listed entity should review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and disclose in relation to each reporting period whether such a review was undertaken The Company has complied with this recommendation. The Board is responsible for the oversight of the Company’s risk management and control framework. Responsibility for control and design of risk management is undertaken by the Board as a whole. The Board did not conduct a review during the reporting period. ASX Recommendation 7.3: a listed entity should disclose if it has an internal audit function and if it does not have an internal audit function that fact and the processes it employs for evaluating and continually improving the effectiveness of risk management and internal control processes The Company has not complied with this recommendation. Given the Company’s current size and level of operations it does not have an internal audit function. ASX Recommendation 7.4: a listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and if it does how it manages or intends to manage those risks. The Company has complied with this recommendation. The Company has exposure to economic risks, including general economy wide economic risks and risks associated with the economic cycle. There will be a requirement in the future for the Company to raise additional funding to pursue its business objectives. The Company’s ability to raise capital may be effected by these economic risks. The Company has in place risk management procedures and processes to identify, manage and minimise its exposure to these economic risks where appropriate The Board currently considers that the Company does not have any material exposure to environmental risk. - 13 - BARD1 LIFE SCIENCES LIMITED CORPORATE GOVERNANCE The Board currently considers that the Company does not have any material exposure to social sustainability risk. The Company’s Corporate Code of Conduct outlines the Company’s commitment to integrity and fair dealing in its business affairs. The code sets out the principles covering appropriate conduct in a variety of contexts and outlines the minimum standard of behaviour expected from employees when dealing with stakeholders. PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY ASX Recommendation 8.1: The board of a listed entity should establish a remuneration committee:  with at least three members the majority of which are independent directors   chaired by an independent Director; and disclose the charter of the committee, the members of the committee and the number of times the committee met throughout the period and member attendance at those meetings The Company has not complied with this recommendation. Given the present size and complexity of the Company the Board has not constituted a Remuneration Committee. ASX Recommendation 8.2: a listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives The Company has complied with this recommendation. Directors are paid a fixed annual fee for their service to the Company as a Non-Executive Director. Non-Executive Directors may, subject to shareholder approval, be granted equity based remuneration. Executives of the Company typically receive remuneration comprising a base salary component and other fixed benefits based on the terms of their employment agreements with the Company and potentially the ability to participate in bonus arrangements and may, subject to shareholder approval, if appropriate, be granted equity based remuneration. ASX Recommendation 8.3: a listed entity which has an equity based remuneration scheme should have a policy on whether participants are permitted to enter into transactions which limit the economic risk of participating in the scheme and disclose the policy or a summary of that policy. The Company has complied with this recommendation. A participant in an equity based remuneration plan operated by the Company must not enter into a transaction (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the equity based remuneration plan. - 14 - BARD1 LIFE SCIENCES LIMITED AUDITOR'S INDEPENDENCE DECLARATION Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s Independence Declaration to the Directors of BARD1 Life Sciences Limited As lead auditor for the audit of BARD1 Life Sciences Limited for the six month period ended 30 June 2016, I declare 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 BARD1 Life Sciences Limited and the entities it controlled during the financial period. Ernst & Young V L Hoang Partner 30 September 2016 - 15 - BARD1 LIFE SCIENCES LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2016 Employee benefits expense Listing expense on acquisition of Bard1 Life Sciences Limited Loss arising from re-measurement of financial liabilities Depreciation expense Administration costs Loss before income tax expense Income tax expense Loss after income tax expense Other comprehensive income Items that may be subsequently reclassified to operating result Foreign currency translation Other comprehensive income/(loss) for the year, net of tax Total comprehensive loss attributable to the members of BARD1 Life Sciences Limited Loss per share: Basic loss per share Diluted loss per share Consolidated Group Note For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ 3 3 3 3 3 4 13 18 18 (13,673) (2,463,404) (250,000) (4,253) (109,763) (2,841,093) - (2,841,093) - - - (20,823) (64,446) (85,269) - (85,269) 2,645 2,645 (24,584) (24,584) (2,838,448) (109,853) Cents Cents (1.18) (1.18) (0.04) (0.04) The accompanying notes form part of these financial statements. - 16 - BARD1 LIFE SCIENCES LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016 Current Assets Cash and cash equivalents Trade and other receivables Held for trading investments Total Current Assets Non-Current Assets Property, plant and equipment Financial assets classified as available for sale Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade and other payables Provisions Convertible notes Total Current Liabilities TOTAL LIABILITIES NET ASSETS/(LIABILITES) EQUITY Issued Capital Distribution reserve Foreign exchange translation reserve Accumulated losses TOTAL EQUITY/(DEFICIT) Notes Consolidated Group 30 June 2016 $ 31 December 2015 $ 15 5 6 8 7 9 10 11 12 13 13 14 3,097,751 76,412 25,649 3,199,812 8,008 84,689 92,697 3,292,509 368,977 20,224 69,387 458,588 458,588 2,833,921 6,620,495 (309,421) (41,272) (3,435,881) 2,833,921 67,164 5,050 - 72,214 12,261 - 12,261 84,475 324,186 - 69,902 394,088 394,088 (309,613) 329,092 - (43,917) (594,788) (309,613) The accompanying notes form part of these financial statements. - 17 - BARD1 LIFE SCIENCES LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2016 For the year ended 31 December 2015 Issued Capital Accumulated Losses Distribution Reserve $ $ $ Foreign Currency Translation Reserve $ Total Equity $ Balance at 1 January 2015 329,092 (509,519) Loss for the year Other comprehensive income for the year, net of tax Total comprehensive loss for the year Issue of shares – net of costs - - - - (85,269) - (85,269) - Balance at 31 December 2015 329,092 (594,788) - - - - - - (19,333) (199,760) - (85,269) (24,584) (24,584) (24,584) (109,853) - - (43,917) (309,613) For the six months ended 30 June 2016 Issued Capital $ Accumulated Losses Distributio n Reserve $ $ Foreign Currency Translatio n Reserve $ Total Equity $ Balance at 1 January 2016 329,092 (594,788) Loss for the period Other comprehensive income Total comprehensive loss for the period - - - Issue of shares – net of costs 6,291,403 Distribution to owners - (2,841,093) - (2,841,093) - - - - - - - (309,421) (43,917) (309,613) - (2,841,093) 2,645 2,645 - - 2,645 (2,838,448) 6,291,403 (309,421) Balance at 30 June 2016 6,620,495 (3,435,881) (309,421) (41,272) 2,833,921 The accompanying notes form part of these financial statements. - 18 - BARD1 LIFE SCIENCES LIMITED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2016 Notes Consolidated Group For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ Cash Flows from Operating Activities Payments to suppliers and employees Interest paid Net cash flows used in operating activities 15 Cash Flows from Investing Activities Net cash acquired on acquisition of subsidiary 27 Net cash inflows from investing activities Cash Flows from Financing Activities Proceeds from issue of shares Convertible notes issued Distribution to owners Share issue costs Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial period Cash equivalents at the end of the financial period (77,100) (1,016) (78,116) 701,227 701,227 3,000,000 - (309,421) (283,103) 2,407,476 3,030,587 67,164 3,097,751 (22,867) (1,066) (23,933) - - - 69,902 - - 69,902 45,969 21,195 67,164 The accompanying notes form part of these financial statements. - 19 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 1. CORPORATE INFORMATION The financial report of BARD1 Life Sciences Limited (the Company) for the six months ended 30 June 2016 was authorised for issue in accordance with a resolution of the directors on 30 September 2016. BARD1 Life Sciences Limited is a Company limited by shares incorporated and domiciled in Australia and whose shares are publicly traded on the Australian Securities Exchange. The company is a for-profit entity. The principal activity of the consolidated group during the financial year was the development, though certain proprietary intellectual property, a simple blood test for the screening and diagnosing of lung cancer at an early stage of disease progression. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). The financial report has been prepared on a historical cost basis, except for held for trading and available for-sale investments, which have been measured at fair value. The financial report is prepared in Australian dollars. (b) Acquisition of BARD1 Life Sciences Limited On 17 June 2016 BARD1 Life Sciences Limited (formerly Eurogold Limited) completed the legal acquisition of BARD1AG SA. Under the Australian Accounting Standards BARD1AG SA was deemed to be the accounting acquirer in this transaction. The acquisition has been accounted for as a share based payment by which BARD1AG SA acquires the net assets and listing status of BARD1 Life Sciences Limited. Accordingly, the 2016 consolidated financial statements of BARD1 Life Sciences Limited were prepared as a continuation of the business and operations of BARD1AG SA. As the deemed acquirer, BARD1AG SA has accounted for the acquisition of BARD1 Life Sciences Limited from 17 June 2016. BARD1AG SA’s previous financial year end was 31 December 2015, while Bard1 Life Science Limited’s financial year end for the current period presented was 30 June 2016. The implications of the acquisition by BARD1AG SA on the financial statements are as follows: (i) Statement of comprehensive income • The 2016 Statement of comprehensive income comprises the total comprehensive income for the 6 months ended 30 June 2016 for BARD1AG SA, and the period from 17 June 2016 until 30 June 2016 for BARD1 Life Sciences Limited. • The comparative information is the Statement of comprehensive income for the 12 months ended 31 December 2015 for BARD1AG SA. (ii) Statement of financial position  • The 2016 Statement of financial position as at 30 June 2016 represents the combination of BARD1AG SA and BARD1 Life Sciences Limited. The comparative information as at 31 December 2015 is the Statement of financial position of BARD1AG SA. (iii) Statement of changes in equity • The 2016 Statement of changes in equity comprises: ► The equity balance of BARD1AG SA as at 1 January 2016. ► The 2016 total comprehensive income and transactions with equity holders, is for BARD1AG SA for the six months ended 30 June 2016 and the period from 17 June 2016 until 30 June 2016 for BARD1 Life Sciences; ► The equity balance of the combined BARD1AG SA and BARD1 Life Sciences, and its controlled entities, at the end of the financial year, 30 June 2016 • The comparative information for the year ended 31 December 2015 is the Statement of changes in equity of BARD1AG SA. (iv) Statement of cash flows - 20 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 • The 2016 Statement of cash flows comprises: ► The cash balance of BARD1AG SA as at 1 January 2016; ► The transactions for the 6 months ended 30 June 2016 of BARD1AG SA and the period from ► 17 June 2016 until 30 June 2016 for BARD1 Life Sciences Limited; cash balance of the combined BARD1AG SA and BARD1 Life Sciences Limited at the end of the financial year, 30 June 2016. • The comparative information for the year ended 31 December 2015 is the Statement of cash flows of BARD1AG SA. (c) Compliance Statement and conversion to IFRS The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. As explained in Note 2(a) above, following the acquisition of BARD1 Life Sciences Limited, the consolidated financial statements represent the continuation of the business and activities of BARD1AG SA. This financial report is the Consolidated Entity’s first consolidated financial statements prepared in accordance with Australian Accounting Standards (“AASB”) and International Financial Reporting Standards (“IFRS”). Accordingly, in preparing the consolidated financial statements, AASB 1 First-time Adoption of Australian Accounting Standards (“AASB 1”) has been applied. Prior to the adoption of AASB, the Consolidated Entity’s financial statements were prepared as special purpose financial statements to meet the needs of members. As these financial statements are the Consolidated Entity’s first annual financial statements prepared in accordance with AASB, the group considered the transitional exceptions and exemptions in AASB 1 and has updated its accounting policies in line with the requirements of Australian Accounting Standards. Due to the current stage of the Group’s operations, the adoption of AASB had no material impact on the equity of the consolidated entity at the date of transition to AASB, being 1 January 2016, or at the end of the comparative period, 31 December 2015. Furthermore, the adoption of AASB had no impact on total comprehensive income for the comparative period ended 31 December 2015. (d) Change in presentation currency The presentation currency of BARD1AG SA applied in its last set of financial statements was Swiss Francs. A change in presentation currency is a change in accounting policy, which is accounted for retrospectively. The comparative information of the consolidated entity previously reported in Swiss Francs has been restated into Australian (AUS) dollars using the procedures outlined below:     assets and liabilities denominated in non-AUS dollar currencies were translated into AUS dollars at the closing rates of exchange on the relevant balance sheet date; non-AUS dollar income and expenditure were translated at the average rates of exchange prevailing for the relevant period; equity was translated at the historic rates prevailing at the date of each transaction; all exchange rates were extracted from the Group's underlying financial records. (e) New Accounting Standards and Interpretations that are not yet mandatory Australian Accounting Standards and Interpretations that have been recently issued or amended but are not yet effective have not been adopted by the Group for the annual reporting period ending 30 June 2016. These are outlined in the table below: Reference Title Summary AASB 9 Financial Instruments AASB 9 (December 2014) is a new standard which replaces AASB 139. This new version supersedes AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for classification and measurement, a single, forward- looking ‘expected loss’ impairment model and a substantially-reformed approach to hedge accounting. AASB 9 is effective for annual periods beginning on or after 1 January 2018. However, the Standard is - 21 - Application date of standard Application date for Group 1 January 2018 1 July 2018 Application date of standard Application date for Group 1 January 2018* 1 July 2017** BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 Reference Title Summary AASB 15 Revenue from Contracts with Customers available for early adoption. The own credit changes can be early adopted in isolation without otherwise changing the accounting for financial instruments. AASB 15 Revenue from Contracts with Customers replaces the existing revenue recognition standards AASB 111 Construction Contracts, AASB 118 Revenue and related Interpretations (Interpretation 13 Customer Loyalty Programmes, Interpretation 15 Agreements for the Construction of Real Estate, Interpretation 18 Transfers of Assets from Customers, Interpretation 131 Revenue—Barter Transactions Involving Advertising Services and Interpretation 1042 Subscriber Acquisition Costs in the Telecommunications Industry). AASB 15 incorporates the requirements of IFRS 15 Revenue from Contracts with Customers issued by the International Accounting Standards Board (IASB) and developed jointly with the US Financial Accounting Standards Board (FASB). AASB 15 specifies the accounting treatment for revenue arising from contracts with customers (except for contracts within the scope of other accounting standards such as leases or financial instruments).The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps: (a) Step 1: Identify the contract(s) with a customer (b) Step 2: Identify the performance obligations in the contract (c) Step 3: Determine the transaction price (d) Step 4: Allocate the transaction price to the performance obligations in the contract (e) Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation Currently, AASB 15 is effective for annual reporting periods commencing on or after 1 January 2017. Early application is permitted. (Note A) AASB 2014-5 incorporates the consequential amendments to a number Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 15. AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle The subjects of the principal amendments to the Standards are set out below: 1 January 2016 1 July 2016 AASB 5 Non-current Assets Held for Sale and Discontinued Operations: • Changes in methods of disposal – where an entity reclassifies an asset (or disposal group) directly from being held for distribution to being held for sale (or visa versa), an entity shall not follow the guidance in paragraphs 27–29 to account for this change. AASB 7 Financial Instruments: Disclosures: • Servicing contracts - clarifies how an entity should apply the guidance in paragraph 42C of AASB 7 to a servicing contract to decide whether a servicing contract is ‘continuing involvement’ for the purposes of applying the disclosure requirements in paragraphs 42E– 42H of AASB 7. - 22 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 Reference Title Summary Application date of standard Application date for Group • Applicability of the amendments to AASB 7 to condensed interim financial statements - clarify that the additional disclosure required by the amendments to AASB 7 Disclosure– Offsetting Financial Assets and Financial Liabilities is not specifically required for all interim periods. However, the additional disclosure is required to be given in condensed interim financial statements that are prepared in accordance with AASB 134 Interim Financial Reporting when its inclusion would be required by the requirements of AASB 134. AASB 119 Employee Benefits: • Discount rate: regional market issue - clarifies that the high quality corporate bonds used to estimate the discount rate for post- employment benefit obligations should be denominated in the same currency as the liability. Further it clarifies that the depth of the market for high quality corporate bonds should be assessed at the currency level. AASB 134 Interim Financial Reporting: • Disclosure of information ‘elsewhere in the interim financial report’ - amends AASB 134 to clarify the meaning of disclosure of information ‘elsewhere in the interim financial report’ and to require the inclusion of a cross-reference from the interim financial statements to the location of this information. The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure Initiative project. The amendments are designed to further encourage companies to apply professional judgment in determining what information to disclose in the financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. The amendments also clarify that companies should use professional judgment in determining where and in what order information is presented in the financial disclosures. The Standard completes the AASB’s project to remove Australian guidance on materiality from Australian Accounting Standards. 1 January 2016 1 July 2016 1 July 2015 1 July 2015 AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality * The IASB has decided to defer the effective date of IFRS 15 (the international equivalent of AASB 15) from 1 January 2017 to 1 January 2018. ** The Company is currently evaluating the impact of the new standard. The potential effect of these standards is yet to be fully determined. For standards and interpretations effective from 1 July 2016, it is not expected that the new Standards and Interpretations will significantly affect the Group’s financial position of performance. - 23 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 (f) Statement of Significant Accounting Policies (i) Basis of Consolidation The consolidated financial statements comprise the financial statements of BARD1 Life Sciences Limited and its subsidiaries as at 30 June 2016 (the Group). Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:    Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); Exposure, or rights, to variable returns from its involvement with the investee; and The ability to use its power over the investee to affect its returns. When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:    The contractual arrangement with the other vote holders of the investee Rights arising from other contractual arrangements The Group’s voting rights and potential voting rights The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non- controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:        De-recognises the assets (including goodwill) and liabilities of the subsidiary De-recognises the carrying amount of any non-controlling interests De-recognises the cumulative translation differences recorded in equity Recognises the fair value of the consideration received Recognises the fair value of any investment retained Recognises any surplus or deficit in profit or loss Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities Business combinations are accounted for using the acquisition method. (ii) Revenue recognition Revenue is recognised and measured at the amount received or receivables to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Rendering of Services Revenue is recognised as the services are rendered in accordance with the terms and conditions of the contract. Interest Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset) to the net carrying amount of the financial asset. - 24 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 (iii) Income tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided on all temporary differences at the balance date between the tax bases of the assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except:  where the deferred income tax arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and  in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised except:  where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and  in respect of deductible temporary difference associated with investments in subsidiaries, deferred tax asset are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive income. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. (iv) Goods and services tax Revenues, expenses and assets (other than receivables) are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the Cash Flow Statement on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the ATO are classified as operating cash flows. - 25 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 (v) Plant and equipment Cost Plant and equipment is stated at cost less any accumulated depreciation and any impairment losses. The cost of an item of plant and equipment comprises:    its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Depreciation Depreciation is provided on a straight-line basis on all plant and equipment. Major depreciation periods are: Plant & equipment 3 – 5 years straight line Life Method Impairment The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If any indication of impairment exists and where the carrying values exceed the estimated recoverable amount, the assets or cash- generating units are written down to their recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the asset. De-recognition An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the profit or loss in the period the item is derecognised. (vi) Impairment of non-financial assets At each reporting date, the consolidated entity assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the consolidated entity makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash- generating unit to which the asset belongs. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. As assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. (vii) Trade and other receivables All trade and other receivables are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the receivable. - 26 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 Receivables from related parties are recognised and carried at the nominal amount due. Interest is taken up as income on an accrual basis. Allowance for doubtful debts are made based on an assessment made by directors on the recoverability of receivables. Collectability of trade receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment provision is recognised when there is objective evidence that the Consolidated Entity will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate. (viii) Investments and other financial assets Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale assets. The classification depends on the purpose for which the investments were acquired. When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs. Recognition and De-recognition All regular way purchases and sales of financial assets are recognised on the trade date, ie the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the market place. Financial assets are derecognised when the right to receive cash flows from the financial assets have expired or been transferred. (i) Financial assets at fair value through profit or loss Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term with the intention of making a profit. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on financial assets held for trading are recognised in profit or loss and the related assets are classified as current assets in the statement of financial position. (ii) Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process. (iii) Available-for-sale investments Available-for-sale investments are those non-derivative financial assets, principally equity securities that are designated as available-for-sale or are not classified as any of the two preceding categories. After initial recognition available-for-sale securities are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss. The fair values of investments that are actively traded in organised financial markets are determined by reference to quoted market bid prices at the close of business on the balance date. (ix) Leased assets The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the specific asset or assets and the arrangement conveys a right to use the asset. - 27 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 Operating Leases Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Payments made under operating leases are expensed in the profit or loss on a straight-line basis over the term of the lease. (x) Trade and other payables Liabilities for trade creditors and other amounts are carried at amortised cost and represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year that are unpaid and arise when the consolidated entity becomes obliged to make future payments in respect of the purchase of these goods and services. Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accruals basis. (xi) Foreign currency translation Both the functional and presentation currency of BARD1 Life Sciences Limited is Australian dollars (A$). Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange ruling at the balance date. All exchange differences in the consolidated financial report are taken to the profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the original transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The results of the Group’s non-A$ reporting subsidiary is translated into A$ (presentation currency). Income and expenses are translated at the exchange rates at the date of the transactions. Assets and liabilities are translated at the closing exchange rate for each balance sheet date. Share capital, reserves and accumulated losses are converted at applicable historical rates. Exchange variations resulting from the translation are recognised in the foreign currency translation reserve in equity. On consolidation, exchange differences arising from the translation of monetary items considered to be part of the net investment in subsidiaries are taken to the foreign currency translation reserve. If a subsidiary were sold, the proportionate share of the foreign currency translation reserve would be transferred out of equity and recognised in the statement of comprehensive income. (xii) Employee benefits Liabilities arising in respect of wages and salaries, annual leave and any other employee entitlements expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates expected to be paid when the liability is settled. All other employee entitlement liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to high quality corporate bonds that have terms to maturity approximating the terms of the related liability are used. (xiii) Provisions A provision is recognised when a legal or constructive obligation exists as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the consolidated entity expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. - 28 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 (xiv) Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity 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. For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest-bearing loans and borrowings in current liabilities on the statement of financial position. (xv) Issued Capital Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity, net of tax, as a reduction of the proceeds received. (xvi) Earnings Per Share Basic earnings per share (EPS) is calculated by dividing the net profit attributable to members of the Company for the reporting period, after excluding any costs of servicing equity (other than dividends on ordinary shares), by the weighted average number of ordinary shares of the Company, adjusted for any bonus issue. Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive potential ordinary shares and other non-discretionary changes in revenues and expenses that would result from the dilution of potential ordinary shares, by the weighted average number of ordinary shares and dilutive potential ordinary shares of the Company adjusted for any bonus issue. (xvii) Interest-bearing loans and borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised. (xviii) Judgements in applying accounting policies and key sources of estimation uncertainty (i) Significant accounting estimates and assumptions The carrying value of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are outlined below. (ii) Impairment of available-for-sale assets The Group holds a number of available-for-sale financial assets and follows the requirements of AASB 139 Financial Instruments: Recognition and Measurement in determining when an available- for-sale asset is impaired. In making these estimates of assumptions the Group assessed the duration and extent to which the fair value is less than cost. (xix) Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. - 29 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the netdisposal proceeds and the car carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised. (xx) Research and Development Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:  The technical feasibility of completing the intangible asset so that the asset will be available for use or sale Its intention to complete and its ability and intention to use or sell the asset   How the asset will generate future economic benefits The availability of resources to complete the asset  The ability to measure reliably the expenditure during development  Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation is recorded in cost of sales. During the period of development, the asset is tested for impairment annually. (xxi) Convertible notes The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the Statement of Financial Position, net of transaction costs. On issuance of the convertible notes, the fair value of the liability component is determined using an estimated market rate for an equivalent non-convertible bond and this amount is carried as a liability on an amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance cost. Interest on the liability component of the instruments is recognised as an expense in the Statement of Comprehensive Income. The fair value of any derivative features embedded in the convertible notes, other than the equity component, are included in the liability component. Subsequent to initial recognition, these derivate features are measured at fair value with gains and losses recognised in the profit and loss if they are not closely related to the host contract. (xxii) Share-based payments Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. - 30 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 3. EXPENSES Employee benefits Listing fee expense on acquisition of Bard1 (Note 27) Loss arising from re-measurement of financial liabilities (a) Depreciation Administration costs Consolidated Group For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ 13,673 2,463,404 250,000 4,253 109,763 2,841,093 - - - 20,823 64,446 85,269 (a) On 8 March 2012, Universite De Geneve (UNIGE) & Hopitaux Universitaires De Geneve (HUG) (the “Institutions”) granted BARD1AG an exclusive licence to use intellectual property relating to “Bard1 Isoforms In Lung And Colorectal Cancer and Use Thereof”. The consideration comprised a right to equity to BARD1AG plus a trailing commission of 2% of net sales. On a change in control of BARD1AG, BARD1AG was required to make a payment equivalent to 5% of the proceeds as if they were a shareholder in BARD1AG of the transaction. The fair value of the consideration was estimated to be $nil on initial recognition and remained the same at 31 December 2015. The change in control occurred on 17 June 2016 and it was agreed that 12,500,000 shares were issued to the Institutions in settlement of the Change of Control Payment obligation under the License Agreement. The fair value of consideration was re-measured to be $250,000 at the time of settlement. The movement in the fair value of the consideration between 31 December 2015 to the date of settlement of $250,000 was recognised in the Statement of Comprehensive Income as “Loss arising from re-measurement of financial liabilities”. 4. INCOME TAX (a) Major components of income tax expense for the periods presented are: Statement of comprehensive income Current income tax charge Deferred income tax Income tax expense/(benefit) reported in the Statement of Comprehensive Income (b) Amounts charged or credited directly to equity Deferred income tax related to items charged (credited) directly to equity Foreign currency translation Income tax reported in equity - - - - - - - - - - (c) A reconciliation of income tax expense applicable to accounting loss before income tax at the statutory income tax rate to income tax expense at the Group's effective income tax rate for the periods ended 30 June 2016 and 31 December 2015 is as follows: Accounting loss before tax (2,841,093) (85,269) At statutory income tax rate of 30% (2015: 25%) Adjustment for difference in tax rates Items not deductible for tax purposes Deferred tax assets not brought to account Income tax expense reported in the Statement of Comprehensive Income Tax Losses Unused tax losses for which no tax loss has been booked as a deferred tax asset Potential benefit at relevant income tax rate- (852,327) 5,558 814,021 32,748 - (21,324) - - 21,324 - 3,474,342 325,299 1,020,540 81,325 - 31 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 (d) Deferred income tax Deferred income tax at the balance date relates to the following: Provision for employee entitlements Listed investments held for trading Accruals Unrealised losses on shares Net deferred tax asset Temporary differences not recognised Deferred tax benefit recognised Statement of Financial Position 2016 $ 2015 $ 6,067 66,573 78,482 648,631 799,753 (799,753) - - - 63,533 - 63,533 (63,533) - Deferred tax assets have not been brought to account at 30 June 2016 because the directors do not believe it is appropriate to regard realisation of the future tax benefit as probable. These benefits will only be obtained if: (i) (ii) (iii) the Consolidated Entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deduction for the loss to be realised; the Consolidated Entity complies with the conditions for the deductibility imposed by law including the continuity of ownership and/or business tests; and no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit from the deduction for the loss. 5. TRADE AND OTHER RECEIVABLES Current Other receivables Consolidated Group For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ 76,412 76,412 5,050 5,050 Terms and conditions relating to the above financial instruments: (i) There are no receivables that are aged past the payment terms, and all receivables are current. 6. INVESTMENTS CLASSIFIED AS HELD FOR TRADING Shares in listed entities classified as held for trading Investments classified as held for trading consist of investments in ordinary shares. The fair value has been determined by Level 1 in accordance with the fair value hierarchy under AASB 13 Fair Value Measurement disclosed in Note 25(c). 25,649 25,649 - - - 32 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 7. AVAILABLE FOR SALE FINANCIAL ASSETS Shares in listed entities classified as available for sale (1) (1) Investments classified as available for sale consist of investments in ordinary shares. The fair value has been determined by Level 1 in accordance with the fair value hierarchy under AASB 13 Fair Value Measurement disclosed in Note 25(c). 8. PROPERTY, PLANT AND EQUIPMENT Office equipment and furniture Less accumulated depreciation Net carrying amount at end of year 9. PAYABLES AND ACCRUALS Sundry accruals Trade and other payables are generally unsecured, interest free and on 30 day terms. 10. PROVISIONS Annual Leave 11. BORROWINGS Convertible Notes Consolidated Group For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ 84,689 84,689 - - 33,239 (25,231) 33,239 (20,978) 8,008 12,261 368,977 324,187 368,977 324,187 20,224 20,224 69,387 69,387 - - 69,902 69,902 The notes were entered into in July 2015 with a term of one year. The note can be repaid earlier by BARD1AG SA by giving one-month notice. The notes are unsecured, do not bear interest and are convertible into shares of BARD1AG at the lower of the valuation of the Company at the time of conversion or $1,923,600 (CHF1,400,000). The amount was repaid in full on 13 July 2016 for $67,495 based on the exchange rate prevailing at that date. - 33 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 12. CONTRIBUTED EQUITY (a) Issued and paid up capital Ordinary shares (net of issue costs) At the beginning of the period Elimination of all BARD1AG SA shares on acquisition of Bard1 Life Sciences Limited Existing shares of Bard1 Life Sciences Limited Acquisition of BARD1AG SA Issue of shares on re-compliance 30 June 2016 $ 31 December 2015 $ 6,620,495 329,092 For the six months ended 30 June 2016 For the year ended 31 December 2015 Number of shares $ Number of shares $ 300,000 329,092 300,000 329,092 (300,000) 172,493,350 - - 217,003,235 3,449,867 150,000,000 3,000,000 - (408,464) - - - - - - - - - - - - 551,996,585 6,620,495 300,000 329,092 Issued to University pursuant to agreement (refer to note 3) 12,500,000 250,000 Less: transaction costs At the end of the period (b) Terms and conditions of contributed equity Ordinary Shares Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. (c) Capital management When managing capital, defined as equity and debt facilities, management’s objective is to ensure that the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. 13. RESERVES Distribution reserve Foreign currency translation reserve Distribution reserve Balance at beginning of year Cash consideration for share issue by BARD1AG SA vendors Balance at the end of the year* Foreign Currency Translation Reserve ** Balance at beginning of year Foreign currency translation Balance at the end of the year - 34 - Consolidated Group For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ 309,421 41,272 350,693 - 309,421 309,421 - 43,917 43,917 - - - 43,917 (2,645) 41,272 19,333 24,584 43,917 BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 *The distribution reserve is used to record distributions to owners in their capacity as owners. ** The foreign currency translation reserve is used to record the translation of the results of non-A$ subsidaries from their functional currency to the Group’s presentation currency. 14. ACCUMULATED LOSSES Balance at the beginning of the year Net loss attributable to members 15. CASH AND CASH EQUIVALENTS Consolidated Group For the six months ended 30 June 2016 $ For the year ending 31 December 2015 $ (594,788) (2,841,093) (3,435,881) (509,519) (85,269) (594,788) Cash at bank 3,097,751 67,164 Net loss after income tax Depreciation Listing fee expense on acquisition of Bard 1 Loss arising from re-measurement of financial liabilities Changes in Assets & Liabilities: (Increase)/decrease in receivables Increase/(decrease) in payables Increase/(decrease) in provisions (2,841,093) 4,253 2,463,404 250,000 (97,273) (51,953) - (85,269) 20,823 - - - 40,513 - Net cash used in operating activities (78,116) (23,933) 16. EXPENDITURE COMMITMENTS There are no expenditure commitments not recorded in the Financial Statements. 17. SEGMENT INFORMATION For management purposes, the Group is organised into one main operating segment, being the development, though certain proprietary intellectual property, a simple blood test for the screening and diagnosing of lung cancer at an early stage of disease progression. All the Group’s activities are interconnected and all significant operating decisions are based on analysis of the Group as one segment. The financial results of the segment are the equivalent of the financial statements as a whole. At 30 June 2016, all revenues and material assets are considered to be derived and held in one geographical area being Australia. 18. LOSS PER SHARE Basic loss per share amounts are calculated by dividing net loss for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period adjusted by any bonus issue. Diluted loss per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of the parent adjusted for the weighted average number of ordinary shares and dilutive potential ordinary shares of the Company adjusted by any bonus issue. The following reflects the income and share data used in the basic and diluted earnings per share computations: - 35 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 Consolidated Group For the six months ended 30 June 2016 $ For the year ending 31 December 2015 $ Net Loss used in calculating basic and diluted EPS (2,841,093) (85,269) Weighted average number of ordinary shares for basic earnings per share Effect of dilution*: Share options 241,063,532 217,003,236 - - Weighted average number of ordinary shares adjusted for the effect of dilution 241,063,532 217,003,236 Basic and diluted loss per share (cents per share) for the year attributable to members of BARD1 Life Sciences Limited (1.18) (0.04) * At 30 June 2016, the Company had on issue 217,003,236 (2015: nil) performance shares that are excluded from the calculation of diluted loss per share for the current period, because they were anti-dilutive as their inclusion reduced the loss per share. 19. DIRECTORS & KEY MANAGEMENT PERSONNEL (a) Compensation by Category: Key Management Personnel Short-Term employee benefits Post-Employment Consolidated Group For the six months ended 30 June 2016 $ For the year ended 31 December 2015 $ 11,098 - 11,098 - - - Key management personnel are those directly accountable and responsible for the operational management and strategic direction of the Company and the consolidated entity. (b) Options granted to Key Management Personnel The Company currently has an Options Scheme in place. However during the current and previous financial period, no options were issued to Key Management Personnel under the scheme. (c) Loans to Key Management Personnel As at 30 June 2016 I Irminger-Finger was owed $34,350 (CH 25,500) by BARD1AG SA for outstanding Convertible Notes. Refer to Note 11 for the terms and conditions. The amount was repaid on 13 July 2016. There were no other amounts owed to KMP’s at 30 June 2016. - 36 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 20. AUDITORS’ REMUNERATION Amounts received or due and receivable by Ernst & Young Australia for: - an audit or review of the financial report of the entity and any other entity in the consolidated entity Amounts received or due and receivable by BDO Audit WA Pty Ltd for: - an audit or review of the financial reports of the entity and any other entity in the consolidated entity Consolidated For the six months ended 30 June 2016 $ For the year ending 31 December 2015 $ 39,140 - - 7,140 21. RELATED PARTY DISCLOSURES Other related party transactions (a) Wholly Owned Group Transactions Details of interests in controlled entities are set out in Note 22. Details of dealings are set out below. (b) Ultimate Parent Company BARD1 Life Sciences Limited is the ultimate legal Australian holding Company. (c) Transactions with Other Related Parties The Company does not have any transactions with other related parties. 22. CONTROLLED ENTITIES Consolidated entities of BARD1 Life Sciences Limited Country of Incorporation Equity Interest held % BARD1AG SA(1) Switzerland 30 June 30 June 2015 2016 100 - (i) On 17 June 2016, BARD1 Life Sciences Limited (formerly Eurogold Limited) completed the legal acquisition of BARD1AG SA. Under the Australian Accounting Standards BARD1AG SA was deemed to be the accounting acquirer in this transaction and BARD1 Life Sciences deemed to be the accounting acquiree. BARD1 Life Sciences Limited remains the legal parent. 23. EVENTS SUBSEQUENT TO BALANCE DATE At the date of this report, there have been no matters or circumstances that have arisen since the end of the financial year which significantly, or may significantly effect:    The consolidated group’s operations in future years; The results of those operations in future years; or The consolidated entity’s state of affairs in future years. - 37 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 24. PARENT ENTITY – Information relating to Bard1 Life Sciences Limited Current assets Total assets Current liabilities Non-current liabilities Total liabilities Issued capital Accumulated losses Reserves Total shareholders’ equity Loss of the parent entity Total comprehensive loss of the parent entity For the year ended 30 June 2016 $ 3,188,536 3,273,225 (21,173) - (21,173) 68,720,059 (65,513,679) 45,680 3,252,052 (5,683,388) (5,683,388) For the year ended 30 June 2015 $ 1,735,126 1,848,113 (90,415) - (90,415) 61,538,458 (59,830,315) 45,680 1,757,698 (2,984,301) (2,984,301) 25. (a) Refer to note 26 for disclosure of any contingent asset and liabilities of the parent entity. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial Risk Management Objectives & Policies The Group's principal financial instruments comprise cash, investments in listed companies, some of which are classified as held for trading and some considered long-term investments, and short-term borrowings. The main purpose of these financial instruments is to raise finance for the Group operations. The Group has various other financial assets and liabilities such as receivables and payables, which arise directly from its operations. The Executive Chairman is responsible for managing the risks associated with the Group’s financial investments and reporting to the board of directors. Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements. (b) Interest Rate Risk - Consolidated The consolidated entity’s exposure to interest rate risks and the effective interest rates of financial assets (excluding investments in controlled entities and associates) and financial liabilities are as follows: Financial Instrument Floating Interest Rate Non-Interest Bearing Fixed Interest Rate 30 June 2016 $ 31 December 2015 $ 30 June 2016 $ 31 December 2015 $ 30 June 2016 $ 31 December 2015 $ 30 June 2016 $ Total 31 December 2015 $ (i) Financial Assets Cash assets Receivables Total financial assets (ii) Financial Liabilities Payables Convertible \notes Total financial liabilities 3,097,751 - 67,164 - - 76,412 - 5,050 3,097,751 67,164 76,412 5,050 - - - - - - 368,977 324,186 69,387 69,902 438,364 394,088 - 38 - - - - - - - - 3,097,751 76,412 67,164 5,050 - 3,174,163 72,214 - - - 368,977 324,186 69,387 69,902 438,364 394,088 BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 A reasonably possible change in interest rates would not have a material impact on the financial position or performance of the consolidated entity. c) Fair values The carrying amount of financial assets and financial liabilities recorded in the financial statements at amortised cost materially approximates their respective fair values. The Fair Value Hierarchy assigns rankings to the level of judgment which is applied in deriving inputs for valuation techniques used to measure fair value. The three levels of the Fair Value Hierarchy are as follows: Level 1 is the preferred input for valuation and reflects unadjusted quoted prices in active markets for identical assets or liabilities which the economic entity can access at the end of the reporting period. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's length basis. Level 2 is the valuation of assets and liabilities either directly or indirectly based upon market observables other than quoted prices. For example: financial assets with fair values based on broker quotes; investments in private equity funds with fair values obtained via fund managers; and assets that are valued using the economic entities' own models whereby the majority of assumptions are market observable. Level 3 relates to inputs that are unobservable. Unobservable inputs means that fair values are determined in whole or in part using a valuation technique (model) based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. (d) (e) Investments classified as held for trading and held for sale consist of investments in ordinary shares. Fair value of the investments has been determined as described in Level 1 above. Credit Risk Exposures The consolidated entity’s maximum exposure to credit risk at balance date in relation to each class of recognised financial assets is the carrying amount, net of any allowance for doubtful debts, of those assets as indicated in the statement of financial position. Concentration of Credit Risk The consolidated entity is not materially exposed to any individual overseas country or individual customer. The company only banks with reputable financial institutes with good credit ratings. Liquidity Risk The consolidated entity’s objective is to maintain consistency of funding via the raising of equity or short term loans as and when required. The contractual maturity analysis of trade payables of $368,977 is set out in note 9. All liabilities are contractually due and payable in the next six months. The convertible note had a contractual maturity of 1 month as at 30 June 2016 (2015: 7 months) and was fully repaid on 13 July 2016. (f) Market Price Risk on Held for Trading and Available for Sale Investments The amount of investments recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in Note 2. A reasonably possible change in the market value of investments would not have a material impact on the financial position or performance of the group. 26. CONTINGENT ASSET AND LIABILITIES BARD1 Life Sciences Limited has guaranteed the payment of a royalty by Saulyak Limited Liability Company based on gold output from the Saulyak Gold Project which was disposed of by BARD1 Life Sciences Limited on 10 July 2007. The royalty is up to 2% net smelter royalty per ounce of gold produced form the Saulyak Gold Project payable only in respect of ounces of gold produced over 750,000 ounces in total. Gold production from the Saulyak Gold Project has not yet commenced with the current owners of the project yet to secure a mining licence. At the time of the sale of the project by BARD1 Life Sciences Limited total reserves identified at the project were not in excess of 750,000 ounces. - 39 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 27. ACQUISITION OF BARD1 LIFE SCIENCES LIMITED On 17 June 2016, the Company successfully completed the acquisition of BARD1AG SA SA (BARD1AG SA) together with a $3 million capital raising (Acquisition Transaction). The Acquisition Transaction resulted in BARD1AG SA’s shareholders obtaining control of the Company and the board of directors being restructured such that one of the Company’s three directors stepped down to be replaced by two BARD1AG SA nominees. The combination of these factors has resulted in the Acquisition Transaction being treated as a reverse acquisition for accounting purposes. Consequently, the Company (the legal parent) has been accounted for as the subsidiary and BARD1AG SA (the legal subsidiary) has been accounted for as the parent entity. The acquisition has been accounted for as a share-based payment by which BARD1AG SA acquired the net assets and listing status of Bard1 Life Sciences Limited. On 17 June 2016 the Acquisition Transaction was completed with the following issues effected. i) ii) iii) 217,003,236 Ordinary Shares issued to the BARD1AG SA Vendors (or their respective nominee) in consideration for the acquisition of their respective shares in BARD1AG SA; 217,003,236 Performance Shares issued to the BARD1AG SA Vendors (or their respective nominee) in consideration for the acquisition of their respective shares in BARD1AG SA; 150,000,000 Ordinary Shares issued to investors who subscribed in the capital raising Performance Shares Each Performance Share will convert into one Ordinary Share upon certain conditions being met prior to the Expiry Date. The Performance Shares are escrowed for 2 years from date of issue and have an expiry date of 5 years. Milestones for conversion are as follows:     each Performance Share will convert into one Share upon the announcement by the ASX of the following prior to the Expiry Date: the clinical trial of the blood test developed by BARD1AG SA S.A. for the detection of lung cancer (BBLC Test) has been completed; the clinical trial involved at least 2000 participants, and returned a detection rate greater than 80%, and false positive results of less than 20%; and the results of the clinical trial provide statistically significant evidence that the BBLC Test provides an outcome equal or superior to the current "gold standard" CT Scan, which has a detection rate of less than 80%, and returns false positive results of more than 20%. Performance Shares are unquoted, not entitled to dividends and there are no participation rights or entitlements inherent in the Performance Shares and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Shares. In addition to the above share issues, cash consideration of $309,421 was provided to certain BARD1AG SA vendors. As a result of the deemed reverse acquisition under accounting standards as described previously, this payment was accounted for as a distribution to owners. Purchase Consideration (a) The purchase consideration was deemed to have a value as follows, which is equivalent to the market capitalisation of Bard1 Life Sciences Limited at the date of acquisition: Shares on issue Share price of Bard1 Life Sciences Limited at the date of acquisition Purchase Consideration 172,493,350 $0.02 $3,449,867 (b) Fair Value of assets acquired and liabilities assumed - 40 - BARD1 LIFE SCIENCES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 The fair value of identifiable assets and inabilities of Bard1 Life Sciences Limited at the date of acquisition are: Assets Cash Receivables Held for trading assets Held for sale investments Prepaid capital raising costs Total Assets 701,227 168,635 25,649 84,689 125,361 1,105,561 Liabilities Payables Provisions Total Liabilities Net Assets of BARD1 Life Sciences Limited acquired (c) Excess of deemed purchase consideration over the assets acquired Deemed share based consideration Net assets of Bard1 Life Sciences Limited acquired Listing expense 98,874 20,224 119,098 $986,463 $3,449,867 $986,463 $2,463,404 28. VARIATION FROM APPENDIX 4E The audited loss for the period of $2,841,093 varies from the unaudited loss for the period reported in the Appendix 4E of $2,591,093 as announced on 31 August 2016. The variation is primarily due to the recognition of the loss arising from re-measurement of financial liabilities of $250,000 as disclosed in details under note 3(a) with a corresponding increase in the Issued Capital from $6,370,495 as reported in the Appendix 4E to the final audited balance of $6,620,495. Basic/diluted loss per share increased from 1.07 cents to 1.18 cents as a result. - 41 - BARD1 LIFE SCIENCES LIMITED SHAREHOLDERS’ INFORMATION The Directors’ of the Company declare that: 1) In the opinion of the directors: the financial statements, notes and additional disclosures included in the directors’ report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001, including: (a) complying with Accounting Standards and the Corporations Regulations 2001; and (b) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its performance for the six month period ended on that date; The financial report also complies with International Financial Reporting Standards. In the Directors’ opinion, there are reasonable grounds to believe that the Company 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 to the Directors’ in accordance with section 295A of the Corporations Act 2001 for the six month period ended 30 June 2016. 2) 3) 4) This declaration is made in accordance with a resolution of the Board of Directors signed on 30 September 2016. Peter Gunzburg Executive Chairman 30 September 2016 - 42 - BARD1 LIFE SCIENCES LIMITED SHAREHOLDERS’ INFORMATION Additional information as required by the Australian Securities Exchange and not shown elsewhere in this Report is as follows. The information is current as at 14 October 2016. The distribution of ordinary fully paid shares in the Company is as follows: Spread of Holdings 1 1,001 5,001 10,001 100,0001 & 1,000 - 5,000 - - 10,000 - 100,000 Over Number of Holdings 80 116 44 259 287 786 Number of Units 28,165 341,349 329,645 16,810,531 534,486,896 551,996,586 Percentage Issued Capital 0.01 0.06 0.06 3.05 96.82 100.00 Unmarketable Parcels The number of shareholders holding less than a marketable parcel is 260 totalling 961,996. Number of Securities on Issue The following equity securities were on issue as at 14 October 2016  551,996,586 fully paid ordinary shares Top 20 Shareholders as a 14 October 2016 Name Irmgard Irminger-Finger Tony Walker Paul Gabriel Sharbanee Supergun Pty Ltd 1. 2. 3. 4. 5. Universite De Geneve 6. Sun Hung Kai Investment Services Perth Select Seafoods Limited Professor Geoffrey John Laurent 7. 8. 9. Worldwise Enterprises Pty Ltd 10. State One Stockbroking Ltd 11. Enerview Pty Ltd 12. Shah Nominees Pty Ltd 13. Yarraandoo Pty Ltd 14. David Christian Finger 15. Florian Irminger 16. Gerise Pty Ltd 17. Peto Pty Ltd 18. Arredo Pty Ltd 19. HSBC Custody Nominees (Australia) Limited 20. Fong Chau Alan Cheung Top 20 holders of ORDINARY FULLY PAID Number of Shares 108,252,420 88,501,626 28,217,074 17,647,004 12,500,000 10,225,620 10,000,000 9,999,600 9,734,000 8,030,000 7,000,000 6,000,000 5,500,000 5,124,795 5,124,795 4,700,000 4,500,000 4,315,815 4,314,683 3,500,000 353,187,432 % Shares Held 19.61 16.03 5.11 3.20 2.26 1.85 1.81 1.81 1.76 1.45 1.27 1.09 1.00 0.93 0.93 0.85 0.82 0.78 0.78 0.63 63.98 The portion of shares held by the 20 largest shareholders in the Company is 63.98%. Voting Rights In accordance with the Company’s Constitution, voting rights of ordinary shares are on a show of hands whereby each member present in person (or representing a corporation who is a member) shall have one vote and upon a poll, each share will have one vote. BARD1 LIFE SCIENCES LIMITED SHAREHOLDERS’ INFORMATION Restricted Securities As at the date of this report, there are:   229,503,236 Ordinary Shares escrowed for a period of 24 months from17 June 2016; and 118,252,020 Unquoted Performance Shares Escrowed for a period of 24 months from 17 June 2016 and with an expiry date of 5 years from the date of issue. Performance Shares are unquoted, not entitled to dividends and there are no participation rights or entitlements inherent in the Performance Shares and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Shares. Substantial Holders as at 14 October 2016 The substantial shareholders pursuant to the provisions of the Corporations Act and listed in the Company’s register is as follows: Name Number of Shares % Shares Held Irmgard Irminger-Finger Tony Walker Paul Gabriel Sharbanee Sun Hung Kai Investment Services Ltd 108,252,420 88,501,626 34,217,074 10,225,620 19.61 16.03 6.20 5.93 -44- BARD1 LIFE SCIENCES LIMITED INDEPENDENT AUDITOR’S REPORT Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of BARD1 Life Sciences Limited Report on the financial report We have audited the accompanying financial report of BARD1 Life Sciences Limited, which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the six- month period then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the period's end or from time to time during the financial period. Directors' responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2(c), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies use and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. -44- BARD1 LIFE SCIENCES LIMITED INDEPENDENT AUDITOR’S REPORT Opinion In our opinion: a. the financial report of BARD1 Life Sciences Limited is in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the consolidated entity's financial position as at 30 June 2016 and of its performance for the six month period ended on that date; ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(c). Report on the remuneration report We have audited the Remuneration Report included in the directors' report for the six month period ended 30 June 2016. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of BARD1 Life Sciences Limited for the six month period ended 30 June 2016 complies with section 300A of the Corporations Act 2001. Ernst & Young V L Hoang Partner Perth 30 September 2016 -44- 

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