31 DALGLEISH STREET,
THEBARTON, SA
AUSTRALIA, 5031
WWW.BIONOMICS.COM.AU
ABN 53 075 582 740
2014
BIONOMICS
ANNUAL
REPORT
CONTENTS
PG 1
VISION
PG 17 MANAGEMENT
PG 2
HIGHLIGHTS
PG 18 CORPORATE GOVERNANCE STATEMENT
PG 3
CHAIRMAN’S LETTER
PG 23 DIRECTORS’ REPORT
PG 4
CEO & MANAGING DIRECTOR’S REPORT
PG 36 ANNUAL FINANCIAL STATEMENTS
PG 10 PIPELINE
PG 82
INDEPENDENT AUDIT REPORT
PG 14
INTELLECTUAL PROPERTY PORTFOLIO
PG 84 SHAREHOLDER INFORMATION
PG 15 BOARD OF DIRECTORS
PG 86 COMPANY PARTICULARS
BIONOMICS IS DISCOVERING
AND DEVELOPING
INNOVATIVE THERAPEUTICS
FOR SERIOUS MEDICAL CONDITIONS,
WORKING WITH PARTNERS TO
ACHIEVE SIGNIFICANT OUTCOMES
FOR PATIENTS, SHAREHOLDERS
AND EMPLOYEES
Bionomics is a leader in the discovery and development of innovative biopharmaceuticals with
operations in Australia, Europe and US.
The Company undertakes discovery, development and strategic partnering of first in class and best
in class drugs to treat patients with serious medical conditions including cancer and central nervous
system disorders.
Bionomics utilizes key global, strategic partnerships for the commercialisation of its drugs.
HIGHLIGHTS
FINANCIAL
ª Strong financial position underscored by
first profit of $3.2 million
ª 30 June 2014 cash position of $10.5
million boosted post year end by upfront
payments of US$20 million from Merck
and $7.5 million payment under the federal
government’s R&D Tax Incentive
CORPORATE
ª Option and license agreement with Merck &
Co to discover and develop small molecule
candidates for the treatment of chronic pain.
Bionomics may receive up to US$172 million
in option fees and milestone payments plus
additional royalties on product sales
ª Research collaboration and license
agreement with Merck & Co on BNC375
program targeting cognitive impairment
associated with Alzheimer’s disease and
other CNS conditions, Bionomics has received
US$20 million in upfront payments and may
under the agreement receive up to US$506
million in upfront, research and milestone
payments plus additional royalties on product
sales
ª Innovative Asian Biotech of the Year award
presented to Bionomics at the BioPharm Asia
Convention
ª Merck-Bionomics Annual Symposium on Pain
attended by both international and Australian
researchers and covered new targets for drug
discovery and patient advocacy
RESEARCH & DEVELOPMENT
ª BNC375 program data presented at major European and US conferences, including the invitation
only COGNITO meeting
ª BNC101:
ª Initiation and completion of IND-enabling studies
ª Data on the efficacy of BNC101 in animal models of colorectal, pancreatic and breast cancers
presented at a number of important US conferences including AACR
ª BNC105:
ª High response rate achieved in Phase I ovarian cancer trial with 10 of 15 patients enrolled showing
a positive response by RECIST criteria and/or CA125 biomarker levels
ª Phase II renal cancer trial delivered positive trends for patients with tumours which had spread
to the liver (6.6 months Progression Free Survival (PFS) in BNC105+Afinitor treated group vs
2.8 months PFS for Afinitor alone treated group) and for the first time identified biomarkers
significantly correlating with PFS
ª Researchers at Dartmouth College in the US have described the activation of cell death pathways
by BNC105 in cells taken from patients with Chronic Lymphocytic Leukemia, identifying a further
mechanism of action of BNC105
ª Identified drug candidate in VEGFR3 program:
ª BNC420 inhibits cancer spread in a mouse model of melanoma. Breast cancer is also a potential
application for BNC420
2
02 CHAIRMAN’S LETTER
DEAR SHAREHOLDER
2014 has been a landmark year for your Company.
A year which has seen the maturation of the
Company’s business model reflected in the pleasing
financial results. Bionomics has recorded its first
profit and its cash position, in large measure the
result of the most recent partnership with Merck
& Co., has placed it in an enviable position amongst
Australian biotech companies.
Bionomics has now forged two major partnerships
with Merck & Co on programs targeting new
treatments for pain and for cognitive impairment
in conditions such as Alzheimer’s Disease and
Parkinson’s Disease. The combined value of these
deals represents potentially US$678 million in
upfront payments, option fees and milestone
payments in addition to potential future royalty
payments for successfully developed products.
By any measure these agreements are significant
for Bionomics and represent validation of the
Company’s platform technologies and drug
discovery capabilities from one of the largest global
pharmaceutical companies.
Whilst Bionomics’ neuroscience pipeline was centre
stage for much of 2014, there were also significant
achievements in our oncology pipeline, including
BNC105, BNC101 and the addition of a new drug
candidate BNC420 targeting cancer spread with
potential application in melanoma and breast
cancer.
What makes Bionomics’ pipeline uniquely valuable
and what positions the Company well at a time
where global pharmaceutical companies are facing
significant patent expiries and resultant generic
competition are our people and our world-class
platform technologies. Partnerships are a way for
global pharmaceutical companies to access external
3
PARTNERSHIPS ARE
A WAY FOR GLOBAL
PHARMACEUTICAL
COMPANIES TO ACCESS
EXTERNAL INNOVATION
TO REFRESH THEIR
PIPELINES
innovation to refresh their pipelines and Bionomics
has a continuing supply of drug candidates to fill
this need. We also have the people to continue the
progress seen in 2014. We are fortunate to have one
of the most experienced and dedicated teams in the
sector and Bionomics’ innovation was recognised
in 2014 when the Company was named Innovative
Asian Biotech of the Year at the BioPharm Asia
conference in Singapore.
I am excited by Bionomics’ future and I acknowledge
the support of all shareholders which has been so
important for the Company. Thank you.
Finally I’d like to thank my fellow Directors, our
CEO & Managing Director Deborah Rathjen and the
entire Bionomics team for their efforts during 2014.
Yours sincerely,
Graeme Kaufman
Chairman
CEO & MANAGING DIRECTOR’S REPORT
DEAR SHAREHOLDER
Bionomics’ core strengths are in the discovery of innovative biopharmaceuticals
to tackle serious medical conditions. With partners, we are developing drug
candidates that target conditions without effective treatments including solid
cancers, chronic pain and cognitive impairment.
BIONOMICS AND MERCK&CO SIGNED THE SECOND
BIGGEST BIOTECH LICENSE DEAL IN THE HISTORY OF
AUSTRALIAN LISTED BIOTECH COMPANIES.
In the financial year to June 2014 Bionomics Limited
enjoyed extraordinary success. The year began
in July 2013 with the signing of a US$172 million
option and license agreement with US-based Merck
& Co (known as MSD outside the US) focussed on
the discovery of new treatments for chronic and
neuropathic pain and ended in June 2014 with
the signing of a second license agreement with
Merck & Co for Bionomics’ BNC375 program, with
US$20 million in upfront payments and a total of
US$506 million in upfront, research and milestone
payments with additional potential for royalties
on product sales.
Kristen Smith, Scientist II, San Diego, USA with
Farbod Shojaei, Translational Oncology Scientist,
San Diego, USA.
The latter was the second biggest biotech license
deal in the history of Australian listed biotech
companies. Merck is an ideal partner with its depth
of expertise and resources to bring to this important
program.
Bionomics is in a strong cash position to continue to
build its portfolio of promising drug candidates and
to establish additional agreements that will drive
recurrent revenue into the future.
Bionomics was also recognised by peers when
named Innovative Asian Biotech of the Year at the
2014 BioPharma Asia Industry Awards.
In this report I summarise our financial
performance, detail some of the important results
and developments for Bionomics in the 2014 year
and provide an outlook for 2015.
FINANCIALS
Bionomics declared an operating profit after tax for
the Group for the year to 30 June 2014 of $3,206,616,
compared with the prior year loss of $10,001,350.
Consolidated revenue was $27,545,996 whilst grant
funding and government assistance was $7,624,490
(R&D Tax Incentive). This compared with revenues
of $3,724,169 and grant funding of $8,101,878 for the
year to 30 June 2013.
The cash position at 30 June 2014 was $10,501,307
(2013: $22,452,089). Post 30 June US$20 million
in upfront payments have been received and
the payment of the R&D Tax Incentive, further
strengthening Bionomics’ balance sheet.
4
CEO & MANAGING DIRECTOR’S REPORT
OUR BUSINESS MODEL
At Bionomics our business model is simple. We use our proprietary drug discovery platforms to identify
and develop ‘first in class’ and ‘best in class’ drug candidates that target unmet needs in multi-billion
dollar markets:
We focus in areas aligned with
our key strengths in central
nervous system diseases and
oncology.
We identify partners who
can help us develop and
commercialise these drug
candidates for global markets.
We seek potential partners
both before and following
clinical trials to share risks
while retaining potential
commercial benefits,
maximizing the benefits for
Bionomics’ shareholders.
MANAGING THE EXECUTION RISK: THE BIONOMICS BUSINESS MODEL
DRUG
DISCOVERY
DRUG
DEVELOPMENT
PARTNERING
PLATFORM
TECHNOLOGIES
» ionX®
» Multicore®
» CSC Rx
Discovery
Platform™
» Angene®
» Engine room
delivering flow of
new drug candidates
» Build pipeline
with multiple shots
on goal to manage
risk
» Adding value
through targeted
clinical trials
» Lay off risk with
experienced
partners
» Generate revenue
streams to
support discovery
programs
TWO MAJOR PARTNERSHIPS WITH MERCK CEMENTED
In July 2013 Bionomics announced an option and
licence agreement with US-based Merck & Co
to discover and develop novel small molecule
candidates to treat chronic and neuropathic pain.
This agreement gave Merck the option to exclusively
license Bionomics compounds for development and
commercialisation. Under the agreement Bionomics,
may receive option exercise fees and development
and regulatory milestone payments of up to US$172
million as well as royalties on ultimate product
sales. The global pain market was estimated to
be US$22 billion in 2010 (Business Insights, “The Pain
Management Market Outlook to 2016”, 2011).
Emphasizing the commitment of both companies to
delivering new therapies for the treatment of pain,
in November 2013 Merck and Bionomics co-hosted a
special symposium on pain at the BioSA conference
centre in Adelaide. The symposium included eminent
5
MERCK&CO AND
BIONOMICS COMMITTED
TO DELIVERING NEW
THERAPIES FOR THE
TREATMENT OF PAIN
Australian and global pain researchers and focused
on the clinical aspects of pain as well as novel
targets for pain therapeutics. With the success of
this symposium, Bionomics and Merck are preparing
to co-host a second pain symposium in Adelaide on
10 November 2014. This year’s symposium will focus
on migraine and pain.
Dr Jorgen Mould, Dir. Ion Channel Biology and
Head ionX® Platform Development, Adelaide, Australia
On 24 June 2014 Bionomics announced an exclusive
research collaboration and licence agreement
with Merck for its BNC375 research program
targeting cognitive impairment in conditions such
as Alzheimer’s disease, Parkinson’s disease,
schizophrenia and ADHD. The global market for
effective treatments for such diseases in ageing
populations continues to grow with over US$10
billion in Alzheimer’s drug sales alone in 2012.
The agreement will see Merck fund all research
and development, including clinical development
and worldwide commercialisation of any resulting
products from the collaboration. As indicated above,
Bionomics may receive up to US$506 million in
upfront, research and milestone payments including
upfront payments of US$20 million received post
30 June 2014, in addition to royalties on any product
sales.
Stéphanie Wagner, Group Leader
Cellular Neurobiology, Strasbourg, France
6
CEO & MANAGING DIRECTOR’S REPORT
Dr Belinda
Huff,
Research
Scientist,
Adelaide,
Australia
MORE THAN 332,000
AUSTRALIANS SUFFER
FROM ALZHEIMER’S
DISEASE.
Alzheimer’s is the most common type of dementia
and thought to be caused by damage to nerve cells
in the brain. Symptoms are characterised by a
decline in memory or other thinking skills; it affects
a person’s everyday activities and is fatal. 1 in 9
Americans older than 65 years has Alzheimer’s
disease (5 million people). It is the 6th leading cause
of death in the United States. By 2025 the number
of Americans aged 65 and older with Alzheimer’s is
forecast to rise 40% to 7.1 million (2014 Alzheimer’s
disease, Alzheimer’s Association). More than
332,000 Australians suffer from Alzheimer’s
disease.
POTENTIAL COMPETITIVE ADVANTAGES BNC375*
CHARACTERISTICS
BIONOMICS’
BNC375
COMPETING
AGENTS +
Potent
Rapid onset of action
Potentiates endogenous
receptor ligand
Preserve the normal
signalling patterns of
the receptor
Do not cause receptor
desensitization
P
P
P
P
P
No potential for
development of tolerance P
P
O
O
O
O
O
* Based on data from preclinical animal studies
+ Published information & Bionomics’ in-house data
7
TACKLING SOLID TUMOURS AND OTHER CANCERS
Bionomics continues to develop its cancer drug
pipeline including compounds targeting cancer stem
cells and solid tumours.
In February 2014 Bionomics announced results
of its Phase I clinical trial of its BNC105 drug
candidate in women with ovarian cancer, with
10 of 15 patients achieving a positive response
according to the RECIST 1.1 and/or GCIG CA125
criteria. The outcomes of the trial support continued
development of BNC105 in the ovarian cancer
setting.
Patients in the trial were treated with BNC105 in
combination with the current standard therapy
of carboplatin and gemcitabine. In line with the
primary endpoint of the trial, 12mg/m2 was
identified as the recommended BNC105 dose to
take into Phase II in this combination.
Biomarker analyses of blood samples from patients
taken within four hours of administration of BNC105
demonstrated that the 12mg/m2 dose induced a
pharmacodynamic response indicative of BNC105
activity. The same biomarkers have been observed
in association with BNC105 activity in previous
clinical trials and also in the clinical trial of BNC105
in patients with renal cancer (see below).
Ovarian cancer is the fifth leading cause of cancer
related deaths in women. The market for ovarian
cancer treatments is over US$2 billion per annum
and there is a pressing need for more effective
treatments. BNC105 targets both tumour blood
vessels (shutting them down) and cancer cells
(with its cytotoxic action) and enhances the
effectiveness of other cancer treatments, rapidly
inhibiting tumour growth.
In March 2014 Bionomics announced BNC105 had
benefited patients with advanced, metastatic renal
cancer with the DISRUPTOR-1 trial achieving some
key objectives.
The Phase II trial recruited 139 patients who had
failed standard therapies. Patients, who had
relapsed after prior treatment with anti-cancer
drugs known as tyrosine kinase inhibitors (for
example Sutent, Pfizer) were enrolled into the trial
and received treatment with either a combination of
BNC105 and Afinitor (Novartis) or Afinitor alone.
The DISRUPTOR-1 trial was ground breaking in
demonstrating potential biomarkers that will enable
selection of patients most likely to substantially
benefit from BNC105 and also Afinitor treatment.
The association of significant biomarker changes
with an important parameter of disease control such
as PFS is to the best of our knowledge demonstrated
for the first time in the renal cancer setting with this
clinical trial and can be described as trendsetting.
These biomarkers can be used to more precisely
target participants for further Phase II and III trials.
Biomarkers are also key to our partnering efforts
as biomarker strategies have become an important
consideration in the design of clinical trials of new
cancer drugs in recent years – for pharmaceutical
companies, regulators and payers.
WHAT IS A BIOMARKER?
A biomarker is typically a protein in blood that is objectively
measured and may indicate abnormal biological processes,
pathogenic processes or pharmacological responses to a
therapeutic. They are the measures that assist clinical
assessment such as blood pressure or cholesterol, and are
used to predict health states in individuals or across
populations to help determine optimum treatment.
Biomarkers can be used to predict patient responses
to cancer treatment. An example of this is Roche’s
blockbuster anti-cancer drug product Herceptin®, which
is only recommended for patients with the HER2 biomarker
– while this is a subgroup of only 20% to 25% of breast
cancer sufferers.
Biomarkers can also be used to monitor response to
cancer treatment. For example the CA125 biomarker is
used to track treatment response in patients with
ovarian cancer.
8
CEO & MANAGING DIRECTOR’S REPORT
In addition to the biomarker correlation to PFS, sub-group analyses saw a trend for patients with liver
metastases gain an increased benefit from treatment with BNC105, with median PFS of 6.6 months versus
2.8 months for those patients treated with Afinitor only.
PROGRESSION FREE SURVIVAL IN PATIENTS WITH LIVER METASTASIS
Patients treated with BNC105 + Afinitor experience 3.8 month increase in Progression Free Survival
compared to patients treated with Afinitor alone
Y
T
I
I
L
B
A
B
O
R
P
L
A
V
I
V
R
U
S
1.0
0.8
0.6
0.4
0.2
0.0
Progression Free Survival, (95% C.I)
ARM A: 6.6months, (2.2mo, 12:8mo)
ARM B: 2.8months, (2.0mo, 4:4mo)
ARM A: BNC105 + Afinitor; N=13
ARM B: Afinitor only; N=13
0.0
2.5
5.0
7.5
10.0
12.5
KEY
ARM A
ARM B
MONTHS
We believe BNC105 has the potential to change the
way renal cancer is treated. Bionomics is exploring
partnership opportunities to develop BNC105 based
on the compelling data from both the ovarian and
renal cancer trials.
Whilst BNC105 targets a range of solid tumours
and has potential to become a mainstream cancer
therapy for a broad range of solid tumour types in
combination with other drugs, recent studies at Dr
Alan Eastman’s Dartmouth College pharmacology
laboratory in New Hampshire USA have indicated a
new mechanism in the action of BNC105 indicating
that it induces acute cancer cell death in blood
cancers and thus BNC105 may be considered as a
candidate for the treatment of chronic lymphocytic
leukaemia. This has been an exciting, new
development which will further enhance partnership
prospects.
Dr Tom Avery, Senior Research Scientist,
Adelaide, Australia
9
Platform technologies deliver multi-product pipeline, leveraging core strengths
DISCOVERY
PRECLINICAL
PHASE I
PHASE II
LICENSEE / PARTNER
DRUG CANDIDATE /
PROGRAM
CANCER
BNC105
SOLID TUMOURS,
RENAL, OVARIAN,
MESOTHELIOMA
BNC101
CANCER STEM CELLS,
SOLID TUMOURS,
BNC102
CANCER STEM CELLS,
SOLID TUMOURS
BNC420
SOLID TUMOURS,
MELANOMA, BREAST
VARIOUS TARGETS
CENTRAL
NERVOUS
SYSTEM
BNC210
ANXIETY/DEPRESSION
BNC375
COGNITIVE IMPAIRMENT,
ALZHEIMER’S DISEASE,
PARKINSON’S, ADHD,
SCHIZOPHRENIA
GABA-A
EPILEPSY
UNDISCLOSED
PAIN
IMMUNE
DISEASE
BNC164
PSORIASIS,
MULTIPLE SCLEROSIS,
RHEUMATOID ARTHRITIS
TARGETED LICENSING POINT
10
CEO & MANAGING DIRECTOR’S REPORT
TACKLING CANCER STEM CELLS IS KEY TO PREVENTING RECURRENCE OF CANCER
Bionomics is continuing to progress other cancer
drug candidates through its pipeline with a
focus on solid tumours. At the April 2014 Annual
American Association for Cancer Research meeting,
Bionomics presented research on targeting
colorectal and pancreatic cancer stems cells with
BNC101, a humanised monoclonal antibody which
binds to the validated stem cell marker LGR5.
BNC101 is active in models of pancreatic and triple-
negative breast cancer, in addition to colorectal
cancer models. Cancer stem cells are resistant to
conventional therapies such as chemotherapy and
radiation which means that a new and more targeted
approach is needed to deplete solid tumours of
these cells. Tackling cancer stem cells is key to
preventing recurrence of cancer and this approach
should complement other therapies.
During FY14 BNC101 completed toxicological
studies to support its progression into the clinic. It is
anticipated the first clinical trial will enrol patients
with colorectal and pancreatic cancers and will
commence in 2015.
A FURTHER $34 MILLION
IN FEDERAL GOVERNMENT
FUNDING OVER SIX YEARS
FOR BIONOMICS’ PARTNER
In other pipeline development, in February,
Bionomics learnt that its partner the Cancer
Therapeutics Cooperative Research Centre (CTx),
was to receive a further $34 million in funding
over six years in an extension to the Cooperative
Research Centres (CRCs) initiative from the
Australian Government.
11
Dr John Norton, Scientist I, San Diego, USA
Gisele Marguier, Research Associate, San Diego, USA
BIONOMICS IS ABOUT TO COMMENCE WORK ON TWO
NEW CANCER STEM CELL TARGETING PROGRAMS AS
PART OF THE EXTENSION OF THE CRC.
Bionomics is developing compounds targeting
metastatic melanoma in conjunction with CTx and is
about to commence work on two new cancer stem
cell targeting programs as part of the extension of
the CRC.
Melanoma is the third most common form of cancer
in Australian men and women, accounting for 10%
of all cancer sufferers. Australia has the highest
incidence of melanoma in the world with over 1,500
deaths each year. Approximately 12,500 cases of
melanoma are diagnosed every year in Australia and
this continues to rise with around 400 extra cases
each year.
Bionomics’ latest drug candidate in its oncology
pipeline, BNC420, inhibits tumour metastasis by
inhibiting the growth of new lymph vessels which
in turn serve as conduits for cancer to spread to
lymph nodes. Data on a fore-runner of BNC420,
BL-011256, was presented at both the Lorne Cancer
Conference and AACR, demonstrating that the
compound inhibited the spread of melanoma to the
lymph nodes in mice.
In order to devote sufficient resources to both
BNC101 and BNC420, Bionomics has ceased work
on the RET program which is of less commercial
interest. In collaboration with CTx, new discovery-
stage cancer stem cell programs have entered the
pipeline.
12
CEO & MANAGING DIRECTOR’S REPORT
Courtney
Hollis,
Research
Scientist
and Stephen
Birrell,
Project
Manager,
Adelaide,
Australia
OUTLOOK
Bionomics looks forward to presenting further research results in 2014/2015 for peer review and potential
partnerships. We believe the value of our intellectual property portfolio will continue to crystallise.
We will work hard to support our existing
partnerships. In particular the Company will focus
on its important relationship with Merck in pain
and cognition to bring new treatments to patients
suffering chronic pain and sufferers of Alzheimer’s
Disease, Parkinson’s disease and ADHD which are
amongst the disorders where cognitive impairment
is a significant problem.
Bionomics will continue to execute its partnership
strategy across its portfolio of oncology and
neuroscience programs, whilst progressing clinical
and preclinical development of its drug candidates
including BNC101 and BNC420.
We have often used the term “multiple shots at goal”
and Bionomics’ track record of multiple partnership
deals is unprecedented in the Australian biotech
sector. It is encouraging to see the increasing
international recognition of our company which has
resulted from the execution of this strategy.
With a solid cash position and strengthened balance
sheet, through our most recent partnership deal
with Merck, Bionomics is well placed to build on the
achievements of 2014.
BIONOMICS’ TRACK
RECORD OF MULTIPLE
PARTNERSHIP DEALS
IS UNPRECEDENTED
IN THE AUSTRALIAN
BIOTECH SECTOR.
I extend my thanks to the Bionomics’ Board, staff
and also to our shareholders for your contributions
to our success and I look forward to reporting more
positive outcomes from our maturing pipeline of
drug candidates and the continued execution of our
partnership strategy.
Yours sincerely,
Deborah Rathjen
CEO & Managing Director
13
INTELLECTUAL PROPERTY PORTFOLIO
BIONOMICS
CONTINUES TO BUILD
A STRONG PATENT
PORTFOLIO COVERING
THE KEY ELEMENTS
OF ITS BUSINESS.
Through the worldwide Patent Cooperation
Treaty (PCT) mechanism, Bionomics and its
related companies were granted 17 patents
this financial year, 28 PCT patent applications
entered the national and regional phases of
examination, 6 PCT patent applications and
6 provisional patent applications were filed.
OVERVIEW OF PATENT PORTFOLIO
13
PATENT
APPLICATIONS
Covering BNC105, related molecules
and biomarkers
7
PATENT
APPLICATIONS
Covering BNC210 and its use in
the treatment of anxiety and other
disorders
Covering molecules which inhibit
the activity of the Kv1.3 ion channel
and the use of these molecules in
the treatment of Multiple Sclerosis
and other autoimmune disorders
Covering Parkinson’s Disease
and related disorders
Covering memory enhancement
and related disorders
Covering cancer stem cells
Targeting melanoma
and breast cancer
Covering discoveries made utilizing
Bionomics’ technology platforms
8
PATENT
APPLICATIONS
2
PATENT
APPLICATIONS
5
PATENT
APPLICATIONS
6
PATENT
APPLICATIONS
2
PATENT
APPLICATIONS
15
PENDING
PATENT
APPLICATIONS
14
DR JONATHAN
LIM
DR DEBORAH
RATHJEN
MR GRAEME
KAUFMAN
MR GRAEME KAUFMAN BSC, MBA
CHAIRMAN, NON-EXECUTIVE DIRECTOR
Mr Kaufman has wide ranging experience across the biotechnology sector, spanning scientific, commercial
and financial areas. His experience with CSL Limited, Australia’s largest biopharmaceutical company
included responsibility for all of their manufacturing facilities, and the operation of an independent business
division operating in the high technology medical device market. As CSL’s General Manager Finance, Mr
Kaufman had global responsibility for finance, strategy development, human resources and information
technology. Mr Kaufman has also served as an executive director of ASX-listed Circadian Technologies and a
non-executive director of Amrad Corporation. He was previously Executive Vice President Corporate Finance
with Mesoblast Limited and is currently a non-executive director of IDT Australia Limited and Cellmid
Limited.
DR DEBORAH RATHJEN BSC (HONS), PhD, MAICD, FTSE
(CEO AND MANAGING DIRECTOR)
A seasoned biotech executive of over 20 years, Dr Deborah Rathjen joined Bionomics in June 2000 from
Peptech Limited, where she was Manager of Business Development and Licensing. Dr Rathjen was a
co-inventor of Peptech’s TNF technology and leader of the company’s successful defence of its key TNF
patents against a legal challenge by BASF, providing Peptech with a strong commercial basis for licensing
negotiations with BASF, Centocor and other companies with anti-TNF products. Dr Rathjen has significant
experience in company building and financing, mergers and acquisitions, therapeutic product research and
development, and business development and licensing. Dr Rathjen is Chairperson of the AusBiotech Board
and in 2004 was awarded the AusBiotech President’s Medal for her significant contribution to the Australian
biotechnology industry. In 2006 she received a Distinguished Alumni Award from Flinders University, in
2009 the BioSingapore Asia Pacific Woman Entrepreneur of the Year, 2010 Bio Innovation SA Industry Leader
Award, BioSpectum Asia person of the year 2013, and in 2014 the Life Science Woman of the Year.
15
BOARD OF DIRECTORS
MR TREVOR
TAPPENDEN
DR ERROL
DE SOUZA
MR TREVOR TAPPENDEN CA, FAICD
NON-EXECUTIVE DIRECTOR
Mr Tappenden commenced a career as a Non-Executive Director in 2003 after a career with Ernst & Young
spanning 30 years. During his time at Ernst & Young Mr Tappenden held a variety of positions including
Managing Partner of the Melbourne Office, member of the Board of Partners, Head of the Victorian
Government Services Group and National Director of the Entrepreneurial Services Division. He holds
directorships in various private, government and not-for-profit organisations and is the Chairman of the
Audit and Risk Management Committees of many of those organisations.
DR ERROL DE SOUZA PhD
NON-EXECUTIVE DIRECTOR
Dr De Souza is a leader in the development of therapeutics for treatment of central nervous system (CNS)
disorders. He is currently President and CEO of a leading US company Biodel Inc (Nasdaq: BIOD) and is the
former President and CEO of US biotech companies Archemix Corporation and Synaptic Pharmaceutical
Corporation. Dr De Souza formerly held senior management positions at Aventis and its predecessor
Hoechst Marion Roussel Pharmaceuticals, Inc. Most recently, he was Senior Vice President and Site Head
of US Drug Innovation and Approval (R&D), at Aventis, where he was responsible for the discovery and
development of drug candidates through Phase IIa clinical trials for CNS and inflammatory disorders. Prior
to Aventis, he was a co-founder and Chief Scientific Officer of Neurocrine Biosciences (Nasdaq: NBIX). Dr
De Souza has served on multiple editorial boards, National Institutes of Health (NIH) Committees and is
currently a Director of several public and private companies.
DR JONATHAN LIM MD
NON-EXECUTIVE DIRECTOR
Jonathan Lim, MD is Chairman, CEO and Co-Founder of Ignyta, Inc., an oncology precision medicine
biotechnology company that he helped take public in October 2013. Dr Lim is also Managing Partner of City
Hill Ventures, LLC, which he established in 2010, and was formerly President, CEO, and Board Director of
Halozyme Therapeutics, Inc. Under Dr Lim’s eight years of leadership, the company went public and raised
$300 million from financing and corporate partnerships with Roche and Baxter, achieved two US FDA
approvals, and built a late stage pipeline of two Phase III, two Phase II, and two Phase I product candidates.
Dr Lim’s prior experience includes management consulting at McKinsey, NIH Postdoctoral Fellowship at
Harvard, and general surgery residency at New York Hospital-Cornell. He has BS and MS degrees from
Stanford, MD from McGill and MPH from Harvard.
16
MANAGEMENT
MS MELANIE YOUNG BCOM, CA
CHIEF FINANCIAL OFFICER
AND COMPANY SECRETARY
Ms Young has over 15 year’s experience, with
six years in the medical device field, including
two years as CFO of an ASX-listed company
covering all facets of the company’s global
finance function. In particular, her considerable
commercial experience in listed company reporting
requirements, international finances and working
capital management complements the Bionomics
team. Ms Young has also gained experience in
negotiating distributor agreements, due diligence,
cost reduction strategies and improving operating
efficiencies. Previously Ms Young worked for
Deloitte Touche Tohmatsu in the Growth Solutions
Division. Ms Young holds a Bachelor of Commerce
from Deakin University and is a Chartered
Accountant.
DR JOSÉ IGLESIAS MD
CHIEF MEDICAL OFFICER
Dr Iglesias, responsible for clinical development
at Bionomics since November 2012, is a seasoned
medical professional with 24 years global
experience in the biopharmaceutical industry.
Prior to joining Bionomics, he spent six years
at Celgene Corporation and its wholly owned
subsidiary Abraxis Bioscience as VP of Clinical
Development at Celgene with previous roles
including CMO and VP of Global Clinical
Development and Medical Affairs at Abraxis.
Previously, Dr Iglesias worked in several positions
at US pharmaceutical giant Eli Lilly over 10 years,
including his appointment as Oncology Medical
Advisor for the Australia and the Asia Pacific
region between 2002 and 2004. A graduate from
the Montevideo School of Medicine, Dr Iglesias has
been published more than 60 times and is an active
member of ASCO, AACR and ESMO.
17
CORPORATE GOVERNANCE STATEMENT
Bionomics Limited (the Company) and the Board are
committed to achieving and applying a high standard
of corporate governance taking into consideration the
Company’s size and the industry in which the Company
operates.
The Company’s Governance framework is consistent
with the Australian Securities Exchange (ASX)
Corporate Governance Council (ASX CGC) guidelines.
The relationship and division of responsibilities
between the Board and other key management
personnel is critical to the Company’s long-term
success. The directors are responsible to the
shareholders for the performance of the Company in
both the short and the longer term and for seeking an
appropriate balance between sometimes competing
objectives in determining the best interests of the
Company. Their focus is to enhance the interests of
shareholders and to ensure the Company is properly
governed.
Day to day management of the Company’s affairs,
including the implementation of its approved strategy
and policy initiatives, is delegated by the Board to the
Chief Executive Officer and Managing Director and
other key management personnel, except for matters
expressly required by law to be approved by the
Board. This delegation process has been formalised
by the documentation of responsibilities between the
Chairman and the Chief Executive Officer and Managing
Director and incorporated into the Board’s charter.
The following corporate governance framework has
been implemented to ensure the highest level of
corporate governance is achieved:
ª establishment of an internal control framework
focusing on key business risks;
ª adoption of a code of professional ethics and
conduct which applies to all directors, officers and
employees;
ª implementation of strict policies regarding related
party transactions and the acquisition and disposal
of the Company’s securities by directors, officers and
employees; and
ª adoption of clear reporting and communication
policies and procedures.
A description of the Company’s main corporate
governance practices is set out over. All these
practices, unless otherwise stated, were in place for
the entire year.
THE BOARD OF DIRECTORS
The Board of Directors (the Board) operates in accordance
with the broad principles formally set out in its charter
(Board Charter) that is available from the corporate
governance section of the Company website at www.
bionomics.com.au The Board Charter details the Board’s
composition and responsibilities.
The Board Charter (inter alia) states:
ª the Bionomics’ Board will at all times recognise
its overriding responsibility to act honestly, fairly,
diligently and in accordance with the law in fulfilling
its primary responsibility of looking after the interests
of Bionomics’ shareholders. These interests are well
served by also taking into consideration the interests
of other stakeholders such as employees and affiliated
institutions.
ª the Board is to be comprised of both executive and
non-executive directors with a majority of non-executive
directors.
ª in recognition of the importance of independent views
and the Board’s role in supervising the activities of
management, the majority of the Board must be
independent of management and all directors are
required to bring independent judgement to bear in their
Board decision making.
ª the Board shall undertake an annual Board
performance evaluation to identify any improvements
necessary for both its operations and the Board Charter.
Responsibilities of the Board
The responsibilities of the Board include:
ª approving the strategic direction, objectives and annual
financial budget of Bionomics and monitoring the
implementation of those strategies and achievement of
those objectives and budget.
ª monitoring compliance with regulatory requirements
and ethical standards.
ª appointing and reviewing the performance of the Chief
Executive Officer and Managing Director and of the
performance of the Chief Executive Officer’s direct
reports in achieving corporate goals.
ª approving announcements to shareholders and
the ASX.
ª approving significant third party agreements.
ª issuing shares, options, equity instruments or other
securities.
ª developing Bionomics’ corporate governance
procedures, systems of risk management and internal
compliance and control, codes of conduct (including
human resources policies) and legal compliance.
18
CORPORATE GOVERNANCE STATEMENT CONT.
ª approving and monitoring the progress of major
capital expenditure, capital management and
acquisitions and divestitures.
The Chief Executive Officer and Managing Director is
responsible for implementing the Company strategies and
policies.
ª assessing the composition of the Board and
reviewing its processes and performance.
Board Members
Details of the members of the Board, their experience,
expertise, qualifications, term of office and
independence status are set out in the Directors’ Report
under the heading ‘Information on Directors’. At the
date of signing the Directors’ Report there were four
non-executive directors (including the Chairman), all of
whom are deemed independent under the principles set
out below and one executive director.
The Board seeks to ensure that it is cognisant of the
state of development of Bionomics as a company:
ª at any point in time, its membership as a group has
expertise in areas of current and future importance
to the Company as it grows.
ª the size of the Board is conducive to effective
discussion and efficient decision-making.
Directors’ Independence
The Board has adopted specific principles in relation
to directors’ independence. These state that to be
deemed independent, a director must be independent
of management and free of any business or other
relationship that could materially interfere with – or could
reasonably be perceived to materially interfere with – the
exercise of their unfettered and independent judgement.
Issues relating to an assessment of the independence
of a director will be determined by reference to the
guidance provided by the ASX CGC guidelines. The Board
shall determine the thresholds of materiality from the
perspective of both the Company and its directors in
determining whether a director maintains his or her
independence of mind.
Term of Office
The Company’s Constitution specifies that all non-
executive directors must retire from office no later than
the third AGM following their last election, however they
may offer themselves for re-election.
Role of the Chairman and Chief Executive Officer
and Managing Director
The Chairman is responsible for leading the Board,
ensuring directors are properly briefed in all matters
relevant to their role and responsibilities, facilitating
Board discussions and managing the Board’s relationship
with the Company’s key management personnel.
19
Commitment
Regular Board meetings and reviews of strategy are held
throughout the year to monitor performance against both
the Board approved objectives and the Board’s broad
strategic plan.
The number of meetings of the Company’s Board and
of each Board committee held during the year ended 30
June 2014 and the number of meetings attended by each
director is disclosed in the Directors’ Report under the
heading ‘Meetings of Directors’.
It is the Company’s practice to allow its executive director
to accept appointments outside the Company with prior
written approval of the Board.
Conflict of Interests
All Board members are required as a continuing obligation
to immediately notify the Board in writing of any actual or
potential conflicts of interest or any circumstance that may
affect a Board member’s level of independence.
Independent Professional Advice
Directors may seek independent professional advice, at
the expense of the Company, on any matter connected
with the discharge of their responsibilities. Prior written
approval of the Chairman is required, but this will not be
unreasonably withheld. Copies of this advice will be made
available to, and for the benefit of, all Board members at
the discretion of the Chairman.
Performance Assessment
In line with the timetables setting out the adoption of the
ASX CGC guidelines the Board undertakes an annual
self-assessment comparing its performance with the
requirements of the Board Charter. In this process, the
Chairman meets directors individually to assess how
Board performance may be improved.
Diversity
Bionomics has implemented a diversity policy. While the
key focus of the Diversity Policy and the ASX Corporate
Governance Council’s recommendations is on promoting
the role of women within organisations, the Company
recognises that other forms of diversity are also important
and seeks to promote and facilitate a range of diversity
initiatives throughout the Company beyond gender
diversity including setting measurable objectives as
necessary.
The Board will ensure that appropriate procedures and
measures are introduced and delegated to the Audit
and Risk Management Committee to ensure that the
Company’s diversity commitments are implemented
appropriately.
With an extremely limited pool of appropriate
candidates for many roles throughout the organisation,
the Company considers that it would be detrimental to
shareholder interest to recruit on any basis other than
merit, as such no measurable objectives have been
established at this time.
Recommendation 3.4 of the Principles of ASX listing
rules (Guidance Note 9) requires ASX listed entities to
disclose in the Annual Report the proportion of women
in the whole organisation, in senior executive positions
and on the Board at the end of year.
TOTAL
BOARD
EXECUTIVE OTHER
SENIOR
All Staff
Female Staff
64
32
5
1
2
1
57
30
% of total
50%
20%
50%
53%
CORPORATE REPORTING
For each of the half-year and full-year results, the Chief
Executive Officer and Managing Director and Chief
Financial Officer are required to make the following
certifications to the Board:
ª that the Company’s financial statements are
complete and present a true and fair view, in all
material respects, of the financial condition and
operational results of the Company and are in
accordance with relevant accounting standards; and
ª that the above statement is founded on a sound
system of risk management and internal compliance
and control which implements the policies adopted by
the Board and that the Company’s risk management
and internal compliance and control are operating
efficiently and effectively in all material respects.
BOARD COMMITTEES
The Board has established one committee to assist
in the execution of its duties and to allow detailed
consideration of complex issues. This committee is
the Audit and Risk Management Committee, which is
comprised entirely of non-executive directors.
All matters determined by the committee are submitted
to the full Board as recommendations for final Board
decision. Minutes of committee meetings are tabled at a
subsequent Board meeting.
There is no formal nomination committee for the
Company. Nominations for the Board are considered by
the full Board as part of normal business reviewed by
the Board at its regular meetings.
Under the Board Charter, in the event that the Board
believes a new director should be appointed, the
Board shall review the range of skills, experience and
expertise currently existing on the Board in relation to
areas of current and future importance to the Company
as it grows. Candidates are assessed against this review
of needs and, where appropriate, advice is sought from
independent search consultants.
Where the Board appoints a suitable candidate that
person must stand for election at the next AGM of the
Company.
Notices of meeting for the election of directors comply
with the ASX CGC guidelines.
New directors will be provided with a letter of
appointment setting out the Company’s expectations,
their responsibilities, rights and the terms and
conditions of their appointment.
Compensation Committee
Due to the size of the Board, all Compensation
Committee functions are handled by the full Board rather
than a subcommittee.
In this context, the Board decides on remuneration and
incentive policies and practices generally and makes
specific recommendations on remuneration packages
and other terms of employment for executive directors
and non-executive directors.
All key management personnel sign a formal
employment contract at the time of their appointment
covering a range of matters including their duties, rights,
responsibilities and any entitlements on termination.
A formal establishment of annual objectives and
subsequent evaluation of performance including a
half-year review is conducted by the Chief Executive
Officer and Managing Director with all key management
personnel who report directly to that position.
Further information on directors’ and other key
management personnel’s remuneration is set out
in the Directors’ Report and Note 22 to the financial
statements.
The Compensation Committee previously had
responsibility for reviewing any transactions between the
Company and the directors, or any interest associated
with the directors, to ensure the structure and the
terms of the transaction was in compliance with the
Corporations Act 2001 and was appropriately disclosed.
This is now the responsibility of the full Board.
20
CORPORATE GOVERNANCE STATEMENT CONT.
Audit and Risk Management Committee
The Audit and Risk Management Committee consists of
the following non-executive directors:
ª meets separately with external auditors at least
twice a year without the presence of management;
and
ª Mr Trevor Tappenden (Chairman)
ª Mr Graeme Kaufman
Details of the directors’ qualifications and all
attendance at Audit and Risk Management Committee
meetings are set out in the Directors’ Report.
The Audit and Risk Management Committee has its
own charter setting out its role and responsibilities,
composition, structure, membership requirements and
the manner in which the Committee is to operate. This
charter is available on the Company website.
The main responsibilities of the Committee are to:
ª review, assess and recommend the annual and half-
year financial statements to the Board; and
ª assist the Board in fulfilling its oversight
responsibilities through reviewing:
ªthe financial reporting process;
ª the system of internal control and management
of risks;
ª the audit process; and
ª the Company’s process for monitoring compliance
with laws and regulations.
Included in these responsibilities, the Audit and Risk
Management Committee:
ª reviews the external auditors’ proposed audit scope,
approach and their performance;
ª makes recommendations to the Board regarding the
re-appointment of the external auditors;
ª provides external auditors with a clear line of direct
communication at any time to either the Chairman
of the Audit and Risk Management Committee or the
Chairman of the Board.
The Audit and Risk Management Committee has
authority, within the scope of its responsibilities, to
seek any information it requires from any employee
or external party and to obtain external legal or other
professional advice.
EXTERNAL AUDITORS
The Board’s policy is to appoint external auditors
who clearly demonstrate quality and independence.
The performance of the external auditor is reviewed
annually by the Audit and Risk Management Committee
which also makes recommendations to the Board
about the appointment of audit services for subsequent
periods, taking into consideration assessment of
performance, existing value and costs.
Deloitte Touche Tohmatsu were appointed as external
auditor in 2007. Deloitte’s policy is to rotate engagement
partners every five years in line with the requirements
of the Corporations Act 2001.
An analysis of fees paid to the external auditors,
including a breakdown of fees for non-audit services,
is provided in Note 25 to the financial statements. It is
the policy of the external auditors to provide an annual
declaration of their independence to both the Audit and
Risk Management Committee and the Board.
ª considers the independence of the external auditors
including the range of non-audit related services
provided by the external auditors to the Company;
and
The external auditor is requested to attend the Annual
General Meeting (AGM) and be available to answer
shareholder questions about the conduct of the audit
and the preparation and content of the audit report.
ª ensures the Company establishes an effective Risk
Management Policy and ensures compliance.
In fulfilling its responsibilities, the Audit and Risk
Management Committee:
ª receives regular reports from management and
external auditors;
ª reviews whether management is adopting systems
and processes sufficient for a company of Bionomics’
size and stage of development;
ª reviews any significant disagreements between the
external auditors and management, irrespective of
whether they have been resolved;
RISK ASSESSMENT AND RISK MANAGEMENT
The Board, through the Audit and Risk Management
Committee, is responsible for ensuring there are
adequate policies in relation to risk management,
compliance and internal control systems. In summary,
Company policies are designed to ensure significant
strategic, operational, legal, reputational and financial
risks are identified, assessed and effectively monitored
and managed in a manner sufficient for a company of
Bionomics’ size and stage of development to enable
achievement of the Company’s business strategy and
objectives.
21
The Company’s risk management policies are managed
by the key management personnel and other senior
staff. The policies are reviewed by the Audit and Risk
Management Committee according to a timetable of
assessment and review proposed by that Committee
and approved by the Board.
ENVIRONMENTAL, WORK HEALTH AND SAFETY
MANAGEMENT POLICIES
The Company recognises the importance of work health
and safety (WHS) and is committed to the highest levels
of performance. To help meet this objective, policies
have been established to facilitate the systematic
identification of WHS issues and to ensure they are
managed in a structured manner.
This system allows the Company to:
ª monitor its compliance with all relevant legislation;
and
ª encourage employees to actively participate in the
management of WHS issues.
The Company is in full compliance with all necessary
environmental and other licensing requirements
required for its research facilities in Thebarton (South
Australia), San Diego (Bionomics Inc) and for Neurofit
SAS (Neurofit) in France.
CODE OF CONDUCT
In its Board Charter, the Board has recognised
its overriding responsibility to act honestly, fairly,
diligently and in accordance with the law in fulfilling its
primary responsibility of looking after the interests of
Bionomics’ shareholders. The Board believes that the
interests of shareholders are best served by also taking
into account the interests of other stakeholders such
as Bionomics’ employees and individuals engaged in
Bionomics’ directed research at Bionomics’ affiliated
institutions.
The Board will work to promote and maintain an
environment within Bionomics that establishes these
principles as basic guidelines for all employees.
Bionomics has formalised a code of business conduct
and ethics. A number of policies that relate to business
conduct are in place including harassment prevention
and share trading, with training provided to all
employees as new policies are implemented.
Copies of the share trading policies for directors and
employees are available on the Company’s website.
CONTINUOUS DISCLOSURE AND SHAREHOLDER
COMMUNICATION
The Company has written policies and procedures
that focus on continuous disclosure of any information
concerning the Company that a reasonable person
would expect to have a material effect on the price
of the Company’s securities. These policies and
procedures also include the arrangements the
Company has in place to promote communication with
shareholders and encourage effective participation at
AGMs. These policies and procedures are available on
the Company’s website.
The Chief Executive Officer and Managing Director
has been nominated as the person responsible for
communications with the ASX. This role includes
responsibility for ensuring compliance with the
continuous disclosure requirements in the ASX Listing
Rules and overseeing and co-ordinating information
disclosure to the ASX, analysts, brokers, shareholders,
the media and the public.
All announcements disclosed to the ASX are posted
on the Company’s website as soon as practical after
disclosure to the ASX. Procedures have also been
established for reviewing whether any price sensitive
information has been inadvertently disclosed, and if
so, this information is also immediately released to the
market.
All shareholders are entitled to receive a copy of the
Company’s Annual Report. In addition, the Company
seeks to provide opportunities for shareholders to
participate through electronic means. Initiatives
to facilitate this include making all Company
announcements, details of Company meetings,
press releases for the last three years and financial
statements available on the Company’s website along
with transcripts of the Chairman’s and Chief Executive
Officer and Managing Director’s addresses to the
Company’s AGMs.
The website also includes a feedback and information
request mechanism for investors and shareholders via
the Contact Us page of the website.
AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
FINANCIAL REPORTING STANDARDS (AIFRS)
The financial statements are prepared in accordance
with AIFRS.
22
DIRECTORS’ REPORT
Your directors present their report on the financial
statements of the Group for the year ended 30 June
2014, comprising the parent entity Bionomics Limited
(Bionomics) and its subsidiaries. In order to comply
with the Corporations Act 2001, the directors report as
follows:
strengthening the consolidated Group’s Statement of
Financial Position.
The financial performance of key operating segments
of Drug discovery, Drug development and Contract
services are included in Note 3.
Directors
The following persons were directors of Bionomics
during the period and up to the date of this report:
ª Mr Graeme Kaufman, Non-Executive Chairman
ª Dr Deborah Rathjen, Chief Executive Officer
and Managing Director
ª Mr Trevor Tappenden, Non-Executive Director
ª Dr Errol De Souza, Non-Executive Director
ª Dr Jonathan Lim, Non-Executive Director
The directors held office during the whole of the
financial year and since the end of the financial year.
Principal Activities
The principal activities of the Group during the period
were:
ª to undertake research and development utilising
Bionomics’ proprietary technology platforms with
the aim of identifying and developing therapies to
treat cancer and conditions of the Central Nervous
System (CNS), including anxiety, Multiple Sclerosis
and epilepsy;
ª to commercialise intellectual property assets; and
ª to identify strategic alliances and project
opportunities capable of increasing shareholder
value and of enhancing the competitive advantage of
Bionomics within the biotechnology industry.
Operating Results
Consolidated revenue for the year to 30 June 2014
increased by 133% to $27,545,996, predominately
attributable to the Merck & Co (known as MSD
outside the USA and Canada) research collaboration
and license agreement announced on 24 June 2014
for commercialising BNC375. Grant funding and
government assistance for the period was $7,624,490
relating to the Research and Development (R&D) Tax
Incentive introduced from 1 July 2011. This compared
with revenues of $3,724,169 and grant funding of
$8,101,787 for the year to 30 June 2013. The operating
profit after tax of the Group for the year to 30 June 2014
was $3,206,616 compared with the prior year after tax
loss of $10,001,350.
The cash position at 30 June 2014 was $10,501,307
(2013: $22,452,089). The current trade and other
receivables balance includes the US$20m receivable at
30 June 2014 (2013: nil) which has since been received,
23
Review of Operations
Bionomics is developing innovative biopharmaceuticals
to tackle serious diseases where there is a need
for new treatments, such as cancer, Alzheimer’s
disease and pain. Our technology platforms give the
company the capacity to generate small molecule and
antibody therapeutics, the major forms of new drugs
developed by Pharmaceutical companies. Bionomics
was recognised by peers when named Innovative Asian
Biotech of the Year at the 2014 BioPharma Asia Industry
Awards.
Two major partnerships book-ended the year for
Bionomics. The year commenced with the US$172
million option and license agreement with Merck
& Co (known as MSD outside the USA and Canada),
announced on 31 July 2013. This agreement is to
develop novel small molecule candidates for the
treatment of chronic pain, including neuropathic
pain. Under the terms of the agreement, Merck has
the option to exclusively license a compound from
Bionomics for development and commercialisation.
The global pain treatment market recorded sales of
US$22 billion in 2010. However, as patent expiries loom,
the global market value is anticipated by some analysts
to contract to US$18.7 billion by 2016. Within the global
pain market, the neuropathic pain market is expected to
grow from US$2.4 billion in 2010 to reach US$3.6 billion
by 2020. (The Pain Outlook to 2013, Scrip Business
Insights 2011).
In November 2013 Merck and Bionomics hosted
a special Symposium at the BioSA Conference
Centre in Adelaide. The meeting included renowned
speakers from the field of pain research and focused
on the clinical aspects of pain, novel targets for
pain therapeutics and the overall pain landscape in
Australia. Planning is already advanced for the second
of what is anticipated to become an annual event
to be hosted by Merck and Bionomics. The second
Bionomics-Merck Symposium will focus on pain and
migraines.
Towards year end, on 24 June 2014 Bionomics and
Merck announced a second partnership, an exclusive
Research Collaboration and License Agreement for
Bionomics’ BNC375 research program targeting
cognitive dysfunction associated with Alzheimer’s
disease and other central nervous system conditions.
BNC375 and related compounds have displayed potent
efficacy in animal cognitive impairment models with the
results of Bionomics’ research presented at prestigious
international forums in the past year including at the
invitation only COGNITO meeting in Denmark and at
Neuroscience 2013 in San Diego.
Under the agreement, Merck will fund all research and
development, including clinical development, and will
be responsible for worldwide commercialisation of any
products from the collaboration. Bionomics will receive
upfront payments totalling US$20 million and is eligible
to receive up to US$506 million for achievement of
certain research and clinical development milestones
in addition to undisclosed royalties on any product
sales.
Alzheimer’s is the most common type of dementia and
thought to be caused by damage to nerve cells in the
brain. Symptoms are characterised by a decline in
memory or other thinking skills; it affects a person’s
everyday activities and is fatal. 1 in 9 Americans older
than 65 years has Alzheimer’s disease (5 million
people). It is the 6th leading cause of death in the
United States. By 2025 the number of Americans aged
65 and older with Alzheimer’s is forecast to rise 40%
to 7.1 million (2014 Alzheimer’s disease, Alzheimer’s
Association). More than 332,000 Australians suffer
from Alzheimer’s disease.
In addition to the successes of its neuroscience
programs, Bionomics continues to develop its cancer
drug pipeline including compounds focused on cancer
stem cells and solid tumours.
In February 2014 Bionomics announced results from
the Phase I clinical trial of its BNC105 drug candidate
in women with ovarian cancer after completing the
enrolment of 15 patients for the Phase I portion of
the trial during 2013. Ten patients achieved a positive
response according to the RECIST 1.1 and/or GCIG
CA125 criteria. The patients were treated with BNC105
in combination with the current standard therapy of
carboplatin and gemcitabine. In line with the primary
endpoint of the trial, 12mg/m2 was identified as the
recommended BNC105 dose to take into Phase II in
this combination. These results were updated with
the addition of biomarker data in June 2014 when the
clinical trial data was presented in the US at ASCO.
The results strongly support continued development of
BNC105 in the ovarian cancer setting.
Ovarian cancer is the fifth leading cause of cancer
related deaths in women. The market for ovarian
cancer treatments is over $2 billion per annum and
there is a pressing need for more effective treatments.
In March 2014 Bionomics announced results of its
international clinical trial of BNC105 in patients with
kidney cancer which had spread beyond the kidney.
The Phase 2 trial recruited 129 patients who had failed
previous treatment with Tyrosine Kinase Inhibitors.
Patients received either Afinitor (Novartis) or BNC105
in combination with Afinitor. Although the trial failed
to achieve the primary endpoint, the DISRUPTOR-1
trial was ground breaking in demonstrating potential
biomarkers that will enable selection of patients most
likely to benefit from BNC105 and/or Afinitor in future
clinical trials. Potential partners are increasingly
looking for biomarkers to help design cancer clinical
trials and this has been a strong and focussed element
in the BNC105 development program.
Whilst BNC105 is known to target a broad range of
solid tumour types, studies conducted in the laboratory
of Dr Alan Eastman, Professor of Pharmacology and
Toxicology at The Geisel School of Medicine, Dartmouth
College, New Hampshire, USA and presented at this
year’s American Association for Cancer Research
(AACR) meeting, highlight a new element in the
mechanism of action of BNC105, being a potent
activator of proteins that lead to cancer cell death.
This suggests BNC105 is an excellent candidate for
clinical trials to induce acute cancer cell death in blood
cancers, in particular chronic lymphocytic leukemia
(CLL).
The depth of Bionomics’ cancer medicines pipeline was
highlighted at AACR in April. This meeting is attended
by representatives from major pharmaceutical
companies and academia, patient advocates and other
cancer professionals worldwide. In addition to the
poster presented by the Eastman laboratory on its
BNC105 work, Bionomics presented the latest data on
BNC101, which is in development for the treatment of
colorectal cancer, pancreatic cancer and other solid
tumour types. Bionomics’ cancer stem cell antibody
BNC101 specifically targets LGR5, a validated cancer
stem cell target, and preclinical data demonstrates
that the antibody is active in models of colorectal
cancer, pancreatic cancer and triple-negative breast
cancer. It has also shown effectiveness when combined
with standard of care chemotherapy treatments in
pancreatic cancer. Cancer stem cells are resistant
to conventional therapies and tackling cancer stem
cells is key to preventing recurrence in an approach
which should complement all other therapies. BNC101
has now completed formal toxicology studies and
Bionomics is targeting the initiation of a Phase I clinical
trial in 2015.
24
DIRECTORS’ REPORT
Work on a fore-runner to Bionomics latest cancer drug
candidate BNC420, BL-011256, was also presented at
AACR. BNC420 is a novel VEGFR3 selective inhibitor,
which suppresses tumour lymphatics and lymph node
metastasis in an animal model of melanoma. The
mechanism of action of both BL-011256 and Bionomics’
new drug candidate BNC420 operates through the
inhibition of this important receptor which controls
the formation of tumour lymphatic vessels which in
turn serve as conduits for cancer to spread to lymph
nodes. This receptor is also involved in the suppression
of immune responses to tumours, an emerging area
of significant interest in cancer treatment. BNC420
was discovered in collaboration with the Co-operative
Research Centre for Cancer Therapeutics (CTX). In
February 2014 Bionomics was pleased to announce
the CTX had received a further $34 million over six
years as an extension to the Australian Government’s
Co-operative Research Centre initiative. During
the extension, which is for a period of 6 years, the
collaboration will focus on new treatments for
childhood cancers, metastasis and cancer stem cells.
During the year Bionomics took the decision to de-
prioritise the RET cancer drug discovery program as
it was no longer aligned with the Company’s focus on
cancer stem cell therapeutics.
Outlook
With its first recorded profit, Bionomics is well financed
having received US$20 million from Merck post 30 June
2014, and with an anticipated $7.5 million to be received
from the Federal Government R&D Tax Incentive in
addition to the $10.5 million cash held at 30 June 2014.
The Company will focus on its important relationship
with Merck in pain and cognition to bring new
treatments to patients suffering chronic pain and
sufferers of Alzheimer’s Disease, Parkinson’s disease,
Schizophrenia and ADHD which are amongst the
disorders where cognitive impairment is a significant
problem.
Bionomics will continue to execute its partnership
strategy across its portfolio of oncology and
neuroscience programs, whilst progressing clinical and
preclinical development of its drug candidates including
BNC101 and BNC420.
Dividends
The directors do not propose to make any
recommendation for dividends for the current financial
year. There were no dividends declared in respect of the
previous financial year.
Significant Changes in the State of Affairs
There were no significant changes in the state of affairs
of the Group during the financial year.
25
Subsequent Events
No matters or circumstances have arisen since the end
of the financial year which significantly affect or may
significantly affect the results of the operations of the
Group.
Likely Developments and Expected Results of
Operations
The Group will continue to undertake drug discovery
and will seek to commercialise the outcomes of its
research and development in the form of diagnostic
products and drugs for the treatment of disease.
Environmental Regulation
The Group is subject to environmental regulations and
other licenses in respect of its research facilities in
Thebarton (South Australia), Bionomics Inc in San Diego
and for Neurofit in France. The Group is subject to
regular inspections and audits by responsible State and
Federal authorities. The Group was in compliance with
all the necessary environmental regulations throughout
2013/2014 and no related issues have arisen since the
end of the financial year to the date of this report.
INFORMATION ON DIRECTORS
Mr Graeme Kaufman BSc MBA
Chairman – Non-Executive
Director since 18 September 2012
Experience and Expertise
Mr Kaufman has wide ranging experience across the
biotechnology sector, spanning scientific, commercial
and financial areas. His experience with CSL Limited,
Australia’s largest biopharmaceutical company
included responsibility for all of their manufacturing
facilities, and the operation of an independent business
division operating in the high technology medical
device market. As CSL’s General Manager Finance, Mr
Kaufman had global responsibility for finance, strategy
development, human resources and information
technology. Mr Kaufman has also served as an
executive director of ASX-listed Circadian Technologies
and a non-executive director of Amrad Corporation.
He was previously Executive Vice President Corporate
Finance with Mesoblast Limited and is currently a non-
executive director of IDT Australia Limited and Cellmid
Limited.
Current Directorships (in addition to Bionomics Limited)
Listed: Non-Executive Director, Cellmid Limited
(ASX:CDY) (since August 2012); Chairman, IDT Australia
Limited (ASX:IDT) (since June 2013)
Unlisted: Paradigm BioPharmaceuticals Limited
Former Listed Directorships in Last Three Years
None
Special Responsibilities
Member of Audit and Risk Management Committee
Interests in Shares and Options at Date of Report
178,750 ordinary shares in Bionomics Limited
1,000,000 unlisted options over ordinary shares in
Bionomics
Dr Deborah Rathjen BSc (Hons), MAICD, PhD
Chief Executive Officer and Managing Director
Director since 18 May 2000
Experience and Expertise
Dr Rathjen joined Bionomics in 2000 from Peptech
Limited, where she was general manager of business
development and licensing. Dr Rathjen was a co-
inventor of Peptech’s TNF technology and leader
of the company’s successful defence of its key TNF
patents against a legal challenge by BASF. Dr Rathjen
has significant experience in company building and
financing, mergers and acquisitions, therapeutic
product research, business development and licensing
and specific expertise in inflammation and cancer.
Dr Rathjen is Chairperson of the AusBiotech Board.
Current Directorship (in addition to Bionomics Limited)
Listed: Nil
Other: Director and Chairperson of AusBiotech Limited
(since 2008), Director of CRC Cancer Therapeutics
Former Listed Directorships in Last Three Years
None
Special Responsibilities
Chief Executive Officer and Managing Director
Interests in Shares and Options at Date of Report
1,910,401 ordinary shares in Bionomics Limited
2,715,000 unlisted options over ordinary shares in
Bionomics Limited
Mr Trevor Tappenden CA, FAICD
Non-Executive Director
Director since 15 September 2006
Experience and Expertise
Mr Tappenden commenced a career as a Non-Executive
Director in 2003 after a career with Ernst & Young
spanning 30 years. During his time at Ernst & Young
Mr Tappenden held a variety of positions including
Managing Partner of the Melbourne Office, member
of the Board of Partners, Head of the Victorian
Government Services Group and National Director
of the Entrepreneurial Services Division. He holds
directorships in various private, government and not-
for-profit organisations and is the Chairman of the
Audit and Risk Management Committees of many of
those organisations.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Nil
Other: Director, Buckfast Pty Ltd; Director, Advanced
Manufacturing CRC; Director & Chairman, Intellicomms
Pty Ltd; Director, RMIT University Vietnam; Director
(Chairman), RMIT University Foundation
Former Listed Directorships in Last Three Years
Director, Metal Storm Limited
Special Responsibilities
Chairman of Audit and Risk Management Committee
Interests in Shares and Options at Date of Report
307,500 ordinary shares in Bionomics Limited
300,000 unlisted options over ordinary shares in
Bionomics Limited
Dr Errol De Souza PhD
Non-Executive Director
Director since 28 February 2008
Experience and Expertise
Dr De Souza is a leader in the development of
therapeutics for treatment of central nervous system
(CNS) disorders. He is currently President and CEO
of leading US company Biodel Inc (Nasdaq:BIOD)
and is the former President and CEO of US biotech
companies Archemix Corporation and Synaptic
Pharmaceutical Corporation. Dr De Souza formerly
held senior management positions at Aventis and its
predecessor Hoechst Marion Roussel Pharmaceuticals,
Inc. Most recently, he was Senior Vice President
and Site Head of US Drug Innovation and Approval
(R&D), at Aventis, where he was responsible for the
discovery and development of drug candidates through
Phase IIa clinical trials for CNS and inflammatory
disorders. Prior to Aventis, he was a co-founder and
Chief Scientific Officer of Neurocrine Biosciences
(Nasdaq:NBIX). Dr De Souza has served on multiple
editorial boards, National Institutes of Health (NIH)
Committees and is currently a Director of several public
and private companies.
Current Directorship (in addition to Bionomics Limited)
Listed companies: Director of Biodel Inc (Nasdaq:BIOD);
Director of Targacept, Inc (Nasdaq:TRGT)
Former Listed Directorships in Last Three Years
Massachusetts Biotechnology Council
Special Responsibilities
None
Interests in Shares and Options at Date of Report
146,698 ordinary shares in Bionomics Limited
400,000 unlisted options over ordinary shares in
Bionomics Limited
26
DIRECTORS’ REPORT
Dr Jonathan Lim MD
Non-Executive Director
Director since 14 September 2012
Experience and Expertise
Jonathan Lim, MD is Chairman, CEO and Co-Founder
of Ignyta, Inc. (NASDAQ: RXDX), an oncology precision
medicine biotechnology company that he helped
take public in October 2013 and raised nearly US
$120 million during the subsequent six months, and
advanced the clinical development of RXDX-101, the
company’s lead product candidate. He is also Managing
Partner of City Hill Ventures, LLC, which he established
in 2010 prior to co-founding Eclipse Therapeutics, Inc.
in early 2011. Dr Lim was formerly President, CEO
and Board Director of Halozyme Therapeutics, Inc.
where he grew the company from five employees and
a market value of US $5 million in May 2003 to 140
employees and peak market capitalisation of nearly US
$1 billion during his tenure. Under Dr Lim’s eight years
of leadership, the company went public and raised US
$300 million from financing and corporate partnerships
with Roche and Baxter, achieved two US FDA approvals
and built a late stage pipeline of two Phase III, two
Phase II, and two Phase I product candidates. Dr Lim’s
prior experience includes management consulting at
McKinsey, NIH Postdoctoral Fellowship at Harvard
and general surgery residency at New York Hospital-
Cornell. He has BS and MS degrees from Stanford,
MD from McGill and MPH from Harvard.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Ignyta, Inc (Nasdaq: RXDX)
Other: Managing Partner, City Hill Ventures, LLC
Former Listed Directorships in Last Three Years
President, Halozyme Therapeutics, Inc (Nasdaq:HALO)
Special Responsibilities
None
Interests in Shares and Options at Date of Report
5,091,828 ordinary shares in Bionomics Limited
500,000 unlisted options over ordinary shares in
Bionomics Limited
Ms Melanie Young
Chief Financial Officer and Company Secretary
Ms Young has over 15 year’s experience, with six years
in the medical device field, including two years as CFO
of an ASX-listed company covering all facets of the
company’s global finance function. In particular, her
considerable commercial experience in listed company
reporting requirements, international finances and
working capital management complements the
Bionomics team. Ms Young has also gained experience
in negotiating distributor agreements, due diligence,
cost reduction strategies and improving operating
efficiencies. Previously Ms Young worked for Deloitte
27
Touche Tohmatsu in the Growth Solutions Division.
Ms Young holds a Bachelor of Commerce from Deakin
University and is a Chartered Accountant.
Meetings of Directors
The following table sets out the number of directors’
meetings (including meetings of committees of
directors) held during the financial year and the number
of meetings attended by each director (while they were
a director or committee member).
MEETINGS
OF AUDIT
AND RISK
MANAGEMENT
(ARM)
COMMITTEE
MEETINGS
OF
DIRECTORS
A
9
9
9
9
9
B
9
9
9
8
9
A
4
*
4
*
*
B
4
*
4
*
*
Mr Graeme Kaufman
Dr Deborah Rathjen
Mr Trevor Tappenden
Dr Errol De Souza
Dr Jonathan Lim
A Number of meetings held
B Number of meetings attended
* = Not a member of the relevant committee,
may attend by invitation.
REMUNERATION REPORT
The remuneration report is set out under the following
main headings:
1. Principles used to determine the nature and
amount of remuneration
2. Details of remuneration
3. Service agreements
4. Share-based compensation
5. Additional information
1. Principles Used to Determine the Nature
and Amount of Remuneration
The objective of the Group’s key management personnel
remuneration framework is to ensure that reward
for performance is competitive and appropriate for
the results delivered. The framework aligns key
management personnel rewards with achievement
of strategic objectives and the creation of value for
shareholders.
Key management personnel remuneration and other
terms of employment are determined by the Board
having regard to performance, relevant comparative
information and the Group’s financial performance.
Bionomics ESOP; and
Remuneration packages are set at levels that
are intended to attract and retain first class key
management personnel capable of managing the
Group’s operations and achieving the Group’s strategic
objectives.
The framework provides a mix of base cash
remuneration and performance-based remuneration
through the Bionomics Limited Employee Share
Option Plan (the Bionomics ESOP) in order to align the
interests of key management personnel with those of
shareholders.
Non-Executive Directors
Fees and payments to non-executive directors reflect
the demands that are made on and the responsibilities
of the directors.
Non-executive directors may receive share options at
the time of their initial appointment to the Board or at
other such times as approved by shareholders.
Directors’ Fees
Non-executive directors’ fees are determined within an
aggregate directors’ fee pool limit that is periodically
recommended for approval by shareholders under
the Constitution. The current aggregate non-
executive directors’ fee pool limit is $500,000 per
annum (as approved by shareholders at the AGM
held on 14 November 2012). The Chairman and non-
executive directors’ fees are $120,000 per annum
and $65,000 per annum respectively, inclusive of
superannuation. The Chairman of the Audit and Risk
Management Committee, Mr Trevor Tappenden,
received an additional $15,000 per annum inclusive of
superannuation for services relating to his Audit and
Risk Management Committee duties. Dr Errol De Souza
received an additional $15,000 per annum inclusive of
superannuation for being a member of the Scientific
Advisory Board.
Any value that may be attributed to options issued
to non-executive directors is not included in the
shareholder approved aggregate limit of directors’ fees
applying from time to time.
Retirement Allowance for Directors
The Group does not provide retirement allowances for
its non-executive directors.
Key Management Personnel Remuneration
The key management personnel pay and reward
framework has three components:
ª a cash remuneration package, including
superannuation and other entitlements;
ª longer-term incentives through participation in the
ª in exceptional circumstances, a cash bonus may be
paid.
The combination of these comprises the key
management personnel’s total remuneration.
Base Remuneration
The cash remuneration package of key management
personnel is structured as a total employment cost
package that may be delivered as a mix of cash
and prescribed salary sacrifice benefits at the key
management personnel’s discretion, inclusive of
superannuation or equivalent retirement benefits.
Remuneration levels are reviewed annually and an
assessment made against market comparable roles
balanced with individual key management personnel’s
performance and the Group’s financial position. The
key management personnel’s remuneration may also
be reviewed on promotion. The Board reviews and
approves the salary of the Chief Executive Officer
and Managing Director and other key management
personnel directly reporting to the Chief Executive
Officer and Managing Director.
There is no link between the company’s performance
and the setting of remuneration except as discussed
on page 32 in relation to options and cash bonuses for
certain executives.
There are no guaranteed base pay increases for key
management personnel.
Retirement Benefits
Retirement benefits through superannuation (or local
equivalent) are paid for all Group employees in line with
relevant legislative requirements into funds nominated
by the individual employee. The Group does not have
any on-going responsibility for the individual employee
superannuation and does not have in place a defined
benefits plan for employees.
The Bionomics ESOP
Information on the Bionomics ESOP is set out in section
4 of this Remuneration Report.
2. Details of Remuneration
Details of the remuneration of each director of
Bionomics and each of the other key management
personnel (as defined in the Corporations Act, 2001) are
set out in the following tables.
Non-Executive Chairman
Mr Graeme Kaufman
Executive Director
Dr Deborah Rathjen, Chief Executive Officer
and Managing Director
28
DIRECTORS’ REPORT
Non-Executive Directors
Mr Trevor Tappenden, Dr Errol De Souza, Dr Jonathan Lim
The following persons were the key company and group executives and those persons having authority and
responsibility for planning, directing and controlling the activities of the consolidated entity, directly or indirectly,
including any director (whether executive or otherwise) of the consolidated entity (Key Management Personnel)
during the financial year and the prior year unless otherwise stated:
Name
Dr Deborah Rathjen
Dr José Iglesias
Ms Melanie Young
Position
Chief Executive Officer and Managing Director
Chief Medical Officer
Chief Financial Officer and Company Secretary
Details of options granted by Bionomics to and exercised by directors, other key management personnel and the
five highest remunerated officers during the year ended 30 June 2014 are set out further in this report.
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2014
SHORT-TERM BENEFITS
CASH
SALARY
AND FEES
$
NON-
MONETARY
BENEFITS
$
POST
EMPLOYMENT
SHARE-BASED PAYMENTS
SUPER-
ANNUATION
$
SHARES
$
OPTIONS
$
OPTIONS
% OF
TOTAL
%
TOTAL
$
109,876
73,227
80,000
65,000
407,637
378,941
160,838
-
-
-
-
75,368
-
12,224
87,592
10,164
6,773
-
-
17,775
-
16,008
50,720
-
-
-
-
-
-
-
-
76,509
38.93
196,549
-
-
23,305
17,892
51,387
42,742
-
-
26.39
80,000
80,000
88,305
3.45
518,672
11.94
430,328
18.44
231,812
211,835
13.02 1,625,666
NAME
Mr Graeme Kaufman
Mr Trevor Tappenden
Dr Errol De Souza
Dr Jonathan Lim
Dr Deborah Rathjen
Dr José Iglesias
Ms Melanie Young
TOTALS
1,275,519
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2013
SHORT-TERM BENEFITS
CASH
SALARY
AND FEES
$
NON-
MONETARY
BENEFITS
$
POST
EMPLOYMENT
SHARE-BASED PAYMENTS
SUPER-
ANNUATION
$
SHARES
$
OPTIONS
$
NAME
Mr Graeme Kaufman3
Mr Christopher Fullerton5
Mr Trevor Tappenden
Dr Errol De Souza
Dr Jonathan Lim2
Dr Deborah Rathjen1
Dr José Iglesias4
Ms Melanie Young
TOTALS
29
78,249
48,739
73,395
80,000
51,458
419,820
270,330
156,047
1,178,038
-
-
-
-
-
7,042
4,386
6,605
-
-
53,710
16,470
-
13,678
67,388
-
15,275
49,778
-
-
-
-
-
-
-
-
-
OPTIONS
% OF
TOTAL
%
16.25
23.79
-
1.26
24.34
TOTAL
$
101,842
69,711
80,000
81,024
68,009
16,551
16,586
-
1,024
16,551
(8,255)
(1.71)
481,745
2,398
51,170
96,025
0.88
272,728
21.67
236,170
6.90
1,391,229
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2014
SHORT-TERM BENEFITS
EMPLOYMENT
SHARE-BASED PAYMENTS
POST
CASH
NON-
SALARY
MONETARY
SUPER-
AND FEES
BENEFITS
ANNUATION
SHARES
OPTIONS
NAME
Mr Graeme Kaufman
Mr Trevor Tappenden
Dr Errol De Souza
Dr Jonathan Lim
Dr Deborah Rathjen
Dr José Iglesias
Ms Melanie Young
$
109,876
73,227
80,000
65,000
407,637
378,941
160,838
75,368
17,775
12,224
87,592
16,008
50,720
TOTALS
1,275,519
211,835
13.02 1,625,666
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2013
SHORT-TERM BENEFITS
EMPLOYMENT
SHARE-BASED PAYMENTS
POST
CASH
NON-
SALARY
MONETARY
SUPER-
AND FEES
BENEFITS
ANNUATION
SHARES
OPTIONS
76,509
38.93
196,549
OPTIONS
% OF
TOTAL
%
-
-
26.39
$
-
-
TOTAL
$
80,000
80,000
88,305
23,305
17,892
51,387
42,742
3.45
518,672
11.94
430,328
18.44
231,812
OPTIONS
% OF
TOTAL
%
16.25
23.79
-
1.26
24.34
TOTAL
$
101,842
69,711
80,000
81,024
68,009
0.88
272,728
21.67
236,170
6.90
1,391,229
$
-
16,551
16,586
1,024
16,551
2,398
51,170
96,025
$
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
-
10,164
6,773
$
-
-
-
$
7,042
4,386
6,605
-
-
-
NAME
Mr Graeme Kaufman3
Mr Christopher Fullerton5
Mr Trevor Tappenden
Dr Errol De Souza
Dr Jonathan Lim2
Dr Deborah Rathjen1
Dr José Iglesias4
Ms Melanie Young
TOTALS
$
78,249
48,739
73,395
80,000
51,458
419,820
270,330
156,047
1,178,038
53,710
16,470
(8,255)
(1.71)
481,745
13,678
67,388
15,275
49,778
1 2013 includes the reversal of the estimated fair value
of options at 30 June 2012 ($48,900) and the actual fair
value at vesting date 15 August 2012 of $33,300.
2 Appointed 14 September 2012
3 Appointed 18 September 2012
4 Appointed 1 November 2012
5 Retired 31 December 2012
Options are granted to directors and other key
management personnel under the Bionomics ESOP,
details of which are set out in section 4 of this
Remuneration Report.
No director or senior management person appointed
during the period received a payment as part of their
consideration for agreeing to hold the position.
3. Service Agreements
Remuneration and other terms of employment for the
Chief Executive Officer and Managing Director and
the other key management personnel are formalised
in service agreements. Major provisions of the
agreements relating to remuneration are set out below:
Dr Deborah Rathjen, Chief Executive Officer
and Managing Director
ª Term of agreement – 5 years commencing 15 October
2010.
ª Total remuneration package for the year ended 30
June 2014 of $500,780 per annum (excluding options),
to be reviewed annually by the Board.
ª Payment of termination benefit on early termination
by the employer without cause equal to six months’
salary. In the event of redundancy, purchase or
merger of Bionomics by a third party resulting in
a material diminution in duties, an additional six
months’ salary will be paid.
Dr José Iglesias, Chief Medical Officer
ª Term of agreement – open, commencing 1 November
2012.
ª Total remuneration package for the year ended 30
June 2014 of $378,941 per annum, pro-rated (ex-
cluding options) to be reviewed annually by the Chief
Executive Officer & Managing Director and approved
by the Board.
ª Payment of termination benefit on early termina-
tion by the employer without cause equal to three
months’ salary. In the event of redundancy, purchase
or merger of Bionomics by a third party resulting in a
material diminution in duties, six months’ salary will
be paid.
Ms Melanie Young, Chief Financial Officer
and Company Secretary
ª Term of agreement – open, commencing 9 May 2011.
ª Total remuneration package for the year ended 30
June 2014 of $189,070 per annum (excluding options
and shares) to be reviewed annually by the Chief Ex-
ecutive Officer and Managing Director and approved
by the Board.
ª Payment of termination benefit on early termination
by the employer without cause equal to three months’
salary. In the event of redundancy, purchase or
merger of Bionomics by a third party resulting in a
material diminution in duties, six months’ salary will
be paid.
4. Share-based Compensation
Share-based compensation benefits are provided to
employees via the Bionomics ESOP and an Employee
Share Plan.
The market value of shares issued to employees for
no cash consideration under the Employee Share Plan
is recognised as an employee benefits expense with a
corresponding increase in equity when the employees
become unconditionally entitled to the shares.
The Bionomics ESOP was approved by the Board and
Shareholders in 2011. Staff eligible to participate in the
plan are those who have been a full-time or part-time
employee of the Group for a period of not less than six
months or a director of the Company.
Options are granted under the plan for no consideration
and vest equally over five years, unless they are bonus
options which vest immediately.
The amounts disclosed as remuneration relating to
options are the assessed fair values at grant date of
those options allocated equally over the period from
grant date to vesting date. Fair values at grant date are
determined using a Black-Scholes option pricing model
that takes into account the exercise price, the term of
the option, the vesting and performance criteria, the
impact of dilution, the non-tradeable nature of the
option, the share price at grant date, expected price
volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the
option.
Option Modification
The terms of the options under the Bionomics ESOP
were modified at 30 June 2014 for all options on issue
prior to the fully underwritten 1:8 non-renounceable
rights issue announced on 4 March 2013. The exercise
price for all outstanding options have now been adjust-
ed under ASX Listing Rule 6.22 and are shown in Note
18(d)(i).
30
DIRECTORS’ REPORT
The terms and conditions of each grant of options affecting remuneration of directors, other key management
personnel and any of the top five salaried officers in this or future reporting periods are as follows:
GRANT DATE
EXPIRY DATE
Granted in prior periods
November 2006
16 November 2014
November 2008
16 November 2015
16 November 2016
5 November 2014
5 November 2015
5 November 2016
5 November 2017
7 August 2014
7 August 2015
7 August 2016
November 2011
25 November 2016
December 2011
August 2012
December 2012
June 2013
Granted in current period
August 2013
December 2013
31
25 November 2016
12 December 2017
12 December 2018
12 December 2019
12 December 2020
12 December 2021
1 August 2017
11 December 2017
11 December 2018
11 December 2019
11 December 2020
11 December 2021
11 December 2022
5 June 2019
5 June 2020
5 June 2021
5 June 2022
5 June 2023
12 August 2018
17 December 2018
11 December 2018
11 December 2019
11 December 2020
11 December 2021
11 December 2022
REVISED
EXERCISE PRICE
FAIR VALUE
PER OPTION AT
GRANT DATE
VESTING DATE
$0.2976
$0.2976
$0.2976
$0.2976
$0.2976
$0.2976
$0.2976
$0.3692
$0.3692
$0.3692
$0.6116
$0.9186
$0.5156
$0.5156
$0.5156
$0.5156
$0.5156
$0.2846
$0.2846
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3873
$0.3873
$0.3873
$0.3873
$0.3873
$0.3301
$0.3301
$0.7224
$0.7224
$0.7224
$0.7224
$0.7224
$0.1264
16 November 2009
$0.1307
16 November 2010
$0.1343
16 November 2011
$0.0963
5 November 2009
$0.1042
5 November 2010
$0.1114
5 November 2011
$0.1178
5 November 2012
$0.0828
$0.0915
$0.0993
7 August 2009
7 August 2010
7 August 2011
$0.1527
25 November 2011
$0.0333
15 August 2012
$0.2344
12 December 2012
$0.2487
12 December 2013
$0.2611
12 December 2014
$0.2720
12 December 2015
$0.2818
12 December 2016
$0.0942
1 August 2012
$0.1130
11 December 2012
$0.1226
11 December 2013
$0.1310
11 December 2014
$0.1383
11 December 2015
$0.1449
11 December 2016
$0.1509
11 December 2017
$0.1425
$0.1525
$0.1614
$0.1696
$0.1768
5 June 2014
5 June 2015
5 June 2016
5 June 2017
5 June 2018
$0.2668
12 August 2013
$0.3253
17 December 2013
$0.2304
11 December 2013
$0.2519
11 December 2014
$0.2706
11 December 2015
$0.2874
11 December 2016
$0.3023
11 December 2017
Options granted under the plan carry no dividend or voting rights.
Options Provided as Remuneration under the ESOP in the Current Year
Details of options over ordinary shares in the Company provided as remuneration to each director and each of the
other key management personnel are set out below. When exercisable, each option is convertible into one ordinary
share of Bionomics.
During the year, and since the end of the year, options were issued to the following directors and other key
management personnel:
NAME
NUMBER
GRANTED
DATE
GRANTED
TOTAL FAIR
VALUE $
NUMBER
VESTED
% OF GRANT
VESTED
% OF GRANT
FORFEITED
Ms Melanie Young1
60,000
12 Aug 2013
Dr José Iglesias1
65,000
12 Aug 2013
Dr Deborah Rathjen1
55,000
17 Dec 2013
16,008
17,342
17,892
60,000
65,000
55,000
Mr Graeme Kaufman2
500,000
17 Dec 2013
134,258
100,000
100%
100%
100%
20%
-
-
-
-
1 The options vested immediately.
2 The options vest after completion of a specified service period.
Options Exercised in the Current Year
During the year, the following directors and other key management personnel exercised options that were granted
to them as part of their compensation. Each option converts into one ordinary share of Bionomics.
NAME
Dr Deborah Rathjen
Dr Errol De Souza
Mr Trevor Tappenden
NUMBER OF
OPTIONS
EXERCISED
NUMBER OF
ORDINARY SHARES
ISSUED
95,000
100,000
100,000
95,000
100,000
100,000
AMOUNT
PAID
$
35,302
30,000
30,000
AMOUNT
UNPAID
$
-
-
-
The following table summarises the value of options granted, exercised or lapsed during the financial year to
directors and other key management personnel:
NAME
Dr Deborah Rathjen
Mr Graeme Kaufman
Dr Errol De Souza
Mr Trevor Tappenden
Dr José Iglesias
Ms Melanie Young
VALUE OF OPTIONS
GRANT AT THE
GRANT DATE1
$
VALUE OF OPTIONS
EXERCISED AT THE
EXERCISE DATE
$
VALUE OF OPTIONS
LAPSED AT THE
DATE OF LAPSE2
$
17,892
134,258
-
-
17,342
16,008
69,350
-
76,000
84,000
-
-
-
-
-
-
-
-
1 The value of options granted during the period is recognised in compensation over the vesting period of the grant,
in accordance with Australian Accounting Standards.
2 The value of options lapsing during the period due to the failure to satisfy a vesting condition is determined
assuming the vesting condition has been satisfied.
32
DIRECTORS’ REPORT
5. Additional Information
Principles Used to Determine the Nature and Amount of Remuneration; Relationship between Remuneration and
Company Performance
Base salary amounts are determined based on market information for similar roles in comparable industries.
Other than market information, there is no link between the base salary determination and Company performance.
The calculation of the key management personnel annual bonus is set against the achievement of specified
milestones and targets approved by the Board. Milestones and targets generally relate to achieving developmental
milestones for each pipeline project, such as achieving IND registrations by particular dates or project related
milestones by particular dates. These milestones are established to support the Company achieving its overall
objectives.
The tables below set out summary information about the consolidated entity’s earnings and movements in
shareholder wealth for the five years to 30 June 2014.
30 JUNE 2014
$
30 JUNE 2013
$
30 JUNE 2012
$
30 JUNE 2011
$
30 JUNE 2010
$
Revenue
19,921,506
3,724,169
6,834,709
4,071,798
3,848,469
Net Profit/(Loss) before tax
3,946,945
(9,963,175)
(3,328,896)
(10,106,903)
(8,214,082)
Net Profit/(Loss) after tax
3,206,616
(10,001,350)
(3,136,238)
(9,356,497)
(8,214,082)
30 JUNE 2014
CENTS
30 JUNE 2013
CENTS
30 JUNE 2012
CENTS
30 JUNE 2011
CENTS
30 JUNE 2010
CENTS
Share price at start of year
Share price at end of year
Dividends paid
Basic earnings per share
Diluted earnings per share
34.0
55.0
-
0.8
0.8
30.0
34.0
-
(2.7)
(2.7)
55.5
30.0
-
(0.9)
(0.9)
27.0
55.5
-
(2.9)
(2.9)
21.0
27.0
-
(2.7)
(2.7)
OTHER INFORMATION
Shares Under Option
Information relating to shares under option is set out in section 4 of the Remuneration Report. The total number of
shares under option at 30 June 2014 was 9,458,782.
Shares Issued on the Exercise of Options
1,488,242 ordinary shares of Bionomics were issued during the year ended 30 June 2014 on the exercise of options
granted under the Bionomics ESOP.
Insurance of Officers
During the financial year, the Company paid a premium to insure the Directors and Officers (D&O) of the Company.
Under the terms of this policy the premium paid by the Company is not permitted to be disclosed.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the D&O in their capacity as D&O of the Company, and any other payments arising from liabilities
incurred by the D&O in connection with such proceedings, other than where such liabilities arise out of conduct
involving a wilful breach of duty by the D&O or the improper use by the D&O of their position or of information to
gain advantage for themselves or someone else or to cause detriment to the Company.
It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those
relating to other liabilities.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a
liability incurred as such an officer or auditor.
33
Non-Audit Services
The Company may decide to employ the external auditor on assignments additional to their statutory audit duties
where the external auditor’s expertise and experience with the Group are important.
Details of the amounts paid to the external auditor for audit and non-audit services provided during the year are set
out in Note 25 to the financial statements.
The Board has considered the position and, in accordance with the advice received from the Audit and Risk
Management Committee, is satisfied that the provision of the non-audit services is compatible with the general
standard of independence for external auditors imposed by the Corporations Act 2001. The directors are satisfied
that the provision of non-audit services by the external auditor, as set out in Note 25 to the financial statements, did
not compromise the external auditor independence requirements of the Corporations Act 2001 for the following
reasons:
ª all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not
impact the integrity, impartiality and objectivity of the external auditor; and
ª none of the services undermine the general principles relating to auditor independence as set out in Code of
Conduct APES 110, Code of Ethics for Professional Accountants, issued by the Accounting Professional & Ethical
Standards Board, including reviewing or auditing the external auditor’s own work, acting in a management or a
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk
and rewards.
External Auditor
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001.
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 35.
This directors’ report is signed in accordance with a resolution of directors made pursuant to Section 298(2)
of the Corporations Act 2001.
Graeme Kaufman
Chairman
Adelaide
19 August 2014
Deborah Rathjen
Chief Executive Officer and Managing Director
Adelaide
19 August 2014
34
AUDITOR’S INDEPENDENCE DECLARATION
35
ANNUAL FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
TABLE OF CONTENTS
FINANCIAL STATEMENTS
PG 37
PG 38
PG 39
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
PG 40
CONSOLIDATED STATEMENT OF CASH FLOWS
PG 41
NOTES TO THE FINANCIAL STATEMENTS
PG 81
DIRECTORS’ DECLARATION
PG 82
INDEPENDENT AUDIT REPORT
PG 84
SHAREHOLDER INFORMATION
This financial statement covers both Bionomics Limited (“Bionomics”) as an individual entity (Note 29) and
the Group consisting of Bionomics and its subsidiaries. A description of the nature of the Group’s operations
and its principal activities is included throughout the Annual Report and the Directors’ Report. The financial
statement is presented in Australian dollars.
Bionomics is a company limited by shares, incorporated and domiciled in Australia. It is listed on the ASX
(ASX:BNO) and its registered office is 31 Dalgleish Street, Thebarton, SA 5031.
Through the internet, we have ensured that our corporate reporting is timely, complete and available globally at
minimum cost to the company. All press releases, financial statements and other information are available on our
website www.bionomics.com.au.
36
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
CONTINUING OPERATIONS
Revenue
Other income
EXPENSES
Administrative
Financing costs
Occupancy
Compliance
Loss on disposal of assets
Research and development
Profit/(Loss) before tax
Income tax expense
Profit/(Loss) after tax
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Total comprehensive income for the year
Profit/(Loss) attributable to:
Owners of the Company
NOTE
30 JUNE 2014
$
30 JUNE 2013
$
4
4
5
6
19,921,506
7,624,490
27,545,996
2,666,597
609,502
1,927,483
603,702
6,765
17,785,002
3,946,945
740,329
3,206,616
3,724,169
8,101,787
11,825,956
3,352,156
78,198
1,586,144
601,944
184
16,170,505
(9,963,175)
38,175
(10,001,350)
(355,014)
2,851,602
1,894,514
(8,106,836)
2,851,602
(8,106,836)
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic Earnings/(Loss) per share
Diluted Earnings/(Loss) per share
27
27
0.8
0.8
(2.7)
(2.7)
NOTE
2014 CENTS
2013 CENTS
THE ABOVE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME SHOULD BE READ IN CONJUNCTION WITH
THE ACCOMPANYING NOTES.
37
CONSOLIDATED STATEMENT
OF FINANCIAL POSITIONAS AT 30 JUNE 2014
CURRENT ASSETS
Cash and bank balances
Trade and other receivables
Inventories
Current tax asset
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
Other liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other payables
Borrowings
Provisions
Deferred tax liability
Contingent consideration
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Capital
Reserves
Accumulated losses
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
7
8
9
6
10
12
13
14
15
16
17
14
15
16
6
30
18
19
20
NOTE
30 JUNE 2014
$
10,501,307
20,740,347
83,423
244,965
7,948,026
39,518,068
828,361
24,714,188
25,542,549
65,060,617
4,038,054
788,600
1,186,482
3,267,589
9,280,725
310,794
505,641
108,320
4,340,443
5,696,087
10,961,285
20,242,010
44,818,607
30 JUNE 2013
$
22,452,089
705,722
98,526
36,648
7,422,513
30,715,498
842,850
22,052,744
22,895,594
53,611,092
4,283,609
680,376
1,081,086
37,447
6,082,518
306,410
400,159
66,327
-
5,348,695
6,121,591
12,204,109
41,406,983
111,721,671
2,714,579
(69,617,643)
44,818,607
111,312,572
2,918,670
(72,824,259)
41,406,983
THE ABOVE CONSOLIDATED STATEMENT OF FINANCIAL POSITION SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
38
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
ISSUED
CAPITAL
$
OTHER
CAPITAL
CONTRIBUTED
$
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$
SHARE-
BASED
PAYMENTS
RESERVE
$
ACCUMULATED
LOSSES
$
TOTAL
$
BALANCE AT 1 JULY 2012
87,834,778
Loss for the period
Exchange differences
on translation of foreign
operations
Total comprehensive
income
Recognition of share-
based payments
-
-
-
-
Rights Issue net of costs
15,602,162
Issue of ordinary shares
under Employee Share
Option Plan
Issue of ordinary shares,
net of transaction costs
& income tax
227,041
6,116,024
1,532,567
-
-
-
-
-
-
-
(645,886)
1,533,134
(62,822,909)
25,899,117
-
1,894,514
1,894,514
-
-
-
-
-
-
-
136,908
-
-
-
(10,001,350)
(10,001,350)
-
1,894,514
(10,001,350)
(8,106,836)
-
-
-
136,908
15,602,162
227,041
-
7,648,591
BALANCE AT 30 JUNE 2013
109,780,005
1,532,567
1,248,628
1,670,042
(72,824,259)
41,406,983
BALANCE AT 1 JULY 2013
109,780,005
1,532,567
1,248,628
1,670,042
(72,824,259)
41,406,983
Profit for the period
Exchange differences
on translation of foreign
operations
Total comprehensive
income
Recognition of share-
based payments
Rights Issue net of costs
Issue of ordinary shares
under Employee Share
Option Plan
Issue of ordinary shares,
net of transaction costs
& income tax
-
-
-
-
-
412,661
-
-
-
-
-
-
1,529,005
(1,532,567)
-
(355,014)
(355,014)
-
-
-
-
-
-
-
150,923
-
-
-
3,206,616
3,206,616
-
(355,014)
3,206,616
2,851,602
-
-
-
150,923
-
412,661
-
(3,562)
BALANCE AT 30 JUNE 2014
111,721,671
-
893,614
1,820,965
(69,617,643)
44,818,607
THE ABOVE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
39
CONSOLIDATED STATEMENT
OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
R&D Incentive received
Receipts from customers
NOTE
2014
$
7,004,342
3,511,431
2013
$
4,201,787
2,984,760
Payments to suppliers and employees
(23,341,740)
(17,452,598)
Tax refund
Interest Paid
-
(87,236)
293,534
(78,198)
Net cash used in operating activities
26
(12,913,213)
(10,050,706)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Payments for purchases of property, plant & equipment
Net cash acquired on acquisition
Acquisition transaction costs
Net cash generated by/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings
Proceeds from borrowings
Net proceeds from share issues
Net cash generated by financing activities
567,329
(216,598)
-
-
350,731
(139,332)
339,739
409,100
609,507
636,871
(172,678)
256,279
(1,409,134)
(688,662)
(183,820)
87,594
15,829,202
15,732,976
Net (decrease)/increase in cash and cash equivalents
(11,952,975)
4,993,608
Cash at the beginning of the financial year
22,452,089
17,336,609
Effect of exchange rate changes on the balances
of cash held in foreign currency
2,193
121,872
Cash and cash equivalents at the end of the year
7
10,501,307
22,452,089
THE ABOVE CONSOLIDATED STATEMENT OF CASH FLOWS SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
40
NOTES TO THE
FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
TABLE OF CONTENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
NOTE 3: SEGMENT INFORMATION
NOTE 4: REVENUE AND OTHER INCOME
NOTE 5: EXPENSES
NOTE 6: INCOME TAXES
NOTE 7: CASH AND CASH EQUIVALENTS
NOTE 8: TRADE AND OTHER RECEIVABLES
NOTE 9: INVENTORIES
NOTE 10: OTHER ASSETS
NOTE 11: SUBSIDIARIES
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
NOTE 13: INTANGIBLE ASSETS
NOTE 14: TRADE AND OTHER PAYABLES
NOTE 15: BORROWINGS
NOTE 16: PROVISIONS
NOTE 17: OTHER LIABILITIES
NOTE 18: ISSUED CAPITAL
NOTE 19: RESERVES
NOTE 20: ACCUMULATED LOSSES
NOTE 21: FINANCIAL INSTRUMENTS
NOTE 22: KEY MANAGEMENT PERSONNEL COMPENSATION
NOTE 23: COMMITMENTS FOR EXPENDITURE
NOTE 24: EVENTS OCCURRING AFTER REPORTING DATE
NOTE 25: REMUNERATION OF AUDITORS
NOTE 26: CASH FLOW INFORMATION
NOTE 27: EARNINGS PER SHARE
NOTE 28: RELATED PARTY TRANSACTIONS
NOTE 29: PARENT ENTITY INFORMATION
NOTE 30: BUSINESS COMBINATIONS – ACQUISITION OF ECLIPSE THERAPEUTICS, INC
NOTE 31: CONTINGENT LIABILITIES
PG 42
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PG 52
PG 55
PG 55
PG 56
PG 58
PG 59
PG 59
PG 60
PG 60
PG 60
PG 61
PG 63
PG 63
PG 64
PG 64
PG 64
PG 69
PG 69
PG 70
PG 74
PG 74
PG 76
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PG 77
PG 77
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41
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the consolidated financial statements and notes of Bionomics Limited and its
controlled entities, the Group.
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.
The financial statements comprise the consolidated financial statements of the Group. For the purposes of
preparing the consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards
ensures that the financial statements and notes of the company and the Group comply with International Financial
Reporting Standards (IFRS).
The financial statements were authorised for issue by the directors on 19 August 2014.
Basis of Preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for certain non-
current assets and financial instruments that are measured at revalued amounts or fair values, as explained in
the accounting policies below. Historical cost is generally based on the fair values of the consideration given in
exchange for assets. All amounts are presented in Australian dollars unless otherwise noted.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at measurement date. Fair value for measurement and/or disclosure
purposes in these consolidated financial statements is determined on such a basis, except for share-based
payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope of AASB
117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value
in AASB 2 or value in use in AASB 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on
the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the
fair value measurement in its entirety, which are described as follows:
ª Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at measurement date;
ª Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for that asset or
liability, either directly or indirectly; and
ª Level 3 inputs are unobservable inputs for the asset or liability.
Application of New and Revised Accounting Standards
New and revised AASBs affecting amounts reported and/or disclosures in the financial statements
In the current year, the Group has applied a number of new and revised AASBs issued by the Australian
Accounting Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or
after 1 January 2013.
AASB 2011-4 ‘Amendments to
Australian Accounting Standards
to Remove Individual Key
Management
Personnel Disclosure
Requirements’
This standard removes the individual key management personnel disclosure
requirements in AASB 124 ‘Related Party Disclosures’. As a result the Group
only discloses the key management personnel compensation in total and for
each of the categories required in AASB 124.
In the current year the individual key management personnel disclosure
previously required by AASB 124 (note 23 in the 30 June 2013 financial
statements) is now disclosed in the remuneration report due to an amendment
to Corporations Regulations 2001 issued in June 2013.
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
AASB 2012-2 ‘Amendments
to Australian Accounting
Standards – Disclosures –
Offsetting Financial Assets
and Financial Liabilities’
The Group has applied the amendments to AASB 7 ‘Disclosures – Offsetting
Financial Assets and Financial Liabilities’ for the first time in the current year.
The amendments to AASB 7 require entities to disclose information about
rights of offset and related arrangements (such as collateral posting
requirements) for financial instruments under an enforceable master netting
agreement or similar arrangement.
The amendments have been applied retrospectively. As the Group does not have
any offsetting arrangements in place, the application of the amendments does
not have any impact on the consolidated financial statements.
AASB 13 ‘Fair Value
Measurement’ and AASB 2011-8
‘Amendments to Australian
Accounting Standards arising
from AASB 13’
The Group has applied AASB 13 for the first time in the current year. AAAB
13 establishes a single source of guidance for fair value measurements and
disclosure about fair value measurements. The scope of AASB 13 is broad;
the fair value measurement requirements of AASB 13 apply to both financial
instrument items and non-financial instrument items for which other AASB’s
require or permit fair value measurements and disclosures about fair value
measurements, except for share-based payment transactions that are within
the scope of AASB 2 ‘Share-based Payment’, leasing transactions that are
within the scope of AASB 117 ‘Leases’, and measurements that have some
similarities to fair value but are not fair value (e.g. net realisable value for the
purposes of valuing inventories or value in use for impairment assessment
purposes).
AASB 13 defines fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction in the principal (or
most advantageous) market at the measurement date under current market
conditions. Fair value under AASB 13 is an exit price regardless of whether that
price is directly observable or estimated using another valuation technique.
Also, AASB 13 includes extensive disclosure requirements.
AASB 13 requires prospective application from 1 July 2013. In addition, specific
transitional provisions were given to entities such that they need not apply the
disclosure requirements set out in the Standard in comparative information
provided for periods before the initial application of the Standard. In accordance
with these transitional provisions, the Group has not made any new disclosures
required by AASB 13 for the 2013 comparative period (please see notes 12
and 21 for the 2014 disclosures). Other than the additional disclosures, the
application of AASB 13 does not have any material impact on the amounts
recognised in the consolidated financial statements.
New and revised Standards on consolidation, joint arrangements, associates and Disclosures
In August 2011, a package of five standards on consolidation, joint arrangements, associates and disclosures was
issued comprising AASB 10 ‘Consolidated Financial Statements’, AASB 11 ‘Joint Arrangements’, AASB 12 ‘Disclo-
sure of Interests in Other Entities’, AASB 127 (as revised in 2011) ‘Separate Financial Statements’ and AASB 128
(as revised in 2011) ‘Investments in Associates and Joint Ventures’. Subsequent to the issue of these standards,
amendments to AASB 10, AASB 11 and AASB 12 were issued to clarify certain transitional guidance on the first-
time application of the standards.
43
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
In the current year, the Group has applied for the first time AASB 10 together with the amendments to AASB
10 regarding the transitional guidance. AASB 11, AASB 12, AASB 127 and AASB 128 (as revised in 2011) are not
applicable to the Group as these cover: joint arrangements, disclosure of interests in other entities, investments in
associates and joint ventures and separate financial statements respectively.
The impact of the application of this standard is set out below.
AASB 10 ‘Consolidated
Financial Statements’ and
AASB 2011-7 ‘Amendments to
Australian Accounting Standards
arising from the consolidation
and Joint Arrangements
standards’
AASB 10 replaces the parts of AASB 127 ‘Consolidated and Separate Financial
Statements’ that deal with consolidated financial statements and Interpretation
112 ‘Consolidation – Special Purpose Entities’. AASB 10 changes the definition of
control such that an investor controls an investee when a) it has power over an
investee, b) it is exposed, or has rights, to variable returns from its involvement
with the investee, and c) has the ability to use its power to affect its returns.
All three of these criteria must be met for an investor to have control over an
investee. Previously, control was defined as the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities.
Additional guidance has been included in AASB 10 to explain when an investor
has control over an investee. Some guidance included in AASB 10 that deals
with whether or not an investor that owns less than 50 per cent of the voting
rights in an investee has control over the investee is relevant to the Group. All
subsidiaries are owned 100% by the head company, Bionomics Limited.
Standards and Interpretations in Issue Not Yet Adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue
but not yet effective. The reported results and position of the Group will not change on adoption of these pronounce-
ments as currently there are no transactions that will be materially impacted by these pronouncements. Adoption
of these pronouncements will however, result in changes to information currently disclosed in the financial state-
ment. The Group does not intend to adopt any of these pronouncements before their effective dates.
Standards and Interpretations in issue not yet adopted
STANDARD / INTERPRETATION
AASB 9 ‘Financial Instruments’, and the relevant
amending standards
AASB 1031 ‘Materiality’ (2013)
AASB 2012-3 ‘Amendments to Australian Accounting
Standards – Offsetting Financial Assets and Financial
Liabilities’
AASB 2013-3 ‘Amendments to AASB 136 –
Recoverable Amount Disclosures for Non-Financial
Assets’
AASB 2013-9 ‘Amendments to Australian Accounting
Standards – Conceptual Framework, Materiality and
Financial Instruments’
EFFECTIVE FOR ANNUAL
REPORTING PERIODS
BEGINNING ON OR AFTER
EXPECTED TO BE
INITIALLY APPLIED IN THE
FINANCIAL YEAR ENDING
1 January 2018
30 June 2019
1 January 2014
1 January 2014
30 June 2015
30 June 2015
1 January 2014
30 June 2015
1 January 2014
30 June 2015
IFRS 15 ‘Revenue from Contracts with Customers’
1 January 2017
30 June 2018
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
Accounting Policies
The following significant accounting policies have been
adopted in the preparation and presentation of the
financial report.
comprehensive income of subsidiaries is attributed to
the owners of the Company and to the non-controlling
interests even if this results in the non-controlling
interests having a deficit balance.
(a) Basis of Consolidation
The consolidated financial statements incorporate the
financial statements of Bionomics Limited and entities
controlled by the Company and its subsidiaries. Control
is achieved when the Company:
ª has power over the investee;
ª is exposed, or has rights, to variable returns from its
involvement with the investee; and
ª has the ability to use its power to affect its returns.
The Company reassesses 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 listed above.
When the Company has less than a majority of the
voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it
the practical ability to direct the relevant activities of
the investee unilaterally. The Company considers all
relevant facts and circumstances in assessing whether
or not the Company’s voting rights in an investee are
sufficient to give it power, including:
ª the size of the Company’s holding of voting rights
relative to the size and dispersion of holdings of the
other vote holders;
ª potential voting rights held by the Company, other
vote holders or other parties;
ª rights arising from other contractual arrangements;
and
any additional facts and circumstances that indicate
that the Company has, or does not have, the current
ability to direct the relevant activities at the time that
decisions need to be made, including voting patterns at
previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary.
Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in
the consolidated statement of profit or loss and other
comprehensive income from the date the Company
gains control until the date when the Company ceases
to control the subsidiary.
Profit or loss and each component of other
comprehensive income are attributed to the owners of
the Company and to the non-controlling interests. Total
45
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 intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in full on
consolidation.
(b) Foreign Currencies
The individual financial statements of each group entity
are presented in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each
group entity are expressed in Australian dollars (‘$’),
which is the functional currency of the Company and
the presentation currency for the consolidated financial
statements.
In preparing the financial statements of each individual
group entity, transactions in currencies other than the
entity’s functional currency (foreign currencies) are
recognised at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting
period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing
at that date. Non-monetary items carried at fair
value that are denominated in foreign currencies are
retranslated at the rates prevailing at the date when the
fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences on monetary items are
recognised in profit or loss in the period in which they
arise except for:
ª exchange differences on transactions entered into in
order to hedge certain foreign currency risks; and
ª exchange differences on monetary items
receivable from or payable to a foreign operation
for which settlement is neither planned nor likely
to occur (therefore forming part of the net
investment in the foreign operation), which are
recognised initially in other comprehensive
income and reclassified from equity to profit or loss
on repayment of the monetary items.
For the purpose of presenting these consolidated
financial statements, the assets and liabilities of
the Group’s foreign operations are translated into
Australian dollars using exchange rates prevailing at
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
the end of the reporting period. Income and expense
items are translated at the average exchange rates
for the period. Exchange differences arising, if any,
are recognised in other comprehensive income and
accumulated in equity.
Goodwill and fair value adjustments to identifiable
assets acquired and liabilities assumed through
acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated
at the rate of exchange prevailing at the end of each
reporting period. Exchange differences arising are
recognised in other comprehensive income.
(c) Revenue Recognition
Interest revenue is recognised on an accruals basis
using the effective interest rate method. Rental income
is recognised on a straight line basis over the term of
the lease.
Service income is recognised when the services are
rendered. Revenue from a contract to provide services
is recognised by reference to the stage of completion of
the contract. The stage of completion of the contract is
recognised by reference to the proportion of the total
cost of providing the contract services.
License revenues received in respect of future
accounting periods are deferred until the Group
has fulfilled its obligations under the terms of the
agreement.
Where a license agreement has a fixed fee in a non-
cancellable contract which permits the licensee
to exploit those rights freely and the Group has no
remaining obligations to perform, the fee is treated as
a sale. Where these conditions have not been met, the
license fee is amortised over the life of the licensing
agreement.
Unamortised license fee revenue is recognised in the
statement of financial position as deferred income.
Research and development work performed for a fee
is recognised based on the stage of completion of the
research and development.
Milestone payments within license agreements are
recognised when the milestone has been achieved.
(d) Government Grants and Government Assistance
Grants from the government are recognised at their
fair value where there is a reasonable assurance
that the grant will be received and the Group will
comply with all attached conditions. Grants relating
to cost reimbursement are recognised in the profit
or loss in the period when the costs were incurred.
Grants relating to asset purchases are recognised as
deferred income on the statement of financial position
and transferred to the profit or loss evenly over the
expected life of those assets.
Government assistance is not recognised until there is
reasonable assurance that the Group will be eligible
for the assistance and that the income will be received.
Government assistance which does not have conditions
attached specifically relating to operating activities
is recognised as income when it can be reasonably
assured that it will be received.
Certain forms of government assistance cannot
reasonably have a value placed upon them. The nature
and extent of the government assistance is disclosed as
well as reference to any contingent component that has
not been recognised as the end of the reporting period.
Research and Development tax incentive is treated as
government assistance.
(e) Income Tax
Income tax expense represents the sum of the tax
currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from profit before tax
as reported in the consolidated statement of profit or
loss and other comprehensive income because of items
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible. The Group’s current tax is calculated using
tax rates that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the consolidated financial statements and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is
probable that taxable profits will be available against
which those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from the
initial recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. In
addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition
of goodwill.
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting
period. The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow
from the manner in which the Group expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
(f) Business Combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value which is
calculated as the sum of the acquisition-date fair values
of assets transferred by the Group, liabilities incurred
by the Group to the former owners of the acquiree and
the equity instruments issued by the Group in exchange
for control of the acquiree. Acquisition-related costs
are recognised in profit or loss as incurred.
Deferred tax liabilities and assets are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax are recognised in profit
or loss, except when they relate to items that are
recognised in other comprehensive income or directly
in equity, in which case the current and deferred tax
are also recognised in other comprehensive income
or directly in equity, respectively. Where current tax
or deferred tax arises from the initial accounting for a
business combination, the tax effect is included in the
accounting for the business combination.
(i) Tax Consolidation Legislation
Bionomics and its wholly-owned Australian
controlled entities have implemented the tax
consolidation legislation effective 31 December 2005.
The head entity, Bionomics, and the controlled
entities in the tax consolidated group account for
their own current and deferred tax amounts. These
tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand-alone
taxpayer in its own right.
In addition to its own current and deferred tax
amounts, Bionomics also recognises the current
tax liabilities (or assets) and the deferred tax assets
arising from unused tax losses and unused tax
credits assumed from controlled entities in the tax
consolidated group.
Assets or liabilities arising under tax funding
agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to
other entities in the group.
Any difference between the amounts assumed and
amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or
distribution from) wholly-owned tax consolidated
entities.
47
At the acquisition date, the identifiable assets acquired
and the liabilities assumed are recognised at their fair
value, except that:
ª deferred tax assets or liabilities and assets or
liabilities related to employee benefit arrangements
are recognised and measured in accordance with
AASB 112 ‘Income Taxes’ and AASB 119 ‘Employee
Benefits’ respectively;
ª liabilities or equity instruments related to share-
based payment arrangements of the acquiree or
share-based payment arrangements of the Group
entered into to replace share-based payment
arrangements of the acquiree are measured in
accordance with AASB 2 ‘Share-based Payment’ at
the acquisition date; and
ª assets (or disposal groups) that are classified as held
for sale in accordance with AASB 5 ‘Non-current
Assets Held for Sale and Discontinued Operations’
are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value
of the acquirer’s previously held equity interest in the
acquiree (if any) over the net of the acquisition-date
amounts of the identifiable assets acquired and the
liabilities assumed. If, after reassessment, the net of
the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of
the consideration transferred, the amount of any non-
controlling interests in the acquiree and the fair value of
the acquirer’s previously held interest in the acquiree (if
any), the excess is recognised immediately in profit or
loss as a bargain purchase gain.
Non-controlling interests that are present ownership
interests and entitle their holders to a proportionate
share of the entity’s net assets in the event of liquidation
may be initially measured either at fair value or at the
non-controlling interests’ proportionate share of the
recognised amounts of the acquiree’s identifiable net
assets. The choice of measurement basis is made on
a transaction-by-transaction basis. Other types of
non-controlling interests are measured at fair value
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
or, when applicable, on the basis specified in another
Standard.
Where the consideration transferred by the Group
in a business combination includes assets or
liabilities resulting from a contingent consideration
arrangement, the contingent consideration is measured
at its acquisition-date fair value. Changes in the fair
value of the contingent consideration that qualify
as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments
against goodwill. Measurement period adjustments
are adjustments that arise from additional information
obtained during the ‘measurement period’ (which
cannot exceed one year from the acquisition date) about
facts and circumstances that existed at the acquisition
date.
The subsequent accounting for changes in the fair
value of contingent consideration that do not qualify
as measurement period adjustments depends on how
the contingent consideration is classified. Contingent
consideration that is classified as equity is not
remeasured at subsequent reporting dates and its
subsequent settlement is accounted for within equity.
Contingent consideration that is classified as an asset
or liability is remeasured at subsequent reporting dates
in accordance with AASB 139, or AASB 137 ‘Provisions,
Contingent Liabilities and Contingent Assets’, as
appropriate, with the corresponding gain or loss being
recognised in profit or loss.
Where a business combination is achieved in stages,
the Group’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition
date (ie the date when the Group attains control) and
the resulting gain or loss, if any, is recognised in profit
or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously
been recognised in other comprehensive income are
reclassified to profit or loss where such treatment
would be appropriate if that interest were disposed of.
If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the combination occurs, the Group reports
provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts
are adjusted during the measurement period (see
above), or additional assets or liabilities are recognised,
to reflect new information obtained about facts and
circumstances that existed as of the acquisition date
that, if known, would have affected the amounts
recognised as of that date.
(g) Impairment of Tangible and Intangible Assets
Other Than Goodwill
At the end of each reporting period, the Group reviews
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent
of the impairment loss (if any). When it is not possible
to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of
the cash generating unit to which the asset belongs.
When a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated to
individual cash generating units, or otherwise they are
allocated to the smallest group of cash generating units
for which a reasonable and consistent allocation basis
can be identified.
A Cash Generating Unit (CGU) is the smallest
identifiable group of assets that generates cash
flow that are largely independent of cash flows from
other assets or group of assets. The cash generating
units are defined as a research program that has the
potential to be commercialised at some point in the
future. Achievement of certain milestones within the
research program will determine when a CGU comes
into existence.
Intangible assets with indefinite useful lives are tested
for impairment at least annually, and whenever there is
an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less
costs to sell and value in use. 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 assessments of the time value of
money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash
generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount
does not exceed the carrying amount that would
have been determined had no impairment loss been
recognised for the asset (or cash generating unit)
in prior years. A reversal of an impairment loss is
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
(h) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other
short term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value and
bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the statement of
financial position.
(i) Trade Receivables
All trade debtors are recognised at the fair value of
amounts receivable as they are due for settlement no
more than 30 days from the date of recognition.
Collectability of trade debtors is reviewed on an ongoing
basis. Debts which are known to be uncollectible are
written off. A provision for doubtful debts is raised
when some doubt as to collection exists. The amount
of the provision is the difference between the carrying
amount and the present value of future cash flows,
discounted at the effective interest rate. The amount of
the provision is recognised in profit or loss.
(j) Inventories
Raw materials and stores are stated at the lower of cost
and net realisable value.
(k) Property, Plant and Equipment
Plant and equipment are stated at cost less
accumulated depreciation or accumulated impairment
losses, where applicable.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their
useful lives, using the diminishing value or straight-line
methods, depending on the type of asset. The estimated
useful lives, residual values and depreciation method
are reviewed at the end of each reporting period.
An item of property, 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
the disposal or retirement of an item of property, plant
and equipment is determined as the difference between
the sales proceeds and the carrying amount of the
asset and is recognised in profit or loss.
49
The depreciation rates for each class of depreciable
assets are:
ª administrative plant & equipment
ª scientific plant & equipment
ª refrigeration plant and equipment
20 – 40%
20 – 40%
33%
(l) Financial Assets
Financial assets are classified into the following
specified categories: financial assets ‘at a fair value
through profit or loss’ (FVTPL), ‘held-to-maturity’
investments, ‘available-for-sale’ (AFS) financial assets
and ‘loans and receivables’. The classification depends
on the nature and purpose of the financial assets and
is determined at the time of initial recognition. All
regular way purchases or sales of financial assets are
recognised and derecognised on a trade date basis.
Regular way purchases or sales are purchases or sales
of financial assets that require delivery of assets within
the time frame established by regulation or convention
in the marketplace.
(i) Loans and Receivables
Trade receivables, loans and other receivables
that have fixed or determinable payments that are
not quoted in an active market are classified as
‘loans and receivables’. Loans and receivables are
measured at amortised cost using the effective
interest method less impairment.
Interest income is recognised by applying the
effective interest rate, except for short term
receivables when the effect of discounting is
immaterial.
(ii) Impairment of Financial Assets
Financial assets, other than those at fair value
through profit or loss, are assessed for indicators of
impairment at each reporting date. Financial assets
are impaired where there is objective evidence that
as a result of one or more events that occurred
after the initial recognition of the financial asset the
estimated future cash flows of the investment have
been impacted.
For financial assets carried at amortised cost, the
amount of the impairment is the difference between
the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original
effective interest rate.
The carrying amount of financial assets including
uncollectible trade receivables is reduced by the
impairment loss through the use of an allowance
account. Subsequent recoveries of amounts previously
written off are credited against the allowance account.
Changes in the carrying amount of the allowance
account are recognised in profit or loss.
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
(m) Intangible Assets
(i) Intellectual Property
Acquired intellectual property is recognised as
an asset at cost and amortised over its useful life.
Intellectual property with a finite life is amortised
on a straight line basis over that life. Intellectual
property with an indefinite useful life is subjected to
an annual impairment review. There is currently no
intellectual property with an indefinite life.
Current useful life of all existing intellectual
property is in the range of 5 to 20 years.
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at each
balance date.
(ii) Goodwill
Goodwill arising on an acquisition of a business
is carried at cost as established at the date of the
acquisition of the business (see 1(f) above) less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill
is allocated to each of the Group’s cash generating
units (or groups of cash generating units) that
is expected to benefit from the synergies of the
combination.
A cash generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the
cash generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to
the unit and then to the other assets of the unit pro
rata based on the carrying amount of each asset
in the unit. Any impairment loss for goodwill is
recognised directly in profit or loss. An impairment
loss recognised for goodwill is not reversed in
subsequent periods.
On disposal of the relevant cash generating unit, the
attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
(iii) Intangible assets acquired in a business
combination
Intangible assets acquired in a business combination
and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date
(which is regarded as their cost).
Subsequent to initial recognition, intangible assets
acquired in a business combination are reported at
cost less accumulated amortisation and
accumulated impairment losses, on the same basis
as intangible assets that are acquired separately.
(n) Research and Development
Expenditure on research activities, undertaken with
the prospect of obtaining new scientific or technical
knowledge and understanding, is recognised as an
expense when it is incurred.
(o) Trade and Other Payables
These amounts represent liabilities for goods and
services provided to the Group prior to the end of
financial year which are unpaid. The amounts are
unsecured and are usually paid within 45 days of
recognition.
(p) Employee Benefits
(i) Short-term and Long-term employee benefits
A liability is recognised for benefits accruing to
employees in respect of wages and salaries, annual
leave, long service leave, and sick leave when it is
probable that settlement will be required and they
are capable of being measured reliably. Liabilities
recognised in respect of short-term employee
benefits, are measured at their nominal values using
the remuneration rate expected to apply at the time
of settlement. Liabilities recognised in respect of
long term employee benefits are measured as the
present value of the estimated future cash outflows
to be made by the Group in respect of services
provided by employees up to reporting date.
(ii) Retirement benefits costs
Retirement benefits are contributions made to
employee superannuation funds and are charged
as expenses when incurred. These contributions
are made to external superannuation funds and are
not defined benefits programs. Consequently there
is no exposure to market movements on employee
superannuation liabilities or entitlements.
(iii) Share-based Payments
Share-based compensation benefits are provided to
employees via the Bionomics ESOP and an Employee
Share Plan.
The fair value of shares issued to employees for
no cash consideration under the Employee Share
Plan is recognised as an employee benefits expense
with a corresponding increase in equity. The fair
value is measured at grant date and recognised
over the period during which the employees become
unconditionally entitled to the shares.
The Bionomics ESOP was approved by the Board and
shareholders in 2011. Staff eligible to participate
in the plan are those who have been a full-time or
part-time employee of the Company for a period
of not less than six months or a director of the
Company. Options are granted under the plan for no
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONT.
consideration and vest equally over five years, unless
they are bonus options which vest immediately.
The amounts disclosed as remuneration relating to
options are the assessed fair values at grant date
of those options allocated equally over the period
from grant date to vesting date. Fair values at grant
date are independently determined using a Black-
Scholes option pricing model that takes into account
the exercise price, the term of the option, the vesting
and performance criteria, the impact of dilution, the
non-tradeable nature of the option, the share price at
grant date, expected price volatility of the underlying
share, the expected dividend yield and the risk-free
interest rate for the term of the option.
Share options that have been issued, but due to
having performance criteria, have not yet been
granted or vested, are required to have their fair
value estimated at the end of the reporting period
and recognised as an expense relating to the period
in which the services were performed.
(q) Borrowings (other financial liabilities)
Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using
the effective interest method.
Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the balance
sheet date.
(r) Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or
sale.
charges, are included in other long term payables.
Each lease payment is allocated between the liability
and finance charges so as to achieve a constant rate on
the finance balance outstanding. The interest element
of the finance cost is charged to the profit or loss over
the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability
for each period. The property, plant and equipment
acquired under finance leases is depreciated over the
shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases (net of any incentives received from
the lessor) are charged to profit or loss on a straight-
line basis over the period of the lease.
Lease income from operating leases is recognised in
income on a straight-line basis over the lease term.
(t) Contributed Equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue
of new shares or options, or for the acquisition of a
business, are deducted directly from equity.
(u) Earnings/(Loss) per Share
(i) Basic Earnings/(Loss) per Share
Basic earnings/(loss) per share is calculated by
dividing the profit/(loss) after income tax attributable
to equity holders of the company, excluding any costs
of servicing equity other than ordinary shares, by
the weighted average number of ordinary shares
outstanding during the year, adjusted for bonus
elements in ordinary shares issued during the year.
(ii) Diluted Earnings/(Loss) per Share
Diluted earnings/(loss) per share adjusts the figures
used in the determination of basic earnings per
share to take into account the after income tax effect
of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted
average number of shares assumed to have been
issued for no consideration in relation to options.
All other borrowing costs are recognised in profit or
loss in the period in which they are incurred.
(s) Leases
Leases of property, plant and equipment where the
Group has substantially all the risks and rewards of
ownership are classified as finance leases. Finance
leases are capitalised at the lease’s inception at the
lower of the fair value of the leased property and
the present value of the minimum lease payments.
The corresponding rental obligations, net of finance
(v) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of
the amount of associated GST, unless the GST incurred
is not recoverable from the taxation authority. In this
case it is recognised as part of the cost of acquisition of
the asset or as part of the expense.
Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation
authority is included with other receivables or payables
in the statement of financial position.
51
Valuation of Intangible Asset and Contingent
Consideration on Acquisition of Eclipse Therapeutics, Inc
In accordance with Accounting Standard AASB 3
‘Business Combinations’ and as detailed in Note 30,
the Company has determined, based on the directors’
best estimate the fair value of the consideration
transferred, intangible assets (including, but not limited
to intellectual property, goodwill and deferred tax).
Revenue for Licensing and Research Arrangements
The Group enters into arrangements for licensing and
research. For the financial year ended 30 June 2014,
Note 4 represents the fair value of license fees received
from Development and Licensing Agreements for the
exclusive use of the Group’s intellectual property.
The Group has no remaining obligations to perform in
respect of this fee. Management analyses the separate
elements of each contract to determine at which
stage revenue from that element would need to be
recognised.
NOTE 3: SEGMENT INFORMATION
Information reported to the chief operating decision
maker for the purposes of resource allocation and
assessment of segment performance focuses on the
nature of work processes performed. The Group’s
reportable segments under AASB 8 are:
ª Drug discovery
ª Drug development
ª Contract services
Drug discovery is the creation and ongoing testing
of compounds to determine the best compound that
matches the product profile. Drug development is
defined as the ongoing testing including clinical trials
of the best compound with a view to commercialisation
of the compound. Contract services is the provision
of scientific services on a fee for service basis to both
external and internal customers. Information regarding
these segments is presented over the page.
Cash flows are presented on a gross basis. The GST
component of cash flow arising from investing or
financing activities which are recoverable from, or
payable to the taxation authority, are presented as
operating cash flow.
NOTE 2: CRITICAL ACCOUNTING ESTIMATES
AND JUDGEMENTS
In the application of the Group’s accounting policies,
which are described in Note 1, the directors are
required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are
based on historical experience and other factors that
are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that
period or in the period of the revision and future periods
if the revision affects both current and future periods.
(a) Critical Accounting Estimates and Judgements
The Group makes estimates and assumptions
concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that
have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities are
discussed below.
Estimated Impairment of Goodwill and Intangibles
Determining whether goodwill and intangibles are
impaired requires an estimation of the value in use of
the cash generating units to which goodwill has been
allocated. The value in use calculation requires the
entity to estimate the future cash flows expected to
arise from the cash generating units and a suitable
discount rate in order to calculate present value.
The carrying amount of goodwill at balance date was
$9,488,432 (2013: $5,147,990).
The total carrying amount of intangibles, including
Goodwill, at balance date was $24,714,188 (2013:
$22,052,744).
No impairment losses have been recognised in the
current or previous financial years. Impairment
assumptions are disclosed in Note 13.
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 3: SEGMENT INFORMATION CONT.
(a) Segment Revenues and Results
The following is an analysis of the Group’s revenue and results by reportable operating segment for the periods
under review:
Drug discovery
Drug development
Contract services
SEGMENT REVENUE
YEAR ENDED
SEGMENT PROFIT
YEAR ENDED
30 JUNE 2014
$
30 JUNE 2013
$
30 JUNE 2014
$
30 JUNE 2013
$
18,034,318
345,044
9,750,077
(5,643,324)
56,197
1,452,602
(2,086,591)
(3,640,544)
1,762,379
3,076,716
(92,570)
833,057
19,852,894
4,874,362
7,570,916
(8,450,811)
Less: Intercompany revenue included in
contract services
(654,534)
(2,040,591)
-
-
Investment & other revenue
723,146
890,398
723,146
890,398
19,921,506
3,724,169
8,294,062
(7,560,413)
Unallocated financing costs
Central administration costs
Profit/(Loss) before income tax (continuing operations)
(601,070)
(68,703)
(3,746,047)
(2,334,059)
3,946,945
(9,963,175)
Revenue reported above for Contract services includes intersegment sales. There were no intersegment sales for
the other reportable segments.
Segment profit represents the result for each segment without allocation of central administration costs and
investment and other revenue.
(b) Segment Assets and Liabilities
The following is an analysis of the Group’s assets and liabilities by reportable operating segment:
ASSETS
Drug discovery
Drug development
Contract services
Unallocated assets
Total assets
LIABILITIES
Contract services (excluding intercompany liabilities)
Unallocated liabilities
Total liabilities
30 JUNE 2014
$
30 JUNE 2013
$
41,230,720
20,260,167
11,745,021
10,131,324
1,371,560
825,460
54,347,301
31,216,951
10,713,316
22,394,141
65,060,617
53,611,092
979,488
835,940
19,262,522
11,368,169
20,242,010
12,204,109
Assets used jointly by reporting segments are allocated on the basis of employee numbers of the individual
reportable segment.
The Board receive information on liabilities for the Group as a whole as well as liability information for the Contract
services segment.
53
NOTE 3: SEGMENT INFORMATION CONT.
(b) Segment Assets and Liabilities CONT.
The Board receive information on non-current assets for the Group as a whole as well as non-current asset
information for the Contract services segment. Additions to non-current assets:
Contract services
Unallocated
(c) Other Segment Information
The segment result above has been determined after including the following items:
Drug discovery
Drug development
Contract services
Unallocated
30 JUNE 2014
$
30 JUNE 2013
$
6,822
209,776
216,598
15,489
288,600
304,089
DEPRECIATION AND
AMORTISATION
YEAR ENDED
30 JUNE 2014
$
30 JUNE 2013
$
1,033,781
208,437
236,841
21,877
770,673
248,597
203,579
22,966
1,500,936
1,245,815
(d) Revenue from Major Products and Services
The following is an analysis of the Group’s external revenue from its major products and services:
Contract services
Collaboration income
Interest
Other (Note 4)
30 JUNE 2014
$
30 JUNE 2013
$
1,107,845
18,046,709
563,574
203,378
1,036,125
1,162,117
644,626
881,301
19,921,506
3,724,169
(e) Geographical Information
The Group operates in three geographical areas, Australia, France and United States of America. The Group’s
external revenue and information about its non-current assets* by geographical segment are detailed below:
Australia
France
USA
REVENUE FROM
EXTERNAL CUSTOMERS
YEAR ENDED
NON-CURRENT
ASSETS*
YEAR ENDED
30 JUNE 2014
$
30 JUNE 2013
$
30 JUNE 2014
$
30 JUNE 2013
$
18,813,661
1,107,845
-
2,688,044
1,036,125
-
24,797,147
22,054,855
395,887
349,515
609,491
231,248
19,921,506
3,724,169
25,542,549
22,895,594
*Non-current assets excluding financial instruments and deferred tax assets.
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 3: SEGMENT INFORMATION CONT.
(f) Information about Major Customers
Included in revenues for Drug discovery are revenues of $18,046,709 (2013: $384,170) from one party and in Drug
development $nil (2013: $1,394,944) from one party. No other customer contributed 10% or more to the Group’s
revenue for both 2014 and 2013.
NOTE 4: REVENUE AND OTHER INCOME
Revenue from continuing operations
Revenue from rendering of services
Royalties
Collaboration income
Interest income
Rent income
Other revenue
Other income from continuing operations
Foreign Government grant
R&D Tax Incentive
There are no unfulfilled conditions or other contingencies attaching to these grants.
NOTE 5: EXPENSES
Loss before income tax benefit includes the following specific expenses:
Financing costs
- Interest expense on bank and other loans
- Interest expense on contingent consideration
- Interest obligations under finance leases
Depreciation
- Administrative plant and equipment
- Scientific plant and equipment
Amortisation of non-current assets
- Intellectual property
Rental expense on operating leases
- Minimum lease payments
55
2014
$
2013
$
1,095,356
1,032,144
56,197
57,658
18,046,709
1,162,117
563,574
159,670
-
644,626
222,561
605,063
19,921,506
3,724,169
118,892
-
7,505,598
8,101,787
7,624,490
8,101,787
2014
$
2013
$
59,758
522,266
27,478
609,502
35,705
189,517
225,222
41,684
-
36,514
78,198
37,817
200,088
237,905
1,275,714
1,007,910
1,027,921
927,682
NOTE 5: EXPENSES CONT.
Employment benefit expenses of:
- Wages and salaries
- Superannuation
- Share-based payments
Foreign currency loss
Loss on disposal of assets
- Plant and equipment
NOTE 6: INCOME TAXES
(a) Income Tax Recognised in Profit or Loss
Current tax
In respect of the current year
Deferred tax
Recognised in current year
Total income tax expense/(benefit)
(b) Reconciliation to Accounting Loss
Profit/(loss) from continuing operations
2014
$
2013
$
5,610,406
5,092,005
235,220
150,923
496,730
136,908
5,996,549
5,725,643
(778)
836,584
6,765
184
2014
$
2013
$
740,328
(32,490)
-
740,328
70,665
38,175
3,946,945
(9,963,175)
Tax at the Australian tax rate of 30% (2013: 30%)
1,184,083
(2,988,953)
Tax effect of non-deductible/non-assessable amounts
Amortisation of intangibles
Foreign exchange reversed on consolidation
Exempt income from government assistance
Entertainment
Share-based payments
Research and development expenditure
Effect of different tax rates in other jurisdictions
Effect of unused tax losses, in the current period
Adjustment to prior year unused tax losses
Withholding Tax credits used
Tax benefit of research and development credit in France
101,893
13,679
101,893
52,678
(2,251,679)
(2,430,536)
2,116
45,277
249
41,072
5,000,837
4,661,493
(16,476)
13,928
(1,347,385)
1,009,323
(919,815)
905,390
(166,812)
740,328
(390,482)
-
(32,490)
38,175
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 6: INCOME TAXES CONT.
(c) Current Tax Balances
Tax refund receivable
(d) Deferred Tax Assets/Liabilities
2014
Loans and receivables
Prepayments/accrued income
PP & E
Share issue expenses
Intangible patents and trademarks
Other intangibles
Accrued expenses
Employee entitlements
Unused tax losses
Revenue
Withholding tax
Not recognised in current year
21,076,718
(5,756,462)
Net balance
-
-
2013
Loans and receivables
Other financial assets
Prepayments/accrued income
PP & E
Share issue expenses
Intangible patents and trademarks
Other intangibles
Accrued expenses
Employee entitlements
262,381
(32,133)
(10,870)
10,870
(2,655)
(22,451)
184,318
334,592
218,383
10,395
236,244
1,210,337
(2,327)
4,027
(38,419)
32,296
-
3,150
41,914
19,378
57
OPENING
BALANCE
$
CREDIT/
(CHARGED)
TO INCOME
$
CHARGED
TO EQUITY
$
ACQUIRED
THROUGH
BUSINESS
COMBINATION
$
230,248
(185,765)
(4,982)
1,126
(18,424)
18,640
145,899
204,337
366,888
218,383
13,545
278,158
92,421
-
19,357
31,159
1,229,715
181,275
19,785,507
(5,876,241)
61,496
(61,496)
19,847,003
(5,937,737)
2014
$
2013
$
244,965
244,965
36,648
36,648
CLOSING
BALANCE
$
44,483
(3,856)
216
350,236
-
-
-
-
(4,340,443)
(3,881,134)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
218,383
32,902
309,317
(2,929,453)
13,909,266
-
13,909,266
15,320,256
(4,340,443)
230,248
-
(4,982)
(18,424)
145,899
366,888
218,383
13,545
278,158
1,229,715
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
OPENING
BALANCE
$
CREDIT/
(CHARGED)
TO INCOME
$
CHARGED
TO EQUITY
$
ACQUIRED
THROUGH
BUSINESS
COMBINATION
$
CLOSING
BALANCE
$
NOTE 6: INCOME TAXES CONT.
Deferred Tax Assets/Liabilities CONT.
2013
Unused tax losses
Revenue
Withholding tax
19,854,143
(68,636)
213,015
(151,519)
20,067,158
(220,155)
Not recognised in current year
21,206,830
(130,112)
Net balance
70,665
(70,665)
(e) Unrecognised Temporary Differences (including Tax Losses)
The following deferred tax assets have not been brought to account as assets:
Unused revenue tax losses (no set expiry period)
Deductible temporary differences (no set expiry period)
Unused foreign withholding tax credits (expire July 2013)
-
-
-
-
-
-
-
-
-
-
19,785,507
61,496
19,847,003
21,076,718
-
2014
$
2013
$
13,909,266
19,785,507
1,410,990
1,229,715
-
61,496
15,320,256
21,076,718
(f) Tax Consolidation
Relevance of tax consolidation to the group
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under
Australian taxation law. Bionomics is the head entity in the tax-consolidated group. Tax expense/benefit, deferred
tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated
group are recognised in the separate financial statements of the members of the tax-consolidated group using
the ‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial
statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and
deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated
group are recognised by the Company (as head entity in the tax-consolidated group).
NOTE 7: CASH AND CASH EQUIVALENTS
2014
$
2013
$
Current
Cash at the end of the financial year as shown in the statements of cash flows is reconciled to items in the balance
sheet as follows:
Cash at bank and on hand
Deposits at call
4,516,447
5,187,222
4,229,776
16,115,867
Restricted deposits at call held as security and not available for use (see Note 15)
1,754,084
1,149,000
10,501,307
22,452,089
The Group holds restricted term deposits at call as security that are not available for use. The weighted average
interest rate on these deposits is 3.55% per annum (2013: 3.94% per annum). The maturity dates range between
1 and 3 months from the end of the reporting period. None of these assets had been past due or impaired at the
end of the reporting period.
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 8: TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Allowance for doubtful debts
Other receivables
2014
$
2013
$
20,581,109
430,121
-
20,581,109
159,238
-
430,121
275,601
20,740,347
705,722
The average credit period on sales of goods is 60 days. No interest is charged on trade receivables for the first 60
days from the date of the invoice. Thereafter, interest is charged at 2% per annum on the outstanding balance. The
Group has not recognised an allowance for doubtful debts. Allowances for doubtful debts are recognised against
trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of
the counterparty and an analysis of the counterparty’s current financial position.
Before accepting any new customer, the Group reviews the quality of the customer, and this is reviewed prior to
commencing new major work. Of the trade receivables balance at the end of the year, $20.3 million (30 June 2013:
$nil) is due from Merck, the Group’s largest customer. There are no other customers who represent more than 5%
of the total balance of trade receivables.
Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of
the reporting period for which the Group has not recognised an allowance for doubtful debts because there has not
been a significant change in credit quality and the amounts (which include interest accrued after the receivable is
more than 60 days outstanding) are still considered recoverable.
Age of receivables that are past due but not impaired
60-90 days
90-120 days
Total
Average age (days)
2014
$
13,474
-
13,474
94
2013
$
-
-
-
N/A
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of
the trade receivable from the date credit was initially granted up to the end of the reporting period. Typically the
concentration of credit risk is limited due to the fact that the customer base is large and unrelated, except as noted
above where Merck represents 98% of the balance.
NOTE 9: INVENTORIES
Current
Raw materials
59
2014
$
2013
$
83,423
98,526
NOTE 10: OTHER ASSETS
Current
Prepayments
2014
$
2013
$
433,917
422,513
Accrued interest and grants receivable/government assistance (Note 4)
7,514,109
7,000,000
7,948,026
7,422,513
NOTE 11: SUBSIDIARIES
Details of the Group’s subsidiaries at the end of the reporting period are as follows:
ENTITY
Head entity
Bionomics Limited
Subsidiaries of Bionomics Limited:
PRINCIPAL ACTIVITY
COUNTRY OF
INCORPORATION
2014
2013
PERCENTAGE OWNED
%
Research and Development
Australia
N/A
N/A
Neurofit SAS
Contract Research Organisation
France
Iliad Chemicals Pty Limited (i)
Asset owner
Australia
Bionomics Inc
Research and Development
United States
100
100
100
100
100
100
(i) This wholly-owned subsidiary has entered into a deed of cross guarantee with Bionomics Limited pursuant to
ASIC Class Order 98/1418 and is relieved from the requirement to prepare and lodge an audited financial report.
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
ADMINISTRATIVE
PLANT &
EQUIPMENT
$
SCIENTIFIC
PLANT &
EQUIPMENT
$
REFRIGERATION
PLANT &
EQUIPMENT
$
TOTAL
$
Cost at 30 June 2013
392,900
2,254,113
87,500
2,734,513
Additions
Disposals
Foreign currency exchange differences
29,158
(2,663)
22,743
274,931
(3,982)
11,342
-
-
-
304,089
(6,645)
34,085
Cost at 30 June 2013
442,138
2,536,404
87,500
3,066,042
Additions
Disposals
Foreign currency exchange differences
10,604
(20,604)
2,708
205,994
(80,060)
(2,242)
-
-
-
216,598
(100,664)
466
Cost at 30 June 2014
434,846
2,660,096
87,500
3,182,442
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 12: PROPERTY, PLANT AND EQUIPMENT CONT.
ADMINISTRATIVE
PLANT &
EQUIPMENT
$
SCIENTIFIC
PLANT &
EQUIPMENT
$
REFRIGERATION
PLANT &
EQUIPMENT
$
TOTAL
$
Accumulated depreciation at 30 June 2012
(294,146)
(1,579,620)
(87,500)
(1,961,266)
Disposals
Foreign currency exchange differences
Depreciation (Note 5)
2,596
(19,120)
(37,817)
3,865
(11,362)
(200,088)
-
-
-
6,461
(30,482)
(237,905)
Accumulated depreciation at 30 June 2013
(348,487)
(1,787,205)
(87,500)
(2,223,192)
Disposals
Foreign currency exchange differences
Depreciation (Note 5)
18,743
(437)
75,157
870
(35,705)
(189,517)
-
-
-
93,900
433
(225,222)
Accumulated depreciation at 30 June 2014
(365,886)
(1,900,694)
(87,500)
(2,354,081)
Net Carrying Amounts 30 June 2013
Net Carrying Amounts 30 June 2014
93,651
68,960
749,199
759,401
-
-
842,850
828,361
Non-current Assets Pledged as Security
Refer to Note 15 for information on non-current assets pledged as security by the Company.
NOTE 13: INTANGIBLE ASSETS
GOODWILL
$
INTELLECTUAL
PROPERTY
$
TOTAL
$
Gross carrying amount at 30 June 2012
5,147,990
6,655,082
11,803,072
Additions (Note 30)
Foreign currency exchange differences
Gross carrying amount at 30 June 2013
Additions (Note 30)
-
-
5,147,990
4,607,531
12,703,228
12,703,228
2,044,613
2,044,613
21,402,923
26,550,913
-
4,607,531
Foreign currency exchange differences
(267,089)
(409,977)
(677,066)
Gross carrying amount at 30 June 2014
9,488,432
20,992,946
30,481,378
Accumulated amortisation amount at 30 June 2012
Foreign currency exchange differences
Amortisation
Accumulated amortisation amount at 30 June 2013
Foreign currency exchange differences
Amortisation
Accumulated amortisation amount at 30 June 2014
Net carrying amount 30 June 2013
Net carrying amount 30 June 2014
All intangible assets are held in the consolidated entity.
61
-
-
-
-
-
-
-
(3,282,866)
(3,282,866)
(207,393)
(207,393)
(1,007,910)
(1,007,910)
(4,498,169)
(4,498,169)
6,693
6,693
(1,275,714)
(1,275,714)
(5,767,190)
(5,767,190)
5,147,990
16,904,754
22,052,744
9,488,432
15,225,756
24,714,188
NOTE 12: PROPERTY, PLANT AND EQUIPMENT CONT.
NOTE 13: INTANGIBLE ASSETS CONT.
ADMINISTRATIVE
SCIENTIFIC
REFRIGERATION
PLANT &
PLANT &
EQUIPMENT
EQUIPMENT
$
$
PLANT &
EQUIPMENT
Accumulated depreciation at 30 June 2012
(294,146)
(1,579,620)
(87,500)
(1,961,266)
Disposals
Foreign currency exchange differences
Depreciation (Note 5)
Disposals
Foreign currency exchange differences
2,596
(19,120)
(37,817)
18,743
(437)
3,865
(11,362)
(200,088)
75,157
870
Accumulated depreciation at 30 June 2013
(348,487)
(1,787,205)
(87,500)
(2,223,192)
Depreciation (Note 5)
(35,705)
(189,517)
Accumulated depreciation at 30 June 2014
(365,886)
(1,900,694)
(87,500)
(2,354,081)
Net Carrying Amounts 30 June 2013
Net Carrying Amounts 30 June 2014
93,651
68,960
749,199
759,401
$
-
-
-
-
-
-
-
-
TOTAL
$
6,461
(30,482)
(237,905)
93,900
433
(225,222)
842,850
828,361
a) Intellectual Property
The intellectual property includes the company’s Multicore® technology, its BNC105 compound, its BNC101
compound and its Kv1.3 compound. Each item is carried at its fair value as at its date of acquisition, less
accumulated amortisation charges. The remaining amortisation periods for each item are between 5 and 20 years.
(b) Impairment Tests
Management tests annually whether goodwill or indefinite life intangibles have suffered any impairment, in
accordance with the accounting policy stated in Note 1(m)(i) and (m)(ii). Impairment testing is performed on each
of the cash generating units, which form the reporting segments identified in Note 3. The reporting segments
identified in Note 3 are made up of multiple cash generating units, and are the same as the operating segments.
Drug Discovery is the creation and ongoing testing of compounds to determine the best compound that matches the
product profile. Drug Development is the ongoing testing, including clinical trials, of the best compound with a view
to commercialisation of the compound. A research program that meets these definitions may be included as a cash
generating unit which is combined with other relevant CGU’s to form the reporting segment for intangible asset
impairment testing purposes. Goodwill is allocated to the Drug Development group of CGU’s, which is consistent
with the way management monitors goodwill at the operating segment level.
Determining whether goodwill or intangibles are impaired requires an estimation of the value in use of the cash
generating units to which goodwill or indefinite life intangibles have been allocated. The value in use calculation
requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable
discount rate in order to calculate present value over the expected life cycle of the commercialisation of the assets
- in line with the average patent life and development cycle of the drug compound. A pre-tax discount rate of 25%
has been used.
Allocation of Goodwill to group CGU’s
The carrying amount of goodwill was allocated to the following groups of CGU’s:
Drug discovery
Drug development
Contract services
2014
$
-
2013
$
-
9,488,432
5,147,990
-
-
Drug Discovery
The recoverable amount of this group of CGU’s is determined based on a value in use calculation which uses cash
flow projections based on standard industry agreements for drug compounds within the cash generating unit over a
period of up to 21 years covering drug discovery, drug development, approval and marketing and a discount rate of
25% per annum (2013: 25% per annum). The cash flow projections are weighted based on the probability of realising
projected milestone and royalties payments.
Management believes that the application of discounted cash flows of standard industry agreements for drug
compounds is reasonable to be applied to other compounds within the CGU at their respective development phases.
Management believes that any reasonably possible change in the key assumptions on which recoverable amount is
based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the CGU.
No growth rates have been included in the forecast. As the full development lifecycle has been taken into account
with the cashflows, no terminal value has been used.
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 13: INTANGIBLE ASSETS CONT.
Drug Development
The recoverable amount of this group of CGU’s is also determined based on a value in use calculation which uses
cash flow projections based on standard industry agreements for drug compounds within the cash generating
unit over a period of ten years covering drug development, approval and marketing, and a discount rate of 25%
per annum (2013: 25% per annum). The cash flow projections are weighted based on the probability of realising
projected milestone and royalties payments.
Management believes that the application of discounted cash flows of standard industry agreements for one drug
compound is reasonable to be applied to other compounds within the CGU at their respective development phases.
Management believes that any reasonably possible change in the key assumptions on which recoverable amount is
based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the CGU.
No growth rates have been included in the forecast. As the full development lifecycle has been taken into account
with the cashflows, no terminal value has been used.
Contract Services
There is no goodwill or indefinite life assets within this CGU. Management has reviewed the CGU and there are no
indicators of impairment.
NOTE 14: TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued expenses
Non-current
Other payables
2014
$
2013
$
2,663,395
3,272,242
1,374,659
1,011,367
4,038,054
4,283,609
310,794
306,410
The average credit period on purchases of goods is 45 days. No interest is paid on the trade payables. The Group
has financial risk management policies in place to ensure that all payables are paid within the credit timeframe
NOTE 15: BORROWINGS
Secured – at amortised cost
Finance lease liabilities (i)
Equipment mortgage (ii)
Bank loan (iii)
Disclosed in the financial statements as:
Current liabilities
Non-current liabilities
63
2014
$
2013
$
319,567
424,674
442,941
87,594
550,000
550,000
1,294,241
1,080,535
788,600
505,641
680,376
400,159
1,294,241
1,080,535
NOTE 15: BORROWINGS CONT.
(i) the lease lines are secured by the leased scientific equipment (refer Note 23) and have an average interest rate
of per annum 7.11% (2013: 7.11% per annum) and terms of three to five years.
(ii) equipment mortgage for US-based equipment with an interest rate of 3.25% and a two and a half year term.
(iii) the rolling commercial bill line is secured by a restricted deposit at call of $550,000 (2013: $550,000).
The unused facilities available at 30 June 2014 of the Group’s bank overdraft is $57,361 (2013: $56,980). There is no
unused facility in relation to the commercial bill line.
Interest Rate Risk
The Group’s exposure to interest rates and the effective weighted average interest rate by maturity period is set out
in Note 21.
NOTE 16: PROVISIONS
Current
Employee benefits
Non-current
Employee benefits
NOTE 17: OTHER LIABILITIES
Current
Unearned income
NOTE 18: ISSUED CAPITAL
(a) Issued and paid-up capital
Ordinary shares – fully paid
2014
$
2013
$
1,186,482
1,081,086
108,320
66,327
2014
$
2013
$
3,267,589
3,267,589
37,447
37,447
2014
SHARES
2013
SHARES
417,356,567
415,879,455
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 18: ISSUED CAPITAL CONT.
Movements in ordinary shares of the Company during the past two years were as follows:
DATE
DETAILS
30 June 2012 Closing balance
Share issue – ESOP option exercise
Share issue – ESOP option exercise
Share issue – ESOP option exercise
Share issue – ESOP option exercise
Share issue – ESOP option exercise
Share issue – ESOP option exercise
Share issue – ESOP option exercise
Share issue – acquisition
Share issue – entitlements issue
Share issue – entitlements issue costs
Shares to be issued – acquisition
Shares to be issued – acquisition
30 June 2013 Closing balance
Share issue – ESOP option exercise
Share issue – acquisition (paid in cash)
30 June 2014 Closing balance
NUMBER OF
SHARES
ISSUE
PRICE
0.13
0.22
0.24
0.29
0.30
0.34
0.36
0.32
0.36
0.32
0.32
345,384,619
340,000
20,526
110,000
122,500
200,000
150,000
15,000
19,112,575
45,634,962
1,197,322
3,591,951
415,879,455
1,488,242
(11,130)
417,356,567
$
87,834,778
44,200
4,516
26,400
35,525
60,000
51,000
5,400
6,116,024
16,428,586
(826,424)
383,143
1,149,424
111,312,572
412,661
(3,562)
111,721,671
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share
capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued
shares do not have a par value.
(b) Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to one vote and upon a poll each share is entitled to
one vote.
(c) Option Modification
The terms of the options under the Bionomics ESOP were modified at 30 June 2014 for all options on issue prior
to the fully underwritten 1:8 non-renounceable rights issue announced on 4 March 2013. The exercise price for all
outstanding options have now been adjusted under ASX Listing Rule 6.22 and are shown in the table below in this
Note 18(b)(i). The revaluation of these options resulted in a reduction in the expense of $217,963.
(d) Share Options
When exercised, each option is convertible into one ordinary share. The exercise price is based on the weighted
average price at which the company’s shares traded on the ASX during the seven trading days immediately before
the options are issued.
(i) The Bionomics ESOP
The terms and conditions of the Bionomics ESOP are summarised in Note 1(p) (iv). The following options listed
are outstanding at reporting date.
65
NOTE 18: ISSUED CAPITAL CONT.
GRANT DATE
Jan-05
Jan-06
May-06
Nov-06
Oct-07
Jan-08
Jul-08
Nov-08
Mar-09
Jun-09
Nov-09
Jul-10
Nov-10
Nov-11
Dec-11
Mar-12
EXPIRY DATE
Feb-15
Jan-15
Jan-16
Jul-15
Jul-16
Nov-14
Nov-15
Nov-16
Oct-14
Oct-15
Oct-16
Oct-17
Jan-15
Jan-16
Jan-17
Jan-18
Jul-15
Jul-17
Jul-18
Nov-14
Nov-15
Nov-16
Nov-17
Aug-14
Aug-15
Aug-16
Nov-14
Nov-15
Nov-16
Nov-17
Nov-18
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Jun-15
Jun-16
Jun-17
Jun-18
Jun-19
Nov-15
Nov-16
Nov-17
Nov-18
Nov-19
Jul-15
Jul-19
Jul-20
Nov-15
Nov-16
Nov-17
Nov-18
Nov-19
Nov-16
Nov-16
Aug-17
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
ORIGINAL
EXERCISE PRICE
$0.30
$0.24
$0.24
$0.22
$0.22
$0.30
$0.30
$0.30
$0.29
$0.29
$0.29
$0.29
$0.38
$0.38
$0.38
$0.38
$0.36
$0.36
$0.36
$0.30
$0.30
$0.30
$0.30
$0.37
$0.37
$0.37
$0.28
$0.28
$0.28
$0.28
$0.28
$0.29
$0.29
$0.29
$0.29
$0.29
$0.25
$0.25
$0.25
$0.25
$0.25
$0.30
$0.30
$0.30
$0.30
$0.30
$0.32
$0.32
$0.32
$0.31
$0.31
$0.31
$0.31
$0.31
$0.61
$0.61
$0.92
$0.52
$0.52
$0.52
$0.52
$0.52
$0.51
$0.51
$0.51
$0.51
$0.51
REVISED
EXERCISE PRICE
$0.2976
$0.2376
$0.2376
$0.2176
$0.2176
$0.2976
$0.2976
$0.2976
$0.2876
$0.2876
$0.2876
$0.2876
$0.3776
$0.3776
$0.3776
$0.3776
$0.3576
$0.3576
$0.3576
$0.2976
$0.2976
$0.2976
$0.2976
$0.3692
$0.3692
$0.3692
$0.2776
$0.2776
$0.2776
$0.2776
$0.2776
$0.2876
$0.2876
$0.2876
$0.2876
$0.2876
$0.2476
$0.2476
$0.2476
$0.2476
$0.2476
$0.2976
$0.2976
$0.2976
$0.2976
$0.2976
$0.3176
$0.3176
$0.3176
$0.3076
$0.3076
$0.3076
$0.3076
$0.3076
$0.6116
$0.6116
$0.9186
$0.5156
$0.5156
$0.5156
$0.5156
$0.5156
$0.5026
$0.5026
$0.5026
$0.5026
$0.5026
NUMBER
200,000
5,000
25,000
34,432
35,000
100,000
100,000
100,000
5,000
5,000
5,000
5,000
3,000
4,000
4,000
4,000
14,000
14,000
14,000
100,000
100,000
100,000
100,000
340,000
330,000
330,000
10,000
10,000
10,000
10,000
10,000
2,120
2,120
2,120
2,120
12,120
4,000
4,000
54,000
54,000
54,000
100,000
100,000
100,000
100,000
100,000
90,000
10,000
10,000
100,000
100,000
100,000
100,000
100,000
95,000
500,000
1,000,000
100,000
100,000
100,000
100,000
100,000
5,000
5,000
5,000
5,000
5,000
FAIR VALUE
AT GRANT DATE
$0.13
$0.15
$0.15
$0.13
$0.14
$0.13
$0.13
$0.13
$0.23
$0.23
$0.24
$0.25
$0.20
$0.21
$0.22
$0.23
$0.18
$0.19
$0.20
$0.10
$0.10
$0.11
$0.12
$0.08
$0.09
$0.10
$0.06
$0.05
$0.06
$0.06
$0.07
$0.06
$0.07
$0.07
$0.08
$0.08
$0.13
$0.13
$0.14
$0.14
$0.15
$0.11
$0.12
$0.13
$0.14
$0.14
$0.12
$0.13
$0.14
$0.09
$0.10
$0.11
$0.12
$0.12
$0.15
$0.15
$0.03
$0.23
$0.25
$0.26
$0.27
$0.28
$0.20
$0.21
$0.22
$0.23
$0.24
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 18: ISSUED CAPITAL CONT.
REVISED
EXERCISE PRICE
$0.3356
$0.3356
$0.3356
$0.3356
$0.3356
$0.2846
$0.2516
$0.2516
$0.2516
$0.2516
$0.2846
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.4176
$0.4176
$0.4176
$0.4176
$0.4176
EXPIRY DATE
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Aug-17
Aug-19
Aug-20
Aug-21
Aug-22
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Mar-19
Mar-20
Mar-21
Mar-22
Mar-23
May-19
May-20
May-21
May-22
May-23
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Aug-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-23
Dec-18
Dec-18
Dec-19
Dec-19
Dec-20
Dec-20
Dec-21
Dec-21
Dec-22
Dec-22
Dec-23
Mar-20
Mar-21
Mar-22
Mar-23
Mar-24
ORIGINAL
EXERCISE PRICE
$0.34
$0.34
$0.34
$0.34
$0.34
$0.29
$0.25
$0.25
$0.25
$0.25
$0.29
$0.32
$0.32
$0.32
$0.32
$0.32
$0.32
$0.32
$0.32
$0.32
$0.32
$0.42
$0.42
$0.42
$0.42
$0.42
$0.37
$0.37
$0.37
$0.37
$0.37
$0.39
$0.39
$0.39
$0.39
$0.39
$0.33
$0.60
$0.60
$0.60
$0.60
$0.60
$0.33
$0.72
$0.72
$0.69
$0.72
$0.69
$0.72
$0.69
$0.72
$0.69
$0.69
$0.68
$0.68
$0.68
$0.68
$0.68
FAIR VALUE
AT GRANT DATE
$0.11
$0.12
$0.13
$0.13
$0.14
$0.09
$0.14
$0.15
$0.15
$0.16
$0.11
$0.12
$0.13
$0.14
$0.14
$0.15
$0.15
$0.16
$0.16
$0.17
$0.18
$0.14
$0.15
$0.16
$0.17
$0.18
$0.15
$0.16
$0.17
$0.18
$0.19
$0.14
$0.15
$0.16
$0.17
$0.18
$0.27
$0.32
$0.34
$0.35
$0.37
$0.38
$0.33
$0.23
$0.25
$0.26
$0.27
$0.28
$0.29
$0.29
$0.30
$0.31
$0.32
$0.25
$0.26
$0.28
$0.29
$0.30
NUMBER
13,000
13,000
13,000
13,000
13,000
140,000
4,000
4,000
4,000
4,000
65,000
200,000
200,000
200,000
200,000
200,000
5,000
5,000
5,000
5,000
5,000
50,000
50,000
50,000
50,000
50,000
114,000
114,000
114,000
114,000
114,000
150,000
150,000
150,000
150,000
150,000
338,750
16,600
16,600
16,600
16,600
16,600
55,000
100,000
100,000
4,000
100,000
4,000
100,000
4,000
100,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
9,458,782
GRANT DATE
Jun-12
Aug-12
Dec-12
Mar-13
May-13
Jun-13
Aug-13
Oct-13
Dec-13
Mar-14
67
NOTE 18: ISSUED CAPITAL CONT.
2014
2013
Reconciliation of ESOP:
NUMBER OF
OPTIONS
WEIGHTED
AVERAGE
EXERCISE
PRICE
Opening balance at beginning of financial year
10,262,274
Granted during the financial year
Forfeited during the financial year
Exercised during the financial year
Expired during the financial year
Closing balance at 30 June
1,016,750
(20,000)
(1,488,242)
(312,000)
9,458,782
$0.41
$0.56
$0.52
$0.28
$0.29
$0.45
ESOP options exercised during the financial year:
NUMBER
OF OPTIONS
8,865,900
2,880,000
(50,000)
(958,026)
(475,600)
10,262,274
WEIGHTED
AVERAGE
EXERCISE
PRICE
$0.40
$0.35
$0.34
$0.24
$0.30
$0.41
SERIES
01-May-06
01-Sep-04
12-Jan-09
12-Jan-09
13-Mar-09
26-Sep-08
13-Jan-06
12-Jan-09
15-Jun-09
01-Aug-12
01-May-06
11-Jan-08
12-Jan-09
15-Jun-09
21-Nov-08
01-May-06
05-Nov-08
15-Jun-09
12-Jul-10
01-May-06
15-Jun-09
05-Nov-08
13-Jan-06
16-Nov-06
12-Jan-09
20-Aug-12
21-Nov-08
15-Jun-09
13-Jan-06
12-Jan-09
13-Jan-06
26-Sep-08
21-Nov-08
12-Jan-09
13-Jan-04
11-Jan-08
12-Jan-09
21-Jan-05
01-Jul-08
01-May-06
11-Jan-08
15-Jun-09
01-Jul-08
Grand Total
NUMBER
EXERCISED
20,000
100,000
5,000
5,000
40,000
16,000
30,000
10,000
100,000
60,000
65,000
1,000
5,000
29,864
10,000
25,568
95,000
27,636
30,000
129,474
47,200
100,000
5,000
100,000
5,000
4,000
7,143
500
10,000
20,000
60,000
4,000
2,857
20,000
5,000
3,000
45,000
200,000
20,000
5,000
1,000
5,000
14,000
1,488,242
EXERCISE
PRICE
$0.22
$0.24
$0.2976
$0.2976
$0.29
$0.34
$0.24
$0.2976
$0.25
$0.287
$0.22
$0.38
$0.2976
$0.25
$0.28
$0.22
$0.3716
$0.25
$0.32
$0.22
$0.25
$0.30
$0.24
$0.30
$0.2976
$0.254
$0.28
$0.25
$0.24
$0.2976
$0.24
$0.34
$0.28
$0.2976
$0.30
$0.38
$0.2976
$0.30
$0.36
$0.22
$0.38
$0.25
$0.36
EXERCISE
DATE
5-Jul-13
1-Aug-13
16-Aug-13
16-Aug-13
16-Aug-13
21-Aug-13
22-Aug-13
22-Aug-13
22-Aug-13
26-Aug-13
6-Sep-13
6-Sep-13
6-Sep-13
6-Sep-13
16-Sep-13
24-Sep-13
24-Sep-13
24-Sep-13
24-Sep-13
1-Oct-13
1-Oct-13
8-Oct-13
16-Oct-13
16-Oct-13
16-Oct-13
16-Oct-13
2-Dec-13
2-Dec-13
9-Dec-13
9-Dec-13
18-Dec-13
18-Dec-13
18-Dec-13
18-Dec-13
24-Dec-13
24-Dec-13
24-Dec-13
17-Feb-14
28-Mar-14
27-May-14
27-May-14
27-May-14
30-Jun-14
SHARE PRICE AT
EXERCISE DATE
$0.370
$0.550
$0.600
$0.600
$0.600
$0.635
$0.600
$0.600
$0.600
$0.595
$0.645
$0.645
$0.645
$0.645
$0.685
$0.730
$0.730
$0.730
$0.730
$0.765
$0.765
$0.760
$0.840
$0.840
$0.840
$0.840
$0.850
$0.850
$0.765
$0.765
$0.700
$0.700
$0.700
$0.700
$0.730
$0.730
$0.730
$0.665
$0.550
$0.420
$0.420
$0.420
$0.550
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 18: ISSUED CAPITAL CONT.
ESOP options exercised during the financial year:
At 30 June 2014 when the options were revalued, an amount of $4,542.73 was refundable in relation to overpayment
of the above options (see Note 18(c)).
Unlisted options vested and exercisable at the reporting date
2014
NUMBER
2013
NUMBER
6,269,782
6,617,154
(iii) Weighted averages
The weighted average remaining contractual life of any unlisted share options outstanding at the end of the year
is 4.11 years (2013: 4.27 years).
The assessed fair value at grant date of options granted during the year ended 30 June 2014 is outlined in the
Remuneration Report on page 14. The share price at grant date of these options ranged between $0.29 and
$0.39 (2013: $0.29 and $0.39). The expected average price volatility of the company shares was 57% (2013: 57%).
Expected dividend yield was 0% (2013: 0%) and the average risk free interest rate used was 3.19% (2013: 3.19%).
Additional details on options granted in prior years are available in those year’s Annual Reports.
NOTE 19: RESERVES
(a) Foreign Currency Translation Reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency
translation reserve, as described in Note 1(b). The reserve is recognised in profit or loss when the investment is
disposed of.
Opening balance
Exchange differences on translation of foreign operations
Closing balance
2014
$
2013
$
1,248,628
(645,886)
(355,014)
1,894,514
893,614
1,248,628
(b) Share-based Payments Reserve
The share-based payments reserve is used to recognise the fair value of options issued to the extent that they have
vested.
Opening balance
Option expense
Closing balance
Total reserves
NOTE 20: ACCUMULATED LOSSES
Balance at the beginning of the year
Net Profit/(Loss) for the year
Balance at the end of the year
69
2014
$
2013
$
1,670,042
1,533,134
150,923
136,908
1,820,965
1,670,042
2,714,579
2,918,670
2014
$
2013
$
(72,824,259)
(62,822,909)
3,206,616
(10,001,350)
(69,617,643)
(72,824,259)
NOTE 21: FINANCIAL INSTRUMENTS
(a) Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns whilst
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains unchanged from 2013. The capital structure of the Group consists of
debt, which includes borrowings (Note 15), cash and cash equivalents (Note 7) and equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained earnings (disclosed in Notes 18, 19 and 20
respectively).
The Group has global operations, primarily conducted through subsidiary companies established in the markets in
which the Group trades. None of the Group’s entities is subject to externally imposed capital requirements.
The Group’s policy is to fund the research and development activities and operations through the issue of equity
and the commercialisation of Intellectual Property assets. Minor borrowings for operational assets are utilised, as
appropriate.
(b) Categories of Financial Instruments
Financial assets
Loans and receivables
Cash and cash equivalents
Financial liabilities
Amortised cost
Contingent consideration at fair value
Reconciliation to total assets
Financial assets (as above)
Non-financial assets
Reconciliation to total liabilities
Financial liabilities (as above)
Non-financial liabilities
2014
$
2013
$
20,985,312
742,371
10,501,307
22,452,089
31,486,619
23,194,460
5,051,210
5,053,760
5,696,087
5,348,695
10,747,297
10,402,455
31,486,619
23,194,460
33,573,998
30,416,632
65,060,617
53,611,092
10,747,297
10,402,455
9,494,713
1,801,654
20,242,010
12,204,109
(c) Financial Risk Management Objectives
The Board, through the Audit and Risk Management (ARM) Committee, is responsible for ensuring there are
adequate policies in relation to risk management, compliance and internal control systems. In summary, Company
policies are designed to ensure significant strategic, operational, legal, reputational and financial risks are
identified, assessed, and effectively monitored and managed in a manner sufficient for a company of Bionomics’
size and stage of development to enable achievement of the Company’s business strategy and objectives.
The Company’s risk management policies are managed by the key management personnel and are reviewed by the
ARM Committee according to a timetable of assessment and review proposed by that Committee and approved by
the Board.
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 21: FINANCIAL INSTRUMENTS CONT.
(d) Market Risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates
(see 21(e) below) and interest rates (see 21(f) below). The Group uses derivative financial instruments to manage
its exposure to foreign currency risk, if and when appropriate and has no outstanding contracts at the end of the
period, including:
ª forward foreign exchange contracts and currency swaps to hedge the exchange rate risk arising on the payments
for clinical trials in non-Australian dollar denominated contracts.
The Group measures market risk exposures using sensitivity analysis. There has been no material change to the
Group’s exposure to market risks or the manner in which these risks are managed and measured.
Unless approved by the Chief Executive Officer and Managing Director and ARM Committee, interest rate
derivatives are not entered into.
(e) Foreign Currency Risk Management
The Group undertakes certain transactions denominated in foreign currencies; consequently exposures to
exchange rate fluctuations arise. Exchange rate exposures are managed in accordance with established policies.
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the end of the
reporting date are as follows:
EUR
USD
GBP
LIABILITIES
2014
$
2013
$
ASSETS
2014
$
989,261
955,052
1,371,560
1,565,744
1,069,479
20,885,161
465,031
43,067
-
2013
$
2,107,512
358,542
-
Foreign Currency Sensitivity Analysis
The Group is mainly exposed to Great Britain Pounds, Euros and US dollars.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against
the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally
to key management personnel and represents management’s assessment of the reasonably possible change in
foreign currency rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the year-end for a 10% change in foreign currency rates. A positive number
below indicates an increase in profit or equity where the Australian dollar strengthens 10% against the relevant
currency. For a 10% weakening of the Australian dollar against the relevant currency, there would be a comparable
impact on the profit or equity with the balances being the opposite.
EUR IMPACT
USD IMPACT
GBP IMPACT
2014
$
888
2013
$
2014
$
2013
$
2014
$
2013
$
10,828 (i)
(1,782,894)
59,717 (ii)
42,276
3,915 (iv)
(35,643)
(115,597) (iii)
26,584
4,914 (v)
-
-
Profit or loss
Equity
(i) this is mainly attributable to the exposure outstanding on Euro payables in the Group at the end of the
reporting period.
(ii) this is mainly attributable to the exposure to outstanding USD net assets at the end of the reporting period.
(iii) this is as a result of the changes in fair value of the net investment in a subsidiary denominated in Euros,
reflected in the foreign currency translation reserve.
71
NOTE 21: FINANCIAL INSTRUMENTS CONT.
Foreign Currency Sensitivity Analysis cont.
(iv) this is mainly attributable to the exposure outstanding on GBP payables in the Group at the end of the
reporting period.
(v) this is as a result of the changes in fair value of the net investment in a subsidiary denominated in USD,
reflected in the foreign currency translation reserve.
The Group’s sensitivity to foreign currency has increased during the current year mainly due to the mix of net assets
held in non-Australian dollar denominated currencies.
The sensitivity analysis may not represent the quantum of foreign exchange risk because the exposure at the end
of the reporting period does not reflect the exposure during the year. Requirements change during the financial
year depending on research and development activities being undertaken and contract research service financial
performance.
Forward Foreign Exchange Contracts
It is the policy of the Group to enter into forward foreign currency contracts to cover specific foreign currency
payments and receipts when appropriate (such as when there is a legal commitment to pay or receive foreign
currency or the Chief Executive Officer and Managing Director has a high degree of confidence (›90%) that a foreign
currency exposure will arise).
Under the Group’s Treasury Policy, the Chief Financial Officer (CFO) will manage the foreign exchange transaction
risk adopting the following guidelines:
ª generally hedge foreign exchange exposure identified above by entering into a forward currency contract.
ª the duration of any forward currency contract(s) will approximate the period in which the net currency exposure
arises.
ª recognising the uncertainty that exists in projecting forward foreign currency flows, a maximum net foreign
currency exposure position may be held at any point in time.
Due to the long-term nature of the net investment in the Euro and USD denominated wholly owned subsidiaries,
the investments will not be hedged into Australian dollars, with the result that the Australia dollar value of the
investments will fluctuate with the market rate through the foreign currency translation reserve.
There were no forward foreign currency (FC) contracts outstanding at the end of the reporting period.
(f) Interest Rate Risk Management
The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and variable interest
rates and lend funds at variable rates. The Group does not use interest rate swap contracts or forward interest rate
contracts.
Interest Rate Sensitivity Analysis
The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the
reporting period and the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period.
If interest rates had been 50 basis points higher / (lower) and all other variables were held constant, the Group’s:
ª loss for the year ended 30 June 2014 would increase / (decrease) by $76,447 (2013: increase / (decrease) by
$93,829). This is mainly attributable to the Group’s exposure to interest rates on its variable rate deposits.
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 21: FINANCIAL INSTRUMENTS CONT.
(g) Credit Risk Management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties
are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represents the Group’s maximum exposure to credit risk.
(h) Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board, who have built an appropriate liquidity
risk management framework for management of the Group’s short, medium and long term funding. The Group
manages liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of
financial assets and liabilities. Included in Note 15 is a listing of additional undrawn facilities that the group has at
its disposal to further reduce liquidity risk.
(i) Liquidity and Interest Rate Risk
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Group can be required to pay. The tables include both interest and principal cash flows.
INTEREST RATE MATURITY
WEIGHTED
AVERAGE
EFFECTIVE
INTEREST
RATE
%
LESS
THAN
1 MONTH
$
1–3
MONTHS
$
3–12
MONTHS
$
1–5
YEARS
$
5+
YEARS
$
TOTAL
$
2014
Non-interest bearing
3,756,968
-
-
-
Finance lease liability
7.11
12,571
25,142
113,139
196,739
Fixed interest rate
instruments
TOTAL
2013
3.19
550,000
-
106,168
318,505
4,319,539
25,142
219,307
515,244
Non-interest bearing
3,973,225
-
-
-
Finance lease liability
7.11
12,571
25,142
113,139
347,591
Fixed interest rate
instruments
TOTAL
3.81
550,000
-
7,002
80,592
4,535,796
25,142
120,141
428,183
-
-
-
-
-
-
-
-
3,756,968
347,591
974,673
5,079,232
3,973,225
498,443
637,594
5,109,262
(j) Fair Value of financial instruments
Some of the Group’s financial assets and liabilities are measured at fair value at the end of each reporting period.
The value of other financial assets and liabilities approximate their fair value. The following table gives information
about how the fair values of these financial assets and liabilities are determined.
73
NOTE 21: FINANCIAL INSTRUMENTS CONT.
(j) Fair Value of financial instruments cont.
FINANCIAL
ASSETS/
FINANCIAL
LIABILITIES
Contingent
consideration
in a business
combination
FAIR VALUE AS AT
FAIR VALUE
HIERARCHY
VALUATION
TECHNIQUE
30/06/2014
$
30/06/2013
$
Liabilities -
5,696,087
Liabilities -
5,348,695
Level 3
Discounted
cash flow
SIGNIFICANT
UNOBSERVABLE
INPUTS
RELATIONSHIP
OF
UNOBSERVABLE
INPUTS TO
FAIR VALUE
Discount rate
of 25% and
probability
adjusted inputs
The higher
the discount
rate, the lower
the value
NOTE 22: KEY MANAGEMENT PERSONNEL COMPENSATION
The aggregate compensation made to directors and other members of key management personnel of the Group is
set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total key management personnel compensation
2014
$
2013
$
1,363,111
1,245,426
50,720
49,778
-
-
211,835
96,025
1,625,666
1,391,229
NOTE 23: COMMITMENTS FOR EXPENDITURE
(a) Finance Leases
The Group leases scientific equipment under finance leases. The average lease term is three years (2013: four
years). Under the terms of the lease, the Group retains ownership at the completion of the agreed term. Interest
rates underlying all obligations under finance leases are fixed at the respective contract dates ranging from 3.12%
to 7.37% (2013: 4.5% to 7.29%) per annum.
Finance Lease Liabilities
Within one year
Later than one year but not greater than five
Future finance charges
Present value of minimum lease payments
MINIMUM LEASE
PAYMENTS
PRESENT VALUE
OF LEASE PAYMENTS
2014
$
2013
$
150,852
621,356
722,208
(27,967)
744,241
150,852
435,128
585,980
(55,445)
530,535
2014
$
141,307
602,934
744,241
-
2013
$
122,885
407,650
530,535
-
744,241
530,535
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 23: COMMITMENTS FOR EXPENDITURE CONT.
(a) Finance Leases cont.
Represented in the financial statements (Note 15) by:
Current borrowings
Non-current borrowings
2014
$
2013
$
238,600
505,641
744,241
130,376
400,159
530,535
(b) Operating Leases
Operating leases relate to business premises with lease terms of between two and ten years. The building premise
leases have options of +2 and +5+5 year terms respectively.
Payments recognised as an expense
Minimum lease payments
Non-cancellable operating lease commitments
Within one year
Later than one year but not greater than five
Later than five years
Minimum lease payments
2014
$
2013
$
850,955
850,955
1,017,196
1,003,196
3,877,702
4,095,463
1,727,286
2,575,996
6,622,184
7,674,655
The non-cancellable lease commitments include the rent payable under the sale and leaseback of the headquarters,
with settlement occurring on 13 July 2011.
(c) Rental Agreements
The Group sub-lets areas of its facility under agreements that are renewed annually. Rent received from these
agreements is treated according to the accounting policy outlined in Note 1(c).
Future Rental Income Receivable
Within one year
Later than one year but not greater than five
2014
$
2013
$
152,335
152,335
155,369
-
304,670
155,369
75
NOTE 24: EVENTS OCCURRING AFTER REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affect or may
significantly affect the results of the operations of the Group.
NOTE 25: REMUNERATION OF AUDITORS
During the financial year the following services were paid and payable to the external auditor:
2014
$
2013
$
Auditor of the Group
Audit or review of the financial report
Tax compliance including preparation of the income tax return
Other non-audit services
146,103
158,566
-
21,534
6,300
12,798
167,637
177,664
The auditor of Bionomics Limited is Deloitte Touche Tohmatsu.
It is the Group’s practice to employ Deloitte Touche Tohmatsu on assignments additional to their statutory audit duties
where their expertise and experience with the Group are important.
NOTE 26: CASH FLOW INFORMATION
Reconciliation of operating loss after income tax to net cash outflow from operating activities
2014
$
2013
$
Profit/(Loss) for the year after income tax
3,206,616
(10,001,350)
Items in loss
Depreciation and amortisation
Share-based payments
Income tax expense
Net unrealised foreign exchange differences
Interest received receivable
Changes in operating assets and liabilities
Decrease/(Increase) in debtors and other assets
Increase in accrued income
Increase in other operating assets
Decrease in inventory
Movement in provisions
Increase in unearned income
Increase in creditors and accruals
Net cash outflows from operating activities
1,500,936
1,245,815
150,923
740,329
136,908
38,175
(783,744)
869,526
(580,182)
(1,037,151)
(19,928,637)
204,317
(484,648)
(3,108,851)
(28,011)
15,103
(56,616)
36,758
147,389
240,366
3,230,143
19,259
(99,429)
1,362,138
(12,913,213)
(10,050,706)
76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 27: EARNINGS PER SHARE
Basic Earnings/(Loss) per share
Diluted Earnings/(Loss) per share
2014
CENTS
0.8
0.8
2013
CENTS
(2.7)
(2.7)
The basic and diluted Earnings/(Loss) per share amounts have been calculated using the ‘Profit/(Loss) after income
tax’ figure in the consolidated statement of comprehensive income.
Profit/(Loss) per share (Basic and Diluted):
Profit/(Loss) after tax for the year
2014
$
2013
$
3,206,616
(10,001,350)
2014
NUMBER
2013
NUMBER
Weighted average number of shares - Basic
Weighted average number of ordinary shares used in calculating basic earnings/
(loss) per share:
416,906,309
374,438,730
Weighted average number of shares – Diluted
Weighted average number of ordinary shares used in calculating basic earnings/
(loss) per share:
416,906,309
374,438,730
Shares deemed to be issued for no consideration in respect of:
- Employee options
3,422,823
468,564
Weighted average number of ordinary shares used in the calculation of diluted
earnings per share
420,329,132
374,907,294
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average
number of ordinary shares for the purposes of diluted earnings per share.
Employee options
2014
NUMBER
2013
NUMBER
1,540,000
5,107,000
NOTE 28: RELATED PARTY TRANSACTIONS
(a) Parent Entity
The immediate parent and ultimate controlling party of the Group is Bionomics Limited. Interests in subsidiaries
are set out in Note 11.
(b) Key Management Personnel
Disclosures relating to compensation of key management personnel are set out in Note 22 and the Directors’
Report.
(c) Other Transactions with Related Parties
Transactions between the Group and its related parties
77
NOTE 28: RELATED PARTY TRANSACTIONS CONT.
(c) Other Transactions with Related Parties cont.
During the financial year ended 30 June 2014, the following transactions occurred between the Group and its other
related parties:
ª research and development services between the parent and subsidiary entities totalled $8,262,893 (2013:
$4,246,642).
ª corporate support fees were charged between the Group’s entities of $641,216 (2013: $1,091,000) for
management and accounting support.
The following balances arising from transactions between the Group and its other related parties are outstanding
at reporting date:
ª loan receivables totalling $1,574,230 (2013: $1,124,647) are payable by the subsidiaries to the Parent entity.
All amounts advanced to or payable to related parties are unsecured and are subordinate to other liabilities.
Interest has been waived since 2010.
The amounts outstanding will be settled in cash. No guarantees have been given or received. No expense has been
recognised in the period for bad or doubtful debts in respect of the amounts owed by related parties.
Transactions between the Group and its associates were eliminated in the preparation of the consolidated financial
statements of the Group to the extent of the Group’s share in profits and losses of the associate resulting from
these transactions.
(d) Loans To and From Related Parties
No loans to or from related parties have occurred in the current or previous financial year.
(e) Loans to Directors and Other Key Management Personnel
There were no loans to any directors of the Company or other key management personnel of the Group during the
financial year ended 30 June 2014.
NOTE 29: PARENT ENTITY INFORMATION
The accounting policies of the parent entity, which have been applied in determining the financial information shown
below, are the same as those applied in the consolidated financial statements. Refer to Note 1 for a summary of the
significant accounting polices relating to the Group.
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
YEAR ENDED
30 JUNE 2014
$
YEAR ENDED
30 JUNE 2013
$
40,037,551
31,203,186
19,030,987
20,750,731
59,068,538
51,953,917
8,257,939
5,287,458
6,020,532
5,096,108
14,278,471
10,383,566
44,790,067
41,570,351
78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
NOTE 29: PARENT ENTITY INFORMATION CONT.
Equity
Issued capital
Accumulated losses
Share-based payments reserve
Total equity
Financial Performance
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income
YEAR ENDED
30 JUNE 2014
$
YEAR ENDED
30 JUNE 2013
$
111,721,671
111,312,572
(68,752,569)
(71,412,263)
1,820,965
1,670,042
44,790,067
41,570,351
YEAR ENDED
30 JUNE 2014
$
YEAR ENDED
30 JUNE 2013
$
4,371,102
(8,774,362)
-
-
4,371,102
(8,774,362)
(a) Property, Plant and Equipment Commitments
There are no contractual commitments for the acquisition of property, plant or equipment as at 30 June 2014
(2013: Nil).
(b) Contingent Liabilities and Guarantees
There are no contingent liabilities or guarantees as at 30 June 2014 (2013: Nil).
NOTE 30: BUSINESS COMBINATIONS – ACQUISITION OF ECLIPSE THERAPEUTICS, INC
On 17 September 2012, the Company announced the acquisition of Eclipse Therapeutics, Inc into the wholly
owned subsidiary Bionomics, Inc with effect from 14 September 2012. Bionomics, Inc is engaged in Cancer Stem
Cell research and development activities and is complementary to the Group’s existing oncology research and
development program.
Consideration Transferred
Shares issued
Cash
Total consideration
Contingent consideration (i)
NUMBER
$
23,890,718
7,645,029
-
17,808
23,890,718
7,662,837
4,681,749
12,344,586
(i) The contingent consideration is the estimated fair value at the date of acquisition of the potential cash earn-
outs to Eclipse security holders based on achieving late stage development success or partnering outcomes
based on Eclipse assets. Due to the movement in the US dollar and unwinding of interest, at 30 June 2014 this
was $5,696,087 (30 June 2013: $5,348,695).
79
NOTE 30: BUSINESS COMBINATIONS – ACQUISITION OF ECLIPSE THERAPEUTICS, INC CONT.
Assets Acquired and Liabilities Assumed at the Date of Acquisition
Current assets
Cash and cash equivalents
Other current assets
Non-current assets
Plant and equipment
Intellectual property
Goodwill
Assets Acquired and Liabilities Assumed at the Date of Acquisition
Current liabilities
Trade and other payables
Non-current liabilities
Deferred tax liability
$
270,525
7,256
109,853
12,703,228
4,607,531
$
(746,276)
(4,607,531)
12,344,586
In accordance with the Accounting Standard AASB 3 ‘Business Combinations’, the Company was able to
provisionally determine the initial accounting for the acquisition. The intangible assets had been provisionally
determined based on the directors’ best estimate of the likely fair value at $12,703,228. It has been noted that the
calculation of the consideration transferred and intangible assets including, but not limited to intellectual property,
goodwill and deferred tax assets has been amended as further information to support these values was obtained.
During the half-year ended 31 December 2013, a deferred tax liability was recognised, as the carrying amount of the
Intellectual Property exceeded its tax base affecting goodwill. This is partially offset by the deferred tax asset for
the recognition of unused tax losses available as part of the acquisition.
Impact of acquisition on the results of the Group
Included in the loss for the prior year (2013) is $434,272 attributable to this acquisition. Had the acquisition been
effected at 1 July 2012, the loss from continuing operations for the whole 2013 year would have increased by a total
of $833,000. The directors of the Group consider these ‘pro-forma’ numbers to represent an approximate measure
of the performance of the combined group.
In determining the ‘pro-forma’ loss of the Group had Eclipse Therapeutics, Inc been acquired at the beginning of the
prior year, the directors have:
ª calculated depreciation of plant and equipment acquired on the basis of the fair values arising in the initial
accounting for the business combination rather than the carrying amounts recognised in the pre-acquisition
financial statements;
ª included savings for work performed within the Group rather than outsourced; and
ª assumed a similar rate of progress for the research and development.
NOTE 31: CONTINGENT LIABILITIES
There are no contingent liabilities.
80
DIRECTORS’ DECLARATION
The directors declare that:
a) 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;
b) in the directors’ opinion, the attached financial statements are in compliance with International Financial
Reporting Standards issued by the International Financial Reporting Standards, as stated in note 1 to the
financial statements;
c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the
financial position and performance of the consolidated entity; and
d) the directors have been given the declarations required by section 295A of the Corporations Act 2001.
At the date of this declaration, the company is within the class of companies affected by ASIC Class Order 98/1418.
The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each
creditor payment in full of any debt in accordance with the deed of cross guarantee. In the directors’ opinion, there
are reasonable grounds to believe that the company and the companies to which the ASIC Class Order applies, as
detailed in Note 11 to the financial statements will, as a group, be able to meet any obligations or liabilities to which
they are, or may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations
Act 2001.
On behalf of the directors
Graeme Kaufman
Chairman
Deborah Rathjen
Chief Executive Officer and Managing Director
Dated this 19th day of August 2014
81
INDEPENDENT AUDIT REPORT
82
INDEPENDENT AUDIT REPORT
83
SHAREHOLDER INFORMATION
All shareholder information provided is current as at 31 August 2014.
Difference in Results Reported to the ASX
There are no material differences between the figures reported in the financial statements and those lodged with
the ASX in the Company’s Appendix 4E for the year ended 30 June 2014, other than those previously announced to
the market.
Audit and Risk Management Committee
The Company established an Audit and Risk Management Committee in July 2002. The main responsibilities of the
Audit and Risk Management Committee are set out in the section headed ‘Corporate Governance Statement’ of the
Annual Report.
Corporate Governance
Bionomics’ corporate governance practices are set out in the section headed ‘Corporate Governance Statement’ of
the Annual Report.
Substantial Shareholders
Substantial holders in the Company are set out below:
ORDINARY SHARES
Link Traders (Aust) Pty Ltd
John Leaver
Ausbil Dexia Limited
The Australian National University
NUMBER HELD
40,187,873
24,241,071
24,000,000
21,642,425
Equity Securities
There are 4,564 holders of ordinary shares in Bionomics.
The number of shareholdings held in less than marketable parcels is 316.
Voting Rights
There is one class of quoted equity securities issued by the Company, ordinary, with voting rights
attached to the ordinary shares. One share equates to one vote.
Distribution of Holders of Equity Securities
CATEGORY (SIZE OF HOLDING)
ORDINARY SHARES
UNLISTED OPTIONS
NUMBER OF SECURITY HOLDERS
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
496
1,379
798
1,586
305
4,564
-
-
6
24
15
45
84
SHAREHOLDER INFORMATION
Twenty largest holders of each class of quoted equity securities
The names of the 20 largest holders of each class of quoted equity securities are listed below:
ORDINARY SHARES
NAME
1 National Nominees Limited
2 Link 405 Pty Ltd
3 HSBC Custody Nominees (Australia) Limited
4 The Australian National University
5 CVC Limited
6 Leagou Funds Management Pty Ltd
7 HSBC Custody Nominees (Australia) Limited ‹NT-Comnwlth Super Corp AC›
8 J P Morgan Nominees Australia Limited
9 Citicorp Nominees Pty Limited
10 Leagou Funds Management Pty Limited
11 City Hill Venture Partners I LLC
12 Wenola Pty Limited
13 Balzac Investments Pty Ltd
14 Longfellow Nominees Pty Ltd
15 BNP Paribas Noms Pty Ltd
16 Citicorp Nominees Pty Limited
17 HSBC Custody Nominees (Australia) Limited–GSCO ECA
18 Mr Mark Richard Potter and Mrs Rebecca Amy Potter
19 Mr Christopher Reyes
20 AW & JE Wilks Pty Ltd
NUMBER
HELD
70,739,936
39,578,873
29,491,520
21,142,425
16,632,212
10,405,814
9,643,931
6,748,398
6,706,954
5,139,695
5,012,331
5,000,000
4,800,000
4,500,000
4,017,193
3,711,404
3,603,463
3,400,000
3,029,205
2,655,000
PERCENTAGE
OF ISSUED
SHARES
16.95
9.48
7.07
5.07
3.99
2.49
2.31
1.62
1.61
1.23
1.20
1.20
1.15
1.08
0.96
0.89
0.86
0.81
0.73
0.64
UNQUOTED EQUITY SECURITIES
Options issued pursuant to Bionomics Limited Employee Share Option Plan
255,958,354
61.33
NUMBER ON
ISSUE
NUMBER OF
HOLDERS
9,458,782
9,458,782
45
45
85
COMPANY PARTICULARS
Bionomics, a listed public Company, is domiciled and
incorporated in Australia.
Dr Forrest Fuller
Bionomics shares are listed on the Australian Securities
Exchange under the code BNO.
Dr Andrew Harvey
CONTENTS
PG 1
VISION
PG 17 MANAGEMENT
PG 2
HIGHLIGHTS
PG 18 CORPORATE GOVERNANCE STATEMENT
PG 3
CHAIRMAN’S LETTER
PG 23 DIRECTORS’ REPORT
PG 4
CEO & MANAGING DIRECTOR’S REPORT
PG 36 ANNUAL FINANCIAL STATEMENTS
PG 10 PIPELINE
PG 82
INDEPENDENT AUDIT REPORT
PG 14
INTELLECTUAL PROPERTY PORTFOLIO
PG 84 SHAREHOLDER INFORMATION
PG 15 BOARD OF DIRECTORS
PG 86 COMPANY PARTICULARS
BIONOMICS IS DISCOVERING
AND DEVELOPING
INNOVATIVE THERAPEUTICS
FOR SERIOUS MEDICAL CONDITIONS,
WORKING WITH PARTNERS TO
ACHIEVE SIGNIFICANT OUTCOMES
FOR PATIENTS, SHAREHOLDERS
AND EMPLOYEES
Bionomics is a leader in the discovery and development of innovative biopharmaceuticals with
operations in Australia, Europe and US.
The Company undertakes discovery, development and strategic partnering of first in class and best
in class drugs to treat patients with serious medical conditions including cancer and central nervous
system disorders.
Bionomics utilizes key global, strategic partnerships for the commercialisation of its drugs.
REGISTERED AND ADMINISTRATIVE OFFICE
31 Dalgleish Street
Thebarton SA Australia 5031
Telephone: +61 8 8354 6100
Facsimile: +61 8 8354 6199
E-mail: info@bionomics.com.au
Web Address: www.bionomics.com.au
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA Australia 5000
Telephone: 1300 556 161 (within Australia)
+61 3 9415 4000 (outside Australia)
E-mail: web.queries@computershare.com.au
Web Address: www.computershare.com
SOLICITORS
Johnson Winter & Slattery
211 Victoria Square
Adelaide SA Australia 5000
AUDITORS
Deloitte Touche Tohmatsu
11 Waymouth Street
Adelaide SA Australia 5000
PATENT ATTORNEYS
Griffith Hack
Level 10, 161 Collins Street
Melbourne VIC Australia 3000
Davies Collison Cave
1 Nicholson Street
Melbourne VIC Australia 3000
Bionomics is not listed on any other stock exchanges
other than the ASX.
DIRECTORS
Mr Graeme Kaufman
Chairman
Dr Deborah Rathjen
Chief Executive Officer
and Managing Director
Mr Trevor Tappenden
Non-Executive Director
Dr Errol De Souza
Non-Executive Director
Dr Jonathan Lim
Non-Executive Director
SENIOR MANAGEMENT
Dr Deborah Rathjen
Dr Emile
Andriambeloson
Dr Peter Chu
Chief Executive Officer
and Managing Director
Head of Research,
Neurofit
Vice President US
Operations & Cancer
Biology
Vice President Business
Development
Vice President Drug
Discovery
Chief Medical Officer
Vice President Research
and Development
Senior Director, CNS
Research & Development
Vice President Research
and Development Biologics
Vice President Clinical
Development
Chief Financial Officer
and Company Secretary
Dr José Iglesias
Dr Gabriel Kremmidiotis
Dr Sue O’Connor
Dr Christopher Reyes
Dr Jeremy Simpson
Ms Melanie Young
SCIENTIFIC ADVISORS
Dr Carrolee Barlow PhD MD BA
Dr Dennis Carson MD BA
Dr Philippe Danjou MD PhD
Dr Jayesh Desai FRACP
Dr Errol De Souza PhD
Professor Paul Fitzgerald PhD MSc
Dr Richard Hargreaves PhD
Dr Ann Hayes PhD BSc
Dr Fiona McLaughlin PhD FSB
Dr Jens D Mikkelsen MD PhD
Dr Christopher J Sweeney MBBS
Dr CD Nigel Toseland FRCPath
Bionomics has an American Depositary Receipts
program (ADRs) sponsored by BNY Mellon, under the
ticker code ‘BMICY’. For further details about this program,
please contact:
UNITED STATES
BNY Mellon Shareowner Services
PO Box 358516, Pittsburgh, PA 15252-8516
Toll Free Number for Domestic Calls:
+1 888 BNY ADRS or +1888 269 2377
Number for International Calls: +1 201 680 6825
Email: shrrelations@bnymellon.com
or visit BNY Mellon Shareowner Services’
website at www.bnymellon.com\shareowner
AUSTRALIA
Mr Anthony Sprenger, Vice President
BNY Mellon Depositary Receipts
Australia & New Zealand
The Bank of New York
Level 5, 350 Collins Street, Melbourne VIC 3000
Telephone: +61 3 9640 3907
Facsimile: +61 3 9602 1236
E-mail: anthony.sprenger@bnymellon.com
31 DALGLEISH STREET,
THEBARTON, SA
AUSTRALIA, 5031
WWW.BIONOMICS.COM.AU
ABN 53 075 582 740
2014
BIONOMICS
ANNUAL
REPORT